Exhibit 10.7
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AMENDED AND RESTATED CREDIT AGREEMENT
among
BIG CITY RADIO, INC.
The Several Lenders
from Time to Time Parties Hereto
and
The Chase Manhattan Bank,
as Agent
Dated as of December __, 1997
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . 15
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . . . 15
2.1 Revolving Credit Commitments. . . . . . . . . . . . . . . . . . . . 15
2.2 Procedure for Revolving Credit Borrowing. . . . . . . . . . . . . . 16
2.3 Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.4 Termination or Reduction of Commitments . . . . . . . . . . . . . . 16
2.5 Repayment of Loans; Evidence of Debt. . . . . . . . . . . . . . . . 17
2.6 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . . . . 18
2.7 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . 18
2.8 Conversion and Continuation Options . . . . . . . . . . . . . . . . 19
2.9 Minimum Amounts and Maximum Number of Tranches. . . . . . . . . . . 19
2.10 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . 20
2.11 Computation of Interest and Fees . . . . . . . . . . . . . . . . . 20
2.12 Inability to Determine Interest Rate . . . . . . . . . . . . . . . 21
2.13 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . . . 21
2.14 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.15 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . . 22
2.16 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.17 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.18 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . 26
2.19 Certain Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 3. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 26
3.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . 26
3.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.3 Corporate Existence; Compliance with Law. . . . . . . . . . . . . . 27
3.4 Corporate Power; Authorization; Enforceable Obligations . . . . . . 27
3.5 No Legal Documents Bar. . . . . . . . . . . . . . . . . . . . . . . 28
3.6 No Material Litigation. . . . . . . . . . . . . . . . . . . . . . . 28
3.7 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.8 Ownership of Property; Liens. . . . . . . . . . . . . . . . . . . . 28
3.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . 29
3.10 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . 29
3.11 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.12 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . . . 29
3.13 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.14 Investment Company Act; Other Regulations. . . . . . . . . . . . . 30
3.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.16 Purpose of Loans . . . . . . . . . . . . . . . . . . . . . . . . . 30
3.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . 30
3.18 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3.19 FCC Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 32
4.1 Conditions to Initial Extensions of Credit. . . . . . . . . . . . . 32
4.2 Conditions to Each Extension of Credit. . . . . . . . . . . . . . . 35
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Page
SECTION 5. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 36
5.1 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . 36
5.2 Certificates; Other Information . . . . . . . . . . . . . . . . . . 37
5.3 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . 37
5.4 Conduct of Business and Maintenance of Existence. . . . . . . . . . 38
5.5 Maintenance of Property; Insurance. . . . . . . . . . . . . . . . . 38
5.6 Inspection of Property; Books and Records; Discussions. . . . . . . 38
5.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.8 Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . . . 39
5.9 Assignments of Leases . . . . . . . . . . . . . . . . . . . . . . . 39
5.10 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 41
6.1 Financial Condition Covenants . . . . . . . . . . . . . . . . . . . 41
6.2 Limitation on Indebtedness. . . . . . . . . . . . . . . . . . . . . 42
6.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . 43
6.4 Limitation on Guarantee Obligations . . . . . . . . . . . . . . . . 44
6.5 Limitation on Fundamental Changes . . . . . . . . . . . . . . . . . 44
6.6 Limitation on Sale of Assets. . . . . . . . . . . . . . . . . . . . 44
6.7 Limitation on Leases. . . . . . . . . . . . . . . . . . . . . . . . 44
6.8 Limitation on Dividends . . . . . . . . . . . . . . . . . . . . . . 45
6.9 Limitation on Capital Expenditures. . . . . . . . . . . . . . . . . 45
6.10 Limitation on Investments, Loans and Advances. . . . . . . . . . . 45
6.11 Limitation on Optional Payments and Modifications of Debt
Instruments or Agreements . . . . . . . . . . . . . . . . . . . . . 45
6.12 Limitation on Transactions with Affiliates . . . . . . . . . . . . 46
6.13 Limitation on Sales and Leasebacks . . . . . . . . . . . . . . . . 46
6.14 Limitation on Changes in Fiscal Year . . . . . . . . . . . . . . . 46
6.15 Limitation on Negative Pledge Clauses. . . . . . . . . . . . . . . 46
6.16 Limitation on Lines of Business and Local Marketing and Sales
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.17 Restrictions on Member and License Subsidiaries. . . . . . . . . . 46
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . 47
SECTION 8. THE AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
8.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . . . . 51
8.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . . . . 51
8.4 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.6 Non-Reliance on Agent and Other Lenders . . . . . . . . . . . . . . 52
8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 52
8.8 Agent in Its Individual Capacity. . . . . . . . . . . . . . . . . . 53
8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . 54
9.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
9.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . . . . 55
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9.4 Survival of Representations and Warranties. . . . . . . . . . . . . 55
9.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . . . . 55
9.6 Successors and Assigns; Participations and Assignments. . . . . . . 56
9.7 Termination of Agreements . . . . . . . . . . . . . . . . . . . . . 58
9.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.10 Integration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.11 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.12 Submission To Jurisdiction; Waivers. . . . . . . . . . . . . . . . 59
9.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.14 WAIVERS OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . 60
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December __, 1997,
among BIG CITY RADIO, INC.(formerly known as Odyssey Communications, Inc.), a
Delaware corporation (the "BORROWER"), the several banks and other financial
institutions from time to time parties to this Agreement (the "LENDERS") and The
Chase Manhattan Bank, a New York banking corporation, as agent for the Lenders
hereunder (in such capacity, the "AGENT").
WHEREAS, the Borrower, the Agent, and the lenders parties thereto (the
"EXISTING LENDERS") are parties to the Credit Agreement, dated as of May 30,
1996 (as amended and waived to the date hereof, the "EXISTING CREDIT
AGREEMENT"), pursuant to which the Existing Lenders made loans to the Borrower
to enable the Borrower to consummate acquisitions of radio stations, to repay
Indebtedness, and for other corporate purposes; and
WHEREAS, the Borrower intends to consummate a registered initial public
offering of up to 35% of the common shares of the Borrower (the "IPO"); and
WHEREAS, the Borrower has requested that the Agent and the Lenders amend
and restate the Existing Credit Agreement to, INTER ALIA, refinance and extend
the Revolving Credit Commitments under the Existing Credit Agreement and for
working capital and general corporate purposes; and
WHEREAS, the Agent and the Lenders are willing to so amend and restate the
Existing Credit Agreement, but only on the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, effective as of the Closing Date, the parties hereto
hereby amend and restate the Existing Credit Agreement as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%.
For purposes hereof: "PRIME RATE" shall mean the rate of interest per
annum publicly announced from time to time by the Agent as its prime rate
in effect at its principal office in New York City (the Prime Rate not
being intended to be the lowest rate of interest charged by The Chase
Manhattan Bank in connection with extensions of credit to debtors); "BASE
CD RATE" shall mean the sum of (a) the product of (i) the Three-Month
Secondary CD Rate and (ii) a fraction, the numerator of which is one and
the denominator of which is one minus the C/D Reserve Percentage and (b)
the C/D Assessment Rate; "THREE-MONTH SECONDARY CD RATE" shall
mean, for any day, the secondary market rate for three-month certificates
of deposit reported as being in effect on such day (or, if such day shall
not be a Business Day, the next preceding Business Day) by the Board
through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day
or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center
banks in New York City received at approximately 10:00 A.M., New York City
time, on such day (or, if such day shall not be a Business Day, on the next
preceding Business Day) by the Agent from three New York City negotiable
certificate of deposit dealers of recognized standing selected by it; and
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for the day of such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by it. Any change in the ABR due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day of
such change in the Prime Rate, the Base CD Rate or the Federal Funds
Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is based
upon the ABR.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, "control" of a Person means the power, directly or indirectly,
either to (a) vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) direct or cause
the direction of the management and policies of such Person, whether by
contract or otherwise.
"AGENT": The Chase Manhattan Bank, together with its affiliates, as
the arranger of the Commitments and as the agent for the Lenders under this
Agreement and the other Loan Documents.
"AGREEMENT": this Amended and Restated Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"APPLICABLE MARGIN": the rate per annum set forth in the table below
opposite the ratio of Total Debt to EBITDA then in effect. Such Applicable
Margin shall be in effect
3
for the period beginning the second Business Day following the date on
which the Responsible Officer's certificate provided pursuant to subsection
5.2(b) is delivered to the Lenders and ending on the first Business Day
following the date on which the next such Responsible Officer's certificate
is delivered to the Lenders; PROVIDED, that, if for any reason the
Responsible Officer's certificate required by subsection 5.2(b) is not
delivered in accordance with such subsection to the Lenders, the ratio of
Total Debt to EBITDA shall, for purposes of determining the Applicable
Margin, be deemed to be greater than or equal to 5.0 to 1 for each day
during the period from and including the day such Responsible Officer's
certificate was required to be delivered pursuant to subsection 5.2(b) to
the day such Responsible Officer's certificate is so delivered; and
PROVIDED, FURTHER, that for the period from and including the Closing Date
to the first Business Day following the date on which the Borrower is
required to deliver the Responsible Officer's certificate pursuant to
subsection 5.2(b) for the fiscal quarter ending March 31, 1998, the ratio
of Total Debt to EBITDA shall, for purposes of determining Applicable
Margin, be deemed to be greater than or equal to 5.0 to 1.
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Total Debt/
EBITDA ABR + LIBOR +
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> or equal to 5.0X 2.00% 3.00%
> or equal to 4.0X, < 5.0X 1.50% 2.50%
> or equal to 3.0X, < 4.0X 1.00% 2.00%
< 3.0X 0.50% 1.50%
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"ASSIGNEE": as defined in subsection 9.6(c).
"ASSIGNMENT OF LEASES": any Assignment of Lease executed at any time
by the Borrower or any Subsidiary in favor of the Agent for the benefit of
the Lenders in form and substance reasonably satisfactory to the Agent as
the same may be amended, supplemented or otherwise modified from time to
time.
"AVAILABLE COMMITMENT": as to any Lender, at any time, an amount
equal to the excess, if any, of (a) the amount of such Lender's Commitment
over (b) the aggregate principal amount of all Loans made by such Lender
then outstanding.
"BOARD": the Board of Governors of the Federal Reserve System (or any
successor thereto).
"BORROWER": as defined in the recitals hereto.
4
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.2 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"BUSINESS": as defined in subsection 3.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law
to close.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person (other than a
corporation) and any and all warrants or options to purchase any of the
foregoing.
"CASH EQUIVALENTS": (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by
the United States Government or any agency thereof, (b) certificates of
deposit and eurodollar time deposits with maturities of one year or less
from the date of acquisition and overnight bank deposits of any Lender or
of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition, having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper
of a domestic issuer rated at least A-2 by S&P or P-2 by ▇▇▇▇▇'▇, (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the
United States, by any political subdivision or taxing authority of any such
state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at
least A by S&P or A by ▇▇▇▇▇'▇, (f) securities with maturities of one year
or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"C/D ASSESSMENT RATE": for any day as applied to any ABR Loan, the
annual assessment rate in effect on such day which is payable by a member
of the Bank Insurance Fund maintained by the FDIC classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R.
Section 327.3(d) (or any successor provision) to the FDIC
5
(or any successor) for the FDIC's (or such successor's) insuring time
deposits at offices of such institution in the United States.
"C/D RESERVE PERCENTAGE": for any day as applied to any ABR Loan,
that percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board, for determining the maximum reserve requirement
for a Depositary Institution (as defined in Regulation D of the Board) in
respect of new non-personal time deposits in Dollars having a maturity of
30 days or more.
"CHASE": The Chase Manhattan Bank.
"CLOSING DATE": the date on which the conditions precedent set forth
in subsection 4.1 shall be satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by any
Security Document.
"COMMITMENT": as to any Lender, the obligation of such Lender to make
Loans to the Borrower hereunder in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule I, as such amount may be reduced from time to time in
accordance with the provisions of this Agreement.
"COMMITMENT PERCENTAGE": as to any Lender at any time, the percentage
which such Lender's Commitment bears to the aggregate Commitments (or, at
any time after the Commitments shall have expired or terminated, the
percentage which the aggregate principal amount of such Lender's Loans then
outstanding bears to the aggregate principal amount of all Loans then
outstanding).
"COMMITMENT PERIOD": the period from and including the Closing Date
to but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"COMMONLY CONTROLLED ENTITY": any trade or business, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code.
"COMMUNICATIONS ACT": the Communications Act of 1934, as amended.
6
"CONSOLIDATED FIXED CHARGES": for any period the sum of:
(a) Net Cash Interest Expense;
(b) Debt Service; and
(c) Consolidated Lease Expense, determined without duplication of
items included in Net Cash Interest Expense, in each case of the Borrower
on a consolidated basis.
"CONSOLIDATED LEASE EXPENSE": for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrower, determined on a
consolidated basis in accordance with GAAP, for such period with respect to
leases of real and personal property.
"CONSOLIDATED NET INCOME": for any period, net income of the
Borrower, determined on a consolidated basis in accordance with GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"DEBT SERVICE": with respect to the Borrower for any period, the sum
of Net Cash Interest Expense for such period and scheduled principal
amortization or commitment reductions of Total Debt (including unborrowed
revolving credit commitments) for such period, whether or not made.
"DEFAULT": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"EBITDA": with respect to the Borrower for any period, the sum of (a)
the net income of the Borrower for such period PLUS, to the extent deducted
in computing such net income, the sum of (i) income tax expense, (ii)
interest expense (including deferred interest expense), (iii) depreciation
and amortization expense, (iv) any extraordinary losses and (v) any expense
items with respect to acquisitions by the Borrower or any of its Affiliates
of radio stations, and MINUS to the extent added in computing such net
income, (i) any interest income and (ii) any extraordinary gains, all as
determined with respect to the Borrower on a consolidated basis in
accordance with GAAP.
7
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability
or standards of conduct concerning protection of human health or the
environment, as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate at which Chase is offered Dollar deposits at or about 10:00 A.M., New
York City time, two Business Days prior to the beginning of such Interest
Period in the interbank eurodollar market where the eurodollar and foreign
currency and exchange operations in respect of its Eurodollar Loans are
then being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of its Eurodollar Loan to be outstanding during such Interest
Period.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for
such day in accordance with the following formula (rounded upward to the
nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in Section 7,
PROVIDED that any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied.
8
"EXCESS CASH FLOW": for any fiscal year of the Borrower, EBITDA for
such fiscal year, LESS the sum of (a) Debt Service of the Borrower for such
fiscal year, (b) capital expenditures paid in cash by the Borrower during
such fiscal year and (c) taxes paid in cash by the Borrower.
"EXISTING CREDIT AGREEMENT": as defined in the recitals hereto.
"EXISTING LENDERS": as defined in the recitals hereto.
"EXISTING LOANS": as defined in subsection 2.1(b).
"FCC": the Federal Communications Commission or any successor to the
functions and powers thereof.
"FCC LICENSES": with respect to any radio station owned or operated
by the Borrower or any Subsidiary, all FCC licenses, permits and approvals
necessary for the lawful operation of such radio station.
"FCC RULES": as defined in subsection 3.19.
"FDIC": the Federal Deposit Insurance Corporation.
"FINAL ORDERS": with respect to the assignment of any FCC License or
transfer of control over an FCC License from one Person to another, an
order by the FCC consenting to such assignment or transfer, in the case of
a pro forma assignment or transfer of control not involving a substantial
change in ownership or control, when effective and, in the case of all
other assignments or transfers of control, when the time for administrative
or judicial review has expired and the time for the filing of any protest,
request for stay, petition for rehearing, or appeal has expired and no
protest, request for stay, petition for rehearing or appeal is pending.
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"FORESTRY SERVICE LICENSE": the license in respect of the right to
operate the radio transmitter located on that certain parcel of land
situated within the Angeles National Forest.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial,
9
regulatory or administrative functions of or pertaining to government.
"INDEBTEDNESS": of any Person at any date, (a) all indebtedness of
such Person for borrowed money or for the deferred purchase price of
property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is evidenced by
a note, bond, debenture or similar instrument, (c) all obligations of such
Person under Financing Leases, (d) all obligations of such Person in
respect of acceptances or Letters of Credit issued or created for the
account of such Person and (e) all liabilities secured by any Lien on any
property owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof.
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTEREST EXPENSE": for any period, the amount of interest expense on
the Total Debt of the Borrower for such period, determined on a
consolidated basis in accordance with GAAP.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
March, June, September and December, (b) as to any Eurodollar Loan having
an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any Eurodollar Loan, each day which is three months,
or a whole multiple thereof, after the first day of such Interest Period
and the last day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Agent not less
10
than three Business Days prior to the last day of the then current Interest
Period with respect thereto;
PROVIDED that, all of the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a Eurodollar Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date or such date of
final payment, as the case may be; and
(iii) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of a calendar month.
"IPO": as defined in the recitals hereto.
"LANDLORD'S CONSENT": A Landlord's Consent executed at any time by a
landlord in respect of any leased property subject to any Assignment of
Lease, in form and substance reasonably satisfactory to the Agent, as the
same may be amended, supplemented or otherwise amended from time to time.
"LICENSES": as defined in subsection 3.19.
"LICENSE SUBSIDIARY": any wholly-owned sole purpose Subsidiary Loan
Party of the Borrower formed for the exclusive purpose of holding FCC
Licenses pursuant to organizational documents reasonably satisfactory to
the Agent.
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
11
"LOAN": any loan made by any Lender pursuant to this Agreement
including any Existing Loan.
"LOAN DOCUMENTS": this Agreement, any Notes and the Security
Documents.
"LOAN PARTIES": the Borrower and any of its Subsidiaries which is a
party to a Loan Document.
"LOANS": as defined in subsection 2.1.
"LOCAL MARKETING AND SALES AGREEMENT": as to any Person, all
agreements to which such Person is a party pursuant to which such Person
has the right to direct the programming with respect to a radio station
(and related FCC License) owned by another Person and/or pursuant to which
such Person has the right to sell advertising in connection with a radio
station (and related FCC License) owned by another Person.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agent or the Lenders hereunder or thereunder.
"MATERIAL ENVIRONMENTAL AMOUNT": an amount finally determined by
legal process or executed settlement agreement to be payable by the
Borrower in excess of $1,000,000 for remedial costs, compliance costs,
compensatory damages, punitive damages, fines, penalties or any combination
thereof.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"MEMBER": the collective reference to [Metro Market Broadcasting,
Inc.] and any other wholly-owned Subsidiary Loan Party of the Borrower
which is a member in, or partner of, any License Subsidiary.
"MOODY'S": ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
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"NET CASH INTEREST EXPENSE": with respect to the Borrower for any
period, the sum of interest in respect of Total Debt paid by the Borrower
in cash during such period, MINUS all interest earnings received by the
Borrower in cash during such period, in each case determined on a
consolidated basis in accordance with GAAP.
"NET CASH PROCEEDS": with respect to the sale, transfer or other
disposition of any assets of the Borrower or any Subsidiary, 100% of the
cash proceeds of such sale, transfer or other disposition (including when
received, any such proceeds, the payment of which is deferred) and any
portion of the purchase price deposited in an escrow account pursuant to
the relevant acquisition agreement (the "ESCROW AMOUNT") net of (i)
attorneys' fees, accountants' fees, investment banking fees, survey costs,
title insurance premiums, and related search and recording charges,
transfer taxes, deed or mortgage recording taxes, required debt payments
(other than pursuant hereto), other customary expenses and brokerage,
consultant and other customary fees actually incurred in connection
therewith (other than such amounts payable to Affiliates) (ii) any portion
of the Escrow Amount retained by the purchaser of any Station pursuant to a
final determination under the relevant acquisition agreement and (iii)
taxes paid or payable by the Borrower or any Subsidiary as a result
thereof.
"NON-EXCLUDED TAXES": as defined in subsection 2.16.
"NOTE": as defined in subsection 2.5(e).
"OBLIGATIONS": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans or any Notes and all
other obligations and liabilities of the Borrower to the Agent or to the
Lenders, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any Notes or the other Loan
Documents and any other document made, delivered or given in connection
therewith or herewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of counsel to the
Agent or to the Lenders that are required to be paid by the Borrower
pursuant to the terms of this Agreement) or otherwise.
"OPERATING AGREEMENT": with respect to any FCC License held by a
License Subsidiary, an agreement in form and
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substance reasonably satisfactory to the Agent between such License
Subsidiary and the Borrower providing for the Borrower to (a) operate such
FCC License and (b) in its own name, perform or cause to be performed and
to satisfy all obligations or requirements arising under or relating to
such FCC License.
"PARTICIPANT": as defined in subsection 9.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"PERSON": an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which is
covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PROPERTIES": as defined in subsection 3.17.
"REGISTER": as defined in subsection 9.6(d).
"REGULATIONS G, T, U, AND X": Regulations G, T, U, and X of the Board
as in effect from time to time.
"REINVESTMENT AMOUNT": as defined in subsection 2.5(d).
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"REQUIRED LENDERS": at any time, Lenders the Commitment Percentages
of which aggregate more than 50%.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
14
"RESPONSIBLE OFFICER": the chief executive officer and the president
of the Borrower or, with respect to financial matters, the chief financial
officer of the Borrower.
"SECURITY AGREEMENT": the Amended and Restated Security Agreement to
be executed by the Borrower, a form of which is attached as Exhibit G, as
the same may be amended, supplemented or otherwise modified from time to
time.
"SECURITY DOCUMENTS": the collective reference to the Security
Agreement and, from and after its execution and delivery, any Assignment of
Lease.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"S&P": Standard and Poor's Ratings Services.
"STATIONS": any of the radio stations now owned or operated by or
hereafter acquired or operated by the Borrower or any of its Subsidiaries.
"SUBSIDIARY": as to any Person, a corporation, partnership or other
entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through
one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.
"TERMINATION DATE": December __, 2002.
"TOTAL DEBT": with respect to the Borrower at any time, (a) all
Indebtedness of the Borrower and its Subsidiaries MINUS, (b) all cash and
Cash Equivalents owned by the Borrower and its Subsidiaries free and clear
of any Liens (other than Liens to secure Indebtedness of the Borrower).
"TRANSFEREE": as defined in subsection 9.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
15
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to
the Borrower not defined in subsection 1.1 and accounting terms partly
defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
(the "LOANS") to the Borrower from time to time during the Commitment Period in
an aggregate principal amount at any one time outstanding which does not exceed
the amount of such Lender's Commitment. During the Commitment Period the
Borrower may use the Commitments by borrowing, prepaying the Loans in whole or
in part, and reborrowing, all in accordance with the terms and conditions
hereof.
(b) The Borrower acknowledges and confirms that the Existing Lenders
have made revolving credit loans to it under the Existing Credit Agreement
(such revolving credit loans, the "EXISTING LOANS"). The Borrower hereby
represents, warrants, agrees, covenants and reaffirms that: (i) it has no
(and it permanently and irrevocably waives, and releases the Agent and the
Existing Lenders from, any, to the extent arising on or prior to the
Closing Date) defense, setoff, claim or counterclaim against the Agent or
any Existing Lender in regard to its Obligations in respect of such
Existing Loans and (ii) reaffirms its obligation to pay such Existing Loans
in accordance with the terms and provisions of this Agreement and the other
Loan Documents.
(c) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans or (iii) a combination thereof, as determined by the Borrower and
notified to the Agent in accordance with subsections 2.2 and 2.9, PROVIDED
that no Loan shall be made as a Eurodollar Loan after the day that is one
month prior to the Termination Date.
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2.2 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may
borrow under the Commitments during the Commitment Period on any Business Day,
PROVIDED that the Borrower shall give the Agent irrevocable notice (which notice
must be received by the Agent prior to 10:00 A.M., New York City time, (a) three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Loans are to be initially Eurodollar Loans or (b) one Business Day
prior to the requested Borrowing Date, otherwise), specifying (i) the amount to
be borrowed, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be of Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the
borrowing is to be entirely or partly of Eurodollar Loans, the amount of such
Loan and the length of the initial Interest Period therefor. Each borrowing
under the Commitments shall be in an amount equal to (x) in the case of ABR
Loans, $100,000 or a whole multiple thereof (or, if the then Available
Commitments are less than $100,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $500,000 or a whole multiple of $100,000 in excess thereof.
Upon receipt of any such notice from the Borrower, the Agent shall promptly
notify each Lender thereof. Each Lender will make the amount of its pro rata
share of each borrowing available to the Agent for the account of the Borrower
at the office of the Agent specified in subsection 9.2 prior to 11:00 A.M., New
York City time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Agent. Such borrowing will then be made available
to the Borrower by the Agent crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made available to the Agent by
the Lenders and in like funds as received by the Agent.
2.3 COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
account of each Lender a commitment fee for the period from and including the
date hereof to the Termination Date, computed at the rate of 1/2 of 1% per annum
on the average daily amount of the Available Commitment of such Lender during
the period for which payment is made; payable quarterly in arrears on the last
day of each March, June, September and December and on the Termination Date or
such earlier date as the Commitments shall terminate as provided herein,
commencing on the first of such dates to occur after the date hereof.
2.4 TERMINATION OR REDUCTION OF COMMITMENTS. (a) The Borrower shall
have the right, upon not less than five Business Days' notice to the Agent, to
terminate the Commitments or, from time to time, to reduce the amount of the
Commitments. Any such reduction shall be in an amount equal to $100,000 or a
whole multiple thereof and shall reduce permanently the Commitments then in
effect.
(b) The total amount of the Commitments on the Closing Date shall be
an amount equal to [$35,000,000]. This amount and shall be reduced on each
of the dates specified below by the amount set forth opposite such date:
17
DATE AMOUNT OF REDUCTION
---- -------------------
December __, 1999 [7,000,000
December __, 2000 7,000,000
December __, 2001 7,000,000
December __, 2002 14,000,000]
(c) On each April 30 commencing April 30, 1999, the total amount of
the Commitments shall be reduced by an amount equal to 50% of the Excess
Cash Flow for the immediately prior fiscal year-ended December 31. Such
reductions shall be applied to the remaining scheduled reductions under (b)
above in inverse order.
(d) The total amount of the Commitments shall be reduced to the extent
of any Net Cash Proceeds received by the Borrower or any Subsidiary upon
any sale, transfer or other disposition of assets after the Closing Date
permitted hereunder in excess of (i) $________ in total for the fiscal
years of the Borrower ending December 31, 1997 and December 31, 1998 and
(ii) $________ in the aggregate for each fiscal year of the Borrower
thereafter, except for those Net Cash Proceeds utilized within 90 days of
such sale, transfer or other disposition to acquire like assets (the
"REINVESTMENT AMOUNT"). To the extent that any Reinvestment Amount shall
not be so utilized within 90 days of such sale, transfer or other
disposition the portion not so utilized shall be treated as Net Cash
Proceeds and on the last day of such 90 day period applied in the manner
specified in this paragraph. Such reductions shall be applied to the
remaining scheduled reductions under (b) above ratably in accordance with
the amounts of such scheduled reductions.
2.5 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay to the Agent for the account of each Lender the
then unpaid principal amount of each Loan of such Lender on the Termination Date
(or such earlier date on which the Loans become due and payable pursuant to
Section 7). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in subsection 2.10.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from
time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to subsection
9.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made
18
hereunder, the Type thereof and each Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Agent hereunder from the Borrower and
each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.5(b) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans
made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(e) The Borrower agrees that, upon the request to the Agent by any
Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower evidencing the Loans of such Lender, substantially in
the form of Exhibit A with appropriate insertions as to date and principal
amount (a "NOTE").
2.6 OPTIONAL PREPAYMENTS. The Borrower may, on the last day of any
Interest Period with respect thereto, in the case of Eurodollar Loans, or at any
time and from time to time, in the case of ABR Loans, prepay the Loans, in whole
or in part, without premium or penalty, upon at least four Business Days'
irrevocable notice to the Agent, specifying the date and amount of prepayment
and whether the prepayment is of Eurodollar Loans, ABR Loans or a combination
thereof, and, if of a combination thereof, the amount allocable to each. Upon
receipt of any such notice the Agent shall promptly notify each Lender thereof.
If any such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein, together with any amounts payable
pursuant to subsection 2.17.
2.7 MANDATORY PREPAYMENTS. (a) The Borrower shall immediately prepay
the Loans made to it to the extent the aggregate principal amount of such Loans
outstanding at any time exceeds the total amount of the Commitments to the
Borrower as reduced pursuant to subsection 2.4.
(b) Unless the Borrower indicates otherwise, the mandatory
prepayments pursuant to this subsection 2.7 shall first be used to prepay
the ABR Loans made to the Borrower and second to prepay the Eurodollar
Loans made to the Borrower in the order in which such Eurodollar Loans
become due.
19
(c) The provisions of subsection 2.17 shall apply to all mandatory
prepayments pursuant to this subsection 2.7.
2.8 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the Agent
at least two Business Days' prior irrevocable notice of such election, PROVIDED
that any such conversion of Eurodollar Loans may only be made on the last day of
an Interest Period with respect thereto. The Borrower may elect from time to
time to convert ABR Loans to Eurodollar Loans by giving the Agent at least three
Business Days' prior irrevocable notice of such election. Any such notice of
conversion to Eurodollar Loans shall specify the length of the initial Interest
Period or Interest Periods therefor. Upon receipt of any such notice the Agent
shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and ABR Loans may be converted as provided herein, PROVIDED
that (i) no Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and the Agent has or the Required Lenders
have determined that such a conversion is not appropriate and (ii) no Loan may
be converted into a Eurodollar Loan after the date that is one month or 30 days,
respectively, prior to the Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower
giving notice to the Agent, in accordance with the applicable provisions of
the term "Interest Period" set forth in subsection 1.1, of the length of
the next Interest Period to be applicable to such Loans, PROVIDED that no
Eurodollar Loan may be continued as such (i) when any Event of Default has
occurred and is continuing and the Agent has or the Required Lenders have
determined that such a continuation is not appropriate or (ii) after the
date that is one month or 30 days prior to the Termination Date (in the
case of continuations of Loans) and PROVIDED, FURTHER, that if the Borrower
shall fail to give such notice or if such continuation is not permitted
such Loans shall be automatically converted to ABR Loans on the last day of
such then expiring Interest Period.
2.9 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $500,000 or a
whole multiple of $100,000 in excess thereof. In no event shall there be more
than 5 Eurodollar Tranches outstanding at any time.
2.10 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to
20
the Eurodollar Rate determined for such day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
ABR plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Loan, (ii) any
interest payable thereon, (iii) any commitment fee or (iv) any other amount
payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), the principal of the Loans and any
such overdue interest, commitment fee or other amount shall bear interest
at a rate per annum which is (x) in the case of principal, the rate that
would otherwise be applicable thereto pursuant to the foregoing provisions
of this subsection plus 2% or (y) in the case of any such overdue interest,
commitment fee or other amount, the rate described in paragraph (b) of this
subsection plus 2%, in each case from the date of such non-payment until
such overdue principal, interest, commitment fee or other amount is paid in
full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this
subsection shall be payable from time to time on demand.
2.11 COMPUTATION OF INTEREST AND FEES. (a) Commitment fees and,
whenever it is calculated on the basis of the Prime Rate, interest shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for the
actual days elapsed; and, otherwise, interest shall be calculated on the basis
of a 360-day year for the actual days elapsed. The Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination of a
Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR, the Eurocurrency Reserve Requirements, shall become effective
as of the opening of business on the day on which such change becomes effective.
The Agent shall as soon as practicable notify the Borrower and the Lenders of
the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the
Borrower and the Lenders in the absence of manifest error. The Agent
shall, at the request of the Borrower, deliver to the Borrower a statement
showing the quotations used by the Agent in determining any interest rate
pursuant to subsection 2.10(a).
2.12 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
21
(a) the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrower) that, by reason of circumstances
affecting the relevant market, adequate and reasonable means do not exist
for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Agent shall have received notice from the Required Lenders
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Agent shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Loans that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be converted to
or continued as ABR Loans and (z) any outstanding Eurodollar Loans shall be
converted, on the first day of such Interest Period, to ABR Loans. Until such
notice has been withdrawn by the Agent, no further Eurodollar Loans shall be
made or continued as such, nor shall the Borrower have the right to convert ABR
Loans to Eurodollar Loans.
2.13 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee hereunder and any reduction of the Commitments of the Lenders
shall be made pro rata according to the respective Commitment Percentages of the
Lenders. Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Loans shall be made pro rata according to the
respective outstanding principal amounts of the Loans then held by the Lenders.
All payments (including prepayments) to be made by the Borrower hereunder,
whether on account of principal, interest, fees or otherwise, shall be made
without set off or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the Agent, for the account of the Lenders,
at the Agent's office specified in subsection 9.2, in Dollars and in immediately
available funds. The Agent shall distribute such payments to the Lenders
promptly upon receipt in like funds as received. If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day, and, with respect to payments
of principal, interest thereon shall be payable at the then applicable rate
during such extension.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a borrowing that such Lender will not make the amount that would
constitute its Commitment Percentage of such borrowing available to the
22
Agent, the Agent may assume that such Lender is making such amount
available to the Agent, and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by the required time on the
Borrowing Date therefor, such Lender shall pay to the Agent, on demand,
such amount with interest thereon at a rate equal to the daily average
Federal Funds Effective Rate [(as defined in the Section 1.1 definition of
"ABR")] for the period until such Lender makes such amount immediately
available to the Agent. A certificate of the Agent submitted to any Lender
with respect to any amounts owing under this subsection shall be conclusive
in the absence of manifest error. If such Lender's Commitment Percentage
of such borrowing is not made available to the Agent by such Lender within
three Business Days of such Borrowing Date, the Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to ABR Loans hereunder, on demand, from the Borrower.
2.14 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 2.17.
2.15 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement, any Note, any Application or any Eurodollar Loan
made by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for Non-Excluded Taxes covered by subsection 2.16
and changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar
23
requirement against assets held by, deposits or other liabilities in or for
the account of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender such additional amount or amounts as will compensate
such Lender for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
Governmental Authority made subsequent to the date hereof shall have the
effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder to a
level below that which such Lender or such corporation could have achieved
but for such adoption, change or compliance (taking into consideration such
Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time,
the Borrower shall promptly pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Borrower (with a
copy to the Agent) of the event by reason of which it has become so
entitled. A certificate as to any additional amounts payable pursuant to
this subsection submitted by such Lender to the Borrower (with a copy to
the Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.16 TAXES. (a) All payments made by the Borrower under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by
24
any Governmental Authority, excluding (i) any taxes imposed by jurisdictions
outside of the United States of America, (ii) any taxes imposed by the United
States or any political subdivision thereof by means of withholding at the
source, if and to the extent that such taxes shall be in effect and shall be
applicable on the date hereof, to payments to be made to such lender, existing
taxes on the date hereof and (iii) any net income taxes and franchise taxes
(imposed in lieu of net income taxes), imposed on the Agent or any Lender as a
result of a present or former connection between the Agent or such Lender and
the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement or any Note). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("NON-EXCLUDED TAXES") are
required to be withheld from any amounts payable to the Agent or any Lender
hereunder or under any Note, the amounts so payable to the Agent or such Lender
shall be increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement,
PROVIDED, HOWEVER, that the Borrower shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of the United
States of America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection. Whenever any Non-Excluded
Taxes are payable by the Borrower, as promptly as possible thereafter the
Borrower shall send to the Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary evidence,
the Borrower shall indemnify the Agent and the Lenders for any incremental
taxes, interest or penalties that may become payable by the Agent or any Lender
as a result of any such failure. The agreements in this subsection shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Agent (A) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, and (B) an Internal Revenue
Service Form W-8 or W-9, or successor applicable form, as the case may be;
25
(ii) deliver to the Borrower and the Agent two further copies of any
such form or certification on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any
event requiring a change in the most recent form previously delivered by it
to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower or
the Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the Agent.
Such Lender shall certify (i) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a Lender or a Participant
pursuant to subsection 9.6 shall, upon the effectiveness of the related
transfer, be required to provide all of the forms and statements required
pursuant to this subsection, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
2.17 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment after the
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Bank on such amount by placing such amount on deposit
for a comparable period
26
with leading banks in the interbank eurodollar market. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.18 CHANGE OF LENDING OFFICE. Each Lender agrees that if it makes
any demand for payment under subsection 2.15 or 2.16(a), or if any adoption or
change of the type described in subsection 2.15 shall occur with respect to it,
it will 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, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under subsection 2.15 or
2.16(a), or would eliminate or reduce the effect of any adoption or change
described in subsection 2.15.
2.19 CERTAIN FEES. On the dates provided therein, the Borrower agrees
to pay to the Agent for its own account the fees set forth in the Fee Letter,
dated December 1, 1997 between the Borrower and Chase.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to the Agent and
each Lender that:
3.1 FINANCIAL CONDITION. (a) The audited balance sheet of the
Borrower as at December 31, 1996 and the related statements of income and of
cash flows for the fiscal year ended on such date, reported on by KPMG Peat
Marwick LLP, copies of which have heretofore been furnished to each Lender, are
complete and correct and present fairly the consolidated financial condition of
the Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their cash flows for the fiscal
year then ended.
(b) The unaudited consolidated balance sheet of the Borrower and its
consolidated subsidiaries as at September 30, 1997 and the related
unaudited consolidated statements of income and of cash flows for the nine
month period ended on such date, certified by a Responsible Officer, copies
of which have heretofore been furnished to each Lender, are complete and
correct and present fairly the consolidated financial condition of the
Borrower and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash flows
for the nine month period then ended (subject to normal year-end audit
adjustments).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP
27
applied consistently throughout the periods involved (except as approved by such
accountants or Responsible Officer, as the case may be, and as disclosed
therein). The Borrower did not have, at the date of the most recent balance
sheet referred to above, any contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including, without
limitation, any interest rate or foreign currency swap or exchange transaction,
which is not reflected in the foregoing statements or in the notes thereto.
During the period from December 31, 1996 to and including the date hereof, there
has been no sale, transfer or other disposition by the Borrower of any material
part of its business or property and no purchase or other acquisition of any
business or property (including any capital stock of any other Person) material
in relation to the financial condition of the Borrower at December 31, 1996.
3.2 NO CHANGE. (a) Since December 31, 1996 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect, and (b) during the period from December 31, 1996 to and
including the date hereof no dividends or other distributions have been
declared, paid or made upon the Capital Stock of the Borrower nor has any of the
Capital Stock of the Borrower been redeemed, retired, purchased or otherwise
acquired for value by the Borrower.
3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. The Borrower and each
of its Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the corporate or
other power and authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation or other
entity and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, have a Material Adverse Effect.
3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower and each Subsidiary has the corporate or other power and authority, and
the legal right, to make, deliver and perform the Loan Documents to which it is
a party and, in the case of the Borrower, to borrow hereunder and has taken all
necessary corporate or other action to authorize the borrowings on the terms and
conditions of this Agreement and any Notes and to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents to which any Loan
Party is a party other than
28
the consents of landlords to the collateral assignments of leases pursuant to
the Assignments of Leases. This Agreement has been, and each other Loan
Document to which any Loan Party is a party will be, duly executed and delivered
on behalf of such Loan Party. This Agreement constitutes, and each other Loan
Document to which any Loan Party is a party when executed and delivered will
constitute, a legal, valid and binding obligation of such Loan Party enforceable
against such Loan Party in accordance with its terms, subject to the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
3.5 NO LEGAL DOCUMENTS BAR. The execution, delivery and performance
of the Loan Documents to which any Loan Party is a party, the borrowings
hereunder and the use of the proceeds thereof will not violate any Requirement
of Law or Contractual Obligation of such Loan Party and will not result in, or
require, the creation or imposition of any Lien (other than those Liens created
or imposed pursuant to the Loan Documents) on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation.
3.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower or any Subsidiary, threatened by or against the
Borrower or any Subsidiary or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) which could reasonably be
expected to have a Material Adverse Effect.
3.7 NO DEFAULT. No Loan Party is in default under or with respect to
any of its Contractual Obligations in any respect which could reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.8 OWNERSHIP OF PROPERTY; LIENS. The Borrower and its Subsidiaries
have good record and marketable title in fee simple to, or a valid leasehold
interest in, all their real property, and good title to, or a valid leasehold
interest in, all their other property, and none of such property is subject to
any Lien except as permitted by subsection 6.3.
3.9 INTELLECTUAL PROPERTY. The Borrower and its Subsidiaries own, or
are licensed to use, all trademarks, tradenames, copyrights, technology,
know-how and processes necessary for the conduct of their business as currently
conducted except for those the failure to own or license which could not have a
Material Adverse Effect (the "INTELLECTUAL PROPERTY"). No claim has been
asserted and is pending by any
29
Person challenging or questioning the use of any such Intellectual Property or
the validity or effectiveness of any such Intellectual Property, nor does the
Borrower or any of its Subsidiaries know of any valid basis for any such claim.
The use of such Intellectual Property by the Borrower and its Subsidiaries does
not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, do not have a Material Adverse Effect.
3.10 NO BURDENSOME RESTRICTIONS. No Requirement of Law or Contractual
Obligation of the Borrower or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
3.11 TAXES. The Borrower and its Subsidiaries have filed or caused to
be filed all tax returns which, to the knowledge of the Borrower, are required
to be filed and has paid all taxes shown to be due and payable on said returns
or on any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than any the amount or validity of which are
currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or such Subsidiary); no tax Lien has been filed, and, to
the knowledge of the Borrower and its Subsidiaries, no claim is being asserted,
with respect to any such tax, fee or other charge.
3.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulations G, T, U or X as now and
from time to time hereafter in effect. If requested by any Lender or the Agent,
the Borrower will furnish to the Agent and each Lender a statement to the
foregoing effect in conformity with the requirements of FR Form G-1 or FR Form
U-1 referred to in said Regulation G or U, as the case may be.
3.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred, and no
Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither the Borrower nor any Commonly Controlled
30
Entity has had a complete or partial withdrawal from any Multiemployer Plan, and
neither the Borrower nor any Commonly Controlled Entity would become subject to
any liability under ERISA if the Borrower or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
3.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. The Borrower is not
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. The
Borrower is not subject to regulation under any Federal or State statute or
regulation (other than Regulation X) which limits its ability to incur
Indebtedness.
3.15 SUBSIDIARIES. All of the Subsidiaries of the Borrower at the
date hereof are listed on Schedule 3.15 to this Agreement.
3.16 PURPOSE OF LOANS. The proceeds of the loans shall be used by the
Borrower to refinance the Existing Loans, and for working capital purposes in
the ordinary course of business.
3.17 ENVIRONMENTAL MATTERS.
(a) The facilities and properties owned, leased or operated by the
Borrower and its Subsidiaries (the "PROPERTIES") do not contain, and have
not previously contained, any Materials of Environmental Concern in amounts
or concentrations which (i) constitute or constituted a violation of, or
(ii) could reasonably be expected to give rise to liability under, any
Environmental Law except in either case insofar as such violation or
liability, or any aggregation thereof, is not reasonably likely to result
in the payment of a Material Environmental Amount.
(b) The Properties and all operations at the Properties are in
compliance, and, to the Borrower's knowledge, have in the last 5 years been
in compliance (provided that, in the case of any Properties acquired in the
last 5 years, such knowledge is based, for the period prior to such
acquisition on the representations made to the Borrower by the Person from
which the Properties were acquired), with all applicable Environmental
Laws, and there is no contamination at, under or about the Properties or
violation of any Environmental Law with respect to the Properties or the
business operated by the Borrower (the "BUSINESS") which could materially
interfere with the continued operation of the Properties or materially
impair the fair saleable value of the owned properties thereof.
31
(c) The Borrower has not received any notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to
any of the Properties or the Business, nor does the Borrower have knowledge
or reason to believe that any such notice will be received or is being
threatened except insofar as such notice or threatened notice, or any
aggregation thereof, does not involve a matter or matters that is or are
reasonably likely to result in the payment of a Material Environmental
Amount.
(d) To the Borrower's knowledge (provided that, in the case of any
Properties acquired in the last 5 years, such knowledge is based, for the
period prior to such acquisition on the representations made to the
Borrower by the Person from which the Properties were acquired), materials
of Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location which could
reasonably be expected to give rise to liability under, any Environmental
Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in
violation of, or in a manner that could reasonably be expected to give rise
to liability under, any applicable Environmental Law except insofar as any
such violation or liability referred to in this paragraph, or any
aggregation thereof, is not reasonably likely to result in the payment of a
Material Environmental Amount.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower is or will be named as a party with
respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business except
insofar as such proceeding, action, decree, order or other requirement, or
any aggregation thereof, is not reasonably likely to result in the payment
of a Material Adverse Amount.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Borrower in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or
in a manner that could reasonably give rise to liability under
Environmental Laws except insofar as any such violation or liability
referred to in this paragraph, or any aggregation thereof, is not
reasonably likely to result in the payment of a Material Environmental
Amount.
32
3.18 SOLVENCY. (a) The assets of the Borrower at their fair valuation
exceed the liabilities of the Borrower, including contingent liabilities; (b)
the capital of the Borrower is not unreasonably small to conduct the business of
the Borrower; and (c) the Borrower has the ability to pay the Loans made to it
and its obligation under the other Loan Documents and its other debts arising in
the normal course of business as such debts mature and does not intend to, or
believe that it will, incur debt beyond its ability to pay as such debts mature.
3.19 FCC MATTERS. Each Loan Party has duly and timely filed all
material filings which are required to be filed by it under the Communications
Act, and is in all material respects in substantial compliance with the
Communications Act, including, without limitation, Section 310 thereof, and the
rules and regulations of the FCC relating thereto (the "FCC RULES") except as
set forth on Schedule 3.19. Each Loan Party is qualified to control, and the
Borrower is qualified to be, a broadcast licensee under the Communications Act
and the FCC Rules. Schedule 3.19 lists all of the FCC Licenses and all other
material permits, authorizations and licenses of any Governmental Authorities
granted or assigned to the Loan Parties in connection with the operation of the
radio stations owned by the Loan Parties (collectively, the "LICENSES"), and
such Licenses are the only material authorizations, licenses and permits
necessary for the conduct of the businesses of the Loan Parties as of the date
hereof. All of such Licenses are issued in the name of, or have been validly
assigned to, the Borrower or a License Subsidiary and are validly issued and in
full force and effect, and the Loan Parties have fulfilled and performed all of
their obligations with respect thereto and have full power and authority to
operate thereunder, and all consents to the assignment of the Licenses or the
transfer of control of the radio stations which are owned by the Loan Parties on
the date hereof by Final Orders of the FCC.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT. The effectiveness of
this amendment and restatement is subject to the satisfaction, immediately prior
to or concurrently with such effectiveness on the Closing Date, of the following
conditions precedent:
(a) LOAN DOCUMENTS. The Agent shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, with a
counterpart for each Lender, (ii) for the account of each Lender requesting
the same, a Note conforming to the requirements hereof and executed by a
duly authorized officer of the Borrower, and (iii) the Security Agreement
executed and delivered by a duly authorized officer of each Loan Party,
with a counterpart or a conformed copy for each Lender.
33
(b) CONSUMMATION OF THE IPO. (i) Immediately prior to the
consummation of the IPO, Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
shall contribute the entire amount of certain outstanding stockholders'
loans made to the Borrower [$13.2 million at September 30, 1997] to the
Borrower's capital (the "EQUITY CONTRIBUTION"); (ii) simultaneously with
the Equity Contribution each share of the Borrower's Common Stock, par
value $.01 per share (the "OLD COMMON STOCK") shall be reclassified into
[7,610] shares of Class A Common Stock and Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and ▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ shall exchange each share of Class A Common Stock held by
them for one share of Class B Common Stock (the foregoing reclassification
and exchange is hereinafter referred to as the "RECLASSIFICATION"); and
(iii) the IPO, in which the Borrower receives a minimum of [$29,000,000] in
Net Proceeds from the sale of no more than 35% of the Company's common
equity, shall have been consummated.
(c) RELATED AGREEMENTS. The Agent shall have received, with a copy
for each Lender, true and correct copies, certified as to authenticity by
the Borrower, of such other documents or instruments as may be reasonably
requested by the Agent, including, without limitation, a copy of any debt
instrument, security agreement or other material contract to which the
Borrower may be a party.
(d) CLOSING CERTIFICATE. The Agent shall have received, with a
counterpart for each Lender, a certificate of the Borrower, dated the
Closing Date, substantially in the form of Exhibit B, with appropriate
insertions and attachments, satisfactory in form and substance to the
Agent, executed by the President or any Vice President and the Secretary or
any Assistant Secretary of the Borrower.
(e) PROCEEDINGS OF THE EACH LOAN PARTY. The Agent shall have
received, with a counterpart for each Lender, a copy of the resolutions, in
form and substance satisfactory to the Agent, of the Board of Directors of
each Loan Party (or Member in the case of a Loan Party which is a limited
liability company or partnership) authorizing (i) the execution, delivery
and performance of this Agreement and the other Loan Documents to which it
is a party, (ii) the borrowings contemplated hereunder and (iii) the
granting by it of the Liens created pursuant to the Security Documents,
certified by the Secretary or an Assistant Secretary of such Loan Party (or
Member in the case of a Loan Party which is a limited liability company or
partnership) as of the Closing Date, which certificate shall be in form and
substance satisfactory to the Agent and shall state that the resolutions
thereby certified have not been amended, modified, revoked or rescinded.
(f) INCUMBENCY CERTIFICATE. The Agent shall have received, with a
counterpart for each Lender, a Certificate
34
of each Loan Party (or Member in the case of a Loan Party which is a
limited liability company or partnership), dated the Closing Date, as to
the incumbency and signature of the officers of each Loan Party (or Member
in the case of a Loan Party which is a limited liability company or
partnership) executing any Loan Document satisfactory in form and substance
to the Agent, executed by the President or any Vice President and the
Secretary or any Assistant Secretary of such Loan Party (or Member in the
case of a Loan Party which is a limited liability company or partnership).
(g) CORPORATE DOCUMENTS. The Agent shall have received, with a
counterpart for each Lender, true and complete copies of the certificate of
incorporation and by-laws or other organizational documents of each Loan
Party, certified as of the Closing Date as complete and correct copies
thereof by the Secretary or an Assistant Secretary of the such Loan Party
(or Member in the case of a Loan Party which is a limited liability company
or partnership).
(h) CONSENTS, LICENSES AND APPROVALS. The Agent shall have received,
with a counterpart for each Lender, a certificate of a Responsible Officer
of the Borrower (i) attaching copies of all consents, authorizations and
filings referred to in subsection 3.19, and (ii) stating that such
consents, licenses and filings are in full force and effect, and each such
consent, authorization and filing shall be in form and substance
satisfactory to the Agent.
(i) FEES. The Agent shall have received the fees to be received on
the Closing Date referred to in subsection 2.19.
(j) LEGAL OPINIONS. The Agent shall have received, with a counterpart
for each Lender, the following executed legal opinions:
(i the executed legal opinion of ▇▇▇▇, Weiss, Wharton,
Rifkind & ▇▇▇▇▇▇▇▇, counsel to the Borrower, substantially in the form
of Exhibit C-1;
(ii the executed legal opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, special
communications counsel to the Borrower with respect to regulatory
matters, substantially in the form of Exhibit C-2.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Agent may reasonably
require;
(k) ACTIONS TO PERFECT LIENS. The Agent shall have received evidence
in form and substance satisfactory to it that all filings, recordings,
registrations and other
35
actions, including, without limitation,(i) the filing of duly executed
financing statements on form UCC-1 and (ii) receipt of the certificates
representing the certificated securities pledged pursuant to the Security
Agreement, together with an undated stock power (or other appropriate
instrument of transfer) for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof, necessary or, in the
opinion of the Agent, desirable to perfect the Liens created by the
Security Documents shall have been completed.
(l) LIEN SEARCHES. The Agent shall have received the results of a
recent search by a Person satisfactory to the Agent, of the Uniform
Commercial Code, judgement and tax lien filings which may have been filed
with respect to personal property of the Borrower and the Subsidiaries and
the results of such search shall be satisfactory to the Agent.
(m) INSURANCE. The Agent shall have received evidence in form and
substance satisfactory to it that all of the requirements of Section 5._ of
the Security Agreement shall have been satisfied.
(n) PREPAYMENT OF EXISTING CREDIT AGREEMENT. All Loans outstanding
under the Existing Credit Agreement (together with accrued interest
thereon) in excess of the Commitments hereunder and all accrued and unpaid
fees under the Existing Credit Agreement shall have been paid or repaid.
(o) ADDITIONAL MATTERS. All corporate and other proceedings, and all
documents, instruments and other legal matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be satisfactory in form and substance to the Agent, and the Agent
shall have received such other documents and legal opinions in respect of
any aspect or consequence of the transactions contemplated hereby or
thereby as it shall reasonably request.
4.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including, without limitation, its initial extension of credit) is subject to
the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrower and the other Loan Parties in or pursuant
to the Loan Documents shall be true and correct in all material respects on
and as of such date as if made on and as of such date.
36
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this subsection have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any other amount is owing to any Lender or the Agent hereunder or
under any other Loan Document, the Borrower shall, and (except in the case of
Sections 5.1 and 5.2) cause each Subsidiary to:
5.1 FINANCIAL STATEMENTS. Furnish to each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the consolidated balance
sheet of the Borrower as at the end of such year and the related
consolidated statements of income and retained earnings and of cash flows
for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of
the audit, by KPMG Peat Marwick LLP or other independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower as at the end of such quarter and the related unaudited
consolidated statements of income and retained earnings and of cash flows
of the Borrower for such quarter and the portion of the fiscal year through
the end of such quarter, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
37
5.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in subsection 5.1(a), a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained
of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 5.1(a) and (b), a certificate of a Responsible
Officer stating that to the best of such Responsible Officer's knowledge,
the Borrower during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained in
this Agreement and the other Loan Documents to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate;
(c) not later than thirty days prior to the end of each fiscal year of
the Borrower, a copy of the projections by the Borrower of the operating
budget and cash flow budget of the Borrower for the succeeding fiscal year,
such projections to be accompanied by a certificate of a Responsible
Officer to the effect that such projections have been prepared on the basis
of sound financial planning practice and that such Responsible Officer has
no reason to believe they are incorrect or misleading in any material
respect;
(d) within five days after the same are sent, copies of all financial
statements which the Borrower sends to its stockholders, and within five
days after the same are filed, copies of all financial statements and
reports which the Borrower may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental Authority;
and
(e) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
obligations of whatever nature, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and reserves
in conformity with GAAP with respect thereto have been provided on the books of
the Borrower or such Subsidiary.
38
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted by it and preserve,
renew and keep in full force and effect its corporate existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, have a Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and furnish to each Lender, upon written request, full
information as to the insurance carried.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and with its
independent certified public accountants.
5.7 NOTICES. Promptly give notice to the Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any Subsidiary or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any Subsidiary and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any
Subsidiary in which the amount involved is $1,000,000 or more and not
covered by insurance or in which injunctive or similar relief is sought;
(d) any filing with the FCC constituting or relating to any challenge
to the validity of any FCC License or the transfer thereof to the Borrower
or any Subsidiary;
39
(e) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal from,
or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by
the PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the terminating,
Reorganization or Insolvency of, any Plan; and
(f) any other development or event which could reasonably be expected
to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.8 ENVIRONMENTAL LAWS. Comply with, and ensure compliance by all
tenants and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply with and maintain, and ensure that all tenants and subtenants
obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws except to the extent that failure to do so could not be reasonably expected
to have a Material Adverse Effect.
(a) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings and
the pendency of such proceedings could not be reasonably expected to have a
Material Adverse Effect.
5.9 ASSIGNMENTS OF LEASES. Use all commercially reasonable efforts to
effectuate the due execution and delivery of Assignments of Leases in respect of
any real property leased by the Borrower or any Subsidiary and used in the
transmission or broadcasting of radio signals by any of the Stations (except
that the Forestry Service License shall not be assigned pursuant to an
Assignment of Leases or any other agreement) and related Landlord's Consent
within 180 days of the Closing Date or if later, date of entering or acquisition
of such lease. Upon execution, the Borrower shall furnish any (i) Assignments
of Leases, executed and delivered by a duly authorized officer of the Borrower,
and (ii) Landlords Consents, executed and delivered
40
by duly authorized representatives of the parties thereto, to the Agent, with a
conformed copy for each Lender.
5.10 FURTHER ASSURANCES. (a) From time to time hereafter, the
Borrower will execute and deliver, or will cause to be executed and delivered,
such additional instruments, certificates or documents, and will take all such
actions, as the Agent may reasonably request, for the purposes of implementing
or effectuating the provisions of this Agreement and the other Loan Documents,
or of more fully perfecting or renewing the rights of the Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or assets
hereafter acquired by the Borrower which may be deemed to be part of the
Collateral) pursuant hereto or thereto. Upon the exercise by the Agent or any
Lender of any power, right, privilege or remedy pursuant to this Agreement or
the other Loan Documents which requires any consent, approval, recording,
qualification or authorization of any Governmental Authority, including, without
limitation, the FCC, the Borrower will execute and deliver, or will cause the
execution and delivery of, all applications, certifications, instruments and
other documents and papers that the Agent or such Lender may be required to
obtain from the Borrower for such governmental consent, approval, recording,
qualification or authorization.
(b) With respect to any Person that, subsequent to the Closing Date,
becomes a Subsidiary, promptly upon the request of the Agent: (i) execute and
deliver to the Agent, for the benefit of the Lenders, such amendments or
supplements to the Security Agreement as the Agent shall deem necessary or
advisable to grant to the Agent, for the benefit of the Lenders, a Lien on the
Capital Stock of such Subsidiary which is owned by the Borrower or any of its
Subsidiaries, (ii) deliver to the Agent any certificates representing such
Capital Stock, together with undated stock powers executed and delivered in
blank by a duly authorized officer of the Borrower or such Subsidiary, as the
case may be, (iii) cause such new Subsidiary (A) to become a party to the
Security Agreement pursuant to documentation which is in form and substance
reasonably satisfactory to the Agent, and (B) to take all actions necessary or
advisable to cause the Lien created by the Security Agreement to be duly
perfected in accordance with all applicable Requirements of Law, including,
without limitation, the filing of financing statements in such jurisdictions as
may be requested by the Agent and (iv) if requested by the Agent, deliver to the
Agent legal opinions relating to the matters described in clauses (i), (ii) and
(iii) immediately preceding, which opinions shall be in form and substance, and
from counsel, reasonably satisfactory to the Agent.
(c) Notwithstanding anything herein or in the Security Agreement to
the extent this Agreement or any other Loan Document purports to require any
Loan Party to grant to the Agent, on
41
behalf of the Lenders, a security interest in the FCC Licenses of any Loan Party
now owned or hereafter acquired, as the case may be, the Agent, on behalf of the
Lenders, shall only have a security interest in such FCC Licenses at such times
and to the extent that a security interest in such licenses is permitted under
applicable law. Notwithstanding anything to the contrary contained herein or in
the other Loan Documents, the Agent will not take any action pursuant to this
Agreement or any other Loan Document that would constitute or result in any
assignment of any FCC License or any change of control of any Loan Party without
first obtaining the prior approval of the FCC or other state or Governmental
Authority, if, under the then existing law, such assignment of any FCC License
or change of control would require the prior approval of the FCC or other state
or Governmental Authority. Prior to the exercise by the Agent of any power,
right, privilege or remedy pursuant to this Agreement which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority or instrumentality, the Borrower will execute and deliver, or will
cause the execution and delivery of, all applications, certificates, instruments
and other documents and papers that the Agent may be required to obtain for such
governmental consent, approval, recording, qualification or authorization.
Without limiting the generality of the foregoing, the Borrower will use its best
efforts upon the reasonable request of the Agent to assist in obtaining from the
appropriate governmental authorities the necessary consents and approvals, if
any, for the assignment or transfer of such authorizations, licenses and permits
to the Agent or its designee upon or following acceleration of the payment of
the Loans in accordance with the provisions hereof.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, or any other amount is owing to any Lender or the Agent hereunder or
under any other Loan Document, the Borrower shall not, and (except with respect
to subsection 6.1) not permit any of its Subsidiaries to, directly or
indirectly:
6.1 FINANCIAL CONDITION COVENANTS.
(a) MINIMUM EBITDA. Permit for any period of four consecutive fiscal
quarters ending during any "Test Period" set forth below an EBITDA for such
period to be less than the amount set forth opposite such Test Period below:
Test Period Amount
----------- ------
______, 199_-______, 199_ ______
42
(b) TOTAL DEBT TO EBITDA. Permit for any period of four consecutive
fiscal quarters ending during any "Test Period" set forth below the ratio of (i)
Total Debt outstanding at the end of such period to (ii) EBITDA for such period
to be greater than the ratio set forth opposite such Test Period below:
Test Period Ratio
----------- -----
_______, 199_-____, 199_ ______
_______, 199_-thereafter ______
(c) EBITDA TO INTEREST EXPENSE. Permit for any period of four
consecutive fiscal quarters ending during any "Test Period" set forth below the
ratio of (i) EBITDA for such period to (ii) Interest Expense for such period to
be less than the ratio set forth opposite such Test Period below:
Test Period Ratio
----------- -----
_______, 199_-____, 199_ ______
_______, 199_-____, 199_ ______
_______, 199_-thereafter ______
(d) NET INCOME TO FIXED CHARGES. Permit for any period of four
consecutive fiscal quarters ending during any "Test Period" set forth below the
ratio of (i) the sum of Consolidated Net Income for such period plus income
taxes deducted in determining such Consolidated Net Income plus Consolidated
Fixed Charges for such period to (ii) Consolidated Fixed Charges for such period
to be less than the ratio set forth opposite such Test Period below:
Test Period Ratio
----------- -----
______, 199_-______, 199_ ______
______, 199_-thereafter ______
6.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement;
(b) Indebtedness of the Borrower incurred to finance the acquisition
of fixed or capital assets (whether pursuant to a loan, a Financing Lease
or otherwise) in an aggregate principal amount not exceeding as to the
Borrower $2,000,000 at any time outstanding;
(c) current liabilities of the Borrower (other than for borrowed
money) incurred in the ordinary course of their business and in accordance
with customary trade practices; and
43
(d) additional Indebtedness of the Borrower not exceeding $__________
in aggregate principal amount at any one time outstanding.
6.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
landlord's or other like Liens arising in the ordinary course of business
which are not overdue for a period of more than 60 days or which are being
contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower;
(f) Liens securing Indebtedness of the Borrower permitted by
subsection 7.2(b) incurred to finance the acquisition of fixed or capital
assets, PROVIDED that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness, (iii) the amount of Indebtedness secured
thereby is not increased and (iv) the principal amount of Indebtedness
secured by any such Lien shall at no time exceed 75% of the original
purchase price of such property at the time it was acquired; and
(g) Liens created pursuant to the Security Documents; and
44
(h) Liens (not otherwise permitted hereunder) which secure obligations
not exceeding (as to the Borrower and all Subsidiaries) $____________ in
aggregate amount at any time outstanding.
6.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except Guarantee Obligations (a)
pursuant to the Loan Agreements or (b) in existence on the date hereof and
listed on Schedule 6.4.
6.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business.
6.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, except:
(a) the sale or other disposition of property in the ordinary course
of business;
(b) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof;
(c) the sale of the assets together with the related liabilities
constituting radio station WRKL-AM, PROVIDED the Net Cash Proceeds are
applied in accordance with subsection 2.4(d); and
(d) the sale of other assets in aggregate amount not to exceed
$____________ [in any twelve month period], PROVIDED the Net Cash Proceeds
are applied in accordance with subsection 2.4(d).
6.7 LIMITATION ON LEASES. Permit lease expense (determined in
accordance with GAAP) for any fiscal year of the Borrower to exceed $750,000.
6.8 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) on, or make any
payment on account of, or set apart assets for a sinking or other analogous fund
for, the purchase, redemption, defeasance, retirement or other acquisition of,
any shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Capital Stock, whether now or hereafter
outstanding, or make any other distribution in
45
respect thereof, either directly or indirectly, whether in cash or property or
in obligations of the Borrower or any Subsidiary.
6.9 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any expenditure
in respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for
expenditures in the ordinary course of business not exceeding, in the aggregate
for the Borrower during any of the fiscal periods of the Borrower set forth
below, the amount set forth opposite such fiscal period below:
Fiscal Period Amount
------------- ------
The two Fiscal years ending
___________, 199_ __________
Each Fiscal year ending
thereafter __________
6.10 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) the acquisition of the assets (and related liabilities)
constituting a radio station (including the right to hold and operate all
related Licenses issued by the FCC) for aggregate consideration not to
exceed $__________ [in any twelve month period]; and
(d) investments in the Loan Parties.
6.11 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS OR AGREEMENTS. (a) Make any optional payment or prepayment on or
redemption or purchase of any Indebtedness (other than the Loans), or (b) amend,
modify or change, or consent or agree to any amendment, modification or change
to any of the terms of any such Indebtedness (other than any such amendment,
modification or change which would extend the maturity or reduce the amount of
any payment of principal thereof or which would reduce the rate or extend the
date for payment of interest thereon).
6.12 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into any
transaction, including, without limitation, any
46
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate unless such transaction is (a) otherwise permitted under this
Agreement, (b) in the ordinary course of the Borrower's business and (c) upon
fair and reasonable terms no less favorable to the Borrower, than it would
obtain in a comparable arm's length transaction with a Person which is not an
Affiliate.
6.13 LIMITATION ON SALES AND LEASEBACKS. Enter into any arrangement
with any Person providing for the leasing by the Borrower or any Subsidiary of
real or personal property which has been or is to be sold or transferred by the
Borrower or any Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of the Borrower or any Subsidiary.
6.14 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year of
the Borrower to end on a day other than December 31.
6.15 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with any
Person any agreement, other than this Agreement, which prohibits or limits the
ability of the Borrower or any Subsidiary to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired.
6.16 LIMITATION ON LINES OF BUSINESS AND LOCAL MARKETING AND SALES
AGREEMENTS. (a) Enter into any business, except for those businesses in which
the Borrower is engaged on the date of this Agreement or which are directly
related thereto or (b) without the consent of the Required Lenders, enter into
any Local Marketing and Sales Agreement.
6.17 RESTRICTIONS ON MEMBER AND LICENSE SUBSIDIARIES. (a)Permit any
FCC License to be held by any Person other than a License Subsidiary 90 days
after the later of the Closing Date or acquisition of such FCC License.
(b) Permit any FCC License held by any License Subsidiary not to be
the subject of an Operating Agreement or amend any Operating Agreement
without the consent of the Agent.
(c) Permit any Member to engage in any activity or business or have
any employees or incur any Indebtedness or Contractual Obligations or grant
any Liens other than (i) activities and obligations incidental to its
membership or partnership interest in a License Subsidiary or (ii) pursuant
to the Loan Documents.
(d) Permit any License Subsidiary to engage in any activity or
business or have any employees or incur any
47
Indebtedness or Contractual Obligations or grant any Liens other than (i)
activities or obligations incidental to its holding of FCC Licenses and the
related Operating Agreement or (ii) pursuant to the Loan documents.
(e) (i) permit any License Subsidiary or Member to fail to satisfy
customary corporate or other applicable formalities, including the holding
of regular board of directors' and shareholders' or other required meetings
and the maintenance of offices and records, (ii) permit any bank account of
any License Subsidiary or any Member to be commingled with any bank account
of the Borrower or any of its other Subsidiaries, (iii) any financial
statements distributed to any creditors of the Borrower or any of its other
Subsidiaries to fail to clearly establish the separateness of the Members
and the License Subsidiaries from the Borrower and its other Subsidiaries,
and (iv) take, and not permit any Member or any License Subsidiary to take,
any action, or conduct its affairs in a manner, which is likely to result
in the corporate existence of any Member or of any License Subsidiary being
ignored, or in the assets and liabilities of any Member or of any License
Subsidiary being substantively consolidated with those of the Borrower or
any of its other Subsidiaries in a bankruptcy, reorganization or other
insolvency proceeding.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan when due
in accordance with the terms thereof or hereof; or the Borrower shall fail
to pay any interest on any Loan, or any other amount payable hereunder,
within five days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or
any such other Loan Document shall prove to have been incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Borrower or any other Loan Party shall default in the
observance or performance of any covenant contained in Section 5 of the
Security Agreement; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement
48
contained in this Agreement or any other Loan Document (other than as
provided in paragraphs (a) through (c) of this Section), and such default
shall continue unremedied for a period of 30 days; or
(e) The Borrower or any other Loan Party shall, unless waived by the
Lender in each instance, (i) default in any payment of principal of or
interest of any Indebtedness (other than the Loans) or in the payment of
any Guarantee Obligation, beyond the period of grace (not to exceed 30
days), if any, provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created, if the aggregate amount
of the Indebtedness and/or Guarantee Obligations in respect of which such
default or defaults shall have occurred is at least $1,000,000; or (ii)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or Guarantee Obligation or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries of
such Guarantee Obligation (or a trustee or agent on behalf of such holder
or holders) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable; or
(f) (i) The Borrower or any other Loan Party shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any other Loan Party shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any other Loan Party any case, proceeding
or other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the Borrower
or any other Loan Party any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or
49
bonded pending appeal within 60 days from the entry thereof; or (iv) the
Borrower or any other Loan Party shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) the Borrower or
any other Loan Party shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any other Loan Party involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed
or bonded pending appeal within 60 days from the entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any reason, to
be in full force and effect, or the Borrower or any other Loan Party which
is a party to any of the Security Documents shall so assert or (ii) the
Lien created by any of the Security Documents shall cease to be enforceable
and of the same effect and priority purported to be created thereby; or
(j) The Borrower shall lose, fail to keep in force, suffer the
termination or revocation or nonrenewal of, or
50
terminate, forfeit or suffer an amendment to any FCC License at any time
owned by it which in any such case would have a Material Adverse Effect; or
(k)(i) Any Person or "group" (within the meaning of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended) other than ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and his heirs (A) shall have acquired beneficial ownership of 20%
or more of any outstanding class of Capital Stock having ordinary voting
power in the election of directors of the Borrower or (B) shall obtain the
power (whether or not exercised) to elect a majority of the Borrower's
directors or (ii) the Borrower shall fail to own, directly or indirectly,
free and clear of all Liens (other than pursuant to the Security Documents)
100% of the Capital Stock of any License Subsidiary or Member or (iii) the
Board of Directors of the Borrower shall not consist of a majority of
Continuing Directors; "CONTINUING DIRECTORS" shall mean the directors of
the Borrower on the Closing Date and each other director, if such other
director's nomination for election to the Board of Directors of the
Borrower is recommended by a majority of the then Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Required Lenders, the Agent may, or upon
the request of the Required Lenders, the Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) with the consent of the Required Lenders,
the Agent may, or upon the request of the Required Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement to be due and payable
forthwith, whereupon the same shall immediately become due and payable. Except
as expressly provided above in this Section, presentment, demand, protest and
all other notices of any kind are hereby expressly waived.
SECTION 8. THE AGENT
8.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes the Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the
51
Agent by the terms of this Agreement and the other Loan Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or 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 the Agent.
8.2 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
8.3 EXCULPATORY PROVISIONS. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of the Borrower or any other Loan Party to perform its
obligations hereunder or thereunder. The Agent shall not 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 properties, books or
records of the Borrower or any other Loan Party.
8.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, telecopy, telex or teletype message,
statement, order 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, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent. The Agent
shall be fully justified in failing or refusing
52
to take any action under this Agreement or any other Loan Document unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
8.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give notice thereof to the Lenders. The
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; PROVIDED that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.
8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender expressly
acknowledges that neither the Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or Affiliates has made any representations
or warranties to it and that no act by the Agent hereinafter taken, including
any review of the affairs of the Borrower or any other Loan Party, shall be
deemed to constitute any representation or warranty by the Agent to any Lender.
Each Lender represents to the Agent that it has, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and the other Loan Parties and
made its own decision to make its Loans hereunder and enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Agent or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the other
Loan Parties. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder, the Agent shall
not have any duty or responsibility to
53
provide any Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of the Borrower which may come into the possession of the Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
8.7 INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages in effect on the date on which indemnification
is sought (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; PROVIDED that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the Agent's gross negligence or willful misconduct. The
agreements in this subsection shall survive the payment of the Loans and all
other amounts payable hereunder.
8.8 AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the Borrower as though the Agent were not the Agent hereunder and
under the other Loan Documents. With respect to the Loans made by it, the Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall include the Agent in its
individual capacity.
8.9 SUCCESSOR AGENT. The Agent may resign as Agent upon 10 days'
notice to the Lenders. If the Agent shall resign as Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent shall be
approved by the Borrower, whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Agent shall be terminated, without any
other or
54
further act or deed on the part of such former Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Agent's
resignation as Agent, the provisions of this Section 8 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement and the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Agent may, from time to time, (a) enter into with the Borrower or the other Loan
Parties written amendments, supplements or modifications hereto and to the other
Loan Documents for the purpose of adding any provisions to this Agreement or the
other Loan Documents or changing in any manner the rights of the Lenders or of
the Borrower or the other Loan Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders or the Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of maturity of any Loan or of any installment thereof, or reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date of
any payment thereof or increase the amount or extend the expiration date of any
Lender's Commitment, in each case without the consent of each Lender affected
thereby, or (ii) amend, modify or waive any provision of this subsection or
reduce the percentage specified in the definition of Required Lenders or
Required Lenders, or consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement and the other Loan
Documents or release all or substantially all of the Collateral, in each case
without the written consent of all the Lenders, or (iii) amend, modify or waive
any provision of Section 8 without the written consent of the then Agent. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Agent and all future holders of the Loans. In the case of any
waiver, the Borrower, the Lenders and the Agent shall be restored to their
former positions and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; no such waiver shall extend to any subsequent or other Default or
Event of Default or impair any right consequent thereon.
9.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in
55
writing (including by facsimile transmission) and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (a) in the case
of delivery by hand, when delivered, (b) in the case of delivery by mail, three
days after being deposited in the mails, postage prepaid, or (c) in the case of
delivery by facsimile transmission, when sent and receipt has been confirmed,
addressed as follows in the case of the Borrower and the Agent, and as set forth
in Schedule I in the case of the other parties hereto, or to such other address
as may be hereafter notified by the respective parties hereto:
The Borrower: Big City Radio, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇,
President
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
c/o Metromedia Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Agent: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: [▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇]
Fax: ▇▇▇-▇▇▇-▇▇▇▇
PROVIDED that any notice, request or demand to or upon the Agent or the Lenders
pursuant to subsection 2.2, 2.4, 2.6, 2.8 or 2.13 shall not be effective until
received.
9.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
9.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Agent for all its
56
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent, (b) to pay or
reimburse each Lender and the Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, the fees and disbursements of counsel to each Lender and of
counsel to the Agent, (c) to pay, indemnify, and hold each Lender and the Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and the Agent harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of the Borrower or any of the Properties (all the foregoing in this
clause (d), collectively, the "indemnified liabilities"), PROVIDED, that the
Borrower shall have no obligation hereunder to the Agent or any Lender with
respect to indemnified liabilities arising from (i) the gross negligence or
willful misconduct of the Agent or any such Lender or (ii) legal proceedings
commenced against the Agent or any such Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such. The agreements in this
subsection shall survive repayment of the Loans and all other amounts payable
hereunder.
9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agent and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial lending
business and in accordance with applicable law, at any time sell to one or more
banks or other entities
57
("PARTICIPANTS") participating interests in any Loan owing to such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan for all purposes under this Agreement
and the other Loan Documents, and the Borrower and the Agent shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. The
Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff 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, PROVIDED that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in subsection 9.6 as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of subsections 2.15, 2.16 and 2.17
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; PROVIDED that, in the case of
subsection 2.16, such Participant shall have complied with the requirements of
said subsection and PROVIDED, FURTHER, that no Participant shall be entitled to
receive any greater amount pursuant to any such subsection than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial lending
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of the
Agent and the Borrower (which shall not, in either case, be unreasonably
withheld), to an additional bank or financial institution ("an ASSIGNEE") all or
any part of its rights and obligations under this Agreement and the other Loan
Documents pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit D, executed by such Assignee, such assigning Lender (and, in the case of
an Assignee that is not then a Lender or an affiliate thereof, by the Agent) and
delivered to the Agent for its acceptance and recording in the Register of the
aggregate principal amount of the Loans and the aggregate amount of the
Available Commitment of all the Lenders then outstanding (or such lesser amount
as may be agreed to by the Borrower and the Agent). Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment
58
and Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, 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,
such assigning Lender shall cease to be a party hereto).
(d) The Agent, on behalf of the Borrower, shall maintain at the
address of the Agent referred to in subsection 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "REGISTER") for the recordation
of the names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Agent) together with payment to
the Agent of a registration and processing fee of $3,500, the Agent shall (i)
promptly accept such Assignment and Acceptance and (ii) on the effective date
determined pursuant thereto record the information contained therein in the
Register and give notice of such acceptance and recordation to the Lenders and
the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "TRANSFEREE") and any prospective Transferee any and all
financial information in such Lender's possession concerning the Borrower and
its Affiliates which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute
59
assignments and that such provisions do not prohibit assignments creating
security interests, including, without limitation, any pledge or assignment by a
Lender of any Loan or Note to any Federal Reserve Bank in accordance with
applicable law.
9.7 TERMINATION OF AGREEMENTS. In connection with this amended and
restated credit agreement, the following agreements shall be terminated
effective as of the Closing Date:
(a) the existing Guarantee, dated as of May 30th, 1996, by Mr. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ in favor of The Chase Manhattan Bank (formerly known as "Chemical
Bank") and among Odyssey, the Agent and the Lenders;
(b) the existing Pledge Agreement, dated as of May 30th, 1996, by Mr.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ in favor of The
Chase Manhattan Bank (formerly known as "Chemical Bank"), as Agent, among
Odyssey, the Agent and the Lenders;
(c) the existing Bailment and Pledge Agreement, dated as of May 30th,
1996, by Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ in favor of The Chase Manhattan Bank (formerly
known as "Chemical Bank") for the Lenders parties to the Existing Credit
Agreement, dated as of May 30th, 1996, among Odyssey, the Agent and the
Lenders.
9.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Borrower and the
Agent.
9.9 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
9.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrower, the Agent and the Lenders with respect
to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
60
9.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 9.2 or at such other
address of which the Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this subsection any special, exemplary, punitive or consequential
damages.
9.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship
with or duty to the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents, and the relationship between
Agent and Lenders, on one hand, and the Borrower, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the
61
transactions contemplated hereby among the Lenders or among the Borrower
and the Lenders.
9.14 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
62
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
BIG CITY RADIO, INC.
By:
------------------------------
Title:
THE CHASE MANHATTAN BANK,
as Agent and as a Lender
By:
------------------------------
Title:
1
SCHEDULE I
The Chase Manhattan Bank $35,000,000
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Facsimile number: ( )
SCHEDULE 3.15
[Subsidiaries]
SCHEDULE 3.19
[FCC Licenses and Permits]
SCHEDULE 6.4
[Guarantee Obligations]
EXHIBIT A TO
CREDIT AGREEMENT
[FORM OF NOTE]
$_________________ New York, New York
______________ __, 1996
FOR VALUE RECEIVED, the undersigned, Big City Radio, Inc., a Delaware
subchapter S corporation (the "BORROWER"), hereby unconditionally promises to
pay to the order of (the "LENDER") at the office of The
Chase Manhattan Bank, located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in
lawful money of the United States of America and in immediately available
funds, on the Termination Date the principal amount of (a)
DOLLARS ($ ), or, if less, (b) the aggregate unpaid principal amount of
all Loans made by the Lender to the Borrower pursuant to subsection 2.1 of the
Credit Agreement, as hereinafter defined. The Borrower further agrees to pay
interest in like money at such office on the unpaid principal amount hereof
from time to time outstanding at the rates and on the dates specified in
subsections 2.8 and 2.10 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date, type and amount of each Loan
made pursuant to the Credit Agreement and the date and amount of each payment or
prepayment of principal thereof, each continuation thereof, each conversion of
all or a portion thereof to another Type and, in the case of Eurodollar Loans,
the length of each Interest Period with respect thereto. Each such endorsement
shall constitute PRIMA FACIE evidence of the accuracy of the information
endorsed. The failure to make any such endorsement shall not affect the
obligations of the Borrower in respect of such Loan.
This Note (a) is one of the Notes referred to in the Credit Agreement dated
as of May 24, 1996 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among the Borrower, the Lender, the other banks
and financial institutions from time to time parties thereto and The Chase
Manhattan Bank, as agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or
in part as provided in the Credit Agreement. This Note is secured and
guaranteed as provided in the Loan Documents. Reference is hereby made to the
Loan Documents for a description of the properties and assets in which a
security interest has been granted, the nature and extent of the security and
the guarantees, the terms and conditions upon which the security interests and
the guarantee were granted and the rights of the holder of this Note in respect
thereof.
2
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
Big City Radio, Inc.
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
Schedule A
to Note
LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
Amount Amount of ABR Loans Unpaid Principal
Converted to Amount of Principal of Converted to Balance Notation
Date Amount of ABR Loans ABR Loans ABR Loans Repaid Eurodollar Loans of ABR Loans Made By
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
-------------- ------------------- -------------- ------------------------- ------------------- ------------------- ---------------
Schedule B
to Notes
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
Amount Converted Amount of Principal Amount of Eurodollar Unpaid Principal
Amount of to Eurodollar of Eurodollar Loans Loans Converted to Balance of Notation
Date Eurodollar Loans Loans Repaid ABR Loans Eurodollar Loans Made By
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
-------------- ------------------- ----------------- --------------------- -------------------- ------------------- ---------------
EXHIBIT B TO
CREDIT AGREEMENT
CLOSING CERTIFICATE
Pursuant to subsection 5.1(b),(c),(d),(i),(j),(k),(l) and (m) of the
Credit Agreement, dated as of May , 1996 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Big City
Radio, Inc. (the "BORROWER"), the Lenders parties thereto and The Chase
Manhattan Bank, as agent, the undersigned, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, President of
the Borrower hereby certifies that:
1. Unless otherwise defined herein, terms which are defined in the
Credit Agreement and used herein are so used as so defined;
2. The representations and warranties (i) set forth in the Credit
Agreement and the other Loan Documents or which are contained in any
certificate, document or financial or other statement furnished pursuant to or
in connection with any of the foregoing and (ii) made by the Borrower are true
and correct in all material respects on and as of the date hereof with the same
effect as if made on the date hereof, except for any representation and warranty
which is expressly made as of an earlier date, which representation and warranty
is true and correct in all material respects as of such earlier date;
3. Immediately prior to and immediately after the making of any
extension of credit requested to be made on the date hereof, no Default or Event
of Default will have occurred and will be continuing under the Credit Agreement;
4. Attached hereto as EXHIBIT A are copies of all consents,
authorizations and filings referred to in subsection 4.20 of the Credit
Agreement; and such consents, licenses and filings are in full force and effect;
5. The sale of the Q Stations by Q Broadcasting and the purchase
thereof by Commodore pursuant to the Q Asset Purchase Documents is consummated
as of the Closing Date; the Q Merger pursuant to the Q Merger Documents is
consummated as of the Closing Date; all transactions contemplated by each of the
Q Merger Documents and the Q Asset Purchase Documents are consummated as of the
Closing Date (without waiver of, or any forbearance to exercise any rights with
respect to, any material term or provision of the Q Merger Documents or the Q
Asset Purchase Documents); and attached hereto as EXHIBIT B are all the
documents delivered in connection with the Q Merger Documents and the Q Asset
Purchase Documents.
6. The assets to be placed in and subsequently distributed from the
Financial Intermediary's Account pursuant to the Financial Intermediary
Agreement is so placed and distributed as of the Closing Date; all transactions
contemplated by the Financial
2
Intermediary Agreement are consummated as of the Closing Date (without waiver
of, or any forbearance to exercise any rights with respect to, any material term
or provision of the Financial Intermediary Agreement); and attached hereto as
EXHIBIT C are copies of all documents delivered in connection with the Financial
Intermediary Agreement.
7. The Acquisitions are consummated as of the Closing Date; all
transactions contemplated by the Acquisition Agreements are consummated as of
the Closing Date (without waiver of, or any forbearance to exercise any rights
with respect to, any material term or provision of the Acquisition Agreements);
and attached hereto as EXHIBIT D are copies of all the documents delivered in
connection with the Acquisition Agreements.
8. ___________ is and at all times since ___________ has been the
duly elected and qualified [Assistant] Secretary of the Borrower and the
signature set forth on the signature line of such officer below is such
officer's true and genuine signature; and the undersigned [Assistant] Secretary
of the Borrower hereby certifies as follows:
(a) There are no liquidation or dissolution proceedings pending or to
my knowledge threatened against the Borrower nor has any other event
occurred affecting or threatening the existence of the Borrower; and
(b) The Borrower is duly organized and validly existing under the
laws of the jurisdiction of its organization;
(c) Attached hereto as EXHIBIT E is a true and complete copy of the
resolutions duly adopted by the Board of Directors of the Borrowers on
_______________; such resolutions have not in any way been rescinded
or modified and have been in full force and effect since their
adoption to and including the date hereof and are now in full force
and effect; such resolutions are the only corporate proceedings of the
Borrower now in force relating to or affecting the matters referred to
therein; attached hereto as EXHIBIT F is a true and complete copy of
the By-laws of the Borrower as in effect on the date such corporate
resolutions were adopted through the date hereof; and attached hereto
as EXHIBIT G is a true and complete copy of the Certificate of
Incorporation of the Borrower as in effect on the date such corporate
resolutions were adopted through the date hereof;
(d) The persons listed on Schedule I hereto are now duly elected and
qualified officers of the Borrower, holding the offices indicated next
to their respective names, and such officers have held such offices
with the Borrower since _____________ to and including the date
hereof, and the signatures appearing opposite their respective names
are copies of the true and genuine signatures of such officers, and
each of such officers is duly authorized to execute and deliver on
behalf of the Borrower the Credit Agreement and any other Loan
Documents to which the Borrower is a party.
3
IN WITNESS WHEREOF, the undersigned have hereunto set our names.
----------------------------- ------------------------------
Name: Name:
Title: President Title: [Assistant] Secretary
Date: May __, 1996
4
SCHEDULE I TO CLOSING CERTIFICATE
---------------------------------
NAME OFFICE SIGNATURE
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ President ______________________
[Any other officers signing?]
EXHIBIT C-1 TO
AMENDED AND RESTATED CREDIT AGREEMENT
[FORM OF OPINION OF COUNSEL TO BORROWER]
___________ __, 1997
The Chase Manhattan Bank, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And each of the Lenders identified in the Amended
and Restated Credit Agreement referred to below
We have acted as counsel to Big City Radio, Inc., a Delaware
subchapter S corporation (the "BORROWER"), in connection with (a) the Amended
and Restated Credit Agreement, dated as of __________ __, 1997 (the "CREDIT
AGREEMENT"), among the Borrower, the lenders parties thereto (the "LENDERS") and
The Chase Manhattan Bank, as agent for the Lenders (in such capacity, the
"AGENT"), and (b) the Notes and the other Loan Documents referred to in the
Credit Agreement.
The opinions expressed below are furnished to you pursuant to
subsection 4.1(j)(i) of the Credit Agreement. Unless otherwise defined herein,
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement.
In arriving at the opinions expressed below,
(a) we have examined and relied on the originals, or copies certified
or otherwise identified to our satisfaction, of each of (1) the Credit Agreement
and (2) the Notes dated the date hereof and (3) the other Loan Documents listed
on SCHEDULE 1 attached hereto (the Credit Agreement and the Notes and such other
documents being hereinafter referred to collectively as the "TRANSACTION
DOCUMENTS");
(b) we have examined unfiled copies of the financing statements listed
on SCHEDULE 2 (collectively, the "FINANCING STATEMENTS") naming the Borrower as
Debtor and the Agent as Secured Party and describing the Collateral (as defined
in the Security Agreement) as to which security interests may be perfected by
filing under the Uniform Commercial Code of the States listed on SCHEDULE 2 (the
"FILING COLLATERAL"), which we understand will be filed in the filing offices
listed on SCHEDULE 2 (the "FILING OFFICES"); and
2
(c) we have examined such corporate documents and records of the
Borrower and such other instruments and certificates of public officials,
officers and representatives of the Borrower and other Persons as we have deemed
necessary or appropriate for the purposes of this opinion.
In arriving at the opinions expressed below, we have made such
investigations of law, in each case as we have deemed appropriate as a basis for
such opinions.
In rendering the opinions expressed below, we have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to us as originals, (b) the genuineness of all
signatures on all documents that we examined and (c) the conformity to authentic
originals of documents submitted to us as certified, conformed or photostatic
copies.
When our opinions expressed below are stated "to the best of our
knowledge," we have made reasonable and diligent investigation of the subject
matters of such opinions and have no reason to believe that there exist any
facts or other information that would render such opinions incomplete or
incorrect.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Borrower (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged and (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified could not, in the aggregate, have a Material Adverse Effect.
2. The Borrower has the corporate power and authority, and the legal
right, to make, deliver and perform its obligations under the Credit Agreement
and each of the other Transaction Documents to which it is a party and to borrow
under the Credit Agreement. The Borrower has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of the Credit
Agreement and the other Transaction Documents to grant the security interests
contemplated by the Security Documents to which it is a party and to authorize
the execution, delivery and performance of the Credit Agreement and the other
Transaction Documents to which it is a party. Except for (a) consents,
authorizations, approvals, notices and filings which have been obtained, made or
waived and are in full force and effect, and (b) the filings and recordings
described on SCHEDULE 2 attached hereto, no consent or authorization of,
approval by, notice to, filing with or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings under the Credit Agreement or with the execution, delivery,
performance, validity or enforceability of the Credit Agreement and the other
Transaction Documents or the perfection of the security interests created by the
Security Documents.
3
3. Each of the Credit Agreement and the other Transaction Documents to
which the Borrower is a party has been duly executed and delivered on behalf of
the Borrower and constitutes a legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms.
4. The execution and delivery of the Credit Agreement and the other
Transaction Documents to which the Borrower is a party, the performance by the
Borrower of its obligations thereunder, the consummation of the transactions
contemplated thereby, the compliance by the Borrower with any of the provisions
thereof, the borrowings under the Credit Agreement and the use of proceeds
thereof, all as provided therein, (a) will not violate, or constitute a default
under, any Requirement of Law or, to the best of our knowledge, any Contractual
Obligations of the Borrower and (b) will not result in, or require, the creation
or imposition of any Lien on any of its or their respective properties or
revenues, except the security interests created pursuant to the Security
Documents.
5. To the best of our knowledge, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or
threatened by or against the Borrower or against any of its properties or
revenues (a) with respect to the Credit Agreement or any of the other
Transaction Documents, or (b) which could reasonably be expected to have a
Material Adverse Effect.
6. To the best of our knowledge, the Borrower is not in default under or
with respect to any Contractual Obligations in any respect which could
reasonably be expected to have a Material Adverse Effect.
7. The Borrower is not an "investment company," or a company "controlled"
by an "investment company," within the meaning of the Investment Company Act of
1940, as amended. The Borrower is not subject to regulation under any Federal or
state statute or regulation (other than Regulation X of the Board of Governors
of the Federal Reserve System) which limits its ability to incur Indebtedness.
8. SCHEDULE 3 attached hereto sets forth, as of the date hereof, the
number of authorized, issued and outstanding shares of each class of the
Borrower's capital stock, the names and record owners of such shares and the
number of shares owned of record by each of such owners. To the best of our
knowledge, there are no outstanding subscriptions, options, warrants, calls,
rights (including preemptive rights) or any other agreements or commitments of
any nature with respect to the capital stock of the Borrower.
9. (a) The provisions of the Security Agreement create in favor of the
Agent a legal, valid and enforceable security interest in the Collateral (as
defined in the Security Agreement).
(b) The Agent upon filing of the Financing Statements in the Filing
Offices will have a perfected security interest in the Filing Collateral.
4
Our opinions set forth in paragraphs 3 and 9 above are subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
We are members of the bar of the State of New York and we express no
opinion as to the laws of any jurisdiction other than the laws of the State of
New York, the General Corporate Law of the State of Delaware, the Uniform
Commercial Code of California and New York and the Federal laws of the United
States of America.
Very truly yours,
SCHEDULE 1
TRANSACTION DOCUMENTS
The Security Agreement, dated as of _____________________, 1997,
executed by the Borrower in favor of the Agent.
[The Assignment of Leases, dated as of __________________, 1997,
executed by the Borrower in favor of the Agent and the Lenders].
SCHEDULE 2
FINANCING STATEMENTS
STATE FILING OFFICE
----- -------------
California
New York
SCHEDULE 3
BORROWER'S CAPITAL STOCK
EXHIBIT C-2 TO
AMENDED AND RESTATED CREDIT AGREEMENT
[FORM OF OPINION OF SPECIAL COUNSEL TO BORROWER]
December __, 1997
The Chase Manhattan Bank, as Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And each of the Lenders parties to the
Credit Agreement referred to below
We have acted as special regulatory counsel to BIG CITY RADIO, INC., a
Delaware corporation (the "BORROWER"), in connection with (a) the Amended and
Restated Credit Agreement, dated as of December __, 1997 (the "CREDIT
AGREEMENT"), among the Borrower, the lenders parties thereto (the "LENDERS") and
The Chase Manhattan Bank, as agent for the Lenders (in such capacity, the
"AGENT"), and (b) the Notes and the other Loan Documents referred to in the
Credit Agreement.
The opinions expressed below are furnished to you pursuant to subsection
4.1(j)(ii) of the Credit Agreement. Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
In arriving at the opinions expressed below,
(a) we have examined and relied on the originals, or copies certified or
otherwise identified to our satisfaction, of each of (1) the Credit Agreement
and (2) the Notes dated the date hereof and (3) the other Loan Documents listed
on SCHEDULE 1 attached hereto (the Credit Agreement and the Notes and such other
documents being hereinafter referred to collectively as the "TRANSACTION
DOCUMENTS");
(b) we have reviewed the relevant provisions of the Communications Act of
1934, as amended, 47 U.S.C. Section 151 et seq. (the "COMMUNICATIONS ACT") and
the rules and regulations of the Federal Communications Commission (the "FCC")
and such administrative and judicial decisions as we have deemed pertinent.
The Chase Manhattan Bank, as Agent 2 December __, 1997
In rendering the opinions expressed below, we have assumed, with your
permission, without independent investigation or inquiry, (a) the authenticity
of all documents submitted to us as originals, (b) the genuineness of all
signatures on all documents that we examined (other than those of the Borrower
and officers of the Borrower and (c) the conformity to authentic originals of
documents submitted to us as certified, conformed or photostatic copies.
Based upon and subject to the foregoing, we are of the opinion that no
consent or authorization of the FCC, and no filing with the FCC, is required by
the Borrower or any party to the Transaction Documents in connection with (i)
the execution, delivery, performance or enforcement of the Transaction Documents
or the borrowings contemplated by the Transaction Documents or (ii) the
perfection of any security interest under the Transaction Documents. These
opinions are subject to the following qualifications:
(1) Under currently applicable law, security interests in licenses issued
by the FCC are invalid. Because Section 5.10(c) of the Credit
Agreement provides that the Agent, on behalf of the Lenders, shall
only have a security interest in the FCC Licenses at such times and to
the extent that a security interest in such licenses is permitted
under applicable law, the Loan Documents must be construed, consistent
with current FCC requirements, as not currently creating a security
interest in the FCC Licenses.
(2) To the extent that performance under or enforcement of any of the Loan
Documents includes a transfer of voting rights in any entity that
holds an FCC License or controls an FCC Licensee, or operation of any
of Stations by a party other than the Borrower, or any other action
that would constitute an assignment of any of the FCC Licenses or a
transfer of control of the entities that currently hold those
licenses, prior FCC approval of such assignment of license or transfer
of control would be required.
(3) If the provisions of Section of the Security Agreement are intended
to give the Agent authority to sign FCC applications or other filings
on behalf of the Borrower, those provisions are inconsistent with
current FCC regulations and any such signature would not currently be
recognized as effective by the FCC.
(4) FCC regulations require that certain contracts and agreements relating
to ownership and control of broadcast licensees be filed with the FCC
within 30 days of their execution. Pursuant to those regulations, it
is our opinion that the Transaction Documents must be filed with the
FCC within 30 days of execution.
This opinion letter is specifically limited to matters relating to the
Communications Act and the rules and regulations of the FCC, all as currently in
effect.
Very truly yours,
SCHEDULE 1
TRANSACTION DOCUMENTS
The Amended and Restated Security Agreement, dated as of December __,
1997, executed by the Borrower in favor of the Agent.
EXHIBIT D TO
AMENDED AND RESTATED CREDIT AGREEMENT
[FORM OF
ASSIGNMENT AND ACCEPTANCE]
Reference is made to the Amended and Restated Credit Agreement, dated
as of ___________ __ , 1997 (as amended, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"), among Big City Radio, Inc. (the
"BORROWER"), the Lenders named therein and The Chase Manhattan Bank, as
administrative agent for the Lenders (in such capacity, the "AGENT"). Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement.
The Assignor identified on Schedule l hereto (the "ASSIGNOR") and the
Assignee identified on Schedule l hereto (the "ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "ASSIGNED INTEREST") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"ASSIGNED FACILITY"; collectively, the "ASSIGNED FACILITIES"), in a principal
amount for each Assigned Facility as set forth on Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other obligor or the performance or
observance by the Borrower or any other obligor of any of their respective
obligations under the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (c) attaches
any Notes held by it evidencing the Assigned Facilities and (i) requests that
the Agent, upon request by the Assignee, exchange the attached Notes for a new
Note or Notes payable to the Assignee and (ii) if the Assignor has retained any
interest in the Assigned Facility, requests that the Agent exchange the attached
Notes for a new Note or Notes payable to the Assignor, in each case in amounts
which reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective on the Effective Date).
2
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Agent by the terms thereof, together with such powers as are
incidental thereto; and (e) agrees that it will be bound by the provisions of
the Credit Agreement and will perform in accordance with its terms all the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to subsection
2.17(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule 1 hereto (the "EFFECTIVE
DATE"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the Agent pursuant
to the Credit Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Agent, be earlier than five Business Days
after the date of such acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including payments of principal, interest, fees and other amounts) to the
Assignor for amounts which have accrued to the Effective Date and to the
Assignee for amounts which have accrued subsequent to the Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Agent for periods prior to the Effective Date or with respect to the making
of this assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
Schedule 1
to Assignment and Acceptance
Name of Assignor:_____________________________________
Name of Assignee:_____________________________________
Effective Date of Assignment:_________________________
Credit Principal
Facility Assigned Amount Assigned Commitment Percentage Assigned(1)
----------------- --------------- ---------------------------------
$___________ __.___________%
[Name of Assignee] [Name of Assignor]
By: By:
---------------------------- ----------------------------
Title: Title:
Accepted: Consented To:
THE CHASE MANHATTAN BANK, (2) Big City Radio, Inc.(3)
as Administrative Agent
By: By:
---------------------------- ----------------------------
Title: Title:
-------------------------
(1) Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the aggregate commitments of all
Lenders.
(2) The Administrative Agent's consent as well as acceptance is required when
the Assignee is not a Lender or an Affiliate thereof.
(3) The Borrower's consent is required where the Assignee is not a Lender or
any Affiliate thereof.
EXHIBIT E
TO CREDIT AGREEMENT
================================================================================
AMENDED AND RESTATED SECURITY AGREEMENT
made by
BIG CITY RADIO, INC.
and certain of its Subsidiaries
in favor of
THE CHASE MANHATTAN BANK,
as Administrative Agent
Dated as of December , 1997
================================================================================
TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . 5
SECTION 2. GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Right of Contribution . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 No Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 Amendments, etc. with respect to the Borrower Obligations . . . . . 6
2.5 Guarantee Absolute and Unconditional. . . . . . . . . . . . . . . . 7
2.6 Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.7 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3. GRANT OF SECURITY INTEREST . . . . . . . . . . . . . . . . . . 8
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 9
4.1 Representations in Credit Agreement . . . . . . . . . . . . . . . . 9
4.2 Title; No Other Liens . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 Perfected First Priority Liens. . . . . . . . . . . . . . . . . . . 9
4.4 Chief Executive Office. . . . . . . . . . . . . . . . . . . . . . . 9
4.5 Inventory and Equipment . . . . . . . . . . . . . . . . . . . . . . 9
4.6 Farm Products . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 Pledged Securities. . . . . . . . . . . . . . . . . . . . . . . . . 9
4.8 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.9 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . 10
4.10 Investment Property . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 5. COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.1 Covenants in Credit Agreement . . . . . . . . . . . . . . . . . . . 11
5.2 Delivery of Instruments and Chattel Paper . . . . . . . . . . . . . 11
5.3 Maintenance of Insurance. . . . . . . . . . . . . . . . . . . . . . 11
5.4 Payment of Obligations. . . . . . . . . . . . . . . . . . . . . . . 11
5.5 Maintenance of Perfected Security Interest; Further Documentation
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Changes in Locations, Name, etc.. . . . . . . . . . . . . . . . . . 12
5.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.8 Pledged Securities. . . . . . . . . . . . . . . . . . . . . . . . . 12
5.9 Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.10 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . 14
i
Page
SECTION 6. REMEDIAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . 15
6.1 Certain Matters Relating to Receivables . . . . . . . . . . . . . . 15
6.2 Communications with Obligors; Grantors Remain Liable. . . . . . . . 15
6.3 Pledged Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.4 Proceeds to be Turned Over To Administrative Agent. . . . . . . . . 17
6.5 Application of Proceeds . . . . . . . . . . . . . . . . . . . . . . 17
6.6 Code and Other Remedies . . . . . . . . . . . . . . . . . . . . . . 17
6.7 Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . 18
6.8 Waiver; Deficiency. . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . 19
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc . . . . 19
7.2 Duty of Administrative Agent. . . . . . . . . . . . . . . . . . . . 21
7.3 Execution of Financing Statements . . . . . . . . . . . . . . . . . 21
7.4 Authority of Administrative Agent . . . . . . . . . . . . . . . . . 21
SECTION 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Amendments in Writing . . . . . . . . . . . . . . . . . . . . . . . 22
8.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 No Waiver by Course of Conduct; Cumulative Remedies . . . . . . . . 22
8.4 Enforcement Expenses; Indemnification . . . . . . . . . . . . . . . 22
8.5 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 22
8.6 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.7 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.8 Section Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.9 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.11 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . 23
8.12 Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.13 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . 24
8.14 Additional Grantors . . . . . . . . . . . . . . . . . . . . . . . . 24
8.15 Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SCHEDULES
Schedule 1 Notice of Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security Interests
Schedule 4 Location of Jurisdiction of Organization and Chief Executive Office
Schedule 5 Location of Inventory and Equipment
Schedule 6 Copyrights and Copyright Licenses; Patents and Patent Licenses;
Trademarks and Trademark Licenses
Annex 1 to Amended and Restated Security Agreement
ii
DRAFT
Last Revised 12/5/97
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (this "Agreement"), dated as
of December, 1997, made by each of the signatories hereto (together with any
other entity that may become a party hereto as provided herein, the "GRANTORS"),
in favor of THE CHASE MANHATTAN BANK, as Administrative Agent (in such capacity,
the "ADMINISTRATIVE AGENT") for the banks and other financial institutions (the
"LENDERS") from time to time parties to the Credit Agreement, dated as of May
30, 1996 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among Big City Radio, Inc. (the "BORROWER"), the Lenders
and the Administrative Agent.
W I T N E S E T H:
WHEREAS, the Borrower entered into the original Credit Agreement dated
May 30, 1996, and the original Security Agreement dated May 30, 1996;
WHEREAS, the original Credit Agreement was amended and restated on
December
, 1997 in order to finance the Borrower's initial public offering (the "IPO");
WHEREAS, it is a condition precedent [pursuant] to the amended and
restated Credit Agreement ("the "EXISTING CREDIT AGREEMENT"), that the Borrower
and each other Grantor enter into this Agreement;
WHEREAS, pursuant to the Existing Credit Agreement, the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, the Borrower is a member of an affiliated group of companies
that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable transfers
to one or more of the other Grantors in connection with the operation of their
respective businesses;
WHEREAS, the Borrower and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
2
SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement, and the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date hereof are used
herein as so defined: Accounts, Chattel Paper, Documents, Equipment, Farm
Products, Instruments, Inventory and Investment Property.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Amended and Restated Security Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"BORROWER OBLIGATIONS": the collective reference to the unpaid
principal of and interest on the Loans and all other obligations and
liabilities of the Borrower (including, without limitation, interest
accruing at the then applicable rate provided in the Credit Agreement after
the maturity of the Loans and interest accruing at the then applicable rate
provided in the Credit Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to the
Administrative Agent or any Lender [(or, in the case of any Hedge Agreement
referred to below, any Affiliate of any Lender)], whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, this Agreement, the other Loan Documents [or any
Hedge Agreement entered into by the Borrower with any Lender (or any
Affiliate of any Lender)] or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Lenders that are required to
be paid by the Borrower pursuant to the terms of any of the foregoing
agreements).
"COLLATERAL": as defined in Section 3.
"COLLATERAL ACCOUNT": any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.
"COPYRIGHTS": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in SCHEDULE 6), all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
"COPYRIGHT LICENSES": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
SCHEDULE 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
3
"GENERAL INTANGIBLES": all "general intangibles" as such term is
defined in Section 9-106 of the Uniform Commercial Code in effect in the
State of New York on the date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts, agreements,
instruments and indentures in any form, and portions thereof, to which such
Grantor is a party or under which such Grantor has any right, title or
interest or to which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended, supplemented or
otherwise modified, including, without limitation, (i) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (ii) all rights of such Grantor to damages arising
thereunder and (iii) all rights of such Grantor to perform and to exercise
all remedies thereunder, in each case to the extent the grant by such
Grantor of a security interest pursuant to this Agreement in its right,
title and interest in such contract, agreement, instrument or indenture is
not prohibited by such contract, agreement, instrument or indenture without
the consent of any other party thereto, would not give any other party to
such contract, agreement, instrument or indenture the right to terminate
its obligations thereunder, or is permitted with consent if all necessary
consents to such grant of a security interest have been obtained from the
other parties thereto (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents); PROVIDED, that
the foregoing limitation shall not affect, limit, restrict or impair the
grant by such Grantor of a security interest pursuant to this Agreement in
any Receivable or any money or other amounts due or to become due under any
such contract, agreement, instrument or indenture.
"GRANTORS": as defined in the recitals hereto.
"GUARANTOR OBLIGATIONS": with respect to any Guarantor, the
collective reference to (i) the Borrower Obligations and (ii) all
obligations and liabilities of such Guarantor which may arise under or in
connection with this Agreement or any other Loan Document to which such
Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements of
counsel to the Administrative Agent or to the Lenders that are required to
be paid by such Guarantor pursuant to the terms of this Agreement or any
other Loan Document).
"GUARANTORS": the collective reference to each Grantor other than the
Borrower.
["HEDGE AGREEMENTS": as to any Person, all interest rate swaps, caps
or collar agreements or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates or currency
exchange rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.]
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether
arising under United States, multinational or foreign laws or otherwise,
including, without limitation, the Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the Trademarks and the Trademark Licenses,
and all rights to ▇▇▇ at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom.
4
"INTERCOMPANY NOTE": any promissory note evidencing loans made by any
Grantor to any of its Subsidiaries.
"ISSUERS": the collective reference to each issuer of a Pledged
Security.
"NEW YORK UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"OBLIGATIONS": (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.
"PATENTS": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including, without
limitation, any of the foregoing referred to in SCHEDULE 6, (ii) all
applications for letters patent of the United States or any other country
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in SCHEDULE
6, and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"PATENT LICENSE": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell
any invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in SCHEDULE 6.
"PLEDGED NOTES": all promissory notes listed on SCHEDULE 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor (other than promissory
notes issued in connection with extensions of trade credit by any Grantor
in the ordinary course of business).
"PLEDGED SECURITIES": the collective reference to the Pledged Notes
and the Pledged Stock.
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect.
"PROCEEDS": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New York
on the date hereof and, in any event, shall include, without limitation,
all dividends or other income from the Pledged Securities, collections
thereon or distributions or payments with respect thereto.
"RECEIVABLE": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument
or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"SECURITIES ACT": the Securities Act of 1933, as amended.
5
"TRADEMARKS": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State
thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, including, without
limitation, any of the foregoing referred to in SCHEDULE 6, and (ii) the
right to obtain all renewals thereof.
"TRADEMARK LICENSE": any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred to
in SCHEDULE 6.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) The words "hereof," "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the Administrative
Agent, for the ratable benefit of the Lenders and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated maturity, by
acceleration or otherwise) of the Borrower Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations may at any
time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any Lender
hereunder.
(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the obligations of each
Guarantor under the guarantee
6
contained in this Section 2 shall have been satisfied by payment in full and the
Commitments shall be terminated, notwithstanding that from time to time during
the term of the Credit Agreement the Borrower may be free from any Borrower
Obligations.
(e) No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any Lender from the Borrower, any of the Guarantors, any other
guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Borrower Obligations are paid in
full and the Commitments are terminated.
2.2 RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment. Each Guarantor's right of contribution
shall be subject to the terms and conditions of Section 2.3. The provisions of
this Section 2.2 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the Lenders, and each Guarantor
shall remain liable to the Administrative Agent and the Lenders for the full
amount guaranteed by such Guarantor hereunder.
2.3 NO SUBROGATION. Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrower or any other Guarantor or any collateral security or
guarantee or right of offset held by the Administrative Agent or any Lender for
the payment of the Borrower Obligations, nor shall any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Administrative Agent and the Lenders by the Borrower on
account of the Borrower Obligations are paid in full and the Commitments are
terminated. If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all of the Borrower Obligations shall not
have been paid in full, such amount shall be held by such Guarantor in trust for
the Administrative Agent and the Lenders, segregated from other funds of such
Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over
to the Administrative Agent in the exact form received by such Guarantor (duly
indorsed by such Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be rescinded by
the Administrative Agent or such Lender and any of the Borrower Obligations
continued, and the Borrower Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or guarantee therefor
or right of offset with respect thereto, may, from time to
7
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and the Credit Agreement and the other Loan Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders or all Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the Administrative Agent or any Lender for the
payment of the Borrower Obligations may be sold, exchanged, waived, surrendered
or released. Neither the Administrative Agent nor any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations and notice of or proof of reliance by the Administrative
Agent or any Lender upon the guarantee contained in this Section 2 or acceptance
of the guarantee contained in this Section 2; the Borrower Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between the Borrower and
any of the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the Guarantors
with respect to the Borrower Obligations. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender, (b) any
defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Administrative Agent or any Lender, or
(c) any other circumstance whatsoever (with or without notice to or knowledge of
the Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for the Borrower
Obligations, or of such Guarantor under the guarantee contained in this Section
2, in bankruptcy or in any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any Lender may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against the Borrower, any other Guarantor or any other Person or against
any collateral security or guarantee for the Borrower Obligations or any right
of offset with respect thereto, and any failure by the Administrative Agent or
any Lender to make any such demand, to pursue such other rights or remedies or
to collect any payments from the Borrower, any other Guarantor or any other
Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower, any other
Guarantor or any other Person or any such collateral security, guarantee or
right of offset, shall not relieve any Guarantor of any obligation or liability
hereunder, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent or
any Lender against any Guarantor. For the purposes hereof "demand" shall
include the commencement and continuance of any legal proceedings.
8
2.6 REINSTATEMENT. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations is rescinded or
must otherwise be restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or otherwise,
all as though such payments had not been made.
2.7 PAYMENTS. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the office of the Administrative Agent located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the Administrative Agent,
and hereby grants to the Administrative Agent, for the ratable benefit of the
Lenders, a security interest in all of the following property now owned or at
any time hereafter acquired by such Grantor or in which such Grantor now has or
at any time in the future may acquire any right, title or interest
(collectively, the "COLLATERAL"), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of such Grantor's Obligations and, in the case of the
Borrower, confirms and reaffirms its grant of Collateral under the Loan
Documents:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Investment Property
(k) all Pledged Securities;
(l) all books and records pertaining to the Collateral; and
9
(m) to the extent not otherwise included, all Proceeds and products of
any and all of the foregoing and all collateral security and guarantees
given by any Person with respect to any of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their respective extensions
of credit to the Borrower thereunder, each Grantor hereby represents and
warrants to the Administrative Agent and each Lender that:
4.1 REPRESENTATIONS IN CREDIT AGREEMENT. In the case of each
Guarantor, the representations and warranties set forth in subsection 3 of the
Credit Agreement as they relate to such Guarantor or to the Loan Documents to
which such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and the Administrative Agent and each Lender
shall be entitled to rely on each of them as if they were fully set forth
herein, PROVIDED that each reference in each such representation and warranty to
the Borrower's knowledge shall, for the purposes of this Section 4.1, be deemed
to be a reference to such Guarantor's knowledge.
4.2 TITLE; NO OTHER LIENS. Except for the security interest granted
to the Administrative Agent for the ratable benefit of the Lenders pursuant to
this Agreement and the other Liens permitted to exist on the Collateral by the
Credit Agreement, such Grantor owns each item of the Collateral free and clear
of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
Administrative Agent, for the ratable benefit of the Lenders, pursuant to this
Agreement or as are permitted by the Credit Agreement.
4.3 PERFECTED FIRST PRIORITY LIENS. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on SCHEDULE 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in all of the Collateral in favor of the Administrative Agent, for the
ratable benefit of the Lenders, as collateral security for such Grantor's
Obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for [(i)] unrecorded Liens permitted by the
Credit Agreement which have priority over the Liens on the Collateral by
operation of law [and (ii) Liens described on SCHEDULE 9].
4.4 CHIEF EXECUTIVE OFFICE. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on SCHEDULE 4.
4.5 INVENTORY AND EQUIPMENT. On the date hereof, the Inventory and
the Equipment (other than mobile goods) are kept at the locations listed on
SCHEDULE 5.
4.6 FARM PRODUCTS. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
10
4.7 PLEDGED SECURITIES. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor.
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
4.8 RECEIVABLES. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Administrative Agent.
(b) None of the obligors on any Receivables is a Governmental
Authority.
(c) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.9 INTELLECTUAL PROPERTY. (a) SCHEDULE 6 lists all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe upon the intellectual property rights of any other Person.
(c) Except as set forth in SCHEDULE 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
11
4.10 INVESTMENT PROPERTY. To the extent not included in the Pledged
Securities, valid perfected security interests exist in all of such Grantor's
Investment Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the Administrative Agent and
the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full and the Commitments shall have
terminated:
5.1 COVENANTS IN CREDIT AGREEMENT. In the case of each Guarantor,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
5.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
5.3 MAINTENANCE OF INSURANCE. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory, Equipment and Vehicles against loss by fire, explosion, theft and
such other casualties as may be reasonably satisfactory to the Administrative
Agent and (ii) insuring such Grantor, the Administrative Agent and the Lenders
against liability for personal injury and property damage relating to such
Inventory, Equipment and Vehicles, such policies to be in such form and amounts
and having such coverage as may be reasonably satisfactory to the Administrative
Agent and the Lenders.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the Administrative Agent of
written notice thereof, (ii) name the Administrative Agent as insured party or
loss payee, (iii) if reasonably requested by the Administrative Agent, include a
breach of warranty clause and (iv) be reasonably satisfactory in all other
respects to the Administrative Agent.
(c) The Borrower shall deliver to the Administrative Agent and the
Lenders a report of a reputable insurance broker with respect to such insurance
during the month of [May] in each calendar year and such supplemental reports
with respect thereto as the Administrative Agent may from time to time
reasonably request.
5.4 PAYMENT OF OBLIGATIONS. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no such
charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books
12
of such Grantor and such proceedings could not reasonably be expected to result
in the sale, forfeiture or loss of any material portion of the Collateral or any
interest therein.
5.5 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.3 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in reasonable
detail.
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created hereby.
5.6 CHANGES IN LOCATIONS, NAME, ETC. Such Grantor will not, except
upon [30] days' prior written notice to the Administrative Agent and delivery to
the Administrative Agent of (a) all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain the
validity, perfection and priority of the security interests provided for herein
and (b) if applicable, a written supplement to SCHEDULE 5 showing any additional
location at which Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a location
other than those listed on SCHEDULE 5;
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the Administrative Agent in
connection with this Agreement would become misleading.
5.7 NOTICES. Such Grantor will advise the Administrative Agent and
the Lenders promptly, in reasonable detail, of:
(a)any Lien (other than security interests created hereby or Liens
permitted under the Credit Agreement) on any of the Collateral which would
adversely affect the ability of the Administrative Agent to exercise any of its
remedies hereunder; and
(b)of the occurrence of any other event which could reasonably be
expected to have a material adverse effect on the aggregate value of the
Collateral or on the security interests created hereby.
13
5.8 PLEDGED SECURITIES. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders and deliver the same forthwith to the
Administrative Agent in the exact form received, duly indorsed by such Grantor
to the Administrative Agent, if required, together with an undated stock power
covering such certificate duly executed in blank by such Grantor and with, if
the Administrative Agent so requests, signature guaranteed, to be held by the
Administrative Agent, subject to the terms hereof, as additional collateral
security for the Obligations. Any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any Issuer shall be paid over
to the Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations, and in case any distribution of capital shall be
made on or in respect of the Pledged Securities or any property shall be
distributed upon or with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall, unless otherwise
subject to a perfected security interest in favor of the Administrative Agent,
be delivered to the Administrative Agent to be held by it hereunder as
additional collateral security for the Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Securities shall be
received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Lenders, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.
(b) Without the prior written consent of the Administrative Agent,
such Grantor will not (i) vote to enable, or take any other action to permit,
any Issuer to issue any stock or other equity securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii) sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Securities or Proceeds thereof (except
pursuant to a transaction expressly permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of, or any claim of
any Person with respect to, any of the Pledged Securities or Proceeds thereof,
or any interest therein, except for the security interests created by this
Agreement or (iv) enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Pledged Securities or Proceeds thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 5.8(a) with
respect to the Pledged Securities issued by it and (iii) the terms of Sections
6.3(c) and 6.7 shall apply to it, MUTATIS MUTANDIS, with respect to all actions
that may be required of it pursuant to Section 6.3(c) or 6.7 with respect to the
Pledged Securities issued by it.
5.9 RECEIVABLES. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii)
14
release, wholly or partially, any Person liable for the payment of any
Receivable, (iv) allow any credit or discount whatsoever on any Receivable or
(v) amend, supplement or modify any Receivable in any manner that could
adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it that questions or calls
into doubt the validity or enforceability of more than 5% of the aggregate
amount of the then outstanding Receivables.
5.10 INTELLECTUAL PROPERTY. (a) Such Grantor (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with the appropriate notice of registration
and all other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any ▇▇▇▇ which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for the ratable
benefit of the Lenders, shall obtain a perfected security interest in such ▇▇▇▇
pursuant to this Agreement, and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.
(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the Administrative Agent and the Lenders
immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent within five Business Days after the last day
of the fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and
15
deliver, and have recorded, any and all agreements, instruments, documents, and
papers as the Administrative Agent may request to evidence the Administrative
Agent's and the Lenders' security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 CERTAIN MATTERS RELATING TO RECEIVABLES. (a) The Administrative
Agent shall at any time after the occurrence and during the continuance of an
Event of Default have the right to make test verifications of the Receivables in
any manner and through any medium that it reasonably considers advisable, and
each Grantor shall furnish all such assistance and information as the
Administrative Agent may require in connection with such test verifications. At
any time and from time to time, upon the Administrative Agent's request and at
the expense of the relevant Grantor, such Grantor shall cause independent public
accountants or others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each Grantor to collect
such Grantor's Receivables, subject to the Administrative Agent's direction and
control, and the Administrative Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
If required by the Administrative Agent at any time after the occurrence and
during the continuance of an Event of Default, any payments of Receivables, when
collected by any Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form received, duly
indorsed by such Grantor to the Administrative Agent if required, in a
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Lenders only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Grantor. Each such deposit of
Proceeds of Receivables shall be accompanied by a report identifying in
reasonable detail the nature and source of the payments included in the deposit.
(c) At the Administrative Agent's request, each Grantor shall deliver
to the Administrative Agent all original and other documents evidencing, and
relating to, the agreements and
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transactions which gave rise to the Receivables, including, without limitation,
all original orders, invoices and shipping receipts.
6.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent's satisfaction the existence, amount and terms of any
Receivables.
(b) Upon the request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on the Receivables that the Receivables have been assigned to
the Administrative Agent for the ratable benefit of the Lenders and that
payments in respect thereof shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any Lender shall have any obligation or liability under
any Receivable (or any agreement giving rise thereto) by reason of or arising
out of this Agreement or the receipt by the Administrative Agent or any Lender
of any payment relating thereto, nor shall the Administrative Agent or any
Lender be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 PLEDGED STOCK. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent's intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be permitted
to receive all cash dividends paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities; PROVIDED, HOWEVER, that
no vote shall be cast or corporate right exercised or other action taken which,
in the Administrative Agent's reasonable judgment, would impair the Collateral
or which would be inconsistent with or result in any violation of any provision
of the Credit Agreement, this Agreement or any other Loan Document.
(b) If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends, payments or other Proceeds paid in
respect of the Pledged Securities and make application thereof to the
Obligations in such order as the Administrative Agent may determine, and (ii)
any or all of the Pledged Securities shall be registered in the name of the
Administrative Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (x) all voting, corporate and other rights pertaining to
such Pledged Securities at any meeting of shareholders of the relevant Issuer or
Issuers or otherwise
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and (y) any and all rights of conversion, exchange and subscription and any
other rights, privileges or options pertaining to such Pledged Securities as if
it were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Securities upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate structure of any Issuer, or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining
to such Pledged Securities, and in connection therewith, the right to deposit
and deliver any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the Administrative Agent.
6.4 PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT. In addition
to the rights of the Administrative Agent and the Lenders specified in Section
6.1 with respect to payments of Receivables, if an Event of Default shall occur
and be continuing, all Proceeds received by any Grantor consisting of cash,
checks and other near-cash items shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds of such
Grantor, and shall, forthwith upon receipt by such Grantor, be turned over to
the Administrative Agent in the exact form received by such Grantor (duly
indorsed by such Grantor to the Administrative Agent, if required). All
Proceeds received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control. All Proceeds while held by the Administrative Agent in a
Collateral Account (or by such Grantor in trust for the Administrative Agent and
the Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon
by the Borrower and the Administrative Agent, or, if an Event of Default shall
have occurred and be continuing, at any time at the Administrative Agent's
election, the Administrative Agent may apply all or any part of Proceeds held in
any Collateral Account in payment of the Obligations in such order as the
Administrative Agent may elect, and any part of such funds which the
Administrative Agent elects not so to apply and deems not required as collateral
security for the Obligations shall be paid over from time to time by the
Administrative Agent to the Borrower or to whomsoever may be lawfully entitled
to receive the same. Any balance of such Proceeds remaining after the
Obligations shall have been paid in full and the Commitments shall have
terminated shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.
6.6 CODE AND OTHER REMEDIES. If an Event of Default shall occur and
be continuing, the Administrative Agent, on behalf of the Lenders, may exercise,
in addition to all other rights and remedies granted to them in this Agreement
and in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the New
18
York UCC or any other applicable law. Without limiting the generality of the
foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do any
of the foregoing), in one or more parcels at public or private sale or sales, at
any exchange, broker's board or office of the Administrative Agent or any Lender
or elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Lender shall
have the right upon any such public sale or sales, and, to the extent permitted
by law, upon any such private sale or sales, to purchase the whole or any part
of the Collateral so sold, free of any right or equity of redemption in any
Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor's premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 6.6, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the Administrative Agent may elect, and only after such application and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including, without limitation, Section 9-504(1)(c) of the
New York UCC, need the Administrative Agent account for the surplus, if any, to
any Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any Lender arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.
6.7 REGISTRATION RIGHTS. (a) If the Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the opinion of the Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall designate
and to make available to its security holders, as soon as practicable, an
earnings
19
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
(b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the Administrative Agent and
the Lenders, that the Administrative Agent and the Lenders have no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section 6.7 shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants except
for a defense that no Event of Default has occurred under the Credit Agreement.
6.8 WAIVER; DEFICIENCY. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT, ETC. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be necessary or desirable to accomplish the purposes of
this Agreement, and, without limiting the generality of the foregoing, each
Grantor hereby gives the Administrative Agent the power and right, on behalf of
such Grantor, without notice to or assent by such Grantor, to do any or all of
the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the
20
payment of moneys due under any Receivable or with respect to any other
Collateral and file any claim or take any other action or proceeding in any
court of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys
due under any Receivable or with respect to any other Collateral whenever
payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent's and the Lenders' security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct;(2) ask for or demand, collect, and receive payment of
and receipt for, any and all moneys, claims and other amounts due or to
become due at any time in respect of or arising out of any Collateral;(3)
sign and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral;(4) commence and prosecute any suits, actions or proceedings at
law or in equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other right in respect
of any Collateral;(5) defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral;(6) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith,
give such discharges or releases as the Administrative Agent may deem
appropriate;(7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions,
and in such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's and the Lenders' security interests therein and to effect the
intent of this Agreement, all as fully and effectively as such Grantor
might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default shall
have occurred and be continuing.
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(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply with, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 7.1, together with interest
thereon at a rate per annum equal to the rate per annum at which interest would
then be payable on past due ABR Loans under the Credit Agreement, from the date
of payment by the Administrative Agent to the date reimbursed by the relevant
Grantor, shall be payable by such Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 DUTY OF ADMINISTRATIVE AGENT. The Administrative Agent's sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account. Neither the
Administrative Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Lenders hereunder are solely to
protect the Administrative Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon the Administrative Agent or any Lender to
exercise any such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
7.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the
Administrative Agent to file or record financing statements and other filing or
recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent reasonably determines appropriate to perfect the security interests of the
Administrative Agent under this Agreement. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
7.4 AUTHORITY OF ADMINISTRATIVE AGENT. Each Grantor acknowledges that
the rights and responsibilities of the Administrative Agent under this Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full
22
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with subsection 9.1 of the Credit Agreement.
8.2 NOTICES. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in subsection 9.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1.
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither the
Administrative Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 8.1), delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any delay in
exercising, on the part of the Administrative Agent or any Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Administrative Agent or such Lender would otherwise
have on any future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.
8.4 ENFORCEMENT EXPENSES; INDEMNIFICATION. (a) Each Guarantor agrees
to pay or reimburse each Lender and the Administrative Agent for all its costs
and expenses incurred in collecting against such Guarantor under the guarantee
contained in Section 2 or otherwise enforcing or preserving any rights under
this Agreement and the other Loan Documents to which such Guarantor is a party,
including, without limitation, the fees and disbursements of counsel [(including
the allocated fees and expenses of in-house counsel)] to each Lender and of
counsel to the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Collateral or in connection with any of the transactions contemplated by
this Agreement.
(c) Each Guarantor agrees to pay, and to save the Administrative Agent
and the Lenders harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to the extent the
Borrower would be required to do so pursuant to subsection 9.5 of the Credit
Agreement.
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(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Lenders and their successors and assigns; PROVIDED
that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent.
8.6 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts (including
by telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
8.7 SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.8 SECTION HEADINGS. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.9 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof not expressly
set forth or referred to herein or in the other Loan Documents.
8.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.11 SUBMISSION TO JURISDICTION; WAIVERS. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
24
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such
Grantor at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified pursuant
thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
8.12 ACKNOWLEDGEMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a
party;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to any Grantor arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative
Agent and Lenders, on the other hand, in connection herewith or therewith
is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Grantors and the Lenders.
8.13 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.14 ADDITIONAL GRANTORS. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to subsection 5.10 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the form
of Annex 1 hereto.
8.15 RELEASES. (a) At such time as the Loans and the other
Obligations shall have been paid in full, the Commitments have been terminated,
the Collateral shall be released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Grantor hereunder shall
terminate, all without delivery of any instrument or performance of any act by
any party, and all rights to the Collateral shall revert to the Grantors. At
the request and sole expense of any Grantor following any such termination, the
Administrative Agent shall deliver to such Grantor any Collateral held by the
Administrative Agent hereunder, and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
25
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all releases or other documents
reasonably necessary or desirable for the release of the Liens created hereby on
such Collateral. At the request and sole expense of the Borrower, a Subsidiary
Guarantor shall be released from its obligations hereunder in the event that all
the Capital Stock of such Subsidiary Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit Agreement[;
PROVIDED that the Borrower shall have delivered to the Administrative Agent, at
least ten Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Subsidiary Guarantor and the terms
of the sale or other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a certification
by the Borrower stating that such transaction is in compliance with the Credit
Agreement and the other Loan Documents].
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
[NAME OF GRANTOR]
By:
------------------------------
Title:
SCHEDULE 1
NOTICE ADDRESSES OF GUARANTORS
Big City Radio, Inc.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Facsimile number: ( )
SCHEDULE 2
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Issuer Class of Stock Stock Certificate No. No. of Shares
------ -------------- --------------------- -------------
Big City Radio, Inc. A 4,000,000
PLEDGED NOTES:
Issuer Payee Principal Amount
------ ----- ----------------
SCHEDULE 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
-------------------------------
Financing Statement to be filed in the following offices of:
Secretary of State of the State of New York
County Clerk of Westchester County
Secretary of State of the State of California
Patent and Trademark Filings
----------------------------
None.
Actions with Respect to Pledged Stock
-------------------------------------
----------
Other Actions
-------------
Administrative Agent to take possession, for the ratable benefit
of the Lenders, of all certificates of the Pledged Securities.
SCHEDULE 4
LOCATION OF JURISDICTION OF ORGANIZATION AND CHIEF EXECUTIVE OFFICE
GRANTOR LOCATION
-------- --------
SCHEDULE 5
LOCATION OF INVENTORY AND EQUIPMENT
GRANTOR LOCATIONS
------- ---------
SCHEDULE 6
COPYRIGHTS AND COPYRIGHT LICENSES
PATENTS AND PATENT LICENSES
TRADEMARKS AND TRADEMARK LICENSES
Annex 1 to
Amended and Restated Security Agreement
ASSUMPTION AGREEMENT, dated as of December __, 1997, made by _____________,
a ____________ corporation (the "ADDITIONAL GRANTOR"), in favor of THE CHASE
MANHATTAN BANK, as administrative agent (in such capacity, the "ADMINISTRATIVE
AGENT") for the banks and other financial institutions (the "LENDERS") parties
to the Credit Agreement referred to below. All capitalized terms not defined
herein shall have the meaning ascribed to them in such Credit Agreement.
W I T N E S E T H :
- - - - - - - - -
WHEREAS, ________________________ (the "BORROWER"), the Lenders and
the Administrative Agent have entered into a Credit Agreement, dated as of [May
30, 1996] (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT");
WHEREAS, in connection with the Credit Agreement, the Borrower and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Amended and Restated Security Agreement, dated as of December , 1997 (as
amended, supplemented or otherwise modified from time to time, the "GUARANTEE
AND COLLATERAL AGREEMENT") in favor of the Administrative Agent for the benefit
of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Amended and Restated Security Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Amended and Restated
Security Agreement;
NOW, THEREFORE, IT IS AGREED:
1. AMENDED AND RESTATED SECURITY AGREEMENT. By executing and
delivering this Assumption Agreement, the Additional Grantor, as provided in
Section 8.15 of the Amended and Restated Security Agreement, hereby becomes a
party to the Amended and Restated Security Agreement as a Grantor thereunder
with the same force and effect as if originally named therein as a Grantor and,
without limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Grantor thereunder. The information set forth
in Annex 1-A hereto is hereby added to the information set forth in Schedules
____________ to the Amended and Restated Security Agreement. The Additional
Grantor hereby represents and warrants that each of the representations and
warranties contained in Section 4 of the Amended and Restated Security Agreement
is true and correct on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
2
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
------------------------------------
Name:
Title: