EX-10.7
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
September 30, 1997
By and Among
ARB FINANCE - ONE, INC.; NORTHLAND BROADCASTING, LLC; READING RADIO, INC.;
CENTRAL MISSOURI BROADCASTING, INC; NORTHERN COLORADO RADIO, INC.; TRI-STATE
BROADCASTING INC.; CMB II, INC., ▇▇ ▇▇, INC., CENTRAL MICHIGAN NEWSPAPERS, INC.;
GRAPH ADS PRINTING, INC.; GLADWIN NEWSPAPERS, INC.; CADILLIC NEWSPAPERS, INC.;
MIDLAND BUYER'S GUIDE, INC.; CMN ASSOCIATIED PUBLICATIONS, INC.; CENTRAL
MICHIGAN DISTRIBUTION CO., INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.; ST.
▇▇▇▇▇ NEWSPAPERS, INC.; NCR II, INC.; TSB III, LLC; TSB IV, LLC; NCR III, LLC;
HURON NEWSPAPERS, LLC; and HURON P.S., LLC
("Borrowers")
and
AMRESCO FUNDING CORPORATION,
a Delaware corporation, as a Lender and as Agent
and
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
a Bermuda limited partnership, as a Lender
("Lenders")
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of September 30,
1997, and is entered into by and among the following parties:
ARB Finance - One, Inc. ("ARB Finance-One"); Northland Broadcasting, LLC
("Northland"); Reading Radio, Inc. ("Reading"); Central Missouri Broadcasting,
Inc. ("CMB"); Northern Colorado Radio, Inc. ("NCR"); Tri-State Broadcasting,
Inc. ("Tri-State"); CMB II, Inc. ("CMB II"); ▇▇ ▇▇, Inc. ("▇▇ ▇▇"); Central
Michigan Newspapers, Inc. ("CMN"); Graph Ads Printing, Inc. ("Graph Ads");
Gladwin Newspapers, Inc. ("Gladwin"); Cadillac Newspapers, Inc. ("Cadillac");
Midland Buyer's Guide, Inc. ("MBG"); CMN Associated Publications, Inc. ("CMN
Assoc."); Central Michigan Distribution Co., Inc. ("CMD Inc."); Central Michigan
Distribution Co., L.P. ("CMD L.P."); St. ▇▇▇▇▇ Newspapers, Inc. ("St. ▇▇▇▇▇");
NCR II, Inc. ("NCR II"); TSB III, LLC ("TSB III"); TSB IV, LLC ("TSB IV"); NCR
III, LLC ("NCR III"); Huron Newspapers, LLC ("Huron Newspapers"); and Huron
P.S., LLC ("HPS") (all of the entities identified in this section shall be
referred to individually sometimes as a "Borrower" and collectively as the
"Borrowers"), as borrowers; and
AMRESCO Funding Corporation, a Delaware corporation ("AMRESCO") and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P., a Bermuda limited partnership ("▇▇▇▇▇▇▇
Sachs") (hereinafter referred to individually as a "Lender" and collectively
referred to as "Lenders"), as lenders, and AMRESCO as Agent for Lenders.
RECITALS
(Capitalized terms used herein are defined below.)
A. On February 6, 1996, Lenders and Borrowers entered into the Original
Credit Agreement. Pursuant to the terms of the Original Credit Agreement,
Lenders have advanced the Original Loans to Borrowers in the aggregate principal
amount of Fifty-Six Million Dollars ($56,000,000). The Borrowers have requested
that Lenders (1) maintain the Original Loans in the aggregate principal amount
of Fifty-Six Million Dollars ($56,000,000) and (2) extend to the Borrowers the
Closing Date Advances in the aggregate principal amount of Fourteen Million
Dollars ($14,000,000), for a combined loan to the Borrowers in the aggregate
principal amount of Seventy Million Dollars ($70,000,000).
B. The Closing Date Advances are to be used and distributed in accordance
with the terms set forth in Section 2.2 herein and on Schedule 2.2 hereof
C. Subject to the terms and conditions set forth herein, each Lender has
agreed to maintain and/or advance to the Borrowers its Pro Rata Share of the
Loan provided that the Original Credit Agreement is amended, restated and
replaced in its entirety by this Agreement.
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NOW, THEREFORE, in consideration of the foregoing, and the covenants
contained herein, the parties hereto hereby agree that on the Closing Date the
Original Credit Agreement shall be amended and restated in its entirety as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions. The following terms, as used herein, shall
have the following meanings:
1. "Acquisition" or "Acquisitions" means singly or collectively any
acquisition of (a) FM or AM broadcast radio stations and related assets, or (b)
newspapers or other publications and related assets, each of the foregoing being
subject to the written consent of Lenders as more particularly provided in
Section 3.2 hereof.
2. "Acquisition Company" or "Acquisition Companies" means
individually or collectively the corporate or other legal entities created or
established by the Borrowers or Pledgors to make an Acquisition.
3. "Additional Advance" and "Additional Advances" shall have the
meaning set forth in Section 2.9 hereof.
4. "Additional Interest Rate" means the fixed rate of interest of
seven and one-half percent (7.5%) per annum.
5. "Advances" means collectively the Closing Date Advances and the
Additional Advances.
6. "Affiliate" or "Affiliates" means, individually or collectively,
all Borrowers, all Pledgors, ▇▇▇▇▇, BMC Inc., BMC L.P., ARB Two and any other
Person or entity that directly or indirectly controls, is controlled by or is
under common control with any such Borrower, Pledgor, or owner of a Borrower
and, for purposes of the foregoing "control" (including "controlled by" and
"under common control with") with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
7. "Affiliate Payments" means payments to BMC L.P. for management
fees not to exceed the amount of One Million Seven Hundred Thousand Dollars
($1,700,000) per Fiscal Year in the aggregate for all Borrowers, to be paid in
monthly installments not to exceed the amount of $141,667 per month in the
aggregate for all Borrowers; provided, however, that, after the occurrence of an
Event of Default not cured within the applicable Cure Period, if any,
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the monthly installments of the Affiliate Payment shall decrease to the amount
of $70,834 per month in the aggregate for all Borrowers.
8. "Affiliates' Inter-Company Accounts Receivable" means any and all
sums owed by any Borrower to any non-Borrower Affiliate, including but not
limited to such sums described more particularly on Schedule 5.15 hereof.
9. "Agent" means (unless the Borrowers have received written notice
to the contrary) AMRESCO, which shall act as Agent for Lenders in connection
with this Agreement and the other Credit Documents.
10. "Agent's Fee" means the payment by the Borrowers to Agent of a
quarterly fee in the amount of Twenty Thousand Dollars ($20,000) in accordance
with the terms of Section 2.7 hereof.
11. "Agreement" means this Amended and Restated Credit Agreement,
together with any concurrent or subsequent rider, amendment, modification,
schedule or exhibit to this Amended and Restated Credit Agreement.
12. "AMRESCO Note" means that certain Amended and Restated AMRESCO
Note of even date herewith in the principal amount of Fifteen Million Dollars
($15,000,000) executed by the Borrowers to the order of AMRESCO, together with
any amendments thereto or modifications thereof. The AMRESCO Note replaces the
Original AMRESCO Notes in their entirety.
13. "ARB Two" means ARB Finance-Two, Inc., a Virginia corporation.
14. "Asset or Assets" means any interest of a Borrower in any kind
of property or asset, whether real, personal, or mixed real and personal, and
whether tangible or intangible, including without limitation the FCC Licenses
and all Collateral described in Section 4.11 hereof.
15. "Asset Sale" means any sale, transfer or other disposition of
any Borrower's businesses or Assets (other than sales, transfers or other
dispositions for value in the ordinary course of business or sales, transfers or
other dispositions which in the aggregate do not exceed $25,000).
16. "Authorized Capital Expenditures" means (1) cash Capital
Expenditures not to exceed the aggregate amount for all Borrowers of Four
Hundred Thousand Dollars ($400,000) per Fiscal Year; (2) Capital Expenditures
paid from the Capital Expenditure Reserve Fund; and (3) expenditures for the
purchase of equipment under Capitalized Leases or purchase money loans not to
exceed an aggregate amount for all Borrowers of Two Hundred Thousand Dollars
($200,000) per Fiscal Year.
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17. "Authorized Payments" means (1) debt service to Lenders plus
reasonably related costs; (2) Permitted Third Party Debt Service; (3) Affiliate
Payments permitted pursuant to Section 6.8 hereof; (4) Authorized Capital
Expenditures; and (5) taxes due and payable by the Borrowers, such taxes not to
exceed the aggregate amount of $100,000 per Fiscal Year without prior notice to
and approval by Lenders, which approval shall not be unreasonably withheld.
18. "Bankruptcy Code" means Title 11 of the United States Code
entitled "The Bankruptcy Code," as amended or supplemented from time to time, or
any successor statute, and any and all rules and regulations issued or
promulgated in connection therewith.
19. "BMC Inc." means ▇▇▇▇▇ Media Company, Inc., a Virginia
corporation.
20. "BMC L.P." means ▇▇▇▇▇ Media Company, L.P., a Virginia limited
partnership.
21. "BNI" means ▇▇▇▇▇ Newspapers, Inc., a Virginia corporation.
22. "Borrower" or "Borrowers" means individually or collectively (A)
the Borrowers described in the introduction to this Agreement; (B) any other
Person that becomes a Subsidiary of any Borrower (including without limitation
any Acquisition Company); and (C) any Acquisition Company that executes the
ratification agreement described in Section 3.2(c) hereof.
23. "Borrowers' Annual Surplus Cash Flow" means the Borrowers'
aggregate Net Operating Income less regularly scheduled cash payments made on
Permitted Debt, less Authorized Capitalized Expenditures, less Affiliate
Payments, and less the increase over the prior Fiscal Year End's aggregate
accounts receivable balance, not over 120 days old.
24. "Borrowers' Certificate" means a certificate executed by a duly
authorized representative of each Borrower in the form set forth in Schedule
1.1(24) hereto.
25. "Borrowers' Leverage" means for all Borrowers collectively as of
the date of the most recent Financial Statement required to be delivered to
Agent pursuant to Section 5.3 hereof, the quotient of(1) the sum of the
following: (a) Obligations then outstanding plus Additional Advances to be made
in connection with a pending Acquisition, plus (b) Debt secured by Permitted
Liens, less (c) cash and cash equivalents (but not including amounts in the
Capital Expenditure Reserve Fund), divided by (2) the sum of the following: (a)
the preceding twelve (12) months' Net Operating Income from Assets existing on
the date of an Additional Advance, plus (b) the preceding twelve (12) months'
Net Operating Income from Assets to be acquired with such Additional Advance
subject to pro forma adjustments agreed to by Lenders, less (c) the preceding
twelve (12) months' Affiliate Payments.
26. "▇▇▇▇▇" means ▇▇▇▇ ▇. ▇▇▇▇▇.
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27. "Business Day" means any day other than a Saturday, a Sunday, or
a day on which commercial lenders in the City of New York, New York, are
authorized or required by law or executive order or decree to close.
28. "Call Option Price" means the premium required to pre-pay any or
all of the outstanding principal amounts due under the Loan as set forth in
Section 2.8 hereof and on Schedule 2.8 hereto.
29. "Capital Expenditure Reserve Fund" means a segregated reserve
fund in the initial amount of Eight Hundred Thousand Dollars ($800,000) to be
used for the following purposes only: (A) up to Three Hundred Thousand Dollars
($300,000) shall be used to provide improved or increased coverage of the radio
broadcast signals of Reading, Tri-State, NCR II, or NCR III, as appropriate; and
(B) up to Five Hundred Thousand Dollars ($500,000) shall be used for CMN's real
property Capital Expenditures.
30. "Capital Expenditures" means any current expenditure (including
but not limited to any such amounts financed by entering into a Capitalized
Lease) made by the Borrowers for the acquisition, construction, repair,
maintenance, or replacement of fixed or capital assets which should be
capitalized in conformity with GAAP.
31. "Capitalized Lease" means any lease of an Asset by any Borrower
as lessee which would, in conformity with GAAP, be required to be accounted for
as a capital lease on the balance sheet of such Borrower.
32. "Capitalized Lease Obligations" means the obligation of any
Borrower under any Capitalized Lease equal to or in excess of Thirty Thousand
Dollars ($30,000) and which would be shown as a liability on a balance sheet of
such Borrower prepared in accordance with GAAP.
32. "Closing" shall have the meaning set forth in Section 3.1
hereof.
33. "Closing Date" means September 30, 1997.
34. "Closing Date Advance" and "Closing Date Advances" shall have
the respective meanings set forth in Section 2.1 hereof.
35. "CMD Partnership Agreement" means that certain Limited
Partnership Agreement for CMD L.P., by and between CMD Inc., as the general
partner, and BNI as the limited partner.
36. "Collateral" shall have the meaning set forth in Section 4.11
hereof
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37. "Credit Document(s)" means each of the following documents,
instruments, and agreements individually or collectively, as the context
requires:
(A) this Agreement;
(B) AMRESCO Note;
(C) the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Note;
(D) the Guaranty;
(E) written pledges (and appropriate stock powers satisfactory
to Lenders) executed by Pledgors, Holding Companies or other Affiliates, as
appropriate, of 100% of the issued and outstanding capital stock of, or
membership or partnership interest in, (1) each Borrower (except that the stock
of CMB II, ▇▇ ▇▇, St. ▇▇▇▇▇ and NCR II and the membership interest in NCR III,
LLC shall be subject to prior liens as more particularly set forth in Schedule
6.2 hereto); (2) each managing member of a Borrower that is a limited liability
company; (3) each general partner of a Borrower that is a limited partnership;
and (4) all Acquisition Companies subject only to any prior pledges of such
stock or membership interest to the seller(s) of any Acquisition as permitted by
Lenders in their sole discretion, as such pledges may be amended, supplemented
or otherwise modified from time to time;
(F) written consents and acknowledgments from the Permitted
First Lien Holders regarding the Borrowers' and Pledgors' pledge of the stock,
membership interests and Assets of the Borrowers to Lenders, as appropriate or
necessary;
(G) notifications to and acknowledgments by the Custodian that
100% of the stock of CMB II, ▇▇ ▇▇, St. ▇▇▇▇▇ and NCR II has been pledged to
Lenders by Pledgors;
(H) that certain Amended and Restated Security Agreement of
even date herewith and executed among the Borrowers and Lenders, as such
agreement may be amended, supplemented or otherwise modified from time to time;
(I) that certain Security Agreement dated February 6, 1996,
executed by and among BNI and Lenders (together with appropriate notices
satisfactory to Lenders) granting to Lenders a security interest in 100% of
BNI's limited partnership interest in CMD L.P., as such agreement may be
amended, supplemented or otherwise modified from time to time;
(J) that certain BNI Acknowledgment and Ratification Agreement
of even date herewith executed by and among BNI and Lenders acknowledging the
continued effectiveness of the Security Agreement executed by BNI and Lenders on
February 6, 1998;
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(K) security agreements, mortgages and deeds of trust executed
by each Acquisition Company and covering 100% of the real and personal property
of each Acquisition Company, including without limitation any time brokerage
agreement, local marketing agreement and purchase agreement, subject to
Permitted Liens, if any, as such agreements, mortgages and deeds of trust may be
amended, supplemented or otherwise modified from time to time;
(L) those certain Ratification Agreements in the form attached
hereto as Exhibit A, to be executed by each Acquisition Company upon the
completion of the purchase of an Acquisition approved by Lenders, as each such
agreement may be amended, supplemented or otherwise modified from time to time;
(M) those notifications to appropriate depository institutions
notifying such institutions of the Borrowers' granting Lenders a security
interest in all deposit and operating accounts maintained by the Borrowers
(which notifications shall be held by Lenders until Lenders, in their
discretion, determine that such notifications should be delivered to such
institutions);
(N) those certain deeds of trust and mortgages affecting the
Borrowers' interest in the real property owned by the Borrowers and described on
Schedule 4.11(b) hereto, together with any amendments, supplements or
modifications to said deeds of trust and mortgages given to Lenders by some or
all of the Borrowers as deemed necessary by Lenders;
(0) those certain leasehold deeds of trust and leasehold
mortgages affecting the Borrowers' leasehold interest in real property leased by
the Borrowers and described on Schedule 4.13 hereto, together with any
amendments, supplements or modifications to said leasehold deeds of trust and
leasehold mortgages given to Lenders by some or all of the Borrowers as deemed
necessary by Lenders;
(P) all UCC financing statement filings, fixture filings and
continuation statements from each Borrower, Pledgor and Acquisition Company,
each in form and substance satisfactory to Agent, and any amendments thereto or
modifications thereof;
(Q) the Subordination Agreement, as such agreement may be
amended, supplemented or otherwise modified from time to time;
(R) written opinions of the Borrowers', Pledgors' and
Guarantor's legal counsel, including FCC legal counsel, satisfactory to Lenders;
(S) certificates of good standing for each Borrower and
Pledgor from the State of Virginia and each State in which the Borrowers and all
corporate or limited liability company Pledgors are conducting business, each
statement to be current within thirty (30) days of the Closing Date;
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(T) certificate of good standing for each Acquisition Company
from its state of incorporation or formation and from the state in which such
Acquisition Company is conducting business, each statement to be current within
thirty (30) days of the Acquisition Company becoming a Borrower;
(U) any other documents which Lenders or Lenders' legal
counsel reasonably request relating to the existence of the Borrowers, the
authority for and the validity of this Agreement and the other Credit Documents;
(V) certified copies of the Borrowers' and Pledgors' formation
documents (including without limitation Articles of Incorporation, Bylaws,
Operating Agreements, Certificates of Organization, and the like) and any
amendments thereto or modifications thereof and a satisfactory resolution
authorizing this transaction and a Certificate of Incumbency listing all current
officers of each Borrower and Pledgor, which documents shall be subject to the
approval of Lenders;
(W) evidence satisfactory to Lenders that the Borrowers have
obtained all necessary FCC Licenses, authorizations and approvals from
governmental authorities with respect to the operation of the Radio Stations, as
described in Schedule 4.9(b) hereto; and
(X) such other documents, instruments, and agreements
(including financing statements and fixture filings) as Lenders may reasonably
request in connection with the transactions contemplated hereunder or to perfect
or protect the liens and security interests granted to Lenders in connection
herewith.
38. "Cure Period" shall mean the thirty day period immediately
following the occurrence of an Event of Default and shall only apply to Events
of Default under subsections 7.1(a), (j) and (k).
39. "Custodian" means Old National Trust Company, Evansville,
Indiana.
40. "Debt" means the outstanding Obligations plus all of the
Borrowers consolidated Capitalized Lease Obligations and any indebtedness then
outstanding heretofore or hereafter created, issued, secured, guaranteed,
incurred or assumed by the Borrowers (directly or indirectly) for or in respect
of money borrowed or for or in respect of the deferred purchase price of
property or services purchased.
41. "Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
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42. "Default Rate" means the fixed rate of interest of twenty-four
percent (24%) per annum.
43. "Dollars" or "$" means lawful currency of the United States of
America.
44. "Duluth Radio Stations" means the following broadcast radio
stations owned by Northland and ▇▇ ▇▇:
A. KKCB-FM, licensed to Duluth, Minnesota;
B. WEBC-AM, licensed to Duluth, Minnesota; and
C. KLDJ-FM, licensed to Duluth, Minnesota.
45. "Duluth Sale Agreement" means those certain asset purchase
agreements or stock purchase agreements which may be entered into by and among
Northland and ▇▇ ▇▇, as sellers, and a future buyer for the sale of the Duluth
Radio Stations and the assets used in connection with the ownership and
operation thereof.
46. "Duluth Sale Proceeds" means the Net Cash Sale Proceeds from the
sale of the Duluth Radio Stations pursuant to the Duluth Sale Agreement.
47. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and all references to sections thereof shall include such
sections and any predecessor provisions thereto, including any rules or
regulations issued in connection therewith.
48. "ERISA Affiliate" means each trade or business (whether or not
incorporated) that, together with any Borrower would be treated as a single
employer under Section 400(b)(l) of ERISA.
49. "Event(s) of Default" shall have the meanings set forth in
Section 7.1 hereof.
50. "Expense Deposit" means the payment by the Borrowers of the
amount of One Hundred Twenty-Five Thousand Dollars ($125,000) to be paid to
Lenders on the Closing Date from proceeds of the Loan and to be applied first to
Pre-Closing Lender Expenses and then to Post-Closing Lender Expenses or Agent's
Fees.
51. "FCC" means the Federal Communications Commission or any
governmental authority succeeding to any of its functions.
52. "FCC Licenses" means all commercial broadcast station licenses,
permits and other certificates required by (A) the FCC, (B) the Communications
Act of 1934, as amended, (C) 47 CFR Part 73, or (D) any other governmental
entity in connection with the
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ownership and operation of each of the Radio Stations and granted or assigned to
the Borrowers by the FCC or any other public or governmental agency or
regulatory body for the operation of said Radio Stations, including without
limitation those FCC Licenses described in Schedule 4.9(b) hereto.
53. "Final Order" means an order, action or decision of the FCC (or
subsequent court order or judgment) that (A) has not been reversed, stayed,
enjoined, modified or amended and as to which the time for appeal, petition for
certiorari, to seek reargument, rehearing, administrative reconsideration or
review has expired; and (B) as to which no appeal, reargument, petition for
certiorari, rehearing, petition for reconsideration or application for review is
pending; or (C) as to which any right to appeal, reargue, petition for
certiorari, rehearing, reconsideration or review has been sought, the order or
judgment of the court or FCC has been (1) affirmed by the highest court (or
administrative entity or body) to which the order was appealed or from which the
argument, rehearing, reconsideration or review was sought, or (2) certiorari has
been denied, and (3) the time to take any further appeal or to seek certiorari
or further reargument, rehearing, reconsideration or review has expired.
54. "Financial Statement(s)" means, with respect to any accounting
period of any Person, statements of income and statements of changes in
financial position of such Person for such period, and balance sheets of such
Person as of the end of such period, setting forth in each case in comparative
form figures for the corresponding period in the preceding Fiscal Year and to
the budget for the corresponding period, or, if such period is a full Fiscal
Year, corresponding figures from the preceding annual audit, all prepared in
reasonable detail and in accordance with GAAP. "Financial Statement(s)" shall
include the notes and schedules thereto.
55. "Fiscal Year" means, for each Borrower, the time period from and
including March 1 through the last day of the following February.
56. "Fiscal Year End" means, for each Borrower, the last day of
February.
57. "Funding Borrower" shall have the meaning set forth in Section
2.13(b) hereof
58. "GAAP" means generally accepted accounting principles in the
United States of America, consistently applied, which are in effect as of the
date of their application.
59. "▇▇▇▇▇▇▇ ▇▇▇▇▇ Note" means that certain Amended and Restated
▇▇▇▇▇▇▇ Sachs Note of even date herewith in the principal amount of Fifty-Five
Million Dollars ($55,000,000) executed by the Borrowers to the order of ▇▇▇▇▇▇▇
▇▇▇▇▇, together with any amendments thereto or modifications thereof. The
▇▇▇▇▇▇▇ Sachs Note amends and replaces the Original ▇▇▇▇▇▇▇ ▇▇▇▇▇ Notes in their
entirety.
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60. "Guarantor" means ▇▇▇▇ ▇. ▇▇▇▇▇.
61. "Guaranty" means that certain Amended and Restated Guaranty
executed by and among the Guarantor and Lenders of even date herewith. The
Guaranty amends and restates any and all previous guaranties given by ▇▇▇▇▇ to
Lenders.
62. "Holding Companies" means collectively ▇▇▇▇▇ Radio, Inc.; CMN
Holdings, Inc.; CMN; Tri-State Holdings, Inc.; Northland Holdings, Inc.; and
Huron Holdings, Inc.
63. "HPS Assets" means collectively Huron Postal Service, Inc.'s
distribution services and related services for North Eastern Printers, Inc., and
other clients and customers, together with all of the assets used in connection
with the ownership and operation thereof, and the assets of Northeastern
Printers, Inc., including the North Eastern Shopper's Guides, and related
publishing, printing and other business activities and all assets used in
connection with the ownership and operation thereof
64. "HPS Purchase Agreement" means an asset purchase agreement to be
entered into among HPS and Huron Newspapers, as buyers, and Huron Postal
Service, Inc., ▇▇▇▇▇▇▇ ▇▇▇, ▇. ▇. ▇▇▇▇, and Northeastern Printers, Inc., as
sellers, for the purchase of the HPS Assets.
65. "Initial Interest Rate" means the fixed rate of interest of ten
percent (10%) per annum.
66. "Insolvency Proceeding" means any proceeding commenced by or
against any Person, under any provision of the Bankruptcy Code, or under any
other bankruptcy or insolvency law, including, but not limited to, assignments
for the benefit of creditors, formal or informal moratoriums, compositions, or
extensions with some or all creditors.
67. "Internal Revenue Code" means the Internal Revenue Code of 1986,
as supplemented and amended from time to time, or any successor statute, and any
and all regulations and rules promulgated thereunder.
68. "KTRR" means broadcast radio station KTRR-FM, licensed to
Windsor, Colorado.
69. "KTRR Purchase Agreement" means that certain Asset Purchase
Agreement to be executed by NCR II or NCR III, as buyer, and Onyx Broadcasting,
Inc., as seller, for the purchase and sale of KTRR and the assets used in
connection with the ownership and operation thereof
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70. "Lender" or "Lenders" means individually or collectively,
AMRESCO and ▇▇▇▇▇▇▇ Sachs and any other Person which becomes a party hereto by
assignment from ▇▇▇▇▇▇▇ ▇▇▇▇▇ or AMRESCO or another Lender in accordance with
Section 9.5(a) hereof.
71. "Lending Office" means Agent's office located at the address set
forth in Section 9.1, or such other office of Lenders as they may hereafter
designate as their Lending Office by notice to the Borrowers.
72. "Licenses" means all FCC Licenses.
73. "Lien" means any mortgage, deed of trust, pledge, security
interest, assignment, conditional sale or other title retention agreement, lien,
charge or encumbrance of any kind.
74. "Loan" means, collectively, (A) the Original Loans maintained by
the Borrowers as a portion of the Loan hereunder pursuant to Section 2.1(a),
(B) the Closing Date Advances, and (C) any Additional Advances.
75. "Loan Fee" means the payment by the Borrowers to Lenders in the
principal amount of Four Hundred Thousand Dollars ($400,000), to be paid to each
Lender in accordance with its respective Pro Rata Share from the proceeds of the
Loan on the Closing Date in accordance with Section 2.2 hereof.
76. "Material Adverse Effect" means any material adverse change in
(A) the financial condition of the Borrowers taken as a whole, (B) the ability
of the Borrowers taken as a whole to perform the Obligations under the Credit
Documents (including, without limitation, repayment of the Obligations as they
come due) or (C) other than as the result of some action or inaction by Lenders,
the validity or enforceability of this Agreement, the other Credit Documents, or
the rights or remedies of Lenders hereunder and thereunder.
77. "Maturity Date" means September 30, 1999, or such earlier date
to which the maturity of the Loan may be accelerated as provided herein.
78. "Maximum Additional Advances Amount" means the lesser of (A) the
aggregate amount of the Duluth Sale Proceeds and the Missouri Sale Proceeds
received by Lenders; or (B) Twelve Million Dollars ($12,000,000), and shall be
reduced by the amount of any Additional Advances made from time to time after
the Closing Date.
79. "Missouri Radio Stations" means the following broadcast radio
stations owned by CMB and CMB II:
A. KTXY-FM, licensed to Jefferson City, Missouri;
B. KLIK-AM, licensed to Jefferson City, Missouri; and
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C. KATI-FM licensed to California, Missouri.
80. "Missouri Sale Agreement" means those certain asset purchase
agreements or stock purchase agreements which may be entered into by and between
CMB and CMB II, as sellers, and a future buyer for the sale of the Missouri
Radio Stations and the assets used in connection with the ownership and
operation thereof.
81. "Missouri Sale Proceeds" means the Net Cash Sale Proceeds from
the sale of the Missouri Radio Stations pursuant to the Missouri Sale Agreement.
82. "NCR Note Payments" means the current obligations owed by NCR to
Guarantor evidenced by a note or open book account.
83. "Net Cash Sale Proceeds" means all proceeds of sale after
payment of broker's fees, legal fees, real and personal property taxes, income
taxes related to such sale in an amount approved by Lenders in their sole
discretion, third-party indebtedness, including that indebtedness secured by
Permitted Liens, and other customary closing costs.
84. "Net Operating Income" means all cash revenues less agency
commissions or discounts and all cash operating expenses (including without
limitation personal and real property taxes but excluding Affiliate Payments).
85. "Net Working Capital" means all cash and cash equivalents
(excluding amounts in the Capital Expenditure Reserve Fund), plus accounts
receivable not more than 120 days old, less current liabilities (excluding the
current portion of Permitted Third Party Debt Service and the Obligations).
86. "Newspaper Operators" means, collectively, CMN, Graph Ads,
Gladwin, Cadillac, MBG, CMN Assoc., CMD Inc., CMD L.P., St. ▇▇▇▇▇, Huron
Newspapers, HPS and any other Borrower that operates or owns or controls any
Newspaper from time to time.
87. "Newspapers" means, collectively, The Morning Sun; The Mt.
Pleasant Buyer's Guide; The Clare Buyers Guide; The ▇▇▇▇ Reminder; The Gladwin
Buyer's Guide; The ▇▇▇▇▇▇▇▇ County Herald; The Cadillac Buyers Guide; The
Midland Buyers Guide; The ▇▇▇▇▇▇ City Reminder; The Edmore Advertiser; The
Hemlock Shoppers Guide; The St. ▇▇▇▇▇ Reminder; The North Eastern Shopper's
Guides; and any other newspaper, periodical, tabloid, magazine or other
publication owned or operated by any Borrower from time to time.
88. "Notes" means collectively the AMRESCO Note and the ▇▇▇▇▇▇▇
Sachs Note, and any promissory notes issued in replacement thereof or to any new
Lender pursuant to Section 9.5(a) hereof, together with any amendments thereto
or modifications thereof.
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89. "Obligations" means any and all indebtedness, liabilities, and
obligations of the Borrowers or any of them owing to Lenders and to their
successors and assigns, arising out of or in connection with this Agreement or
any other Credit Document, previously, now, or hereafter incurred, and howsoever
evidenced, whether direct or indirect, absolute or contingent, joint or several,
liquidated or unliquidated, voluntary or involuntary, due or not due, legal or
equitable, whether incurred before, during, or after any Insolvency Proceeding,
and whether recovery thereof is or becomes otherwise unenforceable or
unallowable as claims in any Insolvency Proceeding, together with all interest
thereupon (including all interest accruing during the pendency of an Insolvency
Proceeding), including without limitation all principal and interest owing under
the AMRESCO Note, the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Note, all Post-Closing Lender Expenses, all
Pre-Closing Lender Expenses, and any other fees and expenses due hereunder, and
all other indebtedness evidenced by the Credit Documents.
90. "Operating Lease" means any lease of an Asset by any Borrower as
lessee which would be considered an operating lease, in conformity with GAAP,
and shown on Schedule 4.26 hereto.
91. "Original AMRESCO Notes" means collectively the promissory
notes in the aggregate principal amount of Eight Million Dollars ($8,000,000)
executed by certain Borrowers in favor of AMRESCO pursuant to the terms of the
Original Credit Agreement, as amended to the date hereof.
92. "Original Credit Agreement" means collectively that (A) certain
Credit Agreement dated as of February 6, 1996; (B) that certain First Amendment
to Credit Agreement dated as of September 30, 1996; and (C) that certain Second
Amendment to Credit Agreement dated as of February 28, 1997, each entered into
by and among the Borrowers described therein and Lenders and providing for the
making of the Original Loans.
93. "Original ▇▇▇▇▇▇▇ Sachs Notes" means collectively the promissory
notes in the aggregate principal amount of Forty-Eight Million Dollars
($48,000,000) executed by certain Borrowers in favor of ▇▇▇▇▇▇▇ ▇▇▇▇▇ pursuant
to the terms of the Original Credit Agreement, as amended to the date hereof.
94. "Original Loans" means those certain loans in the aggregate
principal amount of Fifty-Six Million Dollars ($56,000,000) and evidenced by the
Original AMRESCO Notes and the Original ▇▇▇▇▇▇▇ Sachs Notes.
95. "Original Loan Amount" shall have the meaning set forth in
Section 2.1(a).
96. "PBGC" means the Pension Benefit Guaranty Corporation.
97. "Permitted Debt" means the Debt described on Schedule 6.1
hereto.
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98. "Permitted First Lien Holders" means Town and Country
Communications, Inc.; Owensboro National Bank; QB Broadcasting, Inc.; Jefferson
Bank of Missouri; ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; Onyx Broadcasting, Inc.; ▇▇▇▇▇▇▇ Field;
▇▇▇▇▇▇▇ ▇. ▇▇▇▇; and any other holders of Permitted Liens with first lien
positions as set forth on Schedule 6.2 hereto (but only to the extent of the
amounts set forth therein).
99. "Permitted Liens" means (A) Liens listed on Schedule 6.2; (B)
purchase money Liens, subject to the limitations of Section 6.7 hereof; and (C)
Liens for current taxes, assessments or other governmental charges which are not
delinquent or remain payable without any penalty.
100. "Permitted Third Party Debt Service" means, and is limited to,
the payments described on Schedule 1.1(100) hereto.
101. "Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, lenders, trust companies, land
trusts, business trusts, or other organizations, irrespective of whether they
are legal entities, and governments and agencies and political subdivisions
thereof
102. "Personal Property Collateral" shall have the meaning set forth
in Section 4.11.
103. "Pledgors" means collectively the Holding Companies; ▇▇▇▇▇; BNI
(with respect to its limited partnership interest in CMD L.P. only); Tri-State
Holdings, LLC; Tri-State Management, Inc.; NCH II, LLC; NCR II; Northland
Holdings, LLC; Northland Management, Inc.; Huron Management, Inc.; Huron
Holdings, LLC; and any other Person required to enter into a pledge agreement
pursuant to Section 3.2(d) hereof.
104. "Post-Closing Lender Expenses" means all reasonable costs or
expenses paid or advanced by Lenders which are required to be paid by the
Borrowers under this Agreement and all other documents executed in connection
herewith on or after the Closing Date, including without limitation all costs or
expenses paid or advanced by Lenders in connection with the purchase of any
Acquisitions and any Advances in connection therewith, including without
limitation the negotiation and drafting of any commitment letters to sellers of
Acquisitions for which the Borrowers request Advances from Lenders, together
with all recording fees, taxes, title and lien search charges and any other fees
and costs incurred in connection with such Acquisitions or the funding of any
Advances pursuant to Section 2.9 and Section 3.3; all taxes and insurance
premiums of every nature and kind of the Borrowers paid by Lenders; all amounts
advanced by Lenders to cure defaults under Permitted Debt; reasonable and
customary appraisal, filing, recording, documentation, publication and search
fees paid or actually incurred by Lenders to correct any default or enforce any
provision of this Agreement and all other Credit Documents executed in
connection herewith on or after the Closing Date;
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reasonable costs and expenses of suits or arbitration proceedings incurred by
Lenders in enforcing or defending this Agreement, or any portion hereof, and
reasonable attorneys' fees and expenses incurred by Lenders in amending,
terminating, enforcing, defending or taking other action concerning this
Agreement or any other Credit Documents or any other documents executed in
connection herewith, whether or not suit is brought, such attorneys' fees to
include the reasonable estimate of the allocated costs and expense of Lenders'
in-house legal counsel and professional staff, and including reimbursement of
Lenders' reasonable travel expenses incurred in connection with Lenders'
semi-annual on-site inspections to review the Collateral and observe the
operation of the Radio Stations or the Newspapers; provided, however, that
reimbursement of Lenders' semi-annual on-site inspection expenses shall not
exceed Forty Thousand Dollars ($40,000) in any twelve month period. All
Post-Closing Lender Expenses paid or incurred by Lenders are payable upon
demand, and if not reimbursed within thirty (30) days after demand, shall become
a part of the Obligations and shall immediately thereafter bear interest,
together with all other amounts to be paid by the Borrowers pursuant hereto, at
the appropriate interest rate in accordance with provisions of Section 2.3
hereof.
105. "Pre-Closing Lender Expenses" means all reasonable costs or
expenses paid or advanced by Lenders in connection with drafting, negotiating
and structuring this Agreement and the other Credit Documents, including without
limitation attorneys' fees, travel expenses, credit review expenses, appraisals,
filing, recording, documentation, publication and search fees paid or incurred
by Lenders in connection with Lenders' review of the Assets of the Borrowers.
Lenders acknowledge receipt of the Expense Deposit from the Borrowers, which
Expense Deposit shall be used first to pay Pre-Closing Lender Expenses and then
applied to Post-Closing Lender Expenses. In the event the Pre-Closing Expenses
are in excess of the Expense Deposit, the Borrowers shall pay on the Closing
Date or within fifteen (15) days after receipt from Agent of an invoice or
request for payment all additional reasonable costs and expenses, including
without limitation reasonable attorneys' fees, incurred by Lenders in connection
with the negotiation and documentation of the Loan, together with all recording
fees, taxes, title search charges and any other fees incurred in connection with
the Closing.
106. "Pro Rata Share" means, with respect to the Loan, 78.57143%
for ▇▇▇▇▇▇▇ ▇▇▇▇▇ and 21.42857% for AMRESCO on the Closing Date; provided,
however, that the foregoing amounts shall be adjusted (A) in accordance with any
Advances that are not advanced hereunder in accordance with Lenders' Pro Rata
Shares at the time of the relevant Advance solely for purposes of determining
any Lender's Pro Rata Share for the purposes of voting by the Lenders and
allocating payments made by the Borrowers to the Lenders, but such adjustment
shall not affect any Lender's Pro Rata Share for purposes of determining such
Lender's obligation to make any Additional Advances hereunder, and (B) to
reflect that percentage of the Loan amount assigned to any Lender pursuant to
Section 9.5 hereof in each case as adjusted in the event of any assignment.
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107. "Radio Operators" means, collectively, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇,
▇▇▇, ▇▇▇-▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇ ▇▇, NCR II, TSB III, TSB IV and any other Borrower
that operates, owns or controls any Radio Station from time to time.
108. "Radio Stations" means the broadcast radio stations described
on Schedule 4.9(b) hereof and any other broadcast radio station owned or
operated by any Borrower from time to time, together with all of the Assets of
the Borrowers used in the ownership and operation thereof and Licenses with
respect thereto.
109. "Real Property Collateral" shall have the meaning set forth in
Section 4.11(b).
110. "Releasing Lenders" means Persons who have liens against any
Acquisition, which lien is required by Lenders to be released upon the closing
of the purchase of such Acquisition.
111. "Subordination Agreement" means that certain Amended and
Restated Subordination Agreement of even date herewith executed by and among the
Borrowers, Pledgors, Guarantor, BMC L.P., BMC Inc., ARB Two, and other Persons
required to execute any subordination agreement in connection with this
Agreement, as such agreement may be amended, supplemented or otherwise modified
from time to time.
112. "Subsidiary" means, with respect to any Borrower, a
corporation, partnership, limited liability company, association, joint venture
or other business entity (whether now existing or hereafter organized or
acquired) of which more than 50% of the total voting power of shares of stock or
other ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Persons or Person (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by such
Borrower or one or more of the other Subsidiaries of such Borrower or a
combination thereof.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.
SECTION 1.3 Computation of Time Periods. In this Agreement, with
respect to the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each mean "to but excluding." Periods of days referred to in this
Agreement shall be counted in calendar days unless otherwise stated.
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SECTION 1.4 Construction. Unless the context of this Agreement
clearly requires otherwise, references to the plural include the singular and to
the singular include the plural, references to any gender include any other
gender, the part includes the whole, the term "including" is not limiting, and
the term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or." References in this Agreement to
"determination" by Agent include reasonable estimates by Agent (in the case of
quantitative determinations), and reasonable beliefs by Agent (in the case of
qualitative determinations). The words "hereof," "herein," "hereby,"
"hereunder," and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement. Article, section,
subsection, clause, exhibit and schedule references are to this Agreement,
unless otherwise specified. Any reference in this Agreement or any of the other
Credit Documents to this Agreement includes any and all permitted alterations,
amendments, changes, extensions, modifications, renewals, or supplements thereto
or thereof, as applicable.
SECTION 1.5 Schedules. All of the schedules attached hereto shall be
deemed incorporated herein by reference.
SECTION 1.6 No Presumption Against Any Party. Neither this
Agreement, any of the other Credit Documents, any other document, agreement, or
instrument entered into in connection herewith, nor any uncertainty or ambiguity
herein or therein shall be construed or resolved using any presumption against
any party hereto, whether under any rule of construction or otherwise. On the
contrary, this Agreement, the other Credit Documents, and the other documents,
instruments, and agreements entered into in connection herewith have been
reviewed by each of the parties and their legal counsel and shall be construed
and interpreted according to the ordinary meanings of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
SECTION 1.7 Independence of Provisions. All agreements and covenants
hereunder, under the other Credit Documents, and the other documents,
instruments, and agreements entered into in connection herewith shall be given
independent effect such that if a particular action or condition is prohibited
by the terms of any such agreement or covenant, the fact that such action or
condition would be permitted within the limitations of another agreement or
covenant shall not be construed as allowing such action to be taken or condition
to exist.
ARTICLE II
THE CREDIT
SECTION 2.1 The Loan. Subject to the terms and conditions hereof and
as more particularly set forth in Section 3.1 and Section 3.3 hereof, each
Lender hereby severally agrees to maintain the Original Loans and to make the
Closing Date Advances as follows:
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(a) Original Loans. Each of the Borrowers acknowledges and confirms
that (1) Lenders collectively hold the Original Loans in the aggregate
principal amount of Fifty-Six Million Dollars ($56,000,000) outstanding as
of the Closing Date and (2) each Lender holds the Original Loans in the
respective principal amounts (together with all interest due and accrued
thereon) (with respect to each Lender, the "Original Loan Amount")
outstanding immediately prior to the Closing Date set forth opposite its
name on Schedule 2.1(a) hereto. Each of the Borrowers hereby represents,
warrants, agrees, covenants and (1) reaffirms that it has no (and it
permanently and irrevocably waives and releases Agent and Lenders from
any, to the extent arising on or prior to the Closing Date) defense, set
off, claim or counterclaim against Agent or any Lender in regard to its
Obligations in respect of such Original Loans and (2) reaffirms its
obligation to pay such Original Loans in accordance with the terms and
conditions of this Agreement and the other Credit Documents. Based on the
foregoing, each Borrower and each Lender agree that the Original Loans,
and any amounts owed under the Original Credit Documents (whether or not
presently due and payable, and including all interest accrued to the
Closing Date, which interest shall be payable on the Closing Date) by the
Borrowers to Lenders thereunder or in respect thereof, shall, as of the
Closing Date, be converted to, maintained and continued as, and owed by
the Borrowers, jointly and severally, under or in respect of, the Loan
hereunder.
(b) Closing Date Advances. Each Lender severally agrees to lend to
the Borrowers on the Closing Date an amount (each such loaned amount being
the "Closing Date Advance" of such Lender and collectively, the "Closing
Date Advances") equal to the difference between (x) such Lender's Pro Rata
Share of Seventy Million Dollars ($70,000,000), minus (y) the principal
amount of the Original Loans held by such Lender after giving effect to
clause (a) of this Section 2.1, to be used for the purposes identified in
Section 2.2 hereof. Except as provided in Section 2.9 hereof, the Loan or
any portion of the Loan (including the Closing Date Advances), to the
extent subsequently repaid or prepaid, may not be reborrowed.
SECTION 2.2 Allocation of Loan/Purpose and Disbursement of Proceeds
of Closing Date Advances.
(a) Allocation of Loan. The Loan shall be allocated among the
Original Loans and the Closing Date Advances in the amounts set forth below:
(1) $8,450,416.66 shall be used to maintain AMRESCO's
Original Loan Amount;
(2) $51,456,916.68 shall be used to maintain ▇▇▇▇▇▇▇ Sach's
Original Loan Amount;
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(3) $400,000 shall be paid to Agent on behalf of Lenders to
pay the Loan Fee;
(4) $125,000 shall be paid to Agent to pay the Expense
Deposit;
(5) $20,000 shall be paid to Agent to pay the Agent's Fee
due and payable on September 30, 1997;
(6) $800,000 shall be paid to the Borrowers to be deposited
to the Capital Expenditure Reserve Fund;
(7) $3,000,000 shall be paid to the Borrowers to be
distributed to Guarantor;
(8) $1,000,000 shall be paid to the Borrowers to be used for
the purchase of the HPS Assets;
(9) $600,000 shall be paid to the Borrowers to be used for
the purchase of KTRR, including reimbursement of the
good faith deposit for the purchase of KTRR; and
(10) the remainder of the Closing Date Advances shall be paid
to the Borrowers to be used for the payment of accrued
but unpaid fees under the Original Credit Agreement and
for the Borrowers' working capital.
(b) Purpose and Uses of Closing Date Advances. The proceeds of the
Closing Date Advances shall be disbursed in accordance with the disbursement
instructions set forth in Schedule 2.2 hereto and shall be used solely for the
purposes described in Section 2.2(a) hereof.
SECTION 2.3 Interest Rates. The unpaid principal balance of the Loan
shall bear interest at the applicable rate per annum provided below:
(a) Initial Rate and Additional Rate. From and after the Closing
Date, interest shall accrue on the outstanding principal balance of the Loan at
the Initial Interest Rate plus the Additional Interest Rate.
(b) Default Rate. Upon the occurrence and during the continuance of
an Event of Default, interest shall accrue on the then outstanding principal
balance of the Loan at the Default Rate. In the event the Event of Default is
cured within the Cure Period, if applicable, the interest rate on the Loan shall
revert to the interest rates effective as of the date the cure is effectuated.
Interest which has accrued on the Obligations at the Default Rate shall be due
and
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payable with the next required payment hereunder or on demand as it accrues if
after the Maturity Date.
(c) Computation of Interest. All computations of interest shall be
calculated on the basis of a year of three hundred sixty (360) days for the
actual days elapsed.
SECTION 2.4 Repayment of the Loan. The Borrowers shall repay the
Loan as follows:
(a) Interest Payments. The Borrowers shall pay to Agent for the
benefit of Lenders monthly interest payments in arrears on the aggregate
outstanding principal balance of the Notes, to include all interest then due and
accrued at the Initial Interest Rate, on the first day of each month commencing
November 1, 1997, and continuing to the Maturity Date. All interest accrued and
unpaid at the Additional Interest Rate shall be due and payable in full on the
earlier of the Maturity Date or the date of any prepayment of the Obligations.
All interest due at the Default Rate shall be paid in accordance with Section
2.3(b) hereof.
(b) Payment of Principal and Remaining Obligations. Except as
otherwise set forth herein, all principal due and outstanding under the Notes
and all other Obligations shall be due and payable in full on the Maturity Date.
(c) Application of Payments by Agent. All payments of principal and
interest and all payments of the Call Option Price (set forth in Section 2.8
below) received by Agent shall be apportioned between the Notes in amounts equal
to each Lender's respective Pro Rata Share.
SECTION 2.5 Statements of Obligations. The Loan and the Borrowers'
obligation to repay the same shall be evidenced by the AMRESCO Note, the ▇▇▇▇▇▇▇
Sachs Note and this Agreement and all payments of principal or interest with
respect to the Loan shall be evidenced by notations made by Agent on such
Agent's books and records showing the date and amount of the applicable Advance
and each payment of principal or interest. Advances made to the Borrowers by
AMRESCO shall be evidenced by the AMRESCO Note. Advances made to the Borrowers
by ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be evidenced by the ▇▇▇▇▇▇▇ Sachs Note.
SECTION 2.6 Loan Fee. The Loan Fee shall be paid by the Borrowers to
Lenders from the proceeds of the Loan on the Closing Date.
SECTION 2.7 Agent's Fee. The Borrowers shall pay the Agent's Fee to
Agent commencing on the Closing Date, and continuing on the 30th day of the last
month of each calendar quarter thereafter through the Maturity Date (i.e.,
December 30, March 30, June 30, and September 30).
SECTION 2.8 Prepayments. In the event the Borrowers desire to repay
any or all of the then outstanding principal balance due under the Notes prior
to the Maturity
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Date, which sums are not required to then be paid pursuant to Section 5.18,
Section 5. 1 9, or Section 5.20, hereof, the Borrowers may do so by paying to
Agent on behalf of Lenders the Call Option Price (expressed as a percentage of
principal prepaid) set forth on Schedule 2.8 hereto, together with 100% of all
interest accrued and unpaid on the Obligations at the Additional Interest Rate;
provided, however, that no Call Option Price shall be due and payable as a
result of a prepayment from the Missouri Sale Proceeds or the Duluth Sale
Proceeds, unless such funds are not reborrowed as Additional Advances prior to
the Maturity Date or repayment in full of the Loan, in which event the
applicable Call Option Price shall be determined as of the month in which such
prepayment occurred and shall be due and payable on the date of such prepayment.
All prepayments under this Section of amounts less than the full amount due
under the Notes shall be applied first to Post-Closing Lender Expenses, if any,
then to interest accrued at the Additional Interest Rate, then to a premium in
an amount equal to the excess of the applicable Call Option Price over the
amount of principal to be paid, then to principal, then to interest accrued at
the Initial Interest Rate.
SECTION 2.9 Re-borrowing. At the Borrowers' request, and provided
that all conditions set forth in Section 3.2 and Section 3.3 have been fully
complied with to Lenders' satisfaction, each Lender severally agrees to lend to
the Borrowers from time to time (each such amount loaned being an "Additional
Advance" and collectively, the "Additional Advances") during the period from the
Closing Date to but excluding the Maturity Date an aggregate amount not
exceeding such Lender's Pro Rata Share of the Maximum Additional Advances Amount
at the time of the request for the applicable Additional Advance; provided that
in no event shall any Lender be required to make Additional Advances in an
aggregate principal amount exceeding its Pro Rata Share of the lesser of (A) the
aggregate amount of the Duluth Sale Proceeds and the Missouri Sale Proceeds
received in repayment of the Loan by Lenders and (B) Twelve Million Dollars
($12,000,000). Lenders shall not be required to make more than four (4)
Additional Advances each, even in the event the aggregate amount of the
Additional Advances actually advanced by Lenders is less than the Maximum
Additional Advances Amount. Any Additional Advances subsequently repaid or
prepaid may not be reborrowed. All proceeds of any Additional Advances shall be
used solely for the making of the applicable Acquisition to which such
Additional Advances relate and for transaction costs related thereto which have
been approved by Lenders.
SECTION 2.10 Cross-Default/Cross Collateral Provisions. An Event of
Default hereunder shall constitute an Event of Default under the AMRESCO Note
and the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Note. The Collateral described in Section 4.11 hereof
shall be pledged as security for the repayment of all Obligations.
SECTION 2.11 Holidays. Any principal or interest in respect of the
Loan which would otherwise become due on a day other than a Business Day, shall
instead become due on the next succeeding Business Day and such adjustment shall
be reflected in the computation of interest; provided, however, that in the
event that such due date shall, subsequent
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to the specification thereof by Lenders, for any reason no longer constitute a
Business Day, Lenders may change such specified due date in accordance with this
Section 2.11.
SECTION 2.12 Time and Place of Payments. All payments due on the
Notes hereunder shall be made to Agent in immediately available Dollars, not
later than 12:00 p.m., Atlanta, Georgia, time, on the day of payment, to the
following address:
AMRESCO Funding Corporation
▇.▇. ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or by wire-transfer in accordance with the following wire-transfer instructions:
NationsBank, N.A. (South)
Atlanta, Georgia
ABA#: ▇▇▇▇▇▇▇▇▇
Deposit into Account #: 010-255-5209
Account Name: AMRESCO Funding Corporation
Re: ▇▇▇▇▇ Media
SECTION 2.13 Joint and Several Liability: Payment Indemnifications.
(a) Each Borrower hereby agrees and acknowledges that the obligation
of each Borrower for payment of the Obligations shall be joint and several with
the obligations of each other Borrower hereunder regardless of which Borrower
actually receives the proceeds of any borrowing. Each Borrower hereby agrees and
acknowledges that it will receive substantial benefits from the Loan, including
the Additional Advances. The Obligations of and the Liens granted by any
Borrower under the Credit Documents shall not be impaired or released by any
action or inaction on the part of Agent or any Lender with respect to any other
Borrower, any Pledgor or Guarantor, including any action or inaction which would
otherwise release a surety.
(b) In order to provide for just and equitable contribution between
the Borrowers if any payment is made by a Borrower (for purposes of this Section
2.13(b), a "Funding Borrower") in discharging any of the Obligations, that
Funding Borrower shall be entitled to a contribution from the other Borrowers
for all payments, damages and expenses incurred by that Funding Borrower in
discharging the Obligations, in the manner and to the extent required to
allocate liabilities in an equitable manner among the Borrowers on the basis of
the relative benefits received by the Borrowers. If and to the extent that a
Funding Borrower makes any payment to any Lender or any other Person in respect
of the Obligations, any claim which said Funding Borrower may have against the
other Borrowers by reason thereof shall be subject and subordinate to the prior
cash payment in full of the Obligations.
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The parties hereto acknowledge that the right to contribution hereunder shall
constitute an asset of the party to which such contribution is owing.
Notwithstanding any of the foregoing to the contrary, such contribution
arrangements shall not limit in any manner the joint and several nature of the
Obligations; limit, release or otherwise impair any rights of Agent or any
Lender under the Credit Documents; or alter, limit or impair the obligation of
each Borrower, which is absolute and unconditional, to repay the Obligations.
ARTICLE III
CONDITIONS TO BORROWING
SECTION 3.1 Disbursement of Closing Date Advances and Effectiveness
of Agreement. This Agreement shall become effective and Lenders shall disburse
the Closing Date Advances in accordance with Section 2.2 above if, and only if,
each of the following conditions have been fulfilled to the satisfaction of
Lenders and their legal counsel (the occurrence of which shall be called,
collectively, the "Closing"):
(a) receipt by Agent of this Agreement and each of the other Credit
Documents, all duly executed and, where required, acknowledged;
(b) receipt by Agent of satisfactory Uniform Commercial Code and
other public record searches with respect to the Borrowers and Pledgors
indicating that Lenders have, with the exception of the Permitted Liens of the
Permitted First Lien Holders, a first priority lien on all of the Borrowers'
Assets, including the Collateral described in Section 4.11 hereof and including
all proceeds of the sale or transfer of the Licenses (to the extent allowable by
law), in accordance with the Credit Documents;
(c) receipt by Agent of copies of insurance binders or insurance
certificates evidencing the Borrowers' having obtained insurance in accordance
with Section 5.5, including the Lenders' loss payee endorsements required by
such Section;
(d) receipt by Lenders of commitments for the issuance of ALTA
lender's title insurance policies, or endorsements to existing policies, in
amounts satisfactory to Agent insuring the liens of the deeds of trust,
mortgages, leasehold deeds of trust and leasehold mortgages covering the Real
Property Collateral and showing title to the Real Property Collateral to be
vested in the Borrowers and subject only to those exceptions acceptable to
Lenders. Such policies or endorsements shall be in standard form and issued by
title insurance companies acceptable to Agent. The Borrowers shall deliver to
Agent funds sufficient to purchase such policies or endorsements no later than
the Closing Date;
(e) receipt by Agent of evidence satisfactory to Lenders that there
has been no change in the financial condition of any of the Borrowers since the
previous Financial Statements
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provided by the Borrowers to Agent dated as of July 31, 1997, that would
constitute or give rise to a Material Adverse Effect with respect to the
Borrowers taken as a whole;
(f) receipt by Agent of the identification of all Personal Property
Collateral with a value in excess of Fifty Thousand Dollars ($50,000) sufficient
to enable Agent to perfect Lenders' lien against such Personal Property
Collateral, including without limitation serial numbers or other identification
numbers of all printing presses and other equipment used in connection therewith
or forming a part thereof;
(g) receipt by Agent of a completed and fully executed Borrower's
Certificate; and
(h) receipt by Agent, for distribution (as appropriate hereunder or
under the terms of the Original Credit Agreement, as the case may be) to Agent
and Lenders, (1) all fees accrued and unpaid under the Original Credit Agreement
and (2) all interest accrued and unpaid under the Original Credit Agreement.
SECTION 3.2 Conditions to Lenders' Approval of Future Acquisitions.
Lenders shall not be deemed to have approved any prospective
Acquisition until the following conditions have been fulfilled to the
satisfaction of Lenders and their legal counsel with respect to such
Acquisition:
(a) Lenders or Agent shall have conducted to Lenders' satisfaction a
due diligence investigation of the Acquisition, which due diligence shall
consist of the following: visits to the business to be acquired in such
Acquisition; confirmation of historical revenues and Net Operating Income of the
business to be acquired in such Acquisition; receipt of the Borrowers' pro-forma
operating statements for the business to be acquired in such Acquisition
combined with the operations of in-market Radio Stations or Newspapers, as
appropriate; and review of Acquisition purchase agreements and other contracts
and/or agreements, local marketing agreements or time brokerage agreements, (if
any);
(b) the Acquisition is of an in-market broadcast radio station or
newspaper;
(c) the Acquisition Company created for the purpose of making the
Acquisition or other Subsidiary formed or acquired in such Acquisition shall
have executed a ratification agreement in the form attached hereto as Exhibit A
and a security agreement granting to Lenders a security interest in all Assets
of the Acquisition Company (including an assignment of the applicable purchase
contract to the extent permitted by law and right to a refund of any applicable
▇▇▇▇▇▇▇ money deposit) in the form attached hereto as Exhibit B;
(d) Lenders shall have received (1) a pledge agreement and
appropriate stock powers satisfactory to Lenders covering the pledge of one
hundred percent (100%) of the
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ownership interest in the Acquisition Company (and (i) if such Acquisition
Company is a limited liability company, its corporate member/manager, or (ii) if
such Acquisition Company is a limited partnership, its general partner thereof)
or other Subsidiary formed or acquired in such Acquisition in the form attached
hereto as Exhibit C, and (2) if the Acquisition Company or other Subsidiary
formed or acquired in such Acquisition is a limited liability company, a pledge
agreement covering one hundred percent (100%) of the stock or other ownership
interest in the managing member of the Acquisition Company or other Subsidiary
formed or acquired in such Acquisition in the form attached hereto as Exhibit D;
and
(e) Lenders' shall have consented in writing to any purchase
agreement for such Acquisition and the other documentation relating thereto
(including without limitation any loan or security documents executed by an
Acquisition Company in connection with such purchase) and any amendments thereto
or modifications thereof.
SECTION 3.3 Funding Additional Advances for Acquisitions. Lenders
shall make Additional Advances to the Borrowers for the making of an Acquisition
approved by Lenders pursuant to Section 3.2 hereof if, and only if, each of the
following conditions have been fulfilled to the satisfaction of Lenders and
their legal counsel:
(a) the conditions of Section 3.1 and Section 3.2 shall have been
fully complied with;
(b) Lenders shall have received the Duluth Sale Proceeds and/or the
Missouri Sale Proceeds;
(c) the sum of all Additional Advances shall not exceed the amount
of the Maximum Additional Advances;
(d) the Borrowers shall have executed an amendment to the Notes
satisfactory to Lenders in the event the total aggregate outstanding principal
balance of the Loan will exceed the principal sum of Seventy Million Dollars
($70,000,000) upon funding of the Additional Advances;
(e) the Maturity Date shall not have occurred;
(f) the Borrowers shall have provided to Agent confirmation
satisfactory to Agent that all prior security interests except Permitted Liens
in the applicable Acquisition have been released. Such confirmation shall
consist of evidence of the termination of all existing security interests in the
applicable Acquisition, including termination of all UCC Financing Statements,
terminations and/or reconveyances of all deeds of trust and leasehold deeds of
trust previously recorded by any entity against the applicable Acquisition,
which terminations and/or reconveyances shall be recorded through an escrow;
return of the original notes, pledge agreements and guaranties to the seller(s)
of the applicable Acquisition; and written confirmation
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acceptable in form and content to Agent that any claims against the applicable
Acquisition have been extinguished;
(g) any Acquisition Company and Pledgors shall have delivered to
Agent such security documents (in addition to the documents required pursuant to
Section 3.2 above) satisfactory to Lenders granting to Lenders a first priority
security interest in all of the assets acquired in connection with or in the
operation of the Acquisitions subject only to liens given to sellers of such
Acquisitions as permitted by Lenders, including without limitation proceeds of
all FCC Licenses, and in such other or additional collateral as required by
Lenders, including without limitation UCC-l Financing Statements, mortgage
documents and collateral assignments of leases; and the Borrowers or Acquisition
Company shall have delivered to Agent and Lenders modifications to Schedules
4.9(b) 4.10, 4.13, 4.25, 4.26, 6.1 and 6.2 hereto (together with any other
modifications to any other Schedule which Lenders reasonably deem necessary)
satisfactory to Lenders (prepared giving effect to the addition of the
applicable Acquisition Companies as the Borrowers and the consummation of the
purchase of the applicable Acquisition), which modifications shall be deemed to
supplement and amend such Schedules for all purposes hereunder and under the
other Credit Documents;
(h) the Borrowers and Guarantor shall have provided evidence
satisfactory to Lenders that there has been no Material Adverse Effect in the
financial condition of the existing the Borrowers and Guarantor, taken as a
whole, since the most recent financial statements provided by the Borrowers to
Agent in accordance with this Agreement;
(i) the Borrowers' Leverage shall not exceed 8.0;
(j) Lenders shall have received ALTA Lender's title insurance
policies in amounts acceptable to Lenders insuring the lien of any leasehold
mortgage or leasehold deed of trust covering the real property leased or owned
in connection with the operation of the Acquisition. Such policies shall show
title vested in the appropriate Acquisition Company and shall be subject only to
those exceptions acceptable to Lenders. Such policies shall be in standard form
and issued by title insurance companies acceptable to Agent;
(k) Agent shall have received certificates or instruments
representing the Collateral and documentation sufficient to perfect Lenders'
interest in all of the Collateral as more particularly provided in Section 4.11
hereof;
(l) the Borrowers, Pledgors and Guarantor are not in Default in any
material term, covenant or condition under any Credit Document;
(m) the Borrowers shall have delivered to Agent an opinion of FCC
legal counsel for the Borrowers satisfactory to Lenders in connection with any
Acquisition that is of a broadcast radio station;
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(n) the FCC shall have approved the transfer to the Borrowers or an
Acquisition Company of any FCC License issued by the FCC in connection with
operation of an Acquisition that is a broadcast radio station, and such approval
shall have become a Final Order;
(o) Agent shall have received a completed and fully executed
Borrower's Certificate; and
(p) At least five (5) Business Days in advance of the proposed date
of the making of the Additional Advance(s), Agent shall have received a request
for disbursement of the Additional Advance(s) satisfactory to Lenders and
specifying (1) the proposed date of the Additional Advance(s) (which shall be a
Business Day); (2) the amount of the Additional Advance(s) requested; (3) the
application of the proceeds of such Additional Advance(s); and (4) wire-transfer
instructions for any disbursements to be made by wire-transfer.
SECTION 3.4 Acknowledgment of Approval of Purchase of KTRR and the
HPS Assets. Lenders and the Borrowers acknowledge that, subject to Lenders'
review and approval of each of the KTRR Purchase Agreement and the HPS Purchase
Agreement, and, in each case, all documentation (including any seller notes)
related thereto, Lenders have approved the Borrowers' proposal to purchase KTRR
and the HPS Assets. Lenders and the Borrowers further acknowledge that funds for
the purchase of KTRR and the HPS Assets will be disbursed to the Borrowers
pursuant to Section 2.2 hereof. The purchases of KTRR and the HPS Assets shall
not be deemed to be "Acquisitions" for purposes of Section 3.2 and Section 3.3
hereof.
SECTION 3.5 Closing. From and after the Closing Date, the rights,
obligations, and remedies of the parties hereto shall be governed by this
Agreement and the other Credit Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Borrower makes the following representations and warranties to
Lenders, which representations and warranties shall survive the execution of
this Agreement and shall continue in full force and effect until the payment,
performance and satisfaction in full of the Obligations.
SECTION 4.1 Legal Status. Each Borrower is a corporation, limited
liability company or limited partnership duly organized and existing under the
laws of the State of Virginia and is properly licensed and in good standing in
every jurisdiction in which such Borrower is doing business where failure to
qualify would have a Material Adverse Effect on the Borrowers. Schedule 4.1
hereto accurately and completely lists, as to each Borrower: (1) the state of
incorporation or formation of each such Borrower, (2) the classes and number of
authorized and outstanding shares of capital stock of or membership interests in
each of them,
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and the owners of such outstanding shares of capital stock or membership
interests, and (3) the business in which each of them is engaged. All of the
foregoing shares of stock or membership interests which are issued and
outstanding have been duly and validly issued and are fully paid and
non-assessable, and are owned by the Persons referred to on Schedule 4.1 free
and clear of any Lien except as otherwise provided for herein. Except as set
forth on Schedule 4.1, there are no outstanding warrants, options, contracts or
commitments of any kind entitling any Person to purchase or otherwise acquire
any shares of capital stock of or membership interests in any Borrower nor are
there outstanding securities which are convertible into or exchangeable for any
shares of capital stock of or membership interests in any Borrower. Except as
set forth on Schedule 4.1, none of the Borrowers have any Subsidiaries.
SECTION 4.2 No Violation; Compliance. As of Closing, the execution,
delivery and performance of this Agreement and the other Credit Documents are
within each Borrower's respective powers, are not in conflict with the terms of
any charter, bylaw, the CMD Partnership Agreement, Articles of Incorporation,
limited liability company operating agreements or other organization papers of
each Borrower, and do not result in a breach of or constitute a default under
any contract, obligation, indenture or other instrument to which either is a
party or by which either is bound or affected; and there is no law, rule or
regulation, nor is there any judgment, decree or order of any court or
governmental authority binding on any Borrower which would be contravened by the
execution, delivery, performance or enforcement of this Agreement or the other
Credit Documents.
SECTION 4.3 Authorization; Validity. Each Borrower has taken all
partnership, corporate or other action necessary to authorize the execution and
delivery of this Agreement and the other Credit Documents, and the consummation
of the transactions contemplated hereby and thereby.
SECTION 4.4 Approvals; Consents. As of the date of this Agreement
(except as may be required by the FCC pursuant to 47 CFR ss.3613), no approval,
consent, exemption or other action by, or notice to or filing with, any
governmental authority is presently necessary in connection with the execution,
delivery, performance or enforcement of this Agreement or the other Credit
Documents except as may have been obtained by the Borrowers and certified copies
of which have been delivered to Lenders.
SECTION 4.5 Liens. The Borrowers' have good and marketable title to
their Assets, free and clear of all Liens or rights of others, except for
Permitted Liens as shown on Schedule 6.2 hereof.
SECTION 4.6 Litigation. There are no suits, proceedings, claims or
disputes pending or, to the knowledge of any Borrower after due inquiry,
threatened, against any Borrower or its properties in an amount which exceeds
Twenty-Five Thousand Dollars ($25,000) for any individual matter or an aggregate
for all Borrowers in an amount which exceeds One Hundred Thousand Dollars
($100,000) for all such matters which such amount is not fully
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covered by applicable insurance as to which no reservation of rights has been
taken by the insurer thereunder, except as described in Schedule 4.6 hereof.
SECTION 4.7 Taxes. All tax returns required to be filed by the
Borrowers have in fact been filed, and all taxes, assessments, fees and other
governmental charges upon the Borrowers or upon any of their Assets, income or
franchises, which are due and payable have been paid. The provisions for taxes
on the books of the Borrowers are adequate for all open years, and for the
Borrowers' current Fiscal Year.
SECTION 4.8 Correctness of Financial Statements
(a) The Financial Statements prepared by the Borrowers as of July
31, 1997, and all material, written information and data furnished by the
Borrowers to Agent in connection therewith or subsequent thereto, and all other
Financial Statements provided by the Borrowers to Agent are complete and correct
and, taken together, accurately and fairly present the financial condition and
results of operations of the Borrowers as of July 31, 1997. Any forecasts of
future financial performance delivered by the Borrowers to Agent have been made
in good faith and are based on reasonable assumptions and investigations by
Borrower. Any audited Financial Statements have been prepared in accordance with
GAAP. Since July 31, 1997, there has been no change in the Borrowers' financial
condition or results of operations sufficient to have a Material Adverse Effect.
(b) The Financial Statements prepared by Guarantor as of December
31, 1996, and all material, written information and data furnished by Guarantor
to Agent in connection therewith or subsequent thereto, and all other Financial
Statements provided by Guarantor to Agent are complete and correct and, taken
together, accurately and fairly present the financial condition of Guarantor as
of December 31, 1996. Since December 31, 1996, there has been no change in
Guarantor's financial condition sufficient to have a Material Adverse Effect.
SECTION 4.9 Licenses, Patents, Trademarks, Copyrights, and
Intellectual Property, etc.
(a) Each Borrower has all necessary patents, patent rights,
licenses, trademarks, trademark rights, trade names, trade name rights,
copyrights, permits, and franchises in order to conduct its business and to
operate its Assets as presently being conducted and operated, without known
material conflict with the rights of third Persons, and all of same are valid
and subsisting, except where such lack of validity or subsistence would not have
a Material Adverse Effect. The consummation of the transactions contemplated by
this Agreement will not alter or impair any of such rights of each Borrower. No
Borrower has been charged or, to the best of the Borrowers' knowledge, has been
threatened to be charged with any infringement, nor has any Borrower infringed
on any unexpired trademark, trademark registration, trade name, patent,
copyright, copyright registration, or other proprietary right of any Person,
which charge or threat could reasonably be expected to have a Material Adverse
Effect.
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(b) Set forth in Schedule 4.9(b) hereto is a complete list of all
Radio Stations and with all FCC Licenses used in connection with the ownership
and operation thereof. Such list correctly sets forth the termination date of
each FCC License. Each FCC License is validly issued and in full force and
effect, and constitutes all of the authorization from the FCC or any
communications regulatory authority necessary for the operation of each Radio
Station in the same manner as it is presently conducted and as proposed to be
conducted. Each Borrower has taken all material actions and performed all of its
material obligations that are necessary to maintain the FCC Licenses without
adverse modification or impairment, and complete and correct copies of the FCC
Licenses of each Borrower have been delivered to Agent. No event has occurred
which (1) results in, or after notice or lapse of time or both would result in
revocation, suspension, adverse modification, non-renewal, impairment or
termination of or any order of forfeiture with respect to any FCC License or (2)
materially and adversely affects or could reasonably be expected in the future
to materially adversely affect any of the rights any Borrower thereunder. Except
as set forth in Schedule 4.9(b) none of the FCC Licenses require that any
present stockholder (other than ▇▇▇▇▇), director, officer or employee of any
Borrower remains a stockholder or employee of such Person, or that any transfer
of control of such Borrower must be approved by any public or governmental body
other than the FCC.
(c) Except as to disclosures previously made to Lenders concerning
NCR and the $5,000 fine in connection with the Notice of Apparent Liability
issued by the FCC pursuant to Section 503(b) of the Communications Act of 1934,
as amended, and a complaint recently filed against Radio Station WIOV (FM),
formal notice of which has not been received by Borrowers, no Borrower or
Pledgor is a party to or has knowledge of any investigation, notice of apparent
liability, material violation, forfeiture or other order or complaint issued by
or before any court or regulatory body, including the FCC, or of any other
proceedings (other than proceedings relating to the radio or television
industries generally) which could in any manner threaten or adversely affect the
validity or continued effectiveness of the FCC Licenses of any Borrower. No
Borrower has any reason to believe that the FCC Licenses listed and described in
Schedule 4.9(b) will not be renewed in the ordinary course. Each Borrower has
filed in a timely manner all material reports, applications, documents,
instruments and information required to be filed by it pursuant to applicable
rules and regulations or requests of every regulatory body having jurisdiction
of its FCC Licenses. Each Borrower has submitted to the FCC on a timely basis
all required equal employment opportunity reports. All Borrowers maintain
appropriate public files at the Radio Stations in a manner that complies in all
material respects with the rules, regulations and policies of the FCC.
(d) None of the facilities used in connection with the Radio
Stations (including without limitation, the transmitter and tower sites owned or
used by the Borrowers) violates in any material respect the provisions of any
applicable building codes, fire regulations, building restrictions or other
governmental ordinances, orders or regulations and each such facility is zoned
so as to permit the commercial uses intended by the owner or occupier thereof
and there are no outstanding variances or special use permits materially
affecting any of the facilities or the uses thereof.
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(e) To the Borrowers' knowledge, after due inquiry, the operation of
any of the Radio Stations does not cause or result in exposure to any workers or
the general public to levels of radio frequency radiation in excess of the
"Radio Frequency Protection Guidelines" recommended in "American National
Standard Safety Levels with Respect to Human Exposure to Radio Frequency
Electromagnetic Fields 300 Khz to l00gHz" (ANSI C95.1-1982), issued by the
American National Standards Institute.
(f) Each Ownership Report filed by each Borrower with the FCC is
true, correct and complete in all material respects and there have been no
changes in the ownership of any Borrower or the FCC Licenses since the filing of
the most recent Ownership Reports for each Radio Station.
SECTION 4.10 Ownership. The schedule of ownership interests in the
Borrowers and Pledgors set forth in Schedule 4.10 hereof is true, accurate and
complete. Schedule 4.10 shall be further amended upon creation of new or
additional Acquisition Companies or other Subsidiaries to identify the ownership
interests in such new or additional Acquisition Companies or Subsidiaries (and
any applicable corporate member/manager) which have been approved by Lenders.
SECTION 4.11 Grant of Security Interest. Subject to all Permitted
Liens, and to the extent only and as more particularly set forth herein or
provided for in the other Credit Documents, the Borrowers hereby grant to
Lenders, to secure the payment and performance of the Obligations, a security
interest in and to all of Borrower's present and future Assets including,
without limitation, the following (collectively referred to as the
"Collateral"):
(a) All of each Borrower's personal property including without
limitation each Borrower's cash, money, deposit accounts, accounts, documents,
instruments, chattel paper, inventory, accounts receivable, machinery,
equipment, transmitting towers, antennas, fixtures, and all general intangibles
including without limitations all proceeds of the sale, transfer or other
disposition of the FCC Licenses (but only to the extent that a Borrower is now
or hereafter permitted by law to grant a security interest in such FCC
Licenses), described on Schedule 4.9(b) hereto, and all other general
intangibles including goodwill, patents, trademarks, trade names, in each case
whether now existing or hereafter acquired or created, and any proceeds or
products of any of the foregoing, including without limitation all proceeds of
sale of the foregoing, all proceeds of insurance covering the foregoing, and all
proceeds of eminent domain and other governmental takings of the foregoing
(collectively referred to as the "Personal Property Collateral");
(b) All of each Borrower's interest in all now owned or hereafter
acquired material real property, including an assignment of rents and leases and
a lien on fixtures with respect thereto, whether leased or owned outright by any
of the Borrowers as shown on Schedule 4. 11(b) and Schedule 4. 13 hereto
(collectively referred to as the "Real Property Collateral");
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(c) One hundred percent (100%) of the issued and outstanding capital
stock of, or membership interests in, each Borrower; provided however, that the
pledge of stock of CMB II, ▇▇ ▇▇, St. ▇▇▇▇▇ and NCR II and the pledge of
membership interest in NCR III, if any, shall be unperfected and subordinate to
pledges and liens to the Permitted First Lien Holders until such time as all
obligations to the Permitted First Lien Holders are satisfied or discharged and
the shares of stock in CMB II, ▇▇ ▇▇, St. ▇▇▇▇▇ and NCR II are in the possession
of Agent or other pledge holder for Lenders as the secured party;
(d) All leases for all equipment or other personal property valued
at or in excess of $30,000 and used in the operations of the business of the
Radio Operators and the Newspaper Operators as described on Schedule 4.25 or
Schedule 4.26 hereto;
(e) All of CMD Inc.'s general partnership interest and BNI's limited
partnership interest in CMD L.P.;
(f) All existing life insurance policies or replacements thereto
covering Guarantor, which currently designate Lenders as the collateral
assignees of such policies;
(g) A first priority security interest in all of the Assets of each
Acquisition Company or new Subsidiary of any Borrower, subject only to liens in
favor of sellers of such Assets which have been approved by Lenders, if any;
(h) 100% of the issued and outstanding capital stock of, or the
membership interest in, each Acquisition Company or new Subsidiary of any
Borrower;
(i) Upon closing of the HPS Purchase Agreement, a first priority
security interest in all of the Assets used in connection with the ownership and
operation of HPS, subject only to liens in favor of sellers of such Assets which
have been approved by Lenders, if any; and
(I) Upon closing of the KTRR Purchase Agreement, a first priority
security interest in all of the Assets used in connection with the operation and
ownership of KTRR, subject only to liens in favor of sellers of such Assets
which have been approved by Lenders, if any.
SECTION 4.12 Lien Priority. To the extent permitted by law, upon
perfection of Lenders' security interest in the Collateral, Lenders shall have a
first lien priority security interest in all of the Assets of each Borrower
except as provided on Schedule 6.2 hereto.
SECTION 4.13 Tower Leases and Licenses. No Borrower is a party to
any lease, license or occupancy agreement with a term in excess of one month
with respect to the installation, maintenance and operation of any radio
transmitters, repeater stations, office space or other facilities used by the
Radio Operators in connection with the operation of the Radio Stations, or the
Newspaper Operators in connection with the operation of the Newspapers, except
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for the leases described on the attached Schedule 4.13 hereto. Each Borrower has
delivered to Lenders true, complete and accurate copies of all written real
property leases or licenses with respect to the installation, maintenance and
operation of any radio transmitters, repeater stations, office space or other
facilities used by the Radio Operators in connection with the operation of the
Radio Stations or by the Newspaper Operators in connection with the operation of
the Newspapers.
SECTION 4.14 Other Obligations. No Borrower and, to the best
knowledge of the Borrowers, no Pledgor or Guarantor is in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation, which default
could reasonably be expected to have, in the aggregate, a Material Adverse
Effect, except as provided in Schedule 4.14.
SECTION 4.15 This Obligation. No Borrower is in default under any of
the terms, conditions or covenants contained in any of the Credit Documents.
SECTION 4.16 Binding Agreements. This Agreement and all other Credit
Documents have been duly executed and delivered by each Borrower. This Agreement
and all other Credit Documents to which any Borrowers are a party, each
constitute the legal, valid and binding obligations of each such Borrower
enforceable in accordance with their respective terms, except insofar as the
enforceability hereof and thereof may be limited by applicable bankruptcy,
insolvency or other similar laws now or hereafter in effect affecting the
enforcement of creditors' rights generally and by general principals of equity.
SECTION 4.17 Insurance. The Borrowers have taken all action
necessary to acquire the insurance policies described in Section 5.5 hereof,
summaries of which policies have been provided to Lenders in accordance with
Section 3.1(c). These insurance policies are in full force and effect on the
date hereof and the Borrowers are not delinquent in the payment of any premium
for such policies.
SECTION 4.18 ERISA. (a) Except as described on Schedule 4.18, no
Borrower has, nor has any of them ever had, any Plan in connection with which
there could arise a direct or contingent liability of any Borrower to the
Pension Benefit Guaranty Corporation ("PBGC"), the Department of Labor or the
Internal Revenue Service ("IRS"). No Borrower is a participation employer in:
(1) any Plan under which more than one employer makes contributions as described
in Sections 4063 and 4064 of ERISA, or (2) a Multiemployer Plan as defined in
Section 4001 (a)(3) of ERISA. (b) All references to the Borrowers, in this
Section 4.18 or in any other Section of this Agreement relating to ERISA, shall
be deemed to refer to the Borrowers and all other entities which are, together
with the Borrowers, part of a Controlled Group.
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SECTION 4.19 Partnerships and Joint Ventures. No Borrower is a party
to any partnership agreement or joint venture agreement except that CMD Inc. and
BNI are parties to the CMD Partnership Agreement.
SECTION 4.20 Sufficient Capital. Each Borrower now has capital
sufficient to carry on its business, all business and transactions in which it
is about to engage, and is now solvent and able to pay its debts as they mature.
Each Borrower now owns property having a value, both at fair valuation and at
present fair saleable value, greater than the amount required to pay such
Borrower's debts.
SECTION 4.21 Environmental Matters and Compliance with Laws.
(a) There have been no complaints, citations, claims, notices,
information requests, orders (including but not limited to clean up orders) or
directives on environmental grounds made or delivered to, pending or served on,
or anticipated by each Borrower or its agent, or of which each Borrower or its
agent, after due investigation, including consideration of the previous uses of
the assets and meeting the standard under 42 U.S.C. Section 9601(35)(B)(1986),
are aware or should be aware (1) issued by a governmental department or agency
having jurisdiction over any of the assets of each Borrower, real or personal,
owned or leased, and affecting each Borrower's Assets, business, operations,
equipment, property leaseholds, other facilities, or any part thereof, including
but not limited to clean up orders, or (2) issued or claimed by any persons,
agencies, or organizations and affecting each Borrower's Assets, business,
operations, equipment, property, leaseholds, or other facilities, or any part
hereof.
(b) To the Borrowers' knowledge, after due investigation, including
but not limited to consideration of the previous uses of the assets and meeting
the standard of 42 U.S.C. Section 960l(35)(B)(1986), there have not been, are
not now and as of the Closing Date, there will be no solid waste, hazardous
waste, hazardous substances, toxic substances, toxic chemicals, pollutants or
contaminants, underground storage tanks, purposeful dumps, or accidental spills
in, on or about any of the Assets of each Borrower, real or personal, owned or
leased, or stored on any real property owned or leased by each Borrower or by
each Borrowers' lessees, licensees, invitees or predecessors except as disclosed
on Schedule 4.21 hereto.
(c) To the Borrowers' knowledge, after due investigation, including
consideration of the previous uses of the property and meeting the standard of
42 U.S.C. Section 9601(35)(B)(1986), except as disclosed on Schedule 4.21
hereto, there have been no, and are not now any material or reportable
emissions, spills, seepage, damages, releases, or discharges into or upon the
air, soils or improvements located thereon, surface water or ground water, or
any sewer or septic system servicing each Borrower's Assets, or any toxic or
hazardous substances, pollutants, contaminants, solid waste or hazardous waste.
(d) Each Borrower has obtained and will maintain all necessary
approvals, permits, licenses, certificates, or satisfactory clearances for use
of its assets from all
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governmental authorities, utility companies, or development-related entities,
with respect to each Borrower's use of its assets and each Borrower's discharge
of any chemicals, liquids and emissions, into the atmosphere, ground water or
surface water, including but not limited to sewers or septic systems, from each
Borrower's operations.
(e) To the best of each Borrower's knowledge, after due
investigation, no asbestos or asbestos containing materials are installed, used
or incorporated into any Borrower's property, and no asbestos or asbestos
containing materials have been disposed of on each Borrower's property.
(f) To the best of each Borrower's knowledge, after due
investigation, no polychlorinated biphenyls ("PCBs") are located on or in any
Borrower's property, in the form of electrical transformers, fluorescent light
fixtures with ballasts, cooling oils, or in any other device or form, except as
reflected on Schedule 4.21.
(g) Each Borrower and their business operations, assets, equipment,
property, leaseholds or other facilities are in substantial compliance with all
applicable federal, state, and local statutes, laws, regulations and ordinances.
SECTION 4.22 Regulation G. The proceeds of the Loan will be used by
the Borrowers as set forth in Section 2.2 and Section 3.3 hereof. No Borrower
owns or intends to carry or purchase, and no part of the proceeds will be used
directly or indirectly for the purpose of purchasing or carrying (or for payment
in full or in part of Indebtedness which was incurred for the purposes of
purchasing or carrying), any "margin security", as such term is defined in
Regulation G.
SECTION 4.23 Condition of Assets.
(a) All of the assets and properties of the Borrowers which are
reasonably necessary for the operation of their respective businesses, are in
good working condition, ordinary wear and tear excepted, and are able to serve
the function for which they are currently being used.
(b) No Collateral covered by the Credit Documents has, at any time
during the four (4) month period immediately preceding the Closing Date, been
located anywhere other than its location on the Closing Date.
SECTION 4.24 ARB Finance - One Conduct of Business. ARB Finance -
One does not currently conduct any business or operations nor does it presently
propose to conduct any business or operations except as a lender or borrower for
or on behalf of the Borrowers.
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SECTION 4.25 Capitalized Lease Obligations. Attached hereto as
Schedule 4.25 is a true, complete and accurate description, including payment
schedules, of all of the Capitalized Lease Obligations of the Borrowers as of
the date hereof.
SECTION 4.26 Operating Lease Obligations. Attached hereto as
Schedule 4.26 is a true, complete and accurate description, including payments
schedules, of all Operating Leases of the Borrowers providing for payments in
excess of Twenty Thousand Dollars ($20,000) per year in effect on the date
hereof
ARTICLE V
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that until the Obligations have been
paid in full to Lenders, each Borrower shall:
SECTION 5.1 Punctual Payments. Punctually pay the interest and
principal on the Loan, and any fees or other liabilities due under this
Agreement and the other Credit Documents, at the times and place and in the
manner specified in this Agreement.
SECTION 5.2 Books and Records. Maintain adequate books and records
in accordance with GAAP, and permit any authorized representative of Agent or
Lenders, at any reasonable time during normal business hours, and, provided no
Event of Default has occurred and is continuing, upon three (3) Business Days'
notice to Borrower, to inspect, audit and examine such books and records, to
make copies of the same, and to inspect the Borrowers' Assets. All such notices
shall be directed to Guarantor or to the officers of BMC Inc.
SECTION 5.3 Financial Statements. Deliver to Agent the following,
all in form and detail reasonably satisfactory to Agent and Lenders:
(a) as soon as available but not later than 30 days after each month
end, a Financial Statement for each Borrower which shall include a balance sheet
as of the close of such period, a statement of income, a projected sales report;
an accounts receivable aging schedule and an accounts payable aging schedule;
(b) the Radio Operators, as a group, and the Newspaper Operators, as
a group, shall each provide to Agent no later than June 30, 1998, annual audited
Financial Statements for the period ending February 28, 1998, which statements
shall include a balance sheet, statement of income, statement of cash flow, and
management letters from the auditors of each group, prepared by an independent
certified public accountant that is selected by the Borrowers and that is either
Ernst & Young or some other selected CPA that is reasonably satisfactory to
Agent;
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(c) as soon as available but not later than March 31 of each year
that the Loan remains unpaid each Borrower shall provide to Agent an annual
budget for the prospective Fiscal Year;
(d) from time to time such other information as Lenders may
reasonably request,
(e) no later than thirty (30) days after each month end, a monthly
compliance certificate in the form set forth on Schedule 5.3(e) hereto; and
(f) no later than seventy-five (75) days after Fiscal Year End, an
annual compliance certificate in the form set forth on Schedule 5.3(f) hereto.
SECTION 5.4 Existence; Compliance with Law. Preserve and maintain
its existence and all of its licenses (including without limitation, all FCC
licenses), permits, governmental approvals, rights, privileges and franchises
required for the operations of the Borrowers to the extent that failure to
preserve and maintain the same could reasonably be expected to have a Material
Adverse Effect; comply with the provisions of all documents pursuant to which
each Borrower is organized which govern such Borrower's continued existence to
the extent that failure to so comply could reasonably be expected to have a
Material Adverse Effect on any Borrower; and comply with the requirements of all
applicable laws, rules, regulations, orders of any governmental authority and
requirements for the maintenance of each Borrower's insurance, licenses,
permits, governmental approvals, rights, privileges and franchises to the extent
that failure to so comply could reasonably be expected to have a Material
Adverse Effect.
SECTION 5.5 Insurance. Maintain and keep in force insurance covering
the Personal Property Collateral, and the Real Property Collateral and of the
types and in amounts which are reasonable and which are generally held by owners
of radio broadcast stations of a similar size and location as the Radio
Stations, and by owners of newspapers of a similar size and location as the
Newspapers, including fire, extended coverage, public liability, business
interruption (excess cost), property damage and workers' compensation insurance,
issued by insurance companies acceptable to Agent, and deliver to Agent from
time to time at Agent's request schedules setting forth all insurance then in
effect. Lenders shall be named as an additional loss payee as to all of the
Borrowers' property and casualty insurance policies under an endorsement
reasonably acceptable to Agent. The Borrowers shall, concurrently with the
financial information required to be delivered by Borrower pursuant to Section
5.3(f), deliver to Agent, as Agent may request, copies of certificates
describing all insurance of the Borrowers then in effect.
SECTION 5.6 Facilities. Keep all of the Borrowers' Assets which are
useful or necessary to its business in good repair and condition, and from time
to time make
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necessary repairs, renewals and replacements thereto so that such Assets shall
be fully and efficiently preserved and maintained (ordinary wear and tear
excepted).
SECTION 5.7 Taxes and Other Liabilities. Pay and discharge when due
any and all indebtedness, obligations, assessments and taxes, both real or
personal and including federal and state income taxes; provided, however, that
the Borrowers shall have no obligation to pay such indebtedness, obligations,
assessments and taxes if same are being diligently contested in good faith by
appropriate proceedings, and reserves or other appropriate provisions, if
required by GAAP, have been made therefor.
SECTION 5.8 Inspection of Assets. Allow Agent, Lenders and their
representatives access to inspect the Assets, including the Personal Property
Collateral, the Real Property Collateral, the Radio Stations, and the
Newspapers, upon reasonable notice by Agent or Lenders to the Borrowers. All
informational requests and notices by Agent shall be directed to Guarantor or to
the officers of BMC L.P.
SECTION 5.9 Notice to Agent. Promptly, upon the Borrowers acquiring
knowledge thereof, give written notice to Agent of:
(a) all litigation affecting the Borrowers where the amount claimed
is in excess of Twenty-Five Thousand Dollars ($25,000) for any individual matter
or in excess of Fifty Thousand Dollars ($50,000) in the aggregate and when such
amount is not fully covered by applicable insurance (less applicable
deductibles);
(b) any substantial dispute which may exist between any Borrower, on
the one hand, and any governmental regulatory body or law enforcement authority,
on the other, if the determination of such dispute could reasonably be expected
to have a Material Adverse Effect;
(c) any labor controversy resulting in or threatening to result in a
strike against any Borrower, if the commencement of such strike could reasonably
be expected to have a Material Adverse Effect;
(d) any sale or transfer of any capital stock of or membership
interest in any Borrower or any other Affiliate directly or indirectly owning
any Borrower; provided, however, that this clause shall not be deemed to
constitute or imply any consent to any such sale or transfer;
(e) any Default or Event of Default;
(f) any other matter which has resulted in or could reasonably be
expected to have a Material Adverse Effect;
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(g) any Reportable Event, as defined in Section 4043 of ERISA, if a
notice of such Reportable Event is required under ERISA to be delivered to the
PBGC within thirty (30) days after the occurrence thereof, together with a
description of such Reportable Event and a statement of the action any Borrower
intends to take with respect thereto, together with a copy of the notice thereof
given to the PBGC; and,
(h) any of the following notices relating to environmental issues:
(1) any notice of any violation or administrative or judicial complaint or order
having been filed or about to be filed against any Borrower, Pledgor or other
Affiliate alleging violations of any Environmental Law and Regulation, or (2)
any notice from any government body or any other Person alleging that any
Borrower, Pledgor or other Affiliate is or may be subject to any Environmental
Liability; and promptly upon receipt thereof, provide Agent with a copy of such
notice together with a statement of the action which such Borrower, Pledgor or
other Affiliate intends to take with respect thereto.
SECTION 5.10 Real Property Leases; Tower Site Leases or Real
Property Purchases. Provide Agent with an accurate and complete copy of any
material, written real property lease or tower site lease any Borrower proposes
to enter into prior to the execution thereof and, if requested by Agent, execute
and deliver to Agent for the benefit of Lenders a first priority leasehold deed
of trust or collateral assignment of lease covering such leasehold estate
therein and provide Agent with prior written notice of the acquisition of any
real property and, if requested by Agent, execute and deliver to Agent for the
benefit of Lenders a first priority deed of trust thereon, all such documents to
be in form and substance satisfactory to Agent. Nothing herein shall be deemed
to imply or constitute Lenders' consent to the entry into any real property
leases or tower site leases other than as set forth on Schedule 4.13 hereto.
SECTION 5.11 ERISA Notices. Deliver to Agent (a) concurrently with
such filing, a copy of each Form 5500 which is filed with respect to each Plan
with the IRS; and (b) promptly, upon their becoming available, copies of: (1)
all correspondence with the PBGC, the Secretary of Labor or any representative
of the IRS with respect to any Plan, relating to an actual or threatened change
or development which would be materially adverse to any Borrower; (2) all
actuarial valuations received by any Borrower with respect to any Plan; and (3)
any notices of Plan termination filed by any Plan Administrator (as those terms
are used in ERISA) with the PBGC and any notices from the PBGC to any Borrower
with respect to the intent of the PBGC to institute involuntary termination
proceedings.
SECTION 5.12 Statements Relating to Accounts Receivable Between the
Borrowers. In the event that:
(a) any Radio Operator or any Newspaper Operator: (1) makes an
advance to ARB Finance-One or (2) receives a payment from ARB Finance-One in
respect of principal or interest on such advances; or
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(b) ARB Finance-One: (1) makes an advance to any Radio Operator or
any Newspaper Operator or (2) receives a payment from any Radio Operator or any
Newspaper Operator in respect of principal or interest on any such advances;
then deliver to the Agent not later than delivery of the Financial Statements
required to be delivered the date pursuant to Section 5.3(a), a written
statement setting forth the amounts of the advances or repayments, the dates on
which ARB Finance-One made or received any such advances or repayments. In
addition, the Borrowers and ARB Finance-One shall maintain and retain records of
all such advances and payments. All such advances or repayments shall comply
with the restrictions on transactions with Affiliates as set forth in Section
6.8 herein.
SECTION 5.13 Continuance of Business. Do, or cause to be done, all
things reasonably necessary to preserve and keep in full force and effect its
corporate existence and all permits, rights and privileges necessary for the
proper conduct of its business including, without limitation, the FCC Licenses,
and continue to engage in the same line of business.
SECTION 5.14 Comply with ERISA. Comply with all applicable
provisions of ERISA now or hereafter in effect.
SECTION 5.15 Subordinate Affiliates' Inter-Company Accounts
Receivable. Together with all Affiliates (including without limitation
Guarantor) subordinate payment of any existing and all future Affiliates'
Inter-Company Accounts Receivable, including those described on Schedule 5.15
hereto, to the payment of all Obligations due hereunder; provided, however that
NCR may pay the NCR Note Payments to Guarantor on the condition that equal funds
are simultaneously reinvested in the Borrowers.
SECTION 5.16 Maintain Net Working Capital. Maintain Net Working
Capital in the minimum amount of Three Million Dollars ($3,000,000) in the
aggregate, adjusted downward proportionately for Asset Sales approved by
Lenders.
SECTION 5.17 Notice of FCC Reports. Promptly upon their becoming
available, provide Agent with copies of each periodic or special report filed by
or on behalf of any Borrower with the FCC, if such reports indicate any material
adverse change in the business, operations, affairs, or conditions of Borrower's
business, and copies of any material notices or other communications from the
FCC which specifically relate to the operation of each Borrower's business.
SECTION 5.18 Purchase of the HPS Assets. On or before December 31,
1997: (a) use the funds disbursed pursuant to Section 2.2(a)(8) to complete the
purchase of the HPS Assets according to the terms of the HPS Purchase Agreement
and deliver to Agent within fifteen (15) days thereafter any additional
documents reasonably required by Agent in connection therewith to perfect
Lenders' security interest in the Assets used in connection with the ownership
and operation thereof; or (b) pay said funds to Lenders to be applied to the
then
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outstanding Obligations in accordance with the provisions of Section 2.8 hereof
(provided, however, that no Call Option Price shall be due and payable as a
result of such payment).
SECTION 5.19 Purchase of KTRR. On or before August 1, 1998: (a) use
the funds disbursed pursuant to Section 2.2(a)(9) to complete the purchase of
KTRR according to the terms of the KTRR Purchase Agreement and deliver to Agent
within fifteen (15) days thereafter any additional documents reasonably required
by Agent in connection therewith to perfect Lenders' security interest in the
Assets used in connection with the ownership and operation thereof; or (b) pay
said funds to Lenders to be applied to the then outstanding Obligations in
accordance with the provisions of Section 2.8 hereof (provided, however, that no
Call Option Price shall be due and payable as a result of such payment).
SECTION 5.20 Surplus Cash Flow Sharing Agreement. At Lenders' option
and within ten (10) days of the Borrowers' receipt of written notice from
Lenders of the exercise of such option, pay 75% of all Borrowers' Annual Surplus
Cash Flow to Lenders, the payment of which shall be applied as a prepayment in
the manner set forth in Section 2.8 hereof; provided, however that no Call
Option Price shall be due and payable as a result of such prepayment. The
Borrowers' Annual Surplus Cash Flow shall be calculated based on Fiscal Year End
information supplied by the Borrowers to Lenders, and the Borrowers shall
deliver to Lenders written notice of the amount of the Borrowers' Annual Surplus
Cash Flow (together with supporting calculations therefor) no later than
seventy-five (75) days after the Borrowers' Fiscal Year End. Lenders shall, no
later than ten (10) days after receipt of such notice, notify the Borrowers of
Lenders' election to exercise their option to have the Loan prepaid under this
Section 5.20 (failure to deliver notice of such election being deemed an
election by Lenders not to have the Loan prepaid).
SECTION 5.21 Maintain Bank Accounts. Maintain funds disbursed to the
Capital Expenditure Reserve Fund and for the purchase of KTRR and the HPS Assets
pursuant to Section 2.2 hereof in a deposit account in which Lenders have a duly
perfected first priority security interest; provided, however, that such funds
may be disbursed for the uses described in Section 3.4 hereof, subject to the
requirements of Section 5.18 and Section 5.19 hereof.
ARTICLE VI
NEGATIVE COVENANTS
The Borrowers further covenant and agree that until the Obligations
have been fully paid to Lenders, the Borrowers shall not without the prior
written consent of Lenders:
SECTION 6.1 Debt. Create incur or suffer to exist any Debt except
for (a) Permitted Debt as described in Schedule 6.1 hereof; (b) creation of any
additional Affiliates' Inter-Company Accounts Receivable permitted as set forth
in Section 6.8 hereof; (c) increases in management incentive liabilities as
described on Schedule 6.1 hereto; or (d) Debt incurred in the
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ordinary course of business in connection with Authorized Capital Expenditures
in an amount not to exceed the amount of the Authorized Capital Expenditures to
which such Debt relates; provided, however, that Borrowers may incur Debt in
connection with the making of an Acquisition, the purchase of KTRR and the
purchase of the HPS Assets upon receipt of Lenders' prior written consent upon
terms and evidenced by documentation subject to Lender's approval in Lenders'
sole discretion.
SECTION 6.2 Liens. Create, assume or suffer to exist any Lien
(including the lien of an attachment, judgment or execution) securing any Debt,
charge or obligation, on any of the Assets of the Borrowers, whether now owned
or hereafter acquired, except for Permitted Liens as described in Schedule 6.2
hereof.
SECTION 6.3 Merger, Consolidation, Transfer of Assets. Liquidate or
dissolve, or enter into any consolidation, merger or other combination, or lease
or conduct any Asset Sale with respect to any of the Borrowers' Assets or
businesses, or any one of them, including the Radio Stations and the Collateral
and all Licenses relating thereto.
SECTION 6.4 Loans, Advances, Investments, Subsidiaries,
Acquisitions, Guaranties. Except for Permitted Debt, Acquisitions approved by
Lenders pursuant to Section 3.2 and Section 3.3, and as provided in Section 2.2
and Section 6.8 herein, make any loans or advances to, or any investment in, any
Person; nor acquire any interest in any entity; nor acquire or form any new
Subsidiary; nor guaranty or become liable in any way as surety, endorser or
accommodation endorser (except as an endorser or accommodation endorser in the
ordinary course of business); nor pledge or hypothecate any Assets as security
for, any liabilities or obligations of any other Person.
SECTION 6.5 Character of Business. Engage in any business activities
or operations substantially different from or unrelated to the present business
activities and operations of the Borrowers.
SECTION 6.6 Dividends, Distributions. Declare or pay any dividend or
distribution in cash or kind except as provided for in Section 2.2(f) herein or
any distribution to or from CMN for or to any Newspaper Operator. In the event
that Guarantor incurs personal income tax obligations related to his ownership
interests in the Borrowers which are subchapter "S" corporations or limited
liability companies, Lenders will consider Guarantor's request for the payment
of a dividend by such the Borrowers to pay Guarantor's personal income tax
obligation.
SECTION 6.7 Capital Expenditures. Make cash Capital Expenditures in
excess of Authorized Capital Expenditures unless the Borrowers receive Lenders'
prior written consent; provided, however, each Borrower shall be permitted to
make reasonable expenditures for the purchase or lease of vehicles which are
reasonably necessary to the operation of its business. The purchase of
Acquisitions permitted to be made pursuant to Section 3.2 and Section 3.3 of
this Agreement, the purchase of the HPS Assets and the purchase of KTRR shall
not be
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deemed Capital Expenditures for purposes of this Section 6.7. At the Borrowers'
request, Lenders may, but shall not be required, to modify the limitation on
Authorized Capital Expenditures as set forth in this Section 6.7 after the
Borrowers' purchase of an Acquisition approved by Lenders pursuant to the terms
of this Agreement.
SECTION 6.8 Transactions with Affiliates. Directly or indirectly:
(a) make any investment in any Affiliate other than a Borrower (including the
acquisition of capital stock, bonds, notes, debentures, partnership or other
ownership interests or other securities of any Affiliate other than a Borrower);
(b) make any deposit with, or advance, loan or other extension of credit to any
Affiliate other than a Borrower, or guaranty of, or other contingent obligation
with respect to, Debt or other liability of any Affiliate other than a Borrower
and (without duplication) any amount committed to be advanced, lent or extended
to any Affiliate other than a Borrower; (c) merge into or consolidate with or
purchase or acquire assets from any Affiliate other than a Borrower; (d)
transfer, sell, lease, assign or otherwise dispose of any assets to any
Affiliate other than a Borrower; (e) enter into any transaction directly or
indirectly with or for the benefit of any Affiliate other than a Borrower
(including guaranties and assumptions of obligations of such Affiliate); or (f)
distribute any cash or make any payments to Guarantor, BMC Inc., or BMC L.P.,
except arm's length equivalent payments for reimbursement of goods and services
in the ordinary course of business (and limited to reimbursement for insurance
and other similar third party expenses) or to any Affiliate other than a
Borrower, including any family members of Guarantor, BMC Inc., and or to BMC
L.P., or any Affiliate other than a Borrower, for any purpose, including without
limitation payment of any Affiliates' Inter-Company Accounts Receivable,
salaries, wages, management fees, and capital distributions, except that the
Borrowers may (1) pay the Affiliate Payments to BMC L.P.; and (2) make
reimbursements of payments for third party goods and services delivered and/or
rendered for the benefit of the Borrowers and delivered and/or incurred in the
ordinary course (and limited to reimbursement for insurance and other similar
third party expenses).
SECTION 6.9 Change in Location of Principal Place of Business and
Assets. Relocate the principal place of business and/or Assets of any Borrower.
SECTION 6.10 Change in Ownership. Cause, permit or suffer any
change, direct or indirect, in the capital ownership, membership or control of
any Borrower, Pledgor, or any corporate, partnership, or limited liability
company Affiliate owning or controlling, directly or indirectly, any Borrower.
SECTION 6.11 Change in Name. Cause, permit or suffer any change in
the name of any Borrower.
SECTION 6.12 Limitation on Expenditures. Make distributions of Net
Operating Income or contributions of cash except for the payment of Authorized
Payments.
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SECTION 6.13 Change in Operating Agreement/Articles of
Incorporation/Bylaws. Amend or otherwise make any change to (a) any operating
agreement or change any initial "Manager" of a Borrower that is a limited
liability company (as defined in such Borrower's operating agreement) and (b)
any corporate Borrower's Articles of Incorporation or Bylaws without Lenders'
prior written approval, which approval may be granted or withheld at Lenders'
sole discretion.
SECTION 6.14 Entry into Purchase Agreement, etc. Enter into any
purchase agreement, time brokerage agreement, local marketing agreement, joint
venture agreement, joint sales agreement or any other similar agreement relating
to the purchase or other acquisition of an interest in any new Acquisition (or
any amendment to any existing such agreement) other than as set forth in Article
III herein. Notwithstanding the foregoing, Guarantor may enter into such
agreements in connection with the purchase or other acquisition of a business
enterprise or entity that is not within the radio broadcasting or newspaper
industries without Lenders' prior written consent.
SECTION 6.15 Change in Fiscal Year or Fiscal Year End. Change any
Borrower's Fiscal Year or Fiscal Year End.
SECTION 6.16 Maintain Net Operating Income. Fail to generate Net
Operating Income levels on the cumulative basis set forth in Schedule 6.16
hereto (the monthly Net Operating Income level is for reference purposes only)
provided that (a) upon sale of the Duluth Radio Stations (i) the monthly Net
Operating Income level shown on Schedule 6.16 shall be reduced by the amount of
$25,000 per month, and (ii) the minimum cumulative Net Operating Income level
shown on Schedule 6.16 shall be reduced by $25,000 per month multiplied by the
number of months elapsed since the date of such sale (assuming the Duluth Sale
Proceeds reduce the amount of the Obligations by the minimum amount of
$4,500,000; provided, however, that such amount shall not be construed as a
release price for the Duluth Radio Stations); (b) upon sale of the Missouri
Radio Stations (i) the monthly Net Operating Income level shown on Schedule 6.16
shall be reduced by the amount of $40,000 per month and (ii) the minimum
cumulative Net Operating Income level shown on Schedule 6.16 shall be reduced by
$40,000 per month multiplied by the number of months elapsed since the date of
such sale (assuming the Missouri Sale Proceeds reduce the amount of the
Obligations by the minimum amount of $6,000,000; provided, however, that such
amount shall not be construed as a release price for the Missouri Radio
Stations); (c) upon making an Acquisition approved by Lenders in accordance with
the provisions of Section 3.3 hereof (i) the monthly Net Operating Income level
shown on Schedule 6.16 shall be increased by the amount of $9,000 per month, and
(ii) the minimum cumulative Net Operating Income level shown on Schedule 6.16
shall be increased by the amount of $9,000 per month multiplied by the number of
months elapsed since the date of making such Acquisition for each one million
dollars re-borrowed by the Borrowers. Upon the occurrence of a sale or the
making of an Acquisition described under clause (a), (b) or (c) hereof, Schedule
6.16 shall, if Lenders so request, be amended in a manner satisfactory to
Lenders as a condition precedent to Lenders' funding any Additional Advance.
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ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1 Events of Default. The occurrence of any one or more of
the following events, acts or occurrences shall constitute an event of default
(an "Event of Default") hereunder:
(a) The Borrowers fail to timely pay any payment of interest due on
the Notes;
(b) The Borrowers fail to pay off the Loan when due and payable,
including the payment of any Post-Closing Lender Expenses, or any other amount
payable hereunder;
(c) The Borrowers fail to observe or perform any material covenant
set forth in Article V, Article VI or Article VIII herein or any other Credit
Document except as set forth in subsections (a), (it (k) (w) and (x) herein;
(d) Any representation, warranty, certification or statement made by
any Borrower in this Agreement, in any certificate, Financial Statement or other
document delivered pursuant to this Agreement, or under any Credit Document
proves to have been incorrect in any material respect when made;
(e) Any Borrower commences a voluntary Insolvency Proceeding seeking
liquidation, reorganization or other relief with respect to itself or its Debt
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or
consents to any such relief or to the appointment of or taking possession by any
such official in an involuntary Insolvency Proceeding or fails generally to pay
its Debt as it becomes due, or takes any corporate action to authorize any of
the foregoing;
(f) (1) A court of competent jurisdiction enters a decree or order
for relief in respect of any Borrower in an insolvency case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency, or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (2) An
involuntary Insolvency Proceeding is commenced against any Borrower seeking
liquidation, reorganization or other relief with respect to it or its Debt or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and such
involuntary Insolvency Proceeding remains undismissed and unstayed for a period
of sixty (60) days;
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(g) A judgment creditor obtains possession of any of the Assets of
any Borrower by any means, including levy, distraint, replevin, or self-help, or
one or more judgments are entered against the Borrowers involving singly or in
the aggregate a liability in excess of $50,000 (to the extent not fully covered
by insurance) or any order, judgment or decree is entered decreeing the
dissolution of the Borrowers and such order remains undischarged or unstayed for
a period in excess of thirty (30) calendar days;
(h) ▇▇▇▇▇ fails to own and control one hundred percent (100%) of the
ownership interests in the Holding Companies and BNI;
(i) Any of the Credit Documents fails to be in full force and effect
for any reason, or, except for Permitted Liens, Lenders fail to have a
perfected, first priority lien in all of the Collateral assigned or pledged to
Lenders thereunder other than as the result of some action or inaction by
Lenders, or a default or event of default occurs under any Credit Document;
6) The Borrowers fail to maintain insurance as provided in Section
5.5 hereof;
(k) The Borrowers fail to furnish Agent required financial reports
or covenant compliance certificates after the time requirements provided in
Section 5.3 hereof;
(1) The FCC Licenses, but excluding the auxiliary licenses, are
modified adversely, revoked, suspended, canceled or otherwise rendered
non-transferable by the FCC or any other regulatory agency or court of competent
jurisdiction;
(m) Any Radio Operator shall fail to be the licensee under any or
all of the FCC Licenses other than in connection with a sale or transfer of any
of the FCC Licenses consented to by Lenders;
(n) Any of the Radio Stations shall fail to maintain any broadcast
signal for any period of three (3) consecutive days for any reason other than
natural causes or an act of war;
(o) The Borrowers contribute any cash or cash equivalents, either as
loans, loan repayments, distributions, exchanges, etc., to ARB Two, for any
purpose whatsoever, including without limitation for capital improvements, to
supplement daily cash flow, or for working capital of ARB Two;
(p) The Borrowers default under any obligation secured by the
Permitted Liens;
(q) The Borrowers fail to generate Net Operating Income levels on
the cumulative basis set forth in Section 6.16 hereof;
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(r) The Borrowers fail to maintain Net Working Capital in the
minimum amount set forth in Section 5.16 hereof;
(s) The termination of any Plan or the institution by the PBGC of
proceedings for the involuntary termination of any Plan, in either case, by
reason of, or which results or could result in, a material "accumulated funding
deficiency" under Section 412 of ERISA or the failure by any Borrower to make
required contributions, in accordance with the applicable provisions of ERISA,
to any Plan now or hereafter established or assumed by it;
(t) The Borrowers enter into any purchase agreement, time brokerage
agreement, local marketing agreement, joint venture agreement, joint sales
agreement or any other similar agreement relating to the purchase or other
acquisition of an interest in any new Acquisition (or any amendment to any
existing such agreement) other than as set forth in Article Ill and Section 6.14
herein.
(u) The Borrowers cause, permit or suffer any change, direct or
indirect, in the capital ownership, membership or control of any Borrower,
Pledgor, or corporate, partnership, or limited liability company Affiliate
owning or controlling, directly or indirectly, any Borrower without Lenders'
prior written consent;
(v) Any Borrower that is a limited liability company amends or
otherwise makes any change to its operating agreement or changes its initial
"Manager" (as defined in any such Borrower's operating agreement) without
Lenders' prior written approval;
(w) The Borrowers fail to comply with the requirements set forth in
Section 5.18; and
(x) The Borrowers fail to comply with the requirements set forth in
Section 5.19.
SECTION 7.2 Remedies.
(a) Upon the occurrence of any Event of Default under Section 7.1(e)
or Section 7.1(f) hereof the Obligations shall become immediately due and
payable without any election or action on the part of Lenders. Upon the
occurrence and continuance of any other Event of Default not cured within the
Cure Period, if applicable, Lenders may, at their election, immediately declare
the Obligations to be due and payable, and the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrowers hereby expressly waive.
(b) Upon the occurrence of an Event of Default, the amounts due
under the AMRESCO Note and the ▇▇▇▇▇▇▇ Sachs Note shall immediately begin to
accrue interest at the Default Rate unless waived by Lenders. In the event an
Event of Default is one under Section
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7.1 (a), (j) or (k), and such Event of Default is cured within the Cure Period,
the interest rate on the Loan shall revert to the Initial Interest Rate plus the
Additional Interest Rate.
(c) Upon the occurrence of Events of Default as set forth in Section
7.1, unless cured within the Cure Period, if applicable, the Borrowers,
Pledgors, and Guarantor, shall:
(1) At Agent's request, stipulate to the appointment of a
receiver in a court of competent jurisdiction, and
(2) In the event of such appointment, consent to and
cooperate with the liquidation of the Radio Stations and all Collateral for
the Loan by the receiver, or
(3) Consent to and cooperate with such other non-judicial
foreclosure proceedings conducted or initiated by Agent.
(d) Upon the occurrence of any Event of Default, Lenders shall have
all other remedies set forth herein and in the other Credit Documents and all
remedies at law, in equity, or under the Uniform Commercial Code that are
consistent with the Communications Act and the rules and regulations of the FCC;
provided, however, that in no event shall any Lender obtain, or have the right
to obtain, a deficiency judgment against any Pledgor other than the Guarantor
under the Guaranty.
ARTICLE VIII
TRANSFER OF TITLE TO RADIO STATIONS AND NEWSPAPERS
SECTION 8.1 No Transfer Without Consent of Lenders. Borrower shall
not transfer title to the Radio Stations, the Newspapers, or any or all of the
FCC Licenses related to the operation of the Radio Stations without the Lenders'
prior written consent.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Notices. All notices, requests and other communications
to any party hereunder shall be in writing and shall be given to such party at
its address and to the telefax number set forth below or such other address or
telefax number as such party may hereafter specify for the purpose by notice to
the other party:
If to the Borrowers:
▇▇▇▇▇ Media Company, L.P.
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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P.O. Box 3353
Evansville, IN 47732
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
100 Shockoe Slip
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Agent:
AMRESCO Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ - ▇▇ 342
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lenders:
AMRESCO Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ - ▇▇ 342
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
-▇▇-
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ Sachs Credit Partners L.P.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Ms. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
French, Lyon & Associates
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Any notice or other communication provided for or allowed hereunder
shall be considered to have been validly given if delivered personally, and
evidenced by a receipt signed by an authorized agent or addressee, or 72 hours
after being deposited in the United States mail, registered or certified,
postage prepaid, return receipt requested, or 48 hours after being sent by
Federal Express or other courier service, or, in the case of telefaxed notice,
when telefaxed, receipt acknowledged.
SECTION 9.2 No Waivers. No failure or delay by Agent in exercising
any right, power or privilege hereunder or under any Credit Document shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise
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thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 9.3 Expenses; Documentary Taxes; Indemnification.
(a) Borrower shall pay (1) all Lenders' Pre-Closing Expenses; (2)
all Lender's Post-Closing Expenses; and (3) if an Event of Default occurs, all
out-of-pocket expenses incurred by Lenders, including reasonable attorneys' fees
and expenses incurred in connection with such Event of Default and collection
and other enforcement proceedings resulting therefrom or in connection with any
refinancing or restructuring of the Obligations and the liabilities of the
Borrowers under this Agreement, any of the other Credit Documents, or any other
document, instrument or agreement subsequently entered into.
(b) In the event that Lenders become involved in any capacity in any
action, proceeding or investigation brought by or against any person, including
stockholders of the Borrowers or Guarantor, in connection with or as a result of
either the Loan, this Agreement or the other Credit Documents, the Borrowers and
Guarantor jointly and severally, periodically will reimburse Lenders for their
legal and other expenses (including the cost of any investigation and
preparation) incurred in connection therewith. The Borrowers and Guarantor,
jointly and severally, also will indemnify and hold Lenders harmless against any
and all losses, claims, damages or liabilities to any such person in connection
with or as a result of either this arrangement or any matter referred to in this
Agreement or the other Credit Documents, except to the extent that any such
loss, claim, damage or liability results from the gross negligence or bad faith
of Lenders in performing their obligations under this Agreement. If for any
reason the foregoing indemnification is unavailable to Lenders or insufficient
to hold them harmless, then the Borrowers and Guarantor, jointly and severally,
shall contribute to the amount paid or payable by Lenders as a result of such
loss, claim, damage or liability in such proportion as is appropriate to reflect
an equitable allocation of the liability on the basis of the relative economic
interests of the Borrowers and Guarantor and their respective stockholders on
the one hand and Lenders on the other hand in the matters contemplated by this
Agreement, as well as the relative fault of the Borrowers, Guarantor and Lenders
with respect to such loss, claim, damage or liability and any other relevant
equitable considerations. The reimbursement, indemnity and contribution
obligations of the Borrowers and Guarantor under this paragraph shall be in
addition to any liability which the Borrowers and Guarantor may otherwise have,
shall extend upon the same terms and conditions to any affiliate of Lenders and
the partners, officers, directors, agents, employees and controlling persons (if
any), as the case may be, of Lenders or any such affiliate, and shall be binding
upon and inure to the benefit of any successors, assigns, heirs and personal
representative of the Borrowers, Guarantor, Lenders, any such affiliate and any
such person. The Borrowers and Guarantor also agree that neither Lenders nor any
affiliates, partners, officers, directors, agents, employees or controlling
persons of Lenders shall have any liability to the
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Borrowers or Guarantor or any person asserting claims on behalf of or in right
of same or any other person in connection with or as a result of either this
arrangement or any matter referred in this Agreement or the other Credit
Documents except to the extent that any losses, claims, damages, liabilities or
expenses incurred by the Borrowers or Guarantor result from the gross negligence
or bad faith of Lenders in performing their obligations under this Agreement.
Borrowers' and Guarantor's obligations under this Section 9.3 shall survive
repayment of the Loan or any termination of the Borrowers' or Guarantor's
Obligations under the Credit Documents.
SECTION 9.4 Amendments and Waivers. Any provision of this Agreement,
or any of the other Credit Documents to which the Borrowers are a party, may be
amended or waived if, but only if, such amendment or waiver is in writing and is
signed by the Borrowers and Lenders.
SECTION 9.5 Successors and Assigns; Representations of Lenders.
(a) Successors and assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns except that the Borrowers may not assign or transfer any of their rights
or obligations under this Agreement without the prior written consent of
Lenders. Each of AMRESCO and ▇▇▇▇▇▇▇ ▇▇▇▇▇ may assign all or any part of the
Loan made by it to an "accredited investor" (as defined in Regulation D under
the Securities Act of 1933, as amended) which extends credit or buys loans in
the ordinary course of its businesses (an "Eligible Assignee") upon notice to
Agent and the Borrowers and consent of ▇▇▇▇▇▇▇ Sachs or AMRESCO, respectively
(such consent not to be required in the case of an assignment to an affiliate of
the Lender and in any event not to be unreasonably withheld). Upon the execution
and delivery of an assignment and assumption agreement, (1) the assignee
thereunder shall become a party hereto and to the extent that rights and
obligations hereunder have been assigned to it, shall have the rights and
obligations of a Lender hereunder, and (2) the assigning Lender shall, to the
extent that rights and obligations hereunder have been assigned by it, and
assumed by such assignee, relinquish its rights and be released from its
obligations under this Agreement. Upon the effectiveness of any such assignment,
the Borrowers shall execute new notes in the form of the Notes to the assigning
Lender and the assignee reflecting their respective Pro Rata Shares of the Loan
and concurrently with receipt of such new notes the assigning Lender will return
to the Borrowers the existing Note. Lenders may also grant participations in the
Loan made by them. Lenders may also pledge their interest in their respective
Notes and their proportionate interest in the Collateral to a lender of such
Lender or such Lender's affiliates.
(b) Representations of Lenders. Each Lender initially party to this
Agreement hereby severally represents and agrees that each person that becomes a
Lender pursuant to an assignment permitted by this Section 9.5 upon its becoming
a Lender under this Agreement shall be deemed to severally represent and agree
that (1) it is a sophisticated commercial financial institution or "accredited
investor" (as defined in Regulation D under the Securities Act of 1933,
-53-
as amended), in each case, which makes loans in the ordinary course of its
business; (2) it is making its Loan and acquiring its Note for its own account
in the ordinary course of its business and without a view to distribution of the
Loan or the Note within the meaning of the federal securities laws; (3) it has
received such financial or other information about the Borrowers and their
business as such Lender deems necessary and appropriate; and (4) it shall not
transfer or assign all or any part of its Loan or Note except to an Eligible
Assignee (as defined in Section 9.5(a)), and any such transfer or assignment
shall be made in accordance with all applicable laws, rules and regulations.
SECTION 9.6 Counterparts; Integration; Effectiveness. This Agreement
may be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. It is
the intention of each of the parties hereto that the Original Credit Agreement
be amended and restated so as to preserve the perfection and priority of all
security interests securing indebtedness and obligations under the Original
Credit Agreement and the other Credit Documents, that all Obligations of the
Borrowers and the Pledgors hereunder and thereunder shall be secured by the
Credit Documents, and that this Agreement shall not constitute a novation of the
obligations and liabilities existing under the Original Credit Agreement or be
deemed to evidence or constitute repayment of all or any portion of any such of
the Obligations. The parties hereto further acknowledge and agree that this
Agreement constitutes an amendment of the Original Credit Agreement made under
the terms of Section 9.4 thereof. This Agreement shall become effective upon the
execution of a counterpart hereof by each Borrower and Lenders and receipt by
Borrowers and Agent of written or telephonic notification of such execution and
authorization of delivery thereof; provided that, unless and until all of the
conditions set forth in Section 3.1 hereof have been satisfied or waived in
accordance with Section 9.4 of the Original Credit Agreement, the Original
Credit Agreement shall remain in full force and effect without giving effect to
the amendments set forth herein, all as if this Agreement had never been
executed and delivered. Telefaxed signatures on this Agreement will be effective
as originals.
SECTION 9.7 Governing Law; Jurisdiction.
(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
(EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH THEREIN) SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
(b) JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT OR THE
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OTHER CREDIT DOCUMENTS MAY BE TRIED AND LITIGATED IN THE STATE OF NEW YORK, OR,
AT THE SOLE OPTION OF LENDERS, IN ANY OTHER COURT IN WHICH LENDERS INITIATE
LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS JURISDICTION OVER THE SUBJECT
MATTER AND PARTIES IN CONTROVERSY. TO THE EXTENT THEY MAY LEGALLY DO SO, THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF
FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS
BROUGHT IN ACCORDANCE WITH THIS SECTION 9.7(b) AND STIPULATE THAT ANY SUCH COURT
SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE
PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT
OF OR RELATED TO THIS AGREEMENT, OR THE OTHER CREDIT DOCUMENTS. SERVICE OF
PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWER MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THEIR
ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 9.1 HEREOF. THE PARTIES HERETO
ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS SHALL
FOR ALL PURPOSES BE DEEMED TO HAVE BEEN ENTERED INTO IN THE STATE OF NEW YORK.
(c) WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS. The scope of
this waiver is intended to be all-encompassing of any and all disputes that may
be filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. The parties hereto each (1)
acknowledge that this waiver is a material inducement for the parties to enter
into a business relationship, that the parties hereto have already relied on
this waiver in entering into this Agreement or accepting the benefits thereof,
as the case may be, and that each will continue to rely on this waiver in their
related future dealings, and (2) further warrant and represent that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, OR MODIFICATIONS OF THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 9.8 Survival of Warranties. All agreements (including
without limitation the provisions of Section 9.3) and the representations and
warranties made herein shall survive the execution and delivery of this
Agreement.
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SECTION 9.9 Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 9.10 Maximum Interest Rate. Notwithstanding anything to the
contrary contained in the Notes or this Agreement, the Borrowers shall not be
obligated to pay, and Lenders shall not be entitled to charge, collect, receive,
reserve, or take interest (it being understood that interest shall be calculated
as the aggregate of all charges which constitute interest under applicable law
that are contracted for, charged, reserved, received, or paid) in excess of the
maximum rate permitted by law. During any period of time in which the interest
rates specified herein exceed the maximum rate permitted by law, interest shall
accrue and be payable at such maximum rate; provided that if the interest rate
declines below the maximum rate permitted by law, interest shall continue to
accrue and be payable at the maximum rate permitted by law (so long as there
remains any unpaid principal) until the interest that has been paid under this
Agreement or the Notes equals the amount of interest that would have been paid
if interest had at all times accrued and been payable at the applicable interest
rates specified in this Agreement. If from any circumstances whatsoever,
fulfillment of any provision of the Notes, or this Agreement or of any other
document pertaining hereto or thereto, shall involve transcending the limit of
validity prescribed by law for the collection or charging of interest, then ipso
facto, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances Lenders shall ever receive anything
of value as interest or deemed interest by applicable law under the Notes, this
Agreement, any of the other Credit Documents or any other document pertaining
hereto, thereto or otherwise an amount that would exceed the maximum rate
permitted by law, such amount that would be excessive interest shall be applied
to the reduction of the principal amount owing under the Notes or on account of
any other indebtedness of the Borrowers to Lenders, and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
of such indebtedness, such excess shall be refunded to the Borrowers. In
determining whether or not the interest paid or payable with respect to any
indebtedness of the Borrowers to Lenders, under any specified contingency,
exceeds the maximum rate permitted by law, the Borrowers and Lenders shall, to
the maximum extent permitted by applicable law, (a) characterize any
non-principal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effects thereof, (c) amortize, prorate,
allocate and spread the total amount of interest throughout the actual term of
such indebtedness such that it does not exceed the maximum amount permitted by
applicable law, and/or (d) allocate interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a rate
greater than that permitted by applicable law.
SECTION 9.11 Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
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SECTION 9.12 Marshaling; Payments Set Aside. Neither Agent nor any
Lender shall be under any obligation to marshal any assets in favor of the
Borrowers or any other party or against or in payment of any or all of the
Obligations. To the extent any Borrower makes a payment or payments to Agent or
Lenders (or to Agent for the benefit of Lenders), or Agent or Lenders enforce
any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, or other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
SECTION 9.13 Public Announcement. Upon Closing of the Loan, Lenders
are authorized in their discretion to issue news releases and at its own expense
to publish "tombstone ads" and other announcements in newspapers, trade journals
and other appropriate media, containing information about the Loan as may be
deemed noteworthy by Lenders, including without limitation the legal and trade
name of the Borrowers, the amount of the Loan and the name, nature and location
of the Collateral.
SECTION 9.14 Further Assurances and Release By Lenders. Upon payment
in full of the Obligations, as herein provided, this Credit Agreement and each
of the other Credit Documents shall terminate and the Lenders shall transfer and
deliver, or cause to be transferred and delivered, to the Borrowers all Stock,
and all certificates and evidences of title to said Stock, or any other
Collateral, and, at the Borrowers' sole expense, shall execute and deliver to
the borrowers such termination statements or such other instruments and further
assurances as the Borrowers' reasonably may request acknowledging satisfaction
and discharge of the Obligations and this Agreement and each of the other Credit
Documents, with the exception of the Guaranty.
ARTICLE X
AGENT
SECTION 10.1 Appointment. AMRESCO is hereby appointed Agent
hereunder and under the other Credit Documents and each Lender hereby authorizes
Agent to act as its agent in accordance with the terms of this Agreement and the
other Credit Documents. Agent agrees to act upon the express conditions
contained in this Agreement and the other Credit Documents, as applicable. The
provisions of this Article X are solely for the benefit of Agent and Lenders.
The Borrowers, Pledgors and Guarantor shall have no rights as third party
beneficiaries of any of the provisions hereof. In performing its functions and
duties under this Agreement, Agent shall act solely as an agent of Lenders and
does not assume and shall not be
-57-
deemed to have assumed any obligation towards or relationship of agency or trust
with or for the Borrowers.
SECTION 10.2 Powers and Duties; General Immunity.
(a) Powers: Duties Specified. Each Lender irrevocably authorizes
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Credit Documents as are
specifically delegated or granted to Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. Agent shall have only those duties and responsibilities that are
expressly specified in this Agreement and the other Credit Documents. Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents, affiliates or employees. Agent shall not have, by reason of this
Agreement or any of the other Credit Documents, a fiduciary relationship in
respect of any Lender; and nothing in this Agreement or any of the other Credit
Documents, expressed or implied, is intended to or shall be so construed as to
impose upon Agent any obligations in respect of this Agreement or any of the
other Credit Documents except as expressly set forth herein or therein.
(b) Exculpatory Provisions. Neither Agent nor any of its officers,
directors, employees or agents shall be liable to Lenders for any action taken
or omitted by Agent under or in connection with any of the Credit Documents
except to the extent caused by Agent's gross negligence or willful misconduct.
Agent shall be entitled to refrain from any act or the taking of any action
(including the failure to take an action) in connection with this Agreement or
any of the other Credit Documents or from the exercise of any power, discretion
or authority vested in it hereunder or thereunder unless and until Agent shall
have received instructions in respect thereof from Lenders and, upon receipt of
such instructions from Lenders, Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power, discretion or
authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (1) Agent shall be entitled to rely, and shall be
fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for the
Borrowers), accountants, experts and other professional advisors selected by it;
and (2) no Lender shall have any right of action whatsoever against Agent as a
result of Agent acting or (where so instructed) refraining from acting under
this Agreement or any of the other Credit Documents in accordance with the
instructions of Lenders.
(c) Agent Entitled to Act as Lender. The agency hereby created shall
in no way impair or affect any of the rights and powers of, or impose any duties
or obligations upon, Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loan, Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not performing the duties and functions delegated to it
-58-
hereunder, and the term "Lender" or "Lenders" or any similar term shall, unless
the context clearly otherwise indicates, include Agent in its individual
capacity.
(d) No Responsibility for Certain Matters. Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or any
other Credit Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statements or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Agent to Lenders or by or on behalf of
the Borrowers to Agent or any Lender in connection with the Credit Documents and
the transactions contemplated thereby or for the financial condition or business
affairs of the Borrowers or any other Person liable for the payment of any
Obligations, nor shall Agent be required to ascertain or inquire as to the
performance or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Credit Documents or as to the use of the
proceeds of the Loan or as to the existence or possible existence of any Event
of Default or Default.
(e) Representations and Warranties. No Responsibility For Appraisal
of Creditworthiness. Each Lender represents and warrants that it has made its
own independent investigation of the financial condition and affairs of the
Borrowers in connection with the making of the Loan hereunder and that it has
made and shall continue to make its own appraisal of the creditworthiness of the
Borrowers. Agent shall not have any duty or responsibility, either initially or
on a continuing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other information
with respect thereto other than the information provided by the Borrowers
hereunder, and Agent shall not have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
SECTION 10.3 Right to Indemnity. Each Lender, in proportion to its
Pro Rata Share, severally agrees to indemnify Agent, to the extent that Agent
shall not have been reimbursed by the Borrowers for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, reasonable counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in exercising its powers,
rights and remedies or performing its duties hereunder or under the other Credit
Documents or otherwise in its capacity as Agent in any way relating to or
arising out of this Agreement or the other Credit Documents; provided that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. If any indemnity
furnished to Agent for any purpose shall, in the opinion of Agent, be
insufficient or become impaired, Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
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SECTION 10.4 Successor Agent. Agent may resign at any time by giving
30 days' prior written notice thereof to Lenders and the Borrowers, and Agent
may be removed at any time with or without cause by an instrument or concurrent
instruments in writing delivered to the Borrowers and Agent and signed by
Lenders. Upon any such notice of resignation or any such removal, Lenders shall
have the right, upon five Business Days' notice to the Borrowers, to appoint a
successor Agent. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, that successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent and the retiring or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Agent, the provisions of this
Article X shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
SECTION 10.5 Collateral Documents. Each Lender hereby further
authorizes Agent, on behalf of and for the benefit of Lenders, to enter into
each Credit Document granting a security interest in Collateral to Lenders and
to be the agent for and representative of Lenders under each Credit Document
granting a security interest in Collateral to Lenders and each Lender agrees to
be bound by the terms of each Credit Document granting a security interest in
Collateral; provided that Agent shall not (a) enter into or consent to any
amendment, modification, termination or waiver of any provision contained in any
such Credit Document or (b) release any Collateral (except as otherwise
expressly permitted or required pursuant to the terms of this Agreement or the
applicable Credit Document), in each case without the prior consent of Lenders;
provided further, however, that, without further written consent or
authorization from Lenders, Agent may execute any documents or instruments
necessary to release any Lien encumbering any item of Collateral that is the
subject of a sale or other disposition of assets permitted by this Agreement or
to which Lenders have otherwise consented. Notwithstanding anything contained in
any of the Credit Documents to the contrary, the Borrowers, Agent and each
Lender hereby agree that (aa) no Lender shall have any right individually to
realize upon any of the Collateral under any Credit Document, it being
understood and agreed that all rights and remedies under the Credit Documents
granting security interests in Collateral may be exercised solely by Agent for
the benefit of Lenders in accordance with the terms hereof and thereof, and (bb)
in the event of a foreclosure by Agent on any of the Collateral pursuant to a
public or private sale, Agent or any Lender may be the purchaser of any or all
of such Collateral at any such sale and Agent, as agent for and representative
of Lenders (but not any Lender or Lenders in its or their respective individual
capacities unless Lenders shall otherwise agree in writing) shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such public sale. to
use and apply any of the Obligations as a credit on account of the purchase
price for any Collateral payable by Agent at such sale.
SECTION 10.6 Apportionment of Payments. All payments of interest,
principal and fees received by Agent from the Borrowers or other cash proceeds
of the Loan, the Collateral or the Guaranty received by the Agent shall be
apportioned among Lenders
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proportionately to each Lender's Pro Rata Share (irrespective of any directions
or designation by the Borrowers to the contrary). Agent shall promptly
distribute to each Lender, at it address set forth in Section 9.1 or at such
other address as Lender may request, its Pro Rata Share of all such payments.
SECTION 10.7 Delivery of Notices and Reports. Agent shall promptly
upon receipt thereof deliver to each Lender copies of all notices, financial
information, reports, documents and other information delivered to Agent by the
Borrowers pursuant to the Credit Documents.
SECTION 10.8 Control By Lenders. Notwithstanding anything herein or
in any Credit Document to the contrary, with respect to any actions required or
permitted to be taken by Lenders or by Agent at the direction of Lenders
(including without limitation approvals, consents, waivers, amendments,
acceleration, and any exercise of remedies) under this Agreement or any other
Credit Document, "Lenders" shall be deemed to mean: (a) all Lenders, with
respect to any such action which (1) reduces the principal amount of the Loan or
decreases the interest rate borne by the Loan, (2) postpones the Maturity Date
or any date upon which interest is payable, (3) releases the Liens on the
Collateral other than as permitted under the Credit Documents or releases the
Guaranty, (4) changes any Lender's Pro Rata Share or (5) amends or modifies this
Section 10.8; and (b) Lenders holding 51% of the outstanding amount of the Loan,
with respect to all other such actions.
SECTION 10.9 Ratable Sharing. Lenders hereby agree among themselves
that if any of them shall, whether by voluntary payment, by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Credit
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Credit
Documents (collectively, the "Aggregate Amounts Due" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (1) notify Agent and each other Lender of
the receipt of such payment and (2) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from each seller of a
participation simultaneously upon the receipt by such seller of its portion of
such payment) in the Aggregate Amounts Due to the other Lenders so that all such
recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion
to the Aggregate Amounts Due to them; provided that if all or part of such
proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of the
Borrowers or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest.
-61-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year
first above written.
Borrowers:
ARB FINANCE - ONE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
NORTHLAND BROADCASTING, LLC
By: Northland Management, Inc., a Virginia
corporation, Managing Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
READING RADIO, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MISSOURI BROADCASTING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
NORTHERN COLORADO RADIO, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
TRI-STATE BROADCASTING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
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CMB II, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
▇▇ ▇▇, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MICHIGAN NEWSPAPERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
GRAPH ADS PRINTING, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
GLADWIN NEWSPAPERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CADILLAC NEWSPAPERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
MIDLAND BUYER'S GUIDE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
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CMN ASSOCIATED PUBLICATIONS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MICHIGAN DISTRIBUTION CO., INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MICHIGAN
DISTRIBUTION CO., L.P.
By: Central Michigan Distribution Co., Inc.
Its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
ST. ▇▇▇▇▇ NEWSPAPERS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
NCR II, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
NCR III, LLC
By: NCR II, Inc., a Virginia corporation, Managing
Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
-64-
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
TSB III, LLC
By: Tri-State Management, Inc., a Virginia
corporation, Managing Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
TSB IV, LLC
By: Tri-State Management, Inc., a Virginia
corporation, Managing Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
HURON NEWSPAPERS, LLC
By: Huron Management, Inc., a Virginia corporation,
Managing Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
HURON P.S., LLC
By: Huron Management, Inc., a Virginia corporation,
Managing Member
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
-65-
LENDERS:
AMRESCO FUNDING CORPORATION
a Delaware corporation, as a Lender and as Agent
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
a Bermuda limited partnership, as a Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Authorized Signatory
-66-
EXHIBITS AND SCHEDULES
Schedule 1.1(24) Borrowers' Certificate
Schedule 1.1(100) Permitted Third Party Debt Service
Schedule 2.1(a) Lenders' Original Loan Amounts
Schedule 2.2 Disbursement Authorization and Schedule
Schedule 2.8 Call Option Price
Schedule 4.1 Legal Status
Schedule 4.6 Litigation Schedule
Schedule 4.9(b) FCC Licenses
Schedule 4.10 Ownership of Borrowers
Schedule 4.11(b) Real Property Interests - Owned/Leased
Schedule 4.13 Real Property Leases and Transmitter Related Leases
Schedule 4.14 Default Conditions - Other Obligations
Schedule 4.18 PBGC Liabilities
Schedule 4.21 Environmental Matters/Existing PCBs
Schedule 4.25 Capitalized Leases
Schedule 4.26 Operating Leases
Schedule 5.3(e) Monthly Covenant Compliance Certificate
Schedule 5.3(f) Annual Covenant Compliance Certificate
Schedule 5.15 Affiliates' Inter-Company Accounts Receivable
Schedule 6.1 Permitted Debt
Schedule 6.2 Permitted Liens
Schedule 6.16 Net Operating Income Levels
Exhibit A - Acknowledgment and Ratification Agreement
Exhibit B - Security Agreement
Exhibit C - Pledge of Membership Interest in LLC
Exhibit D - Pledge Agreement Covering Stock
Schedule 1.1(24)
BORROWERS' CERTIFICATE
The undersigned do hereby certify that the following is true and correct:
1. This Borrowers' Certificate is made pursuant to Section [3.1(g) or
3.3(o)] of that certain Amended and Restated Credit Agreement ("Credit
Agreement") dated as of September 30, 1997, and executed by and among
Borrowers and Lenders (all capitalized terms used herein shall have the
meanings ascribed to them under the terms of the Credit Agreement).
2. We are the duly elected_______ and _______ of the Borrowers.
3. Each Person signing this Borrowers' Certificate in a representative
capacity hereby certifies that such Person has read the Credit Agreement
and has made or has caused to be made such examination or investigation
necessary to make this Borrowers' Certificate.
4. Each of the conditions set forth in Section [3.1 or 3.3] of the Credit
Agreement has been fully complied with except as otherwise disclosed to
and agreed to in writing by Lenders.
5. No Borrower is in default of any material term, covenant or condition
under any Credit Document.
6. No event has occurred, or would result from the making of the [Closing
Date Advances or Additional Advances] and the application of the proceeds
thereof, that would constitute a Default or an Event of Default.
7. There has been no change in the financial condition of any of the
Borrowers since the previous Financial Statements provided by the
Borrowers to Agent dated [insert date] that would constitute or give rise
to a Material Adverse Effect with respect to Borrowers taken as a whole.
8. Each Borrower has performed in all material respects all agreements and
satisfied all conditions that are required under the Credit Documents to
be performed or satisfied on or before the date of the funding of the
[Closing Date Advance(s) or Additional Advance(s)] except as otherwise
disclosed to and agreed to in writing by Agent.
9. All representations and warranties contained in the Credit Agreement and
the other Credit Documents are true and correct in all material respects
as of the [date of funding the Closing Date Advances or date of funding
the Additional Advance(s)] though made on and as of such date, except to
the extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were true
and correct in all material respects on and as of such earlier date.
10. [The [identify appropriate Acquisition purchase agreement] has not been
materially modified or amended since Lender's approval dated [insert
date] except as follows: [insert description of amendments or
modifications].]
11. There has been no change to the "call letters" for the Radio Stations
except as follows: [insert any new call letters].
IN WITNESS WHEREOF, the Borrowers have caused this Borrowers' Certificate to be
duly executed by their respective authorized officers as of [date].
BORROWERS:
ARB FINANCE - ONE, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
NORTHLAND BROADCASTING, LLC
By: Northland Management, Inc., a Virginia
corporation, Managing Member
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
READING RADIO, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MISSOURI BROADCASTING, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
NORTHERN COLORADO RADIO, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
TRI-STATE BROADCASTING, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CMB II, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
▇▇ ▇▇, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MICHIGAN NEWSPAPERS, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
GRAPH ADS PRINTING, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
GLADWIN NEWSPAPERS, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CADILLAC NEWSPAPERS, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
MIDLAND BUYER'S GUIDE, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CMN ASSOCIATED PUBLICATIONS, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MICHIGAN DISTRIBUTION CO.,
INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
CENTRAL MICHIGAN
DISTRIBUTION CO., L.P.
By: Central Michigan Distribution Co., Inc.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
ST. ▇▇▇▇▇ NEWSPAPERS, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
NCR II, INC.
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
NCR III, LLC
By: NCR II, Inc., a Virginia corporation,
Managing Member
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
TSB III, LLC
By: Tri-State Management, Inc., a Virginia
corporation, Managing Member
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
TSB IV, LLC
By: Tri-State Management, Inc., a Virginia
corporation, Managing Member
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
HURON NEWSPAPERS, LLC
By: Huron Management, Inc., a Virginia
corporation, Managing Member
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
HURON P.S., LLC
By: Huron Management, Inc., a Virginia
corporation, Managing Member
By:
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Schedule 1.1(100)
Permitted Third Party Debt Service
(a) Debt service payments by CMB II to Town and Country
Communications, Inc., not to exceed the aggregate amount of $36,400 plus
reasonably related costs per Fiscal Year;
(b) Debt service payments by ▇▇ ▇▇ to QB Broadcasting, Inc., not to
exceed the aggregate amount of $109,800 plus reasonably related costs per Fiscal
Year;
(c) Debt service payments by Tri-State to Owensboro National Bank
not to exceed the aggregate amount of $125,000 plus reasonably related costs per
Fiscal Year;
(d) Debt service payments by St. ▇▇▇▇▇ to ▇▇▇▇▇▇▇ Field and ▇▇▇▇▇▇▇
▇. ▇▇▇▇ not to exceed the aggregate amount of $l10,000 plus reasonably related
costs per Fiscal Year; and
(e) Debt service payments by NCR III, LLC to Onyx Broadcasting,
Inc., and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ not to exceed the aggregate amount of $240,000 plus
reasonably related costs per Fiscal Year.
SCHEDULE 2.1(a)
Lender's Original Loan Amounts
AMRESCO:
Initial Interest Add'l Interest Total Due
Note Date Principal as of 9/30/97 as of 9/30/97 as of 9/30/97
--------- --------- ------------- ------------- -------------
02/06/96 $ 4,000,000.00 $ 38,666.67 $ 312,277.78 $ 4,350,944.45
05/21/97 2,000,000.00 19,333.33 40,333.33 2,059.666.66
07/25/97 2,000,000.00 19,333.33 20,472.22 2,039.805.55
---------------- ------------ ------------- ----------------
$ 8,000,000.00 $ 77,333.33 $ 373,083.33 $ 8,450,416.66
▇▇▇▇▇▇▇ SACHS:
Initial Interest Add'l Interest
Note Date Principal as of 9/30/97 as of 9/30/97 Total Due
--------- --------- ------------- ------------- ---------
02/06/96 $ 36,000,000.00 $ 348,000.01 $2,810,500.00 $ 39,158,500.01
05/21/97 6,000,000.00 58,000.00 121,000.00 6,179,000.00
07/25/97 6,000,000.00 58,000.00 61,416.67 6,119,416.67
---------------- ------------ ------------- ----------------
$ 48,000,000.00 $ 464,000.01 $2,992,916.67 $ 51,456,916.68
SCHEDULE 2.2
Disbursement Authorization and Schedule
Upon funding of the Loan, Lenders are authorized to disburse the Loan proceeds
as follows:
Recipient Purpose Amount
--------- ------- -------
1. Borrowers Capital Expenditure Reserve Fund, $ 9,547,666.66
purchase of the HPS Assets, purchase
of KTRR, authorized distribution to
Guarantor and Borrowers' working
capital
2. ▇▇▇▇▇▇▇ ▇▇▇▇▇, Allocation for Original ▇▇▇▇▇▇▇ Sachs $51,456,916.68
as Lender Notes
3. AMRESCO, Allocation for Original AMRESCO Notes $ 8,450,416.66
as Lender
4. AMRESCO, Expense Deposit, Agent's Fee and $ 545,000.00
as Agent Lenders' Loan Fee --------------
$70,000,000.00
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, as authorized
signatory for all Borrowers
Schedule 2.8
Call Option Price
Period(Months) Percentage
-------------- ----------
0-6 104.0
7 103.8
8 103.6
9 103.4
10 103.2
11 103.0
12 102.8
13 102.6
14 102.4
15 102.2
16 102.0
17 101.8
18 101.6
19 101.4
20 101.2
21 101.0
22 100.8
23 100.6
24 or after 100.5
Schedule 4.1
Legal Status/Ownership of Borrowers/
Issued and Outstanding Shares or Interests
State of Authorized Shares Issued/
Corporation Incorporation Shares Outstanding Owner Business
----------- ------------- ---------- -------------- ----- --------
ARB Finance - One, Inc. Virginia 1000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ Finance of Affiliates
Cadillac Newspapers, Inc. Virginia 2000 shs common 100 shs Central Michigan Newspapers, Inc. Newspaper Publishing
Central Michigan Distribution Co., Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc. Newspaper Publishing
Inc.
Central Michigan Newspapers, Inc. Virginia 2000 shs common 1000 shs CMN Holding, Inc. Newspaper Pub1ishing
Central Missouri Broadcasting, Inc. Virginia 1000 shs common 1000 shs ▇▇▇▇ ▇. ▇▇▇▇▇ Radio Broadcasting
CMB II, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ (pledged to secure Radio Broadcasting
Town and Country Communications -
purchase money)
CMN Associated Publications, Inc. Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc. Newspaper Publishing
Gladwin Newspapers, Inc. Virginia 2000 shs common 100 shs Central Michigan Newspapers, Inc. Newspaper Publishing
Graph Ads Printing, Inc. Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc. Newspaper Publishing
Midland Buyer's Guide, Inc. Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc. Newspaper Publishing
▇▇ ▇▇, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ Pledged to Q.B. Radio Broadcasting
Broadcasting, Ltd. - purchase
money)
Northern Colorado Radio, Inc. Virginia 1000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ Radio Broadcasting
Reading Radio, Inc. Virginia 2000 shs common 2000 shs ▇▇▇▇▇ Radio, Inc. Radio Broadcasting
Tri-State Broadcasting. Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ Radio Broadcasting
St. John's Newspapers, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ (pledged to Wood) Newspaper Publishing
NCR II, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ (pledged to Onyx Radio Broadcasting
Broadcasting, Inc.)
LIMITED LIABILITY COMPANIES
Company State of Formation Members Business
------- ------------------ ------- --------
Northland Broadcasting, LLC Virginia Northland Holdings, LLC, a Virginia limited liability company Radio Broadcasting
(99%); Northland Management, Inc., a Virginia corporation (1%)
- Manager
TSB III, LLC Virginia Tri-State Holdings, LLC, a Virginia limited liability company Radio Broadcasting
(99%); Tri-State Management, Inc., a Virginia corporation (1%)
- Manager
TSB IV, LLC Virginia Tri-State Holdings, LLC, a Virginia limited liability company Radio Broadcasting
(99%); Tri-State Management, Inc., a Virginia corporation (1%)
- Manager
Huron Newspapers, LLC Virginia Huron Holdings, LLC, a Virginia limited liability company Newspaper
(99%); Huron Management, Inc., a Virginia corporation (1%) - Publishing
Manager
Huron P.S., LLC Virginia Huron Holdings, LLC, a Virginia limited liability company Newspaper
(99%); Huron Management, Inc., a Virginia corporation (1%) - Publishing
Manager
NCR III, LLC Virginia NCH II, LLC, a Virginia limited liability company (99%);
NCR II, Inc., a Virginia corporation (1 %) - Manager
LIMITED PARTNERSHIP
State of Authorized Shares Issued/
formation States Outstanding Owner Business
--------- ------ ----------- ----- --------
Central Michigan Distribution Co., Virginia N/A N/A Central Michigan Distribution Newspaper Publishing
L.P., a Virginia limited partnership Co., Inc., General Partner, and
▇▇▇▇▇ Newspapers, Inc., Limited
Partner
Schedule 4.6
Litigation Schedule
The only litigation currently pending in which any Borrower, Pledgor or
Guarantor is a party defendant or counterclaim or cross-claim defendant is as
follows:
Pinnacle Broadcasting d/b/a WYNG, and ▇▇▇▇▇ ▇▇▇▇▇▇ a/k/a ▇▇▇▇▇ ▇▇▇▇▇ ▇.
▇▇▇▇▇ Media, Inc. d/b/a WKDQ Radio, Vanderburgh, Indiana Superior Court,
Cause No. 82D03-9705-CP-1491.
This case involves a claim for proprietary rights to use the name "▇▇▇▇▇
▇▇▇▇▇" for an on-air personality in the Evansville, Indiana-Owensboro, Kentucky
market area. Settlement is imminent and will result in no payment of monetary
relief or damages by the named defendants. The defendants will agree only to
discontinue use of the name "▇▇▇▇▇ ▇▇▇▇▇" for an on-air personality at radio
station WKDQ.
Schedule 4.9(b)
I. Radio Stations Owned by Borrowers
Central Missouri Broadcasting, Inc. Reading Radio, Inc.
KLIK-AM 950 & KTXY-FM 106.9 WIOV-AM 1240 & WIOV-FM 105.1
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇▇ County) (Lancaster County)
▇▇▇▇▇▇ (▇▇▇) ▇. ▇▇▇▇▇, General Manager ▇▇▇▇▇ ▇▇▇▇▇▇▇, General Manager
CMB II, Inc. TRI-State Broadcasting, Inc.
KATI-FM 94.3 WOMI-AM 1490 & WBKR-FM 92.5
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇▇ County) (Daviess County)
▇▇▇▇▇▇ (▇▇▇) ▇. ▇▇▇▇▇, General Manager ▇▇▇▇ ▇▇▇▇▇▇, General Manager
Northern Colorado Radio, Inc. TSB IV, LLC
KUAD FM 99 WKDQ-FM (99.5)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Weld County) ▇▇▇▇ ▇▇▇▇▇▇, General Manager
▇▇▇ ▇▇▇▇▇▇, General Manager
TSB III, LC
Northland Broadcasting, LC WVJS-AM 1420 & WSTO-FM 96.1
WEBC-AM 560 & KKCB-FM 105.1 ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (Daviess County)
(St. Louis County) ▇▇▇▇ ▇▇▇▇▇▇, General Manager
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, General Manager
▇▇ ▇▇, Inc.
KLDJ-FM 101.7
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(St. Louis County)
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, General Manager
1
II. Borrowers' FCC Overall License Summary
A. READING RADIO, INC.
1. WIOV-AM; Reading, PA
1240 kHz; Class C-lkw-nondirectional-unlimited hours
File # BZ-910919AC
Eff: 10/29/92
Exp. 8/01/98
2. WIOV-FM; Ephrata, PA
105.1 MHz; Class B; 25kw-nondirectional-unlimited hours; 212 meters HAAT
File # BLH-910708KA
Eff: 7/27/92
Exp: 8/1/98
3. KGF678
450.45 MHz and 455.45 MHz
RP Auxiliary Remote Pickup. Associated station: WIOV-FM
Power: 100 ▇▇▇▇▇
File # 9403480733
Eff: 5/20/94
Exp: 8/1/98
4. WNTY44I
22025 MHz
Business microwave. Associated station: WIOV-FM
File # 9502711684
Eff: 4/4/95
Exp: 4/4/2000
2
5. WNTY442
22325 MHz and 22175 MHz
Business microwave. Associated station: WIOV-FM
File # 9502711685
Eff: 4/4/95
Exp: 4/4/2000
6. WNTY443
23525 MHz
Business microwave. Associated station: WIOV-FM
File # 9502711686
Eff: 4/4/95
Exp: 4/4/2000
7. WNTY444
23225 MHz and 23375 MHz
Business microwave. Associated station: WIOV-FM
File # 9502711687
Eff: 4/4/95
Exp: 4/4/2000
8. WIOV-FM
105.1 MHz-booster construction permit
FM broadcast booster station
5kw nondirectional
File # BPFTB-941206TC
Eff: 4/28/95
Exp: 10/26/96
Application to extend construction permit filed October 25, 1996.
BMPFTB-961025TL
Application to modify construction permit filed October 25, 1996.
3
B. CENTRAL MISSOURI BROADCASTING, INC.
1. KTXY-FM; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇.▇ MHz; class "C"; 100kw non-directional unlimited hours; 381 meters
HAAT
License # BLH-900727KA
Grant: 1/31/97
Exp: 2/01/05
2. KLIK-AM; ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇ ▇▇▇; 5kw day non-directional; .5kw night directional. Unlimited
hours.
File # BZ-900205AA
Grant: 1/31/97
Exp: 2/01/05
3. KPK31O
450.01 MHz
RP Auxiliary Remote Pick Up. Affiliated station KTXY
Power: 30 ▇▇▇▇▇
File # 900525MA
Eff: 10/24/90
Exp: 02/01/05
4. WLO--653
949.00 MHz
Auxiliary Broadcast Aural STL. Unlimited hours. Affiliated with KTXY
Power: 10 ▇▇▇▇▇
File # BPLST-880921MB
Eff: 6/15/89
Exp: 2/01/05
5. KB-55702
450.15MHz and 450.25 MHz
Auxiliary Broadcast R/P Mobile System. Associated with KTXY.
Power: 15 ▇▇▇▇▇
File # BLNRE-880714MB
Eff: 9/26/88
Exp: 2/01/05
4
6. WMU-454
951.5 MHz
Auxiliary Broadcast Aural Intercity Relay. Associated with KTXY
Power: 5 ▇▇▇▇▇
File # BPLIC-930923MD
Eff: 12/16/93
Exp: 2/01/05
7. WLO-538
948 MHz
Auxiliary Broadcast Aural STL. Associated with KLIK.
Power: 6 ▇▇▇▇▇
File # BPLST-880921MA
Eff: 2/07/89
Exp: 2/01/05
8. KEH-584
161.70, 161.76 MHz
Remote Pick Up base Mobile System. Associated with KLIK, KTXY.
Power: 90 ▇▇▇▇▇
File # BLRE-28345
Eff: 8/29/77
Exp: 2/01/05
5
C. CMBII, Inc.
1. KATI-FM; California, MO
94.3 MHz
Class "C2"; 50 kw nondirectional; 150 meters HAAT; unlimited hours
Grant: 1/28/97
Expiration: 2/01/05
6
D. NORTHLAND BROADCASTING, LLC
1. KKCB-FM; Duluth, MN
105.1 MHz
100 kw nondirectional; 790 feet HAAT; unlimited hours
File # BLH-830311AG
Eff: 3/27/97
Exp: 4/01/05
2. WEBC-AM; Duluth, MN
▇▇▇ ▇▇▇
▇▇▇ fulltime operation directional; unlimited hours
File # BR-620
Eff: 3/27/97
Exp: 4/01/05
3. WAX-32
949.0 MCS
Aural STL; associated with WEBC
Power: 8 ▇▇▇▇▇
File # BLST-487
Eff: 5/28/69
Exp: 4/01/05
4. WLG-708
945.00 MHz
Auxiliary Broadcast Aural Intercity Relay; Associated with WAVC-FM
Power: 7 ▇▇▇▇▇
File # BPLIC-850912MH
Eff: 1/17/86
Exp: 4/01/05
5. WHE-957
455.35 MHz
Auxiliary Broadcast R/P Base Mobile System; Associated with WEBC
Power: 25 ▇▇▇▇▇
File # BPLRE-820809MH
Eff: 11/16/82
Exp: 4/01/05
7
6. KZ-2668
161.67; 161.76 MHz
Remote Pickup Mobile System; Operated with WEBC
Power: 30 ▇▇▇▇▇
Eff: 4/01/80
Exp: 4/01/05
7. KPJ-206
455.98 MHz
Auxiliary Broadcast R/P Base Station; associated
with WAVC
Power: 1 watt
Eff: 12/04/85
Exp: 4/01/05
8
E. NBII, INC.
1. KLDJ-FM; Duluth, MN
101.7 MHz
Class "C2"; 18.5kw; 251 meters HAAT; unlimited hours
License File # BLH-960709KB
Eff: 9/24/96
Exp: 4/01/05
*2 WMU-681 946.625; 946.3750
Auxiliary Broadcast Aural Intercity Relay; Associated with KLXK-FM
Power: 10 ▇▇▇▇▇
File # ▇▇▇▇-▇▇▇▇▇▇▇▇
Eff: 4/08/94
Exp: 4/01/05
* License in FCC data base in name of prior licensee. Request for transfer
filed.
9
F. NORTHERN COLORADO RADIO, INC.
1. KUAD-FM; Windsor, CO
99.1 MHz
100 kw nondirectional; 660 feet HAAT; unlimited hours
File # BRH7912O3WA
Eff: 7/22/92
Exp: 4/01/97
Renewal Application Pending
2. KXZ-922 (NOTE: NO LONGER IN USE)
450.85 MHz
Auxiliary Broadcast R/P Automatic Relay
Power: 25 ▇▇▇▇▇
File # BPLRE-840716MU
Eff: 9/26/84
Exp: 4/01/97
Renewal Application Pending
3. KTB-597 (NOTE: NO LONGER IN USE)
450.85; 455.85 MHz
Auxiliary Broadcast R/P Base Station
Power: 10 ▇▇▇▇▇
File # BPLRE-840716MT
Eff: 9/26/84
Exp: 4/01/97
Renewal Application Pending
4. WAY-650
949.00 MHz
Auxiliary Broadcast Aural STL
Power: 8 ▇▇▇▇▇
File # BPLST-84718MV
Eff: 9/26/84
Exp: 4/01/97
Renewal Application Pending
10
G. TRI-STATE BROADCASTING, INC.
1. WBKR-FM; Owensboro, KY
92.5 MHz
100 kw fulltime nondirectional; 319 meters HAAT
License # BLH-870121KD
Eff: 7/26/89 (renewed on 7/26/96)
Exp: 8/01/04
2. KB-97370
450.01 MHz
Auxiliary Broadcast - Telemetry Return Link for WBKR
Power: 1 watt
File # BLNRE-860923MB
Eff: 11/17/86
Exp: 8/01/04
3. WME-707
945.00 MHz
Auxiliary Broadcast Aural Intercity Relay; associated station WOMI & WBKR
Power: 7 ▇▇▇▇▇
File # BPLIC-910401MP
Eff: 8/06/91
Exp: 8/01/04
4. WLF-786
946.00 MHz
Auxiliary Broadcast Aural STL
Power: 10 ▇▇▇▇▇
File # BPLST-860923MA
Eff: 11/17/86
Exp: 8/01/04
5. KFZ-709
161.73; 161.64 MHz
Auxiliary Broadcast R/P Mobile System; associated with WBKR & WOMI
Power: 40 ▇▇▇▇▇
File # BMLRE-840709ME
Eff: 8/30/84
Exp: 8/01/04
11
6. WBKR
92.5 MHz
Auxiliary Antenna; 100 kw @ 115 meters HAAT
File # BLH-870127KC
Eff: 10/19/87
Exp: 8/01/04
7. WOMI
1490 kHz
Main & Auxiliary Transmitters for WOMI
File # BZ-9630
Power: 1 kw; unlimited hours
Eff: 4/27/78 (renewed on 7/26/96)
Exp: 8/01/04
8. KB-96030
450.45; 450.80 MHz
Auxiliary Broadcast R/P Mobile System; associated with WOMI & WBKR
Power: 5 ▇▇▇▇▇
File # BLNRE-91040MF
Eff: 8/06/91
Exp: 8/01/04
12
H. TSB IV, LLC
TSB IV, LLC owns the following FCC licenses as of the date of Closing:
1. WKDQ-FM Henderson, KY
99.5 Mhz
Station Operating License
File # BLH-881025KC
100 KW fulltime non-directional 300 meters HAAT
Effective: 7-26-96
Expires: 8-1-03
2. WLL-712
Studio-transmitter Link
FCC File # BPLST-881107MK
Frequency = 950.800 Mhz
Expires: 8-1-03 (renews with station license)
3. KPK-984
Transmitter-Studio Link
FCC File # BMLRE 890501MB
Frequency = 450.020 Mhz
Expires: 8-1-03
4. KC24820
R/P Mobile System (▇▇▇▇▇)
FCC File # BLNRE-91007MB
Frequency 166.250 Mhz
Expires: 8-1-03
5. KZH-855
R/P Base Unit (▇▇▇▇▇)
▇▇▇ ▇▇▇▇ # ▇▇▇▇-▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇.▇▇▇ ▇▇▇
▇▇▇▇▇▇▇: 8-1-03
6. KA-88941
R/P Mobile Unit (▇▇▇▇▇)
FCC File # BMLRE-850429MG
Frequency 455.350 Mhz
Expires: 8-1-03
13
I. TSB III, LLC
1. WVJS-AM ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇ kHz
Station Operating License
File #: BZ - 950120AA
Power: 5 kW day. 1 kW nites
Effective 8/1/96
Expires: 8/1/2003
2. WSTO-FM Owensboro, KY
96.1 MHz
100 kw fulltime non-directional. 1001 feet HAAT.
License file #: BLH-820601A0
Effective: 8/1/96
Expires: 8/1/2003
3. WHA-989
Studio-Transmitter Link
Associated Station: WSTO
FCC file #: BPLST-810604M5
Frequency: 948.0 MHz
Expires: 8/1/2003
4. WQB-232
Transmitter-Studio Link
Associated Station: WSTO
FCC file #: BPLRE-810604MP
Frequency: 455.01 MHz
Expires: 8/1/2003
5. KAJ-672
Remote Pick Up
Associated station: Both
FCC file #: ▇▇▇▇-▇▇▇▇▇▇▇▇
Frequency: 161.64, 153.29 MHz
Expires: 8/1/2003
6. KZ2523
Remote Pick Up
Associated station: Both
FCC file #: ▇▇▇▇-▇▇▇▇▇▇▇▇
Frequency: 450.05 MHz
Expires: 8/1/2003
14
7. KS2942
Remote Pick Up
Associated station: Both
FCC file #: ▇▇▇▇-▇▇▇▇▇▇▇▇
Frequency: 161.67 MHz
Expires: 8/1/2003
8. KC-27741
Remote Pick Up
Associated station: Both
FCC file #: 9402480694
Frequency: 450.25; 450.70; 455.25; 455.70 MHz
Expires: 8/1/2003
9. BLP-01162
LP Auxiliary Low Power
Associated station: Both
FCC file #: ▇▇▇▇▇▇▇▇▇▇
Frequency: 944.00; 952.00 MHz
Expires: 8/1/2003
10. KNEP-792
Business Band
Associated station: Both
FCC file #: 9603D02603 1
Frequency: 460.825; ▇▇▇-▇▇▇ ▇▇▇
▇▇▇▇▇▇▇: 8/1/03
11. KA64106
1B Business
Associated Station: Both
FCC File #: 9409R06062
Frequency: 154.54 MHz
Expires: 8/1/03
12. STATION LICENSE FOR AUXILIARY TRANSMITTER
WSTO
96.1MHz
100 kw; 340 FT HAAT
License #: BLH-830720AF
Expires: 8/1/2003
15
Schedule 4.10
Ownership of Borrowers/Pledgors
Issued and Outstanding Shares
CORPORATE BORROWERS
=================================================================================================================================
State of Authorized Shares Issued,
Borrower Corporation Incorporation Shares Outstanding Owner
=================================================================================================================================
ARB Finance - One, Inc. Virginia 1000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------------
Cadillac Newspapers, Inc. Virginia 2000 shs common 100 shs Central Michigan Newspapers, Inc.
---------------------------------------------------------------------------------------------------------------------------------
Central Michigan Distribution Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc.
Co., Inc.
---------------------------------------------------------------------------------------------------------------------------------
Central Michigan Newspapers, Virginia 2000 shs common 1000 shs CMN Holding, Inc.
Inc.
---------------------------------------------------------------------------------------------------------------------------------
Central Missouri Virginia 1000 shs common 1000 shs ▇▇▇▇ ▇. ▇▇▇▇▇
Broadcasting, Inc.
---------------------------------------------------------------------------------------------------------------------------------
CMB II, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ 1,000 (pledged to
secure Town and Country
Communications - purchase money)
---------------------------------------------------------------------------------------------------------------------------------
CMN Associated Publications, Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc.
Inc.
---------------------------------------------------------------------------------------------------------------------------------
Gladwin Newspapers, Inc. Virginia 2000 shs common 100 shs Central Michigan Newspapers, Inc.
---------------------------------------------------------------------------------------------------------------------------------
Graph Ads Printing, Inc. Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc.
---------------------------------------------------------------------------------------------------------------------------------
Midland Buyer's Guide, Inc. Virginia 1000 shs common 100 shs Central Michigan Newspapers, Inc.
---------------------------------------------------------------------------------------------------------------------------------
NB 11, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇ (pledged to Q. B.
Broadcasting, Ltd. - purchase money)
---------------------------------------------------------------------------------------------------------------------------------
Northern Colorado Radio, Inc. Virginia 1000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------------
Reading Radio, Inc. Virginia 2000 shs common 2000 shs ▇▇▇▇▇ Radio, Inc.
---------------------------------------------------------------------------------------------------------------------------------
Tri-State Broadcasting, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇ ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------------
St. John's Newspapers, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------------
NCR 11, Inc. Virginia 5000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇
=================================================================================================================================
LIMITED PARTNERSHIPS - BORROWERS
=================================================================================================================================
Limited Partnership State of Organization Partners Business
---------------------------------------------------------------------------------------------------------------------------------
Central Michigan Distribution, L.P. Virginia Central Michigan Distribution Co., Newspaper
Inc., General Partner and ▇▇▇▇▇ Publishing
Newspapers, Inc., Limited Partner
=================================================================================================================================
LIMITED LIABILITY COMPANIES - BORROWERS
=================================================================================================================================
Company State of Members Business
Organization
=================================================================================================================================
Northland Broadcasting, Virginia Northland Holdings, LLC, a Virginia limited Radio Broadcasting
LLC liability company (99%); Northland Management,
Inc., a Virginia corporation (1%) - Manager
---------------------------------------------------------------------------------------------------------------------------------
TSB III, LLC Virginia Tri-State Holdings, LLC, a Virginia limited Radio Broadcasting
liability company (99%); Tri-State Management,
Inc., a Virginia corporation (1%) - Manager
--------------------------------------------------------------------------------------------------------------------------------
TSB IV, LLC Virginia Tri-State Holdings, LLC, a Virginia limited Radio Broadcasting
liability company (99%); Tri-State Management,
Inc., a Virginia corporation (1%) - Manager
---------------------------------------------------------------------------------------------------------------------------------
NCR III, LLC Virginia NCH II, LLC, a Virginia limited liability company None
(99%); ▇▇▇ ▇▇, Inc., a Virginia corporation (1%)
- Manager
---------------------------------------------------------------------------------------------------------------------------------
Huron Newspapers, LLC Virginia Huron Holdings, LLC, a Virginia limited liability Newspaper
company (99%); Huron Management, Inc., a Publishing
Virginia corporation (1%) - Manager
---------------------------------------------------------------------------------------------------------------------------------
Huron P.S., LLC Virginia Huron Holdings, LLC, a Virginia limited liability Newspaper
company (99%); Huron Management, Inc., a Publishing
Virginia corporation (1%) - Manager
=================================================================================================================================
CORPORATE PLEDGORS
=================================================================================================================================
State of Authorized Shares Issued/
Pledgor Incorporation Shares Outstanding Owner
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Radio, Inc. Virginia 1000 shs common 1000 shs ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇ Newspapers, Inc. Virginia 70 shs S. Cum. Pfd. 1000 shs (voting) ▇▇▇▇ ▇. ▇▇▇▇▇ shs Class
200 shs Convert. Pfd. 150 shs (non-voting) A Common; 150 shs
1000 shs Class A Common Class B non-voting
2000 shs Class B Common
---------------------------------------------------------------------------------------------------------------------------------
Central Michigan Virginia 2000 shs common 1000 shs CMN Holding, Inc.
Newspapers, Inc.
---------------------------------------------------------------------------------------------------------------------------------
CMN Holding, Inc. Virginia 5000 shs Sr. Cum. Pfd. 1000 shs Class A Common ▇▇▇▇▇ Newspapers, Inc.
1000 shs Jr. Cum. Pfd.
1000 shs Class A Common
1000 shs Class B Common
---------------------------------------------------------------------------------------------------------------------------------
Northland Management, Virginia 5000 shs common 100 shs Northland Holdings,
Inc. Inc.
---------------------------------------------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ shs common 100 shs ▇▇▇▇▇ Media Holdings,
Holdings, Inc. Inc.
---------------------------------------------------------------------------------------------------------------------------------
Tri-State Management,
Inc. Virginia 5000 shs common 100 shs Tri-State Holdings,
Inc.
---------------------------------------------------------------------------------------------------------------------------------
Page 2
=================================================================================================================================
State of Authorized Shares Issued/
Pledgor Incorporation Shares Outstanding Owner
=================================================================================================================================
Tri-State holdings, Virginia 5,000 shs common 100 shs ▇▇▇▇▇ Media Holdings,
Inc. Inc.
---------------------------------------------------------------------------------------------------------------------------------
Huron Management, Virginia 5,000 shs common 100 shs Huron Holdings, Inc.
Inc.
---------------------------------------------------------------------------------------------------------------------------------
Huron Holdings, Inc. Virginia 5,000 shs common 100 shs ▇▇▇▇▇ Media Holdings,
Inc. Inc.
---------------------------------------------------------------------------------------------------------------------------------
NCR II, Inc. Virginia 5,000 shs common 100 shs ▇▇▇▇ ▇. ▇▇▇▇▇
=================================================================================================================================
LIMITED LIABILITY COMPANIES - PLEDGORS
=================================================================================================================================
State of
Pledgor Organization Members
---------------------------------------------------------------------------------------------------------------------------------
Northland Holdings, LLC ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Media Holdings, LLC, a Virginia limited liability company (99%);
Northland Management, Inc., a Virginia corporation (1%) - Manager
---------------------------------------------------------------------------------------------------------------------------------
Tri-State Holdings, LLC ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Media Holdings, LLC, a Virginia limited liability company (99%);
Tri-State Management, Inc., a Virginia corporation (1%) - Manager
---------------------------------------------------------------------------------------------------------------------------------
Huron Holdings, LLC ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Media Holdings, LLC, a Virginia limited liability company (99%);
Huron Management, Inc., a Virginia corporation (1 %) - Manager
---------------------------------------------------------------------------------------------------------------------------------
NCH II, LLC ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Media Holdings, LLC, a Virginia limited liability company (99%);
NCR II, Inc., a Virginia corporation (1%) - Manager
==================================================================================================================================
Schedule 4.11(b) - Real Property Interests - Owned/Leased
(Excluding leased sales offices)
Reading Radio, Inc.
Studio Owned Ephrara, PA
WIOV-AM Tower & Site Owned Reading, PA
WIOV-FM Tower Tower owned; land leased Ephrata, PA
Tri-State Broadcasting, Inc.
Studio Owned Owensboro National Bank Owensboro, KY
WOMI-AM Tower & Site Owned Owensboro National Bank Same as studio
WBKR-FM Tower & Site Owned Owensboro National Bank South of Owensboro, KY
Northern Colorado Radio, Inc.
Studio Owned (Subordinated 2nd) Windsor, CO
▇▇▇▇▇▇ ▇▇▇▇▇▇ (seller)
KUAD-FM Tower Tower owned; land leased ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ North of Windsor, CO
Central Missouri Broadcasting,
Inc.
Studio Leased Jefferson City, MO
KLIK-AM Tower Tower owned; land leased South of Jefferson City
KTXY Tower Space Leased West of Jefferson City
CMB II, Inc.
KATI-FM Tower Space Leased (Leasehold) ▇▇▇ ▇▇▇▇▇ West of Jefferson City,
(seller) MO
Northland Broadcasting, Inc.
Studio Owned Duluth, MN
WEBC-AM Tower & Site Owned Wisconsin - 10 miles cast
KKCB-FM Tower Space Leased Duluth, MN
NBII, Inc.
KLDJ-FM Tower Space Leased Leasehold) ▇▇ ▇▇▇▇▇▇▇▇▇ Duluth, MN
(seller)
Central Michigan Newspapers,
Inc.
5 N. Main Office Leased Mt. Pleasant, Ml
711 West ▇▇▇▇▇▇▇ Leased short term Mt. Pleasant, Ml
Alma unimproved lot Owned ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇ Sales Office Owned ▇▇▇▇▇▇▇, ▇▇
SCHEDULE 4.13
Real Property Leases and Transmitter Related Leases
(I) Existing Leases
Capital or Maturity Monthly
Company Lessor Description Operating Date Payment
==================================================================================================================================
CMB II ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ KATI-FM Tower Space Operating Mar 99 $1,100.00
CMBI Tower Company, Inc. FM Tower/Transmitter Capital Jul 00 12,500.00
CMBI ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ KLIK-AM Tower Site Operating Jan 00 575.00
CMBI ▇▇▇▇▇▇ ▇▇▇▇▇▇ Studio Building Operating Oct 98 3,996.00
CMNI ▇▇▇▇ ▇▇▇▇▇▇ Midland Sales Office Operating month to 593.00
month
CMNI ▇▇▇▇▇▇▇ Industrial Park Graph Ads Printing Operating Sep 97 4,550.00
Building month to
month
Extension
agreed to
CMNI ▇▇▇▇▇▇▇ ▇▇▇▇▇ Cadillac Sales Office Operating Apr 98 450.00
CMNI PX Investment CMN Building Capital Mar 00 3,850.00
CMNI ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Sales Office Operating May 01 1,303.00
▇▇ ▇▇ WDIO-TV KIDJ-FM Tower Space Operating Feb 99 740.00
NB, LLC Duluth Superior Educational TV KKSB-FM Tower Space Operating Aug 98 1,725.00
NCRI ▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇ KUAD-EM Tower Site Operating Apr 05 200.00
RRI Borough of Ephrata WIOV-FM Tower Site Operating Dec 04 433.00
▇▇ ▇▇ Tower Company, Inc. Transmitter & Technical Capital Apr 03 3,585.00
Equip.
ST. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Field St. ▇▇▇▇▇ sales office Operating Jun 99 500.00
TSB III, Owensboro On The Air, Inc. WSTO-FM Tower Site Operating Jul 2096. $1.00/
LLC yr
TSB III, Owensboro On The Air, Inc. WVJS-AM Tower Site Operating Jul 2096 $1.00/
LLC yr
Schedule 4.14
Default Conditions - Other Obligations
None
SCHEDULE 4.18
PBGC Liabilities
The employees of the various Borrowers are eligible to participate in the
▇▇▇▇▇ Media Company, Inc. Employee Profit Sharing Plan (401-K Plan), copies of
which have previously been provided to Lenders. Borrowers are unaware of any
direct or contingent, asserted or unasserted claim by PBGC, the IRS or the
Department of Labor with respect to such plan as of the date of Closing.
Schedule 4.21
Environmental Matters/Existing PCB's
1. Underground storage tanks ("UST's") for fuel for diesel generators
exist on the site of Central Missouri Broadcasting, Inc.'s KLIK-AM leased tower
site. These UST's belong to the Federal Emergency Management Agency (FEMA) and
are to be properly removed by FEMA, in accordance with applicable laws and
regulations.
2. UST's were formerly located on the land owned by Graph Ads, Inc. in
Alma, Michigan. These UST's have been properly removed, pursuant to applicable
laws and regulations.
3. Polychlorinated biphenyls (PCB's) are known to exist within equipment
owned by Borrowers at the following locations:
(a) Reading Radio, Inc. - WIOV-AM transmitter site in Reading, PA;
PCB's are contained in several 4" x 2" capacitors inside an old out of service
transmitter. The PCB's are contained within the transmitter cavity and are not
externally leaking.
(b) Northland Broadcasting, Inc. - WEBC-AM transmitter site in
Wisconsin. PCB's are contained within an old, out of service transmitter that is
not leaking.
Both of the transmitters referenced herein are disconnected from all
power sources and are non-functional. No other PCB's are known to exist at any
Borrower location.
4. Soil and sub-surface ground water contamination are known to exist at
the ▇▇▇▇▇▇▇ Industrial Park location leased by Central Michigan Newspapers, Inc.
The responsibility for clean-up of this site is not that of Central Michigan
Newspapers, Inc. under applicable state and federal laws.
Schedule 4.25 - Capital Leases
(Capital leases less than $500 per month omitted, other than
real estate, vehicle or transmitter related leases)
(I) Existing Capital Leases
Maturity Monthly
Company Lessor Description Date Payment
==================================================================================================================
CMBI Tower Company, Inc. FM Tower/transmitter Jul 00 $ 12,500
CMBI ▇▇▇▇ ▇▇▇▇▇ Ford 94 Ford Van Jan 98 447
CMBI ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ - ▇▇▇▇ Mtr. Crdt. 94 Ford Jan 98 447
CMNI Ryder 98 Navistar Truck and Dec 02 2,410
Stoughton Trailer
CMNI PX Investment CMN Building Mar 00 3,850
CMNI ▇▇▇▇▇▇ Inserting Machine May 98 2,513
▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ Equipment Lease Dec 98 655
NB, LLC Republic Leasing Broadcast Equipment May 00 584
NB, LLC Colonial Pacific Computer Equipment Jul 00 562
NB, LLC Citicorp Broadcast Equipment Jul 00 1,199
▇▇ ▇▇ Tower Company, Inc. Transmitter & Apr 03 3,585
Technical Equipment
CMNI Ryder GMC Van Apr 01 1,074
NCR Ameritech Leasing Phone System Jul 01 649
TSB Ameritech Leasing Phone System Nov 01 1,109
RRI Ameritech Leasing Phone System May 01 953
TSB IKON Color Copier Jul 02 1,564
(II) Omitted capital leases less than $500 per month and other capital
leases permitted under the Credit Agreement
SCHEDULE 4.26 - OPERATING LEASES
(Operating leases of less than $20,000 per year omitted, other than real estate,
vehicle or transmitter related leases)
(I) Existing Leases
Capital or Maturity Monthly
Company Lessor Description Operating Date Payment
==================================================================================================================================
CMB II ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ KATI-FM Tower Space Operating Mar 99 $ 1,100
CMBI ▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇▇▇ KLIK-AM Tower Site Operating Jan 00 575
CMBI ▇▇▇▇▇▇ ▇▇▇▇▇▇ Studio Building Operating Oct 98 3,996
CMNI ▇▇▇▇ ▇▇▇▇▇▇ Midland Sales Office Operating month to 593
month
CMNI ▇▇▇▇▇▇▇ Industrial Park Graph Ads Printing Operating Sep 97 4,550
Building month to
month
Extension
agreed to
CMNI ▇▇▇▇▇▇▇ ▇▇▇▇▇ Cadillac Sales Office Operating Apr 98 450
CMNI Ford Motor Credit 96 Ford Taurus Operating Dec 98 402
CMNI ▇▇▇▇▇▇▇ Ford 95 Lincoln Operating Dec 97 501
CMNI ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Sales Office Operating May 01 1,303
▇▇ ▇▇ WDIO-TV KLDJ-FM Tower Space Operating Feb 99 740
NB, LLC Duluth Superior Educational TV KKCB-FM Tower Space Operating Aug 98 1,725
NCRI ▇▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇ KUAD-FM Tower Site Operating Apr 05 ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ of Ephrata WIOV-FM Tower Site Operating Dec 04 433
ST. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Field St. ▇▇▇▇▇ sales office Operating Jun 99 500
TSB III, Owensboro On The Air, Inc. WSTO-FM Tower Site Operating Jul 2096 $l/yr
LLC
TSB III, Owensboro On The Air, Inc. WVJS-AM Tower Site Operating Jul 2096. $l/yr
LLC
CMBI GMAC 97 Pontiac Bonneville Operating Jan 99 $575
NCRI GMAC 95 Buick Regal Operating Oct 97 $401
(II) Omitted operating leases less than $20,000 per year and other leases
permitted under the Credit Agreement
Schedule 5.3 (C)
Monthly Covenant Compliance Certificate
[Letterhead of ▇▇▇▇▇ Media Company]
Dated: [insert current ▇▇▇▇]
AMRESCO Funding Corporation
Attn: ▇▇. ▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Covenant Compliance Certificate for Month Ended_____
Dear ▇▇. ▇▇▇▇▇▇▇:
The undersigned, acting on behalf of all of the Borrowers identified in that
certain Amended and Restated Credit Agreement (as amended, restated or modified
from time to time, the Credit Agreement") dated as of September 30, 1997, and
executed by and among Borrowers and the Lenders described therein, does hereby
certify, pursuant to Section 5.3(e) of the Credit Agreement:
1. Net Working Capital for the month ended ________, $_________________
199__, in the aggregate for all Borrowers as
compared to the minimum required amount of
$3,000,000.
2. Required Cumulative Monthly Income for the period $_________________
ended ________, 199__, in the aggregate for all
Borrowers.
3. Actual Cumulative Monthly Income for the period $_________________
ended ________, 199__, in the aggregate for all
Borrowers.
4. No Borrower is in default of any material term, covenant or condition
under any Credit Document.
(Capitalized terms used herein shall have the meanings set forth in the Credit
Agreement.)
By: ______________________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇, CFO/Treasurer for all of the Borrowers
Schedule 5.3(f)
Annual Covenant Compliance Certificate
[Letterhead of ▇▇▇▇▇ Media Company]
AMRESCO Funding Corporation
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Covenant Compliance Certificate for Fiscal Year Ended __________
Dear ▇▇. ▇▇▇▇▇▇▇:
The following Covenant Compliance Certificate for Fiscal Year End
______________, is hereby provided on behalf of the Borrowers pursuant to
Article V, Section 5.3(f) of that certain Amended and Restated Credit Agreement
(as amended, restated or otherwise modified from time to time, the "Credit
Agreement") dated as of September 30, 1997, by and among the Borrowers and
Lenders (all capitalized terms used herein shall have the meanings set forth in
the Credit Agreement).
Authorized/Covenant Actual
------------------- ------
Net Operating Income: $_____________ $__________
cash payments on Permitted Debt: $_____________ $__________
Authorized Capital Expenditures: $400,000 $__________
Affiliate Payments: $1,700,000 $__________
Increase over the prior Fiscal Year
End's aggregate accounts receivable
less than 120 days old $__________
Borrowers' Annual Surplus Cash: $__________
Total payment due to Lender pursuant
to Section 5.20 $__________
The foregoing is true and correct to the best of my knowledge.
Sincerely,
By: ______________________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇ (CFO/Treasurer for all of the Borrowers)
Schedule 5.15
Affiliate Inter-Company Accounts Receivable
Current
Borrowers: Balance
---------- -------
Central Missouri Broadcasting, Inc.
Promissory Note dated November 25, 1986 to ▇▇▇▇▇ Newspapers, Inc. $1,076,712
Promissory Note dared September 21, 1987 to ▇▇▇▇▇ Newspapers, Inc. 168,500
Reading Radio, Inc.
Promissory Note dated September 21, 1987 to ▇▇▇▇▇ Radio, Inc. 468,814
Promissory Note dated September 21, 1987 to ▇▇▇▇▇ Radio, Inc. 472,331
Northern Colorado Radio, Inc.
Promissory Note dated December 31, 1988 to ▇▇▇▇ ▇. ▇▇▇▇▇ 74,779
Promissory Note dated February 28, 1991 to ▇▇▇▇ ▇. ▇▇▇▇▇ 100,000
Central Michigan Newspapers, Inc.
Promissory Note dated June 14, 1989 to ▇▇▇▇▇ Newspapers, Inc. 241,000
Promissory Note dated February 8,1991 to ▇▇▇▇▇ Newspapers, Inc. 500,000
NCR II, Inc.
Promissory Note dared June 24, 1996 to ▇▇▇▇ ▇. ▇▇▇▇▇ 200,000
NCR III, Inc.
Promissory Note dared May 28, 1997 to ▇▇▇▇ ▇. ▇▇▇▇▇ 100,000
Balance of indebtedness of Borrowers to Subordinated Lenders is on open account
Schedule 6.1
Permitted Debt
(Debt obligations existing as of the Closing Date of loss
than $500.00 per month with balances of less than
$20,000 omitted, other than real estate, vehicle, or transmitter related debt)
1. Indebtedness secured by the Permitted liens described on Schedule 6.2 to
the Credit Agreement, and Capitalized Leases described on Schedule 4.25
(to the extent not included within the definition of Permitted Liens).
2. Indebtedness with respect to trade obligations and other normal accruals
in the ordinary course of business not yet due and payable or with respect
to which any Borrower is contesting in good faith the amount or validity
thereof by appropriate proceedings and then only to the extent such
Borrower has set aside on its books adequate reserves therefor.
3. Indebtedness arising as a result of guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions
in the ordinary course of Borrowers' business.
4. Affiliate Inter-Company Account Receivables as set forth on Schedule 5.15
hereto.
5. Obligations of Borrowers to Lenders under the terms of the Credit
Agreement.
6. The indebtedness referenced in the following Schedule and omitted debt
existing as of the Closing Date of less than $500.00 per month with
balance of less than $20,000.00:
Permitted Maturity Monthly As of
Company Lender Description Liens Date Payment 8/31/97
=============================================================================================
CNB II ▇▇▇ ▇▇▇▇▇ Consulting Unsecured May-2000 1,666
Agreement consulting agmt
CMB II ▇▇▇ ▇▇▇▇▇ Noncompete Unsecured May-2005 1,666 160,692
Agreement noncompete
agmt
CMBI ▇▇▇ ▇▇▇▇▇ Performance Unsecured Aug-2001 893 87,635*
Agreement mgmt incentive
agmt
CMNI ▇▇▇ ▇▇▇▇ Performance Contingent N/A N/A 640,000*
Agreement unsecured mgmt
incentive agent
Permitted Maturity Monthly As of
Company Lender Description Liens Date Payment 8/31/97
===============================================================================================
CMNI ▇▇▇▇ ▇▇▇▇▇▇▇ Performance Unsecured N/A N/A 1,785,000*
Agreement mgmt incentive
agmt
CMNI MacDonald Seller Unsecured Sep-2004 3,789 153,992*
Financing
RRI ▇▇▇▇ ▇▇▇▇ Performance Contingent N/A N/A 1,700,000*
Agmt unsecured mgmt
incentive agmt
SJN ▇▇▇▇▇▇▇ Promissory Unsecured May-2000 700 20,185*
Wood Note
NCR ▇▇▇▇▇▇ Performance Contingent N/A N/A 30,000*
▇▇▇▇▇▇ Agreement unsecured mgmt
agmt
* These sums reference current balances due under the individual management
incentive agreements. Additional sums will accrue pursuant to the terms of these
agreements. Any modifications to the agreements are subject to Lenders' prior
written consent.
Schedule 6.2- Permitted Liens
(Liens securing debt obligations of less than $500 per month existing as of the
Closing Date with balances of less than $20,000 omitted, other than
real estate, vehicle or transmitter related debt)
(1) All properly recorded and filed liens of record as to each Borrower
with the exception of liens in favor of Lenders, existing as of the date
of the Amended and Restated Credit Agreement, specifically including, but
not limited to the following:
Permitted Monthly As of
Company Lender Description Liens Payment 8-31-97
==============================================================================================================================
CMB II Jefferson Bank PMF Equipment $ 3,850 $ 153,593
CMB II Town & Country Seller Financing 1st Lien Note 3,033 209,721
Communications
CMB II Jefferson Bank Promissory Note Unsecured 3,155 141,614
CMBI Ford Motor Credit CL 94 Ford 447 3,881
CMBI Tower Company, Inc. CL FM Tower/Transmitter 12,500 370,545
CMBI Ford Motor Credit CL 94 Ford Van 447 4,571
CMNI M/S Building CL M/S Building 3,850 59,901
CMNI ▇▇▇▇▇ ▇▇ 98 Navistar Truck and 2,410 104,200
Stoughton Trailer
CMNI FirstBank PMF Imagesetter 3,713 62,055
CMNI ▇▇▇▇▇▇ ▇▇ Inserting Machine 2,513 16,923
▇▇ ▇▇ Al ▇▇▇▇▇▇▇▇▇▇ ▇▇ Equipment Lease 655 9,640
▇▇ ▇▇ QB Broadcasting, Inc. Seller Financing 1st Lien Note 9,074 628,118
NB, LLC Citicorp CL Broadcast Equipment 1,199 34,381
NB, LLC Colonial Pacific CL Computer Equipment 562 15,036
NB, LLC Republic Leasing CL Broadcast Equipment 584 14,973
NCRI ▇▇▇▇▇▇ ▇▇▇▇▇▇ Noncompete Agreement Subordinated 2nd 3,984 185,571
NCRI KUAD-FM, Inc. Seller Financing Subordinated 2nd 3,984 185,571
CMBI Exchange Bank PMF 96 Explorer 571 20,911
CMNI FirstBank PMF 96 Chevy Pickup 724 8,319
CMBI GMAC PMF 94 Chevy Van 459 3,975
▇▇ ▇▇ Tower Company, Inc. CL Transmitter & 3,585 174,021
Technical Equipment
NCRI Bank of Windsor PMF 1982 ▇▇▇▇▇▇▇ Bus 1,056 47,347
Permitted Monthly As of
Company Lender Description Liens Payment 8-31-97
==============================================================================================================================
NCRI ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ Mortgage 1st Mortgage on 995 18,440
Leasehold &
Improvements
TSBI Owensboro National Mortgage 1st Mortgage 10,300 800,000
Bank
NB, LLC Chrysler Credit PMF 95 Van 434 15,565
NB, LLC Toyota Motor Credit PMF 94 Jeep 493 17,804
NB, LLC Ford Motor Credit PMF 94 Explorer 625 1,205
TSBI Owensboro National PMF 95 GMC Van 495 13,282
Bank
St. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Seller Financing 1st Lien Note 4,625 339,599
St. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ Noncompete Agreement 1st Lien Note 2,083 117,276
St. ▇▇▇▇▇ ▇▇▇ & ▇▇▇▇▇▇▇▇ Field Prior Stock Redemption 1st Lien Note 1,742 49,273
CMNI First of America PMF 1996 Jeep 698 13,532
CMNI ▇▇▇▇▇ ▇▇ GMC Van 1,074 38,401
NCR Ameritech Leasing CL Telephone System 649 24,187
TSB Ameritech Leasing CL Telephone System 1,109 56,776
TSB IKON CL Color Copier 1,564 49,902
RRI Ameritech Leasing CL Telephone System 953 40,763
NB, LLC GMAC PMF 98 Chevy Tahoe 1,037 22,212
NCR II ▇▇▇▇▇▇ ▇▇▇▇▇▇/ Time Brokerage Stock of NCR II 19,000 (open)
Onyx Broadcasting, Agreement
Inc.
TSB IV Lincolnland Bank PMF 97 Ford Explorer 383 18,000
PMF = Purchase Money Financing
CL = Capital Lease
(2) Any immaterial liens of parties in possession.
(3) The rights of any lessor under any lease of any of the Borrowers that
exists as of Closing.
(4) All encroachments, overlaps, deficiencies in quantity, boundary line
disputes, unrecorded easements, or any other matters not of record that might be
disclosed by an accurate survey of the real property owned or leased by the
Borrowers, and minor imperfections of title and encumbrances, if any, that are
not substantial in amount, do not, in any case or in the aggregate, materially
detract from the value of the asset or property subject thereto, and which are
immaterial in their effect upon the Borrower or upon use of such assets or
property.
(5) Liens on any part of the Borrower's property for current taxes or
assessments not delinquent or in default.
(6) Liens securing obligations of Borrowers to Lenders under the Credit
Documents.
Schedule 6.16
Net Operating Income Levels
($ in Thousands)
Month Monthly NOI Cumulative NOI
----- ----------- --------------
08/97 800 800
09/97 800 1,600
10/97 850 2,450
11/97 900 3,350
12/97 900 4,250
01/98 500 4,750
02/98 600 5,350
03/98 800 6,150
04/98 900 7,050
05/98 950 8,000
06/98 950 8,950
07/98 900 9,850
08/98 900 10,750
09/98 900 11,650
10/98 900 12,550
11/98 900 13,450
12/98 900 14,350
01/99 600 14,950
02/99 600 15,550
03/99 850 16,400
04/99 900 17,300
05/99 950 18,250
06/99 950 19,200
07/99 950 20,150
08/99 950 21,100
09/99 950 22,050
EXHIBIT A
ACKNOWLEDGMENT AND RATIFICATION AGREEMENT
THIS ACKNOWLEDGMENT AND RATIFICATION AGREEMENT ("Ratification Agreement"),
dated as of __________, is made and entered into by and among AMRESCO FUNDING
CORPORATION, a Delaware corporation ("AMRESCO"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT
PARTNERS L.P., a Bermuda limited partnership, (collectively referred to as
"Lenders"); AMRESCO, as agent for Secured Party ("Agent"); and [NEW ACQUISITION
COMPANY] ("Acquisition Company") [ANY PLEDGOR OF STOCK OR MEMBERSHIP INTEREST IN
ACQUISITION COMPANY] ("Pledgor"), with reference to the following facts:
A. Lenders have entered into that certain Amended and Restated Credit
Agreement dated as of September 30, 1997, (as hereafter amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") with the Borrowers
described in the Credit Agreement. The Borrowers are Affiliates of Acquisition
Company.
B. All terms not otherwise defined herein shall have the meanings ascribed
to them in the Credit Agreement.
C. Acquisition Company is an "Acquisition Company" as defined Section 1.1
of the Credit Agreement.
D. Pursuant to the terms of the Credit Agreement, Lenders extended the
Loan in the amount of $70,000,000 to Borrowers.
E. Pursuant to Section 2.9 and Section 3.3 of the Credit Agreement,
Lenders have agreed to make Additional Advances to Borrowers in the amount of
$__________ to be used to acquire the [Newspaper or Radio Station]. Said
[Newspaper or Radio Station] is an "Acquisition" and ["Newspaper" or "Radio
Station"] within the meaning of Section 1. 1 of the Credit Agreement.
F. It is a condition precedent to the making of the Additional Advances by
Lenders under the Credit Agreement that Acquisition Company shall have ratified
and agreed to be bound by the terms, conditions and covenants set forth in the
Credit Agreement and become a Borrower thereunder and that Acquisition Company
shall have granted to Lenders a security interest in the [Newspaper or Radio
Station] as security for Acquisition Company's obligations owing to Lenders
arising under the Credit Agreement and the other Credit Documents referred to
therein.
G. It is a further and additional condition precedent to the making of
Advances by Lenders under the Credit Agreement that Acquisition Company shall
have ratified and
-1-
agreed to be bound as a Borrower by the terms, conditions and covenants set
forth in the Subordination Agreement described in the Credit Agreement as Credit
Document No. (111).
NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth, and for other
good and valuable consideration, the parties hereto agree as follows:
1. Ratification of Recitals. The parties hereto acknowledge and agree that
the Recitals set forth above are true and correct and that said Recitals are
specifically incorporated herein by reference and made a part of this
Ratification Agreement.
2. Ratification of Terms, Covenants and Conditions of the Credit
Agreement. Acquisition Company hereby ratifies and agrees to be bound by all of
the terms, covenants, and conditions set forth in the Credit Agreement,
including without limitation the definitions set forth in Article I, the credit
provisions set forth in Article II, the conditions to borrowing set forth in
Article III, the representations and warranties set forth in ARTICLE IV, all
affirmative covenants set forth in ARTICLE V, all negative covenants set forth
in ARTICLE VI, the default provisions set forth in ARTICLE VII, the limitations
on transfer set forth in ARTICLE VIII, the notice, jurisdiction and waiver
provisions set forth in ARTICLE IX, and the Agent provisions set forth in
ARTICLE X thereof. Upon execution and delivery of this Ratification Agreement,
Acquisition Company shall be deemed a "Borrower" for all purposes under the
Credit Agreement in the same manner and to the same extent as if Acquisition
Company had executed the Credit Agreement and Acquisition Company hereby assumes
all rights and obligations of a Borrower under the Credit Agreement, including
without limitation, joint and several liability with all other Borrowers for all
Obligations under the Credit Agreement.
3. Acknowledgment Regarding Representations and Warranties. Acquisition
Company makes each of the representations and warranties set forth in Article IV
of the Credit Agreement and the Schedules referred to therein and supplemented
as follows: Schedules 4.1 4.9(b), 4.10, 4.11(b), 4.13, 4.25, and 4.26 of the
Credit Agreement shall be supplemented by adding thereto the information set
forth in Annex A hereto.
4. Ratification of Terms Covenants and Conditions of Subordination
Agreement. Acquisition Company hereby ratifies and agrees to be bound by all of
the terms, covenants, and conditions set forth in the Subordination Agreement as
a Borrower thereunder.
5. MISCELLANEOUS.
(a) All parties hereto agree that the miscellaneous provisions set
forth in ARTICLE IX of the Credit Agreement apply to the rights, obligations and
duties of the parties under the terms of this Ratification Agreement.
-2-
(b) Upon the effectiveness of this Ratification Agreement, Lenders
are authorized in their discretion to issue news releases and at their own
expense to publish "tombstone ads" and other announcements in newspapers, trade
journals and other appropriate media, containing information about the
Additional Advances described in Recital E above as may be deemed noteworthy by
Lenders, including without limitation the legal and trade name of Acquisition
Company, the amount of the Advance referred to above, and the name, nature and
location of the Acquisition.
IN WITNESS WHEREOF, the parties hereto have caused this Ratification Agreement
to be duly executed by their respective authorized officers as of the day and
year first above written.
"ACQUISITION COMPANY"
[ACQUISITION COMPANY]
By: _____________________________
Title:___________________________
"PLEDGOR"
[Managing Member or Holder of Stock]
By: ____________________________
Title:___________________________
-3-
"LENDERS" and "AGENT"
AMRESCO FUNDING CORPORATION,
a Delaware corporation, individually and as agent
By: ______________________________________
Its: _____________________________________
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P., a
Bermuda limited partnership
By:_______________________________________
Authorized Signatory
Address for Notices for Lenders and Agent:
AMRESCO Funding Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ - ▇▇ 342
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-4-
EXHIBIT B - SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of _________ is entered into among [NEW
ACQUISITION COMPANY] ("Debtor"), as a borrower, and AMRESCO FUNDING CORPORATION,
a Delaware corporation, a Delaware corporation ("AMRESCO"), and ▇▇▇▇▇▇▇ SACHS
CREDIT PARTNERS L.P., a Bermuda limited partnership (collectively referred to as
"Secured Party"), as lenders, and AMRESCO, as agent for Secured Party ("Agent")
in light of the following facts:
WHEREAS, Debtor and Secured Party have entered into that certain
Acknowledgment and Ratification Agreement of even date herewith ("Ratification
Agreement"), pursuant to which Debtor has agreed to be bound by the terms,
covenants, conditions and representations set forth in that certain Amended and
Restated Credit Agreement dated as of September 30, 1997, (as hereafter amended,
supplemented or otherwise modified from time to time, the "Credit Agreement");
and
WHEREAS, Debtor has agreed to grant to Secured Party a security interest
in all of the Collateral (as hereinafter defined) owned by Debtor as security
for Debtor's obligations owing to Secured Party arising under the Credit
Agreement and the Credit Documents referred to therein.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth, and for other
good and valuable consideration, the parties hereto agree as follows:
1. DEFINITIONS
As used in this Agreement, all initially capitalized terms used but
not defined herein shall have the meaning ascribed thereto in the Credit
Agreement. In addition, the following terms shall have the following meanings.
"Accounts" shall mean any and all of Debtor's presently existing and
hereafter rising accounts and rights to payment, except those evidenced by
instruments or chattel paper, arising out of the sale or lease of goods or the
rendition of services by Debtor, irrespective of whether earned by performance.
"Agreement" shall mean this Security Agreement, any concurrent or
subsequent exhibits or schedules to this Security Agreement, and any extensions,
supplements, amendments, or modifications to or in connection with this Security
Agreement, or to any such schedules or exhibits.
"Credit Agreement" shall have the meaning set forth in the recitals
to this Agreement, the terms of which are incorporated herein by this reference.
1
"Code" shall mean the New York Uniform Commercial Code, and any and
all terms used in this Agreement which are defined in the Code shall be
construed and defined in accordance with the meaning and definition ascribed to
such terms under the Code, unless otherwise defined herein.
"Collateral" shall mean any and all of Debtor's Accounts, Equipment,
Inventory, General Intangibles, Negotiable Collateral, and Debtor's Books,
whether now existing or hereafter acquired or created, and any proceeds or
products of any of the foregoing, including proceeds of insurance covering the
Collateral or any portion thereof, and any and all Accounts, Equipment,
Inventory, General Intangibles, Negotiable Collateral, cash, money, deposit
accounts, or other tangible or intangible property, resulting from the sale or
other disposition of the Accounts, Equipment, Inventory, General Intangibles, or
Negotiable Collateral, or any portion thereof or interest therein, and the
substitutions, replacements, additions, accessions, products and proceeds
thereof, including without limitation proceeds of sale of the Radio Stations and
all insurance policies relating thereto and proceeds thereof.
"Debtor" shall have the meaning set forth in the introduction to
this Agreement.
"Debtor's Books" shall mean any and all Debtor's presently existing
and hereafter acquired books and records, including all records (including
maintenance and warranty records), ledgers, computer programs, disc or tape
files, printouts, runs, and other computer prepared information indicating,
summarizing, or evidencing the Accounts, Equipment, Inventory, General
Intangibles, or Negotiable Collateral.
"Designated Agreements" shall mean that certain [describe purchase
agreement] and that certain [describe LMA or TBA], each dated as of ________,
199__, by and between Debtor, as purchaser, and _____________, as seller, for
the purchase and sale of the assets relating to the ownership or operation of
the Radio Stations or the Newspaper [as appropriate].
"Equipment" shall mean any and all of Debtor's presently existing
and hereafter acquired machinery, equipment, furniture, furnishings, fixtures,
tools, motors, motor vehicles, rolling stock, jigs, and other goods (other than
Inventory, farm products, and consumer goods), of every kind and description,
wherever located, including, without limitation, printing presses, amplifiers,
transmitters, cables, antennas, radio broadcast facilities, connections, towers,
and studios, together with any and all parts, improvements, additions,
attachments, replacements, accessories, and substitutions thereto or therefor,
and all other rights of Debtor relating thereto, whether in the possession and
control of Debtor, or in the possession and control of a third party for the
account of Debtor.
"Event of Default" shall have the meaning set forth in the Credit
Agreement.
2
"FCC" shall mean the Federal Communications Commission or any
governmental authority succeeding to any of its functions.
"General Intangibles" shall mean any and all of Debtor's presently
existing and hereafter acquired or arising general intangibles and other
intangible personal property, including rights under licensing and distribution
agreements, interest in any joint ventures or partnerships, contract rights,
including without limitation all rights under those certain Designated
Agreements (as defined above), noncompetition covenants, choses in action,
causes of action, all Licenses (as hereinafter defined) (but only to the extent
that Debtor is now or hereafter permitted by law to grant a security interest in
such authorizations, permits and licenses), and all rights incident or
appurtenant to such Licenses, including, without limitation, the right to
receive all proceeds derived from or in connection with the sale, assignment or
transfer of the Licenses, income tax refunds, purchase orders, customer lists,
monies due or recoverable from pension funds, computer software, magnetic media,
electronic data processing files, systems and programs, deposit accounts,
certificates of deposit, rights to refunds or indemnification, claims for tax or
other refunds against any city, county, state, provincial, or federal government
or any agency or authority or other subdivision thereof, guaranties, contracts,
lease agreements, licenses, know-how, sales and operating plans, copyrights,
patents, trademarks, service-marks, logos, trade names, trade secrets, and the
good will associated therewith.
"Inventory" means any and all of Debtor's presently existing and
hereafter acquired goods of every kind and description, held for sale or lease
or to be furnished under a contract of service or which have been so leased or
furnished, wherever located, including amplifiers, transmitters, cables,
antennas, connections, and towers.
"Licenses" means all commercial broadcast station licenses, permits
and other certificates required by (a) the FCC, (b) the Communications Act of
1934, as amended, (c) 47 CFR Part 73, or (d) any other governmental entity in
connection with the ownership and operation of the Radio Stations and granted or
assigned to Debtor by the FCC or any other public or governmental agency or
regulatory body for the operation of the Radio Stations.
"Negotiable Collateral" shall mean any and all of Debtor's presently
existing and hereafter acquired or arising letters of credit, advises of credit,
certificates of deposit, notes, drafts, instruments, documents, and chattel
paper, as well as Debtor's Books relating to any or all of the foregoing.
"Newspaper(s)" means [insert description or name of newspaper]
together with all of the Assets of Debtor used in the ownership and operation
thereof.
3
"Obligations" means any and all debts, liabilities, obligations, or
undertakings owing by Borrowers to Secured Party arising under, advanced
pursuant to, or evidenced by the Credit Agreement, the Credit Documents to which
Borrowers are a party, or this Agreement, whether direct or indirect, absolute
or contingent, due or to become due, voluntary or involuntary, whether now
existing or hereafter arising (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code 11 U.S.C. ss.362(a)), and including all principal, interest
(including interest that but for the filing of a petition in bankruptcy would
accrue on such obligations whether or not allowed as a claim), indemnities and
all Secured Party's Expenses which Debtor is required to pay or reimburse
pursuant to this Agreement, the Credit Agreement, the Credit Documents, or by
law.
"Radio Stations" means the broadcast radio stations [insert
Acquisition description], and any other broadcast radio station owned or
operated by any Borrower from time to time, together with all of the assets of
Debtor used in the ownership and operation thereof and all Licenses with respect
thereto.
"Secured Party" shall have the meaning set forth in the introduction
to this Agreement.
"Secured Party's Expenses" shall mean any and all reasonable costs
or expenses required to be paid by Debtor under this Agreement or by Borrowers
under the Credit Agreement or other Credit Documents which are paid or advanced
by Lenders and all reasonable costs and expenses of Lenders, including their or
its reasonable attorneys' fees and expenses, incurred or expended to correct any
default or enforce any provision of this Agreement, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, irrespective of whether a sale is
consummated; and all reasonable costs and expenses of suit incurred or expended
by Lenders, including its reasonable attorneys' fees and expenses in enforcing
or defending this Agreement, irrespective of whether suit is brought.
2. CONSTRUCTION
Unless the context of this Agreement clearly requires otherwise,
references to the plural include the singular, references to the singular
include the plural, the part includes the whole, "including" is not limiting,
and "or" has the inclusive meaning represented by the phrase "and/or."
References in this Agreement to "determination" by Secured Party include
reasonable estimates (absent manifest error) by Secured Party, as applicable (in
the case of quantitative determinations) and reasonable beliefs (absent manifest
error) by Secured Party, as applicable (in the case of qualitative
determinations). The words "hereof," "herein," "hereby," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article,
4
section, subsection, exhibit, and schedule references are to this Agreement
unless otherwise specified.
3. CREATION OF SECURITY INTEREST
Debtor hereby grants to Secured Party a continuing first priority
security interest in all presently existing and hereafter acquired or arising
Collateral owned by Debtor, except to the extent of the Permitted Liens
described in Schedule 6.2 of the Credit Agreement, in order to secure the prompt
payment and performance of all of the Obligations by Borrowers. Such security
interest in the Collateral shall attach to all Collateral without further act on
the part of Secured Party or Debtor.
4. FURTHER ASSURANCES
4.1 Debtor shall execute and deliver to Agent, concurrently with
Debtor's execution of this Agreement, and from time to time at the request of
Agent, all financing statements, continuation financing statements, fixture
filings, security agreements, chattel mortgages, assignments, and all other
documents that Agent may reasonably request, in form reasonably satisfactory to
Agent, to perfect and maintain perfected Secured Party's security interests in
the Collateral and in order to consummate fully all of the transactions
contemplated by this Agreement and the Credit Agreement. Debtor hereby
irrevocably makes, constitutes, and appoints Agent (and Agent's officers,
employees, or agents) as Debtor's true and lawful attorney with power to sign
the name of Debtor on any of the above-described documents or on any other
similar documents which need to be executed, recorded, or filed, and to do any
and all things necessary in the name and on behalf of Debtor in order to
perfect, or continue the perfection of, Secured Party's security interests in
the Collateral. The power of attorney granted under this Section 4.1 is coupled
with an interest and shall be irrevocable until all of the Obligations have been
paid in full, the Credit Agreement terminated, and Debtor's duties hereunder
have been discharged in full.
4.2 Without limiting the generality of the foregoing Section 4.1 or
any of the provisions of the Credit Agreement, Debtor will: (a) at the request
of Agent, ▇▇▇▇ conspicuously all chattel paper and all records pertaining to the
Collateral with a legend, in form and substance satisfactory to Agent,
indicating that the Collateral is subject to the security interest granted
hereby; (b) at the request of the Agent, appear in and defend any action or
proceeding which may affect Debtor's title to, or the security interest of Agent
in, any of the Collateral; and (c) upon demand of Agent, allow inspection of
Collateral by Agent or persons designated by Agent at any time during normal
business hours and, provided that no Event of Default has occurred and is
continuing, upon three (3) Business Days' notice to Debtor.
5
4.3 With respect to that portion of the Collateral which is
evidenced by, or consists of, Negotiable Collateral (other than drafts received
in the ordinary course of business so long as no Event of Default has occurred
and is continuing), Debtor shall, immediately upon request by Agent, endorse
(where appropriate) and assign such Negotiable Collateral over to Agent, and
deliver to Agent actual physical possession of such Negotiable Collateral to
Agent together with any instruments of transfer or assignment, all in form and
substance satisfactory to Agent, in order to fully perfect the security interest
therein of Secured Party.
4.4 Debtor acknowledges and agrees that, upon the occurrence of an
Event of Default which remains uncured during any applicable Cure Period, the
primary source of repayment of the Obligations is through the sale of the
Collateral, including the Radio Stations and the Licenses. In accordance with
the provisions of Section 7.2(c) of the Credit Agreement, upon the occurrence
and during the continuance of the Event of Default(s) described therein, Debtor
agrees to take all actions and do all things requested in connection with an
application to the FCC for the grant, assignment, or transfer of the Licenses to
a receiver acceptable to Agent and appointed by a court of competent
jurisdiction, or to Agent's nominee or to a purchaser of the Collateral,
including the Radio Stations and the Licenses, to facilitate Agent's
non-judicial foreclosure of Secured Party's security interest, provided such
actions are consistent with the Communications Act and the rules and regulations
of the FCC. In connection therewith, Debtor agrees to execute and deliver to
Agent, the receiver or any person or such entity designated by Agent, any
documents, instruments, or agreements reasonably requested by Agent or the
receiver in connection with any such grant, license, assignment, or transfer
sought by Agent from the FCC.
5. RIGHTS AND REMEDIES
5.1 Upon the occurrence and during the continuance of an Event of
Default, which Event of Default is not cured within any applicable Cure Period,
if applicable, Agent may do any one or more of the following, all of which are
authorized by Debtor:
(a) Make such payments and do such acts as it considers
necessary or reasonable to protect Secured Party's security interest in the
Collateral. Debtor agrees to assemble and make available any or all of the
Collateral if Agent so requires. Debtor authorizes Agent to enter the premises
where the Collateral is located, take and maintain possession of the Collateral,
or any part of it, and to pay, purchase, contest, or compromise any encumbrance,
charge, or lien which, in the opinion of the Agent, appears to be prior or
superior to Secured Party's security interest, and to pay all costs and expenses
incurred in connection therewith;
6
(b) With the exception of any rights granted under the FCC
licenses, which rights are not to be transferred without the prior consent of
the FCC if said consent is then required, Agent is hereby granted a license or
other right to use, without charge, Debtor's trade names, trademarks, service
marks, customer lists, and advertising matter, or any other property of a
similar nature, in advertising for sale or selling any Collateral and Debtor's
rights under all licenses shall inure to the benefit of Secured Party;
(c) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, or sell (in the manner provided for
herein), the Collateral;
(d) Sell the Collateral, at either a public or private sale,
or both, by way of one or more contracts or transactions, for cash or on terms,
in such manner and at such places (including Debtor's premises) as is
commercially reasonable; and apply any proceeds of any sale or other disposition
of the Collateral in the order provided in Section 9-504 of the Code, including
the payment of Secured Party's Expenses. It is not necessary that the Collateral
be present at any such sale;
(e) Without constituting a retention of collateral in
satisfaction of indebtedness as provided for in Section 9-505 of the Code, Agent
may open Debtor's mail, notify account debtors and other obligors of Debtor of
Secured Party's security interests in the Collateral, notify postal authorities
that all mail addressed to Debtor is to be delivered to Agent and proceed to
collect the same and apply the net cash proceeds therefrom to the Obligations;
(f) Grant extensions, compromise claims and settle Collateral
for less than face value, all without prior notice to Debtor;
(g) Give notice of any disposition of the Collateral as
follows:
(1) Agent shall give Debtor and each holder of a
security interest in the Collateral who has filed with Agent a written request
for notice, a written notice stating the time and place of a public sale, or, if
the disposition is to be either a private sale or some other disposition that is
not a public sale, the time on or after which the private sale or other
disposition is to be made;
(2) The notice described in the immediately preceding
paragraph shall be delivered to Debtor as provided in Section 9.1 of the Credit
Agreement at least ten (10) calendar days before the date fixed for a public
sale, or at least five (5) calendar days before the date on or after which the
private sale or other disposition is to be made, unless the Collateral is
perishable or threatens to decline speedily in value. Notice to
7
persons other than Debtor claiming an interest in the Collateral shall be sent
to such addresses as such persons have furnished to Agent prior to the date of
such notice;
(3) If the disposition is to be a public sale, Agent
shall also give notice of the time and place of said sale by publishing a notice
at least five (5) calendar days before the date of the sale in a newspaper of
general circulation, if one exists, in the county in which the sale is to be
held;
(h) In its own name, or in the name of a designee or nominee,
bid and purchase at any public sale;
(i) Choose to accept the Collateral after giving notice of
such proposal to Debtor and to any other person with a security interest in such
Collateral, and such acceptance shall discharge the Secured Obligations,
provided neither Debtor nor any other person with a security interest in such
Collateral objects in writing to such proposal within twenty-one (21) days from
receipt of such notice;
(j) Setoff the Obligations, or any part thereof, against any
deposit account or other property of Debtor with or in the possession of Secured
Party, whatever the source of the deposit account or such property;
(k) Use in connection with any assembly or disposition of the
Collateral, any trademark, trade name, trade style, copyright, patent right,
technical process or other proprietary right used or utilized by Debtor; and
(l) At Secured Party's option and without further notice to or
demand upon Debtor, except as may be provided in the Credit Agreement, assume
Debtor's rights under any or all of the Designated Agreements, and to hold and
enjoy Debtor's interest under the Designated Agreements free from any claims of
Debtor.
5.2 In addition to the remedies described above, Agent shall be
entitled to exercise the remedies set forth in Section 7.2 of the Credit
Agreement and all other remedies available under the Code. In the event Agent
seeks the appointment of a receiver as provided for in Section 7.2(c) of the
Credit Agreement, such receiver shall be instructed to seek from the FCC consent
to an involuntary transfer of control of the Licenses for the purpose of seeking
a bona fide purchaser to whom control will ultimately be transferred. Debtor
hereby agrees to authorize such involuntary transfer of control upon the request
of the receiver so appointed and, if Debtor shall refuse to authorize the
transfer, its approval may be required by the court. In such event, Debtor shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any actions or transactions contemplated by this Agreement and any
related agreements, including, without limitation, the preparation, execution
and filing with the FCC of the assignor's or transferor's portion of any
application
8
or applications for consent to the assignment of the Licenses, or transfer or
control necessary or appropriate under the FCC's Rules and Regulations to obtain
approval of the transfer of assignment of any portion of the Collateral,
together with the Licenses.
(a) Upon receipt of the consent of the FCC as required under
Section 5.2(d) below, the receiver shall have the power to dispose of the
Licenses and the Collateral in any manner lawful in the jurisdiction in which
his appointment is confirmed, including the power to conduct a public or private
sale of the Licenses and Collateral; provided, however, that the successful
bidder at any such public or private sale shall not acquire any License unless
and until the FCC shall first have granted its consent to such acquisition.
Secured Party may bid at any such public or private sale.
(b) DEBTOR ACKNOWLEDGES THAT THE ASSIGNMENT OR TRANSFER OF THE
LICENSES IS INTEGRAL TO SECURED PARTY'S REALIZATION OF THE VALUE OF THE
COLLATERAL, THAT THERE IS NO ADEQUATE REMEDY AT LAW FOR FAILURE BY DEBTOR TO
COMPLY WITH THE PROVISIONS OF THIS SECTION AND THAT SUCH FAILURE WOULD NOT BE
ADEQUATELY COMPENSABLE IN DAMAGES, AND THEREFORE AGREES THAT THE AGREEMENTS
CONTAINED IN THIS SECTION MAY BE SPECIFICALLY ENFORCED.
(c) Notwithstanding anything herein contained to the contrary,
Debtor's execution and delivery of this Agreement and any related agreements (i)
do not and will not constitute, create, or have the effect of constituting or
creating, directly or indirectly, actual or practical ownership of Debtor by
Agent or Secured Party, or control, affirmative or negative, direct or indirect,
by Agent or Secured Party over the programming, management, or any other aspect
of the operation of Debtor or its broadcast properties, which ownership and
control will remain exclusively and at all times in Debtor; and (ii) do not and
will not constitute the transfer, assignment, or disposition in any manner,
voluntarily or involuntarily, directly or indirectly, of any of the Licenses or
any other license, permit or authorization at any time issued by the FCC to
Debtor or the transfer of control of Debtor within the meaning of Section 310(d)
of the Communications Act of 1934, as amended.
(d) Notwithstanding anything contained elsewhere in this
Agreement, no assignment or transfer of any Licenses shall occur without the
prior written consent of the FCC (if said consent is necessary for the
assignment or transfer).
5.3 Agent acknowledges that in connection with any disposition by
Agent under this Agreement of the Collateral, it may be necessary to obtain the
consent or approval of certain governmental authorities, including, without
limitation, the FCC. Upon the exercise by Agent of any power, right, privilege,
or remedy pursuant to this Agreement or pursuant to the Credit Agreement which
so requires any consent, approval, registration,
9
qualification, or authorization of any governmental authority or
instrumentality, Debtor agrees to execute and deliver, or will cause the
execution and delivery of, all applications, certificates, instruments,
assignments, and other documents and papers that Agent or any purchaser of the
Collateral may be required to obtain for such governmental consent, approval,
registration, qualification, or authorization.
5.4 During the term of the Loans, at Secured Party's option, Agent
may cure, on behalf of Debtor, any default of Debtor with respect to the
Designated Agreements.
5.5 All proceeds of sale or other disposition of the Collateral
shall be applied first to Post Closing Lender Expenses, including without
limitation costs of sale or other disposition of the Collateral, then to
outstanding and accrued interest and then to principal.
5.6 Any portion of the Obligations which remains unpaid after
disposition of the Collateral as provided above shall be paid immediately by
Debtor provided that Agent has complied in all material respects with Section
9-504 of the Code, as in effect at the time of such disposition. Any excess
which exists after disposition of the Collateral shall be returned promptly,
without interest and subject to the rights of third parties, to Debtors by
Agent;
5.7 The rights and remedies of Agent under this Agreement, the
Credit Agreement, the Credit Documents, and all other agreements contemplated
hereby and thereby shall be cumulative. Secured Party shall have all other
rights and remedies not inconsistent herewith as provided under the Code, by
law, or in equity. No exercise by Agent or Secured Party of any one right or
remedy shall be deemed an election of remedies, and no waiver by Agent or
Secured Party of any default on Debtor's part shall be deemed a continuing
waiver of any further defaults. No delay by Agent or Secured Party shall
constitute a waiver, election or acquiescence with respect to any right or
remedy.
6. WAIVERS
6.1 So long as Secured Party or Agent complies with the obligations,
if any, imposed by Section 9-207 of the Code, Secured Party shall not otherwise
be liable or responsible in any way or manner for: (a) the safekeeping of the
Equipment or Inventory, or any of Debtor's Books relating to any of the
Collateral; (b) any loss or damage thereto occurring or arising in any manner or
fashion or from any cause; (c) any diminution in the value thereof; or (d) any
act or default of any carrier, warehouseman, bailee, forwarding agency, or other
person whomsoever.
6.2 This Agreement is executed as security for the Obligations only
and, therefore, the execution and delivery of this Assignment shall not in any
way affect or
10
modify Debtor's liability or obligations under the Designated Agreements.
Nothing contained herein shall operate or be construed to impose any obligation
upon any Secured Party to perform or discharge any duty on the part of Debtor
with respect to any of the Designated Agreements. It is expressly understood and
agreed by Debtor that no Secured Party hereby assumes any of Debtor's
obligations, liabilities or duties concerning any of the Designated Agreements
unless and until such Secured Party exercises its rights hereunder and under any
or all of the Designated Agreements and, notwithstanding anything herein to the
contrary, the exercise by any Secured Party of any of its rights hereunder shall
not release Debtor from any of its duties or obligations under the Designated
Agreements. Nor shall any Secured Party be liable for any loss sustained by
Debtor resulting from such Secured Party's enforcement of or failure to enforce
any or all of the Designated Agreements (whether before or after the occurrence
of an Event of Default hereunder) unless such loss is caused by the willful
misconduct or gross negligence of such Secured Party or such Secured Party's
agents or employees. Debtor shall and does hereby indemnify, defend and hold
harmless each Secured Party from and against all liability, loss, costs, damages
or claims arising out of the Designated Agreements, or this Agreement, including
reasonable attorneys' fees and expenses, except as may arise from the gross
negligence or willful misconduct of any Secured Party or such Secured Party's
agents or employees.
7. RELEASES
At any time, or from time to time, upon Debtor's request that it be
permitted to sell all or substantially all of such Debtor's Collateral, Secured
Party will give Debtor a timely response to its request, recognizing that any
such decision will be in the Secured Party's sole discretion based on
information then available to Secured Party.
8. NOTICES
All notices or demands by any party hereto to the other party and
relating to this Agreement shall be made in the manner and to the addresses set
forth in Section 9.1 of the Credit Agreement. Debtor's address for notices shall
be the same as Borrowers' address for notices.
9. GOVERNING LAW; JURISDICTION AND VENUE
9.1 GOVERNING LAW. This Agreement and the other Credit Documents
shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to conflict of laws principles, except to the
extent that federal law or the Uniform Commercial Code provides that the
validity or perfection of the security interests hereunder, or remedies
hereunder, in respect of any particular Collateral
11
are governed by the laws of a jurisdiction other than the State of New York
without regard to conflict of laws principles.
9.2 JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS MAY BE TRIED AND LITIGATED IN
THE STATE OF NEW YORK, OR, AT THE SOLE OPTION OF SECURED PARTY, IN ANY OTHER
COURT IN WHICH SECURED PARTY INITIATES LEGAL OR EQUITABLE PROCEEDINGS AND WHICH
HAS JURISDICTION OVER THE SUBJECT MATTER AND PARTIES IN CONTROVERSY. TO THE
EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 9.2 AND
STIPULATE THAT ANY FORUM LOCATED IN THE STATE OF NEW YORK SHALL HAVE IN PERSONAM
JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY
SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE CREDIT DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL
JURISDICTION IN ANY ACTION AGAINST DEBTOR MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO THEIR ADDRESS SPECIFIED FOR NOTICES PURSUANT
TO SECTION 8 HEREOF.
10. FCC APPROVAL
Notwithstanding anything to the contrary contained herein, Agent
will not take any action pursuant to this Agreement which would constitute or
result in any assignment of the Licenses or any change of control of Debtor
under any other security agreement if such assignment of the Licenses or change
of control would require under then existing law (including the written rules
and regulations promulgated by the FCC), the prior approval of the FCC, without
first obtaining such approval of the FCC. Debtor agrees to take any action which
Agent may reasonably request in order to obtain and enjoy and full rights and
benefits granted to Agent by this Agreement and each other agreement, instrument
and document delivered to the Agent in connection with the Obligations or in any
document evidencing or securing the Collateral, including specifically, at
Debtor's own cost and expense, the use of its best efforts to assist in
obtaining approval of the FCC for any action or transaction contemplated by this
Agreement which is then required by law, and specifically, without limitation,
upon request, to prepare, sign and file with the FCC the assignor's or
transferor's portion of any application or applications for consent to the
assignment of license or transfer or control necessary or appropriate under the
FCC's rules and regulations for approval of (a) any sale or sales of property
constituting the Collateral by
12
or on behalf of Agent or the holder(s) of the Obligations secured hereby, or (b)
any assumption by Agent of voting rights or management rights in property
constituting the Collateral effected in accordance with the terms of any other
security or pledge agreement relating thereto.
11. GENERAL PROVISIONS
11.1 This Agreement shall be binding and deemed effective when
executed and delivered by Debtor and accepted and executed by Secured Party.
11.2 This Agreement shall bind and inure to the benefit of the
respective successors and assigns of Debtor and Secured Party; provided,
however, that Debtor may not assign this Agreement or any rights hereunder
without Secured Party's prior written consent and any prohibited assignment
shall be absolutely void.
11.3 Section headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section hereof applies equally to this entire Agreement.
11.4 Neither this Agreement nor any uncertainty or ambiguity herein
shall be construed or resolved against Agent, Secured Party or Debtor, whether
under any rule of construction or otherwise. On the contrary, this Agreement has
been reviewed by each of the parties and their counsel and shall be construed
and interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
11.5 Each provision of this Agreement shall be severable from every
other provision of this Agreement for the purpose of determining the legal
enforceability of any specific provision.
11.6 This Agreement cannot be changed, modified, amended, or
terminated, except by a written document executed by Debtor and Secured Party.
All prior agreements, understandings, representations, warranties, and
negotiations, if any, are merged into this Agreement, the Credit Agreement, and
the other documents and agreements entered into in connection herewith and
therewith.
11.7 The parties intend and agree that their respective rights,
duties, powers, liabilities, obligations, and discretions shall be performed,
carried out, discharged, and exercised reasonably and in good faith.
11 .8 After termination of the Credit Agreement and when Secured
Party has received payment and performance in full of all Obligations, Secured
Party shall execute
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and deliver to Debtor a termination of all of the security interests granted by
Debtor hereunder.
11.9 Secured Party's rights and security interests hereunder shall
be reinstated and revived, and the enforceability of this Agreement shall
continue, with respect to any amount at any time paid on account of the Secured
Obligations which thereafter shall be required to be restored or returned by
Secured Party upon the bankruptcy, insolvency or reorganization of Debtor or any
other person, all as though such amount had not been paid.
11.10 This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed to be an original. All of such
counterparts, taken together, shall constitute but one and the same Agreement.
This Agreement shall become effective upon the execution of a counterpart of
this Agreement by each of the parties hereto.
11.11 Agent. Agent has been appointed to act as Agent hereunder on
behalf of Secured Party pursuant to the Credit Agreement and shall act as Agent
hereunder in accordance with the provisions of this Agreement and the Credit
Agreement. Agent hereunder shall all times be the same person as the Agent under
the Credit Agreement. Resignation or removal of the Agent hereunder and
appointment of a successor agent under the Credit Agreement shall constitute
appointment as successor agent hereunder. Upon resignation or removal, Agent
shall promptly transfer all Collateral and any related records or documents to
the successor agent and shall execute and deliver any documents or instruments
or take such other actions as may be reasonably necessary in connection with the
transfer of the Collateral and substitution of agents.
12. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. The parties hereto each (i) acknowledges that this waiver is a
material inducement for the parties to enter into a business relationship, that
the parties hereto have already relied on this waiver in entering into this
Agreement or accepting the benefits thereof, as the case may be, and that each
will continue to rely on this waiver in their related future dealings, and (ii)
further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, OR MODIFICATIONS OF THIS
AGREEMENT. In
14
the event of litigation, this Agreement may be filed as a written consent to a
trial by the court.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first set forth above.
"DEBTOR"
[ACQUISITION COMPANY]
By:
---------------------------------
Title:
------------------------------
"SECURED PARTY AND AGENT"
AMRESCO FUNDING CORPORATION,
a Delaware corporation, individually
and as Agent
By:
---------------------------------
Its:
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS
L.P., a Bermuda limited partnership
By:
---------------------------------
Authorized Signatory
15
EXHIBIT C
PLEDGE OF MEMBERSHIP INTEREST IN LLC
This Pledge of Membership Interest in LLC is dated as of ________, and is
entered into among ____________, LLC, a Virginia limited liability company, and
___________ Management, Inc., a Virginia corporation (individually and
collectively referred to as "Pledgor"); AMRESCO FUNDING CORPORATION, a Delaware
corporation ("AMRESCO") and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., a Bermuda
limited partnership (collectively referred to as "Secured Party"), as lenders;
and AMRESCO, as agent for Secured Party ("Agent") in light of the following
facts:
WHEREAS, Secured Party and Affiliates of ________________, a Virginia
limited liability company (the "Company"), have entered into that certain
Amended and Restated Credit Agreement, dated as of September 30, 1997 (as
hereafter amended, supplemented or otherwise modified from time to time, the
"Credit Agreement");
WHEREAS, the Company has agreed, pursuant to that certain Acknowledgment
and Ratification Agreement of even date herewith, to be bound by the terms,
covenants, conditions and representations set forth in the Credit Agreement; and
WHEREAS, each Pledgor has agreed to grant to Secured Party a security
interest in all of the Collateral (as hereinafter defined) owned by such Pledgor
as security for the Obligations of the Company and its Affiliates (collectively
referred to from time to time as "Borrowers") to Secured Party arising under the
Credit Agreement and the Credit Documents executed by Borrowers in connection
therewith.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions, representations, and warranties hereinafter set forth, and for other
good and valuable consideration, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, all initially capitalized terms
used but not defined herein shall have the meaning ascribed thereto in the
Credit Agreement. In addition, the following terms shall have the following
meanings.
"Agreement" shall mean this Pledge of Membership Interest in LLC
together with any concurrent or subsequent exhibits or schedules hereto and any
extensions, supplements, amendments, or modifications to or in connection with
this Pledge of Membership Interest in LLC or to any such schedules or exhibits.
"Credit Agreement" shall have the meaning set forth in the recitals
to this Agreement, the terms of which are incorporated herein by this reference.
"Code" shall mean the New York Uniform Commercial Code.
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"Collateral" shall mean, as and to the extent permitted by
applicable law, (a) all of Pledgor's membership interest in the Company and all
other rights of Pledgor with respect thereto and all proceeds, income, fees
preferences, profits or other benefits therefrom; (b) all payments, dividends,
and distributions hereafter made upon or with respect to the Company; (c) all of
Pledgor's right, title and interest in and to any and all contract rights,
including all rights now or hereafter accruing under any operating agreement, of
the Company; and (d) all proceeds of any and all of the foregoing, including
without limitation any liquidating distributions and proceeds from the sale of
Pledgor's interest in the Company and all insurance policies relating thereto
and proceeds thereof.
"Company" shall have the meaning set forth in the recitals to this
Agreement.
"Event of Default" shall have the meaning set forth in the Credit
Agreement.
"Pledgor" shall have the meanings set forth in the introduction to
this Agreement.
"Secured Party" shall have the meaning set forth in the introduction
to this Agreement.
"Secured Obligations" means any and all debts, liabilities,
obligations, or undertakings owing by Borrowers to Secured Party arising under,
advanced pursuant to, or evidenced by the Credit Agreement, the Credit Documents
to which Borrowers are a party, or this Agreement, whether direct or indirect,
absolute or contingent, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code (11 U.S.C. ss. 362(a)), and including all principal,
interest (including interest that but for the filing of a petition in bankruptcy
would accrue on such obligations whether or not allowed as a claim), indemnities
and all Secured Party's Expenses which Pledgor is required to pay or reimburse
pursuant to this Agreement, the Credit Agreement, the Credit Documents, or by
law.
"Secured Party's Expenses" shall mean any and all reasonable costs
or expenses required to be paid by Pledgor under this Agreement, by Borrowers
under the Credit Agreement or the other Credit Documents, or by Guarantor under
the Guaranty which are paid or advanced by Secured Party and all reasonable
costs and expenses of Secured Party, including their or its reasonable
attorneys' fees and expenses, incurred or expended to correct any default or
enforce any provision of this Agreement, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, irrespective of whether a sale is
consummated; and all reasonable costs and expenses of suit incurred or expended
by Secured Party, including its
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reasonable attorneys' fees and expenses in enforcing or defending this
Agreement, irrespective of whether suit is brought.
2. Construction. Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, references to the
singular include the plural, the part includes the whole, "including" is not
limiting, and "or" has the inclusive meaning represented by the phrase "and/or."
References in this Agreement to "determination" by Secured Party include
reasonable estimates (absent manifest error) by Secured Party, as applicable (in
the case of quantitative determinations) and reasonable beliefs (absent manifest
error) by Secured Party, as applicable (in the case of qualitative
determinations). The words "hereof," "herein," "hereby," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article, section, subsection,
exhibit, and schedule references are to this Agreement unless otherwise
specified.
3. Creation of Security Interest. Pledgor hereby grants to Secured Party a
continuing first priority security interest in all presently existing and
hereafter acquired or arising Collateral owned by Pledgor in order to secure the
prompt payment and performance of all of the Obligations by Borrowers. Such
security interest in the Collateral shall attach to all Collateral without
further act on the part of Secured Party or Pledgor.
4. Further Assurances.
4.1 Pledgor shall execute and deliver to Agent, concurrently with
Pledgor's execution of this Agreement, and from time to time at the request of
Agent, all financing statements, continuation financing statements, security
agreements, assignments, and all other documents that Agent may reasonably
request, in form reasonably satisfactory to Agent, to perfect and maintain
perfected Secured Party's security interests in the Collateral or the proceeds
of the Collateral in order to consummate fully all of the transactions
contemplated by this Agreement and the Credit Agreement. Pledgor hereby
irrevocably makes, constitutes, and appoints Agent (and Agent's officers,
employees, or agents) as Pledgor's true and lawful attorney with power to sign
the name of Pledgor on any of the above-described documents or on any other
similar documents which need to be executed, recorded, or filed, and to do any
and all things necessary in the name and on behalf of Pledgor in order to
perfect, or continue the perfection of, Secured Party's security interests in
the Collateral. The power of attorney granted under this Section 4.1 is coupled
with an interest and shall be irrevocable until all of the Obligations have been
paid in full, the Credit Agreement terminated, and Pledgor's duties hereunder
have been discharged in full.
4.2 Without limiting the generality of the foregoing Section 4.1 or
any of the provisions of the Credit Agreement, Pledgor will: (a) at the request
of Agent, ▇▇▇▇ conspicuously all chattel paper and all records pertaining to the
Collateral with a legend, in form and substance satisfactory to Agent,
indicating that the Collateral is subject to the security interest granted
hereby; (b) at the request of the Agent, appear in and defend any
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action or proceeding which may affect Pledgor's title to, or the security
interest of Agent in, any of the Collateral; and (c) upon demand of Agent, allow
inspection of Collateral by Agent or persons designated by Agent at any time
during normal business hours and, provided that no Event of Default has occurred
and is continuing, upon three (3) Business Days' notice to Pledgor.
4.3 With respect to that portion of the Collateral which is
evidenced by, or consists of, negotiable collateral (other than drafts received
in the ordinary course of business so long as no Event of Default has occurred
and is continuing), Pledgor shall, immediately upon request by Agent, endorse
(where appropriate) and assign such negotiable collateral over to Agent, and
deliver to Agent actual physical possession of such negotiable collateral to
Agent together with any instruments of transfer or assignment, all in form and
substance satisfactory to Agent, in order to fully perfect the security interest
therein of Secured Party.
4.4 Pledgor acknowledges and agrees that, upon the occurrence of an
Event of Default which remains uncured during any applicable Cure Period, the
primary source of repayment of the Obligations is through the liquidation of the
Collateral described herein and through liquidation of Borrowers' Radio Stations
and Licenses (as defined in the Credit Agreement). In accordance with the
provisions of Section 7.2(c) of the Credit Agreement, upon the occurrence and
during the continuance of the Event of Default(s) described therein, Pledgor
agrees to take all actions and do all things requested in connection with an
application to the FCC for the grant, assignment, or transfer of the Licenses to
a receiver acceptable to Agent and appointed by a court of competent
jurisdiction, or to Agent's nominee or to a purchaser of the Collateral,
including the Radio Stations and the Licenses, to facilitate Agent's
non-judicial foreclosure of Secured Party's security interest, provided such
actions are consistent with the Communications Act and the rules and regulations
of the FCC. In connection therewith, Pledgor agrees to execute and deliver to
Agent, the receiver or any person or such entity designated by Agent, any
documents, instruments, or agreements reasonably requested by Agent or the
receiver in connection with any such grant, license, assignment, or transfer
sought by Agent from the FCC.
5. Representations and Warranties of Pledgor. Pledgor hereby represents
and warrants to Secured Party that:
5.1 Validity of Collateral/Title to Collateral. Pledgor is the sole
legal and beneficial owner of the Collateral, and, except for the security
interests granted to Secured party herein Pledgor has, and will at all times
during the term hereof have, good and marketable title to all and every part of
the Collateral, free and clear of any security interest, lien, pledge,
encumbrance, option, conditional sale contract, lease or other title retention
agreement, or any other adverse claim of any nature whatsoever.
5.2 Uncertificated Membership. Pledgor's membership interest in the
Company is not evidenced by any certificate or instrument representing the
Collateral. In the
-4-
event any certificate or instrument evidencing Pledgor's membership interest is
issued by the Company, Pledgor shall immediately deliver such certificate or
instrument to Agent, stamped or marked as Secured Party may require, together
with duly executed or endorsed instruments of assignment or transfer relating
thereto as Secured Party may reasonably require.
5.3 Nature of Collateral. The Collateral will at all times during
the term hereof constitute one hundred percent (100%) of the membership interest
in the Company.
5.4 Priority. Upon the execution and delivery of this Agreement by
Pledgor and Agent's filing a UCC-1 Financing Statement covering the Collateral
in the office of the State Corporation Commission of the State of Virginia and
the office of the Secretary of the State of Indiana, Secured Party shall have
perfected security interests in and to the Collateral having first priority for
the full amount of all of the Secured Obligations.
5.5 No Default or Required Consent. Neither the execution or
delivery of this Agreement by Pledgor nor the effectuation by Agent or Secured
Party of any of its rights or remedies herein, whether upon default or
otherwise, will result in a breach of or constitute a default under any Articles
of Organization or operating agreement of Pledgor or the Company or any other
agreement or instrument to which the Pledgor or the Company is a party or by
which any of the Collateral or the assets of the Company is bound, or violate
any law or any rule or regulation of any administrative agency or any order,
writ, injunction or decree of any court or administrative agency, nor does any
of the foregoing require the consent of any person, entity or governmental
agency or any notice or filing with any governmental or regulatory body (except
as may be required in connection with any sale or disposition of the Collateral
by laws and regulations of the FCC and except for the filing of this Agreement
with the FCC subsequent to its execution, if and as necessary).
5.6 No Litigation. There is no action, legal, administrative or
other proceeding pending or threatened against Pledgor's title to or interest in
the Collateral or against Pledgor's pledge of the Collateral hereunder, nor does
Pledgor know of any basis for the assertion of any such claim.
5.7 Charter Documents and Member Agreements. Accurate copies of the
Articles of Organization and the Operating Agreement of the Company, and
agreements among the members of the Company in their member capacity to which
the Pledgor is a party, all pre-organization agreements adopted by the Company,
and all agreements among members or between members and the Company which
contain buy/sell rights, options, rights of first refusal, rights of co-sale or
similar rights affecting the transferability of member ownership or control, and
all amendments of any of the foregoing (the "Member Agreements") (i) have
heretofore been delivered to Secured Party (ii) have been duly authorized,
executed and delivered by the parties thereto, (iii) have not been further
amended or otherwise modified and (iv) are in full force and effect and are
binding upon and enforceable against the parties thereto in accordance with
their respective terms subject to the
-5-
effect of any applicable bankruptcy or similar law affecting creditors' rights
generally and to the effect of general principles of equity (regardless of
whether considered in a proceeding in equity or at law). There exists no default
under any of the Member Agreements by Pledgor, or to Pledgor's knowledge, by any
other party hereto.
6. Affirmative Covenants. Pledgor covenants that until such time as all of
the Secured Obligations are paid in full unless Secured Party shall otherwise
consent in writing:
6.1 Protection of Security and Legal Proceedings. Pledgor shall, at
its own expense, take any and all actions necessary to preserve, protect and
defend the security interest of Secured Party in the Collateral and the
perfection and priority thereof against any and all adverse claims, including
appearing in and defending any and all actions and proceedings which purport to
affect any of the foregoing; promptly reimburse Secured Party or Agent on behalf
of Secured Party for any and all sums, including reasonable costs, expenses and
actual attorneys' fees, which Secured Party or Agent on behalf of Secured Party
may pay or incur in defending, protecting or enforcing its security interest in
the Collateral or the perfection or priority thereof, or in discharging any
prior or subsequent lien or adverse claim against the Collateral or any part
thereof, or by reason of becoming or being made a party to or intervening in any
action or proceeding affecting the Collateral or the rights of Secured Party
therein, all of which actions Pledgor hereby agrees that Secured Party or Agent
on behalf of Secured Party shall have the right to take in their sole and
absolute discretion.
6.2 Authorized Sale. Pledgor shall keep the proceeds of any
collection, sale or disposition of any Collateral authorized by Secured Party in
accordance with the Credit Agreement separate from Pledgor's other property and;
until otherwise notified by Agent, shall enforce all of Pledgor's rights with
respect to any such collection, sale or disposition, maintain accurate and
complete records thereof and promptly deliver to Agent the proceeds thereof as
and when received.
6.3 Inspection. Prior to the occurrence of an Event of Default,
Pledgor shall give Secured Party and Agent such information as may be reasonably
requested concerning the Collateral and permit Secured Party and its agents and
representatives (including Agent), after notice and at reasonable times, to
enter upon any premises upon which Pledgor's records concerning the Collateral
or the Company are located for the purpose of inspecting and auditing the same.
Pledgor shall also cause the Company to permit Secured Party and its agents and
representatives (including Agent) full access upon reasonable request to all
properties and records of the Company for the purpose of inspecting and auditing
the same. After the occurrence and during the continuance of an Event of
Default, Pledgor shall allow Secured Party and Agent immediate access to
Pledgor's records concerning the Collateral or the Company for the purpose of
inspecting and auditing same, including full access to all properties and
records of the Company.
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6.4 Notification. Pledgor shall promptly notify Secured Party in
writing of any event which materially and adversely affects the ability of
Pledgor or Secured Party to dispose of the Collateral or the rights and remedies
of Secured Party in relation thereto, including, but not limited to, the levy of
any legal process against the Collateral and the adoption of any order,
arrangement or procedure affecting the Collateral, whether governmental or
otherwise; Pledgor shall also promptly notify Secured Party in writing of any
event which materially and adversely affects the financial condition, assets,
liabilities, business, operations or prospects of the Company in any material
respect.
6.5 Authority of Secured Party. With respect to any Collateral,
Pledgor hereby consents and agrees that the Company shall be entitled to accept
the provisions of this Agreement as conclusive evidence of the right of Secured
Party or Agent on behalf of Secured Party to effect any transfer or exercise any
right hereunder with respect to any such Collateral, notwithstanding any other
notice or direction to the contrary heretofore or hereafter given by Pledgor or
any other person to the Company or to any registrar, transfer agent or trustee
thereof.
6.6 Further Assurances. Pledgor shall from time to time make,
execute, acknowledge and deliver all such further documents, instruments and
assurances and take such further acts as reasonably may be requested by Secured
Party or Agent to perfect or preserve the security interest created by and to
carry out the intent of this Agreement. Without limiting the generality of the
foregoing, Pledgor shall, upon request of Secured Party or Agent, execute and
deliver to Secured Party such financing statements and security agreements, in
form and substance satisfactory to the Secured Party, as Secured Party may
require to effect and perfect Secured Party's security interest in the
Collateral, including any distributions or dividends paid in property other than
cash or cash equivalents.
6.7 Member Agreements. Pledgor shall, at its own expense, unless
Secured Party shall otherwise consent in writing in advance:
(a) Except as to the extent otherwise provided in Section 9.1,
use its best efforts to perform and observe all of the terms and provisions of
each Member Agreement to be performed or observed by it, maintain each Member
Agreement to which it is a party in full force and effect, take all reasonable
and prudent action to enforce in accordance with its terms each Member Agreement
to which it is a party, and take all such action to such end as may be from time
to time reasonably requested by Secured Party.
(b) Furnish to Secured Party promptly after receipt thereof
copies of (i) all notices, requests and other documents, other than financial
statements, received by Pledgor under or pursuant to each Member Agreement
relating to any matter requiring consent from Secured Party under Section 9.1,
(ii) all amendments to, restatements of, and newly executed, as the case may be
Member Agreements, and (iii) such other information and reports regarding the
Collateral as Secured Party may reasonably request; and
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(c) Upon the reasonable request of Secured Party, make such
demands and requests for information and reports, or make such demands or
request for action Pledgor is entitled to make under each Member Agreement, to
the Company and the parties to the respective Member Agreements.
7. Negative Covenants. Pledgor covenants that (without the prior written
consent of Secured Party) until such time as all of the Secured Obligations are
paid in full and:
7.1 Sale or Hypothecation of Collateral. Pledgor shall not directly
or indirectly, whether voluntarily, involuntarily, by operation of law or
otherwise (a) exchange, sell, encumber or dispose of the Collateral or any part
thereof, or any of Pledgor's rights therein, or grant any option with respect
thereto; (b) cause, suffer or permit the Collateral to be affected by any
encumbrance, security interest, option or adverse claim of any kind or nature
whatsoever; (c) vote or consent to any change the voting rights of the members
of the Company. The inclusion of "proceeds" as a component of the Collateral
shall not be deemed a consent by Secured Party to any sale or disposition of all
or any part of the Collateral.
7.2 No Issuance of Additional Membership Interests. Pledgor shall
not cause, suffer, or permit the Company to issue any additional membership
interests in the Company.
7.3 Certain Agreements. Pledgor shall not make any compromise,
adjustment, amendment, modification, settlement, substitution or termination in
respect to the Collateral; nor cause, suffer or permit anything to be done which
might impair, or fail to do anything necessary or advisable in order to preserve
the value of the Collateral and the credit interest of Secured Party therein.
8. Additional Covenants of Pledgor.
8.1 Preservation of Collateral. In case of any failure of Pledgor to
keep the Collateral free from liens or adverse claims, or to pay taxes on or in
respect thereof, or fully and punctually to keep and perform any other covenant
hereof, then after reasonable notice to Pledgor, Secured Party or Agent on
behalf of Secured Party may (but shall not be required to) pay or contest or
settle such taxes, liens or adverse claims, or any judgments based thereon, take
any action to preserve any rights of or against any prior or other parties in
connection with the Collateral, make or give any presentments, demands for
performance, notices of nonperformance, protests, notices of protests, notices
of dishonor or notices or any other nature whatsoever in connection with the
Collateral or the Secured Obligations, or otherwise make good any other
aforesaid failure of Pledgor. Pledgor shall promptly reimburse Secured Party or
Agent for any sums reasonably paid or advanced by Secured Party or Agent for any
such purpose, together with interest at the rate specified in the Credit
Agreement from the date of any such advance to the date of reimbursement.
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8.2 Attorney-in-Fact. After the occurrence and during the
continuance of an Event of Default, Agent on behalf of Secured Party shall have
the right and power to receive, endorse and collect all checks made payable to
Pledgor representing any payment or distribution in respect of the Collateral or
any part thereof and to give full discharge for the same, and to execute and
deliver as attorney-in-fact on behalf of Pledgor all necessary instruments of
sale, assignment and transfer of the Collateral, and any part thereof, as may be
sold or otherwise disposed of pursuant to this Agreement, subject to the prior
consent of the FCC to the extent required. Pledgor hereby appoints Agent on
behalf of Secured Party its attorney-in-fact with full power of substitution, to
carry out the purposes of this section 8.2. The power of attorney granted under
this Section 8.2 is coupled with an interest and shall be irrevocable until all
of the Obligations have been paid in full, the Credit Agreement terminated, and
Pledgor's duties hereunder have been discharged in full.
9. Rights Incident to Collateral.
9.1 Voting Rights. Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement.
Without limiting the generality of the foregoing, Pledgor shall not in Pledgor's
capacity as a member of the Company, without Secured Party's prior written
consent:
(a) Cancel or terminate any Member Agreement or consent to any
cancellation or termination thereof;
(b) Vote or consent to amend or restate the Articles of
Organization;
(c) Vote or consent to amend the Operating Agreement of the Company;
(d) Execute any irrevocable proxies with respect to the Company;
(e) Enter into any agreement among members or between members and
the Company to which Pledgor is a party to reduce or eliminate or to create or
increase rights adversely affecting the transferability of, the ownership or
control of the Collateral, or to restrict in any manner Pledgor's ability to
freely exercise his voting rights with respect to the Collateral; and
(f) Waive any material default under or breach of any Member
Agreement.
9.2 Rights to Distributions. So long as no Event of Default has
occurred and is continuing the Pledgor may retain any distributions made in cash
or cash equivalents, but after the occurrence and during the continuance of an
Event of Default Pledgor shall cause the Company to pay directly to Agent on
behalf of Secured Party (a) one hundred percent (100%) of all distributions made
in the ordinary course in cash or cash
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equivalents in respect of any Collateral, (b) one hundred percent (100%) of all
distributions made other than in cash or cash equivalents in respect of any
Collateral, and (c) one hundred percent (100%) of all distributions of cash or
cash equivalents made in respect of any Collateral in connection with a partial
or total liquidation or dissolution of the Company or in connection with a
reduction of capital, capital surplus or paid-in-surplus thereof, whether such
distributions be made by way of interest, distribution or otherwise.
Distributions received by Agent under (a) and (c) above shall be applied by
Secured Party against the Secured Obligations in the manner specified in Section
14 hereof.
9.3 Distributions Held in Trust. All distributions from the Company
which are received by Pledgor contrary to the provisions of this Agreement shall
be received in trust for the benefit of Secured Party, shall be segregated from
other funds of Pledgor, and shall forthwith be paid over to Agent as pledged
Collateral in the same form as so received (with any necessary endorsements).
10. Events of Default. The occurrence of any of the following shall
constitute an event of default ("Event of Default") hereunder:
10.1 Default Under Credit Agreement. The occurrence of any Event of
Default under the Credit Agreement;
10.2 Deterioration of Collateral. If, in the reasonable judgment of
Secured Party, there is any material deterioration, depreciation or impairment
of the value of the Collateral which causes the Collateral to become
unsatisfactory as to value so as to impair the Secured Party's security for the
Secured Obligations;
10.3 Company's Actions. The failure of the Company, for any reason,
to take any of the actions specified in the any affirmative covenant herein or
the taking by the Company of any of the actions specified in Sections 7.1
through 7.3 in any such case without prior written consent of Secured Party;
10.4 Bankruptcy. The insolvency or appointment of a receiver to take
charge of the business or property of the Company or (the commission of an act
of bankruptcy) the making of a general assignment for the benefit of creditors
or the filing of any petition in bankruptcy by or against the Company or for
relief under the Bankruptcy Code, as amended, or under any other laws, whether
federal or state, for the relief of debtors, now or hereafter existing, unless
the same is dismissed within sixty (60) days after the filing thereof;
10.5 Liens on Property of the Company. The initiation of steps by
any third party to obtain a lien, levy or writ of attachment or garnishment upon
substantially all of the property of the Company or to the affect any such
property by other legal process, where the same is not dismissed within thirty
(30) days after the initiation thereof;
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10.6 Inability to Pay Debts. Any written admission by the Company of
their inability to pay their debts as they mature;
10.7 Certain Transfers. Any transfer of property by the Company
under circumstances which would entitle a trustee in a bankruptcy or similar
fiduciary to avoid such transfer under the Bankruptcy Code, as amended, or under
any other laws, whether state or federal, for the relief of debtors, now or
hereafter existing;
10.8 Appointment of Receiver. The appointment of a receiver, trustee
or custodian for the Company or for any substantial part of the assets of any of
the Company or the institution of proceedings for the dissolution or the full or
partial liquidation of the Company, and such receiver or trustee shall not be
discharged within sixty (60) days of his or its appointment, or such proceedings
shall not be discharged within sixty (60) days of their commencement, or the
discontinuance of the business or a material change in the nature of the
business of any of the foregoing parties;
10.9 Dissolution of the Company, Etc. If the Company should cease
for any reason to be a going concern;
10.10 Misrepresentation. Should any material representation of the
Company to Secured Party concerning the financial condition or credit standing
of the Company or any representation or warranty of the Company contained in the
Credit Agreement or this Agreement or in any other Credit Document prove to have
been materially false or misleading when made; and
10.11 Adverse Judgments. If final judgment for the payment of money
in excess of $25,000 per Pledgor shall have been rendered by any court of
competent jurisdiction against the Pledgor and the same shall not have been
discharged or execution thereunder stayed, whether pursuant to appeal or
otherwise, within thirty (30) days of the entry of thereof, or if any final
order, ruling or direction of any competent authority is issued in a proceeding
with respect to the Pledgor which materially adversely affects the Pledgor, or
which requires a substantial or material adverse change in the business or
affairs of the Pledgor.
11. Rights and Remedies of Secured Party. Upon the occurrence of any Event
of Default hereunder, Secured Party or Agent on behalf of Secured Party may
exercise any and all of the following rights and remedies, all of which shall be
cumulative and not mutually exclusive:
11.1 Rights and Remedies Under the Credit Agreement. Secured Party
or Agent may pursue and enforce all of its rights and remedies provided under
the Credit Agreement; and
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11.2 Other Rights and Remedies. Secured Party or Agent may pursue
and enforce all of the rights and remedies provided to secured parties at law or
in equity, including, without limitation, the provisions of the Uniform
Commercial Code of the State of New York, as amended. Without limiting the
generality of the foregoing, Secured Party or Agent may sell or otherwise
dispose of the Collateral or retain it in satisfaction of the Secured
Obligations and Secured Party or Agent may obtain specific performance of any
obligation of Pledgor contained herein without the necessity of posting bond or
proving that money damages are an adequate remedy.
12. Demands, Notices Etc.; Commercially Reasonable Sale. Subject to
Section 16 hereof, all demands of performance, advertisements, notices of sale
or retention, as well as the presence of the Collateral at any sale and the
constructive possession of the Collateral by the person and conducting any sale,
except only as provided by Section 9-504(3) of the Uniform Commercial Code of
the State of New York are hereby specifically waived by Pledgor. The Secured
Party shall give Pledgor ten (10) days notice, of the time and place of any
public sale of the Collateral, or of the time after which any private sale or
other disposition of the Collateral is proposed to be made which Pledgor hereby
agrees constitutes reasonable notice. With respect to any Collateral consisting
of securities, and whether or not any of such Collateral has been effectively
registered under the Securities Act of 1933 or other applicable laws, Secured
Party or Agent on behalf of Secured Party may, in its sole and absolute
discretion, sell all or any part of such Collateral at private sale in such
manner and under such circumstances as Secured Party may deem necessary or
advisable in order that the sale may be lawfully conducted. Without limiting the
foregoing, Secured Party or Agent on behalf of Secured Party may (a) approach
and negotiate with a limited number of potential purchasers and (b) restrict the
prospective bidders or purchasers to persons who will represent and agree that
they are purchasing such Collateral for their own account for investment and not
with a view to the distribution or resale thereof. In the event that such
Collateral is sold at private sale, Pledgor agrees that if such Collateral is
sold for a price which Secured Party in good faith believes to be reasonable
under the circumstances then existing, then (i) the sale shall be deemed to be
commercially reasonable in all respects, (ii) Pledgor shall not be entitled to a
credit against any Secured Obligations in an amount in excess of the purchase
price and (iii) Secured Party shall not incur any liability or responsibility to
Pledgor in connection therewith, notwithstanding the possibility that a
substantially higher price might have been realized at a public sale. In this
regard Pledgor understands and agrees that Secured Party is under no obligation
to seek prior approval of or to make any registration statement with respect to
a "public offering" of the Collateral, that any decision of Secured Party not to
do so shall be conclusively deemed a reasonable decision of Secured Party, and
that such a decision may very strictly limit the course of conduct of Secured
Party with respect to any disposition of all or any portion of the Collateral by
Secured Party, and also may limit the extent to which or the manner in which any
subsequent transferee of all or any portion of the Collateral may dispose of the
same. Similarly, there may be other legal restrictions or limitations affecting
Secured Party in any attempt to dispose of all or any part of the Collateral
under applicable State Blue Sky or other State securities laws or similar laws
analogous in purpose or effect. Without limiting
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the generality of the foregoing, the foregoing provisions of this Section shall
be applicable if, for example, Secured Party were to transfer all or any part of
the Collateral for private placement by an investment banking firm of reputation
satisfactory to Secured Party, or if Secured Party were to place all or any part
of the Collateral privately with a purchaser or purchasers thereof.
13. Further Assurances. Pledgor further agrees to use its best efforts to
do or cause to be done all such other acts as reasonably may be necessary to
make any sale or sales of all or any portion of the Collateral pursuant to
Section 12 hereof valid and binding and in compliance with any and all
applicable requirements of law. Pledgor further agrees that Pledgor's failure to
use such best efforts will cause irreparable injury to Secured Party, that
Secured Party has no adequate remedy at law in respect to such breach and, as a
consequence, that such covenant shall be specifically enforceable against
Pledgor. Pledgor 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 terms of the Credit Agreement.
14. Application of Proceeds. The proceeds of any sale, or of collection,
of all or any part of the Collateral shall be applied by Agent as set forth in
the Credit Agreement.
15. Return of Collateral. Subject to any duty imposed by law or otherwise
to the holder of any subordinate lien on the Collateral known to Secured Party,
and subject to the direction of a court of competent jurisdiction, upon the
extinguishment of any commitment of Secured Party to make further advances under
the Credit Agreement and upon the payment in full of the Secured Obligations,
Pledgor shall be entitled to return of the Collateral. Upon payment in full of
the Secured Obligations, this Agreement shall terminate and the Agent shall
execute such termination statements or other instruments as Pledgor reasonably
may request acknowledging satisfaction and discharge of this Agreement, and each
Secured Party shall, upon request of Pledgor, duly execute and deliver to
Pledgor a copy of this Agreement marked terminated, canceled and released.
16. Obtaining of Required Approvals. To the extent the exercise by Secured
Party of any remedy afforded herein requires the consent or approval of any
governmental agency or regulatory body, including without limitation the FCC,
the right of Secured Party or Agent to exercise such remedy shall be conditioned
upon receipt by Secured Party or Agent of such consent or approval. In
furtherance of the exercise by Secured Party of the power of sale granted to it
herein, Pledgor agrees that, upon request of Secured Party or Agent and without
expense to Secured Party or Agent, Pledgor shall use its best efforts to obtain
all necessary approvals from the FCC and all other applicable federal, state and
local governmental agencies, authorities and instrumentalities for the sale by
Secured Party of the Collateral, or the exercise of any voting powers over the
Collateral, or any part thereof, or the transfer to the successful bidder or
prospective purchaser of any governmental licenses or franchises necessary to
allow it to conduct the business or activities for which the Collateral is
intended.
-13-
17. Cumulative Rights, No Waiver. The several rights and remedies of
Secured Party hereunder or referred to herein shall, to the full extent
permitted by law, be construed as cumulative, and no one of them is exclusive of
the others. No delay or omission of Secured Party in exercising any right or
remedy created by, connected with or provided in this Agreement or arising from
any Event of Default hereunder shall be construed as or deemed to be an
acquiescence therein or a waiver of such default or a waiver of or limitation
upon the right of Secured Party to exercise, at any time and from time to time
thereafter, any right or remedy under this Agreement. No waiver of any breach of
any of the covenants or conditions of this Agreement shall be construed to be a
waiver of or acquiescence in or consent to any preceding or subsequent breach of
the same of any other condition or covenant. If the performance of any Secured
Obligation is at any time secured by any other instrument or instruments, the
exercise by Secured Party of any right or remedy under any such other instrument
shall not be construed as or deemed to be a waiver of any limitation upon the
right of Secured Party to exercise, at any time and from time to time
thereafter, any right or remedy under this Agreement or under any such other
instrument. Without limiting the generality of the foregoing, Pledgor
acknowledges that the Secured Obligations are also secured by the Collateral
described in the Credit Agreement and that Secured Party may, in its absolute
discretion, proceed against any other debtor or Collateral prior to, after or
concurrently with any proceedings against Pledgor and/or the Collateral
hereunder and the order in which Secured Party may proceed against any other
debtor or Collateral shall not in any way affect Secured Party's right to
proceed against Pledgor and/or the Collateral under this Agreement.
18. Secured Party's Possession of Collateral. Each of Secured Party's and
Agent's sole duty with respect to the Collateral in its possession shall be to
use reasonable care in the custody and preservation thereof. Secured Party and
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which each of Secured Party and Agent
accords its own property, it being understood that Secured Party and Agent shall
not have any responsibility for (a) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not Secured Party or Agent has or is deemed to
have knowledge of such matters, or (b) taking any necessary steps to preserve
rights against any parties with respect to any Collateral. Under no
circumstances shall Secured Party or Agent be responsible for any injury or loss
to the Collateral, or any part thereof, arising from theft, acts of God, flood,
fire or from any other cause beyond the reasonable control of Secured Party.
19. Indemnification. Secured Party shall incur no liability if any action
taken by Secured Party or on Secured Party's behalf in good faith pursuant to
any provisions of this Agreement shall prove to be in whole or in part
inadequate or invalid and, except for claims arising from the Secured Party's
gross negligence, Pledgor agrees to indemnify and hold each of Secured Party and
Agent, and their officers, directors, partners, members, employees, agents and
attorneys free and harmless from and against any loss, liability, claim
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or damage, including without limitation, all attorneys' fees and court costs
actually incurred (a) in connection with any such action or actions, and (b) in
respect of any claims or allegations of third parties arising out of Pledgor use
and ownership of the Collateral or Secured Party's or Agent's possession of the
Collateral or its security interest therein.
20. Assignment of Obligations. Secured Party may transfer or negotiate any
Secured Obligation as and to the extent permitted by Section 9.5 of the Credit
Agreement and applicable law.
21. Modification of Secured Obligations. Pledgor consents and agrees that
Secured Party may, at any time and from time to time, in Secured Party's sole
and absolute discretion, without notice or demand, and without affecting the
enforceability or continuing effectiveness hereof: (a) supplement, modify,
amend, extend, renew, accelerate, waive or otherwise change the time for payment
or the terms of the Secured Obligations or any part thereof or any additional
security or guaranties now or hereafter held therefor; (b) enter into or give
any agreement, approval or consent with respect to the Secured Obligations or
any part thereof or any additional security or guaranties now or hereafter held
therefor; (c) accept new or additional instruments, documents or agreements in
exchange for or relative to the Secured Obligations or any part thereof; (d)
accept partial payments on the Secured Obligations; (e) receive and hold
additional security or guaranties for the Secured Obligations or any part
thereof; (f) settle, release, liquidate and/or fail to enforce any Secured
Obligation; (g) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, transfer and/or fail to enforce any other security or guaranties
now or hereafter held for the Secured Obligations or any part thereof; (h)
substitute, exchange, amend or alter any other security or guaranty now or
hereafter held for the Secured Obligations or any part thereof, whether or not
the security or guaranty received upon the exercise of such power is of the same
character or value as the security or pledge so affected; (i) release any person
from any personal liability with respect to the Secured Obligations or any part
thereof; (j) consent to the transfer of any such other security and bid and
purchase the same at any sale thereof; and/or (k) consent to any merger, change
or other restructuring or termination of the existence of the Company or any
other person, and correspondingly restructure the Secured Obligations.
22. Waivers. To the fullest extent permitted by law, Pledgor waives any
duty on the part of Secured Party to disclose to Pledgor any facts Secured Party
may now know or may hereafter know about the Company or the Company's successors
in interest (if any) regardless of whether Secured Party (i) has reason to
believe that any such facts materially increase the risk beyond the risk which
Pledgor intends to assume by executing this Agreement, (ii) has reason to
believe that these facts are unknown to Pledgor, or (ii) has a reasonable
opportunity to communicate such facts to Pledgor, it being understood and agreed
that Pledgor is fully responsible for being and keeping informed of the
financial condition of the Company or any successor in interest of the Company
and of all circumstances bearing on the risk of non-payment of any indebtedness
of the Company to Secured Party that is secured hereby.
-15-
Pledgor also waives with respect to the Company, its successor and assigns
and any other person, including other guarantors, who may have similar rights
against the Company, any and all rights of subrogation, reimbursement,
exoneration, contribution or setoff, any and all rights to participate in any
claim or remedy of Secured Party against the Company or any Collateral, and any
and all rights that could accrue to a surety against a principal, to a guarantor
against a maker or obligor, to an accommodation party against the party
accommodated or to a holder or transferee against a maker, and which Pledgor may
have or hereafter acquire against the Company or any such other person by
contract, at law or in equity in connection with or as a result of Pledgor's
execution, delivery and/or performance of this Pledge Agreement or any other
Credit Document. Pledgor shall not at any time hereafter have or assert any such
claims or rights against the Company, its successors and assigns or any such
other persons either directly or as an attempted setoff to any action commenced
against Pledgor by the Company, Secured Party or any other person. Pledgor
hereby acknowledges and agrees that this waiver is intended to be for the
benefit of the Company, as a thirty party beneficiary, as well as for the
benefit of Secured Party. Therefore, the waiver set forth herein shall remain at
all times hereafter in full force and effect, and may be enforced by the Company
in its own name and right, notwithstanding that all indebtedness and obligations
of the Company to Secured Party arising under the Credit Documents have been
repaid in full. Pledgor further agrees that, to the extent the waiver of rights
of subrogation as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation which Pledgor
may have against the Company or against any Collateral or security shall be
junior and subordinate to any right Secured Party may have against the Company
and to all right, title and interest Secured Party may have in any Collateral or
security. Secured Party may use, sell or dispose or any item of Collateral or
security as herein permitted as it sees fit without regard to any subrogation
right Pledgor may have, and upon disposition or sale, any right of subrogation
Pledgor may have shall terminate.
Pledgor acknowledges, and agrees that by virtue of this pledge, it has
specifically assumed any and all risks of bankruptcy or reorganization with
respect to the Company and that any modification of the Secured Obligations in
any bankruptcy or reorganization of the Company shall not affect Secured Party's
rights to pursue its remedies against the Collateral in respect of any Event of
Default under the original terms of the Secured Obligations as though no such
bankruptcy or reorganization case had occurred.
Before executing this Agreement, Pledgor has made such independent legal
and factual inquiries and investigations as Pledgor deemed necessary or
desirable with respect to the ability of the Company to honor all of the
Company's covenants and agreements which are secured hereby, and Pledgor has
relied solely on said independent inquiries and investigations preparatory to
entering into this Agreement. Pledgor warrants and agrees that each of the
waivers and consents set forth herein is made after consultation with legal
counsel and with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which Pledgor otherwise
may have against the Company,
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Secured Party or others, or against the Collateral, and that, under the
circumstances, the waivers and consents herein given are reasonable and not
contrary to public policy or law. If any of the waivers or consents herein are
determined to be contrary to any applicable law or public policy, such waivers
and consents shall be effective to the maximum extent permitted by law.
23. Miscellaneous.
23.1 Attorneys' Fees. Pledgor shall pay to Secured Party all
reasonable attorneys' fees and all reasonable costs and other expenses paid or
incurred by Secured Party in enforcing or exercising its rights or remedies
created by, connected with or provided in this Agreement, whether or not suit is
filed, expressly including, without limitation, all reasonable costs, attorneys
fees and expenses actually incurred by Secured Party in connection with any
insolvency, bankruptcy, reorganization, arrangement or similar proceeding
involving Pledgor or any other person that in any way affects the exercise by
Secured Party of its rights hereunder, and the proceeds of disposition of any or
all of the Collateral shall be applied to the payment of such attorneys' fees,
costs and other expenses as provided herein.
23.2 Notices. All written notices, demands and requests of any kind
which either party may be required or may desire to serve upon the other party
herein in connection with this Agreement shall be delivered in accordance with
the notice provision of the Credit Agreement.
23.3 Revival of Security Interests. To the extent permitted and as
provided by applicable law, Secured Party's rights and security interests
hereunder shall be reinstated and revived, and the enforceability of this
Agreement shall continue, with respect to any amount at any time paid on account
of Secured Obligations that thereafter shall be required to be restored or
returned by Secured Party upon the bankruptcy, insolvency or reorganization of
Pledgor, the Company or any other person, all as though such amount had not been
paid.
23.4 Amendment; Waiver; Construction. This Agreement may not be
altered or amended except by the written agreement of the parties hereto. No
provision of this Agreement or right of Secured Party hereunder can be waived
nor can Pledgor be released from its obligations hereunder except by a writing
duly executed by Secured Party. Each of the parties hereto hereby acknowledges
that it has been represented by independent counsel of its own choice throughout
all negotiations which have preceded the execution of this Agreement and that it
has executed the same with the consent and upon the advice of said independent
counsel. All parties and their respective counsel have cooperated in the
drafting and preparation of this Agreement, such that it shall be deemed to be
their joint work product and may not be construed against any party by reason of
its preparation.
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23.5 Severability. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions of
this Agreement nevertheless shall be effective.
23.6 Joint and Several Liability. If more than one Pledgor signs
this Agreement, the obligations of all such persons shall be joint and several.
23.7 Terminology. Where the context or construction requires, all
words applied in the plural shall be deemed to have been used in the singular
and vice versa, the neuter shall include the masculine and feminine and all
references to "Pledgor" shall mean all or any one or more of them. All terms
used herein shall have the same meaning as in the provisions of the New York
Uniform Commercial Code, as amended.
23.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23.9 Applicable Law. Governing Law; Jurisdiction. Waiver of Trial by
Jury:
(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT
DOCUMENTS (EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH THEREIN) SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
(b) JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS MAY BE TRIED AND
LITIGATED IN THE STATE OF NEW YORK OR, AT THE SOLE OPTION OF SECURED PARTY, IN
ANY OTHER COURT IN WHICH SECURED PARTY INITIATES LEGAL OR EQUITABLE PROCEEDINGS
AND WHICH HAS JURISDICTION OVER THE SUBJECT MATTER AND PARTIES IN CONTROVERSY.
TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT
EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION
23.9(b) AND STIPULATE THAT ANY SUCH COURT SHALL HAVE IN PERSONAM JURISDICTION
AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE,
CONTROVERSY, OR PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR THE
CREDIT DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY
ACTION AGAINST THE PLEDGOR MAY BE MADE BY
-18-
REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THEIR ADDRESS
SPECIFIED FOR NOTICES PURSUANT TO SECTION 9.1 OF THE CREDIT AGREEMENT.
(c) WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty claims and all
other common law and statutory claims. The parties hereto each (i) acknowledges
that this waiver is a material inducement for the parties to enter into a
business relationship, that the parties hereto have already relied on this
waiver in entering into this Pledge Agreement or accepting the benefits thereof,
as the case may be, and that each will continue to rely on this waiver in their
related future dealings, and (ii) further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, OR MODIFICATIONS OF THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
23.10 Agent. Agent has been appointed to act as Agent hereunder on
behalf of Secured Party pursuant to the Credit Agreement and shall act as Agent
hereunder in accordance with the provisions of this Agreement and the Credit
Agreement. Agent hereunder shall all times be the same person as the Agent under
the Credit Agreement. Resignation or removal of the Agent hereunder and
appointment of a successor agent under the Credit Agreement shall constitute
appointment as successor agent hereunder. Upon resignation or removal, Agent
shall promptly transfer all Collateral and any related records or documents to
the successor agent and shall execute and deliver any documents or instruments
or take such other actions as may be reasonably necessary in connection with the
transfer of the Collateral and substitution of agents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
"PLEDGOR"
LLC,
-----------------------------
a Virginia limited liability company
By: Inc.,
-----------------------,
a Virginia corporation,
-19-
Managing Member
By:
---------------------------------
President
MANAGEMENT, INC., a
------------------
Virginia corporation
By:
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
"SECURED PARTY AND AGENT"
AMRESCO FUNDING CORPORATION,
a Delaware corporation, individually
and as Agent
By:
---------------------------------
Its:
---------------------------------
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.,
a Bermuda limited partnership
By:
---------------------------------
Authorized Signatory
-20-
EXHIBIT D
PLEDGE AGREEMENT COVERING STOCK
This PLEDGE AGREEMENT COVERING STOCK (this "Agreement") is made and
entered into as of _______, by and among [owner of stock of managing member of
New Acquisition Company] ("Pledgor"); AMRESCO FUNDING CORPORATION, a Delaware
corporation ("AMRESCO"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P., a Bermuda
limited partnership, (collectively referred to as "Secured Party"); and AMRESCO,
as agent for Secured Party ("Agent"), and is made with reference to the
following facts:
A. [Managing member of New Acquisition Company] (the "Company"), and
Secured Party have entered into that certain Pledge of Membership Interest in
LLC of even date herewith (as hereafter amended, supplemented or otherwise
modified from time to time, the "Pledge Agreement"). [New Acquisition Company]
(the "Debtor") and Secured Party have entered into that certain Acknowledgment
and Ratification Agreement ("Ratification Agreement"), pursuant to which the
Debtor has agreed to be bound by the terms, covenants, conditions and
representations set forth in that certain Amended and Restated Credit Agreement
dated September 30, 1997 (as hereafter amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") entered into by and among
Secured Party and the Borrowers described therein;
B. Pledgor is the owner of the 100% of the issued and outstanding shares
of the stock of the Company (the "Stock");
C. Pledgor has agreed to pledge to Secured Party all of the issued and
outstanding shares of the Company as collateral for the obligations specified in
Section 2 below; and
D. Capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
and agreements hereinafter contained and for other good and valuable
consideration, the parties hereto hereby agree as follows:
1. Grant of Security Interest.
1.1 Pledge. As security for payment and performance of the Secured
Obligations specified in Section 2 hereof, Pledgor hereby pledges, assigns,
transfers and grants to Secured Party and Secured Party's successors, endorsees
and assignees a security interest in and to (a) any Stock now owned by Pledgor,
(b) all additional shares
1
of the capital stock of the Company and any other monies, securities, rights and
property issued or received in exchange therefor or with respect thereto,
including, but not limited to, any cash dividends or distributions, any shares
that may be issued to Pledgor as a stock dividend and any securities, rights or
other property which Pledgor may hereafter receive or be entitled to receive in
exchange therefor, whether upon a merger, reorganization, consolidation, stock
split or reclassification, or otherwise; and (c) any and all additions and
substitutions thereto and therefor and the proceeds of any of the foregoing
(collectively the "Collateral").
1.2 Delivery. In furtherance of the pledge, assignment, transfer and
grant of the security interest referred to in Section 1.1 hereof, Pledgor shall
(a) deliver to Agent, concurrently with the execution hereof; all certificates
or instruments representing the Collateral, stamped or marked as Secured Party
may require, together with duly executed or endorsed blank stock powers and
proxies or such other instruments of assignment or transfer relating thereto as
Secured Party may require and (b) deliver to Agent, as soon as possible after
receipt thereof; certificates and other indicia of ownership representing any
securities or other instruments referred to in Section 1.1(b) hereof; stamped or
marked as Agent may require, together with duly executed or endorsed blank stock
powers or such other instruments of assignment or transfer relating thereto as
Agent may require. Upon the occurrence and during the continuance of an Event of
Default under Section 7.1(a) or 7.1(b) of the Credit Agreement, which Event of
Default has not been cured within applicable Cure Period, Agent shall have the
right to transfer to or to register in the name of Secured Party or any of their
nominees any or all of the Collateral. Secured Party shall also have the right
to appoint one or more agents, including without limitation Agent, for the
purpose of retaining physical possession of the Collateral. In addition, Agent
shall have the. right at any time to exchange certificates or instruments
representing or evidencing any of the Collateral for certificates or instruments
of small or larger denominations.
1.3 Additional Collateral Received by Pledgor. Subject to the
provisions of Section 7 hereof; any money, securities or other properly
hereafter received by Pledgor in respect of or in exchange or substitution for
any of the Collateral, and any additional shares of the capital stock or
securities of Borrowers of whatever class or nature, shall be, and shall be
deemed to have been, received by Pledgor as trustee for Secured Party, and
Pledgor shall pay and deliver all such sums, securities and other property to
Agent immediately, without demand or notice and Pledgor shall promptly
thereafter deliver to Agent a certificate executed by a duly authorized officer
of Pledgor describing such sums, securities and other property and certifying
that the same have been duly pledged to Secured Party hereunder. The same shall
then be held as Collateral by Secured Party as security for the obligations
secured hereby or, in the case of money, applied to the indebtedness and
obligations secured hereby as provided in Section 13 hereof.
1.4 Uncertificated Securities. Notwithstanding anything to the
contrary
2
contained in Sections 1.1, 1.2 and 1.3 hereof; if any of the Collateral (whether
now owned or hereafter acquired) is evidenced by an uncertificated security,
Pledgor shall promptly notify Agent thereof and shall promptly take all actions
required to perfect the security interest of Secured Party therein under
applicable law (including, in any event under ss.ss.8-313 and 8-321 of the
Uniform Commercial Code as amended, in effect in the State of New York or other
applicable jurisdiction). Pledgor further agrees to take such actions as Secured
Party deems necessary or desirable to effect the foregoing and to permit Secured
Party to exercise any of its rights and remedies hereunder, and Pledgor agrees
to provide an opinion of counsel satisfactory to Secured Party with respect to
any such pledge of uncertificated securities promptly upon request of Secured
Party.
1.5 If Pledgor is a married individual, Pledgor acknowledges that by
this Agreement Pledgor is also granting to Secured Party a security interest in
the entire community property interest, if any, of Pledgor's spouse in and to
the Collateral.
1.6 Duties and Rights of Secured Party and Agent. Pledgor agrees
that neither Agent nor Secured Party shall have any liability of any kind or
nature whatsoever with respect to the Collateral, other than to hold, release or
dispose of the same in accordance with the terms and provisions of this
Agreement. With respect to each particular item of Collateral, the security
interest herein granted shall attach immediately upon Pledgor's execution hereof
or as soon as Pledgor acquires rights in and to such item of Collateral,
whichever is later.
2. Obligations to be Secured. Whether or not recovery upon any of the
following secured obligations is now or hereafter becomes barred by any statute
of limitations or is now or hereafter becomes otherwise unenforceable, the
security interests herein granted shall secure the following (collectively, the
"Secured Obligations"):
2.1 Obligations Under Credit Agreement. The prompt and complete
payment and performance of all of the Obligations under the Credit Agreement
(including the payment of amounts which would become due but for the operation
of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
ss.362(a) and interest which, but for the filing of a petition in bankruptcy,
would accrue on such Obligations); and
2.2 Fees and Expenses. The payment and reimbursement of all sums and
expenses, including, without limitation, attorney's fees (including allocated
costs of internal counsel), court costs and collection, legal and receivers'
expenses, advanced or incurred by Agent or Secured Party in connection with the
perfection and protection of the security interest herein panted, the
preservation or disposition of the Collateral, or any part thereof; or the
enforcement by Agent or Secured Party of any of the foregoing obligations of
Pledgor, the Borrower or any guarantor thereof to Secured Party whether upon
default by Pledgor, the Borrower or any such guarantor, or otherwise.
3
3. Representations and Warranties of Pledgor. Pledgor hereby represents
and warrants to Secured Party that:
3.1 Validity of Collateral/Title to Collateral. The issued
Collateral has been duly authorized and validly issued, is fully paid and
nonassessable and has been issued in compliance in all material respects with
all applicable federal and state securities laws. Pledgor is the sole legal and
beneficial owner of the Collateral, and, except for the security interests
granted to Secured party herein Pledgor has, and will at all times during the
term hereof have, good and marketable title to all and every part of the
Collateral, free and clear of any security interest, lien, pledge, encumbrance,
option, conditional sale contract, lease or other tide retention agreement, or
any other adverse claim of any nature whatsoever.
3.2 Nature of Collateral. The Collateral will at all times during
the term hereof constitute one hundred percent (100%) of the issued and
outstanding securities of the Company.
3.3 Priority. Upon the execution and delivery of this Agreement by
Pledgor and Agent's taking possession on behalf of Secured Party of the
Collateral, Secured Party shall have perfected security interests in and to the
Collateral having first priority for the full amount of all of the Secured
Obligations.
3.4 No Default or Required Consent. Neither the execution or
delivery of this Agreement by Pledgor nor the effectuation by Agent or Secured
Party of any of its rights or remedies herein, whether upon default or
otherwise, will result in a breach of or constitute a default under any charter
provision or bylaw of Pledgor or the Company or any other agreement or
instrument to which the Pledgor or the Company is a party or by which any of the
Collateral or the assets of the Company is bound, or violate any law or any rule
or regulation of any administrative agency or any order, writ, injunction or
decree of any court or administrative agency, nor does any of the foregoing
require the consent of any person, entity or governmental agency or any notice
or filing with any governmental or regulatory body (except as may be required in
connection with any sale or disposition of the Collateral by laws and
regulations of the FCC or by laws affecting the offering and sale of securities
generally and except for the filing of this Agreement with the FCC subsequent to
its execution).
3.5 No litigation. There is no action, legal, administrative or
other proceeding pending or threatened against Pledgor's title to or interest in
the Collateral or against Pledgor's pledge of the Collateral hereunder, nor does
Pledgor know of any basis for the assertion of any such claim.
3.6 Charter Documents and Shareholder Agreements. Accurate copies of
the Articles of Incorporation and bylaws of the Company, all irrevocable proxies
executed by Pledgor, all voting trust agreements and agreements among the
shareholders
4
of the Company in their shareholder capacity to which the Pledgor is a party,
all pre-incorporation agreements adopted by the Company, and all agreements
among shareholders or between shareholders and the Company which affect in
excess of 5% of the then outstanding capital stock of the Company on a fully
diluted basis and contain buy/sell rights, options, warrants, registration
rights, rights of first refusal, rights of co-sale or similar rights affecting
the free transferability of share ownership or control, and all amendments of
any of the foregoing (the "Shareholder Agreements") (i) have heretofore been
delivered to Secured Party (ii) have been duly authorized, executed and
delivered by the parties thereto, (iii) have not been further amended or
otherwise modified and (iv) are in full force and effect and are binding upon
and enforceable against the parties thereto in accordance with their respective
terms subject to the effect of any applicable bankruptcy or similar law
affecting creditors' rights generally and to the effect of general principles of
equity (regardless of whether considered in a proceeding in equity or at law).
There exists no default under any of the Shareholder Agreements by Pledgor, or
to Pledgor's knowledge, by any other party hereto.
4. Affirmative Covenants. Pledgor covenants that until such time as all of
the Secured Obligations are paid in full unless Secured Party shall otherwise
consent in writing:
4.1 Protection of Security and Legal Proceedings. Pledgor shall, at
its own expense, take any and all actions necessary to preserve, protect and
defend the security interest of Secured Party in the Collateral and the
perfection and priority thereof against any and all adverse claims, including
appearing in and defending any and all actions and proceedings which purport to
affect any of the foregoing; promptly reimburse Secured Party or Agent on behalf
of Secured Party for any and all sums, including reasonable costs, expenses and
actual attorneys' fees, which Secured Party or Agent on behalf of Secured Party
may pay or incur in defending, protecting or enforcing its security interest in
the Collateral or the perfection or priority thereof; or in discharging any
prior or subsequent lien or adverse claim against the Collateral or any part
thereof, or by reason of becoming or being made a party to or intervening in any
action or proceeding affecting the Collateral or the rights of Secured Party
therein, all of which actions Pledgor hereby agrees that Secured Party or Agent
on behalf of Secured Party shall have the right to take in their sole and
absolute discretion;
4.2 Authorized Sale. Pledgor shall keep the proceeds of any
collection, sale or disposition of any Collateral authorized by Secured Party in
accordance with the Credit Agreement separate from Pledgor's other property and,
until otherwise notified by Agent, shall enforce all of Pledgor's rights with
respect to any such collection, sale or disposition, maintain accurate and
complete records thereof and promptly deliver to Agent the proceeds thereof as
and when received.
4.3 Inspection. Prior to the occurrence of an Event of Default,
Pledgor shall give Secured Party and Agent such information as may be reasonably
requested
5
concerning the Collateral and permit Secured Party and its agents and
representatives (including Agent), after notice and at reasonable times, to
enter upon any premises upon which Pledgor's records concerning the Collateral
or the Company are located for the purpose of inspecting and auditing the same.
Pledgor shall also cause the Company to permit Secured Party and its agents and
representatives (including Agent) full access upon reasonable request to all
properties and records of the Company for the purpose of inspecting and auditing
the same. After the occurrence and during the continuance of an Event of
Default, Pledgor shall allow Secured Party and Agent immediate access to
Pledgor's records concerning the Collateral or the Company for the purpose of
inspecting and auditing same, including full access to all properties and
records of the Company.
4.4 Notification. Pledgor shall promptly notify Secured Party in
writing of any event which materially and adversely affects the ability of
Pledgor or Secured Party to dispose of the Collateral or the rights and remedies
of Secured Party in relation thereto, including, but not limited to, the levy of
any legal process against the Collateral and the adoption of any order,
arrangement or procedure affecting the Collateral, whether governmental or
otherwise; Pledgor shall also promptly notify Secured Party in writing of any
event which materially and adversely affects the financial condition, assets,
liabilities, business, operations or prospects of the Company in any material
respect.
4.5 Authority of Secured Party. With respect to any Collateral,
Pledgor hereby consents and agrees that the Company shall be entitled to accept
the provisions of this Agreement as conclusive evidence of the right of Secured
Party or Agent on behalf of Secured Party to effect any transfer or exercise any
right hereunder with respect to any such Collateral, notwithstanding any other
notice or direction to the contrary heretofore or hereafter given by Pledgor or
any other person to the Company or to any registrar, transfer agent or trustee
thereof.
4.6 Further Assurances. Pledgor shall from time to time make,
execute, acknowledge and deliver all such further documents, instruments and
assurances and take such further acts as reasonably may be requested by Secured
Party or Agent to perfect or preserve the security interest created by and to
carry out the intent of this Agreement. Without limiting the generality of the
foregoing, Pledgor shall, upon request of Secured Party or Agent, execute and
deliver to Secured Party such financing statements and security agreements, in
form and substance satisfactory to the Secured Party, as Secured Party may
require to effect and perfect Secured Party's security interest in the
Collateral, including any distributions or dividends paid in property other than
cash or cash equivalents.
4.7 Shareholder Agreements. Pledgor shall, at its own expense,
unless Secured Party shall otherwise consent in writing in advance:
(a) Except as to the extent otherwise provided in Section 7.1,
use
6
its best efforts to perform and observe all of the terms and provisions of each
Shareholder Agreement to be performed or observed by it, maintain each
Shareholder Agreement to which it is a party in full force and effect, take all
reasonable and prudent action to enforce in accordance with its terms each
Shareholder Agreement to which it is a party, and take all such action to such
end as may be from time to time reasonably requested by Secured Party.
(b) Furnish to Secured Party promptly after receipt thereof
copies of (i) all notices, requests and other documents, other than financial
statements, received by Pledgor under or pursuant to each Shareholder Agreement
relating to any matter requiring consent from Secured Party under Section 7.1,
(ii) all amendments to, restatements of, and newly executed, as the case may be
Shareholder Agreements, and (iii) such other information and reports regarding
the Collateral as Secured Party may reasonably request;
(c) Upon the reasonable request of Secured Party, make such
demands and requests for information and reports, or make such demands or
request for action Pledgor is entitled to make under each Shareholder Agreement,
to the Company and the parties to the respective Shareholder Agreements.
5. Negative Covenants. Pledgor covenants that (without the prior written
consent of Secured Party) until such time as all of the Secured Obligations are
paid in full and:
5.1 Sale or Hypothecation of Collateral. Pledgor shall not directly
or indirectly, whether voluntarily, involuntarily, by operation of law or
otherwise (a) exchange, lease, lend, sell, encumber or dispose of the Collateral
or any part thereof; or any of Pledgor's rights therein, or grant any option
with respect thereto, nor (b) cause, suffer or permit the Collateral to be
affected by any encumbrance, security interest, option or adverse claim of any
kind or nature whatsoever.
The inclusion of "proceeds" as a component of the Collateral shall
not be deemed a consent by Secured Party to any sale or disposition of all or
any part of the Collateral.
5.2 No Issuance of Additional Securities. Pledgor shall not cause,
suffer, or permit the Company to issue any additional securities of any class or
nature, nor to take any other act, or omit to take any act, the result of which
is to render the Collateral less than 100% of the issued and outstanding
securities of the Company.
5.3 Certain Agreements. Pledgor shall not make any compromise,
adjustment, amendment, modification, settlement, substitution or termination in
respect to the Collateral; nor cause, suffer or permit anything to be done which
might impair, or fail to do anything necessary or advisable in order to preserve
the value of the Collateral
7
and the credit interest of Secured Party therein.
6. Additional Covenants of Pledgor.
6.1 Preservation of Collateral. In case of any failure of Pledgor to
keep the Collateral free from liens or adverse claims, or to pay taxes on or in
respect thereof, or fully and punctually to keep and perform any other covenant
hereof, then after reasonable notice to Pledgor, Secured Party or Agent on
behalf of Secured Party may (but shall not be required to) pay or contest or
settle such taxes, liens or adverse claims, or any judgments based thereon, take
any action to preserve any rights of or against any prior or other parties in
connection with the Collateral, exercise managerial rights with respect to any
Collateral, make or give any presentments, demands for performance, notices of
nonperformance, protests, notices of protests, notices of dishonor or notices or
any other nature whatsoever in connection with the Collateral or the Secured
Obligations, or otherwise make good any other aforesaid failure of Pledgor.
Pledgor shall promptly reimburse Secured Party or Agent for any sums reasonably
paid or advanced by Secured Party or Agent for any such purpose, together with
interest at the rate specified in the Credit Agreement from the date of any such
advance to the date of reimbursement.
6.2 Attorney-in-Fact. Pledgor hereby appoints Agent on behalf of
Secured Party its attorney-in-fact with full power of substitution, to do any
and all acts which Pledgor is obliged by this Agreement to do and for the
purpose of carrying out the purposes of this Agreement and taking any action and
executing any instruments which Agent reasonably may deem necessary or advisable
to accomplish the purposes hereof, which appointment as attorney-in-fact is
irrevocable and coupled with an interest. Without limiting the generality of the
foregoing, after the occurrence and during the continuance of an Event of
Default, Agent on behalf of Secured Party shall have the right and power to
receive, endorse and collect all checks made payable to Pledgor representing any
payment or distribution in respect of the Collateral or any part thereof and to
give full discharge for the same, and to execute and deliver as such
attorney-in-fact on behalf of Pledgor all necessary instruments of sale,
assignment, lease and transfer of the Collateral, and any part thereof, as may
be sold, leased or otherwise disposed of pursuant to this Agreement; subject to
the prior consent of the FCC to the extent required.
7. Rights Incident to Collateral.
7.1 Irrevocable Proxy/Voting Rights. Pledgor hereby irrevocably
appoints Agent on behalf of Secured Party as Pledgor's proxy holder with respect
to the Collateral with full power and authority to vote, give consents,
ratifications and waivers and otherwise act with respect to such Collateral on
behalf of Pledgor, provided that this proxy shall be operative only upon the
occurrence and during the continuance of an Event of Default under Section
7.1(a) or 7.1(b) of the Credit Agreement, which is not
8
cured within the applicable Cure Period, or the occurrence and continuation of
an event which, with notice or lapse of time, or both, would become such an
Event of Default and which is not cured within the applicable Cure Period. This
proxy shall be irrevocable for so long as any Secured Obligation remains
outstanding. Until such time, if any, as an Event of Default which is not cured
within the applicable Cure Period occurs, or there occurs an event which, with
notice or lapse of time, or both, would become an Event of Default under Section
7.1(a) or 7.1(b) of the Credit Agreement which is not cured within the
applicable Cure Period, Pledgor shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Collateral or any part thereof for
any purpose not inconsistent with the terms of this Agreement. Without limiting
the generality of the foregoing, Pledgor shall not in Pledgor's capacity as a
shareholder of the Company, without Secured Party's prior written consent
(a) Cancel or terminate any Shareholder Agreement or consent
to any cancellation or termination thereof;
(b) Vote or consent to amend or restate the Articles of
Incorporation;
(c) Vote or consent to amend the bylaws of the Company, if
such amendment affects provisions relating to the calling or conducting of
meetings of shareholders, shareholder voting rights (including, without
limitation, quorum and super majority provisions), shareholder written consents,
shareholder proxies, the powers of directors, filling of director vacancies,
meetings of directors, voting rights of directors, written consent of directors,
action by committee of directors, or the rights of shareholders or directors to
amend the bylaws;
(d) Execute any irrevocable proxies or enter into any voting
trust agreements, or vote or consent to amend irrevocable proxies or voting
trust agreements in effect on the date hereof with respect to the Company;
(e) Enter into or vote or consent to amend any agreement among
shareholders or between shareholders and the Company to which Pledgor is a party
to reduce or eliminate registration, option, warrant, first refusal or co-sale
or similar rights running in the Pledgor's favor, or to create or increase
rights of first refusal or co-sale or similar rights attaching to, and adversely
affecting the free transferability of, the ownership or control of the
Collateral, or to restrict in any manner Pledgor's ability to freely exercise
his voting rights with respect to the Collateral;
(f) Waive any repurchase, first refusal, registration, option,
co-sale or similar right attaching to the Collateral under any of the
Shareholder Agreements; or
(g) Waive any material default under or breach of any
9
Shareholder Agreement.
7.2 Rights to Distributions. So long as no Event of Default has
occurred and is continuing the Pledgor may retain any distributions made in cash
or cash equivalents, but after the occurrence and during the continuance of an
Event of Default Pledgor shall cause the Company to pay directly to Agent on
behalf of Secured Party (a) one hundred percent (100%) of all distributions made
in the ordinary course in cash or cash equivalents in respect of any Collateral,
(b) one hundred percent (100%) of all distributions made other than in cash or
cash equivalents in respect of any Collateral, and (c) one hundred percent
(100%) of all distributions of cash or cash equivalents made in respect of any
Collateral in connection with a partial or total liquidation or dissolution of
the Company or in connection with a reduction of capital, capital surplus or
paid-in-surplus thereof, whether such distributions be made by way of dividend,
interest, distribution or otherwise. Distributions received by Agent under (a)
and (c) above shall be applied by Secured Party against the Secured Obligations
in the manner specified in Section 14 hereof.
7.3 Distributions Held in Trust. All distributions from the Company
which are received by Pledgor contrary to the provisions of this Agreement shall
be received in trust for the benefit of Secured Party, shall be segregated from
other funds of Pledgor, and shall forthwith be paid over to Agent as pledged
Collateral in the same form as so received (with any necessary endorsements).
8. Events of Default The occurrence of any of the following shall
constitute an event of default ("Event of Default") hereunder:
8.1 Default Under Credit Agreement. The occurrence of any Event of
Default under the Credit Agreement;
8.2 Deterioration of Collateral. If, in the reasonable judgment of
Secured Party, there is any material deterioration, depreciation or impairment
of the value of the Collateral which causes the Collateral to become
unsatisfactory as to value so as to impair the Secured Party's security for the
Secured Obligations;
8.3 Company's Actions. The failure of the Company, for any reason,
to take any of the actions specified in Sections 4.3, 4.5, 4.6 or 7.2 hereof or
the taking by the Company of any of the actions specified in Sections 5,1, 5.2,
or 5.3, in any such case without prior written consent of Secured Party;
8.4 Bankruptcy. The insolvency or appointment of a receiver to take
charge of the business or property of the Company or (the commission of an act
of bankruptcy) the making of a general assignment for the benefit of creditors
or the filing of any petition in bankruptcy by or against the Company or for
relief under the Bankruptcy Code, as amended, or under any other laws, whether
federal or state, for the
10
relief of debtors, now or hereafter existing, unless the same is dismissed
within sixty (60) days after the filing thereof;
8.5 Liens on Property of the Company. The initiation of steps by any
third party to obtain a lien, levy or writ of attachment or garnishment upon
substantially all of the property of the Company or to the affect any such
property by other legal process, where the same is not dismissed within thirty
(30) days after the initiation thereof;
8.6 Inability to Pay Debts. Any written admission by the Company of
their inability to pay their debts as they mature;
8.7 Certain Transfers. Any transfer of property by the Company under
circumstances which would entitle a trustee in a bankruptcy or similar fiduciary
to avoid such transfer under the Bankruptcy Code, as amended, or under any other
laws, whether state or federal, for the relief of debtors, now or hereafter
existing;
8.8 Appointment of Receiver. The appointment of a receiver, trustee
or custodian for the Company or for any substantial part of the assets of any of
the Company or the institution of proceedings for the dissolution or the full or
partial liquidation of the Company, and such receiver or trustee shall not be
discharged within sixty (60) days of his or its appointment, or such proceedings
shall not be discharged within sixty (60) days of their commencement, or the
discontinuance of the business or a material change in the nature of the
business of any of the foregoing parties;
8.9 Dissolution of the Company, Etc. If the Company should cease for
any reason to be a going concern;
8.10 Misrepresentation. Should any material representation of the
Company to Secured Party concerning the financial condition or credit standing
of the Company or any representation or warranty of the Company contained in the
Credit Agreement or this Agreement or in any other Credit Document prove to have
been materially false or misleading when made; or
8.11 Adverse Judgments. If final judgment for the payment of money
in excess of $25,000 per Pledgor or $100,000 in the aggregate for all Pledgors
shall have been rendered by any court of competent jurisdiction against the
Pledgors and the same shall not have been discharged or execution thereunder
stayed, whether pursuant to appeal or otherwise, within thirty (30) days of the
entry of thereof, or if any final order, ruling or direction of any competent
authority is issued in a proceeding with respect to the Pledgors which
materially adversely affects the Pledgors, or which requires a substantial or
material adverse change in the business or affairs of the Pledgors.
9. Rights and Remedies of Secured Party. Upon the occurrence of any Event
11
of Default hereunder, Secured Party or Agent on behalf of Secured Party may
exercise any and all of the following rights and remedies. all of which shall be
cumulative and not mutually exclusive:
9.1 Rights and Remedies Under the Credit Agreement. Secured Party or
Agent may pursue and enforce all of its rights and remedies provided under the
Credit Agreement;
9.2 Other Rights and Remedies. Secured Party or Agent may pursue and
enforce all of the rights and remedies provided to secured parties at law or in
equity, including, without limitation, the provisions of the Uniform Commercial
Code of the State of New York, as amended, but in no event may the Secured Party
or its Agent obtain any deficiency judgment against Pledgor. Without limiting
the generality of the foregoing, Secured Party or Agent may sell or otherwise
dispose of the Collateral or retain it in satisfaction of the Secured
Obligations and Secured Party or Agent may obtain specific performance of any
obligation of Pledgor contained herein without the necessity of posting bond or
proving that money damages are an adequate remedy; and
9.3 Voting Rights. Anything herein or in any other Credit Document
to the contrary notwithstanding, Pledgor shall have the sole right to freely
exercise all voting rights with respect to the Stock until the occurrence and
during the continuance of an Event of Default described in Section 7.1(a) and
7.1(b) of the Credit Agreement that is not cured within the applicable Cure
Period. Secured Party or Agent shall have the right to exercise all voting
rights with respect to the Stock only upon and during the continuance of an
Event of Default described in Section 7.1(a) or 7.1(b) of the Credit Agreement
that is not cured during the applicable Cure Period.
10. Demands. Notices Etc.; Commercially Reasonable Sale. Subject to
Section 15 hereof, all demands of performance, advertisements, notices of sale
or retention, as well as the presence of the Collateral at any sale and the
constructive possession of the Collateral by the person and conducting any sale,
except only as provided by Section 9-504(3) of the Uniform Commercial Code of
the State of New York are hereby specifically waived by Pledgor. The Secured
Party shall give Pledgor ten (10) days notice, of the time and place of any
public sale of the Collateral, or of the time after which any private sale or
other disposition of the Collateral is proposed to be made which Pledgor hereby
agrees constitutes reasonable notice. With respect to any Collateral consisting
of securities, and whether or not any of such Collateral has been effectively
registered under the Securities Act of 1933 or other applicable laws, Secured
Party or Agent on behalf of Secured Party may, in its sole and absolute
discretion, sell all or any part of such Collateral at private sale in such
manner and under such circumstances as Secured Party may deem necessary or
advisable in order that the sale may be lawfully conducted. Without limiting the
foregoing, Secured Party or Agent on behalf of Secured Party may (a) approach
and negotiate with a limited number of potential purchasers and (b) restrict the
prospective bidders or purchasers to persons
12
who will represent and agree that they are purchasing such Collateral for their
own account for investment and not with a view to the distribution or resale
thereof. In the event that such Collateral is sold at private sale, Pledgor
agrees that if such Collateral is sold for a price which Secured Party in
good faith believes to be reasonable under the circumstances then existing, then
(i) the sale shall be deemed to be commercially reasonable in all respects, (ii)
Pledgor shall not be entitled to a credit against any Secured Obligations in an
amount in excess of the purchase price and (iii) Secured Party shall not incur
any liability or responsibility to Pledgor in connection therewith,
notwithstanding the possibility that a substantially higher price might have
been realized at a public sale. In this regard Pledgor understands and agrees
that Secured Party is under no obligation to seek prior approval of or to make
any registration statement with respect to a "public offering" of the
Collateral, that any decision of Secured Party not to do so shall be
conclusively deemed a reasonable decision of Secured Party, and that such a
decision may very strictly limit the course of conduct of Secured Party with
respect to any disposition of all or any portion of the Collateral by Secured
Party, and also may limit the extent to which or the manner in which any
subsequent transferee of all or any portion of the Collateral may dispose of the
same. Similarly, there may be other legal restrictions or limitations affecting
Secured Party in any attempt to dispose of all or any part of the Collateral
under applicable State Blue Sky or other State securities laws or similar laws
analogous in purpose or effect. Without limiting the generality of the
foregoing, the foregoing provisions of this Section shall be applicable if, for
example, Secured Party were to transfer all or any part of the Collateral for
private placement by an investment banking firm of reputation satisfactory to
Secured Party, or if Secured Party were to place all or any part of the
Collateral privately with a purchaser or purchasers thereof.
11. Information As to Compliance with Law. If Secured Party determines to
exercise its right to sell any or all of the Collateral, upon written request,
Pledgor shall and shall cause each issuer of any Collateral to be sold hereunder
from time to time to furnish to Secured Party or Agent all such information as
Secured Party or Agent may reasonably request in order to determine the number
of shares and other instruments included in the Collateral which may be sold by
Secured Party or Agent on behalf of Secured Party as exempt transactions under
the Securities Act of 1933 and the rules of the Securities Exchange Commission
thereunder, as the same are from time to time in effect.
12. Further Assurances. Pledgor further agrees to use its best efforts to
do or cause to be done all such other acts as reasonably may be necessary to
make any sale or sales of all or any portion of the Collateral pursuant to
Section 10 hereof valid and binding and in compliance with any and all
applicable requirements of law. Pledgor further agrees that Pledgor's failure to
use such best efforts will cause irreparable injury to Secured Party, that
Secured Party has no adequate remedy at law in respect to such breach and, as a
consequence, that such covenant shall be specifically enforceable against
Pledgor. Pledgor hereby waives and agrees not to assert any defenses against an
action
13
for specific performance of such covenants except for a defense that no Event of
Default has occurred under the terms of the Credit Agreement
13. Application of Proceeds. The proceeds of any sale, or of collection,
of all or any part of the Stock shall be applied by Agent, without any
marshalling of assets, in the following order:
(a) first, to the payment of all of the costs and expenses of such
sale, including, without limitation, reasonable compensation to Agent, Secured
Party and their agents, attorneys and counsel, and all other expenses,
liabilities and advances made or incurred by the lender in connection therewith;
and
(b) second, to the payment in full of the principal of and premium,
if any, and interest on the Notes; and then to pay all other Obligations; and
(c) finally, to the payment to the Pledgor, his successors or
assigns, or his heirs, executors or administrators, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus remaining from such proceeds after payments of the
character referred to in Subsections (a) and (b) of this Section 13 shall have
been made.
14. Return of Collateral. Subject to any duty imposed by law or otherwise
to the holder of any subordinate lien on the Collateral known to Secured Party,
and subject to the direction of a court of competent jurisdiction, upon the
extinguishment of any commitment of Secured Party to make further advances under
the Credit Agreement and upon the payment in full of the Secured Obligations,
Pledgor shall be entitled to return of the Collateral. Upon payment in full of
the Secured Obligations, this Agreement shall terminate and the Agent shall
transfer and deliver to Pledgor, or Pledgor's nominee(s), the Collateral and all
certificates therefor, and Secured Party, at the sole expense of Pledgor, shall
execute such termination statements or other instruments as Pledgor reasonably
may request acknowledging satisfaction and discharge of this Agreement, and each
Secured Party shall, upon request of Pledgor, duly execute and deliver to
Pledgor a copy of this Agreement marked terminated, canceled and released. The
return of Collateral, shall be without recourse to Secured Party and Agent and
Secured Party and Agent shall be entitled to receive appropriate documentation
to such effect. The return of Collateral shall be effected without
representation or warranty and shall not entitle Pledgor to any right to any
endorsement.
15. Obtaining of Required Approvals. To the extent the exercise by Secured
Party of any remedy afforded herein requires the consent or approval of any
governmental agency or regulatory body, including without limitation the Federal
Communications Commission (`FCC), the right of Secured Party or Agent to
exercise such remedy, or the power to vote the Stock, shall be conditioned upon
receipt by Secured Party or Agent of such consent or approval. In furtherance of
the exercise by
14
Secured Party of the power of sale granted to it herein, Pledgor agrees that
upon request of Secured Party or Agent and without expense to Secured Party or
Agent, Pledgor shall use its best efforts to obtain all necessary approvals from
the FCC and all other applicable federal, state and local governmental agencies,
authorities and instrumentalities for the sale by Secured Party of the
Collateral, or the exercise of any voting powers over the Collateral, or any
part thereof, or the transfer to the successful bidder or prospective purchaser
of any governmental licenses or franchises necessary to allow it to conduct the
business or activities for which the Collateral is intended.
16. Cumulative Rights, No Waiver. The several rights and remedies of
Secured Party hereunder or referred to herein shall, to the full extent
permitted by law, be construed as cumulative, and no one of them is exclusive of
the others. No delay or omission of Secured Party in exercising any right or
remedy created by, connected with or provided in this Agreement or arising from
any Event of Default hereunder shall be construed as or deemed to be an
acquiescence therein or a waiver of such default or a waiver of or limitation
upon the right of Secured Party to exercise, at any time and from time to time
thereafter, any right or remedy under this Agreement. No waiver of any breach of
any of the covenants or conditions of this Agreement shall be construed to be a
waiver of or acquiescence in or consent to any preceding or subsequent breach of
the same of any other condition or covenant. If the performance of any Secured
Obligation is at any time secured by any other instrument or instruments, the
exercise by Secured Party of any right or remedy under any such other instrument
shall not be construed as or deemed to be a waiver of any limitation upon the
right of Secured Party to exercise, at any time and from time to time
thereafter, any right or remedy under this Agreement or under any such other
instrument. Without limiting the generality of the foregoing, Pledgor
acknowledges that the Secured Obligations are also secured by the Collateral
described in the Credit Agreement and that Secured Party may, in its absolute
discretion, proceed against any other debtor or Collateral prior to, after or
concurrently with any proceedings against Pledgor and/or the Collateral
hereunder and the order in which Secured Party may proceed against any other
debtor or Collateral shall not in any way affect Secured Party's right to
proceed against Pledgor and/or the Collateral under this Agreement.
17. Secured Party's Possession of Collateral. Each of Secured Party's and
Agent's sole duty with respect to the Collateral in its possession shall be to
use reasonable care in the custody and preservation thereof. Secured Party and
Agent shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which each of Secured Party and Agent
accords its own property, it being understood that Secured Party and Agent shall
not have any responsibility for (a) ascertaining or taking action with respect
to calls, conversions, exchanges, maturities, tenders or other matters relative
to any Collateral, whether or not Secured Party or Agent has or is deemed to
have knowledge of such matters, or (b) taking any necessary steps to preserve
rights against any parties with respect to any Collateral. Under no
15
circumstances shall Secured Party or Agent be responsible for any injury or loss
to the Collateral, or any part thereof, arising from theft, acts of God, flood,
fire or from any other cause beyond the reasonable control of Secured Party.
18. Indemnification. Secured Party shall incur no liability if any action
taken by Secured Party or on Secured Party's behalf in good faith pursuant to
any provisions of this Agreement shall prove to be in whole or in part
inadequate or invalid and, except for claims arising from the Secured Party's
gross negligence, Pledgor agrees to indemnify and hold each of Secured Party and
Agent, and their officers, directors, partners, shareholders, employees, agents
and attorneys free and harmless from and against any loss, liability, claim or
damage, including without limitation, all attorneys' fees and court costs
actually incurred (a) in connection with any such action or actions, and (b) in
respect of any claims or allegations of third parties arising out of Pledgors
use and ownership of the Collateral or Secured Party's or Agent's possession of
the Collateral or its security interest therein.
19. Assignment of Obligations. Secured Party may transfer or negotiate any
Secured Obligation as and to the extent permitted by Section 9.5 of the Credit
Agreement and applicable law.
20. Modification of Secured Obligations. Pledgor consents and agrees that
Secured Party may, at any time and from time to time, in Secured Party's sole
and absolute discretion, without notice or demand, and without affecting the
enforceability or continuing effectiveness hereof: (a) supplement, modify,
amend, extend, renew, accelerate, waive or otherwise change the time for payment
or the terms of the Secured Obligations or any part thereof or any additional
security or guaranties now or hereafter held therefor; (b) enter into or give
any agreement, approval or consent with respect to the Secured Obligations or
any part thereof or any additional security or guaranties now or hereafter held
therefor; (c) accept new or additional instruments, documents or agreements in
exchange for or relative to the Secured Obligations or any part thereof; (d)
accept partial payments on the Secured Obligations; (e) receive and hold
additional security or guaranties for the Secured Obligations or any part
thereof; (f) settle, release, liquidate and/or fail to enforce any Secured
Obligation; (g) release, reconvey, terminate, waive, abandon, fail to perfect,
subordinate, transfer and/or fail to enforce any other security or guaranties
now or hereafter held for the Secured Obligations or any part thereof; (h)
substitute, exchange, amend or alter any other security or guaranty now or
hereafter held for the Secured Obligations or any part thereof, whether or not
the security or guaranty received upon the exercise of such power is of the same
character or value as the security or pledge so affected; (i) release any person
from any personal liability with respect to the Secured Obligations or any part
thereof; (j) consent to the transfer of any such other security and bid and
purchase the same at any sale thereof; and/or (k) consent to any merger, change
or other restructuring or termination of the corporate existence of the Company
or any other person, and correspondingly restructure the Secured Obligations.
16
21. Waivers. To the fullest extent permitted by law, Pledgor waives any
duty on the part of Secured Party to disclose to Pledgor any facts Secured Party
may now know or may hereafter know about the Company or the Company's successors
in interest (if any) regardless of whether Secured Party (i) has reason to
believe that any such facts materially increase the risk beyond the risk which
Pledgor intends to assume by executing this Agreement, (ii) has reason to
believe that these facts are unknown to Pledgor, or (ii) has a reasonable
opportunity to communicate such facts to Pledgor, it being understood and agreed
that Pledgor is fully responsible for being and keeping informed of the
financial condition of the Company or any successor in interest of the Company
and of all circumstances bearing on the risk of non-payment of any indebtedness
of the Company to Secured Party that is secured hereby.
Pledgor also waives with respect to the Company, its successor and
assigns and any other person, including other guarantors, who may have similar
rights against the Company, any and all rights of subrogation, reimbursement,
exoneration, contribution or setoff, any and all rights to participate in any
claim or remedy of Secured Party against the Company or any Collateral, and any
and all rights that could accrue to a surety against a principal, to a guarantor
against a maker or obligor, to an accommodation party against the party
accommodated or to a holder or transferee against a maker, and which Pledgor may
have or hereafter acquire against the Company or any such other person by
contract, at law or in equity in connection with or as a result of Pledgor's
execution, delivery and/or performance of this Pledge Agreement or any other
Credit Document. Pledgor shall not at any time hereafter have or assert any such
claims or rights against the Company, its successors and assigns or any such
other persons either directly or as an attempted setoff to any action commenced
against Pledgor by the Company, Secured Party or any other person. Pledgor
hereby acknowledges and agrees that this waiver is intended to be for the
benefit of the Company, as a thirty party beneficiary, as well as for the
benefit of Secured Party. Therefore, the waiver set forth herein shall remain at
all times hereafter in full force and effect, and may be enforced by the Company
in its own name and right, notwithstanding that all indebtedness and obligations
of the Company to Secured Party arising under the Credit Documents have been
repaid in full. Pledgor further agrees that, to the extent the waiver of rights
of subrogation as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation which Pledgor
may have against the Company or against any Collateral or security shall be
junior and subordinate to any right Secured Party may have against the Company
and to all right, title and interest Secured Party may have in any Collateral or
security. Secured Party may use, sell or dispose or any item of Collateral or
security as herein permitted as it sees fit without regard to any subrogation
right Pledgor may have, and upon disposition or sale, any right of subrogation
Pledgor may have shall terminate.
Pledgor acknowledges, and agrees that by virtue of this pledge, it
has specifically assumed any and all risks of bankruptcy or reorganization with
respect to the Company and that any modification of the Secured Obligations in
any bankruptcy or
17
reorganization of the Company shall not affect Secured Party's rights to pursue
its remedies against the Collateral in respect of any Event of Default under the
original terms of the Secured Obligations as though no such bankruptcy or
reorganization case had occurred.
Before executing this Agreement, Pledgor has made such independent
legal and factual inquiries and investigations as Pledgor deemed necessary or
desirable with respect to the ability of the Company to honor all of the
Company's covenants and agreements which are secured hereby, and Pledgor has
relied solely on said independent inquiries and investigations preparatory to
entering into this Agreement. Pledgor warrants and agrees that each of the
waivers and consents set forth herein is made after consultation with legal
counsel and with full knowledge of their significance and consequences, with the
understanding that events giving rise to any defense or right waived may
diminish, destroy or otherwise adversely affect rights which Pledgor otherwise
may have against the Company, Secured Party or others, or against the
Collateral, and that under the circumstances, the waivers and consents herein
given are reasonable and not contrary to public policy or law. If any of the
waivers or consents herein are determined to be contrary to any applicable law
or public policy, such waivers and consents shall be effective to the maximum
extent permitted by law.
22. Miscellaneous.
22.1 Attorneys' Fees. Pledgor shall pay to Secured Party all
reasonable attorneys' fees and all reasonable costs and other expenses paid or
incurred by Secured Party in enforcing or exercising its rights or remedies
created by, connected with or provided in this Agreement, whether or not suit is
filed, expressly including, without limitation, all reasonable costs, attorneys
fees and expenses actually incurred by Secured Party in connection with any
insolvency, bankruptcy, reorganization, arrangement or similar proceeding
involving Pledgor or any other person that in any way affects the exercise by
Secured Party of its rights hereunder, and the proceeds of disposition of any or
all of the Collateral shall be applied to the payment of such attorneys' fees,
costs and other expenses as provided herein.
22.2 Notices. All written notices, demands and requests of any kind
which either party may be required or may desire to serve upon the other party
herein in connection with this Agreement shall be delivered in accordance with
the notice provision of the Credit Agreement.
22.3 Revival of Security Interests. To the extent permitted and as
provided by applicable law, Secured Party's rights and security interests
hereunder shall be reinstated and revived, and the enforceability of this
Agreement shall continue, with respect to any amount at any time paid on account
of Secured Obligations that thereafter shall be required to be restored or
returned by Secured Party upon the bankruptcy, insolvency or reorganization of
Pledgor, the Company or any other person,
18
all as though such amount had not been paid.
22.4 Amendment; Waiver, Construction. This Agreement may not be
altered or amended except by the written agreement of the parties hereto. No
provision of this Agreement or right of Secured Party hereunder can be waived
nor can Pledgor be released from its obligations hereunder except by a writing
duly executed by Secured Party. Each of the parties hereto hereby acknowledges
that it has been represented by independent counsel of its own choice throughout
all negotiations which have preceded the execution of this Agreement and that it
has executed the same with the consent and upon the advice of said independent
counsel. All parties and their respective counsel have cooperated in the
drafting and preparation of this Agreement, such that it shall be deemed to be
their joint work product and may not be construed against any party by reason of
its preparation.
22.5 Severability. Should any one or more provisions of this
Agreement be determined to be illegal or unenforceable, all other provisions of
this Agreement nevertheless shall be effective.
22.6 Joint and Several Liability. If more than one Pledgor signs
this Agreement, the obligations of all such persons shall be joint and several.
22.7 Terminology. Where the context or construction requires, all
words applied in the plural shall be deemed to have been used in the singular
and vice versa, the neuter shall include the masculine and feminine and all
references to "Pledgor" shall mean all or any one or more of them. All terms
used herein shall have the same meaning as in the provisions of the New York
Uniform Commercial Code, as amended.
22.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
22.9 Applicable Law, Governing Law; Jurisdiction, Waiver of Trial by
Jury:
(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
(EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH THEREIN) SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES.
(b) JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
THE PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS MAY BE TRIED AND LITIGATED IN
THE STATE
19
OF NEW YORK OR, AT THE SOLE OPTION OF SECURED PARTY, IN ANY OTHER COURT IN WHICH
SECURED PARTY INITIATES LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
JURISDICTION OVER THE SUBJECT MATTER AND PARTIES IN CONTROVERSY. TO THE EXTENT
THEY MAY LEGALLY DO SO, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT EACH MAY HAVE
TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 22.9(b) AND
STIPULATE THAT ANY SUCH COURT SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER
EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR THE CREDIT DOCUMENTS.
SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST
THE PLEDGOR MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THEIR ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 9.1 OF THE
CREDIT AGREEMENT.
(c) WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. The parties hereto each (i) acknowledges that this waiver is a
material inducement for the parties to enter into a business relationship, that
the parties hereto have already relied on this waiver in entering into this
Pledge Agreement or accepting the benefits thereof, as the case may be, and that
each will continue to rely on this waiver in their related future dealings, and
(ii) further warrants and represents that each has reviewed this waiver with its
legal counsel, and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. This waiver IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, OR MODIFICATIONS OF THIS
AGREEMENT. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
22.10 Agent. Agent has been appointed to act as Agent hereunder on
behalf of Secured Party pursuant to the Credit Agreement and shall act as Agent
hereunder in accordance with the provisions of this Agreement and the Credit
Agreement. Agent hereunder shall all times be the same person as the Agent under
the Credit Agreement. Resignation or removal of the Agent hereunder and
appointment of a successor agent under the Credit Agreement shall constitute
appointment as successor agent hereunder Upon resignation or removal, Agent
shall promptly transfer all Collateral and any related records or documents to
the successor agent and shall execute
20
and deliver any documents or instruments or take such other actions as may be
reasonably necessary in connection with the transfer of the Collateral and
substitution of agents.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
"PLEDGOR"
_____________ Holdings, Inc.,
By:
-------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, President
"SECURED PARTY AND AGENT"
AMRESCO FUNDING CORPORATION,
a Delaware corporation, individually and
as Agent
By:
-------------------------------------
Its:
-------------------------------------
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS
L.P., a Bermuda limited partnership
By:
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Authorized Signatory
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