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EXHIBIT 10.2
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SENIOR CREDIT AGREEMENT
dated as of
June 26, 1997
among
CHANCELLOR BROADCASTING COMPANY,
as Borrower,
THE LENDERS named herein
and
BANKERS TRUST NEW YORK CORPORATION, as Agent
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TABLE OF CONTENTS
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RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
1.3. Other Definitional Provisions; Anniversaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2 AMOUNT AND TERMS OF BRIDGE LOAN COMMITMENT AND BRIDGE LOAN; NOTES . . . . . . . . . . . . . . . . . . . . 27
2.1. Bridge Loan and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
A. Bridge Loan Commitment; Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
B. Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
C. Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
D. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
E. Maturity of Bridge Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
F. Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.2. Interest on the Bridge Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
A. Rate of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
B. Interest Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
C. Post-Maturity Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.4. Prepayments and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
A. Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
B. Manner and Time of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
C. Payments on Non-Business Days . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
D. Notation of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.5. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
A. Bridge Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
B. Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3 CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.1. Conditions to Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 4 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.1. Organization and Good Standing; Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.2. Authorization and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.3. No Conflicts or Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.4. Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.5. Properties; Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.6. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.7. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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4.8. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.9. Compliance with Contracts, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.10. No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.11. Use of Proceeds; Margin Stock, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.12. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.13. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.14. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.15. Government Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.16. Capital Structure and Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.17. Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.19. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.20. Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
4.21. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.22. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.23. Broker's or Finder's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 5 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.1. Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.2. Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.3. Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
5.4. Maintenance of Properties; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.5. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.6. Equal Security for Loan and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.7. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.8. Maintenance of Accurate Records, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.9. ERISA Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
5.10. Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
5.11 Environmental Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.1. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
6.2. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.3. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
6.4. Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
6.5. Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
6.6. Restriction on Fundamental Changes, Asset Purchases or Sales . . . . . . . . . . . . . . . . . . . . . 67
6.7. Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries . . . . . . . . . . . . . 68
6.8. Restrictions on Additional Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.9. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
6.10. Subsidiary Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
6.11. Business Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
6.12. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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SECTION 7 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.1. Failure To Make Payments When Due . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
7.2. Default in Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.3. Breach of Certain Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.4. Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.5. Other Defaults Under This Agreement or the Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.6. FCC Denial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
7.7. Involuntary Bankruptcy; Appointment of Custodian, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 74
7.8. Voluntary Bankruptcy; Appointment of Custodian, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.9. Judgments and Attachments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
7.10. Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8 THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
8.1. Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
8.2. Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
8.3. Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
8.4. Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
8.5. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
8.6. Nonreliance on Agent and Other Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
8.7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
8.8. Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
8.9. Resignation of the Agent; Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 9 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.1. Representation of the Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
9.2. Participations in and Assignments or Syndication of the Bridge Loan and Notes . . . . . . . . . . . . . 79
9.3. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
9.4. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.5. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.6. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
9.7. Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.8. Entirety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.10. Survival of Warranties and Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
9.11. Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . 85
9.12. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
9.13. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
9.14. Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.15. Successors and Assigns; Subsequent Holders of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.16. Counterparts; Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
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9.17. Consent to Jurisdiction; Venue; Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.18. Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
9.19. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.20. Waiver of Stay, Extension or Usury Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.21. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
9.22. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.23. Replacement of Lenders Under Certain Circumstances. . . . . . . . . . . . . . . . . . . . . . . . . . 92
SIGNATURE PAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
SCHEDULES
A EXISTING LIENS
B EXISTING INVESTMENTS
C INTELLECTUAL PROPERTY
D ENVIRONMENTAL MATTERS
E PERMITS
F EXISTING INDEBTEDNESS
EXHIBITS
I FORM OF BRIDGE NOTE
II FORM OF COMPLIANCE CERTIFICATE
III FORM OF NOTICE OF BORROWING
IV FORM OF OPINION OF WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP -
COUNSEL FOR THE COMPANY
V FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ - COUNSEL FOR THE LENDER
VI OFFICERS' CERTIFICATE
VII SECRETARY CERTIFICATE
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This Senior Credit Agreement is dated as of June 26, 1997, and
entered into by and among CHANCELLOR BROADCASTING COMPANY, a Delaware
corporation (the "Company"), the Lenders named on the signature pages hereto
(collectively, the "Lenders") and Bankers Trust New York Corporation ("Bankers
Trust"), as agent for the Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, the Company desires that the Lenders extend a senior credit
facility to the Company in connection with the Acquisition (as defined herein);
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree as follows:
SECTION 1 DEFINITIONS
1.1. Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings:
"Acquisition" means the acquisition pursuant to the Acquisition
Agreement by Chancellor of certain subsidiaries of Viacom International Inc.
that own and operate radio broadcast stations in Los Angeles, California,
Chicago, Illinois, and Detroit, Michigan.
"Acquisition Agreement" means the Joint Purchase Agreement dated
February 19, 1997 by and between the Company, Chancellor, Evergreen and
Evergreen L.A. relating to the Acquisition.
"Affiliate," as applied to any Person, means any other Person directly
or indirectly controlling, controlled by or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means (i) the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise, or (ii) the ownership of more than 10%
of the voting securities of that Person; provided that neither Bankers Trust
nor any of its Affiliates shall be treated as an Affiliate of the Company or of
any Subsidiary of the Company.
"Agent" has the meaning ascribed to such term in the introduction to
this Agreement.
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"Agreement" means this Senior Credit Agreement dated as of June 26,
1997, as it may be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
"Amount of Unfunded Benefit Liability" means, with respect to any
Pension Plan, (i) if set forth on the most recent actuarial valuation report
with respect to such Pension Plan, the amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA) and (ii) otherwise, the excess of
(a) the greater of the current liability (as defined in Section 412(l)(7) of
the Internal Revenue Code) or the actuarial present value of the accrued
benefits with respect to such Pension Plan over (b) the market value of the
assets of such Pension Plan.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
lease, assignment, transfer or other disposition for value (including, without
limitation, pursuant to any amalgamation, merger or consolidation or pursuant
to any sale-and-leaseback transaction, but excluding the granting of any Lien),
not including the granting of a Lien, by the Company or by any of its
Subsidiaries to any Person other than the Company or any of its Wholly Owned
Subsidiaries (any such transaction, a "disposition") of (i) any of the stock of
any of the Company's Subsidiaries, (ii) substantially all of the assets of any
division or line of business of the Company or of any of its Subsidiaries or
(iii) any other assets (whether tangible or intangible) of the Company or of
any of its Subsidiaries; excluding any disposition of stock or assets in any
single transaction or related series of transactions the aggregate value of
which is equal to $1,000,000 or less.
"Bank Financing" means the secured loan facilities made available to
Chancellor in the committed amount of $750 million pursuant to the Bank
Financing Documents.
"Bank Financing Document" means the Amended and Restated Credit
Agreement among the Company, Chancellor, various Banks, ▇▇▇▇▇▇▇ Sachs Credit
Partners L.P., as Documentation Agent, NationsBank of Texas, N.A. and Toronto
Dominion (Texas), Inc., as Syndication Agent and Bankers Trust Company, as
Managing Agent and Arranger, dated as of February 14, 1996 and Amended and
Restated as of January 23, 1997 and further Amended and Restated as of July 2,
1997, relating to the Bank Financing and the other related documents executed
in connection therewith, in each case as in effect on the Closing Date.
"Bankers Trust" means Bankers Trust New York Corporation, as Agent for
the Lenders hereunder.
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"Bankruptcy Law" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute or any
other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding-up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
"Bankruptcy Order" means any court order made in a proceeding pursuant
to or within the meaning of any Bankruptcy Law, containing an adjudication of
bankruptcy or insolvency, or providing for liquidation, winding-up, dissolution
or reorganization, or appointing a custodian of a debtor or of all or any
substantial part of a debtor's property, or providing for the staying,
arrangement, adjustment or composition of indebtedness or other relief of a
debtor.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any duly authorized committee of that Board.
"Borrowing" shall mean the borrowing of a Bridge Loan from all of the
Lenders having a Bridge Loan Commitment on a given date.
"Bridge Commitment Letter" means the letter dated May 30, 1997
governing the commitment of Bankers Trust to provide the Bridge Loan to the
Company.
"Bridge Loan" has the meaning ascribed to such term in Section 2.1A.
"Bridge Loan Commitment" has the meaning ascribed to such term in
Section 2.1A.
"Business Day" means any day excluding Saturday, Sunday and any day
that is a legal holiday under the laws of New York, New York or is a day on
which banking institutions therein located are authorized or required by law or
other governmental action to close.
"Capital Lease," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is required to be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including,
without limitation, each class of Common Stock and Preferred Stock of such
Person
9
-4-
and (ii) with respect to any Person that is not a corporation, any and all
partnership or other equity interests of such Person.
"Capitalized Lease Obligation" means obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Indebtedness represented by such obligations shall be
the capitalized amount of such obligations determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having one of the two highest ratings
obtainable from either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors
Service, Inc.; (iii) commercial paper maturing no more than one year from the
date of creation thereof and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Corporation or at least P-1 from ▇▇▇▇▇'▇
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
maturing within one year from the date of acquisition thereof issued by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia or any U.S. branch of a foreign bank
having at the date of acquisition thereof combined capital and surplus of not
less than $200,000,000; (v) repurchase obligations with a term of not more than
ninety days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(iv) above; and (vi) investments in money market funds that invest
substantially all their assets in securities of the types described in clauses
(i) through (v) above.
"Cash Proceeds" means, with respect to any Asset Sale, cash payments
(including any cash received by way of deferred payment pursuant to, or
amortization of, a note receivable or otherwise but only as and when so
received) received from such Asset Sale.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. Section 9601 et seq.
10
-5-
"Chancellor" means Chancellor Radio Broadcasting Company, a Delaware
corporation and wholly owned subsidiary of the Company.
"Chancellor Broadcasting Licensee" means Chancellor Broadcasting
Licensee Company, a Delaware corporation.
"Chancellor Indentures" means the indenture dated as of February 14,
1996 by and among Chancellor, the guarantor named therein and U.S. Trust
Company of Texas, N.A. as trustee, under which Chancellor's 9 3/8% Senior
Subordinated Notes due 2004 were issued as in effect on the date hereof and the
indenture dated as of June 24, 1997 by and among Chancellor, the guarantors
named therein and U.S. Trust Company of Texas, N.A. as trustee, under which
Chancellor's 8 3/4% Senior Subordinated Notes due 2007 were issued as in effect
on the date hereof.
"Chancellor Media" means Chancellor Media Corporation as the survivor
of the Evergreen Merger.
"Change of Control" means (i) the Company shall cease to own
beneficially 100% of the capital stock (other than the Series A Exchangeable
Preferred Stock and the Exchangeable Preferred Stock) of Chancellor, or
Chancellor or a Wholly Owned Subsidiary of the Company shall cease to own
beneficially 100% of the capital stock of the Chancellor Broadcasting Licensee,
(ii) for any reason whatsoever any "Person" or "group" (as such terms are used
in Sections 13(d) and 14(d) of the Exchange Act), excluding HM Group, is or
becomes the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under
the Exchange Act), directly or indirectly, of more than the greater of (x) 15%
of the then outstanding Voting Stock of the Company or (y) the percentage of
the then outstanding Voting Stock of the Company owned beneficially by the HM
Group, (iii) the Board of Directors of the Company shall cease to consist of a
majority of Continuing Directors, (iv) a "Change of Control" under and as
defined in the Series A Exchangeable Preferred Stock Documents, the
Exchangeable Preferred Stock Documents or after any issuance thereof, the
12-1/4% Junior Exchange Debentures or 12% Junior Exchange Debentures shall have
occurred or (v) the Evergreen Transaction shall have been consummated.
"Change of Control Date" has the meaning ascribed to such term in
Section 2.4A(iv).
"Change of Control Offer" has the meaning ascribed to such term in
Section 2.4A(iv).
"Closing Date" means July 2, 1997.
"Commission" means the Securities and Exchange Commission.
▇▇
-▇-
"▇▇▇▇▇▇ ▇▇▇▇▇" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of, such Person's common stock, whether outstanding on
the Closing Date or issued after the Closing Date, and includes, without
limitation, all series and classes of such common stock.
"Communications Act" means the Communications Act of 1934, as amended,
and any successor statute.
"Company" has the meaning ascribed to such term in the introduction to
this Agreement.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit II delivered to the Agent by the Company pursuant to Section
5.1(vi)(b).
"Contested Claim" means any Tax, Indebtedness or other claim or
liability (i) the validity or amount of which is being diligently contested in
good faith, (ii) for which adequate reserve, or other appropriate provision, if
any, as required in conformity with GAAP shall have been made and (iii) with
respect to which any right to execute upon or sell any assets of the Company or
of any of its Subsidiaries has not matured or has been and continues to be
effectively enjoined, superseded or stayed.
"Contingent Obligation," as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or
as to which that Person is otherwise liable for reimbursement of drawings or
(iii) under Interest Rate Agreements and Currency Agreements. Contingent
Obligations shall include, without limitation, (a) the direct or indirect
guaranty, endorsement (otherwise than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another, (b) the obligation to make
take-or-pay or similar payments if required regardless of non-performance by
any other party or parties to an agreement, and (c) any liability of such
Person for the obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or dis-
12
-7-
charge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (Y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another
if, in the case of any agreement described under subclauses (X) or (Y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence, provided, however, that the term "Contingent Obligation"
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise supported or,
if less, the maximum reasonably anticipated liability in respect thereto
(assuming the primary obligor is required to perform thereunder) as determined
in good faith.
"Continuing Director" means, as of the date of determination, any
Person who (i) was a member of the Board of Directors of the Company on the
Closing Date, (ii) was nominated for election or elected to the Board of
Directors of the Company with the affirmative vote of a majority of the
Continuing Directors who were members of such Board of Directors at the time of
such nomination or election or (iii) is a member of the HM Group.
"Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or of any indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument
to which that Person is a party or by which it or any of its properties is
bound or to which it or any of its properties is subject.
"Controlled Group" means (i) a controlled group of corporations as
defined in Section 1563(a) of the Internal Revenue Code or (ii) a group of
trades or businesses under common control, as defined in Section 414(c) of the
Internal Revenue Code, of which the Company is a part or becomes a part.
"Covered Taxes" shall have the meaning ascribed to such term in
Section 9.19.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect the Company against
fluctuations in currency values.
"Custodian" means any receiver, interim receiver, receiver and
manager, trustee, assignee, liquidator, sequestrator or similar official
charged with maintaining possession or control over property for one or more
creditors, whether under any Bankruptcy Law or otherwise.
13
-8-
"Defaulting Lender" means any Lender with respect to which a Lender
Default is in effect.
"Dinetz" means ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇.
"Disqualified Capital Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event (other than an
event that would constitute a Change of Control), (i) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the sole option of the holder thereof (except upon the occurrence
of a Change of Control), in whole or in part, on or prior to the final maturity
date of the Notes or (ii) is convertible into or exchangeable for (at the
option of the holder thereof) (a) debt securities or (b) any Capital Stock
referred to in (i) above, in each case at any time prior to the final maturity
of the Notes; provided that only the portion of Capital Stock that so matures
or is mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such final maturity
date shall be deemed to be Disqualified Capital Stock.
"Dollars" or the sign "$" means the lawful money of the United States
of America.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States of America or any state thereof; (ii) a savings
and loan association or savings bank organized under the laws of the United
States or any state thereof; (iii) a commercial bank organized under the laws
of any other country or a political subdivision thereof; provided that (x) such
bank is acting through a branch or agency located in the United States or (y)
such bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity that is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) that
extends credit or buys loans as one of its businesses, including, but not
limited to, insurance companies, mutual funds and lease financing companies, in
each case (under clauses (i) through (iv) above) that is reasonably acceptable
to the Company and the Agent; and (B) the Lenders and any Affiliate of the
Lenders.
"EMHC" means Evergreen Mezzanine Holdings Corporation, a Delaware
corporation and wholly owned subsidiary of Evergreen.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA (i) that is, or, at any time within the five calendar
years immediately preceding
14
-9-
the date hereof, was at any time, maintained or contributed to by the Company
or Chancellor or any of their respective ERISA Affiliates or (ii) with respect
to which the Company or its Subsidiaries retains any liability, including any
potential joint and several liability as a result of an affiliation with an
ERISA Affiliate or a party that would be an ERISA Affiliate except for the fact
the affiliation ceased more than five calendar years prior to the date hereof.
"Environmental Claim" means any and all administrative, regulatory or
judicial actions, suits, demand letters, directives, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any way
to any Environmental Law or any permit issued, or any approval given, under any
such Environmental Law (hereafter, "Claims"), including, without limitation,
(a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
(including, without limitation, natural resource damages), cost recovery, or
fines or other penalties pursuant to any applicable Environmental Law, and (b)
and all Claims by any third party seeking damages including, without
limitation, natural resource damages), cost recovery, or fines or other
penalties], contribution, indemnification, cost recovery, compensation,
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of Hazardous Materials
(including, without limitation, the emission, discharge, release, threatened
release, use, handling, transportation, storage or disposal of Hazardous
Materials).
"Environmental Law" means any applicable Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline or written policy, and any rule of common law, in the case of each of
the foregoing now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent such order,
decree or judgment is binding on the Company or Chancellor, relating to the
environment, employee health and safety or Hazardous Material, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act
of 1990, 33 U.S.C. Section 2701 et seq.; the Emergency Planning and the
Community Right-to-Know Act of 1986, 42 U.S.C. Section [11001] et seq.; the
Hazardous materials Transportation Act, 49 U.S.C. Section 1801 et seq.; and
the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; (to the
extent it regulates occupational exposure to Hazardous Materials); and any
state or local coun-
15
-10-
terparts or equivalents, in each case as amended from time to time.
"Environmental Lien" means a Lien in favor of a Tribunal or other
Person (i) for any liability under an Environmental Law or (ii) for damages
arising from or costs incurred by such Tribunal or other Person in response to
a release or threatened release of hazardous or toxic waste, substance or
constituent into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate," as applied to any Person, means (i) any corporation
that is, or was at any time within the five calendar years immediately
preceding the date hereof, a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of which that
Person is, or was at any time within the five calendar years immediately
preceding the date hereof, a member; (ii) any trade or business (whether or not
incorporated) that is, or was at any time within the five calendar years
immediately preceding the date hereof, a member of a group of trades or
businesses under common control within the meaning of Section 414(c) of the
Internal Revenue Code of which that Person is, or was at any time within the
five calendar years immediately preceding the date hereof, a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause (ii)
above is, or was at any time within the five calendar years immediately
preceding the date hereof, a member.
"ERISA Event" means (i) a Reportable Event; (ii) the failure to meet
the minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (iii) the provision by the administrator of any Pension
Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of ERISA; (iv)
the withdrawal by the Company or any of its respective ERISA Affiliates from
any Pension Plan with two or more contributing sponsors or the termination of
any such Pension Plan resulting in liability pursuant to Sections 4063 or 4064
of ERISA; (v) the institution by the PBGC of
16
-11-
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which might reasonably be expected to constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on the Company or any of its
respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal by
the Company or any of its respective ERISA Affiliates in a complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or the receipt
by the Company or any of its respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission that could reasonably be expected to give rise to the
imposition on the Company or any of its respective ERISA Affiliates of material
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in
respect of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan
other than a Multiemployer Plan or the assets thereof, or against the Company
or any of its respective ERISA Affiliates in connection with any such Employee
Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the
failure of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to qualify under
Section 401(a) of the Internal Revenue Code, or the failure of any trust
forming part of any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a
material Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue
Code or pursuant to ERISA with respect to any Pension Plan.
"Event of Default" means each of the events set forth in Section 7.
"Evergreen" means Evergreen Media Corporation, a Delaware corporation
and the direct or indirect holding company of Evergreen L.A.
"Evergreen L.A." means Evergreen Media Corporation of Los Angeles, a
Delaware corporation.
"Evergreen Merger" means each of (i) the merger of the Company with
and into EMHC with EMHC as the surviving company and the merger of Chancellor
with and into Evergreen L.A. with Evergreen L.A. as the surviving company,
each pursuant to the Merger Agreement.
17
-12-
"Evergreen-Viacom Acquisition" means the acquisition by Evergreen of
the radio broadcasting assets of Viacom International Inc. relating to
operations in New York, New York, and Washington, D.C.
"Evergreen-Viacom Acquisition Agreements" has the meaning ascribed to
such term in Section 3.1H.
"Evergreen-Viacom Transactions" means the Evergreen Viacom Acquisition
and the related financing.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and any successor statute.
"Exchangeable Preferred Stock" shall mean Chancellor's 12%
Exchangeable Preferred Stock due 2009.
"Exchangeable Preferred Stock Documents" shall mean each document
relating to the Exchangeable Preferred Stock (including, without limitation,
the 12% Junior Exchange Debenture Indenture and all documents relating
thereto).
"Facilities" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by the Company, its
Subsidiaries or any of their respective predecessors in interest.
"FCC" shall mean the Federal Communications Commission or any
successor thereto.
"Foreign Plans" means any plan, program, policy, arrangement or
agreement maintained or contributed to by, or entered into with, either the
Company or Chancellor with respect to employees employed outside the United
States.
"GAAP" means those generally accepted accounting principles and
practices that are recognized as such by The Financial Accounting Standards
Board and that are consistently applied for all periods after the date hereof
so as to properly reflect the financial conditions, and the results of
operations and changes in financial position, of the Company and its
Subsidiaries, except that any accounting principle or practice changed with
the concurrence of the Company's independent public accountants or required to
be changed in order to continue as a generally accepted accounting principle or
practice may be so changed.
"Hazardous Material" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric
18
-13-
fluid containing levels of polychlorinated biphenyls, and radon gas, and (b)
any chemicals, materials or substances defined as or included in the definition
of "hazardous substances," "hazardous waste," "hazardous materials," "extremely
hazardous substances," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import, under
any applicable Environmental Law.
"HM Group" shall mean, collectively, (i) Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇
Incorporated, its Affiliates and Dinetz taken as a whole, (ii) so long as
Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated, its Affiliates and Dinetz taken as a
whole possess sole voting right with respect to the Voting Stock held by each
such individual, such individuals who are or were employees, officers,
directors or partners of Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated or such
Affiliate and the family members of such individuals or trusts created for the
sole benefit of such family members and (iii) so long as Hicks, Muse, ▇▇▇▇ &
▇▇▇▇▇ Incorporated, its Affiliates and Dinetz taken as a whole possess sole
voting right with respect to the Voting Stock of Holdings held by each such
Person, any Person not otherwise described by clauses (i) and (ii) above,
provided that the aggregate number of shares held by all such Persons in
accordance with this clause (iii) at any time shall not exceed 3% of the
aggregate number of shares held by the Persons described in clauses (i) and
(ii) above at such time.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise,
of any such Indebtedness or other obligation on the balance sheet of such
Person (and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have
meanings correlative to the foregoing); provided that any amendment,
modification or waiver of any document pursuant to which Indebtedness was
previously Incurred shall only be deemed to be an Incurrence of Indebtedness if
and to the extent such amendment, modification or waiver (i) increases the
principal thereof or interest rate or premium payable thereon or (ii) changes
to an earlier date the stated maturity thereof or accelerates the time within
which such Indebtedness shall be redeemed other then in connection with a
Permitted Refinancing; provided, further, that any Indebtedness of a Person
existing at the time such Person becomes a Subsidiary of the Company (whether
by merger, consolidation, acquisition or otherwise) shall be deemed to be
Incurred by such Subsidiary at the time it becomes a Subsidiary of the Company.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness, obligations and li-
19
-14-
abilities of such Person for borrowed money, (ii) that portion of obligations
with respect to Capital Leases that is properly classified as a liability on a
balance sheet of such Person in conformity with GAAP, (iii) notes payable and
drafts accepted representing extensions of credit, whether or not representing
obligations for borrowed money, of such Person, (iv) any indebtedness,
obligation or liability of such Person owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months (or a longer
period of up to one year, if such terms are available from suppliers in the
ordinary course of business) from the date of incurrence of the obligation in
respect thereof or (b) evidenced by a note or similar written instrument, (v)
all indebtedness, obligations and liabilities secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person, except that "Indebtedness" shall not
include trade payables and accrued liabilities incurred in the ordinary course
of business for the purchase of goods or services that are not secured by a
Lien other than Liens permitted under Section 6.2 and obligations under
Interest Rate Agreements and Currency Agreements (which constitute Contingent
Obligations, not Indebtedness), (vi) guarantees of such Person in respect of
Indebtedness of other Persons and (vii) all Disqualified Capital Stock issued
by such Person with the amount of Indebtedness represented by such Disqualified
Capital Stock being equal to the greater of its voluntary or involuntary
liquidation preference and its maximum fixed repurchase price, but excluding
accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Capital Stock that does not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Capital Stock as if such Disqualified Capital Stock were purchased on any date
on which Indebtedness shall be required to be determined pursuant to this
Agreement, and if such price is based upon, or measured by, the fair market
value of such Disqualified Capital Stock, such fair market value to be
determined reasonably and in good faith by the board of directors of the issuer
of such Disqualified Capital Stock.
"Indemnified Liabilities" has the meaning ascribed to such term in
Section 9.4.
"Indemnitees" has the meaning ascribed to such term in Section 9.4.
"Independent Financial Advisor" means a firm (i) that does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company or its Subsidiaries and (ii) that,
in the judg-
20
-15-
ment of the Board of Directors of the Company, is otherwise independent and
qualified to perform the task for which it is to be engaged.
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of the Company and its Subsidiaries as currently
conducted or as proposed to be conducted that are material to the condition
(financial or otherwise), business, operations or prospects of the Company and
its Subsidiaries, taken as a whole.
"Intercompany Indebtedness" means any Indebtedness of the Company or
any Subsidiary of the Company that, in the case of the Company, is owing to any
Wholly Owned Subsidiary of the Company and that, in the case of any such
Subsidiary, is owing to the Company or any Wholly Owned Subsidiary of the
Company; provided that if as of any date any Person other than the Company or a
Wholly Owned Subsidiary of the Company owns or holds such Indebtedness, or
holds any Lien in respect thereof, such Indebtedness shall no longer be
Intercompany Indebtedness permitted to be Incurred pursuant to Section 6.1(iv).
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect Company or any of its Subsidiaries
against fluctuations in interest rates.
"Interest Rate Determination Date" means, with respect to any
Quarterly Period, the second Business Day on which banks in New York and London
are open prior to the first Business Day of such Quarterly Period.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor code or statute.
"Investment" means (i) any direct or indirect purchase or other
acquisition of, or of a beneficial interest in, any Securities of any other
Person or (ii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business), extension of credit
or capital contribution to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment.
21
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"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided
that, as to any such arrangement in corporate form, such corporation shall not,
as to any Person of which such corporation is a Subsidiary, be considered to be
a Joint Venture to which such Person is a party.
"Judgment Currency" shall have the meaning ascribed to such term in
Section 9.22.
"Laws" means all applicable statutes, laws, ordinances, regulations,
rules, orders, judgments, writs, injunctions or decrees of any state,
commonwealth, nation, territory, possession, province, county, parish, town,
township, village, municipality or Tribunal, and "Law" means each of the
foregoing.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Borrowing or (ii) a
Lender having notified in writing the Borrower and/or the Agent that it does
not intend to comply with its obligations under Section 2.1A as a result of any
takeover of such Lender by any regulatory authority or agency.
"Lenders" has the meaning ascribed to that term in the introduction to
this Agreement and shall include any assignee of the Bridge Loan, the Notes or
the Bridge Loan Commitment to the extent of such assignment.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LIBOR" means for each Quarterly Period, the rate determined on the
basis of the offered rates for deposits in Dollars for a period of three months
that appear on the Reuters Screen LIBO Page as of 11:00 a.m., London time, on
the Interest Rate Determination Date for such Quarterly Period. If at least
two rates appear on the Reuters Screen LIBO Page, the rate for such Quarterly
Period will be the arithmetic mean of such rates rounded upwards, if necessary,
to the nearest 1/16 of 1%. If fewer than two rates appear on the Reuters
Screen LIBO Page, then such rate shall equal the arithmetic mean (rounded
upward to the nearest 1/16 of 1%) of the interest rates per annum at which
deposits in Dollars for a period of three months are offered by Bankers Trust
or its designees at approximately 11:00
22
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a.m., London time, on such Interest Rate Determination Date to first class
banks in the London interbank market.
"Litigation" means any action, suit, proceeding, claim, lawsuit and/or
investigation conducted by or before any Tribunal.
"Loan Documents" means this Agreement and the Notes.
"Margin Stock" has the meaning assigned to that term in Regulation U
and Regulation G of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Material Adverse Change" means a material adverse change in the
business, operations, properties, assets, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means (i) a material adverse effect upon the
business, operations, properties, assets, prospects or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, or (ii) the
impairment of the ability of the Company and its Subsidiaries, taken as a
whole, to perform, or the impairment of the ability of the Agent or Lenders to
enforce, the Obligations.
"Material Subsidiary" means, with respect to any accounting period,
any Subsidiary of the Company (i) whose revenues constitute greater than 10% of
the aggregate dollar value of the revenues of Company and its Subsidiaries,
taken as a whole, for such accounting period or (ii) the fair market value of
whose assets at any time during such accounting period is greater than 10% of
the fair market value of all of the assets of Company and its Subsidiaries at
such time.
"Maturity Date" has the meaning ascribed to such term in Section 2.1E.
"Maximum Cash Interest Rate" means an interest rate of 18% per annum;
provided that in computing such interest rate, fees paid to the Lenders shall
not be deemed an interest payment.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
February 19, 1997 among Chancellor, the Company, Evergreen and Evergreen L.A.,
as such agreement may be amended, modified or supplemented from time to time.
"Monitoring and Oversight Agreements" has the meaning ascribed to such
term in Section 6.9(iv).
23
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"Multiemployer Plan" means a Pension Plan that is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, (a) Cash
Proceeds of such Asset Sale net of bona fide direct costs of such sale
including, but not limited to, (i) income taxes reasonably estimated to be
actually payable as a result of such Asset Sale within two years of the date of
such Asset Sale, (ii) payment of the outstanding principal amount of, premium
or penalty, if any, and interest on, any Indebtedness that is secured by a Lien
on the stock or assets in question and (iii) reasonable transaction costs
(including, without limitation, an underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses and reasonable expenses incurred for
preparing such assets for sale, associated therewith), and (b) excluding any
portion of any such Cash Proceeds that the Company determines in good faith
should be reserved for post-closing adjustments (to the extent that the Company
delivers to the Lenders a certificate signed by an Officer as to such
determination), it being understood and agreed that on the day that all such
post-closing adjustments have been determined (which shall not be later than
six months following the date of the respective asset sale), the amount (if
any) by which the reserved amount in respect of such sale or disposition
exceeds the actual post-closing adjustments payable by the Company or any of
its Subsidiaries shall constitute Net Cash Proceeds on such date).
"Notes" has the meaning ascribed to such term in Section 2.1D and
shall include any Notes executed in connection with any assignment of the
Bridge Loan, the Notes or the Bridge Loan Commitment, as applicable.
"Notice of Borrowing" means a notice substantially in the form of
Exhibit III with respect to a proposed borrowing.
"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lenders under the Loan Documents, whether for
principal, reimbursements, interest, fees, expenses, indemnities or otherwise,
and whether primary, secondary, direct, indirect, contingent, fixed or
otherwise (including obligations of performance).
"Offer Payment Date" has the meaning ascribed to such term in Section
2.4A(iv).
"Officer" means, as applicable to any corporation, the Chairman of
the Board, the President, any Vice President, the Chief Financial Officer, the
Controller, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of such corporation.
24
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"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by two Officers; provided
that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of the Bridge Loan hereunder shall include
(i) a statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"Original Credit Agreement" shall mean the Credit Agreement dated as
of February 19, 1996 among the Company, Chancellor, the Banks (as defined
therein) from time to time party thereto, and Bankers Trust Company, as
Managing Agent.
"Other Taxes" has the meaning ascribed to such term in Section 9.19.
"Pari Passu Indebtedness" means, with respect to the Company,
Indebtedness that ranks pari passu in right of payment with the Bridge Loan.
"Payment Office" shall mean the office of the Agent located at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other office as the Agent
may designate to the Company and the Lenders from time to time.
"Payment Restriction" has the meaning ascribed to such term in Section
6.7.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA that is subject to the provisions of Title IV of ERISA
and that is maintained for employees of the Company, any Subsidiary of the
Company or any member of the Controlled Group.
"Permits" has the meaning ascribed to such term in Section 4.20.
"Permitted Encumbrances" means (i) Liens existing on the Closing Date
set forth on Schedule A to the extent and in the manner such Liens are in
effect on the Closing Date; (ii) Liens for taxes, assessments or governmental
charges or
25
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claims the payment of which is not, at the time, required by Section 5.3; (iii)
statutory Liens of landlords and banks and rights of offset, and Liens of
carriers, warehousemen, workmen, repairmen, mechanics and materialmen and other
Liens imposed by law incurred in the ordinary course of business to secure such
Indebtedness; provided, that such Liens (x) do not in the aggregate materially
detract from the value of the Company's or such Subsidiary's property or assets
or materially impair the use thereof in the operation of the business of the
Company or such Subsidiary or (y) are the subject of a Contested Claim; (iv)
Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, utility payments, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money); (v) any attachment or judgment Lien not constituting an Event of
Default; (vi) licenses, leases or subleases granted to others not interfering
in any material respect with the ordinary conduct of the business of the
Company and its Subsidiaries, taken as a whole; (vii) easements, rights-of-way,
restrictions, minor defects, encroachments or irregularities in title and other
similar charges or encumbrances not interfering in any material respect with
the ordinary conduct of the business of the Company and its Subsidiaries, taken
as a whole; (viii) any (a) interest or title of a lessor or sublessor, licensee
or licensor under any lease or licenses agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor, licensee or
licensor may be subject to (including without limitation licenses agreements,
ground leases or other prior leases of the demised premises, mortgages,
mechanics' liens, tax liens, and easements), or (c) subordination of the
interest of the lessee or sublessee under such lease to any restrictions or
encumbrance referred to in the preceding clause (b); (ix) Liens arising from
filing UCC financing statements for precautionary purposes relating solely to
true leases of personal property permitted by this Agreement under which the
Company or any of its Subsidiaries is a lessee; (x) any zoning or similar law
or right reserved to or vested in any governmental office or agency to control
or regulate the use of any real property; (xi) Liens securing obligations
(other than obligations representing Indebtedness for borrowed money) under
operating, reciprocal easement or similar agreements entered into in the
ordinary course of business of the Company and its Subsidiaries; (xii) Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person's obligations in respect of bankers' acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods in the ordinary course of business;
(xiii) Liens securing reimbursement obligations
26
-21-
with respect to letters of credit that encumber documents and other property
relating to such letters of credit and the products and proceeds thereof; (xiv)
Liens encumbering customary initial deposits and margin deposits, and other
Liens incurred in the ordinary course of business that are within the general
parameters customary in the industry, in each case securing Indebtedness under
interest swap obligations and foreign exchange agreements and forward
contracts, option futures contracts, futures options or similar agreements or
arrangements designed to protect the Company or any Subsidiary from
fluctuations in the price of commodities; (xv) Liens arising out of consignment
or similar arrangements for the sale of goods entered into by the Company or
any Subsidiary in the ordinary course of business in accordance with past
practices; (xvi) Liens to secure Permitted Refinancing Indebtedness to the
extent the Indebtedness Refinanced was secured and such Liens do not extend to
any property other than the property that was subject to the Lien under the
Indebtedness being Refinanced; (xvii) licenses of patents, trademarks and other
intellectual property rights granted by the Company or any of its Subsidiaries
in the ordinary course of business and not interfering in any material respect
with the ordinary conduct of the business of the Company or any such
Subsidiary; (xx) statutory, contractual and common law landlords' liens under
leases to which the Company or any of its Subsidiaries is a party; and (xxi)
Liens securing purchase money indebtedness.
"Permitted Holders" means Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated and
its Affiliates.
"Permitted Indebtedness" has the meaning assigned to such term in
Section 6.1.
"Permitted Investments" means (a) Investments in cash and Cash
Equivalents; (b) Investments by the Company or by any Subsidiary of the Company
in any Person that is or will become immediately after such Investment a Wholly
Owned Subsidiary of the Company that has not Incurred (and will not Incur as a
result of or in connection with such transaction) any Indebtedness (other than
Indebtedness permitted to be Incurred by such Subsidiary under Section 6.1);
provided that (x) such Investment shall be a Permitted Investment only for so
long as any such Subsidiary in which the Investment has been made meets the
conditions set forth above and (y) no Investment in any such Person or
Subsidiary (including any transaction pursuant to which any Person becomes a
Subsidiary of the Company) will be a Permitted Investment if and for so long as
such Subsidiary is or would be subject to any Payment Restriction not permitted
by Section 6.7; (c) any Investments in the Company by any Subsidiary of the
Company; provided that any Indebtedness of the Company for payment in respect
of such Investment is subordinated in right of payment, pursuant to a written
agreement, to the
27
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Company's Obligations; (d) Investments made by the Company or by its
Subsidiaries out of the Net Cash Proceeds of an Asset Sale made in compliance
with Section 6.12; and (e) Intercompany Indebtedness by and between the Company
and its Subsidiaries.
"Permitted Refinancing Indebtedness" means (A) any Refinancing by the
Company of Indebtedness of the Company or of its Subsidiaries (other than
Indebtedness Incurred or outstanding pursuant to clause (x) of Section 6.1,
which Indebtedness shall remain subject to the maximum aggregate amounts
outstanding as set forth therein) and (B) any Indebtedness incurred pursuant to
a Refinancing by any Subsidiary of the Company of Indebtedness Incurred by such
Subsidiary (other than Indebtedness Incurred or outstanding pursuant to clause
(x) of Section 6.1, which Indebtedness shall remain subject to the maximum
aggregate amounts outstanding as set forth therein), in the case of each of (A)
and (B), that does not (1) result in an increase in the total of the aggregate
principal amount of the Indebtedness of such Person being Refinanced as of the
date of such proposed Refinancing (if such Indebtedness that is Refinancing the
existing Indebtedness is issued at a price less than 100% of the principal
amount thereof, an increase shall not be deemed to have occurred unless the
gross proceeds of such Indebtedness that is Refinancing the existing
Indebtedness is in excess of the total of the aggregate principal amount of the
Indebtedness being Refinanced as of the date of such proposed Refinancing) or
(2) create Indebtedness with a Weighted Average Life to Maturity that is less
than the Weighted Average Life to Maturity of the Indebtedness being
Refinanced; provided that (x) if such Indebtedness being Refinanced is
Indebtedness of the Company, then such Refinancing Indebtedness shall be
Indebtedness solely of the Company, (y) if such Indebtedness being Refinanced
is subordinate or junior in right of payment to the Bridge Loan, as the case
may be, or if recourse in respect of the Indebtedness being Refinanced is
limited in any respect, then such Indebtedness proposed to be Incurred to
Refinance the existing Indebtedness shall be subordinate in right of payment to
the Bridge Loan and recourse with respect thereto shall be limited at least to
the same extent and in the same manner as the Indebtedness being Refinanced and
(z) if such Indebtedness being Refinanced is Pari Passu Indebtedness, then such
Indebtedness proposed to be incurred to Refinance the existing Indebtedness
shall be Pari Passu Indebtedness.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.
28
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"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA maintained by the Company or any of its Subsidiaries for employees of the
Company or any of its Subsidiaries.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within any applicable grace or
cure period.
"preferred stock" of any Person means any Capital Stock of such Person
that has preferential rights (as compared to any other Capital Stock of such
Person) with respect to dividends or redemptions or upon liquidation.
"pro forma" means, with respect to any calculation made or required to
be made pursuant to the terms of this Agreement, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act of 1933, as amended,
as interpreted by the Company's chief financial officer or Board of Directors
in consultation with its independent certified public accountants.
"Proceedings" has the meaning ascribed to such term in Section
5.1(xi).
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Quarterly Period" shall mean the period commencing on the first
calendar day of each three-month period, if such day is a Business Day, or if
such day is not a Business Day, the first Business Day succeeding the first
calendar day of each three-month period and ending on the day next preceding
the first Business Day of the following Quarterly Period.
"RCRA" means the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" means real property, including, without limitation,
improvements and fixtures thereon, owned, leased or operated by the Company or
Chancellor. The term "Real Property" as used herein shall include the
groundwater, surface water, soil and airspace at, in, on, under or adjacent to
such Real Property.
"Real Property Assets" means interests in land, buildings,
improvements, and fixtures attached thereto or used in the operation thereof,
in each case owned or leased (as lessee) by the Company or its Subsidiaries.
29
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"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund or defease, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Register" has the meaning ascribed to such term in Section 5.10.
"Regulation G," "Regulation T," "Regulation U" and "Regulation X"
shall mean Regulation G, T, U or X, as the case may be, of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Related Business" means any capital expenditure or Investment in
properties and assets that replace the properties and assets that were the
subject of an Asset Sale or in properties and assets that will be used in the
business of the Company and its Subsidiaries as existing on the Closing Date or
in businesses reasonably related thereto.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Reportable Event" has the meaning set forth in Section 4043 of ERISA,
but excluding any event for which the 30-day notice requirement has been waived
by applicable regulations of the PBGC.
"Required Lenders" means Lenders holding in the aggregate more than
50% of the outstanding principal amount of the Notes.
"Restricted Payment" has the meaning ascribed to such term in Section
6.3.
"Restricted Payment Capacity" has the meaning ascribed to such term in
Section 3.1G.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any profit
sharing agreement or arrangement, bonds, debentures, options, warrants, notes,
or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
30
-25-
"Series A Exchangeable Preferred Stock" shall mean Chancellor's 12
1/4% Series A Cumulative Exchangeable Preferred Stock due 2008 issued
concurrently with the Original Credit Agreement.
"Series A Exchangeable Preferred Stock Documents" shall mean each
document relating to the Series A Exchangeable Preferred Stock (including,
without limitation, the 12-1/4% Junior Exchange Debenture Indenture and all
documents relating thereto).
"Stations" means and includes all of the radio stations owned and
operated by the Company and Chancellor on the Closing Date, after giving effect
to the Acquisition.
"Subordinated Indebtedness" means Indebtedness of the Company that is
expressly subordinated in right of payment to the Bridge Loan and the Notes.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock or other equity interest entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereto is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof; provided that for all purposes of this
Agreement, unless the context otherwise requires, the Subsidiaries of the
Company shall include Chancellor.
"Syndicate Group" shall mean the initial group of participants in the
Bridge Loan.
"Tax Certificate" has the meaning ascribed to such term in Section
9.19F.
"Tax Sharing Agreements" means all agreements relating to the sharing
of tax liabilities and benefits among the Company and/or its Subsidiaries.
"Taxes" means all taxes, assessments, fees, levies, imposts, duties,
penalties, deductions, liabilities, withholdings or other charges of any nature
whatsoever, including interest penalties, from time to time or at any time
imposed by any Law or any Tribunal.
"Total Bridge Loan Commitment" has the meaning ascribed to such term
in Section 2.1A.
"Transaction Costs" means the fees, costs and expenses payable by the
Company pursuant hereto and other fees,
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-26-
costs and expenses payable by the Company in connection with the Transactions,
including transaction or financial advisory fees payable to Permitted Holders
and ▇▇▇▇▇▇▇▇▇ & Co., LLC.
"Transactions" shall mean, collectively, (i) the incurrence of the
Bridge Loan hereunder on the Closing Date, (ii) the Acquisition, (iii) the Bank
Financing, (iv) any other transaction on the Closing Date contemplated in
relation to the foregoing and (v) the payment of fees and expenses in
connection with the foregoing.
"Transferee" has the meaning ascribed to such term in Section 9.19.
"Tribunal" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency, authority or
instrumentality of the United States or any state, province, commonwealth,
nation, territory, possession, county, parish, town, township, village or
municipality, whether now or hereafter constituted and/or existing.
"12% Junior Exchange Debenture Indenture" shall mean that certain
indenture dated as of the date of issuance of the 12% Junior Exchange
Debentures, by and between the Borrower and the United States Trust Company of
Texas, N.A., as trustee which shall be in form and substance satisfactory to
the Managing Agent.
"12% Junior Exchange Debentures" shall mean the Borrower's
Subordinated Notes due 2009 issued pursuant to the 12% Junior Exchange
Debenture Indenture.
"12-1/4% Junior Exchange Debenture Indenture" shall mean that certain
indenture dated as of the date of issuance of the 12-1/4% Junior Exchange
Debentures, by and between the Borrower and United States Trust Company of
Texas, as trustee.
"12-1/4% Junior Exchange Debentures" shall mean the Borrower's
Subordinated Notes due 2006 issued pursuant to the 12-1/4% Junior Exchange
Debenture Indenture.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only
32
-27-
so long as no senior class of stock has voting power by reason of any
contingency) to vote in the election of members of the board of directors or
other governing body of such Person.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the product obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment.
"Wholly Owned Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which 100% of the total
voting power of shares of stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Wholly Owned
Subsidiaries of that Person or a combination thereof.
1.2. Accounting Terms
For the purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with
GAAP.
1.3. Other Definitional Provisions; Anniversaries
Any of the terms defined in Section 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
SECTION 2 AMOUNT AND TERMS OF BRIDGE LOAN COMMITMENT AND BRIDGE LOAN; NOTES
2.1. Bridge Loan and Notes
A. Bridge Loan Commitment; Ranking. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Company herein set forth, the Lenders severally and not jointly hereby agree to
lend to the Company on the Closing Date the aggregate amount of $170 million
(the "Bridge Loan"). Each Lender's commitment to make available its pro rata
share of the Bridge Loan pursuant to this Section 2.1A in the amount set forth
opposite the signature hereto is herein called the "Bridge Loan Commitment."
The Lenders' collective commitments to make available the
33
-28-
Bridge Loan to the Company pursuant to this Section 2.1A are herein called the
"Total Bridge Loan Commitment." The Bridge Loan will be a senior unsecured
obligation of the Company and will rank (i) pari passu with all other
unsubordinated indebtedness of the Company and (ii) senior to any subordinated
indebtedness of the Company.
B. Notice of Borrowing. When the Company desires to borrow under this Section
2.1, it shall deliver to the Agent a Notice of Borrowing no later than 11:00
A.M. (New York time), at least one Business Day in advance of the Closing Date
or such later date as shall be agreed to by the Agent. The Notice of Borrowing
shall specify the applicable date of borrowing (which shall be a Business Day).
Upon receipt of such Notice of Borrowing, the Agent shall promptly notify the
Lenders of the matters covered by the Notice of Borrowing.
C. Disbursement of Funds. (a) No later than 12:00 Noon (New York time) on the
Closing Date, each Lender will make available its pro rata share (based on each
Lender's Bridge Loan Commitment then in effect) of the Bridge Loan in the
manner provided below. All amounts shall be made available in U.S. Legal
Tender and immediately available funds at the Payment Office.
(b)Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Bridge Loan Commitment hereunder or to prejudice any
rights that the Company may have against any Lender as a result of any default
by such Lender hereunder.
D. Notes. The Company shall execute and deliver to each of the Lenders on the
Closing Date a note (collectively, the "Notes") dated the Closing Date
substantially in the form of Exhibit I annexed hereto to evidence each Lender's
pro rata obligation under the Bridge Loan and with appropriate insertions.
E. Maturity of Bridge Loan. Subject to the provisions of Section 2.4, the
Bridge Loan shall mature and the Company shall pay in full the outstanding
principal amount thereof and accrued interest thereon on the earlier of (i) the
two-year anniversary of the Closing Date (the "Maturity Date") and (ii) the
consummation of the Evergreen Merger.
F. Pro Rata Borrowings. The Bridge Loan made under this Agreement shall be
made by the Lenders pro rata on the basis of their respective Bridge Loan
Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make its portion of the Bridge
Loan hereunder and that each Lender shall be obligated to make its portion of
the Bridge Loan hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.
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2.2. Interest on the Bridge Loan
A. Rate of Interest. The Bridge Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
prepayment, acceleration or otherwise) at the rate of three-month LIBOR, reset
monthly, plus 3.25% per annum, which spread over applicable LIBOR shall
increase to 6.00% on the six-month anniversary of the Closing Date and
increasing thereafter by .50% per annum for each period of three months (or
portion thereof) that the Bridge Loan remains outstanding; provided, however,
that in no event shall the interest rate exceed the Maximum Cash Interest Rate.
B. Interest Payments. Interest shall be payable at maturity or redemption of
the Bridge Loan; provided that in the case of a redemption of less than all of
the Bridge Loan the outstanding interest shall be payable only as to the
portion of the Bridge Loan so redeemed.
C. Post-Maturity Interest. Any principal payments on the Bridge Loan not paid
when due and, to the extent permitted by applicable law, any overdue interest
on the Bridge Loan, in each case whether at stated maturity, by notice of
prepayment, by acceleration or otherwise, shall thereafter bear interest
payable upon demand at a rate that is 2.00% per annum in excess of the rate of
interest otherwise payable under this Agreement for the Bridge Loan.
2.3. Fees
The Company agrees to pay to the Agent on behalf of the Lenders all
fees and other obligations in accordance with, and at the times specified by,
the Bridge Commitment Letter, including, without limitation, (i) all fees
payable on the Closing Date, (ii) on the six month anniversary of the Closing
Date, 1.5% of the total amount of the Bridge Loan outstanding and (iii) on each
of the one year, eighteen month and two year anniversary of the Closing Date,
an amount of Common Stock of the Company equal to 100,000 shares of Class A
Common Stock multiplied by a fraction, the numerator of which is the principal
amount of the Bridge Loan then outstanding and the denominator of which is
$170,000,000.
2.4. Prepayments and Payments
A. Prepayments
(i) Voluntary Prepayments. The Company may, upon not less than
three Business Days' prior written notice (or telephonic notice confirmed in
writing) to the Agent at any time and from time to time, prepay the Bridge Loan
made to the
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Company in whole or in part at 100% of the principal amount thereof, plus
accrued interest thereon.
Notice of prepayment having been given as aforesaid, the
principal amount of the Bridge Loan to be prepaid shall become due and
payable on the prepayment date. Amounts of the Bridge Loan so prepaid
may not be reborrowed.
(ii) Mandatory Prepayments
(a) Prepayments from Sales of Subordinated Indebtedness
and Equity Securities. Net proceeds of private or public sales of
Subordinated Indebtedness or equity securities by the Company or any
of its Subsidiaries shall be used to prepay the Bridge Loan, plus
accrued interest and any other amount payable thereunder, to the full
extent of the net proceeds so received; provided that no default or
event of default under the Bank Financing Documents then exists or
would result from such prepayment.
(b) Prepayments Upon the Occurrence of Asset Sales. Upon
the closing of any Asset Sale (other than sales of inventory in the
ordinary course of business) of the Company or Chancellor, an amount
in cash equal to the Net Cash Proceeds so received from any such Asset
Sale shall be used to prepay the Bridge Loan, plus accrued interest
thereon and any other amount payable thereunder; provided that no
default or event of default under the Bank Financing Documents then
exists or would result from such prepayment.
(c) Notice. The Company shall notify the Agent of any
prepayment to be made pursuant to this Section 2.4A(ii) at least one
Business Day prior to such prepayment date.
(iii) The Company's Mandatory Prepayment Obligations;
Application of Prepayments. All prepayments shall include payment of accrued
interest on the principal amount so prepaid and shall be applied to payment of
interest before application to principal.
(iv) Mandatory Offer to Purchase the Notes
(a) Upon the occurrence of a Change of Control (the date
of such occurrence, the "Change of Control Date"), the Lenders shall
have the right, subject to the prior payment of the amounts owing
under the Bank Financing or the waiver of the lenders thereunder to
such prior payment and the payment of any fees owing hereunder to the
Lenders, to require the repurchase of the Notes pursuant to an
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offer to purchase (the "Change of Control Offer") at a purchase price
equal to the aggregate principal amount thereof plus accrued interest
to the date of repurchase.
(b) The notice to the Agent shall contain all
instructions and materials necessary to enable the Lenders to tender
the Notes.
(c) Within 10 days following any Change of Control the
Company shall mail a notice to the Agent stating:
(1) that the Change of Control Offer is being made pursuant to
this Section 2.4A(iv) and that all Notes validly tendered will be accepted for
payment;
(2) the purchase price and the purchase date, which shall be no
earlier than 30 days nor later than 40 days from the date such notice is mailed
(the "Offer Payment Date");
(3) that any Notes not tendered will continue to accrue interest;
(4) that any Note accepted for payment pursuant to the Change of
Control Offer shall cease to accrue interest after the Offer Payment Date
unless the Company shall default in the payment of the repurchase price of the
Note;
(5) that if any Lender elects to have its Note purchased pursuant
to the Change of Control Offer it will be required to surrender the Note, with
the form entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, to the Company prior to 5:00 p.m. New York time on the Offer
Payment Date;
(6) that the Lenders will be entitled to withdraw their election
if the Company receives, not later than 5:00 p.m. New York time on the Business
Day preceding the Offer Payment Date, a telegram, telex, facsimile transmission
or letter setting forth the principal amount of the Notes the Lenders delivered
for purchase, and a statement that the Lenders are withdrawing their election
to have the Notes purchased; and
(7) that if the Notes are purchased only in part, a new Note of
the same type will be issued in principal amount equal to the unpurchased
portion of the Notes surrendered.
(d) On or before the Offer Payment Date, the Company
shall (i) accept for payment the Notes or portions thereof that are to
be purchased in accordance with the above, and (ii) deposit at the
Payment Office U.S. Legal Tender sufficient to pay the purchase price
of Notes to be purchased. The Agent shall promptly mail to the
Lenders
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whose Notes are so accepted payment in an amount equal to the purchase
price.
(e) The Company shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are
applicable in connection with the purchase of the Notes pursuant to an
offer hereunder. To the extent the provisions of any securities laws
or regulations conflict with the provisions under this Section, the
Company shall comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations
under this Section by virtue thereof.
B. Manner and Time of Payment. All payments of principal and interest
hereunder and under the Notes by the Company shall be made without defense,
set-off or counterclaim and in same-day funds and delivered to the Agent,
unless otherwise specified, not later than 12:00 Noon (New York time) on the
date due at the Payment Office for the account of the Lenders; funds received
by the Agent after that time shall be deemed to have been paid by the Company
on the next succeeding Business Day. The Company hereby authorizes the Agent
to charge its account with the Agent in order to cause timely payment to be
made of all principal, interest and fees due hereunder (subject to sufficient
funds being available in its account for that purpose).
C. Payments on Non-Business Days. Whenever any payment to be made hereunder
or under the Notes shall be stated to be due on a day that is not a Business
Day, the payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or under the Notes or of the commitment and other fees
hereunder, as the case may be.
D. Notation of Payment. Each Lender agrees that before disposing of any Note
held by it, or any part thereof (other than by granting participations
therein), the Lender will make a notation thereon of all principal payments
previously made thereon and of the date to which interest thereon has been paid
and will notify the Company of the name and address of the transferee of that
Note; provided that the failure to make (or any error in the making of) such a
notation or to notify the Company of the name and address of such transferee
shall not limit or otherwise affect the obligation of the Company hereunder or
under such Notes with respect to the Bridge Loan and payments of principal or
interest on any such Note.
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2.5. Use of Proceeds
A. Bridge Loan. The proceeds of the Bridge Loan shall be applied by the
Company to finance the Acquisition, to effect the Bank Financing by repaying a
portion of the Existing Credit Agreement indebtedness (as defined in the Bank
Financing Documents) and to pay related fees and expenses (including the
Transaction Costs).
B. Margin Regulations. No portion of the proceeds of the borrowing under this
Agreement shall be used by the Company in any manner that might cause the
borrowing or the application of such proceeds to violate the applicable
requirements of Regulation G, Regulation U, Regulation T or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of the
Board of Governors or to violate the Exchange Act, in each case as in effect on
the Closing Date and the date of such use of proceeds.
SECTION 3 CONDITIONS
3.1. Conditions to Loan
The obligation of the Lenders to make the Bridge Loan is subject to
prior or concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other proceedings taken or
to be taken in connection with the transactions contemplated hereby and all
documents incidental thereto not previously found acceptable by the Lenders
shall be reasonably satisfactory in form and substance to the Lenders, and the
Agent shall have received the following items, each of which shall be in form
and substance reasonably satisfactory to the Agent and, unless otherwise noted,
dated the Closing Date:
1. a certificate, dated the Closing date, signed by an
authorized Officer of each of the Company and Chancellor, and attested
to by the Secretary or Assistant Secretary of each of the Company and
Chancellor, in the form of Exhibit VII, together with copies of each
of the Company's and Chancellor's charter and together with a
certificate of status, compliance, good standing or like certificate
with respect to each of the Company and Chancellor issued by the
appropriate government officials of the jurisdiction of its
incorporation and of each jurisdiction in which it owns any material
assets or carries on any material business, each to be dated a recent
date prior to the Closing Date;
2. a copy of the Company's bylaws, certified as of the
Closing Date by one of its Officers;
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3. resolutions of the Company's Board of Directors
approving and authorizing the execution, delivery and performance of
this Agreement, the Notes and any other documents, instruments and
certificates required to be executed by the Company or any Subsidiary
of the Company, where applicable, in connection herewith and therewith
and approving and authorizing the execution, delivery and payment of
the Notes and the consummation of the Transactions, each certified as
of the Closing Date by one of its Officers as being in full force and
effect without modification or amendment;
4. signature and incumbency certificates of the
Company's Officers executing this Agreement and the Notes;
5. executed copies of this Agreement and the Notes
substantially in the form of Exhibit I executed in accordance with
Section 2.1D drawn to the order of the Lenders and with appropriate
insertions;
6. an originally executed Notice of Borrowing
substantially in the form of Exhibit III, signed by an Officer on
behalf of the Company in writing delivered to the Agent;
7. originally executed copies of one or more favorable
written opinions of (I) Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for the
Company, substantially in the form of Exhibit IV and addressed to the
Lenders and (II) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel for the Lenders,
substantially in the form of Exhibit V and addressed to the Lenders;
8. true and correct copies of each of the Acquisition
Agreement and the Merger Agreement, which shall not have been
materially amended without the Agent's consent in any respect adverse
to the interests of the Agent and the Lenders (which consent shall not
be unreasonably withheld or delayed). All conditions to the
Acquisition contained in the Acquisition Agreement shall have been
performed or complied with substantially on the terms set forth
therein and not waived without the Agent's consent, which consent
shall not be unreasonably withheld or delayed. Simultaneously with
the making of the Bridge Loan, the Acquisition shall have been
consummated; and
9. a copy of all closing documents relating to the
Acquisition and all such counterpart originals or certified copies of
such documents, instruments, certificates and opinions as the Agent
may reasonably request.
B. The Lenders shall have received reports and other information in form,
scope and substance reasonably satisfactory to
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the Lenders concerning environmental liabilities of Chancellor and the
Subsidiaries of Chancellor.
C. On or before the Closing Date, all authorizations, consents and approvals
(including, without limitation, under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and preliminary approval from the FCC of
the transfer or assignment of licenses as contemplated by the Acquisition)
necessary in connection with the Transactions shall have been obtained and
remain in full force and effect and all applicable waiting periods under Law
applicable to the Acquisition shall have expired without any action being taken
by any competent authority (including, without limitation, any Tribunal) that
restrains, prevents or imposes materially adverse conditions upon the
completion of the Acquisition or the financing thereof and evidence of the
receipt of such authorizations, consents and approvals satisfactory to the
Lenders shall have been delivered to the Agent. Additionally, there shall not
exist any judgment, order, injunction or other restraint issued or filed or a
hearing seeking injunctive relief or other restraint or objection pending or
notified prohibiting or imposing materially adverse conditions upon the
consummation of the Acquisition or the transactions contemplated by this
Agreement.
D. On or before the Closing Date, the Company shall have paid to the Agent the
fees payable on the Closing Date pursuant to Section 2.3.
E. On or before the Closing Date, the Company shall have performed in all
material respects all agreements that this Agreement provides shall be
performed on or before the Closing Date except as otherwise disclosed to and
agreed to in writing by the Agent.
F. The Company and the Lenders shall have entered into the Loan Documents
relating to the Bridge Loan and the transactions contemplated thereby, on terms
and in form and substance reasonably satisfactory to the Lenders and the
Company.
G. The Bank Financing Documents shall be in full force and effect and the
parties thereto shall be in compliance with all material agreements thereunder.
The Bank Financing Documents shall provide for borrowings thereunder in amounts
and upon terms reasonably satisfactory to the Lenders. The Bank Financing
Documents shall include provisions permitting the repayment of the Bridge Loan
(including accrued interest thereon and any other amount payable thereunder) in
accordance with the terms of the Bank Financing Documents, including the making
of any restricted payment necessary to enable such repayment (the ability to
make any such restricted payment hereinafter referred to as "Restricted Payment
Capacity"). No default or event of default shall have occurred under the Bank
Financing
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Documents and all conditions to borrowings thereunder shall have been
satisfied, in the reasonable judgment of the Lenders, without waiver.
H. The Evergreen-Viacom Acquisition and the related financing shall have been
consummated in accordance with the terms of the agreements evidencing the
Evergreen-Viacom Acquisition in the form delivered to the Lenders prior to the
date hereof or otherwise reasonably satisfactory to the Lenders (the
"Evergreen-Viacom Acquisition Agreements") and all applicable laws relating
thereto. All material conditions in the Evergreen-Viacom Acquisition
Agreements shall have been satisfied and not waived or modified except with the
written consent of the Lenders (which shall not be unreasonably withheld or
delayed), and all material covenants in the Evergreen-Viacom Acquisition
Agreements shall have been satisfied (without waiver or modification) in all
material respects and all representation and warranties contained therein shall
be true and correct in all material respects (without waiver or modifications).
I. Simultaneously with the making of the Bridge Loan by the Lenders, the
Company shall have delivered to the Lenders an Officers' Certificate in form
and substance satisfactory to the Agent to the effect that (i) on or prior to
the Closing Date, the Company has performed and complied with in all material
respects all covenants and conditions to be performed and observed by the
Company on or prior to the Closing Date and (ii) all conditions to the
consummation of the Acquisition in the Acquisition Agreement have been
satisfied substantially on the terms set forth therein and have not been waived
or amended without the Agent's prior written consent.
J. Neither the Company nor Chancellor shall have sustained any loss or
interference with respect to its businesses or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any legal or governmental proceeding, which loss or
interference, in the reasonable judgment of the Agent, has had or could
reasonably be expected to have a Material Adverse Effect; there shall not have
been, in the reasonable judgment of the Agent, any Material Adverse Change.
K. No event shall have occurred and be continuing or would result from the
consummation of the borrowing contemplated by the Notice of Borrowing that
would constitute an Event of Default or Potential Event of Default.
L. No order, judgment or decree of any court, arbitrator or governmental
authority shall purport to enjoin or restrain the Lenders from making the
Bridge Loan.
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M. There shall not be pending or, to the knowledge of the Company, threatened
any action, suit, proceeding, governmental investigation or arbitration against
or affecting the Company or Chancellor or any property or asset of Chancellor
or any of its Subsidiaries that has not been disclosed by the Company in
writing to the Agent (and the Agent shall have received on the Closing Date an
Officer's Certificate dated the Closing Date attesting to the same) and that
could reasonably be expected to have a Material Adverse Effect and there shall
have occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed, which, in
each case, singly or in the aggregate, in the opinion of the Agent, could
reasonably be expected to have a Material Adverse Effect or to impair the
ability or obligation of the Company, to perform, or of the Lenders to enforce,
the Transactions or the making of the Bridge Loan. No injunction or other
restraining order shall have been issued and no hearing to cause an injunction
or other restraining order to be issued shall be pending or noticed with
respect to any action, suit or proceeding seeking to restrain, enjoin, delay,
prohibit or otherwise prevent the consummation of, or to recover any damages or
obtain relief as a result of, the Transactions. There shall not be threatened,
instituted or pending any action, proceeding or application before or by any
Tribunal, or any other Person, domestic or foreign (i) challenging the
Transactions or seeking to restrain, delay or prohibit the consummation
thereof; (ii) seeking to prohibit or impose material limitations on the
Company's ownership or operation of all or any portion of the Company's
business or assets (including the business or assets of any Subsidiary thereof)
or to compel the Company to dispose of or hold separate all or any portion of
the Company's business or assets (including the business or assets of any
Subsidiary thereof) as a result of the Acquisition; (iii) that, in any event,
might adversely affect the Bridge Loan; or (iv) seeking to impose any
materially adverse conditions upon the Transactions.
N. The making of the Bridge Loan in the manner contemplated in this Agreement
shall not violate the applicable provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve Board or any other regulation of the
Board.
O. There shall not have occurred (i) any general suspension of, or limitation
on times or prices for, trading in securities on the New York Stock Exchange,
the American Stock Exchange or Nasdaq National Market or minimum or maximum
prices established on any such exchanges or market; (ii) a declaration of a
banking moratorium or any suspension of payments in respect of the banks in the
United States or New York; or (iii) either (A) an outbreak or escalation of
hostilities between the United States and any foreign power, or (B) an outbreak
or escalation of any other insurrection or armed conflict involving the United
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States or any other national or international calamity or emergency or (C)
trading in securities generally on the New York or American Stock Exchange or
the Nasdaq National Market shall not have been suspended and minimum or maximum
prices shall not have been established on any such exchange or market.
P. There shall not have been any disclosure of information relating to
conditions or events not previously disclosed to the Lenders, or new
information regarding previously disclosed matters, in the course of the
Lenders' continuing legal, financial, tax, environmental, business and
accounting due diligence review that the Lenders shall reasonably determine is
material and adverse to the Company or Chancellor.
Q. The Agent shall be satisfied, in its reasonable discretion, with its review
of the accounting policies and procedures utilized by the Company and its
Subsidiaries and to be utilized by the Company and its Subsidiaries after the
Acquisition.
R. The Agent shall have received and be satisfied, in its reasonable
discretion, that audited, unaudited and pro forma financial statements
previously delivered to the Agent and the Lenders and prepared in accordance
with GAAP, consistently applied, of the Company and Chancellor and any Company
acquired by either of them whose financial statements would be required to be
filed with the Commission in a public offering are available as of the Closing
Date.
S. The Agent and its counsel shall be reasonably satisfied that the
consummation of the Acquisition and the related financing, including the
funding of the Bridge Loan, shall be in compliance with all applicable Laws.
There shall not have been any statute, rule, regulation, injunction or order
applicable to the Acquisition, or the financing thereof, promulgated, enacted,
entered or enforced by any state or federal government or governmental or
regulatory authority or agency or by any federal or state court, or by any
Tribunal, nor shall there be pending any action or proceeding by or before any
such authority, court or tribunal, involving an order that would materially and
adversely affect the Acquisition or the financing thereof.
T. Neither the Company nor any of its Material Subsidiaries shall be a debtor
subject to a Bankruptcy Order; and a bankruptcy or other insolvency proceeding
or an Event of Default or Potential Event of Default shall not have occurred
under Section 7.6, 7.7 or 7.8.
U. No Event of Default or Potential Event of Default (whether matured or not)
shall have occurred under Section 7.1.
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▇. ▇▇▇▇▇▇▇▇▇▇ must have entered into binding and unconditional asset sale
agreements (other than those conditioned upon the grant of license from the
FCC) in form and substance reasonably satisfactory to the Lenders for aggregate
consideration in cash of at least $37 million, and such asset sale agreements
shall be in full force and effect.
W. Neither the consummation of the Acquisition, the making of the Bridge Loan
or the borrowings under the Bank Financing will cause or result in any breach
or default (including any event that with notice or lapse of time or both would
be a breach or a default) or trigger any repurchase requirements under any of
the terms or provisions of any of the instruments governing the material
existing indebtedness or preferred stock of the Company and its Subsidiaries.
X. The Lenders shall have received an Officers' Certificate with respect to
and be satisfied, in their reasonable judgment, as to the sufficiency of
Restricted Payment Capacity under Chancellor's debt and preferred stock
instruments to permit the Company to satisfy its payment obligations with
respect to the Bridge Loan and the ability of Chancellor to utilize such
Restricted Payment Capacity.
Y. Upon the reasonable request of the Lenders, the Company shall have provided
the Lenders the offering memorandum or similar document prepared in connection
with the Bank Financing containing information typically found in an offering
memorandum relating to the Company (which offering memorandum shall contain
audited, unaudited and pro forma financial statements meeting the requirements
of Regulation S-X under the Securities Act of 1933, as amended, for the periods
required of a registrant on Form S-1) for use by the Agent in syndicating the
Bridge Loan in accordance with the terms of this Agreement.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Bridge Loan, the Company represents and warrants to the Lenders that,
at the time of execution hereof, the following statements are true, correct and
complete and after consummation of the Transactions, the following statements
are true, correct and complete in all material respects:
4.1. Organization and Good Standing; Capitalization
(a) Each of the Company and Chancellor is a corporation duly
organized and existing and in good standing under the laws of the State of
Delaware. Each of the Company and Chancellor has the corporate power and
authority to own and operate its properties and to carry on its business as now
conducted
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and as proposed to be conducted and is duly qualified as a foreign corporation
and in good standing in all jurisdictions in which it is doing business, except
where failure to be so qualified or in good standing, singly or in the
aggregate, has not had and will not have a Material Adverse Effect or a
material adverse effect on the ability of the Company or Chancellor to
consummate the Transactions and to execute, deliver and perform its respective
obligations under the Loan Documents and each other document or instrument to
be delivered in connection with the Transactions executed or to be executed by
it.
(b) All of the Subsidiaries of the Company as of the Closing Date
are identified in Schedule B. The Capital Stock of each of the Subsidiaries of
the Company identified in Schedule B is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock constitutes Margin Stock.
(c) On or about June 12, 1997, there were authorized, issued and
outstanding (i) 40,000,000 shares of Class A Common Stock, $.01 par value per
share ("Class A Common Stock"), of which 10,439,628 shares were issued and
outstanding, (ii) 10,000,000 shares of Class B Common Stock ("Class B Common
Stock"), $.01 par value per share, 8,547,910 shares of which were issued and
outstanding, (iii) 10,000,000 shares of Class C Common Stock, $.01 par value
per share ("Class C Common Stock"), none of which were outstanding and (iv)
10,000,000 shares of preferred stock, $.01 par value per share, 2,300,000
shares of which were designated 7% Convertible Preferred Stock, of which
2,000,000 shares were issued and outstanding. All such outstanding shares of
the Company have been duly and validly issued, fully paid and nonassessable.
No stockholder of the Company has any preemptive rights to subscribe for any
additional equity securities of the Company. Any issuance and sale of Common
Stock of the Company, upon such issuance and sale, will either (a) have been
registered or qualified under applicable federal and state securities laws or
(b) be exempt therefrom.
4.2. Authorization and Power
Each of the Company and Chancellor has the corporate power and
requisite authority, and, to the extent a party thereto, has taken all
corporate action necessary, to consummate the Transactions and to execute,
deliver and perform its obligations under the Loan Documents and each other
document and instrument to be delivered in connection with the Transactions
executed or to be executed by it and to issue the Notes.
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4.3. No Conflicts or Consents
(a) The execution and delivery of the Loan Documents, the
Acquisition Agreement, the Bank Financing Documents and each other document to
be executed and delivered in connection with the Transactions, the consummation
of each of the transactions herein or therein contemplated, the compliance with
each of the terms and provisions hereof or thereof, and the issuance, delivery
and performance of the Notes do not and will not (i) except as disclosed to the
Lenders violate any material provision of any law or any governmental rule or
regulation applicable to the Company or Chancellor, the Certificate or Articles
of Incorporation or bylaws of either of them or any order, judgment or decree
of any court or other agency of government binding on any of them, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of the Company or
Chancellor that could reasonably be expected to result in a Material Adverse
Effect or have a material adverse effect on the ability of the Company or
Chancellor to consummate the Transactions and to execute, deliver and perform
their obligations under the Loan Documents and each other document and
instrument to be delivered in connection with the Transactions executed or to
be executed by it, (iii) result in or require the creation or imposition of any
Lien upon any of the material properties or assets of any of the Company or
Chancellor or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of the Company or
Chancellor except for such approvals or consents that will be obtained on or
before the Closing Date or such approvals or consents the failure to obtain
that could not reasonably be expected to singly or in the aggregate result in a
Material Adverse Effect or have a material adverse effect on the ability of the
Company or Chancellor to consummate the Transactions and to execute, deliver
and perform its obligations under the Loan Documents and each other document
and instrument to be delivered in connection with the Transactions executed or
to be executed by it.
(b) No consent, approval, authorization or order of any Tribunal
or other Person is required in connection with the execution and delivery by
the Company or Chancellor of the Loan Documents or any other document or
instrument to be delivered in connection with the Transactions or the
consummation of the transactions contemplated hereby or thereby, other than any
such consent, approval, authorization or order that has been obtained and
remains in full force and effect and other than preliminary FCC approval
regarding any transfer or assignment of licenses contemplated by the
Acquisition Agreement or that has been waived in writing by the Agent on behalf
of Lenders or the failure of which to obtain would not, singly or in the
aggregate, have a Material Adverse Effect or a material adverse
47
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effect on the ability of the Company or Chancellor to consummate the
Transactions and to execute, deliver and perform its respective obligations
under the Loan Documents and each other document or instrument to be delivered
in connection with the Transactions executed or to be executed by it.
4.4. Enforceable Obligations
Each of the Loan Documents, the Acquisition Agreement, the Bank
Financing Documents, the Evergreen-Viacom Acquisition Agreements and each other
document or instrument to be delivered in connection therewith has been duly
authorized; each of the Loan Documents, the Acquisition Agreement, the Bank
Financing Documents, the Evergreen-Viacom Acquisition Agreements and each other
document or instrument to be delivered in connection therewith to be executed
and delivered on or prior to the Closing Date has been duly executed and
delivered by the Company and Chancellor (to the extent a party thereto); and
each of the Loan Documents, the Acquisition Agreement, the Bank Financing
Documents, the Evergreen-Viacom Acquisition Agreements and each other document
or instrument to be delivered in connection therewith to be executed and
delivered on or prior to the Closing Date is, and each of the Loan Documents to
be executed and delivered after the Closing Date will be, upon such execution
and delivery, the legal, valid and binding obligations of the Company and
Chancellor (to the extent a party thereto), enforceable in accordance with
their respective terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
4.5. Properties; Liens
The Company has, and after consummation of the Acquisition will have,
good, sufficient and legal title to all of its respective properties and
assets, and all properties held under lease by it, are, and immediately after
the consummation of the Acquisition will be, held under valid, subsisting and
enforceable leases, and the Company is not in default under any lease, except
in each case for such defects or defaults that, singly or in the aggregate,
would not have a Material Adverse Effect. Except as permitted by this
Agreement, all such properties and assets owned or leased are so owned or
leased free and clear of Liens.
4.6. Financial Condition
(a) The audited consolidated balance sheets of the Company and the
Subsidiaries of the Company at December 31,
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1996 and 1995 and the related consolidated statements of income, shareholders
equity and cash flows of the Company and the Subsidiaries of the Company for
the three-year period ended December 31, 1996, certified by the independent
certified public accountants of the Company, copies of which have been
delivered to the Agent, were prepared in accordance with GAAP, have been
prepared from, and are consistent with, the books and records of the Company
and fairly present in all material respects the consolidated financial
position, as at the respective dates thereof, and the consolidated results of
operations and cash flows of the Company and the Subsidiaries of the Company
for the periods then ended. The Company did not have at December 31, 1996 any
material contingent liabilities, liabilities for Taxes or long-term leases,
unusual forward or long-term commitments or unrealized or unanticipated losses
from any unfavorable commitments which are not reflected or reserved against in
the foregoing statements or in the notes thereto. No events that have had or
could reasonably be expected to have a Material Adverse Effect have occurred
since December 31, 1996.
(b) To the knowledge of the Company, the unaudited consolidated
balance sheet of the Company and the Subsidiaries of the Company at March 31,
1997 and the related consolidated statements of income, retained earnings
(deficit) and cash flows of the Company and the Subsidiaries of the Company for
the period then ended, a copy of which has been delivered to the Agent, were
prepared in accordance with GAAP consistently applied (except to the extent
noted therein), have been prepared from, and are consistent with, the books and
records of Chancellor and fairly present in all material respects the
consolidated financial position of the Company and the Subsidiaries of the
Company as of such date and the consolidated results of operations and cash
flows of the Company and the Subsidiaries of the Company for the period covered
thereby, in each case subject to normal year-end audit adjustments (including
footnotes), consistent with past practices. The Company did not have at March
31, 1997 any material contingent liabilities, liabilities for Taxes or
long-term leases, unusual forward or long-term commitment or unrealized or
unanticipated losses from any unfavorable commitment that are not reflected or
reserved against in the foregoing statements or in the notes thereto.
(c) The pro forma balance sheet of the Company, a copy of which
has heretofore been furnished to the Agent, fairly presents the estimated
consolidated opening balance sheet of the Company assuming the Transactions had
occurred as of January 1, 1997, and the financial condition of Chancellor on
the Closing Date does not differ in any material respect from the information
therein set forth.
(d) Upon giving effect to the Transactions:
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(i) The fair saleable value of the assets of each of the Company
and Chancellor, on a consolidated basis, exceeds the amount that will be
required to be paid on or in respect of the existing debts and other
liabilities (including contingent liabilities) of such Person as they mature.
(ii) The assets of each of the Company and Chancellor, on a
consolidated basis, do not constitute unreasonably small capital for any such
Person to carry out its business as now conducted and as proposed to be
conducted including the capital needs of any such Person, taking into account
the particular capital requirements of the business conducted by such Person,
and projected capital requirements and capital availability thereof.
(iii) The Company on a consolidated basis does not intend to, and
will not permit any of its Subsidiaries to, incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of
cash to be payable on or in respect of debt of each of such Person). The cash
flow of the Company and each of its Subsidiaries on a consolidated basis, after
taking into account all anticipated uses of the cash of each such Person, will
at all times be sufficient to pay all amounts on or in respect of debt of each
such company when such amounts are required to be paid.
(iv) The Company does not intend, and does not believe, that final
judgments against any of the Company or its Subsidiaries in actions for money
damages will be rendered at a time when, or in an amount such that, the Company
and its Subsidiaries on a consolidated basis, will be unable to satisfy any
such judgments promptly in accordance with their terms (taking into account the
maximum reasonable amount of such judgments in any such actions and the
earliest reasonable time at which such judgments might be rendered). The cash
flow of each of the Company and Chancellor, on a consolidated basis, after
taking into account all other anticipated uses of the cash of each such
consolidated group (including the payments on or in respect of debt referred
to in paragraph (iii) of this Section 4.6(d)), will at all times be sufficient
to pay all such judgments promptly in accordance with their terms.
4.7. Full Disclosure
The financial projections (including, without limitation, the pro
forma financial statements included therewith) heretofore furnished to the
Agent by the Company and attached hereto as Exhibit VI are complete, were
prepared by or under the direction of an officer of the Company and were
prepared in good faith on the basis of information and assumptions that the
Company believed to be fair, complete and reasonable as of the date of such
information, and which assumptions are believed to be fair, complete and
reasonable as of the date hereof, but the Agent and the Lenders acknowledge
that actual results may vary from the projections and such variations may be
significant. All other factual information heretofore or contemporaneously
furnished in writing by or on behalf of the Company and Chancellor to the Agent
for purposes of or in connection with this Agreement (including, but not
limited to, the Acquisition Agreement and the Bank Financing Documents and all
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exhibits and appendices thereto) does not contain any untrue statement by such
party or, to its knowledge, any other party of a material fact or omit to state
any material fact necessary to keep the statements made by such party or, to
its knowledge, any other party contained herein or therein from being
misleading. No fact is known, no condition exists nor has any event occurred
that has not been disclosed herein or in any other document, certificate or
statement furnished to the Agent or the Lenders for use in the transactions
contemplated hereby that, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
4.8. No Default
No event has occurred and is continuing that constitutes a Potential
Event of Default or an Event of Default.
4.9. Compliance with Contracts, Etc.
Neither the Company nor Chancellor is in violation of (A) its
certificate of incorporation, by-laws or other organizational documents or (B)
any applicable law, ordinance, administrative or governmental rule or
regulation, except, with respect to this clause (B), for such violations that
would not, singly or in the aggregate, have a Material Adverse Effect, or (C)
any order, decree or judgment of any Tribunal having jurisdiction over any of
them; no event of default or event that but for the giving of notice or the
lapse of time, or both, would constitute an event of default on the part of
either the Company or Chancellor exists under any material Contractual
Obligation.
4.10. No Litigation
There is no Litigation pending or, to the best knowledge of the
Company, threatened, by, against or that may relate to or affect (a) the
Transactions or (b) the Company, Chancellor or Subsidiaries of Chancellor that,
singly or in the aggregate, could reasonably be expected to have a Material
Adverse Effect. There are no outstanding injunctions or restraining orders
prohibiting consummation of any of the transactions contemplated by the Loan
Documents. Neither the Company nor Chancellor is in default with respect to
any judgment, order, writ, injunction or decree of any court or governmental
agency, and
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there are no unsatisfied judgments against any such Person or its business or
activities. Neither the Company nor Chancellor has been advised that there is
a reasonable likelihood of an adverse determination of any Litigation which
adverse determination, should it occur, would have a Material Adverse Effect or
a material adverse effect on the ability of the Company or Chancellor to
consummate the Transactions and to execute, deliver and perform its respective
obligations under the Loan Documents and each other document or instrument to
be delivered in connection with the Transactions executed or to be executed by
it.
4.11. Use of Proceeds; Margin Stock, Etc.
The proceeds of the Bridge Loan will be used solely for the purposes
specified herein. None of such proceeds will be used for the purpose of
purchasing or carrying any Margin Stock within the meaning of the applicable
provisions of Regulation G, T, U or X, or for the purpose of reducing or
retiring any Indebtedness that was originally incurred to purchase or carry a
Margin Stock or for any other purpose that might constitute this transaction a
"purpose credit" within the meaning of the applicable provisions of Regulation
G, T, U or X. The Company has not taken or will take any action that might
cause any of the Loan Documents to violate the applicable provisions of
Regulation G, T, U or X, or any other regulation of the Board of Governors of
the Federal Reserve System.
4.12. Taxes
All material tax returns, foreign and domestic, required to be filed
by the Company or Chancellor in any jurisdiction have been filed, and all
material Taxes for which they are directly or indirectly liable or to which any
of their respective properties or assets are subject have been paid prior to
the time that such Taxes could give rise to a Lien thereon, except for
Contested Claims. There is no material proposed tax assessment against the
Company or Chancellor, and, to the best knowledge of the Company, there is no
basis for such assessment, except for Contested Claims.
4.13. ERISA
A. The Company and Chancellor and each of their respective ERISA Affiliates
are in material compliance with all applicable provisions and requirements of
the Internal Revenue Code and ERISA and the regulations thereunder with respect
to each Employee Benefit Plan and have timely performed all their material
obligations under each Employee Benefit Plan, in each case, to the extent
applicable.
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B. No ERISA Event has occurred or is reasonably expected to occur that
individually or in the aggregate resulted in or might reasonably be expected to
result in a Material Adverse Effect.
C. In accordance with the most recent actuarial valuations, the Amount of
Unfunded Benefit Liabilities individually or in the aggregate for all Pension
Plans (excluding for purposes of such computation any Pension Plans that have a
negative Amount of Unfunded Benefit Liabilities), could not be reasonably
expected to have a Material Adverse Effect.
D. Neither the Company nor Chancellor is a party to any Foreign Plans.
4.14. Compliance with Law
Each of the Company and Chancellor is in compliance with all Laws,
except where the failure to comply, singly or in the aggregate, would not have
a Material Adverse Effect.
4.15. Government Regulation
Neither the Company nor Chancellor is subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 (as any of the preceding acts have been amended)
or other Law that regulates the Incurrence by the Company or Chancellor of
Indebtedness, including, but not limited to, Laws relating to common contract
carriers or the sale of electricity, gas, steam, water or other public utility
services.
4.16. Capital Structure and Subsidiaries
After giving effect to the Transactions, (i) the Company will have no
interest in any Person other than Chancellor and Chancellor's direct and
indirect subsidiaries and the Company will own, free and clear of all Liens,
claims or restrictions on voting or transfer, all of the shares of outstanding
Capital Stock of Chancellor and each of the entities set forth on such Schedule
B as of the Closing Date owned by it, except as specified on Schedule B and
(ii) the Company will have no interest in any other Person. All of the issued
and outstanding shares of Capital Stock of the Company and each of its
Subsidiaries is, and at and as of the date of consummation of the Transactions
will be, duly authorized, validly issued, fully paid and nonassessable.
4.17. Intellectual Property
A. Schedule C sets forth a complete and correct list, as of the Closing Date,
of: (i) all patented or registered Intellec-
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tual Property and pending patent applications or applications for registration
of Intellectual Property owned or filed by or on behalf of the Company and
Chancellor; (ii) all trade names and unregistered trademarks or service marks
owned by or used by the Company and Chancellor; and (iii) all licenses of
Intellectual Property to which the Company and Chancellor or any of them is a
party, either as licensee or licensor. Except as set forth on Schedule C as of
the Closing Date, each of the Company and Chancellor or any of them own or are
licensed to use all Intellectual Property necessary to permit the operation of
their businesses as currently conducted.
B. Except as disclosed on Schedule C as of the Closing Date, no material claim
has been asserted by any Person with respect to the use of any such
Intellectual Property, or challenging or questioning the validity or
effectiveness of any such Intellectual Property. Except as disclosed on
Schedule C, the use of such Intellectual Property by the Company and Chancellor
does not infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any liabilities on the
part of the Company or Chancellor that would result in a Material Adverse
Effect. The consummation of the Transactions will not in any material manner
or to any material extent impair the ownership of (or the license to use, as
the case may be) any of such Intellectual Property by the Company or
Chancellor.
4.18. Environmental Matters
Except as set forth on Schedule D:
A. Each of the Company and Chancellor has complied in all material respects
with all applicable Environmental Law and the requirements of any permits
issued under such Environmental Law. There are no pending, past or threatened
Environmental Claims against the Company or Chancellor or any Real Property
currently or formerly owned, leased or operated by the Company or Chancellor.
There are no facts, circumstances, conditions or occurrences concerning the
operations of the Company or Chancellor (including, without limitation,
disposal or transportation of Hazardous Substances) or concerning any Real
Property owned, leased or operated by the Company or Chancellor, or on any
property adjoining or in the vicinity of any such Real Property, that could
reasonably be expected (a) to form the basis of an Environmental Claim against
the Company or Chancellor or any such Real Property, or (b) to cause any such
Real Property to be subject to any restrictions on the ownership, occupancy,
use or transferability of such Real Property by the Company or Chancellor under
any applicable Environmental Law.
B. Hazardous Material has not at any time been generated, used, treated or
stored on, or transported to or from, any Real
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Property owned, leased or operated by the Company or Chancellor where such
generation, use, treatment or storage has violated or could reasonably be
expected to violate any Environmental Law or could reasonably be expected to
result in an Environmental Claim. Hazardous Material has not at any time been
Released on or from any Real Property owned, leased or operated by the Company
or Chancellor or, to the knowledge of the Company, in the vicinity of such Real
Property, where such Release has violated or could reasonably be expected to
violate any applicable Environmental Law or could reasonably be expected to
result in an Environmental Claim against the Company or Chancellor. Except as
disclosed on Schedule D.1., no underground storage tanks or related piping is
located on any Real Property owned, leased or operated by the Company or
Chancellor.
C. Notwithstanding anything to the contrary in this Section 4.18, the
representations and warranties made in this Section 4.18 shall only be untrue
if the aggregate effect of all liabilities, failures, violations and
noncompliances of the types described above could reasonably be expected to
have a material adverse affect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the Company or
of the Company and its Subsidiaries taken as a whole.
4.19. Survival of Representations and Warranties
Subject to Section 9.10B, all representations and warranties in the
Loan Documents shall continue until one year after repayment of the Notes and
the Obligations, and any investigation at any time made by or on behalf of the
Lenders shall not diminish the Lenders' right to rely thereon.
4.20. Permits
Except as disclosed on Schedule E as of the Closing Date or otherwise
disclosed to the Lenders, the Company and Chancellor have, and immediately
after the consummation of the Transactions will have such certificates,
permits, licenses, franchises, consents, approvals, authorizations and
clearances that are material to the condition (financial or otherwise),
business or operations of the Company or Chancellor, taken as a whole
("Permits"), and are (and will be immediately after the consummation of the
Transactions) in compliance in all material respects with all applicable Laws
of all Tribunals as are necessary to own, lease or operate their respective
properties and to conduct their businesses in the manner as presently conducted
and to be conducted immediately after the consummation of the Transactions, and
all such Permits are valid and in full force and effect and will be valid and
in full force and effect
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immediately upon consummation of the Transactions. Each of the Company and
Chancellor is, and immediately after the consummation of the Transactions will
be, in compliance in all material respects with its respective obligations
under such Permits and no event has occurred that allows, or after notice or
lapse of time would allow, revocation or termination of such Permits, except
for any such revocation or termination as would not, singly or in the
aggregate, have a Material Adverse Effect.
4.21. Insurance
Each of the Company and Chancellor carries or is entitled to the
benefits of insurance (including self-insurance) in such amounts and covering
such risks as is generally maintained by companies of established repute
engaged in the same or similar businesses, and all such insurance is (and will
be immediately after the consummation of the Transactions) in full force and
effect.
4.22. Labor Matters
No labor disturbance by the employees of either the Company or
Chancellor exists or, to the best knowledge of the Company, is threatened, and
the Company is not aware of any existing or imminent labor disturbance by the
employees of any of the Company's or Chancellor's principal suppliers,
manufacturers or customers that could, singly or in the aggregate, have a
Material Adverse Effect.
4.23. Broker's or Finder's Fees
Other than those payable as Transaction Costs, no broker's or finder's
fees or commissions will be payable by the Company with respect to any
transaction contemplated hereby and no similar fees or commissions will be
payable by the Company for any other services rendered to the Company in
connection with the transactions contemplated hereby and thereby, other than
those payable to the Lenders and Agent. The Company represents, warrants,
covenants and agrees that it will indemnify the Lenders and the Agent against,
and hold each of them completely harmless from and against, any and all claims,
demands or liabilities for broker's or finder's fees or similar fees or
commissions asserted to have been incurred in connection with any of the
transactions contemplated hereby.
SECTION 5 AFFIRMATIVE COVENANTS
The Company covenants and agrees that, until the Bridge Loan and the
Notes and all other amounts due under this Agreement have been paid in full it
shall perform all covenants in this Section 5 required to be performed by it:
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5.1. Financial Statements and Other Reports
The Company will maintain, and will cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of consolidated financial
statements in conformity with GAAP. The Company will deliver to the Lenders
and the Agent:
(i) within 30 days after the end of each fiscal month (other than
the fiscal months ending March, June, September and December) of the Company,
(i) the combined and combining balance sheets of the Company and its
Subsidiaries for each fiscal month, each as of the end of such month and the
related combined and combining statements of income and statements of cash
flows for such month and for the last elapsed portion of the fiscal year ended
with the last day of such month, in each case setting forth in the statements
of income only, the comparative figures for the corresponding month in the
prior fiscal year and the budgeted figures for such month as set forth in the
respective budgets delivered pursuant to Section 5.1(v) and (ii) the balance
sheets of each of the Stations on an individual basis as of the end of such
month and the related statements of income and statements of cash flows for
such month and for the elapsed portion of the fiscal year ended with the last
day of such month, in each case setting forth in the statements of income only,
the comparative figures for the corresponding month in the prior fiscal year
and the budgeted figures for such month as set forth in the respective budgets
delivered pursuant to Section 5.1(v);
(ii) as soon as available and in any event within 45 days after the
close of each of the first three quarterly accounting periods in each fiscal
year of the Company; (i) the combined and combining balance sheets of the
Company and its Subsidiaries for each fiscal quarter, each as of the end of
such quarter and the related combined and combining statements of income and
statements of cash flows for such quarter and for the last elapsed portion of
the fiscal year ended with the last day of such quarter and setting forth in
the statements of income only, the comparative figures for the corresponding
quarter in the prior fiscal year and the budgeted figures for such quarter as
set forth in the respective budgets delivered pursuant to Section 5.1(v), and
(ii) the balance sheets of each of the Stations as of the end of such quarter
and the related statements of income and statements of cash flows for such
quarter and for the elapsed portion of the fiscal year ended with the last day
of such quarter, in each case setting forth in the statements of income only,
the comparative figures for the corresponding quarter in the prior fiscal year
and the budgeted figures for such quarter as set forth in the respective
budgets delivered pursuant to Section 5.1(v);
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(iii) within 95 days after the close of each fiscal year of the
Company, (i) the consolidated and consolidating balance sheets of the Company
and its Subsidiaries for each fiscal year, each as at the end of such fiscal
year and the related statements of income and retained earnings and of cash
flows for such fiscal year and, setting forth comparative figures for the
preceding fiscal year and certified, in the case of such consolidated
statements, by Coopers & ▇▇▇▇▇▇▇ L.L.P. or such other independent certified
public accountants of recognized national standing reasonably acceptable to the
Agent, (ii) the balance sheets of each of the Stations at the end of such
fiscal year and the related statement of income and retained earnings and
statement of cash flows for such fiscal year, in each case setting forth
comparative figures for the preceding fiscal year for income statements only
and (iii) management's discussions and analysis of the important operational
and financial developments during such fiscal year in respect of the Company
and its Subsidiaries;
(iv) promptly after the receipt thereof by the Company or any of
its Subsidiaries, a copy of any final "management letter" received by the
Company or such Subsidiary from its certified public accountants and a copy of
management's responses thereto;
(v) no later than 30 days following the commencement of the first
day of each fiscal year of the Company, budgeted statements of income in form
satisfactory to the Agent prepared by the Company for (x) each of the twelve
months of such fiscal year prepared in detail, and (y) each of the four years
immediately following such fiscal year prepared in summary form, in each case,
of each of the Company and its Subsidiaries and each of the Stations on an
individual basis accompanied by the statement of the President or Chief
Financial Officer or the Senior Vice President of Finance or any other person
designated in writing by the foregoing of the Borrower to the effect that, to
the best of his knowledge, the budget is a reasonable estimate for the period
covered thereby;
(vi) together with each delivery of financial statements pursuant
to Section 5.1(ii) above, (a) an Officers' Certificate of the Company stating
that the signers have reviewed the terms of this Agreement and the Notes and
have made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Company and its Subsidiaries
during the accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as of the
date of the Officers' Certificate, of any condition or event that constitutes
an Event of Default or Potential Event of Default, or, if any such condition or
event ex-
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isted or exists, specifying the nature and period of existence thereof and what
action the Company has taken, is taking and proposes to take with respect
thereto; and (b) a Compliance Certificate demonstrating in reasonable detail
compliance (as determined in accordance with GAAP) during and at the end of
such accounting periods with the restrictions contained in Sections 6.1, 6.2,
6.3, 6.4, 6.5, 6.8 and 6.11;
(vii) promptly, and in any event within three Business Days after an
Officer of the Company obtains knowledge thereof, notice of (1) the occurrence
of any event which constitutes a Default or Event of Default and (ii) any
litigation or governmental investigation or proceeding pending (x) against the
Company or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect, (y) with respect to any material Indebtedness of the
Company and its Subsidiaries taken as a whole or (z) with respect to any other
document which could reasonably be expected to have a Material Adverse Effect;
(viii) promptly, copies of all (x) financial information, proxy
materials and other information and reports, if any, which the Company or any
of its Subsidiaries shall file with the Commission or any successor thereto, or
deliver to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor) and (y) material filings or communications with the
FCC or under, or as required by, the Communications Act;
(ix) from time to time, such other information or documents
(financial or otherwise) with respect to the Company or its Subsidiaries as any
Lender may reasonably request in writing;
(x) promptly upon any executive officer of the Company obtaining
knowledge (a) of any condition or event that constitutes an Event of Default or
Potential Event of Default, or becoming aware that the Lenders or Agent has
given any notice or taken any other action with respect to a claimed Event of
Default or Potential Event of Default under this Agreement, (b) that any Person
has given any notice to the Company or any Subsidiary of the Company or taken
any other action with respect to a claimed default or event or condition that
might result in an Event of Default referred to in Section 7.2, (c) of any
condition or event that would be required to be disclosed in a current report
filed with the Commission on Form 8-K whether or not the Company is required to
file such reports under the Exchange Act or (d) of the occurrence of any event
or change that has caused or evidences, either in any case or in the aggregate,
a Material Adverse Effect, an Officers' Certificate specifying the nature and
period of existence of any such
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condition or event, or specifying the notice given or action taken by such
holder or Person and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition, and what action the Company has
taken, is taking and proposes to take with respect thereto;
(xi) promptly upon any executive officer of the Company obtaining
knowledge of (X) the institution of, or non-frivolous threat of, any action,
suit, proceeding (whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting the Company or any of its
Subsidiaries or any property of the Company or any of its Subsidiaries
(collectively, "Proceedings") not previously disclosed in writing by the
Company to the Lenders or (Y) any material development in any Proceeding that,
in any case:
(1) if adversely determined, has a reasonable possibility of giving rise
to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the Transactions;
written notice thereof together with such other information as may be
reasonably available to the Company or any of its Subsidiaries to enable
the Lenders and its counsel to evaluate such matters;
(xii) not later than the last day of each fiscal year of the
Company, a report in form and substance satisfactory to the Agent outlining all
material insurance coverage maintained as of the date of such report by the
Company and its Subsidiaries and all material insurance coverage planned to be
maintained by such Persons in the subsequent fiscal year;
(xiii) in writing, promptly upon an executive officer of the Company
obtaining knowledge that the Company or any of its Subsidiaries has received
notice or otherwise learned of any claim, demand, action, event, condition,
report or investigation indicating any potential or actual liability arising in
connection with (x) the noncompliance with or violation of the requirements of
any Environmental Law that could reasonably be expected to have, in dividually
or in the aggregate, a Material Adverse Effect, (y) the Release or threatened
Release of any Hazardous Material, substance or constituent into the
environment that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or that Release the Company or any of its
Subsidiaries would have a duty to report to a Tribunal under an Environmental
Law, or (z) the existence of any Environmental Lien on any properties or assets
of the Company or any of its Subsidiaries;
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(xiv) promptly after the availability thereof, copies of all
material amendments to the certificate of incorporation or by-laws of the
Company or Chancellor;
(xv) promptly upon any Person becoming a Subsidiary of the Company,
a written notice setting forth with respect to such Person (a) the date on
which such Person became a Subsidiary of the Company and (b) all of the data
required to be set forth in Schedule B with respect to all Subsidiaries of the
Company; and
(xvi) with reasonable promptness, such other information and data
with respect to the Company or any of its Subsidiaries or any of their
respective property, business or assets as from time to time may be reasonably
requested by any Lender; provided that no information or data shall be required
to be delivered hereunder or under any other provision of this Agreement if it
would violate any applicable attorney-client or accountant-client privilege.
5.2. Corporate Existence, Etc.
The Company will at all times preserve and keep in full force and
effect its corporate existence and rights and franchises to its business and
those of each of its Subsidiaries, except as permitted by Section 6.6 or where
the failure to so preserve or keep will not, singly or in the aggregate, have a
Material Adverse Effect.
5.3. Payment of Taxes and Claims
The Company will, and will cause each of its Subsidiaries to, pay all
material Taxes, assessments and other governmental charges imposed upon it or
any of its material properties or assets or in respect of any of its
franchises, business, income or property before any material penalty accrues
thereon, and all claims (including, without limitation, claims for labor,
services, materials and supplies) for sums that have become due and payable and
that have or may become a Lien upon any of its properties or assets prior to
the time when any material penalty or fine shall be incurred with respect
thereto, other than Contested Claims.
5.4. Maintenance of Properties; Insurance
The Company will maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of the Company and its Subsidiaries
and from time to time promptly will make or cause to be made all necessary
repairs, renewals and replacements thereof; provided that nothing in this
Section 5.4 shall prevent the Company or any of its
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Subsidiaries from discontinuing the use, operation or maintenance of any such
properties, or disposing of any of them, if such action is in the ordinary
course of business or, in the reasonable good faith judgment of the Company or
such subsidiaries, necessary or desirable in the conduct of its business or
otherwise permitted by this Agreement. The Company will maintain or cause to
be maintained, with financially sound and reputable insurers or with self
insurance programs, in each case to the extent consistent with prudent business
practices and customary in its industry, insurance with respect to its
properties and business and the properties and businesses of its Subsidiaries
against loss or damage of the kinds (including, in any event, business
interruption insurance) and in the amounts customarily carried or maintained
under similar circumstances by corporations of established reputation engaged
in similar businesses and owning similar properties in the same general
respective areas in which the Company and its Subsidiaries operate.
5.5. Inspection
The Company shall permit any authorized representatives designated by
any Lender to visit and inspect any of the properties of the Company or its
Subsidiaries, including, without limitation, its and their financial and
accounting records, and to receive copies and extracts therefrom, and to
discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that representatives of
the Company or any of its Subsidiaries may, if it so chooses, be present at or
participate in any such discussion), all upon reasonable notice and at such
reasonable times during normal business hours and as often as may be reasonably
requested.
5.6. Equal Security for Loan and Notes
If the Company or any of its Subsidiaries shall create, assume or
suffer to exist any Lien upon any of their respective property or assets,
whether now owned or hereafter acquired, other than Liens permitted by the
provisions of Section 6.2, the Company shall, unless waived by the Required
Lenders, make or cause to be made effective provision whereby the Obligations
under this Agreement will be secured by such Lien equally and ratably with any
and all other Indebtedness thereby secured as long as any such Indebtedness
shall be secured; provided that this covenant shall not be construed as or
deemed to be a consent by the Lenders to any violation of the provisions of
Section 6.2; and provided, further, that the Company shall under no
circumstances be required to make or cause to be made effective provision
whereby the Obligations under this Agreement will be secured, directly or
indirectly, by Margin Stock.
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5.7. Compliance with Laws, Etc.
The Company shall, and shall cause each of its Subsidiaries to, comply
with the requirements of all applicable Laws of any Tribunal, to the extent
noncompliance, singly or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
5.8. Maintenance of Accurate Records, Etc.
The Company shall keep, and will cause each of its Subsidiaries to
keep, true books and records and accounts in which full and correct entries
will be made of all its respective business transactions, and will reflect, and
cause each of its Subsidiaries to reflect, in its respective financial
statements adequate accruals and appropriations to reserves all in accordance
with GAAP and consistent with prior business practices.
5.9. ERISA Compliance
Each of the Company and its Subsidiaries will (i) make prompt payment
of all contributions that it is obligated to make under (x) all Pension Plans
and that are required to meet the minimum funding standard set forth in ERISA
with respect to each of the Pension Plans that is not a Multiemployer Plan, and
(y) all Multiemployer Plans, (ii) within 30 days after the filing thereof,
furnish to the Lenders each Schedule B to the annual return/report (Form 5500
Series), required to be filed with the Department of Labor and/or the Internal
Revenue Service pursuant to ERISA, with respect to each of the Pension Plans
that is not a Multiemployer Plan for each Plan year, and (iii) notify the
Lenders promptly upon becoming aware of any fact, including but not limited to,
any Reportable Event arising in connection with any of the Pension Plans that
is not a Multiemployer Plan, which could be reasonably expected to constitute
grounds for termination thereof by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Pension Plan, together with a statement as to the action, if any, proposed to
be taken with respect thereto.
5.10. Register
The Company hereby designates the Agent to serve as the Company's
agent, solely for purposes of this Section 5.10, to maintain a register (the
"Register") on which it will record the Bridge Loan made by the Lenders and the
repayment in respect of the principal amount of the Bridge Loan of the Lenders.
Failure to make any such recordation, or any error in such recordation, shall
not affect the Company's obligations in respect of the Bridge Loan. The
transfer of the Bridge Loan
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Commitment of the Lenders and the rights to the principal of, and interest on,
the Bridge Loan made pursuant to the Bridge Loan Commitment shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of the Bridge Loan Commitment and the Bridge
Loan and prior to such recordation all amounts owing to the transferor with
respect to such Bridge Loan Commitment and Bridge Loan shall remain owing to
the transferor. The registration of assignment or transfer of all or part of
the Bridge Loan Commitment and the Bridge Loan shall be recorded by the Agent
on the Register only upon the receipt by the Agent of a properly executed and
delivered assignment and assumption agreement pursuant to Section 9.2A.
Coincident with the delivery of such an assignment and assumption agreement to
the Agent for acceptance and registration of assignment or transfer of all or
part of the Bridge Loan, or as soon thereafter as practicable, the Lenders
shall surrender the Notes evidencing the Bridge Loan, and thereupon a new Notes
of the same type and in the same aggregate principal amount shall be issued to
the assigning or transferor Lenders and/or the new Lenders.
5.11 Environmental Covenants.
A. Promptly upon, and in any event within ten (10) Business Days after, an
officer of the Company or Chancellor obtains knowledge thereof, it will furnish
to Agent notice of the following environmental matters, unless such
environmental matters could not, individually or when aggregated with all other
such environmental matters, be reasonably expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Company or of the Company and its
Subsidiaries taken as a whole:
(1) any pending or threatened Environmental Claim against the Company or
Chancellor or any Real Property owned, leased or operated by the Company or
Chancellor;
(2) any condition or occurrence on or arising from any Real Property
owned, leased or operated by the Company or Chancellor that (a) results in
noncompliance by the Company or Chancellor with any applicable Environmental
Law or (b) could reasonably be expected to form the basis of an Environmental
Claim against the Company or Chancellor or any such Real Property;
(3) any condition or occurrence on any Real Property owned, leased or
operated by the Company or Chancellor that could reasonably be expected to
cause such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by the Company or Chancellor of such Real
Property under any Environmental Law; and
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(4) the taking of any removal or remedial action in response to the actual
or alleged presence of any Hazardous Material on any Real Property owned,
leased or operated by the Company or Chancellor as required by any
Environmental Law or any governmental or other administrative agency; provided
that in any event the Company shall deliver to Agent all notices received by it
or Chancellor from any government or governmental agency or other Person under,
or pursuant to, CERCLA or similar state law.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Company's or Chancellor's response thereto. In addition, the Company will
provide Agent with copies of all material communications with any government or
governmental agency relating to Environmental Law, all communications with any
Person (other than its attorneys) relating to Environmental Claims, and such
detailed reports of any Environmental Claim as may reasonably be requested by
the Agent.
B. The Company will comply, and will cause each Subsidiary to comply, in all
material respects with any Environmental Law applicable to the ownership or use
of any or all of the Real Property now or hereafter owned, leased or operated
by the Company or Chancellor, will promptly pay or cause to be paid all costs
and expenses incurred in connection with such compliance, and will keep or
cause to be kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Law. None of the Company or Chancellor will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Material on any Real
Property now or hereafter owned, leased or operated by the Company or
Chancellor, or transport or permit the transportation of Hazardous Material to
or from any such Real Property except for Hazardous Material used or stored at
any such Real Properties in material compliance with all applicable
Environmental Law and reasonably required in connection with the operation, use
and maintenance of any such Real Property, and so as not to give rise to a
material Environmental Claim.
C. At the written request of Agent or the Lenders, at any time and from time
to time, the Company will provide, at the Company's sole cost and expense, an
environmental site assessment report concerning any Real Property now or
hereafter owned, leased or operated by the Company or Chancellor, prepared by
an environmental consulting firm chosen by the Company and approved by Agent;
provided that such approval may not be unreasonably withheld, indicating the
presence or absence of Hazardous Material and the potential cost of any
required removal or remedial action in connection with any Hazardous Material
on such Real Property; and further provided that such request may be made only
if (1) there has occurred and is continuing an
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Event of Default, (2) the Agent reasonably believes that the Company or
Chancellor or any such Real Property is not in material compliance with an
applicable Environmental Law, or (3) circumstances exist that reasonably could
be expected to form the basis of an Environmental Claim against the Company or
Chancellor. If the Company fails to provide the same within 90 days after such
request was made, Agent may order the same, and the Company shall grant and
hereby grants to Agent and the Lenders and their agents access to such Real
Property and specifically grants Agent and the Lenders an irrevocable
non-exclusive license, subject to the rights of tenants, to undertake such an
assessment, all at the Company's expense.
SECTION 6 NEGATIVE COVENANTS
The Company covenants and agrees that until the satisfaction in full
of the Bridge Loan and the Notes and all other Obligations due under this
Agreement it will fully and timely perform all covenants in this Section 6.
6.1. Indebtedness
The Company shall not, and shall not cause or permit any of its
Subsidiaries, directly or indirectly, to Incur, or remain or become directly or
indirectly liable with respect to, any Indebtedness, except for the following
("Permitted Indebtedness"):
(i) the Company may Incur and remain liable with respect to the
Obligations and the Notes;
(ii) The Company and its Subsidiaries may Incur and remain liable
with respect to Indebtedness under the Bank Financing Documents as such Bank
Financing Documents are in effect on the Closing Date.
(iii) the Subsidiaries of the Company may become and remain liable
with respect to Contingent Obligations permitted by Section 6.5 and, upon any
matured obligations actually arising pursuant thereto, the Indebtedness
corresponding to the Contingent Obligations so extinguished;
(iv) the Company and its Subsidiaries may Incur and remain liable
with respect to Intercompany Indebtedness;
(v) the Company and its Subsidiaries may remain liable with
respect to the Indebtedness that is existing on the Closing Date and is
described on Schedule F;
(vi) the Company and its Subsidiaries may Incur and remain liable
with respect to Permitted Refinancing Indebtedness;
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(vii) (A) unsecured Indebtedness of the Subsidiaries owing to the
seller in any acquisition permitted pursuant to Section 6.4(xi) and Section
6.12(iv) or (B) Indebtedness of the Subsidiaries of the Company assumed in
connection with any such acquisition of an asset securing such Indebtedness in
an aggregate principal amount not to exceed $3,750,000 at any time outstanding,
for both clause (A) and clause (B) provided that such Indebtedness was not
incurred in connection with, or in anticipation or contemplation of, such
acquisition;
(viii) the Company and its Subsidiaries may Incur and remain liable
with respect to Indebtedness evidenced by Capitalized Lease Obligations in an
amount not to exceed $3,000,000 in any fiscal year;
(ix) the Company and its Subsidiaries may Incur and remain liable
with respect to Indebtedness subject to Liens permitted under Section 6.2; and
(x) the Company and its Subsidiaries may become and remain liable
with respect to other Indebtedness in an aggregate principal amount not to
exceed at any time outstanding $10,000,000.
6.2. Liens
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset (including any
document or instrument in respect of goods or accounts receivable) of the
Company or of any of its Subsidiaries, whether now owned or hereafter acquired,
or assign or otherwise convey any right to receive any income or profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
financing statement or other similar notice of any Lien with respect to any
such property, asset, income or profits under the UCC of any State or under any
similar recording or notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens on (a) Real Property Assets or (b) equipment, fixtures
and other similar property of the Company and any of its Subsidiaries, in each
case securing Indebtedness described in Section 6.1; provided that such Liens
shall extend only to the equipment, fixtures, and other similar property so
financed (and improvements or attachments thereto) and the proceeds thereof;
(iii) the replacement, extension or renewal of any Lien permitted by
this Section 6.2 upon or in the same property subject to such Lien and as
security for the same obligations
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or any refinancings thereof to the extent such refinancings are permitted under
Section 6.1; provided that such Lien does not extend to or cover any property
other than the property covered by such Lien immediately prior to such
replacement, extension or renewal of such Lien (and improvements or attachments
thereto) and the principal of the obligations secured thereby is not increased;
(iv) Liens upon assets subject to Capitalized Lease Obligations to
the extent permitted by Section 6.1(viii), provided that (x) such Liens only
serve to secure the payment of Indebtedness arising under such Capitalized
Lease Obligation and (y) the Lien encumbering the asset giving rise to the
Capitalized Lease Obligation does not encumber any other asset of the Company
or any Subsidiary of the Company;
(v) deposits made in the ordinary course of business to secure
liabilities for premiums to insurance carriers, provided that such deposits do
not exceed in the aggregate an amount equal to $2,500,000 at any time;
(vi) Liens to secure obligations permitted by Section 6.12(v);
(vii) Liens on property or assets in existence at the time such
property or assets are acquired pursuant to Section 6.4(xi) and Section
6.12(iv), provided that (x) any Indebtedness that is secured by such Liens is
permitted to exist under Section 6.1(vii), and (y) such Liens are not incurred
in connection with, or in contemplation or anticipation of, such acquisition
and do not attach to any other asset of the Company or any of its Subsidiaries;
(viii) ▇▇▇▇ ▇▇▇▇▇▇▇ money deposits in connection with acquisitions
otherwise permitted under this Agreement in an amount not to exceed $10,000,000
in the aggregate; and
(ix) additional Liens securing Indebtedness of the Company and its
Subsidiaries not otherwise permitted under this Section 6.2 to the extent
attaching to properties and assets with an aggregate fair market value not in
excess of and securing liabilities not in excess of $2,500,000.
6.3. Restricted Payments
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, (a) declare or pay any dividend, or
make any distribution, on any Capital Stock of the Company (other than (i)
dividends or distributions payable solely in Qualified Capital Stock of the
Company and (ii) dividends on the Company's 7% Convertible Preferred Stock),
(b) purchase, redeem or otherwise acquire or retire for
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value any of the Company's Capital Stock, or any warrants, rights or options
to acquire shares of any class of such Capital Stock or (c) make any principal
payment on, purchase, defease, redeem, prepay, or otherwise acquire or retire
for value, other than any scheduled final maturity, scheduled repayment or
scheduled sinking fund payment, any Subordinated Indebtedness or Pari Passu
Indebtedness of the Company (any such dividend, distribution, purchase,
redemption, acquisition, retirement, defeasance or prepayment set forth in
clauses (a), (b) and (c) above a "Restricted Payment").
Notwithstanding the foregoing,
(i) any Subsidiary of the Company may pay dividends to the Company
or any Subsidiary of the Company;
(ii) the Company may pay cash dividends, and Chancellor may pay
cash dividends to the Company to enable the Company, to make payments (A) to
pay management fees or executive compensation to the extent such management
fees or executive compensation are permitted by the Bank Financing Documents
and pursuant to the Monitoring and Oversight Agreements (as defined in the Bank
Financing Documents and to the extent permitted therein), (B) to repurchase the
Company's Common Stock and/or options to purchase Company Common Stock held by
(x) Dinetz pursuant to the Dinetz Employment Contract (as defined in the Bank
Financing Documents) or (y) directors, executives, officers, members of
management, or employees of the Company or any of its Subsidiaries upon the
exercise of options in accordance with the Employee Stock Option Plan (as
defined in the Bank Financing Documents), or (z) other stockholders of the
Company so long as the purpose of such purchase is to acquire Company Common
Stock for reissuance to new employees of the Company and its Subsidiaries to
the extent so reissued within 12 months of any such purchase so long as the
aggregate amount of cash expended by the Company pursuant to subclause (B) of
this clause (iii) shall not exceed $2,500,000 in any fiscal year or $5,000,000
in the aggregate (plus the amount of cash proceeds paid by any new employee in
consideration for reissuance of Company Common Stock repurchased by the Company
to the extent received by the Company within 12 months following any such
repurchase, minus the amount of cash paid in respect of the Company's
Subordinated Notes permitted under Section 9.11(ii) of the Bank Financing
Documents), and (C) on the Company's Subordinated Notes, to the extent
permitted under Section 9.11(ii) of the Bank Financing Documents, so long as in
the case of subclauses (B) and (C) of this clause (iii), no Potential Event of
Default or Event of Default exists or would result therefrom;
(iii) Chancellor may pay cash dividends to the Company for the
purpose of paying, so long as all proceeds thereof are promptly used by the
Company to pay franchise taxes and fed-
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eral, state and local income taxes and interest, and penalties with respect
thereto, if any, payable by the Company;
(iv) Chancellor may pay cash dividends to the Company to enable the
Company to pay cash dividends to redeem fractional shares of its common stock
so long as the aggregate amount thereof does not exceed $5,000;
(v) Chancellor may pay regularly scheduled dividends on its
Exchangeable Preferred Stock pursuant to the terms thereof solely through the
issuance of additional shares of Exchangeable Preferred Stock;
(vi) Chancellor may pay cash dividends to the Company for the
purpose of making, so long as all proceeds thereof are promptly used by the
Company to make, cash payments in lieu of issuing fractional shares of Company
Common Stock upon the conversion of the Convertible Preferred Stock in an
aggregate amount not to exceed $150,000;
(vii) Chancellor may pay cash dividends on its Exchangeable
Preferred Stock in lieu of issuing fractional shares of Exchangeable Preferred
Stock; and
(viii) Chancellor may pay cash dividends to the Company for the
purpose of making, so long as all proceeds thereof are promptly used by the
Company to make, payments (including voluntary prepayments) in respect of
principal under this Agreement.
6.4. Investments
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment (other than
Permitted Investments) in any Person, except:
(i) the Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date described on Schedule B;
(ii) the Company and its Subsidiaries may make and own Investments
received in connection with the bankruptcy of suppliers and customers or
received pursuant to a plan of reorganization of any supplier or customer, in
each case in settlement of delinquent obligations or disputes with such
suppliers or customers;
(iii) the Company and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary terms;
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(iv) the Company and its Subsidiaries may make loans and advances
in the ordinary course of business to their respective officers, directors and
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of such
loans and advances) shall not exceed $1,000,000;
(v) the Company may enter into Interest Protection Agreements to
the extent entered into pursuant to the Bank Financing Documents;
(vi) the Company may repurchase Company Common Stock to the extent
permitted by Section 6.3;
(vii) promissory notes and other similar non-cash consideration
received by the Company and its Subsidiaries in connection with dispositions
permitted by Section 6.6 and Section 6.12, so long as the aggregate principal
amount thereof does not exceed $1,000,000 at any one time outstanding;
(viii) investments by the Company in any Subsidiary;
(ix) investments by the Company or any of its Subsidiaries to the
extent permitted by Section 9.07 of the Bank Financing Documents;
(x) guarantees of Indebtedness made by the Company or any of its
Subsidiaries to the extent otherwise permitted by Section 6.1;
(xi) so long as no Potential Event of Default or Event of Default
then exists or would arise therefrom, the Company may permit its Subsidiaries
to, acquire the capital stock or assets of any Person so long as (x) any such
acquisition is for all the capital stock or all or substantially all of the
business of, or an operating division or a business unit of, such Person, (y)
the aggregate consideration paid (including Indebtedness assumed in connection
therewith) pursuant to this clause (xiii) does not exceed $50,000,000 and (z)
the Company shall be in compliance with the financial covenants contained in
Sections 9.08 through 9.10, inclusive, of the Bank Financing Documents, with
such financial covenants to be calculated on pro forma basis as if such
acquisition had been consummated on the first day of the then most recently
ended Test Period (as defined in the Bank Financing Documents) (and any
Indebtedness incurred, issued or assumed in connection therewith had been
incurred on the first day of, and remained outstanding throughout, such Test
Period); and
(xii) in addition to investments permitted by clause (i) through
(xi) of this Section 6.4, the Company and its Subsidiaries may make additional
loans, advances and investments
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in an aggregate principal amount not to exceed $2,500,000 at any time
outstanding.
6.5. Contingent Obligations
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create or become or remain liable with
respect to any Contingent Obligation, except:
(i) the Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations outstanding on the Closing Date
described in Schedule F, which Contingent Obligations may be refinanced,
extended, renewed, refunded or defeased in whole or in part;
(ii) the Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary indemnification
and purchase price adjustment obligations incurred in connection with the
Acquisition, Asset Sales or other sales of assets; provided that the maximum
assumable liability in respect of all such obligations shall at no time exceed
the gross proceeds actually received by the Company and its Subsidiaries in
connection with such Asset Sales and other sales;
(iii) the Company and its Subsidiaries may become and remain liable
with respect to guarantees of Indebtedness or Contingent Obligations of a
Wholly Owned Subsidiary of the Company and a Subsidiary of the Company may
become and remain liable with respect to guarantees of Indebtedness or
Contingent Obligations of the Company or a Wholly Owned Subsidiary of the
Company;
(iv) the Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations that (A) exist at the time a Person
becomes a Subsidiary of the Company or (b) are assumed in connection with the
acquisition of assets from a Person, but not incurred in contemplation of such
Person becoming a Subsidiary of the Company;
(v) the Company and its Subsidiaries may Incur and remain liable
with respect to guarantees (other than guarantees of Indebtedness which is not
a Capitalized Lease Obligation) made in the ordinary course of business,
provided that such guarantees could not, individually or in the aggregate, have
a Material Adverse Effect;
(vi) the Company and its Subsidiaries may Incur and remain liable
with respect to Contingent Obligations under Interest Rate Protection
Agreements (as defined in the ▇▇▇▇ ▇▇-
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nancing Documents) to the extent entered into pursuant to the Bank Financing
Documents.
6.6. Restriction on Fundamental Changes, Asset Purchases or Sales
Subject to Section 5.2 and other than the sale of 100% of a Subsidiary
of the Company in accordance with Section 2.4A(ii)(b) and Section 6.12, the
Company shall not, and shall not cause or permit any of its Subsidiaries to,
directly or indirectly, enter into any transaction, or series of related
transactions, or merger, amalgamation, consolidation or combination, or
consolidate, or liquidate, windup or dissolve itself (or suffer any liquidation
or dissolution), or convey, sell, lease, sublease, transfer or otherwise
dispose of, in one transaction or in a series of transactions, all or
substantially all of its business, property or assets, whether now owned or
hereafter acquired, except:
(i) in connection with the Acquisition or the Evergreen Merger;
(ii) Capital Expenditures (as defined in the Bank Financing
Documents) made by Chancellor and its Subsidiaries in the ordinary course of
business;
(iii) investments may be made to the extent permitted by Section 6.4
and Section 6.12;
(iv) to the extent otherwise permitted pursuant to the Bank
Financing Documents, the sale or other disposition of Stations of Chancellor or
its Subsidiaries shall be permitted for cash at fair market value (as
determined in good faith by the Company) so long as the proceeds thereof are
applied in accordance with the requirements of this Agreement and Section
4.02(e) of the Bank Financing Documents;
(v) the WDRQ Detroit Disposition (as defined in the Bank Financing
Documents) shall be permitted; and
(vi) any Subsidiary of the Company may be merged, amalgamated,
consolidated or combined with or into the Company or any Wholly Owned
Subsidiary of the Company or be liquidated, wound up or dissolved, or all or
substantially all of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one transaction or in a series
of transactions, to the Company or to any Wholly Owned Subsidiary of the
Company; provided that (A) no Potential Event of Default or Event of Default
shall have occurred and be continuing or would result therefrom, (B) in the
case of such a merger, amalgamation, consolidation or combination of the
Company and a Subsidiary of the Company, the Company shall be the
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continuing or surviving corporation, and (C) the surviving entity (I) continues
to be bound as such under this Agreement and (II) executes and delivers to the
Agent immediately upon consummation of such transaction a written confirmation
or acknowledgment to such effect, in form and substance satisfactory to the
Agent, together with evidence of appropriate corporate power, authority and
action and a written legal opinion in form and substance satisfactory to the
Agent to the effect that this Agreement continues to be a legal, valid and
binding obligation of such entity, enforceable against such entity in
accordance with its terms (subject to customary exceptions in respect of
bankruptcy, insolvency and other equitable remedies) and with respect to such
other matters as the Agent may reasonably request.
6.7. Limitation on Dividend and Other Payment Restrictions Affecting
Subsidiaries
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or permit or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Subsidiary of the Company to (a) pay dividends or make any other
distributions on its Capital Stock or any other interest or participation in,
or measured by, such Subsidiary's profits; (b) make loans or advances or pay
any Indebtedness or other obligation owed to the Company or to any Subsidiary
of the Company; or (c) transfer any of its property or assets to the Company or
to any Subsidiary of the Company (any such restriction or encumbrance a
"Payment Restriction"), and except as permitted under any certificate of
designation governing the terms of any issue of Preferred Stock of Chancellor
and except for such encumbrances or restrictions existing under or by reason
of: (1) any restrictions contained in (i) the Bank Financing Documents, the
Loan Documents or the Chancellor Indentures or (ii) secured Indebtedness
otherwise permitted to be incurred pursuant to Sections 6.1 and 6.2 that limits
the right of the debtor to dispose of the assets securing such Indebtedness;
(2) any restrictions contained in the Acquisition Agreement; (3) customary
nonassignment provisions of any lease or sublease governing a leasehold
interest of any Subsidiary of the Company; (4) customary net worth provisions
contained in leases and other agreements entered into by a Subsidiary in the
ordinary course of business; (5) customary restrictions with respect to a
Subsidiary pursuant to an agreement that has been entered into for the sale or
disposition of all or substantially all of the Capital Stock or assets of such
Subsidiary; (6) applicable law; (7) any instrument that Refinances any
Indebtedness effecting any such encumbrance or restriction pursuant to clause
(1) above; provided that the provisions relating to any such encumbrance or
restriction in any such instrument are not materially less favorable to the
Company or its Sub-
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sidiaries or the Lenders than those contained in the agreements referred to in
clause (1); and (8) customary provisions restricting assignment of any
licensing agreement entered into by a Subsidiary in the ordinary course of
business.
6.8. Restrictions on Additional Acquisitions
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, enter into any agreements to purchase
or acquire all or a substantial portion of the business, property or assets of,
or stock or other evidence of beneficial ownership of, any Person or any
direction or line of business of any Person, other than the Acquisition or as
permitted pursuant to Section 6.6.
6.9. Transactions with Affiliates
The Company will not, and will not permit any of its Subsidiaries to
enter into any transaction or series of related transactions, whether or not in
the ordinary course of business, with any Affiliate of the Company or any of
its Subsidiaries, other than in the ordinary course of business and on terms
and conditions substantially as favorable to the Company or such Subsidiary as
would reasonably be obtained by the Company or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except that:
(i) Dividends may be paid to the extent provided in Section 6.3;
(ii) loans may be made and other transactions may be entered into
by the Borrower and its Subsidiaries to the extent permitted by Sections 6.1,
6.4, 6.5 and 6.6;
(iii) customary fees and reimbursement of expenses may be paid to
directors of the Company;
(iv) the Company, or to the extent not paid by the Company,
Chancellor, may pay to ▇▇▇▇▇, Muse & Co. Partners, L.P., its Affiliates or any
successor thereto controlled by ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
and/or ▇▇▇▇ ▇. ▇▇▇▇, the amounts set forth in the Amended and Restated
Financial Monitoring and Oversight Agreement dated as of January 1, 1996, among
the Company, Chancellor and ▇▇▇▇▇, Muse & Co. Partners, L.P. and the Financial
Advisory Agreement dated as of January 1, 1996 among HM2/Management Partners
L.P., the Company and Chancellor in the form delivered to the Agent on or prior
to the Closing Date, as it may be modified thereafter but without giving effect
to any modifications thereto that in any way adversely affects the interests of
the Lenders (including, without limitation, by increasing in any respect the
costs or
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liabilities of the Company or any of its Subsidiaries) without the consent of
the Required Lenders other than increases in base fees as previously disclosed
to the Agent (collectively, "the Monitoring and Oversight Agreements");
(v) the Company and its Subsidiaries may enter into and make
payments pursuant to employment arrangements with executive officers and senior
management employees in the ordinary course of business;
(vi) the Company and its Subsidiaries may make payments pursuant to
employment agreements existing on the Closing Date;
(vii) the Company and its Subsidiaries may make payments pursuant to
the Tax Sharing Agreements;
(viii) the Company and its Subsidiaries may maintain their present
Operating Agreements (as defined in the Bank Financing Documents); and
(ix) the Company may make capital contributions to Chancellor.
6.10. Subsidiary Stock
Except for any sale of 100% of the Capital Stock or other equity
securities of any of the Company's Subsidiaries in compliance with the
provisions of Section 6.6, the Company will not, and will not permit any of its
Subsidiaries to directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of Capital Stock or other equity securities
of any of its Subsidiaries, except (i) to the Company or to a Wholly Owned
Subsidiary of the Company, (ii) Asset Sales made in compliance with this
Agreement or (iii) as security under the Bank Financing Documents.
6.11. Business Activities
The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, materially alter the nature of the
consolidated business of the Company and its Subsidiaries from that in
existence immediately after giving effect to the Transactions or similar or
related businesses. The Company shall not engage in any business or other
activity other than the ownership of the Capital Stock of the Subsidiaries of
the Company.
6.12. Asset Sales
(a) The Company shall not, and shall not cause or permit any of its
Subsidiaries to, directly or indirectly, con-
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summate any Asset Sale unless (1) the Company or such Subsidiary, as the case
may be, receives consideration therefor at the time thereof at least equal to
the fair market value at the time of such Asset Sale of the property, assets or
stock that is the subject of such Asset Sale, (2) at least 75% of the
consideration received therefor by the Company or such Subsidiary is in the
form of cash or Cash Equivalents and (3) all of the Net Cash Proceeds in
respect thereof are applied by the Company or a Subsidiary of the Company in
accordance with Section 2.4A(ii)(b).
(b) Notwithstanding the foregoing, none of the following shall be an
Asset Sale for the purposes of Section 2.4(A)(ii)(b):
(i) each of the Company and its Subsidiaries may make sales or
other transfers of airtime in the ordinary course of business and consistent
with past practices;
(ii) licenses or sublicenses by the Company and its Subsidiaries of
software, trademarks and other intellectual property and general intangibles
and licenses, leases or subleases of other property in the ordinary course of
business and which do not materially interfere with the business of the Company
or any Subsidiary;
(iii) the Company or any Subsidiary of the Company may transfer
assets to or lease assets to or acquire or lease assets from the Company or any
Subsidiary to the extent permitted under the Bank Financing Documents or any
Subsidiary of Chancellor may be merged or consolidated with or into, or be
liquidated or dissolved into, Chancellor or any other Subsidiary of the Company
(so long as Chancellor or such Subsidiary is the surviving corporation);
(iv) to the extent otherwise permitted pursuant to the Bank
Financing Documents, Chancellor may, and may permit its Subsidiaries to,
simultaneously enter into a Station Swap or a Stock Swap (each as defined in
the Bank Financing Documents), so long as any cash proceeds received by
Chancellor or any of its Subsidiaries in connection with any such Stock Swap or
Station Swap shall be applied in accordance with Section 2.4A(ii)(b) of this
Agreement and Section 4.02(e) of the Bank Financing Documents;
(v) the Company and its Subsidiaries may sell or discount,
accounts receivable arising in the ordinary course of business (x) which are
overdue or (y) which the Company or its Subsidiaries may reasonably determine
are difficult to collect, but only in connection with the compromise or
collection thereof consistent with customary industry practice (and not as part
of any bulk sale or financing of receivables);
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(vi) transfers of condemned property to the respective governmental
authority or agency that have condemned same (whether by deed in lieu of
condemnation or otherwise), and transfers of properties that have been subject
to a casualty to the respective insurer of such property or its designee as
part of any insurance settlement, so long as the proceeds thereof are applied
as required by Section 4.02(g) of the Bank Financing Documents;
(vii) the SFX Exchange (as defined in the Bank Financing Documents)
shall be permitted; and
(viii) each of the Company and its Subsidiaries may sell or otherwise
dispose of equipment in the ordinary course of business which, in the
reasonable judgment of such Person, is obsolete, worn out or otherwise no
longer useful, in the conduct of such Person's business.
Nothing in this covenant shall be deemed to prevent the exercise of
remedies by secured creditors of the Company or any Subsidiary of the Company.
SECTION 7 EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur and be continuing:
7.1. Failure To Make Payments When Due
Failure to pay any installment of principal of or interest on the
Bridge Loan when due, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise; or
7.2. Default in Other Agreements
(A) Failure of the Company or any of its Subsidiaries to pay principal
or interest on one or more issues of Indebtedness or Contingent Obligations of
the Company or of any of its Subsidiaries when due (including, in the
determination of such due date, any period of grace) (other than Indebtedness
referred to in Section 7.1) or (B) breach or default by the Company or any of
its Subsidiaries with respect to any other term of any one or more issues of
Indebtedness or Contingent Obligations of the Company or of any of its
Subsidiaries or any agreement or instrument evidencing or securing such
Indebtedness or Contingent Obligations and, in any case, such failure, breach
or default results in the acceleration of that Indebtedness or Contingent
Obligation prior to its stated maturity and, in any case, the principal amount
of such Indebtedness or Contingent Obligation and all other such Indebtedness
or Contingent Obligations of the Company and its Subsidiaries in respect
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of which there is such a failure to pay principal or interest or which has been
so accelerated equals $10,000,000 or more; or
7.3. Breach of Certain Covenants
Failure of the Company to perform or comply with any covenant, term or
condition contained in Sections 2.4A(ii), 2.4A(iv) or 5.2; or
7.4. Breach of Warranty
Any representation, warranty or certification made by the Company in
any Loan Document or in any statement or certificate at any time given by the
Company in writing pursuant hereto or thereto or in connection herewith or
therewith shall be false or incorrect in any material respect on the date as of
which made or deemed made; or
7.5. Other Defaults Under This Agreement or the Notes
The Company shall default in the performance of or compliance with any
covenant, term or condition contained in this Agreement or the Notes (other
than those covered by Section 7.1, 7.3 or 7.4) and such default shall not have
been remedied or waived in accordance with this Agreement within 30 days after
the date of written notice from the holder or holders of not less than 25% in
aggregate principal amount of the Bridge Loan then outstanding of such default;
or
7.6. FCC Denial
The FCC shall have determined finally not to have granted approval of
the transfer or other assignment of licenses contemplated by the Acquisition
and the Acquisition Agreement.
7.7. Involuntary Bankruptcy; Appointment of Custodian, Etc.
A court of competent jurisdiction enters a Bankruptcy Order under any
Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary
in an involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any Material Subsidiary
for all or substantially all of its properties, or
(C) orders the liquidation of the Company or any Material
Subsidiary,
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and in each case the order or decree remains unstayed and in effect for 60
days.
7.8. Voluntary Bankruptcy; Appointment of Custodian, Etc.
The Company or any Material Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for
relief against it in an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors or files a proposal or scheme of arrangement involving the
rescheduling or composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy
against it, or
(F) shall generally not pay its debts when such debts
become due or shall admit in writing its inability to pay its debts
generally.
7.9. Judgments and Attachments
Any money judgment, writ or warrant of attachment, or similar process
involving in any individual case or in the aggregate at any time an amount in
excess of $1,000,000 (to the extent not covered by third-party insurance as to
which the insurance company has not denied coverage) shall be entered or filed
against the Company or any of its Subsidiaries or any of their respective
properties or assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days or in any event later than five days prior to
the date of any proposed sale thereunder; or
7.10. Dissolution
Any order, judgment or decree shall be entered against the Company or
any Material Subsidiary decreeing the dissolution or split-up of the Company or
that Material Subsidiary and such order shall remain undischarged or unstayed
for a period in excess of 30 days.
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SECTION 8 THE AGENT
8.1. Appointment
The Lenders hereby irrevocably designate and appoint Bankers Trust as
Agent of the Lenders to act as specified herein and in the other Loan
Documents, and the Lenders hereby irrevocably authorize Bankers Trust as the
Agent to take such action on their behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such upon the
express conditions contained in this Section 8. Notwithstanding any provision
to the contrary elsewhere in this Agreement or in any other Loan Document, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein or in the other Loan Documents, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Agent. The provisions of this Section 8 are solely for the benefit
of the Agent and the Lenders, and, other than in connection with Section 8.9,
the Company shall not have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Lenders and the Lenders
do not assume and shall not be deemed to have assumed any obligation or
relationship of agent or trust with or for the Company.
8.2. Delegation of Duties
The Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care except to the
extent otherwise required by Section 8.3.
8.3. Exculpatory Provisions
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for its or
such Person's own gross negligence or willful misconduct) or (ii) responsible
in any manner to the Lenders for any recitals, statements, representations or
warranties made by the Company or any of their respective officers contained in
this Agreement, any other Loan
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Documents or in any certificate, report, statement or other document referred
to or provided for in, or received by the Agent under or in connection with,
this Agreement or any other Loan Document or for any failure of the Company or
any of its officers to perform their obligations hereunder or thereunder. The
Agent shall not be under any obligation to the Lenders to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or the other Loan Documents, or to inspect
the properties, books or records of the Company or Chancellor. The Agent shall
not be responsible to the Lenders for the effectiveness, genuineness,
validity, enforceability, collectability or sufficiency of this Agreement or
any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or
in any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by the
Agent to the Lenders or by or on behalf of the Company to the Agent or the
Lenders or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of the Bridge Loan
or of the existence or possible existence of any Potential Event of Default or
Event of Default.
8.4. Reliance by Agent
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company or any of its Subsidiaries), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders or such lesser amount as may be designated herein as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action. As between the Agent
and the Lenders, the Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders or such lesser amount as may
be designated herein, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Lenders.
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8.5. Notice of Default
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Event of Default or Event of Default hereunder
unless the Agent has actually received notice from the Lenders, the Company or
Chancellor referring to this Agreement, describing such Potential Event of
Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Lenders. The Agent shall take such action
with respect to such Potential Event of Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that, as between the
Agent and the Lenders unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Potential Event of
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
8.6. Nonreliance on Agent and Other Lenders
The Lenders expressly acknowledges that neither the Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Agent hereinafter taken, including any review of the affairs of the Company
and its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent to the Lenders. Each Lender represents to the Agent that
it has, independently and without reliance upon the Agent, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, assets, operations, property, financial
and other condition, prospects and creditworthiness of the Company and
Chancellor and made its own decision to make the Bridge Loan and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon the Agent, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
condition, prospects and creditworthiness of the Company and Chancellor. The
Agent shall not have any duty or responsibility to provide the Lenders with any
credit or other information concerning the business, operations, assets,
property, financial and other condition, prospects or creditworthiness of the
Company or Chancellor that may come into the possession of the Lenders or any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates.
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8.7. Indemnification
The Lenders agree to indemnify the Agent in its capacity as such
ratably according to their respective "percentages" as used in determining the
Required Lenders at such time, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment in full
of the Obligations) be imposed on, incurred by or asserted against the Agent in
its capacity as such in any way relating to or arising out of this Agreement or
any other Loan Document, or any documents contemplated by or referred to herein
or the transactions contemplated hereby of any action taken or omitted to be
taken by the Agent under or in connection with any of the foregoing, but only
to the extent that any of the foregoing is not paid by the Company; provided
that the Lenders shall not be liable to the Agent for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
gross negligence or willful misconduct of the Agent. If any indemnity
furnished to the Agent for any purpose shall, in the opinion of the Agent be
insufficient or become impaired, the Agent may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this Section 8.7 shall
survive the payment in full of all Obligations.
8.8. Agent in Its Individual Capacity
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Company as though the
Agent were not the Agent hereunder. With respect to the Bridge Loan made by it
as a Lender and all Obligations owing to it as a Lender, the Agent shall have
the same rights and powers under this Agreement as the other Lenders and may
exercise the same as though it were not the Agent and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
8.9. Resignation of the Agent; Successor Agent
The Agent may resign as the Agent upon 20 days' notice to the Lenders
and the Company. Upon the resignation of the Agent, the Required Lenders shall
appoint a successor Agent that is a bank or a trust company for the Lenders
subject to prior approval by the Company (such approval not to be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Agent, and the term "Agent" shall include such
successor agent effective upon its appointment, and the resigning Agent's
rights,
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powers and duties as the Agent shall be terminated, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement. If no successor Agent has been appointed as provided above by
the 20th day after the date such notice of resignation was given by the Agent,
the Agent's resignation shall become effective and the Required Lenders shall
thereafter perform all the duties of the Agent hereunder and/or any other Loan
Documents until such time, if any, as the Lenders appoint a successor Agent as
provided above (and subject to the Company's approval as provided above).
After the resignation of the Agent hereunder, the provisions of this Section 8
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
SECTION 9 MISCELLANEOUS
9.1. Representation of the Lenders
Each Lender hereby represents that it is a commercial lender that
makes loans in the ordinary course of its business and that it will make the
Bridge Loan hereunder for its own account or the account of its affiliates in
the ordinary course of such business.
9.2. Participations in and Assignments or Syndication of the Bridge Loan and
Notes
A. The Lenders shall have the right at any time to participate out, sell,
assign or syndicate all or any portion of the Notes or the Bridge Loan
Commitment in an aggregate amount of not less than $1,000,000 upon the earlier
to occur of December 31, 1997 and the date on which the Evergreen Merger is
terminated, among any Eligible Assignee. In the case of any sale, transfer or
negotiation of all or part of the Notes or the Bridge Loan Commitment
authorized under this Section 9.2A, the assignee, transferee or recipient shall
become a party to this Agreement as a Lender by execution of an assignment and
assumption agreement; provided that (i) at such time Section 2.1A shall be
deemed modified to reflect the Bridge Loan Commitment of such new Lenders and
of any existing Lenders, (ii) upon surrender of the Notes, new Notes will be
issued, at the Company's expense, to such new Lenders and to the assigning
Lenders, such new Notes to be in conformity with the requirements of Section
2.1D (with appropriate modifications) to the extent needed to reflect the
revised Bridge Loan Commitment, and (iii) the Agent shall receive at the time
of each such assignment, from the assigning or assignee Lenders, the payment of
a non-refundable assignment fee of $3,000.00; and provided, further, that such
transfer or assignment will not be effective until recorded by the Agent on the
Register pursuant to Section 5.10. To the extent of any assignment pursuant to
this Section 9.2A, each as-
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signing Lender shall be relieved of its obligations hereunder with respect to
its assigned Bridge Loan Commitment, and the assignee, transferee or recipient
shall have, to the extent of such sale, assignment, transfer or negotiation,
the same rights, benefits and obligations as it would if it were a Lender with
respect to such Notes or Bridge Loan Commitment, including, without limitation,
the right to approve or disapprove actions that, in accordance with the terms
hereof, require the approval of the Lenders. At the time of each assignment
pursuant to this Section 9.2A to an Eligible Assignee that is not already a
Lender hereunder and that is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code) for federal income
tax purposes, the respective Eligible Assignee shall provide to the Company and
the Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Tax Certificate) described in Section 9.19F. Notwithstanding the foregoing, no
Eligible Assignee, which as of the date of any assignment to it pursuant to
Section 9.2A would be entitled to receive any greater payment under Section
9.19 than the assigning Lenders would have been entitled to receive as of such
day under such Section with respect to the rights assigned, shall be entitled
to receive such payments unless the Company has expressly consented in writing
to waive the benefit of this provision at the time of the assignment.
B. The Lenders may grant participations in all or any part of the Notes or the
Bridge Loan Commitment in an aggregate amount of not less than $1,000,000 to a
member of the Syndicate Group or to any Eligible Assignee, as the case may be,
other than to an Eligible Assignee that has, or has an Affiliate that has, a
principal line of business similar to any principal line of business of the
Company. In the event of any such sale by the Lenders of a participating
interest to a participant, each Lender's obligations under this Agreement shall
remain unchanged, such Lenders shall remain solely responsible for the
performance thereof, such Lenders shall remain the holder of the Notes for all
purposes under this Agreement and the other Loan Documents and the Company and
the agent shall continue to deal solely and directly with the Lenders in
connection with each Lender's rights and obligations under this Agreement and
the other Loan Documents. Any agreement pursuant to which any Lender shall
sell any such participating interest shall provide that such Lender shall
retain the sole right and responsibility to exercise such Lender's rights and
enforce the Company's obligations hereunder, including the right to consent to
any amendment, supplement, modification or waiver of any provision of this
Agreement or any of the other Loan Documents, provided that such participation
agreement may provide that such Lender will not agree to any amendment,
supplement, modification or waiver described in clauses (i), (ii) or (iii) of
the first sentence of Section 9.6 without the consent of the participant.
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C. The Company shall, at its own cost and expense, provide such certificates,
acknowledgments and further assurances in respect of this Agreement and the
Bridge Loan as any Lender may reasonably require in connection with any
participation, transfer or assignment pursuant to this Section 9.2.
D. Nothing in this Agreement shall prevent or prohibit the Lenders from
pledging the Bridge Loan and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by the Lenders from such Federal Reserve Bank.
9.3. Expenses
Whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to promptly pay (i) all the actual and
reasonable costs and expenses of preparation of the Loan Documents and all the
costs of furnishing all opinions by counsel for the Company (including without
limitation any opinions requested by the Lenders as to any legal matters
arising hereunder), and of the Company's performance of and compliance with all
agreements and conditions contained herein on its part to be performed or
complied with; (ii) the reasonable fees, expenses and disbursements of counsel
to the Agent in connection with the negotiation, preparation, execution and
administration of the Loan Documents and the Bridge Loan hereunder, and any
amendments, modifications and waivers hereto or thereto and consents to
departures from the terms hereof and thereof; and (iii) after the occurrence of
an Event of Default, all out-of-pocket costs and expenses (including reasonable
attorneys fees and costs of settlement, provided that, unless an impermissible
conflict of interest exists as to the joint representation of the Lenders and
the Agent, the Company shall pay the reasonable fees of only one law firm to
represent both the Lenders and the Agent) incurred by the Lenders or the Agent
in enforcing any Obligations of or in collecting any payments due from the
Company or under the Notes by reason of such Event of Default or in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or of any insolvency or bankruptcy
proceedings.
9.4. Indemnity
In addition to the payment of expenses pursuant to Section 9.3,
whether or not the transactions contemplated hereby shall be consummated, the
Company agrees to indemnify, pay and hold each of the Agent, the Lenders and
any holder of any of the Notes, and each of their respective officers,
directors, partners, employees, agents, representatives and control persons
(collectively called the "Indemnitees"), harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs,
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expenses and disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Indemnitee shall be
designated as a party thereto, provided that, unless an impermissible conflict
of interest exists as to the joint representation of the Indemnitees, the
Company shall pay the reasonable fees of only one law firm to represent all of
the Indemnitees), that may be suffered by, imposed on, incurred by, or asserted
against that Indemnitee, in any manner resulting from, connected with, in
respect of, relating to or arising out of this Agreement, the other Loan
Documents, the Bridge Commitment Letter, the Lenders' agreements to make the
Bridge Loan or the use or intended use of any of the proceeds of the Bridge
Loan hereunder or the Acquisition (the "Indemnified Liabilities"); provided
that the Company shall have no obligation to an Indemnitee hereunder with
respect to Indemnified Liabilities (i) to the extent such liabilities are
finally judicially determined to have resulted from (A) the gross negligence or
willful misconduct of that Indemnitee or (B) the failure of such Indemnitee to
perform its obligations under any Loan Document or (C) such Indemnitee's
violation of law or (ii) in connection with the obligations of any Indemnitee
under any Loan Document or for any transfer fees. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Company shall contribute the maximum portion that it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
9.5. Setoff
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default, the Lenders, the Agent and any
subsequent holder of the Notes is hereby authorized by the Company at any time
or from time to time, without notice to the Company, or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate
and to apply any and all deposits (general or special, including, but not
limited to, Indebtedness evidenced by certificates of deposit, whether matured
or unmatured but not including trust accounts, escrow accounts or any other
accounts held for the benefit of another Person) and any other Indebtedness at
any time held or owing by such Person or any such subsequent holder to or for
the credit or the account of the Company against and on account of the
obligations and liabilities of the Company to such Person or such subsequent
holder under this Agreement and the Notes, including, but not limited to, all
claims of any nature or de-
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scription arising out of or connected with this Agreement or the Notes,
irrespective of whether or not (a) such Person or such subsequent holder shall
have made any demand hereunder or (b) such Person or such subsequent holder
shall have declared the principal of or the interest on its portion of the
Bridge Loan and its Notes and other amounts due hereunder to be due and payable
as permitted by Section 7 and although said obligations and liabilities, or any
of them, may be contingent or unmatured.
9.6. Amendments and Waivers
No amendment, modification, termination or waiver of any term or
provision of this Agreement or the Notes shall in any event be effective
without the prior written concurrence of the Company and the Required Lenders;
provided that, notwithstanding the third sentence of Section 9.15, without the
prior written consent of each Lenders affected, an amendment, modification,
termination or waiver of this Agreement, any Notes, or consent to departure
from a term or provision hereof or thereof may not: (i) reduce the principal
amount of Notes whose holders must consent to any such amendment, modification,
termination, waiver or consent; (ii) reduce the rate of or extend the time for
payment of principal or interest on any Notes; (iii) reduce the principal
amount of any Notes; (iv) make any Notes payable in money other than that
stated in the Notes; (v) make any change in Section 2.4A(iv) or in the
definition of Change of Control or in Section 9.6; (vi) make any change in
Section 2.4(A)(ii); (vii) reduce the rate or extend the time of payment of fees
or other compensation payable to the Lenders hereunder; or (viii) waive
performance by the Company of its obligations under, or consent to any
departure from any of the terms and provisions of, Section 2.4A(iv); and
provided, further, that without the consent of the Agent, no such amendment,
modification, termination or waiver may amend, modify, terminate or waive any
provision of Section 8 as the same applies to the Agent or any other provision
of this Agreement as it relates to the rights or obligations of the Agent. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on the Company
in any case shall entitle the Company to any further notice or demand in
similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 9.6 shall be binding
upon each holder of the Notes at the time outstanding, each further holder of
the Notes and, if signed by the Company, on the Company.
9.7. Independence of Covenants
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not per-
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mitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitation of, another covenant shall
not avoid the occurrence of an Event of Default or Potential Event of Default
if such action is taken or condition exists.
9.8. Entirety
The Loan Documents and the Bridge Commitment Letter together embody
the entire agreement of the parties and supersede all prior agreements and
understandings, if any, relating to the subject matter hereof and thereof.
9.9. Notices
Unless otherwise provided herein, any notice or other communications
herein required or permitted to be given shall be in writing and may be
personally served, telecopied, telexed or sent by mail and shall be deemed to
have been given when delivered in person, upon receipt of telecopy or telex
against receipt of answer back or four Business Days after depositing it in the
mail, registered or certified, with postage prepaid and properly addressed;
provided that notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof
is delivered as provided in the manner provided above in this Section 9.9)
shall be set forth under each party's name on the signature pages hereto.
9.10. Survival of Warranties and Certain Agreements
A. All agreements, representations and warranties made herein shall survive
the execution and delivery of this Agreement and the Bridge Commitment Letter,
the making of the Bridge Loan hereunder and the execution and delivery of the
Notes and, notwithstanding the making of the Bridge Loan, the execution and
delivery of the Notes or any investigation made by or on behalf of any party,
shall continue in full force and effect. The closing of the transactions
herein contemplated shall not prejudice any right of one party against any
other party in respect of anything done or omitted hereunder or in respect of
any right to damages or other remedies.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Company set forth in Sections 9.3, 9.4, 9.14,
9.15, 9.17, 9.19 and 9.21 shall survive the payment of the Bridge Loan and the
Notes or Notes, as the case may be, and the termination of this Agreement.
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9.11. Failure or Indulgence Not Waiver; Remedies Cumulative
To the fullest extent permitted under applicable law, no failure or
delay on the part of the Agent or any holder of any Notes in the exercise of
any power, right or privilege hereunder or under the Notes shall impair such
power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege. To the fullest extent permitted under
applicable law, all rights and remedies existing under this Agreement or the
Notes are cumulative to and not exclusive of any rights or remedies otherwise
available.
9.12. Severability
To the fullest extent permitted under applicable law, in case any
provision in or obligation under this Agreement or the Notes 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.
9.13. Headings
Section and Section 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.
9.14. Applicable Law
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
9.15. Successors and Assigns; Subsequent Holders of Notes
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lenders. The terms and provisions
of this Agreement shall inure to the benefit of any assignee or transferee of
the Notes pursuant to Section 9.2A, and in the event of such transfer or
assignment, the rights and privileges herein conferred upon the Lenders shall
automatically extend to and be vested in such transferee or assignee, all
subject to
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the terms and conditions hereof. Except as provided in Section 9.6, in
determining whether the holders of a sufficient aggregate principal amount of
the Bridge Loan shall have consented to any action under this Agreement, any
amount of the Bridge Loan owned or held by the Company or any of its respective
Affiliates shall be disregarded. The Company's rights or any interest therein
hereunder may not be assigned without the prior express written consent of the
Lenders.
9.16. Counterparts; Effectiveness
This Agreement and any amendments, waivers, consents or supplements
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto, and delivery
thereof to the Agent or, in the case of the Lenders, written telex or facsimile
notice or telephonic notification (confirmed in writing) of such execution and
delivery. The Agent will give the Company and the Lenders prompt notice of the
effectiveness of this Agreement.
9.17. Consent to Jurisdiction; Venue; Waiver of Jury Trial
A. Any legal action or proceeding with respect to this Agreement or the Notes
may be brought in the courts of the State of New York or of the United States
for the Southern District of New York, and, by execution and delivery of this
Agreement, each of the parties to this Agreement hereby irrevocably accepts for
itself and in respect of its respective property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each of the parties
to this Agreement hereby further irrevocably waives any claim that any such
courts lack jurisdiction over such party, and agrees not to plead or claim, in
any legal action or proceeding with respect to this Agreement or the Notes
brought in any of the aforesaid courts, that any such court lacks jurisdiction
over such party. Each of the parties to this Agreement irrevocably consents to
the service of process in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to such party,
at its respective address for notices pursuant to Section 9.9, such service to
become effective 30 days after such mailing. To the extent permitted by law,
each of the parties to this Agreement hereby irrevocably waives any objection
to such service of process and further irrevocably waives and agrees not to
plead or claim in any action or proceeding commenced hereunder or under the
Notes that service of process was in any way invalid or ineffective. Nothing
herein shall affect the right of any party to this Agreement to serve
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process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against any party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably waives any
objection that it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or the Notes brought in the courts referred to in clause A above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby irrevocably waives all right
to a trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement or the Notes or the transactions contemplated
hereby or thereby.
9.18. Payments Pro Rata
A. The Agent agrees that promptly after its receipt of each payment of any
interest or premium on or principal of the Notes from or on behalf of the
Company, it shall, except as otherwise provided in this Agreement, distribute
such payment, where applicable, to the Lenders (other than any Lenders that has
consented in writing to waive its pro rata share of such payment) pro rata
based upon their respective pro rata shares, if any, of such payment.
B. Each Lender agrees that, if it should receive any amount hereunder (whether
by voluntary payment, by realization upon security, by the exercise of the
right of setoff or banker's lien, by counterclaim or cross action, by the
enforcement of any right under the Loan Documents, or otherwise) that is
applicable to the payment of the principal of, or interest on, the Bridge Loan
of a sum that with respect to the related sum or sums received by other Lenders
is in a greater proportion than the total of such Obligation then owed and due
to such Lender bears to the total of such Obligation then owed and due to all
of the Lenders immediately prior to such receipt, then such Lenders receiving
such excess payment shall purchase for cash without recourse or warranty from
the other Lenders an interest in the Obligations of the Company to such Lenders
in such amount as shall result in a proportional participation by all of the
Lenders in such amount; provided that, if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
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9.19. Taxes
A. Any and all payments by the Company hereunder or under any of the other
Loan Documents shall be made free and clear of and without deduction or
withholding for any and all present or future Taxes, unless such Taxes are
required by law or the administration thereof to be deducted or withheld and
excluding (i) in the case of each of the Lenders and the Agent, Taxes imposed
on its income, and franchise or similar taxes imposed on it, by (a) any
jurisdiction (or political subdivision thereof) of which the Agent or the
Lenders, as the case may be, is a citizen or resident or in which the Lenders
has a permanent establishment (or is otherwise engaged in the active conduct of
its banking businesses through an office or branch) serving as the Lenders'
applicable lending office, or (b) the jurisdiction (or any subdivision thereof)
in which the Agent or Lenders is organized or (c) any jurisdiction (or
political subdivision thereof) in which the Agent or Lenders is doing business,
which Taxes are imposed solely as a result of doing business in such
jurisdiction, other than a jurisdiction in which a Lender or the Agent is doing
business, as a result of a result of a connection arising solely from the
activities of the Lender or Agent relating to this Agreement, (ii) in the case
of the Lenders and the Agent, any Taxes that are in effect and that would apply
to a payment to such Person, as applicable, as of the Closing Date, and (iii)
if any Person acquires any interest in this Agreement (a "Transferee"), any
Taxes to the extent that they are in effect and would apply to a payment to
such Transferee as of the date of the acquisition of such interest, as the case
may be (all such nonexcluded Taxes being hereinafter referred to as "Covered
Taxes"). If the Company shall be required by Law or the administration thereof
to deduct or withhold any Covered Taxes from or in respect of any sum payable
hereunder or under any other Loan Document, (a) unless such requirement results
from the failure of the payee to perform its obligations under Section 9.19F,
the sum payable shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or withholdings
applicable to additional amounts paid under this paragraph), the Lenders
receives an amount equal to the sum it would have received if no such deduction
or withholding had been made; (b) the Company shall make such deductions or
withholdings; and (c) the Company forthwith shall pay the full amount deducted
or withheld to the relevant taxation or other authority in accordance with
applicable Law.
B. The Company agrees to pay forthwith any present or future stamp documentary
taxes or any other excise or property taxes, charges or similar levies (all
such taxes, charges and levies being herein referred to as "Other Taxes")
imposed by any jurisdiction (or any political subdivision or taxing authority
thereof or therein) that arise from any payment made by the
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Company hereunder or under any of the other Loan Documents or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or the other Loan Documents.
C. The Company agrees to indemnify the Agent and the Lenders for the full
amount of Covered Taxes or Other Taxes not deducted or withheld and paid by the
Company in accordance with Sections 9.19A and 9.19B to the relevant taxation
or other authority and any Taxes other than Covered Taxes or Other Taxes
imposed by any jurisdiction on amounts payable by the Company under this
Section 9.19 paid by the Lenders or the Agent and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not any such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days from
the date the Agent or the Lenders makes written demand therefor. A certificate
as to the amount of such Taxes or Other Taxes and evidence of payment thereof
submitted to the Company shall be prima facie evidence, absent manifest error,
of the amount due from the Company to the Lenders or such Lenders.
D. The Company shall furnish to the Agent and the Lenders the original or a
certified copy of a receipt evidencing any payment of Taxes or Other Taxes made
by the Company as soon as such receipt becomes available.
E. Any Lender claiming any additional amounts payable pursuant to this Section
9.19 shall use reasonable efforts (consistent with legal and regulatory
restrictions) to file any certificate or document requested by the Company or
the Agent, to change the jurisdiction of its applicable lending office or to
contest any tax imposed if the making of such a filing or change or contesting
such tax would avoid the need for or reduce the amount of any additional
amounts that may thereafter accrue and would not, in the sole determination of
such Lenders, be otherwise disadvantageous to such Lenders.
F. Each Lender that is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) agrees to deliver to the
Company and the Agent, on the date of this Agreement or, with respect to any
Lender that becomes an assignee or transferee of an interest under this
Agreement pursuant to Section 9.2A, on the date of such assignment or transfer
to such Lender, (i) two accurate and complete original signed copies of
Internal Revenue Service Form 4224 or Form 1001 (or successor forms) certifying
to such Lender's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Notes, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Internal Revenue Code and cannot deliver either
Internal Revenue Serv-
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ice Form 1001 or Form 4224 pursuant to clause (i) above, two accurate and
complete original signed copies of Internal Revenue Service Form W-8 (or
successor form) certifying to such Lender's entitlement to a complete exemption
from United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Notes and a certificate (the "Tax
Certificate") to the effect that (i) such Lender is not a "bank" for purposes
of Section 881(c)(3)(A) of the Code, (ii) such Lender is not a "10-percent
shareholder" with respect to the Company for purposes of Section 881(c)(3)(B)
of the Code, and (iii) such Lender is not a "controlled foreign corporation"
with respect to which the Company is a "related person" for purposes of Section
881(c)(3)(C) of the Code. In addition, the Lenders agree that, when a lapse in
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect (or in the case of a change in law resulting
in such obsolesce or inaccuracy, upon the request of the Company), it will
deliver to the Company and the Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or Form 1001, or Form W-8
or Tax Certificate, as the case may be, and such other or successor forms or
certifications as may be required in order to confirm or establish the
entitlement of the Lenders to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Notes, or it shall immediately notify the Company and the Agent of its
inability to deliver any such Form or Certificate. Subject to Section 9.2A and
the immediately succeeding sentence, the Company shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder or made on any other Loan Document for the account of any Lenders
that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) for U.S. Federal income tax purposes
to the extent that the Lenders has not provided to the Company U.S. Internal
Revenue Service Forms that establish a complete exemption from such deduction
or withholding. Notwithstanding anything to the contrary contained in the
preceding sentence or elsewhere in this Section 9.19F and except as set forth
in Section 9.2A, the Company agrees to pay additional amounts and to indemnify
and hold harmless the Lenders (without regard to the identity of the
jurisdiction requiring the deduction or withholding), and reimburse the Lenders
upon its written request, in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the date of this Agreement or any assignment or transfer in any
applicable law, treaty, governmental rule, regulation, guideline or order, or
in the interpretation thereof, relating to the deducting or withholding of
income or similar Taxes.
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G. The provisions of this Section 9.19 shall survive for twelve (12) months
after the termination of the Agreement and repayment of all Obligations.
9.20. Waiver of Stay, Extension or Usury Laws
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury law
or other law that would prohibit or forgive it from paying all or any portion
of the principal of or interest on the Bridge Loan as contemplated herein,
wherever enacted, now or at any time hereafter in force, or that may affect the
covenants or the performance of this Agreement; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Agent, but will suffer and permit
the execution of every such power as though no such law had been enacted.
9.21. Confidentiality
The Lenders shall hold all nonpublic information obtained pursuant to
the requirements of or in connection with this Agreement that has been
identified as confidential by the Company or Chancellor in accordance with the
Lenders' customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices, it being
understood and agreed by Chancellor and the Company that (i) in any event the
Lenders may make disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by the Lenders of the Bridge Loan or any participation therein
(provided that such bona fide assignee, transferee or participant agrees in
writing to be bound by the terms of a confidentiality agreement substantially
similar to the provisions of this Section 9.21) or as required or requested by
any governmental agency or representative thereof or pursuant to legal process;
provided that unless specifically prohibited by applicable law or court order,
the Lenders shall notify the Company of any request by any governmental agency
or representative thereof (other than any such request in connection with any
examination of the financial condition of the Lenders by such governmental
agency) for disclosure of any such nonpublic information prior to disclosure of
such information and (ii) the Lenders may share with any of their Affiliates,
and such affiliates may share with the Lenders, any information related to the
Company, Chancellor or the Company's or Chancellor's respective Affiliates
(including information relating to creditworthiness), the Acquisition or the
financing therefor; and provided, further, that in no event shall the Lenders
be obli-
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gated or required to return any materials furnished by the Company or
Chancellor. In connection with any sales, assignments or transfers referred to
in Section 9.2A, the Lenders shall obtain agreements from the purchasers,
assignees or transferees, as the case may be, reasonably satisfactory to the
Company, that such parties will comply with this Section 9.21.
9.22. Judgment Currency
The Company agrees to indemnify the Agent and the Lenders against any
loss incurred by any of them as a result of any judgment or order being given
or made for any amount due under this Agreement or any other Loan Document and
such judgment or order being expressed and paid in a currency (the "Judgment
Currency") other than United States dollars and as a result of any variation as
between (i) the rate of exchange at which the United States dollar amount is
converted into the Judgment Currency for the purpose of such judgment or order
and (ii) the spot rate of exchange in the City of New York at which any such
person on the date of payment of such judgment or order is able to purchase
United States dollars with the amount of the Judgment Currency actually
received by such person. The foregoing indemnity shall continue in full force
and effect notwithstanding any such judgment or order as aforesaid. The term
"spot rate of exchange" shall include any premiums and costs of exchange
payable in connection with the purchase of, or conversion into, United States
dollars.
9.23. Replacement of Lenders Under Certain Circumstances.
If at time (a) the Borrower becomes obligated to pay additional
amounts described in Section 9.19 as a result of any condition described in
such section, (b) any Lender becomes insolvent and its assets become subject to
a receiver, liquidator, trustee, custodian or other Person having similar
powers or (c) any Lender becomes a Defaulting Lender, then the Borrower may, on
ten (10) Business Days' prior notice to the Agent and such Lender, replace such
Lender by causing such Lender to (and such Lender shall) assign pursuant to
Section 9.2 all of its rights and obligations under this Agreement to a Lender
or other entity selected by the Borrower and acceptable to the Agent for a
purchase price equal to the outstanding principal amount of such Lender's
Bridge Loans and all accrued interest and fees and other amounts payable
hereunder (including amounts payable under Section 9.4 as though such Bridge
Loans were being paid instead of purchased); provided that (i) the Borrower
shall have no right to replace the Agent, (ii) neither the Agent nor any Lender
shall have any obligation to the Borrower to find a replacement Lender or other
such entity, (iii) in the event of a replacement of a Lender to which the
Borrower becomes obligated to pay additional amounts pursuant to clause (a) of
this Section 9.23, in order for the Borrower to be enti-
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tled to replace such a Lender, such replacement must take place no later than
one-hundred eighty (180) days after the Lender shall have demanded payment of
additional amounts under one of the sections described in clause (a) of this
Section 9.23, as the case may be, and (iv) in no event shall the Lender hereby
replaced be required to pay or surrender to such replacement Lender or other
entity any of the fees received by such Lender hereby replaced pursuant to this
Agreement. In the case of a replacement of a Lender to which the Borrower
becomes obligated to pay additional amounts pursuant to clause (a) of this
Section 9.23, the Borrower shall pay such additional amounts to such Lender
prior to such Lender being replaced and the payment of such additional amounts
shall be a condition to the replacement of such Lender. The Borrower's right
to replace a Defaulting Lender pursuant to this Section 9.23 is, and shall be,
in addition to, and not in lieu of, all other rights and remedies available to
the Borrower against such Defaulting Lender under this Agreement, at law, in
equity or by statute.
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WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
BORROWER:
CHANCELLOR BROADCASTING COMPANY
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
Title:
Notice Address:
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: CEO
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not
constitute notice) to:
Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
100
AGENT:
BANKERS TRUST NEW YORK CORPORATION,
as agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Notice Address:
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Telephone: (212)
Telecopy: (212)
101
LENDERS:
Commitment: $70,000,000 BANKERS TRUST NEW YORK CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
Commitment: $25,000,000 BANQUE PARIBAS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Group Vice President
Commitment: $25,000,000 NATIONSBANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Commitment: $25,000,000 TORONTO DOMINION (TEXAS), INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Commitment: $25,000,000 ▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Authorized Signatory
102
CHANCELLOR BROADCASTING COMPANY
SCHEDULES AND EXHIBITS
TO
SENIOR CREDIT AGREEMENT
103
SCHEDULE A
EXISTING LIENS
104
SCHEDULE B
INVESTMENTS
105
SCHEDULE C
INTELLECTUAL PROPERTY
106
SCHEDULE D
ENVIRONMENTAL MATTERS
107
SCHEDULE E
PERMITS
108
SCHEDULE F
EXISTING INDEBTEDNESS
109
EXHIBIT I
[FORM OF BRIDGE NOTE]
CHANCELLOR BROADCASTING COMPANY
SENIOR PROMISSORY NOTE
New York, New York
[Date]
$___________
FOR VALUE RECEIVED, Chancellor Broadcasting Company, a corporation for
med under the laws of the State of Delaware (the "Borrower"), promises to pay to
the order of ("Payee"), on the earlier of (i) the consummation of
the Evergreen Merger and (ii) July 2, 1999, Dollars ($ ).
The Borrower also promises to pay interest on the unpaid principal
amount hereof from the date hereof until paid in full at the rates and at the
times that shall be determined in accordance with the provisions of the Senior
Credit Agreement dated as of June 26, 1997, as the same may at any time be
amended, modified or supplemented and in effect (the "Credit Agreement") among
the Borrower, the Lenders named therein and Bankers Trust New York Corporation,
as Agent.
This Note is issued pursuant to and entitled to the benefits of the
Credit Agreement to which reference is hereby made for a more complete statement
of the terms and conditions under which the Bridge Loan evidenced hereby was
made and is to be repaid. Capitalized terms used herein without definition
shall have the meanings set forth in the Credit Agreement.
All payments of principal and interest in respect of this Note shall
be made in lawful money of the United States of America in same day funds to
Payee at the office of Bankers Trust New York Corporation located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be designated
in writing for such purposes in accordance with the terms of the Credit
Agreement. Each of Payee and any subsequent holder of this Note agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made here-
110
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under and of the date to which interest hereon has been paid; provided,
however, that the failure to make a notation of any payment made on this Note
shall not limit or otherwise affect the obligation of the Borrower hereunder
with respect to payments of principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
that is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Notes.
This Note is subject to mandatory prepayment as provided in
subsection 2.4A(ii) of the Credit Agreement and prepayment at the option of the
Borrower as provided in subsection 2.4A(i) of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note, together with all accrued and unpaid interest
thereon, may become, or may be declared to be, due and payable in the manner,
upon the conditions and with the effect provided for in the Credit Agreement.
The terms of this Note are subject to amendment only in the manner
provided for in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this
Note or the Credit Agreement shall alter or impair the obligation of the
Borrower, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times and in the currency
herein prescribed.
The Borrower promises to pay all out-of-pocket costs and expenses,
including reasonable attorneys' fees, all as provided in Section 9.3(iii) of the
Credit Agreement, incurred in the collection and enforcement of this Note. The
Borrower and endorsers of this Notes hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent permitted by
law, the right to plead any statute of limitations as a defense to any demand
hereunder.
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IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
and delivered by its duly authorized officer, as of the day and year and at
the place first above written.
CHANCELLOR BROADCASTING COMPANY
By:
-------------------------------------
Name:
Title:
112
TRANSACTIONS ON NOTE
Amount of Outstanding
Principal Principal
Paid Balance Notation
Date This Date This Date Made By
---- --------- ----------- -------
113
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have this Bridge Note purchased by the
Borrower pursuant to Section 2.4A(iv) of the Credit Agreement (which relates to
a Change of Control), check the box: [ ]
If you wish to elect to have only part of this Bridge Note purchased
by the Borrower pursuant to Section 2.4A(iv) of the Credit Agreement, state the
amount: $[ ]
Date: Your Signature:
-------- -----------------------------------------------
(Sign exactly as your name appears on the
other side of this Notes)
Signature Guarantee:
-----------------------------------------------------------
114
EXHIBIT II
FORM OF COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY ON BEHALF OF CHANCELLOR BROADCASTING COMPANY
(AND NOT INDIVIDUALLY) THAT:
(i) We are the duly elected [Title] and [Title] of Chancellor
Broadcasting Company, a corporation formed under the laws of the State of
Delaware (the "Borrower");
(ii) We have reviewed the terms of the Senior Credit Agreement
dated as of , 1997, by and among the Borrower, the Lenders named
therein and Bankers Trust New York Corporation, as Agent (the "Credit
Agreement"), and the terms of the Notes, and we have made, or have caused to be
made, under our supervision, a review in reasonable detail of the transactions
and condition of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements; and
(iii) We have no knowledge of the existence of any condition or
event that would suggest the failure of the Borrower's full and timely
performance of all covenants contained in Sections 6.1, 6.2, 6.3, 6.4, 6.5, 6.8
and 6.11 of the Credit Agreement during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Compliance Certificate, except as set forth below.
Described in a separate attachment to this Compliance Certificate are
the exceptions, if any, to paragraph (iii), listing, in detail, the nature of
the condition or event, the period during which it has existed and the action
that the Borrower has taken, is taking, or proposes to take with respect to
each such condition or event.
The foregoing certifications together with the attached [TO BE
PREPARED BY THE BORROWER] financial statements delivered with this Compliance
Certificate in support hereof, are made and delivered this [ ] day of
[ ], [ ], pursuant to Section 5.1(iii) of the Credit Agreement.
Capitalized terms used
115
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herein shall have the meanings set forth in the Credit Agreement.
CHANCELLOR BROADCASTING COMPANY
By:
--------------------------------------
Name:
Title:
By:
--------------------------------------
Name:
Title:
116
EXHIBIT III
FORM OF NOTICE OF BORROWING
Bankers Trust New York Corporation
as Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
Ladies and Gentlemen:
The undersigned, Chancellor Broadcasting Company (the "Borrower"),
refers to the Senior Credit Agreement dated as of June 26, 1997, as amended,
supplemented or restated from time to time (the "Credit Agreement," the terms
defined therein being used herein as therein defined) by and among the Borrower,
the Lenders named therein and Bankers Trust New York Corporation, as Agent, and
hereby gives you notice pursuant to Section 2.1B of the Credit Agreement that
the Borrower wishes to borrow under Section 2.1 of the Credit Agreement and, in
that connection, sets forth below the information relating to such borrowing
(the "Proposed Borrowing") as required by Section 2.1B of the Credit Agreement:
(i) The date of the Proposed Borrowing, being a Business Day, is
, 1997.
(ii) The aggregate amount of the Proposed Borrowing is
$170,000,000.
Yours truly,
CHANCELLOR BROADCASTING COMPANY
By:
-------------------------------------------
Name:
Title:
117
EXHIBIT IV
FORM OF OPINION OF
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
118
[Form of Opinion of Weil, Gotshal & ▇▇▇▇▇▇ LLP]
, 1997
Bankers Trust New York Corporation, Agent
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
And the Lenders under the
Credit Agreement referred to below
Re: Senior Credit Agreement
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 3.1(A)(7) of the
Credit Agreement (as hereinafter defined). We have acted as counsel to
Chancellor Broadcasting Company, a corporation formed under the laws of the
State of Delaware (the "Borrower"), in connection with the Senior Credit
Agreement, dated as of , 1997 (the "Credit Agreement"), by and
among the Borrower, the Lenders signatory thereto and Bankers Trust New York
Corporation, as Agent for the Lenders (in such capacity, the "Agent"). Unless
otherwise indicated, capitalized terms used and not otherwise defined herein
have the meanings set forth in the Credit Agreement.
We have reviewed the following documents (with such documents herein
collectively referred to as the "Loan Documents"): (a) an executed copy of the
Credit Agreement and the exhibits and schedules thereto and (b) the executed
Notes. In rendering the opinion set forth herein, we have assumed, with your
permission and without verification, (i) the due authorization, execution and
delivery of the Loan Documents by all parties to such Loan Documents other than
the Borrower and that each such Document is valid, binding and enforceable
against the parties thereto other than the Borrower, (ii) the legal capacity of
natural persons, (iii) the genuineness of all signatures, (iv) the authenticity
of all documents submitted to us as originals and (v) the conformity to original
documents of all documents submitted to us as copies. As to various questions
of fact material to our opinion, we have relied upon the representations made in
the Loan Documents and upon certificates of officers of the Borrower.
119
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In addition, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such corporate records, agreements,
documents or other instruments, as applicable, and of certificates or comparable
documents or instruments of public officials and other instruments and documents
and such examination of federal law, the law of the State of New York and the
Delaware General Corporation Law as we have deemed relevant and necessary to
form the basis for the opinions hereinafter set forth.
We express no opinion on any matters under the law of any jurisdiction
other than the federal law of the United States of America, the law of the State
of New York and the Delaware General Corporation Law.
Based upon the foregoing, and subject to the further qualifications,
limitations, exceptions and assumptions herein set forth, we are of the opinion
that:
1. The Borrower (i) is a duly incorporated and validly existing
corporation formed under the laws of the State of Delaware, and (ii) has the
corporate power to conduct its business as now conducted and to own, or hold
under lease, its assets and to enter into each of the Loan Documents and to
perform its obligations thereunder.
2. The execution, delivery and performance (in accordance with the
terms thereof) by the Borrower of each of the Loan Documents to which it is a
party has been duly authorized by all necessary corporate action of the
Borrower.
3. Each of the Loan Documents to which the Borrower is a party has
been duly executed and delivered by the Borrower and constitutes the legally
valid and binding obligation of the Borrower, and each of the Loan Documents is
enforceable against the Borrower in accordance with its terms.
4. The execution and delivery of the Loan Documents to which the
Borrower is a party by the Borrower, the making of the Bridge Loan evidenced by
the Notes and the application of the proceeds therefrom as provided in the
Credit Agreement, and the performance by the Borrower of its obligations under
the Loan Documents to which it is a party, do not: (a) violate any statute,
rule or regulation applicable to the Borrower under the laws of the State of New
York or the federal laws of the United States (including, without limitation,
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System); (b) contravene or violate the charter or articles and
120
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memorandum of association of the Borrower; (c) conflict with or result in the
breach of or a default under any of the Borrower's material contracts or court
orders to which the Borrower is subject or by which it or any of its properties
are bound; or (d) to our knowledge, result in or require the creation or
imposition of a Lien upon or with respect to any of the properties of the
Borrower, except, in the case of (a), (b), (c) or (d) above, where such
violation, conflict, default or creation or imposition of any Lien would not
have, individually or in the aggregate, a Material Adverse Effect.
5. The Borrower is not an "investment company" or a company
"controlled by" an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
6. To our knowledge, no consent, authorization, order, registration
approval, action by, or filing with, any governmental or public body pursuant
to the laws of the State of New York, the Delaware General Corporation Law, or
the federal laws of the United States is required to be obtained or made by the
Borrower in connection with the making of the Bridge Loan except for (i) such
consents, authorizations, approvals, orders, registrations or filings as have
been made or obtained on or prior to the date hereof, or as permitted to be
made or obtained after the date hereof pursuant to the Credit Agreement and
(ii) such consents, authorizations, approvals, orders, registrations or filings
as could not reasonably be expected, either individually or in the aggregate,
to have a Material Adverse Effect.
7. It is not necessary in connection with the execution and delivery
of the Notes to register the Notes under the Securities Act of 1933, as amended
(the "Act"), or to qualify an indenture with respect thereto under the Trust
Indenture Act of 1939, as amended.
8. To our knowledge, there is no action, suit, investigation,
litigation or proceeding affecting the Borrower or any of its Subsidiaries or
any of their respective properties or assets pending or threatened before any
court, governmental agency or arbitrator not disclosed in such officer's
certificate (a) that can reasonably be expected to have a Material Adverse
Effect, or (b) that seeks to restrain, enjoin, prevent the consummation of or
otherwise challenge the Acquisition, any of the Loan Documents or the other
transactions contemplated thereby.
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Our opinions set forth above are subject in all respects to the
following qualifications, limitations, exceptions and assumptions.
(a) The opinions set forth above are subject, as to enforceability,
to the effect of (i) any applicable bankruptcy (including, without limitation,
preference and fraudulent conveyance), insolvency, reorganization, moratorium
or similar laws affecting creditor's right generally, and (ii) general
principles of equity (regardless of whether considered in proceedings in equity
or at law), including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing, and the possible unavailability of
specific performance or injunctive relief.
(b) We express no opinion with respect to the following provisions to
the extent that the same are contained in the Loan Documents: (i) provisions
purporting to waive rights to notices, objections, demands, legal defenses,
statutes of limitations, rights to trial by jury, or other benefits or rights
that cannot be waived under applicable law; (ii) provisions purporting to
affect the jurisdiction or venue of courts; (iii) provisions releasing,
exculpating or exempting a party from, or requiring indemnification of a party
for, liability for its own action or inaction, to the extent that the same are
inconsistent with public policy; and (iv) provisions that decisions by a party
are conclusive.
(c) As to matters with respect to which our opinions are stated to be
"to our knowledge" or words of similar effect, we have not undertaken any
independent examination of facts, but have based our opinion in reliance upon
certificates provided to us by officers of the Borrower and upon matters of
which the attorneys in our Firm who have devoted time to this matter have
actual current knowledge.
(d) We have not been called upon to, and accordingly do not, express
any opinion as to the various state and federal laws regulating banks or the
conduct of their business that may relate to the Loan Documents or the
transaction contemplated thereby. Without limiting the generality of the
foregoing, we express no opinion as to the effect of the law of any
jurisdiction other than the State of New York wherein any Lenders may be
located or where an enforcement of the Loan Documents may be sought that limits
the rates of interest legally chargeable or collectible.
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(e) The opinions expressed herein are as of the date hereof only, and
we assume no obligation to update or supplement such opinions to reflect any
fact or circumstance that may hereafter come to our attention or any change in
law that hereafter occur or become effective.
This opinion is being delivered upon the express instructions of the
Borrower to the Agent and the Lenders, and is solely for their benefit in
connection with the above transactions. This opinion may not be relied upon
for any other purpose, or relied upon by any other person, firm or corporation
for any purpose, without our prior written consent. Notwithstanding the
immediately preceding sentence, this opinion may be relied upon by any assignee
of all or a portion of the Bridge Loan as if it were addressed and had been
delivered to them on the date hereof. The Agent and the Lenders may provide a
copy of this opinion, for informational purposes only, to bank examiners and
other regulatory authorities should they so request, or to their respective
independent auditors and attorneys, or pursuant to order or legal process of
any court or governmental agency.
Very truly yours,
123
EXHIBIT V
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
124
EXHIBIT VI
CHANCELLOR BROADCASTING COMPANY
OFFICERS' CERTIFICATE
, 1997
BANKERS TRUST NEW YORK CORPORATION
One Bankers Trust Plaza
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Referring to Sections 3.1(H) and 3.1(L) of the Senior Credit Agreement
dated as of , 1997 (the "Credit Agreement"), by and among Chancellor
Broadcasting Company (the "Borrower"), the Lenders named therein and Bankers
Trust New York Corporation, as Agent, the undersigned duly elected, qualified
and acting officers of the Borrower certify on behalf of the Borrower (and not
individually) that:
(i) the representations and warranties in Section 4 of the Credit
Agreement are true, correct and complete in all material respects on and as of
the date hereof to the same extent as though made on and as of this date except
for those representations and warranties which relate to a specific date, which
shall be true, correct and complete as of such date;
(ii) the Borrower and its Subsidiaries have performed and complied
in all material respects with all covenants and conditions contained in the
Credit Agreement to be performed and observed by the Borrower or its
Subsidiaries on or prior to the date hereof;
(iii) all conditions to the consummation of the Acquisition and the
Bank Financing set forth in the Acquisition Agreement and the Bank Financing
Documents, as the case may be, have been satisfied substantially on the terms
set forth therein and have not been waived or amended without the Agent's prior
written consent; and
125
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(iv) there is not pending or, to my knowledge and the knowledge
of the Borrower, threatened any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or its
Subsidiaries or any property or asset of the Borrower or its Subsidiaries that
is likely to result in a Material Adverse Effect, that has not been disclosed
by the Borrower in writing to the Agent.
All capitalized terms not so defined herein have the meanings ascribed
to them in the Credit Agreement.
126
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The undersigned have read all conditions, and all definitions and
provisions relating to such conditions, contained in the Credit Agreement, and
have made or have caused to be made such examinations or investigations
necessary to enable the undersigned to express the foregoing opinions.
Very truly yours,
CHANCELLOR BROADCASTING COMPANY
By: ------------------------------------------
Name:
Title:
By: ------------------------------------------
Name:
Title:
127
EXHIBIT VII
CERTIFICATE OF SECRETARY
OF
CHANCELLOR BROADCASTING COMPANY
I, , Secretary of Chancellor
Broadcasting Company, a corporation formed under the laws of the State of
Delaware (the "Company"), do hereby certify, on behalf of the Company and on
behalf of Chancellor Radio Broadcasting, Inc. ("Chancellor"), (and not
individually) that:
1. Attached hereto as Annex A is a true, complete and correct
copy of the Company's Certificate of Incorporation, and all amendments thereto,
which is in full force and effect as of the date hereof, and no proceedings
have been taken to amend, supplement, surrender or cancel the same as of the
date hereof.
2. Attached hereto as Annex B is a true, complete and correct
copy of Chancellor's Certificate of Incorporation, and all amendments thereto,
which is in full force and effect as of the date hereof, and no proceedings
have been taken to amend, supplement, surrender or cancel the same as of the
date hereof.
3. Attached hereto as Annex C is a true, complete and correct
copy of the Company's Bylaws as in effect on the date hereof.
4. Attached hereto as Annex D is a true, complete and correct
copy of Chancellor's Bylaws as in effect on the date hereof.
5. Attached hereto as Annex E are full, true and correct copies
of resolutions duly adopted by the Board of Directors of the Company on
[ ], 1997. Such resolutions are all of the resolutions adopted by the
Company that relate to the Transactions (as defined in the Senior Credit
Agreement (the "Credit Agreement"), dated as of , 1997, by and among the
Borrower, the Lenders named therein and Bankers Trust New York Corporation, as
Agent), and such resolutions have not been modified or rescinded since their
adoption and are in full force and effect as of the date hereof.
6. There are no proceedings pending, or, to the best of the
knowledge of the undersigned, threatened or contem-
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plated, for the merger, liquidation, dissolution or sale of all or
substantially all of the assets of the Company or any Subsidiary, or that would
otherwise threaten the Company's corporate existence other than as described in
the Credit Agreement.
7. Each person who, as a director or officer of the Company or
any Subsidiary, executed and delivered the Credit Agreement, the Notes and each
other document or instrument executed in connection therewith, was duly elected
or appointed, qualified and acting as such director or officer at the
respective times of such signing and delivery and the signatures of such
persons appearing on such documents are their genuine signatures.
Dated: , 1997 By:
------------------------------------------
Name:
Title: Secretary
I, , Vice President of the Company, do
hereby certify on behalf of the Company (and not individually) that
is the duly elected, qualified and acting Secretary of the Company and that the
signature of set forth above is his genuine signature.
Dated: , 1997 By:
------------------------------------------
Name:
Title: Vice President