EXHIBIT 10.1
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CREDIT AGREEMENT
Dated as of June 25, 2002
among
RADIO UNICA CORP.
and
THE ENTITIES LISTED ON ANNEX 1 HERETO,
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT...............................................................................2
1.1 CREDIT FACILITIES...............................................................................2
1.2 LETTERS OF CREDIT...............................................................................3
1.3 PREPAYMENTS.....................................................................................3
1.4 USE OF PROCEEDS.................................................................................5
1.5 INTEREST AND APPLICABLE MARGINS.................................................................6
1.6 [Intentionally Reserved.].......................................................................7
1.7 [Intentionally Reserved.].......................................................................7
1.8 CASH MANAGEMENT SYSTEMS.........................................................................7
1.9 FEES............................................................................................7
1.10 RECEIPT OF PAYMENTS.............................................................................8
1.11 APPLICATION AND ALLOCATION OF PAYMENTS..........................................................8
1.12 LOAN ACCOUNT AND ACCOUNTING.....................................................................9
1.13 INDEMNITY......................................................................................10
1.14 ACCESS.........................................................................................11
1.15 TAXES..........................................................................................11
1.16 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY..................................................12
1.17 SINGLE LOAN....................................................................................14
2. CONDITIONS PRECEDENT....................................................................................14
2.1 CONDITIONS TO THE INITIAL LOANS................................................................14
2.2 FURTHER CONDITIONS TO EACH LOAN................................................................15
3. REPRESENTATIONS AND WARRANTIES..........................................................................15
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.......................................................16
3.2 EXECUTIVE OFFICES, COLLATERAL LOCATIONS, FEIN..................................................16
3.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS........................................16
3.4 FINANCIAL STATEMENTS AND PROJECTIONS...........................................................17
3.5 MATERIAL ADVERSE EFFECT........................................................................18
3.6 OWNERSHIP OF PROPERTY; LIENS...................................................................18
3.7 LABOR MATTERS..................................................................................19
3.8 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK; INDEBTEDNESS........................19
3.9 GOVERNMENT REGULATION..........................................................................19
3.10 MARGIN REGULATIONS.............................................................................20
3.11 TAXES..........................................................................................20
3.12 ERISA..........................................................................................21
3.13 NO LITIGATION..................................................................................21
3.14 BROKERS........................................................................................22
3.15 INTELLECTUAL PROPERTY..........................................................................22
3.16 FULL DISCLOSURE................................................................................22
3.17 ENVIRONMENTAL MATTERS..........................................................................22
3.18 INSURANCE......................................................................................23
3.19 DEPOSIT AND DISBURSEMENT ACCOUNTS..............................................................23
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3.20 GOVERNMENT CONTRACTS...........................................................................24
3.21 NETWORK AFFILIATES.............................................................................24
3.22 AGREEMENTS AND OTHER DOCUMENTS.................................................................24
3.23 SOLVENCY.......................................................................................24
3.24 STATUS OF PARENT...............................................................................24
3.25 SECURITY INTERESTS.............................................................................25
3.26 RUC DISCOUNT NOTES.............................................................................25
3.27 FCC MATTERS/BROADCASTING BUSINESS..............................................................25
4. FINANCIAL STATEMENTS AND INFORMATION....................................................................26
4.1 REPORTS AND NOTICES............................................................................26
4.2 COMMUNICATION WITH ACCOUNTANTS.................................................................26
5. AFFIRMATIVE COVENANTS...................................................................................27
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS...............................................27
5.2 PAYMENT OF CHARGES.............................................................................27
5.3 BOOKS AND RECORDS..............................................................................28
5.4 INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL..............................................28
5.5 COMPLIANCE WITH LAWS...........................................................................30
5.6 SUPPLEMENTAL DISCLOSURE........................................................................30
5.7 INTELLECTUAL PROPERTY..........................................................................30
5.8 ENVIRONMENTAL MATTERS..........................................................................30
5.9 LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS, BAILEE LETTERS AND REAL ESTATE PURCHASES..........31
5.10 [Intentionally Reserved.]......................................................................32
5.11 FURTHER ASSURANCES.............................................................................32
5.12 FCC REPORTS AND COMMUNICATIONS.................................................................32
5.13 OPERATING AGREEMENTS...........................................................................32
6. NEGATIVE COVENANTS......................................................................................32
6.1 MERGERS, SUBSIDIARIES, ETC.....................................................................32
6.2 INVESTMENTS; LOANS AND ADVANCES................................................................35
6.3 INDEBTEDNESS...................................................................................36
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS......................................................37
6.5 CAPITAL STRUCTURE AND BUSINESS.................................................................37
6.6 GUARANTEED INDEBTEDNESS........................................................................38
6.7 LIENS..........................................................................................38
6.8 SALE OF STOCK AND ASSETS.......................................................................38
6.9 ERISA..........................................................................................39
6.10 FINANCIAL COVENANTS............................................................................39
6.11 HAZARDOUS MATERIALS............................................................................39
6.12 SALE-LEASEBACKS................................................................................39
6.13 CANCELLATION OF INDEBTEDNESS...................................................................39
6.14 RESTRICTED PAYMENTS............................................................................39
6.15 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR....................................39
6.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS........................................................40
6.17 NO SPECULATIVE TRANSACTIONS....................................................................40
6.18 LEASES; REAL ESTATE PURCHASES..................................................................40
6.19 CHANGES RELATING TO SUBORDINATED DEBT; MATERIAL CONTRACTS......................................40
6.20 CREDIT PARTIES OTHER THAN BORROWERS............................................................41
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6.21 LICENSE SUBS...................................................................................41
6.22 LIMITATION ON SALE OR DISCOUNT OF RECEIVABLES..................................................41
7. TERM 42
7.1 TERMINATION....................................................................................42
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING ARRANGEMENTS.............................42
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES..................................................................42
8.1 EVENTS OF DEFAULT..............................................................................42
8.2 REMEDIES.......................................................................................45
8.3 WAIVERS BY CREDIT PARTIES......................................................................45
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT.....................................................45
9.1 ASSIGNMENT AND PARTICIPATIONS..................................................................45
9.2 APPOINTMENT OF AGENT...........................................................................48
9.3 AGENT'S RELIANCE, ETC..........................................................................49
9.4 GE CAPITAL AND AFFILIATES......................................................................49
9.5 LENDER CREDIT DECISION.........................................................................49
9.6 INDEMNIFICATION................................................................................50
9.7 SUCCESSOR AGENT................................................................................50
9.8 SETOFF AND SHARING OF PAYMENTS.................................................................51
9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN CONCERT.......................51
10. SUCCESSORS AND ASSIGNS..................................................................................54
10.1 SUCCESSORS AND ASSIGNS.........................................................................54
11. MISCELLANEOUS...........................................................................................54
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT..................................................54
11.2 AMENDMENTS AND WAIVERS.........................................................................54
11.3 FEES AND EXPENSES..............................................................................56
11.4 NO WAIVER......................................................................................57
11.5 REMEDIES.......................................................................................57
11.6 SEVERABILITY...................................................................................58
11.7 CONFLICT OF TERMS..............................................................................58
11.8 CONFIDENTIALITY................................................................................58
11.9 GOVERNING LAW..................................................................................58
11.10 NOTICES 59
11.11 SECTION TITLES.................................................................................60
11.12 COUNTERPARTS...................................................................................60
11.13 WAIVER OF JURY TRIAL...........................................................................60
11.14 PRESS RELEASES AND RELATED MATTERS.............................................................60
11.15 REINSTATEMENT..................................................................................61
11.16 ADVICE OF COUNSEL..............................................................................61
11.17 NO STRICT CONSTRUCTION.........................................................................61
12. CROSS-GUARANTY..........................................................................................62
12.1 CROSS-GUARANTY.................................................................................62
12.2 WAIVERS BY BORROWERS...........................................................................63
12.3 BENEFIT OF GUARANTY............................................................................63
12.4 SUBORDINATION OF SUBROGATION, ETC..............................................................63
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12.5 ELECTION OF REMEDIES...........................................................................63
12.6 LIMITATION.....................................................................................64
12.7 CONTRIBUTION WITH RESPECT TO GUARANTY OBLIGATIONS..............................................64
12.8 LIABILITY CUMULATIVE...........................................................................65
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (SECTION 1.2) - Letters of Credit
Annex C (SECTION 1.8) - Cash Management System
Annex D (SECTION 2.1(a)) - Closing Checklist
Annex E (SECTION 4.1(a)) - Financial Statements and Projections -- Reporting
Annex F (SECTION 4.1(b)) - Collateral Reports
Annex G (SECTION 6.10) - Financial Covenants
Annex H (SECTION 9.9(a)) - Lenders' Wire Transfer Information
Annex I (SECTION 11.10) - Notice Addresses
Annex J (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Application for Standby Letter of Credit
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Pro Forma
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 3.27(a) - FCC Licenses
Disclosure Schedule 3.27(f) - Local Marketing Agreements and Time Brokerage Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.2 - Investments; Loans and Advances
Disclosure Schedule 6.3 - Indebtedness
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Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
Disclosure Schedule 6.20 - Credit Parties Other than Borrowers
vii
This
CREDIT AGREEMENT (this "AGREEMENT"), dated as of June 25, 2002
among
RADIO UNICA CORP., a Delaware corporation ("RUC"); the entities listed on
ANNEX 1 hereto (each of the entities listed on ANNEX 1 hereto and RUC is
sometimes referred to herein as, a "BORROWER" and collectively as, the
"BORROWERS"); the other Credit Parties signatory hereto; GENERAL ELECTRIC
CAPITAL CORPORATION, a Delaware corporation (in its individual capacity, "GE
CAPITAL"), for itself, as Lender, and as Agent for Lenders; and the other
Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrowers have requested that Lenders extend a revolving
credit facility to Borrowers of up to Twenty Million Dollars ($20,000,000.00) in
the aggregate for the purpose of providing (a) working capital financing for
Borrowers, (b) funds for other general corporate purposes of Borrowers, (c)
funds for certain approved future acquisitions, and (d) funds for other purposes
permitted hereunder; and for these purposes, Lenders are willing to make certain
loans and other extensions of credit to Borrowers of up to such amount upon the
terms and conditions set forth herein;
WHEREAS, Borrowers have agreed to secure all of their obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon all of their existing and
after-acquired personal and real property;
WHEREAS, RADIO UNICA COMMUNICATIONS CORP., a Delaware corporation and
the parent of RUC ("PARENT"), is willing to guarantee all of the obligations of
Borrowers to Agent and Lenders under the Loan Documents and Parent is willing to
pledge to Agent, for the benefit of Agent and Lenders, all of the Stock of RUC,
together with all of its other assets, to secure such guaranty;
WHEREAS, the Borrowers' business is a mutual and collective
enterprise, and the Borrowers believe that the consolidation of all loans and
other accommodations under this Agreement will enhance the Borrowers' aggregate
borrowing powers and facilitate the administration of their relationship with
the Agent and the Lenders, all to the Borrowers' respective individual and
mutual advantage; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in ANNEX A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in ANNEX A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "APPENDICES") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 CREDIT FACILITIES.
(a) REVOLVING CREDIT FACILITY.
(i) Subject to the terms and conditions hereof, each Lender
agrees to make available to Borrowers from time to time until the Commitment
Termination Date its Pro Rata Share of advances (each, a "REVOLVING CREDIT
ADVANCE"). The Pro Rata Share of the Revolving Loan of any Lender shall not at
any time exceed its separate Commitment. The obligations of each Lender
hereunder shall be several and not joint. Until the Commitment Termination Date,
Borrowers may borrow, repay and reborrow under this SECTION 1.1(a); PROVIDED;
that the amount of any Revolving Credit Advance to be made at any time shall not
exceed the lesser of (A) the Borrowing Availability at such time or (B) the
Commitments at such time. Each Revolving Credit Advance shall be made on notice
by Borrower Representative on behalf of the applicable Borrower to one of the
representatives of Agent identified in SCHEDULE 1.1 at the address specified
therein. Any such notice must be given no later than (1) 11:00 a.m. (
New York
time) on the Business Day of the proposed Revolving Credit Advance, in the case
of an Index Rate Loan, or (2) 11:00 a.m. (
New York time) on the date which is 3
Business Days prior to the proposed Revolving Credit Advance, in the case of a
LIBOR Loan. Each such notice (a "NOTICE OF REVOLVING CREDIT ADVANCE") must be
given in writing (by telecopy or overnight courier) substantially in the form of
EXHIBIT 1.1(a)(i), and shall include (A) a certification by Borrower
Representative that Borrowers are, as of the date of such Advance, in compliance
with all of the terms and conditions contained in the Loan Documents, including
the Financial Covenants contained herein, together with a written calculation,
in detail satisfactory to Agent, of such Financial Covenant compliance, (B) the
information required in such Exhibit, and (C) such other information as may be
required by Agent. If any Borrower desires to have the Revolving Credit Advances
bear interest by reference to a LIBOR Rate, Borrower Representative must comply
with SECTION 1.5(e).
(ii) Except as provided in SECTION 1.12, Borrowers shall
execute and deliver to each Lender a note to evidence the Commitment of that
Lender. Each note shall be in the principal amount of the Commitment of the
applicable Lender, dated the Closing Date and substantially in the form of
EXHIBIT 1.1(a)(ii) (each a "REVOLVING NOTE" and, collectively, the "REVOLVING
NOTES"). Each Revolving Note shall represent the obligation of the Borrowers to
pay the amount of the applicable Lender's Commitment or, if less, such Lender's
Pro Rata Share of the aggregate unpaid principal amount of all Revolving Credit
Advances to Borrowers together with interest thereon as prescribed in SECTION
1.5. The entire unpaid balance of the aggregate Revolving Loan and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date.
(b) [Intentionally Reserved.]
(c) RELIANCE ON NOTICES; APPOINTMENT OF BORROWER REPRESENTATIVE.
Agent shall be entitled to rely upon, and shall be fully protected in relying
upon, any Notice of Revolving Credit Advance, Notice of Conversion/Continuation
or similar notice believed by
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Agent to be genuine. Agent may assume that each Person executing and delivering
any notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the contrary. Each
Borrower hereby designates RUC as its representative and agent on its behalf for
the purposes of issuing Notices of Revolving Credit Advances and Notices of
Conversion/Continuation, giving instructions with respect to the disbursement of
the proceeds of the Loans, selecting interest rate options, requesting Letters
of Credit, giving and receiving all other notices and consents hereunder or
under any of the other Loan Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Borrower or Borrowers
under the Loan Documents. Borrower Representative hereby accepts such
appointment. Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a notice or
communication from all Borrowers, and may give any notice or communication
required or permitted to be given to any Borrower or Borrowers hereunder to
Borrower Representative on behalf of such Borrower or Borrowers. Each Borrower
agrees that each notice, election, representation and warranty, covenant,
agreement and undertaking made on its behalf by Borrower Representative shall be
deemed for all purposes to have been made by such Borrower and shall be binding
upon and enforceable against such Borrower to the same extent as if the same had
been made directly by such Borrower.
1.2 LETTERS OF CREDIT.
Subject to and in accordance with the terms and conditions contained
herein and in ANNEX B, Borrower Representative, on behalf of the applicable
Borrower, shall have the right to request, and Lenders agree to incur, or
purchase participations in, Letter of Credit Obligations in respect of each
Borrower.
1.3 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS. Borrowers may at any time on at least 5
days' prior written notice by Borrower Representative to Agent (i) voluntarily
prepay and permanently reduce the Commitment; PROVIDED that (A) any such
prepayment and permanent reduction shall be in an amount of at least $500,000,
and (B) the remaining Commitment following any such prepayment and permanent
reduction shall be in an amount of at least $10,000,000 or (ii) terminate the
Commitment; PROVIDED that upon any such termination, all Loans and other
Obligations shall be immediately due and payable in full and all Letter of
Credit Obligations shall be cash collateralized or otherwise satisfied in
accordance with ANNEX B. Any such voluntary prepayment and permanent reduction
or any such termination of the Commitment must be accompanied by the payment of
any LIBOR funding breakage costs in accordance with SECTION 1.13(b). Upon any
such prepayment and permanent reduction or termination of the Commitment, each
Borrower's right to request Revolving Credit Advances, or request that Letter of
Credit Obligations be incurred on its behalf shall simultaneously be terminated;
but, in the case of a voluntary prepayment, solely to the extent of such
prepayment.
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(b) MANDATORY PREPAYMENTS.
(i) In the event and on each occasion that (A) the
outstanding balance of the Revolving Loan exceeds the Borrowing Availability, or
(B) the outstanding balance of the Revolving Loan exceeds the Commitments,
Borrowers shall immediately repay the aggregate outstanding Loans to the extent
required to eliminate any such excess. If any such excess remains after
repayment in full of the aggregate outstanding Revolving Credit Advances,
Borrowers shall provide cash collateral for the Letter of Credit Obligations in
the manner set forth in ANNEX B to the extent required to eliminate such excess.
(ii) In the event and on each occasion that any Net Proceeds
are received by or on behalf of any Credit Party in respect of any Prepayment
Event, Borrowers shall, immediately after such Net Proceeds are received, prepay
the Loans in accordance with SECTION 1.3(c) in an aggregate amount equal to such
Net Proceeds; PROVIDED that, in the case of any event described in clause (a) of
the definition of the term Prepayment Event, if the Borrower Representative
shall deliver to the Agent a certificate of a Financial Officer to the effect
that the Borrowers intend to apply the Net Proceeds from such event (or a
portion thereof specified in such certificate) (such Net Proceeds or portion
thereof, the "REINVESTMENT AMOUNT"), within 180 days after receipt of such Net
Proceeds, to acquire real property, equipment or other tangible assets to be
used in the business of the Borrowers and which are reasonably acceptable to
Agent, and certifying that no Default or Event of Default has occurred and is
continuing, then no prepayment shall be required pursuant to this paragraph in
respect of the Net Proceeds in respect of such event (or the portion of such Net
Proceeds specified in such certificate, if applicable) except to the extent of
any such Net Proceeds therefrom that have not been so applied by the end of such
180-day period, at which time a prepayment shall be required in an amount equal
to such Net Proceeds that have not been so applied.
(iii) In the event and on each occasion that any Credit Party
(i) issues Stock (other than Stock issued in connection with a Permitted
Acquisition), or (ii) incurs Indebtedness for borrowed money (other than the
Loans or Indebtedness permitted to be incur pursuant to SECTION 6.3(a)), no
later than the Business Day following the date of receipt of the proceeds
thereof, such Credit Party shall, or if such Credit Party is not a Borrower
shall (x) contribute the same to the equity of a Borrower and (y) cause such
Borrower to, prepay the Loans in an amount equal to the Net Proceeds received in
connection therewith or, in the case of a Permitted Equity Transaction, 50% of
the Net Proceeds thereof. Any such prepayment shall be applied in accordance
with SECTION 1.3(c).
(iv) Beginning on March 31, 2003 for the Fiscal Year 2002 and
annually thereafter, on March 31st of each year for the immediately preceding
Fiscal Year, Borrowers shall prepay the Obligations in an amount equal to Fifty
percent (50%) of Excess Cash Flow for the immediately preceding Fiscal Year. Any
prepayments from Excess Cash Flow paid pursuant to this CLAUSE (iv) shall be
applied in accordance with SECTION 1.3(c). Each such prepayment shall be
accompanied by a certificate signed by Borrower Representative certifying the
manner in which Excess Cash Flow and the resulting prepayment were calculated,
which certificate shall be in form and substance reasonably satisfactory to
Agent.
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(c) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any prepayments
made by any Borrower pursuant to SECTIONS 1.3(b)(ii) OR (b)(iii) above shall be
applied as follows: FIRST, to Fees and reimbursable expenses of Agent then due
and payable pursuant to any of the Loan Documents; SECOND, to interest then due
and payable on Revolving Credit Advances made to such Borrower; THIRD, to the
principal balance of Revolving Credit Advances outstanding to such Borrower
until the same have been paid in full; FOURTH, to any Letter of Credit
Obligations of such Borrower to provide cash collateral therefor in the manner
set forth in ANNEX B, until all such Letter of Credit Obligations have been
fully cash collateralized in the manner set forth in ANNEX B. The Commitment
shall be permanently reduced by the amount of any such prepayments made pursuant
to SUBCLAUSES (ii) and (iii) of SECTION 1.3(b), but shall not be permanently
reduced by the amount of any such prepayments made pursuant to SUBCLAUSES (i)
and (iv) of SECTION 1.3(b). Notwithstanding the foregoing, the Commitment shall
not be permanently reduced by the amount of any prepayment pursuant to clause
(iii) of SECTION 1.3(b) to the extent such prepayment results from the Net
Proceeds of a Permitted Equity Transaction consummated on or before the 180th
day following the Closing Date.
(d) APPLICATION OF PREPAYMENTS FROM INSURANCE AND CONDEMNATION
PROCEEDS. Prepayments from insurance or condemnation proceeds in accordance with
SECTION 5.4(c) and the Mortgages, respectively, shall be applied as follows:
insurance proceeds from casualties or losses to cash or Inventory shall be
applied to the Revolving Credit Advances of the Borrower that incurred such
casualties or losses; insurance or condemnation proceeds from casualties or
losses to Equipment, Fixtures and Real Estate shall be applied to the Revolving
Credit Advances of the Borrower that incurred such casualties or losses. The
Commitment shall not be permanently reduced by the amount of any such
prepayments. If insurance or condemnation proceeds received by a particular
Borrower exceed the outstanding principal balances of the Loans to that Borrower
or if the precise amount of insurance or condemnation proceeds allocable to
Inventory as compared to Equipment, Fixtures and Real Estate are not otherwise
determined, the allocation and application of those proceeds shall be determined
by Agent, subject to the approval of Requisite Lenders.
(e) NO IMPLIED CONSENT. Nothing in this SECTION 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 USE OF PROCEEDS. Borrowers shall utilize the proceeds of the
Revolving Loan solely for the financing of Borrowers' ordinary working capital
and general corporate needs (including payment of interest), to provide funds
for future Permitted Acquisitions, and, to the extent herein permitted,
Permitted Senior Note Repurchases and Capital Expenditures. DISCLOSURE SCHEDULE
(1.4) contains a description of Borrowers' sources and uses of funds as of the
Closing Date, including Loans and Letter of Credit Obligations to be made or
incurred on that date, and a funds flow memorandum detailing how funds from each
source are to be transferred to particular uses.
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1.5 INTEREST AND APPLICABLE MARGINS.
(a) Borrowers shall pay interest to Agent, for the ratable benefit of
Lenders in accordance with the various Loans being made by each Lender, in
arrears on each applicable Interest Payment Date, at the following rates: the
Index Rate, PLUS two and one-half percent (2.5%) per annum or, at the election
of Borrower Representative, the applicable LIBOR Rate, PLUS three and one-half
percent (3.5%) per annum, in each case, based on the aggregate Revolving Credit
Advances outstanding from time to time.
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a 360-day year for the actual
number of days occurring in the period for which such interest and Fees are
payable. The Index Rate is a floating rate determined for each day. Each
determination by Agent of an interest rate and Fees hereunder shall be final,
binding and conclusive on Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is continuing
under SECTION 8.1(a), (h) OR (i) or so long as any other Default or Event of
Default has occurred and is continuing and at the election of Agent (or upon the
written request of Requisite Lenders) confirmed by written notice from Agent to
Borrower Representative, the interest rates applicable to the Loans and the
Letter of Credit Fees shall be increased by two percentage points (2%) per annum
above the rates of interest or the rate of such Fees otherwise applicable
hereunder ("DEFAULT RATE"), and all outstanding Obligations shall bear interest
at the Default Rate applicable to such Obligations. Interest and Letter of
Credit Fees at the Default Rate shall accrue from the initial date of such
Default or Event of Default until that Default or Event of Default is cured or
waived in writing and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in SECTION 2.2,
Borrower Representative shall have the option to (i) request that any Revolving
Credit Advance be made as a LIBOR Loan, (ii) convert at any time all or any part
of outstanding Loans from Index Rate Loans to LIBOR Loans, (iii) convert any
LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with SECTION 1.13(b), if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, or (iv) continue all or any
portion of any Loan as a LIBOR Loan upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued Loan shall commence on
the first day after the last day of the LIBOR Period of the Loan to be
continued. Any Loan or group of Loans having the same proposed LIBOR Period to
be made or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $250,000 and integral multiples of $250,000 in excess of such amount.
Any such election must be made by 11:00 a.m. (
New York time) on the 3rd Business
Day prior to (1) the date of any proposed Advance which is to bear interest at
the LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans
to be continued as such, or (3) the date on which Borrower Representative wishes
to convert any Index Rate Loan to a LIBOR Loan for a
6
LIBOR Period designated by Borrower Representative in such election. If no
election is received with respect to a LIBOR Loan by 11:00 a.m. (
New York time)
on the 3rd Business Day prior to the end of the LIBOR Period with respect
thereto (or if a Default or an Event of Default has occurred and is continuing
or if the additional conditions precedent set forth in SECTION 2.2 shall not
have been satisfied), that LIBOR Loan shall be converted to an Index Rate Loan
at the end of its LIBOR Period. Borrower Representative must make such election
by notice to Agent in writing, by telecopy or overnight courier. In the case of
any conversion or continuation, such election must be made pursuant to a written
notice (a "NOTICE OF CONVERSION/CONTINUATION") in the form of EXHIBIT 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
SECTION 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "MAXIMUM LAWFUL RATE"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; PROVIDED, HOWEVER, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in SECTIONS 1.5(a) THROUGH (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this SECTION 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in SECTION 1.11 and thereafter shall refund any excess to Borrowers or as a
court of competent jurisdiction may otherwise order.
1.6 [Intentionally Reserved.]
1.7 [Intentionally Reserved.]
1.8 CASH MANAGEMENT SYSTEMS. On or prior to the Closing Date,
Borrowers will establish and will maintain until the Termination Date, the cash
management systems described in ANNEX C (the "CASH MANAGEMENT SYSTEMS").
1.9 FEES.
(a) In consideration for extending and closing the Revolving Loan and
committing funds with respect thereto, Borrowers shall pay to Agent, for the
ratable benefit of
7
such Lenders, on the Closing Date a closing fee (the "CLOSING FEE") in the
amount of two and one-quarter percent (2.25%) of the Commitment MINUS the
Commitment Fee.
(b) As additional compensation for the Lenders, Borrowers shall pay
to Agent, for the ratable benefit of Lenders, in arrears, on the first Business
Day of each month prior to the Commitment Termination Date and on the Commitment
Termination Date, an unused line fee (the "UNUSED LINE FEE") for Borrowers'
non-use of available funds in an amount equal to (i) one-half of one percent
(0.50%) per annum, in the event the Usage, as of the date of determination, is
equal to or greater than Fifty percent (50%) of the Commitments then existing,
and (ii) three-quarters of one percent (0.75%) per annum, in the event the
Usage, as of the date of determination, is less than Fifty percent (50%) of the
Commitments then existing (in each case, calculated on the basis of a 360 day
year for actual days elapsed), MULTIPLIED BY the difference between (x) the
Commitment (as it may be reduced from time to time) and (y) the average for the
period of the daily closing balances of the aggregate Revolving Loan outstanding
during the period for which such Fee is due (the applicable amount described in
this clause (y) being, the "USAGE").
(c) Borrowers shall pay to Agent, for the ratable benefit of Lenders,
the Letter of Credit Fee as provided in ANNEX B.
(d) In connection with Agent's initial and ongoing audits and field
examinations, Borrowers shall pay to Agent, for the ratable benefit of Lenders,
a field examination fee (the "FIELD EXAMINATION FEE") in an amount equal to $750
per auditor, PLUS out-of-pocket expenses, which Field Examination Fee shall be
due and payable by Borrowers to Agent at the completion of each audit and/or
field examination completed by Agent or Lenders in accordance with the terms
hereof.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent for distribution, as set forth herein,
to the Lenders entitled thereto. Fees due and owing hereunder and paid shall not
be refundable under any circumstances.
1.10 RECEIPT OF PAYMENTS. Borrowers shall make each payment under this
Agreement not later than 2:00 p.m. (
New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability as of any
date, all payments shall be deemed received on the first Business Day following
the Business Day on which immediately available funds therefor are received in
the Collection Account prior to 2:00 p.m.
New York time. Payments received after
2:00 p.m.
New York time on any Business Day or on a day that is not a Business
Day shall be deemed to have been received on the following Business Day.
1.11 APPLICATION AND ALLOCATION OF PAYMENTS.
(a) So long as no Default or Event of Default has occurred and is
continuing, (i) payments consisting of proceeds of the Collateral received in
the ordinary course of business shall be applied to the Revolving Loan; (ii)
voluntary prepayments shall be applied as determined by Borrower Representative,
subject to the provisions of SECTION 1.3(a); and (iii) mandatory
8
prepayments shall be applied as set forth in SECTIONS 1.3(c) AND 1.3(d). All
payments and prepayments applied to a particular Loan shall be applied ratably
to the portion thereof held by each Lender as determined by its Pro Rata Share.
As to any other payment, and as to all payments made when a Default or Event of
Default has occurred and is continuing or following the Commitment Termination
Date, each Borrower hereby irrevocably waives the right to direct the
application of any and all payments received from or on behalf of such Borrower,
and each Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the Obligations of
Borrowers as Agent may deem advisable notwithstanding any previous entry by
Agent in the Loan Account or any other books and records. In the absence of a
specific determination by Agent with respect thereto, payments shall be applied
to amounts then due and payable in the following order: (1) to Fees and Agent's
expenses reimbursable hereunder; (2) to interest on the Loans, ratably in
proportion to the interest accrued as to each Loan; (3) to principal payments on
the Loans and to provide cash collateral for Letter of Credit Obligations in the
manner described in ANNEX B, ratably to the aggregate, combined principal
balance of the Loans and outstanding Letter of Credit Obligations; and (4) to
all other Obligations, including expenses of Lenders to the extent reimbursable
under SECTION 11.3.
(b) Agent is authorized to, and at its sole election may, charge to
the Revolving Loan balance on behalf of each Borrower and cause to be paid all
Fees, expenses, Charges, costs (including insurance premiums in accordance with
SECTION 5.4(a)) and interest and principal, other than principal of the
Revolving Loan, owing by Borrowers under this Agreement or any of the other Loan
Documents if and to the extent Borrowers fail to pay promptly any such amounts
as and when due, even if the amount of such charges would exceed Borrowing
Availability at such time. At Agent's option and to the extent permitted by law,
any charges so made shall constitute part of the Revolving Loan hereunder.
1.12 LOAN ACCOUNT AND ACCOUNTING.
Agent shall maintain a loan account (the "LOAN ACCOUNT") on its books
to record: all Advances, all payments made by Borrowers, and all other debits
and credits as provided in this Agreement with respect to the Loans or any other
Obligations. All entries in the Loan Account shall be made in accordance with
Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall, absent manifest error, be presumptive evidence
of the amounts due and owing to Agent and Lenders by each Borrower; PROVIDED,
that any failure to so record or any error in so recording shall not limit or
otherwise affect any Borrower's duty to pay the Obligations. Agent shall render
to Borrower Representative a monthly accounting of transactions with respect to
the Loans setting forth the balance of the Loan Account as to each Borrower for
the immediately preceding month. Unless Borrower Representative notifies Agent
in writing of any objection to any such accounting (specifically describing the
basis for such objection), within 30 days after the date thereof, each and every
such accounting shall (absent manifest error) be deemed final, binding and
conclusive on Borrowers in all respects as to all matters reflected therein.
Only those items expressly objected to in such notice shall be deemed to be
disputed by Borrowers. Notwithstanding any provision herein contained to the
contrary, any Lender may elect (which election may be revoked) to dispense with
the issuance of Notes to
9
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
1.13 INDEMNITY.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "INDEMNIFIED
PERSON"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "INDEMNIFIED LIABILITIES"); PROVIDED, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person (x) to the
extent that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct, and (y) with respect to Indemnified Liabilities, to the extent
caused solely and directly by a dispute among Lenders or a dispute between any
Lender and Agent. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or occurs
as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any
borrowing of, or shall request a termination of, any borrowing of, conversion
into or continuation of, LIBOR Loans after Borrower Representative has given
notice requesting the same in accordance herewith; or (iv) any Borrower shall
fail to make any prepayment of a LIBOR Loan after Borrower Representative has
given a notice thereof in accordance herewith, then Borrowers shall jointly and
severally indemnify and hold harmless each Lender from and against all losses,
costs and expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained. For the purpose of
calculating amounts payable to a Lender under this subsection, each Lender shall
be
10
deemed to have actually funded its relevant LIBOR Loan through the purchase of a
deposit bearing interest at the LIBOR Rate in an amount equal to the amount of
that LIBOR Loan and having a maturity comparable to the relevant LIBOR Period;
PROVIDED, that each Lender may fund each of its LIBOR Loans in any manner it
sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower Representative with its
written certification of its calculation of all amounts payable pursuant to this
SECTION 1.13(b), and such calculation shall be binding on the parties hereto
unless Borrower Representative shall object in writing within 15 Business Days
of receipt thereof, specifying the basis for such objection in detail. In no
event shall a Lender make a claim for amounts hereunder for any expenses
incurred prior to one hundred twenty (120) days before the date on which such
certification was sent to Borrower Representative. Notwithstanding the
foregoing, Borrowers shall not be liable for any payments pursuant to this
SECTION 1.13(b) due to the operation of SECTION 1.16(c).
1.14 ACCESS.
Each Credit Party that is a party hereto shall, during normal business
hours, from time to time as Agent reasonably determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors and employees (including officers) of each
Credit Party and to the Collateral, (b) permit Agent, and any of its officers,
employees and agents, to inspect, audit and make extracts from any Credit
Party's books and records, and (c) permit Agent, and its officers, employees and
agents, to inspect, review, evaluate and make test verifications and counts of
the Collateral of any Credit Party. If a Default or Event of Default has
occurred and is continuing or if access is necessary to preserve or protect the
Collateral as determined by Agent, each such Credit Party shall provide such
access to Agent and to each Lender at all times and without advance notice.
Furthermore, so long as any Event of Default has occurred and is continuing,
Borrowers shall provide Agent and each Lender with access to their suppliers and
customers. Each Credit Party shall make available to Agent and its counsel, as
quickly as is possible under the circumstances, originals or copies of all books
and records that Agent may reasonably request. Each Credit Party shall deliver
any document or instrument necessary for Agent, as it may from time to time
reasonably request, to obtain records from any service bureau or other Person
that maintains records for such Credit Party, and shall maintain duplicate
records or supporting documentation on media, including computer tapes and discs
owned by such Credit Party. Agent will give Lenders at least 5 days' prior
written notice of scheduled audits. Representatives of other Lenders may
accompany Agent's representatives on scheduled audits at no charge to Borrowers.
1.15 TAXES.
(a) Any and all payments by each Borrower hereunder (including any
payments made pursuant to SECTION 12) or under the Notes shall be made, in
accordance with this SECTION 1.15, free and clear of and without deduction for
any and all present or future Taxes. If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder (including any
sum payable pursuant to SECTION 12) or under the Notes, (i) the sum
11
payable shall be increased as much as shall be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this SECTION 1.15) Agent or Lenders, as applicable, receive an
amount equal to the sum they would have received had no such deductions been
made, (ii) such Borrower shall make such deductions, and (iii) such Borrower
shall pay the full amount deducted to the relevant taxing or other authority in
accordance with applicable law. Within 30 days after the date of any payment of
Taxes, Borrower Representative shall furnish to Agent the original or a
certified copy of a receipt evidencing payment thereof. Agent and Lenders shall
not be obligated to return or refund any amounts received pursuant to this
Section.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within 10 days of demand therefor, pay Agent and each
Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this SECTION 1.15) paid by Agent or such
Lender, as appropriate, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside
the United States (a "FOREIGN LENDER") as to which payments to be made under
this Agreement or under the Notes are exempt from United States withholding tax
under an applicable statute or tax treaty shall provide to Borrower
Representative and Agent a properly completed and executed IRS Form W-8ECI or
Form W-8BEN or other applicable form, certificate or document prescribed by the
IRS or the United States certifying as to such Foreign Lender's entitlement to
such exemption (a "CERTIFICATE OF EXEMPTION"). Any foreign Person that seeks to
become a Lender under this Agreement shall provide a Certificate of Exemption to
Borrower Representative and Agent prior to becoming a Lender hereunder. No
foreign Person may become a Lender hereunder if such Person fails to deliver a
Certificate of Exemption in advance of becoming a Lender.
1.16 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY.
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrowers
shall from time to time upon demand by such Lender (with a copy of such demand
to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower Representative and to Agent shall, absent
manifest error, be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline
12
or request from any central bank or other Governmental Authority (whether or not
having the force of law), in each case adopted after the Closing Date, there
shall be any increase in the cost to any Lender of agreeing to make or making,
funding or maintaining any Loan, then Borrowers shall from time to time, upon
demand by such Lender (with a copy of such demand to Agent), pay to Agent for
the account of such Lender additional amounts sufficient to compensate such
Lender for such increased cost. A certificate as to the amount of such increased
cost, submitted to Borrower Representative and to Agent by such Lender, shall be
conclusive and binding on Borrowers for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of
any circumstances referred to above which would result in any such increased
cost, the affected Lender shall, to the extent not inconsistent with such
Lender's internal policies of general application, use reasonable commercial
efforts to minimize costs and expenses incurred by it and payable to it by
Borrowers pursuant to this SECTION 1.16(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Borrower Representative
through Agent, (i) the obligation of such Lender to agree to make or to make or
to continue to fund or maintain LIBOR Loans shall terminate and (ii) each
Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing by
such Borrower to such Lender, together with interest accrued thereon, unless
Borrower Representative on behalf of such Borrower, within 5 Business Days after
the delivery of such notice and demand, converts all LIBOR Loans into Index Rate
Loans; PROVIDED, HOWEVER, Borrowers shall not be liable for any payments
pursuant to SECTION 1.13(b) due to the operation of this subsection (c).
(d) Within 15 days after receipt by Borrower Representative of
written notice and demand from any Lender (an "AFFECTED LENDER") for payment of
additional amounts or increased costs as provided in SECTIONS 1.15(a), 1.16(a)
OR 1.16(b), Borrower Representative may, at its option, notify Agent and such
Affected Lender of its intention to replace the Affected Lender. So long as no
Default or Event of Default has occurred and is continuing, Borrower
Representative, with the consent of Agent, may obtain, at Borrowers' expense, a
replacement Lender ("REPLACEMENT LENDER") for the Affected Lender, which
Replacement Lender must be reasonably satisfactory to Agent. If Borrowers obtain
a Replacement Lender within 90 days following notice of their intention to do
so, the Affected Lender must sell and assign its Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all Loans
held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale; PROVIDED, that Borrowers shall have
reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment. Notwithstanding the foregoing, Borrowers shall not have the
right to obtain a Replacement Lender if the Affected Lender rescinds its demand
for increased costs or additional amounts within 15 days following its receipt
of Borrowers' notice of intention to replace such Affected Lender. Furthermore,
if Borrowers
13
give a notice of intention to replace and do not so replace such Affected Lender
within 90 days thereafter, Borrowers' rights under this SECTION 1.16(d) shall
terminate and Borrowers shall promptly pay all increased costs or additional
amounts demanded by such Affected Lender pursuant to SECTIONS 1.15(a), 1.16(a)
AND 1.16(b).
1.17 SINGLE LOAN. All Loans to each Borrower and all of the other
Obligations of each Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of such Borrower secured,
until the Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 CONDITIONS TO THE INITIAL LOANS. No Lender shall be obligated to
make any Loan or incur any Letter of Credit Obligations on the Closing Date, or
to take, fulfill, or perform any other action hereunder, until the following
conditions have been satisfied or provided for in a manner satisfactory to
Agent, or waived in writing by Agent and Lenders:
(a)
CREDIT AGREEMENT; LOAN DOCUMENTS. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrowers, each other
Credit Party, Agent and Lenders; and Agent shall have received such documents,
instruments, agreements and legal opinions as Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including all those listed in the Closing Checklist attached
hereto as ANNEX D, each in form and substance reasonably satisfactory to Agent.
(b) MATTERS RELATING TO SENIOR CREDIT FACILITY. Agent shall have
received satisfactory evidence that the Senior Credit Facility (as such term is
defined in the RUC Indenture) which existed on and as of July 8, 1998 has been
terminated and all obligations of any Credit Party thereunder have been
indefeasibly paid in full.
(c) APPROVALS. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents, or (ii)
an officer's certificate in form and substance reasonably satisfactory to Agent
affirming that no such consents or approvals are required.
(d) PAYMENT OF FEES. Borrowers shall have paid the Fees required to
be paid on the Closing Date in the respective amounts specified in SECTION 1.9,
and shall have reimbursed Agent for all fees, costs and expenses of closing
(including, without limitation, fees, charges and disbursements of counsel)
presented as of the Closing Date.
(e) CAPITAL STRUCTURE: OTHER INDEBTEDNESS. The capital structure of
each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party shall be acceptable to Agent in its sole discretion.
14
(f) DUE DILIGENCE. Agent shall have completed its business and legal
due diligence, including without limitation a roll forward of its previous
Collateral audit, with results reasonably satisfactory to Agent.
2.2 FURTHER CONDITIONS TO EACH LOAN.
Except as otherwise expressly provided herein, no Lender shall be
obligated to fund any Advance, convert or continue any Loan as a LIBOR Loan or
incur any Letter of Credit Obligation, if, as of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect in any material
respect as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement and Agent or
Requisite Lenders have determined not to make such Advance, convert or continue
any Loan as LIBOR Loan or incur such Letter of Credit Obligation as a result of
the fact that such warranty or representation is untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof as determined by the Requisite Lenders and Agent
or Requisite Lenders have determined not to make such Advance, convert or
continue any Loan as a LIBOR Loan or incur such Letter of Credit Obligation as a
result of the fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is continuing or
would result after giving effect to any Advance (or the incurrence of any Letter
of Credit Obligation), and Agent or Requisite Lenders shall have determined not
to make any Advance, convert or continue any Loan as a LIBOR Loan or incur any
Letter of Credit Obligation as a result of that Default or Event of Default; or
(d) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the aggregate
Revolving Loan would exceed the Borrowing Availability, the aggregate amount of
the Revolving Loan would exceed the Revolving Loan Commitments or the
outstanding face amount of Letters of Credit would exceed the L/C Sublimit, as
the case may be.
The request and acceptance by any Borrower of the proceeds of any
Advance, the incurrence of any Letter of Credit Obligations or the conversion or
continuation of any Loan into, or as, a LIBOR Loan shall be deemed to
constitute, as of the date thereof, a representation and warranty by Borrowers
that the conditions in this SECTION 2.2 have been satisfied.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
15
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each Credit Party (a) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation or organization set
forth in DISCLOSURE SCHEDULE (3.1); (b) is duly qualified to conduct business
and is in good standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification, except
where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect; (c) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its properties,
to lease the property it operates under lease and to conduct its business as
now, heretofore and proposed to be conducted; (d) subject to specific
representations regarding Environmental Laws, the Communications Act (and the
regulations promulgated thereunder) and FCC Licenses, has all material licenses,
permits, consents or approvals from or by, and has made all material filings
with, and has given all material notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct;
(e) is in compliance with its charter and bylaws or partnership or operating
agreement, as applicable; and (f) subject to specific representations set forth
herein regarding ERISA, Environmental Laws, communications laws, including the
Communications Act, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.2 EXECUTIVE OFFICES, COLLATERAL LOCATIONS, FEIN.
As of the Closing Date, the current location of each Credit Party's
chief executive office and the premises at which any Collateral is located are
set forth in DISCLOSURE SCHEDULE (3.2), and none of such locations has changed
within the 12 months preceding the Closing Date. In addition, DISCLOSURE
SCHEDULE (3.2) lists the federal employer identification number and
organizational identification number, if any, of each Credit Party.
3.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS.
The execution, delivery and performance by each Credit Party of the
Loan Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Person's power; (b) have been duly authorized by
all necessary corporate, limited liability company or limited partnership
action; (c) do not contravene any provision of such Person's charter, bylaws or
partnership or operating agreement, as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture (including specifically the RUC Indenture), mortgage,
deed of trust, lease, agreement or other instrument to which such Person is a
party or by which such Person or any of its property is bound; (f) do not result
in the creation or imposition of any Lien upon any of the property of such
Person other than those in favor of Agent, on behalf of itself and Lenders,
pursuant to the Loan Documents; and (g) do not require the consent or approval
of any Governmental Authority or any other Person, except those referred to in
SECTION 2.1(c), all of which will have been duly obtained, made or complied with
16
prior to the Closing Date. On or prior to the Closing Date, each of the Loan
Documents shall have been duly executed and delivered by each Credit Party that
is a party thereto and each such Loan Document shall then constitute a legal,
valid and binding obligation of such Credit Party enforceable against it in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, and other similar laws affecting the rights of creditors generally
or by equitable principals generally.
3.4 FINANCIAL STATEMENTS AND PROJECTIONS.
Except for the Projections, all Financial Statements concerning
Borrowers and their respective Subsidiaries that are referred to below have been
prepared in accordance with GAAP consistently applied throughout the periods
covered (except as disclosed therein and except, with respect to unaudited
Financial Statements, for the absence of footnotes and normal year-end audit
adjustments) and present fairly in all material respects the financial position
of the Persons covered thereby as at the dates thereof and the results of their
operations and cash flows for the periods then ended.
(a) FINANCIAL STATEMENTS. The following Financial Statements attached
hereto as DISCLOSURE SCHEDULE (3.4(a)) have been delivered on the date hereof:
(i) The audited consolidated balance sheets at December 31,
2001 and the related consolidated statements of operations, changes in Series A
redeemable cumulative preferred stock and stockholders' equity (deficit) and
statement(s) of cash flows of Parent and its Subsidiaries for the Fiscal Years
then ended, certified by Ernst & Young, LLP.
(ii) The unaudited consolidated balance sheet(s) at March 31,
2002 and the related consolidated and consolidating statement(s) of income and
consolidated statement(s) of cash flows of Parent and its Subsidiaries for the
Fiscal Quarter then ended.
(b) PRO FORMA. The Pro Forma delivered on the date hereof and
attached hereto as DISCLOSURE SCHEDULE (3.4(b)) was prepared by Borrowers giving
pro forma effect to the transactions contemplated hereby and was based on the
unaudited consolidated balance sheets of Parent and its Subsidiaries dated March
31, 2002, and was prepared in accordance with GAAP, with only such adjustments
thereto as would be required in accordance with GAAP and for normal year-end
adjustments.
(c) PROJECTIONS. The Projections delivered on the date hereof and
attached hereto as DISCLOSURE SCHEDULE (3.4(c)) have been prepared by Borrowers
in light of the past operations of their businesses and reflect projections for
the 3 year period beginning on January 1, 2002 on a quarter-by-quarter basis for
the initial two years covered thereby and on a year-by-year basis thereafter.
The Projections are based upon estimates and assumptions stated therein, all of
which Borrowers believe to be reasonable and fair in light of current conditions
and current facts known to Borrowers and, as of the Closing Date, reflect
Borrowers' good faith and reasonable estimates of the future financial
performance of Borrowers and of the other information projected therein for the
period set forth therein.
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3.5 MATERIAL ADVERSE EFFECT.
Between December 31, 2001 and the Closing Date: (a) no Credit Party
has incurred any obligations, contingent or noncontingent liabilities,
liabilities for Charges, long-term leases or unusual forward or long-term
commitments that are not reflected in the Pro Forma and that, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect; (b)
no contract, lease or other agreement or instrument has been entered into by any
Credit Party or has become binding upon any Credit Party's assets and no law or
regulation applicable to any Credit Party has been adopted that has had or could
reasonably be expected to have a Material Adverse Effect; and (c) no Credit
Party is in default and to the best of Borrowers' knowledge no third party is in
default under any material contract, lease or other agreement or instrument,
that alone or in the aggregate could reasonably be expected to have a Material
Adverse Effect. Between December 31, 2001 and the Closing Date no event has
occurred, that alone or together with other events, could reasonably be expected
to have a Material Adverse Effect.
3.6 OWNERSHIP OF PROPERTY; LIENS.
As of the Closing Date, the real estate ("REAL ESTATE") listed in
DISCLOSURE SCHEDULE (3.6) constitutes all of the real property owned, leased,
subleased, or used by any Credit Party which (i) is necessary for the continuing
operation of a Radio Station in substantially the same manner as such Radio
Station is operated by Borrowers as of the Closing Date or (ii) has, in the case
of owned Real Estate, a fair market value of $100,000 or greater or, in the case
of leased subleased, or used Real Estate, annual payments of $50,000 or greater
(any such Real Estate, individually and collectively, the "MATERIAL REAL
ESTATE"). Each Credit Party owns good and marketable fee simple title to all of
its owned Material Real Estate, and valid and marketable leasehold interests in
all of its leased Material Real Estate, all as described on DISCLOSURE SCHEDULE
(3.6), and copies of all such leases or a summary of terms thereof reasonably
satisfactory to Agent have been delivered to Agent. DISCLOSURE SCHEDULE (3.6)
further describes any Real Estate with respect to which any Credit Party is a
lessor, sublessor or assignor as of the Closing Date. Each Credit Party also has
good and marketable title to, or valid leasehold interests in, all of its
personal property and assets. As of the Closing Date, none of the properties and
assets of any Credit Party are subject to any Liens other than Permitted
Encumbrances, and there are no facts, circumstances or conditions known to any
Credit Party that may result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Encumbrances. Each Credit Party has
received all deeds, assignments, waivers, consents, nondisturbance and
attornment or similar agreements, bills of sale and other documents, and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Credit Party's right, title and interest in and to all
such Real Estate and other properties and assets. DISCLOSURE SCHEDULE (3.6) also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Material Real Estate. As of the Closing
Date, no portion of any Credit Party's Material Real Estate has suffered any
material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its original condition or
otherwise remedied. As of the Closing Date, all material permits required to
have been issued or appropriate to enable the Material Real Estate to be
lawfully occupied and used for all of the purposes for which it is currently
occupied and used have been lawfully issued and are in full force and effect.
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3.7 LABOR MATTERS.
As of the Closing Date (a) no strikes or other material labor disputes
against any Credit Party are pending or, to any Credit Party's knowledge,
threatened; (b) hours worked by and payment made to employees of each Credit
Party comply in all material respects with the Fair Labor Standards Act and each
other federal, state, local or foreign law applicable to such matters; (c) all
material payments due from any Credit Party for employee health and welfare
insurance have been paid or accrued as a liability on the books of such Credit
Party; (d) except as set forth in DISCLOSURE SCHEDULE (3.7), no Credit Party is
a party to or bound by any (i) collective bargaining agreement or (ii)
management agreement, consulting agreement, employment agreement, bonus,
restricted stock, stock option, or stock appreciation plan or agreement or any
similar plan, agreement or arrangement with any individual (1) where information
regarding the compensation of such individual would be required to be disclosed
pursuant to Item 402 of Regulation S-K, if such Credit Party were subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, or
(2) where any agreement(s) between such individual and one or more of the Credit
Parties individually, or in the aggregate, provide for guaranteed compensation
to such Person equal to or in excess of $200,000 per year, and true and complete
copies of any agreements described on DISCLOSURE SCHEDULE (3.7) have been
delivered to Agent); (e) there is no organizing activity involving any Credit
Party pending or, to any Credit Party's knowledge, threatened by any labor union
or group of employees; (f) there are no representation proceedings pending or,
to any Credit Party's knowledge, threatened with the National Labor Relations
Board, and no labor organization or group of employees of any Credit Party has
made a pending demand for recognition; and (g) except as set forth in DISCLOSURE
SCHEDULE (3.7), there are no material complaints or charges against any Credit
Party pending or, to the knowledge of any Credit Party, threatened to be filed
with any Governmental Authority or arbitrator based on, arising out of, in
connection with, or otherwise relating to the employment or termination of
employment by any Credit Party of any individual.
3.8 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK;
INDEBTEDNESS.
Except as set forth in DISCLOSURE SCHEDULE (3.8), as of the Closing
Date, no Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. All
of the issued and outstanding Stock of each Credit Party (other than Parent) is
owned by each of the Stockholders and in the amounts set forth in DISCLOSURE
SCHEDULE (3.8). Except as set forth in DISCLOSURE SCHEDULE (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party (other than Parent) may be
required to issue, sell, repurchase or redeem any of its Stock or other equity
securities or any Stock or other equity securities of its Subsidiaries. All
outstanding Indebtedness and Guaranteed Indebtedness of each Credit Party as of
the Closing Date (except for the Obligations) is described in SECTION 6.3
(including DISCLOSURE SCHEDULE (6.3)).
3.9 GOVERNMENT REGULATION.
No Credit Party is an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined
19
in the Investment Company Act of 1940. No Credit Party is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, or
any other federal or state statute that restricts or limits its ability to incur
Indebtedness or to perform its obligations hereunder. The making of the Loans by
Lenders to Borrowers, the incurrence of the Letter of Credit Obligations on
behalf of Borrowers and the application of the proceeds thereof and repayment
thereof will not violate any provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange Commission.
3.10 MARGIN REGULATIONS.
No Credit Party is engaged, nor will it engage, principally or as one
of its important activities, in the business of extending credit for the purpose
of "purchasing" or "carrying" any "margin stock" as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect (such securities being referred to herein as "MARGIN STOCK"). No
Credit Party owns any Margin Stock, and none of the proceeds of the Loans or
other extensions of credit under this Agreement will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any Indebtedness that was originally incurred to
purchase or carry any Margin Stock or for any other purpose that might cause any
of the Loans or other extensions of credit under this Agreement to be considered
a "purpose credit" within the meaning of Regulations T, U or X of the Federal
Reserve Board. No Credit Party will take or permit to be taken any action that
might cause any Loan Document to violate any regulation of the Federal Reserve
Board.
3.11 TAXES.
All material tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and all
Charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding Charges or
other amounts being contested in accordance with SECTION 5.2(b). Proper and
accurate amounts have been withheld by each Credit Party from its respective
employees for all periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have been timely
paid to the respective Governmental Authorities. DISCLOSURE SCHEDULE (3.11) sets
forth as of the Closing Date those taxable years for which any Credit Party's
tax returns are currently being audited by the IRS or any other applicable
Governmental Authority, and any assessments or, to the knowledge of Borrowers,
threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described in DISCLOSURE SCHEDULE (3.11), no Credit Party
has executed or filed with the IRS or any other Governmental Authority any
agreement or other document extending, or having the effect of extending, the
period for assessment or collection of any Charges. None of the Credit Parties
and their respective predecessors are liable for any Charges: (a) under any
agreement (including any tax sharing agreements) or (b) to each Credit Party's
knowledge, as a transferee. As of the Closing Date, no Credit Party has agreed
or been requested to make any adjustment under IRC Section 481(a), by reason of
a change in accounting method or otherwise, which would have a Material Adverse
Effect.
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3.12 ERISA.
(a) DISCLOSURE SCHEDULE (3.12) lists (i) all ERISA Affiliates and
(ii) all Plans and separately identifies all Pension Plans, including Title IV
Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest IRS/DOL 5500-series form for each such Plan, have been delivered to
Agent. Except with respect to Multiemployer Plans, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
with the material, applicable provisions of ERISA and the IRC, including the
timely filing of all reports required under the IRC or ERISA, including the
statement required by 29 CFR Section 2520.104-23. Neither any Credit Party nor
ERISA Affiliate has failed to make any contribution or pay any amount due as
required by either Section 412 of the IRC or Section 302 of ERISA or the terms
of any such Plan. Neither any Credit Party nor ERISA Affiliate has engaged in a
"prohibited transaction," as defined in Section 406 of ERISA and Section 4975 of
the IRC, in connection with any Plan, that would subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.
(b) Except as set forth in DISCLOSURE SCHEDULE (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan of any
Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041(b)(1) of ERISA, nor
has any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at
any time within the last five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time); (vi) except in the case of any ESOP, Stock of all Credit Parties and
their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair
market value of the assets of any Plan measured on the basis of fair market
value as of the latest valuation date of any Plan; and (vii) no liability under
any Title IV Plan has been satisfied with the purchase of a contract from an
insurance company that is not rated AAA by the Standard & Poor's Corporation or
an equivalent rating by another nationally recognized rating agency.
3.13 NO LITIGATION.
No action, claim, lawsuit, demand, investigation or proceeding is now
pending or, to the knowledge of any Credit Party, threatened against any Credit
Party, before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, "LITIGATION"), (a) that challenges any Credit Party's
right or power to enter into or perform any of
21
its obligations under the Loan Documents to which it is a party, or the validity
or enforceability of any Loan Document or any action taken thereunder, or (b),
except as set forth on DISCLOSURE SCHEDULE (3.13), that has a reasonable risk of
being determined adversely to any Credit Party and that, if so determined, could
be reasonably be expected to have a Material Adverse Effect. Except as set forth
on DISCLOSURE SCHEDULE (3.13), as of the Closing Date there is no Litigation
pending or, to any Credit Party's knowledge, threatened, that seeks damages in
excess of $500,000 or injunctive relief against, or alleges criminal misconduct
of, any Credit Party.
3.14 BROKERS.
Except for CIBC World Markets (whose fees have been disclosed to the
Agent), no broker or finder brought about the obtaining, making or closing of
the Loans, and no Credit Party or Affiliate thereof has any obligation to any
Person in respect of any finder's or brokerage fees or commissions in connection
therewith. The Credit Parties, jointly and severally, agree to indemnify and
hold harmless the Agent and each Lender from and against any claims, demand,
liability, proceedings, costs or expenses asserted with respect to or arising in
connection with any such fees or commissions.
3.15 INTELLECTUAL PROPERTY.
As of the Closing Date, each Credit Party owns or has rights to use
all Intellectual Property necessary to continue to conduct its business as now
or heretofore conducted by it or proposed to be conducted by it, and each
Patent, Trademark, Copyright and License is listed, together with application or
registration numbers, as applicable, in DISCLOSURE SCHEDULE (3.15). To their
knowledge, each Credit Party conducts its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect. Except as set forth in DISCLOSURE SCHEDULE
(3.15), no Credit Party is aware of any infringement claim by any other Person
with respect to any Intellectual Property.
3.16 FULL DISCLOSURE.
No information contained in this Agreement, any of the other Loan
Documents, any Projections, Financial Statements or Collateral Reports or other
written reports from time to time delivered hereunder or any written statement
furnished by or on behalf of any Credit Party to Agent or any Lender pursuant to
the terms of this Agreement contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made. The Liens granted to Agent, on behalf
of itself and Lenders, pursuant to the Collateral Documents will at all times be
fully perfected first priority Liens in and to the Collateral described therein,
subject, as to priority, only to Permitted Encumbrances.
3.17 ENVIRONMENTAL MATTERS.
(a) Except as set forth in DISCLOSURE SCHEDULE (3.17), and to the
knowledge of the Credit Parties, as of the Closing Date: (i) the Real Estate is
free of contamination from any Hazardous Material except for such contamination
that would not adversely impact the value or
22
marketability of such Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed $500,000; (ii) no Credit
Party has caused or suffered to occur any Release of Hazardous Materials on, at,
in, under, above, to, from or about any of its Real Estate; (iii) the Credit
Parties are and have been in compliance with all Environmental Laws, except for
such noncompliance that would not result in Environmental Liabilities which
could reasonably be expected to exceed $500,000; (iv) the Credit Parties have
obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as
presently conducted or as proposed to be conducted, except where the failure to
so obtain or comply with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to exceed $500,000,
and all such Environmental Permits are valid, uncontested and in good standing;
(v) no Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials, that
are likely to result in any Environmental Liabilities of such Credit Party which
could reasonably be expected to exceed $500,000, and no Credit Party has
permitted any current or former tenant or occupant of the Real Estate to engage
in any such operations; (vi) there is no Litigation arising under or related to
any Environmental Laws, Environmental Permits or Hazardous Material that seeks
damages, penalties, fines, costs or expenses in excess of $500,000 or injunctive
relief against, or that alleges criminal misconduct by, any Credit Party; (vii)
no notice has been received by any Credit Party identifying it as a "potentially
responsible party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Credit Parties, there are no facts,
circumstances or conditions that may result in any Credit Party being identified
as a "potentially responsible party" under CERCLA or analogous state statutes;
and (viii) the Credit Parties have provided to Agent copies of all existing
environmental reports, reviews and audits and all written information pertaining
to actual or potential Environmental Liabilities, in each case relating to any
Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent (i)
is not now, and has not ever been, in control of any of the Real Estate or any
Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18 INSURANCE.
DISCLOSURE SCHEDULE (3.18) lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by each Credit
Party, as well as a summary of the terms of each such policy.
3.19 DEPOSIT AND DISBURSEMENT ACCOUNTS.
DISCLOSURE SCHEDULE (3.19) lists all banks and other financial
institutions at which any Credit Party maintains deposit or other accounts as of
the Closing Date, including any Disbursement Accounts, and such Schedule
correctly identifies the name, address and telephone number of each depository,
the name in which the account is held, a description of the purpose of the
account, and the complete account number therefor.
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3.20 GOVERNMENT CONTRACTS.
Except as set forth in DISCLOSURE SCHEDULE (3.20), as of the Closing
Date, no Credit Party is a party to any contract or agreement with any
Governmental Authority and no Credit Party's Accounts are subject to the Federal
Assignment of Claims Act (31 U.S.C. Section 3727) or any similar state or local
law.
3.21 NETWORK AFFILIATES.
As of the Closing Date, there exists no actual or, to the knowledge of
any Credit Party, threatened termination or cancellation of, or any material
adverse modification or change in the business relationship of any Credit Party
with any network affiliate of the Credit Parties, the occurrence of which could
be reasonably likely to have a Material Adverse Effect.
3.22 AGREEMENTS AND OTHER DOCUMENTS.
As of the Closing Date, each Credit Party has provided to Agent or its
counsel, on behalf of Lenders, accurate and complete copies (or summaries) of
all of the following agreements or documents to which it is subject and each of
which is listed in DISCLOSURE SCHEDULE (3.22): (a) supply agreements and
purchase agreements not terminable by such Credit Party within 60 days following
written notice issued by such Credit Party and involving transactions in excess
of $500,000 per annum; (b) leases of Equipment having a remaining term of one
year or longer and requiring aggregate rental and other payments in excess of
$500,000 per annum; (c) licenses and permits held by the Credit Parties, the
absence of which could be reasonably likely to have a Material Adverse Effect;
(d) instruments and documents evidencing any Indebtedness or Guaranteed
Indebtedness of such Credit Party and any Lien granted by such Credit Party with
respect thereto; (e) instruments and agreements evidencing the issuance of any
equity securities, warrants, rights or options to purchase equity securities of
such Credit Party (other than Parent); (f) any affiliate agreement with any
Station or group of Stations not owned by a Credit Party; and (g) any
agreement(s) with any single on-air personality which individually, or in the
aggregate, provide for guaranteed compensation to such Person equal to or in
excess of $200,000 per year.
3.23 SOLVENCY.
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or incurred on the Closing Date or such other date
as Loans and Letter of Credit Obligations requested hereunder are made or
incurred, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of Borrower Representative; and (c) the payment and accrual of all
transaction costs in connection with the foregoing, each Credit Party is and
will be Solvent.
3.24 STATUS OF PARENT.
Other than its ownership of Stock and the obligations evidenced by the
Loan Documents, Parent does not engage in any business activities (other than
Permitted Parent Activities) and has no Indebtedness or any other liabilities.
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3.25 SECURITY INTERESTS.
The representations and warranties in the Collateral Documents are
true and correct in all material respects.
3.26 RUC DISCOUNT NOTES.
As of the Closing Date, Borrowers have delivered to Agent a complete
and correct copy of the RUC Indenture and the RUC Discount Notes (including all
schedules, exhibits, amendments, supplements, modifications, assignments and all
other documents delivered pursuant thereto or in connection therewith). Borrower
Representative has the corporate power and authority to incur the Indebtedness
evidenced by the RUC Discount Notes. No Lien has been granted by any Credit
Party as security for the RUC Discount Notes. All Obligations, including the
Letter of Credit Obligations, constitute "Permitted Indebtedness" pursuant to
clause (i) of the definition thereof in the RUC Indenture and all of the Liens
granted to Agent, for the benefit of Lenders, constitute "Permitted Liens"
pursuant to clause (xvi) of the definition thereof in the RUC Indenture.
3.27 FCC MATTERS/BROADCASTING BUSINESS.
(a) [Intentionally Omitted].
(b) [Intentionally Omitted].
(c) The License Subs are the holders of all FCC Licenses duly issued
in respect of all Radio Stations owned and operated by each Borrower and each
Subsidiary thereof (other than those Radio Stations operated under a Local
Marketing Agreement), which FCC Licenses are set forth on DISCLOSURE SCHEDULE
3.27(c). Such FCC Licenses constitute all of the authorizations by the FCC
necessary for the operation of the business of each Borrower and each of its
respective Subsidiaries substantially in the manner presently being conducted by
them, other than those FCC Licenses the failure of which to hold could not
reasonably be expected, individually or in the aggregate, to have a material
adverse effect on the operation of a Major Market Radio Station substantially in
the manner presently being operated. Such FCC Licenses are validly issued and in
full force and effect, unimpaired by any act or omission of any Borrower or any
Subsidiary thereof.
(d) Except as set forth in DISCLOSURE SCHEDULE 3.27(d), neither of
the Borrowers nor any Subsidiary thereof is a party to any investigation, notice
of violation, order or complaint issued by or before the FCC which could
reasonably be expected to have a Material Adverse Effect. Except for such
proceedings that affect the radio broadcasting industry generally and which are
set forth in DISCLOSURE SCHEDULE 3.27(d), there are no proceedings by or before
the FCC, which, individually or in the aggregate, in any manner materially
threaten or have a material adverse effect on the validity of any FCC Licenses,
other than FCC Licenses for any Radio Station which is not Major Market Radio
Station. No Credit Party has knowledge of a threat of any investigation, notice
of violation, order, complaint or proceeding before the FCC
25
which could reasonably be expected to have a Material Adverse Effect or has any
reason to believe that any FCC Licenses will not be renewed in the ordinary
course.
(e) Each Borrower and each of its respective Subsidiaries (i) have
duly and timely filed all filings which are required to be filed by such
Borrower and each such Subsidiary under the Communications Act and the rules and
regulations of the FCC, the failure to file of which, individually or in the
aggregate, could reasonably be expected to have a material adverse effect on the
operation of a Major Market Radio Station substantially in the manner presently
being operated, (ii) have paid all regulatory fees required to be paid by the
FCC, the failure of which to pay, individually or in the aggregate, could
reasonably be expected to have a material adverse effect on the operation of a
Major Market Radio Station substantially in the manner presently being operated
and (iii) are in all respects in compliance with the Communications Act and the
rules, regulations and written policies of the FCC, including the rules and
regulations of the FCC relating to the transmission of radio signals, the
failure to comply with which the failure to file of which, individually or in
the aggregate, could reasonably be expected to have a material adverse effect on
the operation of a Major Market Radio Station substantially in the manner
presently being operated.
(f) Except as set forth on DISCLOSURE SCHEDULE 3.27(f), no Borrower
nor any of its respective Subsidiaries is a party to any Time Brokerage
Agreement or to any Local Marketing Agreement.
(g) Each of the License Subs shall have as its sole asset or assets
the FCC Licenses related to the Radio Stations and a management agreement with
the respective Borrower related to such FCC Licenses. Neither such Borrower nor
any other Subsidiary of such Borrower (which is not a License Sub) shall hold
any FCC Licenses. The Borrowers shall not permit the License Subs to have any
business activities, operations, assets, Indebtedness, guaranties or Liens
(other than in favor of Agent).
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 REPORTS AND NOTICES.
(a) Each Credit Party executing this Agreement hereby agrees that
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and in
the manner set forth in ANNEX E.
(b) Each Credit Party executing this Agreement hereby agrees that,
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the various Collateral Reports at
the times, to the Persons and in the manner set forth in ANNEX F.
4.2 COMMUNICATION WITH ACCOUNTANTS.
Each Credit Party executing this Agreement authorizes (a) Agent and
(b) so long as a Default or an Event of Default has occurred and is continuing,
each Lender, to communicate
26
directly with its independent certified public accountants, including Ernst &
Young, LLP, and authorizes and, at Agent's request, shall instruct those
accountants and advisors to disclose and make available to Agent and each Lender
any and all Financial Statements and other supporting financial documents,
schedules and information relating to any Credit Party (including copies of any
issued management letters) with respect to the business, financial condition and
other affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this
Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS.
Each Credit Party shall: (i) do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and its rights and franchises; (ii) preserve and keep in full force and effect
the FCC Licenses (other than Excluded FCC Licenses); (iii) continue to conduct
its business substantially as now conducted or as otherwise permitted hereunder;
(iv) at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, and keep the same in
good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices; and (v) transact business only in
such corporate and trade names as are set forth in DISCLOSURE SCHEDULE (5.1),
except, as to any of the foregoing activities, where any such activities are
otherwise expressly permitted hereunder and except as to clauses (ii) and (iv),
the extent any such failures would, individually or in the aggregate, not
reasonably be expected to have a material adverse effect on the operation of a
Major Market Radio Station substantially in the manner presently being operated.
5.2 PAYMENT OF CHARGES.
(a) Subject to SECTION 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each case,
before any thereof shall become past due; PROVIDED, HOWEVER, a Credit Party may
in good faith contest any Charge by appropriate proceedings, if such Credit
Party shall have set aside on its books a sufficient reserve (segregated to the
extent required by GAAP) with respect thereto.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
SECTION 5.2(a); PROVIDED, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other
than payments to warehousemen and/or bailees) that is superior to any of the
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Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this SECTION 5.2(b) are no longer
met; and (v) Agent has not advised Borrowers in writing that Agent reasonably
believes that nonpayment or nondischarge thereof could have or result in a
Material Adverse Effect.
5.3 BOOKS AND RECORDS.
Each Credit Party shall keep adequate books and records with respect
to its business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the Financial Statements attached as DISCLOSURE SCHEDULE (3.4(a)).
5.4 INSURANCE; DAMAGE TO OR DESTRUCTION OF COLLATERAL.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on DISCLOSURE SCHEDULE (3.18) as in
effect on the date hereof or otherwise in form and amounts and with insurers
reasonably acceptable to Agent; PROVIDED, HOWEVER, Parent may reduce the amount
of coverage under Parent's directors' and officers' insurance to an amount not
less than $5,000,000. Such policies of insurance (or the loss payable and
additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide 30 days prior written notice to
Agent in the event of any non-renewal, cancellation or amendment of any such
insurance policy. If any Credit Party at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required above, or to pay
all premiums relating thereto, Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Agent shall not be deemed to have waived any Default or
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto, shall
be payable on demand by Borrowers to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in any
Credit Party's risk profile (including any change in the product mix maintained
by any Credit Party or any laws affecting the potential liability of such Credit
Party) to require additional forms and limits of insurance to, in Agent's
opinion, adequately protect both Agent's and Lender's interests in all or any
portion of the Collateral and to ensure that each Credit Party is protected by
insurance in amounts and with coverage customary for its industry. If reasonably
requested by Agent, each Credit Party shall deliver to Agent from time to time a
report of a reputable insurance broker, reasonably satisfactory to Agent, with
respect to its insurance policies.
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(c) Each Credit Party shall deliver to Agent, in form and substance
reasonably satisfactory to Agent, endorsements to (i) all "All Risk" and
business interruption insurance naming Agent, on behalf of itself and Lenders,
as loss payee, and (ii) all general liability and other liability policies
naming Agent, on behalf of itself and Lenders, as additional insured. Each
Credit Party irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Default or
Event of Default has occurred and is continuing or the anticipated insurance
proceeds exceed $750,000, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower Representative shall promptly notify Agent of any
loss, damage, or destruction to the Collateral in the amount of $250,000 or
more, whether or not covered by insurance. After deducting from such proceeds
the expenses, if any, incurred by Agent in the collection or handling thereof,
Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with SECTION 1.3(d); PROVIDED that in the case of
insurance proceeds pertaining to any Credit Party that is not a Borrower, such
insurance proceeds shall be applied ratably to all of the Loans owing by each
Borrower, or permit or require the applicable Credit Party to use such money, or
any part thereof, to replace, repair, restore or rebuild the Collateral in a
diligent and expeditious manner with materials and workmanship of substantially
the same quality as existed before the loss, damage or destruction.
Notwithstanding the foregoing, if the casualty giving rise to such insurance
proceeds could not reasonably be expected to constitute a Prepayment Event,
Agent shall permit the applicable Credit Party to replace, restore, repair or
rebuild the property; PROVIDED that if such Credit Party shall not have entered
into binding agreements to complete such replacement, restoration, repair or
rebuilding within 180 days of such casualty or such committed amounts shall not
have been applied within 359 days after such casualty, Agent may apply such
insurance proceeds to the Obligations in accordance with SECTION 1.3(d);
PROVIDED, FURTHER, that in the case of insurance proceeds pertaining to any
Credit Party that is not a Borrower, such insurance proceeds shall be applied
ratably to all of the Loans owing by each Borrower. All insurance proceeds that
are to be made available to any Borrower to replace, repair, restore or rebuild
the Collateral shall be applied by Agent to reduce the outstanding principal
balance of the Revolving Loan of such Borrower (which application shall not
result in a permanent reduction of the Commitment) and upon such application,
Agent shall establish a Reserve in an amount equal to the amount of such
proceeds so applied. All insurance proceeds made available to any Credit Party
that is not a Borrower to replace, repair, restore or rebuild Collateral shall
be deposited in a cash collateral account. Thereafter, such funds shall be made
available to such Credit Party to provide funds to replace, repair, restore or
rebuild the Collateral as follows: (i) Borrower Representative shall request a
Revolving Credit Advance or a release from the cash collateral account be made
to such Credit Party in the amount requested to be released; (ii) so long as the
conditions set forth in SECTION 2.2 have been met, Lenders shall make such
Revolving Credit Advance or Agent shall release funds from the cash collateral
account; and (iii) in the case of insurance proceeds applied against the
Revolving Loan, the Reserve established with respect to such insurance proceeds
shall be reduced by the amount of such Revolving Credit Advance. To the extent
not used to replace.
29
repair, restore or rebuild the Collateral, such insurance proceeds shall be
applied in accordance with SECTION 1.3(d); PROVIDED that in the case of
insurance proceeds pertaining to any Credit Party that is not a Borrower, such
insurance proceeds shall be applied ratably to all of the Loans owing by each
Borrower.
5.5 COMPLIANCE WITH LAWS.
Each Credit Party shall comply with all federal, state, local and
foreign laws and regulations applicable to it, including those relating to
communications, ERISA and labor matters and Environmental Laws, Environmental
Permits, and FCC matters except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6 SUPPLEMENTAL DISCLOSURE.
From time to time as may be reasonably requested by Agent (which
request will not be made more frequently than once each year absent the
occurrence and continuance of a Default or an Event of Default), the Credit
Parties shall supplement each Disclosure Schedule hereto, or any representation
herein or in any other Loan Document, with respect to any matter hereafter
arising that, if existing or occurring at the date of this Agreement, would have
been required to be set forth or described in such Disclosure Schedule or as an
exception to such representation or that is necessary to correct any information
in such Disclosure Schedule or representation which has been rendered inaccurate
thereby (and, in the case of any supplements to any Disclosure Schedule, such
Disclosure Schedule shall be appropriately marked to show the changes made
therein); PROVIDED that (a) no such supplement to any such Disclosure Schedule
or representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
the Closing Date.
5.7 INTELLECTUAL PROPERTY.
Each Credit Party will conduct its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect.
5.8 ENVIRONMENTAL MATTERS.
Each Credit Party shall and shall cause each Person within its control
to: (a) conduct its operations and keep and maintain its Real Estate in
compliance with all Environmental Laws and Environmental Permits other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions that are appropriate or necessary to maintain the value and
marketability of the Real Estate or to otherwise comply with Environmental Laws
and Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in,
30
under, above, to, from or about any of its Real Estate; (c) notify Agent
promptly after such Credit Party becomes aware of any violation of Environmental
Laws or Environmental Permits or any Release on, at, in, under, above, to, from
or about any Real Estate that is reasonably likely to result in Environmental
Liabilities in excess of $500,000; and (d) promptly forward to Agent a copy of
any order, notice, request for information or any communication or report
received by such Credit Party in connection with any such violation or Release
or any other matter relating to any Environmental Laws or Environmental Permits
that could reasonably be expected to result in Environmental Liabilities in
excess of $500,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
connection with any such violation, Release or other matter. If Agent at any
time has a reasonable basis to believe that there may be a violation of any
Environmental Laws or Environmental Permits by any Credit Party or any
Environmental Liability arising thereunder, or a Release of Hazardous Materials
on, at, in, under, above, to, from or about any of its Real Estate, that, in
each case, could reasonably be expected to have a Material Adverse Effect, then
each Credit Party shall, upon Agent's written request (i) cause the performance
of such environmental audits including subsurface sampling of soil and
groundwater, and preparation of such environmental reports, at Borrowers'
expense, as Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
Agent and shall be in form and substance reasonably acceptable to Agent, and
(ii) permit Agent or its representatives to have access to all Real Estate for
the purpose of conducting such environmental audits and testing as Agent deems
appropriate, including subsurface sampling of soil and groundwater. Borrowers
shall reimburse Agent for the costs of such audits and tests and the same will
constitute a part of the Obligations secured hereunder.
5.9 LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS, BAILEE LETTERS AND
REAL ESTATE PURCHASES.
Each Credit Party shall obtain a landlord's agreement, mortgagee
agreement or bailee letter, as applicable, from the lessor of each of parcel of
Material Real Estate and shall use its reasonable best efforts to obtain such
agreements from the lessor of each other leased property, mortgagee of owned
property or bailee with respect to any warehouse, processor or converter
facility or other location where Collateral is stored or located, which
agreement or letter shall contain a waiver or subordination of all Liens or
claims that the landlord, mortgagee or bailee may assert against the Collateral
at that location, and shall otherwise be reasonably satisfactory in form and
substance to Agent. After the Closing Date, no real property or warehouse space
shall be leased by any Credit Party without the prior written consent of Agent
(which consent, in Agent's discretion, may be conditioned upon the establishment
of Reserves acceptable to Agent) or, unless and until a reasonably satisfactory
landlord agreement or bailee letter, as appropriate, shall first have been
obtained with respect to such location. Each Credit Party shall timely and fully
pay and perform its material obligations under all leases and other agreements
with respect to each leased location or public warehouse where any Collateral is
or may be located. To the extent otherwise permitted hereunder, if any Credit
Party proposes to acquire a fee ownership interest in Real Estate after the
Closing Date, it shall first provide to Agent a mortgage or deed of trust
granting Agent a first priority Lien on such Real Estate, together with
environmental audits, mortgage title insurance commitment, and, if required by
Agent, supplemental casualty insurance and flood insurance, and such other
documents,
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instruments or agreements reasonably requested by Agent, in each case, in form
and substance reasonably satisfactory to Agent.
5.10 [Intentionally Reserved.]
5.11 FURTHER ASSURANCES.
Each Credit Party executing this Agreement agrees that it shall and
shall cause each other Credit Party to, at such Credit Party's expense and upon
request of Agent, duly execute and deliver, or cause to be duly executed and
delivered, to Agent such further instruments and do and cause to be done such
further acts as may be necessary or proper in the reasonable opinion of Agent to
carry out more effectively the provisions and purposes of this Agreement or any
other Loan Document.
5.12 FCC REPORTS AND COMMUNICATIONS. In addition to and not in lieu of
the requirements set forth in item (o) of ANNEX E, the Credit Parties shall
provide Agent, promptly after the same becomes available, with copies of all (i)
letters of inquiry, notices of apparent liability, hearing designation orders or
any other orders, rulings or decisions of the FCC naming any of the Radio
Stations and (ii) any correspondence, pleading or other response from any
Borrower or any of its respective Subsidiaries to the FCC with respect to the
foregoing. Each Borrower and its respective Subsidiaries shall comply fully with
all FCC filing requirements described in 47 C.F.R. Sections 73.3613 and 73.3615
and shall provide copies to Agent of all filings made pursuant to such
requirements. Without limiting the generality of the foregoing, Borrower and its
respective Subsidiaries shall file the Loan Documents at the FCC within 30 days
of the execution thereof and shall provide a copy to Agent of such filing.
5.13 OPERATING AGREEMENTS. Each Borrower shall, and shall cause each
of its respective Subsidiaries to maintain, and not breach or violate, any and
all Operating Agreements and other material contracts and rights necessary to
operate each Radio Station, except where the failure to so maintain or comply,
individually or in the aggregate, could not reasonably be expected to,
individually or in the aggregate, have a material adverse effect on the ability
of Borrower to operate any Major Market Radio Station in substantially the same
manner as such Major Market Radio Station is operated on the Closing Date.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that, unless the prior written consent or
written waiver of Agent and the Requisite Lenders is otherwise obtained, from
and after the date hereof until the Termination Date:
6.1 MERGERS, SUBSIDIARIES, ETC.
No Credit Party shall directly or indirectly, by operation of law or
otherwise, (a) form or acquire any Subsidiary, or (b) merge with, consolidate
with, acquire all or substantially all of the assets or Stock of, or otherwise
combine with or acquire, any Person, other than (i) transactions permitted
pursuant to SECTION 6.2, and (ii) the merger or consolidation of a Credit Party
into another Credit Party, so long as the Credit Party surviving is a Borrower,
if such
32
merger or consolidation involved such Borrower. Notwithstanding the foregoing,
any Borrower may acquire all or substantially all of the assets or Stock of any
Person (the "TARGET") (in each case, a "PERMITTED ACQUISITION") subject to the
satisfaction of each of the following conditions:
(i) Agent shall receive at least 15 Business Days' prior
written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) such Permitted Acquisition shall only involve assets
located in the United States or Canada (or, in the case of a proposed marketing
company to be established by Borrowers, Mexico, subject to the consent of Agent,
which consent will not be unreasonably withheld) and comprising a business, or
those assets of a business, of the type engaged in by Credit Parties as of the
Closing Date or directly related thereto, and which business would not subject
Agent or any Lender to regulatory or third party approvals in connection with
the exercise of its rights and remedies under this Agreement or any other Loan
Documents other than (A) approvals applicable to the exercise of such rights and
remedies with respect to Borrowers prior to such Permitted Acquisition and (B)
approvals required in connection with the transfer of any FCC Licenses acquired
in such Permitted Acquisition;
(iii) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(iv) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities (other than ordinary indemnity
obligations contained in the purchase agreement) shall be incurred, assumed or
otherwise be reflected on a consolidated balance sheet of Borrowers and Target
after giving effect to such Permitted Acquisition, except (A) Loans made
hereunder and (B) ordinary course trade payables, accrued expenses, secured
Indebtedness of Target which would be permitted under SECTION 6.3(a)(i) and
unsecured Indebtedness of the Target to the extent no Default or Event of
Default has occurred and is continuing or would result after giving effect to
such Permitted Acquisition;
(v) the sum of all amounts payable in connection with all
Permitted Acquisitions (including all transaction costs and all Indebtedness,
liabilities and contingent obligations incurred or assumed in connection
therewith or otherwise reflected on a consolidated balance sheet of Borrowers
and Target) shall not exceed $5,000,000;
(vi) the Target shall not have incurred an operating loss for
the trailing twelve-month period preceding the date of the Permitted
Acquisition, as determined based upon the Target's financial statements for its
most recently completed fiscal year and its most recent interim financial period
completed within 60 days prior to the date of consummation of such Permitted
Acquisition;
(vii) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
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(viii) at or prior to the closing of any Permitted Acquisition,
Agent will be granted a first priority perfected Lien (subject to Permitted
Encumbrances) in all assets acquired pursuant thereto or in the assets and Stock
of the Target, and Borrowers and the Target shall have executed such documents
and taken such actions as may be required by Agent in connection therewith;
(ix) Concurrently with delivery of the notice referred to in
CLAUSE (i) above, Borrowers shall have delivered to Agent, in form and substance
reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income
statement and cash flow statement of Borrowers and their Subsidiaries
(the "ACQUISITION PRO FORMA"), based on recent financial statements,
which shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of
Borrowers and their Subsidiaries in accordance with GAAP consistently
applied, but taking into account such Permitted Acquisition and the
funding of all Loans in connection therewith, and such Acquisition Pro
Forma shall reflect that on a pro forma basis, no Event of Default has
occurred and is continuing or would result after giving effect to such
Permitted Acquisition and Borrowers would have been in compliance with
the financial covenants set forth in ANNEX G for the four quarter
period reflected in the Compliance Certificate most recently delivered
to Agent pursuant to ANNEX E prior to the consummation of such
Permitted Acquisition (after giving effect to such Permitted
Acquisition and all Loans funded in connection therewith as if made on
the first day of such period);
(B) updated versions of the most recently delivered
Projections covering the 3-year period commencing on the date of such
Permitted Acquisition and otherwise prepared in accordance with the
Projections (the "ACQUISITION PROJECTIONS") and based upon historical
financial data of a recent date reasonably satisfactory to Agent,
taking into account such Permitted Acquisition; and
(C) a certificate of the chief financial officer of each
Borrower to the effect that: (w) each Borrower will be Solvent upon
the consummation of the Permitted Acquisition; (x) the Acquisition Pro
Forma fairly presents the financial condition of Borrowers (on a
consolidated basis) as of the date thereof after giving effect to the
Permitted Acquisition; (y) the Acquisition Projections are reasonable
estimates of the future financial performance of Borrowers subsequent
to the date thereof based upon the historical performance of Borrowers
and the Target and show that Borrowers shall continue to be in
compliance with the financial covenants set forth in ANNEX G for the
3-year period thereafter; and (z) Borrowers have completed their due
diligence investigation with respect to the Target and such Permitted
Acquisition, which investigation was conducted in a manner similar to
that which would have been conducted by a prudent purchaser of a
comparable business and the results of which investigation were
delivered to Agent and Lenders;
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(x) on or prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance reasonably satisfactory to
Agent, copies of the acquisition agreement and related agreements and
instruments, and all opinions, if any, certificates, lien search results and
other documents reasonably requested by Agent including those specified in the
last sentence of SECTION 5.9;
(xi) at the time of such Permitted Acquisition and after
giving effect thereto, no Default or Event of Default has occurred and is
continuing;
(xii) Agent and Lenders shall have consented in writing to such
Permitted Acquisition and Borrowers shall have reimbursed Agent for all fees,
costs and expenses of its review thereof (including, without limitation, fees,
charges and disbursements of counsel);
(xiii) If applicable, at the time of any Permitted Acquisition,
Borrowers shall cause each of the FCC Licenses being acquired by a Borrower or
any of its Subsidiaries to be transferred to one or more License Subs. Promptly
after the transfer of the FCC Licenses to the License Subs, Borrowers shall
provide to Agent copies of any required consents to such transfer from the FCC
and any other Governmental Authority, together with a certificate of Borrower
Representative stating that all necessary authorizations relating to such
transfer have been obtained or made, are in full force and effect and are not
subject to any pending or, to their knowledge, threatened reversal or
cancellation; and
(xiv) If applicable, within thirty (30) days after the
consummation of any Permitted Acquisition, Borrowers shall file any Ownership
Reports required to be filed with the FCC.
6.2 INVESTMENTS; LOANS AND ADVANCES.
Except as specifically disclosed on DISCLOSURE SCHEDULE (6.2), no
Credit Party shall make or permit to exist any investment in, or make, accrue or
permit to exist loans or advances of money to, any Person, through the direct or
indirect lending of money, holding of securities or otherwise, except that: (a)
Credit Parties may make investments in an aggregate amount of up to $250,000;
(b) Credit Parties may hold investments comprised of notes payable, or stock or
other securities issued by Account Debtors to a Credit Party pursuant to
negotiated agreements with respect to settlement of such Account Debtor's
Accounts in the ordinary course of business, so long as the aggregate amount of
such Accounts so settled by Borrowers does not exceed $500,000; (c) each Credit
Party may maintain its existing investments in its Subsidiaries as of the
Closing Date; (d) any Credit Party may make (i) investments in any other Credit
Party (including intercompany loans and advances to any other Credit Party to
the extent permitted by SECTION 6.3(a)(vii)) and (ii) Permitted Acquisitions to
the extent permitted by SECTION 6.1; (e) each Credit Party may make investments
consisting of loans permitted by SECTION 6.4(b); (f) each Credit Party may make
investments consisting of the receipt of non-cash consideration from a sale of
assets (including the Stock of a Subsidiary) permitted pursuant to SECTION 6.8;
(g) each Credit Party may make investments consisting of Guaranteed Indebtedness
to the extent permitted by SECTION 6.6; (h) each Credit Party may make
investments in (1) direct obligations of,
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or obligations guaranteed by, the United States of America or any agency thereof
for the payment of which guarantee or obligations the full faith and credit of
the United States of America is pledged, (2) time deposits and certificates of
deposit, maturing no more than one year from the date of creation thereof,
issued by commercial banks organized under the laws of the United States of
America, each having combined capital, surplus and undivided profits of not less
than three hundred million dollars ($300,000,000) and having a senior unsecured
rating of "A-" or "A3" or better by a nationally recognized rating agency, and
(3) repurchase agreements covering securities of the type described in this
SECTION 6.2, provided such repurchase agreements mature no more than seven (7)
days from the date of creation thereof, and (i) each Credit Party may make
investments in commercial paper rated at least A-1 or the equivalent by S&P or
P-1 or the equivalent by ▇▇▇▇▇'▇; PROVIDED, HOWEVER, no such investment may be
made by any Credit Party pursuant to subsections (a) - (i) hereof unless, on or
prior to the date it is acquired or made by such Credit Party, such investment
shall be subject to the valid, enforceable and perfected first-priority security
interest of Agent, for the benefit of Lenders.
6.3 INDEBTEDNESS.
(a) No Credit Party shall create, incur, assume or permit to exist
any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in SECTION 6.7(c)
and refinancings thereof or amendments or modifications thereof which do not
have the effect of increasing the principal amount thereof or changing the
amortization thereof (other than to extend the same) and which are otherwise on
terms and conditions no less favorable to any Credit Party, Agent or any Lender
than the terms of the Indebtedness being refinanced, amended or modified, (ii)
the Loans and the other Obligations, (iii) unfunded pension fund and other
employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, (iv) existing Indebtedness
described in DISCLOSURE SCHEDULE (6.3) and refinancings thereof or amendments or
modifications thereto that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same) and that are otherwise on terms and conditions no less favorable to any
Credit Party, Agent or any Lender, as determined by Agent, than the terms of the
Indebtedness being refinanced, amended or modified, (v) Indebtedness
specifically permitted under SECTION 6.1; (vi) Indebtedness specifically
permitted under SECTION 6.17; (vii) Indebtedness consisting of intercompany
loans and advances made by any Borrower to any other Credit Party and guarantees
by the Parent or any Credit Party of Indebtedness permitted hereby; PROVIDED,
that each of the following conditions are satisfied ("PERMITTED INTERCOMPANY
INDEBTEDNESS"): (A) such loans and advances are subordinated to the Obligations
in a manner and by documentation acceptable to Agent and any instrument
evidencing such loans or advances is pledged to Agent as security for the
Obligations; (B) each Credit Party shall record all intercompany transactions
and note the subordinated nature thereof on its books and records in a manner
reasonably satisfactory to Agent; (C) at the time any such intercompany loan or
advance is made by any Borrower to any other Credit Party and after giving
effect thereto, such Borrower shall be Solvent; and (D) no Default or Event of
Default would occur and be continuing after giving effect to any such proposed
intercompany loan; and (viii) other Indebtedness of Borrowers which (A) is
unsecured, (B) does not exceed $5,000,000 in the aggregate at any time, and (C)
is subordinated to the Obligations pursuant to documents and instruments and
under terms and conditions satisfactory to Agent, in its sole discretion.
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(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with SECTION 6.8; (iii) Indebtedness permitted by SECTION 6.3(a)(iv) upon any
refinancing thereof in accordance with SECTION 6.3(a)(iv); and (iv) the
Permitted Senior Note Repurchases.
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS.
(a) Except as otherwise expressly permitted in this SECTION 6 with
respect to Affiliates or as specifically set forth on DISCLOSURE SCHEDULE
(6.4)(a), no Credit Party shall enter into or be a party to any transaction with
any other Credit Party or any Affiliate thereof except in the ordinary course of
business and pursuant to the reasonable requirements of such Credit Party's
business and upon fair and reasonable terms that are no less favorable to such
Credit Party than would be obtained in a comparable arm's length transaction
with a Person not an Affiliate of such Credit Party. In addition, if any such
transaction or series of related transactions involves payments in excess of
$300,000 in the aggregate, the terms of these transactions must be disclosed in
advance to and approved in writing by Agent and Lenders. All such transactions
existing as of the date hereof are described in DISCLOSURE SCHEDULE 6.4(a).
Notwithstanding anything to the contrary set forth herein, the obligations of
Messrs. Blaya and ▇▇▇▇▇▇ under the Shareholder Notes, as the same exist as of
the Closing Date, may be forgiven, extended or amended (to the extent such
amendment does not have the result of increasing the amount due to the holder of
such Shareholder Note) by the applicable Credit Party.
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $150,000 to any employee and up to a maximum of
$250,000 in the aggregate at any one time outstanding.
6.5 CAPITAL STRUCTURE AND BUSINESS.
No Credit Party shall (a) make any changes in any of its business
objectives, purposes or operations that could in any way adversely affect the
repayment of the Loans or any of the other Obligations or could otherwise
reasonably be expected to have or result in a Material Adverse Effect, (b) make
any change in its capital structure as described in DISCLOSURE SCHEDULE (3.8),
including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock; PROVIDED that Parent may issue or sell shares of its Stock
for cash so long as (i) the proceeds thereof are applied in prepayment of the
Obligations as required by SECTION 1.3(b), and (ii) no Change of Control occurs
after giving effect thereto, or (c) amend its charter or bylaws in a manner that
would adversely affect Agent or Lenders or such Credit Party's duty or ability
to repay the Obligations. No Credit Party shall engage in any business other
than the commercial radio business (which shall be deemed to include, without
limitation, programming, production and distribution), and, in the case of MASS,
promotional and marketing activities reasonably related thereto.
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6.6 GUARANTEED INDEBTEDNESS.
No Credit Party shall create, incur, assume or permit to exist any
Guaranteed Indebtedness except (a) the Guarantees, (b) by endorsement of
instruments or items of payment for deposit to the general account of any Credit
Party, and (c) for Guaranteed Indebtedness incurred for the benefit of any other
Credit Party if the primary obligation is expressly permitted by this Agreement
other than Indebtedness, if any, of a Target existing at the time such Target is
acquired.
6.7 LIENS.
No Credit Party shall create, incur, assume or permit to exist any
Lien on or with respect to its Accounts or any of its other properties or assets
(whether now owned or hereafter acquired) except for (a) Permitted Encumbrances;
(b) Liens in existence on the date hereof and summarized on DISCLOSURE SCHEDULE
(6.7) securing the Indebtedness described on DISCLOSURE SCHEDULE (6.3) and
permitted refinancings, extensions and renewals thereof, including extensions or
renewals of any such Liens; PROVIDED that the principal amount of the
Indebtedness so secured is not increased and the Lien does not attach to any
other property; and (c) Liens created after the date hereof by conditional sale
or other title retention agreements (including Capital Leases) or in connection
with purchase money Indebtedness with respect to Equipment and Fixtures acquired
by any Credit Party in the ordinary course of business, involving the incurrence
of an aggregate amount of purchase money Indebtedness and Capital Lease
Obligations of not more than $5,000,000 outstanding at any one time for all such
Liens (PROVIDED that such Liens attach only to the assets subject to such
purchase money debt and such Indebtedness is incurred within 20 days following
such purchase and does not exceed 100% of the purchase price of the subject
assets). In addition, no Credit Party shall become a party to any agreement,
note, indenture or instrument, or take any other action, that would prohibit the
creation of a Lien on any of its properties or other assets in favor of Agent,
on behalf of itself and Lenders, as additional collateral for the Obligations,
except operating leases, Capital Leases or Licenses which prohibit Liens upon
the assets that are subject thereto.
6.8 SALE OF STOCK AND ASSETS.
No Credit Party shall sell, transfer, convey, assign or otherwise
dispose of any of its properties or other assets, including the Stock of any of
its Subsidiaries (whether in a public or a private offering or otherwise) or any
of its Accounts, other than (a) the sale of Inventory in the ordinary course of
business; and (b) the sale, transfer, conveyance or other disposition by a
Credit Party of Equipment, Fixtures or Real Estate having a value not exceeding
$250,000 in any single transaction, $500,000 in the aggregate in any Fiscal
Year, or $1,000,000 in the aggregate during the term hereof; and (c) a Permitted
Equity Transaction. With respect to any disposition of assets or other
properties permitted pursuant to CLAUSES (b) above, subject to SECTION 1.3(b),
Agent agrees on reasonable prior written notice to release its Lien on such
assets or other properties in order to permit the applicable Credit Party to
effect such disposition and shall execute and deliver to Borrowers, at
Borrowers' expense, appropriate UCC amendment statements and other releases as
reasonably requested by Borrowers.
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6.9 ERISA.
No Credit Party shall, or shall cause or permit any ERISA Affiliate
to, cause or permit to occur an event that could result in the imposition of a
Lien under Section 412 of the IRC or Section 302 or 4068 of ERISA or cause or
permit to occur an ERISA Event to the extent such ERISA Event could reasonably
be expected to have a Material Adverse Effect.
6.10 FINANCIAL COVENANTS.
Borrowers shall not breach or fail to comply with any of the Financial
Covenants.
6.11 HAZARDOUS MATERIALS.
No Credit Party shall cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
or (b) otherwise adversely impact the value or marketability of any of the Real
Estate or any of the Collateral, other than such violations or Environmental
Liabilities that could not reasonably be expected to have a Material Adverse
Effect.
6.12 SALE-LEASEBACKS.
No Credit Party shall engage in any sale-leaseback, synthetic lease or
similar transaction involving any of its assets.
6.13 CANCELLATION OF INDEBTEDNESS.
No Credit Party shall cancel any claim or debt owing to it, except for
reasonable consideration negotiated on an arm's length basis and in the ordinary
course of its business consistent with past practices or as expressly permitted
by SECTION 6.4(a).
6.14 RESTRICTED PAYMENTS.
No Credit Party shall make any Restricted Payment, except (a)
intercompany loans and advances among Borrowers and Guarantors to the extent
permitted by SECTION 6.3, (b) dividends and distributions by Subsidiaries of any
Borrower paid to such Borrower, (c) employee loans permitted under SECTION
6.4(b), (d) payments of principal and interest on Permitted Intercompany
Indebtedness, and (e) Permitted Payments, in each case, so long as at the time
of the making of any such payment, no Default or Event of Default shall then
exist or be caused thereby.
6.15 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR.
No Credit Party shall (a) change its name as it appears in official
filings in the state of its incorporation or other organization, (b) change its
chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, (c) change the type of entity that it
39
is, (d) change its organization identification number, if any, issued by its
state of incorporation or other organization, or (e) change its state of
incorporation or organization, in each case without at least 30 days prior
written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and PROVIDED that any such new
location shall be in the continental United States. No Credit Party shall change
its Fiscal Year.
6.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS.
No Credit Party shall directly or indirectly enter into or become
bound by any agreement, instrument, indenture or other obligation (other than
this Agreement and the other Loan Documents) that could directly or indirectly
restrict, prohibit or require the consent of any Person with respect to the
payment of dividends or distributions or the making or repayment of intercompany
loans by a Subsidiary of any Borrower to a Borrower or between Borrowers.
6.17 NO SPECULATIVE TRANSACTIONS.
No Credit Party shall engage in any transaction involving commodity
options, futures contracts or similar transactions, except solely to hedge
against fluctuations in the prices of commodities owned or purchased by it and
the values of foreign currencies receivable or payable by it and interest swaps,
caps or collars.
6.18 LEASES; REAL ESTATE PURCHASES.
No Credit Party shall enter into any operating lease for Equipment or
Real Estate, if the aggregate of all such operating lease payments payable in
any year for all Credit Parties on a consolidated basis would exceed $500,000;
PROVIDED, HOWEVER, the Credit Parties may (x) purchase real estate for the
purpose of constructing a transmitter site in the Sacramento, California area
for a price not to exceed $300,000, and (y) amend or renew an operating lease
for Equipment or Real Estate, if such amendment or renewal (i) does not have the
effect of increasing the principal amount of the obligations thereof by more
than 15%, (ii) is otherwise on terms and conditions not materially less
favorable to any Credit Party, than the terms of the agreement being amended or
renewed, and (iii) does not otherwise result in the breach of any
representation, warrants or covenant of any Credit Party hereunder. Except as
permitted under SECTION 6.1 in connection with a Permitted Acquisition, no
Credit Party shall purchase a fee simple ownership interest in Real Estate with
an aggregate purchase price in excess of $500,000.
6.19 CHANGES RELATING TO SUBORDINATED DEBT; MATERIAL CONTRACTS.
(a) No Credit Party shall change or amend the terms of (i) any of the
RUC Discount Note Documents or (ii) any Subordinated Debt (or any indenture or
agreement in connection therewith) if the effect of such amendment is to: (1)
increase the interest rate on such Subordinated Debt; (2) change the dates upon
which payments of principal or interest are due on such Subordinated Debt other
than to extend such dates; (3) change any default or event of default other than
to delete or make less restrictive any default provision therein, or add any
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covenant with respect to such Subordinated Debt; (4) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (5) grant
any security or collateral to secure payment of such Subordinated Debt; or (6)
change or amend any other term if such change or amendment would materially
increase the obligations of the Credit Party thereunder or confer additional
material rights on the holder of such Subordinated Debt in a manner adverse to
any Credit Party, Agent or any Lender.
(b) No Credit Party shall change or amend the terms of any of the
following material contracts (other than changes or amendments which (1) are,
individually or in the aggregate with all other changes or amendments to any
agreement from the Closing Date, not material to such agreement or (2) have the
effect of making the economic terms of such agreement more favorable to the
applicable Credit Party): (i) that certain Management and Stockholder Agreement,
dated as of April 30, 2001, by and among Mass Promotions, Inc., MASS Services,
Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-Fonts and ▇▇▇▇▇ ▇▇▇▇▇▇▇; (ii) that certain Time
Brokerage Agreement, dated April 12, 2001, by and between Radio Unica of Miami
License Corp. and Hispanic Christian Radio, LLC;(iii) that certain Time
Brokerage Agreement, dated June 1, 2001, by and between Radio Unica of
New York
License Corp., a Delaware corporation, and Radio Restoration; and (iv) that
certain Agreement, dated September 23, 1998, by and between
Radio Unica Corp.
and Inter/Forever Sports, Inc., as the same has been amended on or before the
Closing Date.
6.20 CREDIT PARTIES OTHER THAN BORROWERS.
Except as otherwise described in DISCLOSURE SCHEDULE (6.20), none of
the Credit Parties other than Borrowers (including specifically Parent) shall
engage in any trade or business (other than, in the case of Parent, the
Permitted Parent Activities), or own any assets (other than Stock of their
Subsidiaries) or incur any Indebtedness or Guaranteed Indebtedness (other than
the Obligations).
6.21 LICENSE SUBS.
No Borrower nor any Subsidiary thereof, other than a License Sub,
shall hold any FCC Licenses. Borrowers shall not permit the License Subs to have
any business activities, operations, assets, Indebtedness, guaranties or Liens
(other than those in favor of Agent).
6.22 LIMITATION ON SALE OR DISCOUNT OF RECEIVABLES. No Borrower nor
any Subsidiary thereof, shall discount or sell with recourse, or sell for less
than the greater of the face value or market value thereof, any of its notes
receivable or accounts receivable, other than in the ordinary course of its
business consistent with past practices; PROVIDED, HOWEVER, that, regardless of
Borrowers' ordinary course conduct or their respective past practices, other
than the forgiveness of certain Indebtedness under the Shareholder Notes in
accordance with SECTION 6.4(a), no Borrower nor any Subsidiary thereof shall
discount or sell with recourse, or sell for less than the greater of the face
value or market value thereof, any note receivable or account receivable with a
face amount in excess of $500,000 for a discount in excess of fifty percent
(50%), without the prior written consent of Agent.
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7. TERM
7.1 TERMINATION.
The financing arrangements contemplated hereby shall be in effect
until the Commitment Termination Date, and the Loans and all other Obligations
shall be automatically due and payable in full on such date.
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; PROVIDED, that the
provisions of SECTION 11, the payment obligations under SECTIONS 1.15 and 1.16,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 EVENTS OF DEFAULT.
The occurrence of any one or more of the following events (regardless
of the reason therefor) shall constitute an "EVENT OF DEFAULT" hereunder:
(a) Any Borrower (i) (A) fails to make any payment of principal of
the Loans or any of the other Obligations when due and payable, or (B) fails to
make any payment of interest on, or Fees owing in respect of, the Loans or any
of the other Obligations within three (3) Business Days of when due and payable,
or (ii) fails to pay or reimburse Agent or Lenders for any expense reimbursable
hereunder or under any other Loan Document within 10 days following Agent's
demand for such reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of SECTIONS 1.4, 1.8, 5.4(a) OR 6, or any of the
provisions set forth in ANNEXES C OR G, respectively.
(c) Any Borrower or any other Credit Party fails or neglects to
perform, keep or observe any of the provisions of SECTION 4 or any provisions
set forth in ANNEXES E OR F, respectively, and the same shall remain unremedied
for 3 Business Days or more.
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(d) Any Credit Party fails or neglects to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
SECTION 8.1) and the same shall remain unremedied for 30 days or more.
(e) A default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $500,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $500,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case, regardless of whether such default is waived, or such
right is exercised, by such holder or trustee.
(f) Any representation or warranty herein or in any Loan Document or
in any written statement, report, financial statement or certificate made or
delivered to Agent or any Lender by any Credit Party is untrue or incorrect in
any material respect as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of $500,000
or more are attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of any Credit Party and such condition
continues for 30 days or more.
(h) A case or proceeding is commenced against any Credit Party
seeking a decree or order in respect of such Credit Party (i) under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Credit Party, and such case or
proceeding shall remain undismissed or unstayed for 60 days or more or a decree
or order granting the relief sought in such case or proceeding shall be entered
by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner the institution of proceedings thereunder or the filing of
any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or for any substantial part of any such Credit Party's
assets, (iii) makes an assignment for the benefit of creditors, (iv) takes any
action in furtherance of any of the foregoing; or (v) admits in writing its
inability to, or is generally unable to, pay its debts as such debts become due.
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(j) A final judgment or judgments for the payment of money in excess
of $500,000 (in excess of amounts covered by insurance, in instances as to which
the insurance carrier has acknowledged coverage) in the aggregate at any time
are outstanding against one or more of the Credit Parties and the same are not,
within 30 days after the entry thereof, discharged or execution thereof stayed
or bonded pending appeal, or such judgments are not discharged prior to the
expiration of any such stay.
(k) Any material provision of any Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms (or any Credit
Party shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien
created under any Loan Document ceases to be a valid and perfected first
priority Lien (except as otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any Borrower's on-the-air broadcast operations at any Radio
Station shall be interrupted at any time for more than forty-eight (48) hours,
whether or not consecutive, during any period of five (5) consecutive days, and
such interruption could reasonably be expected to have a Material Adverse
Effect.
(n) [Intentionally Omitted].
(o) Any material License (other than any Excluded FCC Licenses),
shall be cancelled, terminated, rescinded, revoked, suspended, impaired,
otherwise finally denied renewal, or otherwise modified in any material adverse
respect, or shall be renewed on terms that materially and adversely affect the
economic or commercial value or usefulness thereof; or any material License
(other than any Excluded FCC Licenses) shall cease to be in full force and
effect; or the grant of any material License shall have been stayed, vacated or
reversed, or modified in any material adverse respect by judicial or
administrative proceedings; or any administrative law judge or other
representative of the FCC shall have issued an initial decision in any
non-comparative material License renewal, material License revocation or any
comparative (multiple applicant) proceeding to the effect that any material
License should be revoked or not be renewed; or any other proceeding shall have
been instituted by or shall have been commenced before any court, the FCC or any
other regulatory body that could reasonably be expected to, individually or in
the aggregate, result in (i) cancellation, termination, rescission, revocation,
material impairment, suspension or denial of renewal of a material License
affecting a Major Market Radio Station, or (ii) a modification of a material
License affecting a Major Market Radio Station in a material adverse respect or
a renewal thereof on terms that materially and adversely affect the economic or
commercial value or usefulness thereof.
(p) There occurs an Event of Default (as defined by the RUC
Indenture) by RUC or any guarantor under the RUC Indenture.
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8.2 REMEDIES.
(a) If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, suspend the Revolving Loan facility with respect to
additional Advances and/or the incurrence of additional Letter of Credit
Obligations, whereupon any additional Advances and additional Letter of Credit
Obligations shall be made or incurred in Agent's sole discretion (or in the sole
discretion of the Requisite Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Default or Event of Default has occurred and is continuing, Agent may (and at
the written request of Requisite Lenders shall), without notice except as
otherwise expressly provided herein, increase the rate of interest applicable to
the Loans and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), without notice: (i)
terminate the Revolving Loan facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in ANNEX B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by each
Borrower and each other Credit Party; or (iii) exercise any rights and remedies
provided to Agent under the Loan Documents or at law or equity, including all
remedies provided under the Code; PROVIDED, that upon the occurrence of an Event
of Default specified in SECTIONS 8.1(h) OR (i), the Revolving Loan facility
shall be immediately terminated and all of the Obligations, including the
aggregate Revolving Loan, shall become immediately due and payable without
declaration, notice or demand by any Person.
8.3 WAIVERS BY CREDIT PARTIES.
Except as otherwise provided for in this Agreement or by applicable
law, each Credit Party waives (including for purposes of SECTION 12): (a)
presentment, demand and protest and notice of presentment, dishonor, notice of
intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which any Credit Party may in
any way be liable, and hereby ratifies and confirms whatever Agent may do in
this regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 ASSIGNMENT AND PARTICIPATIONS.
(a) Subject to the terms of this SECTION 9.1, any Lender may make an
assignment to a Qualified Assignee of, or sell participations in, at any time or
times, the Loan
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Documents, Loans, Letter of Credit Obligations and any Commitment or any portion
thereof or interest therein, including any Lender's rights, title, interests,
remedies, powers or duties thereunder. Any assignment by a Lender shall: (i)
require the consent of Agent (which consent shall not be unreasonably withheld
or delayed with respect to a Qualified Assignee) and the execution of an
assignment agreement (an "ASSIGNMENT AGREEMENT") substantially in the form
attached hereto as EXHIBIT 9.1(a) and otherwise in form and substance reasonably
satisfactory to, and acknowledged by, Agent; (ii) be conditioned on such
assignee Lender representing to the assigning Lender and Agent that it is
purchasing the applicable Loans to be assigned to it for its own account, for
investment purposes and not with a view to the distribution thereof; (iii) after
giving effect to any such partial assignment, the assignee Lender shall have
Commitments in an amount at least equal to $2,500,000 and the assigning Lender
shall have retained Commitments in an amount at least equal to $5,000,000; and
(iv) include a payment to Agent of an assignment fee of $3,500. In the case of
an assignment by a Lender under this SECTION 9.1, the assignee shall have, to
the extent of such assignment, the same rights, benefits and obligations as all
other Lenders hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned portion
thereof from and after the date of such assignment. Each Borrower hereby
acknowledges and agrees that any assignment shall give rise to a direct
obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, Agent
or any such Lender shall so notify Borrowers and Borrowers shall, upon the
request of Agent or such Lender, execute new Notes in exchange for the Notes, if
any, being assigned. Notwithstanding the foregoing provisions of this SECTION
9.1(a), any Lender may at any time pledge the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor; PROVIDED, that no such pledge to a Federal Reserve Bank shall release
such Lender from such Lender's obligations hereunder or under any other Loan
Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of SECTIONS 1.13,
1.15, 1.16 AND 9.8, each Borrower acknowledges and agrees that a participation
shall give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence no Borrower nor any Credit Party shall have any obligation or
duty to any participant. Neither Agent nor any Lender (other than the
46
Lender selling a participation) shall have any duty to any participant and may
continue to deal solely with the Lender selling a participation as if no such
sale had occurred.
(c) Except as expressly provided in this SECTION 9.1, no Lender
shall, as between Borrowers and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this SECTION 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their respective affairs contained in any selling materials provided by them
and all other information provided by them and included in such materials,
except that any Projections delivered by Borrowers shall only be certified by
Borrowers as having been prepared by Borrowers in compliance with the
representations contained in SECTION 3.4(c).
(e) Any Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); PROVIDED that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in SECTION 11.8.
(f) [Intentionally Reserved.]
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "GRANTING LENDER"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrowers, the option to provide to Borrowers all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrowers pursuant
to this Agreement; PROVIDED THAT (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrowers and Agent assign all or a portion of its interests in any
Loans to the Granting Lender or to any financial institutions (consented to by
Borrowers and Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This SECTION 9.1(g)
may not be amended without the prior written
47
consent of each Granting Lender, all or any of whose Loans are being funded by
an SPC at the time of such amendment. For the avoidance of doubt, the Granting
Lender shall for all purposes, including without limitation, the approval of any
amendment or waiver of any provision of any Loan Document or the obligation to
pay any amount otherwise payable by the Granting Lender under the Loan
Documents, continue to be the Lender of record hereunder.
9.2 APPOINTMENT OF AGENT.
GE Capital is hereby appointed to act on behalf of all Lenders as
Agent under this Agreement and the other Loan Documents. The provisions of this
SECTION 9.2 are solely for the benefit of Agent and Lenders and no Credit Party
nor any other Person shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person. Agent shall have no duties or responsibilities except
for those expressly set forth in this Agreement and the other Loan Documents.
The duties of Agent shall be mechanical and administrative in nature and Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Except as expressly set forth in this Agreement and the other Loan Documents,
Agent shall not have any duty to disclose, and shall not be liable for failure
to disclose, any information relating to any Credit Party or any of their
respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders,
Supermajority Lenders or all affected Lenders with respect to any act or action
(including failure to act) in connection with this Agreement or any other Loan
Document, then Agent shall be entitled to refrain from such act or taking such
action unless and until Agent shall have received instructions from Requisite
Lenders, Supermajority Lenders or all affected Lenders, as the case may be, and
Agent shall not incur liability to any Person by reason of so refraining. Agent
shall be fully justified in failing or refusing to take any action hereunder or
under any other Loan Document (a) if such action would, in the opinion of Agent,
be contrary to law or the terms of this Agreement or any other Loan Document,
(b) if such action would, in the opinion of Agent, expose Agent to Environmental
Liabilities or (c) if Agent shall not first be indemnified to its satisfaction
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. Without limiting the foregoing,
no Lender shall have any right of action whatsoever against Agent as a result of
Agent acting or refraining from acting hereunder or under any other Loan
Document in accordance with the instructions of Requisite Lenders, Supermajority
Lenders or all affected Lenders, as applicable.
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9.3 AGENT'S RELIANCE, ETC.
Neither Agent nor any of its Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for damages caused by its or their own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, Agent: (a) may treat the payee of any Note as the holder thereof
until Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form reasonably satisfactory to Agent; (b) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or the other Loan Documents; (d) shall
not have any duty to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of any Credit Party or to inspect the Collateral
(including the books and records) of any Credit Party; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; and (f) shall incur no liability under or in respect of this Agreement
or the other Loan Documents by acting upon any notice, consent, certificate or
other instrument or writing (which may be by telecopy, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
9.4 GE CAPITAL AND AFFILIATES.
With respect to its Commitments hereunder, GE Capital shall have the
same rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include GE
Capital in its individual capacity. GE Capital and its Affiliates may lend money
to, invest in, and generally engage in any kind of business with, any Credit
Party, any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital were
not Agent and without any duty to account therefor to Lenders. GE Capital and
its Affiliates may accept fees and other consideration from any Credit Party for
services in connection with this Agreement or otherwise without having to
account for the same to Lenders. Each Lender acknowledges the potential conflict
of interest between GE Capital as a Lender holding disproportionate interests in
the Loans and GE Capital as Agent.
9.5 LENDER CREDIT DECISION.
Each Lender acknowledges that it has, independently and without
reliance upon Agent or any other Lender and based on the Financial Statements
referred to in SECTION 3.4(a) and such other documents and information as it has
deemed appropriate, made its own credit and financial analysis of the Credit
Parties and its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any
49
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement. Each Lender acknowledges the potential
conflict of interest of each other Lender as a result of Lenders holding
disproportionate interests in the Loans, and expressly consents to, and waives
any claim based upon, such conflict of interest.
9.6 INDEMNIFICATION.
Lenders agree to indemnify Agent (to the extent not reimbursed by
Credit Parties and without limiting the obligations of Credit Parties
hereunder), ratably according to their respective Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; PROVIDED, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Agent is not
reimbursed for such expenses by Credit Parties.
9.7 SUCCESSOR AGENT.
Agent may resign at any time by giving not less than 30 days' prior
written notice thereof to Lenders and Borrower Representative. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Requisite
Lenders and shall have accepted such appointment within 30 days after the
resigning Agent's giving notice of resignation, then the resigning Agent may, on
behalf of Lenders, appoint a successor Agent, which shall be a Lender, if a
Lender is willing to accept such appointment, or otherwise shall be a commercial
bank or financial institution or a subsidiary of a commercial bank or financial
institution if such commercial bank or financial institution is organized under
the laws of the United States of America or of any State thereof and has a
combined capital and surplus of at least $500,000,000. If no successor Agent has
been appointed pursuant to the foregoing, within 30 days after the date such
notice of resignation was given by the resigning Agent, such resignation shall
become effective and the Requisite Lenders shall thereafter perform all the
duties of Agent hereunder until such time, if any, as the Requisite Lenders
appoint a successor Agent as provided above. Any successor Agent appointed by
Requisite Lenders hereunder shall be subject to the approval of Borrower
Representative, such approval not to be unreasonably withheld or delayed;
PROVIDED that such approval shall not be required if a Default or an Event of
Default has occurred and is continuing. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the earlier of the acceptance of any appointment as Agent
hereunder by a successor
50
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this SECTION 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was acting
as Agent under this Agreement and the other Loan Documents.
9.8 SETOFF AND SHARING OF PAYMENTS.
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 and subject to SECTION 9.9(f),
each Lender is hereby authorized at any time or from time to time, without
notice to any Credit Party or to any other Person, any such notice being hereby
expressly waived, to offset and to appropriate and to apply any and all balances
held by it at any of its offices for the account of any Borrower or any
Guarantor (regardless of whether such balances are then due to such Borrower or
Guarantor) and any other properties or assets at any time held or owing by that
Lender or that holder to or for the credit or for the account of any Borrower or
any Guarantor against and on account of any of the Obligations that are not paid
when due. Any Lender exercising a right of setoff or otherwise receiving any
payment on account of the Obligations in excess of its Pro Rata Share thereof
shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
offset or otherwise received with each other Lender or holder in accordance with
their respective Pro Rata Shares (other than offset rights exercised by any
Lender with respect to SECTIONS 1.13, 1.15 OR 1.16). Each Borrower and each
Guarantor agrees, to the fullest extent permitted by law, that (a) any Lender
may exercise its right to offset with respect to amounts in excess of its Pro
Rata Share of the Obligations and may sell participations in such amounts so
offset to other Lenders and holders and (b) any Lender so purchasing a
participation in the Loans made or other Obligations held by other Lenders or
holders may exercise all rights of offset, bankers' lien, counterclaim or
similar rights with respect to such participation as fully as if such Lender or
holder were a direct holder of the Loans and the other Obligations in the amount
of such participation. Notwithstanding the foregoing, if all or any portion of
the offset amount or payment otherwise received is thereafter recovered from the
Lender that has exercised the right of offset, the purchase of participations by
that Lender shall be rescinded and the purchase price restored without interest.
9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION; ACTIONS IN
CONCERT.
(a) ADVANCES; PAYMENTS.
(i) Agent shall notify Lenders, promptly after receipt of a
Notice of Revolving Credit Advance and in any event prior to 1:00 p.m. (
New York
time) on the date such Notice of Revolving Advance is received, by telecopy,
telephone or other similar form of transmission. Each Lender shall make the
amount of such Lender's Pro Rata Share of such Revolving Credit Advance
available to Agent in same day funds by wire transfer to Agent's
51
account as set forth in ANNEX H not later than 3:00 p.m. (
New York time) on the
requested funding date, in the case of an Index Rate Loan, and not later than
11:00 a.m. (New York time) on the requested funding date, in the case of a LIBOR
Loan. After receipt of such wire transfers (or, in the Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof, Agent shall
make the requested Revolving Credit Advance to the Borrower designated by
Borrower Representative in the Notice of Revolving Credit Advance. All payments
by each Lender shall be made without setoff, counterclaim or deduction of any
kind.
(ii) On the 2nd Business Day of each calendar week or more
frequently at Agent's election (each, a "SETTLEMENT DATE"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent shall pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrowers since
the previous Settlement Date for the benefit of such Lender on the Loans held by
it. To the extent that any Lender (a "NON-FUNDING LENDER") has failed to fund
all such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
Borrowers. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in ANNEX H or the applicable Assignment Agreement)
not later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
(b) AVAILABILITY OF LENDER'S PRO RATA SHARE. Agent may assume that
each Lender will make its Pro Rata Share of each Revolving Credit Advance
available to Agent on each funding date. If such Pro Rata Share is not, in fact,
paid to Agent by such Lender when due, Agent will be entitled to recover such
amount on demand from such Lender without setoff, counterclaim or deduction of
any kind. If any Lender fails to pay the amount of its Pro Rata Share forthwith
upon Agent's demand, Agent shall promptly notify Borrower Representative and
Borrowers shall immediately repay such amount to Agent. Nothing in this SECTION
9.9(b) or elsewhere in this Agreement or the other Loan Documents shall be
deemed to require Agent to advance funds on behalf of any Lender or to relieve
any Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Borrowers may have against any Lender as a result of
any default by such Lender hereunder. To the extent that Agent advances funds to
any Borrower on behalf of any Lender and is not reimbursed therefor on the same
Business Day as such Advance is made, Agent shall be entitled to retain for its
account all interest accrued on such Advance until reimbursed by the applicable
Lender.
(c) RETURN OF PAYMENTS.
(i) If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be received
by Agent from Borrowers and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
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(ii) If Agent determines at any time that any amount received
by Agent under this Agreement must be returned to any Borrower or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, Agent
will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to any Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
(d) NON-FUNDING LENDERS. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder shall
not relieve any other Lender (each such other Lender, an "OTHER LENDER") of its
obligations to make such Advance or purchase such participation on such date,
but neither any Other Lender nor Agent shall be responsible for the failure of
any Non-Funding Lender to make an Advance, purchase a participation or make any
other payment required hereunder. Notwithstanding anything set forth herein to
the contrary, a Non-Funding Lender shall not have any voting or consent rights
under or with respect to any Loan Document or constitute a "Lender" (or be
included in the calculation of "Requisite Lenders" or "Supermajority Lenders"
hereunder) for any voting or consent rights under or with respect to any Loan
Document. At Borrower Representative's request, Agent or a Person reasonably
acceptable to Agent shall have the right with Agent's consent and in Agent's
sole discretion (but shall have no obligation) to purchase from any Non-Funding
Lender, and each Non-Funding Lender agrees that it shall, at Agent's request,
sell and assign to Agent or such Person, all of the Commitments of that
Non-Funding Lender for an amount equal to the principal balance of all Loans
held by such Non-Funding Lender and all accrued interest and fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement.
(e) DISSEMINATION OF INFORMATION. Agent shall use reasonable efforts
to provide Lenders with any notice of Default or Event of Default received by
Agent from, or delivered by Agent to, any Credit Party, with notice of any Event
of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Event of Default; PROVIDED, that Agent shall
not be liable to any Lender for any failure to do so, except to the extent that
such failure is attributable to Agent's gross negligence or willful misconduct.
Lenders acknowledge that Borrowers are required to provide Financial Statements
and Collateral Reports to Lenders in accordance with ANNEXES E AND F hereto and
agree that Agent shall have no duty to provide the same to Lenders.
(f) ACTIONS IN CONCERT. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
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10. SUCCESSORS AND ASSIGNS
10.1 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in SECTION 11.2. Any letter of interest, commitment letter, or fee letter
(other than the GE Capital Fee Letter) or confidentiality agreement, if any,
between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2 AMENDMENTS AND WAIVERS.
(a) Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrowers, and by Requisite Lenders,
Supermajority Lenders or all affected Lenders, as applicable. Except as set
forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement that waives compliance with the
conditions precedent set forth in SECTION 2.2 to the making of any Loan or the
incurrence of any Letter of Credit Obligations shall be effective unless the
same shall be in writing and signed by Agent, Requisite Lenders and Borrowers.
Notwithstanding anything contained in this Agreement to the contrary, no waiver
or consent with respect to any Default or any Event of Default shall be
effective for purposes of the conditions precedent to the making of Loans or the
incurrence of Letter of Credit Obligations set forth in SECTION 2.2 and SECTION
2.3 unless the same shall be in writing and signed by Agent, Requisite Lenders
and Borrowers.
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(c) No amendment, modification, termination or waiver shall, unless
in writing and signed by Agent and each Lender directly affected thereby: (i)
increase the principal amount of any Lender's Commitment (which action shall be
deemed to directly affect all Lenders (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
(other than payment dates of mandatory prepayments under SECTION
1.3(b)(ii)-(iv)) or final maturity date of the principal amount of any Loan of
any affected Lender; (iv) waive, forgive, defer, extend or postpone any payment
of interest or Fees as to any affected Lender; (v) release any Guaranty or,
except as otherwise permitted herein or in the other Loan Documents, release, or
permit any Credit Party to sell or otherwise dispose of, any Collateral with a
value exceeding $5,000,000 in the aggregate (which action shall be deemed to
directly affect all Lenders); (vi) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this SECTION 11.2 or the definitions of the terms "Requisite Lenders", or
"Supermajority Lenders" insofar as such definitions affect the substance of this
SECTION 11.2. Furthermore, no amendment, modification, termination or waiver
affecting the rights or duties of Agent or L/C Issuer under this Agreement or
any other Loan Document shall be effective unless in writing and signed by Agent
or L/C Issuer, as the case may be, in addition to Lenders required hereinabove
to take such action. Each amendment, modification, termination or waiver shall
be effective only in the specific instance and for the specific purpose for
which it was given. No amendment, modification, termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan Document.
No amendment, modification, termination or waiver of any provision of any Note
shall be effective without the written concurrence of the holder of that Note.
No notice to or demand on any Credit Party in any case shall entitle such Credit
Party or any other Credit Party to any other or further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this SECTION 11.2 shall be binding upon
each holder of the Notes at the time outstanding and each future holder of the
Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "PROPOSED CHANGE"):
(i) requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this CLAUSE (i) and in CLAUSES (ii), (iii) and (iv)
below being referred to as a "NON-CONSENTING LENDER"),
(ii) requiring the consent of Supermajority Lenders, the
consent of Requisite Lenders is obtained, but the consent of Supermajority
Lenders is not obtained,
(iii) requiring the consent of Requisite Lenders, the consent
of Lenders holding 51% or more of the aggregate Commitments is obtained, but the
consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative's request, Agent or a Person reasonably acceptable to Agent shall
have the right with Agent's
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consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all
accrued interest and Fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrowers termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
11.3 FEES AND EXPENSES.
Borrowers shall reimburse (i) Agent for all fees, costs and expenses
(including the reasonable fees and expenses of all of its counsel, advisors,
consultants and auditors) and (ii) Agent (and, with respect to CLAUSES (c) and
(d) below, all Lenders) for all fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel or other advisors (including
environmental and management consultants and appraisers), incurred in connection
with the negotiation and preparation of the Loan Documents and incurred in
connection with:
(a) the forwarding to Borrowers or any other Person on behalf of
Borrowers by Agent of the proceeds of any Loan (including a wire transfer fee of
$25 per wire transfer);
(b) any amendment, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or advice in connection with
the syndication and administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, a Borrower or any other Person and
whether as a party, witness or otherwise) in any way relating to the Collateral,
any of the Loan Documents or any other agreement to be executed or delivered in
connection herewith or therewith, including any litigation, contest, dispute,
suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against either or both of the Borrowers
or any other Person that may be obligated to Agent by virtue of the Loan
Documents; including any such litigation, contest, dispute, suit, proceeding or
action arising in connection with any work-out or restructuring of the Loans
during the pendency of one or more Events of Default; PROVIDED that in the case
of reimbursement of counsel for Lenders other than Agent, such reimbursement
shall be limited to one counsel for all such Lenders; PROVIDED, further, that no
Person shall be entitled to reimbursement under this clause (c) in respect of
any litigation, contest, dispute, suit, proceeding or action to the extent any
of the foregoing results from such Person's gross negligence or willful
misconduct;
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(d) any attempt to enforce any remedies of Agent against any or all
of the Credit Parties or any other Person that may be obligated to Agent or any
Lender by virtue of any of the Loan Documents, including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; PROVIDED, that in
the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the pendency of
one or more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral; including, as to each
of clauses (a) through (f) above, all reasonable attorneys' and other
professional and service providers' fees arising from such services and other
advice, assistance or other representation, including those in connection with
any appellate proceedings, and all expenses, costs, charges and other fees
incurred by such counsel and others in connection with or relating to any of the
events or actions described in this SECTION 11.3, all of which shall be payable,
on demand, by Borrowers to Agent. Without limiting the generality of the
foregoing, such expenses, costs, charges and fees may include: fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and expenses for travel, lodging and food
paid or incurred in connection with the performance of such legal or other
advisory services.
11.4 NO WAIVER.
Agent's or any Lender's failure, at any time or times, to require
strict performance by the Credit Parties of any provision of this Agreement or
any other Loan Document shall not waive, affect or diminish any right of Agent
or such Lender thereafter to demand strict compliance and performance herewith
or therewith. Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the
provisions of SECTION 11.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit Party contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by Agent or any Lender,
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Agent and the applicable required
Lenders, and directed to Borrowers specifying such suspension or waiver.
11.5 REMEDIES.
Agent's and Lenders' rights and remedies under this Agreement shall be
cumulative and nonexclusive of any other rights and remedies that Agent or any
Lender may
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have under any other agreement, including the other Loan Documents, by operation
of law or otherwise. Recourse to the Collateral shall not be required.
11.6 SEVERABILITY.
Wherever possible, each provision of this Agreement and the other Loan
Documents shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement or any other Loan
Document shall be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining provisions
of this Agreement or such other Loan Document.
11.7 CONFLICT OF TERMS.
Except as otherwise provided in this Agreement or any of the other
Loan Documents by specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement conflicts with any
provision in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
11.8 CONFIDENTIALITY.
Agent and each Lender agree to use commercially reasonable efforts
(equivalent to the efforts Agent or such Lender applies to maintaining the
confidentiality of its own confidential information) to maintain as confidential
all confidential information provided to them by the Credit Parties and
designated as confidential for a period of 2 years following receipt thereof,
except that Agent and any Lender may disclose such information (a) to Persons
employed or engaged by Agent or such Lender; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this SECTION 11.8 (and any such bona fide assignee or
participant or potential assignee or participant may disclose such information
to Persons employed or engaged by them as described in CLAUSE (a) above); (c) as
required or requested by any Governmental Authority or reasonably believed by
Agent or such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Agent's or such
Lender's counsel, is required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any Litigation to
which Agent or such Lender is a party; or (f) that ceases to be confidential
through no fault of Agent or any Lender.
11.9 GOVERNING LAW.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS,
IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA.
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EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT
PARTIES, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY ▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇; PROVIDED FURTHER, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE
ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF
OR 3 DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10 NOTICES.
Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered: (a) upon the earlier of actual receipt and 3 Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by
telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this SECTION 11.10); (c) 1 Business
Day after deposit with a reputable overnight courier with all charges prepaid or
(d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or
59
facsimile number indicated in ANNEX I or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person (other than Borrower Representative or Agent) designated in ANNEX I to
receive copies shall in no way adversely affect the effectiveness of such
notice, demand, request, consent, approval, declaration or other communication.
11.11 SECTION TITLES.
The Section titles and Table of Contents contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
11.12 COUNTERPARTS.
This Agreement may be executed in any number of separate counterparts,
each of which shall collectively and separately constitute one agreement.
11.13 WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
11.14 PRESS RELEASES AND RELATED MATTERS.
Each Credit Party executing this Agreement agrees that neither it nor
its Affiliates will in the future issue any press releases or other public
disclosure using the name of GE Capital or its affiliates or referring to this
Agreement, the other Loan Documents without at least 2 Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital before issuing such press release or other public disclosure.
Each Credit Party consents to the publication by
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Agent or any Lender of a tombstone or similar advertising material relating to
the financing transactions contemplated by this Agreement. Agent reserves the
right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.
11.15 REINSTATEMENT.
This Agreement shall remain in full force and effect and continue to
be effective should any petition be filed by or against any Borrower for
liquidation or reorganization, should any Borrower become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of any Borrower's assets,
and shall continue to be effective or to be reinstated, as the case may be, if
at any time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
11.16 ADVICE OF COUNSEL.
Each of the parties represents to each other party hereto that it has
discussed this Agreement and, specifically, the provisions of SECTIONS 11.9 and
11.13, with its counsel.
11.17 NO STRICT CONSTRUCTION.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
11.18 FCC APPROVALS. Notwithstanding anything herein or in any other
Loan Documents to the contrary, to the extent this Agreement or any other Loan
Document purports to require any Credit Party to grant to Agent, on behalf and
for the ratable benefit of Lenders, a security interest in the FCC Licenses of
such Credit Party, Agent, on behalf and for the ratable benefit of Lenders,
shall only have a security interest in such FCC licenses at such times and to
the extent that a security interest in such FCC licenses is permitted under
Applicable Law. Notwithstanding anything herein or in any other Loan Documents,
but without limiting or waiving in any way the Obligations of the Parent, the
Borrowers or any Credit Party, as the case may be, hereunder or thereunder, the
Agent's and Lenders' rights hereunder are subject to the Communications Act. The
Agent (on behalf of Lenders) and the Lenders will not take any action pursuant
to this Agreement which would constitute or result in any assignment or transfer
of control of any FCC License, whether de jure or de facto, if such assignment
or transfer of control would require under then existing law (including the
Communications Act), the prior approval of the FCC or any Governmental
Authority, without first obtaining such approval. Each of the
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Parent, Borrowers and any Credit Party, as the case may be, shall take any
action which Agent may reasonably request in order to cause Agent (on behalf of
the Lenders) and the Lenders to obtain and enjoy the full rights and benefits
granted by this Agreement and the Guarantees, including specifically, at the
cost and expense of the Parent, the Borrowers and any Credit Party, shall assist
in obtaining the approval of the FCC or other Governmental Authority for an
action or transaction contemplated by this Agreement or the Guarantees which are
then required by law, and specifically, without limitation, upon request upon
and during the continuance of an Event of Default, shall prepare, sign (or the
electronic equivalent thereof) and file (or cause to be filed) with the FCC or
other Governmental Authority the assignor's, transferor's or controlling
person's portion of any application or applications for consent to (i) the
assignment of any FCC License or transfer of control thereof, (ii) any sale of
property constituting Collateral by Agent on behalf of Lenders, or (iii) any
assignment by Agent, the Lenders or their designees of voting rights or
management rights in property constituting any Collateral effected in accordance
with the terms of this Agreement or any other Loan Documents, and thereafter
shall vigorously prosecute such application or applications.
12. CROSS-GUARANTY
12.1 CROSS-GUARANTY. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to Agent
and Lenders by each and every other Borrower. Each Borrower agrees that its
guaranty obligation hereunder is a continuing guaranty of payment and
performance and not of collection, that its obligations under this SECTION 12
shall not be discharged until payment and performance, in full, of the
Obligations has occurred, and that its obligations under this SECTION 12 shall
be absolute and unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this SECTION 12) or any other Loan Document or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by Agent and Lenders in respect thereof (including the release of
any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor.
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Each Borrower shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.
12.2 WAIVERS BY BORROWERS. Each Borrower expressly waives all rights
it may have now or in the future under any statute, or at common law, or at law
or in equity, or otherwise, to compel Agent or Lenders to ▇▇▇▇▇▇▇▇ assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this SECTION 12 and such waivers, Agent and Lenders would
decline to enter into this Agreement.
12.3 BENEFIT OF GUARANTY. Each Borrower agrees that the provisions of
this SECTION 12 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.
12.4 SUBORDINATION OF SUBROGATION, ETC. Notwithstanding anything to
the contrary in this Agreement or in any other Loan Document, and except as set
forth in SECTION 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are indefeasibly paid in full in
cash. Each Borrower acknowledges and agrees that this subordination is intended
to benefit Agent and Lenders and shall not limit or otherwise affect such
Borrower's liability hereunder or the enforceability of this SECTION 12, and
that Agent, Lenders and their respective successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in this
SECTION 12.4.
12.5 ELECTION OF REMEDIES. If Agent or any Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving Agent or such Lender a Lien upon any Collateral, whether owned by a
Borrower or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this SECTION 12. If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against a Borrower
or any other Person, whether because of any applicable laws pertaining to
"election of remedies" or the like, each Borrower hereby consents to such action
by Agent or such Lender and waives any claim based upon such action, even if
such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Borrower might otherwise have had but for
such action by Agent or such Lender. Any election of remedies that results in
the denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against a Borrower shall not impair any other Borrower's
obligation to pay the full amount of the Obligations. In the event Agent or any
Lender shall bid at any foreclosure or trustee's sale or at any private sale
permitted by law or the Loan Documents, Agent or such
63
Lender may bid all or less than the amount of the Obligations and the amount of
such bid need not be paid by Agent or such Lender but shall be credited against
the Obligations. The amount of the successful bid at any such sale, whether
Agent, Lender or any other party is the successful bidder, shall be conclusively
deemed to be the fair market value of the Collateral and the difference between
such bid amount and the remaining balance of the Obligations shall be
conclusively deemed to be the amount of the Obligations guaranteed under this
SECTION 12, notwithstanding that any present or future law or court decision or
ruling may have the effect of reducing the amount of any deficiency claim to
which Agent or any Lender might otherwise be entitled but for such bidding at
any such sale.
12.6 LIMITATION. Notwithstanding any provision herein contained to the
contrary, each Borrower's liability under this SECTION 12 (which liability is in
any event in addition to amounts for which such Borrower is primarily liable
under SECTION 1) shall be limited to an amount not to exceed as of any date of
determination the greater of:
(a) the net amount of all Loans advanced to each other Borrower under
this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrowers; and
(b) the amount that could be claimed by Agent and Lenders from such
Borrowers under this SECTION 12 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Borrowers' right of contribution and indemnification from the other
Borrowers under SECTION 12.7.
12.7 CONTRIBUTION WITH RESPECT TO GUARANTY OBLIGATIONS.
(a) To the extent that any Borrower shall make a payment under this
SECTION 12 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "GUARANTOR PAYMENT") that, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower's "Allocable Amount"
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, the other Borrowers for the
amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of each
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this SECTION 12 without rendering such claim
voidable or avoidable under
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Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
statute or common law.
(c) This SECTION 12.7 is intended only to define the relative rights
of Borrowers and nothing set forth in this SECTION 12.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including SECTION 12.1. Nothing contained in this SECTION
12.7 shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, Fees and expenses with respect
thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Borrower to which
such contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Credit
Parties under this SECTION 12.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
12.8 LIABILITY CUMULATIVE. The liability of Borrowers under this
SECTION 12 is in addition to and shall be cumulative with all liabilities of
each Borrower to Agent and Lenders under this Agreement and the other Loan
Documents to which such Borrower is a party or in respect of any Obligations or
obligation of the other Borrowers, without any limitation as to amount, unless
the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
[SIGNATURES FOLLOW ON NEXT PAGE]
65
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
RADIO UNICA CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BLAYA INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ORO SPANISH BROADCASTING, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA NETWORK, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF CHICAGO, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
66
RADIO UNICA OF CHICAGO LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF DALLAS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF DALLAS LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF DENVER, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF DENVER LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF FRESNO, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
67
RADIO UNICA OF FRESNO LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF HOUSTON LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF LOS ANGELES, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF LOS ANGELES LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF McALLEN, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF McALLEN LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
68
RADIO UNICA OF MIAMI, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF MIAMI LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF NEW YORK, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF NEW YORK LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF PHOENIX, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF PHOENIX LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
69
RADIO UNICA OF SACRAMENTO, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF SACRAMENTO LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF SAN ANTONIO, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF SAN ANTONIO LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF SAN DIEGO, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF SAN DIEGO LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
70
RADIO UNICA OF SAN FRANCISCO, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF SAN FRANCISCO LICENSE
CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA SALES CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF TUCSON, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RADIO UNICA OF TUCSON LICENSE CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MASS PROMOTIONS, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
71
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
By:
-------------------------------------
Duly Authorized Signatory
72
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrowers.
RADIO UNICA COMMUNICATIONS CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
73
ANNEX 1
Blaya Inc.
Oro Spanish Broadcasting, Inc.
Radio Unica Network, Inc.
Radio Unica of Chicago, Inc.
Radio Unica of Chicago License Corp.*
Radio Unica of Dallas, Inc.
Radio Unica of Dallas License Corp.*
Radio Unica of Denver, Inc.
Radio Unica of Denver License Corp.*
Radio Unica of Fresno, Inc.
Radio Unica of Fresno License Corp.*
Radio Unica of Houston License Corp.*
Radio Unica of Los Angeles, Inc.
Radio Unica of Los Angeles License Corp.*
Radio Unica of McAllen, Inc.
Radio Unica of McAllen License Corp.*
Radio Unica of Miami, Inc.
Radio Unica of Miami License Corp.*
Radio Unica of New York, Inc.
Radio Unica of New York License Corp.*
Radio Unica of Phoenix, Inc.
Radio Unica of Phoenix License Corp.*
Radio Unica of Sacramento, Inc.
Radio Unica of Sacramento License Corp.*
Radio Unica of San Antonio, Inc.
Radio Unica of San Antonio License Corp.*
Radio Unica of San Diego, Inc.
Radio Unica of San Diego License Corp.*
Radio Unica of San Francisco, Inc.
Radio Unica of San Francisco License Corp.*
Radio Unica Sales Corp.
Radio Unica of Tucson, Inc.
Radio Unica of Tucson License Corp.*
Mass Promotions, Inc.
* Indicates such Credit Party is a License Sub.
1-1
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"ACCOUNT DEBTOR" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"ACCOUNTING CHANGES" has the meaning ascribed thereto in ANNEX G.
"ACCOUNTS" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, Documents or Instruments),
(including any such obligations that may be characterized as an account or
contract right under the Code), (b) all of each Credit Party's rights in, to and
under all purchase orders or receipts for goods or services, (c) all of each
Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), and (e) all collateral security of any kind, given by any
Account Debtor or any other Person with respect to any of the foregoing.
"ADVANCE" means any Revolving Credit Advance.
"AFFILIATE" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrowers, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of a Borrower. For the purposes of
this definition, "CONTROL" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management
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or policies, whether through the ownership of voting securities, by contract or
otherwise; PROVIDED, HOWEVER, that the term "AFFILIATE" shall specifically
exclude Agent and each Lender.
"AGENT" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to SECTION 9.7.
"AGREEMENT" means the
Credit Agreement by and among Borrowers, the
other Credit Parties party thereto, GE Capital, as Agent and Lender and the
other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"APPENDICES" has the meaning ascribed to it in the recitals to the
Agreement.
"ASSIGNMENT AGREEMENT" has the meaning ascribed to it in SECTION
9.1(a).
"BANKRUPTCY CODE" means the provisions of Title 11 of the United
States Code, 11 U.S.C.Sections 101 ET SEQ., as now constituted or hereafter
amended.
"BLOCKED ACCOUNTS" has the meaning ascribed to it in ANNEX C.
"BORROWERS" and "BORROWER" have the respective meanings ascribed
thereto in the preamble to the Agreement.
"BORROWER PLEDGE AGREEMENTS" means the pledge agreements of even date
herewith executed by each Borrower in favor of Agent, on behalf of itself and
Lenders, pledging all Stock of its respective Subsidiaries, if any.
"BORROWER REPRESENTATIVE" means RUC in its capacity as Borrower
Representative pursuant to the provisions of SECTION 1.1(c).
"BORROWING AVAILABILITY" means as of any date of determination, the
Maximum Amount MINUS the sum of the Revolving Credit Advances then outstanding
(including Letter of Credit Obligations) MINUS the Reserves.
"BROADCAST CASH FLOW" means, with respect to Borrowers (other than
MASS) for any fiscal period, without duplication, an amount equal to (x) Radio
Station Revenues for such period, MINUS, (y) the sum of radio station and
network expenses, including (i) selling expenses, (ii) cost of sales and (iii)
general and administrative expenses at the radio station level (but not the
corporate level).
"BUSINESS DAY" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State of New York
and in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"CAPITAL EXPENDITURES" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring
A-2
period for any fixed assets, including those acquired in a Permitted
Acquisition, or improvements or for replacements, substitutions or additions
thereto that have a useful life of more than one year and that are required to
be capitalized under GAAP.
"CAPITAL LEASE" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"CAPITAL LEASE OBLIGATION" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"CASH COLLATERAL ACCOUNT" has the meaning ascribed to it ANNEX B.
"CASH EQUIVALENTS" has the meaning ascribed to it in ANNEX B.
"CASH MANAGEMENT SYSTEMS" has the meaning ascribed to it in SECTION
1.8.
"CHANGE OF CONTROL" means any event, transaction or occurrence, as a
result of which (a) Warburg Pincus Ventures, L.P., any successor funds thereto
or any related entity which satisfies the requirements of clause (b) of the
definition of Affiliate, together with any officer or director of Parent on the
Closing Date (and any spouse and any trust, holding company, or similar entity
established by and controlled by any of such individuals for the principal
benefit of them or their spouses, lineal descendants or other family members),
collectively, cease to own and control all of the economic and voting rights
associated with ownership of at least 50.1% of the outstanding capital Stock of
all classes of Parent on a fully diluted basis, (b) Parent ceases to own and
control all of the economic and voting rights associated with ownership of at
least one hundred percent (100%) of the outstanding capital Stock of all classes
of RUC, or (c) any Borrower ceases to own and control all of the economic and
voting rights associated with one hundred percent (100%) of all of the
outstanding capital Stock of any of its Subsidiaries; PROVIDED, HOWEVER, in the
case of Mass, Inc. such threshold shall be forty-nine percent (49%).
"CHARGES" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"CHATTEL PAPER" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
any Credit Party.
"CLOSING DATE" means June 25, 2002.
A-3
"CLOSING CHECKLIST" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as ANNEX D.
"CODE" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; PROVIDED, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article 9 shall govern; PROVIDED
FURTHER, that in the event that, by reason of mandatory provisions of law, any
or all of the attachment, perfection or priority of, or remedies with respect
to, Agent's or any Lender's Lien on any Collateral is governed by the Uniform
Commercial Code as enacted and in effect in a jurisdiction other than the State
of New York, the term "CODE" shall mean the Uniform Commercial Code as enacted
and in effect in such other jurisdiction solely for purposes of the provisions
thereof relating to such attachment, perfection, priority or remedies and for
purposes of definitions related to such provisions.
"COLLATERAL" means the property covered by the Security Agreements,
the Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations.
"COLLATERAL DOCUMENTS" means the Security Agreements, the Pledge
Agreements, the Mortgages, the Guaranties, the Trademark Security Agreement and
all similar agreements entered into guaranteeing payment of, or granting a Lien
upon property as security for payment of, the Obligations.
"COLLATERAL REPORTS" means the reports with respect to the Collateral
referred to in ANNEX F.
"COLLECTION ACCOUNT" means that certain account of Agent, account
number ▇▇▇-▇▇▇-▇▇ in the name of Agent at Deutsche Bank Trust Company Americas
in New York, New York ABA No. 021 001 033, or such other account as may be
specified in writing by Agent as the "Collection Account."
"COMMITMENT FEE" shall mean the amount of seventy-five thousand
dollars ($75,000) paid by Borrowers to Agent upon acceptance of the Commitment
Letter.
"COMMITMENT LETTER" means that certain letter agreement by and among
Borrowers and Agent, dated as of May 10, 2002.
"COMMITMENT TERMINATION DATE" means the earliest of (a) February 1,
2006, (b) the date which is six (6) months prior to the maturity of the RUC
Discount Notes, (c) the date of termination of Lenders' obligations to make
Advances and to incur Letter of Credit Obligations
A-4
or permit existing Loans to remain outstanding pursuant to SECTION 8.2(b), and
(d) the date of indefeasible prepayment in full by Borrowers of the Loans and
the cancellation and return (or stand-by guarantee) of all Letters of Credit or
the cash collateralization of all Letter of Credit Obligations pursuant to ANNEX
B, and the permanent reduction of all Commitments to zero dollars ($0).
"COMMITMENTS" mean (a) as to any Lender, such Lender's Commitment to
make Revolving Credit Advances as set forth on ANNEX J to the Agreement or in
the most recent Assignment Agreement executed by such Lender and (b) as to all
Lenders, the aggregate of all Lenders' Commitments, which aggregate commitment
shall be twenty million dollars ($20,000,000.00) on the Closing Date, as to each
of clauses (a) and (b), as such Commitments may be reduced, amortized or
adjusted from time to time in accordance with the Agreement.
"COMMUNICATIONS ACT" means the Federal Communications Act of 1934 and
any successor statute thereto (as amended from time to time), together with any
and all rules, regulations and written policies promulgated pursuant thereto or
in connection therewith.
"COMPLIANCE CERTIFICATE" has the meaning ascribed to it in ANNEX E.
"CONCENTRATION ACCOUNTS" has the meaning ascribed to it in ANNEX C.
"CONTRACTS" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"CONTROL LETTER" means a letter agreement between Agent and (i) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant disclaims any security interest in the applicable
financial assets, acknowledges the Lien of Agent, on behalf of itself and
Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Agent without further consent by the affected Credit
Party.
"CONVERSION DATE" means March 31, 2003.
"COPYRIGHT LICENSE" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
A-5
"COPYRIGHT SECURITY AGREEMENTS" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party.
"COPYRIGHTS" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all copyrights and General Intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"CREDIT PARTIES" means each Borrower and each Guarantor and each other
Person party hereto as a "Credit Party" on the signature pages hereof.
"CUMULATIVE OPERATING REVENUES" means, for the period from July 1,
2002 through the applicable date of determination, revenues (exclusive of
reciprocal and barter revenues in excess of 7% of gross revenues (before
deducting agency commissions) derived from sources other than reciprocal or
barter transactions) of the Borrowers and their Subsidiaries derived directly
from (i) the operation of Radio Stations and related programming, production and
distribution activities during such period, and (ii) MASS during such period, in
each case, net of any agency commissions paid to any third parties with respect
to the generation of such revenue.
"DEFAULT" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"DEFAULT RATE" has the meaning ascribed to it in SECTION 1.5(d).
"DEPOSIT ACCOUNTS" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party.
"DISBURSEMENT ACCOUNTS" has the meaning ascribed to it in ANNEX C.
"DISCLOSURE SCHEDULES" means the Schedules prepared by Borrowers and
denominated as Disclosure SCHEDULES (1.4) through (6.7) in the Index to the
Agreement.
"DOCUMENTS" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"DOLLARS" or "$" means lawful currency of the United States of
America.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period determined in accordance with GAAP, MINUS (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, exchange or other disposition of
A-6
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, PLUS (c) the sum of (i)
any provision for income taxes, (ii) interest expense, (iii) loss from
extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication. For purposes of this definition, the following items
shall be excluded in determining consolidated net income of a Person: (1) the
income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (2) the income (or deficit) of any other Person (other
than a Subsidiary) in which such Person has an ownership interest, except to the
extent any such income has actually been received by such Person in the form of
cash dividends or distributions; (3) the undistributed earnings of any
Subsidiary of such Person to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any contractual obligation or requirement of law
applicable to such Subsidiary; (4) any restoration to income of any contingency
reserve, except to the extent that provision for such reserve was made out of
income accrued during such period; (5) any write-up of any asset; (6) any net
gain from the collection of the proceeds of life insurance policies; (7) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person; (8) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; and (9) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary.
"ENVIRONMENTAL LAWS" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 ET SEQ.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 ET SEQ.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 ET SEQ.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 ET SEQ.); The Toxic Substance
Control Act (15 U.S.C. Sections 2601 ET SEQ.); the Clean Air Act (42 U.S.C.
Sections 7401 ET SEQ.); the Federal Water PollutIon Control Act (33 U.S.C.
Sections 1251 ET SEQ.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 ET SEQ.); and the Safe Drinking Water Act (42 U.S.C.
A-7
Sections 300(f) ET SEQ.), and any and all regulations promulgated thereunder,
and all analogous state, local anD foreign counterparts or equivalents and any
transfer of ownership notification or approval statutes.
"ENVIRONMENTAL LIABILITIES" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.
"ENVIRONMENTAL PERMITS" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"EQUIPMENT" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA AFFILIATE" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA EVENT" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA
A-8
Affiliate from any Multiemployer Plan; (d) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (e) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit
Party or ERISA Affiliate to make when due required contributions to a
Multiemployer Plan or Title IV Plan unless such failure is cured within 30 days;
(g) any other event or condition that might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or for the
imposition of liability under Section 4069 or 4212(c) of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 or 4245
of ERISA; or (i) the loss of a Qualified Plan's qualification or tax exempt
status; or (j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"EVENT OF DEFAULT" has the meaning ascribed to it in SECTION 8.1.
"EXCESS CASH FLOW" means, without duplication, with respect to any
applicable Fiscal Year of Borrowers and their respective Subsidiaries,
consolidated net income of Borrowers and their respective Subsidiaries, PLUS (a)
depreciation, amortization and interest expense of Borrowers and their
respective Subsidiaries to the extent deducted in determining consolidated net
income, PLUS decreases or MINUS increases (as the case may be) (b) in Working
Capital, MINUS (c) Capital Expenditures during such Fiscal Year, MINUS (d)
interest expense paid or accrued (excluding any original issue discount,
interest paid in kind or amortized debt discount, to the extent included in
determining interest expense) and scheduled principal payments paid or payable
in respect of Funded Debt, PLUS or MINUS (as the case may be) (e) extraordinary
gains or losses which are cash items not included in the calculation of net
income, MINUS (f) mandatory prepayments paid in cash pursuant to SECTION 1.3.
For the purposes of this definition, "WORKING CAPITAL" means the current assets
(as calculated in accordance with GAAP) of Borrowers and their respective
Subsidiaries, MINUS current liabilities (as calculated in accordance with GAAP)
of Borrowers and their respective Subsidiaries.
"EXCLUDED FCC LICENSES" means (i) the surrender by Radio Unica of
Miami License Corp. of its FCC License for either (but not both of) of its AM
radio stations WNMA (1210 KHz), Miami Springs, Florida or WJCC (1700 KHz), Miami
Springs, Florida, in accordance with applicable FCC requirements, and (ii) the
surrender by Radio Unica of New York License Corp. of its FCC License for either
(but not both of) of its AM radio station WJDM (1530 KHz), Elizabeth, New Jersey
or its operating AM radio station WWRU (1660 KHz), Jersey City, New Jersey in
accordance with applicable FCC requirements.
"FAIR LABOR STANDARDS ACT" means the Fair Labor Standards Act, 29
U.S.C. Section 201 ET SEQ.
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"FCC" means the United States Federal Communications Commission or any
successor agency thereto.
"FCC LICENSE(S)" means any governmental approval or authorization
issued to a Borrower or any Subsidiary by the FCC or acquired or otherwise
transferred to a Borrower or any Subsidiary, pursuant to the Communications Act.
"FEDERAL FUNDS RATE" means, for any day, a floating rate equal to the
weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System.
"FEES" means any and all fees payable to Agent or any Lender pursuant
to the Agreement or any of the other Loan Documents.
"FIELD EXAMINATION FEE" has the meaning assigned to such term in
SECTION 1.9(d).
"FINANCIAL COVENANTS" means the financial covenants set forth in
ANNEX G.
"FINANCIAL OFFICER" means the Chief financial Officer or Vice
President - Finance of Borrower Representative.
"FINANCIAL STATEMENTS" means the consolidated and consolidating income
statements and consolidated statements of cash flows and balance sheets of
Borrowers delivered in accordance with SECTION 3.4 and ANNEX E.
"FISCAL MONTH" means any of the monthly accounting periods of
Borrowers.
"FISCAL QUARTER" means any of the quarterly accounting periods of
Borrowers, ending on March 31, June 30, September 30 and December 31 of each
year.
"FISCAL YEAR" means any of the annual accounting periods of Borrowers
ending on December 31 of each year.
"FIXTURES" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"FUNDED DEBT" means, with respect to any Person, without duplication,
all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year from the date of
creation thereof, and specifically including Capital Lease Obligations, current
maturities of
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long-term debt, revolving credit and short-term debt extendible beyond one year
at the option of the debtor, and also including, in the case of Borrowers, the
Obligations and, without duplication, Guaranteed Indebtedness consisting of
guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America consistently applied, as such term is further defined in
ANNEX G to the Agreement.
"GE CAPITAL" means General Electric Capital Corporation, a Delaware
corporation.
"GENERAL INTANGIBLES" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"GOODS" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEED INDEBTEDNESS" means as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("PRIMARY OBLIGATION") of any
other Person (the "PRIMARY OBLIGOR") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary
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obligor or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such arrangement from loss (other
than product warranties given in the ordinary course of business) or (e)
indemnify the owner of such primary obligation against loss in respect thereof
(except for ordinary and customary indemnification obligations in underwriting
agreements or in purchase and sale agreements). The amount of any Guaranteed
Indebtedness at any time shall be deemed to be an amount equal to the lesser at
such time of (x) the stated or determinable amount of the primary obligation in
respect of which such Guaranteed Indebtedness is incurred and (y) the maximum
amount for which such Person may be liable pursuant to the terms of the
instrument embodying such Guaranteed Indebtedness, or, if not stated or
determinable, the maximum reasonably anticipated liability (assuming full
performance) in respect thereof.
"GUARANTIES" means, collectively, the Parent Guaranty and any other
guaranty executed by any Guarantor in favor of Agent and Lenders in respect of
the Obligations.
"GUARANTOR PAYMENT" shall have the meaning ascribed to such term in
SECTION 12.7(a).
"GUARANTORS" means Parent and each other Person, if any, that executes
a guaranty or other similar agreement in favor of Agent, for itself and the
ratable benefit of Lenders, in connection with the transactions contemplated by
the Agreement and the other Loan Documents.
"HAZARDOUS MATERIAL" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred 6 months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than 6 months unless being
contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
A-12
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
"INDEMNIFIED LIABILITIES" has the meaning ascribed to it in SECTION
1.13.
"INDEMNIFIED PERSON" has the meaning ascribed to in SECTION 1.13.
"INDEX RATE" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by THE WALL STREET JOURNAL as
the "base rate on corporate loans posted by at least 75% of the nation's 30
largest banks" (or, if THE WALL STREET JOURNAL ceases quoting a base rate of the
type described, the highest per annum rate of interest published by the Federal
Reserve Board in Federal Reserve statistical release H.15 (519) entitled
"Selected Interest Rates" as the Bank prime loan rate or its equivalent), and
(ii) the Federal Funds Rate plus 50 basis points per annum. Each change in any
interest rate provided for in the Agreement based upon the Index Rate shall take
effect at the time of such change in the Index Rate.
"INDEX RATE LOAN" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"INSTRUMENTS" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"INTELLECTUAL PROPERTY" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"INTEREST PAYMENT DATE" means (a) as to any Index Rate Loan, the first
Business Day of each Fiscal Month while such Loan is outstanding, and (b) as to
any LIBOR Loan, the last day of the applicable LIBOR Period; PROVIDED that, in
addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest that has then accrued under the Agreement.
"INTEREST RESERVE" shall refer to a Reserve in an initial amount equal
to $3,500,000, subject to the following reductions:
A-13
(i) upon completion of each Fiscal Quarter commencing with the
Fiscal Quarter ending on September 30, 2002, upon and subject to
Agent's confirmation of Borrowers' timely payment of all applicable
interest payments due pursuant to this Agreement during the
immediately preceding Fiscal Quarter, the Interest Reserve shall be
reduced by an amount equal to $233,333, and
(ii) upon Agent's satisfactory review of a Compliance Certificate
evidencing Borrowers' compliance with all of the then applicable
Financial Covenants for any Fiscal Quarter ending on or after June 30,
2003, the Interest Reserve shall be reduced to $0, so long as (A) no
Default or Event of Default exists on and as of such date, and (B) no
Default or Event of Default would result from the reduction of
Interest Reserve to $0 on such date.
"INVENTORY" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"INVESTMENT PROPERTY" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C ISSUER" has the meaning ascribed to it in ANNEX B.
"L/C SUBLIMIT" has the meaning ascribed to it in ANNEX B.
"LENDERS" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any assignee of such
Lender.
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"LETTER OF CREDIT FEE" has the meaning ascribed to it in ANNEX B.
"LETTER OF CREDIT OBLIGATIONS" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower Representative, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by Agent or another L/C Issuer or the purchase
of a participation as set forth in ANNEX B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"LETTERS OF CREDIT" means documentary or standby letters of credit
issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Agent and Lenders have incurred
Letter of Credit Obligations.
"LETTER-OF-CREDIT RIGHTS" means "letter-of-credit rights" as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or performance under a letter of credit, whether or
not such Credit Party, as beneficiary, has demanded or is entitled to demand
payment or performance.
"LIBOR BUSINESS DAY" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR LOAN" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR PERIOD" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower Representative pursuant
to the Agreement and ending one month thereafter, as selected by Borrower
Representative's irrevocable notice to Agent as set forth in SECTION 1.5(e);
PROVIDED, that the foregoing provision relating to LIBOR Periods is subject to
the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end 2 LIBOR Business Days prior to such
date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such LIBOR Period) shall end on
the last LIBOR Business Day of a calendar month;
A-15
(d) Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period for
such Loan; and
(e) Borrower Representative shall select LIBOR Periods so that there
shall be no more than 6 separate LIBOR Loans in existence at any one time.
"LIBOR RATE" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the
first day of such LIBOR Period (unless such date is not a Business Day, in
which event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 MINUS the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental, marginal
and emergency reserves under any regulations of the Federal Reserve Board
or other Governmental Authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Federal
Reserve Board) that are required to be maintained by a member bank of the
Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Agent and
Borrower Representative.
"LICENSE" means any FCC License, Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"LICENSE SUB" shall mean each Borrower or Subsidiary of a Borrower
which has no assets other than FCC Licenses and shall include each of the
Borrowers designated as such on ANNEX 1.
"LIEN" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"LITIGATION" has the meaning ascribed to it in SECTION 3.13.
"LOAN ACCOUNT" has the meaning ascribed to it in SECTION 1.12.
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"LOAN DOCUMENTS" means the Agreement, the Notes, the Collateral
Documents, the Master Standby Agreement, and all other agreements, instruments,
documents and certificates identified in the Closing Checklist executed and
delivered to, or in favor of, Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, and all
other written matter whether heretofore, now or hereafter executed by or on
behalf of any Credit Party, or any employee of any Credit Party, and delivered
to Agent or any Lender in connection with the Agreement or the transactions
contemplated thereby. Any reference in the Agreement or any other Loan Document
to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, supplements or other modifications thereto,
and shall refer to the Agreement or such Loan Document as the same may be in
effect at any and all times such reference becomes operative.
"LOANS" means the Revolving Loan and each Advance thereunder.
"LOCAL MARKETING AGREEMENT" means, with respect to a Station operated
by a Person, an agreement or arrangement with a Station operated by another
Person pursuant to which the parties agree to function cooperatively in terms of
programming, advertising, sales, management, consulting or similar services.
"MAJOR MARKET RADIO STATION" means each Radio Station other than (i)
KVJY (AM) Pharr, Texas, (ii) KWRU (AM) Fresno, California, or (iii) KQTL (AM)
Sahuarita, Arizona.
"MARGIN STOCK" has the meaning ascribed to in SECTION 3.10.
"MASS" means Mass Promotions, Inc., a Delaware corporation.
"MASS SELLER NOTE" means that certain Promissory Note, dated as of
April 30, 2001, issued by RUC in favor of MASS, in the original principal amount
of not more than $2,100,000.
"MASS PROFIT" shall mean, with respect to Borrowers for any fiscal
period, an amount equal to (x) revenues (exclusive of reciprocal and barter
revenues) of MASS for such period (which shall include the amount of management
fees due to and actually received by Mass Promotion, Inc. pursuant to that
certain Management and Stockholder Agreement, dated as of April 30, 2001, by and
among Mass Promotions, Inc., MASS Services, Inc. and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇-Fonts and
▇▇▇▇▇ ▇▇▇▇▇▇▇), MINUS, to the extent included in determining revenues for such
period, (y) the sum of expenses, including (i) selling expenses, (ii) cost of
sales, and (iii) general and administrative expenses at the MASS level (but not
the corporate level).
"MASTER STANDBY AGREEMENT" means the Master Agreement for Standby
Letters of Credit dated as of the Closing Date among Borrowers, as Applicants,
and GE Capital, as issuer.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of the
Credit Parties, taken as a whole, (b) Borrowers' ability to pay any of the Loans
or any of the other Obligations in
A-17
accordance with the terms of the Agreement, (c) any Guarantor's ability to honor
Guaranty Obligations, (d) the Collateral or Agent's Liens, on behalf of itself
and Lenders, on the Collateral or the priority of such Liens, or (e) Agent's or
any Lender's rights and remedies under the Agreement and the other Loan
Documents. It is agreed that any action taken by the National Association of
Securities Dealers resulting in the failure of Parent to maintain a listing of
its common stock on NASDAQ shall not be deemed a Material Adverse Effect.
"MATERIAL REAL ESTATE" has the meaning ascribed to it in SECTION 3.6.
"MAXIMUM AMOUNT" means, as of any date of determination, an amount
equal to the Commitment of all Lenders as of that date.
"MORTGAGED PROPERTIES" has the meaning assigned to it in ANNEX D.
"MORTGAGES" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignment of leases or other
real estate security documents delivered by any Credit Party to Agent on behalf
of itself and Lenders with respect to the Mortgaged Properties, all in form and
substance reasonably acceptable to Agent.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"NET PROCEEDS" means, with respect to any event, (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, and (ii) in the case of a
condemnation or similar event, condemnation awards and similar payments, net of
(b) the sum of (i) all reasonable fees, commissions and out-of-pocket expenses
properly attributable to such transaction paid by the Credit Party to third
parties (other than Affiliates) in connection with such event, (ii) in the case
of a sale, transfer or other disposition of an asset (including pursuant to a
sale and leaseback transaction or a condemnation or similar proceeding), amounts
payable to holders of senior Liens (other than the Loans) (to the extent such
Liens constitute Permitted Encumbrances hereunder), and (iii) the amount of an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith.
"NON-FUNDING LENDER" has the meaning ascribed to it in SECTION
9.9(a)(ii).
"NOTES" means, collectively, the Revolving Notes.
"NOTICE OF CONVERSION/CONTINUATION" has the meaning ascribed to it in
SECTION 1.5(e).
"NOTICE OF REVOLVING CREDIT ADVANCE" has the meaning ascribed to it in
SECTION 1.1(a).
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"OBLIGATIONS" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest that accrues after the commencement of any case or proceeding by or
against any Credit Party in bankruptcy, whether or not allowed in such case or
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to any Credit Party under the Agreement or any of the other Loan
Documents.
"OPERATING AGREEMENT" shall mean any programming agreement, Time
Brokerage, Local Marketing or similar agreement, network affiliation agreement,
franchise agreement, lease or other agreement of any Borrower or any of its
respective Subsidiaries relating to the operation of a Station, the termination
or adverse modification of which could reasonably be expected to have a Material
Adverse Effect.
"OWNERSHIP REPORTS" means, with respect to any Station, the reports
and certifications filed with the FCC pursuant to 47 C.F.R. Section 73.3615, or
any comparable reports filed pursuant to any successor regulation thereto.
"PARENT" shall have the meaning ascribed to such term in the preamble
hereof.
"PARENT GUARANTY" means the Parent Guaranty of even date herewith
executed by Parent in favor of Agent, on behalf of itself and Lenders.
"PARENT PLEDGE AGREEMENT" means the pledge agreement of even date
herewith executed by Parent in favor of Agent, on behalf of itself and Lenders,
pledging all Stock of RUC.
"PARENT SECURITY AGREEMENT" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
Parent.
"PATENT LICENSE" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"PATENT SECURITY AGREEMENTS" means the Patent Security Agreements made
in favor of Agent, on behalf of itself and Lenders, by each applicable Credit
Party.
"PATENTS" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or of any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
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"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means a Plan described in Section 3(2) of ERISA.
"PERMITTED ACQUISITION" shall have the meaning assigned to such term
in SECTION 6.1.
"PERMITTED ENCUMBRANCES" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with SECTION 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) deposits
securing, or in lieu of, surety, appeal or customs bonds in proceedings to which
any Credit Party is a party; (f) any attachment or judgment lien not
constituting an Event of Default under SECTION 8.1(j); (g) zoning restrictions,
easements, licenses, or other restrictions on the use of any Real Estate or
other minor irregularities in title (including leasehold title) thereto, so long
as the same do not materially impair the use, value, or marketability of such
Real Estate; (h) presently existing or hereafter created Liens in favor of
Agent, on behalf of Lenders; and (i) Liens expressly permitted under CLAUSES (b)
and (c) of SECTION 6.7 of the Agreement.
"PERMITTED INTERCOMPANY INDEBTEDNESS" shall have the meaning assigned
to such term in SECTION 6.3(a)(viii).
"PERMITTED PARENT ACTIVITIES" shall mean activities or operation
necessary for Parent to (i) maintain its corporate existence, (ii) issue
securities from time to time, as permitted in this Agreement (including
Permitted Equity Transactions), (iii) fulfill its reporting and other
obligations under federal and state securities law, including engaging and
paying fees and costs of non-affiliated legal and accounting professionals, and
(iv) maintaining investments, to the extent such investments are permitted by
SECTION 6.2.
"PERMITTED EQUITY TRANSACTION(S)" means, at any time so long as no
Default or Event of Default then exists or is continuing, one or more
transactions by Parent where (a) Parent realizes up to $20,000,000 from the
issuance of common or preferred Stock of Parent which, (i) is not mandatorily
redeemable, in whole or in part, or required to be repurchased or redeemed, in
whole or in part, by any Credit Party, and which does not require the payment of
cash dividends, in each case prior to the date which is six (6) months after the
Commitment Termination Date; (ii) is not secured by the assets of any Credit
Party; (iii) does not constitute Guaranteed Indebtedness of any Credit Party;
(iv) is not convertible or exchangeable into Indebtedness of any Credit Party;
(v) is consented to in writing by Agent following Agent's review of the
documentation with respect thereto and Agent's satisfaction that the
transactions conform to the requirements of a Permitted Equity Transaction, (b)
the Net Proceeds of such issuance are
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immediately contributed to the equity of one or more Borrowers for general
working capital purposes, and (c) Borrowers immediately after such Net Proceeds
are received, prepay the Loans in accordance with SECTION 1.3(c) in an aggregate
amount equal to fifty percent (50%) of such Net Proceeds.
"PERMITTED PAYMENTS" shall mean (i) regularly scheduled payments of
interest and principal on the MASS Seller Note to the extent permitted under the
terms of the MASS Subordination Agreement, and (ii) a Permitted Senior Note
Payment.
"PERMITTED SENIOR NOTE PAYMENT" means a payment or distribution by
Borrowers to RUC consisting of interest on the RUC Discount Notes in an
aggregate amount less than or equal to the amount of, and not earlier than
fifteen (15) Business Days prior to the due date of, any regularly scheduled
interest payment due after the Closing Date on the RUC Discount Notes as in
effect on the Closing Date.
"PERMITTED SENIOR NOTE REPURCHASES" shall mean and refer to the
purchase and immediate retirement or cancellation by Borrowers of RUC Discount
Notes having a maximum purchase price (including, all related transaction
expenses) of not more than $10,000,000 in the aggregate, PROVIDED, HOWEVER, (i)
at the time of any such purchase, no Default or Event of Default then exists or
would (after giving effect to such purchase) be caused thereby, and (ii) such
purchase shall be made in accordance with all applicable laws and the RUC
Indenture.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"PLAN" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
7 years on behalf of participants who are or were employed by any Credit Party
or ERISA Affiliate.
"PLEDGE AGREEMENTS" means the Borrower Pledge Agreements and the
Parent Pledge Agreement.
"PREPAYMENT EVENT" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of any Credit Party,
other than (i) dispositions described in SECTION 6.8 (a), and (ii) other
dispositions resulting in aggregate Net Proceeds not exceeding in the aggregate,
the lesser of (A) $10,000,000 or (B) any lesser amount that would, pursuant to
the terms and conditions of the RUC Indenture, require RUC to make an "Excess
Proceeds Offer" (as such term is defined in the RUC Indenture); or
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(b) any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any
property or asset of the Borrower or any Credit Party (A) in excess of $250,000
in the aggregate, or (B) in connection with any asset of such Borrower or Credit
Party which is material to its business (regardless of whether the $250,000
threshold has been met or otherwise), but only to the extent that (i) the Net
Proceeds therefrom have not been applied or committed by contract to be applied
to repair, restore or replace such property or asset within 180 days after such
event or (ii) in the case of any such Net Proceeds committed to be so applied
(but not yet applied) as of the date that is 180 days after such event, such Net
Proceeds have not been so applied within 359 days after such event.
"PROCEEDS" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"PRO FORMA" means the unaudited consolidated and consolidating balance
sheet of Borrowers and their Subsidiaries as of March 31, 2002, in accordance
with GAAP after giving PRO FORMA effect to the transactions contemplated hereby.
"PROJECTIONS" means Borrowers' forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, all prepared on a Subsidiary by Subsidiary or
division-by-division basis, if applicable, and otherwise consistent with the
historical Financial Statements of the Borrowers, together with appropriate
supporting details and a statement of underlying assumptions.
"PRO RATA SHARE" means with respect to all matters relating to any
Lender, (a) the percentage obtained by dividing (i) the Commitment of that
Lender by (ii) the aggregate Commitments of all Lenders, as any such percentages
may be adjusted by assignments permitted pursuant to SECTION 9.1, and (b) with
respect to all Loans on and after the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal
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balance of the Loans held by that Lender, by (ii) the outstanding principal
balance of the Loans held by all Lenders.
"QUALIFIED PLAN" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"QUALIFIED ASSIGNEE" means (a) any Lender, any Affiliate of any Lender
and, with respect to any Lender that is an investment fund that invests in
commercial loans, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from ▇▇▇▇▇'▇ at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; PROVIDED that no
Person determined by Agent to be acting in the capacity of a vulture fund or
distressed debt purchaser shall be a Qualified Assignee, and no Person or
Affiliate of such Person (other than a Person that is already a Lender) holding
Subordinated Debt or Stock issued by any Credit Party shall be a Qualified
Assignee.
"RADIO STATIONS" shall mean the following Stations KBLA (AM), Santa
Monica, CA; WWRU (AM), Jersey City, NJ; WJDM (AM), Elizabeth NJ; WNMA (AM) Miami
Springs, FL; WJCC (AM), Miami Springs, FL; WNTD (AM), Chicago, IL; KXYZ (AM),
Houston, TX; KIQI (AM), San Francisco, CA; KAHZ (AM), Hurst, TX; KZDC (AM), San
Antonio, TX; KIDR (AM), Phoenix, AZ; KVJY (AM), Pharr, TX; KWRU (AM), Fresno,
CA; KATD (AM), Pittsburg, CA; KCUV (AM), Englewood, CO; KQTL (AM), Sahuarita,
AZ; and any other radio Stations acquired by Borrower or any of its Subsidiaries
in a Permitted Acquisition.
"RADIO STATION REVENUES" means, for any period, revenues (exclusive of
reciprocal and barter revenues in excess of 5% of revenues derived from sources
other than reciprocal or barter transactions for such period) of the Borrowers
and their Subsidiaries derived directly from the operation of Radio Stations,
network operation and related programming, production and distribution
activities during such period., net of any agency commissions to any third
parties with respect to such revenues.
"RATABLE SHARE" has the meaning ascribed to it in SECTION 1.1(b).
"REAL ESTATE" has the meaning ascribed to it in SECTION 3.6.
"REINVESTMENT AMOUNT" has the meaning ascribed to such term in SECTION
1.3(b)(ii).
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"RELEASE" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"REQUISITE LENDERS" means Lenders having (a) more than 66 2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66 2/3% of the aggregate outstanding amount of all Loans.
"RESERVES" means (i) such reserves, if any, against Borrowing
Availability that Agent may, in its reasonable credit judgment, establish in
accordance with SECTION 5.9, and (ii) the Interest Reserve (which shall be
deemed to a Reserve established by the reasonable exercise of Agent's credit
judgment).
"RESTRICTED PAYMENT" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, the MASS Seller Note or any Subordinated Debt;
(d) any payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire Stock
of such Credit Party now or hereafter outstanding; (e) any payment of a claim
for the rescission of the purchase or sale of, or for material damages arising
from the purchase or sale of, any shares of such Credit Party's Stock or of a
claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (f) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder of
such Credit Party other than payment of compensation in the ordinary course of
business to Stockholders who are employees of such Person; and (g) any payment
of management fees (or other fees of a similar nature) by such Credit Party to
any Stockholder of such Credit Party or its Affiliates.
"RETIREE WELFARE PLAN" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"REVOLVING CREDIT ADVANCE" has the meaning ascribed to it in SECTION
1.1(a)(i).
"REVOLVING LOAN" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrowers PLUS (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Borrowers. Unless
the context otherwise requires, references
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to the outstanding principal balance of the Revolving Loan shall include the
outstanding balance of Letter of Credit Obligations.
"REVOLVING NOTE" has the meaning ascribed to it in SECTION 1.1(a)(ii).
"RUC DISCOUNT NOTES" shall mean those certain 11 3/4% Senior Discount
Notes due 2006 in an aggregate principal amounT of $158,088,000 issued by RUC
under the terms of the RUC Indenture.
"RUC DISCOUNT NOTE DOCUMENTS" shall mean the RUC Indenture, the RUC
Discount Notes and all other documents or instruments executed in connection
with the foregoing, as from time to time modified, amended, extended, renewed or
restated in accordance with the terms hereof.
"RUC INDENTURE" shall mean that certain Indenture, dated as of July
27, 1998, by and among RUC, the guarantors named therein and Wilmington Trust
Company, as Trustee, as the same remains unamended by the parties thereto.
"SECURITY AGREEMENTS" means the Security Agreements of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto, including the Parent Security
Agreement.
"SENIOR INTEREST COVERAGE RATIO" means, with respect to any Person for
any period, the ratio of EBITDA to Senior Interest Expense.
"SENIOR INTEREST EXPENSE" means, with respect to any Person for any
fiscal period, cash interest expense of such Person determined in accordance
with GAAP for the relevant period ended on such date, with respect to any Senior
Secured Debt of such Person.
"SENIOR SECURED DEBT" means the aggregate amount of all senior secured
Indebtedness and Capital Leases incurred by the Borrowers or their Subsidiaries.
"SHAREHOLDER NOTES" mean, collectively (i) that certain secured
promissory note, due and payable November 13, 2005, from ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ in
favor of Parent in the original principal amount of $549,701, and (ii) those two
certain secured promissory notes, due and payable November 13, 2005 and December
15, 2003, respectively, from ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in favor of Parent, in the
original aggregate principal amount of $240,000.
"SOFTWARE" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"SOLVENT" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of
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such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured; (c) such Person does not intend to, and does not believe that it will,
incur debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities (such as litigation, guaranties and pension
plan liabilities) at any time shall be computed as the amount that, in light of
all the facts and circumstances existing at the time, represents the amount that
can be reasonably be expected to become an actual or matured liability.
"STAGE 1 BROADCAST CASH FLOW" means, with respect to Borrowers for any
fiscal period, an amount equal to the sum of (i) Broadcast Cash Flow for such
period, PLUS (ii) MASS Profit for such period.
"STATION" means all related licenses (including FCC Licenses),
franchises and permits issued under federal, state or local laws from time to
time which authorized a Person to receive or distribute, or both, over the
airwaves, audio and visual, radio or microwave signals within a geographic area
for the purpose of broadcasting radio programming, together with all property
owned or used in connection with the broadcast of the programming pursuant to,
and all interest of such Person to receive revenues from any other Person which
derives revenues from or pursuant to, said licenses, franchises and permits. The
term "Station" shall also include a corporation or other entity organized in the
United States of America or any State thereof which shall own one or more
Stations.
"STOCK" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"STOCKHOLDER" means, with respect to any Person, each holder of Stock
of such Person.
"SUBORDINATED DEBT" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"SUBSIDIARY" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether
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by proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than 50% or of which
any such Person is a general partner or may exercise the powers of a general
partner. Unless the context otherwise requires, each reference to a Subsidiary
shall be a reference to a Subsidiary of a Borrower.
"SUPERMAJORITY LENDERS" means Lenders having (a) 80% or more of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, 80%
or more of the aggregate outstanding amount of the Revolving Loan and Letter of
Credit Obligations.
"SUPPORTING OBLIGATIONS" means all "supporting obligations" as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"TARGET" has the meaning assigned to such term in SECTION 6.1.
"TAXES" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"TERMINATION DATE" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged (c) all Letter of
Credit Obligations have been cash collateralized, canceled or backed by standby
letters of credit in accordance with ANNEX B, and (d) Borrowers shall have no
further right to borrow any monies under the Agreement.
"TIME BROKERAGE AGREEMENT" means, with respect to a Station operated
by a Person, an agreement or arrangement with a Station operated by another
Person pursuant to which any Station (i) sells broadcast time to any other
Station that programs such broadcast time and sells its own commercial
advertising announcements during such broadcast time, or (ii) purchases
broadcast time on any other Station for the purpose of programming such
broadcast time and selling its commercial advertisements during such time.
"TITLE IV PLAN" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"TRADEMARK SECURITY AGREEMENTS" means the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party.
"TRADEMARK LICENSE" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right to use any
Trademark.
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"TRADEMARKS" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"UNFUNDED PENSION LIABILITY" means, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of 5 years following a transaction
which might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
"UNUSED LINE FEE " has the meaning assigned to such term in SECTION
1.9(b).
"USAGE" has the meaning assigned to such term in SECTION 1.9(b).
"VALUE" means the lower of the cost or the appraised value of the
applicable Collateral, which appraised value shall be based upon the most recent
appraisal conducted, which appraisal shall be acceptable to Agent, in its sole
discretion.
"WELFARE PLAN" means a Plan described in Section 3(i) of ERISA.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in ANNEX G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine,
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feminine or neuter gender shall include the masculine, feminine and neuter
genders. The words "including", "includes" and "include" shall be deemed to be
followed by the words "without limitation"; the word "or" is not exclusive;
references to Persons include their respective successors and assigns (to the
extent and only to the extent permitted by the Loan Documents) or, in the case
of governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of the same and any successor statutes and regulations. Whenever
any provision in any Loan Document refers to the knowledge (or an analogous
phrase) of any Credit Party, such words are intended to signify that such Credit
Party has actual knowledge or awareness of a particular fact or circumstance or
that such Credit Party, if it had exercised reasonable diligence, would have
known or been aware of such fact or circumstance.
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ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) ISSUANCE. Subject to the terms and conditions of the Agreement,
Agent and Lenders agree to incur, from time to time prior to the Commitment
Termination Date, upon the request of Borrower Representative, on behalf of the
applicable Borrower and for such Borrower's account, Letter of Credit
Obligations by causing Letters of Credit to be issued by GE Capital or a
Subsidiary thereof or a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C ISSUER") for such
Borrower's account and guaranteed by Agent; PROVIDED, that if the L/C Issuer is
a Lender, then such Letters of Credit shall not be guaranteed by Agent but
rather each Lender shall, subject to the terms and conditions hereinafter set
forth, purchase (or be deemed to have purchased) risk participations in all such
Letters of Credit issued with the written consent of Agent, as more fully
described in paragraph (b)(ii) below. The aggregate amount of all such Letter of
Credit Obligations shall not at any time exceed the lesser of (i) two million
dollars ($2,000,000) (the "L/C SUBLIMIT") and (ii) the Commitment less the
aggregate outstanding principal balance of the Revolving Credit Advances. No
such Letter of Credit shall have an expiry date that is more than one year
following the date of issuance thereof, unless otherwise determined by the
Agent, in its sole discretion, and neither Agent nor Lenders shall be under any
obligation to incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than
the Commitment Termination Date.
(b) (i) ADVANCES AUTOMATIC; PARTICIPATIONS. In the event that
Agent or any Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, such payment shall then be deemed automatically to constitute
a Revolving Credit Advance to the applicable Borrower under SECTION 1.1(a) of
the Agreement regardless of whether a Default or Event of Default has occurred
and is continuing and notwithstanding any Borrower's failure to satisfy the
conditions precedent set forth in SECTION 2, and each Lender shall be obligated
to pay its Pro Rata Share thereof in accordance with the Agreement. The failure
of any Lender to make available to Agent for Agent's own account its Pro Rata
Share of any such Revolving Credit Advance or payment by Agent under or in
respect of a Letter of Credit shall not relieve any other Lender of its
obligation hereunder to make available to Agent its Pro Rata Share thereof, but
no Lender shall be responsible for the failure of any other Lender to make
available such other Lender's Pro Rata Share of any such payment.
(ii) If it shall be illegal or unlawful for any Borrower to
incur Revolving Credit Advances as contemplated by paragraph (b)(i) above
because of an Event of Default described in SECTIONS 8.1(h) OR (i) or otherwise
or if it shall be illegal or unlawful for any Lender to be deemed to have
assumed a ratable share of the reimbursement obligations owed to an L/C Issuer,
or if the L/C Issuer is a Lender, then (A) immediately and without further
action whatsoever, each Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation equal
B-1
to such Lender's Pro Rata Share (based on the Commitments) of the Letter of
Credit Obligations in respect of all Letters of Credit then outstanding and (B)
thereafter, immediately upon issuance of any Letter of Credit, each Lender shall
be deemed to have irrevocably and unconditionally purchased from Agent (or such
L/C Issuer, as the case may be) an undivided interest and participation in such
Lender's Pro Rata Share (based on the Commitments) of the Letter of Credit
Obligations with respect to such Letter of Credit on the date of such issuance.
Each Lender shall fund its participation in all payments or disbursements made
under the Letters of Credit in the same manner as provided in the Agreement with
respect to Revolving Credit Advances.
(c) CASH COLLATERAL.
(i) If Borrowers are required to provide cash collateral for
any Letter of Credit Obligations pursuant to the Agreement prior to the
Commitment Termination Date, each Borrower will pay to Agent for the ratable
benefit of itself and Lenders cash or cash equivalents acceptable to Agent
("CASH EQUIVALENTS") in an amount equal to 110% of the maximum amount then
available to be drawn under each applicable Letter of Credit outstanding for the
benefit of such Borrower. Such funds or Cash Equivalents shall be held by Agent
in a cash collateral account (the "CASH COLLATERAL ACCOUNT") maintained at a
bank or financial institution acceptable to Agent. The Cash Collateral Account
shall be in the name of the applicable Borrower and shall be pledged to, and
subject to the control of, Agent, for the benefit of Agent and Lenders, in a
manner satisfactory to Agent. Each Borrower hereby pledges and grants to Agent,
on behalf of itself and Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this ANNEX B, shall constitute a security agreement
under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then
due and payable, shall for any reason be outstanding on the Commitment
Termination Date, Borrowers shall either (A) provide cash collateral therefor in
the manner described above, or (B) cause all such Letters of Credit and
guaranties thereof, if any, to be canceled and returned, or (C) deliver a
stand-by letter (or letters) of credit in guaranty of such Letter of Credit
Obligations, which stand-by letter (or letters) of credit shall be of like tenor
and duration (plus 30 additional days) as, and in an amount equal to 110% of,
the aggregate maximum amount then available to be drawn under, the Letters of
Credit to which such outstanding Letter of Credit Obligations relate and shall
be issued by a Person, and shall be subject to such terms and conditions, as are
satisfactory to Agent in its sole discretion.
(iii) From time to time after funds are deposited in the Cash
Collateral Account by a Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, and in such order as
Agent may elect, as shall be or shall become due and payable by such Borrower to
Agent and Lenders with respect to such Letter of Credit Obligations of such
Borrower and, upon the satisfaction in full of all Letter of Credit Obligations
of such Borrower, to any other Obligations of any Borrower then due and payable.
B-2
(iv) No Borrower nor any Person claiming on behalf of or
through any Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrowers to Agent and Lenders in respect thereof, any funds
remaining in the Cash Collateral Account shall be applied to other Obligations
then due and owing and upon payment in full of such Obligations, any remaining
amount shall be paid to Borrowers or as otherwise required by law. Interest
earned on deposits in the Cash Collateral Account shall be for the account of
Agent.
(d) FEES AND EXPENSES. Borrowers agree to pay to Agent for the
benefit of Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (ii) for each
month during which any Letter of Credit Obligation shall remain outstanding, a
fee (the "LETTER OF CREDIT FEE") in an amount equal to three and one-half
percent (3.50%) per annum multiplied by the maximum amount available from time
to time to be drawn under the applicable Letter of Credit. Such fee shall be
paid to Agent for the benefit of the Lenders in arrears, on the first day of
each month and on the Commitment Termination Date. In addition, Borrowers shall
pay to any L/C Issuer, on demand, such fees (including all per annum fees),
charges and expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued.
(e) REQUEST FOR INCURRENCE OF LETTER OF CREDIT OBLIGATIONS. Borrower
Representative shall give Agent at least 2 Business Days' prior written notice
requesting the incurrence of any Letter of Credit Obligation. The notice shall
be accompanied by the form of the Letter of Credit (which shall be acceptable to
the L/C Issuer) and a completed Application for Standby Letter of Credit in the
form of EXHIBIT B-1 attached hereto. Notwithstanding anything contained herein
to the contrary, Letter of Credit applications by Borrower Representative and
approvals by Agent and the L/C Issuer may be made and transmitted pursuant to
electronic codes and security measures mutually agreed upon and established by
and among Borrower Representative, Agent and the L/C Issuer.
(f) OBLIGATION ABSOLUTE. The obligation of Borrowers to reimburse
Agent and Lenders for payments made with respect to any Letter of Credit
Obligation shall be absolute, unconditional and irrevocable, without necessity
of presentment, demand, protest or other formalities, and the obligations of
each Lender to make payments to Agent with respect to Letters of Credit shall be
unconditional and irrevocable. Such obligations of Borrowers and Lenders shall
be paid strictly in accordance with the terms hereof under all circumstances
including the following:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, setoff, defense or other
right that any Borrower or any of its respective Affiliates or any
Lender may at any time have
B-3
against a beneficiary or any transferee of any Letter of Credit (or
any Persons or entities for whom any such transferee may be acting),
Agent, any Lender, or any other Person, whether in connection with the
Agreement, the Letter of Credit, the transactions contemplated herein
or therein or any unrelated transaction (including any underlying
transaction between any Borrower or any of its respective Affiliates
and the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided
in paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of
Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document that does not comply with the terms of
such Letter of Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is
similar to any of the foregoing; or
(vi) the fact that a Default or an Event of Default has
occurred and is continuing.
(g) INDEMNIFICATION; NATURE OF LENDERS' DUTIES.
(i) In addition to amounts payable as elsewhere provided in
the Agreement, Borrowers hereby agree to pay and to protect, indemnify, and save
harmless Agent and each Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that Agent or any Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of Credit or
guaranty thereof, or (B) the failure of Agent or any Lender seeking
indemnification or of any L/C Issuer to honor a demand for payment under any
Letter of Credit or guaranty thereof as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely as a result
of the gross negligence or willful misconduct of Agent or such Lender (as
finally determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrowers, Borrowers
assume all risks of the acts and omissions of, or misuse of any Letter of Credit
by beneficiaries, of any Letter of Credit. In furtherance and not in limitation
of the foregoing, to the fullest extent permitted by law, neither Agent nor any
Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (B) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or
B-4
assign any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or ineffective for
any reason; (C) failure of the beneficiary of any Letter of Credit to comply
fully with conditions required in order to demand payment under such Letter of
Credit; PROVIDED, that in the case of any payment by Agent under any Letter of
Credit or guaranty thereof, Agent shall be liable to the extent such payment was
made solely as a result of its gross negligence or willful misconduct (as
finally determined by a court of competent jurisdiction) in determining that the
demand for payment under such Letter of Credit or guaranty thereof complies on
its face with any applicable requirements for a demand for payment under such
Letter of Credit or guaranty thereof; (D) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they may be in cipher; (E) errors in
interpretation of technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a payment under any Letter
of Credit or guaranty thereof or of the proceeds thereof; (G) the credit of the
proceeds of any drawing under any Letter of Credit or guaranty thereof; and (H)
any consequences arising from causes beyond the control of Agent or any Lender.
None of the above shall affect, impair, or prevent the vesting of any of Agent's
or any Lender's rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by Borrowers in favor of any
L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between or among Borrowers and such
L/C Issuer, including any Master Standby Agreement entered into with Agent.
B-5
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Each Borrower shall, and shall cause its Subsidiaries to, establish
and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date,
each Borrower shall (i) establish blocked accounts ("BLOCKED ACCOUNTS") at one
or more of the banks set forth in DISCLOSURE SCHEDULE (3.19), and (ii) deposit
and cause any Credit Party to deposit or cause to be deposited promptly, and in
any event no later than (1) the third Business Day after the date of receipt
thereof if no Default or Event of Default then exists and is continuing or (2)
the first Business Day after the date of receipt thereof if any Default or Event
of Default then exists and is continuing, all cash, checks, drafts or other
similar items of payment relating to or constituting payments made in respect of
any and all Collateral into one or more Blocked Accounts in such Borrower's name
or any such Subsidiary's name and at a bank identified in DISCLOSURE SCHEDULE
(3.19) (each, a "RELATIONSHIP BANK").
(b) Each Borrower may maintain, in its name, an account (each a
"DISBURSEMENT ACCOUNT" and collectively, the "DISBURSEMENT ACCOUNTS") at a bank
reasonably acceptable to Agent into which Agent shall, from time to time,
deposit proceeds of Revolving Credit Advances made to Borrower pursuant to
SECTION 1.1 for use by such Borrower solely in accordance with the provisions of
SECTION 1.4.
(c) On or before the Closing Date (or such later date as Agent shall
consent to in writing), each bank where a Disbursement Account is maintained and
all other Relationship Banks, shall have entered into tri-party blocked account
agreements with Agent, for the benefit of itself and Lenders, and the applicable
Borrower and its Subsidiaries, as applicable, in form and substance reasonably
acceptable to Agent, which shall become operative on or prior to the Closing
Date (or such later date to which the Agent shall have consented in writing).
Each such blocked account agreement shall provide, among other things, that (i)
all items of payment deposited in such account and proceeds thereof deposited in
the applicable Blocked Account are held by such bank as agent or
bailee-in-possession for Agent, on behalf of itself and Lenders, (ii) the bank
executing such agreement has no rights of setoff or recoupment or any other
claim against such account, as the case may be, other than for payment of its
service fees and other charges directly related to the administration of such
account and for returned checks or other items of payment, and (iii) from and
after the Closing Date, with respect to banks at which a Blocked Account is
maintained, such bank agrees, from and after the receipt of a notice (an
"ACTIVATION NOTICE") from Agent (which Activation Notice may be given by Agent
at any time at which (1) a Default or Event of Default has occurred and is
continuing, (2) Agent reasonably believes based upon information available to it
that a Default or an Event of Default is likely to occur; (3) Agent reasonably
believes that an event or circumstance that is likely to have a
C-1
Material Adverse Effect has occurred, or (4) Agent reasonably has grounds to
question the integrity of any Borrower's Cash Management Systems or any
Borrower's compliance with the provisions of this ANNEX C or any other
provisions of the Loan Documents to the extent related to such Cash Management
Systems (any of the foregoing being an "ACTIVATION EVENT"), to forward
immediately all amounts in each Blocked Account to the Collection Account and to
commence the process of daily sweeps from such Blocked Account into the
Collection Account. From and after the date Agent has delivered an Activation
Notice to any bank with respect to any Blocked Account(s), no Borrower shall, or
shall cause or permit any Subsidiary thereof to, accumulate or maintain cash in
Disbursement Accounts or payroll accounts as of any date of determination in
excess of checks outstanding against such accounts as of that date and amounts
necessary to meet minimum balance requirements. In the event Agent has consented
in writing, Borrower may direct, through a standing, irrevocable instruction,
the Relationship Banks so indicated on DISCLOSURE SCHEDULE (3.19) to transfer
any and all funds on deposit with such Relationship Bank to a Blocked Account
(i) at any time when such funds are in an amount equal to or greater than
$10,000 or (ii) in any event, no less frequently than once a week, in lieu of
entering a blocked account agreement with such Relationship Banks.
(d) So long as no Default or Event of Default has occurred and is
continuing, Borrowers may amend DISCLOSURE SCHEDULE (3.19) to add or replace a
Relationship Bank, Lock Box or Blocked Account or to replace any Disbursement
Account; PROVIDED, that (i) Agent shall have consented in writing in advance to
the opening of such account or Lock Box with the relevant bank and (ii) prior to
the time of the opening of such account or Lock Box, the applicable Borrower or
its Subsidiaries, as applicable, and such bank shall have executed and delivered
to Agent a tri-party blocked account agreement, in form and substance reasonably
satisfactory to Agent. Borrowers shall close any of their accounts (and
establish replacement accounts in accordance with the foregoing sentence)
promptly and in any event within 30 days following notice from Agent that the
creditworthiness of any bank holding an account is no longer acceptable in
Agent's reasonable judgment, or as promptly as practicable and in any event
within 60 days following notice from Agent that the operating performance, funds
transfer or availability procedures or performance with respect to accounts of
the bank holding such accounts or Agent's liability under any tri-party blocked
account agreement with such bank is no longer acceptable in Agent's reasonable
judgment.
(e) The Blocked Accounts and Disbursement Accounts shall be cash
collateral accounts, with all cash, checks and other similar items of payment in
such accounts securing payment of the Loans and all other Obligations, and in
which each Borrower and each of its Subsidiaries shall have granted a Lien to
Agent, on behalf of itself and Lenders, pursuant to the Security Agreements.
(f) All amounts deposited in the Collection Account shall be deemed
received by Agent in accordance with SECTION 1.10 and shall be applied (and
allocated) by Agent in accordance with SECTION 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
C-2
(g) Each Borrower shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with
Borrower (each a "RELATED PERSON") to (i) hold in trust for Agent, for the
benefit of itself and Lenders, all checks, cash and other items of payment
received by such Borrower or any such Related Person, and (ii) within (1) three
Business Days, if no Default or Event of Default then exists and is continuing
or (2) one Business Day, if any Default or Event of Default then exists and is
continuing, after receipt by such Borrower or any such Related Person of any
checks, cash or other items of payment, deposit the same into a Blocked Account
of such Borrower. Each Borrower and each Related Person thereof acknowledges and
agrees that all cash, checks or other items of payment constituting proceeds of
Collateral are part of the Collateral. All proceeds of the sale or other
disposition of any Collateral, shall be deposited directly into the applicable
Blocked Accounts.
C-3
ANNEX D (SECTION 2.1(a))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in
SECTION 2.1 of the Agreement, pursuant to SECTION 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Closing Date (each capitalized term used but not otherwise defined
herein shall have the meaning ascribed thereto in ANNEX A to the Agreement):
A. APPENDICES. All Appendices to the Agreement, in form and
substance satisfactory to Agent.
B. REVOLVING NOTES. Duly executed originals of the Revolving Notes
for each applicable Lender, dated the Closing Date.
C. SECURITY AGREEMENTS. Duly executed originals of the Security
Agreements, dated the Closing Date, and all instruments, documents and
agreements executed pursuant thereto.
D. INSURANCE. Satisfactory evidence that the insurance policies
required by SECTION 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of Lenders.
E. SECURITY INTERESTS AND CODE FILINGS.
(a) Evidence satisfactory to Agent that Agent (for the benefit
of itself and Lenders) has a valid and perfected first priority security
interest in the Collateral, including (i) such documents duly executed by each
Credit Party (including financing statements under the Code and other applicable
documents under the laws of any jurisdiction with respect to the perfection of
Liens) as Agent may request in order to perfect its security interests in the
Collateral and (ii) copies of Code search reports listing all effective
financing statements that name any Credit Party as debtor, together with copies
of such financing statements, none of which shall cover the Collateral.
(b) [Intentionally Omitted.]
(c) Control Letters from (i) all issuers of uncertificated
securities and financial assets held by each Borrower, (ii) all securities
intermediaries with respect to all securities accounts and securities
entitlements of each Borrower, and (iii) all futures commission agents and
clearing houses with respect to all commodities contracts and commodities
accounts held by any Borrower.
D-1
F. INTELLECTUAL PROPERTY SECURITY AGREEMENTS. Duly executed
originals of Trademark Security Agreements, Copyright Security Agreements and
Patent Security Agreements, each dated the Closing Date and signed by each
Credit Party which owns Trademarks, Copyrights and/or Patents, as applicable,
all in form and substance reasonably satisfactory to Agent, together with all
instruments, documents and agreements executed pursuant thereto.
G. PARENT GUARANTY. Guaranty executed by Parent in favor of
Agent, for the benefit of Lenders.
H. INITIAL NOTICE OF REVOLVING CREDIT ADVANCE. Duly executed
originals of a Notice of Revolving Credit Advance, dated the Closing Date, with
respect to the initial Revolving Credit Advance to be requested by Borrower
Representative on the Closing Date.
I. LETTER OF DIRECTION. Duly executed originals of a letter of
direction from Borrower Representative addressed to Agent, on behalf of itself
and Lenders, with respect to the disbursement on the Closing Date of the
proceeds of the initial Revolving Credit Advance.
J. CASH MANAGEMENT SYSTEM; BLOCKED ACCOUNT AGREEMENTS. Evidence
satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with ANNEX C to the Agreement have been established and are currently
being maintained in the manner set forth in such ANNEX C, together with copies
of duly executed tri-party blocked account and lock box agreements, reasonably
satisfactory to Agent, with the banks as required by ANNEX C.
K. CHARTER AND GOOD STANDING. For each Credit Party, such
Person's (a) charter and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of organization or
incorporation and (c) good standing certificates (including verification of tax
status) and certificates of qualification to conduct business in each
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, each dated a recent date prior to the
Closing Date and certified by the applicable Secretary of State or other
authorized Governmental Authority.
L. OPERATING AND PARTNERSHIP AGREEMENTS AND RESOLUTIONS. For
each Credit Party, (a) such bylaws or other operating or partnership agreement,
together with all amendments thereto and (b) resolutions of such Person's Board
of Directors, approving and authorizing the execution, delivery and performance
of the Loan Documents to which such Person is a party and the transactions to be
consummated in connection therewith, each certified as of the Closing Date by
such Person's corporate secretary or an assistant secretary as being in full
force and effect without any modification or amendment.
M. INCUMBENCY CERTIFICATES. For each Credit Party, signature
and incumbency certificates of the officers of each such Person executing any of
the Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
D-2
N. OPINIONS OF COUNSEL. Duly executed originals of opinions of
Stroock & Stroock & ▇▇▇▇▇ LLP, counsel for the Credit Parties, and Skadden,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special FCC counsel for the Credit Parties,
together with any local counsel opinions reasonably requested by Agent, each in
form and substance reasonably satisfactory to Agent and its counsel, dated the
Closing Date, and each accompanied by a letter addressed to such counsel from
the Credit Parties, authorizing and directing such counsel to address its
opinion to Agent, on behalf of Lenders, and to include in such opinion an
express statement to the effect that Agent and Lenders are authorized to rely on
such opinion.
O. PLEDGE AGREEMENTS. Duly executed originals of each of the
Pledge Agreements accompanied by (as applicable) (a) share certificates
representing all of the outstanding Stock being pledged pursuant to such Pledge
Agreement and stock powers for such share certificates executed in blank and (b)
the original Intercompany Notes and other instruments evidencing Indebtedness
being pledged pursuant to such Pledge Agreement, duly endorsed in blank.
P. ACCOUNTANTS' LETTERS. A letter from the Credit Parties to
their independent auditors authorizing the independent certified public
accountants of the Credit Parties to communicate with Agent and Lenders in
accordance with SECTION 4.2.
S. APPOINTMENT OF AGENT FOR SERVICE. An appointment of CT
Corporation as each Credit Party's agent for service of process.
T. [Intentionally Omitted.]
U. OFFICER'S CERTIFICATE. Agent shall have received duly
executed originals of a certificate of a responsible officer of each Borrower,
dated the Closing Date, stating that, since December 31, 2001 (a) no event or
condition has occurred or is existing which could reasonably be expected to have
a Material Adverse Effect; (b) there has been no material adverse change in the
industry in which such Borrower operates; (c) no Litigation has been commenced
which, if successful, would have a Material Adverse Effect or could challenge
any of the transactions contemplated by the Agreement and the other Loan
Documents; (d) there have been no Restricted Payments made by any Credit Party;
and (e) there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of any Borrower or any of such
Borrower's respective Subsidiaries.
V. WAIVERS. Agent, on behalf of Lenders, shall have received
landlord waivers and consents, bailee letters and mortgagee agreements in form
and substance reasonably satisfactory to Agent, in each case for the properties
located in New York tower site and the Miami, Florida headquarters and tower
site.
W. MORTGAGES. Mortgages covering all of the Real Estate (the
"MORTGAGED PROPERTY"), together with: (a) title insurance policies reasonably
satisfactory in form and substance to Agent, in its sole discretion, and (b)
evidence that counterparts of the Mortgages have been recorded in all places to
the extent necessary or desirable, in the judgment of Agent, to
D-3
create a valid and enforceable first priority Lien (subject to Permitted
Encumbrances) on each Mortgaged Property in favor of Agent for the benefit of
itself and the Lenders (or in favor of a trustee as may be required or desirable
under local law).
X. SUBORDINATION AND INTERCREDITOR AGREEMENTS. Agent and
Lenders shall have received any and all subordination and/or intercreditor
agreements, all in form and substance reasonably satisfactory to Agent, in its
sole discretion, as Agent shall have deemed necessary or appropriate with
respect to any Indebtedness of any Credit Party.
Y. ENVIRONMENTAL REPORTS. Agent shall have received Phase I
Environmental Site Assessment Reports, consistent with American Society for
Testing and Materials (ASTM) Standard E 1527-94 and applicable state
requirements, on all of the Real Estate, dated no more than 6 months prior to
the Closing Date, prepared by environmental engineers reasonably satisfactory to
Agent, all in form and substance reasonably satisfactory to Agent, in its sole
discretion; and Agent shall have further received such environmental review and
audit reports, including Phase II reports, with respect to the Real Estate of
any Credit Party as Agent shall have requested, and Agent shall be satisfied, in
its sole discretion, with the contents of all such environmental reports. Agent
shall have received letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
Z. APPRAISALS. Agent shall have received appraisals as to all
Equipment and as to each parcel of Real Estate owned by each Credit Party, each
of which shall be in form and substance reasonably satisfactory to Agent.
AA. AUDITED FINANCIALS; FINANCIAL CONDITION. Agent shall have
received the Financial Statements, Projections and other materials set forth in
SECTION 3.4, certified by a Financial Officer in each case in form and substance
reasonably satisfactory to Agent, and Agent shall be satisfied, in its sole
discretion, with all of the foregoing. Agent shall have further received a
certificate of a Financial Officer on behalf of each Borrower, based on such Pro
Forma and Projections, to the effect that (a) such Borrower will be Solvent upon
the consummation of the transactions contemplated herein; (b) the Pro Forma
fairly presents the financial condition of such Borrower as of the date thereof
after giving effect to the transactions contemplated by the Loan Documents; (c)
the Projections are based upon estimates and assumptions stated therein, all of
which such Borrower believes to be reasonable and fair in light of current
conditions and current facts known to such Borrower and, as of the Closing Date,
reflect such Borrower's good faith and reasonable estimates of its future
financial performance and of the other information projected therein for the
period set forth therein; and (d) containing such other statements with respect
to the solvency of such Borrower and matters related thereto as Agent shall
reasonably request.
BB. MASTER STANDBY AGREEMENT. A Master Agreement for Standby
Letters of Credit among Borrowers and GE Capital.
D-4
DD. OTHER DOCUMENTS. Such other certificates, documents and
agreements respecting any Credit Party as Agent may reasonably request.
D-5
ANNEX E (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrowers shall deliver or cause to be delivered to Agent or to Agent
and Lenders, as indicated, the following:
(a) MONTHLY FINANCIALS. To Agent and Lenders, within 30 days after
the end of each Fiscal Month, financial information regarding Borrowers and
their Subsidiaries, certified by a Financial Officer consisting of consolidated
(i) unaudited balance sheets as of the close of such Fiscal Month and the
related statements of income and cash flows for that portion of the Fiscal Year
ending as of the close of such Fiscal Month; (ii) consolidated and consolidating
unaudited statements of income and consolidated unaudited statements of cash
flows for such Fiscal Month, setting forth in comparative form the figures for
the corresponding period in the prior year and the figures contained in the
Projections for such Fiscal Year, all prepared in accordance with GAAP (subject
to normal year-end adjustments); and (iii) a summary of the outstanding balance
of all Intercompany Notes as of the last day of that Fiscal Month. Such
financial information shall be accompanied by (A) a statement in reasonable
detail (each, a "COMPLIANCE CERTIFICATE") showing the calculations used in
determining compliance with each Financial Covenant that is tested on a monthly
basis and a statement as to the value (during such period and cumulatively since
the Closing Date) realized from the sale, transfer, conveyance, assignment or
otherwise disposition of any properties or other assets, and (B) the
certification of a Financial Officer that (i) such financial information
presents fairly in accordance with GAAP (subject to normal year-end adjustments)
the financial position and results of operations of Borrowers and their
Subsidiaries, on a consolidated and consolidating basis, in each case as at the
end of such Fiscal Month and for that portion of the Fiscal Year then ended and
(ii) any other information presented is true, correct and complete in all
material respects and that there was no Default or Event of Default in existence
as of such time or, if a Default or Event of Default has occurred and is
continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.
(b) QUARTERLY FINANCIALS. To Agent and Lenders, within 45 days after
the end of each Fiscal Quarter, consolidated financial information regarding
Borrowers and their Subsidiaries, certified by a Financial Officer, including
(i) unaudited balance sheets as of the close of such Fiscal Quarter and the
related statements of income and cash flow for that portion of the Fiscal Year
ending as of the close of such Fiscal Quarter and (ii) consolidated and
consolidating unaudited statements of income and consolidated unaudited
statements of cash flows for such Fiscal Quarter, in each case setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections for such Fiscal Year, all prepared in
accordance with GAAP (subject to normal year-end adjustments). Such financial
information shall be accompanied by (A) a Compliance Certificate in respect of
each of the Financial Covenants that is tested on a quarterly basis and (B) the
certification of a Financial Officer that (i) such financial information
presents fairly in accordance with GAAP (subject to
E-1
normal year-end adjustments) the financial position, results of operations and
statements of cash flows of Borrowers and their Subsidiaries, on both a
consolidated and consolidating basis, as at the end of such Fiscal Quarter and
for that portion of the Fiscal Year then ended, (ii) any other information
presented is true, correct and complete in all material respects and that there
was no Default or Event of Default in existence as of such time or, if a Default
or Event of Default has occurred and is continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default. In
addition, Borrowers shall deliver to Agent and Lenders, within 30 days after the
end of each Fiscal Quarter, a management discussion and analysis that includes a
comparison to budget for that Fiscal Quarter and a comparison of performance for
that Fiscal Quarter to the corresponding period in the prior year.
(c) OPERATING PLAN. To Agent and Lenders, as soon as available, but
not later than 30 days after the end of each Fiscal Year, an annual operating
plan for Borrowers, on a consolidated and consolidating basis, approved by the
Board of Directors of Parent, for the following Fiscal Year, which (i) includes
a statement of all of the material assumptions on which such plan is based, (ii)
includes quarterly balance sheets, income statements and statements of cash
flows for the following year and (iii) integrates sales, gross profits,
operating expenses, operating profit, cash flow projections and Borrowing
Availability projections, all prepared on the same basis and in similar detail
as that on which operating results are reported (and in the case of cash flow
projections, representing management's good faith estimates of future financial
performance based on historical performance), and including plans for personnel,
Capital Expenditures and facilities.
(d) ANNUAL AUDITED FINANCIALS. To Agent and Lenders, within 90 days
after the end of each Fiscal Year, audited Financial Statements for Borrowers
and their Subsidiaries on a consolidated basis, consisting of balance sheets and
statements of income and retained earnings and cash flows, setting forth in
comparative form in each case the figures for the previous Fiscal Year, which
Financial Statements shall be prepared in accordance with GAAP and certified
without qualification, by an independent certified public accounting firm of
national standing or otherwise acceptable to Agent. Such Financial Statements
shall be accompanied by (i) a statement prepared in reasonable detail showing
the calculations used in determining compliance with each of the Financial
Covenants, (ii) a report from such accounting firm to the effect that, in
connection with their audit examination, nothing has come to their attention to
cause them to believe that a Default or Event of Default has occurred (or
specifying those Defaults and Events of Default that they became aware of), it
being understood that such audit examination extended only to accounting matters
and that no special investigation was made with respect to the existence of
Defaults or Events of Default, (iii) a letter addressed to Agent, on behalf of
itself and Lenders, in form and substance reasonably satisfactory to Agent and
subject to standard qualifications required by nationally recognized accounting
firms, signed by such accounting firm acknowledging that Agent and Lenders are
entitled to rely upon such accounting firm's certification of such audited
Financial Statements, (iv) the annual letters to such accountants in connection
with their audit examination detailing contingent liabilities and material
litigation matters, and (v) the certification of a Financial Officer on behalf
of each Borrower that all such Financial Statements present fairly in accordance
with GAAP the financial position, results of operations and statements of cash
flows of Borrowers and their Subsidiaries on a consolidated
E-2
and consolidating basis, as at the end of such Fiscal Year and for the period
then ended, and that there was no Default or Event of Default in existence as of
such time or, if a Default or Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default.
(e) MANAGEMENT LETTERS. To Agent and Lenders, within 5 Business Days
after receipt thereof by any Credit Party, copies of all final management
letters, exception reports or similar letters or reports received by such Credit
Party from its independent certified public accountants.
(f) DEFAULT NOTICES. To Agent and Lenders, as soon as practicable,
and in any event within 5 Business Days after an executive officer of any
Borrower has actual knowledge of the existence of any Default, Event of Default
or other event that has had a Material Adverse Effect, telephonic or telecopied
notice specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
(g) PUBLIC FILINGS AND PRESS RELEASES. To Agent and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.
(h) SUBORDINATED DEBT AND EQUITY NOTICES. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person, and,
within 2 Business Days after any Credit Party obtains knowledge of any matured
or unmatured event of default with respect to any Subordinated Debt, notice of
such event of default.
(i) SUPPLEMENTAL SCHEDULES. To Agent, supplemental disclosures, if
any, required by SECTION 5.6.
(j) LITIGATION. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party that
(i) seeks damages in excess of $500,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, or (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities.
(k) INSURANCE NOTICES. To Agent, disclosure of losses or casualties
required by SECTION 5.4.
E-3
(l) LEASE DEFAULT NOTICES. To Agent, within 2 Business Days after
receipt thereof, copies of (i) any and all default notices received under or
with respect to any Material Real Estate, and (ii) such other notices or
documents as Agent may reasonably request.
(m) LEASE AMENDMENTS. To Agent, within 2 Business Days after receipt
thereof, copies of all material amendments to leases relating to any Material
Real Estate.
(n) OTHER DOCUMENTS. To Agent and Lenders, such other financial and
other information respecting any Credit Party's business or financial condition
as Agent or any Lender shall from time to time reasonably request.
(o) FCC DOCUMENTS. To Agent, within two (2) Business Days after
receipt thereof, copies of (i) all letters of inquiry, notices of apparent
liability, hearing designation orders or any other orders, rulings or decisions
issued by the FCC with respect to any FCC License, and (ii) any correspondence,
pleading or other response from any Borrower or any of its respective
Subsidiaries to the FCC with respect to the foregoing.
E-4
ANNEX F (SECTION 4.1(b))
TO
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrowers shall deliver or cause to be delivered the following:
(a) To Agent, at the time of delivery of each of the annual Financial
Statements delivered pursuant to ANNEX E, (i) a listing of government contracts
of each Borrower subject to the Federal Assignment of Claims Act of 1940; and
(ii) a list of any applications for the registration of any Patent, Trademark or
Copyright filed by any Credit Party with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
the prior Fiscal Quarter;
(b) Each Borrower, at its own expense, shall deliver to Agent such
appraisals of its assets as Agent may request at any time after the occurrence
and during the continuance of a Default or an Event of Default, such appraisals
to be conducted by an appraiser, and in form and substance reasonably
satisfactory to Agent; and
(c) Such other reports, statements and reconciliations with respect
to the Collateral or Obligations of any or all Credit Parties as Agent shall
from time to time request in its reasonable discretion.
F-1
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrowers shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) From the Closing Date through and including the Conversion Date:
(i) MAXIMUM CAPITAL EXPENDITURES. Borrowers and their Subsidiaries
on a consolidated basis shall not make Capital Expenditures during the Fiscal
Year ending December 31, 2002 that exceed an aggregate amount of $3,000,000.00.
(ii) MINIMUM CUMULATIVE OPERATING REVENUE. Borrowers and their
Subsidiaries on a consolidated basis shall maintain at the end of each Fiscal
Quarter set forth below, Cumulative Operating Revenue (as calculated for the
periods set forth below) of not less than the following:
Minimum Cumulative
Period Operating Revenues
------ ------------------
Three months ending $ 9,500,000
September 30, 2002
Six months ending $18,500,000
December 31, 2002
Nine months ending $28,500,000
▇▇▇▇▇ ▇▇, ▇▇▇▇
(▇▇▇) MINIMUM CUMULATIVE STAGE 1 BROADCAST CASH FLOW. Borrowers and
their Subsidiaries shall maintain on a consolidated basis at the end of each
Fiscal Quarter set forth below, minimum cumulative Stage 1 Broadcast Cash Flow
(as calculated for the periods commencing July 1, 2002 and ending on each of the
dates set forth below) of not less than the following:
Minimum Cumulative
Period Stage 1 Broadcast Cash Flow
------ ---------------------------
Three months ending $ 0
September 30, 2002
Six months ending $1,200,000
December 31, 2002
Nine months ending $2,500,000
March 31, 2003
G-1
(b) From and after the Conversion Date:
(i) MAXIMUM CAPITAL EXPENDITURES. Borrowers and their Subsidiaries
on a consolidated basis shall not make Capital Expenditures during any Fiscal
Year that exceed an aggregate amount of (A) $1,000,000.00 PLUS (B) any portion
of the permitted Capital Expenditures for the immediately preceding Fiscal Year
of Borrowers which were not utilized by Borrowers during such immediately
preceding Fiscal Year.
(ii) MAXIMUM SENIOR SECURED DEBT. Borrowers and their Subsidiaries
on a consolidated basis shall not have at any time Senior Secured Debt in an
amount in excess of (i) Broadcast Cash Flow for the twelve months then ended
multiplied by six (6.0), PLUS (ii) Mass Profit for the twelve months then ended
multiplied by two and three-quarters (2.75).
(iii) MINIMUM SENIOR INTEREST COVERAGE RATIO. Borrowers and their
Subsidiaries on a consolidated basis shall have at the end of each Fiscal
Quarter set forth below, a Senior Interest Coverage Ratio for the 12-month
period then ended of not less than the following:
1.5 to 1.0 for each Fiscal Quarter during the period from the
date hereof through and including March 31, 2004;
2.0 to 1.0 for each Fiscal Quarter during the period from
April 1, 2004 through and including March 31, 2005; and
2.10 to 1.0 for each Fiscal Quarter thereafter.
Unless otherwise specifically provided herein, any accounting term used in
the Agreement shall have the meaning customarily given such term in accordance
with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
PROVIDED, HOWEVER, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"ACCOUNTING CHANGES" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by any Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and
G-2
any subsequent reversal (in whole or in part) of such reserves; and (iv) the
reversal of any reserves established as a result of purchase accounting
adjustments. All such adjustments resulting from Accounting Changes for
expenditures made subsequent to the Closing Date (including capitalization of
costs and expenses or payment of pre-Closing Date liabilities) shall be treated
as expenses in the period the expenditures are made and deducted as part of the
calculation of EBITDA in such period. If Agent, Borrowers and Requisite Lenders
agree upon the required amendments, then after appropriate amendments have been
executed and the underlying Accounting Change with respect thereto has been
implemented, any reference to GAAP contained in the Agreement or in any other
Loan Document shall, only to the extent of such Accounting Change, refer to
GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Agent, Borrowers and Requisite Lenders cannot agree upon
the required amendments within 30 days following the date of implementation of
any Accounting Change, then all Financial Statements delivered and all
calculations of financial covenants and other standards and terms in accordance
with the Agreement and the other Loan Documents shall be prepared, delivered and
made without regard to the underlying Accounting Change. For purposes of SECTION
8.1, a breach of a Financial Covenant contained in this ANNEX G shall be deemed
to have occurred as of any date of determination by Agent or as of the last day
of any specified measurement period, regardless of when the Financial Statements
reflecting such breach are delivered to Agent.
G-3
ANNEX H (SECTION 9.9(a))
to
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: Deutsche Bank Trust Company Americas
New York, New York
ABA #: ▇▇▇▇▇▇▇▇▇
Account #: ▇▇▇▇▇▇▇▇
Account Name: GECC/CAF Depository
Reference: CFC Radio Unica
H-1
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Radio Unica, Account Manager
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
AND
General Electric Capital Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇'▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
(B) If to any Borrower, at
Radio Unica Corp.
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
I-1
with copies to:
Stroock & Stroock & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
I-2
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
to
CREDIT AGREEMENT
Lender(s)
Commitment ------------------------------------
$20,000,000.00 General Electric Capital Corporation