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EXHIBIT 10.8
CREDIT AGREEMENT
This Credit Agreement (as it may be amended or modified and in effect
from time to time, the "Agreement"), dated as of May 20, 1998, is between
Tri-State Outdoor Media Group, Inc., a Kansas corporation (together with its
successors and assigns, the "Borrower"), and The First National Bank of Chicago
(together with its successors and assigns, the "Lender"). The parties hereto
agree as follows:
ARTICLE I -- DEFINITIONS
As used in this Agreement:
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the corporate base rate of interest announced by the
Lender from time to time, changing when and as said corporate base rate changes
and (ii) the sum of the federal funds effective rate (as published by the
Federal Reserve Bank of New York) for such day plus 1/2% per annum.
"Alternate Base Rate Loan" means a Loan that bears interest at the
Alternate Base Rate.
"Applications" is defined in Section 4.1.
"Borrowing Date" means a date on which a Loan is made hereunder.
"Borrowing Notice" is defined in Section 2.5.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Loans, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means the obligation of the Lender to make Loans not
exceeding the amount set forth opposite its signature below or as set forth in
any notice of assignment relating to any assignment that has become effective
pursuant to Section 11.3, as such amount may be modified from time to time
pursuant to the terms hereof.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Borrower or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.6.
"Default" means an event described in Article VII.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Base Rate" means, with respect to a Eurodollar Loan for the
relevant Interest Period, the rate at which the Lender offers to place deposits
in U.S. dollars with first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of the Lender's portion of
the relevant Eurodollar Loan and having a maturity approximately equal to such
Interest Period.
"Eurodollar Loan" means a Loan that bears interest at a Eurodollar
Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Loan for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) 3/8% per annum. The Eurodollar Rate shall be rounded to the next higher
multiple of 1/16 of 1% if the rate is not such a multiple.
"Existing Credit Agreement" means that certain Second Amended and
Restated Credit Agreement dated as of February 27, 1998, as amended, among the
Borrower, the lenders party thereto and The First National Bank of Chicago, as
Agent.
"Existing L/Cs" means, collectively, the Irrevocable Standby Letters of
Credit issued by the Lender for the account of the Borrower pursuant to the
Existing Credit Agreement and the Applications, which are more specifically
described in Annex I hereto, as the same may be amended, modified, renewed or
extended from time to time.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations that are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
property arising out of or in connection with the sale of the same or
substantially similar securities or property, (vi) capitalized lease
obligations, (vii) net liabilities under interest rate swap, exchange or cap
agreements, (viii) contingent obligations and (ix) any other obligation for
borrowed money or other financial accommodation which in accordance with
generally accepted accounting principles would be shown as a liability on the
consolidated balance sheet of such Person.
"Interest Period" means, with respect to a Eurodollar Loan, a period of
one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
that corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"L/C Obligations" means, at any date of determination, the sum of (i)
the aggregate undrawn amount of all Existing L/Cs outstanding as at such date of
determination, (ii) all amounts paid and disbursed by the Lender
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under the Existing L/Cs (or either thereof) that have not been reimbursed (with
the proceeds of a Loan or otherwise) by the Borrower and (iii) all unpaid fees,
expenses, reimbursements, indemnities and other obligations of the Borrower to
the Lender arising under or in connection with the Existing L/Cs and the
Applications.
"Lending Installation" means any office, branch, subsidiary or
affiliate of the Lender.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"Loan" means a borrowing hereunder (or a conversion or continuation
thereof).
"Loan Documents" means this Agreement, the Note, the Pledge Agreement
and the other documents and agreements contemplated hereby and executed by the
Borrower in favor of the Lender.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Lender thereunder.
"Note" is defined in Section 2.10.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lender
or any indemnified party arising under the Loan Documents.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, limited liability company, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pledge Agreement" means that certain Pledge Agreement dated of even
date herewith, in substantially the form of Annex II hereto, duly executed and
delivered to the Lender by the Borrower, as the same may be amended or modified
and in effect from time to time.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D of the Board of
Governors of the Federal Reserve System on Eurocurrency liabilities.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having
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ordinary voting power of which shall at the time be owned or controlled,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries, or (ii) any partnership,
limited liability company, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Termination Date" means May 20, 2000 or any earlier date on which the
Commitment is reduced to zero or otherwise terminated pursuant to the terms
hereof.
"Type" means, with respect to any Loan, its nature as an Alternate Base
Rate Loan or a Eurodollar Loan.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II -- THE CREDITS
2.1. Commitment; Reduction of Commitment. From and including the date
of this Agreement and prior to the Termination Date, the Lender agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
from time to time in amounts which, when added to the amount of the then
outstanding L/C Obligations (after giving effect to any payment thereof made
with the proceeds of such Loans), shall not exceed, in the aggregate at any one
time outstanding, the Commitment. The Borrower may permanently reduce the
Commitment, in integral multiples of $100,000, upon at least five Business Days'
written notice to the Lender; provided, however, that the amount of the
Commitment may not be reduced below the aggregate principal amount of the
outstanding Loans.
2.2. Types of Loans; Minimum Amount; Lending Installations. Subject to
the terms of this Agreement, the Borrower may borrow, repay and reborrow at any
time prior to the Termination Date. The Loans may be Alternate Base Rate Loans
or Eurodollar Loans, or a combination thereof, selected by the Borrower in
accordance with Sections 2.5 and 2.6. Each Loan shall be in the minimum amount
of $100,000. The Lender may book the Loans at any Lending Installation, as
selected by the Lender. All terms of the Loan Documents shall apply to and may
be enforced by or on behalf of any such Lending Installation.
2.3. Principal Payments. The Borrower may from time to time pay,
without penalty or premium, in a minimum aggregate amount of $100,000, any
portion of the outstanding Alternate Base Rate Loans upon two Business Days'
prior notice to the Lender. The Borrower may from time to time pay, without
penalty or premium, all outstanding Eurodollar Loans, or, in a minimum aggregate
amount of $100,000 or any integral multiple thereof, any portion of the
outstanding Eurodollar Loans upon three Business Days' prior notice to the
Lender; provided, however, that if any such payment occurs, whether because of
acceleration, prepayment or otherwise, or a Eurodollar Loan is not made on the
date specified by the Borrower for any reason other than default by the Lender,
the Borrower will indemnify the Lender for any loss or cost incurred by it
resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurodollar
Loan. Any outstanding Loans and all other unpaid Obligations shall be paid in
full
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by the Borrower, and the Commitment to lend hereunder shall expire, on the
Termination Date.
2.4. Fees. The Borrower agrees to pay to the Lender a commitment fee
of 1/8% per annum on the daily unborrowed portion of the Commitment (with the
outstanding L/C Obligations being deemed usage of the Commitment) from the date
hereof to and including the Termination Date, payable on the last day of each
March, June, September and December hereafter and on the Termination Date. All
accrued fees shall be payable on the effective date of any termination of the
obligations of the Lender to make Loans hereunder.
2.5. Method of Selecting Types and Interest Periods for New Loans.
The Borrower shall select the Type of Loan and the Interest Period, if any,
applicable to each Loan from time to time. The Borrower shall give the Lender
irrevocable notice (a "Borrowing Notice") not later than 10:00 a.m. (Chicago
time) at least one Business Day before the Borrowing Date of each Alternate Base
Rate Loan and three Business Days before the Borrowing Date for each Eurodollar
Loan, specifying for each Loan: (i) the Borrowing Date, which shall be a
Business Day, (ii) the aggregate amount, (iii) the Type, and (iv) the Interest
Period, if any, applicable thereto. The Lender will make the funds available to
the Borrower at the Lender's address specified pursuant to Article XII.
2.6. Conversion and Continuation of Outstanding Loans. Alternate Base
Rate Loans shall continue as such unless and until converted into Eurodollar
Loans or are repaid. Each Eurodollar Loan shall continue until, and may not be
converted prior to, the end of the then applicable Interest Period therefor, at
which time such Eurodollar Loan shall be automatically converted into an
Alternate Base Rate Loan unless such Eurodollar Loan was repaid or the Borrower
shall have given the Lender irrevocable notice (a "Conversion/Continuation
Notice") requesting that, at the end of such Interest Period, such Eurodollar
Loan continue as such for the same or another Interest Period. The Borrower
shall give the Lender a Conversion/Continuation Notice prior to the date of the
requested conversion or continuation, but not later than the times identified in
Section 2.5 for Borrowing Notices, specifying for each Loan being converted or
continued: (i) the requested date which shall be a Business Day; (ii) the
aggregate amount and Type; and (iii) the amount and Type(s) of Loan(s) into
which such Loan is to be converted or continued and the duration of the Interest
Period, if any, applicable thereto.
2.7. Changes in Interest Rate. Each Alternate Base Rate Loan shall
bear interest, at the Alternate Base Rate, on the outstanding principal amount
thereof, for each day from and including the date such Loan is made or is
automatically converted from a Eurodollar Loan pursuant to Section 2.6 to but
excluding the date it is paid or is converted into a Eurodollar Loan pursuant to
Section 2.6. Changes in the Alternate Base Rate will take effect simultaneously
with each change in the Alternate Base Rate. Each Eurodollar Loan shall bear
interest on the outstanding principal amount thereof for each day during the
Interest Period applicable thereto from and including the first day of such
Interest Period to (but not including) the last day of such Interest Period at
the Eurodollar Rate applicable thereto. No Interest Period may end after the
Termination Date.
2.8. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.5 or 2.6, during the continuance of a Default or
Unmatured Default the Lender may, at its option, by notice to the Borrower,
declare that no Loan may be made as, converted into or continued as a Eurodollar
Loan. During the continuance of a Default, the Lender may, at its option, by
notice to the Borrower, declare that (i) each Eurodollar Loan shall bear
interest for the remainder of the applicable Interest Period at the rate
otherwise applicable to such Interest Period plus 2% per annum, and (ii) each
Alternate Base Rate Loan shall bear interest at a rate per annum equal to the
Alternate Base Rate in effect from time to time plus 2% per annum, provided
that, during the continuance of a Default under Section 7.2, 7.6 or 7.7, the
interest rates set forth in clauses (i) and (ii) above shall be applicable to
all Loans without any election or action on the part of the Lender.
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2.9. Method of Payment. All payments of the Obligations hereunder shall
be made, without setoff, deduction, or counterclaim, in immediately available
funds to the Lender at the Lender's address, by noon (local time) on the date
when due. The Lender is hereby authorized to charge the account of the Borrower
maintained with the Lender for each payment of principal, interest and fees as
it becomes due hereunder.
2.10. Noteless Agreement; Evidence of Indebtedness. The Lender shall
maintain in accordance with its usual practice an account or accounts in which
it will record (a) the amount of each Loan made hereunder, the Type thereof and
the Interest Period with respect thereto, (b) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to the
Lender hereunder and (c) the amount of any sum received by the Lender hereunder
from the Borrower. The entries maintained in such accounts shall be prima facie
evidence of the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Lender to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Obligations in accordance with their terms. The Lender may request
that the Loans be evidenced by a promissory note (a "Note"). In such event, the
Borrower shall prepare, execute and deliver to the Lender a Note payable to the
order of the Lender in a form supplied by the Lender. Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times (including after
any assignment pursuant to Section 11.3) be represented by one or more Notes
payable to the order of the payee named therein or any assignee pursuant to
Section 11.3, except to the extent that the Lender or any such assignee
subsequently returns any such Note for cancellation and requests that such Loans
once again be evidenced as described above.
2.11. Telephonic Notices. The Borrower hereby authorizes the Lender to
extend, convert or continue Loans, effect selections of Types of Loans and to
transfer funds based on telephonic notices made by any person or persons the
Lender in good faith believes to be acting on behalf of the Borrower. If the
Borrower's records differ in any material respect from the action taken by the
Lender, the records of the Lender shall govern absent manifest error.
2.12. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Alternate Base Rate Loan shall be payable on the last day of each March,
June, September and December, commencing with the first such date to occur after
the date hereof, on any date on which the Alternate Base Rate Loan is prepaid
due to acceleration or otherwise, and at maturity. Interest accrued on each
Eurodollar Loan shall be payable on the last day of its applicable Interest
Period, on any date on which the Eurodollar Loan is prepaid, whether by
acceleration or otherwise, and at maturity. Interest accrued on each Eurodollar
Loan having an Interest Period longer than three months shall also be payable on
the last day of each three-month interval during such Interest Period. Interest
and commitment fees shall be calculated for actual days elapsed on the basis of
a 360-day year. Interest shall be payable for the day a Loan is made but not for
the day of any payment if payment is received prior to noon (local time) at the
place of payment. If any payment of principal of or interest on a Loan shall
become due on a day which is not a Business Day, such payment shall be made on
the next succeeding Business Day and, in the case of a principal payment, such
extension of time shall be included in computing interest in connection with
such payment.
ARTICLE III -- CHANGE IN CIRCUMSTANCES
The Borrower agrees to pay to the Lender such amounts as will
compensate the Lender for any increase in the cost to the Lender of making or
maintaining any Loan hereunder or of maintaining the Commitment to make Loans
hereunder, by reason of a change in any reserve (except Reserve Requirements),
tax, capital guidelines, special deposit, or similar requirement with respect to
assets of, deposits with or for the account of,
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or credit extended by, or commitments extended by, the Lender which are imposed
on, or deemed applicable by, the Lender, under any law, treaty, rule, regulation
(including, without limitation, Regulation D of the Board of Governors of the
Federal Reserve System), any interpretation thereof by any governmental, fiscal,
monetary or other authority charged with the administration thereof or having
jurisdiction over such Loan or the Lender, or any requirement imposed by any
such authority, whether or not having the force of law. Such additional amounts
shall be payable on demand. The Lender may suspend the availability of any Type
of Eurodollar Loan if maintenance of such Loan at a suitable Lending
Installation becomes illegal or if deposits matching such Loan are unavailable
to the Lender or if the Eurodollar Rate fails to reflect the cost to the Lender
of making or maintaining such Loan.
ARTICLE IV -- CONDITIONS PRECEDENT
4.1. Initial Loan. The Lender shall not be required to make the
initial Loan hereunder unless the Borrower has furnished to the Lender the
following: (i) a Note payable to the Lender, if so requested by the Lender; (ii)
the Pledge Agreement, together with all Pledged Instruments (as defined therein)
(which Pledged Instruments shall have a fair market value of not less than
$3,100,000); (iii) evidence satisfactory to the Lender that the Existing Credit
Agreement shall have been terminated and that all indebtedness, obligations and
liabilities arising thereunder or in connection therewith (other than in respect
of the Existing L/Cs) shall have been paid in full; (iv) ratification, in form
and substance satisfactory to the Lender, of each Application for Irrevocable
Standby Letter of Credit and Security and Reimbursement Agreement for
Irrevocable Standby Letter of Credit (as the same may be amended or modified
from time to time, collectively the "Applications") executed and delivered by
the Borrower in connection with the Existing L/Cs; (v) payment in full of an
arrangement fee in the amount of $5,000; and (vi) such opinions of counsel,
certificates of incumbency, resolutions, by-laws and articles of incorporation
and such other closing documents as the Lender has requested.
4.2. Each Loan. The Lender shall not be required to make any Loan
(other than a Loan that, after giving effect thereto and to the application of
the proceeds thereof, does not increase the aggregate amount of outstanding
Loans), unless on the applicable Borrowing Date: (i) there exists no Default or
Unmatured Default; (ii) the representations and warranties contained in Article
V are true and correct as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty shall be true and correct on and as
of such earlier date; and (iii) all legal matters incident to the making of such
Loan shall be satisfactory to the Lender and its counsel. Each Borrowing Notice
with respect to each such Loan shall constitute a representation and warranty by
the Borrower that the conditions contained in Sections 4.2(i) and (ii) have been
satisfied. The Lender may require a duly completed compliance certificate as a
condition to making a Loan.
ARTICLE V -- REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
5.1. Corporate Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery
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by the Borrower of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate (i) any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any of its Subsidiaries or (ii) the
Borrower's or any Subsidiary's articles of incorporation or by-laws, or (iii)
the provisions of any indenture, instrument or agreement to which the Borrower
or any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in, or require, the creation or imposition of any Lien in, of or on the
Property of the Borrower or a Subsidiary pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, adjudication, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, or other action in respect of any governmental or public
body or authority, or any subdivision thereof, which has not been obtained by
the Borrower or any of its Subsidiaries, is required to be obtained by the
Borrower or any of its Subsidiaries in connection with the execution and
delivery of the Loan Documents, the borrowings under this Agreement, the pledge
of collateral under the Pledge Agreement, the payment and performance by the
Borrower of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
5.4. Financial Statements. The December 31, 1997, consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lender were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Borrower and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
5.5. Material Adverse Change. Since December 31, 1997, there has been
no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect.
5.6. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.7. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. Neither the Borrower
nor any Subsidiary has received any notice to the effect that its operations are
not in material compliance with any of the requirements of applicable federal,
state and local environmental, health and safety statutes and regulations or the
subject of any federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or hazardous waste or
substance into the environment, which non-compliance or remedial action could
reasonably be expected to have a Material Adverse Effect.
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5.8. Regulations. Margin stock (as defined in Regulation U of the Board
of Governors of the Federal Reserve System) constitutes less than 25% of the
value of those assets of the Borrower and its Subsidiaries that are subject to
any limitation on sale, pledge, or other restriction hereunder. Neither the
Borrower nor any Subsidiary is (i) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended or (ii) a "holding company" or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
ARTICLE VI -- COVENANTS
During the term of this Agreement, unless the Lender shall otherwise
consent in writing:
6.1. Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lender:
(a) Within 90 days after the close of each of its fiscal years, an
unqualified audit report certified by independent certified public accountants,
acceptable to the Lender, prepared in accordance with generally accepted
accounting principles on a consolidated and consolidating basis (consolidating
statements need not be certified by such accountants) for itself and the
Subsidiaries, including balance sheets as of the end of such period, related
profit and loss and reconciliation of surplus statements, and a statement of
cash flows, accompanied by (i) any management letter prepared by said
accountants, and (ii) a certificate of said accountants that, in the course of
their examination necessary for their certification of the foregoing, they have
obtained no knowledge of any Default or Unmatured Default, or if, in the opinion
of such accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof.
(b) Within 45 days after the close of the first three quarterly periods
of each of its fiscal years, for itself and the Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of each such period and
consolidated and consolidating profit and loss and reconciliation of surplus
statements and a statement of cash flows for the period from the beginning of
such fiscal year to the end of such quarter, all certified by its chief
financial officer.
(c) Together with the financial statements required hereunder, a
compliance certificate (in a form approved by the Lender) signed by its chief
financial officer stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status thereof.
(d) Promptly upon (i) the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy statements so
furnished and (ii) the filing thereof, copies of all registration statements and
annual, quarterly, monthly or other regular reports which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission.
(e) Such other information (including non-financial information) as the
Lender may from time to time reasonably request.
6.2. Affirmative Covenants. The Borrower will, and will cause each
Subsidiary to:
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(a) Use the proceeds of the Loans to repay L/C Obligations, to repay
outstanding Loans and for working capital purposes. The Borrower will not, nor
will it permit any Subsidiary to, use any of the proceeds of the Loans to
purchase or carry any "margin stock" (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) or to make any other acquisition.
(b) Give prompt notice in writing to the Lender of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
(c) Carry on and conduct its business in substantially the same manner
and in substantially the same fields of enterprise as it is presently conducted
and do all things necessary to remain duly incorporated, validly existing and in
good standing as a domestic corporation in its jurisdiction of incorporation and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
(d) Timely file complete and correct United States federal and
applicable foreign, state and local tax returns required by law and pay when due
all taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside.
(e) Comply with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject.
(f) Permit the Lender, by its respective representatives and agents, to
inspect any of the Property, books and financial records of the Borrower and
each Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and each Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Subsidiary with, and to
be advised as to the same by, their respective officers at such reasonable times
and intervals as the Lender may designate.
6.3. Negative Covenant. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except that a
Subsidiary may merge with the Borrower or a wholly-owned Subsidiary.
ARTICLE VII -- DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lender under or in
connection with this Agreement, any Loan, or any certificate or information
delivered in connection with this Agreement or any other Loan Document shall be
materially false on the date as of which made.
7.2. Nonpayment of principal of any Loan when due, or nonpayment of
interest upon any Loan or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes due.
7.3. The breach by the Borrower of any of the terms or provisions of
this Agreement which is not
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remedied within fifteen days after written notice from the Lender.
7.4. Failure of the Borrower or any of its Subsidiaries to pay any
Indebtedness when due; or a default shall occur under any agreement governing
any Indebtedness of the Borrower or any Subsidiary or any other event shall
occur or condition shall exist, the effect of which default, event or condition
is to cause, or to permit the holder or holders of such Indebtedness to cause,
such Indebtedness to become due prior to its stated maturity; or any
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or the
Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.5. The Pledge Agreement shall for any reason fail to create a valid
first priority interest in the collateral purported to be covered thereby or
shall fail to remain in full force and effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability thereof or the
Borrower shall fail to comply with any of the terms or provisions thereof.
7.6. The Borrower or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any substantial portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate or partnership action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (vi) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of the Borrower or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
substantial portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 30 consecutive days.
7.8. Any reportable event (as defined in Section 4043 of ERISA) shall
occur in connection with any Plan.
7.9. The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $50,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.10. ▇▇▇▇▇▇▇ ▇▇▇▇▇ or a trust for the benefit of ▇▇▇▇▇▇▇ ▇▇▇▇▇ or his
spouse or descendants, partnership or limited liability company (in each case,
controlled by ▇▇▇▇▇▇▇ ▇▇▇▇▇) shall cease to own, free and clear of all Liens
(other than Liens in favor of the Lender) at least 25% of the outstanding shares
of voting stock of SGH Holdings, Inc. on a fully diluted basis or SGH Holdings,
Inc. shall cease to own, free and clear of all Liens or other encumbrances, 100%
of the outstanding shares of voting stock of the Borrower on a fully diluted
basis.
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ARTICLE VIII -- ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligation of the Lender to make Loans
hereunder shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of the Lender.
If any other Default occurs, the Lender may terminate or suspend the obligations
to make Loans hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any kind, all of which the
Borrower hereby expressly waives.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Lender and the Borrower may enter into agreements supplemental hereto for the
purpose of amending the Loan Documents in any manner or waiving any Default
hereunder.
8.3. Preservation of Rights. No delay or omission of the Lender to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lender, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Lender until the
Obligations have been paid in full.
ARTICLE IX -- GENERAL PROVISIONS
9.1. Entire Agreement; Severability of Provisions. The Loan Documents
embody the entire agreement and understanding between the Borrower and the
Lender and supersede all prior agreements and understandings between the
Borrower and the Lender relating to the subject matter thereof. Any provision in
any Loan Document that is held to be inoperative, unenforceable, or invalid in
any jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.2. Benefits of this Agreement. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns, provided, however,
that the parties hereto expressly agree that First Chicago Capital Markets, Inc.
(the Arranger") shall enjoy the benefits of the provisions of Section 9.3 to the
extent specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and in its own name to the same extent as if it
were a party to this Agreement
9.3. Expenses; Indemnification. The Borrower shall reimburse the
Lender and the Arranger for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of attorneys for the
Lender, which attorneys may be employees of the Lender) paid or incurred by the
Lender or the Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Arranger and the Lender for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time
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charges of attorneys for the Arranger and the Lender, which attorneys may be
employees of the Arranger or the Lender) paid or incurred by the Arranger or the
Lender in connection with the collection and enforcement of the Loan Documents.
The Borrower further agrees to indemnify the Arranger and the Lender, its
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor whether or not the Arranger
or the Lender is a party thereto) which any of them may pay or incur arising out
of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder except to the extent that they
are determined in a final non- appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the party seeking indemnification. The obligations of the Borrower under this
Section shall survive the termination of this Agreement.
9.4. Survival of Representations; Taxes. All representations and
warranties of the Borrower contained in this Agreement shall survive delivery of
the Note and the making of the Loans herein contemplated. Any taxes (excluding
federal income taxes on the overall net income of the Lender) or other similar
assessments or charges made by any governmental or revenue authority in respect
of the Loan Documents shall be paid by the Borrower, together with interest and
penalties, if any.
ARTICLE X -- SETOFF
In addition to, and without limitation of, any rights of the Lender
under applicable law, if the Borrower becomes insolvent, however evidenced, or
any Default occurs, any and all deposits (including all account balances,
whether provisional or final and whether or not collected or available) and any
other Indebtedness at any time held or owing by the Lender or any affiliate of
the Lender to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to the Lender, whether or
not the Obligations, or any part hereof, shall then be due.
ARTICLE XI -- ASSIGNMENTS; PARTICIPATIONS
11.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lender and their respective successors and assigns, except that (i) the Borrower
shall not have the right to assign its rights or obligations under the Loan
Documents and (ii) any assignment by the Lender must be made in compliance with
Section 11.3. Notwithstanding clause (ii) of this Section, the Lender may at any
time, without the consent of the Borrower, assign all or any portion of its
rights under this Agreement and any Note to a Federal Reserve Bank; provided,
however, that no such assignment to a Federal Reserve Bank shall release the
transferor Lender from its obligations hereunder. Any assignee or transferee of
the rights to any Loan or any Note agrees by acceptance thereof to be bound by
all the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder, transferee or assignee of the rights to such Loan.
11.2. Participations. The Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or more
banks or other entities ("Participants") participating interests in any Loan
owing to it, any Note held by it, the Commitment or any other interest of the
Lender under the Loan Documents. In the event of any such sale by the Lender of
participating interests to a Participant, the Lender's obligations under the
Loan Documents shall remain unchanged, the Lender shall remain solely
responsible to the
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other parties hereto for the performance of such obligations, the Lender shall
remain the owner of its Loans and the holder of any Note issued to it in
evidence thereof for all purposes under the Loan Documents, all amounts payable
by the Borrower under this Agreement shall be determined as if the Lender had
not sold such participating interests, and the Borrower and the Lender shall
continue to deal solely and directly with each other in connection with the
Lender's rights and obligations under the Loan Documents. The Borrower agrees
that each Participant shall be deemed to have the right of setoff provided in
Article X in respect of its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided that
the Lender shall retain the right of setoff provided in Article X with respect
to the amount of participating interests sold to each Participant. The Lender
agrees to share with each Participant, and each Participant, by exercising the
right of setoff provided in Article X, agrees to share with the Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Article X as if each Participant were a Lender.
11.3. Assignments. The Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("Purchasers") all or any part of its rights and
obligations under the Loan Documents. The Borrower hereby agrees to execute any
amendment and/or any other document that may be necessary to effectuate such an
assignment. Such assignment shall be evidenced by the Lender's standard form (to
be supplied upon request). The consent of the Borrower shall be required prior
to an assignment becoming effective with respect to a Purchaser that is not a
Lender or an affiliate thereof; provided, however, that if a Default has
occurred and is continuing, the consent of the Borrower shall not be required.
Such consent shall not be unreasonably withheld. Upon delivering to the Borrower
a notice of assignment, together with any required consent, such assignment
shall become effective on the effective date specified in such notice of
assignment. On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Lender party to the other Loan Documents and shall
have all the rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further consent or
action by the Borrower shall be required to release the Lender with respect to
the percentage of the Commitment and Loans assigned to such Purchaser. Upon the
consummation of any such assignment to a Purchaser, the transferor Lender, the
Lender and the Borrower shall, if the Lender or the Purchaser desires, make
appropriate arrangements so that new Notes or, as appropriate, replacement
Notes, are issued to the Lender and Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment.
11.4. Dissemination of Information; Tax Treatment. The Borrower
authorizes the Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in the
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries. If any interest in any Loan Document is transferred to any
Transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to deliver to
the Lender such completed forms with respect to withholding taxes as the
Borrower may reasonably require.
ARTICLE XII -- NOTICES
All notices, requests and other communications to any party hereunder
shall be in writing (including bank wire, telex, facsimile transmission or
similar writing) and shall be given to such party: (x) in the case of the
Borrower or the Lender, at its address, facsimile number or telex number set
forth on the signature pages hereof, or (y) in the case of any party, such other
address, facsimile number or telex number as such party may
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hereafter specify for the purpose by notice to the other. Each such notice,
request or other communication shall be effective (i) if given by telex, when
such telex is transmitted to the telex number specified in this Section and the
appropriate answerback is received, (ii) if given by facsimile transmission,
when transmitted to the facsimile number specified in this Section and
confirmation of receipt is received, (iii) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (iv) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Lender under
Article II shall not be effective until received.
ARTICLE XIII -- COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower and the
Lender.
ARTICLE XIV -- GOVERNING LAW; JURISDICTION; JURY TRIAL WAIVER
14.1. CHOICE OF LAW; CONSENT TO JURISDICTION. THE LOAN DOCUMENTS (OTHER
THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS. THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION
OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE LENDER TO BRING
PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE LENDER OR ANY AFFILIATE THEREOF
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS.
14.2. WAIVER OF JURY TRIAL. THE BORROWER AND THE LENDER HEREBY WAIVE
TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP
ESTABLISHED THEREUNDER.
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IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement as of the date first above written.
TRI-STATE OUTDOOR MEDIA GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Print Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
Title: CFO
-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer
Commitment
$3,000,000 THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇
----------------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇▇
---------------------------------
Title: VICE PRESIDENT
-------------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
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ANNEX I
EXISTING L/C's
Letter of Credit Date of Expiry
No. Issuance Amount Date Beneficiary
---------------- -------- ------ ------ -----------
00324651 2/27/98 $1,250,000 8/27/00 Transfinance Bank
▇▇▇▇▇▇▇▇ 7/28/97 $ 25,000 7/15/98 SCDOT
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ANNEX II
PLEDGE AGREEMENT
This Pledge Agreement (the "Pledge Agreement") dated as of May 20, 1998
is made by Tri-State Outdoor Media Group, Inc., a Kansas corporation (the
"Borrower"), in favor of The First National Bank of Chicago and its domestic and
foreign offices, branches, subsidiaries and affiliates (collectively, the
"Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender have entered into that certain
Credit Agreement dated of even date herewith (as amended or modified from time
to time, the "Credit Agreement"; capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to such terms in the Credit
Agreement) pursuant to which the Lender has agreed to make certain loans (the
"Loans") to the Borrower from time to time;
WHEREAS, it is a condition precedent, among others, to the making of
Loans under the Credit Agreement that the Borrower execute and deliver this
Pledge Agreement;
WHEREAS, the Lender has heretofore issued, on behalf of the Borrower,
certain standby letters of credit (as the same may be amended, modified, renewed
or extended from time to time, each an "Existing L/C" and collectively the
"Existing L/C's") pursuant to certain Applications for Irrevocable Standby
Letters of Credit and Security and Reimbursement Agreements for Irrevocable
Standby Letter of Credit (as the same may be amended or modified from time to
time, collectively the "Applications");
WHEREAS, the Borrower and the Lender have heretofore entered into a
certain Interest Exchange Agreement dated as of May 14, 1997 (as amended,
modified or supplemented from time to time, the "Rate Hedging Agreement");
WHEREAS, in order to (i) induce the Lender to make Loans under the
Credit Agreement and (ii) secure the Secured Obligations (as hereinafter
defined), the Borrower desires to so execute and deliver this Pledge Agreement;
and
WHEREAS, the Borrower has delivered to the Lender and confirms the
delivery to the Lender of Pledged Instruments (as hereinafter defined) in an
amount equal to at least $3,100,000;
NOW, THEREFORE, in consideration of the premises herein contained, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Borrower hereby agrees as follows:
1. The term "Pledged Instruments" as used herein shall mean and include
all certificates of deposit issued and held by the Lender whether now owned or
hereafter acquired by the Borrower or in which the Borrower at any time has any
interest up to the amount of $3,100,000, and shall also mean and include the
certificates of deposit listed on Exhibit "A" hereto and any instrument or
deposit to which the Borrower shall become entitled for any reason whatsoever as
an addition to, in substitution for or in exchange or refunding of any or all of
such deposits or instruments of the Borrower and all proceeds thereof up to the
amount of
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$3,100,000.
2. To secure the prompt and complete payment of (i) the Obligations,
(ii) the L/C Obligations, (ii) any and all indebtedness and other liabilities
(including, without limitation, fees, interest and expenses (including
attorneys' fees and time charges of attorneys for the Lender, which attorneys
may be employees of the Lender)) of the Borrower to the Lender, direct and
indirect, absolute and contingent, under, arising out of, or in any way
connected with the Rate Hedging Agreement (the "Rate Hedging Obligations") and
(iv) the observance and performance of the other obligations, covenants and
agreements now or hereafter existing under this Pledge Agreement or under the
Credit Agreement, the other Loan Documents, the Applications or the Rate Hedging
Agreement (all hereinafter collectively called the "Secured Obligations"), the
Borrower hereby pledges, assigns, delivers and sets over to the Lender all of
the Pledged Instruments and hereby grants to the Lender a security interest in
the Pledged Instruments and in the proceeds thereof.
3. The Borrower authorizes the Lender and its employees and agents to
make such internal adjustments of its books and records as are necessary to
reflect the security interest granted hereunder, and the Borrower agrees to
execute and deliver from time to time such documents and instruments, and take
such other actions as are necessary or appropriate to ensure the Lender has a
first perfected security interest in the Pledged Instruments.
4. (i) If any Default (as hereinafter defined) has occurred and is
continuing, the Lender may: (a) require all interest on the Pledged Instruments
to be deposited in a special non-interest bearing cash collateral account with
the Lender and (b) at its option, apply the collected balances in said cash
collateral account to the payment of the Secured Obligations whether or not the
Secured Obligations shall then be due, or hold said cash collateral account as
further security for the Secured Obligations. The Borrower shall have no control
whatsoever over said cash collateral account and hereby grants to the Lender a
security interest in said cash collateral account if and when created.
(ii) If the Borrower shall become entitled to receive or shall
receive any certificate whether in substitution of, or in exchange for any of
the Pledged Instruments, or otherwise, the Borrower agrees to accept the same as
the Lender's agent and to hold the same in trust for the Lender and to deliver
the same forthwith to the Lender in the exact form received, with the
endorsement of the Borrower when necessary, to be held by the Lender, subject to
the terms hereof, as further security for the Secured Obligations.
5. Upon the occurrence of any Default, the Secured Obligations
(including, without limitation, to the extent permitted by the terms thereof,
any undrawn and unexpired Existing L/Cs) shall, at the election of the Lender
become forthwith due and payable, and in the case of a Default described in
Section 7.6 or 7.7 of the Credit Agreement, shall automatically become
immediately due and payable, all without demand, presentment, notice,
advertisement or protest of any kind, all of which (collectively, any "Notice")
are hereby expressly waived by the Borrower, and the Lender shall have the
right, without any Notice, to forthwith appropriate and realize upon the Pledged
Instruments, or any part thereof. The proceeds of any such appropriation or
realization shall be applied first, to the costs and expenses of every kind
(including, without limitation, the fees and expenses of outside and in-house
counsel to the Lender) incurred by the Lender in connection with the safekeeping
or liquidation of the Pledged Instruments and the collection and enforcement of
the Secured Obligations, second, to payment of any accrued and unpaid interest
and fees on the Secured Obligations, third, to payment of the principal of the
Secured Obligations, and fourth, to payment of any other Secured Obligations. In
the event the proceeds of any such appropriation or realization are insufficient
to pay all amounts to which the Lender is legally entitled, the Borrower will be
liable for the deficiency to the fullest extent permitted by law, together with
interest thereon, at a rate per annum equal to the sum of the Alternate Base
Rate plus 2% per
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annum, and for the reasonable fees and expenses of any attorneys employed by the
Lender (including, without limitation, the fees and expenses of outside and
in-house counsel to the Lender) to collect such deficiency.
"Default" means (i) any default in the payment of any Secured
Obligation when due, whether at maturity, by acceleration or otherwise; (ii) a
"Default" under and as defined in the Credit Agreement; or (iii) failure of the
Borrower to comply with any of the terms or provisions of this Pledge Agreement,
any of the Applications, the Rate Hedging Agreement or any other agreement
governing the creation or terms of any Secured Obligation.
6. The Borrower represents and warrants that as of the date hereof it
is the direct and beneficial owner of all of the Pledged Instruments. The
Borrower further represents and warrants that all of the Pledged Instruments are
owned by the Borrower free and clear of any pledge, mortgage, hypothecation,
lien, charge, encumbrance or any security interest in said Pledged Instruments
or the proceeds thereof, except for the security interest granted to the Lender
hereunder. The Borrower further represents and warrants that this Pledge
Agreement and delivery of the Pledged Instruments constitutes a valid first lien
on and perfected security interest in all of the Pledged Instruments and the
proceeds thereof, subject to no prior security interests, liens, charges or
encumbrances or to any agreement purporting to grant to any third party a
security interest in the property or assets of the Borrower which would include
the Pledged Instruments.
7. (i) The Borrower hereby covenants and agrees that so long as any of
the Secured Obligations shall be outstanding and unpaid (including, without
limitation, any undrawn and unexpired Existing L/C), in whole or in part, the
Borrower will not liquidate, withdraw or otherwise dispose of any of the Pledged
Instruments, nor will the Borrower create, incur or permit to exist any pledge,
mortgage, lien, charge, encumbrance or any security interest whatsoever with
respect to any of the Pledged Instruments or the proceeds thereof other than
that created hereby.
(ii) The Borrower warrants and will defend the right, title,
special property and security interest of the Lender in and to the Pledged
Instruments against the claims of any person, firm, corporation or other entity.
(iii) The Borrower hereby covenants and agrees that so long as
any of the Secured Obligations shall be outstanding and unpaid (including,
without limitation, any undrawn and unexpired Existing L/Cs), in whole or in
part, the aggregate amount of the Pledged Instruments shall at all times be
equal to at least $3,100,000. The Lender shall at all times have the right to
require from the Borrower that there shall be lodged with the Lender as security
for all existing Secured Obligations additional Pledged Instruments so that the
aggregate amount of the Pledged Instruments shall at all times be equal to at
least $3,100,000.
8. No course of dealing between the Borrower and the Lender, nor any
failure to exercise, nor any delay in exercising, on the part of the Lender, any
right, power or privilege hereunder or under any of the Applications or any
other instruments delivered by the Borrower to the Lender shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or thereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein provided and provided in the Credit Agreement, the other Loan Documents,
the Applications, the Rate Hedging Agreement and in all other agreements,
instruments and documents delivered, or to be delivered, in connection therewith
are cumulative and are in addition to, and not exclusive of, any rights or
remedies provided by law, including, without limitation, the rights and remedies
of a secured party under the Uniform Commercial Code. The provisions of this
Pledge Agreement are severable and if any clause or provision hereof shall be
held invalid or unenforceable in whole or in part then such invalidity or
unenforceability shall attach only to such clause or provision, or part thereof,
and shall not in any manner affect such clause or provision in any other
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jurisdiction or any other clause or provision in this Pledge Agreement in any
jurisdiction.
9. This Pledge Agreement shall inure to the benefit of the Borrower and
the Lender and their respective successors and assigns, except that the Borrower
shall not assign this Pledge Agreement without the prior written consent of the
Lender.
10. The Borrower agrees to reimburse the Lender promptly upon demand
for any and all costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Lender, which attorneys
may be employees of the Lender) paid or incurred by the Lender in connection
with the preparation, review, execution, delivery, amendment, modification,
collection and enforcement of this Pledge Agreement. The obligations of the
Borrower under this Section 10 shall survive the termination of this Pledge
Agreement.
11. This Pledge Agreement shall become effective as of the date first
above written upon the Lender's receipt of the following:
(i) A counterpart of this Pledge Agreement duly executed by
the Borrower.
(ii) Evidence, satisfactory to the Lender, that the Borrower
and its appointed signatory have been appropriately
authorized to execute this Pledge Agreement and to pledge
the Pledged Instruments hereunder.
(iii) An incumbency certificate, executed by the Secretary, an
Assistant Secretary or other appropriate person of the
Borrower, which shall identify by name and title and bear
the signature of the appointed signatory of the Borrower
authorized to sign this Pledge Agreement, upon which
certificate the Lender shall be entitled to rely until
informed of any change in writing by the Borrower.
(iv) Such other documents as the Lender or its counsel may
reasonably request.
12. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE
OF ILLINOIS.
13. THE BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY
LOCAL, STATE, OR FEDERAL COURT LOCATED WITHIN THE CITY OF CHICAGO, ILLINOIS AND
WAIVES ANY OBJECTION WHICH THE BORROWER MAY HAVE BASED ON IMPROPER VENUE OR
FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT AND
CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED TO IT
AT THE ADDRESS SET FORTH BELOW ITS SIGNATURE HERETO. NOTHING CONTAINED IN THIS
SECTION SHALL AFFECT THE RIGHT OF THE LENDER TO BRING ANY ACTION OR PROCEEDING
AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.
THE BORROWER AND THE LENDER WAIVE THEIR RIGHT TO TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING RELATING TO OR IN ANY WAY ARISING OUT OF THIS PLEDGE AGREEMENT.
14. All notices and other communications provided to any party
hereto under this Pledge Agreement shall be in writing or by telex or by
facsimile and addressed or delivered to such party at its address
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set forth below its signature hereto or at such other address as may be
designated by such party in a notice to the other party. Any notice, if mailed
and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes and
electronic or telephonic confirmation in the case of facsimiles). The parties
hereto may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
IN WITNESS WHEREOF, the Borrower has executed this Pledge
Agreement in favor of the Lender as of the date first above written.
TRI-STATE OUTDOOR MEDIA GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Title: CFO
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▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇▇▇ ,
------------------------
Accepted:
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Title: VICE PRESIDENT
------------------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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EXHIBIT "A"
CERTIFICATES OF DEPOSIT
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SCHEDULE "1"
LIENS
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RATIFICATION AND REAFFIRMATION OF
APPLICATIONS
THIS RATIFICATION AND REAFFIRMATION OF APPLICATIONS (this
"Ratification") is entered into as of May 20, 1998 by TRI-STATE OUTDOOR MEDIA
GROUP, INC. (the "Applicant"), for the benefit of THE FIRST NATIONAL BANK OF
CHICAGO (the "Issuer").
WHEREAS, TRI-STATE OUTDOOR MEDIA GROUP, INC. (the "Borrower"), certain
LENDERS and The First National Bank of Chicago entered into that certain Second
Amended and Restated Credit Agreement dated as of February 27, 1998 (the
"Existing Credit Agreement"), as amended pursuant to which certain letters of
credit were issued by the Issuer upon the application of the Applicant (the
"Existing Facility L/Cs");
WHEREAS, in connection with the Existing L/Cs, the Applicant executed
and delivered to the Issuer those certain Applications for Irrevocable Standby
Letter of Credit and Security and Reimbursement Agreement for Irrevocable
Standby Letter of Credit dated July 28, 1997 and February 27, 1998, respectively
(collectively, the "Applications");
WHEREAS, the Applicant and the Issuer have entered into a Credit
Agreement dated of even date herewith (the "Credit Agreement");
WHEREAS, it is a condition precedent, among others, to the making of
any loan under the Credit Agreement that this ratification of the Applications
be executed and delivered by the Applicant; and
WHEREAS, the Applicant expects to realize direct benefits as a result
of the contemplated loans under the Credit Agreement and therefore desires to
deliver this Reaffirmation to satisfy such condition precedent;
NOW, THEREFORE, in consideration of the undertakings set forth herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the Applicant hereby:
(i) acknowledges receipt of a copy of the Credit Agreement,
(ii) acknowledges and agrees that neither the termination of
the Existing Credit Agreement nor the terms of the
Credit Agreement shall release, discharge, or otherwise
limit or affect in any manner any of its obligations
under or in connection with Applications or the
Existing L/Cs,
(iii) ratifies and reaffirms all of the terms and provisions
of, and all of its obligations under, the Applications
and the Existing L/Cs, and
(iv) agrees to pay the fees set forth on Exhibit "A" hereto.
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IN WITNESS WHEREOF, the Pledgor has executed this Ratification as of
the date first above written.
TRI-STATE OUTDOOR MEDIA GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer
ACCEPTED:
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
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EXHIBIT "A"
L/C FEES