EXHIBIT 10.1
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 30, 2002,
BY AND BETWEEN
EXCELSIOR RADIO NETWORKS, INC.,
AS BORROWER
AND
SUNSHINE II, LLC,
AS LENDER
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SCHEDULES
Schedule 3.8 Transactions with Affiliates
Schedule 3.9 Permitted Management Fees
Schedule 5.3(A) Jurisdiction of Organization
Schedule 5.3(C) Qualification to Transact Business
Schedule 5.4 Governmental Approvals
Schedule 5.9 Litigation, Etc.
Schedule 5.10 Labor Matters
Schedule 5.15 Certain Agreements and Material Contracts
Schedule 5.16 Title to Properties
Schedule 5.17 Subsidiaries and Affiliates
EXHIBITS
Exhibit 1.1(a) Form of Original Note
Exhibit 1.1(b) Form of New Note
Exhibit 4.1(b) Form of Compliance Certificate
INDEX OF DEFINED TERMS
Defined Term Defined in Section
------------ ------------------
Accounting Changes ss.4.2
Adjusted Purchase Price ss. 9.1
Affiliate ss.9.1
Agreement ss.9.1
Amended Note ss.1.1(a)
Applicable Law ss.9.1
Asset Disposition ss.9.1
Bankruptcy Code ss.9.1
Borrower Preamble
Business Day ss.9.1
Capital Lease ss.9.1
Cash Equivalents ss.9.1
Change ss.9.1
Change Note ss.9.1
Closing Date ss.9.1
Collateral ss.9.1
Compliance Certificate ss.4.1(b)
Contingent Obligation ss.9.1
Default ss.9.1
Dial ss.9.1
Dial Security Agreement ss.9.1
Environmental Laws ss.9.1
Event of Default ss.6.1
Borrower Preamble
GAAP ss.9.1
Governmental Approvals ss.9.1
Governmental Authority ss.9.1
Guarantee ss.9.1
Indebtedness ss.9.1
Indemnitees ss.8.1
Intellectual Property Rights ss.5.8
Investment ss.9.1
IRC ss.9.1
Lender Preamble
Lien ss.9.1
Loan Documents ss.9.1
Loan(s) ss.9.1
Material Adverse Effect ss.9.1
Material Contracts ss.9.1
Maturity Date ss.9.1
Net Proceeds ss.9.1
New Loan ss.1.1(b)
New Note ss.1.1(b)
New Security Agreement ss.9.1
Note(s) ss.9.1
Obligations ss.9.1
Original Loan ss.1.1(b)
Original Note ss.1.1(b)
Original Security Agreement ss.9.1
Permitted Encumbrances ss.9.1
Person ss.9.1
Prime Rate ss.9.1
Restricted Junior Payment ss.9.1
Sassower Trust Preamble
Security Agreements ss.9.1
Security Documents ss.9.1
Security Interest ss.9.1
Statement ss.4.1(a)(3)
Subsidiary ss.9.1
Tax Liabilities ss.1.6(a)
CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of September
30, 2002, among EXCELSIOR RADIO NETWORKS, INC., a Delaware corporation having an
address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), and
SUNSHINE II, LLC, a Colorado limited liability company having an address at ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Lender").
Capitalized terms used and not otherwise defined herein shall have the meanings
given to them in SUBSECTION 9.1 below.
R E C I T A L S:
- - - - - - - -
WHEREAS, Lender has, prior to the date hereof, advanced the Original
Loan to Borrower upon the terms and conditions set forth in Original Note; and
WHEREAS, Borrower and Lender wish to amend and restate the terms and
conditions of the Original Note upon the terms and conditions set forth in the
Amended Note and in the other Loan Documents; and
WHEREAS, Lender has agreed to finance the New Loan to the Borrower
upon the terms set forth in, and for the uses as provided in the Loan Documents;
and
WHEREAS, in consideration of the benefit of the New Loan and the
refinancing of the Original Loan Dial intends to guarantee the obligations of
the Borrower under the Loan Documents; and
WHEREAS, the Borrower and Dial intend to secure all of their
Obligations (including the obligations of Dial as a Guarantor) under the Loan
Documents by granting to Lender a first priority (unless otherwise set forth in
the Loan Documents) security interest in and lien upon all of their now owned or
hereafter acquired accounts receivable.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto do hereby agree, as follows:
SECTION 1. AMOUNTS AND TERMS OF LOANS
1.1 Loans. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
Borrower contained herein and in the other Loan Documents:
(a) Original Loan. Lender agrees to amend and restate, on
the Closing Date, the Original Note in the amount of Five Hundred Thousand
Dollars ($500,000) (the "Original Loan"), provided all conditions precedent set
forth in Section 7 are satisfied or waived. Amounts borrowed under this
Subsection 1.1(a) that are repaid or prepaid may not be reborrowed. Borrower
shall execute and deliver to Lender the amended and restated original note in
the form attached to this Agreement as EXHIBIT 1.1(A) (the "Amended Note"),
dated the Closing Date, in the principal amount of the Original Loan.
(b) New Loan. Lender agrees to lend to Borrower, on the
Closing Date, the sum of Two Million Two Hundred Fifty Thousand Dollars
($2,250,000) (the "New Loan"), provided all conditions precedent set forth in
Section 7 are satisfied or waived. Amounts borrowed under this Subsection 1.1(b)
that are repaid or prepaid may not be reborrowed. Borrower shall execute and
deliver to Lender the note in the form attached to this Agreement as EXHIBIT
1.1(B) (the "New Note"), dated the Closing Date, in the principal amount of the
New Loan.
(c) Advances. The New Loan will be made available by wire
transfer of immediately available funds. Borrower hereby authorizes Lender to
wire the New Loan amount to Change in accordance with the instructions set forth
below:
Bank Name: JPMorgan Chase
Bank Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
ABA: ▇▇▇▇▇▇▇▇▇
Account: 530-599961
Account Name: Change Technology Partners
1.2 Interest.
(a) Interest. Commencing as of the Closing Date, the Loans
shall accrue interest at a rate equal to the Prime Rate plus two hundred (200)
basis points.
(b) Calculation and Payment. Interest on the Loans shall be
calculated on the basis of a three hundred sixty-five (365) day year for the
actual number of days elapsed. The date of payment of any Loan or interest on
any Loan shall be excluded from the calculation of interest. Interest accruing
on each Loan is payable in arrears on each of the following dates or events: (i)
the last day of each calendar quarter commencing December 31, 2002; (ii) the
prepayment of such Loan (or portion thereof); and (iii) the applicable Maturity
Date whether by acceleration or otherwise.
(c) Default Rate of ▇▇▇▇▇▇▇▇.▇▇ the election of Lender,
after the occurrence of an Event of Default and for so long as it continues, all
Loans and other Obligations shall bear interest at the rate of eighteen percent
(18%) per annum.
(d) Excess Interest. Notwithstanding anything to the
contrary set forth herein, the aggregate interest, fees and other amounts
required to be paid by Borrower to Lender are hereby expressly limited so that
in no contingency or event whatsoever, whether by reason of acceleration of
maturity of the Indebtedness evidenced hereby or otherwise, shall the amount
paid or agreed to be paid to Lender for the use or the forbearance of the
Indebtedness or Obligations evidenced hereby exceed the maximum permissible
under applicable law. If under or from any circumstances whatsoever, fulfillment
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of any provision hereof or of any of the other Loan Documents at the time of
performance of such provision shall be due, shall involve exceeding the limit
permitted by applicable law then the obligation to be fulfilled shall
automatically be reduced to the limit permitted, and if under or from
circumstances whatsoever Lender should ever receive as interest any amount which
would exceed the highest lawful rate, the amount of such interest that is
excessive shall be applied to the reduction of the principal balance of the
Obligations evidenced hereby and not to the payment of interest. In the event of
a conflict, this provision shall control every other provision of this Agreement
and all provisions of every other Loan Document.
1.3 Use of Proceeds. Borrower agree that the proceeds of
the Loans shall be used only in accordance with the following:
(a) The proceeds of the New Loan shall be applied on the
Closing Date to repay all principal and any accrued and unpaid interest due on
the Change Note.
(b) Borrower and Lender agree that the indebtedness under
the Original Note shall remain outstanding following the Closing but that the
terms and conditions of the Original Note shall be amended and restated as set
forth in this Agreement, the Amended Note, and the other Loan Documents.
1.4 Fees and Expenses. Borrower agrees to pay promptly all
reasonable and documented out-of-pocket fees, costs and expenses (including
those reasonable fees and expenses of attorneys) incurred by Lender in
connection with (A) any matters contemplated by or arising out of the Loan
Documents, (B) the examination, review, due diligence investigation,
documentation, negotiation and closing of the transactions contemplated herein;
(C) the continued administration of the Loan Documents, including any such fees,
costs and expenses incurred in perfecting, maintaining, determining the priority
of and releasing any security, any tax (of the type discussed in Subsection
7.8(b)) payable in connection with any Loan Documents and any amendments,
modifications and waivers; (D) any amendment, supplement, waiver or modification
of any of the Loan Documents; and (E) any Default and any enforcement of
collection proceeding resulting therefrom or any workout or restructuring of any
of the transactions hereunder or contemplated thereby or any action to enforce
any Loan Document or to collect any payments due from Borrower. All fees, costs
and expenses for which Borrower is responsible shall be deemed part of the
Obligations when incurred, payable upon demand and in accordance with Subsection
1.6(f), and secured by the Collateral. Following an Event of Default, any fees,
costs and expenses which are not paid within thirty (30) days of presentment,
may be debited and added to the principal amount of the Loans without notice.
Anything herein to the contrary notwithstanding, the fees and expenses of
counsel for Lender shall not exceed Fifty Thousand Dollars ($50,000) through to
the Closing Date.
1.5 Payments.
(a) Funds. All payments by Borrower of the Obligations
shall be made in same day funds and delivered to Lender by wire transfer to such
account(s) as Lender may from time to time designate.
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(b) Credit. Borrower shall receive credit on the day of
receipt for funds received by Lender by 1:00 p.m., New York, New York time, on
any Business Day. Funds received on any Business Day after such time shall be
deemed to have been paid on the next Business Day. Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the payment shall be due on the next succeeding Business Day and such extension
of time shall be included in the computation of the amount of interest and fees
due hereunder.
(c) Payment Set Aside. To the extent Borrower, or any other
Person on behalf of Borrower, makes a payment or payments to Lender in order to
satisfy any amount of Borrower's Obligations, which payments or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, or any
combination of the foregoing (whether by demand, litigation, settlement or
otherwise), then, to the extent of such payment or proceeds repaid, the
Obligations or part thereof intended to be satisfied shall be reinstated and
continued in full force and effect as if such payment or proceeds had not been
received by Lender.
1.6 Repayments of Loans.
(a) Scheduled Repayments of Loans. Borrower shall repay the
aggregate outstanding principal balance on the Notes on and by the applicable
Maturity Date. All repayments of the Loans shall be applied in accordance with
Subsection 1.6(f), and shall be accompanied by accrued interest on the amount
repaid.
(b) Voluntary Prepayment of Loan. Upon three (3) Business
Day's prior notice, Borrower may prepay the applicable Loan, in whole or in
part. All prepayments shall be in a minimum amount of at least Ten Thousand
Dollars ($10,000) or other lesser amounts as may equal the then outstanding
principal amounts of the Loan being repaid, and all prepayment notices shall be
irrevocable. All prepayments shall be accompanied by accrued interest on the
amount prepaid and any amount so repaid may not be re-borrowed.
(c) Repayments from Insurance Proceeds. Immediately upon
their receipt, Borrower shall repay the Loans in an amount equal to all Net
Proceeds received by Borrower or any of its Subsidiaries which are insurance
proceeds from any Asset Disposition; provided, however, that Borrower shall not
be required to apply an amount of such Net Proceeds to repay the Loans (and such
Net Proceeds shall be released to Borrower or Subsidiary in such amount) equal
to an amount up to One Hundred Thousand Dollars ($100,000) in any calendar year
if the following requirements are satisfied: (i) such proceeds are pledged to
Lender, (ii) no Event of Default has occurred and is continuing, and (iii)
Borrower or such Subsidiary has taken steps in good faith and customary in its
industry to replace the damaged Collateral and in any event such replacement or
restoration has occurred within two hundred and seventy (270) days of receipt by
Borrower or such Subsidiary of such proceeds. All such repayments (other than
prepayments under Subsection 1.6(a) as contemplated in this Subsection) shall be
applied in accordance with Subsection 1.6(f).
(d) Repayments from Certain Asset Dispositions. Immediately
upon receipt by Borrower or any of its Subsidiaries of Net Proceeds (other than
insurance proceeds) from any Asset Disposition, Borrower shall repay the Loans
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in an amount equal to such Net Proceeds; provided, however, that Borrower shall
not be required to repay the Loans with the Net Proceeds of Asset Dispositions
if all of the following conditions are satisfied: (i) the aggregate market value
of such assets sold in any one transaction or series of related transactions
does not exceed $100,000; (ii) the aggregate market value of such assets sold
during any calendar year does not exceed $250,000; (iii) the consideration
received is at least equal to the fair value of such assets; (iv) the sole
consideration received is cash or marketable securities; and (v) no Default or
Event of Default then exists or shall result from the Asset Disposition. All
such repayments shall be applied in accordance with Subsection 1.6(f).
(i) Subsection 1.6(d)(i) notwithstanding, Borrower shall not
be required to apply an amount of such Net Proceeds to repay
the Loans (and such Net Proceeds shall be released to Borrower
or Subsidiary in such amount) equal to an amount up to One
Hundred Thousand Dollars ($100,000) in any calendar year if
the following requirements are satisfied: (i) such proceeds
are pledged to Lender, (ii) no Event of Default has occurred
and is continuing, and (iii) Borrower or such Subsidiary has
taken steps in good faith and customary in its industry to
replace the Collateral sold and in any event such replacement
has occurred within two hundred and seventy (270) days of
receipt by Borrower or such Subsidiary of such proceeds.
(ii) All such repayments shall be applied in accordance with
Subsection 1.6(f).
(e) Repayments from Debt or Equity Issuances. Immediately
upon receipt by Borrower or any of its Subsidiaries of Net Proceeds relating to
the issuance by Borrower or any of its Subsidiaries of any public or private
debt (other than pursuant to Subsection 3.3, or solely for the purpose of
refinancing indebtedness permitted under Subsection 3.1 hereof) or any equity
(other than issuance of equity upon conversion or exercise of any security
outstanding on the date hereof), Borrower shall repay the Loans in an amount
equal to such Net Proceeds. All such repayments shall be applied in accordance
with Subsection 1.6(f).
(f) Application of Repayments. All repayments of a Loan
shall be applied first to fees and expenses due Lender under the Loan Documents,
then to accrued and unpaid interest, and then to the outstanding principal
balance of the Loan.
1.7 [RESERVED]
1.8 Loan Accounts. Lender will maintain loan account
records for (A) all Loans, interest charges and payments thereof, (B) the
charging and payment of all fees, costs and expenses and (C) all other debits
and credits pursuant to this Agreement. The balance in the loan accounts shall
be presumptive evidence of the amounts due and owing to Lender, absent manifest
error, provided that any failure by Lender to maintain such records shall not
limit or affect Borrower's obligation to pay.
1.9 Taxes.
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(a) No Deductions. Any and all payments or reimbursements
made under the Loan Documents shall be made free and clear of and without
deduction for any and all taxes, levies, deductions, charges or withholdings,
and all liabilities with respect thereto (all such taxes, deductions, charges or
withholdings and all liabilities with respect thereto, excluding such taxes
imposed on net income, "Tax Liabilities"), excluding, however, (i) any taxes
imposed on income or any franchise tax imposed in lieu of a net income tax; and
(ii) any taxes imposed on Lender (or any Person or entity with an interest in
Lender). If Borrower shall be required by law to deduct any such amounts from or
in respect of any sum payable hereunder to Lender then, except as provided in
Subsection 1.9(b), Borrower shall pay such amounts to the appropriate
Governmental Authority and provide Lender with satisfactory documentary evidence
of such payment within ten (10) days after such payment and the sum payable
hereunder shall be increased as may be necessary so that, after making all
required deductions, Lender receives an amount equal to the sum it would have
received had no such deductions been made.
(b) Changes in Tax Laws. In the event that, subsequent to
the Closing Date, (i) any changes in any existing law, regulation, treaty or
directive or in the interpretation or application thereof, (ii) any new law,
regulation, treaty or directive enacted or any interpretation or application
thereof, or (iii) compliance by Lender with any request or directive (whether or
not having the force of law) from any Governmental Authority (x) does or shall
subject Lender to any tax of any kind whatsoever with respect to this Agreement,
the other Loan Documents or any Loans made hereunder, or change the basis of
taxation of payments to Lender of principal, fees, interest or any other amount
payable hereunder (except for net income taxes or franchise taxes imposed in
lieu of net income taxes, or changes in the rate of such taxes); or (y) does or
shall impose on Lender any other condition or increased cost in connection with
the transactions contemplated hereby; and the result of any of the foregoing is
to increase the cost to Lender of making or continuing any Loan hereunder, or to
reduce any amount receivable hereunder, as the case may be, then, in any such
case, the Borrower shall promptly pay to Lender, upon its demand, any additional
amounts necessary to compensate Lender, on an after-tax basis, for such
additional cost or reduced amount receivable, as determined by Lender with
respect to this Agreement or the other Loan Documents. If Lender becomes
entitled to claim any additional amounts pursuant to this Subsection 1.9, it
shall promptly notify Borrower of the event by reason of which Lender has become
so entitled. A certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by Lender to Borrower shall, absent manifest error,
be final, conclusive and binding for all purposes. There is no limitation on the
number of times such a certificate may be submitted.
1.10 Term of This Agreement. All of the Obligations shall
become due and payable as otherwise set forth herein (including, without
limitation, with respect to Obligations relating to the Original Note on the
Maturity Date applicable to the Original Note), but in any event, all of the
remaining Obligations shall become due and payable on the Maturity Date
applicable to the New Note. This Agreement shall remain in effect through and
including, and (except with respect to provisions hereof expressly stated herein
to survive any such termination) shall terminate immediately after, the date on
which all Obligations shall have been irrevocably paid and satisfied in full.
1.11 Board Rights. For so long as any of the principal of
the Loans remains outstanding, and no later than November 30, 2002 or the date
of its next annual stockholders meeting (whichever is first), the Borrower shall
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nominate a nominee of the Lender (the "Sunshine Designee") to be elected to the
Board of Directors of the Borrower. For so long as any of the principal of the
Loans remains outstanding, upon the removal or resignation of the Sunshine
Designee, Borrower shall cause another nominee of the Lender to be elected to
the Board of Directors of the Borrower in lieu of such initial Sunshine
Designee. The Lender's rights hereunder are in addition to any rights relating
to the election of directors that Lender has in its capacity as a shareholder of
Borrower and/or under any other agreement. At all times, the Sunshine Designee
and any designee of the Lender elected in lieu thereof shall have the right to
attend as an observer all meetings of the audit committee and the executive
committee of the Borrower.
SECTION 2. AFFIRMATIVE COVENANTS
Borrower hereby covenants and agrees that until payment in
full of all Obligations, unless Lender shall otherwise give its prior written
consent, Borrower shall perform and comply, and shall cause each of its
Subsidiaries to perform and comply, with all covenants in this Section 2.
2.1 Compliance With Laws. Borrower will comply with and
will cause its Subsidiaries to comply with the requirements of all Applicable
Laws (including laws, rules, regulations and orders relating to taxes, employer
and employee contributions, securities, and employee retirement and welfare
benefits) as in effect in all jurisdictions in which Borrower and any Subsidiary
of Borrower is now or hereafter doing business, other than those Applicable Laws
the noncompliance with which could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect. This Subsection 2.1
shall not preclude Borrower or any Subsidiary of Borrower from contesting any
taxes or other payments, if such taxes and other payments are being diligently
contested in good faith and if adequate reserves (if required by law) therefor
are maintained in conformity with GAAP.
2.2 Maintenance of Books and Records; Properties;
Insurance.
(a) Books and Records. Borrower will keep and will cause
each of its Subsidiaries to keep adequate records and books of account, in which
complete entries will be made in accordance with GAAP consistently applied.
Borrower will maintain or cause to be maintained and will cause each of its
Subsidiaries to maintain or cause to be maintained in good repair, working order
and condition all Collateral used in its business and the business of its
Subsidiaries, and will make or cause to be made all appropriate repairs,
renewals and replacements thereof. Borrower will and will cause each of its
Subsidiaries to maintain complete, accurate and up-to-date books, records,
accounts and other information relating to all Collateral in such form and in
such detail as may be reasonably satisfactory to Lender.
(b) Insurance. Borrower will maintain or cause to be
maintained and will cause each of its Subsidiaries to maintain or cause to be
maintained, with financially sound and reputable insurers, commercial general
liability, property loss and damage and business interruption insurance with
respect to its business and properties and the business and properties of its
Subsidiaries against loss and damage of the kinds customarily carried or
maintained by similarly situated corporations engaged in the radio and
advertising industry and of such types, with such insurers, in such amounts,
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with such limits and deductibles and otherwise on such terms and conditions as
shall be acceptable to Lender in its reasonable discretion and will deliver
evidence thereof to Lender on or prior to the Closing Date, and thereafter at
least thirty (30) days prior to any expiration thereof, evidence of renewal of
such insurance. All property loss and damage insurance shall be on an all-risk
basis and shall insure property for the full replacement cost thereof and
contain an agreed amount endorsement waiving any coinsurance penalty. Borrower
will cause each insurance policy to be subject to such endorsements and
assignments as shall be satisfactory to Lender, including but not limited to
naming Lender as lender loss payee in the case of property loss and damage
insurance, as assignee in the case of all business interruption insurance, and
as an additional insured in the case of all liability insurance. Liability for
premiums shall be solely a liability of Borrower.
2.3 Inspection; Lender Meeting. Borrower will permit and
will cause each of its Subsidiaries to permit any authorized representatives of
Lender to visit and inspect any of its properties and the properties of its
Subsidiaries, including their financial and accounting records, and to make
copies and take extracts therefrom, for the purpose of determining or monitoring
the value of the Collateral and discuss its and their affairs, finances and
business with its and their officers, employees and certified public
accountants, upon reasonable prior notice at such reasonable times during normal
business hours and as often as may be reasonably requested but in any event, and
providing that no Event of Default shall be continuing, not more that two (2)
times each calendar quarter.
2.4 Legal Existence, Etc. Except as otherwise permitted by
Subsection 3.6, Borrower will, and will cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect its legal existence and
good standing and all rights and franchises material to its or their business.
2.5 Use of Proceeds. Borrower will use the proceeds of the
Loans, and will cause any of its Subsidiaries who receive (directly or
indirectly) proceeds of the Loans to use such proceeds, solely for the purposes
described in Subsection 1.3. No part of any Loan will be used (directly or
indirectly) to purchase any margin securities or otherwise in violation of the
regulations of the Federal Reserve System.
2.6 Further Assurances. Borrower will do, and will cause
each of its Subsidiaries to, execute and deliver all such additional and further
acts, documents and instruments as Lender requests to consummate the
transactions contemplated hereby and to vest completely in and assure Lender of
its rights under this Agreement and the other Loan Documents, including such
financing statements, documents, security agreements and reports to evidence,
perfect or otherwise implement the security for repayment of the Obligations
contemplated by the Loan Documents.
2.7 Investment Company Act; Public Utility Holding
Act.Neither the Borrower nor any of its Subsidiaries shall be or become an
"investment company" as that term is defined in and is not otherwise subject to
regulation under, the Investment Company Act of 1940, as amended. Neither
Borrower nor any of its Subsidiaries shall be or become a "holding company" as
that term is defined in, and is not otherwise subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended.
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SECTION 3. NEGATIVE COVENANTS
Borrower hereby covenants and agrees that until payment in full of
all Obligations, unless Lender shall otherwise give its prior written consent,
Borrower shall perform and comply, and shall cause each of its Subsidiaries to
perform and comply, with all covenants in this Section 3.
3.1 Indebtedness. Except as set forth on Schedule 3.1,
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume, guaranty or otherwise become or remain liable
with respect to any Indebtedness other than: (A) the Obligations; (B) the
Contingent Obligations permitted by Subsection 3.4; (C) Indebtedness between
Borrower and a Subsidiary permitted under Subsection 3.12; (D) Indebtedness
under purchase money security agreements, Capital Leases and equipment leases,
the aggregate amount for Borrower and its Subsidiaries of which shall not exceed
$200,000 at any one time; and (E) renewals, extension, refinancings and
refundings of Indebtedness permitted by Subsection 3.1, provided that any such
renewal, extension, refinancing or refunding is in an aggregate principal amount
of not greater than the principal amount of, and is on terms no less favorable
to the Borrower or such Subsidiary, including as to weighted average maturity,
than the Indebtedness being renewed, extended refinanced or refunded.
3.2 Liens and Related Matters.
(a) No Liens. Except as set forth on Schedule 3.2(A).
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with respect
to any property or asset (including but not limited to any document or
instrument with respect to accounts receivable) of Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, except Permitted Encumbrances and any Lien securing the extension,
renewal, refinancing or refunding of any Indebtedness secured by any Lien
permitted by Subsection 3.2 without (i) any change in the assets subject to such
Lien or (ii) any increase in the amount of Indebtedness secured by the assets
subject to such Lien.
(b) No Negative Pledges. Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into or assume
any agreement (other than the Loan Documents or instruments entered into in
connection with Permitted Encumbrances) prohibiting the creation or assumption
of any Lien upon its or their properties or assets, whether now owned or
hereafter acquired.
3.3 Investments. Borrower will not, and will not permit any
of its Subsidiaries to, directly or indirectly, make or own any Investment in
any Person except that Borrower and its Subsidiaries may make and own (A)
Investments in Cash Equivalents, provided that such Cash Equivalents are not
subject to set off rights; (B) Any Investment in any note constituting
Indebtedness under Subsection 3.1(C) above; (D) equity Investments in Borrower
or in a Subsidiary that is a guarantor of the Obligations; and (E) Investments
not in Cash Equivalents in an aggregate amount for Borrower and its Subsidiaries
not to exceed $100,000 outstanding at any one time (provided that any such
Investment shall not cause a breach of any Regulation of the Federal Reserve
Board).
9
3.4 Contingent Obligations. Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, create or become or
be liable with respect to any Contingent Obligation except those: (i) resulting
from endorsement of negotiable instruments for collection in the ordinary course
of business; (ii) arising under indemnity agreements to title insurers in
connection with mortgagee title insurance policies in favor of Lender; (iii)
arising with respect to customary indemnification obligations incurred in
connection with permitted Asset Dispositions (provided that such obligations
shall in no event exceed the amount of proceeds received in connection
therewith); (iv) incurred in the ordinary course of business with respect to
surety and appeal bonds, performance and return-of-money bonds and other similar
obligations not exceeding at any time outstanding $100,000 in aggregate
liability for Borrower and its Subsidiaries; and (v) incurred as a guaranty of
Indebtedness permitted by Subsection 3.1 (provided that such guaranty obligation
shall in no event exceed the amount of such Indebtedness plus other related
costs and expenses of collection as set forth in such guaranty).
3.5 Restricted Junior Payments. Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, declare, order,
pay, make or set apart any sum for any Restricted Junior Payment other than a
Restricted Junior Payment made by Borrower to Guarantor or from Guarantor to
Borrower.
3.6 Restriction on Fundamental Changes. Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly: (i)
unless and only to the extent required by law, amend, modify or waive any term
or provision of its articles of organization, operating agreement, management
agreements, articles of incorporation, certificates of designations pertaining
to preferred stock or by-laws other than an amendment, modification or waiver
that is solely ministerial or administrative in nature and that could not
reasonably likely have an adverse effect on the interests of Lender; provided,
however, that Borrower shall promptly give Lender notice of any such amendment,
modification or waiver; (ii) enter into any transaction of merger or
consolidation except that any Subsidiary of Borrower may be merged with or into
Borrower (provided that Borrower is the surviving entity); or (iii) liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution).
3.7 Disposal of Assets or Subsidiary Stock. Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
convey, sell, lease, sublease, transfer or otherwise dispose of, or grant to any
Person an option to acquire, in one transaction or a series of transactions, any
of its property, business or assets, or the capital stock of or other equity
interests in any of its Subsidiaries, whether now owned or hereafter acquired,
except for (i) bona fide sales of inventory to customers in the ordinary course
of business and dispositions of obsolete equipment not used or useful in the
business; (ii) fair market value sales of Cash Equivalents; (iii) leasing or
subleasing of its property in the ordinary course of business; and (iv) all
other Asset Dispositions if all of the following conditions are met: (a) as to
Borrower and its Subsidiaries, the aggregate market value of assets sold in any
one transaction or series of related transactions does not exceed $250,000; (b)
the market value of such assets sold in any one transaction or series of related
transactions for any twelve month period does not exceed $500,000 in the
aggregate for Borrower and its Subsidiaries; (c) the consideration received by
Borrower or its Subsidiaries is at least equal to the fair market value of such
assets; (d) the sole consideration received is cash or marketable securities;
10
(e) Borrower is in compliance with all other terms and conditions contained in
this Agreement; and (f) no Default or Event of Default then exists or shall
result from the Asset Disposition.
3.8 Transactions with Affiliates. Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, enter into
or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate or
with any director, officer or employee of Borrower or any Affiliate, except (i)
as set forth on Schedule 3.8; (ii) transactions in the ordinary course of and
pursuant to the reasonable requirements of the business of Borrower or such
Subsidiary and upon fair and reasonable terms, and are no less favorable to
Borrower or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person that is not an Affiliate; or (iii) payment of
compensation to directors, officers and employees in the ordinary course of
business for services actually rendered in their capacities as directors,
officers and employees, provided such compensation is reasonable and comparable
with compensation paid by companies of like nature and similarly situated.
3.9 Management Fees. Other than as set forth on Schedule
3.9, Borrower will not, and will not permit any of its Subsidiaries to, directly
or indirectly, pay any management or other similar fees to any Person (other
than (i) to Borrower or to a Subsidiary of Borrower that is also a guarantor of
the Loan Documents and (ii) in an amount not to exceed $50,000 per annum),
provided, however, that no such payments may be made upon the occurrence and
during the continuance of a Default or an Event of Default.
3.10 Conduct of Business.Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly, engage in any
business other than businesses of radio programs and advertising development and
sales and any other business complimentary thereto.
3.11 Fiscal Year. Borrower will not, and will not permit
any of its Subsidiaries to, change its fiscal year, which ends on December 31.
3.12 Subsidiaries. Borrower will not, and will not permit
any of its Subsidiaries to, directly or indirectly, establish, create or acquire
any Subsidiary unless such Subsidiary executes a joinder agreement, security
agreement and guaranty which are in form and substance satisfactory to Lender.
3.13 Modification of Agreements. Borrower will not amend,
modify or change, or consent or agree to any amendment, modification or change
to, any of the terms of any Material Contracts, except to the extent such
change, amendment, modification or consent is not materially adverse to Lender
and would not otherwise have a Material Adverse Effect.
3.14 Original Note. No later than October 1, 2002, Borrower
will pay to Lender in immediately available funds, by wire transfer to an
account specified by Lender, all interest accrued on the Original Note through
September 30, 2002, under the terms of the Original Note.
SECTION 4. FINANCIAL COVENANTS AND REPORTING
4.1 Reports and Covenants. Borrower hereby covenants and
agrees that until payment in full of all Obligations, unless Lender shall
otherwise give its prior written consent, Borrower (where indicated) shall
11
perform and comply with, and shall cause each of its Subsidiaries (where
indicated) to perform and comply with, all covenants in this Section 4. For the
purposes of this Section 4, all covenants calculated for Borrower shall be
calculated on a consolidated basis for Borrower and its Subsidiaries.
(a) Financial Statements and Other Reports. Borrower will
maintain, and cause each of its Subsidiaries to maintain, a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in conformity with GAAP (it being
understood that quarterly financial statements are not required to have footnote
disclosures). Borrower will deliver or cause to be delivered each of the
financial statements and other reports described below to Lender.
(i) Monthly Financials. As soon as available and in any event
within forty-five (45) days after the end of each January,
February, April, May, July, August, October and November,
Borrower will deliver or cause to be delivered consolidated
and consolidating balance sheets of Borrower and its
Subsidiaries, as at the end of such month, and the related
consolidated and consolidating statements of income and
Operating Cash Flow for such month, and for the period from
the beginning of the then current fiscal year of Borrower to
the end of such month.
(ii) Quarterly Financials; Other Quarterly Reports. As soon as
available and in any event within sixty (60) days after the
end of each fiscal quarter, Borrower will deliver or cause to
be delivered (i) consolidated and consolidating balance sheets
of Borrower and its Subsidiaries, as at the end of such fiscal
quarter, and the related consolidated and consolidating
statements of income, Stockholders' equity and Operating Cash
Flow for such fiscal quarter and for the period from the
beginning of the then current fiscal year of Borrower to the
end of such quarter, and (ii) a schedule of Investments made
by Borrower or any of its Subsidiaries since the date such
information was last provided to Lender.
(iii) Year-End ▇▇▇▇▇▇▇▇▇▇.▇▇ soon as available and in any
event within one hundred twenty (120) days after the end of
each fiscal year of Borrower, Borrower will deliver or cause
to be delivered (i) consolidated and consolidating balance
sheets of Borrower and its Subsidiaries, as at the end of such
year, and the related consolidated and consolidating
statements of income, stockholders' equity and Operating Cash
Flow for such fiscal year, (ii) reports with respect to the
financial statements received pursuant to this Subsection from
certified public accountants selected by Borrower and
reasonably acceptable to Lender, which report shall be
prepared in accordance with Statement of Auditing Standards
No. 58 (the "Statement"), as amended, entitled "Reports on
Audited Financial Statements" and such report shall be
"Unqualified" (as such term is defined in such Statement).
(b) Compliance Certificates. Together with each delivery of
financial statements of Borrower and its Subsidiaries, as applicable, Borrower
will deliver or cause to be delivered (i) a fully and properly completed
compliance certificate in substantially the same form as Exhibit 4.1(b) (each, a
12
"Compliance Certificate") signed by the chief executive officer, chief operating
officer or chief financial officer of Borrower
(c) [RESERVED]
(d) Events of Default, Etc. Promptly upon any executive
officer of Borrower obtaining knowledge of any of the following events or
conditions, Borrower shall deliver copies of all notices given or received by
Borrower or any of its Subsidiaries with respect to any such event or condition
and a certificate of the chief executive officer or chief operating officer of
Borrower specifying the nature and period of existence of such event or
condition and what action Borrower or such Subsidiary has taken, is taking and
proposes to take with respect thereto: (i) any condition or event that
constitutes an Event of Default or Default; (ii) any notice that any Person has
given to Borrower or any of its Subsidiaries or any other action taken with
respect to a claimed default or event or condition of the type referred to in
Subsection 6.1(b); or (iii) any event or condition that could reasonably be
expected to have a Material Adverse Effect.
(e) Litigation. Promptly upon any executive officer of
Borrower obtaining knowledge of (i) the commencement of any action, suit,
proceeding, governmental investigation or arbitration against or affecting
Borrower or any of its Subsidiaries not previously disclosed by Borrower to
Lender; or (ii) any material development in any action, suit, proceeding,
governmental investigation or arbitration at any time pending against or
affecting Borrower or any of its Subsidiaries which, in each case or in the
aggregate, is expected by counsel to Borrower to have a Material Adverse Effect,
Borrower will promptly give notice thereof to Lender and provide such other
information as may be reasonably available to Borrower to enable Lender and its
counsel to evaluate such matter.
(f) Supplemented Schedules; Corporate Changes. From time to
time, and concurrently with the delivery by Borrower of the Compliance
Certificates required by Subsection 4.1(B), Borrower shall, if necessary to
prevent the same from becoming materially misleading, supplement in writing and
deliver revisions of the Schedules annexed to this Agreement to the extent
necessary to disclose material new or changed facts or circumstances after the
Closing Date; provided, that (i) subsequent disclosures shall not constitute a
cure or waiver of any Default or Event of Default resulting from the matters
disclosed; and (ii) any revised schedule shall not in and of itself be deemed a
breach of any representation of the other Loan Documents so long as such
schedules are delivered within thirty (30) days of Borrower becoming aware of
the new information set forth therein.
(g) Regulatory and Other Notices. Within thirty (30) days
after filing, receipt or becoming aware thereof, Borrower will deliver or cause
to be delivered copies of any filings or communications sent to or notices and
other communications received by Borrower, or any of its Subsidiaries from any
Governmental Authority, including the Securities and Exchange Commission,
relating to any noncompliance by Borrower or any of its Subsidiaries with any
law or with respect to any matter or proceeding the effect of which could
reasonably be expected to have a Material Adverse Effect.
13
(h) Other Information. With reasonable promptness, Borrower
will deliver such other information and data with respect to Borrower and any of
its Subsidiaries as from time to time may be reasonably requested by Lender.
4.2 Accounting Terms; Utilization of GAAP. For purposes of
this Agreement, all accounting terms not otherwise defined herein shall have the
meanings assigned to such terms in conformity with GAAP. Except as otherwise
expressly provided, financial statements and other information furnished to
Lender pursuant to this Agreement shall be prepared in accordance with GAAP as
in effect at the time of such preparation. No Accounting Changes (as defined
below) shall affect financial covenants, standards or terms in this Agreement.
"Accounting Changes" means: (i) changes in accounting principles required by
GAAP and implemented by Borrower or any of its Subsidiaries; (ii) changes in
accounting principles recommended by Borrower's certified public accountants and
implemented by Borrower or any of its Subsidiaries; and (iii) changes in the
method of determining carrying value of Borrower's, or any of its Subsidiaries'
assets, liabilities or equity accounts. All such adjustments resulting from
expenditures made subsequent to the Closing Date (including, but not limited to,
capitalization of costs and expenses or payment of pre-Closing Date liabilities)
shall be treated as expenses in the period the expenditures are made.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and make
Loans, Borrower hereby represents and warrants to Lender on the Closing Date
that for so long as any Obligations under the Loan Documents remain outstanding,
that the following statements are true, correct and complete:
5.1 Disclosure. No information furnished by or on behalf of
Borrower or any of its Subsidiaries contained in this Agreement, the financial
statements referred to in Subsection 5.7 or any other document, certificate,
opinion or written statement furnished to Lender pursuant to this Agreement
contains any untrue statement of a material fact or omitted, omits or will omit
to state a material fact necessary, when taken as a whole with all information
so furnished, in order to make the statements contained herein or therein not
misleading in light of the circumstances in which the same were made.
5.2 No Material Adverse Effect. Since January 1, 2002,
there has been no event or change in facts or circumstances affecting Borrower
or any of its Subsidiaries which individually or in the aggregate have had or
could reasonably be expected to have a Material Adverse Effect and that have not
been disclosed herein or in the attached Schedules.
5.3 Organization, Powers, Authorization and Good Standing.
(a) Organization and Powers. Borrower and its Subsidiaries
is a limited liability company, corporation or partnership duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization or incorporation (which jurisdiction is set forth on Schedule
5.3(A)). Borrower and its Subsidiaries has all requisite legal power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into each Loan Document to
which it is a party and to carry out its obligations with respect thereto.
14
(b) Authorization; Binding Obligation. Each of the Borrower
and its Subsidiaries has taken all necessary limited liability company,
partnership, corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Loan Documents to which it
is a party. This Agreement is, and the other Loan Documents when executed and
delivered will be, the legally valid and binding obligations of the applicable
parties thereto (other than Lender), each enforceable against each of such
parties, as applicable, in accordance with their terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar state or federal debt or relief laws from time to time in effect
which affect the enforcement of creditors' rights in general and general
principles of equity.
(c) Qualification. Each of the Borrower and its
Subsidiaries is duly qualified and authorized to do business and in good
standing in each jurisdiction where the nature of its business and operations
requires such qualification and authorization, except where the failure to be so
qualified, authorized and in good standing could not reasonably be expected to
have a Material Adverse Effect. All jurisdictions in which each such Person is
qualified and authorized to do business are set forth on Schedule 5.3 (C).
5.4 Compliance with Applicable Law. Except as set forth on
Schedule 5.4 hereto, the execution, delivery and performance by Borrower and its
Subsidiaries of the Loan Documents to which each such Person is a party, the
borrowings hereunder and the transactions contemplated hereby and thereby do not
and will not, by the passage of time, the giving of notice or otherwise, (i)
require any Governmental Approval or violate any Applicable Law relating to
Borrower or any of its Subsidiaries the failure to obtain or violation of which
could reasonably be expected to result in a Material Adverse Effect, (ii)
conflict with, result in a breach of or constitute a default under the articles
of incorporation, bylaws or other organizational documents of Borrower or its
Subsidiaries or any Material Contract to which such Person is a party or by
which any of its properties may be bound or any Governmental Approval relating
to such Person or (iii) except as required or permitted under the Loan
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any property now owned or hereafter acquired by such Person.
5.5 Tax Returns and Payments. Each of the Borrower and its
Subsidiaries has duly filed or caused to be filed all federal, state, local and
other tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of, all federal, state, local and other
taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable, except where (i) the
payment of such tax is being diligently contested in good faith and adequate
reserves therefor have been established in compliance with GAAP; or (ii) the
failure to file any such tax return or pay any such tax is not reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect
The charges, accruals and reserves on the books of each of the Borrower and its
Subsidiaries in respect of federal, state, local and other taxes for all fiscal
years and portions thereof are in the judgment of Borrower adequate, and each of
the Borrower and its Subsidiaries do not anticipate any additional material
taxes or assessments for any of such years.
5.6 Environmental Matters. Each of the Borrower and its
Subsidiaries is in compliance in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which interfere in any material respect with the
15
continued operation of such properties or impair in any material respect the
fair saleable value thereof, except for any such violations or contamination as
could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
5.7 Financial Statements.
(a) All financial statements, factual information, reports
and other papers and data concerning each of the Borrower and its Subsidiaries
which have been furnished to Lender pursuant to this Agreement have been
prepared in accordance with GAAP consistently applied (except as disclosed
therein) and present fairly the financial condition of the Persons covered
thereby as of the date thereof and the results of their operations for the
periods covered thereby and disclose all material liabilities and Contingent
Obligations of any of the Borrower or its Subsidiaries as at the dates thereof.
Each of the Borrower and its Subsidiaries do not have outstanding, as of the
Closing Date, and after giving effect to the Loans on the Closing Date, any
Indebtedness for borrowed money or Contingent Obligations other than the Loans
and the Indebtedness permitted under Subsection 3.1.
(b) All projections concerning each of the Borrower and its
Subsidiaries which have been furnished to Lender were prepared and presented in
good faith by or on behalf of Borrower and such Subsidiary. No fact is known to
either Borrower which is reasonably likely (so far as Borrower can reasonably
foresee) to have a Material Adverse Effect which has not been set forth in the
financial statements referred to in Subsection 5.7(a) hereof or in such
information, reports, papers and data or otherwise disclosed in writing to
Lender prior to the date hereof.
5.8 Intellectual Property. Each of the Borrower and its
Subsidiaries owns, or possesses through valid licensing arrangements, the right
to use all patents, copyrights, trademarks, trade names, service marks,
technology know-how and processes used in or necessary for the conduct of its
business as currently or anticipated to be conducted (collectively, the
"Intellectual Property Rights") without infringing upon any validly asserted
rights of others. No event has occurred which permits, or after notice or lapse
of time or both would permit, the revocation or termination of any such rights.
None of the Borrower and its Subsidiaries have been threatened with any
litigation regarding Intellectual Property Rights that would present a material
impediment to the business of any such Person.
5.9 Litigation, Investigations, Audits, Etc.
(a) Except as set forth on Schedule 5.9, there is no
action, suit, proceeding or investigation pending against, or, to the knowledge
of Borrower, threatened against or in any other manner relating adversely to the
Borrower or its Subsidiaries or any of their properties, including the Licenses,
in any court or before any arbitrator of any kind or before or by any
Governmental Authority.
(b) None of the actions, suits, proceedings or
investigations disclosed on Schedule 5.9 calls into question the validity of
this Agreement or any other Loan Document, or individually or collectively could
reasonably be expected to result in a judgment or liability which, if determined
adversely to Borrower or any of its Subsidiaries, could reasonably be expected
to have a Material Adverse Effect.
16
(c) To Borrower' knowledge, none of the Borrower and its
Subsidiaries are the subject of any review or audit by the Internal Revenue
Service or any investigation by any Governmental Authority concerning the
violation or possible violation of any law which, individually or collectively,
if determined adversely to Borrower or any of its Subsidiaries, would reasonably
be expected to have a Material Adverse Effect.
5.10 Employee Labor Matters. Except as set forth on
Schedule 5.10, (i) none of the Borrower or its Subsidiaries nor any of their
employees is subject to any collective bargaining agreement, (ii) no petition
for certification or union election is pending with respect to the employees of
any such Person and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any such Person
and (iii) there are no strikes, slowdowns, unfair labor practice complaints,
work stoppages or controversies pending or, to the best knowledge of Borrower
after due inquiry, threatened between any such Person and its employees, other
than employee grievances arising in the ordinary course of business which could
not reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
5.11 Employee Benefit Plans. Each of the Borrower and its
Subsidiaries is in compliance in all material respects with the applicable
provisions of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder, the failure to
comply with which could reasonably be expected to have a Material Adverse
Effect.
5.12 Perfection and Priority. Except for Permitted
Encumbrances, the Security Interest is a valid and perfected first priority
lien, security title or security interest in the Collateral in favor of Lender,
securing, in accordance with the terms of the Security Documents, the
Obligations, and the Collateral is subject to no Lien other than permitted
pursuant to Subsection 3.2.
5.13 Solvency. Borrower: (i) owns and will own assets the
present fair saleable value of which are (a) greater than the total amount of
liabilities (including contingent liabilities) of Borrower, and (b) greater than
the amount that will be required to pay the probable liabilities of Borrower's
then existing debts and liabilities as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to Borrower; (ii) has capital that is not unreasonably small in
relation to its business as presently conducted or after giving effect to any
contemplated transaction; and (iii) does not intend to incur and does not
believe that it will incur debts and liabilities beyond its ability to pay such
debts and liabilities as they become due.
5.14 Investment Company Act; Public Utility Holding
Act.Neither the Borrower nor any of its Subsidiaries is an "investment company"
as that term is defined in and is not otherwise subject to regulation under, the
Investment Company Act of 1940, as amended. Neither of the Borrower nor any of
its Subsidiaries is a "holding company" as that term is defined in, and is not
otherwise subject to regulation under, the Public Utility Holding Company Act of
1935, as amended.
5.15 Certain Agreements and Material Contracts. Schedule
5.15 sets forth a complete and accurate list of all loan agreements, indentures,
guarantees, leases, Capital Leases and other similar credit or reimbursement
agreements and all Material Contracts of the Borrower and its Subsidiaries. Each
17
of the Borrower and its Subsidiaries has performed all of its material
obligations under such agreements and Material Contracts and, to the best
knowledge of Borrower, each other party thereto is in material compliance with
each such agreement or Material Contract. Each such agreement or Material
Contract is in full force and effect in accordance with the terms thereof. Each
of the Borrower and its Subsidiaries have made available a true and complete
copy of each such agreement or Material Contract listed on Schedule 5.15 for
inspection by Lender.
5.16 Title to Properties.Each of the Borrower and its
Subsidiaries has such title or leasehold interest in and to the real property
owned or leased by it as is necessary or desirable to the conduct of its
business and valid and legal title or leasehold interest in and to all of its
personal property, including those reflected on the balance sheets of each of
the Borrower and its Subsidiaries delivered pursuant to Subsection 5.7, except
those which have been disposed of by Borrower subsequent to such date which
dispositions have been in the ordinary course of business or as otherwise
expressly permitted hereunder. Set forth on Schedule 5.16 is a true and complete
list of all real property owned or leased by each of the Borrower and its
Subsidiaries, or as to which Borrower or any of its Subsidiaries has a lease in
effect on the date which is forty-five (45) days immediately preceding such
representation.
5.17 Subsidiaries. Schedule 5.17 sets forth a complete and
accurate list of all direct or indirect Subsidiaries of Borrower, including for
each such Subsidiary whether such Subsidiary is wholly-owned by Borrower, and if
not, the percentage ownership of Borrower or its Subsidiary in such Subsidiary.
SECTION 6. EVENTS OF DEFAULT AND RIGHTS AND REMEDIES
6.1 Event of Default. "Event of Default" shall mean the
occurrence or existence of any one or more of the following:
(a) Payment. Failure to repay any outstanding principal
amount of the Loans, or failure to pay any interest or any other amounts due
under this Agreement or any other Loan Document within three (3) days after the
due date thereof; or
(b) Default in Other Agreements. (i) Failure of Borrower or
any of its Subsidiaries to pay when due , subject to any applicable grace
period, any principal or interest on Indebtedness (other than the Loans) or any
Contingent Obligation having an aggregate principal amount in excess of
$250,000; (ii) any other breach or default of the Borrower or any of its
Subsidiaries with respect to any Indebtedness (other than the Loans) or any
Contingent Obligation if the effect of such breach or default is to cause or to
permit the holder or holders then to cause such Indebtedness or Contingent
Obligation having an aggregate principal amount for the Borrower and its
Subsidiaries in excess of $250,000 to become or be declared due prior to its
stated maturity; or (iii) the continuation of any breach or default of Borrower
or any of its Subsidiaries under any Material Contract beyond any applicable
grace period which has a Material Adverse Effect;
(c) Payment of Loan from Change. If by 5:00 p.m. (New York,
New York time) on April 2, 2003, all principal and any accrued but unpaid
interest on the loan from Change to the Borrower, dated as of April 3, 2002, and
18
the loan from the Lender to the Borrower, dated as of April 3, 2002, in the
aggregate amount of Seven Million Dollars ($7,000,000) shall not have been
repaid in full or, refinanced subordinate to the Loan and for a term extending
beyond the term of the Notes.
(d) Breach of Certain Provisions. (i) Failure of Borrower
or any of its Subsidiaries to perform or comply with any term or condition
contained in that portion of Subsection 2.2 relating to the obligation of
Borrower and each Subsidiary of Borrower, to maintain insurance, Subsection 2.4,
Section 3 or Section 4, except as provided in (ii) hereof; or (ii) failure of
Borrower to perform or comply with any term or condition contained in
Subsections 4.1(a) within thirty (30) days of receipt by Borrower or Subsidiary
of notice from Lender of non-compliance after the date such performance or
compliance is required; or
(e) Breach of Warranty. Any material representation,
warranty, certification or other statement made by Borrower or any of its
Subsidiaries, in any Loan Document or in any statement or certificate at any
time given by Borrower or any of its Subsidiaries in writing pursuant to any
Loan Document is false in any material respect on the date made or deemed made;
or
(f) Other Defaults Under Loan Documents. Borrower or any of
its Subsidiaries or any Guarantor breaches or defaults in the performance of or
compliance with any term contained in this Agreement or the other Loan Documents
and such default is not remedied or waived within thirty (30) days after receipt
by Borrower of notice from Lender of such default (other than occurrences
described in other provisions of this Subsection 6.1 for which a different grace
or cure period is specified or which constitute immediate Events of Default); or
(g) Involuntary Bankruptcy; Appointment of Receiver; Etc.
(i) A court enters a decree or order for relief with respect to Borrower or any
of its Subsidiaries in an involuntary case under the Bankruptcy Code, which
decree or order is not stayed or other similar relief is not granted under any
applicable federal or state law within sixty (60) days; or (ii) the continuance
of any of the following events for sixty (60) days unless dismissed, bonded or
discharged: (a) an involuntary case is commenced against Borrower or any of its
Subsidiaries under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect; or (b) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer having similar powers over Borrower or any of its Subsidiaries, or over
all or a substantial part of its property, is entered; or (c) an interim
receiver, trustee or other custodian is appointed without the consent of
Borrower or any of its Subsidiaries for all or a substantial part of the
property of Borrower or any such Subsidiary; or
(h) Voluntary Bankruptcy; Appointment of Receiver; Etc.
Borrower or any of its Subsidiaries (i) commences a voluntary case under the
Bankruptcy Code, files a petition seeking to take advantage of any other law
relating to bankruptcy, insolvency, reorganization, winding up or composition
for adjustment of debts of Borrower or any of its Subsidiaries, or consents to,
or fails to contest in a timely and appropriate manner, the entry of an order
for relief in an involuntary case, the conversion of an involuntary case to a
voluntary case under any such law, or the appointment of or taking possession by
a receiver, trustee or other custodian of all or a substantial part of the
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property of Borrower or any of its Subsidiaries; or (ii) makes any assignment
for the benefit of creditors; or (iii) the Board of Directors of Borrower or any
of its Subsidiaries adopts any resolution or otherwise authorizes action to
approve any of the actions referred to in this Subsection 6.1(G); or
(i) Governmental Liens. Any Lien, levy or assessment (other
than Permitted Encumbrances) is filed or recorded with respect to or otherwise
imposed upon all or any part of the Collateral or the other assets of Borrower
or any of its Subsidiaries by the United States or any department or
instrumentality thereof or by any state, county, municipality or other
Governmental Authority and remains undischarged, unvacated, unbonded or unstayed
for a period of sixty (60) days or in any event later than five (5) Business
Days prior to the date of any proposed sale thereunder and such Liens secures an
amount individually or in the aggregate in excess of $250,000; or
(j) Judgment and Attachments.Any money judgment, writ or
warrant of attachment or similar process (other than those described in
Subsection 6.1(h)) involving an amount in any individual case or in the
aggregate for or against Borrower and/or its Subsidiaries at any time in excess
of $250,000 (in either case not adequately covered by insurance as to which the
insurance company has not disclaimed coverage subject to customary reservations
of rights) is entered or filed against Borrower or any of its Subsidiaries
and/or any of their assets and remains undischarged, unvacated, unbonded or
unstayed for a period of sixty (60) days or in any event later than five (5)
Business Days prior to the date of any proposed sale thereunder; or
(k) Dissolution. Any order, judgment or decree is entered
against Borrower, or any of its Subsidiaries decreeing the dissolution or split
up of Borrower or such Subsidiary, and such order remains undischarged or
unstayed for a period in excess of thirty (30) days; or
(l) Solvency. Borrower or any of its Subsidiaries ceases to
be solvent or Borrower or any of its Subsidiaries admits in writing its present
or prospective inability to pay its debts as they become due; or
(m) Injunction. Borrower or any of its Subsidiaries is
enjoined, restrained or in any way prevented by the order of any court or any
Governmental Authority from conducting all or any material part of its business
and such order continues for more than fifteen (15) days and the result of which
is reasonably likely to have a Material Adverse Effect; or
(n) ERISA; Pension Plans. (i) Borrower or any of its
Subsidiaries fails to make full payment when due of all amounts which, under the
provisions of any employee benefit plans or any applicable provisions of the
IRC, any such Person is required to pay as contributions thereto and such
failure results in or could reasonably be expected to have a Material Adverse
Effect; or (ii) a material accumulated funding deficiency occurs or exists,
whether or not waived, with respect to any such employee benefit plans; or (iii)
any employee benefit plan of Borrower or any of its Subsidiaries loses its
status as a qualified plan under the IRC and such loss results in or could
reasonably be expected to have a Material Adverse Effect; or
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(o) Environmental Matters. Borrower or any of its
Subsidiaries fails to: (i) obtain or maintain any operating licenses or permits
required by environmental authorities; (ii) begin, continue or complete any
remediation activities as required by any environmental authorities; (iii) store
or dispose of any hazardous materials in accordance with applicable
Environmental Laws; or (iv) comply with any other Environmental Laws, if in any
such case such failure could reasonably be expected to have a Material Adverse
Effect; or
(p) Invalidity of Loan Documents. Any of the Loan Documents
for any reason, other than a partial or full release in accordance with the
terms thereof, ceases to be in full force and effect or is declared to be null
and void and Borrower or any of its Subsidiaries fails to promptly correct such
cessation or declaration, or Borrower or any of its Subsidiaries denies that it
has any further liability under any Loan Documents to which it is party, or
gives notice to such effect. The previous sentence not withstanding, the
unenforceability of one or more sections of this Agreement or any Loan Document
shall not constitute an Event of Default provided that each Loan Document
regarded individually and collectively as a whole accomplish to the reasonable
satisfaction of the Lender, the original intent and purpose of the Loan
Documents and preserve sufficient rights and remedies of the Lender as
determined in the reasonable discretion of the Lender, including its rights in
and to the Collateral for the practical realization of the purposes of the Loan
Documents; or
(q) Damage; Strike; Casualty.Any material damage to, or
loss, theft or destruction of a major portion of the Collateral, whether or not
insured, or any strike, lockout, labor dispute, embargo, condemnation, act of
God or public enemy, or other casualty which causes, for more than fifteen (15)
consecutive days, the cessation or substantial curtailment of revenue producing
activities of Borrower or any of its Subsidiaries if any such event or
circumstance results in or could reasonably be expected to have a Material
Adverse Effect; or
(r) Licenses, Permits and Contracts. (i) The loss,
suspension or revocation of, or failure to renew, any license or permit now held
or hereafter acquired or utilized by Borrower, or any of its Subsidiaries, if
such loss, suspension, revocation or failure to renew could reasonably be
expected to have a Material Adverse Effect and (ii) any breach, default or
termination shall have occurred under any Material Contract by any of the
parties thereto, or any Material Contract shall fail to be renewed or otherwise
have ceased to be in full force and effect, if such breach, default, failure to
renew, cessation or termination could reasonably be expected to have a Material
Adverse Effect; or
(s) Failure of Security. Lender does not have or ceases to
have a valid and perfected first priority security interest (subject to
Permitted Encumbrances) in the Collateral or any substantial portion thereof, in
each case, except to the extent that such failure to have a valid and perfected
first priority security interest is caused solely by the failure of Lender to
take any action reasonably within its control after obtaining knowledge thereof
or being notified by Borrower in writing to take such action.
6.2 Acceleration.
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(a) Upon the occurrence of an Event of Default set forth in
Subsections 6.1(a), 6.1(b), 6.1(c), 6.1(g), 6.1(h), 6.1(k) and 6.1(l) as well as
upon any breach by Borrower of Subsection 5.13, the unpaid principal amount of
and accrued interest and fees on all Loans and all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration or other
requirements of any kind, all of which are hereby expressly waived by Borrower.
(b) Subject to Subsection 6.2(a) above, upon the occurrence
of any other Event of Default, the unpaid principal amount of and accrued
interest and fees on all Loans and all other Obligations shall become
immediately due and payable, upon receipt by Borrower of notice from Lender
without any other requirements of any kind, all of which are hereby expressly
waived by Borrower.
6.3 Rights of Collection. Upon the occurrence and during
the continuation of any Event of Default and at any time thereafter, unless and
until such Event of Default is cured, or waived by Lender, Lender may exercise
all of its rights and remedies under this Agreement, the other Loan Documents
and Applicable Law, in order to satisfy all of the Borrower' Obligations under
the Loan Documents.
6.4 Consents. Each of the Borrower acknowledges that
certain transactions contemplated by this Agreement and the other Loan Documents
and certain actions which may be taken by Lender in the exercise of its rights
under this Agreement and the other Loan Documents may require the consent of a
third party. If counsel to Lender reasonably determines that the consent of a
third party including a Governmental Authority is required in connection with
the execution, delivery and performance of any of the aforesaid Loan Documents
or any Loan Documents delivered to Lender in connection therewith or as a result
of any action which may be taken pursuant thereto, then Borrower, at Borrower's
cost and expense, agrees to use their reasonable best efforts, and to cause its
Subsidiaries to use their reasonable best efforts, to secure such consent and to
cooperate with Lender in any action commenced by Lender to secure such consent.
6.5 Performance by Lender. If Borrower shall fail to
perform any covenant, duty or agreement contained in any of the Loan Documents
Lender may perform or attempt to perform such covenant, duty or agreement on
behalf of Borrower after the expiration of any cure or grace periods set forth
herein. In such event, Borrower shall be obligated, at the request of Lender, to
promptly pay any amount reasonably expended by Lender in such performance or
attempted performance to Lender, together with interest thereon at the highest
rate of interest in effect upon the occurrence of an Event of Default as
specified in Subsection 1.2(c) from the date of such expenditure until paid.
Notwithstanding the foregoing, it is expressly agreed that Lender shall not have
any liability or responsibility for the performance of any obligation of
Borrower under this Agreement or any other Loan Document.
6.6 Set Off 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, during the continuance of any Event of Default,
Lender is hereby authorized by Borrower at any time or from time to time, with
reasonably prompt subsequent notice to Borrower (any prior or contemporaneous
notice being hereby expressly waived) to set off and to appropriate and to apply
any and all (i) balances held by Lender for the account of Borrower or any
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Subsidiaries, and (ii) other property at any time held or owing by Lender to or
for the credit or for the account of Borrower or any of the Subsidiaries,
against and on account of any of the Obligations.
6.7 Application of Payments. Subsequent to the acceleration
of the Loans pursuant to Subsection 6.2, all payments received by Lender on the
Obligations and on the proceeds from the enforcement of the Obligations shall be
applied as follows: First, to all Lender's fees and expenses then due and
payable, then to all other expenses then due and payable by Borrower under any
Loan Document, then to all indemnitee obligations then due and payable by
Borrower under any Loan Document, then to all fees and expenses then due and
payable by Borrower, then to accrued and unpaid interest on the New Loan, then
to accrued and unpaid interest on the Original Loan, then to the principal
amount of the New Loan and then to the principal amount of the Original Loan, in
that order. Any remaining monies not applied as provided in this Subsection 6.7
shall be paid equally to Borrower or to any Person lawfully entitled thereto.
SECTION 7. CONDITIONS TO LOANS
7.1 The obligations of Lender to make the New Loan and to
amend and to amend and restate the Old Note are subject to satisfaction of all
of the applicable conditions set forth below.
7.2 Executed Loan Documents. (i) This Agreement, (ii) the
Notes, (iii) the Security Agreements, (iv) the Guarantee, (v) the Warrant; and
(vi) all other documents and instruments contemplated by such agreements, shall
have been duly authorized and executed by each of the parties thereto in form
and substance satisfactory to Lender, and each of the Borrower shall have
delivered sufficient original counterparts thereof to Lender.
7.3 Closing Certificates; Opinions.
(a) Officer's Certificate. Lender shall have received, a
certificate from the chief executive officer, chief operating officer or chief
financial officer of Borrower in form and substance reasonably satisfactory to
Lender , to the effect that, to each of their knowledge after reasonable
diligence, all representations and warranties of the Borrower and its
Subsidiaries contained in this Agreement and the other Loan Documents are true,
correct and complete; that none of the Borrower nor any of its Subsidiaries is
in violation of any of the covenants contained in this Agreement and the other
Loan Documents; that, after giving effect to the transactions contemplated by
this Agreement, no Default or Event of Default has occurred and is continuing;
that Borrower has satisfied each of the closing conditions to be satisfied
hereby; that Borrower and its Subsidiaries have filed all required tax returns
and owe no delinquent taxes.
(b) Certificate of Secretary of Borrower. Lender shall have
received a certificate of the secretary or assistant secretary of Borrower
certifying that attached thereto is a true and complete copy of the articles of
incorporation or organization of Borrower, and all amendments thereto, certified
as of a recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation; that attached thereto is a true and complete copy
of the bylaws or operating agreement of Borrower as in effect on the date of
such certification; that attached thereto is a true and complete copy of
resolutions or consents of members duly adopted by the Board of Directors of
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Borrower authorizing the borrowings or guaranties contemplated hereunder, the
execution, delivery and performance of this Agreement and the other Loan
Documents, and the granting of the Security Interest; and as to the incumbency
and genuineness of the signature of each officer of Borrower executing Loan
Documents.
(c) Certificates of Good Standing. Lender shall have
received certificates as of a recent date of the good standing of Borrower under
the laws of their jurisdictions of organization and such other jurisdictions as
are requested by Lender.
(d) Opinions of Counsel. Lender shall have received
favorable opinions of counsel to Borrower addressed to Lender with respect to
Borrower covering such matters as requested by Lender, including, without
limitation, the Loan Documents, the Security Interest, the Guarantee, due
authorization and other corporate matters, local laws and choice of laws issues
and which are reasonably satisfactory in form and substance to Lender.
7.4 Collateral.
(a) Filings and Recordings. All filings and recordings
(including, without limitation, all fixture filings and transmitting utility
filings) that are necessary to perfect the Security Interest in the Collateral
described in the Security Documents shall have been filed or recorded in all
appropriate locations (or delivered to Lender for filing), and Lender shall have
received evidence satisfactory to Lender that such Security Interest constitutes
a valid and perfected first priority Lien therein subject to Permitted
Encumbrances.
(b) Lien Searches. Borrower shall have delivered to Lender
the results of Lien searches of all filings made against each of the Borrower
and its Subsidiaries under the Uniform Commercial Code (and local tax and
judgment filing offices) as in effect in any jurisdiction in which any of its
assets are located, indicating, among other things, that each of the Borrower's
assets are free and clear of any Lien, except for Permitted Encumbrances.
7.5 Insurance. Lender shall have received certificates of
insurance and certified copies of insurance policies in the form required under
Subsection 2.2, and the Security Documents and otherwise in form and substance
reasonably satisfactory to Lender.
7.6 Consents. Borrower shall have delivered to Lender all
necessary approvals, authorizations and consents, if any, of all Persons,
Governmental Authorities, and courts having jurisdiction with respect to the
execution and delivery of this Agreement and the other Loan Documents, the
granting of the Security Interest and all such approvals shall be in form and
substance satisfactory to Lender.
7.7 No Injunction, Etc. No action, proceeding,
investigation, regulation or legislation shall have been instituted, threatened
or proposed before any Governmental Authority to enjoin, restrain or prohibit,
or to obtain substantial damages in respect of, or which is related to or arises
out of this Agreement or the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby, or which, as determined by Lender
24
in its reasonable discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement and such other Loan Documents.
7.8 Financial Matters.
(a) Financial Statements. Lender shall have received recent
annual and interim financial statements and other financial information with
respect to Borrower and each of its Subsidiaries prepared in accordance with
GAAP for the period ending on June 30, 2002.
(b) Fees, Expenses, Taxes, Etc. Borrower shall have paid to
Lender the fees set forth or referenced in Subsection 1.4 and any other accrued
and unpaid fees or commissions due hereunder (including legal fees and
expenses), and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes, fees
and other charges in connection with the execution, delivery, recording, filing
and registration of any of the Loan Documents.
7.9 Miscellaneous.
(a) Proceedings and Documents. All opinions, certificates
and other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to Lender. Lender shall have received copies of all other instruments
and other evidence as Lender may reasonably request, in form and substance
reasonably satisfactory to Lender, with respect to the transactions contemplated
by this Agreement and the taking of all actions in connection therewith.
7.10 Litigation, Investigations, Audits, Etc. There is no
action, suit, proceeding or investigation pending against, or, to the knowledge
of Borrower after due inquiry, threatened against or in any other manner
relating adversely to, Borrower or any of its Subsidiaries or any of their
properties, in any court or before any arbitrator of any kind or before or by
any Governmental Authority, that could reasonably be expected to have a Material
Adverse Effect on Borrower or on any of its Subsidiaries.
SECTION 8. MISCELLANEOUS
8.1 Indemnities. Borrower, agrees to indemnify, pay, and
hold Lender and its Affiliates and the officers, directors, employees, agents,
and attorneys (the "Indemnitees") harmless from and against any and all
liabilities, obligations, losses, expenses, damages, penalties, actions,
judgments, suits and claims of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Indemnitee as a result of Lender being
a party to the Loan Documents including, without limitation, this Agreement
(including, without limitation, in connection with any action, inaction, default
or Default of Borrower) or otherwise in connection with this Agreement, any of
the other Loan Documents or any of the transactions contemplated hereby or
thereby; provided, that Borrower shall not have an obligation to an Indemnitee
hereunder with respect to liabilities arising from the gross negligence or
willful misconduct of that Indemnitee or as a result of an Indemnitee's failure
to perform its obligations hereunder, in each such case as determined by a final
non appealable judgment of a court of competent jurisdiction. This Subsection
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8.1 and all indemnification provisions contained within any other Loan Document
shall survive the termination of this Agreement.
8.2 Amendments and Waivers. Except as otherwise provided
herein, no amendment, modification, termination or waiver of any provision of
this Agreement, the Notes or any of the other Loan Documents, or consent to any
departure by Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by Borrower and the Lender.
8.3 Notices. Any required notice or other communication
shall be in writing addressed to the respective party as set forth above and may
be personally delivered, telecopied, sent by overnight courier service or U.S.
mail and shall be deemed to have been given: (i) if delivered in person, when
delivered; (ii) if delivered by telecopy, on the date of transmission if
transmitted on a Business Day before 2:00 p.m. (New York, New York time) and
otherwise on the Business Day next succeeding the date of transmission; (iii) if
delivered by overnight courier, two (2) Business Days after delivery to the
courier properly addressed; or (iv) if delivered by U.S. mail, four (4) Business
Days after deposit with postage prepaid and proper address.
8.4 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Lender to exercise, nor any partial exercise
of, any power, right or privilege hereunder or under any other Loan Documents
shall impair such power, right, or privilege or be construed to be a waiver of
any Default or Event of Default. All rights and remedies existing hereunder or
under any other Loan Document are cumulative to and not exclusive of any rights
or remedies otherwise available.
8.5 Marshaling; Payments Set Aside. Lender shall not be
under any obligation to marshal any assets in payment of any or all of the
Obligations. To the extent that Borrower or any other Person makes payment(s) or
Lender enforces its Liens or exercises its right of set-off, and such payment(s)
or the proceeds of such enforcement or set-off is subsequently invalidated,
declared to be fraudulent or preferential, set aside, or required to be repaid
by anyone (whether by demand, litigation, settlement or otherwise), then to the
extent of such recovery, the Obligations or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor, shall be reinstated
and continued in full force and effect as if such payment had not been made or
such enforcement or set-off had not occurred.
8.6 Severability. The invalidity, illegality, or
unenforceability in any jurisdiction of any provision under the Loan Documents
shall not affect or impair the remaining provisions in the Loan Documents or any
such invalid, unenforceable or illegal provision in any jurisdiction in which it
is not invalid, unenforceable or illegal.
8.7 Headings. Section and Subsection headings are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purposes or be given substantive effect.
8.8 Applicable Law.THIS AGREEMENT SHALL BE GOVERNED BY AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
26
STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THAT REQUIRE OR
PERMIT APPLICATION OF THE LAWS OF ANY OTHER STATE OR JURISDICTION.
8.9 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors and
assigns. Borrower may not assign its rights or obligations hereunder without the
written consent of Lender, and prior to the occurrence of an Event of Default,
Lender may not assign its rights or obligations hereunder without the written
consent of Borrower.
8.10 No Fiduciary Relationship. No provision in the Loan
Documents and no course of dealing between the parties shall be deemed to create
any fiduciary duty owing to Borrower or its Subsidiaries by Lender.
8.11 Construction. Lender and Borrower acknowledge that
each of them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review the Loan Documents with its legal counsel and
that the Loan Documents shall be constructed as if jointly drafted by Lender and
Borrower.
8.12 Confidentiality. Lender agrees to hold any
confidential information that they may receive from Borrower and its
Subsidiaries pursuant to this Agreement in confidence that is identified as
being confidential or proprietary or would reasonably be understood to be
confidential or proprietary, except for disclosure: (i) on a confidential
need-to-know basis to its Affiliates and legal counsel, independent public
accountants and other professional advisors of Lender; (ii) to regulatory
officials having jurisdiction over or Lender; (iii) as required or requested by
Applicable Law or legal process; (iv) in connection with any legal proceeding
between or among Lender and Borrower and/or its Subsidiaries or Affiliates
(provided that, in the event Lender is so required to disclose such confidential
information pursuant to clause (iii) of this Subsection 8.12, Lender shall
promptly notify Borrower (unless legally prohibited from so doing), so that
Borrower or any of its Subsidiaries may seek, at its sole cost and expense, a
protective order or other appropriate remedy); and (v) subject to Subsection
8.9, to another Person in connection with a disposition or proposed disposition
to that Person of all or part of that Lender's interests hereunder, provided
that such disclosure is made subject to an appropriate confidentiality agreement
entered into with the Borrower on terms substantially similar to this Subsection
8.12. For purposes of the foregoing, "confidential information" shall mean all
information respecting Borrower or its Subsidiaries, other than (A) information
previously filed by Borrower or its Subsidiaries with any Governmental Authority
and available to the public or otherwise made available to third parties on a
non-confidential basis, (B) information previously published in any public
medium from a source other than, directly or indirectly, Lender in violation of
this Subsection 8.12 and (C) information obtained by Lender from a source
independent of Borrower or its Subsidiaries.
8.13 Consent to Jurisdiction and Service of Process.
(a) EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL COURT OR STATE COURT IN
THE STATE OF NEW YORK, COUNTY OF NEW YORK, HAVING SUBJECT MATTER JURISDICTION
OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS.
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EACH 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 ANY SUCH COURT, PERSONAL
JURISDICTION OF ANY SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF LENDER TO BRING PROCEEDINGS AGAINST EACH
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.
(b) EACH BORROWER HEREBY AGREES THAT SERVICE OF THE SUMMONS
AND COMPLAINT AND ALL OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION
OR PROCEEDING MAY BE EFFECTED BY MAILING BY REGISTERED MAIL, RETURN RECEIPT
REQUESTED, A COPY OF SUCH PROCESS TO SUCH BORROWER AT THE ADDRESS TO WHICH
NOTICES TO BORROWER ARE THEN TO BE SENT PURSUANT TO SUBSECTION 8.3 AND THAT
PERSONAL SERVICE OF PROCESS SHALL NOT BE REQUIRED. NOTHING HEREIN SHALL BE
CONSTRUED TO PROHIBIT SERVICE OF PROCESS BY ANY OTHER METHOD PERMITTED BY LAW.
8.14 Waiver of Jury Trial. LENDER AND EACH BORROWER HEREBY
WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS, OR
ANY DEALINGS BETWEEN OR AMONG THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION AND ANY RELATIONSHIP THAT IS BEING ESTABLISHED AMONG ANY OF THEM.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. LENDER AND
EACH BORROWER ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN
ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER
IN THEIR RELATED FUTURE DEALINGS. LENDER AND EACH BORROWER FURTHER WARRANT AND
REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT
EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, AND THE WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT. LENDER AND EACH BORROWER ALSO WAIVE ANY BOND OR
SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED
OF LENDER.
28
8.15 Survival of Warranties and Certain Agreements. All
agreements, representations and warranties made herein shall survive the
execution and delivery of this Agreement, the making of the Loans, and the
execution and delivery of the Notes. Notwithstanding anything in this Agreement
or implied by law to the contrary, the agreements of Borrower set forth in
Subsections 1.4, .8.1, 8.13 and 8.14 and 8.15 (together with any other Sections
or Subsections stated herein to so survive) shall survive the payment of the
Loans and the termination of this Agreement.
8.16 Entire Agreement. This Agreement, the Notes and the
other Loan Documents referred to herein embody the final, entire agreement among
the parties hereto and supersede any and all prior commitments, agreements,
representations, understandings, whether oral or written, relating to the
subject matter hereof and may not be contradicted or varied by evidence of
prior, contemporaneous or subsequent oral agreements or discussions of the
parties hereto.
8.17 Counterparts; Effectiveness. This Agreement and any
amendments, waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which counterparts together shall constitute but one and the same instrument.
This Agreement shall become effective upon the execution of a counterpart hereof
by each of the parties hereto. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 9. DEFINITIONS
9.1 Certain Defined Terms. The terms defined below are used
in this Agreement as so defined. Terms defined in the preamble and recitals to
this Agreement are used in this Agreement as so defined.
(a) "Affiliate" means (A) with respect to Borrower or any
of its Subsidiaries, any Person (excluding the Lender): (i) directly or
indirectly controlling, controlled by, or under common control with such Person
or (ii) directly or indirectly owning or holding five percent (5%) or more of
any equity interest in Borrower or any of its Subsidiaries; and (B) with respect
to Lender, any Person which controls or is controlled by or is under common
control with such Person. For purposes of this definition, "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with") means the possession directly or indirectly of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.
(b) "Agreement" means this Credit Agreement (including all
schedules and exhibits hereto), as amended, modified and supplemented from time
to time as permitted herein.
(c) "Applicable Law" means, in respect of any Person, all
provisions of constitutions, statutes, rules, regulations and orders of
governmental bodies or regulatory agencies applicable to such Person, and all
orders, decisions, judgments and decrees of all courts and arbitrators in
proceedings or actions to which the Person in question is a party or by which it
is bound.
29
(d) "Asset Disposition" means the disposition, whether by
sale, lease, transfer, loss, damage, destruction, condemnation or otherwise, by
Borrower or any of its Subsidiaries, of any of the following: (i) any of the
capital stock or the ownership interests of Borrower or any of its Subsidiaries;
or (ii) any or all of the Operating Assets of Borrower or any of its
Subsidiaries, other than bona fide sales to customers in the ordinary course of
business, dispositions of obsolete equipment not used or useful in the business
of Borrower or any of its Subsidiaries, and sales of Cash Equivalents for fair
value and transactions.
(e) "Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy," as amended from time to time, or any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect and all
rules and regulations promulgated thereunder.
(f) "Business Day" means any day excluding Saturday, Sunday
and any day which is a legal holiday under the laws of the State of New York, or
is a day on which banking institutions located in such state are closed or which
the Federal Reserve Banks are closed.
(g) "Capital Lease" means any lease of real or personal
property which is required to be capitalized under GAAP.
(h) "Cash Equivalents" means: (i) marketable direct
obligations issued or unconditionally guarantied by the United States Government
or issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one (1) year from the date of
acquisition thereof; (ii) commercial paper maturing no more than one (1) year
from the date issued and, at the time of acquisition, having a rating of at
least A-1 from Standard & Poor's Rating Service or at least P-1 from ▇▇▇▇▇'▇
Investors Service, Inc.; (iii) certificates of deposit or bankers' acceptances
maturing within one (1) year from the date of issuance thereof issued by, or
overnight reverse repurchase agreements from, any commercial bank organized
under the laws of the United States of America or any state thereof or the
District of Columbia having combined capital and surplus of not less than
$500,000,000; and (iv) time deposits maturing no more than thirty (30) days from
the date of creation thereof with commercial banks having membership in the
Federal Deposit Insurance Corporation in amounts at any one such institution not
exceeding the lesser of $100,000 or the maximum amount of insurance applicable
to the aggregate amount of Borrower's deposits at such institution.
(i) "Change" means Change Technology Partners, Inc.
(j) "Change Note" means that Note dated as of August 28,
2002, issued by Borrower to Change, evidencing the loan from Change to Borrower
in the amount of Two Million Two Hundred Fifty Thousand Dollars ($2,250,000).
(k) "Closing Date" means September 30, 2002.
(l) "Collateral" means, collectively: (i) all "Collateral"
as defined in the Security Documents; (ii) all real property and interests in
real property mortgaged pursuant to the Security Documents; and (iii) any
property or interest provided in addition to or in substitution for any of the
foregoing.
30
(m) "Contingent Obligation" means, as applied to any
Person, any direct or indirect contingent liability of that Person: (i) with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto; or
(ii) with respect to any letter of credit issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of drawings.
Contingent Obligations shall also include (a) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another, (b) the obligation to make take-or-pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, other than pursuant to routine agreements entered into
in the ordinary course of business, and (c) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or to
maintain the solvency, financial condition or any balance sheet item or level of
income of another. The amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not a fixed
and determined amount, the maximum amount so guaranteed.
(n) "Default" means a condition or event that, after notice
or lapse of time or both, would constitute an Event of Default if that condition
or event were not cured or removed within any applicable grace or cure period.
(o) "Dial" means Dial Communications Global Media, Inc., a
corporation organized under the laws of the State of Delaware which is a wholly
owned Subsidiary of Borrower.
(p) "Dial Security Agreement" means the security agreement
dated as of September 30, 2002, executed by Dial in favor of Lender, as amended,
modified and supplemented from time to time.
(q) "Environmental Laws" means all applicable federal,
state or local laws, statutes, rules, regulations or ordinances, codes, common
law, consent agreements, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder relating to public health, safety or
the pollution or protection of the environment, including those relating to
releases, discharges, emissions, spills, leaching, or disposals of hazardous
substances (including petroleum, crude oil or any fraction or derivative
thereof, or other hydrocarbons) to air, water, land or ground water, to the
withdrawal or use of ground water, to the use, handling or disposal of
polychlorinated biphenyls, asbestos or urea formaldehyde, to the treatment,
storage, disposal or management of hazardous substances (including petroleum,
crude oil or any fraction or derivative thereof, or other hydrocarbons),
pollutants or contaminants, to exposure to toxic, hazardous or other controlled,
prohibited, or regulated substances, including, without limitation, any such
provisions under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 ▇.▇.▇.▇▇.? 9601 et seq.), and the Resource
Conservation and Recovery Act of 1976, as amended (42 U.S.C.ss.6901 et seq.).
31
(r) "GAAP" means generally accepted accounting principles
as set forth in statements from Auditing Standards No. 69 entitled "The Meaning
of Present Fairly in Conformance with Generally Accepted Accounting Principles
in the Independent Auditors Reports'" issued by the Auditing Standards Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination.
(s) "Governmental Approvals" means all authorizations,
consents, approvals, licenses and exemptions of, registrations and filings with,
and reports to, all Governmental Authorities.
(t) "Governmental Authority" means any nation, province, or
state or any political subdivision of any of the foregoing, and any government
or any Person exercising executive, legislative, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
exercising such functions owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.
(u) "Guarantor" means Dial.
(v) "Guaranty" means the continuing guarantee, dated as of
even date herewith, in form and content approved by Lender and executed by Dial
as of the date hereof in favor of Lender.
(w) "Indebtedness" means, as applied to any Person, without
duplication: (i) all indebtedness for borrowed money; (ii) that portion of
obligations with respect to Capital Leases or other capitalized agreements that
is properly classified as a liability on a balance sheet in conformity with
GAAP; (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money; (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
except trade payables arising in the ordinary course of business not more than
ninety (90) days past due; (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person, but only to the extent of the fair
value of such property or asset; (vi) fixed rate hedging obligations that are
due (after giving effect to any period of grace or notice requirement applicable
thereto) and remain unpaid; (vii) obligations with respect to principal under
Contingent Obligations for the repayment of money or the deferred purchase price
of property, whether or not then due and payable (calculated as the amount of
such principal); and (viii) obligations under partnership, organizational or
other agreements to fund capital contributions or other equity calls with
respect to any Person or investment, or to redeem, repurchase or otherwise make
payments in respect to capital stock or other securities of such Person.
(x) "Investment" means (i) any direct or indirect purchase
or other acquisition by Borrower or any of its Subsidiaries of any beneficial
interest in, including stock, partnership interest or other equity securities
of, any other Person; and (ii) any direct or indirect loan, advance, transfer,
guarantee, assumption of liability or other obligation or liability, or capital
contribution by Borrower or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person that
32
are not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
(y) "IRC" means the Internal Revenue Code of 1986, as
amended from time to time, and all rules and regulations promulgated thereunder.
(z) "Lien" means any lien, mortgage, pledge, security
interest, charge or encumbrance of any kind, whether voluntary or involuntary
(including any conditional sale or other title retention agreement and any lease
in the nature thereof), and any agreement to give any lien, mortgage, pledge,
security interest, charge or encumbrance.
(aa) "Loan" or "Loans" means the Original Loan and/or, as
applicable, the New Loan.
(bb) Loan Documents" means this Agreement, the Notes, the
Security Documents, the Warrant and all other instruments, documents and
agreements executed by or on behalf of Borrower or any of its Subsidiaries, and
delivered concurrently herewith or at any time hereafter to or for the benefit
of Lender in connection with the Loans and other transactions contemplated by
this Agreement, all as amended, supplemented or modified from time to time.
(cc) "Material Adverse Effect" means (i) a material adverse
effect upon the business, operations, properties or assets, or condition
(financial or otherwise) or upon Borrower or any of its Subsidiaries taken as a
whole, or (ii) the impairment of the ability of Borrower, or any of its
Subsidiaries to perform its material obligations under any Loan Document to
which it is a party or of Lender to enforce any Loan Document or collect any of
the Obligations. In determining whether any individual event could reasonably be
expected to have a Material Adverse Effect, notwithstanding that such event does
not of itself have such effect, a Material Adverse Effect shall be deemed to
have occurred if the cumulative effect of such event and all other then existing
events could reasonably be expected to have a Material Adverse Effect.
(dd) "Material Contracts" means (a) the Material Contracts
listed on Schedule 5.15, (b) any contract or any other agreement, written or
oral, of Borrower or any of its Subsidiaries involving monetary liability of or
to any such Person in an aggregate amount in excess of One Million Dollars
($1,000,000) per annum and (c) any other contract or agreement, written or oral,
of Borrower or any of its Subsidiaries the failure to comply with which could
reasonably be expected to have a Material Adverse Effect.
(ee) "Maturity Date" means the earlier of (a) the date
payment is due under the Notes as a result of acceleration or otherwise; and (b)
(x) with respect to the New Note, September 29, 2004, and (x) with respect to
the Original Note, October 31, 2002.
(ff) "Net Proceeds" means cash proceeds received by
Borrower or any of its Subsidiaries from any Asset Disposition, or debt or
equity issuance including insurance proceeds, awards of condemnation, and
33
payments under notes or other debt securities received in connection with any
Asset Disposition, net of (i) the reasonable costs incurred or accrued in
connection with such sale, lease, transfer, issuance or other disposition
(including taxes attributable to such sale, lease, transfer or issuance,
including, if the disposing Person is a limited liability company, S corporation
or a partnership, taxes attributable to its members, shareholders or partners
with respect to such disposition) and (ii) amounts applied to repayment of
Indebtedness (other than the Obligations) secured by a Lien on the asset or
property disposed.
(gg) "New Security Agreement" means the security agreement
dated as of September 30, 2002, executed by the Borrower in favor of Lender, as
amended, modified and supplemented from time to time.
(hh) "Note" or "Notes" means the Amended Note and/or the
New Note or any combination thereof, and any replacements, restatements,
renewals or extensions of any such notes, in whole or in part.
(ii) "Obligations" means all obligations, liabilities and
indebtedness of every nature of Borrower from time to time owed to Lender under
the Loan Documents, including the unpaid principal amount of all debts, claims
and indebtedness, accrued and unpaid interest and all fees, costs and expenses,
whether primary, secondary, direct, contingent, fixed or otherwise, heretofore,
now or from time to time hereafter owing, due or payable, or any combination
thereof, whether before or after the filing of a proceeding under the Bankruptcy
Code by or against Borrower.
(jj) "Original Note" means that receivable line of credit
set forth in Secured Promissory Note dated June 17, 2002, issued by Borrower to
Lender, evidencing the loan from Lender to Borrower in the amount of Five
Hundred Thousand Dollars ($500,000).
(kk) "Original Security Agreement" means the security
agreement dated as of June 17, 2002, executed by the Borrower in favor of Lender
and of Phoenix Enterprises Family Fund, as amended, modified and supplemented
from time to time.
(ll) "Permitted Encumbrances" means the following
(i) Liens for taxes, assessments or other governmental charges
not yet due and payable or Liens for taxes, assessment or
other governmental charges due and payable if the same are
being diligently contested in good faith and by appropriate
proceedings and then only if and to the extent that adequate
reserves therefor are maintained on the books of Borrower and
its Subsidiaries, as applicable, in accordance with GAAP;
statutory
(ii) Liens of landlords, carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are
incurred in the ordinary course of business for sums not more
than ninety (90) days delinquent or which are being diligently
contested in good faith; provided that a reserve or other
appropriate provision shall have been made therefor and the
aggregate amount of liabilities secured by such Liens is less
than $100,000;
34
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation,
unemployment insurance and other types of social security
(other than any Lien imposed by the Employee Retirement Income
Security Act of 1974 or any rule or regulation promulgated
thereunder), or to secure the performance of tenders,
statutory obligations, surety, stay, customs and appeal bonds,
bids, leases, government contracts, trade contracts,
performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of
borrowed money);
(iv) deposits, in an aggregate amount not to exceed $100,000,
made in the ordinary course of business to secure liability to
insurance carriers;
(v) any attachment or judgment Lien which, individually or
when aggregated, does not constitute an Event of Default under
Subsection 6.1(i) (whether individually or when aggregated
with other such Liens);
(vi) Liens in favor of Lender;
(vii) Liens securing purchase money security agreements and
Capital Leases permitted under Subsection 3.1(C), provided
that such Liens do not encumber any property other than the
items purchased with the proceeds of such Indebtedness or
leased pursuant to such Indebtedness and such liens do not
secure any amounts other than amounts necessary to purchase or
lease such items;
(viii) Liens set forth on Schedule 3.2(a); and
(ix) Liens which pursuant to this Agreement secure refinanced
or replaced Indebtedness that is (x) outstanding as of the
date hereof, or (y) consented to by Lender, which had been
secured by a lien.
(mm) "Person" means and includes natural persons,
corporations, limited liability companies, limited partnerships, limited
liability partnerships, general partnerships, joint stock companies, joint
ventures, associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof and their permitted
successors and assigns (or in the case of a governmental Person, the successor
functional equivalent of such Person).
(nn) "Prime Rate" means, a variable rate of interest per
annum equal, on any day, to the rate of interest published on such day in the
Eastern Edition of The Wall Street Journal as the average prime lending rate for
75% of the United States' 30 largest commercial banks, or if the Eastern Edition
of The Wall Street Journal or such rate is not published on such day, such rate
as last published in the Eastern Edition of The Wall Street Journal. In the
event the Eastern Edition of The Wall Street Journal ceases to publish such rate
or an equivalent, the term "Prime Rate" shall be determined by reference to such
other regularly published prime rate based upon any averaging of such 30 banks,
as Lender shall determine, or if no such published average prime rate is
available, then the term "Prime Rate" shall mean a variable rate of interest per
annum as determined by Lender equal to the highest of the "prime rate,"
"reference rate," "base rate" or other similar rate announced from time to time
35
by any of Bankers Trust Company and Citibank as selected by Lender (with the
understanding that any such rate may merely be a reference rate and may not
necessarily represent the lowest or best rate actually charged to any customer
by such bank). Any change in the "Prime Rate" shall be automatic, without the
necessity of notice being provided to Borrower or any other party.
(oo) "Restricted Junior Payment" means: (i) any dividend or
other distribution, direct or indirect, on account of any equity interest in
Borrower or any of its Subsidiaries, including any ownership interest and any
shares of any class of stock of Borrower or any of its Subsidiaries now or
hereafter outstanding, except a dividend payable solely in shares of a class of
stock to the holders of that class and dividends payable to the Lender in its
capacity as a holder of stock of Borrower; (ii) any redemption, repurchase,
conversion, exchange, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, prior to its stated maturity,
of any equity interest in Borrower or any of its Subsidiaries, including any
ownership interest and any shares of any class of stock of Borrower or any of
its Subsidiaries now or hereafter outstanding; (iii) any payment or prepayment
of interest on, principal of, premium, if any, redemption, conversion, exchange,
purchase, retirement, defeasance, sinking fund or similar payment with respect
to, any Indebtedness in contravention of any subordination provisions for the
benefit of Lender; and (iv) any payment made prior to its stated maturity, to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any equity interest in Borrower or any of its
Subsidiaries, including any ownership interest and shares of any class of stock
of Borrower or any of its Subsidiaries now or hereafter outstanding.
(pp) "Security Agreements" means, collectively, the
Original Security Agreement, the Dial Security Agreement and the New Security
Agreement.
(qq) "Security Documents" means, collectively, all
instruments, documents and agreements executed by or on behalf of Borrower to
provide collateral security with respect to the Obligations, including, without
limitation, the Security Agreements and the Guarantee, and all instruments,
documents and agreements executed pursuant to the terms of the foregoing, in
such case, as amended, modified and supplemented from time to time.
(rr) "Security Interest" means all Liens in favor of
Lender, created hereunder or under any of the Security Documents to secure the
Obligations.
(ss) "Subsidiary" means, with respect to any Person, any
corporation, partnership, association or other business entity of which more
than fifty percent (50%) of the total voting power of shares of stock (or
equivalent ownership or controlling interest) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof is at the time owned or controlled, directly or indirectly, by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof
(tt) "Warrant" means the Warrant to Purchase Common Stock
of Excelsior Radio Networks, Inc. dated as of September 30, 2002, executed by
Borrower in favor of Lender, as amended, modified and supplemented from time to
time.
36
9.2 Other Definitional Provisions. References to
"Sections," "Subsections," "Exhibits" and "Schedules" shall be to Sections,
Subsections, Exhibits and Schedules of this Agreement unless otherwise
specifically provided. Any of the terms defined in Subsection 9.1 may, unless
the context otherwise requires, be used in the singular or the plural depending
on the reference. In this Agreement, "hereof," "herein," "hereto," "hereunder"
and the like mean and refer to this Agreement as a whole and not merely to the
specific section, paragraph or clause in which the word appears; words importing
any gender include the other gender; references to "writing" include printing,
typing, lithography and other means of reproducing words in a tangible visible
form; the words "including," "includes" and "include" shall be deemed to be
followed by the words "without limitation"; references to agreements and other
contractual instruments shall be deemed to include subsequent amendments,
assignments, and other modifications thereto, but only to the extent such
amendments, assignments and other modifications are not prohibited by the terms
of this Agreement or any other Loan Document; references to Persons include
their permitted successors and assigns 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 same and any
successor statutes and regulations.
37
Witness the due execution hereof by the duly authorized
officers of the undersigned as of the date first written above.
SUNSHINE II, LLC, as Lender
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
EXCELSIOR RADIO NETWORKS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
38
Exhibit 1.1(a)
THIS NOTE IS ENTITLED TO THE BENEFIT OF THAT CERTAIN SECURITY AGREEMENT, DATED
AS OF JUNE 17, 2002, BY EXCELSIOR RADIO NETWORKS, INC. IN FAVOR OF SUNSHINE II,
LLC AND PHOENIX ENTERPRISES FAMILY FUND LLC AND TO THE BENEFIT OF THAT CERTAIN
SECURITY AGREEMENT, DATED AS OF SEPTEMBER 30, 2002, BY EXCELSIOR RADIO NETWORKS,
INC. IN FAVOR OF SUNSHINE II, LLC
$500,000.00 September 30, 2002
AMENDED AND RESTATED SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, EXCELSIOR RADIO NETWORKS, INC.,
a Delaware corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Borrower") hereby promises to pay to the order of SUNSHINE II, LLC, a
Colorado limited liability company, at its address ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Payee"), on October 31, 2002 (the "Maturity
Date"), the principal sum of FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) or such
lesser principal amount as shall at such time be outstanding hereunder (the
"Principal Amount"). Each payment by the Borrower pursuant to this Amended and
Restated Secured Promissory Note (this "Note) shall be made without set-off or
counterclaim and shall be made in lawful currency of the United States of
America and in immediately available funds. This Note amends and restates, in
all respects, the Secured Promissory Note dated June 17, 2002, issued by
Borrower to Lender, evidencing the loan from Lender to Borrower in the amount of
Five Hundred Thousand Dollars ($500,000).
1. Payment of Interest.Interest on this Note shall accrue on the Principal
Amount outstanding from time to time, and payments of Interest shall be made by
Borrower to Payee, each in accordance with the terms of the certain credit
agreement dated as of the date hereof by and between Borrower and Payee (the
"Credit Agreement"), including, but not limited to, Section 1.2 thereof.
2. Payment of Principal. The Principal Amount of this Note together with
interest accrued and unpaid thereon shall be payable by Borrower to Payee in
accordance with the terms of the Credit Agreement, including, but not limited
to, Sections 1.5 and 1.6 thereof; provided, howver, that interest
3. Limitation on Interest and Fees. Notwithstanding anything to the contrary set
forth herein, the aggregate interest, fees and other amounts required to be paid
by Borrower to Payee are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of maturity of the Note or
otherwise, shall the amount paid or agreed to be paid to Payee under this Note
exceed the maximum permissible amount under applicable law. If under or from any
circumstances whatsoever, fulfillment of any provision hereof shall involve
exceeding the limit of such validity prescribed by applicable law then the
obligation to be fulfilled shall automatically be reduced to the limit of such
validity and if under or from circumstances whatsoever Payee should ever receive
1
as interest any amount which would exceed the highest lawful rate, the amount of
such interest that is excessive shall be applied to the reduction of the
Principal Amount and not to the payment of interest.
4. Default. Upon (x) an Event of Default (as such term is defined in the Credit
Agreement) set forth in Subsections 6.1(a), 6.1(b), 6.1(c), 6.1(g), 6.1(h),
6.1(k) and 6.1(l) of the Credit Agreement as well as a breach by Borrower of
Subsection 5.13 of the Credit Agreement, or (y) any other Event of Default (as
such term is defined in the Credit Agreement), upon notice from Lender, in
addition to any other right, remedy, power or privilege available permitted by
law to Payee or to pursuant to the terms of the Loan Documents (as such term is
defined in the Credit Agreement), the Principal Amount and accrued interest
shall become due and payable immediately, without any presentment, demand,
protest, notice of default, notice of intention to accelerate, notice of
acceleration or other notice of any kind (other than notice of such election),
all of which are hereby expressly waived by the Borrower. The Borrower agrees to
pay to the Payee hereof, on demand, all costs and expenses (including reasonable
legal fees and expenses) incurred in connection with the enforcement and
collection of this Note.
5. Security Interest. This Note is secured by the Collateral (as defined in that
certain security agreement, dated as of the June 17, 2002, by and between
Borrower, Payee and Phoenix Enterprises Family Fund (as the same may be amended,
modified, supplemented, renewed, extended, restated or replaced from time to
time, the "Original Security Agreement") and by the Collateral (as defined in
that certain security agreement, dated as of the September 30, 2002, by and
between Borrower and Payee (as the same may be amended, modified, supplemented,
renewed, extended, restated or replaced from time to time, the "New Security
Agreement" and collectively with the Original Security Agreement, the "Security
Agreements"), together with all other collateral in which the Borrower now or
hereafter grants to Payee a security interest. The Borrower expressly
acknowledges and agrees that the this Note is a "Note" (as defined in the
Original Security Agreement"). The Payee is entitled to all of the benefits and
rights in the Security Agreements and any supplement, agreement, document or
instrument now or any time hereafter executed and/or delivered in connection
with the Security Agreements.
6. Governing Law. This Note shall be governed by, and construed and enforced in
accordance with the law of the State of New York as in effect from time to time,
without giving effect to any choice of laws or conflict of laws principles
thereof (other than Section 5-1401 of the General Obligations Law). The Borrower
and Payee hereby agree and consent to be subject to the jurisdiction of the
United States District Court for the Southern District of New York and in the
absence of such federal jurisdiction, the parties consent to be subject to the
jurisdiction of the Supreme Court of the State of New York, County of New York.
The Borrower and Payee further consent and agree that each such party may be
served with process in the same manner as a notice may be given under Section 12
hereof. The parties hereto expressly waive any objection they may have to the
laying of venue.
7. Severability. If any provision of this Note is invalid or unenforceable in
any jurisdiction, the other provisions hereof shall remain in full force and
effect in such jurisdiction and the remaining provisions hereof shall be
liberally construed in favor of the holder hereof in order to effectuate the
provisions hereof and the invalidity of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of any other provision in any
other jurisdiction, including the State of New York.
2
8. Successors and Assigns; Transferability. This Note shall be binding upon and
inure to the benefit of the Payee and the Borrower and their respective
transferees, successors and assigns. Payee may transfer or assign any of its
rights hereunder without the prior written consent of the Borrower. The Borrower
may transfer or assign any of its rights or obligations hereunder only upon
receipt of the written consent thereto of the Payee.
9. Replacement of Note. Upon receipt of evidence reasonably satisfactory to the
Borrower of the loss, theft, destruction or mutilation of this Note, and the
receipt of an indemnity agreement of the Payee reasonably satisfactory to the
Borrower, the Borrower will, at the expense of the Payee, execute and deliver,
in lieu thereof, a new Note of like terms.
10. Descriptive Headings. The descriptive headings of this Note are inserted for
convenience only and do not constitute a substantive part of this Note.
11. Amendments and Waivers. Any term, covenant, condition or other provision of
this Note may be amended or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of each of the Payee and Borrower. Any amendment or waiver shall
be binding upon each future holder of this Note and the Borrower , whether or
not such Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
12. Notices. Any required notice or other communication shall be in writing
addressed to the respective party as set forth above and may be personally
delivered, telecopied, sent by overnight courier service or U.S. mail and shall
be deemed to have been given: (i) if delivered in person, when delivered; (ii)
if delivered by telecopy, on the date of transmission if transmitted on a
Business Day before 2:00 p.m. (New York, New York time) and otherwise on the
Business Day next succeeding the date of transmission; (c) if delivered by
overnight courier, two (2) Business Days after delivery to the courier properly
addressed; or (d) if delivered by U.S. mail, four (4) Business Days after
deposit in the mails with postage prepaid and proper address.
13. Waiver of Jury Trial. BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THIS NOTE. BORROWER FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING SUCH
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE NOTE THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S ACCEPTING THIS NOTE.
14. Rights, Remedies Cumulative. The rights and remedies of the Payee under the
Loan Documents shall be cumulative and not exclusive of any rights or remedies
3
which it would otherwise have, and no failure or delay by the Payee in
exercising any right shall operate as a waiver of it, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right.
[END OF TEXT]
4
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized, as of the date
first above written.
EXCELSIOR RADIO NETWORKS, INC.
By: ______________________________
Name:
Title:
5
Exhibit 1.1(b)
THIS NOTE IS ENTITLED TO THE BENEFIT OF THAT CERTAIN SECURITY AGREEMENT, DATED
AS OF SEPTEMBER 30, 2002 BY EXCELSIOR RADIO NETWORKS, INC. IN FAVOR OF SUNSHINE
II, LLC.
$2,250,000.00 September 30, 2002
SECURED PROMISSORY NOTE
FOR VALUE RECEIVED, the undersigned, EXCELSIOR RADIO NETWORKS, INC.,
a Delaware corporation, having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ("Borrower") hereby promises to pay to the order of SUNSHINE II, LLC, a
Colorado limited liability company, at its address ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Payee"), on September 29, 2004 (the
"Maturity Date"), the principal sum of TWO MILLION TWO HUNDRED FIFTY THOUSAND
DOLLARS ($2,250,000.00) or such lesser principal amount as shall at such time be
outstanding hereunder (the "Principal Amount"). Each payment by the Borrower
pursuant to this Note shall be made without set-off or counterclaim and shall be
made in lawful currency of the United States of America and in immediately
available funds.
1. Payment of Interest.Interest on this Note shall accrue on the Principal
Amount outstanding from time to time, and payments of Interest shall be made by
Borrower to Payee, each in accordance with the terms of the certain credit
agreement dated as of the date hereof by and between Borrower and Payee (the
"Credit Agreement"), including, but not limited to, Section 1.2 thereof.
2. Payment of Principal. The Principal Amount of this Note together with
interest accrued and unpaid thereon shall be payable by Borrower to Payee in
accordance with the terms of the Credit Agreement, including, but not limited
to, Sections 1.5 and 1.6 thereof.
3. Limitation on Interest and Fees. Notwithstanding anything to the contrary set
forth herein, the aggregate interest, fees and other amounts required to be paid
by Borrower to Payee are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of acceleration of maturity of the Note or
otherwise, shall the amount paid or agreed to be paid to Payee under this Note
exceed the maximum permissible amount under applicable law. If under or from any
circumstances whatsoever, fulfillment of any provision hereof shall involve
exceeding the limit of such validity prescribed by applicable law then the
obligation to be fulfilled shall automatically be reduced to the limit of such
validity and if under or from circumstances whatsoever Payee should ever receive
as interest any amount which would exceed the highest lawful rate, the amount of
such interest that is excessive shall be applied to the reduction of the
Principal Amount and not to the payment of interest.
4. Default. Upon (x) an Event of Default (as such term is defined in the Credit
Agreement) set forth in Subsections 6.1(a), 6.1(b), 6.1(c), 6.1(g), 6.1(h),
1
6.1(k), and 6.1(l) of the Credit Agreement as well as a breach by Borrower of
Subsection 5.13 of the Credit Agreement, or (y) any other Event of Default (as
such term is defined in the Credit Agreement), upon notice from Lender, in
addition to any other right, remedy, power or privilege available permitted by
law to Payee or to pursuant to the terms of the Loan Documents (as such term is
defined in the Credit Agreement), the Principal Amount and accrued interest
shall become due and payable immediately, without any presentment, demand,
protest, notice of default, notice of intention to accelerate, notice of
acceleration or other notice of any kind (other than notice of such election),
all of which are hereby expressly waived by the Borrower. The Borrower agrees to
pay to the Payee hereof, on demand, all costs and expenses (including reasonable
legal fees and expenses) incurred in connection with the enforcement and
collection of this Note.
5. Security Interest. This Note is secured by the Collateral (as defined in that
certain security agreement, dated as of the date hereof, by and between Borrower
and Payee (as the same may be amended, modified, supplemented, renewed,
extended, restated or replaced from time to time, the "Security Agreement"),
together with all other collateral in which the Borrower now or hereafter grants
to Payee a security interest. The Payee is entitled to all of the benefits and
rights in the Security Agreement and any supplement, agreement, document or
instrument now or any time hereafter executed and/or delivered in connection
with the Security Agreement.
6. Governing Law. This Note shall be governed by, and construed and enforced in
accordance with the law of the State of New York as in effect from time to time,
without giving effect to any choice of laws or conflict of laws principles
thereof (other than Section 5-1401 of the General Obligations Law). The Borrower
and Payee hereby agree and consent to be subject to the jurisdiction of the
United States District Court for the Southern District of New York and in the
absence of such federal jurisdiction, the parties consent to be subject to the
jurisdiction of the Supreme Court of the State of New York, County of New York.
The Borrower and Payee further consent and agree that each such party may be
served with process in the same manner as a notice may be given under Section 12
hereof. The parties hereto expressly waive any objection they may have to the
laying of venue.
7. Severability. If any provision of this Note is invalid or unenforceable in
any jurisdiction, the other provisions hereof shall remain in full force and
effect in such jurisdiction and the remaining provisions hereof shall be
liberally construed in favor of the holder hereof in order to effectuate the
provisions hereof and the invalidity of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of any other provision in any
other jurisdiction, including the State of New York.
8. Successors and Assigns; Transferability. This Note shall be binding upon and
inure to the benefit of the Payee and the Borrower and their respective
transferees, successors and assigns. Payee may transfer or assign any of its
rights hereunder without the prior written consent of the Borrower. The Borrower
may transfer or assign any of its rights or obligations hereunder only upon
receipt of the written consent thereto of the Payee.
9. Replacement of Note. Upon receipt of evidence reasonably satisfactory to the
Borrower of the loss, theft, destruction or mutilation of this Note, and the
receipt of an indemnity agreement of the Payee reasonably satisfactory to the
Borrower, the Borrower will, at the expense of the Payee, execute and deliver,
in lieu thereof, a new Note of like terms.
2
10. Descriptive Headings. The descriptive headings of this Note are inserted for
convenience only and do not constitute a substantive part of this Note.
11. Amendments and Waivers. Any term, covenant, condition or other provision of
this Note may be amended or compliance therewith may be waived (either generally
or in a particular instance and either retroactively or prospectively), with the
written consent of each of the Payee and Borrower. Any amendment or waiver shall
be binding upon each future holder of this Note and the Borrower , whether or
not such Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation not expressly
amended or waived or impair any right consequent thereon.
12. Notices. Any required notice or other communication shall be in writing
addressed to the respective party as set forth above and may be personally
delivered, telecopied, sent by overnight courier service or U.S. mail and shall
be deemed to have been given: (i) if delivered in person, when delivered; (ii)
if delivered by telecopy, on the date of transmission if transmitted on a
Business Day before 2:00 p.m. (New York, New York time) and otherwise on the
Business Day next succeeding the date of transmission; (c) if delivered by
overnight courier, two (2) Business Days after delivery to the courier properly
addressed; or (d) if delivered by U.S. mail, four (4) Business Days after
deposit in the mails with postage prepaid and proper address.
13. Waiver of Jury Trial. BORROWER HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS NOTE. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THIS NOTE. BORROWER FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING SUCH
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THE NOTE THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE'S ACCEPTING THIS NOTE.
14. Rights, Remedies Cumulative. The rights and remedies of the Payee under the
Loan Documents shall be cumulative and not exclusive of any rights or remedies
which it would otherwise have, and no failure or delay by the Payee in
exercising any right shall operate as a waiver of it, nor shall any single or
partial exercise of any power or right preclude its other or further exercise or
the exercise of any other power or right.
[END OF TEXT]
3
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized, as of the date
first above written.
EXCELSIOR RADIO NETWORKS, INC.
By: ______________________________
Name:
Title:
4
EXHIBIT 4.1(B)
FORM OF
COMPLIANCE CERTIFICATE
THIS COMPLIANCE CERTIFICATE is given by ______________, the [CHIEF
EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER] of _________________ ("Borrower")
pursuant to Subsection 4.1(b) of that certain Credit Agreement, dated as of
September 30, 2002 (as such agreement may hereafter be amended, modified or
supplemented, the "Credit Agreement"), between the Borrower and the Lender (as
defined therein). Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement.
I hereby certify as follows:
1. I am the [CHIEF EXECUTIVE OFFICER/CHIEF FINANCIAL OFFICER] of the Borrower,
and as such possess the knowledge and authority to certify to the matters set
forth in this Compliance Certificate, and hereby certificate that the matters
set forth below are true and accurate to the best of my present knowledge,
information and belief after due inquiry;
2. Attached hereto as Annex A are the [AUDITED/UNAUDITED] [ANNUAL/QUARTERLY]
financial statements of the Borrower, for the fiscal [YEAR/QUARTER] ended
________________, as required by Subsection 4.1(b) of the Credit Agreement. Such
financial statements were prepared in accordance with GAAP consistently applied
(except as expressly provided in the Credit Agreement), fairly present the
condition of the Borrower during the periods covered thereby and as of the dates
thereof, and are in a format that demonstrates any accounting or formatting
changes that may be required by various jurisdictions in which the business of
the Borrower is conducted (to the extent not inconsistent with GAAP);
3. I have reviewed the activities of the Borrower, and consulted with
appropriate representatives of the Borrower during the fiscal [YEAR/QUARTER]
ended ____________, and reviewed the Credit Agreement and the other Loan
Documents. As of the date of this Compliance Certificate, there is no condition,
event or act which constitutes a Default or an Event of Default under the Credit
Agreement, except as disclosed on Annex B hereto.
4. Attached as Annex C hereto is a complete list of substantially all real
property or interests therein, including easements, licenses and similar rights
in real estate, purchased, leased otherwise acquired by the Borrower since the
time such information was last provided to the Lender.
IN WITNESS WHEREOF, I have executed this Compliance Certificate as of
__________________, _____.
-------------------------------------
Name:
Title:
Company: