EXHIBIT 10.5
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LOAN AND SECURITY AGREEMENT
BY AND AMONG
ACME TELEVISION, LLC
AS BORROWER,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
FOOTHILL CAPITAL CORPORATION
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF FEBRUARY 13, 2002
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TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION.........................................................1
1.1 Definitions...................................................................1
1.2 Accounting Terms.............................................................33
1.3 Code.........................................................................33
1.4 Construction.................................................................33
1.5 Schedules and Exhibits.......................................................34
2. LOAN AND TERMS OF PAYMENT...........................................................34
2.1 Revolver Advances............................................................34
2.2 Reduction of Maximum Revolver Amount.........................................35
2.3 Borrowing Procedures and Settlements.........................................36
2.4 Payments.....................................................................43
2.5 Overadvances.................................................................46
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and
Calculations.................................................................46
2.7 Cash Management..............................................................48
2.8 Crediting Payments...........................................................49
2.9 Designated Account...........................................................49
2.10 Maintenance of Loan Account; Statements of Obligations.......................50
2.11 Fees.........................................................................50
2.12 Letters of Credit............................................................51
2.13 LIBOR Option.................................................................54
2.14 Capital Requirements.........................................................57
3. CONDITIONS; TERM OF AGREEMENT.......................................................58
3.1 Conditions Precedent to the Initial Extension of Credit......................58
3.2 Conditions Subsequent to the Initial Extension of Credit.....................61
3.3 Conditions Precedent to all Extensions of Credit.............................62
3.4 Term.........................................................................62
3.5 Effect of Termination........................................................62
3.6 Early Termination by Borrower................................................63
4. CREATION OF SECURITY INTEREST.......................................................64
4.1 Grant of Security Interest...................................................64
4.2 Negotiable Collateral........................................................65
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.......65
4.4 Delivery of Additional Documentation Required................................65
4.5 Power of Attorney............................................................66
4.6 Right to Inspect.............................................................66
4.7 Control Agreements...........................................................67
5. REPRESENTATIONS AND WARRANTIES......................................................67
5.1 No Encumbrances..............................................................67
5.2 [Intentionally omitted]......................................................67
5.3 [Intentionally omitted]......................................................67
5.4 Equipment....................................................................67
5.5 Location of Inventory and Equipment..........................................67
5.6 [Intentionally omitted]......................................................67
5.7 Location of Chief Executive Office; FEIN.....................................68
5.8 Due Organization and Qualification; Subsidiaries.............................68
5.9 Due Authorization; No Conflict...............................................68
5.10 Litigation...................................................................70
5.11 No Material Adverse Change...................................................70
5.12 Fraudulent Transfer..........................................................70
5.13 Employee Benefits............................................................71
5.14 Environmental Condition......................................................71
5.15 Brokerage Fees...............................................................71
5.16 Intellectual Property........................................................71
5.17 Leases.......................................................................71
5.18 DDAs.........................................................................71
5.19 Complete Disclosure..........................................................72
5.20 Indebtedness.................................................................72
5.21 Licenses and Permits.........................................................72
5.22 No Default in Main Station Licenses..........................................73
5.23 LMAs.........................................................................73
5.24 Governmental Authority.......................................................73
5.25 Inactive Subsidiary..........................................................73
5.26 The Stations.................................................................73
6. AFFIRMATIVE COVENANTS...............................................................75
6.1 Accounting System............................................................75
6.2 Collateral Reporting.........................................................75
6.3 Financial Statements, Reports, Certificates..................................75
6.4 [Intentionally omitted]......................................................78
6.5 Advertising Rebates..........................................................78
6.6 Maintenance of Properties....................................................78
6.7 Taxes........................................................................78
6.8 Insurance....................................................................78
6.9 Location of Inventory and Equipment..........................................80
6.10 Compliance with Laws.........................................................80
6.11 Leases.......................................................................80
6.12 Brokerage Commissions........................................................80
6.13 Existence....................................................................80
6.14 Environmental................................................................80
6.15 Government Authorization.....................................................81
6.16 Off-the-Air Reports..........................................................81
6.17 License Status...............................................................81
6.18 Notices......................................................................81
6.19 Preservation of FCC Licenses.................................................82
6.20 Disclosure Updates...........................................................82
7. NEGATIVE COVENANTS..................................................................82
7.1 Indebtedness.................................................................83
7.2 Liens........................................................................84
7.3 Restrictions on Fundamental Changes..........................................84
7.4 Disposal of Assets...........................................................84
7.5 Change Name..................................................................84
7.6 Guarantee....................................................................84
7.7 Nature of Business...........................................................85
7.8 Prepayments and Amendments...................................................85
7.9 Change of Control............................................................85
7.10 [Intentionally omitted]............................ERROR! BOOKMARK NOT DEFINED.
7.11 Distributions................................................................86
7.12 Accounting Methods...........................................................87
7.13 Investments..................................................................87
7.14 Transactions with Affiliates.................................................87
7.15 Suspension...................................................................87
7.16 [Intentionally omitted]......................................................87
7.17 Use of Proceeds..............................................................87
7.18 Change in Location of Chief Executive Office; Inventory and Equipment
with Bailees.................................................................87
7.19 Securities Accounts..........................................................88
7.20 Main Station Licenses........................................................88
7.21 Local Marketing Agreements...................................................88
7.22 Financial Covenants..........................................................89
7.23 Inactive Subsidiary..........................................................91
8. EVENTS OF DEFAULT...................................................................91
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..............................................95
9.1 Rights and Remedies..........................................................95
9.2 Remedies Cumulative..........................................................97
10. TAXES AND EXPENSES..................................................................98
11. WAIVERS; INDEMNIFICATION............................................................98
11.1 Demand; Protest; etc.........................................................98
11.2 The Lender Group's Liability for Collateral..................................98
11.3 Indemnification..............................................................98
12. NOTICES.............................................................................99
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.........................................100
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.........................................101
14.1 Assignments and Participations..............................................101
14.2 Successors..................................................................104
15. AMENDMENTS; WAIVERS................................................................104
15.1 Amendments and Waivers......................................................104
15.2 Replacement of Holdout Lender...............................................105
15.3 No Waivers; Cumulative Remedies.............................................106
16. AGENT; THE LENDER GROUP............................................................107
16.1 Appointment and Authorization of Agent......................................107
16.2 Delegation of Duties........................................................108
16.3 Liability of Agent..........................................................108
16.4 Reliance by Agent...........................................................108
16.5 Notice of Default or Event of Default.......................................108
16.6 Credit Decision.............................................................109
16.7 Costs and Expenses; Indemnification.........................................109
16.8 Agent in Individual Capacity................................................110
16.9 Successor Agent.............................................................111
16.10 Lender in Individual Capacity...............................................111
16.11 Withholding Taxes...........................................................111
16.12 Collateral Matters..........................................................114
16.13 Restrictions on Actions by Lenders; Sharing of Payments.....................115
16.14 Agency for Perfection.......................................................115
16.15 Payments by Agent to the Lenders............................................115
16.16 Concerning the Collateral and Related Loan Documents........................116
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information......................................116
16.18 Several Obligations; No Liability...........................................117
16.19 Legal Representation of Agent...............................................118
17. GENERAL PROVISIONS.................................................................118
17.1 Effectiveness...............................................................118
17.2 Section Headings............................................................118
17.3 Interpretation..............................................................118
17.4 Severability of Provisions..................................................118
17.5 Amendments in Writing.......................................................118
17.6 Counterparts; Telefacsimile Execution.......................................118
17.7 Revival and Reinstatement of Obligations....................................119
17.8 FCC Approvals...............................................................119
17.9 Integration.................................................................119
EXHIBIT 10.6
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement"), is entered
into as of February 13, 2002 between and among, on the one hand, the lenders
identified on the signature pages hereof (such lenders, together with their
respective successors and assigns, are referred to hereinafter each individually
as a "Lender" and collectively as the "Lenders"), FOOTHILL CAPITAL CORPORATION,
a California corporation, as the arranger and administrative agent for the
Lenders ("Agent"), and, on the other hand, ACME TELEVISION, LLC, a Delaware
limited liability company ("Borrower").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following definitions:
"Account Debtor" means any Person who is or who may become
obligated under, with respect to, or on account of, an Account, chattel paper,
or a General Intangible.
"Accounts" means all of Borrower's or the Obligors', as the
context requires, now owned or hereafter acquired right, title, and interest
with respect to "accounts" (as that term is defined in the Code), and any and
all supporting obligations in respect thereof.
"Acme Holdings Missouri" means Acme Television Holdings of
Missouri, Inc., a Missouri corporation.
"Acme Intermediate" means Acme Intermediate Holdings, LLC, a
Delaware limited liability company.
"Acme Parent" means Acme Communications, Inc., a Delaware
corporation.
"Acme Television Missouri" means Acme Television of Missouri,
Inc., a Missouri corporation.
"Acquisition" has the meaning set forth in the definition of
"Permitted Acquisition."
"Acquisition Agreement" means the acquisition, purchase or other
agreement which sets forth the terms and conditions of a Permitted Acquisition.
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"Acquisition Documents" means an Acquisition Agreement and any
other agreement entered into from time to time in connection with such
Acquisition Agreement.
"Acquisition License Company" means a Subsidiary of Borrower
which is directly or indirectly wholly owned by Borrower and is formed for the
sole purposes of holding one or more FCC Licenses in the market served by a
television broadcast property owned and operated by the related respective
Operating Company and acquired by an Obligor pursuant to a Permitted Acquisition
or a Permitted Swap.
"Acquisition Operating Company" means Subsidiary of Borrower
which is directly or indirectly wholly owned by Borrower and is formed for the
sole purpose of owning and operating a television broadcast property in the
market served by such television broadcast property acquired by an Obligor
pursuant to a Permitted Acquisition or a Permitted Swap.
"Acquisition Projections" has the meaning set forth in clause
(viii) of the definition of "Permitted Acquisitions".
"Additional Documents" has the meaning set forth in Section 4.4.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person
who, directly or indirectly, controls, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct the management and
policies of a Person, whether through the ownership of Stock, by contract, or
otherwise; provided, however, that, for purposes of Section 7.14 hereof: (a) any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other members of the
governing body of a Person or 10% or more of the partnership or other ownership
interests of a Person (other than as a limited partner of such Person) shall be
deemed to control such Person, (b) each director (or comparable manager) of a
Person shall be deemed to be an Affiliate of such Person, and (c) each
partnership or joint venture in which a Person is a partner or joint venturer
shall be deemed to be an Affiliate of such Person.
"Affiliation Agreement" means an affiliation agreement between an
Obligor and a major television network.
"Agent" means Foothill, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"Agent's Account" means the account identified on Schedule A-1.
"Agent Advances" has the meaning set forth in Section 2.3(e)(i).
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"Agent's Liens" means the Liens granted by Borrower to Agent for
the benefit of the Lender Group under this Agreement or the other Loan
Documents.
"Agent-Related Persons" means Agent together with its Affiliates,
officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Applicable Federal Percentage" means for any taxable year the
marginal federal tax bracket of Acme Parent, as calculated by reference to the
federal income tax returns of Acme Parent for the immediately preceding year as
delivered by Acme Parent to Agent.
"Applicable Prepayment Premium" means 1% times the Maximum
Revolver Amount.
"Assignee" has the meaning set forth in Section 14.1.
"Assignment and Acceptance" means an Assignment and Acceptance in
the form of Exhibit A-1.
"Authorized Person" means any officer or other management
employee of Borrower.
"Availability" means, as of any date of determination, if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day, if such date of determination is not a
Business Day, the amount that Borrower is entitled to borrow as Advances under
Section 2.1 (after giving effect to all then outstanding Obligations and all
sublimits and reserves applicable hereunder).
"Bankruptcy Code" means the United States Bankruptcy Code, as in
effect from time to time.
"Base LIBOR Rate" means the rate per annum, determined by Agent
in accordance with its customary procedures, and utilizing such electronic or
other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/16%), on the basis of the rates at which Dollar
deposits are offered to major banks in the London interbank market on or about
11:00 a.m. (California time) 2 Business Days prior to the commencement of the
applicable Interest Period, for a term and in amounts comparable to the Interest
Period and amount of the LIBOR Rate Loan requested by Borrower in accordance
with this Agreement, which determination shall be conclusive in the absence of
manifest error.
"Base Rate" means, the rate of interest announced from time to
time within ▇▇▇▇▇ Fargo at its principal office in San Francisco as its "prime
rate", with the understanding that the "prime rate" is one of ▇▇▇▇▇ Fargo's base
rates (not necessarily the
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lowest of such rates) and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as ▇▇▇▇▇ Fargo may designate.
"Base Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the Base Rate.
"Base Rate Margin" means 3.00 percentage points.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which Borrower or any Subsidiary or ERISA Affiliate
of Borrower has been an "employer" (as defined in Section 3(5) of ERISA) within
the past six years.
"Board of Directors" means the board of directors (or comparable
managers) of Borrower or any committee thereof duly authorized to act on behalf
of the board.
"Books" means Borrower's, or the Obligors', as the case may be,
now owned or hereafter acquired books and records (including all of its Records
indicating, summarizing, or evidencing its assets (including the Collateral) or
liabilities, all of Borrower's, or the Obligors', as the case may be, Records
relating to its or their business operations or financial condition, and all of
its or their goods or General Intangibles related to such information).
"Borrower" has the meaning set forth in the preamble to this
Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances
made on the same day by the Lenders (or Agent on behalf thereof), or by Swing
Lender in the case of a Swing Loan, or by Agent in the case of an Agent Advance.
"Borrowing Base" has the meaning set forth in Section 2.1.
"Business Day" means any day that is not a Saturday, Sunday, or
other day on which national banks are authorized or required to close, except
that, if a determination of a Business Day shall relate to a LIBOR Rate Loan,
the term "Business Day" also shall exclude any day on which banks are closed for
dealings in Dollar deposits in the London interbank market.
"Capital Lease" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means any Indebtedness represented
by obligations under a Capital Lease; the amount of such Indebtedness for
purposes of this Agreement being the capitalized amount thereof, determined in
accordance with GAAP.
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"Cash Equivalents" means (a) marketable direct obligations issued
or unconditionally guaranteed by the United States or issued by any agency
thereof and backed by the full faith and credit of the United States, in each
case maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or ▇▇▇▇▇'▇,
(c) commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or ▇▇▇▇▇'▇, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
▇▇▇▇▇'▇, or (ii) certificates of deposit less than or equal to $100,000 in the
aggregate issued by any other bank insured by the Federal Deposit Insurance
Corporation.
"Cash Management Account" has the meaning set forth in Section
2.7(a).
"Cash Management Agreement" means that certain cash management
service agreement, in form and substance satisfactory to Agent, among Borrower,
Agent, and the Cash Management Bank.
"Cash Management Bank" has the meaning set forth in Section
2.7(a).
"Change of Control" means (a) any "person" or "group" (within the
meaning of Sections 13(d) and 14(d) of the Exchange Act), other than Permitted
Holders, becomes the beneficial owner (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 20%, or more, of the Stock of Borrower
having the right to vote for the election of members of the Board of Directors
and the Permitted Holders, in the aggregate, are the beneficial owners, directly
or indirectly, of less than 30% of such Stock, or (b) a majority of the members
of the Board of Directors do not constitute Continuing Directors or directors
appointed by the Permitted Holders, or (c) Borrower ceases to own and control
99%, or more, of the outstanding capital Stock of each of its Subsidiaries, or
(d) a "Change of Control" occurs under and as defined in the Indenture or the
Intermediate Indenture.
"Closing Date" means the earlier of (a) the date of the making of
the initial Advance (or other extension of credit) hereunder, or (b) the date on
which Agent sends Borrower a written notice that each of the conditions
precedent set forth in Section 3.1 either have been satisfied or have been
waived.
"Closing Date Business Plan" means the set of Projections of
Borrower and its Subsidiaries for the 3 year period following the Closing Date
(on a year by year basis, and for the 1 year period following the Closing Date,
on a month by month basis), in form and substance (including as to scope and
underlying assumptions) satisfactory to Agent.
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"Code" means the California Uniform Commercial Code, as in effect
from time to time.
"Collateral" means all of Borrower's now owned or hereafter
acquired right, title, and interest in and to each of the following:
(a) Accounts,
(b) Books,
(c) Equipment,
(d) General Intangibles,
(e) Inventory,
(f) Investment Property (other than the stock of
Inactive Subsidiary),
(g) Negotiable Collateral,
(h) Real Property Collateral,
(i) money or other assets of Borrower that now or
hereafter come into the possession, custody, or control of any member of the
Lender Group, and
(j) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Equipment, General
Intangibles, Inventory, Investment Property, Negotiable Collateral, Real
Property, money, deposit accounts, or other tangible or intangible property
resulting from the sale, exchange, collection, or other disposition of any of
the foregoing, or any portion thereof or interest therein, and the proceeds
thereof.
"Collateral Access Agreement" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in the Equipment or Inventory, in each case, in form and
substance satisfactory to Agent.
"Collateral Assignments of Key Leases" means one or more
collateral assignments, mortgages or deeds of trust, in form and substance
reasonably satisfactory to Agent, between one or more Obligors and Agent
respecting the hypothecation of such Obligor's rights under the Key Leases.
"Collateral Assignments of Tower Leases" means one or more
collateral assignments, mortgages, or deeds of trust, in form and substance
reasonably satisfactory to
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Agent, between one or more Obligors and Agent respecting the hypothecation of
such Obligor's rights under the Tower Leases.
"Collections" means all cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds of Borrower and its Subsidiaries.
"Commitment" means, with respect to each Lender, its Revolver
Commitment, or its Total Commitment, as the context requires, and, with respect
to all Lenders, their Revolver Commitments, or their Total Commitments, as the
context requires, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Compliance Certificate" means a certificate substantially in the
form of Exhibit C-1 delivered by the chief financial officer of Borrower to
Agent.
"Continuing Director" means (a) any member of the Board of
Directors who was a director (or comparable manager) of Borrower on the Closing
Date, and (b) any individual who becomes a member of the Board of Directors
after the Closing Date if such individual was appointed or nominated for
election to the Board of Directors by a majority of the Continuing Directors,
but excluding any such individual originally proposed for election in opposition
to the Board of Directors in office at the Closing Date in an actual or
threatened election contest relating to the election of the directors (or
comparable managers) of Borrower (as such terms are used in Rule 14a-11 under
the Exchange Act) and whose initial assumption of office resulted from such
contest or the settlement thereof.
"Control Agreement" means a control agreement, in form and
substance satisfactory to Agent, executed and delivered by one or more Obligors,
Agent, and the applicable securities intermediary with respect to a Securities
Account or bank with respect to a deposit account.
"Daily Balance" means, with respect to each day during the term
of this Agreement, the amount of an Obligation owed at the end of such day.
"Dayton Station" means WBDT-26 Dayton, Ohio.
"DDA" means any checking or other demand deposit account
maintained by Borrower.
"Decatur Station" means WBUI-23 Decatur, Illinois.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
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"Defaulting Lender" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"Defaulting Lender Rate" means (a) the Base Rate for the first 3
days from and after the date the relevant payment is due, and (b) thereafter, at
the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).
"Designated Account" means that certain DDA of Borrower
identified on Schedule D-1.
"Disbursement Letter" means an instructional letter executed and
delivered by Borrower to Agent regarding the extensions of credit, if any, to be
made on the Closing Date, the form and substance of which is satisfactory to
Agent.
"Dollars" or "$" means United States dollars.
"Due Diligence Letter" means the due diligence letter sent by
Agent's counsel to Borrower, together with Borrower's completed responses to the
inquiries set forth therein, the form and substance of such responses to be
satisfactory to Agent.
"EBITDA" means, with respect to any fiscal period, Borrower's and
its Subsidiaries' consolidated net earnings (or loss), minus extraordinary
gains, plus interest expense, income taxes, and depreciation and amortization,
LMA Fees, and other non-cash charges for such period, as determined in
accordance with GAAP.
"Eligible STAC Value" means, as of any date of determination, the
STAC Value of those Stations as to which Borrower has delivered to Agent (a) a
Collateral Assignment of Key Leases with respect to the Key Leases of such
Stations, (b) a Collateral Assignment of Tower Leases with respect to the Tower
Leases of such Stations, and (c) any required consents to hypothecation from the
lessors under such Key Leases and Tower Leases.
"Eligible Transferee" means (a) a commercial bank organized under
the laws of the United States, or any state thereof, and having unimpaired
capital in excess of $100,000,000, (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has unimpaired capital in excess of $100,000,000, provided that such bank
is acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates)
unimpaired capital in excess of $100,000,000, (d) any Affiliate (other than
individuals) of a Lender that was party hereto as
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of the Closing Date, (e) so long as no Event of Default has occurred and is
continuing, any other Person approved by Agent and Borrower, or (f) during the
continuation of an Event of Default, any other Person approved by Agent.
"Environmental Actions" means any complaint, summons, citation,
notice, directive, order, written claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter, or other written communication from
any Governmental Authority, or any third party involving violations of
Environmental Laws or releases of Hazardous Materials from (a) any assets,
properties, or businesses of the Obligors or any or their predecessors in
interest, (b) from adjoining properties or businesses, or (c) from or onto any
facilities which received Hazardous Materials generated by the Obligors or any
of their predecessors in interest.
"Environmental Law" means any applicable federal, state, or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy, or rule of common law now or
hereafter in effect and in each case as amended, or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on the Obligors,
relating to the environment, employee health and safety, or Hazardous Materials,
including CERCLA; RCRA; the Federal Water Pollution Control Act, 33 USC Section
1251 et seq; the Toxic Substances Control Act, 15 USC, Section 2601 et seq; the
Clean Air Act, 42 USC Section 7401 et seq.; the Safe Drinking Water Act, 42 USC.
Section 3803 et seq.; the Oil Pollution Act of 1990, 33 USC. Section 2701 et
seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42
USC. Section 11001 et seq.; the Hazardous Material Transportation Act, 49 USC
Section 1801 et seq.; and the Occupational Safety and Health Act, 29 USC.
Section 651 et seq. (only to the extent it regulates occupational exposure to
Hazardous Materials); any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Environmental Liabilities and Costs" means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts, or consultants,
and costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand by any
Governmental Authority or any third party, and which relate to any Environmental
Action.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" means all of Borrower's or the Obligors', as the context requires,
now owned or hereafter acquired right, title, and interest with respect to
equipment, machinery, machine tools, motors, furniture, furnishings, fixtures,
vehicles (including motor vehicles and trailers), tools, parts, goods (other
than consumer goods, farm products, or
-9-
Inventory), wherever located, including all attachments, accessories,
accessions, replacements, substitutions, additions, and improvements to any of
the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
Borrower under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which Borrower is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with Borrower and whose employees are aggregated with the employees of Borrower
under IRC Section 414(o).
"Event of Default" has the meaning set forth in Section 8.
"Excess Availability" means the amount, as of the date any
determination thereof is to be made, equal to Availability minus the aggregate
amount, if any, of all trade payables of Borrower and its Subsidiaries aged in
excess of 120 days from due date (excluding from such calculation the contingent
payable of approximately $1,500,000 owed as a result of Borrower's acquisition
of KPLR) and all book overdrafts in excess of historical practices with respect
thereto, in each case as determined by Agent in its Permitted Discretion.
"Excess Liquidity" means the amount, as of the date any
determination thereof is to be made, equal to (a) Excess Availability
(calculated without regard to any Default or Event of Default other than a
Triggering Event), plus (b) the amount of cash and Cash Equivalents then held by
the Obligors that are subject to Control Agreements in favor of Agent.
"Exchange Act" means the Securities Exchange Act of 1934, as in
effect from time to time.
"Existing Agent" means Canadian Imperial Bank of Commerce,
formerly referred to as Canadian Imperial Bank of Commerce, New York Agency, as
agent for the Existing Lenders.
"Existing Credit Agreement" means the First Amended and Restated
Credit Agreement, dated as of December 2, 1997, as amended, among Borrower,
Existing Lenders, and Existing Agent.
-10-
"Existing Lender Group" means Existing Agent and the Existing
Lenders.
"Existing Lenders" means CIBC, Inc. and Bankers Trust Company.
"FAA" means the Federal Aviation Administration (or any successor
agency, commission, bureau, department or other political subdivision of the
United States of America).
"Family Member" means, with respect to any individual, any other
individual having a relationship by blood (to the second degree of
consanguinity), marriage, or adoption to such individual.
"Family Trusts" means, with respect to any individual, trusts or
other estate planning vehicles established for the benefit of Family Members of
such individual and in respect of which such individual serves as trustee or in
a similar capacity.
"FCC" means the United States Federal Communications Commission
(or any successor agency, commission, bureau, department or other political
subdivision of the United States of America).
"FCC License" means any license, permit, certificate of
compliance, franchise, approval or authorization, issued by the FCC for the
operation of a Station.
"Fee Letter" means that certain fee letter, dated as of even date
herewith, between Borrower and Agent, in form and substance satisfactory to
Agent.
"FEIN" means Federal Employer Identification Number.
"First Albuquerque Station" means KWBQ-19 Albuquerque, New
Mexico.
"Flint-Saginaw-Bay City Acquisition" means the Acquisition by an
Acquisition License Company of one or more broadcast licenses in the
Flint-Saginaw-Bay City area of Michigan, in consideration of the receipt by the
applicable Seller of a Purchase Price not to exceed $3,000,000.
"Foothill" means Foothill Capital Corporation, a California
corporation.
"Foreign Person" has the meaning set forth in Section 14.1.
"Fort ▇▇▇▇▇ Station" means ▇▇▇▇-▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇.
"Funded Debt" means, without duplication and calculated on a
consolidated basis, all Indebtedness with respect to any of the following: (a)
money borrowed (whether recourse or non-recourse), including principal and
overdue interest and premiums, (b) Rate Hedging Obligations, (c) obligations
evidenced by a bond, debenture, note or other like
-11-
written obligation to pay money, (d) Capitalized Lease Obligations, (e)
obligations under conditional sales or other title retention agreements or
secured by any Lien, (f) any letters of credit, bankers acceptances or similar
instruments (including reimbursement obligations with respect thereto), (g) the
deferred unpaid purchase price of property or services, except trade payables
and accrued expenses incurred in the ordinary course of business, or (h) any
guaranty of any or all of the foregoing.
"Funding Date" means the date on which a Borrowing occurs.
"Funding Losses" has the meaning set forth in Section
2.13(b)(ii).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"General Intangibles" means all of Borrower's or the Obligors',
as the context requires, now owned or hereafter acquired right, title, and
interest with respect to general intangibles (including payment intangibles,
contract rights, rights to payment, rights arising under common law, statutes,
or regulations, choses or things in action, goodwill, patents, trade names,
trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders,
customer lists, monies due or recoverable from pension funds, route lists,
rights to payment and other rights under any royalty or licensing agreements
(including all FCC Licenses), infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, deposit accounts, insurance premium rebates, tax refunds, and
tax refund claims), and any and all supporting obligations in respect thereof,
and any other personal property other than goods (including Equipment and
Inventory), Accounts, Books, Investment Property, and Negotiable Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or
other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Green Bay Station" means ▇▇▇▇-▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇.
"Guarantor Security Agreement" means a security agreement
executed and delivered by each of the Guarantors and Agent, the form and
substance of which is satisfactory to Agent.
"Guarantors" means any one or more of Acme Subsidiary Holdings
III, LLC, a Delaware limited liability company, Acme Television of Florida, LLC,
a Delaware limited liability company, Acme Television of Illinois, LLC, a
Delaware limited liability company,
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Acme Television of New Mexico, L.L.C., a Delaware limited liability company,
Acme Television of Ohio, LLC, a Delaware limited liability company, Acme
Television of Oregon, LLC, a Delaware limited liability company, Acme Television
of Tennessee, LLC, a Delaware limited liability company, Acme Television of
Utah, L.L.C., a Delaware limited liability company, Acme Television of
Wisconsin, LLC, a Delaware limited liability company, Acme Television Licenses
of Florida, LLC, a Delaware limited liability company, Acme Television Licenses
of Illinois, LLC, a Delaware limited liability company, Acme Television Licenses
of New Mexico, L.L.C., a Delaware limited liability company, Acme Television
Licenses of Ohio, LLC, a Delaware limited liability company, Acme Television
Licenses of Oregon, LLC, a Delaware limited liability company, Acme Television
Licenses of Tennessee, LLC, a Delaware limited liability company, Acme
Television Licenses of Utah, L.L.C., a Delaware limited liability company, Acme
Television Licenses of Wisconsin, LLC, a Delaware limited liability company,
Acme Holdings Missouri, Acme Television Missouri, Acme Television Licenses of
Missouri, L.L.C., a Missouri limited liability company, and each License Company
or Operating Company formed or acquired by Borrower or its Subsidiaries after
the date hereof.
"Guaranty" means that certain general continuing guaranty
executed and delivered by each of the Guarantors in favor of Agent, for the
benefit of the Lender Group, in form and substance satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedge Agreement" means any and all transactions, agreements, or
documents now existing or hereafter entered into between Borrower or its
Subsidiaries which provide for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging Borrower's
or its Subsidiaries' exposure to fluctuations in interest or exchange rates,
loan, credit exchange, security or currency valuations or commodity prices.
"Hold-Back Amount" means, with respect to any Permitted
Disposition of a Station, the aggregate amount of all payments payable to the
Obligors, directly or indirectly,
-13-
in connection with such disposition, whether at the time thereof or after such
disposition, under earn-outs, indemnities or other contingent obligations,
escrowed funds, or other similar arrangements entered into in connection with
such disposition.
"Inactive Subsidiary" means Acme Finance Corporation, a Delaware
corporation.
"Indebtedness" means (a) all obligations for borrowed money, (b)
all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, interest rate swaps, or other financial products,
(c) all Capital Lease Obligations, (d) all obligations or liabilities of others
secured by a Lien on any asset of Borrower or its Subsidiaries, irrespective of
whether such obligation or liability is assumed, (e) all obligations for the
deferred purchase price of assets (other than trade debt incurred in the
ordinary course of business and repayable in accordance with customary trade
practices), and (f) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any of the foregoing obligations of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section 11.3.
"Indenture" means the Indenture dated as of September 30, 1997
among Borrower, the Inactive Subsidiary, Borrower's Subsidiaries that are
signatories thereto and Wilmington Trust Company , as trustee.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Insurance Proceeds Reserve" means, as of any date of
determination, the amount of monies that have been paid to Agent pursuant to
Section 6.8(b) and that remain available to be disbursed to Borrower for the
repair, replacement, or restoration of the asset that was damaged, destroyed, or
condemned.
"Intangible Assets" means, with respect to any Person, that
portion of the book value of all of such Person's assets that would be treated
as intangibles under GAAP.
"Intercompany Advances" means loans or advances (a) from Borrower
or one of its Subsidiaries to Borrower or one of its Subsidiaries, or (b) from
Borrower to one of the Parent Companies.
-14-
"Intercompany Subordination Agreement" means a subordination
agreement executed and delivered by each of the Parent Companies, each of the
Obligors, and Agent, the form and substance of which is satisfactory to Agent.
"Interest Period" means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan and ending
1, 2, 3, or 6 months thereafter; provided, however, that (a) if any Interest
Period would end on a day that is not a Business Day, such Interest Period shall
be extended (subject to clauses (c)-(e) below) to the next succeeding Business
Day, (b) interest shall accrue at the applicable rate based upon the LIBOR Rate
from and including the first day of each Interest Period to, but excluding, the
day on which any Interest Period expires, (c) any Interest Period that would end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day, (d) with
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, 3, or 6 months
after the date on which the Interest Period began, as applicable, and (e)
Borrower may not elect an Interest Period which will end after the Maturity
Date.
"Intermediate Indenture" means the Indenture dated September 30,
1997 among Acme International, Acme Intermediate Finance, Inc. and Wilmington
Trust Company, as Trustee.
"Intermediate Notes" means the 12% Senior Secured Discount Notes
due 2005 issued by Acme Intermediate and Acme Intermediate Finance, Inc.
pursuant to the Intermediate Indenture in the aggregate amount of approximately
$71,634,000.
"Inventory" means all of Borrower's or the Obligors', as the
context requires, now owned or hereafter acquired right, title, and interest
with respect to inventory, including goods held for sale or lease or to be
furnished under a contract of service, goods that are leased by any such Obligor
as lessor, goods that are furnished by such Obligor under a contract of service,
and raw materials, work in process, or materials used or consumed in the
Obligor's business.
"Investment" means, with respect to any Person, any investment by
such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock, and any other items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP.
-15-
"Investment Property" means all of Borrower's or the Obligors',
as the context requires, now owned or hereafter acquired right, title, and
interest with respect to "investment property" as that term is defined in the
Code, and any and all supporting obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect from
time to time.
"Issuing Lender" means Foothill or any other Lender that, at the
request of Borrower and with the consent of Agent agrees, in such Lender's sole
discretion, to become an Issuing Lender for the purpose of issuing L/Cs or L/C
Undertakings pursuant to Section 2.12.
"Janesville-Madison Acquisition" means the Acquisition by an
Acquisition License Company and an Acquisition Operating Company of the
Janesville-Madison Station, in consideration of the receipt by the applicable
Seller of a Purchase Price not to exceed $10,000,000.
"Janesville-Madison Station" means WHPN Janesville-Madison,
Wisconsin.
"Key Leases" has the meaning set forth in Section 5.17.
"Knoxville Station" means WBXX-20 Knoxville, Tennessee.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section 2.12(a).
"Lender" and "Lenders" have the respective meanings set forth in
the preamble to this Agreement, and shall include any other Person made a party
to this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of the
Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by Borrower under
any of the Loan Documents that are paid or incurred by the Lender Group, (b)
actual out-of-pocket fees or charges paid or incurred by Agent in connection
with the Lender Group's transactions with Borrower, including, actual
out-of-pocket fees or charges for photocopying, notarization, couriers and
messengers, telecommunication, public record searches (including tax lien,
litigation, and UCC searches and including searches with the patent and
trademark office, the copyright
-16-
office, or the department of motor vehicles), filing, recording, publication,
appraisal (including periodic Collateral appraisals or business valuations to
the extent of the fees and charges (and up to the amount of any limitation)
contained in this Agreement), real estate surveys, real estate title policies
and endorsements, and environmental audits, (c) actual out-of-pocket costs and
expenses incurred by Agent in the disbursement of funds to Borrower (by wire
transfer or otherwise), (d) charges paid or incurred by Agent resulting from the
dishonor of checks, (e) reasonable costs and expenses paid or incurred by the
Lender Group to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to audit examinations
of the Books to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement, (g) reasonable costs and expenses of
third party claims or any other suit paid or incurred by the Lender Group in
enforcing or defending the Loan Documents or in connection with the transactions
contemplated by the Loan Documents or the Lender Group's relationship with
Borrower or any guarantor of the Obligations, (h) Agent's reasonable fees and
expenses (including reasonable attorneys fees) incurred in advising,
structuring, drafting, reviewing, administering, or amending the Loan Documents,
and (i) Agent's and each Lender's reasonable fees and expenses (including
attorneys fees) incurred in terminating, enforcing (including attorneys fees and
expenses incurred in connection with a "workout," a "restructuring," or an
Insolvency Proceeding concerning Borrower or in exercising rights or remedies
under the Loan Documents), or defending the Loan Documents, irrespective of
whether suit is brought, or in taking any Remedial Action concerning the
Collateral.
"Lender-Related Person" means, with respect to any Lender, such
Lender, together with such Lender's Affiliates, and the officers, directors,
employees, and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Usage" means, as of any date of determination,
the aggregate undrawn amount of all outstanding Letters of Credit plus 100% of
the amount of outstanding time drafts accepted by an Underlying Issuer as a
result of drawings under Underlying Letters of Credit.
"Lexington Acquisition" means the Acquisition by an Acquisition
License Company of one or more broadcast licenses in Lexington, Kentucky, in
consideration of the receipt by the applicable Seller of a Purchase Price not to
exceed $3,000,000.
"LIBOR Deadline" has the meaning set forth in Section 2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit L-1.
-17-
"LIBOR Rate" means, for each Interest Period for each LIBOR Rate
Loan, the rate per annum determined by Agent (rounded upwards, if necessary, to
the next 1/16%) by dividing (a) the Base LIBOR Rate for such Interest Period, by
(b) 100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and
as of the effective day of any change in the Reserve Percentage.
"LIBOR Rate Loan" means each portion of an Advance that bears
interest at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means 4.25 percentage points.
"License Companies" means, collectively, Acme Television Licenses
of Florida, LLC, a Delaware limited liability company, Acme Television Licenses
of Illinois, LLC, a Delaware limited liability company, Acme Television Licenses
of Missouri, L.L.C., a Missouri limited liability company, Acme Television
Licenses of New Mexico, L.L.C., a Delaware limited liability company, Acme
Television Licenses of Ohio, LLC, a Delaware limited liability company, Acme
Television Licenses of Oregon, LLC, a Delaware limited liability company, Acme
Television Licenses of Tennessee, LLC, a Delaware limited liability company,
Acme Television Licenses of Utah, L.L.C., Acme Television Licenses of Wisconsin,
LLC, a Delaware limited liability company, and any Acquisition License Company
formed or acquired by Borrower or its Subsidiaries after the date hereof.
"Lien" means any interest in an asset securing an obligation owed
to, or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"LMA" means a local marketing agreement, program service
agreement or time brokerage agreement between a broadcaster and a television
station licensee pursuant to which the broadcaster provides programming to, and
retains revenues of, such licensee's station in exchange for fees paid to such
licensee.
"LMA Fees" means LMA fees for each Station under contract to be
purchased within 12 months after the date the Acquisition Agreement was entered
into with respect to such Station (up to an aggregate of $500,000 for all
Stations in any consecutive 12-month period).
"Loan Account" has the meaning set forth in Section 2.10.
-18-
"Loan Documents" means this Agreement, the Cash Management
Agreement, the Control Agreements, the Collateral Assignments of Key Leases, the
Collateral Assignments of Tower Leases, the Disbursement Letter, the Due
Diligence Letter, the Fee Letter, the Guarantor Security Agreement, the
Guaranty, the Intercompany Subordination Agreement, the Letters of Credit, the
Mortgages, the Officers' Certificate, the Pledge Agreement, any note or notes
executed by Borrower in connection with this Agreement and payable to a member
of the Lender Group, and any other agreement entered into, now or in the future,
by any of the Obligors and the Lender Group in connection with this Agreement.
"Main Station License" means a main station license issued by the
FCC authorizing a Station's primary transmissions, and not any auxiliary
licenses held by such Station.
"Material Adverse Change" means (a) a material adverse change in
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Obligors, taken as a whole, (b) a
material impairment of the Obligors' ability to perform the obligations under
the Loan Documents or of the Lender Group's ability to enforce the Obligations
or realize upon any material portion of the Collateral, or (c) a material
impairment of the enforceability or priority of the Agent's Liens with respect
to the Collateral as a result of an action or failure to act on the part of any
Obligor.
"Mature Stations" means the St. Louis Station, the Portland
Station, the Salt Lake City Station, the First Albuquerque Station, and the
Second Albuquerque Station.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $40,000,000; as such amount may
be reduced pursuant to Section 2.2.
"Mortgages" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by
the Obligors in favor of Agent, for the benefit of the Lender Group, in form and
substance satisfactory to Agent, that encumber the Real Property Collateral and
the related improvements thereto.
"Negotiable Collateral" means all of Borrower's or the Obligors',
as the context requires, now owned and hereafter acquired right, title, and
interest with respect to letters of credit, letter of credit rights,
instruments, promissory notes, drafts, documents, and chattel paper (including
electronic chattel paper and tangible chattel paper), and any and all supporting
obligations in respect thereof.
"Net Cash Proceeds" means, with respect to any disposition of assets by one or
more of the Obligors (including any LMA by any Obligor, as "licensee"
thereunder), the aggregate amount of all cash payments received by the Obligors,
directly or indirectly, in connection with such disposition, whether at the time
thereof or after such disposition, under
-19-
deferred payment arrangements or investments entered into or received in
connection with such disposition, minus the aggregate amount of (a) any
Permitted Purchase Money Indebtedness or other Permitted Indebtedness that was
secured by the assets that were the subject of the disposition and was required
to be repaid as a result of such disposition, (b) legal, accounting, regulatory,
title and recording tax expenses, commissions, and (c) any income taxes payable
by the Obligors or any of their direct or indirect stockholders, partners or
members in connection with such disposition.
"Non-Mature Stations" means (a) the Dayton Station, (b) the
Knoxville Station, (c) the Green Bay Station, (d) the Fort ▇▇▇▇▇ Station, (e)
the Decatur Station, and (f) the Janesville-Madison Station.
"Obligations" means all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have accrued), contingent reimbursement obligations with respect to
outstanding Letters of Credit, premiums, liabilities (including all amounts
charged to Borrower's Loan Account pursuant hereto), obligations, fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the provisions of
the Bankruptcy Code, would have accrued), guaranties, covenants, and duties of
any kind and description owing by Borrower to the Lender Group pursuant to or
evidenced by the Loan Documents and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including all interest not paid when due
and all Lender Group Expenses that Borrower is required to pay or reimburse by
the Loan Documents, by law, or otherwise. Any reference in this Agreement or in
the Loan Documents to the Obligations shall include all amendments, changes,
extensions, modifications, renewals, replacements, substitutions, and
supplements, thereto and thereof, as applicable, both prior and subsequent to
any Insolvency Proceeding.
"Obligors" means Borrower or the Guarantors, or any one of them.
"Officers' Certificate" means the representations and warranties
of officers form submitted by Agent to Borrower, together with Borrower's
completed responses to the inquiries set forth therein.
"Operating Companies" means, collectively, Acme Television of
Florida, LLC, a Delaware limited liability company, Acme Television of Illinois,
LLC, a Delaware limited liability company, Acme Television Missouri, Acme
Television of New Mexico, L.L.C., a Delaware limited liability company, Acme
Television of Ohio, LLC, a Delaware limited liability company, Acme Television
of Oregon, LLC, a Delaware limited liability company, Acme Television of
Tennessee, LLC, a Delaware limited liability company, Acme Television of Utah,
L.L.C., a Delaware limited liability company, Acme Television of Wisconsin, LLC,
a Delaware limited liability company, and any Acquisition Operating Company
formed or acquired by Borrower or its Subsidiaries after the date hereof.
-20-
"Overadvance" has the meaning set forth in Section 2.5.
"Overhead Expenses" means amounts payable by Borrower to the
Parent Companies in respect of reasonable accounting, legal, senior management,
trustees' fees owing under the Intermediate Indenture (including legal fees of
trustees), and other general expenses applicable to the ownership of Borrower
and its Subsidiaries, which expenses are not specifically related to the
operation of a Station (including expenses of Acme Television Holdings, LLC or
any of the other Parent Companies relating to the ownership of Sylvan Tower Co.,
LLC but not specifically related to the operation of a Station).
"Parent Companies" means Acme Communications, Inc., a Delaware
corporation, Acme Television Holdings, LLC, a Delaware limited liability
company, Acme Subsidiary Holdings II, LLC, a Delaware limited liability company,
Acme Intermediate, and Acme Intermediate Finance, Inc, a Delaware corporation.
"Participant" has the meaning set forth in Section 14.1(e).
"Participating Interests" has the meaning set forth in Section
14.1(e).
"Pay-Off Letter" means a letter, in form and substance
satisfactory to Agent, from Existing Agent to Agent specifying the amount
necessary to repay in full all of the obligations of Borrower and the other
Obligors owing to Existing Lender Group and obtain a release of all of the Liens
existing in favor of Existing Lender Group in and to the assets of Borrower and
the other Obligors.
"Permitted Acquisition" means any acquisition from a third party
(the "Seller") by Borrower or its Subsidiaries, whether by way of the purchase
of assets or stock, by merger or consolidation or otherwise, of substantially
all of the assets of or ownership interests in a television broadcast property
or FCC License (each an "Acquisition"), so long as (a) such Acquisition has been
approved in writing by the Required Lenders in their Permitted Discretion, and
(b):
(i) No Default or Event of Default shall have occurred or be
continuing or shall result from the consummation of such Acquisition;
(ii) If such Acquisition involves the purchase of Stock, such
Acquisition shall be effected in such a manner as to assure that the acquired
entity becomes a wholly owned direct or indirect Subsidiary of Borrower;
(iii) No later than (i) 30 days prior to the consummation of
such Acquisition or, if earlier, 10 Business Days after the execution and
delivery of the related Acquisition Agreement, Borrower shall have delivered to
Agent (with sufficient copies for all of the Lenders) copies of executed
counterparts of such Acquisition Agreement, together with all schedules thereto,
the forms of any additional agreements or instruments to be executed at
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the closing of such Acquisition (to the extent available), and all applicable
financial information, including revised Projections, updated to reflect such
Acquisition and any related transactions, (2) promptly following a request
therefor, copies of such other information or documents relating to such
Acquisition as Agent shall have reasonably requested, and (3) promptly following
the consummation of such Acquisition, certified copies of the agreements,
instruments and documents referred to above to the extent the same have been
executed and delivered at the closing of such Acquisition;
(iv) The aggregate amount of all consideration payable by
Borrower or its Subsidiaries in connection with such Acquisition (other than
earn-outs and customary post-closing adjustments escrows, holdbacks and
indemnities and Indebtedness permitted under Section 7.1) shall be payable on
the date of such Acquisition;
(v) Neither Borrower nor its Subsidiaries shall, in connection
with such Acquisition, assume or remain liable with respect to any Indebtedness
(including any unpaid material tax or ERISA liability), except (a) to the extent
permitted under Section 7.1 or otherwise expressly permitted by the Required
Lenders in their Permitted Discretion and (b) obligations of the Seller or its
Subsidiaries incurred in the ordinary course of business and necessary or
desirable to the continued operation of the underlying properties, and any other
such liabilities or obligations not permitted to be assumed or otherwise
supported by Borrower and its Subsidiaries hereunder and shall be paid in full
or released on or before the consummation of such Acquisition;
(vi) All assets and properties acquired in connection with such
Acquisition shall be free and clear of any Liens other than those permitted
under Section 7.2 or as otherwise expressly permitted by the Required Lenders in
their Permitted Discretion;
(vii) (a) All FCC Licenses to be acquired pursuant to such
Acquisition shall be acquired by an Acquisition License Company, (b) such
Acquisition License Company shall enter into a license agreement with a related
Acquisition Operating Company with respect to such FCC Licenses, and (c) all
other acquired assets of the Seller shall be acquired by such related
Acquisition Operating Company;
(viii) (a) In the case of any Acquisition other than those listed
in clause (b) below, after the consummation of such Acquisition, Borrower and
its Subsidiaries shall be in compliance with the provisions of Section 7.22,
calculated on a pro forma basis and for the period of four (4) consecutive
fiscal quarters prior to the date of such Acquisition for which financial
statements are required to be provided (and have been so delivered) under
Section 6.3, (b) in the case of the Portland Acquisition, the
Richmond-Petersburg Acquisition, the Flint-Saginaw-Bay City Acquisition, the
Lexington Acquisition, and the Janesville-Madison Acquisition, after the
consummation of each such Acquisition, Borrower and its Subsidiaries shall be in
compliance with the provisions of Section 7.22, calculated on a pro forma basis
and for the period of four (4) consecutive fiscal quarters prior to the date of
such Acquisition for which financial statements are required to be provided (and
have been so delivered) under
-22-
Section 6.3, subject to the pro forma adjustments set forth in the projections
delivered by Borrower to Agent prior to the date hereof (the "Acquisition
Projections"), and (c) prior to the consummation of such Acquisition, Borrower
shall provide to Agent, in form and substance satisfactory to Agent, a
certificate of its chief financial officer certifying such compliance;
(ix) On or before the consummation of such Acquisition, (a) the
applicable Acquisition License Company and any applicable Acquisition Operating
Company shall execute and deliver to Agent a joinder to the Guarantor Security
Agreement, the Guaranty and the Intercompany Subordination Agreement and
Collateral Assignments of Key Leases and Collateral Assignments of Tower Leases,
if such Key Leases or Tower Leases are in existence at the time of such
Acquisition; and (b) Borrower shall execute and deliver to Agent a pledge
agreement or an amendment to the Pledge Agreement, in form and substance
satisfactory to Agent, pursuant to which Borrower shall pledge to Agent the
Stock of the applicable Acquisition License Company and any applicable
Acquisition Operating Company; and (c) Agent shall have received all financing
statements required by Agent;
(x) On or before the consummation of such Acquisition,
Borrower shall deliver to Agent, in form and substance satisfactory to Agent, a
certificate of its chief financial officer, certifying as to the matters set
forth above with respect to such Acquisition;
(xi) On or before the consummation of such Acquisition, Agent
shall have received written opinions of (a) counsel to Obligors and (b) special
FCC counsel to Obligors, in each case dated the date of such Acquisition,
addressed to the Agent and the Lenders and in form and substance satisfactory to
Agent; and
(xii) If reasonably requested in connection with any material
issues of state law raised in connection with such Acquisition, on or before the
consummation of such Acquisition, Agent shall have received the favorable
opinion of local counsel to the Obligors, dated as of the date of such
Acquisition, addressed to the Agent and the Lenders in form and substance
satisfactory to Agent.
The foregoing notwithstanding, each of the Portland Acquisition,
the Richmond-Petersburg Acquisition, the Flint-Saginaw-Bay City Acquisition, the
Lexington Acquisition, and the Janesville-Madison Acquisition shall constitute
Permitted Acquisitions hereunder if each such Acquisition complies with the
requirements contained in clauses (i) through (xii) above and the written
approval of the Required Lenders shall not be required to qualify any such
Acquisition as a "Permitted Acquisition" hereunder.
"Permitted Discretion" means a determination made in good faith
and in the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.
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"Permitted Disposition LMA" means an LMA entered into in
connection with, and in anticipation of, a Permitted Non-Mature Disposition so
long as no Default or Event of Default shall be continuing or shall result from
entering into such LMA.
"Permitted Dispositions" means (a) sales or other dispositions by
Borrower or its Subsidiaries of Equipment that is substantially worn, damaged,
or obsolete in the ordinary course of business, (b) the use or transfer of money
or Cash Equivalents by Borrower or its Subsidiaries in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents, (c)
Permitted Non-Mature Dispositions, (d) Permitted Mature Dispositions, and (e)
the sale of Equipment in connection with the consummation of a Permitted Sale
and Leaseback.
"Permitted Holder" means (a) ▇▇▇▇▇ ▇▇▇▇▇▇▇, his Family Members,
and his Family Trusts, (b) ▇▇▇▇▇▇▇ ▇▇▇▇▇, his Family Members, and his Family
Trusts, (c) ▇▇▇▇▇▇ ▇▇▇▇▇, his Family Members, and his Family Trusts, (d) ▇▇▇
▇▇▇▇▇▇▇▇▇, his Family Members, and his Family Trusts, (e) ▇▇▇▇ ▇▇▇▇▇▇▇, his
Family Members, and his Family Trusts, (f) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, his Family Members,
and his Family Trusts, or (g) investment funds managed by Alta Communications,
Inc., Seaport Capital Partners, BancBoston Ventures, Inc. or Trust Company of
the West.
"Permitted Intercompany Advances" means Intercompany Advances so
long as (a) no Triggering Event exists at the time of the making of any
Intercompany Advance or would exist after giving effect thereto, (b) after
giving effect to the making of such Intercompany Advance, the Person that is
acting as the lender or payor with respect thereto is Solvent, and (c) after
giving effect to the making of such Intercompany Advance, the Person that is
acting as the borrower or payee with respect thereto is Solvent.
"Permitted Investments" means (a) investments in Cash
Equivalents, (b) investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, (d) Permitted Intercompany Advances, (e) Permitted
Acquisitions, (f) non-cash consideration received by Borrower or its
Subsidiaries in connection with a Permitted Mature Disposition or Permitted
Non-Mature Disposition, (g) assets received by Borrower or its Subsidiaries in
connection with a Permitted Swap, (h) so long as no Default or Event of Default
shall have occurred or be continuing or shall result from any such investment
and so long as such investments are in properties or assets directly related to
the primary business of Borrower and its Subsidiaries, investments made by
Borrower or its Subsidiaries after the date hereof in an aggregate amount not to
exceed $1,000,000, and (i) investments existing as of the date hereof and
described on Schedule P-1.
"Permitted Liens" means (a) Liens held by Agent for the benefit
of Agent and the Lenders, (b) Liens for unpaid taxes that either (i) are not yet
delinquent, or (ii) do not constitute an Event of Default hereunder and are the
subject of Permitted Protests, (c) Liens set forth on Schedule P-2, (d) the
interests of lessors under operating leases, (e) purchase
-24-
money Liens or the interests of lessors under Capital Leases to the extent that
such Liens or interests secure Permitted Purchase Money Indebtedness and so long
as such Lien attaches only to the asset purchased or acquired and the proceeds
thereof, (f) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, or suppliers, incurred in
the ordinary course of business and not in connection with the borrowing of
money, and which Liens either (i) are for sums not yet delinquent, or (ii) are
the subject of Permitted Protests, (g) Liens arising from deposits made in
connection with obtaining worker's compensation or other unemployment insurance,
(h) Liens or deposits to secure performance of bids, tenders, or leases incurred
in the ordinary course of business and not in connection with the borrowing of
money, (i) Liens granted as security for surety or appeal bonds in connection
with obtaining such bonds in the ordinary course of business, (j) Liens
resulting from any judgment or award that is not an Event of Default hereunder,
(k) Liens existing on any asset prior to their acquisition in connection with a
Permitted Acquisition thereof by any Obligor and not created in contemplation of
such Permitted Acquisition; provided that the Required Lenders shall have
consented to such Liens in connection with such Permitted Acquisition; (l) Liens
on security deposits with respect to leases of office space and other Liens
arising by operation of law or under leases to secure landlords or lessors, or
under leases or rental agreements made in the ordinary course of business and
confined to the premises or property rented and the tangible property located
thereon, (m) Liens with respect to the Real Property Collateral that are
exceptions to the commitments for title insurance issued in connection with the
Mortgages, as accepted by Agent, (n) with respect to any Real Property that is
not part of the Real Property Collateral, easements, rights of way, and zoning
restrictions that do not materially interfere with or impair the use or
operation thereof, and (o) from and after the date of this Agreement until the
date of the making of the initial Advance (or other extension of credit)
hereunder, any Liens existing pursuant to the Existing Credit Agreement or any
related security agreements or mortgages.
"Permitted LMA" means (a) an LMA entered into in connection with,
and in anticipation of, a Permitted Acquisition; provided, however, that (i) no
Default or Event of Default shall be continuing or shall result from entering
into such LMA, and (ii) the aggregate amount payable under such LMA, when
aggregated with all other payments under all LMAs, does not exceed $500,000 in
any fiscal year; and (b) a Permitted Disposition LMA.
"Permitted Mature Disposition" means the disposition by Borrower
or any of its Subsidiaries of any Mature Station so long as such disposition has
been approved in writing by the Required Lenders in their sole and absolute
discretion.
"Permitted Non-Mature Disposition" means the disposition by
Borrower or any of its Subsidiaries of any Non-Mature Station so long as:
-25-
(a) No Default or Event of Default shall have occurred or be
continuing or shall result from the consummation of such disposition;
(b) Concurrent with the consummation of such disposition,
Borrower or its Subsidiaries receive payment in cash or Cash Equivalents of at
least 80% of the proceeds from such disposition (other than like-kind exchanges
under Section 1031 of the Internal Revenue Code);
(c) Agent shall have received satisfactory evidence prior to
the consummation of such disposition that the board of directors and, if
required by law, the holders of Stock of Borrower or its Subsidiaries have
approved such disposition;
(d) such disposition shall be consummated at fair value, in
good faith, and pursuant to an arm's length transaction;
(e) the Hold-Back Amount in connection with such disposition
is not greater than ten percent (10%) of the proceeds from such disposition;
(f) in the case of a disposition of the Dayton Station, the
Knoxville Station or the Fort ▇▇▇▇▇ Station, the gross consideration received by
Borrower or its Subsidiaries as a result of each such disposition is equal to or
greater than $20,000,000, and the Net Cash Proceeds received by Borrower and its
Subsidiaries as a result of each such disposition is equal to or greater than
$16,000,000;
(g) in the case of a disposition of the Green Bay Station or
the Decatur Station, the gross consideration received by Borrower or its
Subsidiaries as a result of each such disposition is equal to or greater than
$10,000,000, and the Net Cash Proceeds received by Borrower and its Subsidiaries
as a result of each such disposition is equal to or greater than $8,000,000; and
(h) in the case of a disposition of the Janesville-Madison
Station, the gross consideration received by Borrower and its Subsidiaries as a
result of such disposition is equal to or greater than 120% of the consideration
paid by Borrower and its Subsidiaries to acquire such Station (the "Purchase
Consideration") and the Net Cash Proceeds received by Borrower and its
Subsidiaries as a result of such disposition is equal to or greater than 96% of
the Purchase Consideration.
"Permitted Protest" means the right of Borrower or any of its
Subsidiaries, as applicable, to protest any Lien (other than any such Lien that
secures the Obligations), taxes (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental or other payment,
provided that (a) a reserve with respect to such obligation is established on
the Books in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by Borrower or any of its
Subsidiaries, as applicable, in good faith, and (c) Agent is satisfied that,
while any such protest is pending,
-26-
there will be no impairment of the enforceability, validity, or priority of any
of the Agent's Liens.
"Permitted Purchase Money Indebtedness" means, as of any date of
determination, Purchase Money Indebtedness in an aggregate principal amount
outstanding at any one time not in excess of $20,000,000.
"Permitted Restricted Payments" means:
(a) so long as no Triggering Event exists at the time of the
making of any Intercompany Advance or dividend or would exist after giving
effect thereto and so long as Borrower has Excess Liquidity of not less than
$15,000,000 after giving effect to the proposed Intercompany Advance or
dividend, Permitted Intercompany Advances or dividends by Borrower to Acme
Intermediate to enable it to make regularly scheduled payments of interest with
respect to the Intermediate Notes; and
(b) so long as no Triggering Event exists at the time of the
making of any Intercompany Advance or dividend or would exist after giving
effect thereto and so long as Borrower has Excess Liquidity of not less than
$15,000,000 after giving effect to the proposed Intercompany Advance or
dividend, Permitted Intercompany Advances or dividends by Borrower to the Parent
Companies to enable them to make payment of Overhead Expenses;
if and so long as the payees (i) use the proceeds of such dividends or Permitted
Intercompany Advances within 10 Business Days solely to satisfy such obligations
and (ii) do not use such dividends or Permitted Intercompany Advances to satisfy
the obligations of any other Person through the satisfaction of a guaranty or
otherwise.
"Permitted Sale and Leaseback" means a sale and leaseback
transaction that is in respect of Equipment that is first acquired by Borrower
or any of its Subsidiaries after the date hereof ("Sale and Leaseback"), so long
as:
(a) No Default or Event of Default shall have occurred or be
continuing or shall result from the consummation of such Sale and Leaseback; and
(b) such Sale and Leaseback shall be fully consummated within
45 days following the date of the initial acquisition of such Equipment by
Borrower and its Subsidiaries.
"Permitted Swap" means a transaction pursuant to which Borrower
or any of its Subsidiaries transfers a Station to another Person in
consideration of, among other things, the receipt from such Person of a
television broadcast station (a "Swap"), so long as:
-27-
(a) such Swap has been approved in writing by the Required
Lenders in their Permitted Discretion;
(b) No Default or Event of Default shall have occurred or be
continuing or shall result from the consummation of such Swap;
(c) After the consummation of such Swap, Borrower and its
Subsidiaries shall be in compliance with the provisions of Section 7.22, (a)
calculated on a pro forma basis and for the period of four (4) consecutive
fiscal quarters most recently ended prior to the date of such Swap for which
financial statements are required to be provided (and have been so delivered)
under Section 6.3 and prior to the consummation of such Swap, Borrower shall
provide to Agent, in form and substance satisfactory to Agent, a certificate of
its chief financial officer certifying such compliance.
(d) On or before the consummation of such Swap, (a) the
applicable Acquisition License Company and the applicable Acquisition Operating
Company shall execute and deliver to Agent a joinder to the Guarantor Security
Agreement, the Guaranty and the Intercompany Subordination Agreement and
Collateral Assignments of Key Leases and Collateral Assignments of Tower Leases;
and (b) Borrower shall execute and deliver to Agent a pledge agreement or an
amendment to the Pledge Agreement, in form and substance satisfactory to Agent,
pursuant to which Borrower shall pledge to Agent the Stock of the applicable
Acquisition License Company and the applicable Acquisition Operating Company;
and (c) Agent shall have received all financing statements required by Agent;
"Person" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"Personal Property Collateral" means all Collateral other than
Real Property.
"Pledge Agreement" means a pledge agreement, in form and
substance satisfactory to Agent, executed and delivered by Borrower, Acme
Holdings Missouri, and Acme Television Missouri to Agent, with respect to the
pledge of the Stock owned by Borrower, Acme Holdings Missouri and Acme
Television Missouri.
"Portland Station" means KWBP-32 Portland, Oregon.
"Portland Acquisition" means the Acquisition by an Acquisition
License Company of one or more broadcast licenses in Portland, Oregon in
consideration of the receipt by the applicable Seller of a Purchase Price not to
exceed $4,000,000.
"Projections" means Borrower's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
basis consistent with
-28-
Borrower's historical financial statements, together with appropriate supporting
details and a statement of underlying assumptions.
"Pro Rata Share" means:
(a) with respect to a Lender's obligation to make
Advances and receive payments of principal, interest, fees, costs, and expenses
with respect thereto, the percentage obtained by dividing (i) such Lender's
Revolver Commitment, by (ii) the aggregate Revolver Commitments of all Lenders,
(b) with respect to a Lender's obligation to
participate in Letters of Credit, to reimburse the Issuing Lender, and to
receive payments of fees with respect thereto, the percentage obtained by
dividing (i) such Lender's Revolver Commitment, by (ii) the aggregate Revolver
Commitments of all Lenders, and
(c) with respect to all other matters (including the
indemnification obligations arising under Section 16.7), the percentage obtained
by dividing (i) such Lender's Total Commitment, by (ii) the aggregate amount of
Total Commitments of all Lenders; provided, however, that, in each case, in the
event all Commitments have been terminated, Pro Rata Share shall be determined
according to the Commitments in effect immediately prior to such termination.
"Purchase Money Indebtedness" means Indebtedness (other than the
Obligations, but including Capitalized Lease Obligations), incurred at the time
of, or within 45 days after, the acquisition of any fixed assets for the purpose
of financing all or any part of the acquisition cost thereof.
"Purchase Price" means, with respect to any Acquisition, the
aggregate amount of all payments paid or payable to the Seller, directly or
indirectly, in connection with such Acquisition, whether at the time thereof or
after such Acquisition, under seller notes, earn-outs, escrowed funds, deferred
payment arrangements or other similar arrangements entered into in connection
with such disposition.
"Rate Hedging Obligations" means any and all obligations of
Borrower, whether direct or indirect and whether absolute or contingent, at any
time created, arising, evidenced or existing under a Hedge Agreement.
"Real Property" means any estates or interests in real property
now owned or hereafter acquired by one or more of the Obligors and interests
owned or hereafter acquired by one or more of the Obligors in the improvements
thereto.
"Real Property Collateral" means the parcel or parcels of Real
Property identified on Schedule R-1.
-29-
"Record" means information that is inscribed on a tangible medium
or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Remedial Action" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
"Report" has the meaning set forth in Section 16.17.
"Required Availability" means Excess Availability and
unrestricted cash and Cash Equivalents in an amount of not less than
$20,000,000.
"Required Lenders" means, at any time, Lenders whose Pro Rata
Shares aggregate 51% of the Total Commitments, or if the Commitments have been
terminated irrevocably, 51% of the Obligations.
"Reserve Percentage" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Revolver Commitment" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the sum
of (a) the then extant amount of outstanding Advances, plus (b) the then extant
amount of the Letter of Credit Usage.
"Richmond-Petersburg Acquisition" means the Acquisition by an
Acquisition License Company of one or more broadcast licenses in the
Richmond-Petersburg area of Virginia, in consideration of the receipt by the
applicable Seller of a Purchase Price not to exceed $8,200,000.
-30-
"Risk Participation Liability" means, as to each Letter of
Credit, all reimbursement obligations of Borrower to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrower, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"Salt Lake City Station" means ▇▇▇▇-▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇.
"SEC" means the United States Securities and Exchange Commission
and any successor thereto.
"Second Albuquerque Station" means KASY-50 Albuquerque, New
Mexico.
"Securities Account" means a "securities account" as that term is
defined in the Code.
"Seller" has the meaning set forth in the definition of
"Permitted Acquisition."
"Senior Notes" means the 10.875% Senior Discount Notes due 2004
offered by Borrower and the Inactive Subsidiary in the aggregate amount of
$175,000,000 pursuant to the Indenture.
"Settlement" has the meaning set forth in Section 2.3(f)(i).
"Settlement Date" has the meaning set forth in Section 2.3(f)(i).
"St. Louis Station" means KPLR-11 St. Louis, Missouri.
"Stations" means all of the television stations owned and managed
by one or more of the Obligors, where each such station consists of all of the
properties and operating rights constituting a complete, fully integrated system
for transmitting broadcast television signals from a transmitter licensed by the
FCC, together with any subsystem ancillary thereto, without payment of any fee
by the Persons receiving such signals.
"STAC Value" means the fair market value of a Station, calculated
as a start-up affiliated station that is sold in a compressed time frame, such
value being determined by a qualified appraisal company selected by Agent.
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
-31-
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
"Swap" has the meaning set forth in the definition of "Permitted
Swap".
"Swing Lender" means Foothill, any successor to Foothill as Agent
hereunder, or any other Lender that, at the request of Borrower and with the
consent of Agent agrees, in such Lender's sole discretion, to become the Swing
Lender hereunder.
"Swing Loan" has the meaning set forth in Section 2.3(d)(i).
"Syndication Reserve" means $10,000,000; the foregoing
notwithstanding, if from time to time after the date hereof, Foothill assigns
and delegates any portion of its Total Commitment in accordance with the
provisions hereof to a transferee that is not an Affiliate of Foothill (the
"Assigned Amount"), and Foothill designates such Assigned Amount as an amount
that will reduce the Syndication Reserve, then the Syndication Reserve shall be
reduced by the Assigned Amount until the Syndication Reserve is reduced to $0.
"Tangible Net Worth" means, as of any date of determination, the
result of (a) Borrower's total stockholder's equity, minus (b) the sum of (i)
all Intangible Assets of Borrower, (ii) all of Borrower's prepaid expenses, and
(iii) all amounts due to Borrower from Affiliates.
"Tax Distribution" has the meaning set forth in Section 7.11.
"Tax Withholding Amounts" means, with respect to any taxable year
of Borrower, (A) any and all amounts required under applicable law to have been
withheld or collected by Borrower from or in respect of payments made or deemed
made to any member of Borrower, which amounts were remitted by Borrower to any
federal, state, local, or foreign taxing authority during such taxable year, and
(B) any amounts withheld from payments made to Borrower in respect of which a
member of Borrower, or the beneficial owners of such member, receives a tax
benefit in the form of an actual reduction in the aggregate amount of such
member's, or such beneficial owners', tax liabilities for the taxable year in
which such amounts were withheld.
"Taxes" has the meaning set forth in Section 16.11(e).
"Total Debt" means, as of any date of determination, all
outstanding Funded Debt of the Borrower and its Subsidiaries, determined on a
consolidated basis, after eliminating intercompany items, in accordance with
GAAP.
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"Total Commitment" means, with respect to each Lender, its Total
Commitment, and, with respect to all Lenders, their Total Commitments, in each
case as such Dollar amounts are set forth beside such Lender's name under the
applicable heading on Schedule C-1 attached hereto or on the signature page of
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Tower Leases" has the meaning set forth in Section 5.17.
"Triggering Event" means the occurrence and continuation of (a)
an Event of Default under Section 8.1, or (b) an Event of Default occurring as a
result of any Obligor's failure to comply with the provisions of Sections 2.7,
6.8, or 7 applicable to such Obligor.
"Underlying Issuer" means a third Person which is the beneficiary
of an L/C Undertaking and which has issued a letter of credit at the request of
the Issuing Lender for the benefit of Borrower.
"Underlying Letter of Credit" means a letter of credit that has
been issued by an Underlying Issuer.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Bank, National Association, a
national banking association.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrower" is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower and its Subsidiaries on a
consolidated basis unless the context clearly requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" is not exclusive. The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Loan Document, as the case may be. Section, subsection, clause, schedule,
and exhibit references herein are to this Agreement unless otherwise specified.
Any reference in this Agreement or in the other Loan Documents to any agreement,
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instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to any Person shall be construed to include such Person's
successors and assigns. Any requirement of a writing contained herein or in the
other Loan Documents shall be satisfied by the transmission of a Record and any
Record transmitted shall constitute a representation and warranty as to the
accuracy and completeness of the information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Lender with a Revolver
Commitment agrees (severally, not jointly or jointly and severally) to make
advances ("Advances") to Borrower in an amount at any one time outstanding not
to exceed such Lender's Pro Rata Share of an amount equal to the lesser of (i)
the Maximum Revolver Amount less the Letter of Credit Usage, or (ii) the
Borrowing Base less the Letter of Credit Usage. For purposes of this Agreement,
"Borrowing Base," as of any date of determination, shall mean the result of:
(y) 25% times the Eligible STAC Value, minus
(z) the Syndication Reserve plus the Insurance
Proceeds Reserve plus the aggregate amount of reserves, if any,
established by Agent under Section 2.1(b).
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base, including
reserves with respect to (i) sums that Borrower is required to pay (such as
taxes, assessments, insurance premiums, or, in the case of leased assets, rents
or other amounts payable under such leases) and has failed to pay under any
Section of this Agreement or any other Loan Document, and (ii) amounts owing by
Borrower to any Person to the extent secured by a Lien on, or trust over, any of
the Collateral (other than any existing Permitted Lien set forth on Schedule
P-2), which Lien or trust, in the Permitted Discretion of Agent likely would
have a priority superior to the Agent's Liens (such as Liens or trusts in favor
of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for ad valorem, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral; provided, however, that in establishing
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reserves in its Permitted Discretion, Agent shall take into account the amount
of cash and Cash Equivalents then held by the Obligors that are subject to
Control Agreements in favor of Agent.
(c) The Lenders with Revolver Commitments shall have no
obligation to make additional Advances hereunder to the extent such additional
Advances would cause the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.
2.2 REDUCTION OF MAXIMUM REVOLVER AMOUNT.
(a) Permitted Disposition or Permitted Swap. Borrower
agrees that at least 2 Business Days prior to the closing of any Permitted
Disposition or Permitted Swap of a Station, Borrower shall deliver to Agent a
certificate executed by the chief financial officer of Borrower, in form and
substance satisfactory to Agent, setting forth an estimate of the Net Cash
Proceeds to be received by the Obligors as a result of such Permitted
Disposition or Permitted Swap. In the event such Permitted Disposition or
Permitted Swap is consummated, Agent may, in its sole discretion, require that
the Net Cash Proceeds be remitted to Agent on the first Business Day after the
date or dates of their receipt by Borrower to be applied in accordance with
Section 2.4(b) without penalty or premium (unless Borrower has elected to
terminate this Agreement in connection with such prepayment). At the time of the
consummation of any such Permitted Disposition or Permitted Swap, Borrower shall
elect either to (a) permanently reduce the Maximum Revolver Amount by the amount
of the Net Cash Proceeds from the subject Permitted Disposition or Permitted
Swap, such permanent reduction to occur on the date or dates on which Agent
receives any of the Net Cash Proceeds from such Permitted Disposition or
Permitted Swap and, on each such date, shall be in an amount equal to the
proceeds received by Agent on such date, or (b) to re-invest such Net Cash
Proceeds in assets (including Stock of another Person) used or useful in the
business similar or ancillary to the business of the Obligors as it exists as of
the date hereof so long as such re-investment would constitute a Permitted
Acquisition hereunder if it constitutes an Acquisition; provided, however, that
(i) such re-investment must occur within 179 days following the Obligor's
receipt of such Net Cash Proceeds, and, (ii) if, on such 179th day all or any
portion of the Net Cash Proceeds received has not been so re-invested, such
amount shall constitute a permanent reduction of the Maximum Revolver Amount as
of such date. If Borrower fails to make the foregoing election at the time of
the consummation of a Permitted Disposition or Permitted Swap, it shall be
deemed to have elected to permanently reduce the Maximum Revolver Amount in
accordance with clause (a) above.
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(b) Permitted Disposition LMA. Borrower agrees that at
least 2 Business Days prior to its execution of any Permitted Disposition LMA
(the "LMA Execution Date"), Borrower shall deliver to Agent a certificate
executed the chief financial officer of Borrower, in form and substance
satisfactory to Agent, setting forth an estimate of the Net Cash Proceeds to be
received by the Obligors as a result of entering into such Permitted Disposition
LMA. In the event such Permitted Disposition LMA is consummated, Borrower must
remit the Net Cash Proceeds to Agent on the first Business Day after the date or
dates of their receipt by Borrower to be applied in accordance with Section
2.4(b) without penalty or premium (unless Borrower has elected to terminate this
Agreement in connection with such prepayment). At the time of the consummation
of any such Permitted Disposition LMA, Borrower shall elect either to (a)
permanently reduce the Maximum Revolver Amount by the amount of the Net Cash
Proceeds from the subject Permitted Disposition LMA, such permanent reduction to
occur on the date or dates on which Agent receives any of the Net Cash Proceeds
from such Permitted Disposition LMA and, on each such date, shall be in an
amount equal to the proceeds received by Agent on such date, or (b) to re-invest
such Net Cash Proceeds in assets (including Stock of another Person) used or
useful in the business similar or ancillary to the business of the Obligors as
it exists as of the date hereof so long as such re-investment would constitute a
Permitted Acquisition hereunder if it constitutes an Acquisition; provided,
however, that (i) such re-investment must occur within 179 days following the
Obligor's receipt of such Net Cash Proceeds, and (ii) if, on such 179th day all
or any portion of the Net Cash Proceeds received has not been so re-invested,
such amount shall constitute a permanent reduction of the Maximum Revolver
Amount as of such date. If Borrower fails to make the foregoing election at the
time of the consummation of a Permitted Disposition LMA, it shall be deemed to
have elected to permanently reduce the Maximum Revolver Amount in accordance
with clause (a) above.
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be
made by an irrevocable written request by an Authorized Person delivered to
Agent (which notice must be received by Agent no later than 10:00 a.m.
(California time) on the Business Day prior to the date that is the requested
Funding Date in the case of a request for an Advance specifying (i) the amount
of such Borrowing, and (ii) the requested Funding Date, which shall be a
Business Day; provided, however, that in the case of a request for Swing Loan in
an amount of $3,000,000 or less, such notice will be timely received if it is
received by Agent no later than 10:00 a.m. (California time) on the Business Day
that is the requested Funding Date) specifying (i) the amount of such Borrowing,
and (ii) the requested Funding Date, which shall be a Business Day. At Agent's
election, in lieu of delivering the above-described written request, any
Authorized Person may give Agent telephonic notice of such request by the
required time, with such telephonic notice to be confirmed in writing within 24
hours of the giving of such notice.
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(b) AGENT'S ELECTION. Promptly after receipt of a
request for a Borrowing pursuant to Section 2.3(a), Agent shall elect, in its
discretion, (i) to have the terms of Section 2.3(c) apply to such requested
Borrowing, or (ii) if the Borrowing is for an Advance, to request Swing Lender
to make a Swing Loan pursuant to the terms of Section 2.3(d) in the amount of
the requested Borrowing; provided, however, that if Swing Lender declines in its
sole discretion to make a Swing Loan pursuant to Section 2.3(d), Agent shall
elect to have the terms of Section 2.3(c) apply to such requested Borrowing.
(c) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have the
terms of this Section 2.3(c) apply to a requested Borrowing as
described in Section 2.3(b), then promptly after receipt of a
request for a Borrowing pursuant to Section 2.3(a), Agent shall
notify the Lenders, not later than 1:00 p.m. (California time) on
the Business Day immediately preceding the Funding Date
applicable thereto, by telecopy, telephone, or other similar form
of transmission, of the requested Borrowing. Each Lender shall
make the amount of such Lender's Pro Rata Share of the requested
Borrowing available to Agent in immediately available funds, to
Agent's Account, not later than 10:00 a.m. (California time) on
the Funding Date applicable thereto. After Agent's receipt of the
proceeds of such Advances, upon satisfaction of the applicable
conditions precedent set forth in Section 3 hereof, Agent shall
make the proceeds thereof available to Borrower on the applicable
Funding Date by transferring immediately available funds equal to
such proceeds received by Agent to Borrower's Designated Account;
provided, however, that, subject to the provisions of Section
2.3(i), Agent shall not request any Lender to make, and no Lender
shall have the obligation to make, any Advance if Agent shall
have actual knowledge that (1) one or more of the applicable
conditions precedent set forth in Section 3 will not be satisfied
on the requested Funding Date for the applicable Borrowing unless
such condition has been waived, or (2) the requested Borrowing
would exceed the Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after
the Closing Date, at least 1 Business Day prior to the date of
such Borrowing, that such Lender will not make available as and
when required hereunder to Agent for the account of Borrower the
amount of that Lender's Pro Rata Share of the Borrowing, Agent
may assume that each Lender has made or will make such amount
available to Agent in immediately available funds on the Funding
Date and Agent may (but shall not be so required), in reliance
upon such assumption, make available to Borrower on such date a
corresponding amount. If and to the extent any Lender shall not
have made its full amount available to Agent in immediately
available funds and Agent in such circumstances has made
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available to Borrower such amount, that Lender shall on the
Business Day following such Funding Date make such amount
available to Agent, together with interest at the Defaulting
Lender Rate for each day during such period. A notice submitted
by Agent to any Lender with respect to amounts owing under this
subsection shall be conclusive, absent manifest error. If such
amount is so made available, such payment to Agent shall
constitute such Lender's Advance on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available
to Agent on the Business Day following the Funding Date, Agent
will notify Borrower of such failure to fund and, upon demand by
Agent, Borrower shall pay such amount to Agent for Agent's
account, together with interest thereon for each day elapsed
since the date of such Borrowing, at a rate per annum equal to
the interest rate applicable at the time to the Advances
composing such Borrowing. The failure of any Lender to make any
Advance on any Funding Date shall not relieve any other Lender of
any obligation hereunder to make an Advance on such Funding Date,
but no Lender shall be responsible for the failure of any other
Lender to make the Advance to be made by such other Lender on any
Funding Date.
(iii) Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to Agent for the
Defaulting Lender's benefit, and, in the absence of such transfer
to the Defaulting Lender, Agent shall transfer any such payments
to each other non-Defaulting Lender member of the Lender Group
ratably in accordance with their Commitments (but only to the
extent that such Defaulting Lender's Advance was funded by the
other members of the Lender Group) or, if so directed by Borrower
and if no Default or Event of Default had occurred and is
continuing (and to the extent such Defaulting Lender's Advance
was not funded by the Lender Group), retain same to be
re-advanced to Borrower as if such Defaulting Lender had made
Advances to Borrower. Subject to the foregoing, Agent may hold
and, in its Permitted Discretion, re-lend to Borrower for the
account of such Defaulting Lender the amount of all such payments
received and retained by it for the account of such Defaulting
Lender. Solely for the purposes of voting or consenting to
matters with respect to the Loan Documents, such Defaulting
Lender shall be deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero. This Section shall remain
effective with respect to such Lender until (x) the Obligations
under this Agreement shall have been declared or shall have
become immediately due and payable, (y) the non-Defaulting
Lenders, Agent, and Borrower shall have waived such Defaulting
Lender's default in writing, or (z) the Defaulting Lender makes
its Pro Rata Share of the applicable Advance and pays to Agent
all amounts owing by Defaulting Lender in respect thereof. The
operation of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, to relieve or
excuse the performance by such Defaulting Lender or any other
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Lender of its duties and obligations hereunder, or to relieve or
excuse the performance by Borrower of its duties and obligations
hereunder to Agent or to the Lenders other than such Defaulting
Lender. Any such failure to fund by any Defaulting Lender shall
constitute a material breach by such Defaulting Lender of this
Agreement and shall entitle Borrower at its option, upon written
notice to Agent, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute Lender to
be acceptable to Agent. In connection with the arrangement of
such a substitute Lender, the Defaulting Lender shall have no
right to refuse to be replaced hereunder, and agrees to execute
and deliver a completed form of Assignment and Acceptance
Agreement in favor of the substitute Lender (and agrees that it
shall be deemed to have executed and delivered such document if
it fails to do so) subject only to being repaid its share of the
outstanding Obligations (including an assumption of its Pro Rata
Share of the Risk Participation Liability) without any premium or
penalty of any kind whatsoever; provided further, however, that
any such assumption of the Commitment of such Defaulting Lender
shall not be deemed to constitute a waiver of any of the Lender
Groups' or Borrower's rights or remedies against any such
Defaulting Lender arising out of or in relation to such failure
to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent of
Swing Lender, as a Lender, to have the terms of this Section
2.3(d) apply to a requested Borrowing as described in Section
2.3(b), Swing Lender as a Lender shall make such Advance in the
amount of such Borrowing (any such Advance made solely by Swing
Lender as a Lender pursuant to this Section 2.3(d) being referred
to as a "Swing Loan" and such Advances being referred to
collectively as "Swing Loans") available to Borrower on the
Funding Date applicable thereto by transferring immediately
available funds to Borrower's Designated Account. Each Swing Loan
is an Advance hereunder and shall be subject to all the terms and
conditions applicable to other Advances, except that all payments
on any Swing Loan shall be payable to Swing Lender as a Lender
solely for its own account (and for the account of the holder of
any Participating Interest with respect to such Swing Loan).
Subject to the provisions of Section 2.3(i), Agent shall not
request Swing Lender as a Lender to make, and Swing Lender as a
Lender shall not make, any Swing Loan if Agent has actual
knowledge that (i) one or more of the applicable conditions
precedent set forth in Section 3 will not be satisfied on the
requested Funding Date for the applicable Borrowing unless such
condition has been waived, or (ii) the requested Borrowing would
exceed the Availability on such Funding Date. Swing Lender as a
Lender shall not otherwise be required to determine whether the
applicable conditions precedent set forth in Section 3 have been
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satisfied on the Funding Date applicable thereto prior to making,
in its sole discretion, any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's
Liens, shall constitute Advances and Obligations hereunder, and
shall bear interest at the rate applicable from time to time to
Advances that are Base Rate Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrower and the
Lenders, from time to time in Agent's sole discretion, (1) after
the occurrence and during the continuance of a Default or an
Event of Default, or (2) at any time that any of the other
applicable conditions precedent set forth in Section 3 have not
been satisfied, to make Advances to Borrower on behalf of the
Lenders that Agent, in its Permitted Discretion deems necessary
or desirable (A) to preserve or protect the Collateral, or any
portion thereof, (B) to enhance the likelihood of repayment of
the Obligations, or (C) to pay any other amount chargeable to
Borrower pursuant to the terms of this Agreement, including
Lender Group Expenses and the costs, fees, and expenses described
in Section 10 (any of the Advances described in this Section
2.3(e) shall be referred to as "Agent Advances"). Each Agent
Advance is an Advance hereunder and shall be subject to all the
terms and conditions applicable to other Advances, except that no
such Agent Advance shall be eligible for the LIBOR Option and all
payments thereon shall be payable to Agent solely for its own
account (and for the account of the holder of any Participating
Interest with respect to such Agent Advance).
(ii) The Agent Advances shall be repayable on demand and
secured by the Agent's Liens granted to Agent under the Loan
Documents, shall constitute Advances and Obligations hereunder,
and shall bear interest at the rate applicable from time to time
to Advances that are Base Rate Loans.
(f) SETTLEMENT. It is agreed that each Lender's funded
portion of the Advances is intended by the Lenders to equal, at all times, such
Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, Agent, Swing Lender, and the other Lenders agree (which
agreement shall not be for the benefit of or enforceable by Borrower) that in
order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Advances, the Swing Loans, and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) Agent shall request settlement ("Settlement") with
the Lenders on a weekly basis, or on a more frequent basis if so
determined by Agent, (1) on behalf of Swing Lender, with respect
to each outstanding Swing Loan, (2) for itself, with respect to
each Agent Advance, and (3) with respect to
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proceeds of Collections received, as to each by notifying the
Lenders by telecopy, telephone, or other similar form of
transmission, of such requested Settlement, no later than 2:00
p.m. (California time) on the Business Day immediately prior to
the date of such requested Settlement (the date of such requested
Settlement being the "Settlement Date"). Such notice of a
Settlement Date shall include a summary statement of the amount
of outstanding Advances, Swing Loans, and Agent Advances for the
period since the prior Settlement Date. Subject to the terms and
conditions contained herein (including Section 2.3(c)(iii)): (y)
if a Lender's balance of the Advances, Swing Loans, and Agent
Advances exceeds such Lender's Pro Rata Share of the Advances,
Swing Loans, and Agent Advances as of a Settlement Date, then
Agent shall, by no later than 12:00 p.m. (California time) on the
Settlement Date, transfer in immediately available funds to the
account of such Lender as such Lender may designate, an amount
such that each such Lender shall, upon receipt of such amount,
have as of the Settlement Date, its Pro Rata Share of the
Advances, Swing Loans, and Agent Advances, and (z) if a Lender's
balance of the Advances, Swing Loans, and Agent Advances is less
than such Lender's Pro Rata Share of the Advances, Swing Loans,
and Agent Advances as of a Settlement Date, such Lender shall no
later than 12:00 p.m. (California time) on the Settlement Date
transfer in immediately available funds to the Agent's Account,
an amount such that each such Lender shall, upon transfer of such
amount, have as of the Settlement Date, its Pro Rata Share of the
Advances, Swing Loans, and Agent Advances. Such amounts made
available to Agent under clause (z) of the immediately preceding
sentence shall be applied against the amounts of the applicable
Swing Loan or Agent Advance and, together with the portion of
such Swing Loan or Agent Advance representing Swing Lender's Pro
Rata Share thereof, shall constitute Advances of such Lenders. If
any such amount is not made available to Agent by any Lender on
the Settlement Date applicable thereto to the extent required by
the terms hereof, Agent shall be entitled to recover for its
account such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the
Advances, Swing Loans, and Agent Advances is less than, equal to,
or greater than such Lender's Pro Rata Share of the Advances,
Swing Loans, and Agent Advances as of a Settlement Date, Agent
shall, as part of the relevant Settlement, apply to such balance
the portion of payments actually received in good funds by Agent
with respect to principal, interest, fees payable by Borrower and
allocable to the Lenders hereunder, and proceeds of Collateral.
To the extent that a net amount is owed to any such Lender after
such application, such net amount shall be distributed by Agent
to that Lender as part of such next Settlement.
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(iii) Between Settlement Dates, Agent, to the extent no
Agent Advances or Swing Loans are outstanding, may pay over to
Swing Lender any payments received by Agent, that in accordance
with the terms of this Agreement would be applied to the
reduction of the Advances, for application to Swing Lender's Pro
Rata Share of the Advances. If, as of any Settlement Date,
proceeds of Collections received since the then immediately
preceding Settlement Date have been applied to Swing Lender's Pro
Rata Share of the Advances other than to Swing Loans, as provided
for in the previous sentence, Swing Lender shall pay to Agent for
the accounts of the Lenders, and Agent shall pay to the Lenders,
to be applied to the outstanding Advances of such Lenders, an
amount such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the
Advances. During the period between Settlement Dates, Swing
Lender with respect to Swing Loans, Agent with respect to Agent
Advances, and each Lender (subject to the effect of letter
agreements between Agent and individual Lenders) with respect to
the Advances other than Swing Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable
under this Agreement on the daily amount of funds employed by
Swing Lender, Agent, or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the
principal amount of the Advances owing to each Lender, including the Swing Loans
owing to Swing Lender, and Agent Advances owing to Agent, and the interests
therein of each Lender, from time to time. In addition, each Lender is
authorized, at such Lender's option, to note the date and amount of each payment
or prepayment of principal of such Lender's Advances in its books and records,
including computer records, such books and records constituting conclusive
evidence for the Lender Group, absent manifest error, of the accuracy of the
information contained therein.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other
than Swing Loans and Agent Advances) shall be made by the Lenders
contemporaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Advance (or other extension of credit)
hereunder, nor shall any Commitment of any Lender be increased or decreased as a
result of any failure by any other Lender to perform its obligations hereunder,
and (ii) no failure by any Lender to perform its obligations hereunder shall
excuse any other Lender from its obligations hereunder.
(i) OPTIONAL OVERADVANCES. Any contrary provision of
this Agreement notwithstanding, the Lenders hereby authorize Agent or Swing
Lender, as applicable, and Agent or Swing Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make Advances (including
Swing Loans) to Borrower notwithstanding that an Overadvance exists or thereby
would be created, so long as
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(i) after giving effect to such Advances (including a Swing Loan), the
outstanding Revolver Usage does not exceed the Borrowing Base by more than
$2,000,000 (ii) after giving effect to such Advances (including a Swing Loan),
the outstanding Revolver Usage (except for and excluding amounts charged to the
Loan Account for interest, fees, or Lender Group Expenses) does not exceed the
Maximum Revolver Amount, and (iii) at the time of the making of any such Advance
(including any Swing Loan), Agent does not believe, in good faith, that the
Overadvance created by such Advance will be outstanding for more than 90 days.
The foregoing provisions are for the exclusive benefit of Agent, Swing Lender,
and the Lenders and are not intended to benefit Borrower in any way. The
Advances and Swing Loans, as applicable, that are made pursuant to this Section
2.3(i) shall be subject to the same terms and conditions as any other Advance or
Swing Loan, as applicable, except that they shall not be eligible for the LIBOR
Option and the rate of interest applicable thereto shall be the rate applicable
to Advances that are Base Rate Loans under Section 2.6(c) hereof without regard
to the presence or absence of a Default or Event of Default.
(i) In the event Agent obtains actual knowledge that
the Revolver Usage exceeds the amounts permitted by the preceding
paragraph, regardless of the amount of, or reason for, such
excess, Agent shall notify Lenders as soon as practicable (and
prior to making any (or any additional) intentional Overadvances
(except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) unless Agent determines
that prior notice would result in imminent harm to the Collateral
or its value), and the Lenders with Revolver Commitments
thereupon shall, together with Agent, jointly determine the terms
of arrangements that shall be implemented with Borrower intended
to reduce, within a reasonable time, the outstanding principal
amount of the Advances to Borrower to an amount permitted by the
preceding paragraph. In the event Agent or any Lender disagrees
over the terms of reduction or repayment of any Overadvance, the
terms of reduction or repayment thereof shall be implemented
according to the determination of the Required Lenders.
(ii) Each Lender with a Revolver Commitment shall be
obligated to settle with Agent as provided in Section 2.3(f) for
the amount of such Lender's Pro Rata Share of any unintentional
Overadvances by Agent reported to such Lender, any intentional
Overadvances made as permitted under this Section 2.3(i), and any
Overadvances resulting from the charging to the Loan Account of
interest, fees, or Lender Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWER.
(i) Except as otherwise expressly provided
herein, all payments by Borrower shall be made to Agent's Account
for the account of
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the Lender Group and shall be made in immediately available
funds, no later than 11:00 a.m. (California time) on the date
specified herein. Any payment received by Agent later than 11:00
a.m. (California time) shall be deemed to have been received on
the following Business Day and any applicable interest or fee
shall continue to accrue until such following Business Day.
(ii) Unless Agent receives notice from Borrower
prior to the date on which any payment is due to the Lenders that
Borrower will not make such payment in full as and when required,
Agent may assume that Borrower has made (or will make) such
payment in full to Agent on such date in immediately available
funds and Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date
an amount equal to the amount then due such Lender. If and to the
extent Borrower does not make such payment in full to Agent on
the date when due, each Lender severally shall repay to Agent on
demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day from
the date such amount is distributed to such Lender until the date
repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS.
(i) Except as otherwise provided with respect to
Defaulting Lenders and except as otherwise provided in the Loan
Documents (including letter agreements between Agent and
individual Lenders), aggregate principal and interest payments
shall be apportioned ratably among the Lenders (according to the
unpaid principal balance of the Obligations to which such
payments relate held by each Lender) and payments of fees and
expenses (other than fees or expenses that are for Agent's
separate account, after giving effect to any letter agreements
between Agent and individual Lenders) shall be apportioned
ratably among the Lenders having a Pro Rata Share of the type of
Commitment or Obligation to which a particular fee relates. All
payments shall be remitted to Agent and all such payments (other
than payments received while no Event of Default has occurred and
is continuing and which relate to the payment of principal or
interest of specific Obligations or which relate to the payment
of specific fees), and all proceeds of Accounts or other
Collateral received by Agent, shall be applied as follows:
(A) first, to pay any Lender Group Expenses then
due to Agent under the Loan Documents, until paid in full,
(B) second, to pay any Lender Group Expenses then
due to the Lenders under the Loan Documents, on a ratable
basis, until paid in full,
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(C) third, to pay any fees then due to Agent (for
its separate account, after giving effect to any letter
agreements between Agent and individual Lenders) under the
Loan Documents, until paid in full,
(D) fourth, to pay any fees then due to any or all
of the Lenders (after giving effect to any letter
agreements between Agent and individual Lenders), under
the Loan Documents, on a ratable basis, until paid in
full,
(E) fifth, to pay interest due in respect of all
Agent Advances, until paid in full,
(F) sixth, ratably to pay interest due in respect
of the Advances (other than Agent Advances) and the Swing
Loans, until paid in full,
(G) seventh, to pay the principal of all Agent
Advances until paid in full,
(H) eighth, to pay the principal of all Swing Loans
until paid in full,
(I) ninth, to pay the principal of all Advances
until paid in full,
(J) tenth, if an Event of Default has occurred and
is continuing, to Agent, to be held by Agent, for the
ratable benefit of Issuing Lender and those Lenders having
a Revolver Commitment, as cash collateral in an amount up
to 105% of the then extant Letter of Credit Usage until
paid in full,
(K) eleventh, to pay any other Obligations until
paid in full, and
(L) twelfth, to Borrower (to be wired to the
Designated Account) or such other Person entitled thereto
under applicable law.
(ii) Agent promptly shall distribute to each Lender,
pursuant to the applicable wire instructions received from each
Lender in writing, such funds as it may be entitled to receive,
subject to a Settlement delay as provided in Section 2.3(h).
(iii) In each instance, so long as no Event of Default
has occurred and is continuing, Section 2.4(b) shall not be
deemed to apply to any payment by Borrower specified by Borrower
to be for the payment of specific Obligations then due and
payable (or prepayable) under any provision of this Agreement.
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(iv) For purposes of the foregoing, "paid in full" means
payment of all amounts owing under the Loan Documents according
to the terms thereof, including loan fees, service fees,
professional fees, interest (and specifically including interest
accrued after the commencement of any Insolvency Proceeding),
default interest, interest on interest, and expense
reimbursements, whether or not the same would be or is allowed or
disallowed in whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this Section 2.4 and other provisions contained in
any other Loan Document, it is the intention of the parties
hereto that such priority provisions in such documents shall be
read together and construed, to the fullest extent possible, to
be in concert with each other. In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the
terms and provisions of this Section 2.4 shall control and
govern.
2.5 OVERADVANCES. Subject to Section 2.3(i), if, at any time or for
any reason, the amount of Obligations owed by Borrower to the Lender Group
pursuant to Sections 2.1 and 2.12 is greater than either the Dollar or
percentage limitations set forth in Sections 2.1 or 2.12, (an "Overadvance"),
Borrower immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance with
the priorities set forth in Section 2.4(b). In addition, Borrower hereby
promises to pay the Obligations (including principal, interest, fees, costs, and
expenses) in Dollars in full to the Lender Group as and when due and payable
under the terms of this Agreement and the other Loan Documents.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c)
below, all Obligations (except for undrawn Letters of Credit) that have been
charged to the Loan Account pursuant to the terms hereof shall bear interest on
the Daily Balance thereof as follows (i) if the relevant Obligation is an
Advance that is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR Rate
plus the LIBOR Rate Margin, and (ii) otherwise, at a per annum rate equal to the
Base Rate plus the Base Rate Margin.
(b) LETTER OF CREDIT FEE. Borrower shall pay Agent (for
the ratable benefit of the Lenders with a Revolver Commitment, subject to any
letter agreement between Agent and individual Lenders), a Letter of Credit fee
(in addition to the charges, commissions, fees, and costs set forth in Section
2.12(e)) which shall accrue at a rate equal to 4.50% per annum times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
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(c) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn Letters
of Credit) that have been charged to the Loan Account
pursuant to the terms hereof shall bear interest on the
Daily Balance thereof at a per annum rate equal to 3
percentage points above the per annum rate otherwise
applicable hereunder, and
(ii) the Letter of Credit fee provided for above
shall be increased to 3 percentage points above the per
annum rate otherwise applicable hereunder.
(d) PAYMENT. Interest, Letter of Credit fees, and all
other fees payable hereunder shall be due and payable, in arrears, on the first
day of each month (except for interest on LIBOR Rate Loans which interest shall
be due and payable on (i) the last day of the applicable Interest Period, and
(ii) in the case of an Interest Period of 6 months, on the date that is 3 months
after the commencement of the applicable Interest Period) at any time that
Obligations or Commitments are outstanding. Agent shall, from time to time
without prior notice to Borrower, charge such interest and fees, all Lender
Group Expenses (as and when incurred), the charges, commissions, fees, and costs
provided for in Section 2.12(e) (as and when accrued or incurred), the fees and
costs provided for in Section 2.11 (as and when accrued or incurred), and all
other payments as and when due and payable under any Loan Document to Borrower's
Loan Account, which amounts thereafter shall constitute Advances hereunder and
shall accrue interest at the rate then applicable to Advances hereunder;
provided, however, that Agent will endeavor in good faith to notify Borrower
promptly after it charges any Lender Group Expenses to Borrower's Loan Account,
but the failure to provide such notification, unless willful, shall not result
in any liability of Agent. Any interest not paid when due shall be compounded by
being charged to Borrower's Loan Account and shall thereafter constitute
Advances hereunder and shall accrue interest at the rate then applicable to
Advances that are Base Rate Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under
the Loan Documents shall be computed on the basis of a 360 day year for the
actual number of days elapsed. In the event the Base Rate is changed from time
to time hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In
no event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrower and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; provided, however, that,
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anything contained herein to the contrary notwithstanding, if said rate or rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto, as of the date of this Agreement, Borrower is and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrower in excess of such legal maximum, whenever received, shall
be applied to reduce the principal balance of the Obligations to the extent of
such excess.
2.7 CASH MANAGEMENT.
(a) Borrower shall (i) prior to the Closing Date,
establish and maintain cash management services of a type and on terms
satisfactory to Agent at the bank set forth on Schedule 2.7(a) (the "Cash
Management Bank"), and shall take reasonable steps to ensure that all of its
Account Debtors and each of the other Obligors forward payment of the amounts
owed by them directly to such Cash Management Bank, (ii) from and after the
Closing Date, continue its historical practice of requiring each of its
Subsidiaries to remit to Borrower all cash and Cash Equivalents of such
Subsidiaries when the amount of cash and Cash Equivalents of each such
Subsidiary, in the aggregate for each such Subsidiary equals $50,000 (other than
amounts expected to be expended within the next 5 Business Days) and arrange to
have such excess amounts remitted directly to the Cash Management Bank, and
(iii) from and after the Closing Date, deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all Collections (including those sent directly by Account
Debtors to the Cash Management Bank and excluding those resulting from a
Permitted Disposition or Permitted Swap, which Collections shall be remitted to
Agent in accordance with Section 2.2) into a bank account (a "Cash Management
Account") at the Cash Management Bank.
(b) The Cash Management Bank shall establish and
maintain a Cash Management Agreement with Agent and Borrower, in form and
substance acceptable to Agent. Each such Cash Management Agreement shall
provide, among other things, that (i) all items of payment deposited in such
Cash Management Account and proceeds thereof are held by such Cash Management
Bank as agent or bailee-in-possession for Agent, (ii) the Cash Management Bank
has no rights of setoff or recoupment or any other claim against the applicable
Cash Management Account other than for payment of its service fees and other
charges directly related to the administration of such Cash Management Account
and for returned checks or other items of payment, and (iii) upon receipt of
written notice from Agent to the Cash Management Bank, it immediately will
forward by daily sweep all amounts in the applicable Cash Management Account to
the Agent's Account. Anything contained herein into the contrary
notwithstanding, Agent agrees that it shall not provide the above-described
notice to the Cash Management Bank unless and until a Triggering Event has
occurred and is continuing at a time when Advances or Letters of Credit are
outstanding. Once a Triggering Event has occurred and is continuing at a time
when Advances or Letters of Credit are outstanding, Agent shall be free to
exercise its right to issue such notice and the
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subsequent elimination of the subject Triggering Event shall not eliminate the
effectiveness of such notice.
(c) So long as no Default or Event of Default has
occurred and is continuing, Borrower may amend Schedule 2.7(a) to add or replace
a Cash Management Bank or Cash Management Account; provided, however, that (i)
such prospective Cash Management Bank shall be satisfactory to Agent and Agent
shall have consented in writing in advance to the opening of such Cash
Management Account with the prospective Cash Management Bank, and (ii) prior to
the time of the opening of such Cash Management Account, Borrower and such
prospective Cash Management Bank shall have executed and delivered to Agent a
Cash Management Agreement. Borrower shall close any of its Cash Management
Accounts (and establish replacement cash management accounts in accordance with
the foregoing sentence) promptly and in any event within 30 days of notice from
Agent that the creditworthiness of any Cash Management Bank is no longer
acceptable in Agent's reasonable judgment, or as promptly as practicable and in
any event within 60 days of notice from Agent that the operating performance,
funds transfer, or availability procedures or performance of the Cash Management
Bank with respect to Cash Management Accounts or Agent's liability under any
Cash Management Agreement with such Cash Management Bank is no longer acceptable
in Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash
collateral accounts, with all cash, checks and similar items of payment in such
accounts securing payment of the Obligations, and in which Borrower is hereby
deemed to have granted a Lien to Agent.
2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent
(whether from transfers to Agent by the Cash Management Banks pursuant to the
Cash Management Agreements or otherwise) shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrower shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances, and
Issuing Lender is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person, or without instructions if pursuant to
Section 2.6(d). Borrower agrees to establish and
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maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Advances requested by Borrower and made by
Agent or the Lenders hereunder. Unless otherwise agreed by Agent and Borrower,
any Advance, Agent Advance, or Swing Loan requested by Borrower and made by
Agent or the Lenders hereunder shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrower (the "Loan
Account") on which Borrower will be charged with all Advances (including Agent
Advances and Swing Loans) made by Agent, Swing Lender, or the Lenders to
Borrower or for Borrower's account, the Letters of Credit issued by Issuing
Lender for Borrower's account, and with all other payment Obligations hereunder
or under the other Loan Documents, including, accrued interest, fees and
expenses, and Lender Group Expenses. In accordance with Section 2.8, the Loan
Account will be credited with all payments received by Agent from Borrower or
for Borrower's account, including all amounts received in the Agent's Account
from any Cash Management Bank. Agent shall render statements regarding the Loan
Account to Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrower and the Lender Group
unless, within 60 days after receipt thereof by Borrower, Borrower shall deliver
to Agent written objection thereto describing the error or errors contained in
any such statements.
2.11 FEES. Borrower shall pay to Agent the following fees and charges,
which fees and charges shall be non-refundable when paid (irrespective of
whether this Agreement is terminated thereafter) and shall be apportioned among
the Lenders in accordance with the terms of letter agreements between Agent and
individual Lenders:
(a) UNUSED LINE FEE. On the first day of each month
during the term of this Agreement, an unused line fee in an amount equal to
0.50% per annum times the result of (a) (i) the Maximum Revolver Amount minus
(ii) the Syndication Reserve, less (b) the sum of (i) the average Daily Balance
of Advances that were outstanding during the immediately preceding month, plus
(ii) the average Daily Balance of the Letter of Credit Usage during the
immediately preceding month,
(b) FEE LETTER FEES. As and when due and payable under
the terms of the Fee Letter, Borrower shall pay to Agent the fees set forth in
the Fee Letter, and
(c) AUDIT, APPRAISAL, AND VALUATION CHARGES. For the
separate account of Agent, audit, appraisal, and valuation fees and charges as
follows (i) a fee of $850 per day, per auditor, plus out-of-pocket expenses for
each financial audit of Borrower performed by personnel employed by Agent, (ii)
a fee of $1,500 per day per appraiser, plus out-of-pocket expenses, for each
appraisal of the Collateral performed by personnel employed by Agent, and (iii)
the actual charges paid or incurred by Agent if it elects to
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employ the services of one or more third Persons to perform financial audits of
Borrower, to appraise the Collateral, or any portion thereof, or to assess
Borrower's business valuation. The foregoing notwithstanding, so long as no
Event of Default is continuing, Borrower shall not be required to pay the fees
and charges of more than (a) 3 audits per fiscal year, and (b) 1 appraisal per
fiscal year.
2.12 LETTERS OF CREDIT
(a) Subject to the terms and conditions of this
Agreement, the Issuing Lender agrees to issue letters of credit for the account
of Borrower (each, an "L/C") or to purchase participations or execute
indemnities or reimbursement obligations (each such undertaking, an "L/C
Undertaking") with respect to letters of credit issued by an Underlying Issuer
(as of the Closing Date the prospective Underlying Issuer shall be ▇▇▇▇▇ Fargo)
for the account of Borrower. To request the issuance of an L/C or an L/C
Undertaking (or the amendment, renewal, or extension of an outstanding L/C or
L/C Undertaking), Borrower shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Lender) to the Issuing Lender and Agent (reasonably in advance of the
requested date of issuance, amendment, renewal, or extension) a notice
requesting the issuance of an L/C or L/C Undertaking, or identifying the L/C or
L/C Undertaking to be amended, renewed, or extended, the date of issuance,
amendment, renewal, or extension, the date on which such L/C or L/C Undertaking
is to expire, the amount of such L/C or L/C Undertaking, the name and address of
the beneficiary thereof (or the beneficiary of the Underlying Letter of Credit,
as applicable), and such other information as shall be necessary to prepare,
amend, renew, or extend such L/C or L/C Undertaking. If requested by the Issuing
Lender, Borrower also shall be an applicant under the application with respect
to any Underlying Letter of Credit that is to be the subject of an L/C
Undertaking. The Issuing Lender shall have no obligation to issue a Letter of
Credit if any of the following would result after giving effect to the requested
Letter of Credit:
(i) the Letter of Credit Usage would exceed the
Borrowing Base less the amount of outstanding Advances, or
(ii) the Letter of Credit Usage would exceed $4,000,000,
or
(iii) the Letter of Credit Usage would exceed the Maximum
Revolver Amount less the then extant amount of outstanding
Advances.
Borrower and the Lender Group acknowledge and agree that certain
Underlying Letters of Credit may be issued to support letters of credit that
already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrower immediately shall reimburse such L/C Disbursement to Issuing
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Lender by paying to Agent an amount equal to such L/C Disbursement not later
than 11:00 a.m., California time, on the date that such L/C Disbursement is
made, if Borrower shall have received written or telephonic notice of such L/C
Disbursement prior to 10:00 a.m., California time, on such date, or, if such
notice has not been received by Borrower prior to such time on such date, then
not later than 11:00 a.m., California time, on the following Business Day and,
in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Advance hereunder and, thereafter, shall
bear interest at the rate then applicable to Advances that are Base Rate Loans
under Section 2.6 unless and until converted to a LIBOR Rate Loan in accordance
with the terms hereof. To the extent an L/C Disbursement is deemed to be an
Advance hereunder, Borrower's obligation to reimburse such L/C Disbursement
shall be discharged and replaced by the resulting Advance. Promptly following
receipt by Agent of any payment from Borrower pursuant to this paragraph, Agent
shall distribute such payment to the Issuing Lender or, to the extent that
Lenders have made payments pursuant to Section 2.12(c) to reimburse the Issuing
Lender, then to such Lenders and the Issuing Lender as their interest may
appear.
(b) Promptly following receipt of a notice of L/C
Disbursement pursuant to Section 2.12(a), each Lender with a Revolver Commitment
agrees to fund its Pro Rata Share of any Advance deemed made pursuant to the
foregoing subsection on the same terms and conditions as if Borrower had
requested such Advance and Agent shall promptly pay to Issuing Lender the
amounts so received by it from the Lenders. By the issuance of a Letter of
Credit (or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Lender or the Lenders with
Revolver Commitment, the Issuing Lender shall be deemed to have granted to each
Lender with a Revolver Commitment, and each Lender with a Revolver Commitment
shall be deemed to have purchased, a participation in each Letter of Credit, in
an amount equal to its Pro Rata Share of the Risk Participation Liability of
such Letter of Credit, and each such Lender agrees to pay to Agent, for the
account of the Issuing Lender, such Lender's Pro Rata Share of any payments made
by the Issuing Lender under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Lender with a Revolver Commitment hereby
absolutely and unconditionally agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of each L/C Disbursement made by
the Issuing Lender and not reimbursed by Borrower on the date due as provided in
clause (a) of this Section, or of any reimbursement payment required to be
refunded to Borrower for any reason. Each Lender with a Revolver Commitment
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share pursuant
to this Section 2.12(b) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in Section
3 hereof. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, Agent (for the account of the
Issuing Lender) shall be entitled to recover such
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amount on demand from such Lender together with interest thereon at the
Defaulting Lender Rate until paid in full.
(c) Borrower hereby agrees to indemnify, save, defend,
and hold the Lender Group harmless from any loss, cost, expense, or liability,
and reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit; provided, however, that Borrower shall not
be obligated hereunder to indemnify for any loss, cost, expense, or liability
that is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Borrower agrees to be bound by
the Underlying Issuer's regulations and interpretations of any Underlying Letter
of Credit or by Issuing Lender's interpretations of any L/C issued by Issuing
Lender to or for Borrower's account, even though this interpretation may be
different from Borrower's own, and Borrower understands and agrees that the
Lender Group shall not be liable for any error, negligence, or mistake, whether
of omission or commission, in following Borrower's instructions or those
contained in the Letter of Credit or any modifications, amendments, or
supplements thereto. Borrower understands that the L/C Undertakings may require
Issuing Lender to indemnify the Underlying Issuer for certain costs or
liabilities arising out of claims by Borrower against such Underlying Issuer.
Borrower hereby agrees to indemnify, save, defend, and hold the Lender Group
harmless with respect to any loss, cost, expense (including reasonable attorneys
fees), or liability incurred by the Lender Group under any L/C Undertaking as a
result of the Lender Group's indemnification of any Underlying Issuer; provided,
however, that Borrower shall not be obligated hereunder to indemnify for any
loss, cost, expense, or liability that is caused by the gross negligence or
willful misconduct of the Issuing Lender or any other member of the Lender
Group.
(d) Borrower hereby authorizes and directs any
Underlying Issuer to deliver to the Issuing Lender all instruments, documents,
and other writings and property received by such Underlying Issuer pursuant to
such Underlying Letter of Credit and to accept and rely upon the Issuing
Lender's instructions with respect to all matters arising in connection with
such Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and costs
incurred by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrower to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change in any applicable
law, treaty, rule, or regulation or any change in the interpretation or
application thereof by any Governmental
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Authority, or (ii) compliance by the Underlying Issuer or the Lender Group with
any direction, request, or requirement (irrespective of whether having the force
of law) of any Governmental Authority or monetary authority including,
Regulation D of the Federal Reserve Board as from time to time in effect (and
any successor thereto):
(i) any reserve, deposit, or similar requirement is or
shall be imposed or modified in respect of any Letter of Credit
issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer or
the Lender Group any other condition regarding any Underlying
Letter of Credit or any Letter of Credit issued pursuant hereto,
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Borrower, and Borrower shall pay on demand such amounts as Agent may
specify to be necessary to compensate the Lender Group for such additional cost
or reduced receipt, together with interest on such amount from the date of such
demand until payment in full thereof at the rate then applicable to Base Rate
Loans hereunder. The determination by Agent of any amount due pursuant to this
Section, as set forth in a certificate setting forth the calculation thereof in
reasonable detail, shall, in the absence of manifest or demonstrable error, be
final and conclusive and binding on all of the parties hereto.
2.13 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of
having interest charged at the rate based upon the Base Rate, Borrower shall
have the option (the "LIBOR Option") to have interest on all or a portion of the
Advances be charged at a rate of interest based upon the LIBOR Rate. Interest on
LIBOR Rate Loans shall be payable on the earliest of (i) the last day of the
Interest Period applicable thereto, (ii) the occurrence of an Event of Default
in consequence of which the Required Lenders or Agent on behalf thereof elect to
accelerate the maturity of all or any portion of the Obligations, or (iii)
termination of this Agreement pursuant to the terms hereof. On the last day of
each applicable Interest Period, unless Borrower properly has exercised the
LIBOR Option with respect thereto, the interest rate applicable to such LIBOR
Rate Loan automatically shall convert to the rate of interest then applicable to
Base Rate Loans of the same type hereunder. At any time that an Event of Default
has occurred and is continuing, Borrower no longer shall have the option to
request that Advances bear interest at the LIBOR Rate and Agent shall have the
right to convert the interest rate on all outstanding LIBOR Rate Loans to the
rate then applicable to Base Rate Loans hereunder.
(b) LIBOR Election.
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(i) Borrower may, at any time and from time to time, so
long as no Event of Default is continuing, elect to exercise the
LIBOR Option by notifying Agent prior to 11:00 a.m. (California
time) at least 3 Business Days prior to the commencement of the
proposed Interest Period (the "LIBOR Deadline"). Notice of
Borrower's election of the LIBOR Option for a portion of the
Advances and an Interest Period pursuant to this Section shall be
made by delivery to Agent of a LIBOR Notice received by Agent
before the LIBOR Deadline, or by telephonic notice received by
Agent before the LIBOR Deadline (to be confirmed by delivery to
Agent of a LIBOR Notice received by Agent prior to 5:00 p.m.
(California time) on the same day. Promptly upon its receipt of
each such LIBOR Notice, Agent shall provide a copy thereof to
each of the Lenders having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and binding
on Borrower. In connection with each LIBOR Rate Loan, Borrower
shall indemnify, defend, and hold Agent and the Lenders harmless
against any loss, cost, or expense incurred by Agent or any
Lender as a result of (a) the payment of any principal of any
LIBOR Rate Loan other than on the last day of an Interest Period
applicable thereto (including as a result of an Event of
Default), (b) the conversion of any LIBOR Rate Loan other than on
the last day of the Interest Period applicable thereto, or (c)
the failure to borrow, convert, continue or prepay any LIBOR Rate
Loan on the date specified in any LIBOR Notice delivered pursuant
hereto (such losses, costs, and expenses, collectively, "Funding
Losses"). Funding Losses shall, with respect to Agent or any
Lender, be deemed to equal the amount determined by Agent or such
Lender to be the excess, if any, of (i) the amount of interest
that would have accrued on the principal amount of such LIBOR
Rate Loan had such event not occurred, at the LIBOR Rate that
would have been applicable thereto, for the period from the date
of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert, or
continue, for the period that would have been the Interest Period
therefor), minus (ii) the amount of interest that would accrue on
such principal amount for such period at the interest rate which
Agent or such Lender would be offered were it to be offered, at
the commencement of such period, Dollar deposits of a comparable
amount and period in the London interbank market. A certificate
of Agent or a Lender delivered to Borrower setting forth any
amount or amounts that Agent or such Lender is entitled to
receive pursuant to this Section shall be conclusive absent
manifest error.
(iii) Borrower shall have not more than 8 LIBOR Rate
Loans in effect at any given time. Borrower only may exercise the
LIBOR Option for LIBOR Rate Loans of at least $1,000,000 and
integral multiples of $200,000 in excess thereof.
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(c) PREPAYMENTS. Borrower may prepay LIBOR Rate Loans
at any time; provided, however, that in the event that LIBOR Rate
Loans are prepaid on any date that is not the last day of the
Interest Period applicable thereto, including as a result of any
automatic prepayment through the required application by Agent of
proceeds of Collections in accordance with Section 2.4(b) or for
any other reason, including early termination of the term of this
Agreement or acceleration of all or any portion of the
Obligations pursuant to the terms hereof, Borrower shall
indemnify, defend, and hold Agent and the Lenders and their
Participants harmless against any and all Funding Losses in
accordance with clause (b)(ii) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with
respect to any Lender on a prospective basis to take into account
any additional or increased costs to such Lender of maintaining
or obtaining any eurodollar deposits or increased costs due to
changes in applicable law occurring subsequent to the
commencement of the then applicable Interest Period, including
changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve
requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), excluding the Reserve
Percentage, which additional or increased costs would increase
the cost of funding loans bearing interest at the LIBOR Rate. In
any such event, the affected Lender shall give Borrower and Agent
notice of such a determination and adjustment; provided, however,
that before making any such demand, the affected Lender agrees to
use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions and so long as such efforts
would not be disadvantageous to it, in its reasonable discretion,
in any legal, economic (other than immaterial costs related to
such efforts), or regulatory manner) to designate a different
eurodollar lending office if the making of such designation would
allow the affected Lender to continue to perform its obligations
to make LIBOR Rate Loans and avoid the need for, or materially
reduce the amount of, such increased cost; and Agent promptly
shall transmit the notice to each other Lender. Upon its receipt
of the notice from the affected Lender, Borrower may, by notice
to such affected Lender (y) require such Lender to furnish to
Borrower a statement setting forth the basis for adjusting such
LIBOR Rate and the method for determining the amount of such
adjustment, or (z) repay the LIBOR Rate Loans with respect to
which such adjustment is made (together with any amounts due
under clause (b)(ii) above). In the case of clause (y) above,
within 30 days after its receipt of the notice from the affected
Lender, Borrower may, at its option, (I) elect to substitute for
such affected Lender any other bank or financial institution
reasonably acceptable to Agent, and such affected Lender shall
have no right
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to refuse to be replaced hereunder, or (II) terminate the
Revolver Commitment that is held by such affected Lender.
(ii) In the event that any change in market conditions
or any law, regulation, treaty, or directive, or any change
therein or in the interpretation of application thereof, shall at
any time after the date hereof, in the reasonable opinion of any
Lender, make it unlawful or impractical for such Lender to fund
or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the
LIBOR Rate, such Lender shall give written notice of such changed
circumstances to Agent and Borrower; provided, however, that
before making any such demand, the affected Lender agrees to use
reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not
be disadvantageous to it, in its reasonable discretion, in any
legal, economic (other than immaterial costs related to such
efforts), or regulatory manner) to designate a different
eurodollar lending office if the making of such designation would
allow the affected Lender to continue to perform its obligations
to make LIBOR Rate Loans; and Agent promptly shall transmit the
notice to each other Lender. Within 30 days after its receipt of
the notice from such affected Lender, Borrower may, at its
option, (I) elect to substitute for such affected Lender any
other bank or financial institution reasonably acceptable to
Agent, and such affected Lender shall have no right to refuse to
be replaced hereunder, (II) terminate the Revolver Commitment
that is held by such affected Lender, or (III) elect to accept
Base Rate Loans only from such affected Lender.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the
contrary contained herein notwithstanding, neither Agent, nor any Lender, nor
any of their Participants, is required actually to acquire eurodollar deposits
to fund or otherwise match fund any Obligation as to which interest accrues at
the LIBOR Rate. The provisions of this Section shall apply as if each Lender or
its Participants had match funded any Obligation as to which interest is
accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
2.14 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change after the date hereof in any law,
rule, regulation or guideline regarding capital requirements for banks or bank
holding companies, or any change in the interpretation or application thereof by
any Governmental Authority charged with the administration thereof, or (ii)
compliance by such Lender or its parent bank holding company with any guideline,
request, or directive of any such entity regarding capital adequacy (whether or
not having the force of law), has or will have the effect of reducing the return
on such Lender's or such holding company's capital as a consequence of such
Lender's Commitments hereunder to a level below that which such Lender or such
holding company
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could have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Borrower and Agent thereof. Following receipt of such notice,
Borrower agrees to pay such Lender on demand the amount of such reduction of
return of capital as and when such reduction is determined (but in no event for
a period of more than 90 days prior to the date of the written notice), payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods. The foregoing
notwithstanding, in the event that payments to any Lender are required to be
made hereunder as a result of such additional costs, Borrower shall be entitled
to substitute for such Lender any other bank or financial institution reasonably
acceptable to Agent, and such Lender shall have no right to refuse to be
replaced hereunder. Each such Lender shall state in the notice required by this
Section 2.14, in reasonable detail, the cause and amount of such additional
cost. Within 30 days after receipt of such notice, Borrower may, at its option,
elect to terminate the Revolver Commitment that is held by such Lender.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfillment, to the satisfaction of Agent, of each of the conditions
precedent set forth below:
(a) the Closing Date shall occur on or before May 31,
2002;
(b) Agent shall have received all financing statements
required by Agent and Agent shall have received searches reflecting the filing
of all such financing statements;
(c) Agent shall have received each of the following
documents, in form and substance satisfactory to Agent, duly executed, and each
such document shall be in full force and effect:
(i) the Cash Management Agreements,
(ii) the Collateral Assignments of Key Leases, together
with an appropriate consent to hypothecation from the lessor
under the relevant Key Lease (to the extent any such consent is
required thereby), with respect to the Key Leases of each of the
Mature Stations,
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(iii) the Collateral Assignments of Tower Leases,
together with an appropriate consent to hypothecation from the
lessor under the relevant Tower Lease (to the extent any such
consent is required thereby), with respect to the Tower Leases of
each of the Mature Stations,
(iv) the Control Agreements required to comply with the
provisions of this Agreement,
(v) the Disbursement Letter,
(vi) the Due Diligence Letter,
(vii) the Fee Letter,
(viii) the Guarantor Security Agreement,
(ix) the Guaranty,
(x) the Intercompany Subordination Agreement,
(xi) the Mortgages,
(xii) the Officers' Certificate,
(xiii) the Pay-Off Letter, together with UCC termination
statements and other documentation evidencing the termination by
Existing Lender Group of its Liens in and to the properties and
assets of the Obligors, and
(xiv) the Pledge Agreement, together with all
certificates representing the certificated shares of Stock
pledged thereunder, as well as Stock powers with respect to such
certificated shares endorsed in blank;
(d) Agent shall have received a certificate from the
Secretary of Borrower attesting to the resolutions of Borrower's Board of
Directors authorizing its execution, delivery, and performance of this Agreement
and the other Loan Documents to which Borrower is a party and authorizing
specific officers of Borrower to execute the same;
(e) Agent shall have received copies of Borrower's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of Borrower;
(f) Agent shall have received a certificate of status
with respect to Borrower, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of Borrower, which certificate shall indicate that Borrower is in
good standing in such jurisdiction;
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(g) Agent shall have received certificates of status
with respect to Borrower, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of Borrower) in which its failure to be
duly qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that Borrower is in good standing in such
jurisdictions;
(h) Agent shall have received a certificate from the
Secretary of each Guarantor attesting to the resolutions of such Guarantor's
Board of Directors authorizing its execution, delivery, and performance of the
Loan Documents to which such Guarantor is a party and authorizing specific
officers of such Guarantor to execute the same;
(i) Agent shall have received copies of each
Guarantor's Governing Documents, as amended, modified, or supplemented to the
Closing Date, certified by the Secretary of such Guarantor;
(j) Agent shall have received a certificate of status
with respect to each Guarantor, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Guarantor, which certificate shall indicate that such
Guarantor is in good standing in such jurisdiction;
(k) Agent shall have received certificates of status
with respect to each Guarantor, each dated within 30 days of the Closing Date,
such certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Guarantor) in which its
failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that such Guarantor is in good
standing in such jurisdictions;
(l) Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.8, the form and substance of which shall be satisfactory to Agent;
(m) Borrower shall have used its reasonable best
efforts to obtain and deliver to Agent a Collateral Access Agreement with
respect to its headquarters location;
(n) Agent shall have received (i) an opinion of
Borrower's and Guarantors' counsel in form and substance satisfactory to Agent,
and (ii) an opinion of Borrower's and Guarantors' special communications counsel
in form and substance satisfactory to Agent;
(o) Agent shall have received satisfactory evidence
(including a certificate of the chief financial officer of Borrower) that all
tax returns required to be filed by Borrower and its Subsidiaries have been
timely filed and all taxes upon Borrower, its Subsidiaries, or their properties,
assets, income, and franchises (including Real Property
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taxes and payroll taxes) have been paid prior to delinquency, except such taxes
that are the subject of a Permitted Protest;
(p) Borrower shall have the Required Availability after
giving effect to the initial extensions of credit, if any, hereunder;
(q) Agent shall have received Borrower's Closing Date
Business Plan;
(r) Borrower shall pay all Lender Group Expenses
incurred in connection with the transactions evidenced by this Agreement;
(s) Agent shall have received mortgagee title insurance
policies (or marked commitments to issue the same) for the Real Property
Collateral issued by a title insurance company satisfactory to Agent (each a
"Mortgage Policy" and, collectively, the "Mortgage Policies") in amounts
satisfactory to Agent assuring Agent that the Mortgages on such Real Property
Collateral are valid and enforceable first priority mortgage Liens on such Real
Property Collateral free and clear of all defects and encumbrances except
Permitted Liens or defects and encumbrances that do not materially reduce the
value of such Real Property Collateral, and the Mortgage Policies otherwise
shall be in form and substance satisfactory to Agent;
(t) Agent shall have received copies of each LMA, each
Key Lease, each Tower Lease, and each Affiliation Agreement, together with a
certificate of the Secretary of Borrower certifying each such document as being
a true, correct, and complete copy thereof; and
(u) Borrower shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by Borrower of this Agreement or any
other Loan Document or with the consummation of the transactions contemplated
hereby and thereby.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto, of each of the conditions subsequent
set forth below (the failure by Borrower to so perform or cause to be performed
constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to
Agent certified copies of the policies of insurance, together with the
endorsements thereto, as are required by Section 6.8; and
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(b) within 30 days of the Closing Date, deliver to
Agent evidence that the Obligors filed the executed Loan Documents with the FCC,
to the extent required by the FCC rules, within 30 days of their execution.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation
of the Lender Group (or any member thereof) to make all Advances (or to extend
any other credit hereunder) shall be subject to the following conditions
precedent:
(a) the representations and warranties contained in
this Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date),
(b) no Default or Event of Default shall have occurred
and be continuing on the date of such extension of credit, nor shall either
result from the making thereof,
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the extending of such
credit shall have been issued and remain in force by any Governmental Authority
against Borrower, Agent, any Lender, or any of their Affiliates,
(d) no Material Adverse Change shall have occurred, and
(e) prior to the date of the initial Advance or Letter
of Credit, Agent shall have received evidence satisfactory to it that, after the
date hereof, Borrower received the proceeds of a capital contribution from Acme
Intermediate of $6,000,000, or more, in cash.
3.4 TERM. This Agreement shall become effective upon the execution
and delivery hereof by Borrower, Agent, and the Lenders and shall continue in
full force and effect for a term ending on May 31, 2004 (the "Maturity Date").
The foregoing notwithstanding, the Lender Group, upon the election of the
Required Lenders, shall have the right to terminate its obligations under this
Agreement immediately and without notice during the continuation of an Event of
Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrower with respect to outstanding Letters of Credit) immediately shall become
due and payable without notice or demand (including either (i) providing cash
collateral to be held by Agent for the benefit of those Lenders with a Revolver
Commitment in an amount equal to 105% of the then extant Letter of Credit Usage,
or (ii) causing the original Letters of Credit to be returned to the Issuing
Lender). No termination of this Agreement, however, shall relieve or discharge
Borrower of its duties, Obligations, or covenants hereunder and the Agent's
Liens in the
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Collateral shall remain in effect until all Obligations (other than contingent
indemnification obligations or obligations to reimburse Lender for drawings
under outstanding Letters of Credit that have been cash collateralized as
provided herein) have been fully and finally discharged and the Lender Group's
obligations to provide additional credit hereunder have been terminated. When
this Agreement has been terminated and all of the Obligations (other than
contingent indemnification obligations or obligations to reimburse Lender for
drawings under outstanding Letters of Credit that have been cash collateralized
as provided herein) have been fully and finally discharged and the Lender
Group's obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrower's sole expense, execute and
deliver any UCC termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form)
as are reasonably necessary to release, as of record, the Agent's Liens (other
than with respect to the cash collateral provided pursuant to the first sentence
of this Section 3.5) and all notices of security interests and liens previously
filed by Agent with respect to the Obligations.
3.6 EARLY TERMINATION BY BORROWER. Borrower has the option, upon no
less than 30 days or more than 45 days prior written notice to Agent, to
terminate this Agreement by paying to Agent, for the benefit of the Lender
Group, in cash, the Obligations (including either (i) providing cash collateral
to be held by Agent for the benefit of those Lenders with a Revolver Commitment
in an amount equal to 105% of the then extant Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to the Issuing Lender), in
full, together with the Applicable Prepayment Premium (to be allocated based
upon letter agreements between Agent and individual Lenders). If Borrower sends
a notice of termination pursuant to the provisions of this Section and does not
revoke such notice prior to the termination date set forth therein, then the
Commitments shall terminate and Borrower shall be obligated to repay the
Obligations (including (a) either (i) providing cash collateral to be held by
Agent for the benefit of those Lenders with a Revolver Commitment in an amount
equal to 105% of the then extant Letter of Credit Usage, or (ii) causing the
original Letters of Credit to be returned to the Issuing Lender), in full,
together with the Applicable Prepayment Premium, on the date set forth in such
notice. In the event of the termination of this Agreement and repayment of the
Obligations at any time prior to the Maturity Date, for any other reason,
including (a) termination upon the election of the Required Lenders to terminate
during the continuation of an Event of Default, (b) foreclosure and sale of
Collateral, (c) sale of the Collateral in any Insolvency Proceeding, or (iv)
restructure, reorganization, or compromise of the Obligations by the
confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual amount of
damages to the Lender Group or profits lost by the Lender Group as a result of
such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrower shall pay the Applicable Prepayment Premium to Agent (to
be allocated based upon letter agreements between Agent and individual Lenders),
measured as of the date of
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such termination. The foregoing to the contrary notwithstanding, in the event
that any termination of this Agreement by Borrower pursuant to the first
sentence of this Section 3.6 occurs as a proximate result of or in proximate
connection with (A) Borrower's consummation of an equity or subordinated debt
issuance, (B) the sale of all or substantially all of the Stock of Borrower or
all or substantially all of Borrower's and its Subsidiaries' assets, in one or a
series of related transactions, or (C) a refinancing of the Obligations provided
solely by ▇▇▇▇▇ Fargo or one of its Affiliates, or as to which ▇▇▇▇▇ Fargo or
one of its Affiliates serves as the administrative agent or makes a commitment
to lend at least $10,000,000, then, (i) in the case of (A) or (B) above, the
Applicable Prepayment Premium shall be equal to one-half of the Applicable
Prepayment Premium that would otherwise be applicable, and (ii) in the case of
(C) above, the Applicable Prepayment Premium shall be equal to zero.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants (which grant
shall not be effective until the Closing Date, but which such grant shall be
effective from and after the Closing Date) to Agent, for the benefit of the
Lender Group, a continuing security interest in all of its right, title, and
interest in all currently existing and hereafter acquired or arising Personal
Property Collateral in order to secure prompt repayment of any and all of the
Obligations in accordance with the terms and conditions of the Loan Documents
and in order to secure prompt performance by Borrower of each of its covenants
and duties under the Loan Documents. The Agent's Liens in and to the Personal
Property Collateral shall attach to all Personal Property Collateral without
further act on the part of Agent or Borrower. Anything contained in this
Agreement or any other Loan Document to the contrary notwithstanding, except for
Permitted Dispositions, Permitted Swaps, and amendments, modifications or
terminations of licenses not prohibited hereunder, no Obligor has any authority,
express or implied, to dispose of any item or portion of the Collateral.
Anything to the contrary in this Agreement or the other Loan Documents
notwithstanding, to the extent this Agreement or any other Loan Document
purports to grant to Agent a security interest in the FCC Licenses, Agent shall
only have a security interest in such FCC Licenses at such times and to the
extent that a security interest in such FCC Licenses is not prohibited under
applicable law, and Agent agrees that, to the extent prior FCC approval is
required pursuant to the Communications Act of 1934, as amended, or the rules
and regulations of the FCC for (a) the operation and effectiveness of any remedy
hereunder or under any Loan Document, or (b) taking any action that may be taken
by Agent hereunder or under any Loan Document, such remedy or action will be
subject to such prior FCC approval having been obtained by or in favor of Agent;
and Borrower will use, and shall cause each of the other Obligors to (and, by
its execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees to) use, its reasonable best efforts to obtain any such
approval as promptly as possible after Agent first becomes entitled to exercise
such remedy or action (but only so long as Agent is so entitled); provided,
however, that, the foregoing exclusion shall in no way be construed (a) to apply
if any such prohibition is unenforceable under applicable law,
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or (b) so as to limit, impair or otherwise affect Agent's unconditional
continuing security interests in and liens upon any rights or interests of
Borrower in or to monies due or to become due under any such license, or (c) to
limit, impair, or otherwise affect Agent's continuing security interest in and
Lien upon any rights or interests of Borrower in and to any proceeds from the
sale, license, lease, or other disposition of any such FCC License.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral, and if
and to the extent that perfection or priority of Agent's security interest is
dependent on or enhanced by possession, Borrower, promptly upon the request of
Agent, shall, and shall cause each of the other Obligors to (and, by its
execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees to) endorse and deliver physical possession of such
Negotiable Collateral to Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time during the continuation of an Event of Default, Agent or
Agent's designee may (a) notify Account Debtors of the Obligors that the
Accounts, chattel paper, or General Intangibles have been assigned to Agent or
that Agent has a security interest therein, or (b) collect the Accounts, chattel
paper, or General Intangibles directly and charge the reasonable collection
costs and expenses to the Loan Account. Borrower agrees that it will, and will
cause each of the other Obligors to (and by execution and delivery of the
Guaranty or a joinder thereto, each of the Guarantors hereby agrees to), hold in
trust for the Lender Group, as the Lender Group's trustee, any Collections that
it receives and immediately will deliver said Collections to Agent or a Cash
Management Bank in their original form as received by the applicable Obligor.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon
the request of Agent, Borrower shall, and shall cause each of the other Obligors
to (and by execution and delivery of the Guaranty or a joinder thereto, each of
the Guarantors hereby agrees to), execute and deliver to Agent, any and all
financing statements, original financing statements in lieu of continuation
statements, fixture filings, mortgages, security agreements, pledges,
assignments (including Collateral Assignments of Key Leases and Collateral
Assignments of Tower Leases that are entered into by Borrower or any of its
Subsidiaries at or following the closing of any Permitted Acquisition),
endorsements of certificates of title, and all other documents (the "Additional
Documents") that Agent may request in its Permitted Discretion, in form and
substance satisfactory to Agent, to perfect and continue perfected or better
perfect the Agent's Liens in the Collateral (whether now owned or hereafter
arising or acquired), to create and perfect Liens in favor of Agent in any Real
Property acquired after the Closing Date (in form substantially similar to the
Mortgages executed on or prior to the Closing Date (subject to variations
necessary to take into account local law and practice), and in order to fully
consummate all of the transactions contemplated hereby and under the other Loan
Documents. To the maximum extent permitted by applicable law, Borrower
authorizes Agent to execute any such Additional Documents in
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Borrower's name and authorizes Agent to file such executed Additional Documents
in any appropriate filing office. In addition, on such periodic basis as Agent
shall require (but so long as no Event of Default is continuing, not more
frequently than monthly), Borrower shall, and shall cause each of the other
Obligors to (and by execution and delivery of the Guaranty or a joinder thereto,
each of the Guarantors hereby agrees to), (a) provide Agent with a report of all
new patentable, copyrightable, or trademarkable materials acquired or generated
by any of the Obligors during the prior period, (b) cause all patents,
copyrights, and trademarks acquired or generated by that are not already the
subject of a registration with the appropriate filing office (or an application
therefor diligently prosecuted) to be registered with such appropriate filing
office in a manner sufficient to impart constructive notice of the applicable
Obligor's ownership thereof, and (c) cause to be prepared, executed, and
delivered to Agent supplemental schedules to the applicable Loan Documents to
identify such patents, copyrights, and trademarks as being subject to the
security interests created thereunder.
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes,
constitutes, and appoints, and hereby causes each of the other Obligors to make,
constitute and appoint (and by its execution and delivery of the Guaranty or a
joinder thereto, each of the Guarantors hereby makes, constitutes, and
appoints), Agent (and any of Agent's officers, employees, or agents designated
by Agent) as the Obligors' true and lawful attorney, with power to (a) if any
Obligor refuses to, or fails timely to execute and deliver any of the documents
described in Section 4.4, sign the name of such Obligor on any of the documents
described in Section 4.4, (b) at any time that an Event of Default has occurred
and is continuing, sign the Obligors' names on any invoice or ▇▇▇▇ of lading
relating to the Collateral, drafts against Account Debtors, or notices to
Account Debtors, (c) send requests for verification of Accounts, (d) endorse the
Obligors' names on any Collection item that may come into the Lender Group's
possession, (e) at any time that an Event of Default has occurred and is
continuing, make, settle, and adjust all claims under the Obligors' policies of
insurance and make all determinations and decisions with respect to such
policies of insurance, and (f) at any time that an Event of Default has occurred
and is continuing, settle and adjust disputes and claims respecting the
Accounts, chattel paper, or General Intangibles directly with Account Debtors,
for amounts and upon terms that Agent determines to be reasonable, and Agent may
cause to be executed and delivered any documents and releases that Agent
determines to be necessary. The appointment of Agent as the Obligors' attorney,
and each and every one of its rights and powers, being coupled with an interest,
is irrevocable until all of the Obligations have been fully and finally repaid
and performed and the Lender Group's obligations to extend credit hereunder are
terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter to inspect the Books and to check, test, and appraise the
Collateral in order to verify any or all of the Obligor's financial condition or
the amount, quality, value, condition of, or any other matter
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relating to, the Collateral; provided, however, that any such audit or appraisal
shall be subject to the limitations set forth in Section 2.11(c).
4.7 CONTROL AGREEMENTS. Borrower agrees that, from and after the
Closing Date, it will not, and it will cause the other Obligors not to (and by
its execution and delivery of the Guaranty or a joinder thereto, each of the
Guarantors hereby agrees that it will not), transfer assets out of any
Securities Accounts other than as permitted under Section 7.19 and, if to
another securities intermediary, unless each of the applicable Obligor, Agent,
and the substitute securities intermediary have entered into a Control
Agreement. No arrangement contemplated hereby or by any Control Agreement in
respect of any Securities Accounts or other Investment Property shall be
modified by any Obligor without the prior written consent of Agent. During the
continuance of an Event of Default, Agent may notify any securities intermediary
to liquidate the applicable Securities Account or any related Investment
Property maintained or held thereby and remit the proceeds thereof to the
Agent's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement,
Borrower makes the following representations and warranties to the Lender Group,
which shall be true, correct, and complete in all material respects as of the
Closing Date, and at and as of the date of the making of each Advance (or other
extension of credit) made thereafter, as though made on and as of the date of
such Advance (or other extension of credit) (except to the extent that such
representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
5.1 NO ENCUMBRANCES. The Obligors have good and indefeasible title to
their properties and assets (including all of the Stations), free and clear of
Liens except for Permitted Liens.
5.2 [INTENTIONALLY OMITTED].
5.3 [INTENTIONALLY OMITTED].
5.4 EQUIPMENT. All of the Equipment used or held for use in the
Obligors' businesses and is fit for such purposes.
5.5 LOCATION OF INVENTORY AND EQUIPMENT. Except (a) as set forth on
Schedule 5.5, and (b) for personal computers and other office equipment in an
aggregate amount not to exceed $100,000, the Inventory and Equipment are not
stored with a bailee, warehouseman, or similar party and are located only at the
locations identified on Schedule 5.5.
5.6 [INTENTIONALLY OMITTED].
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5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of Borrower is located at the address indicated in Schedule 5.7 and
Borrower's FEIN is identified in Schedule 5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization and qualified to
do business in any state where the failure to be so qualified reasonably could
be expected to have a Material Adverse Change.
(b) Set forth on Schedule 5.8(b) is a complete and
accurate description of the authorized capital Stock of Borrower, by class, and,
as of the Closing Date, a description of the number of shares of each such class
that are issued and outstanding. Other than as described on Schedule 5.8(b),
there are no subscriptions, options, warrants, or calls relating to any shares
of Borrower's capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. Borrower is not subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on Schedule 5.8(c) is a complete and
accurate list of Borrower's direct and indirect Subsidiaries, showing: (i) the
jurisdiction of their organization, (ii) the number of shares of each class of
common and preferred Stock authorized for each of such Subsidiaries, and (iii)
the number and the percentage of the outstanding shares of each such class owned
directly or indirectly by Borrower. All of the outstanding capital Stock of each
such Subsidiary has been validly issued and is fully paid and non-assessable.
(d) Except as set forth on Schedule 5.8(c), there are
no subscriptions, options, warrants, or calls relating to any shares of
Borrower's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. Neither Borrower
nor any of its Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of Borrowers'
Subsidiaries' capital Stock or any security convertible into or exchangeable for
any such capital Stock.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by
Borrower of this Agreement and the Loan Documents to which it is a party have
been duly authorized by all necessary action on the part of Borrower.
(b) The execution, delivery, and performance by
Borrower of this Agreement and the Loan Documents to which it is a party do not
and will not (i) violate any
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provision of federal, state, or local law or regulation applicable to Borrower,
the Governing Documents of Borrower, or any order, judgment, or decree of any
court or other Governmental Authority binding on Borrower, (ii) conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any material contractual obligation of Borrower, (iii) result in
or require the creation or imposition of any Lien of any nature whatsoever upon
any properties or assets of Borrower, other than Permitted Liens, or (iv)
require any approval of Borrower's interestholders or any approval or consent of
any Person under any material contractual obligation of Borrower.
(c) Other than as set forth on Schedule 5.9 and other
than the filing of mortgages, financing statements, and fixture filings, the
execution, delivery, and performance by Borrower of this Agreement and the Loan
Documents to which Borrower is a party do not and will not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority or other Person. Notwithstanding the foregoing
or the provisions of clause (h) below, (i) from time to time, the Obligors may
be required to obtain certain authorizations of or to make certain filings with
the FCC and which are required in the ordinary course of business, (ii) copies
of certain documents, including without limitation certain Loan Documents, may
be required to be filed with the FCC pursuant to 47 C.F.R Section 73.3613, (iii)
the FCC must be notified of the consummation of any assignments or transfers of
control of FCC authorizations for any television broadcast stations and
ownership reports are required to be filed with the FCC after such consummation
pursuant to 47 C.F.R. Section 73.3615, and (iv) prior to the exercise of certain
rights or remedies under the Loan Documents by Agent, FCC consents and
notifications with respect to such exercise may be required to be timely
obtained or made.
(d) This Agreement and the other Loan Documents to
which Borrower is a party, when executed and delivered by Borrower, will be the
legally valid and binding obligations of Borrower, enforceable against Borrower
in accordance with their respective terms, except as enforcement may be limited
by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected,
and first priority Liens, subject only to Permitted Liens.
(f) The execution, delivery, and performance by
Guarantors of the Loan Documents to which they are party have been duly
authorized by all necessary action on the part of each Guarantor.
(g) The execution, delivery, and performance by
Guarantors of the Loan Documents to which they are party do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable
to any Guarantor, the Governing Documents of any Guarantor, or any order,
judgment, or decree of any court or other Governmental Authority binding on any
Guarantor, (ii) conflict with, result in a breach of, or
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constitute (with due notice or lapse of time or both) a default under any
material contractual obligation of any Guarantor, (iii) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any properties
or assets of any Guarantor, other than Permitted Liens, or (iv) require any
approval of any Guarantor's interestholders or any approval or consent of any
Person under any material contractual obligation of any Guarantor.
(h) Other than as set forth on Schedule 5.9 and other
than the filing of mortgages, financing statements, and fixture filings, the
execution, delivery, and performance by Guarantors of the Loan Documents to
which they are party do not and will not require any registration with, consent,
or approval of, or notice to, or other action with or by, any Governmental
Authority or other Person.
(i) The Loan Documents to which Guarantors are party,
and all other documents contemplated hereby and thereby, when executed and
delivered by Guarantors will be the legally valid and binding obligations of
each Guarantor, enforceable against each Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
5.10 LITIGATION. Other than those matters disclosed on Schedule 5.10,
there are no actions, suits, complaints, or proceedings, investigations (to the
actual knowledge of Borrower) or governmental inquiries (to the actual knowledge
of Borrower) pending, or to the actual knowledge of Borrower, threatened against
any of the Obligors, except for (a) matters that are fully covered by insurance
(subject to customary deductibles), and (b) matters arising after the Closing
Date that, if decided adversely to the applicable Obligor or Obligors,
reasonably could not be expected to result in a Material Adverse Change. None of
the Obligors has received within the past 2 years any notice of violation,
notice of apparent liability for a forfeiture, or notice of forfeiture from the
FCC.
5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrower or its Subsidiaries that have been delivered by Borrower to the Lender
Group have been prepared in accordance with GAAP (except, in the case of
unaudited financial statements, for the lack of footnotes and being subject to
year-end audit adjustments) and present fairly in all material respects,
Borrower's (or its Subsidiaries', as applicable) financial condition as of the
date thereof and results of operations for the period then ended. There has not
been a Material Adverse Change with respect to Borrower (or its Subsidiaries, as
applicable) since the date of the latest financial statements submitted to the
Lender Group on or before the Closing Date.
5.12 FRAUDULENT TRANSFER. No transfer of property is being made by any
Obligor and no obligation is being incurred by any Obligor in connection with
the transactions contemplated by this Agreement or the other Loan Documents with
the actual intent to hinder, delay, or defraud either present or future
creditors of any Obligor.
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5.13 EMPLOYEE BENEFITS. None of the Obligors or any of their ERISA
Affiliates maintains or contributes to any Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 5.14,
(a) to Borrower's knowledge, none of the Obligors' real property assets has ever
been used by the Obligors or by previous owners or operators in the disposal of,
or to produce, store, handle, treat, release, or transport, any Hazardous
Materials, where such production, storage, handling, treatment, release or
transport was in violation, in any material respect, of applicable Environmental
Law, (b) to Borrower's knowledge, none of the Obligors' properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) none of the
Obligors have received notice that a Lien arising under any Environmental Law
has attached to any revenues or to any Real Property owned or operated by the
Obligors, and (d) none of the Obligors have received a summons, citation,
notice, or directive from the Environmental Protection Agency or any other
federal or state governmental agency concerning any action or omission by any of
the Obligors resulting in the releasing or disposing of Hazardous Materials into
the environment.
5.15 BROKERAGE FEES. Borrower has not utilized the services of any
broker or finder in connection with Borrower's obtaining financing from the
Lender Group under this Agreement and no brokerage commission or finders fee is
payable by Borrower in connection herewith.
5.16 INTELLECTUAL PROPERTY. The Obligors own, or hold licenses in, all
trademarks, trade names, copyrights, patents, patent rights, and licenses that
are necessary to the conduct of their business as currently conducted.. Attached
hereto as Schedule 5.16 is a true, correct, and complete listing of all material
patents, patent applications, trademarks, trademark applications, copyrights,
and copyright registrations as to which any of the Obligors is the owner or is
an exclusive licensee.
5.17 LEASES. Schedule 5.17 accurately and completely lists, and sets
forth a description of, all agreements between one or more of the Obligors and
any Person relating to the location of (i) tower and transmitter sites used in
the operation of the Stations (the "Tower Leases") and (ii) offices, studios and
other facilities (the "Key Leases"), and the same constitute the only Tower
Leases and the Key Leases necessary to the conduct by the Obligors of their
businesses as presently conducted. The Obligors enjoy peaceful and undisturbed
possession under all leases (including the Tower Leases) to which they are a
party as lessee, and all of such leases are valid, subsisting and in full force
and effect, and no material default by any Obligor exists under any of them.
None of such leases contains any provision restricting the incurrence of
indebtedness by the lessee.
5.18 DDAS. Set forth on Schedule 5.18 are all of the Obligors' DDAs,
including, with respect to each depository (i) the name and address of such
depository, and (ii) the account numbers of the accounts maintained with such
depository.
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5.19 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of the Obligors in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other
Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents, or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of the Obligors in writing to Agent or any Lender will be, true and
accurate, in all material respects, on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was
provided. On the Closing Date, the Closing Date Projections represent, and as of
the date on which any other Projections are delivered to Agent, such additional
Projections represent Borrower's good faith best estimate of the Obligors'
future performance for the periods covered thereby.
5.20 INDEBTEDNESS. Set forth on Schedule 5.20 is a true and complete
list of all Indebtedness of the Obligors outstanding immediately prior to the
Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately reflects the aggregate principal amount of such
Indebtedness.
5.21 LICENSES AND PERMITS. All licenses, permits and similar rights
(including FCC Licenses) required from any Federal, state or local governmental
body for the ownership, construction, use and operation of the Stations and
other properties now owned and operated by the Obligors have been validly issued
and are in full force and effect, unless and to the extent the failure to obtain
or maintain any such license, permit or similar right could not reasonably be
expected to result in a Material Adverse Change, and the Obligors are in
compliance, in all respects, with all of the provisions thereof, unless and to
the extent the failure of the Obligors to be in compliance with any such
provision thereof could not reasonably be expected to result in a Material
Adverse Change, and none of such licenses, permits or consents is the subject of
any pending or, to the best of Borrower's knowledge and belief, threatened
proceeding for the revocation, cancellation, adverse modification, suspension,
or non-renewal thereof, unless and to the extent such revocation, cancellation,
adverse modification, suspension, or non-renewal thereof could not reasonably be
expected to result in a Material Adverse Change. Except as set forth on Schedule
5.21, the Obligors have completed construction of, or by May 1, 2002 shall have
completed construction of, their respective FCC-authorized digital television
broadcast stations or shall have requested an extension from the FCC for any
such station for which construction has not been completed and the FCC has not
denied any such request by final order. As of the Closing Date and as of each
subsequent date on which Borrower delivers to Agent an updated schedule pursuant
to Section 6.17, set forth on Schedule 5.21 is a complete and accurate list of
all such licenses, permits, special temporary authorizations, and consents, and
a complete description of any material waivers of any FCC rules granted by the
FCC to any Obligor, and such schedule identifies the date by which an
application for the renewal of such license,
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permit, special temporary authorization, consent, or waiver must be filed and
describes the status of each such pending application.
5.22 NO DEFAULT IN MAIN STATION LICENSES. No default by any Obligor
exists under any Main Station License to which it is a party and no event has
occurred or exists which, with notice or lapse of time or both, would constitute
a default by any Obligor thereunder and each such Main Station License has been
duly authorized, executed and delivered by each Obligor party thereto and is in
full force and effect and has not been amended or modified except as disclosed
in writing to Agent.
5.23 LMAS. All LMAs of the Obligors are identified on Schedule 5.23
and each of the Obligors party to any of the LMAs is in compliance with all of
the material terms of such LMA and, to the best of each Obligor's knowledge, all
other parties to each such LMA is in compliance with the provisions thereof.
5.24 GOVERNMENTAL AUTHORITY. Except for the consents, authorizations,
approvals, actions, notices and filings with or by the FCC and other
governmental authorities, all of which have been duly obtained, taken, given or
made and are in full force and effect and are not subject to any conditions
(other than those conditions generally applicable to entities holding licenses,
permits, consents or authorizations granted or issued by the FCC and other
governmental authorities with respect to television stations), no consent,
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other Person is required (i)
for the grant by the Borrower of the security interest in the Collateral granted
hereby or for the execution, delivery or performance of this Agreement by
Borrower, or (ii) for the perfection of such security interest.
5.25 INACTIVE SUBSIDIARY. The Inactive Subsidiary does not own any
material assets and does not engage in any business activity whatsoever, except
that the Inactive Subsidiary is the co-issuer of the Senior Notes pursuant to
the Indenture.
5.26 THE STATIONS.
(a) Each of the Obligors and the Stations is in
compliance, in all material respects, with all applicable federal, state and
local laws, published rules and regulations, and published policies of any
Governmental Authority having jurisdiction over such Obligor, including, without
limitation, the Children's Television Act of 1990, Telecommunications Act of
1996, the Communications Act of 1934, as amended, and the published rules and
policies of the FCC and all rules and laws governing equal employment
opportunity. Without limiting the generality of the foregoing:
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(i) Each Obligor has filed all material reports and
other submissions required to be filed with the FCC, and has
timely paid all annual regulatory fees required to be paid to the
FCC, by such Obligor with respect to its Stations and their
operations;
(ii) the operation of the Stations is in compliance in
all material respects with American National Standards Institute
Standards C95.1-1982 to the extent required under applicable
rules and regulations;
(iii) all of the existing towers used in the operation of
the Stations are obstruction-marked and lighted to the extent
required by, and in accordance with, the published rules and
regulations of the FAA and appropriate notifications to the FAA
have been filed and determinations of no hazard to air navigation
have been obtained from the FAA for each such tower where
required, and all such towers have been duly registered with the
FCC as and to the extent such registration is required by the
FCC's regulations;
(iv) the Stations are in material compliance with the
provisions of the Communications Decency Act of 1996 in effect,
as well as any and all published FCC rules and policies in effect
to implement such Act.
(b) None of the Obligors that own or manage the
Stations is subject to any FCC proceedings in respect of Equal Employment
Opportunity or other regulatory violations and, to Borrower's best knowledge, no
such proceedings are threatened.
(c) The assets of the Stations are adequate and
sufficient for all of the current operations of the Stations as contemplated as
of the date hereof.
5.27 SIGNAL CARRIAGE. The License Companies or the Operating
Companies, as the case may be, have timely and effectively notified the cable
television systems covering substantially all of the cable television
subscribers in the market areas in which the Stations are located (other than
cable television systems not capable of receiving such Stations' signal or not
required to carry such Stations' signals under "must carry" provisions of
applicable law) of the elections by such License Companies or such Operating
Companies, as the case may be, to have such Stations' signals carried on such
systems pursuant either to retransmission consent agreements or to mandatory
carriage requests by such Licensing Companies or such Operating Companies, as
the case may be, and, to Borrower's best knowledge, except as set forth in
Schedule 5.27, all such cable systems are doing so pursuant to such
retransmission consent agreements or such mandatory carriage requests. With
respect to any market area in which any of the Stations is located and in which
one or more direct broadcast satellite service provider(s) has or have (i)
announced an intention to provide so-called "local-to-local" retransmission of
the signals of television stations in such market area to its or their
subscribers in such market area, or (ii) commenced such retransmission, the
signal of such Station is being provided, or the License Companies or the
Operating
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Companies, as the case may be, shall diligently pursue the provision, by such
provider(s) to its or their subscribers in such market to the extent required by
the provisions of the Satellite Home Viewer Improvement Act of 1999 or the rules
of the FCC.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the Obligations
(other than contingent indemnification obligations or obligations to reimburse
the Lender Group for drawings under outstanding Letters of Credit that have been
cash collateralized as provided herein), Borrower shall, and shall cause each of
the other Obligors to, do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Borrower to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information from time to time
as reasonably may be requested by Agent.
6.2 COLLATERAL REPORTING. Provide Agent (and if so requested by
Agent, with copies for each Lender) with the following documents at the
following times in form satisfactory to Agent:
================================================================================
Monthly (not later (a) a summary aging of the accounts payable of each
than the 10th day Station and of the Obligors' accounts payable and any book
of each month) overdraft.
--------------------------------------------------------------------------------
Quarterly (b) a detailed list of the Obligors' customers on a per
Station basis and on the basis of all of the Stations of
the Obligors, and
(c) a report regarding the Obligors' accrued, but unpaid,
ad valorem taxes.
--------------------------------------------------------------------------------
Upon request by (d) such other reports as to the Collateral, or the
Agent financial condition of the Obligors, as Agent may
reasonably request.
================================================================================
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent,
with copies to each Lender:
(a) as soon as available, but in any event within 30
days (45 days in the case of a month that is the end of one of the first 3
fiscal quarters in a fiscal year) after the end of each month during each of
Borrower's fiscal years,
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(i) a company prepared consolidated balance sheet,
income statement (including an income statement on a
Station-by-Station basis), and statement of cash flow covering
Borrower's and its Subsidiaries' operations during such period,
(ii) a certificate signed by the chief financial officer
of Borrower to the effect that:
(A) the financial statements delivered hereunder
have been prepared in accordance with GAAP (except for the
lack of footnotes and being subject to year-end audit
adjustments) and fairly present in all material respects
the financial condition of Borrower and its Subsidiaries,
(B) the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents
are true and correct in all material respects on and as of
the date of such certificate, as though made on and as of
such date (except to the extent that such representations
and warranties relate solely to an earlier date), and
(C) there does not exist any condition or event
that constitutes a Default or Event of Default (or, to the
extent of any non-compliance with this Agreement or any
other Loan Agreement, describing such non-compliance as to
which he or she may have knowledge and what action
Borrower has taken, is taking, or proposes to take with
respect thereto), and
(iii) for each month that is the date on which a
financial covenant in Section 7.22 is to be tested, a Compliance
Certificate demonstrating, in reasonable detail, compliance at
the end of such period with the applicable financial covenants
contained in Section 7.22, and
(b) as soon as available, but in any event within 90
days after the end of each of Borrower's fiscal years,
(i) financial statements of Borrower and its
Subsidiaries for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Agent (KPMG
LLP being acceptable to Agent as of the date hereof) and
certified, without any qualifications, by such accountants to
have been prepared in accordance with GAAP (such audited
financial statements to include, if prepared, such accountants'
letter to management),
(ii) beginning with fiscal year 2002, a certificate of
such accountants addressed to Agent and the Lenders stating that
such accountants
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do not have knowledge of the existence of any Default or Event of
Default under Section 7.22, and
(iii) an internally prepared balance sheet, income
statement, and statement of cash flow on a per Station basis as
well as on the basis of the overall Station group of Borrower and
its Subsidiaries,
(c) as soon as available, but in any event within 30
days prior to the start of each of Borrower's fiscal years,
(i) copies of Borrower's Projections, in form, scope,
and underlying assumptions satisfactory to Agent, in its
Permitted Discretion, for the forthcoming 3 years, year by year,
and for the forthcoming fiscal year, month by month, certified by
the chief financial officer of Borrower and as being such
officer's good faith best estimate of the financial performance
of Borrower and its Subsidiaries during the period covered
thereby,
(d) if and when filed by Borrower,
(i) Form 10-Q quarterly reports, Form 10-K annual
reports, and Form 8-K current reports,
(ii) any other filings made by Borrower with the SEC,
(iii) if requested, copies of Borrower's federal income
tax returns, and any amendments thereto, filed with the Internal
Revenue Service, and
(iv) any other information that is provided by
Borrower's ultimate parent to its shareholders generally,
(e) if and when filed by Borrower and as requested by
Agent, satisfactory evidence of payment of applicable excise taxes (other than
those that are the subject of a Permitted Protest) in each jurisdiction in which
(i) any Obligor conducts business or is required to pay any such excise tax,
(ii) where any Obligor's failure to pay any such applicable excise tax would
result in a Lien on the properties or assets of any Obligor, or (iii) where any
Obligor's failure to pay any such applicable excise tax reasonably could be
expected to result in a Material Adverse Change,
(f) as soon as Borrower has knowledge of any event or
condition that constitutes a Default or an Event of Default, notice thereof and
a statement of the curative action that Borrower proposes to take with respect
thereto, and
(g) upon the request of Agent, any other report
reasonably requested relating to the financial condition of Borrower and its
Subsidiaries.
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The financial statements described above shall be prepared on
both a consolidated and consolidating (per Station and related License Company)
basis and agrees that no Subsidiary of Borrower will have a fiscal year
different from that of Borrower. Borrower agrees that its independent certified
public accountants are authorized to communicate with Agent and to release to
Agent whatever financial information concerning Borrower Agent reasonably may
request. Borrower waives the right to assert a confidential relationship, if
any, it may have with any accounting firm or service bureau in connection with
any information requested by Agent pursuant to or in accordance with this
Agreement, and agrees that Agent may contact directly any such accounting firm
or service bureau in order to obtain such information.
6.4 [INTENTIONALLY OMITTED].
6.5 ADVERTISING REBATES. Cause any advertising rebates or other
allowances, as between any Obligor and its Account Debtors, to be on the same
basis and in accordance with the usual customary practices of such Obligor, as
they exist at the time of the execution and delivery of this Agreement.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its
properties which are necessary or useful in the proper conduct of its business
in good working order and condition, ordinary wear and tear excepted, and
comply, in all material respects, at all times with the provisions of all
material leases to which it is a party as lessee so as to prevent any loss or
forfeiture thereof or thereunder.
6.7 TAXES. Cause all assessments and taxes, whether real, personal,
or otherwise, due or payable by, or imposed, levied, or assessed against, any
Obligor or any of its assets, to be paid in full, before delinquency or before
the expiration of any extension period, except to the extent that the validity
of such assessment or tax shall be the subject of a Permitted Protest. Borrower
will make, and will cause each other Obligor to make, timely payment or deposit
of all tax payments and withholding taxes required of it by applicable laws,
including those laws concerning F.I.C.A., F.U.T.A., state disability, and local,
state, and federal income taxes, and will, upon request, furnish, and will cause
each other Obligor to furnish, Agent with proof satisfactory to Agent indicating
that the applicable Obligor has made such payments or deposits. Borrower shall,
and shall cause all other Obligors to, deliver satisfactory evidence of payment
of applicable excise taxes in each jurisdictions in which the applicable Obligor
is required to pay any such excise tax.
6.8 INSURANCE.
(a) At Borrower's expense, maintain insurance
respecting its assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Borrower also shall
maintain business interruption, and public liability insurance, as well as
insurance against larceny, embezzlement, and criminal
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misappropriation. The insurance companies and coverages maintained by Borrower
and its Subsidiaries as of the date hereof are satisfactory to Agent as of such
date. All such policies of insurance shall be in such amounts and with such
insurance companies as are reasonably satisfactory to Agent. Borrower shall
deliver copies of all such policies to Agent with a satisfactory lender's loss
payable endorsement naming Agent as sole loss payee or additional insured, as
appropriate. Each policy of insurance or endorsement shall contain a clause
requiring the insurer to give not less than 30 days prior written notice to
Agent in the event of cancellation of the policy for any reason whatsoever.
(b) Borrower shall give Agent prompt notice of any loss
covered by such insurance. Agent shall have the exclusive right to adjust any
losses payable under any such insurance policies in excess of $500,000, without
any liability to Borrower whatsoever in respect of such adjustments. If, as of
the date of receipt thereof, there are Advances outstanding hereunder, Borrower
shall pay to Agent any monies received as payment for any loss in excess of
$500,000 under any insurance policy mentioned above (other than liability
insurance policies) or as payment of any award or compensation for condemnation
or taking by eminent domain in excess of $500,000, to be applied to the
prepayment of the Obligations without premium. The foregoing notwithstanding,
Borrower may, at or within 30 days of the date of the receipt of any such
payment by Agent, request that Agent establish an Insurance Proceeds Reserve
and, thereafter, disburse to Borrower such monies from the Insurance Proceeds
Reserve and Agent agrees to disburse such monies solely for the repair,
replacement, or restoration of the asset that has been damaged, destroyed or
condemned, if all of the following conditions are satisfied: (i) no Default or
Event of Default is continuing or would result therefrom, (ii) Borrower has
cash, Cash Equivalents, borrowing availability under Section 2.1 and/or business
interruption insurance proceeds in amounts sufficient, in the reasonable
judgment of Agent, to ensure that Borrower will be able to make payment as and
when due of each of its Obligations that will be payable during the period of
such repair, replacement, or restoration, (iii) Agent is reasonably satisfied
that the amount of such cash, Cash Equivalents, borrowing availability,
insurance proceeds, and/or Insurance Proceeds Reserve will be sufficient fully
to repair, replace, or restore the affected assets, (iv) construction,
completion of the repair, replacement, or restoration of the affected assets is
to be completed in accordance with plans, specifications, and drawings submitted
to and approved by Agent, which approval shall not be unreasonably withheld or
delayed, (v) all construction and completion of the repair, replacement, or
restoration shall be effected with reasonable promptness and shall be of a value
(the "Replaced Value") that is (A) at least equal to the replacement value (the
"Destroyed Value") of the assets destroyed or condemned prior to such
destruction or condemnation, or (B) of a value less than the Destroyed Value so
long as the difference between the Destroyed Value and the Replaced Value is
applied to the prepayment of the Obligations without premium, in such order or
manner as Agent may elect, and (vi) all monies paid by Borrower to Agent may be
commingled with other funds of Agent and will not bear interest pending
disbursement hereunder. In the event Agent fails to receive timely such written
designation or the
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conditions set forth in the following sentence are not satisfied, the payment
shall be applied in the manner set forth in the immediately preceding sentence.
(c) Borrower will not take out separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained under this Section 6.8, unless Agent is included thereon as named
insured with the loss payable to Agent under a lender's loss payable endorsement
or its equivalent. Borrower immediately shall notify Agent whenever such
separate insurance is taken out, specifying the insurer thereunder and full
particulars as to the policies evidencing the same, and copies of such policies
promptly shall be provided to Agent.
6.9 LOCATION OF INVENTORY AND EQUIPMENT. Keep the Inventory and
Equipment only at the locations identified on Schedule 5.5 (other than personal
computers and other office equipment in an aggregate amount not to exceed
$100,000); provided, however, that Borrower may amend Schedule 5.5 so long as
such amendment occurs by written notice to Agent not less than 30 days prior to
the date on which Inventory or Equipment is moved to such new location, so long
as such new location is within the continental United States, and so long as, at
the time of such written notification, Borrower provides any financing
statements or fixture filings necessary to perfect and continue perfected the
Agent's Liens on such assets and also provides to Agent a Collateral Access
Agreement.
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in or reasonably could not be
expected to result in a Material Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under
any leases (including the Key Leases and the Tower Leases) to which any Obligor
is a party or by which the properties and assets of any Obligor are bound,
unless such payments are the subject of a Permitted Protest.
6.12 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or
finders fees incurred in connection with or as a result of Borrower's obtaining
financing from the Lender Group under this Agreement.
6.13 EXISTENCE. At all times preserve and keep in full force and
effect the Obligors' valid existence and good standing.
6.14 ENVIRONMENTAL.
(a) Keep any property either owned or operated by any
Obligor free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all
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material respects, with Environmental Laws and provide to Agent documentation of
such compliance which Agent reasonably requests, (c) promptly notify Agent of
any release of a Hazardous Material in any reportable quantity from or onto
property owned or operated by any Obligor and take any Remedial Actions required
to ▇▇▇▇▇ said release or otherwise to come into compliance with applicable
Environmental Law, and (d) promptly provide Agent with written notice within 10
days of the receipt of any of the following: (i) notice that an Environmental
Lien has been filed against any of the real or personal property of any Obligor,
(ii) commencement of any Environmental Action or notice that an Environmental
Action will be filed against any Obligor, and (iii) notice of a violation,
citation, or other administrative order which reasonably could be expected to
result in a Material Adverse Change.
6.15 GOVERNMENT AUTHORIZATION. Borrower shall deliver to Agent, as
soon as practicable, and in any event within 10 days after the receipt by any
Obligor from the FCC or any other governmental agency having jurisdiction over
the operations of the Obligors or filing or receipt thereof by any Obligor, (i)
copies of any order or notice of the FCC or such other agency or court of
competent jurisdiction which designates any material FCC License or other
material franchise, permit or other governmental operating authorization of any
Obligor, or any application therefor, for a hearing or which refuses renewal or
extension of, or revokes or suspends the authority of any Obligor to construct
or operate a Station (or portion thereof), or adversely modifies or threatens to
adversely modify any FCC License, (ii) a copy of any competing application filed
with respect to any such FCC License or other authorization, or application
therefor, of any Obligor, or any citation, notice of violation, notice of
apparent liability for a forfeiture, or order to show cause issued by the FCC or
other agency or any complaint filed with the FCC or other agency which is
available to any Obligor, and (iii) a copy of any notice or application by any
Obligor requesting authority to or notifying the FCC of its intent to cease
broadcasting on any broadcast station for any period in excess of 10 days.
6.16 OFF-THE-AIR REPORTS. Borrower shall deliver promptly to Agent
notice of each occurrence of a period of 24 consecutive hours or more during
which any Station owned or operated by any Obligor was not broadcasting or was
broadcasting with power or coverage materially reduced from that provided by a
Station's facilities as reflected in any FCC License for such Station.
6.17 LICENSE STATUS. Commencing on the date 6 months following the
Closing Date and continuing every 6 months thereafter, Borrower shall deliver to
Agent an updated Schedule 5.21 reflecting thereon, as of the date of such
delivery, the information described in Section 5.21.
6.18 NOTICES. Promptly deliver, and cause each of the other Obligors
to deliver promptly, to Agent, all material and adverse written notices received
by it with respect to the Collateral, including the Main Station Licenses.
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6.19 PRESERVATION OF FCC LICENSES. Borrower shall, and shall cause
each of the other Obligors to, preserve and maintain (a) the Main Station
Licenses, and (b) any other FCC Licenses, the loss of which could reasonably be
expected to result in a Material Adverse Change.
6.20 CONSTRUCTION OF DIGITAL TELEVISION BROADCAST STATIONS. Except as
set forth on Schedule 5.21, the Obligors shall have completed construction of
their respective FCC-authorized digital television broadcast stations by May 1,
2002 or shall have requested an extension from the FCC for any such station for
which construction has not been completed and the FCC shall not have denied any
such request by final order.
6.21 SIGNAL CARRIAGE. From and after the Closing Date, Borrower shall,
and shall cause each of the other Obligors to, maintain and preserve the
carriage of the signals of the Stations by substantially all cable television
systems in the market areas in which such Stations are located (other than cable
television systems not capable of receiving such Stations' signal or not
required to carry such Stations' signals under "must carry" provisions of
applicable law), by making, providing appropriate notices of, and enforcing,
timely and effective elections for such carriage, either pursuant to
retransmission consent agreements or pursuant to mandatory carriage requests.
Borrower shall, and shall cause all of the Obligors to, maintain and preserve,
or as appropriate the License Companies or the Operating Companies, as the case
may be, shall timely and diligently prosecute efforts to obtain, the carriage of
the signal of any Station located in a market area in which one or more direct
broadcast satellite service provider(s) has or have (i) announced an intention
to provide so-called "local-into-local" retransmission of the signals of the
television stations in such market area to its or their subscribers in such
market area, or (ii) commenced such retransmission, by such provider(s) to its
or their subscribers in such market to the extent required by the provisions of
the Satellite Home Viewer Improvement Act of 1999 or the rules of the FCC.
6.22 DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining actual knowledge thereof, (a) notify Agent if any
written information, exhibit, or report furnished to the Lender Group contained
any untrue statement of a material fact or omitted to state any material fact
necessary to make the statements contained therein not misleading in light of
the circumstances in which made, and (b) correct any defect or error that may be
discovered therein or in any Loan Document or in the execution, acknowledgement,
filing, or recordation thereof.
7. NEGATIVE COVENANTS.
So long as any credit hereunder shall be available and until full
and final payment of the Obligations (other than contingent indemnification
obligations or obligations to reimburse the Lender Group for drawings under
outstanding Letters of Credit that have been cash collateralized as provided
herein), Borrower covenants and agrees that:
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7.1 INDEBTEDNESS. Borrower will not, and will not permit any of the
other Obligors to, create, incur, assume, permit, guarantee, or otherwise become
or remain, directly or indirectly, liable with respect to any Indebtedness,
except:
(a) Indebtedness evidenced by this Agreement and the
other Loan Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit,
(b) Indebtedness (other than Permitted Purchase Money
Indebtedness) set forth on Schedule 5.20,
(c) Permitted Purchase Money Indebtedness,
(d) Permitted Intercompany Advances,
(e) refinancings, renewals, or extensions of
Indebtedness permitted under clauses (b) and (c) of this Section 7.1 (and
continuance or renewal of any Permitted Liens associated therewith) so long as:
(i) the terms and conditions of such refinancings, renewals, or extensions do
not, in Agent's judgment, materially impair the prospects of repayment of the
Obligations by Borrower or materially impair Borrower's creditworthiness, (ii)
such refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions that, taken as a whole, are materially more burdensome or restrictive
to Borrower, and (iv) if the Indebtedness that is refinanced, renewed, or
extended was contractually subordinated in right of payment to the Obligations,
then the terms and conditions of the refinancing, renewal, or extension
Indebtedness must include subordination terms and conditions that are at least
as favorable to the Lender Group as those that were applicable to the
refinanced, renewed, or extended Indebtedness;
(f) Indebtedness of Borrower under any Hedging
Agreement so long as such Hedging Agreement is used solely as part of its normal
business operations as a risk management strategy or hedge against changes
resulting from market operations and not as a means to speculate for investment
purposes on trends and shifts in financial or commodities markets;
(g) Indebtedness permitted under Section 7.6;
(h) Indebtedness composing Permitted Investments;
(i) Indebtedness expressly permitted to be incurred or
remain outstanding in connection with the consummation of a Permitted
Acquisition; and
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(j) from the date hereof until the date of the making
of the initial Advance (or other extension of credit) hereunder, Indebtedness of
Borrower under the Existing Credit Facility.
7.2 LIENS. Borrower will not, and will not permit any of the other
Obligors to, create, incur, assume, or permit to exist, any Lien on or with
respect to any of its assets, of any kind, whether now owned or hereafter
acquired, or any income or profits therefrom, except for Permitted Liens
(including Liens that are replacements of Permitted Liens to the extent that the
original Indebtedness is refinanced, renewed, or extended under Section 7.1(e)
and so long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Borrower will not, and will
not permit any of the other Obligors to:
(a) Enter into any merger, consolidation,
reorganization, or recapitalization, or reclassify its Stock (other than a
Permitted Acquisition, a Permitted Disposition or Permitted Swap).
(b) Liquidate, wind up, or dissolve itself (or suffer
any liquidation or dissolution).
(c) Convey, sell, lease, license, assign, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all or
(other than Permitted Dispositions or Permitted Swaps) any substantial part of
its assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions or
Permitted Swaps, Borrower will not, and will not permit any of the other
Obligors to, convey, sell, lease, license, assign, transfer, or otherwise
dispose of any of the Obligors' assets.
7.5 CHANGE NAME. Borrower will not, and will not permit any of the
other Obligors to, change any Obligor's name, FEIN, corporate structure, or
identity, or add any new fictitious name; provided, however, that an Obligor may
change its name upon at least 30 days prior written notice to Agent of such
change and so long as, at the time of such written notification, such Obligor
provides any financing statements or fixture filings necessary to perfect and
continue perfected the Agent's Liens.
7.6 GUARANTEE. Borrower will not, and will not permit any of the
other Obligors to, guarantee or otherwise become in any way liable with respect
to the obligations of any third Person, except:
(a) by endorsement of instruments or items of payment
for deposit to the account of the Obligors or which are transmitted or turned
over to Agent;
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(b) guarantees of Indebtedness permitted hereunder
pursuant to clauses (a) and (b) of Section 7.1;
(c) guarantees of Indebtedness permitted hereunder
pursuant to clause (e) of Section 7.1 to the extent such Indebtedness
refinances, renews, or extends Indebtedness permitted under clause (b) of
Section 7.1; and
(d) in connection with Indebtedness permitted pursuant
to clause (j) of Section 7.1 to the extent such Guarantee or liability exists as
of the date hereof.
7.7 NATURE OF BUSINESS. Borrower will not, and will not permit any of
the other Obligors to, make any change in the principal nature of its business.
7.8 PREPAYMENTS AND AMENDMENTS. Borrower will not, and will not
permit any of the other Obligors to:
(a) except in connection with a refinancing permitted
by Section 7.1(e), prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of any Obligor, other than (i) Permitted Purchase Money
Indebtedness if Borrower has Excess Liquidity in an amount equal to or greater
than $15,000,000 after giving effect thereto, (ii) Permitted Purchase Money
Indebtedness that is secured by the assets that are the subject of a Permitted
Disposition and that is required to be prepaid as a result of such disposition,
(iii) Indebtedness assumed or acquired in connection with a Permitted
Acquisition or Permitted Swap of a Station that is required to be prepaid as a
result of a Permitted Disposition or Permitted Swap of the subject Station, or
(iv) the Obligations in accordance with this Agreement,
(b) except in connection with a refinancing permitted
by Section 7.1(e), amend, modify, alter, increase, or change any of the terms or
conditions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under Sections 7.1(b) or (c) if
any such amendment, modification, alteration, increase or change could
reasonably be expected to have an adverse effect on the Lender Group, and
(c) directly or indirectly, amend, modify, alter, or
change any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning the Key Leases, the Tower
Leases, or the Affiliation Agreements, if the affect of such amendment,
modification, alteration, or change reasonably could be expected to result in a
Material Adverse Change.
7.9 CHANGE OF CONTROL. Borrower will not, and will not permit any of
the other Obligors to, cause, permit, or suffer, directly or indirectly, any
Change of Control.
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7.10 CHANGE GOVERNING DOCUMENTS. Borrower will not, and will not
permit any of the other Obligors to: (a) authorize the amendment of or amend the
Governing Documents of any Obligor that is a limited liability company to
provide that the Stock of such Obligor is governed by Article 8 of the Code; or
(b) authorize the issuance of or issue certificates evidencing the Stock of any
Obligor that is a limited liability company.
7.11 DISTRIBUTIONS.
(a) Except for Permitted Restricted Payments, or as
otherwise provided herein, Borrower shall not make any distribution (in cash or
other property) on or in respect of, or purchase, acquire, redeem, or retire,
any of Borrower's membership interests, whether now or hereafter outstanding.
(b) Notwithstanding the foregoing and notwithstanding
Section 7.14, during each taxable year of Borrower, Borrower, at its option,
may, in order to comply with its obligations hereunder (including its
obligations under Section 6.7 hereof), make one or more cash distributions to
each member in an aggregate amount not to exceed the amount of any Permitted
Taxes (as defined below) for which such member is, or the beneficial owners of
such member are, primarily liable under applicable law after taking into account
the relevant tax attributes of each such member or beneficial owner (each such
cash distribution, a "Tax Distribution"). A Permitted Tax shall mean any tax,
levy, impost, duty, fee, assessment or other charge of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein on, or with respect to income, activities or assets
of, any Obligor for any taxable period (or portion thereof) of such Obligor
ending on or prior to the date of any cash distribution made pursuant to this
Section 7.11(b).
(c) Borrower shall, prior to making any Tax
Distribution, provide Agent with such documentation and other information Agent
may require, in its Permitted Discretion, to confirm the basis for and the
amount of the Tax Distribution.
(d) For the purposes of computing the aggregate amount
of Tax Distributions made by Borrower to any member of Borrower for any taxable
period (or portion thereof), any Tax Withholding Amounts in respect of payments
made or deemed made to such member during such taxable period (or portion
thereof) shall be treated as a Tax Distribution made by Borrower to such member
of Borrower in respect of such taxable period.
(e) If, at the end of any taxable year of Borrower, it
is determined that the aggregate amount distributed by Borrower to any member of
Borrower for such taxable year pursuant to this Section 7.11 exceeded the
allowable Tax Distributions to such member for such period, then such excess
amount shall be promptly paid to Borrower by such member, or at the option of
Agent, shall be treated as a Tax Distribution to such member in the immediately
following taxable year for the purposes of determining the Tax
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Distributions that can be made to such member in such immediately following
taxable year pursuant to this Section 7.11.
7.12 ACCOUNTING METHODS. Borrower will not, and will not permit any of
the other Obligors to, modify or change its method of accounting (other than as
may be required to conform to GAAP) or enter into, modify, or terminate any
agreement currently existing, or at any time hereafter entered into with any
third party accounting firm or service bureau for the preparation or storage of
any Obligor's accounting records without said accounting firm or service bureau
agreeing to provide Agent information regarding the Collateral or any Obligor's
financial condition.
7.13 INVESTMENTS. Borrower will not, and will not permit any of the
other Obligors to, except for Permitted Investments, directly or indirectly make
or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
the Obligors shall not have Permitted Investments (other than in the Cash
Management Accounts) in deposit accounts or Securities Accounts in excess of
$100,000 outstanding at any one time unless the applicable Obligor and the
applicable securities intermediary or bank have entered into Control Agreements
governing such Permitted Investments, as Agent shall determine in its Permitted
Discretion, to perfect (and further establish) the Agent's Liens in such
Permitted Investments.
7.14 TRANSACTIONS WITH AFFILIATES. Borrower will not, and will not
permit any of the other Obligors to, except for Permitted Restricted Payments
and except for those transactions described on Schedule 7.14, directly or
indirectly enter into or permit to exist any transaction with any Affiliate of
any Obligor except for transactions that are in the ordinary course of the
Obligors' business, upon fair and reasonable terms, that are fully disclosed to
Agent, and that are no less favorable to such Obligor than would be obtained in
an arm's length transaction with a non-Affiliate.
7.15 SUSPENSION. Borrower will not, and will not permit any of the
other Obligors to, suspend or go out of a substantial portion of its business.
7.16 [INTENTIONALLY OMITTED].
7.17 USE OF PROCEEDS. Borrower will not, and will not permit any of
the other Obligors to, use the proceeds of the Advances for any purpose other
than (a) on the Closing Date, to repay, in full, the outstanding principal,
accrued interest, and accrued fees and expenses owing to Existing Lender Group,
(b) to pay transactional fees, costs, and expenses incurred in connection with
this Agreement, the other Loan Documents, and the transactions contemplated
hereby and thereby, and (c) consistent with the terms and conditions hereof, for
its lawful purposes.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND
EQUIPMENT WITH BAILEES. Borrower will not, and will not permit any of the other
Obligors to, relocate its
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chief executive office to a new location without providing 30 days prior written
notification thereof to Agent and so long as, at the time of such written
notification, Borrower provides any financing statements or fixture filings
necessary to perfect and continue perfected the Agent's Liens and also provides
to Agent a Collateral Access Agreement with respect to such new location. The
Inventory and Equipment shall not at any time now or hereafter be stored with a
bailee, warehouseman, or similar party without Borrower providing Agent with a
Collateral Access Agreement.
DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Borrower will not, and will
not permit any of the other Obligors to, establish or maintain any deposit
account or Securities Account, unless Agent shall have received a Control
Agreement in respect of such deposit account or Securities Account if such
deposit account or Securities Account contains assets in excess of $100,000;
provided, however, that, so long as no Event of Default has occurred and is
continuing or would result therefrom, the Obligors may use such assets (and the
proceeds thereof) to the extent not prohibited by this Agreement.
7.19 MAIN STATION LICENSES. Borrower will not, and will not permit any
of the other Obligors to, except solely to the extent expressly permitted
pursuant to this Agreement (i) cancel or terminate any of the Main Station
Licenses or consent to or accept any cancellation or termination thereof, (ii)
sell, assign or otherwise dispose of (by operation of law or otherwise) any part
of its respective interest in any rights under any Main Station Licenses, (iii)
amend, supplement or otherwise modify any of the Main Station Licenses, except
as otherwise permitted pursuant to this Agreement, (iv) waive any default under
or breach of any of the Main Station Licenses or waive, fail to enforce, forgive
or release any right, interest or entitlement of any kind, howsoever arising
under or in respect of any of the Main Station Licenses or vary or agree to the
variation in any respect of any of the provisions of any of the Main Station
Licenses or (v) petition, request or take any other legal or administrative
action which seeks, or may reasonably be expected, to rescind, terminate or
suspend any of the Main Station Licenses or amend or modify any of the Main
Station Licenses in a manner that would be materially adverse to Borrower or any
of its Subsidiaries. Borrower, at its expense, will perform and comply, and will
cause each of the other Obligors to perform and comply, in all material respects
with all terms and provisions of each of the Main Station Licenses required to
be performed or complied with by it or them, will maintain, or cause to be
maintained, each of the Main Station Licenses in full force and effect, will
enforce, or will cause to be enforced, each of the Main Station Licenses in
accordance with their respective terms and will take, or cause to be taken, all
such action to that end as from time to time may be reasonably requested by
Agent.
7.20 LOCAL MARKETING AGREEMENTS. Borrower will not, and will not
permit any of the Obligors to, enter into any LMA or other similar arrangement,
other than Permitted LMAs.
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7.21 FINANCIAL COVENANTS. Borrower will not, and will not permit any
of the other Obligors to,
(a) fail to maintain:
(i) MINIMUM EBITDA. EBITDA, measured on a fiscal
quarter-end basis, of not less than the required amount set
forth in the following table for the applicable period set forth
opposite thereto;
------------------------------------------------------------------------
Applicable Amount Applicable Period
------------------------------------------------------------------------
$700,000.00 For the 3 month period
ending March 31, 2002
------------------------------------------------------------------------
For the 6 month period
$3,275,000.00 ending June 30, 2002
------------------------------------------------------------------------
$5,300,000.00 For the 9 month period
ending September 30, 2002
------------------------------------------------------------------------
$7,100,000.00 For the 12 month period
ending December 31, 2002
------------------------------------------------------------------------
$7,800,000.00 For the 12 month period
ending March 31, 2003
------------------------------------------------------------------------
$9,150,000.00 For the 12 month period
ending June 30, 2003
------------------------------------------------------------------------
$10,745,000.00 For the 12 month period
ending September 30, 2003
------------------------------------------------------------------------
$12,750,000.00 For the 12 month period
ending each fiscal quarter thereafter
------------------------------------------------------------------------
(ii) TANGIBLE NET WORTH. Tangible Net Worth of at least
the required amount set forth in the following table as of the
applicable date set forth opposite thereto:
------------------------------------------------------------------------
Applicable Amount Applicable Date
------------------------------------------------------------------------
($164,000,000.00) March 31, 2002
------------------------------------------------------------------------
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------------------------------------------------------------------------
($170,000,000.00) June 30, 2002
------------------------------------------------------------------------
($176,000,000.00) September 30, 2002
------------------------------------------------------------------------
($183,000,000.00) December 31, 2002
------------------------------------------------------------------------
($191,000,000.00) March 31, 2003
------------------------------------------------------------------------
($195,000,000.00) June 30, 2003
------------------------------------------------------------------------
($200,000,000.00) September 30, 2003
------------------------------------------------------------------------
($205,000,000.00) December 31, 2003
------------------------------------------------------------------------
($213,000,000.00) March 31, 2004
------------------------------------------------------------------------
(iii) INDEBTEDNESS TO EBITDA. A ratio of (a) Total Debt
to (b) EBITDA of not greater than the ratio set forth in the
following table for the applicable period set forth opposite
thereto:
------------------------------------------------------------------------
Applicable Ratio Applicable Period
------------------------------------------------------------------------
336:1 For the 3 month period
ending March 31, 2002
------------------------------------------------------------------------
72:1 For the 6 month period
ending June 30, 2002
------------------------------------------------------------------------
44:1 For the 9 month period
ending September 30, 2002
------------------------------------------------------------------------
33:1 For the 12 month period
ending December 31, 2002
------------------------------------------------------------------------
30:1 For the 12 month period
ending March 31, 2003
------------------------------------------------------------------------
26:1 For the 12 month period
ending June 30, 2003
------------------------------------------------------------------------
22:1 For the 12 month period
ending September 30, 2003
------------------------------------------------------------------------
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------------------------------------------------------------------------
18:1 For the 12 month period
ending each fiscal quarter thereafter
------------------------------------------------------------------------
(b) make:
(i) CAPITAL EXPENDITURES. Capital expenditures in any
fiscal year in excess of the amount set forth in the following table for the
applicable period:
--------------------------------------------------------------------------------
For the Fiscal Year For the 2 Fiscal Years For the three Fiscal
ending December 31, ending December 31, Years ending December 31,
2002 2003 2004
--------------------------------------------------------------------------------
$14,400,000.00 $16,800,000.00 $19,200,000.00
--------------------------------------------------------------------------------
After the date of the consummation of each of the Portland
Acquisition, the Richmond-Petersburg Acquisition, the Flint-Saginaw-Bay City
Acquisition, the Lexington Acquisition and the Janesville-Madison Acquisition,
the covenants set forth in this Section 7.22 shall be adjusted to reflect the
Acquisition Projections for the applicable Acquisition. The foregoing
notwithstanding, the covenants set forth in this Section 7.22 shall also be
adjusted following the consummation of any other Permitted Acquisition and as
otherwise mutually agreed upon by Agent and Borrower.
7.22 INACTIVE SUBSIDIARY. Borrower will not permit the Inactive
Subsidiary to (a) own any material assets, or (b) engage in any business
activity, except for the co-issuance of the Senior Notes pursuant to the
Indenture.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event
of default (each, an "Event of Default") under this Agreement:
8.1 If Borrower fails to pay when due and payable, or when declared
due and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts constituting
Obligations); provided, however, that in the case of Overadvances that are
caused by the charging of interest, fees, or Lender Expenses to the Loan
Account, such event shall not constitute an Event of Default if, within 3
Business Days
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of its receipt of telephonic notice of such Overadvance, Borrower eliminates
such Overadvance.
8.2 If (a) Borrower fails or neglects to perform, keep, or observe,
or any other Obligor fails or neglects to perform, keep, or observe, any term,
provision, condition, covenant, or agreement contained in Sections 6.2
(Collateral Reporting), 6.3 (Financial Statements, Reports, Certificates), 6.9
(Location of Inventory and Equipment), 6.10 (Compliance with Laws), 6.11
(Leases), or 6.18 (Notices) (solely with respect to Main Station Licenses) of
this Agreement and such failure continues for a period of 5 days; (b) Borrower,
or any other Obligor, fails or neglects to perform, keep, or observe any term,
provision, condition, covenant, or agreement contained in Sections 6.1
(Accounting System), 6.5 (Advertising Rebates), 6.6 (Maintenance of Properties),
6.7 (Taxes), 6.14 (Environmental), 6.17 (License Status), 6.18 (Notices) (with
respect to FCC Licenses other than Main Station Licenses), 6.20 (Disclosure
Updates) of this Agreement and such failure continues for a period of 10 days;
or (c) Borrower, or any other Obligor, fails or neglects to perform, keep, or
observe any other term, provision, condition, covenant, or agreement contained
in this Agreement, in any of the other Loan Documents (giving effect to any
grace periods, if any, expressly provided for in such Loan Documents); in each
case, other than any such term, provision, condition, covenant, or agreement
that is the subject of another provision of this Section 8, in which event such
other provision of this Section 8 shall govern); provided that, during any
period of time that any such failure or neglect of Borrower, or any other
Obligor, referred to in this paragraph exists, even if such failure or neglect
is not yet an Event of Default by virtue of the existence of a grace period, the
Lenders shall not required during such period to make Advances to Borrower;
8.3 If any material portion of any Obligor's assets is attached,
seized, subjected to a writ or distress warrant, levied upon, or comes into the
possession of any third Person (excluding any securities intermediary or bank
that has entered into a Control Agreement) and the same is not discharged before
the earlier of 30 days after the date it first arises or 5 days prior to the
date on which such property or asset is subject to forfeiture;
8.4 If an Insolvency Proceeding is commenced by any of the Obligors;
8.5 If an Insolvency Proceeding is commenced against any Obligor, and
any of the following events occur: (a) such Obligor consents to the institution
of such Insolvency Proceeding against it, (b) the petition commencing the
Insolvency Proceeding is not timely controverted, (c) the petition commencing
the Insolvency Proceeding is not dismissed within 60 calendar days of the date
of the filing thereof; provided, however, that, during the pendency of such
period, Agent (including any successor agent) and each other member of the
Lender Group shall be relieved of their obligations to extend credit hereunder,
(d) an interim trustee is appointed to take possession of all or any substantial
portion of the properties or assets of, or to operate all or any substantial
portion of the business of, the Obligors, or (e) an order for relief shall have
been entered therein;
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8.6 If any Obligor is enjoined, restrained, or in any way prevented by
court order from continuing to conduct all or any material part of the business
affairs of the Obligors, taken as a whole;
8.7 If (a) a notice of Lien is filed of record with respect to any of
Borrower's or any of its Subsidiaries' assets by the United States, or any
department, agency, or instrumentality thereof (a "Federal Lien"), or by any
state, county, municipal, or governmental agency and such state, county,
municipal, or governmental agency Lien has priority over the Liens of Agent in
and to the Collateral or any portion thereof (a "Non-Federal Priority Lien"); or
(b) a notice of Lien is filed of record with respect to Borrower's or any of its
Subsidiaries' assets by any state, county, municipal, or governmental agency
that is not a Non-Federal Priority Lien (a "Non-Federal Non-Priority Lien");
provided, however, that, if the aggregate amount claimed with respect to any
such Non-Federal Non-Priority Liens, or the combination thereof, is less than
$250,000, an Event of Default shall not occur under this subsection if the
claims that are the subject of such Liens are the subject of Permitted Protests
and if the Liens are released, discharged, or bonded against within 30 days of
each such Lien first being filed of record or, if earlier, at least 5 days prior
to the date on which assets that are subject to such Liens are subject to being
sold or forfeited and, in any such case, Agent shall have the absolute right to
establish and maintain a reserve against the Borrowing Base and the Maximum
Revolver Amount in an amount equal to the aggregate amount of the underlying
claims (determined by Agent, in its Permitted Discretion, and irrespective of
any Permitted Protests with respect thereto and including any penalties or
interest that are estimated by Agent, in its Permitted Discretion, to arise in
connection therewith);
8.8 If a judgment or other claim involving $250,000, or more, becomes
a Lien or encumbrance upon any material portion of any Obligor's assets and such
judgment or claim is not discharged before the earlier of 30 days after the date
it first arises or 5 days prior to the date on which such property or asset is
subject to forfeiture;
8.9 If Borrower or any of the other Obligors causes a default under
any material agreement to which Borrower or any of the other Obligors is a
party, the termination of which could reasonably be expected to result in a
material adverse effect on any of the Stations, and such default results in the
termination of such agreement, or the refusal to renew such agreement pursuant
to an automatic renewal right therein;
8.10 If any Obligor makes any payment on account of Indebtedness that
has been contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.11 If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or Record made (as and
when made) to the Lender Group by Borrower, its Subsidiaries, or any officer,
management employee, or director of Borrower or any of its Subsidiaries; or the
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8.12 If the obligation of any Guarantor under the Guaranty is limited
or terminated by declaration of a court of competent jurisdiction or by such
Guarantor thereunder;
8.13 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason (other than negligence on the part of
Agent), fail or cease to create a valid and perfected and, except to the extent
permitted by the terms hereof or thereof, first priority Lien on or security
interest in the Collateral (other than Collateral having an aggregate value of
$10,000, or less) covered hereby or thereby and such event, if not occasioned by
an Obligor, continues for a period of 5 days;
8.14 Any material provision of any Loan Document shall at any time for
any reason be declared to be null and void, or the validity or enforceability of
any Loan Document shall be contested by any Obligor, or a proceeding shall be
commenced by any Obligor, or by any Governmental Authority having jurisdiction
over any Obligor, seeking to establish the invalidity or unenforceability
thereof, or any Obligor shall deny in writing that such Obligor has any
liability or obligation purported to be created under any Loan Document and any
such event, if not occasioned by an Obligor, continues for a period of 5 days;
8.15 If there is a default under or with respect to the Senior Notes,
the Indenture, the Intermediate Notes, the Intermediate Indenture, or any other
evidence of Indebtedness of Borrower or any of its Subsidiaries (other than to
the Lender Group hereunder) for borrowed money which, when aggregated with all
other such defaults of Borrower and its Subsidiaries or any of them, equals or
exceeds $250,000, if the effect of such default is to permit the holder of such
Indebtedness to accelerate the maturity of such Indebtedness;
8.16 If the transmission of the broadcast signal(s) of any Station(s)
shall be interrupted or if the operating power or coverage of any Mature
Station(s) shall be materially reduced below the power and coverage to be
obtained by such Station(s)' facilities as reflected on the FCC License(s) for
such Station(s), at any time for more than 48 consecutive hours on 2 occasions,
whether or not consecutive, in any 12 month period, unless such interruption
occurs by reason of force majeure, or (ii) in the event of force majeure, 14
days, in each case, unless (and only so long as) all damages, liabilities and
other effects of such interruption of service are fully covered (other than any
reasonable deductible) by business interruption insurance; or
8.17 If any Obligor fails to keep in force, suffers the termination or
revocation of, terminates, forfeits or suffers a materially adverse modification
to, (a) any Main Station License at any time held by such Obligor and necessary
to the operation of any Station owned by any Obligor, or (b) any one or more
licenses, the aggregate result of which deprives any Station owned by any
Obligor of the ability to reach the entire market area of such Station (a
"Market Area Loss") and such Market Area Loss results in a Material Adverse
Change.
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9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by
Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for
the benefit of Borrower under this Agreement, under any of the Loan Documents,
or under any other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which Agent considers advisable, and
in such cases, Agent will credit Borrower's Loan Account with only the net
amounts received by Agent in payment of such disputed Accounts after deducting
all Lender Group Expenses incurred or expended in connection therewith;
(e) Borrower agrees that, upon the occurrence of and
during the continuance of an Event of Default and at Agent's request, Borrower
will, and will cause each of the other Obligors to, immediately file, or cause
to be filed, such applications for approval, and shall take all other and
further actions required by Agent to obtain such approvals or consents, of
regulatory authorities as are necessary to transfer ownership and control to
Agent, for the benefit of the Lenders, of the FCC Licenses held by any Obligor,
or its interest in any Person holding any such FCC License. To enforce the
provisions of this Section 9.1(e), Agent is empowered to request the appointment
of a receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC its consent to an involuntary transfer of
control of any FCC License for the purpose of seeking a bona fide purchaser to
whom control will ultimately be transferred. Borrower hereby agrees to
authorize, and to cause each of the other Obligors to authorize, such an
involuntary transfer of control upon the request of the receiver so appointed
and, if Borrower shall refuse to authorize or cause any of the other Obligors to
authorize the transfer, its approval may be required by the court. Upon the
occurrence and continuance of an Event of Default, Borrower shall further use
its best efforts to assist in obtaining approval of the FCC, if required, for
any action or transactions contemplated by this Agreement or the Loan Documents,
including preparation, execution and filing with the FCC of the assignor's or
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transferor's portion of any application or applications for the FCC's consent to
the assignment of any FCC License or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of the transfer
or assignment of any portion of the Collateral, together with any FCC License or
other authorization. Borrower acknowledges that the assignment or transfer of
FCC Licenses is integral to Agent's realization of the value of the Collateral,
that there is no adequate remedy at law for failure by Borrower to comply with
the provisions of this Section 9.1(e) and that such failure would not be
adequately compensable in damages, and therefore agrees that the agreements
contained in this Section 9.1(e) may be specifically enforced.
(f) Without notice to or demand upon Borrower or any
other Obligor, make such payments and do such acts as Agent considers necessary
or reasonable to protect its security interests in the Collateral. Borrower
agrees to assemble the Personal Property Collateral if Agent so requires, and to
make the Personal Property Collateral available to Agent at a place that Agent
may designate which is reasonably convenient to both parties. Borrower
authorizes Agent to enter the premises where the Personal Property Collateral is
located, to take and maintain possession of the Personal Property Collateral, or
any part of it, and to pay, purchase, contest, or compromise any Lien that in
Agent's determination appears to conflict with the Agent's Liens and to pay all
expenses incurred in connection therewith and to charge Borrower's Loan Account
therefor. With respect to any of the Obligors' owned or leased premises,
Borrower hereby grants Agent a license to enter into possession of such premises
and to occupy the same, without charge, in order to exercise any of the Lender
Group's rights or remedies provided herein, at law, in equity, or otherwise;
(g) Without notice to Borrower (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of Borrower held
by the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of Borrower held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of Borrower held by the Lender Group, and any amounts received in the
Cash Management Accounts, to secure the full and final repayment of all of the
Obligations;
(i) Ship, reclaim, recover, store, finish, maintain,
repair, prepare for sale, advertise for sale, and sell (in the manner provided
for herein) the Personal Property Collateral. Borrower hereby grants to Agent a
license or other right to use, without charge, Borrower's labels, patents,
copyrights, trade secrets, trade names, trademarks, service marks, and
advertising matter, or any property of a similar nature, as it pertains to the
Personal Property Collateral, in completing production of, advertising for sale,
and selling any Personal Property Collateral;
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(j) Sell the Personal Property Collateral at either a
public or private sale, or both, by way of one or more contracts or
transactions, for cash or on terms, in such manner and at such places (including
Borrower's premises) as Agent determines is commercially reasonable. It is not
necessary that the Personal Property Collateral be present at any such sale;
(k) Agent shall give notice of the disposition of the
Personal Property Collateral as follows:
(i) Agent shall give Borrower a notice in writing of
the time and place of public sale, or, if the sale is a private
sale or some other disposition other than a public sale is to be
made of the Personal Property Collateral, the time on or after
which the private sale or other disposition is to be made; and
(ii) The notice shall be personally delivered or mailed,
postage prepaid, to Borrower as provided in Section 12, at least
15 days before the earliest time of disposition set forth in the
notice; no notice needs to be given prior to the disposition of
any portion of the Personal Property Collateral that is
perishable or threatens to decline speedily in value or that is
of a type customarily sold on a recognized market;
(l) Agent, on behalf of the Lender Group, may credit
bid and purchase at any public sale; and
(m) Agent may seek the appointment of a receiver or
keeper to take possession of all or any portion of the Collateral or to operate
same and, to the maximum extent permitted by law, may, in accordance with
applicable FCC rules or regulations, seek the appointment of such a receiver
without the requirement of prior notice or a hearing;
(n) The Lender Group shall have all other rights and
remedies available at law or in equity or pursuant to any other Loan Document;
and
(o) Any deficiency that exists after disposition of the
Personal Property Collateral as provided above will be paid immediately by
Borrower. Any excess will be promptly returned, without interest and subject to
the rights of third Persons, by Agent to Borrower.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the
Lender Group under this Agreement, the other Loan Documents, and all other
agreements shall be cumulative. The Lender Group shall have all other rights and
remedies not inconsistent herewith as provided under the Code, by law, or in
equity. No exercise by the Lender Group of one right or remedy shall be deemed
an election, and no waiver by the Lender Group of any Event of Default shall be
deemed a continuing waiver. No delay by the Lender Group shall constitute a
waiver, election, or acquiescence by it.
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10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases) due to third Persons, or fails to make
any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to Borrower, may do any or all of the following: (a)
make payment of the same or any part thereof, (b) set up such reserves in
Borrower's Loan Account as Agent deems necessary to protect the Lender Group
from the exposure created by such failure, or (c) in the case of the failure to
comply with Section 6.8 hereof, obtain and maintain insurance policies of the
type described in Section 6.8 and take any action with respect to such policies
as Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrower.
11.3 INDEMNIFICATION. Borrower shall pay, indemnify, defend, and hold
the Agent-Related Persons, the Lender-Related Persons with respect to each
Lender, each Participant, and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other costs and expenses
actually incurred in connection therewith (as and when they are incurred and
irrespective of whether suit is brought), at any time asserted against, imposed
upon, or incurred by any of them (a) in connection with or as a result of or
related to the review, execution, delivery, enforcement, performance, or
administration of this Agreement, any of the other Loan Documents, or the
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transactions contemplated hereby or thereby, and (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto (all the
foregoing, collectively, the "Indemnified Liabilities"). The foregoing to the
contrary notwithstanding, (a) Borrower shall have no obligation to any
Indemnified Person under this Section 11.3 with respect to any Indemnified
Liability that a court of competent jurisdiction finally determines to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person, and (b) Borrower shall have no obligation to any Assignee or
Participant, or its respective officers, directors, employees, agents, or
attorneys-in-fact with respect to any attorneys fees or disbursements and other
costs and expenses incurred by any of them in connection with or as a result of
or related to the review, execution, and delivery of this Agreement or the
Assignment and Acceptance or participation agreement pursuant to which they
become a party hereto or Participant herein. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrower was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrower
with respect thereto.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrower or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as Borrower or Agent, as applicable, may designate to
each other in accordance herewith), or telefacsimile to Borrower or Agent, as
the case may be, at its address set forth below:
If to Borrower: ACME TELEVISION, LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇ ▇▇▇▇▇
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: O'MELVENY & ▇▇▇▇▇ LLP
1999 Avenue of the Stars
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
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If to Agent: FOOTHILL CAPITAL CORPORATION
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Structured Finance Division Manager
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
with copies to: ▇▇▇▇▇▇▇, PHLEGER & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇ Hilson, Esq.
Fax No. ▇▇▇.▇▇▇.▇▇▇▇
Agent and Borrower may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this Section 12,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Borrower acknowledges and agrees that notices sent by the
Lender Group in connection with the exercise of enforcement rights against the
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF
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ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWER
AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY
RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT
TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS
SECTION 13(b).
(c) BORROWER AND THE LENDER GROUP HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
13.2 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent
and Borrower (provided that (i) no written consent of Agent or Borrower shall be
required in connection with any assignment and delegation by a Lender to an
Eligible Transferee, (ii) no written consent of Borrower shall be required in
connection with any assignment or delegation if an Event of Default shall have
occurred and be continuing, and (iii) no assignment and delegation shall be
made, without the prior written consent of Borrower, to any Person that is
organized in or under the laws of any jurisdiction other than the United States
or any state or other political subdivision thereof or is otherwise not a United
States person as defined in the IRC (a "Foreign Person") if payments to such
Person would require Borrower to pay any Taxes or any additional amounts
pursuant to Section 16.11(e)), assign and delegate to one or more assignees
(each an "Assignee") all, or any ratable part of all, of the Obligations, the
Commitments and the other rights and obligations of such Lender hereunder and
under the other Loan Documents, in a minimum amount of $5,000,000; provided,
however, that Borrower and Agent may continue to deal solely and directly with
such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Borrower and Agent by such Lender and the Assignee, (ii) such Lender and its
Assignee have delivered to Borrower and Agent an Assignment and Acceptance in
form and substance satisfactory to Agent, and (iii) the
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assignor Lender or Assignee has paid to Agent for Agent's separate account a
processing fee in the amount of $5,000. Anything contained herein to the
contrary notwithstanding, the consent of Agent shall not be required (and
payment of any fees shall not be required) if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of such Lender.
(b) From and after the date that Agent notifies the
assignor Lender (with a copy to Borrower) that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except with respect to Section 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall affect
a novation between Borrower and the Assignee.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (1) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its obligations
under this Agreement or any other Loan Document furnished pursuant hereto, (3)
such Assignee confirms that it has received a copy of this Agreement, together
with such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance, (4) such Assignee will, independently and without reliance upon
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement, (5)
such Assignee appoints and authorizes Agent to take such actions and to exercise
such powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (6) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
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(d) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance and receipt and
acknowledgment by Agent of such fully executed Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time, with the written
consent of Agent, sell to one or more commercial banks, financial institutions,
or other Persons not Affiliates of such Lender (a "Participant") participating
or other beneficial interests ("Participating Interests") in its Obligations,
the Commitment, and the other rights and interests of that Lender (the
"Originating Lender") hereunder and under the other Loan Documents (provided
that no written consent of Agent shall be required in connection with any sale
of any such Participating Interests by a Lender to an Eligible Transferee);
provided, however, that (i) the Originating Lender shall remain a "Lender" for
all purposes of this Agreement and the other Loan Documents and the Participant
receiving the Participating Interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a "Lender" hereunder or under the other Loan Documents and the
Originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrower, Agent, and the Lenders shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any Participating
Interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is
participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or a
material portion of the Collateral or guaranties (except to the extent expressly
provided herein or in any of the Loan Documents) supporting the Obligations
hereunder in which such Participant has a Participating Interest, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) reduce the amount or due dates of
scheduled principal repayments or prepayments or premiums, and (v) all amounts
payable by Borrower under any of the Loan Documents (including, without
limitation, under Section 16.11) shall be determined as if such Lender had not
sold such participation, except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its Participating
Interest in amounts owing under this Agreement to the same extent as if the
amount of its Participating Interest were owing directly to it as a Lender under
this Agreement. The rights of any Participant only shall be derivative through
the Originating
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Lender with whom such Participant participates and no Participant shall have any
rights under this Agreement or the other Loan Documents or any direct rights as
to the other Lenders, Agent, Borrower, the Collections, the Collateral, or
otherwise in respect of the Obligations. No Participant shall have the right to
participate directly in the making of decisions by the Lenders among themselves.
(f) In connection with any such assignment or
Participating Interest or proposed assignment or Participating Interest, a
Lender may disclose all documents and information which it now or hereafter may
have relating to Borrower or Borrower's business, so long as such Lender has
first secured a customary confidentiality agreement from such proposed assignee
or Participant.
(g) Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
(h) Agent agrees to use its reasonable best efforts
from and after the date hereof to assign and delegate at least $10,000,000 of
its Total Commitment in accordance with the provisions hereof to a transferee
that is not an Affiliate of Foothill so as to reduce the Syndication Reserve.
13.3 SUCCESSORS. This Agreement shall bind and inure to the benefit of
the respective successors and permitted assigns of each of the parties;
provided, however, that Borrower may not assign this Agreement or any rights or
duties hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void ab initio. No consent to assignment by the
Lenders shall release Borrower from its Obligations. A Lender may assign this
Agreement and the other Loan Documents and its rights and duties hereunder and
thereunder pursuant to Section 14.1 hereof and, except as expressly required
pursuant to Section 14.1 hereof, no consent or approval by Borrower is required
in connection with any such assignment.
14. AMENDMENTS; WAIVERS.
14.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Borrower and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders affected thereby and
Borrower, do any of the following:
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(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement
or any other Loan Document for any payment of principal, interest, fees, or
other amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest
on, any loan or other extension of credit hereunder, or reduce any fees or other
amounts payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is
required to take any action hereunder,
(e) amend this Section or any provision of the
Agreement providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted by
Section 16.12,
(g) change the definition of "Required Lenders",
(h) contractually subordinate any of the Agent's Liens,
(i) other than in connection with a Permitted
Disposition or Permitted Swap, or in connection with a sale or other
dispositions by Agent pursuant to its remedies as a secured creditor, release
the Obligors from any obligation for the payment of money, or
(j) change the definition of Borrowing Base or the
definition of Maximum Revolver Amount, or change Section 2.1(b), or
(k) amend any of the provisions of Section 16.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrower, shall not require consent by or the agreement of Borrower.
14.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or
Agent hereunder requires the unanimous consent, authorization, or agreement of
all Lenders
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("Subject Action"), and a Lender ("Holdout Lender") fails to give its consent,
authorization, or agreement, then Agent or Borrower, upon at least 5 Business
Days prior irrevocable notice to the Holdout Lender, may permanently replace the
Holdout Lender with one or more substitute Lenders (each, a "Replacement
Lender"), and the Holdout Lender shall have no right to refuse to be replaced
hereunder; provided, however, that in the case of any Holdout Lender replaced by
Borrower, Subject Action must (i) have been requested in good faith and not for
the purpose of avoiding any premium or penalty of any kind whatsoever, and (ii)
have been approved by the Required Lenders; and, provided further, that Borrower
may not permanently replace Foothill as a Lender so long as Foothill is also
Agent. Such notice to replace the Holdout Lender shall specify an effective date
for such replacement, which date shall not be later than 15 Business Days after
the date such notice is given. Notwithstanding the foregoing, Borrower shall
have the right to permanently replace any Holdout Lender at any time (including
Agent) so long as any and all applicable premiums or penalties are paid by
Borrower to such Holdout Lender in connection therewith. Borrower shall be
entitled to rely on any written representation by Agent that the unanimous
consent, authorization, or agreement of all Lenders has been obtained with
respect to any Subject Action.
(b) Prior to the effective date of such replacement,
the Holdout Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance Agreement, subject only to the Holdout Lender being
repaid its share of the outstanding Obligations (including an assumption of its
Pro Rata Share of the Risk Participation Liability) without any premium or
penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to
execute and deliver any such Assignment and Acceptance Agreement prior to the
effective date of such replacement, the Holdout Lender shall be deemed to have
executed and delivered such Assignment and Acceptance Agreement. The replacement
of any Holdout Lender shall be made in accordance with the terms of Section
14.1. Until such time as the Replacement Lenders shall have acquired all of the
Obligations, the Commitments, and the other rights and obligations of the
Holdout Lender hereunder and under the other Loan Documents, the Holdout Lender
shall remain obligated to make the Holdout Lender's Pro Rata Share of Advances
and to purchase a participation in each Letter of Credit, in an amount equal to
its Pro Rata Share of the Risk Participation Liability of such Letter of Credit.
14.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent's and each Lender's rights thereafter to require strict
performance by Borrower of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
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15. AGENT; THE LENDER GROUP.
15.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints Foothill as its representative under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 16.
Except for the provisions of Sections 16.11, 16.12, and 16.17(d) below, the
provisions of this Section 16 are solely for the benefit of Agent, and the
Lenders, and Borrower shall have no rights as a third party beneficiary of any
of the provisions contained herein. Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that Foothill
is merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections, and related matters, (b) execute or file any and all financing
or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the proceeds of the Collections as provided in the Loan Documents, (e) open and
maintain such bank accounts and cash management arrangements as Agent deems
necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections, (f)
perform, exercise, and enforce any and all other rights and remedies of the
Lender Group with respect to Borrower, the Obligations, the Collateral, the
Collections, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
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15.2 DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
15.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by Borrower or any Subsidiary or
Affiliate of Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Books or properties of Borrower or the books or
records or properties of any of Borrower's Subsidiaries or Affiliates.
15.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrower
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from acting,
under this Agreement or any other Loan Document in accordance with a request or
consent of the Lenders and such request and any action taken or failure to act
pursuant thereto shall be binding upon all of the Lenders.
15.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with
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respect to defaults in the payment of principal, interest, fees, and expenses
required to be paid to Agent for the account of the Lenders, except with respect
to Events of Default of which Agent has actual knowledge, unless Agent shall
have received written notice from a Lender or Borrower referring to this
Agreement, describing such Default or Event of Default, and stating that such
notice is a "notice of default." Agent promptly will notify the Lenders of its
receipt of any such notice or of any Event of Default of which Agent has actual
knowledge. If any Lender obtains actual knowledge of any Event of Default, such
Lender promptly shall notify the other Lenders and Agent of such Event of
Default. Each Lender shall be solely responsible for giving any notices to its
Participants, if any. Subject to Section 16.4, Agent shall take such action with
respect to such Default or Event of Default as may be requested by the Required
Lenders in accordance with Section 9; provided, however, that unless and until
Agent has received any such request, Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
15.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrower
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person (other than the Lender Group)
party to a Loan Document, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person (other than the Lender Group)
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of Borrower and any other
Person party to a Loan Document that may come into the possession of any of the
Agent-Related Persons.
15.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, reasonable
attorneys fees and expenses, costs of collection
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by outside collection agencies and auctioneer fees and costs of security guards
or insurance premiums paid to maintain the Collateral, whether or not Borrower
is obligated to reimburse Agent or Lenders for such expenses pursuant to the
Loan Agreement or otherwise. Agent is authorized and directed to deduct and
retain sufficient amounts from proceeds of Collections received by Agent to
reimburse Agent for such out-of-pocket costs and expenses prior to the
distribution of any amounts to Lenders. In the event Agent is not reimbursed for
such costs and expenses from proceeds of Collections received by Agent, each
Lender hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender's Pro Rata Share thereof. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of Borrower and without limiting the obligation of Borrower to do so),
according to their Pro Rata Shares, from and against any and all Indemnified
Liabilities; provided, however, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder. Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for
such Lender's ratable share of any costs or out-of-pocket expenses (including
attorneys fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
15.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrower and its
Subsidiaries and Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents as though Foothill were not Agent hereunder, and, in
each case, without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, Foothill or its Affiliates may receive information regarding
Borrower or its Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents that is subject to confidentiality obligations in
favor of Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include Foothill in its individual capacity.
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15.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to
the Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective Affiliates
may make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity interests in and generally engage in any kind of banking,
trust, financial advisory, underwriting or other business with Borrower and its
Subsidiaries and Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents as though such Lender were not a Lender hereunder
without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge that, pursuant to such activities, such
Lender and its respective Affiliates may receive information regarding Borrower
or its Affiliates and any other Person (other than the Lender Group) party to
any Loan Documents that is subject to confidentiality obligations in favor of
Borrower or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender not shall be under any obligation to provide such
information to them. With respect to the Swing Loans and Agent Advances, Swing
Lender shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the sub-agent of Agent.
15.10 WITHHOLDING TAXES.
(a) If any Lender is a Foreign Person and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the IRC, such Lender agrees with and in favor of Agent and Borrower, to
deliver to Agent and Borrower:
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(i) if such Lender claims an exemption from withholding tax
pursuant to its portfolio interest exception described in Section 871(h)
or 881(c) of the IRC, (a) a statement of the Lender, signed under
penalty of perjury, that it is not a (I) a "bank" as described in
Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder (within the
meaning of Section 881(c)(3)(B) of the IRC), or (III) a controlled
foreign corporation described in Section 881(c)(3)(C) of the IRC, and
(b) a properly completed IRS Form W-8BEN, before the first payment of
any interest under this Agreement and at any other time reasonably
requested by Agent or Borrower;
(ii) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, a properly
completed IRS Form W-8BEN before the first payment of any interest under
this Agreement and at any other time reasonably requested by Agent or
Borrower;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form W-8ECI
before the first payment of any interest is due under this Agreement and
at any other time reasonably requested by Agent or Borrower;
(iv) such other form or forms as may be required under the IRC
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction and, if an exemption or reduction of U.S. withholding tax under
Sections 1441 or 1442 of the IRC is available under such changed circumstances,
to provide any statement or form required to establish any such exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of, U.S.
withholding tax under Sections 1441 or 1442 of the IRC and such Lender sells,
assigns, grants a participation in, or otherwise transfers all or part of its
beneficial ownership interest in the Obligations of Borrower to such Lender,
such Lender agrees to promptly notify Agent and Borrower of the percentage
amount in which it is no longer the beneficial owner of Obligations of Borrower
to such Lender. To the extent of such percentage amount, Agent and Borrower will
treat statements or forms previously provided by such Lender pursuant to this
Section 16.11 as no longer valid.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the
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forms or other documentation required by subsection (a) of this Section 16.11
are not delivered to Agent or Borrower or are no longer valid, then Agent and
Borrower may withhold from any interest payment to such Lender not providing
such forms or other documentation, or in respect of whom such forms or other
documentation, although provided, are or have become wholly or partially
invalid, an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of Agent.
(e) All payments made by Borrower hereunder or under any note
will be made without setoff, counterclaim, or other defense, except as required
by applicable law other than for Taxes (as defined below). All such payments
will be made free and clear of, and without deduction or withholding for, any
present or future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any jurisdiction (other
than the United States) or by any political subdivision or taxing authority
thereof or therein (other than a political subdivision or taxing authority of or
in the United States) with respect to such payments (but excluding, any tax (and
any interest, penalties or similar liabilities with respect thereto) imposed by
any jurisdiction or by any political subdivision or taxing authority thereof or
therein (i) measured by or based on the net income or net profits of a Lender
(including any franchise, branch profits or similar taxes), or (ii) to the
extent that such tax results from a change in the circumstances of the Lender,
including a change in the residence, place of organization, or principal place
of business of the Lender, or a change in the branch or lending office of the
Lender participating in the transactions set forth herein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed,
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any note, including any amount paid pursuant to this Section
16.11(e) after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein; provided, however, that Borrower
shall not be required to increase any such amounts payable to Agent or any
Lender (i) if such Person fails to comply with any requirements under this
Section 16.11 to establish an exemption from or reduction of any Tax, or (ii) if
the
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increase in such amount payable results from Agent's or such Lender's own
willful misconduct or gross negligence. Borrower will furnish to Agent as
promptly as possible after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by
Borrower.
15.11 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Borrower of all Obligations, (ii) constituting property being sold or disposed
of if a release is required or desirable in connection therewith and if Borrower
certifies to Agent that the sale or disposition is permitted under Section 7.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which Borrower owned no interest at the time the security interest was
granted or at any time thereafter, or (iv) constituting property leased to
Borrower under a lease that has expired or is terminated in a transaction
permitted under this Agreement. Except as provided above, Agent will not execute
and deliver a release of any Lien on any Collateral without the prior written
authorization of (y) if the release is of all or substantially all of the
Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon
request by Agent or Borrower at any time, the Lenders will confirm in writing
Agent's authority to release any such Liens on particular types or items of
Collateral pursuant to this Section 16.12; provided, however, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrower in respect of)
all interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Borrower or is cared
for, protected, or insured or has been encumbered, or that the Agent's Liens
have been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the Lenders and that
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing, except as otherwise provided herein.
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15.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to Borrower or any deposit accounts of Borrower
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by Agent, take or
cause to be taken any action, including, the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral the purpose of which is, or could
be, to give such Lender any preference or priority against the other Lenders
with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
15.13 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as
its agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver such Collateral to Agent or
in accordance with Agent's instructions.
15.14 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify
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whether such payment (or any portion thereof) represents principal, premium, or
interest of the Obligations.
15.15 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member
of the Lender Group authorizes and directs Agent to enter into this Agreement
and the other Loan Documents relating to the Collateral, for the benefit of the
Lender Group. Each member of the Lender Group agrees that any action taken by
Agent in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by Agent of its powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
15.16 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by
Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i)
make any representation or warranty as to the accuracy of any Report, and (ii)
shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrower
and will rely significantly upon the Books, as well as on representations of
Borrower's personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Borrower and its Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner;
it being understood and agreed by Borrower that in any event such Lender may
make disclosures (a) to counsel for and other advisors, accountants, and
auditors to such Lender, (b) reasonably required by any bona fide potential or
actual Assignee or Participant in connection with any contemplated or actual
assignment or transfer by such Lender of an interest herein or any Participating
Interest in such Lender's rights hereunder, so long as such Lender has first
secured a customary confidentiality agreement from such potential or actual
Assignee or Participant, (c) of information that has become public by
disclosures made by Persons other than such Lender, its Affiliates, assignees,
transferees, or Participants, or (d) as required or requested by any court,
governmental or administrative agency, pursuant to any subpoena or other legal
process, or by any law, statute, regulation, or court order; provided, however,
that, unless prohibited by applicable law, statute, regulation, or court order,
such Lender shall notify Borrower of any request by any court, governmental or
administrative agency, or pursuant to
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any subpoena or other legal process for disclosure of any such non-public
material information concurrent with, or where practicable, prior to the
disclosure thereof, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrower, and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent that has not been contemporaneously
provided by Borrower to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrower, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender's notice to Agent, whereupon Agent promptly shall request of Borrower the
additional reports or information reasonably specified by such Lender, and, upon
receipt thereof from Borrower, Agent promptly shall provide a copy of same to
such Lender, and (z) any time that Agent renders to Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.
15.17 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain
of the Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to Borrower or
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any other Person for any failure by any other Lender to fulfill its obligations
to make credit available hereunder, nor to advance for it or on its behalf in
connection with its Commitment, nor to take any other action on its behalf
hereunder or in connection with the financing contemplated herein.
15.18 LEGAL REPRESENTATION OF AGENT. In connection with the
negotiation, drafting, and execution of this Agreement and the other Loan
Documents, or in connection with future legal representation relating to loan
administration, amendments, modifications, waivers, or enforcement of remedies,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇") only has represented and only shall
represent Foothill in its capacity as Agent and as a Lender. Each other Lender
hereby acknowledges that ▇▇▇▇▇▇▇ does not represent it in connection with any
such matters.
16. GENERAL PROVISIONS.
16.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrower, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
16.2 SECTION HEADINGS. Headings and numbers have been set forth herein
for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
16.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrower,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
16.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
16.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing signed by Agent (on behalf of the requisite Lenders) and Borrower.
16.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an
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executed counterpart of this Agreement by telefacsimile also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan
Document mutatis mutandis.
16.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by the Obligors or the transfer to the Lender Group
of any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of the
Obligors automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
16.8 FCC APPROVALS. Notwithstanding anything herein or in any of the
Loan Documents to the contrary, but without limiting or waiving in any way
Borrower's obligations under this Agreement or the other Loan Documents, the
Lender Group's rights hereunder and under the Loan Documents are subject to the
Communications Act of 1934, as amended, and all applicable policies, rules and
regulations of the FCC. Agent and the Lenders will not take any action pursuant
to this Agreement or the Loan Documents which would constitute or result in any
assignment or transfer of control of any FCC License, whether de jure or de
facto, if such assignment or transfer of control would require under the then
existing law (including the Communications Act of 1934, as amended, and the
published policies, rules and regulations promulgated by the FCC), the prior
approval of the FCC, without first obtaining such approval.
16.9 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and thereby and shall not be contradicted or
qualified by any other agreement, oral or written, before the date hereof.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered as of the date first above written.
ACME TELEVISION, LLC,
a Delaware limited liability company
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: Executive Vice President and CFO
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By:
Title:
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule P-1 Permitted Investments
Schedule P-2 Permitted Liens
Schedule R-1 Real Property Collateral
Schedule 2.7(a) Cash Management Banks
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7 Chief Executive Office; FEIN
Schedule 5.8(b) Capitalization of Borrower
Schedule 5.8(c) Capitalization of Borrower's Subsidiaries
Schedule 5.9 Governmental Consents
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.17 Tower Leases and Key Leases
Schedule 5.18 Demand Deposit Accounts
Schedule 5.20 Permitted Indebtedness
Schedule 5.21 Licenses
Schedule 5.27 Signal Carriage
Schedule 5.23 LMAs
Schedule 7.14 Transactions with Affiliates
SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as the
account into which Borrower shall make all payments to Agent for the benefit of
the Lender Group and into which the Lender Group shall make all payments to
Agent under this Agreement and the other Loan Documents; unless and until Agent
notifies Borrower and the Lender Group to the contrary, Agent's Account shall be
that certain deposit account bearing account number 323-266193 and maintained by
Agent with JPMorgan Chase Bank, ▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ABA #▇▇▇▇▇▇▇▇▇.
SCHEDULE C-1
COMMITMENTS
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LENDER REVOLVER COMMITMENT TOTAL COMMITMENT
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Foothill Capital $40,000,000 $40,000,000
Corporation
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All Lenders $40,000,000 $40,000,000
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