EXECUTION COPY
AMENDED AND RESTATED LOAN AGREEMENT
by and among
▇▇▇▇ COMMUNICATIONS SYSTEMS, INC.,
as Borrower,
NATIONSBANK, N.A.,
as Syndication Agent and Administrative Agent,
KEY CORPORATE CAPITAL INC.,
as Documentation Agent,
and
THE FINANCIAL INSTITUTIONS LISTED HEREIN
as of July 31, 1998
with
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC,
as Lead Arranger.
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP,
Atlanta, Georgia
TABLE OF CONTENTS
PAGE
----
SECTION 1. DEFINITIONS.......................................................2
1.1 DEFINITIONS............................................................2
1.2 OTHER TERMS...........................................................18
1.3 ACCOUNTING PROVISIONS.................................................19
SECTION 2. THE LOANS AND THE LETTERS OF CREDIT..............................19
2.1 THE REVOLVING COMMITMENT AND THE REVOLVING LOANS......................19
2.2 THE TERM COMMITMENT AND THE TERM LOANS................................21
2.3 LETTER OF CREDIT......................................................21
2.4 MAKING AND CONTINUATION/CONVERSION OF THE LOANS.......................25
2.5 THE NOTES.............................................................26
2.6 FEES..................................................................27
2.7 PREPAYMENT............................................................27
2.8 RESERVES OR DEPOSIT REQUIREMENTS, ETC.................................29
2.9 TAX LAW, INCREASED COSTS, ETC.........................................29
2.10 EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE....30
2.11 CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL.......................30
2.12 FUNDING.............................................................30
2.13 INDEMNITY...........................................................30
2.14 CAPITAL ADEQUACY....................................................31
2.15 TAXES...............................................................31
2.16 INCREMENTAL COMMITMENT..............................................32
SECTION 3. INTEREST; PAYMENTS...............................................32
3.1 INTEREST..............................................................32
3.2 MANNER OF PAYMENTS....................................................33
SECTION 4. CLOSING..........................................................34
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER...................34
5.1 ORGANIZATION AND POWERS TAXES.........................................34
5.2 AUTHORIZATION.........................................................35
5.3 FINANCIAL STATEMENTS..................................................35
5.4 PROJECTIONS...........................................................36
5.5 CAPITALIZATION OF THE BORROWER AND ITS SUBSIDIARIES...................36
5.6 TITLE TO PROPERTIES; PATENTS, TRADEMARKS, ETC.........................36
5.7 LITIGATION; PROCEEDINGS...............................................37
5.8 TAXES.................................................................37
5.9 ABSENCE OF CONFLICTS..................................................38
5.10 INDEBTEDNESS........................................................38
5.11 COMPLIANCE..........................................................38
5.12 STATEMENTS NOT MISLEADING...........................................39
5.13 CONSENTS OR APPROVALS...............................................39
5.14 MATERIAL CONTRACTS AND COMMITMENTS..................................39
5.15 EMPLOYEE BENEFIT PLANS..............................................40
5.16 LICENSES AND OPERATING AGREEMENTS...................................40
5.17 MATERIAL RESTRICTIONS...............................................41
5.18 INVESTMENT COMPANY ACT..............................................41
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5.19 ABSENCE OF MATERIAL ADVERSE EFFECT..................................41
5.20 DEFAULTS............................................................41
5.21 REAL ESTATE.........................................................41
5.22 SECURITIES LAWS.....................................................41
5.23 INSURANCE...........................................................42
5.24 LABOR MATTERS.......................................................42
5.25 ENVIRONMENTAL COMPLIANCE............................................42
5.26 SOLVENCY............................................................44
5.27 ▇▇▇▇▇ PURCHASE AGREEMENT, SUBORDINATED NOTE INDENTURE AND
REGISTRATION STATEMENTS.............................................45
5.28 LICENSE SUBSIDIARIES................................................46
5.29 YEAR 2000 COMPLIANCE................................................46
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS.................46
6.1 COMPLIANCE............................................................46
6.2 SECURITY AGREEMENTS...................................................48
6.3 PLEDGE AGREEMENTS.....................................................48
6.4 REAL ESTATE MATTERS...................................................48
6.5 FINANCING STATEMENTS..................................................50
6.6 SUBSIDIARY GUARANTY...................................................50
6.7 OPINION OF BORROWER'S COUNSEL.........................................50
6.8 CONSUMMATION OF ▇▇▇▇▇ PURCHASE AGREEMENT..............................51
6.9 SUBORDINATED NOTES....................................................51
6.10 PAYMENT OF EXISTING INDEBTEDNESS....................................51
6.11 FINANCIAL INFORMATION...............................................51
6.12 ENGINEER'S REPORT...................................................52
6.13 DUE DILIGENCE.......................................................52
6.14 BORROWING REQUEST...................................................52
6.15 INSURANCE CERTIFICATES..............................................52
6.16 CORPORATE DOCUMENTS.................................................53
6.17 LIEN SEARCHES, CONSENTS AND RELEASES OF LIENS.......................53
6.18 NO ORDER, JUDGMENT OR DECREE........................................53
6.19 NO MATERIAL ADVERSE EFFECT..........................................53
6.20 FEE LETTER; FEES AND EXPENSES.......................................54
6.21 LEGAL APPROVAL......................................................54
6.22 OTHER DOCUMENTS.....................................................54
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER............................54
7.1 USE OF PROCEEDS.......................................................54
7.2 CONTINUED EXISTENCE; MAINTENANCE OF RIGHTS AND LICENSES; COMPLIANCE
WITH LAW..............................................................54
7.3 INSURANCE.............................................................55
7.4 OBLIGATIONS AND TAXES.................................................55
7.5 FINANCIAL STATEMENTS AND REPORTS......................................56
7.6 NOTICES...............................................................58
7.7 MAINTENANCE OF PROPERTY...............................................59
7.8 INFORMATION AND INSPECTION............................................59
7.9 MAINTENANCE OF LIENS..................................................59
7.10 TITLE TO PROPERTY...................................................60
7.11 ENVIRONMENTAL COMPLIANCE AND INDEMNITY..............................60
7.12 RATE HEDGING OBLIGATIONS............................................61
7.13 FCC CONSENTS........................................................61
7.14 APPRAISALS..........................................................62
7.15 REAL ESTATE.........................................................62
7.16 YEAR 2000 COMPLIANCE................................................62
7.17 COVENANTS REGARDING FORMATION OF SUBSIDIARIES AND ACQUISITIONS......62
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SECTION 8. NEGATIVE COVENANTS OF THE BORROWER...............................63
8.1 INDEBTEDNESS..........................................................63
8.2 LIENS.................................................................63
8.3 GUARANTIES............................................................64
8.4 RENTAL AND CONDITIONAL SALE OBLIGATIONS...............................64
8.5 REAL PROPERTY INTERESTS...............................................64
8.6 CAPITALIZED LEASE OBLIGATIONS.........................................64
8.7 NOTES, ACCOUNTS RECEIVABLE AND CLAIMS.................................65
8.8 CAPITAL DISTRIBUTIONS; RESTRICTIONS ON PAYMENTS TO STOCKHOLDERS.......65
8.9 DISPOSAL OF PROPERTY; MERGERS; ACQUISITIONS; REORGANIZATIONS..........65
8.10 INVESTMENTS.........................................................68
8.11 AMENDMENT OF GOVERNING DOCUMENTS....................................69
8.12 FINANCIAL COVENANTS.................................................69
8.13 MANAGEMENT AGREEMENTS AND FEES......................................70
8.14 FISCAL YEAR.........................................................70
8.15 ERISA...............................................................70
8.16 AFFILIATES..........................................................71
8.17 CHANGE OF NAME, IDENTITY OR CORPORATE STRUCTURE.....................71
8.18 AMENDMENTS OR WAIVERS...............................................71
8.19 ISSUANCE OR TRANSFER OF CAPITAL STOCK AND OTHER EQUITY INTERESTS....71
8.20 CHANGE IN BUSINESS..................................................72
8.21 REGULATION U........................................................72
8.22 LICENSE SUBSIDIARIES................................................72
8.23 SUBORDINATED DEBT...................................................72
SECTION 9. EVENTS OF DEFAULT................................................73
9.1 NON-PAYMENT...........................................................73
9.2 FAILURE OF PERFORMANCE IN RESPECT OF OTHER OBLIGATIONS................73
9.3 BREACH OF WARRANTY....................................................73
9.4 CROSS-DEFAULTS........................................................73
9.5 ASSIGNMENT FOR BENEFIT OF CREDITORS...................................74
9.6 BANKRUPTCY............................................................74
9.7 APPOINTMENT OF RECEIVER; LIQUIDATION..................................74
9.8 JUDGMENTS.............................................................74
9.9 IMPAIRMENT OF COLLATERAL; INVALIDATION OF ANY LOAN DOCUMENT...........74
9.10 TERMINATION OF LICENSE OR OPERATING AGREEMENT.......................75
9.11 CHANGE OF CONTROL...................................................75
9.12 CONDEMNATION........................................................76
9.13 CESSATION OF OPERATIONS.............................................76
9.14 SUBORDINATION.......................................................76
9.15 MATERIAL ADVERSE EFFECT.............................................76
SECTION 10. REMEDIES........................................................76
10.1 OPTIONAL DEFAULTS...................................................76
10.2 AUTOMATIC DEFAULTS..................................................77
10.3 PERFORMANCE BY THE BANKS............................................77
10.4 OTHER REMEDIES......................................................77
10.5 ENFORCEMENT AND WAIVER BY THE BANKS.................................77
SECTION 11. THE ADMINISTRATIVE AGENT........................................78
11.1 APPOINTMENT.........................................................78
11.2 POWERS..............................................................78
11.3 GENERAL IMMUNITY....................................................78
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11.4 ACTION ON INSTRUCTIONS OF THE BANKS.................................79
11.5 EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL.....................79
11.6 RELIANCE ON DOCUMENTS; COUNSEL......................................79
11.7 ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION............79
11.8 RIGHTS AS A BANK....................................................80
11.9 BANK CREDIT DECISION................................................80
11.10 SUCCESSOR ADMINISTRATIVE AGENT......................................80
11.11 RATABLE SHARING.....................................................81
11.12 ACTIONS BY THE ADMINISTRATIVE AGENT AND THE BANKS...................81
SECTION 12. MISCELLANEOUS...................................................81
12.1 CONSTRUCTION........................................................81
12.2 FURTHER ASSURANCE...................................................82
12.3 EXPENSES OF THE ADMINISTRATIVE AGENT AND THE BANKS; INDEMNIFICATION.82
12.4 NOTICES.............................................................83
12.5 WAIVER AND RELEASE BY THE BORROWER..................................85
12.6 RIGHT OF SET OFF....................................................85
12.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS..............................85
12.8 APPLICABLE LAW......................................................87
12.9 ENFORCEMENT.........................................................88
12.10 JURY TRIAL WAIVER...................................................88
12.11 BINDING EFFECT AND ENTIRE AGREEMENT.................................89
12.12 COUNTERPARTS........................................................89
12.13 SURVIVAL OF AGREEMENTS..............................................89
12.14 MODIFICATION........................................................89
12.15 SEPARABILITY........................................................90
12.16 SECTION HEADINGS....................................................90
12.17 TERMINATION.........................................................90
12.18 FCC COMPLIANCE......................................................91
12.19 MARSHALING; PAYMENTS SET ASIDE......................................91
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EXHIBITS
Exhibit A - Form of Borrower Security Agreement
Exhibit B - Form of Borrower Pledge Agreement
Exhibit C - Form of Subsidiary Guaranty
Exhibit D - Form of Subsidiary Pledge Agreement
Exhibit E - Form of Subsidiary Security Agreement
Exhibit F - Form of Revolving Note
Exhibit G - Form of Term Note
Exhibit H - Form of Compliance Certificate
SCHEDULES
Schedule 1 - Permitted Liens
Schedule 2 - Ratable Share and Notice Addresses
Schedule 3 - Subsidiaries
Schedule 4 - Capitalization
Schedule 5 - Litigation
Schedule 6 - Permitted Indebtedness
Schedule 7 - Compliance Issues
Schedule 8 - Material Contracts
Schedule 9 - Employee Benefit Plans
Schedule 10 - Licenses
Schedule 11 - Real Estate
Schedule 12 - Environmental Problems
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AMENDED AND RESTATED LOAN AGREEMENT
-----------------------------------
THIS AMENDED AND RESTATED LOAN AGREEMENT is made and entered into as of
July 31, 1998, by and among ▇▇▇▇ COMMUNICATIONS SYSTEMS, INC., a Georgia
corporation (the "Borrower"), the FINANCIAL INSTITUTIONS listed on the signature
pages hereof (the "Banks"), NATIONSBANK, N.A., as syndication agent (the
"Syndication Agent"), KEY CORPORATE CAPITAL INC., as documentation agent (the
"Documentation Agent") and NATIONSBANK, N.A., as administrative agent (the
"Administrative Agent") for the Banks, the Syndication Agent, and the
Documentation Agent.
WITNESSETH:
----------
WHEREAS, the Borrower, Key Corporate Capital Inc., as Agent (as defined in
the Prior Loan Agreement defined below), and NationsBank, N.A., as Co-Agent (as
defined in the Prior Loan Agreement defined below), and the Banks are all
parties to the Prior Loan Agreement (as hereinafter defined); and
WHEREAS, the Borrower has requested that the Administrative Agent, the
Documentation Agent and the Banks consent to certain amendments to the Prior
Loan Agreement, as more fully set forth in this Amended and Restated Loan
Agreement; and
WHEREAS, the Administrative Agent and the Banks have agreed to amend and
restate the Prior Loan Agreement in its entirety as set forth herein; and
WHEREAS, the Borrower acknowledges and agrees that the security interest
granted to the Agent (as defined in the Prior Loan Agreement), for itself and on
behalf of the Banks pursuant to the Prior Loan Agreement and the Collateral
Documents (as defined in the Prior Loan Agreement) executed in connection
therewith shall remain outstanding and in full force and effect in accordance
with the Prior Loan Agreement and shall continue to secure the Obligations (as
defined herein); and
WHEREAS, the Borrower acknowledges and agrees that (i) the Obligations (as
hereinafter defined) represent, among other things, the amendment, restatement,
renewal, extension, consolidation and modification of the Obligations (as
defined in the Prior Loan Agreement) arising in connection with the Prior Loan
Agreement and the other Collateral Documents executed in connection therewith;
(ii) the parties hereto intend that the Prior Loan Agreement and the other
Collateral Documents executed in connection therewith and the collateral pledged
thereunder shall secure, without interruption or impairment of any kind, all
existing Indebtedness under the Prior Loan Agreement and the other Collateral
Documents executed in connection therewith as so amended, restated,
restructured, renewed, extended, consolidated and modified hereunder, together
with all other Obligations hereunder, (iii) all Liens evidenced by the Prior
Loan Agreement and the other Collateral Documents executed in connection
therewith are hereby ratified, confirmed and continued; and (iv) the Loan
Documents (as hereinafter defined) are intended to restructure, restate, renew,
extend, consolidate, amend
and modify the Prior Loan Agreement and the other Collateral Documents executed
in connection therewith; and
WHEREAS, the parties hereto intend that (i) the provisions of the Prior
Loan Agreement and the other Collateral Documents executed in connection
therewith, to the extent restructured, restated, renewed, extended,
consolidated, amended and modified hereby, are hereby superseded and replaced by
the provisions hereof and of the Loan Documents; and (ii) the Notes (as
hereinafter defined) amend, renew, extend, modify, replace, are substituted for
and supersede in their entirety, but do not extinguish the indebtedness arising
under, the promissory notes issued pursuant to the Prior Loan Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties hereto, the
parties hereby amend and restate the Prior Loan Agreement as follows:
SECTION 1 DEFINITIONS.
1.1 Definitions. All terms typed with leading capitals are terms defined
in this Agreement. For the purposes of this Agreement, the terms defined in this
Section 1 shall have the meanings set out below.
"Adjusted Leverage Ratio" shall mean, as of any date, the ratio of (a) the
difference between (i) Total Debt as of such date, minus (ii) the aggregate
amount of the Borrower's cash and marketable securities on hand, not to exceed
$5,000,000 to (b) Operating Cash Flow for the four (4) quarter period then ended
or most recently ended.
"Administrative Agent" shall mean NationsBank, N.A., in its capacity as
Administrative Agent for the Banks or any successor Administrative Agent
appointed pursuant to Section 11.10.
"Administrative Agent's Office" shall mean the office of the
Administrative Agent located at NationsBank, N.A., Agency Services,
NC1-001-15-04, Independence Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other office as may be designated pursuant to Section
12.4.
"Affiliate" means, with respect to any Person (a) any other Person which
is directly or indirectly controlled by, under common control with or
controlling the first specified Person; (b) a Person owning beneficially or
controlling ten percent (10%) or more of the equity interest in such other
Person; (c) any officer, director or partner of such other Person; or (d) any
spouse or relative (by blood, adoption or marriage) of any such individual
Person. The term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person whether through the ownership of voting securities, partnership
interests, by contract or otherwise.
2
"Applicable Margin" means, as of any date of determination, the percentage
determined from the following table based upon the Leverage Ratio:
Applicable Margin Applicable Margin
Leverage Ratio: for Base Rate Loans: for LIBOR Loans:
--------------- -------------------- ----------------
Greater than 6.5:1.0. 0.500% 2.250%
Greater than 6.00:1.0,
but less than or equal to
6.50:1.0. 0.250% 2.00%
Greater than 5.50:1.0,
but less than or equal to
6.00:1.0. 0.000% 1.750%
Greater than 5.00:1.0,
but less than or equal to
5.50:1.0. 0.000% 1.500%
Greater than 4.50:1.0 but
less than or equal to
5.00:1.0 0.00% 1.250%
Greater than 4.00:1.0,
but less than or equal to
4.50:1.0. 0.000% 1.000%
Less than or equal to
4.0:1.0. 0.000% 0.750%
"Asset Sale" means the sale by the Borrower or any of its Subsidiaries to
any Person of any of the stock, partnership interests or other equity interests
of any Subsidiary or any other assets of the Borrower or any Subsidiary, other
than (a) the sale of assets in one transaction or a series of transactions with
an aggregate value which does not exceed $300,000 in any fiscal year and (b) the
sale in the ordinary course of business of assets held for resale in the
ordinary course of business or the trade in or replacement of assets in the
ordinary course of business.
"Banking Day" means a day on which the office of the Administrative Agent
in Charlotte, North Carolina is open to the public for the transaction of
business, and on which, with respect to any LIBOR Loan, banks are open for
business in London, England, and quoting deposit rates for dollar deposits.
"Banks" means the financial institutions listed on the signature pages of
this Agreement and their respective successors and assigns; the term "Banks"
shall include the Issuing Bank.
"Base Rate" means the rate of interest determined and publicly announced
by the Administrative Agent from time to time as its "prime rate" at the
Administrative Agent's Office. The prime rate functions as a reference rate
index, and the Administrative Agent may charge
3
borrowers more or less than the prime rate. The Base Rate will automatically
change as and when such prime rate changes.
"Base Rate Loans" means those Loans described in Sections 2.1 and 2.2 on
which the Borrower shall pay interest at a rate based on the Base Rate.
"Benefit Arrangement" means any pension, profit-sharing, thrift or other
retirement plan, medical, hospitalization, vision, dental, life, disability or
other insurance or benefit plan, deferred compensation, stock ownership, stock
purchase, stock option, performance share, bonus, fringe benefit, savings or
other incentive plan, severance plan or other similar plan, agreement,
arrangement or understanding, to which the Borrower or any member of the
Controlled Group is, or in the preceding six (6) years was, required to
contribute on behalf of its employees or directors, whether or not such plan,
agreement, arrangement or understanding is subject to ERISA.
"Borrower" means ▇▇▇▇ Communications Systems, Inc., a Georgia
corporation.
"Borrower Pledge Agreement" means, collectively, that certain Amended and
Restated Borrowers Pledge Agreement dated as of July 31, 1998, between the
Borrower and the Administrative Agent, or any supplement, in form and substance
satisfactory to the Administrative Agent, thereto, or any other similar
agreement substantially in the form of Exhibit A attached hereto, pursuant to
which the Borrower has pledged to the Administrative Agent, for itself and on
behalf of the Banks, all of the Borrower's Capital Stock in any Subsidiaries
existing on the Agreement Date or formed or acquired by the Borrower after the
Agreement Date.
"Borrower Security Agreement" means, collectively, that certain Amended
and Restated Borrower Security Agreement dated as of July 31, 1998 between the
Borrower and the Administrative Agent, or any supplement in form and substance
satisfactory to the Administrative Agent, thereto, or any other similar
agreement substantially in the form of Exhibit B attached hereto.
"▇▇▇▇▇ Bonds" means those certain 11 5/8% Senior Secured Notes due 2000
issued by ▇▇▇▇▇ Broadcasting on October 26, 1995.
"▇▇▇▇▇ Broadcasting" means ▇▇▇▇▇ Broadcasting Corporation, a Delaware
corporation.
"▇▇▇▇▇ Purchase Agreement" means that certain Amended and Restated Stock
Purchase Agreement by and among ▇▇▇▇▇ Broadcasting, South Street (Corporate),
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇), ▇▇▇▇▇ ▇▇▇▇▇▇ (International), and the
Borrower, dated as of June 22, 1998.
"▇▇▇▇▇ Sellers" means, collectively, ▇▇▇▇▇ Broadcasting, South Street
(Corporate), Greycliff, South Street (Leveraged) and South Street
(International).
4
"Capital Distribution" means any dividend, payment or distribution made,
liability incurred or other consideration given for the purchase, acquisition,
redemption or retirement of any stock, partnership interest or other equity
interest of the Borrower or any of its Subsidiaries or as a dividend, return of
capital or other payment or distribution of any kind to a shareholder or partner
of the Borrower or any of its Subsidiaries in respect of the Borrower's or such
Subsidiary's stock or partnership interests; provided, however, that any
dividend or other distribution with respect to any class of Capital Stock paid
or made in such class of Capital Stock shall not constitute a "Capital
Distribution" for purposes of this Agreement.
"Capital Expenditures" means any payments by the Borrower or any of its
Subsidiaries for or in connection with the rental, lease, purchase, construction
or use of any real or personal property the value or cost of which, under GAAP,
should be capitalized and appear on the Borrower's or such Subsidiary's balance
sheet in the category of property, plant or equipment, without regard to the
manner in which such payments or the instrument pursuant to which they are made
are characterized by the Borrower or such Subsidiary or any other Person;
provided, however, that neither (a) the capitalized portion of the purchase
price payable in connection with the ▇▇▇▇▇ Purchase Agreement or a Permitted
Acquisition, nor (b) expenditures of proceeds of casualty insurance policies
reasonably and promptly applied to replace insured assets, shall constitute a
Capital Expenditure for purposes of this Agreement.
"Capital Stock" means, as applied to any Person, any capital stock of such
Person, regardless of class or designation, and all warrants, options, purchase
rights, conversion or exchange rights, voting rights, calls or claims of any
character with respect thereto.
"Capitalized Lease Obligations" means the obligations of the Borrower or
any of its Subsidiaries to pay rent or other amounts under leases of, or other
agreements conveying the right to use real or personal property, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of the Borrower or such Subsidiary, prepared in accordance with
GAAP.
"Closing" and "Closing Date" have the meanings assigned to them in
Section 4.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"Commitments" means, collectively, the Term Commitment and the Revolving
Commitment; and "Commitment" shall mean either one of the foregoing Commitments.
"Controlled Group" means a controlled group of entities which are treated
as a single employer under Sections 414(b), 414(c) or 414(m) of the Code of
which the Borrower or any of its Subsidiaries is a part.
"Cosmos Broadcasting" means Cosmos Broadcasting Corporation, a South
Carolina corporation.
5
"Default Interest Rate" means a simple rate of interest equal to the sum
of (a) the Base Rate, plus (b) two percent (2.0%) per annum.
"Discount Rate" means, with respect to a prepayment or conversion of a
LIBOR Loan on a date other than the last day of its Interest Period, a rate
equal to the interest rate (as of the date of prepayment or conversion) on
United States Treasury obligations in a like amount as such Loan and with a
maturity approximately equal to the period between the prepayment or conversion
date and the last day of the Interest Period of such Loan, as determined by the
Administrative Agent.
"Environmental Claim" means, with respect to any Person, any written or
oral notice, claim, demand, request for information, citation, summons, order or
other communication (each, a "claim") by any other Person alleging or asserting
the liability of the recipient of such claim for investigatory costs, cleanup
costs, governmental response costs, damages to natural resources or other
property or health, personal injuries, fines or penalties arising out of, based
on or resulting from (a) the presence, or Release, of any Hazardous Material at
or from any location, whether or not owned by such Person, or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law. The term "Environmental Claim" shall include, without limitation, any claim
by any governmental authority for enforcement, cleanup, removal, response,
remedial or other damages pursuant to any applicable Environmental Law, and any
claim by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence or
Release of Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"Environmental Laws" means all provisions of law, statutes, ordinances,
rules, regulations, permits, licenses, judgments, writs, injunctions, decrees,
order, awards and standards promulgated by the government of the United States
of America or by any state or municipality thereof or by any court, agency,
instrumentality, regulatory authority or commission of any of the foregoing
concerning health, safety and protection of, or regulation of the emission,
release or discharge of substances into, the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
"Event of Default" means any of the events specified in Section 9.
"Exchange Parties" means, collectively, the Borrower, WALB Inc., WALB
(License), Cosmos Broadcasting, ▇▇▇▇▇ Broadcasting, and WEAU (License).
"FCC" means the Federal Communications Commission or any governmental
authority at any time substituted therefor.
"Fee Letter" means any letter agreement between the Administrative Agent,
the Syndication Agent, the Lead Arranger, the Documentation Agent or any Lender
on the one hand,
6
and the Borrower relating to certain fees payable by the Borrower in connection
with this Agreement.
"Final Order" means an action or order issued by the FCC (a) which has not
been reversed, stayed, enjoined, set aside, annulled or suspended, and (b) with
respect to which (i) no requests or petitions have been filed for administrative
or judicial review, reconsideration, rehearing, appeal or stay, and the time for
filing any such requests or petitions and for the FCC to set aside the action on
its own motion has expired, (ii) in the event of review, reconsideration or
appeal, the time for further review, reconsideration or appeal has expired, and
(iii) no appeal to a court or request for stay by a court of such action is
pending or in effect, and, if any deadline for filing any such appeal or request
is designated by statute or rule, it has passed.
"Fixed Charge Coverage Ratio" means, as of the end of any fiscal quarter,
the ratio of (a) Operating Cash Flow for the four (4) quarter period then ended
to (b) the sum of (i) all Interest Expense for such four (4) quarter period,
plus, (ii) all required principal payments of Revolving Loans made pursuant to
scheduled Revolving Commitment reductions pursuant to Section 2.1 during such
four (4) quarter period, plus (iii) all required principal payments due on the
Term Loans during such four (4) quarter period, plus (iv) all principal payments
required to be made by the Borrower and its Subsidiaries on Total Debt (other
than the Loans) during such four (4) quarter period, plus (v) Capital
Expenditures made by the Borrower and its Subsidiaries during such four (4)
quarter period, plus (vi) any federal, state or local income taxes accrued by
the Borrower or any of its Subsidiaries during such four (4) quarter period.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States, consistently applied.
"Greycliff" means Greycliff Leveraged Fund 1993, L.P., a Delaware limited
partnership.
"Guarantor" means any Person who pledges its credit or property in any
manner, or otherwise becomes responsible for the payment or other performance of
the indebtedness, contract or other obligation of another Person and includes,
without limitation, any guarantor (whether of payment or of collection), surety,
co-maker, endorser or one who agrees conditionally or otherwise to make any
purchase, loan or investment in order thereby to enable another to prevent or
correct a default of any kind and one who has endorsed (otherwise than for
collection or deposit in the ordinary course of business), or has discounted
with recourse or agreed (continuously or otherwise) to purchase or otherwise
acquire or become liable for, any Indebtedness.
"Hazardous Material" means, collectively, (a) any petroleum or petroleum
products, flammable materials, explosives, radioactive materials, asbestos, urea
formaldehyde foam insulation, and transformers or other equipment that contain
polychlorinated biphenyls ("PCBs"), (b) any chemicals or other materials or
substances that are now or hereafter become defined as or included in the
definition of "hazardous substances", "hazardous wastes", "hazardous materials",
"extremely hazardous wastes", "restricted hazardous wastes", "toxic substances",
"toxic pollutants", "contaminants", "pollutants" or words of similar import
under any Environmental
7
Law and (c) any other chemical or other material or substance, exposure to which
is not or hereafter prohibited, limited or regulated under any Environmental
Law.
"Indebtedness" means, with respect to any Person, all liabilities,
obligations and reserves, contingent or otherwise, which, in accordance with
GAAP, would be reflected as a liability on a balance sheet (excluding trade
accounts payable and accrued expenses arising in the ordinary course of
business), and (without duplication) (a) all obligations of such Person for
borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest charges are
customarily paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to assets purchase by such Person, (e)
all obligations of such Person issued or assumed as the deferred purchase price
of property or services, (f) all obligations of others secured by (or for which
the holder of such obligations has an existing right, contingent or otherwise,
to be secured by) any Lien on property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed by such Person, (g) all
obligations or liabilities in respect of which such Person is a Guarantor, (h)
all Capitalized Lease Obligations of such Person, (i) all Rate Hedging
Obligations, and (j) all obligations of such Person as an account party to
reimburse any Person in respect of letters of credit (including, without
limitation, the Letters of Credit) or bankers' acceptances. The Indebtedness of
any Person shall include any recourse Indebtedness of any partnership in which
such Person is a general partner.
"Interest Expense" shall mean, for any period, the gross interest expense
accrued by the Borrower and its Subsidiaries in respect of their Indebtedness
for such period, determined on a consolidated basis, all fees payable under
Section 2.6 or any Fee Letter and any other fees, charges, commissions and
discounts in respect of Indebtedness, including any fees payable in connection
with the Letters of Credit. For purposes of the foregoing, gross interest
expense shall be determined after giving effect to any net payments made or
received by the Borrower with respect to Rate Hedging Obligations.
"Interest Period" means, with respect to any LIBOR Loan, the period
selected by the Borrower, commencing on the date such Loan is made, continued or
converted and ending on the last day of such period as selected by the Borrower.
The Interest Period for each LIBOR Loan shall be one (1), two (2), three (3) or
six (6) months or, if available from all of the Banks, nine (9) or twelve (12)
months; provided, however, that whenever the last day of such Interest Period
would otherwise occur on a day other than a Banking Day, the last day of such
Interest Period shall occur on the next succeeding Banking Day; and provided,
further, however, that if such extension of time would cause the last day of
such Interest Period to occur in the next calendar month, the last day of such
Interest Period shall occur on the next preceding Banking Day; and provided,
further, however, that if the first day of an Interest Period is the last
Banking Day of a month or a day for which there is no numerically corresponding
day in the appropriate subsequent calendar month, then such Interest Period
shall end on the last Banking Day of the appropriate subsequent calendar month.
The Borrower shall not select any Interest Period which extends beyond any date
on which a scheduled payment is or may be required to be made pursuant to
Section 2.1(b), 2.2 or 2.7(b)(i) unless the sum of the amount available to be
drawn
8
under the Commitments, plus the aggregate principal balance of all Base Rate
Loans and all LIBOR Loans with Interest Periods ending prior to such date is at
least equal to the maximum amount that is, or may be, required to be paid on
such date.
"Issuing Bank" means NationsBank, N.A., in its capacity as the issuer of
the Letters of Credit, or any successor issuer of the Letters of Credit.
"KGIN-TV" means the television station KGIN-TV serving Grand Island,
Nebraska.
"KOLN-TV" means the television station KOLN-TV serving Lincoln,
Nebraska.
"Lead Arranger" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.
"Letters of Credit" has the meaning ascribed to it in Section 2.3(a).
"Leverage Ratio", as of any date, means the ratio of (a) Total Debt as of
such date to (b) Operating Cash Flow for the four (4) quarter period then ended
or most recently ended.
"LIBOR" means the average (rounded upwards, if necessary, to the nearest
one-sixteenth of one percent (1/16%)) of the per annum rates at which deposits
in immediately available funds in United States dollars for the relevant
Interest Period and in an amount approximately equal to the Loan to be disbursed
or to remain outstanding during such Interest Period, as the case may be, are
offered to the Administrative Agent by prime banks in the London Eurodollar
market, determined as of 11:00 a.m. London, England time (or as soon thereafter
as practicable), two (2) Banking Days prior to the beginning of the relevant
Interest Period.
"LIBOR Loans" means those Loans described in Sections 2.1 and 2.2 on which
the Borrower shall pay interest at a rate based on the applicable LIBOR Rate.
"LIBOR Rate" means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the nearest one one-hundredth of one percent
(1/100%)) by dividing (a) the applicable LIBOR by (b) the difference between (1)
1.0, minus (2) the LIBOR Reserve Percentage.
"LIBOR Reserve Percentage" means for any day that percentage (expressed as
a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements) for
a member bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (as that term is defined in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time). The LIBOR Rate
shall be adjusted automatically on and as of the effective date of any change in
the LIBOR Reserve Percentage.
9
"License" means any license, authorization, permit, consent, franchise,
ordinance, registration, certificate, agreement or other right filed with,
granted by, or entered into by a federal, state or local governmental authority
which permits or authorizes the acquisition, construction or operation of a
television broadcasting station, or any part of a television broadcasting
station or which is required for the acquisition, ownership or operation of any
Station, any Newspaper, the Porta Phone Business or the Satellite Broadcasting
Business.
"License Subsidiary" means each Subsidiary which has no assets other than
Licenses issued by the FCC.
"Licensing Authority" means a governmental authority which has granted
or issued a License.
"Lien" as applied to the property of any Person means: (a) any mortgage,
lien, pledge, charge, lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security interest
or encumbrance of any kind in respect of any property of such Person, or upon
the income or profits therefrom; (b) any arrangement, express or implied, under
which any property of such Person is transferred, sequestered or otherwise
identified for the purpose of subjecting the same to the payment of Indebtedness
in priority to the payment of the general, unsecured creditors of such Person;
(c) the filing of, or any agreement to give, any financing statement under the
Uniform Commercial Code or its equivalent of any jurisdiction in respect of
Indebtedness; and (d) in the case of securities or other equity interests, any
purchase option, call or similar right of a third party with respect to such
securities or other equity interests.
"Like-Kind Exchange Agreement" means, collectively, the following: (a)
that certain Exchange Agreement by and among the Borrower, WALB Inc., WALB
(License), Cosmos Broadcasting, ▇▇▇▇▇ Broadcasting, and WEAU (License), dated as
of June 22, 1998; (b) that certain Asset Purchase Agreement by and among ▇▇▇▇▇
Broadcasting, WEAU (License), and Cosmos Broadcasting, dated as of June 22,
1998; (c) that certain Asset Purchase Agreement by and among WALB Inc., WALB
(License), and Cosmos Broadcasting, dated as of June 22, 1998; and (d) that
certain Escrow Agreement by and among WALB Inc., WALB (License), and Cosmos
Broadcasting, dated as of June 22, 1998.
"Loan Documents" shall mean this Agreement, the Notes, the Security
Agreements, the Pledge Agreements, the Subsidiary Guarantees, all subordination
agreements entered into by creditors of the Borrower or any of its Subsidiaries
with respect to Indebtedness for Money Borrowed of the Borrower or any of its
Subsidiaries, all legal opinions or reliance letters issued by counsel to the
Borrower or any of its Subsidiaries, all Fee Letters, all agreements relating to
any Rate Hedging Obligations of the Borrower or any of its Subsidiaries, on the
one hand, and the Administrative Agent and the Banks, or any of them, on the
other hand, all compliance certificates issued by the Borrower or any of its
Subsidiaries and all other documents, agreements, supplements and certificates
executed or delivered in connection with or contemplated by this Agreement or
any of the foregoing documents, agreements and instruments.
10
"Loans" means, collectively, the Revolving Loans and the Term Loans; and
"Loan" shall mean any one of the foregoing Loans.
"Material Adverse Effect" means a material adverse effect upon or change
in (a) the properties, assets, business, operations, financial condition or
prospects of the Borrower or any of its Subsidiaries or on the ability of the
Borrower or any such Subsidiary to conduct its business, (b) the ability of the
Borrower, any of its Subsidiaries or any other party to a Loan Document (other
than the Administrative Agent or any Bank) to perform its obligations hereunder
or under any other Loan Document to which it is a party, (c) the validity or
enforceability of this Agreement, the Notes or any other Loan Document, or (d)
the rights or remedies of the Administrative Agent or the Banks under this
Agreement, the Notes or any other Loan Document or at law or in equity.
"Maturity Date" shall mean June 30, 2005.
"Mortgages" has the meaning assigned to it in Section 6.4(a).
"Net Earnings" means, with respect to the Borrower, the consolidated net
income (or deficit) of the Borrower and its Subsidiaries for the period
involved, after taxes paid or accrued and after all proper charges and reserves
(excluding, however, non-recurring special charges and credits), all as
determined in accordance with GAAP.
"Newspapers" means, as of any date, the newspapers owned or operated by
the Borrower or any of its Subsidiaries as of such date.
"Notes" means, collectively, the Revolving Notes and the Term Notes; and
"Note" shall mean any one of the foregoing Notes.
"Obligations" means any obligation of the Borrower or any of its
Subsidiaries (a) to pay to the Banks the principal of and interest on the Loans
in accordance with the terms hereof and of the Notes and the contingent
liability of the Borrower under all outstanding Letters of Credit, including,
without limitation, any interest accruing after the date of any filing by the
Borrower or any Subsidiary of any petition in bankruptcy or the commencing of
bankruptcy, insolvency or similar proceedings with respect to the Borrower or
any of its Subsidiaries, regardless of whether such interest is allowable as a
claim in any such proceeding; (b) in respect of any Rate Hedging Obligations
owing to any Bank or any Affiliate of any Bank; (c) to pay, satisfy or perform
any other liability or obligation to the Administrative Agent or any Bank,
arising under this Agreement or any Loan Document, whether now existing or
hereafter incurred by reason of future advances or otherwise, matured or
unmatured, direct or contingent, joint or several, including any extensions,
modifications or renewals thereof and substitutions therefor, and including,
without limitation, all fees, indemnification amounts, costs and expenses,
including interest thereon and reasonable attorneys' fees, incurred by the
Administrative Agent or any Bank for the protection, preservation or enforcement
of its rights and remedies arising hereunder or under the Loan Documents; (d) to
repay to the Administrative Agent or the Banks all amounts advanced at any time
by the Administrative Agent or the Banks hereunder or under any Loan
11
Document, including, without limitation, advances for principal or interest
payments to prior secured parties, mortgagees, lienors or other Persons, or for
taxes, levies, insurance, rent or repairs to, or maintenance or storage of, any
of the property of the Borrower or any of its Subsidiaries; (e) to perform any
covenant or agreement made with the Banks pursuant to this Agreement or any Loan
Document; or (f) to take any other action in respect of any other liability of
any nature of the Borrower or any of its Subsidiaries to the Banks under this
Agreement or any Loan Document.
"Operating Agreement" means any programming agreement, time brokerage,
local marketing or similar agreement, network affiliation agreement, franchise
agreement, lease or other agreement of the Borrower or any of its Subsidiaries
relating to the operation of a Station, a Newspaper, the Porta Phone Business or
the Satellite Broadcasting Business, the termination or adverse modification of
which could reasonably be expected to have a Material Adverse Effect.
"Operating Cash Flow" means, during any period, the consolidated Net
Earnings of the Borrower for such period (excluding, to the extent included in
Net Earnings, (i) the effect of any exchange of advertising time for non-cash
consideration, such as merchandise or services, (ii) any other non-cash income
or expense (including the cumulative effect of a change in accounting principles
and extraordinary items) and (iii) any gains or losses from sales, exchanges and
other dispositions of property not in the ordinary course of business), minus
any interest income, investment income and other non-operating income, minus any
cash payments made in respect of Programming Obligations, plus the sum of (a)
depreciation on or obsolescence of fixed or capital assets and amortization of
intangibles and leasehold improvements (including, without limitation,
amortization in respect of Programming Obligations) for such period, plus (b)
Interest Expense accrued in such period, plus (c) federal, state and local
income taxes accrued in such period to the extent deducted in calculating Net
Earnings in such period (other than any such taxes resulting from any gains from
sales and exchanges and other distributions not in the ordinary course of
business), all on a consolidated basis and computed on the accrual method. For
purposes of calculating Operating Cash Flow in any period , any acquisition of
any Station or Newspaper, and any sale or other disposition of any assets, which
occurs during such period shall be deemed to have occurred on the first day of
such period.
"PBGC" means the Pension Benefit Guaranty Corporation or any governmental
authority at any time substituted therefor.
"PCBs" has the meaning assigned to it in the definition of "Hazardous
Materials" herein.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA which is subject to the provisions of Section 302 or Title
IV of ERISA or Section 412 of the Code.
"Permitted Acquisition" has the meaning assigned to it in
Section 8.9(b).
"Permitted Investment" has the meaning assigned to it in Section 8.10.
12
"Permitted Lien" means any of the following Liens:
(a) Liens for taxes or assessments and similar charges, which
are either not delinquent or being contested diligently and in good faith by
appropriate proceedings, and (i) as to which the Borrower or its affected
Subsidiary has set aside adequate reserves in accordance with GAAP on its books
and (ii) which do not entail any significant risk of loss, forfeiture,
foreclosure or sale of the property subject thereto;
(b) statutory Liens, such as mechanic's, materialman's,
warehouseman's, landlord's, artisan's, ▇▇▇▇▇▇▇'▇, contractor's, carrier's or
other like Liens, (i) incurred in good faith in the ordinary course of business,
(ii) which are either not delinquent or are being contested diligently and in
good faith by appropriate proceedings, (iii) as to which the Borrower or its
affected Subsidiary has set aside adequate reserves in accordance with GAAP on
its books or bonded satisfactorily to the Administrative Agent and (iv) which do
not entail any significant risk of loss, forfeiture, foreclosure or sale of the
property subject thereto;
(c) encumbrances consisting of zoning restrictions, easements,
licenses, reservations, provisions, covenants, conditions, waivers,
restrictions on the use of real property or minor irregularities of title,
provided that none of such encumbrances materially impairs the use or value of
any property in the operation of the Borrower's or any of its Subsidiaries'
business;
(d) Liens securing conditional sale, rental or purchase
money obligations permitted under Section 8.4 and Capitalized Lease Obligations
permitted under Section 8.6 (and protective UCC-1 financing statements filed by
lessors in connection therewith under leases not intended as security), but only
in the property which is the subject of such obligations;
(e) Liens arising under or pursuant to this Agreement or
any Loan Document or otherwise securing any Obligation;
(f) Liens in respect of judgments or awards with respect to
which the Borrower or any of its Subsidiaries is, in good faith, prosecuting an
appeal or proceeding for review and with respect to which a stay of execution
upon such appeal or proceeding for review has been secured, and as to which
judgments or awards the Borrower or such Subsidiary has established adequate
reserves in accordance with GAAP on its books or has bonded in a manner
satisfactory to the Administrative Agent;
(g) pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to participate in any
fund in connection with worker's compensation, unemployment insurance, old-age
pensions or other social security programs;
(h) Liens granted to secure the performance of bids,
tenders, contracts, leases, public or statutory obligations, surety, customs,
appeal and performance bonds and other
13
similar obligations and not incurred in connection with the borrowing of money,
the obtaining of advances or the payment of the deferred purchase price of any
property; and
(i) any other Liens listed on Schedule 1 attached hereto or
to which the Required Banks have consented in writing.
"Person" shall include natural persons, corporations, business trusts,
associations, companies, limited liability companies, joint ventures and
partnerships.
"Plan" means any employee benefit plan, as defined under Section 3(3) of
ERISA, established or maintained by the Borrower or any member of the Controlled
Group or any such Plan to which the Borrower or any member of the Controlled
Group is, or in the last six (6) years was, required to contribute on behalf of
its employees.
"Pledge Agreements" means, collectively, the Borrower Pledge Agreement
and the Subsidiary Pledge Agreements.
"Porta Phone Business" means, as of any date, the porta phone paging
business owned or operated by the Borrower or any of its Subsidiaries as of such
date.
"Possible Default" means an event, condition, situation or thing which
constitutes, or which with the lapse of any applicable grace period or the
giving of notice of both would constitute, an Event of Default.
"Preferred Stock" means, collectively, the Series A Preferred Stock of the
Borrower and Series B Preferred Stock of the Borrower.
"Prepayment Premium" means, with respect to the prepayment or conversion
of any LIBOR Loan or any other receipt or recovery of any LIBOR Loan prior to
the end of the applicable Interest Period, whether by voluntary prepayment,
acceleration, conversion to a Base Rate Loan or otherwise, an amount equal to
the sum of (a) the present value (discounted at the Discount Rate) of the
product of (i) the excess, if any, of the rate of interest applicable to such
Loan pursuant to Section 3.1 at the time of such prepayment or conversation on
the principal amount so prepaid, converted or accelerated, as the case may be,
over the Discount Rate, as determined by the Administrative Agent, times (ii)
the principal amount so prepaid, converted or accelerated, as the case may be,
times (iii) a fraction, the numerator of which is the number of days remaining
in the related Interest Period and the denominator of which is three hundred and
sixty (360) (taking into installment payments of the Loans being prepaid), plus
(b) reasonable out-of-pocket costs and expenses incurred by the Banks and the
Administrative Agent with respect to such prepayment.
"Prior Loan Agreement" means that certain Loan Agreement by and among the
Borrower, Key Corporate Capital Inc., as Agent (as defined therein),
NationsBank, N.A. (South), as Co-Agent (as defined therein), and the financial
institutions parties thereto dated as of September 23,
14
1996, as amended by that certain First Amendment to Loan Agreement dated as of
September 8, 1997.
"Pro Forma Debt Service" means, as of the end of any fiscal quarter, the
sum of, (a) all required principal payments of Revolving Loans made pursuant to
scheduled Revolving Commitment reductions pursuant to Section 2.1 during the
four (4) quarter period following such date, plus (b) all principal payments
required to be made on the Term Loans pursuant to Section 2.2 during such
subsequent four (4) quarter period, plus (c) all principal payments required to
be made by the Borrower and its Subsidiaries on Total Debt (other than the
Loans) during such subsequent four (4) quarter period, plus (d) all Interest
Expense during such subsequent four (4) quarter period. In calculating Pro Forma
Debt Service, (i) the interest rate in effect in such subsequent period on any
Indebtedness which does not bear interest at a rate which is fixed for the
entire subsequent period shall be deemed to be the interest rate in effect on
such Indebtedness as of the date of determination, and (ii) for the purpose of
determining the amount of principal payments required on the Term Loans pursuant
to Section 2.2 in future periods, it shall be assumed that the principal amount
of Term Loans outstanding as of the date of determination will be outstanding
for the subsequent four (4) quarter period, subject to any required principal
payments.
"Programming Obligations" means all direct or indirect monetary
liabilities, contingent or otherwise, with respect to contracts for television
broadcast rights relating to television series or other programs produced or
distributed for television release.
"Quarterly Date" means the last day of each of the Borrower's fiscal
quarters, which dates shall be March 31st, June 30th, September 30th and
December 31st of each year.
"Ratable Share" means, with respect to any Bank, its pro rata share of the
Revolving Commitment, the Term Commitment, the Letters of Credit and the Loans.
The Ratable Share of each Bank as of the date of this Agreement is as set forth
on Schedule 2 attached hereto.
"Rate Hedging Obligations" means any and all obligations of the Borrower,
whether absolute or contingent and howsoever and whensoever created, arising,
evidence or acquired (including all renewals, extensions and modifications
thereof and substitutions therefor), under (a) any and all agreements, devices
or arrangements designed to protect the Borrower from the fluctuations of
interest rates, including, without limitation, interest rate exchange or swap
agreements, reverse swap agreements, interest rate cap or collar protection
agreements, and interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Regulatory Change" means the adoption of or any change in federal, state
or local treaties, laws, rules or regulations or the adoption of or change in
any interpretations, guidelines, directives or requests of or under any federal,
state or local treaties, laws, rules or regulations (whether or not having the
force of law) by any court, governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof.
15
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including, without limitation, the movement
of Hazardous Materials through ambient air, soil, surface water, ground water,
wetlands, land or subsurface strata.
"Reportable Event" means a reportable event as that term is defined in
Title IV of ERISA, excluding, however, such events as to which the PBGC by
regulation has waived the requirement of Section 4043(a) of ERISA that it be
notified within thirty days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of the Code and of
Section 302 of ERISA shall be a Reportable Event regardless of the issuance of
any such waivers in accordance with Section 412(d) of the Code).
"Required Banks" means, at any time, the Banks holding at least sixty-six
and two-thirds percent (66 2/3%) of the then aggregate unpaid principal amount
of the Loans, or, if no principal amount of the Loans is then outstanding, the
Banks having at least sixty-six and two thirds percent (66 2/3%) of the
Commitments.
"Revolving Commitment" has the meaning assigned to it in Section 2.1(a).
"Revolving Loans" has the meaning assigned to it in Section 2.1(a).
"Revolving Notes" has the meaning assigned to it in Section 2.5.
"Satellite Broadcasting Business" means, as of any date, the satellite
broadcasting business owned or operated by the Borrower or any of its
Subsidiaries on such date.
"Security Agreements" means, collectively, the Borrower Security
Agreement and the Subsidiary Security Agreements.
"Senior Debt" means (a) Total Debt, minus (b) Subordinated Debt.
"South Street (Corporate)" means South Street Corporate Recovery Fund I,
L.P., a Delaware limited partnership.
"South Street (Leveraged)" means South Street Leveraged Corporate
Recovery Fund, L.P., a Delaware limited partnership.
"South Street (International)" means South Street Corporate Recovery Fund
I (International), L.P., a Delaware limited partnership.
"Stations" means, as of any date, the television broadcasting stations and
all television translators, auxiliary stations and low power television stations
owned in connection with the foregoing, or any other communications station
owned or operated by the Borrower or any of its Subsidiaries on such date.
16
"Subordinated Debt" means all Indebtedness of the Borrower and its
Subsidiaries under the Subordinated Note Indenture or any agreements, notes,
instruments or documents executed or delivered in connection therewith and all
other Indebtedness of the Borrower the repayment of which is subordinated in
right of payment to the Obligations pursuant to a subordination agreement in
form and substance satisfactory to all of the Banks.
"Subordinated Note Indenture" means that certain Indenture dated as of
September 25, 1996, among the Borrower, all of its Subsidiaries, and Bankers
Trust Company in respect of the Borrower's 10-5/8% Senior Subordinated Notes due
2006, as the same may be amended to the extent permitted in Section 8.19.
"Subsidiary" means each partnership or corporation, the majority of the
outstanding partnership interests, capital stock or voting power of which is (or
upon the exercise of all outstanding warrants, options and other rights would
be) owned, directly or indirectly, at the time in question by the Borrower.
"Subsidiary Guaranties" means, collectively, those certain Guaranties
dated as of September 23, 1996, in favor of the Agent (as defined in the Prior
Loan Agreement) and the Banks given by each Subsidiary of the Borrower, or any
supplement, in form and substance satisfactory to the Administrative Agent,
thereto, and shall include any similar agreements substantially in the form of
Exhibit C attached hereto.
"Subsidiary Pledge Agreements" means, collectively, those certain
Subsidiary Pledge Agreements between each Subsidiary of the Borrower having one
or more of its own Subsidiaries, on the one hand, and the Agent (as defined in
the Prior Loan Agreement), on the other hand, or any supplement, in form and
substance satisfactory to the Administrative Agent, thereto, and any similar
agreements substantially in the form of Exhibit D attached hereto.
"Subsidiary Security Agreements" means, collectively, those certain
Subsidiary Security Agreements dated as of September 23, 1996, among each of the
Subsidiaries and the Agent (as defined in the Prior Loan Agreement), or any
supplement, in form and substance satisfactory to the Administrative Agent,
thereto, and shall include any similar agreements substantially in the form of
Exhibit E attached hereto.
"Term Commitment" has the meaning assigned to it in Section 2.2(a).
"Term Loan" has the meaning assigned to it in Section 2.2(a).
"Term Notes" has the meaning assigned to it in Section 2.5.
"Total Debt" means (a) all Indebtedness of the Borrower and its
Subsidiaries for borrowed money, including, without limitation, the Loans, (b)
all Capitalized Lease Obligations of the Borrower and its Subsidiaries, (c) all
other Indebtedness of the Borrower or any of its Subsidiaries represented by
notes or drafts representing extensions of credit or on which interest is
typically charged, (d) all obligation of the Borrower or any of its Subsidiaries
evidenced by
17
bonds, debentures, notes or other similar instruments (including, without
limitation, all such obligations to which any property or asset owned by the
Borrower or any of its Subsidiaries is subject, whether or not the obligation
secured thereby shall have been assumed), (e) all obligations of the Borrower or
any of its Subsidiaries under conditional sale or other title retention
agreements relating to purchased assets, (f) all obligations of the Borrower or
any of its Subsidiaries which are incurred, issued or assumed as the deferred
purchase price of property or services and which are payable over a period in
excess of one (1) year, (g) all obligations or liabilities in respect of which
the Borrower or any of its Subsidiaries is a Guarantor, (h) at any time after
the occurrence and during the continuance of an event of default under any
agreement of the Borrower or any of its Subsidiaries' governing Rate Hedging
Obligations, the aggregate amount payable by the Borrower or such Subsidiary
under such agreement, and (i) all obligations of the Borrower or any of its
Subsidiaries as an account party to reimburse any Person in respect of letters
of credit (including the stated amount of all Letters of Credit) or bankers'
acceptances.
"WALB Inc." means WALB-TV, Inc., a Georgia corporation.
"WALB (License)" means WALB Licensee Corp., a Delaware corporation.
"WALB-TV" means television station WALB-TV serving Albany Georgia.
"WEAU (License)" means WEAU License, Inc., a Delaware corporation.
"WEAU-TV" means television station WEAU-TV serving Eau Claire, Wisconsin
and LaCrosse, Wisconsin.
"Working Capital" means, as of any date, the excess of the consolidated
current assets, other than cash, of the Borrower and its Subsidiaries over their
consolidated current liabilities, other than the current portion of long term
debt, as of such date.
"Year 2000 Compliant" has the meaning assigned to it in Section 5.29.
"Year 2000 Problem" has the meaning assigned to it in Section 5.29.
1.2 Other Terms. Except as otherwise specifically provided in this
Agreement, each term not otherwise expressly defined herein which is defined in
the Uniform Commercial Code, as amended (the "UCC"), as adopted in any
applicable jurisdiction shall have the meaning assigned to it in the UCC in
effect in such jurisdiction. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. All references
herein to Sections, Schedules or Exhibits shall be deemed to be references to
Sections of, and Schedules and Exhibits to, this Agreement unless the context
shall otherwise require. Whenever any agreement, promissory note or other
instrument or document is defined in this Agreement, such definition shall be
deemed to mean and include, from and after the date of any amendment,
restatement or modification thereof, such agreement, promissory note or other
instrument or document as so amended, restated or modified. All terms defined in
this Agreement in the singular shall have comparable meanings when used in the
plural and vice
18
versa. The words "hereof," "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.
1.3 Accounting Provisions. All accounting terms used in this
Agreement which are not expressly defined herein shall have the respective
meanings given to them in accordance with GAAP, all computations shall be made
in accordance with GAAP, and all balance sheets and other financial statements
shall be prepared in accordance with GAAP. All financial or accounting
calculations or determinations required pursuant to this Agreement unless
otherwise expressly provided shall be made on a consolidated basis for the
Borrower and is Subsidiaries.
SECTION 2. THE LOANS AND THE LETTERS OF CREDIT.
2.1 The Revolving Commitment and the Revolving Loans.
(a) Subject to the terms and conditions hereof, during the
period from the Closing Date up to but not including the Maturity Date, the
Banks severally, but not jointly, shall make loans to the Borrower in such
amounts as the Borrower may from time to time request but not exceeding in
aggregate principal amount at any one time outstanding $100,000,000 (as such
amount may be reduced from time to time, the "Revolving Commitment"); provided,
however, that in no event shall (1) the aggregate principal amount of such
loans, plus the aggregate stated amount of the Letters of Credit exceed the
Revolving Commitment, and (2) the aggregate stated amount of all outstanding
Letters of Credit exceed $15,000,000. All amounts borrowed by the Borrower
pursuant to this Section 2.1(a) and all amounts drawn under any Letter of Credit
and not repaid may be referred to hereinafter collectively as the "Revolving
Loans." Each Revolving Loan requested by the Borrower shall be funded by the
Banks in accordance with their Ratable Shares of the requested Revolving Loan. A
Bank shall not be obligated hereunder to make any additional Revolving Loan if
immediately after making such Revolving Loan, the aggregate principal balance of
all Revolving Loans made by such Bank, plus such Bank's Ratable Share of any
outstanding Letters of Credit would exceed such Bank's Ratable Share of the
Revolving Commitment. The Revolving Loans may be comprised of Base Rate Loans or
LIBOR Loans, as provided in Section 2.4.
19
(b) On each date set forth in the table below, the Revolving
Commitment as of September 29, 2000 shall be automatically reduced by the
percentage amount set forth for such date in such table:
======================================================================
Calendar
Year March 31 June 30 September 30 December 31
---------------------------------------------------------------------
Not Not
2000 applicable. applicable. 5.00% 5.00%
---------------------------------------------------------------------
2001 3.75% 3.75% 3.75% 3.75%
---------------------------------------------------------------------
2002 3.75% 3.75% 3.75% 3.75%
---------------------------------------------------------------------
2003 5.00% 5.00% 5.00% 5.00
---------------------------------------------------------------------
2004 6.25% 6.25% 6.25% 6.25%
---------------------------------------------------------------------
All
remaining Not Not
2005 7.50% principal. applicable. applicable.
======================================================================
(c) Prior to the Maturity Date, the Borrower may, at its
option, subject to the provisions of Section 2.7, from time to time prepay all
or any portion of the Revolving Loans. The Borrower may from time to time
reborrow amounts so prepaid up to the amount of the Revolving Commitment in
effect at the time of reborrowing.
(d) Prior to the Maturity Date, by written notice to the
Administrative Agent no later than 11:00 a.m., Charlotte, North Carolina time,
five (5) Banking Days prior to such termination or reduction, the Borrower may
permanently terminate or, from time to time, permanently reduce the Revolving
Commitment. Such notice shall be in writing or by telephonic communication
confirmed by telecopy or other facsimile transmission on the same day as such
telephone notice. Any such partial reduction hereunder shall be in an amount
which is not less than $5,000,000 or an integral multiple of $1,000,000 in
excess thereof. The Administrative Agent shall notify the Banks of any such
reduction or termination of the Revolving Commitment.
(e) All Revolving Loans, together with all interest accrued
thereon, shall be paid in full no later than the Maturity Date.
20
2.2 The Term Commitment and the Term Loan.
(a) Subject to the terms and conditions hereof, the Banks
severally, but not jointly, shall make a loan to the Borrower on the Closing
Date not exceeding an aggregate principal amount of $100,000,000 (the "Term
Commitment"). All amounts borrowed by the Borrower pursuant to this Section
2.2(a) and not repaid may be referred to hereinafter collectively as the "Term
Loan". The Term Loan requested by the Borrower shall be funded on the Closing
Date by the Banks in accordance with their Ratable Shares. The Term Loan may be
a Base Rate Loan or LIBOR Loan, as provided in Section 2.4.
(b) Prior to the Maturity Date, the Borrower may, at its
option, subject to the provisions of Section 2.7, from time to time prepay all
or any portion of the Term Loan. No amount so repaid may be reborrowed.
(c) On each date set forth in the table below, the principal
amount of the Term Loan outstanding as of December 30, 1999, shall be repaid by
the percentage amount set forth for such date in such table:
=========================================================================
Calendar Year March 31 June 30 September 30 December 31
--------------------------------------------------------------------------
1999 Not Applicable Not Applicable Not Applicable 2.50%
--------------------------------------------------------------------------
2000 2.50% 2.50% 2.50% 2.50%
--------------------------------------------------------------------------
2001 2.50% 2.50% 2.50% 2.50%
--------------------------------------------------------------------------
2002 4.375% 4.375% 4.375% 4.375%
--------------------------------------------------------------------------
2003 4.375% 4.375% 4.375% 4.375%
--------------------------------------------------------------------------
2004 5.312% 5.312% 5.312% 5.312%
--------------------------------------------------------------------------
All remaining Not Not
2005 10.625% principal. applicable. applicable.
==========================================================================
2.3 Letter of Credit.
(a) Issuance. Subject to the terms and conditions hereof,
including the provisions of Section 6, the Borrower may request that the Issuing
Bank issue, from time to time on and after the Closing Date, and the Issuing
Bank agrees to issue, from time to time on and after the Closing Date, standby
letters of credit (collectively, the "Letters of Credit") in an aggregate stated
amount not exceeding $15,000,000. Each Letter of Credit shall be issued under
the Revolving Commitment. No Letter of Credit shall (i) have an expiration date
which is later than the Maturity Date, (ii) be issued for a term of more than
three hundred sixty-four (364) days and (iii) be issued if after giving effect
to such issuance, the sum of the outstanding principal balance of the Revolving
Loans (including amounts drawn on Letters of Credit and not repaid), plus the
aggregate stated amount of outstanding Letters of Credit, would exceed the
Revolving Commitment. Each Letter of Credit shall be (y) issued in the manner
and on the conditions set
21
forth in this Section 2.3 and Section 6 and (z) in the Issuing Bank's standard
form for letters of credit or in such other form as is acceptable to the Issuing
Bank inform and substance.
(b) Application. Each request for a Letter of Credit shall
be made to the Issuing Bank by an application on the Issuing Bank's standard
form or in such other manner as the Issuing Bank may approve. Promptly following
the issuance of any Letter of Credit, the Issuing Bank shall notify the
Administrative Agent and the Banks of such issuance.
(c) Participation by the Banks.
(i) By the issuance of a Letter of Credit and
without any further action on the part of the Issuing Bank or the other Banks
in respect thereof, the Issuing Bank hereby grants to each other Bank, and each
other Bank hereby agrees to acquire from the Issuing Bank, a participation in
such Letter of Credit equal to such Bank's Ratable Share of the stated amount
of such Letter of Credit, effective upon the issuance of such Letter of Credit;
provided, however, that no Bank shall be required to acquire participations in
any Letter of Credit that would result in its Ratable Share of the sum of
outstanding Revolving Loans, plus the stated amount of all outstanding Letters
of Credit to be greater than its Ratable Share of the Revolving Commitment. In
consideration and in furtherance of the foregoing, each Bank hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuing Bank, in accordance with Section 2.3(d), such Bank's Ratable
Share of each amount disbursed pursuant to a Letter of Credit; provided,
however, that payment by the Issuing Bank under such Letter of Credit against
presentation of such draft or document shall not have constituted gross
negligence or willful misconduct of the Issuing Bank.
(ii) Each Bank acknowledges and agrees that its
obligation to acquire participations pursuant to paragraph (i) above in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstances whatsoever, including, without limitation, the occurrence and
continuance of an Event of Default or Possible Default, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(d) Letter of Credit Disbursements.
(i) If the Administrative Agent has not received
from the Borrower the payment permitted pursuant to paragraph (ii) of this
Section 2.3(d) by 11:00 a.m., Charlotte, North Carolina time, on the date on
which the Issuing Bank has notified the Borrower that payment of a draft
presented under any Letter of Credit will be made, as provided in such paragraph
(ii), the Administrative Agent shall promptly notify the Issuing Bank and each
other Bank of the disbursement to be made under such Letter of Credit and, in
the case of each Bank, its Ratable Share of such disbursement. Each Bank shall
pay to the Administrative Agent, not later than 1:00 p.m., Charlotte, North
Carolina time, on such date (or, if the Issuing Bank shall elect to defer
reimbursement from the Banks hereunder, such later date as the Issuing Bank
shall specify by notice to the Administrative Agent and the Banks), such Bank's
Ratable Share of such disbursement, which the Administrative Agent shall
promptly pay to the Issuing Bank. The
22
Administrative Agent will promptly remit to each Bank its share of any amount
subsequently received by the Administrative Agent from the Borrower in respect
of such disbursement; provided, however, that amounts so received for the
account of any Bank prior to payment by such Bank of amounts required to be paid
by it hereunder in respect of any disbursement shall be remitted to the Issuing
Bank.
(ii) If the Issuing Bank shall receive any draft
presented under any Letter of Credit, the Issuing Bank shall give notice thereof
as provided in paragraph (iii) below. If the Issuing Bank shall pay and draft
presented under a Letter of Credit, the Borrower may (but shall not be required
to) pay to the Administrative Agent, for the account of the Issuing Bank, an
amount equal to the amount of such draft before 11:00 a.m., Charlotte, North
Carolina time, on the Banking Day on which the Issuing Bank shall have notified
the Borrower that payment of such draft will be made. The Administrative Agent
will promptly pay any such amounts received by it to the Issuing Bank.
(iii) The Issuing Bank shall, promptly following its
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit to ascertain that the same appear on their face
to be in substantial conformity with the terms and conditions of such Letter of
Credit. The Issuing Bank shall as promptly as reasonably practicable give oral
notification, confirmed in writing, to the Administrative Agent and the Borrower
of such demand for payment and the determination by the Issuing Bank as to
whether such demand for payment was in accordance with the terms and conditions
of such Letter of Credit and whether the Issuing Bank has made or will make a
disbursement thereunder, provided that the failure to give such notice shall not
relieve the Borrower of its obligation to reimburse such disbursement, and the
Administrative Agent shall promptly give each Bank notice thereof.
(e) Obligation to Repay Letter of Credit Disbursements, etc.
The Borrower assumes all risks in connection with the Letters of Credit and the
Borrower's obligation to repay each disbursement under a Letter of Credit shall
be absolute, unconditional and irrevocable under any and all circumstances and
irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, setoff, defense or
other right which the Borrower or any other person may at any time have against
the beneficiary under any Letter of Credit, the Administrative Agent, the
Issuing Bank or any other Bank (other than the defense of payment in accordance
with the terms of this Agreement or a defense based on the gross negligence or
willful misconduct of the Issuing Bank) or any other Person in connection with
this Agreement or any other agreement or transaction;
(iii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect,
provided that payment by the Issuing Bank
23
under such Letter of Credit against presentation of such draft or document shall
not have constituted gross negligence or willful misconduct of the Issuing Bank;
and
(iv) any other circumstance or event whatsoever,
whether or not similar to any of the foregoing; been the result of gross
negligence or willful misconduct of the Issuing Bank.
It is understood that in making any payment under a Letter of Credit: (A) the
Issuing Bank's exclusive reliance as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary equals the amount of
such draft and whether or not any documents presented pursuant to such Letter of
Credit prove to be insufficient in any respect, if such document on its face
appears to be in order, and whether or not any such Letter of Credit proves to
be forged or invalid or any statement therein proves to be inaccurate or untrue
in any respect whatsoever; and (B) any noncompliance in any immaterial respect
of the documents presented under a Letter of Credit with the terms thereof,
shall, in each case, not be deemed willful misconduct or gross negligence of the
Issuing Bank.
(f) Indemnification. The Borrower shall: (i) indemnify and
hold each Bank (including, without limitation, the Issuing Bank) harmless from
any loss resulting from any claim, demand or liability which may be asserted
against such Bank in connection with actions taken under any Letter of Credit;
and (ii) reimburse such Bank for any fees or other reasonable expenses paid or
incurred by such Bank in connection with any Letter of Credit, other than any
loss or expense resulting from such Bank's willful misconduct or gross
negligence. Any amounts paid by the Issuing Bank on any Letter of Credit shall
be deemed to be a Revolving Loan for all purposes of this Agreement and shall
bear interest from the date of payment by the Issuing Bank at the rates provided
in Section 3.1 until paid in full.
(g) Security. Upon the occurrence of any Event of Default,
the Borrower shall, upon demand, pay to the Issuing Bank the stated amount of
all outstanding Letters of Credit, which amount the Issuing Bank shall hold as
security for the obligations incurred under such Letter of Credit, this
Agreement or the Notes. The payment by the Borrower of such security shall not
terminate the obligations of the Borrower under this Section 2.3.
(h) Additional Costs. If any Regulatory Change shall either
(i) impose upon, modify, require, make or deem applicable to any Bank (or its
holding company) any reserve requirement, special deposit requirement, insurance
assessment or similar requirement against or affecting any Letter of Credit
issued or to be issued hereunder, or (ii) subject any Bank to any tax, charge,
fee, deduction or withholding of any kind whatsoever, or (iii) impose any
condition upon or cause in any manner the addition of any supplement to or
increase of any kind to any Bank's (or its holding company's) capital or cost
base for issuing such Letter of Credit which results in an increase in the
capital requirement supporting such Letter of Credit, or (iv) impose upon,
modify, require, make or deem applicable to any Bank (or its holding company)
any capital requirement, increased capital requirement or similar requirement
such as the deeming of such Letters of Credit to be assets held by such bank (or
its holding company) for
24
capital calculation or other purposes and the result of any events referred to
in clause (i), (ii), (iii) or (iv) of this Section 2.3(h) shall be to increase
the costs or decrease the benefit in any way to a Bank (or its holding company)
of issuing, maintaining or participating in such Letters of Credit, then and in
such event the Borrower shall, within ten (10) days after the mailing of written
notice of such increased costs and/or decreased benefits to the Administrative
Agent and the Borrower by any Bank, pay to such Bank all such additional amounts
which in such Bank's sole good faith calculation as allocated to such Letters of
Credit, shall be sufficient to compensate it (or its holding company) for all
such increased costs and/or decreased benefits. Such Bank's calculation shall be
conclusive absent manifest error.
(i) Fees. The Letters of Credit shall be issued for a fee of
one and one-eighth percent (1.125%) per annum of the stated amount thereof,
payable upon issuance. The fee shall be payable to the Administrative Agent for
the benefit of the Banks in accordance with their Ratable Shares. If any Letter
of Credit is drawn upon prior to its expiration date, the Banks shall reimburse
to the Borrower that portion of the fee allocable to the period from the date of
the draw to the expiration date, calculated in accordance with the Issuing
Bank's standard letter of credit procedures. In addition, the Borrower shall pay
to the Issuing Bank for its own account its standard charges for the issuance of
letters of credit and for draws upon letters of credit, which charges, as of the
date hereof, are as follows: (i) $200 per Letter of Credit, payable upon
issuance; and (ii) $100 per Letter of Credit, payable upon a draw under such
Letter of Credit.
2.4 Making and Continuation/Conversion of the Loans.
(a) Making of the Loans.
(i) Each Revolving Loan or Term Loan, as the case
may be, shall be made by the Banks in such amount as the Borrower shall request;
provided, however, that each borrowing shall be in an amount which is a minimum
of, (A) with respect to any LIBOR Loan, $1,000,000, and integral multiples of
$500,000 in excess thereof, and (B) with respect to any Base Rate Loan,
$500,000, and integral multiples of $200,000 in excess thereof, or in each case
such lesser amount as may be equal to the then unused portion of the Revolving
Commitment. The obligation of the Banks to make any Loan is conditioned upon the
fact that: (x) no Possible Default or Event of Default shall then exist or
immediately after the Loan would exist; (y) all of the Loan Documents shall
still be in full force and effect; and (z) the representations and warranties
contained herein and in the Loan Documents shall be true and correct in all
material respects as if made on and as of the date of such borrowing, except to
the extent that any thereof expressly relate to an earlier date.
(ii) Loans shall be effected at the Administrative
Agent's Office, and shall be made at such times as the Borrower may request by
notice to the Administrative Agent no later than 11:00 a.m., Charlotte, North
Carolina time, (A) three (3) Banking Days prior to the date of a requested LIBOR
Loan and (B) on the date of a requested Base Rate Loan. Such notices shall be in
writing, or by telephonic communication confirmed by telecopy or other facsimile
transmission on the same day as the telephone request, and shall
25
specify the proposed date and the amount of the requested Loan, whether it is to
bear interest initially based upon the Base Rate or the LIBOR Rate, and the
Interest Period thereof, if applicable.
(iii) Upon receipt of each borrowing notice for a
Loan, the Administrative Agent shall promptly notify each Bank of the type,
Interest Period, if applicable, amount and date of the proposed borrowing. Not
later than 1:00 p.m., Charlotte, North Carolina time, on the date of a proposed
borrowing, each Bank shall provide the Administrative Agent at its address
specified in Section 12.4 with immediately available funds covering such Bank's
Ratable Share of the borrowing, and the Administrative Agent shall pay over such
immediately available funds to the Borrower.
(b) Conversion/Continuation of the Loans. At the Borrower's
election pursuant to notice given to the Administrative Agent not later than
11:00 a.m., Charlotte, North Carolina time, three (3) Banking Days prior to such
conversion or continuation, any Base Rate Loan may be converted to, or any LIBOR
Loan may be continued as, a LIBOR Loan as requested by the Borrower; provided,
however, that each conversion shall be in an amount which is a minimum of
$1,000,000, and integral multiples of $500,000 in excess thereof; and provided,
further, however, that no Loan may be continued as or converted to a LIBOR Loan
at any time that an Event of Default or Possible Default exists. If the Borrower
has not delivered to the Administrative Agent such notice with respect to any
terminating Interest Period at least three (3) Banking Days prior to the end of
such Interest Period, the affected LIBOR Loan shall convert to a Base Rate Loan
at the end of such Interest Period.
(c) Number of Interest Rate Options. In no event shall
the Borrower have more than seven (7) LIBOR Loans outstanding at any time.
2.5. The Notes. All Revolving Loans shall be evidenced by separate
promissory notes payable to the Banks substantially in the form attached hereto
as Exhibit F to be duly executed and delivered by the Borrower at or prior to
the Closing in the aggregate principal amount of the Revolving Commitment (the
"Revolving Notes"). The Term Loan shall be evidenced by separate promissory
notes payable to the Banks substantially in the form attached hereto as Exhibit
G to be duly executed and delivered by the Borrower at or prior to the Closing
in the aggregate principal amount of the Term Commitment (the "Term Notes"). The
Banks may, and are hereby authorized by the Borrower to, set forth on the grids
attached to the Notes, or in other comparable records maintained by them, the
amount of each Loan, all payments and prepayments of principal and interest
received, the current outstanding principal balance, and other appropriate
information. The aggregate unpaid amount of any Loan set forth in any records
maintained by a Bank with respect to a Note shall be presumptive evidence of the
principal amount owing and unpaid on such Note. Failure of a Bank to record the
principal amount of any Loan on the grid(s) attached to a Note shall not limit
or otherwise affect the obligation of the Borrower hereunder or under such Note
to repay the principal amount of such Loan and all interest accruing thereon.
26
2.6 Fees.
(a) Commitment Fees. The Borrower shall pay to the
Administrative Agent for the benefit of the Banks a non-refundable commitment
fee of one-half of one percent (1/2%) per annum (based on a year having three
hundred sixty (360) days and actual days elapsed) on the difference between (i)
the Revolving Commitment, minus (ii) the sum of (A) the average daily amount of
Revolving Loans outstanding plus (B) the aggregate stated amount of the Letters
of Credit then outstanding issued under the Revolving Commitment; provided,
however, that the commitment fee shall be one-quarter of one percent (1/4%) per
annum for any day on which the Leverage Ratio is less than or equal to 5.75 to
1.0. Such commitment fee shall (1) commence to accrue as of the date hereof and
continue for each day from the Closing Date to and including the Maturity Date,
and, with respect to each fiscal quarter period, until the last Business Day of
such fiscal quarter, (2) be in addition to any other fee required by the terms
and conditions of this Agreement, (3) be payable in arrears on the fifteenth
(15th) day following each Quarterly Date and on the date the Revolving
Commitment is terminated, and (4) be shared by the Banks in accordance with
their Ratable Shares.
(b) Other Fees. The Borrower shall pay to the
Administrative Agent, the Documentation Agent, the Syndication Agent, the
Lead Arranger, and/or the Lenders such other fees as are set forth in any Fee
Letter.
2.7 Prepayment.
(a) Voluntary Prepayments. By notice to the Administrative
Agent (which shall be in writing or by telephonic communication confirmed by
telecopy or other facsimile transmission on the same day as such telephone
notice) no later than 11:00 a.m., Charlotte, North Carolina time, on the Banking
Day of such prepayment (with respect to any Base Rate Loan) or on the third
(3rd) Banking Day prior to such prepayment (with respect to any LIBOR Loan), the
Borrower may, at its option, prepay the Loans in whole at any time or in part
from time to time without penalty or premium; provided, however, that any such
prepayment of any LIBOR Loan shall be made together with the applicable
Prepayment Premium; and provided, further, however, that each partial prepayment
shall be in the aggregate principal amount of not less than $1,000,000 or an
integral multiple of $1,000,000 in excess thereof. Each voluntary prepayment of
the Term Loan shall be applied to the principal installments due pursuant to
Section 2.2 in the inverse order of maturity, and no amount so prepaid may be
reborrowed.
(b) Mandatory Prepayments.
(i) Reduction of Revolving Commitment. If at any time
the outstanding principal amount of the Revolving Loans, plus the aggregate
stated amount of all Letters of Credit exceeds the Revolving Commitment, as the
Revolving Commitment may be reduced pursuant to the terms hereof, the Borrower
shall immediately prepay the Revolving Notes without penalty or premium (except
that any such prepayment of any LIBOR Loan shall be made together with the
applicable Prepayment Premium), in an amount necessary to cause the
27
outstanding principal amount of the Revolving Loans, plus the aggregated stated
amount of all Letters of Credit not to exceed the Revolving Commitment, as so
reduced.
(ii) Proceeds of Asset Sales. The Borrower shall make a
mandatory prepayment of the Loans in an amount equal to the cash proceeds of any
Asset Sale (including, without limitation, any sale permitted pursuant to
Section 8.10(c)), net of any reasonable costs directly incurred in connection
with any such Asset Sale and any taxes payable by the Borrower or the selling
Subsidiary in connection with such Asset Sale; provided, however, that the
Borrower shall not be required to make such a mandatory prepayment of the Loans
in respect of any such Asset Sale, so long as (A) no Event of Default or
Possible Default exists as of the date of such Asset Sale or at the date of the
reinvestment of such proceeds and (B) the Borrower reinvests such proceeds by
making a Permitted Acquisition within twelve (12) months of the date of the
consummation of such Asset Sale. If any such Event of Default or Possible
Default exists or if such proceeds are not so reinvested within such twelve (12)
month period, or used to pay such purchase price, then the Borrower shall make a
mandatory prepayment of the Loans in an amount equal to the cash proceeds of
such Asset Sale, net of any reasonable costs directly incurred in connection
with such Asset Sale and any taxes payable by the Borrower or the selling
Subsidiary in connection with such Asset Sale. Together with any prepayment
required by this Section 2.7(b)(ii), the Borrower shall deliver to the
Administrative Agent a certificate executed by the Borrower's chief financial
officer setting forth the calculation of the net cash proceeds of such Asset
Sale, including a calculation of the taxes payable by the Borrower or the
selling Subsidiary in respect of such sale. Such prepayment shall be made
simultaneously with the consummation of such Asset Sale.
(iii) Insurance Proceeds. Within ninety (90) days after
the date of receipt of any cash payments under any insurance policy maintained
by the Borrower or any of its Subsidiaries which have not been reinvested in
assets of a kind then used or usable in the business of the Borrower or such
Subsidiary or used to maintain the business of the Borrower and its Subsidiaries
as going concerns as a consequence of any business interruption, the Borrower
shall make a mandatory prepayment of the Loans in the amount of such
unreinvested or unused proceeds; provided, however, that notwithstanding any of
the foregoing to the contrary, upon and during the continuance of any Event of
Default or Possible Default, all such insurance proceeds, regardless of
reinvestment or other use, received by the Borrower or any Subsidiary shall be
applied as a prepayment of the Loans.
(c) Application of Prepayments; Reduction of Commitments.
(i) Application to Prepayment Premium, Accrued
Interest and Principal. All prepayments made pursuant to this Section 2.7 shall
be applied first to any Prepayment Premium and second due, then to accrued
interest in accordance with the Administrative Agent's standard operating
procedures and then to the principal outstanding under the Loans. For purposes
of the calculation of interest and the determination of whether any Prepayment
Premium is due in connection with any such prepayment, such principal
prepayments shall be applied first to the Base Rate Loans and second to the
LIBOR Loans with the shortest remaining Interest Periods
28
(ii) Application to Loans. All mandatory prepayments of
principal required to be made pursuant to Section 2.7(b) shall be applied to the
Loans on a weighted pro rata basis.
(iii) Application to Revolving Loans and Revolving
Commitments. Any mandatory prepayment which, pursuant to Section 2.7(c)(ii), is
to be applied to the Revolving Loans shall cause the Revolving Commitment to be
immediately, automatically and permanently reduced by the amount of such
prepayment. Each such mandatory prepayment of the Revolving Loans shall be
applied to the subsequent Revolving Commitment reductions set forth in Section
2.1(b) in inverse order of maturity. No amount so prepaid may be reborrowed.
(iv) Application to Term Loan and Term Commitment. Any
mandatory prepayment which, pursuant to Section 2.7(c)(ii), is to be applied to
the Term Loan shall be applied to the principal installments due pursuant to
Section 2.2(c) in the inverse order of maturity. No amount so prepaid may be
reborrowed.
(d) Prepayment Premium. The Borrower shall pay to the
Administrative Agent, for the benefit of the Banks, the applicable Prepayment
Premium upon any prepayment or conversion (whether voluntary or involuntary) of
any LIBOR Loan not made on the last day of the applicable Interest Period.
2.8 Reserves or Deposit Requirements, etc. If at any time any
Regulatory Change (including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) shall impose any reserve and/or special
deposit requirement (other than reserves included in the LIBOR Reserve
Percentage, the effect of which is reflected in the interest rate of any LIBOR
Loan) against assets held by, or deposits in or for the amount of any loans by,
any Bank, and the result of the foregoing is to increase the cost (whether by
incurring a cost or adding to a cost) to such Bank of taking or maintaining
hereunder any LIBOR Loan or to reduce the amount of principal, interest or fees
received by such Bank with respect to any such Loan, then such Bank shall notify
the Administrative Agent and the Borrower of such occurrence. Thereafter, upon
demand by such Bank the Borrower shall pay to such Bank additional amounts
sufficient to compensate and indemnify such Bank for such increased cost or
reduced amount. A statement as to the increased cost or reduced amount as a
result of any event mentioned in this Section 2.8 shall be submitted by such
Bank to the Administrative Agent and the Borrower and shall, in the absence of
manifest error, be conclusive and binding as to the amount thereof.
2.9 Tax Law, Increased Costs, etc. In the event that by reason of
any Regulatory Change, any Bank shall, with respect to this Agreement or any
transaction under this Agreement, be subjected to any tax, levy, impost, charge,
fee, duty, deduction or withholding of any kind whatsoever (other than any tax
imposed upon the net income of such Bank and other than changes in franchise
taxes), and if any such measure or any other similar measure shall result in an
increase in the costs to such Bank of making or maintaining any LIBOR Loan or in
a reduction in the amount of principal or interest ultimately receivable by such
Bank in respect of such Loan, then such Bank shall notify the Administrative
Agent and the Borrower stating the
29
reasons therefor. The Borrower shall thereafter pay to such Bank within ten (10)
days after written demand such additional amounts as will compensate such Bank
for such increased cost or reduced amount. A statement as to any such increased
cost or reduced amount shall be submitted by such Bank to the Administrative
Agent and the Borrower and shall, in the absence of manifest error, be
conclusive and binding as to the amount thereof.
2.10 Eurodollar Deposits Unavailable or Interest Rate
Unascertainable. If any Bank determines that dollar deposits of the relevant
amount for the relevant Interest Period are not available to it in the
applicable Eurodollar market or that, by reason of circumstances affecting such
market, adequate and reasonable means do not exist for ascertaining the LIBOR
Rate applicable to such Interest Period, or that the LIBOR Rate does not
adequately reflect the cost to such Bank of making such Loan, as the case may
be, such Bank shall promptly give notice of such determination to the
Administrative Agent and the Borrower, and any request for a new LIBOR Loan or
notice of conversion of an existing Loan to a LIBOR Loan given thereafter or
previously given by the Borrower and not yet made or converted shall be deemed a
notice to make a Base Rate Loan.
2.11 Changes in Law Rendering LIBOR Loans Unlawful. If at any time
any Regulatory Change shall make it unlawful for any Bank to fund any LIBOR Loan
which it has committed to make hereunder with moneys obtained in the applicable
Eurodollar market, such Bank shall notify the Administrative Agent and the
Borrower, and the obligation of the Banks to fund such Loan shall, upon the
happening of such event, forthwith be suspended for the duration of such
illegality. If any such change makes it unlawful for any Bank to continue in
effect the funding in the applicable Eurodollar market of any LIBOR Loan
previously made by it hereunder, such Bank shall, upon the happening of such
event, notify the Administrative Agent and the Borrower thereof in writing
stating the reasons therefor, and the Borrower shall, on the earlier of (a) the
last day of the then current Interest Period or (b) if required by such
Regulatory Change on such date as shall be specified in such notice, either
convert all such Loans to Base Rate Loans or prepay all such Loans in full.
2.12 Funding. Any Bank may, but shall not be required to, make LIBOR
Loans hereunder with funds obtained outside the United States.
2.13 Indemnity. Without prejudice to any other provisions of
Sections 2.8 through Section 2.12 or to the obligation of the Borrower to pay
the Prepayment Premium pursuant to Section 2.7(d), but without duplication, the
Borrower hereby agrees to indemnify each Bank against any loss or expense which
it may sustain or incur as a consequence of the Borrower's failure to borrow any
LIBOR Loan requested pursuant to this Agreement, or the Borrower's failure to
continue any LIBOR Loan or convert any Base Rate Loan to a LIBOR Loan, in either
case after notice of such continuation or conversion shall have been given to
the Administrative Agent pursuant to Section 2.4(b), or any default by the
Borrower in payment when due of any amount due hereunder in respect of any LIBOR
Loan, including, without limitation, any premium or penalty actually incurred by
such Bank in respect of funds borrowed by it for the purpose of making or
maintaining such Loan, as determined by such Bank. A statement as to any such
loss or expense shall be submitted by such Bank to the Borrower for
30
payment under the aforesaid indemnification, with a copy to the Administrative
Agent, which statement shall, in the absence of manifest error, be conclusive
and binding as to the amount thereof.
2.14 Capital Adequacy. If any Bank shall determine that any
Regulatory Change regarding capital adequacy or compliance by such Bank (or its
lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) or any governmental authority, central
bank or comparable agency has the effect of reducing the rate of return on such
Bank's capital (or on the capital of such bank's holding company) as a
consequence of its obligations hereunder to a level below that which such Bank
(or its holding company) could have achieved but for such Regulatory Change or
compliance (taking into consideration such Bank's policies or the policies of
its holding company with respect to capital adequacy) by an amount which such
Bank deems to be material, then from time to time, within ten (10) days after
demand by such Bank, the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank (or its holding company) for such
reduction. Such Bank will designate a different lending office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole judgment of such Bank, be otherwise disadvantageous to
such Bank. A certificate of such Bank claiming compensation under this Section
2.14 and setting forth the additional amount to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods. Failure on the
part of any Bank to demand compensation for any reduction in return on capital
with respect to any period shall not constitute a waiver of such Bank's rights
to demand compensation for any reduction in return on capital in such period or
in any other period. The protection of this Section 2.14 shall be available to
each Bank regardless of any possible contention of the invalidity or
inapplicability of the law, regulation or other condition which shall have been
imposed.
2.15 Taxes. Without duplication of any other Section of this
Agreement, including, without limitation, Section 2.9, all sums payable by the
Borrower hereunder or under the Notes or in respect of the Letters of Credit,
whether of principal, interest, fees, expenses or otherwise, shall be paid in
full, free of any deductions or withholdings for any and all present and future
taxes, levies, imposts, stamps, duties, fees, assessments, deductions,
withholdings, and other governmental charges and all liabilities with respect
thereto (collectively referred to as "Taxes"). If Borrower shall pay directly to
all appropriate taxing authorities any and all present and future Taxes, and all
liabilities with respect thereto imposed by law or by any taxing authority on or
with regard to any aspect of the transactions contemplated by this Agreement or
the execution and delivery of this Agreement or the Notes or the issuance of the
Letters of Credit, except for any taxes or other liabilities that the Borrower
is contesting in good faith by appropriate proceedings, provided that the
Borrower hereby indemnifies the Administrative Agent and the Banks and holds
them harmless from and against any and all liabilities, fees or additional
expense with respect to or resulting from any delay in paying, or omission to
pay, Taxes. Within thirty (30) days after the payment by the Borrower of any
Taxes, upon request of the Administrative Agent the Borrower shall furnish the
Administrative Agent with the original or a certified copy of the receipt
evidencing payment thereof, together with any other information the
Administrative Agent may require to establish to its satisfaction that full and
timely payment
31
of such Taxes has been made. Each Bank shall notify the Borrower and the
Administrative Agent of any payment of Taxes required or requested of it and
shall give due consideration to any advice or recommendation given in response
thereto by the Borrower, and upon notice from such Bank that Taxes or any
liability relating thereto (including, without limitation, penalties and
interest) have been paid, the Borrower shall pay or reimburse such Bank therefor
within ten (10) days of such notice. The foregoing to the contrary
notwithstanding, in no event shall any Bank receive any amount pursuant to this
Section 2.15 in excess of the amount required to be paid by it in respect of any
Taxes. Without prejudice to the survival of any other agreement of the Borrower
hereunder, the agreements and obligations of the Borrower contained in this
Section 2.15 shall survive the payment in full of principal and interest
hereunder and under the Notes.
2.16 Incremental Commitment. At any time prior to September 30,
2000, the Borrower may solicit from the Banks an incremental commitment of up to
$100,000,000 (in $25,000,000 increments) in the form of (a) a senior secured
reducing revolving credit or, (b) with the consent of the Required Banks, a term
credit facility pursuant to which no more than $75,000,000 of the incremental
commitment (in $25,000,000 increments) may be term loans which will be secured
pari passu with the Obligations, in each case, in form and substance similar to
the existing credit facilities hereunder; provided, however, that any such
incremental commitment shall be discretionary on the part of the Banks, and no
Bank shall be obligated to increase its Commitments beyond the amount it has
agreed to as of the Closing Date. Any such increase shall be on terms and
conditions, such as the applicable interest rate and amortization, as may be
negotiated between the Borrower and the consenting Banks; provided, however,
that (i) the terms and conditions of such increase shall be no more favorable
than those set forth herein, (ii) any loan made under the increased commitment
shall have a longer average term to maturity than the Loans, and (iii) any term
loan made under the increased commitment shall mature no earlier than six (6)
months after the Maturity Date. Upon any such increase, the Borrower shall enter
into any amendments and modifications to this Agreement and the Loan Documents
as the Administrative Agent may request to reflect such increase and such
additional terms and conditions.
SECTION 3. INTEREST; PAYMENTS.
3.1 Interest.
(a) Subject to Section 3.1(c), prior to maturity, LIBOR
Loans shall bear interest at the LIBOR Rate, plus the Applicable Margin, and
Base Rate Loans shall bear interest at the Base Rate, plus the Applicable
Margin.
(b) The Applicable Margin shall be determined by the
Administrative Agent quarterly, and upon the making of each Loan and the
issuance of each Letter of Credit, as applicable, based on the financial
statements and the Compliance Certificate delivered to the Banks pursuant to
Sections 7.5(b) and (d) (in the case of a quarterly determination) and the
Compliance Certificate delivered pursuant to Section 6.13(c) (in the case of the
determination of the Applicable Margin upon the making of a Loan or the issuance
of a Letter of Credit). Any change in the interest rate on the Loans due to a
change in the Applicable Margin shall be
32
effective on the fifth (5th) Banking Day after delivery of such financial
statements or compliance certificate; provided, however, that if any such
quarterly financial statements and Compliance Certificate indicate an increase
in the Applicable Margin and such financial statements and certificate are not
provided within the time period required in Section 7.5(b), the increase in the
interest rate due to such increase in the Applicable Margin shall be effective
as of the fifth (5th) Banking Day after the date on which such financial
statements and certificate were due. Until delivery of financial statements for
the first (1st) fiscal quarter of the Borrower ending after the Closing, for
purposes of calculating the Applicable Margin, the Leverage Ratio shall be
determined, after giving effect to the Loans made on and after the Closing Date,
from the certificate delivered to the Administrative Agent pursuant to Section
6.13(b). The Borrower shall deliver to the Banks with each set of quarterly
financial statements which indicate a change in the Applicable Margin a notice
with respect to such change, which notice shall set forth the calculation of,
and the supporting evidence for, such change.
(c) Upon the occurrence of any Event of Default, the entire
outstanding principal amount of each Loan and (to the extent permitted by law)
unpaid interest thereon and all other amounts due hereunder shall bear interest,
from the date of occurrence of such Event of Default until the earlier of the
date such Loan is paid in full and the date on which such Event of Default is
cured or waived in writing, at the Default Interest Rate which shall be payable
upon demand.
(d) Interest shall be computed on a three hundred sixty
(360) day year basis calculated for the actual number of days elapsed. Interest
accred on each Base Rate Loan shall be paid quarterly in arrears on each
Quarterly Date after the date hereof until such Loan is paid in full, and
interest accrued on each LIBOR Loan shall be paid on the last day of the
Interest Period thereof and on the date such Loan is paid in full and, in
addition, if such Interest Period has a duration of more than three (3) months,
on each day that occurs during such Interest Period that is three (3), six (6)
or nine (9) months from the first day of such Interest Period.
(e) The rate of interest payable on any Note from time to time
shall in no event exceed the maximum rate, if any, permissible under applicable
law. If the rate of interest payable on any Note is ever reduced as a result of
the preceding sentence and any time thereafter the maximum rate permitted by
applicable law shall exceed the rate of interest provided for on such Note,
then the rate provided for on such Note shall be increased to the maximum rate
permitted by applicable law for such period as is required so that the total
amount of interest received by the holder of such Note is that which would have
been received by such holder but for the operation of the preceding sentence.
3.2 Manner of Payments.
(a)...Prior to each Quarterly Date and the end of each
Interest Period, the Administrative Agent shall render a statement to the
Borrower of all amounts due to the Banks for principal, interest and fees
hereunder. All amounts listed on each such statement shall be due and payable on
the Quarterly Date or, for LIBOR Loans, the last day of such Interest Period, in
respect of which such statement was sent. As to all other Obligations which
become
33
due and payable other than on a fixed date by their terms, the Administrative
Agent shall advise the Borrower by a written statement that they are due and
payable, and the Borrower shall pay the same within five (5) days of receipt of
such statement. Any failure by the Administrative Agent to render any such
statement or give any such advice shall in no way relieve the Borrower of any
liability for or obligation to pay any amount due and payable hereunder.
(b) Whenever any payment to be made hereunder, including,
without limitation, any payment to be made on a Note, shall be stated to be due
on a day which is not a Banking Day, such payment may be made on the next
succeeding Banking Day, and such extension of time shall in each case be
included in the computation of the interest payable on such Note; provided,
however, that if such extension of time would cause payment of interest on or
principal of a LIBOR Loan to be made in the next calendar month, such payment
shall be made on the next preceding Banking Day.
(c) Unless otherwise provided in this Agreement, all
payments or prepayments made or due hereunder or under the Notes shall be made
in immediately available funds by federal funds wire transfer, and without
setoff, deduction or counterclaim, to the Administrative Agent prior to 11:00
a.m., Charlotte, North Carolina time, on the date when due, at the
Administrative Agent's Office. Funds received after 1:00 p.m., Charlotte, North
Carolina time, shall be deemed to have been received on the next Banking Day. To
the extent any such payment is made for the ratable benefit of the Banks, the
Administrative Agent shall promptly distribute such payment to the Banks in
accordance with their respective Ratable Shares.
SECTION 4. CLOSING.
The closing of the first Loan to be made hereunder and the other
transactions contemplated hereby shall take place at the offices of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, 2300 International Tower, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ on July 31, 1998, or at such other place or on such other date as to which
the parties hereto may agree (the "Closing" and the "Closing Date"). Subject to
the terms and conditions hereof, upon the fulfillment or waiver in writing of
all the conditions precedent set out in Section 6, and the delivery to the
Administrative Agent of the Notes, the Banks shall make such Revolving Loans and
the Term Loan and issue such Letters of Credit as the Borrower may request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
To induce the Banks to enter into this Agreement and to make the Loans and
issue the Letters of Credit, the Borrower represents and warrants as follows:
5.1 Organization and Powers.
(a) The Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Georgia. The
Borrower is duly qualified or registered to conduct business and in good
standing under the laws of each other jurisdiction in which the character of its
business or the ownership of its assets makes such qualification
34
or registration necessary, except where failure to so qualify or register could
not reasonably be expected to have a Material Adverse Effect. The Borrower has
all requisite power and authority to own and operate its properties, to carry on
its business as now conducted and proposed to be conducted, to enter into and
perform the ▇▇▇▇▇ Purchase Agreement, the Like-Kind Exchange Agreement, this
Agreement, the Loan Documents to which it is a party and all other documents to
be executed by it in connection with the transactions contemplated hereby and
thereby, to acquire the additional Stations pursuant to the ▇▇▇▇▇ Purchase
Agreement and the Like-Kind Exchange Agreement and to carry out the terms hereof
and thereof.
(b) As of the date hereof, the Borrower has no Subsidiaries
other than the Subsidiaries listed on Schedule 3 attached hereto. Each
Subsidiary is a corporation, duly organized, validly existing and in good
standing under the laws of its State of incorporation and is duly qualified and
in good standing under the laws of each other jurisdiction in which the
character of its business or the ownership of its assets makes such
qualification or registration necessary, except where failure to so qualify or
register could not reasonably be expected to have a Material Adverse Effect.
Each Subsidiary is a direct or indirect, wholly-owned Subsidiary of the
Borrower. Each Subsidiary has all requisite power and authority to own and
operate its properties, to carry on its business as now conducted and proposed
to be conducted, to enter into and perform the Loan Documents to which it is a
party and all other documents to be executed by it in connection with the
transactions contemplated hereby and thereby and to carry out the terms hereof
and thereof.
5.2 Authorization. All necessary corporate, shareholder or other
actions on the part of the Borrower and its Subsidiaries to authorize the
execution and delivery of the ▇▇▇▇▇ Purchase Agreement, the Like-Kind Exchange
Agreement, this Agreement and the Loan Documents and the performance of the
respective obligations of the Borrower and its Subsidiaries herein and therein
have been taken. The ▇▇▇▇▇ Purchase Agreement, the Like-Kind Exchange Agreement,
this Agreement and each Loan Document have been duly authorized, executed and
delivered by each of the Borrower and its Subsidiaries and are valid and legally
binding upon each of the Borrower and its Subsidiaries, to the extent it is a
party thereto, and enforceable in accordance with their respective terms, except
to the extent that the enforceability hereof and thereof may be limited by
bankruptcy, insolvency or like laws affecting creditors rights generally and by
the application of general equitable principles.
5.3 Financial Statements. The Borrower has delivered to the
Administrative Agent and the Banks the following (collectively, the "Financial
Statements"): (a) the audited consolidated financial statements of the Borrower
and its Subsidiaries for the fiscal year ended December 31, 1997, (b) the
audited financial statements of ▇▇▇▇▇ Broadcasting for the fiscal year ended
December 31, 1997, (c) the unaudited consolidated financial statements of the
Borrower and its Subsidiaries as of March 31, 1998, and for the three (3) month
period then ended, and (d) the unaudited financial statements of ▇▇▇▇▇
Broadcasting as of March 31, 1998, and for the three (3) month period then
ended. The Financial Statements are true and complete in all material respects
(including, without limitation, a disclosure of all material contingent
liabilities) and present fairly the financial condition and results of
operations of the Borrower and its Subsidiaries, or ▇▇▇▇▇ Broadcasting, as the
case may be, as of the dates and for the periods
35
indicated and have been prepared in accordance with GAAP, subject in the case of
statements for interim periods to normal year-end adjustments and the absence of
footnotes.
5.4 Projections. The Borrower has delivered to the Administrative
Agent and the Banks the Borrower's projections for the fiscal years 1997 through
2005. Such projections assume the consummation of the transactions contemplated
in the Registration Statements referenced in Section 5.27(c), the ▇▇▇▇▇ Purchase
Agreement, and the Like-Kind Exchange Agreement were prepared by the Borrower in
good faith on the basis of assumptions the Borrower believes were reasonable in
light of the conditions existing at the time of preparation thereof and remain
reasonable as of the date hereof, and as of the date hereof there are no facts
which are known to the Borrower which the Borrower believes would cause a
material adverse change in such projections.
5.5 Capitalization of the Borrower and its Subsidiaries. The
Borrower has delivered to the Administrative Agent and the Lenders statements
setting forth the capitalization of the Borrower and the Subsidiaries as of the
Closing Date and all of the issued and outstanding shares of Capital Stock of
the Subsidiaries are owned as set forth on Schedule 4 attached hereto. Schedule
4 attached hereto identifies each License Subsidiary and, with respect to each
other Subsidiary, the Stations, Newspapers or other businesses owned and
operated by such Subsidiary. All of the issued and outstanding Capital Stock of
the Borrower and of each Subsidiary has been duly and validly issued and is
fully paid and nonassessable. All of the issued and outstanding Capital Stock of
each Subsidiary is free and clear of any Lien, charge, encumbrance or right or
option to purchase except for the Liens granted pursuant to the Subsidiary
Pledge Agreement and except for Liens that will be released on the Closing Date.
None of the Capital Stock of the Borrower or of any Subsidiary has been issued
in violation of the Securities Act of 1933, as amended, or the securities or
"Blue Sky" or any other applicable laws, rules or regulations of any applicable
jurisdiction. Except as set forth on Schedule 4 attached hereto, as of the
Closing Date, neither the Borrower nor any of its Subsidiaries has any
commitment or obligation, either firm or conditional, to issue, deliver,
purchase or sell, under any offer, option agreement, bonus agreement, purchase
plan, incentive plan, compensation plan, warrant, conversion rights, contingent
share agreement, shareholders agreement, partnership agreement or otherwise, any
shares of its Capital Stock, partnership interests or other equity securities or
securities convertible into shares of Capital Stock, partnership interests or
other equity securities.
5.6 Title to Properties; Patents, Trademarks, etc. The Borrower and
each of its Subsidiaries have, and will have after giving effect to the closings
under the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement, good
and marketable title to all of their assets, whether real or personal, tangible
or intangible, free and clear of any Liens or adverse claims, except Permitted
Liens. The Borrower and each of its Subsidiaries own or possess, and will own or
possess after giving effect to the closing under the ▇▇▇▇▇ Purchase Agreement
and the Like-Kind Exchange Agreement, the valid right to use all the patents,
patent applications, patent and know-how licenses, inventions, technology,
permits, trademark registrations and applications, trademarks, service marks,
trade names, copyrights, product designs, applications, formulae, processes,
circulation, and other subscriber lists, industrial property rights and licenses
36
and rights in respect of the foregoing used or necessary for the conduct of its
business (collectively, "proprietary rights"). The Borrower is not aware of any
existing or threatened infringement or misappropriation of (a) any such
proprietary rights of others by the Borrower or any of its Subsidiaries or (b)
any proprietary rights of the Borrower or any of its Subsidiaries by others.
5.7 Litigation; Proceedings. Except as disclosed on Schedule 5
attached hereto, there is no action, suit, complaint, proceeding, inquiry or
investigation at law or in equity, or by or before any court or governmental
instrumentality or agency, nor any order (including, without limitation, any
order to show cause or order of forfeiture), decree or judgment in effect,
pending or, to the best of the Borrower's knowledge, threatened against or
affecting the Borrower, any of its Subsidiaries, any Station (including, without
limitation, the Stations being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement
and Like-Kind Exchange Agreement), any Newspaper, the Porta Phone Business or
the Satellite Broadcasting Business, or any of the properties or rights relating
to any Station (including, without limitation, the Stations being acquired
pursuant to the ▇▇▇▇▇ Purchase Agreement and Like-Kind Exchange Agreement), any
Newspaper, the Porta Phone Business or the Satellite Broadcasting Business. None
of such actions, suits, complaints, proceedings, inquiries or investigations,
orders, decrees or judgments could reasonably be expected to have a Material
Adverse Effect. No Person has filed, or to the best of the Borrower's knowledge,
threatened to file, any material competing application, petition to deny or
other opposition against any application, including any renewal application,
filed or to be filed by the Borrower or any of its Subsidiaries.
5.8 Taxes. All Federal, state and local tax returns, reports and
statements (including, without limitation, those relating to income taxes,
withholding, social security and unemployment taxes, sales and use taxes, and
franchise taxes) required to be filed by the Borrower or any of its Subsidiaries
have been properly filed with the appropriate governmental agencies in all
jurisdictions in which such returns, reports and statements are required to be
filed, which returns, reports and statements are complete and accurate, and all
taxes and other impositions due and payable have been timely paid prior to the
date on which any fine, penalty, interest, late charge or loss may be added
thereto for non-payment thereof, except where contested in good faith and by
appropriate proceedings. As of the Closing Date, neither the Borrower nor any of
its Subsidiaries has filed with the Internal Revenue Service or any other
governmental authority any agreement or other document extending or having the
effect of extending the period for assessment or collection of any Federal,
state, local or foreign taxes or other impositions. All tax deficiencies
asserted or assessments made as a result of any examinations conducted by the
Internal Revenue Service or any other governmental authority relating to the
Borrower or any of its Subsidiaries have been fully paid or are being contested
in accordance with the provisions of Section 7.4. Proper and accurate amounts
have been withheld by the Borrower and its Subsidiaries from its employees for
all periods to fully comply with the tax, social security and unemployment
withholding provisions of the applicable Federal, state, local and foreign law.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are adequate.
37
5.9 Absence of Conflicts. The execution, delivery and performance of
the ▇▇▇▇▇ Purchase Agreement, the Like-Kind Exchange Agreement, this Agreement
and the Loan Documents and all actions and transactions contemplated hereby and
thereby will not (a) violate, be in conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under (i) any
provision of the Articles or Certificate of Incorporation or Bylaws or any
shareholders agreement or other organizational document of the Borrower or any
of its Subsidiaries, (ii) any arbitration award or any order of any court or of
any other governmental agency or authority binding on the Borrower or any of its
Subsidiaries, (iii) any License of the Borrower or any of its Subsidiaries or
under which the Borrower or any of its Subsidiaries operates or will operate
after giving effect to the closing under the ▇▇▇▇▇ Purchase Agreement or the
Like-Kind Exchange Agreement, (iv) any applicable law, rule, order or regulation
(including without limitation, (A) the Communications Act of 1934, as amended,
(B) any law, rule, regulation or policy of the FCC or any other Licensing
Authority or (C) Regulations T, U or X of the Board of Governors of the Federal
Reserve System or (v) any Operating Agreement, the Subordinated Note Indenture
or other material agreement, instrument or document relating to a Station
(including, without limitation, the Stations being acquired pursuant to the
▇▇▇▇▇ Purchase Agreement and Like-Kind Exchange Agreement), a Newspaper, the
Porta Phone Business or the Satellite Broadcasting Business or to which the
Borrower or any of its Subsidiaries is a party, or by which the Borrower or any
of its Subsidiaries or any of their properties is bound, or (b) result in the
creation or imposition of any Lien of any nature whatsoever, other than those
Liens arising hereunder or under the Loan Documents, upon any of the properties
of the Borrower or any of its Subsidiaries.
5.10 Indebtedness. As of the Closing Date, the Borrower has no
Indebtedness of any nature, whether due or to become due, absolute, contingent
or otherwise, including, without limitation, Indebtedness for taxes and any
interest or penalties relating thereto, which exceeds in the aggregate,
$150,000, except (a) the liability to pay legal and accounting fees and
reasonable closing expenses in connection with this Agreement, the ▇▇▇▇▇
Purchase Agreement and the Like-Kind Exchange Agreement, (b) the Obligations,
(c) Indebtedness under the Subordinated Note Indenture and the notes issued
pursuant thereto, (d) Indebtedness incurred in the ordinary course of business
since June 30, 1997, (e) as disclosed in the Financial Statements, and (f) as
disclosed on Schedule 6 attached hereto.
5.11 Compliance. Except as disclosed in Schedule 7 attached hereto,
neither the Borrower nor any of its Subsidiaries, nor the ownership,
construction or operation of any Station (including, without limitation, the
Stations being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement and Like-Kind
Exchange Agreement), Newspaper, the Porta Phone Business or the Satellite
Broadcasting Business is in material violation of its Articles or Certificate of
Incorporation, its Bylaws, any License or any statute, ordinance, law, rule,
regulation or order of the United States of America or the FCC (including,
without limitation, applicable federal laws and the rules, regulation, policies
and orders of the FCC relating to foreign ownership restrictions or to
limitations on the nature and number of media outlets that may be held under
common ownership or control), the Federal Aviation Administration or any other
federal, state, county, municipal or other governmental agency or authority
applicable to the Borrower or any of its Subsidiaries, their properties, the
ownership, construction or operation of any Station (including,
38
without limitation, the Stations being acquired pursuant to the ▇▇▇▇▇ Purchase
Agreement and Like-Kind Exchange Agreement), Newspaper, the Porta Phone Business
or the Satellite Broadcasting Business or the conduct of their business. Neither
the Borrower nor any of its Subsidiaries nor the ownership, construction or
operation of any Station (including, without limitation, the Stations being
acquired pursuant to the ▇▇▇▇▇ Purchase Agreement and Like-Kind Exchange
Agreement), any Newspaper, the Porta Phone Business or the Satellite
Broadcasting Business is in violation or has breached in any material respect
the provisions of the Subordinated Note Indenture or any indenture, License,
Operating Agreement, note, lease or other agreement, instrument or document to
which it is a party or by which it is bound, nor does there exist any material
default, or any event or condition which, upon notice or lapse of time, or both,
would become a material default, under the Subordinated Note Indenture or any
indenture, License, Operating Agreement, note, lease, or other agreement,
instrument or document. The Borrower and each of its Subsidiaries have the legal
right and authority to conduct their respective businesses as now conducted or
proposed to be conducted.
5.12 Statements Not Misleading. No statement, representation or
warranty made by the Borrower or any of its Subsidiaries in or pursuant to this
Agreement or the Schedules or Exhibits attached hereto or any of the Loan
Documents contains any untrue statement of a material fact, nor omits to state a
material fact necessary to make such statement not misleading in light of the
circumstances under which such statement was made, or otherwise violates any
federal or state securities laws, rules or regulations. There is no fact known
to the Borrower (other than matters of a general economic nature or relating to
the broadcasting and newspaper industries generally) that has had or could
reasonably be expected to have a Material Adverse Effect.
5.13 Consents or Approvals. No consent, approval or authorization
of, or filing, registration or qualification with, any governmental authority or
any other Person (including, without limitation, the FCC and any other Licensing
Authority) is required to be obtained by the Borrower or any of its Subsidiaries
in connection with the execution, delivery or performance of the Subordinated
Note Indenture, the ▇▇▇▇▇ Purchase Agreement, the Like-Kind Exchange Agreement,
this Agreement or any of the Loan Documents, including, without limitation, in
connection with the granting of Liens in the assets of the Borrower or in the
Capital Stock and the assets of its Subsidiaries, which has not already been
obtained or completed, except for (a) the filing with the FCC of this Agreement
and certain of the Loan Documents pursuant to FCC rules, which shall be
accomplished within the required time period after the Closing, (b) the filing
of financing statements, the Mortgages and other actions expressly required to
be taken pursuant to the Loan Documents, and (c) the consent of the FCC to the
extent required in connection with the exercise by the Administrative Agent or
the Banks of their rights and remedies hereunder or under the Loan Documents.
5.14 Material Contracts and Commitments. Schedule 8 attached hereto
contains a true and complete description of all material contracts and
commitments of the Borrower or any of its Subsidiaries or which relate to a
Station (including, without limitation, the Stations being acquired pursuant to
the ▇▇▇▇▇ Purchase Agreement and Like-Kind Exchange Agreement), a Newspaper, the
Porta Phone Business or the Satellite Broadcasting Business as of
39
the Closing Date, after giving effect to the closing under the ▇▇▇▇▇ Purchase
Agreement and the Like-Kind Exchange Agreement, whether oral or written,
including, without limitation, (a) any security agreement, pledge agreement,
mortgage or guaranty; (b) any material management, construction supervision,
service or employment agreements, conditional sale contract or lease of personal
property; (c) any collective bargaining agreement; (d) any material contract or
commitment for the future purchase or sale of goods in excess of $200,000 in any
single case; (e) any contract or commitment which involves a material Capital
Expenditures in excess of $200,000 in any single case; (f) all Licenses; and (g)
all Operating Agreements. To the best of the Borrower's knowledge, except as
disclosed on Schedule 8 attached hereto, as of the Closing Date, all of the
items listed on Schedule 8 attached hereto are in full force and effect without
material default. Schedule 8 attached hereto further identifies each such
contract which requires consent to the granting of a Lien in favor of the
Administrative Agent for the benefit of the Banks on the rights of the Borrower
or its Subsidiaries under such contract. The Borrower has made available to the
Administrative Agent true and complete copies of each of the above.
5.15 Employee Benefit Plans. Schedule 9 attached hereto contains a
true and complete list of all Plans maintained by the Borrower or any member of
the Controlled Group. Neither the Borrower nor any member of the Controlled
Group has or will have, after giving effect to the closing under the ▇▇▇▇▇
Purchase Agreement and the Like-Kind Exchange Agreement, any liability, or
reasonably anticipates any liability, of any kind (including any withdrawal
liability under Section 4201 of ERISA) which is in excess, in the aggregate, of
$250,000 and which is more than one hundred twenty (120) days past due, to or in
respect of any Plan or Benefit Arrangement. With respect to the Plans and
Benefit Arrangements maintained by the Borrower or any member of the Controlled
Group: (a) each Plan that is intended to be qualified under Section 401(a) of
the Code is so qualified and has been so qualified since its adoption, and each
trust forming a part thereof is exempt from tax under Section 501(a) of the
Code; (b) each Plan complies in all material respects with all applicable
requirements of law, has been administered in accordance with its terms and all
required contributions have been made; (c) neither the Borrower nor any member
of the Controlled Group knows or has reason to know that the Borrower or any
member of the Controlled Group has engaged in a transaction which would subject
it to any material tax, penalty or liability under ERISA or the Code for any
prohibited transaction; (d) no Plan is subject to the minimum funding
requirements under Section 302 of ERISA or Section 412 of the Code, is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA), is a defined
benefit plan (as defined under Section 3(35) of ERISA or Code 414(j) of the
Code), or is a multiple employer plan (as defined in Section 4063 of ERISA). No
Plan or Benefit Arrangement maintained by the Borrower or any member of the
Controlled Group is a multiple employer welfare arrangement (as defined in
Section 3(40) of ERISA).
5.16 Licenses and Operating Agreements. The Licenses and Operating
Agreements shown on Schedule 10 attached hereto constitute all of the Licenses
and Operating Agreements which, as of the Closing Date, are necessary for the
lawful ownership, construction or operation of the Stations (including, without
limitation, the Stations being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement
and the Like-Kind Exchange Agreement), the Newspapers, the Porta Phone Business
and the Satellite Broadcasting Business and of the other businesses of the
40
Borrower and its Subsidiaries in the manner and to the full extent they are
currently owned, constructed or operated. Schedule 10 attached hereto sets forth
a correct and complete list, as of the Closing Date, of the expiration date of
each License and of each pending application for a License. Except as specified
on Schedule 10 attached hereto all of the Licenses relating to the Stations
(including, without limitation, the Stations being acquired pursuant to the
▇▇▇▇▇ Purchase Agreement and Like-Kind Exchange Agreement), Newspapers, the
Porta Phone Business or the Satellite Broadcasting Business and all other
Licenses of the Borrower and its Subsidiaries have been duly and validly issued
or assigned to and are legally held by the Borrower or one of its Subsidiaries
and are in full force and effect without condition except those of general
application. All such Licenses have been issued in compliance with all
applicable laws and regulations, are legally binding and enforceable in
accordance with their terms and are in good standing. The Borrower knows of no
facts or conditions which would constitute grounds for any Licensing Authority
to deny any pending application for a License, to suspend, revoke, materially
adversely modify, designate for a hearing, annul, fail to renew on or before its
renewal date, or renew for less than a full license period any License or to
impose a material financial penalty on the Borrower or any of its Subsidiaries.
5.17 Material Restrictions. Neither the Borrower nor any of its
Subsidiaries is a party to any agreement or other instrument or subject to any
other restriction which has had or could reasonably be expected to have a
Material Adverse Effect.
5.18 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries (a) is an investment company as that term is defined in the
Investment Company Act of 1940, as amended, (b) directly or indirectly controls,
or is directly or indirectly controlled by, a company which is an investment
company as that term is defined in such act or (c) is otherwise subject to
regulation under such act.
5.19 Absence of Material Adverse Effect. No Material Adverse Effect
has occurred since December 31, 1997.
5.20 Defaults. No Possible Default or Event of Default now exists or
will exist upon the making of any Loan.
5.21 Real Estate. Schedule 11 attached hereto lists all real estate
owned as of the Closing Date by the Borrower or any of its Subsidiaries and all
real estate which the Borrower or any Subsidiary will acquire pursuant to the
▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement and all leases
pursuant to which the Borrower or any of its Subsidiaries has acquired, as of
the Closing Date, or will acquire pursuant to the ▇▇▇▇▇ Purchase Agreement and
the Like-Kind Exchange Agreement, a leasehold interest in real estate. Schedule
11 lists the use of such owned and leased property in the Borrower's or its
Subsidiary's operations and the Borrower's good faith estimate of the fair
market value of each such parcel of owned real estate.
5.22 Securities Laws. No proceeds of any Loan will be used by the
Borrower or any of it Subsidiaries to acquire any security in any transaction
which is subject to Section 13
41
or 14 of the Securities Exchange Act of 1934, as amended. Neither the
registration of any security under the Securities Act of 1933, as amended, or
the securities laws of any state, nor the qualification of any indenture in
respect thereof under the Trust Indenture Act of 1939, as amended, is required
in connection with the consummation of this Agreement or the ▇▇▇▇▇ Purchase
Agreement and the Like-Kind Exchange Agreement or the execution and delivery of
the Notes.
5.23 Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrower or any of its Subsidiaries are in compliance
with the requirements of Section 7.3 and are in full force and effect. In the
past three (3) years neither the Borrower nor any of it is Subsidiaries has been
refused insurance for which it applied or had any policy of insurance terminated
(except at its own request).
5.24 Labor Matters. There are no material strikes, unfair labor
practice charges or other material labor disputes or grievances pending or, to
the best of the Borrower's knowledge, threatened against the Borrower, any of
its Subsidiaries or any Station (including, without limitation, the Stations
being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement and Like-Kind Exchange
Agreement), any Newspaper, the Porta Phone Business or the Satellite
Broadcasting Business. The Borrower has not received any written complaints or
knowledge or any threatened complaints, nor to the best of the Borrower's
knowledge, any such complaints on file with any Federal, state or local
governmental agency, alleging employment discrimination by the Borrower or any
of its Subsidiaries or in connection with any Station (including, without
limitation, the Stations being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement
and Like-Kind Exchange Agreement), any Newspaper, the Porta Phone Business or
the Satellite Broadcasting Business. All payments due under any collective
bargaining agreement to which the Borrower or any of its Subsidiaries is a party
have been paid or accrued as a liability on the books of the Borrower or such
Subsidiary.
5.25 Environmental Compliance.
Except as set forth in Schedule 12 attached hereto and after giving effect
to the consummation of the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange
Agreement:
(a) the Borrower and each of its Subsidiaries have obtained
all material permits, licenses and other authorizations which are required under
all Environmental Laws. The Borrower and each of its Subsidiaries are in
material compliance with all terms and conditions of all such permits, licenses
and authorizations and are also in material compliance with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules and timetables contained in any applicable Environmental
Law or in any regulation, code, plan, order, decree, judgment, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
including, without limitation, all Environmental Laws in all jurisdictions in
which the Borrower or such Subsidiary owns or operates a Station, a Newspaper, a
facility or site, arranges or has arranged for disposal or treatment of
Hazardous Materials, solid waste or other wastes, accepts or has accepted for
transport any Hazardous
42
Materials, solid waste or other wastes or holds or has held any interest in real
property or otherwise;
(b) no Environmental Claim has been issued, no complaint has
been filed, no penalty has been assessed and no litigation, proceeding,
investigation or review is pending or, to the best of the Borrower's knowledge,
threatened by any Person with respect to any alleged failure by the Borrower,
any of its Subsidiaries or any property owned by the Borrower or any Subsidiary
to comply with any Environmental Law or to have any permit, license or
authorization required in connection with the conduct of the business of the
Borrower or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, use disposal or Release of any
Hazardous Materials generated by the Borrower or any of its Subsidiaries or with
respect to any real property in which the Borrower or any of its Subsidiaries
hold or has held an interest or any past or present operation of the Borrower or
any of its Subsidiaries;
(c) there are no Environmental Laws requiring any material
work, repairs, construction, Capital Expenditures or other remedial work of any
nature whatsoever, with respect to any real property in which the Borrower or
any of its Subsidiaries holds or has held an interest or any past or present
operation of the Borrower or any Subsidiary;
(d) neither the Borrower nor any of its Subsidiaries has
handled any Hazardous Material, on any property now or previously owned or
leased by the Borrower or any of its Subsidiaries to an extent that it has, or
could reasonably be expected to have, a Material Adverse Effect;
(e) to the best of the Borrower's knowledge:
(i) no PCBs or asbestos is present at any property
now or previously owned or any premises now or previously leased by the
Borrower or any of its Subsidiaries;
(ii) no underground storage tanks for Hazardous
Materials, active or abandoned, are now or were previously operated at any
property now or previously owned by the Borrower or any of its Subsidiaries,
and, with respect to premises now or previously leased by the Borrower or any of
its Subsidiaries, no underground storage tanks for Hazardous Materials, active
or abandoned, are now or were previously operated by the Borrower or any of its
Subsidiaries;
(iii) no Hazardous Materials have been Released, in a
reportable quantity, where such a quantity has been established by statute,
ordinance, rule, regulation or order, at, on or under any property now or
previously owned by the Borrower or any of its Subsidiaries; and
(iv) no Hazardous Materials have been otherwise Released
at, on or under any property now or previously owned or any premises now or
previously leased by
43
the Borrower or any of its Subsidiaries to an extent that it has, or could
reasonably be expected to have, a Material Adverse Effect;
(f) neither the Borrower nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous Material to any
location that is listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), listed for possible inclusion of the NPL by the
Environmental Protection Agency in the Comprehensive Environmental Response and
Liability Information System, as provided for by 40 C.F.R. ss.300.5 ("CERCLIS"),
or on any similar state or local list or that is the subject of Federal, state
or local enforcement actions or other investigations that may lead to
Environmental Claims against the Borrower or any of its Subsidiaries;
(g) no Hazardous Material generated by the Borrower or any
of its Subsidiaries has been recycled, treated, stored, disposed of or Released
by the Borrower or any of its Subsidiaries at any location;
(h) no oral or written notification of a Release of a
Hazardous Material has been given or filed by or on behalf of the Borrower or
any of its Subsidiaries and no property now or previously owned or premises
leased by the Borrower or any of its Subsidiaries is listed or proposed for
listing on the National Priorities list promulgated pursuant to CERCLA, on
CERCLIS or on any similar state list of sites requiring investigation or
cleanup;
(i) there are no Liens arising under or pursuant to any
Environmental Laws or any of the property owned or premises leased by the
Borrower or any of its Subsidiaries, and no government actions have been taken
or are in process which could subject any of such property to such Liens, and
neither the Borrower nor any of its Subsidiaries would be required to place any
notice or restriction relating to the presence of Hazardous Materials at any
property owned by it in any deed to such property;
(j) neither the Borrower nor any of its Subsidiaries has
retained or assumed any liabilities (contingent or otherwise) in respect to any
Environmental Claims under the terms of any contract or agreement or by
operation of law as a result of the sale of assets or stock; and
(k) there have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or which are in
the possession of the Borrower or any of its Subsidiaries in relation to any
property or facility now or previously owned or leased by the Borrower or such
Subsidiary which has not been made available to the Banks.
5.26 Solvency. The Borrower has received, or has the right hereunder
to receive, consideration which is the reasonably equivalent value of the
obligations and liabilities that the Borrower has incurred to the Banks. The
Borrower is not insolvent as defined in Section 101 of Title 11 of the United
States Code or any applicable state insolvency statute, nor, after giving effect
to the consummation of the transactions contemplated herein, in the ▇▇▇▇▇
44
Purchase Agreement, the Like-Kind Exchange Agreement, and in the Subordinated
Note Indenture, will the Borrower be rendered insolvent by the execution and
delivery of this Agreement, the Notes or the Loan Documents to the Banks. The
Borrower is not engaged or about to engage in any business or transaction for
which the assets retained by it shall be an unreasonably small capital, taking
into consideration the obligations to the Banks incurred hereunder. The Borrower
does not intend to, nor does it believe that it will, incur debts beyond its
ability to pay them as they mature.
5.27 ▇▇▇▇▇ Purchase Agreement, Like-Kind Exchange Agreement,
Subordinated Note Indenture and Registration Statements.
(a) The Borrower has provided to the Administrative Agent a
complete and correct copy of each of the ▇▇▇▇▇ Purchase Agreement and the
Like-Kind Exchange Agreement. All of the representations and warranties of the
Borrower and, to the best of the Borrower's knowledge, each other party thereto
in the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement are true
and correct in all material respects as of the date hereof as if given as of the
date hereof and will be true and correct in all material respects as of the
Closing Date as if given as of such date. No party to the ▇▇▇▇▇ Purchase
Agreement or the Like-Kind Exchange Agreement has given notice of any breach of
its representations, warranties or covenants therein. All of the representations
and warranties of the Borrower in this Section 5 shall be deemed to be given
after giving effect to the consummation of the closing under the ▇▇▇▇▇ Purchase
Agreement, and the television stations being acquired pursuant to the ▇▇▇▇▇
Purchase Agreement and the Like-Kind Exchange Agreement shall be deemed to be
Stations for all purposes of these representations and warranties.
(b) The Borrower has provided to the Administrative Agent a
complete and correct copy of the Subordinated Note Indenture and the notes and
other agreements and documents executed and delivered pursuant thereto. All of
the representations and warranties of the Borrower in the Subordinated Note
Indenture are true and correct in all material respects as of the date hereof as
if given as of the date hereof, and will be true and correct in all material
respects as of the Closing Date as if given as of such date, and no default or
event of default exists thereunder or will exist after giving effect to the
making of any Loan or the issuance of any Letter of Credit hereunder. The
Subordinated Note Indenture has not been amended or modified, and no provisions
thereof have been waived.
(c) The Borrower has provided to the Administrative Agent
complete and correct copies of (i) the Registration Statement on Form S-1
(Registration No. 333-4338) relating to the notes issued pursuant to the
Subordinated Note Indenture and (ii) the Registration Statement on Form S-1
(Registration No. 333-4340) relating to the Borrower's issuance of 3,500,000
shares of its Class B Common Stock. No statement, representation or warranty
made in either such Registration Statement (including the prospectus contained
therein) contains any untrue statement of a material fact, nor omits to state a
material fact necessary to make such statement not misleading in light of the
circumstances under which such statement was made, or otherwise violates any
federal or state securities laws, rules or regulations.
45
5.28 License Subsidiaries. Neither the Borrower nor any of its
Subsidiaries (other than License Subsidiaries) holds any License issued by the
FCC. No License Subsidiary (a) has any Indebtedness (other than pursuant to the
Subsidiary Guaranty and the Subsidiary Security Agreement executed by such
License Subsidiary and the subordinated guaranty executed by such License
Subsidiary pursuant to the Subordinated Note Indenture), (b) has any assets
other than FCC Licenses, (c) is a party to or bound by any contract or
agreement, (d) conducts any business or (e) has any employees, and there are no
Liens of any nature whatsoever on any of the property or assets of any License
Subsidiary except in favor of the Administrative Agent, for the benefit of the
Banks. All of the Licenses issued by the FCC in connection with the ownership
and operation of the Stations (including, without limitation, the Stations
being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement and the Like-Kind
Exchange Agreement), the Porta Phone Business and the Satellite Broadcasting
Business, have been, or at the closing under the ▇▇▇▇▇ Purchase Agreement and
the Like-Kind Exchange Agreement will be, duly assigned to a Licensed
Subsidiary.
5.29 Year 2000 Compliance. The Borrower has (i) initiated a review
and assessment of substantially all areas within its and each of its
Subsidiaries' business and operations, or will initiate a review and assessment
in all remaining areas by December 31, 1998 (including those affected by
suppliers, vendors and customers) that could be adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications used by the Borrower
or any of its Subsidiaries (or suppliers, vendors and customers) may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with that timetable. Based on the
foregoing, the Borrower believes that all computer applications (including those
of its suppliers, vendors and customers) that are material to its or any of its
Subsidiaries' businesses and operations are reasonably expected by June 30, 1999
to be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, be "Year 2000 Complaint", except to the extent
that a failure to do so could not reasonably be expected to have a Materially
Adverse Effect.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS.
The obligations of the Banks to make any Loan or to issue or renew any
Letter of Credit and the performance by the Banks of the other actions to be
taken by them on or after the Closing Date are subject to the fulfillment or
waiver in writing of each of the following conditions precedent. The Borrower
shall deliver to the Administrative Agent copies for each Bank of each document,
instrument or other item to be delivered pursuant to this Section 6.
6.1 Compliance. All of the representations and warranties of the
Borrower and its Subsidiaries herein and in the Loan Documents shall be true and
correct on and as of the Closing Date and the date of any subsequent Loan (other
than a Loan resulting from the funding of a Letter of Credit) or the issuance or
renewal of a Letter of Credit, as if made on and as of such date and time before
and after giving effect to the making of the proposed loan or the issuance of
the proposed Letter of Credit, except to the extent that such representations
and warranties
46
expressly relate to an earlier date, in which case such representations and
warranties shall be true and correct as of such earlier date. The Borrower and
its Subsidiaries shall have performed and shall be in compliance with all the
applicable terms and provisions of this Agreement and the Loan Documents and no
Possible Default or Event of Default shall have occurred and be continuing, on
and as of the Closing Date and the date of any subsequent Loan (other than a
Loan resulting from the funding of a Letter of Credit) or the issuance or
renewal of a Letter of Credit, before and after giving effect to the making of
the proposed Loan or the issuance of the proposed Letter of Credit. On the
Closing Date, the Borrower shall deliver to the Banks a certificate, dated as of
the Closing Date and signed by an executive officer of the Borrower certifying
compliance with the conditions of this Section 6.1. Each request by the Borrower
for a Loan or the issuance of a Letter of Credit shall, in and of itself,
constitute a representation and warranty that the Borrower, as of the date of
such Loan, is in compliance with this Section 6.1.
47
6.2 Security Agreements.
(a) The Borrower shall have executed and delivered to the
Administrative Agent a Borrower Security Agreement granting to the
Administrative Agent, for the benefit of the Banks, a first priority security
interest in substantially all of the Borrower's personal property, including,
without limitation, the property acquired pursuant to the ▇▇▇▇▇ Purchase
Agreement and the Like-Kind Exchange Agreement; and the Borrower Security
Agreement, or supplement thereto and the security interests granted pursuant
thereto, shall be in full force and effect.
(b) Each Subsidiary shall have executed and delivered to the
Administrative Agent a Subsidiary Security Agreement granting to the
Administrative Agent, for the benefit of the Banks, a first priority security
interest in substantially all of each Subsidiary's personal property, including,
without limitation, the property acquired pursuant to the ▇▇▇▇▇ Purchase
Agreement and the Like-Kind Exchange Agreement; and each Subsidiary Security
Agreement, or supplement thereto and the security interests granted pursuant
thereto, shall be in full force and effect.
6.3 Pledge Agreements.
(a) The Borrower shall have executed and delivered to the
Administrative Agent a Borrower Pledge Agreement granting to the Administrative
Agent, for the benefit of the Banks, a first priority security interest in all
of the issued and outstanding Capital Stock of each of the Borrower's direct
Subsidiaries; the Borrower shall have delivered to the Administrative Agent
stock certificates evidencing all of such Capital Stock and stock powers, duly
endorsed in blank, with respect thereto; the Borrower shall have taken all
actions as may be required to effect the grant and perfection of the
Administrative Agent's security interest in such Capital Stock; and the Borrower
Pledge Agreement, or supplement thereto, and the security interests granted
pursuant thereto, shall be in full force and effect.
(b) Each Subsidiary of the Borrower which has a Subsidiary
shall have executed and delivered to the Administrative Agent a Subsidiary
Pledge Agreement granting to the Administrative Agent, for the benefit of the
Banks, a first priority security interest in all of the issued and outstanding
Capital Stock of each Subsidiary owned by such Subsidiary; each such Subsidiary
shall have delivered to the Administrative Agent stock certificates evidencing
all of such Capital Stock and stock powers, duly endorsed in blank, with respect
thereto; each such Subsidiary shall have taken all actions as may be required to
effect the grant and perfection of the Administrative Agent's security interest
in such Capital Stock; and each Subsidiary Pledge Agreement or supplement
thereto, and the security interests granted pursuant thereto, shall be in full
force and effect.
6.4 Real Estate Matters.
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(a) With respect to each parcel of real property owned by
the Borrower or any of its Subsidiaries, to the extent requested by the
Administrative Agent, the Borrower or such Subsidiary shall, with respect to
real property owned or to be acquired as of the Closing Date on or prior to the
Closing Date, and, with respect to real property thereafter acquired, promptly
after acquisition thereof, have executed and delivered a first priority mortgage
or deed of trust, in form and substance satisfactory to the Administrative
Agent, covering such parcel of real property. With respect to each parcel of
real property leased by the Borrower or any of its Subsidiaries, to the extent
requested by the Administrative Agent, the Borrower or such Subsidiary shall (on
or prior to the Closing Date with respect to leases held or to be acquired as of
the Closing Date and, with respect to leases thereafter acquired, promptly after
acquisition thereof) have executed and delivered a first priority leasehold
mortgage or collateral assignment of lease, in form and substance satisfactory
to the Administrative Agent, covering such leasehold interest. Such mortgages,
deeds of trust, leasehold mortgages and collateral assignments of leases may be
referred to hereinafter collectively as the "Mortgages". Each Mortgage shall
have been duly recorded, and the Borrower shall have paid all taxes, fees or
charges incurred in connection with the execution or recording thereof.
(b) The Borrower shall have procured and delivered to the
Administrative Agent a commitment from a title insurance company satisfactory to
the Administrative Agent for an ALTA mortgagee's policy of title insurance (Form
1970 if available, or 1984 or 1990 with 1970 Endorsement) covering each parcel
of real estate owned by the Borrower or any of its Subsidiaries which is subject
to a Mortgage, which policy shall be for the benefit of the Administrative Agent
on behalf of the Banks and satisfactory to the Administrative Agent and shall
insure that such Mortgage is a valid first mortgage lien on the property covered
thereby. Such policy shall, to the extent available and appropriate: (i) insure
title to the real property and all recorded easements benefiting such real
property, (ii) contain an "Extended Coverage Endorsement" insuring over the
general exceptions contained customarily in such policy, (iii) contain an
endorsement insuring that the real property described in the title insurance
policy is the same real estate as shown on the survey delivered with respect to
such property, (iv) contain an endorsement insuring that each street adjacent to
the real property is a public street and that there is direct and unencumbered
pedestrian and vehicular access to such street from the real property, (v) if
the real property consists of more than one record parcel, contain a
"contiguity" endorsement, if applicable, insuring that all of the record parcels
are contiguous to one another, (vi) contain appropriate endorsements insuring
against encroachments, and (vii) contain a commercial revolving line of credit
endorsement insuring that advances made subsequent to the date of the title
insurance policy are included in the title coverage, not to exceed the face
amount of the title policy. No title indemnities shall be established in
connection with the issuance of the aforesaid lender's title insurance policy.
(c) With respect to each parcel of real property owned by
the Borrower or any of its Subsidiaries which is subject to a Mortgage, the
Borrower shall have procured and delivered to the Administrative Agent evidence
as to whether such parcel of property is located within a flood hazard area for
purpose of the National Flood Insurance Act of 1968, as amended.
49
(d) The Borrower shall obtain from each lessor under a
lease, in respect of which the Borrower or any of its Subsidiaries has granted
to the Administrative Agent a Mortgage or collateral assignment, written consent
to such grant in form and substance satisfactory to the Administrative Agent.
(e) The Borrower shall have provided to the Administrative
Agent copies of (i) phase I environmental surveys, acceptable to the
Administrative Agent, conducted by a company acceptable to the Administrative
Agent, with respect to each parcel of real estate acquired pursuant to the ▇▇▇▇▇
Purchase Agreement which is subject to a Mortgage, (ii) to the extent available,
all environmental surveys or audits performed during the past five (5) years in
connection with each of the parcels of real estate which is subject to a
Mortgage, and the results of any existing search of the public records of the
authorities in the relevant jurisdictions responsible for environmental matters
with respect to any proceeding or action affecting any parcel of real estate
which is subject to a Mortgage and (iii) such other evidence concerning
compliance (both past and present) with Environmental Laws by the Borrower and
its Subsidiaries as the Administrative Agent may request. The results of each
phase I environmental survey shall be satisfactory to the Administrative Agent.
(f) The Administrative Agent shall have received a survey
(collectively, the "Surveys") of each parcel of real estate acquired pursuant to
the ▇▇▇▇▇ Purchase Agreement or the Like-Kind Exchange Agreement which is the
subject of a Mortgage, which survey shall be made in accordance with the
"Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys"
established and adopted by the American Land Title Associated and American
Congress on Surveying and Mapping in 1992, and meeting the accuracy requirement
of an "Urban" survey as defined therein, showing all buildings and other
improvements, if any, all encroachments, if any, all set-back lines, if any, and
all areas affected by any easements or other instruments of record, if any (the
recording data in respect of which shall be marked on the survey), containing
metes and bounds description of such parcel, setting forth the flood zone
designations, if any, in which such parcel is located.
6.5 Financing Statements. Any financing statements or fixture
filings required by the Security Agreements, the Pledge Agreements and the
Mortgages shall have been filed for record with the appropriate governmental
authorities.
6.6 Subsidiary Guaranty. Each Subsidiary shall have executed and
delivered to the Administrative Agent, for the benefit of the Banks, a
Subsidiary Guaranty pursuant to which such Subsidiary shall guarantee the
Obligations of the Borrower to the Banks.
6.7 Opinion of Borrower's Counsel. On the Closing Date, the
Administrative Agent shall have received the favorable written opinions of
special counsel to the Borrower and the Subsidiaries, of FCC counsel to the
Borrower and the Subsidiaries, and of local counsel in the States of Florida,
Georgia, Kentucky, Nebraska and Wisconsin, in each case dated the Closing Date,
addressed to the Banks and in form and substance satisfactory to the
Administrative Agent.
50
6.8 Consummation of ▇▇▇▇▇ Purchase Agreement and the Like-Kind
Exchange Agreement.
(a) The transactions contemplated by the ▇▇▇▇▇ Purchase
Agreement and the Like-Kind Exchange Agreement shall have been consummated, or
shall be consummated simultaneously with the making of the initial Loans
hereunder, without the waiver of any material term or condition by and party
thereto, and the FCC shall have issued its consent to the assignment of the FCC
Licenses relating to WALB-TV, WEAU-TV, KOLN-TV, and KGIN-TV, respectively.
Without limiting the foregoing sentence, the Borrower and such License
Subsidiaries shall have purchased or otherwise acquired pursuant to the ▇▇▇▇▇
Purchase Agreement and the Like-Kind Exchange Agreement substantially all of
the operating assets of WEAU-TV, KOLN-TV and KGIN-TV free and clear of all
Liens, except Permitted Liens. The consummation of the transactions
contemplated by the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange
Agreement shall be completed in a manner satisfactory to the Administrative
Agent, and the Administrative Agent shall have received conformed copies of
photocopies of all conveyance and other material documents relating thereto.
The Borrower shall use its best efforts to cause all opinions and certificates
delivered to the Borrower in connection with such closing to be addressed to
the Banks.
(b) The Borrower shall have delivered to the Administrative
Agent certified copies of the ▇▇▇▇▇ Purchase Agreement and the Like-Kind
Exchange Agreement and of all agreements, documents and instruments entered into
in connection therewith.
6.9 Subordinated Notes. The Borrower shall have delivered to the
Administrative Agent certified copies of the Subordinated Note Indenture and the
notes issued pursuant thereto. The Borrower shall have delivered evidence
satisfactory to the Administrative Agent that the requested Loan, or the stated
amount of the requested Letter of Credit, constitutes "Senior Debt" for all
purposes of the Subordinated Note Indenture.
6.10 Payment of Existing Indebtedness. The existing senior secured
indebtedness of the Borrower shall have been paid in full, the agreements and
instruments governing and evidencing such indebtedness shall have been
terminated and cancelled, all Liens in connection therewith shall have been
released and the instruments and documents related thereto shall be satisfactory
to the Administrative Agent and the Banks in their sole discretion.
6.11 Financial Information.
(a) Audits. The Borrower shall have delivered to the
Administrative Agent on or prior to the Closing Date (i) unaudited consolidated
financial statements for the three (3) month period ended March 31, 1998,
including consolidated balance sheets and income and expense statements, of the
Borrower and its Subsidiaries as of, and for the three (3) month period ended,
March 31, 1998, and the results of their operations during such period.
51
(b) Pro Forma Financial Statements. On the Closing Date, the
Borrower shall have delivered to the Administrative Agent (i) a consolidated pro
forma balance sheet and income statement, for the four (4) quarter period ended
June 30, 1998, after giving effect to closing under this Agreement, the ▇▇▇▇▇
Purchase Agreement, and the Like-Kind Exchange Agreement and (ii) a certificate
in form and substance satisfactory to the Administrative Agent showing in detail
the calculation of the Applicable Margin (using pro forma four (4) quarter
trailing cash flow as of June 30, 1998) after giving effect to the closings
under this Agreement, the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange
Agreement.
(c) Compliance Certificate. The Borrower shall have
delivered to the Administrative Agent a pro forma compliance certificate in form
and substance satisfactory to the Administrative Agent showing the Leverage
Ratio as the date of such borrowing or issuance of a Letter of Credit and the
Borrower's compliance with the financial covenants set forth in Section 8.
(d) Solvency Certificate. On the Closing Date, the Borrower
shall have delivered to the Administrative Agent a solvency certificate in form
and substance satisfactory to the Administrative Agent executed by the chief
financial officer of the Borrower.
6.12 Engineer's Report. On the Closing Date, the Borrower shall have
delivered to the Administrative Agent a detailed engineering report from the
Borrower's engineer, acceptable in form and substance to the Administrative
Agent, as to the construction, engineering, installation and operation of each
of the Stations, including, without limitation, the Stations being acquired
pursuant to the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement,
and its facilities and equipment. Such certificate shall also list any material
equipment problems at such Station and any material upgrades of equipment which
are currently, or which will within six (6) months be, required at such Station.
6.13 Due Diligence. The Administrative Agent and its counsel shall
have conducted a due diligence investigation of the Borrower, its Subsidiaries
and the businesses being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement and
the Like-Kind Exchange Agreement, and the results of such investigation shall
have been satisfactory to the Administrative Agent in all respects.
6.14 Borrowing Request. On the date of each Loan, the Borrower shall
have delivered to the Administrative Agent a borrowing request for such Loan in
form and substance satisfactory to the Administrative Agent, setting forth the
application of the proceeds of such Loan, evidence that such application is
permitted pursuant to Section 7.1, and showing the recipient, the amount of the
payment and the wire transfer instructions.
6.15 Insurance Certificates. On the Closing Date, the Borrower shall
have furnished to the Administrative Agent certificates of insurance together
with copies, if requested by the Administrative Agent, of all policies or other
satisfactory evidence that the insurance required by Section 7.3 is in full
force and effect.
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6.16 Corporate Documents. On the Closing Date, the Borrower
shall delivered to the Administrative Agent the following:
(a) certificates of good standing for each of the Borrower
and its Subsidiaries from the Secretary of State of the state of its
incorporation and from the Secretary of State of each other state in which the
Borrower or such Subsidiary is qualified or registered to do business, in each
case dated as of a date as near to the Closing Date as practicable;
(b) a certificate signed by the Secretary or Assistant
Secretary of the Borrower, dated as of the Closing Date, certifying that
attached thereto are true and complete copies of (i) the Articles of Certificate
of Incorporation and Bylaws of the Borrower and each Subsidiary, (ii)
resolutions adopted by the respective Boards of Directors of the borrower and
each of its Subsidiaries authorizing the execution, delivery and performance of
the ▇▇▇▇▇ Purchase Agreement, the Like-Kind Exchange Agreement, the Subordinated
Note Indenture, this Agreement, the Loan Documents and the Obligations;
(c) incumbency certificates for the Borrower and each
Subsidiary; and
(d) such other documents as any Bank may reasonably request
in connection with the proceedings taken by the Borrower or any of its
Subsidiaries authorizing this Agreement and the Loan Documents.
6.17 Lien Searches, Consents and Releases of Liens. The
Administrative Agent shall have received: (a) certified copies of UCC, judgment
and tax lien search reports for each jurisdiction in which the Borrower or any
Subsidiary owns any property or conducts any business listing all effective
financing statements and other Liens on any of the property of the Borrower or
such Subsidiary, (b) consents to the granting of Liens in all Operating
Agreements and other material contracts and leases of the Borrower and each of
its Subsidiaries (including, without limitation, any acquired pursuant to the
▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement), which by their
terms require such consent, and (c) releases of any existing Liens encumbering
any assets of the Borrower or any of its Subsidiaries (including assets being
acquired pursuant to the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange
Agreement), except for Permitted Liens.
6.18 No Order, Judgment or Decree. No order, judgment or decree of
any court, arbitrator or governmental authority shall purport to enjoin or
restrain the Banks from making the Loans.
6.19 No Material Adverse Effect. There shall have occurred no
Material Adverse Effect since December 31, 1997. No material disruption of or
material adverse change in financial, banking or capital markets shall have
occurred since March 31, 1998, and be continuing as of the Closing Date that, in
the Administrative Agent's reasonable judgment, would have a material adverse
effect on any Bank's ability to fund the initial Loans hereunder. No material
disruption of or material adverse change in the primary or secondary loan
syndication markets, shall have occurred since March 31, 1998, and be continuing
as of the
53
Closing Date that, in the Administrative Agent's reasonable judgment, would have
a material adverse effect on the syndication of the Loans.
6.20 Fee Letter; Fees and Expenses. The Borrower shall have paid all
fees, expenses and other amounts due pursuant hereto and pursuant to any Fee
Letter.
6.21 Legal Approval. All legal matters incident to this Agreement
and the consummation of the transactions contemplated hereby shall be
satisfactory to Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, Atlanta, Georgia,
special counsel to the Administrative Agent.
6.22 Other Documents. The Administrative Agent shall have received
all Loan Documents duly executed, and each Bank shall have received such other
certificates, opinions, agreements and documents, in form and substance
satisfactory to it, as it may reasonably request.
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower agrees with the Banks that so long as this Agreement shall
remain in effect or any of the Obligations shall remain unpaid or to be
performed or any Letter of Credit shall remain outstanding, it shall perform and
comply with the affirmative covenants contained in this Section.
7.1 Use of Proceeds. The Borrower shall use the proceeds of the
Loans only for the following purposes: (i) to finance the ▇▇▇▇▇ Purchase
Agreement, (ii) to fund Permitted Acquisitions and Permitted Investments, (iii)
to refinance Indebtedness outstanding under the Prior Loan Agreement, (iv) to
fund Capital Expenditures to the extent permitted by Section 8.7, (v) for
working capital and general corporate purposes (including the payment of closing
costs and expenses in connection with the ▇▇▇▇▇ Purchase Agreement, the
Like-Kind Exchange Agreement, and this Agreement), (vi) to redeem Preferred
Stock as permitted hereunder and (vii) to defease the ▇▇▇▇▇ Bonds and to finance
any fees associated with such defeasance.
7.2 Continued Existence; Maintenance of Rights and Licenses;
Compliance with Law. The Borrower shall, and shall cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its corporate existence and its material
rights and Licenses. Without limiting the generality of the foregoing, the
Borrower shall, and shall cause each of its Subsidiaries to, maintain in full
force and effect, until termination in accordance with their respective terms,
any and all Licenses, Operating Agreements and other material contracts and
other rights necessary to operate the Stations (including, without limitation,
the Stations being acquired under the ▇▇▇▇▇ Purchase Agreement and the Like-Kind
Exchange Agreement), the Newspapers, the Porta Phone Business and the Satellite
Broadcasting Business, not breach or violate the same in any material respect,
and take all actions which may be required to comply in all material respects
with all applicable laws, statutes, rules, regulations, orders and decrees now
in effect or hereafter promulgated by any governmental authority, including
without limitation, the FCC. The Borrower shall, and shall cause each of its
Subsidiaries to, obtain, renew and extend all of the foregoing rights, Licenses
and the like which may be necessary for the continuance of the operation of the
Stations
54
(including, without limitation, the Stations being acquired under the ▇▇▇▇▇
Purchase Agreement and the Like-Kind Exchange Agreement), the Newspapers, the
Porta Phone Business and the Satellite Broadcasting Business.
7.3 Insurance. The Borrower shall, and shall cause each of its
Subsidiaries to, keep its insurable properties insured to the full replacement
cost thereof at all times by financially sound and reputable insurers reasonably
acceptable to the Administrative Agent, and maintain such other insurance, to
such extent and against such risks, including, without limitation, fire,
lightning, vandalism, malicious mischief, flood (to the extent required by the
Administrative Agent, if any of the Borrower's or any of its Subsidiaries'
property is located in an identified flood hazard area, in which insurance has
been made available pursuant to the National Flood Insurance Act of 1968) and
other risks insured against by extended coverage, as is customary with companies
in the broadcasting and media businesses. All such insurance shall be in amounts
sufficient to prevent the Borrower or any of its Subsidiaries from becoming a
coinsurer, shall name the Administrative Agent, for the benefit of the Banks, as
loss payee and may contain loss deductible provisions which shall not exceed
$250,000. The Borrower shall maintain, for itself and its Subsidiaries, in full
force and effect liability insurance, business interruption insurance, errors
and omissions insurance, general accident and public liability insurance and all
other insurance as is usually carried by companies engaged in the same or
similar businesses similarly situated against claims for personal or bodily
injury, death or property damage occurring upon, in, about or in connection with
the use or operation of any property or motor vehicles owned, occupied,
controlled or used by the Borrower, its Subsidiaries and their employees or
Administrative Agents, or arising in any other manner out of the business
conducted by the Borrower and its Subsidiaries. All of such insurance shall be
in amounts reasonably satisfactory to the Administrative Agent and shall be
obtained and maintained by means of policies with generally recognized,
responsible insurance companies authorized to do business in such states as may
be necessary depending upon the locations of the Borrower's and its
Subsidiaries' assets and shall name the Administrative Agent, for the benefit of
the Banks, as an additional insured or loss payee, as the case may be. The
insurance to be provided may be blanket policies. Each policy of insurance shall
be written so as not to be subject to cancellation or substantial modification
without not less than thirty (30) days advance written notice to the
Administrative Agent. The Borrower shall furnish the Administrative Agent
annually with certificates or other evidence satisfactory to the Administrative
Agent that the insurance required hereby has been obtained and is in full force
and effect and, prior to the expiration of any such insurance, the Borrower
shall furnish the Administrative Agent with evidence satisfactory to the
Administrative Agent that such insurance has been renewed or replaced. The
Borrower shall, upon request of the Administrative Agent, furnish the
Administrative Agent such information about such insurance as the Administrative
Agent may from time to time reasonably request.
7.4 Obligations and Taxes. The Borrower shall, and shall cause each
of its Subsidiaries to, pay and perform all of its material Indebtedness and
other material liabilities and obligations in a timely manner in accordance with
normal business practices and with the terms governing the same. The Borrower
shall, and shall cause each of its Subsidiaries to, comply with the terms and
covenants of all material agreements and all material leases of real or personal
property and shall keep them all in full force and effect until termination
thereof in accordance
55
with their respective terms. The Borrower shall, and shall cause each of its
Subsidiaries to, pay and discharge promptly all taxes, assessments and
governmental charges or levies imposed upon it or in respect of its property
before the imposition of any penalty, as well as all lawful claims for labor,
materials, supplies or other matters which, if unpaid, might become a Lien or
charge upon such properties or any part thereof; provided, however, that neither
the Borrower nor any of its Subsidiaries shall be required to pay and discharge
any such tax, assessment, charge, levy or claim so long as (a) the validity
thereof is being contested diligently and in good faith by appropriate
proceedings and the enforcement thereof is stayed, pending the outcome of such
proceedings, (b) the Borrower or such Subsidiary has set aside on its books
adequate reserves in accordance with GAAP with respect thereto, and (c) such
contest will not endanger the Lien of the Administrative Agent in any of the
Borrower's or such Subsidiary's assets.
7.5 Financial Statements and Reports. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain true and complete books and records
of account in accordance with GAAP. The Borrower shall furnish to the
Administrative Agent, for delivery to the Banks, the following financial
statements and projections at the following times:
(a) as soon as available, but in no event later than ninety
(90) days after the end of each fiscal year of the Borrower, the Borrower shall
furnish (i) audited consolidated financial statements, including audited
consolidated balance sheets and income and expense statements, of the Borrower
and its Subsidiaries as of the close of such fiscal year and the results of
their operations during such fiscal year, and a consolidated statement of cash
flows for such fiscal year, together with such additional statements, schedules
and footnotes as are customary in a complete accountant's report; such financial
statements shall be certified by independent certified public accountants
selected by the Borrower and acceptable to the Administrative Agent, and the
opinion of such accountants shall be unqualified; and (ii) a statement signed by
such accountants to the effect that in connection with their examination of such
financial statements they have reviewed the provisions of this Agreement and
have no knowledge of any event or condition which constitutes an Event of
Default or Possible Default or, if they have such knowledge, specifying the
nature and period of existence thereof; provided, however, that in issuing such
statement, such independent accountants shall not be required to go beyond
normal auditing procedures conducted in connection with their opinion referred
to above;
(b) as soon as available, but in no event later than
forty-five (45) days after the end of each fiscal quarter of the Borrower, the
Borrower shall furnish unaudited consolidated and consolidating financial
statements, including consolidated and consolidating balance sheets and income
and expense statements, of the Borrower and its Subsidiaries as of the end of
such period and the results of their operations during such period and for the
then elapsed portion of the fiscal year, and a consolidated statement of cash
flows for the portion of the fiscal year ended with the last day of such
quarter; all such financial statements shall set forth, in comparative form,
corresponding figures for the equivalent period of the prior year and a
comparison to budget for the applicable quarter shall be in form and detail
satisfactory to the Administrative Agent, and shall be certified as to accuracy
and completeness by the chief financial officer of the Borrower;
56
(c) as soon as available, but in no event later than
forty-five days after the end of each month for the first eleven (11) month of
fiscal year, and within sixty (60) days after the end of the last month of each
fiscal year, the Borrower shall furnish unaudited statements of income and
expense for each Station, each Newspaper, the Porta Phone Business and the
Satellite Broadcasting Business, which shall contain a comparison with budget or
projections for such period and a comparison to the comparable period for the
prior year, and which shall be certified by the chief financial officer of the
Borrower;
(d) the financial statements required under (a) and (b) above
shall be accompanied by a compliance certificate in the form attached hereto as
Exhibit H of the chief financial officer of the Borrower (i) setting forth the
computations showing compliance with the financial covenants set forth in
Section 8 below, and (ii) certifying that no Possible Default or Event of
Default has occurred, or if any Possible Default or Event of Default has
occurred, stating the nature thereof and the actions the Borrower intends to
take in connection therewith;
(e) the Borrower shall furnish (i) no later than sixty (60)
days after the commencement of each fiscal year, an annual operating budget or
fiscal projections for such fiscal year, and (ii) promptly upon preparation
thereof, any material revisions of such annual budget or fiscal projections;
(f) promptly upon their becoming available, the Borrower
shall furnish (i) copies of any periodic or special reports filed by the
Borrower or any of its Subsidiaries with the FCC or any other federal, state or
local governmental agency or authority if such reports indicate any material
change in the ownership of the Borrower or such Subsidiary, or any materially
adverse change in business, operations, affairs or condition of the Borrower or
such Subsidiary, (ii) copies of any material notices and other material
communications from the FCC or any other federal, state or local governmental
agency or authority which specifically relate to the Borrower, any of its
Subsidiaries, any Station, the Porta Phone Business or the Satellite
Broadcasting Business or any material License, and the substance of which
relates to a matter that could reasonably be expected to have a Material Adverse
Effect, and (iii) copies of the results of each survey conducted by the Borrower
or any of its Subsidiaries for the purpose of certifying to the FCC compliance
with federal laws and the rules, regulations, policies and orders of the FCC
relating to foreign ownership restrictions and to limitations on the nature and
number of media outlets that may be held under common ownership or control;
(g) promptly upon their becoming available, the Borrower
shall furnish (i) copies of any registration statements and regular periodic
reports, if any, which any Borrower or any Subsidiary shall have filed with the
Securities and Exchange Commission (or any governmental agency substituted
therefor) or any national securities exchange, and (ii) copies of all financial
statements, reports and proxy statements mailed to its stockholders;
(h) the Borrower shall furnish (i) upon request, promptly
after the filing thereof with the Internal Revenue Service, copies of each
annual report with respect to each Plan established or maintained by the
Borrower or any member of the Controlled Group for each plan year, including (A)
where required by law, a statement of assets and liabilities of such
57
Plan as of the end of such plan year and statements of changes in fund balance
and in financial position, or a statement in changes in net assets available for
plan benefits, for such plan year, certified by an independent public accountant
satisfactory to the Administrative Agent, and (B) if prepared by or available to
the Borrower, an actuarial statement of such Plan applicable to such plan year,
certified by an enrolled actuary of recognized standing acceptable to the
Administrative Agent; and (ii) promptly after receipt thereof, a copy of any
notice the Borrower or a member of the Controlled Group may receive from the
Department of Labor or the Internal Revenue Service with respect to any Plan
(other than notices of general application) which could result in a material
liability to the Borrower; the Borrower will promptly notify the Administrative
Agent of any material taxes assessed, proposed to be assessed or which the
Borrower has reason to believe may be assessed against the Borrower or any
member of the Controlled Group by the Internal Revenue Service with respect to
any Plan or Benefit Arrangement within thirty days (30) after the Borrower knows
or has reason to know that any Reportable Event with respect to any Plan has
occurred, a statement of the chief financial officer of the Borrower setting
forth details as to such Reportable Event and the action which the Borrower
proposes to take with respect thereto, together with a copy of the notice of
such reportable event given to the PBGC if a copy of such notice is available to
the Borrower; notice within thirty (30) days after the Borrower or any other
member of the Controlled Group knows or has reason to know that any
multiemployer plan (as defined in Section 414(f) of the Code) under which the
Borrower or member of the Controlled Group is an employer, is in reorganization
(as defined in Section 418 of the Code or Title IV of ERISA) or is insolvent;
the Borrower will promptly notify the Administrative Agent of any withdrawal
liability asserted against the Borrower or any member of the Controlled Group
under Section 4201(a) of ERISA with respect to any Plan;
(i) without duplication of any delivery requirements
otherwise set forth herein, copies of any reports, notices or other
communications that the Borrower is required to deliver to the trustee under the
Subordinated Note Indenture; and
(j) upon the Administrative Agent's written request, such
other information about the financial condition, properties and operations of
the Borrower or any of its Subsidiaries as any Bank may from time to time
reasonably request.
7.6 Notices. The Borrower shall give the Administrative Agent, for
distribution to the Banks, notice within five (5) days after its receipt of
notice or knowledge thereof, (a) of any action, suit, investigation or
proceeding by or against the Borrower or any of its Subsidiaries, which, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect, including, without limitation, any material admonition, censure or
adverse citation or order by the FCC or any other governmental authority or
regulatory agency, (b) (i) of any action or event constituting an event of
default or violation of the Subordinated Note Indenture, or any License,
Operating Agreement, or other material contract to which the Borrower or any of
its Subsidiaries is a party or by which the Borrower or any Subsidiary is bound,
and (ii) of any competing application, petition to deny or other opposition to
any license renewal application filed by the Borrower or any of its Subsidiaries
with the FCC, if such event of default, violation or other matter could
reasonably be expected to have a Material Adverse
58
Effect, (c) of the occurrence of any Possible Default or Event of Default and
the actions the Borrower intends to take in connection therewith, (d) of any
cancellation of or any material amendment to any of the insurance policies
maintained in accordance with the requirements of this Agreement, except for
cancellations and amendments that occur in the ordinary course of business, (e)
of any material, adverse change in the business or financial condition of the
Borrower or any of its Subsidiaries, and (f) of any material strike, labor
dispute, slow down or work stoppage due to a labor disagreement (or any material
development regarding any thereof) affecting the Borrower or any of its
Subsidiaries.
7.7 Maintenance of Property. The Borrower shall, and shall cause
each of its Subsidiaries to, at all times maintain and preserve its towers,
printing presses, machinery, equipment, motor vehicles, fixtures and other
property in good working order, condition and repair, normal wear and tear
excepted, and in compliance with all material applicable standards, rules or
regulations imposed by any governmental authority or agency (including, without
limitation, the FCC, the Federal Aviation Administration or any other License
Authority) or policy of insurance , except for such property which, in the
judgment of the Borrower, is no longer necessary to the business of the Borrower
or any of its Subsidiaries.
7.8 Information and Inspection. The Borrower shall furnish to the
Administrative Agent and the Banks form time to time, promptly upon request,
information reasonably requested by the Administrative Agent or any Bank
pertaining to any covenant, provision or condition hereof or of any Loan
Document, or to any matter connected with the books, records, operations,
financial condition, properties, activities or business of the Borrower or of
any of its Subsidiaries. At all reasonable times, the Borrower shall permit any
authorized representative designated by any Bank to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, and their books and
records, and to take extracts therefrom and make copies thereof, and to discuss
the Borrower's and its Subsidiaries' affairs, finances and accounts with the
management of the Borrower and its Subsidiaries and with the Borrower's
independent accountants.
7.9 Maintenance of Liens. The Borrower shall do all things necessary
or requested by the Administrative Agent to preserve and perfect the Liens of
the Administrative Agent, for the benefit of the Banks, arising pursuant hereto
and pursuant to the Loan Documents as first Liens, except for Permitted Liens,
and to insure that the Administrative Agent, for the benefit of the Banks, has a
Lien on substantially all of the assets of the Borrower and in all of the
Capital Stock and substantially all of the assets of each of its Subsidiaries.
If the Borrower or any of its Subsidiaries purchases any real property, the
Borrower or such Subsidiary shall notify the Administrative Agent and execute,
deliver and cause to be recorded any Mortgage requested by the Administrative
Agent in connection therewith, which shall be first lien, except for Permitted
Liens and take such other actions as would have been required pursuant to
Section 6.4 has such property been owned on the Closing Date. If the Borrower or
any of its Subsidiaries enters into a new Operating Agreement or other material
contract or lease which prohibits the assignment thereof or the granting of a
security interest therein without the consent of the other party, the Borrower
shall use its best efforts to obtain the written consent of such other party to
59
the grant to the Administrative Agent, for the benefit of the Banks, of a
security interest therein pursuant to the Security Agreements.
7.10 Title to Property. The Borrower shall, and shall cause each of
its Subsidiaries to, own and hold title to all of its assets in its own name and
not in the name of any nominee.
7.11 Environmental Compliance and Indemnity.
(a). The Borrower shall, and shall cause each of its
Subsidiaries to, comply in all material respects with all Environmental Laws,
including, without limitation, all Environmental Laws in jurisdictions in which
the Borrower or any of its Subsidiaries owns or operates a facility or site,
arranges for disposal or treatment of Hazardous Materials, solid waste or other
wastes, accepts for transport any Hazardous Materials, solid wastes or other
wastes or hold any interest in real property or otherwise. Neither the Borrower
nor any of its Subsidiaries shall cause or allow the Release of Hazardous
Materials, solid waste or other wastes on, under or to any real property in
which the Borrower or such Subsidiary holds any interest or performs any of its
operations, in material violation of any Environmental Law. The Borrower shall
notify the Banks promptly after its receipt of notice thereof, of any
Environmental Claim which the Borrower receives involving any potential or
actual material liability of the Borrower or any of its Subsidiaries arising in
connection with any noncompliance with or violation of the requirements of any
Environmental Law or a material Release or threatened Release of any Hazardous
Materials, solid waste or other waste into the environment. The Borrower shall
promptly notify the Banks (i) of any material Release of Hazardous Material on,
under or from the real property in which the Borrower or any of its Subsidiaries
holds or has held an interest, upon the Borrower's learning thereof by receipt
of notice that the Borrower or any of its Subsidiaries is or may be liable to
any Person as a result of such Release or that the Borrower or such Subsidiary
has been identified as potentially responsible for, or is subject to
investigation by any governmental authority relating to, such Release, and (ii)
of the commencement or threat of any judicial or administrative proceeding
alleging a violation of any Environmental Laws.
(b) If the Administrative Agent at any time has a reasonable
basis to believe that there may be a violation of any Environmental Law by, or
any liability arising thereunder of, the Borrower or any of its Subsidiaries or
related to any real property owned, leased or operated by the Borrower or any of
its Subsidiaries or real property adjacent to such real property, which
violation or liability could reasonably be expected to have a Material Adverse
Effect, then the Borrower shall, upon request from the Administrative Agent,
provide the Administrative Agent with such reports, certificates, engineering
studies or other written material or data as the Administrative Agent may
require so as to satisfy the Administrative Agent that the Borrower or such
Subsidiary is in material compliance with all applicable Environmental Laws.
(c) The Borrower shall defend, indemnify and hold the
Administrative Agent and the Banks, and their respective officers, directors,
shareholders, employees, agents, affiliates, successors and assigns harmless
from and against all costs, expenses, claims, demands,
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damages, penalties and liabilities of every kind or nature whatsoever incurred
by them (including, without limitation, reasonable attorney fees) arising out
of, resulting from or relating to (i) the noncompliance of the Borrower, any of
its Subsidiaries of any property owned or leased by the Borrower or any of its
Subsidiaries with any Environmental Law, or (ii) any investigatory or remedial
action involving the Borrower, any of its Subsidiaries or any property owned or
leased by the Borrower or any of its Subsidiaries and required by Environmental
Laws or by order of any governmental authority having jurisdiction under any
Environmental Laws, or (iii) any injury to any person whatsoever or damage to
any property arising out of, in connection with or in any way relating to the
breach of any of the environmental warranties or covenants contained in this
Agreement or any facts or circumstances that cause any of the environmental
representations or warranties contained in this Agreement to cease to be true,
or (iv) the existence, treatment, storage, Release, generation, transportation,
removal, manufacture or other handling of any Hazardous Material on or affecting
any property owned or leased by the Borrower of any of its Subsidiaries, or (v)
the presence of any asbestos-containing material or underground storage tanks,
whether in use or closed, under or on any property owned or leased by the
Borrower or any of its Subsidiaries; provided, however, that the foregoing
indemnity shall not apply to any such costs, expenses, claims, demands, damages,
penalties or liabilities that are determined in a final non-appealable order of
a court of competent jurisdiction to have arisen solely out of the gross
negligence or willful misconduct of the indemnified person.
7.12 Rate Hedging Obligations. The Borrower shall within sixty (60)
days after the Closing enter into, and shall at all times thereafter maintain in
full force and effect, agreements in form and substance reasonably satisfactory
to the Administrative Agent regarding Rate Hedging Obligations so that the sum
of the notional amount subject to such agreements, plus the aggregate principal
amount of all Total Debt which bears interest at a fixed interest rate equals,
at all times, at least fifty percent (50%) of the principal amount of Total Debt
then outstanding.
7.13 FCC Consents. The Borrower acknowledges that certain
transactions contemplated by this Agreement or the Loan Documents, and certain
actions which may be taken by the Administrative Agent or the Banks in the
exercise of their rights under this Agreement or the Loan Documents, may require
the consent of the FCC. If the counsel to the Administrative Agent determines
that the consent of the FCC is required in connection with the execution,
delivery and performance of any of the aforesaid documents or any documents
delivered to the Administrative Agent or the Banks in connection therewith or as
a result of any action which may be taken pursuant thereto, then the Borrower,
at its sole cost and expense, shall use its best efforts, and shall cause its
Subsidiaries to use their best efforts, to secure such consent and to cooperate
with the Administrative Agent and the Banks in any action commenced by the
Administrative Agent or the Banks to secure such consent. The Borrower shall
not, and shall not permit any Subsidiary to, take any action which interferes
with the exercise or completion of any such action taken by the Administrative
Agent or the Banks. The Borrower further consents to the transfer of control or
assignment of Licenses to a receiver or trustee or similar official or to any
purchaser of the collateral securing the Loans pursuant to any public or private
sale, judicial sale, foreclosure or exercise of other remedies available to the
Administrative Agent or the Banks as permitted by applicable law upon the
occurrence of an Event of Default
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7.14 Appraisals. If at any time any Bank determines that it must
have current appraisals of any of the real property subject to a Mortgage to
comply with any law, rule or regulation applicable to it, then, upon request by
such Bank, the Borrower shall, at its expense, order appraisals of all of such
real property. Such appraisals shall be in form and substance acceptable to the
Banks, shall be prepared by appraisers acceptable to the Banks and shall be
delivered to the Administrative Agent within forty-five (45) days of the request
therefor.
7.15 Real Estate. Within forty-five (45) days after any reasonable
request by the Administrative Agent, the Borrower shall deliver to the
Administrative Agent copies of documentation evidencing the security interest of
the Administrative Agent in the assets acquired pursuant to the ▇▇▇▇▇ Purchase
Agreement and the Like-Kind Exchange Agreement, all of which shall be in form
and substance reasonably satisfactory to the Administrative Agent, in respect of
any parcel of real estate owned by the Borrower or any of its Subsidiaries and
in respect of which such items were not delivered to the Administrative Agent on
the Closing Date.
7.16 Year 2000 Compliance. The Borrower will promptly notify the
Administrative Agent in the event the Borrower discovers or determines that any
computer application (including, without limitation, those of its suppliers and
vendors) that is material to its or any of its Subsidiaries' business and
operations will not be Year 2000 Compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a Materially
Adverse Effect.
7.17 Covenants Regarding Formation of Subsidiaries and Acquisitions.
At the time of (i) any Permitted Acquisition or (ii) the formation of any new
Subsidiary of the Borrower or any of its Subsidiaries which is permitted under
this Agreement, including, without limitation, the formation of any License
Subsidiary, the Borrower will, and will cause its Subsidiaries, as appropriate,
to (a) provide to the Administrative Agent (1) an executed Subsidiary Security
Agreement for such new Subsidiary, in substantially the form of Exhibit E
attached hereto, together with appropriate UCC-1 financing statements, and (2)
an executed Subsidiary Guaranty for such new Subsidiary, in substantially the
form of Exhibit C attached hereto; (b) pledge to the Administrative Agent all of
the Capital Stock of such Subsidiary or Person which is acquired or formed,
beneficially owned by the Borrower or any of its Subsidiaries, as the case may
be, as additional collateral for the Obligations to be held by the
Administrative Agent in accordance with the terms of the Borrower Pledge
Agreement, an existing Subsidiary Pledge Agreement, or a new Subsidiary Pledge
Agreement in substantially the form of Exhibit D attached hereto, and execute
and deliver to the Administrative Agent all such other documentation for such
pledge as, in the opinion of the Administrative Agent, is appropriate; and (c)
provide revised financial projections for the remainder of the fiscal year and
for each subsequent year until the Maturity Date which reflect such Permitted
Acquisition or formation, certified by the chief financial officer of the
Borrower, together with a statement by such Person that no Event of Default
exists or would be caused by such Permitted Acquisition or formation, and all
other documentation, including one or more opinions of counsel, which are
satisfactory to the Administrative Agent and which in its opinion is appropriate
with respect to such Acquisition or the formation of such
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Subsidiary. Any document, agreement or instrument executed or issued pursuant to
this Section 7.17 shall be a "Loan Document" for purposes of this Agreement.
SECTION 8. NEGATIVE COVENANTS OF THE BORROWER.
The Borrower agrees with the Banks that so long as this Agreement shall
remain in effect or any of the Obligations shall remain unpaid or to be
performed or any Letter of Credit shall remain outstanding, the Borrower shall
not, directly or indirectly, take any of the actions set out in this Section 8
nor permit any of the conditions set out herein to occur.
8.1 Indebtedness. The Borrower shall not, and shall not permit any
of its Subsidiaries to, incur, create, assume or permit to exist any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness permitted under Sections 8.3, 8.4, 8.5 or
8.6 hereof and any other Indebtedness secured by a Permitted Lien which, in the
aggregate, shall not exceed $5,000,000;
(c) unsecured trade accounts payable and other unsecured
current Indebtedness incurred in the ordinary course of business (but excluding
any Indebtedness for borrowed money);
(d) Indebtedness for taxes, assessments, governmental
charges, liens or similar claims to the extent that payment thereof shall not be
required to be made by the provisions of Section 7.4;
(e) Indebtedness incurred in respect of Rate Hedging
Obligations required pursuant to Section 7.12;
(f) Subordinated Debt incurred pursuant to the terms of the
Subordinated Note Indenture, or Indebtedness incurred in refinancing such
Subordinated Debt, provided such Indebtedness is on terms and conditions
satisfactory to the Required Banks, as in effect on the date hereof in a
principal amount not to exceed $150,000,000; and
(g) existing Indebtedness listed on Schedule 6 attached
----------
hereto.
8.2 Liens. The Borrower shall not, and shall not permit any of its
Subsidiaries to, incur, create, assume or permit to exist any Lien of any nature
whatsoever on any property or assets now owned or hereafter acquired by the
Borrower or any of its Subsidiaries, other than Permitted Liens. The Borrower
shall not, and shall not permit any of its Subsidiaries to enter into or permit
to exist any arrangement or agreement, other than pursuant to this Agreement or
any Loan Document, which directly or indirectly prohibits the Borrower or any of
its Subsidiaries from creating or incurring any Lien on any of its assets, other
than (a) leases and agreements regarding purchase money Indebtedness permitted
pursuant to Section 8.4 (so long as
63
such prohibition only relates to the asset which is subject to such lease or
which secure such Indebtedness, (b) provisions in agreements which prohibit the
assignment of such agreements and (c) restrictions on the creation of Liens
contained in the Subordinated Note Indenture as in effect as of the date hereof.
8.3 Guaranties. The Borrower shall not, and shall not permit any of
its Subsidiaries to, become a Guarantor for any Person, except with respect to
(a) endorsements of negotiable instruments for collection in the ordinary course
of business, (b) the Subsidiary Guaranties, (c) guaranties by the Borrower's
Subsidiaries of the Borrower's obligations under the Subordinated Debt, so long
as such guaranties are subordinate to the obligations of the Borrower's
Subsidiaries under the Subsidiary Guaranties to the same extent as the
Subordinated Debt under the Subordinated Note Indenture is subordinate to the
Obligations, (d) contingent obligations under indemnity agreements to title
insurers to cause such title insurers to issue to the Administrative Agent
mortgagee title insurance policies, as provided in Section 6.4, and (e)
contingent obligations incurred in the ordinary course of business with respect
to surety and appeal bonds, performance and return-of-money bonds and other
similar obligations not exceeding, together with Indebtedness permitted under
Sections 8.1(b), 8.4, 8.5 or 8.6, at any time outstanding $5,000,000 in the
aggregate.
8.4 Rental and Conditional Sale Obligations. The Borrower shall not,
and shall not permit any of its Subsidiaries to, incur, create, assume or permit
to exist, with respect to any personal property, any conditional sale
obligation, any purchase money obligation, any rental obligation, any purchase
money security interest or any other arrangement for the use of personal
property of any other Person, which in any such case has an unexpired term of
not less than one (1) year, other than an arrangement constituting a Capitalized
Lease Obligation, if the aggregate amount payable by the Borrower and its
Subsidiaries pursuant to all such arrangements in any fiscal year would exceed,
together with Indebtedness permitted under Section 8.1(b), 8.3, 8.5, or 8.6, at
any time outstanding $5,000,000 in the aggregate, plus the amount of any such
obligations incurred pursuant to a Permitted Acquisition.
8.5 Real Property Interests. The Borrower shall not, and shall not
permit any of its Subsidiaries to, be obligated under, enter into, assume or
permit to exist any lease or rental obligation for real property which has an
unexpired term of not less than one (1) year, if the aggregate amount payable in
respect of all such arrangements by the Borrower and its Subsidiaries in any
fiscal year would exceed, together with Indebtedness permitted under Section
8.1(b), 8.3, 8.4, or 8.6, at any time outstanding $5,000,000 in the aggregate,
plus the amount of any such obligations incurred pursuant to a Permitted
Acquisition.
8.6 Capitalized Lease Obligations. The Borrower shall not, and shall
not permit any of its Subsidiaries to, incur, create, assume or permit to exist
Capitalized Lease Obligations if the aggregate amount payable by the Borrower
and its Subsidiaries in respect of all such Capitalized Lease Obligations in any
fiscal year would exceed, together with Indebtedness permitted under Section
8.1(b), 8.3, 8.4, or 8.5, at any time outstanding $5,000,000 in the aggregate,
plus the amount of any such obligations incurred pursuant to a Permitted
Acquisition.
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8.7 Notes, Accounts Receivable and Claims. The Borrower shall not,
and shall not permit any of its Subsidiaries to, sell, discount or otherwise
dispose of any note, account receivable or other right to receive payment, with
or without recourse, except for collection in the ordinary course of business,
or fail to timely assert any claim, cause of action or contract right which it
possesses against any third party or agree to settle or compromise any such
claim, cause of action or contract right except in any case in the exercise of
good business judgment and except for settlements or compromise made in the
reasonable exercise of business judgment in the ordinary course of business.
8.8 Capital Distributions; Restrictions on Payments to
Stockholders.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, make, or declare or incur any liability to make, any Capital
Distribution; provided, however, that:
(i) any Subsidiary of the Borrower may make Capital
Distributions to the Borrower or to a wholly-owned Subsidiary of the
Borrower; and
(ii) the Borrower may make Capital Distributions so long
as: (A) prior to making any such distribution, the Borrower shall have
demonstrated to the satisfaction of the Administrative Agent that the Borrower
will be in compliance with all of the covenants contained herein after giving
effect to such distribution; (B) no Possible Default or Event of Default exists
at the time of making such distribution or would exist after giving effect
thereto; and (C) prior to making any such distribution, the Borrower shall have
delivered to the Administrative Agent a certificate of its chief financial
officer in form and substance satisfactory to the Administrative Agent which
shall contain calculations demonstrating on a pro forma basis the Borrower's
compliance with the financial covenants set forth in this Section 8 after giving
effect to such distribution.
(b) The Borrower shall not permit any of its Subsidiaries to
enter into or agree, or otherwise become subject to any agreement, contract or
other arrangement with any Person pursuant to the terms of which (a) such
Subsidiary is or would be prohibited from or limited in declaring or paying any
cash dividends or distributions on any class of its Capital Stock or any other
ownership interests owned directly or indirectly by the Borrower or from making
any other distribution on account of any class of any such Capital Stock or
ownership interests (herein referred to as "Upstream Dividends") or (b) the
declaration or payment of Upstream Dividends by a Subsidiary of the Borrower to
the Borrower or to another Subsidiary of the Borrower, on an annual or
cumulative or other basis, is or would be otherwise limited or restricted.
8.9 Disposal of Property; Mergers; Acquisitions;
Reorganizations.
(a) Except as provided in paragraphs (b) and (c) below, the
Borrower shall not, and shall not permit any of its Subsidiaries to, (i)
dissolve or liquidate; (ii) make any Asset Sale, except for (A) Asset Sales in
the ordinary course of business in an aggregate amount
65
not to exceed $1,000,000 in any transaction or related series of transactions,
and (B) the disposition of substantially all of the assets of the Porta Phone
Business, so long as in each such case the Borrower has complied with the
provisions of Section 2.7(b)(ii); (iii) be a party to any consolidation, merger,
recapitalization or other form of reorganization; (iv) make any acquisition of
all or substantially all the assets of any Person, or of a business division or
line of business of any Person, or of any other assets constituting a going
business; (v) create, acquire or hold any Subsidiary (other than Subsidiaries
existing on the date hereof and Subsidiaries created pursuant to Permitted
Acquisitions); or (vi) be or become a party to any joint venture or other
partnership.
(b) The Borrower may make the acquisitions contemplated in
the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement. In addition,
the Borrower or any of its wholly owned Subsidiaries may make acquisitions of
substantially all of the assets of any television station or newspaper operation
or of all of the Capital Stock or other equity interests of a Person which owns
a television station or newspaper operation, subject to the satisfaction of the
following conditions (any acquisition which satisfies all of the following
conditions, together with any acquisition under Section 8.10(c), being referred
to hereinafter as a "Permitted Acquisition").
(i) any television station to be acquired (A) shall be
located in any of the top one hundred twenty-five (125) United States markets,
as ranked by Designated Market Area as determined by ▇▇▇▇▇▇▇ Media Research, (B)
shall be a CBS, NBC or ABC network affiliate and located in a market ranked one
hundred twenty-six (126) through and including one hundred seventy-five (175),
as ranked by Designated Market Area as determined by ▇▇▇▇▇▇▇ Media Research, or
(C) if permitted by law and the rules and regulations of the FCC, shall be an
affiliate of the Fox network and located in a market in which the Borrower or
any of its Subsidiaries owns a television station;
(ii) any newspaper to be acquired shall be a daily
newspaper with a minimum paid circulation of 25,000;
(iii) the Borrower shall have given to the
Administrative Agent written notice of such acquisition at least fifteen (15)
days prior to executing any binding commitment with respect thereto, which
notice shall state the additional amounts, if any, by which the Borrower
proposes to increase the dollar limitations set forth in Sections 8.4 and 8.5;
and the structure of the transaction shall be acceptable to the Administrative
Agent in form and substance;
(iv) the Borrower shall have demonstrated to the
satisfaction of the Administrative Agent that the Borrower will be in compliance
with all of the covenants contained herein after giving effect to such
acquisition and that no Event of Default or Possible Default then exists or
would exist after giving effect to such acquisition, and the Borrower shall have
delivered to the Administrative Agent within ten (10) days prior to the
consummation of such acquisition an acquisition report signed by an executive
officer of the Borrower in form and substance satisfactory to the Administrative
Agent which shall contain (A) calculations demonstrating on a pro forma basis
the Borrower's compliance with the financial covenants set
66
forth in this Section 8 after giving effect to such acquisition, (B) projections
for the Borrower for a five (5) year period after the closing of such
acquisition giving effect to the acquisition and including a statement of
sources and uses of funds for such acquisitions showing, among other things, the
source of financing for the acquisition and (C) if such acquisition is of a
television station, a detailed engineering report from the Borrower's engineer,
acceptable in form and substance to the Administrative Agent, as to the
construction, engineering, installation and operation of the station being
acquired and its facilities and equipment, which certificate shall also list any
material equipment problems at such station and any material upgrades of
equipment which will, within six (6) months of such acquisition, be required at
such Station;
(v) if such acquisition is of a television stations that
does not have an affiliation agreement with ABC, CBS or NBC, the Borrower shall
negotiate in good faith with the Banks regarding a limitation, to be added as a
negative covenant to this Agreement, on the annual amount of its Programming
Obligations;
(vi) the agreement governing such acquisition and all
related documents and instruments shall be in form and substance satisfactory to
the Administrative Agent;
(vii) any FCC Licenses acquired in connection with such
acquisition shall be transferred immediately upon consummation of such
acquisition to a License Subsidiary or to a direct wholly-owned Subsidiary of
the Borrower which shall have no other assets or liabilities;
(viii) the Borrower shall have delivered to the
Administrative Agent UCC, judgment and tax lien searches for each relevant
jurisdiction with respect to the assets being acquired and shall have taken any
actions as may be necessary or requested by the Administrative Agent to grant to
the Administrative Agent, for the benefit of the Banks, perfected Liens in all
assets, real and personal, tangible and intangible, acquired by the Borrower or
any of its Subsidiaries in such acquisition pursuant to the Loan Documents,
subject to no prior Liens except Permitted Liens;
(ix) if the Borrower acquires a Subsidiary or creates a
Subsidiary (including, without limitation, a License Subsidiary) pursuant to or
in connection with such acquisition,
(A) the Borrower shall, or shall cause its Subsidiary
which is the stockholder of such newly acquired or created Subsidiary to, pledge
to the Administrative Agent, for the benefit of the Banks, all of the stock or
other securities or equity interests of such acquired or created Subsidiary
pursuant to documentation in form and substance satisfactory to the
Administrative Agent; and
(B) such acquired or created Subsidiary shall execute
and deliver to the Administrative Agent, for the benefit of the Banks, a
guaranty of all of the Obligations of the Borrower, in form and substance
satisfactory to the Administrative Agent, and
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shall grant to the Administrative Agent, for the benefit of the Banks, a first
priority, perfected lien or security interest in substantially all of its
assets, real and personal, tangible and intangible, subject to no prior Liens,
except for Permitted Liens, pursuant to documentation in form and substance
satisfactory to the Administrative Agent; and
(x) the Borrower shall have delivered to the
Administrative Agent evidence reasonably satisfactory to the Administrative
Agent to the effect that all approvals, consents or authorizations required in
connection with such acquisition (including, without limitation, the formation
of any License Subsidiary and the transfer of any FCC Licenses to such
Subsidiary) from any Licensing Authority or other governmental authority shall
have been obtained and that any consent of the FCC shall have become a Final
Order, and such opinions as the Administrative Agent may reasonably request as
to the Liens granted to the Administrative Agent, for the benefit of the Banks,
as required pursuant to this Section 8.9, as to any required regulatory
approvals for such acquisition and as to such other matters as the
Administrative Agent may reasonably request.
(c) The Borrower may make such other acquisitions as may be
approved from time to time by the Required Banks in their sole discretion.
8.10 Investments. The Borrower shall not, and shall not permit any
of its Subsidiaries to, purchase or otherwise acquire, hold or invest in any
Capital Stock or other securities or evidences of indebtedness of, or any
interest or investment in, or make or permit to exist any loans or advances to,
any other Person, except the following (each a "Permitted Investment"):
(a) direct obligations of the United States Government
maturing within one (1) year;
(b) certificates of deposit of a member bank of the Federal
Reserve System having capital, surplus and undivided profits in excess of
$2,000,000,000;
(c) any investment in commercial paper which at the time
of such investment is assigned the highest quality rating in accordance with
the rating systems employed by either ▇▇▇▇▇'▇ Investors Service, Inc. or
Standard & Poor's Corporation;
(d) money market funds;
(e) securities received pursuant to a plan of reorganization
adopted in an insolvency proceeding or otherwise in immaterial amounts in
exchange for accounts receivable of the entity which is the subject of such
insolvency proceeding generated in the ordinary course of the Borrower's or any
of its Subsidiaries' business; and
(f) investments in its existing Subsidiaries and in
Subsidiaries created pursuant to Section 8.10(b) or (c).
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8.11 Amendment of Governing Documents. The Borrower shall not, and
shall not permit any of its Subsidiaries to, amend, modify or supplement its
Certificate or Articles of Incorporation, Bylaws or other organizational or
governing documents or any shareholders or security holders agreement, unless
required by law, in any manner that is adverse to the interests of the Banks (as
may be determined by the Administrative Agent).
8.12 Financial Covenants.
(a)...Leverage Ratio. As of any calculation date, the Borrower
shall not permit the Leverage Ratio at any time during any period listed in
Column A below to be greater than the ratio set forth in Column B below opposite
such period:
Column A Column B
-------- --------
Period: Permitted Ratio:
------ ----------------
Closing Date through September 30, 1998 6.90:1.0
October 1, 1998, and thereafter 6.40:1.0
(b) Adjusted Leverage Ratio. As of any calculation date, the
Borrower shall not permit the Adjusted Leverage Ratio at any time during any
period listed in Column A below to be greater than the ratio set forth in Column
B below opposite such period:
Column A Column B
-------- --------
Period: Permitted Ratio:
------ ----------------
Closing Date through September 30, 1998 6.75:1.0
October 1, 1998, through December 31, 1999 6.25:1.0
January 1, 2000, through December 31, 2000 5.75:1.0
January 1, 2001, through December 31, 2001 5.25:1.0
January 1, 2002, and thereafter 4.75:1.0
(c) Senior Debt to Operating Cash Flow Ratio. As of any
calculation date, the Borrower shall not permit the ratio of (i) Senior Debt on
such date to (ii) Operating Cash Flow for the four (4) fiscal quarter period
then ended, or most recently ended, (1) for any date from the Closing Date
through and including December 31, 1999, to be greater than 4.25 to 1.00, and
(2) at all other times, to be greater than 3.50 to 1.00.
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(d) Operating Cash Flow to Interest Expense. As of any
calculation date, the Borrower shall not permit the ratio of (i) Operating Cash
Flow for the four (4) fiscal quarter period then ended or most recently ended,
to (ii) the sum of (A) Interest Expense, plus (B) Capital Distributions for the
same such four (4) quarter period to be less than 1.50 to 1.00.
(e) Pro Forma Debt Service Coverage Ratio. As of any
calculation date, the Borrower shall not permit the ratio of (i) Operating Cash
Flow for the four (4) fiscal quarter period then ended or most recently ended,
to (ii) Pro Forma Debt Service as of the end of the same such four (4) quarter
period to be less than 1.10 to 1.00.
(f) Fixed Charge Coverage Ratio. The Borrower shall not
permit the Fixed Charge Coverage Ratio as of the end of any fiscal quarter to
be less than 1.00 to 1.00.
8.13 Management Agreements and Fees.
(a)...Except for agreements permitted pursuant to Section
8.14(b), the Borrower shall not, and shall not permit any of its Subsidiaries
to, make or enter into, or pay any management fees pursuant to, any management
or service agreement or joint operating agreement whereby management,
supervision or control of its business, or any significant aspect thereof, shall
be delegated to or placed in any Person other than the Borrower, an employee of
the Borrower or such Subsidiary. The Borrower shall not, and shall not permit
any of its Subsidiaries to, make or enter into, or receive any management fees
pursuant to, any management or service agreement or joint operating agreement
whereby management, supervision or control of the business of any other Person
(other than a Subsidiary of the Borrower), or any significant aspect thereof,
shall be delegated to or placed in the Borrower or any of its Subsidiaries.
(b) Without the prior written consent of the Administrative
Agent, the Borrower shall not, and shall not permit any of its Subsidiaries to,
enter into, or otherwise be obligated under any local marketing agreement, time
brokerage agreement, program service agreement, joint sales agreement,
facilities leasing agreement or similar arrangement.
8.14 Fiscal Year. The Borrower shall not, and shall not permit any
Subsidiary to, change its fiscal year.
8.15 ERISA. Neither the Borrower nor any member of the Controlled
Group shall fail to make any contributions which are required pursuant to the
terms of any Plan or any Benefit Arrangement. Neither the Borrower nor any
member of the Controlled Group shall contribute to or agree to contribute to any
Plan which is (a) subject to the minimum funding requirements under Section 302
of ERISA or Section 412 of the Code; (b) a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA); (c) a defined benefit plan (as defined under
Section 3(35) of ERISA or Section 414(j) of the Code); (d) a multiple employer
plan (as defined in Section 4063 or ERISA); or (e) a multiple employer welfare
arrangement (as defined in Section 3(40) of ERISA).
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8.16 Affiliates. The Borrower shall not, and shall not permit any of
its Subsidiaries to, enter into any transaction or agreement with any Affiliate
of the Borrower or pay any compensation or salary to any such Person unless such
transaction or agreement is in the ordinary course of and pursuant to the
reasonable requirements of the business of the Borrower or any of its
Subsidiaries and the terms of such transaction or agreement are not less
favorable to the Borrower or such Subsidiary than could be obtained in an
arms-length transaction with an unaffiliated third party or unless the amount
paid to such person is not in excess of the fair value of the services rendered
by such person.
8.17 Change of Name, Identity or Corporate Structure. The Borrower
shall not, and shall not permit any of its Subsidiaries to, change its name,
identity or corporate structure without thirty days prior written notice to the
Administrative Agent.
8.18 Amendments or Waivers. The Borrower shall not, and shall not
permit any of its Subsidiaries to, amend, alter or modify, or consent to or
suffer any amendment, alteration or modification of, (a) the Subordinated Note
Indenture or any notes or other documents or agreements issued or entered into
pursuant to the Subordinated Note Indenture without the prior written consent of
all of the Banks if such amendment, alteration or modification affects the
subordination provisions thereof or imposes any more onerous term or condition
on the Borrower or any of its Subsidiaries than is contained in such agreement,
note or document as of the date hereof or is otherwise materially adverse to the
Borrower, any of its Subsidiaries or the Banks, or without the prior written
consent of the Required Banks if such amendment, alteration or modification does
not affect the subordination provisions thereof or impose any more onerous term
or condition on the Borrower or any of its Subsidiaries than is contained in
such agreement, note or document as of the date hereof and is not otherwise
materially adverse to the Borrower, any of its Subsidiaries or the Banks, in
either case as reasonably determined by the Administrative Agent, or (b) the
Like-Kind Exchange Agreement without the prior written consent of the
Administrative Agent, the ▇▇▇▇▇ Purchase Agreement, the Like-Kind Exchange
Agreement, any License, or any Operating Agreement or other material contract to
which the Borrower or such Subsidiary is a party, except for any amendments,
alterations or modifications to any License or Operating Agreement which could
not reasonably be expected to have a Material Adverse Effect. The Administrative
Agent shall deliver to the Banks promptly after its receipt thereof a copy of
each amendment or modification to the ▇▇▇▇▇ Purchase Agreement and the Like-Kind
Exchange Agreement.
8.19 Issuance or Transfer of Capital Stock and other Equity
Interests. The Borrower shall not issue any stock that by its terms (or the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part or that by its terms is
entitled to a mandatory distribution or dividend. The Borrower shall not permit
any of its Subsidiaries to sell or issue any Capital Stock, partnership
interests or other equity interests or any warrants, options or other securities
convertible into or exercisable for any Capital Stock, partnership interests or
other equity interests, and the Borrower shall not permit any of its
Subsidiaries to permit the transfer of any Capital Stock, partnership interests
or other such equity interests.
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8.20 Change in Business. The Borrower shall not, and shall not
permit any of its Subsidiaries to, change the nature of its business in any
material respect. Neither the Borrower nor any of its Subsidiaries shall engage
in any business other than the ownership and operation of the Stations
(including, without limitation, the Stations being acquired pursuant to the
▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement), the Newspapers,
the Porta Phone Business and the Satellite Broadcasting Business and other
activities incidental or related thereto.
8.21 Regulations T, U or X. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, (a) apply any part of
the proceeds of the Loans to the purchasing or carrying of any "margin stock"
within the meaning of Regulations T, U or X of the Federal Reserve Board, or any
regulations, interpretations or rulings thereunder, (b) extend credit to others
for the purpose of purchasing or carrying any such margin stock, or (c) retire
Indebtedness which was incurred to purchase or carry any such margin stock.
8.22 License Subsidiaries. The Borrower shall not, and shall not
permit any Subsidiary (other than a License Subsidiary) to, hold any FCC
Licenses, but rather shall cause all FCC Licenses to be issued to and held by
License Subsidiaries. The Borrower shall not permit any License Subsidiary to
(a) incur, create, assume or permit to exist any Indebtedness (other than
pursuant to a Subsidiary Guaranty and Subsidiary Security Agreement executed by
such License Subsidiary, and the subordinated guaranty executed by such License
Subsidiary pursuant to the Subordinated Note Indenture), (b) incur, create,
assume or permit to exist any Lien of any nature whatsoever on any property or
assets now owned or hereafter acquired by it except in favor of the
Administrative Agent, for the benefit of the Banks, (c) make any Capital
Expenditures, (d) acquire any assets other than the Licenses, (e) conduct any
business, or (f) hire or engage any employees.
8.23 Subordinated Debt. The Borrower shall not redeem, purchase,
discharge, pay, prepay or defease all or any portion of the principal or
interest of any Subordinated Debt, prior to the indefeasible payment in full in
cash of all Obligations, except that (a) the Borrower may pay interest on the
Subordinated Debt in accordance with the provisions of the Subordinated Note
Indenture as in effect on the date hereof or as amended in accordance with the
provisions of Section 8.18 so long as no Event of Default or Possible Default
then exists, and (b) the Borrower may make open market purchases of notes issued
pursuant to the Subordinated Note Indenture (to the extent permitted in, and in
accordance with the provisions of, the Subordinated Note Indenture as in effect
on the date hereof) so long as: (i) prior to making any such purchase, the
Borrower shall have demonstrated to the satisfaction of the Administrative Agent
that the Borrower will be in compliance with all of the covenants contained
herein after giving effect to such purchase; (ii) no Possible Default or Event
of Default exists at the time of making such distribution or would exist after
giving effect thereto; and (iii) prior to making any such purchase, the Borrower
shall have delivered to the Administrative Agent a certificate of its chief
financial officer in form and substance satisfactory to the Administrative Agent
which shall contain calculations demonstrating on a pro forma basis the
Borrower's compliance with the financial covenants set forth in this Section 8
after giving effect to such purchase. The Borrower shall not
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take any action in violation of any of the provisions of Article X of the
Subordinated Note Indenture and shall not permit any Subsidiary to take any
action in violation of any of the provisions of Article XI of the Subordinated
Note Indenture.
SECTION 9. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events, whether
voluntarily or involuntarily or by operation of law, shall constitute an Event
of Default hereunder:
9.1 Non-Payment. The Borrower shall fail to pay when due, whether by
acceleration of maturity or otherwise, any installment of principal due
hereunder or under any Note or shall fail to pay within three (3) days of the
date when due, whether by acceleration of maturity or otherwise, any installment
of interest due hereunder or under any Note or any fee or other payment
obligation in respect of the Obligations or payable pursuant to any Fee Letter.
9.2 Failure of Performance in Respect of Other Obligations.
(a) The Borrower shall fail to observe, perform or be in
compliance with any of the provisions of Section 7.1, 7.3, 7.8, or 8, or the
first sentence of Section 7.2; or
(b) the Borrower, any of its Subsidiaries or any other party
to a Loan Document (other than the Administrative Agent or a Bank) shall fail to
observe, perform or be in compliance with the terms of any Obligation, covenant
or agreement (other than those referred to in Section 7.1, 7.3, 7.8, 8 or 9.1,
or the first sentence of Section 7.2) to be observed, performed or complied with
by the Borrower, any of its Subsidiaries or such other party hereunder or under
any Loan Document and, provided that such failure is of a type which can be
cured, such failure shall continue and not be cured for thirty (30) days after:
(i) written notice thereof from the Administrative Agent or a Bank; or (ii) the
Administrative Agent or the Banks are notified thereof or should have been
notified thereof pursuant to the provisions of Section 7.6 hereof, whichever is
earlier.
9.3 Breach of Warranty. Any financial statement, representation,
warranty, statement or certificate made or furnished by the Borrower, any of its
Subsidiaries or any other party to a Loan Document (other than the
Administrative Agent or a Bank) in or in connection with this Agreement or any
Loan Document, or as an inducement to the Administrative Agent or the Banks to
enter into this Agreement and the Loan Documents, including, without limitation,
those in Section 5 above, shall have been false, incorrect or incomplete when
made or deemed made in any material respect.
9.4 Cross-Defaults. Any Change in Control or Event of Default, as
those terms are defined in the Subordinated Note Indenture as in effect as of
the date hereof, shall occur; or the Borrower or any of its Subsidiaries shall
default in any payment due on any Total Debt in excess of $250,000 and such
default shall continue for more than the period of grace, if any, applicable
thereto; or the Borrower or any of its Subsidiaries shall default in the
performance of or compliance with any term of any evidence of such Total Debt or
of any
73
mortgage, indenture or other agreement relating thereto, and any such default
shall continue for more than the period of grace, if any, specified therein if
such default causes, or permits the holder thereof to cause, the acceleration of
such Total Debt.
9.5 Assignment for Benefit of Creditors. The Borrower or any of its
Subsidiaries shall make any assignment for the benefit of its creditors, or
shall admit its insolvency or shall fail to pay its debts generally as such
debts become due.
9.6 Bankruptcy. Any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, shall be filed by
or against the Borrower or any of its Subsidiaries or any proceeding shall be
commenced by or against the Borrower or any of its Subsidiaries with respect to
relief under the provisions of any other applicable bankruptcy, insolvency or
other similar law of the United States or any State providing for the
reorganization, winding-up or liquidation of Persons or an arrangement,
composition, extension or adjustment with creditors; provided, however, that no
Event of Default shall be deemed to have occurred if any such involuntary
petition or proceeding shall be discharged within sixty days of its filing or
commencement.
9.7 Appointment of Receiver; Liquidation. Other than in connection
with a proceeding described in Section 9.6, a receiver or trustee shall be
appointed for the Borrower or any of its Subsidiaries or for any substantial
part of its assets, and such receiver or trustee shall not be discharged within
sixty (60) days of his appointment; any proceedings shall be instituted for the
dissolution or the full or partial liquidation of the Borrower or any of its
Subsidiaries and such proceedings shall not be dismissed or discharged within
sixty (60) days of their commencement; or the Borrower or any of its
Subsidiaries shall discontinue its business.
9.8 Judgments. The Borrower or any of its Subsidiaries shall incur
final judgments for the payment of money aggregating at any one time in excess
of $250,000 (to the extent not covered by insurance) and shall not discharge (or
make adequate provision for the discharge of) the same within a period of thirty
(30) days unless, pending further proceedings, execution thereon has been
effectively stayed; or a non-monetary judgment or order shall be rendered
against the Borrower or any of its Subsidiaries that could reasonably be
expected to have a Material Adverse Effect, and there shall be any period in
excess of thirty (30) consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect.
9.9 Impairment of Collateral; Invalidation of any Loan Document. (i)
A creditor of the Borrower or of any of its Subsidiaries shall obtain possession
of any significant portion of the collateral for the Obligations by any means,
including, without limitation, levy, distraint, replevin or self-help, or any
creditor shall establish or obtain any right in such collateral which is equal
or senior to a Lien of the Administrative Agent, for the benefit of the Banks,
in such collateral; or (ii) any material damage to, or loss, theft or
destruction of, any material collateral for the Loans shall occur, except to the
extent such loss, damage or injury is covered by insurance; or (iii) the
Administrative Agent, for the benefit of the Banks, shall cease to have a first
priority perfected lien (except for Permitted Liens) in all of the issued and
outstanding
74
Capital Stock of each Subsidiary of the Borrower and in substantially all of the
properties and assets of the Borrower and each Subsidiary; or (iv) any Lien
granted or created or purported to be granted or created by this Agreement or
any Loan Document shall cease or fail to be perfected with respect to any
significant portion of the collateral purported to be covered thereby; or (v)
this Agreement, any Note or any Loan Document ceases to be a legal, valid and
binding agreement or obligation enforceable against any party thereto
(including, without limitation, the Banks or the Administrative Agent) in
accordance with its terms, or shall be terminated, invalidated, set aside or
declared ineffective or inoperative and such cessation, termination, invalidity,
set aside or declaration could reasonably be expected to have a Material Adverse
Effect; or (vi) any party to any Loan Document shall contest or deny the
validity or enforceability of such Loan Document or any lien, security interest
or obligation purported to be created thereby.
9.10 Termination of License or Operating Agreement. The FCC or any
other Licensing Authority shall (a) revoke, terminate, substantially and
adversely modify or fail to renew any material License, or (b) designate any
material License for hearing or commence proceedings to suspend, revoke,
terminate or substantially and adversely modify any such License and such
proceedings shall not be dismissed or discharged within sixty (60) days; or any
Operating Agreement or any other agreement which is necessary to the operation
of a Station (including, without limitation, the Stations being acquired
pursuant to the ▇▇▇▇▇ Purchase Agreement and the Like-Kind Exchange Agreement),
a Newspaper, the Porta Phone Business or the Satellite Broadcasting Business
shall be revoked or terminated or materially, adversely modified and not
replaced by a substitute acceptable to the Required Banks within thirty (30)
days of such revocation, termination or modification.
9.11 Change of Control. (i) any Person (or group of Persons) is or
becomes the "beneficial owner" (within the meaning of Rules 13d-3 and 13d-5
under the federal Securities Exchange Act of 1934, as amended), directly or
indirectly, of a percentage of the voting Capital Stock of the Borrower greater
than thirty-five percent (35%), other than J. ▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇., the spouse and lineal descendants or either such individual, the
estate, executor, administrator, or other personal representative of either such
individual, or any trust created for either such individual or for the spouse or
lineal descendants of either such individual; or (ii) during any period of
twenty-four (24) consecutive months, individuals who at the beginning of such
period constituted the Board of Directors of the Borrower (together with any new
directors whose election by such Board or whose nomination for election by the
stockholders of the Borrower was approved by a majority of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors then in office; or
(iii) except as permitted pursuant to this Agreement, the Borrower shall cease
or fail to own, directly or indirectly, beneficial and legal title to all of the
issued and outstanding Capital Stock of each of its Subsidiaries or any
Subsidiary of the Borrower shall cease to be a wholly owned Subsidiary of the
Borrower.
75
9.12 Condemnation. Any court, government or governmental agency
shall condemn, seize or otherwise appropriate, or take custody or control of any
substantial portion of the assets of the Borrower or any of its Subsidiaries
pursuant to a final, non-appealable order.
9.13 Cessation of Operations. The Borrower's on-the-air broadcast
operations at any Station shall be interrupted at any time for more than
forty-eight (48) hours, whether or not consecutive, during any period of five
(5) consecutive days, unless (a) the broadcasting operations of all or
substantially all of the television stations in the relevant market also are
interrupted for a like period of time, or (b) the Borrower shall be receiving
during such period of interruption insurance sufficient to assure that its per
diem Operating Cash Flow during such period is at least equal to that which
could reasonably have been expected during such period but for the interruption.
9.14 Subordination. The Borrower or any holder of Subordinated Debt
shall fail to comply with the agreement or instrument governing or evidencing
such Subordinated Debt or any separate subordination agreement, and the
Administrative Agent shall have determined that such failure to comply could
reasonably be expected to have a material adverse effect on the Borrower or any
of its Subsidiaries or on its ability to perform its obligations hereunder or
under any of the Loan Documents or on the rights and remedies of the
Administrative Agent and the Banks hereunder or under the Loan Documents.
9.15 Material Adverse Effect. Any Material Adverse Effect shall
occur.
SECTION 10. REMEDIES.
Notwithstanding any contrary provision or inference herein or elsewhere,
10.1 Optional Defaults. If any Event of Default referred to in
Section 9.1 through and including Section 9.4 or Section 9.8 through and
including Section 9.15 shall occur, the Issuing Bank shall not be required to
issue any additional Letters of Credit, and the Administrative Agent, with the
consent of the Required Banks, upon written notice to the Borrower, may:
(a) terminate the Commitments and the credit hereby
established and forthwith upon such election the obligations of the Banks to
make any further Loans hereunder (other than Loans resulting from the funding of
Letters of Credit) immediately shall be terminated;
(b) accelerate the maturity of the Loans and all other
Obligations, whereupon all Obligations shall become and thereafter be
immediately due and payable in full without any presentment of demand and
without any further or other notice of any kind, all of which are hereby waived
by the Borrower; and/or
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(c) demand the payment to the Issuing Bank of the aggregate
stated amount of the outstanding Letters of Credit, which amount the Issuing
Bank shall hold as security for the obligations incurred under the Letters of
Credit.
10.2 Automatic Defaults. If any Event of Default referred to in
Sections 9.5 through and including 9.7 shall occur:
(a) the Commitments and the credit hereby established shall
automatically and forthwith terminate, and the Banks thereafter shall be under
no obligation to grant any further Loans hereunder (other than Loans resulting
from the funding of Letters of Credit);
(b) the principal of and interest on the Notes, then
outstanding, and all of the other Obligations shall thereupon become and
thereafter be immediately due and payable in full, all without any presentment,
demand or notice of any kind, which are hereby waived by the Borrower; and
(c) the Issuing Bank shall not be required to issue any
additional Letters of Credit, and the aggregate stated amount of the outstanding
Letters of Credit shall be immediately payable by the Borrower to the Issuing
Bank, which amount the Issuing Bank shall hold as security for the obligations
incurred under the Letters of Credit.
10.3 Performance by the Banks. If at any time after the occurrence
and during the continuance of an Event of Default the Borrower or any of its
Subsidiaries fails or refuses to pay or perform any material obligation or duty
to any third Person, except for payments which are the subject of bona fide
disputes in the ordinary course of business, the Administrative Agent or the
Banks may, in their sole discretion, but shall not be obligated to, pay or
perform the same on behalf of the Borrower or such Subsidiary, and the Borrower
shall promptly repay all amounts so paid, and all costs and expenses so
incurred. This repayment obligation shall become one of the Obligations of the
Borrower hereunder and shall bear interest at the Default Interest Rate.
10.4 Other Remedies. Upon the occurrence of an Event of Default, the
Administrative Agent and the Banks may exercise any other right, power or remedy
as may be provided herein, in the Notes or in any other Loan Document, or as may
be provided at law or in equity, including, without limitation, the right to
recover judgment against the Borrower for any amount due either before, during
or after any proceedings for the enforcement of any security or any realization
upon any security.
10.5 Enforcement and Waiver by the Banks. The Administrative Agent
and the Banks shall have the right at all times to enforce the provisions of
this Agreement and all Loan Documents in strict accordance with the terms hereof
and thereof, notwithstanding any conduct or custom on the part of the
Administrative Agent or the Banks in refraining from so doing at any time,
unless the Administrative Agent or the Banks shall have waived such enforcement
in writing in respect of a particular instance. The failure of the
Administrative Agent or the Banks at any time to enforce their rights under such
provisions shall not be construed as having created
77
a custom or course of dealing in any way contrary to the specific provisions of
this Agreement or the Loan Documents, or as having in any way modified or waived
the same. All rights, powers and remedies of the Administrative Agent and the
Banks are cumulative and concurrent and the exercise of one right, power or
remedy shall not be deemed a waiver or release of any other right, power or
remedy.
SECTION 11. THE ADMINISTRATIVE AGENT.
11.1 Appointment. NationsBank, N.A. is hereby appointed
Administrative Agent hereunder, and each of the Banks irrevocably authorizes the
Administrative Agent to act as the Administrative Agent of such Bank. The
Administrative Agent agrees to act as such upon the express conditions contained
in this Section 11. NationsBank, N.A. is hereby appointed Syndication Agent, Key
Corporate Capital Inc. is hereby appointed Documentation Agent, and NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities LLC is hereby appointed Lead Arranger. NationsBank, N.A.,
as Syndication Agent, Key Corporate Capital Inc., as Documentation Agent, and
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, as Lead Arranger, shall have no rights or
obligations hereunder or under any of the Loan Documents in its capacity as
Syndication Agent, Documentation Agent and Lead Arranger, respectively. None of
the Administrative Agent, the Syndication Agent, the Documentation Agent or the
Lead Arranger shall have a fiduciary relationship in respect of any Bank by
reason of this Agreement.
11.2 Powers. The Administrative Agent shall have any may exercise
such powers hereunder as are specifically delegated to it by the terms hereof,
together with such powers as are reasonably incidental thereto. The
Administrative Agent shall not have any implied duties or any obligation to the
Banks to take any action hereunder except any action specifically provided by
this Agreement to be taken by the Administrative Agent.
11.3 General Immunity. Neither the Administrative Agent nor any of
its directors, officers, affiliates, agents or employees shall be liable to the
Banks or any Bank for any action taken or omitted to be taken by it or them
hereunder or in connection herewith except for its or their own gross negligence
or willful misconduct. Without limiting the foregoing, none of the
Administrative Agent, the Syndication Agent, the Documentation Agent, the Lead
Arranger, or any of their respective directors, officers, affiliates, agents or
employees shall be responsible for, or have any duty to examine (a) the
genuineness, execution, validity, effectiveness, enforceability, value or
sufficiency of this Agreement, any Loan Document, or any other document or
instrument furnished pursuant to or in connection with this Agreement or any
Loan Document, (b) the collectibility of any amounts owed by the Borrower, (c)
any recitals, statements, reports, representations or warranties made in
connection with this Agreement or any Loan Document, (d) the performance or
satisfaction by the Borrower or any Subsidiary of any covenant or agreement
contained herein or in any Loan Document, (e) any failure of any party to this
Agreement to receive any communication sent, including any telegram, teletype,
bank wire, cable, radiogram or telephone message sent or any writing,
application, notice, report, statement, certificate, resolution, request, order,
consent letter or other instrument or paper or communication entrusted to the
mails or to a delivery service, or (f) the assets or liabilities or financial
condition or results of operations or business or credit-worthiness of the
Borrower or
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any of its Subsidiaries. The Administrative Agent shall not be bound to
ascertain or inquire as to the performance or observance of any of the terms of
this Agreement or any Loan Document.
11.4 Action on Instructions of the Banks. The Administrative Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Banks
(subject to Section 11.12 hereof), and such instructions shall be binding upon
all the Banks and all holders of the Notes; provided, however, that the
Administrative Agent shall not be required to take any action which exposes it
to personal liability or which is contrary to this Agreement or applicable law.
The foregoing provisions of this Section 11.4 shall not limit in any way the
exercise by any Bank of any right or remedy granted to such Bank pursuant to the
terms of this Agreement or any Loan Document. Except as otherwise expressly
provided herein, any reference in this Agreement to action by the Banks shall be
deemed to be a reference to the Required Banks. The Banks hereby direct the
Administrative Agent and the Documentation Agent to execute and deliver to the
Borrower documentation necessary to effect the release of collateral required to
consummate the Like-Kind Exchange Agreement.
11.5 Employment of Administrative Agents and Counsel. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder by or through employees, Administrative Agents and attorneys-in-fact
and shall not be answerable to the Banks, except as to money or securities
received by it or its authorized Administrative Agents, for the default or
misconduct of any such Administrative Agents or attorneys-in-fact selected by it
with reasonable care.
11.6 Reliance on Documents; Counsel. The Administrative Agent shall
be entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper, document or other communication believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, with respect to legal matters, upon the opinion of
counsel selected by the Administrative Agent, which counsel may be employees of
the Administrative Agent, concerning all matters pertaining to the agency hereby
created and its duties hereunder.
11.7 Administrative Agent's Reimbursement and Indemnification. The
Banks agree to reimburse and indemnify the Administrative Agent (which
indemnification shall be shared by the Banks ratably in proportion to their
respective Ratable Shares of the Loans) (a) for any amounts not reimbursed by
the Borrower for which the Administrative Agent is entitled to reimbursement by
the Borrower hereunder or under any Loan Document, (b) for any other expenses
reasonably incurred by the Administrative Agent on behalf of the Banks, in
connection with the preparation, execution, delivery, administration, amendment
or enforcement hereof or of any of the Loan Documents and (c) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement, any Loan Document or any other
document related hereto or thereto or the transactions contemplated hereby or
the enforcement of any of the terms
79
hereof or thereof or of any such other document; provided, however, that no Bank
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Administrative Agent.
11.8 Rights as a Bank. With respect to its Ratable Share of the
Commitments, the Loans made by it, the Notes issued to it, and the Letters of
Credit issued by it, the Administrative Agent shall have the same rights and
powers hereunder as any Bank and may exercise the same as though it were not the
Administrative Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include the Administrative Agent, in its individual
capacity. Each of the Administrative Agent, may accept deposits from, lend money
to, and generally engage in any kind of banking or trust business with the
Borrower or any of its Subsidiaries as if it were not the Administrative Agent,
hereunder.
11.9 Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Bank and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Bank also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Bank 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 and the other Loan Documents. The Administrative Agent shall not be
required to keep the Banks informed as to the performance or observance by the
Borrower and its Subsidiaries of this Agreement or any other document referred
to or provided for herein or to inspect the properties or books of the Borrower
or any of its Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
of its Subsidiaries which may come into its possession.
11.10 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Banks. Upon any such
resignation, the Required Banks shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
thirty (30) days after the notice of resignation, then the retiring
Administrative Agent may appoint a successor Administrative Agent. Such
successor Administrative Agent shall be a commercial bank having capital and
retained earnings of at least $500,000,000. Upon the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. After any retiring Administrative
Agent's resignation hereunder as the Administrative Agent, the provisions of
this Section 11 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent hereunder.
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11.11 Ratable Sharing. All principal and interest payments on Loans
and commitment fees received by the Administrative Agent shall be remitted to
the Banks in accordance with their Ratable Shares. Any amounts received by the
Administrative Agent or any other Bank upon the sale of any collateral for the
Loans or upon the exercise of any remedies hereunder or under any of the Loan
Documents or upon the exercise of any rights of setoff shall be remitted to the
Banks in accordance with their Ratable Shares of the Loans; provided, however,
that, solely for purposes of the sharing of any amounts received by the
Administrative Agent or any other Bank, if at the time of any such receipt the
Borrower has defaulted under any agreements regarding Rate Hedging Obligations
entered into pursuant to Section 7.12 with any Bank or any Affiliate of any
Bank, then the Ratable Share of the affected Bank shall be proportionately
increased and the Ratable Shares of the other Banks shall be proportionately
decreased based upon the amount due to the affected Bank (or such Bank's
Affiliate) pursuant to such agreements. If any Bank shall obtain any payment
hereunder (whether voluntary, involuntary, through exercise of any right of
set-off or otherwise) in excess of its Ratable Share, then such Bank shall
immediately remit such excess to the other Banks pro rata.
11.12 Actions by the Administrative Agent and the Banks. The
Administrative Agent shall take formal action following the occurrence of a
Possible Default or an Event of Default only upon the agreement of the Required
Banks; provided, however, that if the Administrative Agent gives notice to the
Banks of a Possible Default or an Event of Default, and the Required Banks
cannot agree (which agreement shall not be unreasonably withheld) on a mutual
course of action within thirty (30) days following such notice, the
Administrative Agent may (but shall not be required to) pursue such legal rights
and remedies against the Borrower as it deems necessary and appropriate to
protect the Banks and any collateral under the circumstances.
SECTION 12. MISCELLANEOUS.
12.1 Construction. The provisions of this Agreement shall be in
addition to those of the Loan Documents and to those of any other guaranty,
security agreement, note or other evidence of the liability relating to the
Borrower held by the Banks, all of which shall be construed as complementary to
each other. Nothing contained herein shall prevent the Administrative Agent or
the Banks from enforcing any or all of such instruments in accordance with their
respective terms. Each right, power or privilege specified or referred to in
this Agreement or in any Loan Document is in addition to any other rights,
powers or privileges that the Administrative Agent or the Banks may otherwise
have or acquire by operation of law, by other contract or otherwise. No course
of dealing in respect of, nor any omission or delay in the exercise of, any
right, power or privilege by the Administrative Agent or the Banks shall operate
as a waiver thereof, nor shall any single or partial exercise thereof preclude
any further or other exercise thereof or of any other, as each right, power or
privilege may be exercised independently or concurrently with others and as
often and in such order as the Administrative Agent or the Banks may deem
expedient. Notwithstanding any other provision of this Agreement, the Borrower
shall not be required to pay any amount of interest pursuant hereto which is in
excess of the maximum amount permitted by law.
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12.2 Further Assurance. From time to time, the Borrower shall
execute and deliver to the Banks, and shall cause its Subsidiaries to execute
and deliver to the Banks, such additional documents and take such actions as the
Administrative Agent may reasonably require to carry out the purposes of this
Agreement or any of the Loan Documents, or to preserve and protect the rights of
the Administrative Agent and the Banks hereunder or thereunder.
12.3 Expenses of the Administrative Agent and the Banks;
Indemnification.
(a) Whether or not the transactions contemplated by this
Agreement are consummated, the Borrower shall pay the costs and expenses,
including, without limitation, the reasonable fees and disbursements of the
Administrative Agent's special counsel, incurred by the Administrative Agent and
the Banks in connection with: (i) the negotiation, preparation, amendment or
enforcement of this Agreement and the Loan Documents and any amendment or
modification thereof and the closing of the transactions contemplated hereby and
thereby; (ii) the perfection of the Liens granted pursuant hereto and pursuant
to the Loan Documents; (iii) the making of the Loans and the issuance of the
Letters of Credit hereunder; (iv) the negotiation, preparation or enforcement of
any other document in connection with this Agreement, the Loan Documents or the
Loans made hereunder; (v) any proceeding brought or formal action taken by the
Administrative Agent or the Banks to enforce any provision of this Agreement or
any Loan Document, or to enforce or exercise any right, power or remedy
hereunder or thereunder; or (vi) any action which may be taken or instituted by
any Person against the Administrative Agent or any Bank as a result of any of
the foregoing; provided, however, that the Borrower shall not be responsible for
the legal fees of any Bank other than the Administrative Agent in respect of any
period prior to the occurrence of a Possible Default. The estimated fees and
expenses of the Administrative Agent's special counsel, Powell, Goldstein,
▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, Atlanta, Georgia, through the Closing shall be paid on the
Closing Date.
(b) The Borrower hereby indemnifies and holds harmless the
Administrative Agent and each Bank and their respective directors, officers,
employees, Administrative Agents, counsel, subsidiaries and affiliates (the
"Indemnified Persons") from and against any and all claims, losses, liabilities,
obligations, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever (including, without limitation,
reasonable attorneys fees) which may be imposed on, incurred by, or asserted
against any Indemnified Person in any way relating to or arising out of this
Agreement, the Loan Documents, or any of them, or the Loans made pursuant hereto
or the Letters of Credit issued pursuant hereto, or the use of the proceeds
thereof or any of the transactions contemplated hereby or thereby or the
ownership or operation of the Stations (including, without limitation, the
Stations being acquired pursuant to the ▇▇▇▇▇ Purchase Agreement and the
Like-Kind Exchange Agreement), the Newspapers, the Porta Phone Business or the
Satellite Broadcasting Business or any of the other assets or businesses of the
Borrower or its Subsidiaries or the breach by the Borrower or any of its
Subsidiaries of any of the representations, warranties, covenants and agreements
contained herein or in any Loan Document; provided, however, that the Borrower
shall not be liable to any Indemnified Person, if there is a final
non-appealable judicial determination that such claims, losses, liabilities,
obligations, damages, penalties, actions,
82
judgments, suits, costs, expenses or disbursements resulted solely from the
gross negligence or willful misconduct of such Indemnified Person.
12.4 Notices. Except as otherwise expressly provided herein, all
notices, demands and requests required or permitted to be given under the
provisions of this Agreement shall be in writing and shall be deemed to have
been duly delivered and received (a) on the date of personal delivery, (b) on
the date of receipt (as shown on the return receipt) if mailed by registered or
certified mail, postage prepaid and return receipt requested, (c) on the next
business day after delivery to a courier service that guarantees delivery on the
next business day if the conditions to the courier's guarantee are complied
with, or (d) on the date of receipt by telecopy, in each case addressed as
follows:
TO THE ADMINISTRATIVE AGENT:
NationsBank, N.A.
Agency Services
NC1-001-15-04
Independence Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, Norh Carolina
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
NationsBank, N.A.
Financial Strategies Group
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
TO THE BANKS, THE SYNDICATION AGENT OR THE DOCUMENTATION AGENT, AT THE
ADDRESSES LISTED ON THE SCHEDULE 2 ATTACHED HERETO OR IN THE ASSIGNMENT
INSTRUMENT DELIVERED PURSUANT TO SECTION 12.7(b)
TO THE BORROWER OR ANY OF ITS SUBSIDIARIES:
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▇▇▇▇ Communications Systems, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
84
With a copy to:
▇▇▇▇ ▇. ▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
2300 ▇▇▇▇ Tower
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address or addresses as the party to which such notice is
directed may have designated in writing to the other parties hereto.
12.5 Waiver and Release by the Borrower. Neither the Administrative
Agent, nor any Bank, nor any Affiliate, officer, director, employee, attorney or
Administrative Agent of the Administrative Agent or any Bank shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to ▇▇▇ any of them upon, any claim for any special, indirect, incidental or
consequential damages suffered or incurred by the Borrower or any of its
Subsidiaries in connection with, arising out of, or in any way related to, this
Agreement or any of the Loan Documents, or any of the transactions contemplated
by this Agreement or any of the Loan Documents, unless arising from the gross
negligence or willful misconduct of such Person as determined by a final
non-appealable judgment of a court of competent jurisdiction.
12.6 Right of Set Off. Upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank or
an Affiliate of such Bank to or for the credit or the account of the Borrower or
any of its Subsidiaries against any and all of the obligations of the Borrower
or any of its Subsidiaries now or hereafter existing hereunder or under any Loan
Document, irrespective of whether or not such Bank shall have made any demand
hereunder or under any Loan Document and although such obligations may be
unmatured. Such Bank agrees promptly to notify the Administrative Agent and the
Borrower after any such set-off and application made by such Bank; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Banks under this Section 12.6
are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which the Banks may have. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in the Notes may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of the Borrower or any of its Subsidiaries
in the amount of such participation.
12.7 Successors and Assigns; Participations.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; provided, however, that the Borrower may not assign or
transfer any of its rights or obligations hereunder
85
or under the Notes without the prior written consent of all of the Banks and the
Administrative Agent.
(b) Each Bank may assign all or any part of any of its
Loans, its Notes, and its share of the Commitments and the Letters of Credit
with the consent of the Borrower and the Administrative Agent, which consent
shall not be unreasonably withheld; provided, however, that (i) no such consent
by the Borrower shall be required (A) for any such assignment by any Bank to an
Affiliate of such Bank, (B) if, at the time of such assignment, an Event of
Default or Possible Default has occurred and is continuing, (C) in the case of
any assignment to another branch or a principal office of a Bank, or (D) for any
such assignment to another Bank or an Affiliate of another Bank; (ii) any such
partial assignment shall be in an amount at least equal to $5,000,000; and (iii)
each such assignment shall be made by a Bank in such manner that the same
portion of its Loans, its Notes, its share of the Commitments and its
participation in the Letters of Credit is assigned to the assignee. Upon
execution and delivery by the assignor and the assignee to the Borrower and the
Administrative Agent of an instrument in writing pursuant to which such assignee
agrees to become a "Bank" hereunder (if not already a Bank) having the share of
the Commitments, Loans and Letters of Credit specified in such instrument, and
upon consent thereto by the Administrative Agent and the Borrower (to the extent
required), the assignee shall have, to the extent of such assignment (unless
otherwise provided in such assignment with the consent of the Administrative
Agent), the obligations, rights and benefits of a Bank hereunder holding the
share of the Commitments, Loans and Letters of Credit (or portions thereof)
assigned to it (in addition to the share of the Commitments, Loans and Letters
of Credit, if any, theretofore held by such assignee) and the assigning Bank
shall, to the extent of such assignment, be released from the share of the
Commitments, the Letters of Credit and the obligations hereunder so assigned.
(c) Upon its receipt of an assignment pursuant to Section
12.7(b) above duly executed by an assigning Bank and the assignee, together with
any Notes subject to such assignment and the Administrative Agent's standard
processing and recordation fee of $3,500, the Administrative Agent shall, if
such assignment has been completed, accept such assignment. Within five (5)
business days after receipt of such notice, the Borrower, at the Borrower's own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Notes new Notes to the order of the assignee in an amount equal
to the share of the Commitments, of the Loans and of the Letters of Credit
assumed by the assignee and, if the assigning Bank has retained a portion of the
Commitments, the Loans and the Letters of Credit hereunder, new Notes to the
order of the assigning Bank in an amount equal to the share of the Commitments
and the Loans retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such assignment and shall otherwise
be in substantially the form of Exhibit G attached hereto in the case of
Revolving Notes, or Exhibit F attached hereto in the case of Term Notes.
Cancelled Notes shall be returned to the Borrower.
(d) A Bank may sell or agree to sell to one or more other
Persons (each, a "Participant") a participation in all or any part of any Loans
held by it, or in its share of the Commitments and the Letters of Credit. Except
as otherwise provided in the last sentence of
86
this Section 12.7(d), no Participant shall have any rights or benefits under
this Agreement or any Note or any other Loan Documents (the Participant's rights
against such Bank in respect of such participation to be those set forth in the
agreements executed by such Bank in favor of the Participant). All amounts
payable by the Borrower to any Bank under Section 2 hereof in respect of Loans
held by it, and its share of the Commitments, shall be determined as if such
Bank had not sold or agreed to sell any participations in such Loans and share
of the Commitments, and as if such Bank were funding each of such Loans and its
share of the Commitments in the same way that it is funding the portion of such
Loans and its share of the Commitments in which no participations have been
sold. In no event shall a Bank that sells a participation agree with the
Participant to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Bank may agree with the Participant that
it will not, without the consent of the Participant, agree to any modification,
supplement or waiver hereof or of any of the other Loan Documents to the extent
that the same, under Section 12.12, requires the consent of each Bank. The
Borrower agrees that each Participant shall be entitled to the benefits of
Sections 2.8 through and including 2.15 and Section 12.6 with respect to its
participating interest.
(e) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.7, any Bank may
assign and pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning Bank
from its obligations hereunder.
(f) A Bank may furnish any information concerning the
Borrower and its Subsidiaries in the possession of such Bank from time to time
to assignees and participants (including prospective assignees and
participants).
(g) Anything in this Section 12.7 to the contrary
notwithstanding, no Bank may assign or participate any interest in any Loan held
by it hereunder to the Borrower or any of its Affiliates without the prior
written consent of all of the Banks.
12.8 APPLICABLE LAW. THIS AGREEMENT AND THE LOAN DOCUMENTS, AND THE
DUTIES, RIGHTS, POWERS AND REMEDIES OF THE PARTIES HERETO AND THERETO, SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF GEORGIA,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF, EXCEPT TO THE EXTENT
THAT ANY LOAN DOCUMENT PROVIDES THAT THE LOCAL LAW OF ANOTHER JURISDICTION
GOVERNS THE GRANT, PERFECTION OR ENFORCEMENT OF THE LIENS GRANTED PURSUANT TO
SUCH LOAN DOCUMENT. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY
THE BORROWER AND THE ADMINISTRATIVE AGENT ON BEHALF OF THE BANKS AND SHALL BE
SUBJECT TO NO EXCEPTIONS. THE BORROWER HAS MADE THIS CHOICE OF GOVERNING LAW
KNOWINGLY AND WILLINGLY AND AFTER CONSULTING WITH ITS COUNSEL. NONE OF THE
ADMINISTRATIVE AGENT, THE SYNDICATION AGENT, THE DOCUMENTATION AGENT, THE LEAD
ARRANGER, ANY BANK, NOR THE
87
BORROWER HAVE AGREED WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF
THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
12.9 ENFORCEMENT. THE BORROWER (A) HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF GEORGIA AND TO THE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA, FOR
THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR ANY LOAN DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF
BROUGHT BY THE ADMINISTRATIVE AGENT OR THE BANKS OR THEIR SUCCESSORS OR ASSIGNS
AND (B) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE,
OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT
SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS
PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION
OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY LOAN DOCUMENT OR
THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT,
AND (C) HEREBY WAIVES AND AGREES NOT TO SEEK ANY REVIEW BY ANY COURT OF ANY
OTHER JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF THE
JUDGMENT OF ANY SUCH GEORGIA STATE OR FEDERAL COURT. THE BORROWER HEREBY
CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL AT THE ADDRESS TO WHICH
NOTICES ARE TO BE GIVEN. THE BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION
AND ITS CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF
THE ADMINISTRATIVE AGENT AND THE BANKS. FINAL JUDGMENT AGAINST THE BORROWER IN
ANY SUCH ACTION, SUIT OR PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, OR IN ANY OTHER MANNER PROVIDED BY
OR PURSUANT TO THE LAWS OF SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE
ADMINISTRATIVE AGENT OR THE BANKS MAY AT THEIR OPTION BRING SUIT, OR INSTITUTE
OTHER JUDICIAL PROCEEDINGS, AGAINST THE BORROWER OR ANY OF ITS ASSETS IN ANY
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ OR OF ANY COUNTRY OR PLACE WHERE THE
BORROWER, OR SUCH ASSETS, MAY BE FOUND.
12.10 JURY TRIAL WAIVER. THE BORROWER, THE ADMINISTRATIVE AGENT AND
THE BANKS EACH WAIVE IRREVOCABLY, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT OR OTHERWISE, BETWEEN THE BANKS AND THE BORROWER ARISING OUT OF, IN
CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE NOTES OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
88
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO AND THERETO. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS
ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE BANKS FURTHER
WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING (UNLESS EXPRESSLY MODIFIED IN
WRITING BY ALL PARTIES HERETO), AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING
TO THE LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
12.11 Binding Effect and Entire Agreement. This Agreement shall
inure to the benefit of, and shall be binding upon, the respective successors
and permitted assigns of the parties hereto. This Agreement, the Schedules and
Exhibits hereto, which are hereby incorporated in this Agreement, and the Loan
Documents constitute the entire agreement among the parties on the subject
matter hereof.
12.12 Counterparts. This Agreement may be executed in any number of
counterparts or duplicate originals, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.
12.13 Survival of Agreements. All covenants, agreements,
representations and warranties made herein or in any Loan Document shall survive
any investigation and the Closing and shall continue in full force and effect so
long as any of the Obligations remain to be performed or paid or the Banks have
any obligation to advance sums hereunder or any Letters of Credit remain
outstanding.
12.14 Modification. Any term of this Agreement or of the Notes may
be amended and the observance of any term of this Agreement or of the Notes may
be waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Borrower and the Required
Banks or, if there are only two (2) Banks each of which holds a Ratable Share of
eighty percent (80%) or less of the Loans, with the written consent of the
Borrower and both Banks; provided, however, that no such amendment or
89
waiver or other action shall, without the prior written consent of all of the
Banks or the holders of all of the Notes at the time outstanding, (a) extend the
maturity or reduce the principal amount of, or reduce the rate or extend the
time of payment of interest on, or reduce the amount or extend the time of
payment of any principal installment of, any Note, (b) reduce the amount or
extend the time of payment of the commitment fees, (c) change the Commitments or
the Ratable Share of any Bank (other than any change in Commitments or Ratable
Share resulting from the sale of a participation in or assignment of any Bank's
interest in the Commitments and Loans in accordance with subsection 12.7 or
resulting from an increase in Commitments under Section 2.16), (d) change the
percentage referred to in the definition of "Required Banks" contained in
Section 1.1 or reduce the number of Banks required to approve any waiver,
amendment or modification, (e) amend this Section 12.14, (f) amend or waive
compliance with Section 2.7(b), (g) release any collateral or any guaranty for
the Loans except in connection with a sale permitted pursuant to Section 8.10,
(h) amend or waive any of the conditions precedent set forth in Section 6 for
the making of the initial Loans on the Closing Date, or (i) extend the
expiration date of any outstanding Letter of Credit or postpone the
reimbursement obligations of the Borrower in respect of any Letter of Credit or
reduce the fees payable by the Borrower in respect of any Letter of Credit; and
provided, further, however, that notwithstanding the foregoing provisions of
this Section 12.14, this Agreement and the Notes may be amended or modified in
the manner contemplated by Section 12.7 for the purpose of permitting any Bank
to assign its interest, rights and obligations hereunder to another Person if
the appropriate assignment agreement or counterparts thereof are executed by the
Borrower (to the extent required), the Administrative Agent and the appropriate
Bank assignor and assignee. Any amendment or waiver effected in accordance with
this Section 12.14 shall be binding upon each holder of any Note at the time
outstanding, each future holder of any Note and the Borrower.
12.15 Separability. If any one or more of the provisions contained
in this Agreement or any Loan Document should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of all
remaining provisions shall not in any way be affected or impaired. Any provision
of this Agreement which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
12.16 Section Headings. The Section headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.17 Termination. This Agreement shall terminate when all amounts
due hereunder, under the Notes and under each Loan Document shall have been
indefeasibly paid in full in cash and all other Obligations hereunder or
thereunder shall have been fully performed, so long as no Letters of Credit are
then outstanding and the Banks have no further obligation to advance sums
hereunder. Upon such termination, at the request of the Borrower, the
Administrative Agent and the Banks shall release all Liens granted herein or in
any Loan Document at the Borrower's expense and return all collateral held
pursuant hereto or to any Loan Document without recourse or representation.
Notwithstanding anything to the contrary
90
contained herein, each expense reimbursement and indemnification provision in
this Agreement or in any Loan Document shall survive the repayment in full of
the Loans and the termination of this Agreement.
12.18 FCC Compliance.
(a) Notwithstanding anything herein or in any of the Loan
Documents to the contrary, but without limiting or waiving the Borrower's or any
of its Subsidiaries' obligations hereunder or under any of the Loan Documents,
the Administrative Agent's and the Banks' remedies hereunder and under the Loan
Documents are subject to compliance with the Communications Act of 1934, as
amended, and to all applicable rules, regulations and policies of the FCC, and
neither the Administrative Agent nor the Banks will take any action pursuant to
this Agreement or any of the Loan Documents that will constitute or result in
any assignment of a License issued by the FCC or any change of control of the
Borrower or any of its Subsidiaries which owns any FCC License if such
assignment of License or change of control would require under then existing law
(including, without limitation, the written rules and regulations promulgated by
the FCC), the prior approval of the FCC, without first obtaining such approval
of the FCC. This Agreement, the Loan Documents and the transactions contemplated
hereby and thereby do not and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
of the Borrower or any of its Subsidiaries by the Administrative Agent or the
Banks or control, affirmative or negative, direct or indirect, of the Borrower
or any of its Subsidiaries by the Administrative Agent or the Banks, over the
management or any other aspect of the operation of the Borrower or any of its
Subsidiaries, which ownership and control remain exclusively and at all times in
the stockholders and directors of the Borrower and its Subsidiaries until such
time as the Administrative Agent and the Banks have complied with such law,
rules, regulations and policies.
(b) Furthermore, the parties acknowledge their intent that,
upon the occurrence of an Event of Default, the Administrative Agent and the
Banks shall receive, to the fullest extent permitted by applicable law and
governmental policy (including, without limitation, the rules, regulations and
policies of the FCC), all rights necessary or desirable to obtain, use or sell
the Licenses and the collateral securing the Loans, and to exercise all remedies
available to them under this Agreement, the Loan Documents, the Uniform
Commercial Code or other applicable law. Therefore, the parties agree that, in
the event of changes in law or governmental policy occurring after the date
hereof that affect in any manner the Administrative Agent's or the Banks' rights
of access to, or ability to obtain a Lien in, or use or sale of, the Licenses or
such collateral, or the procedures necessary to enable the Administrative Agent
or the Banks to obtain such rights of access, Liens, use or sale, the
Administrative Agent, the Banks and the Borrower shall amend this Agreement and
the Loan Documents in such manner as the Administrative Agent shall reasonably
request, in order to provide the Administrative Agent and the Banks such rights
to the greatest extent possible consistent with then applicable law and
governmental policy.
12.19 Marshaling; Payments Set Aside. The Administrative Agent and
the Banks shall not be under any obligation to marshal any assets in favor of
the Borrower or any
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other Person or against or in payment of any or all of the Obligations. To the
extent that the Borrower or any of its Subsidiaries makes a payment or payments
to the Administrative Agent or the Banks or the Administrative Agent or any Bank
enforces its security interest or exercises its rights of setoff, and such
payment or payments or the process of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party
under any bankruptcy or insolvency law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement had not occurred.
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TO WITNESS THE ABOVE, the Borrower, the Banks and the Administrative Agent
have caused this Loan Agreement to be executed by their respective
representatives thereunto duly authorized as of the date first above written.
BORROWER: . ▇▇▇▇ COMMUNICATIONS SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer
NATIONSBANK, N.A., as Administrative
Agent, Syndication Agent, and a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
Title: Senior V. President
________________________________
KEY CORPORATE CAPITAL INC. (f/k/a KeyBank
National Association), as Documentation
Agent, and a Bank
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
Title: Senior Portfolio Manager
____________________________________
CIBC INC., as a Bank
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________
Title: Executive Director
________________________________
THE BANK OF NEW YORK, as a Bank
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
______________________________
Title: Vice President
_____________________________
FIRST UNION NATIONAL BANK
(f/k/a CoreStates Bank, N.A.), as a Bank
By:/s/ ▇▇▇ ▇▇▇▇▇▇
_____________________________________
Name: ▇▇▇ ▇▇▇▇▇▇
___________________________________
Title: Senior Vice President
__________________________________