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EXHIBIT 4.15
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SALEM COMMUNICATIONS CORPORATION
-------------------------------------
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE __, 1999
BY AND AMONG
SALEM COMMUNICATIONS CORPORATION,
THE BANK OF NEW YORK,
AS ADMINISTRATIVE AGENT,
BANK OF AMERICA NT&SA,
AS DOCUMENTATION AGENT,
BANKBOSTON, N.A.,
FLEET BANK, N.A.,
AND
UNION BANK OF CALIFORNIA, N.A.,
AS CO-AGENTS
AND
THE LENDERS PARTY HERETO
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WITH
BNY CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND BOOK MANAGER
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TABLE OF CONTENTS
1. DEFINITIONS........................................................................1
1.1 Defined Terms.............................................................1
1.2 Principles of Construction...............................................19
2. AMOUNT AND TERMS OF LOANS.........................................................20
2.1 Loans....................................................................20
2.2 Notes....................................................................20
2.3 Procedure for Borrowing Loans............................................21
2.4 Reduction and Increase of Commitments....................................22
2.5 Prepayments of the Loans.................................................26
2.6 Interest Rate and Payment Dates; Highest Lawful Rate.....................27
2.7 Use of Proceeds..........................................................29
2.8 Conversions; Other Matters...............................................29
2.9 Indemnification for Loss.................................................30
2.10 Reimbursement for Costs.................................................31
2.11 Illegality of Funding...................................................32
2.12 Option to Fund..........................................................32
2.13 Taxes; Net Payments.....................................................33
2.14 Capital Adequacy........................................................34
2.15 Substituted Interest Rate...............................................34
2.16 Transaction Record......................................................35
2.17 Certificates of Payment and Reimbursement; Other Provisions
Regarding Yield Protection.............................................35
2.18 Letter of Credit Sub-Facility...........................................36
2.19 Letter of Credit Participation..........................................37
2.20 Absolute Obligation with respect to Letter of Credit Payments...........39
3. FEES; PAYMENTS....................................................................39
3.1 Fees.....................................................................39
3.2 Pro Rata Treatment and Application of Payments...........................40
4. REPRESENTATIONS AND WARRANTIES....................................................41
4.1 Subsidiaries.............................................................41
4.2 Corporate Existence and Power............................................41
4.3 Authority................................................................42
4.4 Governmental Authority Approvals.........................................42
4.5 Binding Agreement........................................................42
4.6 Litigation...............................................................42
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4.7 No Conflicting Agreements................................................42
4.8 Taxes....................................................................43
4.9 Compliance with Applicable Laws..........................................43
4.10 Governmental Regulations................................................43
4.11 Property; Broadcasting Business.........................................44
4.12 Federal Reserve Regulations; Use of Proceeds............................44
4.13 No Misrepresentation....................................................44
4.14 Plans...................................................................45
4.15 FCC Matters.............................................................45
4.16 Burdensome Obligations..................................................45
4.17 Financial Statements....................................................46
4.18 Environmental Matters...................................................46
4.19 Year 2000...............................................................47
5. CONDITIONS OF EFFECTIVENESS AND LENDING...........................................47
5.1 Effectiveness............................................................47
5.2 All Loans and Letters of Credit..........................................50
6. FINANCIAL COVENANTS...............................................................51
6.1 Total Leverage Ratio.....................................................51
6.2 Consolidated Annual Operating Cash Flow to Pro-Forma Debt Service........52
6.3 Consolidated Annual Operating Cash Flow to Interest Expense..............52
6.4 Consolidated Annual Operating Cash Flow to Fixed Charges.................52
7. AFFIRMATIVE COVENANTS.............................................................53
7.1 Financial Statements.....................................................53
7.2 Certificates; Other Information..........................................54
7.3 Legal Existence..........................................................56
7.4 Taxes....................................................................56
7.5 Insurance and Condemnation...............................................57
7.6 Payment of Indebtedness and Performance of Obligations...................58
7.7 Condition of Property....................................................58
7.8 Observance of Legal Requirements; ERISA; Environmental Laws..............58
7.9 Inspection of Property; Books and Records; Discussions...................59
7.10 FCC Licenses, Etc.......................................................59
7.11 Subsidiary Guaranty.....................................................59
7.12 Mortgages...............................................................59
8. NEGATIVE COVENANTS................................................................60
8.1 Borrowing................................................................60
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8.2 Liens....................................................................60
8.3 Merger or Acquisition of Property........................................61
8.4 Dividends; Purchase of Stock.............................................63
8.5 Investments, Loans, Etc..................................................63
8.6 Business Changes.........................................................65
8.7 Sale of Property.........................................................65
8.8 Creation of Subsidiaries.................................................66
8.9 Compliance with ERISA....................................................66
8.10 Certificate of Incorporation and By-laws................................67
8.11 Prepayments of Indebtedness.............................................67
8.12 Accounting Practice; Fiscal Year........................................67
8.13 Limitation on Upstream Transfers........................................67
8.14 Transactions with Affiliates............................................67
8.15 Sale and Leaseback......................................................68
8.16 Stock Issuance..........................................................68
8.17 Subordinated Indenture..................................................68
8.18 Federal Reserve Regulations.............................................68
8.19 Change in Name; Nature of Business......................................68
8.20 Lease Obligations.......................................................69
9. DEFAULT...........................................................................69
9.1 Events of Default........................................................69
10. THE ADMINISTRATIVE AGENT.........................................................73
10.1 Appointment.............................................................73
10.2 Delegation of Duties....................................................73
10.3 Exculpatory Provisions..................................................73
10.4 Reliance by Administrative Agent........................................74
10.5 Notice of Default.......................................................74
10.6 Non-Reliance............................................................75
10.7 Indemnification.........................................................75
10.8 Administrative Agent in its Individual Capacity.........................76
10.9 Successor...............................................................76
10.10 Updating Exhibits and Schedules........................................77
10.11 The Lead Arranger and Agents...........................................77
11. MISCELLANEOUS....................................................................77
11.1 Amendments and Waivers..................................................77
11.2 Notices.................................................................79
11.3 No Waiver; Cumulative Remedies..........................................80
11.4 Survival of Representations and Warranties..............................80
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11.5 Payment of Expenses and Taxes...........................................81
11.6 Lending Offices.........................................................82
11.7 Successors and Assigns..................................................82
11.8 Counterparts............................................................83
11.9 Adjustments; Set-off....................................................84
11.10 No Third Party Beneficiary.............................................85
11.11 Indemnity..............................................................85
11.12 Governing Law..........................................................86
11.13 Headings...............................................................86
11.14 Severability...........................................................86
11.15 Integration............................................................87
11.16 Limitation of Liability................................................87
11.17 Consent to Jurisdiction................................................87
11.18 Service of Process.....................................................87
11.19 No Limitation on Service or Suit.......................................88
11.20 WAIVER OF TRIAL BY JURY................................................88
11.21 Confidentiality........................................................88
EXHIBITS
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Exhibit A List of Commitments
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Borrowing Request
Exhibit D Form of Letter of Credit Request
Exhibit E Form of Opinion of Counsel to the Borrower and Subsidiaries
Exhibit F Form of Opinion of FCC Counsel to the Borrower and Subsidiaries
Exhibit G Form of Compliance Certificate
Exhibit H Form of Borrower Security Agreement
Exhibit I Form of Subsidiary Guaranty
Exhibit J Form of Assignment and Assumption Agreement
Exhibit K Form of RC Supplement
SCHEDULES
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Schedule 1.1(L) List of Lending Offices
Schedule 4.1 List of Subsidiaries
Schedule 4.6 List of Litigation
Schedule 4.7 List of Conflicting Agreements
Schedule 4.8 List of Taxes
Schedule 4.11(b) FCC Matters
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SCHEDULES
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Schedule 4.14 List of Plans
Schedule 4.18 List of Environmental Plans
Schedule 8.1 List of Indebtedness
Schedule 8.2 List of Liens
Schedule 8.5(c) List of Investments
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June __, 1999,
by and among SALEM COMMUNICATIONS CORPORATION, a Delaware corporation (the
"Borrower"), THE BANK OF NEW YORK, as administrative agent for the Lenders
hereunder (in such capacity, the "Administrative Agent"), BANK OF AMERICA NT&SA,
as Documentation Agent (in such capacity, the "Documentation Agent"),
BANKBOSTON, N.A., FLEET BANK, N.A., and UNION BANK OF CALIFORNIA, N.A., as
Co-Agents (in such capacity, the "Co-Agents") and each Lender party hereto or
which becomes a "Lender" pursuant to the provisions of Section 11.7 (each a
"Lender" and, collectively, the "Lenders").
RECITALS
A. This Agreement amends and restates the Credit Agreement, dated
as of September 25, 1997, by and among Salem Communications Corporation, a
California corporation ("Salem California"), the lenders party thereto, Bank of
America NT&SA, as Documentation Agent, and The Bank of New York, as
Administrative Agent, as amended and modified by Amendment No. 1 and Consent No.
1, dated as of August 5, 1998, Amendment No. 2 and Consent No. 2, dated as of
January 22, 1999, Consent No. 3 ("Consent No. 3"), dated as of March 31, 1999,
and Amendment No. 3 and Consent No. 4, dated as of April 23, 1999 (as so
amended, the "Original Credit Agreement").
B. On March 31, 1999, Salem California merged into Salem Delaware
with Salem Delaware as the survivor. Pursuant to the terms and conditions of
Consent No. 3, Salem Delaware entered into the Assumption Agreement whereby
Salem Delaware, among other things, assumed all of the obligations of Salem
California under the Loan Documents.
C. For convenience, this Agreement is dated as of June __, 1999,
and references to certain matters relating to the period prior thereto have been
deleted.
1. DEFINITIONS
1.1 Defined Terms.
As used in this Agreement, terms defined in the preamble have
the meanings therein indicated, and the following terms have the following
meanings:
"ABR Loans": the Loans (or any portions thereof) at such time as they
(or such portions) are made or are being maintained at a rate of interest based
upon the Alternate Base Rate.
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"Accountants": Ernst & Young LLP, or such other firm of certified public
accountants of recognized national standing selected by the Borrower and
reasonably satisfactory to the Administrative Agent.
"Adjusted Operating Cash Flow": Operating Cash Flow less Excluded Cash
Flow.
"Affected Loan": as defined in Section 2.15.
"Affiliate": as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall mean the
power, direct or indirect, (i) to vote 5% or more of the securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause direction of the management and policies of such Person whether
by contract or otherwise.
"Agreement": this First Amended and Restated Credit Agreement, as the
same may be amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per annum equal
to the higher of (i) the BNY Rate in effect on such date or (ii) 1/2 of 1% plus
the Federal Funds Rate in effect on such date.
"Applicable Margin": (a) subject to paragraph (b) of this definition, at
all times during the applicable periods set forth below, (i) with respect to the
unpaid principal amount of the ABR Loans, the percentage set forth below under
the heading "Alternate Base Rate Margin" next to the applicable period and (ii)
with respect to the unpaid principal amount of the Eurodollar Loans, the
percentage set forth below under the heading "Eurodollar Rate Margin" next to
the applicable period:
Alternate Base Eurodollar
Period Rate Margin Rate Margin
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when the Total
Leverage Ratio
is equal to or
greater than
5.50:1.00 1.000% 2.250%
when the Total
Leverage Ratio is
equal to or
greater than
5.00:1.00 but less
than 5.50:1.00 0.625% 1.875%
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Alternate Base Eurodollar
Period Rate Margin Rate Margin
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when the Total
Leverage Ratio is
equal to or
greater than
4.50:1.00 but
less than
5.00:1.00 0.250% 1.500%
when the Total
Leverage Ratio is
equal to or
greater than
4.00:1.00 but
less than
4.50:1.00 0.000% 1.250%
when the Total
Leverage Ratio is
equal to or
greater than
3.50:1.00 but
less than
4.00:1.00 0.000% 1.000%
when the Total
Leverage Ratio is
less than
3.50:1.00 0.000% 0.875%
(b) Changes in the Applicable Margin resulting from a change
in the Total Leverage Ratio, as evidenced by a Compliance Certificate delivered
to the Administrative Agent pursuant to Section 7.1(d) or a Borrowing Request or
Letter of Credit Request delivered to the Administrative Agent pursuant to
Section 5.2(c) evidencing such a change, shall become effective upon (i) in the
case of the delivery of a Compliance Certificate, the first Business Day
following the delivery of (x) such Compliance Certificate and (y) the applicable
financial statements required to be delivered pursuant to Section 7.1(a) or (c),
as the case may be, and (ii) in the case of the delivery of a Borrowing Request
or Letter of Credit Request, the Borrowing Date applicable thereto. If the
Borrower shall fail to deliver a Compliance Certificate within 60 days after the
end of any of the first three fiscal quarters, or within 120 days after the
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end of the last fiscal quarter, of each fiscal year (each a "certificate
delivery date"), for purposes of calculating the Applicable Margin, the Total
Leverage Ratio from and including such certificate delivery date to the date of
delivery by the Borrower to the Administrative Agent of such Compliance
Certificate shall be conclusively presumed to be greater than 5.50:1.00.
Notwithstanding anything to the contrary contained in this definition, during
the period commencing on the Restatement Effective Date and ending on the
earlier of (i) the delivery of the fourth Compliance Certificate after the
Restatement Effective Date and (ii) the date upon which the fourth Compliance
Certificate after the Restatement Effective Date should have been delivered
pursuant to 7.1(d), the Total Leverage Ratio (solely for purposes of this
definition) shall not be less than 3.50:1.00.
"Assignment": as defined in Section 11.7(b).
"Assignment and Assumption Agreement": an agreement substantially in the
form of Exhibit J.
"Assignment Fee": as defined in Section 11.7(b).
"Assumption Agreement": the Assumption Agreement, dated as of March 31,
1999, made by Salem Delaware to the Administrative Agent.
"Authorized Signatory": the chief executive officer, the chief financial
officer, the chief operating officer, the president, a general partner or any
other duly authorized officer (acceptable to the Administrative Agent) of a Loan
Party.
"BNY": The Bank of New York.
"BNY Rate": a rate of interest per annum equal to the rate of interest
publicly announced in New York City by BNY from time to time as its prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.
"Borrower Security Agreement": the First Amended and Restated Borrower
Security Agreement, dated as of the date hereof, between the Borrower and the
Administrative Agent, substantially in the form attached hereto as Exhibit H, as
the same may be amended, supplemented or otherwise modified from time to time.
"Borrowing Date": (i) any Business Day specified in a Borrowing Request
as a date on which the Borrower requests the Lenders to make Loans or (ii) any
Business Day specified in a Letter of Credit Request as a date on which the
Borrower requests the Issuing Bank to issue a Letter of Credit.
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"Borrowing Request": a Borrowing Request substantially in the form of
Exhibit C.
"Broadcasting Station": all related licenses, franchises and permits
issued under federal, state or local laws from time to time which authorize a
Person to receive or distribute, or both, over the airwaves, audio and visual,
radio or microwave signals within a geographic area for the purpose of
broadcasting radio programming, together with all Property owned or used in
connection with the programming provided pursuant to, and all interest of such
Person to receive revenues from any other Person which derives revenues from or
pursuant to, said licenses, franchises and permits. The term "Broadcasting
Station" shall also include a corporation incorporated in the United States
which shall own one or more Broadcasting Stations.
"Business Day": (i) for all purposes other than as set forth in clause
(ii) below, any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law or other
governmental action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) above
and which is also a day on which dealings in foreign currency and exchange
between banks in the interbank eurodollar market may be carried on as determined
by the Administrative Agent.
"CERCLA": the Comprehensive Environmental Response, Compensation and
Liability Act, as set forth at 42 U.S.C. Section 9601, et seq. as the same may
be amended from time to time, and the rules and regulations issued thereunder,
as from time to time in effect.
"Change of Control": any of the following: (i) the Permitted Holders
fail to own (A) at least 51% of the total outstanding Voting Stock of the
Borrower or (B) at least 35% of the economic interest of the Borrower, or (ii) a
"Change of Control" (under and as defined in the Subordinated Indenture) occurs.
"Code": the Internal Revenue Code of 1986, as the same may be amended
from time to time, or any successor thereto, and the rules and regulations
issued thereunder, as from time to time in effect.
"Collateral": collectively, the Collateral under and as defined in the
Collateral Documents.
"Collateral Documents": collectively, the Borrower Security Agreement,
the Subsidiary Guaranty and the mortgages and deeds of trust delivered pursuant
to Section 7.12.
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"Commitment Fee" and "Commitment Fees": as defined in Section 3.1(a).
"Common Equity Issuance": as defined in Section 5.1(g).
"Common Ground Collateral Release": as defined in Section 11.1.
"Common Ground Reorganization": collectively, (i) the transfer of
certain of the assets of Common Ground Broadcasting, Inc. and ▇▇▇▇▇
Broadcasting, Inc. to the Borrower or one or more wholly-owned Subsidiaries, and
(ii) the merger of ▇▇▇▇▇ Broadcasting, Inc. with and into the Borrower, with the
Borrower as the survivor.
"Commonly Controlled Entity": any Subsidiary or any entity, whether or
not incorporated, which is under common control with the Borrower within the
meaning of Section 414(b) or 414(c) of the Code.
"Communications Act": the Communications Act of 1934, as the same may be
amended from time to time, and the rules and regulations issued thereunder, as
from time to time in effect.
"Compliance Certificate": a certificate substantially in the form of
Exhibit G.
"Consent No. 3": as defined in Recital A.
"Consolidated": the Borrower and its Subsidiaries which are consolidated
for financial reporting purposes.
"Consolidated Adjusted Operating Cash Flow": Adjusted Operating Cash
Flow of the Borrower and its Subsidiaries on a Consolidated basis.
"Consolidated Annual Adjusted Operating Cash Flow": at any time,
Consolidated Adjusted Operating Cash Flow for the immediately preceding four
fiscal quarters for which financial statements have been delivered pursuant to
Section 7.1(a) or (c), or, in the event that the date of determination is a
fiscal quarter ending date, the fiscal quarter then ended and the immediately
preceding three fiscal quarters.
"Consolidated Annual Operating Cash Flow": at any time, Consolidated
Operating Cash Flow for the immediately preceding four fiscal quarters for which
financial statements have been delivered pursuant to Section 7.1(a) or (c), or,
in the event that the date of determination is a fiscal quarter ending date, the
fiscal quarter then ended and the immediately preceding three fiscal quarters.
"Consolidated Operating Cash Flow": Operating Cash Flow of the Borrower
and its Subsidiaries on a Consolidated basis.
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"Consolidating": the Borrower and each of its Subsidiaries taken
separately.
"Contingent Obligation": as to any Person, any obligation of such Person
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds for the purchase or
payment of any such primary obligation or to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the beneficiary of any such
primary obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the beneficiary
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include the indorsement of
instruments for deposit or collection in the ordinary course of business. The
term Contingent Obligation shall also include the liability of a general partner
in respect of the Indebtedness of a partnership in which it is a general
partner, excluding Indebtedness which is non-recourse to such general partner.
The amount of any Contingent Obligation of a Person shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.
"Control Person": as defined in Section 2.14.
"Copyright Act": Title 17 of the United States Code, as amended, and the
rules and regulations issued thereunder, as from time to time in effect.
"Credit Exposure" with respect to any Lender at any time, its RC
Commitment or, if no RC Commitment is in effect, the sum of its outstanding RC
Loans and Letter of Credit Exposure, at such time.
"Credit Parties": the Administrative Agent, the Issuing Bank and the
Lenders.
"Debt Service": the sum of Interest Expense and scheduled principal
amortization (including scheduled mandatory reductions of revolving credit and
similar commitments) of Total Debt, whether or not actually paid, for, as
applicable, the immediately preceding four fiscal quarters for which financial
statements have been delivered pursuant to Section 7.1(a) or (c), or, in the
event that the date of determination is a fiscal quarter ending date, the fiscal
quarter then ended and the immediately preceding three fiscal quarters.
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"Default": any of the events specified in Section 9, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Dollars" and "$": lawful currency of the United States of America.
"Environmental Laws": any and all federal, state and local laws relating
to the environment, the use, storage, transporting, manufacturing, handling,
discharge, disposal or recycling of hazardous substances, materials or
pollutants or industrial hygiene and including, without limitation, (i) CERCLA;
(ii) the Resource Conservation and Recovery Act of 1976, as amended, 42 USCA
Section 6901 et seq.; (iii) the Toxic Substance Control Act, as amended, 15 USCA
Section 2601 et. seq.; (iv) the Water Pollution Control Act, as amended, 33 USCA
Section 1251 et. seq.; (v) the Clean Air Act, as amended, 42 USCA Section 7401
et seq.; (vi) the Hazardous Material Transportation Authorization Act of 1994,
as amended, 49 USCA Section 5101 et seq. and (viii) all rules, regulations
judgments, decrees, injunctions and restrictions thereunder and any analogous
state law, in each case as from time to time in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations issued thereunder, as from time
to time in effect.
"Eurodollar Loan": a portion of the Loans selected by the Borrower to
bear interest during an Interest Period selected by the Borrower at a rate per
annum based upon a Eurodollar Rate determined with reference to such Interest
Period, all pursuant to and in accordance with Sections 2.3 and 2.8.
"Eurodollar Rate": with respect to any Interest Period, the rate per
annum, as determined by the Administrative Agent, obtained by dividing (and then
rounding to the nearest 1/16 of 1%, or, if there is no nearest 1/16 of 1%, the
next higher 1/16 of 1%):
(a) the rate quoted by the Administrative Agent to major
banks in the interbank eurodollar market as the rate at which the Administrative
Agent is offering Dollar deposits in an amount approximately equal to BNY's pro
rata share of the given portion of the Loans selected by the Borrower to bear
interest during such Interest Period based upon a rate of interest determined
under this definition, and having a term to maturity corresponding to such
Interest Period, as quoted at approximately 10:00 A.M. two Business Days prior
to the date upon which such Interest Period is to commence, by
(b) a number equal to 1.00 minus the aggregate of the then
stated maximum rates during such Interest Period of all reserve requirements
(including, without limitation, marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors of the
Federal Reserve System and
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any other banking authority to which BNY and other major United States banks or
money center banks are subject, in respect of eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of the Board of
Governors of the Federal Reserve System). Such reserve requirements shall
include, without limitation, those imposed under such Regulation D. Eurodollar
Loans shall be deemed to constitute Eurocurrency liabilities and as such shall
be deemed to be subject to such reserve requirements without benefit of credits
for proration, exceptions or offsets which may be available from time to time to
any Lender under such Regulation D. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in any such reserve
requirement.
"Event of Default": any of the events specified in Section 9, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Excess Cash Flow": at any time, in respect of any period, Consolidated
Operating Cash Flow for such period (before any adjustments to reflect
acquisitions, sales and exchanges of Property during such period) less the sum
of, without duplication, (i) Fixed Charges and (ii) voluntary principal
prepayments made pursuant to Section 2.5(a), provided that the RC Commitments
are permanently reduced in an aggregate amount equal to such prepayments made
under Section 2.5(a).
"Exchange Act": the Securities Exchange Act of 1934, as amended.
"Excluded Cash Flow": at any time, for any period, Operating Cash Flow
for such period allocable to all Excluded Properties at such time.
"Excluded Property": at any time, any Broadcasting Station, designated
in writing by the Borrower to the Administrative Agent and the Lenders as an
Excluded Property, that was acquired by the Borrower within the immediately
preceding 18 month period and in respect of which the Borrower changed the
format from that in effect at the time such Broadcasting Station was acquired by
the Borrower.
"Excluded Taxes": with respect to any Credit Party or any other
recipient of any payment to be made by or on account of any obligation of any
Loan Party under any Loan Document, (a) income or franchise taxes imposed on (or
measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Credit Party, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which such Loan Party is located and (c) in the case of a
Foreign Lender, any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new
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lending office) or is attributable to such Foreign Lender's failure to comply
with Section 2.13(e), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from such Loan Party with
respect to such withholding tax pursuant to Section 2.13(a).
"FCC": the Federal Communications Commission, or any Governmental
Authority succeeding to the functions thereof.
"Federal Funds Rate": for any day, the rate per annum (rounded to the
nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, then to the next
higher 1/16 of 1%) equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day, provided that (i) if
the day for which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (ii) if such rate is not so published for any day, the Federal Funds Rate
for such day shall be the average rate charged to the Administrative Agent on
such day on such transactions as determined by the Administrative Agent.
"Fixed Charges": the sum, without duplication, of (a) Debt Service, (b)
cash income taxes paid and (c) capital expenditures (excluding capital
expenditures made with insurance proceeds and capital expenditures associated
with an acquisition made within the 12 month period immediately following such
acquisition), in each case of the Borrower and its Subsidiaries on a
Consolidated basis, determined in accordance with GAAP, for, as applicable, the
immediately preceding four fiscal quarters for which financial statements have
been delivered pursuant to Section 7.1(a) or (c), or, in the event that the date
of determination is a fiscal quarter ending date, the fiscal quarter then ended
and the immediately preceding three fiscal quarters.
"Foreign Lender": any Lender that is organized under the laws of a
jurisdiction other than that in which the applicable Loan Party is located. For
purposes of this definition, the United States of America, each State thereof
and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"GAAP": generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statement by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination, consistently applied. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set
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17
forth in this Agreement, the Administrative Agent, the Lenders and the Borrower
shall negotiate in good faith to amend such ratio or requirement to reflect such
change in GAAP (subject to the approval of the Required Lenders), provided that,
until so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent, and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
"Governmental Authority": the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government
"Hazardous Discharge": as defined in Section 11.11(b).
"Highest Lawful Rate": as to any Lender, the maximum rate of interest,
if any, that at any time or from time to time may be contracted for, taken,
charged or received by such Lender on the Notes held thereby, or which may be
owing to such Lender pursuant to this Agreement and the other Loan Documents
under the laws applicable to such Lender and this transaction.
"Indebtedness": as to any Person, at a particular time, all items which
constitute, without duplication, (i) indebtedness for borrowed money or the
deferred purchase price of Property (other than trade payables incurred in the
ordinary course of business), (ii) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (iii) obligations with respect to any
conditional sale agreement or title retention agreement, (iv) indebtedness
arising under acceptance facilities and the amount available to be drawn under
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder to the extent such Person shall not
have reimbursed the issuer in respect of the issuer's payment of such drafts,
(v) all liabilities secured by any Lien on any Property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof (other than Liens permitted under Sections 8.2(i) through (iv)
and carriers', warehousemen's, mechanics', repairmen's or other like
non-consensual Liens arising in the ordinary course of business), (vi)
obligations for principal payments under leases which have been, or under GAAP
are required to be, capitalized and (vii) all Contingent Obligations.
"Indemnified Party": shall have the meaning set forth in Section
11.11(a).
"Indemnified Taxes": Taxes other than Excluded Taxes.
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18
"Interest Expense": the sum of all (i) interest (adjusted to give effect
to all Interest Rate Protection Arrangements and fees and expenses paid in
connection with same, all as determined in accordance with GAAP) on Total Debt
and (ii) commitment, letter of credit and similar fees, in each case of the
Borrower and its Subsidiaries on a Consolidated basis, determined in accordance
with GAAP, for, as applicable, the immediately preceding four fiscal quarters
for which financial statements have been delivered pursuant to Section 7.1(a) or
(c), or, in the event that the date of determination is a fiscal quarter ending
date, the fiscal quarter then ended and the immediately preceding three fiscal
quarters.
"Interest Payment Date": (i) as to any ABR Loan, the last day of each
March, June, September and December commencing on the first of such days to
occur after such ABR Loan is made, (ii) as to any Eurodollar Loan in respect of
which the Borrower has selected an Interest Period of one, two or three months,
the last day of such Interest Period and (iii) as to any Eurodollar Loan in
respect of which the Borrower has selected an Interest Period of six months, the
last day of such Interest Period and the corresponding day of the month which is
three months after the date of the commencement of such Interest Period, or, if
such day is not a Business Day or does not exist, on the immediately preceding
Business Day.
"Interest Period": the period commencing on any Business Day selected by
the Borrower in accordance with Section 2.3 or 2.8 and ending one, two, three or
six months thereafter, as selected by the Borrower in accordance with such
Section, subject to the following:
(a) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall be extended to the
immediately succeeding Business Day unless the result of such extension would be
to carry the end of such Interest Period into another calendar month, in which
event such Interest Period shall end on the Business Day immediately preceding
such day; and
(b) if any Interest Period shall begin on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period),
such Interest Period shall end on the last Business Day of a calendar month.
"Interest Rate Protection Arrangement": any interest rate swap, cap or
collar arrangement or any other derivative product customarily offered by banks
to their customers in order to manage the exposure of such customers to interest
rate fluctuations.
"Investments": as defined in Section 8.5.
"Issuing Bank": BNY.
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19
"Lead Arranger": BNY Capital Markets, Inc., as Lead Arranger and Book
Manager.
"Lending Office": in respect of any Lender, initially, the office or
offices of such Lender designated as such in Schedule 1.1(L) hereto; thereafter,
such other office or offices of such Lender, if any, which shall be making or
maintaining Loans.
"Letter of Credit": as defined in Section 2.18.
"Letter of Credit Commitment": the commitment of the Issuing Bank to
issue Letters of Credit in accordance with the terms hereof in an aggregate
outstanding face amount not exceeding $15,000,000 (or, if less, the RC
Commitments) at any time, as the same may be reduced pursuant to Section 2.4.
"Letter of Credit Exposure": at any time, (a) in respect of all Lenders,
the sum, without duplication, of (i) the maximum aggregate amount which may be
drawn under all unexpired Letters of Credit at such time (whether the conditions
for drawing thereunder have or may be satisfied), (ii) the aggregate amount, at
such time, of all unpaid drafts (which have not been dishonored) drawn under all
Letters of Credit, and (iii) the aggregate unpaid principal amount of the
Reimbursement Obligations at such time, and (b) in respect of any Lender, an
amount equal to such Lender's RC Commitment Percentage at such time multiplied
by the amount determined under clause (a) of this definition.
"Letter of Credit Fee": as defined in Section 3.1(c).
"Letter of Credit Participation": with respect to each Lender, its
obligations to the Issuing Bank under Section 2.19.
"Letter of Credit Request": a request in the form of Exhibit D.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or other security agreement
or security interest of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement and any
financing lease having substantially the same economic effect as any of the
foregoing.
"Leveraged Acquisition": as defined in Section 8.3(b).
"Loans": the RC Loans.
"Loan Documents": collectively, this Agreement, the Notes, the
Reimbursement Agreements and the Collateral Documents.
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20
"Loan Party": the Borrower, each Subsidiary Guarantor and each other
party (other than the Administrative Agent, the Issuing Bank and the Lenders)
that is a signatory to a Loan Document.
"Margin Stock": any "margin stock", as said term is defined in
Regulation U of the Board of Governors of the Federal Reserve System, as the
same may be amended or supplemented from time to time.
"Material Adverse Change": a material adverse change in (i) the
operations, business, prospects, Property or condition (financial or otherwise)
of (a) the Borrower or (b) the Borrower and its Subsidiaries on a Consolidated
basis, (ii) the ability of the Borrower or any other Loan Party to perform its
obligations under the Loan Documents to which it is a party or (iii) the ability
of the Administrative Agent or any of the Lenders to enforce any of the Loan
Documents.
"Material Adverse Effect": a material adverse effect on (i) the
operations, business, prospects, Property or condition (financial or otherwise)
of (a) the Borrower or (b) the Borrower and its Subsidiaries on a Consolidated
basis, (ii) the ability of the Borrower or any other Loan Party to perform its
obligations under the Loan Documents to which it is a party or (iii) the ability
of the Administrative Agent or any of the Lenders to enforce any of the Loan
Documents.
"Maturity Date": June 30, 2006.
"Media Asset": any Broadcasting Station or any other existing business
of the Borrower or any Subsidiary as of the Restatement Effective Date
(including, without limitation, magazine, Internet and software businesses) and
any assets ancillary to any of the foregoing.
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Equity Proceeds": as defined in Section 2.4(b)(v).
"Notes": the RC Notes.
"Operating Cash Flow": at any time, with respect to any Person, for any
period: (i) revenues (exclusive of reciprocal and barter revenues) of such
Person, determined in accordance with GAAP, for such period, less (ii) expenses
(exclusive of depreciation, amortization, interest, income tax, employee
compensation payable solely in stock of the Borrower, and reciprocal and barter
expenses, in each case to the extent included therein), plus (iii) non-recurring
expense items and other non-cash expense items of such
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21
Person for such period, in each case mutually agreed upon between the Borrower
and the Administrative Agent, to the extent deducted in accordance with clause
(ii) above, less (iv) the amount of any cash payments related to non-cash
expense items added pursuant to clause (iii) above. Operating Cash Flow shall be
adjusted on a consistent basis to reflect the acquisition, sale, exchange and
disposition of Property during such period as if such acquisition, sale,
exchange or disposition of Property had occurred at the beginning of such
period, provided that pro-forma adjustments related to certain operating
expenses of such stations being acquired (mutually agreed upon by the Borrower
and the Administrative Agent) shall be included in the calculation of Operating
Cash Flow. Operating Cash Flow shall exclude all gains and losses from the sale
or disposition of Property and all extraordinary gains and losses.
"Original Credit Agreement": as defined in Recital A.
"Original Effective Date": September 25, 1997.
"Other Taxes": any and all current or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, the Loan Documents.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
functions thereof.
"Permitted Holders": as of any date of determination (i) any of ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ III; (ii) family members or the relatives of
the Persons described in clause (i); (iii) any trusts, family limited
partnerships or other similar entities created for the benefit of the Persons
described in clauses (i), (ii) or (iv) or any such entity for the benefit of
such entity; or (iv) in the event of the incompetence or death of any of the
Persons described in clauses (i) and (ii), such Person's estate, executor,
administrator, committee or other personal representative or beneficiaries, in
each case who at any particular date shall beneficially own or have the right to
acquire, directly or indirectly, Voting Stock of the Borrower.
"Permitted Liens": Liens permitted to exist pursuant to Section 8.2.
"Person": an individual, a partnership, a corporation, a business trust,
a joint stock company, a trust, an unincorporated association, a joint venture,
a limited liability company, a Governmental Authority or any other entity of
whatever nature.
"Plan": any pension plan which is covered by Title IV of ERISA and which
is maintained by or to which contributions are made by the Borrower or a
Commonly
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22
Controlled Entity or in respect of which the Borrower or a Commonly Controlled
Entity has or may have any liability.
"Pro-Forma Debt Service": the sum of Pro-Forma Interest Expense and the
scheduled payments of principal (including scheduled mandatory reductions of
revolving credit and similar commitments) in respect of Total Debt required to
be made during the four fiscal quarters of the Borrower immediately succeeding
any determination thereof. For purposes of calculating Pro-Forma Debt Service,
the principal amount outstanding under any revolving or line of credit facility
on the date of any calculation of Pro-Forma Debt Service shall be assumed to be
outstanding during the entire applicable four fiscal quarter period, subject to
any mandatory scheduled payments of principal required to be made during such
period.
"Pro-Forma Interest Expense": the sum of (i) all interest (adjusted to
give effect to all Interest Rate Protection Arrangements and fees and expenses
paid in connection with the same, all as determined in accordance with GAAP) in
respect of Total Debt and (ii) commitment, letter of credit and similar fees, in
each case of the Borrower and its Subsidiaries on a Consolidated basis,
determined in accordance with GAAP, for the four fiscal quarters of the Borrower
immediately succeeding any determination thereof. Where any item of interest
varies or depends upon a variable rate of interest (or other rate of interest
which is not fixed for such entire four fiscal quarters), such rate, for
purposes of calculating Pro-Forma Interest Expense, shall be assumed to equal
the interest rate in effect on the date of such calculation. Also, for purposes
of calculating Pro-Forma Interest Expense, the principal amount outstanding
under any revolving or line of credit facility on the date of any calculation of
Pro-Forma Debt Service shall be assumed to be outstanding during the entire
applicable four fiscal quarter period, subject to any mandatory scheduled
payments of principal required to be made during such period.
"Property": all types of real, personal, tangible, intangible or mixed
property.
"RC Commitment": as to any Lender, the amount set forth next to the name
of such Lender on Exhibit A under the heading "RC Commitment", as such RC
Commitment may be reduced from time to time pursuant to Section 2.4.
"RC Commitments": the RC Commitments of all Lenders.
"RC Commitment Percentage": as to any Lender, the percentage set forth
opposite the name of such Lender on Exhibit A under the heading "RC Commitment
Percentage".
"RC Commitment Period": the period from the Original Effective Date
until the RC Commitment Termination Date.
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23
"RC Commitment Termination Date": the earlier of the Business Day
immediately preceding the Maturity Date or such other date upon which the RC
Commitments shall have been terminated in accordance with Section 2.4 or 9.1.
"RC Loan" and "RC Loans": as defined in Section 2.1.
"RC Note" and "RC Notes": as defined in Section 2.2.
"RC Supplement": a supplement substantially in the form of Exhibit K.
"Reimbursement Agreement": as defined in Section 2.18(b).
"Reimbursement Obligations": all obligations and liabilities of the
Borrower due and to become due (a) under the Reimbursement Agreements and (b)
hereunder in respect of Letters of Credit.
"Reinvested Proceeds": net cash proceeds from the sale, exchange or
other disposition of all or substantially all of a Media Asset, after giving
effect to the payment of cash taxes payable in connection with the same, which
cash proceeds are used to acquire one or more additional Media Assets through a
merger or acquisition in accordance with Section 8.3 during the Reinvestment
Period.
"Reinvestment Period": the period which is 360 days from the date that
proceeds from the sale, exchange or other disposition of all or substantially
all of a Media Asset are received by the Borrower.
"Remaining Interest Period": (i) in the event that the Borrower shall
fail for any reason to borrow or convert Loans after it shall have notified the
Administrative Agent of its intent to do so in which it shall have requested a
Eurodollar Loan pursuant to Section 2.3 or 2.8, a period equal to the Interest
Period that the Borrower elected in respect of such Eurodollar Loan; (ii) in the
event that a Eurodollar Loan shall terminate for any reason prior to the last
day of the Interest Period applicable thereto, a period equal to the period from
and including the date of such termination to but excluding the last day of such
Interest Period; and (iii) in the event that the Borrower shall prepay or repay
all or any part of the principal amount of a Eurodollar Loan prior to the last
day of the Interest Period applicable thereto, a period equal to the period from
and including the date of such prepayment or repayment to but excluding the last
day of such Interest Period.
"Reportable Event": any event described in Section 4043(b) of ERISA,
other than an event (excluding an event described in Section 4043(b)(1) relating
to tax disqualification) with respect to which the 30-day notice requirement has
been waived.
"Required Lenders": at any date of determination, Lenders having Credit
Exposures equal to or greater than 51% of the Total Credit Exposure.
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24
"Restatement Effective Date": June __, 1999.
"Restricted Payment": as defined in Section 8.4.
"Salem California": as defined in Recital A.
"Salem Delaware": the Borrower and the survivor of the merger between
itself and Salem California.
"S & P": Standard and Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"Single Employer Plan": any Plan which is not a Multiemployer Plan.
"Special Counsel": ▇▇▇▇▇ ▇▇▇▇ LLP, special counsel to the Administrative
Agent.
"Stock": any and all shares, interests, participations, options,
warrants or other equivalents (however designated) of corporate stock,
including, without limitation, phantom stock.
"Subordinated Indenture": the Indenture, dated as of September 25, 1997,
between the Borrower and The Bank of New York, as trustee, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
Section 8.19.
"Subordinated Indenture Notes": the 9.5% Senior Subordinated Notes, due
2007, issued in the aggregate principal amount of $150,000,000 pursuant to the
Subordinated Indenture, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 8.17.
"Subordinated Indenture Subsidiary Guaranty": the subordinated guaranty
or guaranties executed and delivered by one or more of the Subsidiaries in
connection with the Subordinated Indenture, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section
8.17.
"Subsidiary": any corporation, association, partnership, joint venture
or other business entity of which the Borrower and/or any Subsidiary of the
Borrower, directly or indirectly, either (i) in respect of a corporation, owns
or controls more than 50% of the outstanding Stock having ordinary voting power
to elect a majority of the board of directors or similar managing body,
irrespective of whether or not a class or classes shall or might have voting
power by reason of the happening of any contingency, or (ii) in respect of an
association, partnership, joint venture or other business entity, is entitled to
share in more than 50% of the profits and losses, however determined.
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25
"Subsidiary Guarantor": each Subsidiary.
"Subsidiary Guaranty": the First Amended and Restated Subsidiary
Guaranty and Security Agreement, dated as of the date hereof, made by the
Subsidiaries to the Administrative Agent, substantially in the form attached
hereto as Exhibit I, as the same may be amended, supplemented or otherwise
modified from time to time.
"Taxes": any and all current or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Total Adjusted Debt": Total Debt less the lesser of (i) 50% of the
lesser of, with respect to each Excluded Property (x) the purchase price of such
Excluded Property and (y) the independent appraisal value (if required under
clause (i) of the first paragraph of Section 8.3(b)) of such Excluded Property
and (ii) $30,000,000.
"Total Credit Exposure": at any time, the sum of the Credit Exposures of
all Lenders at such time.
"Total Debt": the aggregate Indebtedness of the Borrower and its
Subsidiaries on a Consolidated basis, determined in accordance with GAAP.
"Total Facility Usage": as of any date, a fraction (expressed by a
decimal) the numerator of which is the aggregate outstanding principal amount of
RC Loans plus the Letter of Credit Exposure of all Lenders, and the denominator
of which is the aggregate amount of RC Commitments.
"Total Leverage Ratio": the ratio of (i) Total Adjusted Debt less cash
and cash equivalents in excess of $5,000,000 to (ii) Consolidated Annual
Adjusted Operating Cash Flow.
"Upstream Transfers": as defined in Section 8.13.
"Voting Stock": Stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time Stock of any other class
or classes shall have or might have voting power by reason or the happening of
any contingency).
1.2 Principles of Construction.
(a) All terms defined in this Agreement shall have the
meanings given such terms herein when used in the Loan Documents or any
certificate or other document made or delivered pursuant hereto or thereto,
unless otherwise defined therein.
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26
(b) Unless otherwise specified herein, as used in the Loan
Documents and in any certificate, opinion or other document made or delivered
pursuant hereto or thereto, all accounting terms used herein shall be
interpreted, and all accounting determinations hereunder shall be made, in
accordance with GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder"
and similar words when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
paragraph, schedule and exhibit references contained herein shall refer to
Sections or paragraphs hereof or schedules or exhibits hereto unless otherwise
expressly provided herein.
(d) The word "or" shall not be exclusive; "may not" is
prohibitive and not permissive; and the singular includes the plural.
(e) Unless otherwise specifically set forth herein, all
references to time shall refer to New York City time.
2. AMOUNT AND TERMS OF LOANS.
2.1 Loans.
Subject to the terms and conditions hereof, each Lender having
an RC Commitment agrees to make loans (each an "RC Loan" and, collectively with
the other RC Loans of such Lender and/or with the RC Loans of each other Lender,
the "RC Loans") to the Borrower from time to time during the RC Commitment
Period. At all times during the RC Commitment Period, the Borrower may borrow,
prepay and reborrow RC Loans in accordance with the provisions hereof, provided
that the aggregate unpaid principal amount of all RC Loans and the Letter of
Credit Exposure of all Lenders at any one time shall not exceed the RC
Commitments then in effect, and provided further that the aggregate unpaid
principal amount of each Lender's RC Loans and its Letter of Credit Exposure at
any one time shall not exceed such Lender's RC Commitment. The principal amount
of each Lender's RC Loan made on a Borrowing Date shall be an amount equal to
its RC Commitment Percentage of all RC Loans made on such date. Subject to the
provisions of Sections 2.3, 2.8 and 2.15, RC Loans may be (i) ABR Loans, (ii)
Eurodollar Loans or (iii) any combination thereof.
2.2 Notes.
The RC Loans of each Lender shall be evidenced by a promissory
note in the form of Exhibit B (each as indorsed or modified from time to time,
including all replacements thereof and substitutions therefor, an "RC Note" and,
collectively with the RC Note of each other Lender, the "RC Notes"), payable to
the order of such Lender, in the maximum stated principal amount equal to such
Lender's RC Commitment. Each RC
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27
Note shall (i) be dated the Restatement Effective Date, (ii) be stated to mature
on the Maturity Date and be payable in the amounts and at the times required by
Section 2.5 and (iii) bear interest on the unpaid principal amount thereof at
the applicable interest rate or rates per annum determined as provided in
Section 2.6, payable as specified in Section 2.6. Each Lender is hereby
irrevocably authorized by the Borrower to enter on the schedule attached to its
RC Note and/or in its internal books and records the amount of each RC Loan made
by it thereunder, each payment thereon, and the other information provided for
on such schedule, and such schedule and books and records shall be presumptively
correct absent manifest error as to the amount of such Lender's RC Loans and as
to the amount of principal and interest paid by the Borrower in respect of such
RC Loans and as to the other information set forth on such schedule or books and
records relating to the RC Loans, provided, however, that the failure to make
any such entry (or any error therein) with respect to any RC Loan shall not
limit or otherwise affect the obligations of the Borrower hereunder or under
such RC Note. Each Lender may attach one or more continuations to such schedule
as and when required. In all events, the principal amount owing by the Borrower
to each Lender in respect of such Lender's RC Note shall be the aggregate amount
of all RC Loans made by such Lender thereunder less all payments of principal
thereon made by the Borrower.
2.3 Procedure for Borrowing Loans.
(a) The Borrower may borrow RC Loans on any Business Day
occurring during the RC Commitment Period, provided that, with respect to any
requested borrowing, the Borrower shall notify the Administrative Agent (by
telephone or telecopy) no later than 1:00 P.M., three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, and no later than
1:00 P.M., one Business Day prior to the requested Borrowing Date, in the case
of ABR Loans, specifying (i) the aggregate amounts to be borrowed under the RC
Commitments, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be a Eurodollar Loan, an ABR Loan, or a combination thereof, and (iv) if the
borrowing is to be a Eurodollar Loan, the length of the initial Interest Period
for such Eurodollar Loan. Each such notice shall be irrevocable and confirmed
immediately by delivery to the Administrative Agent of a Borrowing Request. Each
borrowing of RC Loans, consisting of ABR Loans shall be in an aggregate
principal amount equal to $1,000,000 or such amount plus an integral multiple of
$100,000 in excess thereof or, if less, the unused amount of the RC Commitments.
Each borrowing of RC Loans, as the case may be, consisting of Eurodollar Loans
shall be in a minimum aggregate principal amount equal to $2,000,000 or an
integral multiple of $250,000 in excess thereof. Upon receipt of each notice of
borrowing from the Borrower, the Administrative Agent shall promptly notify each
Lender (by telephone or otherwise, such notice to be confirmed by telecopy or
other writing) of the requested borrowing. Subject to its receipt of the notice
referred to in the preceding sentence and to the other terms and conditions of
this Agreement, each Lender will make the amount of its
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28
applicable RC Commitment Percentage, of each borrowing available to the
Administrative Agent for the account of the Borrower at the office of the
Administrative Agent set forth in Section 11.2 not later than 12:00 Noon, on the
Borrowing Date requested by the Borrower, in funds immediately available to the
Administrative Agent at such office. The amounts so made available to the
Administrative Agent on a Borrowing Date will then, subject to the satisfaction
of the terms and conditions of this Agreement as determined by the
Administrative Agent, be made available on such date to the Borrower by the
Administrative Agent, in immediately available funds, at the office of the
Administrative Agent specified in Section 11.2 by crediting the account of the
Borrower on the books of such office with the aggregate of said amounts received
by the Administrative Agent.
(b) Unless the Administrative Agent shall have received
prior notice from a Lender (by telephone or otherwise, such notice to be
confirmed by telecopy or other writing) that such Lender will not make available
to the Administrative Agent such Lender's pro rata share of the Loans requested
by the Borrower, the Administrative Agent may assume that such Lender has made
such share available to the Administrative Agent on such Borrowing Date in
accordance with this Section 2.3 provided that such Lender received notice of
the proposed borrowing from the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such Borrowing Date a corresponding amount. If and to the extent such Lender
shall not have so made such pro rata share available to the Administrative
Agent, such Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount (to the extent not
previously paid by the other), together with interest thereon for each day from
the date such amount is made available to the Borrower until the date such
amount is paid to the Administrative Agent, at a rate per annum equal to, in the
case of the Borrower, the applicable interest rate set forth in Section 2.6,
and, in the case of such Lender, the Federal Funds Rate in effect on such date
(as determined by the Administrative Agent). Such payment by the Borrower,
however, shall be without prejudice to its rights against such Lender. If such
Lender shall pay to the Administrative Agent such corresponding amount, such
amount so paid shall constitute such Lender's Loan as part of such Loans for
purposes of this Agreement, which Loan shall be deemed to have been made by such
Lender on the Borrowing Date applicable to such Loans.
2.4 Reduction and Increase of Commitments.
(a) Voluntary Reductions. The Borrower shall have the right,
upon at least three Business Days' prior irrevocable written notice to the
Administrative Agent, to reduce permanently the RC Commitments or the Letter of
Credit Commitment, in whole at any time, or in part from time to time, without
premium or penalty, to an amount not less than (i) in the case of the RC
Commitments, the sum of the aggregate outstanding principal balance of the RC
Loans, after giving effect to any contemporaneous
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prepayment thereof, and the Letter of Credit Exposure of all Lenders, provided
that each partial reduction of such RC Commitments shall be in a minimum amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof or, if
less, the amount of the RC Commitments then in effect, and (ii) in the case of
the Letter of Credit Commitment, the Letter of Credit Exposure of all Lenders,
provided that each partial reduction of the Letter of Credit Commitment shall be
in a minimum amount of $1,000,000 or an integral multiple of $1,000,000 in
excess thereof or, if less, the Letter of Credit Commitment then in effect.
(b) Mandatory Reductions of RC Commitments.
(i) Mandatory Scheduled Reductions of RC
Commitments. On each date set forth below, the RC Commitments shall be reduced
by the amount equal to the percentage set forth below next to such date
multiplied by the aggregate RC Commitments existing on March 31, 2001 (prior to
giving effect to such initial reduction):
Reduction
Dates Amounts
----- -------
March 31, 2001 1.25%
June 30, 2001 1.25%
September 30, 2001 1.25%
December 31, 2001 1.25%
March 31, 2002 2.50%
June 30, 2002 2.50%
September 30, 2002 2.50%
December 31, 2002 2.50%
March 31, 2003 3.75%
June 30, 2003 3.75%
September 30, 2003 3.75%
December 31, 2003 3.75%
March 31, 2004 3.75%
June 30, 2004 3.75%
September 30, 2004 3.75%
December 31, 2004 3.75%
March 31, 2005 3.75%
June 30, 2005 3.75%
September 30, 2005 3.75%
December 31, 2005 3.75%
March 31, 2006 20.00%
June 30, 2006 20.00%
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(ii) Mandatory Reductions of RC Commitments Relating
to Excess Cash Flow. On the earlier of (i) the date the annual financial
statements in respect of each fiscal year (commencing with the fiscal year
ending December 31, 2000), are delivered to the Administrative Agent pursuant to
Section 7.1(a) or (ii) the 120th day following the end of each fiscal year
(commencing with the fiscal year ending December 31, 2000), the RC Commitments
shall be reduced by an amount equal to 50% of Excess Cash Flow with respect to
such fiscal year, provided that no such reduction in respect of such fiscal year
shall be required if (x) the Total Leverage Ratio as at the end of such fiscal
year is less than 5.00:1.00 and (y) no Default or Event of Default shall exist
at the end of such fiscal year or on the date the RC Commitments would be
required to be reduced.
(iii) Mandatory Reductions of RC Commitments Relating
to Insurance and Condemnation. The RC Commitments shall be reduced in the
amounts and at the times required by Sections 7.5(b) and 7.5(c).
(iv) Mandatory Reductions of RC Commitments Relating
to Proceeds of Media Asset Sales and Other Property Sales. The RC Commitments
shall be reduced by an amount equal to the difference between (a) 100% of the
proceeds of the sale, exchange or other disposition of (A) all or substantially
all of any Media Asset of the Borrower or any of its Subsidiaries, or (B) any
other Property to the extent not sold, exchanged or disposed of in the ordinary
course of business (net of (1) sales and other commissions and legal and other
expenses incurred, (2) cash taxes payable, and (3) Indebtedness permitted under
Sections 8.1(ii) and (iv) which is secured by the Media Asset or other Property
sold, exchanged or disposed of and required to be repaid and is repaid, in each
case in connection therewith), and (b) the amount of Reinvested Proceeds in
connection with such sale, exchange or other disposition of a Media Asset which
has been used prior to the date such reduction is required to be made to acquire
one or more additional Media Assets through a merger or acquisition in
accordance with Section 8.3. Such reduction shall be made on the earlier of (x)
the last day of the Reinvestment Period with respect to such sale, exchange or
other disposition, or (y) the occurrence of a Default or Event of Default.
(v) Mandatory Reductions of RC Commitments Relating
to Issuances of Equity. The RC Commitments shall be reduced immediately upon
receipt by the Borrower of the aggregate proceeds of any issuance by the
Borrower of Stock (net of sales and other commissions and legal and other
related expenses incurred in connection with such issuance) (the "Net Equity
Proceeds") by an amount equal to:
(A) if no Default or Event of Default shall
then exist and the Total Leverage Ratio (calculated without giving effect to the
phrase "less cash and cash equivalents in excess of $5,000,000" contained in
clause (i) of the definition "Total Leverage Ratio") is greater than 5.00:1.00,
the lesser of (x) 50% of the Net Equity
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Proceeds and (y) the amount of the Net Equity Proceeds which when applied to the
prepayment of the Loans will result in the Total Leverage Ratio (calculated
without giving effect to the phrase "less cash and cash equivalents in excess of
$5,000,000" contained in clause (i) of the definition "Total Leverage Ratio")
not exceeding 5.00:1.00; and
(B) if a Default or Event of Default shall
then exist, 100% of the Net Equity Proceeds.
(c) Application of Reductions.
(i) Each reduction of the RC Commitments made
pursuant to this Section 2.4 shall effect a corresponding reduction of each
Lender's applicable RC Commitment by an amount equal to such Lender's applicable
RC Commitment Percentage of such reduction.
(ii) Reductions of the RC Commitments made pursuant
to Section 2.4(a) or 2.4(b)(ii), (iii), (iv) and (v) shall be applied in inverse
order among the remaining RC Commitment reductions set forth in Section
2.4(b)(i).
(iii) Simultaneously with each reduction of the RC
Commitments under this Section 2.4, the Borrower shall pay the applicable
Commitment Fee accrued on the amount by which such RC Commitments have been
reduced.
(iv) If for any reason the Letter of Credit Exposure
of all Lenders shall exceed the RC Commitments, the Borrower shall immediately
deposit in a cash collateral account maintained with and under the sole dominion
and control of the Administrative Agent an amount equal to such excess.
(d) Increase of RC Commitments. The Borrower may at any time
after the first Borrowing Date to occur after the Restatement Effective Date but
prior to March 31, 2000, at its sole cost and expense, request any one or more
of the Lenders to increase (such decision to increase the RC Commitment of a
Lender to be within the sole and absolute discretion of such Lender) its RC
Commitment, or any other Person reasonably satisfactory to the Administrative
Agent and the Issuing Bank to provide a new RC Commitment, by submitting an RC
Supplement duly executed by the Borrower and each such Lender or other Person,
as the case may be. If such RC Supplement is in all respects reasonably
satisfactory to the Administrative Agent, the Administrative Agent shall execute
such RC Supplement and deliver a copy thereof to the Borrower and each such
Lender or other Person, as the case may be. Upon execution and delivery of such
RC Supplement, (i) in the case of each such Lender, such Lender's RC Commitment
shall be increased to the amount set forth in such RC Supplement, (ii) in the
case of each such other Person, such other Person shall become a party hereto
and shall for all purposes of
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the Loan Documents be deemed a "Lender" having an RC Commitment as set forth in
such RC Supplement and (iii) in each case, the RC Commitment of such Lender or
such other Person, as the case may be, shall be as set forth in the applicable
RC Supplement; provided, however, that:
(i) immediately after giving effect thereto, the
aggregate RC Commitments shall not exceed $200,000,000;
(ii) such increase shall be in an amount not less
than $5,000,000 or such amount plus an integral multiple of $1,000,000;
(iii) the Borrower shall have delivered to the
Administrative Agent projections, reasonably satisfactory to the Administrative
Agent, demonstrating pro-forma compliance (after giving effect to such increase)
with the terms of the Loan Documents, including but not limited to Sections 6.1,
6.2, 6.3 and 6.4, through the Maturity Date;
(iv) if RC Loans would be outstanding immediately
after giving effect to such increase, then simultaneously with such increase (A)
each such Lender, each such other Person and each other Lender shall be deemed
to have entered into an assignment and acceptance agreement, in form and
substance substantially similar to Exhibit J, pursuant to which each such other
Lender shall have assigned to each such Lender and each such other Person a
portion of its RC Loans necessary to reflect proportionately the aggregate RC
Commitments as adjusted in accordance with this Section 2.4(d), and (B) in
connection with such assignment, each such Lender and each such other Person
shall pay to the Administrative Agent, for the account of the other Lenders,
such amount as shall be necessary to appropriately reflect the assignment to it
of RC Loans, and in connection with such assignment each such other Lender may
treat the assignment of Eurodollar Loans as a prepayment of such Eurodollar
Loans for purposes of Section 2.9;
(v) each such other Person shall have delivered to
the Administrative Agent and the Borrower all forms, if any, that are required
to be delivered by such other Person pursuant to Section 2.13; and
(vi) the Administrative Agent shall have received
such certificates, legal opinions and other items as it shall reasonably request
in connection with such increase.
2.5 Prepayments of the Loans.
(a) Voluntary Prepayments. The Borrower may, at its option,
prepay the RC Loans, in whole or in part, without premium or penalty, at any
time and from time
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33
to time, by notifying the Administrative Agent at least three Business Days'
prior to the proposed prepayment date with respect to Eurodollar Loans, and at
least one Business Day prior to the proposed prepayment date with respect to ABR
Loans. Each such notice shall be in writing and shall specify the Loans to be
prepaid (whether Eurodollar Loans or ABR Loans), the amount to be prepaid, and
the date of prepayment. Upon receipt by the Administrative Agent of any such
notice, the Administrative Agent shall promptly notify each Lender thereof. If
any such notice of the Borrower is given pursuant to this Section 2.5, such
notice shall be irrevocable and the payment amount specified in such notice
shall be due and payable on the date specified, together with accrued interest
to the date of such payment on the amount prepaid. Partial prepayments of ABR
Loans shall be in an aggregate principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof and partial prepayments of Eurodollar
Loans shall be in an aggregate principal amount of $2,000,000 or an integral
multiple of $250,000 in excess thereof, or, if less, the outstanding principal
balance of such Loans.
(b) Mandatory Prepayments of Loans. The Borrower shall
immediately prepay the RC Loans (i) at any time at which the sum of the
aggregate outstanding principal amount of the outstanding RC Loans and the
Letter of Credit Exposure of all Lenders exceeds the aggregate RC Commitments of
all Lenders in an amount equal to the amount of such excess and (ii) in the
amounts and at the times required by Section 7.5.
(c) In General. If any prepayment is made under this Section
2.5 with respect to any Eurodollar Loans, in whole or in part, prior to the last
day of the applicable Interest Period, the Borrower agrees to indemnify the
Lenders in accordance with Section 2.9. After giving effect to any partial
prepayment with respect to Eurodollar Loans which were made (whether as the
result of a borrowing or a conversion) on the same date and which had the same
Interest Period, the outstanding principal amount of such Eurodollar Loans shall
not be less than $2,000,000 or an integral multiple of $250,000 in excess
thereof. The Borrower may designate which Loans (ABR Loans or Eurodollar Loans)
are to be prepaid in connection with any prepayment made under this Section 2.5.
2.6 Interest Rate and Payment Dates; Highest Lawful Rate.
(a) Prior to Maturity. Prior to maturity, the outstanding
principal amount of the Loans shall bear interest on the unpaid principal amount
thereof at the Alternate Base Rate or the Eurodollar Rate, as applicable, plus
the Applicable Margin.
(b) Default Rate. After maturity and at all times during the
continuance of any Event of Default under Section 9.1(a), (b), (h) or (i) or
during the continuance for more than 30 days of any other Event of Default, the
outstanding principal amount of all Loans hereunder shall bear interest,
notwithstanding the rate
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34
which would otherwise be applicable pursuant to Section 2.6(a) above, at a rate
of interest per annum equal to 2% above such otherwise applicable rate.
(c) Late Payment Rate. Any payment of interest on any Note
or any Reimbursement Obligation and any payment of any Commitment Fee, Letter of
Credit Fee or other fee or payment payable by the Borrower under any Loan
Document and not paid on the date when due and payable shall bear interest, to
the extent permitted by law, at the Alternate Base Rate plus the Applicable
Margin for ABR Loans plus 2% per annum from the due date thereof until the date
such payment is made.
(d) General. Interest on ABR Loans, to the extent based on
the BNY Rate, shall be calculated on the basis of a 365 or 366 day year (as the
case may be), and interest on all Eurodollar Loans and ABR Loans, to the extent
based on the Federal Funds Rate, shall be calculated on the basis of a 360 day
year, in each case for the actual number of days elapsed. Interest shall be
payable in arrears on each Interest Payment Date and upon payment (or prepayment
(or required payment or prepayment) of the Loans, except that interest payable
pursuant to Sections 2.6(b) and 2.6(c) shall be payable on demand. Any change in
the interest rate on a Loan resulting from a change in the Alternate Base Rate
shall become effective as of the opening of business on the day on which such
change in the Alternate Base Rate shall become effective. The Administrative
Agent shall, as soon as practicable, notify the Borrower and the Lenders of the
effective date and the amount of each such change in the Alternate Base Rate,
but failure to so notify shall not in any manner affect the obligation of the
Borrower to pay interest on the Loans in the amounts and on the dates required.
Each determination of the Alternate Base Rate or Eurodollar Rate by the
Administrative Agent pursuant to this Agreement shall be conclusive and binding
on the Borrower and the Lenders absent manifest error.
(e) Highest Lawful Rate. At no time shall the interest rate
payable on the Loans of any Lender, together with the Commitment Fees, the
Letter of Credit Fee and all other fees and other amounts payable hereunder, to
the extent the same are construed to constitute interest, exceed the Highest
Lawful Rate applicable to such Lender. If interest payable to a Lender on any
date would exceed the maximum amount permitted by the Highest Lawful Rate, such
interest payment shall automatically be reduced to such maximum permitted
amount, and interest for any subsequent period, to the extent less than the
maximum amount permitted for such period by the Highest Lawful Rate, shall be
increased by the unpaid amount of such reduction. Any interest actually received
for any period in excess of such maximum allowable amount for such period shall
be deemed to have been applied as a prepayment of such Lender's Loans. The
Borrower acknowledges that to the extent interest payable on ABR Loans is based
on the BNY Rate, such BNY Rate is only one of the bases for computing interest
on loans made by the Lenders, and by basing interest payable on ABR Loans on the
BNY Rate, the Lenders have not committed to charge, and the Borrower has not in
any way
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35
bargained for, interest based on a lower or the lowest rate at which the Lenders
may now or in the future make loans to other borrowers.
2.7 Use of Proceeds.
(a) The proceeds of all Loans shall be used (i) to finance
acquisitions permitted hereunder, including transaction expenses in connection
therewith, (ii) to make capital expenditures permitted hereunder, (iii) for
working capital purposes and (iv) for general corporate purposes.
(b) Letters of Credit shall be used to support ordinary
course working capital purposes and to fulfill deposit requirements associated
with proposed acquisitions of Media Assets.
(c) Notwithstanding anything to the contrary contained in
any Loan Document, the Borrower agrees that no part of the proceeds of any Loan
or Letter of Credit have been or will be used, directly or indirectly, for a
purpose which violates any law, rule or regulation of any Governmental
Authority, including without limitation the provisions of Regulations T, U or X
of the Board of Governors of the Federal Reserve System, as amended.
2.8 Conversions; Other Matters.
(a) The Borrower may elect from time to time to convert
Eurodollar Loans to ABR Loans by giving the Administrative Agent at least two
Business Days' prior irrevocable notice of such election, specifying the amount
to be so converted, provided, that any such conversion shall only be made on the
last day of the Interest Period applicable thereto. In addition, the Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans or to
convert Eurodollar Loans to new Eurodollar Loans by giving the Administrative
Agent at least three Business Days' prior irrevocable notice of such election,
specifying the amount to be so converted and the initial Interest Period
relating thereto, provided that any such conversion of ABR Loans to Eurodollar
Loans shall only be made on a Business Day and any such conversion of Eurodollar
Loans to new Eurodollar Loans shall only be made on the last day of the Interest
Period applicable to the Eurodollar Loans which are to be converted to such new
Eurodollar Loans. The Administrative Agent shall promptly provide the Lenders
with notice of any such election. Loans may be converted pursuant to this
Section 2.8(a) in whole or in part, provided that conversions of ABR Loans to
Eurodollar Loans, or Eurodollar Loans to new Eurodollar Loans having the same
Interest Period, shall be in an aggregate principal amount of $2,000,000 or such
amount plus a whole multiple of $250,000.
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36
(b) Notwithstanding anything in this Agreement to the
contrary, upon the occurrence and during the continuance of a Default or Event
of Default, the Borrower shall have no right to elect to convert any ABR Loan to
a Eurodollar Loan or to convert any Eurodollar Loan to a new Eurodollar Loan. In
such event, such ABR Loan shall be automatically continued as an ABR Loan or
such Eurodollar Loan shall be automatically converted to an ABR Loan on the last
day of the Interest Period applicable to such Eurodollar Loan. If a Default or
an Event of Default shall have occurred and be continuing, the Administrative
Agent shall, at the request of the Required Lenders, notify the Borrower (by
telephone or otherwise) that all, or such lesser amount as the Administrative
Agent and the Required Lenders shall designate, of the outstanding Eurodollar
Loans, if any, shall be automatically converted to ABR Loans, in which event
such Eurodollar Loans of each Lender, at the option of such Lender, shall be
automatically converted to ABR Loans on the date such notice is given.
(c) Each such conversion shall be effected by each Lender by
applying the proceeds of the new ABR Loan or Eurodollar Loan, as the case may
be, to the Loan (or portion thereof) being converted (it being understood that
such conversion shall not constitute a borrowing for purposes of Sections 4 or
5).
(d) Notwithstanding any other provision of this Agreement:
(i) If the Borrower shall have failed to elect a
Eurodollar Loan under Sections 2.3 or 2.8, as the case may be, in connection
with any borrowing of new Loans or expiration of an Interest Period with respect
to any existing Eurodollar Loan, the amount of the Loans subject to such
borrowing or such existing Eurodollar Loan shall thereafter be an ABR Loan until
such time, if any, as the Borrower shall elect a new Eurodollar Loan pursuant to
Section 2.8,
(ii) The Borrower shall not be permitted to select
any Eurodollar Loan the Interest Period in respect of which ends later than the
Maturity Date,
(iii) When electing a Eurodollar Loan, the Borrower
shall select an Interest Period such that, on each date that a mandatory
principal payment is required to be made pursuant to Section 2.5(b) in
connection with a RC Commitment reduction pursuant to Section 2.4(b), the
outstanding principal amount of all Loans which are ABR Loans, when added to the
aggregate principal amount of all Loans which are Eurodollar Loans the Interest
Period in respect of which shall end on such date, shall equal or exceed the
aggregate principal amount of the Loans required to be paid on such date, and
(iv) The Borrower shall not be permitted to have more
than five Interest Periods with respect to outstanding Eurodollar Loans at any
one time.
2.9 Indemnification for Loss.
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37
In the event of (a) the payment or prepayment (voluntary or
otherwise) of any principal of any Eurodollar Loan other than on the last day of
an Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto or (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be the
excess, if any, of (i) the amount of interest that would have accrued on the
principal amount of such Loan had such event not occurred, at the Eurodollar
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of
interest that would accrue on such principal amount for such period at the
interest rate that such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
2.10 Reimbursement for Costs.
The Borrower hereby agrees to reimburse each Lender and the
Issuing Bank on demand for its reasonable costs (excluding general
administrative and overhead costs) directly attributable to its compliance with
this Agreement during the term hereof with all applicable future laws, executive
orders, and regulations of the governments of the United States and the United
Kingdom, and of any other applicable government, and of any regulatory or
administrative agency thereof (including, without limitation, the reserve
requirements established by the Board of Governors of the Federal Reserve System
under Regulation D), or any change in existing or future applicable laws,
executive orders and regulations and in the interpretations thereof which
impose, modify or deem applicable any reserve, asset, special deposit or special
assessment requirements on deposits obtained in the interbank eurodollar market,
or which subject any Lender or the Issuing Bank to any tax (documentary, stamp
or otherwise) with respect to any Loan Document or Letter of Credit, or change
the basis of taxation of payments to any Lender or the Issuing Bank, of
principal, interest, fees or other amounts payable under any Loan Document or
Letter of Credit (except for any tax, or changes in the rate of tax, on its
income or receipts (including franchise taxes on or based upon such income or
receipts) imposed by the United States or any other jurisdiction). Each such
Lender and the Issuing Bank agrees to provide the Borrower with notice of any
law, executive order or
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38
regulation, or change in the interpretation thereof, which would require the
Borrower to indemnify such Lender or the Issuing Bank under this Section 2.10
promptly upon it obtaining actual knowledge thereof and determining that it
intends to require the Borrower to reimburse it pursuant to this Section 2.10
for any costs resulting therefrom. The cost to each Lender in complying with
laws, executive orders or regulations which impose, modify or deem applicable
any reserve, asset, special deposit or special assessment requirements on
deposits obtained in the market for eurocurrency loans shall be computed by
determining the amount by which such requirements effectively increase such
Lender's cost of making and maintaining its Eurodollar Loans and by computing
the additional amount which would have been owing to such Lender hereunder if
such effective increase had been added to the Eurodollar Rate for purposes of
determining the applicable Eurodollar Rate during the period or applicable
portion thereof in question. Each Lender and the Issuing Bank may make multiple
requests for compensation under this Section 2.10.
2.11 Illegality of Funding.
Notwithstanding anything contained herein to the contrary, if
any law, regulation, treaty or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for any Lender to
make or maintain any Eurodollar Loan as contemplated by this Agreement, (i) the
commitment of such Lender to make Eurodollar Loans or convert ABR Loans to
Eurodollar Loans, as the case may be, shall forthwith be suspended and (ii) such
Lender's then outstanding Eurodollar Loans affected thereby, if any, shall be
converted automatically to ABR Loans on the last day of the then current
Interest Period applicable thereto or at such earlier time as may be required.
If the commitment of any Lender with respect to Eurodollar Loans is suspended
pursuant to this Section 2.11 and such Lender shall notify the Administrative
Agent and the Borrower that it is once again legal for such Lender to make or
maintain Eurodollar Loans, such Lender's commitment to make or maintain
Eurodollar Loans shall be reinstated.
2.12 Option to Fund.
Each Lender has indicated that, if the Borrower requests a
Eurodollar Loan, such Lender may wish to purchase one or more deposits in order
to fund or maintain its funding of its pro rata share of such Loan during the
Interest Period with respect thereto; it being understood that the provisions of
this Agreement relating to such funding are included only for the purpose of
determining the rate of interest to be paid on such Loan and any amounts owing
under Sections 2.9, 2.10, 2.11 and 2.15. Each Lender shall be entitled to fund
and maintain its funding of all or any part of its Eurodollar Loans in any
manner it sees fit, but all such determinations hereunder shall be made as if
each Lender had actually funded and maintained its Eurodollar Loans during the
applicable Interest Period through the purchase of deposits in an amount equal
to its pro rata share of the Eurodollar Loans having a maturity corresponding to
such Interest Period. Any
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Lender may fund its pro rata share of the Eurodollar Loans from any branch or
office of such Lender as such Lender may choose from time to time, subject to
Section 2.17.
2.13 Taxes; Net Payments.
(a) Any and all payments by or on account of any obligation
of any Loan Party hereunder and under any other Loan Document shall be made free
and clear of and without deduction for any Indemnified Taxes or Other Taxes,
provided that, if such Loan Party shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section), the
applicable Credit Party receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Loan Party shall make such
deductions and (iii) such Loan Party shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Loan Parties shall pay any Other Taxes
to the relevant Governmental Authority in accordance with applicable law.
(c) Each Loan Party shall indemnify each Credit Party,
within ten days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by such Credit Party on or with respect to
any payment by or on account of any obligation of such Loan Party under the Loan
Documents (including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Credit Party, or by
the Administrative Agent on its own behalf or on behalf of a Credit Party, shall
be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from
or reduction of withholding tax under the law of the jurisdiction in which the
relevant Loan Party is located, or any treaty to which such jurisdiction is a
party, with respect to payments under the Loan Documents shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law, such properly
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completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
2.14 Capital Adequacy.
If the amount of capital required or expected to be maintained
by any Lender, the Issuing Bank or any Person directly or indirectly owning or
controlling such Lender or the Issuing Bank (each a "Control Person"), shall be
affected by
(a) the introduction or phasing in of any law, rule or
regulation after the Original Effective Date,
(b) any change after the Original Effective Date in the
interpretation of any existing law, rule or regulation
by any central bank or United States or foreign
Governmental Authority charged with the administration
thereof, or
(c) compliance by such Lender, the Issuing Bank or such
Control Person with any directive, guideline or request
from any central bank or United States or foreign
Governmental Authority (whether or not having the force
of law) promulgated or made Original Effective Date,
and such Person shall have determined that such introduction, phasing in, change
or compliance shall have had or will thereafter have the effect of reducing (i)
the rate of return on its capital, or (ii) the asset value to such Lender, the
Issuing Bank or such Control Person of the Loans made or maintained by such
Lender, the Letters of Credit issued or maintained by the Issuing Bank or the
Reimbursement Obligations or any participation therein owed to the Issuing Bank
or any Lender to a level below that which such Lender, the Issuing Bank or such
Control Person could have achieved or would thereafter be able to achieve but
for such introduction, phasing in, change or compliance (after taking into
account such Lender's, the Issuing Bank's or such Control Person's policies
regarding capital), in either case by an amount which it deems material, then,
within ten days after demand by such Lender or the Issuing Bank, the Borrower
shall pay to such Lender, the Issuing Bank or such Control Person, as the case
may be, such additional amount or amounts as shall be sufficient to compensate
such Lender, the Issuing Bank or such Control Person, as the case may be, for
such reduction on an after-tax basis.
2.15 Substituted Interest Rate.
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In the event that (i) the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that by reason of circumstances affecting the interbank eurodollar
market either adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate applicable pursuant to Section 2.6 or (ii) in the event that any
Lender shall have notified the Administrative Agent that it has determined
(which determination shall be conclusive and binding on the Borrower) that the
applicable Eurodollar Rate will not adequately and fairly reflect the cost to
such Lender of maintaining or funding loans bearing interest based on such
Eurodollar Rate, with respect to a proposed Loan that the Borrower has requested
be made as a Eurodollar Loan, or a Eurodollar Loan that will result from the
requested conversion of any Loan into a Eurodollar Loan (any such Loan being
herein called an "Affected Loan"), the Administrative Agent shall promptly
notify the Borrower and the Lenders (by telephone or otherwise) of such
determination, confirmed in writing, on or prior to the requested Borrowing Date
for such Affected Loan or the requested conversion date of such Loan. If the
Administrative Agent shall give such notice, (a) any requested Affected Loan
shall be made as an ABR Loan, (b) any Loan that was to have been converted to an
Affected Loan shall be converted to or continued as an ABR Loan and (c) any
outstanding Affected Loan shall be converted, on the last day of the then
current Interest Period with respect thereto, to an ABR Loan. Until any such
notice under clause (i) of this Section 2.15 has been withdrawn by the
Administrative Agent (by notice to the Borrower promptly upon the Administrative
Agent's having determined that such circumstances affecting the interbank
eurodollar market no longer exist and that adequate and reasonable means do
exist for determining the Eurodollar Rate pursuant to Section 2.6) no further
Eurodollar Loans shall be made by the Lenders nor shall the Borrower have the
right to convert any Loans to Eurodollar Loans. Until any such notice under
clause (ii) of this Section 2.15 has been withdrawn by the Administrative Agent
(by notice to the Borrower promptly upon the Administrative Agent's having been
notified by such Lender that circumstances no longer render any Loan an Affected
Loan), no further Eurodollar Loans shall be required to be made by such Lender
nor shall the Borrower have the right to convert any Loan of such Lender to a
Eurodollar Loan of such Lender.
2.16 Transaction Record.
The Administrative Agent's records regarding the amount of each
Loan, each payment by the Borrower of principal and interest on the Loans, each
Letter of Credit and other information relating to the Loans and Letters of
Credit shall be presumed correct absent manifest error.
2.17 Certificates of Payment and Reimbursement; Other Provisions
Regarding Yield Protection.
(a) In connection with any request by a Lender or the
Issuing Bank for payment or reimbursement pursuant to Section 2.9, 2.10, 2.11,
2.14 or 2.15, such Lender
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or the Issuing Bank, as the case may be, shall provide the Borrower with a
certificate, signed by an officer, setting forth a description, in reasonable
detail, of any such payment or reimbursement. Each determination by a Lender or
the Issuing Bank of such amount or amounts owed by the Borrower to it under any
such Section shall be presumed correct absent manifest error, and shall be made
without duplication as to any other amounts owing by the Borrower to it under
Section 2.9, 2.10, 2.11, 2.14 or 2.15.
(b) In the event that any amount is owed by the Borrower to
any Lender pursuant to Section 2.9, 2.10, 2.11, 2.14 or 2.15 and an assignment
by such Lender of its rights and a delegation and transfer of its obligations
hereunder to another office or branch of such Lender would cause such amount to
cease to be owed by the Borrower, then such Lender shall make reasonable efforts
(which shall not in any event require such Lender to incur a loss or otherwise
suffer any disadvantage) to make an assignment of its rights and a delegation
and transfer of its obligations hereunder to such other office or branch, so
long as such assignment and delegation will not cause other amounts to be owed
by the Borrower under Section 2.9, 2.10, 2.11, 2.14 or 2.15 and so long as the
Lender shall be permitted under applicable law to make and maintain Eurodollar
Loans after giving effect to such assignment and delegation.
(c) The obligations of the Borrower under Sections 2.9,
2.10, 2.11, 2.14 and 2.15 shall survive any termination of this Agreement, the
expiration of the RC Commitments and the payment of all indebtedness of the
Borrower hereunder and under the Loan Documents.
2.18 Letter of Credit Sub-Facility.
(a) Subject to the terms and conditions hereof and the
payment by the Borrower to the Issuing Bank of such fees as the Borrower and the
Issuing Bank shall have agreed in writing, the Issuing Bank agrees, in reliance
on the agreement of the other Lenders set forth in Section 2.19, to issue
standby letters of credit (each a "Letter of Credit" and, collectively, the
"Letters of Credit") during the RC Commitment Period for the account of the
Borrower, provided that immediately after the issuance of each Letter of Credit
(i) the Letter of Credit Exposure of all Lenders shall not exceed the Letter of
Credit Commitment, and (ii) the sum of the aggregate outstanding RC Loans and
the Letter of Credit Exposure of all Lenders shall not exceed the RC
Commitments. Each Letter of Credit shall have an expiration date which shall be
not later than the earlier to occur of one year from the date of issuance or
last extension thereof or one Business Day prior to the RC Commitment
Termination Date. No Letter of Credit shall be issued if the Administrative
Agent, or any Lender by notice to the Administrative Agent and the Issuing Bank
no later than 3:00 P.M. one Business Day prior to the requested date of issuance
of such Letter of Credit, shall have determined that the applicable conditions
set forth in Section 5 have not been satisfied.
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43
(b) Each Letter of Credit shall be issued for the account of
the Borrower. The Borrower shall give the Administrative Agent and the Issuing
Bank a Letter of Credit Request for the issuance of each Letter of Credit no
later than 1:00 P.M at least three Business Days prior to the requested date of
issuance. Such Letter of Credit Request shall be accompanied by the Issuing
Bank's standard Application and Agreement for Standby Letter of Credit (each a
"Reimbursement Agreement") executed by the Borrower, and shall specify (i) the
beneficiary of such Letter of Credit and the obligations of the Borrower in
respect of which such Letter of Credit is to be issued, (ii) the Borrower's
proposal as to the conditions under which a drawing may be made under such
Letter of Credit and the documentation to be required in respect thereof, (iii)
the maximum amount to be available under such Letter of Credit and (iv) the
requested date of issuance. Upon receipt of such Letter of Credit Request from
the Borrower, the Administrative Agent shall promptly notify each Lender
thereof. The Issuing Bank shall, on the proposed date of issuance and subject to
the other terms and conditions of this Agreement, issue the requested Letter of
Credit. Each Letter of Credit shall be in a minimum amount of $1,000,000 and be
in form and substance reasonably satisfactory to the Issuing Bank, with such
provisions with respect to the conditions under which a drawing may be made
thereunder and the documentation required in respect of such drawing as the
Issuing Bank shall reasonably require. Each Letter of Credit shall be used
solely for the purposes described therein.
(c) Each payment by the Issuing Bank of a draft drawn under
a Letter of Credit shall give rise to the obligation of the Borrower to
immediately reimburse the Issuing Bank for the amount thereof. The Issuing Bank
shall promptly notify the Borrower of such payment by the Issuing Bank of a
draft drawn under a Letter of Credit, but any failure to so notify shall not in
any manner affect the obligation of the Borrower to make reimbursement when due.
In lieu of such notice, if the Borrower has not made reimbursement prior to the
end of the Business Day when due, the Borrower hereby irrevocably authorizes the
Issuing Bank to deduct the amount of any such reimbursement from any account(s)
of the Borrower maintained with the Issuing Bank, upon which the Issuing Bank
shall apply the amount of such deduction to such reimbursement. If all or any
portion of any reimbursement obligation in respect of a Letter of Credit shall
not be paid when due (whether at the stated maturity thereof, by acceleration or
otherwise), such overdue amount shall bear interest, payable upon demand, at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin
applicable to ABR Loans plus 2% (calculated in the same manner as ABR Loans),
from the date of such nonpayment until paid in full (whether before or after the
entry of a judgment thereon).
2.19 Letter of Credit Participation.
(a) Each Lender hereby unconditionally and irrevocably,
severally (and not jointly) takes an undivided participating interest in the
obligations of the Issuing Bank under and in connection with each Letter of
Credit in an amount equal to such
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Lender's RC Commitment Percentage of the amount of such Letter of Credit. Each
Lender shall be liable to the Issuing Bank for its RC Commitment Percentage of
the unreimbursed amount of any draft drawn and honored under each Letter of
Credit. Each Lender shall also be liable for an amount equal to the product of
its RC Commitment Percentage and any amounts paid by the Borrower pursuant to
Sections 2.18 and 2.20 that are subsequently rescinded or avoided, or must
otherwise be restored or returned. Such liabilities shall be unconditional and
without regard to the occurrence of any Default or Event of Default or the
compliance by the Borrower with any of its obligations under the Loan Documents.
(b) The Issuing Bank shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify each
Lender (which notice shall be promptly confirmed in writing), of the date and
the amount of each draft paid under each Letter of Credit with respect to which
full reimbursement payment shall not have been made by the Borrower as provided
in Section 2.18(c), and forthwith upon receipt of such notice, such Lender shall
promptly make available to the Administrative Agent for the account of the
Issuing Bank its RC Commitment Percentage of the amount of such unreimbursed
draft at the office of the Administrative Agent specified in Section 11.2 in
lawful money of the United States and in immediately available funds. The
Administrative Agent shall distribute the payments made by each Lender pursuant
to the immediately preceding sentence to the Issuing Bank promptly upon receipt
thereof in like funds as received. Each Lender shall indemnify and hold harmless
the Administrative Agent and the Issuing Bank from and against any and all
losses, liabilities (including liabilities for penalties), actions, suits,
judgments, demands, costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) resulting from any failure on the part
of such Lender to provide, or from any delay in providing, the Administrative
Agent with such Lender's RC Commitment Percentage of the amount of any payment
made by the Issuing Bank under a Letter of Credit in accordance with this
subsection (b) above (except in respect of losses, liabilities or other
obligations suffered by the Administrative Agent or the Issuing Bank, as the
case may be, resulting from the gross negligence or willful misconduct of the
Administrative Agent or the Issuing Bank, as the case may be). If a Lender does
not make available to the Administrative Agent when due such Lender's RC
Commitment Percentage of any unreimbursed payment made by the Issuing Bank under
a Letter of Credit, such Lender shall be required to pay interest to the
Administrative Agent for the account of the Issuing Bank on such Lender's RC
Commitment Percentage of such payment at a rate of interest per annum equal to
(i) from the date such Lender should have made such amount available until the
third day therefrom, the Federal Funds Effective Rate, and (ii) thereafter, the
Federal Funds Effective Rate plus 2%, in each case payable upon demand by the
Issuing Bank. The Administrative Agent shall distribute such interest payments
to the Issuing Bank upon receipt thereof in like funds as received.
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(c) Whenever the Administrative Agent is reimbursed by the
Borrower, for the account of the Issuing Bank, for any payment under a Letter of
Credit and such payment relates to an amount previously paid by a Lender in
respect of its RC Commitment Percentage of the amount of such payment under such
Letter of Credit, the Administrative Agent (or the Issuing Bank, if such payment
by a Lender was paid by the Administrative Agent to the Issuing Bank) will
promptly pay over such payment to such Lender.
2.20 Absolute Obligation with respect to Letter of Credit Payments.
The Borrower's obligation to reimburse the Issuing Bank for each
payment under or in respect of each Letter of Credit shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against the beneficiary of such Letter of Credit, the Administrative Agent, the
Issuing Bank, any Lender or any other Person, including, without limitation, any
defense based on the failure of any drawing to conform to the terms of such
Letter of Credit, any drawing document proving to be forged, fraudulent or
invalid, or the legality, validity, regularity or enforceability of such Letter
of Credit, provided, however, that, with respect to any Letter of Credit, the
foregoing shall not relieve the Issuing Bank of any liability it may have to the
Borrower for any actual damages sustained by the Borrower arising from a
wrongful payment (or failure to pay) under such Letter of Credit made as a
result of the Issuing Bank's gross negligence or willful misconduct.
3. FEES; PAYMENTS
3.1 Fees.
(a) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a fee (the "Commitment Fee") during the RC
Commitment Period, payable quarterly in arrears on the last day of each March,
June, September and December of each year, commencing on the first such date
following the Original Effective Date, and on the RC Commitment Termination
Date, on the average daily excess of (i) the RC Commitment of such Lender, over
(ii) the aggregate outstanding principal balance of the RC Loans of such Lender
plus its Letter of Credit Exposure, at a rate per annum equal to (a) at all
times when the Total Leverage Ratio is greater than or equal to 4.50:1.00,
0.500% (or 0.625% if Total Facility Usage is less than 0.50) and (b) at all
times when the Total Leverage Ratio is less than 4.50:1.00, 0.375% (or 0.500% if
Total Facility Usage is less than 0.50). The Commitment Fee shall be computed on
the basis of a 360-day year for the actual number of days elapsed.
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(b) Solely for purposes of calculating the Commitment Fee,
changes in the Total Leverage Ratio, as evidenced by a Compliance Certificate
delivered to the Administrative Agent pursuant to Section 7.1(d) or a Borrowing
Request or Letter of Credit Request delivered to the Administrative Agent
pursuant to Section 5.2(c) evidencing such a change, shall become effective upon
(i) in the case of the delivery of a Compliance Certificate, the first Business
Day following the delivery of (x) such Compliance Certificate and (y) the
applicable financial statements required to be delivered pursuant to Section
7.1(a) or (c), as the case may be, and (ii) in the case of the delivery of a
Borrowing Request or Letter of Credit Request, the Borrowing Date applicable
thereto. Solely for purposes of calculating the Commitment Fee, if the Borrower
shall fail to deliver a Compliance Certificate within 60 days after the end of
each of the first three fiscal quarters, or within 120 days after the end of the
last fiscal quarter, of each fiscal year (each a "certificate delivery date"),
the Total Leverage Ratio from and including such certificate delivery date to
the date of delivery by the Borrower to the Administrative Agent of such
Compliance Certificate shall be conclusively presumed to be greater than
4.50:1.00.
(c) The Borrower agrees to pay to the Administrative Agent
for the account of each Lender a fee (the "Letter of Credit Fee") with respect
to the Letters of Credit during the period commencing on the Original Effective
Date and ending on the RC Commitment Termination Date or, if later, the date
when the Letter of Credit Exposure of all Lenders is $0, payable quarterly in
arrears on the last day of each March, June, September and December of each
year, commencing on the first such date following the Original Effective Date,
on the RC Commitment Termination Date and on the last date of such period, on
such Lender's RC Commitment Percentage of the average daily aggregate amount
which may be drawn under the Letters of Credit during such period (whether or
not the conditions for drawing thereunder have or may be satisfied) multiplied
by a rate per annum equal to the Applicable Margin for Eurodollar Loans during
such period. The Letter of Credit Fee shall be computed on the basis of a
360-day year for the actual number of days elapsed.
3.2 Pro Rata Treatment and Application of Payments.
All payments (including prepayments) made by the Borrower to the
Administrative Agent on account of principal of or interest on the RC Loans
shall be made pro rata according to the outstanding principal amount of each
Lender's RC Loans. All payments by the Borrower shall be made without set-off or
counterclaim and shall be made prior to 1:00 P.M. on the date such payment is
due, to the Administrative Agent for the account of the Lenders, at the
Administrative Agent's office specified in Section 11.2, in each case in lawful
money of the United States of America and in immediately available funds, and,
as between the Borrower and the Lenders, any payment by the Borrower to the
Administrative Agent for the account of the Lenders shall be deemed to be
payment by the Borrower to the Lenders. The failure of the Borrower to make any
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such payment by 1:00 P.M. on such due date shall not constitute a Default or
Event of Default hereunder, provided that such payment is made on such due date,
but any such payment received by the Administrative Agent on any Business Day
after 1:00 P.M. shall be deemed to have been received on the immediately
succeeding Business Day for the purpose of calculating any interest payable in
respect thereof. The Administrative Agent agrees promptly to notify the Borrower
if it shall receive any such payment after 1:00 P.M. on the due date hereof,
provided that the failure of the Administrative Agent to give such prompt notice
shall in no way affect the Borrower's obligation to make any payment hereunder
on the date such payment is due. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. Unless
otherwise set forth in the definition of "Interest Period", if any payment
hereunder or on any Note becomes due and payable on a day other than a Business
Day, the maturity thereof shall be extended to the next succeeding Business Day
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate or rates during such extension.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, the Issuing Bank and the
Lenders to enter into this Agreement and to make Loans, and in order to induce
the Issuing Bank to issue Letters of Credit and the Lenders to participate
therein, the Borrower hereby makes the following representations and warranties
to the Administrative Agent, the Issuing Bank and to each Lender:
4.1 Subsidiaries.
The Borrower has only the Subsidiaries set forth in Schedule
4.1. Except as set forth in Schedule 4.1, the shares of each corporate
Subsidiary owned by the Borrower are duly authorized, validly issued, fully paid
and nonassessable. The shares of each Subsidiary are owned free and clear of any
Liens, except (i) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Collateral Documents and (ii) Permitted Liens.
4.2 Corporate Existence and Power.
The Borrower and each Subsidiary is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, has all requisite corporate power and authority to own its
Property and to carry on its business as now conducted, and is in good standing
and authorized to do business in each jurisdiction in which the failure to be so
authorized could reasonably be expected to have a Material Adverse Effect.
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4.3 Authority.
The Borrower and each other Loan Party has full power and
authority to enter into, execute, deliver and carry out the terms of the Loan
Documents to which it is a party, to make the borrowings contemplated hereby, to
execute, deliver and carry out the terms of the Notes and to incur the
obligations provided for herein and therein, all of which have been duly
authorized by all proper and necessary action and are in full compliance with
its certificate of incorporation and by-laws.
4.4 Governmental Authority Approvals.
No consent, authorizations or approval of, filing with, notice
to, or exemption by, stockholders, any Governmental Authority or any other
Person (except for those which have been obtained, made or given and those which
will be obtained, made or given prior to the Restatement Effective Date) is
required to authorize, or is required in connection with the execution, delivery
and performance of the Loan Documents, or is required as a condition to the
validity or, except as expressly set forth in the Collateral Documents with
respect to the FCC, the enforceability of the Loan Documents. Except as set
forth in the preceding sentence, no provision of any applicable statute, law
(including, without limitation, any applicable usury or similar law), rule or
regulation of any Governmental Authority will prevent the execution, delivery or
performance of, or affect the validity of, the Loan Documents.
4.5 Binding Agreement.
The Loan Documents constitute the valid and legally binding
obligations of the Borrower and each other Loan Party to which it is a party,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally.
4.6 Litigation.
Except as set forth in Schedule 4.6, there are no actions,
suits, arbitration proceedings or claims (whether or not purportedly on behalf
of the Borrower or any Subsidiary) pending or, to the knowledge of the Borrower,
threatened against the Borrower or any Subsidiary, or maintained by the Borrower
or any Subsidiary, at law or in equity, before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect. There are no
proceedings pending or, to the knowledge of the Borrower, threatened against the
Borrower or any Subsidiary which call into question the validity or
enforceability of any of the Loan Documents.
4.7 No Conflicting Agreements.
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Except as set forth in Schedule 4.7, neither the Borrower nor
any Subsidiary is in default under any mortgage, indenture, contract, agreement,
judgment, decree or order to which it is a party or by which it or any of its
Property is bound, which defaults, taken as a whole, could reasonably be
expected to have a Material Adverse Effect. Except for any Lien created by any
Loan Document, the execution, delivery or carrying out of the terms of the Loan
Documents will not constitute a default under, conflict with, require any
consent under (other than consents which have been obtained) or result in the
creation or imposition of, or obligation to create, any Lien upon the Property
of the Borrower or any Subsidiary pursuant to the terms of any such mortgage,
indenture, contract, agreement, judgment, decree or order, which defaults,
conflicts and consents, if not obtained, taken as a whole, could reasonably be
expected to have a Material Adverse Effect.
4.8 Taxes.
Except as set forth in Schedule 4.8, the Borrower and each
Subsidiary has filed or caused to be filed all tax returns required to be filed
and has paid, or has made adequate provision for the payment of, all Taxes shown
to be due and payable on said returns or in any assessments made against it
which would be material to the Borrower or any Subsidiary, and no tax Liens
(other than Permitted Liens) have been filed. Except as set forth in Schedule
4.8, the charges, accruals and reserves on the books of the Borrower and each
Subsidiary with respect to all federal, state, local and other Taxes are, to the
best knowledge of the Borrower, adequate, and the Borrower knows of no unpaid
assessment which is due and payable against it or any Subsidiary or any claims
being asserted which could reasonably be expected to have a Material Adverse
Effect, except such thereof as are being contested in good faith and by
appropriate proceedings diligently conducted, and for which adequate reserves
have been set aside in accordance with GAAP.
4.9 Compliance with Applicable Laws.
Neither the Borrower nor any Subsidiary is in default with
respect to any judgment, order, writ, injunction, decree or decision of any
Governmental Authority which default could reasonably be expected to have a
Material Adverse Effect. The Borrower and each Subsidiary is complying in all
material respects with all applicable statutes and regulations, including ERISA,
of all Governmental Authorities, a violation of which could reasonably be
expected to have a Material Adverse Effect.
4.10 Governmental Regulations.
Neither the Borrower nor any Subsidiary is subject to regulation
under the Public Utility Holding Company Borrower Act of 1935, the Federal Power
Act or the Investment Company Act of 1940, and neither the Borrower nor any
Subsidiary is subject to any statute or regulation which prohibits or restricts
the incurrence of Indebtedness
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under the Loan Documents, including, without limitation, statutes or regulations
relative to common or contract carriers or to the sale of electricity, gas,
steam, water, telephone, telegraph or other public utility services.
4.11 Property; Broadcasting Business.
(a) The Borrower and each Subsidiary has good and, except
with respect to FCC licenses which cannot be transferred without the consent of
the applicable Governmental Authority, marketable title to all of its Property,
title to which is material to the Borrower and the Subsidiaries taken as a
whole, subject to no Liens, except Liens in favor of the Administrative Agent
and the Lenders pursuant to the Collateral Documents and Permitted Liens.
(b) The Borrower and the Subsidiaries are the registered
holders of all licenses duly issued by the FCC in respect of all Broadcasting
Stations owned and operated by the Borrower and each Subsidiary. Such licenses
constitute all of the authorizations by the FCC or any other Governmental
Authority necessary for the operation of the business of the Borrower and each
Subsidiary substantially in the manner presently being conducted by it, and such
licenses are validly issued and in full force and effect, unimpaired by any act
or omission by the Borrower or such Subsidiary. To the best of the Borrower's
knowledge, except as set forth in Schedule 4.11(b), neither the Borrower nor any
Subsidiary is a party to any investigation, notice of violation, order or
complaint issued by or before the FCC which could reasonably be expected to have
a Material Adverse Effect. Except for such proceedings that affect the radio
broadcasting industry generally and as set forth in Schedule 4.11(b), there are
no proceedings by or before the FCC, which could in any manner materially
threaten or adversely affect the validity of any of such licenses. Neither the
Borrower nor any Subsidiary has knowledge of a threat of any investigation,
notice of violation, order, complaint or proceeding before the FCC which could
reasonably be expected to have a Material Adverse Effect or has any reason to
believe that any of such licenses will not be renewed in the ordinary course.
4.12 Federal Reserve Regulations; Use of Proceeds.
Neither the Borrower nor any Subsidiary is engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying any Margin Stock. No part of the proceeds
of the Loans or Letters of Credit will be used, directly or indirectly, to
purchase or carry any Margin Stock or for a purpose which violates any law, rule
or regulation of any Governmental Authority, including without limitation the
provisions of Regulations T, U or X of the Board of Governors of the Federal
Reserve System, as amended.
4.13 No Misrepresentation.
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No representation or warranty contained herein and no
certificate or report furnished or to be furnished by the Borrower or any
Subsidiary in connection with the transactions contemplated hereby, contains or
will contain a misstatement of material fact, or, to the best knowledge of the
Borrower or any Subsidiary omits or will omit to state a material fact required
to be stated in order to make the statements herein or therein contained not
misleading in the light of the circumstances under which made.
4.14 Plans.
The Borrower and each Subsidiary have only the Plans listed in
Schedule 4.14. Each Single Employer Plan and, to the best knowledge of the
Borrower, each Multiemployer Plan is in compliance in all material respects with
the applicable provisions of ERISA and the Code, and the Borrower and each
Subsidiary have filed all reports required to be filed by them under ERISA and
the Code with respect to each such Plan. The Borrower and each Subsidiary have
met all material requirements imposed by ERISA and the Code with respect to the
funding of all Plans, including Multiemployer Plans. Since the effective date of
ERISA, there have not been, nor are there now existing, any events or conditions
which would permit any Single Employer Plan or, to the best knowledge of the
Borrower, Multiemployer Plan to be terminated under circumstances which would
cause the Lien provided under Section 4068 of ERISA to attach to the Property of
the Borrower or any Subsidiary. Since the effective date of ERISA, no Reportable
Event which may constitute grounds for the termination of any Single Employer
Plan or, to the best knowledge of the Borrower, Multiemployer Plan under Title
IV of ERISA has occurred and no Single Employer Plan or Multiemployer Plan has
been terminated in whole or in part.
4.15 FCC Matters.
The Borrower and each Subsidiary (i) have duly and timely filed
all filings which are required to be filed by the Borrower and each Subsidiary
under the Communications Act and the rules and regulations of the FCC, the
failure to file of which could reasonably be expected to have a Material Adverse
Effect, and (ii) are in all respects in compliance with the Communications Act,
including, without limitation, the rules and regulations of the FCC relating to
the transmission of radio signals, the failure to comply of which could
reasonably be expected to have a Material Adverse Effect.
4.16 Burdensome Obligations.
Neither the Borrower nor any Subsidiary is a party to or bound
by any franchise, agreement, deed, lease or other instrument, or subject to any
corporate restriction which, in the opinion of the management of the Borrower,
is so unusual or burdensome, in the context of the Borrower's or such
Subsidiary's business, as in the foreseeable future could reasonably be expected
to have a Material Adverse Effect. The
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Borrower does not presently anticipate that future expenditures needed to meet
the provisions of federal or state statutes, orders, rules or regulations will
be so burdensome as to have a Material Adverse Effect.
4.17 Financial Statements.
The Borrower has heretofore delivered to the Lenders a copy of
(i) the annual audited Consolidated (and unaudited Consolidating) Balance Sheets
of the Borrower and its Subsidiaries as of December 31, 1998, together with the
related Consolidated and Consolidating Statements of Operations, Shareholders'
Equity and Cash Flows for the period then ended, and (ii) the unaudited
Consolidated and Consolidating Balance Sheets of the Borrower and its
Subsidiaries as of March 31, 1999, together with the related Consolidated and
Consolidating Statements of Operations for the periods then ended. The foregoing
financial statements fairly present the Consolidated and Consolidating financial
condition and results in the operations of the Borrower and its Subsidiaries as
of the dates and for the periods indicated therein and have been prepared in
conformity with GAAP. Except as reflected in such financial statements or in the
footnotes thereto, neither the Borrower nor any of its Subsidiaries has any
obligation or liability of any kind (whether fixed, accrued, contingent,
unmatured or otherwise) which, in accordance with GAAP, should have been shown
on such financial statements and was not. Since December 31, 1998, the Borrower
and its Subsidiaries have conducted their business only in the ordinary course
(except with respect to the acquisitions of Media Assets permitted by the terms
hereof and except as set forth in the March 31, 1999 financial statements
referred to above), and there has been no Material Adverse Change.
4.18 Environmental Matters.
Except as set forth in Schedule 4.18, neither the Borrower nor
any Subsidiary (i) has received written notice or otherwise learned of any
claim, demand, action, event, condition, report or investigation indicating or
concerning any potential or actual liability which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect arising
in connection with (a) any noncompliance with or violation of the requirements
of any Environmental Law, or (b) the release or threatened release of any toxic
or hazardous waste, substance or constituent, or other substance into the
environment, (ii) to the best knowledge of the Borrower, has any threatened or
actual liability in connection with the release or threatened release of any
toxic or hazardous waste, substance or constituent, or other substance into the
environment which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect, (iii) has received notice of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release or threatened release of any toxic or hazardous waste, substance or
constituent or other substance into the environment for which the Borrower or
any Subsidiary is or may be liable which individually or in the
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aggregate could reasonably be expected to have a Material Adverse Effect, or
(iv) has received notice that the Borrower or any Subsidiary is or may be liable
to any Person under any Environmental Law which individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect. The Borrower and
each Subsidiary is in compliance in all material respects with the financial
responsibility requirements of all Environmental Laws to the extent applicable,
including, without limitation, those contained in 40 C.F.R., parts 264 and 265,
subpart H, and any analogous state law.
4.19 Year 2000.
Any reprogramming required to permit the proper functioning, in
and following the year 2000, of (i) the computer systems of the Borrower and the
Subsidiaries necessary for the conduct of the business of the Borrower and the
Subsidiaries as a whole and (ii) the equipment of the Borrower and the
Subsidiaries necessary for the conduct of the business of the Borrower and the
Subsidiaries as a whole containing embedded microchips (including systems and
equipment supplied by others or with which the Borrower's or the Subsidiaries'
systems interact) and the testing of all such systems and equipment, as so
reprogrammed, will be completed by August 31, 1999. The cost to the Borrower and
the Subsidiaries of such reprogramming and testing and of the reasonably
foreseeable consequences of year 2000 to the Borrower and the Subsidiaries will
not result in a Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Borrower and the Subsidiaries
are and, with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Borrower and the
Subsidiaries to conduct their business without Material Adverse Effect.
5. CONDITIONS OF EFFECTIVENESS AND LENDING
5.1 Effectiveness.
The effectiveness of this Agreement is subject to the prior or
simultaneous fulfillment of the following conditions precedent:
(a) Evidence of Corporate or Other Action. The
Administrative Agent shall have received a certificate, dated the Restatement
Effective Date, of the Secretary or an Assistant Secretary of each Loan Party
(i) attaching a true and complete copy of the resolutions of its Board of
Directors or other authorizing documents and of all documents evidencing all
necessary corporate or other action (in form and substance reasonably
satisfactory to the Administrative Agent) taken by it to authorize the Loan
Documents to which it is a party and the transactions contemplated thereby, (ii)
attaching a true and complete copy of its certificate of incorporation and
by-laws or other
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organizational documents, (iii) setting forth the incumbency of its officer or
officers who may sign such Loan Documents, including therein a signature
specimen of such officer or officers and (iv) attaching a certificate of good
standing, if available, of the Secretary of State of the State of its
incorporation or formation and of each other State in which it is qualified to
do business.
(b) Notes. The Borrower shall have delivered to the
Administrative Agent the Notes, each duly executed on behalf of the Borrower by
an Authorized Signatory thereof.
(c) No Liens. The Administrative Agent shall have received a
certificate of the Borrower, signed by an Authorized Signatory thereof, dated
the Restatement Effective Date, certifying that on the Restatement Effective
Date there exist no Liens on the Collateral other than Permitted Liens.
(d) Subsidiary Guaranty and Borrower Security Agreement. The
Borrower shall have delivered to the Administrative Agent (i) the Subsidiary
Guaranty, dated as of the Restatement Effective Date, duly executed on behalf of
each Subsidiary by an Authorized Signatory thereof, (ii) the Borrower Security
Agreement, dated as of the Restatement Effective Date, duly executed on behalf
of the Borrower by an Authorized Signatory thereof, (iii) one or more share
certificates, representing all of the issued and outstanding Stock of each of
the Subsidiaries, together with undated stock powers, duly executed in blank on
behalf of the Borrower by an Authorized Signatory thereof and bearing an
appropriate signature guarantee in all respects satisfactory to the
Administrative Agent, in respect of each such certificate, (iv) all documents
evidencing intercompany Indebtedness owing to the Borrower or any Subsidiary,
and (v) certificates of insurance in all respects satisfactory to the
Administrative Agent evidencing the insurance required to be maintained pursuant
to Section 7.5(b).
(e) Filing of Financing Statements. The Borrower shall have
executed and delivered to the Administrative Agent such financing statements,
recordations and other documents with respect to the Collateral Documents as the
Administrative Agent or Special Counsel may request for the purpose of
perfecting the Liens granted thereunder. All filing fees and Taxes in connection
with the filing of the Collateral Documents shall have been paid or otherwise
provided for and the Administrative Agent and Special Counsel shall have
received satisfactory evidence thereof.
(f) Existing RC Loans. The Borrower shall have repaid (i)
the outstanding principal amount of all RC Loans under the Original Credit
Agreement (together with any costs associated with the prepayment of Eurodollar
Loans pursuant to the provisions of Section 2.9), and (ii) all accrued interest
and fees under the Original Credit Agreement, as such amounts exist immediately
prior to the effectiveness of this Agreement. To the extent the Borrower borrows
RC Loans hereunder (simultaneously
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55
with the effectiveness of this Agreement) to make any of the payments required
by the previous sentence, the Administrative Agent is authorized to net any
funds payable by or to the Lenders as applicable.
(g) Common Equity Issuance. (i) The Borrower shall have
issued common Stock, on terms and provisions acceptable to the Administrative
Agent and the Lenders (the "Common Equity Issuance"), (ii) the Borrower shall
have received net cash proceeds from the Common Equity Issuance in an amount
equal to or greater than $100 million, and (iii) the Borrower shall have
delivered to the Administrative Agent a certificate of an Authorized Signatory
of the Borrower, dated the Restatement Effective Date, certifying as to the
amount of net cash proceeds that the Borrower received from the Common Equity
Issuance.
(h) Approvals. The Administrative Agent shall have received
evidence reasonably satisfactory to it that all approvals and consents of all
Persons required to be obtained in connection with the consummation of the
transactions contemplated by the Loan Documents have been obtained and that all
required notices have been given and all required waiting periods have expired.
(i) Litigation. There shall be no injunction, writ,
preliminary restraining order or other order of any nature issued by any
Governmental Authority in any respect affecting any Loan Document, or any
transaction contemplated by the Loan Documents and no action or proceeding by or
before any Governmental Authority shall have been commenced and be pending
seeking to prevent or delay any of the foregoing or challenging any term or
provision thereof or seeking any damages in connection therewith, and the
Administrative Agent shall have received a certificate, dated the Restatement
Effective Date and in all respects reasonably satisfactory to the Administrative
Agent, of an Authorized Signatory of the Borrower to the foregoing effect.
(j) Opinion of Counsel to the Borrower and the Subsidiaries.
The Administrative Agent shall have received opinions of counsel to the Borrower
and its Subsidiaries, dated the first Borrowing Date, substantially in the form
of Exhibit E.
(k) Opinion of FCC Counsel to the Borrower and the
Subsidiaries. The Administrative Agent shall have received opinions of special
FCC counsel to the Borrower and its Subsidiaries, dated the first Borrowing
Date, substantially in the form of Exhibit F.
(l) Payment of Fees. The Borrower shall have paid to the
Administrative Agent and the Lenders all fees and expenses which it shall have
agreed to pay, to the extent such fees and expenses have become payable on or
prior to the
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Restatement Effective Date, and shall have paid the reasonable fees and
disbursements of Special Counsel.
(m) Financial Statements and Financial Projections. The
Borrower shall have delivered to the Administrative Agent and the Lenders the
financial statements referred to in Section 4.17 together with such projections
and other information as the Administrative Agent and the Lenders shall
reasonably require, all of which shall be in all material respects satisfactory
to the Administrative Agent and the Lenders.
(n) Subordinated Indenture and Subordinated Indenture
Subsidiary Guaranty. The Administrative Agent shall have received a copy of the
Subordinated Indenture and Subordinated Indenture Subsidiary Guaranty duly
certified by an Authorized Signatory of the Borrower as a true and complete copy
thereof.
(o) Other Documents. The Administrative Agent shall have
received such other documents as the Administrative Agent shall reasonably
require in connection with the effectiveness of this Agreement.
5.2 All Loans and Letters of Credit.
The obligation of the Lenders to make any Loan on a Borrowing Date, and
the obligation of the Issuing Bank to issue a Letter of Credit on a Borrowing
Date, is subject to the satisfaction of the following conditions precedent as of
the date of such Loan or Letter of Credit:
(a) Compliance. On each Borrowing Date and after giving
effect to the Loans or Letter of Credit to be made or issued thereon, (i) the
Loan Parties shall be in compliance with all of the terms, covenants and
conditions of the Loan Documents, (ii) there shall exist no Default or Event of
Default, (iii) the representations and warranties contained in the Loan
Documents shall be true and correct with the same effect as though such
representations and warranties had been made on such Borrowing Date, except as
the context otherwise requires, except as otherwise permitted or contemplated by
this Agreement, and except such matters relating thereto as are indicated in
each Borrowing Request which shall be reasonably satisfactory to the
Administrative Agent and the Required Lenders, and (iv) there shall have
occurred no Material Adverse Change since December 31, 1998. Each borrowing by
the Borrower and each issuance of a Letter of Credit shall constitute a
certification by the Borrower as of the date of such borrowing or issuance that
each of the foregoing matters is true and correct in all respects.
(b) Loan Closings. All documents required by the provisions
of this Agreement to be executed or delivered to the Administrative Agent on or
before the applicable Borrowing Date shall have been executed and shall have
been delivered at the
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office of the Administrative Agent set forth in Section 11.2 on or before such
Borrowing Date.
(c) Borrowing Request or Letter of Credit Request. The
Administrative Agent shall have received a Borrowing Request or a Letter of
Credit Request, as applicable, duly executed by an Authorized Signatory of the
Borrower.
(d) Reimbursement Agreement. In connection with any Letter
of Credit Request, the Issuing Bank shall have received a Reimbursement
Agreement duly executed by an Authorized Signatory of the Borrower.
(e) Approval of Counsel. All legal matters in connection
with the making of each Loan or issuance of such Letter of Credit shall be
reasonably satisfactory to Special Counsel.
(f) Other Documents. The Administrative Agent shall have
received such other documents as the Administrative Agent shall reasonably
request.
6. FINANCIAL COVENANTS
The Borrower covenants and agrees that on and after the Original
Effective Date and until all obligations of the Borrower under the Notes and the
other Loan Documents have been paid in full and all RC Commitments of the
Lenders have been terminated and no obligations of the Administrative Agent, the
Issuing Bank or any of the Lenders exist under any of the Loan Documents, the
Borrower shall:
6.1 Total Leverage Ratio.
Maintain at all times a Total Leverage Ratio not greater than
the applicable ratio set forth below opposite the applicable period set forth
below:
Periods Ratio
------- -----
Restatement Effective Date through
December 31, 2000 6.00:1.00
January 1, 2001 through
June 30, 2001 5.75:1.00
July 1, 2001 through
December 31, 2001 5.50:1.00
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Periods Ratio
------- -----
January 1, 2002 through
June 30, 2002 5.25:1.00
July 1, 2002 through
December 31, 2002 5.00:1.00
January 1, 2003 through
December 31, 2003 4.50:1.00
January 1, 2004
and thereafter 4.00:1.00
6.2 Consolidated Annual Operating Cash Flow to Pro-Forma Debt
Service.
Maintain as at the end of each fiscal quarter a ratio of
Consolidated Annual Operating Cash Flow to Pro-Forma Debt Service not less than
1.10:1.00.
6.3 Consolidated Annual Operating Cash Flow to Interest Expense.
Maintain as at the end of each fiscal quarter during the
applicable periods set forth below a ratio of Consolidated Annual Operating Cash
Flow to Interest Expense not less than the ratio set forth below opposite the
applicable period set forth below:
Periods Ratio
------- -----
Restatement Effective Date through
June 29, 2001 1.75:1.00
June 30, 2001 through
June 29, 2002 2.00:1.00
June 30, 2002 through
June 29, 2003 2.25:1.00
June 30, 2003 and
thereafter 2.50:1.00
6.4 Consolidated Annual Operating Cash Flow to Fixed Charges.
Maintain as at the end of each fiscal quarter a ratio of
Consolidated Annual Operating Cash Flow to Fixed Charges not less than
1.10:1.00.
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7. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that on and after the Original
Effective Date and until all obligations of the Borrower under the Notes and the
other Loan Documents have been paid in full and all RC Commitments have been
terminated and no obligations of the Administrative Agent, the Issuing Bank or
any of the Lenders exist under any of the Loan Documents, the Borrower shall:
7.1 Financial Statements.
Maintain, and cause each Subsidiary to maintain, a standard
system of accounting in accordance with GAAP, and furnish or cause to be
furnished to the Administrative Agent and each Lender:
(a) As soon as available, but in any event within 120 days
after the end of each fiscal year of the Borrower, a copy of the Consolidated
and Consolidating Balance Sheets of the Borrower and its Subsidiaries as at the
end of such fiscal year, together with the related Consolidated Statements of
Shareholders' Equity and Cash Flows and Consolidated and Consolidating
Statements of Operations as of and through the end of such fiscal year, setting
forth in each case, in comparative form, the Consolidated and Consolidating
figures for the preceding fiscal year. The Consolidated Balance Sheet and
Statements of Operations, Shareholders' Equity and Cash Flows shall be certified
without qualification by the Accountants, which certification (i) shall state
that the examination by such Accountants in connection with such Consolidated
financial statements has been made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the accounting
records and such other auditing procedures as were considered necessary in the
circumstances, (ii) shall include the opinion of such Accountants that such
Consolidated financial statements have been prepared in accordance with GAAP in
a manner consistent with prior fiscal periods, except as otherwise specified in
such opinion.
(b) Simultaneously with the delivery of the certified
Consolidated financial statements required by clause (a) above, copies of a
certificate of such Accountants stating that, in making the examination
necessary for their audit of such financial statements for such fiscal year,
nothing came to their attention of an accounting nature that caused them to
believe that the Borrower was not in compliance with the terms, covenants,
provisions, or conditions of this Agreement, including, without limitation,
Sections 6.1, 6.2, 6.3 and 6.4, or, if so, specifying in such certificate all
such instances of noncompliance and the nature and status thereof.
(c) As soon as available, but in any event not later than 60
days after the end of each of the first three quarterly accounting periods in
each fiscal year of the Borrower, a copy of the Consolidated and Consolidating
Balance Sheets of the Borrower
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and its Subsidiaries as at the end of each such quarterly period, together with
the related Consolidated and Consolidating Statements of Operations, for such
period and for the elapsed portion of the fiscal year through such date, setting
forth in each case, in comparative form, the Consolidated and Consolidating
figures for the corresponding periods of the preceding fiscal year, certified by
the Chief Financial Officer of the Borrower (or such other officer acceptable to
the Administrative Agent), as being complete and correct in all material
respects and as presenting fairly the Consolidated and Consolidating financial
condition and the results of operations of each of the Borrower and its
Subsidiaries, subject to normal, non-material year-end adjustments.
(d) Within 60 days after the end of each of the first three
fiscal quarters (120 days after the end of the fourth fiscal quarter) of the
Borrower, a Compliance Certificate as at the end of such fiscal quarter,
certified by the Chief Financial Officer of the Borrower (or such other officer
as shall be acceptable to the Administrative Agent).
(e) Concurrently with the delivery of the financial
statements referred to in Sections 7.1(a) and (c), a profile of each Media
Asset, which shall include, but not be limited to, the call letters and location
of each Broadcasting Station and management's estimate of the fair market value
of each Media Asset and a management's discussion and analysis of such financial
statements, including a summary of all acquisitions and dispositions of Media
Assets and acquisitions of real property that occurred during the period covered
by such financial statements, which shall include a schedule of the
consideration paid in each acquisition and the cash received in each
disposition.
(f) Within 30 days after the beginning of each fiscal year,
an annual Consolidated and Consolidating forecast for the Borrower and its
Subsidiaries for such fiscal year and the following two fiscal years, including
projected Consolidated and Consolidating statements of income of the Borrower
and its Subsidiaries, all in reasonable detail acceptable to the Administrative
Agent; (ii) promptly upon preparation thereof, such other forecasts that the
Borrower or any of its Subsidiaries may prepare and any revisions that may be
made to any forecast previously delivered to the Lenders; and (iii) no later
than 30 days after the end of each fiscal quarter in which there has been a
material deviation from a forecast provided to the Lenders, a certificate of an
Authorized Signatory explaining the deviation and the action, if any, that has
been taken or is proposed to be taken with respect thereto; in each case the
foregoing forecasts shall state all underlying assumptions.
7.2 Certificates; Other Information.
Furnish to the Administrative Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness of the
Borrower or any Subsidiary is declared or shall become due and payable prior to
its stated maturity, or
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called and not paid when due, (ii) a default shall have occurred under any note
(other than the Notes) or the holder of any such note, or other evidence of
Indebtedness, certificate or security evidencing any such Indebtedness or any
obligee with respect to any other Indebtedness of the Borrower or any Subsidiary
has the right to declare any such Indebtedness due and payable prior to its
stated maturity as a result of such default, or (iii) there shall occur and be
continuing a Default or an Event of Default;
(b) Prompt written notice of: (i) any citation, summons,
subpoena, order to show cause or other order naming the Borrower or any
Subsidiary a party to any proceeding before any Governmental Authority which
might have a Material Adverse Effect or which call into question the validity or
enforceability of any of the Loan Documents and include with such notice a copy
of such citation, summons, subpoena, order to show cause or other order, (ii)
the commencement or threat of any action, suit, arbitration proceeding or claim
by, on behalf of or against the Borrower or any Subsidiary, at law or in equity,
before any Governmental Authority, which could reasonably be expected to have a
Material Adverse Effect, (iii) any lapse or other termination of any material
license, permit, franchise or other authorization issued to the Borrower or any
Subsidiary by any Governmental Authority which could reasonably be expected to
have a Material Adverse Effect, (iv) any refusal by any Governmental Authority
to renew or extend any such material license, permit, franchise or other
authorization which could reasonably be expected to have a Material Adverse
Effect, and (v) any dispute between the Borrower or any Subsidiary and any
Governmental Authority, which dispute might have a material adverse effect on
any Media Asset or a Material Adverse Effect;
(c) Promptly upon becoming available, copies of all regular,
periodic or special reports, schedules and other material that the Borrower or
any Subsidiary may now or hereafter be required to file with or deliver to any
securities exchange or the Securities and Exchange Commission, or any other
Governmental Authority succeeding to the functions thereof;
(d) Prompt written notice in the event that (i) the Borrower
or any Commonly Controlled Entity shall receive notice from the Internal Revenue
Service or the Department of Labor that the Borrower or such Commonly Controlled
Entity shall have failed to meet the minimum funding requirements of Section 412
of the Code with respect to a Plan, if applicable, and include therewith a copy
of such notice, or (ii) the Borrower or any Commonly Controlled Entity gives or
is required to give notice to the PBGC of any Reportable Event with respect to a
Plan, or knows that the plan administrator of a Plan has given or is required to
give notice of any such Reportable Event;
(e) With respect to a Single Employer Plan of the Borrower
or any Commonly Controlled Entity, copies of any request for a waiver of the
funding standards
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62
or any extension of the amortization periods required by Sections 303 and 304 of
ERISA or Section 412 of the Code promptly after any such request is submitted to
the Department of Labor or the Internal Revenue Service, as the case may be;
(f) Promptly after the filing thereof, a copy of the annual
report required to be filed pursuant to Section 103 of ERISA in connection with
each Single Employer Plan of the Borrower and each Commonly Controlled Entity
for each plan year, including (i) a statement of the assets and liabilities of
such Plan as of the end of such plan year and statements of changes in fund
balance and in financial position, or a statement of changes in net assets
available for plan benefits, for such plan year, certified by the Accountants
and (ii) an actuarial statement of such Plan applicable to such plan year,
certified by an enrolled actuary of recognized standing reasonably acceptable to
the Administrative Agent and the Required Lenders;
(g) Promptly upon request therefor, such other information
and reports relating to the past, present or future financial condition,
operations, plans and projections of the Borrower or its Subsidiaries as the
Administrative Agent or any other Lender (through the Administrative Agent) may
at any time and from time to time reasonably request;
(h) Promptly after the same are received by the Borrower,
copies of all management letters and similar reports provided to the Borrower or
any Subsidiary by its independent certified public accountants;
(i) Prompt written notice of any material change in the
accounting policies or financial reporting practices of the Borrower or any of
its Subsidiaries; and
(j) Prompt written notice of the occurrence of a Material
Adverse Change or the occurrence of any event or facts or circumstances which
are reasonably likely to result in a Material Adverse Change.
7.3 Legal Existence.
Except as otherwise permitted by Sections 8.3 and 8.7, maintain, and
cause each Subsidiary to maintain, its corporate existence, and maintain its
good standing in the jurisdiction of its incorporation or organization and in
each other jurisdiction in which the failure so to do could reasonably be
expected to have a Material Adverse Effect.
7.4 Taxes.
Pay and discharge when due, and cause each Subsidiary so to do,
all Taxes, assessments and governmental charges, license fees and levies upon or
with respect to the Borrower or such Subsidiary and upon the income, profits and
Property of
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63
the Borrower and the Subsidiaries taken as a whole, which if unpaid, could
reasonably be expected to have a Material Adverse Effect or become a Lien on the
Property of the Borrower or any Subsidiary not permitted under Section 8.2,
unless and to the extent only that such Taxes, assessments, charges, license
fees and levies shall be contested in good faith and by appropriate proceedings
diligently conducted by the Borrower or such Subsidiary and provided that the
Borrower shall give the Administrative Agent prompt notice of such contest and
that such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.5 Insurance and Condemnation.
(a) Liability Insurance. Maintain, and cause each Subsidiary
to maintain, insurance with financially sound insurance carriers on such of its
Property, against at least such risks, and in at least such amounts, as are
customarily insured against by similar businesses and which, in the case of
property insurance, shall be in amounts sufficient to prevent the Borrower or
any Subsidiary from becoming a co-insurer, including, without limitation, public
liability (bodily injury and property damage), fidelity, bonding and workers'
compensation with deductibles not exceeding $25,000 per occurrence, in each case
naming the Administrative Agent as an additional insured under such policies,
and file with the Administrative Agent within five days after request therefor a
detailed list of such insurance then in effect, stating the names of the
carriers thereof, the policy numbers, the insureds thereunder, the amounts of
insurance, dates of expiration thereof, and the Property and risks covered
thereby, together with a certificate of an Authorized Signatory certifying that
in the opinion of such officer such insurance is adequate in nature and amount,
complies with the obligations of the Borrower under this Section 7.5, and is in
full force and effect.
(b) Property Insurance. Maintain such property and other
insurance as is customarily maintained by companies engaged in similar
businesses with deductibles not exceeding $25,000 per occurrence. Promptly upon
request therefor, the Borrower shall deliver or cause to be delivered to the
Administrative Agent originals or duplicate originals of all such policies of
insurance. All such property insurance shall name the Administrative Agent,
under a standard loss payable clause, as sole loss payee in respect of each
claim resulting in a payment under any such insurance policy exceeding $500,000
and shall contain such endorsements as the Administrative Agent shall require.
Provided that no Default or Event of Default shall exist, the Administrative
Agent agrees, promptly upon its receipt thereof, to pay over to the Borrower the
proceeds of any such payment received by the Administrative Agent in its
capacity as Administrative Agent hereunder. The RC Commitments shall be reduced
by an amount equal to any such insurance proceeds not used by the Borrower or
any of its Subsidiaries within 360 days to repair or replace any Property in
respect of which it received property insurance proceeds. If a Default or Event
of Default shall exist, the Borrower, at the request of the Administrative
Agent, shall prepay the Loans with such proceeds in an amount equal to the total
amount
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of such insurance payment and the RC Commitments shall simultaneously be reduced
by an amount equal to such prepayment.
(c) Condemnation Awards. If a Default or Event of Default
shall exist and the Borrower or any of its Subsidiaries shall receive the
proceeds of any condemnation or similar awards, the Borrower shall pay over the
proceeds thereof to the Administrative Agent and, at the election of the
Administrative Agent, such proceeds shall be applied to the prepayment of the
Loans in an amount equal to the total amount of such proceeds. The RC
Commitments shall be reduced by an amount equal to any such proceeds not used by
the Borrower or any of its Subsidiaries within 360 days to repair or replace any
Property in respect of which it received a condemnation or similar award.
7.6 Payment of Indebtedness and Performance of Obligations.
Pay and discharge, and cause each Subsidiary to pay and
discharge, when due all lawful Indebtedness, obligations and claims for labor,
materials and supplies or otherwise which, if unpaid, might (i) have a Material
Adverse Effect, or (ii) become a Lien upon Property of the Borrower or any
Subsidiary not permitted under Section 8.2, unless and to the extent only that
the validity of such Indebtedness (other than Indebtedness under the Loan
Documents), obligation or claim shall be contested in good faith and by
appropriate proceedings diligently conducted by the Borrower or such Subsidiary,
and that any such contested Indebtedness, obligations or claims shall not
constitute, or create, a Lien on any Property of the Borrower or any Subsidiary
not permitted under Section 8.2 senior to the Lien granted to the Administrative
Agent by the Collateral Documents on such Property, and further provided that
the Borrower shall give the Administrative Agent and the Lenders prompt notice
of any such material contest and that such reserve or other appropriate
provision as shall be required by the Accountants in accordance with GAAP shall
have been made therefor.
7.7 Condition of Property.
At all times, maintain, protect and keep in good repair, working
order and condition (ordinary wear and tear excepted), and cause each Subsidiary
so to do, all Property necessary to the operation of the Borrower's or such
Subsidiary's business.
7.8 Observance of Legal Requirements; ERISA; Environmental Laws.
Observe and comply in all respects, and cause each Subsidiary so
to do, with all laws (including ERISA and Environmental Laws), ordinances,
orders, judgments, rules, regulations, certifications, franchises, permits,
licenses, directions and requirements of all Governmental Authorities, which now
or at any time hereafter may be applicable to the Borrower or such Subsidiary, a
violation of which could reasonably be expected to have a Material Adverse
Effect, except such thereof as shall be contested in good faith
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and by appropriate proceedings diligently conducted by the Borrower or such
Subsidiary, and provided that the Borrower shall give the Administrative Agent
and the Lenders prompt notice of such contest and that such reserve or other
appropriate provision as shall be required by the Accountants in accordance with
GAAP shall have been made therefor.
7.9 Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Administrative Agent and each
Lender, or potential assignees and/or participants of the Administrative Agent
or any Lender, to visit the offices of the Borrower and the Subsidiaries on
reasonable advance notice, to inspect any of its Property and examine and make
copies or abstracts from any of its books and records at any reasonable time and
as often as may reasonably be desired, and to discuss the business, operations,
prospects, licenses, Property and financial condition of the Borrower and the
Subsidiaries with the officers thereof and with the Accountants.
7.10 FCC Licenses, Etc.
Maintain and cause each Subsidiary to maintain, in full force
and effect, each main station license issued by the FCC to it for each
Broadcasting Station. The Borrower shall also maintain and cause each Subsidiary
to maintain, in full force and effect, all other material licenses (including,
without limitation, all material auxiliary licenses issued by the FCC),
copyrights, patents, including all licenses, permits, applications, reports,
authorizations and other rights as are necessary for the conduct of its
business, except to the extent that such ownership or right to use shall
terminate as a matter of law or expire as a matter of contractual right through
no action or default by the Borrower or any Subsidiary.
7.11 Subsidiary Guaranty.
Promptly upon the creation or acquisition of any Subsidiary,
cause such Subsidiary to execute and deliver to the Administrative Agent a
supplement to the Subsidiary Guaranty in the form attached thereto, together
with such other documents and opinions of counsel as the Administrative Agent
shall reasonably required in connection therewith.
7.12 Mortgages.
Promptly upon the acquisition by the Borrower or any Subsidiary
of any real property on or after the Restatement Effective Date having a fair
market value at the time of acquisition of (i) $2,000,000 or more or (ii)
$1,000,000 or more (but less than
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$2,000,000) if in the case of this clause (ii) the aggregate fair market value
at the time of acquisition of all such real property acquired by the Borrower
and the Subsidiaries on or after the Restatement Effective Date in respect of
which no mortgage or deed of trust has been executed and delivered to the
Administrative Agent pursuant to this Section 7.12 shall exceed $5,000,000,
execute and deliver, and cause each Subsidiary so to do, a mortgage or deed of
trust with respect to such real property in form and substance satisfactory to
the Administrative Agent, together with such UCC financing statements, surveys,
title insurance policies, environmental reports, opinions and other documents as
the Administrative Agent shall reasonably request in connection therewith.
8. NEGATIVE COVENANTS
The Borrower covenants and agrees that on and after the Original
Effective Date and until all obligations of the Borrower under Notes and the
other Loan Documents have been paid in full and all RC Commitments have been
terminated and no obligations of the Administrative Agent, the Issuing Bank or
any of the Lenders exist under any of the Loan Documents, the Borrower shall
not:
8.1 Borrowing.
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any Subsidiary so to do, except: (i) Indebtedness under
the Loan Documents; (ii) Indebtedness (including Contingent Obligations) of the
Borrower and the Subsidiaries existing on the date hereof as set forth in
Schedule 8.1 and other Indebtedness of the Borrower in an aggregate outstanding
principal amount for all such Indebtedness under this clause (ii) not in excess
of $25,000,000; (iii) Indebtedness of the Borrower and the Subsidiaries
evidenced by the Subordinated Indenture Notes and Subordinated Indenture
Subsidiary Guaranty; (iv) intercompany Indebtedness between the Borrower and its
Subsidiaries; and (v) refinancings of any Indebtedness permitted under clause
(ii) above with other Indebtedness permitted under clause (i) or (ii) above.
8.2 Liens.
Create, incur, assume or suffer to exist, or enter into any
agreement with any third Person agreeing not to create, incur, assume or suffer
to exist, any Lien upon any of its Property, whether now owned or hereafter
acquired, or permit any Subsidiary so to do, except: (i) Liens for Taxes,
assessments or similar charges incurred in the ordinary course of business which
are not delinquent or which are being contested in accordance with Section 7.4,
provided that such Liens are not senior (except to the extent provided by law)
to the Liens granted to the Administrative Agent and the Lenders by the
Collateral Documents, (ii) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations (but not ERISA),
(iii)
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deposits or pledges to secure bids, tenders, contracts (other than contracts for
the payment of money), leases, statutory obligations, surety and appeal bonds
and other obligations of like nature arising in the ordinary course of business,
(iv) zoning ordinances, easements and other similar restrictions affecting real
property which could not reasonably be expected to have a Material Adverse
Effect, (v) the Liens created under the Collateral Documents, (vi) statutory
Liens arising by operation of law such as mechanics' liens incurred in the
ordinary course of business which are not delinquent or which are being
contested in accordance with Section 7.4, (vii) Liens arising out of judgments
or decrees which are being contested in accordance with Section 7.4, provided
that such Liens are subordinate to the Liens granted to the Administrative Agent
and the Lenders by the Collateral Documents and provided further that
enforcement of such Liens is stayed during such contest, (viii) Liens on
Property of the Borrower and the Subsidiaries existing on the date hereof as set
forth in Schedule 8.2, (ix) Liens in connection with the making of deposits in
accordance with Section 8.5(e) and (x) Liens in connection with Indebtedness
permitted under Section 8.1(ii), provided that such Liens extend only to the
Property acquired with such Indebtedness.
8.3 Merger or Acquisition of Property.
Consolidate with, be acquired by, or merge into or with any
Person, or acquire all or substantially all of the Stock or Property of any
Person, or permit any Subsidiary so to do, except:
(a) any wholly-owned Subsidiary may merge with the Borrower
(with the Borrower as survivor) or with another wholly-owned Subsidiary;
(b) upon 30 days' notice to the Administrative Agent, the
Borrower or any wholly-owned Subsidiary may acquire any Media Asset through an
acquisition or merger (with the Borrower or such wholly-owned Subsidiary (or a
Person that becomes a wholly-owned Subsidiary) as the survivor thereof),
provided that (i) if immediately before or after giving effect to any such
acquisition or merger the Total Leverage Ratio exceeds 5.50:1.00 (in such case,
a "Leveraged Acquisition"), the aggregate gross consideration (including capital
expenditures relating to such Leveraged Acquisition that are reasonably
anticipated for the 12 month period following such Leveraged Acquisition) paid
or payable for all Leveraged Acquisitions (including the Leveraged Acquisition
then being contemplated) made during the period commencing on the Restatement
Effective Date and ending through and including the date of the Leveraged
Acquisition then being contemplated shall not exceed $50,000,000, (ii)
immediately before and after giving effect to any such proposed acquisition or
merger, all representations and warranties contained in the Loan Documents shall
be true and correct and no Default or Event of Default shall exist, and (iii)
the Borrower shall have received with respect to each such acquisition or merger
a final order (subject to no appeal) from the FCC (in respect of the acquisition
or merger of a Broadcasting Station) and all other
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similar material orders from all other applicable Governmental Authorities, with
regard to the acquisition or merger, authorizing the applicable transactions, if
required by applicable law, and the Administrative Agent shall have received
true, complete and correct copies, certified by an Authorized Signatory of the
Borrower, of all such orders;
(c) as permitted under Section 8.5; and
(d) the Common Ground Reorganization, provided that (i)
immediately before and after giving effect to the Common Ground Reorganization,
all representations and warranties contained in the Loan Documents shall be true
and correct and no Default or Event of Default shall exist, (ii) the Borrower
shall have received with respect to the Common Ground Reorganization an order
(subject to no pending contest or administrative review) from the FCC (in
respect of each affected Broadcasting Station) and all other similar material
orders from all other applicable Governmental Authorities, with regard to the
Common Ground Reorganization, authorizing the applicable transactions, if
required by applicable law, and the Administrative Agent shall have received
true, complete and correct copies, certified by an Authorized Signatory of the
Borrower, of all such orders, (iii) the Common Ground Collateral Release shall
not have occurred more than five Business Days prior to the consummation of the
Common Ground Reorganization, (iv) within five Business Days after the
consummation of the Common Ground Reorganization, (A) Common Ground
Broadcasting, Inc. and each Subsidiary that receives transferred assets and that
is not then a party to the Subsidiary Guaranty shall become a party to the
Subsidiary Guaranty, and (B) the Borrower and each Subsidiary that receives
transferred assets shall grant a security interest pursuant to the Borrower
Security Agreement or the Subsidiary Guaranty in and to all of the assets
transferred to it, all in the manner required by this Section 8.3, and (v) the
Common Ground Reorganization shall be consummated no later than 90 days
following the Restatement Effective Date.
If the aggregate gross consideration for any such acquisition or
merger permitted by Section 8.3(b) (including capital expenditures relating to
such acquisition or merger that are reasonably anticipated for the 12 month
period following such acquisition or merger) exceeds $10,000,000, (i) the
Borrower shall have delivered to the Administrative Agent and each Lender such
details of such transaction as the Administrative Agent or any Lender (through
the Administrative Agent) shall reasonably request, and (ii) the Borrower shall
have delivered to the Administrative Agent a certificate of an Authorized
Signatory of the Borrower certifying that (A) the Borrower is in pro-forma
compliance with the terms, covenants, provisions, and conditions of this
Agreement, including, without limitation, Sections 6.1, 6.2, 6.3 and 6.4 (and
attaching calculations with respect to Sections 6.1, 6.2, 6.3 and 6.4), and (B)
immediately before and after giving effect to any such acquisition or merger,
all representations and warranties contained in the Loan Documents are true and
correct and no Default or Event of Default exists.
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If the aggregate gross consideration for any such acquisition or
merger permitted by Section 8.3(b) (including capital expenditures relating to
such acquisition or merger that are reasonably anticipated for the 12 month
period following such acquisition or merger) exceeds $20,000,000, the Borrower
shall have delivered to the Administrative Agent and each Lender an independent
appraisal of each Media Asset to be acquired, such appraisal to be in all
respects satisfactory to the Administrative Agent.
Immediately upon the consummation of any acquisition or merger
permitted under Section 8.3(b) or (d), (i) the Borrower shall have delivered to
the Administrative Agent such UCC financing statements and other documents as
the Administrative Agent shall reasonably require in order to grant to the
Administrative Agent a first priority perfected security interest in the Stock
and/or Property, as applicable, of such Media Asset under and pursuant to the
Collateral Documents, subject to no Liens other than Permitted Liens, (ii) if
the Borrower shall have created or acquired a Subsidiary in connection with such
acquisition, such Subsidiary shall have become a party to the Subsidiary
Guaranty and (iii) the Borrower shall have delivered to the Administrative Agent
such opinions and other documents as the Administrative Agent shall reasonably
require in connection therewith.
8.4 Dividends; Purchase of Stock.
Declare or pay any dividends payable in cash or otherwise or
apply any of its Property to the purchase, redemption or other retirement of, or
set apart any sum for the payment of any dividends on, or make any other
distribution by reduction of capital or otherwise in respect of, any of its
Stock (each a "Restricted Payment") or permit any Subsidiary so to do, except
that:
(a) any wholly-owned Subsidiary may declare and pay
dividends to the Borrower or any other wholly-owned Subsidiary from time to
time.
8.5 Investments, Loans, Etc.
At any time, purchase or otherwise acquire, hold or invest in
the Stock of, or any other interest in, any Person, or make any loan or advance
(excluding deposits or pledges permitted under Section 8.2(iii)) to, or enter
into any arrangement for the purpose of providing funds or credit to, or make
any other investment, whether by way of capital contribution or otherwise, in or
with any Person (all of which are sometimes referred to herein as
"Investments"), or permit any Subsidiary so to do, except:
(a) Investments in short-term domestic and eurodollar
certificates of deposit issued by any Lender, or any other commercial bank,
trust company or national banking association incorporated under the laws of the
United States or any State thereof and having undivided capital surplus and
retained earnings exceeding $500,000,000;
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(b) Investments in short-term direct obligations of the
United States of America or agencies thereof which obligations are guaranteed by
the United States of America;
(c) Investments existing on the date hereof as set forth in
Schedule 8.5(c);
(d) Investments to the extent the same are acquisitions
permitted pursuant to Section 8.3;
(e) Investments by the Borrower in the form of deposits or
options made in the ordinary course of business in connection with any proposed
acquisition or acquisitions of Property permitted pursuant to the terms of this
Agreement;
(f) loans and advances to employees for travel and
relocation purposes; and
(g) loans and advances to employees for other valid business
purposes that do not exceed $100,000 in the aggregate at any one time
outstanding;
(h) intercompany Indebtedness permitted pursuant to Section
8.1(iv);
(i) commercial paper or other short term obligations of any
corporation organized under the laws of the United States or any State thereof
whose ratings, at the time of the investment or contractual commitment to invest
therein, from each of ▇▇▇▇▇'▇ and S & P are the highest investment category
granted thereby;
(j) investments in money market funds having a rating from
each of ▇▇▇▇▇'▇ and S & P in the highest investment category granted thereby;
(k) bankers acceptances issued by any commercial bank, trust
company or national banking association referred to in subsection (a) above;
(l) repurchase obligations with respect to any security that
is a direct obligation of, or fully guaranteed by, the United States or any
agency or instrumentality thereof the obligations of which are backed by the
full faith and credit of the United States, in either case entered into with a
commercial bank, trust company or national banking association (acting as
principal) referred to in subsection (a) above; and
(m) repurchase obligations with respect to any security or
whole loan entered into with (i) a commercial bank, trust company or national
banking association (acting as principal) described in subsection (a) above,
(ii) a broker/dealer (acting as principal) registered as a broker or dealer
under Section 15 of the Exchange Act the unsecured short-term debt obligations
of which are rated P-1 by ▇▇▇▇▇'▇ and at least A-1
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by S & P at the time of entering into such repurchase obligation, (iii) an
unrated broker/dealer, acting as principal, that is a wholly-owned subsidiary of
a non-bank or bank holding company the unsecured short-term debt obligations of
which are rated P-1 by ▇▇▇▇▇'▇ and at least A-1 by S & P at the time of
purchase.
8.6 Business Changes.
Engage in any material line of business substantially different
from those lines of business carried on as of the Restatement Effective Date, or
permit any Subsidiary so to do.
8.7 Sale of Property.
Sell, exchange, lease, transfer or otherwise dispose of any
Property to any Person, or permit any Subsidiary so to do, except as permitted
in connection with the Common Ground Reorganization pursuant to the terms and
conditions of Section 8.3 and except for sales, exchanges, leases, transfers or
other dispositions made in the ordinary course of business (which shall not
include the sale or other disposition of all or substantially all of the Stock
or assets of any Media Asset or involve an FCC license of the Borrower or any of
its Subsidiaries), except that, subject to the second to the last paragraph of
this Section 8.7, the Borrower may sell or exchange any Media Asset, provided
that (i) the aggregate gross consideration to be received for all Media Assets
that have been sold or exchanged pursuant to the provisions of this Section
8.7(a) during the one year period ending on the date of the proposed sale of
exchange (including the Media Asset then being contemplated to be sold or
exchanged) shall not exceed $30,000,000, (ii) the aggregate gross consideration
to be received for all Media Assets that have been sold or exchanged pursuant to
the provisions of this Section 8.7(a) during the period commencing on the
Restatement Effective Date and ending through and including the date of the
proposed sale of exchange (including the Media Asset then being contemplated to
be sold or exchanged) shall not exceed $60,000,000, and (iii) immediately before
and after giving effect to the proposed sale or exchange (including any related
change in Indebtedness), all representations and warranties contained in the
Loan Documents shall be true and correct and no Default or Event of Default
shall exist.
If the aggregate gross consideration for any such sale or
exchange permitted under Section 8.7(a) exceeds $10,000,000, (i) the Borrower
shall have delivered to the Administrative Agent and each Lender such details of
such transaction as the Administrative Agent or any Lender (through the
Administrative Agent) shall reasonably request, and (ii) the Borrower shall have
delivered to the Administrative Agent a certificate of an Authorized Signatory
of the Borrower certifying that (A) the Borrower is in pro-forma compliance with
the terms, covenants, provisions, and conditions of this Agreement, including,
without limitation, Sections 6.1, 6.2, 6.3 and 6.4 (and attaching calculations
with respect to Sections 6.1, 6.2, 6.3 and 6.4), and (B)
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immediately before and after giving effect to any such sale or exchange
(including any related change in Indebtedness), all representations and
warranties contained in the Loan Documents are true and correct and no Default
or Event of Default exists. In connection with any such sale or exchange
permitted under Section 8.7(a), (i) the Borrower shall have received fair value
for each Media Asset sold or exchanged and (ii) at least 75% of the
consideration to be received in connection with any such sale shall be in any
combination of like-kind property, cash or cash equivalents.
Upon the sale or disposal of the entire assets of any Subsidiary
as provided in this Section 8.7, the Borrower may liquidate such Subsidiary upon
reasonable prior notice to the Administrative Agent.
8.8 Creation of Subsidiaries.
Create any other Subsidiary, or permit any Subsidiary so to do,
except the Borrower or any Subsidiary may create a wholly-owned Subsidiary,
provided that (i) immediately before and after giving effect to any such
proposed creation, all representations and warranties contained in the Loan
Documents shall be true and correct and no Default or Event of Default shall
exist; (ii) the Borrower shall have delivered to the Administrative Agent such
UCC financing statements and other documents as the Administrative Agent shall
reasonably require in order to grant to the Administrative Agent a first
priority perfected security interest in the Stock and/or Property, as
applicable, of such Subsidiary under and pursuant to the Collateral Documents,
subject to no Liens other than Permitted Liens; (iii) the Subsidiary shall
become a party to the Subsidiary Guaranty and (iv) the Borrower shall have
delivered to the Administrative Agent such opinions and other documents as the
Administrative Agent shall reasonably require in connection therewith.
8.9 Compliance with ERISA.
Adopt any Plan other than those listed in Schedule 4.14 or
permit any Subsidiary so to do, or engage in any "prohibited transaction", as
such term is defined in Section 4975 of the Code or Section 406 of ERISA, with
respect to any Plan, or incur any "accumulated funding deficiency", as such term
is defined in Section 412 of the Code or Section 302 of ERISA, or terminate, or
permit any Commonly Controlled Entity to terminate, any Plan that would result
in any liability of the Borrower or any Commonly Controlled Entity to the PBGC,
or permit the occurrence of any Reportable Event or any other event or condition
that presents a risk of such a termination by the PBGC of any Plan, or withdraw
or effect a partial withdrawal from a Multiemployer Plan, or permit any Commonly
Controlled Entity which is an employer under such a Multiemployer Plan so to do,
if any such withdrawal would result in such withdrawing employer incurring any
withdrawal liability in excess of $250,000.
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8.10 Certificate of Incorporation and By-laws.
Amend or otherwise modify its certificate of incorporation,
bylaws or other organizational documents, or permit any Subsidiary so to do, in
any way that would adversely affect the interests of the Lenders or the Issuing
Bank or the obligations of any Loan Party under any of the Loan Documents.
8.11 Prepayments of Indebtedness.
Prepay or obligate itself to prepay, in whole or in part, any
Indebtedness (other than the Loans) prior to the due date thereof, or permit any
Subsidiary so to do, other than (i) the prepayment by any Subsidiary of
Indebtedness owing by such Subsidiary to the Borrower, (ii) the prepayment of
Indebtedness permitted under Section 8.1(ii) with the proceeds of other
Indebtedness permitted under Section 8.1(i) or (ii) or with the proceeds of
Stock issued by the Borrower pursuant to Section 8.16, (iii) provided that no
Default or Event of Default shall then exist, the prepayment by the Borrower of
Indebtedness incurred by the Borrower in the ordinary course of its business to
any Subsidiary, and (iv) as permitted by Section 8.17.
8.12 Accounting Practice; Fiscal Year.
Make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change its fiscal year from a fiscal
year commencing January 1st and ending December 31st, or permit any of its
Subsidiaries so to do; provided that any Subsidiary may change to a fiscal year
commencing January 1st and ending December 31st.
8.13 Limitation on Upstream Transfers.
Permit or cause any of its Subsidiaries to enter into or agree,
or otherwise be or become subject, to any agreement, contract or other
arrangement (other than this Agreement) with any Person pursuant to the terms of
which (a) such Subsidiary is or would be prohibited from making any advances to
the Borrower or declaring or paying any cash dividends on any class of its Stock
owned directly or indirectly by the Borrower or any of the other Subsidiaries or
from making any other distribution on account of any class of any such Stock
(herein referred to as "Upstream Transfers"), or (b) the declaration or payment
of Upstream Transfers on an annual or cumulative basis is or would be otherwise
limited or restricted.
8.14 Transactions with Affiliates.
Become, or permit any Subsidiary to become, a party to any
transaction with any Affiliate of the Borrower or any Subsidiary (other than a
transaction solely between any wholly-
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owned Subsidiary and either the Borrower or any other wholly-owned Subsidiary)
on a basis less favorable to the Borrower or such Subsidiary in any material
respect than if such transaction were not with an Affiliate of the Borrower or
such Subsidiary.
8.15 Sale and Leaseback.
Enter into any arrangement with any Person, or permit any
Subsidiary so to do, providing for the leasing by the Borrower or such
Subsidiary of Property which has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such Property
or rental obligations of the Borrower or such Subsidiary.
8.16 Stock Issuance.
Issue any additional shares of Stock, or permit any of its
Subsidiaries so to do, except (i) the Borrower may issue shares of its Class A
common Stock and (ii) any Subsidiary may issue shares of its Stock to the
Borrower or any wholly-owned Subsidiary.
8.17 Subordinated Indenture.
Enter into or agree to any amendment, modification or waiver of
any term or condition of the Subordinated Indenture, the Subordinated Indenture
Notes or the Subordinated Indenture Subsidiary Guaranty, or purchase, redeem or
make any payment with respect to Indebtedness under the Subordinated Indenture
Notes or the Subordinated Indenture Subsidiary Guaranty, or permit any of its
Subsidiaries so to do, except (i) the Borrower may make required payments to the
extent expressly permitted pursuant to the subordination terms set forth
therein, provided that all payments required to be made under this Agreement
shall have been made, and (ii) provided that (A) no Default or Event of Default
shall then exist, and (B) the Total Leverage Ratio shall be less than or equal
to 4.50:1.00 after giving effect thereto, the Borrower may prepay the
Subordinated Indenture Notes in an amount not to exceed $50,000,000 plus any
premium associated with such prepayment (such premium not to exceed $5,000,000).
8.18 Federal Reserve Regulations.
Own, or permit any of its Subsidiaries to own, Margin Stock in
excess of 25% (or such greater or lesser percentage as is provided in the
exclusions from the definition of "Indirectly Secured" contained in Regulation U
in effect at the time of the making of each Loan or the issuance of each Letter
of Credit) of the value of the assets of (i) the Borrower, or (ii) the Borrower
and the Subsidiaries on a Consolidated basis.
8.19 Change in Name; Nature of Business.
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Change its legal name or make any material change in the nature
of its business, taken as a whole, as conducted on the Restatement Effective
Date, or permit any of its Subsidiaries so to do, except that any Subsidiary may
change its name provided that the Subsidiary (i) shall provide to the
Administrative Agent 30 days prior written notice of such name change, (ii) no
fewer than 10 days prior to the name change, shall have taken all steps
necessary or reasonably required by the Administrative Agent to maintain the
perfection of the Security Interest under the Subsidiary Guaranty and (iii)
shall deliver to the Administrative Agent such certificates and other documents
as the Administrative Agent shall reasonably require.
8.20 Lease Obligations.
Create or suffer to exist any obligations for the payment of
rent by the Borrower or any Subsidiary for any Property under lease or agreement
to lease, or permit any of its Subsidiaries so to do, except for:
(a) leases in existence on the Restatement Effective Date
and any renewal, extension or refinancing thereof;
(b) operating leases in the ordinary course of business
entered into or assumed after the Restatement Effective Date as a result of a
merger or acquisition permitted under Section 8.3; and
(c) capital leases other than those permitted under clauses
(a) and (b) of this Section, entered into after the Restatement Effective Date
to finance the acquisition of equipment to the extent the Indebtedness evidenced
by such capital leases is permitted under Section 8.1.
9. DEFAULT
9.1 Events of Default.
The following shall each constitute an "Event of Default"
hereunder:
(a) The failure of the Borrower to pay any installment of
principal on any Note or any reimbursement payment in respect of a Letter of
Credit on the date when due and payable; or
(b) The failure of the Borrower to pay any installment of
interest or any other fees or expenses payable hereunder or under or in
connection with any other Loan Documents within three Business Days of the date
when due and payable; or
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(c) The use by the Borrower of the proceeds of any Loan or
Letter of Credit in a manner inconsistent with or in violation of Section 2.7;
or
(d) The failure of the Borrower to observe or perform any
covenant or agreement contained in Section 6, Section 7.3, 7.5, 7.10 or 7.11, or
Section 8; or
(e) The failure of the Borrower to observe or perform any
other term, covenant, or agreement contained in this Agreement and such failure
shall have continued unremedied for a period of 30 days after the Borrower shall
have obtained knowledge thereof; or
(f) Any representation or warranty of any Loan Party (or of
any officer on its behalf) made in any Loan Document or in any certificate,
report, opinion (other than an opinion of counsel) or other document delivered
or to be delivered pursuant to any Loan Document, shall prove to have been
incorrect or misleading (whether because of misstatement or omission) in any
material respect when made; or
(g) Any obligation of the Borrower or any Subsidiary (other
than its obligations under the Loan Documents), whether as principal, guarantor,
surety or other obligor, for the payment or purchase of any Indebtedness or
operating lease(s) (i) shall become or shall be declared to be due and payable
prior to the expressed maturity thereof, or (ii) shall not be paid or purchased
when due or within any grace period for the payment or purchase thereof, or
(iii) the holder of any such obligation(s) in excess of $500,000 in the
aggregate shall have the right to declare such obligation(s) due and payable or
require the purchase thereof prior to the expressed maturity thereof; or
(h) The Borrower or any Subsidiary shall (i) except as
permitted by Sections 8.3 and 8.7, suspend or discontinue its business, or (ii)
make an assignment for the benefit of creditors, or (iii) generally not be
paying its debts as such debts become due, or (iv) admit in writing its
inability to pay its debts as they become due, or (v) file a voluntary petition
in bankruptcy, or (vi) become insolvent (however such insolvency shall be
evidenced), or (vii) file any petition or answer seeking for itself any
reorganization, arrangement, composition, readjustment of debt, liquidation or
dissolution or similar relief under any present or future statute, law or
regulation of any jurisdiction, or (viii) petition or apply to any tribunal for
any receiver, custodian or any trustee for any substantial part of its Property,
or (ix) be the subject of any such proceeding filed against it which remains
undismissed for a period of 60 days, or (x) file any answer admitting or not
contesting the material allegations of any such petition filed against it or of
any order, judgment or decree approving such petition in any such proceeding, or
(xi) seek, approve, consent to, or acquiesce in any such proceeding, or in the
appointment of any trustee, receiver, custodian, liquidator, or fiscal agent for
it, or any substantial part of its Property, or an order is entered appointing
any such trustee, receiver, custodian, liquidator or fiscal agent and such order
remains in effect for 60 days,
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or (xii) except as permitted by Sections 8.3 and 8.7, take any formal action for
the purpose of effecting any of the foregoing or looking to the liquidation or
dissolution of the Borrower or such Subsidiary; or
(i) An order for relief is entered under the United States
bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Borrower or any Subsidiary a bankrupt or
insolvent, or (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of or in
respect of the Borrower or any Subsidiary under the United States bankruptcy
laws or any other applicable Federal or state law, or (iii) appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Borrower or any Subsidiary or of any substantial part
of the Property thereof, or (iv) ordering the winding up or liquidation of the
affairs of the Borrower or any Subsidiary, and any such decree or order
continues unstayed and in effect for a period of 60 days; or
(j) Any judgments or decrees against the Borrower or its
Subsidiaries (to the extent not covered by independent third-party insurance as
to which the insurer does not dispute coverage) aggregating in excess of
$500,000 for all such parties shall remain unpaid, unstayed on appeal,
undischarged, unbonded or undismissed for a period of 30 days; or
(k) The occurrence of an Event of Default under and as
defined in any Collateral Document or any Reimbursement Agreement; or
(l) Any of the Loan Documents or the Assumption Agreement
shall cease, for any reason, to be in full force and effect, or any Loan Party
shall so assert in writing or shall disavow its obligations thereunder; or
(m) The FCC or any other Governmental Authority revokes or
fails to renew any license, permit or franchise of the Borrower or any of its
Subsidiaries, or the Borrower or any of its Subsidiaries for any reason loses
any license, permit or franchise, or the Borrower or any of its Subsidiaries
suffers the imposition of any restraining order, escrow, suspension or impound
of funds in connection with any proceeding (judicial or administrative) with
respect to any license, permit or franchise, to the extent such revocation,
failure to renew, loss or imposition has a Material Adverse Effect; or
(n) The occurrence of a Material Adverse Change; or
(o) A Change of Control shall occur.
Upon the occurrence of an Event of Default or at any time thereafter
during the continuance thereof, (a) if such event is an Event of Default
specified in clauses (h) or (i) above, the RC Commitments and the Letter of
Credit Commitment shall immediately and
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automatically terminate and the Loans, all accrued and unpaid interest thereon
and all other amounts owing under the Loan Documents shall immediately become
due and payable, and the Administrative Agent may, and upon the direction of the
Required Lenders shall, exercise any and all remedies and other rights provided
pursuant to the Loan Documents and (b) if such event is any other Event of
Default, any or all of the following actions may be taken: (i) with the consent
of the Required Lenders, the Administrative Agent may, and upon the direction of
the Required Lenders shall, by notice to the Borrower, declare the RC
Commitments and the Letter of Credit Commitment to be terminated whereupon the
RC Commitments and the Letter of Credit Commitment shall immediately terminate,
and (ii) with the consent of the Required Lenders, the Administrative Agent may,
and upon the direction of the Required Lenders shall, by notice of default to
the Borrower, declare the Loans, all accrued and unpaid interest thereon and all
other amounts owing under the Loan Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable, and the
Administrative Agent may, and upon the direction of the Required Lenders shall,
exercise any and all remedies and other rights provided pursuant to the Loan
Documents. Except as otherwise provided in this Section 9.1, presentment,
demand, protest and all other notices of any kind are hereby expressly waived to
the extent permitted by applicable law. The Borrower hereby further expressly
waives and covenants not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, to the extent permitted by applicable law, now or at
any time hereafter in force, which might delay, prevent or otherwise impede the
performance or enforcement of any of the Loan Documents. In the event that the
Administrative Agent shall fail or refuse so to proceed, the Issuing Bank and
each Lender shall be entitled to take such action as the Required Lenders shall
deem appropriate to enforce its rights under the Loan Documents.
In the event that the RC Commitments or the Letter of Credit Commitment
shall have been terminated or all of the Notes shall have been declared due and
payable pursuant to the provisions of this Section 9.1, (i) the Borrower shall
forthwith deposit an amount equal to the Letter of Credit Exposure in a cash
collateral account with and under the sole dominion and control of the
Administrative Agent and (ii) the Lenders and the Issuing Bank agree, among
themselves, that any funds received in respect of the Loan Documents from or on
behalf of the Borrower by any of the Lenders or the Issuing Bank (except funds
received by any Lender or the Issuing Bank as a result of a purchase pursuant to
the provisions of Section 11.9) shall be remitted to the Administrative Agent,
and shall be applied by the Administrative Agent in payment of the Loans, the
Reimbursement Obligations and the obligations of the Borrower under the Loan
Documents in the following manner and order: (1) first, to reimburse the
Administrative Agent, the Issuing Bank and the Lenders for any expenses due from
the Borrower pursuant to the provisions of Section 11.5; (2) second, to the
payment of the Commitment Fee and Letter of Credit Fee, pro rata according to
the RC Commitment Percentage of each Lender; (3) third, to the payment of any
other fees, expenses or amounts (other than
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the principal of and interest on the Notes, the Reimbursement Obligations and
any obligations to any Lender (and any Affiliate of any Lender) arising out of
any Interest Rate Protection Arrangement) payable by the Borrower to the
Administrative Agent, the Issuing Bank or any of the Lenders under the Loan
Documents; (4) fourth, to the payment, pro rata according to the outstanding
Loans of each Lender and outstanding Reimbursement Obligations including any
interest by a Lender therein), of interest due thereon; (5) fifth, on a pro rata
basis, to the payment of (A) the principal outstanding on the Notes, pro rata
according to each Lender's outstanding Loans, (B) the principal outstandings on
the Reimbursement Obligations, pro rata according to the Issuing Bank's and each
other Lender's interest therein, and (C) the obligations of the Borrower to the
Lenders (and any Affiliate of any Lender) arising out of any Interest Rate
Protection Arrangements; and (6) sixth, any remaining funds shall be paid to
whomsoever shall be entitled thereto or as a court of competent jurisdiction
shall direct.
10. THE ADMINISTRATIVE AGENT
10.1 Appointment.
Each Lender hereby irrevocably designates and appoints BNY as
the Administrative Agent of such Lender under and in connection with the Loan
Documents. Each such Lender hereby irrevocably authorizes BNY as the
Administrative Agent for such Lender to take such action on its behalf under the
provisions of the Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
the Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement or any of the other Loan Documents, the Administrative Agent shall
have no duties or responsibilities, except those expressly set forth herein or
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into the Loan Documents or otherwise exist against the Administrative
Agent.
10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties under the
Loan Documents by or through agents or attorneys-in-fact and shall be entitled
to rely upon the advice of counsel concerning all matters pertaining to such
duties.
10.3 Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with the Loan
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Documents (except for its own gross negligence or willful misconduct), or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any officer thereof
contained in the Loan Documents or in any certificate, report, statement or
other document referred to or provided for in, or received by the Administrative
Agent under or in connection with, the Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any of
the Loan Documents or for any failure of the Borrower or any other Person to
perform its obligations hereunder or thereunder. The Administrative Agent shall
be under no obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, the Loan Documents, or to inspect the properties, books or records of the
Borrower or any Subsidiary. The Administrative Agent shall have no liability or
responsibility whatsoever to the Borrower or any other Person as a consequence
of any failure or delay in performance, or any breach, by the Issuing Bank or
any Lender of any of its obligations under any of the Loan Documents.
10.4 Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by it. Subject to Section 11.7, the Administrative Agent may
treat each Lender as the holder of all of the interests of such Lender in its RC
Commitment and in its Loans and Notes. The Administrative Agent shall have no
duty to examine or pass upon the validity, effectiveness or genuineness of the
Loan Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Administrative Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under the Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under the Loan Documents in accordance with a request of the Required
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
10.5 Notice of Default.
The Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
it has
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received written notice thereof from the Issuing Bank, a Lender or the Borrower.
In the event that the Administrative Agent receives such a notice, it shall
promptly give notice thereof to the Issuer and the Lenders. The Administrative
Agent shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided, however, that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem to be in the best interests of the Lenders.
10.6 Non-Reliance.
Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Administrative Agent hereinafter, including any review of
the affairs of the Borrower or the Subsidiaries, shall be deemed to constitute
any representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
evaluation of and investigation into the business, operations, Property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to enter into this Agreement. Each Lender
also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, evaluations and decisions in taking or not taking action under
this Agreement or any of the Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, Property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
Property, financial and other condition or creditworthiness of the Borrower or
its Subsidiaries which may come into the possession of the Administrative Agent
or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7 Indemnification.
Each Lender agrees to indemnify the Administrative Agent in its
capacity as such (to the extent not promptly reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower or any other Loan
Party to do so), ratably according to its Credit Exposure at such time, from and
against any and all liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses
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or disbursements of any kind whatsoever including, without limitation, any
amounts paid to the Lenders (through the Administrative Agent) by the Borrower
pursuant to the terms hereof, that are subsequently rescinded or avoided, or
must otherwise be restored or returned) which may at any time (including,
without limitation, at any time following the payment of the Notes) be imposed
on, incurred by or asserted against the Administrative Agent in any way relating
to or arising out of this Agreement, the other Loan Documents or any other
documents contemplated by or referred to herein or the transactions contemplated
hereby or any action taken or omitted to be taken by the Administrative Agent
under or in connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting directly and primarily from
the gross negligence or willful misconduct of the Administrative Agent. The
agreements in this Section 10.7 shall survive the payment of the Notes and all
other amounts payable under the Loan Documents.
10.8 Administrative Agent in its Individual Capacity.
BNY and its Affiliates, may make loans to, accept deposits from,
issue letters of credit for the account of and generally engage in any kind of
business with, the Borrower and its Subsidiaries as though BNY were not the
Administrative Agent. With respect to the RC Commitment made by BNY and each
Note issued to BNY, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it was not the Administrative Agent or the Issuing
Bank, and the terms "Lender" and "Lenders" shall in each case include BNY.
10.9 Successor.
If at any time the Administrative Agent deems it advisable, in
its sole discretion, it may submit to each of the Lenders a written notification
of its resignation as Administrative Agent under the Loan Documents, such
resignation to be effective on the later to occur of (i) the thirtieth day after
the date of such notice and (ii) the date upon which any successor
Administrative Agent, in accordance with the provisions of this Section 10.9,
shall have accepted in writing its appointment as such successor Administrative
Agent. Upon any such resignation of the Administrative Agent, the Required
Lenders shall have the right to appoint from among the Lenders a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed by the Required Lenders and accepted such appointment within 30 days
after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which successor Administrative Agent shall be a
commercial bank organized under the laws of the United States of America or of
any State thereof and having a
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combined capital and surplus of at least $100,000,000. Upon the acceptance of
any appointment as Administrative Agent 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's rights, powers,
privileges and duties as Administrative Agent under the Loan Documents shall be
terminated. The Borrower and the Lenders shall execute such documents as shall
be necessary to effect such appointment. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of Section 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under the Loan Documents. If at any time hereunder
there shall not be a duly appointed and acting Administrative Agent, the
Borrower agrees to make each payment due under the Loan Documents directly to
the Persons entitled thereto during such time.
10.10 Updating Exhibits and Schedules.
The Administrative Agent is hereby authorized and directed from
time to time to (i) amend Exhibit A to reflect the RC Commitments of each Lender
as of the date of each assignment pursuant to Section 11.7 and, in connection
therewith, the Lending Offices and address for notices of each assignee
"Lender", (ii) amend Schedule 1.1(L) to reflect any change of address of which
the Administrative Agent has received written notice pursuant to Section 11.2,
and (iii) in each such case, to send a copy thereof to each party hereto.
10.11 The Lead Arranger and Agents.
The Lead Arranger, the Documentation Agent and the Co-Agents
shall have no duties or obligations under the Loan Documents in their respective
capacities as Lead Arranger, Documentation Agent and Co-Agents. The Lead
Arranger, the Documentation Agent and the Co-Agents shall be entitled to the
same protections, indemnities and rights, and subject to the same standards with
respect to their actions, inactions and duties, as the Administrative Agent.
11. MISCELLANEOUS
11.1 Amendments and Waivers.
With the written consent of the Required Lenders, which consent
may be transmitted by telecopier, the Administrative Agent and the appropriate
Loan Parties may, from time to time, enter into written amendments, supplements
or modifications of the Loan Documents and, with the consent of the Required
Lenders, the Administrative Agent on behalf of the Lenders may execute and
deliver to any such parties a written
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instrument waiving or consenting to the departure from, on such terms and
conditions as the Administrative Agent may specify in such instrument, any of
the requirements of the Loan Documents or any Default or Event of Default and
its consequences; provided, however, that:
(a) no such amendment, supplement, modification, waiver or
consent shall, without the written consent of all of the Lenders, (i) increase
the RC Commitments (other than pursuant to Section 2.4(d)) or the Letter of
Credit Commitment, (ii) extend the Maturity Date or the RC Commitment
Termination Date, (iii) extend the date or decrease the amount of any mandatory
reduction of the RC Commitments pursuant to Section 2.4(b)(i), (iv) decrease the
interest rate, extend the time, forgive or change the pro rata method of payment
of interest or principal on or applicable to any Note or Reimbursement
Obligation, (v) decrease the amount, extend the time, forgive or change the pro
rata method of payment of the Commitment Fee or the Letter of Credit Fee, (vi)
release all or any part of the Collateral or any Subsidiary Guaranty except in
connection with a permitted sale or other permitted disposition of the
Collateral or the applicable Subsidiary Guarantor, as the case may be, or to the
extent that the Administrative Agent shall be required or permitted to do so
under the terms and provisions of the Loan Documents, (vii) change the
definition of Required Lenders, (viii) change the sharing provisions among the
Lenders, (ix) change the several nature of the obligations of the Lenders to
make Loans and participate in Letters of Credit, or (x) change the provisions of
Sections 2.9, 2.10, 2.11, 2.13, 2.14, 11.1, 11.7(a) or 11.11;
(b) without the written consent of the Administrative Agent,
no such amendment, supplement, modification or waiver shall amend, modify or
waive any provision of Section 10 or otherwise change any of the rights or
obligations of the Administrative Agent under the Loan Documents; and
(c) without the written consent of the Issuing Bank, no such
amendment, supplement, modification or waiver shall amend, modify or waive any
provision relating to the Issuing Bank, the Letter of Credit Commitment or the
Letters of Credit or otherwise change any of the rights or obligations of the
Issuing Bank hereunder or under the Loan Documents.
Any such amendment, supplement, modification or waiver shall
apply equally to each of the Lenders and shall be binding upon the parties to
the applicable agreement, the Lenders, the Administrative Agent, the Issuing
Bank and all future holders of the Notes and the Reimbursement Obligations. In
the case of any waiver, the parties to the applicable agreement, the Lenders,
the Administrative Agent, and the Issuing Bank shall be restored to their former
position and rights under the Loan Documents to the extent provided for in such
waiver, and any Default or Event of Default waived shall not extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
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Notwithstanding the foregoing and in connection with the
consummation of the Common Ground Reorganization, the Administrative Agent may
release Common Ground Broadcasting, Inc. and ▇▇▇▇▇ Broadcasting, Inc. and
certain of their respective assets from the Subsidiary Guaranty (the "Common
Ground Collateral Release") upon the receipt by the Administrative Agent of a
written notice from the Borrower stating that the Common Ground Reorganization
will be consummated within the following five Business Days.
11.2 Notices.
Except as otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made (i) when delivered by hand, (ii) one
Business Day after having been sent by overnight courier service, (iii) five
Business Days after having been deposited in the mail, first-class postage
prepaid, or (iv) in the case of telecopier notice, when sent and transmission
confirmed (which may include electronic confirmation), addressed as follows in
the case of the Borrower, the Administrative Agent and the Issuing Bank, and as
set forth in Schedule 1.1(L) hereto in the case of each of the Lenders, or to
such other addresses as to which the Administrative Agent may be hereafter
notified by the respective parties hereto or any future holders of the Notes:
The Borrower:
Salem Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇,
Vice President and
Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Salem Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Block, Esq.,
Secretary
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ (ext. 106)
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Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent, the Issuing Bank and/or BNY:
The Bank of New York
Communications, Publishing & Entertainment Division
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Assistant Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to, in the case of all Borrowing Requests and Letter of Credit
Requests, prepayment notices under Section 2.5(a) and conversion notices under
Section 2.8, and to the attention of, in the case of all fundings by the
Lenders:
The Bank of New York, as Administrative Agent
Agency Function Administration
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇ (or 6366/6367)
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent, the Issuing Bank or the Lenders pursuant to Section 2.3,
2.4, 2.5, 2.8 or 2.18 shall not be effective until received.
11.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part
of the Administrative Agent, the Issuing Bank or any Lender, any right, remedy,
power or privilege under any Loan Document shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, remedy, power or
privilege under any Loan Document preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges under the Loan Documents are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties.
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All representations and warranties made hereunder and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement, the Notes
and the other Loan Documents.
11.5 Payment of Expenses and Taxes.
The Borrower agrees, promptly upon presentation of a statement
or invoice therefor, and whether or not any Loan is made or Letter of Credit is
issued, (i) to pay or reimburse the Administrative Agent and the Arranger for
all their out-of-pocket reasonable costs and expenses incurred in connection
with the development, preparation, execution and syndication of, and any
amendment, waiver, consent, supplement or modification to, the Loan Documents,
any documents prepared in connection therewith and the consummation of the
transactions contemplated hereby and thereby, whether such Loan Documents or any
such other documents are executed and whether the transactions contemplated
thereby are consummated, including, without limitation, the reasonable fees and
disbursements of Special Counsel, (ii) to pay or reimburse the Administrative
Agent, the Issuing Bank, the Arranger and the Lenders for all of their
respective reasonable costs and expenses incurred in connection with the
workout, enforcement or preservation of any rights under the Loan Documents and
any such documents, including, without limitation, reasonable fees and
disbursements of counsel (including the allocated cost of internal counsel) to
the Administrative Agent, the Issuing Bank, the Arranger and the Lenders
including, without limitation, reasonable expenses of the Administrative Agent,
the Issuing Bank, the Arranger and the Lenders in connection with or
attributable to commercial finance examiners, accountants, investment banks and
environmental consultants, (iii) to pay, indemnify, and hold each Lender, the
Administrative Agent, the Issuing Bank and the Arranger harmless from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other Taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, any of the Loan Documents and any such other documents, and (iv) to
pay, indemnify and hold each Lender, the Administrative Agent, the Issuing Bank
and the Arranger and each of their respective officers, directors, employees and
agents harmless from and against any and all other liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable counsel fees and disbursements (including the allocated
cost of internal counsel)) with respect to the execution, delivery, enforcement
and performance of the Loan Documents or the use of the proceeds of the Loans
and Letters of Credit hereunder (all the foregoing, collectively, the
"Indemnified Liabilities") and, if and to the extent that the foregoing
indemnity may be unenforceable for any reason, the Borrower agrees to make the
maximum payment permitted under applicable law; provided, however, that the
Borrower
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shall have no obligation hereunder to pay Indemnified Liabilities to the
Administrative Agent, the Issuing Bank, the Arranger or any Lender to the extent
arising directly and primarily from the gross negligence or willful misconduct
of the Administrative Agent, the Issuing Bank, the Arranger or such Lender, as
the case may be. The agreements in this Section 11.5 shall survive the
termination of the RC Commitments and the payment of the Notes and all other
amounts payable hereunder.
11.6 Lending Offices.
Subject to Section 2.17(b), each Lender shall have the right at
any time and from time to time to transfer any Loan to a different office of
such Lender, provided that such Lender shall promptly notify the Administrative
Agent and the Borrower of any such change of office. Such office shall thereupon
become such Lender's Lending Office.
11.7 Successors and Assigns.
(a) This Agreement, the Notes and the other Loan Documents
to which the Borrower is a party shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Administrative Agent, the Issuing Bank, all
future holders of the Notes and their respective successors and assigns, except
that the Borrower may not assign, delegate or transfer any of its rights or
obligations under this Agreement, the Notes and the Loan Documents to which the
Borrower is a party without the prior written consent of each Lender.
(b) Each Lender shall have the right at any time, upon
written notice to the Administrative Agent of its intent to do so, to sell or
assign (each an "Assignment") all or any part of its Loans, its RC Commitment
and its Notes, on a pro rata basis to one or more of the other Lenders (or, with
the written consent of the Issuing Bank, such consent not to be unreasonably
withheld or delayed, to affiliates of such Lender or such other Lenders) or,
with the written consent of Administrative Agent and the Issuing Bank (such
consents not to be unreasonably withheld or delayed), to any other bank,
insurance company, pension fund, mutual fund or other financial institution,
provided that (i) each such partial Assignment shall be in a minimum aggregate
amount of $5,000,000 (unless otherwise consented to by the Borrower) or, in the
case of any assignment pursuant to Section 2.4(d), $1,000,000, (ii) the parties
to each such Assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption Agreement along with a fee (the "Assignment Fee") of
$3,500 with respect to the Assignment made under this Agreement and (iii) no
such assignment may be made to the Borrower or to any Affiliate of the Borrower.
Upon receipt of each such duly executed Assignment and Assumption Agreement
together with the Assignment Fee therefor in compliance with the provisions
hereof, the Administrative Agent shall (x) record the same and signify its
acceptance thereof by executing two copies of such Assignment and Assumption
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89
Agreement in the appropriate place and delivering one copy to the assignor and
one copy to the assignee and (y) request the Borrower to execute and deliver (1)
to such assignee one or more Notes, in an aggregate principal amount equal to
the Loans assigned to, and RC Commitments assumed by, such assignee and (2) to
such assignor one or more Notes, in an aggregate principal amount equal to the
balance of such assignor Lender's Loans and RC Commitment, if any, in each case
against receipt of such assignor Lender's existing Notes. The Borrower agrees
that it shall, upon each such request of the Administrative Agent, execute and
deliver such new Notes at its own cost and expense. Upon such delivery,
acceptance and recording by the Administrative Agent, from and after the
effective date specified in such Assignment and Assumption Agreement, the
assignee thereunder shall be a party hereto and shall for all purposes of this
Agreement and the other Loan Documents be deemed a "Lender" and, to the extent
provided in such Assignment and Assumption Agreement, the assignor Lender
thereunder shall be released from its obligations under this Agreement and the
other Loan Documents.
(c) Each Lender may grant participations in all or any part
of its Loans, its Notes or its RC Commitment to any other bank, insurance
company, pension fund, mutual fund, financial institution or other entity,
provided that no such participant shall have any right to require such Lender to
take or omit to take any action under any Loan Document except any action which
would require the consent of all Lenders pursuant to Section 11.1. The Borrower
hereby acknowledges and agrees that any such participant shall for purposes of
Sections 2.9, 11.5, 11.9 and 11.11 be deemed to be a "Lender".
(d) No Lender shall, as between and among the Borrower, the
Administrative Agent, the Issuing Bank, and such Lender, be relieved of any of
its obligations under the Loan Documents as a result of any Assignment or
granting of a participation in, all or any part of its Loans, its RC Commitment
or its Notes, except that a Lender shall be relieved of its obligations to the
extent of any Assignment of all or any part of its Loans, its RC Commitment or
its Notes pursuant to subsection (b) above.
(e) Notwithstanding anything to the contrary contained in
this Section 11.7, any Lender may at any time assign all or any portion of its
rights under the Loan Documents to a Federal Reserve Bank. No such assignment
shall release such Lender from its obligations thereunder.
11.8 Counterparts.
This Agreement and each of the other Loan Documents (other than
the Notes) may be executed by one or more of the parties to this Agreement or to
such other Loan Document, as the case may be, on any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same agreement. It shall not be necessary in making proof
of any Loan Document to produce or account for more than one counterpart signed
by the party to be charged. Any of the
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90
parties to this Agreement and the other Loan Documents may rely on signatures of
such parties hereto and thereto which are transmitted by telecopier or other
electronic means as fully as if originally signed. A set of the copies of this
Agreement and each of the other Loan Documents signed by all the parties shall
be lodged with each of the Borrower and the Administrative Agent.
11.9 Adjustments; Set-off.
(a) If any Lender (a "benefited Lender") shall at any time
receive any payment of all or any part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 9.1 (h) or (i), or otherwise) in a greater proportion than any such
payment to and collateral received by any other Lender, if any, in respect of
such other Lender's Loans, or interest thereon, such benefited Lender shall
notify the Administrative Agent and shall purchase for cash from the other
Lenders such portion of each such other Lender's Loans, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds thereof,
as shall be necessary to cause such benefited Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest, unless the benefitted Lender is required to pay
interest on the amount of the excess payment to be returned, in which case the
other Lenders shall pay their pro rata share of such interest. The Borrower
agrees that each Lender so purchasing a portion of another Lender's Loans may
exercise all rights of payment (including, without limitation, rights of
set-off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and at any time during the continuance of
an Event of Default, each Lender shall have the right, without prior notice to
any Loan Party, any such notice being expressly waived by each such Loan Party
to the extent permitted by applicable law, to set off and apply against any
indebtedness, whether matured or unmatured, of such Loan Party to such Lender,
any amount owing from such Lender to such Loan Party, at, or at any time after,
the happening of any of the above-mentioned events. To the extent permitted by
applicable law, the aforesaid right of set-off may be exercised by such Lender
against each Loan Party or against any trustee in bankruptcy, custodian, debtor
in possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of such Loan Party, or against anyone else
claiming through or against such Loan Party or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Lender
prior to the making, filing or issuance, or service upon such Lender of, or
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91
of notice of, any such petition, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance of
execution, subpoena, order or warrant. Promptly after any such set-off and
application made by a Lender against a Loan Party, such Lender shall notify such
Loan Party and the Administrative Agent, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
11.10 No Third Party Beneficiary.
This Agreement is among the Borrower, the Lenders, the
Administrative Agent, the Issuing Bank and the Arranger and no other Person is
intended to or shall have any rights hereunder or shall be permitted to rely
hereon.
11.11 Indemnity.
(a) The Borrower agrees to indemnify and hold harmless each
of the Administrative Agent, the Issuing Bank, the Arranger, each Lender and
each of their respective officers, directors, employees and agents (each an
"Indemnified Party") from and against any loss, cost, liability, damage or
expense (including the reasonable fees and out-of-pocket expenses of counsel to
each such Indemnified Party, including all local counsel hired by any such
counsel) incurred by each such Indemnified Party in investigating, preparing
for, defending against, or providing evidence, producing documents or taking any
other action in respect of, any claim, commenced or threatened litigation,
administrative proceeding or investigation under any federal securities law or
any other statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact of the Borrower or
any Subsidiary in any document or schedule executed or filed with the Securities
and Exchange Commission or any other Governmental Authority by or on behalf of
the Borrower or any Subsidiary, (ii) any omission or alleged omission to state
any material fact required to be stated in such document or schedule, or
necessary to make the statements made therein, in light of the circumstances
under which made, not misleading, (iii) any of the Loan Documents, the
transactions contemplated hereby or thereby or any acts, practices or omissions
or alleged acts, practices or omissions of the Borrower or any of its agents
relating to the use of the proceeds of any or all Letters of Credit or Loans
which are alleged to be in violation of Section 2.7, or in violation of any
federal securities law or of any other statute, regulation or other law of any
jurisdiction applicable thereto, or (iv) any acquisition or proposed acquisition
by the Borrower or any Subsidiary of all or a portion of the Stock, or all or a
portion of the assets, of any Person, in each case whether or not any
Indemnified Party is a party thereto.
(b) In addition to the indemnity provided under Section
11.11(a), the Borrower agrees to defend, indemnify and hold harmless each
Indemnified Party from
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92
and against any loss, cost, liability, fine, penalties, damage or expense
(including the reasonable fees and out-of-pocket expenses of counsel to each
such Indemnified Party, including all local counsel hired by any such counsel)
suffered or incurred by each such Indemnified Party, pertaining to any release
or threatened release of a reportable quantity of any hazardous substance or
hazardous waste at any Property of the Borrower or any of its Subsidiaries (a
"Hazardous Discharge"), including, but not limited to, claims of any
Governmental Authority or any third Person, whether arising under or on account
of any Environmental Law or tort, contract or common law, including, without
limitation, the assertion of any Lien thereunder, with respect to any Hazardous
Discharge, the presence of any hazardous substances or hazardous wastes
affecting any Property of the Borrower or any of its Subsidiaries, whether or
not the same originates or engages from such Property or any contiguous real
estate, including any loss of value of such Property as a result of the
foregoing. The Borrower's obligations under this Section 11.11(b) shall arise
upon the discovery of any Hazardous Discharge at such Property, whether or not
any Governmental Authority or any other Person has taken or threatened any
action in connection with the presence of any hazardous substances or hazardous
wastes.
(c) The indemnities set forth herein shall be in addition to
any other obligations or liabilities of the Borrower to the Indemnified Parties
hereunder or at common law or otherwise, and shall survive any termination of
this Agreement, the expiration of the RC Commitments and the payment of all
indebtedness of the Borrower hereunder and under the other Loan Documents,
provided that the Borrower shall have no obligation under this Section 11.11 to
an Indemnified Party with respect to any of the foregoing to the extent arising
directly and primarily out of the gross negligence or willful misconduct of such
Indemnified Party.
11.12 Governing Law.
This Agreement, the Notes and the other Loan Documents and the
rights and obligations of the parties under this Agreement, the Notes and the
other Loan Documents shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York, without regard to principles
of conflict of laws.
11.13 Headings.
Section headings have been inserted herein and in the other Loan
Documents for convenience only and shall not be construed to be a part hereof or
thereof.
11.14 Severability.
Every provision of this Agreement and the other Loan Documents
is intended to be severable, and if any term or provision hereof or thereof
shall be invalid, illegal or unenforceable for any reason, the validity,
legality and enforceability of the
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93
remaining provisions hereof or thereof shall not be affected or impaired
thereby, and any invalidity, illegality or unenforceability in any jurisdiction
shall not affect the validity, legality or enforceability of any such term or
provision in any other jurisdiction.
11.15 Integration.
All exhibits and schedules to this Agreement shall be deemed to
be a part of this Agreement or the applicable Loan Document, as the case may be.
Except for agreements between the Borrower and the Administrative Agent, the
Issuing Bank and the Arranger with respect to certain fees, this Agreement and
the other Loan Documents embody the entire agreement and understanding among the
Borrower, the Administrative Agent, the Issuing Bank, the Arranger and the
Lenders with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings among the Borrower, the Administrative
Agent, the Issuing Bank, the Arranger and the Lenders with respect to the
subject matter hereof and thereof.
11.16 Limitation of Liability.
No claim may be made by the Borrower, any of its Subsidiaries,
any other Loan Party, any Lender or other Person against the Administrative
Agent, the Issuing Bank, any Lender, the Arranger, or any directors, officers,
employees, or agents of any of them, for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by any Loan Document, or any act, omission or event occurring in connection
therewith, and each of the Borrower, its Subsidiaries, such other Loan Party,
any such Lender or other Person hereby waives, releases and agrees not to ▇▇▇
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
11.17 Consent to Jurisdiction.
The Borrower hereby irrevocably submits to the jurisdiction of
any New York State or Federal Court sitting in the City of New York over any
suit, action or proceeding arising out of or relating to the Loan Documents. The
Borrower hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such a court and any claim that any
such suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. The Borrower hereby agrees that a final judgment in any such
suit, action or proceeding brought in such a court, after all appropriate
appeals, shall be conclusive and binding upon it.
11.18 Service of Process.
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94
The Borrower hereby agrees that process may be served in any
suit, action, counterclaim or proceeding of the nature referred to in Section
11.17 by mailing copies thereof by registered or certified mail, postage
prepaid, return receipt requested, to the address of the Borrower set forth in
Section 11.2 or to any other address of which the Borrower shall have given
written notice to the Administrative Agent. The Borrower hereby agrees that such
service, to the extent permitted by applicable law (i) shall be deemed in every
respect effective service of process upon it in any such suit, action,
counterclaim or proceeding, and (ii) shall to the fullest extent enforceable by
law, be taken and held to be valid personal service upon and personal delivery
to it.
11.19 No Limitation on Service or Suit.
Nothing in the Loan Documents or any modification, waiver, or
amendment thereto shall affect the right of the Administrative Agent, the
Issuing Bank or any Lender to serve process in any manner permitted by law or
limit the right of the Administrative Agent, the Issuing Bank or any Lender to
bring proceedings against the Borrower in the courts of any jurisdiction or
jurisdictions.
11.20 WAIVER OF TRIAL BY JURY.
THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER
OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREIN. FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE LENDERS, OR COUNSEL TO THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE LENDERS, HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE
LENDERS WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER
OF RIGHT TO JURY TRIAL PROVISION. THE BORROWER ACKNOWLEDGES THAT THE
ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS HAVE BEEN INDUCED TO
ENTER INTO THE LOAN DOCUMENTS BY, INTER ALIA, THE PROVISIONS OF THIS SECTION.
11.21 Confidentiality.
The Administrative Agent, the Issuing Bank and the Lenders each
agree that, without the prior written consent of the Borrower, it will not
disclose the terms of this Agreement or any material confidential information
with respect to the Borrower, or any of its Subsidiaries which is furnished
pursuant to this Agreement to any Person
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95
except (i) its accountants, attorneys and other advisors who have a need to know
such information or its Affiliates, and in each case who agree to be bound by
the provisions of this Section 11.21, (ii) to the extent such information is
requested to be disclosed to any regulatory or administrative body or commission
to whose jurisdiction the Administrative Agent, the Issuing Bank or such Lender
is subject, (iii) to the extent such information is requested or required to be
disclosed by subpoena or similar process of applicable law or regulation, (iv)
to the extent the Borrower has previously disclosed such information publicly or
such information is otherwise in the public domain (except by virtue of a breach
by the Administrative Agent, the Issuing Bank or such Lender of its obligations
under this Section 11.21) at the time of disclosure, (v) such information which
is disclosed in connection with any litigation or dispute between the
Administrative Agent, the Issuing Bank or such Lender and any Loan Party
concerning this Agreement, any other Loan Document, or any instrument or
document executed or delivered in connection herewith or therewith, (vi) such
information which was in the possession of such Person or such Person's
Affiliates without the obligation of confidentiality prior to the Administrative
Agent, the Issuing Bank or such Lender furnishing it to such Person, and (vii)
in connection with a prospective assignment, grant of a participation interest
or other transfer by a Lender of any of its interest in this Agreement or the
Notes, provided that the Person to whom such information is disclosed shall
agree to be bound by the provisions of this Section 11.21.
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96
SALEM COMMUNICATIONS CORPORATION
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE BANK OF NEW YORK,
in its individual capacity,
as Issuing Bank and as
Administration Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
97
SALEM COMMUNICATIONS CORPORATION
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
BANK OF AMERICA NT&SA,
in its individual capacity
and as Documentation Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
98
SALEM COMMUNICATIONS CORPORATION
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
BANKBOSTON, N.A. ,
in its individual capacity
and as a Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
99
SALEM COMMUNICATIONS CORPORATION
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
FLEET BANK, N.A.,
in its individual capacity
and as a Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
100
SALEM COMMUNICATIONS CORPORATION
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.,
in its individual capacity
and as a Co-Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
101
SALEM COMMUNICATIONS CORPORATION
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THE BANK OF NOVA SCOTIA
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
102
SALEM COMMUNICATIONS CORPORATION
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
FIRST HAWAIIAN BANK
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
103
SALEM EXHIBIT A
LIST OF RC COMMITMENTS
RC RC Commitment
Bank Commitment Percentage
---- ---------- -------------
The Bank of New York $________ ___%
[LENDER] $________ ___%
TOTAL $150,000,000 100%
============ ===
104
SALEM EXHIBIT B
FORM OF RC NOTE
June ___, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FOR VALUE RECEIVED, on the Maturity Date, SALEM COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Borrower"), hereby promises to pay to
the order of _______________________ (the "Lender"), at the office of The Bank
of New York, as Administrative Agent (the "Administrative Agent"), located at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ or at such other place as the
Administrative Agent may specify from time to time, in lawful money of the
United States of America, the unpaid principal amount of the RC Loans made by
the Lender to the Borrower, payable in the amounts and at the times set forth in
the Agreement (as hereinafter defined).
This RC Note shall bear interest from the date hereof on the unpaid
balance hereof payable on the dates and at the rate or rates provided for in the
First Amended and Restated Credit Agreement, dated as of June __, 1999, by and
among the Borrower, the Lenders party thereto, Bank of America NT&SA, as
Documentation Agent, BankBoston, N.A., Fleet Bank, N.A. and Union Bank of
California, N.A., as Co-Agents and the Administrative Agent (as the same may be
amended, modified or supplemented from time to time, the "Agreement").
Capitalized terms used herein which are defined in the Agreement shall have the
meanings therein defined. In no event shall the interest rate payable in respect
hereof exceed the Highest Lawful Rate.
This RC Note is one of the RC Notes referred to in the Agreement is
subject to the terms, set forth in the Agreement and is entitled to the benefits
set forth in the Loan Documents. The principal of this RC Note is prepayable in
the amounts and under the circumstances, and its maturity is subject to
acceleration upon the terms, set forth in the Agreement. Except as otherwise
expressly provided in the Agreement, if any payment on this RC Note becomes due
and payable on a day which is not a Business Day the maturity thereof shall be
extended to the next Business Day, and interest shall be payable at the
applicable rate or rates specified in the Agreement during such extension
period.
Presentment for payment, demand, notice of dishonor, protest, notice of
protest and all other demands and notices in connection with the delivery,
performance and enforcement of this RC Note are hereby waived, except as
specifically otherwise provided in the Agreement.
This RC Note is being delivered in, is intended to be performed in,
shall be construed and interpreted in accordance with, and be governed by the
internal laws of, the State of New York without regard to principles of conflict
of laws.
105
This RC Note may be amended only by an instrument in writing executed
pursuant to the provisions of Section 11.1 of the Agreement.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
106
SCHEDULE TO RC NOTE
Type of RC Interest Interest
Loan (ABR or Borrowing Principal Rate (if Period (if Unpaid
Eurodollar or Amount of paid or Eurodollar Eurodollar Principal Notation
Date Loan) Conversion RC Loan prepaid Loan) Loan) Amount Made By
---- ------------ ---------- --------- --------- ---------- ---------- --------- ---------
107
SALEM EXHIBIT C
FORM OF BORROWING REQUEST
[DATE]
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President
and
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Agency Function Administration
Re: First Amended and Restated Credit Agreement, dated as of June
__, 1999, by and among Salem Communications Corporation, the
Lenders party thereto, The Bank of New York, as Administrative
Agent, Bank of America NT&SA, as Documentation Agent, and
BankBoston, N.A., Fleet Bank, N.A. and Union Bank of California,
N.A., as Co-Agents (as the same may be amended, modified or
supplemented from time to time, the "Agreement")
Capitalized terms used herein which are defined in the Agreement shall
have the meanings therein defined.
Pursuant to section 2.3 of the Agreement, the Borrower hereby gives
notice of its intention to borrow RC Loans in an aggregate principal amount of
$________, on ___________, which borrowing shall consist of the following RC
Loan(s):
Type of RC Loan
(Eurodollar Interest Period
or ABR) Amount (for Eurodollar Loan)
--------------- ------ ---------------------
(1) $
(2) $
108
Immediately after giving effect to the RC Loans and Letters of Credit to
be made and issued on the Borrowing Date set forth above, the Total Leverage
Ratio will be ____: 1.00, as shown on Exhibit I attached hereto.
The Borrower hereby certifies that on the date hereof and on the
Borrowing Date set forth above, and after giving effect to the RC Loan(s)
requested hereby:
(a) The Borrower is and shall be in compliance with all of the
terms, covenants and conditions of the Agreement and the other Loan Documents.
(b) There exists and there shall exist no Default or Event of
Default under the Agreement.
(c) The proceeds of such RC Loans will be used in accordance with
section 2.7 of the Agreement.
(d) Each of the representations and warranties contained in the Loan
Documents which is required to be made on such Borrowing Date is and shall be
true and correct.
IN WITNESS WHEREOF, the Borrower has caused this certificate to be
executed by its duly authorized officer as of the date and year first written
above.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
- 2 -
109
EXHIBIT I
Calculation of Total Leverage Ratio
110
SALEM EXHIBIT D
FORM OF LETTER OF CREDIT REQUEST
[DATE]
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President
and
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Agency Function Administration
Re: First Amended and Restated Credit Agreement, dated as of May __,
1999, by and among Salem Communications Corporation, the Lenders
party thereto, The Bank of New York, as Administrative Agent,
and Bank of America NT&SA, as Documentation Agent, and
BankBoston, N.A., Fleet Bank, N.A. and Union Bank of California,
N.A., as Co-Agents (as the same may be amended, modified or
supplemented from time to time, the "Agreement")
Capitalized terms used herein which are defined in the Agreement shall
have the meanings therein defined.
Pursuant to section 2.18 of the Agreement, the Borrower hereby requests
the Issuing Bank to issue Letter(s) of Credit in an aggregate principal amount
of $_____, on ________________, in accordance with the information annexed
hereto.
Immediately after giving effect to the RC Loans and Letters of Credit to
be made and issued on the Borrowing Date set forth above, the Total Leverage
Ratio will be ______:1.00, as shown on Exhibit I attached hereto.
The Borrower hereby certifies that on the date hereof and on the
Borrowing Date set forth above, and after giving effect to the Letters of Credit
requested hereby:
111
(a) The Borrower is and shall be in compliance with all of the
terms, covenants and conditions of the Agreement and the other Loan Documents.
(b) There exists and there shall exist no Default or Event of
Default under the Agreement.
(c) The proceeds of such Letters of Credit will be used in
accordance with section 2.7 of the Agreement.
(d) Each of the representations and warranties contained in the Loan
Documents which is required to be made on such Borrowing Date is and shall be
true and correct.
IN WITNESS WHEREOF, the Borrower has caused this certificate to be
executed by its duly authorized officer as of the date and year first written
above.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
112
LETTER OF CREDIT INFORMATION
1. Name of Beneficiary: ______________________________.
2. Address of Beneficiary to which Letter of Credit will be sent:
-----------------------------------------------------------------------.
3. Conditions under which a drawing may be made (specify any required
documentation):
-----------------------------------------------------------------------.
4. Maximum amount to be available under such Letter of Credit:
$____________.
5. Requested date of issuance: _______________.
6. Requested date of expiration: _______________.
113
EXHIBIT I
Calculation of Total Leverage Ratio
114
SALEM EXHIBIT G
FORM OF COMPLIANCE CERTIFICATE
[DATE]
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Vice President
Reference is made to the First Amended and Restated Credit
Agreement, dated as of June __, 1999, by and among Salem Communications
Corporation, the Lenders party thereto, The Bank of New York, as Administrative
Agent, Bank of America NT&SA, as Documentation Agent, and BankBoston, N.A.,
Fleet Bank, N.A. and Union Bank of California, N.A., as Co-Agents (as the same
may be amended, modified or supplemented from time to time, the "Agreement").
Capitalized terms used herein which are defined in the Agreement shall have the
meanings therein defined.
There exists no violation of any of the terms or provisions of
the Loan Documents, or the occurrence of any condition or event which would
constitute a Default or Event of Default, except ____________.
The Total Leverage Ratio as of _________ for the four fiscal
quarter period ended __________ is ____:1.00, as determined on Exhibit I
attached hereto.
The ratio of Consolidated Annual Operating Cash Flow to
Pro-Forma Debt Service as of __________ is ___:1.00, as determined on Exhibit I
attached hereto.
The ratio of Consolidated Annual Operating Cash Flow to Interest
Expense as of __________ is ___:1.00, as determined on Exhibit I attached
hereto.
The ratio of Consolidated Annual Operating Cash Flow to Fixed
Charges as of __________ is ___:1.00, as determined on Exhibit I attached
hereto.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
115
EXHIBIT I
Calculation of Total Leverage Ratio
Calculation of Ratio of
Consolidated Annual Operating Cash Flow
to Pro-Forma Debt Service
Calculation of Ratio of
Consolidated Annual Operating Cash Flow
to Interest Expense
Calculation of Ratio of
Consolidated Annual Operating Cash Flow
to Fixed Charges
116
SALEM EXHIBIT H
FORM OF FIRST AMENDED AND RESTATED BORROWER SECURITY AGREEMENT
FIRST AMENDED AND RESTATED BORROWER SECURITY AGREEMENT (as the same may
be amended, supplemented or otherwise modified from time to time, this
"Agreement"), dated as of June __, 1999, by and between SALEM COMMUNICATIONS
CORPORATION, a Delaware corporation (the "Borrower"), and THE BANK OF NEW YORK
(the "Administrative Agent"), in its capacity as Administrative Agent for the
Lenders under the Credit Agreement referred to below and the Rate Protection
Lenders as defined herein.
RECITALS
A. This Agreement amends and restates the Borrower Security
Agreement, dated as of September 25, 1997, by and between Salem Communications
Corporation, a California corporation ("Salem California"), and the
Administrative Agent (as amended to the date hereof, the "Original Security
Agreement"). On March 31, 1999, Salem California merged into Salem Delaware with
Salem Delaware as the survivor. Pursuant to the terms and conditions of Consent
No. 3, Salem Delaware entered into the Assumption Agreement whereby Salem
Delaware, among other things, assumed all of the obligations of Salem California
under the Loan Documents (including, without limitation, the Original Security
Agreement).
B. This Agreement is intended solely as an amendment of, and
contemporaneous restatement of, the terms and conditions of the Original
Security Agreement and is not intended, and should not be construed in any way,
to extinguish or terminate the Obligations or the Security Interests granted
under the Original Security Agreement.
C. Reference is made to the First Amended and Restated Credit
Agreement, dated as of June __, 1999, by and among the Borrower, the Lenders
party thereto, the Administrative Agent, Bank of America NT&SA, as Documentation
Agent, and BankBoston, N.A., Fleet Bank, N.A. and Union Bank of California,
N.A., as Co-Agents (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), which Credit Agreement
amends and restates the Credit Agreement, dated as of September 25, 1997, by and
among Salem California, the lenders party thereto, Bank of America NT&SA, as
Documentation Agent, and The Bank of New York, as Administrative Agent, as
amended and modified by Amendment No. 1 and Consent No. 1, dated as of August 5,
1998, Amendment No. 2 and Consent No. 2, dated as of January 22, 1999, Consent
No. 3, dated as of March 31, 1999, and Amendment No. 3 and Consent No. 4, dated
as of April 23, 1999 (as so amended, the "Original Credit Agreement").
D. It is a condition precedent to the effectiveness of the Credit
Agreement and the making of all Loans and all other extensions of credit under
the Credit Agreement that the Borrower shall have executed and delivered this
Agreement.
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E. For convenience, this Agreement is dated as of June __, 1999,
and references to certain matters relating to the period prior thereto have been
deleted.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the
Administrative Agent hereby agree as follows:
1. Defined Terms
(a) Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
(b) When used in this Agreement, the following capitalized
terms shall have the respective meanings ascribed thereto as follows:
"Collateral": as defined in Section 2.
"Equity Interest": (i) with respect to a corporation, the
capital stock thereof, (ii) with respect to a partnership, a partnership
interest therein, all rights of a partner in such partnership, whether arising
under the partnership agreement of such partnership or otherwise; (iii) with
respect to a limited liability company, a membership interest therein, all
rights of a member of such limited liability company, whether arising under the
limited liability company agreement of such limited liability company or
otherwise; (iv) with respect to any other firm, association, trust, business
enterprise or other entity, any equity interest therein, any interest therein
which entitles the holder thereof to share in the revenue, income, earnings or
losses thereof or to vote or otherwise participate in any election of one or
more members of the Managing Person thereof, and (v) all warrants and options in
respect of any of the foregoing and all other securities which are convertible
or exchangeable therefor.
"Event of Default": as defined in Section 6.
"Financing Statements": the UCC financing statements executed by
the Borrower and delivered pursuant to the Credit Agreement.
"Grants of Security Interests": collectively, the Grant of
Security Interest (Patents) and the Grant of Security Interest (Trademarks), in
the form of Annexes A-1 and A-2 hereto, respectively, in each case appropriately
completed and signed by the Borrower.
"NYUCC": the UCC as in effect in the State of New York on the
date hereof.
"Obligations": all of the obligations and liabilities of the
Borrower under the Loan Documents and under each Interest Rate Protection
Arrangement entered into by the Borrower with a Rate Protection Lender, in each
case whether fixed, contingent, now existing or hereafter arising, created,
assumed, incurred or acquired, as such obligations and liabilities may be
amended, increased, modified, renewed, refinanced by the Administrative Agent
and the Lenders, refunded or extended from time to time.
118
"Office Location": as defined in Section 3(a).
"Patents": all patents issued under the laws of the United
States of America and all patent applications filed with the United States
Patent and Trademark Office, and all of the rights associated with each of the
foregoing.
"Proceeds": as defined in the NYUCC, together with (i) all
dividends, distributions and income on and in respect of all of the Securities
and Instruments and all other rights and benefits in respect thereof, and (ii)
with respect to the Patents and Trademarks, all renewals thereof, all proceeds
of infringement suits, all rights to ▇▇▇ for infringement, all license
royalties, all reissues, divisions, continuations, extensions and continuations
in part thereof.
"Rate Protection Lenders": collectively, the Lenders and any
affiliates of the Lenders which from time to time enter or have entered into
Interest Rate Protection Arrangements with the Borrower.
"Registrations": (i) patents issued under the laws of the United
States of America, (ii) patent applications filed with the United States Patent
and Trademark Office, and (iii) all registered trademarks.
"Trademarks": (i) all rights under the laws of the United States
of America, and each State thereof, to trademarks, together with all
registrations thereof, applications therefor and all of the rights associated
therewith, and (ii) the goodwill of the Borrower's business symbolized by
registered trademarks.
"UCC": with respect to any jurisdiction, Articles 1, 8 and 9 of
the Uniform Commercial Code as from time to time in effect in such jurisdiction.
(c) When used in this Agreement, the following capitalized
terms shall have the respective meanings ascribed thereto in the NYUCC:
"Account", "Certificated Security", "Chattel Paper", "Document", "Equipment",
"Fixture", "General Intangible", "Instruction", "Instrument", "Inventory",
"Issuer", "Secured Party", "Security", "Security Interest" and "Uncertificated
Security".
2. Grant of Security Interest
(a) To secure the prompt and complete payment, observance
and performance of the Obligations, the Borrower hereby grants to the
Administrative Agent, for its benefit and the ratable benefit of the Lenders,
the Issuing Bank and the Rate Protection Lenders, a Security Interest in and to
all of the Borrower's right, title and interest in and to all: Accounts, Chattel
Paper, Documents, Equipment, Fixtures, General Intangibles, Instruments,
including, without limitation, Instruments evidencing intercompany Indebtedness,
Inventory, Patents, Trademarks, Equity Interests in each Person which now is or
may hereafter become a Subsidiary of the Borrower, whether or not evidenced by a
Security, and all Proceeds of all of the foregoing, in each case whether now
owned or existing or hereafter arising or acquired, and including, without
limitation, all licenses, approvals, permits and other authorizations issued by
the FCC, including
119
the Proceeds of any sale or other disposition thereof, in each case to the
extent that a security interest therein is not prohibited by law, provided that
to the extent that a security interest therein is now so prohibited and to the
extent that such security interest at any time hereafter shall no longer be so
prohibited, then such security interest shall automatically and without any
further action attach and become fully effective at that time (giving effect to
any retroactive effect to any change in applicable law or regulation)
(collectively, the "Collateral").
3. Representations and Warranties
The Borrower hereby represents and warrants to the
Administrative Agent as follows:
(a) Chief Executive Office. As of the date hereof, the
Borrower's place of business or, if the Borrower has more than one place of
business, its chief executive office, is, and has been continuously for the
immediately preceding 5 month period, located at the address set forth for
notices to the Borrower contained in the Credit Agreement (the "Office
Location"). The Borrower has not changed its legal name during the six year
period immediately preceding the date hereof.
(b) Information. As of the date hereof, all of the
information set forth on each of the Schedules hereto is true, complete and
correct.
(c) Security Interest. This Agreement, together with the
delivery to the Administrative Agent of the Certificated Securities constituting
Collateral and the continuous possession thereof by the Administrative Agent in
the State of New York, creates a continuing "enforceable" Security Interest in
the Collateral in favor of the Administrative Agent. Upon (i) the presentation
for filing of the Financing Statements at the respective offices listed thereon
together with the appropriate filing fee therefor, (ii) the delivery to the
Administrative Agent of the Instruments and the Certificated Securities
constituting the Collateral, and (iii) the registration, in accordance with
Article 8 of the NYUCC, of the Security Interest granted hereby on the books of
each Person which is an Issuer of an Uncertificated Security constituting the
Collateral or the agreement by such Person to comply with Instructions
originated by the Administrative Agent with respect to such Uncertificated
Securities without further consent by the Borrower, and (iv) the filing of the
Grants of Security Interests in the United States Patent and Trademark Office
with respect to Patents, Registrations, and Trademarks, (A) such Security
Interest shall be perfected, and (B) assuming that the Administrative Agent does
not have "notice of any adverse claim" within the meaning of Article 8 of the
NYUCC, the Administrative Agent shall be a "protected purchaser", within the
meaning of such Article, with respect to the Collateral consisting of
Securities.
(d) Absence of Liens. There are no Liens upon the Collateral
other than Permitted Liens, if any.
(e) Equity Interests. The Equity Interests listed on
Schedule 3(e) hereto constitute, as of the date hereof, all of the Equity
Interests in each Subsidiary in which the Borrower has any right, title or
interest, and each such Equity Interest issued by a corporate
120
Issuer has been duly authorized, validly issued and fully paid for, and is
non-assessable. As of the Effective Date, except as set forth on Schedule 3(e),
(i) no Subsidiary of the Borrower has issued any securities convertible into, or
options or warrants for, any common or preferred equity securities thereof and
(ii) there are no agreements, voting trusts or understandings binding upon the
Borrower or any of its Subsidiaries with respect to the voting securities of any
of such Subsidiary or affecting in any manner the sale, pledge, assignment or
other disposition thereof, including any right of first refusal, option,
redemption, call or other right with respect thereto, whether similar or
dissimilar to any of the foregoing.
(f) Chattel Paper, Documents and Instruments. The Chattel
Paper, Documents and Instruments listed on Schedule 3(f) hereto constitute, as
of the date hereof, all of the Chattel Paper, Documents and Instruments which
constitute the Collateral, and, to the best of the Borrower's knowledge, all
such Chattel Paper, Documents and Instruments have been duly authorized, issued
and delivered, and constitute the legal, valid, binding and enforceable
obligations of the respective makers thereof.
(g) Accounts. As of the date hereof, all records concerning
any Account constituting the Collateral are located at its Office Location, and
no such Account is evidenced by a promissory note or other instrument.
(h) Equipment and Inventory. Except for Equipment and
Inventory in transit with common carriers, the Borrower has exclusive possession
and control of all Equipment and Inventory constituting the Collateral, all of
which is as of the date hereof and has been continuously for the 5 month period
immediately preceding the date hereof, located at one or more of the places
listed on Schedule 3(h) hereto.
(i) Patents and Trademarks. The Borrower has no
Registrations relating to Patents other than those listed on Schedule 3(i)
hereto, and each such Registration is subsisting and is not invalid or
unenforceable, in whole or in part, except to the extent that the
unenforceability thereof could not reasonably be expected to have a material
adverse effect on the value of the Patents taken as a whole. The Borrower has no
Registrations relating to Trademarks other than those listed on Schedule 3(i)
hereto, and each such Registration is subsisting and has not been adjudged
invalid or unenforceable, in whole or in part, except to the extent that the
unenforceability thereof could not reasonably be expected to have a material
adverse effect on the value of the Trademarks taken as a whole. To the best of
the Borrower's knowledge, each Patent and Trademark constituting Collateral is
valid and enforceable. Except for Permitted Liens, the Borrower is the sole and
exclusive owner of the entire and unencumbered right, title and interest in and
to each of the Patents and Trademarks constituting Collateral, free and clear of
all Liens. To the best of the Borrower's knowledge, no claim has been made that
the use of any Patent or Trademark violates the rights of any third person. The
Borrower has used consistent standards of quality in its manufacture of products
sold under the Patents and Trademarks.
4. Covenants of the Borrower
The Borrower hereby covenants with the Administrative Agent as
follows:
121
(a) Chief Executive Office. The Borrower shall maintain its
place of business, or if the Borrower has more than one place of business, its
chief executive office, at the Office Location or at such other location in
respect of which (A) the Borrower shall have provided the Administrative Agent
with prior written notice thereof, and (B) UCC financing statements (or
amendments thereto), in form and substance reasonably satisfactory to the
Administrative Agent, shall have been filed within two months of such change.
(b) Further Assurances. The Borrower shall, at its own
expense, promptly execute and deliver all certificates, documents, instruments,
financing and continuation statements and amendments thereto, notices and other
agreements, and take all further action, that the Administrative Agent may
reasonably request from time to time, in order to perfect and protect the
Security Interest granted hereby or to enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder with respect to the
Collateral. The Borrower hereby irrevocably appoints the Administrative Agent as
the Borrower's true and lawful attorney-in-fact, in the name, place and stead of
the Borrower, to perform on behalf of the Borrower any and all obligations of
the Borrower under this Agreement, and the Borrower agrees that the power of
attorney herein granted constitutes a power coupled with an interest, provided,
however, that the Administrative Agent shall have no obligation to perform any
such obligation and such performance shall be at the sole cost and expense of
the Borrower. If the Borrower fails to comply with any of its obligations
hereunder, the Administrative Agent may do so in the Borrower's name or in the
Administrative Agent's name, but at the Borrower's expense, and the Borrower
hereby agrees to reimburse the Administrative Agent in full for all reasonable
expenses, including reasonable attorney's fees, incurred by the Administrative
Agent in connection therewith.
(c) Information. The Borrower at its own expense shall
furnish to the Administrative Agent such information, reports, statements and
schedules with respect to the Collateral as the Administrative Agent may
reasonably request from time to time.
(d) Defense of Collateral. The Borrower at its own expense
shall defend the Collateral against all claims of any kind or nature (other than
Permitted Liens, if any) of all Persons at any time claiming the same or any
interest therein adverse to the interests of the Administrative Agent, the
Issuing Bank, any Rate Protection Lender or any Lender, and the Borrower shall
not cause, permit or suffer to exist any Lien upon the Collateral other than
Permitted Liens, if any.
(e) Uncertificated Securities. The Borrower shall cause each
Person which is an Issuer of an Uncertificated Security constituting Collateral
(i) to register the Security Interest granted hereby upon the books of such
Person in accordance with Article 8 of the NYUCC, and (ii) to agree to comply
with Instructions originated by the Administrative Agent with respect to such
Uncertificated Securities without further consent by the Borrower.
(f) Delivery of Pledged Collateral. Each Certificated
Security representing an Equity Interest in a Person which is or shall become a
Subsidiary of the Borrower shall be promptly delivered to the Administrative
Agent, to be held by the Administrative Agent pursuant
122
hereto, in suitable form for transfer by delivery or accompanied by duly
executed documents of transfer or assignment in blank, all in form and substance
satisfactory to the Administrative Agent. The Borrower agrees that until so
delivered, each such Certificated Security shall be held by the Borrower in
trust for the benefit of the Administrative Agent and be segregated from the
other Property of the Borrower.
(g) Chattel Paper, Documents and Instruments. All of the
Instruments, Documents and Chattel Paper now or hereafter owned by or in the
possession of the Borrower which constitute Collateral (other than checks
received in the ordinary course of collection) shall be promptly delivered to
the Administrative Agent, to be held by the Administrative Agent pursuant
hereto, in suitable form for transfer by delivery or accompanied by duly
executed documents of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent. The Borrower agrees that,
with respect to all items of the Collateral which it is or shall hereafter be
obligated to deliver to the Administrative Agent, until so delivered such items
shall be held by the Borrower in trust for the benefit of the Administrative
Agent and be segregated from the other Property of the Borrower.
(h) Accounts. Except as otherwise provided in this Section
4(h), the Borrower shall continue to collect in accordance with its customary
practice, at its own expense, all amounts due or to become due to the Borrower
in respect of the Borrower's Accounts and, prior to the occurrence of an Event
of Default, the Borrower shall have the right to adjust, settle or compromise
the amount or payment of any such Account, all in accordance with its customary
practices. In connection with such collections, the Borrower may take and, at
the direction of the Administrative Agent at any time that an Event of Default
shall have occurred and be continuing shall take, such action as the Borrower or
the Administrative Agent may reasonably deem necessary or advisable to enforce
collection of such Accounts.
(i) Equipment and Inventory. The Borrower shall keep the
Equipment and Inventory constituting Collateral at the places listed on Schedule
3(h) hereto, and at such other places located within the United States in
respect of which (i) the Borrower shall have provided the Administrative Agent
with prior written notice, and (ii) UCC financing statements (or amendments
thereto), in form and substance satisfactory to the Administrative Agent, shall
have been filed within two months of such change. The Borrower shall promptly
furnish to the Administrative Agent a statement respecting any material loss or
damage to any of the Equipment or Inventory constituting Collateral except to
the extent that such loss or damage shall be insured pursuant to policies
required to be maintained pursuant to the Credit Agreement.
(j) Patents and Trademarks. The Borrower will continue to
use for the duration of this Agreement, consistent standards of quality in its
manufacture of products sold under the Patents and Trademarks constituting
Collateral. The Borrower shall give to the Administrative Agent prompt written
notice thereof in the event that the Borrower shall obtain any right to any new
Patent or Trademark or to any reissue, division, continuation, renewal,
extension, or continuation-in-part of any Patent or Trademark. The Borrower
shall prosecute diligently any applications of the Patents and Trademarks
constituting Collateral pending as of the date of this Agreement or thereafter,
and preserve and maintain all rights in applications of
123
Patents and Trademarks constituting Collateral consistent with past practice,
including the payment of all maintenance fees, except to the extent the failure
so to preserve or maintain such rights could not reasonably be expected to have
a material adverse effect on either (i) the value of the Patents taken as a
whole, or (ii) the value of the Trademarks taken as a whole. The Borrower shall
not abandon any right to file an application or any pending application for any
Patent or Trademark unless the failure so to do could not reasonably be expected
to have a material adverse effect on either (i) the value of the Patents taken
as a whole, or (ii) the value of the Trademarks taken as a whole. The Borrower
agrees that it will not enter into any agreement, including a license agreement,
with respect to any Patent or Trademark which is inconsistent with the
Borrower's past practices of licensing Patents or Trademarks as the case may be.
The Borrower hereby grants to the Administrative Agent the right to visit the
Borrower's plants and facilities which manufacture, inspect or store products
sold under any of the Patents and Trademarks, and to inspect the products and
quality control records relating thereto at reasonable times during regular
business hours upon reasonable prior notice.
5. Other Agreements of the Borrower
(a) No Duty to Preserve. Except as otherwise required by
law, the Borrower agrees that, with respect to the Collateral, neither the
Administrative Agent, the Issuing Bank, any Rate Protection Lender nor any
Lender has any obligation to preserve rights against prior or third parties.
(b) Administrative Agent's Duty With Respect to Collateral.
The Administrative Agent's only duty with respect to the Collateral delivered to
it shall be to use reasonable care in the custody and preservation of the
Collateral, and the Borrower agrees that if the Administrative Agent accords the
Collateral substantially the same kind of care as it accords its own Property,
such care shall conclusively be deemed reasonable. In the event that all or any
part of the Certificated Securities or Instruments constituting the Collateral
are lost, destroyed or wrongfully taken while such Certificated Securities or
Instruments are in the possession of the Administrative Agent, the Borrower
agrees that it will use its best efforts to cause the delivery of new
Certificated Securities or Instruments in place of the lost, destroyed or
wrongfully taken Certificated Securities or Instruments upon request therefor by
the Administrative Agent, without the necessity of any indemnity bond or other
security, other than the Administrative Agent's agreement of indemnity upon
usual and customary terms therefor. Anything herein to the contrary
notwithstanding, the Administrative Agent shall not be under any duty to send
notices, perform services, exercise any rights of collection, enforcement,
conversion or exchange, vote, pay for insurance, taxes or other charges or take
any action of any kind in connection with the management of the Collateral.
(c) Liability of Borrower under Contracts and Agreements
Included in the Collateral. Anything herein to the contrary notwithstanding, (i)
the Borrower shall remain liable under the contracts and agreements included in
the Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Administrative Agent, the Issuing Bank, any
Rate Protection Lender or any Lender of any of its rights hereunder shall not
release the Borrower
124
from any of its duties or obligations under any such contract or agreement,
(iii) neither the Administrative Agent, the Issuing Bank, any Rate Protection
Lender nor any Lender shall have any obligation or liability, including
indemnification obligations, under any such contract or agreement by reason of
this Agreement, nor shall the Administrative Agent, the Issuing Bank, any Rate
Protection Lender or any Lender be obligated to perform any of the obligations
or duties of the Borrower thereunder, to make any payment, to make any inquiry
as to the nature or sufficiency of any payment received by the Borrower or the
sufficiency of any performance by any party under any such contract or agreement
or to take any action to collect or enforce any claim for payment assigned
hereunder, and (iv) neither the Administrative Agent, the Issuing Bank, any Rate
Protection Lender nor any Lender shall be under any duty to send notices,
perform services, exercise any rights of collection, enforcement, conversion or
exchange, vote, pay for insurance, taxes or other charges or take any action of
any kind in connection with the management of the Collateral.
6. Events of Default
Each of the following shall constitute an "Event of Default":
(a) If the Borrower shall fail to observe or perform any
term, covenant or agreement contained in this Agreement; or
(b) The occurrence and continuance of an Event of Default
under, and as such term is defined in, the Credit Agreement.
7. Remedies
(a) Upon the occurrence of an Event of Default or at any
time thereafter during the continuance thereof, the Administrative Agent may:
(i) exercise any and all rights and remedies (A)
granted to a Secured Party by the UCC in effect in the State of New York
or otherwise allowed at law, and (B) otherwise provided by this
Agreement, and
(ii) dispose of the Collateral as it may choose, so
long as every aspect of the disposition including the method, manner,
time, place and terms are commercially reasonable, and the Borrower
agrees that, without limitation, the following are each commercially
reasonable: (A) the Administrative Agent shall not in any event be
required to give more than 10 days' prior notice to the Borrower of any
such disposition, (B) any place within the City of New York or the
Counties of Nassau, Suffolk, and Westchester may be designated by the
Administrative Agent for disposition, and (C) the Administrative Agent
may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
(b) The Borrower acknowledges and agrees that the
Administrative Agent may elect, with respect to the offer or sale of any or all
of the Equity Interests constituting the
125
Collateral, to conduct such offer and sale in such a manner as to avoid the need
for registration or qualification of such Equity Interests or the offer and sale
thereof under any Federal or state securities laws and that the Administrative
Agent is authorized to comply with any limitation or restriction in connection
with such sale as counsel may advise the Administrative Agent is reasonably
necessary in order to avoid any violation of applicable law, compliance with
such procedures as may restrict the number of prospective bidders and
purchasers, require that such prospective bidders and purchasers have certain
qualifications, and restrict such prospective bidders and purchasers to Persons
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Equity
Interests, or in order to obtain any required approval of the sale or of the
purchaser by any Governmental Authority. The Borrower further acknowledges and
agrees that any such transaction may be at prices and on terms less favorable
than those which may be obtained through a public sale and not subject to such
restrictions and agrees that, notwithstanding the foregoing, the Administrative
Agent is under no obligation to conduct any such public sale and may elect to
impose any or all of the foregoing restrictions, or any other restrictions which
may be reasonably necessary in order to avoid any such registration or
qualification, at its sole discretion or with the consent or direction of the
Required Lenders, and that any such offer and sale so conducted shall be deemed
to have been made in a commercially reasonable manner.
(c) To the extent permitted by law, the Borrower hereby
expressly waives and covenants not to assert any appraisement, valuation, stay,
extension, redemption or similar laws, now or at any time hereafter in force,
which might delay, prevent or otherwise impede the performance or enforcement of
this Agreement.
(d) Notwithstanding anything to the contrary contained in
this Agreement, any other Loan Document or in any other agreement, instrument or
document executed by the Borrower and delivered to the Administrative Agent, the
Issuing Bank or any Lender, neither the Administrative Agent, the Issuing Bank
nor any Lender will take any action pursuant to this Agreement, any other Loan
Document or any other document referred to above which would constitute or
result in any assignment of any license, approval, permit, certificate or other
authorization issued by the FCC or any change of control of the Borrower or any
Subsidiary if such assignment or change of control would require, under then
existing law, the prior approval of the FCC without first obtaining such prior
approval of the FCC. Upon the occurrence of an Event of Default or at any time
during the continuance thereof, the Borrower waives, to the extent permitted by
law, any right it may have to oppose, and agrees to take any action that the
Administrative Agent may reasonably request in order to obtain from the FCC,
such approval as may be necessary to enable the Administrative Agent, the
Issuing Bank and the Lenders to exercise and enjoy the full rights and benefits
granted to the Administrative Agent, the Issuing Bank and the Lenders by this
Agreement, the other Loan Documents and the other documents referred to above,
including specifically, at the cost and expense of the Borrower, the use of
commercially reasonable efforts to assist in obtaining approval of the FCC for
any action or transaction contemplated by this Agreement for which such approval
is or shall be required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or transferor's
portion of any application or applications for consent to the assignment of
license or transfer of control necessary or appropriate under the FCC's rules
and regulations
126
for approval of (a) any sale or other disposition of the Collateral by or on
behalf of the Administrative Agent, or (b) any assumption by the Administrative
Agent of voting rights in the Collateral effected in accordance with the terms
of this Agreement. It is understood and agreed that all foreclosure and related
actions will be made in accordance with the Communications Act and applicable
regulations and published policies and decisions of the FCC pertaining to such
foreclosure and related actions.
8. Voting
Notwithstanding anything to the contrary contained in this
Agreement, the Borrower shall have the right to vote all Securities and General
Intangibles constituting the Collateral and receive and retain all dividends and
distributions thereon until such time, if any, as an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have notified the
Borrower that the Administrative Agent shall have elected to terminate the
rights of the Borrower under this section, at which time the Administrative
Agent shall then be vested with the right to vote all Securities constituting
the Collateral and receive and retain all dividends and distributions thereon,
until such time as such Event of Default is cured or waived.
9. Notices
All notices and other communications provided for or otherwise
required hereunder or in connection herewith shall be given in the manner and to
the addresses set forth in Section 11.2 of the Credit Agreement.
10. Termination
On any date upon which (i) the Lenders shall no longer have any
obligation to make Loans, (ii) the Issuing Bank shall no longer have (A) any
obligation to issue Letters of Credit and (B) any obligations under the Letters
of Credit theretofor issued, and (iii) the Obligations shall have been paid in
full in cash, the outstanding principal balance of the Loans together with all
accrued interest thereon, all of the Reimbursement Obligations and all other
sums then due and owing under the Loan Documents, the Liens granted hereby shall
cease and the Administrative Agent shall, at the Borrower's expense (A) execute
and deliver all UCC Termination Statements and other documents necessary to
terminate the Liens granted hereby that the Borrower shall have reasonably
requested, and (B) return to the Borrower all Collateral that shall remain in
the possession of the Administrative Agent at such time.
11. Relationship to Credit Agreement
This Agreement is the "Borrower Security Agreement" under, and
as such term is defined in, the Credit Agreement, and is subject to, and should
be construed in accordance with, the provisions thereof. Each of the
Administrative Agent and the Borrower acknowledges that certain provisions of
the Credit Agreement, including, without limitation, Sections 1.2 (Principles of
Construction), 11.1 (Amendments and Waivers), 11.3 (No Waiver; Cumulative
Remedies), 11.4 (Survival of Representations and Warranties), 11.7 (Successors
and Assigns), 11.8 (Counterparts), 11.9 (Adjustments; Setoff), 11.12 (Governing
Law), 11.13 (Headings),
127
11.14 (Severability), 11.15 (Integration), 11.16 (Limitation of Liability),
11.17 (Consent to Jurisdiction), 11.18 (Service of Process), 11.19 (No
Limitation on Service or Suit) and 11.20 (WAIVER OF TRIAL BY JURY) thereof, are
made applicable to this Agreement and all such provisions are incorporated by
reference herein as if fully set forth herein.
IN EVIDENCE of the agreement by the parties hereto to the terms
and conditions herein contained, each such party has caused this First Amended
and Restated Borrower Security Agreement to be duly executed on its behalf.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE BANK OF NEW YORK,
as Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
128
SCHEDULE 3(E) TO THE BORROWER SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
LIST OF EQUITY INTERESTS
Percentage of
Number of Cert. Outstanding
Issuer Class Shares Number Shares
------ ----- --------- ------ -------------
129
SCHEDULE 3(f) TO THE BORROWER SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
LIST OF CHATTEL PAPER, DOCUMENTS AND INSTRUMENTS
130
SCHEDULE 3(h) TO THE BORROWER SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
ADDRESSES FOR EQUIPMENT AND INVENTORY LOCATIONS
131
SCHEDULE 3(i) TO THE BORROWER SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
LIST OF REGISTRATIONS
A. Patents
B. Trademarks
132
ANNEX A-1 TO THE BORROWER SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
FORM OF GRANT OF SECURITY INTEREST (PATENTS)
SALEM COMMUNICATIONS CORPORATION, a Delaware corporation (the
"Borrower"), is obligated to THE BANK OF NEW YORK, as Administrative Agent (the
"Administrative Agent"), and has entered into the First Amended and Restated
Borrower Security Agreement as of June ____, 1999 (as the same may be amended,
supplemented or otherwise modified, the "Agreement") with the Administrative
Agent.
Pursuant to the Agreement, the Borrower granted to the
Administrative Agent a security interest in all of the right, title and interest
of the Borrower in and to the letters patent or applications for letters patent,
of the United States, more particularly described on Schedule 1 (the "Patents")
together with any reissue, continuation, continuation-in-part or extension
thereof, and all proceeds thereof, any and all causes of action which may exist
by reason of infringement thereof for the full term of the Patents (the
"Collateral"), to secure the prompt payment, performance and observance of the
Obligations (as defined in the Agreement).
For good and valuable consideration, the receipt of which is
hereby acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Borrower does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Obligations.
The Borrower does hereby further acknowledge and affirm that the
rights and remedies of the Administrative Agent with respect to the assignment
of and security interest in the Collateral made and granted hereby are set forth
in the Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Obligations
(as such term is defined in the Agreement), the Administrative Agent will take
whatever actions are necessary at the Borrower's expense to release or reconvey
to Borrower all right, title and interest of the Borrower in and to the Patents.
The Administrative Agent's address is: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the Borrower has caused this Assignment to
be duly executed by its duly authorized officer as of the __ day of _____,
_____.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _____, ____, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he resides at __________________; that he is the ________ of SALEM
COMMUNICATIONS CORPORATION, the corporation described in and which executed the
above instrument, and that he signed his name thereto by order of the board of
directors thereof.
Notary Public
[Notary's Stamp]
134
Schedule 1
to
Grant of Security Interest (Patents)
Dated as of ______________
135
ANNEX A-2 TO THE BORROWER SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
FORM OF GRANT OF SECURITY INTEREST (TRADEMARKS)
SALEM COMMUNICATIONS CORPORATION, a California corporation (the
"Borrower"), is obligated to THE BANK OF NEW YORK, as Administrative Agent (the
"Administrative Agent"), and has entered into the First Amended and Restated
Borrower Security Agreement dated as of June ____, 1999 (as the same may be
amended, supplemented or otherwise modified, the "Agreement") with the
Administrative Agent.
Pursuant to the Agreement, the Borrower granted to the
Administrative Agent a security interest in all of the right, title and interest
of the Borrower in and to the trademarks listed on Schedule 1, which trademarks
are registered in the United States Patent and Trademark Office (the
"Trademarks"), together with the goodwill of the business symbolized by the
Trademarks and the applications and registrations therefor, and all proceeds
thereof, any and all causes of action which may exist by reason of infringement
thereof (the "Collateral"), to secure the prompt payment, performance and
observance of the Obligations (as defined in the Agreement).
For good and valuable consideration, the receipt of which is
hereby acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Borrower does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Obligations.
The Borrower does hereby further acknowledge and affirm that the
rights and remedies of the Administrative Agent with respect to the assignment
of and security interest in the Collateral made and granted hereby are set forth
in the Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Obligations
(as such term is defined in the Agreement), the Administrative Agent will take
whatever actions are necessary at the Borrower's expense to release or reconvey
to the Borrower all right, title and interest of the Borrower in and to the
Trademarks.
The Administrative Agent's address is: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the Borrower has caused this Assignment to
be duly executed by its duly authorized officer as of the __ day of _____, ____.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _____, _____, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he resides at __________________; that he is the ________ of SALEM
COMMUNICATIONS CORPORATION, the corporation described in and which executed the
above instrument, and that he signed his name thereto by order of the board of
directors thereof.
Notary Public
[Notary's Stamp]
137
Schedule 1
to
Grant of Security Interest (Trademarks)
Dated as of ____________
138
SALEM EXHIBIT I
FORM OF FIRST AMENDED AND RESTATED
SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
FIRST AMENDED AND RESTATED SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
(as the same may be amended, supplemented or otherwise modified from time to
time, this "Agreement"), dated as of June __, 1999, by and among the Persons
party hereto (the "Current Guarantors"), such other Persons which from time to
time may become party hereto (the "Additional Guarantors", and collectively with
the Current Guarantors, the "Guarantors"), SALEM COMMUNICATIONS CORPORATION, a
Delaware corporation (the "Borrower"), and THE BANK OF NEW YORK (the
"Administrative Agent"), in its capacity as Administrative Agent for the Lenders
under the Credit Agreement referred to below and the Rate Protection Lenders as
defined herein.
RECITALS
A. This Agreement amends and restates the Subsidiary Guaranty and
Security Agreement, dated as of September 25, 1997, by and between the
Guarantors party thereto, Salem Communications Corporation, a California
corporation ("Salem California"), and the Administrative Agent (as amended to
the date hereof, the "Original Security Agreement"). On March 31, 1999, Salem
California merged into Salem Delaware with Salem Delaware as the survivor.
Pursuant to the terms and conditions of Consent No. 3, Salem Delaware entered
into the Assumption Agreement whereby Salem Delaware, among other things,
assumed all of the obligations of Salem California under the Loan Documents
(including, without limitation, the Original Security Agreement).
B. This Agreement is intended solely as an amendment of, and
contemporaneous restatement of, the terms and conditions of the Original
Security Agreement and is not intended, and should not be construed in any way,
to extinguish or terminate the Borrower Obligations, the Guarantor Obligations
or the Security Interests granted under the Original Security Agreement.
C. Reference is made to the First Amended and Restated Credit
Agreement, dated as of June __, 1999, by and among the Borrower, the Lenders
party thereto, the Administrative Agent, Bank of America NT&SA, as Documentation
Agent, and BankBoston, N.A., Fleet Bank, N.A. and Union Bank of California,
N.A., as Co-Agents (as the same may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), which Credit Agreement
amends and restates the Credit Agreement, dated as of September 25, 1997, by and
among Salem California, the lenders party thereto, Bank of America NT&SA, as
Documentation Agent, and The Bank of New York, as Administrative Agent, as
amended and modified by Amendment No. 1 and Consent No. 1, dated as of August 5,
1998, Amendment No. 2 and Consent No. 2, dated as of January 22, 1999, Consent
No. 3, dated as of March 31, 1999, and Amendment No. 3 and Consent No. 4, dated
as of April 23, 1999 (as so amended, the "Original Credit Agreement").
139
D. In the past, as now, the Borrower has provided financing for the
Guarantors and the Guarantors have relied upon the Borrower to provide such
financing. In addition, it is anticipated that, if the Guarantors execute and
deliver this Agreement, the Borrower will continue to provide such financing to
the Guarantors, and that the proceeds of the Loans to be made and Letters of
Credit to be issued will be used, in part, for the general corporate and working
capital purposes of the Guarantors. It is a condition precedent to the
effectiveness of the Credit Agreement and the making of all Loans and all
extensions of credit under the Credit Agreement that the Guarantors shall have
executed and delivered this Agreement. In light of all of the foregoing, each
Guarantor expects to derive substantial benefit from the Credit Agreement and
the transactions contemplated thereby and, in furtherance thereof, has agreed to
execute and deliver this Agreement.
E. For convenience, this Agreement is dated as of June __, 1999,
and references to certain matters relating to the period prior thereto have been
deleted.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantors, the Borrower and
the Administrative Agent hereby agree as follows:
1. Defined Terms
(a) Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
(b) When used in this Agreement, the following capitalized
terms shall have the respective meanings ascribed thereto as follows:
"Borrower Obligations": all of the obligations and
liabilities of the Borrower under the Loan Documents and under each Interest
Rate Protection Arrangement entered into by the Borrower with a Rate Protection
Lender, in each case whether fixed, contingent, now existing or hereafter
arising, created, assumed, incurred or acquired, and whether before or after the
occurrence of any Insolvency Event, and including (i) any obligation or
liability in respect of any breach of any representation or warranty and (ii)
all post-petition interest and funding losses, whether or not allowed as a claim
in any proceeding arising in connection with an Insolvency Event.
"Collateral": as defined in Section 4.
"Equity Interest": (i) with respect to a corporation,
the capital stock thereof, (ii) with respect to a partnership, a partnership
interest therein, all rights of a partner in such partnership, whether arising
under the partnership agreement of such partnership or otherwise; (iii) with
respect to a limited liability company, a membership interest therein, all
rights of a member of such limited liability company, whether arising under the
limited liability company agreement of such limited liability company or
otherwise; (iv) with respect to any other firm, association, trust, business
enterprise or
- 2 -
140
other entity, any equity interest therein, any interest therein which entitles
the holder thereof to share in the revenue, income, earnings or losses thereof
or to vote or otherwise participate in any election of one or more members of
the Managing Person thereof, and (v) all warrants and options in respect of any
of the foregoing and all other securities which are convertible or exchangeable
therefor.
"Financing Statements": the UCC financing statements
executed by the Guarantor and delivered pursuant to the Credit Agreement.
"Grants of Security Interests": collectively, the Grant
of Security Interest (Patents) and the Grant of Security Interest (Trademarks),
in the form of Annexes B-1 and B-2 hereto, respectively, in each case
appropriately completed and signed by the Guarantor.
"Guarantor Obligations": with respect to each Guarantor,
all of the obligations and liabilities of such Guarantor hereunder, whether
fixed, contingent, now existing or hereafter arising, created, assumed, incurred
or acquired.
"Insolvency Event": any Event of Default under Section
9.1(h) or (i) of the Credit Agreement.
"NYUCC": the UCC as in effect in the State of New York
on the date hereof.
"Office Location": as defined in Section 5(c).
"Patents": all patents issued under the laws of the
United States of America and all patent applications filed with the United
States Patent and Trademark Office, and all of the rights associated with each
of the foregoing.
"Proceeds": as defined in the NYUCC, together with (i)
all dividends, distributions and income on and in respect of all of the
Securities and Instruments and all other rights and benefits in respect thereof,
and (ii) with respect to the Patents and Trademarks, all renewals thereof, all
proceeds of infringement suits, all rights to ▇▇▇ for infringement, all license
royalties, all reissues, divisions, continuations, extensions and continuations
in part thereof.
"Registrations": (i) patents issued under the laws of
the United States of America, (ii) patent applications filed with the United
States Patent and Trademark Office, and (iii) all registered trademarks.
"Rate Protection Lenders": collectively, the Lenders and
any affiliates of the Lenders which from time to time enter or have entered into
Interest Rate Protection Arrangements with the Borrower.
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141
"Supplement": a Supplement to this Agreement, duly
completed, in the form of Annex A hereto.
"Trademarks": as to any Guarantor (i) all rights under
the laws of the United States of America, and each State thereof, to trademarks,
together with all registrations thereof, applications therefor and all of the
rights associated therewith, and (ii) the goodwill of such Guarantor's business
symbolized by registered trademarks.
"UCC": with respect to any jurisdiction, Articles 1, 8
and 9 of the Uniform Commercial Code as from time to time in effect in such
jurisdiction.
(c) When used in this Agreement, the following capitalized
terms shall have the respective meanings ascribed thereto in the NYUCC:
"Account", "Certificated Security", "Chattel Paper", "Document", "Equipment",
"Fixture", "General Intangible", "Instruction", "Instrument", "Inventory",
"Issuer", "Secured Party", "Security", "Security Interest" and "Uncertificated
Security".
2. Guaranty
(a) Subject to Section 2(b) hereof, each Guarantor hereby
absolutely, irrevocably and unconditionally guarantees the full and prompt
payment when due (whether at stated maturity, by acceleration or otherwise) of
the Borrower Obligations. This Agreement constitutes a guaranty of payment and
neither the Administrative Agent, the Issuing Bank nor any Lender shall have any
obligation to enforce any Loan Document or any Interest Rate Protection
Arrangement or exercise any right or remedy with respect to any collateral
security thereunder by any action, including making or perfecting any claim
against any Person or any collateral security for any of the Borrower
Obligations, prior to being entitled to the benefits of this Agreement. The
Administrative Agent may, at its option, proceed against the Guarantors, or any
one or more of them, in the first instance, to enforce the Guarantor Obligations
without first proceeding against the Borrower or any other Person, and without
first resorting to any other rights or remedies, as the Administrative Agent may
deem advisable. In furtherance hereof, if the Administrative Agent, the Issuing
Bank or any Lender is prevented by law from collecting or otherwise hindered
from collecting or otherwise enforcing any Borrower Obligation in accordance
with its terms, the Administrative Agent, the Issuing Bank or such Lender, as
the case may be, shall be entitled to receive hereunder from the Guarantors
after demand therefor, the sums which would have been otherwise due had such
collection or enforcement not been prevented or hindered.
(b) Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the greatest amount that would not render
such Guarantor's obligations hereunder subject to avoidance as a fraudulent
transfer or
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142
conveyance under Section 548 of Title 11 of the United States Code or any
provisions of applicable state law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (A) in respect of intercompany indebtedness to the Borrower or
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(B) under any guarantee of senior unsecured indebtedness or Indebtedness
subordinated in right of payment to the Obligations which guarantee contains an
assumption that indebtedness incurred under the Credit Agreement shall be deemed
to have been incurred prior to any indebtedness incurred under any such
guarantee or contains a limitation as to maximum amount similar to that set
forth in this subsection, pursuant to which the liability of such Guarantor
hereunder is included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights
to subrogation, contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among such Guarantor and other Affiliates of the Borrower
of obligations arising under guarantees by such parties (including the
agreements in paragraph (d) of this Section).
(c) Each Guarantor agrees that the Guarantor Obligations may
at any time and from time to time exceed the maximum liability of such Guarantor
hereunder without impairing this Agreement or affecting the rights and remedies
of the Administrative Agent, the Issuing Bank or any Lender hereunder.
(d) In addition to all rights of indemnity and subrogation
as the Guarantors may have under applicable law (but subject to this paragraph),
the Borrower agrees that (i) in the event a payment shall be made by any
Guarantor hereunder, the Borrower shall indemnify such Guarantor for the full
amount of such payment, and such Guarantor shall be subrogated to the rights of
the person to whom such payments shall have been made to the extent of such
payment, and (ii) in the event that any assets of any Guarantor shall be sold
pursuant to any Loan Document to satisfy any claim of the Administrative Agent,
any Lender, the Issuing Bank or any Rate Protection Lender, the Borrower shall
indemnify such Guarantor in an amount equal to the greater of the book value or
the fair market value of the assets so sold. Each Guarantor (a "contributing
Guarantor") agrees (subject to this paragraph) that, in the event a payment
shall be made by any other Guarantor hereunder or assets of any other Guarantor
shall be sold pursuant to any Loan Document to satisfy a claim of the
Administrative Agent, any Lender, the Issuing Bank or any Rate Protection Lender
and such other Guarantor (the "claiming Guarantor") shall not have been fully
indemnified by the Borrower as provided in this paragraph, the contributing
Guarantor shall indemnify the claiming Guarantor in an amount equal to the
amount of such payment or the greater of the book value or the fair
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market value of such assets, as applicable, in each case multiplied by a
fraction of which the numerator shall be the net worth of the contributing
Guarantor on the date hereof and the denominator shall be the aggregate net
worth of all the Guarantors on the date hereof (or, in the case of any Guarantor
becoming a party hereto pursuant to Section 15, the date of the Supplement
hereto executed and delivered by such Guarantor). Any contributing Guarantor
making any payment to a claiming Guarantor pursuant to this paragraph shall be
subrogated to the rights of such claiming Guarantor under this paragraph to the
extent of such payment. Notwithstanding any provision of this paragraph to the
contrary, all rights of the Guarantors under this paragraph and all other rights
of indemnity, contribution or subrogation under applicable law or otherwise
shall be fully subordinated to the indefeasible payment in full in cash of the
Borrower Obligations and the Guarantor Obligations. No failure on the part of
the Borrower or any Guarantor to make the payments required by this paragraph
(or any other payments required under applicable law or otherwise) shall in any
respect limit the obligations and liabilities of any Guarantor with respect to
its obligations under this paragraph, and each Guarantor shall remain liable for
the full amount of the obligations of such Guarantor under this paragraph.
3. Absolute Obligation
No Guarantor shall be released from liability hereunder unless and until
the Maturity Date shall have occurred and either (a) the Issuing Bank shall not
have any obligation under the Letters of Credit and the Borrower shall have paid
in full in cash the outstanding principal balance of the Loans, together with
all accrued interest thereon, all of the Reimbursement Obligations, and all
other sums then due and owing under the Loan Documents, or (b) the Guarantor
Obligations of such Guarantor shall have been paid in full in cash. Each
Guarantor acknowledges and agrees that (i) neither the Administrative Agent, the
Issuing Bank nor any Lender has made any representation or warranty to such
Guarantor with respect to the Borrower, its Subsidiaries, any Loan Document, any
Interest Rate Protection Arrangement, or any agreement, instrument or document
executed or delivered in connection therewith, or any other matter whatsoever,
and (ii) such Guarantor shall be liable hereunder, and such liability shall not
be affected or impaired, irrespective of (A) the validity or enforceability of
any Loan Document, any Interest Rate Protection Arrangement, or any agreement,
instrument or document executed or delivered in connection therewith, or the
collectability of any of the Borrower Obligations, (B) the preference or
priority ranking with respect to any of the Borrower Obligations, (C) the
existence, validity, enforceability or perfection of any security interest or
collateral security under any Loan Document, or any Interest Rate Protection
Arrangement, or the release, exchange, substitution or loss or impairment of any
such security interest or collateral security, (D) any failure, delay, neglect
or omission by the Administrative Agent, the Issuing Bank or any Lender to
realize upon, enforce or protect any direct or indirect collateral security,
indebtedness, liability or obligation, any Loan
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Document, any Interest Rate Protection Arrangement, or any agreement, instrument
or document executed or delivered in connection therewith, or any of the
Borrower Obligations, (E) the existence or exercise of any right of setoff by
the Administrative Agent, the Issuing Bank or any Lender, (F) the existence,
validity or enforceability of any other guaranty with respect to any of the
Borrower Obligations, the liability of any other Person in respect of any of the
Borrower Obligations, or the release of any such Person or any other guarantor
of any of the Borrower Obligations, (G) any act or omission of the
Administrative Agent, the Issuing Bank or any Lender in connection with the
administration of any Loan Document, any Interest Rate Protection Arrangement,
or any of the Borrower Obligations, (H) the bankruptcy, insolvency,
reorganization or receivership of, or any other proceeding for the relief of
debtors commenced by or against, any Person, (I) the disaffirmance or rejection,
or the purported disaffirmance or purported rejection, of any of the Borrower
Obligations, any Loan Document, any Interest Rate Protection Arrangement, or any
agreement, instrument or document executed or delivered in connection therewith,
in any bankruptcy, insolvency, reorganization or receivership, or any other
proceeding for the relief of debtor, relating to any Person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Loan Document, any Interest Rate
Protection Arrangement, or any agreement, instrument or document executed or
delivered in connection therewith or any of the Borrower Obligations, or which
might cause or permit to be invoked any alteration in the time, amount, manner
or payment or performance of any of the Borrower's obligations and liabilities
(including the Borrower Obligations), (K) the merger or consolidation of the
Borrower into or with any Person, (L) the sale by the Borrower of all or any
part of its assets, (M) the fact that at any time and from time to time none of
the Borrower Obligations may be outstanding or owing to the Administrative
Agent, the Issuing Bank or any Lender, (N) any amendment or modification of, or
supplement to, any Loan Document or any Interest Rate Protection Arrangement or
(O) any other reason or circumstance which might otherwise constitute a defense
available to or a discharge of the Borrower in respect of its obligations or
liabilities (including the Borrower Obligations) or of such Guarantor in respect
of any of the Guarantor Obligations (other than by the performance in full
thereof).
4. Grant of Security Interest
To secure the prompt and complete payment, observance and performance of
the Guarantor Obligations, each Guarantor hereby grants to the Administrative
Agent, for its benefit and the ratable benefit of the Issuing Bank, the Lenders
and the Rate Protection Lenders, a Security Interest in and to all of such
Guarantor's right, title and interest in and to all: Accounts, Chattel Paper,
Documents, Equipment, Fixtures, General Intangibles, Instruments, including,
without limitation, Instruments evidencing intercompany Indebtedness, Inventory,
Patents, Trademarks, Equity Interests in each Person which now is or may
hereafter become a Subsidiary of such Guarantor or of the Borrower, whether
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or not evidenced by a Security, and all Proceeds of all of the foregoing, and
including, without limitation, all licenses, approvals, permits and other
authorizations issued by the FCC, including the Proceeds of any sale or other
disposition thereof, in each case to the extent that a security interest therein
is not prohibited by law, provided that to the extent that a security interest
therein is now so prohibited and to the extent that such security interest at
any time hereafter shall no longer be so prohibited, then such security interest
shall automatically and without any further action attach and become fully
effective at that time (giving effect to any retroactive effect to any change in
applicable law or regulation), in each case whether now owned or existing or
hereafter arising or acquired, (collectively, the "Collateral").
5. Representations and Warranties
Each Guarantor hereby represents and warrants to the Administrative
Agent as follows:
(a) Binding Obligation. This Agreement constitutes the valid
and binding obligation of such Guarantor, enforceable in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws related to or affecting
the enforcement of creditors' rights generally.
(b) Solvency. Such Guarantor (if a Current Guarantor, both
immediately before and after giving effect to this Agreement and to all
Indebtedness incurred by the Borrower in connection with the Loan Documents or,
if an Additional Guarantor, immediately before and after giving effect to this
Agreement) (i) is not insolvent, (ii) is not engaged, and is not about to
engage, in any business or transaction, for which it has unreasonably small
capital, and (iii) does not intend to incur, and does not believe that it would
incur, debts that would be beyond its ability to pay such debts as they mature,
in each case referred to above within the meaning of both Title XI of the United
States Code and Article 10 of New York Debtor Credit Law, each as in effect on
the date hereof.
(c) Chief Executive Office. As of the date hereof, such
Guarantor's place of business or, if such Guarantor has more than one place of
business, its chief executive office, is, and has been continuously for the
immediately preceding 5 month period, located (the "Office Location") at, (i) if
such Guarantor is a Current Guarantor, the address therefor referred to in
Schedule 5(c) hereto, or (ii) if such Guarantor is an Additional Guarantor, the
address therefor set forth on Schedule 5(c) to the Supplement delivered by such
Additional Guarantor. Such Guarantor, (i) in the case of a Current Guarantor,
has not changed its legal name during the 6 year period immediately preceding
the date hereof, and (ii) in the case of an Additional Guarantor, has not
changed its legal name during the 6 year period immediately preceding the date
it became a
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Guarantor hereunder, except as otherwise disclosed on the Supplement delivered
by such Additional Guarantor.
(d) Information. If such Guarantor is a Current Guarantor,
all of the information with respect to such Guarantor, or any of its Property,
set forth on each of the Schedules hereto is true, complete and correct as of
the date hereof. If such Guarantor is an Additional Guarantor, all of the
information with respect to such Guarantor, or any of its Property, set forth on
each of the Schedules to the Supplement delivered by such Additional Guarantor
is true, complete and correct as of the date of such Supplement. All of such
Guarantor's books, records and documents relating to its Guarantor Collateral
are in all material respects what they purport to be.
(e) Security Interest. This Agreement, together with the
delivery to the Administrative Agent of the Certificated Securities constituting
Collateral and the continuous possession thereof by the Administrative Agent in
the State of New York, creates a continuing "enforceable" Security Interest in
the Collateral in favor of the Administrative Agent. Upon (i) the presentation
for filing of the Financing Statements at the respective offices listed thereon
together with the appropriate filing fee therefor, (ii) the delivery to the
Administrative Agent of the Instruments and the Certificated Securities
constituting the Collateral, (iii) the registration, in accordance with Article
8 of the NYUCC, of the Security Interest granted hereby on the books of each
Person which is an Issuer of an Uncertificated Security constituting the
Collateral as the agreement by such Person to comply with Instructions
originated by the Administrative Agent with respect to such Uncertificated
Securities without further consent by the registered owner of such
Uncertificated Securities, and (iv) the filing of the Grants of Security
Interests in the United States Patent and Trademark Office with respect to
Patents, Registrations, and Trademarks, (A) such Security Interest shall be
perfected, and (B) assuming that the Administrative Agent does not have "notice
of any adverse claim" within the meaning of Article 8 of the NYUCC, the
Administrative Agent shall be a "protected purchaser", within the meaning of
such Article, with respect to the Collateral consisting of Securities.
(f) Absence of Liens. There are no Liens upon the Collateral
other than Permitted Liens, if any.
(g) Equity Interests. As of the Effective Date with respect
to each Current Guarantor, as of the date of the Supplement executed by an
Additional Guarantor with respect to such Additional Guarantor, (i) the Equity
Interests listed on Schedule 5(g) or Schedule 5(g) to the Supplement, as the
case may be, constitute all of the Equity Interests in each Subsidiary in which
such Guarantor has any right, title or interest, and each such Equity Interest
issued by a corporate Issuer has been duly authorized, validly issued and fully
paid for, and is non-assessable and (ii) except as set forth in such Schedule
5(g) or Schedule 5(g) to such Supplement, (A) no Subsidiary of such Guarantor
has issued any securities convertible into, or options or warrants for, any
common or
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preferred equity securities thereof, (B) there are no agreements, voting trusts
or understandings binding upon such Guarantor or any of its Subsidiaries with
respect to the voting securities of any of such Subsidiary or affecting in any
manner the sale, pledge, assignment or other disposition thereof, including any
right of first refusal, option, redemption, call or other right with respect
thereto, whether similar or dissimilar to any of the foregoing and (C) no such
Equity Interest is represented by an Uncertificated Security.
(h) Chattel Paper, Documents and Instruments. With respect
to each Current Guarantor, the Chattel Paper, Documents and Instruments listed
on Schedule 5(h) hereto constitute, as of the date hereof, and with respect to
each Additional Guarantor, the Chattel Paper, Documents and Instruments listed
on Schedule 5(h) to the Supplement delivered by such Additional Guarantor
constitute, as of the date of such Supplement, all of the Chattel Paper,
Documents and Instruments which constitute the Collateral, and, to the best of
such Guarantor's knowledge, all such Chattel Paper, Documents and Instruments
have been duly authorized, issued and delivered, and constitute the legal,
valid, binding and enforceable obligations of the respective makers thereof.
(i) Accounts. As of the date hereof, all records concerning
any Account constituting the Collateral are located at its Office Location, and
no such Account is evidenced by a promissory note or other instrument.
(j) Equipment and Inventory. Except for Equipment and
Inventory in transit with common carriers, such Guarantor has exclusive
possession and control of all Equipment and Inventory constituting the
Collateral, all of which is as of the date hereof and has been continuously for
the 5 month period immediately preceding the date hereof (or, in the case of an
Additional Guarantor, the date of the Supplement delivered by such Additional
Guarantor), located at one or more of the places listed on (i) if such Guarantor
is a Current Guarantor, Schedule 5(j) hereto hereto, and (ii) if such Guarantor
is an Additional Guarantor, Schedule 5(j) hereto to the Supplement delivered by
such Additional Guarantor. Within the last 5-1/2 years as of the date hereof (or
of the Supplement of such Additional Guarantor) such Guarantor has not acquired
any Inventory or Equipment in connection with any bulk sale, or other than in
the ordinary course of business.
(k) Patents and Trademarks. Such Guarantor has no
Registrations relating to Patents other than those listed on (i) if such
Guarantor is a Current Guarantor, Schedule 5(k) hereto, and (ii) if such
Guarantor is an Additional Guarantor, Schedule 5(k) to the Supplement delivered
by such Guarantor, and each such Registration is subsisting and is not invalid
or unenforceable, in whole or in part, except to the extent that the
unenforceability thereof could not reasonably be expected to have a material
adverse effect on the value of the Patents taken as a whole. Such Guarantor has
no Registrations relating to Trademarks other than those listed on (i) if such
Guarantor is a Current
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Guarantor, Schedule 5(k) hereto, and (ii) if such Guarantor is an Additional
Guarantor, Schedule 5(k) to the Supplement delivered by such Guarantor, and each
such Registration is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, except to the extent that the
unenforceability thereof could not reasonably be expected to have a material
adverse effect on the value of the Trademarks taken as a whole. To the best of
such Guarantor's knowledge, each Patent and Trademark constituting Collateral is
valid and enforceable. Except for Permitted Liens, such Guarantor is the sole
and exclusive owner of the entire and unencumbered right, title and interest in
and to each of the Patents and Trademarks constituting Collateral, free and
clear of all Liens. To the best of such Guarantor's knowledge, no claim has been
made that the use of any Patent or Trademark violates the rights of any third
person. Such Guarantor has used consistent standards of quality in its
manufacture of products sold under the Patents and Trademarks.
(l) Uncertificated Securities. Each Guarantor which is an
Issuer of an Uncertificated Security constituting Collateral has registered the
Administrative Agent on its books and records as the registered owner of each
such Uncertificated Security.
6. Covenants
Each Guarantor covenants with the Administrative Agent as follows:
(a) Chief Executive Office. Such Guarantor shall maintain
its place of business, or if it has more than one place of business, its chief
executive office, at the Office Location or at such other location in respect of
which (i) such Guarantor shall have provided the Administrative Agent with prior
written notice thereof, and (ii) UCC financing statements (or amendments
thereto), in form and substance reasonably satisfactory to the Administrative
Agent, shall have been filed within two months of such change.
(b) Further Assurances. Such Guarantor shall, at its own
expense, promptly execute and deliver all certificates, documents, instruments,
financing and continuation statements and amendments thereto, notices and other
agreements, and take all further action, that the Administrative Agent may
reasonably request from time to time, in order to perfect and protect the
Security Interest granted hereby or to enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder with respect to the
Collateral. Such Guarantor hereby irrevocably appoints the Administrative Agent
as such Guarantor's true and lawful attorney-in-fact, in the name, place and
stead of such Guarantor, to perform on behalf of such Guarantor any and all
obligations of such Guarantor under this Agreement, and such Guarantor agrees
that the power of attorney herein granted constitutes a power coupled with an
interest, provided, however, that the Administrative Agent shall have no
obligation to perform any such obligation and such performance shall be at the
sole cost and expense of such Guarantor. If such Guarantor
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fails to comply with any of its obligations hereunder, the Administrative Agent
may do so in such Guarantor's name or in the Administrative Agent's name, but at
such Guarantor's expense, and such Guarantor hereby agrees to reimburse the
Administrative Agent in full for all reasonable expenses, including reasonable
attorney's fees, incurred by the Administrative Agent in connection therewith.
(c) Information. Such Guarantor shall, at its own expense,
furnish to the Administrative Agent such information, reports, statements and
schedules with respect to the Collateral as the Administrative Agent may
reasonably request from time to time.
(d) Defense of Collateral. Such Guarantor shall, at its own
expense, defend the Collateral against all claims of any kind or nature (other
than Permitted Liens, if any) of all Persons at any time claiming the same or
any interest therein adverse to the interests of the Administrative Agent, the
Issuing Bank, any Rate Protection Lender or any Lender, and such Guarantor shall
not cause, permit or suffer to exist any Lien upon the Collateral other than
Permitted Liens, if any.
(e) Uncertificated Securities. Such Guarantor shall cause
each Person which is an Issuer of an Uncertificated Security constituting the
Collateral (i) to register the Security Interest granted hereby upon the books
of such Person in accordance with Article 8 of the NYUCC, and (ii) to agree to
comply with Instructions originated by the Administrative Agent with respect to
such Uncertificated Securities without further consent by the registered owner
of such Uncertificated Securities.
(f) Delivery of Pledged Collateral. Each Certificated
Security representing an Equity Interest in a Person which is or shall become a
Subsidiary of the Borrower shall be promptly delivered to the Administrative
Agent, to be held by the Administrative Agent pursuant hereto, in suitable form
for transfer by delivery or accompanied by duly executed documents of transfer
or assignment in blank, all in form and substance satisfactory to the
Administrative Agent. Such Guarantor agrees that until so delivered, each such
Certificated Security shall be held by such Guarantor in trust for the benefit
of the Administrative Agent and be segregated from the other Property of such
Guarantor.
(g) Chattel Paper, Documents and Instruments. All of the
Instruments, Documents and Chattel Paper now or hereafter owned by or in the
possession of such Guarantor which constitute Collateral (other than checks
received in the ordinary course of collection) shall be promptly delivered to
the Administrative Agent, to be held by the Administrative Agent pursuant
hereto, in suitable form for transfer by delivery or accompanied by duly
executed documents of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent. Such Guarantor agrees that,
with respect to all items of the Collateral which it is or shall hereafter be
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obligated to deliver to the Administrative Agent, until so delivered such items
shall be held by such Guarantor in trust for the benefit of the Administrative
Agent and be segregated from the other Property of such Guarantor.
(h) Accounts. Except as otherwise provided in this
subsection, such Guarantor shall continue to collect in accordance with its
customary practice, at its own expense, all amounts due or to become due to such
Guarantor in respect of such Guarantor's Accounts and, prior to the occurrence
of an Event of Default, such Guarantor shall have the right to adjust, settle or
compromise the amount or payment of any such Account, all in accordance with its
customary practices. In connection with such collections, such Guarantor may
take and, at the direction of the Administrative Agent at any time that an Event
of Default shall have occurred and be continuing shall take, such action as such
Guarantor or the Administrative Agent may reasonably deem necessary or advisable
to enforce collection of such Accounts.
(i) Equipment and Inventory. Such Guarantor shall keep the
Equipment and Inventory constituting Collateral at the places listed on (i) if
such Guarantor is a Current Guarantor, Schedule 5(l) hereto, and (ii) if such
Guarantor is an Additional Guarantor, Schedule 5(l) to the Supplement delivered
by such Guarantor, and at such other places located within the United States in
respect of which (A) such Guarantor shall have provided the Administrative Agent
with prior written notice, and (B) UCC financing statements (or amendments
thereto), in form and substance satisfactory to the Administrative Agent, shall
have been filed within two months of such change. Such Guarantor shall promptly
furnish to the Administrative Agent a statement respecting any material loss or
damage to any of the Equipment or Inventory constituting Collateral except to
the extent that such loss or damage shall be insured pursuant to policies
required to be maintained pursuant to the Credit Agreement.
(j) Patents and Trademarks. Such Guarantor will continue to
use for the duration of this Agreement, consistent standards of quality in its
manufacture of products sold under the Patents and Trademarks constituting
Collateral. Such Guarantor shall give to the Administrative Agent prompt written
notice thereof in the event that such Guarantor shall obtain any right to any
new Patent or Trademark or to any reissue, division, continuation, renewal,
extension, or continuation-in-part of any Patent or Trademark. Such Guarantor
shall prosecute diligently any applications of the Patents and Trademarks
constituting Collateral pending as of the date of this Agreement or thereafter,
and preserve and maintain all rights in applications of Patents and Trademarks
constituting Collateral consistent with past practice, including the payment of
all maintenance fees, except to the extent the failure so to preserve or
maintain such rights could not reasonably
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be expected to have a material adverse effect on either (i) the value of the
Patents taken as a whole, or (ii) the value of the Trademarks taken as a whole.
Such Guarantor shall not abandon any right to file an application or any pending
application for any Patent or Trademark unless the failure so to do could not
reasonably be expected to have a material adverse effect on either (i) the value
of the Patents taken as a whole, or (ii) the value of the Trademarks taken as a
whole. Such Guarantor agrees that it will not enter into any agreement,
including a license agreement, with respect to any Patent or Trademark which is
inconsistent with such Guarantor's past practices of licensing Patents or
Trademarks as the case may be. Such Guarantor hereby grants to the
Administrative Agent the right to visit such Guarantor's plants and facilities
which manufacture, inspect or store products sold under any of the Patents and
Trademarks, and to inspect the products and quality control records relating
thereto at reasonable times during regular business hours upon reasonable prior
notice.
7. Other Agreements of the Guarantors
(a) No Duty to Preserve. Except as otherwise required by
law, each Guarantor agrees that, with respect to the Collateral, neither the
Administrative Agent, the Issuing Bank, any Rate Protection Lender nor any
Lender has any obligation to preserve rights against prior or third parties.
(b) Administrative Agent's Duty With Respect to Collateral.
Each Guarantor agrees that the Administrative Agent's only duty with respect to
the Collateral delivered to the Administrative Agent shall be to use reasonable
care in the custody and preservation of the Collateral, and each Guarantor
agrees that if the Administrative Agent accords the Collateral substantially the
same kind of care as the Administrative Agent accords its own Property, such
care shall conclusively be deemed reasonable. In the event that all or any part
of the Certificated Securities or Instruments constituting the Collateral are
lost, destroyed or wrongfully taken while such Certificated Securities or
Instruments are in the possession of the Administrative Agent, each Guarantor
agrees that it will use its best efforts to cause the delivery of new
Certificated Securities or Instruments in place of the lost, destroyed or
wrongfully taken Certificated Securities or Instruments upon request therefor by
the Administrative Agent, without the necessity of any indemnity bond or other
security, other than the Administrative Agent's agreement of indemnity upon
usual and customary terms therefor. Anything herein to the contrary
notwithstanding, the Administrative Agent shall not be under any duty to send
notices, perform services, exercise any rights of collection, enforcement,
conversion or exchange, vote, pay for insurance, taxes or other charges or take
any action of any kind in connection with the management of the Collateral.
(c) Liability of Guarantors under Contracts and Agreements
Included in the Collateral. Anything herein to the contrary notwithstanding, (i)
each Guarantor shall remain liable under the contracts and agreements to which
it is a party and which is included in the Collateral to the extent set forth
therein to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the
Administrative Agent, the Issuing Bank, any Rate Protection Lender or any Lender
of any of its rights hereunder shall not release any Guarantor from any of
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its duties or obligations under any such contract or agreement, (iii) neither
the Administrative Agent, the Issuing Bank, any Rate Protection Lender nor any
Lender shall have any obligation or liability, including indemnification
obligations, under any such contract or agreement by reason of this Agreement,
nor shall the Administrative Agent, the Issuing Bank, any Rate Protection Lender
or any Lender be obligated to perform any of the obligations or duties of any
Guarantor thereunder, to make any payment, to make any inquiry as to the nature
or sufficiency of any payment received by any Guarantor or the sufficiency of
any performance by any party under any such contract or agreement or to take any
action to collect or enforce any claim for payment assigned hereunder, and (iv)
neither the Administrative Agent, the Issuing Bank, any Rate Protection Lender
nor any Lender shall be under any duty to send notices, perform services,
exercise any rights of collection, enforcement, conversion or exchange, vote,
pay for insurance, taxes or other charges or take any action of any kind in
connection with the management of the Collateral.
(d) Uncertificated Securities. Each Guarantor which is an
Issuer of an Uncertificated Security constituting Collateral agrees to comply
with Instructions originated by the Administrative Agent with respect to each
such Uncertificated Security without further consent by the registered owner of
such Uncertificated Security.
8. Events of Default
Each of the following shall constitute an "Event of Default":
(a) The failure of any Guarantor to observe or perform any
term, covenant or agreement contained in this Agreement; or
(b) The occurrence and continuance of an Event of Default
under, and as such term is defined in, the Credit Agreement.
9. Remedies
(a) Upon the occurrence of an Event of Default or at any
time thereafter during the continuance thereof, the Administrative Agent may:
(i) exercise any and all rights and remedies (A)
granted to a Secured Party by the UCC in effect in the State of New York
or otherwise allowed at law, and (B) otherwise provided by this
Agreement, and
(ii) dispose of the Collateral as it may choose, so
long as every aspect of the disposition including the method, manner,
time, place and terms are commercially reasonable, and each Guarantor
agrees that, without limitation, the
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following are each commercially reasonable: (A) the Administrative Agent
shall not in any event be required to give more than 10 days' prior
notice to the Guarantors of any such disposition, (B) any place within
the City of New York or the Counties of Nassau, Suffolk, and Westchester
may be designated by the Administrative Agent for disposition, and (C)
the Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Each Guarantor acknowledges and agrees that the
Administrative Agent may elect, with respect to the offer or sale of any or all
of the Equity Interests constituting the Collateral, to conduct such offer and
sale in such a manner as to avoid the need for registration or qualification of
such Equity Interests or the offer and sale thereof under any Federal or state
securities laws and that the Administrative Agent is authorized to comply with
any limitation or restriction in connection with such sale as counsel may advise
the Administrative Agent is reasonably necessary in order to avoid any violation
of applicable law, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Equity Interests, or in order to obtain any required approval of
the sale or of the purchaser by any Governmental Authority. Each Guarantor
further acknowledges and agrees that any such transaction may be at prices and
on terms less favorable than those which may be obtained through a public sale
and not subject to such restrictions and agrees that, notwithstanding the
foregoing, the Administrative Agent is under no obligation to conduct any such
public sale and may elect to impose any or all of the foregoing restrictions, or
any other restrictions which may be reasonably necessary in order to avoid any
such registration or qualification, at its sole discretion or with the consent
or direction of the Required Lenders, and that any such offer and sale so
conducted shall be deemed to have been made in a commercially reasonable manner.
(c) To the extent permitted by law, each Guarantor hereby
expressly waives and covenants not to assert any appraisement, valuation, stay,
extension, redemption or similar laws, now or at any time hereafter in force,
which might delay, prevent or otherwise impede the performance or enforcement of
this Agreement.
(d) Notwithstanding anything to the contrary contained in
this Agreement, any other Loan Document or in any other agreement, instrument or
document executed by any Guarantor and delivered to the Administrative Agent,
the Issuing Bank or any Lender, neither the Administrative Agent, the Issuing
Bank nor any Lender will take any action pursuant to this Agreement, any other
Loan Document or any other document referred to above which would constitute or
result in any assignment of any
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154
license, approval, permit, certificate or other authorization issued by the FCC
or any change of control of the Borrower or any Subsidiary if such assignment or
change of control would require, under then existing law, the prior approval of
the FCC without first obtaining such prior approval of the FCC. Upon the
occurrence of an Event of Default or at any time thereafter during the
continuance thereof, each Guarantor waives, to the extent permitted by law, any
right it may have to oppose, and agrees to take any action that the
Administrative Agent may reasonably request in order to obtain from the FCC,
such approval as may be necessary to enable the Administrative Agent, the
Issuing Bank and the Lenders to exercise and enjoy the full rights and benefits
granted to the Administrative Agent, the Issuing Bank and the Lenders by this
Agreement, the other Loan Documents and the other documents referred to above,
including specifically, at the cost and expense of the Borrower, the use of
commercially reasonable efforts to assist in obtaining approval of the FCC for
any action or transaction contemplated by this Agreement for which such approval
is or shall be required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or transferor's
portion of any application or applications for consent to the assignment of
license, approval, permit, certificate or other authorization or transfer of
control necessary or appropriate under the FCC's rules and regulations for
approval of (i) any sale or other disposition of the Collateral by or on behalf
of the Administrative Agent, or (ii) any assumption by the Administrative Agent
of voting rights in the Collateral effected in accordance with the terms of this
Agreement. It is understood and agreed that all foreclosure and related actions
will be made in accordance with the Communications Act and applicable
regulations and published policies and decisions of the FCC pertaining to such
foreclosure and related actions.
10. Voting
Notwithstanding anything to the contrary contained in this Agreement,
each Guarantor shall have the right to vote all Securities constituting its
Collateral and receive and retain all dividends and distributions thereon until
such time, if any, as an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have notified such Guarantor that the
Administrative Agent shall have elected to terminate the rights of such
Guarantor under this section, at which time the Administrative Agent shall then
be vested with the right to vote all Securities constituting the Collateral and
receive and retain all dividends and distributions thereon, until such time as
such Event of Default is cured or waived.
11. Termination
On any date upon which (i) the Lenders shall no longer have any
obligation to make Loans, (ii) the Issuing Bank shall no longer have (A) any
obligation to issue Letters of Credit and (B) any obligations under the Letters
of Credit theretofor issued, and (iii) the Obligations shall have been paid in
full in cash, the outstanding principal balance of
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155
the Loans together with all accrued interest thereon, all of the Reimbursement
Obligations and all other sums then due and owing under the Loan Documents, the
Liens granted hereby shall cease and the Administrative Agent shall, at the
Guarantors' expense (A) execute and deliver all UCC Termination Statements and
other documents necessary to terminate the Liens granted hereby that the
Guarantors shall have reasonably requested, and (B) return to the Guarantors all
their respective Collateral that shall remain in the possession of the
Administrative Agent at such time.
12. Notices
Except as otherwise specifically provided herein, all notices, requests,
consents, demands, waivers and other communications hereunder shall be in
writing (including facsimile) and shall be electronically transmitted or mailed
by registered or certified mail or delivered in person, and all statements,
reports, documents, certificates and papers to be delivered hereunder shall be
mailed by first class mail or delivered in person, in each case to the
respective parties to this Agreement as follows: in the case of the
Administrative Agent or the Borrower, as set forth in Section 11.2 of the Credit
Agreement, in the case of each Current Guarantor, as set forth adjacent to the
name of such Current Guarantor on the signature page(s) hereof, and, in the case
of each Additional Guarantor, as set forth adjacent to the name of such
Additional Guarantor on the signature page(s) of the Supplement delivered by
such Additional Guarantor, or to such other addresses as to which the
Administrative Agent may be hereafter notified by the respective parties hereto.
Any notice, request, consent, demand, waiver or communication given in
accordance with the provisions of this section shall be conclusively deemed to
have been received by a party hereto and to be effective on the day on which
delivered to such party at its address specified above or, if sent by registered
or certified mail, on the delivery date noted on the receipt therefor, provided
that a notice of change of address shall be deemed to be effective only when
actually received. Any party hereto may rely on signatures of the other parties
hereto which are transmitted by facsimile or other electronic means as fully as
if originally signed.
13. Expenses
Each Guarantor agrees that it shall, upon demand, pay to the
Administrative Agent any and all reasonable out-of-pocket sums, costs and
expenses, which the Administrative Agent, the Issuing Bank or any Lender may pay
or incur defending, protecting or enforcing this Agreement (whether suit is
instituted or not), reasonable attorneys' fees and disbursements. All sums,
costs and expenses which are due and payable pursuant to this section shall bear
interest, payable on demand, at the highest rate then payable on the Borrower
Obligations.
14. Repayment in Bankruptcy, etc.
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156
If, at any time or times subsequent to the payment of all or any part of
the Borrower Obligations or the Guarantor Obligations, the Administrative Agent,
the Issuing Bank or any Lender shall be required to repay any amounts previously
paid by or on behalf of the Borrower or any Guarantor in reduction thereof by
virtue of an order of any court having jurisdiction in the premises, as a result
of an adjudication that such amounts constituted preferential payments or
fraudulent conveyances, the Guarantors unconditionally agree to pay to the
Administrative Agent within 10 days after demand a sum in cash equal to the
amount of such repayment, together with interest on such amount from the date of
such repayment by the Administrative Agent, the Issuing Bank or such Lender, as
the case may be, to the date of payment to the Administrative Agent at the
applicable after maturity rate set forth in the Credit Agreement.
15. Additional Guarantors
Upon the execution and delivery to the Administrative Agent of a
Supplement by any Person, appropriately acknowledged, such Person shall be a
Guarantor.
16. Agreement to Pay; Subordination
In furtherance of the foregoing and not in limitation of any other right
that the Administrative Agent, the Issuing Bank, any Lender or any Rate
Protection Lender has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Borrower Obligations when and as the same shall become due, whether at maturity,
be acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Administrative
Agent in cash the amount of such unpaid Obligations. Upon payment by any
Guarantor of any sums to the Administrative Agent as provided above, all rights
of such Guarantor against the Borrower arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Borrower Obligations. In
addition, any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated in right of payment to the prior payment in
full in cash of the Borrower Obligations. If any amount shall erroneously be
paid to any Guarantor on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of the
Borrower, such amount shall be held in trust for the benefit of the
Administrative Agent, the Issuing Bank, the Lenders and the Rate Protection
Lenders and shall forthwith be paid to the Administrative Agent to be credited
against the payment of the Borrower
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157
Obligations, whether matured or unmatured, in accordance with the terms of the
Loan Documents.
17. Miscellaneous
(a) Except as otherwise expressly provided in this
Agreement, each Guarantor hereby waives presentment, demand for payment, notice
of default, nonperformance and dishonor, protest and notice of protest of or in
respect of this Agreement, the other Loan Documents, each Interest Protection
Arrangement, and the Borrower Obligations, notice of acceptance of this
Agreement and reliance hereupon by the Administrative Agent, the Issuing Bank
and each Lender, and the incurrence of any of the Borrower Obligations, notice
of any sale of collateral security or any default of any sort.
(b) No Guarantor is relying upon the Administrative Agent,
the Issuing Bank or any Lender to provide to such Guarantor any information
concerning the Borrower or any of its Subsidiaries, and each Guarantor has made
arrangements satisfactory to such Guarantor to obtain from the Borrower on a
continuing basis such information concerning the Borrower and its Subsidiaries
as such Guarantor may desire.
(c) Each Guarantor agrees that any statement of account with
respect to the Borrower Obligations from the Administrative Agent, the Issuing
Bank or any Lender to the Borrower which binds the Borrower shall also be
binding upon such Guarantor, and that copies of said statements of account
maintained in the regular course of the Administrative Agent's, the Issuing
Bank's or such Lender's business, as the case may be, may be used in evidence
against such Guarantor in order to establish its Guarantor Obligations.
(d) Each Guarantor acknowledges that it has received a copy
of the Loan Documents and each Interest Rate Protection Arrangement and has
approved of the same. In addition, such Guarantor acknowledges having read each
Loan Document and each such Interest Rate Protection Arrangement and having had
the advice of counsel in connection with all matters concerning its execution
and delivery of this Agreement.
(e) No Guarantor may assign any right, or delegate any duty,
it may have under this Agreement.
(f) Subject to the limitations set forth in Section 2(b),
the Guarantor Obligations shall be joint and several.
(g) This Agreement is the "Subsidiary Guaranty" referred to
in the Credit Agreement, and is subject to, and should be construed in
accordance with, the provisions thereof. Each of the Administrative Agent, the
Guarantors and the Borrower
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158
acknowledges that certain provisions of the Credit Agreement, including, without
limitation, Sections 1.2 (Principles of Construction), 11.1 (Amendments and
Waivers), 11.3 (No Waiver; Cumulative Remedies), 11.4 (Survival of Certain
Obligations), 11.7 (Successors and Assigns), 11.8 (Counterparts), 11.9
(Adjustments; Setoff), 11.12 (Governing Law), 11.13 (Headings), 11.14
(Severability), 11.15 (Integration), 11.16 (Limitation of Liability), 11.17
(Consent to Jurisdiction), 11.18 (Service of Process), 11.19 (No Limitation on
Service or Suit) and 11.20 (WAIVER OF TRIAL BY JURY) thereof, are made
applicable to this Agreement and all such provisions are incorporated by
reference herein as if fully set forth herein.
IN EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this First Amended and
Restated Subsidiary Guaranty and Security Agreement to be duly executed on its
behalf.
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159
ATEP RADIO, INC.
BISON MEDIA, INC.
▇▇▇▇▇ BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY, INC.
INLAND RADIO, INC.
INSPIRATION MEDIA OF TEXAS, INC.
INSPIRATION MEDIA, INC.
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING
COMPANY, INC.
OASIS RADIO, INC.
ONEPLACE, LTD.
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
SALEM MEDIA CORPORATION
SALEM MEDIA OF CALIFORNIA, INC.
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO REPRESENTATIVES, INC.
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
By:
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. Block
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ (ext.106)
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
THE BANK OF NEW YORK,
as Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
161
SCHEDULE 5(c) TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
LIST OF OFFICE LOCATIONS
162
SCHEDULE 5(g) TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
LIST OF EQUITY INTERESTS
Percentage of
Number of Cert. Outstanding
Issuer Class Shares Number Shares
------ ----- --------- ------ -------------
163
SCHEDULE 5(h) TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
LIST OF CHATTEL PAPER, DOCUMENTS AND INSTRUMENTS
164
SCHEDULE 5(j) TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
ADDRESSES FOR EQUIPMENT AND INVENTORY LOCATIONS
165
SCHEDULE 5(k) TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
LIST OF REGISTRATIONS
A. Patents
B. Trademarks
166
ANNEX A TO THE SUBSIDIARY GUARANTY
FORM OF SUPPLEMENT TO FIRST AMENDED AND RESTATED
SUBSIDIARY GUARANTY
FIRST AMENDED AND RESTATED SUBSIDIARY GUARANTY AND SECURITY AGREEMENT,
dated as of June __, 1999, by and among the Guarantors party thereto, Salem
Communications Corporation and The Bank of New York, as Administrative Agent (as
the same may be amended, supplemented or otherwise modified from time to time,
the "Agreement").
[Date]
Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Agreement. Pursuant
to Section 15 of the Agreement, by execution and delivery of this Supplement
and, upon acceptance hereof by the Administrative Agent, the undersigned (i)
shall be, and shall be deemed to be, a "Guarantor" under, and as such term is
defined in, the Agreement, (ii) shall have made, and shall be deemed to have
made, the representations and warranties contained in Section 5 of the Agreement
on and as of the date hereof, (iii) as security for the payment and performance
in full of its Guarantor Obligations, does hereby create and grant to the
Administrative Agent, its successors and permitted assigns, for its benefit and
the ratable benefit of the Issuing Bank, the Lenders and the Rate Protection
Lenders, their respective successors and permitted assigns, a security interest
in the Collateral (as defined in the Agreement) of the Additional Guarantor and
(iv) shall have made, and shall be deemed to have made, all of the covenants and
agreements of a Guarantor set forth in the Agreement.
[NAME OF ADDITIONAL GUARANTOR]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address for Notices:
Attention:
Telephone: (___) ___-____
Telecopy: (___) ___-____
167
Accepted and agreed to as of the date first above written:
THE BANK OF NEW YORK, as Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[SCHEDULES CORRESPONDING TO THE SCHEDULES
IN THE AGREEMENT ARE TO BE ATTACHED]
168
ANNEX B-1 TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
FORM OF GRANT OF SECURITY INTEREST (PATENTS)
[NAME OF GUARANTOR], a _____________ corporation (the "Guarantor"), is
obligated to THE BANK OF NEW YORK, as Administrative Agent (the "Administrative
Agent"), and has entered into the First Amended and Restated Subsidiary Guaranty
and Security Agreement, dated as of June __, 1999 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Agreement"), by and
among each Guarantor party thereto, SALEM COMMUNICATIONS CORPORATION (the
"Borrower") and THE BANK OF NEW YORK, as Administrative Agent (in such capacity,
the "Administrative Agent").
Pursuant to the Agreement, the Guarantor granted to the Administrative
Agent a security interest in all of the right, title and interest of the
Guarantor in and to the letters patent or applications for letters patent, of
the United States, more particularly described on Schedule 1 (the "Patents")
together with any reissue, continuation, continuation-in-part or extension
thereof, and all proceeds thereof, any and all causes of action which may exist
by reason of infringement thereof for the full term of the Patents (the
"Collateral"), to secure the prompt payment, performance and observance of the
Guarantor Obligations (as defined in the Agreement).
For good and valuable consideration, the receipt of which is hereby
acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Guarantor does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Guarantor Obligations.
The Guarantor does hereby further acknowledge and affirm that the rights
and remedies of the Administrative Agent with respect to the assignment of and
security interest in the Collateral made and granted hereby are set forth in the
Agreement, the terms and provisions of which are hereby incorporated herein by
reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Guarantor Obligations
(as such term is defined in the Agreement), the Administrative Agent will take
whatever actions are necessary at the Guarantor's expense to release or reconvey
to Guarantor all right, title and interest of the Guarantor in and to the
Patents.
169
The Administrative Agent's address is: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the Guarantor has caused this Assignment to be duly
executed by its duly authorized officer as of the __ day of _____, ____.
[NAME OF GUARANTOR]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _____, ____, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he resides at __________________; that he is the ________ of [NAME OF
GUARANTOR], the corporation described in and which executed the above
instrument, and that he signed his name thereto by order of the board of
directors thereof.
Notary Public
[Notary's Stamp]
171
Schedule 1
to
Grant of Security Interest (Patents)
Dated as of __________
172
ANNEX B-2 TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF JUNE __, 1999
FORM OF GRANT OF SECURITY INTEREST (TRADEMARKS)
[NAME OF GUARANTOR], a _____________ corporation (the "Guarantor"), is
obligated to THE BANK OF NEW YORK, as Administrative Agent (the "Administrative
Agent"), and has entered into the First Amended and Restated Subsidiary Guaranty
and Security Agreement, dated as of June __, 1999 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Agreement"), by and
among each Guarantor party thereto, SALEM COMMUNICATIONS CORPORATION (the
"Borrower") and THE BANK OF NEW YORK, as Administrative Agent (in such capacity,
the "Administrative Agent").
Pursuant to the Agreement, the Guarantor granted to the Administrative
Agent a security interest in all of the right, title and interest of the
Guarantor in and to the trademarks listed on Schedule 1, which trademarks are
registered in the United States Patent and Trademark Office (the "Trademarks"),
together with the goodwill of the business symbolized by the Trademarks and the
applications and registrations therefor, and all proceeds thereof, any and all
causes of action which may exist by reason of infringement thereof (the
"Collateral"), to secure the prompt payment, performance and observance of the
Guarantor Obligations (as defined in the Agreement).
For good and valuable consideration, the receipt of which is hereby
acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Guarantor does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Guarantor Obligations.
The Guarantor does hereby further acknowledge and affirm that the rights
and remedies of the Administrative Agent with respect to the assignment of and
security interest in the Collateral made and granted hereby are set forth in the
Agreement, the terms and provisions of which are hereby incorporated herein by
reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Guarantor Obligations
(as such term is defined in the Agreement), the Administrative Agent will take
whatever actions are necessary at the Guarantor's expense to release or reconvey
to the Guarantor all right, title and interest of the Guarantor in and to the
Trademarks.
173
The Administrative Agent's address is: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the Guarantor has caused this Assignment to be duly
executed by its duly authorized officer as of the __ day of _____, ____.
[NAME OF GUARANTOR]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _____, ____, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he resides at __________________; that he is the ________ of [NAME OF
GUARANTOR], the corporation described in and which executed the above
instrument, and that he signed his name thereto by order of the board of
directors thereof.
Notary Public
[Notary's Stamp]
175
Schedule 1
to
Grant of Security Interest (Trademarks)
Dated as of _________
176
SALEM EXHIBIT J
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is made and entered into as of
______________, by and between ____________ (the "Assignor") and ____________
(the "Assignee").
R E C I T A L S
A. Capitalized terms used herein which are not defined herein shall
have the meanings set forth in the Credit Agreement (as hereinafter defined).
B. The Assignor, certain other lenders (together with any prior
assignees, the "Lenders") and The Bank of New York, as Administrative Agent (the
"Administrative Agent"), Bank of America NT&SA, as Documentation Agent, and
BankBoston, N.A., Fleet Bank, N.A. and Union Bank of California, N.A., as
Co-Agents, are parties to that certain First Amended and Restated Credit
Agreement, dated as of June __, 1999 (as amended, modified or otherwise
supplemented, the "Credit Agreement"), with Salem Communications Corporation, a
Delaware corporation (the "Borrower"). Pursuant to the Credit Agreement, the
Lenders agreed to make RC Loans to the Borrower under the RC Commitments in the
aggregate amount of $[150,000,000] and the Issuing Bank agreed to issue Letters
of Credit under the Letter of Credit Commitment in the aggregate amount of
$[15,000,000]. The amount of the Assignor's RC Commitment is specified in Item 1
of Schedule 1 hereto. The type and outstanding principal amount of the
Assignor's RC Loans are specified in Item 2 of Schedule 1 hereto. The Assignor's
Letter of Credit Exposure is specified in Item 3 of Schedule 1 hereto.
C. The Assignor wishes to sell and assign to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, (i) the portion of the
Assignor's RC Commitment specified in Item 4 of Schedule 1 hereto (the "Assigned
Commitment"), (ii) the portion of the Assignor's RC Loans specified in Item 5 of
Schedule 1 hereto (the "Assigned Loans") and (iii) the portion of the Assignor's
Letter of Credit Exposure specified in Item 7 of Schedule 1 hereto (the
"Assigned Letter of Credit Exposure").
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth herein
and in the Credit Agreement, the Assignor hereby sells and assigns to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse, on the date set forth above (the "Assignment Date") all right,
title, interest and obligations under the Credit Agreement and the other Loan
Documents of the Assignor in and with respect to the Assigned Loans, the
Assigned Letter of Credit Exposure and the Assigned Commitment. As full
consideration for the sale of the Assigned Loans, the Assigned Letter of Credit
Exposure and the Assigned Commitment, the Assignee shall pay to the Assignor on
the Assignment Date the principal amount of the Assigned Loans (the "Purchase
Price").
177
2. Representation and Warranties. Each of the Assignor and the
Assignee represents and warrants to the other that (a) it has full power and
legal right to execute and deliver this Agreement and to perform the provisions
of this Agreement; (b) the execution, delivery and performance of this Agreement
have been authorized by all action, corporate or otherwise, and do not violate
any provisions of its charter or by-laws or any contractual obligations or
requirement of law binding on it; and (c) this Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms.
3. Condition Precedent. The obligations of the Assignor and the
Assignee hereunder shall be subject to the fulfillment of the condition that the
Assignor shall have (a) received payment in full of the Purchase Price, and (b)
complied with the other applicable provisions of Section 11.7 of the Credit
Agreement.
4. Notice of Assignment. The Assignor agrees to give notice of the
assignment and assumption of the Assigned Loans, the Assigned Letter of Credit
Exposure and the Assigned Commitment to the Administrative Agent and the
Borrower and hereby instructs the Administrative Agent and the Borrower to make
all payments with respect to the Assigned Loans, the Assigned Letter of Credit
Exposure and the Assigned Commitment directly to the Assignee at the applicable
Lending Offices specified in Item 8 on Schedule 1 hereto; provided, however,
that the Borrower and the Administrative Agent shall be entitled to continue to
deal solely and directly with the Assignor in connection with the interests so
assigned until the Administrative Agent and the Borrower shall have received
notice of the assignment, the Administrative Agent and the Issuing Bank (to the
extent required by Section 11.7 of the Credit Agreement) shall have consented in
writing thereto, and the Administrative Agent shall have recorded and accepted
this Agreement and received the Assignment Fee required to be paid pursuant to
Section 11.7 of the Credit Agreement. From and after the date (the "Effective
Date") on which the Administrative Agent shall notify the Borrower and the
Assignor that the requirements set forth in the foregoing sentence shall have
occurred and all consents (if any) required shall have been given, (i) the
Assignee shall be deemed to be a party to the Credit Agreement and, to the
extent that rights and obligations thereunder shall have been assigned to
Assignee as provided in such notice of assignment to the Administrative Agent,
shall have the rights and obligations of a Lender under the Credit Agreement,
and (ii) the Assignee shall be deemed to have appointed the Administrative Agent
to take such action as Administrative Agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. After the Effective Date, the Administrative Agent shall make all
payments in respect of the interest assigned hereby (including payments of
principal, interest, fees and other amounts) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustment in payments under the Assigned
Loans, the Assigned Letter of Credit Exposure and the Assigned Commitment for
periods prior to the Effective Date hereof directly between themselves. The
Assignee agrees to deliver to the Borrower and the Administrative Agent such
Internal Revenue Service forms as may be required to establish that the Assignee
is entitled to receive payments under the Credit Agreement without deduction or
withholding of tax.
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178
5. Independent Investigation. The Assignee acknowledges that it is
purchasing the Assigned Loans, the Assigned Letter of Credit Exposure and the
Assigned Commitment from the Assignor totally without recourse and, except as
provided in Section 2 hereof, without representation or warranty. The Assignee
further acknowledges that it has made its own independent investigation and
credit evaluation of the Borrower and the other Loans Parties in connection with
its purchase of the Assigned Loans, the Assigned Letter of Credit Exposure and
the Assigned Commitment. Except for the representations or warranties set forth
in Section 2, the Assignee acknowledges that it is not relying on any
representation or warranty of the Assignor, expressed or implied, including
without limitation, any representation or warranty relating to the legality,
validity, genuineness, enforceability, collectibility, interest rate, repayment
schedule or accrual status of the Assigned Loans, the Assigned Letter of Credit
Exposure or the Assigned Commitment, the legality, validity, genuineness or
enforceability of the Credit Agreement, the related Notes, or any other Loan
Document referred to in or delivered pursuant to the Credit Agreement, or
financial condition or creditworthiness of the Borrower or any other Person. The
Assignor has not and will not be acting as either the representative,
Administrative Agent or trustee of the Assignee with respect to matters arising
out of or relating to the Credit Agreement or this Agreement. From and after the
Effective Date, except as set forth in Section 4 above, the Assignor shall have
no rights or obligations with respect to the Assigned Loans, the Assigned Letter
of Credit Exposure or the Assigned Commitment.
6. Method of Payment. All payments to be made by either party
hereunder shall be in funds available at the place of payment on the same day
and shall be made by wire transfer to the account designated by the party to
receive payment.
7. Integration. This Agreement shall supersede any prior agreement
or understanding between the parties (other than the Credit Agreement) as to the
subject matter hereof.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and shall be
binding upon both parties, their successors and assigns.
9. Headings. Section headings have been inserted herein for
convenience only and shall not be construed to be a part hereof.
10. Amendments; Waivers. This Agreement may not be amended, changed,
waived or modified except by a writing executed by the parties hereto, and may
not be amended, changed, waived or modified in any manner inconsistent with
Section 11.7 of the Credit Agreement without the prior written consent of the
Administrative Agent.
11. Governing Law. This Agreement shall be governed by, and
construed in accordance with the laws of, the State of New York.
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179
[ASSIGNOR]
By:
-------------------------------------
Name:
-----------------------------------
[ASSIGNEE]
By:
-------------------------------------
Name:
-----------------------------------
Consented and Accepted:
THE BANK OF NEW YORK, as Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Consented:
THE BANK OF NEW YORK, as Issuing Bank
By:
-------------------------------------
Name:
-----------------------------------
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180
SCHEDULE 1
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
relating to the
First Amended and Restated Credit Agreement, dated as of June __, 1999, by and
among Salem Communications Corporation, the Lenders party thereto, The Bank of
New York, as Administrative Agent, Bank of America NT&SA, as Documentation
Agent, and BankBoston, N.A., Fleet Bank, N.A. and Union Bank of California,
N.A., as Co-Agents, as amended, modified or otherwise supplemented.
Item 1. Assignor's RC Commitment $________________
Item 2. Assignor's RC Loans $________________
consisting of:
ABR Loans $________________
Eurodollar Loans $________________
Item 3. Assignor's Letter of
Credit Exposure $________________
Item 4. Amount of Assigned RC
Commitment $________________
Item 5. Percentage of RC
Commitment Assigned
as a percentage of
the aggregate RC
Commitments of all
Lenders _____________%
Item 6. Amount of Assigned RC Loans $________________
consisting of:
ABR Loans $________________
Eurodollar Loans $________________
Item 7. Amount of Assigned Letter
of Credit Exposure $________________
181
Item 8. Applicable Lending Offices
of Assignee and Address for
Notices pursuant to Section
11.2 of the Credit Agreement
Applicable Applicable
Lending Lending Office
Office for ABR for Eurodollar Address
Loans Loans for Notices
-------------- -------------- -----------
-------------- -------------- -----------
-------------- -------------- -----------
-------------- -------------- -----------
Attention: Attention: Attention:
Telephone: Telephone: Telephone:
Telecopier: Telecopier: Telecopier:
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182
DRAFT 6/21/99
SALEM EXHIBIT K
FORM OF RC SUPPLEMENT
REVOLVER SUPPLEMENT, dated as of ___________________, to the First
Amended and Restated Credit Agreement, dated as of June __, 1999, by and among
Salem Communications Corporation (the "Borrower"), the Lenders party thereto,
The Bank of New York, as Administrative Agent, Bank of America NT & SA, as
Documentation Agent, and BankBoston, N.A., Fleet Bank, N.A. and Union Bank of
California, N.A., as Co-Agents (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Capitalized terms
used herein that are defined in the Credit Agreement shall have the meanings
therein defined.
1. Pursuant to Section 2.4(d) of the Credit Agreement, the Borrower
hereby proposes to increase (the "Increase") the RC Commitment from $________ to
$________.
2. Each of the following Lenders (each an "Increasing Lender") has
been invited by the Borrower, and is ready, willing and able, to increase its RC
Commitment as follows:
RC Commitment
Name of Lender (after giving effect to the Increase)
-------------- -------------------------------------
----------------- $__________________
----------------- $__________________
3. Each of the following Persons (each a "Proposed Lender") has
been invited by the Borrower, and is ready, willing and able, to become a
"Lender" and issue a RC Commitment under the Credit Agreement as follows:
Name of Person RC Commitment
-------------- -------------
----------------- $__________________
----------------- $__________________
4. The Borrower hereby represents and warrants to the
Administrative Agent, each Lender and each such Person that (i) immediately
before and after giving effect to the Increase, no Default exists or would exist
and (ii) the Increase is in all respects in compliance with the terms and
conditions of the Loan Documents.
5. Pursuant to Section 2.4(d) of the Credit Agreement, by execution
and delivery of this Supplement, together with the satisfaction of all of the
other requirements set forth in such Section 2.4(d), (i) each of the Increasing
Lenders shall have, on and as of the effective date of the Increase, a RC
Commitment equal to the amount set forth above next to its name, and (ii) each
such Proposed Lender shall be deemed to be a "Lender" under, and as such term is
defined in,
183
the Credit Agreement, and shall have a RC Commitment equal to the amount set
forth above next to its name.
IN WITNESS WHEREOF, the parties hereto have caused this RC
Supplement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
SALEM COMMUNICATIONS CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
THE BANK OF NEW YORK, as
Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[INCREASING LENDER]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[PROPOSED LENDER]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------