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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 10, 1998
(February 24, 1998)
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SFX ENTERTAINMENT, INC.
(Exact name of registrant as specified in charter)
<TABLE>
<CAPTION>
<S> <C> <C>
Delaware 333-43287 13-3977880
(State or Other Jurisdiction of (Commission File No.) (IRS Employer Identification No.)
Incorporation)
</TABLE>
650 Madison Avenue, 16th Floor, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 838-3100
N/A
(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Acquisition of BG Presents
On February 24, 1998, SFX Entertainment, Inc. (the "Company"), a
subsidiary of SFX Broadcasting, Inc. ("Broadcasting"), through the Company's
wholly-owned subsidiary, BGP Acquisition, LLC, acquired all of the outstanding
capital stock of BG Presents, Inc. ("BGP"), a promoter and producer of, and
owner-operator of venues for, live entertainment in the United States, for a
total consideration of approximately $80.3 million, comprised of $60.8 million
in cash, $12.0 million in repayment of debt, which amount was at least equal to
BGP's working capital, and options to purchase 562,640 shares of Class A Common
Stock of the Company valued at approximately $7.5 million (the "BGP
Acquisition"). The options shall become exercisable for no additional
consideration upon consummation of the previously announced spin-off to the
stockholders of Broadcasting of the stock of the Company (the "Spin-Off"). If
the Spin-Off shall not have occurred by June 30, 1998, the option holders may
elect to sell the options to the Company for $7.5 million plus interest from
the closing date.
Acquisition of PACE Entertainment Corporation
On February 25, 1998, the Company acquired all of the outstanding
capital stock of PACE Entertainment Corporation ("PACE"), one of the largest
diversified producers and promoters of live entertainment in the United States
(the "PACE Acquisition"). In connection with the PACE Acquisition, the Company
acquired 100% of Pavilion Partners, a partnership that owns interests in 10
venues ("Pavilion"), one-third through the acquisition of PACE and two-thirds
through separate agreements between PACE and Viacom Inc. and certain of its
affiliates ("Blockbuster") and between PACE and YM Corp. ("Sony") (the
acquisition of such two-thirds interest, the "Pavilion Acquisition"). The total
consideration for the PACE Acquisition was approximately $150.1 million,
comprised of $109.5 million in cash, the repayment of approximately $20.6
million of debt and the issuance of 1.5 million shares of the Company's Class A
Common Stock valued at approximately $20 million. Such shares shall be issued
upon consummation of the Spin-Off. The total consideration for the Pavilion
Acquisition was approximately $90.6 million, comprised of $41.4 million in
cash, the repayment of approximately $43.1 million of debt and the assumption
of approximately $6.1 million of debt related to a capital lease. In the event
that the Spin-Off has not been consummated on or before July 1, 1998 and each
third month thereafter, each selling stockholder in the PACE Acquisition will
have the option to require the Company to pay $13.33 per share in cash in lieu
of each share of the Company's Class A Common Stock (the "PACE Option").
Broadcasting has guaranteed the full and timely performance of all of the
Company's obligations under the agreement relating to the PACE Acquisition
until the shares of Class A Common Stock have been delivered or the PACE Option
shall have been exercised by each selling stockholder in the PACE Acquisition.
The PACE Acquisition Agreement provides that each PACE seller will
have an option, exercisable for 90 days after the fifth anniversary of the
consummation of the PACE Acquisition, to require the Company to repurchase up
to one-third of the Class A Common Stock of the Company received by that seller
(representing 500,000 shares in the aggregate) for $33.00 in cash per share.
With certain limited exceptions, these option rights are not assignable by the
sellers.
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Acquisition of The Contemporary Group
On February 27, 1998, the Company acquired The Contemporary Group
("Contemporary"), a fully-integrated live entertainment and special event
promoter and producer, venue operator and consumer marketer (the "Contemporary
Acquisition"). The Contemporary Acquisition involved the merger of Contemporary
International Productions Corporation with and into the Company, the
acquisition by a wholly-owned subsidiary of the Company of substantially all of
the assets, excluding certain cash and receivables, of the remaining members of
Contemporary and the acquisition of the 50% interest in the Riverport
Amphitheatre Joint Venture not owned by Contemporary. The total consideration
of the Contemporary Acquisition was approximately $101.4 million, comprised of
$72.8 million in cash, a payment for working capital of approximately $9.9
million and shares of the Company's Series A redeemable convertible preferred
stock (the "Series A Preferred Stock") valued at approximately $18.7 million
which, upon consummation of the Spin-Off, will automatically convert into
1,402,850.7 shares of the Company's Class A Common Stock. If the Spin-Off is
not consummated by July 1, 1998, then the shares of Series A Preferred Stock
will be redeemed by the Company for the greater of their fair market value (as
determined in good faith by the Board of Directors of the Company) or $18.7
million. Broadcasting has guaranteed the repayment of the redemption price,
which guarantee will terminate upon consummation of the Spin-Off.
In the Contemporary Acquisition Agreement, the Company agreed to make
payments to any Contemporary sellers who own shares of Class A Common Stock of
the Company on the second anniversary of the consummation of the Contemporary
Acquisition. These payments will be due only if the average trading price of
the Class A Common Stock during the 20-day period ending on the anniversary
date is less than $13.33.
Acquisition of The Network Magazine Group and SJS Entertainment
On February 27, 1998, the Company and its wholly-owned subsidiary, SFX
Network Group, LLC, (i) acquired all of the outstanding capital stock of The
Album Network, Inc. and SJS Entertainment Corporation ("SJS"), (ii) acquired
substantially all of the assets and properties, and assumed certain labilities
and obligations, of The Network 40, Inc. and (iii) acquired an office building
and related property (the "Real Property") used in the business of The Album
Network, Inc. and The Network 40, Inc. (the "Network Acquisition"). The Album
Network, Inc. and The Network 40, Inc. are publishers of trade magazines for
the radio broadcasting industry and SJS is an independent creator, producer and
distributor of music-related programming, services and research. The total
purchase price in the Network Acquisition was approximately $66.8 million,
comprised of $52.0 million in cash, a payment of approximately $1.8 million for
working capital in excess of $500,000, reimbursed sellers' costs of
approximately $500,000, the purchase of the Real Property for approximately
$2.5 million and the issuance of approximately 750,188 shares of the Company's
Class A Common Stock valued at approximately $10 million. Such shares shall be
issued upon the consummation of the Spin-Off. If the Spin-Off does not occur
prior to June 30, 1998, at the option of the persons and entities receiving
shares of Class A Common Stock in the Network Acquisition, the Company may be
required to pay $10 million (plus interest at a rate of 10% per annum from the
date of closing) in lieu of issuing shares of the Company's Class A Common
Stock. The $2.5 million purchase price for the Real Property was comprised of
cash of $700,000 and the assumption of debt of $1.8 million.
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Pursuant to the agreement relating to the Network Acquisition, the
Company has agreed to increase the purchase price in the Network Acquisition
(not including the purchase price for the Real Property) based on actual 1998
EBITDA (as defined in the agreement relating to the Network Acquisition) of the
companies and assets other than the Real Property acquired in the Network
Acquisition as follows: (a) by $4.0 million if the 1998 EBITDA equals $9.0
million, (b) by an additional $4 for each $1 of additional 1998 EBITDA between
$9.0 million and $10.0 million, and (c) by an additional $6 for each $1 of
additional 1998 EBITDA between $10.0 million and $11.0 million. This contingent
consideration of up to $14.0 million is payable in stock or, in certain
circumstances, in cash no later than March 20, 1999.
Acquisition of Concert/Southern Promotions
On March 4, 1998, the Company, through its indirect wholly-owned
subsidiary, Atlanta Concerts, Inc., acquired Concert/Southern Promotions, a
promoter of live music entertainment in the Atlanta metropolitan area, for a
total consideration of $16.9 million, including $300,000 for a working capital
adjustment (the "Concert/Southern Acquisition"; the BGP Acquisition, the PACE
Acquisition, the Pavilion Acquisition, the Contemporary Acquisition, the
Network Acquisition and the Concert/Southern Acquisition are collectively
referred to as the "Acquisitions").
The purchase price in each of the Acquisitions was determined by
arms-length negotiations between the Company and the other parties thereto. The
purchase price of the Acquisitions was financed from the proceeds of an
offering exempt from the registration requirements of the Securities Act of
1933, as amended, of $350 million in aggregate principal amount of the
Company's 9 1/8% Senior Subordinated Notes due 2008, which was consummated on
February 11, 1998 (the "Offering") and borrowings under the Credit Agreement
(as such term is defined below).
The foregoing descriptions do not purport to be complete descriptions
of the terms of the acquisition agreements relating to the Acquisitions and are
qualified by reference to such acquisition agreements, copies of which are
attached hereto as exhibits and incorporated herein by reference. Pursuant to
such acquisition agreements, the Company (i) under certain circumstances may be
required to repurchase shares of its Class A Common Stock or make additional
payments in connection therewith and, in the event that the Spin-Off does not
occur, the Company would have to pay approximately $56.2 million in lieu of the
Company's Class A Common Stock, (ii) has granted certain rights of first
refusal, certain of which are exercisable at 95% of the proposed purchase
price, and (iii) in connection with the PACE Acquisition, has granted Brian
Becker, who has been appointed to the Company's Board of Directors, the option
to acquire, after the second anniversary of the consummation of the PACE
Acquisition, the Company's then existing motor sports line of business (or, if
that business has previously been sold, the Company's then existing theatrical
line of business) at its then fair market value.
The approximately 4.2 million shares of the Company's Class A Common
Stock expected to be issued in connection with the Acquisitions have been valued
by the applicable parties at $13.33 per share for purposes of calculating the
consideration to be paid in the Acquisitions. Such valuation is based upon
certain financial projections developed jointly by the Company and the relevant
sellers and there can be no assurance that the assumptions upon which the
valuation is based will, in fact, be correct or that the valuation will
approximate the actual trading price. To the knowledge of management of the
Company, at the time that the acquisition agreements relating to the
Acquisitions were executed there was no trading market in the shares of
Class A Common Stock of the Company. Recently, certain broker/dealers have
begun trading derivative securities representing the right to acquire shares
of the Class A Common Stock on a when-issued basis.
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The prices at which the derivative securities have been trading are not
necessarily representative of how the market will value the shares of Class A
Common Stock of the Company subsequent to the Spin-Off. On March 9, 1998, the
last sale price on the OTC Bulletin Board of the right to acquire a share of
Class A Common Stock was $19.75.
ITEM 5. OTHER EVENTS.
Execution of Credit Agreement
On February 26, 1998, the Company, its subsidiaries and the lenders
that are parties thereto executed a Credit and Guarantee Agreement (the "Credit
Agreement") which established a $300.0 million senior secured credit facility
comprised of (i) a $150.0 million eight-year term loan (the "Term Loan") and
(ii) a $150.0 million seven-year reducing revolving credit facility. Borrowings
under the Credit Agreement are secured by substantially all of the assets of
the Company, including a pledge of the outstanding stock of substantially all
of its subsidiaries and guaranteed by substantial all of the Company's
subsidiaries. On February 27, 1998 the Company borrowed the Term Loan.
The foregoing description of the terms of the Credit Agreement does
not purport to be complete and is qualified by reference to the Credit
Agreement, a copy of which is attached hereto as an exhibit and incorporated
herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
(a) Financial Statements of Businesses Acquired
The required financial statements will be filed no later than 60 days
after the date this Form 8-K was required to be filed.
(b) Pro Forma Financial Information
The required pro forma financial information will be filed no later
than 60 days after the date this Form 8-K was required to be filed.
(c) Exhibits
2.1 Stock Purchase Agreement, dated as of December 11, 1997,
among each of the shareholders of BG Presents, Inc. and
BGP Acquisition, LLC (incorporated by reference to Exhibit
10.19 to the Registration Statement on Form S-1
(Registration No. 333-43287) of SFX Entertainment, Inc.
filed with the Securities and Exchange Commission on
December 24, 1997).
2.2 Stock Purchase Agreement, dated as of December 12, 1997,
by and among PACE Entertainment Corporation, the holders
of the Common Stock of PACE Entertainment Corporation
listed on Exhibit 1 to the Stock Purchase Agreement and
SFX Entertainment, Inc. (incorporated by reference to
Exhibit 10.23 to the Registration Statement on Form S-1
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(Registration No. 333-43287) of SFX Entertainment, Inc.
filed with the Securities and Exchange Commission on
December 24, 1997).
2.3 Agreement and Plan of Merger and Asset Purchase Agreement,
dated as of December 10, 1997, by and among SFX
Entertainment, Inc., Contemporary Investments Corporation,
Contemporary Investments of Kansas, Inc., Continental
Entertainment Associates, Inc., Capital Tickets, LP,
Dialtix, Inc., Contemporary International Productions
Corporation, Steven F. Schankman Living Trust, dated
10/22/82, Irving P. Zuckerman Living Trust, dated
11/24/81, Steven F. Schankman and Irving P. Zuckerman
(incorporated by reference to Exhibit 10.17 to the
Registration Statement on Form S-1 (Registration No.
333-43287) of SFX Entertainment, Inc. filed with the
Securities and Exchange Commission on December 24, 1997).
2.4 Stock and Asset Purchase Agreement, dated as of December
2, 1997, by and among SFX Network Group, L.L.C., SFX
Entertainment, Inc., and Elias N. Bird, individually and
as Trustee under the Bird Family Trust u/d/o 11/18/92,
Gary F. Bird, individually and as Trustee under the Gary
F. Bird Corporation Trust u/d/o 2/4/94, Stephen R. Smith,
individually and as Trustee under the Smith Family Trust
u/d/o 7/17/89, June E. Brody, Steven A. Saslow and The
Network 40, Inc. (incorporated by reference to Exhibit
10.21 to the Registration Statement on Form S-1
(Registration No. 333-43287) of SFX Entertainment, Inc.
filed with the Securities and Exchange Commission on
December 24, 1997).
2.5 Purchase and Sale Agreement, dated as of December 15,
1997, by and among Alex Cooley, S. Stephen Selig, III,
Peter Conlon, Southern Promotions, Inc., High Cotton,
Inc., Cooley and Conlon Management, Inc., Buckhead
Promotions, Inc., Northern Exposure, Inc., Pure Cotton,
Inc., Interfest, Inc., Concert/Southern Chastain
Promotions Joint Venture, Roxy Ventures Joint Venture and
SFX Concerts, Inc. (incorporated by reference to Exhibit
10.22 to the Registration Statement on Form S-1
(Registration No. 333-43287) of SFX Entertainment, Inc.
filed with the Securities and Exchange Commission on
December 24, 1997)
2.6 Purchase Agreement, dated as of December 19, 1997, by and
among SM/PACE, Inc., PACE Entertainment Corporation,
Charlotte Amphitheater Corporation, The Westside
Amphitheater Corporation and Viacom Inc. (incorporated by
reference to Exhibit 10.28 to the Registration Statement
on Form S-1 (Reg. No. 333-43287) of SFX Entertainment,
Inc. filed with the Securities and Exchange Commission on
January 22, 1998).
2.7 Letter Purchase Agreement, dated as of December 22, 1997,
by and among SM/PACE, Inc., YM Corp. and PACE
Entertainment Corporation (incorporated by reference to
Exhibit 10.29 to the Registration Statement on Form S-1
(Reg. No. 333-43287) of SFX Entertainment, Inc. filed with
the Securities and Exchange Commission on January 22,
1998).
3.1 Certificate of Amendment to the Certificate of
Incorporation of SFX Entertainment, Inc.,
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as filed with the Secretary of State of the State of
Delaware on February 25, 1998.
3.2 Certificate of Designation relating to the Series A
Preferred Stock of SFX Entertainment, Inc., as filed with
the Secretary of State of the State of Delaware on
February 27, 1998.
4.1 Indenture, dated February 11, 1998, by and among SFX
Entertainment, Inc., certain of its subsidiaries and The
Chase Manhattan Bank (incorporated by reference to Exhibit
10.2 to the Form 8-K of SFX Broadcasting, Inc. (Commission
File No. 0-22486) filed with the Securities and Exchange
Commission on February 18, 1998).
10.1 Registration Rights Agreement, dated as of February 11,
1998, relating to the 9 1/8% Senior Subordinated Notes due
2998 of SFX Entertainment, Inc., by and among SFX
Entertainment, Inc., the subsidiaries of SFX Entertainment
named therein, Lehman Brothers Inc., Goldman, Sachs & Co.,
BNY Capital Markets, Inc. and ING Barings (incorporated by
reference to Exhibit 10.3 to the Form 8-K of SFX
Broadcasting, Inc. (Commission File No. 0-22486) filed
with the Securities and Exchange Commission on February
18, 1998).
10.2 Credit and Guarantee Agreement, dated as of February 26,
1998, by and among SFX Entertainment, the Subsidiary
Guarantors party thereto, the Lenders party thereto,
Goldman Sachs Credit Partners, L.P., as co-documentation
agent, Lehman Commercial Paper Inc., as co-documentation
agent, and The Bank of New York, as administrative agent.
10.4 Purchase Agreement, dated February 5, 1998, relating to
the 9 1/8% Senior Subordinated Notes due 2008 of SFX
Entertainment, Inc., by and among SFX Entertainment, Inc.,
Lehman Brothers Inc., Goldman, Sachs & Co., BNY Capital
Markets, Inc. and ING Barings.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereto duly authorized.
SFX ENTERTAINMENT, INC.
By: /s/ Howard J. Tytel
-----------------------------------
Name: Howard J. Tytel
Title: Executive President
Date: March 10, 1998
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CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
* * * * *
SFX Entertainment, Inc., a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of said
corporation, resolutions were duly adopted proposing and declaring advisable an
amendment to the Certificate of Incorporation of said corporation. Such
resolution reads as follows:
RESOLVED, that the Board of Directors deems it
advisable that the Certificate of Incorporation of the
Company be amended by changing Article Four thereof so that,
as amended, said Article shall be and read as follows:
ARTICLE FOUR: CAPITAL STRUCTURE
4.1 Authorized Shares. The total number of shares of
stock which the Corporation shall have authority to issue is
25,002,000 shares, consisting of the following:
(a) 1,000 shares of Class A Common Stock, par value
$.01 per share (the "Class A Common Stock");
(b) 1,000 shares of Class B Common Stock, par value
$.01 per share (the "Class B Common Stock" and, together with
the Class A Common Stock, the "Common Stock"); and
(c) 25,000,000 shares of Preferred Stock, par value
$.01 per share (the "Preferred Stock").
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4.2 Designations, Preferences, Etc. The designations,
preferences, powers, qualifications, and special or relative
rights, or privileges of the capital stock of the Corporation
shall be as set forth in ARTICLE FIVE and ARTICLE SIX below.
SECOND: That is lieu of a meeting and vote of stockholders,
the sole stockholder has given written consent to said amendment in accordance
with the provisions of Section 228 of the General Corporation Law of the State
of Delaware.
THIRD: That the aforesaid amendment was duly adopted in
accordance with the applicable provisions of Sections 242 and 228 of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, SFX Entertainment, Inc. has caused this
Certificate of Amendment to be signed by Richard A. Liese, its Assistant
Secretary, this 25th day of February,
1998.
SFX ENTERTAINMENT, INC.
By: /s/ Richard A. Liese
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Richard A. Liese, Assistant Secretary
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CERTIFICATE OF DESIGNATION
OF
SERIES A PREFERRED STOCK
OF
SFX ENTERTAINMENT, INC.
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
The undersigned, Michael G. Ferrell, the President of SFX Entertainment,
Inc., a Delaware corporation (the "Corporation"), does hereby certify, solely in
his capacity as an officer of the Corporation, that pursuant to the authority
expressly vested in the Board of Directors of the Corporation by the
Corporation's Certificate of Incorporation, and pursuant to Section 151 of the
General Corporation Law of the State of Delaware (the "DGCL"), the Board of
Directors, at a meeting held on January 15, 1998, duly approved and adopted the
following resolutions, which resolutions remain in full force and effect as of
the date hereof:
RESOLVED, that pursuant to the authority expressly granted to
this Board of Directors by Articles Four and Six of the Certificate of
Incorporation, as amended, of the Corporation, which created and
authorized twenty five million (25,000,000) shares of preferred stock,
par value $.01 per share, all of which shares are unissued and
available for issuance, and in accordance with Section 151 of the
DGCL, this Board of Directors hereby provides for the issuance of a
series of preferred stock consisting of 10 shares and having the
designations, preferences, relative, optional and other special rights
and qualifications, limitations and restrictions as follows:
1. Designation. The designation of such series is "Series A Convertible
Redeemable Preferred Stock" (the "Series A Preferred Stock").
2. General. The Series A Preferred Stock shall initially
consist of 10 shares having a par value of $.01 per share. All shares of Series
A Preferred Stock shall in all respects be equal and shall have the voting
powers,
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designations, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations and restrictions thereof,
as hereinafter set forth. The Board of Directors is expressly authorized
(within the limit of the authorized amount thereof) to cause the shares of
Series A Preferred Stock to be issued from time to time, and to determine the
consideration to be received therefor in cash, property, including stock or
securities of other entities, or services.
3. Dividends. The holders of record of shares of Series A Preferred
Stock shall be entitled to receive cash dividends, when, as and if declared by
the Board of Directors of the Corporation, out of funds legally available for
the payment thereof in accordance with Section 170 of the Delaware General
Corporation Law, pari passu with the holders of shares of Class A common stock,
par value $.01 per share, of the Corporation (the "Class A Stock"); provided,
however, that the holders of record of shares of Series A Preferred Stock shall
be so entitled to receive cash dividends at a rate per share of Series A
Preferred Stock equal to 140,285.07 times the rate payable per share of Class A
Stock.
4. Voting Rights. Except as required by law, the holders of shares of
Series A Preferred Stock shall have no voting rights and their consent shall not
be required for the taking of any corporate action.
5. Conversion.
(a) If, prior to July 1, 1998, SFX Broadcasting, Inc. (the "Parent")
shall effect a distribution to its stockholders and holders of its other
securities of any shares of common stock of the Corporation (the "Spin-off")
then each share of Series A Preferred Stock shall automatically, without any
further action, convert into 140,285.07 shares of Class A Stock (with such
adjustments as may be necessary to avoid the issuance of fractional shares).
(b) If the Parent shall effect the Spin-off prior to July 1, 1998, the
Corporation shall, promptly after the effectiveness of the Spin-off, deliver
written notice of the conversion referred to in Section 5(a) to the holders of
record of the Series A Preferred Stock at such holders' addresses as the same
appear on the stock register of the Corporation, by certified or registered
mail, postage prepaid (the effective date of conversion being hereinafter
referred to as the "Conversion Date"); provided, however, that neither the
failure to give such notice nor any defect therein shall affect the validity of
the Spin-off.
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(c) From and after the Conversion Date, the rights of each holder of
shares of Series A Preferred Stock as such shall terminate and each such holder
shall be deemed to have become the holder or holders of record of the shares of
Class A Stock represented thereby.
(d) Subject to the surrender of any certificate representing shares
of Series A Preferred Stock converted, the Corporation shall, promptly after
delivery of such certificate, issue and deliver in accordance with the
surrendering holder's instructions one or more certificates representing the
shares of Class A Stock issuable as a result of the conversion.
(e) From and after a Spin-off Recapitalization (as defined in Section
9 hereof) the Corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Class A Stock or its treasury shares,
solely for the purpose of issuance upon the conversion of the Series A Preferred
Stock as provided in this Section 5, such number of shares of Class A Stock as
shall then be issuable upon the conversion of all then outstanding shares of
Series A Preferred Stock.
(f) The issuance of certificates for Class A Stock upon conversion of
Series A Preferred Stock shall be made without charge to the holders of such
shares for any stamp, transfer or issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of Class A Stock.
6. Redemption.
(a) Each share of Series A Preferred Stock that remains outstanding on
July 1, 1998 shall be redeemed by the Corporation, out of funds legally
available therefor, at a redemption price per share equal to the sum of (i)
all accrued but unpaid cash dividends on said share as of June 30, 1998 plus
(ii) the product of (x) 140,285.07 times (y) the greater of $13.33 or the
Board of Director's good-faith determination of the fair market value on such
date of each share of Class A Common Stock (assuming that the shares to be
issued in the Spin-off had in fact been issued) (the "Redemption Price"). Such
redemption shall be subject to the terms, conditions and procedures set forth
in Section 6(b) hereof.
(b) (i) In the event of a redemption of Series A Preferred Stock
pursuant to Section 6(a) hereof, written notice with respect to such redemption
(a "Redemption Notice") shall be given by the Corporation to the holders of
record of such securities at such holders' addresses as the same appear on the
stock register of the Corporation, by
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certified or registered mail, postage prepaid; provided, however, that neither
the failure to give a Redemption Notice nor any defect therein shall affect the
validity of the proceeding for the redemption of any shares of the Series A
Preferred Stock. Each such Redemption Notice shall state (x) the number of
shares of Series A Preferred Stock to be redeemed which are owned by the
stockholder receiving such notice; (y) the Redemption Price for such shares
(which shall be subject to adjustment to take into account the accrual of cash
dividends prior to, but not including, July 1, 1998); and (z) the place where
certificates for such shares are to be surrendered for payment of such
Redemption Price.
(ii) From and after July 1, 1998, the rights of each holder of shares
of Series A Preferred Stock shall, with respect to such shares, cease and
terminate; provided, however, that if the Corporation fails to pay or tender
for payment the Redemption Price for any shares of Series A Preferred Stock,
such rights shall continue until the payment or tender for payment thereof.
7. Transferability. Shares of Series A Preferred Stock shall not be
transferable by the holders thereof. The Corporation may appropriately legend
the certificates representing shares of the Series A Preferred Stock to such
effect.
8. No Liquidation Preference. In the event of the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation, the
holders of shares of Series A Preferred Stock then outstanding shall not be
entitled to any liquidation preference, but shall be entitled to be paid out of
the assets of the Corporation available for distribution to its stockholders
pari passu with the holders of shares of Class A Stock; provided, however, that
the holders of record of shares of Series A Preferred Stock shall be so
entitled to be so paid at a rate per share of Series A Preferred Stock equal to
140,285.07 times the rate payable per share of Class A Stock.
9. Anti-Dilution. If the Corporation shall, at any time prior to the
Conversion Date, effect a recapitalization of such character that the shares of
Class A Stock then outstanding shall be changed into or become exchangeable for
a larger or smaller number of shares (including any stock dividend, stock split
or other issuances of Class A Stock without consideration), other than any
recapitalization, stock dividend, stock split or other issuance of Class A
Stock effected in contemplation of or in connection with the Spin-off (a "Spin-
off Recapitalization"), then thereafter, the number of shares of Class A Stock
into which each share of Series A Preferred Stock is convertible shall be
adjusted
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so that the holder of each such share of Series A Preferred Stock shall be
entitled to receive, upon the conversion thereof, the number of shares of Class
A Stock which the holder of such share of Series A Preferred Stock would have
been entitled to receive after the happening of any of the event described
above had such share been converted immediately prior to the happening of such
event or the record date therefor, whichever is earlier.
10. Status of Reacquired Shares. Shares of Series A Preferred Stock that
have been issued and reacquired, converted or redeemed in any manner shall have
the status of authorized and unissued shares of preferred stock of the
Corporation.
11. No Preemptive Rights. The Series A Preferred Stock are not entitled
to any preemptive or subscription rights in respect of any securities of the
Corporation.
RESOLVED, that before the Corporation shall issue any shares of Series
A Preferred Stock, a certificate pursuant to Section 151 of the DGCL shall be
made, executed, acknowledged, filed and recorded in accordance with the
provisions of said Section 151; and
RESOLVED, that the officers of the Corporation be, and each of them
hereby is, authorized, empowered and directed to take all such further action
and to execute, deliver, certify and file all such further instruments and
documents, in the name and on behalf of the Corporation, under its corporate
seal or otherwise, and to pay all such costs and expenses as they shall approve
as necessary or advisable to carry out the intent and accomplish the purposes
of the foregoing resolutions and the transactions contemplated thereby, the
taking of such action and the execution,
<PAGE>
delivery, certification and filing of such instruments and documents to be
conclusive evidence of such approval.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on behalf of
the Corporation as of this 27th day of February 1998.
/s/ Michael G. Ferrel
--------------------------
Michael G. Ferrell,
President
<PAGE>
CREDIT AND GUARANTEE AGREEMENT,
DATED AS OF FEBRUARY 26, 1998,
BY AND AMONG
SFX ENTERTAINMENT, INC.,
THE SUBSIDIARY GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO,
GOLDMAN SACHS CREDIT PARTNERS L.P.
AND
LEHMAN COMMERCIAL PAPER INC.,
AS CO-DOCUMENTATION AGENTS,
AND
THE BANK OF NEW YORK, AS ADMINISTRATIVE AGENT
BNY CAPITAL MARKETS, INC.,
AS LEAD ARRANGER,
AND
GOLDMAN SACHS CREDIT PARTNERS L.P.
AND
LEHMAN COMMERCIAL PAPER INC.,
AS CO-ARRANGERS
<PAGE>
CREDIT AND GUARANTEE AGREEMENT, dated as of February 26, 1998, by and
among SFX ENTERTAINMENT, INC., a Delaware corporation (the "BORROWER"), the
Subsidiary Guarantors (as defined below), the several banks and other parties
from time to time parties hereto (the "LENDERS"), GOLDMAN SACHS CREDIT PARTNERS
L.P. and LEHMAN COMMERCIAL PAPER INC., as co-documentation agents (in such
capacity, the "CO-DOCUMENTATION AGENTS"), and THE BANK OF NEW YORK ("BNY"), as
administrative agent for each of the other Credit Parties hereto (in such
capacity, the "ADMINISTRATIVE AGENT").
ARTICLE 1. DEFINITIONS AND RULES OF INTERPRETATION
1.1 DEFINITIONS
As used in this Agreement, terms defined in the preamble have
the meanings therein indicated, and the following terms have the following
meanings:
"ABR ADVANCES" means the Loans (or any portions thereof), at
such time as they (or such portions) are made and/or being maintained at a rate
of interest based upon the Alternate Base Rate.
"ACCOUNTANTS" means Ernst & Young LLP (or any successor
thereto), or such other firm of certified public accountants of recognized
national standing selected by the Borrower and reasonably satisfactory to the
Administrative Agent.
"ACQUISITION" has the meaning set forth in Section 8.5.
"ACQUISITION CONSIDERATION" has the meaning set forth in
Section 8.5.
"ADJUSTED NET CASH PROCEEDS" means, with respect to any
Disposition as of any date of determination, the amount equal to the difference
between (i) the Net Cash Proceeds from such Disposition, and (ii) the
Reinvested Proceeds in connection with such Disposition.
"ADJUSTED OPERATING CASH FLOW" means, for any period,
Operating Cash Flow in respect of such period, provided, however, that, for
purposes of this definition only, Operating Cash Flow shall be computed, on a
consistent basis, to reflect each of the following during such period as if
they had occurred at the beginning of such period: Material Venue Terminations,
and acquisitions and dispositions made by the Borrower and the Restricted
Subsidiaries. "MATERIAL VENUE TERMINATION" means the expiration or other
termination of any Material Venue leasehold (including any holding by a court
of competent jurisdiction or arbitrator that neither the Borrower nor any
Restricted Subsidiary has a valid leasehold interest in any Material Venue),
except to the extent that, in the determination of Required Lenders, such
Material Venue has been replaced by a substantially similar Venue.
"ADVANCE" means an ABR Advance or a Eurodollar Advance.
<PAGE>
"AFFILIATE" means as to any Person (i) any other Person at
the time directly or indirectly controlling, controlled by or under direct or
indirect common control with such Person, (ii) any other Person of which such
Person at the time owns, or has the right to acquire, directly or indirectly,
ten percent (10%) or more on a consolidated basis of the equity or beneficial
interest of such Person, (iii) any other Person which at the time owns, or has
the right to acquire, directly or indirectly, ten percent (10%) or more of any
class of the capital stock or beneficial interest of such Person, (iv) any
executive officer, director or trustee of such Person, and (v) when used with
respect to an individual, a spouse, any ancestor or descendant, or any other
relative (by blood, adoption or marriage), within the third degree of such
individual.
"AGGREGATE REVOLVING COMMITMENT" means, at any time, the sum
at such time of the Revolving Commitments of all Lenders.
"AGGREGATE REVOLVING COMMITMENT PERCENTAGE" means, on any
date of determination, the percentage equal to a fraction (i) the numerator of
which is the higher of (1) the Aggregate Revolving Exposure or (2) the
Aggregate Revolving Commitment, in either case outstanding on such date, and
(ii) the denominator of which is the sum of (1) the amount determined under
clause (i) of this definition on such date, plus (2) the aggregate unpaid
principal balance of the Term Loans on such date.
"AGGREGATE REVOLVING EXPOSURE" means, at any time, the
aggregate sum at such time of the Revolving Exposures of all Lenders.
"AGGREGATE TERM LOAN PERCENTAGE" means, on any date of
determination, the percentage equal to 100% minus the Aggregate Revolving
Commitment Percentage.
"AGREEMENT" means this Credit and Guarantee Agreement.
"ALTERNATE BASE RATE" means on any date, a rate of interest
per annum equal to the higher of (i) the Federal Funds Effective Rate in effect
on such date plus 1/2 of 1% or (ii) the Prime Rate in effect on such date.
"APPLICABLE MARGIN" means, at all times during which the
applicable period set forth below is in effect: (i) with respect to Revolving
Loans consisting of ABR Advances, the percentage set forth below under the
heading "Revolving Loan ABR Margin" and adjacent to such applicable period,
(ii) with respect to Revolving Loans consisting of Eurodollar Advances and
Letter of Credit Fees, the percentage set forth below under the heading
"Revolving Loan Eurodollar and LC Margin" and adjacent to such applicable
period, (iii) with respect to Term Loans consisting of ABR Advances, the
percentage set forth below under the heading "Term Loan ABR Margin" and
adjacent to such applicable period, and (iv) with respect to Term Loans
consisting of Eurodollar Advances, the percentage set forth below under the
heading "Term Loan Eurodollar Margin" and adjacent to such applicable period:
- 3 -
<PAGE>
<TABLE>
<CAPTION>
Revolving
Revolving Loan Term Term
Loan Eurodollar Loan Loan
ABR and LC ABR Eurodollar
Period Margin Margin Margin Margin
- ------ --------- ---------- ------ ----------
<S> <C> <C> <C> <C>
when the Total
Leverage Ratio
is equal to or greater
than 6.50:1.00 1.250% 2.375% 1.250% 2.375%
when the Total
Leverage Ratio
is equal to or greater
than 6.00:1.00 but
less than 6.50:1.00 1.125% 2.250% 1.250% 2.375%
when the Total
Leverage Ratio
is equal to or greater
than 5.50:1.00 but
less than 6.00:1.00 0.875% 2.000% 1.000% 2.125%
when the Total
Leverage Ratio
is equal to or greater
than 5.00:1.00 but
less than 5.50:1.00 0.625% 1.750% 0.875% 2.000%
when the Total
Leverage Ratio
is equal to or greater
than 4.50:1.00 but
less than 5.00:1.00 0.375% 1.500% 0.875% 2.000%
when the Total
Leverage Ratio
is equal to or greater
than 4.00:1.00 but
less than 4.50:1.00 0.125% 1.250% 0.750% 1.875%
when the Total
Leverage Ratio
is equal to or greater
- 4 -
<PAGE>
than 3.50:1.00 but
less than 4.00:1.00 0.000% 1.000% 0.750% 1.875%
when the Total
Leverage Ratio
is less than 3.50:1.00 0.000% 0.750% 0.750% 1.875%
</TABLE>
During the period commencing on the Effective Date and ending on the
date of delivery to the Administrative Agent of a Compliance Certificate for
the fiscal quarter ending September 30, 1998 pursuant to Section 7.1(c), the
Total Leverage Ratio for purposes of determining the Applicable Margin shall be
deemed to be greater than 6.50:1.00. Thereafter, changes in the Applicable
Margin resulting from a change in the Total Leverage Ratio shall be based upon
the Compliance Certificate most recently delivered pursuant to Section 7.1(c)
or 8.5(a) and shall become effective on the date such Compliance Certificate is
delivered to the Administrative Agent and the Lenders. Notwithstanding anything
to the contrary contained in this definition, if the Borrower shall fail to
deliver to the Administrative Agent a Compliance Certificate on or prior to any
date required hereby, for purposes of calculating the Applicable Margin, the
Total Leverage Ratio from and including such date to the date of delivery to
the Administrative Agent of such Compliance Certificate shall be deemed to be
greater than 6.50:1.00.
"APPLICABLE PROCEEDS" means any and all proceeds of casualty
insurance or condemnation held by the Administrative Agent pursuant to the
Loan Documents in connection with a casualty or condemnation event for which
the conditions for use thereof by the Borrower or any Subsidiary, as set forth
in the Loan Documents, shall not have been satisfied.
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an assignment and
acceptance agreement substantially in the form of Exhibit F.
"AVAILABLE DEBT AMOUNT" means, at any time, an amount equal
to (a) $10,000,000, minus (b) the sum of, without duplication, the following:
(1) the unpaid principal balance of all Indebtedness incurred pursuant to
Section 8.1(g), and (2) the fair market value of all property securing any Lien
under Section 8.2(c).
"AVAILABLE INVESTMENT AMOUNT" means, at any time, an amount
equal to the lesser of (I) $5,000,000 and (II)(a) $5,000,000, minus (b) the sum
of, without duplication, the following: (1) the fair market value of all
consideration paid by the Borrower and the Restricted Subsidiaries in
connection with each merger under Section 8.3(b)(iii), (2) the fair market
value of all consideration paid by the Borrower and the Restricted Subsidiaries
in connection with each investment under Section 8.4(f), and (3) the amount
owing to the Borrower and the Restricted Subsidiaries pursuant to any tax
sharing agreement referred to in Section 8.17(a), plus (c) the aggregate amount
of all cash consideration received by the Borrower and the Restricted
Subsidiaries in connection with the sale or other disposition of any investment
made under Section 8.4(f).
- 5 -
<PAGE>
"BGP STOCK OPTIONS" means options to purchase certain capital
stock of the Borrower to be issued in connection with the acquisition of BG
Presents, Inc. by the Borrower.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States.
"BORROWER OBLIGATIONS" means, collectively, (i) all of the
obligations and liabilities of the Borrower under the Loan Documents, and (ii)
all of the obligations and liabilities of the Borrower under each Secured
Hedging Agreement, 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 Event of Default under Section 9.1(h) or (i) and
including any obligation or liability in respect of any breach of any
representation or warranty and all post-petition interest and funding losses,
whether or not allowed as a claim in any proceeding arising in connection with
such an event.
"BORROWING DATE" means any Business Day on which (i) the
Lenders make Loans or (ii) the Issuer issues a Letter of Credit.
"BROADCASTING" means SFX Broadcasting, Inc., a Delaware
corporation.
"BROADCASTING MERGER AGREEMENT" means the Agreement and Plan
of Merger, dated August 24, 1997, among Broadcasting, SBI Holdings Corporation
and SBI Radio Acquisition Corporation.
"BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which commercial banks located in New York City are authorized or
required by law or other governmental action to be closed, provided that when
used in connection with a Eurodollar Advance, the term shall also exclude any
day on which banks are not open for dealings in dollar deposits in the London
interbank market.
"CAPITAL EXPENDITURES" means, for any period, the sum of the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability) by the Borrower and the Restricted Subsidiaries on a
consolidated basis in accordance with GAAP during such period for fixed or
capital assets (excluding any capitalized interest and any such asset acquired
in connection with normal replacement and maintenance programs properly charged
to current operations and excluding any replacement assets acquired with the
proceeds of insurance).
"CAPITAL LEASE OBLIGATIONS" means, with respect to any
Person, the obligations of such Person to pay rent or other amounts under any
lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, (a) which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such
Person under GAAP, and the amount of such obligations shall be the capitalized
amount thereof determined in accordance with GAAP, or (b) which lease does not
qualify as a Tax Operating Lease. For purposes of this definition, "TAX
OPERATING LEASE" means any "synthetic lease", and
- 6 -
<PAGE>
any other lease (i) that is treated as a lease for purposes of the Code, and
(ii) the lessor under which is treated as the owner of the assets subject to
the lease for purposes of the Code.
"CAPITAL STOCK" means, as to any Person, all shares,
interests, partnership interests, limited liability company interests,
participations, rights in or other equivalents (however designated) of such
Person's equity (however designated) and any rights, warrants or options
exchangeable for or convertible into such shares, interests, participations,
rights or other equity.
"CASH COLLATERAL ACCOUNT" has the meaning set forth in
Section 2.8.
"CASH EQUIVALENTS" means Dollar denominated investments in a.
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in full support thereof) having
maturities of not more than one year from the date of acquisition, b. time
deposits, certificates of deposit and bankers acceptances maturing within 180
days from the date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any domestic
office of any commercial bank having a combined capital surplus and undivided
profits of not less than $100,000,000 and whose (or whose parent company's)
unsecured non-credit supported short-term debt rating at the time of such
acquisition is the highest credit rating obtainable from Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., or any
successor thereto ("S&P") and Moody's Investors Service, Inc. or any successor
thereto ("MOODY'S") or, if rated by only one such rating agency, the highest
credit rating obtainable from such rating agency, c. commercial paper maturing
within 90 days from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from Moody's, d.
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
S&P or Moody's, e. normal business banking accounts, and f. investments in
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"CHANGE IN LAW" means (i) the adoption of any law, rule or
regulation after the Effective Date, (ii) the issuance or promulgation after
the Effective Date of any directive, guideline or request from any Governmental
Authority (whether or not having the force of law), or (iii) any change after
the Effective Date in the interpretation of any existing law, rule, regulation,
directive, guideline or request by any Governmental Authority chargedwith the
administration thereof.
"CHANGE OF CONTROL" means the occurrence of any of the
following: (i) at any time prior to the Spin-Off, the failure of Broadcasting
to own or control 100% of the Capital Stock of the Borrower (other than (a)
with respect to options held by any officer or director of the Borrower, and
(b) in connection with the issuance of the Contemporary Redeemable Stock and
BGP Stock Options), (ii) a "change of control", as such term is defined in the
Subordinated Indenture, (iii) the failure of Robert F.X. Sillerman
("SILLERMAN"), any Affiliate of Sillerman or, together with any executor, heir
or successor appointed to take control of Sillerman's affairs in
- 7 -
<PAGE>
the event of his death, disability or incapacity, to own directly or
indirectly, in the aggregate, of record and beneficially, more than 35% of the
voting power of all issued and outstanding Capital Stock of the Borrower; (iv)
if within 90 days after the date Sillerman ceases to be employed by the
Borrower in his present capacity, a replacement for Sillerman reasonably
satisfactory to the Required Lenders has not been appointed; or (v) any Person
(other than as provided in clauses (i) and (iii) above) shall own,
beneficially, in excess of 10% of the voting power of all issued and
outstanding Capital Stock of the Borrower.
"CODE" means 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" means any and all "Collateral", as defined in
any Security Document.
"COMMITMENT FEE PERCENTAGE" means, at all times during which
the applicable period set forth below is in effect, the percentage set forth
below under the heading "Commitment Fee Percentage" and adjacent to such
applicable period:
<TABLE>
<CAPTION>
Commitment Fee
Period Percentage
- ------ --------------
<S> <C>
when the Total
Leverage Ratio
is equal to or greater
than 4.00:1.00 0.500%
when the Total
Leverage Ratio
is less than 4.00:1.00 0.375%
</TABLE>
During the period commencing on the Effective Date and ending on the
date of delivery to the Administrative Agent of a Compliance Certificate for
the fiscal quarter ending September 30, 1998 pursuant to Section 7.1(c), the
Total Leverage Ratio for purposes of determining the Commitment Fee Percentage
shall be deemed to be greater than 4.00:1.00. Thereafter, changes in the
Commitment Fee Percentage resulting from a change in the Total Leverage Ratio
shall be based upon the Compliance Certificate most recently delivered pursuant
to Section 7.1(c) or 8.5(a) and shall become effective on the date such
Compliance Certificate is delivered to the Administrative Agent and the
Lenders. Notwithstanding anything to the contrary contained in this definition,
if the Borrower shall fail to deliver to the Administrative Agent a Compliance
Certificate on or prior to any date required hereby, for purposes of
calculating the Commitment Fee Percentage, the Total Leverage Ratio from and
including such date to the date of delivery to the Administrative Agent of such
Compliance Certificate shall be deemed to be greater than 4.00:1.00.
- 8 -
<PAGE>
"COMMITMENTS" means, collectively, the Revolving Commitments,
the Term Loan Commitments and the Letter of Credit Commitment, each, a
"COMMITMENT".
"COMPLIANCE CERTIFICATE" has the meaning set forth in Section
7.1(c).
"CONTEMPORARY REDEEMABLE STOCK" means redeemable convertible
preferred stock of the Borrower to be issued in connection with the acquisition
of Contemporary International Productions Corporation by the Borrower.
"CONTRIBUTION" means the contribution referred to in Section
5.5.
"CONTRIBUTION DOCUMENTS" means, collectively, the
Distribution Agreement, the Tax Sharing Agreement and each document, instrument
or other agreement executed or delivered in connection with any of the
foregoing.
"CONVERSION DATE" means the date on which: (i) a Eurodollar
Advance is converted to an ABR Advance, (ii) an ABR Advance is converted to a
Eurodollar Advance or (iii) a Eurodollar Advance is converted to, or continued
as, a new Eurodollar Advance.
"CREDIT PARTY" means the Administrative Agent, the Issuer or
a Lender, as the case may be.
"CREDIT REQUEST" means a request for Loans or a Letter of
Credit substantially in the form of Exhibit B.
"CUSTOMARY LIEN" means any of the following: (a) any Lien
imposed by law for Taxes that are not yet due or are being contested in
compliance with Section 7.4, provided that enforcement of such Lien is stayed
pending such contest; (b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with Section 7.4, provided that
enforcement of each such Lien is stayed pending such contest; (c) pledges and
deposits made in the ordinary course of business in compliance with workers'
compensation, unemployment insurance and other social security laws or
regulations; (d) deposits and pledges to secure the performance of 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; (e) judgment liens in
respect of judgments that would not cause an Event of Default under Section
9.1(j); (f) zoning ordinances, easements, rights of way, minor defects,
irregularities, and other similar encumbrances on real property imposed by law
or arising in the ordinary course of business that do not secure any monetary
obligation in excess of $500,000 and (i) do not materially detract from the
value of the affected property or materially interfere with the ordinary
conduct of business of the Borrower or any Restricted Subsidiary, and (ii) do
not in the aggregate have a Material Adverse effect; and (g) Liens created
under the Loan Documents.
- 9 -
<PAGE>
"DEFAULT" means any event or condition which constitutes an
Event of Default or which, with the giving of notice, the lapse of time, or any
other condition, would, unless cured or waived, become an Event of Default.
"DISPOSITION" has the meaning set forth in Section 8.6(d).
"DISQUALIFIED STOCK" means any Capital Stock of any Person
that, by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is 91 days after the date on which the Subordinated
Notes mature, provided, however, that (i) any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof have the right
to require such Person to repurchase such Capital Stock upon the occurrence of
certain events shall not constitute Disqualified Stock if the terms of such
Capital Stock provide that the Borrower may not repurchase or redeem any such
Capital Stock pursuant to such provisions unless such repurchase or redemption
complies with Section 8.7 of this Agreement, and (ii) the Contemporary
Redeemable Stock shall not constitute 'Disqualified Stock'.
"DISTRIBUTION AGREEMENT" means the Distribution Agreement to
be entered into by Broadcasting and the Borrower prior to the Spin-Off that
will cover the method of effecting the Spin-Off, the transfer and assumption of
assets and obligations, transferred employees, working capital and other
matters as described in the offering memorandum dated February 5, 1998
regarding the Subordinated Notes.
"DOLLARS" and "$" mean lawful currency of the United States.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is not a
Foreign Subsidiary.
"EFFECTIVE DATE" means the date on which the conditions
specified in Article 5 are satisfied (or waived in accordance with Section
11.1).
"ENVIRONMENTAL LAWS" has the meaning set forth in Section 4.7.
"EQUITY ISSUANCE" means the issuance of any equity securities
or the receipt of any capital contribution, in each case by the Borrower, other
than (i) any issuance of equity securities to, or receipt of any such capital
contribution from, the Borrower, (ii) the issuance of stock in connection with
an Acquisition, (iii) the issuance of common stock to the directors of the
Borrower who were holders of options or stock appreciation rights in
Broadcasting as of the Spin-Off record date, whether or not vested, or (iv) the
issuance of common stock pursuant to a stock option plan, or for executive
compensation, in either case in the ordinary course of business.
"ERISA" means 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.
- 10 -
<PAGE>
"ERISA AFFILIATE" means any Person which is a member of any
group of organizations within the meaning of Sections 414(b) or (c) of the
Code (or, solely for purposes of potential liability under Section 302(c)(11)
of ERISA and Section 412(c)(11) of the Code and the lien created under Section
302(f) of ERISA and Section 412(n) of the Code, Sections 414(m) or (o) of the
Code) of which the Borrower or any of its Subsidiaries is a member.
"ERISA EVENT" means (i) a "reportable event", as defined in
Section 4043 of ERISA with respect to a Pension Plan (other than an event for
which the 30-day notice period is waived), (ii) the existence with respect to
any Pension Plan of an "accumulated funding deficiency" (as defined in Section
412 of the Code or Section 302 of ERISA), whether or not waived; (ii) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Pension Plan; (iv) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Pension Plan; (vi) the receipt by the Borrower or any ERISA
Affiliate from the PBGC or a plan administrator of any notice relating to an
intention to terminate any Pension Plan or Pension Plans or to appoint a
trustee to administer any Pension Plan; (vii) the incurrence by the Borrower or
any of its ERISA Affiliates of any liability with respect to the withdrawal or
partial withdrawal from any Pension Plan or Multiemployer Plan; or (viii) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EURODOLLAR ADVANCES" means, collectively, the Loans (or any
portions thereof), at such time as they (or such portions) are made and/or
being maintained at a rate of interest based upon the Eurodollar Rate.
"EURODOLLAR RATE" means, with respect each Eurodollar
Advance, a rate of interest per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%), as determined by the Administrative Agent, obtained by
dividing:
(A) the rate of interest per annum as determined by
the Administrative Agent, equal to the rate, as reported by BNY to the
Administrative Agent, quoted by BNY to leading banks in the London interbank
eurodollar market as the rate at which BNY is offering dollar deposits in an
amount approximately equal to its Specified Percentage of such Eurodollar
Advance and having a period to maturity equal to the Interest Period applicable
to such Eurodollar Advance at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, 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 marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board and any other
banking authority to which BNY and other major money center banks chartered
under the laws of the United States or any State thereof are subject, in
respect of eurocurrency
- 11 -
<PAGE>
funding (currently referred to as "eurocurrency liabilities" in Regulation D)
without benefit of credit for proration, exceptions or offsets which may be
available from time to time to BNY.
"EVENT OF DEFAULT" has the meaning set forth in Section 9.1.
"EXCESS CASH FLOW" means, in respect of any period, Operating
Cash Flow for such period less the sum of each of the following with respect to
the Borrower and the Restricted Subsidiaries on a consolidated basis in
accordance with GAAP for such period: (a) Fixed Charges, (b) with respect to
all Indebtedness of the Borrower and the Restricted Subsidiaries under
revolving credit facilities (including, without limitation, the facility
evidenced hereby), an amount equal to the excess, if any, of (i) the aggregate
outstanding principal balance of all such Indebtedness at the beginning of such
period, minus (ii) the aggregate amount of all commitments under such revolving
credit facilities at the end of such period, and (c) with respect to all other
Indebtedness of the Borrower and the Restricted Subsidiaries, all repayments of
such Indebtedness which were made during such period.
"EXCLUDED SUBSIDIARIES" means each of the Subsidiaries listed
on Schedule 1.1A, in each case so long as it is not a wholly-owned Subsidiary
of the Borrower.
"EXCLUDED TAX" means as to any Person (a) a Tax imposed by
one of the following jurisdictions or by any political subdivision or taxing
authority thereof: (i) the United States, (ii) the jurisdiction in which such
Person is organized, (iii) the jurisdiction in which such Person's principal
office is located, or (iv) in the case of each Credit Party, any jurisdiction
in which such Credit Party is deemed to be doing business, and (b) in the case
of any Foreign Credit Party, any withholding Tax that is imposed on amounts
payable to such Foreign Credit Party at the time such Foreign Credit Party
becomes a party to this Agreement (or designates a new lending office) or is
attributable to such Foreign Credit Party's failure to comply with Section
3.7(c), except to the extent that such Foreign Credit Party (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 3.7; in either case which Tax (a) is
any income tax or franchise tax imposed on all or part of the net income or net
profits of such Person or (b) represents interest, fees or penalties for
payment of any such income tax or franchise tax.
"EXTENSIONS OF CREDIT" means, collectively, the Loans, the
Letters of Credit and any participations therein pursuant to Section 2.6(c).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, a rate per
annum (expressed as a decimal, rounded upwards, if necessary, to the next
higher 1/100 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 Effective 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
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day, the Federal Funds Effective Rate for such day shall be the average of the
quotations for such day on such transactions received by BNY as determined by
BNY and reported to the Administrative Agent.
"FEES" has the meaning set forth in Section 2.7(a).
"FINANCIAL OFFICER" means, as to any Person, the chief
financial officer, controller or treasurer of such Person or such other officer
as shall be satisfactory to the Administrative Agent.
"FIXED CHARGES" means, for the most recently completed twelve
month period, the sum, without duplication, of each of the following with
respect to the Borrower and the Restricted Subsidiaries for such period on a
consolidated basis in accordance with GAAP: (a) all interest expense, (b)
commitment fees incurred with respect to Total Debt, (c) principal amounts that
became payable (whether or not paid and whether at the stated maturity, by
acceleration or by reason of optional prepayment or redemption or otherwise) by
the Borrower or any Restricted Subsidiary in respect of Indebtedness of the
Borrower or the Restricted Subsidiaries during such period, (d) cash income
taxes paid, (e) Capital Expenditures (excluding certain special capital
expenditures associated with the Jones Beach Marine Amphitheater, the Seattle
Amphitheater, the Atlanta Amphitheater and the PNC Bank Arts Center and
acceptable to the Administrative Agent), and (f) the positive difference, if
any, between (1) all cash consideration paid by the Borrower and the Restricted
Subsidiaries for Unconsolidated Investments, minus (2) all returns of (but not
on) the investments by the Borrower and the Restricted Subsidiaries in
Unconsolidated Investments to the extent not included in net income.
"FIXED CHARGES RATIO" means, for the most recently completed
twelve month period, the ratio of (a) Operating Cash Flow for such period, to
(b) Fixed Charges for such period.
"FOREIGN CREDIT PARTY" means any Credit Party that is
organized under the laws of a jurisdiction other than the United States or any
State thereof.
"FOREIGN SUBSIDIARY" means any Subsidiary that is a
"controlled foreign corporation" within the meaning of Section 957 of the Code.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States.
"GOVERNMENTAL AUTHORITY" means any foreign, federal, state,
municipal or other government, or any department, commission, board, bureau,
agency, public authority or instrumentality thereof, or any court or
arbitrator.
"GUARANTEE" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or in effect
guaranteeing any return on any investment made by another Person, or any
Indebtedness, lease, dividend or other obligation (a "primary obligation") of
any other Person (a "primary obligor") in any manner, whether directly
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or indirectly, including any obligation of the guarantor, direct or indirect
(i) to purchase any primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of a primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the beneficiary of
any primary obligation of the ability of a primary obligor to make payment of a
primary obligation, (iv) otherwise to assure or hold harmless the beneficiary
of a primary obligation against loss in respect thereof, and (v) in respect of
the liabilities of any partnership in which a secondary obligor is a general
partner, except to the extent that such liabilities of such partnership are
nonrecourse to such secondary obligor and its separate property, provided,
however, that the term "Guarantee" shall not include the endorsement of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee shall be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof as determined by the guarantor in good faith.
"GUARANTEE SUPPLEMENT" means a Guarantee Supplement in the
form of Exhibit H hereto.
"GUARANTOR OBLIGATIONS" means, with respect to each
Subsidiary Guarantor, all of the obligations and liabilities of such Subsidiary
Guarantor under the Loan Documents, whether fixed, contingent, now existing or
hereafter arising, created, assumed, incurred or acquired.
"HEDGING AGREEMENT" means any interest rate swap, cap or
collar arrangement or any other derivative product customarily offered by banks
or other financial institutions to their customers in order to manage the
exposure of such customers to interest rate fluctuations.
"INCREASE SUPPLEMENT" has the meaning set forth in Section
2.3(f).
"INDEBTEDNESS" means, as to any Person, at a particular time,
all items which constitute, without duplication, (i) indebtedness for borrowed
money, (ii) indebtedness in respect of the deferred purchase price of property
(other than trade payables incurred in the ordinary course of business), (iii)
indebtedness evidenced by notes, bonds, debentures or similar instruments,
(iv) obligations with respect to any conditional sale or title retention
agreement, (v) 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 thereof, (vi) liabilities secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned by such Person (other than carriers',
warehousemen's, mechanics', repairmen's or other like nonconsensual statutory
Liens arising in the ordinary course of business), even though such Person has
not assumed or otherwise become liable for the payment thereof, (vii) Capital
Lease Obligations, (viii) all obligations of such Person in respect of
Disqualified Stock, and (ix) all
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Guarantees by such Person of Indebtedness (of the types referred to in clauses
(i) through (viii)) of others. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"INDEMNIFIED TAX" means as to any Person, any Tax, except (i)
an Excluded Tax imposed on such Person and (ii) any interest, fees or penalties
for late payment thereof imposed on such Person.
"INITIAL TRANSACTIONS" means (a) the Contribution, (b) the
issuance of the Subordinated Notes, (c) the Pace Acquisition, (d) the Pavilion
Partners Acquisition, (e) the execution and delivery of the Loan Documents, and
(f) the Extensions of Credit on the first Borrowing Date.
"INSOLVENT" means, with respect to any Person, (a) the sum of
the assets, at a fair valuation, of such Person does not exceed its debts, (b)
such Person has incurred debts beyond its ability to pay such debts as such
debts mature, (c) such Person believes that, in the ordinary course of its
business during the reasonably foreseeable future, it will incur debts beyond
its ability to pay such debts as such debts mature, and (d) such Person has
insufficient capital with which to conduct its business. For purposes of this
definition only, "DEBT" means any liability on a claim, and "CLAIM" means any
(i) right to payment, whether such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, or (ii) right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether such
right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, unsecured, liquidated or
unliquidated.
"INTELLECTUAL PROPERTY" means all patents, trademarks,
tradenames, copyrights, trade secrets, confidential or proprietary technical
and business information and other similar property and all licenses related
thereto.
"INTEREST PERIOD" means, subject to Section 3.4, as to each
Eurodollar Advance, the period commencing on, as the case may be, the Borrowing
Date or Conversion Date with respect thereto and ending one, two, three or six
months thereafter, as selected by the Borrower in its Credit Request or Notice
of Conversion.
"ISSUER" means BNY.
"LETTER OF CREDIT" and "LETTER has the meaning set forth in
Section 2.6 (a).
"LETTER OF CREDIT COMMITMENT" means the commitment of the
Issuer to issue Letters of Credit having an aggregate outstanding face amount
up to $20,000,000.
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"LETTER OF CREDIT EXPOSURE" means in respect of any Lender at
any time, an amount equal to (i) the sum (without duplication) at such time of
(x) the aggregate undrawn face amount of the outstanding Letters of Credit, (y)
the aggregate amount of unpaid drafts drawn on all Letters of Credit, and (z)
the aggregate unpaid Reimbursement Obligations, multiplied by (ii) such
Lender's Revolving Percentage at such time.
"LETTER OF CREDIT FEES" has the meaning set forth in Section
3.2(b).
"LIEN" means any mortgage, pledge, hypothecation, assignment,
encumbrance, lien (statutory or other), or other security agreement or security
interest of any kind or nature whatsoever, including any conditional sale or
other title retention agreement and any capital or financing lease having
substantially the same economic effect as any of the foregoing.
"LINE OF BUSINESS" means the live entertainment business and
any business reasonably similar, complimentary, ancillary or related thereto,
including the Pending Acquisitions.
"LOAN DOCUMENTS" means, collectively, this Agreement, the
Notes, the Security Documents, each Secured Hedging Agreement and all other
agreements, instruments and documents executed or delivered in connection
herewith.
"LOAN PARTIES" means, collectively, the Borrower and each
Subsidiary Guarantor.
"LOANS" means Revolving Loans and Term Loans.
"MANAGING PERSON" means, with respect to any Person that is
(i) a corporation, its board of directors, (ii) a limited liability company,
its board of control, managing member or members, (iii) a limited partnership,
a general partner, (iv) a general partnership or a limited liability
partnership, its managing partner or executive committee or (v) any other
Person, the managing body thereof or other Person analogous to the foregoing.
"MARGIN STOCK" has the meaning set forth in Regulation U.
"MATERIAL ADVERSE" means, with respect to any change or
effect, (i) a material adverse change in, or effect on, as the case may be,
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Restricted Subsidiaries taken as a whole,
(ii) an adverse change in, or effect on, as the case may be, the ability of any
Loan Party to perform any material obligation under the Loan Documents to which
it is a party, (iii) an adverse change in, or effect on, as the case may be,
any material right of or material benefit available to any Credit Party under
the Loan Documents, or (iv) a material adverse change in, or effect on, as the
case may be, the legality or enforceability of any Loan Document.
"MATERIAL AGREEMENTS" means, collectively, (a) the
Transaction Documents, and (b) each Venue lease.
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"MATERIAL LIABILITIES" means, on any date, with respect to
the Borrower, any Restricted Subsidiaries, or any combination thereof: (i) all
Indebtedness (other than Indebtedness under the Loan Documents), (ii) the net
termination obligations in respect of one or more Hedging Agreements
(calculated as if such Hedging Agreements were terminated as of such date), and
(iii) other liabilities, in each case whether as principal, guarantor, surety
or other obligor, in an aggregate principal amount exceeding $500,000.
"MATERIAL VENUE" means as of any date, any Venue which
contributes $500,000 or more to Adjusted Operating Cash Flow for the most
recently completed twelve month period.
"MERGER" means the merger of SBI Radio Acquisition
Corporation into Broadcasting pursuant to the Merger Documents.
"MERGER DOCUMENTS" means the Broadcasting Merger Agreement,
together with all documents, instruments and other agreements executed or
delivered in connection therewith.
"MINIMUM AMOUNT" means in respect of (i) ABR Advances,
$1,000,000 or such amount plus a whole multiple of $500,000 in excess thereof,
and (ii) Eurodollar Advances, $5,000,000 or such amount plus a whole multiple
of $1,000,000 in excess thereof.
"MORTGAGE" means a mortgage, deed of trust, assignment of
leases and rents, leasehold mortgage or other security document granting a Lien
on any Mortgaged Property to secure the Borrower Obligations or the Guarantor
Obligations, as the case may be. Each Mortgage shall be satisfactory in form
and substance to the Administrative Agent.
"MORTGAGED PROPERTY" means each parcel of real property and
improvements thereto owned or leased by a Loan Party with respect to which a
Mortgage is granted pursuant to Section 7.11.
"MULTIEMPLOYER PLAN" means a Pension Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means, cash proceeds received from a
Disposition, an Equity Issuance, a casualty loss or a condemnation after
deduction of taxes payable in cash in connection therewith and net of
reasonable transaction expenses.
"NON-RECOURSE DEBT" means Indebtedness (i) as to which
neither the Borrower nor any Restricted Subsidiary (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
of otherwise) or (c) constitutes the lender; (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness (other than
the Notes being offered hereby) of the Borrower or any of its Restricted
Subsidiaries to declare a default on such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity; and
(iii) as to which the lenders
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have been notified in writing that they will not have any recourse to the stock
or assets of the Borrower or any of its Restricted Subsidiaries.
"NOTES" means with respect to each Lender in respect of such
Lender's Loans, a promissory note, substantially in the form of Exhibit A,
payable to the order of such Lender, each such promissory note having been made
by the Borrower and dated the Effective Date, including all replacements
thereof and substitutions therefor.
"NOTICE OF CONVERSION" has the meaning set forth in Section
3.3(a).
"OPERATING CASH FLOW" means, with respect to the Borrower and
the Restricted Subsidiaries on a consolidated basis in accordance with GAAP for
any period: (i) revenues minus (ii) expenses (excluding depreciation,
amortization, interest expense and income tax expense), minus (iii) capitalized
pre-production costs, plus (iv) certain non-recurring expense items and
non-cash expense items in each case described on Schedule 1.1B hereto or
acceptable to the Administrative Agent, plus (v) the lesser of (a) the equity
income from Unconsolidated Investments, and (b) cash dividends and other cash
distributions received from Unconsolidated Investments, in each case to the
extent that the same would appear on a consolidated income statement of the
Borrower in respect of such period prepared in accordance with GAAP, provided,
however, that the total amount determined under this clause (v) and added to
Operating Cash Flow shall not exceed 10% of Operating Cash Flow before
corporate overhead, minus (vi) with respect to each Excluded Subsidiary, the
amount equal to (1) the Operating Cash Flow attributable to such Excluded
Subsidiary multiplied by (2) the percentage of the ownership interests in such
Excluded Subsidiary which are not owned by the Borrower or any Subsidiary
Guarantor.
"ORGANIZATIONAL DOCUMENTS" means as to any Person which is
(i) a corporation, the certificate or articles of incorporation and by-laws of
such Person, (ii) a limited liability company, the limited liability company
agreement or similar agreement of such Person, (iii) a partnership, the
partnership agreement or similar agreement of such Person, or (iv) any other
form of entity or organization, the organizational documents analogous to the
foregoing.
"OTHER TAXES" means any and all current or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies that arise from any payment made hereunder or from the execution,
delivery, registration or enforcement of, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Loan
Documents or otherwise with respect to, the Loan Documents.
"PACE" means PACE Entertainment Corporation, a Texas
corporation.
"PACE ACQUISITION" means the acquisition by the Borrower of
Pace (a) pursuant to the Pace Acquisition Documents as in effect on the date
hereof, and (b) in a manner in all respects satisfactory to the Administrative
Agent.
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"PACE ACQUISITION DOCUMENTS" means, collectively, (i) the
Stock Purchase Agreement, dated as of December 12, 1997, among Pace, the
holders of the Capital Stock of Pace and the Borrower, and (ii) all other
documents executed in connection therewith.
"PAVILION PARTNERS" means Pavilion Partners, a general
partnership formed under the laws of the State of Delaware.
"PAVILION PARTNERS ACQUISITION" means the acquisition by the
Borrower of all of the Capital Stock of YM Corp., Charlotte Amphitheater
Corporation, The Westside Amphitheater Corporation, the partners of
Amphitheater Entertainment Partnership and all of the Capital Stock of the
other parties in Pavilion Partners (a) pursuant to the Pavilion Partners
Acquisition Documents as in effect on the date hereof, and (b) in any event in
a manner in all respects satisfactory to the Administrative Agent.
"PAVILION PARTNERS ACQUISITION DOCUMENTS" means,
collectively, the Purchase Agreement, dated as of December 17, 1997, among
Pace, SM/PACE, Inc., Viacom, Inc., Charlotte Amphitheater Corporation and The
Westside Amphitheater Corporation, a letter agreement, dated December 22, 1997,
between Pace and YM Corp., together with all documents, instruments and other
agreements executed or delivered in connection therewith.
"PAYMENT OFFICE" the office of the Administrative Agent set
forth in Section 11.2(b).
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, or any Governmental
Authority succeeding to the functions thereof.
"PENDING ACQUISITION DOCUMENTS" means, collectively, the
following:
(A) the Stock Purchase Agreement, dated as of December 11,
1997, among certain shareholders of BG Presents, Inc., a California corporation
and BGP Acquisition, LLC, a Delaware limited liability company,
(B) the Stock and Asset Purchase Agreement, dated December 2,
1997, among SFX Network Group, L.L.C., the Borrower, Elias N. Bird, Gary F.
Bird, Stephen R. Smith, June E. Brody, Stephen A Saslow and The Network 40,
Inc.,
(C) the Purchase and Sale Agreement, dated December 15, 1997,
by and among Alex Cooley, S. Stephen Selig, III, Peter Conlon, Southern
Promotions, Inc., High Cotton, Inc., Cooley and Conlon Management, Inc.,
Buckhead Promotions, Inc., Northern Exposure, Inc., Pure Cotton, Inc.,
Interfest, Inc., Concert/Southern Chastain Promotions Joint Venture, Roxy
Ventures Joint Venture and SFX Concerts, Inc.,
(D) the Agreement and Plan of Merger and Asset Purchase
Agreement, dated as of December 12, 1997, by and among the Borrower,
Contemporary Investments Corporation,
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Contemporary Investments of Kansas, Inc., Continental Entertainment Associates,
Inc., Capital Tickets, LP, Dialtix, Inc., Contemporary International
Productions Corporation, Steven F. Schankman Living Trust, dated 10/22/82,
Irving P. Zuckerman Living Trust, dated 11/24/81, Steven F. Schankman and
Irving P. Zuckerman, and
(E) all documents, instruments and other agreements executed
or delivered in connection with any of the foregoing.
"PENDING ACQUISITIONS" means, collectively, each of the
acquisitions by the Borrower and the Guarantor Subsidiaries contemplated by the
Pending Acquisition Documents.
"PENSION PLAN" means, at any date of determination, any
employee pension benefit plan (other than a Multiemployer Plan), the funding
requirements of which (under Section 302 of ERISA or Section 412 of the Code)
are, or at any time within the six years immediately preceding such date, were
in whole or in part, the responsibility of the Borrower or any ERISA Affiliate.
"PERFECTION CERTIFICATE" means a certificate in the form of
Annex A to the Security Agreement or any other form approved by the
Administrative Agent.
"PERMITTED LIENS" has the meaning set forth in Section 8.2.
"PERSON" means a natural person, firm, partnership, limited
liability company, joint venture, corporation, association, business
enterprise, joint stock company, unincorporated association, trust,
Governmental Authority or any other entity, whether acting in an individual,
fiduciary, or other capacity, and for the purpose of the definition of "ERISA
Affiliate", a trade or business.
"PRIME RATE" means the rate of interest per annum 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.
"PRO-FORMA DEBT SERVICE" means, as of any date, the sum of
(a) Pro-Forma Interest Expense as of such date plus (b) with respect to all
Indebtedness of the Borrower and its Restricted Subsidiaries under revolving
credit facilities, an amount equal to the excess, if any, of (i) the aggregate
outstanding principal balance of all such Indebtedness at such date, minus (ii)
the aggregate amount of all commitments under such revolving credit facilities
which, as of such date, are scheduled to remain in effect as of the end of the
twelve month period immediately succeeding such date, plus (c) with respect to
all other Indebtedness of the Borrower and its Restricted Subsidiaries, all
repayments of such Indebtedness which, as of such date, were scheduled to be
made during the immediately succeeding twelve month period.
"PRO FORMA DEBT SERVICE RATIO" means, as of any date, the
ratio of (a) Adjusted Operating Cash Flow for the most recently completed
twelve month period, to (b) Pro Forma
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Debt Service for the twelve month period commencing immediately after the
period utilized in determining Adjusted Operating Cash Flow for purposes of
clause (a) of this definition.
"PRO FORMA INTEREST EXPENSE" means, as of any date, the sum
of all interest expense and all commitment fees payable in respect of Total
Debt, in each case of the Borrower and the Restricted Subsidiaries on a
consolidated basis in accordance with GAAP, calculated for the twelve month
period commencing on the first day of the month in which such date occurs,
giving effect to (a) the Total Debt outstanding and the rates in effect as of
such period end, and (b) principal amounts that are scheduled to become payable
by the Borrower or any Restricted Subsidiary in respect of Indebtedness of the
Borrower or the Restricted Subsidiaries during such period.
"PRO FORMA INTEREST EXPENSE RATIO" means, as of any date, the
ratio of (a) Adjusted Operating Cash Flow for the most recently completed
twelve month period, to (b) Pro Forma Interest Expense for twelve month period
commencing immediately after the period utilized in determining Adjusted
Operating Cash Flow for purposes of clause (a) of this definition.
"REGULATION D, G, T, U AND X" mean Regulations D, G, T, U and
X, respectively, of the Board as from time to time in effect and all official
rulings and interpretations thereunder or thereof.
"REIMBURSEMENT OBLIGATION" means, collectively, the
obligation of the Borrower to the Issuer with respect to each Letter of Credit
and all documents, instruments and other agreements related thereto, including
the obligation of the Borrower to reimburse the Issuer for amounts drawn under
such Letter of Credit.
"REINVESTED PROCEEDS" means, with respect to any Disposition
as of any date of determination, the amount of Net Cash Proceeds from such
Disposition that is used by the Borrower or any Restricted Subsidiary to
acquire, during the Reinvestment Period with respect to such Disposition,
property that is to be used in the Line of Business.
"REINVESTMENT PERIOD" means the period beginning on the date
that proceeds from a Disposition are received by the Borrower or any of its
Subsidiaries, as the case may be, and ending on the earlier of (i) 365 days
after the receipt of such proceeds, and (ii) the occurrence of an Event of
Default.
"RELATED PARTIES" means, with respect to any Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having unused
Revolving Commitments, Revolving Exposures and outstanding Term Loans greater
than or equal to 51% of the sum of the unused Revolving Commitments, Revolving
Exposures and outstanding Term Loans.
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"RESTRICTED PAYMENT" has the meaning set forth in Section 8.7.
"RESTRICTED SUBSIDIARIES" means, as of any date, the
Subsidiaries which are not Unrestricted Subsidiaries as of such date.
"REVOLVING COMMITMENT" means, in respect of any Lender, the
maximum amount of such Lender's Revolving Exposure as set forth on the
signature page of such Lender under the heading "REVOLVING COMMITMENT" or in an
Assignment and Acceptance Agreement or other document pursuant to which it
became a Lender, as such amount may be adjusted from time to time in accordance
herewith.
"REVOLVING COMMITMENT FEE" has the meaning set forth in
Section 3.2(a).
"REVOLVING COMMITMENT TERMINATION DATE" means March 31, 2005,
or such earlier date upon which either the Revolving Commitments shall
terminate or the Aggregate Revolving Commitment shall otherwise equal zero.
"REVOLVING EXPOSURE" means, with respect to any Lender as of
any date, the sum as of such date of (i) the outstanding principal balance of
such Lender's Revolving Loans, plus (ii) such Lender's Letter of Credit
Exposure.
"REVOLVING LOAN" and "REVOLVING LOANS" have the meaning set
forth in Section 2.1(a).
"REVOLVING LOAN MATURITY DATE" means March 31, 2005, or such
earlier date on which the Notes shall become due and payable, whether by
acceleration or otherwise.
"REVOLVING PERCENTAGE" means, as of any date and with respect
to each Lender, the percentage equal to a fraction (a) the numerator of which
is the Revolving Commitment of such Lender on such date (or, if there are no
Revolving Commitments on such date, on the last date upon which one or more
Revolving Commitments were in effect), and (b) the denominator of which is sum
of the Revolving Commitments of all Lenders on such date (or, if there are no
Revolving Commitments on such date, on the last date upon which one or more
Revolving Commitments were in effect).
"SANWA DEBT" the Indebtedness of Pavilion Partners under the
Sanwa Loan Documents to the extent that funds remain in escrow, for the
purpose of repaying such Indebtedness on or prior to July 31, 1998, under and
pursuant to the letter, dated February 25, 1998, between Pace AEP Acquisition,
Inc. and Sony Music Entertainment, Inc., as in effect on the date hereof.
"SANWA LOAN DOCUMENTS" the Loan Agreement, dated as of July
3, 1995, between The Sanwa Bank Limited, New York Branch, and Pavilion
Partners, together with all documents, instruments and other agreements
executed or delivered in connection therewith.
"SEC" means the Securities and Exchange Commission or any
Governmental Authority succeeding to the functions thereof.
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<PAGE>
"SECURED HEDGING AGREEMENT" means any Hedging Agreement
entered into by the Borrower with a counterparty that was a Lender (or an
Affiliate thereof) at the time such Hedging Agreement was entered into.
"SECURED PARTIES" has the meaning set forth in the Security
Agreement.
"SECURITY AGREEMENT" means the Security Agreement, by and
among the Loan Parties party thereto and the Administrative Agent,
substantially in the form of Exhibit G.
"SECURITY DOCUMENTS" means, collectively, (i) upon the
execution and delivery thereof, the Security Agreement and each Mortgage
Document, and (ii) all other instruments and documents delivered pursuant to
Section 7.9, 7.10 or 7.11 to secure any of the Borrower Obligations or the
Guarantor Obligations, as the case may be.
"SENIOR DEBT" means, as of any date, (a) Total Debt as of
such date, less (b) the Indebtedness of the Borrower and the Restricted
Subsidiaries in respect of the Subordinated Notes, to the extent that such
Indebtedness would appear on a consolidated balance sheet of the Borrower as at
such date prepared in accordance with GAAP.
"SENIOR LEVERAGE RATIO" means, as of any date, the ratio of
(i)(a) Senior Debt as of such date (excluding the Sanwa Debt to the extent
included therein) less (b) the cash and Cash Equivalents of the Borrower and
the Restricted Subsidiaries as of such date on a consolidated basis in
accordance with GAAP (excluding the existing escrow deposit in respect of the
Sanwa Debt to the extent included therein), to the extent in excess of
$5,000,000, to (ii) Adjusted Operating Cash Flow for the most recently
completed twelve month period.
"SPECIAL COUNSEL" means Emmet, Marvin & Martin, LLP, as, or
such other counsel selected by the Administrative Agent as, special counsel to
the Administrative Agent hereunder.
"SPECIFIED PERCENTAGE" means, with respect to any Lender (a)
in connection with Revolving Loans and Eurodollar Advances to the extent
consisting of Revolving Loans, the percentage equal to such Lender's Revolving
Commitment at such time divided by the Aggregate Revolving Commitment at such
time, and (b) in connection with Term Loans and Eurodollar Advances to the
extent consisting of Term Loans, the percentage equal to the unpaid principal
amount of such Lender's Term Loan at such time divided by the aggregate unpaid
principal amount of all Term Loans at such time.
"SPIN-OFF" means the distribution of all of the outstanding
Capital Stock of the Borrower to the stockholders of Broadcasting, all in
accordance with the terms of the Merger Documents and the Distribution
Agreement.
"SUBORDINATED INDENTURE" means the Indenture, dated as of
February 11, 1998, among the Borrower, the guarantors party thereto and The
Chase Manhattan Bank, as trustee.
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<PAGE>
"SUBORDINATED NOTES" means, collectively, the 9-1/8% Series A
Senior Subordinated Notes due 2008 and the 9-1/8% Series B Senior Subordinated
Notes due 2008 issued by the Borrower pursuant to the Subordinated Indenture.
"SUBSIDIARY" means, with respect to any Person (the "parent")
at any date, any other Person (i) the accounts of which would be consolidated
with those of the parent in the parent's consolidated financial statements if
such financial statements were prepared in accordance with GAAP as of such
date, or (ii) of which securities or other ownership interests representing
more than 50% of the equity or more than 50% of the ordinary voting power or,
in the case of a partnership, more than 50% of the general partnership
interests or more than 50% of the profits or losses of which are, as of such
date, owned, controlled or held by the parent or one or more subsidiaries of
the parent. Unless otherwise qualified, all references to "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"SUBSIDIARY GUARANTOR" means each Subsidiary party to this
Agreement.
"TAX" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by a
Governmental Authority, on whomsoever and wherever imposed, levied, collected,
withheld or assessed.
"TAX SHARING AGREEMENT" means the tax sharing agreement to be
entered into by Broadcasting and the Borrower prior to the Spin-Off pursuant to
which the Borrower will agree to pay to Broadcasting, among other things, the
amount of the tax liability of Broadcasting and the Borrower combined, to the
extent properly attributable to the Borrower for the period up to and including
the Spin-Off.
"TERM LOAN" and "TERM LOANS" have the meaning set forth in
Section 2.1(b).
"TERM LOAN MATURITY DATE" means March 31, 2006, or such
earlier date on which the Notes shall become due and payable, whether by
acceleration or otherwise.
"TOTAL DEBT" means, as of any date, the Indebtedness of the
Borrower and the Restricted Subsidiaries.
"TOTAL LEVERAGE RATIO" means, as of any date, the ratio of
(i)(a) Total Debt as of such date (excluding the Sanwa Debt to the extent
included therein) less (b) the cash and Cash Equivalents of the Borrower and
the Restricted Subsidiaries as of such date on a consolidated basis in
accordance with GAAP (excluding the existing escrow deposit in respect of the
Sanwa Debt to the extent included therein), to the extent in excess of
$5,000,000, to (ii) Adjusted Operating Cash Flow for the most recently
completed twelve month period.
"TOTAL PERCENTAGE" means, as of any date and with respect to
each Lender, the percentage equal to a fraction (a) the numerator of which is
the sum of the Revolving Commitment of such Lender on such date (or, if there
are no Revolving Commitments on such date, on the last date upon which one or
more Revolving Commitments were in effect) plus the
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<PAGE>
unpaid principal balance of such Lender's Term Loan on such date, and (b) the
denominator of which is sum of the aggregate Revolving Commitments on such date
(or, if there are no Revolving Commitments on such date, on the last date upon
which one or more Revolving Commitments were in effect) plus the aggregate
unpaid principal balance of all Term Loans on such date.
"TRANSACTION DOCUMENTS" means, collectively, the Contribution
Documents, the Loan Documents, the Pace Acquisition Documents, the Pavilion
Partners Acquisition Documents, the Merger Documents, the Subordinated
Indenture, the Subordinated Notes, the Pending Acquisition Documents, and all
documents, instruments and other agreements executed or delivered in connection
with all other Acquisitions by the Borrower or any Restricted Subsidiary.
"TRANSACTIONS" means, collectively, the Initial Transactions,
the Spin-Off, the Merger, the Pending Acquisitions, the Working Capital
Adjustment, and all other Acquisitions by the Borrower and the Restricted
Subsidiaries.
"UNCONSOLIDATED INVESTMENT" means, as of any date, any
investment made by the Borrower or any Restricted Subsidiary in any other
Person that, pursuant to GAAP as in effect on such date, would not be
consolidated with the Borrower for financial reporting purposes immediately
after giving effect to such investment.
"UNITED STATES" means the United States of America.
"UNRESTRICTED SUBSIDIARIES" means each Subsidiary designated
as an 'Unrestricted Subsidiary' in accordance with Section 8.17.
"VENUES" means, collectively, each of the venues listed on
Schedule 4.5 hereto, together with each other similar locality for a gathering
hereafter owned or leased by the Borrower or any Restricted Subsidiary.
"WITHDRAWAL LIABILITY" means, with respect to any Person,
liability of such Person to a Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan, as such terms are defined in
Part I of Subtitle E of Title IV of ERISA.
"WORKING CAPITAL ADJUSTMENT" means the allocation of working
capital between Broadcasting and the Borrower pursuant to the terms of Section
5.07(i) of the Broadcasting Merger Agreement.
1.2 ACCOUNTING TERMS
As used in the Loan Documents and in any certificate, opinion
or other document made or delivered pursuant thereto, accounting terms not
defined in Section 1.1, and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP. If any change in GAAP would affect the computation of any financial ratio
or requirement set forth in this Agreement, the Credit Parties and the Borrower
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<PAGE>
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 and (ii) the Borrower
shall provide to the Credit Parties financial statements and other documents
required under this Agreement (or such other items as the Administrative Agent
may reasonably request) setting forth a reconciliation between calculations of
such ratio or requirement before and after giving effect to such change.
1.3 RULES OF INTERPRETATION
(A) Unless expressly provided in a Loan Document to the
contrary, g. the words "hereof", "herein", "hereto" and "hereunder" and similar
words when used in each Loan Document shall refer to such Loan Document as a
whole and not to any particular provision thereof, h. section, subsection,
schedule and exhibit references contained therein shall refer to section,
subsection, schedule and exhibit thereof or thereto, i. the words "include" and
"including", shall mean that the same shall be "included, without limitation",
j. any definition of, or reference to, any agreement, instrument, certificate
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified, k. any reference herein to any Person shall be construed to
include such Person's successors and assigns, l. the words "asset" and
"property" shall be construed to have the same meaning and to refer to any and
all tangible and intangible assets and properties, including cash, securities,
accounts and contract rights, m. words in the singular number include the
plural, and words used therein in the plural include the singular, n. any
reference to a time shall refer to such time in New York, o. in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding", and p. references therein to a fiscal period shall refer to
that fiscal period of the Borrower.
(B) Section headings have been inserted in the Loan Documents
for convenience only and shall not be construed to be a part thereof.
ARTICLE 2. AMOUNT AND TERMS OF EXTENSIONS OF CREDIT
2.1 LOANS
(A) REVOLVING LOANS. Subject to the terms and conditions
hereof, each Lender severally agrees to make revolving credit loans in Dollars
(each a "REVOLVING LOAN" and, as the context may require, collectively with all
other Revolving Loans of such Lender and with the Revolving Loans of all other
Lenders, the "REVOLVING LOANS") to the Borrower from time to time on any
Business Day during the period from the Effective Date to the Revolving
Commitment Termination Date, provided that after giving effect thereto (i) such
Lender's Revolving Exposure would not exceed such Lender's Revolving
Commitment, and (ii) the Aggregate Revolving Exposure would not exceed the
Aggregate Revolving Commitment. During such period, the Borrower may borrow,
prepay in whole or in part and reborrow under the Revolving Commitments,
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<PAGE>
all in accordance with the terms and conditions of this Agreement. The
outstanding principal balance of each Revolving Loan shall be due and payable
on the Revolving Loan Maturity Date.
(B) TERM LOANS. Subject to the terms and conditions hereof,
each Lender severally agrees to make one term loan in Dollars (a "TERM LOAN"
and, as the context may require, collectively with the Term Loan of each other
Lender, the "TERM LOANS") to the Borrower on the Business Day immediately
succeeding the Effective Date in a principal amount equal to the amount set
forth on the signature page of such Lender under the heading "Term Loan
Amount". The outstanding principal balance of each Term Loan shall be due and
payable on the Term Loan Maturity Date.
2.2 PROCEDURE FOR BORROWING
(A) CREDIT REQUEST. To request a Loan, the Borrower shall
notify the Administrative Agent by the delivery of a Credit Request, which
shall be sent by facsimile and shall be irrevocable, no later than 11:00 a.m.
three Business Days prior to the requested Borrowing Date in the case of
Eurodollar Advances and 11:00 a.m. one Business Day prior to the requested
Borrowing Date in the case of ABR Advances, specifying (1) the aggregate
principal amount to be borrowed, (2) the requested Borrowing Date, (3) whether
such borrowing is to consist of one or more Eurodollar Advances, ABR Advances,
or a combination thereof and (4) if the Loan is to consist of one or more
Eurodollar Advances, the amount and length of the Interest Period for each
Eurodollar Advance. The amount of each (i) Eurodollar Advance to be made on a
Borrowing Date, when aggregated with all amounts to be converted to, or
continued as, a Eurodollar Advance on such date and having the same Interest
Period as such first Eurodollar Advance, shall equal the Minimum Amount and
(ii) each ABR Advance made on each Borrowing Date shall equal the Minimum
Amount or, if less, the unused portion of the Aggregate Revolving Commitment.
(B) FUNDING BY LENDERS. Upon receipt of each Credit Request,
the Administrative Agent shall promptly notify each Lender thereof. Subject to
its receipt of the notice referred to in the preceding sentence, each Lender
will make the amount of its Specified Percentage of the requested Loans
available to the Administrative Agent for the account of the Borrower at the
Payment Office not later than 12:00 noon on the relevant 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 such Borrowing Date will then, subject to the satisfaction of the
terms and conditions of this Agreement, be made available on such date to the
Borrower by the Administrative Agent at the Payment Office by crediting the
account of the Borrower on the books of the Administrative Agent at such office
with the aggregate of said amounts (in like funds) received by the
Administrative Agent, provided that nothing contained in this sentence shall
relieve any Lender of its obligation to fund the Loans at the times and in the
manner as otherwise provided herein.
(C) FAILURE TO FUND. Unless the Administrative Agent shall
have received notice prior to a proposed Borrowing Date from a Lender (by
telephone or otherwise, such notice to be promptly confirmed by facsimile or
other writing) that such Lender will not make available
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<PAGE>
to the Administrative Agent such Lender's share of the requested Loans, the
Administrative Agent may assume that such Lender has made such share available
to the Administrative Agent on the Borrowing Date in accordance with this
Section and, 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 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 to the date such amount is paid
to the Administrative Agent, at a rate per annum equal to, in the case of the
Borrower, the interest rate otherwise applicable to such Loan, and, in the case
of such Lender, at a rate of interest per annum equal to the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rates on interbank compensation. 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 the relevant
borrowing for purposes of this Agreement. The failure of any Lender to provide
such Lender's share of the requested Loans shall not relieve any other Lender
of its obligations hereunder to provide its share of the requested Loans.
2.3 TERMINATION, REDUCTION OR INCREASES OF COMMITMENTS
(A) VOLUNTARY TERMINATION OR REDUCTIONS. The Borrower may,
upon at least three Business Days' prior written notice to the Administrative
Agent, (5) at any time when the Aggregate Revolving Exposure shall be zero,
terminate all of the Revolving Commitments, and (6) at any time and from time
to time when the Aggregate Revolving Commitment shall exceed the Aggregate
Revolving Exposure (after giving effect to any contemporaneous payment or
prepayment of Revolving Loans or Reimbursement Obligations), permanently reduce
the Aggregate Revolving Commitment by a sum not greater than the amount of such
excess, provided, however, that each such partial reduction shall be in the
amount of $5,000,000 or such amount plus a whole multiple of $1,000,000 in
excess thereof.
(B) SCHEDULED MANDATORY REDUCTIONS. On each of the dates set
forth below, the Aggregate Revolving Commitment shall be automatically reduced
by the amount equal to the Aggregate Revolving Commitment as of the Effective
Date multiplied by the percentage (as the same may be adjusted pursuant to
Section 2.3(f)) set forth below adjacent to such date:
<TABLE>
<CAPTION>
Date Percentage
---- ----------
<S> <C>
March 31, 2000 2.50%
June 30, 2000 2.50%
September 30, 2000 2.50%
December 31, 2000 2.50%
March 31, 2001 3.75%
June 30, 2001 3.75%
September 30, 2001 3.75%
December 31, 2001 3.75%
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<PAGE>
March 31, 2002 5.00%
June 30, 2002 5.00%
September 30, 2002 5.00%
December 31, 2002 5.00%
March 31, 2003 6.25%
June 30, 2003 6.25%
September 30, 2003 6.25%
December 31, 2003 6.25%
March 31, 2004 6.25%
June 30, 2004 6.25%
September 30, 2004 6.25%
December 31, 2004 6.25%
March 31, 2005 5.00%
</TABLE>
(C) OTHER MANDATORY REDUCTIONS. The Aggregate Revolving
Commitment shall be permanently reduced at the times and in the amounts
required by Section 2.4.
(D) REDUCTIONS OF LETTER OF CREDIT COMMITMENT. The Letter of
Credit Commitment shall not be reduced until such time as the Aggregate
Revolving Commitments shall equal such Letter of Credit Commitment, and
thereafter shall in each case be reduced, automatically, by a sum equal to the
amount of each such reduction in the Aggregate Revolving Commitments.
(E) REDUCTIONS IN GENERAL. Each reduction of the Aggregate
Revolving Commitment shall be made by reducing each Lender's Revolving
Commitment by an amount equal to such Lender's Revolving Percentage of such
reduction, and each reduction of the Aggregate Revolving Commitment made
pursuant to Section 2.3(a), 2.3(c) or 2.4 shall be applied to the remaining
Aggregate Revolving Commitment reductions set forth in Section 2.3(b) on a pro
rata basis. Simultaneously with each reduction of the Aggregate Revolving
Commitment, the Borrower shall pay the Revolving Commitment Fee accrued on the
amount by which the Aggregate Revolving Commitment has been reduced.
(F) INCREASES OF REVOLVING COMMITMENTS. Provided that no
Default exists or would exist immediately before and after giving effect
thereto, the Borrower may at any time and from time to time prior to December
31, 1999, at its sole cost and expense, request any one or more of the Lenders
to increase (such decision to increase the Revolving Commitment of a Lender to
be within the sole and absolute discretion of such Lender) its Revolving
Commitment, or any other institution reasonably satisfactory to the
Administrative Agent and the Issuer to provide a new Revolving Commitment, by
submitting an Increase Supplement in the form of Exhibit I (an "INCREASE
SUPPLEMENT"), duly executed by the Borrower and each such Lender or
institution, as the case may be. If such Increase Supplement is in all respects
reasonably satisfactory to the Administrative Agent, the Administrative Agent
shall execute such Increase Supplement and deliver a copy thereof to the
Borrower and each such Lender or institution, as the case may be. Upon
execution and delivery of such Increase Supplement, q. in the case of each such
Lender, such Lender's Revolving Commitment shall be increased to the amount set
forth in such Increase
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<PAGE>
Supplement, r. in the case of each such other institution, such other
institution shall become a party hereto and shall for all purposes of the Loan
Documents be deemed a "Lender" with a Revolving Commitment in the amount set
forth in such Increase Supplement, s. in each case, the Revolving Commitment of
such Lender or such other institution, as the case may be, shall be as set
forth in the applicable Increase Supplement, (iv) with respect to each of the
remaining scheduled mandatory reductions of the Aggregate Revolving Commitment
set forth in Section 2.3(b), the percentage thereof shall be increased, on a
pro rata basis, so that such remaining reductions would cause the Aggregate
Revolving Commitment to be reduced to zero ($0.00) on March 31, 2005, and (v)
the Borrower shall contemporaneously therewith execute and deliver to the
Administrative Agent a Note for each such other institution providing a new
Revolving Commitment; provided, however, that:
(1) immediately after giving effect thereto, the
Aggregate Revolving Commitment shall not have been increased pursuant
to this Section in an aggregate amount greater than $50,000,000;
(2) each such increase shall be in an amount not
less than $10,000,000 or such amount plus an integral multiple of
$5,000,000;
(3) the Revolving Commitments shall not be increased
on more than two occasions;
(4) if Revolving Loans shall be outstanding
immediately after giving effect to such increase, each such Lender and
each such other Institution shall enter into a master assignment and
acceptance agreement with the other Lenders in all respects reasonably
satisfactory to such other Lenders, pursuant to which each such other
Lender shall assign to it a portion of its Revolving Loans necessary
to reflect proportionately the Revolving Commitments as adjusted in
accordance with this subsection (f), and in connection with such
master assignment and acceptance agreement each such other Lender may
treat the assignment of Eurodollar Advances as a prepayment of such
Eurodollar Advances for purposes of Section 3.5;
(5) each such other institution shall have delivered
to the Administrative Agent and the Borrower all forms, if any, that
are required to be delivered by such other institution pursuant to
Section 3.7; and
(6) the Administrative Agent shall have received
such certificates, legal opinions and other items as it shall
reasonably request in connection with such increase.
2.4 APPLICATION OF PROCEEDS
On or before each date set forth below, the Aggregate
Revolving Commitment shall be permanently reduced by an amount equal to the
Aggregate Revolving Commitment Percentage of, and the Borrower shall prepay the
aggregate unpaid principal amount of the Term
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<PAGE>
Loans by an amount equal to the Aggregate Term Loan Percentage of, the amount
set forth below and applicable to such date:
(A) on the last day of the Reinvestment Period for
each Disposition described in Section 8.6(d), by an amount equal to
100% of the Adjusted Net Cash Proceeds with respect to such
Disposition;
(B) commencing with the fiscal year ended December
31, 2000, and payable on March 31st of each immediately succeeding
year, by an amount equal to 50% of Excess Cash Flow in respect of such
fiscal year;
(C) upon receipt by the Borrower or any Subsidiary
Guarantor of Net Cash Proceeds attributable to any Equity Issuance, by
an amount equal to (A) if no Default shall then exist, 50% of such Net
Cash Proceeds, or such lesser amount as would result in the Total
Leverage Ratio being less than 5.00:1.00, or (B) otherwise, 100% of
such Net Cash Proceeds; and
(D) in an amount equal to all Applicable Proceeds
(i) in excess of amounts used to replace or repair any properties or
(ii) which are not used or designated to replace or repair properties
within one year after receipt thereof, provided that the Borrower or
the applicable Subsidiary Guarantor shall have commenced the
restoration or replacement process (including the making of
appropriate filings and requests for approval) within 45 days after
such casualty or after the receipt of any such condemnation proceeds,
as the case may be, and diligently pursues the same through
completion.
2.5 SCHEDULED REPAYMENTS OF TERM LOANS; PREPAYMENTS OF LOANS;
COMMITMENT REDUCTIONS
(A) REPAYMENT OF TERM LOANS. The aggregate outstanding
principal balance of the Term Loans shall be due and payable on each date set
forth below in the amount set forth adjacent to such date:
<TABLE>
<CAPTION>
Date Amount
---- ------
<S> <C>
December 31, 1998 $1,000,000
December 31, 1999 $1,000,000
December 31, 2000 $1,000,000
December 31, 2001 $1,000,000
December 31, 2002 $1,000,000
December 31, 2003 $1,000,000
December 31, 2004 $1,000,000
December 31, 2005 $1,000,000
Term Loan Maturity Date the remaining unpaid
principal amount of
the Term Loans.
</TABLE>
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<PAGE>
(B) VOLUNTARY PREPAYMENTS. The Borrower shall have the right
at any time and from time to time to prepay all or any portion of the Loans
without premium or penalty (but subject to Section 3.5), by delivering to the
Administrative Agent an irrevocable written notice thereof at least one
Business Day prior to the proposed prepayment date, in the case of Loans
consisting of ABR Advances, and at least three Business Days prior to the
proposed prepayment date, in the case of Loans consisting of Eurodollar
Advances, specifying whether the Loans to be prepaid are Revolving Loans or
Term Loans, whether the Loans to be prepaid consist of ABR Advances, Eurodollar
Advances, or a combination thereof, the amount to be prepaid and the date of
prepayment, whereupon the amount specified in such notice shall be due and
payable on the date specified. Upon receipt of each such notice, the
Administrative Agent shall promptly notify each Lender thereof. Each partial
prepayment of the Loans pursuant to this subsection shall be in an amount equal
to the Minimum Amount, or, if less, the outstanding principal balance of the
Loans. After giving effect to any partial prepayment with respect to Eurodollar
Advances which were made (whether as the result of a borrowing, a conversion or
a continuation) on the same date and which had the same Interest Period, the
outstanding principal balance of such Eurodollar Advances shall exceed
(subject to Section 3.3) the Minimum Amount.
(C) OTHER MANDATORY PREPAYMENTS; CASH COLLATERAL.
Simultaneously with each reduction or termination of:
(i) the Aggregate Revolving Commitment, (1) in the
event that the Letter of Credit Commitment shall exceed the Aggregate
Revolving Commitment as so reduced or terminated, the Letter of Credit
Commitment shall be automatically reduced by an amount equal to such
excess, and (2) the Borrower shall prepay the Revolving Loans by an
amount equal to the lesser of (A) the aggregate outstanding principal
balance of the Revolving Loans, or (B) the excess of the aggregate
outstanding principal balance of the Revolving Loans over the
Aggregate Revolving Commitment as so reduced or terminated; and
(ii) the Letter of Credit Commitment (including
pursuant to clause (i) above), in the event the aggregate Letter of
Credit Exposure of all Lenders exceeds the Letter of Credit Commitment
as so reduced or terminated, the Borrower shall immediately deposit
into the Cash Collateral Account such amount, in cash, as would cause
the balance on deposit in the Cash Collateral Account to equal or
exceed the aggregate Letter of Credit Exposure of all Lenders.
(D) IN GENERAL. Each prepayment of the Term Loans shall be
applied among the remaining installments of principal set forth in Section
2.5(a) on a pro rata basis. Simultaneously with each prepayment of a Loan, the
Borrower shall prepay all accrued interest on the amount prepaid through the
date of prepayment.
2.6 LETTERS OF CREDIT
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<PAGE>
(A) AVAILABILITY; PROCEDURE. The Borrower may request the
Issuer to issue standby letters of credit (the "LETTERS OF CREDIT"; each,
individually, a "LETTER OF CREDIT") during the period from the Effective Date
to the thirtieth Business Day prior to the Revolving Credit Maturity Date,
provided that (i) no Letter of Credit shall have a face amount of less than
$20,000, and (ii) immediately after the issuance of each Letter of Credit (1)
the Letter of Credit Exposure of all Lenders would not exceed the Letter of
Credit Commitment, (2) the Aggregate Revolving Exposure would not exceed the
Aggregate Revolving Commitment, and (3) no more than 10 Letters of Credit shall
be outstanding. To request the issuance of a Letter of Credit, the Borrower
shall notify the Administrative Agent and the Issuer by the delivery of a
Credit Request, which shall be sent by facsimile and shall be irrevocable, at
least three Business Days prior to the requested date of issuance, specifying
(7) the beneficiary of such Letter of Credit, (8) 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, (9) the maximum amount
to be available under such Letter of Credit, and (10) the requested dates of
issuance and expiration. Such Credit Request shall be accompanied by a duly
completed application for such Letter of Credit on such forms as may be made
available from time to time by the Issuer and such other certificates,
documents (including a reimbursement agreement) and other information as may be
required by the Issuer in accordance with its customary procedures
(collectively, the "LETTER OF CREDIT DOCUMENTATION"). Upon receipt of such
Credit Request from the Borrower, the Administrative Agent shall promptly
notify each Lender thereof. Subject to the satisfaction of the terms and
conditions of this Agreement, the Issuer shall issue each requested Letter of
Credit. In the event of any conflict between the provisions of this Agreement
and any Letter of Credit Documentation, the provisions of this Agreement shall
control.
(B) TERMS OF LETTERS OF CREDIT. Each Letter of Credit shall
t. be denominated in Dollars, u. be issued for the account of the Borrower and
in support of obligations, contingent or otherwise, of the Borrower or any
Restricted Subsidiary arising in the ordinary course of business, and v. have
an expiration date which shall be not later than the earlier of (1) twelve
months after the date of issuance thereof or (2) five Business Days before the
Revolving Credit Maturity Date, provided that the expiration date of such
Letter of Credit may be extended or such Letter of Credit may be renewed,
provided, further, that (x) any renewal, or any extension of any expiry date,
of a Letter of Credit shall constitute the issuance of such Letter of Credit
for all purposes of this Agreement, and (y) in no event shall any Letter of
Credit expire after the Revolving Commitment Termination Date.
(C) LETTER OF CREDIT PARTICIPATIONS. Immediately upon the
issuance of a Letter of Credit, the Issuer shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed to have irrevocably
and unconditionally purchased and received from the Issuer, without recourse or
warranty, an undivided interest and participation, to the extent of such
Lender's Revolving Percentage thereof, in such Letter of Credit and the
obligations of Borrower with respect thereto and any security therefor and any
guaranty pertaining thereto at any time existing.
(D) DRAWINGS ON LETTERS OF CREDIT. The Issuer shall promptly
notify (i) each Lender of the Issuer's receipt of a drawing request under any
Letter of Credit, stating the amount
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of such Lender's Revolving Percentage of such drawing request and the date on
which such request will be honored and (ii) Borrower of the amount of such
drawing request and the date on which such request will be honored. Any failure
of the Issuer to give or any delay in the Issuer's giving any such notice shall
not release or diminish the obligations of Borrower or any Lender hereunder. In
determining whether to pay under any Letter of Credit, the Issuer shall have no
obligation to any Lender or the Borrower other than to confirm that any
documents required to be delivered under such Letter of Credit have been
delivered and that they appear to comply on their face with the requirements of
such Letter of Credit. In the absence of gross negligence or willful misconduct
on the part of the Issuer, the Issuer shall have no liability to any Lender or
the Borrower for any action taken or omitted to be taken by it under or in
connection with any Letter of Credit, including any such action negligently
taken or negligently omitted to be taken by it.
(E) REIMBURSEMENT. The Borrower shall pay to the
Administrative Agent for the account of the Issuer on demand therefor, in
Dollars in immediately available funds, the amount of all Reimbursement
Obligations owing to the Issuer under any Letter of Credit, together with
interest thereon as provided in Section 3.1, irrespective of any claim, setoff,
defense or other right which the Borrower may have at any time against the
Issuer or any other Person. In the event that the Issuer makes any payment
under any Letter of Credit and Borrower shall not have repaid such amount to
the Issuer when due, the Issuer shall promptly notify each Lender of such
failure, and each Lender shall promptly and unconditionally pay to the
Administrative Agent, for the account of the Issuer, the amount of such
Lender's Revolving Percentage of such payment in Dollars in immediately
available funds on the Business Day the Issuer so notifies such Lender if such
notice is given prior to 12:00 Noon or, if such notice is given after 12:00
Noon, such Lender shall make its Revolving Percentage of such payment available
to the Issuer prior to 12:00 Noon on the next succeeding Business Day.
(F) LENDERS' OBLIGATIONS. If and to the extent any Lender
shall not make such Lender's Revolving Percentage of any Reimbursement
Obligations available to the Issuer when due in accordance with Section 2.6(e),
such Lender agrees to pay interest to the Issuer on such unpaid amount for each
day from the date such payment is due until the date such amount is paid in
full to the Issuer at the Federal Funds Effective Rate until (and including)
the third Business Day after the date due and thereafter at the Alternate Base
Rate. The obligations of the Lenders under this Section 2.6(f) are several and
not joint or joint and several, and the failure of any Lender to make available
to the Issuer its Revolving Percentage of any Reimbursement Obligations when
due in accordance with Section 2.6(e) shall not relieve any other Lender of its
obligation hereunder to make its Revolving Percentage of such Reimbursement
Obligations so available when so due, but no Lender shall be responsible for
the failure of any other Lender to make such other Lender's Revolving
Percentage of such Reimbursement Obligations so available when so due.
(G) RESCISSION. Whenever the Issuer receives a payment of a
Reimbursement Obligation from or on behalf of Borrower as to which the Issuer
has received any payment from a Lender pursuant to Section 2.6(e), the Issuer
shall promptly pay to such Lender an amount equal to such Lender's Revolving
Percentage of such payment from or on behalf of Borrower. If any payment by or
on behalf of Borrower and received by the Issuer with respect to any Letter of
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Credit is rescinded or must otherwise be returned by the Issuer for any reason
and the Issuer has paid to any Lender any portion thereof, each such Lender
shall forthwith pay over to the Issuer an amount equal to such Lender's
Revolving Percentage of the amount which must be so returned by the Issuer.
(H) EXPENSES. Each Lender, upon the demand of the Issuer,
shall reimburse the Issuer, to the extent the Issuer has not been reimbursed by
Borrower after demand therefor, for the reasonable costs and expenses
(including reasonable attorneys' fees) incurred by the Issuer in connection
with the collection of amounts due under, and the preservation and enforcement
of any rights conferred by, any Letter of Credit or the performance of the
Issuer's obligations as issuer of the Letters of Credit under this Agreement in
respect thereof, to the extent of such Lender's Revolving Percentage of the
amount of such costs and expenses 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 the same result solely from the gross negligence or willful
misconduct of the Issuer. The Issuer shall refund any costs and expenses
reimbursed by such Lender that are subsequently recovered from Borrower in an
amount equal to such Lender's Revolving Percentage thereof.
(I) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to
reimburse the Issuer pursuant to this Section 2.6, and the obligation of each
Lender to make available to the Issuer the amounts set forth in this Section
2.6 shall be absolute, unconditional and irrevocable under any and all
circumstances, shall be made without reduction for any set-off, counterclaim or
other deduction of any nature whatsoever, may not be terminated, suspended or
delayed for any reason whatsoever, shall not be subject to any qualification or
exception and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including without limitation, any of the
following circumstances: (1) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents, (2) the existence of any claim,
setoff, defense or other right which Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Issuer, any
Lender or any other Person, whether in connection with this Agreement, any
other Loan Document, any Letter of Credit, the transactions contemplated in the
Loan Documents or any unrelated transactions (including any underlying
transaction between Borrower and the beneficiary named in any such Letter of
Credit), (3) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect,
(4 the surrender or impairment of any Collateral for the performance or
observance of any of the terms of any of the Loan Documents, or (5) the
occurrence of any Default or Event of Default. Nothing contained in this
Section 2.6(i), however, shall require the Borrower or any Lender to reimburse
the Issuer for any amounts that become due by reason of the Issuer's gross
negligence or wilful misconduct.
2.7 PAYMENTS; PRO RATA TREATMENT AND SHARING OF SET-OFFS
(A) PAYMENTS GENERALLY. (i) Except as provided below, all
payments, including prepayments, of principal and interest on the Loans, of the
Revolving Commitment Fee, the
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Letter of Credit Fees and of all other amounts to be paid by the Borrower under
the Loan Documents (the Revolving Commitment Fee and the Letter of Credit Fees,
together with all of such other fees, being sometimes hereinafter collectively
referred to as the "FEES") shall be made to the Administrative Agent, prior to
1:00 p.m. on the date such payment is due, for the account of the applicable
Credit Parties at the Payment Office, in Dollars and in immediately available
funds, without set-off, offset, recoupment or counterclaim. The failure of the
Borrower to make any such payment by such time shall not constitute a Default,
provided that such payment is made on such due date, but any such payment made
after 1:00 p.m. on such due date shall be deemed to have been made on the next
Business Day for the purpose of calculating interest on amounts outstanding on
the Loans. As between the Borrower and each Credit Party, any payment by the
Borrower to the Administrative Agent for the account of such Credit Party shall
be deemed to be payment by the Borrower to such Credit Party. Notwithstanding
the foregoing, all payments pursuant to Sections 3.5, 3.6, 3.7, and 11.4 shall
be paid directly to the Credit Party entitled thereto. If any payment under the
Loan Documents shall be due and payable on a day which is not a Business Day,
the due date thereof (except as otherwise provided with respect to Interest
Periods) shall be extended to the next Business Day and (except with respect to
payments in respect of the Fees) interest shall be payable at the applicable
rate specified herein during such extension, provided, however, that if such
next Business Day would be after (i) with respect to Revolving Loans and
Letters of Credit, the Revolving Loan Maturity Date, or (ii) with respect to
Term Loans, the Term Loan Maturity Date, such payment shall instead be due on
the immediately preceding Business Day.
(ii) If at any time insufficient funds are received
by and available to the Administrative Agent to pay fully all amounts of
principal, interest and fees then due hereunder, such funds shall be applied
(A) first, towards payment of interest and fees then due under the Loan
Documents, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (B) second, towards
payment of principal then due under the Loan Documents, ratably among the
parties entitled thereto in accordance with the amounts of principal then due
to such parties.
(B) SET-OFF. In addition to any rights and remedies of the
Credit Parties provided by law, upon and after the acceleration of all the
obligations of the Borrower under the Loan Documents to which it is a party, or
at any time upon the occurrence and during the continuance of an Event of
Default under Sections 9.1(a) or (b), each Credit Party shall have the right,
without prior notice to any Loan Party, any such notice being expressly waived
by each Loan Party to the extent not prohibited by applicable law, to set-off
and apply against any indebtedness, whether matured or unmatured, of such Loan
Party to such Credit Party any amount owing from such Credit Party to such Loan
Party, at, or at any time after, the happening of any of the above-mentioned
events. To the extent not prohibited by applicable law, the aforesaid right of
set-off may be exercised by any Credit Party against such 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 Credit
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Party prior to the making, filing or issuance, or service upon such Credit
Party of, or 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. Each Credit Party agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Credit Party, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
(C) ADJUSTMENTS. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off,
or otherwise) in respect of the principal of or interest on its Revolving Loans
or its Term Loan, resulting in such Lender receiving payment of a greater
proportion of the aggregate principal amount of, or accrued interest on, such
type of Loan than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall promptly purchase, at face value for
cash, participations in the Loans of that type to the extent necessary so that
the benefit of such payment shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans of such type, provided, however, that 1. if all or any
portion of such payment is thereafter recovered, such participations shall be
rescinded and the purchase price returned, in each case to the extent of such
recovery, and 2. the provisions of this Section 2.7(c) shall not be construed
to apply to any payment made by the Borrower pursuant to and in accordance with
the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this Section
2.7(c) shall apply). The Borrower agrees that any Lender that purchased a
participation pursuant to this subsection may exercise such rights to payment
(including the right of set-off) with respect to such participation as fully
as such Lender were the direct creditor of the Borrower in the amount of such
participation.
2.8 CASH COLLATERAL ACCOUNT
At, or at any time before, the time the Borrower shall be
required to make a deposit into the Cash Collateral Account, the Administrative
Agent shall establish and maintain at its offices at One Wall Street, New
York, New York in the name of the Borrower but under the sole dominion and
control of the Administrative Agent, a cash collateral account designated as
"SFX Entertainment, Inc./Cash Collateral Account" (the "CASH COLLATERAL
ACCOUNT"). The Borrower may from time to time make one or more deposits into
the Cash Collateral Account. The Borrower hereby pledges to the Administrative
Agent for the benefit of the Credit Parties, a Lien on and security interest in
the Cash Collateral Account and all sums at any time and from time to time on
deposit therein (the Cash Collateral Account, together with all sums on deposit
therein, being sometimes hereinafter collectively referred to as the "CASH
COLLATERAL"), as collateral security for the prompt payment in full when due,
whether at stated maturity, by acceleration or otherwise, of the Borrower
Obligations. The Borrower agrees that at any time and from time to time at its
expense, it will promptly execute and deliver to the Administrative Agent any
further instruments and documents, and take any further actions, that may be
necessary or that the Administrative Agent may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and
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enforce its rights and remedies hereunder with respect to any Cash Collateral.
The Borrower agrees that it will not a. sell or otherwise dispose of any of the
Cash Collateral, or b. create or permit to exist any Lien upon any of the Cash
Collateral, except for Permitted Liens. The Borrower hereby authorizes the
Administrative Agent, promptly after each drawing under any Letter of Credit
shall become due and payable, to apply any and all cash on deposit in the Cash
Collateral Account towards the reimbursement of the Issuer for all sums paid
in respect of such drawing, and all other Borrower Obligations which shall then
be due and owing.
ARTICLE 3. INTEREST, FEES, YIELD PROTECTIONS, ETC.
3.1 INTEREST RATE AND PAYMENT DATES
(A) ADVANCES. Each c. ABR Advance shall bear interest at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin and
d. Eurodollar Advance shall bear interest at a rate per annum equal to the
Eurodollar Rate for the applicable Interest Period plus the Applicable Margin.
(B) EVENT OF DEFAULT; LATE CHARGES. Notwithstanding the
foregoing, after the occurrence and during the continuance of an Event of
Default, the outstanding principal balance of the Loans shall bear interest at
a rate per annum equal to 2% plus the rate otherwise applicable to such Loans
as provided in subsection (a) above. If any interest, Reimbursement Obligation,
Fee or other amount payable under the Loan Documents is not paid when due
(whether at the stated maturity thereof, by acceleration or otherwise), such
overdue amount shall bear interest at a rate per annum equal to the Alternate
Base Rate plus 2%, from the date of such nonpayment until paid in full (whether
before or after the entry of a judgment thereon). All such interest shall be
payable on demand.
(C) PAYMENT OF INTEREST. Except as otherwise provided in
subsection (b) above, interest shall be payable in arrears on the following
dates and upon each payment (including prepayment) of the Loans:
(i) in the case of an ABR Advance, on the last
Business Day of each March, June, September and December commencing on
the first of such days to occur after such ABR Advance is made or any
Eurodollar Advance is converted to an ABR Advance;
(ii) in the case of a Eurodollar Advance, on the
last day of the Interest Period applicable thereto and, if such
Interest Period is longer than three months, the last Business Day of
each three month interval occurring during such Interest Period;
(iii) in the case of all Revolving Loans, the
Revolving Loan Maturity Date; and
(iv) in the case of all Term Loans, the Term Loan
Maturity Date.
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(D) COMPUTATIONS. Interest on e. ABR Advances to the extent
based on the Prime Rate shall be calculated on the basis of a 365 or 366-day
year (as the case may be), and f. ABR Advances to the extent based on the
Federal Funds Effective Rate and on Eurodollar Advances shall be calculated on
the basis of a 360-day year, in each case, for the actual number of days
elapsed. 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 Prime Rate, but any 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 a rate of interest by
the Administrative Agent pursuant to the Loan Documents shall be conclusive and
binding on all parties hereto absent manifest error. The Borrower acknowledges
that to the extent interest payable on ABR Advances is based on the Prime Rate,
such rate is only one of the bases for computing interest on loans made by the
Lenders, and by basing interest payable on ABR Advances on the Prime Rate, the
Lenders have not committed to charge, and the Borrower has not in any way
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.
3.2 FEES
(A) REVOLVING COMMITMENT FEE. The Borrower agrees to pay to
the Administrative Agent, for the account of the Lenders in accordance with
each Lender's Revolving Percentage, a fee (the "REVOLVING COMMITMENT FEE"),
during the period from the Effective Date through the Revolving Commitment
Termination Date, at a rate per annum equal to the Commitment Fee Percentage on
the excess of the average daily Aggregate Revolving Commitment over the
Aggregate Revolving Exposure. The Revolving Commitment Fee shall be payable g.
quarterly in arrears on the last Business Day of each March, June, September
and December during such period, commencing on the first such day following the
Effective Date, h. on the date of any reduction in the Aggregate Revolving
Commitment (to the extent of such reduction) and i. on the Revolving Loan
Maturity Date. The Revolving Commitment Fee shall be calculated on the basis of
a 360 day year for the actual number of days elapsed.
(B) LETTER OF CREDIT FEES. The Borrower agrees to pay to the
Administrative Agent, for the account of the Lenders in accordance with each
Lender's Revolving Percentage, commissions (the "LETTER OF CREDIT FEES") with
respect to the Letters of Credit for the period from and including the date of
issuance of each thereof through the expiration date thereof, at a rate per
annum equal to the Applicable Margin on the average daily maximum amount
available under any contingency to be drawn under such Letter of Credit. The
Letter of Credit Fees shall be j. calculated on the basis of a 360-day year for
the actual number of days elapsed and k. payable quarterly in arrears on the
last Business Day of each March, June, September and December of each year,
commencing on the first such day following the Effective Date, and on the date
that the Revolving Commitments shall expire. In addition to the Letter of
Credit Fees, the Borrower agrees to pay to the Issuer, for its own account, its
standard fees and charges customarily charged to customers similar to the
Borrower with respect to any Letter of Credit.
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(C) ADMINISTRATIVE AGENT'S AND ISSUER'S FEES. The Borrower
agrees to pay to the Administrative Agent and the Issuer, for their own
respective accounts, such other fees as have been agreed to in writing by the
Borrower, the Administrative Agent and the Issuer.
3.3 CONVERSIONS
(A) The Borrower may elect from time to time to convert one
or more Eurodollar Advances to ABR Advances by giving the Administrative Agent
at least one Business Day's prior irrevocable notice of such election,
specifying the amount to be converted, provided, that any such conversion of
Eurodollar Advances 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 l.
convert ABR Advances comprising all or a portion of Loans to Eurodollar
Advances and m. continue Eurodollar Advances as new Eurodollar Advances by
selecting a new Interest Period therefor, in each case by giving the
Administrative Agent at least three Business Days' prior irrevocable notice of
such election, in the case of a conversion to, or continuation of, Eurodollar
Advances, specifying the amount to be so converted or continued and the initial
Interest Period relating thereto, provided that any such conversion of ABR
Advances to Eurodollar Advances shall only be made on a Business Day and any
such continuation of Eurodollar Advances as new Eurodollar Advances shall only
be made on the last day of the Interest Period applicable to the Eurodollar
Advances which are to be continued as such new Eurodollar Advances. Each such
notice (a "NOTICE OF CONVERSION") shall be substantially in the form of Exhibit
C, shall be irrevocable and shall be given by facsimile (confirmed promptly,
and in any event within five Business Days, by the delivery to the
Administrative Agent of a Notice of Conversion manually signed by the
Borrower). The Administrative Agent shall promptly provide the Lenders with
notice of each such election. Advances may be converted or continued pursuant
to this Section in whole or in part, provided that the amount to be converted
to, or continued as, each Eurodollar Advance, when aggregated with any
Eurodollar Advance to be made on such date in accordance with Section 2.2 and
having the same Interest Period as such first Eurodollar Advance, shall equal
the Minimum Amount.
(B) Notwithstanding anything in this Agreement to the
contrary, upon the occurrence and during the continuance of an Event of
Default, the Borrower shall have no right to elect to convert any existing ABR
Advance to a new Eurodollar Advance or to continue any existing Eurodollar
Advance as a new Eurodollar Advance. In such event, all ABR Advances shall be
automatically continued as ABR Advances and all Eurodollar Advances shall be
automatically converted to ABR Advances on the last day of the then current
Interest Period applicable to such Eurodollar Advance.
(C) Each conversion or continuation shall be effected by each
Lender by applying the proceeds of its new ABR Advance or Eurodollar Advance,
as the case may be, to its Advances (or portion thereof) being converted (it
being understood that any such conversion or continuation shall not constitute
a borrowing for purposes of Sections 4, 5 or 6).
3.4 CONCERNING INTEREST PERIODS
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(A) No Interest Period in respect of a Eurodollar Advance
under a Revolving Loan shall end after the Revolving Commitment Termination
Date, and no Interest Period in respect of a Eurodollar Advance under a Term
Loan shall end after the Term Loan Maturity Date.
(B) With respect to Eurodollar Advances, any Interest Period
which begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day of a calendar
month.
(C) If an Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless, in the case of a Interest Period, the result
of such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day.
(D) If the Borrower shall have failed to timely elect a
Eurodollar Advance under Section 2.2 or 3.3, as the case may be, in connection
with any borrowing of, conversion to, or continuation of, a Eurodollar Advance,
such borrowing or such Advance requested to be converted to, or continued as, a
Eurodollar Advance shall thereafter be an ABR Advance until such time, if any,
as the Borrower shall elect a new Eurodollar Advance pursuant to Section 3.3.
(E) The Borrower shall not be permitted to have more than
eight Eurodollar Advances outstanding at any one time, it being agreed that
each borrowing of a Eurodollar Advance pursuant to a single Credit Request
shall constitute the making of one Eurodollar Advance for the purpose of
calculating such limitation.
3.5 FUNDING LOSS
Notwithstanding anything contained herein to the contrary, if
the Borrower shall fail to borrow, convert or continue a Eurodollar Advance on
a Borrowing Date or Conversion Date after it shall have given notice to do so
in which it shall have requested a Eurodollar Advance, or if a Eurodollar
Advance shall be terminated for any reason prior to the last day of the
Interest Period applicable thereto, or if, while a Eurodollar Advance is
outstanding, any repayment or prepayment of such Eurodollar Advance is made
for any reason (including as a result of acceleration or illegality) on a date
which is prior to the last day of the Interest Period applicable thereto, the
Borrower agrees to indemnify each Lender against, and to pay on demand directly
to such Lender the amount (calculated by such Lender using any reasonable
method chosen by such Lender which is customarily used by such Lender for such
purpose) equal to any loss or out-of-pocket expense suffered by such Lender as
a result of such failure to borrow convert, or continue, or such termination,
repayment or prepayment, including any loss, cost or expense suffered by such
Lender in liquidating or employing deposits acquired to fund or maintain the
funding of such Eurodollar Advance or redeploying funds prepaid or repaid, in
amounts which correspond to such Eurodollar Advance and any reasonable internal
processing charge customarily charged by such Lender in connection therewith.
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3.6 INCREASED COSTS; ILLEGALITY, ETC.
(A) INCREASED COSTS. If any Change in Law shall impose,
modify or make applicable any reserve, special deposit, compulsory loan,
assessment, increased cost or similar requirement against assets held by, or
deposits of, or advances or loans by, or other credit extended by, or any
other acquisition of funds by, any office of any Credit Party in respect of its
Eurodollar Advances which is not otherwise included in the determination of a
Eurodollar Rate or against any Letters of Credit issued hereunder and the
result thereof is to increase the cost to any Credit Party of making, renewing,
converting or maintaining its Eurodollar Advances or its commitment to make
such Eurodollar Advances, or to reduce any amount receivable under the Loan
Documents in respect of its Eurodollar Advances, or to increase the cost to any
Credit Party of issuing or maintaining the Letters of Credit or participating
therein, as the case may be, or the cost to any Credit Party of performing its
respective functions hereunder with respect to the Letters of Credit, then, in
any such case, the Borrower shall pay such Credit Party such additional amounts
as is sufficient to compensate such Credit Party for such additional cost or
reduction in such amount receivable which such Credit Party deems to be
material as determined by such Credit Party. After reimbursing such Credit
Party pursuant to the terms of this Section 3.6(a), the Borrower may at any
time, upon five Business Days' prior notice to the Credit Party, convert in
full the then outstanding Eurodollar Advances of such Credit Party into ABR
Advances and reimburse such Credit Party for all its losses and expenses as
required pursuant to Section 3.5.
(B) CAPITAL ADEQUACY. If any Credit Party determines that any
Change in Law relating to capital requirements has or would have the effect of
reducing the rate of return on such Credit Party's capital or on the capital of
such Credit Party's holding company, if any, on the Extensions of Credit to a
level below that which such Credit Party (or its holding company) would have
achieved or would thereafter be able to achieve but for such Change in Law
(after taking into account such Credit Party's (or such holding company's)
policies regarding capital adequacy), the Borrower shall pay to such Credit
Party (or such holding company) such additional amount or amounts as will
compensate such Credit Party (or such holding company) for such reduction.
(C) ILLEGALITY. Notwithstanding any other provision hereof,
if any Lender shall reasonably determine that any law, regulation, treaty or
directive, or any change therein or in the interpretation or application
thereof, shall make it unlawful for such Lender to make or maintain any
Eurodollar Advance as contemplated by this Agreement, such Lender shall
promptly notify the Borrower and the Administrative Agent thereof, and n. the
commitment of such Lender to make such Eurodollar Advances or convert ABR
Advances to Eurodollar Advances shall forthwith be suspended, o. such Lender
shall fund its portion of each requested Eurodollar Advance as an ABR Advance
and p. such Lender's Loans then outstanding as such Eurodollar Advances, if
any, shall be converted automatically to ABR Advances on the last day of the
then current Interest Period applicable thereto or at such earlier time as may
be required by law. The commitment of any such Lender with respect to
Eurodollar Advances shall be suspended until such Lender shall notify the
Administrative Agent and the Borrower that the circumstances causing such
suspension no longer exist. Upon receipt of such notice by each of the Ad-
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ministrative Agent and the Borrower, such Lender's commitment to make or
maintain Eurodollar Advances shall be reinstated.
(D) SUBSTITUTED INTEREST RATE. In the event that q. 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 3.1 or r. the Required Lenders shall have notified the Administrative
Agent that they have 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 Lenders of maintaining or
funding loans bearing interest based on such Eurodollar Rate, with respect to
any portion of the Loans that the Borrower has requested be made as Eurodollar
Advances or Eurodollar Advances that will result from the requested conversion
or continuation of any portion of the Advances into or of Eurodollar Advances
(each, an "AFFECTED ADVANCE"), the Administrative Agent shall promptly notify
the Borrower and the Lenders (by telephone or otherwise, to be promptly
confirmed in writing) of such determination, on or, to the extent practicable,
prior to the requested Borrowing Date or Conversion Date for such Affected
Advances. If the Administrative Agent shall give such notice, (a) any Affected
Advances shall be made as ABR Advances, (b) the Advances (or any portion
thereof) that were to have been converted to Affected Advances shall be
converted to ABR Advances and (c) any outstanding Affected Advances shall be
converted, on the last day of the then current Interest Period with respect
thereto, to ABR Advances. Until any notice under clauses (i) or (ii), as the
case may be, of this Section has been withdrawn by the Administrative Agent (by
notice to the Borrower promptly upon either (x) the Administrative Agent 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 3.1 or (y) the Administrative Agent
having been notified by such Required Lenders that circumstances no longer
render the Advances (or any portion thereof) Affected Advances), no further
Eurodollar Advances shall be required to be made by the Lenders, nor shall the
Borrower have the right to convert all or any portion of the Loans to or as
Eurodollar Advances.
(E) PAYMENT; CERTIFICATES. Each payment pursuant to
subsections (a) or (b) above shall be made within 10 days after demand
therefor, which demand shall be accompanied by a certificate of the Credit
Party demanding such payment setting forth the calculations of the additional
amounts payable pursuant thereto. Each such certificate shall be conclusive
absent manifest error.
3.7 TAXES
(A) PAYMENTS FREE OF TAXES. All payments by or on account of
the Borrower under any Loan Document to or for the account of a Credit Party
shall be made free and clear of, and without any deduction or withholding for
or on account of, any and all present or future Indemnified Taxes or Other
Taxes, provided that if the Borrower or any other Person is required by any
law, rule, regulation, order, directive, treaty or guideline to make any
deduction or withholding in respect of such Indemnified Tax or Other Tax from
any amount required to be
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paid by the Borrower to or on behalf of any Credit Party under any Loan
Document (each a "Required Payment"), then (i) the Borrower shall notify the
Administrative Agent and such Credit Party of any such requirement or any
change in any such requirement as soon as the Borrower becomes aware thereof,
(ii) the Borrower shall pay such Indemnified Tax or Other Tax prior to the date
on which penalties attach thereto, such payment to be made (to the extent that
the liability to pay is imposed on the Borrower) for its own account or (to the
extent that the liability to pay is imposed on such Credit Party) on behalf and
in the name of such Credit Party, (iii) the Borrower shall pay to such Credit
Party an additional amount such that such Credit Party shall receive on the due
date therefor an amount equal to the Required Payment had no such deduction or
withholding been made or required, and (iv) the Borrower shall, within 30 days
after paying such Indemnified Tax or Other Tax, deliver to the Administrative
Agent and such Credit Party satisfactory evidence of such payment to the
relevant Governmental Authority.
(B) REIMBURSEMENT FOR TAXES AND OTHER TAXES PAID BY CREDIT
PARTY. The Borrower shall reimburse each Credit Party, within ten days after
written demand therefor, for the full amount of all 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 the Borrower 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 (other than any such
penalties, interest or expenses that are incurred by such Credit Party's
unreasonably taking or omitting to take action with respect to such Indemnified
Taxes or Other Taxes), 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 shall be conclusive absent manifest
error. In the event that any Credit Party determines that it received a refund
or credit for Indemnified Taxes or Other Taxes paid by the Borrower under this
Section 3.7, such Credit Party shall promptly notify the Borrower of such fact
and shall remit to the Borrower the amount of such refund or credit.
(C) FOREIGN CREDIT PARTIES. Any Foreign Credit Party that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower 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 completed and
executed documentation prescribed by applicable law (e.g., Internal Revenue
Form 4224 or Form 1001) or reasonably requested by the Borrower as will permit
such payments to be made without withholding or at a reduced rate.
3.8 REPAYMENT; EVIDENCE OF DEBT
(A) The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of each Lender the Loans in such
amounts and at such times as is provided in this Agreement.
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(B) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(C) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, its character as a
Eurodollar Loan or an ABR Loan, and any Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the
Lenders and each Lender's share thereof.
(D) The entries made in the accounts maintained pursuant to
subsections (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein, provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(E) Any Lender may request that Loans made by it be evidenced
by a promissory note (and such Lender shall be deemed to have requested a
promissory note if it shall not have expressly advised the Administrative Agent
in writing that it does not want a promissory note). In such event, the
Borrower shall prepare, execute and deliver to such Lender a promissory note
payable to the order of such Lender (or, if requested by such Lender, to such
Lender and its registered assigns) in the form of Exhibit A. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 11.5) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Credit Parties to enter into this Agreement and
extend or participate in the Extensions of Credit provided herein, the Borrower
makes the following representations and warranties to the Credit Parties:
4.1 ORGANIZATION AND POWER
Each of the Borrower and its Subsidiaries s. is duly
organized or formed, validly existing and in good standing under the laws of
the jurisdiction of its organization, t. has all requisite power and authority
to own its property and to carry on its business as now conducted, and u. is
duly qualified to do business and is in good standing in each jurisdiction in
which the nature of the business conducted therein or the property owned by it
therein makes such qualification necessary, except where such failure to
qualify or be in good standing, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse effect.
4.2 AUTHORIZATION; ENFORCEABILITY
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Each Transaction is within the corporate, partnership or
other analogous powers of each of the Borrower and each Subsidiary party
thereto and have been duly authorized by its Managing Person and, if required,
by any other Person including holders of its Capital Stock. Each Loan Document
has been validly executed and delivered by each Loan Party party thereto and
constitutes a legal, valid and binding obligation of each such Loan Party,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
4.3 APPROVALS; NO CONFLICTS
Except as provided on Schedule 4.3, no Transaction v.
requires any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority or any other Person, except such as have
been obtained or made and are in full force and effect, w. will violate any
applicable law, rule or regulation or the Organizational Documents of the
Borrower or any Subsidiary or any order of any Governmental Authority, x. will
violate or result in a default under any indenture, agreement or other
instrument binding upon the Borrower or any Subsidiary or their assets, or give
rise to a right thereunder to require any payment to be made by the Borrower or
any Subsidiary, and y. will result in the creation or imposition of any Lien on
any asset of the Borrower or any Subsidiary other than the Permitted Liens.
4.4 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE
(A) The Borrower has heretofore furnished to each Credit
Party the consolidated balance sheet of the Borrower and its Subsidiaries and
the related consolidated statements of operations and cash flows as of and for
the nine-month period ended September 30, 1997, as audited and certified by the
Accountants. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of
the Borrower and consolidated Subsidiaries as of such dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of the quarterly statements referred to above.
Except as fully reflected in such financial statements, there are no material
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, contingent or
otherwise and whether or not due).
(B) Since September 30, 1997, except for the Transactions,
each of the Borrower and each Subsidiary which was a Subsidiary as of such date
has conducted its business only in the ordinary course and there has been no
Material Adverse change.
(C) Since the date of its acquisition (or if not acquired,
its creation), each Subsidiary has conducted its business only in the ordinary
course and there has been no Material Adverse change.
4.5 PROPERTIES
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(A) Except as set forth on Schedule 4.5(a), each of the
Borrower and each Restricted Subsidiary has good and marketable title to, or
valid leasehold interests in, (i) all of its property, real and personal,
material to its business, and (ii) all Venues, in either case subject to no
Liens, except Permitted Liens and except for minor defects in title that do not
interfere in any material respect with its ability to conduct its business as
currently conducted or to utilize such properties for their intended purposes.
(B) Each of the Borrower and each Restricted Subsidiary owns
or is licensed to use all patents, trademarks, tradenames, copyrights and other
intellectual property material to its business, and the use thereof by the
Borrower or any Restricted Subsidiary does not conflict with or infringe upon
the valid rights of others, except for any such conflicts or infringements that
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse effect.
(C) Schedule 4.5(c) sets forth the address of each real
property that is owned or leased by any Loan Party as of the Effective Date.
4.6 LITIGATION
Except as set forth on Schedule 4.6, there are no actions,
suits or proceedings at law or in equity or by or before any Governmental
Authority (whether 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 or which may
affect the property of any the Borrower or any Subsidiary, z. that, in the good
faith opinion of the Borrower, would reasonably be expected to have an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse effect or aa.
that involve any of the Transactions. Since the Effective Date, there has been
no change in the status of any matter disclosed on Schedule 4.6 that,
individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse effect.
4.7 ENVIRONMENTAL MATTERS
Except as set forth on Schedule 4.7 and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse effect, neither the
Borrower nor any Subsidiary has bb. 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 result in a Material
Adverse effect, arising in connection with any non-compliance with or violation
of the requirements of any applicable laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Substance (as defined below) or to health and safety matters (collectively,
"ENVIRONMENTAL LAWS"), cc. to the best knowledge of the Borrower, any
threatened or actual liability in connection with the release or threatened
release of any Hazardous Substance
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into the environment which individually or in the aggregate could reasonably be
expected to result in a Material Adverse effect, dd. 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 Hazardous Substance into
the environment for which the Borrower or any of its Subsidiaries is or would
be liable, which liability could reasonably be expected to result in a Material
Adverse effect, or ee. has received notice that any the Borrower or any of its
Subsidiaries is or may be liable to any Person under any Environmental Law,
which liability could reasonably be expected to result in a Material Adverse
effect. Each of the Borrower and each of its Subsidiaries is in compliance
with the financial responsibility requirements of Environmental Laws to the
extent applicable, except in those cases in which the failure so to comply
would not reasonably be expected to result in a Material Adverse effect. For
purposes hereof, "HAZARDOUS SUBSTANCE" shall mean any hazardous or toxic
substance, material, waste or other pollutants, including petroleum or
petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes, radioactive
materials or any other substance or waste regulated pursuant to any
Environmental Law. Since the Effective Date, there has been no change in the
status of any matter disclosed on Schedule 4.7 that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse effect.
4.8 COMPLIANCE WITH LAWS AND AGREEMENTS; NO DEFAULT
Each of the Borrower and each Subsidiary is in compliance
with all laws, regulations and orders of any Governmental Authority applicable
to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse effect. No Default has occurred and is continuing.
4.9 INVESTMENT COMPANIES AND OTHER REGULATED ENTITIES
None of the Borrower, any Subsidiary nor any Person
controlled by, controlling, or under common control with, the Borrower or any
Subsidiary, is ff. an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940, as amended, gg. a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935 or the Federal Power Act, as amended, or
hh. subject to any statute or regulation which prohibits or restricts the
incurrence of Indebtedness for borrowed money, including 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.
4.10 FEDERAL RESERVE REGULATIONS
(A) 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.
After giving effect to each Transaction and the making of each Extension of
Credit, Margin Stock will constitute less than 25% of the assets (as determined
by any reasonable method) of the Borrower and its Subsidiaries.
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(B) No part of the proceeds of any Extension of Credit will
be used, whether directly or indirectly, and whether immediately, incidentally
or ultimately, for any purpose that entails a violation of, or that is
inconsistent with, the provisions of Regulation G, U or X.
4.11 ERISA
Each Pension Plan is in compliance with ERISA and the Code,
where applicable, in all material respects and no ERISA Event has occurred or
is reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse effect. The present
value of all accumulated benefit obligations under each Pension Plan (based on
the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $500,000 the fair
market value of the assets of such Pension Plan, and the present value of all
accumulated benefit obligations of all underfunded Pension Plans (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $500,000 the fair market value of
the assets of all such underfunded Pension Plans.
4.12 TAXES
Except as set forth on Schedule 4.12, each of the Borrower
and each Subsidiary has timely filed or caused to be filed all tax returns and
reports required to have been filed and has paid, or caused to be paid, all
Taxes required to have been paid by it except ii. Taxes being contested in good
faith by appropriate proceedings and for which the Borrower or such Subsidiary,
as applicable, has set aside on its books adequate reserves, or jj. to the
extent that the failure to do so could not reasonably be expected to result in
a Material Adverse effect.
4.13 SUBSIDIARIES
As of the Effective Date, kk. the Borrower has only the
Subsidiaries set forth on, and the authorized, issued and outstanding Capital
Stock of the Borrower and its Subsidiaries is as set forth on, Schedule 4.13
and ll. the ownership interests in each Subsidiary of the Borrower are duly
authorized, validly issued, fully paid and nonassessable and are owned
beneficially and of record by the Persons set forth on such Schedule 4.13, free
and clear of all Liens (other than Permitted Liens). Except as set forth on
Schedule 4.13, neither the Borrower nor any of its Subsidiaries has issued any
securities convertible into, or options or warrants for, any common or
preferred equity securities thereof and there are no agreements, voting trusts
or understandings binding upon the Borrower or any of its Subsidiaries with
respect to the voting securities of the Borrower or any of its Subsidiaries 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.
4.14 ABSENCE OF CERTAIN RESTRICTIONS
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No indenture, certificate of designation for preferred stock,
agreement or instrument to which the Borrower or any of its Subsidiaries is a
party (other than this Agreement), prohibits or limits in any way, directly or
indirectly the ability of any Subsidiary to make Restricted Payments or loans
to, to make any advance on behalf of, or to repay any Indebtedness to, the
Borrower or to another Subsidiary.
4.15 STATUS AS SENIOR DEBT
The Indebtedness of the Borrower under the Loan Documents
constitutes "Designated Senior Debt" and "Senior Debt" each as defined in the
Subordinated Indenture.
4.16 LABOR RELATIONS
As of the Effective Date, there are no material controversies
pending that involve the Borrower or any Subsidiary which might result in a
Material Adverse effect.
4.17 INSURANCE
Schedule 4.17 sets forth a description of all insurance
maintained by or on behalf of the Borrower and the Subsidiaries as of the
Effective Date. As of the Effective Date, all premiums in respect of such
insurance that are due and payable have been paid.
4.18 NO MISREPRESENTATION
The Borrower has disclosed to each Credit Party all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse effect. Neither the Confidential Information Memorandum dated
January 1998, prepared in connection with the syndication of this Agreement nor
any certificate or report from time to time furnished by any of the Loan
Parties in connection with the Transactions contains or will contain a
misstatement of material fact, or omits or will omit to state a material fact
required to be stated in order to make the statements therein contained not
misleading in the light of the circumstances under which made, provided that
any projections or pro-forma financial information contained therein are based
upon good faith estimates and assumptions believed by the Borrower to be
reasonable at the time made, it being recognized by the Credit Parties that
such projections as to future events are not to be viewed as facts, and that
actual results during the period or periods covered thereby may differ from the
projected results.
4.19 VALIDITY AND PERFECTION OF SECURITY INTEREST
The Security Agreement is effective to create in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral and when mm.
financing statements in appropriate form are filed in the offices specified on
Schedule 6 to the Perfection Certificate, nn. Collateral consisting of
Securities Certificates and Instruments (as defined in the Security Agreement)
are delivered to the Administrative Agent,
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oo. Collateral consisting of cash is deposited in the Cash Collateral Account,
and pp. either the Security Agreement or Grants of Security Interest (as
defined in the Security Agreement) with respect to Trademarks and Copyrights
(as defined in the Security Agreement) are filed in the United States Patent
and Trademark Office and the United States Copyright Office, respectively, the
security interest granted to the Administrative Agent in the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of the Loan Parties in such Collateral, in each case
prior and superior in right to any other Person, other than with respect to
Permitted Liens.
4.20 TRANSACTION DOCUMENTS
On and after the consummation of each Transaction, the
Transaction Documents applicable thereto are and shall be in full force and
effect.
4.21 FINANCIAL CONDITION
On and after each Borrowing Date and each date upon which a
Transaction shall be consummated, neither the Borrower nor any Subsidiary
Guarantor is Insolvent.
4.22 REPRESENTATIONS WITH RESPECT TO THE MORTGAGES
Upon the delivery to the Administrative Agent of each
Mortgage and on and after each Borrowing Date and each date upon which a
Transaction shall be consummated, (i) each of the representations and
warranties contained in such Mortgage is restated as of such date and (ii) such
Mortgage is effective to create, subject to the exceptions listed in each title
insurance policy covering such Mortgage, in favor of the Administrative Agent,
for the ratable benefit of the Required Lenders, a legal, valid and enforceable
Lien on all of the Loan Parties' right, title and interest in and to the
Mortgaged Properties thereunder and the proceeds thereof, and when such
Mortgage is duly recorded in the applicable governmental offices, such Mortgage
shall constitute a Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Mortgaged Properties and the proceeds
thereof, in each case prior and superior in right to any other Person, other
than with respect to the rights of Persons pursuant to Permitted Liens.
ARTICLE 5. CONDITIONS PRECEDENT TO EFFECTIVENESS AND FIRST
EXTENSIONS OF CREDIT
In addition to the conditions precedent set forth in Article 6, the
obligation of the Credit Parties to make Extensions of Credit shall not become
effective until each of the following conditions precedent have been satisfied
(or waived pursuant to Section 11.1):
5.1 EVIDENCE OF ACTION
The Administrative Agent shall have received a certificate,
dated the Effective Date, of the Secretary or Assistant Secretary or other
analogous counterpart of each Loan Party:
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(A) attaching a true and complete copy of the resolutions of
its Managing Person and of all other documents evidencing all necessary
corporate, partnership or other action (in form and substance satisfactory to
the Administrative Agent) taken to authorize the Loan Documents to which it is
a party and the transactions contemplated thereby;
(B) attaching a true and complete copy of its Organizational
Documents;
(C) setting forth the incumbency of its officer or officers
(or other analogous counterpart) who may sign the Loan Documents, including
therein a signature specimen of such officer or officers (or other analogous
counterpart); and
(D) attaching a certificate of good standing of the Secretary
of State of the jurisdiction of its formation and of each other jurisdiction in
which it is qualified to do business, except, in the case of such other
jurisdiction, when the failure to be in good standing in such jurisdiction
would not result in a Material Adverse effect.
5.2 THIS AGREEMENT
The Administrative Agent (or Special Counsel) shall have
received, in respect of each Person listed on the signature pages of this
Agreement, either (a) a counterpart signature page hereof signed on behalf of
such Person, or (b) written evidence satisfactory to the Administrative Agent
(which may include a facsimile transmission of a signed signature page of this
Agreement) that a counterpart signature page hereof has been signed on behalf
of such Person.
5.3 NOTES
The Administrative Agent shall have received a Note for each
Lender (other than a Lender which shall have expressly requested that it not
receive a Note), dated the Effective Date, duly executed by a duly authorized
officer of the Borrower.
5.4 OPINION OF COUNSEL TO THE LOAN PARTIES
The Administrative Agent shall have received a favorable
opinion of Baker & McKenzie, counsel to the Loan Parties, addressed to the
Credit Parties, dated the Effective Date, substantially in the form of Exhibit
E.
5.5 OFFICER'S CERTIFICATE
The Administrative Agent shall have received a certificate of
the President, a Vice President or a Financial Officer of the Borrower, dated
the Effective Date, in all respects satisfactory to the Administrative Agent
(A) certifying that as of the Effective Date (i) no Default
exists, and (ii) the representations and warranties contained in the Loan
Documents are true and correct,
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(B) certifying that Broadcasting has contributed to the
Borrower or any Subsidiary Guarantor all of the concert and other live
entertainment assets of Broadcasting and its Subsidiaries in accordance with
the Distribution Agreement as in effect on the Effective Date (the
"CONTRIBUTION"),
(C) certifying that the Borrower has issued, and is in
receipt of not less than $339,500,000 of the proceeds of the sale of, the
Subordinated Notes,
(D) certifying that qq. the Pace Acquisition and the Pavilion
Partners Acquisition have been (or simultaneously with the making of the first
Extension of Credit is being) consummated in accordance with the terms of
Section 8.5(a), rr. the Borrower owns not less than 100% of each class of the
Capital Stock of Pace and not less than 100% of the Capital Stock of Pavilion
Partners, and ss. all outstanding Indebtedness of Pace, Pavilion Partners
(other than the Sanwa Debt) and their respective Subsidiaries shall has been
(or simultaneously with the making of the first Extension of Credit is being)
paid in full and all agreements (other than the Sanwa Loan Documents) with
respect thereto have been cancelled or terminated, and all Liens, if any,
securing the same shall have been terminated (and attaching evidence
satisfactory to the Administrative Agent of such Lien terminations),
(E) certifying that, except as set forth on Schedule 4.3, all
approvals and consents of all Persons required to be obtained in connection
with the consummation of the Initial Transactions have been obtained, all
required notices have been given and all required waiting periods have expired,
and
(F) attaching a true, complete and correct copy of each of
the Transaction Documents executed and delivered through the Effective Date.
5.6 SECURITY DOCUMENTS, SEARCH REPORTS, ETC.
The Administrative Agent (or Special Counsel) shall have
received a counterpart of the Security Agreement, dated the Effective Date,
signed by the Borrower and each Subsidiary Guarantor (or a facsimile of a
signature page thereof signed by the Borrower) together with the following:
(A) a completed Perfection Certificate, dated the Effective
Date and signed by both a Financial Officer and the general counsel of the
Borrower, together with all attachments contemplated thereby, including the
results of a search of the Uniform Commercial Code (or equivalent) filings and
the results of certain copyright, trademark, tax and judgment lien searches
made with respect to the Borrower and each Subsidiary Guarantor in the
jurisdictions contemplated by the Perfection Certificate and such other
jurisdictions as the Administrative Agent may reasonably request, and copies of
the financing statements (or similar documents) disclosed by such search and
evidence reasonably satisfactory to the Administrative Agent that the Liens
indicated by such financing statements (or similar documents) are permitted by
Section 8.2 or have been released;
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(B) except as otherwise provided on Schedule 5.6(b), one or
more certificates (to the extent any Capital Stock of a Subsidiary is
represented by a certificate) evidencing (i) 100% of the outstanding Capital
Stock of each Domestic Subsidiary which is not an Excluded Subsidiary, and (ii)
not less than 65% of the issued and outstanding Capital Stock of each Foreign
Subsidiary, in each case, together with undated stock powers with respect
thereto, executed in blank by the Borrower or such Subsidiary Guarantor, as the
case may be;
(C) except as otherwise provided on Schedule 5.6(b),
Instruments (as defined in the Security Agreement) constituting Collateral,
duly indorsed in blank by the Borrower or such Subsidiary Guarantor, as the
case may be;
(D) Grants of Security Interest with respect to Trademarks
and Copyrights (as defined in the Security Agreement), substantially in the
form of Annexes B-1 and B-2, respectively, to the Security Agreement;
(E) such Uniform Commercial Code Financing Statements,
executed by the appropriate Loan Party, as shall be reasonably requested by the
Administrative Agent; and
(F) such other documents as the Administrative Agent may
require in connection with the creation and perfection of the security
interests intended to be granted under the Security Documents.
5.7 MATERIAL AGREEMENTS
The Administrative Agent shall have received a fully executed
copy of each of the Material Agreements requested which is not delivered
pursuant to Section 5.5(f), in each case certified to be a true and complete
copy thereof by the Secretary or Assistant Secretary of the Borrower, each of
which shall be in form and substance satisfactory to the Administrative Agent.
5.8 PROPERTY, PUBLIC LIABILITY AND OTHER INSURANCE
The Administrative Agent shall have received a certificate of
all insurance maintained by the Borrower and its Subsidiaries in form and
substance reasonably satisfactory to the Administrative Agent, together with
the endorsements required by Section 5.4 of the Security Agreement.
5.9 COMPLIANCE CERTIFICATE
The Administrative Agent shall have received a Compliance
Certificate signed by a Financial Officer of the Borrower, in all respects
reasonably satisfactory to the Administrative Agent, dated the Effective Date,
and (i) stating that the Borrower is in compliance with all covenants on a
pro-forma basis after giving effect to each Initial Transaction, and (ii)
attaching a copy of a pro-forma consolidated balance sheet of the Borrower
utilized for purposes of preparing such Compliance Certificate, which pro-forma
consolidated balance sheet presents the
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Borrower's good faith estimate of its pro-forma consolidated financial
condition at the date thereof, after giving effect to the Initial Transactions.
5.10 SOLVENCY CERTIFICATE
The Administrative Agent shall have received a certificate of
a Financial Officer of the Borrower, dated the Effective Date, in all respects
reasonably satisfactory to the Administrative Agent certifying that, to the
best knowledge of such Financial Officer, after giving effect to the Initial
Transactions neither the Borrower nor any Subsidiary Guarantor is Insolvent.
5.11 FEES
The Administrative Agent shall have received all fees and
other amounts due and payable to the Administrative Agent under the Loan
Documents on or prior to the Effective Date, including, to the extent invoiced,
reimbursement or payment of the fees and disbursements of Special Counsel and
all other out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder.
5.12 OTHER DOCUMENTS
The Administrative Agent shall have received such other
documents, each in form and substance reasonably satisfactory to it, as it
shall reasonably request.
The Administrative Agent shall notify the Borrower and each Credit Party of the
date upon which each of the conditions precedent set forth in this Article 5
have been satisfied (or waived in accordance with Section 11.1), and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the
obligations of the Credit Parties to make Extensions of Credit shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 11.1) on or before March 2, 1998 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
ARTICLE 6. CONDITIONS TO EACH CREDIT EVENT
The obligation of each Credit Party to make any Extension of Credit
(other than a participation in a Letter of Credit) under this Agreement shall
be subject to the satisfaction of the following conditions precedent as of the
date thereof:
6.1 COMPLIANCE
On each Borrowing Date and after giving effect to the
Extensions of Credit thereon tt. no Default shall have occurred or be
continuing, and uu. the representations and warranties contained in the Loan
Documents (other than representations and warranties contained in Section
4.4(a)) shall be true and correct with the same effect as though such
representations and warranties had been made on such Borrowing Date, except to
the extent such representations
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and warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct on and as of
such earlier date. Each Extension of Credit and each Credit Request therefor
shall constitute a certification by the Borrower as of such Borrowing Date that
each of the foregoing matters is true and correct in all respects.
6.2 CREDIT REQUEST
With respect to each Extension of Credit, the Administrative
Agent shall have received a Credit Request, executed by a duly authorized
officer of the Borrower.
6.3 LAW
Such Extension of Credit shall not be prohibited by any
applicable law, rule or regulation.
ARTICLE 7. AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as any Commitment is in effect and
until the principal of, and interest on, each Loan, all Reimbursement
Obligations, all Fees and all other amounts payable under the Loan Documents
shall have been paid in full:
7.1 FINANCIAL STATEMENTS AND INFORMATION
The Borrower shall furnish or cause to be furnished to the
Administrative Agent and each Lender:
(A) within 90 days after the end of each fiscal
year:
(I) a copy of its audited consolidated
balance sheet and related statements of operations, stockholders'
equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous
fiscal year, all reported on by the Accountants (without (x) a "going
concern" or like qualification or exception, (y) any qualification or
exception as to the scope of such audit or (z) any exception or
qualification which relates to the treatment or classification of any
item and which, as a condition to the removal of such qualification,
would require an adjustment to such item, the effect of which would be
to cause the Borrower to be in default of any of its obligations under
Section 8.16 (each, an "IMPERMISSIBLE QUALIFICATION")) to the effect
that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis
in accordance with GAAP consistently applied; and
(II) a copy of the balance sheet and
related statements of operations, stockholders' equity and cash flows
for the Borrower and its Restricted Subsidiaries, taken as a whole, as
of the end of and for such year, setting forth in each
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case in comparative form the figures for the previous fiscal year to
the extent available, certified by a Financial Officer to the effect
that such financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and
the Restricted Subsidiaries, taken as a whole, in accordance with GAAP
consistently applied (except with respect to principles of
consolidation as they relate solely to Unrestricted Subsidiaries);
(B) within 45 days after the end of after the end of
each of the first three fiscal quarters of each fiscal year:
(I) a copy of its (1) consolidated balance
sheet and the related consolidated statements of operations and cash
flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in
comparative form the figures for the corresponding period or periods
of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, and (2) unaudited financial information for each
of the Borrower's business lines, all certified by one of its
Financial Officers as presenting fairly in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes; and
(II) a copy of the balance sheet and related
statements of operations, stockholders' equity and cash flows for the
Borrower and its Restricted Subsidiaries, taken as a whole, as of the
end of such fiscal quarter and the then elapsed portion of such fiscal
year, setting forth in each case in comparative form the figures for
the previous fiscal year to the extent available, certified by a
Financial Officer to the effect that such financial statements present
fairly in all material respects the financial condition and results of
operations of the Borrower and the Restricted Subsidiaries, taken as a
whole, in accordance with GAAP consistently applied (subject to normal
year-end audit adjustments and the absence of footnotes, and except
with respect to principles of consolidation as they relate solely to
Unrestricted Subsidiaries);
(C) concurrently with any delivery of financial
statements under subsections (a) or (b) above, a certificate (a "COMPLIANCE
CERTIFICATE") of a Financial Officer of the Borrower, substantially in the form
of Exhibit D, vv. certifying as to whether a Default has occurred and, if so,
specifying the details thereof and any action taken or proposed to be taken
with respect thereto, ww. setting forth reasonably detailed calculations
demonstrating compliance with Section 8.16 and xx. stating whether any change
in GAAP or in the application thereof has occurred since the date of the
audited financial statements referred to in Section 4.4 and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such Compliance Certificate;
(D) as soon as available but in any event no later
than 30 days after the end of each calendar month, yy. a report on the
Unconsolidated Investments in such form as shall be mutually agreed upon by the
Borrower and the Administrative Agent, and zz. unaudited
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revenue and expense statements as of the end of such calendar month and for the
period from the beginning of the then current fiscal year to the end of such
calendar month, including comparative figures from comparable periods in the
prior year and a comparison of actual results to those set forth in the budget
for such period, all prepared by Borrower and otherwise in form and detail
satisfactory to the Administrative Agent;
(E) concurrently with any delivery of financial
statements under subsection (a) above, a certificate of the Accountants stating
whether they obtained knowledge during the course of their examination of such
financial statements of any Default (which certificate may be limited to the
extent required by accounting rules or guidelines);
(F) concurrently with any delivery of financial
statements under subsection (a) above, a certificate executed by a Financial
Officer and the general counsel of the Borrower aaa. setting forth the
information required pursuant to Section 2 of the Perfection Certificate or
confirming that there has been no change in such information since the date of
such certificate or the date of the most recent certificate delivered pursuant
to this subsection (f), bbb. certifying that all Uniform Commercial Code
financing statements or other appropriate filings, recordings or registrations,
including all refilings, rerecordings and re-registrations, containing a
description of the Collateral, have been filed of record in each governmental,
municipal or other appropriate office in each jurisdiction identified pursuant
to clause (i) above to the extent necessary to protect and perfect the security
interest of the Administrative Agent for a period of not less than 18 months
after the date of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period) and ccc. identifying in
the format of Schedules 7, 8 and 10 to the Perfection Certificate, as
applicable, Equity Interests (as defined in the Security Agreement) of the
Borrower, Instruments (as defined in the Security Agreement) and Intellectual
Property of the Borrower and each Subsidiary Guarantor in existence on the date
thereof and not then listed on such Schedules or previously so identified to
the Administrative Agent;
(G) promptly after the same become publicly
available, copies of all material periodic and other reports, proxy statements
and other materials filed by the Borrower or any Subsidiary with the SEC or
with any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be;
(H) not later than thirty days after the first day
of each fiscal year, a budget for the Borrower and its Subsidiaries for such
fiscal year, in form and substance reasonably satisfactory to the
Administrative Agent; and
(I) promptly following any request therefor, such
other information regarding the Borrower or any Subsidiaries, or compliance
with the terms of this Agreement, as any Credit Party may reasonably request.
7.2 NOTICE OF MATERIAL EVENTS
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The Borrower shall furnish to the Administrative Agent and
each Lender, prompt written notice of the following together with a statement
of a Financial Officer or other executive officer of the Borrower setting forth
the details of the event or development requiring such notice and, if
applicable, any action taken or proposed to be taken with respect thereto:
(A) the occurrence of any Default;
(B) the filing or commencement of any action, suit
or proceeding by or before any Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could in the
good faith opinion of the Borrower reasonably be expected to result in a
Material Adverse effect;
(C) any lapse, refusal to renew or extend or other
termination of any material license, permit, franchise or other authorization
issued to the Borrower or any Subsidiary by any Person or Governmental
Authority, which lapse, refusal or termination, could reasonably be expected to
result in a Material Adverse effect;
(D) the occurrence of any ERISA Event that, alone or
together with any other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse effect;
(E) the occurrence of any Equity Issuance resulting
in Net Cash Proceeds;
(F) the occurrence of any insured damage to any
portion of any Collateral or the commencement of any action or proceeding for
the taking of any Collateral or any part thereof or interest therein under
power of eminent domain or by condemnation or similar proceeding, the value of
which would reasonably be expected to exceed $1,000,000; or
(G) the occurrence of any other development that has
or could reasonably be expected to result in, a Material Adverse effect.
7.3 EXISTENCE; CONDUCT OF BUSINESS
The Borrower shall, and shall cause each Subsidiary to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect ddd. its legal existence (provided that the foregoing shall not
prohibit any merger or consolidation not prohibited by Section 8.3), and eee.
all rights, licenses, permits, privileges and franchises the absence of which
would reasonably be expected to have a Material Adverse effect.
7.4 PAYMENT OF OBLIGATIONS
The Borrower shall, and shall cause each Subsidiary to, pay
and discharge when due, its obligations, including obligations with respect to
Taxes, which, if unpaid, could reasonably be expected to result in a Material
Adverse effect, except where fff. the validity or
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amount thereof is being contested in good faith by appropriate proceedings
diligently conducted, ggg. the Borrower or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP and hhh.
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse effect.
7.5 MAINTENANCE OF PROPERTIES
The Borrower shall, and shall cause each Subsidiary to,
maintain, protect and keep in good repair, working order and condition
(ordinary wear and tear excepted) at all times, all of its property other than
property, the loss of which would not reasonably be expected to have a Material
Adverse effect.
7.6 INSURANCE
The Borrower shall, and shall cause each Subsidiary to,
maintain with financially sound and reputable insurance companies iii.
insurance in at least such amounts and against at least such risks (but
including in any event public liability, product liability and business
interruption coverage) as are usually insured against in the same general area
by companies engaged in the same or a similar business and jjj. such other
insurance as is required pursuant to the terms of any Security Document, and
furnish to the Administrative Agent, upon written request, full information as
to the insurance carried.
7.7 BOOKS AND RECORDS; INSPECTION RIGHTS
The Borrower shall, and shall cause each Subsidiary to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities and, at all reasonable times upon reasonable prior notice, permit
representatives of the Credit Parties to kkk. visit the offices of the Borrower
and each Subsidiary, lll. examine such books and records and Accountants'
reports relating thereto, mmm. make copies or extracts therefrom, nnn. discuss
the affairs of the Borrower and each Subsidiary with the respective officers
thereof, ooo. to examine and inspect the property of the Borrower and each
Subsidiary and ppp. meet and discuss the affairs of the Borrower and each
Subsidiary with the Accountants.
7.8 COMPLIANCE WITH LAWS
The Borrower shall, and shall cause each Subsidiary to,
comply with all laws, rules, regulations and orders of any Governmental
Authority applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse effect.
7.9 ADDITIONAL SUBSIDIARIES
In the event that on or after the Effective Date, any Person
shall become a Subsidiary or any Subsidiary (other than a Subsidiary Guarantor
or an Excluded Subsidiary) shall
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at any time be both a Domestic Subsidiary and a Restricted Subsidiary, the
Borrower shall qqq. notify the Administrative Agent in writing within five
Business Days thereof, rrr. in the event that such Person shall be both a
Domestic Subsidiary and a Restricted Subsidiary, cause such Person to execute
and deliver to the Administrative Agent a completed Guarantee Supplement and to
become a party to the Security Agreement and each other applicable Security
Document in the manner provided therein within 5 Business Days thereafter and
to promptly take such actions to create and perfect Liens on such Person's
assets to secure such Person's obligations under the Loan Documents as the
Administrative Agent or the Required Lenders shall reasonably request, sss.
cause any shares of Capital Stock of, or promissory notes evidencing
Indebtedness of, such Person that are owned by or on behalf of the Borrower or
any Subsidiary Guarantor to be pledged pursuant to the Security Agreement
within ten Business Days thereafter (except that, if such Person is a Foreign
Subsidiary, shares of Capital Stock of such Person to be so pledged may be
limited to 65% of the outstanding shares of Capital Stock of such Foreign
Subsidiary), ttt. cause each such new Subsidiary to deliver to the
Administrative Agent any shares of Capital Stock or promissory notes evidencing
Indebtedness of any Subsidiary (other than an Excluded Subsidiary) of the
Borrower that are owned by or on behalf of such new Subsidiary within ten
Business Days after such Subsidiary is formed or acquired (except that if the
Capital Stock owned by such Subsidiary is the Capital Stock of a Foreign
Subsidiary, shares of such Capital Stock may be limited to 65% of the
outstanding shares of Capital Stock of such Foreign Subsidiary), and uuu.
deliver to the Administrative Agent such additional Financing Statements,
Grants of Security Interest and Powers of Attorney (as each such term is
defined in the Security Interest) certificates, instruments and opinions as the
Administrative Agent may request.
7.10 ADDITIONAL COLLATERAL
If after the Effective Date, the Borrower or any other Loan
Party acquires any substantial property which would constitute Collateral, or
if the Administrative Agent or Required Lenders shall so request, the Borrower
shall, and shall cause each such Loan Party to, execute any and all documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), that may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or to grant, preserve, protect or perfect the Liens created
or intended to be created by the Security Documents or the validity or priority
of any such Lien, all at the expense of the Loan Parties. The Borrower shall
deliver to the Administrative Agent (or Special Counsel) under and pursuant to
the Security Agreement all of the share certificates and other instruments (or
appropriate replacements therefor) listed or otherwise referred to on Schedule
5.6(b), together with the appropriate stock powers and indorsements, on or
before March 9, 1998.
7.11 MORTGAGES ON OWNED AND LEASED PROPERTIES
(A) Upon demand by the Administrative Agent or the Required
Lenders, the Borrower shall cause each Loan Party to execute and deliver to the
Administrative Agent, as applicable, fee or leasehold mortgages or deeds of
trust in favor of the Administrative Agent
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covering such of the Mortgaged Properties as the Administrative Agent or the
Required Lenders may determine.
(B) In such event, the Borrower shall promptly provide the
Administrative Agent, all at the expense of the Loan Parties, with originals of
the following items, each of which must, unless indicated otherwise, be
acceptable in form and substance to the Administrative Agent and its counsel in
their sole discretion (collectively, the "MORTGAGE DOCUMENTS"): (i)
counterparts of a Mortgage with respect to each Mortgaged Property duly signed
on behalf of the record owner or lessee, as applicable, of such Mortgaged
Property properly acknowledged and in recordable form, (ii) an original policy
or policies of title insurance issued by Chicago Title Insurance Company or
another nationally recognized title insurance company reasonably acceptable to
the Administrative Agent, insuring the Lien of each such Mortgage as a valid
first Lien on the Mortgaged Property described therein, free of any other Liens
except as permitted by Section 8.2, in form and substance reasonably acceptable
to the Administrative Agent, together with such endorsements, coinsurance and
reinsurance as the Administrative Agent or the Required Lenders may reasonably
request, (iii) such surveys as may be required pursuant to such Mortgages or as
the Administrative Agent or the Required Lenders may reasonably request or
necessary for a title insurance company to "omit" the "survey exception" from
the policies of title insurance required above, (iv) a copy of the original
permanent certificate or temporary certificate of occupancy as the same may
have been amended or issued from time to time, covering each improvement
located upon the Mortgaged Properties, that were required to have been issued
by the appropriate Governmental Authority for such improvement, (v) written
confirmation from the applicable zoning commission or other appropriate
Governmental Authority stating that with respect to each Mortgaged Property as
built it complies with existing land use and zoning ordinances, regulations
and restrictions applicable to such Mortgaged Property, (vi) for each of the
Mortgaged Properties, a current appraisal of the land and the improvements
thereon prepared by an appraiser selected by the Administrative Agent, which
appraisal must indicate an appraised value satisfactory to the Administrative
Agent and which must be, in all other respects, satisfactory to the
Administrative Agent, (vii) to the extent requested by the Administrative
Agent, an environmental audit (which shall be a Phase I Audit, unless the
initial findings indicate a need for additional review) in form and substance
satisfactory to it from an environmental consulting firm acceptable to the
Administrative Agent with respect to any environmental hazards, conditions or
liabilities (contingent or otherwise) to which any Loan Party may be subject,
(viii) UCC-1 Financing Statements with respect to each Mortgaged Property duly
signed on behalf of the record owner or lessee, as applicable, of each of the
Mortgaged Properties in recordable form, covering all fixtures and
appurtenances situated upon such Mortgaged Properties, (ix) true and complete
fully executed copies of all leases on the Mortgaged Properties which must be
satisfactory to the Administrative Agent and must be subordinate to the
Mortgage, (x) fully executed original Estoppel Certificates from each existing
tenant on the Mortgaged Properties in form reasonably acceptable to the
Administrative Agent, (xi) certified copies of the current rent roll for each
of the Mortgaged Properties, (xii) Subordination, Non-disturbance and
Attornment Agreements from any tenant whose lease is not by its terms
subordinate to the Mortgage, in form acceptable to the Administrative Agent,
(xiii) certificates of insurance confirming fire, hazard and liability coverage
in amounts satisfactory to the Administrative Agent, naming the Administrative
Agent as mortgagee, with true and complete copies of such policies, and (xiv)
flood insurance
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policies or evidence that the Mortgaged Properties are not located in Federal
Flood Hazard Areas, (xv) an opinion from the Borrower's counsel concerning the
execution and enforceability of the Mortgages and other documents required to
be delivered by the Loan Parties to the Administrative Agent in connection with
the Mortgages, any litigation, judgment or agreement adversely affecting any
record owner or lessee, as applicable, or the ability of such record owner or
lessee, as applicable, to perform their respective obligations under the
Mortgages, compliance of the Mortgaged Properties with all laws and
governmental ordinances, and other matters as may be required by the
Administrative Agent or its counsel, which opinion shall be in form and
substance satisfactory to the Administrative Agent and its counsel, (xvi) for
each of the Mortgaged Properties, a written indemnity from the Loan Parties in
favor of the Administrative Agent and the Required Lenders with respect to
environmental hazards and the Americans with Disabilities Act, (xvii) with
respect to any Mortgage which will be a leasehold mortgage, a certified copy of
the ground lease for such Mortgaged Property (the "GROUND LEASE") duly executed
by the ground landlord and ground tenant, (xviii) with respect to any Mortgage
which will be a leasehold mortgage, a duly executed three party agreement by
and between the ground landlord for such Mortgaged Property, the ground tenant
and the Administrative Agent, which agreement must provide, among other things,
that (1) the Ground Lease is fully subordinated to the Mortgage, (2) the
Administrative Agent receive notices of any default under the Ground Lease and
an opportunity to cure same, (3) the ground landlord is obligated to enter into
a new lease with the Administrative Agent or its assignee upon termination
thereof for any reason (upon the same terms and conditions of the Ground
Lease), (4) the ground landlord is obligated to extend the Ground Lease after
the current term of the Ground Lease if the Loans have not been fully repaid
and terminated within such current lease term, and (5) such other terms as the
Administrative Agent may reasonably deem appropriate, and (xix) any and all
other documents, financing statements, agreements and instruments that may be
required under any applicable law, or which the Administrative Agent or the
Required Lenders may reasonably request, to create and perfect a first mortgage
Lien against the Mortgaged Properties, all at the expense of the Loan Parties.
ARTICLE 8. NEGATIVE COVENANTS
The Borrower agrees that, so long as any Commitment is in effect and
until the principal of, and interest on, each Loan, all Reimbursement
Obligations, all Fees and all other amounts payable under the Loan Documents
shall have been paid in full:
8.1 INDEBTEDNESS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any liability for
Indebtedness, except:
(A) Indebtedness due under the Loan Documents;
(B) Indebtedness of the Borrower to any Subsidiary Guarantor
or of any Subsidiary Guarantor to the Borrower or any other Subsidiary
Guarantor;
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(C) Guarantees by the Borrower of Indebtedness of any
Subsidiary Guarantor or Guarantees by any Subsidiary Guarantor of Indebtedness
of the Borrower or of any other Subsidiary Guarantor;
(D) Indebtedness of the Borrower or any Restricted Subsidiary
existing on the Effective Date as set forth on Schedule 8.1, and any
extensions, renewals and replacements of any such Indebtedness that (1) do not
increase the outstanding principal amount thereof, and (2) are on terms which
are no more onerous to the Borrower or such Restricted Subsidiary, as the case
may be, than such original Indebtedness;
(E) up to $350,000,000 of Indebtedness in respect of the
Subordinated Notes;
(F) prior to July 31, 1998, the Sanwa Debt; and
(G) other Indebtedness of the Borrower or any Restricted
Subsidiary, provided that immediately after giving effect thereto, the
Available Debt Amount shall not be less than $1.00.
8.2 NEGATIVE PLEDGE
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, create, incur, assume or suffer to exist any Lien upon any of
its property, whether now owned or hereafter acquired, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except for the following (collectively, "PERMITTED LIENS"):
(A) any Customary Lien;
(B) any Lien on any property or asset of the Borrower or any
Restricted Subsidiary existing on the date of issuance of the Subordinated
Notes and set forth on Schedule 8.2, provided that vvv. such Lien shall not
apply to any other property or asset of the Borrower or any Restricted
Subsidiary and www. such Lien shall secure only those obligations which it
secures on the Effective Date and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
(C) any Lien on any fixed or capital asset of the Borrower or
any Restricted Subsidiary, provided that such Lien shall have been incurred
prior to the acquisition of such asset by the Borrower or such Restricted
Subsidiary, or prior to the time such Person became a Subsidiary of the
Borrower, but in any event such Lien shall not have been created in
contemplation of or in connection with the acquisition of such asset, or the
creation or acquisition of any Person that, after giving effect thereto, is a
Subsidiary of the Borrower, provided that xxx. such Lien shall not apply to any
other property or assets of the Borrower or any Restricted Subsidiary (other
than fixed assets which constitute fixtures thereon or accessions thereto),
yyy. at the time of acquisition of any such fixed asset, the aggregate amount
remaining unpaid on all liabilities secured by Liens on such fixed asset,
whether or not assumed by the Borrower or a Restricted Subsidiary, shall not
exceed the fair market value at the time of acquisition of such fixed asset
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(as determined in good faith by the Board of Directors of the Borrower), (iii)
at the time of the incurrence of such liabilities and after giving effect
thereto and to the application of the proceeds thereof, no Default would exist;
and (vi) immediately after giving effect thereto, the Available Debt Amount
shall not be less than $1.00;
(D) the Lien created upon certain real and other property
relating to SJS Entertainment and/or The Album Network, Inc., pursuant to a
deed of trust securing only a $1,762,500 loan; and
(E) Liens on Margin Stock, if and to the extent that the
value of the Margin Stock of the Borrower and its Subsidiaries exceeds 25% of
the assets (as determined by any reasonable method) of the Borrower and its
Subsidiaries.
8.3 FUNDAMENTAL CHANGES
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, consolidate or merge into or with any other Person, or permit
any other Person to merge into or consolidate with it or any Restricted
Subsidiary, or sell, transfer, lease or otherwise dispose of (in one
transaction or in a series of transactions) all or substantially all of its
assets, or all or substantially all of any class of the Capital Stock of any
Restricted Subsidiary (in each case, whether now owned or hereafter acquired),
or liquidate or dissolve, or permit any Restricted Subsidiary to do any of the
foregoing, except that so long as immediately before and after giving effect
thereto, no Default shall exist:
(A) the Borrower may merge with any Subsidiary Guarantor and
any Subsidiary Guarantor may merge with the Borrower or any other Subsidiary
Guarantor, provided that in connection with any merger involving the Borrower,
the Borrower shall be the survivor thereof;
(B) the Borrower or any Restricted Subsidiary may merge with
any other Person, provided that
(i) in connection with any such merger involving the
Borrower, (1) the Borrower shall be the survivor thereof, and (2) such
merger shall be treated as an Acquisition for all purposes of Section
8.5(a);
(ii) in connection with any such merger involving a
Subsidiary Guarantor, (3) such Subsidiary Guarantor shall be the
survivor thereof, and (4) such merger shall be treated as an
Acquisition for all purposes of Section 8.5(a); and
(iii) with respect to any such merger involving a
Restricted Subsidiary in which, immediately after giving effect
thereto (5) the surviving Person is not a Restricted Subsidiary, such
merger shall be treated as a Disposition for all purposes of Sections
2.4(a) and 8.6(d), provided that if such surviving Person is a
Subsidiary, the Available Investment Amount shall not be less than
$1.00, or (6) the surviving Person is a
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Restricted Subsidiary, such merger shall be treated as an Acquisition
for all purposes of Section 8.5(a); and
(C) the Borrower and the Restricted Subsidiaries may
consummate any sale, assignment, lease, transfer or other disposition permitted
by Section 8.6.
8.4 INVESTMENTS, LOANS, ADVANCES AND GUARANTEES
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, purchase or otherwise acquire, hold or invest in any derivative
product, or any Capital Stock, evidences of indebtedness or other securities
(including any option, warrant or other right to acquire any of the foregoing)
of any Person, or make or permit to exist any investment or any other interest
in, any other Person, except:
(A) investments in Cash Equivalents;
(B) investments existing on the Effective Date as set forth
on Schedule 8.4;
(C) investments by the Borrower in the Capital Stock of or
debt issued by any Subsidiary Guarantor and investments by any Restricted
Subsidiary in the Capital Stock of or debt issued by the Borrower or any
Subsidiary Guarantor, provided that the proceeds of such investment in the
Borrower or a Subsidiary Guarantor shall be received by the Borrower or such
Subsidiary Guarantor;
(D)Acquisitions permitted by Section 8.5;
(E) investments by the Borrower and the Restricted
Subsidiaries in Unconsolidated Investments;
(F) investments by the Borrower or any Restricted Subsidiary
in the Capital Stock of or debt issued by any Subsidiary or any Person that
shall become a Subsidiary by virtue of such investment, provided that
immediately after giving effect to any such investment, the Available
Investment Amount shall not be less than $1.00; and
(G) Guarantees permitted by Section 8.1(c) and Hedging
Agreements permitted by Section 8.8.
8.5 ACQUISITIONS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, at any time, (A) make any purchase or other acquisition
(including by way of a dividend received or otherwise and whether in a single
transaction or in a series of related transactions and including each of the
Pending Acquisitions) of zzz. any assets of any other Person that, taken
together, constitute a business unit, aaaa. any Capital Stock of any other
Person if, immediately thereafter, such other Person would be a Subsidiary of
the Borrower, or bbbb. any assets of any other Person otherwise
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not in the ordinary course of business, (B) enter into any binding agreement to
perform any transaction described in clauses (i), (ii) or (iii) above which is
not contingent on obtaining the consent of the Required Lenders (each
transaction described in clauses (A) and (B) above being referred to as an
"ACQUISITION"), or (C) make any deposit in connection with any potential
Acquisition, except:
(A) Acquisitions by the Borrower or any Subsidiary Guarantor,
provided that
(I) no Default shall or would exist immediately
before or after giving effect to each such Acquisition and all of the
representations and warranties contained in Section 4 shall be true
and correct as if then made,
(II) with respect to each such Acquisition other
than a Pending Acquisition, the sum (the "Acquisition Consideration")
of (a) the cash consideration paid or agreed to be paid in connection
with such Acquisition plus (b) the fair market value of all non-cash
consideration paid or agreed to be paid in connection with such
Acquisition plus (c) an amount equal to the principal or stated amount
of all liabilities assumed or incurred by such Person or any Loan
Party in connection therewith shall not exceed $50,000,000,
(III) the Borrower shall have delivered to the
Administrative Agent and each Lender
(1) with respect to each Acquisition (other
than a Pending Acquisition), pursuant to which the Acquisition
Consideration exceeds $5,000,000, written notice thereof not less than
five Business Days prior to such Acquisition,
(2) a certificate of a Financial Officer
thereof, in all respects reasonably satisfactory to the Administrative
Agent and dated the date of such consummation, certifying that (a) no
Default has occurred and is continuing, (b) such Acquisition will be
consummated in accordance with the terms of the applicable
Acquisition documents with no amendment, supplement or other
modification of any term or provision thereof which adversely affects
the interests of any Credit Party under any Loan Documents, and (c)
in connection with the Contemporary Acquisition only, Contemporary
owns 100% of the Riverport Amphitheater in St. Louis, Missouri,
(3) a Compliance Certificate signed by a
Financial Officer of the Borrower, in all respects reasonably
satisfactory to the Administrative Agent, dated the date of the
consummation of such Acquisition and (i) stating that the Borrower is
in compliance with all covenants on a pro-forma basis after giving
effect to such Acquisition, and (ii) attaching a copy of a pro-forma
consolidated balance sheet of the Borrower utilized for purposes of
preparing such Compliance Certificate, which pro-forma consolidated
balance sheet presents the Borrower's good faith estimate of its
pro-forma consolidated financial condition at the date thereof, after
giving effect to such Acquisition, and
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(4) such other information, documents and
other items as the Administrative Agent shall have reasonably requested; and
(B) deposits in connection with potential Acquisitions,
provided that cccc. such Acquisition would otherwise be permitted under this
Section 8.5, but for the fulfillment by the Borrower of the conditions set
forth in Section 8.5(a), dddd. no Default shall or would exist immediately
before or after giving effect thereto, eeee. immediately after giving effect to
each deposit, the aggregate amount of all outstanding deposits under this
Section 8.5(b) does not exceed $15,000,000, and ffff. each such deposit
(together with earnings thereon) is to be applied in full to the purchase price
of the related Acquisition if such Acquisition is consummated, and gggg. such
deposit is invested in Cash Equivalents pending such application.
8.6 DISPOSITIONS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, sell, assign, lease, transfer or otherwise dispose of any
property or assets, except:
(A) (i) sales of inventory and Unconsolidated Investments in
the ordinary course of business, (ii) sales, assignments, transfers or other
dispositions of any property or assets that, in the reasonable opinion of the
Borrower or such Restricted Subsidiary, as the case may be, are obsolete or no
longer useful in the conduct of its business, and (iii) Cash Equivalents;
(B) sales of Margin Stock, if and to the extent that the
value of the Margin Stock of the Borrower and its Subsidiaries exceeds 25% of
the value of the assets (as determined by any reasonable method) of the
Borrower and the Subsidiaries;
(C) sales, assignments, leases, transfers or other
dispositions of any property or assets by the Borrower to any Subsidiary
Guarantor and by any Subsidiary Guarantor to the Borrower or any other
Subsidiary Guarantor;
(D) sales, assignments, leases, transfers or other
dispositions (each a "DISPOSITION") not otherwise described in this Section
8.6, provided that hhhh. immediately before and after giving effect to each
such Disposition, no Default shall or would exist, iiii. 75% of the total
consideration received or to be received therefor by the Borrower or the
Restricted Subsidiaries shall be payable in cash or Cash Equivalents on or
before the closing thereof and shall not be less than the fair market value
thereof as reasonably determined by the Managing Person of the Borrower or such
Restricted Subsidiary, jjjj. for the most recently completed twelve month
period, Operating Cash Flow for such period attributable to all Dispositions
(including such proposed Disposition) made pursuant to this Section 8.6(d)
during such period shall not exceed 10% of the Operating Cash Flow of the
Borrower and the Restricted Subsidiaries on a consolidated basis for such
period, kkkk. for the period from the Effective Date and ending on the date of
such proposed Disposition, Operating Cash Flow for such period attributable to
all Dispositions (including such proposed Disposition) made pursuant to this
Section 8.6(d) during such period shall not exceed 20% of the Operating Cash
Flow of the Borrower and the Restricted Subsidiaries on a consolidated basis
for such period, and llll. the Administrative Agent and the
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Lenders shall have received (1) written notice thereof not less than ten
Business Days prior to each such Disposition, and (2) a certificate in respect
thereof signed by a duly authorized officer of the Borrower identifying the
property or other asset subject to such Disposition, setting forth (1)
calculations showing compliance with clauses (iii) and (iv) of this Section and
certifying that the consideration received or to be received by the Borrower or
such Restricted Subsidiary for such property has been determined by the
Managing Person thereof to be not less than the fair market value of such
property and (2) the total consideration to be paid in respect of such
Disposition, together with estimates of items to be deducted therefrom in
arriving at the Net Cash Proceeds thereof; and
(E) other sales, assignments, leases, transfers or other
dispositions of any property or assets by the Borrower or any Restricted
Subsidiary, provided that immediately after giving effect thereto, the fair
market value of all consideration received by the Borrower and the Restricted
Subsidiaries in connection with all such transactions under this Section 8.6(e)
shall not exceed $5,000,000.
8.7 RESTRICTED PAYMENTS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, declare, pay or make any dividend or other distribution, direct
or indirect, on account of any Capital Stock issued by such Person now or
hereafter outstanding (other than a dividend payable solely in shares or other
units of such Capital Stock to the holders of such shares or other units) or
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition, direct or indirect, of any shares of any class of its Capital
Stock now or hereafter outstanding or, in connection with the Pace Acquisition,
the Pavilion Partners Acquisition or any Pending Acquisition, pay any
consideration therefor (other than in the form of common stock of the Borrower)
to the extent that the Borrower or any Restricted Subsidiary has the right or
option to deliver common stock of the Borrower in lieu of such consideration,
whether or not the happening of any condition or contingency has or has not
been fulfilled (collectively, "RESTRICTED PAYMENTS"), except:
(A) Restricted Payments made by the Borrower to any
Subsidiary Guarantor or made by any Restricted Subsidiary to the Borrower or
any Subsidiary Guarantor;
(B) the redemption of employee stock options in an amount not
to exceed $250,000; and
(C) other Restricted Payments made by the Borrower or any
Restricted Subsidiary in cash, provided that mmmm. no such Restricted Payment
shall be made prior to the delivery by the Borrower to the Administrative Agent
and the Lenders of the Compliance Certificate with respect to the fiscal year
ending December 31, 2000, and nnnn. immediately before and after giving effect
thereto, (1) no Default shall or would exist, (2) the Total Leverage Ratio
shall be less than 3.50:1.00, and (3) the aggregate amount of all such
Restricted Payments made pursuant to this Section 8.7(c) shall not exceed an
amount equal to 50% of Excess Cash Flow for each fiscal year ending on or after
December 31, 1998 and in respect of which the
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Borrower shall have delivered to the Administrative Agent and the Lenders a
Compliance Certificate pursuant to Section 7.1(c).
8.8 HEDGING AGREEMENTS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, enter into any Hedging Agreement, other than Hedging Agreements
entered into in the ordinary course of business to manage risks to which the
Borrower or such Restricted Subsidiary is exposed in the conduct of its
business or the management of its liabilities.
8.9 SALE AND LEASE-BACK TRANSACTIONS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, enter into an arrangement with any Person or group of Persons,
or permit any Restricted Subsidiary to enter into any arrangement, providing
for the renting or leasing by the Borrower or any Restricted Subsidiary of any
property or asset which has been or is to be sold or transferred by the
Borrower or any Subsidiary to any such Person.
8.10 LINES OF BUSINESS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, engage in any business other than the Line of Business.
8.11 TRANSACTIONS WITH AFFILIATES
Except as set forth in Schedule 8.11 and except for executive
compensation arrangements in the form of salary, bonuses or stock options
approved by the Borrower's Board of Directors in accordance with the by-laws of
the Borrower, the Borrower shall not, and shall not permit any Subsidiary to,
become a party to any transaction with an Affiliate, unless the Borrower's or
such Restricted Subsidiary's Managing Person shall have determined that the
terms and conditions relating thereto are as favorable to the Borrower or such
Restricted Subsidiary as those which would be obtainable at the time in a
comparable arms-length transaction with a Person other than an Affiliate.
8.12 AMENDMENTS, ETC. OF CERTAIN AGREEMENTS
(A) The Borrower shall not, and shall not permit any
Restricted Subsidiary to, enter into or agree to any amendment, modification or
waiver of any term or condition of any Subordinated Note or the Subordinated
Indenture.
(B) The Borrower shall not, and shall not permit any
Restricted Subsidiary to, enter into or agree to any amendment, modification or
waiver of any term or condition of any Venue lease, Contribution Document, Pace
Acquisition Document, Pavilion Partners Acquisition Document, Merger Document,
Pending Acquisition Document, or any document, instrument or other agreement
executed or delivered in connection with any other Acquisition by the Borrower
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or any Restricted Subsidiary, except oooo. with the consent of the
Administrative Agent, or pppp. in any way which would not reasonably be
expected to have either a Material Adverse effect or an adverse effect upon any
Credit Party under the Loan Documents.
8.13 USE OF PROCEEDS
The Borrower shall not use the proceeds of the Extensions of
Credit for any purpose other than 3. to pay the reasonable out-of-pocket fees
and expenses incurred by the Borrower in connection with the Transactions, 4.
to pay the Fees, 5. to finance acquisitions by the Borrower and the
Subsidiaries permitted hereby, and 6. for the Borrower's working capital and
general corporate purposes not inconsistent with the provisions hereof,
provided, however, that no part of such proceeds will be used, directly or
indirectly, for a purpose which violates any law, including the provisions of
Regulation G, T, U or X.
8.14 PREPAYMENTS OF INDEBTEDNESS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, prepay or obligate itself to prepay, in whole or in part, 7. any
Subordinated Note, or 8. any other long-term Indebtedness (other than
Indebtedness under the Loan Documents), or permit any of its Restricted
Subsidiary so to do, except that the Borrower or any of its Subsidiaries may
refinance any long-term Indebtedness (other than Indebtedness in respect of the
Subordinated Notes) with any other long-term Indebtedness, provided that the
terms and conditions thereof shall, in the reasonable determination of the
Administrative Agent, be no less favorable to the Lenders, the Borrower or such
Restricted Subsidiary as the long-term Indebtedness so being refinanced.
8.15 RESTRICTIVE AGREEMENTS
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon 9. the ability of the Borrower or any Restricted Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets,
10. the ability of any Restricted Subsidiary to pay dividends or other
distributions to the Borrower or any other Restricted Subsidiary, 11. the
ability of any Restricted Subsidiary to make loans to, or advances on behalf
of, the Borrower or any other Restricted Subsidiary, or 12. the ability of any
Restricted Subsidiary to repay loans made to it by, or advances made on its
behalf by, the Borrower or any other Restricted Subsidiary, provided that a.
the foregoing shall not apply to (1) restrictions and conditions imposed by
applicable law or by the Loan Documents, (2) restrictions and conditions
existing on the Effective Date identified on Schedule 8.15 (but shall apply to
any extension or renewal of, or any amendment or modification expanding the
scope of, any such restriction or condition), or (3) customary restrictions and
conditions contained in agreements relating to the sale of a Subsidiary or the
assets thereof to the extent permitted by this Agreement, in each case pending
such sale, provided such restrictions and conditions apply only to such
Subsidiary or such assets, and b. clause (a) above shall not apply to (x)
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such
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restrictions or conditions apply only to the property or assets securing such
Indebtedness and (y) customary provisions in leases restricting the assignment
thereof.
8.16 FINANCIAL COVENANTS
The Borrower shall not permit:
(A) TOTAL LEVERAGE RATIO. The Total Leverage Ratio to at any
time exceed the ratio set forth below with respect to the applicable period set
forth below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Effective Date through
September 29, 1998 6.75:1.00
September 30, 1998 through
December 30, 1998 6.50:1.00
December 31, 1998 through
June 29, 1999 6.25:1.00
June 30, 1999 through
December 30, 1999 5.75:1.00
December 31, 1999 through
December 30, 2000 5.25:1.00
December 31, 2000 through
December 30, 2001 4.50:1.00
December 31, 2001
and thereafter 3.75:1.00
</TABLE>
(B) SENIOR LEVERAGE RATIO. The Senior Leverage Ratio to at
any time exceed the ratio set forth below with respect to the applicable period
set forth below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Effective Date through
September 29, 1998 3.50:1.00
September 30, 1998 through
December 30, 1999 3.25:1.00
December 31, 1999 through
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December 30, 2000 3.00:1.00
December 31, 2000
and thereafter 2.50:1.00
</TABLE>
(C) PRO FORMA INTEREST EXPENSE RATIO. The Pro Forma Interest
Expense Ratio, at any fiscal quarter end, to be less than the ratio set forth
below with respect to the applicable period set forth below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Effective Date through
December 31, 1998 1.50:1.00
January 1, 1999
and thereafter 2.00:1.00
</TABLE>
(D) PRO FORMA DEBT SERVICE RATIO. The Pro Forma Debt Service
Ratio, at any fiscal quarter end, to be less than the ratio set forth below
with respect to the applicable period set forth below:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Effective Date through
December 31, 1998 1.25:1.00
January 1, 1999
and thereafter 1.50:1.00
</TABLE>
(E) FIXED CHARGES RATIO. The Fixed Charges Ratio, at any
fiscal quarter end, to be less than 1.05:1.00.
8.17 RESTRICTED AND UNRESTRICTED SUBSIDIARIES
(A) The Borrower shall not designate any Subsidiary thereof
as an 'Unrestricted Subsidiary', unless the following conditions shall be
satisfied (at which time any such Subsidiary so designated shall become an
Unrestricted Subsidiary):
(i) such Subsidiary has no Indebtedness other than
Non-Recourse Debt,
(ii) such Subsidiary is not party to any agreement,
contact, arrangement or understanding with the Borrower or any
Restricted Subsidiary unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the
Borrower or such Restricted Subsidiary than those that might be
obtained at the time from Persons who are not Affiliates of the
Borrower,
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(iii) such Subsidiary is a Person with respect to
which neither the Borrower nor any of its Restricted Subsidiary has
any direct or indirect obligations (1) to subscribe for additional
Capital Stock or (2) to maintain or preserve such Person's financial
condition or to cause such Person to achieve any specified levels of
operating results,
(iv) such Subsidiary has not issued any Guarantee
for any Indebtedness of the Borrower or any Restricted Subsidiary,
(v) such Subsidiary has at least one director on its
board of directors that is not a director or executive officer of the
Borrower or any Restricted Subsidiary and has at least one executive
officer that is not a director or executive officer of the Borrower or
any Restricted Subsidiary,
(vi) immediately before and after giving effect
thereto no Default shall or would exist,
(vii) no Default would have existed as of the end of
the immediately preceding fiscal quarter had such change been
effected prior thereto,
(viii) such Subsidiary shall have entered into a tax
sharing agreement with the Borrower and the Restricted Subsidiaries
pursuant to which the parties thereto agree that such Subsidiary shall
be treated as if it were not part of the Borrower's consolidated group
for tax purposes and shall reimburse the Borrower and the Restricted
Subsidiaries for all taxes paid on account of such Subsidiary,
(ix) such designation shall be treated as a
disposition subject to Section 8.6, and
(x) the Borrower shall notify the Credit Parties
thereof in writing, which notice (1) shall contain a list, as of the
date of such notice, of all Restricted Subsidiaries and all
Unrestricted Subsidiaries, and (2) shall constitute a certification by
the Borrower that all of the items set forth in clauses (i) through
(viii) of this Section 8.17(a) are true and correct and have been
satisfied.
(B) The Borrower shall not, with respect to any Unrestricted
Subsidiary, designate such Subsidiary as a 'Restricted Subsidiary,' unless the
following conditions shall be satisfied (at which time any such Subsidiary
shall become a Restricted Subsidiary):
(i) such Subsidiary is a Domestic Subsidiary,
(ii) immediately before and after giving effect
thereto, no Default shall or would exist,
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(iii) no Default would have existed as of the end of
the immediately preceding fiscal quarter had such change been
effected prior thereto,
(iv) the liabilities of such Subsidiary existing at
the time it becomes a Restricted Subsidiary could be created, assumed
or incurred within the applicable limitations hereof,
(v) the Borrower shall at all times own, directly or
indirectly, 100% of the issued and outstanding capital stock of such
Subsidiary (other than an Excluded Subsidiary), until such time, if
any, that such Subsidiary ceases to be a Restricted Subsidiary, in
accordance with the terms and conditions hereof,
(vi) such designation shall be treated as an
acquisition subject to Section 8.5, and
(vii) the Borrower shall notify the Credit Parties
thereof in writing, which notice (1) shall contain a list, as of the
date of such notice, of all Restricted Subsidiaries and all
Unrestricted Subsidiaries, and (2) shall constitute a certification by
the Borrower that all of the terms and conditions set forth in clauses
(i) through (vi) of this Section 8.17(b) are true and correct and have
been satisfied.
8.18 SUBSIDIARIES
(A) The Borrower shall at all times own, directly or through
one or more Restricted Subsidiaries, 100% of the outstanding Capital Stock of
each Restricted Subsidiary (other than the Excluded Subsidiaries).
(B) The Borrower shall not permit any Excluded Subsidiary to
have any Subsidiary.
ARTICLE 9. DEFAULTS
9.1 EVENTS OF DEFAULT
The following shall each constitute an "EVENT OF DEFAULT"
hereunder:
(A) the failure of the Borrower to make (i) any
payment of principal on any Loan, or in respect of any Reimbursement
Obligation, when due and payable, or (ii) any deposit into the Cash
Collateral Account when required hereby; or
(B) the failure of the Borrower to make any payment
of interest, Fees, expenses or other amounts payable under any Loan
Document or otherwise to the Administrative Agent with respect to the
loan facilities established hereunder within three Business Days of
the date when due and payable; or
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<PAGE>
(C) the failure of the Borrower to observe or
perform any covenant or agreement contained in Sections 7.10, 7.11 or
Article 8; or
(D) the failure of any Loan Party to observe or
perform any other term, covenant, or agreement contained in any Loan
Document to which it is a party and such failure shall have continued
unremedied for a period of 30 days after such Loan Party shall have
obtained knowledge thereof; or
(E) any representation or warranty made by any Loan
Party (or by an officer thereof on its behalf) 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 thereto, shall
prove to have been incorrect or misleading (whether because of
misstatement or omission) in any material respect when made; or
(F) (i) the occurrence of an Event of Default under,
and as such term is defined in, the Subordinated Indenture, or (ii)
the failure of any Loan Party to make any payment (whether of
principal or interest and regardless of amount) in respect of Material
Liabilities when due or within any grace period for the payment
thereof; or
(G) any event or condition occurs that results in
any Material Liability becoming or being declared to be due and
payable prior to the scheduled maturity thereof, or that enables or
permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Liability or any trustee
or agent on its or their behalf to cause any Material Liability to be
due and payable, or to require the prepayment, repurchase, redemption
or defeasance thereof, in each case prior to the scheduled maturity
thereof (in each case after giving effect to any applicable grace
period); or
(H) any Loan Party shall c. suspend or discontinue
its business (except to the extent permitted by Section 7.3), d. make
an assignment for the benefit of creditors, e. generally not be paying
its debts as such debts become due, f. admit in writing its inability
to pay its debts as they become due, g. file a voluntary petition in
bankruptcy, h. become insolvent (however such insolvency shall be
evidenced), i. 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, j. petition or
apply to any tribunal for any receiver, custodian or any trustee for
any substantial part of its property, k. be the subject of any such
proceeding filed against it which remains undismissed for a period of
60 days, l. file any answer admitting or not contesting the material
allegations of any such petition filed against it or any order,
judgment or decree approving such petition in any such proceeding, m.
seek, approve, consent to, or acquiesce in any such proceeding, or in
the appointment of any trustee, receiver, sequestrator, 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, or n. take any formal action for the purpose of
effecting any of the foregoing or looking
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to the liquidation or dissolution of the Borrower, such Subsidiary or
such other Loan Party; or
(I) an (i) order or decree is entered by a court
having jurisdiction (1) adjudging any Loan Party bankrupt or
insolvent, (2) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of
or in respect of any Loan Party under the bankruptcy or insolvency
laws of any jurisdiction, (3) appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official)
of any Loan Party or of any substantial part of the property of any
thereof, or (4) ordering the winding up or liquidation of the affairs
of any Loan Party, and any such decree or order continues unstayed and
in effect for a period of 60 days or (ii) order for relief is entered
under the bankruptcy or insolvency laws of any jurisdiction or any
other; or
(J) judgments or decrees against any Loan Party
aggregating in excess of $1,000,000, shall remain unpaid, unstayed on
appeal, undischarged, unbonded or undismissed for a period of 60
consecutive days; or
(K) any of this Agreement, any Note, the Security
Agreement or any Mortgage shall cease, for any reason, to be in full
force and effect, or any Loan Party shall so assert in writing or
shall disavow any of its obligations under any of this Agreement, any
Note, the Security Agreement or any Mortgage; or
(L) any Lien purported to be created under any
Security Document shall cease to be, or shall be asserted by any Loan
Party not to be, a valid and perfected Lien on, and security interest
it, any Collateral, with the priority required by the applicable
Security Document, except as a result of a Disposition thereof to the
extent permitted under the Loan Documents; or
(M) an ERISA Event shall have occurred that, in the
opinion of the Required Lenders, when taken together with all other
ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an
aggregate amount exceeding o. $500,000, in any year or p. $500,000,
for all periods; or
(N) the occurrence of a Change of Control; or
(O) any court of competent jurisdiction shall
determine that Broadcasting or any Subsidiary thereof was rendered
Insolvent as a result of or in connection with the Spin-off or any
other transaction related thereto or occurring substantially
contemporaneous therewith.
9.2 CONTRACT REMEDIES
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(A) Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof,
(i) in the case of an Event of Default
specified in Section 9.1(h) or 9.1(i), without declaration or notice
to the Borrower, all of the Commitments shall immediately and
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
(ii) in all other cases, upon the direction
of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare all of the Commitments to be terminated
forthwith, whereupon such Commitments shall immediately terminate,
and/or 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.
In the event that the Loans, all accrued and unpaid interest thereon and all
other amounts owing under the Loan Documents shall have been declared due and
payable pursuant to the provisions of this Section, the Administrative Agent
(i) upon the direction of the Required Lenders, shall proceed to enforce the
rights of the holders of the Notes and the Reimbursement Obligations by suit in
equity, action at law and/or other appropriate proceedings, whether for payment
or the specific performance of any covenant or agreement contained in the Loan
Documents and (ii) may exercise any and all rights and remedies provided to the
Administrative Agent by the Loan Documents. Except as otherwise expressly
provided in the Loan Documents, the Borrower expressly waives, presentment,
demand, protest and all other notices of any kind in connection with the Loan
Documents are hereby expressly waived. The Borrower hereby further 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 any Loan Document.
(B) In the event that the Commitments shall have terminated
or the Loans, all accrued and unpaid interest thereon and all other amounts
owing under the Loan Documents shall have become due and payable pursuant to
the provisions of this Section 9, any funds received by any Credit Party from
or on behalf of the Borrower (except funds received by any Lender as a result
of a purchase from any other Lender pursuant to Section 2.7(c)) shall be
remitted to, and applied by, the Administrative Agent in the following manner
and order:
(i) first, to reimburse the Administrative Agent,
the Issuer and the Lenders, in that order, for any expenses due from
the Borrower pursuant to the provisions of Section 11.4,
(ii) second, to the payment of the Fees, pro rata
according to the Fees due and owing to the Credit Parties,
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(iii) third, to the payment of any other fees,
expenses or other amounts (other than the principal of and interest on
the Loans) payable by the Loan Parties to the Credit Parties under the
Loan Documents,
(iv) fourth, to the payment, pro rata according to
the Total Percentage of each Lender, of interest due on the Loans and
the Reimbursement Obligations,
(v) fifth, to the payment to the Lenders of, and on
a pro rata basis in accordance with, the unpaid principal amount of
the Loans and the Reimbursement Obligations and each amount then due
and payable under each Hedging Agreement between the Borrower and a
Lender, and
(vi) sixth, any remaining funds shall be paid to the
Borrower or as a court of competent jurisdiction shall direct.
ARTICLE 10. THE ADMINISTRATIVE AGENT
10.1 APPOINTMENT
Each of the Lenders hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
10.2 INDIVIDUAL CAPACITY
The Person serving as the Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not the Administrative
Agent, and such Person and its Affiliates may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower, any
Subsidiary, or any Affiliate of the Borrower as if it were not the
Administrative Agent hereunder.
10.3 EXCULPATORY PROVISIONS
The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any
duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary under
the circumstances as provided in Section 11.1), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Borrower or any of its Subsidiaries that
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is communicated to or obtained by the bank serving as Administrative Agent or
any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
11.1) or in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default
unless and until written notice thereof is given to the Administrative Agent by
the Borrower or another Credit Party and the Administrative Agent shall not be
responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement or any other agreements, instrument or document, or (v) the
satisfaction of any condition set forth in Sections 5 or 6 or elsewhere herein,
other than to confirm receipt of items expressly required to be delivered to
the Administrative Agent.
10.4 RELIANCE BY ADMINISTRATIVE AGENT
The Administrative Agent shall be entitled to rely upon, and
shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing believed
by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel to the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.
10.5 RELIANCE BY ADMINISTRATIVE AGENT
The Administrative Agent may perform any and all its duties
and exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent, provided that no such delegation shall
serve as a release of the Administrative Agent or waiver by the Borrower of any
rights hereunder. The Administrative Agent and any such sub-agent may perform
any and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of this Article 10 shall
apply to any such sub-agent and to the Related Parties of the Administrative
Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.
10.6 RESIGNATION; SUCCESSOR ADMINISTRATIVE AGENT
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this Section 10.6, the Administrative Agent
may resign at any time by notifying the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the
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right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative
Agent gives notice of its resignation, then the retiring Administrative Agent
may, on behalf of the Lenders, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. The fees payable by the Borrower to
a successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the Administrative Agent's resignation hereunder, the provisions of this
Article and Section 11.4 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or permitted to be taken by any of them
while it was acting as Administrative Agent.
10.7 NON-RELIANCE ON OTHER CREDIT PARTIES
Each Credit Party acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Credit Party and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Credit
Party also acknowledges that it will, independently and without reliance upon
the Administrative Agent or any other Credit Party and based on such documents
and information as it shall from time to time deem appropriate, continue to
make its own decisions in taking or not taking action under or based upon this
Agreement, any related agreement or any document furnished hereunder or
thereunder.
ARTICLE 11. OTHER PROVISIONS
11.1 AMENDMENTS AND WAIVERS
(A) No failure to exercise and no delay in exercising, on the
part of any Credit Party, 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. No waiver of any provision of
any Loan Document or consent to any departure by any Loan Party therefrom shall
in any event be effective unless the same shall be permitted by this Section,
and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality
of the foregoing, the making of a Loan shall not be construed as a waiver of
any Default, regardless of whether any Credit Party may have had notice or
knowledge of such Default at the time.
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(B) Notwithstanding anything to the contrary contained in any
Loan Document, with the written consent of the Required Lenders, the
Administrative Agent and the appropriate parties to the Loan Documents (other
than the other Credit Parties) may, from time to time, enter into written
amendments, supplements or modifications thereof and, with the consent of the
Required Lenders, the Administrative Agent on behalf of the other Credit
Parties, may execute and deliver to any such parties a written 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 and its consequences;
provided, however, that no such amendment, supplement, modification, waiver or
consent shall:
(I) increase the Revolving Commitment of any
Lender, without such Lender's consent;
(II) unless agreed to by each Credit Party affected
thereby, (1) reduce the principal amount of any Extension of Credit,
or reduce the rate of interest thereon, or reduce any fees or other
obligations payable under the Loan Documents, (2) extend any date
(including the Revolving Loan Maturity Date or the Term Loan Maturity
Date) fixed for the payment of any principal of or interest on any
Extension of Credit, any fees, or any other obligation payable under
the Loan Documents, (C) extend the expiration date of any Letter of
Credit beyond the Revolving Credit Maturity Date, or (D) extend the
time required for, or reduce the amount of, any scheduled mandatory
reduction of the Aggregate Revolving Commitment pursuant to Section
2.3(b);
(III) unless agreed to by all of the Lenders, (3)
increase the Aggregate Revolving Commitment (other than in accordance
with Section 2.3(f)), (4) change the definition of "Required Lenders"
or any other provision hereof specifying the number or percentage of
Lenders required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, (5) change
Section 2.7 in a manner that would alter the pro rata sharing of
payments required thereby, (6) consent to any assignment or
delegation by any Loan Party of any of its rights or obligations under
any Loan Document, (7) release any Subsidiary Guarantor from all or
substantially all its obligations hereunder, except as permitted
under this Agreement, or (8) release all or substantially all of the
Collateral from the Liens of the Security Documents,
(IV) unless agreed to by the Administrative Agent or
the Issuer, amend, modify or otherwise affect the rights or duties of
the Administrative Agent, the Administrative Agent or the Issuer,
respectively, under the Loan Documents.
Any such amendment, supplement, modification, waiver or
consent shall apply equally to each Credit Party and shall be binding upon each
Credit Party and each Loan Party to the applicable Loan Document, and upon all
future holders of the Notes and the Reimbursement Obligations. In the case of
any waiver, the Credit Parties and each Loan Party to the applicable Loan
Document shall be restored to their former position and rights hereunder and
under the outstanding Notes and other Loan Documents to the extent provided for
in such
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waiver, and any Default waived shall not extend to any subsequent or other
Default, or impair any right consequent thereon.
11.2 NOTICES
All notices, requests and demands to or upon the respective
parties to the Loan Documents to be effective shall be in writing and, unless
otherwise expressly provided therein, shall be deemed to have been duly given
or made when delivered by hand, one Business Day after having been sent by
overnight courier service, or when deposited in the mail, first-class postage
prepaid, or, in the case of notice by facsimile, when sent to the last address
(including telephone and facsimile numbers) for such party specified by such
party in a written notice delivered to the Administrative Agent and the
Borrower or, if no such written notice was so delivered, as follows:
(A) in the case of any Loan Party, to such Loan
Party c/o SFX Entertainment, Inc., 650 Madison Avenue, New York, New
York 10022; Attention: Howard J. Tytel, Esq., Telephone: (212)
407-9108; Facsimile (212) 753-3188;
(B) in the case of the Administrative Agent, to The
Bank of New York, One Wall Street, Agency Function Administration,
18th Floor, New York, New York 10286; Attention: Carolyn Surles,
Telephone: (212) 635-4695, Facsimile (212) 635-6365 or 6366 or 6367;
with a copy to: The Bank of New York, One Wall Street, New York, New
York 10286, Attention: Edward F. Ryan, Jr., Senior Vice President,
Telephone: (212) 635-8608, Facsimile (212) 635-8593; and
(C) in the case of a Lender, at its address for
notices set forth on Schedule 11.2;
provided, however, that any notice, request or demand by the Borrower pursuant
to Sections 2.2, 2.3, 2.6 or 3.3 shall not be effective until received. Any
party to a Loan Document may rely on signatures of the parties thereto which
are transmitted by facsimile or other electronic means as fully as if
originally signed.
11.3 SURVIVAL
All covenants, agreements, representations and warranties
made by the Borrower herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the making of any Extensions of
Credit, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder.
11.4 EXPENSES; INDEMNITY
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(A) The Borrower agrees, on demand therefor and whether any
Extension of Credit is made q. to pay or reimburse the Administrative Agent and
its Related Parties for all reasonable out-of-pocket expenses incurred thereby,
including the reasonable fees, charges and disbursements of counsel, in
connection with the development, preparation, execution, syndication and
administration of, the Loan Documents (including any amendment, supplement or
other modification thereto (whether or not executed or effective)), any
documents prepared in connection therewith and the consummation of the
transactions contemplated thereby and r. to pay or reimburse each Credit Party
for all of its costs and expenses, including reasonable fees and disbursements
of counsel, incurred in connection with (1) the protection or enforcement of
its rights under the Loan Documents, including any related collection
proceedings and any negotiation, restructuring or "work-out", and (2) the
enforcement of this Section.
(B) The Borrower shall, on demand therefor, indemnify each
Credit Party and each of their respective Related Parties (each, an
"INDEMNIFIED PERSON") against, and hold each Indemnified Person harmless from,
any and all losses, claims, damages, penalties, liabilities and related
expenses, including the fees, charges and disbursements of any counsel,
incurred by or asserted against any Indemnified Person in connection with or in
any way arising out of any Loan Document, any other Transaction Document or any
Transaction, including as a result of s. any breach by the Borrower of the
terms of any Loan Document, the use of proceeds of any Extension of Credit or
any action or failure to act on the part of the Borrower, t. the consummation
or proposed consummation of the Transactions or any other transactions
contemplated hereby, u. any Extension of Credit or the use of the proceeds
therefrom, v. any actual or alleged presence or release of Hazardous Substance
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any liability in respect of any Environmental Law related in
any way to the Borrower or any of its Subsidiaries, w. any action or failure to
act on the part of the Borrower or x. any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnified Person is a party thereto (collectively, the "INDEMNIFIED
LIABILITIES"), provided that such indemnity shall not, as to any Indemnified
Person, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or wilful
misconduct of such Indemnified Person.
(C) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent or any of its Affiliates
under subsections (a) or (b) of this Section, each Lender severally agrees, on
demand therefor, to pay to the Administrative Agent such Lender's Total
Percentage of such amount (determined as of the time that the applicable
unreimbursed expense or Indemnified Liability is sought).
(D) To the extent permitted by applicable law, the Borrower
shall not assert, and hereby waives, any claim against any Indemnified Person
for any special, indirect, consequential or punitive damages (whether accrued
and whether known or suspected to exist in its favor) arising out of, in
connection with, or as a result of, the Loan Documents, the transactions
contemplated thereby or any Extension of Credit or the use of the proceeds
thereof.
11.5 SUCCESSORS AND ASSIGNS
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(A) The Loan Documents shall be binding upon and inure to the
benefit of each of the parties thereto, and their respective successors and
assigns, except that no Loan Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each
Credit Party (and any such attempted assignment or transfer without such
consent shall be null and void).
(B) Each Lender may assign all or a portion of its rights and
obligations under the Loan Documents to y. any Subsidiary or Affiliate of such
Lender, z. any other Lender, or aa. with the consent of the Borrower, the
Administrative Agent, the Issuer (which consents shall not be unreasonably
withheld or delayed and, in the case of the Borrower's consent, shall not be
required during the continuance of an Event of Default), any other institution,
provided that:
(A) each such assignment shall be of a constant, and
not a varying, percentage of the assignor Lender's rights and
obligations under the Loan Documents;
(B) except in the case of an assignment to a Lender
or an Affiliate of a Lender, (1) the amount of the Revolving
Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance Agreement
with respect to such assignment is delivered to the Administrative
Agent) shall not be less than the lesser of (x) $5,000,000, or (y) the
entire remaining amount of the assigning Lender's Revolving
Commitment, and (2) the amount of the Term Loan of the assigning
Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance Agreement with respect to such assignment is
delivered to the Administrative Agent) shall not be less than the
lesser of (x) $3,000,000, or (y) the unpaid principal amount of the
assigning Lender's Term Loan; and
(C) the assignor and such assignee shall deliver to
the Administrative Agent three copies of an Assignment and Acceptance
Agreement executed by each of them, along with an assignment fee in
the sum of $3,500 for the account of the Administrative Agent and, if
the assignee is not then a Lender, such assignee shall designate its
address for notices and shall deliver to the Administrative Agent and,
if such assignee is a Foreign Credit Party, the documents required by
Section 3.7(c).
Upon receipt of such number of executed copies of each such Assignment and
Acceptance Agreement together with the assignment fee therefor and the
consents required to such assignment, if required, the Administrative Agent
shall record the same and execute not less than two copies of such Assignment
and Acceptance Agreement in the appropriate place, deliver one such copy to the
assignor and one such copy to the assignee, and deliver one photocopy thereof,
as executed, to the Borrower. From and after the Assignment Effective Date
specified in, and as defined in, such Assignment and Acceptance Agreement, the
assignee thereunder shall, unless already a Lender, become a party hereto and
shall, for all purposes of the Loan Documents, be deemed a "Lender" and, to the
extent provided in such Assignment and Acceptance Agreement, the assignor
Lender thereunder shall be released from its obligations under this Agreement
and the other Loan Documents. The Borrower agrees that, if requested, in
connection with each such assignment, it shall at its own cost and expense
execute and deliver to the Administrative Agent
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or such assignee a Note, each payable to the order of such assignee and dated
the Effective Date. The Administrative Agent shall be entitled to rely upon the
representations and warranties made by the assignee under each Assignment and
Acceptance Agreement.
(C) Each Lender may grant participations in all or any part
of its rights and obligations under the Loan Documents to (i) any Subsidiary or
Affiliate of such Lender, (ii) any other Lender, or (iii) any other institution
reasonably acceptable to the Administrative Agent, provided that (A) such
Lender's obligations under this Agreement and the other Loan Documents shall
remain unchanged, (B) such Lender shall remain solely responsible to the other
parties to this Agreement and the other Loan Documents for the performance of
such obligations, (C) the Borrower and the Credit Parties shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents, (D) the granting of such
participation does not require that any additional loss, cost or expense be
borne by the Borrower at any time, and (E) the voting rights of any holder of
any participation shall be limited to decisions that in accordance with Section
11.1 require the consent of all of the Lenders.
(D) Subject to subsection (e) below, any Lender may at any
time assign all or any portion of its rights under any Loan Document to any
Federal Reserve Bank.
(E) Except to the extent of any assignment pursuant to
subsection (b) above, no Lender shall be relieved of any of its obligations
under the Loan Documents as a result of any assignment of or granting of
participations in, all or any part of its rights and obligations under the Loan
Documents.
11.6 COUNTERPARTS; INTEGRATION
Each Loan Document (other than the Notes) may be executed by
one or more of the parties thereto on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same document. 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. Delivery of an executed counterpart of a signature page of
any Loan Document by facsimile shall be effective as delivery of a manually
executed counterpart of such Loan Document. The Loan Documents and any separate
letter agreements between the Borrower and a Credit Party with respect to fees
embody the entire agreement and understanding among the Loan Parties and the
Credit Parties with respect to the subject matter thereof and supersede all
prior agreements and understandings among the Loan Parties and the Credit
Parties with respect to the subject matter thereof.
11.7 SEVERABILITY
Every provision of the Loan Documents is intended to be
severable, and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions 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.
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11.8 GOVERNING LAW
THE LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.9 JURISDICTION; SERVICE OF PROCESS
Each party to a Loan Document hereby irrevocably submits to
the nonexclusive 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. Each party to a Loan Document hereby
irrevocably waives, to the fullest extent permitted or not prohibited 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. Each Loan Party 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 and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that a Credit
Party may otherwise have to bring any action or proceeding relating to Loan
Documents against the Borrower or its properties in the courts of any
jurisdiction. Each party to a Loan Document hereby irrevocably consents to
service of process in the manner provided for notices in Section 11.2. Nothing
in this Agreement will affect the right of any party to a Loan Document to
serve process in any other manner permitted by law.
11.10 WAIVER OF TRIAL BY JURY
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
11.11 TREATMENT OF CERTAIN INFORMATION
Each Credit Party agrees, on behalf of itself and its Related
Parties, to use reasonable precautions to keep confidential, in accordance with
their customary procedures for handling confidential information of the same
nature, all non-public information supplied by the Borrower or any of its
Subsidiaries pursuant to this Agreement which 13. is identified by such
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Person as being confidential at the time the same is delivered to such Credit
Party, or 14. constitutes any financial statement, financial projections or
forecasts, budget, compliance certificate, audit report, management letter or
accountants' certification delivered hereunder ("Information"), provided,
however, that nothing herein shall limit the disclosure of any such Information
a. to such of their respective Related Parties as need to know such
Information; b. to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, or requested by any applicable
regulatory authority, c. on a confidential basis, to prospective lenders or
their counsel, d. to auditors or accountants, and any analogous counterpart
thereof, e. to any other Credit Party, f. in connection with any litigation to
which any one or more of the Credit Parties is a party, g. to the extent such
Information (1) becomes publicly available other than as a result of a breach
of this agreement, (2) becomes available to any of the Credit Parties on a
non-confidential basis from a source other than the Borrower or any of its
Subsidiaries, or (3) was available to the Credit Parties on a non-confidential
basis prior to its disclosure to any of them by the Borrower or any of its
Subsidiaries; and h. to the extent the Borrower shall have consented to such
disclosure in writing.
ARTICLE 12. SUBSIDIARY GUARANTEE
The Subsidiary Guarantors agree that, so long as any Commitment is in
effect and until the principal of, and interest on, each Loan, all
Reimbursement Obligations, all Fees and all other amounts payable under the
Loan Documents shall have been paid in full:
12.1 GUARANTEE
(A) Subject to Section 12.1(b), each Subsidiary 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. The agreements of each Subsidiary
Guarantor under this Article 12 constitute a guarantee of payment, and no
Credit Party shall have any obligation to enforce any Loan Document 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 Subsidiary 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 any Credit Party is prevented by law from collecting or
otherwise hindered from collecting or otherwise enforcing any Borrower
Obligation in accordance with its terms, such Credit Party shall be entitled to
receive hereunder from the Subsidiary Guarantors after demand therefor, the
sums which would have been otherwise due had such collection or enforcement not
been prevented or hindered.
(B) Notwithstanding anything to the contrary contained
herein, the maximum aggregate amount of the obligations of each Subsidiary
Guarantor hereunder shall not, as of any date of determination, exceed the
lesser of (i) the greatest amount that is valid and enforceable against such
Subsidiary Guarantor under principles of New York State contract law, and (ii)
the greatest amount that would not render such Subsidiary Guarantor's liability
hereunder subject to
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<PAGE>
avoidance as a fraudulent transfer or 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 Subsidiary Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws (specifically
excluding, however, any liability (A) in respect of intercompany indebtedness
to the Borrower or any affiliate or subsidiary of the Borrower, to the extent
that such intercompany indebtedness would be discharged in an amount equal to
the amount paid by such Subsidiary Guarantor hereunder, and (B) under any
guarantee of (1) senior unsecured indebtedness, or (2) indebtedness
subordinated in right of payment to any Borrower Obligation, in either case
which contains a limitation as to maximum liability similar to that set forth
in this Section 12.1(b) and pursuant to which the liability of such Subsidiary
Guarantor hereunder is included in the liabilities taken into account in
determining such maximum liability) 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 Subsidiary Guarantor pursuant to applicable law or any
agreement providing for an equitable allocation among such Subsidiary Guarantor
and other affiliates or subsidiaries of the Borrower of obligations arising
under guarantees by such parties.
(C) Each Subsidiary Guarantor agrees that the Guarantor
Obligations may at any time and from time to time exceed the maximum aggregate
amount of the obligations of such Subsidiary Guarantor hereunder without
impairing this Agreement or affecting the rights and remedies of any Credit
Party hereunder.
12.2 ABSOLUTE OBLIGATION
Subject to Section 12.5(c), no Subsidiary Guarantor shall be
released from liability hereunder unless and until the Commitments have
terminated and either (i) the Borrower shall have paid in full the outstanding
principal balance of the Loans, together with all accrued and unpaid interest
thereon, and all other amounts then due and owing under the Loan Documents, or
(ii) the Guarantor Obligations of such Subsidiary Guarantor shall have been
paid in full in cash. Each Subsidiary Guarantor acknowledges and agrees that
(a) no Credit Party has made any representation or warranty to such Subsidiary
Guarantor with respect to the Borrower, any of its Subsidiaries, any Loan
Document, or any agreement, instrument or document executed or delivered in
connection therewith, or any other matter whatsoever, and (b) such Subsidiary
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, 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 the
release, exchange, substitution or loss or impairment of any such security
interest or collateral security, (D) any failure, delay, neglect or omission by
any Credit Party to realize upon or protect any direct or indirect collateral
security, indebtedness, liability or obligation, any Loan Document, 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 set-off by any Credit Party, (F) the existence, validity or
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enforceability of any other guarantee 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 any Credit Party
in connection with the administration of any Loan Document 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, 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,
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 any Credit Party, (N) any amendment or
modification of, or supplement to, any Loan Document, 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 Subsidiary Guarantor in respect
of any of the Guarantor Obligations (other than by the performance in full
thereof).
12.3 REPAYMENT IN BANKRUPTCY, ETC.
If, at any time or times subsequent to the payment of all or
any part of the Borrower Obligations or the Guarantor Obligations, any Credit
Party shall be required to repay any amounts previously paid by or on behalf of
the Borrower or any Subsidiary Guarantor in reduction thereof by virtue of an
order of any court having jurisdiction in the premises, including as a result
of an adjudication that such amounts constituted preferential payments or
fraudulent conveyances, the Subsidiary 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 such Credit Party to the date of payment to the
Administrative Agent at the applicable after-maturity rate set forth in the
Credit Agreement.
12.4 ADDITIONAL SUBSIDIARY GUARANTORS
Upon the execution and delivery to the Administrative Agent
of a Guarantee Supplement by any Person, appropriately acknowledged, such
Person shall be a Subsidiary Guarantor.
12.5 MISCELLANEOUS
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<PAGE>
(A) Each Subsidiary Guarantor agrees that any statement of
account with respect to the Borrower Obligations from any Credit Party which
binds the Borrower shall also be binding upon such Subsidiary Guarantor, and
that copies of said statements of account maintained in the regular course of
such Credit Party's business may be used in evidence against such Subsidiary
Guarantor in order to establish its Guarantor Obligations.
(B) Subject to the limitations set forth in Section 12.1(b),
the Guarantor Obligations shall be joint and several.
(C) Notwithstanding anything to the contrary contained
herein, on and as of the date of any merger, consolidation, Acquisition or
Disposition permitted by Section 8.3, 8.5 or 8.6, as the case may be, of the
Credit Agreement, which shall result in any Subsidiary Guarantor ceasing to be
a Subsidiary, such Subsidiary Guarantor shall, without the consent of any
Credit Party, cease to be a Subsidiary Guarantor and shall have no further
liability hereunder.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Credit Agreement to be duly executed and delivered by their proper and
duly authorized officers as of the day and year first above written.
- 1 -
<PAGE>
SFX ENTERTAINMENT, INC. WESTBURY MUSIC FAIR, L.L.C.
ARDEE FESTIVALS N.J., INC. PACE ENTERTAINMENT CORPORATION
ARDEE PRODUCTIONS, LTD. PACE MUSIC GROUP, INC.
ATLANTA CONCERTS, INC. PACE THEATRICAL GROUP, INC.
BEACH CONCERTS, INC. PACE MOTOR SPORTS, INC.
BGP ACQUISITION, L.L.C. PACE TOURING, INC.
BROADWAY CONCERTS, INC. AMERICAN BROADWAY, INC.
CONN TICKETING COMPANY PACE VARIETY ENTERTAINMENT, INC.
CONNECTICUT AMPHITHEATER PACE COMMUNICATIONS, INC.
DEVELOPMENT CORPORATION PACE ENTERTAINMENT GP CORP.
CONNECTICUT CONCERTS INCORPORATED PEC, INC.
CONNECTICUT PERFORMING ARTS, INC.
CONNECTICUT PERFORMING ARTS PACE ENTERTAINMENT GROUP, LTD.
PARTNERS PACE PRODUCTIONS, INC.
CONTEMPORARY GROUP ACQUISITION PACE CONCERTS GP, INC.
CORP. OLD PCI, INC.
DEER CREEK AMPHITHEATER CONCERTS, SM/PACE, INC.
INC. PACE BAYOU PLACE, INC.
DEER CREEK AMPHITHEATER CONCERTS, PACE AMPHITHEATERS, INC.
L.P. PACE AMPHITHEATER MANAGEMENT,
DELSNER/SLATER ENTERPRISES LTD. INC.
DUMB DEAL, INC. PACE MILTON KEYNES, INC.
EXIT 116 REVISITED, INC. PACE U.K. HOLDING CORPORATION
FPI CONCERTS, INC. CONCERTS, INC.
IN HOUSE TICKETS, INC. PACE CONCERTS, LTD.
IRVING PLAZA CONCERTS, INC. PTG-FLORIDA, INC.
MURAT CENTER CONCERTS, INC. ENTERTAINMENT PERFORMING ARTS,
MURAT CENTER CONCERTS, L.P. INC.
NOC, INC. TOURING PRODUCTIONS, INC.
NORTHEAST TICKETING COMPANY FESTIVAL PRODUCTIONS, INC.
POLARIS AMPHITHEATER CONCERTS, INC. TUNEFUL COMPANY, INC.
QN CORP. PAVILION PARTNERS
SFX BROADCASTING OF THE MIDWEST, GSAC PARTNERS
INC. PACE AEP ACQUISITION, INC.
SFX CONCERTS, INC. BG PRESENTS, INC.
SFX NETWORK GROUP, L.L.C. BILL GRAHAM ENTERPRISES, INC.
SOUTHEAST TICKETING COMPANY BILL GRAHAM PRESENTS, INC.
SUNSHINE CONCERTS, L.L.C. BILL GRAHAM MANAGEMENT, INC.
SUNSHINE DESIGNS, INC. SHORELINE AMPHITHEATRE, LTD.
SUNSHINE DESIGNS, L.P. FILLMORE FINGERS, INC.
SUNTEX ACQUISITION, INC. AKG, INC.
SUNTEX ACQUISITION, L.P. FILLMORE CORPORATION
WOLFGANG RECORDS
SHORELINE AMPHITHEATRE PARTNERS
- 2 -
<PAGE>
By: /s/ Thomas P. Benson
--------------------------
Name: Thomas P. Benson
Title: CFO
- 3 -
<PAGE>
Revolving Commitment THE BANK OF NEW YORK,
in its individual capacity, as Issuer,
$40,000,000 and as Administrative Agent
Term Loan Amount
$57,500,000 By: /s/ A.D. Pray
----------------------------
Name: A.D. Pray
Title: Senior Vice President
- 1 -
<PAGE>
Revolving Commitment GOLDMAN SACHS CREDIT PARTNERS L.P.,
in its individual capacity and as
$40,000,000 Co-Documentation Agent
Term Loan Amount
By: /s/ Robert J. O'Shea
$-0- Name: Robert J. O'Shea
Title: Managing Director
- 1 -
<PAGE>
Revolving Commitment LEHMAN COMMERCIAL PAPER INC.,
in its individual capacity and as
$40,000,000 Co-Documentation Agent
Term Loan Amount
By: /s/ Dennis J. Dee
-----------------------
$-0- Name: Dennis J. Dee
Title: Vice President
- 2 -
<PAGE>
Revolving Commitment BANKBOSTON, N.A.
$10,000,000
Term Loan Amount
By: /s/ Daniel M. Kortick
----------------------------
$10,000,000 Name: Danial M. Kortick
Title: Vice President
- 3 -
<PAGE>
Revolving Commitment THE TORONTO-DOMINION BANK
$-0-
Term Loan Amount
By: /s/ David G. Parker
------------------------
$15,000,000 Name: David G. Parker
Title: Mgr. Cr. Admin.
- 4 -
<PAGE>
Revolving Commitment STATE STREET BANK AND TRUST
COMPANY
$10,000,000
Term Loan Amount
By: /s/ Timothy R. Rubin
------------------------
$5,000,000 Name: Timothy R. Rubin
Title: VP
- 5 -
<PAGE>
Revolving Commitment PNC BANK, NATIONAL ASSOCIATION
$10,000,000
Term Loan Amount
By: /s/ Steven J. McGehrin
-------------------------
$5,000,000 Name: Steven J. McGehrin
Title: Vice President
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<PAGE>
Revolving Commitment CREDIT AGRICOLE INDOSUEZ
$-0-
Term Loan Amount By: /s/ Francois Berthelot
-------------------------
$10,000,000 Name: Francois Berthelot
Title: Vice President
By: /s/ P. Frankel
-------------------------
Name: P. Frankel
Title: First Vice President
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<PAGE>
Revolving Commitment THE ING CAPITAL SENIOR SECURED HIGH
INCOME FUND, L.P.
$-0- By: ING CAPITAL ADVISORS, INC.,
as Investment Advisor
Term Loan Amount
By: /s/ Kathleen A. Lenarcic
-----------------------------------------
$15,000,000 Name: Kathleen A. Lenarcic
Title: Vice President & Portfolio Manager
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<PAGE>
Revolving Commitment ARCHIMEDES FUNDING, L.L.C.
By: ING CAPITAL ADVISORS, INC.,
$-0- as Collateral Manager
Term Loan Amount
By: /s/ Kathleen A. Lenarcic
-----------------------------------------
$7,500,000 Name: Kathleen A. Lenarcic
Title: Vice President & Portfolio Manager
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<PAGE>
Revolving Commitment ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
$-0- By: ING CAPITAL ADVISORS, INC.,
as Investment Advisor
Term Loan Amount
By: /s/ Kathleen A. Lenarcic
----------------------------------------
$15,000,000 Name: Kathleen A. Lenarcic
Title: Vice President & Portfolio Manager
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<PAGE>
Revolving Commitment OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (A UNIT OF THE CHASE
$-0- MANHATTAN BANK)
Term Loan Amount
By: /s/ Andrew D. Gordon
----------------------
$10,000,000 Name: Andrew D. Gordon
Title: Managing Director
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<PAGE>
Execution Copy
SFX ENTERTAINMENT, INC.
$350,000,000
9-1/8% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
February 5, 1998
Lehman Brothers Inc.
Goldman, Sachs & Co.
BNY Capital Markets, Inc.
ING Barings
c/o Lehman Brothers Inc.
3 World Financial Center
200 Vesey Street
New York, New York 10285
Ladies and Gentlemen:
SFX Entertainment, Inc., a Delaware corporation (the
"COMPANY") and each of the entities listed on Schedule I hereto (the
"SUBSIDIARIES") hereby confirms its agreement with each of Lehman Brothers
Inc., Goldman, Sachs & Co., BNY Capital Markets, Inc. and ING Barings
(collectively, the "INITIAL PURCHASERS"), as set forth below.
1. The Notes. Subject to the terms and conditions herein
contained, the Company proposes to issue and sell (the "OFFERING") to the
Initial Purchasers $350,000,000 in aggregate principal amount of its 9-1/8%
Senior Subordinated Notes due 2008 (the "INITIAL NOTES"). The payment of
principal, premium, if any, interest and Liquidated Damages (as defined below),
if any, on the Notes and the Company's 9-1/8% Senior Subordinated Notes due
2008 to be issued in the Exchange Offer referred to below (the "NEW NOTES" and,
together with the Initial Notes, the "NOTES") will be unconditionally
guaranteed on a senior subordinated basis by each of the Subsidiaries listed as
Guarantors on Schedule 1 hereto (collectively, the "GUARANTORS") pursuant to
their guarantees of the Notes (the "SUBSIDIARY GUARANTEES"). The Initial Notes
are to be issued pursuant to an indenture to be dated as of the Closing Date
(the "INDENTURE") among the Company, the Guarantors and The Chase Manhattan
Bank, as trustee (the "TRUSTEE").
Capitalized terms used herein and not otherwise defined are
used as defined in the Offering Memorandum (as defined below) or the Indenture.
Upon original issuance thereof, and until such time as is no
longer required under the applicable requirements of the Securities Act of
1933, as amended (the "SECURITIES ACT"), the Initial Notes (and all securities
issued in exchange therefor or in substitution thereof) shall bear the
following legend:
<PAGE>
"THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY HAS
NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER: (1) REPRESENTS THAT
IT IS (A) A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) NOT A U.S. PERSON AND IS ACQUIRING
THE NOTE EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY
EXCEPT TO (A) THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR TRUSTEE, AS APPLICABLE), (D)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, AND, IN EACH CASE, IN ACCORDANCE
WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR ANY OTHER
APPLICABLE JURISDICTION; AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFER
IS PURSUANT TO CLAUSE (C), (D) OR (E) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION,"
"UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT."
The Company has prepared a preliminary offering memorandum,
dated January 21, 1998 (the "PRELIMINARY OFFERING MEMORANDUM"), and will
prepare a final offering memorandum to be dated the date hereof (as amended or
supplemented, the "OFFERING MEMORANDUM"), setting forth or including a
description of the terms of the Initial Notes, the terms of the Offering, a
description of the Company and the Subsidiaries and any material developments
relating to the Company and the Subsidiaries occurring after January 21, 1998.
Copies of the Preliminary Offering Memorandum have been, and copies of the
Offering Memorandum will be, delivered by the Company to the Initial Purchasers
pursuant to the terms of this Purchase Agreement (this
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<PAGE>
"AGREEMENT"). The Company hereby confirms that it has authorized the use of the
Preliminary Offering Memorandum and the Offering Memorandum in connection with
the offering and resale of the Initial Notes by the Initial Purchasers in
accordance with Section 4 hereof.
Each Initial Purchaser has advised the Company that it will
make offers (the "EXEMPT RESALES") of the Initial Notes purchased by them
hereunder on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be qualified institutional buyers ("QUALIFIED INSTITUTIONAL BUYERS")
as defined in Rule 144A under the Securities Act, as such rule may be amended
from time to time ("RULE 144A"), and (ii) to persons other than U.S. Persons in
offshore transactions meeting the requirements of Rule 903 of Regulation S
(such persons specified in clauses (i) and (ii) being referred to herein as the
"ELIGIBLE PURCHASERS"). As used herein, the terms "offshore transaction" and
"U.S. Person" have the respective meanings given to them in Regulation S. Each
Initial Purchaser will offer the Initial Notes to Eligible Purchasers initially
at the price set forth on the cover page of the Offering Memorandum. Such price
may be changed at any time without notice.
Holders (including subsequent transferees) of the Initial
Notes will have the registration rights set forth in the registration rights
agreement (the "REGISTRATION RIGHTS AGREEMENT"), to be dated the Closing Date.
Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "COMMISSION") under the
circumstances set forth therein, (i) a registration statement under the
Securities Act (the "EXCHANGE OFFER REGISTRATION STATEMENT") relating to the
New Notes to be offered in exchange for the Initial Notes (such offer to
exchange being referred to collectively as the "EXCHANGE OFFER") and, if
required, (ii) a shelf registration statement pursuant to Rule 415 under the
Securities Act (the "SHELF REGISTRATION STATEMENT," and together with the
Exchange Offer Registration Statement, the "REGISTRATION STATEMENTS") relating
to the Exchange Offer and resale of the Initial Notes by certain holders of
such Notes, and to use all commercially reasonable efforts to cause such
Registration Statements to be declared effective.
The Initial Notes will be offered and sold to the Initial
Purchasers without being registered under the Securities Act in reliance on an
exemption from such registration requirements.
It is understood by the parties hereto that (i) the Company
and the other parties thereto have entered into a commitment letter (the
"COMMITMENT LETTER") relating to a new credit agreement (the "NEW CREDIT
AGREEMENT"), (ii) on the Closing Date, the Company will make payment in cash
for the consents and waivers, upon the terms of and subject to the Consent
Solicitation Statement, dated January 7, 1998 (as supplemented by Supplement
No. 1 dated January 28, 1998, the "NOTES CONSENT SOLICITATION"), relating to
the outstanding 10-3/4% Senior Subordinated Notes due 2006 (the "OLD NOTES") of
SFX Broadcasting, Inc. ("BROADCASTING") delivered by the holders thereof
pursuant to the Notes Consent Solicitation, and (iii) on the Closing Date, the
Company will make payment in cash for the consents and waivers, upon the terms
of and subject to the Consent Solicitation Statement, dated January 7, 1998 (as
supplemented by Supplement No. 1 dated January 28, 1998, the "PREFERRED CONSENT
SOLICITATION" and, together with the Notes Consent Solicitation, the "CONSENT
SOLICITATIONS"), relating to the outstanding 12-5/8% Series E Cumulative
Exchangeable Preferred Stock due 2007 (the "OLD PREFERRED") of Broadcasting
delivered by the holders thereof pursuant to the Preferred Consent
Solicitation.
The Initial Purchasers and their direct and indirect
transferees will be entitled to the benefits of the Registration Rights
Agreement, substantially in the form attached hereto as Exhibit A, pursuant to
which the Company and the Guarantors will agree to use their best efforts (i)
to commence, among other things, an
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offer to exchange the Initial Notes for New Notes that have been registered
under the Securities Act, and that otherwise are identical in all respects to
the Initial Notes, or, if required, (ii) to cause a shelf registration
statement to become effective under the Securities Act and to remain effective
for the period designated in such Registration Rights Agreement.
2. Representations and Warranties of the Company and the
Subsidiaries. The Company and each Subsidiary represents and warrants to and
agrees with the Initial Purchasers as follows:
a. Each of the Preliminary Offering Memorandum and the
Offering Memorandum as of its respective date did not, and the Offering
Memorandum as of the Closing Date will not, contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Company and the Subsidiaries make
no representation or warranty as to information contained in or omitted from
the Preliminary Offering Memorandum or the Offering Memorandum in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the Initial Purchasers specifically for inclusion in the Preliminary
Offering Memorandum or the Offering Memorandum.
b. Assuming the Initial Notes are issued, sold and delivered
under the circumstances contemplated by the Offering Memorandum and this
Agreement, that the representations and warranties and covenants of the Initial
Purchasers contained in Section 4 hereof are true, correct and complete, and
that the Initial Purchasers comply with their covenants in Section 4 hereof,
(i) registration under the Securities Act of the Initial Notes or qualification
of the Indenture in respect of the Initial Notes under the Trust Indenture Act
of 1939, as amended (the "TRUST INDENTURE ACT"), is not required in connection
with the offer and sale of the Initial Notes to the Initial Purchasers in the
manner contemplated by the Offering Memorandum or this Agreement and (ii)
initial resales of the Initial Notes by the Initial Purchasers on the terms and
in the manner set forth in the Offering Memorandum and Section 4 hereof are
exempt from the registration requirements of the Securities Act.
c. No securities of the same class (within the meaning of
Rule 144A(d)(3) under the Securities Act) as the Initial Notes are listed on
any national securities exchange registered under Section 6 of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT") or quoted on an automated
inter-dealer quotation system.
d. Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act ("REGULATION D")) of the
Company has, directly or through any agent (provided that no representation is
made as to the Initial Purchasers or any person acting on their behalf), (i)
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of any security (as defined in the Securities Act) that is or will be
integrated with the offering and sale of the Initial Notes in a manner that
would require the registration of the Initial Notes under the Securities Act or
(ii) engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offering of the Initial
Notes.
e. Neither the Company nor any of the Subsidiaries has taken,
nor will any of them take, directly or indirectly, any action designed to, or
that could reasonably be expected to, cause or result in stabilization or
manipulation of the price of the Initial Notes to facilitate the sale and
resale of the Initial Notes.
f. Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of their respective dates, contains the information
specified in Rule 144A(d)(4) under the Securities Act.
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g. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Preliminary Offering Memorandum and
the Offering Memorandum, is and, after giving effect to the Pending
Acquisitions (as defined in the Offering Memorandum), will be duly registered
and qualified to conduct its business and is and, after giving effect to the
Pending Acquisitions, will be in good standing, in each jurisdiction or place
where the nature of its business requires such registration or qualification,
except where the failure to be so qualified would not have a material adverse
effect or a prospective material adverse effect on the assets, liabilities,
results of operations, management, condition (financial or other), prospects,
properties, business or net worth of the Company and its direct and indirect
subsidiaries, taken as a whole (a "MATERIAL ADVERSE EFFECT").
h. All of the issued shares of capital stock of the Company
have been duly authorized, are validly issued, fully paid and nonassessable and
have been issued in compliance with all applicable federal and state securities
laws.
i. Neither the Company nor any of the Subsidiaries owns or
controls any subsidiaries other than the Subsidiaries. Each Subsidiary is a
corporation duly organized, validly existing and in good standing in the
jurisdiction of its incorporation, with full corporate power and authority to
own, lease and operate its properties and to conduct its business as described
in the Preliminary Offering Memorandum and the Offering Memorandum, is and,
after giving effect to the Pending Acquisitions, will be duly registered and
qualified to conduct its business and is and, after giving effect to the
Pending Acquisitions, will be in good standing, in each jurisdiction or place
where the nature of its business requires such registration or qualification,
except where the failure to be so qualified would not have a Material Adverse
Effect; all of the outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
nonassessable and free of any preemptive or similar rights, and are owned by
the Company directly, or indirectly through one of the other Subsidiaries, free
and clear of any lien, adverse claim, security interest or other encumbrance
(except for security interests under the existing Broadcasting Credit Agreement
(the "BROADCASTING CREDIT AGREEMENT") and the New Credit Agreement) and have
been issued in compliance with all applicable federal and state securities
laws.
j. The Company and each of the Subsidiaries have full
corporate power and authority to enter into this Agreement, the Indenture, the
Registration Rights Agreement, the indenture governing the Exchange Notes (as
defined in the Offering Memorandum), the Commitment Letter, the New Credit
Agreement, the purchase agreements and other agreements relating to each of the
Pending Acquisitions (the "ACQUISITION DOCUMENTS") (each a "TRANSACTION
DOCUMENT" and collectively the "TRANSACTION DOCUMENTS"), to carry out all the
terms and provisions hereof and thereof to be carried out by them and to issue,
and deliver the Notes and the Subsidiary Guarantees, as applicable, as provided
herein and therein.
k. This Agreement has been duly authorized, validly executed
and delivered by the Company and each Subsidiary and constitutes a legal, valid
and binding agreement of the Company and each of the Subsidiaries (assuming it
is a legal, valid and binding agreement of the Initial Purchasers), enforceable
against the Company and each Subsidiary in accordance with its terms except to
the extent that: (i) the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws now or
hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity and (ii)
rights to indemnity and contribution hereunder may be limited by state or
federal securities laws.
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<PAGE>
l. The execution and delivery of the Registration Rights
Agreement have been duly authorized by the Company and each of the Guarantors
and when duly executed and delivered by the Company and each of the Guarantors
(assuming the due execution and delivery by the Initial Purchasers) will
constitute the legal, valid and binding agreement of the Company and each of
the Guarantors (assuming it is a legal, valid and binding agreement of the
Initial Purchasers), enforceable against the Company and each Guarantor in
accordance with its terms except to the extent that: (i) the same may be
limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other laws now or hereafter in effect relating to creditors'
rights generally or by general principles of equity whether asserted in an
action at law or in equity and (ii) rights to indemnity and contribution
hereunder may be limited by state or federal securities laws.
m. The execution and delivery of the Indenture have been duly
authorized by the Company and each of the Guarantors and when duly executed and
delivered by the Company and each of the Guarantors (assuming the due execution
and delivery by the Trustee) will constitute the legal, valid and binding
agreement of the Company and each of the Guarantors, enforceable against the
Company and each Guarantor in accordance with its terms except to the extent
that: (i) the same may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other laws now or hereafter in effect
relating to creditors' rights generally or by general principles of equity
whether asserted in an action at law or in equity and (ii) rights to indemnity
and contribution hereunder may be limited by state or federal securities laws.
n. The Initial Notes have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered by the Company
upon payment therefor as provided herein, will be validly issued and
outstanding, and will constitute the legal, valid and binding obligations of
the Company, entitled to the benefits of the Indenture and enforceable against
the Company in accordance with their terms except to the extent that: (i) the
same may be limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other laws now or hereafter in effect relating to
creditors' rights generally or by general principles of equity whether asserted
in an action at law or in equity and (ii) rights to indemnity and contribution
hereunder may be limited by state or federal securities laws.
o. The New Notes have been duly authorized by the Company
and, when duly executed, authenticated, issued and delivered by the Company
upon exchange for the Initial Notes as provided for in the Registration Rights
Agreement, will be validly issued and outstanding, and will constitute the
legal, valid and binding obligations of the Company, entitled to the benefits
of the Indenture and enforceable against the Company in accordance with their
terms except to the extent that: (i) the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other laws now
or hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity and (ii)
rights to indemnity and contribution hereunder may be limited by state or
federal securities laws.
p. The Subsidiary Guarantees to be endorsed on the Initial
Notes have been duly authorized by the Guarantors and, when duly executed,
authenticated, issued and delivered by the Guarantors as provided herein and
when the Initial Notes have been duly executed, authenticated, issued and
delivered upon payment therefor as provided herein, will be validly issued and
outstanding, and will constitute the legal, valid and binding obligations of
each of the Guarantors, entitled to the benefits of the Indenture and
enforceable against the Guarantors in accordance with their terms except to the
extent that: (i) the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws now
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<PAGE>
or hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity and (ii)
rights to indemnity and contribution hereunder may be limited by state or
federal securities laws.
q. The Subsidiary Guarantees to be endorsed on the New Notes
have been duly authorized by the Guarantors and, when duly executed,
authenticated, issued and delivered and when the New Notes have been duly
executed, authenticated, issued and delivered by the Guarantors upon exchange
for the Initial Notes as provided for in the Registration Rights Agreement,
will be validly issued and outstanding, and will constitute the legal, valid
and binding obligations of each of the Guarantors, entitled to the benefits of
the Indenture and enforceable against the Guarantors in accordance with their
terms except to the extent that: (i) the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other laws now
or hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity and (ii)
rights to indemnity and contribution hereunder may be limited by state or
federal securities laws.
r. The execution and delivery of each of the other
Transaction Documents to which the Company or any Subsidiary is a party have
been duly authorized by the Company and each Subsidiary party thereto and each
of such other Transaction Documents which has been executed prior to or on the
date hereof has been duly executed and delivered by the Company and each
Subsidiary party thereto and is the legal, valid and binding agreement of the
Company and each Subsidiary party thereto (assuming it is a legal, valid and
binding agreement of the other parties thereto), enforceable against the
Company and each Subsidiary party thereto in accordance with its terms except
to the extent that: (i) the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws now or
hereafter in effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in equity; and
(ii) rights to indemnity and contribution hereunder may be limited by state or
federal securities laws.
s. The Company has an authorized, issued and outstanding
capitalization as set forth in the Offering Memorandum. The authorized capital
stock of the Company conforms to the description thereof contained in the
Offering Memorandum.
t. The Company's capitalization at September 30, 1997, and
adjusted capitalization at such date after giving effect to the Financing (as
defined in the Offering Memorandum), the Pending Acquisitions, the Spin-Off (as
defined in the Offering Memorandum) and the Broadcasting Merger (as defined in
the Offering Memorandum), is, in each case, as set forth in the Offering
Memorandum under the caption "Capitalization."
u. Except as disclosed in the Preliminary Offering Memorandum
and the Offering Memorandum, there are no outstanding (A) securities or
obligations of the Company or any of the Subsidiaries convertible into or
exchangeable for any capital stock of the Company or any such Guarantor, (B)
warrants, rights or options to subscribe for or purchase from the Company or
any of the Subsidiaries any such capital stock or any such convertible or
exchangeable securities or obligations, or (C) obligations of the Company or
any of the Subsidiaries to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such warrants,
rights or options.
v. Except as disclosed in the Offering Memorandum and as set
forth in the Registration Rights Agreement, there are no contracts, agreements
or understandings between the Company and any person
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<PAGE>
granting such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities owned or to
be owned by such person or to require the Company to include such securities in
any securities being registered pursuant to any registration statement filed by
the Company under the Securities Act.
w. The consolidated financial statements of the Company and
the Subsidiaries and the financial statements of each of the businesses to be
acquired in the Pending Acquisitions (collectively, the "ACQUISITION ENTITIES")
included in the Preliminary Offering Memorandum and the Offering Memorandum
comply as to form in all material respects with the requirements applicable to
registration statements on Form S-1 under the Securities Act and present fairly
in all material respects the financial position of the Company on a
consolidated basis and of each of the Acquisition Entities, respectively, and
the results of operations and changes in financial condition as of the dates
and for the periods therein specified. Such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the captions "Offering
Memorandum Summary--Summary Consolidated Financial Data of the Company,"
"Selected Consolidated Financial Data of the Company" and "Unaudited Pro Forma
Condensed Combined Financial Statements" in the Preliminary Offering Memorandum
and the Offering Memorandum fairly present, on the basis stated in the
Preliminary Offering Memorandum and the Offering Memorandum, the information
included. The other financial and statistical information and data set forth in
the Preliminary Offering Memorandum and the Offering Memorandum is, in all
material respects, accurately presented and prepared on a basis consistent with
such financial statements and the books and records of the Company, the
Subsidiaries and the Acquisition Entities, as applicable. The unaudited pro
forma condensed combined financial statements and the related notes thereto
included in the Preliminary Offering Memorandum and the Offering Memorandum
comply as to form in all material respects with the requirements applicable to
pro forma financial statements included in registration statements on Form S-1
under the Securities Act and present fairly, as stated therein, the pro forma
financial position and results of operations at the respective dates and for
the respective periods indicated. The pro forma adjustments are factually
supportable. All adjustments necessary to fairly present this pro forma
information have been made.
x. Each of Ernst & Young LLP, Arthur Andersen LLP and Price
Waterhouse LLP, who have certified certain financial statements of the Company,
its consolidated subsidiaries and the Acquisition Entities, and whose reports
appear in the Preliminary Offering Memorandum and the Offering Memorandum, were
independent public accountants under Rule 101 of AICPA's Code of Professional
Conduct and its interpretations and rulings during the periods covered by the
financial statements on which they reported contained in the Preliminary
Offering Memorandum and the Offering Memorandum.
y. Subsequent to the date of the most recent balance sheet
for each of the Company, the Subsidiaries and each of the Acquisition Entities
included in the Preliminary Offering Memorandum and the Offering Memorandum,
except as set forth in the Preliminary Offering Memorandum and the Offering
Memorandum, (i) none of the Company, any of the Subsidiaries or any Acquisition
Entity has incurred any liabilities or obligations, direct or contingent, or
entered into any transaction not in the ordinary course of business, except
such as would not have a Material Adverse Effect and (ii) none of the Company,
any of the Subsidiaries or any Acquisition Entity has sustained, since the date
of the latest audited financial statements included in the Preliminary Offering
Memorandum and the Offering Memorandum, any material losses or interferences
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, except such as would not have a Material Adverse
Effect.
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<PAGE>
z. Each of the Transaction Documents, the Initial Notes and
the Subsidiary Guarantees conform in all material respects to the respective
statements relating thereto contained in the Preliminary Offering Memorandum
and the Offering Memorandum.
aa. Except as disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation, the
documents incorporated by reference therein), there are no business
relationships or related party transactions which would be required to be
disclosed therein by Item 404 of Regulation S-K of the Commission and each
business relationship or related party transaction described therein is a fair
and accurate description of the relationships and transactions so described.
bb. None of the Company or the Subsidiaries, nor, to the
Company's knowledge, any of the Acquisition Entities or any director, officer,
agent, employee or other person associated with or acting on behalf of the
Company or any of the Subsidiaries, has used any corporate funds during the
last five years for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977, as amended; or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment, except such as would not have a Material
Adverse Effect.
cc. Except as disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum, the execution, delivery and performance
of this Agreement, the execution, delivery and performance of the other
Transaction Documents, and the consummation by the Company and the Subsidiaries
of the transactions contemplated hereby and thereby will not (A) require any
consent, approval, authorization or other order (which has not been obtained)
of any court, regulatory body, administrative agency or other governmental body
except such as may be required under the Securities Act, the Exchange Act, the
Trust Indenture Act, securities regulatory bodies (including self-regulatory
bodies), securities exchanges or the securities or Blue Sky laws of the various
states and under the Hart-Scott-Rodino Anti-Trust Improvement Act of 1976; (B)
conflict with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of the
Subsidiaries; (C) require any consent or approval (which has not been obtained)
of the parties to, or conflict with or constitute a breach of any of the terms
or provisions of, or a default under, any agreement or other instrument to
which the Company or any of the Subsidiaries is a party or by which the Company
or any of the Subsidiaries or their respective property is bound; (D) violate
or conflict with any laws or administrative regulations, rulings of court,
decrees applicable to the Company, any of the Subsidiaries or their respective
property; or (E) result in the creation or imposition of any lien (other than
under the New Credit Agreement) on any asset of the Company or any of the
Subsidiaries, except, in the case of (A), (C), (D), or (E) above, such as would
not, either singly or in the aggregate, have a Material Adverse Effect.
dd. Except as disclosed in the Preliminary Offering
Memorandum and the Offering Memorandum, each of the Company, the Subsidiaries
and the Acquisition Entities is operating in material compliance with all (and
has not violated any) laws, regulations, administrative orders or rulings or
court decrees applicable to it or to any of its property (including without
limitation those relating to broadcast operations, environmental, safety or
similar matters, federal or state laws relating to the hiring, promotion or pay
of employees), except for violations which would not have a Material Adverse
Effect.
ee. Except as, singly or in the aggregate, would not have a
Material Adverse Effect, (i) the Company and the Subsidiaries, have (A) such
permits, licenses, franchises and authorizations of
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governmental or regulatory authorities ("PERMITS") as are necessary to own,
lease and operate their properties and to conduct their businesses as presently
conducted, and (B) fulfilled and performed all of their material obligations
with respect to the Permits, and (ii) no event has occurred that would allow,
or after notice or lapse of time would allow, revocation or termination of any
Permit or that would result in any other material impairment of the rights
granted to the Company or any of the Subsidiaries under any Permit, and (iii)
neither the Company nor any Subsidiary has any reason to believe that any
governmental body or agency is considering limiting, suspending or revoking any
Permit.
ff. No legal or governmental proceedings are pending to which
the Company, any of the Subsidiaries or any of the Acquisition Entities is a
party or to which the property of the Company, any of the Subsidiaries or any
of the Acquisition Entities is subject that would be required to be described
in a registration statement on Form S-1 under the Securities Act and are not
described in the Preliminary Offering Memorandum and the Offering Memorandum,
and no such proceedings have been threatened against the Company, any of the
Subsidiaries or any of the Acquisition Entities or with respect to any of their
respective properties; and no contract or other document would be required to
be described in a registration statement on Form S-1 under the Securities Act
that is not described in the Preliminary Offering Memorandum and the Offering
Memorandum.
gg. None of the Company, the Subsidiaries or, to the
knowledge of the Company, the sellers of the Acquisition Entities is in breach
or violation of any of the terms or provisions of any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the Company,
any of the Subsidiaries or, to the knowledge of the Company, any of sellers of
the Acquisition Entities, as applicable, is a party or by which the Company,
any of the Subsidiaries or, to the knowledge of the Company, any of the sellers
of the Acquisition Entities, as applicable, is bound or to which any of the
property or assets of the Company, any of the Subsidiaries or, to the knowledge
of the Company, any of sellers of the Acquisition Entities, as applicable, is
subject, nor is the Company, any of the Subsidiaries or, to the knowledge of
the Company, any of the sellers of the Acquisition Entities in violation of the
provisions of its charter, by-laws, operating agreement or other organizational
documents or any statute or any judgment, order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company, any
of the Subsidiaries, to the knowledge of the Company, any of the sellers of the
Acquisition Entities or any of their properties or assets (except to the extent
any such conflict, breach, violation or default is cured at or prior to the
Closing Date and within the grace period applicable thereto or would not have a
Material Adverse Effect).
hh. Each of the Company, the Subsidiaries and the sellers of
each of the Acquisition Entities has (i) good title to all of the properties
and assets owned by them as described in the Preliminary Offering Memorandum
and the Offering Memorandum, free and clear of all liens, charges, encumbrances
or restrictions (except security interests under the Broadcasting Credit
Agreement and the New Credit Agreement), except as would not have a Material
Adverse Effect and (ii) peaceful and undisturbed possession in all material
respects under all material leases to which such person is a party as lessee,
except as would not have a Material Adverse Effect.
ii. The Company, the Subsidiaries and the sellers of each of
the Acquisition Entities own or possess adequate rights to use all material
trademarks, service marks, tradenames, trademark registrations, service mark
registrations and copyrights necessary for the conduct of their businesses, and
to the Company's knowledge, the conduct of their businesses will not conflict
with, and neither the Company nor any of the Subsidiaries has received any
notice of any claim of conflict with, any such rights of others (except in any
such case for any conflict that would not have a Material Adverse Effect).
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<PAGE>
jj. Each of the Company, the Subsidiaries and the Acquisition
Entities is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974,
as amended, including the regulations and published interpretations thereunder
("ERISA"); no "reportable event" (as defined in ERISA) has occurred with
respect to any "pension plan" (as defined in ERISA) for which the Company or
any Subsidiary would have any liability; none of the Company or the
Subsidiaries has incurred or expects to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"CODE"); and each "pension plan" for which the Company or any Subsidiary would
have any liability that is intended to be qualified under Section 401(a) of the
Code is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification, except, in each case, as would not have a Material Adverse
Effect.
kk. There is (i) no material unfair labor practice complaint
pending against the Company, any of the Subsidiaries or any of the Acquisition
Entities, or, to the best knowledge of the Company, threatened against any of
them, before the National Labor Relations Board or any state or local labor
relations board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company, any of the Subsidiaries or any of the Acquisition
Entities, or, to the best knowledge of the Company, threatened against any of
them, (ii) no material strike, labor dispute, slowdown or stoppage pending
against the Company, any of the Subsidiaries or any of the Acquisition Entities
nor, to the best knowledge of the Company, threatened against the Company, any
of the Subsidiaries or any of the Acquisition Entities and (iii) to the best
knowledge of the Company, no union representation question existing with
respect to the employees of the Company, any of the Subsidiaries or any of the
Acquisition Entities and, to the best knowledge of the Company, no union
organizing activities are taking place, except, in each case, as would not have
a Material Adverse Effect.
ll. The Company and each of the Subsidiaries has reviewed the
effect of Environmental Laws (as defined below) and the disposal of hazardous
or toxic substances, wastes, pollutants and contaminants on the business,
assets, operations and properties of the Company, each of the Subsidiaries and
each of the Acquisition Entities, as applicable, and identified and evaluated
associated costs and liabilities (including, without limitation, any material
capital and operating expenditures required for clean-up, closure of properties
and compliance with Environmental Laws, all permits, licenses and approvals,
all related constraints on operating activities and all potential liabilities
to third parties). On the basis of such reviews, the Company has reasonably
concluded that such associated costs and liabilities would not have a Material
Adverse Effect. None of the Company, the Subsidiaries or the Acquisition
Entities has violated any environmental, safety or similar law or regulation
applicable to it or its business or property relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), lacks any permit,
license or other approval required of it under applicable Environmental Laws or
is violating any term or condition of such permit, license or approval which
could reasonably be expected to, either individually or in the aggregate, have
a Material Adverse Effect.
mm. The Company, the Subsidiaries and the Acquisition
Entities have filed all federal, state and local income and franchise tax
returns required to be filed through the date hereof and have paid, or made
adequate reserve or provision for the payment of, all taxes shown as due
thereon except in any case where such failure would not have a Material Adverse
Effect, and the Company has no knowledge of any tax deficiency that has had (or
would have) a Material Adverse Effect.
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<PAGE>
nn. The Company and the Subsidiaries (i) make and keep
accurate books and records and (ii) maintain internal accounting controls which
provide reasonable assurance that (A) transactions are executed in accordance
with management's specific or general authorization, (B) transactions are
recorded as necessary to permit preparation of their consolidated financial
statements and to maintain accountability for their assets, (C) access to their
assets is permitted only in accordance with management's specific or general
authorization and (D) the reported accountability for their assets is compared
with existing assets at reasonable intervals.
oo. Neither the Company nor any of the Subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
pp. Each of the Company, the Subsidiaries and the Acquisition
Entities has complied with all provisions of Florida Statutes, ss.517.075,
relating to doing business in Cuba.
qq. None of the Company, the Subsidiaries or any agent
thereof acting on behalf of any of them has taken, and none of them will take,
any action that might cause this Agreement or the issuance or sale of the Notes
to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part
220), Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve
rr. The Company has delivered to the Initial Purchasers true
and correct, executed copies of each Transaction Document that has been
executed prior to the date hereof and there have been no amendments,
alterations, modifications or waivers thereto or in the exhibits or schedules
thereto other than those as to which the Initial Purchasers shall previously
have been advised and shall not have reasonably objected after being furnished
a copy thereof.
ss. Other than as contemplated by this Agreement, the
Transaction Documents and the Preliminary Offering Memorandum and the Offering
Memorandum, there is no broker, finder or other party that is entitled to
receive from the Company or any of the Subsidiaries any brokerage or finder's
fee or other fee or commission as a result of any of the transactions
contemplated by this Agreement or any of the Transaction Documents.
tt. None of the Company or any of its affiliates or any
person acting on its or their behalf (other than the Initial Purchasers) has
engaged or will engage during the applicable restricted period in any directed
selling efforts within the meaning of Rule 902(b) of Regulation S with respect
to the Notes, and the Company and its affiliates and all persons acting on its
or their behalf (other than the Initial Purchasers) have complied with and will
comply with the offering restrictions requirements of Regulation S in
connection with the offering of the Notes outside of the United States.
uu. The sale of the Initial Notes pursuant to Regulation S
are "offshore transactions" and are not part of a plan or scheme to evade the
registration provision of the Securities Act.
3. Purchase, Sale and Delivery of the Initial Notes. On the
basis of the representations, warranties, agreements and covenants herein
contained and subject to the terms and conditions herein set forth, the Company
agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers
agree, severally and not jointly, to purchase from the Company, at 97.0% of
their principal amount, the respective aggregate
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principal amounts of the Initial Notes set forth in Schedule II hereto.
Certificates in definitive form for the Initial Notes that the Initial
Purchasers have agreed to purchase hereunder, and in such denomination or
denominations and registered in such name or names as the Initial Purchasers
request upon notice to the Company at least 48 hours prior to the Closing Date,
shall be delivered by or on behalf of the Company to the Initial Purchasers for
the account of the Initial Purchasers against payment to or upon the order of
the Company of the purchase price by wire transfer in federal (same-day) funds
net of the overnight cost of such funds, which amount shall be agreed upon by
mutual consent of the parties hereto. Such delivery of and payment for the
Initial Notes shall be made at the offices of Baker & McKenzie, 805 Third
Avenue, New York, New York 10022, at 9:00 A.M., New York City time, on February
11, 1998, or at such other place, time or date as the Initial Purchasers and
the Company may agree upon, such time and date of delivery against payment
being herein referred to as the "CLOSING DATE." The Company will make such
certificate or certificates for the Initial Notes available for checking and
packaging by the Initial Purchasers at the offices in New York, New York of
Lehman Brothers Inc. at least 24 hours prior to the Closing Date. Time shall be
of the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of the Initial Purchasers
hereunder.
4. Sale and Resale of the Initial Notes by the Initial
Purchasers. Each Initial Purchaser represents and warrants with respect to
itself that:
(a) Such Initial Purchaser is a Qualified Institutional Buyer
with such knowledge and experience in financial and business matters as are
necessary in order to evaluate the merits and risks of an investment in the
Initial Notes.
(b) Such Initial Purchaser (i) is not acquiring the Initial
Notes with a view to any distribution thereof or with any present intention of
offering or selling any of the Initial Notes in a transaction that would
violate the Securities Act or the securities laws of any State of the United
States or any other applicable jurisdiction; (ii) in connection with the Exempt
Resales, will solicit offers to buy the Notes only from, and will offer to sell
the Notes only to, the Eligible Purchasers in accordance with this Agreement
and on the terms contemplated by the Offering Memorandum; and (iii) will not
offer or sell the Notes pursuant to, nor has it offered or sold the Notes by,
or otherwise engaged in, any form of general solicitation or general
advertising (within the meaning of Regulation D, including, but not limited to,
advertisements, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio,
or any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising).
(c) The Notes have not been and will not be registered under
the Securities Act and may not be offered or sold within the United States or
to, or for the account or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to an exemption from the
registration requirements of the Securities Act. The Initial Purchasers
represent that they have not offered, sold or delivered the Notes, and will not
offer, sell or deliver the Notes (i) as part of its distribution at any time or
(ii) otherwise until 40 days after the later of the commencement of the
offering and the Closing Date (such period, the "RESTRICTED PERIOD"), within
the United States or to, or for the account or benefit of U.S. persons, except
in accordance with Rule 144A under the Securities Act or another applicable
exemption. Accordingly, each Initial Purchaser represents and agrees that
neither it, its affiliates nor any persons acting on its or their behalf has
engaged or will engage in any directed selling efforts within the meaning of
Rule 902(b) of Regulation S with respect to the Notes, and it, its affiliates
and all persons acting on its behalf have complied and will comply with the
offering restrictions requirements of Regulation S.
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<PAGE>
(d) Such Initial Purchaser agrees that, at or prior to
confirmation of a sale of Notes (other than a sale pursuant to Rule 144A), it
will have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Notes from it during the
Restricted Period a confirmation or notice substantially to the following
effect:
"The Notes covered hereby have not been registered
under the U.S. Securities Act of 1933 (the "Securities Act") and may
not be offered and sold within the United States or to, or for the
account or benefit of, U.S. persons (i) as part of their distribution
at any time or (ii) otherwise until 40 days after the later of the
commencement of the offering or the closing date, except in either
case in accordance with Regulation S (or Rule 144A if available) under
the Securities Act. Terms used above have the meanings assigned to
them in Regulation S."
Such Initial Purchaser further agrees that it has not entered
and will not enter into any contractual arrangement with respect to the
distribution or delivery of the Notes, except with its affiliates or with the
prior written consent of the Company.
(e) Such Initial Purchaser further represents and agrees that
(i) it has not offered or sold and will not offer or sell any Notes to persons
in the United Kingdom prior to the expiry of the period of six months from the
issue date of the Notes, except to persons whose ordinary activities involve
them in acquiring, holding, managing or disposing of investments (as principal
or agent) for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public in the
United Kingdom within the meaning of the Public Offers of Securities
Regulations 1995, (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 with respect to anything done by
it in relation to the Notes in, from or otherwise involving the United Kingdom,
and (iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Notes to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom the document may otherwise lawfully be issued or passed
on.
(f) Such Initial Purchaser agrees not to cause any
advertisement of the Notes to be published in any newspaper or periodical or
posted in any public place and not to issue any circular relating to the Notes,
except such advertisements as include the statements required by Regulation S.
(g) The sale of the Initial Notes pursuant to Regulation S
are "offshore transactions" and are not part of a plan or scheme to evade the
registration provision of the Securities Act.
(h) Such Initial Purchaser understands that the Company and,
for purposes of the opinions to be delivered to the Initial Purchaser pursuant
to Section 7 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and such Initial Purchasers hereby consent to such reliance.
The terms used in this Section 4 that have meanings assigned
to them in Regulation S are used herein as so defined therein.
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<PAGE>
Each Initial Purchaser further agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the Initial Notes only
from, and will offer to sell the Initial Notes only to, the Eligible Purchasers
in Exempt Resales.
5. Covenants of the Company and the Subsidiaries. The Company
and each of the Subsidiaries covenant and agree with the Initial Purchasers as
follows:
a. To furnish to the Initial Purchasers, without charge, as
many copies of the Preliminary Offering Memorandum and the Offering Memorandum
and any supplements and amendments thereto as they may reasonably request.
b. Prior to making any amendment or supplement to the
Offering Memorandum, the Company shall furnish a copy thereof to the Initial
Purchasers and counsel to the Initial Purchasers and will not effect any such
amendment or supplement to which the Initial Purchasers shall reasonably object
by notice to the Company after a reasonable period to review, which shall not
in any case be longer than three business days after receipt of such copy.
c. If, at any time prior to completion of the distribution of
the Initial Notes by the Initial Purchasers to purchasers, any event shall
occur or condition exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Initial Purchasers or counsel for the
Company, to amend or supplement the Offering Memorandum in order that the
Offering Memorandum will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein
not misleading in light of the circumstances existing at the time it is
delivered to a purchaser, or if it is necessary to amend or supplement the
Offering Memorandum to comply with applicable law, to promptly prepare such
amendment or supplement as may be necessary to correct such untrue statement or
omission or so that the Offering Memorandum, as so amended or supplemented,
will comply with applicable law and to furnish to the Initial Purchasers such
number of copies as they may reasonably request.
d. So long as any Initial Notes are outstanding and are
"Restricted Securities" within the meaning of Rule 144(a)(3) under the
Securities Act, to furnish to holders of the Initial Notes and prospective
purchasers of Initial Notes designated by such holders, upon request of such
holders or such prospective purchasers, the information, if any, required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
e. For a period of five years following the Closing Date, to
furnish to the Initial Purchasers copies of any annual reports, quarterly
reports and current reports filed with the Commission on Forms 10-K, 10-Q and
8-K, or such other similar forms as may be designated by the Commission, and
such other documents, reports and information as shall be furnished by the
Company to the Trustee or to the holders of the Notes pursuant to the
Indenture.
f. The Company, as soon as practicable, will make generally
available to holders of the Initial Notes and to the Initial Purchasers
consolidated earnings statements of the Company and its subsidiaries (which
need not be certified by an independent public accountant) that satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 thereunder.
g. To use their reasonable best efforts to qualify the
Initial Notes for sale under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers reasonably designate and to continue
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<PAGE>
such qualifications in effect so long as reasonably required for the
distribution of the Initial Notes. The Company and the Subsidiaries will also
arrange for the determination of the eligibility for investment of the Initial
Notes under the laws of such jurisdictions as the Initial Purchasers reasonably
request. Notwithstanding the foregoing, neither the Company nor any of the
Subsidiaries shall be obligated to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified or to file a general consent to
service of process in any jurisdiction.
h. To use their best efforts to permit the Initial Notes to
be designated as eligible for trading in the Private Offerings, Resales and
Trading through Automated Linkages Market ("PORTAL") securities in accordance
with the rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL market and to permit
the Initial Notes to be eligible for clearance and settlement through The
Depository Trust Company ("DTC").
i. Not to, and will cause their affiliates not to, sell,
offer for sale or solicit offers to buy or otherwise negotiate in respect of
any security (as defined in the Securities Act) in a transaction that could be
integrated with the sale of the Initial Notes in a manner which would require
the registration under the Securities Act of the Initial Notes.
j. Except following the effectiveness of any Registration
Statement (as defined in the Registration Rights Agreement) and except for such
offers as may be made as a result of, or subsequent to, filing such
Registration Statement or amendments thereto prior to the effectiveness
thereof, not to, and will cause their affiliates not to, solicit any offer to
buy or offer to sell the Initial Notes by means of any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
k. For a period of 180 days from the date of the Offering
Memorandum, not to, directly or indirectly, sell, offer to sell, contract to
sell, grant any option to purchase, issue any instrument convertible into or
exchangeable for, or otherwise transfer or dispose of (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition in the future of), debt securities of the Company or any of the
Subsidiaries, except (i) for the New Notes in connection with the Exchange
Offer, (ii) for debt obligations acquired pursuant to the acquisition of all or
substantially all of the stock or assets of a Permitted Business (as defined in
the Offering Memorandum), (iii) for up to $25.0 million debt securities of the
Company or any of the Subsidiaries or (iv) with the prior written consent of
Lehman Brothers Inc.; provided that, in each case, immediately after giving
effect to such transaction, no default or event of default exists under the
Indenture.
l. To apply the net proceeds from the sale of the Initial
Notes as set forth in the Offering Memorandum.
m. To take such steps as shall be necessary to ensure that
neither the Company nor any of the Subsidiaries shall become (i) an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or (ii) a "holding company" or a "subsidiary company" or an "affiliate" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
n. Not to, and will cause their affiliates not to, take any
actions which would require the registration under the Securities Act of the
Initial Notes.
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<PAGE>
o. If, prior to the completion of the distribution of the
Initial Notes, the Company or any Subsidiary commences engaging in business
with the government of Cuba or with any person or affiliate located in Cuba
after the date the Offering Memorandum or if the information reported in the
Offering Memorandum, if any, concerning the Company's or any Guarantor's
business with Cuba or with any person or affiliate located in Cuba changes in
any material way, the Company will provide the Florida Department of Banking
and Finance (the "DEPARTMENT") notice of such business or change, as
appropriate, in a form acceptable to the Department.
p. To do all things necessary to satisfy the closing
conditions set forth in Section 7 hereof.
6. Expenses. The Company and the Subsidiaries, jointly and
severally, agree to pay all costs and expenses incident to the performance of
their obligations under this Agreement, whether or not the transactions
contemplated herein are consummated or this Agreement is terminated pursuant to
Section 9 hereof, including all costs and expenses incident to (i) the
printing, word processing or other production of documents with respect to the
transactions, including any costs of printing the Preliminary Offering
Memorandum, the Offering Memorandum and any amendment or supplement thereto and
any "Blue Sky" memoranda, (ii) all arrangements relating to the delivery to the
Initial Purchasers of copies of the foregoing documents and the costs of
distributing the foregoing documents, (iii) the fees and disbursements of the
counsel, the accountants and any other experts or advisors retained by the
Company or the Subsidiaries, (iv) preparation (including printing), issuance
and delivery to the Initial Purchasers of the Initial Notes, including
trustee's fees, (v) the qualification of the Initial Notes under state
securities and "Blue Sky" laws, including filing fees and fees and
disbursements of counsel for the Initial Purchasers relating thereto, (vi) the
costs and expenses of DTC and its nominee, including its book-entry system;
(vii) all expenses and listing fees incurred in connection with the application
for quotation of the Initial Notes on the PORTAL market, (viii) expenses of the
Company and the Guarantors in connection with any meetings with prospective
investors in the Initial Notes, (ix) fees and expenses of the Trustee,
including fees and expenses of counsel to the Trustee, (x) any fees charged by
investment rating agencies for the rating of the Initial Notes and (xi) all
other costs and expenses incident to the performance of the obligations of the
Company and the Subsidiaries under this Agreement. If the sale of the Initial
Notes provided for herein is not consummated because any condition to the
obligations of the Initial Purchasers set forth in Section 7 hereof is not
satisfied, because this Agreement is terminated pursuant to Section 10 hereof
or because of any failure, refusal or inability on the part of the Company or
the Subsidiaries to perform all obligations and satisfy all conditions on their
part to be performed or satisfied hereunder other than by reason of a default
by the Initial Purchasers, the Company and the Subsidiaries will reimburse the
Initial Purchasers upon demand (accompanied by documentation) for all
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by the Initial Purchasers in connection with the proposed
purchase and sale of the Initial Notes. The Company shall not in any event be
liable to the Initial Purchasers for the loss of anticipated profits from the
transactions covered by this Agreement.
7. Conditions of the Initial Purchasers' Obligations. The
obligation of the Initial Purchasers to purchase and pay for the Initial Notes
are, in their sole discretion, subject to the accuracy, when made and on the
Closing Date, of the representations and warranties of the Company and the
Subsidiaries contained herein, to the performance by the Company and the
Subsidiaries of their obligations hereunder, and to each of the following
additional terms and conditions:
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<PAGE>
a. The Initial Purchasers shall not have discovered and
disclosed to the Company on or prior to the Closing Date that the Offering
Memorandum contains an untrue statement of a fact which, in the reasonable
opinion of Latham & Watkins, counsel for the Initial Purchasers, is material or
omits to state a fact which, in the opinion of such counsel, is material and is
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
b. All of the representations and warranties of the Company
and the Subsidiaries contained in this Agreement shall be true and correct on
the date hereof and on the Closing Date with the same force and effect as if
made on and as of the date hereof and the Closing Date, respectively. The
Company and the Subsidiaries shall have performed or complied with all of the
agreements herein contained and required to be performed or complied with by
them at or prior to the Closing Date.
c. The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 9:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Initial Purchasers may agree. No stop order suspending the
qualification or exemption from qualification of the Initial Notes in any
jurisdiction referred to in Section 5(g) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or to
the knowledge of the Company and the Subsidiaries threatened.
d. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date, have a Material
Adverse Effect; no action, suit or proceeding shall have been commenced and be
pending against or affecting or, to the best knowledge of the Company and the
Subsidiaries, threatened against, the Company or any of the Subsidiaries before
any court or arbitrator or any governmental body, agency or official that, if
adversely determined, could reasonably be expected to result in a Material
Adverse Effect; and no stop order shall have been issued by the Commission or
any governmental agency of any jurisdiction referred to in Section 5(g)
preventing the use of the Offering Memorandum, or any amendment or supplement
thereto, or which could reasonably be expected to have a Material Adverse
Effect.
e. Since the dates as of which information is given in the
Offering Memorandum and other than as set forth in the Offering Memorandum, (i)
there has not been, singly or in the aggregate, any material adverse change, or
any development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the assets, liabilities, results of
operation, management, condition (financial or other), prospects, properties,
business or net worth of the Company, the Subsidiaries and the Acquisition
Entities, taken as a whole (each a "MATERIAL ADVERSE CHANGE"), or any material
change in the long-term debt, or material increase in the short-term debt, from
that set forth in the Offering Memorandum; (ii) no dividend or distribution of
any kind shall have been declared, paid or made by the Company on any class of
its capital stock; (iii) the Company, the Subsidiaries and the Acquisition
Entities shall not have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the
Company, the Subsidiaries and the Acquisition Entities, taken as a whole, and
that are required to be disclosed on a balance sheet or notes thereto in
accordance with generally accepted accounting principles and are not disclosed
on the latest balance sheet or notes thereto included in the Offering
Memorandum.
f. The Initial Purchasers shall have received a certificate,
dated the Closing Date, signed on behalf of the Company by (i) Robert F.X.
Sillerman, Executive Chairman, (ii) Howard J. Tytel, General Counsel, Secretary
and Executive Vice President, and (iii) Thomas P. Benson, Vice President and
Chief Financial Officer, in each case of the Company, confirming that (A) such
officers, have participated in
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<PAGE>
conferences with other officers and representatives of the Company and the
Subsidiaries, representatives of the independent public accountants of the
Company and the Subsidiaries and representatives of counsel to the Company and
the Subsidiaries at which the contents of the Offering Memorandum and related
matters were discussed and (B) the matters set forth in paragraphs (b), (d) and
(e) and the second sentence of paragraph (c) of this Section 7 are true and
correct as of the Closing Date.
g. All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the Notes, the
Subsidiary Guarantees, the Indenture, the Registration Rights Agreement, the
Offering Memorandum and all other legal matters relating to this Agreement and
the transactions contemplated hereby including, without limitation, the Pending
Acquisitions, the Commitment Letter, the New Credit Agreement and the Consent
Solicitations, shall be satisfactory in all material respects to counsel for
the Initial Purchasers, and the Company and the Subsidiaries shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
h. Baker & McKenzie, counsel for the Company and the
Subsidiaries, shall have furnished to the Initial Purchasers its written
opinion, as counsel to the Company and the Subsidiaries, addressed to the
Initial Purchasers and dated the Closing Date, in form and substance reasonably
satisfactory to the Initial Purchasers, to the effect that:
1. the Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Offering Memorandum, and is duly registered and qualified to conduct
its business and is in good standing, in each jurisdiction or place
where the nature of its business requires such registration or
qualification, except where the failure to be so qualified would not
have a Material Adverse Effect;
2. all of the issued shares of capital stock of the
Company have been duly authorized, are validly issued, fully paid and
nonassessable;
3. each Subsidiary is a corporation duly organized,
validly existing and in good standing in the jurisdiction of its
incorporation, with full corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
the Offering Memorandum, and is duly registered and qualified to
conduct its business and is in good standing, in each jurisdiction or
place where the nature of its business requires such registration or
qualification, except where the failure to be so qualified would not
have a Material Adverse Effect;
4. all of the outstanding shares of capital stock of
each of the Subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and free of any preemptive or similar
rights, and are owned by the Company directly, or indirectly through
one of the other Subsidiaries, to such counsel's knowledge, free and
clear of any lien, adverse claim, security interest or other
encumbrance (except for security interests under the Broadcasting
Credit Agreement and the New Credit Agreement);
5. the Company and each of the Guarantors has full
corporate power and authority to issue, sell and deliver the Initial
Notes to the Initial Purchasers as provided herein and to enter into
this Agreement, the Indenture, the Registration Rights Agreement and
the other Transaction
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<PAGE>
Documents to which they are a party, to carry out all the terms and
provisions hereof and thereof to be carried out by them and to issue,
and deliver the Notes and the Subsidiary Guarantees, as applicable, as
provided herein and therein;
6. this Agreement has been duly authorized, validly
executed and delivered by the Company and each Subsidiary and
constitutes the legal, valid and binding agreement of the Company and
each of the Subsidiaries (assuming it is a legal, valid and binding
agreement of the Initial Purchasers), enforceable against the Company
and each Subsidiary in accordance with its terms except to the extent
that: (i) the same may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other laws now or
hereafter in effect relating to creditors' rights generally or by
general principles of equity whether asserted in an action at law or
in equity; and (ii) rights to indemnity and contribution hereunder may
be limited by state or federal securities laws;
7. the execution and delivery of the Registration
Rights Agreement have been duly authorized by the Company and each of
the Guarantors and the Registration Rights Agreement has been duly
executed and delivered by the Company and each of the Guarantors and
is the legal, valid and binding agreement of the Company and each
Guarantor (assuming it is a legal, valid and binding agreement of the
Initial Purchasers), enforceable against the Company and each
Guarantor in accordance with its terms except to the extent that: (i)
the same may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other laws now or hereafter in
effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in
equity; and (ii) rights to indemnity and contribution hereunder may be
limited by state or federal securities laws;
8. the execution and delivery of the Indenture have
been duly authorized by the Company and each of the Guarantors and the
Indenture has been duly executed and delivered by the Company and each
Guarantor and is the legal, valid and binding agreement of the Company
and each of the Guarantors (assuming it is a legal, valid and binding
agreement of the Trustee), enforceable against the Company and each
Guarantor in accordance with its terms except to the extent that: (i)
the same may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or other laws now or hereafter in
effect relating to creditors' rights generally or by general
principles of equity whether asserted in an action at law or in
equity; and (ii) rights to indemnity and contribution hereunder may be
limited by state or federal securities laws;
9. the Initial Notes have been duly authorized,
executed, issued and delivered by the Company and, assuming due
authentication by the Trustee, are legal, valid and binding
obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms
except to the extent that: (i) the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
laws now or hereafter in effect relating to creditors' rights
generally or by general principles of equity whether asserted in an
action at law or in equity; and (ii) rights to indemnity and
contribution hereunder may be limited by state or federal securities
laws;
10. the New Notes have been duly authorized by the
Company, and, when duly executed, authenticated, issued and delivered
by the Company, will be validly issued and outstanding, and will
constitute the legal, valid and binding obligations of the Company,
entitled to the benefits
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<PAGE>
of the Indenture and enforceable against the Company in accordance
with their terms except to the extent that: (i) the same may be
limited by bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other laws now or hereafter in effect
relating to creditors' rights generally or by general principles of
equity whether asserted in an action at law or in equity; and (ii)
rights to indemnity and contribution hereunder may be limited by state
or federal securities laws;
11. the Subsidiary Guarantees endorsed on the
Initial Notes have been duly authorized, executed, issued and
delivered by the Guarantors and are the legal, valid and binding
obligations of each of the Guarantors, entitled to the benefits of the
Indenture and enforceable against the Guarantors in accordance with
their terms except to the extent that: (i) the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other laws now or hereafter in effect relating to
creditors' rights generally or by general principles of equity whether
asserted in an action at law or in equity; and (ii) rights to
indemnity and contribution hereunder may be limited by state or
federal securities laws;
12. the Subsidiary Guarantees to be endorsed on the
New Notes have been duly authorized by the Guarantors and, when duly
executed, authenticated, issued and delivered by each of the
Guarantors and when the New Notes have been duly executed,
authenticated, issued and delivered, will be validly issued and
outstanding, and will constitute the legal, valid and binding
obligations of each of the Guarantors, entitled to the benefits of the
Indenture and enforceable against the Guarantors in accordance with
their terms except to the extent that: (i) the same may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other laws now or hereafter in effect relating to
creditors' rights generally or by general principles of equity whether
asserted in an action at law or in equity; and (ii) rights to
indemnity and contribution hereunder may be limited by state or
federal securities laws;
13. the execution and delivery of each of the other
Transaction Documents to which the Company or any Subsidiary is a
party have been duly authorized by the Company and each Subsidiary
party thereto and each of such other Transaction Documents which has
been executed prior to or on the Closing Date has been duly executed
and delivered by the Company and each Subsidiary party thereto and is
the legal, valid and binding agreement of the Company and each
Subsidiary party thereto (assuming it is a legal, valid and binding
agreement of the other parties thereto), enforceable against the
Company and each Subsidiary party thereto in accordance with its terms
except to the extent that: (i) the same may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
laws now or hereafter in effect relating to creditors' rights
generally or by general principles of equity whether asserted in an
action at law or in equity; and (ii) rights to indemnity and
contribution hereunder may be limited by state or federal securities
laws;
14. the descriptions of the Indenture, the Initial
Notes, the Subsidiary Guarantees, the Registration Rights Agreement
and the other Transaction Documents in the Offering Memorandum conform
in all material respects to the terms thereof;
15. the statements set forth under the heading
"Description of the Notes" in the Offering Memorandum, insofar as such
statements purport to summarize certain provisions of the Initial
Notes, provide a fair summary of such provisions; and the statements
in the Offering Memorandum, insofar as they are descriptions of
contracts, agreements or other legal documents, or
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refer to statements of law or legal conclusions, are accurate in all
material respects and present fairly the information shown;
16. the statements set forth under the heading
"Description of Other Debt" in the Offering Memorandum, insofar as
such statements purport to summarize certain provisions of the
outstanding indebtedness of the Company, provide a fair summary of
such provisions;
17. to the best knowledge of such counsel, no legal
or governmental proceedings are pending to which the Company or any of
the Subsidiaries is a party or to which the property of the Company or
any of the Subsidiaries is subject that would be required to be
described in a registration statement on Form S-1 under the Securities
Act that is not described in the Offering Memorandum, and, to the best
knowledge of such counsel, no such proceedings have been threatened
against the Company or any of the Subsidiaries or with respect to any
of their respective properties; and, to the best knowledge of such
counsel, no contract or other document would be required to be
described in a registration statement on Form S-1 under the Securities
Act that is not described in the Offering Memorandum;
18. except as disclosed in the Offering Memorandum,
the execution, delivery and performance of this Agreement, the
execution, delivery and performance of the other Transaction Documents
to be entered into on or before the Closing Date by the Company and
the Subsidiaries, and the consummation by the Company and the
Subsidiaries of the transactions contemplated hereby and thereby will
not (A) require any consent, approval, authorization or other order
(which has not been obtained) of any court, regulatory body,
administrative agency or other governmental body, except such as may
be required under the Securities Act, the Exchange Act, the Trust
Indenture Act, securities regulatory bodies (including self-regulatory
bodies), securities exchanges or the securities or Blue Sky laws of
the various states and the Hart-Scott-Rodino Anti-Trust Improvement
Act of 1976 with respect to the Pending Acquisitions; (B) conflict
with or constitute a breach of any of the terms or provisions of, or a
default under, the charter or by-laws of the Company or any of the
Subsidiaries; (C) to the best knowledge of such counsel, require any
consent or approval (which has not been obtained) of the parties to,
or conflict with or constitute a breach of any of the terms or
provisions of, or a default under, any agreement or other instrument
to which the Company or any of the Subsidiaries is a party or by which
the Company or any of the Subsidiaries or their respective property is
bound; (D) to the best knowledge of such counsel, violate or conflict
with any laws or administrative regulations, rulings of court or
decrees applicable to the Company, any of the Subsidiaries or their
respective property; or (E) to the best knowledge of such counsel,
result in the creation or imposition of any lien (except pursuant to
the New Credit Agreement) on any asset of the Company or any of the
Subsidiaries, except, in the case of (A), (C), (D) or (E) above, such
as would not, either singly or in the aggregate, have a Material
Adverse Effect;
19. neither the Company nor any of the Subsidiaries
is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended, or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended;
20. assuming that the representations and warranties
of the Initial Purchasers contained in Section 4 hereof are true,
correct and complete and that the Company, the Subsidiaries
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<PAGE>
and Initial Purchasers comply with their respective covenants in
Sections 4 and 5 hereof, (A) registration under the Securities Act of
the Initial Notes or qualification of the Indenture under the Trust
Indenture Act is not required in connection with the offer and sale of
the Initial Notes to the Initial Purchasers in the manner contemplated
by the Offering Memorandum and this Agreement, and (B) initial resales
of the Initial Notes by the Initial Purchasers on the terms and in the
manner set forth in the Offering Memorandum and Section 4 hereof are
exempt from the registration requirements of the Securities Act;
21. no securities of the same class (within the
meaning of Rule 144A(d)(3) under the Securities Act) as the Initial
Notes are listed on any national securities exchange registered under
Section 6 of the Exchange Act or quoted on an automated inter-dealer
quotation system; and
22. the issuance or sale of the Notes, the issuance
of the Subsidiary Guarantees and the application by the Company of the
net proceeds thereof as set forth in the Offering Memorandum will not
violate Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
In addition, such counsel shall state that
it has participated in conferences with officers and other
representatives of the Company and the Subsidiaries, representatives
of the independent public accountants of the Company and the
Subsidiaries and representatives of and counsel for the Initial
Purchasers at which the contents of the Offering Memorandum and
related matters were discussed and, although such counsel has not
undertaken to investigate or verify independently, and does not assume
any responsibility for, the accuracy, completeness or fairness of the
statements contained in the Offering Memorandum, on the basis of the
foregoing, no information has come to the attention of such counsel
that causes such counsel to believe that the Offering Memorandum
(except as to (a) financial statements, including the notes thereto,
(b) statistical data included in the Offering Memorandum and (c) other
financial and accounting data (including, without limitation, the pro
forma financial information), in each case, included therein or
omitted therefrom, as to which no belief need be expressed), as of its
date or the Closing Date, contained or contains an untrue statement of
a material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may
state that its opinion is limited to matters governed by the federal
laws of the United States of America (other than the Communications
Laws), the General Corporation Law of the State of Delaware and the
laws of the State of New York.
i. Baker & McKenzie, counsel for Broadcasting, shall have
furnished to the Initial Purchasers its written opinion, as counsel to
Broadcasting, addressed to the Initial Purchasers and dated the Closing Date,
in form and substance reasonably satisfactory to the Initial Purchasers, to the
effect that except as disclosed in the Offering Memorandum, the execution,
delivery and performance of this Agreement by the Company and the Subsidiaries,
the execution, delivery and performance of the other Transaction Documents to
be entered into by the Company and the Subsidiaries on or before the Closing
Date, and the consummation by the Company and the Subsidiaries of the
transactions contemplated hereby or thereby will not (A) require Broadcasting
to obtain any consent, approval, authorization or other order (which has not
been obtained) of any court, regulatory body, administrative agency or other
governmental body, except such as may be required
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<PAGE>
under the Securities Act, the Exchange Act, the Trust Indenture Act, securities
regulatory bodies (including self-regulatory bodies), securities exchanges or
the securities or Blue Sky laws of the various states; (B) conflict with or
constitute a breach of any of the terms or provisions of, or a default under,
the charter or by-laws of Broadcasting; (C) to the best knowledge of such
counsel, require any consent or approval (which has not been obtained) of the
parties to, or conflict with or constitute a breach of any of the terms or
provisions of, or a default under, any agreement or other instrument to which
Broadcasting is a party or by which Broadcasting or its respective property is
bound and which is identified on a schedule; (D) to the best knowledge of such
counsel, violate or conflict with any laws or administrative regulations,
rulings of court or decrees applicable to Broadcasting or its respective
property (other than FCC Communications Laws); or (E) to the best knowledge of
such counsel, result in the creation or imposition of any lien on any asset of
Broadcasting, except, in the case of (A), (C), (D) or (E) above, such as would
not, either singly or in the aggregate, have a material adverse effect or a
prospective material adverse effect on the assets, liabilities, results of
operation, management, condition (financial or other), prospects, properties,
business or net worth of Broadcasting and its subsidiaries, taken as a whole.
j. The Initial Purchasers shall have received on the Closing
Date an opinion of Latham & Watkins, counsel for the Initial Purchasers, dated
the Closing Date and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Initial Purchasers.
k. With respect to the letters of Ernst & Young LLP, Arthur
Andersen LLP and Price Waterhouse LLP delivered to the Initial Purchasers
concurrently with the execution of this Agreement (the "INITIAL LETTERS"), the
Company shall have furnished to the Initial Purchasers letters (as used in this
paragraph, the "BRING-DOWN LETTERS") of such accountants, addressed to the
Initial Purchasers and dated such Closing Date (i) confirming that they are
independent public accountants under the guidelines of the American Institute
of Certified Public Accountants, (ii) stating, as of the date of the bring-down
letters (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given in
the Offering Memorandum, as of a date not more than two days prior to the date
of the bring-down letters), the conclusions and findings of such firm with
respect to the financial information and other matters covered by the initial
letters and (iii) confirming in all material respects the conclusions and
findings set forth in the initial letters.
l. The Company, the Guarantors and the Trustee shall have
entered into the Indenture and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
m. The Company, the Guarantors and the Initial Purchasers
shall have entered into the Registration Rights Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed, thereof.
n. The Company and each other party thereto shall have
entered into the Commitment Letter (the form and substance of which shall be
reasonably acceptable to the Initial Purchasers) with respect to the New Credit
Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof and of all other documents and agreements
entered into in connection therewith.
o. The Company shall have entered into each of the
Transaction Documents, the form and substance of each of which shall be
reasonably acceptable to the Initial Purchasers (provided that any Transaction
Document that was entered into and delivered to each of the Initial Purchasers
and their counsel prior to the date of this Agreement shall be deemed
acceptable to the Initial Purchasers in form and substance
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<PAGE>
for purposes of this Section 7), and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof and of all other documents and
agreements entered into in connection therewith. There shall exist at and as of
the Closing Date, after giving effect to the transactions contemplated by this
Agreement and the other Transaction Documents, no conditions that would
constitute a default (or an event that with notice or the lapse of time, or
both, would constitute a default other than the automatic extension of the
closing of the BGP Acquisition (as defined in the Offering Memorandum)
contemplated in the BGP Agreement (as defined in the Offering Memorandum))
under any of the other Transaction Documents or that would have a Material
Adverse Effect on the Company's ability to consummate the Pending Acquisitions
as described in the Offering Memorandum. Each Transaction Document shall be in
full force and effect.
p. The Company shall have paid cash for, upon the terms of
and subject to the Consent Solicitations, any and all of the consents delivered
by the holders of the Old Notes and the Old Preferred pursuant to the terms of
the Consent Solicitations.
q. Broadcasting, the guarantors of the Old Notes and the
trustee relating to the Old Notes shall have entered into the Supplemental
Indenture and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
r. Broadcasting shall have executed and filed the Amended
Series E Certificate and the Initial Purchasers shall have received copies
thereof certified as filed with the Secretary of State of the State of
Delaware.
s. Broadcasting shall have received and delivered to each of
the Initial Purchasers and their counsel the written consent of the lenders
under the Broadcasting Credit Agreement to the Spin-Off, the Offering and any
related transactions.
t. The Company shall have furnished to the Initial Purchasers
a certificate, dated the Closing Date, of its Vice President and Chief
Financial Officer as to the solvency of the Company and the Subsidiaries
following consummation of the transactions contemplated hereby.
u. (i) None of the Company, any of the Subsidiaries or any of
the Acquisition Entities shall have sustained since the date of the latest
audited financial statements included in the Offering Memorandum losses or
interferences with their businesses, taken as a whole, from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Offering Memorandum or (ii) since such date there
shall not have been any change in the capital stock or long-term debt of the
Company, any of the Subsidiaries or any of the Acquisition Entities or any
change, or any development involving a prospective change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company, the Subsidiaries and the Acquisition
Entities, taken as a whole, otherwise than as set forth or contemplated in the
Offering Memorandum, the effect of which, in any such case described in clause
(i) or (ii), is, in the reasonable judgment of the Initial Purchasers, so
material and adverse as to make it impracticable or inadvisable to proceed with
the offering or the delivery of the Initial Notes being delivered on the
Closing Date on the terms and in the manner contemplated herein and in the
Offering Memorandum.
v. Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or The Nasdaq Stock Market's National
Market or in the over-the-counter market shall have been suspended or
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<PAGE>
materially limited, or minimum prices shall have been established on such
exchange by the Commission, or by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking moratorium shall
have been declared by federal or state authorities, (iii) the United States
shall have become engaged in hostilities, there shall have been an escalation
in hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv) there
shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it, in the
reasonable judgment of the Initial Purchasers, impracticable or inadvisable to
proceed with the offering or delivery of the Initial Notes being delivered on
the Closing Date on the terms and in the manner contemplated herein and in the
Offering Memorandum.
w. Subsequent to the execution and delivery of this
Agreement, (i) no downgrading shall have occurred in the rating accorded the
Initial Notes or any other debt security of the Company by a nationally
recognized statistical rating organization, as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Initial Notes or any other debt security of the Company.
x. There shall exist at and as of the Closing Date no
conditions that would constitute a default (or an event that with notice or the
lapse of time, or both, would constitute a default) under the Broadcasting
Credit Agreement or under terms of the New Credit Agreement as set forth in the
Commitment Letter. On the Closing Date, the Commitment Letter shall be in full
force and effect and shall not have been modified or the Company shall have
entered into the New Credit Agreement which shall be in full force and effect
and shall not have been modified.
y. Latham & Watkins shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon
the matters referred to in this Section 7 and in order to evidence the
accuracy, completeness or satisfaction in all material respects of any of the
representations, warranties or conditions herein contained.
z. Prior to the Closing Date, the Company and the
Subsidiaries shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may
reasonably request.
All such opinions, certificates, letters, schedules,
documents or instruments delivered pursuant to this Agreement will comply with
the provisions hereof only if they are reasonably satisfactory in all material
respects to the Initial Purchasers and counsel for the Initial Purchasers.
8. Indemnification and Contribution.
a. The Company and the Subsidiaries hereby jointly and
severally agree to indemnify and hold harmless each Initial Purchaser, its
officers and employees and each person, if any, who controls any Initial
Purchaser within the meaning of the Securities Act, from and against any loss,
claim, damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Notes), to which that Initial Purchaser,
officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue
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<PAGE>
statement of a material fact contained in the Preliminary Offering
Memorandum or the Offering Memorandum or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state in any Preliminary Offering
Memorandum or the Offering Memorandum or in any amendment or supplement thereto
any material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, the Company and the
Subsidiaries will not be liable in any such case to the extent that any such
loss, claim, damage, or liability is finally judicially determined to arise out
of or be based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such Preliminary Offering Memorandum of
the Offering Memorandum or in any amendment or supplement thereto, or any
Application in reliance upon and in conformity with written information
relating to the Initial Purchasers furnished to the Company by the Initial
Purchasers specifically for use therein; and provided, further, that the
Company and the Subsidiaries will not be liable to the Initial Purchasers or
any person controlling the Initial Purchasers with respect to any such untrue
statement or omission made in any Preliminary Offering Memorandum which is
completely corrected in the Offering Memorandum or any amendment or supplement
thereto if (x) it is finally judicially determined that the person asserting
any such loss, claim, damage or liability purchased the Initial Notes from the
Initial Purchasers in reliance upon the Preliminary Offering Memorandum but was
not sent or given a copy of the Offering Memorandum (as amended or
supplemented) at or prior to the written confirmation of the sale of such
Initial Notes to such person and that the disclosure in the Offering Memorandum
completely corrected such untrue statement or omission made in any Preliminary
Offering Memorandum and (y) the Company notified the Initial Purchasers to send
the Offering Memorandum to such person, unless such failure to deliver the
Offering Memorandum was a result of noncompliance by the Company with Section 5
of this Agreement. The Company and the Subsidiaries shall reimburse each
Initial Purchaser and each such officer, employee or controlling person
promptly upon demand for any legal or other expenses reasonably incurred by
that Initial Purchaser, officer, employee or controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which the Company or any
Subsidiary may otherwise have to any Initial Purchaser or to any officer,
employee or controlling person of that Initial Purchaser.
b. Each Initial Purchaser, severally and not jointly, shall
indemnify and hold harmless the Company, the Subsidiaries, their officers and
employees, each of their directors, and each person, if any, who controls the
Company or any Subsidiary within the meaning of the Securities Act or the
Exchange Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
Guarantor, director, officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Offering Memorandum or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state in any Preliminary Offering
Memorandum or the Offering Memorandum, or in any amendment or supplement
thereto, any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning such Initial Purchaser furnished to the Company by or on behalf of
that Initial Purchaser specifically for inclusion therein, and shall reimburse
the Company, the Subsidiaries, and any such director, officer or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by the Company, the Subsidiaries, or any such director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing indemnity agreement is in addition to any liability
which any Initial Purchaser may otherwise have to the indemnified parties.
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<PAGE>
c. Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under this
Section 8. If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in connection
with the defense thereof other than reasonable costs of investigation;
provided, however, that the Initial Purchasers shall have the right to employ
counsel to represent jointly the Initial Purchasers and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Initial Purchasers against the Company or any Subsidiary under this Section 8
if, in the reasonable judgment of the Initial Purchasers, it is advisable for
the Initial Purchasers, officers, employees and controlling persons to be
jointly represented by separate counsel if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it that are different from or additional to
those available to the indemnifying party, and in that event the fees and
expenses of such single separate counsel shall be paid by the Company. No
indemnifying party shall (i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably withheld), settle
or compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with the consent of the indemnifying party or if
there be a final judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
d. If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section 8(a) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Subsidiaries on the one hand and the Initial
Purchasers on the other from the offering of the Initial Notes or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Subsidiaries on the one hand and the Initial Purchasers on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the Subsidiaries
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<PAGE>
on the one hand and the Initial Purchasers on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Initial Notes purchased under this Agreement (before
deducting expenses) received by the Company, on the one hand, and the total
discounts and commissions received by the Initial Purchasers with respect to
the Initial Notes purchased under this Agreement, on the other hand, bear to
the total gross proceeds from the offering of the Initial Notes under this
Agreement, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company and the Subsidiaries or the Initial Purchasers, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, the Subsidiaries
and the Initial Purchasers agree that it would not be just and equitable if
contributions pursuant to this Section 8(d) were to be determined by pro rata
allocation (even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section shall be deemed to
include, for purposes of this Section 8(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 8(d), no Initial Purchaser shall be required to contribute any amount
in excess of the amount by which the total price at which the Initial Notes
purchased by it was resold to Eligible Purchasers exceeds the amount of any
damages which such Initial Purchaser has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Initial
Purchasers' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
e. The Initial Purchasers severally confirm and the Company
acknowledges that the stabilization legend on page iii and the information set
forth in the 1st through the 9th and the 13th paragraphs under the caption
"Plan of Distribution" in the Offering Memorandum constitute the only
information concerning such Initial Purchasers furnished in writing to the
Company by or on behalf of the Initial Purchasers specifically for inclusion in
the Offering Memorandum.
9. Survival Clause. The respective representations,
warranties, agreements, covenants, indemnities and other statements of the
Company, the Subsidiaries, their officers and the Initial Purchasers set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement shall remain in full force and effect, regardless of (i) any
investigation made by or on behalf of the Company, the Subsidiaries, any of
their officers or directors, the Initial Purchasers or any controlling person
referred to in Section 8 hereof and (ii) delivery of and payment for the
Initial Notes. The respective agreements, covenants, indemnities and other
statements set forth in Sections 5 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
10. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchasers by notice to the Company given prior
to the Closing Date in the event that the Company or the Subsidiaries shall
have failed, refused or been unable to perform all obligations and satisfy all
conditions on its part to be performed or satisfied hereunder at or prior
thereto or, if at or prior to the Closing Date:
- 29 -
<PAGE>
i) the Company, any Subsidiary or any Acquisition Entity
shall have sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding, which loss or interference, in the sole reasonable
judgment of the Initial Purchasers, has had or has a Material Adverse Effect or
there shall have been, in the sole reasonable judgment of the Initial
Purchasers, any Material Adverse Change, except in each case as described in or
contemplated by the Offering Memorandum (exclusive of any amendment or
supplement thereto);
ii) trading in securities generally on the New York Stock
Exchange or The Nasdaq Stock Market's National Market or in the
over-the-counter market shall have been suspended or materially limited, or
minimum prices shall have been established on such exchange by the Commission,
or by such exchange or by any other regulatory body or governmental authority
having jurisdiction;
iii) a banking moratorium shall have been declared by federal
or state authorities;
iv) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been a declaration of a national emergency or
war by the United States;
v) (a) a downgrading shall have occurred in the rating
accorded the Initial Notes or any other debt security of the Company by a
nationally recognized statistical rating organization, as that term is defined
by the Commission for purposes of Rule 436(g)(2) under the Securities Act, or
(b) any such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Initial Notes or any other debt security of the Company; or
vi) there shall have occurred such a material adverse change
in general economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States shall be
such) as to make it, in the reasonable judgment of the Initial Purchasers,
impracticable or inadvisable to proceed with the offering or delivery of the
Initial Notes being delivered on the Closing Date on the terms and in the
manner contemplated herein and in the Offering Memorandum.
(b) Termination of this Agreement pursuant to this Section 10
shall be without liability of any party to any other party except as provided
in Section 9 hereof.
11. Notices. All communications hereunder shall be in writing
and, if sent to the Initial Purchasers, shall be mailed or delivered or
telecopied and confirmed in writing to Lehman Brothers Inc., 3 World Financial
Center, 200 Vesey Street, New York, New York 10285, Attention: Corporate
Finance Department, with a copy to Latham & Watkins, 885 Third Avenue, New
York, New York 10022, Attention: Kirk A. Davenport; if sent to the Company or
the Subsidiaries, shall be mailed or delivered or telecopied and confirmed in
writing to the Company at 650 Madison Avenue, New York, New York 10022,
Attention: Howard J. Tytel, Esq., with a copy to Baker & McKenzie, 805 Third
Avenue, New York, New York 10022, Attention: Howard M. Berkower, Esq.
12. Successors. This Agreement shall inure to the benefit of
and be binding upon the Initial Purchasers, the Company and their respective
successors and legal representatives, and nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained;
- 30 -
<PAGE>
this Agreement and all conditions and provisions hereof being intended to be
and being for the sole and exclusive benefit of such persons and for the
benefit of no other person except that (i) the indemnities of the Company and
the Subsidiaries contained in Section 8 of this Agreement shall also be for the
benefit of any person or persons who control the Initial Purchasers within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
and (ii) the indemnities of the Initial Purchasers contained in Section 8 of
this Agreement shall also be for the benefit of any person or persons who
control the Company or the Subsidiaries within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act. No purchaser of Initial Notes
from the Initial Purchasers will be deemed a successor because of such
purchase.
13. Applicable Law. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
14. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
[Purchase Agreement signature pages follow]
- 31 -
<PAGE>
If the foregoing correctly sets forth our understanding,
please indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement between the
Company, the Subsidiaries and the Initial Purchasers.
Very truly yours,
SFX ENTERTAINMENT, INC.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: General Counsel, Executive Vice President
and Secretary
ATLANTA CONCERTS, INC.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
ARDEE FESTIVALS N.J., INC.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
ARDEE PRODUCTIONS, LTD.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
BEACH CONCERTS, INC.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
- 32 -
<PAGE>
BGP ACQUISITION, LLC
BY: SFX ENTERTAINMENT, INC., its managing member
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: General Counsel, Executive Vice President
and Secretary
BROADWAY CONCERTS, INC.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
CONNECTICUT AMPHITHEATER DEVELOPMENT CORP.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
CONNECTICUT CONCERTS, INCORPORATED
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
CONNECTICUT PERFORMING ARTS, INC.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
- 33 -
<PAGE>
CONNECTICUT PERFORMING ARTS PARTNERS
By: NOC, INC., its general partner
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
CONN TICKETING COMPANY
By: NORTHEAST TICKETING COMPANY, its general partner
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
CONTEMPORARY GROUP ACQUISITION CORP.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
DEER CREEK AMPHITHEATER CONCERTS, INC.
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
DEER CREEK AMPHITHEATER CONCERTS, LP
By: DEER CREEK AMPHITHEATER CONCERTS, INC., its
general partner
By: /s/ Howard J. Tytel
----------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
- 34 -
<PAGE>
DELSENER/SLATER ENTERPRISES, LTD.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
DUMB DEAL, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
EXIT 116 REVISITED, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
FPI CONCERTS, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
IN HOUSE TICKETS, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
IRVING PLAZA CONCERTS, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Agent
- 35 -
<PAGE>
MURAT CENTER CONCERTS, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
MURAT CENTER CONCERTS, LP
By: MURAT CENTER CONCERTS, INC., its general partner
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
NOC, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
NORTHEAST TICKETING COMPANY
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
POLARIS AMPHITHEATER CONCERTS, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
- 36 -
<PAGE>
QN CORP.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
SFX BROADCASTING OF THE MIDWEST, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
SFX CONCERTS, INC.
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
SFX NETWORK GROUP, LLC
By: SFX ENTERTAINMENT, INC., its managing member
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: General Counsel, Executive Vice President
and Secretary
SOUTHEAST TICKETING COMPANY
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
- 37 -
<PAGE>
SUNSHINE CONCERTS, LLC
By: SFX BROADCASTING OF THE MIDWEST, INC., its
managing member
By: /s/ Howard J. Tytel
--------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
SUNSHINE DESIGNS, INC.
By: /s/ Howard J. Tytel
-------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
SUNSHINE DESIGNS, LP
By: SUNSHINE DESIGNS, INC., its general partner
By: /s/ Howard J. Tytel
-------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
SUNTEX ACQUISITION, INC.
By: /s/ Howard J. Tytel
-------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
SUNTEX ACQUISITION, LP
By: SUNTEX ACQUISITION, INC., its general partner
By: /s/ Howard J. Tytel
-------------------------------------------------
Name: Howard J. Tytel
Title: Executive Vice President and Secretary
- 37 -
<PAGE>
WESTBURY MUSIC FAIR, LLC
By: SFX ENTERTAINMENT, INC., its managing member
By: /s/ Howard J. Tytel
-------------------------------------------------
Name: Howard J. Tytel
Title: General Counsel, Executive Vice President
and Secretary
- 39 -
<PAGE>
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
LEHMAN BROTHERS INC.
By: /s/ E.B. McGeough
------------------------------
Name: Edward B. McGeough
Title:
GOLDMAN, SACHS & CO.
By: /s/ Goldman, Sachs & Co.
------------------------------
(Goldman, Sachs & Co.)
BNY CAPITAL MARKETS, INC.
By: /s/ John Roy .
------------------------------
Name: John Roy
Title: Managing Director
ING BARINGS
By: /s/ Roy Furman
------------------------------
Name: Roy Furman
Title: Vice Chairman
- 40 -
<PAGE>
SCHEDULE I
(SCHEDULE OF SUBSIDIARIES AND GUARANTORS)
Atlanta Concerts, Inc.
Ardee Festivals N.J., Inc.
Ardee Productions, Ltd.
Beach Concerts, Inc.
BGP Acquisition, LLC
Broadway Concerts, Inc.
Connecticut Amphitheater Development Corp.
Connecticut Concerts, Incorporated
Connecticut Performing Arts, Inc.
Connecticut Performing Arts Partners
Conn Ticketing Company
Contemporary Group Acquisition Corp.
Deer Creek Amphitheater Concerts, Inc.
Deer Creek Amphitheater Concerts, LP
Delsener/Slater Enterprises, Ltd.
Dumb Deal, Inc.
Exit 116 Revisited, Inc.
FPI Concerts, Inc.
In House Tickets, Inc.
Irving Plaza Concerts, Inc.
Murat Center Concerts, Inc.
Murat Center Concerts, LP
NOC, Inc.
Northeast Ticketing Company
Polaris Amphitheater Concerts, Inc.
QN Corp.
SFX Broadcasting of the Midwest, Inc.
SFX Concerts, Inc.
SFX Network Group, LLC
Southeast Ticketing Company
Sunshine Concerts, LLC
Sunshine Designs, Inc.
Sunshine Designs, LP
Suntex Acquisition, Inc.
Suntex Acquisition, LP
Westbury Music Fair, LLC
<PAGE>
SCHEDULE II
<TABLE>
<CAPTION>
<S> <C>
PRINCIPAL AMOUNT OF NOTES
INITIAL PURCHASER TO BE PURCHASED
Lehman Brothers Inc. $175,000,000
Goldman, Sachs & Co. 105,000,000
BNY Capital Markets, Inc. 35,000,000
ING Barings 35,000,000
============
TOTAL $350,000,000
</TABLE>
