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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: February 21, 1996
JACOR COMMUNICATIONS, INC.
OHIO
(State or Other Jurisdiction of Incorporation)
0-12404 31-0978313
(Commission File No.) (IRS Employer Identification No.)
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
(513) 621-1300
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On February 21, 1995, Jacor Communications, Inc. (the "Company")
entered into an agreement with the stockholders of Noble Broadcast Group, Inc.
("Noble") to acquire all of the outstanding capital stock of Noble. At the
same time, the Company also purchased a warrant, for a purchase price of
approximately $52.8 million, entitling the Company to acquire a 79.1% equity
interest in Noble. Upon consummation of the purchase of the outstanding Noble
capital stock from the Noble stockholders and the exercise of the Company's
warrant, the Company will own 100% of the equity interests in Noble. The
completion of the Company's acquisition of Noble is subject to various
conditions including the receipt of consents from regulatory authorities,
including the approval of the Federal Communications Commission, the Federal
Trade Commission and the Antitrust Division of the U.S. Department of Justice.
Noble owns ten stations serving three of the nation's top 75 markets.
Noble's radio stations serve Denver, Colorado (two AM, and two FM), St. Louis,
Missouri (one AM, two FM) and Toledo, Ohio (one AM, two FM). Pending the
closing of the Company's acquisition of Noble, the Company and Noble have also
entered into local marketing agreements with respect to Noble's radio stations
in St. Louis and Toledo.
On February 21, 1996, a wholly owned subsidiary of the Company also
purchased certain assets from Noble relating to Noble's San Diego, California
operations. As part of Noble's San Diego operations, Noble provided
programming to and sold the air time for two radio stations serving San Diego
(one AM, one FM), which programming and air time will now be provided and sold
by the Company. The Company had previously obtained the necessary approvals
required by the Hart-Scott-Rodino Act.
In addition, another wholly owned subsidiary of the Company provided a
credit facility to Noble. Pursuant to this credit facility, Noble repaid in
full its outstanding indebtedness as of February 21, 1996.
The aggregate value of the above transactions undertaken by the
Company, when fully consummated, will be approximately $152 million. In order
to fund these transactions, the Company has entered into a new $300 million
credit facility (the "1996 Credit Facility") with ten banks, Banque Paribas, as
agent, and each of The First National Bank of Boston and Bank of America
Illinois, as co-agents. The Company's new senior debt consists of two
facilities (the "Facilities"): a $190 million reducing revolving credit
facility ("Revolving A Loans"), and a $110 million reducing revolving credit
facility ("Revolving B Loans"). Both Facilities mature on December 31, 2003.
The Company's indebtedness under these Facilities is collateralized by liens on
substantially all of the assets of the Company and its operating subsidiaries,
by a
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pledge of the operating subsidiaries' stock and by the guarantees of those
operating subsidiaries.
On February 21, 1996, the Revolving A Loans were used to refinance
$45.5 million in previously outstanding Company debt and to fund the Noble
transactions described above. The Revolving B Loans will be used to finance
other acquisitions, stock repurchases and for working capital and other general
corporate purposes.
The commitment under the Revolving A Loans will be reduced by $2.5
million each quarter commencing March 31, 1997 and by increasing quarterly
amounts in each succeeding year. The commitment under the Revolving B Loans
will be reduced by $5 million for each quarter commencing March 31, 1998. In
addition, commencing with the year ending December 31, 1997, the Facilities
will be further reduced by 50% of any Excess Cash Flow (as defined in the 1996
Credit Agreement) on the last day of any fiscal year unless the Company's
leverage ratio is under certain specified levels. With certain exceptions,
principal repayments and reduction of the Facilities are also required in the
event of the sale of assets or issuance of additional equity.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of Businesses Acquired.
The financial statements required to be filed by the Company as part
of this Form 8-K require substantial effort on behalf of the Company and Noble
and have not yet been finalized as of the date of this report. The Company
anticipates that such financial statements will be filed by amendment to this
Form 8-K on or around April 1, 1996 and in no event later than 60 days
hereafter.
(b) Pro Forma Financial Information.
See 7(a) above.
(c) Exhibits
2.1 Stock Purchase and Stock Warrant Redemption Agreement
dated as of February 20, 1996 among the Company,
Prudential Venture Partners II, L.P., Northeast
Ventures, II, John T. Lynch, Frank A. DeFrancesco,
Thomas R. Jiminez, William R. Arbenz, CIHC,
Incorporated, Bankers Life Holding Corporation and
Noble Broadcast Group, Inc. ("Noble") (omitting
exhibits not deemed material or filed separately in
executed form). [Prudential and Northeast are
sometimes referred to hereafter as the "Class A
Shareholders"; Lynch, DeFrancesco, Jiminez and Arbenz
as the "Class B Shareholders"; and CIHC and Bankers
Life as the Warrant Sellers.]
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2.2 Investment Agreement dated as of February 20, 1996
among the Company, Noble and the Class B Shareholders
(omitting exhibits not deemed material).
2.3 Warrant to Purchase Class A Common Stock of Noble
issued to the Company.
2.4 Indemnification and Escrow Agreement dated as of
February 20, 1996 among the Company, Noble, the Class
A Shareholders, the Class B Shareholders, the Warrant
Sellers, The Fifth Third Bank and Conseco, Inc.
2.5 Stock Escrow and Security Agreement dated as of
February 20, 1996 among the Company, Noble, the Class
B Shareholders, Philip H. Banks, as trustee, and The
Fifth Third Bank, as escrow agent (omitting exhibits
not deemed material or filed separately in executed
form).
2.6 Trust Agreement dated as of February 20, 1996 among
the Class B Shareholders and their spouses, and
Philip H. Banks, as trustee.
2.7 Registration Rights Agreement dated as of February
20, 1996 between the Company and Noble.
2.8 Asset Purchase Agreement dated as of February 20,
1996 among Chesapeake Securities, Inc. (a Company
subsidiary), Noble Broadcast of San Diego, Inc.,
Sports Radio, Inc. and Noble Broadcast Center, Inc.
4.1 Credit Agreement dated as of February 20, 1996, among
the Company, the Banks named therein, Banque Paribas,
as Agent, and The First National Bank of Boston and
Bank of America Illinois, as Co-Agents (omitting
exhibits not deemed material or filed separately in
executed form).
4.2 Revolving A Note in favor of Banque Paribas by the
Company dated as of February 20, 1996. (1)
4.3 Revolving B Note in favor of Banque Paribas by the
Company dated as of February 20, 1996. (1)
4.4 Security Agreement dated as of February 20, 1996
among the Company, Banque Paribas, as Agent, for
itself, the Co-Agents and the Banks.
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4.5 Pledge Agreement dated as of February 20,1996 among
the Company, Banque Paribas, as Agent, for itself,
the Co-Agents and the Banks.
4.6 Trademark Security Agreement dated as of February 20,
1996 among the Company, Banque Paribas, as Agent, for
itself, the Co-Agents and the Banks.
4.7 Subsidiary Guaranty dated as of February 20, 1996, by
various Company subsidiaries in favor of Banque
Paribas, as Agent, for itself, the Co-Agents and the
Banks. (2)
4.8 Subsidiary Security Agreement dated as of February
20, 1996, by various Company subsidiaries in favor of
Banque Paribas, as Agent, for itself, the Co-Agents
and the Banks (omitting exhibits not deemed
material). (2)
4.9 Primary Pledge Agreement dated as of February 20,
1996 among Chesapeake Securities, Inc. (a company
subsidiary), Banque Paribas as Agent, for itself, the
Co-Agents and the Banks. (3)
4.10 Secondary Pledge Agreement dated as of February 20,
1996 between the Company and Chesapeake Securities,
Inc. (a Company subsidiary). (4)
4.11 Subsidiary Trademark Agreement dated as of February
20, 1996 among Jacor Broadcasting of Tampa Bay, Inc.,
Jacor Broadcasting of Atlanta, Inc., Jacor
Broadcasting Corporation and Jacor Broadcasting of
Florida, Inc. in favor of Banque Paribas as Agent,
for itself, the Co-Agents and the Banks.
4.12 Deed to Secure Debt and Security Agreement, dated as
of February 20, 1996, by and between Jacor
Broadcasting of Atlanta, Inc. and Banque Paribas, as
Agent.
4.13 Deed of Trust and Security Agreement, dated as of
February 20, 1996, between Jacor Broadcasting of
Colorado, Inc. and the Public Trustee in the County
of Weld and the State of Colorado. (6)
4.14 Open-End Mortgage, Assignment of Rents and Leases and
Security Agreement, dated February 20, 1996, by and
between Jacor Broadcasting Corporation and Banque
Paribas, as Agent. (7)
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4.15 Open-End Mortgage, Assignment of Rents and Leases and
Security Agreement dated as of February 20, 1996, by
Jacor Broadcasting of Tampa Bay, Inc. in favor of
Banque Paribas, as Agent. (8)
4.16 Deed of Trust and Security Agreement, Assignment of
Leases, Rents and Profits, Financing Statement and
Fixture Filing made by Chesapeake Securities, Inc.
for the Benefit of Banque Paribas as Agent dated as
of February 20, 1996.
4.17 Second Consolidated Amended and Restated Intercompany
Demand Note issued to the Company by various Company
subsidiaries dated as of February 20, 1996. (5)
4.18 Second Amended and Restated Intercompany Security
Agreement and Financing Statement dated as of
February 20, 1996 by various Company subsidiaries in
favor of the Company (omitting exhibits not deemed
material). (2)
10.1 Credit Agreement dated as of February 20, 1996 among
Broadcast Finance, Inc. (a Company subsidiary), Noble
Broadcast Group, Inc. and Noble Broadcast Holdings,
Inc. (omitting exhibits not deemed material or filed
separately in executed form).
10.2 Subsidiary Guaranty dated as of February 20, 1996 in
favor of Broadcast Finance, Inc. by Noble Broadcast
Center, Inc., Noble Broadcast of Colorado, Inc.,
Noble Broadcast of St. Louis, Inc., Noble Broadcast
of Toledo, Inc., Nova Marketing Group, Inc., Noble
Broadcast Licenses, Inc., Noble Broadcast of San
Diego, Inc., Sports Radio, Inc. and Sports Radio
Broadcasting, Inc.
10.3 Term Note in the amount of $40,000,000 by Noble
Broadcast Holdings, Inc. in favor of Broadcast
Finance, Inc. dated as of February 20, 1996.
10.4 Revolving Note in the amount of $1,000,000 by Noble
Broadcast Holdings, Inc. in favor of Broadcast
Finance, Inc. dated as of February 20, 1996.
99.1 Press Release dated February 22, 1996.
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(1) Identical Notes were issued by the Company in favor of the following
Banks:
The First National Bank of Boston
Bank of America Illinois
Bank of Montreal
The Bank of New York
The Bank of Nova Scotia
CIBC, Inc.
First Bank
Society National Bank
Union Bank
The aggregate principal amount of Revolving A Notes is $190 million.
The aggregate principal amount of the Revolving B Notes is $110
million.
(2) Executed by the following subsidiaries of the Company:
Jacor Broadcasting of Florida, Inc.
Jacor Broadcasting of Atlanta, Inc.
Jacor Broadcasting of Knoxville, Inc.
Jacor Broadcasting of Colorado, Inc.
Jacor Broadcasting of Tampa Bay, Inc.
Jacor Broadcasting of St. Louis, Inc.
Jacor Cable, Inc.
Georgia Network Equipment, Inc.
Jacor Broadcasting Corporation
Broadcast Finance, Inc.
Chesapeake Securities, Inc.
OIA Broadcasting L.L.C.
(3) An identical Primary Pledge Agreement was executed by Jacor
Broadcasting of Atlanta, Inc.
(4) An identical Secondary Pledge Agreement was executed by Jacor
Broadcasting of Atlanta, Inc.
(5) Such notes were issued by the subsidiaries of the Company identified
in (2) above.
(6) A substantially similar document was entered into by Jacor
Broadcasting of Colorado, Inc. relating to real property located in
Douglas County, Colorado.
(7) A substantially similar document was entered into by Jacor
Broadcasting Corporation relating to real property located in Hamilton
County, Ohio.
(8) Substantially similar documents were entered into by Jacor of Tampa
Bay, Inc. relating to real property located in Manatee County, Florida
and by Jacor Broadcasting of Florida relating to real property located
in Duval County, Florida and St. Johns County, Florida.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
JACOR COMMUNICATIONS, INC.
March 6, 1996 By: /s/ R. Christopher Weber
---------------------------------------
R. Christopher Weber, Senior Vice
President and Chief Financial Officer
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STOCK PURCHASE
AND
STOCK AND WARRANT REDEMPTION AGREEMENT
By and Among
JACOR COMMUNICATIONS, INC., an Ohio Corporation
PRUDENTIAL VENTURE PARTNERS II, L.P., a Limited Partnership
NORTHEAST VENTURES, II, a Limited Partnership
JOHN T. LYNCH
FRANK A. DE FRANCESCO
THOMAS R. JIMENEZ
WILLIAM R. ARBENZ
CIHC, INCORPORATED, a Delaware Corporation
BANKERS LIFE HOLDING CORPORATION, a Delaware Corporation
and
NOBLE BROADCAST GROUP, INC. a Delaware Corporation
Dated as of February 20, 1996
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TABLE OF CONTENTS
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1 PURCHASE AND SALE OF CLASS B STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 PURCHASE AND SALE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 STOCK PURCHASE PRICE; ALLOCATION OF STOCK PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 INTEREST PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.4 STOCK ESCROW AND SECURITY AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.5 TRUST AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2 REDEMPTION OF WARRANTS AND CLASS A STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 REDEMPTION PRICE; ALLOCATION OF REDEMPTION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 CANCELLATION OF WARRANTS AND RELEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.4 RETIREMENT OF CLASS A STOCK AND RELEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3 REPRESENTATIONS AND WARRANTIES OF EACH SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.1 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 OWNERSHIP OF CLASS A SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 OWNERSHIP OF CLASS B SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.5 OWNERSHIP OF WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 NOBLE INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.7 CLASS A SHAREHOLDERS: NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.8 CLASS B SHAREHOLDERS: NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.9 WARRANT SELLERS: NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.10 TRANSACTIONS WITH THE COMPANY OR SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 FINDER'S FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.12 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.1 AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.2 CAPITAL STRUCTURE OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4.3 SUBSIDIARIES AND OTHER INVESTMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.4 ORGANIZATION AND QUALIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 RADIO STATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.7 GOVERNMENT AUTHORIZATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.8 COMPLIANCE WITH REGULATIONS OF FCC AND ALL OTHER GOVERNMENTAL ENTITIES . . . . . . . . . . . . . . . . . 20
4.9 COMPLIANCE WITH APPLICABLE LAW; ADVERSE RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.10 FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.11 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.12 TITLE TO PROPERTIES; LIENS; CONDITION OF PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.13 PATENTS, TRADEMARKS, TRADE NAMES, COPYRIGHTS AND SIMILAR RIGHTS . . . . . . . . . . . . . . . . . . . . 27
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4.14 TRADE SECRETS AND CUSTOMER LISTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.15 ACCOUNTS RECEIVABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.16 BORROWINGS AND GUARANTEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.17 BANKING RELATIONS AND POWERS OF ATTORNEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.18 CONTRACTS AND COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.19 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.20 ABSENCE OF UNDISCLOSED LIABILITIES; ALLOCATION OF EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . 32
4.21 ABSENCE OF CERTAIN CHANGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.22 EMPLOYEE BENEFITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.23 EMPLOYEES; INDEPENDENT CONTRACTORS; LABOR MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.24 LITIGATION, PROCEEDINGS, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.25 TRANSACTIONS WITH INTERESTED PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.26 ENVIRONMENTAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.27 FINDER'S FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.28 TAKEOVER STATUTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.29 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5 REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.1 ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.3 NONCONTRAVENTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
5.4 FINDER'S FEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.5 ACQUISITION FOR INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.6 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6 COVENANTS CONCERNING CONDUCT AND TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.1 ACCESS PENDING STOCK CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.2 GENERAL COVENANTS REGARDING CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.3 ADDITIONAL COVENANTS OF THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.4 COVENANTS OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
6.5 COVENANTS OF CLASS B SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.6 ACQUISITION PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.7 INFORMATION; NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7 GOVERNMENTAL CONSENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.1 FCC APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.2 HSR APPLICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.3 OTHER FILINGS AND APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.4 COMPANY AND SELLER OBLIGATIONS UPON ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8 FURTHER AGREEMENTS AND REPRESENTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.1 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.2 NEWS RELEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.3 SAN DIEGO TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.4 TIJUANA TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.5 WARRANT PURCHASE TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.6 FINANCING TRANSACTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.7 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.8 SHARED COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.9 CASH ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.10 TAX PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
8.11 TIME BROKERAGE AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.12 INDEMNIFICATION AND ESCROW AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.13 SURVIVAL OF REPRESENTATIONS, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
8.14 SURVEYS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.15 DEFINITION OF MATERIALITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.16 DEFINITION OF KNOWLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.17 EXTENSION OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9 CONDITIONS TO REDEMPTION CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.1 CONDITIONS PRECEDENT TO SELLERS' AND THE COMPANY'S OBLIGATION TO CONSUMMATE THE REDEMPTION CLOSING . . . . 63
9.2 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CONSUMMATE THE REDEMPTION CLOSING . . . . . . . . . . . . . 64
10 REDEMPTION CLOSING; REDEMPTION CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.1 REDEMPTION CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
10.2 DELIVERIES AT REDEMPTION CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
11 CONDITIONS TO STOCK CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
11.1 CONDITIONS PRECEDENT TO SALE OF CLASS B STOCK BY CLASS B SHAREHOLDERS AT THE STOCK CLOSING . . . . . . . . 67
11.2 CONDITIONS PRECEDENT TO PURCHASE OF CLASS B STOCK BY BUYER AT THE STOCK CLOSING . . . . . . . . . . . . . 68
12 STOCK CLOSING; STOCK CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.1 STOCK CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
12.2 DELIVERIES AT STOCK CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
13 TERMINATION, AMENDMENT, PERFORMANCE AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
13.1 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
13.2 EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
13.3 SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
13.4 REMEDIES CUMULATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
13.5 WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
14 MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.1 POST-CLOSING ACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.2 ENTIRE AGREEMENT; AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.3 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.4 NO INTENDED THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.5 ASSIGNMENT AND BINDING EFFECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
14.6 WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
14.7 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
14.8 POSSESSION AND CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.9 STOCK SELLERS REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.10 WARRANT SELLERS REPRESENTATIVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
14.11 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.12 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.13 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.14 COUNTERPARTS; EXECUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
14.15 CONSENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
</TABLE>
iii
<PAGE> 5
SCHEDULES
Schedule 1.2(A) Sources and Uses Schedule
Schedule 1.2(B) Stock Purchase Price Allocation
Schedule 2.2 Warrant Redemption Price Allocation
EXHIBITS
Exhibit A Location of Defined Terms
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<PAGE> 6
STOCK PURCHASE AND STOCK AND WARRANT REDEMPTION AGREEMENT
This STOCK PURCHASE AND STOCK AND WARRANT REDEMPTION AGREEMENT (this
"Agreement") is made this 20th day of February, 1996 by and among: (A) JACOR
COMMUNICATIONS, INC., an Ohio corporation ("Buyer"); (B) PRUDENTIAL VENTURE
PARTNERS II, L.P., a limited partnership ("Prudential"); (C) NORTHEAST VENTURES,
II, a limited partnership ("Northeast"); (D) JOHN T. LYNCH ("Lynch"); (E) FRANK
A. DE FRANCESCO ("De Francesco"); (F) THOMAS R. JIMENEZ ("Jimenez"); (G) WILLIAM
R. ARBENZ ("Arbenz"); (H) CIHC, INCORPORATED, a Delaware corporation ("CIHC");
(I) BANKERS LIFE HOLDING CORPORATION, a Delaware corporation ("BLH"); and (J)
NOBLE BROADCAST GROUP, INC., a Delaware corporation ("Company").
RECITALS:
WHEREAS, Prudential and Northeast (each referred to herein individually
as a "Class A Shareholder", and together as the "Class A Shareholders") are the
record and beneficial owners of 100% of the issued and outstanding shares of the
Class A common stock of the Company (the "Class A Stock"), and the Company
desires to redeem and retire all of the Class A Stock, and the Class A
Shareholders desire that the Company redeem all of the Class A Stock, upon and
subject to the terms and conditions hereof; and
WHEREAS, Lynch, De Francesco, Jimenez and Arbenz (each referred to
herein individually as a "Class B Shareholder", and collectively as the "Class B
Shareholders") are the record and beneficial owners of 100% of the issued and
outstanding shares of the Class B common stock of the Company (the "Class B
Stock"), and Buyer desires to acquire all of the Class B Stock, and the Class B
Shareholders desire that Buyer acquire all of the Class B Stock, upon and
subject to the terms and conditions hereof; and
WHEREAS, BLH and CIHC (as successor in interest to CCP Insurance, Inc.)
(each referred to herein individually as a "Warrant Seller", and together as the
"Warrant Sellers") are the record and beneficial owners of warrants to purchase
Class A common stock of the Company (the "Warrants") pursuant to a certain
Warrant No. 1 and Warrant No. 2, respectively, each dated August 18, 1995, and
the Company desires to redeem and cancel the Warrants, and the Warrant Sellers
desire that the Company redeem the Warrants, upon and subject to the terms and
conditions hereof; and
WHEREAS, each Class A Shareholder, each Class B Shareholder and each
Warrant Seller is sometimes referred to herein as a "Seller" and the Class A
Shareholders, the Class B Shareholders and
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<PAGE> 7
Warrant Sellers are sometimes referred to collectively herein as the "Sellers";
and
WHEREAS, the location of defined terms herein are set forth on Exhibit
A hereto; and
NOW, THEREFORE, for and in consideration of the mutual promises herein
made, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
ARTICLE I
1 PURCHASE AND SALE OF CLASS B STOCK
1.1 PURCHASE AND SALE. At the Stock Closing (as defined in Section
12.1.1), upon and subject to all of the terms and conditions set forth herein,
the Class B Shareholders will sell, assign, transfer and deliver to Buyer, and
Buyer will purchase from the Class B Shareholders, all of the issued and
outstanding shares of Class B Stock.
1.2 STOCK PURCHASE PRICE; ALLOCATION OF STOCK PURCHASE PRICE. In
consideration for good and marketable title to the Class B Stock, free and clear
of all liens, charges, encumbrances and restrictions of any kind, Buyer shall
pay to the Class B Shareholders the aggregate purchase price (the "Stock
Purchase Price") shown on the Sources and Uses of Funds Schedule attached hereto
as Schedule 1.2(A) (the "Sources and Uses Schedule") minus: (A) the amount, if
any, by which (i) the sum of the barter payables (excluding payables related to
bartered fixed assets) of the Stations (other than the Denver Stations) as of
the Redemption Closing Date and the barter payables (excluding payables related
to bartered fixed assets) of the Denver Stations as of the Stock Closing Date
or, if earlier, the date upon which Buyer (or an Affiliate of Buyer) commences
operation of the Denver Stations pursuant to a time brokerage agreement or joint
sales agreement pursuant to Section 8.11) exceed (ii) the sum of $200,000 plus
the amount of barter receivables of the Stations (other than the Denver
Stations) as of the Redemption Closing Date plus the amount of barter
receivables of the Denver Stations as of the Stock Closing Date or, if earlier,
the date upon which Buyer (or an Affiliate of Buyer) commences operation of the
Denver Stations pursuant to a time brokerage agreement or joint sales agreement
pursuant to Section 8.11); minus (B) any adjustments pursuant to Section 6.2.4
or Section 8.18.
The Stock Purchase Price shall be paid as follows: (A) Five Hundred and
Twenty-Two Thousand Five Hundred Dollars ($522,500) (the "Stock Purchase Escrow
Consideration") shall be deposited upon the Stock Closing into the Escrow Fund
(as defined below in this
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<PAGE> 8
Section 1.2); and (B) an amount equal to the difference between the Stock
Purchase Price minus the Stock Purchase Escrow Consideration (the "Net Stock
Purchase Payment") shall be paid upon the Stock Closing by wire transfer of
funds in accordance with wiring instructions provided by the Stock Sellers
Representative (as defined in Section 14.9) to Buyer prior to the Stock Closing
Date.
The Stock Purchase Escrow Consideration shall be placed in an escrow
fund (the "Escrow Fund") at The Fifth Third Bank in the name of The Fifth Third
Bank as escrow agent (the "Indemnification Escrow Agent"), and shall be
administered in accordance with the terms of an Indemnification and Escrow
Agreement of even date herewith between the parties hereto, Conseco, Inc., an
Indiana corporation ("Conseco") and the Indemnification Escrow Agent (the
"Indemnification and Escrow Agreement"). Notwithstanding anything to the
contrary provided herein, in the event that, prior to deposit of all or any
portion of the Stock Purchase Escrow Consideration into the Escrow Fund, an
Award Notice (as defined in the Indemnification and Escrow Agreement) exists
with respect to a Buyer Escrow Indemnified Claim for which the sum of the
Warrant Escrow Consideration and the Class A Escrow Consideration (each as
defined in Section 2.2 below) available pursuant to the terms of the
Indemnification and Escrow Agreement to satisfy such Award Notice was not
sufficient to fully reimburse Buyer, then Buyer shall be entitled to offset such
unreimbursed amount against the Stock Purchase Escrow Consideration prior to the
payment thereof into the Escrow Fund, and the amount of the Stock Purchase
Escrow Consideration to be thereafter deposited in the Escrow Fund shall be
concomitantly reduced.
The allocation of the Stock Purchase Price among the Class B
Shareholders shall be as set forth on Schedule 1.2(B) hereto; provided that
Buyer's obligations with respect to payment of the Stock Purchase Price shall
terminate upon confirmation of receipt of the wired funds, and Buyer shall have
no obligation or liability to any Class B Shareholder with respect to the
ultimate distribution of such payment among the Class B Shareholders.
1.3 INTEREST PAYMENTS. In the event that the Stock Closing has not
occurred on or before April 15, 1997, then from and after April 16, 1997 the
unpaid portion of the Stock Purchase Price outstanding from time to time shall
bear interest at the rate of interest per annum announced by Banque Paribas to
be its prime rate or base rate of interest from time to time at its principal
office in Chicago, Illinois. Buyer shall pay the Class B Shareholders accrued
interest in arrears on a monthly basis on or before the last business day of
each month commencing with April, 1997. Interest shall be paid by wire transfer
of funds in accordance with wiring instructions provided by the Stock Sellers
Representative.
1.4 STOCK ESCROW AND SECURITY AGREEMENT. At the Redemption Closing, the
Class B Shareholders, the Company, Buyer, Phillip H.
3
<PAGE> 9
Banks, as trustee, and The Fifth Third Bank as escrow agent (the "Stock Escrow
Agent") shall have entered into a Stock Escrow and Security Agreement (the
"Stock Escrow and Security Agreement") pursuant to which Class B Shareholders
shall deliver to the Stock Escrow Agent at the Redemption Closing all of the
Class B Stock, and appropriate stock powers and other transfer documents, all of
which shall be held and released pursuant to the terms and conditions of the
Stock Escrow and Security Agreement.
1.5 TRUST AGREEMENT. In order to make more certain the sale of the
Class B Shares to Buyer and as a condition to Buyer's obligation to purchase the
Class B Stock, as soon as reasonably possible after the execution hereof and
following receipt of FCC consent to the transfer of such shares, the Class B
Shareholders shall (in addition to all actions taken prior to the execution
hereof) take all actions as are reasonably necessary in order to transfer all of
their right, title and interest in and to the Class B Stock to Phillip H. Banks,
as Trustee (the "Stock Trustee") under that certain Trust Agreement, dated
February 20, 1996, by and between Mr. Banks and the Class B Shareholders and
their spouses as "Trustors" (the "Stock Trust") and to make fully effective the
provisions of the Stock Trust. The Class B Shareholders have delivered to Buyer
a true, correct and complete copy of the Stock Trust as in effect. Buyer agrees
to pay all amounts due Trustee in connection with the Stock Trust.
The Class B Shareholders and Buyer acknowledge that, from and after the
transfer of the Class B Stock into the Stock Trust, the Stock Trustee will be
the legal title holder of the Class B Stock, and that the mechanics of certain
payments from Buyer to the Class B Shareholders as contemplated hereby (or to
the Stock Trustee as holder of the Class B Stock), and mechanics of the delivery
of the Class B Stock from the Class B Shareholders to Buyer as contemplated
hereby (or by the Stock Trustee as holder of the Class B Stock), are more fully
provided for in the Stock Trust and the Stock Escrow and Security Agreement, and
specifically contemplate the transfer of the Class B Stock by the Class B
Shareholders to the Stock Trustee. Accordingly, the Class B Shareholders and
Buyer agree that, if and to the extent that there is any discrepancy between the
terms and conditions hereof and the terms and conditions of the Stock Trust and
the Stock Escrow and Security Agreement regarding such payments and delivery,
the terms and conditions of the Stock Trust and the Stock Escrow and Security
Agreement shall prevail.
Anything to the foregoing notwithstanding, it is understood that the
Class B Shareholders shall retain all voting rights and powers necessary to
exercise de facto and de jure control of the Stations as required by the FCC
prior to receipt of FCC Consent (as defined in Section 7.1.1).
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<PAGE> 10
ARTICLE II
2 REDEMPTION OF WARRANTS AND CLASS A STOCK
2.1 REDEMPTION. At the Redemption Closing (as defined in Section
10.1.1), upon and subject to all of the terms and conditions set forth herein:
(A) the Warrant Sellers will sell, assign, transfer and deliver to the Company
all of their right, title and interest in and to the Warrants; and (B) the Class
A Shareholders will sell, assign, transfer and deliver to the Company all of
their right, title and interest in and to the Class A Stock
2.2 REDEMPTION PRICE; ALLOCATION OF REDEMPTION PRICE. In consideration
for the Warrants, at the Redemption Closing the Company shall pay to the Warrant
Sellers the aggregate redemption shown on the Sources and Uses Schedule (the
"Warrant Redemption Price"). In consideration for the Class A Stock, at the
Redemption Closing the Company shall pay to the Class A Shareholders the
aggregate redemption price shown on the Sources and Uses Schedule (the "Class A
Redemption Price").
The Warrant Redemption Price shall be paid at the Redemption Closing as
follows: (A) One Million Eight Hundred and Seventy Five Thousand Dollars
($1,875,000) (the "Warrant Escrow Consideration") shall be deposited into the
Escrow Fund and shall be administered in accordance with the terms of the
Indemnification and Escrow Agreement; and (B) an amount equal to the difference
between the Warrant Redemption Price minus the Warrant Escrow Consideration (the
"Net Warrant Redemption Payment") shall be paid by wire transfer of funds in
accordance with wiring instructions provided by the Warrant Sellers
Representative to the Company prior to Redemption Closing Date.
The Class A Redemption Price shall be paid at the Redemption Closing as
follows: (A) One Hundred and Two Thousand Five Hundred Dollars ($102,500) (the
"Class A Escrow Consideration") shall be deposited into the Escrow Fund and
shall be administered in accordance with the terms of the Indemnification and
Escrow Agreement; and (B) an amount equal to the difference between the Class A
Redemption Price minus the Class A Escrow Consideration (the "Net Class A
Redemption Payment") shall be paid by wire transfer of funds in accordance with
wiring instructions provided by each of the Class A Shareholders to the Company
prior to Redemption Closing Date.
The allocation of the Warrant Redemption Price among the Warrant
Sellers and the Class A Redemption Price among the Class A Shareholders shall be
as set forth on Schedule 2.2 hereto; provided that the Company's obligations
with respect to payment of the Warrant Redemption Price and the Class A
Redemption Price as outlined in this Section shall terminate upon confirmation
of receipt of the wired funds, and the Company shall have no
5
<PAGE> 11
obligation or liability to either Warrant Seller or either Class A Shareholder
with respect to the ultimate distribution of such payment among the Warrant
Sellers and the Class A Shareholders.
2.3 CANCELLATION OF WARRANTS AND RELEASE. Subject to and effective upon
the consummation of the Redemption Closing, the Company hereby cancels the
Warrants. In order to induce Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Company and the Warrant
Sellers acknowledge and agree that the Warrants and any and all rights evidenced
by the Warrants, including without limitation, the right of any holder of the
Warrants to purchase the Class A common stock of the Company, shall be null and
void effective upon the consummation of the Redemption Closing. Subject to and
effective upon the consummation of the Redemption Closing, the Warrant Sellers
and the Company hereby release and discharge each other, and their respective
shareholders, directors, officers, employees, agents, Affiliates and
representatives, from any and all claims, liabilities and obligations that they
may have had to each other relating to or arising out of or in connection with
the Warrants or that certain Investment Agreement, dated as of August 18, 1995
by and between the Company and Conseco, Inc., an Indiana corporation. Such
releases shall not, however, affect any party's rights against any other party
arising out of this Agreement or any Ancillary Document.
2.4 RETIREMENT OF CLASS A STOCK AND RELEASE. Subject to and effective
upon the consummation of the Redemption Closing, the Company hereby retires the
Class A Stock. In order to induce Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, the Company and the Class A
Shareholders acknowledge and agree that any rights of the Class A Shareholders
in and to the Class A Stock, including without limitation, the right of any
holder of the Class A Stock to convert the Class A Stock into the Class B common
stock of the Company, shall be null and void effective upon the consummation of
the Redemption Closing. Subject to and effective upon the consummation of the
Redemption Closing, the Class A Shareholders and the Company hereby release and
discharge each other, and their respective shareholders, directors, officers,
employees, agents, Affiliates and representatives, from any and all claims,
liabilities and obligations that they may have had to each other relating to or
arising out of or in connection with the Class A Stock. Such releases shall not,
however, affect any party's rights against any other party arising out of this
Agreement or any Ancillary Document.
6
<PAGE> 12
ARTICLE III
3 REPRESENTATIONS AND WARRANTIES OF EACH SELLER
In order to induce Buyer to enter into this Agreement, each Seller
severally makes the following representations and warranties which are
applicable to such Seller to Buyer (the "Sellers Representations and
Warranties"). The Sellers Representations and Warranties shall be true and
correct in all respects as of the date hereof and at all times hereafter subject
to the provisions hereof regarding the expiration thereof and changes expressly
contemplated hereby.
3.1 ORGANIZATION. Each Seller (other than the Sellers who are natural
persons) represents and warrants as to itself that such Seller is, as
applicable, a corporation or a limited partnership, duly organized, validly
existing and in good standing under the laws of the state in which it was
organized.
3.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each Seller represents and
warrants as to itself that: (A) such Seller has the full power and authority to
execute and deliver this Agreement and all other agreements and documents
contemplated hereby to which such Seller is or will be a party, including
without limitation the Financing Agreements as defined in Section 6.2.4 (such
other agreements and documents are sometimes referred to collectively herein as
the "Ancillary Documents") and to consummate the transactions contemplated
hereby and thereby; (B) the execution and delivery by such Seller of this
Agreement and each of the Ancillary Documents to which such Seller is or will be
a party, and the consummation by such Seller of the transactions contemplated
hereby and thereby, have been duly authorized by all necessary action on the
part of such Seller; (C) this Agreement has been, and each of the Ancillary
Documents to which such Seller is or will be a party will be, duly executed and
delivered by such Seller; and (D) the obligations imposed on such Seller by this
Agreement are, and by each of the Ancillary Documents to which such Seller is or
will be a party when executed and delivered by such Seller will be, the valid
and binding obligations of such Seller, enforceable against such Seller in
accordance with their respective terms.
3.3 OWNERSHIP OF CLASS A SHARES. Each Class A Shareholder represents
and warrants as to itself that: (A) such Class A Shareholder is the sole record
and beneficial owner of good and marketable title to all of the shares of Class
A Stock set forth opposite such Class A Shareholder's name in the Disclosure
Letter (as defined in the second introductory paragraph to Article IV) under the
heading "Class A Stock Owned"; (B) such shares are duly authorized, validly
issued, fully paid for and are nonassessable; and (C) such Class A Shareholder
owns such shares of Class A Stock free and clear of all liabilities (absolute or
contingent), liens,
7
<PAGE> 13
encumbrances, mortgages, pledges, options, claims, proxies, and other security
interests or rights of others.
3.4 OWNERSHIP OF CLASS B SHARES. Each Class B Shareholder represents
and warrants as to itself that: (A) such Class B Shareholder is the sole record
and beneficial owner of good and marketable title to all of the shares of Class
B Stock set forth opposite such Class B Shareholder's name in the Disclosure
Letter under the heading "Class B Stock Owned"; (B) such shares are duly
authorized, validly issued, fully paid for and are nonassessable; (C) except as
described in the Disclosure Letter, such Class B Shareholder owns such shares of
Class B Stock free and clear of all liabilities (absolute or contingent), liens,
encumbrances, mortgages, pledges, options, claims, proxies, and other security
interests or rights of others; and (D) at the Stock Closing Buyer will acquire
good and marketable title to all of such Class B Stock free and clear of all
liabilities (absolute or contingent), liens, encumbrances, mortgages, pledges,
options, claims, proxies and other security interests or rights of others.
3.5 OWNERSHIP OF WARRANTS. Each Warrant Seller represents and warrants
as to itself that: (A) such Warrant Seller is the sole record and beneficial
owner of good and marketable title to all of the Warrants set forth opposite
such Warrant Seller's name in the Disclosure Letter under the heading "Warrants
Owned"; and (B) except as described in the Disclosure Letter, such Warrant
Seller owns such Warrants free and clear of all liabilities (absolute or
contingent), liens, encumbrances, mortgages, pledges, options, claims, proxies,
and other security interests or rights of others.
3.6 NOBLE INDEBTEDNESS. Each Class B Shareholder represents and
warrants as to itself that, and the Company represents and warrants that, other
than the Noble Indebtedness (as defined below), neither the Company nor any of
its Subsidiaries: (A) have any liabilities or obligations that would be required
to be categorized as long-term debt (or as the current portion of long-term
debt) on a balance sheet prepared in accordance with generally accepted
accounting principles, including without limitation any capital leases, and (B)
is a party to or bound by any interest rate protection agreements, interest rate
cap agreements, interest rate collar agreements, or other similar arrangements.
For this purpose, "Noble Indebtedness" shall mean the outstanding indebtedness
of the Company and its Subsidiaries (including any accrued and deferred
interest, prepayment fees, termination fees, breakage fees, penalties and other
amounts required to be paid in order to satisfy such indebtedness in full)
under: (A) those certain Subordinated Notes, each dated August 18, 1995, in the
aggregate original principal amount of Thirty Seven Million Dollars
($37,000,000), more specifically described in the Disclosure Letter, and which
have a payoff balance as of the date hereof as shown on the Sources and Uses
Schedule (the "Conseco Debt"); (B) the Credit Agreement (the "Credit Agreement")
among the Company,
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Noble Broadcast Holdings, Inc., various lending institutions, CIBC, Inc., and
First Union National Bank of North Carolina, as Co- Agents and The Chase
Manhattan Bank, N.A., as Agent, dated as of August 18, 1995, as amended, and
more specifically described in the Disclosure Letter, and which has a payoff
balance as of the date hereof as shown on the Sources and Uses Schedule (after
any Available Cash (as defined below) has been credited thereto as shown in the
Sources and Uses Schedule) (the "Chase Debt"); (C) a subordinated non-interest
bearing promissory note in the face amount of $500,000 with a nominal unpaid
balance of $250,000, currently held by Barclay's Business Credit, more
specifically described in the Disclosure Letter, and which has a payoff balance
as of the date hereof as shown on the Sources and Uses Schedule (the "Barclay's
Debt"); (D) the Swap Transaction Agreement between The Chase Manhattan Bank and
the Company, which is more specifically described in the Disclosure Letter, and
which has an aggregate payoff balance as of the date hereof as shown on the
Sources and Uses Schedule (the "Rate Protection Agreement"); (E) future payments
in the aggregate amount shown on the Sources and Uses Schedule in connection
with the Accu-Weather settlement for KHOW-AM (the "Accu-Weather Settlement");
and (F) the intercompany notes described in the Disclosure Schedule (the
"Intercompany Notes"). For this purpose "Available Cash" shall mean the amount
of cash in the Company and the Subsidiaries determined as follows: (A) the
amount of cash in all Company and Subsidiary bank accounts as of the close of
business on the day prior to the Redemption Date; plus (B) the aggregate amount
of cash, checks and other payments (including deposits which have not yet
cleared) to the Company and any Subsidiary which were received prior to the
close of business on the day prior to the Redemption Date; minus (C) the
aggregate of all outstanding checks, including without limitation the balance of
payroll from the last payroll not yet cleared; minus (D) the amount of the fees
of Gray, Cary, Ware & Freidenrich, Haley, Bader & Potts and Cervantes, Paregon &
Guitterez for legal services rendered on behalf of the Company (or in the case
of Cervantes, Paregon & Guitterez, RDP and Nobro, which the Company is
reimbursing) and the fees of Price Waterhouse for accounting and tax services
rendered on behalf of the Company in connection with the transactions
contemplated hereby and by the Ancillary Documents.
3.7 CLASS A SHAREHOLDERS: NONCONTRAVENTION. Each Class A Shareholder
represents and warrants as to itself that the execution, delivery and
performance by such Class A Shareholder of this Agreement and each of the
Ancillary Documents to which such Class A Shareholder is a party, and the
performance and consummation by such Class A Shareholder of the transactions
contemplated hereby and thereby:
3.7.1 do not require on behalf of such Class A Shareholder any
consent, authorization, order, waiver or approval
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of, or registration, declaration or filing with, any Governmental Entity;
3.7.2 will not result in a violation of any material law or
regulation, or of any judgment, writ, injunction, order, rule, ruling or decree
of any Governmental Entity to which such Class A Shareholder is subject;
3.7.3 will not conflict with or constitute a breach or
violation of or default under the partnership agreements and other governance
documents of such Class A Shareholder; and
3.7.4 does not require on behalf of such Class A Shareholder
any consent, authorization, order, waiver or approval of, or registration,
declaration or notice to, or filing with any party, nor does it violate or
conflict with or result in a breach of, or constitute a default of or give rise
to a right of termination or acceleration (or an event which with notice or
lapse of time or both would give rise to a right of termination or acceleration)
under, any provision of any contract, indenture, mortgage, lease, agreement,
license, permit or other instrument to which such Class A Shareholder is a
party.
3.8 CLASS B SHAREHOLDERS: NONCONTRAVENTION. Each Class B Shareholder
represents and warrants as to itself that the execution, delivery and
performance by such Class B Shareholder of this Agreement and each of the
Ancillary Documents to which such Class B Shareholder is a party, and the
performance and consummation by such Class B Shareholder of the transactions
contemplated hereby and thereby:
3.8.1 other than the governmental and regulatory consents and
approvals required by Article VII hereof, do not require on behalf of such Class
B Shareholder any consent, authorization, order, waiver or approval of, or
registration, declaration or filing with, any federal, state, local or foreign
governmental or administrative agency, court, or other authority (each, a
"Governmental Entity" and collectively, "Governmental Entities");
3.8.2 will not result in a violation of any material law or
regulation, or of any judgment, writ, injunction, order, rule, ruling or decree
of any Governmental Entity to which such Class B Shareholder is subject; and
3.8.3 other than the governmental and regulatory consents and
approvals required by Article VII hereof, and other than such spousal consents
as may be required under California law with respect to each of the Class B
Shareholders and which have previously been executed and delivered, does not
require on behalf of such Class B Shareholder any consent, authorization, order,
waiver or approval of, or registration, declaration or notice to,
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or filing with any party, nor does it violate or conflict with or result in a
breach of, or constitute a default of or give rise to a right of termination or
acceleration (or an event which with notice or lapse of time or both would give
rise to a right of termination or acceleration) under, any provision of any
contract, indenture, mortgage, lease, agreement, license, permit or other
instrument to which such Class B Shareholder is a party.
3.9 WARRANT SELLERS: NONCONTRAVENTION. Each Warrant Seller represents
and warrants as to itself that the execution, delivery and performance by such
Warrant Seller of this Agreement and each of the Ancillary Documents to which
such Warrant Seller is a party, and the performance and consummation by such
Warrant Seller of the transactions contemplated hereby and thereby:
3.9.1 do not require on behalf of such Warrant Seller any
consent, authorization, order, waiver or approval of, or registration,
declaration or filing with, any Governmental Entity;
3.9.2 will not result in a violation of any material law or
regulation, or of any judgment, writ, injunction, order, rule, ruling or decree
of any Governmental Entity to which such Warrant Seller is subject; and
3.9.3 as applicable, will not conflict with or constitute a
breach or violation of or default under the Certificate of Incorporation,
Bylaws, charter, partnership agreements and other governance documents of such
Warrant Seller; and
3.9.4 does not require on behalf of such Warrant Seller any
consent, authorization, order, waiver or approval of, or registration,
declaration or notice to, or filing with any party, nor does it violate or
conflict with or result in a breach of, or constitute a default of or give rise
to a right of termination or acceleration (or an event which with notice or
lapse of time or both would give rise to a right of termination or acceleration)
under, any provision of any contract, indenture, mortgage, lease, agreement,
license, permit or other instrument to which such Warrant Seller is a party.
3.10 TRANSACTIONS WITH THE COMPANY OR SUBSIDIARIES. Except for matters
described in the Disclosure Letter (as hereinafter defined), each Seller
represents and warrants as to itself that neither such Seller, nor any director,
officer or managerial employee of such Seller nor their respective Affiliates,
spouses, children, relatives or other person living in their household:
3.10.1 owns directly or indirectly any interest in, or serves
as an officer or director of, any customer, competitor or supplier of the
Company or any Subsidiary or any organization which has a contract or
arrangement with the Company or any Subsidiary;
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3.10.2 is owed any money or property by the Company or any
Subsidiary, other than (A) wages or salary earned in the ordinary course of
business; and (B) the Conseco Debt and the Chase Debt, each of which shall be
repaid in full upon consummation of the Redemption Closing;
3.10.3 is indebted to the Company or any Subsidiary; or
3.10.4 other than the Conseco Debt and claims by Lynch and De
Francesco for wages for services rendered as employees of the Company pursuant
to their current employment agreements, has any claim (regardless of the source
thereof) against the Company, its Subsidiaries or their respective shareholders,
directors, officers, employees, agents, Affiliates or representatives.
3.10.5 owns any property, real or personal, tangible or
intangible, or has rights required for or used in the business of the Company or
any Subsidiary.
3.11 FINDER'S FEE. Each Seller represents and warrants as to itself
that such Seller has not incurred or become liable for any broker's commission,
finder's fee or payment to any other intermediary relating to or in connection
with the transactions contemplated by this Agreement, or otherwise dealt with
any brokers, finders or intermediaries in connection herewith other than R.C.
Crisler whose fees shall be paid by Buyer.
3.12 DISCLOSURE. Each Seller represents and warrants as to itself that
no representation or warranty made by such Seller in this Agreement, any
Ancillary Document, or in any schedule, certificate or exhibit prepared and
furnished or to be prepared and furnished by such Seller or their
representatives in their capacity as a Seller pursuant hereto or thereto, or in
connection herewith or therewith, contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make the statements or facts contained herein or therein not misleading in light
of the circumstances under which they were furnished.
ARTICLE IV
4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce Buyer to enter into this Agreement, the Company
hereby makes the following representations and warranties to Buyer (the "Company
Representations and Warranties"). Unless otherwise specifically provided herein,
the Company Representations and Warranties shall be true and correct in all
respects as of the date hereof subject to the provisions hereof regarding the
expiration thereof and changes expressly contemplated hereby. The continuing
status of certain of the Company Representations and
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Warranties are also subject to certain covenants set forth in Section 6.2.2.28.
Certain of the Sellers Representations and Warranties and the Company
Representations and Warranties are qualified, as indicated, by information
disclosed in the disclosure letter prepared by the Company and delivered to
Buyer prior to or concurrently with the execution and delivery hereof (the
"Disclosure Letter"). The Disclosure Letter is divided into sections which
correspond to the section references contained in Article III and this Article
IV, respectively. Each Disclosure Letter section sets forth in detail any and
all exceptions to the Sellers Representations and Warranties and the Company
Representations and Warranties contained in the corresponding section of Article
III and this Article IV, respectively.
4.1 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has the full
power and authority to execute and deliver this Agreement and all other
Ancillary Documents to which the Company is or will be a party, and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Ancillary Documents, and the consummation by
the Company of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary corporate action on the part of the Company. This
Agreement has been, and each of the other Ancillary Documents to which the
Company is or will be a party, has been or will be duly executed and delivered
by the Company. The obligations imposed on the Company by this Agreement are,
and by the Ancillary Documents when executed and delivered by the Company will
be, the valid and binding obligations of the Company, enforceable against the
Company in accordance with their respective terms. The Company hereby makes each
of the representations and warranties set forth in this Section 4.1 with respect
to the execution, delivery and consummation by each Subsidiary of any Ancillary
Document to which such Subsidiary is a party.
4.2 CAPITAL STRUCTURE OF THE COMPANY. The entire authorized capital
stock of the Company consists solely of (A) 1,569,514 shares of Class A common
stock which is convertible as provided in the Company's Articles of
Incorporation into the Class B voting common stock of the Company, of which
47,473 shares are issued and outstanding and owned exclusively by Prudential and
2,431 shares are issued and outstanding and owned exclusively by Northeast, all
of which will be effectively redeemed and retired upon consummation of the
Redemption Closing; and (B) 254,018 shares of Class B common stock, of which
254,018 shares are issued and outstanding. All of the issued and outstanding
shares of capital stock of the Company have been duly authorized, are not
subject to preemptive rights and were issued in full compliance with all
federal, state and local laws, rules and regulations. Upon redemption of the
Warrants as contemplated by Article II, there shall be no outstanding or
authorized subscriptions, options, warrants, calls, commitments,
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agreements or arrangements of any kind relating to the issuance, transfer,
delivery or sale of any additional shares of capital stock or other securities
of the Company, including, but not limited to, any right of conversion or
exchange under any outstanding security, agreement or other instrument. Other
than as set forth in the Disclosure Letter, there are no authorized or
outstanding close corporation agreements, voting agreements, voting trusts,
proxies, shareholder agreements, rights to purchase, transfer restrictions, or
other similar arrangements with respect to any of the capital stock of the
Company. There are no outstanding or authorized stock appreciation, phantom
stock or similar rights with respect to the Company. The Company has no
liability for dividends, interest or other distributions declared or accumulated
but unpaid with respect to any securities of the Company other than accrued and
deferred interest on the Conseco Debt. The Company has not distributed any cash
or other property to any Seller or any other person or entity in contemplation
of the transactions contemplated hereby, other than regularly scheduled payments
made by the Company pursuant to the terms of the documents evidencing the
Conseco Debt. No person or entity has a claim arising out of a violation of any
preemptive rights of a stockholder of the Company, nor any claim based upon
ownership, repurchase or redemption of any shares of the Company's capital
stock.
4.3 SUBSIDIARIES AND OTHER INVESTMENTS. All subsidiaries of the
Company, direct and indirect, are set forth in the Disclosure Letter
(collectively, the "Subsidiaries" and each individually, a "Subsidiary") and the
Company does not own any securities issued by, or have any other ownership
interest in, any other corporation, business organization or entity or
governmental authority except as set forth in the Disclosure Letter. Except as
set forth in the Disclosure Letter, neither the Company nor any Subsidiary is a
partner, shareholder, member or participant in any joint venture, partnership,
corporation, limited liability company or any entity of any kind or with any
individual. Neither the Company nor any Subsidiary is subject to any obligation
or requirement to provide funds to, or to make any investment (in the form of a
loan, capital contribution or otherwise) in, any entity or to any individual.
The authorized capital stock of each Subsidiary is set forth in the Disclosure
Letter.
Except as set forth in the Disclosure Letter, the Company is
the lawful record and beneficial owner, either directly or indirectly through a
Subsidiary, of 100% of the issued and outstanding shares of capital stock of
each Subsidiary, and such shares are duly authorized, validly issued, fully paid
for and are non-assessable. The Company owns such shares of stock of the
Subsidiaries free and clear of all liabilities (absolute or contingent), liens,
encumbrances, mortgages, pledges, options, claims, proxies, and other security
interests or rights of others except for a pledge of the stock of each of the
Subsidiaries to secure the Chase Debt which shall terminate by its own terms
upon
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repayment in full of the Chase Debt at the Redemption Closing. Except as set
forth in the Disclosure Letter, and except for the warrants held by The Chase
Manhattan Bank, N.A. as Agent pursuant to a Warrant Agreement dated as of August
18, 1995 (the "Chase Warrants") which shall be cancelled at the Redemption
Closing, there are no outstanding or authorized subscriptions, options,
warrants, calls, commitments, agreements or arrangements of any kind relating to
the issuance, transfer, delivery or sale of any additional shares of capital
stock or other securities of any Subsidiary including, but not limited to, any
right of conversion or exchange under any outstanding security, agreement or
other instrument. Other than as set forth in the Disclosure Letter, there are no
authorized or outstanding close corporation agreements, voting agreements,
voting trusts, shareholder agreements, rights to purchase, transfer
restrictions, or other similar arrangements with respect to any of the capital
stock of any Subsidiary. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to any Subsidiary. No
Subsidiary has any liability for dividends, interest or other distributions
declared or accumulated but unpaid with respect to any securities of any
Subsidiary. No Subsidiary has distributed any cash or other property to the
Company or any other third party in contemplation of the transactions
contemplated hereby other than application of the proceeds of the San Diego
Transaction (as defined in Section 8.3) or operating cash flow of the
Subsidiaries to repay the Conseco Debt and Chase Debt. No person or entity has a
claim arising out of a violation of any preemptive rights of a stockholder of
any Subsidiary, nor any claim based upon ownership, repurchase or redemption of
any shares of any Subsidiary's capital stock.
4.4 ORGANIZATION AND QUALIFICATION. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and each of the Company's Subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation, the details of which are set forth in the Disclosure Letter. The
Company and its Subsidiaries have all requisite corporate and legal power and
authority, including without limitation all licenses, permits, authorizations
and approvals (corporate, governmental and otherwise) necessary to own, lease
and operate their respective assets and properties and to conduct their business
in the manner and in the places where such assets and properties are owned,
leased or operated or such business is conducted by them. The Company and each
of its Subsidiaries is licensed or qualified as a foreign corporation in each
state and foreign country in which it is doing business and where the nature and
extent of such business requires such license or qualification, the details of
which are set forth in the Disclosure Letter. The Company has previously
delivered to Buyer true and correct and complete copies of: (A) the Certificate
of Incorporation and the Bylaws or the applicable charter and governance
documents for the Company and each of its
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Subsidiaries, in each case as amended to date; and (B) the shareholder journals,
ledgers and other records in which the issuance and transfer of the capital
stock of the Company and each of its Subsidiaries is recorded, which accurately
reflect all issuance and transfer transactions that shall have occurred with
respect to the capital stock of the Company and each of its Subsidiaries prior
to the consummation of the transactions contemplated by this Agreement. The
minute books of the Company and each of the Subsidiaries contain records which
are complete and accurate in all material respects of all meetings and other
corporate actions taken by their respective shareholders, boards of directors
and committees thereof.
4.5 NONCONTRAVENTION. Except as set forth in the Disclosure Letter,
neither the Company nor any Subsidiary is in violation of its Certificate of
Incorporation, Bylaws or its charter and other governance documents, and neither
the Company nor any Subsidiary has in the past been in violation of its
Certificate of Incorporation, Bylaws or its charter and other governance
documents the consequence of which past failure would have a material adverse
effect on the Company or any Subsidiary. The execution, delivery and performance
by the Company of this Agreement and each of the Ancillary Documents, and the
performance and consummation by the Company of the transactions contemplated
hereby and thereby:
4.5.1 other than the governmental and regulatory consents and
approvals required by Article VII hereof, do not require on behalf of the
Company or any Subsidiary any consent, authorization, order, waiver or approval
of, or registration, declaration or filing with, any Governmental Entity;
4.5.2 will not result in a violation of any material law or
regulation, or any judgment, writ, injunction, order, rule, ruling or decree of
any Governmental Entity to which the Company or any Subsidiary is subject;
4.5.3 will not conflict with or constitute a breach or
violation of or default under the Certificate of Incorporation, Bylaws or its
charter and other governance documents of the Company or any Subsidiary;
4.5.4 other than the governmental and regulatory consents and
approvals required by Article VII hereof, do not require on behalf of the
Company or any Subsidiary any consent, authorization, order, waiver or approval
of, or registration, declaration or notice to, or filing with any party, nor
does it violate or conflict with or result in a breach of, or constitute a
default of or give rise to a right of termination or acceleration (or an event
which with notice or lapse of time or both would give rise to a right of
termination or acceleration) under, any provision of any contract, indenture,
mortgage, lease, agreement, license, permit or other instrument to which the
Company or any
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Subsidiary is a party or to which any of their respective assets or properties
are subject, where the failure to obtain such consent, authorization, order,
waiver or approval, or make such registration, declaration or notice, or filing,
or where the occurrence of such violation or conflict would have a material
adverse affect; and
4.5.5 will not result in the creation of any lien, charge or
encumbrance against the Company, or any Subsidiary or any of their assets or
properties.
4.6 RADIO STATIONS. The Disclosure Letter contains a true and complete
list of the radio stations operated by the Company and the Subsidiaries
(collectively, the "Stations" and each, a "Station"; in addition, radio stations
XETRA (AM) and XETRA (FM), as to which the Company's Subsidiary, Noble Broadcast
of San Diego, Inc. ("Noble San Diego") holds certain contract rights, are
sometimes referred to together herein as the "Mexican Stations", whereas the
remaining Stations are sometimes referred to collectively herein as the
"American Stations"). The Disclosure Letter also lists with respect to each
Station, the market in which the Station operates, the Station's call letters,
the frequency on which the Station broadcasts, and the Station's current
broadcast format. With respect to the Mexican Stations, Noble San Diego is a
party to a certain Exclusive Sales Agency Agreement, dated May 12, 1978, between
Radiodifusora Del Pacifico, S.A. ("R.D.P.") and Noble San Diego (f/k/a Noble
Multimedia Communications, Inc.), as successor in interest to X-TRA Radio
America, Inc., as amended by a certain Amendment to Exclusive Sales Agency
Agreement, dated as of November 1, 1986, by and between R.D.P. and Noble San
Diego (f/k/a Noble Multimedia Communications, Inc.) (the "Sales Agency
Agreement"). The Company has previously delivered to Buyer a true, correct and
complete copy of the Sales Agency Agreement, as amended. Noble San Diego is not
in default, violation or breach of, and no event exists which could give rise to
a right of termination or acceleration (or an event which with notice or lapse
of time or both could give rise to a right of termination or acceleration) of,
the Sales Agency Agreement and the consummation of the transactions contemplated
by this Agreement will not cause Noble San Diego to be in default thereunder.
Neither the Company nor any Subsidiary (including, without limitation, Noble San
Diego) has knowledge of any default, violation or breach of the Sales Agency
Agreement by R.D.P.
4.7 GOVERNMENT AUTHORIZATIONS.
4.7.1 The Disclosure Letter contains a true and complete list
of all licenses, permits, approvals, consents and other authorizations
(including without limitation those issued or granted by Governmental Entities)
which are required for the lawful conduct of the business and operations of the
Company and the Subsidiaries (including without limitation the operation of the
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American Stations), in the manner and to the full extent they are presently
conducted. The foregoing listing includes, without limitation, all required
Federal Communication Commission ("FCC") licenses (including auxiliary licenses
associated with each American Station), Section 325 authorizations, permits,
approvals, consents and other authorizations (collectively, the "American
Station Licenses"). All of such licenses, permits, approvals, consents and other
authorizations (including without limitation the American Station Licenses) are
each referred to herein individually as a "Permit" and collectively as the
"Permits."
4.7.2 The Company has previously delivered to Buyer true,
correct and complete copies of the American Station Licenses and the other
Permits, including without limitation any and all amendments and other
modifications thereto. The American Station Licenses and the other Permits are
in good standing and are in full force and effect. The American Station Licenses
are unimpaired by any act or omission of the Company, any Subsidiary or any of
their officers, directors or employees or of any Seller. The operation of each
of the American Stations is in accordance with the American Station Licenses
relating thereto and the underlying construction permits and the other Permits.
4.7.3 The Company has previously delivered to Buyer true,
correct and complete copies of all concessions, licenses, permits, approvals,
consents and other authorizations issued by the Mexican Secretaria de
Comunicaciones y Transportes ("SCT") or other Governmental Entity (collectively,
the "Mexican Station Licenses") issued to R.D.P. or the Company or any
Subsidiary and relating to the operation of the Mexican Stations as now
operated. Except as set forth in the Disclosure Letter, to the Company's
knowledge, the Mexican Station Licenses are in good standing and are in full
force and effect. Except as set forth in the Disclosure Letter, the Mexican
Station Licenses are unimpaired by any act or omission of the Company, any
Subsidiary or any of their officers, directors or employees or of any Seller;
provided that no representation is made by the Company that the Company's
purchase of air time and provision of programming under the Sales Agency
Agreement has been authorized by the SCT or is in compliance with applicable
Mexican law. Except as set forth in the Disclosure Letter, to the Company's
knowledge, the operation of each of the Mexican Stations is in accordance with
the Mexican Station Licenses relating thereto and the underlying construction
permits and the other Permits; provided that no representation is made by the
Company that the Company's purchase of air time and provision of programming
under the Sales Agency Agreement has been authorized by the SCT or is in
compliance with applicable Mexican law.
4.7.4 The Company or its Subsidiaries are the authorized legal
holder of the American Station Licenses and other Permits, none of which is
subject to any restrictions or conditions which would limit in any respect the
full operation of the Stations as
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now operated. To the Company's knowledge, R.D.P. is the authorized legal holder
of the Mexican Station Licenses.
4.7.5 Except as set forth in the Disclosure Letter, there are
no applications, complaints or proceedings pending or to the knowledge of the
Company threatened before the FCC or any Governmental Entity relating to the
business or operations of the American Stations, the Company or any Subsidiary.
To the knowledge of the Company, except as set forth in the Disclosure Letter,
there are no applications, complaints or proceedings pending or threatened
before the SCT or any Governmental Entity relating to the business or operations
of the Mexican Stations.
4.7.6 No proceedings are pending or to the Company's knowledge
are threatened, and no circumstances exist or to the Company's knowledge are
reasonably expected to arise, which may result in the revocation, modification,
non-renewal or suspension of any of the American Station Licenses or the other
Permits, the denial of any pending applications, the issuance of any cease and
desist order, the imposition of any administrative actions by the FCC or any
other Governmental Entity with respect to the American Station Licenses or the
other Permits or which may affect the Company's and each Subsidiary's ability to
continue to operate each of the American Stations as they are currently
operated.
4.7.7 To the Company's knowledge, no proceedings are pending or
threatened which may result in, the revocation, modification, non-renewal or
suspension of any of the Mexican Station Licenses, the denial of any pending
applications, the issuance of any cease and desist order, the imposition of any
administrative actions by the SCT or any other Governmental Entity with respect
to the Mexican Station Licenses or which may affect the Company's and each
Subsidiary's ability to continue to operate each of the Mexican Stations as they
are currently operated (including, without limitation, performance by the
parties thereto of their obligations under the Sales Agency Agreement in the
manner currently performed).
4.7.8 Except as set forth in the Disclosure Letter, each of the
American Stations is operating with the maximum facilities specified by the
American Station License pertaining thereto, and such American Station License
specifies the maximum facilities allowed by law and international treaty. Except
as set forth in the Disclosure Letter, to the Company's knowledge each of the
Mexican Stations is operating, with the maximum facilities specified by the
Mexican Station License pertaining thereto and such Mexican Station License
specifies the maximum facilities allowed by law and international treaty. To the
Company's knowledge, none of the Stations are causing objectionable interference
to the transmissions or reception by the public of any other broadcast station
or communications facility nor have any of the Stations, Sellers, the Company or
any Subsidiary received any
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complaints, notices or communications with respect thereto. No other broadcast
station or communications facility is causing objectionable interference to the
respective transmissions of any of the Stations or the public's reception of
such transmissions.
4.7.9 Except as set forth in the Disclosure Letter, neither the
Company, any Subsidiary nor any Seller has any reason to believe that the
Station Licenses and the other Permits will not be renewed in their ordinary
course. All reports, forms and statements required to be filed by the Company or
any Subsidiary with the FCC, SCT or any other Governmental Entity with respect
to each of the Stations since the later of (A) the initial grant of, or (B) the
grant of the last renewal of, each of the Station Licenses have been filed and
are complete and accurate. There are no facts which, under the Communications
Act of 1934, as amended, or the existing rules, regulations, requirements and
policies of the FCC, would disqualify any Seller, the Company or any Subsidiary
as a transferor to Buyer of the American Licenses.
4.8 COMPLIANCE WITH REGULATIONS OF FCC AND ALL OTHER GOVERNMENTAL
ENTITIES. The operation of the American Stations is in compliance in all
material respects with: (A) all applicable engineering standards required to be
met under applicable rules, regulations, guidelines, policies and industry
standard engineering practices; and (B) all other applicable rules, regulations,
requirements and policies of any Governmental Entity, including, but not limited
to, equal employment opportunity policies of the FCC, as applicable, all
applicable painting and lighting requirements of the FCC, as applicable, and the
Federal Aviation Administration and ANSI Radiation Standards C95.1 - 1992, and
there are no existing or, to the knowledge of the Company, any threatened claims
to the contrary.
4.9 COMPLIANCE WITH APPLICABLE LAW; ADVERSE RESTRICTIONS. Except as set
forth in the Disclosure Letter:
4.9.1 The Company and each Subsidiary are presently conducting
their respective businesses in material compliance with all applicable laws,
rules, regulations, ordinances and other requirements of all Governmental
Entities (each individually, a "Statute" and collectively, "Statutes");
4.9.2 The Company and each Subsidiary are presently conducting
their respective businesses in material compliance with all applicable orders,
writs, injunctions, judgments, decrees, awards and other directives of all
Governmental Entities (each individually, a "Decree" and collectively,
"Decrees");
4.9.3 No Seller, the Company or any Subsidiary has received
notification of any failure to comply with any Statute or Decree and no material
violation of any Statute or Decree exists or
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will exist as a result of the consummation of any of the transactions
contemplated by this Agreement;
4.9.4 Neither the Company nor any Subsidiary, nor any director,
officer, employee or other person (including any Seller) acting on behalf of the
Company or any Subsidiary, has made or agreed to make any contribution, payment
or gift of funds or property to any official, employee or agent of any
Governmental Entity which was illegal, or if made would be illegal;
4.9.5 Neither the Company nor any Subsidiary has established or
maintained any material unrecorded fund or asset for any purpose, and there are
no material false entries on any books or records of the Company or any
Subsidiary;
4.9.6 Each Seller, the Company and each Subsidiary has filed in
a timely manner all reports, documents and other materials required to be filed
by it under the applicable laws and regulations of any Governmental Entity
applicable to the Company and its Subsidiaries with respect to which the failure
to file could have a material adverse effect on the Company or any Subsidiary;
and
4.9.7 The Company and each Subsidiary have possession of all
records and documents required to be retained under the applicable laws and
regulations of any Governmental Entity.
4.10 FINANCIAL STATEMENTS.
4.10.1 The Company has previously delivered to Buyer true and
correct and complete copies of the following consolidated financial statements:
(A) the audited balance sheet of the Company and the Subsidiaries as of December
25, 1994 and the related audited statements of income, retained earnings and
cash flows for the year then ended; (B) the unaudited balance sheet of the
Company and the Subsidiaries as of December 31, 1995 and the related unaudited
statements of income, retained earnings and cash flows for the year then ended.
The documents set forth in (A) and (B) of this paragraph are referred to
collectively herein as the "Financial Statements." The December 25, 1994 balance
sheet included in the Financial Statements is referred to herein as the "Base
Balance Sheet."
4.10.2 Except as set forth in the Disclosure Letter, and with
respect only to Financial Statements which are unaudited except for normal
recurring year-end adjustments, the Financial Statements: (A) are in accordance
with the books and records of the Company and the Subsidiaries; (B) are complete
and correct and present fairly the consolidated financial position of the
Company and the Subsidiaries as of the dates thereof and the consolidated
results of operations and cash flow for the periods covered thereby; (C) have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the
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periods covered thereby; and (D) reflect adequate reserves for all known
liabilities and reasonably anticipated losses.
4.10.3 Except as set forth in the Disclosure Letter, during the
periods reflected in the Financial Statements and on a consolidated basis, the
Company and the Subsidiaries did not have any extraordinary items of income or
profits, except as fairly and accurately disclosed on the Financial Statements.
4.10.4 The Company has previously delivered to Buyer true and
correct and complete copies of, with respect to the Company and each Subsidiary:
(A) all accountants' reports for the last three years (including without
limitation, all "management letters" and "management reports"); (B) all
auditor's letters regarding internal accounting controls for the last three
years; (C) all attorneys responses to audit letters for the last three years;
(D) the most recently prepared projections prepared for the current fiscal year
ending December 31, 1995 and all budgets and projections prepared for the fiscal
year ending December 29, 1996 (provided, however, that no representation is made
as to the achievability of any budgets or projections); (E) the most recent
reviews or comparisons of actual versus projected or budgeted results for the
current fiscal year; and (F) any documents relating to extraordinary write-downs
or write-offs during the past three years.
4.11 TAX MATTERS.
4.11.1 As used herein, "Tax" or "Taxes" means with respect to
the Company and any Subsidiary: (A) all income taxes (including any tax on or
based upon net income, gross income, income as specially defined, earnings,
profits or selected items of income, earnings or profits) and all gross
receipts, sales, use, ad valorem, transfer, franchise, license, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property or
windfall profits taxes, alternative or add-on minimum taxes, customs duties or
other taxes, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts imposed
by any taxing authority (domestic or foreign) on such entity; and (B) any
liability for the payment of any amount of the type described in the immediately
preceding clause (A) as a result of being a "transferee" (within the meaning of
IRC Section 6901 or any other applicable law) of another entity or a member of
an affiliated or combined group.
4.11.2 Except as disclosed in the Disclosure Letter and except
for Taxes resulting from the transactions contemplated hereby:
4.11.2.1 The Company and each Subsidiary have timely
filed all applicable federal, state and local tax returns,
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informational returns, reports and declarations of estimated tax required to be
filed by it with respect to all Taxes applicable to the Company, the
Subsidiaries and their respective businesses (each, a "Company Tax Return" and
collectively, the "Company Tax Returns");
4.11.2.2 The Company and each Subsidiary have timely
paid all Taxes owing by it except Taxes which have not yet become due and
payable and for which adequate provision has been made in the Financial
Statements, and except for federal and state income taxes payable for its
taxable year ended December 31, 1995.
4.11.2.3 Since the date of the Base Balance Sheet,
no liability for Taxes has been assessed, proposed to be assessed, incurred or
accrued against the Company or any Subsidiary other than in the ordinary course
of business, except for federal and state income taxes payable for its taxable
year ended December 31, 1995.
4.11.2.4 All Taxes which the Company or any
Subsidiary is required to withhold or collect from its employees or other third
parties have been properly withheld or collected and timely paid or deposited
with the appropriate Government Entity;
4.11.2.5 No waiver of any statute of limitations has
been given or is in effect with respect to any Company Tax Return or Taxes for
which the Company or any Subsidiary is or may be liable;
4.11.2.6 The Company Tax Returns filed are accurate
and complete in all material respects; and
4.11.2.7 Neither the Internal Revenue Service nor any
other taxing authority has requested to examine or audit the Company Tax Returns
or has asserted, is now asserting or threatening to assert against the Company
or any Subsidiary any deficiency or claim for additional Taxes or interest
thereon or penalties in connection therewith. There are no present or
anticipated disputes with respect to Taxes.
4.11.3 True, correct and complete copies of all Company Tax
Returns for the three prior fiscal years of the Company and its Subsidiaries
have been provided to Buyer. With respect to the current fiscal year and the
three prior fiscal years of the Company and its Subsidiaries, there are and have
been no examinations, reports or statements of deficiencies assessed against or
agreed to by any of the Company or any of its Subsidiaries.
4.11.4 None of the Company and its Subsidiaries has filed a
consent under Section 341(f) of the Internal Revenue Code of 1986, as amended
(the "Code") concerning collapsible corporations. None of the Company and its
Subsidiaries has made any
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payments, is obligated to make any payments, or is a party to any agreement that
under certain circumstances could obligate it to make any payments that will not
be deductible under Code Section 280G of the Code. None of the Company and its
Subsidiaries has been a United States real property holding corporation within
the meaning of Code Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code. Each of the Company and its
Subsidiaries has disclosed on its federal Company Tax Returns all positions
taken therein that could give rise to a substantial understatement of federal
income tax within the meaning of Section 6662 of the Code. There has been no
ownership change, within the meaning of Code Section 382(g), in the Company or
any Subsidiary after December 31, 1988 and prior to August 18, 1995. Except for
such agreements listed in the disclosure letter and true, complete and correct
copies of which have been delivered to Buyer, none of the Company or any of its
Subsidiaries is a party to any tax allocation or sharing agreement with respect
to Taxes. Except as set forth in the Disclosure Letter, none of the Company or
any of its Subsidiaries has been a member of an affiliated group filing a
consolidated federal income tax return other than a group the common parent of
which is the Company.
4.11.5 The Disclosure Letter sets forth certain information
with respect to each of the Company and each of its Subsidiaries as of the most
recent practicable date, including: (A) the basis of the Company and each
Subsidiary in its assets; (B) the basis of the Company in the stock of each
Subsidiary; (C) the amount of any net operating loss, net capital loss, unused
investment or other credit, unused foreign tax, or excess charitable
contribution allocable to the Company and each Subsidiary; and (D) the amount of
any deferred gain or loss allocable to the Company and each Subsidiary arising
out of any deferred intercompany transaction and all restrictions, if any, on
the use thereof.
4.11.6 None of the Company or its Subsidiaries has any
liability for the taxes of any person other than the Company and its
Subsidiaries: (A) under Treasury Regulation Section 1.1502-6 (or any similar
provision of state, local or federal law); (B) as a transferee or successor; (C)
by contract; or (D) otherwise.
4.12 TITLE TO PROPERTIES; LIENS; CONDITION OF PROPERTIES.
4.12.1 The Disclosure Letter sets forth a listing of all the
real property owned by the Company and its Subsidiaries at the date hereof, and
all the leases under which the Company and its Subsidiaries lease real property
at the date hereof, including without limitation a listing of all tower and
transmitter sites (the "Real Property"). The Disclosure Letter also sets forth a
listing of all material items of intangible personal property and all material
items of tangible personal property owned by the
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Company and its Subsidiaries at the date hereof and of all the material leases
and licenses which are not cancelable upon thirty (30) days or less notice
without penalty, cost or other liability to or continuing obligation upon the
Company or any Subsidiary under which the Company and its Subsidiaries lease and
license tangible and intangible personal property at the date hereof (the
"Personal Property"). The Real Property and Personal Property are referred to
collectively herein as the "Property."
4.12.2 Except as noted in the Disclosure Letter:
4.12.2.1 The Company and each Subsidiary has good and
marketable title in fee simple (or its equivalent) to its respective Property
(except those assets subject to lease or license as described in the Disclosure
Letter), and insurable title with respect to such of the Real Property as is
owned by the Company or any Subsidiary.
4.12.2.2 The Company and each Subsidiary owns all of
its Property (except those assets subject to lease as described in the
Disclosure Letter) free and clear of all mortgages, pledges, liens, conditional
sale agreements, security interests, encumbrances, title defects, other charges,
adverse rights, interests, conditions, claims, notices, orders or directives,
except for liens for taxes not yet due and payable. There is no material
violation of any law or ordinance or private rights affecting or pertaining to
the Property. There are no parties other than the Company or the Subsidiaries in
possession of any part of the Property as lessees, tenants at will, tenants at
sufferance or otherwise.
4.12.2.3 All leases listed in the Disclosure Letter
are valid and subsisting and no default exists under any thereof nor is there
any event which with notice or lapse of time or both would give rise to a right
of termination or acceleration. The renewal of the tower lease for Station
WRVF-FM on terms and conditions previously disclosed and agreed to by Buyer was
signed by all parties thereto prior to the execution hereof. The new License
Agreement with respect to the transmitter housing and tower site for Station
KBCO on terms and conditions previously disclosed and agreed to by Buyer was
signed by all parties thereto prior to the execution hereof.
4.12.2.4 The Property comprises all of the intangible
assets and material tangible assets owned or used and necessary in the business
of the Company and each Subsidiary as currently operated.
4.12.3 The Disclosure Letter sets forth the addresses and
locations of all facilities (whether leased or owned) of the Company and each
Subsidiary and the addresses or locations of all places where or from which the
Company and each Subsidiary operate their businesses or store personal property,
if any.
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4.12.4 Except as specified in the Disclosure Letter:
4.12.4.1 All tangible personal property leased, owned
or used in the business of the Company and each Subsidiary as presently
conducted is in good working condition, has been properly maintained, is
suitable for the purposes for which it is used, and conforms to the requirements
of all laws, ordinances and regulations applicable to its use and ownership or
lease by the Company and each Subsidiary where the failure to so conform will
have a material adverse affect;
4.12.4.2 The buildings and structures (including, but
not limited to, towers and guy wires) leased, owned or operated by the Company
and each Subsidiary are located within the boundaries of the Real Property, and
are suitable and properly zoned for the purposes for which they are used; the
Real Property has full and free access to and from a public highway, street or
road and there is no action pending, or, to the knowledge of any Seller, the
Company or any Subsidiary, threatened which would impair or result in the
termination of such access; there are no easements or other rights of way or
rights of ingress or egress on, over or through the Real Property that are not
of record which could materially interfere with the use of the Real Property as
presently utilized; the buildings and structures leased, owned or operated by
the Company and each Subsidiary have been properly maintained; and there are no
outstanding work orders with respect to any painting, maintenance, repair,
alterations or otherwise to be performed thereon other than in the ordinary
course of business and with an anticipated aggregate cost of less than $50,000;
4.12.4.3 Except as set forth in the Disclosure
Letter, the continuation, validity and effectiveness of the leases (both for
Personal Property and Real Property) listed in the Disclosure Letter will in no
way be affected by the transactions contemplated by this Agreement. All such
leases, including all amendments thereto, are listed in the Disclosure Letter
and the Company has previously delivered to Buyer true and correct and complete
copies thereof; and
4.12.4.4 With respect to the Real Property occupied
by the Company and its Subsidiaries pursuant to leases, such leases are now in
full force and effect and neither the Company nor any Subsidiary is now in
material default of any such lease, neither the Company nor any Subsidiary has
performed or suffered any act to enable the landlord or lessor to cancel any
such lease, and the leases are enforceable by the Company and its Subsidiaries
in accordance with their respective terms.
4.12.5 The Disclosure Letter sets forth a listing of: (A) the
most recent title insurance policy or report; and (B) any survey within the
possession of the Company or any Subsidiary (or their representatives), for each
parcel of Real Property owned or
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leased by the Company and each Subsidiary, and the Company has previously
delivered to Buyer true, correct and complete copies thereof.
4.12.6 The Surveys (as defined in Section 8.14) shall not
reveal any condition or circumstance which adversely affects the current use by
the Company or applicable Subsidiary of the property in question in a material
way.
4.13 PATENTS, TRADEMARKS, TRADE NAMES, COPYRIGHTS AND SIMILAR
RIGHTS.
4.13.1 The Disclosure Letter sets forth a true and complete
list of all material patents, trademarks, logos, service marks, trade names,
copyrights or other intellectual or proprietary rights applied for, issued to or
used by the Company and each Subsidiary in the conduct of its business,
including without limitation the operation of the Stations (collectively, the
"Intellectual Properties", and each individually, an "Intellectual Property").
The Disclosure Letter also sets forth with respect to each such material item of
Intellectual Property the details of any federal, state, local or foreign
registration with respect thereto. The Company and each Subsidiary: (A) own all
Intellectual Properties used in the Company's and each Subsidiary's business,
including without limitation the operation of the Stations, (B) have no payment
or other obligation or liability to any third party with respect to the
ownership or use thereof, and (C) have not sold, licensed, sublicensed or
otherwise granted to any third party the right to use any such Intellectual
Properties.
4.13.2 To the knowledge of the Company or any Subsidiary,
neither the Company nor any Subsidiary has infringed upon or made any unlawful
use of, or received notice of any claimed infringement upon or unlawful use of,
any patent, trademark, logo, service mark, trade name, copyright or other
intellectual or proprietary right of any third party. Neither the Company nor
any Subsidiary has sent or otherwise communicated with any person regarding any
notice, charge, claim or assertion of, nor is there any present, impending or
threatened infringement by such other person of any intellectual property right
of the Company or any Subsidiary embodied within the Intellectual Properties.
4.13.3 All computer software located at the Company and each
Subsidiary or used in the business of the Company and each Subsidiary is
properly licensed and the Company or Subsidiary using such computer software is
authorized to use such computer software.
4.14 TRADE SECRETS AND CUSTOMER LISTS. Except as set forth in the
Disclosure Letter, the Company and each Subsidiary has the right to use, without
liability to others, all trade secrets, if any (including, without limitation,
customer lists) used in the business of the Company and each Subsidiary, and has
not disclosed,
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sold, licensed, sublicensed or otherwise granted to any third party the right to
use such trade secrets and information. Neither the Company nor any Subsidiary
uses or has in effect any form of proprietary information agreement with any
persons or entities except as set forth in the Disclosure Letter. Neither the
Company nor any Subsidiary is using or in any way making use of any confidential
information or trade secrets of any third party, including, without limitation,
a former employer of any present or past employee of the Company or any
Subsidiary.
4.15 ACCOUNTS RECEIVABLE. Except as set forth in the Disclosure Letter,
the accounts receivable of the Company and the Subsidiaries existing on the date
hereof have been created only in the ordinary course of business and represent
bona fide transactions completed in accordance with the terms and provisions
contained in any documents related thereto. All such accounts receivable (net of
any reserve or allowance for doubtful accounts established on the books of the
Company or a Subsidiary consistent with reasonable and customary accounting
practices) will be collectible in the ordinary course of business. Other than
intercompany notes receivable among the Company and its Subsidiaries, neither
the Company nor any Subsidiary has any notes receivable.
4.16 BORROWINGS AND GUARANTEES. Other than the Noble Indebtedness (as
defined below), the Company and its Subsidiaries have no liabilities or
obligations that would be required to be categorized as long-term debt (or as
the current portion of long-term debt) on a balance sheet prepared in accordance
with generally accepted accounting principles, including without limitation any
capital leases, and neither the Company nor any Subsidiary is a party to or
bound by any interest rate protection agreements, interest rate cap agreements,
interest rate collar agreements, or other similar arrangements. Except as set
forth in the Disclosure Letter, there are no agreements, obligations or
undertakings pursuant to which the Company or any Subsidiary is: (A) borrowing
or is entitled to borrow any money; (B) lending or has committed itself to lend
any money; or (C) a guarantor or surety with respect to the obligations or
liabilities of any person or entity. Except as set forth in the Disclosure
Letter, no Seller or any other person or entity has guaranteed or otherwise
secured any or all of the Noble Indebtedness or any other agreement, obligation
or undertaking of the Company or any Subsidiary. True and complete copies of all
such documents described above in this Section 4.16, including all amendments,
supplements or modifications thereto or waivers thereunder, have previously been
delivered by the Company to Buyer. Neither the Company, any Subsidiary nor any
Seller is in default of such agreements or undertakings listed in the Disclosure
Letter, and the consummation of the transactions contemplated by this Agreement
will not cause any Seller, the Company or any Subsidiary to be in default
thereunder. Neither the Company nor any Subsidiary has received any grants or
other payments from any
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Governmental Entity which the Company or any Subsidiary could have to repay
under any circumstances. Except as described in the Disclosure Letter, the
transactions contemplated by this Agreement (other than the San Diego
Transaction) will not require the approval or consent of any party from which
any Seller, the Company or any Subsidiary is borrowing or entitled to borrow
money or constitute a default of or give rise to a right of termination or
acceleration (or an event which with notice or lapse of time or both would give
rise to a right of termination or acceleration) under, any provision of any
contract, agreement or other instrument or arrangement pursuant to which the
Company or any Subsidiary is borrowing or entitled to borrow money.
4.17 BANKING RELATIONS AND POWERS OF ATTORNEY. All of the arrangements
which the Company or any Subsidiary have with any banking, savings or financial
institution, or investment banking or brokerage firm, are described in the
Disclosure Letter, indicating with respect to each of such arrangements the type
of arrangement maintained (such as, but not limited to, checking accounts,
loans, safe deposit box, etc.), the account number and the person or persons
authorized in respect thereof. Except as set forth in the Disclosure Letter,
neither the Company nor any Subsidiary has any outstanding powers of attorney.
4.18 CONTRACTS AND COMMITMENTS.
4.18.1 Except as set forth in the Disclosure Letter, and except
for agreements which by their terms are terminable upon notice of thirty (30)
days or less without material penalty, cost or other liability to or continuing
obligation upon the Company or any Subsidiary, as of the Redemption Closing
Date, neither the Company nor any Subsidiary is a party to or bound by any
written or oral, formal or informal:
4.18.1.1 continuing agreement for the future purchase
or sale of products, supplies, equipment or services (other than employment
agreements) which either calls for performance over a period of more than one
year or contemplates payments to or from the Company or any Subsidiary in an
amount in excess of $25,000 per annum;
4.18.1.2 agreement creating any payment obligations
after the date of the Base Balance Sheet in the amount of $25,000 or more, and
the aggregate of all such agreements creating any payment obligations after the
date of the Base Balance Sheet (regardless of the amount of the payment
obligations under any such agreement) does not exceed $100,000;
4.18.1.3 arrangements with ASCAP, BMI, radio
representatives, vendors of goods and services and all other entities under
which the Company or any Subsidiary enjoys an atypical discount;
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4.18.1.4 material agreements for the exchange of
advertising time on a Station for considerations other than cash ("Barter
Agreements"); the Disclosure Letter sets forth for each Station a detailed
schedule of all payables and receivables relating to the Barter Agreements as of
January 28, 1996;
4.18.1.5 agreement which, as a result of the execution
or delivery by any Seller, the Company or any Subsidiary, of this Agreement or
an Ancillary Document, or the consummation of the transactions contemplated
hereby or thereby (A) requires on behalf of the Company or any Subsidiary any
consent, authorization, waiver or approval of, or notice to, any third party, or
(B) would be violated or breached or give rise to a right of termination or
acceleration (or would be an event which with notice or lapse of time or both
would give rise to a violation, breach or right of termination or acceleration);
4.18.1.6 material agreement with any sales agent,
representative, distributor or broker of services or products of the Company or
any Subsidiary, including without limitation any time brokerage agreement of any
duration;
4.18.1.7 agreement containing covenants limiting the
freedom of the Company or any Subsidiary or any of their officers, directors,
employees or agents to compete in any line of business or with any person or
entity or in any geographic location or to use or disclose any information of
any person or entity;
4.18.1.8 agreement for the purchase of any assets,
properties or rights for a price in excess of $10,000 for any single asset,
property or right or in excess of $50,000 for all such assets, properties or
rights, whether or not in the ordinary course of business;
4.18.1.9 agreement currently in effect for the sale of
any assets, properties or rights of the Company or any Subsidiary for a price in
excess of $10,000 for any single asset, property or right, or having an
aggregate value in excess of $50,000 for all such assets, properties or rights,
whether or not in the ordinary course of business, other than sales of broadcast
time in the ordinary course of business;
4.18.1.10 material license agreement (as licensor or
licensee);
4.18.1.11 agreement with any employee, officer or
director of any Seller, the Company or any Subsidiary, or with any Affiliate of
any of them or any relative of them or any other person living in the household
of any of them, other than fringe benefits made available by the Company or any
Subsidiary generally to all of its employees;
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4.18.1.12 [Intentionally Omitted];
4.18.1.13 agreement which contains a material fixed
penalty or liquidated damages clause for late performance or other default by
the Company or any Subsidiary;
4.18.1.14 agreement entered outside of the ordinary
course of business; or
4.18.1.15 agreement (including without limitation, any
agreement with any employee or independent contractor) which gives the other
party thereto the right to take any action or forebear from taking any action by
reason of a change in voting control or change in the management of the Company
or any Subsidiary.
4.18.2 Neither the Company nor any Subsidiary is in default,
violation or breach of, and no event exists which could give rise to a right of
termination or acceleration (or an event which with notice or lapse of time or
both could give rise to a right of termination or acceleration) of, any
contracts, agreements or arrangements to which the Company or any Subsidiary is
a party or by which it is bound and the consummation of the transactions
contemplated by this Agreement will not cause the Company or any Subsidiary to
be in default thereunder, where any of the foregoing could have a material
adverse effect on the Company or any Subsidiary. Neither the Company nor any
Subsidiary has knowledge of any material default, violation or breach of any
such contract, agreement or arrangement by any other party thereto.
4.18.3 The Company has previously delivered to Buyer true,
correct and complete copies of all contracts, agreements and arrangements
disclosed pursuant to Section 4.18.1 including all amendments, supplements or
modifications thereto or waivers thereunder, including, without limitation,
complete memoranda of all of such contracts, agreements and arrangements which
are oral.
4.19 INSURANCE.
4.19.1 The Disclosure Letter sets forth a true, complete and
correct list and description (including type of insurance, carrier, amount of
coverage, policy number and policy period) of all policies of health, liability,
fire, workers' compensation and other forms of insurance of any nature
whatsoever presently in effect with respect to the Company and each Subsidiary
or its property, specifying any notice or other information possessed or known
by the Company or any Subsidiary regarding possible claims under, or
cancellation of, any such policies, or premium increases thereon. The Company
has previously delivered to Buyer true, correct and complete copies of each
insurance policy listed in the Disclosure Letter. All such policies are valid
and enforceable and in full force and effect, and are sufficient for all
applicable
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requirements of law and no event has occurred and no condition exists which
would allow coverage under such policies of insurance to be denied. None of such
policies will in any way be affected by, or terminate or lapse by reason of, any
of the transactions contemplated by this Agreement, other than the TBAs and the
sale of assets contemplated by the San Diego Transaction, and such changes as
may be caused by the reduction in the number of employees of the Company and its
Subsidiaries. Neither the Company nor any Subsidiary is in default regarding the
provisions of any such policy nor has the Company or any Subsidiary failed to
give any notice or present any claim thereunder in a timely fashion. There are
no outstanding claims under any such policy which have gone unpaid or as to
which the insurer has disclaimed liability, except for claims being defended
under a reservation of rights and the details of which are described in the
Disclosure Letter
4.19.2 Except as disclosed in the Disclosure Letter, neither
the Company nor any Subsidiary has been refused any insurance for which it has
applied or by any insurance carrier with which it has carried insurance during
the last five years.
4.19.3 The Company and each Subsidiary have maintained public
liability insurance for the last five years in such amounts and on such terms
and conditions materially equivalent to the policies currently in effect.
4.19.4 Neither the Company nor any Subsidiary has received any
notice from any of its insurers that any insurance rates will be increased in
the future beyond normal industry increases or that any insurance coverage
listed in the Disclosure Letter will not be available in the future on
substantially the same terms as are now in effect.
4.19.5 There are no outstanding written requirements or
recommendations by any current insurer or underwriter with respect to the
business of the Company or any Subsidiary which require or recommend material
changes in the conduct of such business or require any material repairs or other
work to be done with respect to the properties or assets of the Company or any
Subsidiary.
4.20 ABSENCE OF UNDISCLOSED LIABILITIES; ALLOCATION OF EXPENSES. Except
for financial liabilities or obligations expressly set forth in the agreements
pursuant to which the 1995 Restructuring was effectuated, and except as set
forth in the Disclosure Letter, neither the Company nor any Subsidiary has any
financial liabilities or obligations of a type required under generally accepted
accounting principles to be disclosed in the Financial Statements, whether
matured or unmatured, fixed or contingent, asserted or unasserted, except: (A)
liabilities stated or adequately reserved against in the Base Balance Sheet; and
(B) indebtedness for borrowed money or purchases of supplies incurred
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in the ordinary course of business since the date of the Base Balance Sheet.
4.21 ABSENCE OF CERTAIN CHANGES. Except in connection with the 1995
Restructuring, and except as set forth in the Disclosure Letter or the Financial
Statements, since the date of the Base Balance Sheet and with respect to the
Company and each Subsidiary, there has not been:
4.21.1 any material adverse change in financial condition,
properties, assets, liabilities, personnel or operations;
4.21.2 any contingent liability incurred which will not be
fully covered by the Company's insurance whether: (A) by reason of an event,
accident or occurrence known to the Company or any Subsidiary; or (B) as
guarantor, surety or otherwise with respect to the obligations of others;
4.21.3 any material obligation or liability incurred and
currently outstanding, including the obligation to perform services normally
conducted, other than obligations and liabilities incurred in the ordinary
course of business;
4.21.4 any purchase, sale or other disposition, or any
agreement or other arrangement for the purchase, sale or other disposition, of
any services, properties or assets, except in the ordinary course of business;
4.21.5 any material damage, destruction or loss affecting its
properties, assets or business which either was not or is not covered by
insurance, or is covered by insurance but has not yet been repaired or replaced;
4.21.6 any declaration, setting aside or payment of any
dividend, or the making of any other distribution in respect of, any class of
the capital stock, or any direct or indirect redemption, purchase or other
acquisition of its own capital stock;
4.21.7 any pending or threatened labor disputes or strikes,
labor union organizational activity, claim, threatened claim of unfair labor
practices, or any adverse change in relations with employees on a collective
basis;
4.21.8 any change in the compensation payable or to become
payable to any employee or any payment of a bonus to any employee, except any
increases granted in the ordinary course of business; provided that the increase
in aggregate compensation payable to the employees of the Company and the
Subsidiaries has not increased by more than the amounts reflected in the 1995
Financial Statements and 1996 budget referred to in Section 4.10.4;
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4.21.9 any loans or advances made by it which remain
outstanding other than intercompany loans;
4.21.10 any obligation or liability incurred to any of its
shareholders, officers or directors except normal compensation, fringe benefits
and expense allowances incurred in the ordinary course of business;
4.21.11 any material change in invoicing or collection
procedures or any discounts or rebates granted to any customer other than in the
normal and customary manner consistent with prior practices;
4.21.12 other than matters which will be fully covered by the
Company's insurance, any settlement, compromise or agreement to settle or
compromise any claim, litigation, action or proceeding;
4.21.13 any material change in accounting methods, principles
or practices;
4.21.14 any material change in the amount of insurance coverage
or change in insurance carriers;
4.21.15 any material expenditure made which is either not
reflected as an asset in the Company's consolidated accounts or which is not
deductible for federal income tax purposes;
4.21.16 other than the execution of this Agreement and the
Ancillary Documents to which it is a party, any action taken outside of the
ordinary course of business; or
4.21.17 any agreement or understanding to do any of the
foregoing.
4.22 EMPLOYEE BENEFITS.
4.22.1 Except as specified in the Disclosure Letter, neither
the Company nor any Subsidiary has an "employee pension benefit plan" as defined
in Section 3(2) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), including any "multiemployer plan" as defined in Section
3(37) of ERISA (such plans so noted shall be referred to as the "Retirement
Plans"), "employee welfare benefit plan" as defined in Section 3(1) of ERISA
including without limitation post-employment benefit and retiree medical plans,
funds and programs ("Benefit Plans") or a "specified fringe benefit plan" as
defined in Section 6039D of the Code ("SFB Plans") (together, the Retirement
Plans, Benefit Plans and SFB Plans noted in the Disclosure Letter shall be
referred to collectively as the "Plans" and individually as a "Plan"). All Plans
are maintained by the Company.
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4.22.2 Each Plan is, and has been at all times, operated in
compliance with all statutes, orders or governmental rules or regulations,
including but not limited to ERISA and the Code, and any and all collective
bargaining agreements and other contracts.
4.22.3 The Retirement Plans, and their related trusts, if any,
are qualified and tax-exempt under Sections 401 and 501 of the Code. The Company
has received favorable determination letters from the Internal Revenue Service
with respect to the qualification and tax exempt status of the Retirement Plans
and their related trusts, if any, under the Code, and nothing has occurred (or
failed to occur) since to cause a loss of the Plans' qualification and
tax-exempt status. Each of the Plans meets the requirements necessary to rely on
the extended remedial amendment period provided under Internal Revenue Service
Notice 92-36 and subsequent pronouncements.
4.22.4 All required reports and descriptions of the Plans
(including IRS Form 5500 Annual Reports, Summary Annual Reports and Summary Plan
Descriptions) have been appropriately filed and distributed.
4.22.5 All notices required by ERISA, the Code or any other
state or federal law, ruling or regulation with respect to the Plans have been
appropriately filed.
4.22.6 All contributions to the Plans for all periods ending on
or before the Redemption Closing Date have been made and all contributions to
the Plans for all periods ending on or before the Stock Closing Date (including
periods from the first day of the plan year in which the Stock Closing occurs)
will be made prior to the Stock Closing by the Company and each Subsidiary in
accordance with past practice and no Plans are currently or shall be unfunded or
underfunded as of the Stock Closing.
4.22.7 All insurance premiums (including premiums to the
Pension Benefit Guaranty Corporation) have been paid in full in a timely manner.
4.22.8 With respect to the Plans, no prohibited transactions
(as defined in Section 406 of ERISA or Section 4975 of the Code) or reportable
events (as defined in Section 4043 of ERISA) have occurred.
4.22.9 With respect to the Retirement Plans subject to the
minimum funding requirements of Section 412 of the Code or Section 302 of ERISA,
such requirements have always been satisfied.
4.22.10 No action, suit, grievance, arbitration or other manner
of litigation, or claim with respect to the Plans or the assets thereof (other
than routine claims for benefits made in the ordinary course of plan
administration for which plan administra-
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tive review procedures have not been exhausted) are pending, threatened or
imminent against or with respect to the Plans, the Company, any Subsidiary or
any fiduciaries (as defined in Section 3(21) of ERISA) of the Plans (including
any action, suit, grievance, arbitration or other manner of litigation, or claim
regarding conduct which allegedly interferes with the attainment of rights under
a Plan); and there are no facts which would give rise to or could give rise to
any such action, suit, grievance, arbitration or other manner of litigation or
claim.
4.22.11 Neither the Company nor any Subsidiary has ever
contributed, nor has it ever been required to contribute, to any "multiemployer
plans" (as defined in Section 3(37) of ERISA) and neither the Company nor any
Subsidiary has or will incur any withdrawal liability with respect to any such
plans.
4.22.12 Except as set forth in the Disclosure Letter, neither
the Company nor any Subsidiary has any stock purchase plan, stock option plan,
phantom stock plan, stock appreciation rights plan, bonus plan or any severance,
deferred compensation or retirement plans or similar agreements (whether or not
subject to ERISA).
4.22.13 The Company and each Subsidiary has complied with COBRA
including but not limited to the provision to employees of the required
notification and election forms. All health insurance plans offered to employees
of the Company and its Subsidiaries have been administered in accordance with
the terms of such plans.
4.22.14 Any and all post-employment benefit plans, funds and
programs and retiree medical plans, funds and programs of the Company or its
Subsidiaries have been fully funded and neither the Company, any Subsidiary nor
any Seller has any further obligation to make any additional contributions to
such plans.
4.23 EMPLOYEES; INDEPENDENT CONTRACTORS; LABOR MATTERS.
4.23.1 Except as disclosed in the Disclosure Letter, there are
no currently effective material consulting agreements, employment agreements,
agreements with independent contractors or other agreements, whether written or
oral, with consultants, full-time employees or independent contractors to which
the Company or any Subsidiary is a party. The Company has previously delivered
to Buyer true, complete and correct copies of all such consulting, employment
and independent contractor agreements. All consulting, employment and
independent contractor agreements identified in the Disclosure Letter are
enforceable by the Company or a Subsidiary, as applicable, against such
consultant, employee or independent contractor in accordance with the terms of
such agreement, except as limited generally by applicable laws and regulations,
and past judicial decisions.
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4.23.2 The Disclosure Letter sets forth the name, rate of
compensation (including bonuses, anticipated bonuses, deferred compensation,
severance or termination benefits, and other remunerative payments, if any) and
hire date of each full-time employee of the Company and each Subsidiary.
4.23.3 Except as described in the Disclosure Letter, the
Company's and each Subsidiary's employment of each officer, employee and
consultant of the Company and such Subsidiary is terminable on an at-will basis
without cost or other liability to the Company and such Subsidiary, except as
limited generally by applicable laws and regulation, and past judicial
decisions. Neither the Company, any Subsidiary nor any Seller has received
notice or is aware of any officer, employee and/or agent of the Company or such
Subsidiary who will terminate their relationship with the Company or such
Subsidiary upon or after the execution of this Agreement.
4.23.4 Except as described in the Disclosure Letter, each
independent contractor agreement, arrangement or relationship is terminable by
the Company or a Subsidiary without material cost or other liability to the
Company and such Subsidiary. Neither the Company nor any Subsidiary has any
reason to believe that any independent contractor of the Company or any
Subsidiary is an employee of the Company or any Subsidiary within the meaning of
"employee" under the Code or under any applicable state or local law. Neither
the Company, any Subsidiary nor any Seller has received notice or is aware of
any independent contractor of the Company or such Subsidiary who will terminate
their relationship with the Company or such Subsidiary upon or after the
execution of this Agreement.
4.23.5 Except as set forth in the Disclosure Letter, neither
the Company nor any Subsidiary is a party to or has any obligations under any
collective bargaining agreement or otherwise with any labor organization or
other entity regarding the rate of pay or working conditions of any of the
employees of the Company or any Subsidiary, nor is the Company or any Subsidiary
obligated under any agreement to recognize or bargain with any labor
organization or union.
4.23.6 Except as disclosed in the Disclosure Letter, there is
no, and during the past two years there has not been any, labor union
organizational activity among any of the Company's or any Subsidiary's employees
of which the Company has knowledge.
4.23.7 The Company and each Subsidiary are in material
compliance with all applicable laws and regulations of any Governmental Entity
concerning the employer/employee relationship, including without limitation
provisions thereof relating to employment discrimination, wages, bonuses,
overtime pay, hours of work and the payment of social security taxes. Neither
the Company
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nor any Subsidiary is liable for any unpaid wages, bonuses or commissions or any
Tax, penalty, assessment or forfeiture for failure to comply with any of the
foregoing. Neither the Company nor any Subsidiary has effected a "plant closing"
or "mass layoff" as those terms are defined in the Worker Adjustment and
Retraining Notification Act ("WARN"), or taken any other action that would cause
the Company or any Subsidiary or Buyer to incur any liability or obligation
under WARN or under any state law dealing with plant closings, mass layoffs or
severance pay benefits.
4.23.8 Except as set forth in the Disclosure Letter, there are
no pending, or to the Company's or any Subsidiary's knowledge threatened,
claims, investigations, charges, citations, hearings, consents, decrees or
litigation involving the Company or any Subsidiary with respect to: (A) wages,
compensation, bonuses, commissions or awards or payroll deductions; (B) equal
employment or human rights violations regarding race, color, religion, sex,
national origin, age, handicap, veteran's status, marital status, disability or
any other recognized attribute or protected classification under any applicable
equal employment laws of any Governmental Entity prohibiting discrimination; (C)
representation petitions or unfair labor practices; (D) grievances or
arbitrations pursuant to current or expired collective bargaining agreements;
(E) occupational safety and health; (F) worker's compensation; (G) wrongful
termination, promissory estoppel, implied contract, breach of covenant of good
faith or fair dealing, negligent hiring, invasion of privacy, infliction of
emotional distress or defamation; (H) immigration; or (I) affirmative action
requirements.
4.24 LITIGATION, PROCEEDINGS, ETC. Except for matters described in the
Disclosure Letter:
4.24.1 Neither the Company, any Subsidiary nor any Seller has
received any notice of any action, litigation, suit or proceeding against, or
investigation of the Company or any Subsidiary and no action, litigation, suit,
proceeding against or investigation is pending or to the knowledge of the
Company or any Subsidiary threatened against any Seller, the Company or any
Subsidiary (including without limitation any proceeding which seeks the
forfeiture of, or opposes the renewal of, any of the American Station Licenses
or Mexican Station Licenses), and to the knowledge of the Company or any
Subsidiary with respect to the American Stations Licenses there are no facts
existing which would be a proper basis for any of the foregoing. In particular,
but without limiting the generality of the foregoing, except for the filings
contemplated by Article VII hereof, there are no applications, complaints or
proceedings pending or to the knowledge of the Company or any Subsidiary
threatened before the FCC, SCT or any other Governmental Entity with respect to
any Seller, the Company, any Subsidiary or the American Stations or, to the
Company's knowledge, with respect to R.D.P. or the Mexican Stations; and
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4.24.2 There are no outstanding court, arbitration or agency
judgments, awards, writs, injunctions, orders, decrees, or stipulations to which
the Company or any Subsidiary is a party or subject.
4.24.3 Neither the Company nor any Subsidiary has any financial
obligation (whether fixed or contingent) arising out of the settlement of the
action by Urban Community Radio against the Company or any Subsidiary.
4.25 TRANSACTIONS WITH INTERESTED PERSONS. Except for matters described
in the Disclosure Letter, neither the Company, any Subsidiary, any Seller, nor
any director, officer or managerial employee of the Company or any Subsidiary
nor, to the Company's or any Subsidiary's knowledge, any of their respective
Affiliates, spouses, children, relatives or other person living in their
household:
4.25.1 owns directly or indirectly any interest in, or serves
as an officer or director of, any customer, competitor or supplier of the
Company or any Subsidiary or any organization which has a contract or
arrangement with the Company or any Subsidiary;
4.25.2 is owed any money or property by the Company or any
Subsidiary, other than wages or salary earned in the ordinary course of
business;
4.25.3 is indebted to the Company or any Subsidiary; or
4.25.4 owns any property, real or personal, tangible or
intangible, or has rights required for or used in the business of the Company or
any Subsidiary.
4.26 ENVIRONMENTAL MATTERS. As used within this Section 3.26, the term
"Noble Real Estate" shall include any and all real property now or at any time
owned, leased, operated or used by the Company or any Subsidiary and all strata,
soils, fill, foundation, sewers, septic systems, leach fields, piping, surface
waters, groundwater and other materials and improvements on, in or under such
real property.
The term "Environmental Law(s)" shall mean all federal, state and local
laws, regulations and ordinances intended to protect or preserve Natural
Resources and the Environment (each as defined below).
The terms "Hazardous Substance," "Release," "Environment,"
"Transportation" and "Natural Resources" shall have the same meanings and
definitions as set forth in the Comprehensive Environmental Response
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601 et seq. and
regulations promulgated thereunder (collectively "CERCLA") and any corresponding
state or local law or
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regulation, provided, however, that as used herein the term Hazardous Substance
shall also include: (A) any Pollutant or Contaminant as defined by CERCLA or by
any other Environmental Law; (B) any Solid Waste, Hazardous Constituent or
Hazardous Waste as defined by, or as otherwise identified by, the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq. or
regulations promulgated thereunder (collectively "RCRA") or by any other
Environmental Law; (C) crude oil, petroleum, and fractions or distillates
thereof; (D) any toxic substance or hazardous material as defined by any
Environmental Law; and (E) any infectious waste or medical waste as defined by
any applicable federal or state laws or regulations.
The terms "Storage," "Treatment" and "Disposal" shall have the same
meanings and definitions as set forth in RCRA.
Except as disclosed in the Disclosure Letter or in the Phase I reports
referenced therein, true, correct and complete copies of which have been
previously delivered by the Company to Buyer:
4.26.1 to the knowledge of the Company or any Subsidiary, there
are and have been no Hazardous Substances in or on the Noble Real Estate,
including without limitation, no asbestos-containing materials, polychlorinated
biphenyl-containing electrical or hydraulic equipment, urea-formaldehyde foam
insulation and lead-containing piping and paints incorporated into or contained
within any building or other structure on, in or under the Noble Real Estate;
4.26.2 to the knowledge of the Company or any Subsidiary, there
has been no Release, Treatment, Storage, Disposal or transportation of Hazardous
Substances on, in or from the Noble Real Estate;
4.26.3 the Company and each Subsidiary have at all times
operated their businesses and maintained the Noble Real Estate in material
compliance with all applicable laws, regulations and ordinances, including but
not limited to Environmental Laws and those pertaining to the protection of
human health, have not utilized, stored, accumulated or generated Hazardous
Substances except as permitted by such laws, regulations and ordinances, and
have secured all required Permits;
4.26.4 to the knowledge of the Company, there are no, and have
been no, underground storage tanks (including without limitation, tanks such as
those used to contain heating oil that may be exempt from regulation under RCRA
or corresponding state laws or regulations) located on the Noble Real Estate,
and with respect to any such underground storage tanks described in the
Disclosure Letter as having been removed, such tanks have been removed in full
compliance with applicable law;
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4.26.5 to the knowledge of the Company, there are no wetlands,
within the meaning of or as defined by the Clean Water Act 33 U.S.C. Section 404
and regulations promulgated thereunder and any other applicable federal, state
or local law or regulations, on the Noble Real Estate; and
4.26.6 there has been no, nor is there now any pending, ongoing
or unresolved or to the knowledge of the Company or any Subsidiary threatened,
administrative or enforcement actions, investigations, compliance orders,
claims, demands, actions or other litigation, based on CERCLA, RCRA or other
Environmental Laws or otherwise related to the presence of Hazardous Substances
in or on, or transported from, the Noble Real Estate or other environmental
condition of the Noble Real Estate brought by Governmental Entities or other
third parties ("Environmental Claims"); nor has the Company or any Subsidiary
received any information requests, special notice or general notice letters or
other communications indicating or suggesting the possibility or threat of
Environmental Claims nor is the Company or any Subsidiary aware of any basis for
the possibility or threat of Environmental Claims.
4.27 FINDER'S FEE. Except as set forth in the Disclosure Letter,
neither the Company nor any Subsidiary has incurred or become liable for any
broker's commission, finder's fee or payment to any other intermediary relating
to or in connection with the transactions contemplated by this Agreement, or
otherwise dealt with any brokers, finders or intermediaries in connection
herewith.
4.28 TAKEOVER STATUTES. No "fair price," "moratorium," "control share
acquisition" or other similar antitakeover statute or regulation is applicable
to the Company, any Subsidiary, the Class A Stock, the Class B Stock, the
Warrants, or any of the transactions contemplated by this Agreement or by any of
the Ancillary Documents.
4.29 DISCLOSURE. No representation or warranty made by any the Company
or any Subsidiary in this Agreement, the Disclosure Letter (or any document to
be attached thereto pursuant to the terms of this Agreement), any Ancillary
Document, or in any schedule, certificate or exhibit prepared and furnished or
to be prepared and furnished by the Company, the Subsidiaries or their
representatives pursuant hereto or thereto, or in connection herewith or
therewith, contains or will contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements or
facts contained herein or therein not misleading in light of the circumstances
under which they were furnished.
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ARTICLE V
5 REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce the Company and Sellers to enter into this
Agreement, Buyer hereby makes the following representations and warranties to
the Company and Sellers (the "Buyer's Representations and Warranties"). The
Buyer's Representations and Warranties shall be true and correct in all respects
as of the date hereof and at all times hereafter subject to the provisions
hereof regarding the expiration thereof and changes expressly contemplated
hereby.
5.1 ORGANIZATION. Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio.
5.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Buyer has the full power and
authority, and has taken all necessary and proper action, to execute and deliver
this Agreement and the Ancillary Documents to which Buyer is or will be a party,
and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement and each of the Ancillary Documents to
which Buyer is or will be a party, and the consummation by Buyer of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been, and
each of the other Ancillary Documents to which Buyer is or will be a party will
be, duly executed and delivered by Buyer. The obligations imposed on Buyer by
this Agreement are, and by each of the Ancillary Documents to which Buyer is or
will be a party when executed and delivered by Buyer will be, the valid and
binding obligations of Buyer enforceable against Buyer in accordance with their
respective terms. Buyer makes each of the representations and warranties set
forth in this Section 5.2 with respect to the execution, delivery, and
consummation by any subsidiary of Buyer of any Ancillary Document to which such
subsidiary is a party.
5.3 NONCONTRAVENTION. The execution, delivery and performance by Buyer
of this Agreement and each of the Ancillary Documents to which Buyer is a party,
and the performance and consummation by Buyer of the transactions contemplated
hereby and thereby:
5.3.1 other than the governmental and regulatory consents and
approvals required by Article VII hereof, do not require on behalf of Buyer any
consent, authorization, order, waiver or approval of, or registration,
declaration or filing with, any Governmental Entity;
5.3.2 will not result in a violation of any material law or
regulation, or any judgment, writ, injunction, order, rule,
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ruling or decree of any Governmental Entity to which Buyer is subject;
5.3.3 will not conflict with or constitute a breach or
violation of or default under the Certificate of Incorporation, Bylaws and other
governance documents of Buyer; and
5.3.4 other than the governmental and regulatory consents and
approvals required by Article VII hereof, does not require on behalf of Buyer
any consent, authorization, order, waiver or approval of, or registration,
declaration or notice to, or filing with any party, nor does it violate or
conflict with or result in a breach of, or constitute a default of or give rise
to a right of termination or acceleration (or an event which with notice or
lapse of time or both would give rise to a right of termination or acceleration)
under, any provision of any contract, indenture, mortgage, lease, agreement,
license, permit or other instrument to which Buyer is a party.
5.4 FINDER'S FEE. Except for R. C. Crisler, Buyer has not incurred or
become liable for any broker's commission or finder's fee relating to or in
connection with the transactions contemplated by this Agreement, or otherwise
dealt with any brokers or finders in connection herewith, and Buyer agrees that
it will pay all fees owing to R. C. Crisler.
5.5 ACQUISITION FOR INVESTMENT. Buyer is an "accredited investor" as
defined in Regulation D under the Securities Act of 1933, and is acquiring the
Class B Stock solely for its own account for the purpose of investment and not
with a view to or for sale in connection with any distribution thereof, and it
has no present intention or plan to effect any distribution thereof. Buyer
acknowledges that it is able to bear the financial risks associated with its
purchase of the Class B Stock and that it has been given access to such records
of the Company and the Subsidiaries and to the officers of the Company and the
Subsidiaries as it has deemed necessary and appropriate to conducting its due
diligence investigation; provided, however, that the foregoing acknowledgement
shall not affect in an manner Buyer's rights pursuant to Sections 6.1 hereunder
or Buyer's right to indemnification (whether pursuant to this Agreement or the
Indemnification and Escrow Agreement) as a result of a breach of any agreement,
covenant, representation or warranty given or made herein. Buyer acknowledges
and agrees that the Class B Stock have been registered under the Securities Act
or under the blue sky laws of any state, and that the same have been issued in
reliance upon the exemptions from registration afforded by appropriate
provisions of such laws.
5.6 DISCLOSURE. No representation or warranty made by Buyer in this
Agreement, any Ancillary Document, or in any schedule, certificate, or exhibit
prepared and furnished or to be prepared and furnished by Buyer or its
representatives pursuant hereto or
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thereto or in connection herewith or therewith, contains or will contain any
untrue statement of a material fact, or omits or will omit to state a material
fact necessary to make the statements or facts contained herein or therein not
misleading in light of the circumstances under which they were furnished.
ARTICLE VI
6 COVENANTS CONCERNING CONDUCT AND TRANSACTIONS
6.1 ACCESS PENDING STOCK CLOSING. Except as provided below, commencing
on the date hereof and through the Stock Closing Date or, if applicable, the
Termination Date, the Company shall, and the Company shall cause each Subsidiary
to, provide Buyer and its legal, accounting, financial and other representatives
and lenders full access (upon reasonable notice) during regular business hours
to the offices, books, records, officers, directors, employees, attorneys and
independent certified public accountants of the Company and its Subsidiaries,
and to furnish to Buyer and its representatives such financial and operating
data and other information not subject to attorney-client privilege with respect
to the business and properties of the Company and its Subsidiaries as Buyer and
its representatives may request. The information that may be examined by Buyer
includes but is not limited to all files, documents, records and books of
account relating to the operations of the Company, its Subsidiaries and the
Stations, the local public files, programming information and studies, technical
information and engineering data, news and advertising studies or consulting
reports, marketing and demographic data, filings with the FCC and any other
Governmental Entity, software programs, promotional materials and all contracts,
agreements and arrangements with advertisers, sponsors, Station personnel,
vendors, consultants, agents, suppliers, and any other persons having a
relationship with the Company or its Subsidiaries.
Notwithstanding the foregoing, it is the intention of the parties that
Noble Broadcast of Colorado, Inc. ("Noble Denver") be operated on a strictly
separate basis unless and until Buyer undertakes to time broker the Denver
Stations under a time brokerage agreement or joint sales agreement in accordance
with the Communications Act and FCC rules and policies and Section 8.11 hereto.
Until such time, Buyer shall not have direct access to the offices, books,
records, employees and premises of Noble Denver pursuant to this Section 6.1,
provided that the Company shall upon request provide Buyer with information
sufficient to permit Buyer to confirm that the Company is in compliance with the
terms of this Agreement.
Each of Buyer, Sellers and the Company shall hold, and will cause their
respective Affiliates, officers, directors, employees, agents, consultants, and
other representatives to hold, in strict
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confidence, unless compelled to disclose by judicial or administrative process
or by other requirements of law, all confidential or proprietary information
concerning the other parties furnished to it by the other parties or by such
other parties' officers, directors, employees, agents, consultants or
representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such information can be shown to
have been: (A) previously lawfully known by the party receiving such
information; (B) in the public domain through no fault of such receiving party;
or (C) later acquired by the receiving party from other sources known to the
receiving party to be bound themselves by a confidentiality agreement with the
disclosing party. No party hereto will disclose or otherwise provide any such
confidential or proprietary information to any other person, except to Buyers'
lenders and to the auditors, actuaries, attorneys, financial advisors or other
consultants and advisors of any such parties who need such information in
connection with this Agreement.
6.2 GENERAL COVENANTS REGARDING CONDUCT OF BUSINESS.
6.2.1 Commencing on the date hereof and through the Stock
Closing Date or, if applicable, Termination Date, except as otherwise
contemplated hereby or as agreed to in writing by Buyer, the Company shall, and
the Company shall cause each Subsidiary to, conduct its business in the ordinary
course and, by way of amplification and not limitation, to:
6.2.1.1 at all time exercise control over the
American Stations as required by the Communications Act of 1934, as amended,
(the "Communications Act") the rules and regulations of the FCC, and other
applicable policies and rules;
6.2.1.2 except as otherwise expressly contemplated
hereby, preserve intact, in all respects, its business organization and maintain
its good standing in all places in which it is qualified to do business as set
forth in the Disclosure Letter;
6.2.1.3 except as otherwise expressly contemplated
hereby, and subject to Buyer's time brokering of the TBA Stations pursuant to
the TBAs, preserve its relationships with advertisers, sponsors, Station
personnel, clients, customers, suppliers, consultants, employees and any other
persons having business relations with the Company, its Subsidiaries and the
Stations;
6.2.1.4 maintain all of the Property in good repair
and condition, normal wear and tear excepted, and to maintain in full force and
effect the insurance policies in respect of the Property, the Stations and the
employees of the Company and Subsidiaries;
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6.2.1.5 maintain its books of account and records in the usual
and ordinary manner, and in conformity with its past practices;
6.2.1.6 make all payments on indebtedness as the same become
due;
6.2.1.7 pay all Taxes imposed upon or owing by it, except to
the extent that any such Taxes are being contested in good faith and adequate
reserves are established on the books of the Company with respect thereto,
withhold or collect all Taxes from its employees or third parties that it is
required to collect or withhold, and timely pay or deposit the same with the
appropriate Governmental Entity, and file all Tax Returns required to be filed
by it; provided, however: (A) neither the Company nor any Subsidiary will file
tax returns for the year ending December 25, 1995 prior to September 15, 1996
and the Company and each Subsidiary will obtain all necessary extensions to do
so; (B) the Company and each Subsidiary shall consult with and accept reasonable
input from Buyer in preparing its federal, state and local tax returns for the
year ending December 31, 1995; and (C) the Company and its Subsidiaries will
prepare their federal, state and local income tax returns in a manner that
reflects the values set forth in this Agreement and documents pursuant to which
the San Diego Transaction is consummated; and
6.2.1.8 The Company and its Subsidiaries shall use their best
efforts to manage their assets with a tax basis less than a book basis so as not
to incur any material federal or state income tax liability in connection
therewith, provided that the consummation of the transactions contemplated by
this Agreement and the Ancillary Documents shall not be deemed a violation of
this covenant.
6.2.2 Commencing on the date hereof and through the Stock
Closing Date or, if applicable, Termination Date, except as otherwise
contemplated hereby, by the Ancillary Documents or as agreed to in writing by
Buyer, the Company shall not, and the Company shall cause the Subsidiaries not
to, take any actions outside of the Company's or such Subsidiary's ordinary
course of business and, by way of amplification and not limitation, not to:
6.2.2.1 operate other than in the ordinary course of business,
except for the TBA Stations upon commencement of Buyer's time brokering of such
TBA Stations pursuant to the TBAs recognizing that the Company shall exercise at
all times ultimate control over the TBA Stations in all respects necessary to
comply with the Communications Act and applicable policies and rules of the FCC;
6.2.2.2 issue any capital stock or any options, warrants or
other rights to subscribe for or purchase any capital
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stock or any securities convertible into or exchangeable for its capital stock,
issue any debt instruments, or establish any stock appreciation rights plan,
phantom stock plan or similar plan with respect to the Company;
6.2.2.3 directly or indirectly purchase, pledge or redeem any
securities of the Company, its Subsidiaries or of any third party, whether or
not affiliated with the Company;
6.2.2.4 directly or indirectly redeem, purchase, or otherwise
acquire any of its capital stock;
6.2.2.5 effect a split, reclassification or other change in or
of any of its capital stock;
6.2.2.6 change, amend or alter its certificate of
incorporation, bylaws, or other charter and governance documents, as each of the
same are currently in effect;
6.2.2.7 grant any increase in the compensation payable, or to
become payable, to the directors, officers or employees of the Company or the
Subsidiaries or enter into any bonus, insurance, severance (subject to the
provisions regarding severance payments set forth in Section 8.11), pension or
other benefit plan, payment or arrangement of any kind for or with any of the
directors, officers or employees of the Company or the Subsidiaries except
routine salary increases paid in the ordinary course consistent with reasonable
business practices;
6.2.2.8 borrow or agree to borrow any funds, incur any
indebtedness or directly or indirectly guarantee or agree to guarantee the
obligations of others except as contemplated by the Financing Transaction;
6.2.2.9 enter into any agreement that would be required to be
set forth in the Disclosure Letter pursuant to Section 4.18.1 if such agreement
had been in effect as of the Redemption Closing Date;
6.2.2.10 place or allow to be placed on the Property or any
other asset of the Company or any Subsidiary, whether now owned or hereafter
acquired, or upon the income, profits or proceeds therefrom, any encumbrance,
lien, security interest or similar interest which does not currently exist;
6.2.2.11 cancel, discount or otherwise compromise any
indebtedness owing to it or any claims which it may possess or waive any rights
of value except in the ordinary course of business consistent with reasonable
business practices;
6.2.2.12 sell, assign, license, lease, dispose of or otherwise
transfer or grant any interest in any Property,
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including without limitation Stations, Station Licenses, Permits, Intellectual
Property, Real Property, Personal Property or other assets of the Company or its
Subsidiaries except in the ordinary course of business consistent with
reasonable business practices; provided, however, that in no event shall the
value of all such sales, assignments, licenses, leases, disposals or other
transfers made in the ordinary course of business exceed $50,000;
6.2.2.13 acquire additional stations, business enterprises or
other assets except purchases of assets in the ordinary course of business
reasonably necessary for the operation of the Company's or any Subsidiary's
business in an aggregate amount not to exceed $50,000;
6.2.2.14 commit any act or omit to do any act which will cause
a material breach of any agreement, contract, lease or commitment, or violate
any Decree, or violate any Statute in any material respect;
6.2.2.15 make (or declare) any loan, advance, dividend or
distribution or payment of any type to, or enter into any agreement with respect
thereto, with any of its stockholders (other than intercompany transfers),
officers, directors or any other person, or entity except as regular
compensation and benefits (generally available to all employees) to employees
for services rendered as employees of the Company or a Subsidiary;
6.2.2.16 merge, consolidate, enter into any business
combination, dissolve or liquidate the Company or any of the Subsidiaries;
6.2.2.17 file a petition in bankruptcy, receivership,
liquidation, insolvency, or other similar proceeding, make any general
assignment for the benefit of creditors or take any action in contemplation of,
or which would constitute the basis for, the institution of any such
proceedings, or fail generally to pay its debts as such debts become due; in the
event of the commencement of any bankruptcy, receivership, liquidation,
insolvency, or other similar proceeding, the Company shall use its best efforts,
and the Company shall cause each Subsidiary to use its best efforts, to seek
removal or dismissal thereof as expeditiously as legally possible;
6.2.2.18 grant or consent to a waiver of any statute of
limitations with respect to any Company Tax Return or Taxes for which the
Company or any Subsidiary is or may be liable, or enter into any tax allocation
or sharing agreement with respect to Taxes;
6.2.2.19 knowingly infringe upon or make any unlawful use of
any patent, trademark, logo, service mark, trade
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name, copyright or other intellectual or proprietary right of any third party;
6.2.2.20 except as expressly contemplated by this Agreement,
change any of its current arrangements with any banking, savings or financial
institution, or investment banking or brokerage firm, or enter any new
arrangements or agreements with any such institution or firm;
6.2.2.21 enter into any collective bargaining agreement or
other arrangement with any labor organization or other entity regarding the rate
of pay or working conditions of any of the employees of the Company or any
Subsidiary;
6.2.2.22 make a tax election or settle or compromise any
disputed tax liability of the Company or any Subsidiary;
6.2.2.23 change any of the accounting principles or practices
used by the Company except as required by the Financial Accounting Standards
Board;
6.2.2.24 create any accounts receivable other than in the
ordinary course of business and which represent bona fide transactions completed
in accordance with terms and provisions contained in any documents related
thereto;
6.2.2.25 pay to or on behalf of R.D.P. any money in order to
restore property formerly used by R.D.P. as the XETRA-AM tower site to its prior
condition;
6.2.2.26 pay any pledges or make any contributions to San Diego
International Sports Council, the University of San Diego or otherwise;
6.2.2.27 pay any incentive bonuses pursuant to the bonus
incentive plan for managers and controllers for 1996;
6.2.2.28 (A) take any action (or fail to take any action)
through or by the Class B Shareholders, the directors or officers of the Company
or the Station general managers that gives rise to any fact, circumstance or
condition that causes in any foreseeable way any Company Representation and
Warranty set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9,
4.16, 4.22, 4.26 or 4.27 to be untrue as of the Stock Closing Date; or (B) fail
to take such action as is necessary to correct or rectify any fact, circumstance
or condition of which it has knowledge (which for this purpose shall mean any
fact, circumstance or condition of which the Class B Shareholders, the directors
or officers of the Company or any Station general manager has actual knowledge)
that arises after the Redemption Closing and causes any Company Representation
or Warranty set forth in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7, 4.8, 4.9,
4.16, 4.22, 4.26 or 4.27 to be
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untrue as of the Stock Closing Date, which corrective action shall be taken at
the expense of the Class B Shareholders; provided, however, that no fact,
circumstance or condition shall constitute a breach of any of the Company
Representations or Warranties to the extent that such fact, circumstance or
condition arises out of the operation of the TBA Stations after the Redemption
Closing Date; or
6.2.2.29 take any action (or fail to take any action)
that would prevent the Company from performing any requirements or covenants of
the Company contained herein, or make any agreement or commitment to do or take
any of the actions referred to in this Section 6.2.
6.2.3 The Company agrees that its obligations pursuant to this
Section 6.2 are in addition to, and in no way limit, the Company's obligations
set forth elsewhere in this Agreement.
6.2.4 In the event that a breach (a "Covenant Breach") of: (A)
any of the covenants set forth in Sections 6.2.1 or 6.2.2 hereof; (B) any of the
covenants of the Company set forth in that Investment Agreement between Buyer,
the Company and the Class B Shareholders entered into as part of the Warrant
Purchase Transaction (as defined in Section 8.5) (the "Investment Agreement");
or (C) any of the covenants set forth in the documents evidencing the Financing
Transaction (as defined in Section 8.6) (the "Financing Agreements"), causes any
loss, cost, damage, liability or expense which results in economic detriment to
Buyer, the Company and/or any Subsidiary ("Damages"), and the amount of such
Damages can reasonably be determined as of the Stock Closing Date, the Stock
Purchase Price shall be reduced by such amount. In the event such Damages
exceeds the portion of the Stock Purchase Price to be paid at the Stock Closing,
if any, the Class B Shareholders jointly and severally shall pay such excess (up
to the aggregate amount of the Stock Purchase Price and Extension Payment (as
defined in Section 8.17) previously paid) to Buyer at the Stock Closing. In the
event that the amount of such Damages cannot reasonably be determined as of the
Stock Closing Date, then the parties shall reasonably estimate the amount of
such Damages and the Stock Purchase Price shall be reduced by 110% of the amount
of such estimate (and, in the event 110% of such estimated Damages exceeds the
portion of the Stock Purchase Price to be paid at the Stock Closing, if any, the
Class B Shareholders jointly and severally shall pay such excess (up to the
aggregate amount of the Stock Purchase Price and Extension Payment previously
paid) to Buyer at the Stock Closing); at such time as such Damages are finally
determined: (i) in the event such Damages exceed 110% of the amount of the
estimate at the Stock Closing, then immediately upon notice from Buyer of the
amount of such Damages, the Class B Shareholders jointly and severally shall pay
to Buyer the amount such excess (up to the aggregate amount of the Stock
Purchase Price and Extension Payment previously paid); and (ii) in the event
such Damages are less than 110% of the amount of the estimate at the
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Stock Closing, then immediately upon such determination Buyer shall pay the
Class B Shareholders the amount such shortfall. Notwithstanding the foregoing,
any Damages resulting from a Covenant Breach shall reduce the Stock Purchase
Price or be subject to repayment by the Class B Shareholders to Buyer only to
the extent that the aggregate Damages from all such Covenant Breaches exceed
$500,000.
6.3 ADDITIONAL COVENANTS OF THE COMPANY. The Company agrees with Buyer
that commencing on the date hereof through the Stock Closing Date or, if
applicable, Termination Date:
6.3.1 The Company shall take or cause to be taken, and the
Company shall cause its Subsidiaries to take or cause to be taken, all
reasonable actions as may be necessary or advisable to consummate and to make
effective the transactions contemplated by this Agreement, including without
limitation such actions as may be required to satisfy each of the conditions to
the Redemption Closing and Stock Closing. The Company shall not take any action,
and the Company shall cause its Subsidiaries not to take any action, which
interferes with or delays the FCC Consent.
6.3.2 The Company shall, and shall cause each Subsidiary to,
make all filings contemplated by Article VII hereof required of the Company or
any Subsidiary necessary to obtain all Governmental Consents.
6.3.3 The Company shall, and the Company shall cause each
Subsidiary to, comply with the terms and provisions of the TBAs and other
Ancillary Documents.
6.4 COVENANTS OF BUYER. Buyer agrees with Class B Shareholders and the
Company that from the date hereof through the Stock Closing Date or, if
applicable, Termination Date:
6.4.1 Buyer shall take or cause to be taken all reasonable
actions as may be necessary or advisable to consummate and to make effective the
transactions contemplated by this Agreement, including without limitation such
actions as may be required to satisfy each of the conditions to the Redemption
Closing and Stock Closing. Buyer shall not take any action which interferes with
or delays the FCC Consent.
6.4.2 Buyer shall make all filings contemplated by Article VII
hereof required of Buyer necessary to obtain all Governmental Consents.
6.4.3 Buyer shall, and Buyer shall cause its Affiliates to,
comply with the terms and provisions of the TBAs and other Ancillary Documents.
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6.5 COVENANTS OF CLASS B SHAREHOLDERS. Each Class B Shareholder
severally agrees with Buyer that from the date hereof through the Stock Closing
Date or, if applicable, Termination Date:
6.5.1 Such Class B Shareholder shall take or cause to be taken
all reasonable actions as may be necessary or advisable to consummate and to
make effective the transactions contemplated by this Agreement, including
without limitation such actions as may be required to satisfy each of the
conditions to the Redemption Closing and Stock Closing specific to such Stock
Seller. No Class B Shareholder shall take any action which interferes with or
delays the FCC Consent.
6.5.2 Such Class B Shareholder shall make all filings
contemplated by Article VII hereof required of such Class B Shareholder
necessary to obtain all Governmental Consents.
6.5.3 Such Class B Shareholder (along with the other Class B
Shareholders) shall take all such actions as are necessary to cause the Company
and Noble Broadcast of Connecticut, Inc. to dispose of the real estate owned by
Noble Broadcast of Connecticut, Inc. (and which is currently leased to Clear
Channel) on terms and conditions acceptable to Buyer in its reasonable
discretion.
6.6 ACQUISITION PROPOSALS. The Class B Shareholders and the Company
jointly and severally agree that commencing on the date hereof through the Stock
Closing Date:
6.6.1 Neither the Company, any Subsidiary nor any Class B
Shareholder will, and the Class B Shareholders and the Company shall direct and
cause the officers, directors, employees, agents and representatives of the
Company and the Subsidiaries (including without limitation any investment
banker, attorney or accountant retained by any Stock Seller, the Company or any
Subsidiary) not to: (A) initiate, solicit or encourage, directly or indirectly,
any inquiries, or the making or implementation of any proposal or offer
(including without limitation, any proposal or offer to any Seller, the Company
or any Subsidiary) with respect to a merger, acquisition, consolidation or
similar transaction involving, or any purchase of, all or any portion of the
assets or any securities of the Company or any Subsidiary (any such inquiry,
proposal or offer being hereinafter referred to as an "Acquisition Proposal" and
any such transaction being hereinafter referred to as an "Acquisition"); or (B)
engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal.
6.6.2 Each Stock Seller, the Company and each Subsidiary will
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted
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heretofore with respect to any Acquisition Proposal or Acquisition and will take
the necessary steps to inform the individuals or entities referred to above of
the obligations undertaken by the Company and the Class B Shareholders in this
Section 6.7.
6.6.3 Neither the Company, any Subsidiary nor any Class B
Shareholder will enter into any agreement with any person with respect to an
Acquisition Proposal, or that in any way facilitates an Acquisition Proposal or
an Acquisition.
6.7 INFORMATION; NOTICE. The Company and Subsidiaries hereby agree that
commencing on the date hereof through the Stock Closing Date, the Company shall,
and the Company will cause the Subsidiaries to, comply with the following
provisions:
6.7.1 As soon as available, and in any event within ninety days
after the close of each fiscal year of the Company commencing with the fiscal
year ending December 25, 1995, the Company will deliver to Buyer consolidated
and consolidating balance sheets, statements of income, retained earnings and
cash flows of the Company and its Subsidiaries audited by an independent public
accounting firm selected by the Company and its Subsidiaries and acceptable to
Buyer, showing the consolidated financial condition of the Company and its
Subsidiaries as of the close of such fiscal year and the results of operations
of the Company and its Subsidiaries during such fiscal year, and certified
without qualification by such accounting firm to have been prepared in
accordance with generally accepted accounting principles, consistently applied,
accompanied by an agreed upon procedures report from such accounting firm.
6.7.2 Within thirty days after the end of each fiscal quarter
commencing with the fiscal quarter ending March 31, 1996 the Company will
deliver to Buyer consolidated and consolidating internal, unaudited balance
sheets and statements of income of the Company and its Subsidiaries as of the
end of such fiscal quarter and for the year to date, certified by the Chairman
or President and by the Chief Financial Officer of the Company to be true and
correct and to have been prepared in accordance with generally accepted
accounting principles, consistently applied (subject to normal year-end
adjustments).
6.7.3 As soon as available and in any event within thirty days
after the end of each fiscal month commencing with the month ending January 28,
1996, the Company will deliver to Buyer consolidated and consolidating internal,
unaudited balance sheets, statements of income, retained earnings and cash
flows, and a profit and loss statement of the Company and its Subsidiaries as of
the end of each such month, certified by the Chairman or President and by the
Chief Financial Officer of the Company to be true and correct and to have been
prepared in accordance with generally
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accepted accounting principles, consistently applied (subject to normal year-end
adjustments).
6.7.4 The Company will promptly give notice to the Buyer of any
litigation, or proceeding against, or investigation of the Company or any
Subsidiary, or which, to its knowledge, is threatened against the Company or any
of its Subsidiaries.
ARTICLE VII
7 GOVERNMENTAL CONSENTS
7.1 FCC APPLICATION.
7.1.1 Prior to the date hereof, Buyer, the Class B Shareholders
and the Company, respectively have filed with the FCC the applications required
by it ("FCC Application") to obtain the consent and approval of the FCC to the
consummation of the Stock Closing ("FCC Consent"). Buyer, the Class B
Shareholders and the Company, shall, and the Company shall cause the
Subsidiaries to, prosecute the FCC Application with all such diligence as is
practicable and otherwise use their best efforts to obtain the grant of the FCC
Consent as soon as possible. If any complaint or objection to the FCC
Application is filed by any third party, Buyer, the Class B Shareholders and the
Company shall, and the Company shall cause the Subsidiaries to, take any and all
actions reasonably requested by Buyer in its sole discretion and at its cost to
satisfy the same in order to obtain the FCC Consent. If the FCC imposes any
conditions to its grant of the FCC Consent, the Class B Shareholders and the
Company shall, and the Company shall cause the Subsidiaries to, take any and all
actions reasonably requested by Buyer in its sole discretion and at its cost to
comply with such conditions. If reconsideration or judicial review is sought
with respect to the FCC Consent, the Company, the Class B Shareholders and Buyer
shall, and the Company shall cause the Subsidiaries to, fully cooperate with
each other and take any and all such actions reasonably requested by Buyer with
respect to such efforts for reconsideration or judicial review at Buyer's cost.
Notwithstanding the foregoing, the Class B Shareholders and the Company shall
have no obligation to take any action which could reasonably subject the Class B
Shareholders or the Company to material risk or obligation unless Buyer provides
reasonably adequate protection or indemnification from such risk or obligation.
7.2 HSR APPLICATION. Within five (5) business days after the Redemption
Closing, Buyer, the Class B Shareholders and the Company, shall, make or cause
to be made any and all required governmental filings pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), with respect to the transactions contemplated hereby and by the Ancillary
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Documents, and shall use their best efforts to respond as promptly as
practicable to all inquiries received from the applicable governmental agencies
or committees for additional information or documentation. Each of the Company,
the Class B Shareholders and Buyer, as the case may be, will notify the other of
all correspondence, filings or communications between such party or its
representatives, on the one hand, and the applicable governmental agencies or
committees, on the other hand, with respect to this Agreement and the Ancillary
Documents and the transactions contemplated hereby and thereby. Each of the
Company, the Class B Shareholders and Buyer will furnish the other with such
necessary information and reasonable assistance as such other parties may
request in connection with their preparation of such filings.
7.3 OTHER FILINGS AND APPROVALS. Buyer, the Class B Shareholders and
the Company, shall cooperate with each other in timely making any other filings
and seeking any other approvals, if any, required to be made with or obtained
from any Governmental Entity in connection with the execution and delivery of
this Agreement and the Ancillary Documents and the consummation of the
transactions contemplated hereby and thereby and in timely making all such
filings and timely seeking the related consents, approvals, permits or
authorizations from such Governmental Entities.
7.4 COMPANY AND SELLER OBLIGATIONS UPON ASSIGNMENT. The Company and the
Class B Shareholders agree that in the event Buyer assigns its rights and
obligations under this Agreement, the Class B Shareholders, the Company, and the
Company shall cause each Subsidiary, at Buyer's cost, to make any and all
governmental filings necessary so that such assignee can receive the full
benefit of this Agreement regardless whether such filings are specifically
referenced in this Article VII and without regard to any time periods stated
herein. The Class B Shareholders and the Company further agree that the rights
conferred upon an assignee pursuant to this Section 7.4 are in addition to all
rights of such assignee pursuant to Section 14.5.
ARTICLE VIII
8 FURTHER AGREEMENTS AND REPRESENTATIONS
8.1 EXPENSES. Each party hereto shall each pay their respective costs
incurred in connection with the preparation, negotiation, execution and delivery
of this Agreement and the Ancillary Documents and the consummation of the
transactions contemplated hereby and thereby, including without limitation the
fees of their respective attorneys and accountants, provided, however that
Sellers will also pay all such costs as may be incurred by the Company and its
Subsidiaries other than the fees of Gray, Cary, Ware & Freidenrich for legal
services rendered on
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behalf of the Company, the fees of Haley, Bader & Potts and Cervantes, Paregon &
Guitterez for legal services rendered on behalf of the Company (or in the case
of Cervantes, Paregon & Guitterez, RDP and Nobro, which the Company is
reimbursing), the fees of Price Waterhouse for accounting and tax services
rendered on behalf of the Company, the cost of the Surveys obtained pursuant to
Section 8.14, the cost of the Titles obtained pursuant to Section 9.2.11, the
cost of the environmental reports obtained pursuant to Section 9.2.12, and other
costs and expenses customarily paid by a company being acquired pursuant to an
acquisition of stock. Other than as expressly provided in the immediately
preceding sentence, none of the costs incurred by Sellers, the Company or any
Subsidiary (including without limitation, all fees and expenses of Henderson,
Daily, Withrow and Devoe, and all fees and expenses of Smithwick & Belendiuk)
shall be paid, either directly or indirectly, by the Company or any Subsidiary.
Buyer and Sellers shall each be responsible for one-half of all filing fees
required to be paid to any Governmental Entity in connection with the filings
contemplated by Article VII hereof, the San Diego Transaction and the Tijuana
Transactions, as well as for one-half of the cost of the Company's remaining
obligations under the Accu-Weather Settlement and one-half of the cost of
terminating the Rate Protection Agreement, all as more fully shown on the
Sources and Uses Schedule.
8.2 NEWS RELEASES. Upon the Redemption Closing, Buyer, Sellers and the
Company will jointly prepare and issue a press release regarding the
transactions contemplated hereby; provided, however, that prior to such time and
from time to time thereafter Buyer shall, in accordance with its legal
obligations, including but not limited to filings permitted or required by the
Securities Act of 1933 and the Securities Exchange Act of 1934, the NASDAQ
National Market and other similar regulatory bodies, make such press releases
and other public statements and announcements as Buyer deems necessary and
appropriate. To the extent Buyer is practicably able to do so prior to making
any such press release, public statement or announcement, Buyer shall make
reasonable efforts to give the Stock Sellers Representative prior notice
thereof. Sellers, the Company and any Subsidiary may make press releases, public
statements and announcements concerning the transactions contemplated hereby
only following consultation with Buyer and Buyer's approval of the text of any
such press release, public statement or announcement.
8.3 SAN DIEGO TRANSACTION. At the Redemption Closing, Chesapeake
Securities, Inc. (a wholly-owned subsidiary of Buyer) ("Chesapeake"), Noble San
Diego, Sports Radio, Inc. and Noble Broadcast Center, Inc. shall enter into an
agreement providing for Chesapeake's purchase upon signing of certain assets and
assumption of certain liabilities (other than intercompany payables) relating to
the operation of the Mexican Stations (the "San Diego Transaction") for a
purchase price set forth on the Sources and
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Uses Schedule. The parties acknowledge that Noble San Diego sells advertising
spots and provides programming for transmission on the Mexican Stations pursuant
to the Sales Agency Agreement, and that as part of the San Diego Transaction,
Noble San Diego shall assign to Chesapeake all of Noble San Diego's right, title
and interest in and to the Sales Agency Agreement and certain other agreements
as more fully provided for in the agreements documenting the San Diego
Transaction.
8.4 TIJUANA TRANSACTIONS. The parties hereto acknowledge that prior to
or simultaneously with the Redemption Closing: (A) Xetra Comunicaciones, S.A. de
C.V. ("Concession Buyer") and R.D.P. shall have entered into an agreement
relating to Buyer's purchase of certain assets of R.D.P., including without
limitation all right, title and interest in and to the Mexican Station Licenses
and the operating assets of XETRA-AM and XETRA-FM; and (B) Inmobiliaria Radial,
S.A. de C.V. ("Real Estate Buyer"), R.D.P. and Nobro, S.C. shall have entered
into an agreement relating to Real Estate Buyer's purchase of the real estate on
which the transmitters for the Mexican Stations are located (together, the
transactions described in (A) and (B) are referred to as the "Tijuana
Transactions"). The consideration provided by Buyer in connection with the
Tijuana Transactions is reflected on the Sources and Uses Schedule.
8.5 WARRANT PURCHASE TRANSACTION. At the Redemption Closing, Buyer, the
Company and the Class B Shareholders shall enter into an agreement providing for
the purchase by Buyer (for a purchase price as shown on the Sources and Uses
Schedule) of a warrant which, upon exercise, would entitle Buyer to an equity
interest in the Company on terms and conditions acceptable to Buyer and the
Company; in connection therewith, the parties acknowledge that they will also be
entering into related agreements and amending the Certificate of Incorporation
and Bylaws of the Company to accommodate the agreements of the parties with
respect to such warrant purchase (the transactions contemplated by this Section
shall be referred to as the "Warrant Purchase Transaction").
8.6 FINANCING TRANSACTION. At the Redemption Closing, Broadcast
Finance, Inc. ("BFI") and the Company (and various Subsidiaries) shall enter
into one or more agreements providing for the loan by BFI to the Company of up
to $40,000,000 (as shown on the Sources and Uses Schedule), plus a $1,000,000
working capital facility (the "Financing Transaction").
8.7 USE OF PROCEEDS. At the Redemption Closing, the Company agrees to
immediately apply so much of the proceeds of the San Diego Transaction, the
Warrant Purchase Transaction and the Financing Transaction as is necessary to
fund the payment of the Warrant Redemption Price to the Warrant Sellers and the
payment of the Class A Redemption Price to the Class A Shareholders, to pay in
full the Conseco Debt, the Chase Debt and the Barclay's Debt, and
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to terminate and payoff the Rate Protection Agreement. The application of the
proceeds as described in this Section 8.7 is set forth on the Sources and Uses
Schedule.
8.8 SHARED COSTS. The parties acknowledge that the following costs
shall be borne one-half by Sellers and one-half by Buyer: (A) the cost of
terminating the Rate Protection Agreement; (B) the cost of all governmental
filings in connection with the transactions contemplated by this Agreement, the
San Diego Transaction and the Tijuana Transactions; and (C) the cost of future
payments in connection with the Accu-Weather settlement for KHOW-AM. The costs
described in clauses (A), (B) and (C), and their effect on the flow of funds in
connection with the transactions contemplated hereby, is shown on the Sources
and Uses Schedule.
8.9 CASH ACCOUNTS. The parties acknowledge that immediately prior to
the Redemption Closing, any Available Cash shall be applied to the Chase Debt as
shown in the Sources and Uses Schedule.
8.10 TAX PAYMENTS. Buyer agrees that it shall timely advance to the
Company: (A) any federal or state income tax payable upon the filing of the
Company's 1995 Federal and state income tax returns or on any application for
extension of time for such filing; and (B) any federal or state taxes payable
resulting from the San Diego Transaction (such payments being referred to
together as the "Tax Payments"). The amount of such taxes payable shall be as
reasonably determined and agreed to by the independent certified public
accountants for the Company and Buyer.
8.11 TIME BROKERAGE AGREEMENTS. At the Redemption Closing, Buyer
(either directly or through its designated Affiliates) and the Company (either
directly or through its appropriate Subsidiary) shall enter into mutually
satisfactory Time Brokerage Agreements (together, the "TBAs") pursuant to which
the Company shall broadcast programming supplied by Buyer over the broadcasting
transmission facilities of the Stations serving the Toledo, Ohio market and the
St. Louis, Missouri market (the Stations which are subject to the TBAs being
referred to collectively as the "TBA Stations") and Buyer shall make certain
payments to the Company during the period and in accordance with the terms and
conditions set forth therein.
The parties acknowledge and agree that the Company and Buyer
are not entering into on the date hereof a time brokerage agreement (or a joint
sales agreement) relating to the Company's and/or Subsidiaries' radio stations
KBCO-AM, KBCO-FM, KHIH-FM or KHOW-AM serving the Denver, Colorado market (the
"Denver Stations"). The parties acknowledge and agree that if, prior to the
Stock Closing Date, FCC counsel for Buyer and the Company agree that FCC rules
and policies allow Buyer to enter into a time brokerage agreement or a joint
sales agreement relating to the
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Denver Stations, then the Company and Buyer shall discuss in good faith the
advisability of the Company (either directly or through its appropriate
Subsidiary) entering into a time brokerage agreement with Buyer (either directly
or through its designated Affiliates) in a form substantially similar to the
TBAs with respect to Toledo and St. Louis or, at Buyer's option, into a joint
sales agreement on terms and conditions mutually acceptable to the Company and
Buyer.
After the execution hereof and the TBAs, the parties acknowledge that
the employment of certain employees of the Company and its Subsidiaries will be
terminated. In connection with such terminations, the Company and its
Subsidiaries shall be permitted to pay severance to such employees in amounts
not to exceed the severance such employees would receive under Buyer's own
current severance policies (i.e., one week severance pay for each full year of
service). In addition, Buyer shall pay to or on behalf of the Company and its
Subsidiaries up to an additional $200,000 to fund additional severance payments
to such employees as the Company and Buyer shall mutually agree.
Furthermore, effective upon commencement of each TBA (or if applicable,
a joint sales agreement with respect to Denver), the Company (on behalf of
itself or the appropriate Subsidiary) hereby assigns to Buyer (or the
appropriate Affiliate of Buyer) all of its rights (or the rights of the
appropriate Subsidiary) under employment agreements between the Company and
employees of the applicable TBA Stations and which are set forth in the
Disclosure Schedule, and Buyer (on behalf of itself or the appropriate
Affiliate) hereby assumes all of the Company's obligations thereunder arising
after the commencement of such TBA. Effective upon termination of such TBA (or
if applicable, a joint sales agreement with respect to Denver), Buyer (on behalf
of itself or the appropriate Affiliate) hereby re-assigns to the Company (or the
appropriate Subsidiary) all of its rights under such employment agreements
arising after the termination of such TBA, and the Company (on behalf of itself
or the appropriate Subsidiary) hereby reassumes all of the Company's obligations
thereunder arising after the termination of such TBA.
8.12 INDEMNIFICATION AND ESCROW AGREEMENT. At the Redemption Closing,
the parties hereto, Conseco and Indemnification Escrow Agent shall enter into
the Indemnification and Escrow Agreement. All claims for indemnity arising out
of any Buyer Escrow Indemnified Claim, Buyer Non-Escrow Indemnified Claim or
Seller Indemnified Claim (each as defined in the Indemnification and Escrow
Agreement) arising under this Agreement between or among the parties to this
Agreement shall be determined solely pursuant to the provisions of the
Indemnification and Escrow Agreement, and no separate claim or cause of action
arising out of any Buyer Escrow Indemnified Claim, Buyer Non-Escrow Indemnified
Claim or Seller Indemnified Claim may be maintained.
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8.13 SURVIVAL OF REPRESENTATIONS, ETC. It is the express intention and
agreement of the parties to this Agreement that: (A) all covenants and
agreements (together, "Agreements") and all representations and warranties
(together, "Warranties") made by Buyer, Sellers and the Company in this
Agreement or in any Ancillary Document shall survive (regardless of any
knowledge, investigation, audit or inspection at any time made by or on behalf
of Buyer, any Seller or the Company) as follows:
8.13.1 The Agreements shall survive the Redemption Closing and
Stock Closing without limitation.
8.13.2 The Warranties contained in Article III and Article V
(the "Perpetual Warranties") shall survive the Redemption Closing and Stock
Closing without limitation.
8.13.3 As they relate specifically to the operations of the TBA
Stations, all Warranties other than the Perpetual Warranties shall only survive
for a period of twelve (12) months from the Redemption Closing Date.
8.13.4 Only as they relate specifically to the operations of
the Denver Stations, all Warranties other than the Perpetual Warranties shall
only survive for a period of twelve (12) months from the Stock Closing Date or,
if earlier, for a period of twelve (12) months from the date upon which Buyer
(or an Affiliate of Buyer) commences time brokerage of the Denver Stations
pursuant to a time brokerage agreement or joint sales agreement pursuant to
Section 8.11.
8.13.5 Other than as limited by Section 8.13.3 and Section
8.13.4, all Warranties other than the Perpetual Warranties shall survive for a
period of twelve (12) months from the Stock Closing Date.
8.13.6 The right of either party to recover Damages (as defined
in the Indemnification and Escrow Agreement) as to any specific matter for which
indemnification is sought shall not be affected by the expiration of any
Warranties as set forth herein, provided that a Claim Notice (as defined in the
Indemnification and Escrow Agreement) with respect to such matter has been given
by the indemnified party to the indemnifying party prior to such expiration and
prior to the expiration of the indemnifying parties' obligations under the
Indemnification and Escrow Agreement and subject to the terms of the
Indemnification and Escrow Agreement.
8.13.7 Notwithstanding any provision hereof to the contrary,
there shall be no contractual time limit in which Buyer, the Company or Sellers
may bring any action for actual fraud (a "Fraud Action"), regardless of whether
such actual fraud also included a breach of any Agreement or Warranty; provided,
however, that any Fraud Action must be brought within the period of the
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applicable statute of limitations plus any extensions or waivers granted or
imposed with respect thereto.
8.13.8 Subject to and effective upon the Redemption Closing,
each Seller hereby releases the Company and the Subsidiaries, and each of their
respective directors, officers, employees, agents and representatives, from and
against any and all claims that they may have against such entities or persons
resulting from any fact, circumstance or condition which gives rise to a claim
for indemnification by Buyer pursuant to this Agreement, the Indemnification and
Escrow Agreement or any Ancillary Document.
8.14 SURVEYS. Within sixty (60) days after the date hereof, or if
earlier prior to the Stock Closing Date, the Company shall provide Buyer with
staked-on-ground boundary surveys of the Real Property, certified current as of
the date of delivery thereof, prepared by a duly licensed and registered land
surveyor acceptable to Buyer (the "Surveys"). The form of the Surveys shall be
reasonably satisfactory to Buyer in all respects. The Surveys shall be made and
prepared in accordance with the Minimum Standard Detail requirements for
ALTA/ACSM Land Title Surveys, jointly established and adopted by ALTA and ACSM
in 1986.
8.15 DEFINITION OF MATERIALITY. No Company Representations and
Warranties and no covenants which are qualified by the word "material" (a
"Qualified Representation") shall be deemed to have been breached unless and
until the value, financial impact, financial obligation, financial effect or
Damages which are undisclosed, resulting, incurred or suffered as a result of
the inaccuracy of such Qualified Representation without reference to the
materiality qualification is $10,000 or more; provided, however, that once the
Damages suffered or incurred as a result of the breach of all Qualified
Representations without reference to materiality qualifications exceeds
$150,000, then Buyer shall be entitled to indemnification with respect to all
such Damages in excess of $150,000, subject however to the other limitations
herein and in the Indemnification and Escrow Agreement.
8.16 DEFINITION OF KNOWLEDGE. Whenever in this Agreement a warranty or
representation is qualified by a word or phrase referring to the knowledge of
Sellers, the Company and/or the Subsidiaries, it shall mean to the best of the
Sellers', the Company's and/or each Subsidiary's knowledge after having made
reasonable due inquiry of the Sellers, the directors and officers of the
Company, the general managers of the Stations who would be expected to have
knowledge of the matter and after the Company has made reasonable due inquiry of
R.D.P., and with respect to the condition of any assets, records or other
object, after having inspected it.
8.17 EXTENSION OF CLOSING. Notwithstanding anything to the contrary
provided in Section 1.2, in the event that the Stock
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Closing has not occurred prior to the third anniversary of the date hereof (the
"Third Anniversary"), then the Stock Purchase Price shall be paid as follows:
(A) on the Third Anniversary, an amount equal to eighty percent (80%) of the
Stock Purchase Escrow Consideration shall be deposited into the Escrow Fund; (B)
on the Third Anniversary, an amount equal to the difference between eighty
percent (80%) of the Stock Purchase Price minus eighty percent (80%) of the
Stock Purchase Escrow Consideration shall be paid by wire transfer of funds in
accordance with wiring instructions provided by the Stock Sellers Representative
to Buyer prior to the Third Anniversary; (C) an amount equal to twenty percent
(20%) of the Stock Purchase Escrow Consideration (the "Residual Stock Purchase
Escrow Payment") shall be deposited into the Escrow Fund upon the Stock Closing;
and (D) an amount equal to the difference between twenty percent (20%) of the
Stock Purchase Price minus the Residual Stock Purchase Escrow Payment (the
"Residual Stock Purchase Payment") shall be paid upon the Stock Closing by wire
transfer of funds in accordance with wiring instructions provided by the Stock
Sellers Representative to Buyer prior to the Stock Closing Date. In addition to
the payments described above, if the Stock Closing has not occurred on or before
the fifth anniversary of the date hereof (the "Fifth Anniversary"), and such
failure is not as a result of some default by the Class B Shareholders or the
Company of its obligations hereunder, then Buyer shall pay the Class B
Shareholders an additional amount equal to the Residual Stock Purchase Payment
in consideration for an indefinite extension of the period of time to close the
transactions contemplated hereby (the "Extension Payment"), subject to the
provisions of Section 13.1.
Notwithstanding the foregoing provisions of the previous paragraph, in
the event that between the date hereof and the Third Anniversary FCC rules and
policies are changed so that as of the Third Anniversary FCC rules and policies
then in effect do not permit a purchase price prepayment on the Third
Anniversary as large as eighty percent (80%) without attributing ownership of
the Class B Shares to Buyer or such payment is otherwise prohibited by changes
to FCC rules and policies or by an FCC order or directive applicable
specifically to the payments contemplated by this Section 8.17, then the
percentages relating to the payments to be made on the Third Anniversary shall
be reduced to such maximum percentage as is permitted by such rules and
policies, and the percentages relating to the payments to be made upon the Stock
Closing shall be correspondingly increased. In the event of any such changes in
such rules or policies or in the event of such an order or directive, Buyer
agrees to make such modifications to this Agreement, or enter into such other
agreements as the Class B Shareholders may reasonably request, in order to allow
the Class B Shareholders to lawfully obtain the use of such funds on an
interest-free basis on and after the Third Anniversary, but subject at all times
to full compliance with FCC rules and policies.
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ARTICLE IX
9 CONDITIONS TO REDEMPTION CLOSING
9.1 CONDITIONS PRECEDENT TO SELLERS' AND THE COMPANY'S OBLIGATION TO
CONSUMMATE THE REDEMPTION CLOSING. The obligation of Sellers and the Company to
consummate the Redemption Closing is subject to the fulfillment, prior to or at
the Redemption Closing, of each of the following conditions:
9.1.1 All Redemption Closing deliveries required to be made by
Buyer pursuant to Article X shall have been made by Buyer.
9.1.2 The San Diego Transaction shall have occurred.
9.1.3 The Tijuana Transactions shall have occurred.
9.1.4 The Warrant Purchase Transaction shall have occurred.
9.1.5 The Financing Transaction shall have occurred.
9.1.6 The TBAs shall have been executed.
9.1.7 Lynch and the Company shall have entered into a mutually
satisfactory Employment Agreement.
9.1.8 Lynch and the Company shall have entered into a mutually
satisfactory Noncompetition and Confidentiality Agreement.
9.1.9 De Francesco and the Company shall have entered into a
mutually satisfactory Employment Agreement.
9.1.10 De Francesco and the Company shall have entered into a
mutually satisfactory Noncompetition and Confidentiality Agreement.
9.1.11 Sellers and the Company shall have received a
satisfactory legal opinion from Graydon, Head & Ritchey.
9.1.12 The Indemnification and Escrow Agreement shall have been
executed.
9.1.13 The proceeds of the San Diego Transaction, the Warrant
Purchase Transaction and the Financing Transaction shall have been applied as
contemplated by Section 8.7.
9.1.14 The Warrant Holders and the Class A Shareholders shall
have received a satisfactory legal opinion from Gray, Cary, Ware & Freidenrich.
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9.1.15 The waiting period under the HSR Act with respect to the
San Diego Transaction shall have been terminated or expired.
9.1.16 Conseco shall have delivered to the Company a letter
releasing the Company from those claims, liabilities and obligations as to which
the Warrant Sellers provided a release in Section 2.3 hereof.
9.2 CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CONSUMMATE THE
REDEMPTION CLOSING. The obligation of Buyer to consummate the Redemption Closing
is subject to the fulfillment, prior to or at the Redemption Closing, of each of
the following conditions:
9.2.1 All Redemption Closing deliveries required to be made by
Sellers and the Company pursuant to Article X shall have been made by Sellers
and the Company.
9.2.2 The San Diego Transaction shall have occurred.
9.2.3 The Tijuana Transactions shall have occurred.
9.2.4 The Warrant Purchase Transaction shall have occurred.
9.2.5 The Financing Transaction shall have occurred.
9.2.6 The TBAs shall have been executed.
9.2.7 Lynch and the Company shall have entered into a mutually
satisfactory Employment Agreement.
9.2.8 Lynch and the Company shall have entered into a mutually
satisfactory Noncompetition and Confidentiality Agreement.
9.2.9 De Francesco and the Company shall have entered into a
mutually satisfactory Employment Agreement.
9.2.10 De Francesco and the Company shall have entered into a
mutually satisfactory Noncompetition and Confidentiality Agreement.
9.2.11 The Company shall have provided Buyer with current
Owner's Title Insurance Binders from a title company or companies acceptable to
Buyer pursuant to which the title company or companies shall commit to issue
ALTA Owner's Policies of Title Insurance for the purpose of insuring fee simple
title to the Real Property (the "Titles"). The Titles shall be reasonably
satisfactory to Buyer in all respects.
9.2.12 The Company shall have provided Buyer with current Phase
I environmental audit reports regarding the facilities and operations of the
Company's and the Subsidiaries,
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addressed to Buyer, which reports shall be reasonably satisfactory to Buyer in
all respects.
9.2.13 The proceeds of the San Diego Transaction, the Warrant
Purchase Transaction and the Financing Transaction shall have been applied as
contemplated by Section 8.7.
9.2.14 The Company and, as appropriate, its Subsidiaries shall
have received releases of any and all claims and interests of such holders
arising out of or in connection with the Noble Indebtedness on terms and
conditions acceptable to Buyer, and Buyer shall have received appropriate payoff
statements from such holders as to such repayment and releases. Moreover, the
Chase Warrants shall have not been exercised, but rather shall have been
cancelled without cost to the Company, any Subsidiary or Buyer.
9.2.15 Buyer shall have received a satisfactory tax opinion
from Price Waterhouse.
9.2.16 Buyer shall have received a satisfactory legal
opinion(s) from Gray, Cary, Ware & Freidenrich.
9.2.17 Buyer shall have received a satisfactory legal opinion
regarding FCC matters from Haley, Bader & Potts.
9.2.18 Buyer shall have received a satisfactory legal
opinion(s) from in-house counsel for Conseco.
9.2.19 Buyer shall have received a satisfactory legal opinions
from counsel for the Prudential and Northeast.
9.2.20 The Stock Trust and the Stock Escrow and Security
Agreement shall have been executed and the Stock Trustee's fees shall have been
paid.
9.2.21 The Indemnification and Escrow Agreement shall have been
executed.
9.2.22 Any and all close corporation agreements, buy-sell
agreements, stock purchase agreements, option agreements, installment purchase
agreements, or similar agreements or arrangements affecting the purchase, sale
or transfer of the Company's or any Subsidiaries' capital stock (other than any
such agreements to be entered into as part of the Warrant Purchase Transaction)
shall have been terminated, and all of the shareholders of the Company and any
Subsidiary, option holders, warrant holders, and others having any interest or
claim, directly or indirectly, to the capital stock of the Company or any
Subsidiary shall have forever waived any and all rights with respect thereto.
9.2.23 The waiting period under the HSR Act with respect to the
San Diego Transaction shall have been terminated or expired.
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9.2.24 Conseco shall have delivered to the Company a letter
releasing the Company from those claims, liabilities and obligations as to which
the Warrant Sellers provided a release in Section 2.3 hereof.
ARTICLE X
10 REDEMPTION CLOSING; REDEMPTION CLOSING DELIVERIES
10.1 REDEMPTION CLOSING.
10.1.1 The Redemption Closing (the "Redemption Closing") is
being held simultaneously with the execution hereof on the date first written
above (the "Redemption Closing Date") commencing at 8:00 a.m. eastern time in
the offices of Graydon, Head & Ritchey in Cincinnati, Ohio.
10.2 DELIVERIES AT REDEMPTION CLOSING.
10.2.1 At the Redemption Closing, Sellers and the Company shall
deliver to Buyer:
10.2.1.1 The opinions of Price Waterhouse and of
counsel as required by Sections 9.2.15 through 9.2.19.
10.2.1.2 Certificates of the Secretaries of State of
each of the states in which the Company and the Subsidiaries are incorporated,
each dated within a reasonable period of the Redemption Closing Date, confirming
the legal existence and legal and tax good standing of the Company and the
Subsidiaries.
10.2.1.3 Certificates of the Secretaries of State of
each of the states in which the Company and the Subsidiaries are qualified as
foreign corporations, each dated within a reasonable period of the Redemption
Closing Date, confirming the qualification of the Company and each Subsidiary as
a foreign corporation and the legal and tax good standing of the Company and the
Subsidiaries therein.
10.2.1.4 Certified copies of the Amended and Restated
Certificate of Incorporation of the Company and the articles of incorporation or
other charter documents of each Subsidiary, as amended, certified by the
Secretaries of State of each of the states in which the Company and the
Subsidiaries are incorporated or formed within a reasonable period of the
Redemption Closing Date.
10.2.1.5 Bylaws or other governance documents of the
Company and each Subsidiary, as amended, certified by the Secretary of the
Company and each Subsidiary.
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10.2.1.6 Such other documents, instruments and
certificates as Buyer and its counsel may reasonably require to evidence the
satisfaction or waiver of the conditions set forth in Section 9.2 hereof and the
compliance by Sellers and the Company with the provisions of this Agreement.
10.2.2 At the Redemption Closing, the Warrant Sellers shall
deliver the Warrants to the Company along with sufficient documents of
assignment and transfer of all right, title and interest in the Warrants to the
Company.
10.2.3 At the Redemption Closing, the Company shall deliver to
the Warrant Sellers the Net Warrant Redemption Payment and shall repay the
Conseco Debt.
10.2.4 At the Redemption Closing, the Class A Shareholders
shall deliver to the Company certificates representing all of the Class A Stock,
properly endorsed or accompanied by stock powers sufficient for, as applicable,
the transfer of good and marketable title to the Class A Stock to the Company.
10.2.5 At the Redemption Closing, the Company shall deliver to
the Class A Shareholders the Net Class A Redemption Payment.
10.2.6 At the Redemption Closing, Buyer shall deliver the
Sellers and the Company the opinion of counsel required by Section 9.1.11.
ARTICLE XI
11 CONDITIONS TO STOCK CLOSING
11.1 CONDITIONS PRECEDENT TO SALE OF CLASS B STOCK BY CLASS B
SHAREHOLDERS AT THE STOCK CLOSING. The obligation of the Class B Shareholders to
sell, assign, transfer and deliver the Class B Stock, as applicable, to Buyer
pursuant to Section 1.1 is subject to the fulfillment, prior to or at the Stock
Closing, of each of the following conditions, any one or more of which may be
waived in whole or in part by the Class B Shareholders in a writing signed by
Stock Sellers Representative:
11.1.1 All consents, authorizations, approvals, orders, waivers
and expiration of waiting periods required as a result of the transactions
contemplated by this Agreement (including without limitation the Governmental
Consents) shall have been obtained.
11.1.2 Buyer (and any Affiliate party to any Ancillary
Document) shall not have breached in any material respect its obligations under
this Agreement or any Ancillary Document to be performed prior to or in
connection with the Stock Closing;
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provided, however, that in the event of any such breach, the Class B
Shareholders shall afford Buyer the opportunity to cure any such failure, if
reasonably capable of being cured, within thirty (30) days following Buyer's
receipt of written demand specifying such failure and provided, however that in
the event such breach involves solely the payment of money due hereunder, such
cure shall be made within two (2) business days after receipt of notice.
11.1.3 All Stock Closing deliveries required to be made by
Buyer to the Class B Shareholders pursuant to Article XII shall have been made
by Buyer.
11.2 CONDITIONS PRECEDENT TO PURCHASE OF CLASS B STOCK BY BUYER AT THE
STOCK CLOSING. The obligation of Buyer to purchase the Class B Stock from the
Class B Shareholders pursuant to Section 1.1 is subject to the fulfillment,
prior to or at the Stock Closing, of each of the following conditions, any one
or more of which may be waived in whole or in part by Buyer in a writing signed
by Buyer:
11.2.1 All consents, authorizations, approvals, orders, waivers
and expiration of waiting periods required as a result of the transactions
contemplated by this Agreement (including without limitation the Governmental
Consents) shall have been obtained. Specifically, with respect to the FCC
Consent, this condition shall be deemed satisfied upon issuance of the FCC's
initial approval, and shall not require that such FCC Consent shall have become
a final order. Moreover, the waiting period under the HSR Act with respect to
the transactions contemplated hereby shall have been terminated or expired.
11.2.2 The Class B Shareholders and the Company (and any
Subsidiary or other Affiliate party to any Ancillary Document) shall not have
breached in any material respect their respective obligations under this
Agreement or any Ancillary Document to be performed prior or in connection with
the Stock Closing; provided, however, that in the event of any such breach,
Buyer shall afford the Class B Shareholders and/or the Company the opportunity
to cure any such failure, if reasonably capable of being cured, within thirty
(30) days following the receipt by the Class B Shareholders and the Company of
written demand specifying such failure and provided, however that in the event
such breach involves solely the payment of money due hereunder, such cure shall
be made within two (2) business days after receipt of notice.
11.2.3 All Stock Closing deliveries required to be made by the
Class B Shareholders and the Company to Buyer pursuant to Article XII shall have
been made by the Class B Shareholders. Specifically, but not in limitation of
the preceding sentence, the Class B Shareholders shall take all actions as are
legally required and customary in order to effectuate the complete transfer of
good title to the Class B Stock to Buyer, free, clear and unencumbered.
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ARTICLE XII
12 STOCK CLOSING; STOCK CLOSING DELIVERIES
12.1 STOCK CLOSING.
12.1.1 The purchase and sale of the Class B Stock contemplated
in Section 1.1 (the "Stock Closing") shall occur, subject to the prior
satisfaction or express written waiver of each of the conditions set forth in
Article XI (other than those conditions contemplated to be satisfied at the
Stock Closing), within fifteen (15) days after the receipt of all governmental
approvals as herein provided; provided, however, that Buyer shall be permitted
at its option to defer the Stock Closing thereafter until such time as the FCC
approval of the renewal of each American Station License which is subject to
renewal during 1996 and 1997 becomes a final order; for purposes of this Section
12.1.1 and with respect to each American Station License, a "final order" shall
mean an order of the FCC which is no longer subject to administrative or
judicial review and which does not impose conditions which are adverse to the
continued operation of such American Station in the manner in which it is
currently operated. Buyer shall provide the Class B Shareholders written notice
of the Stock Closing at least five business days prior to the Stock Closing. The
Closing shall be held at 9:00 a.m. eastern time in the offices of Graydon, Head
& Ritchey in Cincinnati, Ohio or at such other place as the parties hereto may
agree in writing, on the date designated by Buyer in such notice (the "Stock
Closing Date").
12.2 DELIVERIES AT STOCK CLOSING.
12.2.1 At the Stock Closing, the Class B Shareholders and the
Company shall deliver to Buyer:
12.2.1.1 A letter from Gray, Cary, Ware & Freidenrich,
in form and substance reasonably satisfactory to Buyer, reaffirming as of the
Stock Closing Date each of the opinions rendered by such firm in the opinion
letter referred to in Section 9.2.16.
12.2.1.2 A letter from Haley, Bader & Potts, in form
and substance reasonably satisfactory to Buyer, reaffirming as of the Stock
Closing Date each of the opinions rendered by such firm in the opinion letter
referred to in Section 9.2.17.
12.2.1.3 Certificates representing all of the Class B
Stock, properly endorsed or accompanied by stock powers sufficient for, as
applicable, the transfer of good and marketable title to the Class B Stock to
Buyer on the books of the Company.
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12.2.1.4 All contracts, insurance policies or other
documents, books, minute books, financial and accounting records of the Company
and the Subsidiaries not previously delivered to Buyer and not located on the
premises of the Company or the Subsidiaries.
12.2.1.5 Resignations in a form acceptable to Buyer of
all of the then current directors and officers of the Company and the
Subsidiaries, provided that this shall not in itself impact the employment
status of Lynch and De Francesco pursuant to their Employment Agreements
referred to in Sections 9.2.7 and 9.2.9, respectively.
12.2.2 At the Stock Closing, Buyer shall deliver to the Class B
Shareholders:
12.2.2.1 A letter from Graydon, Head & Ritchey, in
form and substance reasonably satisfactory to the Class B Shareholders,
reaffirming as of the Stock Closing Date each of the opinions rendered by such
firm in the opinion letter referred to in Section 9.1.11.
12.2.2.2 (A) if the Stock Closing occurs prior to the
Third Anniversary, the Net Stock Purchase Payment; or (B) if the Stock Closing
occurs on or after the Third Anniversary, the Residual Stock Purchase Payment.
ARTICLE XIII
13 TERMINATION, AMENDMENT, PERFORMANCE AND WAIVER
13.1 TERMINATION.
13.1.1 This Agreement may be terminated by the Class B
Shareholders in the event that the Stock Closing fails to occur (following the
receipt of all necessary governmental approvals and consents and satisfaction of
all other applicable conditions to the Stock Closing provided herein) as a
result of the failure, unwillingness or inability (legal or otherwise) of Buyer
to consummate the Stock Closing as required hereby; provided, however, that: (A)
prior to such termination, the Class B Shareholders shall afford the Buyer the
opportunity to cure any such failure, unwillingness or inability if reasonably
capable of being cured, within thirty (30) days following the receipt by the
Buyer of a written demand specifying such failure, unwillingness or inability,
provided, however that in the event such failure, unwillingness or inability
involves solely the payment of money due hereunder, such cure shall be made
within two (2) business days after receipt of notice; and (B) the Class B
Shareholders may not terminate this Agreement if such failure of the Stock
Closing to occur is a result of the failure: (i) by the Class B Shareholders,
the Company or any Subsidiary to perform any of its respective obligations,
covenants
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or agreements under this Agreement or any Ancillary Document, or (ii) of any of
the conditions to the Stock Closing set forth in Section 11.2 having not been
satisfied as a result of some action or inaction on the part of any Class B
Shareholder, the Company or any Subsidiary.
13.1.2 This Agreement may be terminated by the Buyer in the
event that the Stock Closing fails to occur (following the receipt of all
necessary governmental approvals and consents and satisfaction of all other
applicable conditions to the Stock Closing provided herein) as a result of the
failure, unwillingness or inability (legal or otherwise) (including without
limitation the failure, unwillingness or inability of any Class B Shareholder to
deliver good and marketable title to the Class B Stock to Buyer at the Stock
Closing) of the Class B Shareholders or the Company to consummate the Stock
Closing as required hereby; provided, however, that: (A) prior to such
termination, the Buyer shall afford the Class B Shareholders and the Company the
opportunity to cure any such failure, unwillingness or inability if reasonably
capable of being cured, within thirty (30) days following the receipt by the
Class B Shareholders of a written demand specifying such failure, unwillingness
or inability, provided, however that in the event such failure, unwillingness or
inability involves solely the payment of money due hereunder, such cure shall be
made within two (2) business days after receipt of notice; and (B) Buyer may not
terminate this Agreement if such failure of the Stock Closing to occur is a
result of the failure: (i) by Buyer or any Affiliate of Buyer to perform any of
its respective obligations, covenants or agreements under this Agreement or any
Ancillary Document, or (ii) of any of the conditions to the Stock Closing set
forth in Section 11.1 having not been satisfied as a result of some action or
inaction on the part of any Buyer or Affiliate of Buyer.
13.1.3 This Agreement may be terminated by Buyer if: (A) with
respect to the Company or any Subsidiary, a court enters a decree or order for
relief in an involuntary case under any applicable bankruptcy, insolvency or
other similar law, or appoints a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Company or any
Subsidiary or for any substantial part of the property of the Company or any
Subsidiary, or orders the winding up or liquidation of the affairs of the
Company or any Subsidiary; or a petition initiating an involuntary case under
any such bankruptcy, insolvency or similar law is filed against the Company or
any Subsidiary; or the Company or any Subsidiary commences a voluntary case
under any applicable bankruptcy, insolvency or similar law, or makes a general
assignment for the benefit of creditors, or fails generally to pay its debts as
such debts become due, or takes any action in furtherance of the foregoing; or
(B) any court of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement; or (C) any court, legislative
body
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or Governmental Entity has taken, or is reasonably expected to take, action that
prohibits or would make the consummation of the transactions contemplated hereby
unlawful as determined by Buyer in its sole discretion reasonably exercised;
provided, however, that the failure to obtain the FCC Consent shall not be a
basis on which Buyer may terminate this Agreement pursuant to this Section
unless the failure to obtain such consent is the result of some action or
inaction on the part of any Seller, the Company or any Subsidiary.
13.1.4 Upon the mutual written consent of Buyer and the Class B
Shareholders this Agreement may be terminated on such terms and conditions as so
agreed.
13.1.5 Notwithstanding any other provision of this Section
13.1, no party hereto may effect a termination hereof if such party is then in
default or breach of this Agreement or any Ancillary Document.
13.2 EFFECT OF TERMINATION. The date on which this Agreement is
terminated is referred to herein as a "Termination Date."
13.2.1 In the event of the termination of this Agreement
pursuant to Section 13.1.1: (A) the Class B Shareholders shall be entitled to
payment of the unpaid portion of the Stock Purchase Price, if any, and to retain
any portion of the Stock Purchase Price previously paid, and (B) the parties
shall instruct the Indemnification Escrow Agent to immediately pay to the Class
B Shareholders the Stock Purchase Escrow Consideration if such amount has
previously been deposited into the Escrow Fund plus any interest earned thereon,
which amounts shall constitute liquidated damages. It is understood and agreed
that such liquidated damage amount represents Buyer's, the Company's and the
Class B Shareholders reasonable estimate of actual damages and does not
constitute a penalty. Recovery of liquidated damages shall be the sole and
exclusive remedy of the Company and the Class B Shareholders against Buyer for
failing to consummate this Agreement and shall be applicable regardless of the
actual amount of damages sustained and all other remedies are deemed waived by
the Company and the Class B Shareholders.
13.2.2 In the event of the termination of this Agreement
pursuant to either Sections 13.1.2 or 13.1.3 hereof, then: (A) the Class B
Shareholders, jointly and severally, shall immediately pay to Buyer an amount
equal the sum of (i) the portion of the Stock Purchase Price plus the Extension
Payment that has previously been paid to the Class B Shareholders, if any; plus
(ii) any Tax Payments that have previously been paid to the Company pursuant to
Section 8.10, if any; plus (iii) interest on the amounts set forth in the
preceding clauses (i) and (ii) from the date of the original payment thereof to
the Class B Shareholders and/or the Company, as applicable, to the Termination
Date at the rate of interest per annum announced by Banque Paribas to be its
prime rate or base rate
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of interest from time to time at its principal office in Chicago, Illinois; (B)
the parties shall instruct the Indemnification Escrow Agent to immediately pay
to Buyer the Stock Purchase Escrow Consideration if such amount (or any portion
thereof) has previously been paid, plus any interest earned thereon. Upon the
termination of this Agreement as provided in Section 13.1.2 or Section 13.1.3,
this Agreement shall forthwith become void and have no effect; provided,
however, that, in addition to the actions required by clauses (A) and (B) of
this Section, no such termination will relieve the Class B Shareholders or the
Company for liability for damages or other relief at law or in equity as a
result of any prior breach by such party.
13.2.3 No termination of this Agreement shall affect the
redemption of the Warrants or the Class A Stock or repayment of the Conseco
Debt, and no such termination shall in and of itself permit Buyer or the Company
to recover amounts paid to the Warrant Sellers or the Class A Shareholders in
connection therewith.
13.2.4 In the event of the termination of this Agreement
pursuant to Section 13.1.4 hereof, this Agreement shall be terminated on the
terms and conditions agreed to in writing by Buyer and Stock Sellers
Representative.
13.3 SPECIFIC PERFORMANCE. The parties recognize that if any Class B
Shareholder or the Company refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other remedies
that may be available to Buyer, to obtain specific performance of the terms of
this Agreement. If any action is brought by Buyer to enforce this Agreement,
each Class B Shareholder and the Company shall waive the defense that there is
an adequate remedy at law.
13.4 REMEDIES CUMULATIVE. Except with respect to claims for indemnity
arising out of any Buyer Escrow Indemnified Claim, Buyer Non-Escrow Indemnified
Claim or Seller Indemnified Claim as set forth in Section 8.12, the remedies
provided herein shall be cumulative and shall not preclude the assertion by any
party hereto of any other rights or the seeking of any other remedies to enforce
this Agreement.
13.5 WAIVER. At any time prior to the Stock Closing, Buyer or the Class
B Shareholders may: (A) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (B) waive any inaccuracies
in the representations and warranties of the other party contained herein or in
any document delivered pursuant hereto, and (C) waive compliance with any of the
agreements, covenants, or conditions contained herein. Any agreement on the part
of a party hereto to any extension or waiver shall be valid if set forth in an
instrument in writing signed on behalf of such party by a duly authorized
officer.
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ARTICLE XIV
14 MISCELLANEOUS PROVISIONS
14.1 POST-CLOSING ACTIONS. If at any time, and from time to time, after
the Redemption Closing or Stock Closing, any party reasonably determines that
any further conveyance, assignment or other document or any further action is
necessary or desirable to carry out the purposes of and to make effective the
transactions contemplated by this Agreement, the parties agree to execute and
deliver all such instruments and take all such actions as may be reasonably
necessary or advisable for such purpose.
14.2 ENTIRE AGREEMENT; AMENDMENT. This Agreement (including the
Ancillary Documents) contains the entire agreement among the parties hereto and
supersedes all prior oral or written agreements, promises, representations,
commitments or understandings with respect to the matters provided for herein.
This Agreement may be modified or amended only by a writing duly executed by
Buyer, the Company, and the Class B Shareholders, which modification or
amendment shall be binding upon all of the parties hereto; provided, however,
Warrant Sellers and Class A Shareholders must approve in writing any
modification or amendment hereto effecting the rights or obligations of the
Warrant Sellers and Class A Shareholders hereunder.
14.3 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS. Unless the context
otherwise requires: (A) all references to Sections, Articles, Schedules or
Exhibits are to Sections, Articles, Schedules or Exhibits of or to this
Agreement; (B) each term defined in this Agreement has the meaning assigned to
it; (C) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect on the date hereof; (D) "or" is disjunctive but not
necessarily exclusive; (E) words in the singular include the plural and vice
versa; (F) the term "Affiliate" has the meaning given it in Rule 12b-2 of
Regulation 12B under the Securities Exchange Act of 1934, as amended; and (G)
all references to "$" or dollar amounts will be to lawful currency of the United
States of America.
14.4 NO INTENDED THIRD PARTY BENEFICIARIES. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any person
or entity other than the parties hereto and their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.
14.5 ASSIGNMENT AND BINDING EFFECT. This Agreement and the rights and
obligations of the Class B Shareholders and the Company hereunder may not be
assigned by any Seller or the Company without the prior written consent of
Buyer. Buyer shall have the right to
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assign and/or delegate all or any portion of its rights and obligations under
this Agreement, including without limitation assignments as collateral, provided
that no such assignment and/or delegation shall relieve Buyer of its obligations
hereunder in the event that its assignee fails to performs the obligations
delegated. Moreover, in the event that Buyer in its discretion reasonably
exercised determines that in order to make certain the consummation of the
transactions contemplated hereby or their equivalents it would be advisable for
it (or its designee) to purchase all or some portion of the stock of one or more
Subsidiaries, or all or some portion of the assets of one or more Subsidiaries,
the Class B Shareholders and the Company shall, and the Company shall cause the
Subsidiaries to, take such actions as are reasonably requested by Buyer
effectuate the same, it being recognized that any such action shall be
structured in such a manner as to insure to the Class B Shareholders the same
economic benefit as they would realize hereunder upon Closing if such
restructuring did not occur. Notwithstanding the foregoing, the Class B
Shareholders and the Company shall have no obligation to take any action which
could reasonably subject the Class B Shareholders or the Company to material
risk or obligation unless Buyer provides reasonably adequate protection or
indemnification from such risk or obligation. All covenants, agreements,
statements, representations, warranties and indemnities in this Agreement by and
on behalf of any of the parties hereto shall bind and inure to the benefit of
their respective successors and permitted assigns of the parties hereto.
14.6 WAIVERS. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a continuing waiver, and no waiver shall be
binding unless executed in writing by the party making the waiver.
14.7 NOTICES. All notices, demands or other communications which may be
or are required to be given by any party to any other party pursuant to this
Agreement, shall be in writing and shall be mailed by certified mail, return
receipt requested, postage prepaid, or transmitted by hand delivery, national
overnight express, telegram or facsimile transmission, addressed as follows:
14.7.1 If to Buyer:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Randy Michaels
Fax: (513) 621-6087
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with a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Fax: (513) 651-3836
14.7.2 If to the Warrant Sellers or the Class A
Shareholders, to Warrant Sellers
Representative as follows:
Conseco, Inc.
11815 N. Pennsylvania Street
Carmel, Indiana 46032-4911
Attention: Eric S. Tooker
Fax: (317) 817-3578
with a copy (which shall not constitute notice) to:
Henderson, Daily, Withrow & Devoe
2600 One Indiana Square
Indianapolis, Indiana 46204
Attention: Robert Wildman, Esq.
Fax: (317) 639-0191
14.7.3 If to the Class B Shareholders, to Stock
Sellers Representative as follows:
John T. Lynch
1508 Uno Verde Court
Solana Beach, California 92075
Fax: (619) 481-3269
with a copy (which shall not constitute notice) to:
Gray, Cary, Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101-4297
Attention: J. Terence O'Malley, Esq.
Fax: (619) 236-1048
14.7.4 If to the Company:
Noble Broadcast Group, Inc.
4891 Pacific Highway
San Diego, California 92110-4082
Attention: President
Fax: (619) 294-9393
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with a copy (which shall not constitute notice) to:
Gray, Cary, Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101-4297
Attention: J. Terence O'Malley, Esq.
Fax: (619) 236-1048
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or telefax
transmission log being deemed conclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
14.8 POSSESSION AND CONTROL. Notwithstanding anything to the contrary
in this Agreement or the TBAs, between the date hereof and of the Stock Closing
Date, Buyer shall not directly or indirectly control, supervise or direct, or
attempt to control, supervise or direct, the business and operations of the
Stations, the Company or any Subsidiary, and such operation, including complete
control and supervision of all programs, shall be the sole responsibility of the
Company and the Subsidiaries, provided, however, that Buyer shall have all
rights of access as provided in Section 6.1 and otherwise in this Agreement so
that an uninterrupted and efficient transfer of ownership may be effected.
14.9 STOCK SELLERS REPRESENTATIVE. Each Class B Shareholder hereby
appoints Lynch as their agent and representative (the "Shareholders
Representative") for the purposes of acting for and binding such Class B
Shareholder for all purposes of this Agreement, including, without limitation:
(i) amending, restating, supplementing, terminating or otherwise modifying this
Agreement or any Ancillary Document or making any waivers on behalf of the Class
B Shareholders pursuant hereto or thereto; and (ii) settling of any
controversies or disagreements between Buyer and/or the Class B Shareholders
hereunder; and (iii) receiving or giving any notices to or from the Class B
Shareholders hereunder; and (iv) communicating on behalf of the Class B
Shareholders with the Buyer as to any matters relating to this Agreement. Buyer
shall be entitled to presumptively rely without further inquiry upon all acts
of, and communications from, Stock Sellers Representative as being the
authorized actions and communications of the Shareholders Representative as
approved by the Class B Shareholders.
14.10 WARRANT SELLERS REPRESENTATIVE. Each Warrant Seller and Class A
Shareholder hereby appoints Conseco, Inc. as their agent and representative (the
"Warrant Sellers Representative") for the purposes of acting for and binding
such Warrant Seller and Class A
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Shareholder for all purposes of this Agreement, including, without limitation:
(i) amending, restating, supplementing, terminating or otherwise modifying this
Agreement or any Ancillary Document or making any waivers on behalf of the
Warrant Sellers and the Class A Shareholders pursuant hereto or thereto; and
(ii) settling of any controversies or disagreements between Buyer and/or Warrant
Sellers and/or the Class A Shareholders hereunder; and (iii) receiving or giving
any notices to or from Warrant Sellers and Class A Shareholders hereunder; and
(iv) communicating on behalf of Warrant Sellers and the Class A Shareholders
with the Buyer as to any matters relating to this Agreement. Buyer shall be
entitled to presumptively rely without further inquiry upon all acts of, and
communications from, Warrant Sellers Representative as being the authorized
actions and communications of the Warrant Sellers Representative as approved by
Warrant Sellers and Class A Shareholders. Conseco shall have no liability to
Warrant Sellers or the Class A Shareholders for its acts or omissions as Warrant
Sellers Representative so long as it is acting in good faith.
14.11 HEADINGS. The article and section headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
14.12 SEVERABILITY. Wherever possible, each provision of this Agreement
will be interpreted so as to be effective and valid under applicable law, but if
any provision of this Agreement is prohibited by or invalid under such law, such
provision will be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Agreement.
14.13 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio (but not including the
choice-of-laws rules thereof).
14.14 COUNTERPARTS; EXECUTION. This Agreement may be executed in as
many counterparts as may be required, and each such counterpart hereof shall be
deemed to be an original instrument, but all such counterparts together shall
constitute but a single agreement.
14.15 CONSENT. Each of the Warrant Sellers, the Class A Shareholders
and the Class B Shareholders hereby consent to, authorize and approve the
Company's execution and delivery of this Agreement and each of the Ancillary
Documents to which it is a party, and the consummation of the transactions
contemplated hereby and thereby, including without limitation the adoption of
the Restated Certificate of Incorporation filed with the Delaware Secretary of
State and the Restated Bylaws of the Company.
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EXHIBIT A
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
Page
<S> <C>
$ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Accu-Weather Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Acquisition Proposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
American Station Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
American Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Ancillary Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Arbenz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Available Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Barclay's Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Barter Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Base Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
BFI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
BLH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Buyer's Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
CERCLA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Chase Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Chase Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Chesapeake . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
</TABLE>
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<TABLE>
<S> <C>
CIHC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Class A Escrow Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Class A Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Class A Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Class A Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Class A Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Class B Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Class B Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Class B Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Communications Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Company Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Company Tax Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Company Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Concession Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Conseco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conseco Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Covenant Breach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Credit Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Damages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Decree . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Decrees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
DeFrancesco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Denver Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Disclosure Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
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<TABLE>
<S> <C>
Employee pension benefit plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Employee welfare benefit plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Environmental Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Environmental Law(s) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Escrow Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Extension Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
FCC Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Fifth Anniversary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Financing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Financing Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Fraud Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Governmental Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Governmental Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Indemnification and Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Indemnification Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Intellectual Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Investment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Jimenez . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Lynch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Mass layoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
</TABLE>
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<PAGE> 87
<TABLE>
<S> <C>
Mexican Station Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Mexican Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Multiemployer plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Multiemployer plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Net Class A Redemption Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Net Stock Purchase Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Net Warrant Redemption Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Noble Denver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Noble Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Noble Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Noble San Diego . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Northeast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Or . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
Permit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Perpetual Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Plant closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Prudential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Qualified Representation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
R.D.P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Rate Protection Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
RCRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
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<TABLE>
<S> <C>
Real Estate Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Redemption Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Redemption Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Residual Stock Purchase Escrow Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Residual Stock Purchase Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Sales Agency Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
San Diego Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SCT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Sellers Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SFB Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Shareholders Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Sources and Uses Schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Statute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Stock Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Stock Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Stock Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Stock Escrow and Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Stock Purchase Escrow Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Stock Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
</TABLE>
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<TABLE>
<S> <C>
Stock Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Stock Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Surveys . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Tax Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
TBA Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
TBAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Termination Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Third Anniversary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Tijuana Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Titles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
WARN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Warrant Escrow Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Warrant Purchase Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Warrant Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Warrant Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrant Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Warrant Sellers Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
</TABLE>
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<PAGE> 1
INVESTMENT AGREEMENT
This Investment Agreement ("Agreement") is entered into as of
February 20, 1996, by and between (A) JACOR COMMUNICATIONS, INC., an Ohio
corporation ("Buyer"); (B) NOBLE BROADCAST GROUP, INC. a Delaware corporation
("Company"); (C) JOHN T. LYNCH ("Lynch"); (D) FRANK A. DE FRANCESCO ("De
Francesco"); (E) THOMAS R. JIMENEZ ("Jimenez"); (F) WILLIAM R. ARBENZ
("Arbenz"), under the following circumstances:
A. Buyer desires to purchase a Warrant on the terms and
conditions set forth herein.
B. Company is willing to issue the Warrant to Buyer on the
terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the mutual promises
herein made, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used herein, the following terms
shall have the meanings ascribed to them below.
1.1.1 "ACCREDITED INVESTOR" has the meaning ascribed to it in
Regulation D of the Securities and Exchange Commission (Rule
501(a)) and the Ohio Securities law.
1.1.2 "AFFILIATE" has the meaning ascribed to it in Rule 12b-2
of Regulation 12B under the Securities Exchange Act of 1934, as
amended.
1.1.3 "ARBENZ" means William R. Arbenz.
1.1.4 "BFI" means Broadcast Finance, Inc., an Ohio corporation.
1.1.5 "BLH" means Bankers Life Holding Corporation, a Delaware
corporation.
1.1.6 "BUYER" means Jacor Communications, Inc., an Ohio
corporation.
1.1.7 "CHASE" means The Chase Manhattan Bank, N.A.
<PAGE> 2
1.1.8 "CHASE DEBT" means all obligations of the Company or any
of its Subsidiaries pursuant to a Credit Agreement, dated as of
August 18, 1995, among the Company, NBH, the lenders party
thereto in their capacities as lenders thereunder and Chase, as
agent (and any successor agent thereunder), together with the
related documents thereto.
1.1.9 "CHASE WARRANT" means the warrant to acquire 1,000 shares
of common stock of NBH issued pursuant to a Warrant Agreement
dated as of August 18, 1995, between NBH and Chase.
1.1.10 "CIHC" means CHIC, Incorporated, a Delaware corporation.
1.1.11 "CLASS A SHAREHOLDER(S)" means Prudential and Northeast
(each referred to herein individually as a "Class A
Shareholder", and together as the "Class A Shareholders").
1.1.12 "CLASS A STOCK" means the Class A convertible common
stock of Company.
1.1.13 "CLASS B SHAREHOLDER(S)" means Lynch, De Francesco,
Jimenez and Arbenz (each referred to herein individually as a
"Class B Shareholder", and collectively as the "Class B
Shareholders")
1.1.14 "CLASS B STOCK" means the Class B voting common stock of
Company.
1.1.15 "CLOSING" has the meaning ascribed to it in SECTION 9.1
of this Agreement.
1.1.16 "COMPANY" means Noble Broadcasting Group, Inc., a
Delaware corporation.
1.1.17 "COMPANY REPRESENTATIONS AND WARRANTIES" has the meaning
ascribed to it in SECTION 3 of this Agreement.
1.1.18 "CONSECO DEBT" means all obligations of the Company
under or with respect to the Subordinated Notes whether for
principal, interest (including, without limitation, interest,
as provided in the Subordinated Notes, accruing after the
filing of a petition of bankruptcy), premium, fees, expenses,
indemnification or any other amounts owing on or with respect
thereto.
1.1.19 "CONSECO INVESTMENT AGREEMENT" means the Noble Broadcast
Group Investment Agreement between the Company and Conseco,
Inc., an Indiana corporation, dated August 18, 1998.
2
<PAGE> 3
1.1.20 "CONSECO WARRANT" means warrants to acquire Class A
Stock issued pursuant to the Conseco Investment Agreement.
1.1.21 "COVENANT BREACH" has the meaning ascribed to it in
Section 6.2.4 of the Stock Agreement.
1.1.22 "DAMAGES" means all losses, costs, damages, liabilities
and expenses which cause economic detriment to the damaged
party, including reasonable attorneys' fees and expenses.
1.1.23 "DE FRANCESCO" means Frank A. De Francesco.
1.1.24 "DISCLOSURE LETTER" has the meaning ascribed to it in
SECTION 4 of the Stock Agreement.
1.1.25 "ENDORSEMENTS" has the meaning ascribed to it in SECTION
1.1.14 of the Stock Escrow.
1.1.26 "ESCROW AGENT" means The Fifth Third Bank, an Ohio
banking corporation.
1.1.27 "FCC" means the Federal Communications Commission.
1.1.28 "FCC APPROVAL" means any FCC approval required in
connection with a transaction, including, but not limited to,
FCC approval of any transfer of control to the Holder of any
FCC License, resulting from (i) exercise of the Warrant to
acquire Class A Stock; (ii) conversion of Class A Stock issued
upon the exercise of the Warrant to Class B Stock; or (iii)
assignment of all or part of the Warrant to one or more third
parties as the Holder may designate; if such a transfer of
control would require FCC approval under then existing law
(including the Communications Act or the written policies,
rules and regulations promulgated by the FCC).
1.1.29 "FCC LICENSE" means any license, permit or other
authorization issued by the FCC.
1.1.30 "HOLDER" means the holder of the Warrant.
1.1.31 "HOLDER RIGHTS" means the Holder's right to (i) have
Class A Stock issued upon exercise by the Holder of the
Warrant; or (ii) convert Class A Stock issued upon the exercise
of the Warrant to Class B Stock.
1.1.32 "JIMENEZ" means Thomas R. Jimenez .
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1.1.33 "LYNCH" means John T. Lynch.
1.1.34 "NBH" means Noble Broadcast Holdings, Inc., a Delaware
corporation.
1.1.35 "NEW CREDIT AGREEMENT" means the Credit Agreement
between BFI and the Company of even date herewith pursuant to
which the Company shall have obtained a secured loan facility
from BFI.
1.1.36 "NEW SECURITIES" means any authorized but unissued or
treasury shares of the Company, notes or other evidences of
indebtedness of the Company or any other securities of the
Company, including but not limited to options, warrants or
other convertible securities, except for (a) any offer, sale or
issuance of options pursuant to an employee stock option plan
approved by Buyer or any Common Shares issuable upon exercise
of such options; (b) any offer, sale or issuance of notes or
other evidences of indebtedness (not convertible to an equity
security) in connection with a secured loan transaction with a
bank or other financial institution; or (c) any offer, sale or
issuance of shares, notes, evidences of indebtedness and other
securities of the Company offered for sale or issuance in
connection with a public offering of such securities registered
under the Securities Act.
1.1.37 "NORTHEAST" means Northeast Ventures, II, a limited
partnership.
1.1.38 "OTHER GOVERNMENTAL APPROVALS" means any approvals
required from the Federal Trade Commission, the United States
Department of Justice, or any other federal, state, or local
governmental approvals, required to be obtained before a Holder
may lawfully exercise Holder Rights or any other rights Holder
may have pursuant to this Agreement.
1.1.39 "PRUDENTIAL" means Prudential Venture Partners II, L.P.,
a limited partnership.
1.1.40 "REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreement between the Company and Buyer dated as of
February 1, 1996.
1.1.41 "RESTATED ARTICLES" means the Restated Certificate of
Incorporation of the Company attached to this Agreement as
Exhibit 2.4.
1.1.42 "SECURITIES ACT" means the Securities Act of 1933, as
amended.
1.1.43 "STOCK AGREEMENT" means the Stock Purchase and Stock and
Warrant Redemption Agreement of even date herewith among (i)
the Buyer; (ii) the Class A Shareholders; (iii) the Class B
Shareholders; (iv) the Warrant Sellers; and (v) Company.
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1.1.44 "STOCK CLOSING" has the meaning ascribed to it in
SECTION 12.1.1 of the Stock Agreement.
1.1.45 "STOCK ESCROW" means the Stock Escrow and Security
Agreement of even date herewith among (i) the Buyer; (ii) the
Class B Shareholders; (iv) the Trustee; and the Escrow Agent.
1.1.46 "STOCK PURCHASE PRICE" has the meaning ascribed to it in
SECTION 1.2 of the Stock Agreement.
1.1.47 "SUBORDINATED NOTES" means the $37 million in
Subordinated Notes of the Company issued by the Company
pursuant to the Conseco Investment Agreement.
1.1.48 "SUBSIDIARY" shall mean any corporation, association,
partnership, joint venture or other business entity of which
the Company and/or any Subsidiary of the Company either (a) in
respect of a corporation, owns or controls, directly or
indirectly, fifty percent (50%) or more of the outstanding
stock having ordinary voting power to elect a majority of the
board of directors or similar managing body, irrespective of
whether or not a class or classes shall or might have voting
power by reason of the happening of any contingency, or (b) in
respect of an association, partnership, joint venture or other
business entity, is entitled to share in more than fifty
percent (50%) of the profits and losses, however determined.
1.1.49 "TRIGGERING EVENTS" has the meaning ascribed to it in
SECTION 10.1 of this Agreement.
1.1.50 "TRUSTEE" means Philip H. Banks as trustee under the
Trust Agreement.
1.1.51 "TRUST AGREEMENT" means the Trust Agreement dated
February 20, 1996, among Lynch, De Francesco, Jimenez, and
Arbenz, and their respective spouses, as co-grantors, and the
Trustee in the form of EXHIBIT 1.1.40 to the Stock Escrow.
1.1.52 "WARRANT" means the Warrant issued pursuant to this
Agreement to purchase Class A Stock in an amount equal to 79.1%
of the outstanding common stock of the Company calculated on a
fully-diluted post-exercise basis as of the time of exercise.
1.1.53 "WARRANT SELLER(S)" means CIHC and BLH (each referred to
herein individually as a "Warrant Seller", and together as the
"Warrant Sellers").
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1.1.54 "WARRANT PURCHASE PRICE" has the meaning ascribed to it
in SECTION 2.1 of this Agreement.
ARTICLE 2
PURCHASE OF SECURITIES
SECTION 2.1 PURCHASE AND SALE OF WARRANT. Upon and subject to
the other terms and conditions of this Agreement, the Company shall sell to
Buyer and Buyer shall purchase from the Company the Warrant for a purchase price
of $52,775,170.32 (the "Warrant Purchase Price"), which the parties agree is the
fair value of the Warrant.
SECTION 2.2. MANNER OF PAYMENT OF PURCHASE PRICE. At Closing,
Buyer shall pay the Warrant Purchase Price to the Company by wire transfer of
funds in accordance with wiring instructions provided by the Company to Buyer
prior to the Closing, against delivery of the duly authorized and executed
Warrant to Buyer.
SECTION 2.3. TERMS OF WARRANT. The Warrant shall be in the form
of and have the same terms as EXHIBIT 2.3 attached hereto.
SECTION 2.4. TERMS OF CLASS A STOCK. The Class A Stock shall
have the rights, preferences and terms set out in the Restated Articles.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce Buyer to enter into this Agreement and to purchase
the Warrant, the Company hereby makes all of the representations and warranties
to Buyer that the Company is making to Buyer in the Stock Agreement (the
"Company Representations and Warranties"). Unless otherwise specifically
provided herein or in the Stock Agreement, the Company Representations and
Warranties shall be true and correct in all respects as of the date hereof
subject to the provisions of the Stock Agreement regarding the expiration
thereof and changes expressly contemplated by the Stock Agreement. Certain
Company Representations and Warranties are qualified, as indicated in the Stock
Agreement, by information disclosed in the Disclosure Letter.
ARTICLE 4
COVENANTS
In order to induce Buyer to enter into this Agreement and to
purchase the Warrant, the Company agrees to abide by all Company covenants set
forth in SECTION 6.2.1 and SECTION 6.2.2 of the Stock Agreement and SECTION 5
and SECTION 6 of the New Credit
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Agreement. The Company further agrees to provide to the Holder all information
and reports that the Company is required to provide to BFI. In addition, the
Company agrees to the following:
SECTION 4.1. USE OF PROCEEDS. The proceeds received at Closing
from the sale of the Warrant to Buyer hereunder, together with other funds
available to the Company, shall be used by the Company:
4.1.1 To repay $53,460,163.19 of Chase Debt, which payment
shall retire the Chase Debt in full and shall also cause the
Chase Warrant to be cancelled without further charge to the
Company;
4.1.2 To repay $38,195,124.46 of the Conseco Debt; and
4.1.3 To redeem in full the Conseco Warrant for a redemption
price of $44,766,721.76.
SECTION 4.2 COOPERATION IN OBTAINING FCC APPROVAL OR OTHER
GOVERNMENTAL APPROVALS. At any time the Holder determines that it is desirable
to obtain FCC Approval and/or Other Governmental Approval with respect to the
exercise by Holder of any Holder Rights or any other rights Holder may have
pursuant to this Agreement, then the Company shall take any action which the
Holder may request to permit Holder to obtain such FCC Approval and/or Other
Governmental Approval. The Company agrees to cooperate fully with the Holder and
any assignee of all or part of the Warrant in the preparation, execution and
filing of any applications or other documents and providing any information that
may be necessary or helpful in obtaining FCC Approval and/or Other Governmental
Approval. The Company agrees to consent to any transfer of control to the Holder
of any FCC License upon the request of the Holder after a Triggering Event.
ARTICLE 5
BOARD OF DIRECTOR PROVISIONS
Provided that each director's election complies with the
Communications Act of 1934, as amended, and the rules and polices of the FCC in
effect at such time, then until such time as the Holder ceases to own the
Warrant or Class A Stock, the Company agrees as follows:
SECTION 5.1 COMPOSITION OF BOARD OF DIRECTORS. The Board of
Directors of the Company shall consist of seven (7) members who shall be elected
as follows:
5.1.1 Six (6) members of the Board of Directors shall be
elected by the holders of the Class B Stock, and two such
directors shall be independent
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directors whose independence is confirmed (at any election of
directors) by the Holder, which confirmation shall not be
unreasonably withheld.
5.1.2 One (1) member of the Board of Directors may, at the
option of the Holder, be elected by the Holder. The Holder
shall provide to the Corporation written notice of the Holder's
election to exercise its right to elect a director pursuant to
this Section 5.1.2 not less than 48 hours prior to the time the
election is scheduled to be held. If the Holder does not
exercise Holder's option to elect a director, then said
position shall remain vacant until filled by action of the
Holder. In the event of the death, resignation, or removal of
any director elected by the Holder, the Holder shall be
entitled to elect that director's successor. Notwithstanding
the foregoing, a director elected by the Holder shall be
excluded from presentations to, discussions by and decisions of
the Board of Directors of the Company involving proprietary
information relating to the operations of any of Company's
radio stations to the extent that the rules, policies,
conditions or orders of the FCC in effect at such time would
require the operation of such radio stations to be separate
from, in whole or in part, from radio stations in the same
market attributed to Holder. In the event there is more than
one Holder, and the Holders exercise their right to elect a
director pursuant to this Section 5.1.2, such director shall be
elected by a majority vote of such Holders, voting as a class.
SECTION 5.2 HOLDER REPRESENTATIVE. Whether or not the Holder
exercises the Holder's option to elect a director pursuant to SECTION 5.1
hereof, the Holder shall be entitled to appoint a representative who shall be
permitted to attend all meetings of the Board of Directors; provided, however,
such representative shall attend meetings of the Board of Directors as an
observer only, and shall have no right to vote on any matter that may come
before the Board of Directors for a vote. The Holder shall provide to the
Corporation written notice of the name and address of the Holder's
representative and shall be entitled to appoint a different representative at
any time by providing written notice to such effect to the Corporation. Such
representative shall be given the same notice of any meeting of the Board of
Directors as is required to be provided to a member of the Board of Directors.
Notwithstanding the foregoing, Holder's representative shall be excluded from
presentations to, discussions by and decisions of the Board of Directors of the
Company involving proprietary information relating to the operations of any of
Company's radio stations to the extent that the rules, policies, conditions or
orders of the FCC in effect at such time would require the operation of such
radio stations to be separate from, in whole or in part, from radio stations in
the same market attributed to Holder.
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ARTICLE 6
PREEMPTIVE RIGHTS OF BUYER
If any of the following actions may be taken by a Holder
without the requirement of FCC Approval and/or Other Governmental Approval, or
if such FCC Approval and/or Other Governmental Approval has been previously
obtained, until such time as Buyer and its transferees cease to own the Warrant
or Class A Stock or Class B Stock; upon any offer, sale or issuance for cash or
other property, indebtedness or any combination thereof, by the Company of New
Securities, then Holder shall have the first right to subscribe to and purchase
such New Securities at a price and on such other terms and conditions as are no
less favorable to Holder than those on which the New Securities will be offered,
sold or issued to other persons. Holder shall have the option to purchase up to
such portion of the New Securities as shall equal Holder's pro rata ownership of
the common stock of the Company (assuming for purposes of this calculation the
full exercise of the Warrant). The Company shall give written notice to Holder
of any and each opportunity for exercise of its rights under this ARTICLE 6,
setting forth the price of such New Securities and the number of such New
Securities that Holder is entitled to purchase. Such notice shall be delivered
to Holder at the address for the Holder then shown in the records of the
Company, and Holder may exercise its rights to purchase such New Securities by
written notice thereof delivered to the Company at its principal office not
later than 10 business days following the date on which notice of such rights
was received by Holder.
ARTICLE 7
INVESTMENT REPRESENTATIONS AND LEGENDS
SECTION 7.1. PURCHASE FOR INVESTMENT. Buyer represents and
warrants that the Warrant purchased by it pursuant to the terms and conditions
of this Agreement are being acquired by Buyer for investment, for Buyer's own
account, and not with a view to the distribution or resale thereof. Buyer
understands that the Warrant purchased may not be sold or transferred unless
subsequently registered under the Securities Act, and any applicable state
securities laws, or unless exemptions from registration under such laws are
available. Buyer represents and warrants that it is an Accredited Investor and
that the Company has made available to it the opportunity to ask questions and
receive answers concerning the Company, the Warrant and to otherwise conduct the
due diligence Buyer sought to conduct in connection with Buyer's investment
decision.
SECTION 7.2. TRANSFER LEGENDS AND RESTRICTIONS. Buyer
acknowledges that the Warrant and shares issuable upon exercise of the Warrant
shall be imprinted with a legend in substantially the following form (unless
otherwise permitted under this Agreement):
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THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED, OR ASSIGNED EXCEPT (I) PURSUANT TO REGISTRATIONS
THEREOF UNDER SUCH LAWS, OR (II) IF, IN THE OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY, THE PROPOSED TRANSFER MAY
BE EFFECTED WITHOUT SUCH REGISTRATIONS.
Upon the request of Holder, the Company shall remove any such legend from
certificates held by Holder, or shall issue to Holder new securities, which
shall be free of such transfer legend, provided that with such request, the
Company shall have received an opinion of counsel selected by Holder, which
opinion and counsel are reasonably satisfactory to the Company, to the effect
that no transfer by Holder of the Warrant and shares issuable upon exercise of
the Warrant will violate the Securities Act or applicable state securities laws.
SECTION 7.3. INTERCOMPANY TRANSFERS. SECTION 7.1 and SECTION
7.2 notwithstanding, the Buyer may freely transfer the Warrant, Class A Stock
and Class B Stock to an Affiliate of Buyer so long as such transferee is bound
by the provisions of this ARTICLE 7.
ARTICLE 8
CONDITIONS OF BUYER'S OBLIGATIONS
The obligations of Buyer under this Agreement are, at the
option of Buyer, subject to satisfaction prior to or at the Closing of all
conditions set forth in SECTION 9.2 of the Stock Agreement and in addition the
following conditions shall have been fulfilled:
SECTION 8.1. AMENDMENT OF CERTIFICATE OF INCORPORATION AND
BYLAWS. The Company shall have amended and restated its Certificate of
Incorporation as set forth in EXHIBIT 2.4 attached to this Agreement and shall
have amended and restated its Bylaws as set forth in EXHIBIT 8.1 attached to
this Agreement.
SECTION 8.2. EXECUTION OF REGISTRATION RIGHTS AGREEMENTS. The
Company shall have executed and delivered the Registration Rights Agreement.
ARTICLE 9
CLOSING
SECTION 9.1. CLOSING DATE. The closing of the purchase and sale
of the Warrant (the "Closing") shall take place at 9:00 a.m. on February 20,
1996 at the offices of Graydon, Head & Ritchey in Cincinnati, Ohio, or at such
other time and place as the parties shall agree.
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SECTION 9.2. DELIVERIES BY THE COMPANY. At or prior to the
Closing, all closing deliveries required by SECTION 10.2 of the Stock Agreement
shall have been delivered, and in addition, the Company shall deliver to Buyer
the following items:
9.2.1 The Warrant as specified in SECTIONS 2.1 of this
Agreement; and
9.2.2 The Registration Rights Agreement, duly executed by the
Company and its shareholders, as specified in SECTION 1.1.40 of
this Agreement.
ARTICLE 10
TRIGGERING EVENTS; GOVERNMENTAL APPROVALS
SECTION 10.1. TRIGGERING EVENTS. Any one or more of the
following events shall be considered a Triggering Event:
10.1.1 A Covenant Breach occurs which causes Damages that
exceed the portion of the Stock Purchase Price to be paid at
the Stock Closing (but only to the extent that such Damages
exceed $500,000); or
10.1.2 The Stock Closing shall have occurred; or
10.1.3 At the Stock Closing the Escrow Agent fails for any
reason to deliver to Buyer certificates representing all Class
B Stock of the Company and the Endorsements; or
10.1.4 The Trustee shall have failed to prepare and deliver to
the Escrow Agent substitute Endorsements as required pursuant
to the Stock Escrow and the Trust Agreement; or
10.1.5 (i) Company, (ii) any Subsidiary; and/or (iii) any Class
B Shareholder becomes insolvent or bankrupt, or admits in
writing its or his inability to pay its or his debts as they
mature, or makes an assignment for the benefit of creditors, or
applies for or consents to the appointment of a trustee or
receiver for all or a major part of its assets; or
10.1.6 bankruptcy, reorganization, arrangement, or insolvency
proceedings, or other proceedings for relief under any
bankruptcy or similar law or laws for the relief of debtors,
are instituted by or against the (i) Company, (ii) any
Subsidiary; and/or (iii) any Class B Shareholder, and if
instituted are consented to or are not dismissed within thirty
(30) days after such institution; or
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10.1.7 a trustee or receiver is appointed for the assets of (i)
Company, (ii) any Subsidiary; and/or (iii) any Class B
Shareholder, and such appointment is not dismissed within
thirty (30) days; or
10.1.8 the Company fails within thirty (30) days from the entry
thereof to discharge or have vacated or effectively stayed any
final judgment for the payment of money in excess of $150,000
which shall be rendered against it or any Subsidiary.
SECTION 10.2. GOVERNMENTAL APPROVALS.
10.2.1 FCC APPROVAL. Upon the occurrence of a Triggering Event,
the Holder may exercise Holder Rights; provided, however, the
Holder shall first obtain any necessary FCC Approval. Prior to
obtaining FCC Approval, the Holder will not take any action
pursuant to this Agreement or the Warrant which would
constitute or result in any transfer of control to the Holder
of any FCC License. The Holder shall be entitled to rely upon
the advice of FCC counsel of the Holder's choice with respect
determining whether any action taken by the Holder pursuant to
this Agreement would result in a transfer of control requiring
FCC Approval. To the extent the Holder obtains advice from FCC
counsel that any action proposed to be taken by the Holder
pursuant to this Agreement following the occurrence of a
Triggering Event does not require FCC Approval, the Holder may
immediately exercise Holder Rights.
10.2.2 OTHER GOVERNMENTAL APPROVAL. Upon the occurrence of a
Triggering Event, the Holder may exercise Holder Rights;
provided, however, the Holder shall first obtain any necessary
Other Governmental Approval. Prior to obtaining such Other
Governmental Approval, the Holder will not exercise Holder
Rights or any other rights Holder may have pursuant to this
Agreement which would cause a violation of law. To the extent
the Holder obtains advice from counsel that any action proposed
to be taken by the Holder pursuant to this Agreement following
the occurrence of a Triggering Event does not require Other
Governmental Approval, the Holder may immediately exercise
Holder Rights or any other rights Holder may have pursuant to
this Agreement.
SECTION 10.3. NOTICE. When any Triggering Event has occurred,
the Company shall immediately give written notice thereof to the Holder. The
Company shall also promptly notify Holder of any event which could reasonably
become a Triggering Event with the lapse of time or otherwise promptly after
obtaining knowledge thereof.
SECTION 10.4. SPECIFIC PERFORMANCE. The parties hereto declare
that it is impossible to measure in money the damages which will accrue to
Holder by reason of a
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breach or violation of any representation, warranty, agreement or covenant
contained in this Agreement. Therefore, Holder may institute any action or
proceeding to specifically enforce and cause the parties hereto to remedy a
breach of a provision of this Agreement and any party against whom such action
or proceeding is brought hereby waives the claim or defense therein that such
party has an adequate remedy at law. Furthermore, such party shall not urge in
any such action or proceeding the claim or defense that such remedy at law
exists.
SECTION 10.5. CUMULATIVE REMEDIES AND SURVIVAL. The remedies
specified in this Agreement shall not be exclusive of any other remedy, and
shall be cumulative and in addition to every other remedy now or hereafter
existing at law or in equity or by statute or otherwise which may be available
to Holder.
ARTICLE 11
CLASS B SHAREHOLDERS
SECTION 11.1. COVENANTS OF CLASS B SHAREHOLDERS. The Class B
Shareholders covenant and agree to take all necessary actions to cause the
Company to fulfill its covenants and agreements contained in this Agreement.
ARTICLE 12
MISCELLANEOUS
SECTION 12.1. POST-CLOSING ACTIONS. If at any time, and from
time to time, after the Closing any party reasonably determines that any further
conveyance, assignment or other document or any further action is necessary or
desirable to carry out the purposes of and to make effective the transactions
contemplated by this Agreement, the parties agree to execute and deliver all
such instruments and take all such actions as may be reasonably necessary or
advisable for such purpose.
SECTION 12.2. ENTIRE AGREEMENT; AMENDMENT. This Agreement
contains the entire agreement among the parties hereto and supersedes all prior
oral or written agreements, promises, representations, commitments or
understandings with respect to the matters provided for herein. This Agreement
may be modified or amended only by a writing duly executed by Buyer and the
Company which modification or amendment shall be binding upon all of the parties
hereto.
SECTION 12.3. CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS.
Unless the context otherwise requires: (A) all references to Sections, Articles,
Schedules or Exhibits are to Sections, Articles, Schedules or Exhibits of or to
this Agreement; (B) each term defined in this Agreement has the meaning assigned
to it; (C) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with
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generally accepted accounting principles as in effect on the date hereof; (D)
"or" is disjunctive but not necessarily exclusive; (E) words in the singular
include the plural and vice versa; and (F) all references to "$" or dollar
amounts will be to lawful currency of the United states of America.
SECTION 12.4. NO INTENDED THIRD PARTY BENEFICIARIES. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or entity other than the parties hereto and their successors
or permitted assigns, any rights or remedies under or by reason of this
Agreement.
SECTION 12.5. ASSIGNMENT AND BINDING EFFECT. This Agreement and
the rights and obligations of the Company hereunder may not be assigned by the
Company without the prior written consent of Buyer. Buyer shall have the right
to assign all or any portion of its rights and obligations under this Agreement.
All covenants, agreements, statements, representations, warranties and
indemnities in this Agreement by and on behalf of any of the parties hereto
shall bind and inure to the benefit of their respective successors and permitted
assigns of the parties hereto.
SECTION 12.6. WAIVERS. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a continuing waiver, and no
waiver shall be binding unless executed in writing by the party making the
waiver.
SECTION 12.7. NOTICES. All notices, demands or other
communications which may be or are required to be given by any party to any
other party pursuant to this Agreement, shall be in writing and shall be mailed
by certified mail, return receipt requested, postage prepaid, or transmitted by
hand delivery, national overnight express, telegram or facsimile transmission,
addressed as follows:
SECTION 12.8 If to Buyer:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Randy Michaels
Fax: (513) 621-6087
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with a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Fax: (513) 651-3836
SECTION 12.9 If to the Company:
4841 Pacific Highway
San Diego, California 92110
Attention: John T. Lynch
Frank A. De Francesco
Fax: (619) 294-9393
with a copy (which shall not constitute notice) to:
Gray, Cary Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101
Attention: J. Terrence O'Malley, Esq.
Fax: (619) 236-1048
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or telefax
transmission log being deemed conclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
SECTION 12.10. HEADINGS. The article and section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 12.11. SEVERABILITY. Wherever possible, each provision
of this Agreement will be interpreted so as to be effective and valid under
applicable law, but if any provision of this Agreement is prohibited by or
invalid under such law, such provision will be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
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SECTION 12.12. GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State of Ohio (but not
including the choice-of-laws rules thereof).
SECTION 12.13. COUNTERPARTS; EXECUTION. This Agreement may be
executed in as many counterparts as may be required, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but a single agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused this Agreement to be executed on its behalf, as of the
date first above written.
JACOR COMMUNICATIONS, INC.
By:___________________________
Its:__________________________
NOBLE BROADCASTING GROUP, INC.
By:___________________________
Its:__________________________
______________________________
JOHN T. LYNCH
______________________________
FRANK A. DE FRANCESCO
______________________________
THOMAS R. JIMENEZ
______________________________
WILLIAM R. ARBENZ
[Signature Page for Investment Agreement]
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THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND MAY NOT
BE TRANSFERRED IN VIOLATION OF SUCH ACT OR LAWS, THE RULES AND
REGULATIONS THEREUNDER OR THE PROVISIONS OF THIS WARRANT.
WARRANT
TO PURCHASE CLASS A COMMON STOCK OF
NOBLE BROADCAST GROUP, INC.
THIS IS TO CERTIFY THAT JACOR COMMUNICATION, INC. or registered
assigns, is entitled, at any time after the occurrence of a Triggering Event and
prior to the Expiration Date (as hereinafter defined), to purchase from NOBLE
BROADCAST GROUP, INC. a Delaware corporation (the "Company"), such number of
shares of Class A Common Stock as shall equal the Warrant Amount in whole or in
part, at the Current Warrant Price (or a pro rata share thereof if this Warrant
is exercised for less than the full Warrant Amount), all on the terms and
conditions and pursuant to the provisions hereinafter set forth.
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used in this Warrant, the following
terms have the respective meanings set forth below:
1.1.1 "APPLICABLE PERCENTAGE" means seventy-nine and one-tenth
percent (79.1%).
1.1.2 "BFI" means Broadcast Finance, Inc., an Ohio corporation.
1.1.3 "BUSINESS DAY" means any day that is not a Saturday or
Sunday or a day on which banks are required or permitted to be
closed in the State of Ohio.
1.1.4 "CLASS A STOCK" means the shares of Common Stock of the
Company designated as Class A under its Restated Certificate of
Incorporation.
1.1.5 "CLASS B STOCK" means the shares of Common Stock of the
Company designated as Class B under its Restated Certificate of
Incorporation.
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1.1.6 "CLOSING DATE" shall have the meaning set forth in the
Investment Agreement.
1.1.7 "COMMISSION" means the Securities and Exchange Commission
or any other federal agency then administering the Securities
Act and other federal securities laws.
1.1.8 "COMMON STOCK" means (except where the context otherwise
indicated) the Class A Stock and Class B Stock, no par value,
of the Company as constituted on the Closing Date, and any
capital stock into which such Common Stock may thereafter be
changed, and shall also include (i) capital stock of the
Company of any other class (regardless of how denominated)
issued to the holders of shares of Common Stock which is not
preferred as to dividends or assets over any other class of
stock of the Company and which is not subject to redemption and
(ii) shares of common stock of any successor or acquiring
corporation (as defined in SECTION 4.2) received by or
distributed to the holders of Common Stock of the Company in
the circumstances contemplated by SECTION 4.2.
1.1.9 "CURRENT WARRANT PRICE" means $1.00 in the aggregate.
1.1.10 "EXCHANGE ACT" means the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules
and regulations of the Commission thereunder, all as the same
shall be in effect from time to time.
1.1.11 "EXERCISE PERIOD" means the period during which this
Warrant is exercisable pursuant to SECTION 2.1.
1.1.12 "EXPIRATION DATE" means the twentieth anniversary of the
Closing Date.
1.1.13 "FULLY DILUTED OUTSTANDING" means, when used with
reference to Common Stock, at any date as of which the number
of shares thereof is to be determined, all shares of Common
Stock Outstanding at such date and all shares of Common Stock
issuable in respect of options or warrants to purchase, or
securities convertible into, shares of Common Stock outstanding
on such date but not including shares issuable under
outstanding Warrants issued pursuant to the Investment
Agreement.
1.1.14 "GAAP" means generally accepted accounting principles in
the United States of America as from time to time in effect.
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1.1.15 "HOLDER" means the Person or Persons in whose name the
Warrant set forth herein is properly registered on the books of
the Company maintained for such purposes.
1.1.16 "INVESTMENT AGREEMENT" means the Investment Agreement of
even date herewith, by and between the Company and Jacor, or
any successor agreement between such parties.
1.1.17 "JACOR" means Jacor Communications, Inc., an Ohio
corporation and its designees.
1.1.18 "NEW CREDIT AGREEMENT" means the Credit Agreement
between BFI and the Company, pursuant to which the Company
shall have obtained a secured loan facility from BFI.
1.1.19 "OTHER PROPERTY" shall have the meaning set forth in
SECTION 4.2.
1.1.20 "OUTSTANDING" means, when used with reference to Common
Stock, at any date as of which the number of shares thereof is
to be determined, all issued shares of Common Stock, except
shares then owned or held by or for the account of the Company
or any Subsidiary, and shall include all shares issuable in
respect of outstanding scrip or any certificates representing
fractional interests in shares of Common Stock.
1.1.21 "PERSON" means any individual, sole proprietorship,
partnership, joint venture, trust, incorporated organization,
association, corporation, institution, public benefit
corporation, entity or government (whether federal, state,
county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or
department thereof).
1.1.22 "REGISTRATION RIGHTS AGREEMENT" means the Registration
Rights Agreement between the Company and Jacor of even date
herewith.
1.1.23 "REGISTRATION STATEMENT" means any registration
statement, prospectus or written communication (other than
transmittal letters) made pursuant to the Securities Act.
1.1.24 "RESTRICTED COMMON STOCK" means shares of Class A Stock
which are, or which upon their issuance on the exercise of this
Warrant would be, evidenced by a certificate bearing the
restrictive legend set forth in SECTION 9.1.1.
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1.1.25 "SECURITIES ACT" means the Securities Act of 1933, as
amended, or any similar federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall
be in effect at the time.
1.1.26 "SUBSIDIARY" means any corporation, association,
partnership, joint venture or other business entity of which
the Company and/or any Subsidiary of the Company either (a) in
respect of a corporation, owns or controls, directly or
indirectly, fifty percent (50%) or more of the outstanding
stock having ordinary voting power to elect a majority of the
board of directors or similar managing body, irrespective of
whether or not a class or classes shall or might have voting
power by reason of the happening of any contingency, or (b) in
respect of an association, partnership, joint venture or other
business entity, is entitled to share in more than fifty
percent (50%) of the profits and losses, however determined.
1.1.27 "TRANSFER" means any disposition of any Warrant or
Warrant Stock or of any interest in either thereof, which would
constitute a sale thereof within the meaning of the Securities
Act.
1.1.28 "TRANSFER NOTICE" shall have the meaning set forth in
SECTION 9.2.
1.1.29 "TRIGGERING EVENT" has the meaning ascribed to it in
[SECTION 10.1] of the Investment Agreement.
1.1.30 "WARRANT" means this Warrant and all warrants issued
upon transfer, division or combination thereof, or in
substitution therefor. All Warrants shall at all times be
identical as to terms and conditions and date, except as to the
number of shares of Class A Stock for which they may be
exercised.
1.1.31 "WARRANT AMOUNT" means an amount of Class A Stock
determined at the time of exercise of the Warrant by dividing
the then Fully Diluted Outstanding by the percentage obtained
by subtracting the then Applicable Percentage from 100%, and
multiplying the result by the then Applicable Percentage.
1.1.32 "WARRANT PRICE" means $1.00 in the aggregate.
1.1.33 "WARRANT STOCK" means the shares of Class A Stock
purchasable by the Holder of the Warrant upon the exercise
thereof.
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ARTICLE 2
EXERCISE OF WARRANT
2.1 MANNER OF EXERCISE. At any time after the occurrence of a
Triggering Event, and until 5:00 p.m., Cincinnati, Ohio time, on the Expiration
Date, Holder may exercise this Warrant from time to time, on any Business Day,
for all or any part of the number of shares of Class A Stock purchasable
hereunder.
In order to exercise this Warrant, in whole or in part, Holder
shall deliver to the Company at its principal office at 4891 Pacific Highway,
San Diego, California 92110 or at the office or agency designated by the Company
pursuant to ARTICLE 12, (i) a written notice of Holder's election to exercise
this Warrant, which notice shall specify the number of shares of Common Stock to
be purchased, (ii) payment of the Warrant Price and (ii) this Warrant. Such
notice shall be substantially in the form of the subscription form appearing at
the end of this Warrant as Exhibit A, duly executed by Holder or its agent or
attorney. Upon receipt thereof and subject to compliance with ARTICLE 7 hereof,
the Company shall, as promptly as practicable, and in any event within five (5)
Business Days thereafter, execute or cause to be executed and deliver or cause
to be delivered to Holder a certificate or certificates representing the
aggregate number of full shares of Common Stock issuable upon such exercise, and
at the option of the Company cash in lieu of any fraction of a share, as
hereinafter provided. The stock certificate or certificates so delivered shall
be, to the extent possible, in such denomination or denominations as such Holder
shall request in the notice and shall be registered in the name of Holder or,
subject to ARTICLE 9, such other name as shall be designated in the notice. This
Warrant shall be deemed to have been exercised and such certificate or
certificates shall be deemed to have been issued, and Holder or any other Person
so designated to be named therein shall be deemed to have become a holder of
record of such shares for all purposes, as of the date the notice, together with
the cash or check or checks and this Warrant, is received by the Company as
described above and all taxes required to be paid by Holder, if any, pursuant to
SECTION 2.2 prior to the issuance of such shares have been paid. If this Warrant
shall have been exercised in part, the Company shall, at the time of delivery of
the certificate or certificates representing Warrant Stock deliver to Holder a
new Warrant evidencing the rights of Holder to purchase the unpurchased shares
of Class A Stock called for by this Warrant, which new Warrant shall in all
other respects be identical with this Warrant, or, at the request of Holder,
appropriate notation may be made on this Warrant and the same returned to
Holder. Notwithstanding any provision herein to the contrary, the Company shall
not be required to register shares in the name of any Person who acquired this
Warrant (or part hereof) or any Warrant Stock otherwise than in accordance with
this Warrant.
2.2. PAYMENT OF TAXES. All shares of Class A Stock issuable
upon the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable. The Company shall pay all expenses in
connection with, and all taxes and
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other governments charges that may be imposed with respect to, the issue or
delivery thereof, unless such tax or charge is imposed by law upon Holder, in
which case such taxes or charges shall be paid by Holder. The Company shall not
be required, however, to pay any tax or other charge imposed in connection with
any transfer involved in the issue of any certificate for shares of Class A
Stock issuable upon exercise of this Warrant in any name other than that of
Holder, and in such case the Company shall not be required to issue or deliver
any stock certificate until such tax or other charge has been paid or it has
been established to the satisfaction of the Company that no such tax or other
charge is due.
2.3. FRACTIONAL SHARES. The Company shall not be required to
issue a fractional share of Class A Stock upon exercise of any Warrant. As to
any fraction of a share which the Holder of a Warrant, the rights under which
are exercised in the same transaction, would otherwise be entitled to purchase
upon such exercise, the Company may at its option make a cash payment in respect
of such final fraction in an amount equal to the same fraction of the fair
market value per share of Class A Stock on the date of exercise.
2.4. CONTINUED VALIDITY. A holder of shares of Class A Stock
issued upon the exercise of this Warrant, in whole or in part (other than a
holder who acquires such shares after the same have been publicly sold pursuant
to a Registration Statement under the Securities Act or sold pursuant to Rule
144 thereunder), shall continue to be entitled with respect to such shares to
all rights to which it would have been entitled as Holder under ARTICLE 9,
ARTICLE 10 and ARTICLE 12 of this Warrant. The Company will, at the time of each
exercise of this Warrant, in whole or in part, upon the request of the holder of
the shares of Class A Stock issued upon such exercise hereof, acknowledge in
writing, in form reasonably satisfactory to such Holder, its continuing,
obligation to afford to such Holder all such rights; provided, however, that if
such Holder shall fail to make any such request, such failure shall not affect
the continuing obligation of the Company to afford to such Holder all such
rights.
ARTICLE 3
TRANSFER, DIVISION AND COMBINATION
3.1. TRANSFER. Subject to compliance with ARTICLE 9, transfer
of this Warrant and all rights hereunder, in whole or in part, shall be
registered on the books of the Company to be maintained for such purpose, upon
surrender of this Warrant at the principal office of the Company referred to in
SECTION 2.1 or the office or agency designated by the Company pursuant to
ARTICLE 12, together with a written assignment of this Warrant in a form
acceptable to Company duly executed by Holder or its agent or attorney and funds
sufficient to pay any transfer taxes payable upon the making of such transfer.
Upon such surrender and, if required, such payment, the Company shall, subject
to ARTICLE 9, execute and deliver a new Warrant or Warrants in the name of the
assignee
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or assignees and in the denomination specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be cancelled. A
Warrant, if properly assigned in compliance with ARTICLE 9, may be exercised by
a new Holder for the purchase of shares of Class A Stock without having a new
Warrant issued.
3.2. DIVISION AND COMBINATION. Subject to SECTION 9, this
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with SECTION
3.1 and with ARTICLE 9, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
3.3. EXPENSES. The Company shall prepare, issue and deliver at
its own expense (other than transfer taxes) the new Warrant or Warrants under
this ARTICLE [3].
3.4. MAINTENANCE OF BOOKS. The Company agrees to maintain, at
its aforesaid office or agency, books for the registration and the registration
of transfer of the Warrants.
ARTICLE 4
ADJUSTMENTS
4.1. RESTRICTIONS ON DISTRIBUTIONS AND RECLASSIFICATIONS. For
so long as this Warrant shall remain outstanding, the Company shall not
authorize any dividend or other distribution to holders of Common Stock.
including, but not limited to, any dividend or other distribution to holders of
Common Stock of:
(a) cash,
(b) any evidences of its indebtedness, any shares of its stock
or any other securities or property of any nature whatsoever (other than cash),
or
(c) any warrants or other rights to subscribe for or purchase
any evidences of its indebtedness, any shares of its stock or any other
securities or property of any nature whatsoever (other than cash).
For so long as this Warrant shall remain outstanding, the
Company shall not reclassify the Class A Stock (other than a change in par
value, or from par value to no par value or from no par value to par value) into
shares of any other class of stock.
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4.2. REORGANIZATION, RECLASSIFICATION, MERGER, CONSOLIDATION OR
DISPOSITION OF ASSETS. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Class A Stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation
("Other Property"), are to be received by or distributed to the holders of Class
A Stock of the Company, then each Holder shall have the right thereafter to
receive, upon exercise of such Holder's Warrant, the number of shares of common
stock of the successor or acquiring corporation or of the Company, if it is the
surviving, corporation, and Other Property receivable upon or as a result of
such reorganization, reclassification, merger, consolidation or disposition of
assets by a holder of the number of shares of Class A Stock for which this
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of the
Board of Directors of the Company) in order to provide for adjustments of shares
of the Class A Stock for which this Warrant is exercisable which shall be as
nearly equivalent as practicable to the adjustments provided for in this ARTICLE
4. For purposes of this SECTION 4.2, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this SECTION 4.2 shall similarly apply to successive
reorganizations, reclassification, mergers, consolidations or disposition of
assets.
ARTICLE 5
NOTICES TO WARRANT HOLDERS
5.1. NOTICE OF ADJUSTMENTS. Whenever an adjustment is required
under ARTICLE 4, the Company shall forthwith prepare a certificate to be
executed by the chief financial officer of the Company setting forth, in
reasonable detail, the event requiring the adjustment and the method by which
such adjustment was calculated specifying the number of shares of Common Stock
for which this Warrant is exercisable and (if such adjustment was made pursuant
to SECTION 4.2) describing the number and kind of any other shares of stock or
Other Property for which this Warrant is exercisable, and any change in the
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Current Warrant Price, after giving effect to such adjustment or change. The
Company shall promptly cause a signed copy of such certificate to be delivered
to each Holder in accordance with SECTION 14.2. The Company shall keep at its
office or agency designated pursuant to ARTICLE 12 copies of all such
certificates and cause the same to be available for inspection at said
office during normal business hours by any Holder or any prospective purchaser
of a Warrant designated by a Holder thereof.
5.2. NOTICE OF CERTAIN CORPORATE ACTION. Subject to compliance
with the policies and regulations of the Federal Communications Commission, the
Company shall provide to the Holder all notice of corporate action as the
Company is require to provide to a holder of Class A Stock.
ARTICLE 6
NO IMPAIRMENT
The Company shall not, directly or indirectly (through a
subsidiary), by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder against impairment.
Without limiting the generality of the foregoing, the Company will (a) not
increase the par value of any shares of Class A Stock receivable upon the
exercise of this Warrant above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (b) take all such action as may
be necessary or appropriate in order that the Company may validly and legally
issue fully paid and nonassessable shares of Class A Stock upon the exercise of
this Warrant, and (c) use its best efforts to obtain all such authorizations,
exemptions or consents from any public regulatory body having jurisdiction
thereof as may be necessary to enable the Company to perform its obligations
under this Warrant.
Upon the request of Holder, the Company will at any time during
the period this Warrant is outstanding acknowledge in writing, in form
satisfactory to Holder, the continuing validity of this Warrant and the
obligations of the Company hereunder.
ARTICLE 7
RESERVATION AND AUTHORIZATION OF COMMON STOCK:
REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY
From and after the Closing Date, the Company shall at all times
reserve and keep available for issuance upon the exercise of Warrants such
number of its authorized but
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unissued shares of Class A Stock as would be sufficient at such time to permit
the exercise in full of all outstanding Warrants. All shares of Class A Stock
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of such Warrant, shall be duly and validly
issued and fully paid and nonassessable, and their issuance shall not trigger
preemptive rights of others.
The Company shall take any corporate action necessary to reduce
or eliminate the then par value, if any, of the shares of Class A Stock issuable
upon exercise of the Warrants which may be necessary in order that the Company
may validly and legally issue fully paid and nonassessable shares of such Common
Stock at the Current Warrant Price.
If any shares of Class A Stock required to be reserved for
issuance upon exercise of Warrants require registration or qualification with
any governmental authority under any federal or state law (otherwise than as
provided in ARTICLE 9) before such shares may be so issued, the Company will in
good faith and as expeditiously as possible and at its expense endeavor to cause
such shares to be duly registered.
Issuance of Class A Stock upon exercise of this Warrant shall
be subject to obtaining any necessary approvals from the Federal Communications
Commission and any necessary approvals required under the Hart-Scott-Rodino Act.
If such approvals are required, the Company shall cooperate with and assist the
Holder in obtaining such approvals as expeditiously as possible.
ARTICLE 8
TAKING OF RECORD: STOCK AND WARRANT TRANSFER BOOKS; VOTING
8.1. RECORD DATE, TRANSFER RECORDS. In the case of all
dividends or other distributions by the Company to the holders of its Class A
Stock with respect to which any provision of ARTICLE 4 applies, the Company will
in each such case take such a record and will take such record as of the close
of business on a Business Day. The Company will not at any time, except upon
dissolution, liquidation or winding up of the Company, close its stock transfer
books or Warrant transfer books so as to result in preventing or delaying the
exercise or transfer of any Warrant.
8.2. VOTING. Until the Holder has exercised this Warrant to
acquire Class A Stock, then the Holder of this Warrant shall not be entitled to
vote upon any matters submitted to a vote of holders of Class A Stock.
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ARTICLE 9
RESTRICTIONS ON TRANSFERABILITY
The Warrant and the Warrant Stock shall not be transferred,
hypothecated or assigned before satisfaction of the conditions specified in this
ARTICLE [9], which conditions are intended to ensure compliance with the
provisions of the Securities Act with respect to the Transfer of any Warrant or
any Warrant Stock. Holder, by acceptance of this Warrant, agrees to be bound by
the provisions of this ARTICLE [9].
9.1. RESTRICTIVE LEGEND.
9.1.1 Except as otherwise provided in this ARTICLE [9], each
certificate for Warrant Stock initially issued upon the
exercise of this Warrant, and each certificate for Warrant
Stock issued to any subsequent transferee of any such
certificate, shall be stamped or otherwise imprinted with a
legend in substantially the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION AND ARE
SUBJECT TO THE CONDITIONS SPECIFIED IN A CERTAIN WARRANT DATED
AS OF FEBRUARY 20, 1996, ORIGINALLY ISSUED BY NOBLE BROADCAST
GROUP, INC. NO TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE VALID OR EFFECTIVE UNTIL SUCH CONDITIONS
HAVE BEEN FULFILLED. A COPY OF THE FORM OF SAID WARRANT IS ON
FILE WITH THE SECRETARY OF NOBLE BROADCAST GROUP, INC. THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE OF THIS CERTIFICATE,
AGREES TO BE BOUND BY THE PROVISIONS OF SUCH WARRANT."
9.1.2 Except as otherwise provided in this ARTICLE 9, each
Warrant shall be stamped or otherwise imprinted with a legend
in substantially the following form:
"THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE HEREOF HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION AND MAY NOT BE TRANSFERRED IN VIOLATION OF SUCH
ACT OR LAWS, THE RULES AND REGULATIONS THEREUNDER OR THE
PROVISIONS OF THIS WARRANT."
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9.2. NOTICE OF PROMISED TRANSFERS: REQUEST FOR REGISTRATION.
Prior to any Transfer or attempted Transfer of any Warrant or any shares of
Restricted Common Stock, the Holder of such Warrant or Restricted Common Stock
shall give five days' prior written notice (a "Transfer Notice") to the Company
of such Holder's intention to effect such Transfer, describing the manner and
circumstances of the proposed Transfer, and obtain from counsel to such Holder
who shall be reasonably satisfactory to the Company, an opinion reasonably
satisfactory to the Company that the proposed Transfer of such Warrants or such
Restricted Common Stock may be effected without registration under the
Securities Act or the securities laws of any state or other jurisdiction. After
receipt of the Transfer Notice and opinion, the Company shall, within five days
thereof, acknowledge receipt of such Transfer Notice to the Holder of such
Warrant or such Restricted Common Stock and such Holder shall thereupon be
entitled to Transfer such Warrants or such Restricted Common Stock, in
accordance with the terms of the Transfer Notice. Each certificate, if any,
evidencing such shares of Restricted Common Stock issued upon such Transfer
shall bear the restrictive legend set forth in SECTION 9.1.1, and each Warrant
issued upon such Transfer shall bear the restrictive legend set forth in SECTION
9.1.2, unless in the opinion of such counsel such legend is not required in
order to ensure compliance with the Securities Act. The Holder of the Warrants
or the Restricted Common Stock, as the case may be, giving the Transfer Notice
shall not be entitled to transfer such Warrants or such Restricted Common Stock
until receipt of notice from the Company under this SECTION 9.2 unless the
Company is withholding such notice in bad faith.
The foregoing notwithstanding the Holder shall be free to
transfer the Warrant or shares of Restricted Common Stock freely among its
parent, subsidiary and sister corporations so long as the transferee
acknowledges the application of this ARTICLE 9 to subsequent transfers.
The Holders of Warrants and Warrant Stock shall have the right
to request registration of such Warrant Stock pursuant to the Registration
Rights Agreement.
9.3. TERMINATION OF RESTRICTIONS. Notwithstanding, the
foregoing provisions of ARTICLE 9, the restrictions imposed by this Section upon
the transferability of the Warrants, the Warrant Stock and the Restricted Common
Stock and the legend requirements of SECTION 9.1 shall terminate as to any
particular Warrant or share of Warrant Stock or Restricted Common Stock (or
Common Stock issuable upon the exercise of the Warrants) (i) when and so long as
such security shall have been effectively registered under the Securities Act
and disposed of pursuant thereto or (ii) when the Company shall have received an
opinion of counsel reasonably satisfactory to it that such shares may be
transferred without registration thereof under the Securities Act. Whenever the
restrictions imposed by ARTICLE [9] shall terminate as to this Warrant, as
hereinabove provided, the Holder hereof shall be entitled to receive from the
Company, at the expense of the Company, a new Warrant bearing the following,
legend in place of the restrictive legend set forth hereon:
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"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT
CONTAINED IN ARTICLE 9 HEREOF TERMINATED ON 19_, AND ARE OF NO
FURTHER FORCE AND EFFECT."
All Warrants issued upon registration of transfer, division or
combination of, or in substitution for, any Warrant or Warrants entitled to bear
such legend shall have a similar legend endorsed therein. Wherever the
restrictions imposed by this SECTION 9.3 shall terminate as to any share of
Restricted Common Stock, as hereinabove provided, the holder thereof shall be
entitled to receive from the Company, at the Company's expense, a new
certificate representing such Common Stock not bearing the restrictive legend
set forth in SECTION 9.1.1.
9.4. LISTING ON SECURITIES EXCHANGE. If the Company shall list
any shares of Common Stock on any securities exchange, it will, at its expense,
list thereon, maintain and, when necessary, increase such listing of, all shares
of Common Stock issued or, to the extent permissible under the applicable
securities exchange rules, issuable upon the exercise of this Warrant so long as
any shares of Common Stock shall be so listed during the Exercise Period.
ARTICLE 10
SUPPLYING INFORMATION
The Company shall cooperate with each Holder of a Warrant and
each holder of Restricted Common Stock in supplying such information as may be
reasonably necessary for such Holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Warrant or Restricted Common Stock.
ARTICLE 11
LOSS OR MUTILATION
Upon receipt by the Company from Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant and indemnity reasonably satisfactory to it (it being
understood that the written agreement of Holder shall be sufficient indemnity)
and in case of mutilation upon surrender and cancellation hereof, the Company
will execute and deliver in lieu hereof a new Warrant of like tenor to Holder;
provided, in the case of mutilation, no indemnity shall be required if this
Warrant in identifiable form is surrendered to the Company for cancellation.
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ARTICLE 12
OFFICE OF THE COMPANY
As long as any Warrant remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where a Warrant may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.
ARTICLE 13
FINANCIAL AND BUSINESS INFORMATION
12.1. QUARTERLY INFORMATION. The Company will deliver to each
Holder, as soon as practicable after the end of each fiscal quarter of the
Company, and in any event within 45 days thereafter, one copy of an unaudited
consolidated balance sheet of the Company and each Subsidiary as at the close of
such quarter, and the related unaudited consolidated statements of income and
cash flow position of the Company for such quarter and, in the case of the
second, third and fourth quarters, for the portion of the fiscal year ending
with such quarter, setting forth in each case in comparative form the figures
for the corresponding periods in the previous fiscal year. Such financial
statements shall be prepared by the Company in accordance with GAAP and
accompanied by the certification of the Company's chief executive officer and
chief financial officer that such financial statements are complete and correct
and present fairly the consolidated financial position, results of operations
and cash flow position of the Company and its subsidiaries as at the end of such
quarter and for such year-to-date period, as the case may be.
12.2. ANNUAL INFORMATION. The Company will deliver to each
Holder as soon as practicable after the end of each fiscal year of the Company,
and in any event within 90 days thereafter, one copy of:
12.2.1 an audited consolidated balance sheet of the Company and
each Subsidiary as at the end of such year, and
12.2.2 audited consolidated statements of income, retained
earnings and forth in cash flow position of the Company and
each Subsidiary for such year; setting forth in each case in
comparative form the figures for the corresponding periods in
the previous fiscal year; all prepared in accordance with GAAP,
and which audited financial statements shall be accompanied by
(i) an opinion thereon of the independent certified public
accountants regularly retained by the Company, or any other
firm of independent certified public accountants of recognized
national standing selected by the Company and (ii) a report of
such independent certified public accountants confirming any
adjustment made pursuant to ARTICLE 4 during such year.
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<PAGE> 15
12.3. FILINGS. Upon registration of the Common Stock with the
Commission, the Company will file on or before the required date all regular or
periodic reports (pursuant to the Exchange Act) with the Commission and will
deliver to Holder promptly upon their becoming available one copy of each
report, notice or proxy statement sent by the Company to its stockholders
generally, and of each regular or periodic report (pursuant to the Exchange Act)
and any Registration Statement filed by the Company with (i) the Commission or
(ii) any securities exchange on which shares of Common Stock are listed.
ARTICLE 13
LIMITATION OF LIABILITY
No provision hereof, in the absence of affirmative action by
Holder to purchase shares of Class A Stock, and no enumeration herein of the
rights or privileges of Holder hereof, shall give rise to any liability of such
Holder for the purchase price of any Class A Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.
ARTICLE 14
MISCELLANEOUS
14.1. NONWAIVER AND EXPENSES. No course of dealing or any delay
or failure to exercise any right hereunder on the part of Holder shall operate
as a waiver of such right or otherwise prejudice Holder's rights, powers or
remedies. If the Company fails to make, when due, any payments provided for
hereunder, or fails to comply with any other provision of this Warrant, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.
14.2. NOTICE GENERALLY. Any notice, demand, request, consent,
approval, declaration, delivery or other communication hereunder to be made
pursuant to the provisions of this Warrant shall be sufficiently given or made
if in writing and either delivered in person with receipt acknowledged or sent
by registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
14.2.1 If to Holder or any holder of Warrant Stock, at its last
known address appearing on the books of the Company maintained
for such purpose.
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<PAGE> 16
The current address of Holder is c/o:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Randy Michaels
Fax: (513) 621-6087
with a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Fax: (513) 651-3836
14.2.2 If to the Company at:
4891 Pacific Highway
San Diego, California 92110
Attention: John T. Lynch
Copy To: Frank A. DeFrancesco
Fax: (619) 294-9393
or at such other address as may be substituted by notice given as herein
provided. Each notice or other communication which shall be mailed, delivered or
transmitted in the manner described above shall be deemed sufficiently given and
received for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, or the affidavit of messenger or
telefax transmission log being deemed conclusive evidence of such delivery) or
at such time as delivery is refused by the addressee upon presentation.
14.3. REMEDIES. Each Holder of a Warrant and Warrant Stock, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entities to specific performance of its rights
under ARTICLE [9] of this Warrant. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of ARTICLE [9] of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.
14.4. SUCCESSORS AND ASSIGNS. Subject to the provisions of
SECTION 3.1 and ARTICLE 9, this Warrant and the rights evidenced hereby shall
inure to the benefit of and be
16
<PAGE> 17
binding upon the successors of the Company and the successors and assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant, and shall be enforceable by any such
Holder.
14.5. AMENDMENT. This Warrant and all other Warrants may be
modified or amended or the provisions hereof waived with the written consent of
the Company and the Holder, provided that no such Warrant may be modified or
amended to reduce the number of shares of Class A Stock for which such Warrant
is exercisable or to increase the price at which such shares may be purchased
upon exercise of such Warrant (before giving effect to any adjustment as
provided therein) without the prior written consent of the Holder thereof.
14.6. SEVERABILITY. Wherever possible, each provision of this
Warrant shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Warrant.
14.7. HEADINGS. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.
14.8. GOVERNING LAW. This Warrant shall be governed by the laws
of the State of Delaware, without regard to the provisions thereof relating to
conflict of laws.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
17
<PAGE> 18
IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed and its corporate seal to be impressed hereon and attested by its
Secretary or an Assistant Secretary.
Dated: February 20, 1996
NOBLE BROADCAST GROUP, INC.
By:_________________________
Printed: ___________________
Title:______________________
Attest:
By:_________________________
Printed: ___________________
Title:_____________________
18
<PAGE> 19
EXHIBIT A
SUBSCRIPTION FORM
[TO BE EXECUTED ONLY UPON EXERCISE OF WARRANT]
The undersigned registered owner of this Warrant irrevocably
exercises this Warrant for the purchase of ___ Shares of Common Stock of Noble
Broadcast Group, Inc. and herewith makes payment therefor, all at the price and
on the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to _______________________ whose address is
______________________________ and, if such shares of Common Stock shall not
include all of the shares of Common Stock issuable as provided in this Warrant,
that a new Warrant of like tenor and date for the balance of the shares of
Common Stock issuable hereunder be delivered to the undersigned.
------------------------------------
(Name of Registered Owner)
------------------------------------
(Signature of Registered Owner)
------------------------------------
(Street Address)
------------------------------------
(City) (State) (Zip Code)
NOTICE: The signature on this subscription must correspond with the name as
written upon the face of the within Warrant in every particular, without
alteration or enlargement or any change whatsoever.
19
<PAGE> 1
INDEMNIFICATION AND ESCROW AGREEMENT
This Indemnification and Escrow Agreement ("Agreement") is
entered into as of February 20, 1996, by and among: (A) JACOR COMMUNICATIONS,
INC., an Ohio corporation ("Buyer"); (B) PRUDENTIAL VENTURE PARTNERS II, L.P., a
limited partnership ("Prudential"); (C) NORTHEAST VENTURES II, a partnership
("NorthEast"); (D) JOHN T. LYNCH ("Lynch"); (E) FRANK A. DE FRANCESCO ("De
Francesco"); (F) THOMAS R. JIMENEZ ("Jimenez"); (G) WILLIAM R. ARBENZ
("Arbenz"); (H) CIHC, INCORPORATED, a Delaware corporation ("CIHC"); (I) BANKERS
LIFE HOLDING CORPORATION, a Delaware corporation ("BLH"); (J) NOBLE BROADCAST
GROUP, INC. a Delaware corporation ("Company"); (K) THE FIFTH THIRD BANK, an
Ohio banking corporation (the "Escrow Agent"); (L) CONSECO, INC., an Indiana
corporation ("Conseco"), and Lynch ("Sellers Representative"), under the
following circumstances:
A. Prudential and NorthEast are the record and beneficial
owners of 100% of the Class A Stock.
B. Lynch, De Francesco, Jimenez and Arbenz are the record and,
along with their respective spouses, the beneficial owners of 100% of the issued
Class B Stock.
C. CIHC and BLH are the record and beneficial owners of the
Warrants.
D. Concurrently with the execution of this Agreement (i) the
Buyer; (ii) the Class A Shareholders; (iii) the Class B Shareholders; (iv) the
Warrant Sellers; and (v) Company have entered into the Stock Agreement.
E. Concurrently with the execution of this Agreement, NBS, SRI,
NBCI and Chesapeake have entered into the NBS Contract.
F. Concurrently with the execution of this Agreement, Buyer and
Company entered into an Investment Agreement pursuant to which Company has
agreed to issue and the Buyer has agreed to purchase the New Warrants.
G. The Class B Shareholders are herein authorizing Sellers
Representative to act as their sole and exclusive agent in connection with this
Agreement, and the Warrant Sellers and the Class A Shareholders are herein
authorizing Conseco to act as their sole and exclusive agent in connection with
this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises
herein made, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
<PAGE> 2
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used herein, the following terms
shall have the meanings ascribed to them below.
1.1.1 "ARBENZ" means William R. Arbenz.
1.1.2 "AWARD NOTICE" means a written notice executed by a
prevailing Claimant or Claim Respondent, as the case may be,
reporting that any Objection to any Claim Notice has been
determined and resolved by entry of a final order, decree or
judgment by the federal or state court as provided in SECTION
10.9 hereof (the time for appeal therefrom having expired and
no appeal having been perfected), or by consent to entry of any
judgment concerning such Objection. Such notice shall include a
true copy of any such order, decree or judgment, if any,
certified by a clerk of such court, and directions from the
prevailing Claimant or Claim Respondent, as applicable, for any
disbursements to be made from the Escrow Fund in connection
with the resolution of such Objection.
1.1.3 "BLH" means Bankers Life Holding Corporation, a Delaware
corporation.
1.1.4 "BUYER" means Jacor Communications, Inc., an Ohio
corporation.
1.1.5 "BUYER AGREEMENT OR COVENANT" means:
1.1.5.1 An agreement or covenant made by the Buyer in
the Stock Agreement or any agreement or
covenant made by the Buyer in any Ancillary
Document referred to in the Stock Agreement;
and/or
1.1.5.2 An agreement or covenant made by Chesapeake in
the NBS Contract.
1.1.6 "BUYER ESCROW INDEMNIFIED CLAIM" means:
1.1.6.1 A claim for Damages by Buyer against the
Securities Sellers for breach of one or more
Company Representations and Warranties; and/or
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<PAGE> 3
1.1.6.2 A claim for Damages by Buyer against the
Securities Sellers for breach of one or more
NBS Representation or Warranty.
1.1.7 "BUYER NON-ESCROW INDEMNIFIED CLAIM" means:
1.1.7.1 A claim for Damages by Buyer against a Class B
Shareholder for breach by such Class B
Shareholder of one or more Class B Shareholder
Representation or Warranty; or a claim for
Damages by Buyer against a Conseco Party for a
breach by such Conseco Party of one or more
Conseco Party Representation or Warranty; or
1.1.7.2 A claim for Damages by Buyer against a Class B
Shareholder for breach by such Class B
Shareholder of one or more Class B Shareholder
Agreement or Covenant; or a claim for Damages
by Buyer against a Conseco Party for a breach
by such Conseco Party of one or more Conseco
Party Agreement; or
1.1.7.3 A claim for Damages by Buyer against the Class
B Shareholders for breach of one or more
Company Agreement or Covenant; or
1.1.7.4 A claim for Damages by Buyer against the Class
B Shareholders for breach of an NBS Agreement;
or
1.1.8 "BUYER REPRESENTATION OR WARRANTY" means:
1.1.8.1 "Buyer's Representations and Warranties" as
that term is defined in the Stock Agreement,
and in addition, any representation or
warranty made by the Buyer in any Ancillary
Document referred to in the Stock Agreement;
or
1.1.8.2 "Buyer's Representations and Warranties" as
that term is defined in the NBS Contract.
1.1.9 "CHESAPEAKE" means Buyer's wholly-owned subsidiary,
Chesapeake Securities, Inc., a Delaware corporation.
1.1.10 "CIHC" means CIHC, Incorporated, a Delaware corporation.
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<PAGE> 4
1.1.11 "CLAIMANT" means a party submitting a Claim Notice.
1.1.12 "CLAIM NOTICE" means a written notice of a Buyer Escrow
Indemnified Claim, a Buyer Non-Escrow Indemnified Claim and/or
a Seller Indemnified Claim that includes a statement, with
reasonable specificity, of (i) the nature and basis of the
claim and (ii) the estimated dollar amount or range of the
dollar amount of the claim upon which such Claim Notice is
based to the knowledge and belief of the Claimant. Such Claim
Notice shall (a) in the case of a Buyer Escrow Indemnified
Claim be delivered by Buyer to (i) Sellers Representative, in
the event the claim is asserted against one or more of the
Class B Shareholders (and, provided that the time for bringing
any Buyer Escrow Indemnified Claim or Buyer Non-Escrow
Indemnified Claim against the Conseco Parties has not expired,
with a copy to Conseco); or (ii) to Conseco, in the event the
claim is asserted against one or more of the Conseco Parties
(with a copy to the Sellers Representative); or (iii) to both
Sellers Representative and Conseco, in the event the claim is
directed against one or more Class B Shareholders and one or
more Conseco Parties; and (iv) to the Escrow Agent; or (b) in
the case of a Buyer Non-Escrow Indemnified Claim be delivered
by Buyer to (i) Sellers Representative, in the event the claim
is directed against one or more of the Class B Shareholders
(with a copy to Conseco); or (ii) to Conseco, in the event the
claim is directed against one or more of the Conseco Parties
(with a copy to Sellers Representative); or (iii) to both
Sellers Representative and Conseco, in the event the claim is
directed against both the Class B Shareholders and the Conseco
Parties; or (c) in the case of a Seller Indemnified Claim
delivered by the Sellers Representative and/or Conseco, as the
case may be, to the Buyer.
1.1.13 "CLAIM RESPONDENT" means one or more party against whom
a claim is asserted pursuant to a Claim Notice.
1.1.14 "CLASS A ESCROW ACCOUNT" means the "Class A Escrow
Account" of the Escrow Fund.
1.1.15 "CLASS A ESCROW CONSIDERATION" means One Hundred Two
Thousand and Five Hundred Dollars ($102,500) of the Class A
Redemption Price to be deposited into the Escrow Fund by the
Class A Shareholders on the date of this Agreement.
1.1.16 "CLASS A ESCROW RELEASE DATE" means the date which is
the first anniversary of the date on which the Class A Escrow
Consideration was initially deposited with the Escrow Agent,
provided no unresolved Claim Notice is then pending with
respect to which one or more Class A Shareholder is a Claim
Respondent, or if any such unresolved Claim Notice
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<PAGE> 5
is then pending, the date on which such unresolved Claim Notice
no longer remains pending, whichever is later; provided
further, however, an amount equal to 110% of the estimated
amount of the Damages pertaining to the pending claim set forth
in such unresolved Claim Notice shall be retained until such
Claim Notice is resolved, and the balance of such funds held by
the Escrow Agent in the Class A Escrow Account shall be
released on the first anniversary of the date of this
Agreement.
1.1.17 "CLASS A SHAREHOLDER(S)" means Prudential and NorthEast
(each referred to herein individually as a "Class A
Shareholder", and together as the "Class A Shareholders")
1.1.18 "CLASS A STOCK" means the Class A convertible common
stock of Company which is being redeemed on the date hereof
pursuant to the Stock Agreement.
1.1.19 "CLASS A REDEMPTION PRICE" has the meaning ascribed to
it in SECTION 2.2 of the Stock Agreement.
1.1.20 "CLASS B SHAREHOLDER(S)" means Lynch, De Francesco,
Jimenez and Arbenz (each referred to herein individually as a
"Class B Shareholder", and collectively as the "Class B
Shareholders")
1.1.21 "CLASS B SHAREHOLDER AGREEMENT OR COVENANT" means an
agreement or covenant made by any Class B Shareholder in the
Stock Agreement or any agreement or covenant made by any Class
B Shareholder in any Ancillary Document referred to in the
Stock Agreement.
1.1.22 "CLASS B SHAREHOLDER REPRESENTATION OR WARRANTY" means a
representation or warranty made by any Class B Shareholder in
the Stock Agreement or a representation or warranty made by any
Class B Shareholder in any Ancillary Document referred to in
the Stock Agreement.
1.1.23 "CLASS B STOCK" means the Class B voting common stock of
Company.
1.1.24 "COMPANY" means Noble Broadcast Group, Inc., a Delaware
corporation.
1.1.25 "COMPANY AGREEMENT OR COVENANT" means an agreement or
covenant made by Company in the Stock Agreement or any
agreement or covenant made by Company in any Ancillary Document
referred to in the Stock Agreement.
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<PAGE> 6
1.1.26 "COMPANY REPRESENTATIONS AND WARRANTIES" has the meaning
ascribed to it in Section 4 of the Stock Agreement, and in
addition, any representation or warranty made by Company in any
Ancillary Document referred to in the Stock Agreement.
1.1.27 "CONSECO" means Conseco, Inc., an Indiana corporation.
1.1.28 "CONSECO PARTY(IES)" means the Class A Shareholders and
the Warrant Sellers (each referred to herein individually as a
"Conseco Party", and collectively as the "Conseco Parties")
1.1.29 "CONSECO PARTY AGREEMENT" means an agreement made by any
Conseco Party in the Stock Agreement.
1.1.30 "CONSECO PARTY REPRESENTATION OR WARRANTY" means a
representation or warranty made by any Conseco Party in ARTICLE
3 of the Stock Agreement or a representation or warranty made
by any Conseco Party in any Ancillary Document referred to in
the Stock Agreement.
1.1.31 "DAMAGES" means all losses, costs, damages, liabilities
and expenses which cause actual economic detriment to the
damaged party.
1.1.32 "DE FRANCESCO" means Frank A. De Francesco.
1.1.33 "DISBURSEMENT EVENT" means any event described in
SECTION 6.2 of this Agreement upon the occurrence of which the
Escrow Agent is authorized and required to make a disbursement
from the Escrow Fund.
1.1.34 "ESCROW AGENT" means The Fifth Third Bank, an Ohio
banking corporation.
1.1.35 "ESCROW AGENT INDEMNIFYING PARTIES" means collectively
each Class A Shareholder, each Class B Shareholder, each
Warrant Seller, Company and Buyer.
1.1.36 "ESCROW ASSETS" means the Warrant Escrow Consideration,
the Class A Escrow Consideration and the Stock Purchase Escrow
Consideration and any undistributed interest or dividend
earnings thereon.
1.1.37 "ESCROW CONSIDERATION" means the Warrant Escrow
Consideration, the Class A Escrow Consideration and the Stock
Purchase Escrow Consideration.
1.1.38 "ESCROW FUND" means an account at The Fifth Third Bank
established in the name of Jacor/Noble Indemnity and Escrow
Account, such account
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<PAGE> 7
having three sub-accounts: one designated as the "Warrant
Escrow Account" in which the Warrant Escrow Consideration shall
be held; one designated as the "Class A Escrow Account" in
which the Class A Escrow Consideration shall be held; and one
designated as the "Stock Purchase Escrow Account" in which the
Stock Purchase Escrow Consideration shall be held.
1.1.39 "INDEMNIFIED PARTY" means any party to this agreement
who has served a Claim Notice, until the Claim Respondent is
finally adjudicated by a court assuming and having jurisdiction
as provided in SECTION 10.9 hereof as not being required to
provide indemnification with respect to such Claim Notice.
1.1.40 "INDEMNIFYING PARTY" means any party to this agreement
against whom a Claim Notice is served until such party is
finally adjudicated by a court assuming and having jurisdiction
as provided in SECTION 10.9 hereof as not being required to
provide indemnification with respect to such Claim Notice.
1.1.41 "INVESTMENT AGREEMENT" means the Investment Agreement
between Buyer and Company of even date herewith pursuant to
which the Buyer has agreed to purchase the New Warrants.
1.1.42 "JIMENEZ" means Thomas R. Jimenez.
1.1.43 "KNOWLEDGE" means conscious awareness of facts or other
information by the president, an executive vice president, or
the chief financial officer of the party with respect to whom
the awareness of such facts or information shall be attributed.
1.1.44 "LYNCH" means John T. Lynch.
1.1.45 "NBCI" means Noble Broadcast Center, Inc., a California
corporation.
1.1.46 "NBS" means Noble Broadcast of San Diego, Inc., a
California corporation.
1.1.47 "NBS CONTRACT" means the Asset Purchase Agreement of
even date herewith by and among NBS, SRI, and NBCI as sellers,
and Chesapeake, as purchaser.
1.1.48 "NBS AGREEMENT" means any agreement made by NBS, SRI
and/or NBCI in the NBS Contract.
1.1.49 "NBS REPRESENTATION OR WARRANTY" means "Sellers
Representations and Warranties" as defined in the NBS Contract.
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<PAGE> 8
1.1.50 "NEW WARRANTS" mean warrants to acquire Class A
convertible common stock of Company which are being issued by
Company to the Buyer pursuant to the Investment Agreement.
1.1.51 "NORTHEAST" means NorthEast Ventures II, a partnership.
1.1.52 "NOTICE OF AGREED RELEASE" means a written declaration
executed by Buyer and Sellers Representative and, provided that
the Warrant Escrow Release Date has not yet occurred, Conseco,
specifying the resolution of any Objection to any Claim Notice,
and including directions for any disbursement to be made from
the Escrow Fund in connection with the resolution of such
Objection.
1.1.53 "OBJECTION" means a written objection to a Claim Notice
stating in detail the basis for such objection.
1.1.54 "PRUDENTIAL" means Prudential Venture Partners II, L.P.,
a limited partnership.
1.1.55 "REDEMPTION CLOSING" has the meaning ascribed to it in
SECTION 10.1.1 of the Stock Agreement.
1.1.56 "SECURITIES SELLER(S)" means each Class B Shareholder
and each Conseco Party (each referred to herein as a
"Securities Seller," and the Class B Shareholders and Conseco
Parties are referred to herein collectively as the "Securities
Sellers.")
1.1.57 "SELLERS REPRESENTATIVE" means Lynch who has been
authorized by the Class B Shareholders to act as their sole and
exclusive agent in connection with this Agreement pursuant to
SECTION 10.6 hereof, and any designated successor.
1.1.58 "SELLER INDEMNIFIED CLAIM" means:
1.1.58.1 A claim for Damages by the Securities
Sellers against the Buyer for breach
of one or more Buyer Representation
or Warranty; or
1.1.58.2 A claim for Damages by the Securities
Sellers against the Buyer for breach
of one or more Buyer Agreement or
Covenant; or
1.1.59 "STOCK CLOSING" has the meaning ascribed to it in
SECTION 12.1.1 of the Stock Agreement.
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<PAGE> 9
1.1.60 "STOCK ESCROW RELEASE DATE" means the date which is the
first anniversary of the Stock Closing, provided no unresolved
Claim Notice is then pending with respect to which one or more
Class B Shareholder is a Claim Respondent, or if any such
unresolved Claim Notice is then pending, the date on which such
unresolved Claim Notice no longer remains pending, whichever is
later; provided further, however, an amount equal to 110% of
the estimated amount of the Damages pertaining to the pending
claim set forth in such unresolved Claim Notice shall be
retained until such Claim Notice is resolved, and the balance
of such funds held by the Escrow Agent in the Stock Escrow
Account shall be released on the first anniversary of the Stock
Closing.
1.1.61 "STOCK AGREEMENT" means the Stock Purchase and Warrant
Redemption Agreement of even date herewith among (i) the Buyer;
(ii) the Class A Shareholders; (iii) the Class B Shareholders;
(iv) the Warrant Sellers; and (v) Company.
1.1.62 "STOCK PURCHASE ESCROW ACCOUNT" means the "Stock
Purchase Escrow Account" of the Escrow Fund.
1.1.63 "STOCK PURCHASE ESCROW CONSIDERATION" means Five Hundred
Twenty-Two Thousand Five Hundred Dollars ($522,500) of the
Stock Purchase Price to be deposited into the Escrow Fund on
the date of the Stock Closing.
1.1.64 "STOCK PURCHASE PRICE" has the meaning ascribed to it in
SECTION 1.2 of the Stock Agreement.
1.1.65 "SRI" means Sports Radio, Inc., a California
corporation.
1.1.66 "TERMINATION DATE" means the date this Agreement is
terminated pursuant to SECTION 9 hereof.
1.1.67 "THIRD PARTY CLAIM" means any demand, suit, claim or
assertion of liability by one or more third parties giving rise
to a claim by way of a Claim Notice by the Claimant for
indemnification for Damages for a Buyer Escrow Indemnified
Claim, a Buyer Non-Escrow Indemnified Claim or a Seller
Indemnified Claim, as the case may be, pursuant to this
Agreement.
1.1.68 "UNCONTESTED CLAIM NOTICE" means (a) any Claim Notice
with respect to a Buyer Escrow Indemnified Claim to which the
Claim Respondent does not submit a timely Objection, or (b) any
Claim Notice with respect to a Buyer Escrow Indemnified Claim
to which the Claim Respondent submits a timely Objection that
is subsequently withdrawn in a Withdrawal Notice submitted by
the Claim Respondent.
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<PAGE> 10
1.1.69 "WARRANTS" mean warrants to acquire Class A convertible
common stock of Company that are owned by the Warrant Sellers
which shall be redeemed on the date hereof pursuant to the
Stock Agreement.
1.1.70 "WARRANT ESCROW ACCOUNT" means the "Warrant Escrow
Account" of the Escrow Fund.
1.1.71 "WARRANT ESCROW CONSIDERATION" means One Million Eight
Hundred Seventy-Five Thousand Dollars ($1,875,000) of the
Warrant Redemption Price to be deposited into the Escrow Fund
by the Warrant Sellers on the date of this Agreement.
1.1.72 "WARRANT ESCROW RELEASE DATE" means the date which is
the first anniversary of the date on which the Warrant Escrow
Consideration was initially deposited with the Escrow Agent,
provided no unresolved Claim Notice is then pending with
respect to which one or more Warrant Seller is a Claim
Respondent, or if any such unresolved Claim Notice is then
pending, the date on which such unresolved Claim Notice no
longer remains pending, whichever is later; provided further,
however, an amount equal to 110% of the estimated amount of the
Damages pertaining to the pending claim set forth in such
unresolved Claim Notice shall be retained until such Claim
Notice is resolved, and the balance of such funds held by the
Escrow Agent in the Warrant Escrow Account shall be released on
the first anniversary of the date of this Agreement.
1.1.73 "WARRANT REDEMPTION PRICE" has the meaning ascribed to
it in SECTION 2.2 of the Stock Agreement.
1.1.74 "WARRANT SELLER(S)" means CIHC and BLH (each referred to
herein individually as a "Warrant Seller", and together as the
"Warrant Sellers").
1.1.75 "WARRANT SELLERS NOTE REPAYMENT AMOUNT" means the
amounts received by the Warrant Sellers on account of repayment
of their notes payable from the Company received on the date of
this Agreement.
1.1.76 "WITHDRAWAL NOTICE" means a written declaration executed
by a Claimant withdrawing a Claim Notice or by a Claim
Respondent withdrawing an Objection.
SECTION 2
RIGHT TO INDEMNIFICATION
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2.1 INDEMNIFICATION BY SECURITIES SELLERS FOR BUYER ESCROW
INDEMNIFIED CLAIMS. Subject to the limitations imposed by SECTION 2.5
hereof, the Securities Sellers agree to indemnify and hold harmless Buyer
against any Buyer Escrow Indemnified Claim described in SECTION 1.1.6.1 and/or
SECTION 1.1.6.2 hereof. The obligation of the Securities Sellers to indemnify
and hold harmless Buyer pursuant to this SECTION 2.1, shall be subject to the
limitations contained in SECTION 8.15 of the Stock Agreement, and shall not
become operative until the aggregate indemnification obligation of the
Securities Sellers to Buyer hereunder exceeds $500,000, and provided, further,
that once the aggregate indemnification obligation of the Securities Sellers to
Buyer exceeds $500,000, only those Damages that exceed $500,000, shall be
included within the indemnification obligations of the Securities Sellers with
respect to a Buyer Escrow Indemnified Claim. The Buyer's sole source of recovery
against the Securities Sellers for indemnification by Securities Sellers with
respect to a Buyer Escrow Indemnified Claim pursuant to this SECTION 2.1, shall
be limited to a claim by the Buyer against the Escrow Assets, and once the
Escrow Assets have been exhausted, Buyer shall have no right whatsoever to
proceed directly against or offset amounts payable to the Securities Sellers
(except as permitted by SECTION 5.1 hereof) for recovery with respect to a Buyer
Escrow Indemnified Claim pursuant to this SECTION 2.1. With respect to Buyer
Escrow Indemnified Claims brought within twelve (12) months from the date of the
Redemption Closing, seventy-five percent (75%) of the responsibility for such
claims shall be borne by the Warrant Sellers; Four and one-tenth percent (4.1%)
of the responsibility for such claims shall be borne by the Class A
Shareholders; and twenty and nine-tenths percent (20.9%) of the responsibility
for such claims shall be borne by the Class B Shareholders; and thereafter with
respect to Buyer Escrow Indemnified Claims, one hundred percent (100%) of the
responsibility for such claims shall be borne by the Class B Shareholders.
2.2 INDEMNIFICATION BY SECURITIES SELLERS FOR BUYER
NON-ESCROW INDEMNIFIED CLAIMS. Subject to the limitations imposed by SECTION
2.5 hereof, each Securities Seller severally agrees to indemnify and hold
harmless Buyer against any Buyer Non- Escrow Indemnified Claim resulting from
such Securities Seller's breach pursuant to SECTION 1.1.7.1, SECTION 1.1.7.2,
SECTION 1.1.7.3, or SECTION 1.1.7.4 hereof.
2.3 INDEMNIFICATION BY BUYER FOR BREACH OF A BUYER
REPRESENTATION OR WARRANTY. Subject to the limitations imposed by SECTION
2.5 hereof, Buyer agrees to indemnify and hold harmless any Securities Seller
against any Seller Indemnified Claim resulting from Buyer's breach pursuant to
SECTION 1.1.58.1 hereof.
2.4 INDEMNIFICATION BY BUYER FOR BREACH OF A BUYER
AGREEMENT OR COVENANT. Subject to the limitations imposed by SECTION 2.5
hereof, Buyer agrees to indemnify and hold harmless the Securities Sellers
against any Seller Indemnified Claim resulting from Buyer's breach pursuant to
SECTION 1.1.58.2 hereof.
2.5 LIMITATIONS ON INDEMNIFICATION. In no event shall (i) the
obligation of each Class B Shareholder to indemnify and hold harmless Buyer
pursuant to SECTION 2.2
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hereof exceed such Class B Shareholder's proportionate share of the Stock
Purchase Price as set forth on Exhibit B; or (ii) the obligation of each Warrant
Seller to indemnify and hold harmless Buyer pursuant to SECTION 2.2 hereof
exceed such Warrant Seller's proportionate share of the Warrant Redemption Price
as set forth on Exhibit B and so much of the Warrant Sellers Note Repayment
Amount as was received by such Warrant Seller; or (iii) the obligation of each
Class A Shareholder to indemnify and hold harmless Buyer pursuant to SECTION 2.2
hereof exceed such Class A Shareholder's proportionate share of the Class A
Redemption Price as set forth on Exhibit B. Buyer's obligation to indemnify and
hold harmless a Warrant Seller pursuant to SECTION 2.3 and SECTION 2.4 hereof
shall in no event exceed such Warrant Seller's proportionate share of the
Warrant Redemption Price as set forth on Exhibit B and so much of the Warrant
Sellers Note Repayment Amount as was received by such Warrant Seller. Buyer's
obligation to indemnify and hold harmless a Class A Shareholder pursuant to
SECTION 2.3 and SECTION 2.4 hereof shall in no event exceed such Class A
Shareholder's proportionate share of the Class A Redemption Price as set forth
on Exhibit B. Buyer's obligation to indemnify and hold harmless a Class B
Shareholder pursuant to SECTION 2.3 and SECTION 2.4 hereof shall in no event
exceed such Class B Shareholder's proportionate share of the Stock Purchase
Price as set forth on Exhibit B.
SECTION 3
INDEMNIFICATION PROCEDURES
3.1 DIRECT CLAIMS. Within twenty (20) days from the
date upon which the Indemnified Party has Knowledge that it is entitled to
indemnity hereunder, an Indemnified Party shall give written notice by means of
a Claim Notice to the Indemnifying Party of any claim by the Indemnified Party
for indemnity hereunder. Thereafter the Indemnified Party and the Indemnifying
Party shall attempt, in good faith, to resolve such claim for indemnity. In the
event the Indemnified Party and the Indemnifying Party are unable to resolve a
claim for indemnity within twenty (20) days of receipt of notice, the
Indemnified Party may pursue an action in law or equity in the federal or state
court as provided in SECTION 10.9 hereof.
3.2 THIRD PARTY CLAIMS.
3.2.1 NOTICE OF THIRD PARTY CLAIM. An Indemnified Party agrees
to give written notice by means of a Claim Notice within a
reasonable time, but not to exceed twenty (20) days from
receipt, to the Indemnifying Party of any Third Party Claim, it
being understood that the failure to give such notice shall not
affect the Indemnified Party's right to indemnification and the
Indemnifying Party's obligation to indemnify as set forth in
this Agreement, unless the Indemnifying Party's ability to
contest, defend or settle with respect to such Third Party
Claim is thereby demonstrably prejudiced.
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3.2.2 DEFENSE OF THIRD PARTY CLAIMS BY INDEMNIFYING PARTY. The
Indemnifying Party shall have the right, but not the
obligation, to undertake, by counsel or other representatives
of its own choosing, the defense or opposition to such Third
Party Claim.
3.2.3 DEFENSE OF THIRD PARTY CLAIMS BY INDEMNIFIED PARTY. In
the event that the Indemnifying Party shall elect not to
undertake such defense or opposition, or within ten days after
notice of any such Third Party Claim from the Indemnified Party
shall fail to defend or oppose, the Indemnified Party (upon
further written notice to the Indemnifying Party) shall have
the right to undertake the defense, opposition, compromise or
settlement of such Third Party Claim, by counsel or other
representatives of its own choosing, on behalf of and for the
account and risk of the Indemnifying Party (subject to the
right of the Indemnifying Party to assume defense of or
opposition to such Third Party Claim at any time prior to
settlement, compromise or final determination thereof).
Notwithstanding the foregoing, the Indemnifying Party shall
have the right to dispute whether such Third Party Claim gives
rise to a valid claim for indemnification hereunder.
3.2.4 PARTICIPATION IN DEFENSE OF THIRD PARTY CLAIMS. Anything
in this SECTION 3.2 to the contrary notwithstanding, (A) the
Indemnified Party shall have the right, at its own cost and
expense, to participate in the defense, opposition, compromise
or settlement of the Third Party Claim, (B) the Indemnifying
Party shall not, without the Indemnified Party's written
consent, settle or compromise any Third Party Claim or consent
to entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all
liability in respect of such Third Party Claim, and (C) in the
event that the Indemnifying Party undertakes defense of or
opposition to any Third Party Claim, the Indemnified Party, by
counsel or other representative of its own choosing and at its
sole cost and expense, shall have the right to consult with the
Indemnifying Party and its counsel or other representatives
concerning such Third Party Claim and the Indemnifying Party
and the Indemnified Party and their respective counsel or other
representatives shall cooperate in good faith with respect to
such Third Party Claim.
3.2.5 THIRD PARTY CLAIM GIVING RISE TO BUYER ESCROW INDEMNIFIED
CLAIM. In the event a Third Party Claim gives rise to a Buyer
Escrow Indemnified Claim, if Buyer is entitled to
indemnification with respect to such Third Party Claim, then
such claim shall be satisfied from Escrow Assets available for
such purpose.
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3.2.6 NO ADMISSION REGARDING THIRD PARTY CLAIMS. No undertaking
of defense or opposition to a Third Party Claim shall be
construed as an acknowledgement by such party that it is liable
to the Indemnified Party with respect to the Third Party Claim
at issue or other similar Third Party Claims.
3.3 EXPENSES. Any expense of an Indemnified Party in
enforcing such Indemnified Party's claim of indemnity hereunder shall also
constitute an indemnified claim in the event the Indemnified Party prevails on
the claim; provided, however, if the Indemnified Party does not prevail on the
claim such unsuccessful Indemnified Party shall pay the reasonable expenses,
including reasonable attorney's fees and expenses, of the Indemnifying Party in
defending against such unsuccessful claim.
3.4 CLAIMS AGAINST ESCROW ASSETS. Any claim by an
Indemnified Party against the Escrow Assets shall be brought pursuant to SECTION
6 hereof.
3.5 TIME PERIOD FOR BRINGING CLAIMS.
3.5.1 CLAIMS UNDER STOCK AGREEMENT.
3.5.1.1 Any claim by Buyer against one or more Conseco
Party for indemnification for breach of one or more
Company Representations and Warranties pursuant to
SECTION 1.1.6.1 hereof may be brought at any time
within a period of twelve (12) months from the date of
the Redemption Closing. Any claim by Buyer against one
or more Class B Shareholder for indemnification for
breach of one or more Company Representations and
Warranties pursuant to SECTION 1.1.6.1 hereof may be
brought at any time within the time periods specified
in SECTION 8.13.3, SECTION 8.13.4, SECTION 8.13.5, of
the Stock Agreement, as applicable.
3.5.1.2 Any claim by Buyer against one or more Class B
Shareholder for indemnification for breach of a Class
B Shareholder Representation or Warranty pursuant to
SECTION 1.1.7.1 hereof may be brought at any time
within the time periods specified in SECTION 8.13.2 of
the Stock Agreement. Any claim by Buyer against one or
more Conseco Party for indemnification for breach of a
Conseco Party Representation or Warranty pursuant to
SECTION 1.1.7.1 hereof may be brought at any time
within the time periods specified in SECTION 8.13.2 of
the Stock Agreement.
3.5.1.3 Any claim by Buyer against one or more Class B
Shareholder for indemnification for breach of a Class
B Shareholder Agreement or Covenant pursuant to
SECTION 1.1.7.2 hereof may be
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brought at any time within the time periods specified
in SECTION 8.13.1 of the Stock Agreement. Any claim by
Buyer against one or more Conseco Party for
indemnification for breach of a Conseco Party
Agreement pursuant to SECTION 1.1.7.2 hereof may be
brought at any time within the time periods specified
in SECTION 8.13.1 of the Stock Agreement.
3.5.1.4 Any claim by Buyer against one or more Class B
Shareholder for indemnification for breach of a
Company Agreement or Covenant pursuant to SECTION
1.1.7.3 hereof may be brought at any time within the
time periods specified in SECTION 8.13.1 of the Stock
Agreement.
3.5.1.5 Any claim for indemnification brought by
Securities Sellers against Buyer for breach of a Buyer
Representation or Warranty pursuant to SECTION 1.1.8.1
hereof may be brought within the time periods
specified in SECTION 8.13.2 of the Stock Agreement.
3.5.1.6 Any claim for indemnification brought by
Securities Sellers against Buyer for breach of a Buyer
Agreement or Covenant pursuant SECTION 1.1.5.1 hereof,
may be brought within the time periods specified in
SECTION 8.13.1 of the Stock Agreement.
3.5.2 CLAIMS UNDER NBS CONTRACT.
3.5.2.1 Any claim by Buyer against one or more
Securities Seller for indemnification for breach of an
NBS Representation or Warranty pursuant to SECTION
1.1.6.2 hereof may be brought within the time periods
specified in SECTION 8.7.2 of the NBS Contract.
3.5.2.2 Any claim by Buyer against one or more Class B
Shareholder for indemnification for breach of an NBS
Agreement pursuant to SECTION 1.1.7.4 hereof, may be
brought at any time within the time periods specified
in SECTION 8.7.1 of the NBS Contract.
3.5.2.3 Any claim by Securities Sellers against Buyer
for indemnification for breach of a Buyer
Representation or Warranty pursuant to SECTION 1.1.8.2
hereof may be brought at any time within the time
periods specified in SECTION 8.7.2 of the NBS
Contract.
3.5.2.4 Any claim by Securities Sellers against Buyer
for indemnification for breach of a Buyer Agreement or
Covenant pursuant to SECTION 1.1.5.2 hereof, may be
brought within the time periods specified in SECTION
8.7.1 of the NBS Contract.
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3.6 RIGHT TO REVIEW AND AUDIT. A Claim Respondent shall
have the right to review and audit, at such Claim Respondent's expense, the
books and records of the Claimant specifically relating to the Claimant's claim
to determine the amount and validity of a claim set forth in the Claim Notice.
The Claim Respondent further agrees that any information obtained from the
review and audit of such books and records will be used by the Claim Respondent,
and the Claim Respondent's attorneys, accountants and other professional
advisors, solely for the purpose of responding to the Claim Notice and for no
other purpose. Claim Respondent further agrees to keep such information
confidential unless such information (i) at the time of disclosure or thereafter
is generally available to the public (other than as a result of a disclosure in
violation of this agreement), (ii) was available on a nonconfidential basis from
a source other than the Claimant, provided that such source was not obligated to
keep such information confidential, or (iii) has been independently acquired or
developed without violating any of the obligations under this agreement. Upon
resolution of the Claim Notice, the Claim Respondent agrees to return to the
Claimant all such information obtained from the Claimant's books and records
together with all copies thereof.
3.7 NO CONSENT REQUIRED BY NON-PARTICIPATING PARTY. A
Claimant and any Claim Respondent shall be entitled to resolve and settle as
between such Claimant and Claim Respondent the applicable Claim Notice without
any requirement for the consent of any other party to this Agreement, and such
settlement shall not act to release any other party to this Agreement from such
other party's obligations hereunder.
SECTION 4
APPOINTMENT OF ESCROW AGENT
4.1 APPOINTMENT. The Class A Shareholders, the Class B
Shareholders, the Warrant Sellers, the Buyer, and Company hereby appoint the
Escrow Agent to serve as escrow agent and the Escrow Agent hereby accepts the
appointment to act as escrow agent upon the terms, conditions and provisions of
this Agreement.
4.2 ESCROW AGENT FEES. For its services hereunder
(which shall include receipt, investment, and disbursement of the Escrow Fund in
the manner contemplated by this Agreement), the Escrow Agent shall be paid an
annual fee in the amount set forth on Exhibit A to this Agreement. The Escrow
Agent's fees and expenses shall be paid one-half by Buyer and one-half by the
Securities Sellers in accordance with the percentages set forth in Exhibit B.
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SECTION 5
ESCROW FUND
5.1 CREATION OF ESCROW FUND. At the Warrant Closing,
the Warrant Sellers shall deposit the Warrant Escrow Consideration into the
Warrant Escrow Account of the Escrow Fund and the Class A Shareholders shall
deposit the Class A Escrow Consideration into the Class A Escrow Account of the
Escrow Fund. At the Stock Closing, Buyer shall deposit the Stock Purchase Escrow
Consideration into the Stock Purchase Escrow Account of the Escrow Fund. The
Escrow Agent hereby acknowledges receipt of the Warrant Escrow Consideration and
the Class A Escrow Consideration, acknowledges that the Warrant Escrow
Consideration and the Class A Escrow Consideration has been placed in the Escrow
Fund and agrees to hold, administer and pay the Escrow Fund in accordance with
the terms of this Agreement and not permit any withdrawal thereof except
pursuant to the terms hereof. In the event claims against the Warrant Escrow
Account brought prior to the Warrant Escrow Release Date exceed the Warrant
Escrow Consideration, and/or claims against the Class A Escrow Account brought
prior to the Class A Escrow Release Date exceed the Class A Escrow
Consideration, the excess amount of such claims may, at Buyer's option, be
offset against any sums owed by Buyer to the Class B Shareholders up to the
amount of the Stock Purchase Escrow Consideration, or may be paid from the Stock
Purchase Escrow Account once the Stock Purchase Escrow Consideration has been
deposited therein.
5.2 INVESTMENT OF ESCROW ASSETS. During the term of
this Agreement the Escrow Agent shall invest and reinvest the Escrow Assets in
obligations of the United States and agencies thereof or any money market
account or fund investing solely in obligations of the United States or agencies
thereof, provided that no such investment shall have a maturity of more than
thirty (30) days from the date of such investment unless specifically agreed to
by Buyer, Sellers Representative and, provided that the Warrant Escrow Release
Date has not yet occurred, Conseco. Sellers Representative and, provided that
the Warrant Escrow Release Date has not yet occurred, Conseco may, but are not
required to, direct such investments of the foregoing types as Sellers
Representative and, provided that the Warrant Escrow Release Date has not yet
occurred, Conseco shall, in their sole discretion, deem appropriate, provided
that no such investment shall have a maturity of more than thirty (30) days from
the date of such investment unless specifically agreed to by Buyer. In the
absence of a direction regarding investment, the Escrow Agent shall invest the
Escrow Assets in the Escrow Agent's Fountain Square U.S. Treasury Obligations
Fund. Investment Directions shall be delivered to the Escrow Agent by written
instructions in the form of Exhibit C attached hereto. Interest earned on the
Escrow Fund shall be distributed, no less frequently than quarterly, and
allocated pro rata based upon the initial amount deposited, between Conseco and
the Sellers Representative, who shall promptly distribute such interest earnings
to the Securities Sellers pro rata according to the proportions set forth in
Exhibit B.
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5.3 COOPERATION. Each of the parties hereto shall
cooperate with the Escrow Agent and deliver to the Escrow Agent such additional
confirmations, certificates, affirmations, information and other documents as
the Escrow Agent shall reasonably request in the performance of its obligations
under this Agreement, including any and all such items as the Escrow Agent shall
deem necessary to evidence termination of this Agreement and to evidence the
parties' consent to the final distribution of the Escrow Fund in accordance with
the terms of this Agreement.
5.4 PURPOSE OF ESCROW FUND. The Escrow Fund has been
established for the purpose of providing the exclusive source of funds to
satisfy Buyer Escrow Indemnified Claims.
SECTION 6
CLAIM NOTICES AND DISTRIBUTION OF ESCROW FUND
6.1 NOTICES OF BUYER ESCROW INDEMNIFIED CLAIMS. At any
time prior to the expiration of time for bringing any Buyer Escrow Indemnified
Claim against one or more Securities Sellers, Buyer may deliver a Claim Notice
with respect to a Buyer Escrow Indemnified Claim. The Claim Respondent shall
have fifteen (15) days following the date of such a Claim Notice or an amended
Claim Notice to timely deliver to the Escrow Agent and the Claimant an
Objection. The Claimant and the Claim Respondent shall review together any
Objection timely submitted by the Claim Respondent to such Claim Notice, and
shall attempt in good faith to resolve such Objection. Any such resolution shall
be evidenced by a Notice of Agreed Release executed by the Claimant and the
Claim Respondent and delivered to the Escrow Agent. At any time during such
discussions the Claimant may submit a Withdrawal Notice for all or any part of
any claim described in such Claim Notice, and the Claim Respondent may submit a
Withdrawal Notice for all or any part of any Objection. In the event the
Claimant and the Claim Respondent are unable to resolve such a Claim Notice
within twenty (20) days, the Indemnified Party may pursue an action in law or
equity in the federal or state court as provided in SECTION 10.9 hereof. The
Escrow Agent shall respond to an Uncontested Claim Notice, a Notice of Agreed
Release, or an Award Notice in accordance with SECTION 6.2 hereof.
6.2 DISPOSITION OF ESCROW FUND. The Escrow Agent shall pay and
disburse amounts held in the Escrow Fund as follows:
6.2.1 To Buyer as specified in any Uncontested Claim Notice;
6.2.2 To Buyer as specified in any Notice of Agreed Release
received by the Escrow Agent;
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6.2.3 To Buyer, if Buyer has prevailed on a claim as
specified in any Award Notice received by the Escrow
Agent;
6.2.4 Any amounts held in the Warrant Escrow Account shall
be distributed by the Escrow Agent to Conseco, on
behalf of the Warrant Sellers, on the Warrant Escrow
Release Date, provided no unresolved Claim Notice is
then pending with respect to which one or more Warrant
Seller is a Claim Respondent, or if any such
unresolved Claim Notice is then pending, the date on
which such unresolved Claim Notice no longer remains
pending, whichever is later; provided further,
however, an amount equal to 110% of the estimated
amount of the Damages pertaining to the unresolved
portion or any pending claim set forth in such
unresolved Claim Notice shall be retained until such
Claim Notice is resolved, and the balance of such
funds held by the Escrow Agent in the Warrant Escrow
Account shall be released to Conseco, on behalf of the
Warrant Sellers on the first anniversary of the date
of this Agreement.
6.2.5 Any amounts held in the Class A Escrow Account shall
be distributed by the Escrow Agent to Conseco, on
behalf of the Class A Shareholders, on the Class A
Escrow Release Date, provided no unresolved Claim
Notice is then pending with respect to which one or
more Class A Shareholder is a Claim Respondent, or if
any such unresolved Claim Notice is then pending, the
date on which such unresolved Claim Notice no longer
remains pending, whichever is later; provided further,
however, an amount equal to 110% of the estimated
amount of the Damages pertaining to the unresolved
portion or any pending claim set forth in such
unresolved Claim Notice shall be retained until such
Claim Notice is resolved, and the balance of such
funds held by the Escrow Agent in the Class A Escrow
Account shall be released to Conseco, on behalf of the
Class A Shareholders on the first anniversary of the
date of this Agreement.
6.2.6 Any amounts held in the Stock Purchase Escrow Account
shall be distributed by the Escrow Agent to Sellers
Representative, on behalf of the Class B Shareholders,
on the Stock Escrow Release Date; provided no
unresolved Claim Notice is then pending with respect
to which one or more Class B Shareholder is a Claim
Respondent, or if any such unresolved Claim Notice is
then pending, the date on which such unresolved Claim
Notice no longer remains pending, whichever is later;
provided further, however, an amount equal to 110% of
the estimated amount of the Damages pertaining to the
unresolved portion or any pending claim set forth in
such unresolved Claim Notice shall be retained until
such Claim Notice is resolved, and the balance of
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such funds held by the Escrow Agent in the Stock
Purchase Escrow Account shall be released to Sellers
Representative, on behalf of the Class B Shareholders,
on the first anniversary of the Stock Closing.
6.3 DISBURSEMENT PROCEDURE. All disbursements hereunder
shall be made by the Escrow Agent within three (3) business days following its
receipt of notice of a Disbursement Event executed in accordance with this
Agreement. Any disbursements to the Class B Shareholders shall be made in
immediately available funds payable to Sellers Representative. Any disbursements
to the Warrant Sellers shall be made in immediately available funds payable to
Conseco. Any disbursements to the Class A Shareholders shall be made in
immediately available funds payable to Conseco.
SECTION 7
PERFORMANCE OF THE ESCROW AGENT
7.1 LIMITATION OF LIABILITY. The duties and obligations of the
Escrow Agent are only those expressly set forth in this Agreement. Escrow Agent
shall not be liable to anyone for any damages, losses, or expenses which they
may incur as a result of any act or omission of Escrow Agent, unless such
damages, losses, or expenses are caused by Escrow Agent's fraud, willful
misconduct or gross negligence. Accordingly, Escrow Agent shall not incur any
such liability with respect to (a) any action taken or omitted in good faith
upon the advice of Escrow Agent's counsel or the joint advice of counsel for the
other parties hereto, given with respect to any question relating to the duties
and responsibilities of Escrow Agent under this Agreement or (b) any action
taken or omitted in reliance upon any instrument, including execution, or the
identity or authority of any person executing such instrument, its validity and
effectiveness, but also as to the truth and accuracy of any information
contained therein which Escrow Agent shall, in good faith, believe to be
genuine, to have been signed by a proper person or persons and to conform to the
provisions of this Agreement. Escrow Agent shall not be bound in any way by any
contract or agreement between other parties hereto, whether or not it has
knowledge of any such contract or agreement or of its terms or conditions.
7.2 INDEMNITY OF THE ESCROW AGENT.
7.2.1 INDEMNIFICATION. The Escrow Agent Indemnifying Parties
jointly and severally, hereby agree to indemnify and hold
harmless Escrow Agent against any and all costs, losses,
claims, damages, liabilities and expenses, including reasonable
costs of investigation, court costs, and reasonable attorney's
fees and disbursements, which may be imposed upon Escrow Agent
in connection with its acceptance of appointment as Escrow
Agent hereunder, including any litigation arising from this
Agreement involving the subject matter hereof, and all such
costs, expenses and disbursements shall be for the account of
and shall be borne and paid as provided in SECTION 7.2.3 as a
condition to
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termination of the Agreement, except that there shall be no
indemnification for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the
fraud, willful misconduct or gross negligence of the Escrow
Agent.
7.2.2 SECURITY. As security for the indemnification obligations
of the Escrow Agent by the Indemnifying Parties, the Escrow
Agent is hereby granted a lien upon all assets held by Escrow
Agent hereunder, which lien shall be prior to all other liens
upon or claims against such assets.
7.2.3 SHARING OF COSTS. Any amounts that become payable to the
Escrow Agent in accordance with SECTION 7.2.1 shall be borne
and paid one-half by Buyer and one-half by the Securities
Sellers except (i) if such amounts become payable to the Escrow
Agent due solely to the action or failure to act of Buyer, all
such amounts shall be borne and paid entirely by Buyer, or (ii)
if such amounts become payable to the Escrow Agent due solely
to the action or failure to act of one or more Class B
Shareholder, one or more Conseco Party, Sellers Representative,
and/or Conseco, all such amounts shall be borne and paid
entirely by the party or parties responsible. All amounts borne
and to be paid as provided for pursuant to this SECTION 7.2.3
may be paid directly to the Escrow Agent from property held by
the Escrow Agent pursuant to this Agreement. If the
indemnification obligations to the Escrow Agent are satisfied
from such property held by the Escrow Agent hereunder, then the
party obligated to pay such costs, expenses and disbursements
pursuant to this SECTION 7.2.3 shall make such payments in cash
to the Escrow Agent to reimburse the Escrow Fund for
satisfaction of such indemnification obligations.
7.3 DISPUTES.
7.3.1 DISAGREEMENTS. In the event of any disagreement among any
of the parties to this Agreement, or among them or any other
person resulting in adverse claims and demands being made in
connection with or from any property involved herein or
affected hereby, Escrow Agent shall be entitled to refuse to
comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no
delivery or other disposition of any property then held by it
under this Agreement, and in so doing the Escrow Agent shall be
entitled to continue to refrain from acting until (i) the right
of adverse claimants shall have been finally settled by binding
arbitration or finally adjudicated in a court assuming and
having jurisdiction of the property involved herein or affected
hereby as provided in SECTION 10.9 or (ii) all differences
shall have been adjusted by agreement and Escrow Agent shall
have been notified in writing of such agreement signed by the
parties hereto.
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7.3.2 INTERPLEADER. In the event of such disagreement, Escrow
Agent may, but need not, tender into the registry or custody of
any court of competent jurisdiction as provided in SECTION 10.9
all money or property in its hands under the terms of this
Agreement, together with such legal proceedings as it deems
appropriate and thereupon to be discharged from all further
duties under this Agreement. The filing of any such legal
proceeding shall not deprive Escrow Agent of its compensation
earned prior to such filing.
7.3.3 SECURITY TO BE PROVIDED. Escrow Agent shall have no
obligation to take any legal action in connection with this
Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding which would
or might involve it in any cost, expense, loss or liability
unless security and indemnity, as provided in SECTION 7.2 of
this Agreement, shall be furnished.
SECTION 8
VACANCIES
8.1 RESIGNATION OF THE ESCROW AGENT. The Escrow Agent
may at any time resign by giving at least thirty (30) days' prior written notice
of such resignation to each of the other parties hereto. In such event, Buyer
with the approval of Sellers Representative and Conseco, which approval shall
not be unreasonably withheld, will promptly select another bank insured by the
Federal Deposit Insurance Corporation, and with assets of not less than
$50,000,000 which will be appointed as successor escrow agent and Buyer and the
other parties hereto shall enter into an agreement with such other bank, in
substantially the form of this Agreement. From and after the effective date of
the appointment of a successor escrow agent hereunder, the Escrow Agent shall
not be obligated to perform any of the duties of the Escrow Agent hereunder and
will not be liable for any nonperformance thereof nor for any act or failure to
act whatsoever on the part of any successor escrow agent. If a substitute for
the Escrow Agent hereunder shall not have been selected, as aforesaid, the
Escrow Agent shall be entitled to petition any court for the appointment of a
substitute for it hereunder, or in the alternative, it may transfer and deliver
the Escrow Fund to or upon the order of any court; provided, however, until such
time as a substitute has been appointed as herein provided or a court has
otherwise ordered, the Escrow Agent shall continue to serve hereunder.
8.2 SUCCESSOR TO THE ESCROW AGENT. Any corporation
resulting from any merger or consolidation to which the Escrow Agent shall be a
party, or any corporation in any manner succeeding to all or substantially all
of the business of the Escrow Agent, provided such corporation shall be a
banking corporation organized under the laws of the United States of America
with trust powers, shall be the successor agent hereunder without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
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<PAGE> 23
8.3 REMOVAL OF THE ESCROW AGENT. In the event Buyer,
Sellers Representative and, provided that the time for bringing any Buyer Escrow
Indemnified Claim or Buyer Non-Escrow Indemnified Claim against the Conseco
Parties has not expired, Conseco consent to the removal of the Escrow Agent and
the appointment of a successor escrow agent, the Escrow Agent shall transfer and
deliver the Escrow Fund to such successor escrow agent whereupon the Escrow
Agent shall be discharged from all further duties hereunder.
SECTION 9
TERMINATION
This Agreement shall terminate when the time for bringing any
Buyer Escrow Indemnified Claim or Buyer Non-Escrow Indemnified Claim against any
Securities Seller has expired, the time for bringing any Seller Indemnified
Claim against the Buyer has expired, and all Escrow Assets in the Escrow Fund
are distributed as provided in SECTION 6. When all Escrow Assets in the Escrow
Fund are distributed as provided in SECTION 6 hereof, the Escrow Agent shall be
released and discharged from any further obligations under this Agreement.
SECTION 10
GENERAL PROVISIONS
10.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement
contains the entire agreement among the parties hereto and supersedes all prior
oral or written agreements, promises, representations, commitments or
understandings with respect to the matters provided for herein. This Agreement
may be modified or amended only by a writing duly executed by Buyer, Company,
Sellers Representative, Conseco, and the Escrow Agent, which modification or
amendment shall be binding upon all of the parties hereto.
10.2 NO INTENDED THIRD PARTY BENEFICIARIES. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or entity other than the parties hereto and their successors
or permitted assigns, any rights or remedies under or by reason of this
Agreement.
10.3 ASSIGNMENT AND BINDING EFFECT. This Agreement and
the rights and obligations of any party hereunder may be assigned and delegated
by any party hereto without the prior written consent of the other parties
hereto. No such assignment and delegation shall relieve the assigning party of
its obligations hereunder in the event that its assignee fails to performs the
obligations delegated. All covenants, agreements, statements, representations,
warranties and indemnities in this Agreement by and on behalf of any of the
parties hereto shall bind and inure to the benefit of their respective
successors and permitted assigns of the parties hereto.
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<PAGE> 24
10.4 WAIVERS. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a continuing waiver, and no
waiver shall be binding unless executed in writing by the party making the
wavier.
10.5 NOTICES. All notices, including a Claim Notice,
demands or other communications which may be or are required to be given by any
party to any other party pursuant to this Agreement, shall be in writing and
shall be mailed by certified mail, return receipt requested, postage prepaid, or
transmitted by hand delivery, national overnight express, telegram or facsimile
transmission, addressed as follows:
10.5.1 If to Buyer: Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Randy Michaels
Fax: (513) 621-6087
with a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Fax: (513) 651-3836
10.5.2 If to the Class B Shareholders, to Sellers Representative as follows:
John T. Lynch
1508 Uno Verde Court
Solana Beach, California 92075
Fax: (619) 236-1048
with a copy (which shall not constitute notice) to:
Gray, Cary Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101-4297
Attention: J. Terence O'Malley, Esq.
Fax: (619) 236-1048
and with a copy (which shall not constitute notice) to:
Frank A. De Francesco
24
<PAGE> 25
13202 Lomas Verdes Drive
Poway, California 92064
Fax: (619) 673-9049
10.5.3 If to a Conseco Party, to Conseco, as follows:
Conseco, Inc.
11815 N. Pennsylvania Street
Carmel, Indiana 46032-4911
Attention: Eric Tooker, Esq.
Fax: (317) 817-3578
with a copy (which shall not constitute notice) to:
Conseco, Inc.
Suite 2700
745 Fifth Avenue
New York, New York
Attention: Ngaire E. Cuneo
Fax: (212) 750 2639
and with a copy (which shall not constitute notice) to:
Henderson, Daily, Withrow & Devoe
2600 One Indiana Place
Indianapolis, Indiana 46204
Attention: Robert Wildman, Esq.
Fax: (317) 639-0191
10.5.4 If to Escrow Agent, as follows:
The Fifth Third Bank
Corporate Trust Department
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Randolph J. Stierer, Vice President
Fax: (513) 744-6785
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<PAGE> 26
10.5.5 If to the Company, as follows:
4841 Pacific Highway
San Diego, California 92110
Attention: John T. Lynch
Frank A. De Francesco
Fax: (619) 294-9393
with a copy (which shall not constitute notice) to:
Gray, Cary Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101-4297
Attention: J. Terence O'Malley, Esq.
Fax: (619) 236-1048
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or telefax
transmission log being deemed conclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
10.6 REPRESENTATIVES. The Class B Shareholders hereby
appoint John T. Lynch as their agent and representative (the "Sellers
Representative") for the purposes of representing, acting for and binding the
Class B Shareholders for all purposes of this Agreement, including, without
limitation: (i) amending, restating, supplementing, terminating or otherwise
modifying this Agreement or making any waivers on behalf of Class B Shareholders
pursuant hereto; and (ii) settling of any controversies or disagreements on
behalf of the Class B Shareholders hereunder; and (iii) receiving or giving any
notices to or from Class B Shareholders hereunder; and (iv) communicating on
behalf of Class B Shareholders with the other parties hereto as to any matters
relating to this Agreement. The other parties to this Agreement shall be
entitled to presumptively rely without further inquiry upon all acts of, and
communications from, Sellers Representative as being the authorized actions and
communications of the Shareholders Representative as approved by Class B
Shareholders. The Sellers Representative may resign upon thirty (30) days
written notice to all parties hereto, and may be removed by a majority vote of
the Class B Shareholders (based upon their interests as set forth in Exhibit B).
Upon resignation or removal of the Sellers Representative, the Class B
Shareholders shall appoint a replacement (by majority vote) and shall give
notice of the name and address of such replacement to all parties hereto. If at
any time no Sellers Representative is currently serving, any notice, including a
Claim Notice, required to be served on the Sellers Representative hereunder may
be served upon the Class B Shareholders with the same effect as if such notice
had been served on the Sellers Representative.
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<PAGE> 27
The Conseco Parties hereby appoint Conseco as their agent and
representative for the purposes of representing, acting for and binding the
Conseco Parties for all purposes of this Agreement, including, without
limitation: (i) amending, restating, supplementing, terminating or otherwise
modifying this Agreement (other than a modification to the percentages set forth
in Exhibit B hereto) or making any waivers on behalf of the Conseco Parties
pursuant hereto; and (ii) settling of any controversies or disagreements on
behalf of the Conseco Parties hereunder; and (iii) receiving or giving any
notices to or from the Conseco Parties hereunder; and (iv) communicating on
behalf of the Conseco Parties with the other parties hereto as to any matters
relating to this Agreement. The other parties to this Agreement shall be
entitled to presumptively rely without further inquiry upon all acts of, and
communications from, Conseco as being the authorized actions and communications
of Conseco as approved by the Conseco Parties. If at any time Conseco is no
longer serving as the representative of the Conseco Parties hereunder, any
notice, including a Claim Notice, required to be served on Conseco hereunder may
be served upon the Conseco Parties with the same effect as if such notice had
been served on Conseco.
10.7 HEADINGS. The article and section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
10.8 SEVERABILITY. Wherever possible, each provision of
this Agreement will be interpreted so as to be effective and valid under
applicable law, but if any provision of this Agreement is prohibited by or
invalid under such law, such provision will be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
10.9 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio (but not
including the choice-of-laws rules thereof). The parties agree that any action
brought by any party against one or more other parties arising out of this
Agreement, or in relation to or connection with the validity or performance (or
nonperformance) hereof, shall be initiated and prosecuted in a federal or state
court located in Hamilton County, Ohio, and each party hereby consents and
submits to the exercise of jurisdiction over its person by any court situated
therein having jurisdiction over the subject matter. The parties waive any
objection based on forum non conveniens and/or to venue of any action
instituted hereunder.
10.10 REMEDIES. The rights, remedies and powers
provided herein pertain only to claims which are a Buyer Escrow Indemnified
Claim, a Buyer Non-Escrow Indemnified Claim, and/or a Seller Indemnified Claim.
Any party hereto having a claim against another party hereto other than a claim
which is a Buyer Escrow Indemnified Claim, a Buyer Non-Escrow Indemnified Claim,
and/or a Seller Indemnified Claim may enforce such claim by pursuing any remedy
available to such party at law or in equity, and
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<PAGE> 28
nothing contained herein shall be deemed to limit such party's rights, remedies,
or powers with respect to such claim.
10.11 COUNTERPARTS; EXECUTION. This Agreement may be
executed in as many counterparts as may be required, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but a single agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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<PAGE> 29
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused this Agreement to be executed on its behalf, as of the
date first above written.
<TABLE>
<S> <C>
JACOR COMMUNICATIONS, INC. ______________________________
JOHN T. LYNCH
By:___________________________ ______________________________
Its:___________________________ FRANK A. DEFRANCESCO
CIHC, INCORPORATED
______________________________
THOMAS R. JIMENEZ
By:___________________________
Its:___________________________ ______________________________
WILLIAM R. ARBENZ
BANKERS LIFE HOLDING CORPORATION
By:___________________________
Its:___________________________
NOBLE BROADCAST GROUP, INC. THE FIFTH THIRD BANK
By:___________________________ By:___________________________
Its:___________________________ Its:__________________________
PRUDENTIAL VENTURE PARTNERS II, L.P. NORTHEAST VENTURES II
By: Prudential Equity Investors, Inc. By: NorthEast Ventures, L.P., Partner
General Partner By: NorthEast Ventures Inc., General Partner
By:___________________________ By:____________________________
DANA J. O'BRIEN, Executive Vice President EDGAR O. CHENY, JR., President
CONSECO, INC.
By:___________________________ _____________________________
Its:___________________________ JOHN T. LYNCH, Sellers Representative
</TABLE>
[Signature Page to Indemnification and Escrow Agreement]
29
<PAGE> 30
EXHIBIT A
ESCROW AGENT FOR
INDEMNIFICATION AND ESCROW AGREEMENT
FEBRUARY 6, 1996
JACOR COMMUNICATIONS, INC.
RE: NOBLE BROADCAST GROUP, INC.
<TABLE>
<S> <C>
ACCEPTANCE FEE & 1ST YEAR FEE $7,500.00
INCLUDES ANTICIPATED LEGAL FEES FOR INITIAL REVIEW.
ANNUAL ADMINISTRATION FEE (AFTER 1ST YEAR): $5,000.00
</TABLE>
All out-of-pocket expenses deemed necessary and incurred in the acceptance or
the administration of this account by Fifth Third Bank, including but not
limited to attorney's and agent's fees, extraordinary time and expenses of Fifth
Third Bank, postage, supplies, long distance telephone charges, wire transfer
fees, travel, redemption expenses, and courier expenses, are to be reimbursed in
addition to payment for services rendered. Fifth Third Bank also charges a cash
management fee on its' taxable Fountain Square Funds in the amount of $.30 per
$1,000 held per month. Fees for activities not specifically contemplated herein
shall be additional. The acceptance of this account and fees are subject to
Fifth Third Bank's review and approval of documents governing this issue.
30
<PAGE> 31
EXHIBIT B
CLASS B SHAREHOLDERS AND CONSECO PARTIES PROPORTIONS
<TABLE>
<S> <C>
PRUDENTIAL VENTURE PARTNERS II, L.P. 3 .9%
NORTHEAST VENTURES II 0 .2%
JOHN T. LYNCH 18.9%
THOMAS R. JIMENEZ 0 .1%
FRANK A. DE FRANCESCO 1 .8%
WILLIAM R. ARBENZ 0 .1%
BANKERS LIFE HOLDING CORPORATION 30.4%
CIHC, INCORPORATED 44.6%
</TABLE>
31
<PAGE> 32
EXHIBIT C
INVESTMENT DIRECTION LETTER
The Fifth Third Bank
Corporate Trust Department
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Randolph J. Stierer, Vice President
RE: JACOR/NOBLE INDEMNITY AND ESCROW ACCOUNT
Dear Sir:
This letter is being provided to you pursuant to Section 5.2 of
the Indemnification and Escrow Agreement ("Agreement") date February __, 1996,
by and among: (A) Jacor Communications, Inc., an Ohio corporation (B) Prudential
Venture Partners II, L.P., a limited partnership; (C) NorthEast Ventures II, a
partnership; (D) John T. Lynch; (E) Frank A. De Francesco; (F) Thomas R.
Jimenez; (G) William R. Arbenz; (H) CIHC, Incorporated; , a Delaware
corporation; (I) Bankers Life Holding Corporation, a Delaware corporation; (J)
Noble Broadcast Group, Inc., a Delaware corporation; (K) The Fifth Third Bank,
an Ohio banking corporation; (L) Conseco, Inc., an Indiana corporation; and John
T. Lynch, as Sellers Representative.
You are hereby directed to invest the Escrow Assets in the
following investments:
Please contact the undersigned if you have any questions.
================================================================================
In the event the
investments in which
you are directed to
invest the Escrow
Assets have a maturity
of more than
______________________________ thirty (30) days from the date of such
Sellers Representative investment:
In the event the Warrant Escrow Jacor Communications, Inc.
Release Date has not yet occurred:
Conseco, Inc.
By____________________________ By__________________________
================================================================================
32
<PAGE> 1
STOCK ESCROW AND SECURITY AGREEMENT
This Stock Escrow and Security Agreement ("Agreement") is
entered into as February 20, 1996, by and among: (A) JACOR COMMUNICATIONS, INC.,
an Ohio corporation ("Buyer"); (B) JOHN T. LYNCH ("Lynch"); (C) FRANK A. DE
FRANCESCO ("De Francesco"); (D) THOMAS R. JIMENEZ ("Jimenez"); (E) WILLIAM R.
ARBENZ ("Arbenz"); (F) NOBLE BROADCAST GROUP, INC., a Delaware corporation
("Company"); (G) PHILLIP H. BANKS ("Trustee") and (H) THE FIFTH THIRD BANK, an
Ohio banking corporation (the "Escrow Agent"), under the following
circumstances:
A. Lynch, De Francesco, Jimenez and Arbenz are the record and
beneficial owners of 100% of the issued Class B Stock.
B. Concurrently with the execution of this Agreement (i) the
Buyer; (ii) the Class A Shareholders; (iii) the Class B Shareholders; (iv) the
Warrant Sellers; and (v) the Company have entered into the Stock Agreement.
C. The Class B Shareholders have authorized the Sellers
Representative to act as their sole and exclusive agent in connection with this
Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises
herein made, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used herein, the following terms
shall have the meanings ascribed to them below.
1.1.1 "ARBENZ" means William R. Arbenz.
1.1.2 "BLH" means Bankers Life Holding Corporation, a Delaware
corporation.
1.1.3 "BUYER" means Jacor Communications, Inc., an Ohio
corporation.
1.1.4 "BUYER NOTICE OF TERMINATION" means a written declaration
executed by the Buyer to the effect that the Stock Agreement
has been terminated by the Buyer pursuant to SECTION 13.1.2 OR
13.1.3 of the Stock Agreement.
1.1.5 "CIHC" means CIHC, Incorporated, a Delaware corporation.
<PAGE> 2
1.1.6 "CLASS A SHAREHOLDER(S)" means Prudential and Northeast
(each referred to herein individually as a "Class A
Shareholder", and together as the "Class A Shareholders").
1.1.7 "CLASS B SHAREHOLDER(S)" means Lynch, De Francesco,
Jimenez and Arbenz, and upon FCC Approval and the consequent
registration of the Class B Stock in the name of the Trustee,
the Trustee (each referred to herein individually as a "Class B
Shareholder", and collectively as the "Class B Shareholders").
1.1.8 "CLASS B STOCK" means the Class B voting common stock of
the Company.
1.1.9 "COMPANY" means Noble Broadcast Group, Inc., a Delaware
corporation.
1.1.10 "DAMAGES" means all losses, costs, damages, liabilities
and expenses which cause actual economic detriment to the
damaged party, including reasonable attorneys' fees and
expenses.
1.1.11 "DEFAULTING STOCK SELLER" means (a) any Class B
Shareholder if with respect to such Class B Shareholder, or the
Class B Stock owned by Such Class B Shareholder, an Event of
Default occurs pursuant to SECTION 5.7 hereof, and (b) each
Class B Shareholder specified as a Defaulting Stock Seller in
SECTION 4.1 or SECTION 4.2 hereof.
1.1.12 "DEFAULTING STOCK SELLER OBLIGATION" means the
obligation of a Defaulting Stock Seller to return to Buyer such
Defaulting Stock Seller's proportionate share of the aggregate
Stock Purchase Price paid by Buyer at or before the Stock
Closing, together with any Damages incurred by Buyer as a
result of the failure of such Defaulting Stock Seller to
deliver the Class B Stock owned by such Defaulting Stock Seller
to Buyer on the Stock Closing Date, which Damages include, but
are not limited to, any increase in value of the Class B Stock
owned by the Defaulting Stock Seller between the date of this
Agreement and the date on which such Class B Stock is
liquidated in foreclosure of the security interest granted to
Buyer pursuant to this Agreement.
1.1.13 "DE FRANCESCO" means Frank A. De Francesco.
1.1.14 "ENDORSEMENTS" means, with respect to each certificate
evidencing ownership of Class B Stock, either (a) an
endorsement, by the owner of such Class B Stock, with signature
guaranteed, on the certificate or certificates evidencing the
Class B Stock, sufficient to transfer title to such Class B
2
<PAGE> 3
Stock to the Buyer, free and clear of all liabilities (absolute or
contingent) and Liens, upon delivery of such Class B Stock to the Buyer
by the Escrow Agent; or (b) a separate assignment executed by the owner
of such Class B Stock, with signature guaranteed, sufficient to
transfer title to such Class B Stock to the Buyer, free and clear of
all liabilities (absolute or contingent) and Liens, upon delivery of
such Class B Stock and separate assignment to the Buyer by the Escrow
Agent. Upon receipt of FCC Approval and upon the preparation by the
Escrow Agent of new share certificates evidencing ownership of all the
Class B Stock in the name of the Trustee, the Trustee shall prepare new
Endorsements with respect to each share certificate registered in the
name of the Trustee, and such new Endorsements shall be substituted for
the Endorsements previously held by the Escrow Agent.
1.1.15 "ESCROW AGENT" means The Fifth Third Bank, an Ohio
banking corporation.
1.1.16 "ESCROW AGENT INDEMNIFYING PARTIES" means collectively
each Class B Shareholder and Buyer.
1.1.17 "EVENT OF DEFAULT" has the meaning set forth in SECTION
5.7 hereof.
1.1.18 "FCC" means the Federal Communications Commission.
1.1.19 "FCC APPROVAL" means the approval granted by the FCC to
permit the Class B Shareholders to transfer the Class B Stock
owned by them to the Trustee pursuant to the Trust Agreement.
1.1.20 "FULL TERMINATION PAYMENT" has the meaning set forth in
SECTION 4.1 hereof.
1.1.21 "JIMENEZ" means Thomas R. Jimenez .
1.1.22 "LIENS" means any encumbrances, mortgages, pledges,
options, claims, proxies, and other security interests or
rights of others.
1.1.23 "LYNCH" means John T. Lynch.
1.1.24 "MUTUAL NOTICE OF TERMINATION" means a written
declaration executed by the Buyer and the Sellers
Representative to the effect that the Stock Agreement has been
terminated by mutual agreement of the Buyer and the Sellers (as
defined in the Stock Agreement) and instructing the Escrow
Agent regarding the final distribution of the Class B Stock and
Endorsements and termination of this Agreement.
3
<PAGE> 4
1.1.25 "NORTHEAST" means NorthEast Ventures II, a partnership.
1.1.26 "NOTICE OF AGREED RELEASE" means a written declaration
executed by Buyer and the Sellers Representative specifying the
resolution of any Objection to any Notice of Termination, and
including directions to distribute to each Class B Shareholder
the Class B Stock owned by such Class B Shareholder.
1.1.27 "OBJECTION" means a written objection by Buyer to a
Seller Notice of Termination or a written objection by Sellers
Representative to a Buyer Notice of Termination or a Notice of
Partial Termination.
1.1.28 "NOTICE OF PARTIAL TERMINATION" means a written
declaration executed by the Buyer to the effect that the Buyer
has elected to purchase some but less than all of the Class B
Stock.
1.1.29 "PERSON" means any individual, firm, partnership, joint
venture, corporation, association, business enterprise, trust,
Governmental Body or other entity, whether acting in an
individual, fiduciary, or other capacity.
1.1.30 "PRUDENTIAL" means Prudential Venture Partners II, L.P.,
a limited partnership.
1.1.31 "SECURITIES ACT" means the Securities Act of 1933, as
then in effect (or any similar statute then in effect).
1.1.32 "SELLER NOTICE OF TERMINATION" means a written
declaration executed by the Sellers Representative to the
effect that the Stock Agreement has been terminated by Sellers
(as defined in the Stock Agreement pursuant to SECTION 13.1.1
of the Stock Agreement.
1.1.33 "SELLERS REPRESENTATIVE" means Lynch who has been
authorized by the Class B Shareholders to act as their sole and
exclusive agent in connection with this Agreement pursuant to
SECTION 9.6 hereof.
1.1.34 "STOCK CLOSING" has the meaning ascribed to it in
SECTION 12.1 of the Stock Agreement.
1.1.35 "STOCK AGREEMENT" means the Stock Purchase and Stock and
Warrant Redemption Agreement of even date herewith among (i)
the Buyer; (ii) the Class A Shareholders; (iii) the Class B
Shareholders; (iv) the Warrant Sellers; and (v) the Company,
and any ancillary document referred to therein.
4
<PAGE> 5
1.1.36 "STOCK PURCHASE PRICE" has the meaning ascribed to it in
SECTION 1.2 of the Stock Agreement.
1.1.37 "CLASS B SHAREHOLDER OBLIGATION" means the obligation of
a Class B Shareholder to transfer to Buyer in accordance with
the Stock Agreement the Class B Stock owned by such Class B
Shareholder on the Stock Closing Date.
1.1.38 "TERMINATION DATE" means the date this Agreement is
terminated pursuant to SECTION 8 hereof.
1.1.39 "TRUSTEE" means Philip H. Banks as trustee under the
Trust Agreement.
1.1.40 "TRUST AGREEMENT" means the Trust Agreement dated
February 20, 1996, among Lynch, De Francesco, Jimenez, and
Arbenz, and their respective spouses, as co-grantors, and the
Trustee in the form of EXHIBIT 1.1.40.
1.1.41 "WARRANT SELLER(S)" means CIHC and BLH (each referred to
herein individually as a "Warrant Seller", and together as the
"Warrant Sellers").
SECTION 2
APPOINTMENT OF ESCROW AGENT
2.1 APPOINTMENT. The Class B Shareholders and the Buyer
hereby appoint the Escrow Agent to serve as escrow agent, and the Escrow Agent
hereby accepts the appointment to act as escrow agent upon the terms, conditions
and provisions of this Agreement. The Escrow Agent shall hold the Class B Stock
and the Endorsements with respect to such Class B Stock as the agent of the
Buyer pursuant to SECTION 5.2, and the Escrow Agent shall hold the Stock
Purchase Price when delivered by Buyer pursuant to SECTION 3.1 as the agent of
the Class B Shareholders.
The Company hereby appoints Escrow Agent as stock transfer
agent for the Company for the limited purpose of registering the transfer of the
Class B in the name of the Trustee, upon receipt of FCC Approval. The Company
has on the date of this Agreement provided Escrow Agent with sufficient blank
Class B Stock share certificates to permit the Escrow Agent, on the date FCC
Approval is obtained, to prepare one or more new certificates representing all
Class B Stock registered in the name of the Trustee and dated on the date of FCC
Approval, which new certificate or certificates shall continue to be held by the
Escrow Agent pursuant to this Agreement, and the Escrow Agent shall then cancel
the existing Class B Stock certificates registered in the names of Lynch, De
Francesco, Jimenez and Arbenz and shall return such cancelled certificates to
the Company to be included in the Company's share records. On such date, the
Trustee shall prepare and
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<PAGE> 6
deliver to the Escrow Agent substitute Endorsements executed by the Trustee in
favor of Buyer.
2.2 ESCROW AGENT FEES. For its services hereunder, the
Escrow Agent shall be paid by fee in the amount set forth on Exhibit A to this
Agreement.
SECTION 3
ESCROWED CLASS B STOCK
3.1 DEPOSIT OF ESCROWED CLASS B STOCK. On the date of
this Agreement, each Class B Shareholder has deposited with the Escrow Agent the
Class B Stock owned by such Class B Shareholder and the Endorsements with
respect to such Class B Stock. The Escrow Agent hereby acknowledges receipt of
the Class B Stock and the Endorsements. At the Stock Closing, Buyer shall
deposit the Stock Purchase Price with the Escrow Agent. The Escrow Agent agrees
to hold the Class B Stock and the Stock Purchase Price in accordance with the
terms of this Agreement.
Upon receipt of FCC Approval, the Escrow Agent shall prepare
new certificates representing all Class B Stock registered in the name of the
Trustee and dated on the date of FCC Approval, which new certificates shall
continue to be held by the Escrow Agent pursuant to this Agreement, and the
Escrow Agent shall then cancel the existing Class B Stock certificates
registered in the names of Lynch, De Francesco, Jimenez and Arbenz and shall
return such cancelled certificates to the Company to be included in the
Company's share records. On such date, the Trustee shall prepare and deliver to
the Escrow Agent substitute Endorsements executed by the Trustee in favor of
Buyer which new certificates and substitute Endorsements shall be held by Escrow
Agent in accordance with the terms of this Agreement.
3.2 COOPERATION. Each of the parties hereto shall
cooperate with the Escrow Agent and deliver to the Escrow Agent such additional
confirmations, certificates, affirmations, information and other documents as
the Escrow Agent shall reasonably request in the performance of its obligations
under this Agreement.
3.3 PURPOSE OF ESCROW. This escrow has been established
for the purpose of providing security to the Buyer for the performance by each
Class B Shareholder of such Class B Shareholder's Class B Shareholder Obligation
and for the performance of each Defaulting Stock Seller of such Defaulting Stock
Seller's Defaulting Stock Seller Obligation.
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SECTION 4
NOTICES AND DISTRIBUTION OF
CLASS B STOCK AND STOCK PURCHASE PRICE
4.1 BUYER NOTICE OF TERMINATION. At any time during the
term of this Agreement Buyer may deliver to the Escrow Agent and to the Sellers
Representative a Buyer Notice of Termination and Sellers Representative shall
have fifteen (15) days following the date of receipt by the Escrow Agent of a
Buyer Notice of Termination to deliver an Objection to Buyer and the Escrow
Agent. If an Objection is received by Escrow Agent within such period, Escrow
Agent shall hold all assets and documents in its possession as set forth in
SECTION 4.6 hereof. Within fifteen (15) days following the date of receipt by
the Escrow Agent of a Buyer Notice of Termination, the Class B Shareholders
shall pay to the Escrow Agent the following sum (the "Full Termination
Payment"): (a) an amount equal to the Stock Purchase Price, plus (b) an amount
equal to interest on the sum specified in clause (a) at the rate per annum
announced by Banque Paribas to be its prime rate of interest from time to time
at its principal office in Chicago, Illinois from the date of this Agreement to
the date such sum is paid to Escrow Agent, compounded annually. If the Full
Termination Payment is delivered to the Escrow Agent within 15 days from the
date of the Escrow Agent's receipt of a Buyer Notice of Termination, and if no
Objection has been delivered to the Escrow Agent prior to delivery of the Full
Termination Payment to the Escrow Agent, then while the Class B Stock is
registered in the name of Lynch, De Francesco, Jimenez and Arbenz, upon receipt
of the Full Termination Payment the Escrow Agent shall deliver to the Sellers
Representative the Class B Stock and the Endorsements, and the Escrow Agent
shall concurrently deliver the Full Termination Payment to Buyer; or when the
Class B Stock is registered in the name of the Trustee, upon receipt of the Full
Termination Payment the Escrow Agent shall deliver to the Trustee the Class B
Stock and the Endorsements, and the Escrow Agent shall concurrently deliver the
Full Termination Payment to Buyer. If the Full Termination Payment is not made
to the Escrow Agent within 15 days from the date of the Escrow Agent's receipt
of a Buyer Notice of Termination, and if no Objection is delivered to the Escrow
Agent and Buyer within (15) days following the date of receipt by the Escrow
Agent of a Buyer Notice of Termination, Escrow Agent shall Deliver the Class B
Stock and Endorsements to Buyer which Class B Stock shall continue to be held by
Buyer as security for each Defaulting Stock Seller Obligation; otherwise Escrow
Agent shall continue to hold those items pursuant to SECTION 4.6 hereof. If the
Full Termination Payment is not paid to the Escrow Agent within 15 days after
the date of the Escrow Agent's receipt of a Buyer Notice of Termination, all
Class B Shareholders shall be considered Defaulting Stock Sellers.
4.2 PARTIAL TERMINATION BY BUYER. At any time during
the term of this Agreement where the certificates representing Class B Stock
held by Escrow Agent are registered in the name of more than one Person, Buyer
may deliver to the Escrow Agent and to the Sellers Representative a Notice of
Partial Termination accompanied by the Stock Purchase Price allocated to the
Class B Stock which Buyer is purchasing as specified
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in the Notice of Partial Termination. Upon receipt of such partial Stock
Purchase Price, Escrow Agent shall immediately deliver to Buyer the Class B
Stock which Buyer is purchasing as specified in the Notice of Partial
Termination, and the Endorsements for such Class B Stock. Sellers Representative
shall have fifteen (15) days following the date of receipt by the Escrow Agent
of a Notice of Partial Termination to deliver to the Escrow Agent and Buyer an
Objection. If no Objection is delivered to the Escrow Agent and Buyer within
(15) days following the date of receipt by the Escrow Agent of a Notice of
Partial Termination, Escrow Agent shall (a) deliver to Buyer the Class B Stock
which Buyer is not purchasing as specified in the Notice of Partial Termination,
and Endorsements for such Class B Stock; and such Class B Stock and Endorsements
shall continue to be held by Buyer as security for each Defaulting Stock Seller
Obligation, and (b) deliver to Sellers Representative the partial Stock Purchase
Price paid by Buyer for the Class B Stock which Buyer is purchasing as specified
in the Notice of Partial Termination, except that if Buyer has elected to
purchase the Class B Stock of any Class B Shareholder who is then a Defaulting
Stock Seller, Escrow Agent shall deal with the Purchase Price of such Class B
Stock as set forth in SECTION 4.7. If an Objection is delivered to the Escrow
Agent and Buyer within the permitted 15 day period, the Escrow Agent shall hold
the Class B Stock not purchased by Buyer as specified in the Notice of Partial
Termination, and the Endorsements for such Class B Stock, as set forth in
SECTION 4.6. Each Class B Shareholder whose Class B Stock is not purchased by
Buyer pursuant to this SECTION 4.2 is considered a Defaulting Stock Seller.
4.3 SELLER NOTICE OF TERMINATION. At any time during
the term of this Agreement Sellers Representative may deliver to the Escrow
Agent and to the Buyer a Seller Notice of Termination and Buyer shall have
fifteen (15) days following the date of receipt by the Escrow Agent of such
Seller Notice of Termination to deliver to the Escrow Agent and Sellers
Representative an Objection. If no Objection is delivered to the Escrow Agent
within (15) days following the date of receipt by the Escrow Agent of a Seller
Notice of Termination, Escrow Agent shall deliver the Class B Stock and
Endorsements to the Sellers Representatives and this Agreement shall terminate.
4.4 MUTUAL NOTICE OF TERMINATION. At any time during
the term of this Agreement, Buyer and Sellers Representative may deliver to the
Escrow Agent a Mutual Notice of Termination. Upon delivery to the Escrow Agent
of a Mutual Notice of Termination, the Escrow Agent shall comply with the
directions contained therein and upon such compliance, this Agreement shall
terminate.
4.5 NOTICE OF STOCK CLOSING. At any time during the
term of this Agreement, Buyer may deliver to the Escrow Agent a Notice of Stock
Closing accompanied by the Stock Purchase Price. Upon receipt of such Notice of
Stock Closing and the Stock Purchase Price, the Escrow Agent shall immediately
deliver to Buyer the Class B Stock and Endorsements held by Escrow Agent
pursuant to this Agreement, and if no Class B Shareholder is then a Defaulting
Stock Seller, the Escrow Agent shall simultaneously deliver
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to the Sellers Representative the Stock Purchase Price. If any Class B
Shareholder is then a Defaulting Stock Seller, the Escrow Agent shall act in
accordance with SECTION 4.7.
4.6 DUTIES AFTER AN OBJECTION IS MADE. If an Objection
is timely submitted by Buyer or Sellers Representative as provided in this
SECTION 4, Buyer and the Sellers Representative shall review together such
Objection and shall attempt in good faith to resolve such Objection. Any
resolution shall be evidenced by a Notice of Agreed Release executed by Buyer
and the Sellers Representative. If, after receiving any notice described in this
SECTION 4, the Escrow Agent receives an Objection within the time period
provided for such Objection, the Escrow Agent shall hold all assets and
documents entrusted to it hereunder until the Escrow Agent receives a Notice of
Agreed Release, or until the Objection has been determined and resolved by entry
of a final order, decree or judgment by a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected),
or by consent to entry of any judgment concerning such Objection. In addition,
in the event any demand is made upon Escrow Agent concerning this Agreement,
Escrow Agent, at its election and in its sole discretion, may cause the assets
and documents then held by it to be delivered to a court of competent
jurisdiction to determine the rights of any Class B Shareholder and Buyer, or to
interplead any Class B Shareholder and Buyer by an action brought in any such
court. Deposit by Escrow Agent into such court of the assets and documents
delivered to Escrow Agent shall relieve Escrow Agent of all further liability
and responsibility in connection with this Agreement.
4.7 PURCHASE OF CLASS B STOCK FROM A DEFAULTING STOCK
SELLER. If, when Buyer purchases Class B Stock from any Class B Shareholder,
such person is a Defaulting Stock Seller, then the Escrow Agent shall
immediately deliver to Buyer the Class B Stock held by Escrow Agent pursuant to
this Agreement and Escrow Agent shall deliver to the Sellers Representative only
so much of the Stock Purchase Price as is payable to the Class B Shareholders
who are not Defaulting Stock Sellers and shall return the balance of the Stock
Purchase Price to the Buyer. Any Class B Stock owned by a Defaulting Stock
Seller delivered to Buyer by Escrow Agent pursuant to this SECTION 4.7 shall
continue to be held by Buyer as security for such Defaulting Stock Seller's
Defaulting Stock Seller Obligation. The Class B Shareholders acknowledge that if
any Class B Stock owned by a Defaulting Stock Seller is liquidated in
enforcement of Buyer security interest in such Class B Stock, Buyer's Damages
shall be at least equal to the entire proceeds received from the sale of such
Class B Stock upon foreclosure, plus the costs and expenses of Buyer in
enforcing such security interest, less the Stock Purchase Price attributable to
such Class B Stock, and that if the proceeds upon foreclosure are less than the
fair market value of such Class B Stock sold in foreclosure, Buyer's damages may
exceed the aforesaid amount.
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SECTION 5
PLEDGE OF CLASS B STOCK
5.1 PLEDGE OF CLASS B STOCK. Each Class B Shareholder
hereby pledges, mortgages, assigns, transfers, delivers, deposits, sets over and
confirms as a first priority pledge to the Buyer and its successors and assigns,
with any right to vote that such Class B Stock possesses as hereinafter
provided, all of the Class B Stock owned by such Class B Shareholder, which, in
the aggregate for all Class B Shareholders, consists of 255,018 shares of Class
B Stock, all as collateral security for performance by such Class B Shareholder
of such Class B Shareholder's obligations hereunder and such Class B
Shareholder's obligations under the Stock Agreement, including, without
limitation, its Class B Shareholder's Obligation, or in the event such Class B
Shareholder should become a Defaulting Stock Seller, its Defaulting Stock Seller
Obligation. Certificates representing the Class B Stock and the Endorsements
with respect thereto are herewith delivered to the Escrow Agent as the agent of
Buyer for the purpose of perfecting this pledge and such Class B Stock shall be
held in escrow upon the terms and conditions set forth herein.
5.2 PERFECTION OF PLEDGE. Escrow Agent acknowledges and
agrees that it is holding the Class B Stock and Endorsements for Buyer and
acting as agent for Buyer for the purpose of perfecting the security interest of
Buyer in the Class B Stock and Endorsements. The Class B Shareholders
acknowledge and agree that possession of the Class B Stock and Endorsements by
Escrow Agent shall perfect Buyer's security interest and pledge in the Class B
Stock, without any further act or deed.
5.3 OWNERSHIP OF CLASS B STOCK. Each Class B
Shareholder (other than the Trustee) represents and warrants that: (A) such
Class B Shareholder is the sole record and beneficial owner of good and
marketable title to all of the Class B Stock set forth opposite such Class B
Shareholder's name in the Disclosure Letter under the heading "Class B Stock
Owned"; (B) All Class B Stock held by such Class B Shareholder is duly
authorized, validly issued, fully paid for and is nonassessable; (C) such Class
B Shareholder owns such Class B Stock free and clear of all liabilities
(absolute or contingent) and Liens; (D) upon deposit of the Class B Stock owned
by each Class B Shareholder with the Escrow Agent, the Escrow Agent shall hold
100% of the issued and outstanding Class B Stock of the Company; and (E) at the
Stock Closing, Buyer will acquire good and marketable title to all of such Class
B Stock free and clear of all liabilities (absolute or contingent) and Liens.
5.4 CLASS B SHAREHOLDERS' RIGHTS. Unless and until an
Event of Default shall have occurred and be continuing, each Class B Shareholder
(or the proxy for such Class B Shareholder, but in no event the Trustee) shall
have the right to vote and give consents with respect to the Class B Stock owned
by such Class B Shareholder. Upon the occurrence of an Event of Default, each
Class B Shareholder (or the proxy for such Class B Shareholder, but in no event
the Trustee) will continue to retain such Class B Shareholder's
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right to vote and give consents with respect to the Class B Stock owned by such
Class B Shareholder until Buyer has obtained FCC consent as contemplated by
SECTION 5.8.8.
5.5 COVENANTS OF CLASS B SHAREHOLDERS (OTHER THAN THE
TRUSTEE). Each Class B Shareholder (other than the Trustee) covenants and
agrees that until satisfaction in full of such Class B Shareholder's Obligation:
5.5.1 Other than transferring such Class B Stock to the
Trustee, as contemplated herein, such Class B Shareholder will
not sell, assign, transfer, mortgage, pledge or otherwise
encumber any of such Class B Shareholder's rights in or to the
Class B Stock owned by such Class B Shareholder or any
dividends or other distributions or payments with respect
thereto or grant a Lien in any of the Class B Stock owned by
such Class B Shareholder or any unpaid dividends or other
distributions or payments with respect thereto.
5.5.2 Such Class B Shareholder will obtain, execute,
acknowledge and deliver all such instruments and take all such
action necessary (or as the Buyer from time to time may
request) in order to ensure the Buyer shall have and retain the
benefits of the first priority Lien in the Class B Stock owned
by such Class B Shareholder intended to be created by this
Agreement.
5.6 COVENANTS OF THE TRUSTEE. The Trustee covenants and
agrees that after the Class B Stock has been transferred to the Trustee, as
contemplated herein, until satisfaction in full of the Class B Shareholder's
Obligation, the Trustee will not sell, assign, transfer, mortgage, pledge or
otherwise encumber any of the Trustee's rights (other than the grant to Lynch of
a proxy to vote the Class B Stock) in or to the Class B Stock owned by the
Trustee.
5.7 EVENTS OF DEFAULT. The occurrence of any the following
shall constitute an "Event of Default" under this Agreement:
5.7.1 An occurrence of a material default by any Class B
Shareholder under the Stock Agreement.
5.7.2 Failure by any Class B Shareholder to observe and perform
any covenant, condition, or agreement on such Class B
Shareholder's part to be observed or performed under this
Agreement.
5.7.3 Failure of any representation or warranty of any Class B
Shareholder contained in this Agreement to be true when given.
5.7.4 Failure for any reason of the Escrow Agent to deliver all
Class B Stock and Endorsements to the Buyer upon Buyer's
delivery of the Stock Purchase Price pursuant to SECTION 3.1
hereof.
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5.7.5 The assertion by any person, other than the Class B
Shareholder in whose name such Class B Stock is registered, of
any claim to an interest in any Class B Stock.
5.7.6 The existence of a proceeding with respect to any Class B
Shareholder as debtor, under any chapter of the U.S. Bankruptcy
Code.
5.7.7 The occurrence of any event as a result of which the
delivery of the Class B Stock and Endorsements by the Escrow
Agent to the Buyer will not vest in the Buyer good and
marketable title to all of the Class B Stock, free and clear of
all liabilities (absolute or contingent) and Liens.
5.8 REMEDIES.
5.8.1 Upon the later of (i) the occurrence of an Event of
Default and (ii) compliance with the requirements of Section
5.8.8 hereof, then or at any time after such time, and in
addition to the rights and remedies of Buyer pursuant to the
terms and provisions of the Stock Agreement or any ancillary
document referred to therein, the Buyer (personally or through
an agent) is hereby authorized and empowered at its election,
to transfer and register in its name or in the name of its
nominee the whole or any part of any Class B Stock owned by a
Defaulting Stock Seller and to exercise the voting rights with
respect the Class B Stock owned by a Defaulting Stock Seller,
to sell, in one or more sales after seven (7) days' notice
(which notice the Class B Shareholders agree is commercially
reasonable) but without any previous notice or advertisement,
the whole or any part of the Class B Stock owned by a
Defaulting Stock Seller and to otherwise act with respect to
the Class B Stock owned by a Defaulting Stock Seller as though
the Buyer was the outright owner thereof, the Defaulting Stock
Seller hereby irrevocably constituting and appointing the Buyer
as the proxy and attorney-in-fact of the Defaulting Stock
Seller, with full power of substitution to do so; provided,
however, the Buyer shall not have any duty to exercise any such
right or to preserve the same and shall not be liable for any
failure to do so or for any delay in doing so. Any sale may be
either for cash or upon credit or for future delivery at such
price as the Buyer may deem fair, and the Buyer may be the
purchaser of the whole or any part of the Class B Stock owned
by a Defaulting Stock Seller so sold and hold the same
thereafter in its own right free from any claim of the
Defaulting Stock Seller or any right of redemption. Each sale
shall be made to the highest bidder, but the Buyer reserves the
right to reject any and all bids at such sale which, in its
sole discretion, it shall deem inadequate. Demands of
performance, except as otherwise herein specifically provided
for, notices of sale, advertisements and the presence of
property at sale are hereby waived and any sale
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hereunder may be conducted by an auctioneer or any officer or
agent of the Buyer.
5.8.2 Upon the occurrence of an Event of Default then or at any
time after such time, and in addition to the rights and
remedies of Buyer pursuant to the terms and provisions of the
Stock Agreement or any ancillary document referred to therein,
the Buyer (personally or through an agent) is hereby authorized
and empowered at its election to collect and receive all cash
dividends and other distributions made on the Class B Stock
owned by a Defaulting Stock Seller.
5.8.3 If, at the original time or times appointed for the sale
of the whole or any part of the Class B Stock owned by a
Defaulting Stock Seller, the highest bid, if there be but one
sale, shall be inadequate to discharge in full such Defaulting
Stock Seller's Obligation, or if the Class B Stock owned by a
Defaulting Stock Seller be offered for sale in lots, if at any
of such sales, the highest bid for the lot offered for sale
would indicate to the Buyer, in its discretion, the
unlikelihood of the proceeds of the sales of all of the Class B
Stock owned by a Defaulting Stock Seller being sufficient to
discharge such Defaulting Stock Seller's Defaulting Stock
Seller's Obligation, the Buyer may, on one or more occasions,
postpone any of said sales by public announcement at the time
of sale or the time of previous postponement of sale, and no
other notice of such postponement or postponements of sale need
be given, any other notice being hereby waived; provided,
however, that any sale or sales made after such postponement
shall be after 7 days' notice to each Defaulting Stock Seller.
5.8.4 In the event of any sale(s) hereunder the Buyer shall,
after deducting all costs or expenses of every kind (including
attorney's fees and expenses) for care, safekeeping,
collection, sale, delivery or otherwise, apply the residue of
the proceeds of the sale(s) to the payment or reduction, either
in whole or in part, of the Defaulting Stock Seller's
Obligation, disposing of any surplus as required by law.
5.8.5 If, at any time when the Buyer shall determine to
exercise its right to sell the whole or any part of the Class B
Stock owned by a Defaulting Stock Seller hereunder, such Class
B Stock or the part thereof to be sold shall not be effectively
registered, for any reason whatsoever, under the Securities
Act, the Buyer may, in its discretion (subject only to
applicable requirements of law), sell such Class B Stock owned
by a Defaulting Stock Seller or part thereof by private sale in
such manner and under such circumstances as the Buyer may deem
necessary or advisable, but subject to the other requirements
of this SECTION 5.8, and shall not be required to effect such
registration or to cause the same to be effected. Without
limiting the
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generality of the foregoing, in any such event the Buyer in its
discretion (a) may proceed to make such private sale
notwithstanding that a registration statement for the purpose
of registering such Class B Stock or part thereof could be or
shall have been filed under the Securities Act, (b) may
approach and negotiate with a single possible purchaser to
effect such sale, and (c) may restrict such sale to a purchaser
who will represent and agree that such purchaser is purchasing
for its own account, for investment and not with a view to the
distribution or sale of such Class B Stock or part thereof. In
addition to a private sale as provided above in this SECTION
5.8, if any of the Class B Stock shall not be freely
distributable to the public without registration under the
Securities Act at the time of any proposed sale pursuant to
this SECTION 5.8, then the Buyer shall not be required to
effect such registration or cause the same to be effected but,
in its discretion (subject only to applicable requirements of
law), may require that any sale hereunder (including a sale at
auction) be conducted subject to restrictions (i) as to the
financial sophistication and ability of any person permitted to
bid or purchase at sale, (ii) as to the content of legends to
be placed upon any certificates representing the Class B Stock
sold in such sale, including restrictions on future transfer
thereof, (iii) as to the representations required to be made by
each person bidding or purchasing at such sale relating to that
person's access to financial information about the Defaulting
Stock Seller and such person's intentions as to the holding of
the Class B Stock so sold for investment, for its own account,
and not with a view to the distribution thereof, and (iv) as to
such other matters as the Buyer may, in its discretion, deem
necessary or appropriate in order that such sale
(notwithstanding any failure so to register) may be effected in
compliance with laws affecting the enforcement of creditors'
rights and the Securities Act and all applicable state or other
jurisdictions' securities laws.
5.8.6 Each Class B Shareholder acknowledges that: (a) any sale
under the circumstances described in this SECTION 5.8 shall be
deemed to have been held in a manner which is commercially
reasonable, and (b) notwithstanding the legal availability of a
private sale or a sale subject to restrictions of the character
described above, the Buyer may, in its discretion, elect to
register under the Securities Act (or any applicable state
securities laws) in accordance with its rights under this
SECTION 5.8. In the event of any such sale under the
circumstances described in this SECTION 5.8, the Buyer shall
incur no responsibility or liability for selling all or any
part of the Class B Stock at a price which the Buyer may deem
reasonable under the circumstances, notwithstanding the
possibility that a substantially higher price might be realized
if the sales were deferred until after registration as
aforesaid.
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5.8.7 Each Class B Shareholder agrees that it will not at any
time plead, claim or take the benefit of any appraisal,
valuation, stay, extension, moratorium or redemption law now or
hereafter in force in order to prevent or delay the enforcement
of this Agreement, or the absolute sale of the whole or any
part of the Class B Stock owned by a Defaulting Stock Seller or
the possession thereof by any purchaser at any sale hereunder,
and each Class B Shareholder waives the benefit of all such
laws to the extent it lawfully may do so. Each Class B
Shareholder agrees that it will not interfere with any right,
power and remedy of the Buyer provided for in this Agreement or
now or hereafter existing at law or in equity or by statute or
otherwise, or the exercise or beginning of the exercise by the
Buyer of any one or more of such rights, powers or remedies. No
failure or delay on the part of the Buyer to exercise any such
right, power or remedy and no notice or demand which may be
given to or made upon a Defaulting Stock Seller by the Buyer
with respect to any such remedies shall operate as a waiver
hereof, or limit or impair the Buyer's right to take any action
or to exercise any power or remedy hereunder, without notice or
demand, or prejudice its rights as against the Defaulting Stock
Seller in any respect.
5.8.8 Notwithstanding any other provision of this Agreement,
any exercise of a remedy or other action taken or proposed to
be taken by any party hereunder which would affect the
operations, voting or other control of or constitute an
attributable interest or cross-interest in the Company, shall
be pursuant to Section 310 of the Communications Act, as
amended from time to time, to Section 73.3555 of the FCC's
Rules, as may be amended from time to time, to any applicable
state laws and to the applicable policies, rules and
regulations thereunder, and if and to the extent required
thereby, subject to the prior approval of the FCC.
5.9 MEASUREMENT OF DAMAGES. The Class B Shareholders
acknowledge that since the obligations secured hereby are the Class B
Shareholders' obligations to transfer ownership of the Class B Stock to Buyer,
therefore if any Class B Stock is not transferred to Buyer the measure of
Buyer's damages is the full value of the Class B Stock not transferred to Buyer
less the Stock Purchase Price for such Class B Stock, plus any other damages
incurred by Buyer resulting from such breach. The Class B Shareholders
acknowledge that if any Class B Stock owned by a Defaulting Stock Seller is
liquidated in enforcement of Buyer's security interest in such Class B Stock,
Buyer's Damages shall be at least equal to the entire proceeds received from the
sale of such Class B Stock upon foreclosure, plus the costs and expenses of
Buyer in enforcing such security interest, less the Stock Purchase Price
attributable to such Class B Stock, and that if the proceeds upon foreclosure
are less than the fair market value of such Class B Stock sold in foreclosure,
Buyer's damages may exceed the aforesaid amount.
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5.10 EXTENT OF OBLIGATION. The Class B Shareholders
hereby agree that from time to time, without notice or demand and without
affecting or impairing in any way the rights of Buyer with respect to the Class
B Stock or the obligations of Class B Shareholders hereunder, Buyer may: (a)
exchange, enforce, waive, release, apply and direct the order or manner of sale
of any and all collateral for the any Class B Shareholder's Obligation, as
Buyer, in its sole discretion, may determine, and/or (b) release or substitute
any one or more endorsers or guarantors. The Class B Shareholders waive any
right to require Buyer to: (a) proceed against any endorsers or guarantors, (b)
proceed against or exhaust any security held for the Obligation, or (c) pursue
any other remedy in Buyer's power whatsoever. The Class B Shareholders hereby
waive notice of acceptance of this Agreement, and also presentment, demand,
protest and notice of dishonor of any Obligation, and promptness in commencing
suit against any party thereto or liable thereon, and in giving notice to or of
making any claim or demand hereunder upon the Class B Shareholders. No act or
omission of any kind on Buyer's part in the premises shall in any event affect
or impair this Agreement.
5.11 INDEMNIFICATION BY DEFAULTING STOCK SELLER. Each
Defaulting Stock Seller agrees to indemnify and hold the Buyer harmless from and
against any taxes, liabilities, claims and damages, including reasonable
attorney's fees and disbursements, and other expenses incurred or arising by
reason of the taking or the failure to take action by the Buyer, in good faith,
under this Agreement and in respect of any transactions effected in connection
with this Agreement, including, without limitation, any taxes payable in
connection with the delivery or registration of any of the Class B Stock owned
by a Defaulting Stock Seller as provided herein. The obligations of a Defaulting
Stock Seller under this Section shall survive the termination of this Agreement.
SECTION 6
PERFORMANCE OF THE ESCROW AGENT
6.1 LIMITATION OF LIABILITY. The duties and obligations
of the Escrow Agent are only those expressly set forth in this Agreement. Escrow
Agent shall not be liable to anyone for any damages, losses, or expenses which
they may incur as a result of any act or omission of Escrow Agent, unless such
damages, losses, or expenses are caused by Escrow Agent's willful misconduct or
gross negligence. Accordingly, Escrow Agent shall not incur any such liability
with respect to (a) any action taken or omitted in good faith upon the advice of
counsel or counsel for any other party hereto, given with respect to any
question relating to the duties and responsibilities of Escrow Agent under this
Agreement or (b) any action taken or omitted in reliance upon any instrument,
including execution, or the identity or authority of any person executing such
instrument, its validity and effectiveness, but also as to the truth and
accuracy of any information contained therein which Escrow Agent shall, in good
faith, believe to be genuine, to have been signed by a proper person or persons
and to conform to the provisions of this Agreement. Escrow Agent shall not be
bound in any way by any contract or agreement between other parties
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hereto, whether or not it has knowledge of any such contract or agreement or of
its terms or conditions.
6.2 INDEMNITY OF THE ESCROW AGENT.
6.2.1 INDEMNIFICATION. The Escrow Agent Indemnifying Parties
jointly and severally, hereby agree to indemnify and hold
harmless Escrow Agent against any and all costs, losses,
claims, damages, liabilities and expenses, including reasonable
costs of investigation, court costs, and attorney's fees and
disbursements, which may be imposed upon Escrow Agent in
connection with its acceptance of appointment as Escrow Agent
hereunder, including any litigation arising from this Agreement
involving the subject matter hereof, and all such costs,
expenses and disbursements shall be for the account of and
shall be borne and paid as provided in SECTION 2.2 as a
condition to termination of the Agreement, except that there
shall be no indemnification for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting
from the willful misconduct or gross negligence of the Escrow
Agent.
6.2.2 SECURITY. As security for the indemnification obligations
of the Escrow Agent by the Indemnifying Parties, the Escrow
Agent is hereby granted a lien upon all assets held by Escrow
Agent hereunder, which lien shall be prior to all other liens
upon or claims against such assets.
6.2.3 SHARING OF COSTS. Any amounts that become payable to the
Escrow Agent in accordance with SECTION 6 shall be borne and
paid one-half by Buyer and one-half by the Class B Shareholders
except (i) if such amounts become payable to the Escrow Agent
due to the action or failure to act of Buyer, all such amounts
shall be borne and paid entirely by Buyer, or (ii) if such
amounts become payable to the Escrow Agent due to the action or
failure to act of the Class B Shareholders or the Sellers
Representative, all such amounts shall be borne and paid
entirely by the Class B Shareholders. The indemnification
obligations to the Escrow Agent shall be paid directly by the
party responsible pursuant to this SECTION 6.2.3.
6.3 DISPUTES.
6.3.1 DISAGREEMENTS. In the event of any disagreement among any
of the parties to this Agreement, or among them or any other
person resulting in adverse claims and demands being made in
connection with or from any property involved herein or
affected hereby, Escrow Agent shall be entitled to refuse to
comply with any such claims or demands as long as such
disagreement may continue, and in so refusing, shall make no
delivery or other disposition of any property then held by it
under this Agreement, and
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in so doing the Escrow Agent shall be entitled to continue to
refrain from acting until (i) the right of adverse claimants
shall have been finally settled by binding arbitration or
finally adjudicated in a court assuming and having jurisdiction
of the property involved herein or affected or (2) all
differences shall have been adjusted by agreement and Escrow
Agent shall have been notified in writing of such agreement
signed by the parties hereto.
6.3.2 INTERPLEADER. In the event of such disagreement, Escrow
Agent may, but need not, tender into the registry or custody of
any court of competent jurisdiction all money or property in
its hands under the terms of this Agreement, together with such
legal proceedings as it deems appropriate and thereupon to be
discharged from all further duties under this Agreement. The
filing of any such legal proceeding shall not deprive Escrow
Agent of its compensation earned prior to such filing.
6.3.3 SECURITY TO BE PROVIDED. Escrow Agent shall have no
obligation to take any legal action in connection with this
Agreement or towards its enforcement, or to appear in,
prosecute or defend any action or legal proceeding which would
or might involve it in any cost, expense, loss or liability
unless security and indemnity, as provided in SECTION 6.2 of
this Agreement, shall be furnished.
SECTION 7
VACANCIES
7.1 RESIGNATION OF THE ESCROW AGENT. The Escrow Agent
may at any time resign by giving at least thirty (30) days' prior written notice
of such resignation to the Buyer and the Sellers Representative. In such event,
Buyer with the approval of the Sellers Representative, which approval shall not
be unreasonably withheld, will promptly select another bank in Cincinnati, Ohio,
insured by the Federal Deposit Insurance Corporation, and with assets of not
less than $50,000,000 which will be appointed as successor escrow agent and
Buyer and the Class B Shareholders shall enter into an agreement with such other
bank, in substantially the form of this Agreement. From and after the effective
date of such resignation or appointment, the Escrow Agent shall not be obligated
to perform any of the duties of the escrow agent hereunder and will not be
liable for any nonperformance thereof nor for any act or failure to act
whatsoever on the part of any successor escrow agent. If a substitute for the
Escrow Agent hereunder shall not have been selected, as aforesaid, the Escrow
Agent shall be entitled to petition any court for the appointment of a
substitute for it hereunder, or in the alternative, it may transfer and deliver
the Escrow Fund to or upon the order of any court; provided, however, until such
time as a substitute has been appointed as herein provided or a court has
otherwise ordered, the Escrow Agent shall continue to serve hereunder.
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7.2 SUCCESSOR TO THE ESCROW AGENT. Any corporation
resulting from any merger or consolidation to which the Escrow Agent shall be a
party, or any corporation in any manner succeeding to all or substantially all
of the business of the Escrow Agent, provided such corporation shall be a
banking corporation organized under the laws of the United States of America
with trust powers, shall be the successor agent hereunder without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.
7.3 REMOVAL OF THE ESCROW AGENT. In the event Buyer and
the Sellers Representative consent to the removal of the Escrow Agent and the
appointment of a successor escrow agent, the Escrow Agent shall transfer and
deliver the Escrow Fund to such successor escrow agent whereupon the Escrow
Agent shall be discharged from all further duties hereunder.
SECTION 8
TERMINATION
This Agreement shall terminate when all Class B Stock and the Stock
Purchase Price are distributed as provided in SECTION 4.
SECTION 9
GENERAL PROVISIONS
9.1 ENTIRE AGREEMENT; AMENDMENT. This Agreement
contains the entire agreement among the parties hereto and supersedes all prior
oral or written agreements, promises, representations, commitments or
understandings with respect to the matters provided for herein. This Agreement
may be modified or amended only by a writing duly executed by Buyer and the
Sellers Representative, which modification or amendment shall be binding upon
all of the parties hereto.
9.2 NO INTENDED THIRD PARTY BENEFICIARIES. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give to any person or entity other than the parties hereto and their successors
or permitted assigns, any rights or remedies under or by reason of this
Agreement.
9.3 ASSIGNMENT AND BINDING EFFECT. This Agreement and
the rights and obligations of any party hereunder may not be assigned by any
Class B Shareholder without the prior written consent of Buyer. Buyer shall have
the right to assign and/or delegate all or any portion of its rights and
obligations under this Agreement provided that no such assignment and/or
delegation shall relieve Buyer of its obligations hereunder in the event that
its assignee fails to perform the obligations delegated. All covenants,
agreements, statements, representations, warranties and indemnities in this
Agreement by and on behalf
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of any of the parties hereto shall bind and inure to the benefit of their
respective successors and permitted assigns of the parties hereto.
9.4 WAIVERS. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a continuing waiver, and no waiver
shall be binding unless executed in writing by the party making the waiver.
9.5 NOTICES. All notices, demands or other
communications which may be or are required to be given by any party to any
other party pursuant to this Agreement, shall be in writing and shall be mailed
by certified mail, return receipt requested, postage prepaid, or transmitted by
hand delivery, national overnight express, telegram or facsimile transmission,
addressed as follows:
9.5.1 If to Buyer: Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Randy Michaels
Fax: (513) 621-6087
with a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Fax: (513) 651-3836
9.5.2 If to the Class B Shareholders, to Sellers Representative as
follows:
John T. Lynch
1508 Uno Verde Court
Solana Beach, California 92075
Fax: (619) 236-1048
with a copy (which shall not constitute notice) to:
Gray, Cary Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101-4297
Attention: J. Terence O'Malley, Esq.
Fax: (619) 236-1048
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<PAGE> 21
and with a copy (which shall not constitute notice)
to:
Frank A. De Francesco
13202 Lomas Verdes Drive
Poway, California 92064
Fax: (619) 673-9049
9.5.3 If to Escrow Agent, as follows:
The Fifth Third Bank
Corporate Trust Department
38 Fountain Square Plaza
Cincinnati, Ohio 45263
Attention: Randolph J. Stierer, Vice President
Fax: (513) 744-6785
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or telefax
transmission log being deemed conclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
9.6 SELLERS REPRESENTATIVE. The Class B Shareholders
hereby appoint Lynch as their agent and representative (the "Sellers
Representative") for the purposes of representing, acting for and binding the
Class B Shareholders for all purposes of this Agreement, including, without
limitation: (i) amending, restating, supplementing, terminating or otherwise
modifying this Agreement or making any waivers on behalf of the Class B
Shareholders pursuant hereto; and (ii) settling of any controversies or
disagreements between Buyer and/or Class B Shareholders hereunder; and (iii)
receiving or giving any notices to or from Class B Shareholders hereunder; and
(iv) communicating on behalf of Class B Shareholders with the Buyer and/or
Escrow Agent as to any matters relating to this Agreement. Buyer and Escrow
Agent shall be entitled to presumptively rely without further inquiry upon all
acts of, and communications from, Sellers Representative as being the authorized
actions and communications of the Sellers Representative as approved by the
Class B Shareholders.
9.7 HEADINGS. The article and section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
9.8 SEVERABILITY. Wherever possible, each provision of
this Agreement will be interpreted so as to be effective and valid under
applicable law, but if any provision of this Agreement is prohibited by or
invalid under such law, such provision will be ineffective
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<PAGE> 22
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Agreement.
9.9 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Ohio (but not
including the choice-of-laws rules thereof).
9.10 COUNTERPARTS; EXECUTION. This Agreement may be
executed in as many counterparts as may be required, and each such counterpart
hereof shall be deemed to be an original instrument, but all such counterparts
together shall constitute but a single agreement.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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<PAGE> 23
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused this Agreement to be executed on its behalf, as of the
date first above written.
JACOR COMMUNICATIONS, INC. NOBLE BROADCAST GROUP, INC.
By:____________________________ By:___________________________
Its:___________________________ Its:__________________________
______________________________ ______________________________
JOHN T. LYNCH PHILLIP H. BANKS, TRUSTEE
______________________________ THE FIFTH THIRD BANK
FRANK A. DE FRANCESCO
______________________________ By:___________________________
WILLIAM R. ARBENZ Its:__________________________
______________________________
THOMAS R. JIMENEZ
________________________________________
JOHN T. LYNCH, AS SELLERS REPRESENTATIVE
[Signature Page to Stock Escrow and Security Agreement]
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EXHIBIT 1.1.40
TRUST AGREEMENT
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EXHIBIT A
FEE SCHEDULE FOR
STOCK ESCROW AND SECURITY AGREEMENT
FEBRUARY 6, 1996
JACOR COMMUNICATIONS, INC.
RE: NOBLE BROADCAST GROUP, INC.
ACCEPTANCE FEE & 1ST YEAR FEE $7,500.00
INCLUDES ANTICIPATED LEGAL FEES FOR INITIAL REVIEW.
ANNUAL ADMINISTRATION FEE (AFTER 1ST YEAR): $5,000.00
All out-of-pocket expenses deemed necessary and incurred in the acceptance or
the administration of this account by Fifth Third Bank, including but not
limited to attorney's and agent's fees, extraordinary time and expenses of Fifth
Third Bank, postage, supplies, long distance telephone charges, wire transfer
fees, travel, redemption expenses, and courier expenses, are to be reimbursed in
addition to payment for services rendered. Fifth Third Bank also charges a cash
management fee on its' taxable Fountain Square Funds in the amount of $.30 per
$1,000 held per month. Fees for activities not specifically contemplated herein
shall be additional. The acceptance of this account and fees are subject to
Fifth Third Bank's review and approval of documents governing this issue.
25
<PAGE> 1
TRUST AGREEMENT
BY AND BETWEEN
JOHN T. LYNCH, CATHERINE S. LYNCH, FRANK A. DEFRANCESCO,
CHRIS DEFRANCESCO, THOMAS R. JIMENEZ, ANITA JIMENEZ,
WILLIAM R. ARBENZ AND GAYLE ARBENZ,
AS TRUSTORS,
AND
PHILLIP H. BANKS,
AS TRUSTEE,
DATED AS OF
FEBRUARY 20, 1996
<PAGE> 2
TRUST AGREEMENT
THIS TRUST AGREEMENT, made as of February 20, 1996, by and
between the Trustors, JOHN T. LYNCH ("LYNCH"), CATHERINE S. LYNCH ("MRS.
LYNCH"), FRANK A. DEFRANCESCO ("DEFRANCESCO"), CHRIS DEFRANCESCO [MRS.
DEFRANCESCO], THOMAS R. JIMENEZ ("JIMENEZ"), ANITA JIMENEZ [MRS. JIMENEZ],
WILLIAM R. ARBENZ ("ARBENZ") and GAYLE ARBENZ [MRS. ARBENZ] (except as provided
in Article 2, each of the foregoing individuals are sometimes referred to herein
individually as a "Trustor", and collectively referred to as the "Trustors,"
unless the context otherwise requires) and the Trustee, PHILLIP H. BANKS, under
the following circumstances:
A. Certain of the Trustors are parties to a Stock Purchase and
Warrant Redemption Agreement (the "Stock Agreement") of even date herewith by
and among: (1) Jacor Communications, Inc., an Ohio corporation ("Buyer"); (2)
Prudential Venture Partners II, L.P., a limited partnership ("Prudential"); (3)
Northeast Ventures, II, a limited partnership ("Northeast"); (4) LYNCH; (5)
DEFRANCESCO; (6) JIMENEZ; (7) ARBENZ; (8) CIHC, Incorporated, a Delaware
corporation ("CIHC"); (9) Bankers Life Holding Corporation, a Delaware
corporation ("BLH"); and (10) Noble Broadcasting Group, Inc., a Delaware
corporation ("Company").
B. Certain of the Trustors and the Trustee also intend to enter
into a Stock Escrow and Security Agreement (the "Escrow Agreement") to be dated
as of February __, 1996, among (1) Buyer; (2) Prudential; (3) Northeast; (4)
LYNCH; (5) DEFRANCESCO; (6) JIMENEZ; (7) ARBENZ; (8) Company, the Trustee and
(9) The Fifth Third Bank, an Ohio banking corporation (the "Escrow Agent").
C. LYNCH, DEFRANCESCO, JIMENEZ AND ARBENZ (each referred to
herein individually as a "Class B Shareholder", and collectively as the "Class B
Shareholders") are the record and beneficial owners of 100% of the issued and
outstanding shares of the Class B common stock of the Company (the "Class B
Stock"), and Buyer desires to acquire all of the Class B Stock, and the Class B
Shareholders desire that Buyer acquire all of the Class B Stock, upon and
subject to the terms and conditions of the Stock Agreement.
D. As a condition to purchasing the Class B Stock, Buyer has
required that the Class B Shareholders place their Class B Stock in the escrow
created pursuant to the Escrow Agreement.
E. To further ensure that the Class B Stock is transferred at
the Stock Closing (as defined in the Stock Agreement) the Trustors have agreed
to transfer any
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interest they may have in the Class B Stock to the Trustee pursuant to this
Trust Agreement.
ARTICLE 1
CREATION OF TRUST; DESIGNATION OF TRUSTEE
As of the above date, Trustor has designated PHILLIP H. BANKS
as Trustee of all property which the Trustee may receive, to hold the same (the
"Trust Estate") in trust, on the terms and conditions of this Trust Agreement.
The Trust Estate shall initially consist of Ten Dollars ($10.00). Upon
receipt of FCC Approval of the transfer of the Class B Stock to the Trustee (as
defined in the Escrow Agreement) all of the Trustors' Class B Stock shall be
registered in the name of the Trustee by the Escrow Agent and shall become part
of the Trust Estate subject to irrevocable proxies for all voting purposes in
favor of LYNCH, DEFRANCESCO, JIMENEZ AND ARBENZ in the form of the Irrevocable
Proxy Agreement attached as Exhibit "A" (the "Proxy"). The Trustee shall hold,
administer, and distribute the Trust Estate in compliance with all of the terms
and conditions of this Trust Agreement, the Stock Agreement and the Escrow
Agreement.
ARTICLE 2
DIVISION OF TRUST ESTATE
2.1 Any property held as part of the Trust Estate which was
contributed by LYNCH or MRS. LYNCH shall be held by the Trustee as a separate
trust for the benefit of LYNCH and MRS. LYNCH pursuant to the provisions of
Article 3 below. For purposes of that separate trust, LYNCH and MRS. LYNCH shall
be referred to collectively as the "Trustor," and all distributions of income,
capital gains and eventually , of principal to the Trustor shall be made in
equal shares to LYNCH and MRS. LYNCH.
2.2 Any property held as part of the Trust Estate which was
contributed by DEFRANCESCO and MRS. DEFRANCESCO shall be held by the Trustee as
a separate trust for the benefit of DEFRANCESCO and MRS. DEFRANCESCO pursuant to
the provisions of Article 3 below. For purposes of that separate trust,
DEFRANCESCO and MRS. DEFRANCESCO shall be referred to collectively as the
"Trustor," and all distributions of income, capital gains and eventually, of
principal to the Trustor shall be made in equal shares to DEFRANCESCO and MRS.
DEFRANCESCO.
2.3 Any property held as part of the Trust Estate which was
contributed by JIMENEZ and MRS. JIMENEZ shall be held by the Trustee as a
separate trust for the benefit of JIMENEZ and MRS. JIMENEZ pursuant to the
provisions of Article 3 below. For purposes of that separate trust, JIMENEZ and
MRS. JIMENEZ shall be referred to collectively as the "Trustor," and all
distributions of income, capital gains and eventually, of principal to the
Trustor shall be made in equal shares to JIMENEZ and MRS. JIMENEZ.
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2.4 Any property held as part of the Trust Estate which was
contributed by ARBENZ and MRS. ARBENZ shall be held by the Trustee as a separate
trust for the benefit of ARBENZ and MRS. ARBENZ pursuant to the provisions of
Article 3 below. For purposes of that separate trust, ARBENZ and MRS. ARBENZ
shall be referred to collectively as the "Trustor" and all distributions of
income, capital gains and eventually, of principal to the Trustor shall be made
in equal shares to ARBENZ and MRS. ARBENZ.
2.5 It is the intention of the Trustors that the Trustors shall
be treated as the owners of their separate trusts for federal income tax
purposes pursuant to the provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), or the corresponding provision of any subsequent federal
tax law, and the provisions of this Trust Agreement shall be interpreted
accordingly.
ARTICLE 3
SEPARATE TRUST FOR TRUSTOR
Any share set aside for any Trustor shall be held as a separate
trust on the following terms and conditions.
3.1 DISTRIBUTION OF INCOME AND CAPITAL GAINS. The
Trustee shall pay all of the net income of this trust, including any interest
paid by Buyer on the unpaid stock purchase price pursuant to the Stock
Agreement, and all capital gains of the trust estate to or for the benefit of
the Trustor, at least annually.
3.2 DISTRIBUTION OF PRINCIPAL. The Trustee shall pay to
or for the benefit of the Trustor as soon as reasonably possible after receipt,
any prepayment of the stock purchase price made by Buyer pursuant to the Stock
Agreement.
3.3 POWERS OF TRUSTOR DURING TERM OF TRUST. During the
term of the trust, the Trustor shall, with respect to his or her individual
rights under California law, have the following rights and powers:
3.3.1. Subject to the provisions of the Stock Agreement and
the Escrow Agreement, to direct in a writing delivered to the Trustee that any
income or principal of the Trust Estate which may become payable to the Trustor
under the terms of this trust be paid outright or in trust and, subject to the
terms and conditions of this Trust Agreement, to such persons and upon such
additional terms and conditions as the Trustor shall direct;
3.3.2. To the extent permitted by the Stock Agreement and
the Escrow Agreement, to direct the Trustee to take actions, or to execute
documents (including the Escrow Agreement), which the Trustor believes shall be
necessary or
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appropriate in connection with the Stock Agreement and the Escrow Agreement or
any related documents;
3.3.3. To the extent permitted by the Stock Agreement and
the Escrow Agreement, to assign the Trustor's interest in the Trust Estate; and
3.3.4. To the extent permitted by the Stock Agreement and
the Escrow Agreement, to make gifts of the Trustor's interest in the Trust
Estate to any person by an instrument in writing signed by the Trustor and
delivered to the Trustee.
3.4 TERMINATION OF TRUST; RETURN OF TRUSTOR'S ASSETS.
Upon the "Terminating Event," which shall be the earliest to occur of (i) the
close of the transaction described in the Stock Agreement and the Escrow
Agreement; or (ii) the cancellation and termination of the Stock Agreement and
the Escrow Agreement by the parties thereto; or (iii) the passage of eight (8)
years after the date of execution of the Stock Agreement, this trust shall
terminate and all of the assets then held in each separate trust hereunder shall
be returned to the Trustors, subject to the prior receipt of requisite
regulatory approvals, and shall be distributed by the Trustee to the respective
Trustor, free of trust. Except as otherwise provided herein, no principal
distribution shall be made by the Trustee from the Trust Estate until the
occurrence of the Terminating Event.
3.5 POWER OF APPOINTMENT. Upon the death of any Trustor
prior to the Terminating Event as provided in Article 3.3, any portion of such
deceased Trustor's remaining income, principal and reversionary interest in
such deceased Trustor's respective trust shall be distributed (but not until
permitted by the terms hereof) to whomsoever the Trustor shall have appointed,
including to the Trustor's own estate, outright or in trust, by the last dated
instrument delivered to the Trustee, including a Will or any Codicil thereto
(whether or not admitted to probate), specifically referring to and exercising
this power of appointment. The right to appoint hereby granted is a general
power of appointment, unrestricted as to the class of appointees, and shall be
exercisable by the Trustor alone and in all events. The Trustee shall not be
bound to inquire into any such appointment, but shall make distributions as so
directed by the Trustor, at such time as distributions shall be permitted by the
terms hereof. Any portion of a deceased Trustor's respective trust not
effectively appointed shall be distributed (but not until permitted by the terms
hereof) to the person or persons who shall be appointed to administer the estate
of such deceased Trustor, to be disposed of as part of such estate.
ARTICLE 4
COMPLIANCE WITH RULE AGAINST PERPETUITIES
Notwithstanding anything to the contrary herein contained, if
any trust, subtrust or other fund held hereunder shall not have vested according
to law within the later to occur of (i) a period of 21 years after the death of
the last survivor of the Trustors
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and Trustors' issue living at the date of this Trust Agreement or (ii) ninety
(90) years after the date of this Trust Agreement, then, on the day before the
end of such period, such trust, subtrust or fund shall nevertheless vest in and
be distributed to the beneficiaries thereof. If there is more than one person
(other than Trustors) then included in any group entitled to receive income from
that trust, that trust, subtrust or fund shall be distributed as follows: one
share to each living beneficiary of that trust who shall be on the highest
generation level with reference to a Trustor; and one share for each deceased
person on that generation level having issue then living, which share shall be
further divided into separate subshares for that issue, on a per stirpes basis,
being thereafter distributed to such issue.
ARTICLE 5
POWERS OF THE TRUSTEE
Subject to the terms and conditions of the Stock Agreement and
the Escrow Agreement and subject to the supervening powers specifically
enumerated in this Article 5, the Trustee shall have all the powers and duties
described in Division 9 of the California Probate Code. Without limiting the
generality of the foregoing, the Trustee shall have expressly the following
powers:
5.1 TRUST ASSETS AND INVESTMENTS. As provided in
Article 3.3, and upon FCC Approval of the transfer of the Class B Stock to the
Trustee, the Trustee shall own all of the Trustors' Class B Stock until the
receipt of the Stock Purchase Price (as defined in the Stock Agreement and as
provided for in the Escrow Agreement) upon the close of the transaction
described in the Stock Agreement, or until the cancellation and termination
thereof by the parties thereto or until the passage of eight (8) years after the
date of execution of the Stock Agreement. The Trustee shall be under no
obligation or duty to diversify the investments of the trust. The Trustee shall
take no action inconsistent with the directions given to the Trustee pursuant to
the Proxy.
5.2 DISTRIBUTIONS IN KIND AND NON-PRO RATA. Except as
otherwise provided herein, in any case in which the Trustee is required pursuant
to the provisions of this Trust Agreement to divide any trust property into
parts or shares for the purpose of distribution or otherwise, the Trustee may,
in the Trustee's discretion, make such division or distribution in cash, in
kind, including undivided interests in any property, or partly in cash and
partly in kind, and to make non-pro rata distributions whenever assets are
distributed in kind. For purposes of such division or distribution the Trustee
shall determine the current value of the trust properties reasonably and in good
faith.
ARTICLE 6
IRREVOCABLE TRUST
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This is an irrevocable trust, and no amendment to or revocation
of this Trust Agreement shall be effective without the written consent of all of
the Trustors and all of the parties to the Stock Agreement. No amendment shall
increase the duties or responsibilities of the Trustee, or affect the Trustee's
compensation, without the Trustee's written approval.
ARTICLE 7
DIRECTIONS TO TRUSTEE REGARDING CLASS B STOCK
7.1 The Trustee is directed to enter into the Escrow Agreement.
Upon the Stock Closing and receipt by the Trustee from the Escrow Agent of the
Stock Purchase Price, the Trustee shall distribute the Stock Purchase Price to
the separate Trustors in accordance with the rights of such separate Trustors
described in Article 2.
7.2 Upon receipt of FCC Approval of the transfer of the Class B
Stock to the Trustee and upon the preparation by the Escrow Agent of new share
certificates evidencing ownership of all the Class B Stock in the name of the
Trustee, the Trustee shall prepare a new Endorsement (as defined in the Escrow
Agreement) with respect to each share certificate registered in the name of the
Trustee, and such new Endorsement shall be tendered to the Escrow Agent and the
Escrow Agent shall substitute such Endorsement for the Endorsement previously
held by the Escrow Agent which was previously executed by the Class B
Shareholders at the time their Class B Stock was deposited with the Escrow
Agent.
ARTICLE 8
RESIGNATION OF THE TRUSTEE
8.1 Any Trustee serving hereunder may resign, as to any
separate trust or as to the entire Trust Estate, by delivering written notice of
intention to resign personally or by certified mail, return receipt requested,
to each then living Trustor and to all of the parties to the Stock Agreement.
8.2 Upon the resignation of any Trustee, as to any separate
trust or as to the entire Trust Estate, a successor Trustee shall be appointed
by a written instrument signed by all of the Trustors and by all of the parties
to the Stock Agreement.
8.3 Upon the payment and delivery to any successor Trustee of
all the property and assets of any separate trust or of the entire Trust Estate,
and after full settlement of accounts, the responsibilities and liabilities of
the terminating Trustee shall cease. No successor Trustee shall be required to
investigate the acts of any predecessor Trustee, nor be responsible for any of
the acts or omissions of any predecessor Trustee.
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ARTICLE 9
COMPENSATION OF THE TRUSTEE
9.1 The Trustors shall, as and when requested by the Trustee,
pay to the Trustee all costs, charges, taxes, damages and expenses, including
reasonable attorneys fees, as the Trustee may have earned, paid or incurred by
reason of the Trustee's performance of the Trustee's duties hereunder.
9.2 Upon full execution of this Trust Agreement and
registration of the Class B Stock in the name of the Trustee, the Trustors shall
pay to the Trustee the sum of Ten Thousand Dollars ($10,000.00). Upon the Stock
Closing, the Trustors shall pay to the Trustee the sum of Five Thousand Dollars
($5,000.00). If the Stock Closing does not occur until after April 15, 1997, the
Trustors shall thereafter pay to the Trustee the sum of Ten Thousand Dollars
($10,000.00) annually, until the Terminating Event. The Trustors shall also pay
to the Trustee reasonable compensation for any extraordinary services rendered
by the Trustee, including any litigation involving the Trust Estate.
ARTICLE 10
TRUST CONTROVERSY; HOLD HARMLESS; INDEMNITY
Should any controversy arise concerning the Trust Estate or should any
demands be made upon the Trustee which are inconsistent with the terms hereof,
the Trustee shall not be required to take any action, but may refrain from all
action until the matter is resolved by agreement or appropriate legal
proceedings, or may seek relief under the California Trust Law or file a suit in
interpleader or for declaratory relief. Should any such proceeding be brought by
the Trustee, the Trustors shall hold the Trustee harmless for all reasonable
costs and reasonable attorneys fees incurred by the Trustee in connection
therewith. In addition the Trustors jointly and severally agree to indemnify the
Trustee from any and all costs, losses, claims, damages, liabilities, and
expenses, including reasonable costs of investigation, court costs, and
reasonable attorneys fees which may be imposed upon the Trustee except that
there shall be no indemnification for any portion of such costs, losses, claims,
damages, liabilities, and expenses which result from a breach of trust or a
failure to meet the standard of care set forth in Division 9 of the California
Probate Code.
ARTICLE 11
GOVERNING LAW
The validity, construction and interpretation of this Trust Agreement
shall be governed by the laws of the State of California, now or hereafter
enacted, notwithstanding
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<PAGE> 9
the domicile or residence of the Trustee, any Trustor
or other beneficiary hereunder or the situs of any part of the Trust Estate.
ARTICLE 12
COUNTERPARTS; EXECUTION
This Trust Agreement may be executed in as many counterparts as
may be required, and each such counterpart hereof shall be deemed to be an
original instrument, but all such counterparts together shall constitute but a
single Trust Agreement.
-8-
<PAGE> 10
DECLARATION AND SIGNATURES
The Trustors and the Trustee declare that they have read the
foregoing Trust Agreement and that it correctly states the terms and conditions
under which the Trustee shall hold, administer, and distribute the Trust Estate.
The Trustors approve the Trust Agreement in all particulars, and the Trustee
consents to serving as Trustee in accordance with all the directions, terms and
conditions provided for herein.
Trustors:
Dated:___________________ ________________________________
JOHN T. LYNCH
Dated:___________________ ________________________________
CATHERINE S. LYNCH
Dated:___________________ ________________________________
FRANK A. DEFRANCESCO
Dated:___________________ ________________________________
CHRIS DEFRANCESCO
Dated:___________________ ________________________________
THOMAS R. JIMENEZ
Dated:___________________ ________________________________
ANITA JIMENEZ
Dated:___________________ ________________________________
WILLIAM R. ARBENZ
Dated:___________________ ________________________________
GAYLE ARBENZ
Dated:___________________ ________________________________
PHILLIP H. BANKS, Trustee
[SIGNATURE PAGE TO TRUST AGREEMENT
DATED AS OF FEBRUARY 20, 1996]
<PAGE> 11
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared JOHN T. LYNCH
__________ personally known to me
or
__________ proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
___________________________
(SEAL)
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<PAGE> 12
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared CATHERINE S. LYNCH
__________ personally known to me
or
__________ proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that she executed the same in her authorized capacity, and
that by her signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
_____________________________
(SEAL)
-11-
<PAGE> 13
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared FRANK A. DEFRANCESCO
__________ personally known to me
or
__________proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
-12-
<PAGE> 14
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared CHRIS DEFRANCESCO
__________ personally known to me
or
__________proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that she executed the same in her authorized capacity, and
that by her signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
-13-
<PAGE> 15
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared THOMAS R. JIMENEZ
__________ personally known to me
or
__________proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
-14-
<PAGE> 16
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared ANITA JIMENEZ
__________ personally known to me
or
__________proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that she executed the same in her authorized capacity, and
that by her signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
-15-
<PAGE> 17
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared WILLIAM R. ARBENZ
__________ personally known to me
or
__________proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
-16-
<PAGE> 18
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared GAYLE ARBENZ
__________ personally known to me
or
__________proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that she executed the same in her authorized capacity, and
that by her signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
-17-
<PAGE> 19
STATE OF CALIFORNIA )
) SS.
COUNTY OF SAN DIEGO )
On ______________, 1996, before me, the undersigned Notary Public, personally
appeared PHILLIP H. BANKS
__________ personally known to me
or
__________proved to me on the basis of satisfactory evidence
to be the person whose name is subscribed to the within instrument, and
acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person or the entity upon behalf of
which the person acted, executed the instrument.
WITNESS my hand and official seal.
____________________________
(SEAL)
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<PAGE> 1
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") is entered
into as of February 20, 1996, by and between JACOR COMMUNICATIONS, INC., an Ohio
corporation ("Buyer") and NOBLE BROADCASTING GROUP, INC. a Delaware corporation
("Company"), under the following circumstances:
A. Buyer and the Company entered into an Investment Agreement
of even date herewith (the "Investment Agreement"), pursuant to which Buyer has
purchased a Warrant to purchase shares of Class A Stock of the Company and was
granted certain registration rights.
B. The Class A Stock is convertible to Class B Stock pursuant
to the Certificate.
C. As a material inducement to Buyer to enter into the
Investment Agreement and to purchase the Warrant, the Company agreed to provide
the registration rights set forth in this Agreement, and the execution of this
Agreement is a condition to the "Closing" under the Investment Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises
herein made, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 CERTAIN DEFINITIONS. As used herein, the following terms
shall have the meanings ascribed to them below.
1.1.1 "ACCREDITED INVESTOR" has the meaning ascribed to it in
Regulation D of the Securities and Exchange Commission (Rule
501(a)) and the Ohio Securities law.
1.1.2 "CERTIFICATE" means the Restated Certificate of
Incorporation of the Company dated February 20, 1996 and
designating the terms of the Class A Shares and Class B Shares.
1.1.3 "COMMON SHARES" means the shares of common stock
authorized by the Certificate, including the Class A Shares,
Class B Shares, and any additional shares of common stock which
may be authorized in the future by the Company, and any stock
into which such Common Shares may hereafter be changed; and
shall also include stock of the Company of any other class
which is not preferred as to dividends or assets over any other
class of stock of the Company and which is not subject to
redemption.
<PAGE> 2
1.1.4 "COMMISSION" means the United States Securities and
Exchange Commission.
1.1.5 "CLASS A SHARES" means the Class A Common Shares having
the rights, restrictions, privileges and preferences set forth
in the Certificate.
1.1.6 "CLASS B SHARES" means the Class B Common Shares having
the rights, restrictions, privileges and preferences set forth
in the Certificate.
1.1.7 "INVESTMENT AGREEMENT" means the Investment Agreement of
even date herewith, by and between the Company and Buyer, or
any successor agreement between such parties.
1.1.8 "NASD" means National Association of Securities Dealers,
Inc.
1.1.9 "REGISTRABLE SECURITIES" means the following securities
which are owned by the Buyer or by a direct assignee of the
Buyer: (i) Class A Shares; (ii) Class B Shares; and (iii) the
stock or other securities of the Company issued and outstanding
in a stock split or reclassification of, or a stock dividend or
other distribution on or in substitution or exchange for, or in
a merger or consolidation involving the Company, or a sale of
all or substantially all of the Company's assets in exchange
for, or otherwise in connection with, the securities described
in clause (i) and (ii) above.
1.1.10 "SECURITIES ACT" means the Securities Act of 1933, as
amended from time to time.
1.1.11 "TRIGGERING EVENT" has the meaning ascribed to it in
[SECTION 10.1] of the Investment Agreement.
2
<PAGE> 3
ARTICLE 2
REGISTRATION OF STOCK
2.1.REQUIRED REGISTRATION. If, at any time after the earlier of
(i) the occurrence of a Triggering Event or (ii) the completion of an initial
public offering of securities by the Company, the Company shall receive a
written request therefor from the record holder or holders of an aggregate of at
least 30% of the shares of Registrable Securities, the Company shall as promptly
as possible prepare and file a registration statement under the Securities Act
covering the number of Common Shares of the Registrable Securities which are the
subject of such requests and shall use its best efforts to cause such
registration statement to become effective. In addition, upon the receipt of
such request, the Company shall promptly give written notice to all other record
holders of shares of Registrable Securities that such registration is to be
effected. The Company shall include in such registration statement such Common
Shares for which it has received written requests to register by such other
record holders of Registrable Securities within 30 days after the Company's
written notice to such other record holders. In the event that the holders of a
majority of the Registrable Securities for which registration has been requested
pursuant to this Section determine for any reason not to proceed with a
registration at any time before the registration statement has been declared
effective by the Commission, and such registration statement, if theretofore
filed with the Commission, is withdrawn with respect to the Common Shares
covered thereby, and the holders of such Common Shares agree to bear their own
expenses incurred in connection therewith and to reimburse the Company for the
expenses incurred by it attributable to the registration of such Common Shares,
then the holders of such Common Shares shall not be deemed to have exercised a
right to require the Company to register Common Shares pursuant to this Section
at the expense of the Company. If a registration statement filed by the Company
at the request of holders of Registrable Securities pursuant to this Section is
withdrawn at the initiative of the Company, then the holders of Registrable
Securities shall not be deemed to have exercised a right to require the Company
to register Common Shares pursuant to this Section.
The managing underwriter of an offering registered pursuant to
this Section shall be selected by the holders of a majority of the Registrable
Securities for which registration has been requested and shall be reasonably
acceptable to the Company. Without the written consent of the holders of a
majority of the Registrable Securities for which registration has been requested
pursuant to this Section, neither the Company nor any other holder of securities
of the Company may include securities in such registration if, in the good faith
judgment of the managing underwriter of such public offering, the inclusion of
such securities would interfere with the successful marketing of the Common
Shares or require the exclusion of any portion of the Common Shares to be
registered.
3
<PAGE> 4
If the managing underwriter determines that all shares proposed
for registration cannot be included in the public offering, then the shares to
be excluded shall be determined in the following order of priority (i) shares
proposed to be sold by officers and directors of the Company (other than
Registrable Securities), (ii) shares proposed to be sold, by the Company, (iii)
shares other than Registrable Securities held by third parties, and (iv) shares
held by Buyer.
The Company shall pay the expenses described in SECTION 2.5 for
the first three registration statements filed pursuant to this SECTION 2.1 which
become effective and the holders of the Registrable Securities included in any
subsequent registration statement filed pursuant to this SECTION 2.1 shall pay
the expenses associated herewith.
2.2. INCIDENTAL REGISTRATION. Each time the Company shall
determine to proceed with the actual preparation and filing of a registration
statement under the Securities Act in connection with the proposed offer and
sale for money of any of its securities by it or any of its security holders
(other than a registration statement on Forms S-4, S-8, or other limited purpose
form), the Company will give written notice of its determination to all record
holders of Registrable Securities. Upon the written request of a record holder
of any shares of Registrable Securities given within 30 days after receipt of
any such notice from the Company, the Company will, except as herein provided,
cause all Common Shares of the Registrable Securities, the record holders of
which have so requested registration thereof, to be included in such
registration statement, all to the extent requisite to permit the sale or other
disposition by the prospective seller or sellers of the Common Shares to be so
registered; provided, however, that nothing herein shall prevent the Company
from, at any time, abandoning or delaying any registration; provided, further,
however, that if the Company determines not to proceed with a registration after
the registration statement has been filed with the Commission and the Company's
decision not to proceed is primarily based upon the anticipated public offering
price of the securities to be sold by the Company, the Company shall promptly
complete the registration for the benefit of those selling security holders who
wish to proceed with a public offering of their securities and who bear all
expenses in excess of $25,000 incurred by the Company as the result of such
registration after the Company has decided not to proceed (provided that, at the
sole discretion of the holders of the Registrable Securities included in the
registration, such registration may count as a registration under SECTION 2.1
for which the Company will pay the expenses). If any registration pursuant to
this Section shall be underwritten, in whole or in part, the Company may require
that the Common Shares requested for inclusion pursuant to this Section be
included in the underwriting agreement on the same terms and conditions as the
securities otherwise being sold through the underwriters. If, in the good faith
judgment of the managing underwriter of such public offering, the inclusion of
all of the Common Shares originally covered by a request for registration would
reduce the number of shares to be offered by the Company or interfere with the
successful marketing of the shares of stock offered by the Company, the number
of Common Shares to be included in the underwritten public offering (other than
shares sought to be sold by the Company) may be reduced in accordance with the
priority schedule
4
<PAGE> 5
set forth in SECTION 2.1. Those Common Shares which are thus excluded from the
underwritten public offering shall be withheld from the market by the holders
thereof for a period, not to exceed 180 days, which the managing underwriter
reasonably determines is necessary in order to effect the underwritten public
offering.
2.3. SHORT FORM REGISTRATION. In addition to the registration
rights provided in SECTION 2.1 and SECTION 2.2, if the Company qualifies for the
use of Form S-3 or any similar registration form then in force, the Company
shall, at its expense, at the request of any holder of Registrable Securities,
from time to time, register Common Shares of the Registrable Securities on
behalf of such holder on such form. The Company shall give notice to the holders
of Registrable Securities who did not join in such request and afford them a
reasonable opportunity to do so. The holders of Registrable Securities may not
request more than two registrations under this SECTION 2.3.
2.4. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of SECTION 2.1, SECTION 2.2 or SECTION 2.3 to effect
the registration of shares of Registrable Securities under the Securities Act,
the Company will:
2.4.1 prepare and file with the Commission a registration
statement with respect to such securities, and use its best
efforts to cause such registration statement to become and
remain effective for such period as may be reasonably necessary
to effect the sale of such securities, not to exceed nine
months;
2.4.2 prepare and file with the Commission such amendments to
such registration statement and supplements to the prospectus
contained therein as may be necessary to keep such registration
statement effective for such period as may be reasonably
necessary to effect the sale of such securities, not to exceed
nine months;
2.4.3 furnish to the security holders participating in such
registration and to the underwriters of the securities being
registered such reasonable number of copies of the registration
statement, preliminary prospectus, final prospectus and such
other documents as such underwriters may reasonably request in
order to facilitate the public offering of such securities;
2.4.4 use its best efforts to register or qualify the
securities covered by such registration statement under such
state securities or blue sky laws of such jurisdictions as such
participating holders may reasonably request within 20 days
following the original filing of such registration statement,
except that the Company shall not for any purpose be required
to execute a general consent to service of process or to
qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
5
<PAGE> 6
2.4.5 notify the security holders participating in such
registration, promptly after it shall receive notice thereof,
of the time when such registration statement has become
effective or a supplement to any prospectus forming a part of
such registration statement has been filed;
2.4.6 notify such holders promptly of any request by the
Commission for the amending or supplementing of such
registration statement or prospectus or for additional
information;
2.4.7 prepare and file with the Commission, promptly upon the
request of any such holders, any amendments or supplements to
such registration statements or prospectus which, in the
opinion of counsel for such holders (and concurred in by
counsel for the Company), is required under the Securities Act
or the rules and regulations thereunder in connection with the
distribution of the Registrable Securities by such holder;
2.4.8 prepare and promptly file with the Commission and
promptly notify such holders of the filing of such amendment or
supplement to such registration statement or prospectus, as may
be necessary to correct any statements or omissions if, at the
time when a prospectus relating to such securities is required
to be delivered under the Securities Act, any event shall have
occurred as a result of which any such prospectus or any other
prospectus as then in effect would include an untrue statement
of a material fact or fail to state any material fact necessary
to make the statements therein, in the light of the
circumstances in which they were made, not misleading;
2.4.9 advise such holders, promptly after it shall receive
notice or obtain knowledge thereof, of the issuance of any stop
order by the Commission suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its
withdrawal, if such stop order should be issued;
2.4.10 not file any amendment or supplement to such
registration statement or prospectus to which a majority in
interest of such holders shall have reasonably objected on the
grounds that such amendment or supplement does not comply in
all material respects with the requirements of the Securities
Act or the rules and regulations thereunder, after having been
furnished with a copy thereof at least five (5) business days
prior to the filing thereof, unless in the opinion of counsel
for the Company the filing of such amendment or supplement is
reasonably necessary to protect the Company from any
liabilities under any applicable federal or state law, and such
filing will not violate applicable law; and
6
<PAGE> 7
2.4.11 at the request of any such holder, furnish on the
effective date of the registration statement and, if such
registration includes an underwritten public offering, at the
closing provided for in the underwriting agreement: (i)
opinions, dated such respective dates, of the counsel
representing the Company for the purposes of such registration,
addressed to the underwriters, if any, and to the holder or
holders making such request, covering such matters as such
underwriters and holder or holders may reasonably request; and
(ii) letters, dated such respective dates, from the independent
certified public accountants of the Company, addressed to the
underwriters, if any, and to the holder or holders making such
request, covering such matters as such underwriters and holder
or holders may reasonably request, in which letters such
accountants shall state (without limiting the generality of the
foregoing) that they are independent certified public
accountants within the meaning of the Securities Act and that
in the opinion of such accountants the financial statements and
other financial data of the Company included in the
registration statement or any amendment or supplement thereto
comply in all material respects with the applicable accounting
requirements of the Securities Act.
The holders of Registrable Securities participating in any
registration of securities pursuant to this Agreement agree to provide necessary
information for inclusion in the registration statement concerning themselves,
their securities and their proposed manner of distribution on a timely basis,
agree to act in good faith and to not unreasonably delay or hinder a
registration and, if the registration is underwritten, agree to enter into a
reasonably required underwriting agreement.
2.5. EXPENSES. With respect to the first three registrations
requested pursuant to SECTION 2.1 (except as otherwise provided in such Section
with respect to registrations voluntarily terminated at the request of the
requesting security holders) and with respect to each inclusion of shares of
Registrable Securities in a registration statement pursuant to SECTION 2.2, and
all registrations requested pursuant to SECTION 2.3, the Company shall bear the
following fees, costs and expenses: all registration, filing and NASD fees,
printing expenses, fees and disbursements of counsel and accountants for the
Company and all legal fees and disbursement and other expenses of complying with
state securities or blue sky laws of any jurisdictions in which the securities
to be offered are to be registered or qualified. Fees and disbursements of
counsel and accountants for the selling security holders, underwriting discounts
and commissions and transfer taxes for selling security holders and any other
expenses incurred by the selling security holders not expressly included above
shall be borne by the selling security holders.
2.6. INDEMNIFICATION.
2.6.1 The Company will indemnify and hold harmless each holder
of shares of Registrable Securities which are included in a
registration statement
7
<PAGE> 8
pursuant to the provisions of this ARTICLE 2 and any
underwriter (as defined in the Securities Act) for such holder
and each person, if any, who controls such holder or such
underwriter within the meaning of the Securities Act, from and
against any and all loss, damage, liability, cost and expense
to which such holder or any such underwriter or controlling
person may become subject under the Securities Act or
otherwise, insofar as such losses, damages, liabilities, costs
or expenses are caused by any untrue statement or alleged
untrue statement of any material fact contained in such
registration statement, any prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in
which they were made, not misleading; provided, however, that
the Company will not be liable in any such case to the extent
that any such loss, damage, liability, cost or expense arises
out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity
with information furnished by such holder, such underwriter or
such controlling person in writing specifically for use in the
preparation thereof.
2.6.2 Each holder of shares of Registrable Securities which are
included in a registration pursuant to the provisions of this
ARTICLE 2 will indemnify and hold harmless the Company, any
controlling person and any underwriter from and against any and
all loss, damage, liability, cost or expense to which the
Company or any controlling person and/or any underwriter may
become subject under the Securities Act or otherwise, insofar
as such losses, damages, liabilities, costs or expenses are
caused by any untrue or alleged untrue statement of any
material fact contained in such registration statement, any
prospectus contained therein or any amendment or supplement
thereto, or arise out of or are based upon the omission or the
alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein,
in light of the circumstances in which they were made, not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was so made in reliance upon and
in strict conformity with written information furnished by such
holder specifically for use in the preparation thereof.
2.6.3 Promptly after receipt by an indemnified party pursuant
to the provisions of SECTION 2.6.1 or SECTION 2.6.2 of this
Section of notice of the commencement of any action involving
the subject matter of the foregoing indemnity provisions, such
indemnified party will, if a claim thereof is to be made
against the indemnifying party pursuant to the provisions of
said SECTION 2.6.1 or SECTION 2.6.2, promptly notify the
indemnifying party of the
8
<PAGE> 9
commencement thereof; but the omission to so notify the
indemnifying party will not relieve it from any liability which
it may have to any indemnified party otherwise than hereunder.
In case such action is brought against any indemnified party
and it notifies the indemnifying party of the commencement
thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such
indemnified party; provided, however, if the defendants in any
action include both the indemnified party and the indemnifying
party and there is a conflict of interest which would prevent
counsel for the indemnifying party from also representing the
indemnified party, the indemnified party or parties shall have
the right to select separate counsel to participate in the
defense of such action on behalf of such indemnified party or
parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of said SECTION
2.6.1 or SECTION 2.6.2 for any legal or other expense
subsequently incurred by such indemnified party in connection
with the defense thereof, other than reasonable costs of
investigation, unless (i) the indemnified party shall have
employed counsel in accordance with the provision of the
preceding sentence; (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after
the notice of the commencement of the action; or (iii) the
indemnifying party has authorized the employment of counsel for
the indemnified party at the expense of the indemnifying party.
ARTICLE 3
RULE 144 AND 144A
The Company will, from and after such time as it has securities
registered pursuant to Section 12 of the Securities Exchange Act of 1934, or has
securities registered pursuant to the Securities Act, as such rules may be
amended from time to time, make timely filing of such reports as are required to
be filed by it with the Commission so that Rule 144 and 144A under the
Securities Act, as such rules may be amended from time to time, will be
available to the security holders of the Company who are otherwise able to take
advantage of the provisions of such Rule.
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ARTICLE 4
MISCELLANEOUS
4.1. NO INCONSISTENT AGREEMENTS. The Company will not on or
after the date of this Agreement enter into any agreement with respect to its
securities which shall grant registration rights to any person with respect to
securities of the Company which are senior to or are in conflict with (or which
will interfere with the practical realization of) the rights provided under this
Agreement, except with the prior written consent of the holders of a majority of
the Registrable Securities.
4.2. ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company
will not take any action, or permit any change to occur, with respect to the
Registrable Securities which would adversely affect the ability of the holders
of Registrable Securities to include such securities in a registration
undertaken pursuant to this Agreement or which would adversely affect the
marketability of such Registrable Securities in any such registration.
4.3. AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of the
holders of a majority of the Registrable Securities.
4.4. NOTICES. All notices, demands or other communications
which may be or are required to be given by any party to any other party
pursuant to this Agreement, shall be in writing and shall be mailed by certified
mail, return receipt requested, postage prepaid, or transmitted by hand
delivery, national overnight express, telegram or facsimile transmission,
addressed as follows:
4.4.1 If to if to a holder of Registrable Securities at the
most current address given by such holder to the Company in
accordance with the provisions of this SECTION 4.4, which
address initially is the address set forth below:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Randy Michaels
Fax: (513) 621-6087
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with a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Fax: (513) 651-3836
4.4.2 If to the Company:
Noble Broadcast Group, Inc.
4891 Pacific Highway
San Diego, California 92110
Attn: (619) 294-9393
with a copy (which shall not constitute notice) to:
Gray, Cary Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101
Attention: J. Terence O'Malley, Esq.
Fax: (619) 236-1048
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or telefax
transmission log being deemed conclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
4.5. HEADINGS. The article and section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
4.6. SEVERABILITY. Wherever possible, each provision of this
Agreement will be interpreted so as to be effective and valid under applicable
law, but if any provision of this Agreement is prohibited by or invalid under
such law, such provision will be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
4.7. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio (but not including
the choice-of-laws rules thereof).
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4.8. COUNTERPARTS; EXECUTION. This Agreement may be executed in
as many counterparts as may be required, and each such counterpart hereof shall
be deemed to be an original instrument, but all such counterparts together shall
constitute but a single agreement.
4.9. ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein, and the Prior Investors
hereby acknowledge that all other registration rights which they had prior to
the execution of this Agreement have been cancelled by virtue of this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused this Agreement to be executed on its behalf, as of the
date first above written.
JACOR COMMUNICATIONS, INC.
By:___________________________
Its:__________________________
NOBLE BROADCASTING GROUP, INC.
By:___________________________
Its:__________________________
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made this 20th day
of February, 1996 by and among: (A) CHESAPEAKE SECURITIES, INC., a Delaware
corporation ("Buyer"); (B) NOBLE BROADCAST OF SAN DIEGO, INC., a California
corporation ("Noble San Diego"); (C) SPORTS RADIO, INC., a California
corporation ("Sports Radio"); and (D) NOBLE BROADCAST CENTER, INC., a California
corporation ("Broadcast Center"). Noble San Diego, Sports Radio and Broadcast
Center are each sometimes referred to herein as a "Seller", and Noble San Diego,
Sports Radio and Broadcast Center are sometimes referred to collectively herein
as "Sellers".
RECITALS
WHEREAS, Sellers own and employ various assets in connection with the
provision of programming to, and the sale of advertising time for broadcast by,
radio stations XETRA-AM and XETRA-FM (together the "Stations" and each
individually a "Station") owned by Radiodifusora Del Pacifico, S.A. ("R.D.P.");
and
WHEREAS, Sellers desire to sell, and Buyer desires to purchase,
substantially all of the assets and assume certain obligations associated with
R.D.P.'s operation of the Stations, all on the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE 1
PURCHASE OF ASSETS
1.1 Transfer of Assets. On the terms and subject to the
conditions hereof and subject to Section 1.2, Sellers hereby sell, assign,
transfer, convey and deliver to Buyer, and Buyer hereby purchases and assumes
from Sellers, all of the right, title and interest of Sellers in and to
substantially all of the assets, properties, interests and rights of Sellers of
whatsoever kind and nature, real and personal, tangible and intangible, owned or
leased by Sellers as the case may be, wherever situated, which are associated
with the provision of programming to, and the sale of advertising time for
broadcast by, the Stations (the "Stations Assets"), including but not limited to
all of Sellers' right, title and interest in and to the assets, properties,
interests and rights described in this Section 1.1:
1.1.1 all equipment, office furniture and fixtures, office
materials and supplies, inventory, spare parts and all other tangible personal
property of every kind and description, and
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Sellers' rights therein, owned, leased or held by Sellers and used or useful in
connection with the operations of the Stations;
1.1.2 the following contracts (together, the "Operations
Contracts"): (A) all agreements for the sale of advertising time on the
Stations; (B) all contracts which are for consideration other than cash, such as
merchandise, services or promotional consideration arising in the ordinary
course of business consistent with the past practices of Sellers (including
without limitation, the trade agreement pursuant to which Noble San Diego
occupies Suites 280G and 280H at the Airport Executive Suites in Orange County,
California); and (C) miscellaneous contracts entered into in the ordinary course
of the Sellers business of providing programming to, and the sale of advertising
time for broadcast by, the Stations or owning the real property described in
Section 1.1.11 below;
1.1.3 all of the employment agreements for the employees of
Sellers;
1.1.4 the following real estate leases (the "Real Estate
Contracts"): (A) that certain Lease Agreement between Broadcast Media Center and
Noble San Diego, dated August 15, 1995, with respect to which Noble San Diego is
granted a subleasehold interest in certain office and studio space located at
6430 Sunset Blvd, Suite 650, Los Angeles, California; (B) Standard Industrial
Lease between Noble Broadcast Center, Inc. as Landlord and Noble Broadcast
Group, Inc. as Tenant, dated January 1, 1996, for three offices suites on the
second floor at 4891 Pacific Highway, San Diego, California; (C) Standard
Industrial Lease dated December 30, 1991 between Noble Broadcast Center, Inc. as
Landlord and Noble Broadcast of San Diego, Inc. as Tenant, for the first floor
(excluding conference room and lobby) for offices at 4891 Pacific Highway, San
Diego, California; (D) Standard Sublease dated December 30, 1991 between Noble
Broadcast of San Diego, Inc. as Sublessor and Sports Radio, Inc. as Sublessee,
for approximately 1,926 sq.ft. on the first and second floor of the office
building located at 4891 Pacific Highway, San Diego, California; and (E)
Standard Industrial Lease dated January 1, 1996 between Noble Broadcast Center,
Inc. as Landlord and Nova Marketing Group, Inc. as Tenant, dated January 1,
1996, for 2 rooms and 2 offices on the second floor at 4891 Pacific Highway, San
Diego, California.
1.1.5 the following contracts (collectively,the "Major
Contracts"): (A) Exclusive Sales Agency Agreement, dated May 12, 1978, between
R.D.P. and Noble San Diego (f/k/a Noble Multimedia Communications, Inc.), as
successor in interest to X-TRA Radio America, Inc., as amended by a certain
Amendment to Exclusive Sales Agency Agreement, dated as of November 1, 1986, by
and between R.D.P. and Noble San Diego (the "Sales Agency Agreement"); (B)
Option Agreement, dated January 13, 1986, by and among Ana T. Noble, Edward J.
Noble, Jr., Robert P. Noble, Monica Noble da Villabolos and Rudolfo Villabolos,
as Shareholders, and John T.
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Lynch, as Optionee; John T. Lynch assigned his rights in such Option Agreement
to Noble San Diego pursuant to an Assignment of Option Agreement, dated August
18, 1995; (C) Radio Broadcast Agreement, dated as of September 10, 1994, by and
between Sports Radio, Inc. and LAK Acquisition Corp. (the "Kings Contract"); (D)
Radio Broadcast/Sports Marketing Agreement, dated July 18, 1995, between Noble
Broadcast Group dba Cardinal Marketing Group and The Board of Trustees of The
Leland Stanford Junior University (the "Stanford Contract"); (E) Agreement,
dated as of June 1, 1994, between Sports Radio, Inc. and The Regents of the
University of California; (F) Agreement, dated September 10, 1986, as amended on
November 15, 1987, December 31, 1990 and March 18, 1993, between Chargers
Football Company and Sports Radio, Inc. as successor in interest to Noble
Broadcast of San Diego, Inc. (G) Program License Agreement, dated as of January
27, 1995, by and between Sagittarius Broadcasting Corporation, One Twelve, Inc.
and Noble Broadcast Group, Inc. (the "Stern Contract"); (H) Memorandum from Mike
Glickenhaus to David Freedman, Esq., dated September 28, 1994 regarding the Jim
Rome Show (Van Smack, Inc.); and (I) Skystar Channel Service Agreement between
GTE Spacenet Corporation and Noble Broadcast of San Diego, Inc., dated February
9, 1989, as amended by an Amendment No. 1 (letter dated February 2, 1989) and an
Amendment No. 2 dated September 22, 1992 (the "Skystar Contract"). The
Operations Contracts, the Employment Contracts, the Real Estate Contracts and
the Major Contracts are referred to collectively herein as the "Contracts" and
sometimes each individually as a "Contract."
1.1.6 all accounts receivable arising prior to the Closing Date
(as defined in Section 4.1) in connection with the operation of the Stations,
including but not limited to accounts receivable for advertising revenues for
programs and announcements performed prior to the Closing Date and other
broadcast revenues for services performed prior to the Closing Date (the
"Accounts Receivable");
1.1.7 all of Seller's rights in and to any call letters,
trademarks, trade names, service marks, franchises, copyrights, including
registrations and applications for registration of any of them, computer
software, programs and programming material of whatever form or nature, jingles,
slogans, the Stations' logos and all other logos or licenses to use same and all
other intangible property rights of Sellers, which are used or useful in
connection with the operation of the Stations;
1.1.8 all of Sellers' rights in and to all the files,
documents, records, and books of account relating to the operation of the
Stations or to the Stations Assets, including, without limitation, the Stations'
local public files, programming information and studies, technical information
and engineering data, news and advertising studies or consulting reports,
marketing and demographic data, sales correspondence, lists of advertisers,
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<PAGE> 4
promotional materials, credit and sales reports and filings with any federal,
state, local or foreign governmental or administrative agency, court, or other
authority (each, a "Governmental Entity" and collectively, "Governmental
Entities"), all written Contracts to be assigned hereunder, logs, software
programs and books and records relating to employees, financial, accounting and
operation matters (other than duplicate copies of such files, records, books of
account, written contracts, logs, software programs and books and records
relating to employees, financial, accounting and operational matters which
Seller may elect to retain ("Duplicate Records")), but excluding records
relating solely to any Excluded Asset (as hereinafter defined);
1.1.9 all of Seller's rights under manufacturers' and vendors'
warranties relating to items included in the Stations Assets and all similar
rights against third parties relating to items included in the Stations Assets;
1.1.10 all insurance proceeds or claims for insurance proceeds
made by Sellers relating to Stations Assets purchased by Buyer hereunder and
which proceeds have not been applied to the repair, replacement or restoration
of such Stations Assets by Sellers prior to the Closing Date (as hereinafter
defined);
1.1.11 all real property owned in fee by Sellers together with
all appurtenant easements thereunto and all structures, fixtures and
improvements located thereon, and which property includes only that real
property commonly known as 4891 Pacific Highway, San Diego, California;
1.1.12 all goodwill associated with the operation of the
Stations; and
1.1.13 except for Excluded Assets, such other assets,
properties, interests and rights owned by Sellers that are used or useful in
connection with the operation of the Stations.
Sellers agree that the Stations Assets are being
transferred to Buyer hereby free and clear of all debts, security interests,
mortgages, trusts, claims, pledges or other liens, liabilities, encumbrances
or rights of third parties whatsoever except liens for taxes not yet due and
payable and rights of third parties under the Contracts.
1.2 Excluded Assets. Notwithstanding anything to the contrary
contained herein, it is expressly understood and agreed that the Stations Assets
do not include the following assets along with all rights, title and interest
therein (the "Excluded Assets"):
1.2.1 all cash and cash equivalents of Sellers on hand and/or
in banks;
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1.2.2 with respect to each Seller, their corporate seal, minute
books, charter documents, corporate stock record books and such other books and
records as pertain to the organization, existence or share capitalization of
such Seller as well as any other records or materials relating to such Seller
generally and not involving or relating to the Stations Assets or the operation
or operations of the Stations;
1.2.3 contracts of insurance;
1.2.4 all pension, profit sharing or cash or deferred (Section
401(k)) plans and trusts and the assets thereof and any other employee benefit
plan or arrangement and the assets thereof, if any, maintained by Sellers;
1.2.5 any shares of stock of Sports Radio and Nobro S.C., a
Mexican corporation ("Nobro") owned by Noble San Diego;
1.2.6 any shares of stock of Nobro S.C. and Sports Radio
Broadcasting, Inc., a California corporation owned by Sports Radio;
1.2.7 any permits issued by the Federal Communications
Commission pursuant to Section 325(c) of the Communications Act of 1934, as
amended ("Section 325(c) Permit") and held by Sellers; and
1.2.8 any Duplicate Records.
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
2.1 Assumption of Obligations. Buyer hereby assumes the
obligations of Sellers arising or to be performed on or after the Closing Date
(except to the extent such obligations arise out of activities, events or
transactions occurring, or conditions existing, on or prior to the Closing Date)
under: (A) the Operations Contracts; (B) the Employment Contracts; (C) the Real
Estate Contracts; and (D) the Major Contracts. All of the foregoing liabilities
and obligations shall be referred to herein collectively as the "Assumed
Liabilities."
2.2 Retained Liabilities. Notwithstanding anything contained in
this Agreement to the contrary, Buyer expressly does not, and shall not, assume
or agree to pay, satisfy, discharge or perform and will not be deemed by virtue
of the execution and delivery of this Agreement or any agreement, instrument or
document delivered pursuant to or in connection with this Agreement or otherwise
by reason of or in connection with the consummation of the transactions
contemplated hereby or thereby, to have assumed or to have agreed to pay,
satisfy, discharge or perform, any liabilities, obligations or commitments of
Sellers of any nature whatsoever whether accrued, absolute, contingent or
otherwise and whether or
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<PAGE> 6
not disclosed to Buyer (including without limitation any intercompany
indebtedness), other than the Assumed Liabilities. Sellers will retain and pay,
satisfy, discharge and perform in accordance with the terms thereof, all
liabilities and obligations of Sellers, other than the Assumed Liabilities,
including but not limited to, the obligation to assume, perform, satisfy or pay
any liability, obligation, agreement, debt, charge, claim, judgment or expense
incurred by or asserted against Sellers related to taxes (except as expressly
provided for in the Stock Agreement (as defined in Article 5 hereof)),
environmental matters, employment contracts (other than the "Employment
Contracts), employee benefits, severance of employees (except as expressly
provided for in the Stock Agreement), product liability or warranty, negligence,
contract breach or default, or other obligations, claims or judgments asserted
against Buyer as successor in interest to Sellers. All of such liabilities,
obligations and commitments of Sellers described in this Section 2.2 shall be
referred to herein collectively as the "Retained Liabilities."
ARTICLE 3
CONSIDERATION
3.1 Delivery of Consideration. In consideration for the sale of
the Stations Assets to Buyer, in addition to the assumption of certain
obligations of Sellers pursuant to Section 2.1 above, Buyer shall, at the
Closing (as hereinafter defined), deliver to Sellers Forty Three Million Five
Hundred Thousand Dollars ($43,500,000) (the "Purchase Price"), which includes
amounts paid for the Accounts Receivable. The Purchase Price shall be payable by
wire transfer of immediately available funds.
3.2 Proration of Income and Expenses; Trade Agreements Adjustment.
3.2.1 Except as otherwise provided herein, all prepaid and
deferred income and expenses relating to the Stations Assets or the Assumed
Liabilities and arising from the conduct of the business and operations of the
Stations shall be prorated between Buyer and Sellers in accordance with
generally accepted accounting principles as of 11:59 p.m., San Diego, California
time, on the date immediately preceding the Closing Date. Such prorations shall
include, without limitation, all ad valorem, real estate and other property
taxes, business and license fees, music and other license fees, utility
expenses, amounts due under the Operations Contracts, the Employment Contracts,
the Real Estate Contracts and the Major Contracts, rents and similar prepaid and
deferred items. Real estate taxes shall be apportioned on the basis of taxes
assessed for the preceding year, with a reapportionment as soon as the new tax
rate and valuation can be ascertained.
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3.2.2 Except as otherwise provided herein, the prorations and
adjustments contemplated by this Section 3.2, to the extent practicable, shall
be made on the Closing Date. As to those prorations and adjustments not capable
of being ascertained on the Closing Date, an adjustment and proration shall be
made within ninety (90) calendar days of the Closing Date. In the event of any
disputes between the parties as to such prorations and adjustments, the amounts
not in dispute shall nonetheless be paid at the Closing and such amounts in
dispute shall be determined by an independent certified public accountant
mutually acceptable to the parties, and the fees and expenses of such accountant
shall be paid one-half by Sellers and one-half by Buyer.
3.3 Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets in a manner determined by Buyer based upon an
appraisal prepared by an appraiser selected by Buyer. Sellers and Buyer agree to
use the allocations determined by Buyer for all tax purposes, including without
limitation, those matters subject to Section 1060 of the Internal Revenue Code
of 1986, as amended.
ARTICLE 4
CLOSING
4.1 Closing. The consummation of the transactions contemplated
hereby (the "Closing") is being held simultaneously with the execution hereof on
the date first written above (the "Closing Date") commencing at 8:00 a.m.
eastern time in the offices of Graydon, Head & Ritchey in Cincinnati, Ohio.
4.2 Time Brokerage Agreement. At the Closing, Buyer and Noble
San Diego and Sports Radio (together, "Permittee") shall enter into a mutually
acceptable Time Brokerage Agreement (the "Time Brokerage Agreement") pursuant to
which Permittee shall deliver Buyer's programming for broadcast by the Stations
during the term thereof. Permittee shall cooperate fully with Buyer, and shall
fully perform their obligations under the Time Brokerage Agreement during the
term thereunder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF SELLERS
Simultaneously with the execution hereof and at the Closing, Jacor
Communications, Inc. (the parent company of Buyer) ("Jacor") and Noble Broadcast
Group, Inc. (the ultimate parent company of each of Sellers) ("Noble"), among
others, are entering into a certain Stock Purchase and Stock and Warrant
Redemption Agreement (the "Stock Agreement") providing for, among other things,
the purchase by Jacor of all of the issued and outstanding capital stock of
Noble. Each Seller acknowledges and agrees that Buyer is entering into this
Agreement in reliance upon the "Sellers
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Representations and Warranties" and the "Company's Representations and
Warranties" each as defined and set forth in the Stock Agreement. In order to
further induce Buyer to enter into this Agreement, Sellers jointly and severally
make all of the representations and warranties that Noble makes to Jacor in the
Stock Agreement, as the same may be qualified, as indicated in the Stock
Agreement, by information disclosed in the Disclosure Letter (as defined in the
Stock Agreement) (the "Sellers Representations and Warranties"). The Sellers
Representations and Warranties shall be true and correct in all respects as of
the date hereof subject to the provisions hereof regarding the expiration
thereof.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer acknowledges and agrees that Sellers are entering into this
Agreement in reliance upon the "Buyer's Representations and Warranties" as
defined and set forth in the Stock Agreement. In order to further induce Sellers
to enter into this Agreement, Buyer hereby makes all of the Buyer's
Representations and Warranties to Sellers (the "Buyer's Representations and
Warranties"). The Buyer's Representations and Warranties shall be true and
correct in all respects as of the date hereof subject to the provisions hereof
regarding the expiration thereof.
ARTICLE 7
GOVERNMENTAL CONSENTS
7.1 Required Filings and Approvals. From and after the Closing,
Buyer and Sellers shall cooperate with each other in promptly making any filings
and seeking any approvals, if any, required to be made with or obtained from any
federal, state, local or foreign governmental or administrative agency, court,
or other authority (each, a "Governmental Entity" and collectively,
"Governmental Entities") in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and in
promptly making all such filings and promptly seeking the related consents,
approvals, permits or authorizations from such Governmental Entities.
ARTICLE 8
FURTHER AGREEMENTS
8.1 Confidentiality. Except as expressly provided in the Stock
Agreement, no party hereto shall make any press releases, public statements or
announcements concerning the transactions contemplated hereby.
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8.2 Accounts Receivable. Sellers acknowledge that all Accounts
Receivable are being sold by Sellers to Buyer hereunder. From and after the
Closing Date, Sellers agree to use reasonable efforts to assist Buyer in
collection of the Accounts Receivable in the normal and ordinary course of
business. Neither Sellers nor their agents shall make any direct solicitation of
any account debtor for collection purposes or institute litigation for the
collection of amounts due without the prior consent of Buyer. Sellers shall be
immediately turn over to Buyer any amounts relating to the Accounts Receivable
that are paid directly to Sellers. Buyer agrees to promptly apply amounts
received upon collection of the Accounts Receivable to the payment of Sellers'
accounts payable arising in connection with the operation of the Stations prior
to the Closing Date.
8.3 Consents to Assignment. At the Closing, Sellers are
delivering to Buyer consents to the assignment by Sellers to Buyer of the Stern
Contract and the Skystar Contract. As of the Closing, no consents have yet been
obtained with respect to the assignment to Buyer of any of the other Contracts,
and Sellers represent that no such consents are required other than for
assignment of the Kings Contract and Stanford Contract. Nonetheless, to the
extent that any such Contract is not capable of being sold, assigned,
transferred, conveyed or delivered without the consent, release or waiver of any
third person (including any Governmental Entity), or if such sale, assignment,
transfer, conveyance or delivery or attempted sale, assignment, transfer,
conveyance or delivery would constitute a breach thereof or a violation of any
law or regulation, this Agreement and any assignment executed pursuant hereto
shall not constitute a sale, assignment, transfer, conveyance or delivery or an
attempted sale, assignment, transfer, conveyance or delivery thereof; rather, in
such cases, this Agreement and any assignment executed pursuant hereto, to the
extent permitted by law, shall constitute an equitable assignment by Sellers to
Buyer of all of Sellers' rights, benefits, title and interest in and to such
Contract, and where necessary or appropriate, Buyer shall be deemed to be
Sellers' agent for the purpose of completing, fulfilling and discharging all of
Sellers' rights and liabilities arising after the Closing Date thereunder.
Sellers shall use their best efforts to provide Buyer with the financial and
business benefits of any such Contract (including, without limitation,
permitting Buyer to enforce any rights of Sellers arising thereunder), and Buyer
shall, to the extent Buyer is provided with the benefits thereof, assume and
perform and in due course pay and discharge all debts, obligations and
liabilities of Sellers thereunder to the extent that Buyer was to assume those
obligations pursuant to the terms hereof. Sellers and Buyer together shall use
their best efforts to obtain any third party consents necessary for the
assignment of any such Contract.
8.4 Transfer Taxes and Similar Charges. All costs of transferring the
Stations Assets in accordance with this Agreement,
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including recordation, transfer and documentary taxes and fees, and any excise,
sales or use taxes, shall be paid by Buyer.
8.5 Governmental Filing or Grant Fees. Any filing or grant fees
imposed by any Governmental Entity the consent of which or the filing with which
is required for the consummation of the transactions contemplated hereby shall
be paid as provided in Section 8.1 of the Stock Agreement.
8.6 Indemnification and Escrow Agreement. Simultaneously with
the execution hereof and at the Closing, Jacor and Noble, among others, are
entering into a certain Indemnification and Escrow Agreement (the
"Indemnification and Escrow Agreement") providing for, among other things, the
terms, conditions and procedures applicable to all claims for indemnity arising
out of any Buyer Escrow Indemnified Claim, Buyer Non-Escrow Indemnified Claim or
Seller Indemnified Claim (each as defined in the Indemnification and Escrow
Agreement); all such claims arising under this Agreement shall be determined
solely pursuant to the provisions of the Indemnification and Escrow Agreement,
and no separate claim or cause of action arising out of any Buyer Escrow
Indemnified Claim, Buyer Non-Escrow Indemnified Claim or Seller Indemnified
Claim may be maintained.
8.7 Survival of Representations, Etc. It is the express
intention and agreement of the parties to this Agreement that: (A) all covenants
and agreements (together, "Agreements") and all representations and warranties
(together, "Warranties") made by Buyer and Sellers in this Agreement shall
survive (regardless of any knowledge, investigation, audit or inspection at any
time made by or on behalf of Buyer or any Seller) as follows:
8.7.1 The Agreements shall survive the Closing without
limitation.
8.7.2 The Warranties shall only survive the Closing for a
period of twelve (12) months from the Closing Date.
8.7.3 The right of any party to recover Damages (as defined in
the Indemnification and Escrow Agreement) as to any specific matter for which
indemnification is sought shall not be affected by the expiration of any
Warranties as set forth herein, provided that a Claim Notice (as defined in the
Indemnification and Escrow Agreement) with respect to such matter has been given
by the indemnified party to the indemnifying party prior to such expiration and
prior to the expiration of the indemnifying parties' obligations under the
Indemnification and Escrow Agreement and subject to the terms of the
Indemnification and Escrow Agreement.
8.7.4 Notwithstanding any provision hereof to the contrary,
there shall be no contractual time limit in which Buyer or Sellers may bring any
action for actual fraud (a "Fraud
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Action"), regardless of whether such actual fraud also included a breach of any
Agreement or Warranty; provided, however, that any Fraud Action must be brought
within the period of the applicable statute of limitations plus any extensions
or waivers granted or imposed with respect thereto.
ARTICLE 9
DOCUMENTS TO BE DELIVERED AT CLOSING
9.1 Sellers Documents. At the Closing, Sellers are delivering or
causing to be delivered to Buyer the following:
9.1.1 Such certificates, bills of sale, general warranty
deeds, assignments, documents of title and other instruments of conveyance,
assignment and transfer (including without limitation any necessary consents
to conveyance, assignment or transfer of the Stern Contract and Skystar
Contract), and lien releases, all in form satisfactory to Buyer and
Buyer's counsel, as shall be effective to vest in Buyer good, marketable and
insurable title in and to the Assets, free, clear and unencumbered.
9.1.2 Originals and all copies of all records required to be
maintained by any Governmental Entity with respect to the Stations and Stations
Assets shall be left at the Stations and thereby delivered to Buyer;
9.1.3 The Time Brokerage Agreement;
9.1.4 A satisfactory legal opinion from Gray, Cary, Ware &
Freidenrich; and
9.1.5 Such additional information, materials, agreement,
documents and instruments as Buyer and its counsel may reasonably request.
9.2 Buyer's Documents. At the Closing, Buyer is delivering or causing
to be delivered to Sellers the following:
9.2.1 The Time Brokerage Agreement;
9.2.2 A satisfactory legal opinion from Graydon, Head &
Ritchey;
9.2.3 The Purchase Price in accordance with Section 3.1
hereof; and
9.2.4 Such additional information, materials, agreement,
documents and instruments as Sellers and their counsel may reasonably request.
11
<PAGE> 12
ARTICLE 10
MISCELLANEOUS PROVISIONS
10.1 Certain Interpretive Matters and Definitions. Unless the
context otherwise requires: (a) all references to Sections, Articles, Schedules
or Exhibits are to Sections, Articles, Schedules or Exhibits of or to this
Agreement; (b) each term defined in this Agreement has the meaning assigned to
it; (c) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect on the date hereof; (d) "or" is disjunctive but not
necessarily exclusive; (e) words in the singular include the plural and vice
versa; (f) the term "Affiliate" has the meaning given it in Rule 12b-2 of
Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g)
all references to "$" or dollar amounts will be to lawful currency of the United
states of America.
10.2 Further Assurances. If at any time, and from time to time,
after the Closing, any party reasonably determines that any further conveyance,
assignment or other document or any further action is necessary or desirable to
carry out the purposes of and to make effective the transactions contemplated by
this Agreement, the parties agree to execute and deliver all such instruments
and take all such actions as may be reasonably necessary or advisable for such
purpose.
10.3 Benefit and Assignment. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. No party may voluntarily or involuntarily
assign its interest under this Agreement without the prior written consent of
the other parties hereto, except for any assignment to an Affiliate of Buyer in
which case Buyer shall remain obligated hereunder as an assignor.
10.4 Amendments. This Agreement may be modified or amended only
by a writing duly executed by Buyer and Sellers, which modification or amendment
shall be binding upon all of the parties hereto.
10.5 Waivers. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a continuing waiver, and no waiver
shall be binding unless executed in writing by the party making the waiver.
10.6 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
10.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio (but not including
the choice-of-laws rules thereof).
12
<PAGE> 13
10.8 Sellers Representative. Each Seller hereby appoints John
T. Lynch as their agent and representative (the "Sellers Representative") for
the purposes of acting for and binding such Seller for all purposes of this
Agreement, including, without limitation: (i) amending, restating,
supplementing, terminating or otherwise modifying this Agreement or any
Ancillary Document or making any waivers on behalf of Sellers pursuant hereto or
thereto; and (ii) settling of any controversies or disagreements between Buyer
and/or Sellers hereunder; and (iii) receiving or giving any notices to or from
Sellers hereunder; and (iv) communicating on behalf of Sellers with the Buyer as
to any matters relating to this Agreement. Buyer shall be entitled to
presumptively rely without further inquiry upon all acts of, and communications
from, Sellers Representative as being the authorized actions and communications
of the Sellers Representative as approved by Sellers.
10.9 Notices. All notices, demands or other communications
which may be or are required to be given by any party to any other party
pursuant to this Agreement, shall be in writing and shall be mailed by certified
mail, return receipt requested, postage prepaid, or transmitted by hand
delivery, national overnight express, telegram or facsimile transmission,
addressed as follows:
10.9.1 If to Buyer:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Randy Michaels
Fax: (513) 621-6087
with a copy (which shall not constitute notice) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Fax: (513) 651-3836
10.9.2 If to Sellers, Sellers Representative as follows:
John T. Lynch
1508 Uno Verde Court
Solana Beach, California 92075
Fax: (619) 481-3269
13
<PAGE> 14
with a copy (which shall not constitute notice) to:
Gray, Cary, Ware & Freidenrich
401 B Street, Suite 1700
San Diego, California 92101-4297
Attention: J. Terence O'Malley, Esq.
Fax: (619) 236-1048
until such time as either party notifies the other of a change of address. Each
notice or other communication which shall be mailed, delivered or transmitted in
the manner described above shall be deemed sufficiently given and received for
all purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, or the affidavit of messenger or telefax
transmission log being deemed conclusive evidence of such delivery) or at such
time as delivery is refused by the addressee upon presentation.
10.10 Counterparts. This Agreement may be executed in as many
counterparts as may be required, and each such counterpart hereof shall be
deemed to be an original instrument, but all such counterparts together shall
constitute but a single agreement.
10.11 No Third Party Beneficiaries. Nothing herein expressed or
implied is intended or shall be construed to confer upon or give to any person
or entity other than the parties hereto and their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.
10.12 Severability. Wherever possible, each provision of this
Agreement will be interpreted so as to be effective and valid under applicable
law, but if any provision of this Agreement is prohibited by or invalid under
such law, such provision will be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
14
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first above written.
CHESAPEAKE SECURITIES, INC.
By:___________________________
Its:__________________________
NOBLE BROADCASTING OF SAN DIEGO, INC.
By:___________________________
Its:__________________________
SPORTS RADIO, INC.
By:___________________________
Its:__________________________
BROADCAST CENTER, INC.
By:___________________________
Its:__________________________
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
15
<PAGE> 1
CREDIT AGREEMENT
DATED AS OF FEBRUARY ___, 1996
AMONG
JACOR COMMUNICATIONS, INC.,
THE BANKS PARTY HERETO,
BANQUE PARIBAS, AS AGENT
AND
THE FIRST NATIONAL BANK OF BOSTON
AND
BANK OF AMERICA ILLINOIS,
AS CO-AGENTS
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS
ARTICLE II
THE CREDITS
Section 2.1 Revolving A Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 2.2 Revolving B Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.3 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.4 Applicable Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.5 Borrowing Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.6 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.7 Interest Periods, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.8 Mandatory Principal Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.9 Optional Principal Payments and Reductions
of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.10 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 2.12 Notes; Recordkeeping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.13 Minimum Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.14 Eurodollar Rate Conversion and Continuation . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.15 Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 2.16 Non-Receipt of Funds by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.17 Collateral Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.18 Further Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE III
CHANGE IN CIRCUMSTANCES
Section 3.1 Yield Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 3.3 Availability of Rate Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.4 Funding Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 3.5 Bank Certificates; Survival of Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions Precedent to Initial Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 4.2 Conditions Precedent to All Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.1 Corporate Existence and Standing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.2 Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.3 No Conflict; Government Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.5 Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.7 Litigation and Contingent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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Section 5.8 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.10 Accuracy of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.11 Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.12 Materially Burdensome Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 5.13 Compliance with Laws; Franchises and Licenses . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 5.14 Ownership of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.15 Location of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.16 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.17 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.18 Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 5.19 Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.20 Excluded Subsidiaries, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.21 Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.22 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.23 Security Interests and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 5.24 Closing Date Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.25 Call Letters; Patents, Trademarks, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.26 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.27 Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.28 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 5.29 Representations and Warranties in Noble Documents . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE VI
COVENANTS
Section 6.1 Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 6.2 Notice of Default, Litigation etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 6.3 Financial Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 6.4 Conduct of Business; Maintenance of Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 6.5 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.7 Compliance with Laws and FCC Filings in connection
with Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.8 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.9 Inspection, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.10 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 6.11 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.12 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.13 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 6.14 Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.15 Investments and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 6.16 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.17 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 6.18 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 6.19 Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.20 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.21 Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.22 Interest Rate Protection, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.23 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 6.24 Fiscal Year; Fiscal Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
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Section 6.25 Amendment to Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.26 Subsidiary Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.27 FCC Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.28 Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.29 Cash Management System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 6.30 Amendments and Waivers to Noble Documents,
Mexican Documents and Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 6.31 Intercreditor Agreement and the Citicasters
L/C Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VII
DEFAULTS
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Section 8.1 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 8.3 Preservation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.2 Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.3 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.6 Several Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 9.7 Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 9.8 Numbers of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 9.9 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 9.10 Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.11 Non-liability of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.12 CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.13 CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.16 Limitation of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 9.17 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE X
THE AGENT
Section 10.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 10.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 10.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 10.4 No Responsibility for Loans, Recitals, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 10.5 Action on Instructions of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 10.6 Employment of Agents and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 10.7 Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Section 10.8 Agent's Reimbursement and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . 64
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Section 10.9 Rights as a Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.10 Bank Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.11 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.12 Collateral Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.13 Duties and Rights of Co-Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XI
SETOFF; RATABLE PAYMENTS
Section 11.1 Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 11.2 Ratable Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 12.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 12.2 Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Section 12.3 Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
ARTICLE XIII
NOTICES
Section 13.1 Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 13.2 Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE XIV
WAIVER OF JURY TRIAL
</TABLE>
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This Credit Agreement, dated as of February __, 1996, is among
Jacor Communications, Inc., an Ohio corporation, the Banks (as defined below),
Banque Paribas, as Agent and each of The First National Bank of Boston and Bank
of America Illinois, as Co-Agents. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which the Company
or any of the Subsidiaries (i) acquires any going business or assets of any
Person (other than assets acquired by the Company or any Subsidiary in the
ordinary course of its business), whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires at least fifty percent (50%)
in number of votes (in one transaction or as the most recent transaction in a
series of transactions), of the securities or other ownership interest in any
Person, other than, with respect to the Company, a Subsidiary of the Company
existing on the date hereof.
"Acquisition Certificate" means, with respect to any proposed
Acquisition, a certificate signed by an Authorized Officer of the Company in the
form of a compliance certificate showing the calculations necessary to
determine, after giving effect to such Acquisition, compliance with this
Agreement on a combined pro forma basis, both at the time of such proposed
Acquisition and for the twelve month period immediately following the date of
such Acquisition based upon pro forma projections for such twelve month period
immediately following the date of such Acquisition, and which shall also
certify, (i) the accuracy and completeness of the attached Acquisition Pro
Formas, and (ii) the accuracy of the matters set forth in clauses (c), (e), (f)
and (g) of the definition of "Permitted Acquisition", and with respect to the
matters set forth in clauses (f) and (g) of such definition, the calculations in
support thereof.
"Acquisition Pro Formas" shall mean, in connection with any
proposed Acquisition by the Company or any Subsidiary of a business engaged
primarily in radio broadcasting, a consolidated balance sheet, profit and loss
statement and cash flow statement of the Company and its Subsidiaries each in
reasonable detail and prepared in accordance with Generally Accepted Accounting
Principles consistently applied on a combined pro forma basis after giving
effect to the proposed Acquisition for the twelve-month period immediately
preceding such Acquisition.
"Advance" means a borrowing hereunder consisting of the
aggregate amount of the several Loans made by the Banks to the Company on the
same Borrowing Date, at the same Rate Option and, in the case of Eurodollar Rate
borrowings hereunder, for the same Interest Period.
"Affiliate" means any Person directly or indirectly
controlling, controlled by or under direct or indirect common control with the
Person specified, whether by contract, understanding or otherwise. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or
<PAGE> 7
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Agent" means Banque Paribas in its capacity as agent for the
Banks and the Co-Agents pursuant to Article X, and not in its individual
capacity as a Bank, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means, at any time of determination, the
aggregate of the Aggregate Revolving A Loan Commitment and the Aggregate
Revolving B Loan Commitment at such time.
"Aggregate Revolving A Loan Commitment" means, at any time of
determination, the aggregate of the Revolving A Loan Commitments of each of the
Banks at such time.
"Aggregate Revolving B Loan Commitment" means, at any time of
determination, the aggregate of the Revolving B Loan Commitments of each of the
Banks at such time.
"Agreement" means this Credit Agreement, as it may be amended,
modified, supplemented or restated and in effect from time to time.
"Agreement Accounting Principles" means United States generally
accepted principles of accounting as in effect on, and applied in a manner
consistent with, those used in preparing the audited December 31, 1994
consolidated financial statements of the Company and the Subsidiaries.
"Applicable Margin" means the respective percentages for each
Rate Option determined in accordance with the terms of Section 2.4.
"Applicable Rate" shall mean, at any time of determination, a
rate per annum equal to (i) if the Leverage Ratio is greater than or equal to
5.0 to 1.0 at such time, 0.50% and (i) if the Leverage Ratio is less than 5.0 to
1.0 at such time, 0.375%. The Applicable Rate shall be subject to adjustment
(upwards or downwards, as appropriate) based on the Leverage Ratio at the end of
each of the first three fiscal quarters and the fiscal year of the Company. For
purposes of determining the Applicable Rate, the Leverage Ratio shall be
determined (i) for the period from the Closing Date until the Company delivers
its monthly financial statements for the period ending as at March 31, 1996, by
determining Total Debt on the Closing Date after giving effect to the making of
the Loans and the consummation of the other Transactions which are consummated
on such date and by determining Operating Cash Flow for the twelve-month period
ending December 31, 1995, (ii) in the case of determinations made with respect
to the first three fiscal quarters of the Company's fiscal year, by reference to
the monthly financial statements for the month ending on the last day of such
fiscal quarter and the Compliance Certificate for such fiscal quarter delivered
pursuant to Sections 6.1(b) and (d) and (iii) in the case of determinations made
with respect to the last fiscal quarter of the Company's fiscal year, by
reference to the financial statements and Compliance Certificate delivered by
the Company pursuant to Sections 6.1(a) and (d), provided that for the purposes
of clauses (i), (ii) and (iii) above, for all periods prior to the purchase of
the Noble Stock pursuant to the Noble Stock Purchase and Warrant Redemption
Agreement, all calculations shall be made on a combined pro forma basis
(excluding the Noble Denver Stations unless they are subject to a Joint Sales
Agreement or a Local Marketing
2
<PAGE> 8
Agreement) as if such Noble Stock had been purchased on or prior to the first
day of such period, all as certified to by an Authorized Officer of the Company,
and attaching to such certificate, combined pro forma financial statements in
support of such calculations. The adjustment, if any, to the Applicable Rate
shall be effective commencing on the Business Day of the delivery of such
quarterly or annual financial statements and Compliance Certificate and shall be
effective only for the period subsequent to such date. In the event that the
Company shall at any time fail to furnish to the Banks the financial statements
and Compliance Certificate required to be delivered pursuant to Section 6.1(a),
(b) or (d), the maximum Applicable Rate shall apply until such time as such
financial statements and Compliance Certificate are so delivered to the Agent.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Authorized Officer" means any of the Chairman of the Board,
the President, the Treasurer or the Chief Financial Officer of the Company,
acting singly.
"Bank of Boston" means The First National Bank of Boston.
"Banks" means the banks and other Persons, other than the
Company, the Agent (in its capacity as Agent) and the Co-Agents (in their
capacities as Co-Agents), listed on the signature pages of this Agreement and
their respective successors and assigns as may be parties to any Notice of
Assignment executed pursuant to Section 12.3.
"Banque Paribas" shall mean Banque Paribas in its individual
capacity, and its successors and assigns.
"Base Rate" means a rate per annum at any time equal to the
greater of (i) base rate or prime rate of interest announced by the Agent from
time to time, changing when and as said corporate base rate or prime rate
changes and (ii) the Federal Funds Rate plus 1/2 of 1% per annum.
"Borrowing Date" means a date on which an Advance is made
hereunder.
"Borrowing Notice" is defined in Section 2.5.
"Broadcast Finance" means Broadcast Finance, Inc., an Ohio
corporation.
"Business Day" means (i) with respect to any borrowing, payment
or selection in respect of any Eurodollar Loan, a day other than Saturday or
Sunday on which banks are open for business in Chicago and New York and on which
dealings in U.S. Dollars are carried on in the interbank eurodollar market and
(ii) for all other purposes, a day other than Saturday or Sunday on which banks
are open for business in Chicago and New York.
"Capital Expenditures" shall mean, for any period, the sum of
expenditures, other than barter expenditures, (whether paid in cash or accrued
as a liability, including the portion of Capitalized Leases that is capitalized
on the consolidated balance sheet of the Company and the Subsidiaries
3
<PAGE> 9
during such period), by the Company and the Subsidiaries during such period
that, in conformity with Agreement Accounting Principles, are included in
"capital expenditures", "additions to property, plant or equipment" or
comparable items in the consolidated financial statements of the Company and the
Subsidiaries.
"Capitalized Lease" of a Person means any lease of property by
such Person as lessee which should be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of
the obligations of such Person under Capitalized Leases which should be shown as
a liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Interest Expense" means, for any fiscal period of the
Company, the interest expense (including, without limitation, interest expense
attributable to Capitalized Leases in accordance with Agreement Accounting
Principles) of the Company and its Subsidiaries for such period, plus all
expenses incurred in connection with the payment of fees under any agreement
relating to indebtedness during such period (other than fees paid or payable
during such period pursuant to Section 2.11(a) or (b)), minus, to the extent
included in the foregoing, any such interest or fee expense not paid or payable
in cash during such period, minus interest income, plus any such interest or fee
expense accrued but not paid during any previous period and paid during such
period, in each case determined on a consolidated basis in accordance with
Agreement Accounting Principles.
"Citicasters L/C Documents" means the collective reference to
(i) a letter of credit, in an original principal amount not to exceed
$75,000,000, to be issued by the L/C Provider in favor of Citicasters, Inc. in
connection with the proposed acquisition by the Company of the assets and stock
of Citicasters, Inc., and (ii) a letter of credit reimbursement agreement
between the Company and the L/C Provider relating to the letter of credit
referred to in clause (i) above.
"Citicasters L/C Funding Date" means the date any amount is
paid to Citicasters, Inc. (or any of its Affiliates) under any of the
Citicasters L/C Documents.
"Closing Date" means, that date upon which all conditions
precedent to the effectiveness of this Agreement have occurred and the initial
Loans are made.
"Co-Agents" means the collective reference to the Bank of
Boston and the Bank of America Illinois, in their respective capacities as
co-agents for the Banks pursuant to Article X, and not in their respective
individual capacities as a Bank, and any successor Co-Agents appointed pursuant
to Article X.
"Collateral" means the collective reference to the "Collateral"
under and as defined in each of the Collateral Documents (other than the
Mortgages) and the "Property" under and as defined in each of the Mortgages.
4
<PAGE> 10
"Collateral Documents" means, collectively, the Subsidiary
Guaranty, the Company Pledge Agreement, the Company Security Agreement, the
Mortgages, the Subsidiary Security Agreement, the Subsidiary Pledge Agreements,
the Company Trademark Agreement, the Subsidiary Trademark Agreements, the Noble
Document Assignment, the Joint Sales Agreement Assignment, the Local Marketing
Agreement Assignment, the Mexican Assignment Agreements, and the Intercompany
Security Agreement and all ancillary documentation and agreements required
thereunder or executed and/or delivered by the Company or any Subsidiary to the
Agent or any Bank in connection therewith.
"Commitments" means, for each Bank, its Revolving A Loan
Commitment and its Revolving B Loan Commitment.
"Company" means Jacor Communications, Inc., an Ohio
corporation, and its successors and assigns.
"Company Mortgages" means collectively any mortgage or deed of
trust, each in substantially the form of Exhibit C-1 hereto, and duly completed,
executed and delivered by the Company pursuant to Section 2.17, as each such
mortgage or deed of trust may be amended, modified, supplemented or restated and
in effect from time to time.
"Company Plan" means a Plan that is sponsored,
maintained, or contributed to, by the Company or any Subsidiary, or to
which the Company or any Subsidiary has an obligation to contribute, for
employees of the Company or any Subsidiary.
"Company Pledge Agreement" means a pledge agreement in
substantially the form of Exhibit D-1 hereto, duly completed, executed and
delivered to the Agent by the Company, as the same may be amended, modified,
supplemented or restated and in effect from time to time.
"Company Security Agreement" means the security agreement in
substantially the form of Exhibit E-1 hereto, duly completed, executed and
delivered to the Agent by the Company, as the same may be amended, modified,
supplemented or restated and in effect from time to time.
"Company Trademark Agreement" means a trademark security
agreement in substantially the form of Exhibit N-1 hereto, duly completed,
executed and delivered to the Agent by the Company, as the same may be amended,
modified, supplemented or restated and in effect from time to time.
"Compliance Certificate" means a compliance certificate in
substantially the form of Exhibit F hereto, with appropriate insertions, signed
by an Authorized Officer of the Company, showing the calculations necessary to
determine compliance with this Agreement and stating that no Default or
Unmatured Default exists, or if any Default or Unmatured Default exists,
describing the nature thereof and any action the Company is taking or proposes
to take with respect thereto.
"Conversion/Continuation Notice" is defined in Section 2.14.
"Current Assets" shall mean, at any time, the current assets
(other than barter, deferred tax, cash and cash equivalents of the Company and
5
<PAGE> 11
its Subsidiaries at such time, determined on a consolidated basis in accordance
with Agreement Accounting Principles.
"Current Liabilities" shall mean, at any time, the current
liabilities (other than the current portion of all long-term Indebtedness of the
Company and its Subsidiaries at such time and other than barter and deferred tax
items), determined on a consolidated basis in accordance with Agreement
Accounting Principles.
"Debt Cash Proceeds" means all cash proceeds received by the
Company or any Subsidiary from the incurrence of any Indebtedness or the
issuance of any instruments relating to such Indebtedness, in each case net of
underwriting discounts, commissions and other reasonable fees, costs and
expenses associated therewith.
"Default" means an event described in Article VII.
"Default Rate" is defined in Section 2.3(c).
"Denver Proceeds" means, with respect any transfer, sale or
other disposition of (i) any assets of the Company or any of its Subsidiaries in
(or around) Denver, Colorado or with respect to any of its operations in (or
around) Denver, Colorado, or (ii) any rights to acquire, or any interest in, any
of the Noble Denver Stations, but only if such transfer, sale or disposition was
undertaken in connection with obtaining the Noble Approval, an amount of Net
Cash Proceeds which, after giving effect to any prepayment pursuant to Section
2.8(b) hereof, causes the Leverage Ratio to be below 5.00 to 1.00, provided
however, for the purposes of calculating such Leverage Ratio, and
notwithstanding clause (ii) of the second sentence of the definition of
Operating Cash Flow, Operating Cash Flow shall be calculated on a pro forma
consolidated basis as if such transfer, sale or other disposition occurred on
the first day of the applicable period of calculation and which calculation
shall give effect to any reconfiguration of any of the Noble Denver Stations or
the Radio Stations located in (or around) Denver, Colorado, which
reconfiguration was undertaken in connection with obtaining the Noble Approval.
"Disbursement Account" is defined in Section 6.29(a).
"Dispositions" is defined in Section 6.13.
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, without limitation, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned or operated by the Company or any Subsidiary or (b) circumstances
forming the basis of any violation, or alleged violation, of any Environmental
Law.
"Environmental Laws" means all federal, state, local and
foreign laws and regulations relating to pollution or protection of human health
or the environment (including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata), including, without limita-
6
<PAGE> 12
tion, laws and regulations relating to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"Employment Agreements" means the collective reference to (i)
that certain Employment Agreement dated as of February __, 1996 between the
Company and John Lynch, and (ii) that certain Employment Agreement dated as of
February __, 1996 between the Company and Frank DeFrancesco, as each such
agreement may be amended, supplemented or otherwise modified from time to time
in accordance with Section 6.30 hereof.
"Equity Cash Proceeds" means all cash proceeds received by the
Company or any Subsidiary from the issuance of capital stock of the Company or
such Subsidiary or any issuance or exercise of rights, options or warrants to
acquire such capital stock, in each case net of underwriting discounts,
commissions and other reasonable fees, costs and expenses associated therewith
but excluding any exercise of stock options by any existing or previous
employees of the Company or any Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means, with respect to the Company or any
Subsidiary, any Person (or any trade or business, whether or not incorporated)
that is under common control with the Company or such Subsidiary within the
meaning of Section 414 of the Internal Revenue Code.
"Eurodollar Advance" means an Advance which bears interest at
the Eurodollar Rate for a particular Interest Period.
"Eurodollar Base Rate" means, with respect to a Eurodollar
Advance for the relevant Interest Period, the rate determined by the Agent to be
the rate at which deposits in U.S. dollars are offered by the Agent to
first-class banks in the interbank eurodollar market at approximately 11 a.m.
(Chicago time) two Business Days prior to the first day of such Interest Period,
in the approximate amount of the relevant Eurodollar Loan requested hereunder
and having a maturity approximately equal to such Interest Period.
"Eurodollar Loan" means a Loan which bears interest at the
Eurodollar Rate for a particular Interest Period.
"Eurodollar Rate" means, with respect to a Eurodollar Advance
for the relevant Interest Period, the sum of (i) the quotient of (a) the
Eurodollar Base Rate applicable to that Interest Period, divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to that
Interest Period, plus (ii) the Applicable Margin. The Eurodollar Rate shall be
rounded, if necessary, to the next higher 1/100 of 1%.
"Excess Cash Flow" means, for the period commencing January 1,
1997 and ending December 31, 1997 and thereafter for any fiscal year of the
Company, a positive amount, if any, equal to (i) Operating Cash Flow, plus (or
minus) (ii) decreases (or increases) in Working Capital from the first day of
such period to the last day of such period minus (iii) the sum of (without
7
<PAGE> 13
duplication) (A) scheduled principal payments made pursuant to scheduled
commitment reductions during such period on the Loans and other Indebtedness of
the Company and the Subsidiaries, (B) Cash Interest Expense and any other fees
and expenses paid in cash under the Loan Documents, (C) income and franchise
taxes paid or payable in cash during such period (other than taxes on amounts
recognized in connection with the sale or other Disposition made by the Company
or any Subsidiaries), (D) Capital Expenditures (to the extent permitted by
Section 6.18(b) through (f)) to the extent paid in cash or (E) Restricted
Payments paid in cash (to the extent made in reliance on Sections 6.10(iii) and
(iv)), all calculated for such fiscal year for the Company and the Subsidiaries
on a consolidated basis in accordance with Agreement Accounting Principles
consistently applied.
"Existing Debt" is defined in Section 5.18(b).
"Excluded Subsidiary" shall mean each of Jacor National Corp.,
a Delaware corporation, WIBX Incorporated, a New York corporation, Marathon
Communications, Inc., a New York corporation, Michigan Radio Inc., a Delaware
corporation and Jacor Cable, Inc. a Kentucky corporation.
"Existing Radio Expenditure Maximum" is defined in Section
6.18(b).
"FCC" means the Federal Communications Commission or any other
regulatory body which succeeds to the functions of the Federal Communications
Commission.
"FCC Broadcast Station License" means a broadcast station
license or series of licenses issued by the FCC for the dissemination of radio
communications intended to be received by the public and operated on a channel
in the AM or FM broadcast band.
"Federal Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy", as amended from time to time, and any successor
statute or statutes.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 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 Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the Bank of Boston and the Bank of America Illinois on such day
on such transactions as determined by the Agent in its discretion.
"Fee Letter" is defined in Section 4.1(a)(xiii).
"Fixed Charges" means, for any fiscal period of the Company, an
amount equal to the sum of, without duplication, (i) Cash Interest Expense for
such period, plus (ii) principal payments due pursuant to scheduled commitment
reductions during such period on the Loans and other Indebtedness of the
8
<PAGE> 14
Company and the Subsidiaries, plus (iii) the principal component of all rents
accrued during such period in connection with Capitalized Leases under which the
Company or a Subsidiary is the lessee, plus (iv) income and franchise taxes paid
or payable in cash during such period (other than taxes on amounts recognized in
connection with Dispositions made by the Company or any Subsidiary) plus (v) all
cash Capital Expenditures (other than those permitted under Section 6.18(a))
made or required to be made during such period.
"Floating Rate" means a rate per annum equal to (i) the Base
Rate plus (ii) the Applicable Margin, in each case changing when and as the Base
Rate and/or the Applicable Margin changes.
"Floating Rate Advance" means an Advance which bears interest
at the Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the
Floating Rate.
"Generally Accepted Accounting Principles" means United States
generally accepted principles of accounting as in effect from time to time and
applied in a manner consistent with those used in preparing the audited December
31, 1994 consolidated financial statements of the Company and the Subsidiaries.
"Governmental Authority" shall mean any nation, state,
sovereign, or government, any federal, regional, state, local or political
subdivision and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, any Indebtedness, lease,
dividend or other obligation of any other Person in any manner, whether directly
or indirectly and whether such obligation is contingent or absolute, or agrees
to maintain the net worth or working capital or other financial condition of any
other Person or otherwise assures any creditor of such other Person against
loss, including, without limitation, any comfort letter, operating agreement or
take-or-pay contract to such effect, all obligations of such Person for the
liabilities or obligations of another under any Joint Sales Agreement, any Local
Marketing Agreement and the Mexican Sales Agency Agreement and the actual or
contingent liability of such Person in connection with any application for or
the issuance of any Letter of Credit, but shall exclude the endorsement of
instruments for deposit or collection in the ordinary course of business.
"Indebtedness" of a Person means, without duplication, such
Person's (i) obligations for borrowed money, (ii) obligations representing the
deferred purchase price of property or services other than accounts payable
arising in the ordinary course of such Person's business payable on terms
customary in the trade, (iii) payment obligations (contingent or otherwise),
whether or not assumed, which are secured by Liens or payable out of the
proceeds or production from property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments evidencing indebtedness, (v) Capitalized Lease Obligations, (vi)
payment obligations (contingent or otherwise) arising under Non-Compete
9
<PAGE> 15
Agreements, (vii) payment obligations arising under agreements to repurchase
securities (but only when such obligations become due or during any period
during which the security holder has the right to cause such payment to become
due), (viii) obligations in connection with unreimbursed draws under Letters of
Credit, (ix) any payment obligations under any terminated swap agreements or
terminated interest rate hedging agreements and (x) any Guaranty of any of the
foregoing obligations provided, however, with respect to the Company or any of
its Subsidiaries, Indebtedness shall not include any obligations of the Company
or any of its Subsidiaries under the Citicasters L/C Documents until the
occurrence of the Citicasters L/C Funding Date.
"In-Market Acquisition" means any acquisition of any radio
stations, broadcast licenses, broadcast properties or other similar assets
located in, or providing service to, any location which, at the time of any such
acquisition, the Company or any of its Subsidiaries currently owns or operates
(pursuant to a Local Marketing Agreement or a Joint Sales Agreement) a radio
station.
"Intercompany Acquisition Loan" means a loan made by the
Company to any Subsidiary, which loan is made by the Company for the purpose of
funding (and the proceeds thereof have been applied to fund) a Permitted
Acquisition by such Subsidiary.
"Intercompany Acquisition Note" means an intercompany
acquisition demand note each in substantially the form of Exhibit G hereto and
duly completed, executed and delivered by any Subsidiary to evidence
Intercompany Acquisition Loans made to such Subsidiary, as the same may be
amended and in effect from time to time.
"Intercompany Demand Note" means the intercompany demand note
and the second consolidated amended and restated intercompany demand note, each
in substantially the form of Exhibit H-1 and Exhibit H-2 hereto, respectively,
and duly completed, executed and delivered by each of the Subsidiaries (other
than the Excluded Subsidiaries), respectively, as the same may be amended,
modified, supplemented, restated or replaced and in effect from time to time.
"Intercompany Security Agreement" means the second amended and
restated intercompany security agreement and financing statement in
substantially the form of Exhibit I hereto and duly completed, executed and
delivered by the Company and each of the Subsidiaries, other than the Excluded
Subsidiaries, as the same may be amended, modified, supplemented or restated
from time to time in conformity with the terms of this Agreement and in effect
from time to time.
"Interest Period" is defined in Section 2.7.
"Interest Rate Provider" shall mean any Bank (or any Affiliate
thereof) that provides an interest rate protection agreement to the Company
pursuant to Section 6.22 and that executes and delivers an agency agreement, in
form and substance satisfactory to the Agent.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor statute.
10
<PAGE> 16
"Investment" of a Person means any loan, advance, extension of
credit (excluding accounts receivable arising in the ordinary course of business
on terms customary in the trade), deposit account or contribution of capital by
such Person to any other Person or any investment in, or purchase or other
acquisition of, the stock, notes, debentures or other securities of any other
Person made by such Person.
"Joint Sales Agreement" means an agreement between the Company
or one of its Subsidiaries and the holder of an FCC Broadcast Station License
(which holder is not the Company, any of its Subsidiaries or an Affiliate of
either of them) pursuant to which the Company or such Subsidiary (i) arranges to
purchase advertising time for a fee from the radio station owned by such holder
of such FCC Broadcast Station License, with such advertising time to be resold
by the Company or any such Subsidiary, (ii) provides or furnishes such resold
advertising time to be broadcast by such radio station and (iii) does not supply
programming material to such radio station.
"Joint Sales Agreement Assignment" means, with respect to each
Joint Sales Agreement with Noble (or any Affiliate of Noble), an assignment
agreement, substantially in the form of Exhibit B hereto, providing for the
assignment by the Company or a Subsidiary, as the case may be, of all of its
right, title and interest in such Joint Sales Agreement, in favor of the Agent
for the ratable benefit of the Banks, duly completed, executed and delivered to
the Agent by the Company and duly acknowledged by the other party (or parties)
to such Joint Sales Agreement, as the same may be amended, modified,
supplemented or restated and in effect from time to time.
"L/C Provider" means any financial institution (including,
without limitation, any Bank) which provides a letter of credit in connection
with the acquisition by the Company (or any of its Affiliates) of the stock
and/or assets of Citicasters, Inc.
"Lending Office" means any office, branch, subsidiary or
affiliate of any Bank or the Agent.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such Person or upon
which such Person is an account party or for which such Person is in any way
liable.
"Leverage Ratio" means, at any time of determination, the ratio
of (i) Total Debt as at the date of such determination to (ii) Operating Cash
Flow for the twelve consecutive fiscal months then most recently ended (unless
otherwise specified herein), all calculated for the Company and the Subsidiaries
on a consolidated basis in accordance with Agreement Accounting Principles
consistently applied.
"Lien" means any security interest, mortgage, pledge, lien
(statutory or other), claim, charge, encumbrance, conditional sale or title
retention agreement, lessor's interest under a Capitalized Lease or analogous
instrument, or preference or priority (other than a priority of payment) in, of
or on any Person's assets or properties in favor of any other Person or the
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction, domestic or foreign,
other than financing statements which have lapsed or for which duly executed
termination statements have been delivered to the Agent.
11
<PAGE> 17
"Loans" means, collectively, the Revolving A Loans and the
Revolving B Loans.
"Loan Documents" means this Agreement, the Notes, the
Collateral Documents, each Rate Hedging Agreement, each Intercompany Demand
Note, each Intercompany Acquisition Note, the Fee Letter, the Noble Documents,
the Employment Agreements, the Mexican Documents and any other ancillary
documentation and agreement required hereunder or thereunder or executed and/or
delivered by the Company or any Subsidiary to the Agent or any Bank in
connection herewith or therewith.
"Local Marketing Agreement" means, with respect to any radio
station, an agreement between the Company or one of its Subsidiaries and the
holder or sublicensee of the FCC Broadcast Station License relating to such
radio station (which holder is not the Company, any of its Subsidiaries or an
Affiliate of either of them), pursuant to which the Company or such Subsidiary,
subject to the control of such holder of such FCC Broadcast Station License, and
for the payment of a fee to such holder of such FCC Broadcast Station License,
(i) arranges to sell air time for such radio station, and (ii) supplies
personnel and programming material to such radio station.
"Local Marketing Agreement Assignment" means, with respect to
each Local Marketing Agreement with Noble (or any Affiliate of Noble), an
assignment agreement, substantially the form of Exhibit B hereto, providing for
the assignment by the Company or a Subsidiary, as the case may be, of all of its
right, title and interest in such Local Marketing Agreement, in favor of the
Agent for the ratable benefit of the Banks, duly completed, executed and
delivered to the Agent by the Company and duly acknowledged by the other party
(or parties) to such Local Marketing Agreement, as the same may be amended,
modified, supplemented or restated and in effect from time to time.
"Margin Regulations" means the collective reference to
Regulation G, Regulation T, Regulation U and Regulation X of the Board of
Governors of the Federal Reserve System from time to time in effect and shall
include any successor or other regulations or official interpretation of said
Board of Governors relating to the extension of credit or incurrence of
indebtedness for the purpose of purchasing or carrying margin stocks.
"Materials of Environmental Concern" means chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum and petroleum
products.
"Mexican Assets Purchase Agreement" means that certain Asset
Purchase Agreement between _______________ and R.D.P with respect to the
purchase of the operating assets of XETRA-AM and XETRA-FM and the Mexican
Concession.
"Mexican Assignment Agreements" means the collective reference
to each of the Mexican Guaranty Assignment and the Mexican Sales Agency
Agreement Assignment.
"Mexican Concession" means concession titles granted by the
Ministry of Communications and Transportation and permits from the Ministry of
the Interior.
12
<PAGE> 18
"Mexican Documents" means the collective reference to the
Mexican Guaranty, the Mexican Assets Purchase Agreement and the Mexican Sales
Agency Agreement.
"Mexican Guaranty" means that certain joint and several Mexican
Guaranty by Conseco, a Indiana corporation, and John Lynch in favor of the
Company, pursuant to which each of the "Guarantors" (as defined therein) agree,
subject to the terms thereof, to pay the Company certain amounts upon the
occurrence of certain events.
"Mexican Guaranty Assignment" means, in respect of the Mexican
Guaranty, an assignment agreement, substantially the form of Exhibit B hereto,
providing for the assignment by the Company of all of its right, title and
interest in the Mexican Guaranty, in favor of the Agent for the ratable benefit
of the Banks, duly completed, executed and delivered to the Agent by the Company
and duly acknowledged by each "Guarantor" party to (and as defined in) such
Mexican Guaranty, as the same may be amended, modified, supplemented or restated
and in effect from time to time.
"Mexican Guaranty Grace Period" means the number of days
remaining during the period from the Closing Date, to but excluding the date
which is sixty (60) days following the Closing Date.
"Mexican Guaranty Proceeds" shall have the meaning set forth in
Section 2.8(c) hereof.
"Mexican Sales Agency Agreement" means the Exclusive Sales
Agency Agreement dated as of _______________ between R.D.P. and Noble (which
agreement has been assigned to Noble Broadcast of San Diego), including any
amendment thereto or replacement thereof (such amendment or replacement, as the
case may be, to be in form and substance satisfactory to the Agent).
"Mexican Sales Agency Agreement Assignment" means, in respect
of the Mexican Sales Agency Agreement, an assignment agreement, substantially
the form of Exhibit B hereto, providing for the assignment by Noble Broadcast of
San Diego of all of its right, title and interest in the Mexican Sales Agency
Agreement, duly completed, executed and delivered to the Agent by Noble
Broadcast of San Diego and duly acknowledged by the other party (or parties) to
such Mexican Sales Agency Agreement, as the same may be amended, modified,
supplemented or restated and in effect from time to time.
"Mortgages" means, collectively, the Company Mortgages and the
Subsidiary Mortgages.
"Multiemployer Plan" means a Plan maintained pursuant to a
collective bargaining agreement or any other arrangement to which the Company,
any Subsidiary or any ERISA Affiliate is a party and to which more than one
employer is obligated to make contributions.
"Net Cash Proceeds" is defined in Section 2.8(b).
"New Radio Expenditure Maximum" is defined in Section 6.18(c).
"New Station" is defined in Section 6.18(c).
13
<PAGE> 19
"New Station Capex Increase" means, with respect to any fiscal
year after the fiscal year in which a New Station is acquired, the product of
(i) $200,000 multiplied by (ii) the number of New Stations acquired prior to
such fiscal year (it being understood that multiple New Stations using a single
facility shall be deemed a single New Station for the purposes hereof).
"Noble" means Noble Broadcasting Group, Inc., a Delaware
Corporation.
"Noble Approval" means the approval by all governmental and
regulatory authorities (including, without limitation, the FCC) of (i) the
acquisition by the Company of the equity interests of Noble (as holder, through
its direct subsidiary, Noble Broadcast License, Inc. of the FCC Broadcast
Station Licenses for the Noble Stations) pursuant to the Noble Stock Purchase
and Warrant Redemption Agreement and (ii) the conversion of the Noble Warrants,
at Jacor's option, into voting Noble Stock pursuant to the Noble Stock Purchase
and Warrant Redemption Agreement.
"Noble Broadcast" means Noble Broadcast Center, Inc., a
California corporation.
"Noble Broadcast of San Diego" means Noble Broadcast of San
Diego, Inc., a California corporation.
"Noble-Company Credit Agreement" means that certain Credit
Agreement dated as of February ___ , 1996 between Broadcast Finance (as
"Lender") and Noble Holdings (as "Borrower") pursuant to which Broadcast Finance
(i) will make a term loan to Noble Holdings, on the Closing Date, of up to
$40,000,000, and (ii) will make, from time to time, revolving loans to Noble
Holdings in an amount not to exceed $1,000,000.
"Noble-Company Credit Agreement Guaranty" means that certain
subsidiary guaranty dated as of February ___ , 1996 by Noble Broadcast, Noble
Broadcast of Colorado, Inc., Noble Broadcast of St. Louis, Inc., Noble Broadcast
of Toledo, Inc., Nova Marketing Group, Inc., Noble Broadcast Licenses, Inc.,
Noble Broadcast of San Diego, Sports Radio, Inc. and Sports Radio Broadcasting,
Inc. in favor of Broadcast Finance.
"Noble-Company Security Documents" means the collective
reference to the Noble-Company Credit Agreement Guaranty and the Noble Pledge
Agreement.
"Noble Denver Stations" means the following stations located in
Denver, Colorado: KBCO-FM, KHIH-FM, KHOW-AM, AND KBCO-AM.
"Noble Documents" means the collective reference to the Noble
Warrants, the Noble Stock Purchase and Warrant Redemption Agreement, the Noble
Indemnification and Escrow Agreement, the Noble Stock Escrow and Security
Agreement, the Noble Registration Rights Agreement, the Noble Investment
Agreement, all Local Marketing Agreements and Joint Sales Agreements with
respect to the Noble Stations, the Noble-Company Credit Agreement, the
Noble-Company Security Documents and the San Diego Asset Purchase Agreement.
"Noble Document Assignment" means an assignment agreement
providing for the assignment by the Company of all of its right, title and
interest in the Noble Documents, in favor of the Agent for the ratable benefit
of the
14
<PAGE> 20
Banks, substantially in the form of Exhibit B hereto, duly completed, executed
and delivered to the Agent by the Company and duly acknowledged by Noble, as the
same may be amended, modified, supplemented or restated and in effect from time
to time.
"Noble Existing Indebtedness" means all of the Indebtedness of
Noble existing on the Closing Date before giving effect to the Transactions, as
more fully described on Schedule 1.1 hereto.
"Noble Holdings" means Noble Broadcast Holdings, Inc., a
Delaware corporation.
"Noble Indemnification and Escrow Agreement" means that certain
Indemnification and Escrow Agreement dated as of February ___ , 1996 by and
among the Company, Prudential Venture Partners II, L.P., Northeast Ventures, II,
John T. Lynch, Frank A. DeFrancesco, CIHC, Inc., Bankers Life Holding
Corporation, Noble, Noble Broadcast of San Diego and the Fifth Third Bank.
"Noble Investment Agreement" means that certain Investment
agreement dated as of February ___ , 1996 by and between the Company, Noble,
John T. Lynch, Frank A. DeFrancesco, Thomas R. Jimenez and William R. Arbenz
relating to the purchase by the Company of the Noble Warrants.
"Noble Pledge Agreement" means that certain Pledge Agreement
dated as of February ___ , 1996 by Noble Broadcast, Noble Broadcast Holdings,
Inc., Noble Broadcast of Colorado, Inc., Noble Broadcast of St. Louis, Inc.,
Noble Broadcast of Toledo, Inc., Nova Marketing Group, Inc., Noble Broadcast
Licenses, Inc., Noble Broadcast of San Diego, Sports Radio, Inc. and Sports
Radio Broadcasting, Inc. in favor of Broadcast Finance.
"Noble Registration Rights Agreement" means that certain
registration Rights Agreement dated as of February ___ , 1996 by and between the
Company and Noble.
"Noble Stations" means XETRA-FM, San Diego, California;
XETRA-AM, San Diego, California; KMJM-FM, St. Louis, Missouri; KATZ-FM, St.
Louis, Missouri; KNJZ-FM, St. Louis, Missouri; WVKS-FM, Toledo, Ohio; WRVF-FM,
Toledo, Ohio; WSPD-AM, Toledo, Ohio; and the Noble Denver Stations.
"Noble Stock" means all of the outstanding common stock
(including, without limitation, all Class A common stock and all Class B common
stock) of Noble.
"Noble Stock Escrow and Security Agreement" means that certain
Stock Escrow and Security Agreement dated as of February ___ , 1996 by and among
the Company, Prudential Venture Partners II, L.P., Northeast Ventures, II, John
T. Lynch, Frank A. DeFrancesco, Thomas R. Jimenez, William R. Arbenz and the
Fifth Third Bank.
"Noble Stock Purchase and Warrant Redemption Agreement" means
that certain Stock Purchase and Stock and Warrant Redemption Agreement dated as
of February ___, 1996 by and among the Company, Prudential, Venture Partners II,
L.P., Northeast Ventures, II, John T. Lynch, Frank A. DeFrancesco, Thomas R.
Jimenez, William R. Arbenz, CIHC, Inc., Bankers Life Holding Corporation, and
15
<PAGE> 21
Noble, as the same may be amended in accordance with the provisions of Section
6.30 hereof.
"Noble Warrants" means warrants with respect to 75% of the
non-voting stock of Noble.
"Nobro" means Nobro, S.A. de C.V., a Mexican corporation.
"Non-Compete Agreements" means any agreement under which the
Company or any Subsidiary agrees to pay money to Persons in exchange for
agreements from such Persons to refrain from competing with the Company or any
Subsidiary in a certain line of business in a specific geographical area for a
certain time period, but shall not include any employment agreement which
contains a non-compete clause with respect to which no payment or other
consideration from the Company or any of the Subsidiaries is or will at any time
be due and owing, payable or otherwise contemplated or required.
"Notes" means, collectively, the Revolving A Notes and the
Revolving B Notes.
"Obligations" means (i) all unpaid principal of and accrued and
unpaid interest on the Loans, all accrued and unpaid fees and all other
obligations of the Company and/or its Subsidiaries to the Banks or to any Bank,
the Agent, any Interest Rate Provider, any Co-Agent or any other Person arising
under the Loan Documents (other than the Noble Documents), and (ii) all
obligations of the Company (or any of its Affiliates) to the L/C Provider
arising under the Citicasters L/C Documents.
"Operating Cash Flow" means, with respect to the Company and
its consolidated Subsidiaries, for any period of calculation, the remainder of
(A) the remainder of (x) the revenue for such period which is classified as net
revenue (other than barter revenue) in the profit and loss statements delivered
pursuant to Sections 6.1(a) and 6.1(b) minus (y) those expenses which are
classified as operating expenses (other than barter expense, interest expense,
depreciation, amortization, and non-cash extraordinary items) for such period in
the profit and loss statements delivered pursuant to Sections 6.1(a) and 6.1(b)
minus (B) those expenses (excluding barter expense) classified as corporate
expenses for such period in the profit and loss statements delivered pursuant to
Sections 6.1(a) and 6.1(b), all calculated for the Company and the Subsidiaries
on a consolidated basis in accordance with Agreement Accounting Principles
consistently applied. For purposes of determining the Leverage Ratio hereunder,
unless otherwise agreed to by the Required Banks, (i) in the case of any
Subsidiary or Radio Station acquired by the Company or any Subsidiary during any
period of calculation, Operating Cash Flow shall be adjusted to give effect to
such acquisition, as if such acquisition occurred on the first day of such
period, by increasing, if positive, or decreasing, if negative, Operating Cash
Flow by the Operating Cash Flow of such newly acquired Subsidiary or derived
from such Radio Station during such period prior to the date of such acquisition
on a combined pro forma basis (as adjusted to eliminate costs which would be
non-recurring expense items after giving effect to such acquisition, provided,
such adjustments shall be specified in reasonable detail in a certificate
executed by an Authorized Officer of the Company), and (ii) in the case of any
Subsidiary or Radio Station sold, transferred or otherwise disposed of by the
Company or any Subsidiary during any period of calculation, Operating Cash Flow
shall be adjusted to give effect to such
16
<PAGE> 22
sale, transfer or other disposition, as if such disposition occurred on the
first day of such period, by decreasing, if positive, or increasing, if
negative, Operating Cash Flow by the Operating Cash Flow of such Subsidiary or
derived from such Radio Station during such period prior to the date of such
disposition.
"PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
"Permitted Acquisition" means, collectively, (i) the
Acquisition contemplated by the Noble Documents, (ii) the Acquisitions set forth
on Schedule 1.2 hereto, and (ii) at any time of determination, any other
Acquisition of a business engaged primarily in radio broadcasting by the Company
or any Subsidiary with respect to which each of the following requirements is
then met:
(a) Such Acquisition has been approved by the board of directors of
the entity to be acquired or, if such entity is in bankruptcy,
by the bankruptcy court having jurisdiction over the estate.
(b) As soon as available prior to consummation of such Acquisition,
the Company shall have furnished to the Agent for distribution
to each Bank (i) written notice describing such Acquisition,
(ii) all term sheets and other material draft and definitive
documentation relating to such Acquisition together with all
subsequent material revisions thereto and (iii) Acquisition
Pro-Formas relating to such Acquisition.
(c) Such Acquisition shall have been funded in its entirety with
the proceeds of a cash equity investment by holder(s) of the
capital stock of the Company (which equity investment shall
have been specifically earmarked for such Acquisition) or, if
such Acquisition is not so funded and if the Leverage Ratio of
the Company and its Subsidiaries would be greater than 5.0 to
1.00 after giving effect to such Acquisition (with, for the
purposes thereof, Operating Cash Flow calculated on a combined
pro forma basis for the twelve month period most recently ended
for which financial statements have been delivered pursuant to
Section 6.1 hereof), the Required Banks shall have given an
initial written consent to such Acquisition after their receipt
of initial draft documentation and Acquisition Pro Formas
relating to such Acquisition and, if such draft documentation
or Acquisition Pro Formas shall change in any material respect
prior to the consummation of such Acquisition, the Required
Banks shall have given their written consent to such changes,
provided however, without regard to the Leverage Ratio set
forth above in this clause (c), the consent of the Required
Banks shall not be required for In-Market Acquisitions, the
aggregate value of which do not exceed $40,000,000 during the
term of this Agreement. Each Bank agrees to use its reasonable
best efforts to respond to a Permitted Acquisition for which
its consent is required under this clause (c) within seven
Business Days of its receipt of initial documentation
conforming to the requirements hereof and Acquisition Pro
Formas pursuant to clause (b) above and to respond to any
subsequent revisions thereto within three Business Days of its
receipt thereof.
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<PAGE> 23
(d) The Company, such Subsidiary and/or the entity to be acquired,
as appropriate, shall have executed and delivered and furnished
to the Agent and the Banks, concurrently with the consummation
of such Acquisition, such documents as shall be required
pursuant to Section 2.17 and, if such Acquisition is to be
consummated by a Subsidiary, such Subsidiary shall have
executed and delivered to the Company an Intercompany
Acquisition Note in a principal amount equal to the amount, if
any, of any Intercompany Acquisition Loan made by the Company
to such Subsidiary to fund such Acquisition, and such
Intercompany Acquisition Note shall have been duly pledged by
the Company to the Agent pursuant to the Company Pledge
Agreement.
(e) Prior to and after giving effect to such Acquisition, no
Default or Unmatured Default will exist.
(f) Without the prior written consent of the Required Banks, such
Acquisition would not cause Operating Cash Flow, on a combined
pro forma basis for the most recent twelve-month period after
giving effect to such Acquisition, attributable to the radio
broadcast market in which the to-be-acquired radio broadcast
station is located to exceed 40% of such pro forma Operating
Cash Flow of the Company and the Subsidiaries on a consolidated
basis.
(g) After giving effect to such Acquisition, the Company would not
be in violation of any financial covenant contained in Section
6.3 of this Agreement, in each case measured as at the
effective date of such Acquisition, and on a projected pro
forma basis for the remaining term of the Agreement, and in the
case of calculations of the Leverage Ratio, with Operating Cash
Flow measured on a combined pro forma basis for the twelve
month period most recently ended for which financial statements
have been delivered pursuant to Section 6.1 hereof.
(h) The Agent and the Banks shall have received (i) an executed
Acquisition Certificate, and (ii) evidence satisfactory to the
Agent and the Banks and their respective counsel that the
Company and the Subsidiaries shall have made all applications,
filings and registrations with the FCC and other federal, state
and local regulatory or governmental bodies or authorities that
are or may be required to obtain all approvals, orders,
authorizations, licenses, certificates and permits necessary
for the consummation of such Acquisition.
"Permitted Stock Repurchases" means repurchases by the 0
Company of the Company's stock which do not exceed, on an aggregate basis during
the term of this Agreement, an amount equal to, (a) $25,000,000 to the extent
the Leverage Ratio is below 5.00 to 1.00 (after giving effect to any such
proposed repurchase) on a pro forma consolidated basis for a period of two
consecutive quarters preceding such repurchase, or (b) $40,000,000 to the extent
the Leverage Ratio is below 4.00 to 1.00 (after giving effect to any such
proposed repurchase) on a pro forma consolidated basis for a period of two
consecutive quarters preceding such repurchase, provided that (i) no Permitted
Stock Repurchase shall occur at any time when the Leverage Ratio is at or above
5.00 to 1.00, and (ii) the amounts set forth in clauses (a) and (b) above shall
be
18
<PAGE> 24
reduced by an amount equal to the aggregate amount of voluntary redemptions by
the Company of its outstanding warrants pursuant to subclause (iv) of Section
6.10 hereof.
"Person" means any corporation, natural person, firm, joint
venture, partnership, trust, unincorporated organization, enterprise, government
or any department or agency of any government.
"Plan" means an employee pension benefit plan which is covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Internal Revenue Code and which is sponsored or maintained by the
Company, any Subsidiary or any ERISA Affiliate for employees of the Company, any
Subsidiary or any ERISA Affiliate.
"Proceeds Application Period" means, with respect to any
Permitted Acquisition, a period of up to 275 days from the date of receipt of
any Net Cash Proceeds, which 275 day period may be extended up to an additional
184 days (the "Extended Period") if the consummation of such Permitted
Acquisition is subject only to the approval of the FCC and, prior to the 275th
day after receipt of such Net Cash Proceeds, the Company or its applicable
Subsidiary, (a) has received a duly executed letter of intent with respect to
such Permitted Acquisition, and (b) is diligently proceeding with the
preparation of all applications and other documents necessary to obtain (and at
all times during the Extended Period continues to actively pursue) FCC approval
for such Permitted Acquisition.
"Pro Rata Share" means, at any time, with respect to any Bank,
the ratio (expressed as a percentage) that such Bank's Commitment at such time
bears to the Aggregate Commitment at such time.
"Radio Stations" means, collectively, the following radio
stations and radio network and any other broadcast radio stations or information
services now or hereafter owned, acquired or operated pursuant to a Joint Sales
Agreement, a Local Marketing Agreement or the Mexican Sales Agency Agreement, as
the case may be, by the Company and one or more Subsidiaries or by the Company
or one or more Subsidiaries: WGST-AM, Atlanta, Georgia; WGST-FM, Atlanta,
Georgia; WPCH-FM, Atlanta, Georgia; WLW-AM, Cincinnati, Ohio; WEBN-FM,
Cincinnati, Ohio; WCKY-AM, Cincinnati, Ohio; WSAI-AM, Cincinnati, Ohio; WOFX-FM,
Cincinnati, Ohio; WAQZ-FM, Cincinnati, Ohio; WAOZ-AM, Cincinnati, Ohio; KOA-AM,
Denver, Colorado; KRFX-FM, Denver, Colorado; KBPI-FM, Denver, Colorado; KTLK-AM,
Denver, Colorado; KTCL-FM, Denver, Colorado; WQIK-FM, Jacksonville, Florida;
WSOL-FM, Jacksonville, Florida; WJBT-FM, Jacksonville, Florida; WZAZ-AM,
Jacksonville, Florida; WJGR-AM, Jacksonville, Florida; KHTS-FM, San Diego,
California WMYU-FM, Knoxville, Tennessee; WWST-FM, Knoxville, Tennessee;
WFLA-AM, Tampa, Florida; WFLZ-FM, Tampa, Florida; WDUV-FM, Tampa, Florida;
WBRD-AM, Tampa, Florida; the Georgia News Network; Critical Mass Media, and the
Noble Stations (other than the Noble Denver Stations except to the extent set
forth in the immediately succeeding sentence). The term "Radio Stations" shall
also include the Noble Denver Stations to the extent (but only to the extent)
that the Company and its Subsidiaries, or the Company or any of its
Subsidiaries, currently owns or is operating (whether pursuant to a Joint Sales
Agreement, a Local Marketing Agreement or otherwise) the Noble Denver Stations.
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<PAGE> 25
"Rate Hedging Agreements" means the collective reference to
those interest rate protection agreements entered into by the Company pursuant
to Section 6.22(a) of this Agreement as the same may be amended, modified,
supplemented or restated from time to time.
"Rate Option" means the Eurodollar Rate or the Floating Rate,
as the case may be.
"R.D.P." means Radiodifursora del Pacifico, S.A., a Mexican
Corporation.
"Receivables" means and shall include all of the Company's and
the Subsidiaries' present and future rights to payment for services rendered or
products sold.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Rentals" of a Person means the aggregate fixed amounts (other
than taxes, insurance, maintenance, utility and other operating expenses)
payable by such Person under any lease of real or personal property having an
original term (including any required renewals or any renewals at the option of
the lessor or lessee, provided, however, that in those cases in which the lessee
has the option to renew the lease, the amount payable pursuant to such lease is
counted only when the lessee exercises its option to renew) of one year or more
but does not include any amounts payable under Capitalized Leases of such
Person.
"Reportable Event" means a reportable event as defined in
Section 4043 of ERISA and the regulations issued under such Section, with
respect to a Plan, excluding, however, such events as to which the PBGC by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event, provided that a failure
to meet the minimum funding standards of Section 412 of the Internal Revenue
Code and of Section 302 of ERISA shall be a reportable event regardless of the
issuance of any such waivers in accordance with Section 412(d) of the Internal
Revenue Code.
"Required Banks" means Banks having in the aggregate at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Banks holding in the aggregate at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Loans.
"Reserved Proceeds Amount" shall have the meaning set forth in
Section 2.8(b) hereto.
"Reserve Requirement" means, with respect to an Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on eurocurrency liabilities.
"Restricted Payments" is defined in Section 6.10.
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<PAGE> 26
"Revolving A Loans" is defined in Section 2.1.
"Revolving A Loan Commitment" means, for each Bank, the
obligation of such Bank to make Revolving A Loans in an aggregate principal
amount at any time not exceeding the amount set forth opposite its name on
Schedule I hereto under the column titled "Revolving A Loan Commitment," as such
amount shall be reduced from time to time pursuant to the terms of this
Agreement.
"Revolving A Loan Commitment Reduction Amount" means, for each
Revolving A Loan Commitment Reduction Date and subject to Section 2.8(h), the
amount set forth opposite such Revolving A Loan Commitment Reduction Date:
<TABLE>
<CAPTION>
On each Revolving A Loan Revolving A Loan
Commitment Reduction Date Occurring: Commitment Reduction Amount
- ------------------------------------ ---------------------------
<S> <C>
After January 1, 1997 $2,500,000
but on or prior to December 31, 1997
After January 1, 1998 $3,750,000
but on or prior to December 31, 1998
After January 1, 1999 $5,312,500
but on or prior to December 31, 1999
After January 1, 2000 $6,375,000
but on or prior to December 31, 2000
After January 1, 2001 $7,225,000
but on or prior to December 31, 2001
After January 1, 2002 $8,200,000
but on or prior to December 31, 2002
After January 1, 2003, $14,137,500
but prior to December 31, 2003
</TABLE>
"Revolving A Loan Commitment Reduction Date" means each March
31, June 30, September 30 and December 31 of each year, commencing with March
31, 1997, provided that the last Revolving A Loan Commitment Reduction Date
shall occur on December 31, 2003.
"Revolving A Loan Termination Date" shall mean December 31,
2003 or such earlier date as the Revolving A Loan Commitments of the Banks shall
be terminated pursuant to the terms of this Agreement.
"Revolving A Notes" means the collective reference to the
several promissory notes, each in substantially the form of Exhibit A-1 hereto,
duly completed, executed and delivered to the Agent by the Company and payable
to the order of each Bank in the amount of its original Revolving A Loan
Commitment, as each such note may be amended, modified, supplemented, restated
or replaced from time to time.
"Revolving B Loans" is defined in Section 2.2.
21
<PAGE> 27
"Revolving B Loan Commitment" means, for each Bank, the
obligation of such Bank to make Revolving B Loans in an aggregate principal
amount at any time not exceeding the amount set forth opposite its name on
Schedule I hereto under the column titled "Revolving B Loan Commitment," as such
amount shall be reduced from time to time pursuant to the terms of this
Agreement.
"Revolving B Loan Commitment Reduction Amount" means, for each
Revolving B Loan Commitment Reduction Date and subject to Section 2.8(h), the
amount set forth opposite such Revolving B Loan Commitment Reduction Date:
<TABLE>
<CAPTION>
On each Revolving B Loan Revolving B Loan
Commitment Reduction Date Occurring: Commitment Reduction Amount
- ------------------------------------ ---------------------------
<S> <C>
After January 1, 1998 $5,000,000
but on or prior to December 31, 1998
After January 1, 1999 $5,000,000
but on or prior to December 31, 1999
After January 1, 2000 $5,000,000
but on or prior to December 31, 2000
After January 1, 2001 $5,000,000
but on or prior to December 31, 2001
After January 1, 2002 $5,000,000
but on or prior to December 31, 2002
After January 1, 2003 $2,500,000
but on and prior to December 31, 2003
</TABLE>
"Revolving B Loan Commitment Reduction Date" means each March
31, June 30, September 30 and December 31 of each year, commencing with March,
31 1998, provided that the last Revolving B Loan Commitment Reduction Date shall
occur on December 31, 2003.
"Revolving B Loan Termination Date" shall mean December 31,
2003 or such earlier date as the Revolving B Loan Commitments of the Banks shall
be terminated pursuant to the terms of this Agreement.
"Revolving B Notes" means the collective reference to the
several promissory notes, each in substantially the form of Exhibit A-2 hereto,
duly completed, executed and delivered to the Agent by the Company and payable
to the order of each Bank in the amount of its original Revolving B Loan
Commitment, as each such note may be amended, modified, supplemented, restated
or replaced from time to time.
"San Diego Asset Purchase Agreement" means that certain Asset
Purchase Agreement dated as of February __, 1996 by and among Chesapeake
Securities, Inc., Noble Broadcast of San Diego, Sports Radio, Inc., Noble
Broadcast Center, Inc. and Nobro, relating to the purchase by Chesapeake
Securities, Inc. of the San Diego Property as such agreement may be amended in
accordance with the provisions of Section 6.30 hereof.
22
<PAGE> 28
"San Diego Proceeds" means all Net Cash Proceeds realized from
any transfer, sale or other disposition of (i) any assets of the Company or any
of its Subsidiaries in (or around) San Diego, California, or with respect to is
operations in (or around) San Diego, California which were purchased pursuant to
the San Diego Asset Purchase Agreement, or (ii) the Company's or any of its
Subsidiaries interest in the San Diego Asset Purchase Agreement.
"San Diego Property" means the office and studio building,
land, towers, equipment, furniture and fixtures, contracts (including, without
limitation, the Mexican Sales Agency Agreement) and employment agreements of
Noble Broadcast of San Diego Sports Radio, Inc., Noble Broadcast Center, Inc.
and Nobro.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Solvent" as to any Person shall mean that (i) the sum of the
assets of such Person, both at a fair valuation and at present fair salable
value, will exceed its liabilities, including contingent liabilities, (ii) such
Person will have sufficient capital with which to conduct its business as
presently conducted and as proposed to be conducted and (iii) such Person has
not incurred debts, and does not intend to incur debts, beyond its ability to
pay such debts as they mature. For purposes of this definition, "debt" means any
liability on a claim, and "claim" means (x) a right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, or (y) a right to an equitable remedy for breach of performance if
such breach gives rise to a payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured, or unsecured. With respect to any such contingent
liabilities, such liabilities shall be computed at the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can reasonably be expected to become an actual or matured liability.
"Subsidiary" means (i) any corporation more than 50% of the
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Company and/or by one or more of the Subsidiaries and (ii)
any partnership, association, joint venture or other entity in which the Company
and/or one or more of its Subsidiaries is either a general partner or has a 50%
or more equity interest at the time.
"Subsidiary Guaranty" means a guaranty in substantially the
form of Exhibit J hereto, duly completed, executed and delivered to the Agent by
each Subsidiary (other than the Excluded Subsidiaries), as the same may be
amended or modified and in effect from time to time.
"Subsidiary Mortgages" means, collectively, (i) the mortgages
in substantially the form of Exhibits C-2, C-3, C-4 and C-5 hereto, duly
completed, executed and delivered to the Agent by Jacor Broadcasting of Florida,
Inc., Jacor Broadcasting of Tampa Bay, Inc., Jacor Broadcasting of Atlanta,
Inc., Jacor Broadcasting of Colorado, Inc., and Jacor Broadcasting Corporation,
covering the real property located in Duval County, Florida, Hillsborough
County, Florida, St. Johns County, Florida, Manatee County, Florida, Fulton
County, Georgia, Douglas County, Colorado, Weld County
23
<PAGE> 29
Colorado and Warren County, Ohio, Hamilton Counnty, Ohio, respectively, and (ii)
any other mortgage or deed of trust hereinafter delivered by a Subsidiary
pursuant to Section 2.17, as each such mortgage or deed of trust may be amended,
modified, supplemented or restated and in effect from time to time.
"Subsidiary Pledge Agreements" means, collectively, (i) a
subsidiary primary pledge agreement in the form of Exhibit D-2 and Exhibit D-3,
duly completed, executed and delivered to the Agent by Jacor Broadcasting of
Atlanta, Inc. and Chesapeake Securities, Inc. respectively, (ii) a subsidiary
secondary pledge agreement in the form of Exhibit D-4 and Exhibit D-5, duly
completed, executed and delivered to the Agent by Jacor Broadcasting of Atlanta,
Inc. and Chesapeake Securities, Inc., respectively, and (iii) any other
subsidiary pledge agreement substantially in the form of Exhibit D-2 or D-4
hereto, as the case may be, duly completed, executed and delivered by a
Subsidiary pursuant to Section 2.17, as the same may be amended, modified,
supplemented or restated from time to time.
"Subsidiary Security Agreement" means a security agreement in
substantially the form of Exhibit E-2 hereto, duly completed, executed and
delivered to the Agent by each Subsidiary other than the Excluded Subsidiaries,
as the same may be amended, modified, supplemented or restated and in effect
from time to time.
"Subsidiary Trademark Agreements" means, collectively, (i) the
subsidiary trademark security agreement in the form of Exhibit N-2, duly
completed, executed and delivered to the Agent by Jacor Broadcasting of Tampa
Bay, Inc. and (ii) any other subsidiary trademark security agreement
substantially in the form of Exhibit N-2 hereto, duly completed, executed and
delivered by a Subsidiary pursuant to Section 2.17, as the same may be amended,
modified, supplemented or restated from time to time.
"Surviving Debt" is defined in Section 5.18(b).
"Total Debt" means, at any time of determination and without
duplication, the sum of (i) the aggregate principal amount of the Loans and any
due and unpaid interest thereon at such time and (ii) the principal component of
Indebtedness of the Company and the Subsidiaries of the type set forth in the
definition of "Indebtedness" contained herein.
"Transactions" is defined in Section 4.1(l).
"Transferee" is defined in Section 12.3.3.
"Unfunded Liabilities" means (i) in the case of Plans that are
not Multiemployer Plans, the amount (if any) by which the present value of all
benefit liabilities (as defined in Section 4001(a) of ERISA) under such Plan
exceeds the fair market value of all Plan assets allocable to such benefit
liabilities, all determined as of the then most recent valuation date for such
Plan, and (ii) in the case of Multiemployer Plans, the withdrawal liability of
the Company and the Subsidiaries.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
24
<PAGE> 30
"Wholly-Owned Subsidiary" means any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by the Company or one or more Wholly-Owned Subsidiaries.
"Working Capital" shall mean at any time an amount equal to
Current Assets minus Current Liabilities at such time.
"Z/C" means Zell/Chilmark Fund, L.P., a Delaware limited
partnership and its successors and assigns.
The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
Section 1 Revolving A Loans.
(a) From and including the Closing Date to but excluding
the Revolving A Loan Termination Date, each Bank severally agrees, on the terms
and subject to the conditions set forth in this Agreement, to make Loans to the
Company from time to time (the "Revolving A Loans") in an aggregate amount
outstanding at any time not to exceed its Revolving A Loan Commitment. The
Revolving A Loan Commitment of each Bank shall be automatically and permanently
reduced (i) on each Revolving A Loan Commitment Reduction Date in an amount
equal to such Bank's Pro-Rata Share of the applicable Revolving A Loan
Commitment Reduction Amount for such Revolving A Loan Commitment Reduction Date,
and (ii) in accordance with the terms and provisions of Section 2.8(h).
(b) The Revolving A Loans shall be evidenced by the
Revolving A Notes.
(c) The Revolving A Loans shall be Floating Rate Loans
or, at the Company's option and subject to the terms hereof, Eurodollar Loans.
(d) Subject to the mandatory repayment obligations of the
Company provided for in this Agreement, the Revolving A Loans shall be repaid to
the Banks in full on the Revolving A Loan Termination Date. Within the limits
and subject to the terms and conditions herein set forth, Revolving A Loans may
be borrowed, repaid and reborrowed from time to time.
(e) The Company shall use the proceeds of the Revolving A
Loans for the following purposes: (i) to repay its obligations with respect to
the Existing Debt, (ii) for the purchase of the San Diego Property pursuant to
the San Diego Asset Purchase Agreement, (iii) to purchase the Noble Warrants
pursuant to the Noble Stock Purchase and Warrant Redemption Agreement, and (iv)
to repay Noble's existing indebtedness (A) under a credit agreement with Chase
Manhattan, N.A. as agent, and (B) to Barclays Business Credit, Inc. (or its
successor). In addition, the Revolving A Loans may be used for working capital
and other general corporate purposes, and to the extent applicable pursuant to
Section 2.8(b), for Permitted Acquisitions during the Proceeds Application
Period.
25
<PAGE> 31
Section 2 Revolving B Loans.
(a) From and including the Closing Date to but excluding
the Revolving B Loan Termination Date, each Bank severally agrees, on the terms
and subject to the conditions set forth in this Agreement, to make Loans to the
Company from time to time (the "Revolving B Loans") in an aggregate amount
outstanding at any time not to exceed its Revolving B Loan Commitment. The
Revolving B Loan Commitment of each Bank shall be automatically and permanently
reduced on each Revolving B Loan Commitment Reduction Date in an amount equal to
such Bank's Pro-Rata Share of the applicable Revolving B Loan Commitment
Reduction Amount for such Revolving B Loan Commitment Reduction Date.
(b) The Revolving B Loans shall be evidenced by the
Revolving B Notes.
(c) The Revolving B Loans shall be Floating Rate Loans
or, at the Company's option and subject to the terms hereof, Eurodollar Loans.
(d) Subject to the mandatory repayment obligations of the
Company provided for in this Agreement, the Revolving B Loans shall be repaid to
the Banks in full on the Revolving B Loan Termination Date. Within the limits
and subject to the terms and conditions herein set forth, Revolving B Loans may
be borrowed, repaid and reborrowed from time to time.
(e) The Company may use the proceeds of the Revolving B
Loans to fund Permitted Acquisitions, Permitted Stock Repurchases, for working
capital and other general corporate purposes, and to the extent applicable
pursuant to Section 2.8(b), for Permitted Acquisitions during the Proceeds
Application Period. Notwithstanding the foregoing, the Company shall only use up
to $14,000,000 of the proceeds from the Revolving B Loans to purchase the Noble
Stock pursuant to the Noble Stock Purchase and Warrant Redemption Agreement.
Section 3 Interest.
(a) The Company agrees to pay interest in respect of the
unpaid principal amount of each Floating Rate Loan from the date of the making
or conversion of such Loan until such Loan shall be paid in full at a rate per
annum equal to the Floating Rate, such interest to be computed on the basis of a
365- or 366-day year, as appropriate.
(b) The Company agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of the making,
continuation or conversion of such Loan until such Loan shall be paid in full at
a rate per annum which shall be equal to the Eurodollar Rate, such interest to
be computed on the basis of a 360-day year.
(c) In the event that, and for so long as, any Default
shall have occurred and be continuing, the outstanding principal amount of all
Loans and, to the extent permitted by law, overdue interest in respect of all
Loans, shall bear interest at a rate per annum (the "Default Rate") equal to the
sum of two percent (2%) plus the interest rate otherwise applicable hereunder to
such principal amount in effect from time to time.
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<PAGE> 32
(d) Interest on each Loan shall accrue from and including
the date of the borrowing thereof to but excluding the date of any repayment
thereof (provided that any Loan borrowed and repaid on the same day shall accrue
one day's interest) and shall be payable (i) in respect of each Floating Rate
Loan, quarterly in arrears on the last day of each March, June, September and
December of each year, commencing on March 31, 1996, (ii) in respect of each
Eurodollar Loan, on the last day of each Interest Period applicable to such Loan
and, in the case of an Interest Period of six months, on the date occurring
three months from the first day of such Interest Period and on the last day of
such Interest Period, and (iii) in the case of all Loans, on any prepayment or
conversion (on the amount prepaid or converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
Section 4 Applicable Margin. The Applicable Margin shall be
subject to adjustment (upwards or downwards, as appropriate) based on the
Leverage Ratio at the end of each of the first three fiscal quarters and the
fiscal year of the Company. The Leverage Ratio shall be determined (i) for the
period from the Closing Date until the Company delivers its monthly financial
statements for the period ending as at March 31, 1996, by determining Total Debt
on the Closing Date after giving effect to the making of the Loans and the
consummation of the other Transactions which are consummated on such date and by
determining Operating Cash Flow for the twelve-month period ending December 31,
1995, (ii) in the case of determinations made with respect to the first three
fiscal quarters of the Company's fiscal year thereafter, by reference to the
monthly financial statements for the month ending on the last day of such fiscal
quarter and the Compliance Certificate for such fiscal quarter delivered
pursuant to Sections 6.1(b) and (d) and (iii) in the case of determinations made
with respect to the last fiscal quarter of the Company's fiscal year, by
reference to the financial statements and Compliance Certificate delivered by
the Company pursuant to Sections 6.1(a) and (d), provided that for the purposes
of clauses (i), (ii) and (iii) above, for all periods prior to the purchase of
the Noble Stock pursuant to the Noble Stock Purchase and Warrant Redemption
Agreement, all calculations shall be made on a combined pro forma basis
(excluding the Noble Denver Stations other than, to the extent applicable, the
Noble Denver Stations which are subject to a Local Marketing Agreement) as if
such Noble Stock had been purchased on or prior to the first day of such period,
all as certified to by an Authorized Officer of the Company, and attaching to
such certificate, combined pro forma financial statements in support of such
calculations. The adjustment, if any, to the Applicable Margin shall be
effective commencing on the fifth Business Day after the delivery of such
quarterly or annual financial statements and Compliance Certificate and shall be
effective only for the period subsequent to such date. In the event that the
Company shall at any time fail to furnish to the Banks the financial statements
and Compliance Certificate required to be delivered pursuant to Section 6.1(a),
(b) or (d), the maximum Applicable Margin shall apply until such time as such
financial statements and Compliance Certificate are so delivered to the Agent.
27
<PAGE> 33
<TABLE>
<CAPTION>
Applicable Margin
-----------------
Floating Eurodollar
Leverage Ratio Rate Rate
- -------------- -------- ----------
<S> <C> <C>
Greater than or equal to 6.5:1.0 1.750% 3.000%
Less than 6.5:1.0 but greater than or equal to 1.500% 2.750%
6.25:1.00
Less than 6.25:1.0 but greater than or equal to 1.375% 2.625%
6.0:1.0
Less than 6.0:1.0 but greater than or equal to 1.125% 2.375%
5.5:1.0
Less than 5.5:1.0 but greater than or equal to 0.875% 2.125%
5.0:1.0
Less than 5.0:1 but greater than or equal to 0.625% 1.875%
4.5:1.0
Less than 4.5:1 but greater than or equal to 0.375% 1.625%
4.0:1.0
Less than 4.0:1 but greater than or equal to 0.000% 1.250%
3.5:1.0
Less than 3.5:1.0 0.000% 1.000%
</TABLE>
Section 5 Borrowing Notice. Whenever the Company desires to
borrow Revolving A Loans or Revolving B Loans hereunder, it shall give the Agent
at or prior to 10:00 A.M., Chicago time, at least one Business Day's prior
facsimile or telephonic notice (promptly confirmed in writing) of each Floating
Rate Loan, and at least three Business Days' prior facsimile or telephonic
notice (promptly confirmed in writing) of each Eurodollar Loan to be made
hereunder. Each such notice (a "Borrowing Notice") shall be irrevocable and
shall specify (i) the aggregate principal amount of the requested Loans, (ii)
whether such Loans shall be Revolving A Loans or Revolving B Loans, (iii) the
date of borrowing (which shall be a Business Day), and (iv) whether such Loans
shall consist of Floating Rate Loans or Eurodollar Loans and, if Eurodollar
Loans, the initial Interest Period to be applicable thereto. Promptly after its
receipt of a Borrowing Notice, the Agent shall provide each Bank with a copy
thereof and inform each Bank as to its Pro Rata Share of the Advance requested
thereunder.
Section 6 Disbursement of Funds.
(a) No later than noon, Chicago time, on the date
specified in each Borrowing Notice, each Bank will make available its Pro Rata
Share of the Advance requested to be made on such date, in U.S. dollars and
immediately available funds, to the Agent. After the Agent's receipt of the
proceeds of such Loans, the Agent will make available to the Company the
aggregate of the amounts so made available in the type of funds actually
received.
(b) Unless the Agent shall have been notified by any Bank
prior to the date of a borrowing that such Bank does not intend to make avail-
28
<PAGE> 34
able to the Agent its portion of the Loans to be made on such date, the Agent
may assume that such Bank has made such amount available to the Agent on such
date and the Agent in its sole discretion may, in reliance upon such assumption,
make available to the Company a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Bank and the Agent has
made such amount available to the Company, the Agent shall be entitled to
recover such corresponding amount on demand from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Company and the Company shall immediately
repay such corresponding amount to the Agent. The Agent shall also be entitled
to recover from such Bank or the Company, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Company to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to,
with respect to the Company, the then applicable rate of interest, calculated in
accordance with Section 2.3, for the respective Loans and with respect to the
Banks, the Federal Funds Rate. Nothing herein shall be deemed to relieve any
Bank from its obligation to fulfill its commitments hereunder or to prejudice
any rights which the Company may have against any Bank as a result of any
default by such Bank hereunder. Notwithstanding anything contained herein or in
any other Loan Document to the contrary, the Agent may apply all funds received
from the Company and proceeds of Collateral available for the payment of any
Obligations first to repay any amount owing by any Bank to the Agent as a result
of such Bank's failure to fund its Loans hereunder.
Section 7 Interest Periods, etc.
(a) The Company shall, in each Borrowing Notice or
Conversion/Continuation Notice in respect of the making of, conversion into or
continuation of a Eurodollar Loan, select the interest period (each an "Interest
Period") applicable to such Eurodollar Loan, which Interest Period shall, at the
option of the Company, be either a one-month, two- month, three-month or
six-month period, provided that:
(i) the initial Interest Period for any Eurodollar Loan
shall commence on the date of the making of such Loan (including the date
of any conversion from a Floating Rate Loan) and each Interest Period
occurring thereafter in respect of such Loan shall commence on the date on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided, however, that if any Interest
Period would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iii) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period
29
<PAGE> 35
shall end on the last Business Day of such calendar month;
(iv) no Interest Period in respect of any Revolving A
Loan or Revolving B Loan shall extend beyond the Revolving A Loan Termi-
nation Date or the Revolving B Loan Termination Date, as the case may be;
and
(v) no Interest Period applicable to any Revolving A Loan
or Revolving B Loan shall extend beyond any Revolving A Loan Commitment
Reduction Date or Revolving B Loan Commitment Reduction Date, respec-
tively, unless the aggregate principal amount of Revolving A Loans or
Revolving B Loans, respectively, represented by Floating Rate Loans or by
Fixed Rate Loans having Interest Periods which will not expire on or before
such date equals or is less than the amount of the Revolving A Loan
Commitment or Revolving B Loan Commitment, respectively, in effect
immediately after the Revolving A Loan Commitment Reduction Date or
Revolving B Loan Commitment Reduction Date, respectively.
(b) If upon the expiration of any Interest Period, the
Company has failed to repay the Eurodollar Loans expiring on such day or has
failed to elect a new Interest Period to be applicable to the respective
Eurodollar Loan as provided above, the Company shall be deemed to have elected
to convert such Eurodollar Loans into Floating Rate Loans effective as of the
expiration date of such current Interest Period.
(c) Notwithstanding anything contained herein to the
contrary, the Company may not borrow any Eurodollar Loan if, at the time of such
borrowing, a Default or Unmatured Default shall have occurred and be continuing
on such date either before or after giving effect to the borrowing.
Section 8 Mandatory Principal Payments.
(a) If on any day the aggregate principal amount of the
Revolving A Loans or the Revolving B Loans then outstanding exceeds the
Aggregate Revolving A Loan Commitment or the Aggregate Revolving B Loan
Commitment, respectively, the Company shall immediately repay the Revolving A
Loans or the Revolving B Loans, as the case may be, in an amount equal to such
excess.
(b) Promptly, but in any event within two Business Days
after the sale, transfer or other disposition after the Closing Date (including,
without limitation, any disposition accomplished by way of a merger or a series
of transactions) of any property, asset or business (including, without
limitation, any Radio Station) to any Person other than the Company or any
Subsidiary (excluding any sale, transfer or other disposition of (A) inventory
in the ordinary course of business, and (B) used, worn-out or obsolete equipment
no longer useful to the business in the ordinary course of business to the
extent that an amount equal to the net cash proceeds realized therefrom is used
to purchase replacement or substitute equipment within 180 days), the Company
shall make a mandatory payment in respect of the Obligations in an amount equal
to 100% of the net cash proceeds (after taxes, reasonable fees and reasonable
expenses incurred directly in connection therewith) realized from such sales,
transfers or other dispositions occurring after the Closing
30
<PAGE> 36
Date, all as certified to by an Authorized Officer of the Company (collectively,
"Net Cash Proceeds"). Notwithstanding the foregoing mandatory prepayment, in
connection with a Permitted Acquisition during the Proceeds Application Period,
the Company may deliver a Borrowing Notice pursuant to which the Company may
request a Revolving A Loan in an amount up to the amount of Net Cash Proceeds
(less any Denver Proceeds and any San Diego Proceeds included in such Net Cash
Proceeds) realized from any transfer, sale or other disposition, which amount
shall be applied solely to fund a Permitted Acquisition (the "Reserved Proceeds
Amount"). To the extent that the requested Reserved Proceeds Amount is in excess
of the then remaining Aggregate Revolving A Loan Commitment (the amount by which
such request exceeds the remaining Aggregate Revolving A Loan Commitment, the
"Shortfall Amount"), the Company may include in the Borrowing Notice a request
for a Revolving B Loan in the amount of such Shortfall Amount. Any such request
pursuant to this Section 2.8(b) for a Revolving A Loan, and to the extent
applicable, a Revolving B Loan, in an aggregate principal amount up to the
Reserved Proceeds Amount, shall be subject to all other terms and provisions of
this Agreement, including, without limitation, the other provisions of this
Article II and the satisfaction of the conditions to all Loans set forth in
Section 4.2 hereof. All mandatory payments of the Obligations made pursuant to
this subsection (b) shall be applied as set forth in subsection (h) below.
(c) Within two Business days of the receipt by the
Company or any Subsidiary of any proceeds from the Mexican Guaranty, the Company
shall make a mandatory prepayment in an amount equal to 100% of the net cash
proceeds (after taxes, reasonable fees and reasonable expenses incurred directly
in connection therewith) realized from such Mexican Guaranty, all as certified
to by an Authorized Officer of the Company (the "Mexican Guaranty Proceeds").
Any prepayment of the Obligations pursuant to this subsection (c) shall be
applied as set forth in subsection (h) below.
(d) Within seven Business Days of (i) the receipt by the
Company or any of its Subsidiaries of any Equity Cash Proceeds in excess of
$2,000,000 during any fiscal year, the Company shall make a mandatory prepayment
with respect to the Obligations in an amount equal to up to 50% of such Equity
Cash Proceeds until such time as the amount of such mandatory prepayment, after
giving effect to such mandatory prepayment, shall cause the Leverage Ratio of
the Company to be equal to (or less than) 5.0 to 1.0., or (ii) the receipt by
the Company or any of its Subsidiaries of any Debt Cash Proceeds, the Company
shall make a mandatory prepayment with respect to the Obligations in an amount
equal to 100% of such Debt Cash Proceeds. Any prepayment of the Obligations
pursuant to this subsection (d) shall be applied as set forth in subsection (h)
below.
(e) Within 90 days of the end of any fiscal year of the
Company, commencing with the fiscal year ending December 31, 1997, the Company
shall make a mandatory prepayment with respect to the Obligations in an amount
equal to 50% of the Excess Cash Flow of the Company, provided, however, with
respect to Excess Cash Flow, no such mandatory prepayment shall be required if,
for the previous two consecutive quarters, the Leverage Ratio of the Company
shall have been less than 4.0 to 1.00. Any prepayment of the Obligations
pursuant to this subsection (e) shall be applied as set forth in subsection (h)
below.
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(f) For the purposes of determining Net Cash Proceeds,
Mexican Guaranty Proceeds, Equity Cash Proceeds and Debt Cash Proceeds, the
Company or a Subsidiary shall be deemed to have received in cash the aggregate
amount of all payments received by the Company or any Subsidiary on any
contract, promissory note or other instrument taken or effected in connection
with any sale, transfer or other disposition of any property asset or business
or equity securities, as the case may be, at the time such cash payment is
received.
(g) The Company shall make a mandatory payment with
respect to the Obligations in an amount equal to any proceeds received by the
Company or any Subsidiary from damage, boiler, machinery and business
interruption insurance or from any condemnation claim or award if and to the
extent that such proceeds, claims or awards are not promptly applied to the
restoration, repair or replacement of the properties so affected, and in any
event to the extent that such proceeds, claims or awards have not been so
applied in full within 180 days. Within two Business Days of receipt of any tax
refund by the Company or any Subsidiary, the Company shall make a mandatory
payment with respect to the Obligations in an amount equal to any proceeds from
such tax refund. Any prepayment of the Obligations pursuant to this subsection
(g) shall be applied as set forth in subsection (h) below.
(h) Mandatory payments made pursuant to subsections (b),
(c), (d), (e) and (g) of this Section 2.8 shall be applied first to repay the
Revolving A Loans until the Revolving A Loans are paid in full, second to repay
the Revolving B Loans until the Revolving B Loans are repaid in full and third
to all other outstanding Obligations. Simultaneously with any mandatory
repayment of the Revolving A Loans, each Bank's Revolving A Loan Commitment
shall, (i) with respect to any such mandatory prepayment (other than pursuant
Section 2.8(b)), be permanently reduced, or (ii) in the case of a mandatory
repayment pursuant to Section 2.8(b), be temporarily suspended, in each case, in
an amount equal to such Bank's Pro Rata Share of such prepayment, and the
Revolving A Loan Commitment Reduction Amount for each Revolving A Loan
Commitment Reduction Date occurring after the date of such mandatory payment
shall be reduced in an amount equal to the product of the amount of such
mandatory payment times the ratio (expressed as a percentage) that such
Revolving A Loan Commitment Reduction Amount bears to the sum of all of the
Revolving A Loan Commitment Reduction Amounts remaining prior to the Revolving A
Loan Termination Date. If during the Proceeds Application Period the Company
delivers a Borrowing Notice pursuant to Section 2.8(b) in connection with a
Permitted Acquisition, the temporary suspension of each Bank's Revolving A Loan
Commitment shall be released in an amount equal to such Bank's Pro Rata Share of
the Reserved Proceeds Amount, provided that such release of such temporary
suspension shall not cause any Bank's Revolving A Loan Commitment to exceed the
amount of such Bank's Revolving A Loan Commitment at such time after giving
effect to any scheduled reductions of such Bank's Revolving A Loan Commitment
pursuant to the terms of this Agreement. In connection with the release of the
suspension of each Bank's Revolving A Loan Commitment pursuant to the
immediately preceding sentence, the Revolving A Loan Commitment Reduction Amount
for each Revolving A Loan Commitment Reduction Date occurring after the date of
such release shall be proportionally readjusted based upon the Reserved Proceeds
Amount which will be borrowed as a Revolving A Loan. Upon the expiration of any
Proceeds Application Period, the temporary suspension of each Bank's Revolving A
Loan Commitment referred to in the second sentence of this Section 2.8(h) shall
become permanent with respect to
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each Bank's Pro Rata Share of the unused portion (if any) of the Reserved
Proceeds Amount relating to such Proceeds Application Period. Simultaneously
with any mandatory repayment of the Revolving B Loans, each Bank's Revolving B
Loan Commitment shall be permanently reduced in an amount equal to such Bank's
Pro Rata Share of such prepayment, and the Revolving B Loan Commitment Reduction
Amount for each Revolving B Loan Commitment Reduction Date occurring after the
date of such mandatory payment shall be reduced in an amount equal to the
product of (i) the amount of such mandatory payment times the ratio (expressed
as a percentage) that such Revolving B Loan Commitment Reduction Amount bears to
the sum of all of the Revolving B Loan Commitment Reduction Amounts remaining
prior to the Revolving B Loan Termination Date.
(i) Mandatory payments made pursuant to this Section 2.8
of the Revolving A Loans or of the Revolving B Loans shall be accomplished by
the payment first of such Loans or portion thereof constituting Floating Rate
Loans and second by the payment of such Loans or portion thereof constituting
Eurodollar Rate Loans.
Section 9 Optional Principal Payments and Reductions of
Commitments.
(a) The Company may from time to time pay all outstanding
Floating Rate Advances, or, in a minimum aggregate amount of $1,000,000, or any
integral multiple of $500,000 in excess thereof, any portion of the outstanding
Floating Rate Advances, upon one Business Day's prior notice to the Agent,
without penalty or premium. The Company may from time to time pay all
outstanding Eurodollar Advances, or, in a minimum aggregate amount of
$1,000,000, or any integral multiple thereof, any portion of the outstanding
Eurodollar Advances, upon one Business Day's prior written notice to the Agent,
provided, however, (i) such optional prepayment shall only be made on the last
day of the Interest Period relevant to such Eurodollar Advances, and (ii) after
giving effect to such optional prepayment, each outstanding Eurodollar Advance
shall be in a minimum amount of $1,500,000.
(b) Upon at least one Business Day's prior irrevocable
written notice to the Agent (which notice the Agent shall promptly transmit to
each of the Banks), the Company shall have the right, without premium or
penalty, to permanently reduce each Bank's Pro Rata Share of the Aggregate
Revolving A Loan Commitment or the Aggregate Revolving B Loan Commitment,
provided that any such partial reduction shall be in a minimum aggregate amount
of $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Section 10 Method and Place of Payment.
(a) Except as otherwise specifically provided herein, all
payments and prepayments under this Agreement and the Notes shall be made to the
Agent for the account of the Banks entitled thereto not later than 12:00 noon,
Chicago time, on the date when due and shall be made in lawful money of the
United States of America in immediately available funds at the Agent's office
specified pursuant to Article XIII, and any funds received by the Agent after
such time shall, for all purposes hereof (including the following sentence), be
deemed to have been paid on the next succeeding Business Day. Except as
otherwise specifically provided herein, the Agent shall thereafter cause to be
distributed on the date of receipt thereof to each Bank in like funds its Pro
Rata Share of payments so received.
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(b) Whenever any payment to be made hereunder or under
any Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
(c) All payments made by the Company hereunder and under
the other Loan Documents shall be made irrespective of, and without any
reduction for, any setoff or counterclaims.
Section 11 Fees. (a) The Company agrees to pay to the Agent for
the account of the Persons entitled thereto, fees in the amounts and at the
times set forth in the Fee Letter.
(b) The Company agrees to pay to the Agent for the
pro-rata account of the Banks in accordance with their respective Commitments a
commitment fee, computed at the Applicable Rate on the average daily unused
portion of the Aggregate Commitment until the Aggregate Commitments have been
terminated, payable quarterly in arrears and on the Revolving A Loan Termination
Date and the Revolving B Loan Termination Date, as the case may be, or such
earlier date, if any, on which the Aggregate Commitments shall terminate in
accordance with the terms hereof and calculated on the basis of a 365- or
366-day year, as appropriate, for the number of actual days elapsed. For the
purposes of calculating the average daily unused portion of the Aggregate
Commitments, the Revolving A Loan Commitment shall not be deemed to be reduced
by any Net Cash Proceeds applied to any mandatory prepayment pursuant to Section
2.8(b) hereof until such time as the Proceeds Application Period relating to
such Net Cash Proceeds has expired.
Section 12 Notes; Recordkeeping. Each Bank is hereby authorized
to record the principal amount of its Revolving A Loans and its Revolving B
Loans and each repayment thereof on the schedule attached to its applicable Note
or to record the same on its book and records and the Company agrees that such
schedules or books and records shall constitute binding and conclusive evidence
of the accuracy of the information contained therein absent manifest error,
provided, however, that the failure of any Bank to so record such information
shall not affect the Company's obligations hereunder or under such Notes.
Section 13 Minimum Advances. Each Floating Rate Advance shall
be in a minimum amount of $1,000,000 or in an integral multiple of $500,000 in
excess thereof, provided, that any Floating Rate Advance may be in the amount of
the unused Aggregate Revolving A Loan Commitment or the Aggregate Revolving B
Loan Commitment, as the case may be. Each Eurodollar Rate Advance and all
conversions to and continuations of Eurodollar Loans shall be in a minimum
amount of $2,000,000 or in an integral multiple of $1,000,000 in excess thereof,
provided that at no time may there be more than twelve (12) Eurodollar Rate
Advances outstanding at any time.
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Section 14 Eurodollar Rate Conversion and Continuation.
(a) Subject to the other provisions hereof, the Company
shall have the option (i) to convert at any time all or any part of outstanding
Floating Rate Loans which comprise part of the same Advance to Eurodollar Loans,
(ii) to convert all or any part of outstanding Eurodollar Loans which comprise
part of the same Advance to Floating Rate Loans, on the expiration date of the
Interest Period applicable thereto, or (iii) to continue all or any part of
outstanding Eurodollar Loans which comprise part of the same Advance as
Eurodollar Loans for an additional Interest Period, on the expiration of the
Interest Period applicable thereto; provided that no Loan may be continued as,
or converted into, a Eurodollar Loan when any Default or Unmatured Default has
occurred and is continuing.
(b) In order to elect to convert or continue a Loan under
this Section 2.14, the Company shall deliver an irrevocable notice thereof (a
"Conversion/Continuation Notice") to the Agent no later than 10:00 A.M., Chicago
time, (i) at least one Business Day in advance of the proposed conversion date
in the case of a conversion to a Floating Rate Loan and (ii) at least three
Business Days in advance of the proposed conversion or continuation date in the
case of a conversion to, or a continuation of, a Eurodollar Loan. A
Conversion/Continuation Notice shall specify (w) the requested conversion or
continuation date (which shall be a Business Day), (x) the amount and the type
of Loan to be converted or continued, (y) whether a conversion or continuation
is requested, and (z) in the case of a conversion to, or a continuation of, a
Eurodollar Loan, the requested Interest Period. Promptly after receipt of a
Conversion/Continuation Notice under this Section 2.14(b), the Agent shall
provide each Bank with a copy thereof.
Section 15 Lending Offices. Each Bank may book all or any
portion of any Loan at any Lending Office selected by such Bank and may change
its Lending Office from time to time. All terms of this Agreement shall apply to
any such Lending Office and the Notes shall be deemed held by each Bank for the
benefit of such Lending Office. Each Bank may, by written or telex notice to the
Agent and the Company, designate a Lending Office through which and for whose
account payments in respect of the Obligations are to be made.
Section 16 Non-Receipt of Funds by the Agent. Unless the
Company notifies the Agent prior to the date on which it is scheduled to make
payment to the Agent of a payment of principal, interest or fees to the Agent
for the account of the Banks, that it does not intend to make such payment, the
Agent may assume that such payment has been made. The Agent may, but shall not
be obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If the Company has not in fact made
such payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to the Federal Funds Rate.
Section 17 Collateral Security.
(a) As security for the payment of the Obligations, the
Company shall cause to be granted to the Agent, for the ratable benefit of the
Banks, a Lien on and security interest in all of the following, whether now or
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hereafter existing or acquired: (i) all of the shares of capital stock of the
Subsidiaries now or hereafter directly owned by the Company and all proceeds
thereof, all as more specifically described in the Company Pledge Agreement;
(ii) certain of the assets of the Company and all proceeds thereof, all as more
specifically described in the Company Security Agreement, the Company Trademark
Agreement, the Company Mortgages, the Noble Document Assignment, the Mexican
Assignment Agreements, and each Joint Sales Agreement Assignment and Local
Marketing Agreement Assignment to which the Company is a party; and (iii)
certain of the assets of the Subsidiaries now or hereafter directly or
indirectly owned by the Company and all proceeds thereof, all as more
specifically described in the Subsidiary Security Agreement, the Subsidiary
Trademark Agreement, the Subsidiary Pledge Agreements, the Subsidiary Mortgages,
each Joint Sales Agreement Assignment and each Local Marketing Agreement
Assignment to which each Subsidiary is a party.
(b) Concurrently with the consummation of any Permitted
Acquisition or the formation of any new Subsidiary of the Company which is
permitted hereunder, the Company shall
(vi) in the case of a Permitted Acquisition of stock
by the Company or any Subsidiary or the formation of a new Subsidiary: (A)
deliver or cause to be delivered to the Agent all of the certificates
representing the capital stock (or other instruments or securities
evidencing ownership) of such new Subsidiary which is being acquired or
formed, beneficially owned by the Company or such Subsidiary, as additional
collateral for the Obligations, to be held by the Agent in accordance with
the terms of the Company Pledge Agreement or a Subsidiary Pledge Agreement,
as the case may be; and (B) cause such new Subsidiary which is being
acquired or formed to deliver to the Agent (1) duly executed counterpart
signature pages to each of the Subsidiary Guaranty, the Subsidiary Security
Agreement and the Intercompany Security Agreement, in the forms attached
respectively thereto as Annex I, together with the authorization to the
Agent and the Banks to attach such signature pages to the Subsidiary
Guaranty, the Subsidiary Security Agreement and the Intercompany Security
Agreement, respectively, the effect of which shall be that as of the date
set forth on such signature pages such new Subsidiary shall become a party
to each such agreement and be bound by the terms thereof, (2) if such
Subsidiary owns any capital stock of any other Subsidiary, a Subsidiary
Pledge Agreement, (3) if such Subsidiary owns any U.S. registered
trademarks, a Subsidiary Trademark Agreement, (4) an Intercompany Demand
Note, duly endorsed, pledged and delivered to the Agent under the Company
Pledge Agreement, (5) such Uniform Commercial Code financing statements as
shall be required to perfect the security interest of the Agent and the
Banks in the Collateral being pledged by such new Subsidiary pursuant to
the Subsidiary Security Agreement and (6) unless otherwise agreed to in
writing by the Required Banks, a Subsidiary Mortgage, together with such
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title insurance policies, surveys and 5 appraisals as the Required Banks
may have reasonably requested;
(vii) in the case of a Permitted Acquisition of
assets by the Company or any Subsidiary, deliver or cause to be delivered
by the Company or such Subsidiary acquiring such assets, (A) such Uniform
Commercial Code financing statements as shall be required to perfect the
security interest of the Agent and the Banks in the assets being so
acquired and (B) unless otherwise agreed to in writing by the Required
Banks, a Company Mortgage or Subsidiary Mortgage, as the case may be,
together with such title insurance policies, surveys and appraisals as the
Required Banks may have reasonably requested; and
(viii) in any case, provide such other documentation,
including, without limitation, one or more opinions of counsel reasonably
satisfactory to the Required Banks, articles of incorporation, by-laws and
resolutions, which in the reasonable opinion of the Required Banks is
necessary or advisable in connection with such Permitted Acquisition or
formation of such new Subsidiary.
Section 18 Further Assistance. In connection with any exercise
by the Agent or any Bank of its rights and remedies under the Collateral
Documents, it may be necessary to obtain the prior consent or approval of
certain Persons, including but not limited to the FCC and other public utility
regulatory agencies and governmental authorities. Upon the exercise by the Agent
or any Bank of any power, right, privilege or remedy pursuant to any Collateral
Document, applicable law or otherwise which requires any consent, approval,
registration, qualification or authorization of any Person, the Company will,
upon request by the Agent, execute and deliver, or will cause the execution and
delivery of, all applications, certificates, instruments, and other documents
and papers that the Agent or such Bank determine may be required to obtain for
such consent, approval, registration, qualification or authorization. Without
limiting the generality of the foregoing, the Company will use its best efforts
to obtain from the appropriate Persons the necessary consents and approvals, if
any: (1) for the transfer of control, if required for the effectuation of clause
(2) below, to the Agent, the Banks or their respective nominees or transferees
upon the occurrence of a Default, of any permit, license or authorization in
respect of the operation of any Radio Station; (2) for the effectuation of any
sale or sales of Pledged Stock (as defined in the Company Pledge Agreement
and/or the Subsidiary Pledge Agreements) upon the occurrence of a Default; and
(3) for the exercise of any other right or remedy of the Agent or any Bank under
any Collateral Document, applicable law or otherwise. The Agent and the Banks
will cooperate with the Company in preparing the filing with the FCC and any
other Persons of all requisite applications required to be obtained by the
Company under this Section 2.18.
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ARTICLE III
CHANGE IN CIRCUMSTANCES
Section 1 Yield Protection. If any law or any governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any regulatory interpretation thereof, or compliance of any
Bank with such (which has been adopted or changed after the date hereof),
(i) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by, any Bank or any applicable Lending Office (other than
reserves and assessments taken into account in determining the interest
rate applicable to any Eurodollar Loan), or
(ii) imposes any other condition the result of which
is to increase the cost to any Bank or any applicable Lending Office of
making, funding or maintaining any Eurodollar Loan or reduces any amount
receivable by any Bank or any applicable Lending Office in connection with
any such Eurodollar Loan, or requires any Bank or any applicable Lending
Office to make any payment calculated by reference to the amount of any
Eurodollar Loan made or interest received by it, by an amount deemed
material by such Bank, or
(iii) affects the amount of capital required or
expected to be maintained by any Bank or Lending Office or any corporation
controlling any Bank and such Bank determines the amount of capital
required is increased by or based upon the existence of this Agreement, the
Loans or of commitments of this type,
then, within 15 days of demand by such Bank made together with the presentation
to the Company of a certificate of such Bank complying with Section 3.5 hereof,
the Company shall pay such Bank that portion of such increased expense incurred
(including, in the case of Section 3.1(iii), any reduction in the rate of return
on capital to an amount below that which it could have achieved but for such
change in regulation after taking into account such Bank's policies as to
capital adequacy) or reduction in an amount received which such Bank reasonably
determines is attributable to making, funding and maintaining its Obligations.
3.2. Taxes.
(a) Except as required by law, all payments made by the
Company under this Agreement shall be made free and clear of, and without
reduction for or on account of, any present or future taxes, levies, imposts,
duties, charges, fees, deductions, or withholdings, imposed, levied, collected,
withheld or assessed by any Governmental Authority after the Closing Date as a
result of the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of such Governmental Authority, but excluding (i) net
income, franchise and branch profits taxes, imposed on the Agent or a Bank by
(x) the United States of America or any taxing authority
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thereof or therein, (y) the jurisdiction under the laws of which the Agent or
such Bank is organized or in which it has its principal office or is managed and
controlled or any political subdivision or taxing authority thereof or therein,
or (z) any jurisdiction in which the Lending Office of any Bank making and
maintaining Loans to the Company, is located or any political subdivision or
taxing authority thereof or therein, and (ii) any taxes, levies, imposts,
duties, charges, fees, deductions or withholdings arising after the date of this
Agreement, solely as the immediate result of such Bank (x) changing its
designated Lending Office as of the Closing Date to a Lending Office located in
any other jurisdiction or (y) designating an additional Lending Office located
in any other jurisdiction (such non-excluded taxes, levies, imposts, duties,
charges, fees, deduction and withholdings being called "Taxes"). If any Taxes
are required to be withheld from any amounts payable to the Agent or any Bank
hereunder or under the Notes, the amounts so payable to the Agent or such Bank
shall be increased to the extent necessary to yield to the Agent or such Bank
(after payment of all Taxes, including Taxes attributable to such increase, and
free and clear of all liability, including, without limitation, interest and
penalties, in respect of such Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. Whenever any Taxes are payable by the Company, as promptly as possible
thereafter, the Company shall pay such Taxes. If the Company fails to pay Taxes
when due to the appropriate taxing authority the Company shall indemnify the
Agent and the Bank for any incremental Taxes, interest or penalties that may
become payable by the Agent or any Bank as a result of any such failure together
with any expenses payable by the Agent or Bank in connection therewith. If the
Company is required to make any additional payment to the Agent or any Bank
pursuant to this Section 3.2, and any such Bank receives, or is entitled to
receive, a credit against or relief or remission for, or repayment of, any tax
paid or payable by it in respect of, or calculated with reference to the Taxes
giving rise to such payment, such Bank shall, within a reasonable time of the
earlier of the date that it receives or is entitled to receive such credit,
relief, remission or repayment, use its reasonable efforts to reimburse the
Company the amount of any such credit, relief, remission or repayment to the
extent not inconsistent with such Bank's internal policies. If any Taxes
constituting a withholding tax of the United States of America or any other
Governmental Authority shall be or become applicable, after the Closing Date, to
such payments by the Company to a Bank, such Bank shall to the extent not
inconsistent with such Bank's internal policies use its reasonable efforts to
make, fund and maintain its Loans through a Lending Office of such Bank located
in another jurisdiction so as to reduce the Company's liability hereunder, and
if, as determined by such Bank, in its sole discretion, the making, funding or
maintenance of such Loans through such other Lending Office does not otherwise
materially adversely affect such Loans or such Bank.
(b) Prior to or at the Closing Date, (i) each Bank that
is not incorporated under the laws of the United States of America or a state
thereof shall deliver to the Agent (and the Agent agrees that it will deliver to
the Company) two duly completed copies of the United States Internal Revenue
Service Form 1001 or 4224 or successor applicable form, as the case may be,
certifying in each case that such Bank is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes, and (ii) each Bank will deliver to the Agent (and the Agent will
deliver to the Company) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption
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from United States backup withholding tax. Each Bank which delivers to the
Company and the Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the
preceding sentence further undertakes, if requested by the Company, to deliver
to the Company and the Agent two further copies of said statement or Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such statement
or form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent statement or form previously delivered by
it to the Company, and such extension or renewals thereof as may reasonably be
requested by the Company, certifying in the case of a Form 1001 or 4224 that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, unless in any such
case any change in treaty, law or regulation has occurred prior to the date on
which any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent a Bank or the Agent from duly completing and
delivering any such statement or form with respect to it and such Bank or Agent
advises the Company that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax and, in the case of
a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax. The Company shall not be required to pay any increased amount
on account of Taxes pursuant to this Section 3.2 to any Bank, Transferee or
Agent that fails to furnish any form or statement that it was required to
furnish in accordance with this Section 3.2 or Section 12.3.4, and, to the
extent required by law, the Company shall be entitled to deduct Taxes from the
payments owed to such Bank, Transferee or Agent.
3.3. Availability of Rate Options. If any Bank determines that
maintenance of its Eurodollar Loans at a suitable Lending Office would violate
any applicable law, rule, regulation, or directive, whether or not having the
force of law, or determines that (i) deposits of a type and maturity appropriate
to match fund any Eurodollar Loan are not available or (ii) the Eurodollar Rate
does not accurately reflect the cost of making or maintaining any Eurodollar
Loan, then (unless such unavailability or inaccuracy results solely from a
deterioration in the creditworthiness of such Bank subsequent to the date
hereof) the Agent shall suspend the availability of Eurodollar Loans from such
Bank and require the interest rate applicable to any Eurodollar Loan by such
Bank then outstanding to be changed to the Floating Rate.
3.4. Funding Indemnification. If any payment in respect of any
Eurodollar Loan occurs on a date which is not the last day of the applicable
Eurodollar Interest Period, whether because of acceleration, prepayment or
otherwise, if an Advance related to, or conversion from or into or in
continuation of, Eurodollar Loans does not occur on a date specified therefor in
a Borrowing Notice or a Conversion/Continuation Notice the Company will
indemnify each Bank for any loss or cost incurred by it resulting therefrom upon
request by such Bank accompanied by a certificate complying with Section 3.5
below.
3.5. Bank Certificates; Survival of Indemnity. To the extent
reasonably possible, so long as the Company has any liquidated liability to any
Bank under Section 3.1, such Bank shall designate an alternate Lending Office
with respect to its Eurodollar Loans to reduce any such liability, so long as
such designation is not disadvantageous to such Bank. A certificate of a Bank as
to the amount due under Section 3.1 or 3.4 (which certificate
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shall, if so requested by the Company, include an explanation of the basis used
by such Bank in calculating such amount) shall be delivered within 120 days
after a responsible account officer of the Bank obtains actual knowledge of the
event giving rise thereto and shall be final, conclusive and binding on the
Company in the absence of manifest error. Determination of amounts payable under
such Sections in connection with any Bank's Eurodollar Loans shall be calculated
as though each Bank funded its Pro Rata Share of any Eurodollar Advance through
the purchase of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the Eurodollar Rate applicable to such
Eurodollar Loan, whether in fact that is the case or not. Unless otherwise
provided herein, the amount specified in the certificate shall be payable on
demand after receipt by the Company of the certificate. The obligations of the
Company under Sections 3.1 and 3.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 1 Conditions Precedent to Initial Loans. The
obligations of the Banks to make their initial Loans hereunder are subject to
the satisfaction on the Closing Date of the following conditions precedent:
(a) Loan Documents.
(i) Credit Agreement. The Company shall have duly
executed and delivered this Agreement to the Agent.
(ii) Notes. The Company shall have duly executed and
delivered to each of the Banks the appropriate Revolving A Note and
Revolving B Note in the amount, maturity and as otherwise provided herein.
(iii) Company Security Agreement. The Company shall
have duly executed and delivered to the Agent the Company Security
Agreement.
(iv) Company Pledge Agreement. The Company shall have
duly executed and delivered to the Agent the Company Pledge Agreement.
(v) Company Trademark Agreement. The Company shall
have duly executed and delivered to the Agent the Company Trademark
Agreement.
(vi) Subsidiary Guaranty. Each Subsidiary (other than
the Excluded Subsidiaries) shall have duly executed and delivered to the
Agent the Subsidiary Guaranty.
(vii) Subsidiary Security Agreement. Each
Subsidiary (other than the Excluded Subsidiaries) shall have duly executed
and delivered to the Agent the Subsidiary Security Agreement.
(viii) Subsidiary Pledge Agreements. Each of Jacor
Broadcasting of Atlanta, Inc. and Chesapeake Securities, Inc. shall have
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duly executed and delivered to the Agent a Subsidiary Pledge Agreement.
(ix) Subsidiary Trademark Agreement. Jacor
Broadcasting of Tampa Bay, Inc. shall have duly executed and delivered to
the Agent the Subsidiary Trademark Agreement.
(x) Subsidiary Mortgages. Each appropriate Subsidiary
shall have duly executed and delivered to the Agent each Subsidiary
Mortgage.
(xi) Intercompany Demand Notes. Each of the Sub-
sidiaries (other than the Excluded Subsidiaries) shall have duly executed
and delivered to the Company the Intercompany Demand Note to which it is a
party, and the Company shall have delivered each such Intercompany Demand
Note, duly endorsed in blank, to the Agent pursuant to the terms of the
Company Pledge Agreement.
(xii) Intercompany Security Agreement. Each of the
Subsidiaries (other than the Excluded Subsidiaries) shall have duly
executed and delivered to the Company the Intercompany Security Agreement.
(xiii) Fee Letter. The Company shall have duly
executed and delivered to the Agent a fee letter in form and substance
satisfactory to the Agent and the Banks (the "Fee Letter").
(xiv) Noble Document Assignment. The Company shall
have duly executed and delivered to the Agent, and Noble shall have duly
acknowledged, the Noble Document Assignment.
(xv) Joint Sale Agreement Assignment. The Company
shall have duly executed and delivered to the Agent a Joint Sales Agreement
Assignment with respect to each Joint Sales Agreement.
(xvi) Local Marketing Agreement Assignment. The
Company shall have duly executed and delivered to the Agent, a Local
Marketing Agreement Assignment with respect to each Local Marketing
Assignment Agreement.
(xvii) Mexican Assignment Agreements. Each of the
Mexican Assignment Agreements shall have been duly executed by the
applicable parties thereto and delivered to the Agent.
(b) Opinions of Counsel.
(xviii) The Agent and each Bank shall have received a
legal opinion, each dated the Closing Date, from Graydon, Head and Ritchey
and Rosenberg & Liebentritt, each counsel to the Company and the
Subsidiaries, substantially in the forms set forth as Exhibits K-1 and K-2
hereto, respectively.
(xix) The Agent and each Bank shall have received a
legal opinion, dated the Closing Date, from FCC counsel to the Company and
the
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Subsidiaries, substantially in the form set forth as Exhibit K-3 hereto.
(xx) The Agent and each Bank shall have received
legal opinions, each dated the Closing Date, from counsel to the Company
and/or the Subsidiaries in the States of Georgia, Florida, Tennessee,
Colorado and California, each substantially in the form set forth as
Exhibits K-4 through K-9 hereto, respectively.
(xxi) The Agent and each Bank shall have received a
legal opinion, dated the Closing Date, from Juan Gonzalez, Mexican counsel
to the Company substantially in the form set forth as Exhibit K-10.
(c) Noble Documents and Mexican Documents. The Agent and
each Bank shall have received a certificate from an Authorized Officer of the
Company, dated the Closing Date, certifying the accuracy and completeness of the
attached duly executed copies of each of the Noble Documents, each of the
Mexican Documents and each of the Employment Agreements, which agreements shall
be in form and substance satisfactory to the Agent and each Bank. Except as set
forth on Schedule 4.1(c)(I) hereof, all of the conditions precedent set forth
in, and all of the transactions to be effectuated on the Closing Date pursuant
to the terms and provisions of, each of the Noble Documents, the Mexican
Documents and the Employment Agreements shall have occurred. The Agent shall
have received evidence satisfactory to the Agent and the Banks and their
respective counsel that (i) all of the Noble Existing Indebtedness shall have
been paid, or concurrently with the making of the initial Loans hereunder will
have been paid, (ii) all agreements, instruments or other documents governing or
evidencing the Noble Existing Indebtedness shall have been, or concurrently with
the making of the initial Loans hereunder will be, terminated and (iii) all
Liens granted to secure the existing Indebtedness of Noble (other than the Liens
permitted by the Noble-Company Credit Agreement which Liens are set forth on
Schedule 4(c)(II) hereto) shall have been, or concurrently with the making of
the initial Loans hereunder will be, released.
(d) Corporate Documents and Corporate Structure. The
Agent and each Bank shall have received copies of the certificate of
incorporation of the Company and each Subsidiary (other than the Excluded
Subsidiaries), each as amended, modified or supplemented to the Closing Date,
certified to be true, correct and complete by the appropriate Secretary of State
as of a date not more than 90 days prior to the Closing Date (or, in the case of
the Company, 15 days), together with a copy of a good standing certificate from
each such Secretary of State and a good standing certificate from the Secretary
of State (or the equivalent thereof) of each other State in which each of them
is required to be qualified to transact business, each to be dated a date not
more than 90 days prior to the Closing Date (or, in the case of the Company, 15
days). The Agent shall have received a corporate structure chart with respect to
the Company and all of its Subsidiaries (such corporate structure chart to be
certified by a duly Authorized Officer of the Company) and such corporate
structure of the Company and its Subsidiaries shall be satisfactory to the
Banks.
(e) Certified Resolutions, etc. The Agent and each Bank
shall have received a certificate of the Secretary or Assistant Secretary of
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<PAGE> 49
each of the Company and each Subsidiary (other than the Excluded Subsidiaries)
dated the Closing Date certifying (i) the names and true signatures of the
incumbent officers of such Person authorized to sign the applicable Loan
Documents, (ii) the bylaws of such Person as in effect on the Closing Date,
(iii) the resolutions of such Person's Board of Directors approving and
authorizing the execution, delivery and performance of all Loan Documents
executed by such Person and (iv) that there have been no changes in the
certificate of incorporation of such Person since the date of the most recent
certification thereof by the appropriate Secretary of State.
(f) Governmental Consents, Approvals, etc. Except as set
forth in Schedule 4.1(x) hereto, the Agent shall have received evidence
satisfactory to the Agent and the Banks and their respective counsel that the
Company and the Subsidiaries shall have made all applications, filings and
registrations with, or obtained all necessary approvals, orders, authorizations,
consents, licenses, certificates and permits from, the FCC and other federal,
state and local regulatory or governmental bodies and authorities that are or
may be required prerequisites to the validity, enforceability or nonvoidability
of the Loan Documents or the pledge of the capital stock of the Subsidiaries
required to be delivered pursuant to the Company Pledge Agreement and the
Subsidiary Pledge Agreements (except to the extent that the exercise by the
Agent of its rights under the Collateral Documents after a Default may require
the consent of the FCC pursuant to Section 310 of the Communications Act of
1934, as amended), and the Agent and the Banks shall have received copies of
each such filing, registration, approval, order, authorization, consent,
license, certificate and permit.
(g) Existing Debt. The Agent shall have received evidence
satisfactory to the Agent and the Banks and their respective counsel that (i)
the Company and the Subsidiaries shall have paid, or concurrently with the
making of the initial Loans hereunder will pay, in full the Existing Debt (other
than Surviving Debt), (ii) all agreements, instruments or other documents
governing or evidencing the Existing Debt shall have been, or concurrently with
the making of the initial Loans hereunder will be, terminated and (iii) all
Liens granted to secure the Existing Debt (other than Surviving Debt) shall have
been, or concurrently with the making of the initial Loans hereunder will be,
released or transferred to the Agent for the benefit of the Banks.
(h) Insurance. The Agent shall have received a
certificate of insurance and binders demonstrating insurance coverage in respect
of each of the Company and each Subsidiary of types, in amounts, with insurers
and with other terms required under the Loan Documents, which certificate shall
indicate that the Agent and the Banks are named additional insureds as their
interests may appear and shall contain a lender's loss payee endorsement in form
and substance satisfactory to the Agent in favor of the Agent on behalf of
itself and the Banks.
(i) Lien Search Reports. The Agent shall have received
satisfactory reports of UCC, tax lien, judgment and litigation searches
conducted by a search firm acceptable to the Agent and the Banks with respect to
the Company and each Subsidiary in each of the locations required by the Agent.
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(j) UCC-1 Financing Statements, etc. The Agent shall have
received originals, duly executed and delivered by the Company and each
Subsidiary party to the Subsidiary Security Agreement, of each UCC-1 financing
statement required by the Agent to be delivered by the Company and each such
Subsidiary, in each case listing the Company or the relevant Subsidiary as
debtor and naming the Agent as secured party for filing in the proper
jurisdictions for the locations set forth in Exhibits A and B to the Company
Security Agreement or the Subsidiary Security Agreement, as the case may be.
(k) UCC-3 Termination Statements. The Agent shall have
received originals of each UCC-3 termination statement required by the Agent to
be filed in connection with the termination of all Liens securing Existing Debt,
in each case duly executed and delivered by the appropriate Person in favor of
which such Liens were granted by the Company or any Subsidiary.
(l) Pro Forma Balance Sheet, etc. The Agent and each Bank
shall have received pro forma consolidated and consolidating balance sheets of
the Company and its Subsidiaries as of the Closing Date, giving effect to the
transactions to be effected on the Closing Date (including, without limitation,
the funding of the initial Loans, the repayment of the Existing Debt, the
effectiveness of the Noble Documents, the payment for the Noble Warrants
pursuant to the Noble Stock Purchase and Warrant Redemption Agreement, the
making of the loans by the Company to Noble on the Closing Date pursuant to the
terms of the Noble-Company Credit Agreement, the payment of the purchase price
for the San Diego Property pursuant to the San Diego Asset Purchase Agreement
and the purchase of the operating assets of XETRA-AM and XETRA-FM (the
"Transactions") and the payment or accrual of all costs and expenses incurred in
connection therewith, certified, to the best of such officer's knowledge and
belief, by an Authorized Officer and a pro-forma calculation, certified by an
Authorized Officer, showing compliance with each of the financial ratios set
forth in Section 6.3 hereof after giving effect to such Transactions).
(m) Solvency. The Agent and each Bank shall have received
a certificate signed by an Authorized Officer containing conclusions as to the
Solvency of the Company and each Subsidiary (other than the Excluded
Subsidiaries) after giving effect to the initial Loans and the Transactions.
(n) Pledged Stock. The Agent shall have received the
original stock certificates evidencing the stock pledged pursuant to the Company
Pledge Agreement and each Subsidiary Pledge Agreement, together with undated
stock powers duly executed in blank in connection therewith.
(o) Title Insurance; Survey. The Agent shall have
received (i) a commitment for mortgagee title insurance with respect to the real
property encumbered by the respective Mortgages, in an amount satisfactory to
the Banks, and issued by a title insurance company satisfactory to the Banks,
and (ii) the most recent survey (if any) with respect to each such property in
the possession of the Company or any Subsidiary.
(p) [Intentionally Omitted]
(q) Financial Statements. The Agent and each Bank shall
have received the audited financial statements of the Company and Noble for the
fiscal years ending December 31, 1992, December 31, 1993, and December 31,
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<PAGE> 51
1994, and the unaudited financial statements of the Company and Noble for the
fiscal periods ending on September 30, 1995 and December 31, 1995.
(r) Environmental Matters. The Agent and the Banks shall
(i) be satisfied that each of the Company and its Subsidiaries is in compliance
with all applicable environmental, health and safety statutes and regulations,
(ii) be satisfied that neither the Company nor any of its Subsidiaries is
subject to any present or contingent environmental liability or be the subject
of any state or federal environmental investigation that could, in either case,
have a material adverse effect on the business, properties, prospects, financial
condition, profits or results of operations of the Company and its Subsidiaries
and (ii) have received copies of all environmental audit reports (if any)
prepared by independent environmental consultants with respect to the properties
and business of the Company and each Subsidiary.
(s) Funds Flow Instructions. The Agent and the Banks
shall have received detailed instructions satisfactory to them describing the
funds flow in connection with the funding of the initial Loans and the
consummation of the other Transactions.
(t) Fees and Expenses. The Agent shall have received, for
its account and for the account of each Bank, as applicable, all fees payable on
the Closing Date pursuant to the terms of the Fee Letter and all expenses due
and payable hereunder on or before the Closing Date, including, without
limitation, the reasonable fees and expenses accrued through the Closing Date of
Skadden, Arps, Slate, Meagher & Flom and any other counsel retained by the
Agent.
(u) Z/C Equity Investment. The Agent and the Banks shall
receive evidence satisfactory to them that Z/C owns at least 50% of the common
stock of the Company on the Closing Date.
(v) Projections. The Agent and the Banks shall have
received projections prepared by the Company demonstrating the projected
consolidated financial condition and results of operations of the Company and
the Subsidiaries after giving effect to the Transactions, for the period
commencing on the Closing Date and ending on the Revolving A Loan Termination
Date and the Revolving B Loan Termination Date, which projections shall be in
form and substance satisfactory to the Agent and the Banks, shall not give
effect to the proposed acquisitions by the Company of Citicasters, Inc., shall
indicate that the financial condition and assets of the Company shall be
sufficient (in the opinion of the Agent and the Banks) to provide the Company
with adequate working capital to profitably operate its consolidated businesses
and shall be accompanied by a written statement of the assumptions underlying
the projections.
(w) Process Agent. Each of the Company and each
Subsidiary (other than the Excluded Subsidiaries) shall have appointed in
writing an agent satisfactory to the Agent and the Banks for service of process
in connection with any action or proceeding arising under or relating to the
Loan Documents, and such agent shall have accepted such appointment in writing.
(x) Noble FCC Prepared Filings and Mexican Filings. The
Agent shall have received evidence satisfactory to the Agent and the Banks and
their respective counsel that the Company has completed and is prepared to
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file (i) all applications, filings, consent requests and registrations with the
FCC necessary for its acquisition of the capital stock and assets of Noble under
the Noble Documents and (ii) all applications, filings, consent requests and
registrations with the Mexican Secretaria de Comuniciones y Transportes
necessary for its acquisition of the capital stock and assets of XETRA-AM and
XETRA-FM, and the Mexican Concession relating thereto, all as contemplated by
the Mexican Documents.
(y) Litigation. The Banks shall have determined that
there exists no material pending or threatened litigation or other proceedings
involving the Company or any Subsidiary except for such material litigation or
proceedings disclosed on Schedule 5.7 and with respect to which the Company has
established full reserves in its financial statements and projections delivered
to the Agent and the Banks pursuant to Sections 4.1(q) and (v).
(z) ERISA Matters. The Company shall have provided to the
Agent and the Banks evidence satisfactory to the Agent and the Banks that the
Company and each of its Subsidiaries are in compliance with ERISA and all of the
regulations promulgated thereunder.
(aa) Officer's Certificate. The Agent and each Bank shall
have received a certificate executed by an Authorized Officer of the Company
dated the Closing Date stating that (i) all of the representations and
warranties of the Company and the Subsidiaries contained in the Loan Documents
are true and correct and (ii) after giving effect to the execution and delivery
of the Loan Documents by the Company and the Subsidiaries, the funding of the
initial Loans and the consummation of the other Transactions, no Default or
Unmatured Default shall have occurred and be continuing.
(bb) FCC Licenses. The Agent shall have received copies
of all of the principal FCC licenses for the operation of the Radio Stations
owned or operated by the Company or any of its Subsidiaries (whether pursuant to
a Joint Sales Agreement, a Local Marketing Agreement, or otherwise) certified by
the Secretary or Assistant Secretary of the Company.
(cc) Certain Financial Ratios as of the Closing Date. For
the 12 month period ended December 31, 1995, the Leverage Ratio of the Company
(on a pro forma consolidated basis after giving effect to the Transactions) is
less than or equal to 5.2 to 1.00. The Agent shall have received evidence
satisfactory to it that the trailing twelve month Operating Cash Flow as of
December 31, 1995, was at least $36,000,000 for the Company and Noble on a pro
forma consolidated basis (excluding Noble's assets, properties and licenses with
respect the Noble Denver Stations).
(dd) Additional Matters. The Agent and each Bank shall
have received such other certificates, opinions, documents and instruments
relating to the Transactions as may have been reasonably requested by the Agent
or any Bank, and all corporate and other proceedings and all other documents
(including, without limitation, all documents referred to herein and not
appearing as exhibits hereto) and all legal matters in connection with the
Transactions shall be satisfactory in form and substance to the Agent and the
Banks.
Section 2 Conditions Precedent to All Loans. The obligation of
each Bank to make any Loan (including the initial Loans made on the Closing
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Date) is subject to the satisfaction on the date such Loan is made of the
following conditions precedent:
(a) Representations and Warranties. The representations
and warranties contained herein and in the other Loan Documents (other than
representations and warranties that expressly speak only as of a different date)
shall be true and correct in all material respects on such date both before and
after giving effect to the making of such Loans.
(b) No Default or Unmatured Default. No Default or
Unmatured Default shall have occurred and be continuing on such date either
before or after giving effect to the making of such Loans.
(c) No Injunction. No law or regulation shall have been
adopted, no order, judgment or decree of any governmental authority shall have
been issued, and no litigation shall be pending or threatened, that would
enjoin, prohibit or restrain the making or repayment of the Loans or the
consummation of the Transactions.
(d) No Material Adverse Change. No event, act or
condition shall have occurred after December 31, 1995 that has had a material
adverse effect on the business, properties, financial condition or results of
operations of the Company and its Subsidiaries or on Noble, as the case may be,
and if any such material adverse effect shall have occurred, the Required Banks
shall have waived the same in writing.
(e) Borrowing Notice. The Agent shall have received a
duly executed Borrowing Notice in respect of the Loans to be made on such date.
(f) Acquisition. To the extent the proceeds of the Loan
will be used for any Acquisition (other than the Permitted Acquisitions
contemplated by the Noble Documents), the Company shall deliver to the Agent and
the Banks copies of all final federal, state and local regulatory or
governmental approvals, orders, authorizations, licenses, certificates and
permits necessary for the consummation of such Acquisition, including, without
limitation, any consents and approvals required by the FCC and any filings with
the Federal Trade Commission and the Antitrust Division of the Department of
Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended. Notwithstanding the foregoing, the Company shall be permitted to
deliver to the Agent and the Banks copies of FCC orders which are not final and
are subject to reconsideration by the FCC or appeal to a court with respect to
any aforementioned Acquisition if and only if, (i) the Company or its
Subsidiaries (if applicable) shall have negotiated an unwind agreement with
respect to the business and assets (or related voting securities) subject to
such Acquisition which provides for the reconveyance for full value to the
seller of all such business and assets (or related voting securities) in the
event a final FCC order is not reasonably attainable with respect to such
business and assets (or related voting securities) and (ii) such business and
assets (or related voting securities) subject to such Acquisition shall be
subject to an escrow agreement whereby such business and assets (or related
voting securities) are maintained in escrow arrangements until the receipt of an
FCC final order with respect thereto, provided solely with respect to the
creation or maintenance of such escrow arrangements, the Required Banks may
expressly agree that such escrow arrangements are not required. The requirements
set forth in this Section 4.2(f) are in addition to any other require-
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ments and restrictions set forth in this Agreement which are applicable to such
an Acquisition.
The acceptance of the proceeds of each Loan shall constitute a
representation and warranty by the Company to each of the Banks that all of the
conditions required to be satisfied under this Article IV in connection with the
making of such Loan have been satisfied.
All of the Notes, certificates, agreements, legal opinions and
other documents and papers referred to in this Article IV, unless otherwise
specified, shall be delivered to the Agent for the account of each of the Banks
and, except for the Notes, in sufficient counterparts for each of the Banks, and
shall be satisfactory in form and substance to each Bank in its sole discretion.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Banks that:
Section 1 Corporate Existence and Standing. The Company and
each Subsidiary is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
Section 2 Authorization and Validity. The Company and each
Subsidiary has the corporate power and authority and legal right to execute and
deliver the Loan Documents to which each is a party and to perform their
obligations thereunder. The execution and delivery by the Company and each
Subsidiary of the Loan Documents to which each is a party, and the performance
of their obligations thereunder, have been duly authorized by necessary
corporate proceedings, and the Loan Documents to which each is a party
constitute legal, valid and binding obligations of the Company and each
Subsidiary enforceable against the Company and each Subsidiary in accordance
with their terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity. To the best knowledge of the
Company, each of the Noble Documents and the Mexican Documents (i) constitute
legal, valid and binding obligations of each party thereto (other than the
Company) enforceable against each such Person in accordance with its respective
terms, except as enforceability may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity and (ii) are in full force and effect. To the best
knowledge of the Company there are no material defaults, breaches or violations
under the Noble Documents or defaults, breaches or violations which effect the
enforceability of such agreements, the Noble Document Assignment or the Mexican
Document Assignment.
Section 3 No Conflict; Government Consent. Except as set forth
on Schedule 5.3 hereto, neither the execution and delivery by the Company or any
Subsidiary of the Loan Documents nor the consummation of the transactions
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<PAGE> 55
herein or therein contemplated, nor compliance with the provisions hereof or
thereof will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Company or any Subsidiary or the
Company's or any Subsidiary's articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which the Company or any
Subsidiary is a party or is subject, or by which it, or its property, is bound,
or conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the property of the Company or any
Subsidiary pursuant to the terms of any such indenture, instrument or agreement.
Except as set forth on Schedule 5.3 hereto, no order, consent, approval,
license, authorization, or validation of, or application, filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents, other
than the filing, within the period established by applicable law, of the Loan
Documents with the FCC and other than the filing and/or recording of financing
statements (and/or financing statement amendments), the Company Mortgages and
the Subsidiary Mortgages.
Section 4 Financial Statements.
(a) The audited December 31, 1992, December 31, 1993, and
December 31, 1994, and unaudited September 30, 1995 and December 31, 1995
consolidated financial statements of the Company and the Subsidiaries heretofore
delivered to the Banks were each prepared in accordance with Generally Accepted
Accounting Principles in effect on the date such statements were prepared and
fairly present the consolidated financial condition and operations of the
Company and the Subsidiaries, at such date and the consolidated results of
operations of the Company and the Subsidiaries for the period then ended.
(b) To the best knowledge of the Company after due
inquiry, the audited December 31, 1992, December 31, 1993, and December 31,
1994, and the unaudited September 30, 1995 and December 31, 1995 consolidated
financial statements of Noble and its Subsidiaries heretofore delivered to the
Banks were each prepared in accordance with Generally Accepted Accounting
Principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of Noble and its
Subsidiaries at such date.
Section 5 Material Adverse Change. As of the Closing Date, no
material adverse change in the business, properties, financial condition or
results of operations of the Company and the Subsidiaries or Noble has occurred
since December 31, 1995.
Section 6 Taxes. The Company and the Subsidiaries have filed
(or have obtained extensions for filing) all United States federal, state and
local tax returns and all other tax returns which are required to be filed and
have paid all taxes which have become due or pursuant to any assessment received
by the Company or any Subsidiary, except such taxes, if any, as are being
contested in good faith by appropriate proceedings and as to which adequate
reserves have been provided. No United States or state income tax returns of the
Company or any Subsidiary has been audited by the Internal Revenue Service or
any State agency. No tax liens have been filed and no claims are being asserted
with respect to any such taxes. The charges,
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accruals and reserves on the books of the Company and the Subsidiaries in
respect of any taxes or other governmental charges are adequate.
Section 7 Litigation and Contingent Obligations. Except as set
forth on Schedule 5.7 hereto, as of the Closing Date there is no litigation,
arbitration, governmental investigation, proceeding, inquiry or Environmental
Claim pending or, to the knowledge of any of their officers, threatened against
or affecting the Company or any Subsidiary which could reasonably be expected to
materially adversely affect the business, properties, financial condition or
results of operations of the Company and the Subsidiaries taken as a whole or
the ability of the Company or any Subsidiary to perform its obligations under
the Loan Documents or to consummate the Transactions. Other than any liability
incident to such litigation, arbitration, proceedings or Environmental Claim, as
of the Closing Date the Company has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
Section 8 Environmental Matters.
(a) As of the Closing Date, and except as set forth in
Schedule 5.8(a), there are no past or present actions, activities,
circumstances, conditions, events or incidents, including, without limitation,
the release, emission, discharge, presence or disposal of any Material of
Environmental Concern, that could form the basis of any Environmental Claim
against (i) the Company or any of the Subsidiaries or, (ii) to the Company's and
the Subsidiaries' knowledge against any Person whose liability for any
Environmental Claim that the Company or any Subsidiary has or may have retained
or assumed either contractually or by operation of law, which could reasonably
be expected to materially adversely affect the business, properties, financial
condition or results of operations of the Company and the Subsidiaries taken as
a whole or the ability of the Company or any Subsidiary to perform its
obligations under the Loan Documents.
(b) As of the Closing Date, and except as set forth in
Schedule 5.8(b), to the Company's knowledge (i) there are no on-site or off-site
locations where the Company or any Subsidiary has stored, disposed or arranged
for the disposal of Materials of Environmental Concern, (ii) there are no
underground storage tanks located on property owned or leased by the Company or
any Subsidiary, (iii) there is no asbestos contained in or forming part of any
building, building component, structure or office space owned or leased by the
Company or any Subsidiary, and (iv) no polychlorinated biphenyls (PCB's) are
used or stored at any property owned or leased by the Company or any Subsidiary,
which could reasonably be expected to materially adversely affect the business,
properties, financial condition or results of operations of the Company and the
Subsidiaries taken as a whole or the ability of the Company or any Subsidiary to
perform its obligations under the Loan Documents.
Section 9 ERISA.
(a) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date (i) there are no Unfunded Liabilities in any Plan which liabilities
in the aggregate would have a material adverse effect on the business, property,
financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole; (ii) each Company Plan complies in all material
respects with all applicable requirements of law and regulations and
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no Reportable Event has occurred with respect to any Company Plan and, to the
Company's actual knowledge, with respect to any Plan that is not a Company Plan;
(iii) neither the Company nor any Subsidiary nor any ERISA Affiliate has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to terminate any Plan, in each case under circumstances which would have a
material adverse effect on the business, property, financial condition or
results of operations of the Company and the Subsidiaries, taken as a whole; and
(iv) neither the Company nor any Subsidiary nor any ERISA Affiliate has engaged
in any prohibited transaction (as defined in Section 4975 of the Internal
Revenue Code) that would subject the Company or any Subsidiary to any penalty
which would have a material adverse effect on the business, property, financial
condition or results of operations of the Company and the Subsidiaries, taken as
a whole.
(b) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date neither the Company nor any Subsidiaries nor any of their ERISA
Affiliates has any contingent liability with respect to any post-retirement
benefit under any "welfare plan" (as defined in Section 3(1) of ERISA) that is
reasonably likely to have a material adverse effect on the business, property,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole, other than liability for continuation coverage under Part 6 of
Subtitle B of Title I of ERISA.
(c) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date, no lien under Section 412(n) of the Internal Revenue Code or
302(f) of ERISA or requirement to provide security under Section 401(a)(29) of
the Internal Revenue Code or Section 307 of ERISA has been or is reasonably
expected by the Company, any Subsidiary or any of their ERISA Affiliates to be
imposed on the assets of the Company, any Subsidiary or any of their ERISA
Affiliates that is reasonably likely to have a material adverse effect on the
business, property, financial condition or results of operations of the Company
and the Subsidiaries taken as a whole.
(d) Except as set forth on Schedule 5.9 hereto, as of the
Closing Date, no material liability to the PBGC (other than required premium
payments), the Internal Revenue Service, any Plan, Multiemployer Plan or any
trust related thereto has been, or is expected by the Company, any Subsidiary
or, to the actual knowledge of the Company, any of their ERISA Affiliates, to be
incurred by the Company, any Subsidiary or any of their ERISA Affiliates that is
reasonably likely to have a material adverse effect on the business, property,
financial condition or results of operations of the Company and the Subsidiaries
taken as a whole.
Section 10 Accuracy of Information. No information, exhibit,
certificate, schedule or report furnished by the Company or any Subsidiary to
the Agent or to any Bank in connection with the negotiation of the Loan
Documents contains, and no information, certificate or report which shall in the
future be furnished by the Company or any Subsidiary in connection with any of
the Loan Documents will contain, any material misstatement of fact or omit to
state any material fact necessary to make the statements contained therein not
misleading.
Section 11 Margin Regulations. No part of the proceeds of any
Loan will be used by the Company or any Subsidiary to purchase or carry any
margin stock (as defined in any Margin Regulation) or to extend credit to
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others for the purpose of purchasing or carrying any such margin stock, if the
making of any Loan or the use of the proceeds thereof would violate or be
inconsistent with the provisions of any Margin Regulation.
Section 12 Materially Burdensome Agreements. Except as
disclosed on Schedule 5.12 hereto or as identified in the notes to the Company's
financial statements delivered to the Agent and the Banks pursuant to Section
4.1(q), neither the Company nor any Subsidiary is a party to any agreement or
instrument or subject to any charter or other corporate restriction materially
and adversely affecting its business, properties or assets, operations or
condition (financial or otherwise) as currently conducted or used in connection
with its business. Neither the Company nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument evidencing or governing
Indebtedness or any other agreement to which it is a party, which default might
have a material adverse effect on the business, properties, financial condition
or results of operations of the Company and the Subsidiaries taken as a whole.
Section 13 Compliance with Laws; Franchises and Licenses.
(a) The Company and the Subsidiaries have complied with
all applicable statutes, rules, regulations, orders and restrictions (including,
without limitation, all Environmental Laws) of any domestic or foreign
government or any instrumentality or agency thereof having jurisdiction over the
conduct of their respective businesses or the ownership of their respective
properties, except where the failure to so comply would not have a material
adverse effect on the business, properties, financial condition or results of
operations of the Company and the Subsidiaries taken as a whole. The Company and
the Subsidiaries have obtained all franchises, licenses, certificates, consents,
approvals and authorizations granted or issued by any public or governmental
body, agency or authority necessary and appropriate to own and/or operate the
Radio Stations and all such franchises, licenses, certificates, consents,
approvals and authorizations are in full force and effect with respect to the
Radio Stations.
(b) Schedule 5.13(b)(i) includes, as of the Closing Date,
all FCC Broadcast Station Licenses of the Company and each of the Subsidiaries.
Each FCC Broadcast Station License which is materially necessary to the
operation of the business of the Company or any Subsidiary is validly issued and
in full force and effect. Such FCC Broadcast Station Licenses constitute all of
the FCC authorization necessary for the operation of the Company's and
Subsidiaries' businesses in the same manner as it is presently conducted. Each
of the Company and the Subsidiaries has fulfilled and performed all of its
material obligations with respect thereto, and complete and correct copies of
the FCC Broadcast Station Licenses of the Company and each of the Subsidiaries
have been delivered to the Agent. No event has occurred which (a) results in, or
after notice or lapse of time or both would result in, revocation or termination
of any FCC Broadcast Station License or (b) materially and adversely affects or
in the future will be reasonably likely (so far as the Company can now
reasonably foresee) to materially adversely affect any of the rights of the
Company or any of the Subsidiaries thereunder (other than proceedings related to
the radio broadcast industry generally). No other FCC license is necessary for
the operation of the business of the Company or any of the Subsidiaries as now
conducted. Except as set forth on
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Schedule 5.13(b)(ii) and as may be required under Section 310 of the
Communications Act of 1934, as amended, none of the FCC Broadcast Station
Licenses or other franchises or licenses require that any present stockholder,
director, officer or employee of the Company or any of the Subsidiaries remain a
stockholder or employee of the Company or any Subsidiary, or that any transfer
of control of the Company or any of the Subsidiaries must be approved by any
public or governmental body other than the FCC.
(c) Except as described on Schedule 5.13(c), to the best
of the Company's knowledge, on the Closing Date, neither the Company nor any of
the Subsidiaries is a party to any investigation, notice of violation, order or
complaint issued by or before any court or regulatory body, including the FCC,
or of any other proceedings (other than proceedings relating to the radio or
television industries generally) which could in any manner threaten or adversely
affect the validity or continued effectiveness of the FCC Broadcast Station
Licenses of the Company or any of the Subsidiaries. Except as described on
Schedule 5.13(c), as of the Closing Date, the Company has no reason to believe
(other than in connection with there being no legal assurance thereof) that the
FCC Broadcast Station Licenses listed and described on Schedule 5.13(b)(i) will
not be renewed in the ordinary course. Each of the Company and each Subsidiary
has filed all reports, applications, documents, instruments and information
required to be filed by it pursuant to applicable rules and regulations or
requests of the FCC to the extent that the failure to file the same could
threaten or adversely effect the validity or continued effectiveness of their
respective FCC Broadcast Station Licenses.
Section 14 Ownership of Properties. Except as set forth on
Schedule 5.14 hereto, the Company and each Subsidiary has good and marketable
title, free of all Liens, other than those permitted by Section 6.17, to all of
the properties and assets reflected in the financial statements as owned by it.
Section 15 Location of Properties.
(a) Except as set forth on Schedule 5.15(a) hereto, or as
otherwise disclosed by written notice from the Company to the Agent from time to
time, neither the Company nor any Subsidiary owns or possesses any fee or
leasehold interest in real property (other than interests in property which in
the aggregate are of no material value to the Company and its Subsidiaries).
(b) Except as set forth on Schedule 5.15(b) hereto, or as
otherwise disclosed by written notice from the Company to the Agent from time to
time, neither the Company nor any Subsidiary owns or possesses any interest in
any tangible personal property (including, without limitation, equipment,
fixtures and inventory) of any type whatsoever, which is not located at one of
the properties listed on Schedule 5.15(a) hereto, or as otherwise has been
disclosed by written notice from the Company to the Agent from time to time
(other than property which may be located at other properties from time to time
which in the aggregate is of no material value to the Company and its
Subsidiaries).
Section 16 Investment Company Act. Neither the Company nor any
Subsidiary nor any corporation controlling the Company or under common control
with the Company is an "investment company" or a company "controlled" by an
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"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
Section 17 Public Utility Holding Company Act. Neither the
Company nor any Subsidiary nor any corporation controlling the Company or under
common control with the Company is a "holding company" or a "subsidiary company"
of a "holding company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 18 Capital Structure.
(a) Schedule 5.18(a) sets forth as of the Closing Date,
both before and after giving effect to the Transactions to be consummated on the
Closing Date, the number of authorized and issued shares of each class of
capital stock of the Company and each of its Subsidiaries, the par value thereof
and the registered owner(s) of the capital stock of each Subsidiary. All of such
stock has been duly and validly issued and is fully paid and non-assessable.
Except as set forth in schedule 5.18(a), as of the Closing Date, neither the
Company nor any Subsidiary has outstanding any securities convertible into or
exchangeable for its capital stock nor does the Company or any Subsidiary have
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock. On the Closing Date, Z/C owns not less than 50% of the issued
and outstanding shares of common stock of the Company.
(b) Schedule 5.18(b)(i) identifies, as of the Closing
Date, all of the Indebtedness of the Company and its Subsidiaries immediately
prior to the making of the Loans and the application of the proceeds thereof
(the "Existing Debt"). As of the Closing Date and after the making of the Loans
and the application of the proceeds thereof and after the consummation of the
other Transactions which are to occur on the Closing Date, the Company and the
Subsidiaries shall have no Indebtedness to any Person other than Indebtedness
arising under the Loan Documents and the Indebtedness identified on Schedule
5.18(b)(ii) (the "Surviving Debt").
(c) Except as set forth on Schedule 5.18(b)(ii) hereto or
as permitted under Section 6.11 hereto, upon the making of the initial Loans and
the application of the proceeds thereof on the Closing Date (i) all claims in
connection with the Existing Debt (other than with respect to the Surviving
Debt) shall have been satisfied and released and (ii) the Obligations shall
constitute the only outstanding secured indebtedness of the Company and its
Subsidiaries.
Section 19 Deposit Accounts. Schedule 5.19 sets forth each
deposit account maintained by the Company and the Subsidiaries with any bank or
other financial institution on the Closing Date and accurately identifies each
such deposit account as a lock-box, concentration, disbursement or petty cash
account.
Section 20 Excluded Subsidiaries, etc. None of the Excluded
Subsidiaries has any material assets. As of the Closing Date Georgia Network
Equipment, Inc. has no material assets other than satellite dishes and related
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equipment located in various locations in the State of Georgia and several other
states with a value on the Closing Date not in excess of $75,000.
Section 21 Labor Matters. Except as set forth on Schedule 5.21,
there is no collective bargaining agreement covering any of the employees of the
Company or any Subsidiary on the Closing Date. As of the Closing Date, no single
employment contract is necessary for the profitable operation of the Company's
or any Subsidiary's business. As of the Closing Date, no attempt to organize the
employees of the Company or any Subsidiary, and no labor disputes, strikes or
walkouts affecting the operations of the Company or any Subsidiary, is pending
or, to the knowledge of the Company and its officers, threatened.
Section 22 Solvency. On the Closing Date and after giving
effect to the Transactions, the Company and each Subsidiary (other than Excluded
Subsidiaries) will be Solvent.
Section 23 Security Interests and Liens.
(a) The Collateral Documents (other than the Intercompany
Security Agreement) create, as security for the Obligations, valid and
enforceable security interests in and Liens on all of the Collateral, in favor
of the Agent for the benefit of the Agent and the Banks. Upon the filing of the
financing statements identified in Section 4.1(j) in the filing offices
contemplated therein, the filing of the Company Trademark Agreement and the
Subsidiary Trademark Agreement in the United States Patent and Trademark Office
and the filing and recordation of the Mortgages, such security interests in and
Liens on the Collateral (other than Collateral consisting of goods of Georgia
Network Equipment, Inc., fixtures on real property owned or leased by the
Company or any Subsidiary which is not subject to a Mortgage and motor vehicles)
shall be superior to and prior to the rights of all third parties (except as
disclosed on Schedule 5.23), and no further recordings or filings are or will be
required in connection with the creation, perfection or enforcement of such
security interests and Liens, other than the filing of continuation statements
in accordance with applicable law.
(b) The Intercompany Security Agreement creates, as
security for the "Secured Obligations" (as defined therein), valid and
enforceable security interests in and Liens on all of the "Collateral", in favor
of the Company. Upon the filing of the financing statements identified in
Section 4.1(j) in the filing offices contemplated therein, such security
interests in and Liens on such "Collateral" (other than Collateral consisting of
goods of Georgia Network Equipment, Inc., United States registered trademarks
(to the extent that perfection of a security interest therein requires a filing
with respect thereto with the United States Patent and Trademark Office),
fixtures on real property owned or leased by the Company or any Subsidiary which
is not subject to a Mortgage and motor vehicles) shall be superior to and prior
to the rights of all third parties other than the Agent (except as disclosed on
Schedule 5.23), and no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than the filing of continuation statements in
accordance with applicable law.
Section 24 Closing Date Transactions. On the Closing Date and
immediately prior to or contemporaneously with the making of the initial Loans
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hereunder, the Transactions intended to be consummated on the Closing Date will
have been consummated in accordance with all applicable laws. All consents and
approvals of, and filings and registrations with, and all other actions by, any
Person required in order to make or consummate such Transactions have been
obtained, given, filed or taken and are or will be in full force and effect.
Section 25 Call Letters; Patents, Trademarks, etc. As of the
Closing Date, the Company and the Subsidiaries in the aggregate have all rights
pursuant to the rules and regulations of the FCC to use as call letters of AM
broadcast radio stations the call letters "WGST", "WLW", "WCKY", "KOA", "KTLK",
"WFLA", "WBRD", "WJGR", "WZAZ", of FM radio broadcasting station call letters
"WPCH", "KHTS", "WEBN", "WOFX", "KRFX", "KBPI", "WFLZ", "WDUV", "WQIK", "WSOL",
"WWST", "WJBT" and "WMYU", and all trademarks, servicemarks, logos and
tradenames material to the operations thereof, of the Georgia News Network,
Critical Mass Media and of the Radio Stations. As of the Closing Date, the
Company and the Subsidiaries in the aggregate have certain rights pursuant to
the Joint Sales Agreement, the Local Marketing Agreement and the Mexican Sales
Agency Agreement to use AM broadcast radio station call letters "WSAI", "WAOZ"
and XETRA, and FM broadcast radio station call letters "WGST", "WAQZ", "KTCL"
and "XETRA". To the knowledge of the Company and its officers, as of the Closing
Date, and except (i) with respect to call letters used by the Company and its
Subsidiaries pursuant to Joint Sales Agreements, Local Marketing Agreements and
the Mexican Sales Agency Agreement, or (ii) as set forth in Schedule 5.25, no
Person other than the Company and the Subsidiaries has, owns, possesses, holds
or claims any interest with respect to the use of (or has challenged the right
of the Company or any Subsidiary to use) any of such call letters, trademarks,
servicemarks, logos or tradenames, except for claims which do not, either
individually or in the aggregate, materially effect the Company or any of its
Subsidiaries. Neither the Company nor any Subsidiary owns any United States
registered patent, trademark, servicemark and copyright material to the Company
or its Subsidiaries, except for those listed on Schedule 5.25.
Section 26 No Default. No Default or Unmatured Default has
occurred and is continuing.
Section 27 Brokers' Fees. Except as set forth on Schedule 5.27,
and except as payable to any person party to this Agreement or the Fee Letter,
neither the Company nor any Subsidiary has any obligation to any Person in
respect of any finder's, brokers, investment banking or other similar fee in
connection with any of the Transactions.
Section 28 Insurance. Schedule 5.28 accurately sets forth as of
the Closing Date all insurance policies and programs currently in effect with
respect to the respective property and assets and business of the Company and
the Subsidiaries, specifying for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the insurer
and each insured party thereunder, (iv) the policy or other identification
number thereof, (v) the expiration date thereof and (vi) the annual premium with
respect thereto. The insurance policies, programs and amounts maintained by the
Company and the Subsidiaries are adequate for the type of risks reasonably
anticipated for the lines of businesses in which the Company and its
Subsidiaries engage.
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Section 29 Representations and Warranties in Noble Documents.
All of the representations made by the Company and each of its Subsidiaries in
each Noble Document and, to the best of the Company's knowledge, all
representations made by each other Person in each of the Noble Documents and the
Mexican Documents are true and correct in all material respects. None of such
representations and warranties of the Company or any Subsidiary are inconsistent
in any material respect with the representations and warranties made herein or
in any other Loan Document.
ARTICLE VI
COVENANTS
The Company covenants and agrees that until the Aggregate
Commitment has been terminated and the Obligations have been paid in full,
unless the Required Banks shall otherwise consent in writing:
Section 1 Financial Reporting. The Company will maintain, for
itself and each Subsidiary, a system of accounting established and administered
in accordance with Generally Accepted Accounting Principles, and furnish to the
Agent and the Banks:
(a) Within 90 days after the close of each of its fiscal
years, an unqualified audit report certified by independent certified public
accountants of nationally recognized standing, acceptable to the Agent, prepared
in accordance with Generally Accepted Accounting Principles on a consolidated
basis for itself and the Subsidiaries, including balance sheets as of the end of
such period, related profit and loss and reconciliation of surplus statements
(consolidated only), setting forth in comparative form the figures for the
previous fiscal year, and a statement of cash flows (consolidated only),
accompanied by (i) a letter from said accountants substantially in the form of
Exhibit L hereto and (ii) a certificate of said accountants that, in the course
of their examination necessary for their certification of the foregoing, they
have obtained no knowledge of any Default or Unmatured Default, or if, in the
opinion of such accountants, any Default or Unmatured Default shall exist,
stating the nature and status thereof.
(b) Within 30 days after the end of each calendar month,
for itself and the Subsidiaries, consolidated and consolidating unaudited
balance sheets and Capital Expenditure statements as at the close of each such
month and consolidated profit and loss statements for such month and for the
period from the beginning of the Company's fiscal year to the end of such month,
in each case prepared in accordance with Generally Accepted Accounting
Principles and setting forth in comparative form the corresponding figures for
the comparable periods in the preceding fiscal year, for the period from the
beginning of such fiscal year to the end of such month, and, in each case, in
comparative form the corresponding figures for the corresponding items in the
budget for such periods delivered by the Company to the Agent and the Banks
pursuant to Section 6.1(c), all certified by its Treasurer or Chief Financial
Officer and prepared in accordance with Generally Accepted Accounting
Principles, except with respect to the unaudited balance sheets which are not
adjusted to reflect (1) the carrying value of barter receivables and barter
payables in accordance with FASB No. 63 and (2) the classification of out-
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standing debt between short term and long term. In addition, such statements
will not include footnotes.
(c) As soon as available, (i) but in any event within 45
days after the beginning of each fiscal year of the Company, a copy of the
annual budget prepared on a monthly basis for the Company and each of the Radio
Stations for such fiscal year reflecting cash flow requirements and results of
operations and (ii) any revisions to the budgets previously delivered.
(d) Together with the financial statements required to be
delivered under Section 6.1(a) and the financial statement required to be
delivered under Section 6.1(b) for the last month of each fiscal quarter of the
Company and, at the Required Banks' option, the financial statements required to
be delivered under Section 6.1(b) for any other month, a duly completed
Compliance Certificate.
(e) Within 180 days after the close of each fiscal year,
a statement of the Unfunded Liabilities of each Company Plan, certified as
correct by an Authorized Officer of the Company.
(f) As soon as possible and in any event within five
Business Days after an Authorized Officer of the Company learns (i) that any
Reportable Event has occurred with respect to any Company Plan or (ii) that any
Reportable Event has occurred with respect to any Plan other than a Company Plan
and, in the exercise of such officer's good faith judgment, such officer
determines that such Reportable Event is reasonably likely to result in payment
by the Company and the Subsidiaries in excess of $2,000,000, in each such case,
a statement, signed by the Chief Financial Officer of the Company, describing
said Reportable Event and the action which the Company or the ERISA Affiliate
(if applicable) proposes to take with respect thereto.
(g) Promptly upon the furnishing thereof to the
shareholders of the Company, copies of all financial statements, reports and
proxy statements so furnished.
(h) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular reports
which the Company or any Subsidiary files with the Securities and Exchange
Commission or the FCC.
(i) Such other information (including non-financial
information) as the Agent or any Bank may from time to time reasonably request.
Section 2 Notice of Default, Litigation etc. The Company will,
(a) within two (2) Business Days after an Authorized Officer of the Company
learns of the occurrence or existence thereof, give notice in writing to the
Agent of the occurrence of any Default or Unmatured Default and (b) within five
(5) Business Days after an Authorized Officer of the Company learns of the
occurrence or existence thereof, give notice to the Agent in writing of (i) any
litigation or other development (other than the issuance or adoption of any new
federal, state or local statute, regulation or ordinance or any other
development affecting the broadcasting industry generally), financial or
otherwise, which is reasonably likely to materially adversely affect the
business, properties, financial condition or results of operations of the
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Company and the Subsidiaries taken as a whole or which is reasonably likely to
adversely affect the ability of the Company or the Subsidiaries to repay the
Obligations as and when due or perform other obligations under the Loan
Documents, (ii) the receipt by the Company or any Subsidiary of any notice from
any federal, state or local governmental or regulatory body or authority of the
expiration without renewal, termination, material modification or suspension of,
or institution of any proceedings to terminate, materially modify, or suspend,
any license granted by the FCC or any other license now or hereafter held by the
Company or any Subsidiary which is required to operate any of the Radio Stations
in compliance with all applicable laws and regulations, (iii) any federal, state
or local statute, regulation or ordinance or judicial or administrative order
limiting or controlling the broadcast operations of the Company or any
Subsidiary which has been issued or adopted hereafter and which is of material
adverse importance or effect in relation to the operation of any of the Radio
Stations (other than matters affecting the radio broadcast industry generally)
or (iv) the timely filing by any party of an application to the FCC for an
authorization for a new or modified broadcasting station that is in conflict
with any of the applications of the Company or any Subsidiary for renewal of any
licenses of the Radio Stations.
Section 3 Financial Ratios.
6.3.1. Leverage Ratio. The Company will maintain, at all
times during the periods set forth below, a Leverage Ratio not greater than the
ratio set forth below opposite each such period:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C> <C>
Closing Date - 12/30/96 6.50:1
12/31/96 - 06/29/97 6.00:1
06/30/97 - 12/31/97 5.75:1
01/01/98 - 12/31/98 5.25:1
01/01/99 - 12/31/99 4.75:1
01/01/00 - 12/31/00 4.25:1
For each fiscal quarter
ending after 01/01/01 3.50:1
</TABLE>
provided, however, notwithstanding the foregoing, for the period of 90
consecutive days commencing upon the Citicasters L/C Funding Date, the Company
will maintain, at all times during such 90-day period, a Leverage Ratio of not
greater than 7.00 to 1, provided, immediately after such 90-day period, the
Company shall maintain the Leverage Ratio otherwise applicable hereunder.
6.3.2. Interest Coverage. The Company will maintain, as
at the last day of each fiscal quarter ending during the periods set forth
below, a ratio of (A) Operating Cash Flow to (B) Cash Interest Expense, in each
case calculated for the four consecutive fiscal quarters then most recently
ended (for which financial statements have been delivered pursuant to Section
6.1 hereof) for the Company and the Subsidiaries on a consolidated basis, not
less than the ratio set forth below opposite each such period; provided however,
(i) for the period ending March 31, 1996, Cash Interest Expense shall be
annualized based upon the number of days in such period from closing to 3/31/96,
(ii) for the period ending June 30, 1996 Cash Interest Expense will be the
product of (A) the sum of (x) Cash Interest Expense from clause (i)
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above divided by 4 plus (y) actual Cash Interest Expense for the period from
April 1, 1996 to June 30, 1996, multiplied by (B) 2, (iii) for the period ending
September 30, 1996, Cash Interest Expense will be the product of (A) the sum of
(x) Cash Interest Expense set forth in clause (i) above divided by 4 plus actual
Cash Interest Expense for the period from April 1, 1996 to September 30, 1996,
multiplied by (B) 1.33, and (iv) for the period ending December 31, 1996, Cash
Interest Expense will be the sum of (A) an amount equal to the amount of Cash
Interest Expense set forth in clause (i) above divided by four, and (B) actual
Cash Interest Expense for the period from April 1, 1996 to December 31, 1996:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C> <C>
Closing Date - 12/31/96 2.00:1
01/01/97 - 12/31/97 2.50:1
For each fiscal quarter
ending after 01/01/98 3.00:1
</TABLE>
6.3.3. Fixed Charge Coverage. The Company will maintain,
as at the last day of any fiscal quarter a ratio of (i) Operating Cash Flow to
(ii) Fixed Charges, in each case calculated for the four consecutive fiscal
quarters then most recently ended for the Company and the Subsidiaries on a
consolidated basis, of not less than 1.05 to 1.; provided, however, that for
each quarterly period ending on March 31, 1996, June 30, 1996, September 30,
1996 and December 31, 1996, (A) the Cash Interest Expense component of Fixed
Charges shall be determined as provided in Section 6.3.2 and (B) the components
of Fixed Charges contained in clauses (iii), (iv) and (v) of the definition of
Fixed Charges shall be determined on a consolidated historical pro forma 12
month trailing basis.
Section 4 Conduct of Business; Maintenance of Licenses. The
Company will, and will cause each Subsidiary to, (a) carry on and conduct the
business of owning and operating the Radio Stations in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted, provided that broadcast format and personnel changes shall not be
deemed a breach of this clause (a); (b) do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted;
and (c) do all things necessary to renew, extend and continue in effect all
permits, licenses and authorizations which may at any time and from time to time
be necessary to operate the Radio Stations in compliance with all applicable
laws and regulations.
Section 5 Taxes. The Company will, and will cause each
Subsidiary to, pay, before they become delinquent, all taxes, assessments and
governmental charges and levies upon it or its income, profits or property,
except those which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves have been set aside in accordance
with Generally Accepted Accounting Principles.
Section 6 Insurance. The Company will, and will cause each
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their property in such amounts and covering such risks as is
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consistent with sound business practice and is acceptable to the Required Banks,
and the Company will furnish to any Bank upon request full information as to the
insurance carried and shall maintain the Agent and the Banks as named additional
insureds as their interest may appear on each such policy and each such policy,
as appropriate, shall contain a lender's loss payee endorsement in form and
substance satisfactory to the Agent in favor of the Agent on behalf of itself
and the Banks.
Section 7 Compliance with Laws and FCC Filings in connection
with Loan Documents. The Company will, and will cause each Subsidiary to, comply
with all laws (including, without limitation, the Communications Act of 1934, as
amended.), rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject, including, without limitation, all
Environmental Laws and all rules and regulations promulgated by the FCC and all
FCC authorizations, except where the failure to so comply would not have a
material adverse effect on the business, properties, financial condition or
results of operations of the Company and its Subsidiaries taken as a whole and
would not result in the loss, cancellation, rescission, termination or
revocation of any broadcast license granted to the Company or any Subsidiary by
the FCC. Within five days after the Closing Date, the Company shall have made
all necessary filings with the FCC in connection with the execution, delivery
and performance of the Loan Documents and the transactions contemplated thereby,
including, without limitation, the applicable FCC filings set forth in Section
4.1(x) and on Schedule 5.3 hereto.
Section 8 Maintenance of Properties. The Company will, and will
cause each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its properties in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
Section 9 Inspection, etc. The Company will, and will cause
each Subsidiary to, permit the Agent and any Bank, by their respective
representatives and agents, to inspect any of the properties, corporate books
and financial records of the Company and each Subsidiary, to examine and (except
in the case of confidential information relating to the Company's relationship
with third parties) make copies of the books of accounts and other financial
records of the Company and each Subsidiary, and to discuss the affairs, finances
and accounts of the Company and each Subsidiary with, and to be advised as to
the same by, their respective officers at such reasonable times and intervals as
any Bank may designate by reasonable prior notice to the Company. The Company
shall provide to the Agent such appraisals of the Company's and Subsidiaries'
properties as the Agent or any Bank is required to obtain by any law or
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law), or any interpretation thereof, including, without
limitation, the provisions of Title XI of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, and any rules promulgated to implement
such provisions.
Section 10 Restricted Payments. The Company will not, nor will
it permit any Subsidiary to, (a) declare or pay any dividends on its capital
stock, or return any capital to its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders in
respect of its capital stock or (b) redeem, repurchase or otherwise ac-
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quire or retire, directly or indirectly, any of its capital stock at any time
outstanding (or any options, warrants or rights issued with respect to its
capital stock other than the options and warrants described in Schedule 6.10)
(collectively, the "Restricted Payments"), except (i) so long as no Default or
Unmatured Default shall have occurred and be continuing, Permitted Stock
Repurchases, (ii) any Wholly-Owned Subsidiary may declare and pay dividends to
the Company, (iii) solely to the extent required by applicable law, for payments
in connection with applicable dissenter's rights of shareholders of the Company,
and (iv) voluntary redemptions by the Company of outstanding warrants issued in
1993 to purchase shares of the common stock of the Company, which warrants are
exercisable on or before January 14, 2000 at $8.30 per share.
Section 11 Indebtedness. The Company will not, nor will it
permit any Subsidiary to create, incur or suffer to exist any Indebtedness,
except:
(a) Indebtedness under this Agreement and the other Loan
Documents.
(b) Guaranties (excluding Guaranties of obligations of
Subsidiaries to the extent that the obligations guaranteed thereby do not
constitute Indebtedness and the obligations so guaranteed are permitted to be
incurred by such Subsidiary hereunder) in an amount not to exceed, without
duplication when aggregated with the Indebtedness permitted under clauses (d)
and (f) of this Section 6.11, $10,000,000 at any one time outstanding.
(c) Indebtedness of (i) the Company to any Wholly-Owned
Subsidiary (other than an Excluded Subsidiary), (ii) any Wholly-Owned Subsidiary
to any other Wholly-Owned Subsidiary (other than an Excluded Subsidiary) to the
extent, but only to the extent, that such Indebtedness arises under the cash
management system of the Company and its Subsid- iaries in existence on the
Closing Date or (iii) any Wholly-Owned Subsidiary to the Company (A) pursuant to
the cash management system of the Company as in effect on the Closing Date or
(B) with respect to Intercompany Acquisition Loans, which Indebtedness is
evidenced by Intercompany Acquisition Notes which have been pledged and
delivered to the Agent, duly indorsed in blank by the Company, pursuant to the
Company Pledge Agreement.
(d) Indebtedness incurred to fund Capital Expenditures to
the extent permitted pursuant to Section 6.18 in an amount not to exceed, when
aggregated with the Indebtedness permitted under clauses (b) and (f) of this
Section 6.11, $10,000,000 at any one time outstanding.
(e) Existing Indebtedness identified on Schedule 6.11(e)
hereto.
(f) Additional Indebtedness in an amount not to exceed,
when aggregated with the Indebtedness permitted under clauses (b) and (d) of
this Section 6.11, $10,000,000 at any one time outstanding.
(g) On and after the Citicasters L/C Funding Date,
Indebtedness under the Citicasters L/C Documents.
Section 12 Merger. The Company will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except that
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(i) any Wholly-Owned Subsidiary not holding an FCC Broadcast Station License may
merge into the Company or another Wholly-Owned Subsidiary, (ii) OIA Broadcasting
L.L.C. may merge into Chesapeake Securities, Inc. and (iii) a Subsidiary may
merge with or into a Subsidiary or another Person (other than the Company) in
connection with, and for the purpose of consummating, a Permitted Acquisition.
Notwithstanding the foregoing, either a Subsidiary which has issued a Subsidiary
Guaranty shall either be the surviving corporation or the surviving corporation
shall enter into a new Subsidiary Guaranty.
Section 13 Sale of Assets. The Company will not, nor will it
permit any Subsidiary to, without the prior written approval of the Required
Banks, lease, sell or otherwise dispose of any of its property, assets or
business to any other Person (including, without limitation, any of its rights
under the Noble Documents and the Mexican Documents) (a "Disposition") except
for (i) Dispositions of inventory or of equipment which is no longer useful or
is obsolete, in each case in the ordinary course of business, (ii) Dispositions
of those assets described in Schedule 6.13, and (iii) Dispositions of any other
property, assets, or business (A) for consideration consisting of not less than
80% cash, (B) at fair market value, (C) in an arm's-length transaction and (D)
having an aggregate fair market value when added to other Dispositions made by
the Company and the Subsidiaries in reliance on this clause (iii) from and after
the Closing Date of not greater than $30,000,000; provided that no Disposition
shall be permitted under clauses (ii) or (iii) hereof if a Default shall have
occurred and be continuing or a Default or Unmatured Default shall result
therefrom. All of the Net Cash Proceeds of any Disposition shall be applied as
specified in Section 2.8 hereof, and all other proceeds shall be pledged to the
Agent to secure the Obligations, and when and as such proceeds are reduced to
cash, such cash shall be applied as specified in Section 2.8 hereof.
The Company will not, nor will it permit any Subsidiary to,
sell, discount (except to the obligor thereof in the ordinary course of
business) or otherwise dispose of any Receivables or any interest therein, with
or without recourse, other than receivables generated by a Radio Station which
are sold to a purchaser of such Radio Station.
Section 14 Sale and Leaseback. The Company will not, nor will
it permit any Subsidiary to, sell or transfer any property in order to
concurrently or subsequently lease as lessee such or similar property.
Section 15 Investments and Acquisitions. The Company will not,
nor will it permit any Subsidiary to, make or suffer to exist any Investments
(including, without limitation, loans and advances to, and other Investments in,
the Company or the Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Acquisition of any Person, except for (i) Permitted Acquisitions
which may be consummated without violating any of the other terms hereof,
provided, that the Agent has received a perfected first priority security
interest in the assets so acquired or the assets and stock of the Subsidiary so
acquired which shall be used to accomplish any such Acquisition as required
pursuant to Section 2.17, provided further, however, that the Banks agree that
the Agent will not receive a security interest in either such assets or stock if
and to the extent that such security interest in favor of the Agent would
violate applicable law and (ii) such of the following Investments as the Agent
has received a perfected first priority security interest
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(other than the Investments described in Section 6.15(c)(iv), (g) (to the extent
that such investments are not evidenced by stock certificates or other
instruments) or (h) or to the extent not required for those Investments
described on Schedule 6.15(f)):
(a) Short-term obligations of, or fully guaranteed by,
the United States of America.
(b) Commercial paper rated A-1 or better by Standard and
Poor's Corporation or P-1 or better by Moody's Investors Service, Inc. or the
Dreyfus Cash Management Fund or the American AAdvantage Money Market Fund.
(c) Demand deposit accounts maintained in the ordinary
course of business at one or more of the Banks or pursuant to an account
agreement which shall be satisfactory to the Agent, except for (i) petty cash in
an amount not to exceed, in the aggregate for all Radio Stations, $150,000 plus
an additional $6,000 following any Acquisition at any time, (ii) accounts
established by the Company or any Subsidiary in connection with promotions with
funds and other amounts credited thereto not to exceed $25,000 in the aggregate
at any time, (iii) payroll accounts, provided that the amount credited thereto
shall not on any day exceed the sum of all payroll checks then outstanding plus
the aggregate amount of all payroll checks to be issued on the next Business
Day, (iv) an account maintained by the Company to fund withdrawals from its
401(k) plan, provided that amounts credited thereto shall not exceed the sum of
all 401(k) withdrawals then pending plus $500, (v) the Disbursement Account,
provided that amounts credited thereto shall not on any day exceed the amount of
checks presented for payment on such account and which remain unpaid, and (vi)
funds held pursuant to customary lock-box arrangements, provided that such funds
shall be deposited in an account maintained at one or more of the Banks or
pursuant to an account agreement satisfactory to the Agent not later than one
Business Day after the day on which funds are first deposited in any such lock-
box.
(d) Certificates of deposit issued by and time deposits
with commercial banks (whether domestic or foreign) having capital and surplus
in excess of $100,000,000.
(e) Loans and advances constituting Indebtedness of the
Company or a Wholly-Owned Subsidiary permitted by the terms of Section 6.11(c),
provided that, with respect to any such Indebtedness of a Wholly-Owned
Subsidiary to the Company, such Indebtedness shall be evidenced by an
Intercompany Demand Note or an Intercompany Acquisition Note which has been
pledged and delivered to the Agent (duly indorsed in blank) pursuant to the
Company Pledge Agreement and shall be secured by substantially all of the assets
of such Subsidiary pursuant to the Intercompany Security Agreement.
(f) The Investments set forth on Schedule 6.15(f) hereto.
(g) Additional Investments not exceeding, in the
aggregate for the Company and the Subsidiaries, $30,000,000 at any one time
outstanding, provided that no such additional Investments shall be made in any
Excluded Subsidiary.
(h) Funds, in an amount not in excess of $30,000
maintained in a segregated account at Society National Bank of Cleveland, in
which
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the Agent and the Banks shall not have a Lien, which funds shall be used for the
purpose of making payments in respect of cash option elections and fractional
shares and fractional warrants.
(i) Notwithstanding anything else set forth in this
Section 6.15 or elsewhere in this Agreement or the other Loan Documents, the
Company is permitted to enter into a contract committing the Company to acquire
Citicasters Inc.; but the Company shall not consummate such acquisition without
the prior written consent of Agent and the Required Banks.
Section 16 Guaranties. The Company will not, nor will it permit
any Subsidiary to, make or suffer to exist any Guaranty (including, without
limitation, any Guaranty of the obligations of a Subsidiary), except (a)
Guaranties arising under the Collateral Documents, (b) those Guaranties
identified on Schedule 6.11(e), (c) Guaranties of obligations of Subsidiaries to
the extent that the obligations guaranteed thereby do not constitute
Indebtedness and the obligations so guaranteed are permitted to be incurred by
such Subsidiary hereunder and (d) Guaranties permitted under Section 6.11(b).
Section 17 Liens. The Company will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on any of
the property or assets of the Company or any Subsidiary, except:
(a) Liens for taxes, assessments or governmental charges
or levies on its property and assets if the same shall not, at the time, be
delinquent or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings diligently conducted and with respect
to which the Company or such Subsidiary is maintaining adequate reserves in
accordance with Generally Accepted Accounting Principles.
(b) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not more than 60
days past due or are being contested in good faith and by appropriate
proceedings diligently conducted and with respect to which the Company or such
Subsidiary as maintaining adequate reserves in accordance with Generally
Accepted Accounting Principles.
(c) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation and deposits made
in the ordinary course of business to secure obligations to public utilities and
under leases and contracts (other than contracts for Indebtedness).
(d) Utility easements, building restrictions,
reservations, encroachments, easements, exceptions, rights-of-way, covenants,
conditions and such other title exceptions, encumbrances or charges against real
property as are of a nature generally existing with respect to properties of a
similar character and which do not in any material way affect the marketability
of the same or interfere with the use thereof in the business of the Company or
the Subsidiaries.
(e) Attachments, judgments and other similar Liens
arising in connection with court proceedings, provided, that the execution or
other enforcement of such Liens is effectively stayed and the claims secured
thereby
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are being contested in good faith by appropriate proceedings diligently
conducted.
(f) Liens on property of a Subsidiary, provided that such
Liens secure only obligations owing by such Subsidiary to the Company or another
Subsidiary and are assigned to the Agent for the ratable benefit of the Banks.
(g) Liens in favor of the Agent and the Banks created
pursuant to the Collateral Documents.
(h) Liens granted to secure the Indebtedness permitted by
Section 6.11(d) or (f), provided that no such Lien shall extend to any property
other than the property purchased concurrently with the incurrence of such
Indebtedness.
(i) Existing Liens identified on Schedule 6.17 (i)
hereto.
Section 18 Capital Expenditures. The Company will not, nor will
it permit any Subsidiary to, make, or commit to make, without double-counting,
Capital Expenditures (other than Capital Expenditures made with insurance
proceeds to repair or replace damaged, destroyed, lost or stolen fixed assets
not in excess of $250,000 per fiscal year and Capital Expenditures financed with
Net Cash Proceeds from the asset sales made by the Company and the Subsidiaries
in the ordinary course of their respective businesses which are permitted to be
retained by the Company and the Subsidiaries pursuant to Section 2.8) other than
the following:
(a) Permitted Acquisitions.
(b) Capital Expenditures incurred by the Company and the
Subsidiaries in connection with broadcast radio operations owned or managed by
the Company and the Subsidiaries on the Closing Date in an amount not to exceed
the sum of $3,500,000 plus the applicable New Station Capex Increase (if any) in
the aggregate during any fiscal year of the Company (collectively "Existing
Radio Expenditure Maximum").
(c) Capital Expenditures incurred by the Company and the
Subsidiaries in connection with broadcast radio stations (other than those
referred to in clause (b) of this Section 6.18) which are acquired by the
Company and the Subsidiaries after the Closing Date (each, a "New Station") in
an amount not to exceed $300,000 for each such New Station or multiple New
Stations using a single facility during the fiscal year in which such radio
operations are first acquired ("New Radio Expenditure Maximum").
(d) Capital Expenditures incurred by the Company and the
Subsidiaries after the Closing Date in connection with the relocation of the
broadcast radio operations of the Company and the Subsidiaries in Atlanta,
Georgia in an aggregate amount not to exceed $500,000.
(e) Capital Expenditures incurred by the Company and its
Subsidiaries in connection with the acquisition of a studio facility in Tampa,
Florida in an amount not to exceed $3,000,000.
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(f) Capital Expenditures incurred by the Company and its
Subsidiaries in connection with the acquisition of a building in Cincinnati,
Ohio for use as a corporate facility, in an amount not to exceed $800,000.
Notwithstanding the foregoing, if in any fiscal year the
Company expends or commits to expend, without double- counting, less than the
Existing Radio Expenditure Maximum or the New Radio Expenditure Maximum for any
broadcast radio station, an amount equal to the difference between the Existing
Radio Expenditure Maximum or the New Radio Expenditure Maximum for any broadcast
radio station, as the case may be, and the amount actually expended or committed
to be expended, without double-counting, in such fiscal year may be expended in
the immediately subsequent fiscal year in addition to the Existing Radio
Expenditure Maximum or the New Radio Expenditure Maximum for such broadcast
radio station, respectively, otherwise permitted to be expended in such
subsequent year.
Section 19 Rentals. The Company will not, nor will it permit
any Subsidiary to, create, incur or suffer to exist obligations for Rentals in
excess of $10,000,000 during any one fiscal year in the aggregate for the
Company and the Subsidiaries.
Section 20 Affiliates. Except for transactions described in
Schedule 6.20 hereto, the Company will not, and will not permit any Subsidiary
to, enter into any transaction (including, without limitation, the purchase or
sale of any property or service), with, or make any payment or transfer to, any
Affiliate except in the ordinary course of business and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and upon
fair and reasonable terms no less favorable to the Company or such Subsidiary
than the Company or such Subsidiary would obtain in a comparable arm's-length
transaction.
Section 21 Management Fees. The Company will not, nor will it
permit any Subsidiary to, pay or become obligated to pay, any management or
other similar fee to Z/C or any of its Affiliates (other than reasonable and
customary fees for services actually rendered by professionals).
Section 22 Interest Rate Protection, etc.
(a) At any time when the one-month Eurodollar Base Rate
equals or exceeds 8.00% per annum, the Company shall enter into (to the extent
it has not already done so) interest rate protection agreements (each, a "Rate
Hedging Agreement") with one or more financial institutions (provided that such
financial institution or financial institutions are offering terms and
conditions generally available within the applicable market at such time), which
Rate Hedging Agreements, when taken together, shall have an aggregate notional
principal amount at least equal to 50% of the aggregate principal amount of the
Loans outstanding on the date of such agreement (the "Hedged Amount") pursuant
to which the effective interest rate (inclusive of all fees and costs related to
the Rate Hedging Agreements) payable by the Company with respect to such Hedged
Amount will be fixed or capped at a rate no greater than 8.00% per annum plus
the Applicable Margin for a period ending not earlier than the third anniversary
of the first date subsequent to such date on which such interest rate equals or
exceeds 8.00% per annum. All obligations by the Company to any Bank (or an
Affiliate thereof) under any Rate Hedging
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Agreement shall be secured by the Collateral, pari passu, with the Obligations
under the Loan Documents.
(b) Neither the Company nor any Subsidiary shall enter
into or become liable (directly or indirectly, absolutely or contingently) in
any way under or with respect to any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors, collars
or similar agreements) or any currency swaps or similar agreements except as
required under Section 6.22(a) and except for such other interest rate
protection agreements entered into by the Company with an aggregate notional
principal amount, when combined with the notional principal amount of any Rate
Hedging Agreements then maintained pursuant to Section 6.22(a), not in excess of
the outstanding principal amount of the Loans at such time.
Section 23 Certain Agreements. The Company shall not, and shall
not permit any of the Subsidiaries to, enter into any agreement (other than the
Loan Documents) which restricts the ability of the Company or any of its
Subsidiaries to (a) enter into amendments, modifications or waivers of the Loan
Documents, (b) sell, transfer or otherwise dispose of its assets, (c) create,
incur, assume or suffer to exist any Lien upon any of its property, (d) create,
incur, assume, suffer to exist or otherwise become liable with respect to any
Indebtedness, or (e) make any Restricted Payment, provided that Capital Leases
or agreements governing purchase money Indebtedness which contain restrictions
of the types referred to in clauses (b) or (c) with respect to the property
covered thereby and contracts entered into in the ordinary course of business
which contain standard non-assignment clauses shall be permitted.
Section 24 Fiscal Year; Fiscal Quarter. The Company shall not,
and shall not permit any of the Subsidiaries to, change its fiscal year or any
of its fiscal quarters.
Section 25 Amendment to Other Agreements. The Company shall
not, and shall cause the Subsidiaries not to, amend, modify or waive any
provision of the Intercompany Security Agreement, any Intercompany Demand Notes
or any Intercompany Acquisition Notes without the prior written consent of the
Agent on behalf of the Required Banks.
Section 26 Subsidiary Operations. The Company will not, nor
will it permit any Subsidiary to, activate, make any further Investment in or
contribute any assets to an Excluded Subsidiary and the Company will not permit
any Excluded Subsidiary to incur any Indebtedness or other obligations other
than Indebtedness to the Company existing on the Closing Date. The Company will
not, nor will it permit any Subsidiary to, make any further Investment in or
contribute any assets to Georgia Network Equipment, Inc. or permit Georgia
Network Equipment, Inc. to change its business as operated on the Closing Date
or to incur any Indebtedness or other obligations or to purchase any other
assets except for purchases of satellite dishes and related equipment in an
aggregate amount not to exceed $100,000.
Section 27 FCC Licenses. The Company shall not obtain, hold or
be licensee under any FCC Broadcast Station License.
Section 28 Deposit Accounts. The Company shall not, and shall
not permit any Subsidiary to, open any new deposit accounts with any bank or
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other financial institution (other than petty cash and promotional accounts to
the extent the same are permitted under Section 6.15) and as required by Section
6.29 without the prior written consent of the Agent.
Section 29 Cash Management System.
(a) The Company shall cause (i) each of the Subsidiaries
(other than Excluded Subsidiaries) to maintain a single, common, demand deposit
disbursement account (the "Disbursement Account") through which all of their
respective accounts payable and other disbursements shall be made, (ii) each
such Subsidiary shall maintain one or more officers who are common to all such
Subsidiaries to be the authorized signatories to the Disbursement Account, (iii)
all disbursements made from the Disbursement Account on behalf of any Subsidiary
to be made by such Subsidiary and (iv) all disbursements made on behalf of two
or more Subsidiaries to be made by each such Subsidiary, respectively, in an
amount equal to the amount of such disbursement attributable to such Subsidiary
provided, that disbursements on behalf of two or more Subsidiaries may be
combined into a single disbursement if the Company and Subsidiaries comply with
subsection (b) hereof with respect thereto.
(b) The Company shall maintain, on behalf of itself and
the Subsidiaries, accurate, complete and objectively verifiable accounting
systems, books and records with respect to the Disbursement Account, which books
and records shall indicate, on an as-drawn basis, each disbursement from the
Disbursement Account and identify, with respect to each disbursement, the
Subsidiary or Subsidiaries making such disbursement and, in the case of two or
more Subsidiaries making a single disbursement, the respective amounts of such
disbursement attributable to each respective Subsidiary.
(c) In maintaining the cash management system outlined in
this Section 6.29, the Company agrees to consult with, and at all times maintain
a cash management system reasonably satisfactory to, the Agent and the Required
Banks. The Company further agrees to deliver to the Agent and each Bank all such
information, documents and agreements relating to such cash management system as
any of them shall request.
Section 30 Amendments and Waivers to Noble Documents, the
Mexican Documents and the Employment Agreements. Without the prior written
consent of the Agent and the Required Banks, the Company shall not, and shall
not permit any Subsidiary to, enter into any material amendment to, or grant any
material waiver, release or consent with respect to, any of the terms and
conditions of any of the Noble Documents, the Mexican Documents or the
Employment Agreements, provided that in any event, no such amendment, waiver or
consent shall have any effect on the enforceability of any of the Noble
Documents, the Mexican Documents or the Employment Agreements, or on the ability
of the Company or any Subsidiary party thereto or the Agent, on behalf the
Banks, to enforce such agreements pursuant to any of the terms and conditions
thereof or pursuant to the Collateral Documents or otherwise.
Section 31 Intercreditor Agreement and the Citicasters L/C
Documents. Neither the Company nor any of its Subsidiaries shall enter into any
of the Citicasters L/C Documents until the Agent, the Banks and the L/C
Providers shall have entered into an intercreditor agreement, the subordination
provisions of which shall be in form and substance satisfactory to Banks having
in the aggregate at least 80% of the Aggregate Commitment or, if the
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Aggregate Commitment has been terminated, Banks holding in the aggregate at
least 80% of the aggregate unpaid principal amount of the outstanding Loans. The
Company hereby agrees that (i) it will not effect any Citicasters L/C Documents
unless such documents are effected by one or more Banks and/or by any other
Person, provided each such other Person shall be approved by all of the Banks,
and (ii) neither the Company nor any of its Subsidiaries shall apply the
proceeds of any Loan to pay principal of, or interest on, any Indebtedness
evidenced by any of the Citicasters L/C Documents.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
Section 1 Any representation or warranty made or deemed made by
or on behalf of the Company or any Subsidiary to the Banks or the Agent under or
in connection with this Agreement, any other Loan Document, or any certificate
or information delivered in connection with this Agreement or any other Loan
Document shall be materially false or misleading on the date as of which made or
deemed made.
Section 2 Nonpayment of principal of any Loan when due.
(a) Nonpayment of interest upon any Loan or of any fees
or other obligations under any of the Loan Documents within three (3) Business
Days after the same becomes due.
(b) Failure of any "Guarantor" (as defined in the Mexican
Guaranty) to make any payment when due or perform any obligation pursuant to the
terms and provisions of the Mexican Guaranty, which failure continues unremedied
for a period commencing from the occurrence of any such failure until the later
of (i) thirty (30) days and (ii) the Mexican Guaranty Grace Period.
Section 3 The Company shall default in the due performance or
observance of any term, covenant or agreement contained in (a) Section 6.2
(other than Section 6.2(a)) and such default shall continue unremedied for a
period of fifteen (15) days or (b) Section 6.1, 6.4, 6.5, 6.6, 6.7, 6.8 or the
last sentence of Section 6.9 and such default shall continue unremedied for a
period of thirty (30) days.
Section 4 The breach by the Company (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement.
Section 5 Failure of the Company or any Subsidiary to pay any
Indebtedness (other than the Obligations) in excess of $1,000,000 in the
aggregate when due; or the default by the Company or any Subsidiary in the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness (other than the Obligations) was created or is
governed, the effect of which is to cause, or to permit the holder or holders of
such Indebtedness to cause, such Indebtedness to become due prior to
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its stated maturity; or any such Indebtedness shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled or
contractually provided for payment (other than pursuant to an acceleration or
similar clause)) prior to the stated maturity thereof.
Section 6 The Company or any Subsidiary shall (a) have an order
for relief entered with respect to it under the Federal Bankruptcy Code, (b) not
pay, or admit in writing its inability to pay, its debts generally as they come
due, (c) make an assignment for the benefit of creditors, (d) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any substantial part of its
property, (e) institute any proceeding seeking an order for relief under the
Federal Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it, (f) take any corporate action to authorize or effect any of
the foregoing actions set forth in this Section 7.6 or (g) fail to contest in
good faith any appointment or proceeding described in Section 7.7.
Section 7 Without the application, approval or consent of the
Company or any Subsidiary, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Company or any Subsidiary or any substantial
part of its property, or a proceeding described in Section 7.6(e) shall be
instituted against the Company or any Subsidiary and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 60 consecutive days.
Section 8 Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of all or
any substantial portion of the assets of the Company or any Subsidiary. For
purposes of this Section 7.8, "substantial portion" means assets (valued at the
higher of book or fair market value) having a value in excess of 10% of the
consolidated assets of the Company and the Subsidiaries.
Section 9 The Company or any Subsidiary shall fail within 30
days to pay, bond or otherwise discharge any judgment or order for the payment
of money in excess of $1,000,000, which is not stayed on appeal or otherwise
being appropriately and diligently contested in good faith by appropriate
proceedings, unless the payment of all such amounts in excess of $1,000,000 is
fully insured by a financially responsible insurance company.
Section 10 With respect to any Company Plan, a Reportable Event
shall have occurred which is reasonably likely to result in the Company or any
Subsidiary incurring a liability or obligation to such Plan in excess of
$2,000,000; or
(a) With respect to any Plan (other than a Company Plan),
a Reportable Event shall have occurred which is reasonably likely to result in
the Company and/or the Subsidiaries being obligated to make a payment in excess
of $2,000,000; or
(b) The PBGC, the Company, any Subsidiary, any ERISA
Affiliate of the Company or any Subsidiary or any other Person shall have
initiated
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steps to terminate a Plan, or to have a trustee appointed for a Plan under
Section 4042 of ERISA, if as the result of such appointment or termination, the
Company or any Subsidiary is reasonably likely to be required to make a
contribution to such Plan, or to incur liability or obligation to such Plan, or
the PBGC, in excess of $2,000,000; or
(c) The Company, any Subsidiary or any of their ERISA
Affiliates shall have terminated, reorganized or withdrawn from a Multiemployer
Plan, if as the result of such withdrawal, termination or reorganization the
Company or any Subsidiary incurs a liability to such Multiemployer Plan in
excess of $2,000,000, which liability is not paid when required by applicable
law (unless it is being appropriately and diligently contested in good faith by
appropriate proceedings); or
(d) The Company or any Subsidiary shall have received any
notice from the PBGC (and such notice shall either demand payment from the
Company or any Subsidiary or shall suggest or indicate that the PBGC may
initiate an administrative or judicial action against the Company or any
Subsidiary) with respect to Unfunded Liabilities in excess of $2,000,000 of any
Plan, or the PBGC shall have initiated an administrative or judicial action with
respect to Unfunded Liabilities in excess of $2,000,000 of any Plan.
Section 11 The occurrence of any "default", as defined in any
Loan Document (other than the Agreement or the Notes), or the breach of any of
the terms or provisions of any Loan Document (other than the Agreement or the
Notes), which default or breach continues beyond any period of grace therein
provided.
Section 12 Any obligation of any Subsidiary under the
Subsidiary Guaranty shall fail to remain in full force or effect or any action
shall be taken to discontinue or to assert the invalidity or unenforceability of
any obligation of any Subsidiary under the Subsidiary Guaranty, or any
Subsidiary denies that it has any further liability under any Subsidiary
Guaranty to which it is a party, or gives notice to such effect.
Section 13 Any Collateral Document shall for any reason fail to
create a valid and perfected first priority security interest in any Collateral
purported to be covered thereby, except as permitted by the terms hereof or of
such Collateral Document, or shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of any Collateral Document.
Section 14 Any license, authorization, consent or permit
necessary for the ownership or essential for the operation of any of the Radio
Stations by the Company or any Subsidiary (a "License") shall expire, and on or
prior to such expiration, the same shall not have been or be in the process of
being renewed or replaced by another license, authorization, consent or permit
authorizing substantially the same operations of the Radio Stations by the
Company or any Subsidiary; or
(a) (i) any License (A) shall be cancelled, revoked,
terminated, rescinded, annulled, suspended or modified in a materially adverse
respect, or (B) shall no longer be in full force and effect and shall not be in
the process of renewal or replacement or (ii) the grant or the effec-
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tiveness of any such License shall have been stayed, vacated, reversed or set
aside, and, in each case, such action shall be no longer subject to further
administrative or judicial review; or
(b) in any renewal or revocation proceeding involving any
license necessary for the ownership or essential for the operation of any of the
Radio Stations, any administrative law judge of the FCC (or successor to the
functions of an administrative law judge of the FCC) shall have issued an
initial decision to the effect that the Company or any Subsidiary lacks the
qualifications to hold any FCC broadcast license, and such initial decision
shall not have been timely appealed or shall otherwise have become an order that
is final and no longer subject to further administrative or judicial review or
such administrative law judge shall issue a favorable determination on such
matters, which determination shall subsequently be reversed on appeal
provided, however, that none of the foregoing events described in this Section
7.14 shall constitute a Default if, assuming the final non-appealable loss by
the Company or any Subsidiary of any such license, authorization, consent or
permit at the conclusion of all legal proceedings incident thereto, such loss
would in the reasonable judgment of the Required Banks not materially adversely
affect the value of any material item or amount of Collateral or the Company's
or any Subsidiary's ability to perform its obligations under the Loan Document);
Section 15 Any Person shall take any action to enforce,
foreclose upon or take similar action with respect to any Lien (whether or not
permitted by the terms of this Agreement) on any material item or amount of
Collateral.
Section 16 Any Person or group (as defined for purposes of
Regulation 13D promulgated pursuant to The Securities Exchange Act of 1934, as
amended), other than Z/C or its Affiliates, shall acquire or become the
beneficial owner of more than 50% of the outstanding voting securities of the
Company or if the Company enters into a transaction such as (i) a sale of all or
substantially all of the assets of the Company, or (ii) a merger, acquisition or
consolidation (or other similar business combination transaction) pursuant to
which (x) the Company is not the surviving corporation or (y) after giving
effect to such transaction, there is a new majority shareholder of the Company.
Section 17 Z/C, shall at any time fail to have its designees
constitute at least 30% in number of the members of the Company's board of
directors.
Section 18 Any of the following events shall occur with respect
to any of the following Noble Documents or Mexican Documents:
(a) The Class B Shares of Noble shall not have been
transferred into the Stock Trust (as each such term is defined in the Noble
Stock Purchase and Warrant Redemption Agreement) by the 20th Business Day after
the required short-form FCC approval to such transfer has been obtained.
(b) The Stock Closing shall not occur on the Stock
Closing Date (as each such term is defined in the Noble Stock Purchase and
Warrant Redemption Agreement) in accordance with the provisions of the Noble
Stock Pur-
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chase and Warrant Redemption Agreement, in each case, as in effect on the
Closing Date or as amended in accordance with Section 6.30 hereof.
(c) Within 20 Business Days of the receipt of the Mexican
Approval, the Mexican Concession of RDP shall not have been transferred to XETRA
Communicaciones, S.A. de C.V. in accordance with the Mexican Documents.
(d) An Event of Default under (and as defined in) the
Noble-Company Credit Agreement (as in effect on the Closing Date) (i) arising
pursuant to either Section 7.1 or, 7.2 shall have occurred and be continuing
(after giving effect to any applicable grace periods set forth in such
Noble-Company Credit Agreement) and such Event of Default shall remain
unremedied for a period of 90 days after the occurrence thereof, or (ii) arising
pursuant to any other Section of such Noble- Company Credit Agreement if, with
respect to clause (ii) of this Section 7.18(e), such breach would be reasonably
expected to have a material adverse effect on the business, operations,
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole.
(e) Jacor or any of its Affiliates shall take any action
to discontinue or to assert the invalidity or unenforceability of any obligation
of any such Person (including, without limitation, Jacor or any such Affiliates)
under any of the Noble Documents or any of the Mexican Documents, or Jacor or
any of its Affiliates denies that it is obligated to perform any of its
obligations under the terms of any Noble Document or any Mexican Document, or
gives notice to such effect.
(f) (i) Any Person party to any of the Noble Documents or
any of the Mexican Documents shall fail to perform any term or condition of the
Noble Documents or the Mexican Documents, as the case may be, in accordance with
the respective terms thereof, or (ii) any obligation of any Person under any of
the Noble Documents or any of the Mexican Documents shall fail to remain in full
force or effect, and in the case of subclauses (i) or (ii) of this Section
7.18(f), such failure would be reasonably expected to have a material adverse
effect on the business, operations, condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole.
(g) The Company or any of its Subsidiaries shall fail to
actively pursue, on a best efforts basis, any of its material rights or remedies
under any of the Noble Documents or any the Mexican Documents.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Section 1 Acceleration. If any Default described in Section 7.6
or 7.7 shall occur with respect to the Company, the Aggregate Commitments and
the obligation of the Banks to make Loans hereunder shall automatically and
immediately terminate and the unpaid principal amount of the Loans and all of
the other Obligations shall automatically and immediately become due and payable
without any election or action on the part of the Agent or any Bank and without
presentment, demand, protest or notice or any other requirement of any kind, all
of which the Company hereby expressly waives. If any other Default shall occur
and be continuing, upon the direction of the Required Banks
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the Agent shall, (i) declare that the Aggregate Commitments are terminated,
whereupon the Aggregate Commitments and the obligation of the Banks to make
Loans hereunder shall be immediately terminated and (ii) declare the unpaid
principal amount of the Loans and the other Obligations to be due and payable,
whereupon the same shall immediately be and become due and payable, without
presentment, demand, protest or notice or any other requirement of any kind, all
of which the Company hereby expressly waives.
Section 2 Amendments. Subject to the provisions of this Article
VIII and except as otherwise provided in any Loan Document, amendments or
agreements supplemental hereto (and thereto, with respect to the relevant
Subsidiary in the case of the Subsidiary Guaranty, the Subsidiary Security
Agreement, a Subsidiary Pledge Agreement, a Subsidiary Trademark Agreement or a
Subsidiary Mortgage) may be entered into for the purpose of adding or modifying
any provisions of this Agreement or any of the other Loan Documents or changing
in any manner the rights of the Banks or the Company or any Subsidiary hereunder
or thereunder or waiving any Default hereunder or thereunder ("Amendments"),
under the terms and in the manner set forth below:
(a) With respect to Amendments that forgive or reduce
principal or interest or reduce the interest rate payable with respect to any
Loan or Obligation or postpone any date fixed for any regularly-scheduled
payment (including prepayments under Sections 2.8) of principal of, or interest
on, any such Loan or Obligation, postpone any Revolving A Loan Commitment
Reduction Date or any Revolving B Loan Commitment Reduction Date, change the
definitions of Amendment, Aggregate Commitment, Aggregate Revolving A Loan
Commitment, Aggregate Revolving B Loan Commitment, Revolving A Loan Commitment,
Revolving B Loan Commitment, Revolving A Loan Termination Date, Revolving B Loan
Termination Date, Revolving A Loan Commitment Reduction Amount, Revolving B Loan
Commitment Reduction Amount, Leverage Ratio (to the extent that the same would
affect the Applicable Margin) or Required Banks, amend or waive Section 2.4 (or
amend the definition of any of the terms used in such Section to the extent that
the same would affect the Applicable Margin), amend or waive this Section 8.2 or
Section 12.1 hereof, waive the payment of or reduce or defer any fees payable to
the Banks hereunder, consent or permit the assignment or transfer by the Company
or any Subsidiary of any of its obligations under any of the Loan Documents or
release any guarantor or release all or any substantial portion of the
Collateral from the Liens created by the Collateral Documents (except as may be
expressly contemplated in the Loan Documents), all of the Banks must approve
such Amendments in writing; provided, that nothing contained in this Section
8.2(a) shall restrict the ability of the Required Banks to make determinations
provided in the definition of Operating Cash Flow;
(b) With respect to Amendments that delay or reduce the
amount of any mandatory prepayment hereunder (other than as set forth in Section
8.2(a) hereof), Banks with 85% of the Aggregate Commitments (or, if the
Aggregate Commitments have been terminated, Banks holding 85% of the outstanding
principal amount of the Loans) must approve such Amendment in writing; and
(c) With respect to any other Amendment, the Banks then
constituting the Required Banks must approve such Amendments in writing.
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No amendment of any provision of this Agreement or any other
Loan Document relating to the Agent shall be effective without the written
consent of the Agent.
Section 3 Preservation of Rights. No delay or omission of the
Banks or the Agent to exercise any right under the Loan Documents shall impair
such right or be construed to be a waiver of any Default or an acquiescence
therein, and the making of a Loan notwithstanding the existence of a Default or
the inability of the Company to satisfy the conditions precedent to such Loan
shall not constitute any waiver or acquiescence. Any single or partial exercise
of any such right shall not preclude other or further exercise thereof or the
exercise of any other right, and no waiver, amendment or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be valid
unless in writing signed by the Company, the Subsidiary(ies) party thereto and
the Agent and by the Banks required pursuant to Section 8.2, and then only to
the extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent and the Banks until the Obligations have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
Section 1 Survival of Representations. All representations and
warranties of the Company contained in this Agreement shall survive delivery of
this Agreement and the Notes and shall continue in full force and effect until
the Obligations have been paid in full.
Section 2 Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Bank shall be obligated to extend
credit to the Company in violation of any limitation or prohibition provided by
any applicable statute or regulation.
Section 3 Taxes. Any stamp, documentary and similar taxes and
taxes in connection with the execution, delivery, filing or recordation of any
of the Loan Documents shall be paid by the Company.
Section 4 Headings. Section headings in the Loan Documents are
for convenience of reference only, and shall not govern the interpretation of
any of the provisions of the Loan Documents.
Section 5 Entire Agreement. The Loan Documents embody the
entire agreement and understanding among the Company, the Subsidiaries, the
Agent and the Banks and supersede all prior agreements and understandings among
the Company, the Subsidiaries, the Agent and the Banks relating to the subject
matter thereof.
Section 6 Several Obligations. The respective obligations of
the Banks hereunder are several and not joint and no Bank shall be the partner
or agent of any other (except to the extent to which the Agent is authorized to
act as such). The failure of any Bank to perform any of its obligations
hereunder shall not relieve any other Bank from any of its obligations
hereunder. This Agreement shall not be construed so as to confer any right or
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benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns.
Section 7 Expenses; Indemnification. The Company shall
reimburse (i) the Agent for any reasonable costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time charges of attorneys
for the Agent, which attorneys may be employees of the Agent) paid or incurred
by the Agent in connection with the negotiation, documentation, preparation,
review, execution, delivery, amendment, modification and administration of this
Agreement and the other Loan Documents (including without limitation, reasonable
costs and out-of-pocket expenses incurred in connection with post-closing UCC
searches and the analysis thereof) or any other documents reasonably required to
be reviewed or prepared in connection herewith or therewith and all
out-of-pocket expenses incurred by the Agent in connection with the taking and
perfection of Liens on the Collateral (including, without limitation, title and
lien searches, surveys, title commitment and insurance costs, filing fees and
documentary, stamp, filing and similar taxes and corporate search fees), (ii)
the Agent, each Co-Agent and each of the Banks for any reasonable costs,
internal charges and out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent and the Banks, which attorneys may be
employees of the Agent or any Bank) paid or incurred by the Agent, any Co-Agent
or any Bank in connection with the collection and enforcement or amendment or
modification of the Loan Documents or any restructuring in respect of the
Obligations and (iii) the Agent, any Co-Agent or any Bank for any cost and
expense of obtaining any appraisals in respect of the assets of the Company or
any Subsidiary, to the extent any Bank determines that such appraisals are
required by any law or any governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, including, without limitation, the provisions of Title XI of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, and any
rules promulgated to implement such provisions. The Company further agrees to
indemnify the Agent, each Co-Agent and each Bank, and their respective
directors, officers, attorneys, agents, and employees, for, and hold each of
them harmless against, all losses, claims (including, without limitation, all
Environmental Claims), damages, penalties, judgments, liabilities, actions,
proceedings, costs and expenses (including, without limitation, all attorney's
fees and legal expenses incurred by any of them and other expenses of litigation
or preparation therefor whether or not any suit or proceeding is brought or, if
so, whether or not the Agent, any Co-Agent or any Bank is a party thereto) which
any of them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or thereby or any
act, event or omission related hereto or thereto or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder,
provided, however, that no such Agent, Co-Agent, Bank, director, officer,
attorney, agent or employee shall have a right to be indemnified or held
harmless hereunder for its own gross negligence or willful misconduct as finally
determined in a judgment of a court of competent jurisdiction. The obligations
of the Company under this Section shall survive the repayment of the Obligations
and the termination of this Agreement.
Section 8 Numbers of Documents. All statements, notices,
closing documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the Banks.
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Section 9 Accounting. Except as provided to the contrary
herein, all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Company and all of the Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Company's
audited financial statements. In the event that Generally Accepted Accounting
Principles change after the Closing Date in any manner that would cause the
result of the calculation of any financial ratio under Agreement Accounting
Principles pursuant to Section 6.3 to be materially different than the result
that would have been obtained had Generally Accepted Accounting Principles been
applied in such calculation, the Company, the Agent and the Banks hereby agree
to negotiate in good faith to amend this Agreement to accommodate the Company's
desire not to maintain two sets of financial records.
Section 10 Severability of Provisions. Any provision in any
Loan Document that is held to be inoperative, unenforceable or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
Section 11 Non-liability of Bank. The relationship between the
Company and the Banks and the Agent shall be solely that of borrower and lender.
Neither the Agent nor any Bank shall have any fiduciary responsibilities to the
Company. Neither the Agent nor any Bank undertakes any responsibility to the
Company to review or inform the Company of any matter in connection with any
phase of the Company's business or operations.
Section 12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS.
Section 13 CONSENT TO JURISDICTION. THE COMPANY HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE COMPANY HEREBY
IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY
BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION
IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR ANY BANK TO BRING
PROCEEDINGS AGAINST THE COMPANY IN THE COURTS OF ANY OTHER JURISDICTION.
Section 14 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by signing
any such counterpart. This Agreement shall be effective when it has been
executed by the Company, the Agent and the Banks and the Company and each Bank
have delivered to the Agent executed counterpart signature pages hereto or a
facsimile of such executed counterpart signature page.
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Section 15 Confidentiality. Each Bank agrees to hold any
information designated as confidential which it may receive from the Company
pursuant to this Agreement in confidence, except for disclosure: (i) to other
Banks, (ii) to legal counsel, accountants, and other professional advisors to
such Bank, (iii) to regulatory officials, (iv) as required by law, regulation,
legal process, or in connection with any legal proceeding, (v) information which
has previously been made public and (vi) with the consent of the Company, which
consent shall not be unreasonably withheld, in connection with an actual or
proposed sale, assignment, participation or other disposition or proposed
disposition of such Bank's interests hereunder provided that the assignee,
proposed assignee, participant or proposed participant agreed in writing to be
bound by this Section 9.15.
Section 16 Limitation of Rights. Notwithstanding any other
provision of this Agreement, any foreclosure on, sale, transfer or other
disposition of, or the exercise of any right to vote or consent with respect to,
any of the collateral purported to be covered by any Collateral Document as
provided herein or in any Collateral Document or any other action taken or
proposed to be taken by the Agent or any Bank hereunder or thereunder which
would affect the operational, voting, or other control of the Company or any
Subsidiary, shall be pursuant to Section 310 of the Communications Act of 1934,
as amended, and to the applicable rules and regulations thereunder and, if and
to the extent required thereby, subject to the prior consent of the FCC.
Section 17 Limitation of Liability. No claim may be made by the
Company, any of its Subsidiaries or any other Person against the Agent, the
Co-Agents or any Bank or the Affiliates, directors, officers, employees,
attorneys or agent of any of them for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement or any other Transactions, or any act, omission or event
occurring in connection therewith; and the Company (for itself and each of its
Subsidiaries) hereby waives, releases and agrees not to sue upon any claim for
any such damages, whether or not accrued and whether or not known or suspected
to exist in its favor and Company (for itself and each of its Subsidiaries)
agrees to notify the Agent, each Co-Agent and each Bank, as applicable, of any
such claim promptly upon learning of any such claim.
ARTICLE X
THE AGENT
Section 1 Appointment. Banque Paribas is hereby appointed as
Agent hereunder and under the other Loan Documents, and each of the Banks and
each of the Co-Agents authorizes the Agent to act as the agent of such Bank and
such Co- Agents, and each of Bank of Boston and Bank of America Illinois are
hereby appointed as Co-Agent hereunder. Upon the execution and delivery by any
L/C Provider of any of the Citicasters L/C Documents, such L/C Provider shall be
deemed to appoint the Agent as its agent and such L/C Provider shall be deemed
to agree to, and accept, the provisions of this Article 10. Each of the
Co-Agents and the Banks hereby expressly consents to, and acknowledges the
appointment of, the Agent to act as the agent for any such L/C Provider. The
Agent agrees to act as such upon the express conditions contained in this
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Article X and the other Loan Documents. Each of the Banks authorizes the Agent
to execute each of the Collateral Documents and the financing statements and
other documents and instruments related thereto on behalf of such Bank (the
terms of which shall be binding on such Bank). Neither the Agent nor any
Co-Agent shall have a fiduciary relationship in respect of any Bank by reason of
this Agreement or any other Loan Document.
Section 2 Powers. The Agent shall have and may exercise such
powers hereunder and under the other Loan Documents as are specifically
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto. The Agent shall not have any implied
duties to the Banks, or any obligation to the Banks to take any action hereunder
or under any other Loan Document except any action specifically provided by this
Agreement or such other Loan Document to be taken by the Agent.
Section 3 General Immunity. Neither the Agent nor any Co-Agent
nor any of their respective directors, officers, agents, attorneys or employees
shall be liable to the Banks or any Bank for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct as finally determined in a judgment of a court of competent
jurisdiction.
Section 4 No Responsibility for Loans, Recitals, etc. Neither
the Agent nor any Co-Agent shall be responsible to the Banks for any recitals,
reports, statements, warranties or representations herein or in any other Loan
Document or be bound to ascertain or inquire as to the performance or observance
of any of the terms of this Agreement or any other Loan Document.
Section 5 Action on Instructions of Banks. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, hereunder
and under the other Loan Documents in accordance with written instructions
signed by the Required Banks, or, if applicable, the Banks required pursuant to
Article VIII hereof, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Banks and on all holders of
the Notes.
Section 6 Employment of Agents and Counsel. The Agent may
execute any of its duties as Agent hereunder or under the other Loan Documents
by or through employees, agents, and attorneys-in-fact and shall not be
answerable to the Banks, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning all matters pertaining to the agency
created hereby and by the other Loan Documents and its duties hereunder and
thereunder.
Section 7 Reliance on Documents; Counsel. The Agent and each
Co-Agent shall be entitled to rely upon any notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by it to be
genuine and correct and to have been signed or sent by the proper Person or
Persons, and, in respect of legal matters, upon the advice or opinion of counsel
selected by the Agent or such Co-Agent which counsel may be employees of the
Agent or such Co-Agent.
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Section 8 Agent's Reimbursement and Indemnification. Each Bank
agrees to reimburse and indemnify the Agent for its Pro Rata Share (i) of any
amounts not reimbursed by the Company or a Subsidiary for which the Agent or
such Co-Agent is entitled to reimbursement by the Company or a Subsidiary under
the Loan Documents, (ii) of any other expenses incurred by the Agent on behalf
of the Banks, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and (iii) of any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement, any other Loan Document or any other document
delivered in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby or thereby by the enforcement of any of the
terms hereof or of any other Loan Document or of any such other documents,
provided that no Bank shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent as
finally determined in a final judgment of a court of competent jurisdiction.
Section 9 Rights as a Lender. With respect to the Loans made by
it and the other Obligations owing to it, the Agent and each Co-Agent shall have
the same rights and powers hereunder as any Bank and may exercise the same as
though it were not the Agent or a Co-Agent and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent and each Co-Agent in
its individual capacity. The Agent and each Co-Agent may accept deposits from,
lend money to, and generally engage in any kind of banking or trust business
with the Company or any Subsidiary as if it were not the Agent or a Co-Agent.
Section 10 Bank Decisions. Each Bank acknowledges that it has,
independently and without reliance upon the Agent, either Co-Agent or any other
Bank and based on the financial statements prepared by the Company and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent, either Co- Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
Section 11 Successor Agent. The Agent may resign at any time,
effective upon the appointment and acceptance of a successor agent as described
below, by giving written notice thereof to the Banks and the Company, and the
Agent may be removed at any time with or without cause by written notice
received by the Agent from the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint on behalf of the
Banks a successor Agent which successor Agent shall, absent the occurrence and
continuance of a Default or Unmatured Default, be acceptable to the Company. If
no successor Agent shall have been so appointed by the Required Banks and shall
have accepted such appointment within thirty days after the retiring Agent's
giving notice of resignation, then the retiring Agent may appoint on behalf of
the Banks a successor Agent which successor Agent shall, absent the occurrence
and continuance of a Default or Unmatured Default, be acceptable to the Company.
Such successor Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000.
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Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and the retiring
Agent shall be discharged from any further duties and obligations hereunder and
under the other Loan Documents. After any retiring Agent's resignation hereunder
as Agent, the provisions of this Article X shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent hereunder and under the other Loan Documents.
Section 12 Collateral Releases. Provided that no Default or
Unmatured Default shall exist, the Company and the Subsidiaries may from time to
time sell or otherwise dispose of certain of the Collateral as permitted by the
terms of Section 6.13 and, upon the written request of the Company, the Agent
shall release the security interest of the Agent in the Collateral which is to
be sold or otherwise disposed of by the Company or any such Subsidiary in
accordance with the terms of Section 6.13. The Banks hereby empower and
authorize the Agent to execute and deliver to the Company or any Subsidiary any
such agreements, documents or instruments as shall be necessary or appropriate
to effect any such release and any other releases of Collateral which shall have
been approved by the Banks in writing, in accordance with Section 8.2.
Section 13 Duties and Rights of Co-Agents. The Co-Agents shall
have no duties under this Agreement or the other Loan Documents, and shall have
no rights, in their capacities as Co-Agents, hereunder except as expressly set
forth herein or therein.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
Section 1 Setoff. In addition to, and without limitation of,
any rights of the Banks under applicable law, if the Company becomes insolvent,
however evidenced, or any Default shall occur and be continuing, any
indebtedness from any Bank to the Company (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Bank,
whether or not the Obligations, or any part thereof, shall then be due.
Section 2 Ratable Payments. If any Bank, whether by setoff or
otherwise, has payment made to it upon its Loans in a greater proportion than
that received by any other Bank, such Bank agrees, promptly upon demand, to
purchase a participation in the Loans held by the other Banks so that after such
purchase each Bank will hold its ratable proportion of Loans. If any Bank,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Bank agrees, promptly upon demand,
to take such action as shall be necessary such that all Banks share in the
benefits of such collateral ratably in proportion to their Loans. In case any
such payment is disturbed by legal process, or otherwise, appropriate further
adjustments shall be made.
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<PAGE> 89
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
Section 1 Successors and Assigns. The terms and provisions of
the Loan Documents shall be binding upon and inure to the benefit of the Company
and the Banks and their respective successors and assigns, except that the
Company and its Subsidiaries shall not have the right to assign its rights or
delegate its duties or obligations under the Loan Documents, and any assignment
by any Bank must be made in compliance with Section 12.3. The Agent may treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent, and any assignee or transferee of a Note agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time of
making such request or giving such authority or consent is the holder of any
Note, shall be conclusive and binding on any subsequent holder, transferee or
assignee of such Note or of any Note or Notes issued in exchange therefor.
Section 2 Participations.
12.2.1. Permitted Participants; Effect. Any Bank may, in
the ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan made by such Bank or any other interest of
such Bank under the Loan Documents, provided that any such Participant shall
agree in writing to be bound by Section 9.15 hereof. In the event of any such
sale by a Bank of participating interests to a Participant, such Bank's
obligations under the Loan Documents shall remain unchanged, such Bank shall
remain solely responsible to the other parties hereto for the performance of
such obligations, such Bank shall remain the holder of any such Note for all
purposes under the Loan Documents, and the Company and the Agent shall continue
to deal solely and directly with such Bank in connection with such Bank's rights
and obligations under the Loan Documents.
12.2.2. Voting Rights. Each Bank shall retain the sole
right to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than any
amendment, modification or waiver with respect to any Loan or Obligation in
which such Participant has an interest which postpones the date on which the
outstanding principal amount of the Loans are to be paid by the Company in full
beyond December 31, 2003, forgives principal or interest or reduces the interest
rate payable with respect to any such Loan or Obligation, releases any guarantor
of any such Loan or Obligation or releases all or substantially all of the
Collateral securing any such Loan or Obligation.
12.2.3. Benefit of Setoff and Indemnities. The Company
agrees that each Participant shall be deemed to have the right of setoff
provided in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under the Loan
Documents, provided that each Bank shall retain the right of setoff provided in
Section 11.1 with respect to the amount of participating interests sold to each
Participant, except to the extent such Participant has exercised its
84
<PAGE> 90
right of setoff. The Banks agree to share with each Participant, and each
Participant, by exercising the right of setoff provided in Section 11.1, agrees
to share with each Bank, any amount received pursuant to the exercise of its
right of setoff, in accordance with Section 11.2 as if each Participant was a
Bank. The Company also agrees that each Participant shall be entitled to the
benefits of Sections 3.1 and 3.2 with respect to its participation; provided,
that no Participant shall be entitled to receive any greater amount pursuant to
such Sections that the transferor Bank would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Bank
to such Participant had no such transfer occurred.
Section 3 Assignments.
12.3.1. Permitted Assignments. Any Bank may, in the
ordinary course of its business and in accordance with applicable law, at any
time, assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents; provided that any
partial assignment of any Bank's rights and obligation hereunder shall be in a
minimum principal amount of $5,000,000 of such Bank's Loans and/or Commitments.
Such assignment (other than an assignment to the Federal Reserve Bank) shall be
substantially in the form of Exhibit M hereto. The consent of the Agent and,
unless a Default has occurred and is continuing, the consent of the Company
(such consent of the Agent and the Company not to be unreasonably withheld),
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Bank, an Affiliate thereof or a Federal Reserve Bank.
Such consents shall be substantially in the form attached as Schedule I to
Exhibit M (a "Notice of Assignment") hereto and shall not be unreasonably
withheld or delayed.
12.3.2. Effect; Effective Date. Upon delivery to the
Agent of a Notice of Assignment with a copy to the Company, together with any
consents required by Section 12.3.1, and payment of a $2,500 fee to the Agent
for processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. On and after the
effective date of such assignment, such Purchaser shall for all purposes be a
Bank party to this Agreement and the other Loan Documents and shall have all the
rights and obligations of a Bank under the Loan Documents, to the same extent as
if it were an original party hereto, and no further consent or action by the
Company, the Banks or the Agent shall be required to release the transferor Bank
with respect to the percentage of the Obligations assigned to such Purchaser.
Upon the consummation of any assignment to a Purchaser pursuant to this Section
12.3.2, the transferor Bank, the Agent and the Company shall make appropriate
arrangements so that replacement Notes are issued to such transferor Bank and
new Notes or, as appropriate, replacement Notes, are issued to such Purchaser,
in each case in principal amounts reflecting their Loans, as adjusted pursuant
to such assignment.
12.3.3. Dissemination of Information. The Company
authorizes each Bank to disclose to any Participant, Purchaser or any other
Person acquiring an interest in the Obligations, any portion thereof or the Loan
Documents by operation of law (each "Transferee") and, with the consent of the
Company (which consent shall not be unreasonably withheld), any prospective
Transferee, any and all information in such Bank's possession concerning the
creditworthiness of the Company, provided that each Transferee and prospective
Transferee agrees to be bound by Section 9.15 of this Agreement.
85
<PAGE> 91
12.3.4. Tax Treatment. If any interest in any Loan
Document is transferred to any Transferee (other than a then-existing Bank)
which is organized under the laws of any jurisdiction other than the United
States or any State thereof, the transferor Bank shall cause such Transferee,
concurrently with the effectiveness of such transfer, (i) to represent to the
transferor Bank (for the benefit of the transferor Bank, the Agent and the
Company) that under applicable law and treaties no taxes will be required to be
withheld by the Agent, the Company or the transferor Bank with respect to any
payments to be made to such Transferee in respect of the Loans, (ii) to furnish
to the transferor Bank, the Agent and the Company either U.S. Internal Revenue
Service Form 4224 or U.S. Internal Revenue Service Form 1001 (wherein such
Transferee claims entitlement to complete exemption from U.S. federal
withholding tax on all interest payments hereunder) and an Internal Revenue
Service Form W-8 or W-9 or successor appropriate forms (wherein such Transferee
claims exemption from United States back-up withholding tax) and (iii) to agree
(for the benefit of the transferor Bank, the Agent and the Company) to provide
the transferor Bank, the Agent and the Company a new Form 4224 or Form 1001 or
Form W-8 or W-9 upon the obsolescence of any previously delivered form and
comparable statements in accordance with applicable U.S. laws and regulations
and amendments duly executed and completed by such Transferee, and to comply
from time to time with all applicable U.S. laws and regulations with regard to
such withholding and back-up withholding tax exemptions.
ARTICLE XIII
NOTICES
Section 1 Giving Notice. Any notice required or permitted to be
given under this Agreement may be, and shall be deemed, given, if mailed, three
days after the date when deposited in the United States mail, postage prepaid,
or if by telegraph, when delivered to the appropriate office for transmission,
charges prepaid, or if by personal delivery or by facsimile, when received,
addressed to the Company (with copies to Sheli Z. Rosenberg, Rosenberg &
Liebentritt, 2 North Riverside Plaza, Suite 600, Chicago, Illinois 60606,
provided, however, that the failure to provide any such copies shall not affect
the validity or sufficiency of any such notice), the Banks or the Agent at the
addresses indicated below their signatures to this Agreement (with, in the case
of any notice to the Agent, a copy thereof to Banque Paribas, Media Group,
Equitable Tower, 787 7th Avenue, 32nd Floor, New York, New York (fax:
212-841-2369)).
Section 2 Change of Address. The Company, the Agent and any
Bank may each change the address for service of notice upon it by a notice in
writing to the other parties hereto.
ARTICLE XIV
WAIVER OF JURY TRIAL
THE COMPANY, THE AGENT AND EACH BANK HEREBY WAIVE TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
86
<PAGE> 92
IN WITNESS WHEREOF, the Company, the Banks and the Agent have
executed this Agreement as of the date first above written.
JACOR COMMUNICATIONS, INC.
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-6087
Attention: R. Christopher Weber
BANQUE PARIBAS,
Individually and as Agent
By:__________________________________
Title:_______________________________
By:__________________________________
Title:_______________________________
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
Facsimile: (312) 853-6020
Attention: Steve Heinen
Mark Radzik
Banque Paribas, Media Group
Equitable Tower
787 7th Avenue
32nd Floor
New York, New York 10019
Facsimile: (212) 841-2369
Attention: Eileen Burke
Salo Aizenberg
THE FIRST NATIONAL BANK OF BOSTON,
Individually and as Co-Agent
By:__________________________________
Title:_______________________________
100 Federal Street
Mail Stop 01-08-08
Boston, Massachusetts 02110
Facsimile: (617) 434-3401
Attention: Rob Milordi
87
<PAGE> 93
BANK OF AMERICA ILLINOIS,
Individually and as Co-Agent
By:__________________________________
Title:_______________________________
231 South LaSalle Street
14th Floor
Chicago, Illinois 60697
Facsimile: (312) 974-8014
Attention: Mary Rose Gage
BANK OF MONTREAL
By:__________________________________
Title:_______________________________
430 Park Avenue
New York, New York 10022
Facsimile: (212) 605-1648
Attention: Mike Andress
THE BANK OF NEW YORK
By:__________________________________
Title:_______________________________
1 Wall Street
16th Floor
New York, New York 10286
Facsimile: (212) 635-8593
Attention: Brendan Nedzi
THE BANK OF NOVA SCOTIA
By:__________________________________
Title:_______________________________
1 Liberty Plaza
New York, New York 10006
Facsimile: (212) 225-5090
Attention: Claudia Chifos
CIBC, INC.
By:__________________________________
Title:_______________________________
425 Lexington Avenue
New York, New York 10017
Facsimile: (212) 856-3558
Attention: Peter Smith
88
<PAGE> 94
FIRST BANK
By:__________________________________
Title:_______________________________
601 Second Avenue South
Mail Code: MPFP2805
Minneapolis, Minnesota 55402-4302
Facsimile: (612) 973-0354
Attention: Peter Rue
SOCIETY NATIONAL BANK
By:__________________________________
Title:_______________________________
127 Public Square
Cleveland, Ohio 44114
Facsimile: (216) 689-4666
Attention: Michael Stark
UNION BANK
By:__________________________________
Title:_______________________________
445 South Figueroa Street
15th Floor
Los Angeles, California 90071
Facsimile: (213) 236-5747
Attention: Kevin Sampson
89
<PAGE> 1
REVOLVING B NOTE
$11,366,666.00 February __, 1996
Jacor Communications, Inc., an Ohio corporation (the
"Company"), promises to pay to the order of Banque Paribas (the "Bank") the
lesser of the principal sum of ELEVEN MILLION THREE HUNDRED SIXTY SIX THOUSAND
SIX HUNDRED SIXTY SIX DOLLARS ($11,366,666.00) or the aggregate unpaid principal
amount of all Revolving B Loans made by the Bank to the Company pursuant to
Section 2.2 of the Credit Agreement (as hereinafter defined) in lawful money of
the United States of America and in immediately available funds at the main
office of the Agent (as defined below), in Chicago, Illinois, together with
interest on the unpaid principal amount hereof at the rates and on the dates set
forth in the Credit Agreement. The Company shall make mandatory payments as are
required to be made under the terms of the Credit Agreement.
The Bank shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Revolving B Loan and the date and amount
of each principal payment hereunder.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
This Revolving B Note is one of the Revolving B Notes issued
pursuant to, and is entitled to the benefits of, the Credit Agreement, dated as
of February __, 1996
<PAGE> 2
(as the same may be amended, modified, supplemented or restated and in effect
from time to time, the "Credit Agreement"), among the Company, the banks named
therein (including the Bank), Banque Paribas, as agent (in such capacity,
together with its successors and assigns, the "Agent") and the Co-Agents, to
which Credit Agreement reference is hereby made for a statement of the terms and
conditions under which this Revolving B Note may be prepaid or its maturity date
accelerated. This Revolving B Note is secured and guaranteed pursuant to the
Collateral Documents, all as more specifically described in the Credit
Agreement, and reference is made thereto for a statement of the terms and
provisions thereof. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Credit Agreement.
All parties hereto, whether as maker, endorser or otherwise,
hereby severally waive diligence, present- ment, protest, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand for payment hereunder in
accordance with the terms hereof and of the Credit Agreement.
JACOR COMMUNICATIONS, INC.
By:
--------------------------
Title:
-----------------------
By:
--------------------------
Title:
-----------------------
2
<PAGE> 3
SCHEDULE OF REVOLVING B LOANS AND PAYMENTS OF PRINCIPAL
TO
REVOLVING B NOTE OF JACOR COMMUNICATIONS, INC.,
DATED FEBRUARY __, 1996
<TABLE>
<CAPTION>
Maturity
Principal of Interest Principal
Amount of Period Amount Unpaid
Date Revolving B Loan (if applicable) Paid Balance
- ---- ---------------- --------------- ---- -------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 1
REVOLVING A NOTE
$19,633,334.00 February __, 1996
Jacor Communications, Inc., an Ohio corporation (the
"Company"), promises to pay to the order of Banque Paribas (the "Bank") the
lesser of the principal sum of NINETEEN MILLION SIX HUNDRED THIRTY THREE
THOUSAND THREE HUNDRED THIRTY FOUR DOLLARS ($19,633,334.00) or the aggregate
unpaid principal amount of all Revolving A Loans made by the Bank to the Company
pursuant to Section 2.1 of the Credit Agreement (as hereinafter defined) in
lawful money of the United States of America and in immediately available funds
at the main office of the Agent (as defined below), in Chicago, Illinois,
together with interest on the unpaid principal amount hereof at the rates and on
the dates set forth in the Credit Agreement. The Company shall make mandatory
payments as are required to be made under the terms of the Credit Agreement.
The Bank shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Revolving A Loan and the date and amount
of each principal payment hereunder.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL
LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
This Revolving A Note is one of the Revolving A Notes issued
pursuant to, and is entitled to the benefits of, the Credit Agreement, dated as
of February __, 1996 (as the same may be amended, modified, supplemented or
restated and in effect from time to time, the "Credit Agreement"), among the
Company, the banks named therein
<PAGE> 2
(including the Bank), Banque Paribas, as agent (in such capacity, together with
its successors and assigns, the "Agent") and the Co-Agents, to which Credit
Agreement reference is hereby made for a statement of the terms and conditions
under which this Revolving A Note may be prepaid or its maturity date
accelerated. This Revolving A Note is secured and guaranteed pursuant to the
Collateral Documents, all as more specifically described in the Credit
Agreement, and reference is made thereto for a statement of the terms and
provisions thereof. Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Credit Agreement.
All parties hereto, whether as maker, endorser or otherwise,
hereby severally waive diligence, present- ment, protest, demand and notice of
every kind and, to the full extent permitted by law, the right to plead any
statute of limitations as a defense to any demand for payment hereunder in
accordance with the terms hereof and of the Credit Agreement.
JACOR COMMUNICATIONS, INC.
By:
--------------------------
Title:
-----------------------
By:
--------------------------
Title:
-----------------------
2
<PAGE> 3
SCHEDULE OF REVOLVING A LOANS AND PAYMENTS OF PRINCIPAL
TO
REVOLVING A NOTE OF JACOR COMMUNICATIONS, INC.,
DATED FEBRUARY __, 1996
<TABLE>
<CAPTION>
Maturity
Principal of Interest Principal
Amount of Period Amount Unpaid
Date Revolving A Loan (if applicable) Paid Balance
- ---- ---------------- --------------- ---- -------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 1
JACOR COMMUNICATIONS, INC.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Security Agreement") is executed
as of February __, 1996 by and between Jacor Communications, Inc. (the
"Company") and Banque Paribas, as agent (the "Agent") for itself, the Co-Agents
and the Banks under the Credit Agreement hereafter referred to, any L/C
Providers (as defined in the Credit Agreement) (as defined in the Credit
Agreement) and any Interest Rate Providers (as defined in the Credit
Agreement).
W I T N E S S E T H:
WHEREAS, the Company is entering into that certain Credit
Agreement dated as of the date hereof, with the Banks (as defined therein), the
Co-Agents (as defined therein) and Banque Paribas, as agent (the "Agent") for
itself, the Co-Agents and the Banks (as modified, supplemented, amended,
extended, supplanted, or restated from time to time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires the Company to enter
into certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Providers;
WHEREAS, the execution and delivery of this Security Agreement
is a condition precedent to the availability of credit under the Credit
Agreement;
NOW, THEREFORE, in order to induce the Agent, the Co-Agents,
the Banks, any L/C Providers and any Interest Rate Providers to enter into the
Credit Agree-
<PAGE> 2
ment, the Citicasters L/C Documents and Rate Hedging Agreements, respectively,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this Security Agreement:
"Accounts" means "accounts" as defined in Section 9-106 of the
UCC.
"Chattel Paper" means "chattel paper" as defined in Section
9-105 of the UCC.
"Collateral" means all tangible and intangible property,
wherever located, whether now owned or hereafter existing, in which the Company
now has or hereafter acquires any right or interest, and the Proceeds
(including insurance proceeds), products, substitutions and replacements
thereof and additions and accessions thereto and all cash and cash equivalents,
bank accounts, special collateral accounts, and all books and records, customer
lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto, including, without limitation, the
following property: all Accounts, Chattel Paper, Deposit Accounts, Documents,
Equipment, Fixtures, General Intangibles, Instruments, Inventory, Stock Rights
and Proceeds, products, additions and accessions thereto or thereof; provided,
however, that Collateral shall not include (i) any licenses and permits issued
by the FCC to the extent it is unlawful to grant a security interest in any
such license or permit or to the extent that the grant of any such security
interest in any such license or permit would result in the forfeiture of any
such license or permit or a default under any such license or permit, (ii)
assets and stock of newly formed subsidiaries of the Company, to the extent
that the Agent is not to receive a security inter-
2
<PAGE> 3
est therein, as provided in clause (i) of the lead in paragraph of Section 6.15
of the Credit Agreement, (iii) collateral pledged to the Agent pursuant to the
Company Pledge Agreement and (iv) the funds and segregated account at Society
National Bank of Cleveland described in Section 6.15(h) of the Credit
Agreement.
"Deposit Accounts" means "deposit accounts" as defined in
Section 9-105 of the UCC.
"Documents" means "documents" as defined in Section 9-105 of
the UCC.
"Equipment" means "equipment" as defined in Section 9-109(2)
of the UCC.
"Fixtures" means "fixtures" as defined in Section 9-313 of the
UCC.
"General Intangibles" means "general intangibles" as defined
in Section 9-106 of the UCC, including, without limitation, all contract
rights, rights to receive payments of money, choses in action, judgments, tax
refunds and tax refund claims, patents, trademarks, trade names, copyrights,
licenses (including, without limitation, those issued by the FCC except to the
extent that it is unlawful to grant a security interest in any such license and
that the grant of any such security interest therein would result in a default
under any such license), franchises, leasehold interests in real or personal
property, rights to receive rentals of real or personal property, and guarantee
claims.
"Instruments" means "instruments" as defined in Section 9-105
of the UCC, including, without limitation, all checks, drafts, notes, bonds,
debentures, government securities, certificates of deposit, letters of credit,
preferred and common stocks, options and warrants.
3
<PAGE> 4
"Inventory" means "inventory" as defined in Section 9-109 of
the UCC, including, without limitation, all inventory, raw materials, work in
process, finished goods, returned or repossessed goods, goods held for sale or
lease or furnished or to be furnished under contracts of service and goods
released to the Company or to third parties under trust receipts or similar
documents.
"Proceeds" means "proceeds" as defined in Section 9-306 of the
UCC.
"Receivables" means the Accounts, Chattel Paper, Documents,
General Intangibles and Instruments.
"Section" means a numbered section of this Security Agreement,
unless another document is specifically referenced.
"Security Agreement" means this Security Agreement, as it may
be amended or modified and in effect from time to time.
"Stock Rights" means any stock, any dividend or other
distribution and any other right or property which the Company shall receive or
shall become entitled to receive for any reason whatsoever with respect to, in
substitution for or in exchange for any shares of stock constituting Collateral
and any stock, any right to receive stock and any right to receive earnings, in
which the Company now has or hereafter acquires any right.
"UCC" means the Uniform Commercial Code as in effect from time
to time in the State of Illinois.
The foregoing definitions shall be equally applicable to the
singular and plural forms of the defined terms. Capitalized terms used but not
defined herein have the same meanings as ascribed to such terms in the Credit
Agreement.
4
<PAGE> 5
2. GRANT OF SECURITY INTEREST.
In order to secure the full and complete payment and
performance by the Company of the Obligations when due, the Company hereby
pledges and grants to the Agent for the benefit of the Agent, the Co-Agents,
the Banks, any L/C Providers and any Interest Rate Providers, equally and
ratably in proportion to the total Obligations owing at any time to the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers, a
continuing lien and security interest in the Collateral.
3. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to the Agent, each
Co-Agent, each Bank, each L/C Provider and each Interest Rate Provider that:
3.1 Existence and Standing. The Company is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
3.2 Authorization, Validity and Enforceability. The
execution and delivery by the Company of this Security Agreement has been duly
authorized by proper corporate proceedings, and this Security Agreement
constitutes a legal, valid and binding obligation of the Company and creates a
security interest which is enforceable against the Company in accordance with
its terms in respect of all now owned and hereafter acquired Collateral, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
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3.3 Conflicting Laws and Contracts. Except as provided in
Section 5.3 of the Credit Agreement, neither the execution and delivery by the
Company of this Security Agreement, nor the creation and perfection of the
security interest in the Collateral granted hereunder, nor compliance with the
provisions hereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Company or the Company's
certificate of incorporation or by-laws or the provisions of any indenture,
instrument or agreement to which the Company is a party or is subject, or by
which it, or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on
the property of the Company pursuant to the terms of any such indenture,
instrument or agreement, except any violation, default or Lien which would not
have a material adverse effect on the business, financial condition or
operations of the Company. No order, consent, approval, license, authorization
or validation of, or filing, recording or registration with, or exemption by,
any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, the execution,
delivery and performance of, or the legality, validity, binding effect or
enforceability of, this Security Agreement or the grant of the security
interest in the Collateral pursuant hereto, other than the filing, within the
period established by applicable law, of this Security Agreement with the FCC
and as otherwise provided in Section 5.3 of the Credit Agreement.
3.4 Principal Location. The Company's mailing address and
the location of its chief executive office and the books and records relating
to the Receivables are disclosed in Exhibit "A" hereto; the Company has no
other places of business except those set forth in Exhibit "A" hereto.
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3.5 Property Locations. The Inventory and Equipment and
Fixtures are located solely at the locations described in Exhibit "A" hereto
and have not, within the four months preceding the date of this Security
Agreement, been located at any other locations. None of said locations are
leased by the Company as lessee except those designated in Part B of Exhibit
"A" hereto.
3.6 No Other Names. The Company has not conducted business
under any name except Jacor, Inc. and the name in which it has executed this
Security Agreement.
3.7 No Default. No Default, Unmatured Default or L/C Default
exists as of the date hereof.
3.8 Receivables. The names of the obligors, amounts owing,
due dates and other information with respect to the Receivables are and will be
correctly stated in all material respects in all records of the Company
relating thereto and in all invoices and reports with respect thereto furnished
to the Agent by the Company from time to time upon a request therefor.
3.9 Filing Requirements. None of the Equipment (other than
vehicles) is covered by any certificate of title. No security interests or
liens have been filed in respect of any of the Collateral under any federal
statute (other than filings with the United States Patent and Trademark Office
with respect to federally registered patents and trademarks). The legal
description and street address of those properties designated by the Agent on
which any Fixtures are located are set forth in Exhibit "B" hereto together
with the name and address of the record owner of each such property. Upon (a)
filing financing statements naming the Company as "debtor" and the Agent as
"secured party" and describing the Collateral in the filing offices set forth
on Exhibit "E" hereto and (b) the Instruments listed on Exhibit "D" which
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constitute Collateral having been delivered to the Agent, the Security
Interests in the Collateral (other than (i) motor vehicles, (ii) Deposit
Accounts, (iii) federally registered patents and trademarks to the extent a
filing with the United States Patent and Trademark Office is required to
perfect a security interest therein and (iv) fixtures on real property owned or
leased by the Company or any Subsidiary which is not subject to a Mortgage
granted to the Agent hereunder) will constitute perfected security interests
therein superior and prior to all Liens (other than Liens permitted by Section
6.17 of the Credit Agreement).
3.10 No Financing Statements. No financing statement
describing all or any portion of the Collateral which has not lapsed or been
terminated naming the Company as debtor has been filed in any jurisdiction
except financing statements (a) naming the Agent as secured party, (b) covering
Liens permitted by Section 6.17 of the Credit Agreement and (c) as described in
Exhibit "C" hereto.
3.11 Pledged Securities. Exhibit "D" hereto sets forth a
complete and accurate list of the Instruments if any, delivered to the Agent
for the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers. The Company is the direct and beneficial owner of
each share of stock, if any, listed on Exhibit "D" annexed hereto as being
owned by it. The Company further represents and warrants that all of such
shares of stock have been duly and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of any Liens, except
for the security interest granted to the Agent hereunder and Liens permitted by
Section 6.17 of the Credit Agreement.
4. COVENANTS.
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From the date of this Security Agreement and thereafter until
this Security Agreement is terminated:
4.1 General.
4.1.1 Inspection. The Company will permit the Agent
any Co-Agent, any L/C Provider or any Bank, by its or their representatives and
agents, to inspect the Collateral without materially interfering with the
Company's normal operations, to examine and (except in the case of confidential
information relating to the Company's relationship with third parties) make
copies of the records of the Company relating thereto, and to discuss the
Collateral and the records of the Company with respect thereto with, and to be
advised as to the same by, the Company's officers and employees and, after the
occurrence and during the continuance of any Default, Unmatured Default or L/C
Default, with any person or entity which is or may be obligated on any
Receivable, all at such reasonable times and intervals as the Agent or any Bank
may determine, all at the Company's expense.
4.1.2 Taxes. The Company will pay, before they
become delinquent, all taxes, assessments and governmental charges and levies
upon the Collateral, except those which are being contested in good faith by
appropriate proceedings and with respect to which no Lien exists other than
Liens permitted by Section 6.17 of the Credit Agreement.
4.1.3 Records and Reports. The Company will maintain
complete and accurate books and records with respect to the Collateral, and
furnish to the Agent, with sufficient copies for each of the Banks and any
Interest Rate Providers, such reports relating to the Collateral as the Agent
shall from time to time reasonably request.
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4.1.4 Notice of Default. The Company will give
prompt notice in writing to the Agent, the Banks, any L/C Providers and any
Interest Rate Providers of the occurrence of any Default, Unmatured Default or
L/C Default and of any other development (other than the issuance or adoption of
any new federal, state or local statute, regulation or ordinance or other
development affecting the broadcasting industry generally), financial or
otherwise, which is reasonably likely to materially adversely affect a
substantial portion of the Collateral or the ability of the Company to pay the
Obligations.
4.1.5 Financing Statements and Other Actions. The
Company will execute and deliver to the Agent all financing statements and other
documents (and, if so requested by the Agent or any Bank, use its best efforts
to obtain landlord waivers) and take such further actions from time to time
reasonably requested by the Agent, any Co-Agent or any Bank in order to
establish and maintain a first perfected security interest in the Collateral or
to otherwise obtain the full benefits of this Security Agreement. In addition,
without limiting the generality of the foregoing, the Company will
(a) mark conspicuously each and every writing which
individually or which when taken with one or more other writings constitutes
chattel paper included in the Collateral with a legend, in form and substance
satisfactory to the Agent, indicating the interest of the Agent therein;
(b) after the occurrence and during the continuance
of a Default or L/C Default, mark conspicuously each document included in the
Receivables and, at the request of the Agent, each of its records pertaining to
the Collateral with a legend, in form and substance satisfactory to the Agent,
indicating that such document or Collateral is subject to the security interest
granted hereby; and
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(c) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as
may be necessary or desirable, or as the Agent may request, in order to perfect
and preserve the security interest and other rights granted or purported to be
granted to the Agent hereby.
4.1.6 Disposition of Collateral. The Company will
not sell, lease or otherwise dispose of the Collateral, except as permitted by
Section 6.13 of the Credit Agreement.
4.1.7 Liens. The Company will not create, incur, or
suffer to exist any Lien except the security interest created by this Security
Agreement and Liens permitted by Section 6.17 of the Credit Agreement. The
Company agrees to warrant and defend title to and ownership of the Collateral
and the lien created by this Security Agreement against the claims of all
Persons and maintain and preserve such lien at all times during the term of this
Security Agreement.
4.1.8 Change in Location or Name. The Company will
not (i) have any Inventory, Equipment or Fixtures or proceeds or products
thereof (other than Collateral disposed of as permitted by Section 4.1.6) at a
location other than a location specified in Exhibit "A" hereto or any
jurisdiction in the United States in which a financing statement or similar
evidence of a security interest under applicable law has been filed against the
Company as debtor by the Agent as secured party, (ii) maintain records relating
to the Receivables at a location other than at the location specified on Exhibit
"A", (iii) maintain a place of business at a location other than a location
specified on Exhibit "A" hereto, (iv) change its name, or (v) change its mailing
address,
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unless the Company shall have given the Agent not less than 30 days' prior
written notice thereof.
4.1.9 Other Financing Statements. The Company will
not sign or authorize the signing on its behalf of any financing statement
naming it as debtor covering all or any portion of the Collateral, except
financing statements (a) naming the Agent as secured party, (b) covering Liens
permitted by Section 6.17 of the Credit Agreement, and (c) as described in
Exhibit "C" hereto.
4.2 Receivables.
4.2.1 Certain Agreements on Receivables. The Company
will not make or agree to make any discount, credit, rebate or other reduction
in the original amount owing on a Receivable or accept in satisfaction of a
Receivable less than the original amount thereof, except that, so long as no
Default or L/C Default has occurred and is continuing, the Company may reduce
the amount of Accounts in accordance with its present policies and in the
ordinary course of business.
4.2.2 Collection of Receivables. Except as otherwise
provided in this Security Agreement or the Credit Agreement, the Company will
collect and enforce, at the Company's sole expense, all amounts due or hereafter
due to the Company under the Receivables.
4.2.3 Delivery of Invoices. The Company will deliver
to the Agent immediately upon its request while a Default or L/C Default exists
duplicate invoices with respect to each Account bearing such language of
assignment as the Agent shall specify.
4.2.4 Disclosure of Counterclaim on Receivables. If
any discount, credit or agreement to make a rebate or to otherwise reduce the
amount owing on
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a Receivable in excess of $50,000 exists or if, to the knowledge of the
Company, any dispute, setoff, claim, counterclaim or defense exists or has been
asserted or threatened with respect to any such Receivable, the Company will
disclose such fact to the Agent in writing in connection with the inspection by
the Agent of any record of the Company relating to such Receivable and in
connection with any invoice or report furnished by the Company to the Agent
relating to such Receivable.
4.3 Inventory and Equipment.
4.3.1 Maintenance of Goods. The Company will do all
things necessary to maintain, preserve, protect and keep the Inventory and the
Equipment in good repair and working and saleable condition, except for obsolete
Equipment no longer used or useful in the Company's business.
4.3.2 Insurance. The Company will (i) maintain fire
and extended coverage insurance on the Inventory and Equipment containing a
lender's loss payable clause in favor of the Agent (or, upon request therefor,
designating the Agent as an additional insured) and providing that said
insurance will not be terminated except after at least 30 days' written notice
from the insurance company to the Agent, (ii) maintain such other insurance on
the Inventory and the Equipment for the benefit of the Agent, the Co-Agent, the
Banks, any L/C Providers and any Interest Rate Providers as is consistent with
sound practice in the broadcasting industry and (iii) furnish to the Agent upon
the request of the Agent from time to time the originals of all policies of
insurance on the Inventory and the Equipment and certificates with respect to
such insurance.
4.4 Instruments; Delivery of Pledged Collateral. The Company
will (i) deliver to the Agent immediately upon the execution of this Security
Agreement, the
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originals of all Instruments included in the Collateral (other than, so long as
no Default or L/C Default has occurred and is continuing, proceeds of Inventory
and Receivables collected in the ordinary course of business) which are
evidenced by certificates, endorsed in blank, marked with such legends and
assigned as the Agent shall specify, and (ii) hold in trust for the Agent, the
Co- Agents, the Banks, any L/C Providers and any Interest Rate Providers upon
receipt and immediately thereafter deliver to the Agent any Instrument
evidencing or constituting Collateral (except, so long as no Default or L/C
Default has occurred and is continuing, ordinary cash dividends paid with
respect to the Instruments which are stock and the Stock Rights related thereto
and proceeds of Inventory and Receivables collected in the ordinary course of
business).
4.5 Uncertificated Securities. The Company will permit the
Agent, the Co-Agents, the Banks, the L/C Providers and the Interest Rate
Providers from time to time to cause the appropriate issuers of uncertificated
securities constituting Instruments to mark their books and records with the
numbers and face amounts of all uncertificated securities constituting
Instruments and all rollovers and replacements therefor to reflect the Lien of
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers granted pursuant to this Security Agreement.
4.6 Stock.
4.6.1 Changes in Capital Structure of Issuers.
Except as otherwise permitted by Section 6.12 of the Credit Agreement, the
Company will not (i) permit or suffer any issuer of corporate securities
constituting Collateral which issuer is controlled by the Company to dissolve,
liquidate, retire any of its capital stock, reduce its capital or merge or
consolidate with any other
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entity, or (ii) vote any of the Instruments in favor of any of the foregoing.
4.6.2 Stock Rights. The Company will deliver to the
Agent, promptly upon receipt, all Stock Rights (other than, so long as no
Default or L/C Default has occurred and is continuing, ordinary cash dividends
received with respect to the Instruments which are stock) and agrees that such
Stock Rights shall be held in trust by the Company for the Agent, the Co-Agents,
the Banks, any L/C Providers and any Interest Rate Providers until delivery
thereof to the Agent.
4.6.3 Registration of Instruments. The Company will
permit any registrable Collateral to be registered in the name of the Agent or
its nominee at any time a Default or L/C Default exists at the option of the
Required Banks.
4.6.4 Exercise of Rights in Instruments. The Company
will permit the Agent or its nominee at any time a Default or L/C Default
exists, without notice but subject to compliance with applicable law and subject
to Section 8.18 hereof, to exercise all voting and corporate rights relating to
the Collateral, including, without limitation, exchange, subscription or any
other rights, privileges or options pertaining to any shares of the stock
pledged as Collateral and the Stock Rights as if it were the absolute owner
thereof.
4.7 Federal Claims; Notice to Agent. If at any time from
time to time the Agent directs the Company to begin doing so, the Company will
promptly notify the Agent of any Collateral which constitutes a claim against
the United States government or any instrumentality or agency thereof, the
assignment of which claim is restricted by federal law.
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4.8 Intercompany Security Agreement. So long as any
Obligations remain outstanding, the Company covenants and agrees with the
Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers that the Company will not and will not permit the Subsidiaries to
amend or terminate the Intercompany Security Agreement (as defined in the
Credit Agreement).
5. DEFAULT.
5.1 Default shall mean "Default" as defined in the Credit
Agreement and "L/C Default" shall mean any default under the Citicasters L/C
Documents.
5.2 Acceleration and Remedies. If any Default described in
Sections 7.6 or 7.7 of the Credit Agreement shall occur and be continuing with
respect to the Company, the Obligations shall immediately become due and
payable without any election or action on the part of the Agent, any Co-Agent,
any Bank or any Interest Rate Providers. If any other Default shall occur and
be continuing, the Required Banks may declare the Obligations to be immediately
due and payable, without presentment, demand, protest or notice of any kind,
all of which the Company hereby expressly waives. If any L/C Default shall
occur and be continuing, the L/C Providers may declare the Obligations to be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Company hereby expressly waives.
In such event, the Agent on behalf of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers may,
subject to Section 8.18:
5.2.1 Obligations That May Be Accelerated. Exercise
any or all of the rights and remedies provided (i) in this Security Agreement,
(ii) to a secured party when a debtor is in default under a security agreement
by the Uniform Commercial Code as enacted in
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the State of Illinois or other applicable jurisdiction, as amended, and (iii)
by any other applicable law including, without limitation, any law governing
the exercise of a bank's right of setoff or bankers' lien; and
5.2.2 Contingent Obligations. With respect to
Obligations which are contingent and cannot be accelerated by their nature, the
Agent may require the Company to deposit cash or other acceptable collateral in
an amount sufficient to cover principal and interest which will have accrued by
the maturity date on said Obligations to be held as security for said
Obligations in the special collateral account referred to in Section 7.
5.3 Company's Obligations upon Default. Upon the request of
the Agent after the occurrence and during the continuance of a Default or a L/C
Default, the Company will, subject to Section 8.18 and in the case of a L/C
Default, subject to any intercreditor agreement in effect from time to time:
5.3.1 Assembly of Collateral. Assemble and make
available to the Agent the Collateral and all records relating thereto at any
place or places reasonably specified by the Agent.
5.3.2 Agent Access. Permit the Agent, by the Agent's
representatives and agents, to enter any premises where all or any part of the
Collateral, or the books and records relating thereto, or both, are located, to
take possession of all or any part of the Collateral and to remove all or any
part of the Collateral.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of the Agent, any Co-Agent, any Bank, any
L/C Providers or any Interest Rate Providers to exercise any right or remedy
granted under
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this Security Agreement shall impair such right or remedy or be construed to be
a waiver of any Default, L/C Default or an acquiescence therein, and any single
or partial exercise of any such right or remedy shall not preclude other or
further exercise thereof or the exercise of any other right or remedy, and no
waiver, amendment or other variation of the terms, conditions or provisions of
this Security Agreement whatsoever shall be valid unless in writing signed by
the Agent and the Required Banks, and then only to the extent in such writing
specifically set forth; provided, however, that any amendment purporting to
release all or any substantial portion of the Collateral shall be valid only if
approved in accordance with Section 8.2 of the Credit Agreement. All rights
and remedies contained in this Security Agreement or by law afforded shall be
cumulative and all shall be available to the Agent, the Co-Agents, the Banks,
any L/C Providers and any Interest Rate Providers until the Obligations to the
Agent, the Co- Agents, the Banks, any L/C Providers and any Interest Rate
Providers have been paid in full and the Commitments have been terminated.
7. PROCEEDS; COLLECTION OF RECEIVABLES.
7.1 Collection of Receivables. The Agent may at any time
after the occurrence and during the continuance of a Default or L/C Default, by
giving the Company written notice, elect to require that the Receivables be
paid directly to the Agent for the benefit of the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers. In such event, the
Company shall, and shall permit the Agent to, promptly notify the account
debtors or obligors under the Receivables of the Agent's, the Co-Agents', the
Banks', any L/C Provider's and any Interest Rate Provider's interest therein
and direct such account debtors or obligors to make payment of all amounts then
or thereafter due under the Receivables directly to the Agent. Upon receipt of
any such
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notice from the Agent, the Company shall thereafter hold in trust for the
Agent, the Co-Agents, the Banks and any Interest Rate Providers all amounts and
proceeds received by it with respect to the Receivables and other Collateral
and immediately and at all times thereafter deliver to the Agent all such
amounts and proceeds in the same form as so received, whether by cash, check,
draft or otherwise, with any necessary endorsements. The Agent shall hold and
apply funds so received as provided by the terms of Sections 7.3 and 7.4.
7.2 Lockboxes. Upon request of the Agent at any time after
the occurrence and during the continuance of a Default or L/C Default, the
Company shall execute and deliver to the Agent the Agent's standard form
irrevocable lockbox agreements.
7.3 Special Collateral Account. The Agent may at any time
after the occurrence and during the continuance of a Default or L/C Default
require all cash proceeds of the Collateral received by the Agent to be
deposited in a special non-interest- bearing cash collateral account with the
Agent and held there as security for the Obligations. The Company shall have
no control whatsoever over said cash collateral account. The Agent may from
time to time (a) deposit the collected balances in said cash collateral account
into the Company's general operating account with the Agent or (b) apply the
collected balances in said cash collateral account to the payment of the
Obligations whether or not the Obligations shall then be due.
7.4 Application of Proceeds. The proceeds of the Collateral
shall be applied by the Agent to payment of the Obligations in the following
order unless a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all reasonable costs and
expenses of the Agent incurred in connection
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with the collection and enforcement of the Obligations or of the security
interest granted pursuant to this Security Agreement;
(b) SECOND, to payment of that portion of the
Obligations constituting accrued and unpaid interest, fees and other amounts
(other than principal), pro rata amongst each Bank, the Agent, each Co-Agent
and each L/C Provider in accordance with the proportion which the accrued
interest, fees and other amounts (other than principal) constituting
Obligations owing to each such Bank, Agent, Co-Agent and L/C Provider bears to
the aggregate amount of accrued interest, fees and other amounts (other than
principal) constituting Obligations owing to all of the Banks, the Agent and
the Co-Agents;
(c) THIRD, to payment of the principal of the
Obligations owing to the Banks, any Bank, any L/C Provider or any Interest Rate
Provider, pro rata amongst the Banks and any Interest Rate Providers in
accordance with the proportion that the principal of the Obligations owing to
each such Bank, L/C Provider or Interest Rate Provider bears to the aggregate
amount of principal of the Obligations owing to all of the Banks, any L/C
Providers and any Interest Rate Providers; and
(d) FOURTH, the balance, if any, after all of the
Obligations have been satisfied, shall be deposited by the Agent into the
Company's general operating account.
8. GENERAL PROVISIONS.
8.1 Notice of Disposition of Collateral, etc. The Company
hereby waives notice of the time and place of any public sale or the time after
which any private sale or other disposition of all or any part of the
Collateral may be made. To the extent such notice may not be waived under
applicable law, any notice made shall be deemed
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reasonable if sent to the Company, addressed as set forth in Section 9, at
least ten days prior to any such public sale or the time after which any such
private sale or other disposition may be made. In addition, the Company
waives, to the extent permitted by applicable law, (i) any right to require
either the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider to proceed against any other person, to exhaust their rights in any
other collateral, or to pursue any other right which either the Agent, any
Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider may have,
(ii) with respect to the Obligations, presentment and demand for payment,
protest, notice of protest and non-payment, and notice of the intention to
accelerate, and (iii) all rights of marshalling in respect of any and all of
the Collateral.
8.2 Compromises and Collection of Collateral. The Company,
the Banks, the Co-Agents, the Agent, any L/C Providers and any Interest Rate
Providers recognize that setoffs, counterclaims, defenses and other claims may
be asserted by obligors with respect to certain of the Receivables, that
certain of the Receivables may be or become uncollectible in whole or in part
and that the expense and probability of success in litigating a disputed
Receivable may exceed the amount that reasonably may be expected to be
recovered with respect to a Receivable. In view of the foregoing, the Company
agrees that the Agent may at any time and from time to time, if a Default or
L/C Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the Agent
in its reasonable discretion shall terminate or abandon any Receivable, and any
such action by the Agent shall be commercially reasonable so long as the Agent
acts in good faith based on information known to it at the time it takes any
such action.
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8.3 Secured Party Performance of Company Obligations.
Without having any obligation to do so, the Agent may perform or pay any
obligation in this Security Agreement which the Company has agreed to perform
or pay but which it has failed to so perform or pay in a timely manner after a
request therefor from the Agent for any amounts paid by the Agent pursuant to
this Section 8.3. The Company's obligation to reimburse the Agent pursuant to
the preceding sentence shall be an Obligation payable on demand.
8.4 Authorization for Secured Party to Take Certain Action.
The Company irrevocably authorizes the Agent at any time and from to time in
the sole discretion of the Agent and irrevocably appoints the Agent as its
attorney in fact to act on behalf of the Company (i) at any time (if the
Company has failed to do so promptly upon a request therefor) (a) to execute on
behalf of the Company as debtor and to file financing statements necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the Agent's security interest in the Collateral, and
(b) to file a carbon, photographic or other reproduction of this Security
Agreement or any financing statement with respect to the Collateral as a
financing statement in such offices as the Agent in its sole discretion deems
necessary or desirable to perfect and to maintain the perfection and priority
of the Agent's security interest in the Collateral and (ii) at any time after
the occurrence and during the continuance of a Default or L/C Default (a) to
endorse and collect any cash proceeds of the Collateral, (b) subject to the
terms of Section 4.1.6., to enforce payment of the Receivables in the name of
the Agent or the Company, and (c) to apply the proceeds of any Collateral
received by the Agent to the Obligations as provided in Section 7. The Company
hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section is irrevocable and coupled with an interest.
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8.5 Specific Performance of Certain Covenants. The Company
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.6, 4.4, 5.3, 7 and 8.7 will cause irreparable injury to the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers,
that the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest
Rate Providers have no adequate remedy at law in respect of such breaches and
therefore agrees, without limiting the right of the Agent, the Co-Agents, the
Banks, any L/C Providers or any Interest Rate Providers to seek and obtain
specific performance of other obligations of the Company contained in this
Security Agreement, that the covenants of the Company contained in the Sections
referred to in this Section 8.5 shall be specifically enforceable against the
Company.
8.6 Use and Possession of Certain Premises. Subject to the
provisions of Section 8.18, upon the occurrence and during the continuance of a
Default or L/C Default, the Agent shall be entitled to occupy and use any
premises owned or leased by the Company where any of the Collateral or any
records relating to the Collateral are located until the Obligations are paid
or the Collateral is removed therefrom, whichever first occurs, without any
obligation to pay the Company for such use and occupancy.
8.7 Dispositions Not Authorized. The Company is not
authorized to sell or otherwise dispose of the Collateral except as set forth
in Section 4.1.6 and notwithstanding any course of dealing between the Company
and the Agent and other conduct of the Agent, no authorization to sell or
otherwise dispose of the Collateral (except as set forth in Section 4.1.6)
shall be binding upon the Agent, the Co-Agents, the Banks, any L/C Providers or
any Interest Rate Providers unless such authoriza-
23
<PAGE> 24
tion is in writing signed by the Agent with the consent of the Required Banks.
8.8 Definition of Certain Terms. Terms defined in the
Illinois Uniform Commercial Code which are not otherwise defined in this
Security Agreement are used in this Security Agreement as defined in the
Illinois Commercial Code as in effect on the date hereof.
8.9 Benefit of Agreement. The terms and provisions of this
Security Agreement shall be binding upon and inure to the benefit of the
Company, the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers and their respec- tive successors and assigns, except
that the Company shall not have the right to assign its rights under this
Security Agreement or any interest herein, without the prior written consent of
the Agent.
8.10 Survival of Representations. All representations and
warranties of the Company contained in this Security Agreement shall survive
the execution and delivery of this Security Agreement.
8.11 Taxes and Expenses. Any Taxes payable or ruled payable
by Federal or State authority in respect of this Security Agreement shall be
paid by the Company, together with interest and penalties, if any, other than
Taxes expressly excluded under Section 3.2(a)(i) and 3.2(a)(ii) of the Credit
Agreement. The Company shall reimburse the Agent for any and all reasonable
out-of-pocket expenses and internal charges customarily charged by the Agent
(including reasonable attorneys', auditors' and accoun- tants' fees and
reasonable time charges of attorneys, paralegals, auditors and accountants who
may be employees of the Agent) paid or incurred by the Agent in connection with
the preparation, execution, delivery, administration, collection and
enforcement of this Security Agreement and in the audit, analysis, administra-
24
<PAGE> 25
tion, collection, preservation or sale of the Collateral (including the
expenses and charges associated with any periodic or special audit of the
Collateral).
8.12 Headings. The title of and section headings in this
Security Agreement are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this Security
Agreement.
8.13 Termination. This Security Agreement shall continue in
effect (notwithstanding the fact that from time to time there may be no
Obligations or commitments therefor outstanding) until (i) the Agent has
received written notice of its termination from the Company or its agents or
the Liens in favor of the Agent have been released, (ii) no Obligations to the
Agent, the Co-Agents, the Banks, any L/C Providers or any Interest Rate
Providers shall be outstanding and (iii) the Commitments shall have been
terminated. At such time, at the reasonable request and sole expense of the
Company, the Agent shall execute and deliver such documents and instruments as
may be necessary to evidence such termination and release.
8.14 Entire Agreement. This Security Agreement embodies the
entire agreement and understanding between the Company and the Agent relating
to the Collateral and supersedes all prior agreements and understandings
between the Company and the Agent relating to the Collateral.
8.15 CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF ILLINOIS.
8.16 Distribution of Reports. The Company authorizes the
Agent, as the Agent may elect in its sole discretion, to discuss with and
furnish to the Co-Agents,
25
<PAGE> 26
the Banks, any L/C Providers, any Interest Rate Providers or to any other
person or entity having an interest in the Obligations (whether as a guarantor,
pledgor of collateral, participant or otherwise) all financial statements,
audit reports and other information pertaining to the Company whether such
information was provided by the Company or prepared or obtained by the Agent
provided that such other person or entity agrees to hold such information in
confidence except for disclosure (i) to legal counsel, accountants and other
professional advisors to such purchaser, (ii) to regulatory officials, (iii) as
required by law, regulation or legal process, or (iv) in connection with any
legal proceeding to which such person or entity is a party. Neither the Agent
nor any of its employees, officers, directors or agents makes any
representation or warranty regarding any audit reports or other analyses of the
Company's condition which the Agent may in its sole discretion prepare and
elect to distribute, nor shall the Agent or any of its employees, officers,
directors or agents be liable to any person or entity receiving a copy of such
reports or analyses for any inaccuracy or omission contained in or relating
thereto.
8.17 Indemnity. The Company hereby agrees to assume
liability for, and does hereby agree to indemnify and keep harmless the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers,
and their respective successors, assigns, agents and employees, from and
against any and all liabilities, damages, penalties, suits, costs, and expenses
of any kind and nature, imposed on, incurred by or asserted against the Agent,
the Co-Agents, the Banks, any L/C Providers or any Interest Rate Providers, or
their respective successors, assigns, agents and employees, in any way relating
to or arising out of this Security Agreement, or the manufacture, purchase,
acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including,
26
<PAGE> 27
without limitation, latent and other defects, whether or not discoverable by
the Agent, the Co-Agents, the Banks, any L/C Providers or any Interest Rate
Providers or the Company, and any claim for patent, trademark or copyright
infringement), excluding any such losses, claims, damages, penalties,
judgments, liabilities, costs and expenses which result from the gross
negligence or willful misconduct of the Agent, any Co-Agent, any Bank or any
Interest Rate Provider.
8.18 Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary,
this Security Agreement, the other Loan Documents and the transactions
contemplated hereby and thereby (i) do not and will not constitute, create, or
have the effect of constituting or creating, directly or indirectly, actual or
practical ownership of the Company by the Agent, the Co-Agents, the Banks, any
L/C Providers or any Interest Rate Providers, or control, affirmative or
negative, direct or indirect, by the Agent, the Co-Agents, the Banks, any L/C
Providers or any Interest Rate Providers over the management or any other
aspect of the operation of the Company, which ownership and control remains
exclusively and at all times in the shareholders of the Company and the
Company, and (ii) except for the grant of a security interest hereunder to the
extent permitted by law, do not and will not constitute the transfer,
assignment, or disposition in any manner, voluntarily or involuntarily,
directly or indirectly, of any license at any time issued by the FCC to the
Company ("License"), or the transfer of control of the Company within the
meaning of Section 310 of the Communications Act of 1934, as amended.
(b) Notwithstanding any other provision of this
Security Agreement, any foreclosure on, sale, transfer or other disposition of,
or the exercise of any right to vote or consent with respect to, any of the
27
<PAGE> 28
Collateral as provided herein or any other action taken or proposed to be taken
by the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers hereunder which would affect the operational, voting or other control
of the Company, shall be pursuant to Section 310 of the Communications Act of
1934, as amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
(c) Subject to Section 8.18(e), if a Default or L/C
Default shall have occurred and be continuing, the Company shall take any
action which the Agent, on behalf of the Agent, the Co-Agents, the Banks, any
L/C Providers and any Interest Rate Providers, may reasonably request in order
to transfer and assign to the Agent, or to such one or more third parties as
the Agent may designate, or to a combination of the foregoing, each License.
To enforce the provisions of this Section 8.18 the Agent is empowered to
request the appointment of a receiver from any court of competent jurisdiction.
Such receiver shall be instructed to seek from the FCC an involuntary transfer
of control of each such License for the purpose of seeking a bona fide
purchaser to whom control will ultimately be transferred. The Company hereby
agrees to authorize such an involuntary transfer of control upon the request of
the receiver so appointed and, if the Company shall refuse to authorize the
transfer, the Company's approval may be required by the court. Upon the
occurrence and continuance of a Default or L/C Default, the Company shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Security
Agreement including, without limitation, the preparation, execution and filing
with the FCC of the assignor's or transferor's portion of any application or
applications for consent to the assignment of any License or transfer of
control necessary or appropriate under the FCC's rules
28
<PAGE> 29
and regulations for approval of the transfer or assignment of any portion of
the Collateral, together with any License.
(d) The Company acknowledges that the assignment or
transfer of each License is integral to the Agent's, the Co-Agents', the Banks'
any L/C Provider's and any Interest Rate Provider's realization of the value of
the Collateral, that there is no adequate remedy at law for failure by the
Company to comply with the provisions of this Section 8.18 and that such
failure would not be adequately compensable in damages, and therefore agrees
that the agreements contained in this Section 8.18 may be specifically
enforced.
(e) Notwithstanding anything to the contrary
contained in this Security Agreement or in any other Transaction Document,
neither the Agent, any Co-Agent, any Bank, any L/C Provider nor any Interest
Rate Provider shall, without first obtaining the approval of the FCC, take any
action pursuant to this Security Agreement which would constitute or result in
any assignment of a License or any change of control of any License or the
Company if such assignment or change in control would require, under then
existing law (including the written rules and regulations promulgated by the
FCC), the prior approval of the FCC.
8.19 Insurance Proceeds. Subject to the provisions set forth
in Section 6.18 of the Credit Agreement, so long as no Default, Unmatured
Default or L/C Default has occurred and is continuing or is reasonably
anticipated to occur, insurance proceeds received in respect of Inventory,
Equipment and Fixtures shall be remitted to the Company by the Agent, provided
that such proceeds are used to rebuild, repair or restore such Inven-
29
<PAGE> 30
tory, Equipment or Fixtures to a condition at least as good as its former
condition or to replace such Inventory, Equipment or Fixture with like property
of at least equal value.
8.20 Company Remains Liable. Anything herein to the contrary
notwithstanding,
(a) the Company shall remain liable under the
contracts and agreements included in the Collateral to the extent set forth
therein and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Security Agreement had
not been executed,
(b) the exercise by the Agent of any of its rights
hereunder shall not release the Company from any of its duties or obligations
under any such contracts or agreements included in the Collateral, and
(c) neither the Agent, any Co-Agent, any Bank, any
L/C Provider nor any Interest Rate Provider shall have any obligation or
liability under any such contracts or agreements included in the Collateral by
reason of this Security Agreement, nor shall the Agent, any Co-Agent, any Bank,
any L/C Provider or any Interest Rate Provider be obligated to perform any of
the obligations or collect or enforce any claim for payment assigned hereunder.
9. NOTICES; COUNTERPARTS; ETC.
9.1 Sending Notices. Any notice required or permitted to be
given under this Security Agreement shall be in writing and may be, and shall
be deemed, given, if mailed, three days after the date when deposited in the
United States mail, postage prepaid, of if by telegraph or telex, when
delivered to the appropriate office for transmission, charges prepaid, or if by
personal delivery or by telecopy, when received, addressed to the Company at
the address set forth on Exhibit "A" hereto as its
30
<PAGE> 31
chief executive office (with copies to Sheli J. Rosenberg, Esq., Rosenberg &
Liebentritt, L.P., 2 North Riverside Plaza, Suite 600, Chicago, Illinois 60606,
provided, however, that the failure to provide any such copy shall not affect
the validity or sufficiency of any such notice), to the Agent at the address
indicated below its signature hereto, to the Co-Agents and the Banks at the
addresses indicated below their respective signatures to the Credit Agreement,
to the L/C Providers at the addresses provided to the Company and the Agent in
writing by such L/C Providers and to any Interest Rate Providers at the
addresses provided to the Company and the Agent in writing by such Interest
Rate Providers.
9.2 Change in Address for Notices. Each of the Company, the
Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers may change the address for service of notice upon it by a notice in
writing to the other parties.
9.3 Counterparts. This Security Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security Agreement by
signing any such counterpart. This Security Agreement shall be effective when
it has been executed by the Company and the Agent.
9.4 Loan Document. This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the forms and provisions thereof.
10. THE AGENT.
Banque Paribas has been appointed Agent of the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers hereunder pursuant to
Article X of the
31
<PAGE> 32
Credit Agreement, and the Agent has agreed to act (and any successor Agent
shall act) as such hereunder only on the express conditions contained in such
Article X. Any successor Agent appointed pursuant to Article X of the Credit
Agreement shall be entitled to all the rights, interests and benefits of the
Agent hereunder.
32
<PAGE> 33
IN WITNESS WHEREOF, the undersigned have executed this
Security Agreement as of the date first above written.
JACOR COMMUNICATIONS, INC.
By:______________________________________
Title:___________________________________
By:______________________________________
Title:___________________________________
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
BANQUE PARIBAS, as Agent
By:______________________________________
Title:___________________________________
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
33
<PAGE> 34
EXHIBIT "A"
(See Sections 3.4 and 3.5 of Security Agreement)
Chief Executive Office and Mailing Address:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
Location(s) of Receivables Records (if different from Chief Executive Office
above):
Locations of Inventory and Equipment and Fixtures:
A. Properties Owned by the Company:
None*
B. Properties Leased by the Company (Include Landlord's Name):
None*
____________________
* All interests of the company in Inventory, Equipment and Fixtures were
transferred to Jacor Broadcasting Corporation as of January 1, 1993.
<PAGE> 35
EXHIBIT "B"
Legal Description* and Street Address of Property on which Fixtures are
located:
(See Section 3.9 of Security Agreement)
None**
Name and Address of Record Owner:
_________________________________
_________________________________
_________________________________
____________________
* For those properties designated by the Agent on which fixture filings
are to be made.
** All interests of the Company in Fixtures were transferred to Jacor
Broacasting Corproation as of January 1, 1993.
EXHIBIT "C"
(See Section 3.10 of Security Agreement)
EXISTING LIENS ON THE COLLATERAL
<TABLE>
<CAPTION>
Secured Party Collateral* Principal Balance Maturity
- ------------- ---------- ----------------- --------
<S> <C> <C> <C>
[XEROX CORP. XEROX 1090 COPIER
PITNEY BOWES POSTAGE MACHINES
FRIEDEN OFFICE MACHINES]
</TABLE>
____________________
* The Company transferred all of its interests in all tangible and intangible
property (other than stock of the Subsidiaries) to Jacor Broadccasting
Corporation as of January 1, 1993.
<PAGE> 36
EXHIBIT "D"
(See Section 3.11 of Security Agreement)
LIST OF PLEDGED SECURITIES
A. STOCKS: None except the Pledged Stock
(as defined therein) pledged by the Company
pursuant to the Company Pledge Agreement
B. BONDS:
<TABLE>
<CAPTION>
Issuer Number Face Amount Coupon Rate Maturity
- ------ ------ ----------- ----------- --------
<S> <C> <C> <C> <C>
</TABLE>
C. GOVERNMENT SECURITIES:
<TABLE>
<CAPTION>
Issuer Number Type Face Amount Coupon Rate Maturity
- ------ ------ ---- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
None
</TABLE>
<PAGE> 1
JACOR COMMUNICATIONS, INC. PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Pledge Agreement") is executed as
of February ___, 1996 by and between Jacor Communications, Inc. (the "Company")
and Banque Paribas, as agent (the "Agent") for itself, the Co-Agents, the Banks
under the Credit Agreement hereafter referred to, any L/C Providers (as defined
in the Credit Agreement) and any Interest Rate Providers (as defined in the
Credit Agreement).
WHEREAS, the Company entered into that certain Credit
Agreement dated as of the date hereof with the Banks (as defined therein), the
Co-Agents (as defined therein) and Banque Paribas, as agent (the "Agent") for
itself, the Co-Agents and the Banks (as modified, supplemented, amended,
extended, supplemented or restated from time to time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires the Company to enter
into certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Providers;
WHEREAS, the execution and delivery of the Pledge Agreement is
a condition precedent to the availability of credit under the Credit Agreement;
NOW THEREFORE, in order to induce the Agent, the Co-Agents,
the Banks, any L/C Providers and any Interest Rate Providers to enter into the
Credit Agreement, the Citicasters L/C Documents and Rate Hedging Agreements,
respectively, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
W I T N E S S E T H:
<PAGE> 2
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
2. Pledge and Security Interest. In order to secure the full and
complete payment and performance by the Company of the Obligations when due, the
Company hereby pledges and grants to the Agent for the benefit of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers, equally
and ratably in proportion to the total Obligation owing at any time to the
Agent, the Co- Agents, the Banks, any L/C Providers and any Interest Rate
Providers, a continuing lien and security interest in (a) all of the outstanding
shares of capital stock of each Subsidiary currently or hereafter owned by the
Company (the "Pledged Stock"), (b) any securities, dividends or other
distributions and any other right or property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any or all
of the Pledged Stock and any other property substituted or exchanged therefor,
(c) all of the Intercompany Demand Notes described in Schedule I hereto,
including any amendment, modification, renewal or replacement of any such
Intercompany Demand Note, and all of the Intercompany Acquisition Notes as may
be in existence from time to time, including any amendment, modification,
renewal or replacement of any such Intercompany Acquisition Note (such
Intercompany Demand Notes, Intercompany Acquisition Notes and amendments,
modifications, renewals or replacements, the "Pledged Notes"), (d) the
Intercompany Security Agreements described in Schedule II hereto and all
financing statements relating thereto, including any amendment, modification,
renewal or replacement of any such Intercompany Security Agreements and
financing statements (the "Pledged Security Agreements") and (e) any and all
proceeds (including, without limitation, "proceeds" as defined in the Uniform
Commercial Code as in effect from time to time in the State of Illinois) of, and
substitutions and replacements for, the
2
<PAGE> 3
foregoing (all of the property and rights described in the foregoing clauses (a)
through (e) being herein collectively called the "Collateral").
3. Deposit of Pledged Notes and Certificates for Pledged Stock. The
Company shall deliver to the Agent, for the equal and ratable benefit of the
Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers, concurrently with the execution of this Pledge Agreement the
certificates representing the Pledged Stock, endorsed in blank or accompanied by
appropriate instruments of transfer or assignments in blank, and the Pledged
Notes, duly endorsed in blank. The Agent shall not have any duty to assure that
all certificates representing the Pledged Stock or instruments representing the
Pledged Notes have been delivered to it or any obligation whatsoever with
respect to the care, custody or protection of any certificates or instruments
which may be delivered to it except only to exercise the same care in physically
safekeeping such certificates or instruments as it would exercise in the
ordinary course of its own business. Neither the Agent, any Co-Agent, any Bank,
any L/C Provider nor any Interest Rate Provider shall be obligated to preserve
or protect any rights with respect to the Pledged Stock or Pledged Notes or to
receive or give any notice with respect thereto whether or not the Agent, any
Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider is deemed to
have knowledge of such matters.
4. Representations and Warranties. The Company represents and warrants
to the Agent, each Co-Agent, each Bank, each L/C Provider and each Interest Rate
Provider as of the date of each pledge and delivery hereunder that:
(a) Existence and Standing. As of the date hereof, each of the
Company and the Subsidiaries is duly incorporated, validly existing and in good
standing
3
<PAGE> 4
under the laws of its jurisdiction of incorporation and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
(b) Authorization, Validity and Enforceability. The execution
and delivery by the Company of this Pledge Agreement have been duly authorized
by proper corporate proceedings, and this Pledge Agreement constitutes a legal,
valid and binding obligation of the Company and creates a security interest
which is enforceable against the Company in accordance with its terms in respect
of all now owned and hereafter acquired Collateral, except as enforceability may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and general principles of equity. All of the
shares of the Pledged Stock are duly authorized, validly issued, fully paid and
nonassessable.
(c) Transferability; Title Matters. The Collateral is free and
clear of all liens, options, warrants, puts, calls, or other rights of third
persons, and restrictions, other than (i) those liens arising under this Pledge
Agreement, and (ii) restrictions on transferability imposed by applicable state
and Federal securities laws or which may arise as a result of the Company being
subject to the Communications Act of 1934, as amended, and the rules and
regulations of the FCC thereunder. The Company agrees to warrant and defend
title to and ownership of the Pledged Stock and the lien created by this Pledge
Agreement against the claims of all Persons and maintain and preserve such lien
at all times during the term of this Pledge Agreement. Upon the delivery to the
Agent of the Pledged Stock, the Pledged Notes and the Pledged Security
Agreements, the security interests in the Pledged Stock, the Pledged Notes and
the Pledged Security Agreements granted to the Agent hereunder will constitute
perfected security interests therein superior and prior to all Liens other than
Liens permitted by Section 6.17 of the Credit Agreement.
4
<PAGE> 5
(d) Ownership of Pledged Stock; Pledged Notes; Pledged
Security Agreements. The Company is the holder of record and the sole beneficial
owner of 100% of the issued and outstanding voting capital stock of each
Subsidiary (other than any Excluded Subsidiary and any Subsidiary whose capital
stock has been pledged to the Agent pursuant to a Subsidiary Pledge Agreement).
The capital stock of each Subsidiary (other than Excluded Subsidiaries) owned by
the Company on the Closing Date is identified on Schedule III hereto. The
Company has furnished to the Agent the true, genuine executed originals of each
of the Pledged Notes, properly endorsed to the order of the Agent, and original
counterparts of the Pledged Security Agreements, and none of the same has been
amended, modified or altered and each of the foregoing remains in full force and
effect in accordance with its terms. The Pledged Notes and Pledged Security
Agreements are each genuine, legally valid, binding and enforceable obligations
of the maker thereof or debtor or pledgor thereunder and are not in default. The
Collateral is not subject to any credits or offsets not shown by proper
endorsement thereon.
(e) Title and Power to Pledge the Collat- eral. The Company
has good and marketable title to the Collateral and has all requisite rights,
power, and authority to execute, deliver and comply with the terms of this
Pledge Agreement and to pledge and deliver the Collateral to the Agent pursuant
hereto. Except as provided in Section 5.3 of the Credit Agreement, no material
authorization, consent or approval of, and no notice to or filing with, any
person or government agency (other than as specified in Section 7 hereof) is
required in connection with the execution, delivery and performance of this
Pledge Agreement which has not been obtained.
5
<PAGE> 6
5. Covenants. So long as any Obligation remains outstanding, the
Company covenants and agrees with the Agent, the Co-Agents, the Banks, any L/C
Provid- ers and any Interest Rate Providers as follows:
(a) Pledge and Additional Stock. If the Company shall at any
time acquire any additional shares of the capital stock of any class of the
Pledged Stock or any Subsidiary of the Company, whether such acquisition shall
be by purchase, exchange, reclassification, dividend, or otherwise, the Company
shall, to the extent doing so would not violate applicable law, forthwith (and
without the necessity for any request or demand by the Agent, any Co-Agent, any
Bank, any L/C Provider or any Interest Rate Provider) deliver the certificates
representing such shares to the Agent, in the same manner as described in
Section 3 hereof.
(b) Applications, Approvals and Consents. The Company will, at
its expense, promptly execute and deliver, or cause the execution and delivery
of, all applications, certificates, instruments, registration statements, and
all other documents and papers the Agent may reasonably request in connection
with the obtaining of any consent, approval, registration, qualification, or
authorization of the FCC or of any other Person necessary or appropriate for the
effective exercise of any rights under this Pledge Agreement. Without limiting
the generality of the foregoing, the Company agrees that in the event the Agent
on behalf of the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers shall exercise its right to sell, transfer, or otherwise
dispose of or take any other action in connection with any of the Collateral
pursuant to this Pledge Agreement, the Company shall execute and deliver all
applications, certificates, and other documents the Agent may reasonably request
and shall otherwise promptly, fully, and diligently cooperate with the Agent and
any other necessary Persons, in making any application for
6
<PAGE> 7
the prior consent or approval of the FCC or any other Person to the exercise by
the Agent, the Co-Agents, the Banks, any L/C Providers or any Interest Rate
Providers of any of such rights relating to all or any part of the Collateral.
Furthermore, because the Company agrees that the Agent's, the Co-Agents', the
Banks', any L/C Provider's and any Interest Rate Provider's remedy at law for
failure of the Company to comply with the provisions of this Section 5(b) would
be inadequate and that such failure would not be adequately compensable in
damages, the Company agrees that the covenants of this Section 5(b) may be
specifically enforced.
(c) Security Interest and Lien. Except as otherwise permitted
by the terms of the Credit Agreement, the Company will preserve, warrant, and
defend the lien created hereby in the Collateral against the claims of all
Persons whomsoever; will not at any time sell, assign, transfer, or otherwise
dispose of its right, title and interest in and to any of the Collateral except
as permitted under the Credit Agreement; will not at any time, directly or
indirectly, create, assume, or suffer to exist any lien, warrant, put, option,
or other rights of third Persons and restrictions, other than the liens created
by this Pledge Agreement, in and to the Collateral or any part thereof; and will
not do or suffer any matter or thing whereby the lien created by this Pledge
Agreement in and to the Collateral might or could be impaired.
(d) Further Assurances. The Company, at its expense, shall
from time to time execute and deliver to the Agent all such other assignments,
certificates, supplemental documents, and financing statements, and shall do all
other acts or things as the Agent may reasonably request in order to more fully
create, evidence, perfect, continue, and preserve the priority of the lien
herein created or to otherwise obtain the full benefits of this Pledge
Agreement.
7
<PAGE> 8
(e) Amendment and Termination. The Company will not and will
not permit the Subsidiaries to amend or terminate the Intercompany Security
Agreement (as defined in the Credit Agreement) (except upon the prior written
consent of the Agent and the Banks in accordance with Section 8.2 of the Credit
Agreement).
(f) Additional Undertakings. The Company:
(i) will not, without the prior written consent of
the Agent, enter into any agreement amending, supplementing or waiving
any provision of any Pledged Note (including any underlying instrument
pursuant to which such Pledged Note is issued) or compromising or
releasing or extending the time for payment of any obligation of the
maker thereof; and
(ii) will refrain from taking any actions under the
Intercompany Security Agreement, including, without limitation, actions
to foreclose upon any Collateral (as defined in the Intercompany
Security Agreement) and actions with respect to the release or
substitution of any Collateral (as defined in the Intercompany Security
Agreement). The Company acknowledges that all of its rights under the
Intercompany Security Agreement, including, without limitation, all
rights to make decisions regarding the exercise of such rights and
8
<PAGE> 9
the taking or refraining from taking of any actions, have been
assigned to the Agent pursuant to this Pledge Agreement, and
the Company agrees that, until payment in full of the
Obligations, and the irrevocable termination of the
Commitments and the termination of the Credit Agreement, all
such rights shall be exercisable only by the Agent. The
Company hereby (x) agrees that all such decisions shall be
conclusive and binding on it and (y) waives any and all claims
against the Agent, each Co-Agent and each Bank in respect of
any such decision, exercise, action or inaction.
6. Rights of Company, Agent, Co-Agents, the Banks,
the L/C Providers and Interest Rate Providers.
(a) Exercise of Stockholder Rights.
(i) Subject to the provisions of Section 7 hereof,
unless and until a Default shall occur and be continuing or a
default under any of the Citicasters L/C Documents shall occur
and be continuing, the Company shall be entitled to receive
all cash dividends or other distributions on the Pledged Stock
(if and to the extent such dividends or distributions are
permitted by the terms of the Credit Agreement) except (A)
distributions made in capital stock on the Pledged Stock
resulting from
9
<PAGE> 10
stock dividends on or subdivision, combination, or reclassification of
the outstanding capital stock of any corporation or as a result of any
merger, consolidation, acquisition or other exchange of assets of any
corporation; and (B) all sums paid on any Pledged Stock upon
liquidation or dissolution or reduction of capital, repurchase,
retirement, or redemption. All such sums, dividends, distributions,
proceeds, or property described in the immediately preceding clauses
(A) and (B) shall, if received by any Person other than the Agent, be
held in trust for the benefit of the Agent, the Co-Agents, the Banks,
any L/C Providers and any Interest Rate Providers and shall forthwith
be delivered to the Agent for the benefit of the Agent, the Co-Agents,
the Banks, any L/C Providers and any Interest Rate Providers
(accompanied by proper instruments or assignment and/or stock and/or
bond powers executed by the Company in accordance with the Agent's
instructions) to be held subject to the terms of this Pledge Agreement.
Upon the occurrence of a Default or a default under any of the
Citicasters L/C Documents, the Agent, for the benefit of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers, shall be entitled
10
<PAGE> 11
to receive all payments of whatever kind made upon or with respect to
any Collateral. The relative rights of the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers to receive
such payments shall be in proportion to the relative amounts of all
Obligations owing to the Agent, any Co-Agent, any Bank, any L/C
Providers and any Interest Rate Providers and the aggregate amount of
all Obligations then outstanding.
(ii) Unless a Default has occurred and is continuing or unless
a default under the Citicasters L/C Documents has occurred and is
continuing, the Company shall have the sole and exclusive right to vote
and give consents with respect to all the Collateral and to consent to,
ratify, or waive notice of any and all meetings. Subject to Section 6
hereof, and subject to compliance with applicable law, (i) upon the
occurrence and during the continuance of a Default, the Agent, on
behalf of the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers, shall have the right, or (ii) upon the
occurrence and during the continuance of a default under any Citicaster
L/C Document, the Agent, on behalf of
11
<PAGE> 12
the Agent and the L/C Providers, shall, subject to the provisions of
any intercreditor agreements in effect from time to time, (A) to
consent in advance to any vote proposed to be cast by the Company with
respect to any merger, consolidation, liquidation or reorganization of
any Subsidiary (but in no event with respect to any election of
directors) and, in connection therewith, to join in and become a party
to any plan of recapitalization, reorganization, or readjustment
(whether voluntary or involuntary) as shall seem desirable to the
Agent, on behalf of the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest Rate Providers, or the Agent, on behalf of
the Agent and any L/C Providers, as the case may be, to protect or
further their interests in respect of the Collateral, (B) to deposit
the Collateral under any such plan, and (C) to make any exchange,
substitution, cancellation, or surrender of the Collateral required by
any such plan and to take such action with respect to the Collateral as
may be required by any such plan or for the accomplishment thereof; and
no such disposition, exchange, substitution, cancellation, or surrender
shall be deemed to constitute a release of the Collateral from the lien
of this Pledge Agreement.
12
<PAGE> 13
(b) Upon the occurrence and during the continuance of a
Default or a default under any of the Citicasters L/C Documents,
subject to compliance with applicable law, and in the case of a default
under any of the Citicasters L/C Documents, subject to the provisions
of any intercreditor agreement in effect from time to time, the Agent,
on behalf of the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers, may, subject to Section 7 hereof, sell,
without recourse to judicial proceedings, with the right to bid for and
buy, the Collateral or any part thereof, upon ten days' notice (which
notice is agreed to be reasonable notice for the purposes hereof) to
the Company of the time and place of sale, for cash, upon credit or for
future delivery, at the Banks' option and in the Banks' complete
discretion in the case of a Default, or at the L/C Providers' option
and in the L/C Providers' complete discretion in the case of a default
under any of the Citicasters L/C Documents:
(i) At public sale, including a sale at any broker's
board or exchange;
(ii) At private sale in any commercially reasonable
manner which will not require the Collateral, or any part
thereof, to be registered in accordance with the Securities
Act of 1933, as amended, or the rules and regulations
promulgated thereunder, or any other law or regulation. The
Agent, the Co-Agents, the Banks and the L/C Providers are also
hereby authorized, but not obligated, to take such actions,
give such notices, obtain such consents, and do such other
things as they may deem required or ap-
13
<PAGE> 14
propriate in the event of sale or disposition of any of the
Collateral, and the Company agrees that neither the Agent, any
Co-Agent, any Bank, any L/C Provider nor any Interest Rate
Provider shall be liable or accountable to the Company for any
discount allowed by reason of the fact that such Collateral is
sold in compliance with any applicable limitation or
restriction of any governmental regulatory authority or
official. The Company understands that the Agent, on behalf of
the Banks, any L/C Providers and any Interest Rate Providers,
may in its discretion approach a restricted number of
potential purchasers and that a sale under such circumstances
may yield a lower price for the Collateral, or any portion
thereof, than would otherwise be obtainable if the same were
registered and sold in the open market. The Company agrees
that in the event the Agent shall so sell the Collateral, or
any portion thereof, at such private sale or sales, the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest
Rate Providers shall have the right to rely upon the advice
and opinion of any Person who regularly deals in or evaluates
stock of the type constituting the Collateral as to the price
obtainable in a commercially reasonable
14
<PAGE> 15
manner upon such a private sale thereof.
In the case of any sale by the Agent on behalf of the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers of
the Collateral on credit or for future delivery, the Collateral sold may be
retained by the Agent until the selling price is paid by the purchaser, but
neither the Agent, any Co-Agent, any Bank, any L/C Providers nor any Interest
Rate Provider shall incur liability in case of failure of the purchaser to take
up and pay for the Collateral so sold.
In connection with the sale of any of the Collateral, the
Agent, the Co-Agents, the L/C Providers and the Banks are authorized, but not
obligated, to limit prospective purchasers to the extent deemed necessary or
desirable by the Agent, the Co-Agents, the L/C Providers and the Banks to render
such sale exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws. In the event that,
in the opinion of the Agent, the Co-Agents, the L/C Providers and the Banks, it
is necessary or advisable to have such securities registered under the
provisions of such Act, or any similar law relating to the registration of
securities, the Company agrees, at its own expense, to (i) execute and deliver
all such instruments and documents, and to do or cause to be done such other
acts and things, as may be necessary or, in the opinion of the Agent, advisable
to register such securities under the provisions of such Act or any applicable
similar law relating to the registration of securities, and the Company will use
its best efforts to cause the registration statement relating thereto to become
effective and to remain effective for such period as the Agent shall reasonably
request, and to make all amendments thereof and/or to the related prospectus
which, in the opinion of the Agent, are necessary or desirable, all in
conformity with the requirements of
15
<PAGE> 16
such Act and the rules and regulations of the Securities and Exchange Commission
applicable thereto; (ii) use its best efforts to qualify such securities under
state "blue sky" or securities laws, all as reasonably requested by the Agent;
(iii) at the request of the Agent, indemnify and hold harmless the Banks, the
Agent, the Co-Agents, any L/C Providers, any Interest Rate Providers, any
underwriters, and employees, officers, agents, attorneys, and accountants
(collectively, the "Indemnified Parties") from and against any loss, liability,
claim, damage, and expense (including, without limitation, reasonable fees of
counsel incurred in connection therewith) under such Act or otherwise, insofar
as such loss, liability, claim, damage, or expense arises out of or is based
upon any untrue statement or alleged untrue statement of any material fact
furnished by the Company contained in any registration statement under which
such securities were registered under such Act or other securities laws, any
preliminary prospectus or final prospectus contained therein, or arise out of or
are based upon any omission or alleged omission by the Company to state therein
a material fact required to be stated or necessary to make the statements
therein not misleading, such indemnification to remain operative regardless of
any investigation made by or on behalf of any Indemnified Party; provided,
however, that the Company shall not be liable in any case to the extent that any
such loss, liability, claim, damage, or expense arises out of or is based upon
an untrue statement or alleged untrue statement or an omission or an alleged
omission made in reliance upon and in conformity with written information
furnished to the Company by an Indemnified Party specifically for use in such
registration statement or preliminary or final prospectus; (iv) cause each such
issuer to make available to its security holders, as soon as practicable, an
earnings statement that will satisfy the provisions of Section 11(a) of such
Act; and (v) do or cause to be done all such other acts and things as may be
necessary to
16
<PAGE> 17
make such sale of the Collateral or any part thereof valid and binding and in
compliance with applicable law.
(c) Other Rights after a Default. Sub- ject to Section 7 hereof, (i)
upon the occurrence and during the continuance of a Default, the Agent, on
behalf of the Agent, the Co-Agents, the Banks and any Interest Rate Providers,
may and (ii) upon the occurrence and during the continuance of a default under
any Citicasters L/C Documents, the Agent, on behalf of the Agent and the L/C
Providers may, subject to the provisions of any intercreditor agreement in
effect from time to time, exercise any and all rights available to secured
parties under the Uniform Commercial Code as enacted in the State of Illinois or
other applicable jurisdiction, as amended, in addition to any and all other
rights afforded at law, in equity, or otherwise.
(d) Application of Proceeds. The Agent shall apply the proceeds of the
Collateral, including the proceeds of any sales or other disposition of the
Collateral, or any part thereof, under this Section 6, in the following order
unless a court of competent jurisdiction shall otherwise direct:
(i) FIRST, to payment of all reasonable costs and expenses of
the Agent incurred in connection with the collection and enforcement of
the Obligations or of the security interest granted pursuant to this
Pledge Agreement;
(ii) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other
than principal), pro rata amongst each Bank, the Agent, each Co-Agent
and each L/C Provider in accordance
17
<PAGE> 18
with the proportion which the accrued interest, fees and other amounts
(other than principal) constituting Obligations owing to each such
Bank, Agent, Co-Agent and L/C Provider bears to the aggregate amount of
accrued interest, fees and other amounts (other than principal)
constituting Obligations owing to all of the Banks, the Agent, the
Co-Agents and L/C Providers;
(iii) THIRD, to payment of the principal of the Obligations
owing to the Banks, any Bank, any L/C Providers or any Interest Rate
Providers, pro rata amongst the Banks, any L/C Providers and any
Interest Rate Providers in accordance with the proportion that the
principal of the Obligations owing to each such Bank, such L/C Provider
or Interest Rate Provider bears to the aggregate amount of principal of
the Obligations owing to all of the Banks, any L/C Providers and any
Interest Rate Providers; and
(iv) FOURTH, the balance, if any, after all of the Obligations
have been satisfied, shall be remitted to the Company.
(e) Governance. All rights and remedies available to the
Agent, the Co-Agents, the Banks, the Interest Rate Providers and the
L/C Providers with respect to the grant, foreclosure and enforcement of
the security interest and lien granted hereby and with respect to any
action permitted hereunder may be exercised
18
<PAGE> 19
solely by the Agent acting with the written concurrence of the Required
Banks.
7. Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary, this
Pledge Agreement, the other Loan Documents, the Citicasters L/C
Documents and the transactions contemplated hereby and thereby (i) do
not and will not constitute, create, or have the effect of constituting
or creating, directly or indirectly, actual or practical ownership of
any Subsidiary by the Agent, the Co-Agents, the Banks, any L/C
Providers or any Interest Rate Providers, or control, affirmative or
negative, direct or indirect, by the Agent, the Co-Agents, the Banks,
any L/C Providers or any Interest Rate Providers over the management or
any other aspect of the operation of any Subsidiary, which ownership
and control remain exclusively and at all times in such Subsidiary and
the Company, and (ii) do not and will not constitute the transfer,
assignment, or disposition in any manner, voluntarily or involuntarily,
directly or indirectly, of any license at any time issued by the FCC to
any Subsidiary ("License"), or the transfer of control of any such
Subsidiary within the meaning of Section 310 of the Communications Act
of 1934, as amended.
(b) Notwithstanding any other provision of this Pledge
Agreement, any foreclosure on, sale, transfer or other disposition of,
or the exercise of any right to vote or consent with respect to, any of
the Collateral as provided herein or any other action taken or proposed
to be taken by the Agent, the Co-Agents, the Banks, the L/C Providers
and Interest Rate Providers hereunder which would affect the
operational, voting, or other control of any Subsidiary, shall be
pursuant to Section 310 of the Communications Act of 1934, as amended,
to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the
19
<PAGE> 20
extent required thereby, subject to the prior approval of the FCC.
(c) Subject to Section 7(e) hereof, if a Default shall have
occurred and be continuing or a default under the Citicasters L/C
Documents shall have occurred and be continuing, the Company shall take
any action which the Agent, on behalf of the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers, may
reasonably request in order to transfer and assign to the Agent, or to
such one or more third parties as the Agent may designate, or to a
combination of the foregoing, each License. To enforce the provisions
of this Section 7, the Agent is empowered to request the appointment of
a receiver from any court of competent jurisdiction. Such receiver
shall be instructed to seek from the FCC an involuntary transfer of
control of each such License for the purpose of seeking a bona fide
purchaser to whom control will ultimately be transferred. The Company
hereby agrees to authorize such an involuntary transfer of control upon
the request of the receiver so appointed and, if the Company shall
refuse to authorize the transfer, the Company's approval may be
required by the court. Upon the occurrence and continuance of a Default
or a default under any of the Citicasters L/C Documents, the Company
shall further use its best efforts to assist in obtaining approval of
the FCC, if required, for any action or transactions contemplated by
this Pledge Agreement including, without limitation, the preparation,
execution and filing with the FCC of the assignor's or transferor's
portion of any application or applications for consent to the
assignment of any License or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of the
transfer or assignment of any portion of the Collateral, together with
any License.
(d) The Company acknowledges that the assignment or transfer
of each License is integral to the
20
<PAGE> 21
Agent's, the Co-Agents', the Banks', any L/C Provider's and any Interest Rate
Provider's realization of the value of the Collateral, that there is no adequate
remedy at law for failure by the Company to comply with the provisions of this
Section 7 and that such failure would not be adequately compensable in damages,
and therefore agrees that the agreements contained in this Section 7 may be
specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Pledge Agreement or in any other Loan Document, neither the Agent, any Co-Agent,
any Bank, any L/C Provider nor shall any Interest Rate Provider shall, without
first obtaining the approval of the FCC, take any action pursuant to this Pledge
Agreement which would constitute or result in any assignment of a License or any
change of control of any License or any Subsidiary if such assignment or change
in control would require, under then existing law (including the written rules
and regulations promulgated by the FCC), the prior approval of the FCC.
8. Miscellaneous.
(a) Term. This Pledge Agreement and the lien arising hereunder
(i) shall become effective as of the date hereof upon the execution hereof, and
(ii) shall continue in force until no Obligations to the Agent, the Co-Agents,
the Banks, any L/C Providers or any Interest Rate Providers shall be outstanding
and the Commitments shall have been terminated. If no Obligations remain
outstanding and the Commitments have been terminated, the Agent, at the request
and sole expense of the Company, shall execute and deliver such documents and
instruments as may be necessary to evidence such termination and release.
(b) Releases; Partial Releases. Any cash dividends received by
the Company in accordance with the
21
<PAGE> 22
terms of Section 6(a)(i) hereof, and all distributions received by the Company
upon the merger or liquidation of the Subsidiaries with or into the Company in
accordance with Section 6.12 of the Credit Agreement, shall be deemed released
from the lien of this Pledge Agreement and shall be held by the Company (or any
transferee of the Company) free and clear of the lien created by this Pledge
Agreement, provided, however, that all distributions so received by the Company
upon any such merger or liquidation of the Subsidiaries shall become and remain
subject to the lien created by the Company Security Agreement upon the terms set
forth therein. Upon termination of this Pledge Agreement in accordance with the
provisions of Section 8(a) hereof, the Agent, the CoAgents, the Banks, any L/C
Providers and any Interest Rate Providers shall, at the Company's request and
expense and subject to the foregoing sentence, execute such release as the
Company may reasonably request, in form and upon terms acceptable to the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers in
all respects, and shall, without any representations, warranties or recourse of
any kind whatsoever (other than the representation and warranty that such
property is free and clear of Liens created by the Agent, the Co-Agents, the
Banks, any L/C Providers or any Interest Rate Providers), deliver all
certificates representing the Pledged Stock and other property held in respect
thereof hereunder which is in the Agent's possession, together with all stock
powers or other instruments of transfer reasonably required to effect delivery
to the Company.
(c) Waivers. Except to the extent ex- pressly otherwise
provided herein or in any Loan Document, the Company waives, to the extent
permitted by applicable law, (i) any right to require either the Agent, any
Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider to proceed
against any other person, to exhaust their rights in any other collateral,
22
<PAGE> 23
or to pursue any other right which either the Agent, any Co-Agent, any Bank, any
L/C Provider or any Interest Rate Provider may have, (ii) with respect to the
Obligations, presentment and demand for payment, protest, notice of protest and
non-payment, and notice of the intention to accelerate, and (iii) all rights of
marshalling in respect of any and all of the Collateral.
(d) Financing Statement. The Agent, on behalf of the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers,
shall be entitled at any time to file this Pledge Agreement or a carbon,
photographic, or other reproduction of this Pledge Agreement, as a financing
statement, but the failure of the Agent to do so shall not impair the validity
or enforceability of this Pledge Agreement.
(e) Amendments. This Pledge Agreement may be amended only by
an instrument in writing executed jointly by the Company and the Agent, with the
consent of the Required Banks and supplemented only by documents delivered or to
be delivered in accordance with the express terms hereof, provided, however,
that any release of all or any substantial portion of the Collateral from the
lien created hereby shall be effective only if approved in accordance with
Section 8.2 of the Credit Agreement.
(f) GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND NOT
THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
(g) Parties Bound; Assignment. This Pledge Agreement shall be
binding on the Company and its successors and assigns and shall inure to the
benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers and their respective successors and assigns.
23
<PAGE> 24
(h) Notices. Any notice required or per- mitted to be given
under this Pledge Agreement shall be in writing and may be, and shall be deemed,
given, if mailed, three days after the date when deposited in the United States
mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by personal delivery
or by telecopy, when received, addressed to the Company (with copies to Sheli J.
Rosenberg, Esq., Rosenberg & Liebentritt, Two North Riverside Plaza, Suite 600,
Chicago, Illinois 60606, provided, however, that the failure to provide any such
copy shall not affect the validity or sufficiency of any such notice), to the
Agent at the address indicated below its signature hereto, to the Co-Agents and
the Banks at the addresses indicated below their respective signatures to the
Credit Agreement, to any L/C Providers at the addresses provided to the Company
and the Agent in writing by such L/C Providers and to any Interest Rate
Providers at the addresses provided to the Company and the Agent in writing by
such Interest Rate Providers. Each of the Company, the Agent, the Banks, any L/C
Providers and any Interest Rate Providers may change the address for service of
notice upon it by a notice in writing to the other parties hereto.
(i) Counterparts. This Pledge Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Pledge Agreement by
signing any such counterpart. This Pledge Agreement shall be effective when it
has been executed by the Company and the Agent.
(j) Loan Document. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
24
<PAGE> 25
(k) Section Captions. Section captions used in this Pledge
Agreement are for convenience of reference only and shall not affect the
construction of this Pledge Agreement.
(l) Severability. Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.
9. The Agent. Banque Paribas has been appointed Agent of the Co-Agents,
the Banks, any L/C Provider and any Interest Rate Providers hereunder pursuant
to Article X of the Credit Agreement, and the Agent has agreed to act (and any
successor Agent shall act) as such hereunder only on the express conditions
contained in such Article X. Any successor Agent appointed pursuant to Article X
of the Credit Agreement shall be entitled to all the rights, interests and
benefits of the Agent hereunder.
25
<PAGE> 26
IN WITNESS WHEREOF, the undersigned have executed this Pledge
Agreement as of the date first above written.
JACOR COMMUNICATIONS, INC.
By:________________________________
Title:_____________________________
By:________________________________
Title:_____________________________
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
BANQUE PARIBAS,
as Agent
By:________________________________
Title:_____________________________
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
26
<PAGE> 27
SCHEDULE "I"
(See Section 2 of Pledge Agreement)
LIST OF INTERCOMPANY DEMAND NOTES
I. Second Consolidated Amended and Restated Intercompa-
ny Demand Notes dated February 20, 1996 and payable
to the order of Jacor Communications, Inc. from:
a) Jacor Broadcasting of Atlanta, Inc.;
b) Jacor Broadcasting of Colorado, Inc.;
c) Jacor Broadcasting of Florida, Inc.;
d) Jacor Broadcasting of Knoxville, Inc.;
e) Jacor Broadcasting of Tampa Bay, Inc.; and
f) Jacor Broadcasting Corporation.
II. Consolidated Amended and Restated Intercompany
Demand Note dated February 20, 1996 and payable to
the order of Jacor Communications, Inc. from:
a) Georgia Network Equipment, Inc.;
b) Broadcast Finance, Inc.; and
c) Chesapeake Securities, Inc.
III. Intercompany Demand Note dated as of February 20,
1996 and payable to the order of Jacor Communica-
tions, Inc. from:
a) Jacor Broadcasting of St. Louis, Inc.; and
b) OIA Broadcasting L.L.C.
27
<PAGE> 28
SCHEDULE "II"
(See Section 2 of Pledge Agreement)
LIST OF INTERCOMPANY SECURITY AGREEMENTS
Second Amended and Restated Intercompany Security Agreement executed by each of
the following parties:
1. Jacor Communications, Inc.;
2. Jacor Broadcasting of Atlanta, Inc.;
3. Jacor Broadcasting of Colorado, Inc.;
4. Jacor Broadcasting of Florida, Inc.;
5. Jacor Broadcasting of Knoxville, Inc.;
6. Jacor Broadcasting of Tampa Bay, Inc.;
7. Jacor Cable, Inc.;
8. Jacor Broadcasting Corporation; and
9. Georgia Network Equipment, Inc.
10. Broadcast Finance, Inc.
11. Chesapeake Securities, Inc.
12. OIA Broadcasting L.L.C.
28
<PAGE> 29
SCHEDULE "III"
(See Section 3.11 of Security Agreement)
LIST OF PLEDGED SECURITIES
A. STOCKS:
<TABLE>
<CAPTION>
Certificate Number
Issuer Number of Shares
- ------ ----------- ---------
<S> <C> <C>
Jacor Broadcasting of Florida, Inc. 1 500
Jacor Broadcasting of Atlanta, Inc. 2 500
Jacor Broadcasting of Knoxville, Inc. 1 100
Jacor Broadcasting of Colorado, Inc. 3 100
Jacor Broadcasting of Tampa Bay, Inc. 2 100
Jacor Broadcasting of St. Louis, Inc. 1 100
Jacor Cable, Inc. 1 100
Jacor Broadcasting Corporation 1 100
Broadcast Finance, Inc. 1 100
Chesapeake Securities, Inc. 1 100
Georgia Network Equipment, Inc. [ ] 500
OIA Broadcasting L.L.C. N/A N/A
</TABLE>
29
<PAGE> 1
JACOR COMMUNICATIONS, INC.
TRADEMARK SECURITY AGREEMENT
This Trademark Security Agreement (herein "Agreement"), dated
as of February __, 1996, is made by JACOR COMMUNICATIONS, INC., an Ohio
corporation (the "Company"), located at 1300 PNC Center, 201 East Fifth Street,
Cincinnati, Ohio 45202, in favor of BANQUE PARIBAS, located at 227 West Monroe
Street, Chicago, Illinois 60606, as Agent, for the benefit of itself, the
Banks (as defined below), the Co-Agents (as defined below), any L/C Providers
(as defined in the Credit Agreement) and any Interest Rate Providers (as
defined in the Credit Agreement) (in such capacity, together with its
successors and assigns, the "Agent").
RECITALS
WHEREAS, the Company has entered into that certain Credit
Agreement dated as of the date hereof with the Agent, the banks party thereto
from time to time (the "Banks") and the Co-Agents (as defined therein) (as the
same may be amended, modified, supplemented, replaced or restated from time to
time, the "Credit Agreement"); and
WHEREAS, as a condition to the Agent, the Banks, the
Co-Agents, any L/C Providers and any Interest Rate Providers entering into the
Credit Agreement, the Citicasters L/C Documents and Rate Hedging Agreements,
respectively, the Company is required to enter into this Agreement and to grant
to Agent, for the benefit of itself, the Banks, the Co-Agents, the L/C
Providers and the Interest Rate Providers, a security interest in the
Trademarks (as hereinafter defined), all under the terms and conditions set
forth in this Agreement.
<PAGE> 2
AGREEMENT
NOW, THEREFORE, in order to induce Agent, the Banks and the
Co-Agents to enter into the Credit Agreement, and for other good and valuable
consideration, the receipt and adequacy of which hereby is acknowledged, the
parties hereby agree as follows:
1. Definitions. This Agreement is the "Company Trademark
Agreement" referred to in the Credit Agreement. Terms defined in the Credit
Agreement and not otherwise defined in this Agreement shall have the meanings
defined for those terms in the Credit Agreement. The following term shall have
the following meaning:
"Trademarks" means, collectively, all right, title and
interest of the Company in and to its now owned and hereafter acquired
trademarks, service marks, trade names, business identifiers, logos and any and
all registrations and applications for any of the foregoing, including, but not
limited to, those indicated on Schedule I hereto, incorporated herein by this
reference, together with the goodwill of the businesses symbolized by each of
the foregoing.
2. Grant of Security Interest in Trademarks. To secure the
full and complete payment and performance by the Company of the Obligations
when due, the Company hereby grants, mortgages and pledges to the Agent, for
the benefit of the Agent, the Banks, the Co-Agents, any L/C Providers and any
Interest Rate Providers equally and ratably in proportion to the total Obliga-
tions owing at such time to any of them, a security interest in all of the
Company's right, title and interest in and to the Trademarks. The security
interest granted hereby is a present right and is not subject to any condition
precedent to attachment. The Company agrees that it will not grant any license
in respect of any of the Trademarks
2
<PAGE> 3
without the prior written consent of Agent, except licenses entered into in the
ordinary course of business and consistent with past practices. Nothing herein
contained shall impose any liability on Agent for any acts or omissions of the
Company in connection with any license or license agreement presently in effect
or hereafter entered into by the Company licensing the use of the Trademarks.
3. Representations and Warranties. The Company represents
and warrants to the Agent, for the benefit of itself, the Banks, the Co-Agents,
any L/C Providers and any Interest Rate Providers, that (a) the Trademarks
listed on Schedule I include all of the material United States registered
Trademarks now owned or held by the Company; (b) no Subsidiary of Borrower owns
any material United States registered Trademarks except as listed on Schedule I
to the Subsidiary Trademark Agreement; (c) the items identified in Schedule I
hereto are in good standing and have not been adjudged invalid or
unenforceable, in whole or in part, and each Trademark is valid and enforceable
in the jurisdictions and in the manner in which they are currently used; (d) to
the best of the Company's knowledge, no claim has been made that the use by the
Company of any Trademark violates the rights of any third person; and (e) the
Company is the legal and beneficial owner of the Trademarks, free and clear of
all Liens (other than the Liens created by the Collateral Documents or
permitted by Section 6.17 of the Credit Agreement), and all registrations for
the Trademarks listed on Schedule I hereto are standing in the name of the
Company.
4. New Trademarks. If the Company shall obtain rights to any
new Trademarks, the provisions of Section 2 above shall automatically apply
thereto, and if the Company or any Subsidiary adopts or acquires any new
material United States registered Trademark, it shall promptly give to Agent
written notice thereof.
3
<PAGE> 4
The Company hereby authorizes Agent to modify this Agreement unilaterally (i)
by amending Schedule I to include any new United States registered Trademarks
acquired by the Company and (ii) by filing in such governmental office as Agent
may deem necessary or desirable, in addition to and not in substitution for
this Agreement, a supplemental trademark security agreement or a duplicate
original of this Agreement containing, on Schedule I thereto, such new
Trademarks and to supplement or replace any UCC filings or recordation in the
United States Patent and Trademark Office or any other filing or recordation
made to perfect the security interest granted hereunder. If Agent is unable to
unilaterally accomplish (i) or (ii) above, the Company agrees to execute and
deliver all documents and instruments reasonably requested by Agent to
accomplish the foregoing. If any Subsidiary of the Company (other than a
Subsidiary then party to a Subsidiary Trademark Agreement) shall obtain rights
to any Trademark, it shall promptly cause each such Subsidiary to execute and
deliver to the Agent, on behalf of itself, the Banks, the Co-Agents, any L/C
Provider and any Interest Rate Provider, a Subsidiary Trademark Agreement.
5. License. The Company hereby grants to the Agent a
nonexclusive license, exercisable after the occurrence and during the
continuance of a Default or exercisable after the occurrence and during the
continuance of a default under any of the Citicasters L/C Documents, to use the
Trademarks in connection with the Agent's exercise of its rights and remedies
under Section 6 or pursuant to any other Loan Document. The Agent's use of the
Trademarks pursuant to this Section 5 shall be coextensive with the Company's
rights thereunder and with respect thereto and without any liability for
royalties or other related charges from Agent to the Company. In operating
under such license, the Agent agrees that the goods and services offered under
the Trademarks shall be of a quality substantially consistent with those
theretofore offered by the Company under such Trademarks. The
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<PAGE> 5
Company shall have the right to inspect, upon reasonable intervals and with
reasonable notice, the business conducted by or on behalf of Agent under this
license for purposes of monitoring compliance with the aforesaid quality
standard.
6. Default Remedies. Upon the occurrence and during the
continuance of a Default or a default under any of the Citicasters L/C
Documents, the Agent shall have, in addition to all rights and remedies
provided for by law or in equity, all rights and remedies of a secured party
under the Uniform Commercial Code as in effect in any jurisdiction where
enforcement hereof is sought, and all rights and remedies provided in any other
Loan Document or Citicasters L/C Documents, as the case may be, which rights
and remedies are incorporated herein as though set forth in full.
7. Incorporation by Reference of Certain Provisions. This
Agreement is delivered pursuant to the Credit Agreement and shall be
interpreted consistently therewith. Any provision in the Credit Agreement or
in any other Loan Document that is of general applicability to the Loan
Documents shall be and hereby is incorporated by reference in this Agreement as
though set forth in full.
8. Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary,
this Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby (i) do not and will not constitute, create, or have the
effect of constituting or creating, directly or indirectly, actual or practical
ownership of the Company by the Agent, the Co-Agents, the L/C Providers, the
Interest Rate Providers or the Banks, or control, affirmative or negative,
direct or indirect, by the Agent, the Co-Agents, the Banks, the L/C Providers
or the Interest Rate
5
<PAGE> 6
Providers over the management or any other aspect of the operation of the
Company, which ownership and control remains exclusively and at all times in
the Company, and (ii) except for the grant of a security interest hereunder to
the extent permitted by law, do not and will not constitute the transfer,
assignment, or disposition in any manner, voluntarily or involuntarily,
directly or indirectly, of any license at any time issued by the FCC to the
Company ("License"), or the transfer of control of the Company within the
meaning of Section 310 of the Communications Act of 1934, as amended.
(b) Notwithstanding any other provision of this
Agreement, any foreclosure on, sale, transfer or other disposition of, or the
exercise of any right to vote or consent with respect to, any of the Collateral
as provided herein or any other action taken or proposed to be taken by the
Agent, the Co-Agents, the L/C Providers, the Interest Rate Providers and the
Banks hereunder which would affect the operational, voting, or other control of
the Company, shall be pursuant to Section 310 of the Communications Act of
1934, as amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
(c) Subject to Section 8(e), if a Default shall have
occurred and be continuing or a default under any of the Citicasters L/C
Documents shall have occurred and be continuing, the Company shall take any
action which the Agent, on behalf of the Agent, the Co-Agents, the L/C
Providers, the Interest Rate Providers and the Banks, may reasonably request in
order to transfer and assign to the Agent, or to such one or more third parties
as the Agent may designate, or to a combination of the foregoing, each License.
To enforce the provisions of this Section 8 the Agent is empowered to request
the appointment of a receiver from any court of competent jurisdiction. Such
receiver shall be instructed to seek
6
<PAGE> 7
from the FCC an involuntary transfer of control of each such License for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. The Company hereby agrees to authorize such an involuntary
transfer of control upon the request of the receiver so appointed and, if the
Company shall refuse to authorize the transfer, its approval may be required by
the court. Upon the occurrence and continuance of a Default or the occurrence
and continuance of a default under any of the Citicasters L/C Documents, the
Company shall further use its best efforts to assist in obtaining approval of
the FCC, if required, for any action or transactions contemplated by this
Agreement including, without limitation, the preparation, execution and filing
with the FCC of the assignor's or transferor's portion of any application or
applications for consent to the assignment of any License or transfer of
control necessary or appropriate under the FCC's rules and regulations for
approval of the transfer or assignment of any portion of the Trademarks,
together with any License.
(d) The Company acknowledges that the assignment or
transfer of each License is integral to the Agent's, the Co-Agents', the L/C
Provider's, the Interest Rate Provider's and the Banks' realization of the
value of the Trademarks, that there is no adequate remedy at law for failure by
the Company to comply with the provisions of this Section 8 and that such
failure would not be adequately compensable in damages, and therefore agrees
that the agreements contained in this Section 8 may be specifically enforced.
(e) Notwithstanding anything to the contrary
contained in this Agreement or in any other Loan Document, neither the Agent,
any Co-Agent, any L/C Provider, any Interest Rate Provider nor any Bank shall,
without first obtaining the approval of the FCC, take any action pursuant to
this Agreement which would constitute or result in any assignment of a License
or any change of
7
<PAGE> 8
control of any License or the Company if such assignment or change in control
would require, under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC.
9. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND THE AGENT
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE COMPANY AND THE AGENT
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENT, THE CO-AGENTS, THE BANKS, ANY L/C PROVIDERS AND ANY INTEREST RATE
PROVIDERS TO ENTER INTO THE CREDIT AGREEMENT, THE CITICASTERS L/C DOCUMENTS AND
RATE HEDGING AGREEMENTS, RESPECTIVELY.
8
<PAGE> 9
IN WITNESS WHEREOF, the Company has caused its duly authorized
officers to execute and deliver this Agreement as of the day and year first
written above.
JACOR COMMUNICATIONS, INC.,
an Ohio corporation
By:___________________________
Its:_______________________
By:___________________________
Its:_______________________
ACCEPTED AND AGREED AS OF
THE DATE FIRST ABOVE WRITTEN:
BANQUE PARIBAS, as Agent
By:________________________
Its:____________________
9
<PAGE> 10
STATE OF ILLINOIS)
) ss:
COUNTY OF COOK )
On February __, 1996, before me, the undersigned, a notary
public in and for said state and county, personally appeared _______________
and _______________, personally known to me (or proved to me on the basis of
satisfactory evidence), to be the persons who executed the within instrument as
the _______________ and the ________________, respectively, on behalf of JACOR
COMMUNICATIONS, INC., an Ohio corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
______________________
Notary Public
My Commission Expires:
______________________
10
<PAGE> 11
SCHEDULE I TO
TRADEMARK SECURITY AGREEMENT
<TABLE>
<CAPTION>
Registration
Trademark No. and Date Record Owner
- --------- ------------ ------------
<S> <C> <C>
Jacor 1,617,984 Jacor Communications, Inc.
10/16/90
</TABLE>
11
<PAGE> 1
SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY (the "Guaranty"), dated as of February
__, 1996, is made, jointly and severally, by each of the parties listed on the
signature pages hereof and those additional entities that hereafter become
parties hereto by executing signature pages hereof (each a "Guarantor" and
collectively the "Guarantors") in favor of and for the benefit of Banque
Paribas, as agent (the "Agent") for itself, the co-agents and the banks (such
banks, together with their respective successors and assigns, collectively
called, the "Banks") party to the Credit Agreement (as hereinafter defined), any
L/C Providers (as defined in the Credit Agreement) and any Interest Rate
Providers (as defined in the Credit Agreement). All capitalized terms used
herein but not defined herein shall have the meanings attributed to such terms
in the Credit Agreement.
W I T N E S S E T H:
WHEREAS, Jacor Communications, Inc. (the "Company"), the Agent,
the Co-Agents (as defined therein) and the Banks are entering into that certain
Credit Agreement, dated as of the date hereof (as modified, supplemented,
amended, extended, supplanted or restated from time to time, the "Credit
Agreement");
WHEREAS, the Credit Agreement requires the Company to enter into
certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Providers;
WHEREAS, each of the Guarantors is a wholly-owned direct or
indirect Subsidiary of the Company and
<PAGE> 2
each expects to realize substantial direct and indirect benefits as a result of
the Company entering into the Credit Agreement and the Rate Hedging Agreements;
WHEREAS, the execution and delivery of this Guaranty is a
condition precedent to the availability of credit under the Credit Agreement;
and
NOW, THEREFORE, in consideration of the foregoing, to induce the
Agent, each Co-Agent, each Bank, each L/C Provider and each Interest Rate
Provider to enter into the Credit Agreement, the Citicasters L/C Documents and
Rate Hedging Agreements, respectively, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Guarantors hereby agree as follows:
1. Guaranty. Each Guarantor, jointly and severally, irrevocably
and unconditionally guarantees the full and prompt payment when due (whether at
stated maturity, upon acceleration or otherwise) of (i) all unpaid principal of
and accrued and unpaid interest on the Notes, all accrued and unpaid fees and
all other obligations of the Company to the Banks or to any Bank, the Agent, any
Co-Agent, any L/C Provider or any Interest Rate Provider (including all such
amounts which would become due but for the operation of the automatic stay under
Section 362(a) of the Federal Bankruptcy Code, 11 U.S.C. Sections 362(a)), and
the operation of Sections 502(b) and 506(b) of the Federal Bankruptcy Code, 11
U.S.C. Sections 502(b) and Sections 506(b)) now existing or hereafter incurred
under, arising out of or in connection with the Loan Documents, including,
without limitation, any amendments to such Loan Documents which may increase the
obligations of the Guarantors guaranteed hereunder and (ii) all obligations of
the Company (including all such amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the Federal Bankruptcy
Code, 11 U.S.C. Sections 362(a), and the operation of
2
<PAGE> 3
Sections 502(b) and 506(b) of the Federal Bankruptcy Code, 11 U.S.C. Sections
502(b) and Sections 506(b)) now existing or hereafter incurred under or arising
out of or in connection with the Citicasters L/C Documents including, without
limitation any amendments to the Citicasters L/C Documents which may increase
the obligations of the Guarantors guaranteed hereunder (all such principal,
interest, fees, obligations and liabilities being collectively referred to
herein as the "Guaranteed Debt"). All payments by each Guarantor under this
Guaranty shall be made on the same basis as (i) payments made by the Company
under the Credit Agreement, (ii) subject to any intercreditor agreement in
effect from time to time, payments made to any L/C Provider under the applicable
Citicasters L/C Documents and (iii) payments made to any Interest Rate Provider
under the applicable Rate Hedging Agreement. Notwithstanding anything to the
contrary contained herein, the maximum liability of any Guarantor under this
Guaranty shall be $1.00 less than the greater of (a) the amount that would
render such Guarantor insolvent if this Guaranty were to be enforced in full as
of the date hereof and (b) the amount that would render such Guarantor insolvent
on the date this Guaranty is enforced against such Guarantor. This Guaranty
constitutes a guaranty of payment when due and not of collection, and each
Guarantor specifically agrees that it shall not be necessary or required that
the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider exercise any right, assert any claim or demand or enforce any remedy
whatsoever against the Company (or any other Person) before or as a condition to
the obligations of the Guarantors hereunder.
2. Waiver. Each Guarantor waives notice of the acceptance of this
Guaranty and of the extension or continuation of the Guaranteed Debt or any part
thereof. Each Guarantor further waives presentment, protest, notice, demand, or
action on delinquency in respect of the Guaranteed Debt or any part thereof,
including any
3
<PAGE> 4
right to require the Agent, any Co-Agent, any Bank, any L/C Provider or any
Interest Rate Provider to sue the Company, any other Guarantor, or any other
guarantor or other Person obligated with respect to the Guaranteed Debt or any
part thereof, or otherwise to enforce payment thereof against any collateral
securing the Guaranteed Debt or any part thereof.
3. Certain Rights of Agent, Co-Agents, Banks, any L/C Providers
and Interest Rate Providers. The validity and enforceability of this Guaranty
shall not be impaired or affected by any of the following, whether occurring
before or after receipt by the Agent, any Co-Agent, any Bank, any L/C Provider
or any Interest Rate Provider of any notice of termination of this Guaranty and
each Guarantor hereby expressly waives any and all defenses now or hereafter
arising or asserted by reason of: (a) any extension, modification or renewal of,
or indulgence with respect to, or substitutions for, the Guaranteed Debt or any
part thereof or any agreement relating thereto (other than any agreement between
the Agent, the Co-Agents, the Banks or the L/C Providers and one or more
Guarantor specifically modifying or amending the terms of this Guaranty) at any
time; (b) any failure or omission to enforce any right, power or remedy with
respect to the Guaranteed Debt or any part thereof or any agreement relating
thereto, or any collateral securing the Guaranteed Debt or any part thereof; (c)
any waiver of any right, power or remedy or of any default with respect to the
Guaranteed Debt or any part thereof or any agreement relating thereto or with
respect to any collateral securing the Guaranteed Debt or any part thereof; (d)
any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral securing the
Guaranteed Debt or any part thereof, any other guaranties with respect to the
Guaranteed Debt or any part thereof, or any other obligation of any person or
entity with respect to the Guaranteed Debt or any part thereof; (e) the
4
<PAGE> 5
unenforceability or invalidity of the Guaranteed Debt or any part thereof or the
lack of genuineness, unenforceability or invalidity of any agreement relating
thereto or with respect to any collateral securing the Guaranteed Debt or any
part thereof; (f) the application of payments received from any source to the
payment of indebtedness other than the Guaranteed Debt, any part thereof or
amounts which are not covered by this Guaranty even though the Agent, a
Co-Agent, a Bank, any L/C Provider or an Interest Rate Provider might lawfully
have elected to apply such payments to any part or all of the Guaranteed Debt or
to amounts which are not covered by this Guaranty; (g) any disability or other
defense of any of the Company or any other Guarantor with respect to the
Guaranteed Debt; (h) the unenforceability or invalidity of any security or
guaranty for the Guaranteed Debt or the lack of perfection or continuing
perfection or failure of priority of any security for the Guaranteed Debt; (i)
the cessation for any cause whatsoever of the liability of any of the Company or
any other Guarantor (other than by reason of the full payment and performance of
all Guaranteed Debt); (j) any failure of the Agent to marshall assets in favor
of any Guarantor or any other Person; (k) any failure of the Agent to give
notice of sale or other disposition to any Guarantor or any defect in any notice
that may be given in connection with any sale or disposition; (l) any act or
omission of the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest
Rate Provider or others that directly or indirectly results in or aids the
discharge or release of any of the Company or any other Guarantor or the
Guaranteed Debt or any other security or guaranty therefor by operation of law
or otherwise; (m) any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety's or Guarantor's obligation
in proportion to the principal obligations; or (n) any other circumstance which
might otherwise constitute a defense available to, or a dis-
5
<PAGE> 6
charge of, any Guarantor, all whether or not any Guarantor shall have had notice
or knowledge of any act or omission referred to in the foregoing clauses (a)
through (n) of this paragraph.
4. Absolute Guaranty. The obligations of each Guarantor under this
Guaranty are joint and several and are absolute, irrevocable and unconditional
and shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, without
limitation: (a) any action or inaction by the Agent, any Co-Agent, any Bank, any
L/C Provider or any Interest Rate Provider contemplated in Section 3 of this
Guaranty; or (b) the existence of any other guaranties of the Guaranteed Debt,
whether or not such other guaranties have been acted upon in any way. This
Guaranty is a primary obligation of each Guarantor.
5. Waiver of Rights of Subrogation, etc. Each Guarantor hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against the Company or any other Guarantor that arise from the
existence, payment, performance or enforcement of such Guarantor's obligations
under this Guaranty or any other Loan Document, including any right of
subrogation, reimbursement, exoneration, or indemnification, any right to
participate in any claim or remedy of the Agent, any Co-Agent, any Bank, any L/C
Provider or any Interest Rate Provider against the Company or any other
Guarantor or any collateral which the Agent now has or hereafter acquires,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including the right to take or receive from the Company
or any other Guarantor, directly or indirectly, in cash or other property or by
set-off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to any Guarantor in violation of the
preceding sentence and the Guaranteed
6
<PAGE> 7
Debt shall not have been paid in cash in full, such amount shall be deemed to
have been paid to such Guarantor for the benefit of, and held in trust for, the
Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers, and shall forthwith be paid to the Agent to be credited and applied
upon the Guaranteed Debt, whether matured or unmatured. Each Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement, the Citicasters L/C
Documents and the Rate Hedging Agreements and that the waiver set forth in this
Section is knowingly made in contemplation of such benefits. Each Guarantor
waives any benefit of the collateral, if any, which may from time to time secure
the Guaranteed Debt or any part thereof and authorizes the Agent, the Co-Agents,
the Banks and the L/C Providers to take any action or exercise any remedy with
respect thereto, which the Agent, the Co-Agents, the Banks and the L/C Providers
in their sole discretion shall determine, without notice to any Guarantor. In
the event the Agent, the Co-Agents, the Banks or the L/C Providers in its or
their sole discretion elect to give notice of any action with respect to the
collateral, if any, securing the Guaranteed Debt or any part thereof, ten days'
written notice mailed to a Guarantor by ordinary mail at the address shown
hereon shall be deemed reasonable notice of any matters contained in such
notice. Each Guarantor hereby irrevocably waives any and all claims such
Guarantor may have against the Company for any indebtedness or other obligation
of the Company to such Guarantor now existing or hereafter incurred.
6. Representations and Warranties of Guarantors. Each Guarantor
makes the following representations, warranties and agreements:
(a) Such Guarantor is a corporation duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all
7
<PAGE> 8
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
(b) Such Guarantor has the corporate power and authority
and legal right to execute and deliver this Guaranty and to perform its
obligations hereunder. The execution and delivery by such Guarantor of this
Guaranty and the performance of its obligations hereunder have been duly
authorized by proper corporate proceedings, and this Guaranty constitutes the
legal, valid and binding obligation of such Guarantor enforceable against such
Guarantor in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
(c) Except as provided in Section 5.3 of the Credit
Agreement, neither the execution and delivery by such Guarantor of this
Guaranty, nor the consummation of the transactions herein contemplated, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on such Guarantor or
its articles of incorporation or by-laws or the provisions of any indenture,
instrument or agreement to which such Guarantor is a party or is subject, or by
which it, or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on the
property of such Guarantor pursuant to the terms of any such indenture,
instrument or agreement, except any violation, default or Lien which would not
have a material adverse effect on the business, financial condition or
operations of such Guarantor. Except as provided in Section 5.3 of the Credit
Agreement, no order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
8
<PAGE> 9
authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
this Guaranty, other than the filing, within the period established by
applicable law, of this Guaranty with the FCC.
7. Continuing Guaranty, etc. This Guaranty shall remain in full
force and effect until the indefeasible payment in full of all of the Guaranteed
Debt. No failure or delay on the part of the Agent, any Co-Agent, any Bank, any
L/C Provider or any Interest Rate Provider in exercising any right, power or
privilege hereunder and no course of dealing between any Guarantor, the Agent,
any Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider or the
holder of any note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The rights, powers and remedies herein expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Agent,
any Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider or the
holder of any Note would otherwise have. No notice to or demand on any Guarantor
in any case shall entitle any Guarantor to any other or further notice or demand
in similar or other circumstances or constitute a waiver of the rights of the
Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider or
the holder of any Note to act in any circumstances without notice or demand.
Credit may be granted or continued from time to time by any Bank, any L/C
Provider or any Interest Rate Provider to the Company without notice to or
authorization from any Guarantor regardless of the Company's financial or other
condition at the time of any such grant or continuation. Neither the Agent, any
Co-Agent, any Bank, any L/C Provider nor any Interest Rate Provider shall have
any obligation to disclose or discuss with any Guarantor its assessment of the
financial condition of the Company.
9
<PAGE> 10
8. Successors, Assigns. This Guaranty shall be binding upon each
Guarantor and its respective successors and assigns and shall inure to the
benefit of the Banks, the Co-Agents, the Agent, any L/C Provider and any
Interest Rate Providers and their respective successors and assigns, provided,
however, that, except as permitted by Section 6.12 of the Credit Agreement, no
Guarantor may transfer, or otherwise assign, any of its obligations hereunder
without the prior written consent of the Banks and the L/C Providers.
9. Amendment, Waiver. Neither this Guaranty nor any provision
hereof may be amended, waived, discharged or terminated except as provided in
Section 8.2 of the Credit Agreement.
10. Credit Agreement. Each Guarantor acknowledges that an executed
(or conformed) copy of the Credit Agreement has been made available to its
principal executive officers and such officers are familiar with the contents
thereof.
11. Setoff, etc. In addition to, and without limitation of, any
rights of the Banks, any L/C Providers and any Interest Rate Providers under
applicable law, if the Company becomes insolvent, however evidenced, or any
Default or any default under any of the Citicasters L/C Documents exists, any
indebtedness from any Bank or any Interest Rate Provider to any Guarantor
(including all account balances, whether provisional or final and whether or not
collected or available) may be offset and applied toward the payment of the
obligations owing to such Bank or Interest Rate Provider, whether or not the
Guaranteed Debt, or any part thereof, shall then be due.
12. Notices. All notices and other communications hereunder shall
be made at the addresses, in the manner and with the effect provided in Article
XIII of
10
<PAGE> 11
the Credit Agreement, provided that, for this purpose, the address of each
Guarantor shall be the one specified opposite its signature below.
13. Liability of Agent, Co-Agents, Banks, L/C Providers Interest
Rate Providers, etc. If any claim is ever made upon the Agent, any Co-Agent, any
Bank, any L/C Provider and Interest Rate Provider or the holder of any Note for
repayment or recovery of any amount or amounts received in payment or on account
of any of the Guaranteed Debt and any of the aforesaid payees repays all or part
of said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (b) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Company), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon it, notwithstanding any revocation hereof or the
cancellation of any Note or other instrument evidencing any liability of the
Company, and each Guarantor shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
14. CHOICE OF LAW; CONSENT TO JURISDICTION. THIS GUARANTY SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF
THE STATE OF ILLINOIS. EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE COURT SITTING
IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY AND EACH GUARANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT.
15. Expenses. Each Guarantor agrees to pay all reasonable costs,
fees and expenses (including rea-
11
<PAGE> 12
sonable attorneys' fees and time charges and attorneys for the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers, which
attorneys may be employees of the Agent, any Bank and any Interest Rate
Providers) incurred by the Agent, the Co-Agents, the Banks, any L/C Providers
and any Interest Rate Providers in collecting or enforcing the Guarantors'
obligations under this Guaranty.
16. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.
17. Section Captions. Section captions used in this Guaranty are
for convenience of reference only and shall not affect the construction of this
Guaranty.
18. Severability. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
19. Joinder. Any other Person may become a Guarantor under and
become bound by the terms and provisions hereof by executing and delivering to
the Agent a counterpart signature page hereto substantially in the form of
Appendix I hereto.
20. WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS GUARANTY. EACH GUARANTOR AC-
12
<PAGE> 13
KNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR
THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT,
THE CO-AGENTS, THE BANKS, ANY L/C PROVIDERS AND ANY INTEREST RATE PROVIDERS TO
ENTER INTO THE CREDIT AGREEMENT, THE CITICASTERS L/C DOCUMENTS AND RATE HEDGING
AGREEMENTS, RESPECTIVELY.
13
<PAGE> 14
IN WITNESS WHEREOF, each Guarantor has caused this Subsidiary
Guaranty to be executed and delivered as of the date first above written.
Address for each Guarantor:
1300 PNC Center JACOR BROADCASTING OF FLORIDA, INC.
201 East Fifth Street
Cincinnati, Ohio 45202
Attn: R. Christopher Weber
By:
----------------------------------------
Name:
Title:
JACOR BROADCASTING OF ATLANTA, INC.
By:
----------------------------------------
Name:
Title:
JACOR BROADCASTING OF KNOXVILLE, INC.
By:
----------------------------------------
Name:
Title:
JACOR BROADCASTING OF COLORADO, INC.
By:
----------------------------------------
<PAGE> 15
Name:
Title:
15
<PAGE> 16
JACOR BROADCASTING OF TAMPA BAY, INC.
By:
----------------------------------------
Name:
Title:
JACOR BROADCASTING OF ST. LOUIS, INC.
By:
----------------------------------------
Name:
Title:
JACOR CABLE, INC.
By:
----------------------------------------
Name:
Title:
GEORGIA NETWORK EQUIPMENT, INC.
By:
----------------------------------------
Name:
Title:
JACOR BROADCASTING CORPORATION
<PAGE> 17
By:
----------------------------------------
Name:
Title:
BROADCAST FINANCE, INC.
By:
----------------------------------------
Name:
Title:
CHESAPEAKE SECURITIES, INC.
By:
----------------------------------------
Name:
Title:
OIA BROADCASTING L.L.C.
By:
----------------------------------------
Name:
Title:
17
<PAGE> 18
Appendix I to Subsidiary Guaranty
[Form of Counterpart Signature Page to
Subsidiary Guaranty]
By signing below, [each of] the undersigned becomes a Guarantor
under the Subsidiary Guaranty dated as of February , 1996, to which this
signature page is attached and is made a part, and is bound by the terms
thereof.
[Guarantor]
Date: By:
-------------------------------- -------------------------------------
Name:
Title:
[Guarantor]
Date: By:
-------------------------------- -------------------------------------
Name:
Title:
<PAGE> 1
SUBSIDIARY SECURITY AGREEMENT
THIS SUBSIDIARY SECURITY AGREEMENT (the "Security Agreement") is
executed as of February __, 1996, and is made by each of the parties listed on
the signature pages hereof and those additional entities that hereafter become
parties hereto by executing counterpart signature pages hereof (each a "Grantor"
and collectively the "Grantors") in favor of Banque Paribas, as agent (the
"Agent") for itself, the banks (said banks, together with their respective
successors and assigns, collectively called the "Banks"), the co-agents (the
"Co-Agents") party to the Credit Agreement (as hereinafter defined), any L/C
Providers (as defined in the Credit Agreement) and any Interest Rate Providers
(as defined in the Credit Agreement).
W I T N E S S E T H:
WHEREAS, Jacor Communications, Inc. (the "Company") is entering into
that certain Credit Agreement dated as of the date hereof, with the Banks, the
Co- Agents and the Agent (as modified, supplemented, amended, extended,
supplanted or restricted from time to time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires the Company to enter into
certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Providers;
WHEREAS, each of the Grantors is a Wholly-Owned Subsidiary of the
Company;
<PAGE> 2
WHEREAS, Grantors expect to realize substantial direct and indirect
benefits as a result of the Company entering into the Credit Agreement and the
Rate Hedging Agreements;
WHEREAS, the execution and delivery of this Security Agreement is a
condition precedent to the availability of credit under the Credit Agreement;
and
NOW, THEREFORE, for and in consideration of the foregoing and of the
direct and indirect benefits to be received by the Company and the Grantors and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS.
As used in this Subsidiary Security Agreement:
"Accounts" means "accounts" as defined in Section 9-106 of the UCC.
"Chattel Paper" means "chattel paper" as defined in Section 9-105 of
the UCC.
"Collateral" means all tangible and intangible Property, wherever
located, whether now owned or hereafter existing, in which the Grantors (or any
of them) now has or hereafter acquires any right or interest, and the Proceeds
(including insurance proceeds), products, substitutions and replacements thereof
and additions and accessions thereto and all cash and cash equivalents, bank
accounts, special collateral accounts, and all books and records, customer
lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto, including, without limitation, the
following property: all Accounts, Chattel Paper, Documents, Deposit Accounts,
Equipment, Fixtures,
2
<PAGE> 3
General Intangibles, Instruments, Inventory, Stock Rights and Proceeds,
products, additions and accessions thereto or thereof; provided, however, that
Collateral shall not include (i) licenses and permits issued by the FCC to the
extent it is unlawful to grant a security interest in any such license or permit
or to the extent that the grant of any such security interest in any such
license or permit would result in the forfeiture of any such license or permit
or a default under any such license or permit, (ii) assets and stock of newly
formed subsidiaries of the Grantors, to the extent that the Agent is not to
receive a security interest therein, as provided in Section 6.15(i) of the
Credit Agreement and (iii) collateral pledged to the Agent pursuant to any
Subsidiary Pledge Agreement to which any Grantor is a party.
"Deposit Accounts" means "deposit accounts" as defined in Section 9-105
of the UCC.
"Documents" means "documents" as defined in Section 9-105 of the UCC.
"Equipment" means "equipment" as defined in Section 9-109(2) of the
UCC.
"Fixtures" means "fixtures" as defined in Section 9-313 of the UCC.
"General Intangibles" means "general intangibles" as defined in 9-106
of the UCC including, without limitation, all contract rights, rights to receive
payments of money, chooses in action, judgments, tax refunds and tax refund
claims, patents, trademarks, trade names, copyrights, licenses (including,
without limitation, those issued by the FCC except to the extent that it is
unlawful to grant a security interest in any such license or that the grant of
any such security interest therein would result in a default under any such
license), franchises, leasehold interests in real or personal property,
3
<PAGE> 4
rights to receive rentals of real or personal property, and guarantee claims.
"Instruments" means "instruments" as defined in Section 9-105 of the
UCC including, without limitation, all checks, drafts, notes, bonds, debentures,
government securities, certificates of deposit, letters of credit, preferred and
common stocks, options and warrants.
"Inventory" means "inventory" as defined in Section 9-109 of the UCC,
including, without limitation, all inventory, raw materials, work in process,
finished goods, returned or repossessed goods, goods held for sale or lease or
furnished or to be furnished under contracts of service and goods released to a
Grantor or to third parties under trust receipts or similar documents.
"Obligations" means, as to each Guarantor, all obligations of such
Guarantor under the Subsidiary Guaranty executed by such Guarantor including,
without limitation, all obligations of such Guarantor pursuant to Section 1 of
such Subsidiary Guaranty.
"Proceeds" means "proceeds" as defined in Section 9-306 of the UCC.
"Receivables" means the Accounts, Chattel Paper, Documents, General
Intangibles and Instruments.
"Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"Stock Rights" means any stock, any dividend or other distribution and
any other right or property which a Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any shares of stock constituting Collateral and any
stock, any right to
4
<PAGE> 5
receive stock and any right to receive earnings, in which a Grantor now has or
hereafter acquires any right.
"Subsidiary Security Agreement" means this Subsidiary Security
Agreement, as it may be amended or modified and in effect from time to time.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Illinois.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to such terms
in the Credit Agreement.
2. GRANT OF SECURITY INTEREST.
In order to secure the full and complete payment and performance of the
Obligations when due, each Grantor hereby pledges and grants to the Agent for
the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers, equally and ratably in proportion to the total
Obligations owing at any time to the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest Rate Providers, a continuing lien and security
interest in the Collateral.
3. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants to the Agent, each Co-Agent, each
Bank and each Interest Rate Provider that:
3.1 Existence and Standing. Such Grantor is duly incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
5
<PAGE> 6
3.2 Authorization, Validity and Enforceability. The execution and
delivery by such Grantor of this Subsidiary Security Agreement has been duly
authorized by proper corporate proceedings, and this Subsidiary Security
Agreement constitutes a legal, valid and binding obligation of such Grantor and
creates a security interest which is enforceable against such Grantor in
accordance with its terms in respect of all now owned and hereafter acquired
Collateral pledged by such Grantor, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity.
3.3 Conflicting Laws and Contracts. Except as provided in Section 5.3
of the Credit Agreement, neither the execution and delivery by such Grantor of
this Subsidiary Security Agreement, nor the creation and perfection of the
security interest in the Collateral granted by such Grantor hereunder, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on such Grantor or
such Grantor's certificate of incorporation or bylaws or the provisions of any
indenture, instrument or agreement to which such Grantor is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on the property of such Grantor pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, this Subsidiary Security Agreement or the grant of
the securi-
6
<PAGE> 7
ty interest in the Collateral pursuant hereto, other than the filing, within the
period established by applicable law, of this Subsidiary Security Agreement with
the FCC and as otherwise provided in Section 5.3 to the Credit Agreement.
3.4 Principal Location. Such Grantor's mailing address and the location
of its chief executive office and the books and records relating to the
Receivables pledged by such Grantor are disclosed in Exhibit "A" hereto; such
Grantor has no other places of business except those set forth in Exhibit "A"
hereto.
3.5 Property Locations. The Inventory and Equipment and Fixtures
pledged by such Grantor are located solely at the locations described in Exhibit
"A" hereto and have not, within the four months preceding the date of this
Security Agreement, been located at any other locations. None of said locations
are leased by such Grantor as lessee except those designated in Part B of
Exhibit "A" hereto.
3.6 No Other Names. Except as set forth on Exhibit "A" hereto, such
Grantor has not conducted business under any name except the name in which it
has executed this Subsidiary Security Agreement.
3.7 No Default. No Default, Unmatured Default or L/C Default exists as
of the date hereof.
3.8 Receivables. The names of the obligors, amounts owing, due dates
and other information with respect to the Receivables pledged by such Grantor
are and will be correctly stated in all material respects in all records of such
Grantor relating thereto and in all invoices and reports with respect thereto
furnished to the Agent by such Grantor from time to time upon a request
therefor.
7
<PAGE> 8
3.9 Filing Requirements. None of the Equipment pledged by such Grantor
(other than vehicles) is covered by any certificate of title. No security
interests or liens have been filed in respect of any of the Collateral under any
federal statute (other than filings with the United States Patent and Trademark
Office with respect to federally registered patents and trademarks). The legal
description and street address of those properties designated by the Agent on
which any Fixtures pledged by such Grantor are located are set forth in Exhibit
"B" hereto together with the name and address of the record owner of each such
property. Upon (a) filing financing statements naming each Grantor as "debtor"
and the Agent as "secured party" and describing the Collateral in the filing
offices set forth for each such Grantor on Exhibit "E" hereto and (b) the
Instruments listed on Exhibit "D" hereto which constitute Collateral having been
delivered to the Agent, the security interests in the Collateral (other than (i)
motor vehicles, (ii) assets of Georgia Network Equipment, Inc., (iii) Deposit
Accounts, (iv) federally registered patents and trademarks to the extent a
filing with the United States Patent and Trademark Office is required to perfect
a security interest therein and (v) fixtures on real property owned or leased by
the Company or any Subsidiary which is not subject to a Mortgage granted to the
Agent hereunder) will constitute perfected security interests therein superior
and prior to all Liens (other than Liens permitted by Section 6.17 of the Credit
Agreement).
3.10 No Financing Statements. No financing statement describing all or
any portion of the Collateral pledged by such Grantor which has not lapsed or
been terminated naming such Grantor as debtor has been filed in any jurisdiction
except financing statements (a) naming the Agent as secured party, (b) covering
Liens permitted by Section 6.17 of the Credit Agreement and (c) as described in
Exhibit "C" hereto.
8
<PAGE> 9
3.11 Pledged Securities. Exhibit "D" hereto sets forth a complete and
accurate list of the Instruments, if any, delivered by such Grantor to the Agent
for the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers. Such Grantor is the direct and beneficial owner of
each share of stock, if any, listed on Exhibit "D" annexed hereto as being owned
by it. Such Grantor further represents and warrants that all of such shares of
stock have been duly and validly issued, are fully paid and non-assessable and
are owned by such Grantor free and clear of any Liens, except for the security
interest granted to the Agent hereunder and Liens permitted by Section 6.17 of
the Credit Agreement.
4. COVENANTS.
From the date of this Subsidiary Security Agreement and thereafter
until this Subsidiary Security Agreement is terminated:
4.1 General.
4.1.1 Inspection. Each Grantor will permit the Agent, the
Co-Agents, the L/C Providers or any Bank, by its or their representatives and
agents, to inspect the Collateral pledged by such Grantor, to examine and
(except in the case of confidential information relating to the Company's or any
Grantor's relationship with third parties) make copies of the records of such
Grantor relating thereto, and to discuss such Collateral and the records of such
Grantor with respect thereto with, and to be advised as to the same by, such
Grantor's officers and employees and, after the occurrence and during the
continuance of any Default, Unmatured Default or L/C Default, with any person or
entity which is or may be obligated on any Receivable pledged by such Grantor,
all at such reasonable times and intervals as the Agent or any Bank may
determine, all at such Grantor's expense.
9
<PAGE> 10
4.1.2 Taxes. Each Grantor will pay before they become delinquent
all taxes, assessments and governmental charges and levies upon the Collateral,
except those which are being contested in good faith by appropriate proceedings
and with respect to which no Lien exists other than Liens permitted by Section
6.17 of the Credit Agreement.
4.1.3 Records and Reports. Each Grantor will maintain complete and
accurate books and records with respect to the Collateral pledged by such
Grantor, and furnish to the Agent, with sufficient copies for each of the Banks,
and any L/C Providers and any Interest Rate Providers, such reports relating to
such Collateral as the Agent shall from time to time reasonably request.
4.1.4 Notice of Default. Each Grantor will give prompt notice in
writing to the Agent, the Banks, and any L/C Providers and any Interest Rate
Providers of the occurrence of any Default, Unmatured Default or L/C Default and
of any other development (other than the issuance or adoption of any new
federal, state or local statute, regulation or ordinance or any other
development affecting the broadcasting industry generally), financial or
otherwise, which is reasonably likely to materially adversely affect a
substantial portion of the Collateral or the ability of such Grantor to pay or
perform its obligations hereunder.
4.1.5 Financing Statements and Other Actions. Each Grantor will
execute and deliver to the Agent all financing statements and other documents
(and, if so requested by the Agent or any Bank, use its best efforts to obtain
landlord waivers) and take such further actions from time to time reasonably
requested by the Agent, any Co-Agent or any Bank in order to establish and
maintain a first perfected security interest in the Collateral pledged by such
Grantor or to otherwise obtain
10
<PAGE> 11
the full benefits of this Security Agreement. In addition, without limiting the
generality of the foregoing, each Grantor will
(a) mark conspicuously each and every writing which individually or
which when taken with one or more other writings constitutes Chattel Paper
included in the Collateral with a legend, in form and substance satisfactory to
the Agent, indicating the interest of the Agent therein;
(b) after the occurrence and during the continuance of a Default or
L/C Default, mark conspicuously each document included in the Receivables and,
at the request of the Agent, each of its records pertaining to the Collateral
with a legend, in form and substance satisfactory to the Agent, indicating that
such document or Collateral is subject to the security interest granted hereby;
and
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Agent may request, in order to perfect and preserve the
security interests and other rights granted or purported to be granted to the
Agent hereby.
4.1.6 Disposition of Collaterial. No Grantor will sell, lease or
otherwise dispose of the Collaterial, except as permitted by Section 6.13 of
the Credit Agreement.
4.1.7 Liens. No Grantor will create, incur or suffer to exist any
Lien except the security interest created by this Subsidiary Security Agreement
and Liens permitted by Section 6.17 of the Credit Agreement. Each Grantor agrees
to warrant and defend title to and ownership of the Collateral pledged by such
Grantor
11
<PAGE> 12
and the lien created by this Subsidiary Security Agreement against the claims of
all Persons and maintain and preserve such lien at all times during the term of
this Subsidiary Security Agreement.
4.1.8 Change in Location or Name. No Grantor will (i) have any
Inventory, Equipment or Fixtures or proceeds or products thereof (other than
Collateral disposed of as permitted by Section 4.1.6) at a location other than a
location of such Grantor specified in Exhibit "A" hereto or any jurisdiction in
the United States in which a financing statement or similar evidence of a
security interest under applicable law has been filed against such Grantor as
debtor by the Agent as secured party, (ii) maintain records relating to the
Receivables at a location of such Grantor other than at the location specified
on Exhibit "A", (iii) maintain a place of business at a location other than a
location of such Grantor specified on Exhibit "A" hereto, (iv) change its name,
or (v) change its mailing address, unless such Grantor shall have given the
Agent not less than 30 days' prior written notice thereof.
4.1.9 Other Financing Statements. No Grantor will sign or authorize
the signing on its behalf of any financing statement naming it as debtor
covering all or any portion of the Collateral, except financing statements (a)
naming the Agent as secured party, (b) covering Liens permitted by Section 6.17
of the Credit Agreement and (c) as described in Exhibit "C" hereto.
4.2 Receivables.
4.2.1 Certain Agreements on Receivables. No Grantor will make or
agree to make any discount, credit, rebate or other reduction in the original
amount owing on a Receivable or accept in satisfaction of a Receivable less than
the original amount thereof, except that, so long as no Default or L/C Default
has occurred
12
<PAGE> 13
and is continuing, each Grantor may reduce the amount of Accounts pledged by
such Grantor in accordance with its present policies and in the ordinary course
of business.
4.2.2 Collection of Receivables. Except as otherwise provided in
this Subsidiary Security Agreement or the Credit Agreement, each Grantor will
collect and enforce, at such Grantor's sole expense, all amounts due or
hereafter due to such Grantor under the Receivables pledged by such Grantor.
4.2.3 Delivery of Invoices. Each Grantor will deliver to the Agent
immediately upon its request while a Default or L/C Default exists duplicate
invoices with respect to each Account pledged by such Grantor bearing such
language of assignment as the Agent shall specify.
4.2.4 Disclosure of Counterclaims on Receivables. If any discount,
credit, agreement to make a rebate or to otherwise reduce the amount owing on a
Receivable in excess of $50,000 exists or if, to the knowledge of any Grantor,
any dispute, setoff, claim, counterclaim or defense exists or has been asserted
or threatened with respect to any such Receivable, the Grantor who pledged such
Receivable will disclose such fact to the Agent in writing in connection with
the inspection by the Agent of any record of such Grantor relating to such
Receivable and in connection with any invoice or report furnished by such
Grantor to the Agent relating to such Receivable.
4.3 Inventory and Equipment.
4.3.1 Maintenance of Goods. Each Grantor will do all things
necessary to maintain, preserve, protect and keep the Inventory and the
Equipment pledged by such Grantor in good repair and working and saleable
13
<PAGE> 14
condition, except for obsolete Equipment no longer used or useful in such
Grantor's business.
4.3.2 Insurance. Each Grantor will (i) maintain fire and extended
coverage insurance on the Inventory and Equipment pledged by such Grantor
containing a lender's loss payable clause in favor of the Agent (or, upon
request therefor, designating the Agent as an additional insured) and providing
that said insurance will not be terminated except after at least 30 days'
written notice from the insurance company to the Agent, (ii) maintain such other
insurance on such Inventory and Equipment for the benefit of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers as is
consistent with sound practice in the broadcasting industry and (iii) furnish to
the Agent upon the request of the Agent from time to time the originals of all
policies of insurance on such Inventory and Equipment and certificates with
respect to such insurance.
4.4 Instruments; Delivery of Pledged Collateral. Each Grantor will (i)
deliver to the Agent immediately upon the execution of this Subsidiary Security
Agreement, the originals of all Instruments included in the Collateral pledged
by such Grantor (other than, so long as no Default or L/C Default has occurred
and is continuing, proceeds of Inventory and Receivables collected in the
ordinary course of business) which are evidenced by certificates, endorsed in
blank, marked with such legends and assigned as the Agent shall specify, and
(ii) hold in trust for the Agent, the Co-Agents, the Banks, any L/C Providers
and any Interest Rate Providers upon receipt and immediately thereafter deliver
to the Agent any Instrument evidencing or constituting Collateral (other than,
so long as no Default or L/C Default has occurred and is continuing, ordinary
cash dividends paid with respect to the Instruments which are stock and the
Stock Rights related thereto and proceeds of Inventory
14
<PAGE> 15
and Receivables collected in the ordinary course of business).
4.5 Uncertificated Securities. Each Grantor will permit the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers from
time to time to cause the appropriate issuers of uncertificated securities
constituting Instruments pledged by such Grantor to mark their books and records
with the numbers and face amounts of all uncertificated securities constituting
Instruments and all rollovers and replacements therefor to reflect the Lien of
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers granted pursuant to this Subsidiary Security Agreement.
4.6 Stock.
4.6.1 Changes in Capital Structure of Issuers. Except as permitted
by Section 6.12 of the Credit Agreement, no Grantor will (i) permit or suffer
any issuer of corporate securities constituting Collateral which issuer is
controlled by such Grantor to dissolve, liquidate, retire any of its capital
stock, reduce its capital or merge or consolidate with any other entity, or (ii)
vote any of the Instruments in favor of any of the foregoing.
4.6.2 Stock Rights. Each Grantor will deliver to the Agent,
promptly upon receipt, all Stock Rights pledged by such Grantor (other than, so
long as no Default or L/C Default has occurred and is continuing, ordinary cash
dividends received with respect to the Instruments which are stock) and agrees
that such Stock Rights shall be held in trust by such Grantor for the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers until
delivery thereof to the Agent.
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4.6.3 Registration of Instruments. Each Grantor will permit any
registrable Collateral pledged by such Grantor to be registered in the name of
the Agent or its nominee at any time a Default or L/C Default exists at the
option of the Required Banks.
4.6.4 Exercise of Rights in Instruments. Each Grantor will permit
the Agent or its nominee at any time a Default or L/C Default exists, without
notice but subject to compliance with applicable law and subject to Section 8.18
hereof, to exercise all voting and corporate rights relating to the Collateral
pledged by such Grantor, including, without limitation, exchange, subscription
or any other rights, privileges, or options pertaining to any shares of the
stock pledged by such Grantor as Collateral and the Stock Rights as if it were
the absolute owner thereof.
4.7 Federal Claims: Notice to Agent. If at any time from time to time
the Agent directs the Company to begin doing so, the Company will promptly
notify the Agent of any Collateral pledged by such Grantor which constitutes a
claim against the United States government or any instrumentality or agency
thereof, the assignment of which claim is restricted by federal law.
5. DEFAULT.
5.1 Default shall mean "Default" as defined in the Credit Agreement,
and "L/C Default" shall mean any default under the Citicasters L/C Documents.
5.2 Acceleration and Remedies. If any Default described in Sections 7.6
or 7.7 of the Credit Agreement shall occur and be continuing with respect to the
Company, the Obligations shall immediately become due and payable without any
election or action on the part of the Agent, any Co-Agent, any Bank, any L/C
Providers or any Interest Rate Provider. If any other Default shall occur
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and be continuing, the Required Banks may declare the Obligations to be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Grantor hereby expressly waives. If any L/C Default
shall occur and be continuing, subject to the provisions of any intercreditor
agreement in effect from time to time, the L/C Providers may declare the
Obligations to be immediately due and payable, without present- ment, demand,
protest or notice of any kind, all of which the Grantor hereby expressly waives.
In such event, the Agent on behalf of the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers may, subject to Section
8.18:
5.2.1 Obligations That May Be Accelerat- ed. Exercise any or all of
the rights and remedies provided (i) in this Subsidiary Security Agreement, (ii)
to a secured party when a debtor is in default under a security agreement by the
Uniform Commercial Code as enacted in the State of Illinois or other applicable
jurisdiction, as amended, and (iii) by any other applicable law including,
without limitation, any law governing the exercise of a bank's right of setoff
or bankers' lien; and
5.2.2 Contingent Obligations. With respect to Obligations which are
contingent and cannot be accelerated by their nature, the Agent may require the
Grantors (or any of them) to deposit cash or other acceptable collateral in an
amount sufficient to cover principal and interest which will have accrued by the
maturity date on said Obligations to be held as security for said Obligations in
the special collateral account referred to in Section 7.
5.3 Grantor's Obligations upon Default. Upon the request of the Agent
after the occurrence and during
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the continuance of a Default or L/C Default, each Grantor will, subject to
Section 8.18:
5.3.1 Assembly of Collateral. Assemble and make available to the
Agent the Collateral pledged by such Grantor and all records relating thereto at
any place or places reasonably specified by the Agent.
5.3.2 Agent Access. Permit the Agent, by the Agent's
representatives and agents, to enter any premises where all or any part of the
Collateral pledged by such Grantor, or the books and records relating thereto,
or both, are located, to take possession of all or any part of such Collateral
and to remove all or any part of such Collateral.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of the Agent, any Co- Agent, any Bank or any
Interest Rate Provider to exercise any right or remedy granted under this
Subsidiary Security Agreement shall impair such right or remedy or be construed
to be a waiver of any Default or any L/C Default or an acquiescence therein, and
any single or partial exercise of any such right or remedy shall not preclude
other or further exercise thereof or the exercise of any other right or remedy,
and no waiver, amendment or other variation of the terms, conditions or
provisions of this Subsidiary Security Agreement whatsoever shall be valid
unless in writing signed by the Agent and the Required Banks, and then only to
the extent in such writing specifically set forth; provided, however, that any
amendment purporting to release all or any substantial portion of the Collateral
shall be valid only if approved in accordance with Section 8.2 of the Credit
Agreement. All rights and remedies contained in this Subsidiary Security
Agreement or by law afforded shall be cumulative and all shall be available to
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers until the Obligations to the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest
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Rate Providers until the Obligations to the Agent, the Co-Agents, the Banks, any
L/C Providers and any Interest Rate Providers have been paid in full and the
Commitments have been terminated.
7. PROCEEDS; COLLECTION OF RECEIVABLES.
7.1 Collection of Receivables. The Agent may at any time after the
occurrence and during the continuance of a Default or a L/C Default, by giving
the Grantors written notice, elect to require that any or all of the Receivables
be paid directly to the Agent for the benefit of the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers. In such event, the
Grantor or Grantors pledging such Receivables shall, and shall permit the Agent
to, promptly notify the account debtors or obligors under the Receivables of the
Agent's, the Co-Agents', the Banks', any L/C Provider's and any Interest Rate
Provider's interest therein and direct such account debtors or obligors to make
payment of all amounts then or thereafter due under the Receivables directly to
the Agent. Upon receipt of any such notice from the Agent, the Grantors shall
thereafter hold in trust for the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest Rate Providers all amounts and proceeds received them
with respect to such Receivables and other Collateral and immediately and at all
times thereafter deliver to the Agent all such amounts and proceeds in the same
form as so received, whether by cash, check, draft or otherwise, with any
necessary endorsements. The Agent shall hold and apply funds so received as
provided by the terms of Sections 7.3 and 7.4.
7.2 Lockboxes. Upon request of the Agent at any time after the
occurrence and during the continuance of a Default or a L/C Default, the
Grantors shall execute and deliver to the Agent the Agent's standard form
irrevocable lockbox agreements.
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7.3 Special Collateral Account. The Agent may at any time after the
occurrence and during the continuance of a Default or a L/C Default require all
cash proceeds of the Collateral received by the Agent to be deposited in a
special non-interest-bearing cash collateral account with the Agent and held
there as security for the Obligations. No Grantor shall have any control
whatsoever over said cash collateral account. The Agent may from time to time
(a) deposit the collateral balances in said cash collateral account into the
general operating account of any Grantor with the Agent or (b) apply the
collected balances in said cash collateral account to the payment of the
Obligations whether or not the Obligations shall then be due.
7.4 Application of Proceeds. The proceeds of the Collateral shall be
applied by the Agent to payment of the Obligations in the following order unless
a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all reasonable costs and expenses of the
Agent incurred in connection with the collection and enforcement of the
Obligations or of the security interest granted pursuant to this Subsidiary
Security Agreement;
(b) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other than
principal), pro rata amongst each Bank, the Agent, each Co-Agent and each L/C
Provider in accordance with the proportion which the accrued interest, fees and
other amounts (other than principal) constituting Obligations owing to each such
Bank, Agent, Co-Agent and L/C Provider bears to the aggregate amount of accrued
interest, fees and other amounts (other than principal) constituting Obligations
owing to all of the Banks, the Agent, the Co-Agents and the L/C Providers;
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(c) THIRD, to payment of the principal of the Obligations owing to
the Banks, any Bank, any L/C Providers or any Interest Rate Provider, pro rata
amongst the Banks, any L/C Providers and any Interest Rate Providers in
accordance with the proportion that the principal of the Obligations owing to
each such Bank, L/C Provider or Interest Rate Provider bears to the aggregate
amount of principal of the Obligations owing to all of the Banks, any L/C
Providers and any Interest Rate Providers; and
(d) FOURTH, the balance, if any, after all of the Obligations have
been satisfied, shall be deposited by the Agent into the Grantors' general
operating account(s) with the Agent.
8. GENERAL PROVISIONS.
8.1 Notice of Disposition of Collateral. Each Grantor hereby waives
notice of the time and place of any public sale or the time after which any
private sale or other disposition of all or any part of the Collateral may be
made. To the extent such notice may not be waived under applicable law, any
notice made shall be deemed reasonable if sent to a Grantor, addressed as set
forth in Section 9, at least 10 days prior to any such public sale or the time
after which any such private sale or other disposition may be made.
8.2 Compromises and Collection of Collateral. Each Grantor, the Banks,
the Co-Agents, the Agent, any L/C Providers and any Interest Rate Providers
recognize that setoffs, counterclaims, defenses and other claims may be asserted
by obligors with respect to certain of the Receivables, that certain of the
Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably
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may be expected to be recovered with respect to a Receivable. In view of the
foregoing, each Grantor agrees that the Agent may at any time and from time to
time, if a Default or a L/C Default has occurred and is continuing, compromise
with the obligor on any Receivable pledged by such Grantor, accept in full
payment of any such Receivable such amount as the Agent in its reasonable
discretion shall determine or abandon any such Receivable, and any such action
by the Agent shall be commercially reasonable so long as the Agent acts in good
faith based on information known to it at the time it takes any such action.
8.3 Secured Party Performance of Company Obligations. Without having
any obligation to do so, the Agent may perform or pay any obligation in this
Subsidiary Security Agreement which any Grantor has agreed to perform or pay but
which it has failed to so perform or pay in a timely manner after a request
therefor from the Agent and the Grantors shall reimburse the Agent for any
amounts paid by the Agent pursuant to this Section 8.3. The Grantors' obligation
to reimburse the Agent pursuant to the preceding sentence shall be an Obligation
payable on demand.
8.4 Authorization for Secured Party to Take Certain Action. Each
Grantor irrevocably authorizes the Agent at any time and from time to time in
the sole discretion of the Agent and irrevocably appoints the Agent as its
attorney in fact to act on behalf of such Grantor (i) at any time (if such
Grantor has failed to do so promptly upon a request therefor) (a) to execute on
behalf of such Grantor as debtor and to file financing statements necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the Agent's security interest in the Collateral
pledged by such Grantor, and (b) to file a carbon, photographic or other
reproduction of this Subsidiary Security Agreement or any financing statement
with re-
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spect to the Collateral pledged by such Grantor as a financing statement in such
offices as the Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Agent's security
interest in such Collateral and (ii) at any time after the occurrence and during
the continuance of a Default or a L/C Default (a) to endorse and collect any
cash proceeds of the Collateral, (b) subject to the terms of Section 4.1.6, to
enforce payment of the Receivables pledged by such Grantor in the name of the
Agent or such Grantor, and (c) to apply the proceeds of any Collateral pledged
by such Grantor received by the Agent to the Obligations as provided in Section
7. Each Grantor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.
8.5 Specific Performance of Certain Covenants. Each Grantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.6, 4.4, 5.3, 7 and 8.7 will cause irreparable injury to the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers that
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers have no adequate remedy at law in respect of such breaches and
therefore agrees, without limiting the right of the Agent, the Co-Agents, the
Banks, any L/C Providers or any Interest Rate Providers to seek and obtain
specific performance of other obligations of such Grantor contained in this
Subsidiary Security Agreement, that the covenants of such Grantor contained in
the Sections referred to in this Section 8.5 shall be specifically enforceable
against such Grantor.
8.6 Use and Possession of Certain Premises. Subject to the provisions
of Section 8.18, upon the occurrence and during the continuance of a Default or
a L/C Default, the Agent shall be entitled to occupy and use any premises owned
or leased by any Grantor where any
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of the Collateral pledged by such Grantor or any records relating to such
Collateral are located until the Obligations are paid or the Collateral is
removed therefrom, whichever first occurs, without any obligation to pay such
Grantor for such use and occupancy.
8.7 Dispositions Not Authorized. No Grantor is authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 4.1.6 and
notwithstanding any course of dealing between any Grantor and the Agent or other
conduct of the Agent, no authorization to sell or otherwise dispose of the
Collateral (except as set forth in Section 4.1.6) shall be binding upon the
Agent, the Co-Agents, the Banks, any L/C Providers or any Interest Rate
Providers unless such authorization is in writing signed by the Agent with the
consent of the Required Banks.
8.8 Definition of Certain Terms. Terms defined in the Illinois Uniform
Commercial Code which are not otherwise defined in this Subsidiary Security
Agreement are used in this Subsidiary Security Agreement as defined in the
Illinois Commercial Code as in effect on the date hereof.
8.9 Benefit of Agreement. The terms and provisions of this Subsidiary
Security Agreement shall be binding upon and inure to the benefit of the
Grantors, the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers and their respective successors and assigns, except that
no Grantor shall have the right to assign its rights under this Subsidiary
Security Agreement or any interest herein, without the prior written consent of
the Agent.
8.10 Survival of Representations. All representations and warranties of
the Grantors contained in this Subsidiary Security Agreement shall survive the
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execution and delivery of this Subsidiary Security Agreement.
8.11 Taxes and Expenses. Any Taxes payable or ruled payable by Federal
or State authority in respect of this Subsidiary Security Agreement shall be
paid by the Grantors, together with interest and penalties, if any, other than
those Taxes expressly excluded under Section 3.2(a)(i) and 3.2(a)(ii) of the
Credit Agreement. The Grantors shall reimburse the Agent for any and all
reasonable out-of-pocket expenses and internal charges customarily charged by
the Agent (including reasonable attorneys', auditors' and accountants' fees and
reasonable time charges of attorneys, paralegals, auditors and accountants who
may be employees of the Agent) paid or incurred by the Agent in connection with
the preparation, execution, delivery, administration, collection and enforcement
of this Subsidiary Security Agreement and in the audit, analysis,
administration, collection, preservation or sale of the Collateral (including
the expenses and charges associated with any periodic or special audit of the
Collateral).
8.12 Headings. The title of and section headings in this Subsidiary
Security Agreement are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this Subsidiary
Security Agreement.
8.13 Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Obligations or
commitments therefor outstanding) until (i) the Agent has received written
notice of its termination from the Company or its agents or the Liens in favor
of the Agent have been released, (ii) no Obligations to the Agent, the
Co-Agents, the Banks, any L/C Providers or any Interest Rate Providers shall be
outstanding and (iii) the Commitments shall have been terminated. At such time,
at the
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reasonable request and at the sole expense of the Company, the Agent shall
execute and deliver such documents and instruments as may be necessary to
evidence such termination and release.
8.14 Entire Agreement. This Security Agreement embodies the entire
agreement and understanding between the Grantors and the Agent relating to the
Collateral and supersedes all prior agreements and understandings between the
Grantors and the Agent relating to the Collateral.
8.15 CHOICE OF LAW; CONSENT TO JURISDICTION. THIS SUBSIDIARY SECURITY
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS. EACH GRANTOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS SUBSIDIARY SECURITY AGREEMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT.
8.16 Distribution of Reports. Each Grantor authorizes the Agent, as the
Agent may elect in its sole discretion, to discuss with and furnish to the
Co-Agents, the Banks, any L/C Providers, any Interest Rate Providers or to any
other person or entity having an interest in the Obligations (whether as a
guarantor, pledgor of collateral, participant or otherwise) all financial
statements, audit reports and other information pertaining to such Grantor
whether such information was provided by such Grantor or prepared or obtained by
the Agent provided that such other person or entity agrees to hold such
information in confidence except for disclosure: (i) to legal counsel,
accountants and other professional advisors to such purchaser, (ii) to
regulatory officials, (iii) as required by law, regulation or legal process or
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(iv) in connection with any legal proceeding to which such person or entity is a
party. Neither the Agent nor any of its employees, officers, directors or agents
makes any representation or warranty regarding any audit reports or other
analyses of any Grantor's condition which the Agent may in its sole discretion
prepare and elect to distribute, nor shall the Agent or any of its employees,
officers, directors or agents be liable to any person or entity receiving a copy
of such reports or analyses for any inaccuracy or omission contained in or
relating thereto.
8.17 Indemnity. Each Grantor hereby agrees to assume liability for, and
does hereby agree to indemnify and keep harmless the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers, and their respective
successors, assigns, agents and employees, from and against any and all
liabilities, damages, penalties, suits, costs, and expenses of any kind and
nature, imposed on, incurred by or asserted against the Agent, the Co-Agents,
the Banks, any L/C Providers or any Interest Rate Providers, or their respective
successors, assigns, agents and employees, in any way relating to or arising out
of this Subsidiary Security Agreement, or the manufacture, purchase, acceptance,
rejection, ownership, delivery, lease, possession, use, operation, condition,
sale, return or other disposition of any Collateral (including, without
limitation, latent and other defects, whether or not discoverable by the Agent,
the Co-Agents, the Banks, any L/C Providers or any Interest Rate Providers or
any Grantor, and any claim for patent, trademark or copyright infringement),
excluding any such losses, claims, damages, penalties, judgments, liabilities,
costs and expenses which result from the gross negligence or willful misconduct
of the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider.
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8.18 Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary, this
Subsidiary Security Agreement, the other Loan Documents and the transactions
contemplated hereby and thereby (i) do not and will not constitute, create, or
have the effect of constituting or creating, directly or indirectly, actual or
practical ownership of any Grantor by the Agent, the Co-Agents, the Banks, any
L/C Providers or any Interest Rate Providers, or control, affirmative or
negative, direct or indirect, by the Agent, the Co-Agents, the Banks, any L/C
Providers or any Interest Rate Providers over the management or any other aspect
of the operation of any Grantor, which ownership and control remains exclusively
and at all times in the Company and such Grantor, and (ii) except for the grant
of a security interest hereunder to the extent permitted by law, do not and will
not constitute the transfer, assignment, or disposition in any manner,
voluntarily or involuntarily, directly or indirectly, of any license at any time
issued by the FCC to any Grantor ("License"), or the transfer of control of any
Grantor within the meaning of Section 310 of the Communications Act of 1934, as
amended.
(b) Notwithstanding any other provision of this Subsidiary
Security Agreement, any foreclosure on, sale, transfer or other disposition of,
or the exercise of any right to vote or consent with respect to, any of the
Collateral as provided herein or any other action taken or proposed to be taken
by the Agent, the Co- Agents, the Banks, any L/C Providers and any Interest Rate
Providers hereunder which would affect the operational, voting, or other control
of any Grantor, shall be pursuant to Section 310 of the Communications Act of
1934, as amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
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(c) Subject to Section 8.18(e), if a Default or a L/C Default
shall have occurred and be continuing, each Grantor shall take any action which
the Agent, on behalf of the Agent, the Co-Agents, the Banks, any L/C Providers
and any Interest Rate Providers may reasonably request in order to transfer and
assign to the Agent, or to such one or more third parties as the Agent may
designate, or to a combination of the foregoing, each License. To enforce the
provisions of this Section 8.18 the Agent is empowered to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver shall be instructed to seek from the FCC an involuntary transfer of
control of each such License for the purpose of seeking a bona fide purchaser to
whom control will ultimately be transferred. Each Grantor hereby agrees to
authorize such an involuntary transfer of control upon the request of the
receiver so appointed and, if any Grantor shall refuse to authorize the
transfer, such Grantor's approval may be required by the court. Upon the
occurrence and continuance of a Default or a L/C Default, each Grantor shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Subsidiary
Security Agreement including, without limitation, the preparation, execution and
filing with the FCC of the assignor's or transferor's portion of any application
or applications for consent to the assignment of any License or transfer of
control necessary or appropriate under the FCC's rules and regulations for
approval of the transfer or assignment of any portion of the Collateral,
together with any License.
(d) Each Grantor acknowledges that the assignment or transfer of
each License is integral to the Agent's, the Co-Agents', the Banks', any L/C
Provider's and any Interest Rate Provider's realization of the value of the
Collateral, that there is no adequate remedy at law for failure by such Grantor
to comply with the provi-
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sions of this Section 8.18 and that such failure would not be adequately
compensable in damages, and therefore agrees that the agreements contained in
this Section 8.18 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Subsidiary Security Agreement or in any other Transaction Document, neither the
Agent, any Co-Agent, any Bank, any L/C Provider nor any Interest Rate Provider
shall, without first obtaining the approval of the FCC, take any action pursuant
to this Subsidiary Security Agreement which would constitute or result in any
assignment of a License or any change of control of any License or any Grantor
if such assignment or change in control would require, under then existing law
(including the written rules and regulations promulgated by the FCC), the prior
approval of the FCC.
8.19 Insurance Proceeds. Subject to the provisions set forth in Section
6.18 of the Credit Agreement, so long as no Default, Unmatured Default or L/C
Default has occurred and is continuing or is reasonably anticipated to occur,
insurance proceeds received in respect of Inventory, Equipment and Fixtures
shall be remitted to the Grantor pledging such Collateral by the Agent, provided
that such proceeds are used to rebuild, repair or restore such Inventory,
Equipment or Fixtures to a condition at least as good as its former condition or
to replace such Inventory, Equipment or Fixture with like property of at least
equal value.
8.20 Actions Not Releases; Waiver of Defenses. The lien hereunder and
the Grantors' obligations and the Agent's, the Co-Agents', the Banks', any L/C
Provider's and any Interest Rate Provider's rights hereunder shall not be
released, diminished, impaired, or adversely affected by the occurrence of any
one or more of the following events: (i) the taking or accepting of any other
security or assurance at any time existing in connection with any or all of the
Obligations; (ii) any release, surrender, exchange, subordination or loss of any
security or assurance at any time existing in
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connection with any or all of the Obligations; (iii) the modification of,
amendment to, or waiver or compliance with any terms of any Loan Document; (iv)
the insolvency, bankruptcy, or lack of corporate power of any party at any time
liable for the payment of any or all of the Obligations, whether now existing or
hereafter occurring; (v) any renewal, extension, or rearrangement of the payment
of any or all of the Obligations, either with or without notice to or consent of
any Grantor in accordance with any Loan Document, or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by the Agent, any
Co-Agent, any Bank or any Interest Rate Provider to any Grantor or the Company;
(vi) any neglect, delay, omission, failure, or refusal of the Agent, any
Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider to take or
prosecute any action in connection with any other agreement, document, guaranty,
or instrument evidencing, securing, or assuring the payment of all or any of the
Obligations; (vii) any failure of the Agent, any Co-Agent, any Bank, any L/C
Provider or any Interest Rate Provider to notify any Grantor of any renewal,
extension, or assignment of the Obligations or any part thereof, or the release
of any security, or of any other action taken or refrained from being taken by
the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider against the Company or any Grantor or any new agreement among the
Agent, any Co- Agent, any Bank, any L/C Provider, any Interest Rate Provider and
any Grantor (or any combination thereof), it being understood that neither the
Agent, any Co-Agent, any Bank, any L/C Provider nor any Interest Rate Provider
shall be required to give any Grantor any notice of any kind under any
circumstances whatsoever, except as required under applicable law, with respect
to or in connection with the Obligations, including, without limitation, notice
of acceptance of this Subsidiary Security
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Agreement or any Collateral ever delivered to or for the account of the Banks
hereunder; (viii) the illegality, invalidity, or unenforceability of all or any
part of the Obligations against any party obligated with respect thereto by
reason of the fact that the Obligations, or the interest paid or payable with
respect thereto, exceeds the amount permitted by law, the act of creating the
Obligations, or any part thereof, is ultra vires, or the officers creating same
acted in excess of their authority, or for any other reason; or (ix) any payment
by any party obligated with respect thereto is held to constitute a preference
under applicable laws or for any other reason the Agent, any Co-Agent, any Bank,
any L/C Provider or any Interest Rate Provider is required to refund such
payment or pay the amount thereof to someone else. Each Grantor expressly waives
any and all defenses now or hereafter arising or asserted by reason of (i) any
disability or other defense of any of the Company or any other Grantor with
respect to the Obligations, (ii) the unenforceability or invalidity of any
security or guaranty for the Obligations or the lack of perfection or continuing
perfection or failure of priority of any security for the Obligations, (iii) the
cessation for any cause whatsoever of the liability of any of the Company or any
other Grantor (other than by reason of the full payment and performance of all
Obligations), (iv) any failure of the Agent to marshal assets in favor of any
Grantor or any other Person, (v) any failure of the Agent to give notice of sale
or other disposition to any Grantor or any defect in any notice that may be
given in connection with any sale or disposition, (vi) any act or omission of
the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider or others that directly or indirectly results in or aids the discharge
or release of any of the Company or any other Grantor or the Obligations or any
other security or guaranty therefor by operation of law or otherwise, (vii) any
law which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects
32
<PAGE> 33
more burdensome than that of the principal or which reduces a surety's or
guarantor's obligation in proportion to the principal obligations, or (viii) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, any Grantor, all whether or not any Grantor shall have had notice
or knowledge of any act or omission referred to in the foregoing clauses (i)
through (viii) of this paragraph. Each Grantor expressly waives all setoffs and
counterclaims and all presentments, demands for payment or performance, notices
of nonpayment or nonperformance, protests, notices of protest, notices of
dishonor and all other notices or demands of any kind or nature whatsoever with
respect to the Obligations, and all notices of acceptance of this Security
Agreement or of the existence, creation or incurring of new or additional
Obligations.
8.21 Waiver of Subrogation. Each Grantor hereby irrevocably waives any
claim or other rights which it may now or hereafter acquire against the Company
or any other Grantor that arise from the existence, payment, performance or
enforcement of such Grantor's obligations under this Security Agreement or any
other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or remedy
of the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider against the Company or any other Grantor or any collateral which the
Agent now has or hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including the right
to take or receive from the Company or any other Grantor, directly or
indirectly, in cash or other property or by set-off or in any manner, payment or
security on account of such claim or other rights. If any amount shall be paid
to any Grantor in violation of the preceding sentence and the Obligations shall
not have been paid in cash in full and the Commitments have not been terminated,
such amount shall be deemed to have been paid to such
33
<PAGE> 34
Grantor for the benefit of, and held in trust for, the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers, and shall forthwith be
paid to the Agent to be credited and applied upon the Obligations, whether
matured or unmatured. Each Grantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
8.22 Grantors Remain Liable. Anything herein to the contrary
notwithstanding,
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein and shall
perform all of its duties and obligations under such contracts and agreements to
the same extent as if this Security Agreement had not been executed,
(b) the exercise by the Agent of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under any such
contracts or agreements included in the Collateral, and
(c) neither the Agent, any Co-Agent, any Bank, any L/C Provider
nor any Interest Rate Provider shall have any obligation or liability under any
such contracts or agreements included in the Collateral by reason of this
Security Agreement, nor shall the Agent, any Co-Agent, any Bank, any L/C
Provider or any Interest Rate Provider be obligated to perform any of the
obligations or collect or enforce any claim for payment assigned hereunder.
9. NOTICES; COUNTERPARTS; ETC.
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<PAGE> 35
9.1 Sending Notices. Any notice required or permitted to be given under
this Subsidiary Agreement shall be in writing and may be, and shall be deemed,
given, if mailed, three days after the date when deposited in the United States
mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by personal delivery
or by telecopy, when received, addressed to each Grantor at the address set
forth on Exhibit "A" hereto as its chief executive office (with copies to Sheli
J. Rosenberg, Esq., Rosenberg & Liebentritt, 2 North Riverside Plaza, Suite 600,
Chicago, Illinois 60606, provided, however, that the failure to provide any such
copy shall not affect the validity or sufficiency of any such notice), to the
Agent at the address indicated below its signature hereto, to the Co-Agents and
the Banks at the addresses indicated below their respective signatures to the
Credit Agreement, to any L/C Providers at the addresses provided to the Company
and the Agent in writing by such L/C Providers and to any Interest Rate
Providers at the addresses provided to the Company and the Agent in writing by
such Interest Rate Providers.
9.2 Change in Address for Notices. Each Grantor, the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers may
change the address for service of notice upon it by a notice in writing to the
other parties.
9.3 Counterparts. This Security Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Subsidiary Security Agreement by
signing any such counterpart. This Security Agreement shall be effective when it
has been executed by each Grantor and the Agent.
9.4 Loan Document. This Security Agreement is a Loan Document executed
pursuant to the Credit Agreement
35
<PAGE> 36
and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.
9.5 Amendments; etc. No amendment to or waiver of any provision of this
Security Agreement, nor consent to any departure by any Grantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Agent, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
9.6 Joinder. Any other Person may become a Grantor under and become
bound by the terms and provisions hereof by executing and delivering to the
Agent a counterpart signature page hereto substantially in the form of Appendix
I hereto.
9.7 WAIVER OF JURY TRIAL. THE AGENT AND EACH GRANTOR HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS SECURITY AGREEMENT. EACH GRANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT, THE CO-AGENTS, THE
BANKS, ANY L/C PROVIDERS AND ANY INTEREST RATE PROVIDERS ENTERING INTO THE
CREDIT AGREEMENT, THE CITICASTERS L/C DOCUMENTS AND ANY RATE HEDGING AGREEMENTS,
RESPECTIVELY.
10. THE AGENT.
Banque Paribas has been appointed Agent of the Co-Agents, the Banks,
the L/C Providers and the Interest Rate Providers hereunder pursuant to Article
X of the Credit Agreement, and the Agent has agreed to act (and any successor
Agent shall act) as such hereunder only on the express conditions contained in
such Article X. Any
36
<PAGE> 37
successor Agent appointed pursuant to Article X of the Credit Agreement shall be
entitled to all the rights, interests and benefits of the Agent hereunder.
37
<PAGE> 38
IN WITNESS WHEREOF, the undersigned have executed this Subsidiary
Security Agreement as of the date first above written.
JACOR BROADCASTING OF FLORIDA, INC.
By:
-----------------------------------
Name:
Title:
JACOR BROADCASTING OF ATLANTA, INC.
By:
-----------------------------------
Name:
Title:
JACOR BROADCASTING OF KNOXVILLE, INC.
By:
-----------------------------------
Name:
Title:
JACOR BROADCASTING OF COLORADO, INC.
By:
-----------------------------------
Name:
Title:
38
<PAGE> 39
JACOR BROADCASTING OF TAMPA BAY, INC.
By:
----------------------------------
Name:
Title:
JACOR BROADCASTING OF ST. LOUIS, INC.
By:
----------------------------------
Name:
Title:
JACOR CABLE, INC.
By:
----------------------------------
Name:
Title:
GEORGIA NETWORK EQUIPMENT, INC.
By:
----------------------------------
Name:
Title:
JACOR BROADCASTING CORPORATION
By:
----------------------------------
39
<PAGE> 40
Name:
Title:
40
<PAGE> 41
BROADCAST FINANCE, INC.
By:
----------------------------------
Name:
Title:
CHESAPEAKE SECURITIES, INC.
By:
----------------------------------
Name:
Title:
OIA BROADCASTING L.L.C.
By:
----------------------------------
Name:
Title:
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: Mr. Terry Jacobs
BANQUE PARIBAS, as Agent
By:
----------------------------------
Name:
Title:
41
<PAGE> 42
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
42
<PAGE> 43
Appendix I to Subsidiary Security Agreement
[Form of Counterpart Signature Page to
Subsidiary Security Agreement]
By signing below, [each of] the undersigned becomes a Grantor under the
Subsidiary Security Agreement dated as of February , 1996, to which this
signature page is attached and is made a part, and is bound by the terms
thereof.
[Grantor]
Date: By:
--------------------- ------------------------
Name:
Title:
[Grantor]
Date: By:
--------------------- ------------------------
Name:
Title:
<PAGE> 1
CHESAPEAKE SECURITIES, INC.
PRIMARY PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (the "Primary Pledge Agreement") is executed as
of February ___, 1996, by and between Chesapeake Securities, Inc. (the
"Company") and Banque Paribas, as agent (the "Agent") for itself, the Co-Agents
and the Banks under the Credit Agreement referred to hereafter, any L/C
Providers (as defined in the Credit Agreement) and any Interest Rate Providers
(as defined in the Credit Agreement).
W I T N E S S E T H:
WHEREAS, Jacor Communications, Inc. ("Jacor") is entering into that
certain Credit Agreement dated as of the date hereof with the Banks (as defined
therein), the Co-Agents (as defined therein) and the Agent (as modified,
supplemented, amended, extended, supplemented or restated from time to time, the
"Credit Agreement");
WHEREAS, the Credit Agreement requires Jacor to enter into certain Rate
Hedging Agreements (as defined in the Credit Agreement) with Interest Rate
Providers;
WHEREAS, the Company is a wholly-owned subsidiary of Jacor;
WHEREAS, the Company expects to realize substantial direct and indirect
benefits as a result of Jacor entering into the Credit Agreement and the Rate
Hedging Agreements; and
<PAGE> 2
WHEREAS, execution and delivery of this Primary Pledge Agreement is a
condition precedent to the availability of credit under the Credit Agreement;
NOW THEREFORE, in consideration of the foregoing and of the direct and
indirect benefits to be received by the Company, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement. The following term shall have the following meaning:
"Obligations" means, as to each Guarantor, all obligations of such
Guarantor under the Subsidiary Guaranty executed by such Guarantor including,
without limitation, all obligations of such Guarantor pursuant to Section 1 of
such Subsidiary Guaranty.
2. Pledge and Security Interest; Deposit of Certificates for Pledged
Stock.
(a) Pledge and Security Interest. In order to secure the full and
complete payment and performance of the Obligations when due, the Company hereby
pledges and grants to the Agent for the benefit of the Agent, the Co-Agents, the
Banks, any L/C Providers and the Interest Rate Providers, equally and ratably in
proportion to the total Obligations owing at any time to the Agent, the
Co-Agents, the Banks, any L/C Providers and the Interest Rate Providers, a
continuing lien and security interest in (a) all of the outstanding shares of
capital stock of each Subsidiary of the Company currently or hereafter owned by
the Company (the "Pledged Stock"), (b) any securities, dividends or other
distributions and any other right or property at any time in respect of or in
exchange for any or all of the Pledged Stock and any
2
<PAGE> 3
other property substituted or exchanged therefor and (c) any and all proceeds
(including, without limitation, "Proceeds" as defined in the Uniform Commercial
Code as in effect from time to time in the State of Illinois) of, and
substitutions and replacements for, the foregoing (all of the property and
rights described in the foregoing clauses (a) through (c) being herein
collectively called the "Collateral");
(b) The Company shall deliver to the Agent concurrently with the
execution of this Primary Pledge Agreement the certificates representing the
Pledged Stock, endorsed in blank or accompanied by appropriate instruments of
transfer or assignments in blank, for the equal and ratable benefit of the
Agent, the Co- Agents, the Banks, any L/C Providers and the Interest Rate
Providers. The Agent shall not have any duty to assure that all certificates
representing the Pledged Stock have been delivered to it or any obligation
whatsoever with respect to the care, custody or protection of any certificates
which may be delivered to it except only to exercise the same care in physically
safekeeping such certificates as it would exercise in the ordinary course of its
own business. Neither the Agent, any Co-Agent, any Bank, any L/C Provider nor
any Interest Rate Provider shall be obligated to preserve or protect any rights
with respect to the Pledged Stock or to receive or give any notice with respect
thereto whether or not the Agent, any Co-Agent, any Bank, any L/C Provider or
any Interest Rate Provider is deemed to have knowledge of such matters.
3. Representations and Warranties. The Company represents and warrants
to the Agent, each Co-Agent, each Bank, each L/C Provider and each Interest Rate
Provider as of the date of each pledge and delivery hereunder that:
(a) Existence and Standing. As of the date hereof, the Company is
duly incorporated, validly
3
<PAGE> 4
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
(b) Authorization, Validity and Enforce- ability. The execution and
delivery by the Company of this Primary Pledge Agreement have been duly
authorized by proper corporate proceedings, and this Primary Pledge Agreement
constitutes a legal, valid and binding obligation of the Company and creates a
security interest which is enforceable against the Company in accordance with
its terms in respect of all now owned and hereafter acquired Collateral, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity. All of the shares of the Pledged Stock are duly
authorized, validly issued, fully paid and non-assessable.
(c) Transferability of Pledged Stock; Title Matters. The Pledged
Stock is free and clear of all liens, options, warrants, puts, calls, or other
rights of third persons, and restrictions, other than (i) those liens arising
under this Primary Pledge Agreement, and (ii) restrictions on transferability
imposed by applicable state and Federal securities laws or which may arise as a
result of the Company being subject to the Communications Act of 1934, as
amended, and the rules and regulations of the FCC thereunder. The Company agrees
to warrant and defend title to and ownership of the Pledged Stock and the lien
created by this Primary Pledge Agreement against the claims of all Persons and
maintain and preserve such lien at all times during the terms of this Primary
Pledge Agreement. Upon the delivery to the Agent of the Pledged Stock the
security interest in the Pledged Stock granted to the Agent hereunder will
constitute a perfected security interest therein superior and prior to
4
<PAGE> 5
all Liens other than Liens permitted by Section 6.17 of the Credit Agreement.
(d) Ownership of Pledged Stock. The Company is the holder of record
and the sole beneficial owner of 100% of the issued and outstanding voting
capital of each Subsidiary of the Company.
(e) Title and Power to Pledge the Pledged Stock. The Company has
good and marketable title to the Pledged Stock and has all requisite rights,
power, and authority to execute, deliver and comply with the terms of this
Primary Pledge Agreement and to pledge and deliver the Collateral to the Agent
pursuant hereto. Except as provided in Section 5.3 of the Credit Agreement, no
material authorization, consent or approval of, and no notice to or filing with,
any person or government agency (other than as specified in Section 6 hereof) is
required in connection with the execution, delivery and performance of this
Primary Pledge Agreement which has not been obtained.
4. Covenants. So long as any Obligations remain outstanding, the
Company covenants and agrees with the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest Rate Providers as follows:
(a) Pledge and Additional Stock. If the Company shall at any time
acquire any additional shares of the capital stock of any class of the Pledged
Stock of any Subsidiary of the Company, whether such acquisition shall be by
purchase, exchange, reclassification, dividend, or otherwise, the Company shall,
to the extent doing so would not violate applicable law, forthwith (and without
the necessity for any request or demand by the Agent, any Co-Agent, any Bank,
any L/C Provider or any Interest Rate Provider) deliver the certificates
representing such shares to the Agent, in the same manner as described in
Section 2 hereof.
5
<PAGE> 6
(b) Applications, Approval and Consents. The Company will, at its
expense, promptly execute and deliver, or cause the execution and delivery of,
all applications, certificates, instruments, registration statements, and all
other documents and papers the Agent may reasonably request in connection with
the obtaining of any consent, approval, registration, qualification, or
authorization of the FCC or of any other Person necessary or appropriate for the
effective exercise of any rights under this Primary Pledge Agreement. Without
limiting the generality of the foregoing, the Company agrees that in the event
the Agent on behalf of the Agent, the Co- Agents, the Banks, any L/C Provider
and any Interest Rate Providers shall exercise its right to sell, transfer, or
otherwise dispose of or take any other action in connection with any of the
Collateral pursuant to this Primary Pledge Agreement, the Company shall execute
and deliver all applications, certificates, and other documents the Agent may
reasonably request and shall otherwise promptly, fully, and diligently cooperate
with the Agent and any other necessary Persons, in making any application for
the prior consent or approval of the FCC or any other Person to the exercise by
the Agent, the Co-Agents, the Banks, any L/C Provider or any Interest Rate
Providers of any of such rights relating to all or any part of the Collateral.
Furthermore, because the Company agrees that the Agent's, the Co-Agents', the
Banks', each L/C Provid- er's and each Interest Rate Provider's remedy at law
for failure of the Company to comply with the provisions of this Section 4(b)
would be inadequate and that such failure would not be adequately compensable in
damages, the Company agrees that the covenants of this Section 4(b) may be
specifically enforced.
(c) Security Interest and Lien. Except as otherwise permitted by the
terms of the Credit Agreement, the Company will preserve, warrant, and defend
the lien created hereby in the Collateral against the claims
6
<PAGE> 7
of all Persons whomsoever; will not at any time sell, assign, transfer or
otherwise dispose of its right, title and interest in and to any of the
Collateral; will not at any time, directly or indirectly, create, assume, or
suffer to exist any lien, warrant, put, option, or other rights of third Persons
and restrictions, other than the liens created by this Primary Pledge Agreement,
in and to the Collateral or any part thereof; and will not do or suffer any
matter or thing whereby the lien created by this Primary Pledge Agreement in and
to the Collateral might or could be impaired.
(d) Further Assurances. The Company, at its expense, shall from time
to time execute and deliver to the Agent all such other assignments,
certificates, supplemental documents, and financing statements, and shall do all
other acts or things as the Agent may reasonably request in order to more fully
create, evidence, perfect, continue, and preserve the priority of the lien
herein created or to otherwise obtain the full benefits of this Primary Pledge
Agreement.
(e) Indebtedness; etc. The Company will not permit any Subsidiary of
the Company to incur any Indebtedness or permit any Liens (other than under the
Subsidiary Security Agreement, dated as of the date hereof, as amended) to exist
in respect of any such Subsidiary's assets except as permitted by the Credit
Agreement.
5. Rights of Company, Agent, Co-Agents, the Banks, any L/C Providers
and any Interest Rate Providers.
(a) Exercise of Stockholder Rights.
(i) Subject to the provisions of Section 6 hereof, unless and
until a Default shall occur and be continuing or a default under any of the
L/C
7
<PAGE> 8
Documents shall occur and be continuing, the Company shall be entitled to
receive all cash dividends or other distributions on the Pledged Stock (if
and to the extent such dividends or distributions are permitted by the
terms of the Credit Agreement) except (A) distributions made in capital
stock on the Pledged Stock resulting from stock dividends on or
subdivision, combination, or re- classification or the outstanding capital
stock or any corporation; and (B) all sums paid on any Pledged Stock upon
liquidation or dissolution or reduction of capital, repurchase, retirement,
or redemption. All such sums, dividends, distributions, proceeds, or
property described in the immediately preceding clauses (A) and (B) shall,
if received by any Person other than the Agent, be held in trust for the
benefit of the Agent, Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers and shall forthwith be delivered to the Agent for
the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers (accompanied by proper instruments or
assignment and/or stock and/or bond powers executed by the Company in
accordance with the Agent's instructions) to be held subject to the terms
of this Primary Pled-
8
<PAGE> 9
ge Agreement. Upon the occurrence of a Default, the Agent, for the benefit
of the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest
Rate Providers, shall be entitled to receive all payments of whatever kind
made upon or with respect to any Collateral. The relative rights of the
Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers to receive such payments shall be in proportion to the relative
amounts of all Obligations owing to the Agent, any Co-Agent, any Bank, any
L/C Provider and any Interest Rate Provider and the aggregate amount of all
Obligations then outstanding.
(ii) Unless a Default has occurred and is continuing or unless a
default under the Citicasters L/C Documents has occurred and is continuing,
the Company shall have the sole and exclusive right to vote and give
consents with respect to all the Collateral and to consent to, ratify, or
waive notice of any and all meetings. Upon the occurrence and during the
continuance of a Default or a default under any of the Citicasters L/C
Documents, subject to compliance with applicable law, and in the case of a
default under any of the Citicasters L/C Documents, subject to any
9
<PAGE> 10
intercreditor agreement in effect from time to time, the Agent, on behalf
of the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest
Rate Providers, shall have, subject to Section 6 hereof, the right, (A) to
consent in advance to any vote proposed to be cast by the Company with
respect to any merger, consolidation, liquidation or reorganization of any
Subsidiary (but in no event with respect to any election of directors) and,
in connection therewith, to join in and become a party to any plan of
recapitalization, reorganization, or readjustment (whether voluntary or
involuntary) as shall seem desirable to the Agent, on behalf of the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers, to protect or further their interests in respect of the
Collateral, (B) to deposit the Collateral under any such plan, and (C) to
make any exchange, substitution, cancellation, or surrender of the
Collateral required by any such plan and to take such action with respect
to the Collateral as may be required by any plan or for the accomplishment
thereof; and no such disposition, exchange, substitution, cancellation, or
surrender shall be deemed to constitute a release of the Col-
10
<PAGE> 11
lateral from the lien of this Primary Pledge Agreement.
(b) Right of Sale after Default. Upon the occurrence and during the
continuance of a Default or a default under any of the Citicasters L/C
Documents, subject to compliance with applicable law, and in the case of a
default under any of the Citicasters L/C Documents, subject to any intercreditor
agreement in effect from time to time, the Agent, on behalf of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers, may,
subject to Section 6 hereof, sell, without recourse to judicial proceedings,
with the right to bid for and buy, the Collateral or any part thereof, upon ten
days' notice (which notice is agreed to be reasonable notice for the purposes
hereof) to the Company of the time and place of sale, for cash, upon credit or
for future delivery, at the Banks' option and in the Banks' complete discretion
in the case of a Default, or at the L/C Providers' option and in the L/C
Providers' complete discretion in the case of a default under any of the
Citicasters L/C Documents:
(i) At public sale, including a sale at any broker's board or
exchange;
(ii) At private sale in any commercially reasonable manner which
will not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder, or any other law or regulation. Each of
the Agent, the Co- Agents, the Banks, the Interest Rate Providers and the
L/C Providers are also hereby authorized, but not obligated, to take such
actions, give
11
<PAGE> 12
such notices, obtain such consents, and do such other things as they may
deem required or appropriate in the event of sale or disposition of any of
the Collateral, and the Company agrees that neither the Agent, any
Co-Agent, any Bank, any L/C Provider nor any Interest Rate Provider shall
be liable or accountable to the Company for any discount allowed by reason
of the fact that such Collateral is sold in compliance with any applicable
limitation or restriction of any governmental regulatory authority or
official. The Company understands that the Agent, on behalf of the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers, may in its discretion approach a restricted number of potential
purchasers and that sale under such circumstances may yield a lower price
for the Collateral, or any portion thereof, than would otherwise be
obtainable if the same were registered and sold in the open market. The
Company agrees that in the event the Agent shall so sell the Collateral, or
any portion thereof, at such private sale or sales, the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers
shall have the right to rely upon the advice and opinion of any Person who
regularly deals
12
<PAGE> 13
in or evaluates stock of the type constituting the Collateral as to the
price obtainable in a commercially reasonable manner upon such a private
sale thereof.
In the case of any sale by the Agent on behalf of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers of
the Collateral on credit or for future delivery, the Collateral sold may be
retained by the Agent until the selling price is paid by the purchaser, but
neither the Agent, any Co- Agent, any Bank, any L/C Provider nor any
Interest Rate Provider shall incur liability in case of failure of the
purchaser to take up and pay for the Collateral so sold.
In connection with the sale of any of the Collateral, the Agent,
the Co-Agents, the Banks and the L/C Providers are authorized, but not
obligated, to limit prospective purchasers to the extent deemed necessary
or desirable by the Agent, the Co-Agents, the Banks and the L/C Providers
to render such sale exempt from the registration requirements of the
Securities Act of 1933, as amended, and any applicable state securities
laws. In the event that, in the opinion of the Agent, the Co-Agents, the
Banks and the L/C Providers, it is necessary or advisable to have such
securities registered under the provisions of such Act, or any similar law
relating to the registration of securities, the Company agrees, at its own
expense, to (i) execute and deliver all such instruments and documents, and
to do or cause to be done such other acts and things, as may be necessary
or, in the opinion of the Agent, advisable, to register such securities
under the provisions of such Act or any applicable similar law relating to
the registration of securities, and the Company will use its best efforts
to cause the registration statement relating thereto to become effective
and to remain effective for such period as the Agent shall reasonably
request, and to make all amendments
13
<PAGE> 14
thereof and/or to the related prospectus which, in the opinion of the
Agent, are necessary or desirable, all in conformity with the requirements
of such Act and the rules and regulations of the Securities and Exchange
Commission applicable thereto; (ii) use its best efforts to qualify such
securities under state "blue sky" or securities laws, all as reasonably
requested by the Agent; (iii) at the request of the Agent, indemnify and
hold harmless the Banks, the Co-Agents, the Agent, any L/C Providers, any
Interest Rate Provider and any underwriters (and employees, officers,
agents, attorneys and accountants (collectively, the "Indemnified
Parties")) from and against any loss, liability, claim, damage, and expense
(including, without limitation, reasonable fees of counsel incurred in
connection therewith) under such Act or otherwise, insofar as such loss,
liability, claim, damage, or expense arises out of or is based upon any
untrue statement or alleged untrue statement of any material fact furnished
by the Company contained in any registration statement under which such
securities were registered under such Act or other securities laws, any
preliminary prospectus or final prospectus contained therein, or arise out
of or are based upon any omission or alleged omission by the Company to
state therein a material fact required to be stated or necessary to make
the statements therein not misleading, such indemnification to remain
operative regardless of any investigation made by or on behalf of any
Indemnified Party; provided, however, that the Company shall not be liable
in any case to the extent that any such loss, liability, claim, damage, or
expense arises out of or is based upon an untrue statement or alleged
untrue statement or an omission or an alleged omission made in reliance
upon and in conformity with written information furnished to the Company by
an Indemnified Party specifically for use in such registration statement or
preliminary or final prospectus; (iv) cause each such issuer to make
available to its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of
14
<PAGE> 15
Section 11(a) of such Act; and (v) do or cause to be done all such other
acts and things as may be necessary to make such sale of the Collateral or
any part thereof valid and binding and in compliance with applicable law.
(c) Other Rights after a Default. Sub- ject to Section 6 hereof, upon
the occurrence and during the continuance of a Default or a default under any of
the Citicasters L/C Documents (and in the case of such a default, subject to any
intercreditor agreement in effect from time to time), the Agent, on behalf of
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers may exercise any and all rights available to secured parties under the
Uniform Commercial Code as enacted in the State of Illinois or other applicable
jurisdiction, as amended, in addition to any and all other rights afforded at
law, in equity, or otherwise.
(d) Application of Proceeds. The Agent shall apply the proceeds of the
Collateral, including the proceeds of any sales of other disposition of the
Collateral, or any part thereof, under this Section 5, in the following order
unless a court of competent jurisdiction shall otherwise direct:
(i) FIRST, to payment of all reasonable costs and expenses of
the Agent incurred in connection with the collection and enforcement of the
Obligations or of the security interest granted pursuant to this Primary
Pledge Agreement;
(ii) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other
than principal), pro rata amongst each
15
<PAGE> 16
Bank, the Agent, each Co-Agent and each L/C Provider in accordance with the
proportion which the accrued interest, fees and other amounts (other than
principal) constituting Obligations owing to each such Bank, Agent,
Co-Agent and L/C Provider bears to the aggregate amount of accrued
interest, fees and other amounts (other than principal) constituting
Obligations owing to all of the Banks, the Agent, the Co-Agents and each
L/C Providers;
(iii) THIRD, to payment of the principal of the Obligations
owing to the Banks, any Bank, any L/C Provider or any Interest Rate
Provider, pro rata amongst the Banks, any L/C Providers and any Interest
Rate Providers in accordance with the proportion that the principal of the
Obligations owing to each such Bank, L/C Provider or Interest Rate Provider
bears to the aggregate amount of principal of the Obligations owing to all
of the Banks, any L/C Providers and any Interest Rate Providers; and
(iv) FOURTH, the balance, if any, after all of the Obligations
have been satisfied, shall be remitted to the Company.
(e) Governance. All rights and remedies available to the Agent, the
Co-Agents, the Banks and the L/C Providers with respect to the grant,
foreclosure and enforcement of the security interest and lien granted
16
<PAGE> 17
hereby and with respect to any action permitted hereunder (i) may, in the case
of a Default, be exercised solely by the Agent acting with the concurrence of
the Required Banks and (ii) may, in the case of a default under any of the
Citicasters L/C Documents, subject to any intercreditor agreement in effect from
time to time, be exercised solely by the Agent acting with the concurrence of
the L/C Providers.
6. Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary, this Primary
Pledge Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby (i) do not and will not constitute, create, or have the
effect of constituting or creating, directly or indirectly, actual or practical
ownership of any Subsidiary by the Agent, the Co-Agents, the Banks, any L/C
Providers or any Interest Rate Providers, or control, affirmative or negative,
direct or indirect, by the Agent, the Co-Agents, the Banks, any L/C Providers or
any Interest Rate Providers over the management or any other aspect of the
operation of any Subsidiary, which ownership and control remain exclusively and
at all times in such Subsidiary and the Company, and (ii) do not and will not
constitute the transfer, assignment, or disposition in any manner, voluntarily
or involuntarily, directly or indirectly, of any license at any time issued by
the FCC to any Subsidiary ("License"), or the transfer of control of any such
Subsidiary within the meaning of Section 310 of the Communications Act of 1934,
as amended.
(b) Notwithstanding any other provision of this Primary Pledge
Agreement, any foreclosure on, sale, transfer or other disposition of, or the
exercise of any right to vote or consent with respect to, any of the Collateral
as provided herein or any other action taken or proposed to be taken by the
Agent, the Co- Agents, the Banks, the L/C Providers and the Interest
17
<PAGE> 18
Rate Providers hereunder which would affect the operational, voting, or other
control of any Subsidiary, shall be pursuant to Section 310 of the
Communications Act of 1934, as amended, to any applicable state laws and to the
applicable rules and regulations thereunder and, if and to the extent required
thereby, subject to the prior approval of the FCC.
(c) Subject to Section 6(e) hereof, if a Default shall have occurred
and be continuing or if a default under any of the Citicasters L/C Documents
shall have occurred and be continuing, the Company shall take any action which
the Agent, on behalf of the Agent, the Co-Agents, the Banks, any L/C Providers
and any Interest Rate Providers, may reasonably request in order to transfer and
assign to the Agent, or to such one or more third parties as the Agent may
designate, or to a combination of the foregoing, each License. To enforce the
provisions of this Section 6, the Agent is empowered to request the appointment
of a receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC an involuntary transfer control of each such
License for the purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. The Company hereby agrees to authorize such an
involuntary transfer of control upon the request of the receiver so appointed
and, if the Company shall refuse to authorize the transfer, the Company's
approval may be required by the court. Upon the occurrence and continuance of a
Default or a default under any of the Citicasters L/C Documents, the Company
shall further use its best efforts to assist in obtaining approval of the FCC,
if required, for any action or transactions contemplated by this Primary Pledge
Agreement including, without limitation, the preparation, execution and filing
with the FCC of the assignor's or transferor's portion of any application or
applications for consent to the assignment of any License or transfer of control
necessary or appropriate under the FCC's rules and regulations for
18
<PAGE> 19
approval of the transfer or assignment of any portion of the Collateral,
together with any License.
(d) The Company acknowledges that the assignment or transfer of each
License is integral to the Agent's, the Co-Agents', the Banks', each L/C
Provider's and each Interest Rate Providers' realization of the value of the
Collateral, that there is no adequate remedy at law for failure by the Company
to comply with the provisions of this Section 6 and that such failure would not
be adequately compensable in damages, and therefore agrees that the agreements
contained in this Section 6 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Primary Pledge Agreement or in any other Loan Document, neither the Agent, any
Co-Agent, any Bank, any L/C Provider nor any Interest Rate Provider shall,
without first obtaining the approval of the FCC, take any action pursuant to
this Primary Pledge Agreement which would constitute or result in any assignment
of a License or any change of control of any License or any Subsidiary if such
assignment or change in control would require, under then existing law
(including the written rules and regulations promulgated by the FCC), the prior
approval of the FCC.
7. Miscellaneous.
(a) Term. This Primary Pledge Agreement and the lien arising
hereunder (i) shall become effective as of the date hereof upon the execution
hereof, and (ii) shall continue in force until no Obligations to the Agent, the
Co-Agents, the Banks, any L/C Providers or any Interest Rate Providers shall be
outstanding and the Commitments shall have been terminated. If no Obligations
remain outstanding and the Commitments have been terminated, the Agent, at the
request and sole expense of the Company, shall execute and deliver such
documents and
19
<PAGE> 20
instruments as may be necessary to evidence such termination and release.
(b) Releases; Partial Releases. Any cash dividends received by the
Company in accordance with the terms of Section 5(a)(i) hereof, shall be deemed
released from the lien of this Primary Pledge Agreement and shall be held by the
Company (or any transferee of the Company) free and clear of the lien created by
this Primary Pledge Agreement. Upon termination of this Primary Pledge Agreement
in accordance with the provisions of Section 7(a) hereof, the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers shall,
at the Company's request and expense and subject to the foregoing sentence,
execute such release as the Company may reasonably request, in form and upon
terms acceptable to the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers in all respects, and shall deliver, without any
representations, warranties or recourse of any kind whatsoever (other than the
representation and warranty that such property is free and clear of Liens
created by the Agent, the Co-Agents, the Banks, any L/C Providers or any
Interest Rate Providers), all certificates representing the Pledged Stock and
other property held in respect thereof hereunder which is in the Agent's
possession, together with all stock powers or other instruments of transfer
reasonably required to effect delivery to the Company.
(c) Waivers. Except to the extent ex- pressly otherwise provided
herein or in any Loan Document, the Company waives, to the extent permitted by
applicable law, (i) any right to require either the Agent, any Co-Agent, any
Bank, any L/C Provider or any Interest Rate Provider to proceed against any
other person, to exhaust their rights in any other collateral, or to pursue any
other right which either the Agent, any Co-Agent, any Bank, any L/C Provider or
any Interest Rate Provider may have, (ii) with respect to the Obligations,
20
<PAGE> 21
presentment and demand for payment, protest, notice of protest and non-payment,
and notice of the intention to accelerate, and (iii) all rights of marshalling
in respect of any and all of the Collateral. The Company expressly waives any
and all defenses now or hereafter arising or asserted by reason of (a) any
disability or other defense of any of the Company or any other Person with
respect to the Obligations, (b) the unenforceability or invalidity of any
security or guaranty for the Obligations or the lack of perfection or continuing
perfection or failure of priority of any security for the Obligations, (c) the
cessation for any cause whatsoever of the liability of any of the Company or any
other Person (other than by reason of the full payment and performance of all
Obligations), (d) any failure of the Agent to marshal assets in favor of any
Person, (e) any failure of the Agent to give notice of sale or other disposition
to any Person or any defect in any notice that may be given in connection with
any sale or disposition, (f) any act or omission of the Agent, any Co-Agent, any
Bank, any L/C Provider or any Interest Rate Provider or others that directly or
indirectly results in or aids the discharge or release of any of the Company or
any other Person of the Obligations or any other security or guaranty therefor
by operation of Law or otherwise, (g) any law which provides that the obligation
of a surety or guarantor must neither be larger in amount nor in other respects
more burdensome than that of the principal or which reduces a surety's or
guarantor's obligation in proportion to the principal obligations or (h) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, the Company, whether or not the Company shall have had notice or
knowledge of any act or omission referred to in the foregoing clauses (a)
through (h) of this paragraph. The Company expressly waives all setoffs and
counterclaims and all presentments, demands for payment or performance, notices
of nonpayment or nonperformance, protests, notices of protest, notices of
dishonor and all other notices or de-
21
<PAGE> 22
mands of any kind or nature whatsoever with respect to the Obligations, and all
notices of acceptance of this Primary Pledge Agreement or of the existence,
creation or incurring of new or additional Obligations.
(d) Financing Statement. The Agent, on behalf of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers shall be
entitled at any time to file this Primary Pledge Agreement or a carbon,
photographic, or other reproduction of this Primary Pledge Agreement, as a
financing statement, but the failure of the Agent to do so shall not impair the
validity or enforceability of this Primary Pledge Agreement.
(e) Amendments. This Primary Pledge Agreement may be amended only by
an instrument in writing executed jointly by the Company and the Agent, with the
consent of the Required Banks, and supplemented only by documents delivered or
to be delivered in accordance with the express terms hereof, provided, however,
that any release of all or any substantial portion of the Collateral from the
lien created hereby shall be effective only if approved in accordance with
Section 8.2 of the Credit Agreement.
(f) GOVERNING LAW. THIS PRIMARY PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND
NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
(g) Parties Bound; Assignment. This Primary Pledge Agreement shall
be binding on the Company and its successors and assigns and shall inure to the
benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers and their respective successors and assigns.
22
<PAGE> 23
(h) Notices. Any notice required or permitted to be given under this
Primary Pledge Agreement shall be in writing and may be, and shall be deemed,
given, if mailed, three days after the date when deposited in the United States
mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by personal delivery
or by telecopy, when received, addressed to the Company (with a copy to Sheli J.
Rosenberg, Esq., Rosenberg & Liebentritt, Two North Riverside Plaza, Suite 600,
Chicago, Illinois 60606 provided, however, that the failure to provide any such
copy shall not affect the validity or sufficiency of any such notice), to the
Agent at the address indicated below its signature hereto, to the Co-Agents and
the Banks at the addresses indicated below their respective signatures to the
Credit Agreement, to any L/C Providers at the addresses provided to the Company
and the Agent in writing by such L/C Providers and to any Interest Rate
Providers at the addresses provided to the Company and the Agent in writing by
such Interest Rate Providers. Each of the Company, the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers may change the address
for service of notice upon it by a notice in writing to the other parties
hereto.
(i) Waiver of Subrogation. The Company hereby irrevocably waives any
claim or other rights which it may now or hereafter acquire against Jacor or any
other Person that arise from the existence, payment, performance or enforcement
of the Company's obligations under this Primary Pledge Agreement or any other
Loan Document, including any right of subrogation, reimbursement, exoneration,
or indemnification, any right to participate in any claim or remedy of the
Agent, any Co- Agent, any Bank, any L/C Provider or any Interest Rate Provider
against Jacor or any other Person or any collateral which the Agent now has or
hereafter acquires, whether or not such claim, remedy or right arises in
23
<PAGE> 24
equity, or under contract, statute or common law, including the right to take or
receive from Jacor or any other Person, directly or indirectly, in cash or other
property or by set-off or in any manner, payment or security on account of such
claim or other rights. If any amount shall be paid to the Company in violation
of the preceding sentence and the Obligations shall not have been paid in cash
in full and the Commitments have not been terminated, such amount shall be
deemed to have been paid to the Company for the benefit of, and held in trust
for, the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest
Rate Providers, and shall forthwith be paid to the Agent to be credited and
applied upon the Obligations, whether matured or unmatured. The Company
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and the Rate Hedging
Agreements and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
(j) Counterparts. This Primary Pledge Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Primary Pledge
Agreement by signing any such counterpart. This Primary Pledge Agreement shall
be effective when it has been executed by the Company and the Agent.
(k) Loan Document. This Primary Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
(l) Section Captions. Section captions used in this Primary Pledge
Agreement are for convenience of reference only and shall not affect the
construction of this Primary Pledge Agreement.
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<PAGE> 25
(m) Severability. Wherever possible each provision of this Primary
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Primary Pledge
Agreement shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Primary Pledge Agreement.
(n) WAIVER OF JURY TRIAL. EACH OF THE AGENT AND THE COMPANY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS PRIMARY PLEDGE AGREEMENT. COMPANY ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT, THE CO-AGENTS,
THE BANKS, ANY L/C PROVIDERS AND ANY INTEREST RATE PROVIDERS ENTERING INTO THE
CREDIT AGREEMENT, THE CITICASTERS L/C DOCUMENTS AND ANY RATE HEDGING AGREEMENTS,
RESPECTIVELY.
8. The Agent. Banque Paribas has been appointed Agent of the Co-Agents,
the Banks, any L/C Provider and any Interest Rate Providers hereunder pursuant
to Article X of the Credit Agreement, and the Agent has agreed to act (and any
successor Agent shall act) as such hereunder only on the express conditions
contained in such Article X. Any successor Agent appointed pursuant to Article X
of the Credit Agreement shall be entitled to all the rights, interests and
benefits of the Agent hereunder.
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<PAGE> 26
IN WITNESS WHEREOF, the undersigned have executed this Primary Pledge
Agreement as of the date first above written.
CHESAPEAKE SECURITIES, INC.
By:
--------------------------
Title:
-----------------------
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
BANQUE PARIBAS,
as Agent
By:
--------------------------
Title:
-----------------------
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
<PAGE> 1
CHESAPEAKE SECURITIES, INC.
SECONDARY PLEDGE AGREEMENT
THIS SECONDARY PLEDGE AGREEMENT (the "Secondary Pledge Agreement") is
executed as of February ___, 1996, by and between Chesapeake Securities, Inc.
(the "Company") and Jacor Communications, Inc., an Ohio corporation ("Jacor").
W I T N E S S E T H:
WHEREAS, Jacor is entering into that certain Credit Agreement dated as
of the date hereof with the Banks (as defined therein), the Co-Agents (as
defined therein) and the Agent (as modified, supplemented, amended, extended,
supplemented or restated from time to time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires Jacor to enter into certain Rate
Hedging Agreements (as defined in the Credit Agreement) with Interest Rate
Providers;
WHEREAS, the Company is a wholly-owned subsid- iary of Jacor;
WHEREAS, the Company expects to realize substantial direct and indirect
benefits as a result of Jacor entering into the Credit Agreement and the Rate
Hedging Agreements; and
WHEREAS, execution and delivery of this Secondary Pledge Agreement is a
condition precedent to the availability of credit under the Credit Agreement;
<PAGE> 2
NOW THEREFORE, in consideration of the foregoing and of the direct and
indirect benefits to be received by the Company, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement. The following term shall have the following meaning:
"Obligations" means, as to the Company, all obligations of the Company
under the Intercompany Demand Note executed by the Company, including, without
limitation, all unpaid principal of, accrued and unpaid interest on, and all
other amounts owing under, such Intercompany Demand Note (including all such
amounts which would become due but for the operation of the automatic stay under
Section 362(a) of the Federal Bankruptcy Code, 11 U.S.C. ss. 362(a), and the
operation of Sections 502(b) and 506(b) of the Federal Bankruptcy Code, 11
U.S.C. ss. 502(b) and 506(b)) and all obligations of the Company under each
Intercompany Acquisition Note executed by the Company, including, without
limitation, all unpaid principal of, accrued and unpaid interest on, and all
other amounts owing under any and all such Intercompany Acquisition Notes
(including all such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the Federal Bankruptcy Code, 11 U.S.C.
ss. 362(a), and the operation of Sections 502(b) and 506(b) of the Federal
Bankruptcy Code, 11 U.S.C. ss. 502(b) and ss. 506(b)).
2. Pledge and Security Interest; Deposit of Certificates for Pledged
Stock.
(a) Pledge and Security Interest. In order to secure the full and
complete payment and performance of the Obligations when due, the Company hereby
2
<PAGE> 3
pledges and grants to Jacor a continuing lien and security interest in (a) all
of the outstanding shares of capital stock of each Subsidiary of the Company
currently or hereafter owned by the Company (the "Pledged Stock"), (b) any
securities, dividends or other distributions and any other right or property at
any time in respect of or in exchange for any or all of the Pledged Stock and
any other property substituted or exchanged therefor and (c) any and all
proceeds (including, without limitation, "Proceeds" as defined in the Uniform
Commercial Code as in effect from time to time in the State of Illinois) of, and
substitutions and replacements for, the foregoing (all of the property and
rights described in the foregoing clauses (a) through (c) being herein
collectively called the "Collateral");
(b) Upon termination of the Primary Pledge Agreement, the Company
shall immediately deliver to Jacor the certificates representing the Pledged
Stock, endorsed in blank or accompanied by appropriate instruments of transfer
or assignments in blank, for the benefit of Jacor. Jacor shall not have any duty
to assure that all certificates representing the Pledged Stock have been
delivered to it or any obligation whatsoever with respect to the care, custody
or protection of any certificates which may be delivered to it except only to
exercise the same care in physically safekeeping such certificates as it would
exercise in the ordinary course of its own business. Jacor shall not be
obligated to preserve or protect any rights with respect to the Pledged Stock or
to receive or give any notice with respect thereto whether or not Jacor is
deemed to have knowledge of such matters.
3. Representations and Warranties. The Compa- ny represents and
warrants to Jacor that:
(a) Existence and Standing. As of the date hereof, the Company is
duly incorporated, validly
3
<PAGE> 4
existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
(b) Authorization, Validity and Enforce- ability. The execution and
delivery by the Company of this Secondary Pledge Agreement have been duly
authorized by proper corporate proceedings, and this Secondary Pledge Agreement
constitutes a legal, valid and binding obligation of the Company and creates a
security interest which is enforceable against the Company in accordance with
its terms in respect of all now owned and hereafter acquired Collateral, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity. All of the shares of the Pledged Stock are duly
authorized, validly issued, fully paid and non-assessable.
(c) Transferability of Pledged Stock; Title Matters. The Pledged
Stock is free and clear of all liens, options, warrants, puts, calls, or other
rights of third persons, and restrictions, other than (i) those liens arising
under the Primary Pledge Agreement (ii) those liens arising under this Secondary
Pledge Agreement, and (iii) restrictions on transferability imposed by
applicable state and Federal securities laws or which may arise as a result of
the Company being subject to the Communications Act of 1934, as amended, and the
rules and regulations of the FCC thereunder. The Company agrees to warrant and
defend title to and ownership of the Pledged Stock and the lien created by this
Secondary Pledge Agreement against the claims of all Persons and maintain and
preserve such lien at all times during the terms of this Secondary Pledge
Agreement. Upon the delivery to Jacor of the Pledged Stock the security interest
in the Pledged Stock granted to Jacor hereunder will constitute a perfected
security interest
4
<PAGE> 5
therein superior and prior to all Liens other than Liens permitted by Section
6.17 of the Credit Agreement.
(d) Ownership of Pledged Stock. The Company is the holder of record
and the sole beneficial owner of 100% of the issued and outstanding voting
capital of each Subsidiary of the Company.
(e) Title and Power to Pledge the Pledged Stock. Subject to the
Primary Pledge Agreement, the Company has good and marketable title to the
Pledged Stock and has all requisite rights, power, and authority to execute,
deliver and comply with the terms of this Secondary Pledge Agreement and to
pledge and deliver the Collateral to Jacor pursuant hereto. Except as provided
in Section 5.3 of the Credit Agreement, no material authorization, consent or
approval of, and no notice to or filing with, any person or government agency
(other than as specified in Section 6 hereof) is required in connection with the
execution, delivery and performance of this Secondary Pledge Agreement which has
not been obtained.
4. Covenants. So long as any Obligations remain outstanding, the
Company covenants and agrees with Jacor as follows:
(a) Pledge and Additional Stock. If the Company shall at any time
acquire any additional shares of the capital stock of any class of the Pledged
Stock of any Subsidiary of the Company, whether such acquisition shall be by
purchase, exchange, reclassification, dividend, or otherwise, the Company shall,
to the extent doing so would not violate applicable law, forthwith (and without
the necessity for any request or demand by Jacor) deliver the certificates
representing such shares to Jacor, in the same manner as described in Section
2(b) hereof.
5
<PAGE> 6
(b) Applications, Approval and Consents. The Company will, at its
expense, promptly execute and deliver, or cause the execution and delivery of,
all applications, certificates, instruments, registration statements, and all
other documents and papers Jacor may reasonably request in connection with the
obtaining of any consent, approval, registration, qualification, or
authorization of the FCC or of any other Person necessary or appropriate for the
effective exercise of any rights under this Secondary Pledge Agreement. Without
limiting the generality of the foregoing, the Company agrees that in the event
that Jacor shall exercise its right to sell, transfer, or otherwise dispose of
or take any other action in connection with any of the Collateral pursuant to
this Secondary Pledge Agreement, the Company shall execute and deliver all
applications, certificates, and other documents that Jacor may reasonably
request and shall otherwise promptly, fully, and diligently cooperate with Jacor
and any other necessary Persons, in making any application for the prior consent
or approval of the FCC or any other Person to the exercise by Jacor of any of
such rights relating to all or any part of the Collateral. Furthermore, because
the Company agrees that Jacor's remedy at law for failure of the Company to
comply with the provisions of this Section 4(b) would be inadequate and that
such failure would not be adequately compensable in damages, the Company agrees
that the covenants of this Section 4(b) may be specifically enforced.
(c) Security Interest and Lien. Except as otherwise permitted by the
terms of the Credit Agreement or as otherwise contemplated by the Primary Pledge
Agreement, the Company will preserve, warrant, and defend the lien created
hereby in the Collateral against the claims of all Persons whomsoever; will not
at any time sell, assign, transfer or otherwise dispose of its right, title and
interest in and to any of the Collateral; will not at any time, directly or
indirectly, create, assume,
6
<PAGE> 7
or suffer to exist any lien, warrant, put, option, or other rights of third
Persons and restrictions, other than the liens created by this Secondary Pledge
Agreement, in and to the Collateral or any part thereof; and will not do or
suffer any matter or thing whereby the lien created by this Secondary Pledge
Agreement in and to the Collateral might or could be impaired.
(d) Further Assurances. The Company, at its expense, shall from time
to time execute and deliver to Jacor all such other assignments, certificates,
supplemental documents, and financing statements, and shall do all other acts or
things as Jacor may reasonably request in order to more fully create, evidence,
perfect, continue, and preserve the priority of the lien herein created or to
otherwise obtain the full benefits of this Secondary Pledge Agreement.
(e) Indebtedness; etc. The Company will not permit any Subsidiary of
the Company to incur any Indebtedness or permit any Liens (other than under the
Subsidiary Security Agreement, dated as of the date hereof, as amended) to exist
in respect of any such Subsidiary's assets except as permitted by the Credit
Agreement.
5. Rights of the Company and Jacor.
(a) Exercise of Stockholder Rights.
(i) Subject to the provisions of Section 6 hereof and the
provisions of the Primary Pledge Agreement, unless and until a Default
shall occur and be continuing or a default under any of the Citicasters L/C
Documents shall occur and be continuing, the Company shall be entitled to
receive all cash dividends or other
7
<PAGE> 8
distributions on the Pledged Stock (if and to the extent such dividends or
distributions are permitted by the terms of the Credit Agreement) except
(A) distributions made in capital stock on the Pledged Stock resulting from
stock dividends on or subdivision, combination, or reclassification or the
outstanding capital stock or any corporation; and (B) all sums paid on any
Pledged Stock upon liquidation or dissolution or reduction of capital,
repurchase, retirement, or redemption. All such sums, dividends,
distributions, proceeds, or property described in the immediately preceding
clauses (A) and (B) shall, if received by any Person other than Jacor, be
held in trust for the benefit of Jacor and shall forthwith be delivered to
Jacor for the benefit of Jacor (accompanied by proper instruments or
assignment and/or stock and/or bond powers executed by the Company in
accordance with Jacor's instructions) to be held subject to the terms of
this Secondary Pledge Agreement. Upon the occurrence of a Default, or a
default under any of the Citicasters L/C Documents, Jacor shall be entitled
to receive all payments of whatever kind made upon or with respect to any
Collateral.
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<PAGE> 9
(ii) Unless a Default has occurred and is continuing or a default
under any of the Citicasters L/C Documents shall have occurred and be
continuing, the Company shall have the sole and exclusive right to vote and
give consents with respect to all the Collateral and to consent to, ratify,
or waive notice of any and all meetings. Upon the occurrence and during the
continuance of a Default or any default under any of the Citicasters L/C
Documents, subject to the provisions of the Primary Pledge Agreement and
subject to compliance with applicable law, Jacor shall have, subject to
Section 6 hereof, the right (A) to consent in advance to any vote proposed
to be cast by the Company with respect to any merger, consolidation,
liquidation or reorganization of any Subsidiary (but in no event with
respect to any election of directors) and, in connection therewith, to join
in and become a party to any plan of recapitalization, reorganization, or
readjustment (whether voluntary or involuntary) as shall seem desirable to
Jacor to protect or further their interests in respect of the Collateral,
(B) to deposit the Collateral under any such plan, and (C) to make any
exchange, substitution, cancellation, or surrender of the Collateral
required by any such
9
<PAGE> 10
plan and to take such action with respect to the Collateral as may be
required by any plan or for the accomplishment thereof; and no such
disposition, exchange, substitution, cancellation, or surrender shall be
deemed to constitute a release of the Collateral from the lien of this
Secondary Pledge Agreement.
(b) Right of Sale after Default. Upon the occurrence and during the
continuance of a Default or a default under any of the Citicasters L/C
Documents, subject to the provisions of the Primary Pledge Agreement and subject
to compliance with applicable law, Jacor may, subject to Section 6 hereof, sell,
without recourse to judicial proceedings, with the right to bid for and buy, the
Collateral or any part thereof, upon ten days' notice (which notice is agreed to
be reasonable notice for the purposes hereof) to the Company of the time and
place of sale, for cash, upon credit or for future delivery, at Jacor's option
and at Jacor's complete discretion:
(i) At public sale, including a sale at any broker's board or
exchange;
(ii) At private sale in any commercially reasonable manner which
will not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder, or any other law or regulation. Jacor
is also hereby authorized, but not obligated, to take such actions, give
such notices, obtain such consents, and do such other
10
<PAGE> 11
things as they may deem required or appropriate in the event of sale or
disposition of any of the Collateral, and the Company agrees that Jacor
shall not be liable or accountable to the Company for any discount allowed
by reason of the fact that such Collateral is sold in compliance with any
applicable limitation or restriction of any governmental regulatory
authority or official. The Company understands that Jacor may in its
discretion approach a restricted number of potential purchasers and that
sale under such circumstances may yield a lower price for the Collateral,
or any portion thereof, than would otherwise be obtainable if the same were
registered and sold in the open market. The Company agrees that in the
event Jacor shall so sell the Collateral, or any portion thereof, at such
private sale or sales, Jacor shall have the right to rely upon the advice
and opinion of any Person who regularly deals in or evaluates stock of the
type constituting the Collateral as to the price obtainable in a
commercially reasonable manner upon such a private sale thereof.
In the case of any sale by Jacor of the Collateral on credit or
for future delivery, the Collateral sold may be retained by Jacor until the
selling price is paid by the purchaser, but Jacor shall not incur liability in
case of failure of
11
<PAGE> 12
the purchaser to take up and pay for the Collateral so sold.
In connection with the sale of any of the Collateral, Jacor is
authorized, but not obligated, to limit prospective purchasers to the extent
deemed necessary or desirable by Jacor to render such sale exempt from the
registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws. In the event that, in the opinion of Jacor, it
is necessary or advisable to have such securities registered under the
provisions of such Act, or any similar law relating to the registration of
securities, the Company agrees, at its own expense, to (i) execute and deliver
all such instruments and documents, and to do or cause to be done such other
acts and things, as may be necessary or, in the opinion of Jacor, advisable, to
register such securities under the provisions of such Act or any applicable
similar law relating to the registration of securities, and the Company will use
its best efforts to cause the registration statement relating thereto to become
effective and to remain effective for such period as Jacor shall reasonably
request, and to make all amendments thereof and/or to the related prospectus
which, in the opinion of Jacor, are necessary or desirable, all in conformity
with the requirements of such Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto; (ii) use its best efforts
to qualify such securities under state "blue sky" or securities laws, all as
reasonably requested by Jacor; (iii) at the request of Jacor, indemnify and hold
Jacor and any underwriters (and employees, officers, agents, attorneys and
accountants (collectively, the "Indemnified Parties")) harmless from and against
any loss, liability, claim, damage, and expense (including, without limitation,
reasonable fees of counsel incurred in connection therewith) under such Act or
otherwise, insofar as such loss, liability, claim, damage, or expense arises out
of or is based upon any untrue statement or alleged untrue statement of any
material fact fur-
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<PAGE> 13
nished by the Company contained in any registration statement under which such
securities were registered under such Act or other securities laws, any
preliminary prospectus or final prospectus contained therein, or arise out of or
are based upon any omission or alleged omission by the Company to state therein
a material fact required to be stated or necessary to make the statements
therein not misleading, such indemnification to remain operative regardless of
any investigation made by or on behalf of any Indemnified Party; provided,
however, that the Company shall not be liable in any case to the extent that any
such loss, liability, claim, damage, or expense arises out of or is based upon
an untrue statement or alleged untrue statement or an omission or an alleged
omission made in reliance upon and in conformity with written information
furnished to the Company by an Indemnified Party specifically for use in such
registration statement or preliminary or final prospectus; (iv) cause each such
issuer to make available to its security holders, as soon as practicable, an
earnings statement that will satisfy the provisions of Section 11(a) of such
Act; and (v) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
(c) Other Rights after a Default. Sub- ject to Section 6 hereof and
subject to the provisions of the Primary Pledge Agreement, upon the occurrence
and during the continuance of a Default or a default under the Citicasters L/C
Documents, Jacor may exercise any and all rights available to secured parties
under the Uniform Commercial Code as enacted in the State of Illinois or other
applicable jurisdiction, as amended, in addition to any and all other rights
afforded at law, in equity, or otherwise.
(d) Application of Proceeds. Jacor shall apply the proceeds of the
Collateral, including the
13
<PAGE> 14
proceeds of any sales of other disposition of the Collateral, or any part
thereof, under this Section 5, in the following order unless a court of
competent jurisdiction shall otherwise direct:
(i) FIRST, to payment of all reasonable costs and expenses of
Jacor incurred in connection with the collection and enforcement of the
Obligations or of the security interest granted pursuant to this Secondary
Pledge Agreement;
(ii) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other
than principal) owing to Jacor;
(iii) THIRD, to payment of the principal of the Obligations
owing to Jacor; and
(iv) FOURTH, the balance, if any, after all of the Obligations
have been satisfied, shall be remitted to the Company.
(e) Governance. All rights and remedies available to Jacor with
respect to the grant, foreclosure and enforcement of the security interest and
lien granted hereby and with respect to any action permitted hereunder may be
exercised solely by Jacor and its successors and assignees.
6. Control, Limitation of Rights.
(a) Notwithstanding anything herein to the contrary, this Secondary
Pledge Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby do not and will not constitute the transfer,
14
<PAGE> 15
assignment, or disposition in any manner, voluntarily or involuntarily, directly
or indirectly, of any license at any time issued by the FCC to any Subsidiary
("License"), or the transfer of control of any such Subsidiary within the
meaning of Section 310 of the Communications Act of 1934, as amended.
(b) Notwithstanding any other provision of this Secondary Pledge
Agreement, any foreclosure on, sale, transfer or other disposition of, or the
exercise of any right to vote or consent with respect to, any of the Collateral
as provided herein or any other action taken or proposed to be taken by Jacor
hereunder which would affect the operational, voting, or other control of any
Subsidiary, shall be pursuant to Section 310 of the Communications Act of 1934,
as amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
(c) Subject to Section 6(e) hereof and subject to the provisions of
the Primary Pledge Agreement, if a Default or a default under any of the
Citicasters L/C Documents shall have occurred and be continuing, the Company
shall take any action which Jacor may reasonably request in order to transfer
and assign to Jacor, or to such one or more third parties as Jacor may
designate, or to a combination of the foregoing, each License. To enforce the
provisions of this Section 6, Jacor is empowered to request the appointment of a
receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC an involuntary transfer control of each such
License for the purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. The Company hereby agrees to authorize such an
involuntary transfer of control upon the request of the receiver so appointed
and, if the Company shall refuse to authorize the transfer, the Company's
approval may be required by the court.
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<PAGE> 16
Upon the occurrence and continuance of a Default or a default under any the
Citicasters L/C Documents, the Company shall further use its best efforts to
assist in obtaining approval of the FCC, if required, for any action or
transactions contemplated by this Secondary Pledge Agreement including, without
limitation, the preparation, execution and filing with the FCC of the assignor's
or transferor's portion of any application or applications for consent to the
assignment of any License or transfer of control necessary or appropriate under
the FCC's rules and regulations for approval of the transfer or assignment of
any portion of the Collateral, together with any License.
(d) The Company acknowledges that the assignment or transfer of each
License is integral to Jacor's realization of the value of the Collateral, that
there is no adequate remedy at law for failure by the Company to comply with the
provisions of this Section 6 and that such failure would not be adequately
compensable in damages, and therefore agrees that the agreements contained in
this Section 6 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Secondary Pledge Agreement or in any other Loan Document, Jacor shall not,
without first obtaining the approval of the FCC, take any action pursuant to
this Secondary Pledge Agreement which would constitute or result in any
assignment of a License or any change of control of any License or any
Subsidiary if such assignment or change in control would require, under then
existing law (including the written rules and regulations promulgated by the
FCC), the prior approval of the FCC.
7. Miscellaneous.
(a) Term. This Secondary Pledge Agree- ment and the lien arising
hereunder (i) shall become
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<PAGE> 17
effective as of the date hereof upon the execution hereof, and (ii) shall
continue in force until no Obligations to Jacor shall be outstanding and the
Commitments shall have been terminated. If no Obligations remain outstanding and
the Commitments have been terminated, Jacor, at the request and sole expense of
the Company, shall execute and deliver such documents and instruments as may be
necessary to evidence such termination and release.
(b) Releases; Partial Releases. Any cash dividends received by the
Company in accordance with the terms of Section 5(a)(i) hereof, shall be deemed
released from the lien of this Secondary Pledge Agreement and shall be held by
the Company (or any transferee of the Company) free and clear of the lien
created by this Secondary Pledge Agreement. Upon termination of this Pledge
Agreement in accordance with the provisions of Section 7(a) hereof, Jacor shall,
at the Company's request and expense and subject to the foregoing sentence,
execute such release as the Company may reasonably request, in form and upon
terms acceptable to Jacor in all respects, and shall deliver, without any
representations, warranties or recourse of any kind whatsoever (other than the
representation and warranty that such property is free and clear of Liens
created by Jacor, all certificates representing the Pledged Stock and other
property held in respect thereof hereunder which is in the Jacor's possession,
together with all stock powers or other instruments of transfer reasonably
required to effect delivery to the Company.
(c) Waivers. Except to the extent expressly otherwise provided
herein or in any Loan Document, the Company waives, to the extent permitted by
applicable law, (i) any right to require Jacor to proceed against any other
person, to exhaust their rights in any other collateral, or to pursue any other
right which Jacor may have, (ii) with respect to the Obligations, presentment
and demand for payment, protest, notice of
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<PAGE> 18
protest and non-payment, and notice of the intention to accelerate, and (iii)
all rights of marshalling in respect of any and all of the Collateral. The
Company expressly waives any and all defenses now or hereafter arising or
asserted by reason of (a) any disability or other defense of any of the Company
or any other Person with respect to the Obligations, (b) the unenforceability or
invalidity of any security or guaranty for the Obligations or the lack of
perfection or continuing perfection or failure of priority of any security for
the Obligations, (c) the cessation for any cause whatsoever of the liability of
any of the Company or any other Person (other than by reason of the full payment
and performance of all Obligations), (d) any failure of Jacor to marshal assets
in favor of any Person, (e) any failure of Jacor to give notice of sale or other
disposition to any Person or any defect in any notice that may be given in
connection with any sale or disposition, (f) any act or omission of Jacor or
others that directly or indirectly results in or aids the discharge or release
of any of the Company or any other Person of the Obligations or any other
security or guaranty therefor by operation of Law or otherwise, (g) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligations or (h) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Company, whether or
not the Company shall have had notice or knowledge of any act or omission
referred to in the foregoing clauses (a) through (h) of this paragraph. The
Company expressly waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor and all other notices or
demands of any kind or nature whatsoever with respect to the Obligations, and
all notices of acceptance of this
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<PAGE> 19
Secondary Pledge Agreement or of the existence, creation or incurring of new or
additional Obligations.
(d) Financing Statement. Jacor shall be entitled at any time to file
this Secondary Pledge Agreement or a carbon, photographic, or other reproduction
of this Secondary Pledge Agreement, as a financing statement, but the failure of
Jacor to do so shall not impair the validity or enforceability of this Secondary
Pledge Agreement.
(e) Amendments. This Secondary Pledge Agreement may be amended only
by an instrument in writing executed jointly by the Company and Jacor, and
supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof, provided, however, that any release of all or any
substantial portion of the Collateral from the lien created hereby shall be
effective only if approved in accordance with Section 8.2 of the Credit
Agreement.
(f) GOVERNING LAW. THIS SECONDARY PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND
NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
(g) Parties Bound; Assignment. This Secondary Pledge Agreement shall
be binding on the Company and its successors and assigns and shall inure to the
benefit of Jacor and their respective successors and assigns.
(h) Notices. Any notice required or permitted to be given under this
Secondary Pledge Agreement shall be in writing and may be, and shall be deemed,
given, if mailed, three days after the date when deposited in the United States
mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by per-
19
<PAGE> 20
sonal delivery or by telecopy, when received, addressed to the Company (with a
copy to Sheli J. Rosenberg, Esq., Rosenberg & Liebentritt, Two North Riverside
Plaza, Suite 600, Chicago, Illinois 60606 provided, however, that the failure to
provide any such copy shall not affect the validity or sufficiency of any such
notice) and to Jacor at the address indicated below its signature hereto. Both
the Company and Jacor may change the address for service of notice upon it by a
notice in writing to the other party hereto.
(i) Waiver of Subrogation. The Company hereby irrevocably waives any
claim or other rights which it may now or hereafter acquire against Jacor or any
other Person that arise from the existence, payment, performance or enforcement
of the Company's obligations under this Secondary Pledge Agreement or any other
Loan Document, including any right of subrogation, reimbursement, exoneration,
or indemnification, including the right to take or receive from Jacor or any
other Person, directly or indirectly, in cash or other property or by set-off or
in any manner, payment or security on account of such claim or other rights. If
any amount shall be paid to the Company in violation of the preceding sentence
and the Obligations shall not have been paid in cash in full and the Commitments
have not been terminated, such amount shall be deemed to have been paid to the
Company for the benefit of, and held in trust for Jacor and shall forthwith be
paid to Jacor to be credited and applied upon the Obligations, whether matured
or unmatured. The Company acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreement
and the Rate Hedging Agreements and that the waiver set forth in this Section is
knowingly made in contemplation of such benefits.
(j) Counterparts. This Secondary Pledge Agreement may be executed in
any number of counterparts,
20
<PAGE> 21
all of which taken together shall constitute one agreement, and either of the
parties hereto may execute this Secondary Pledge Agreement by signing any such
counterpart. This Secondary Pledge Agreement shall be effective when it has been
executed by the Company and Jacor.
(k) Loan Document. This Secondary Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
(l) Section Captions. Section captions used in this Secondary Pledge
Agreement are for convenience of reference only and shall not affect the
construction of this Secondary Pledge Agreement.
(m) Severability. Wherever possible each provision of this Secondary
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Secondary Pledge
Agreement.
(n) WAIVER OF JURY TRIAL. EACH OF JACOR AND THE COMPANY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS SECONDARY PLEDGE AGREEMENT. THE COMPANY ACKNOWLEDGES
AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION AND THAT THIS PROVISION.
21
<PAGE> 22
IN WITNESS WHEREOF, the undersigned have executed this Secondary
Pledge Agreement as of the date first above written.
CHESAPEAKE SECURITIES, INC.
By:
-------------------------------
Title:
----------------------------
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attention: President
JACOR COMMUNICATIONS, INC.
By:
-------------------------------
Title:
----------------------------
1300 PNC Center
207 East Fifth Street
Cincinnati, OH 45202
22
<PAGE> 1
SUBSIDIARY TRADEMARK SECURITY AGREEMENT
This Subsidiary Trademark Security Agreement (herein
"Agreement"), dated as of February __, 1996, is made by JACOR BROADCASTING OF
TAMPA BAY, INC., a Florida corporation, JACOR BROADCASTING OF ATLANTA, INC., a
Georgia corporation, JACOR BROADCASTING CORPORATION, an Ohio corporation and
JACOR BROADCASTING OF FLORIDA INC., a Florida corporation (each a "Grantor" and
collectively the "Grantors"), in favor of BANQUE PARIBAS, located at 227 West
Monroe Street, Chicago, Illinois 60606, as Agent, for the benefit of itself, the
Banks (as defined below), the Co-Agents (as defined below), the L/C Providers
(as defined in the Credit Agreement) and the Interest Rate Providers (as defined
in the Credit Agreement) (in such capacity, together with its successors and
assigns, "Agent").
RECITALS
WHEREAS, Jacor Communications, Inc., an Ohio corporation, has
entered into that certain Credit Agreement dated as of the date hereof with
Agent, the banks party thereto from time to time (the "Banks") and the Co-Agents
(as defined therein) (as the same may be amended, modified, supplemented,
restated, replaced or restated from time to time, the "Credit Agreement"); and
WHEREAS, as a condition to Agent, the Banks and the Co-Agents
entering into the Credit Agreement, each of the Grantors is required to enter
into this Agreement and to grant to Agent, for the benefit of itself, the Banks,
the Co-Agents, the L/C Providers and the Interest Rate Providers, a security
interest in the Trademarks (as hereinafter defined), all under the terms and
conditions set forth in this Agreement.
<PAGE> 2
AGREEMENT
NOW, THEREFORE, in order to induce Agent, the Banks, the
Co-Agents, any L/C Providers and any Interest Rate Providers to enter into the
Credit Agreement, the Citicasters L/C Documents and Rate Hedging Agreements,
respectively, and for other good and valuable consideration, the receipt and
adequacy of which hereby is acknowledged, the parties hereby agree as follows:
1. Definitions. This Agreement is a "Subsidiary Trademark
Agreement" referred to in the Credit Agreement. Terms defined in the Credit
Agreement and not otherwise defined in this Agreement shall have the meanings
defined for those terms in the Credit Agreement. The following terms shall have
the following meaning:
"Obligations" means, as to each Guarantor, all obligations of such
Guarantor under the Subsidiary Guaranty executed by such Guarantor including,
without limitation, all obligations of such Guarantor pursuant to Section 1 of
such Subsidiary Guaranty.
"Trademarks" means, collectively, all right, title and interest of
each of the Grantors in and to its now owned and hereafter acquired trademarks,
service marks, trade names, business identifiers, logos and any and all
registrations and applications for any of the foregoing, including, but not
limited to, those indicated on Schedule I hereto, incorporated herein by this
reference, together with the goodwill of the businesses symbolized by each of
the foregoing.
2. Grant of Security Interest in Trademarks. To secure the full
and complete payment and performance of the Obligations when due, each of the
Grantors hereby grants, mortgages and pledges to Agent, for the benefit of the
Agent, the Banks, the Co-Agents, any L/C Providers
2
<PAGE> 3
and any Interest Rate Providers equally and ratably in proportion to the
Obligations owing at any time to any of them, a security interest in all of each
of the Grantor's right, title and interest in and to the Trademarks. The
security interest granted hereby is a present right and is not subject to any
condition precedent to attachment. Each of the Grantors agrees that it will not
grant any license in respect of any of the Trademarks without the prior written
consent of Agent, except licenses entered into in the ordinary course of
business and consistent with past practices. Nothing herein contained shall
impose any liability on Agent for any acts or omissions of any of the Grantors
in connection with any license or license agreement presently in effect or
hereafter entered into by any of the Grantors licensing the use of the
Trademarks.
3. Representations and Warranties. Each of the Grantors represents
and warrants to the Agent, for the benefit of itself, the Banks, the Co-Agents,
any L/C Providers and any Interest Rate Providers, that (a) the Trademarks
listed on Schedule I include all of the United States registered Trademarks now
owned or held by the Grantors, (b) the items identified in Schedule I hereto are
in good standing and have not been adjudged invalid or unenforceable, in whole
or in part, and to the best of Grantor's knowledge, Trademark is valid and
enforceable in the jurisdictions and in the manner in which they are currently
used; (c) to the best of each of the Grantor's knowledge, no claim has been made
that the use by any of the Grantors of any Trademark violates the rights of any
third person and (d) each of the Grantors is the legal and beneficial owner of
the applicable Trademarks, free and clear of all Liens (other than the Liens
created by the Collateral Documents or permitted by Section 6.17 of the Credit
Agreement), and all registrations for such Trademarks listed on Schedule I
hereto are standing in the name of the applicable Grantor.
3
<PAGE> 4
4. New Trademarks. If any of the Grantors shall obtain rights to
any new Trademarks, the provisions of Section 2 above shall automatically apply
thereto, and if any of the Grantors adopts or acquires any new United States
registered Trademark, it shall promptly give to Agent written notice thereof.
Each of the Grantors hereby authorizes Agent to modify this Agreement
unilaterally (i) by amending Schedule I to include any new United States
registered Trademarks acquired by any of the Grantors and (ii) by filing in such
governmental office as Agent may deem necessary or desirable, in addition to and
not in substitution for this Agreement, a supplemental trademark security
agreement or a duplicate original of this Agreement containing, on Schedule I
thereto, such new Trademarks and to supplement or replace any UCC filings or
recordation in the United States Patent and Trademark Office or any other filing
or recordation made to perfect the security interest granted hereunder. If Agent
is unable to unilaterally accomplish (i) or (ii) above, each of the Grantors
agrees to execute and deliver all documents and instruments reasonably requested
by Agent to accomplish the foregoing.
5. License. Each of the Grantors hereby grants to Agent a
nonexclusive license, exercisable after the occurrence and during the
continuance of a Default or after the occurrence and during the continuance of a
default under any of the Citicasters L/C Documents, to use the Trademarks in
connection with Agent's exercise of its rights and remedies under Section 6 or
pursuant to any other Loan Document. The Agent's use of the Trademarks pursuant
to this Section 5 shall be coextensive with each of the Grantor's rights
thereunder and with respect thereto and without any liability for royalties or
other related charges from Agent to the Grantors. In operating under such
license, the Agent agrees that the goods and services offered under the
Trademarks shall be of a quality substantially consistent with those theretofore
offered by the Grantors under such Trademarks. Each
4
<PAGE> 5
Grantor shall have the right to inspect, upon reasonable intervals and with
reasonable notice, the business conducted by or on behalf of Agent under this
license for purposes of monitoring compliance with the aforesaid quality
standard.
6. Default Remedies. Upon the occurrence and during the
continuance of a Default or a default under any of the Citicasters L/C
Documents, the Agent shall have, in addition to all rights and remedies provided
for by law or in equity, all rights and remedies of a secured party under the
Uniform Commercial Code as in effect in any jurisdiction where enforcement
hereof is sought, and all rights and remedies provided in any other Loan
Document or any of the Citicasters L/C Documents, as the case may be, which
rights and remedies are incorporated herein as though set forth in full.
Notwithstanding the foregoing, the rights of any L/C Provider upon the
occurrence and continuance of a default under any of the Citicasters L/C
Documents shall be subject to the provisions of any intercreditor agreement in
effect from time to time.
7. Incorporation by Reference of Certain Provisions. This
Agreement is delivered pursuant to the Credit Agreement and shall be interpreted
consistently therewith. Any provision in the Credit Agreement or in any other
Loan Document that is of general applicability to the Loan Documents shall be
and hereby is incorporated by reference in this Agreement as though set forth in
full.
8. Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary, this
Agreement, the other Loan Documents and the transactions contemplated hereby and
thereby (i) do not and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
of any of the Grantors
5
<PAGE> 6
by the Agent, the Co-Agents, the L/C Providers, the Interest Rate Providers or
the Banks, or control, affirmative or negative, direct or indirect, by the
Agent, the Co-Agents, the Banks, the L/C Providers or the Interest Rate
Providers over the management or any other aspect of the operation of any of
Grantors, which ownership and control remains exclusively and at all times in
the Company and each Grantor, and (ii) except for the grant of a security
interest hereunder to the extent permitted by law, do not and will not
constitute the transfer, assignment, or disposition in any manner, voluntarily
or involuntarily, directly or indirectly, of any license at any time issued by
the FCC to any of the Grantors ("License"), or the transfer of control of any of
the Grantors within the meaning of Section 310 of the Communications Act of
1934, as amended.
(b) Notwithstanding any other provision of this Agreement,
any foreclosure on, sale, transfer or other disposition of, or the exercise of
any right to vote or consent with respect to, any of the Collateral as provided
herein or any other action taken or proposed to be taken by the Agent, the
Co-Agents, the L/C Providers, the Interest Rate Providers and the Banks
hereunder which would affect the operational, voting, or other control of any of
the Grantors, shall be pursuant to Section 310 of the Communications Act of
1934, as amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
(c) Subject to Section 8(e), if a Default or a default
under any of the Citicasters L/C Documents shall have occurred and be
continuing, the applicable Grantor shall take any action which the Agent, on
behalf of the Agent, the Co-Agents, the Banks, the L/C Providers and the
Interest Rate Providers may reasonably request in order to transfer and assign
to the Agent, or to such one or more third parties as the Agent may designate,
or to a
6
<PAGE> 7
combination of the foregoing, each License. To enforce the provisions of this
Section 8 the Agent is empowered to request the appointment of a receiver from
any court of competent jurisdiction. Such receiver shall be instructed to seek
from the FCC an involuntary transfer of control of each such License for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. Each of the Grantors hereby agrees to authorize such an involuntary
transfer of control upon the request of the receiver so appointed and, if the
Company shall refuse to authorize the transfer, its approval may be required by
the court. Upon the occurrence and continuance of a Default or a default under
any of the Citicasters L/C Documents, the applicable Grantor shall further use
its best efforts to assist in obtaining approval of the FCC, if required, for
any action or transactions contemplated by this Agreement including, without
limitation, the preparation, execution and filing with the FCC of the assignor's
or transferor's portion of any application or applications for consent to the
assignment of any License or transfer of control necessary or appropriate under
the FCC's rules and regulations for approval of the transfer or assignment of
any portion of the Trademarks, together with any License.
(d) Each of the Grantors acknowledges that the assignment
or transfer of each License is integral to the Agent's, the Co-Agents', the L/C
Provider's, the Interest Rate Provider's and the Banks' realization of the value
of the Trademarks, that there is no adequate remedy at law for failure by such
Grantor to comply with the provisions of this Section 8 and that such failure
would not be adequately compensable in damages, and therefore agrees that the
agreements contained in this Section 8 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in
this Agreement or in any other Loan Document, neither the Agent, any Co-Agent,
any L/C Pro-
7
<PAGE> 8
vider, any Interest Rate Provider nor any Bank shall, without first obtaining
the approval of the FCC, take any action pursuant to this Agreement which would
constitute or result in any assignment of a License or any change of control of
any License of any of the Grantors if such assignment or change in control would
require, under then existing law (including the written rules and regulations
promulgated by the FCC), the prior approval of the FCC.
9. Actions Not Releases; Waiver of Defenses. The lien hereunder
and each of the Grantor's obligations and the Agent's, the Co-Agents', any L/C
Provider's, any Interest Rate Provider's and the Banks' rights hereunder shall
not be released, diminished, impaired, or adversely affected by the occurrence
of any one or more of the following events: (i) the taking or accepting of any
other security or assurance at any time existing in connection with any or all
of the Obligations; (ii) any release, surrender, exchange, subordination or loss
of any security or assurance at any time existing in connection with any or all
of the Obligations; (iii) the modification of, amendment to, or waiver or
compliance with any terms of any Loan Document; (iv) the insolvency, bankruptcy,
or lack of corporate power of any party at any time liable for the payment of
any or all of the Obligations, whether now existing or hereafter occurring; (v)
any renewal, extension, or rearrangement of the payment of any or all of the
Obligations, either with or without notice to or consent of the applicable
Grantor in accordance with any Loan Document, or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by the Agent, any
Co-Agent, any L/C Provider, any Interest Rate Provider or any Bank to the
applicable Grantor or the Company; (vi) any neglect, delay, omission, failure,
or refusal of the Agent, any Co-Agent, any L/C Provider, any Interest Rate
Provider or any Bank to take or prosecute any action in connection with any
other agreement, document, guaranty, or instrument evidencing, securing, or
assuring the payment of all or any of the
8
<PAGE> 9
Obligations; (vii) any failure of the Agent, any Co-Agent, any Bank, any L/C
Provider or any Interest Rate Provider to notify the applicable Grantor of any
renewal, extension, or assignment of the Obligations or any part thereof, or the
release of any security, or of any other action taken or refrained from being
taken by the Agent, any Co-Agent, any L/C Provider, any Interest Rate Provider
or any Bank against the Company or the applicable Grantor or any new agreement
among the Agent, any Co-Agent, any L/C Provider, any Interest Rate Provider or
any Bank [shall be required to give the Grantor] (or any combination thereof),
it being understood that neither the Agent, any Co-Agent, any L/C Provider, any
Bank nor any Interest Rate Provider shall be required to give any Grantor any
notice of any kind under any circumstances whatsoever, except as required under
applicable law, with respect to or in connection with the Obligations,
including, without limitation, notice of acceptance of this Agreement or any
Collateral ever delivered to or for the account of the Agent, the Co-Agents, any
L/C Providers, any Interest Rate Providers or the Banks hereunder; (viii) the
illegality, invalidity, or unenforceability of all or any part of the
Obligations against any party obligated with respect thereto by reason of the
fact that the Obligations, or the interest paid or payable with respect thereto,
exceeds the amount permitted by law, the act of creating the Obligations, or any
part thereof, is ultra vires, or the officers creating same acted in excess of
their authority, or for any other reason; or (ix) any payment by any party
obligated with respect thereto is held to constitute a preference under
applicable laws or for any other reason the Agent, any Co-Agent, any L/C
Provider, any Interest Rate Provider or any Bank is required to refund such
payment or pay the amount thereof to someone else. Each of the Grantors
expressly waives any and all defenses now or hereafter arising or asserted by
reason of (i) any disability or other defense of any of the Company or any
Subsidiary with respect to the Obligations, (ii) the unenforceability or
invalidity
9
<PAGE> 10
of any security or guaranty for the Obligations or the lack of perfection or
continuing perfection or failure of priority of any security for the
Obligations, (iii) the cessation for any cause whatsoever of the liability of
any of the Company or any Subsidiary (other than by reason of the full payment
and performance of all Obligations), (iv) any failure of the Agent to marshal
assets in favor of the Grantor or any other Person, (v) any failure of the Agent
to give notice of sale or other disposition to the applicable Grantor or any
defect in any notice that may be given in connection with any sale or
disposition, (vi) any act or omission of the Agent, any Co-Agent, any L/C
Provider, any Interest Rate Provider or any Bank or others that directly or
indirectly results in or aids the discharge or release of any of the Company or
any Subsidiary or the Obligations or any other security or guaranty therefor by
operation of law or otherwise, (vii) any law which provides that the obligation
of a surety or guarantor must neither be larger in amount nor in other respects
more burdensome than that of the principal or which reduces a surety's or
guarantor's obligation in proportion to the principal obligations, or (viii) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, the Grantors, all whether or not such Grantor shall have had
notice or knowledge of any act or omission referred to in the foregoing clauses
(i) through (viii) of this paragraph. Each of the Grantors expressly waives all
setoffs and counterclaims and all presentments, demands for payment or
performance, notices of nonpayment or nonperformance, protests, notices of
protest, notices of dishonor and all other notices or demands of any kind or
nature whatsoever with respect to the Obligations, and all notices of acceptance
of this Security Agreement or of the existence, creation or incurring of new or
additional Obligations.
10. Waiver of Subrogation. Each of the Grantors hereby irrevocably
waives any claim or other rights
10
<PAGE> 11
which it may now or hereafter acquire against the Company or any of the Grantors
that arise from the existence, payment, performance or enforcement of any of the
Grantor's obligations under this Agreement or any other Loan Document, including
any right of subrogation, reimbursement, exoneration, or indemnification, any
right to participate in any claim or remedy of the Agent, any Co-Agent, any L/C
Provider, any Interest Rate Providers or any Bank against the Company or the
applicable Grantor or any collateral which the Agent now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from the
Company or the applicable Grantor, directly or indirectly, in cash or other
property or by set-off or in any manner, payment or security on account of such
claim or other rights. If any amount shall be paid to any Grantor in violation
of the preceding sentence and the Obligations shall not have been paid in cash
in full and the Commitments have not been terminated, such amount shall be
deemed to have been paid to such Grantor for the benefit of, and held in trust
for, the Agent, the Co-Agents, the L/C Providers, the Interest Rate Providers
and the Banks, and shall forthwith be paid to the Agent to be credited and
applied upon the Obligations, whether matured or unmatured. Each of the Grantors
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that the waiver
set forth in this Section is knowingly made in contemplation of such benefits.
11. WAIVER OF JURY TRIAL. EACH OF THE GRANTORS AND THE AGENT
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT. EACH OF THE GRANTORS AND THE AGENT
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCE-
11
<PAGE> 12
MENT FOR THE AGENT, THE CO-AGENTS, THE BANKS, ANY L/C PROVIDERS AND ANY INTEREST
RATE PROVIDERS TO ENTER INTO THE CREDIT AGREEMENT, THE CITICASTERS L/C DOCUMENTS
AND RATE HEDGING AGREEMENTS, RESPECTIVELY.
12
<PAGE> 13
IN WITNESS WHEREOF, each of the Grantors has caused its duly
authorized officer to execute this Agreement as of the day and year first
written above.
JACOR BROADCASTING OF TAMPA
BAY, INC., a Florida
corporation
By:
-----------------------------
Its:
-------------------------
JACOR BROADCASTING OF ATLANTA,
INC., a Georgia corporation,
By:
-----------------------------
Its:
-------------------------
JACOR BROADCASTING CORPORATION,
an Ohio corporation
By:
-----------------------------
Its:
-------------------------
JACOR BROADCASTING OF FLORIDA,
INC., a Florida corporation
ACCEPTED AND AGREED AS OF
THE DATE FIRST ABOVE WRITTEN:
BANQUE PARIBAS, as Agent
<PAGE> 14
By:
-------------------------
Its:
---------------------
14
<PAGE> 15
STATE OF_________________ )
) ss:
COUNTY OF________________ )
On February __, 1996, before me, the undersigned, a notary public
in and for said state and county, personally appeared __________________,
personally known to me (or proved to me on the basis of satisfactory evidence),
to be the persons who executed the within instrument as the
_____________________________________, on behalf of JACOR BROADCASTING OF TAMPA
BAY, INC., a Florida corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
-------------------------------
Notary Public
My Commission Expires:
<PAGE> 16
STATE OF__________________ )
) ss:
COUNTY OF_________________ )
On February __, 1996, before me, the undersigned, a notary public
in and for said state and county, personally appeared __________________,
personally known to me (or proved to me on the basis of satisfactory evidence),
to be the persons who executed the within instrument as the
_____________________________________, on behalf of JACOR BROADCASTING OF
ATLANTA, INC., a Georgia corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
-------------------------------
Notary Public
My Commission Expires:
-------------------------------
<PAGE> 17
STATE OF__________________ )
) ss:
COUNTY OF_________________ )
On February __, 1996, before me, the undersigned, a notary public
in and for said state and county, personally appeared __________________,
personally known to me (or proved to me on the basis of satisfactory evidence),
to be the persons who executed the within instrument as the
_____________________________________, on behalf of JACOR BROADCASTING
CORPORATION, an Ohio corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
-------------------------------
Notary Public
My Commission Expires:
-------------------------------
<PAGE> 18
STATE OF__________________ )
) ss:
COUNTY OF_________________ )
On February __, 1996, before me, the undersigned, a notary public
in and for said state and county, personally appeared __________________,
personally known to me (or proved to me on the basis of satisfactory evidence),
to be the persons who executed the within instrument as the
_____________________________________, on behalf of JACOR BROADCASTING OF
FLORIDA, INC., a Florida corporation, the corporation therein named, and
acknowledged to me that the corporation executed the within instrument pursuant
to its bylaws or a resolution of its board of directors.
WITNESS MY HAND AND OFFICIAL SEAL.
(NOTARIAL STAMP OR SEAL)
-------------------------------
Notary Public
My Commission Expires:
-------------------------------
<PAGE> 19
SCHEDULE I TO
TRADEMARK SECURITY AGREEMENT
<TABLE>
<CAPTION>
Registration
Trademark No. and Date Record Owner
- --------- ------------ ------------
<S> <C> <C>
If You Miss a 1,839,687 Jacor Broadcasting of
Day You Miss a 6/14/94 Atlanta, Inc.
Lot
The Big One 1,837,073 Jacor Broadcasting
5/17/94 Corporation
Aunt Beaulah 1,839,681 Jacor Broadcasting of
6/14/94 Florida, Inc.
Atlanta's First 1,831,582 Jacor Broadcasting of
4/19/94 Atlanta, Inc.
The Power Pig 1,625,242 Jacor Broadcasting of
11/27/90 Tampa Bay, Inc.
</TABLE>
<PAGE> 1
RETURN TO:
Alexandra V. Bergstein, Esq.
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive, Suite 2100
Chicago, IL 60606
DEED TO SECURE DEBT AND SECURITY AGREEMENT
THIS DEED TO SECURE DEBT AND SECURITY AGREEMENT (hereinafter
referred to as this "Deed") made and entered into this___day of
February, 1996, by and between JACOR BROADCASTING OF ATLANTA, INC., a Georgia
corporation, having a mailing address in care of Jacor Communications, Inc.,
1300 PNC Center, 201 East Fifth Street, Cincinnati, Ohio 45202, Attn: R.
Christopher Weber (hereinafter referred to as "Grantor"), and BANQUE PARIBAS,
having a mailing address at 227 West Monroe Street, Suite 3300, Chicago,
Illinois 60606, Attention: Steve Heinen (hereinafter referred to as "Grantee"),
as Agent for the Banks, the Co-Agents and the Interest Rate Providers as those
terms are defined in that certain Credit Agreement (the "Credit Agreement")
dated as of February__, 1996, among Jacor Communications, Inc., Agent
and each of The First National Bank of Boston and Bank of America Illinois, as
Co- Agents. All capitalized terms not otherwise defined herein shall be defined
as set forth in the Credit Agreement.
W I T N E S S E T H:
That for and in consideration of the sum of Ten and No/100
Dollars ($10.00) and other valuable consideration, the receipt and sufficiency
whereof are hereby acknowledged, and in order to secure the indebtedness and
other obligations of Grantor hereinafter set forth, Grantor does hereby grant,
bargain, sell, convey, assign, transfer and set over unto Grantee and the
successors and assigns of Grantee all of the following described land and
interests in land, estates, easements, rights, improvements, property, fixtures,
equipment, furniture,
<PAGE> 2
furnishings, appliances and appurtenances (hereinafter collectively referred to
as the "Premises"):
(a) All that tract or parcel of land and easements more particularly described
in Exhibit "A" attached hereto and by this reference made a part hereof
(hereinafter referred to as the "Land").
(b) All buildings, structures and improvements of every nature whatsoever now or
hereafter situated on the Land, and all gas and electric fixtures, radiators,
heaters, engines and machinery, boilers, ranges, elevators and motors, plumbing
and heating fixtures, carpeting and other floor coverings, fire extinguishers
and any other safety equipment required by governmental regulation or law,
washers, dryers, water heaters, mirrors, mantels, air conditioning apparatus,
refrigerating plants, refrigerators, cooking apparatus and appurtenances, window
screens, awnings and storm sashes, which are or shall be attached to said
buildings, structures or improvements and all other furnishings, furniture,
fixtures, machinery, equipment, appliances, building supplies and materials and
other items used or intended to be used in the construction of any buildings or
improvements, books and records, chattels, inventory, accounts, farm products,
consumer goods, general intangibles and personal property of every kind and
nature whatsoever now or hereafter owned by Grantor and located in, on or about,
or used or intended to be used with or in connection with the use, operation or
enjoyment of the Premises (excluding, however, licenses and permits issued by
the FCC, as hereinafter defined, to the extent that it is unlawful to grant a
security interest in or security title to any such licenses and permits or to
the extent that the grant of any such security interest in any such license or
permit would result in the forfeiture of any such license or permit or a default
under any such license or permit), including all extensions, additions,
improvements, betterments, after-acquired property, renewals, replacements and
substitutions, or proceeds from a permitted sale of any of the foregoing, and
all the right, title and interest of Grantor in any such furnishings, furniture,
fixtures, machinery, equipment, appliances and
2
<PAGE> 3
personal property subject to or covered by any prior security agreement,
conditional sales contract, chattel mortgage or similar lien or claim, together
with the benefit of any deposits or payments now or hereafter made by Grantor or
on behalf of Grantor, all tradenames, trademarks, servicemarks, logos and
goodwill related thereto which in any way now or hereafter belong, relate or
appertain to the Premises, or any part thereof or are now or hereafter acquired
by Grantor and all inventory, accounts, chattel paper, documents, equipment,
fixtures, farm products, consumer goods and general intangibles constituting
proceeds acquired with cash proceeds of any of the property described
hereinabove, all of which are hereby declared and shall be deemed to be fixtures
and accessions to the Land and a part of the Premises as between the parties
hereto and all persons claiming by, through or under them, and which shall be
deemed to be a portion of the security for the indebtedness herein described and
to be secured by this Deed. The location of the above described collateral is
also the location of the Land.
(c) All easements, rights-of-way, strips and gores of land, vaults, streets,
ways, alleys, passages, sewer rights, waters, water courses, water rights and
powers, minerals, flowers, shrubs, crops, trees, timber and other emblements now
or hereafter located on the Land or under or above the same or any part or
parcel thereof, and all estates, rights, titles, interests, privileges,
liberties, tenements, hereditaments and appurtenances, reversion and reversions,
remainder and remainders, whatsoever, in any way belonging, relating or
appertaining to the Premises or any part thereof, or which hereafter shall in
any way belong, relate or be appurtenant thereto, whether now owned or hereafter
acquired by Grantor.
(d) All income, rents, issues, profits and revenues of the Premises from time to
time accruing (including without limitation all payments under leases or
tenancies,
3
<PAGE> 4
proceeds of insurance, condemnation payments, tenant security deposits whether
held by Grantor or in a trust account, and escrow funds), and all the estate,
right, title, interest, premises, possession, claim and demand whatsoever at
law, as well as in equity, of Grantor of, in and to the same; reserving only the
right to Grantor to collect and apply the same (other than insurance proceeds
and condemnation payments) so long as no Event of Default (as hereinafter
defined) exists.
(e) Any and all sales contracts, now existing or hereafter to be signed by
Grantor, for all or any portion of the Premises.
TO HAVE AND TO HOLD the Premises and all parts, rights, members
and appurtenances thereof, to the use, benefit and behalf of Grantee and the
successors and assigns of Grantee, IN FEE SIMPLE forever; and Grantor covenants
that Grantor is lawfully seized and possessed of the Premises as aforesaid, and
has good right to convey the same, that the same is unencumbered except for
matters of record, and that Grantor does warrant and will forever defend the
title thereto against the claims of all persons whomsoever, except as to those
matters of record.
This conveyance is intended to operate and is to be construed
as a deed passing the title to the Premises to Grantee and is made under those
provisions of the existing laws of the State of Georgia relating to deeds to
secure debt, and not as a mortgage, and is given to secure the following
described indebtedness:
(a) The obligations of Grantor arising under or defined in that certain
Subsidiary Guaranty (the "Guaranty") of even date herewith made by the
Guarantors (as defined in the Guaranty) in favor of Grantee and all extensions
and renewals thereof, all amendments thereto and all obligations of Grantor
under the other Loan Documents. All
4
<PAGE> 5
references to the Guaranty shall mean the Guaranty and any amendments made
thereto from time to time;
(b) Any and all additional advances made by Grantee to protect or preserve the
Premises or the lien hereof on the Premises, or for Taxes (as hereinafter
defined) or insurance premiums as hereinafter provided (whether or not the
original Grantor remains the owner of the Premises at the time of such
advances); and
(c) Any and all other indebtedness, however incurred, which may now or hereafter
be due and owing from Grantor to Grantee, now existing or hereafter coming into
existence, however and whenever incurred or evidenced, whether express or
implied, direct or indirect, absolute or contingent, or due or to become due,
and all renewals, modifications, consolidations and extensions thereof (all of
the foregoing described in paragraphs (a), (b) and (c) being collectively
referred to as the "Obligations").
Should the Obligations be paid according to the tenor and
effect thereof when the same shall become due and payable, then this Deed shall
be cancelled and surrendered.
Grantor hereby further covenants and agrees with Grantee as
follows:
ARTICLE I
1.1 Payment of Obligations. Grantor will pay, or cause to be paid, the
Obligations when due.
1.2 Taxes, Liens, and Other Charges.
(a) Taxes. Grantor will pay, or cause to be paid before they become delinquent:
5
<PAGE> 6
All of the following (hereinafter collectively called the
"Taxes"): all taxes, assessments and governmental charges and levies upon it or
its income, profits or property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with Generally Accepted Accounting Principles.
(b) On the first day of each month while there exists any one or more Events of
Default, a deposit with Grantee equal to one-twelfth of the annual charges, as
estimated by Grantee, for the Taxes and premiums for insurance required under
Section 1.3, below. Such amount shall be held by or on behalf of Grantee and
shall be applied to pay such Taxes and premiums when the same become due.
Grantee shall not be required to pay any interest or earnings on such sums.
Grantor hereby pledges all such sums as additional collateral for the
Obligations. If the amount held by Grantee is not sufficient to pay the Taxes
and premiums when due, Grantor shall, promptly upon request of Grantee, pay to
Grantee any amount necessary to make up such deficiency.
(c) If Grantee is not establishing an escrow for Taxes, then within 20 days
after demand therefor, Grantor shall deliver to Grantee the original, or a
photostatic copy, of the official receipt evidencing payment of Taxes or other
proof of payment satisfactory to Grantee. Notwithstanding the provisions of
Section 1.2(a), any tax or special assessment which is a lien on the Premises
may be paid in installments provided that each installment is paid on or prior
to the date when the same is due without the imposition of any penalty.
(d) Except as otherwise permitted in the Credit Agreement, Grantor will not
suffer any mechanic's, materialman's, laborer's, statutory or other lien to be
created and to remain outstanding upon all or any part of the Premises.
6
<PAGE> 7
1.3 Insurance.
(a) Grantor will maintain with financially sound and reputable insurance
companies insurance on the Premises, including fixtures and all personal
property owned by Grantor and used in the operation of the Premises, in
accordance with Section 6.6 of the Credit Agreement, subject to the following
terms and conditions:
(i) Such insurance shall contain a provision requiring that the coverage
evidenced thereby shall not be terminated or materially modified without 30
days' prior written notice to Grantee. If Grantor fails to carry any insurance
required to be carried by Grantor under the terms of this Deed, Grantee, at its
option, may procure and maintain such insurance and Grantor will promptly
reimburse Grantee for any premiums paid by Grantee for such insurance. The
originals or appropriate certificates of all policies of insurance required to
be carried under this Deed, bearing notations evidencing the payment of premiums
or accompanied by other evidence satisfactory to Grantee of such payment, shall
be delivered to Grantee concurrently with the execution and delivery hereof.
Grantor shall deliver to Grantee a new policy (or certificate, in the case of
insurance for which only certificates have been previously furnished) bearing
such notation or accompanied by such other evidence as replacement for any
expiring policy at least 30 days before the date of such expiration.
(ii) All policies of insurance required by this Section 1.3 shall contain a
lender's loss payee endorsement in favor of Grantee and a waiver of insurer's
right of subrogation against funds paid under the lender's loss payee
endorsement. In case of a loss payable under such insurance for damage to or
destruction of the Premises, the right to adjust all claims under such insurance
policies (jointly with Grantor), and the application of the proceeds of any such
claim, are assigned to Grantee.
7
<PAGE> 8
Grantor hereby assigns to Grantee all amounts recoverable under any such policy.
Except as may be otherwise provided in tenant leases approved by the Grantee,
the amount collected by Grantee, at the option of Grantee, may be used in any
one or more of the following ways: (i) applied to the payment of any sums then
in default to Grantee hereunder; (ii) used to fulfill any of the covenants
contained herein which Grantor has failed to fulfill, as Grantee may determine;
(iii) unless the insurer denies liability to any insured, used to restore the
Premises to a condition satisfactory to Grantee on such terms and conditions as
Grantee may determine; (iv) released to Grantor; and (v) applied upon the
Obligations if the Obligations are then matured. Provided that there is no
continuing Event of Default hereunder, in the event of casualty causing less
than $100,000 in damage, the insurance proceeds will be disbursed to Grantor for
repair or restoration of the Premises. Grantee is hereby irrevocably appointed
by Grantor as attorney-in-fact of Grantor to assign any policy in the event of
the foreclosure of this Deed or other extinguishment of the Obligations, and
Grantor shall have no right to reimbursement for premiums unearned at the time
of any such assignment.
(iii) In the event of a conflict between any provisions of Section 1.3 and the
terms of the Subsidiary Security Agreement, as defined in the Credit Agreement,
relating to insurance, the provision in the Subsidiary Security Agreement will
control.
1.4 Condemnation. All awards heretofore or hereafter made by any public or
quasi-public authority to the present and any subsequent owner of the Premises
by virtue of an exercise of the right of eminent domain by such authority,
including any award for a taking of title, possession or right of access to a
public way, or for any change of grade of streets affecting the Premises, are
hereby assigned to Grantee and Grantee, at its option, is hereby authorized,
directed and empowered to collect and receive
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the proceeds of any such award from the authorities making the same and to give
proper receipts and acquittances therefor, and, at Grantee's election, may use
such proceeds in any one or more of the following ways: (a) use the same or any
part thereof to fulfill any of the covenants contained herein which Grantor has
failed to fulfill, as Grantee may determine, (b) use the same or any part
thereof to replace or restore the Premises to a condition satisfactory to
Grantee, (c) apply the same against the Obligations if the Obligations are then
matured, or (d) release the same to Grantor. Grantee will have the right to
intervene and participate (jointly with Grantor) in any proceedings for and in
connection with any such taking. Upon request of Grantee, Grantor will make,
execute and deliver all assignments and other instruments sufficient for the
purpose of assigning all such awards to Grantee free, clear and discharged of
all encumbrances. Provided that there is no continuing Event of Default
hereunder, in the event of a taking by condemnation or eminent domain resulting
in an award of less than $100,000, the award will be disbursed to Grantor for
restoration of the Premises (to the extent required for such restoration).
1.5 Care of Premises.
(a) Grantor will do all things necessary to maintain, preserve, protect and keep
the Premises in good repair, working order and condition in accordance with
Section 6.8 of the Credit Agreement.
(b) Grantor will not remove or demolish nor alter the structural character of
any improvement located on the Land (other than tenant improvements or other
improvements minor in nature to Grantor's business operations) without the
written consent of Grantee, subject, however, to the provisions of Section
1.5(a).
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(c) If the Premises or any part thereof is damaged by fire or any other cause,
Grantor will give immediate written notice thereof to Grantee.
(d) Grantor will comply or cause compliance with all laws, rules, regulations,
orders, writs, judgments, injunctions, decrees or awards to which it may be
subject in accordance with Section 6.7 of the Credit Agreement.
(e) If all or any part of the Premises shall be damaged by fire or other
casualty, Grantor will promptly restore the Premises to the equivalent of its
original condition or other condition satisfactory to Grantee; and if a part of
the Premises shall be damaged through condemnation, Grantor will promptly
restore, repair or alter the remaining portions of the Premises in a manner
satisfactory to Grantee. Notwithstanding the foregoing, Grantor shall not be
obligated to so restore unless, in each instance, Grantee agrees to make
available to Grantor (pursuant to a procedure satisfactory to Grantee) any net
insurance or condemnation proceeds actually received by Grantee hereunder in
connection with such casualty loss or condemnation, to the extent such proceeds
are required to defray the expense of such restoration; provided, however, that
the insufficiency of any such insurance or condemnation proceeds to defray the
entire expense of restoration shall in no way relieve Grantor of its obligation
to restore. In the event all or any portion of the Premises shall be damaged or
destroyed by fire or other casualty or by condemnation, Grantor shall promptly
deposit with Grantee, to be held in an interest-bearing account with interest
payable to Grantor, a sum equal to the amount by which the estimated cost of the
restoration of the Premises (as determined by Grantee in its good-faith
judgment) exceeds the actual net insurance or condemnation proceeds received by
Grantee in connection with such damage or destruction.
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1.6 Leases and Other Agreements Affecting Premises.
(a) Assignment. Grantor hereby transfers and assigns to Grantee all present and
future leases of any part of the Premises where the gross annual rental of such
Premises equals or exceeds $50,000 (the "Leases"), all guarantees of any
lessee's performance thereunder, and all rents, income, revenues and profits
arising out of the Premises, all as further security for the payment of the
Obligations. The rights assigned hereunder include but are not limited to all of
Grantor's rights (a) to make material modifications of the Leases; (b) to
terminate or to accept the surrender thereof; (c) to waive or release the
lessees from the observance or performance by the lessees of any material
covenant or condition of the Leases; and (d) to give any consent to any
assignment of the Leases or any sublease of any part of the Premises.
(b) Duties of Grantor. Grantor will observe and perform all covenants and
conditions to be observed or performed by the lessor under the Leases and
enforce the observance and performance of the Leases by the lessees. Grantor
will not cancel, surrender, terminate, or materially alter, amend or modify any
Leases, release any party liable thereunder or consent to the assignment of the
interests of any lessees without the prior written consent of Grantee which
consent will not be unreasonably withheld; and Grantee will be deemed to have
consented to any such items if Grantee fails to object thereto within 5 days of
receipt of a written request for Grantee's consent.
(c) Rights of Grantee. If Grantor fails to observe or perform any covenant or
condition to be observed or performed by Grantor under any of the Leases,
Grantee, without obligation to do so and without releasing Grantor from its
obligation to do so, may upon 10 days' prior written notice to Grantee, perform
such covenant or condition and, to the extent that Grantee incurs any
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costs or pays any monies in connection therewith, including any costs or
expenses of litigation, the costs and expenses will be due on demand and will be
included in the indebtedness secured hereby and will bear interest from the
incurring or payment thereof at the rate equal to four percent (4%) per annum in
excess of the Eurodollar Base Rate but not less than eighteen percent (18%) per
annum and not more than the highest rate permitted by applicable law (the
"Default Rate").
(d) Indemnification. Grantee will not be obligated to perform or discharge any
obligation or duty of Grantor under any of the Leases, and the acceptance of
this Assignment does not constitute an assumption of any such obligation or
duty. Grantee will not be deemed to have any responsibility for the control,
care, management or repair of the Premises or any responsibility or liability
for any negligence in the management, operation, upkeep, repair or control of
the Premises resulting in loss, injury or death to any lessee, licensee,
employee, stranger or other person. Grantor will indemnify and hold Grantee
harmless against all liabilities, losses and damages that Grantee may incur
under the Leases or under or by reason of this assignment except for Grantee's
grossly negligent acts or liabilities, losses and damages arising out of
Grantee's possession or control of the Premises.
(e) Rent. Provided that no Event of Default exists, Grantor will have the right
to collect all rents under any Lease, provided that upon the occurrence and
continuance of an Event of Default, Grantee may take such actions with respect
to the Leases and the rents, issues and profits (including the notification to
lessees to make rent payments directly to Grantee) from the Premises, as
permitted by law or in equity, including, but not limited to, the remedies set
forth in Article II, below.
(f) Contracts. Grantor shall not enter into any contract for the management of
the Premises or appoint a rental
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agent for the Premises without the prior written consent of Grantee.
1.7 Environmental Matters. Grantor hereby makes the same representations and
warranties to Grantee as to itself and the Premises as are set forth in Section
5.8 of the Credit Agreement as to the Company and the Subsidiaries and the
property owned or leased by any of them, and Grantor hereby agrees to indemnify
Grantee as to Environmental Claims in accordance with Section 9.7 of the Credit
Agreement.
1.8 Security Agreement.
(a) This instrument is intended to be a security agreement pursuant to the
Uniform Commercial Code for any of the items specified above as part of the
Premises which may be subject to a security interest pursuant to the applicable
version of the Uniform Commercial Code, and Grantor hereby grants the Grantee a
security interest in and a security title to such items.
(b) Filings. Grantor agrees to execute and deliver to the Grantee upon request,
any financing statements, as well as extensions, renewals and amendments
thereof, in such form as the Grantee may require to perfect a security interest
with respect to said items. Grantor shall pay all costs of filing such financing
statements and any extensions, renewals, amendments and releases thereof, and
shall pay all reasonable costs and expenses of any record searches for financing
statements the Grantee may require.
(c) Other Liens. Without the prior written consent of Grantee, Grantor shall not
create or suffer to be created any Lien in, of or on any of the property or
assets of Grantor except for Liens permitted under Section 6.17 of the Credit
Agreement and except for purchase money security interests in or leases of
equipment. Grantor shall
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keep its books, records and documents concerning the
Premises available for inspection in accordance with Section 6.9 of the Credit
Agreement.
(d) Contracts. Grantor will observe and perform all covenants and conditions to
be performed by Grantor under any contracts which are included within the
Premises, will enforce such contracts, will not materially modify such
contracts, terminate such contracts or release parties thereto without consent
of the Grantee and will not assign or encumber its interest therein. The
assignment and grant of a security interest in the Premises does not constitute
an assumption by the Grantee of an obligation or duty thereunder.
(e) Remedies. Upon the occurrence and continuance of any Event of Default,
Grantee shall have the remedies of a secured party under the Uniform Commercial
Code and, at Grantee's option, may also invoke the remedies provided in this
instrument, the Loan Documents and under applicable law. In exercising any of
said remedies, Grantee may proceed against the items of real property and any
items of personal property specified above as part of the Premises separately or
together and in any order whatsoever, without in any way affecting the
availability of Grantee's remedies under the Uniform Commercial Code or of the
remedies in this instrument. Taking possession of any of the Premises and the
performance of the obligations of Grantor thereunder will not operate to cure or
waive any default or prohibit the taking of any other action by Grantee under
any instrument or at law or in equity to enforce the payment of the Obligations
or to realize upon any other security or guarantee therefor. Grantee may, so far
as Grantor can give authority therefor, enter upon any premises on which the
Premises or the books and records relating to the Premises are located and take
possession of and remove the same therefrom. Grantor waives all claims for
damages by reason of any seizure, repossession, retention or sale of the
Premises
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under the terms hereof. Any requirement of reasonable notice, if necessary, will
be met if such notice is given in accordance with Section 3.7 at least 10 days
before the time of the sale or other disposition of the Premises. The net
proceeds arising from the disposition of the Premises, after deducting Grantee's
expenses, will be applied to the Obligations in the order determined by Grantee.
If any excess remains after the discharge of all for the Obligations and the
payment of all such expenses, it will be paid to Grantor.
(f) Conflicts. In the event of any conflict between this Section and the
Subsidiary Security Agreement (as defined in the Credit Agreement) the provision
in the Subsidiary Security Agreement shall control.
(g) Corporate Existence. Grantor warrants that (i) Grantor's (that is,
"Debtor's") name, identity or corporate structure and residence or principal
place of business are as set forth in Section 1.8(h) hereof; (ii) Grantor (that
is, "Debtor") has been using or operating under said name, identity or corporate
structure without change for the time period set forth in Section 1.8(h) hereof;
and (iii) the location of the collateral is upon the Land. Grantor covenants and
agrees that Grantor will furnish Grantee with notice of any change in the
matters addressed by clauses (i) or (iii) of this Section 1.8(g) within thirty
(30) days of the effective date of any such change and Grantor will promptly
execute any financing statements or other instruments deemed necessary by
Grantee to prevent any filed financing statement from becoming misleading or
losing its perfected status.
(h) Compliance with UCC. The information contained in this Section 1.8(h) is
provided in order that this Deed shall comply with the requirements of the
Uniform Commercial Code, as enacted in the State of Georgia.
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1.9 Expenses. Grantor will pay or reimburse Grantee, upon demand therefor, for
all reasonable attorney's fees, costs and expenses actually incurred by Grantee
in any suit, action, legal proceeding or dispute of any kind in which Grantee is
made a party or appears as party plaintiff or defendant, affecting the
Obligations, this Deed or the interest created herein, or the Premises,
including, but not limited to, the exercise of the power of sale contained in
this Deed, any condemnation action involving the Premises or any action to
protect the security hereof, but excepting therefrom any willful misconduct by
Grantee or any breach of this Deed by Grantee; and all such amounts paid by
Grantee shall be added to the indebtedness secured by the lien of this Deed.
1.10 Other Liens. It is agreed that the lien hereby created shall take
precedence over and be a prior lien to any other lien of any character whether
vendor's, materialmen's or mechanic's lien hereafter created on the Premises,
and in the event the proceeds of the Obligations secured hereby as set forth
herein are used to pay off and satisfy any liens heretofore existing on the
Premises other than Liens permitted under Section 6.17 of the Credit Agreement,
then Grantee is, and shall be, subrogated to all of the rights, liens and
remedies of the holders of the liens so satisfied.
1.11 Limit of Validity. If from any circumstances whatsoever fulfillment of any
provision of this Deed or of the Guaranty, at the time performance of such
provision shall be due, shall involve transcending the limit of validity
presently prescribed by any applicable usury statute or any other applicable
law, with regard to obligations of like character and amount, then ipso facto
the obligation to be fulfilled shall be reduced to the limit of such validity,
so that in no event shall any exaction be possible under this Deed or under the
Guaranty that is in excess of the current limit of such validity,
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but such obligation shall be fulfilled to the limit of such validity. The
provisions of this Section 1.11 shall control every other provision of this Deed
and of the Guaranty.
ARTICLE II
2.1 Events of Default. All of the Obligations shall become due, at the option of
Grantee, if any one or more of the following events (each an "Event of Default")
shall occur and be continuing beyond any applicable grace or notice period:
(a) Default (as defined therein) occurs under the Credit Agreement or a default
or Default (as defined therein) occurs under any other instrument now or
hereafter securing the Obligations; or
(b) The breach by Grantor of any covenant contained in Article I herein or any
representation or warranty made or deemed made by or on behalf of Grantor to
Grantee in Article I herein is materially false on the date as of which it was
made.
2.2 Acceleration of Maturity. If an Event of Default shall have occurred and is
continuing, then the Obligations shall, at the option of Grantee, immediately
become due and payable without notice or demand, time being of the essence of
this Deed; and no omission on the part of Grantee to exercise such option when
entitled to do so shall be construed as a waiver of such right.
2.3 Grantee's Right to Enter and Take Possession, Operate and Apply Revenues.
(a) If an Event of Default shall have occurred and is continuing, then Grantor,
upon demand of Grantee, shall forthwith surrender to Grantee the actual
possession of
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the Premises and to the extent permitted by law, Grantee itself, or by such
officers or agents as it may appoint, may enter and take possession of all the
Premises without the appointment of a receiver, or an application therefore, and
may exclude Grantor and its agents and employees wholly therefrom, and may have
joint access with Grantor to the books, papers and accounts of Grantor.
(b) If Grantor shall for any reason fail to surrender or deliver the Premises or
any part thereof after such demand by Grantee, Grantee may obtain a judgment or
decree conferring upon Grantee the right to immediate possession or requiring
Grantor to deliver immediate possession of the Premises to Grantee. Grantor will
pay to Grantee, upon demand, all expenses of obtaining such judgment or decree,
including reasonable compensation to Grantee, its attorneys and agents; and all
such expenses and compensation shall, until paid, be secured by the lien of this
Deed.
(c) Upon every such entering upon or taking of possession, Grantee may hold,
store, use, operate, manage and control the Premises and conduct the business
thereof, and from time to time (i) make all necessary and proper maintenance,
repairs, renewals, replacements, additions, betterments and improvements thereto
and thereon and purchase or otherwise acquire additional fixtures, personalty
and other property; (ii) insure or keep the Premises insured; (iii) manage and
operate the Premises and exercise all the rights and powers of Grantor to the
same extent as Grantor could in its own name or otherwise with respect to the
same; and (iv) enter into any and all agreements with respect to the exercise by
others of any of the powers herein granted Grantee, all as Grantee from time to
time may determine to be in its best interest. Grantee may collect and receive
all the rents, issues, profits and revenues from the Premises, including those
past due as well as those accruing thereafter, and, after deducting (aa) all
expenses of taking, holding, managing
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and operating the Premises (including compensation for the services of all
persons employed for such purposes); (bb) the cost of all such maintenance,
repairs, renewals, replacements, additions, betterments, improvements, purchases
and acquisitions; (cc) the cost of such insurance; (dd) such taxes, assessments
and other similar charges as Grantee may at its option pay; (ee) other proper
charges upon the Premises or any part thereof; and (ff) the reasonable
compensation, expenses and disbursements of the attorneys and agents of Grantee,
Grantee shall apply the remainder of the moneys and proceeds so received by
Grantee, to the payment of indebtedness secured hereby in such manner as it may
elect.
(d) Whenever all that is due under the Guaranty and under any of the terms,
covenants, conditions and agreements of this Deed, shall have been paid and all
events of Default made good, Grantee shall surrender possession of the Premises
to Grantor, its successors or assigns. The same right of taking possession,
however, shall exist if any subsequent Event of Default shall occur and be
continuing.
2.4 Performance by Grantee of Defaults by Grantor. If there shall occur an Event
of Default hereunder in the payment, performance or observance of any term,
covenant or condition of this Deed, Grantee may, at its option, pay, perform or
observe the same, and all payments made or costs or expenses incurred by Grantee
in connection therewith, shall be secured hereby and shall be, without demand,
immediately repaid by Grantor to Grantee with interest thereon as provided in
the Guaranty. Grantee shall determine in its reasonable judgment the necessity
for any such actions and of the amounts to be paid. Grantee is hereby empowered
to enter and to authorize others to enter upon the Premises or any part thereof
for the purpose of performing or observing any such defaulted term, covenant or
condition without thereby becoming
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liable to Grantor or any person in possession holding under Grantor.
2.5 Receiver. If an Event of Default shall have occurred and is continuing,
Grantee, upon application to a court of competent jurisdiction, shall be
entitled as a matter of strict right without notice and without regard to the
occupancy or value of any security for the Obligations or the solvency of any
party bound for its payment, to the appointment of a receiver to take possession
of and to operate the Premises and to collect and apply the rents, issues,
profits and revenues thereof. The receiver shall have all of the rights and
powers permitted under the laws of the State of Georgia. Grantor will pay to
Grantee upon demand all expenses, including receiver's fees, attorney's fees,
costs and agent's compensation, incurred pursuant to the provisions of this
Paragraph 2.05; and all such expenses shall be secured by this Deed.
2.6 Enforcement.
(a) If an Event of Default shall have occurred and is continuing, Grantee, at
its option, may sell the Premises or any part of the Premises at public sale or
sales before the door of the courthouse of the county in which the Premises or
any part of the Premises is situated, to the highest bidder for cash, in order
to pay the indebtednesses secured hereby and accrued interest thereon and
insurance premiums, liens, assessments, taxes and charges, including utility
charges, if any, with accrued interest thereon, and all expenses of the sale and
of all proceedings in connection therewith, including actual attorneys' fees, if
incurred, after advertising the time, place and terms of sale once a week for
four (4) weeks immediately preceding such sale (but without regard to the number
of days) in a newspaper in which Sheriff's sales are advertised in said county.
At any such public sale, Grantee may execute and deliver to the purchaser a
conveyance of the Premises or any part of the Premises in
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fee simple, with full warranties of title and to this end, Grantor hereby
constitutes and appoints Grantee the agent and attorney-in-fact of Grantor to
make such sale and conveyance, and thereby to divest Grantor of all right, title
or equity that Grantor may have in and to the Premises and to vest the same in
the purchaser or purchasers at such sale or sales, and all the acts and doings
of said agent and attorney-in-fact are hereby ratified and confirmed and any
recitals in said conveyance or conveyances as to facts essential to a valid sale
shall be binding upon Grantor. The aforesaid power of sale and the agency hereby
granted are coupled with an interest and are irrevocable by death or otherwise,
are granted as cumulative of the other remedies provided hereby or by law for
collection of the indebtednesses secured hereby and shall not be exhausted by
one exercise thereof but may be exercised until full payment of all
indebtednesses secured hereby.
(b) If an Event of Default shall have occurred and is continuing, Grantee may,
in addition to and not in abrogation of the rights covered under subparagraph
(a) of this Section 2.6, either with or without entry or taking possession as
herein provided or otherwise, proceed by a suit or suits in law or in equity or
by any other appropriate proceeding or remedy (i) to enforce payment of the
Guaranty or the performance of any term, covenant, condition or agreement of
this Deed or any other right, and (ii) to pursue any other remedy available to
it, all as Grantee shall determine most effectual for such purposes.
2.7 Purchase by Grantee. Upon any foreclosure sale, Grantee may bid for and
purchase the Premises and shall be entitled to apply all or any part of the
indebtedness secured hereby as a credit to the purchase price.
2.8 Application of Proceeds of Sale. In the event of a foreclosure sale of the
Premises, the proceeds of said sale shall be applied, first, to the expenses of
such
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sale and of all proceedings in connection therewith, including attorneys' fees,
then to insurance premiums, liens, assessments, taxes and charges including
utility charges advanced by Grantee, then to payment of the accrued interest on
the Obligations, then to the outstanding principal balance of the Obligations,
and finally the remainder, if any, shall be paid to Grantor.
2.9 Grantor as Tenant Holding Over. In the event of any such foreclosure sale by
Grantee, Grantor shall be deemed a tenant holding over and shall forthwith
deliver possession to the purchaser or purchasers at such sale or summarily
dispossessed according to provisions of law applicable to tenants holding over.
2.10 Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws.
Grantor agrees to the full extent permitted by law, that upon the occurrence of
an Event of Default on the part of Grantor hereunder, neither Grantor nor anyone
claiming through or under it shall or will set up, claim or seek to take
advantage of any appraisement, valuation, stay, extension, homestead, exemption
or redemption laws now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Deed, or the absolute sale of the Premises,
or the final and absolute putting into possession thereof, immediately after
such sale, of the purchasers thereat, and Grantor, for itself and all who may at
any time claim through or under it, hereby waives to the full extent that it may
lawfully so do, the benefit of all such laws, and any and all right to have the
assets comprised in the security intended to be created hereby marshalled upon
any foreclosure hereof.
2.11 Leases. Grantee, at its option, is authorized to foreclose this Deed
subject to the rights of any tenants of the Premises, and the failure to make
any such tenants parties to any such foreclosure proceedings and to foreclose
their rights will not be, nor be asserted to be by
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Grantor, a defense to any proceedings instituted by Grantee to collect the sums
secured hereby.
2.12 Discontinuance of Proceedings and Restoration of the Parties. In case
Grantee shall have proceeded to enforce any right, power or remedy under this
Deed by foreclosure, entry or otherwise, and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to Grantee, then and in every such case Grantor and Grantee shall be
restored to their former positions and rights hereunder, and all rights, powers
and remedies of Grantee shall continue as if no such proceeding had been taken.
2.13 Remedies Cumulative. No right, power or remedy conferred upon or reserved
to Grantee by this Deed is intended to be exclusive of any other right, power or
remedy, but each and every such right, power and remedy shall be cumulative and
concurrent and shall be in addition to any other right, power and remedy given
hereunder or now or hereafter existing at law or in equity or by statute.
2.14 Waiver.
(a) No delay or omission of Grantee or of any holder of the Guaranty to exercise
any right, power or remedy accruing upon the occurrence of an Event of Default
shall exhaust or impair any such right, power or remedy or shall be construed to
be a waiver of any such Default, or acquiescence therein; and every right, power
and remedy given by this Deed to Grantee may be exercised from time to time and
as often as may be deemed expedient by Grantee. No consent or waiver, expressed
or implied, by Grantee to or of any breach or Event of Default by Grantor in the
performance of the obligations thereof hereunder shall be deemed or construed to
be a consent or waiver to or of any other breach or Event of Default in the
performance of the same or any other obligations of Grantor
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hereunder. Failure on the part of Grantee to complain of any act or failure to
act or to declare an Event of Default, irrespective of how long such failure
continues, shall not constitute a waiver by Grantee of its rights hereunder or
impair any rights, powers or remedies consequent on any breach or Default by
Grantor.
(b) If Grantee (i) grants forbearance or an extension of time for the payment of
any sums secured hereby; (ii) takes other or additional security for the payment
of any sums secured hereby; (iii) waives or does not exercise any right granted
herein or in the Guaranty; (iv) releases any part of the Premises from the lien
of this Deed or otherwise changes any of the terms, covenants, conditions or
agreements of the Guaranty or this Deed (provided, that the written agreement of
Grantor to any such change shall first have been obtained); (v) consents to the
filing of any map, plat or replat affecting the Premises; (vi) consents to the
granting of any easement or other right affecting the Premises; or (vii) makes
or consents to any agreement subordinating the lien hereof, any such act or
omission shall not release, discharge, modify, change or affect the original
liability under the Guaranty, this Deed or any other obligation of Grantor or
any subsequent purchaser of the Premises or any part thereof, or any maker,
co-signer, endorser, surety or guarantor; nor shall any such act or omission
preclude Grantee from exercising any right, power or privilege herein granted or
intended to be granted upon the occurrence of an Event of Default then made or
any subsequent Default; nor, except as otherwise expressly provided in an
instrument or instruments executed by Grantee, shall the lien or security title
of this Deed be altered thereby. In the event of the sale or transfer by
operation of law or otherwise of all or any part of the Premises, Grantee,
without notice, is hereby authorized and empowered to deal with any such vendee
or transferee with reference to the Premises or the indebtedness secured hereby,
or with reference to any of the terms, covenants, conditions or
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agreements hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any
liabilities, obligations or undertakings.
2.15 Suits to Protect the Premises. Grantee shall have power (a) to institute
and maintain such suits and proceedings as it may deem expedient to prevent any
impairment of the Premises by any acts which may be unlawful or in violation of
this Deed, with notice of commencement of such suits and proceedings to be given
by Grantee to Grantor, (b) to preserve or protect its interest in the Premises
and in the rents, issues, profits and revenues arising therefrom, and (c) to
restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid, if the enforcement of or compliance with such enactment, rule or order
would impair the security hereunder or be prejudicial to the interest of
Grantee.
2.16 Grantee May File Proofs of Claim. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other proceedings affecting Grantor, its creditors or its property, Grantee, to
the extent permitted by law, shall be entitled to file such proofs of claim and
other documents as may be necessary or advisable in order to have the claims of
Grantee allowed in such proceedings for the entire amount due and payable by
Grantor under this Deed at the date of the institution of such proceedings and
for any additional amount which may become due and payable by Grantor hereunder
after such date.
2.17 WAIVER OF GRANTOR'S RIGHTS. BY EXECUTION OF THIS DEED AND BY INITIALING
THIS SECTION 2.17, GRANTOR EXPRESSLY: ACKNOWLEDGES THE RIGHT TO ACCELERATE THE
OBLIGATIONS EVIDENCED BY THE GUARANTY AND THE POWER OF ATTORNEY GIVEN HEREIN TO
GRANTEE TO SELL THE PREMISES BY NONJUDICIAL
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<PAGE> 26
FORECLOSURE UPON DEFAULT BY GRANTOR WITHOUT ANY JUDICIAL HEARING AND WITHOUT ANY
NOTICE OTHER THAN SUCH NOTICE (IF ANY) AS IS SPECIFICALLY REQUIRED TO BE GIVEN
UNDER THE PROVISIONS OF THIS DEED OR BY LAW; WAIVES ANY AND ALL RIGHTS WHICH
GRANTOR MAY HAVE UNDER THE CONSTITUTION OF THE UNITED STATES (INCLUDING THE
FIFTH AND FOURTEENTH AMENDMENTS THEREOF), THE VARIOUS PROVISIONS OF THE
CONSTITUTIONS FOR THE SEVERAL STATES, OR BY REASON OF ANY OTHER APPLICABLE LAW,
TO NOTICE AND TO JUDICIAL HEARING PRIOR TO THE EXERCISE BY GRANTEE OF ANY RIGHT
OR REMEDY HEREIN PROVIDED TO GRANTEE, EXCEPT SUCH NOTICE (IF ANY) AS IS
SPECIFICALLY REQUIRED TO BE PROVIDED IN THIS DEED OR BY LAW; ACKNOWLEDGES THAT
GRANTOR HAS READ THIS DEED AND ANY AND ALL QUESTIONS REGARDING THE LEGAL EFFECT
OF THIS DEED AND ITS PROVISIONS HAVE BEEN EXPLAINED FULLY TO GRANTOR AND GRANTOR
HAS CONSULTED WITH COUNSEL OF GRANTOR'S CHOICE PRIOR TO EXECUTING THIS DEED; AND
ACKNOWLEDGES THAT ALL WAIVERS OF THE AFORESAID RIGHTS OF GRANTOR HAVE BEEN MADE
KNOWINGLY, INTENTIONALLY AND WILLINGLY BY GRANTOR AS PART OF A BARGAINED-FOR
LOAN TRANSACTION
INITIALED BY GRANTOR:
---------------
ARTICLE III
3.1 Successors and Assigns. This Deed shall inure to the benefit of and be
binding upon Grantor and Grantee and their respective heirs, executors, legal
representatives, successors and assigns. Whenever a reference is made in this
Deed to Grantor or Grantee such reference shall be deemed to include a reference
to the heirs, executors, legal representatives, successors and assigns of
Grantor or Grantee.
26
<PAGE> 27
3.2 Terminology. All personal pronouns used in this Deed whether used in the
masculine, feminine or neuter gender, shall include all other genders; the
singular shall include the plural, and vice versa. Titles and Articles are for
convenience only and neither limit nor amplify the provisions of this Deed
itself, and all references herein to Articles, Paragraphs or subparagraphs
thereof, shall refer to the corresponding Articles, Paragraphs or subparagraphs
thereof, of this Deed unless specific reference is made to such Articles,
Paragraphs or subparagraphs thereof of another document or instrument.
3.3 Severability. If any provision of this Deed or the application thereof to
any person or circumstance shall be invalid or unenforceable to any extent, the
remainder of this Deed and the application of such provisions to other persons
or circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
3.4 Other Liens. It is agreed that the lien hereby created shall take precedence
over and be a prior lien to any other lien of any character whether vendor's,
materialmen's or mechanic's lien hereafter created on the Premises, and in the
event the proceeds of the Indebtedness secured hereby as set forth herein are
used to pay off and satisfy any liens heretofore existing on the Premises (other
than Liens permitted under Section 6.7 of the Credit Agreement), then Grantee
is, and shall be, subrogated to all of the rights, liens and remedies of the
holders of the lien so satisfied.
3.5 Applicable Law. This Deed shall be interpreted, construed and enforced
according to the laws of the State of Illinois. Notwithstanding the foregoing,
the internal laws of the State of Georgia shall govern the conveyancing,
encumbrancing, lien priority and validity of this Deed and procedures with
respect to the foreclosure hereof.
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<PAGE> 28
3.6 FCC Consents. Notwithstanding anything to the contrary contained herein or
any other agreement, instrument or document executed by one or more of the
Grantor and other parties and delivered to Grantee, Grantee will not take, or
cause to be taken, any action pursuant to the Deed, which would constitute or
result in any assignment of license or any change of control of the Grantor, if
such assignment of license or change of control would require, under then
existing law, the prior approval of the Federal Communications Commission
("FCC") without first obtaining such prior approval of the FCC. The Grantor
agrees to take any action which Grantee may reasonably request in order to
obtain from the FCC such approval as may be necessary to enable Grantee to
exercise and enjoy the full rights and benefits granted to the holder of the
Indebtedness secured by this Deed, and each other agreement, instrument and
document delivered to Grantee in connection therewith, including specifically,
at the cost and expense of the Grantor, the use of its best efforts to assist in
obtaining approval of the FCC for any action or transaction contemplated by this
Deed for which such approval is or shall be required by law and specifically,
without limitation, upon request, to prepare, sign and file with the FCC the
assignor's or transferor's portion of any application or applications for
consent to the assignment of license or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of (a) any sale
or sales of all or any part of the Premises by or on behalf of Grantee, or (b)
any assumption by Grantee of voting or management rights with respect to all or
any part of the Premises effected in accordance with the terms of this Deed.
3.7 Notices, Demands and Requests. All notices, demands and requests given or
required to be given by either party hereto to the other party shall be in
writing and shall be deemed to have been properly given if sent by
28
<PAGE> 29
certified mail, postage prepaid, return receipt requested, addressed as follows:
To Grantor at: Jacor Broadcasting of Atlanta, Inc.
c/o Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attn: R. Christopher Weber
Copy to: Gerald F. O'Connell, Jr., Esq.
Graydon Head & Ritchey
P.O. Box 6464
Cincinnati, Ohio 45201
To Grantee at: Banque Paribas
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
Attn: Steve Heinen
Mark Radzik
Copy to: Randall J. Rademaker, Esq.
Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60606
or to such other address as Grantor or Grantee may from time to time designate
by ten (10) days' prior written notice.
29
<PAGE> 30
IN WITNESS WHEREOF, Grantor has executed this Deed under seal,
as of the___day of February, 1996.
GRANTOR:
Signed, sealed and delivered
by Grantor in the
presence of:
JACOR BROADCASTING OF
ATLANTA, INC., a Georgia
corporation
By:
- ------------------------------ ------------------------
Unofficial Witness Name:
Title:
-----------------------------
NOTARY PUBLIC
Commission Expiration Date:
ATTEST:
-----------------------
Name: [CORPORATE SEAL]
Title:
[NOTARIAL SEAL]
<PAGE> 31
EXHIBIT A
ALL THAT TRACT OR PARCEL OF LAND, together with all improvements located
thereon, lying and being in the City of Atlanta, and in Land Lots 178 and 179 of
the 14th District of Fulton County, Georgia, and being more particularly bounded
and described as follows:
BEGINNING AT A POINT marked by a rebar set at the intersection of the southern
margin of the right-of-way of Simpson Road (50-foot right-of-way) with the east
line of Land Lot 179 of the 14th District of Fulton County, Georgia; THENCE
South along the east line of Land Lot 179 South 00 degrees 03 minutes 45 seconds
East a distance of 774.75 feet to a railroad iron found; THENCE South 89 degrees
48 minutes 30 seconds West a distance of 1,235.26 feet to a point marked by a
rebar set; THENCE North 89 degrees 57 minutes 51 seconds West a distance of
568.04 feet to a point marked by a rebar set; THENCE North 02 degrees 20 minutes
09 seconds East a distance of 684.86 feet to a point marked by a rebar set on
the southern margin of the right-of-way of Simpson Road; THENCE easterly along
the southern margin of the right-of-way of Simpson Road, and following the
curvature thereof, a distance of 84.77 feet to a point; THENCE easterly along
the southern margin of the right-of-way of Simpson Road North 89 degrees 23
minutes 03 seconds East a distance of 202.25 feet to a point; THENCE easterly
along the southern margin of the right-of-way of Simpson Road, and following the
curvature thereof, a distance of 205.26 feet to point; THENCE easterly and
northeasterly along the southern and southeastern margin of the right-of-way of
Simpson Road, and following the curvature thereof, a distance of 188.48 feet to
a point; THENCE northeasterly along the southeastern margin of the right-of-way
of Simpson Road North 48 degrees 03 minutes 39 seconds East a distance of 499.92
feet to a point; THENCE northeasterly along the southeastern margin of the
right-of-way of Simpson Road, and following the curvature thereof, a distance of
78.73 feet to a point; THENCE northeasterly, easterly and southeasterly along
the southeastern, southern and southwestern margin of the right-of-way of
Simpson Road, and following the curvature thereof, a distance of 217.95 feet to
a point; THENCE southeasterly along the southwestern margin of the right-of-way
of Simpson Road, and following the curvature thereof, a
distance of 91.54 feet to a point; THENCE southeasterly along the southwestern
margin of the right-of-way
A-1
<PAGE> 32
of Simpson Road, and following the curvature thereof, a distance of 134.33 feet
to a point; THENCE southeasterly along the southwestern margin of the
right-of-way of Simpson Road South 35 degrees 12 minutes 13 seconds East a
distance of 200.18 feet to a point; THENCE southeasterly and easterly along the
southwestern and southern margin of the right-of-way of Simpson Road, and
following the curvature thereof, a distance of 205.26 feet to the POINT OF
BEGINNING; the aforesaid parcel being shown and delineated on plat of survey
dated June 8, 1989, made for JACOR Broadcasting of Atlanta, Inc., a Georgia
corporation, made by William W. DeLoach, Georgia Registered Land Surveyor No.
1711, Pearson & Associates, Inc., Forest Park, Georgia, which plat is recorded
in Plat Book 163, Page 32, Fulton County, Georgia Superior Court records, and
which plat is incorporated herein by reference thereto; the aforesaid parcel
containing 36.687 acres according to the aforesaid plat.
A-2
<PAGE> 1
DEED OF TRUST AND SECURITY AGREEMENT
THIS DEED OF TRUST AND SECURITY AGREEMENT (as amended from
time to time, this "Deed of Trust") dated as of February __, 1996, between JACOR
BROADCASTING OF COLORADO, INC. (the "Grantor"), a Colorado corporation, with a
place of business at 201 East Fifth Street, Cincinnati, Ohio, and the Public
Trustee in the County of Weld and the State of Colorado (the "Public Trustee").
WHEREAS, this Deed of Trust is made to secure and enforce the
payment of up to Three Hundred Million Dollars ($300,000,000.00) for any of the
following:
(a) the Guaranteed Debt of Grantor arising under or defined in
that certain Subsidiary Guaranty (the "Guaranty") dated as of Febru-
ary __, 1996, made by the Guarantors (as defined in the Guaranty) in
favor of Beneficiary (as such term is hereinafter defined) and all
extensions and renewals thereof and all further amendments thereto:
(b) all obligations of Grantor arising under or defined in
that certain (i) Intercompany Acquisition Note and (ii) Intercompany
Demand Note, each as defined in that certain Credit Agreement dated as
of February __, 1996, (the "Credit Agreement") among Jacor
Communications, Inc., an Ohio corporation, Banque Paribas, as Agent,
and each of The First National Bank of Boston and Bank of America Illi-
nois, as Co-Agents and all extensions and renewals thereof and all
further amendments thereto. All capitalized terms not otherwise defined
herein shall be defined as set forth in the Credit Agreement.
<PAGE> 2
(c) the repayment of all other sums, with interest thereon, as
are advanced by Beneficiary in accordance with this Deed of Trust,
including but not limited to such amounts as are required to pay Taxes
(as hereinafter defined), insurance premiums for insurance required to
be carried by Grantor hereunder, mechanic's or materialmen's liens with
respect to labor, materials and/or supplies furnished or delivered to
the Trust Property and all other liens or deeds of trust which are or
might be prior to the lien of this Deed of Trust (other than Liens
permitted under Section 6.17 of the Credit Agreement) (all indebtedness
or covenants set forth in, and all obligations evidenced by, the
Guaranty, this Deed of Trust, the Subsidiary Security Agreement, or any
other instrument or agreement referred to in this recital are herein
referred to, collectively, as the "Indebtedness");
NOW, THEREFORE, the Grantor does hereby grant, bargain, sell,
convey, transfer, assign and set over to the Public Trustee the following: the
real property situated in the City of Brighton, Weld County, Colorado (the
"Premises"), described in detail in Exhibit A, which is attached hereto and
incorporated herein and made a part of this document for all purposes, and all
buildings, structures and improvements of every nature whatsoever now or
hereafter located on such Premises (the "Improvements"):
TOGETHER WITH all right, title and interest of the Grantor in
and to the following property, rights and interests (the Premises and the
Improvements together with such property, rights and interests being hereinafter
collectively called the "Trust Property"):
2
<PAGE> 3
(A) all machinery, equipment, fixtures and other property of
every kind and nature whatsoever owned by the Grantor, or in which the
Grantor has or shall have an interest, now or hereafter located upon
the Trust Property, or appurtenances thereto, and usable in connection
with the Trust Property (the "Equipment");
(B) all easements, rights-of-way, gores of land, streets,
ways, alleys, passages, air rights, sewer rights, mineral and soil
rights, water courses, water rights and powers and all appurtenances
whatsoever, in any way belonging, relating or appertaining to any of
the Premises, the improvements or the Equipment, or which hereafter
shall in any way belong, relate or be appurtenant thereto, whether now
owned or here- after acquired by the Grantor;
(C) to the extent permitted by and subject to the applicable
law, all after-acquired property located in or on, or attached to, or
used or intended to be used in connection with, or with the operation
of, the Trust Property or any part thereof;
TO HAVE AND TO HOLD the Trust Property and all parts thereof,
together with all rights, estates, powers and privileges appurtenant or incident
thereto, unto the Public Trustee IN TRUST, for the benefit of Banque Paribas,
(hereinafter referred to as the "Beneficiary," which term shall include all
subsequent holders of the Guaranty) having its principal office and mailing
address at 227 West Monroe Street, Suite 3300, Chicago, Illinois 60606, as Agent
for the Banks, the Co-Agents and the Interest Rate Providers; provided that upon
the occurrence of an Event of Default (as such term is hereinafter defined), the
Beneficiary, at Beneficiary's option, may, as provided for herein, declare all
of the Indebtedness
3
<PAGE> 4
to be immediately due and payable and may invoke any and all remedies provided
herein or by applicable law.
PROVIDED FURTHER, HOWEVER, that if the Grantor shall keep,
perform and observe all of the covenants, promises, provisions, terms and
conditions in the Guaranty, in this Deed of Trust and in the other documents
evidencing or otherwise constituting the Indebtedness to be kept, performed or
observed by the Grantor, then this Deed of Trust and the grants, conveyances and
assignments herein contained shall cease and be void and shall be released by
the Beneficiary upon the written request and at the expense of the Grantor;
otherwise to remain in full force and effect.
The Grantor further covenants and agrees with the Beneficiary
as follows:
ARTICLE I
Covenants of the Grantor
1.1 Performance of Deed of Trust and Security Agreement. The
Grantor shall cause to be performed, observed and complied with all provisions
hereof and of the Guaranty.
1.2 Title. Grantor is the lawful owner of the Trust Property;
title to the Trust Property is vested in Grantor and is free, clear and
unencumbered except for easements, agreements and restrictions of record;
Grantor has good right and full power to convey and encumber the Trust Property
and to execute this Deed of Trust; Grantor will make such further assurances of
title as Beneficiary may require; and Grantor will warrant and defend the Trust
Property against all claims and demands whatsoever.
1.3 Corporate Existence and Standing. Grantor is a corporation
duly incorporated, validly existing and in good
4
<PAGE> 5
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
1.4 Authorization and Validity. Grantor has the corporate
power and authority and legal right to execute and deliver this Deed of Trust
and to perform its obligations hereunder. The execution and delivery by Grantor
of the Deed of Trust and the performance of its obligations hereunder have been
duly authorized by proper corporate proceedings, and this Deed of Trust
constitutes the legal, valid and binding obligation of Grantor enforceable
against Grantor in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
1.5 No Conflict; Government Consent. Grantor hereby makes the
same representations and warranties to Beneficiary as to itself as are set forth
in Section 5.3 of the Credit Agreement as to the Company and the Subsid- iaries.
1.6 Indebtedness. Grantor will promptly pay, or cause to be
paid, the Indebtedness when due.
1.7 Taxes. Grantor will pay, or cause to be paid before they
become delinquent:
(a) All of the following (hereinafter
collectively called the "Taxes"): all taxes, assessments and governmental
charges and levies upon it or its income, profits or property, except those
which are being contested in good faith by appropriate proceedings and with
respect to which adequate reserves have been set aside in accordance with
Generally Accepted Accounting Principles.
(b) On the first day of each month while
there exists any one or more Events of Default (as that term is defined
5
<PAGE> 6
below), a deposit with Beneficiary equal to one-twelfth of the annual charges,
as estimated by Beneficiary, for the Taxes and premiums for insurance required
under Section 1.11, below. Such amount shall be held by or on behalf of
Beneficiary and shall be applied to pay such Taxes and premiums when the same
become due. Beneficiary shall not be required to pay any interest or earnings on
such sums. Grantor hereby pledges all such sums as additional collateral for the
Indebtedness. If the amount held by Beneficiary is not sufficient to pay the
Taxes and premiums when due, Grantor shall, promptly upon request of
Beneficiary, pay to Beneficiary any amount necessary to make up such deficiency.
(c) If Beneficiary is not establishing an
escrow for Taxes, then within 20 days after demand therefor, Grantor shall
deliver to Beneficiary the original, or a photostatic copy, of the official
receipt evidencing payment of Taxes or other proof of payment satisfactory to
Beneficiary. Notwithstanding the provisions of Section 1.07(a), any tax or
special assessment which is a lien on the Trust Property may be paid in
installments provided that each installment is paid on or prior to the date when
the same is due without the imposition of any penalty.
1.8 Compliance with Laws. Grantor will comply or cause
compliance with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject in accordance with
Section 6.7 of the Credit Agreement.
1.9 Condition of Trust Property. Grantor will do all things
necessary to maintain, preserve, protect and keep the Trust Property in good
repair, working order and condition in accordance with Section 6.8 of the Credit
Agreement.
1.10 Improvements. Grantor will not remove or demolish, or
suffer or permit others to remove or demolish, any im-
6
<PAGE> 7
provements installed or placed on the Trust Property (other than tenant
improvements or other improvements minor in nature to Grantor's business
operations) or, subject to the provisions of Section 3.8, cause or permit such
improvements to be materially changed or altered without the prior written
consent of Beneficiary not to be unreasonably withheld, as well as Beneficiary's
prior written consent to the plans and specifications relating thereto, and
Grantor will not institute or cause to be instituted any proceedings that could
change the permitted use of the Trust Property from the use presently zoned.
1.11 Insurance. Grantor will maintain with financially sound
and reputable insurance companies insurance on the Trust Property, including
fixtures and all personal property owned by Grantor and used in the operation of
the Trust Property, in accordance with Section 6.6 of the Credit Agreement,
subject to the following terms and conditions:
(a) Such insurance shall contain a provision
requiring that the coverage evidenced thereby shall not be terminated or
materially modified without 30 days' prior written notice to Beneficiary. If
Grantor fails to carry any insurance required to be carried by Grantor under the
terms of this Deed of Trust, Beneficiary, at its option, may procure and
maintain such insurance and Grantor will promptly reimburse Beneficiary for any
premiums paid by Beneficiary for such insurance. The originals or appropriate
certificates of all policies of insurance required to be carried under this Deed
of Trust, bearing notations evidencing the payment of premiums or accompanied by
other evidence satisfactory to Beneficiary of such payment, shall be delivered
to Beneficiary concurrently with the execution and delivery hereof. Grantor
shall deliver to Beneficiary a new policy (or certificate, in the case of
insurance for which only certificates have been previously furnished)
bearing such notation or accompanied by
7
<PAGE> 8
such other evidence as replacement for any expiring policy at least 30 days
before the date of such expiration.
(b) All policies of insurance required by
this Section 1.11 shall contain a lender's loss payee endorsement clause in
favor of Beneficiary and a waiver of insurer's right of subrogation against
funds paid under the lender's loss payee endorsement. In case of a loss payable
under such insurance for damage to or destruction of the Trust Property, the
right to adjust all claims under such insurance policies (jointly with Grantor),
and the application of the proceeds of any such claim, are assigned to
Beneficiary. Grantor hereby assigns to Beneficiary all amounts recoverable under
any such policy. Except as may be otherwise provided in tenant leases approved
by the Beneficiary, the amount collected by Beneficiary, at the option of
Beneficiary, may be used in any one or more of the following ways: (i) applied
to the payment of any sums then in default to Beneficiary hereunder; (ii) used
to fulfill any of the covenants contained herein which Grantor has failed to
fulfill, as Beneficiary may determine; (iii) unless the insurer denies liability
to any insured, used to restore the Trust Property to a condition satisfactory
to Beneficiary on such terms and conditions as Beneficiary may determine; (iv)
released to Grantor; and (v) applied upon the Indebtedness if the Indebtedness
is then matured. Provided that there is no continuing Event of Default
hereunder, in the event of casualty causing less than $100,000 in damage, the
insurance proceeds will be disbursed to Grantor for repair or restoration of the
Trust Property. Beneficiary is hereby irrevocably appointed by Grantor as
attorney-in-fact of Grantor to assign any policy in the event of the foreclosure
of this Deed of Trust or other extinguishment of the Indebtedness, and Grantor
shall have no right to reimbursement for premiums unearned at the time of any
such assignment.
8
<PAGE> 9
(c) In the event of a conflict between
any provisions of section 3.10 and the terms of the Subsidiary Security
Agreement, as defined in the Credit Agreement, relating to insurance, the
provision in the Subsidiary Security Agreement will control.
1.12 Sale, Transfer or Encumbrance. Except as
otherwise permitted in the Credit Agreement, Grantor will
not further mortgage, sell or convey, grant a deed of trust, pledge, grant a
security interest in, execute a land contract or installment sales contract, or
otherwise dispose of, further encumber or suffer the encumbrance of, whether by
operation of law or otherwise, any or all of its interest in the Trust Property
without Beneficiary's prior written consent.
1.13 Mechanics' Liens. Except as otherwise permitted in the
Credit Agreement, Grantor will keep and maintain the Trust Property free from
all liens of persons supplying labor and materials for the construction,
modification, repair or maintenance of any building or improvements whether on
the Trust Property or not.
1.14 Eminent Domain. All awards heretofore or hereafter made
by any public or quasi-public authority by virtue of an exercise of the right of
eminent domain by such authority, including any award for a taking of title,
possession or right of access to a public way, or for any change of grade of
streets affecting the Trust Property, are hereby assigned to Beneficiary and
Beneficiary, at its option, is hereby authorized, directed and empowered to
collect and receive the proceeds of any such award from the authorities making
the same and to give proper receipts and acquittances therefor, and, at
Beneficiary's election, may use such proceeds in any one or more of the
following ways: (a) use the same or any part thereof to fulfill any of the
covenants contained herein which Grantor has failed to fulfill, as Beneficiary
may determine, (b) use the same or any part thereof to replace or
9
<PAGE> 10
restore the Trust Property to a condition satisfactory to Beneficiary, (c) apply
the same against the Indebtedness if the Indebtedness is then matured, or (d)
release the same to Grantor. Beneficiary will have the right to intervene and
participate (jointly with Grantor) in any proceedings for and in connection with
any such taking. Upon request of Beneficiary, Grantor will make, execute and
deliver all assignments and other instruments sufficient for the purpose of
assigning all such awards to Beneficiary free, clear and discharged of all
encumbrances. Provided that there is no continuing Event of Default hereunder,
in the event of a taking by condemnation or eminent domain resulting in an award
of less than $100,000, the award will be disbursed to Grantor for restoration of
the Trust Property (to the extent required for such restoration).
1.15 Unpaid Taxes. In the event that any governmental agency
claims that any tax or other governmental charge or Tax is due, unpaid or
payable by Grantor or Beneficiary upon the Indebtedness (other than income tax,
franchise tax or similar tax on the interest or premium receivable by
Beneficiary under the Credit Agreement) and including any recording tax,
documentary stamps or other tax or imposition on the Notes or this Deed of
Trust; Grantor forthwith will pay such tax in accordance with Sections 9.3 and
9.7 of the Credit Agreement and, within a reasonable time thereafter, deliver to
Beneficiary satisfactory proof of payment thereof or if Grantor is contesting
the same in good faith, Grantor will establish with the Beneficiary security in
form, substance and amount reasonably acceptable to the Beneficiary for the
payment thereof.
1.16 Environmental Matters. Grantor hereby makes the same
representations and warranties to Mortgagee as to itself and the Trust Property
as are set forth in Section 5.8 of the Credit Agreement as to the Company and
the Subsidiaries and the property owned or leased by any of them, and
10
<PAGE> 11
Grantor hereby agrees to indemnify Mortgagee as to Environmental Claims in
accordance with Section 9.7 of the Credit Agreement.
1.17 Assignment of Rents; Leases.
(a) Assignment. Grantor hereby transfers
and assigns to Beneficiary all present and future leases of any part of the
Trust Property where the gross annual rental of such Trust Property equals or
exceeds $50,000 (the "Leases"), all guarantees of any lessee's performance
thereunder, and all rents, income, revenues and profits arising out of the Trust
Property, all as further security for the payment of the Indebtedness. The
rights assigned hereunder include but are not limited to all of Grantor's rights
(i) to make material modifications of the Leases; (ii) to terminate or to accept
the surrender thereof; (iii) to waive or release the lessees from the observance
or performance by the lessees of any material covenant or condition of the
Leases; and (iv) to give any consent to any assignment of the Leases or any
sublease of any part of the Trust Property.
(b) Duties of Grantor. Grantor will
observe and perform all covenants and conditions to be observed or
performed by the lessor under the Leases and enforce the observance
and performance of the Leases by the lessees. Grantor will not cancel,
surrender, terminate, or materially alter, amend or modify any Leases, release
any party liable thereunder or consent to the assignment of the interests of any
lessees without the prior written consent of Beneficiary which consent will not
be unreasonably withheld; and Beneficiary will be deemed to have consented to
any such items if Beneficiary fails to object thereto within 5 days of receipt
of a written request for Beneficiary's consent.
(c) Rights of Beneficiary. If Grantor
fails to observe or perform any covenant or condition to be observed or
11
<PAGE> 12
performed by Grantor under any of the Leases, Beneficiary, without obligation to
do so and without releasing Mortgagor from its obligation to do so, may upon 10
days' prior written notice to Mortgagee perform such covenant or condition and,
to the extent that Beneficiary incurs any costs or pays any monies in connection
therewith, including any costs or expenses of litigation, the costs and expenses
will be due on demand and will be included in the indebtedness secured hereby
and will bear interest from the incurring or payment thereof at the rate equal
to four percent (4%) per annum in excess of the Eurodollar Base Rate but not
less than eighteen percent (18%) per annum and not more than the highest rate
permitted by applicable law (the "Default Rate").
(d) Indemnification. Beneficiary will not be
obligated to perform or discharge any obligation or duty of Grantor under any of
the Leases, and the acceptance of this Assignment does not constitute an
assumption of any such obligation or duty. Beneficiary will not be deemed to
have any responsibility for the control, care, management or repair of the Trust
Property or any responsibility or liability for any negligence in the
management, operation, upkeep, repair or control of the Trust Property resulting
in loss, injury or death to any lessee, licensee, employee, stranger or other
person. Grantor will indemnify and hold Beneficiary harmless against all
liabilities, losses and damages that Beneficiary may incur under the Leases or
under or by reason of this assignment except for Beneficiary's grossly negligent
acts or liabilities, losses and damages arising out of Beneficiary's possession
or control of the Trust Property.
(e) Rent. Provided that no Event of Default exists,
Grantor will have the right to collect all rents under any Lease, provided that
upon the occurrence and continuance of an Event of Default, Beneficiary may take
such actions with respect to the Leases and the rents, issues and profits
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<PAGE> 13
(including the notification to lessees to make rent payments directly to
Beneficiary) from the Trust Property, as permitted by law or in equity,
including, but not limited to, the remedies set forth in Article 3 below.
(f) Contracts. Grantor shall not enter into any
contract for the management of the Trust Property or appoint a rental agent for
the Trust Property without the prior written consent of Beneficiary.
1.18 Security Agreement. This instrument is intended to be a
security agreement pursuant to the Uniform Commercial Code for any of the items
specified above as part of the Trust Property which may be subject to a security
interest pursuant to the applicable version of the Uniform Commercial Code, and
Grantor hereby grants the Beneficiary a security interest in such items.
(a) Filings. Grantor agrees that this instrument, or
a reproduction thereof, may be filed in the real estate records or other
appropriate index as a financing statement for any of the items specified above
(including fixtures) as part of the Trust Property. Any reproduction of this
instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement. Grantor agrees to execute and deliver to
the Beneficiary upon request, any financing statements, as well as extensions,
renewals and amendments thereof, and reproductions of this instrument in such
form as the Beneficiary may require to perfect a security interest with respect
to said items. Grantor shall pay all costs of filing such financing statements
and any extensions, renewals, amendments and releases thereof, and shall pay all
reasonable costs and expenses of any record searches for financing statements
the Beneficiary may require.
(b) Other Liens. Without the prior written consent of
Beneficiary, Grantor shall not create or suffer to be created
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<PAGE> 14
any Lien in, of or on any of the property or assets of Mortgagor, except for
Liens permitted under Section 6.17 of the Credit Agreement and except for
purchase money security interests in or leases of equipment. Grantor shall keep
its books, records and documents concerning the Trust Property available for
inspection in accordance with Section 6.9 of the Credit Agreement.
(c) Contracts. Grantor will observe and perform all
covenants and conditions to be performed by Grantor under any contracts which
are included within the Trust Property, will enforce such contracts, will not
materially modify such contracts, terminate such contracts or release parties
thereto without consent of the Beneficiary and will not assign or encumber its
interest therein. The assignment and grant of a security interest in the Trust
Property does not constitute an assumption by the Beneficiary of an obligation
or duty thereunder.
(d) Remedies. Upon the occurrence and continuance of
any Event of Default, Beneficiary shall have the remedies of a secured party
under the Uniform Commercial Code and, at Beneficiary's option, may also invoke
the remedies provided in this instrument, the Loan Documents and under
applicable law. In exercising any of said remedies, Beneficiary may proceed
against the items of real property and any items of personal property specified
above as part of the Trust Property separately or together and in any order
whatsoever, without in any way affecting the availability of Beneficiary's
remedies under the Uniform Commercial Code or of the remedies in this
instrument. Taking possession of any of the Trust Property and the performance
of the obligations of Grantor thereunder will not operate to cure or waive any
Event of Default or prohibit the taking of any other action by Beneficiary under
any instrument or at law or in equity to enforce the payment of the Indebtedness
or to realize upon any other security or guarantee therefor. Beneficiary may, so
far as Grantor can give authority therefor, enter upon
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<PAGE> 15
any premises on which the Trust Property or the books and records relating to
the Trust Property are located and take possession of and remove the same
therefrom. Grantor waives all claims for damages by reason of any seizure,
repossession, retention or sale of the Trust Property under the terms hereof.
Any requirement of reasonable notice, if necessary, will be met if such notice
is mailed, postage prepaid, to the address of Grantor shown in Section 4.02
below, at least 10 days before the time of the sale or other disposition of the
Trust Property. The net proceeds arising from the disposition of the Trust
Property, after deducting Beneficiary's expenses, will be applied to the
Indebtedness in the order determined by Beneficiary. If any excess remains after
the discharge of all for the Indebtedness and the payment of all such expenses,
it will be paid to Grantor.
(e) Conflicts. In the event of any
conflict between this Section and the Subsidiary Security Agreement (as defined
in the Credit Agreement) the provision in the Subsidiary Security Agreement
shall control.
ARTICLE II
Defaults
2.1 Events of Default. The entire Indebtedness shall become
due, at the option of the Beneficiary, if any one or more of the following
events (each an "Event of Default") shall occur and be continuing beyond any
applicable grace or notice period:
(a) Default (as defined therein) occurs under the
Credit Agreement or a default or Default (as defined therein) occurs under any
other instrument now or hereafter securing the Indebtedness; or
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<PAGE> 16
(b) The breach by Grantor of any covenant contained
in Article 1 herein or any representation or warranty made or deemed made by or
on behalf of Grantor to Beneficiary in Article 1 herein is materially false on
the date as of which it was made.
ARTICLE III
Remedies
3.1 Acceleration of Maturity/Foreclosure/ Receivers. At any
time while there exists an Event of Default, Beneficiary shall have all rights
and remedies provided at law or in equity or under this Deed of Trust, including
the right to accelerate the maturity of the Indebtedness, the right to foreclose
the lien of this Deed of Trust and the right to request the appointment of a
receiver.
3.2 Waivers. The failure of Beneficiary to exercise either or
both of its options to accelerate the maturity of the Indebtedness and to
foreclose the lien hereof following any Event of Default, or to exercise any
other option granted to Beneficiary of partial payments of such Indebtedness,
shall neither constitute a waiver of any such Event of Default or of
Beneficiary's options hereunder nor establish, extend or affect any grace period
for payments due under the Notes, but such options shall remain continuously in
force. Acceleration of maturity, once claimed hereunder by Beneficiary, may, at
Beneficiary's option, be rescinded by written acknowledgment to that effect by
Beneficiary and shall not affect Beneficiary's right to accelerate maturity upon
or after any future Event of Default.
3.3 Cost of Enforcement. The Beneficiary shall be entitled to
and the Grantor will pay on demand all costs and expenses (including, without
limitation, reasonable attorney's fees and expenses, title examination fees,
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appraisal fees, courts costs, receivers' fees and management expenses) incurred
by or on behalf of the Beneficiary in analyzing, evaluating and enforcing its
rights under this Deed of Trust and the Guaranty, or either of them, in any
litigation to foreclose this Deed of Trust, or occasioned by an Event of Default
or by any action or proceeding in which the Beneficiary is made a party by
reason of the execution of this Deed of Trust and the Guaranty, or either of
them, or in which in the sole discretion of the Beneficiary it becomes advisable
or necessary to defend or uphold the rights of the Beneficiary under said
instruments, or either of them to the extent such costs and expenses are
permitted under applicable law (collectively, "Permitted Expenses"). The amount
of the Permitted Expenses, together with interest thereon at a rate per annum
equal to the Default Rate from the date incurred until paid by the Grantor,
shall be immediately due and payable and be secured by this Deed of Trust, and
all of the benefits of this Deed of Trust and the priority thereof shall extent
and apply to the Indebtedness so secured.
3.4 Sale of the Trust Property; Deed of Trust
Effective as Mortgage.
Upon the occurrence of an Event of Default the Beneficiary may
invoke any remedies permitted by applicable law. The Beneficiary or its designee
may purchase the Trust Property at any sale.
The Public Trustee shall apply the proceeds of any foreclosure
sale of the Trust Property, or any part thereof, in the following order of
priority: (a) on account of all reasonable costs and expenses incident to the
foreclosure proceedings, including all such items as are mentioned in Section
3.03 hereof; (b) all other items that, under the terms of this Deed of Trust,
constitute secured indebtedness additional to the Indebtedness, with interest
thereon at the Default Rate; (c) all principal
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<PAGE> 18
and interest remaining unpaid under the Notes, in the order of priority
specified by the Beneficiary in its sole discretion; and (d) the balance to
Grantor or its successors or assigns, as its interests may appear.
3.5 Suits to Protect the Beneficiary's Interests. The
Beneficiary shall have the power and authority in its name or in the name and on
behalf of the Grantor to institute and maintain any suits and proceedings as the
Beneficiary may deem advisable (a) to prevent any impairment of the Trust
Property by acts which may be unlawful or any violation of this Deed of Trust,
(b) to preserve and protect its interest in the Trust Property and (c) to
restrain the enforcement of or compliance with any legislation or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid, if the enforcement of or compliance with such enactment, rule or order
might impair the security hereunder or be prejudicial to the Beneficiary's
interest herein.
3.6 Proofs of Claim. In the case of any receivership,
insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial case or proceedings affecting the Grantor or any guarantor,
co-maker or endorser of any of the Grantor's obligations, its creditors or its
property, the Beneficiary, to the extent permitted by law, shall be entitled to
file such proofs of claim and other documents as may be necessary or advisable
in order to have its claims allowed in such case or proceedings for the entire
Indebtedness at the date of the institution of such case or proceedings, and for
any additional amounts which may become due and payable by the Grantor after
such date.
3.7 Waiver of Appraisement, Valuation, Stay, Extension and
Redemption Laws, and Marshalling. The Grantor agrees to the full extent
permitted by law that upon the existence of an Event of Default, neither the
Grantor nor anyone claiming through or under it shall or will set up, claim
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<PAGE> 19
or seek to take advantage of any appraisement, valuation, stay, extension or
redemption laws now or hereafter in force, in order to prevent or hinder the
enforcement or foreclosure of this Deed of Trust or the absolute sale of the
Trust Property or the final and absolute putting into possession thereof,
immediately after such sale, of the purchasers thereat, and the Grantor, for
itself and all who may at any time claim through or under it, hereby waives, to
the full extent that it may lawfully do so, the benefit of such laws, and any
and all rights to have the assets comprising the Trust Property marshalled upon
any foreclosure hereof and agrees that the Beneficiary or any court having
jurisdiction to foreclose such lien may sell the Trust Property in part or as an
entirety.
3.8 Remedies Cumulative. No right, power or remedy conferred
upon or reserved to the Beneficiary by the Guaranty or this Deed of Trust or any
other instrument or agreement executed in connection therewith or otherwise
securing the Indebtedness is exclusive of any other right, power or remedy, but
each and every such right, power and remedy shall be cumulative and concurrent
and shall be in addition to any other right, power and remedy given hereunder or
under any of such instruments or agreements, or now or hereafter existing at
law, in equity or by statute.
3.9 Leases. The Beneficiary is authorized to foreclose this
Deed of Trust subject to the rights of any tenants of the Trust Property under
leases recorded prior to the date hereof, and the failure to make any such
tenants parties defendant to any such foreclosure proceedings and to foreclose
their rights will not be, nor be asserted by the Grantor to be, a defense to any
proceedings instituted by the Grantor to collect the sums secured hereby or to
collect any deficiency remaining unpaid after the foreclosure sale of the Trust
Property. Unless otherwise agreed by Beneficiary in writing, all leases and
tenancies of the Trust Property executed subsequent to the
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<PAGE> 20
date hereof, or any part thereof, shall be subordinate and inferior to the lien
of this Deed of Trust.
3.10 Deficiency. In case of a foreclosure sale of all or any
part of the Trust Property and of the application of the proceeds thereof to the
Indebtedness as provided herein, the Beneficiary shall be entitled to enforce
payment from the Grantor of all amounts then remaining due and unpaid and to
recover judgment against the Grantor for any portion thereof remaining unpaid
(together with interest thereon).
3.11 Credit Bid. If the Beneficiary shall bid at any sale of
the Trust Property by the Public Trustee or any other public officer, it shall
have the right to credit upon the amount of its bid, to the extent necessary to
satisfy such bid, the Indebtedness owing to it.
ARTICLE IV
Miscellaneous Provisions
4.1 Successors and Assigns Included in Parties. Whenever one
of the parties hereto is named or referred to herein, the successors and assigns
of such party shall be included and all covenants and agreements contained in
this Deed of Trust, by or on behalf of the Grantor shall bind and inure to the
benefit of its successors and assigns, whether so expressed or not.
4.2 Addresses for Notices, etc.
(a) Any notice, report, demand or other instrument
authorized or required to be given or furnished under this Deed of Trust to the
Grantor or the Beneficiary shall be deemed given or furnished upon deposit in
the United States mails, as registered or certified mail (return
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<PAGE> 21
receipt requested), with proper postage prepaid and addressed to the party to be
notified as follows:
The Beneficiary: Banque Paribas
227 West Monroe Street,
Suite 3300
Chicago, Illinois 60606
Attn: Steve Heinen
Mark Radzik
with a copy to: Randall J. Rademaker, Esq.
Skadden, Arps, Slate,
Meagher & Flom
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60606
The Grantor: Jacor Broadcasting
of Colorado, Inc.
c/o Jacor Communications,
Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attn: R. Christopher Weber
with a copy to: Gerald F. O'Connell, Esq.
Graydon Head & Ritchey
P.O. Box 6464
Cincinnati, Ohio 45201
(b) Either party may change the address
to which any such notice, report, demand or other instrument is to be delivered
or mailed, by furnishing ten (10) days' prior written notice of such change to
the other party.
4.3 Headings. The headings of the articles, sections,
paragraphs and subdivisions of this Deed of Trust appear as a matter of
convenience only, do not constitute a part
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<PAGE> 22
of this Deed of Trust and shall not affect the construction hereof.
4.4 Provisions Subject to Applicable Laws; Invalid Provisions
to Affect No Others. All rights, powers and remedies provided herein may be
exercised only to the extent that the exercise thereof does not violate any law
and are intended to be limited to the extent necessary so that they will not
render this Deed of Trust invalid or unenforceable. In the event that any of the
covenants, agreements, terms or provisions contained in the Guaranty or this
Deed of Trust, or in any other instrument securing the obligations evidenced by
the Guaranty, shall be deemed invalid, illegal or unenforce- able in any
respect, the validity of the remaining covenants, agreements, terms or
provisions contained herein or in the Guaranty or in any other instrument
securing the obligations evidenced by the Guaranty shall be in no way affected,
prejudiced or disturbed thereby.
4.5 Changes. Neither this Deed of Trust nor any term hereof
may be changed, waived, discharged or terminated orally, or by any action or
inaction, but only by an instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or termination is sought.
4.6 Other Liens. It is agreed that the lien hereby created
shall take precedence over and be a prior lien to any other lien of any
character whether vendor's materialmen's or mechanic's lien hereafter created on
the Trust Property, and in the event the proceeds of the Indebtedness secured
hereby as set forth herein are used to pay off and satisfy any liens heretofore
existing on the Trust Property (other than Liens permitted under Section 6.7 of
the Credit Agreement), then Grantee is, and shall be, subrogated to all of the
rights, liens and remedies of the holders of the lien so satisfied.
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<PAGE> 23
4.7 Duplicate Originals. This Deed of Trust may be executed in
any number of duplicate originals and each such duplicate original shall be
deemed to consti- tute but one and the same instrument.
4.8 Governing Law. This Deed of Trust shall be construed,
interpreted, enforced and governed by and in accordance with the law of the
State of Illinois. Notwithstanding the foregoing, the internal laws of the state
of Colorado shall govern the lien priority and validity of this Deed of Trust
and procedures with respect to the foreclosure thereof.
4.9 FCC Consents. Notwithstanding anything to the contrary
contained herein or any other agreement, instrument or document executed by one
or more of the Grantor and other parties and delivered to the Beneficiary, the
Beneficiary will not take, or cause to be taken, any action pursuant to the Deed
of Trust, which would constitute or result in any assignment of license or any
change of control of the Grantor, if such assignment of license or change of
control would require, under then existing law, the prior approval of the
Federal Communications Commission ("FCC") without first obtaining such prior
approval of the FCC. The Grantor agrees to take any action which the Beneficiary
may reasonably request in order to obtain from the FCC such approval as may be
necessary to enable the Beneficiary to exercise and enjoy the full rights and
benefits granted to the holder of the Indebtedness by this Deed of Trust, and
each other agreement, instrument and document delivered to the Beneficiary in
connection therewith, including specifically, at the cost and expense of the
Grantor, the use of its best efforts to assist in obtaining approval of the FCC
for any action or transaction contemplated by this Deed of Trust for which such
approval is or shall be required by law and specifically, without limitation,
upon request, to prepare, sign and file with the FCC the assignor's or
transferor's portion of any application or applications
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<PAGE> 24
for consent to the assignment of license or transfer of control necessary or
appropriate under the FCC's rules and regulations for approval of (a) any sale
or sales of all or any part of the Trust Property by or on behalf of the
Beneficiary, or (b) any assumption by the Beneficiary of voting or management
rights with respect to all or any part of the Trust Property effected in
accordance with the terms of this Deed of Trust.
4.10 Waiver. The right to plead any and all statutes of
limitations as a defense to any demand secured by this Deed of Trust is hereby
waived to the full extent permissible by law.
4.11 Receipt of Copy Acknowledged. The Beneficiary hereby
acknowledges that it has received a true copy of this instrument.
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<PAGE> 25
IN WITNESS WHEREOF, this Deed of Trust is executed by the
Grantor.
ATTEST: JACOR BROADCASTING OF
COLORADO, INC., a
Colorado corporation
By
- ------------------------ ------------------------
Print name: Name:
Title:
[CORPORATE SEAL]
<PAGE> 26
STATE OF )
--------------------------------)
COUNTY OF )
--------------------------------
The foregoing instrument was acknowledged before me this day
of February, 1996, by ___________, as ___________, and by___________ , as
____________ of Jacor Broadcasting of Colorado, Inc., a Colorado
corporation.
Witness my hand and official seal.
My commission expires:
--------------------------------
Notary Public
[Notary seal and stamp affixed]
<PAGE> 27
This instrument was prepared by:
Alexandra V. Bergstein, Esq.
Skadden, Arps, Slate, Meagher & Flom
Suite 2100
333 West Wacker Drive
Chicago, Illinois 60606
<PAGE> 28
Exhibit A
The SW 1/4 of the NW 1/4 of Section 31, Township 1 North, Range 67 West of the
6th P.M.
<PAGE> 1
MAXIMUM PRINCIPAL AMOUNT OF
UNPAID INDEBTEDNESS IS $300,000,000.00
OPEN-END MORTGAGE, ASSIGNMENT OF RENTS
AND LEASES AND SECURITY AGREEMENT
This Open-End Mortgage, Assignment of Rents and Leases and
Security Agreement (the "Mortgage") is made by JACOR BROADCASTING CORPORATION,
an Ohio corporation ("Mortgagor"), to BANQUE PARIBAS (the "Mortgagee"), as Agent
for the Banks, the Co-Agents and the Interest Rate Providers, as those terms are
defined in that certain Credit Agreement dated February__, 1996 (the "Credit
Agreement") among Jacor Communications, Inc., the Agent and each of The First
National Bank of Boston and Bank of America Illinois, as Co-Agents, as follows:
SECTION 1.
GRANT
1.1 PROPERTY. Mortgagor hereby grants, bargains, mortgages,
warrants, sells, encumbers, conveys, assigns and transfers to Mortgagee, its
successors and assigns forever, all estate, title and interest in and to the
following, now existing or hereafter arising (collectively, "Property");
1.1.1 the real estate described in Exhibit A attached
hereto, all of the estate, title and interest of Mortgagor in law or equity, of,
in and to such real estate and all of the privileges, easements and
appurtenances belonging to such real estate, including
<PAGE> 2
all heretofore or hereafter vacated streets or alleys which abut such real
estate;
1.1.2 all buildings and improvements of every kind
and description now existing or hereafter placed on such real estate and all
fixtures, machinery, appliances, equipment, furniture and personal property of
every kind whatsoever owned by Mortgagor and located in or on, or attached to,
and used or intended to be used in connection with the operation of such real
estate, buildings, structures or other improvements thereon or in connection
with any construction being conducted or which may be conducted thereon,
including but not limited to the electric, water, laundry, incinerating and
power equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards;
plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating,
ventilating and communications apparatus; boilers, ranges, furnaces, oil burners
or units thereof; radiators; heaters; appliances; air-cooling and air
conditioning apparatus; vacuum cleaning systems; elevators; escalators; shades;
awnings, screens, doors, storm doors and windows; stoves; refrigerators;
attached cabinets; partitions; ducts and compressors; rugs and carpets;
draperies; beds, tables, lamps and all other furniture and furnishings;
1.1.3 all rents, leases, issues and profits arising
out of any of the foregoing, including all insurance policies and payments made
under insurance policies relating to any of the foregoing and judgments, awards
and settlements resulting from any condemnation proceeding or similar taking
against the foregoing property under the power of eminent domain;
1.1.4 Mortgagor's interest in all con- tracts for the
design, development, construction, management, maintenance and/or operation of
such real estate, all licenses and permits therefor (excluding licenses and
permits issued by the FCC (as hereinafter defined) to the
2
<PAGE> 3
extent that it is unlawful to grant a mortgage on any such licenses and permits
or to the extent that the grant of any such security interest in any such
license or permit would result in the forfeiture of any such license or permit
or a default under any such license or permit), all bonds assuring payments
thereunder and all books and records related thereto; and
1.1.5 all extensions, additions, improve- ments,
betterments, renewals, substitutions and replace- ments to any of the foregoing,
and the proceeds of all of the foregoing.
1.2 SECURITY. The grant described in Section 1, above, to have
and to hold the Property is given to Mortgagee and its successors and assigns
forever, for the uses and purposes herein set forth to secure the payment
of the Indebtedness as defined in Section 2, below, and the performance of all
obligations of Mortgagor hereunder.
SECTION 2.
INDEBTEDNESS
This conveyance is made to secure the payment of up to Three
Hundred Million Dollars ($300,000,000.00) for any of the following: (a) the
Guaranteed Debt of Mortgagor arising under or defined in that certain Subsidiary
Guaranty (the "Guaranty") of even date herewith made by the Guarantors (as
defined in the Guaranty) in favor of Mortgagee and all extensions and renewals
thereof, all amendments thereto, all advances or expenses of any kind
made by Mortgagee pursuant to the provisions of this Mortgage, and (b) all
obligations of Mortgagor under the (i) Intercompany Acquisition Note and (ii)
the Intercompany Demand Note, each as defined in the Credit Agreement (the
foregoing collectively referred to as the
3
<PAGE> 4
"Notes" and, together with the obligations under the Guaranty, as the
"Indebtedness"). The Notes and Guaranty shall hereinafter be referred to
collectively as the "Security Documents." All capitalized terms not otherwise
defined herein shall be defined as set forth in the Credit Agreement. All
references to the Credit Agreement, Notes or Guaranty shall mean the Credit
Agreement, Notes or Guaranty and any amendments made thereto from time to time.
SECTION 3.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Mortgagor covenants, represents, warrants and agrees with
Mortgagee as follows:
3.1 TITLE. Mortgagor is the lawful owner of the Property;
title to the Property is vested in Mortgagor and is free, clear and unencumbered
except for easements, agreements and restrictions of record; Mortgagor has good
right and full power to convey and encumber the Property and to execute this
Mortgage; Mortgagor will make such further assurances of title as Mortgagee may
require; and Mortgagor will warrant and defend the Property against all claims
and demands whatsoever.
3.2 CORPORATE EXISTENCE AND STANDING. Mortgagor is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
3.3 AUTHORIZATION AND VALIDITY. Mortgagor has the corporate
power and authority and legal right to execute and deliver this Mortgage and to
perform its obligations hereunder. The execution and delivery
4
<PAGE> 5
by Mortgagor of the Mortgage and the performance of its obligations hereunder
have been duly authorized by proper corporate proceedings, and this Mortgage
constitutes the legal, valid and binding obligation of Mortgagor enforceable
against Mortgagor in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally.
3.4 NO CONFLICT; GOVERNMENT CONSENT. Mortgagor hereby makes
the same representations and warranties to Mortgagee as to itself as are set
forth in Section 5.3 of the Credit Agreement as to the Company and the Subsid-
iaries.
3.5 INDEBTEDNESS. Mortgagor will promptly
pay, or cause to be paid, the Indebtedness when due.
3.6 TAXES. Mortgagor will pay, or cause to be
paid, before they become delinquent:
3.6.1 All of the following (hereinafter collectively
called the "Taxes"): all taxes, assessments and governmental charges and levies
upon it or its income, profits or property, except those that are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with Generally Accepted
Accounting Principles.
3.6.2 On the first day of each month while there
exists any one or more Events of Default (as that term is defined below), a
deposit with Mortgagee equal to one-twelfth of the annual charges, as estimated
by Mortgagee, for the Taxes and premiums for insurance required under Section
3.10, below. Such amount shall be held by or on behalf of Mortgagee and shall be
applied to pay such Taxes and premiums when the same become due. Mortgagee shall
not be required to pay any interest or
5
<PAGE> 6
earnings on such sums. Mortgagor hereby pledges all such sums as additional
collateral for the Indebtedness. If the amount held by Mortgagee is not
sufficient to pay the Taxes and premiums when due, Mortgagor shall, promptly
upon request of Mortgagee, pay to Mortgagee any amount necessary to make up such
deficiency.
3.6.3 If Mortgagee is not establishing an escrow for
Taxes, then within 20 days after demand therefor, Mortgagor shall deliver to
Mortgagee the original, or a photostatic copy, of the official receipt
evidencing payment of Taxes or other proof of payment satisfactory to Mortgagee.
Notwithstanding the provisions of Section 3.6.1, any tax or special assessment
which is a lien on the Property may be paid in installments provided that each
installment is paid on or prior to the date when the same is due without the
imposition of any penalty.
3.7 COMPLIANCE WITH LAWS. Mortgagor will comply or cause
compliance with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject in accordance with
Section 6.7 of the Credit Agreement.
3.8 CONDITION OF PROPERTY. Mortgagor will do all things
necessary to maintain, preserve, protect and keep the Property in good repair,
working order and condition in accordance with Section 6.8 of the Credit
Agreement.
3.9 IMPROVEMENTS. Mortgagor will not remove or demolish, or
suffer or permit others to remove or demolish, any improvements installed or
placed on the Property (other than tenant improvements or other improvements
minor in nature to Mortgagor's business operations) or, subject to the
provisions of Section 3.8, cause or permit such improvements to be materially
changed or altered without the prior written consent of Mortgagee not to be
unreasonably withheld, as well as
6
<PAGE> 7
Mortgagee's prior written consent to the plans and specifications relating
thereto, and Mortgagor will not institute or cause to be instituted any
proceedings that could change the permitted use of the Property from the use
presently zoned.
3.10 INSURANCE. Mortgagor will maintain with financially sound
and reputable insurance companies insurance on the Property, including fixtures
and all personal property owned by Mortgagor and used in the operation of the
Property, in accordance with Section 6.6 of the Credit Agreement, subject to the
following terms and conditions:
3.10.1 Such insurance shall contain a provision
requiring that the coverage evidenced thereby shall not be terminated or
materially modified without 30 days' prior written notice to Mortgagee. If
Mortgagor fails to carry any insurance required to be carried by Mortgagor under
the terms of this Mortgage, Mortgagee, at its option, may procure and maintain
such insurance and Mortgagor will promptly reimburse Mortgagee for any premiums
paid by Mortgagee for such insurance. The originals or appropriate certificates
of all policies of insurance required to be carried under this Mortgage, bearing
notations evidencing the payment of premiums or accompanied by other evidence
satisfactory to Mortgagee of such payment, shall be delivered to Mortgagee
concurrently with the execution and delivery hereof. Mortgagor shall deliver to
Mortgagee a new policy (or certificate, in the case of insurance for which only
certificates have been previously furnished) bearing such notation or
accompanied by such other evidence as replacement for any expiring policy at
least 30 days before the date of such expiration.
3.10.2 All policies of insurance required by this
Section 3.10 shall contain a lender's loss payee endorsement in favor of
Mortgagee and a waiver of
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insurer's right of subrogation against funds paid under the lender's loss payee
endorsement. In case of a loss payable under such insurance for damage to or
destruction of the Property, the right to adjust all claims under such insurance
policies (jointly with Mortgagor), and the application of the proceeds of any
such claim, are assigned to Mortgagee. Mortgagor hereby assigns to Mortgagee all
amounts recoverable under any such policy. Except as may be otherwise provided
in tenant leases approved by the Mortgagee, the amount collected by Mortgagee,
at the option of Mortgagee, may be used in any one or more of the following
ways: (i) applied to the payment of any sums then in default to Mortgagee
hereunder; (ii) used to fulfill any of the covenants contained herein which
Mortgagor has failed to fulfill, as Mortgagee may determine; (iii) unless the
insurer denies liability to any insured, used to restore the Property to a
condition satisfactory to Mortgagee on such terms and conditions as Mortgagee
may determine; (iv) released to Mortgagor; and (v) applied upon the Indebtedness
if the Indebtedness is then matured. Provided that there is no continuing Event
of Default hereunder, in the event of casualty causing less than $100,000 in
damage, the insurance proceeds will be disbursed to Mortgagor for repair or
restoration of the Property. Mortgagee is hereby irrevocably appointed by
Mortgagor as attorney-in-fact of Mortgagor to assign any policy in the event of
the foreclosure of this Mortgage or other extinguishment of the Indebtedness,
and Mortgagor shall have no right to reimbursement for premiums unearned at the
time of any such assignment.
3.10.3 In the event of a conflict between
any provisions of section 3.10 and the terms of the Subsidiary Security
Agreement, as defined in the Credit Agreement, relating to insurance, the
provision in the Subsidiary Security Agreement will control.
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3.11 SALE, TRANSFER OR ENCUMBRANCE. Except as otherwise
permitted in the Credit Agreement, Mortgagor will not further mortgage, sell or
convey, grant a deed of trust, pledge, grant a security interest in, execute a
land contract or installment sales contract, or otherwise dispose of, further
encumber or suffer the encumbrance of, whether by operation of law or otherwise,
any or all of its interest in the Property without Mortgagee's prior written
consent.
3.12 MECHANICS' LIENS. Except as otherwise permitted in the
Credit Agreement, Mortgagor will keep and maintain the Property free from all
liens of persons supplying labor and materials for the construction,
modification, repair or maintenance of any building or improvements whether on
the Property or not.
3.13 EMINENT DOMAIN. All awards heretofore or
hereafter made by any public or quasi-public authority to the present and any
subsequent owner of the Property by virtue of an exercise of the right of
eminent domain by such authority, including any award for a taking of title,
possession or right of access to a public way, or for any change of grade of
streets affecting the Property, are hereby assigned to Mortgagee and Mortgagee,
at its option, is hereby authorized, directed and empowered to collect and
receive the proceeds of any such award from the authorities making the same and
to give proper receipts and acquittances therefor, and, at Mortgagee's election,
may use such proceeds in any one or more of the following ways: (a) use the same
or any part thereof to fulfill any of the covenants contained herein which
Mortgagor has failed to fulfill, as Mortgagee may determine, (b) use the same or
any part thereof to replace or restore the Property to a condition satisfactory
to Mortgagee, (c) apply the same against the Indebtedness if the Indebtedness is
then matured, or (d) release the same to Mortgagor. Mortgagee will have the
right to intervene and participate (jointly with Mortgagor) in any proceed-
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ings for and in connection with any such taking. Upon request of Mortgagee,
Mortgagor will make, execute and deliver all assignments and other instruments
sufficient for the purpose of assigning all such awards to Mortgagee free, clear
and discharged of all encumbrances. Provided that there is no continuing Event
of Default hereunder, in the event of a taking by condemnation or eminent domain
resulting in an award of less than $100,000, the award will be disbursed to
Mortgagor for restoration of the Property (to the extent required for such
restoration).
3.14 UNPAID TAXES. In the event that any governmental agency
claims that any tax or other governmental charge or Tax is due, unpaid or
payable by Mortgagor or Mortgagee upon the Indebtedness (other than income tax,
franchise tax or similar tax on the interest or premium receivable by Mortgagee
under the Credit Agreement) and including any recording tax, documentary stamps
or other tax or imposition on the Notes or this Mortgage; Mortgagor forthwith
will pay such tax in accordance with Sections 9.3 and 9.7 of the Credit
Agreement and, within a reasonable time thereafter, deliver to Mortgagee
satisfactory proof of payment thereof or if Mortgagor is contesting the same in
good faith, Mortgagor will establish with the Mortgagee security in form,
substance and amount reasonably acceptable to the Mort- gagee for the payment
thereof.
3.15 ENVIRONMENTAL MATTERS. Mortgagor hereby makes the same
representations and warranties to Mortgagee as to itself and the Property as are
set forth in Section 5.8 of the Credit Agreement as to the Company and the
Subsidiaries and the property owned or leased by any of them, and Mortgagor
hereby agrees to indemnify Mortgagee as to Environmental Claims in accordance
with Section 9.7 of the Credit Agreement.
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SECTION 4.
ASSIGNMENT OF RENTS AND LEASES
4.1 ASSIGNMENT. Mortgagor hereby transfers and assigns to
Mortgagee all present and future leases of any part of the Property where the
gross annual rental of such Property equals or exceeds $50,000 (the "Leases"),
all guarantees of any lessee's performance thereunder, and all rents, income,
revenues and profits arising out of the Property, all as further security for
the payment of the Indebtedness. The rights assigned hereunder include but are
not limited to all of Mortgagor's rights (a) to make material modifications of
the Leases; (b) to terminate or to accept the surrender thereof; (c) to waive or
release the lessees from the observance or performance by the lessees of any
material covenant or condition of the Leases; and (d) to give any consent to any
assignment of the Leases or any sublease of any part of the Property.
4.2 DUTIES OF MORTGAGOR. Mortgagor will observe and perform
all covenants and conditions to be observed or performed by the lessor under the
Leases and enforce the observance and performance of the Leases by the lessees.
Mortgagor will not cancel, surrender, terminate, or materially alter, amend or
modify any Leases, release any party liable thereunder or consent to the
assignment of the interests of any lessees without the prior written consent of
Mortgagee which consent will not be unreasonably withheld; and Mortgagee will be
deemed to have consented to any such items if Mortgagee fails to object thereto
within 5 days of receipt of a written request for Mortgagee's consent.
4.3 RIGHTS OF MORTGAGEE. If Mortgagor fails to observe or
perform any covenant or condition to be observed or performed by Mortgagor under
any of the Leases, Mortgagee, without obligation to do so and without re-
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leasing Mortgagor from its obligation to do so, may, upon 10 days' prior written
notice to Mortgagee, perform such covenant or condition and, to the extent that
Mortgagee incurs any costs or pays any monies in connection therewith, including
any costs or expenses of litigation, the costs and expenses will be due on
demand and will be included in the indebtedness secured hereby and will bear
interest from the incurring or payment thereof at the rate equal to four percent
(4%) per annum in excess of the Eurodollar Base Rate but not less than eighteen
percent (18%) per annum and not more than the highest rate permitted by
applicable law (the "Default Rate").
4.4 INDEMNIFICATION. Mortgagee will not be obligated to
perform or discharge any obligation or duty of Mortgagor under any of the
Leases, and the acceptance of this Assignment does not constitute an assumption
of any such obligation or duty. Mortgagee will not be deemed to have any
responsibility for the control, care, management or repair of the Property or
any responsibility or liability for any negligence in the management, operation,
upkeep, repair or control of the Property resulting in loss, injury or death to
any lessee, licensee, employee, stranger or other person. Mortgagor will
indemnify and hold Mortgagee harmless against all liabilities, losses and
damages that Mortgagee may incur under the Leases or under or by reason of this
assignment except for Mortgagee's grossly negligent acts or liabilities, losses
and damages arising out of Mortgagee's possession or control of the Property.
4.5 RENT. Provided that no Event of Default exists, Mortgagor
will have the right to collect all rents under any Lease, provided that upon the
occurrence and continuance of an Event of Default, Mortgagee may take
such actions with respect to the Leases and the rents, issues and profits
(includ-
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ing the notification to lessees to make rent payments directly to Mortgagee)
from the Property, as permitted by law or in equity, including, but not limited
to, the remedies set forth in Section 6, below.
4.6 CONTRACTS. Mortgagor shall not enter into any contract for
the management of the Property or appoint a rental agent for the Property
without the prior written consent of Mortgagee.
SECTION 5.
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
5.1 SECURITY AGREEMENT. This instrument is intended to be a
security agreement pursuant to the Uniform Commercial Code for any of the items
specified above as part of the Property which may be subject to a security
interest pursuant to the applicable version of the Uniform Commercial Code, and
Mortgagor hereby grants the Mortgagee a security interest in such items.
5.2 FILINGS. Mortgagor agrees that this instrument, or a
reproduction thereof, may be filed in the real estate records or other
appropriate index as a financing statement for any of the items specified above
(including fixtures) as part of the Property. Any reproduction of this
instrument or of any other security agreement or financing statement shall be
sufficient as a financing statement. Mortgagor agrees to execute and deliver to
the Mortgagee upon request, any financing statements, as well as extensions,
renewals and amendments thereof, and reproductions of this instrument in such
form as the Mortgagee may require to perfect a security interest with respect to
said items. Mortgagor shall pay all costs of filing such financing statements
and any extensions, renewals, amendments and releases thereof, and shall pay all
reasonable costs and expenses of any record searches for financing statements
the Mortgagee may require.
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5.3 OTHER LIENS. Without the prior written consent of
Mortgagee, Mortgagor shall not create or suffer to be created any Lien in, of or
on any of the property or assets of Mortgagor except for Liens permitted under
Section 6.17 of the Credit Agreement and except for purchase money security
interests in or leases of equipment. Mortgagor shall keep its books, records and
documents concerning the Property available for inspection in accordance with
Section 6.9 of the Credit Agreement.
5.4 CONTRACTS. Mortgagor will observe and perform all
covenants and conditions to be performed by Mortgagor under any contracts which
are included within the Property, will enforce such contracts, will not
materially modify such contracts, terminate such contracts or release parties
thereto without consent of the Mortgagee and will not assign or encumber its
interest therein. The assignment and grant of a security interest in the
Property does not constitute an assumption by Mortgagee of an obligation or duty
thereunder.
5.5 REMEDIES. Upon the occurrence and continuance of any Event
of Default, Mortgagee shall have the remedies of a secured party under the
Uniform Commercial Code and, at Mortgagee's option, may also invoke the remedies
provided in this instrument, the Loan Documents and under applicable law. In
exercising any of said remedies, Mortgagee may proceed against the items of real
property and any items of personal property specified above as part of the
Property separately or together and in any order whatsoever, without in any way
affecting the availability of Mortgagee's remedies under the Uniform Commercial
Code or of the remedies in this instrument. Taking possession of any of the
Property and the performance of the obligations of Mortgagor thereunder will not
operate to cure or waive any Event of Default or prohibit the taking of any
other action by Mortgagee under any
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instrument or at law or in equity to enforce the payment of the Indebtedness or
to realize upon any other security or guarantee therefor. Mortgagee may, so far
as Mortgagor can give authority therefor, enter upon any premises on which the
Property or the books and records relating to the Property are located and take
possession of and remove the same therefrom. Mortgagor waives all claims for
damages by reason of any seizure, repossession, retention or sale of the
Property under the terms hereof. Any requirement of reasonable notice, if
necessary, will be met if such notice is mailed, postage prepaid, to the address
of Mortgagor shown in section 7.7 below, at least 10 days before the time of the
sale or other disposition of the Property. The net proceeds arising from the
disposition of the Property, after deducting Mortgagee's expenses, will be
applied to the Indebtedness in the order determined by Mortgagee. If any excess
remains after the discharge of all for the Indebtedness and the payment of all
such expenses, it will be paid to Mortgagor.
5.6 CONFLICTS. In the event of any conflict between this
Section and the Subsidiary Security Agreement (as defined in the Credit
Agreement) the provision in the Subsidiary Security Agreement shall control.
SECTION 6.
DEFAULT; REMEDIES
6.1 EVENTS OF DEFAULT. The entire Indebtedness shall become
due, at the option of Mortgagee, if any one or more of the following events
(each an "Event of Default") shall occur and be continuing beyond any applicable
grace or notice period:
6.1.1 Default (as defined therein) occurs under the
Credit Agreement or a default or Default (as
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defined therein) occurs under any other instrument now or hereafter securing the
Indebtedness; or
6.1.2 The breach by Mortgagor of any covenant
contained in Section 3 herein or any representation or warranty made or deemed
made by or on behalf of Mortgagor to Mortgagee in Section 3 herein is materially
false on the date as of which it was made; or
6.1.3 The breach by Mortgagor of any of its
obligations contained in Sections 4 or 5 herein.
6.2 REMEDIES. At any time while there exists an Event of
Default, Mortgagee shall have all rights and remedies provided at law or in
equity or under this Mortgage, including the right to accelerate the maturity of
the Indebtedness and the right to foreclose the lien of this Mortgage.
6.2.1 Upon the occurrence of an Event of Default,
Mortgagee shall have the right to exercise all rights and remedies provided by
law or in equity to which Mortgagee is entitled, including, without limiting the
generality of the foregoing, the right to declare the Indebtedness and all sums
due or to become due under this Mortgage and the Guaranty to be accelerated and
to be due and payable in full.
6.2.2 Upon the occurrence of any one or more Events
of Default, Mortgagee in accordance with the Credit Agreement, may, in addition
to any rights or remedies available to it hereunder or under the other Security
Documents and to the extent permitted by applicable law, take such action
personally or by its agents or attorneys, with or without entry, and without
notice, demand, presentment or protest (each and all of which are hereby
waived), as it deems necessary or advisable to protect and enforce its rights
and remedies against Mortgagor and in and to the Property, including the
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following actions, each of which may be pursued concurrently or otherwise, in
its sole discretion, without impairing or otherwise affecting its other rights
or remedies:
(a) declare the entire balance of the Indebtedness to
be immediately due and payable, and upon any such declaration, the entire unpaid
balance of the Indebtedness shall become and be immediately due and payable,
without presentment, demand, protest or further notice of any kind, all of which
are hereby expressly waived by Mortgagor, anything in any other Security
Documents to the contrary notwithstanding; or
(b) institute a proceeding or proceedings, judicial
or otherwise, for the complete or partial foreclosure of this Mortgage under any
applicable provi- sion of law; or
(c) sell (the power of sale, if permitted and
provided by applicable law, being expressly granted by Mortgagor to Mortgagee)
the Property, and all estate, right, title, interest, claim and demand of
Mortgagor therein, and all rights of redemption thereof, at one or more sales,
as an entirety or in parcels, with such elements of real and/or personal
property, and at such time and place and upon such terms as it may deem
expedient, or as may be required by applicable law, and in the event of a sale,
by foreclosure or otherwise, of less than all of the Property, this Mortgage
shall continue as a lien and security interest on the remaining portion of the
Property; or
(d) institute an action, suit or proceeding in equity
for the specific performance of any of the provisions contained in the Security
Documents; or
(e) apply for the appointment of a re-
ceiver, custodian, trustee, liquidator or conservator of
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the Property to be vested with the fullest powers permitted under applicable
law, as a matter of right and without regard to, or the necessity to disprove,
the adequacy of the security for the Indebtedness or the solvency of Mortgagor
or any other person liable for the payment of the Indebtedness, and Mortgagor
and each such person liable for the payment of the Indebtedness consents or
shall be deemed to have consented to such appointment; or
(f) enter upon the Property, and exclude Mortgagor
and its agents and servants wholly therefrom, without liability for trespass,
damages or otherwise, and take possession of all books, records and accounts
relating thereto and all other Property, and Mortgagor agree to surrender
possession of the Property and of such books, records and accounts to Mortgagee
on demand after the happening of any Event of Default; and having and holding
the same may use, operate, manage, preserve, control and otherwise deal
therewith and conduct the business thereof, either personally or by its
superintendents, managers, agents, servants, attorneys or receivers, without
interference from Mortgagor; and upon each such entry and from time to time
thereafter Mortgagee may, at the expense of Mortgagor and the Property, without
interference by Mortgagor and as Mortgagee may deem advisable, (A) insure or
reinsure the Property, (B) make all necessary or proper repairs, renewals,
replacements, alterations, additions, betterments and improvements thereto and
thereon and (C) in every such case in connection with the foregoing have the
right to exercise all rights and powers of Mortgagor with respect to the
Property, either in Mortgagor's name or otherwise; or
(g) with or without the entrance upon the Property,
collect, receive, sue for and recover it in its own name all rents and cash
collateral derived from the Property, and after deducting therefrom all costs,
expenses and liabilities of every character incurred by Mortgagee in controlling
the same and in using, operat-
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ing, managing, preserving and controlling the Property, and otherwise in
exercising Mortgagee rights under subsection (vi) of this Section, including all
amounts necessary to pay Impositions, insurance premiums and other charges in
connection with the property, as well as compensation for the services of
Mortgagee and its respective attorneys, agents and employees, to apply the
remainder as provided herein and in the Loan Agreement;
or
(h) release any portion of the Property for such
consideration as Mortgagee may require without, as to the remainder of the
Property, in any way impairing or affecting the position of any subordinate
lienholder with respect thereto, except to the extent that the Indebtedness
shall have been reduced by the actual monetary consideration, if any, received
by Mortgagee for such release and applied to the Indebtedness, and may accept by
assignment, pledge or otherwise any other property in place thereof as Mortgagee
may require without being accountable for so doing to any other lienhold- er; or
(i) Mortgagee may institute a proceeding or
proceedings to eject Mortgagor from possession of the Property and to obtain
possession of the Property by Mortgagee, with or without instituting a
foreclosure proceeding.
(j) take all actions permitted under the Uniform
Commercial Code in effect in the State in which the Property is located; or
(k) take any other action, or pursue any other right
or remedy, as Mortgagee may have under applicable law, and Mortgagor does hereby
grant the same to Mortgagee.
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6.3 MORTGAGEE'S CAUSE OF ACTION. Mortgagee shall have the
right, from time to time, to bring an appropriate action to recover any sums
required to be paid by Mortgagor under the terms of this Mortgage, the Note or
the Guaranty, as they become due, without regard to whether or not the principal
indebtedness or any other sums secured by the Note, the Guaranty, and this
Mortgage shall be due, and without prejudice to the right of Mortgagee
thereafter to institute foreclosure or otherwise dispose of the Property or any
part thereof, or any other action, for any default by Mortgagor existing at the
time the earlier action was commenced.
6.4 COSTS AND EXPENSES. At any time after the Indebtedness
hereby secured shall become due, whether by acceleration or otherwise, Mortgagee
shall have the right to foreclose the lien hereof. In any suit to foreclose such
lien, there shall be allowed and included as additional Indebtedness in the
decree of sale, to the extent permitted by law, all expenditures and expenses
that may be paid or incurred by or on behalf of Mortgagee for attorneys' fees,
court costs, appraisers' fees, sheriff's fees, documentary and expert evidence,
stenographers' charges, publication costs and such other costs and expenses as
Mortgagee may deem reasonably necessary to prosecute such suit or to evidence to
bidders at any sale that may be had pursuant to such decree the true condition
of the title to or the value of the Property. To the extent permitted by law,
all such expenditures and expenses shall become additional Indebtedness secured
hereby and shall be due and payable on demand with interest thereon from the
date of expenditure at a rate per annum six percent (6%) in excess of the prime
commercial rate of The Fifth Third Bank then in effect and in addition shall
include expenditures and expenses incurred by Mortgagee in connection with (a) a
foreclosure proceeding; (b) any proceeding to which Mortgagee shall be a party,
either as plaintiff, claimant or defendant, by reason of this Mortgage or any of
the Indebtedness; (c)
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preparations for the commencement of any suit for foreclosure hereby after
accrual of such right to foreclosure, whether or not actually commenced; or (d)
preparation for the defense of or investigation of any threatened suit, claim or
proceeding that might affect the Property, whether or not actually commenced.
6.5 NO MERGER. It is the intention of the parties hereto that
if the Mortgagee shall at any time hereafter acquire title to all or any portion
of the Property, then, and until the Indebtedness secured hereby has been paid
in full, the interest of the Mortgagee hereunder and the lien of this Mortgage
shall not merge or become merged in or with the estate and interest of the
Mortgagee as the holder and owner of title to all or any portion of the
Property, and that, until such payment, the estate of the Mortgagee in the
Property, and the lien of this Mortgage and the interest of the Mortgagee
hereunder shall continue in full force and effect to the same extent as if the
Mortgagee had not acquired title to all or any portion of the Property.
Furthermore, if the estate of the Mortgagor shall be a lease-hold, unless the
Mortgagee shall otherwise consent, the fee title of the Property Lease shall not
merge but shall always be kept separate and distinct, notwithstanding the union
of said estates either in the ground lessor or in the fee owner, or in a third
party, by purchase or otherwise. If, however, the Mortgagee shall be requested
to and/or shall consent to such merger or such merger shall nevertheless occur
without its consent, then this Mortgage shall attach to and cover and be a lien
upon the fee title or any other estate, title or interest in the Property
demised under the ground lease acquired by the fee owner and the same shall be
considered and granted, released, assigned, transferred, pledged, enfeoffed, and
set over to the Mortgagee and the lien hereof spread to cover such estate with
the same force and effect as though specifically herein granted, released,
assigned, transferred, pledged, enfeoffed, set over and spread.
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6.6 WAIVERS. The failure of Mortgagee to exercise either or
both of its options to accelerate the maturity of the Indebtedness and to
foreclose the lien hereof following any Event of Default, or to exercise any
other option granted to Mortgagee of partial payments of such Indebtedness,
shall neither constitute a waiver of any such Event of Default or of Mortgagee's
options hereunder nor establish, extend or affect any grace period for payments
due under the Notes, but such options shall remain continuously in force.
Acceleration of maturity, once claimed hereunder by Mortgagee, may, at
Mortgagee's option, be rescinded by written acknowledgment to that effect by
Mortgagee and shall not affect Mortgagee's right to accelerate maturity upon or
after any future Event of Default.
6.7 EXPENSES. In any proceeding to foreclose the lien of this
Mortgage or enforce any other remedy of Mortgagee under the Notes, this
Mortgage, the Credit Agreement, the Guaranty or any other document securing the
Indebtedness, or in any other proceeding whatsoever in connection with any of
the Property in which Mortgagee is named as a party, there shall be allowed and
included, as additional Indebtedness in the judgment or decree resulting
therefrom, all reasonable expenses paid or incurred in connection with such
proceeding by or on behalf of Mortgagee constituting attorneys' fees,
appraisers' fees, outlays for documentary and expert evidence, stenographers'
charges, publication costs, survey costs, and costs (which may be estimated as
to items to be expended after entry of such judgment or decree) or procuring all
abstracts of title, title searches and examinations, title insurance policies,
Torrens certificates and any similar data and assurances with respect to title
to the Property as Mortgagee may deem reasonably necessary either to prosecute
or defend in such proceeding or to evidence to bidders at any sale pursuant to
such decree the true condition of the title
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to or value of the premises or the Property. All expenses of the foregoing
nature, and such expenses as may be incurred in the protection of any of the
Property and the maintenance of the lien of this Mortgage thereon, including,
without limitation, the fees of any attorney employed by Mortgagee in any
litigation affecting the Notes, this Mortgage or any of the Property, or in
preparation for the commencement or defense of any proceeding or threatened suit
or proceeding in connection therewith, shall be immediately due and payable by
Mortgagor with interest thereon at the Default Rate.
6.8 PROCEEDS. The proceeds of any foreclosure sale of the
Property, or any part thereof, shall be distributed and applied in the following
order of priority: (a) on account of all reasonable costs and expenses incident
to the foreclosure proceedings, including all such items as are mentioned in
Section 6.4 hereof; (b) all other items that, under the terms of this Mortgage,
constitute Indebtedness additional to that evidenced by the Guaranty, with
interest thereon at the Default Rate; (c) all principal and interest remaining
unpaid under the Guaranty, in the order of priority specified by Mortgagee in
its sole discretion; and (d) the balance to Mortgagor or its successors or
assigns, as its interests may appear.
6.9 ADDITIONAL REMEDIES. If an Event of Default shall have
occurred and be continuing Mortgagee, at its option, in addition to the other
remedies provided herein or in law or equity, may proceed to enter upon, take
possession of, and manage and operate the Property and may proceed to perform
any or all obligations of Mortgagor under the Leases, and exercise the rights of
Mortgagor contained therein as fully as Mortgagor itself could, without regard
to the adequacy of security for the Indebtedness and with or without bringing
any legal action or causing any receiver to be appointed by any court; may let
or re-let the Property or any part thereof
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and enforce, modify, cancel or accept the surrender of any of the Leases; may
bring or defend any suits in connection with the possession of the Property or
any part thereof, in the name of either Mortgagor or Mortgagee; may make such
repairs as Mortgagee may deem appropriate; may pay out of rents, income or
profits any liens, taxes, assessments, insurance premiums, utility charges or
costs of keeping the Property in good condition and repair; may in the name of
either Mortgagor or Mortgagee sue for or otherwise collect and receive all
rents, issues and profits, including those past due and unpaid; and may do all
other things Mortgagee may deem necessary or proper to protect its security.
Entry upon and taking possession of the Property and the collection of the rents
and the application thereof will not operate to cure or waive any default under
any Loan Documents to which Mortgagor is a party or prohibit the taking of any
other action by Mortgagee under any such Loan Document, or at law or in equity
to enforce the payment of the Indebtedness or to realize on any other security
or guarantee.
6.10 RECEIVERS. Upon or at any time while there exists an
Event of Default, Mortgagee may request the appointment of a receiver of the
Property. Such appointment may be made either before or after any foreclosure
action or sale, without notice and without regard to the solvency or insolvency,
at the time of application for such receiver, of the person or persons, if any,
liable for the payment of the Indebtedness without regard to the value of the
Property at such time and whether or not the same is then occupied as a
homestead and without bond being required of the applicant. Such receiver shall
have the power to take possession, control and care of the Property and to
collect all rents, issues, deposits and profits thereof.
6.11 RIGHTS OF MORTGAGEE. If Mortgagor fails to pay any Taxes
or to make any other payment required to
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be paid by Mortgagor at the time and in the manner provided in this Mortgage, or
if any Event of Default occurs and is continuing, then without limiting the
generality of any other provision of this Mortgage and without waiving or
releasing Mortgagor from any of its obligations hereunder, Mortgagee shall have
the right, but shall be under no obligation, to pay any Taxes or other payment,
or such sums due under this Mortgage, and may perform any other act or take such
action as may be appropriate to cause such other term, covenant, condition or
obligation to be promptly performed or observed on behalf of Mortgagor, provided
that, unless in Mortgagee's judgment the sending of a 10-day notice shall impair
the security for the lien of the Mortgage, Mortgagee shall give Mortgagor 10
days' prior written notice prior to making any such payment. In any such event,
Mortgagee and any person designated by Mortgagee shall have, and is hereby
granted, the right to enter upon the Property at any time and from time to time
for the purpose of performing any such act or taking any such action, and all
monies expended by Mortgagee in connection with making such payment or
performing such act (including, but not limited to, legal expenses and
disbursements), together with interest thereon at the Default Rate, from the
date of each such expenditure, shall be paid by Mortgagor to Mortgagee forthwith
upon demand by Mortgagee and shall be secured by this Mortgage.
SECTION 7.
MISCELLANEOUS
7.1 RIGHTS CUMULATIVE. The rights of Mortgagee arising under
the provisions and covenants contained in this Mortgage and the Notes and other
documents securing the Indebtedness or any part thereof shall be separate,
distinct and cumulative and none of them shall be exclusive of the others. No
act of Mortgagee shall be
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<PAGE> 26
construed as an election to proceed under any one provision herein or in such
other documents to the exclusion of any other provision, anything herein or
otherwise to the contrary notwithstanding.
7.2 WAIVERS. A waiver in one or more instances of any of the
terms, covenants, conditions or provisions hereof, or of the Notes or any
documents securing the Indebtedness or any part thereof, shall apply to the
particular instance or instances and at the particular time or times only, and
no such waiver shall be deemed a continuing waiver, but all of the terms,
covenants, conditions and other provisions of this Mortgage and of such other
documents shall survive and continue to remain in full force and effect. No
waiver shall be asserted against Mortgagee unless in writing signed by
Mortgagee.
7.3 TITLES. The titles to the Sections hereof are for
reference only and do not limit in any way the content thereof.
7.4 AMENDMENTS. No change, amendment, modification,
cancellation or discharge hereof, or any part hereof, shall be valid unless in
writing and signed by the parties hereto or their respective successors and
assigns.
7.5 GOVERNING LAW. This Mortgage shall be construed,
interpreted, enforced and governed by and in accordance with the law of the
State of Illinois. Notwithstanding the foregoing, the internal laws of the State
of Ohio shall govern the lien priority and validity of this Mortgage and
procedures with respect to the enforcement thereof.
7.6 OTHER LIENS. It is agreed that the lien hereby created
shall take precedence over and be a prior lien to any other lien of any
character whether vendor's, materialmen's or mechanic's lien hereafter created
on the
26
<PAGE> 27
Property, and in the event the proceeds of the Indebtedness as set forth
herein are used to pay off and satisfy any liens heretofore existing on the
Property (other than Liens permitted under Section 6.17 of the Credit
Agreement), then Mortgagee is, and shall be, subrogated to all of the rights,
liens and remedies of the holders of the lien so satisfied.
7.7 NOTICES. All notices, demands and requests given or
required to be given by either party hereto to the other party shall be in
writing and shall be deemed to have been properly given if sent by certified
mail, postage prepaid, return receipt requested, addressed as follows:
To Mortgagor at: Jacor Broadcasting Corporation
c/o Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Attn: R. Christopher Weber
Copy to: Gerald F. O'Connell, Jr., Esq.
Graydon Head & Ritchey
P.O. Box 6464
Cincinnati, Ohio 45201
To Mortgagee at: Banque Paribas
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
Attn: Steve Heinen
Mark Radzik
Copy to: Randall J. Rademaker, Esq.
Skadden, Arps, Slate, Meagher
& Flom
333 West Wacker Drive
Suite 2100
27
<PAGE> 28
Chicago, Illinois 60606
or to such other address as Mortgagor or Mortgagee may from time to time
designate by ten (10) days' written notice.
7.8 CONSTRUCTION. Any words herein which are used in one
gender shall be read and construed to mean or include the other genders wherever
they would so apply. Any words herein which are used in the singular shall be
read and construed to mean and to include the plural wherever they would so
apply, and vice versa.
7.9 WAIVERS BY MORTGAGOR. Mortgagor hereby expressly waives,
to the extent permitted by law, the equity of redemption, any statutory right of
redemption, dower and homestead and all other rights and exemptions of every
kind in and to the Property.
7.10 INTEREST, VARIABLE RATE. The rate of interest payable on
the outstanding principal balance due under the Notes, the payment of which is
guaranteed by Mortgagor under the Guaranty, as accrued interest each month,
could change from time to time as provided in the Credit Agreement. If from any
circumstances whatsoever the fulfillment of any provision of this instrument
involves transcending the limit of validity prescribed by any applicable usury
statute or any other applicable law (it being the intention of Mortgagor and
Mortgagee that the applicable usury laws of Illinois will govern) with regard to
obligations of like character and amount, then the obligation to be fulfilled
will be reduced to the limit of such validity as provided in such statute or
law, so that in no event will any exaction of interest be possible under this
instrument in excess of the limit of such validity. In no event will Mortgagor
be bound to pay interest of more than the legal limit for the use, forbearance
or detention of money and the right to demand any such excess is hereby
expressly waived by Mortgagee.
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<PAGE> 29
7.11 RELEASES. Mortgagor agrees that Mortgagee, without notice
to or further consent of Mortgagor, may release or discharge any persons who are
or may become liable for the payment of the Indebtedness or release or discharge
any other collateral for the payment of the Indebtedness and any such release or
discharge shall not alter, modify, release or limit the validity and
enforceability of this Mortgage or the liability of Mortgagor under the
Indebtedness or this Mortgage.
7.12 FCC CONSENT. Notwithstanding anything to the contrary
contained herein or in any other agreement, instrument or document executed by
Mortgagor and other parties and delivered to Mortgagee, Mortgagee will not take
any action pursuant to this Mortgage that would constitute or result in any
assignment of license or any change of control of Mortgagor if such assignment
of license or change of control would require, under then existing law, the
prior approval of the Federal Communications Commission ("FCC") without first
obtaining such prior approval of the FCC. Mortgagor agrees to take any action
which Mortgagee may reasonably request in order to obtain from the FCC such
approval as may be necessary to enable Mortgagee to exercise and enjoy the full
rights and benefits granted to the holder of the Indebtedness by this Mortgage
and each other agreement, instrument and document delivered to Mortgagee in
connection therewith, including specifically, at the cost and expense of
Mortgagor, the use of its best efforts to assist in obtaining approval of the
FCC for any action or transaction contemplated by this Mortgage for which such
approval is or shall be required by law and specifically, without limitation,
upon request, to prepare, sign and file with the FCC the assignor's or
transferor's portion of any application or applications for consent to the
assignment of license or transfer of control necessary or appropriate under the
FCC's rules and regulations for approval of (a) any sale or sales of all or any
part of the Property by
29
<PAGE> 30
or on behalf of Mortgagee or (b) any assumption by Mortgagee of voting or
management rights with respect to all or any part of the Property effected in
accordance with the terms of this Mortgage.
7.13 SUCCESSORS AND ASSIGNS. This Mortgage shall inure to the
benefit of and be binding upon Mortgagor and Mortgagee and their respective
heirs, executors, legal representatives, successors and assigns. Whenever a
reference is made in this Mortgage to Mortgagor or Mortgagee, such reference
shall be deemed to include a reference to the heirs, executors, legal
representatives, successors and assigns of Mortgagor or Mortgagee.
7.14 SEVERABILITY. If any provision of this Mortgage or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Mortgage and the application
of such provisions to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.
SECTION 8.
DEFEASANCE
8.1 DEFEASANCE. Provided, nevertheless, that if Mortgagor
shall keep, observe and perform all of the covenants and conditions of this
Mortgage on Mortgagor's part to be kept and performed and shall pay, or cause to
be paid, to Mortgagee the Indebtedness and all extensions and renewals thereof,
and shall repay any loans and advances hereafter made by Mortgagee under the
terms hereof, then this Mortgage shall be void, otherwise it shall remain in
effect.
30
<PAGE> 31
8.2 FUTURE ADVANCES. The parties hereto intend and agree that
this Mortgage shall secure unpaid balances of any loan advances, whether
obligatory or not, and whether made pursuant to the Loan Agreement or not, made
by Mortgagee after this Mortgage is delivered to the Recorder for record to the
extent that the total unpaid loan indebtedness, exclusive of interest thereon,
does not exceed the maximum amount of unpaid loan indebtedness which may be
outstanding at any time, which is Three Hundred Million Dollars
($300,000,000.00). Mortgagor further covenants and agrees to repay all such loan
advances with interest, and that the covenants contained in this Mortgage shall
apply to such loan advances as well.
31
<PAGE> 32
Executed at __________, _________, on February
___, 1996 by ___________________, the
_____________________ of Mortgagor.
Signed and acknowledged JACOR BROADCASTING
in the presence of: CORPORATION,
an Ohio corporation
- ---------------------------- -----------------------------
Print Name: Name:
----------------- -----------------------
Title:
-----------------------
- ----------------------------
Print Name:
-----------------
<PAGE> 33
STATE OF ----------------------------- )
) SS:
COUNTY OF ---------------------------- )
BE IT REMEMBERED, that on February , 1996, before me, the
subscriber, a Notary Public in and for said State and County, personally
appeared , a duly authorized of JACOR BROADCASTING CORPORATION, an Ohio
corporation, Mortgagor in the foregoing instrument, who executed the foregoing
Open-End Mortgage, Assignment of Rents and Leases and Security Agreement on
behalf of such Mortgagor, and acknowledged the signing thereof to be his/her
voluntary act and deed and the voluntary act and deed of Mortgagor for the uses
and purposes therein mentioned.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and
affixed my notarial seal, on the day and year last aforesaid.
-----------------------
Notary Public
-----------------------
(Print Name)
My County of Residence is:
-----------------------
My Commission Expires:
-----------------------
This instrument was prepared by:
Alexandra V. Bergstein, Esq.
<PAGE> 34
Skadden, Arps, Slate,
Meagher, & Flom
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60606
<PAGE> 35
EXHIBIT A
PARCEL I:
Situated in the City of Mason, formerly Deerfield Town- ship, Warren County,
Ohio, and being a part of the S.E. quarter of Section Number Six (6), Township
Number Three (3), Range Number Two (2), between the Miami Rivers, and bounded
and described as follows:
Beginning at a stone in the Mason and Mauds Station Pike, same being the S.E.
corner of said Section Number Six (6), witness a brick post twenty-one (21)
inches square, N. 2(degree) E. 21.5 feet; running thence with the east line of
said Section N. 2(degree) E. 812 feet to the N.W. corner of a ten (10) acre
tract formerly belonging to the United States Playing Card Company; thence S.
88(degree) 50' W., 450 feet to a stake; thence parallel with said Section line
S. 2(degree) W. 826.5 feet to a point in the aforesaid Pike and South line of
said Section; thence with said Pike and Section line N. 87(degree) 5' E. 451
feet to the place of begin- ning, containing Eight and Forty-five Hundredths
(8.45) acres, more or less.
PARCEL II:
Situated in the City of Mason, formerly Deerfield Township, Warren County, Ohio,
and being a part of the S.W. Quarter of Section Number Thirty-six (36), Township
Number Four (4), Range Number Two (2), between the Miami Rivers, and bounded and
described as follows:
Beginning at a point in the south line of said Section and the middle of the
Mauds and Mason Road, said point being N. 86(degree) 53' E., 542.5 feet from the
S.W. corner of said Section, said point of beginning being the S.E. corner of a
ten (10) acres tract formerly owned by the Crosley Radio Corporation, and
further witnessed by a
A-1
<PAGE> 36
stone bearing N. 2(degree) E., 40 feet, running thence with the east line of
said ten (10) acre tract; N. 2(degree) E., 794 feet to the N.E. corner of said
ten (10) acre tract, witness a stone bears S. 2(degree) W., 5 feet, and another
stone bears S. 88(degree) 50' W., 5 feet; thence N. 88(degree) 50' E., 623 feet
to a stake; thence S. 36(degree) 10' E., 203 feet to a stake; thence S 2(degree)
25' W. 600 feet to a point in the South line of said Section and in the middle
of the aforesaid Mauds Road; witness a stone bears N. 2(degree) 25' E., 40 feet;
thence with said section line and Road S. 86(degree) 55' W., 749 feet to the
place of beginning, containing 13.15 acres, more or less.
LESS AND EXCEPT THE FOLLOWING PARCELS:
(a) Being a parcel of land situated in the City of
Mason, Warren County, Ohio, Deerfield Township,
Section 36, Town 4, Range 2 and lying on the north
side of the centerline of Survey Tylersville Road
and being part of the property as conveyed to Mari-
ner Communications, Incorporation, Official Record
Volume 641, page 975, of the records of the
Recorder's Office of Warren County, Ohio and being
located within the following described points in the
boundary thereof:
Commencing at the southwest corner of Section 36, said corner also
being the southwest corner of Parcel No. 3 of said property; thence
with the south line of Section 36 and the south line of said property
North 89(degree) 22' 10" East, 995.96 feet to a point lying 10.00 feet
north of Sta. 5+45.00 centerline of Survey Tylersville Road, the Real
Point of Beginning, the tract herein described; thence continuing with
said lines N. 89(degree) 22' 10" East 298. feet to the southeast corner
of said property; thence with the east line of said property N.
4(degree) 44' 20" East 30.13 feet to the existing north right of way
line of Tylersville Road; thence with said right of way
A-2
<PAGE> 37
line, south 89(degree) 22' 10" West 300.87 feet; thence departing said
right of way line South 0(degree) 37' 30" East 30.00 feet to the Real
Point of Beginning, containing 0.206 acres, more or less.
(b) Being a parcel of land situated in the City of
Mason, Warren County, Ohio, Deerfield Township,
Section 36, Town 4, Range 3 and lying on the north
side of the centerline of Survey Tylersville Road
and being part of the property as conveyed to Mari-
ner Communications Incorporated, Official Record
Volume 041, page 975, of the records of the
Recorder's Office of Warren County, Ohio and being
located within the following described points in the
boundary thereof:
Commencing at the southwest corner of Section 36, said corner also
being the southwest corner of Parcel No. 3 of said property; thence
with the south line of Section 36 and the south line of said property,
N. 89(degree) 22' 10" East 1,294.00 feet to the southeast corner of
said property; thence with the east line of said property North
4(degree) 44' 20" East, 30.13 feet to the existing north right of way
line of Tylersville Road lying 40.00 feet north of Sta/ 8+45.86
centerline of Survey Tylersville Road, the Real Point of Beginning of
the tract herein described; thence with said right of way line, S
89(degree) 2' 10" West 154.20 feet; thence departing said right of way
line North 87(degree) 59' 40" East 154.60 feet to the east line of said
property; thence with said property line, South 4(degree) 44' 20" West
2.73 feet to the Real Point of Beginning, containing 0.007 acres, more
or less.
PARCEL III:
Situated in the City of Mason, formerly Deerfield Town-
A-3
<PAGE> 38
ship, Warren County, Ohio, and being a part of the S.W. Quarter of Section
Number Thirty-Six (36), Township Number Four (4), Range Number Two (2), M.R.S.
and bounded and described as follows:
Beginning at a stone in the middle of the Mason and Mauds Station Pike, same
being the southwest corner of said Section 36, witness a concrete post, N. 2
degrees 10 minutes E. 21 feet 6 inches running thence with the west line of said
section N. 2 degrees 10 minutes E. 12.30 chains to a post and corner in said
line; thence N. 88 degrees 50 minutes E. 8.22 chains to an iron pin; thence S. 2
degrees 18 minutes W. 12.03 chains to a point in the middle of the aforesaid
Pike and in the south line of said Section witness an iron pin 2 degrees 10
minutes E. 21 feet, said pin also being 11 feet westerly from a 15 inch walnut
tree; thence with the middle of said Pike and south line of said Section S. 87
degrees W. 8.22 chains to the place of beginning, containing 10 acres, more or
less.
A-4
<PAGE> 1
This Mortgage secures an out-of-state guaranty that is also
being secured by mortgages on out-of-state property. Mortgagee
agrees to limit its recovery hereunder to $2,000,000.00, and
documentary stamp tax is being paid on such amount.
OPEN-END MORTGAGE, ASSIGNMENT OF RENTS
AND LEASES AND SECURITY AGREEMENT
This Open-End Mortgage, Assignment of Rents and Leases and
Security Agreement (the "Mortgage") is made by JACOR BROADCASTING OF TAMPA BAY,
INC., a Florida corporation ("Mortgagor"), to BANQUE PARIBAS (the "Mortgagee"),
as Agent for the Banks, the Co-Agents and the Interest Rate Providers as those
terms are defined in that certain Credit Agreement dated February __, 1996 (the
"Credit Agreement") among Jacor Communications, Inc., the Agent and each of The
First National Bank of Boston and Bank of America Illinois, as Co-Agents, as
follows:
SECTION 1.
GRANT
1.1 PROPERTY. Mortgagor hereby grants, bargains, mortgages, warrants,
sells, encumbers, conveys, assigns and transfers to Mortgagee, its successors
and assigns forever, all estate, title and interest in and to the following, now
existing or hereafter arising (collectively, "Property"):
<PAGE> 2
1.1 the real estate described in Exhibit A attached hereto,
all of the estate, title and interest of Mortgagor in law or equity, of, in and
to such real estate and all of the privileges, easements and appurte- nances
belonging to such real estate, including all heretofore or hereafter vacated
streets or alleys which abut such real estate;
1.2 all buildings and improvements of every kind and
description now existing or hereafter placed on such real estate and all
fixtures, machinery, appliances, equipment, furniture and personal property of
every kind whatsoever owned by Mortgagor and located in or on, or attached to,
and used or intended to be used in connection with the operation of such real
estate, buildings, structures or other improvements thereon or in connection
with any construction being conducted or which may be conducted thereon,
including but not limited to the electric, water, laundry, incinerating and
power equipment; engines; pipes; pumps; tanks; motors; conduits; switchboards;
plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating,
ventilating and communications apparatus; boilers, ranges, furnaces, oil burners
or units thereof; radiators; heaters; appliances; air-cooling and air
conditioning apparatus; vacuum cleaning systems; elevators; escalators; shades;
awnings, screens, doors, storm doors and windows; stoves; refrigerators;
attached cabinets; partitions; ducts and compressors; rugs and carpets;
draperies; beds, tables, lamps and all other furniture and furnishings;
1.3 all rents, leases, issues and profits arising out of any
of the foregoing, including all insurance policies and payments made under
insurance policies relating to any of the foregoing and judgments, awards and
settlements resulting from any condemnation proceeding or similar taking against
the foregoing property under the power of eminent domain;
2
<PAGE> 3
1.4 Mortgagor's interest in all contracts for the design,
development, construction, management, maintenance and/or operation of such real
estate, all licenses and permits therefor (excluding licenses and permits issued
by the FCC (as hereinafter defined) to the extent that it is unlawful to grant a
mortgage on any such licenses and permits or to the extent that the grant of any
such security interest in any such license or permit would result in the
forfeiture of any such license or permit or a default under any such license or
permit), all bonds assuring payments thereunder and all books and records
related thereto; and
1.5 all extensions, additions, improvements, betterments,
renewals, substitutions and replacements to any of the foregoing, and the
proceeds of all of the foregoing.
1.2 SECURITY. The grant described in Section 1, above, to have and to
hold the Property is given to Mortgagee and its successors and assigns forever,
for the uses and purposes herein set forth to secure the payment of the
Indebtedness as defined in Section 2, below, and the performance of all
obligations of Mortgagor hereunder.
SECTION 2.
INDEBTEDNESS
This conveyance, however, is made to secure the payment of up
to Two Million Dollars ($2,000,000.00) for any of the following: (a) the
Guaranteed Debt of Mortgagor arising under or defined in that certain Subsidiary
Guaranty (the "Guaranty") of even date herewith made by the Guarantors (as
defined in the Guaranty) in favor of Mortgagee and all extensions and renewals
thereof, all amendments thereto, all advances or expenses of any kind
3
<PAGE> 4
made by Mortgagee pursuant to the provisions of this Mortgage, and all
obligations of Mortgagor under (i) the Intercompany Acquisition Note and (ii)
the Intercompany Demand Note, each as defined in the Credit Agreement (the
foregoing collectively referred to as the "Notes" and, together with the
Guaranty, as the "Indebtedness"). All capitalized terms not otherwise defined
herein shall be defined as set forth in the Credit Agreement. All references to
the Credit Agreement, Notes or Guaranty shall mean the Credit Agreement, Notes
or Guaranty and any amendments made thereto from time to time. Mortgagor and the
Mortgagee agree that the first funds advanced under the Loan Documents shall be
deemed to be secured by real property located in the State of Florida and such
funds shall also be deemed to be the last repaid.
SECTION 3.
REPRESENTATIONS, WARRANTIES AND COVENANTS
Mortgagor covenants, represents, warrants and agrees with
Mortgagee as follows:
3.1 TITLE. Mortgagor is the lawful owner of the Property; title to the
Property is vested in Mortgagor and is free, clear and unencumbered except for
easements, agreements and restrictions of record; Mortgagor has good right and
full power to convey and encumber the Property and to execute this Mortgage;
Mortgagor will make such further assurances of title as Mortgagee may require;
and Mortgagor will warrant and defend the Property against all claims and
demands whatsoever.
3.2 CORPORATE EXISTENCE AND STANDING. Mortgagor is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has all requisite authority to conduct
4
<PAGE> 5
its business in each jurisdiction in which its business is conducted.
3.3 AUTHORIZATION AND VALIDITY. Mortgagor has the corporate power and
authority and legal right to execute and deliver this Mortgage and to perform
its obligations hereunder. The execution and delivery by Mortgagor of the
Mortgage and the performance of its obligations hereunder have been duly
authorized by proper corporate proceedings, and this Mortgage constitutes the
legal, valid and binding obligation of Mortgagor enforceable against Mortgagor
in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
3.4 NO CONFLICT; GOVERNMENT CONSENT. Mortgagor hereby makes the same
representations and warranties to Mortgagee as to itself as are set forth in
Section 5.3 of the Credit Agreement as to the Company and the Subsidiar- ies.
3.5 INDEBTEDNESS. Mortgagor will promptly pay, or cause to be paid, the
Indebtedness when due.
3.6 TAXES. Mortgagor will pay, or cause to be paid, before they become
delinquent:
6.1 All of the following (hereinafter collectively called the
"Taxes"); all taxes, assessments and governmental charges and levies upon it or
its income, profits or property, except those that are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with Generally Accepted Accounting Principles.
6.2 On the first day of each month while there exists any one
or more Events of Default (as that term is defined below), a deposit with
Mortgagee equal to
5
<PAGE> 6
one-twelfth of the annual charges, as estimated by Mortgagee, for the Taxes and
premiums for insurance required under Section 3.10, below. Such amount shall be
held by or on behalf of Mortgagee and shall be applied to pay such Taxes and
premiums when the same become due. Mortgagee shall not be required to pay any
interest or earnings on such sums. Mortgagor hereby pledges all such sums as
additional collateral for the Indebtedness. If the amount held by Mortgagee is
not sufficient to pay the Taxes and premiums when due, Mortgagor shall, promptly
upon request of Mortgagee, pay to Mortgagee any amount necessary to make up such
deficiency.
6.3 If Mortgagee is not establishing an escrow for Taxes, then
within 20 days after demand therefor, Mortgagor shall deliver to Mortgagee the
original, or a photostatic copy, of the official receipt evidencing payment of
Taxes or other proof of payment satisfactory to Mortgagee. Notwithstanding the
provisions of Section 3.6.1, any tax or special assessment which is a lien on
the Property may be paid in installments provided that each installment is paid
on or prior to the date when the same is due without the imposition of any
penalty.
3.7 COMPLIANCE WITH LAWS. Mortgagor will comply or cause compliance
with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards to which it may be subject in accordance with Section 6.7 of
the Credit Agreement.
3.8 CONDITION OF PROPERTY. Mortgagor will do all things necessary to
maintain, preserve, protect and keep the Property in good repair, working order
and condition in accordance with Section 6.8 of the Credit Agreement.
3.9 IMPROVEMENTS. Mortgagor will not remove or demolish, or suffer or
permit others to remove or demolish, any improvements installed or placed on the
Property (other than tenant improvements or other improvements
6
<PAGE> 7
minor in nature to Mortgagor's business operations) or, subject to the
provisions of Section 3.8, cause or permit such improvements to be materially
changed or altered without the prior written consent of Mortgagee not to be
unreasonably withheld, as well as Mortgagee's prior written consent to the plans
and specifications relating thereto, and Mortgagor will not institute or cause
to be instituted any proceedings that could change the permitted use of the
Property from the use presently zoned.
3.10 INSURANCE. Mortgagor will maintain with financially sound and
reputable insurance companies insurance on the Property, including fixtures and
all personal property owned by Mortgagor and used in the operation of the
Property, in accordance with Section 6.6 of the Credit Agreement, subject to the
following terms and conditions:
10.1 Such insurance shall contain a provision requiring that
the coverage evidenced thereby shall not be terminated or materially modified
without 30 days' prior written notice to Mortgagee. If Mortgagor fails to carry
any insurance required to be carried by Mortgagor under the terms of this
Mortgage, Mortgagee, at its option, may procure and maintain such insurance and
Mortgagor will promptly reimburse Mortgagee for any premiums paid by Mortgagee
for such insurance. The originals or appropriate certificates of all policies of
insurance required to be carried under this Mortgage, bearing notations
evidencing the payment of premiums or accompanied by other evidence satisfactory
to Mortgagee of such payment, shall be delivered to Mortgagee concurrently with
the execution and delivery hereof. Mortgagor shall deliver to Mortgagee a new
policy (or certificate, in the case of insurance for which only certificates
have been previously furnished) bearing such notation or accompanied by such
other evidence as replacement for any expiring policy at least 30 days before
the date of such expiration.
7
<PAGE> 8
10.2 All policies of insurance required by this Section 3.10
shall contain a lender's loss payee endorsement in favor of Mortgagee and a
waiver of insurer's right of subrogation against funds paid under the lender's
loss payee endorsement. In case of a loss payable under such insurance for
damage to or destruction of the Property, the right to adjust all claims under
such insurance policies (jointly with Mortgagor), and the application of the
proceeds of any such claim, are assigned to Mortgagee. Mortgagor hereby assigns
to Mortgagee all amounts recoverable under any such policy. Except as may be
otherwise provided in tenant leases approved by the Mortgagee, the amount
collected by Mortgagee, at the option of Mortgagee, may be used in any one or
more of the following ways: (i) applied to the payment of any sums then in
default to Mortgagee hereunder; (ii) used to fulfill any of the covenants
contained herein which Mortgagor has failed to fulfill, as Mortgagee may
determine; (iii) unless the insurer denies liability to any insured, used to
restore the Property to a condition satisfactory to Mortgagee on such terms and
conditions as Mortgagee may determine; (iv) released to Mortgagor; and (v)
applied upon the Indebtedness if the Indebtedness is then matured. Provided that
there is no continuing Event of Default hereunder, in the event of casualty
causing less than $100,000 in damage, the insurance proceeds will be disbursed
to Mortgagor for repair or restoration of the Property. Mortgagee is hereby
irrevocably appointed by Mortgagor as attorney-in-fact of Mortgagor to assign
any policy in the event of the foreclosure of this Mortgage or other
extinguishment of the Indebtedness, and Mortgagor shall have no right to
reimbursement for premiums unearned at the time of any such assignment.
10.3 In the event of a conflict between any provisions of
Section 3.10 and the terms of the Subsidiary Security Agreement, as defined in
the Credit Agree-
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ment, relating to insurance, the provision in the Subsidiary
Security Agreement will control.
3.11 SALE, TRANSFER OR ENCUMBRANCE. Except as otherwise permitted in
the Credit Agreement, Mortgagor will not further mortgage, sell or convey, grant
a deed of trust, pledge, grant a security interest in, execute a land contract
or installment sales contract, or otherwise dispose of, further encumber or
suffer the encumbrance of, whether by operation of law or otherwise, any or all
of its interest in the Property without Mortgagee's prior written consent.
3.12 MECHANICS' LIENS. Except as otherwise permitted in the Credit
Agreement, Mortgagor will keep and maintain the Property free from all liens of
persons supplying labor and materials for the construction, modification, repair
or maintenance of any building or improvements whether on the Property or not.
3.13 EMINENT DOMAIN. All awards heretofore or hereafter made by any
public or quasi-public authority to the present and any subsequent owner of the
Property by virtue of an exercise of the right of eminent domain by such
authority, including any award for a taking of title, possession or right of
access to a public way, or for any change of grade of streets affecting the
Property, are hereby assigned to Mortgagee and Mortgagee, at its option, is
hereby authorized, directed and empowered to collect and receive the proceeds of
any such award from the authorities making the same and to give proper receipts
and acquittance therefor, and, at Mortgagee's election, may use such proceeds in
any one or more of the following ways: (a) use the same or any part thereof to
fulfill any of the covenants contained herein which Mortgagor has failed to
fulfill, as Mortgagee may determine, (b) use the same or any part thereof to
replace or restore the Property to a condition satisfactory to Mortgagee, (c)
apply the same against the Indebtedness if
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<PAGE> 10
the Indebtedness is then matured, or (d) release the same to Mortgagor.
Mortgagee will have the right to intervene and participate (jointly with
Mortgagor) in any proceedings for and in connection with any such taking. Upon
request of Mortgagee, Mortgagor will make, execute and deliver all assignments
and other instruments sufficient for the purpose of assigning all such awards to
Mortgagee free, clear and discharged of all encumbrances. Provided that there is
no continuing Event of Default hereunder, in the event of a taking by
condemnation or eminent domain resulting in an award of less than $100,000, the
award will be disbursed to Mortgagor for restoration of the Property (to the
extent required for such restoration).
3.14 UNPAID TAXES. In the event that any governmental agency claims
that any tax or other governmental charge or Tax is due, unpaid or payable by
Mortgagor or Mortgagee upon the Indebtedness (other than income tax, franchise
tax or similar tax on the interest or premium receivable by Mortgagee under the
Credit Agreement) and including any recording tax, documentary stamps or other
tax or imposition on the Notes or this Mortgage; Mortgagor forthwith will pay
such tax in accordance with Sections 9.3 and 9.7 of the Credit Agreement and,
within a reasonable time thereafter, deliver to Mortgagee satisfactory proof of
payment thereof or if Mortgagor is contesting the same in good faith, Mortgagor
will establish with the Mortgagee security in form, substance and amount
reasonably acceptable to the Mortgagee for the payment thereof.
3.15 ENVIRONMENTAL MATTERS. Mortgagor hereby makes the same
representations and warranties to Mortgagee as to itself and the Property as are
set forth in Section 5.8 of the Credit Agreement as to the Company and the
Subsidiaries and the property owned or leased by any of them, and Mortgagor
hereby agrees to indemnify Mortgagee
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as to Environmental Claims in accordance with Section 9.7 of the Credit
Agreement.
SECTION 4.
ASSIGNMENT OF RENTS AND LEASES
4.1 ASSIGNMENT. Mortgagor hereby transfers and assigns to Mortgagee all
present and future leases of any part of the Property where the gross annual
rental of such Property equals or exceeds $50,000 (the "Leases"), all guarantees
of any lessee's performance thereunder, and all rents, income, revenues and
profits arising out of the Property, all as further security for the payment of
the Indebtedness. The rights assigned hereunder include but are not limited to
all of Mortgagor's rights (a) to make material modifications of the Leases; (b)
to terminate or to accept the surrender thereof; (c) to waive or release the
lessees from the observance or performance by the lessees of any material
covenant or condition of the Leases; and (d) to give any consent to any
assignment of the Leases or any sublease of any part of the Property.
4.2 DUTIES OF MORTGAGOR. Mortgagor will observe and perform all
covenants and conditions to be observed or performed by the lessor under the
Leases and enforce the observance and performance of the Leases by the lessees.
Mortgagor will not cancel, surrender, terminate, or materially alter, amend or
modify any Leases, release any party liable thereunder or consent to the
assignment of the interests of any lessees without the prior written consent of
Mortgagee which consent will not be unreasonably withheld; and Mortgagee will be
deemed to have consented to any such items if Mortgagee fails to object thereto
within 5 days of receipt of a written request for Mortgagee's consent.
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<PAGE> 12
4.3 RIGHTS OF MORTGAGEE. If Mortgagor fails to observe or perform any
covenant or condition to be observed or performed by Mortgagor under any of the
Leases, Mortgagee, without obligation to do so and without releasing Mortgagor
from its obligation to do so, may, upon 10 days prior written notice to
Mortgagee perform such covenant or condition and, to the extent that Mortgagee
incurs any costs or pays any monies in connection therewith, including any costs
or expenses of litigation, the costs and expenses will be due on demand and will
be included in the indebtedness secured hereby and will bear interest from the
incurring or payment thereof at the rate equal to four percent (4%) per annum in
excess of the Eurodollar Base Rate but not less than eighteen percent (18%) per
annum and not more than the highest rate permitted by applicable law (the
"Default Rate").
4.4 INDEMNIFICATION. Mortgagee will not be obligated to perform or
discharge any obligation or duty of Mortgagor under any of the Leases, and the
acceptance of this Assignment does not constitute an assumption of any such
obligation or duty. Mortgagee will not be deemed to have any responsibility for
the control, care, management or repair of the Property or any responsibility or
liability for any negligence in the management, operation, upkeep, repair or
control of the Property resulting in loss, injury or death to any lessee,
licensee, employee, stranger or other person. Mortgagor will indemnify and hold
Mortgagee harmless against all liabilities, losses and damages that Mortgagee
may incur under the Leases or under or by reason of this assignment except for
Mortgagee's grossly negligent acts or liabilities, losses and damages arising
out of Mortgagee's possession or control of the Property.
4.5 RENT. Provided that no Event of Default exists, Mortgagor will have
the right to collect all rents under any Lease, provided that upon the
occurrence and continuance of an Event of Default, Mortgagee may take
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such actions with respect to the Leases and the rents, issues and profits
(including the notification to lessees to make rent payments directly to
Mortgagee) from the Property, as permitted by law or in equity, including, but
not limited to, the remedies set forth in Section 6, below.
4.6 CONTRACTS. Mortgagor shall not enter into any contract for the
management of the Property or appoint a rental agent for the Property without
the prior written consent of Mortgagee.
SECTION 5.
UNIFORM COMMERCIAL CODE SECURITY AGREEMENT
5.1 SECURITY AGREEMENT. This instrument is intended to be a security
agreement pursuant to the Uniform Commercial Code for any of the items specified
above as part of the Property which may be subject to a security interest
pursuant to the applicable version of the Uniform Commercial Code, and Mortgagor
hereby grants the Mortgagee a security interest in such items.
5.2 FILINGS. Mortgagor agrees that this instrument, or a reproduction
thereof, may be filed in the real estate records or other appropriate index as a
financing statement for any of the items specified above (including fixtures) as
part of the Property. Any reproduction of this instrument or of any other
security agreement or financing statement shall be sufficient as a financing
statement. Mortgagor agrees to execute and deliver to the Mortgagee upon
request, any financing statements, as well as extensions, renewals and
amendments thereof, and reproductions of this instrument in such form as the
Mortgagee may require to perfect a security interest with respect to said items.
Mortgagor shall pay all costs of filing such financing statements and any
extensions,
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renewals, amendments and releases thereof, and shall pay all reasonable costs
and expenses of any record searches for financing statements the Mortgagee may
require.
5.3 OTHER LIENS. Without the prior written consent of Mortgagee,
Mortgagor shall not create or suffer to be created any Lien in, of or on any of
the property or assets of Mortgagor, except for Liens permitted under Section
6.17 of the Credit Agreement and except for purchase money security interests in
or leases of equipment. Mortgagor shall keep its books, records and documents
concerning the Property available for inspection in accordance with Section 6.9
of the Credit Agreement.
5.4 CONTRACTS. Mortgagor will observe and perform all covenants and
conditions to be performed by Mortgagor under any contracts which are included
within the Property, will enforce such contracts, will not materially modify
such contracts, terminate such contracts or release parties thereto without
consent of the Mortgagee and will not assign or encumber its interest therein.
The assignment and grant of a security interest in the Property does not
constitute an assumption by Mortgagee of an obligation or duty thereunder.
5.5 REMEDIES. Upon the occurrence and continuance of any Event of
Default, Mortgagee shall have the remedies of a secured party under the Uniform
Commercial Code and, at Mortgagee's option, may also invoke the remedies
provided in this instrument, the Loan Documents and under applicable law. In
exercising any of said remedies, Mortgagee may proceed against the items of real
property and any items of personal property specified above as part of the
Property separately or together and in any order whatsoever, without in any way
affecting the availability of Mortgagee's remedies under the Uniform Commercial
Code or of the remedies in this instrument. Taking possession of any of the
Property and the performance of the obligations of Mortgagor thereunder will not
operate
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<PAGE> 15
to cure or waive any Event of Default or prohibit the taking of any other action
by Mortgagee under any instrument or at law or in equity to enforce the payment
of the Indebtedness or to realize upon any other security or guarantee therefor.
Mortgagee may, so far as Mortgagor can give authority therefor, enter upon any
premises on which the Property or the books and records relating to the Property
are located and take possession of and remove the same therefrom. Mortgagor
waives all claims for damages by reason of any seizure, repossession, retention
or sale of the Property under the terms hereof. Any requirement of reasonable
notice, if necessary, will be met if such notice is mailed, postage prepaid, to
the address of Mortgagor shown in section 7.7 below, at least 10 days before the
time of the sale or other disposition of the Property. The net proceeds arising
from the disposition of the Property, after deducting Mortgagee's expenses, will
be applied to the Indebtedness in the order determined by Mortgagee. If any
excess remains after the discharge of all for the Indebtedness and the payment
of all such expenses, it will be paid to Mortgagor.
5.6 CONFLICTS. In the event of any conflict between this Section and
the Subsidiary Security Agreement (as defined in the Credit Agreement) the
provision in the Subsidiary Security Agreement shall control.
SECTION 6.
DEFAULT; REMEDIES
6.1 EVENTS OF DEFAULT. The entire Indebtedness shall become due, at the
option of Mortgagee, if any one or more of the following events (each an "Event
of Default") shall occur and be continuing beyond any applicable grace or notice
period:
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<PAGE> 16
1.1 Default (as defined therein) occurs under the Credit
Agreement or a default or Default (as defined therein) occurs under any other
instrument now or hereafter securing the Indebtedness; or
1.2 The breach by Mortgagor of any covenant contained in
Section 3 herein or any representation or warranty made or deemed made by or on
behalf of Mortgagor to Mortgagee in Section 3 herein is materially false on the
date as of which it was made; or
1.3 The breach by Mortgagor of any of its obligations
contained in Sections 4 or 5 herein.
6.2 REMEDIES. At any time while there exists an Event of Default,
Mortgagee shall have all rights and remedies provided at law or in equity or
under this Mortgage, including the right to accelerate the maturity of the
Indebtedness and the right to foreclose the lien of this Mortgage.
6.3 WAIVERS. The failure of Mortgagee to exercise either or both of its
options to accelerate the maturity of the Indebtedness and to foreclose the lien
hereof following any Event of Default, or to exercise any other option granted
to Mortgagee of partial payments of such Indebtedness, shall neither constitute
a waiver of any such Event of Default or of Mortgagee's options hereunder nor
establish, extend or affect any grace period for payments due under the Notes,
but such options shall remain continuously in force. Acceleration of maturity,
once claimed hereunder by Mortgagee, may, at Mortgagee's option, be rescinded by
written acknowledgment to that effect by Mortgagee and shall not affect
Mortgagee's right to accelerate maturity upon or after any future Event of
Default.
6.4 EXPENSES. In any proceeding to foreclose the lien of this Mortgage
or enforce any other remedy of
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<PAGE> 17
Mortgagee under the Notes, this Mortgage, the Credit Agreement, the Guaranty or
any other document securing the Indebtedness, or in any other proceeding
whatsoever in connection with any of the Property in which Mortgagee is named as
a party, there shall be allowed and included, as additional Indebtedness in the
judgment or decree resulting therefrom, all reasonable expenses paid or incurred
in connection with such proceeding by or on behalf of Mortgagee constituting
attorneys' fees, appraisers' fees, outlays for documentary and expert evidence,
stenographers' charges, publication costs, survey costs, and costs (which may be
estimated as to items to be expended after entry of such judgment or decree) or
procuring all abstracts of title, title searches and examinations, title
insurance policies, Torrens certificates and any similar data and assurances
with respect to title to the Property as Mortgagee may deem reasonably necessary
either to prosecute or defend in such proceeding or to evidence to bidders at
any sale pursuant to such decree the true condition of the title to or value of
the Property. All expenses of the foregoing nature, and such expenses as may be
incurred in the protection of any of the Property and the maintenance of the
lien of this Mortgage thereon, including, without limitation, the fees of any
attorney employed by Mortgagee in any litigation affecting the Notes, this
Mortgage or any of the Property, or in preparation for the commencement or
defense of any proceeding or threatened suit or proceeding in connection
therewith, shall be immediately due and payable by Mortgagor with interest
thereon at the Default Rate.
6.5 PROCEEDS. The proceeds of any foreclosure sale of the Property, or
any part thereof, shall be distribut ed and applied in the following order of
priority: (a) on account of all reasonable costs and expenses incident to the
foreclosure proceedings, including all such items as are mentioned in Section
6.4 hereof; (b) all other items that, under the terms of this Mortgage,
constitute In-
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debtedness additional to that evidenced by the Guaranty, with interest thereon
at the Default Rate; (c) all principal and interest remaining unpaid under the
Guaranty, in the order of priority specified by Mortgagee in its sole
discretion; and (d) the balance to Mortgagor or its successors or assigns, as
its interests may appear.
6.6 ADDITIONAL REMEDIES. If an Event of Default shall have occurred and
be continuing Mortgagee, at its option, in addition to the other remedies
provided herein or in law or equity, may proceed to enter upon, take possession
of, and manage and operate the Property and may proceed to perform any or all
obligations of Mortgagor under the Leases, and exercise the rights of Mortgagor
contained therein as fully as Mortgagor itself could, without regard to the
adequacy of security for the Indebtedness and with or without bringing any legal
action or causing any receiver to be appointed by any court; may let or re-let
the Property or any part thereof and enforce, modify, cancel or accept the
surrender of any of the Leases; may bring or defend any suits in connection with
the possession of the Property or any part thereof, in the name of either
Mortgagor or Mortgagee; may make such repairs as Mortgagee may deem appropriate;
may pay out of rents, income or profits any liens, taxes, assessments, insurance
premiums, utility charges or costs of keeping the Property in good condition and
repair; may in the name of either Mortgagor or Mortgagee sue for or otherwise
collect and receive all rents, issues and profits, including those past due and
unpaid; and may do all other things Mortgagee may deem necessary or proper to
protect its security. Entry upon and taking possession of the Property and the
collection of the rents and the application thereof will not operate to cure or
waive any default under any Loan Document to which Mortgagor is a party or
prohibit the taking of any other action by Mortgagee under any such Loan
Document, or at law or in equity to enforce the payment of the Indebtedness or
to realize on any other security or guarantee.
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6.7 RECEIVERS. Upon or at any time while there exists an Event of
Default, Mortgagee may request the appointment of a receiver of the Property.
Such appointment may be made either before or after any foreclosure action or
sale, without notice and without regard to the solvency or insolvency, at the
time of application for such receiver, of the person or persons, if any, liable
for the payment of the Indebtedness without regard to the value of the Property
at such time and whether or not the same is then occupied as a homestead and
without bond being required of the applicant. Such receiver shall have the power
to take possession, control and care of the Property and to collect all rents,
issues, deposits and profits thereof.
6.8 RIGHTS OF MORTGAGEE. If Mortgagor fails to pay any Taxes or to make
any other payment required to be paid by Mortgagor at the time and in the manner
provided in this Mortgage, or if any Event of Default occurs and is continuing,
then without limiting the generality of any other provision of this Mortgage and
without waiving or releasing Mortgagor from any of its obligations hereunder,
Mortgagee shall have the right, but shall be under no obligation, to pay any
Taxes or other payment, or such sums due under this Mortgage, and may perform
any other act or take such action as may be appropriate to cause such other
term, covenant, condition or obligation to be promptly performed or observed on
behalf of Mortgagor, provided that, unless in Mortgagee's judgment the sending
of a 10-day notice shall impair the security for the lien of the Mortgage,
Mortgagee shall give Mortgagor 10 days' prior written notice prior to making any
such payment. In any such event, Mortgagee and any person designated by
Mortgagee shall have, and is hereby granted, the right to enter upon the
Property at any time and from time to time for the purpose of performing any
such act or taking any such action, and all monies expended by Mortgagee in
connection with making such payment or performing such
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act (including, but not limited to, legal expenses and disbursements), together
with interest thereon at the Default Rate, from the date of each such
expenditure, shall be paid by Mortgagor to Mortgagee forthwith upon demand by
Mortgagee and shall be secured by this Mortgage.
SECTION 7.
MISCELLANEOUS
7.1 RIGHTS CUMULATIVE. The rights of Mortgagee arising under the
provisions and covenants contained in this Mortgage and the Notes and other
documents securing the Indebtedness or any part thereof shall be separate,
distinct and cumulative and none of them shall be exclusive of the others. No
act of Mortgagee shall be construed as an election to proceed under any one
provision herein or in such other documents to the exclusion of any other
provision, anything herein or otherwise to the contrary notwithstanding.
7.2 WAIVERS. A waiver in one or more instances of any of the terms,
covenants, conditions or provisions hereof, or of the Notes or any documents
securing the Indebtedness or any part thereof, shall apply to the particular
instance or instances and at the particular time or times only, and no such
waiver shall be deemed a continuing waiver, but all of the terms, covenants,
conditions and other provisions of this Mortgage and of such other documents
shall survive and continue to remain in full force and effect. No waiver shall
be asserted against Mortgagee unless in writing signed by Mortgagee.
7.3 TITLES. The titles to the Sections hereof are for reference only
and do not limit in any way the content thereof.
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7.4 AMENDMENTS. No change, amendment, modification, cancellation or
discharge hereof, or any part hereof, shall be valid unless in writing and
signed by the parties hereto or their respective successors and assigns.
7.5 GOVERNING LAW. This Mortgage shall be construed, interpreted,
enforced and governed by and in accordance with the law of the State of
Illinois. Notwithstanding the foregoing, the internal laws of the State of
Florida shall govern the lien priority and validity of this Mortgage and
procedures with respect to the foreclosure hereof.
. It is agreed that the lien herebycreated shall take precedence over
and be a prior lien to any other lien of any character whether vendor's,
materialmen's or mechanic's lien hereafter created on the Property, and in the
event the proceeds of the Indebtedness as set forth herein are used to pay off
and satisfy any liens heretofore existing on the Property (other than Liens
permitted under Section 6.7 of the Credit Agreement), then Mortgagee is, and
shall be, subrogated to all of the rights, liens and remedies of the holders of
the lien so satisfied.
7.6 NOTICES. All notices, demands and requests given or required to be
given by either party hereto to the other party shall be in writing and shall be
deemed to have been properly given if sent by certified mail, postage prepaid,
return receipt requested, addressed as follows:
To Mortgagor at: Jacor Broadcasting of
Florida, Inc.
c/o Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
21
<PAGE> 22
Attn: R. Christopher Weber
Copy to: Gerald F. O'Connell, Jr., Esq.
Graydon Head & Ritchey
P.O. Box 6464
Cincinnati, Ohio 45201
To Mortgagee at: Banque Paribas
227 West Monroe Street
Suite 3300
Chicago, Illinois 60606
Attn: Steve Heinen
Mark Radzik
Copy to: Randall J. Rademaker, Esq.
Skadden, Arps, Slate, Meagher
& Flom
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60606
or to such other address as Mortgagor or Mortgagee may from time to time
designate by ten (10) days' prior written notice.
7.7 CONSTRUCTION. Any words herein which are used in one gender shall
be read and construed to mean or include the other genders wherever they would
so apply. Any words herein which are used in the singular shall be read and
construed to mean and to include the plural wherever they would so apply, and
vice versa.
7.8 WAIVERS BY MORTGAGOR. Mortgagor hereby expressly waives, to the
extent permitted by law, the equity of redemption, any statutory right of
redemption,
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<PAGE> 23
dower and homestead and all other rights and exemptions of every kind in and to
the Property.
7.9 INTEREST, VARIABLE RATE. The rate of interest payable on the
outstanding principal balance due under the Notes, the payment of which is
guaranteed by Mortgagor under the Guaranty, as accrued interest each month,
could change from time to time as provided in the Credit Agreement. If from any
circumstances whatsoever the fulfillment of any provision of this instrument
involves transcending the limit of validity prescribed by any applicable usury
statute or any other applicable law (it being the intention of Mortgagor and
Mortgagee that the applicable usury laws of Illinois will govern) with regard to
obligations of like character and amount, then the obligation to be fulfilled
will be reduced to the limit of such validity as provided in such statute or
law, so that in no event will any exaction of interest be possible under this
instrument in excess of the limit of such validity. In no event will Mortgagor
be bound to pay interest of more than the legal limit for the use, forbearance
or detention of money and the right to demand any such excess is hereby
expressly waived by Mortgagee.
7.10 RELEASES. Mortgagor agrees that Mortgagee, without notice to or
further consent of Mortgagor, may release or discharge any persons who are or
may become liable for the payment of the Indebtedness or release or discharge
any other collateral for the payment of the Indebtedness and any such release or
discharge shall not alter, modify, release or limit the validity and enforce-
ability of this Mortgage or the liability of Mortgagor under the Indebtedness or
this Mortgage.
7.11 FCC CONSENT. Notwithstanding anything to the contrary contained
herein or in any other agreement, instrument or document executed by Mortgagor
and otherparties and delivered to Mortgagee, Mortgagee will not take any action
pursuant to this Mortgage that would
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<PAGE> 24
constitute or result in any assignment of license or any change of control of
Mortgagor if such assignment of license or change of control would require,
under then existing law, the prior approval of the Federal Communications
Commission ("FCC") without first obtaining such prior approval of the FCC.
Mortgagor agrees to take any action which Mortgagee may reasonably request in
order to obtain from the FCC such approval as may be necessary to enable
Mortgagee to exercise and enjoy the full rights and benefits granted to the
holder of the Indebtedness by this Mortgage and each other agreement, instrument
and document delivered to the Mortgagee in connection therewith, including
specifically, at the cost and expense of Mortgagor, the use of its best efforts
to assist in obtaining approval of the FCC for any action or transaction
contemplated by this Mortgage for which such approval is or shall be required by
law and specifically, without limitation, upon request, to prepare, sign and
file with the FCC the assignor's or transferor's portion of any application or
applications for consent to the assignment of license or transfer of control
necessary or appropriate under the FCC's rules and regulations for approval of
(a) any sale or sales of all or any part of the Property by or on behalf of
Mortgagee or (b) any assumption by the Mortgagee of voting or management rights
with respect to all or any part of the Property effected in accordance with the
terms of this Mortgage.
7.12 SUCCESSORS AND ASSIGNS. This Mortgage shall inure to the benefit
of and be binding upon Mortgagor and Mortgagee and their respective heirs,
executors, legal representatives, successors and assigns. Whenever a reference
is made in this Mortgage to Mortgagor or Mortgagee, such reference shall be
deemed to include a reference to the heirs, executors, legal representatives,
successors and assigns of Mortgagor or Mortgagee.
7.13 SEVERABILITY. If any provision of this Mortgage or the application
thereof to any person or circum-
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stance shall be invalid or unenforceable to any extent, the remainder of this
Mortgage and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 8.
DEFEASANCE
Provided, nevertheless, that if Mortgagor shall keep, observe
and perform all of the covenants and conditions of this Mortgage on Mortgagor's
part to be kept and performed and shall pay, or cause to be paid, to Mortgagee
the Indebtedness and all extensions and renewals thereof, and shall repay any
loans and advances hereafter made by Mortgagee under the terms hereof, then this
Mortgage shall be void, otherwise it shall remain in effect.
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<PAGE> 26
Executed at_________, _________, on February ___________, 1996
by____________________, the___________ of Mortgagor.
Signed and acknowledged JACOR BROADCASTING OF
in the presence of: TAMPA BAY, INC.,
a Florida corporation
By:________________________
_________________________
Name: Name:______________________
_________________________ Title:_________________________
Name:
<PAGE> 27
STATE OF____________
COUNTY OF___________
The foregoing instrument was acknowledged before me this _________ day
of February, 1996 by_______________________________ as__________________ of
JACOR BROADCASTING OF TAMPA BAY, INC., a Florida corporation, on behalf of the
corporation. He/She is personally known to me or has produced identification and
did take an oath.
_______________________________
Signature of Notary Public (NOTARY STAMP)
Name:__________________________
Notary Public - State of_______
My Commission Expires:_________
Commission No._________________
This Instrument was prepared by:
Alexandra V. Bergstein,
Esq.
Skadden, Arps, Slate,
Meagher, & Flom
333 West Wacker Drive
Suite 2100
Chicago, Illinois 60606
<PAGE> 28
EXHIBIT "A"
That part of the West one-half of Section 28, Township 28
South, Range 17 East, Hillsborough County, Florida, described as: Begin at the
southeast corner of the NW-1/4 of Section 28 and run thence southwest, at a
right angle to the right-of-way of Memorial Highway, to the northerly (or
northeasterly) right-of-way line of Memorial Highway (as the highway
right-of-way existed on April 10, 1972, the highway having a 100 foot wide
right-of-way), run thence northwesterly along the right-of-way line of Memorial
Highway 1,185 feet, thence northeast, at a right angle to the northeasterly
right-of-way line of Memorial Highway to a point on the east boundary of the
NW-1/4 Section 28, run thence south along the east boundary of the NW-1/4 of
Section 28 to the point of beginning.
<PAGE> 1
Recording Requested by and when recorded return to:
Alexandra V. Bergstein, Esq.
Skadden Arps Slate Meagher & Flom
333 West Wacker Drive, Suite 2100
Chicago, IL 60606
This document is intended
to be recorded in San Diego
County, California
THIS DOCUMENT TO BE RECORDED BOTH AS
A DEED OF TRUST AND FIXTURE FILING
DEED OF TRUST AND SECURITY AGREEMENT,
ASSIGNMENT OF LEASES, RENTS AND PROFITS,
FINANCING STATEMENT AND FIXTURE FILING
MADE BY
CHESAPEAKE SECURITIES, INC.
AS TRUSTOR,
TO
CHICAGO TITLE COMPANY,
A CALIFORNIA CORPORATION,
AS TRUSTEE,
FOR THE BENEFIT OF
BANQUE PARIBAS, AS AGENT
AS BENEFICIARY
THIS DEED OF TRUST CONSTITUTES A FIXTURE FILING UNDER SECTION 9313 OF
THE UNIFORM COMMERCIAL CODE OF THE STATE OF CALIFORNIA. TO THE EXTENT THE GOODS
ARE FIXTURES UNDER THE LAWS OF THE STATE OF CALIFORNIA, THE FIXTURES ARE OR ARE
TO BECOME FIXTURES ON THE REAL PROPERTY LOCATED IN THE COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED ON EXHIBIT A ATTACHED HERETO,
COMMONLY KNOWN BY THE STREET ADDRESS: 4891 PACIFIC HIGHWAY, SAN DIEGO,
CALIFORNIA 92110. THE NAME OF THE RECORD OWNER OF THE REAL PROPERTY IS
CHESAPEAKE SECURITIES, INC.
2
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE 1 REPRESENTATIONS, WARRANTIES, COVENANTS
<S> <C>
AND AGREEMENTS OF THE TRUSTOR........................................................ 4
1.1 Title to this Property................................................... 4
1.2 Compliance with Law...................................................... 5
1.3 Payment and Performance of Obligations................................... 5
1.4 Maintenance, Repair, Alterations, Etc.................................... 5
1.5 Required Insurance....................................................... 5
1.6 Policy Provisions, Etc................................................... 6
1.7 Insurance Proceeds....................................................... 6
1.8 Indemnification; Subrogation; Waiver of Offset........................... 6
1.9 Impositions.............................................................. 8
1.10 Utilities................................................................ 9
1.11 Actions Affecting this Property.......................................... 9
1.12 Condemnation............................................................. 9
1.13 Additional Security...................................................... 10
1.14 Successors and Assigns................................................... 10
1.15 Inspections.............................................................. 10
1.16 Transfers................................................................ 10
1.17 Indebtedness Secured by Liens............................................ 10
1.18 Environmental Protection Matters......................................... 10
1.19 Actions by the Beneficiary to Preserve this Property..................... 10
1.20 Permitted Contests....................................................... 11
1.21 Continued Occupancy...................................................... 11
1.22 The Credit Agreement..................................................... 12
1.23 Brokers.................................................................. 12
1.24 Recordation of Deed of Trust and Financing
Statements............................................................... 12
1.25 After Acquired Property Interests........................................ 13
1.26 Zoning and Title Matters................................................. 13
1.27 Changes to Deed of Trust or Related Loan Documents....................... 13
ARTICLE 2 SECURITY AGREEMENT................................................................... 14
2.1 Creation of Security Interest............................................ 14
2.2 Representations, Warranties and Covenants of the
Trustor.................................................................. 15
2.3 Survival of Security Agreement........................................... 16
2.4 Election of Remedies..................................................... 16
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS CONTINUED
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 3 ASSIGNMENT OF LEASES, RENTS AND PROFITS.............................................. 17
3.1 Assignment............................................................... 17
ARTICLE 4 EVENTS OF DEFAULT AND REMEDIES....................................................... 18
4.1 Events of Default........................................................ 18
4.2 Remedies Upon Default.................................................... 18
4.3 Sale of Premises Pursuant to Foreclosure................................. 20
4.4 Appointment of Receiver.................................................. 20
4.5 Remedies Not Exclusive................................................... 21
4.6 Waiver of Redemption, Notice, Marshalling, Etc........................... 21
4.7 Expenses of Enforcement.................................................. 22
ARTICLE 5 ADDITIONAL COLLATERAL................................................................ 22
5.1 Additional Collateral.................................................... 22
ARTICLE 6 MISCELLANEOUS........................................................................ 23
6.1 Governing Law............................................................ 23
6.2 Limitation on Interest................................................... 24
6.3 Notices.................................................................. 24
6.4 Captions................................................................. 24
6.5 Waiver; Amendment........................................................ 24
6.6 Obligations Absolute..................................................... 24
6.7 Further Assurances....................................................... 24
6.8 Remedies Cumulative...................................................... 25
6.9 Partial Invalidity....................................................... 25
6.10 Priority................................................................. 25
6.11 Trustor's Liability...................................................... 25
6.12 Full Recourse............................................................ 25
6.13 Acknowledgment of Receipt................................................ 26
6.14 Release Upon Full Payment................................................ 26
6.15 Time of the Essence...................................................... 26
6.16 Leases................................................................... 26
6.17 Suits to Protect Property................................................ 26
6.18 Rules of Usage........................................................... 26
6.19 Additional Advances...................................................... 27
6.20 Beneficiary's Powers..................................................... 28
</TABLE>
ii
<PAGE> 4
TABLE OF CONTENTS CONTINUED
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 7 CONCERNING THE TRUSTEE............................................................... 28
7.1 Covenants of the Trustee................................................. 28
7.2 Resignation; Removal of the Trustee...................................... 29
7.3 Actions by Trustee....................................................... 29
ARTICLE 8 FIXTURE FILING....................................................................... 29
</TABLE>
iii
<PAGE> 5
DEED OF TRUST AND SECURITY AGREEMENT,
ASSIGNMENT OF LEASES, RENTS AND PROFITS,
FINANCING STATEMENT AND
FIXTURE FILING
THIS DEED OF TRUST AND SECURITY AGREEMENT, ASSIGNMENT OF LEASES, RENTS
AND PROFITS, FINANCING STATEMENT AND FIXTURE FILING, dated as of February __,
1996 (as amended, modified or supplemented from time to time, this "Deed of
Trust") is made by CHESAPEAKE SECURITIES, INC., a Delaware corporation with an
office at 312 West Douglas, El Cajon, California 92020, as Trustor (the
"Trustor") to Chicago Title Company, a California corporation, as Trustee (the
"Trustee") for the benefit of BANQUE PARIBAS, as Agent for the Banks, the
Co-Agents and the Interest Rate Providers as those terms are defined in that
certain Credit Agreement (as defined below), as Beneficiary (the "Beneficiary").
Except as otherwise defined herein, capitalized terms used herein and defined in
the Credit Agreement shall be used herein as so defined.
W I T N E S S E T H
WHEREAS, Jacor Communications, Inc. (the "Borrower") and the
Beneficiary have entered into a Credit Agreement, dated as of the date hereof,
providing for the making of Loans to the Borrower as contemplated therein (as
used herein, the term "Credit Agreement" means the Credit Agreement described
above in this paragraph, as the same may be amended, modified, extended,
renewed, replaced, restated, supplemented or refinanced from time to time, and
including any agreement executed by the Borrower extending the maturity of,
refinancing or restructuring (including, but not limited to, the inclusion of
additional borrowers or guarantors thereunder or any increase in the amount
borrowed) all or any portion of the Indebtedness under such agreement or any
successor agreements, whether or not with the same agent, trustee,
representative lenders or holders);
WHEREAS, pursuant to a Subsidiary Guaranty dated as of the date hereof,
made by Trustor and the other Subsidiary Guarantors for the benefit of the
Beneficiary (as amended, modified or supplemented from time to time, the
"Subsidiary Guaranty"), Trustor and the other Subsidiary Guarantors have
guaranteed to the Beneficiary the payment when due of all obligations and
liabilities of the Borrower under or with respect to the Loan Documents;
WHEREAS, it is a condition precedent to the extensions of credit under
the Credit Agreement that the Trustor shall have executed and delivered to the
Beneficiary this Deed of Trust;
WHEREAS, the Trustor desires to enter into this Deed of Trust to
satisfy the condition in the preceding paragraph and to secure (and this Deed of
Trust shall secure) the following:
<PAGE> 6
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all of Trustor's obligations and
liabilities now existing or hereafter incurred under, arising out of or in
connection with the Subsidiary Guaranty with respect to (x) the Indebtedness of
the Borrower under the Credit Agreement and (y) all other obligations and
indebtedness (including, without limitation, indemnities, fees and interest
thereon) of the Borrower, now existing or hereafter incurred under, arising out
of or in connection with the Credit Agreement and the other Credit Documents and
the due performance of and compliance with the terms of the Credit Documents by
the Borrower and Trustor;
(ii) all obligations of Trustor arising under or defined in that
certain (x) Intercompany Acquisition Note (the "Intercompany Acquisition Note")
and (y) Intercompany Demand Note (the "Intercompany Demand Note"), each as
defined in the Credit Agreement
(iii) any and all sums advanced by the Beneficiary in order to preserve
or protect the Property (as hereinafter defined) or preserve or protect its
security title and interest in the Property;
(iv) in the event of any proceeding for the collection or enforcement
of any indebtedness, obligations, or liabilities of the Trustor referred to in
clauses (i), (ii) or (iii) above after an Event of Default (as hereinafter
defined) shall have occurred and be continuing, the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Property, or of any exercise by the Beneficiary of its
rights hereunder, together with reasonable attorneys' fees and court costs;
(v) all amounts paid by any Indemnitee (as hereinafter defined) as to
which such Indemnitee has the right to reimbursement under Section 1.8 of this
Deed of Trust; and
(vi) any and all renewals, extensions and modifications of any of the
obligations and liabilities referred to in clauses (i) (ii) and (iii) above; all
such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) above being herein collectively called the "Obligations"; provided
that it is acknowledged and agreed that the "Obligations", shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement.
NOW, THEREFORE, in consideration of the benefits accruing to the
Trustor, the receipt and sufficiency of which are hereby acknowledged, AND TO
SECURE THE OBLIGATIONS, THE TRUSTOR HEREBY IRREVOCABLY AND ABSOLUTELY GRANTS,
BARGAINS, SELLS, WARRANTS, CONVEYS, REMISES, RELEASES, ASSIGNS, SETS OVER AND
CONFIRMS TO THE BENEFICIARY AND ITS SUCCESSORS AND ASSIGNS FOREVER WITH POWER OF
SALE AND RIGHT OF ENTRY AND POSSESSION, all of the Trustor's estate, right,
title and interest, whether now owned or hereafter acquired, in and to all of
the following described land and interests in land, estates, easements,
tenements, rights, improvements, property, fixtures, machinery and equipment:
2
<PAGE> 7
A. The land described in Exhibit A hereto (the Land");
B. The buildings and improvements now or hereafter erected on the Land
(collectively the "Improvements");
C. All fixtures, attachments, appliances, equipment, machinery,
building materials and supplies, and other tangible personal property owned by
the Trustor and now or hereafter attached to said Improvements or now or at any
time hereafter located on the Land and/or Improvements including, but not
limited to, furnaces, boilers, oil burners, piping, plumbing, refrigeration, air
conditioning and sprinkler systems, elevators, motors, dynamos and all other
equipment and machinery, appliances, fittings and fixtures of every kind located
in or used in the operation of the Improvements, structures or buildings located
on the Land, together with any and all replacements or substitutions thereof and
additions thereto (hereinafter sometimes collectively referred to as the
"Equipment");
TOGETHER with all appurtenant rights and easements, rights of way, and
other rights appurtenant to the use and enjoyment of or used in connection with
the Land and/or the Improvements;
TOGETHER with (1) all streets, roads and public places (whether open or
proposed) now or hereafter adjoining or otherwise providing access to the Land,
(2) the land lying in the bed of such streets, roads and public places, and (3)
all other sidewalks, alleys, ways, passages, vaults, water courses, strips and
gores of land now or hereafter adjoining or used or intended to be used in
connection with all or any part of the Land;
TOGETHER with all of the Trustor's right, title and interest in, to and
under leases, leasehold estates and in any leases or other agreements, relating
to the use and occupancy of the Land and/or the Improvements or any portion
thereof;
TOGETHER with all rents, issues and profits of this Property subject to
Section hereof (collectively, "Rents");
TOGETHER with all the right, title, other claim or demand, including
claims or demands with respect to the proceeds of insurance in effect with
respect thereto, which the Trustor now has or may hereafter acquire in the
Property (as defined below) , and any and all awards made for the taking by
eminent domain, or by any proceedings or purchase in lieu thereof, of the whole
or any part of the Property;
TOGETHER with all of the Trustor's right, title and interest and estate
in and to any zoning lot agreements and air rights and development rights which
may be vested in the Trustor under or pursuant thereto, together with any
additional air rights or development rights which have been or may hereafter be
conveyed to or become vested in the Trustor (collectively, the "Air Rights");
the Land, the Improvements, the Air Rights, the Equipment and all other property
and
3
<PAGE> 8
interests and appurtenant rights and easements described above as being subject
to this Deed of Trust are herein referred to collectively as "the Property";
The entire estate, right, property and interest hereby conveyed to the
Beneficiary may be referred to herein as "the Property."
AND without limiting any of the other provisions of this Deed of Trust,
the Trustor expressly grants to the Beneficiary, as secured party, a security
interest in the portion of the Property which is or may be subject to the
California Uniform Commercial Code (the "Uniform Commercial Code") provisions
applicable to secured transactions, and the Beneficiary shall have, in addition
to all rights and remedies provided herein, and in any other agreements made by
the Trustor to the Beneficiary, all of the rights and remedies of a "secured
party" under said uniform commercial Code; it being understood and agreed that
the Improvements and Equipment are part and parcel of the Property appropriated
to the use thereof and, whether affixed or annexed to the Land or the buildings
and structures thereon or not, shall for the purposes of this Deed of Trust be
deemed conclusively to be real estate and transferred and conveyed hereby; and
the Trustor agrees to execute and deliver from time to time, such further
instruments (including security agreements) as may be reasonably requested by
the Beneficiary to confirm the lien of this Deed of Trust on any Improvements.
TO HAVE AND TO HOLD the said bargained Property, together with all and
singular rights, members and appurtenances thereof to the same in any manner
belonging or appertaining, to the own proper use, benefit and behoof of the
Beneficiary, its successors and assigns.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, the Trustor
covenants and agrees as follows:
ARTICLE 1
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS OF THE TRUSTOR
1.1 Title to this Property. The Trustor represents and warrants (a)
that it has good fee title to the Property, free and clear of any liens and
encumbrances (except Permitted Encumbrances), and is lawfully seized and
possessed of the Property; (b) that this Deed of Trust is a valid first priority
lien upon and security title to the Property (subject to Permitted
Encumbrances); (c) that the Trustor has full corporate power and authority to
encumber the Property in the manner set forth herein; and (d) that there are no
defenses or offsets to this Deed of Trust or to the Obligations which it
secures. The Trustor shall, subject to Permitted Encumbrances, preserve such
title and the validity and priority of this Deed of Trust and shall forever
warrant and defend the same to the Beneficiary and the Trustee against the
claims of all persons claiming by, through or under the Trustor.
4
<PAGE> 9
1.2 Compliance with Law. (a) The Trustor represents to the best of its
knowledge that it possesses all certificates, licenses, authorizations,
registrations, permits and/or approvals (including, without limitation, a
certificate of occupancy) necessary for the ownership, operation, leasing and
management of the Property, including, without limitation, all required
environmental permits, all of which are in full force and effect and not the
subject of any revocation proceeding, undisclosed amendment, release,
suspension, forfeiture or the like. The present and contemplated use and
occupancy of the Property does not conflict with or violate any such
certificate, license, authorization, registration, permit or approval.
(b) Agreements. Except for Permitted Encumbrances, the Trustor
has not entered into any contract or other agreement providing for the transfer,
conveyance or encumbrance of the Property or any part thereof or interest
therein.
1.3 Payment and Performance of Obligations. The Trustor shall pay all
of the Obligations when due and without offset or counterclaim, and shall
observe and comply in all respects with all of the terms, provisions,
conditions, covenants and agreements to be observed and performed by it under
this Deed of Trust, the Subsidiary Guaranty, the Intercompany Acquisition Note
and the Intercompany Demand Note.
1.4 Maintenance, Repair, Alterations, Etc. The Trustor will: keep and
maintain the Property in good condition and repair (normal wear and tear
excepted); make or cause to be made, as and when necessary, all repairs,
renewals and replacements, structural and nonstructural, exterior and interior,
ordinary and extraordinary, foreseen and unforeseen which are necessary to so
maintain the Property; except as otherwise provided in Sections or hereof,
restore any Improvement which may be damaged or destroyed so that the same
shall, to the extent permitted by applicable law be at least substantially equal
to its value, condition and character immediately prior to the damage or
destruction, and promptly pay when due, subject to the provisions of section
hereof, all claims for labor performed and materials furnished therefor; comply
with all applicable statutes, regulations and orders of and all applicable
restrictions imposed by any and all governmental bodies (collectively, a "Law")
now or hereafter affecting this Property or any part thereof or the use thereof
or requiring any alterations or improvements, except to the extent such
noncompliances could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the performance, nature of assets,
contracts, business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the Trustor and its subsidiaries taken
as a whole; not commit or permit any waste or deterioration (normal wear and
tear excepted) of the Property; comply with the provisions of any lease,
easement or other material agreement affecting all or any part of the Property;
and not permit the Improvements or any part thereof to become abandoned.
1.5 Required Insurance. The Trustor will, at its expense, at all times
provide, maintain and keep in force policies of property, hazard and liability
insurance in accordance with current industry practices acceptable to
Beneficiary with respect to the Property, together with statutory
5
<PAGE> 10
workers' compensation insurance with respect to any work to be performed on or
about the Property.
1.6 Policy Provisions, Etc. (a) The Trustor shall pay as and when the
same become due and payable the premiums for all insurance policies that the
Trustor is required to maintain hereunder, and all such policies shall be
nonassessable. The Trustor will deliver to the Beneficiary concurrently herewith
original certificates or certified copies setting forth in reasonable detail the
terms (including, without limitation, any applicable notice requirements) of all
insurance policies that the Trustor is required to maintain hereunder.
(b) Prior to the expiration, termination or cancellation of
any insurance policy which the Trustor is required to maintain hereunder, the
Trustor shall obtain a replacement policy or policies (or a binding commitment
for such replacement policy or policies), which shall be effective no later than
the date of the expiration, termination or cancellation of the previous policy,
and shall deliver to the Beneficiary an original certificate or certified copy
which complies with the requirements of Section hereof, or a copy of a binding
commitment for such policy or policies. The Trustor shall also provide to the
Beneficiary originals of such policies as soon as reasonably possible after the
Beneficiary's request therefor.
(c) All insurers shall be authorized to issue insurance in the
State in which this Property is located, and all insurers and reinsurers shall
have the A.M. Best rating of "A" or better and a financial size rating of XII in
the current edition of Best Insurance Reports or such other ratings as shall be
reasonably acceptable to the Beneficiary.
1.7 Insurance Proceeds. (a) The Trustor shall give prompt written
notice to the Beneficiary of the occurrence of any damage to or destruction of
the Improvements (which term as used in this Section shall include Equipment) in
excess of $100,000 per occurrence.
(b) In the event of any damage to or destruction of the
Improvements or any part thereof, all proceeds of casualty insurance shall be
applied in the manner provided in the Credit Agreement.
(c) If there shall have occurred and be continuing an Event of
Default, the Beneficiary shall have the right to settle, adjust or compromise
any claim under any policy of insurance. In all other cases, the Trustor may
settle, adjust or compromise any claim.
1.8 Indemnification; Subrogation; Waiver of Offset. (a) The Trustor
agrees to indemnify, reimburse and hold the Beneficiary and its respective
successors, assigns, employees, agents and servants (hereinafter in this Section
referred to individually as "Indemnitee," and collectively as "Indemnities")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable actual attorneys' fees and
expenses) (for the purposes of this Section the foregoing are collectively
called "expenses") of whatsoever kind and nature
6
<PAGE> 11
imposed on, asserted against or incurred by any of the Indemnitees, in any way
relating to or arising out of this Deed of Trust, or any other document executed
in connection herewith by Trustor or in any other way connected with the
enforcement of any of the terms of, or the preservation of any rights hereunder,
or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, possession, operation,
condition, sale, return or other disposition, or use of the Property (including,
without limitation, latent or other defects, whether or not discoverable), any
contract claim against the Trustor relating to the Property or, to the maximum
extent permitted under applicable law, the violation of the laws of any country,
state or other governmental body or unit, or any tort (including, without
limitation, claims arising or imposed under the doctrine of strict liability, or
for or on account of injury to or the death of any Person (including any
Indemnitee), or property damage); provided that no Indemnitee shall be
indemnified pursuant to this Section for expenses to the extent caused by the
gross negligence or willful misconduct of such Indemnitee and its successors,
assigns, employees, agents and servants or of any other Indemnitee and their
respective successors and assigns. The Trustor agrees that upon written notice
by any indemnitee of the assertion of such a Liability obligation, damage,
injury, penalty, claim, demand, action, suit or judgment, the Trustor shall at
the request of such Indemnitee assume full responsibility for the defense
thereof.
(b) Without limiting the application of Section hereof, the
Trustor agrees to,pay, or reimburse the Beneficiary for any and all reasonable
and actual fees, costs and expenses of whatever kind or nature incurred in
connection with the creation, preservation or protection of the Beneficiary's
Liens on, and security interest in, the Property, including, without limitation,
all fees and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon or
in respect of the Property, premiums for insurance (to the extent required
herein) with respect to the Property and all other fees, costs and expenses in
connection with protecting, maintaining or preserving the Property and the
Beneficiary's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Property. Notwithstanding the provisions of
this Section and provided that an Event of Default has not occurred and is
continuing, the Beneficiary shall not pay or discharge any Lien for so long as
the Trustor shall, in good faith and at its own expense, contest the same in
accordance with the provisions of Section hereof.
(c) without limiting the application, of Section or (b)
hereof, the Trustor agrees to pay, indemnify and hold each Indemnitee harmless
from and against any loss, costs, damages and expenses which such Indemnitee may
suffer, expend or incur in consequence of or growing out of any
misrepresentation by the Trustor in this Deed of Trust or in any writing
contemplated by or made or delivered by the Trustor pursuant to or in connection
with this Deed of Trust.
(d) Except as provided by law, all sums payable by the Trustor
hereunder shall be paid without counterclaim, set-off, or deduction and without
abatement, suspension, deferment,
7
<PAGE> 12
diminution or reduction, and the obligations and liabilities of the Trustor
hereunder shall in no way be released, discharged or otherwise affected (except
as expressly provided herein and in the Credit Agreement) by reason of: (i) any
damage or any condemnation of the Property or any part thereof; (ii) any
restriction or prevention of or interference with any use of the Property or any
part thereof; (iii) any title defect or encumbrance or any eviction from the
Property or any part thereof by title paramount or otherwise; (iv) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to the Beneficiary, or the
Trustor, or any action taken with respect to this Deed of Trust by any agent or
receiver of the Beneficiary permitted hereunder; (v) any other occurrence
whatsoever, whether similar or dissimilar to the foregoing, whether or not the
Trustor shall have notice or knowledge of any of the foregoing.
(e) Any amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement shall constitute Obligations secured
by the Property. The indemnity obligations of the Trustor contained in this
Section shall continue in full force and effect notwithstanding the full payment
of all the Notes issued under the Credit Agreement and the payment of all other
Obligations and notwithstanding the discharge thereof.
1.9 Impositions. (a) Subject to the provisions of Section hereof, the
Trustor will pay or cause to be paid prior to delinquency all real property
taxes and assessments, general and special, and all other taxes and assessments
of any kind or nature whatsoever, which are assessed or imposed upon any of the
Property, or arising in respect of the operation, occupancy, use or possession
thereof (all of which taxes, assessments and other governmental or
nongovernmental charges of like or different nature are hereinafter referred to
as "Impositions"); provided, however, that if, by Law, any such Imposition is
payable, or may at the option of the payer be paid, in installments, the Trustor
may pay the same together with any accrued interest on the unpaid balance of
such Imposition in installments as the same may become due.
(b) If under the provisions of any Law now or hereafter in
effect there shall be assessed or imposed: (i) a tax or assessment on the
Property in lieu of or in addition to the Impositions payable by the Trustor
pursuant to subparagraph (a) of this Section , or (ii) a license fee, tax or
assessment imposed on the Beneficiary and measured by or based in whole or in
part upon the amount of the outstanding obligations, then all such taxes,
assessments or fees shall be deemed to be included within the term "Impositions"
as defined in subparagraph (a) of this Section , and the Trustor shall pay and
discharge or cause to be paid and discharged the same as herein provided or
shall reimburse or otherwise compensate the Beneficiary for the payment thereof.
(c) The Trustor covenants to furnish to the Beneficiary,
promptly following the Beneficiary's request, official receipts of the
appropriate taxing or other authority, or other proof reasonably satisfactory to
the Beneficiary, evidencing the payment of Impositions as the same become due.
8
<PAGE> 13
(d) The Trustor will pay all taxes, charges, filing,
registration and recording fees, excises levies and mortgage taxes, if
applicable, imposed in connection with the recording of this Deed of Trust or
imposed upon the Beneficiary by reason of its ownership of this Deed of Trust,
and shall pay any and all stamp taxes and other similar taxes required to be
paid on any of the Obligations. In the event the Trustor fails to make any such
payment within thirty (30) days after written notice thereof from the
Beneficiary, then the Beneficiary shall have the right, but shall not be
obligated to, pay the amount due and the Trustor shall, on demand, reimburse the
Beneficiary for said amount. If the Trustor shall fail to reimburse any amounts
paid by the Beneficiary within two (2) Business Days of the payment thereof all
such amounts shall thereafter bear interest at the default rate set forth in
Section 1.8(c) of the Credit Agreement and shall constitute Obligations
hereunder and be secured hereby.
(e) The Trustor covenants to furnish to the Beneficiary,
within twenty (20) days after the request by the Beneficiary, official receipts
of the appropriate taxing or other authority, or other proof reasonably
satisfactory to the Beneficiary, evidencing the payment of the applicable item
described in subsection hereinabove.
1.10 Utilities. The Trustor will pay when due all utility charges which
are incurred by the Trustor for the benefit of the Property or which may become
a charge or lien against the Property for gas, electricity, steam, water or
sewer services furnished to the Property and all other assessments or charges of
a similar nature, whether public or private, affecting the Property whether or
not such taxes, assessments or charges are liens thereon.
1.11 Actions Affecting this Property. The Trustor will appear in and
contest any action or proceeding brought by any third parties unrelated to the
Beneficiary purporting to affect the security hereof or the rights or powers of
the Beneficiary hereunder; and the Trustor will pay all costs and expenses
incurred by the Trustor, including cost of evidence of title and reasonable
actual attorneys' fees, in any such action or proceeding. The Trustor shall give
the Beneficiary prompt notice in writing of any such action or proceeding.
1.12 Condemnation. (a) Should the Property or any part thereof or
interest therein be taken or damaged by reason of any public improvements or
condemnation proceeding or in any other similar manner ("Condemnation"), or
should the Trustor receive any notice thereof, the Trustor shall give prompt
written notice thereof to the Beneficiary.
(b) In the event of a Condemnation of all of this Property or,
any portion thereof, the proceeds of any condemnation award shall be applied in
the manner provided in the Credit Agreement.
(c) If there shall have occurred, and be continuing, an Event
of Default, the Beneficiary alone shall have the right to settle, adjust or
compromise any claim in connection with a Condemnation of the Property. In all
other cases, the Beneficiary and the Trustor shall consult and cooperate with
each other and each shall be entitled to participate in all meetings and
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negotiations with respect to the settlement of such claim provided, however,
that the Beneficiary shall have no right to participate in any such meetings or
negotiations if the proposed Condemnation would not have a material adverse
affect on the value of the Property.
1.13 Additional Security. In the event the Beneficiary at any time
holds additional security for any of the Obligations, it may enforce, sell or
otherwise realize upon the same, at its option, either before or concurrently
herewith or after enforcing its remedies hereunder.
1.14 Successors and Assigns. This Deed of Trust applies to, inures to
the benefit of and binds the parties hereto, the Beneficiary and its respective
successors and assigns.
1.15 Inspections. The Trustor hereby authorizes the Beneficiary, its
agents, representatives or workmen, upon reasonable prior notice to the Trustor,
to visit and inspect any of the Property or any portion(s) thereof, at such
reasonable times and intervals to such reasonable extent as the Beneficiary may
reasonably request.
1.16 Transfers. Subject to the terms of the Credit Agreement, no part
of the Property or of any legal or beneficial interest in the Property shall
hereinafter be sold, assigned, conveyed, leased, transferred or otherwise
disposed of (whether voluntarily or involuntarily, directly or indirectly, by
sale of stock or any interest in the Trustor, or by operation of law or
otherwise). Notwithstanding the foregoing, however, the Property may, subject to
the terms of the Credit Agreement, be hereinafter leased to any Subsidiary of
the Borrower upon the prior written consent of Beneficiary.
1.17 Indebtedness Secured by Liens. Except as otherwise permitted in
the Credit Agreement, the Trustor shall not create, incur or suffer to exist, or
cause to be created, incurred or suffered to exist, directly or indirectly Liens
(other than Permitted Liens) against the Property or any part thereof or any
rents or income arising therefrom.
1.18 Environmental Protection Matters. The Trustor shall comply with
the provisions of the Credit Agreement relating to environmental matters, which
provisions are incorporated herein by reference.
1.19 Actions by the Beneficiary to Preserve this Property. If an Event
of Default shall have occurred and be continuing, the Beneficiary may, but is
not obligated to, pay or perform the Obligations in the same manner and to such
extent as it may deem necessary in its sole discretion. In connection therewith,
without limiting its general powers, the Beneficiary shall have and is hereby
given the right, but not the obligation: (a) to enter upon and take possession
of the Property; (b) to make additions, alterations, repairs and improvements to
the Property which are reasonably necessary or proper to keep the Property in
good condition and repair; (c) to appear and participate in any action or
proceeding affecting or which may affect the security hereof or the rights or
powers of the Beneficiary; (d) to pay, purchase, contest or compromise any
encumbrance, claim, charge, lien or debt which may affect the security of this
Deed of Trust or
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be prior or superior hereto; and (e) in exercising such powers, to pay all
necessary expenses, including the reasonable fees and expenses of counsel or
other necessary or desirable consultants. The Trustor shall, immediately upon
demand therefor by the Beneficiary, pay or reimburse the Beneficiary for all
reasonable costs and expenses incurred by the Beneficiary in connection with the
exercise by the Beneficiary of the foregoing rights, including, without
limitation, cost of evidence of title, court costs, appraisal costs, surveys and
reasonable actual attorneys' fees. In the event this Deed of Trust is placed in
the hands of an attorney for the collection of any sum secured hereby, the
Trustor agrees to pay on demand all reasonable actual costs of collection,
including reasonable actual attorneys' fees, incurred by the Beneficiary, either
with or without the institution of any action or proceeding, and in addition to
all costs, disbursements and allowances provided by law. If the Trustor shall
fail to reimburse any amounts paid by the Beneficiary within ten (10) Business
Days after notice of payment thereof to the Trustor, all such amounts shall
thereafter bear interest at the default rate set forth in Section 1.8(c) of the
Credit Agreement and shall constitute Obligations hereunder and be secured
hereby.
1.20 Permitted Contests. Notwithstanding anything to the contrary
contained in this Deed of Trust, the Trustor at its expense may contest (after
prior written notice to the Beneficiary if the contested amount is in excess of
$100,000) by appropriate legal, administrative or other proceedings conducted in
good faith and with due diligence, the amount or validity or application, in
whole or in part, of any Imposition or lien therefor or any Law or the
application of any instrument of record affecting the Property or any part
thereof or any claims of mechanics, materialmen, suppliers or vendors and lien
therefor, or any utility charges and lien therefor, and may withhold payment of
the same pending such proceedings if permitted by Law; provided that (a) in the
case of any Impositions or lien therefor or any claims of mechanics,
materialmen, suppliers or vendors and lien therefor, such proceedings shall
suspend the collection therefor from the Beneficiary and the Property, (b)
neither the Property nor any part thereof or interest therein will be sold,
forfeited or lost if the Trustor pays the amount or satisfies the condition
being contested, and the Trustor would have the opportunity to do so in the
event of the Trustor's failure to prevail in the contest, (c) the Beneficiary
shall not, by virtue of such permitted contest, be in any danger of any criminal
liability, or any civil liability for which the Trustor has not furnished
security as provided in clause (d) below, and neither the Property nor any
interest therein would be subject to the imposition of any lien which would have
priority over the lien of this Deed of Trust for which the Trustor has not
furnished security as provided in clause (d) below, and (d) the Trustor shall
have established on its books in accordance with United States generally
accepted accounting principles a sufficient reserve to discharge such Imposition
or lien or claim or other security as reasonably requested by and reasonably
satisfactory to the Beneficiary if so required pursuant to clause (c) above or
if the failure to comply with such Imposition or Law will result in a lien or
charge against the Property in excess of $100,000 or the Beneficiary would be in
danger of any civil liability.
1.21 Continued Occupancy. If at anytime the then existing use or
occupancy of any part of the Property shall, pursuant to any zoning or other
law, ordinance or regulation, be permitted only so long as such use or occupancy
shall continue or so long as any portion of the Obligations
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remain unpaid, the Trustor will not cause or permit such use or occupancy to be
discontinued without the prior written consent of the Beneficiary. The Trustor
shall promptly notify the Beneficiary of any anticipated or proposed change in
the zoning for the Property or any portion thereof or any other property with
respect to which a change in zoning would materially affect the Trustor's use
and enjoyment of, the Property or any part thereof. The Beneficiary shall have
the right to participate in any judicial, administrative or other proceeding
with respect to or in any way materially affecting the use or occupancy of the
Property (including, without limitation, any proceeding relating to zoning or
environmental matters). The Trustor shall not attempt to change the zoning of
the Property or settle any dispute with respect to a change in zoning which
prohibits use of the Property as a radio transmitter facility without the
Beneficiary's prior consent.
1.22 The Credit Agreement. This Deed of Trust is made pursuant to the
Credit Agreement, and this Deed of Trust is subject to all of the provisions of
the Credit Agreement including, without limitation, the provisions of the Credit
Agreement entitling the Beneficiary, to declare the respective indebtedness
secured hereby to be immediately due and payable, as the case may be, all of
which provisions are incorporated herein with the same force and with like
effect as if they were fully set forth herein at length and made a part hereof.
In the event of a conflict between any of the provisions of the Credit
Agreement, on the one hand, and any of the provisions of this Deed of Trust, on
the other hand, the provisions of the Credit Agreement shall control.
1.23 Brokers. Each party represents and warrants to the other that it
has not dealt with any broker in connection with this transaction and that it
knows of no other Person who is entitled to a commission in connection with this
transaction. Each party hereby agrees to indemnify, defend and hold the other
harmless from and against any and all claims, liabilities, damages, demands,
costs, expenses (including, without limitation, the costs and expenses of
defending or settling any such claims and all reasonable actual attorneys' fees
and disbursements) or causes of action arising out of a breach of the
representations, warranties or agreements contained in this Section . The
representations, warranties and agreements contained in this Section shall
survive repayment of the Obligations and discharge of this Deed of Trust.
1.24 Recordation of Deed of Trust and Financing Statements. The Trustor
will execute, acknowledge and deliver any financing statements, continuation
statements and other instruments in addition or supplemental hereto, including,
without limitation, contracts, licenses and permits affecting the Property,
which may be necessary or reasonably requested by the Beneficiary from time to
time in order to perfect and maintain the validity and effectiveness of this
Deed of Trust and the lien and security thereof to the Beneficiary and in such
manner and places and within such times, in each case as is commercially
reasonable and as may be necessary or appropriate to accomplish such purposes
and to preserve and protect the rights and remedies of the Beneficiary. The
Trustor or its agents will furnish reasonably satisfactory evidence of every
such recording, filing and registration to the Beneficiary. The Trustor hereby
appoints the Beneficiary as its true and lawful attorney-in-fact to file, with
the Trustor's signature, or without the Trustor's signature in the state and
county where the Property is located and any other jurisdiction in which such
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filing may-lawfully and effectively be made without the Trustor's signature, any
and all Uniform Commercial Code financing and continuation statements which the
Beneficiary may reasonably deem necessary or appropriate to file with respect to
this Deed of Trust. The Beneficiary shall exercise its rights as attorney-in-
fact under this Section only after the Beneficiary has given the Trustor ten
(10) days' notice during which the Trustor has failed to take the action
requested by the Beneficiary.
1.25 After Acquired Property Interests. All right, title and interest
of the Trustor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Property, hereafter acquired by, or released to, the Trustor or constructed,
assembled or placed by the Trustor on the Land, and all conversions of the
security constituted thereby, immediately upon such acquisition, release,
construction, assembling, placement or conversion, as the case may be, and in
each such case, without any further mortgage, conveyance, assignment or other
act by the Trustor, shall become subject to the lien of this Deed of Trust as
fully and completely, and with the same effect, as though now owned by the
Trustor and specifically described in the granting clause hereof, but at all
times the Trustor shall execute and deliver to the Beneficiary all such other
assurances, deeds to secure debt, conveyances or assignments thereof as the
Beneficiary may reasonably require for the purpose of expressly and specifically
subjecting the same to the lien of this Deed of Trust. The Trustor hereby
irrevocably authorizes and appoints the Beneficiary the agent and
attorney-in-fact of the Trustor to execute all such documents and instruments on
behalf of the Trustor, which appointment shall be deemed to be coupled with an
interest, if the Trustor fails or refuses to do so within ten (10) days after a
request therefor by the Beneficiary.
1.26 Zoning and Title Matters. The Trustor will not, without the prior
written consent of the Beneficiary, which will not be unreasonably withheld so
long as the Property is not adversely affected, (a) initiate, join in, consent
to or support any zoning reclassification of the Property, seek any variance
under existing zoning ordinances applicable to the Property or use or permit the
use of the Property in a manner which would result in such use becoming a
nonconforming use under applicable zoning ordinances and prohibit use of the
Property as a radio transmitter facility, (b) modify, amend or supplement any of
the Permitted Encumbrances in a manner that has a material adverse effect on the
Property, (c) impose any restrictive covenants or encumbrances upon the Property
which has a material adverse effect on the Property, execute or file any
subdivision plat affecting the Property or consent to the annexation of the
Property to any municipality, or (d) permit or allow the Property to be used by
the public or any person in such manner which serves as the basis for a claim of
adverse usage or possession or of any implied dedication or easement by
prescription.
1.27 Changes to Deed of Trust or Related Loan Documents. If the
Obligations or any part thereof are extended or varied or if any part of the
security is released, all persons now or at any time hereafter liable therefor,
or whose consent to this Deed of Trust was obtained, shall be held to assent to
such extension, variation or release, and their liability and the lien and all
provisions hereof, with respect to the security or remaining security in the
case of a partial
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release, shall continue in full force. The right of recourse if any, against all
such persons being expressly reserved by the Beneficiary, notwithstanding such
extension, variation or release. Any person or entity taking a junior mortgage
or other lien upon the Property or any interest therein, shall take said lien
subject to the rights of the Beneficiary to amend, modify, and supplement,
restate and consolidate this Deed of Trust, the other Security Documents or the
Credit Documents and to impose additional fees and other charges, and to extend
the maturity of said indebtedness, and to grant partial releases of the lien of
this Deed of Trust, in each and every case without obtaining the consent of the
holder of such lien and without the lien of this Deed of Trust losing its
priority over the rights of any such junior lien. Nothing contained in this
Section shall be construed as any provision contained herein which provides,
among other things, that it shall constitute an Event of Default if the Property
be sold, conveyed, or encumbered unless permitted by the Credit Documents.
ARTICLE 2
SECURITY AGREEMENT
2.1 Creation of Security Interest. The Trustor, as debtor, hereby
irrevocably and absolutely grants to Trustee for the benefit of the Beneficiary,
as secured party, a security interest in, and lien on, all of the Trustor's
right, title and interest in and to the following property whether now owned or
hereafter acquired (collectively, the "Secured Property"):
(a) All general intangibles, contract rights, accounts and
proceeds arising from all insurance policies required to be maintained by the
Trustor hereunder;
(b) All proceeds of any judgment, award or settlement in any
condemnation or eminent domain proceeding, together with all general
intangibles, contract rights and accounts arising therefrom;
(c) All of the Equipment which constitutes personal property
and all replacements, substitutes and additions thereto and any proceeds
therefrom;
(d) All service contracts now or hereafter in effect relating
to the operation of the Property;
(e) Any other agreements now or hereafter in effect relating
to the construction, repair, alteration or leasing of the Improvements or
operation of the Property, including any distributions, damages and amounts
payable to the Trustor thereunder;
(f) All amendments, supplements, additions, substitutions,
replacements and renewals to any of the aforesaid agreements;
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(g) All permits, consents and other governmental approvals in
connection with the construction of the Improvements or the operation of the
Property, to the extent any of the same may be assigned, transferred, pledged or
subjected to a security interest;
(h) All plans and specifications, studies, tests or design
materials relating to the design, construction, repair, alteration or leasing of
this Property, to the extent any of the same may be assigned, transferred,
pledged or subjected to a security interest;
(i) All tangible personal property of the Trustor, whether now
owned or existing or hereafter acquired or arising, in which the Trustor may
have an interest and which is used or is intended to be used in the
construction, repair, alteration or leasing of the Improvements or operation of
the Property and which is of a type which may be subjected to a security
interest under the Code as defined hereinbelow;
(j) Proceeds of and any unearned premiums on any insurance
policies covering the Property or any portion thereof (including any claims or
demands of the Trustor with respect to the same), which the Trustor has or may
hereafter acquire, and any and all awards made for the taking by eminent domain
or condemnation, or by any proceeding or purchase in lieu thereof, of the whole
or any part of the Property, including, without limitation, any awards resulting
from a change of grade of streets or for severance damage;
(k) Any fixture which constitutes a part of the Property, and
all replacements, substitutions and additions thereto; and
(l) All cash and non-cash proceeds of the above-mentioned
items.
The security interests and liens described in clauses (a)
through (l) above also shall secure all of the Obligations.
Notwithstanding anything to the contrary contained herein, if any
provision of this Agreement relating to the Property and the remedies available
to the Beneficiary conflict with the provisions of the Security Agreement, the
terms of the Security Agreement shall control. It is not the intention of the
Trustor to grant a security interest in the Collateral any greater than that
granted under the Security Agreement.
2.2 Representations, Warranties and Covenants of the Trustor.
The Trustor hereby warrants, represents and covenants as follows:
(a) The Trustor's interest in the Secured Property is, and as
to all the Secured Property acquired after the date hereof, will be, free from
any lien, security interest, encumbrance or claim thereon of any kind whatsoever
(other than Permitted Encumbrances and Permitted Liens). The Trustor will notify
the Beneficiary of, and will defend the Secured Property against, all claims and
demands of all persons at any time claiming the
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Secured Property or any interest therein other than such interests as are
permitted herein or in the Credit Agreement.
(b) The Secured Property is not used or bought for personal,
family or household purposes.
(c) Subject to the terms of the Credit Agreement and the
Security Agreement, the Secured Property will be kept on or at the Property and
the Trustor will not remove any portion or item of Secured Property affixed or
attached to the Property without the prior written consent of the Beneficiary.
(d) The Trustor maintains a place of business at the address
above stated for the Trustor and the Trustor will, at least 30 days prior
thereof notify the Beneficiary in writing of any change in its place of
business.
(e) The address of the Beneficiary from which information
concerning the security interest granted hereby may be obtained is the address
of the Beneficiary set forth on the first page of this Deed of Trust, and the
mailing address of the Trustor is the address of the Trustor set forth on such
first page.
(f) The Trustor shall cause all financing and continuation
statements and other instruments with respect to the Secured Property at all
times to be kept recorded, filed or registered in such manner and in such places
as may be required by law fully to evidence, perfect, secure and preserve the
interests of the Beneficiary in the Secured Property, and shall pay all filing
fees in connection therewith. At the request of the Beneficiary, the Trustor
will join the Beneficiary in executing one or more financing statements and
renewals, continuation statements and amendments thereof pursuant to the Uniform
Commercial Code in form satisfactory to the Beneficiary, and will pay the cost
of filing the same in all public offices wherever filing is deemed by the
Beneficiary to be necessary or desirable. Without limiting the foregoing, the
Trustor hereby irrevocably appoints the Beneficiary its attorney-in-fact to
execute, deliver and file such instruments for or on behalf of the Trustor upon
the failure of the Trustor to do so within a reasonable time (but not less than
10 days) after demand, and the Trustor will pay the cost of any such filing.
(g) This Deed of Trust constitutes a Security Agreement,
Fixture Filing and Financing Statement as those terms are used in the Uniform
Commercial Code.
2.3 Survival of Security Agreement. Notwithstanding any release of any
or all of the property included in the term "Property" which is deemed "real
property," or any proceedings to foreclose this Deed of Trust or its
satisfaction of record, the terms hereof shall survive as a security agreement
with respect to the security interest created hereby and referred to above until
the repayment or satisfaction in full of the Obligations.
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2.4 Election of Remedies. If any Event of Default occurs hereunder and
is continuing, the Beneficiary, pursuant to the appropriate provisions of the
Uniform Commercial Code, shall have an option to proceed with respect to both
the real property included in the Property and the Secured Property in
accordance with its rights, powers and remedies with respect to such real
property, in which event the default provisions of the Uniform Commercial Code
shall not apply. The parties agree that if the Beneficiary shall elect to
proceed with respect to the Secured Property separately from such real property,
the Beneficiary shall have all remedies available to a secured party under the
Uniform Commercial Code and ten (10) days' notice of the sale shall be
reasonable notice. The reasonable expenses of retaking, holding, preparing for
sale, selling and the like incurred by the Beneficiary shall include, but not be
limited to, reasonable actual attorneys' fees and legal expenses incurred by the
Beneficiary.
ARTICLE 3
ASSIGNMENT OF LEASES, RENTS AND PROFITS
3.1 Assignment. To further secure the obligations, the Trustor hereby
sells, assigns and transfers unto the Beneficiary all the Rents now due and
which may hereafter become due under or by virtue of any lease, whether written
or verbal, or any letting of, or of any agreement for the use or occupancy of
the Property or any part thereof, which may have been heretofore or may be
hereafter made or agreed to or which may be made or agreed to by the Trustor or
by the Beneficiary under the powers herein granted, it being the intention
hereby to establish an absolute and present transfer and assignment of all such
leases and agreements, and all the avails thereunder, to the Beneficiary and not
merely the passing of a security interest, all in accordance with California
Civil Code Section 2938. The Trustor hereby irrevocably appoints the Beneficiary
its true and lawful attorney in its name, place and stead (with or without
taking possession of the Property as provided in section hereof) to rent, lease
or let all or any portion of the Property to any party or parties at such rental
and upon such terms as the Beneficiary shall, in its discretion, determine, and
to collect, or seek the appointment of a reviewer to collect, all of said Rents
arising from or accruing at any time hereafter, and all now due or that may
hereafter become due under each and every of the leases and agreements, written
or verbal, or other tenancy existing, or which may hereafter exist on the
Property, with the same rights and powers and subject to the same immunities,
exoneration of liability and rights of recourse and indemnity as the Beneficiary
would have upon taking possession pursuant to the provisions of Section hereof.
The Trustor represents and agrees that except with the prior written approval of
the Beneficiary, no Rent has been or will be paid by any person in possession of
any portion of the Property for more than one installment in advance and that no
payment of any of the Rents to accrue f or any portion of the Property (other
than a de minimis amount) will be waived, released, reduced, discounted or
otherwise discharged or compromised by the Trustor, except as may be approved in
writing by the Beneficiary. As between the Trustor and the Beneficiary, the
Trustor waives any rights of set-off against any person in possession of any
portion of the Property. The Trustor agrees that it will not assign any of the
Rents of the Property to any other Person.
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Nothing herein contained shall be construed as constituting the Beneficiary a
mortgagee or trustee in possession in the absence of the taking of actual
possession of the Property by the Beneficiary pursuant to Section hereof. In the
exercise of the powers herein granted to the Beneficiary, no liability shall be
asserted or enforced against the Beneficiary, all such liability being expressly
waived and released by the Trustor. The Trustor further agrees to assign and
transfer to the Beneficiary all specific future leases upon all or any part of
the Property and to execute and deliver, at the request of the Beneficiary, all
such further assurances and assignments in the Property as the Beneficiary shall
from time to time reasonably require. Although it is the intention of the
parties that the assignment contained in this Section shall be a present
absolute assignment, it is expressly understood and agreed, anything herein
contained to the contrary notwithstanding, that the Beneficiary shall not
exercise any of the rights or powers conferred upon it by this Section until an
Event of Default shall have occurred and be continuing under this Deed of Trust.
Provided the Trustor is not in default under this Deed of Trust, the Trustor
shall have a license to retain any and all Rents collected by the Trustor in
connection with the operation of the Property.
ARTICLE 4
EVENTS OF DEFAULT AND REMEDIES
4.1 Events of Default. The occurrence of any of the following specified
events shall constitute an "Event of Default" hereunder:
(a) An "Event of Default" under and as defined in the (i)
Subsidiary Guaranty, (ii) the Intercompany Acquisition Note, and (iii) the
Intercompany Demand Note and shall in any event, include, without limitation,
any payment default on any of the obligations after the expiration of any
applicable grace or cure period; or
(b) The Trustor shall default in the payment when due of any
amounts owed by it hereunder to the Beneficiary or any other Person and such
default shall continue unremedied for a period of three or more Business Days
upon receipt of notice from Beneficiary provided, however, such notice shall not
pertain to a default in payments due under the (i) Subsidiary Guaranty, (ii) the
Intercompany Acquisition Note, and (iii) the Intercompany Demand Note;
(c) Except as otherwise provided in Section and the Trustor
shall default in the due performance by it of any term, covenant or agreement
contained in this Deed of Trust, and such default shall continue unremedied for
a period of sixty (60) days after written notice to the Trustor by the
Beneficiary; provided, however, that if such default is not susceptible of
complete cure within such sixty (60) day period and the Trustor has commenced to
cure within such period, no Event of Default shall be deemed to have occurred if
the Trustor diligently and continuously prosecutes such cure to completion.
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4.2 Remedies Upon Default. If an Event of Default shall occur and be
continuing, the Beneficiary may:
(a) either in person or by agent with or without bringing any
action or proceeding, or by a receiver appointed by a court and without regard
to the adequacy of its security, enter upon and take possession of the Property
or any part thereof, in its own name or in the name of the Trustor, and do or
cause to be done any acts which it deems necessary or desirable to preserve the
value of the Property or any part thereof or interest therein, increase the
income therefrom or protect the security hereof and, with or without taking
possession of the Property, make, cancel or modify leases and sue for or
otherwise collect the Rents thereof, including those past due and unpaid, and
apply the same, less costs of operation and collection, including reasonable
attorney's fees, to the payment of the Obligations in accordance with the
Security Agreement. The entering upon and taking possession of the Property, the
collection of such Rents and the application thereof as aforesaid, shall not, by
itself, cure or waive any Event of Default or notice of default hereunder
(unless such default is actually cured) or invalidate any act done in response
to such Event of Default or pursuant to such notice of default and,
notwithstanding the continuance in possession of the Property or the collection,
receipt and application of Rents, the Beneficiary shall be entitled to exercise
every right provided for herein or in the Credit Agreement or at law or in
equity upon the occurrence of any Event of Default;
(b) commence and maintain one or more actions at law or in
equity or by any other appropriate remedy (i) to protect and enforce the
Beneficiary's rights, whether for the specific performance of any covenant or
agreement herein contained (which covenants and agreements the Trustor agrees
shall be specifically enforceable by injunctive or other appropriate equitable
remedy), (ii) to collect any sum then due hereunder, (iii) to aid the execution
of any power herein granted, or (iv) to foreclose this Deed of Trust, without
prejudice to the right of the Beneficiary thereafter to pursue and enforce any
other appropriate remedy against the Trustor;
(c) exercise any or all of the remedies available to a secured
party under the Uniform Commercial Code;
(d) accelerate payment of and declare all obligations
immediately due and payable, and may proceed at law or in equity to foreclose
fully or partially this Deed of Trust, any statute or rule of law at any time
existing to the contrary notwithstanding. The Beneficiary may, to the extent
permitted by law, adjourn from time to time any sale by it to be made under or
by virtue of this Deed of Trust by announcement at the time and place appointed
for such sale or for such adjourned sale or sales; and, except as otherwise
provided by an applicable provision of law, the Beneficiary may make such sale
at the time and place to which the same shall be so adjourned. With respect to
all components of the Property, the Beneficiary is hereby irrevocably appointed
the true and lawful attorney of the Trustor (coupled with an interest), in its
name and stead, to make all necessary conveyances/ assignments, transfers and
deliveries of the Property, and for that purpose the Beneficiary may execute all
necessary instruments of conveyance, assignment, transfer and delivery, and may
substitute one or more persons with such power, the Trustor
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hereby ratifying and confirming all that its said attorney or such substitute or
substitutes shall lawfully do by virtue hereof. Notwithstanding the foregoing,
the Trustor, if so requested by the Beneficiary, shall ratify and confirm any
such sale or sales by executing and delivering to the Beneficiary or to such
purchaser or purchasers all such instruments as may be advisable, in the
judgment of the Beneficiary, for such purpose, and as may be designated in such
request. To the extent permitted by law, any such sale or sales made under or by
virtue of this Article shall operate to divest all the estate, right, title,
interest, claim and demand whatsoever, whether at law or in equity, of the
Trustor in and to the properties and rights so sold, and shall be a perpetual
bar both at law and in equity against the Trustor and against any and all
persons claiming or who may claim the same, or any part thereof, from, through
or under the Trustor. Upon any sale made under or by virtue of this Article ,
the Beneficiary may, to the extent permitted by law, bid for and acquire the
Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Obligations secured
hereby the net sales price after deducting therefrom the expenses of the sale
and the cost of the action and any other sums which the Beneficiary is
authorized to deduct by law or under this Deed of Trust; and
(e) Upon any sale made under or by virtue of this Article
(whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale), the
Beneficiary may bid for and acquire the Property or any part thereof and in lieu
of paying cash therefor may make settlement for the purchase price by crediting
upon the obligations and other indebtedness the net sales price after deducting
therefrom the expenses of the sale and the costs of the action and any other
sums which the Beneficiary is authorized to deduct under this Deed of Trust.
4.3 Sale of Premises Pursuant to Foreclosure. In case of a sale,
judicial or nonjudicial, pursuant to a foreclosure of this Deed of Trust, the
Property, whether real, personal or mixed, may be sold for cash or credit as an
entirety or in parcels, by one sale or by several sales held at one time or at
different times, all as the Beneficiary, in its unrestricted discretion, may
elect, and the Trustor, for and on behalf of itself and all persons claiming by,
through or under the Trustor, waives any and all right to have the property and
estates comprising the Property marshalled upon any foreclosure sale. Any such
sale shall bind the Trustor, shall operate to divest all right, title and
interest whatsoever, either at law or in equity, of the Trustor in and to, the
property sold, and shall be a perpetual bar, both at law and in equity, against
the Trustor and its successors and assigns, and against any and all persons
claiming through or under the Trustor. The proceeds of any sale made under or by
virtue of this Article , together with any other sums which then may be held by
the Beneficiary under this Deed of Trust, whether under the provisions of this
Article or otherwise, shall be applied to the payment of the Obligations in
accordance with the Security Agreement.
4.4 Appointment of Receiver. If an Event of Default shall have occurred
and be continuing, the Beneficiary as a matter of strict right and without
notice to the Trustor or anyone claiming under the Trustor, and without regard
to the adequacy or the then value of the Property or the interest of the Trustor
therein or the solvency of any party bound for payment of the
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Obligations, shall have the right to apply to any court having jurisdiction to
appoint a receiver or receivers of the Property, and the Trustor hereby
irrevocably consents to such appointment and waives notice of any application
therefor. Any such receiver or receivers shall have all the usual rights, powers
and duties of receivers in like or similar cases and all the rights, powers and
duties of the Beneficiary in case of entry as provided in subparagraph 4.02(a)
hereof and shall continue as such and exercise all such powers until the date of
confirmation of sale of this Property unless such receivership is sooner
terminated.
4.5 Remedies Not Exclusive. The Beneficiary shall be entitled to
enforce payment and performance of any Obligations secured hereby and to
exercise all rights and powers under this Deed of Trust or other agreement or
any laws now or hereafter in force, notwithstanding that some or all of the said
Obligations secured hereby may now or hereafter be otherwise secured, whether by
mortgage, deed of trust, security deed, pledge, lien, assignment or otherwise.
Neither the acceptance of this Deed of Trust nor its enforcement, whether by
court action or pursuant to the powers herein contained, shall prejudice or in
any manner affect the Beneficiary's right to realize upon or enforce any other
security now or hereafter held by the Beneficiary, it being agreed that the
Beneficiary shall be entitled to enforce this Deed of Trust and any other
security now or hereafter held by the Beneficiary with respect to the
Obligations in such order and manner as it may in its absolute discretion
determine. No remedy herein conferred upon or reserved to the Beneficiary is
intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy to which the Beneficiary is entitled may be
exercised, concurrently or independently, from time to time and as often as may
be deemed expedient by the Beneficiary, and the Beneficiary may pursue
inconsistent remedies.
4.6 Waiver of Redemption, Notice, Marshalling, Etc. Notwithstanding
anything herein contained to the contrary, to the extent permitted by law, the
Trustor: (a) hereby waives trial by jury; (b) will not (i) at any time insist
upon, or plead, or in any manner whatever, claim or take any benefit or
advantage of any stay or extension or moratorium law, any exemption from
execution or sale of the Property or any part thereof, wherever enacted, now or
at any time hereafter in force, which may affect the covenants and terms of
performance of this Deed of Trust, nor (ii) claim, take or insist upon any
benefit or advantage or any law now or hereafter in force providing for the
valuation or appraisal of the Property or any part thereof, prior to any sale or
sales thereof which may be made pursuant to any provision hereof, or pursuant to
the decree, judgment or order of any court of competent jurisdiction; nor (iii)
after any such sale or sales, claim or exercise any right under any statute
heretofore or hereafter enacted to redeem the property so sold or any part
thereof; and (c) covenants not to hinder, delay or impede the execution of any
power herein granted or delegated to the Beneficiary, but to suffer and permit
the execution of every power as though no such law or laws had been made or
enacted. The Trustor, for itself and all who may claim under it, waives, to the
extent that it lawfully may, all right to have the Property marshalled upon any
foreclosure hereof. Trustor waives all rights, legal and equitable, it may now
or hereafter have to require marshalling of assets or to require
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upon foreclosure sales of assets in a particular order, including without
limitation, the rights provided by California Civil Code Sections 2899 and 3433,
as such Sections may be amended from time to time. Each successor and assign of
Trustor, including without limitation, a holder of a Lien subordinate to the
Lien created hereby (without implying that Trustor has, except as expressly
provided herein, a right to grant an interest in, or a subordinate Lien on, the
Property), by acceptance of its interest or Lien agrees that it shall be bound
by the above waiver, as if it gave the waiver itself.
4.7 Expenses of Enforcement. In connection with any action to enforce
any remedy of the Beneficiary under this Deed of Trust, the Trustor agrees to
pay all expenditures and expenses which may be paid or incurred by or on behalf
of the Beneficiary including, without limitation, reasonable actual attorneys'
fees, receiver's fees, appraiser's fees, outlays for documentary and expert
evidence, court reporter's and/or stenographer's charges, publication costs, and
costs (which may be estimated as to items to be expended after entry of the
decree) of procuring all such abstracts of title, title searches and
examinations, title insurance policies and similar data and assurances with
respect to title and value as the Beneficiary may deem reasonably necessary, and
neither the Beneficiary nor any other person shall be required to accept tender
of any portion of the indebtedness then secured hereby unless the same be
accompanied by a tender of all such expenses, costs and commissions in enforcing
its remedies hereunder. All expenditures and expenses of the nature in this
Section mentioned, and such expenses and fees as may be incurred in the
protection of the Property and the maintenance of the lien of this Deed of
Trust, including the reasonable actual fees of any attorney employed by the
Beneficiary in any litigation or proceeding, including appellate proceedings,
affecting the Beneficiary's rights under this Deed of Trust or the Property
(including, without limitation, the occupancy thereof or any construction work
performed thereon), including bankruptcy proceedings, or in preparation for the
commencement or defense of any proceeding or threatened suit or proceeding
whether or not an action is actually commenced, shall be immediately due and
payable by the Trustor, with interest thereon at the default rate set forth in
the Credit Agreement and shall be part of the indebtedness secured by this Deed
of Trust.
ARTICLE 5
ADDITIONAL COLLATERAL
5.1 Additional Collateral. (a) The Trustor acknowledges and agrees that
the Obligations are secured by the Property and various other collateral
including, without limitation, at the time of execution of this Deed of Trust
certain personal property of the Trustor and other parties described in the
Credit Documents. The Trustor specifically acknowledges and agrees that the
Property, in and of itself, if foreclosed or realized upon would not be
sufficient to satisfy the outstanding amount of the Obligations. Accordingly,
the Trustor acknowledges that it is in the Trustor's contemplation that the
other collateral pledged to secure the obligations may be pursued by the
Beneficiary in separate proceedings in the various states and counties where
such collateral
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may be located and additionally that the Trustor and other parties liable for
payment of the obligations will remain liable for any deficiency judgments above
any amounts the Beneficiary may realize on sales of other property or any other
collateral given as security for the Obligations. Specifically, and without
limitation of the foregoing, it is agreed that it is the intent of the parties
hereto that in the event of a foreclosure of this Deed of Trust, that the
Indebtedness evidencing the Obligations shall not be deemed merged into any
judgment of foreclosure, but shall rather remain outstanding.
(b) The Trustor acknowledges and agrees that the Property and
the property which may from time to time be encumbered by the Deeds of Trust are
located in more than one state and therefore the Trustor waives and relinquishes
any and all rights it may have, whether at law or equity, to require the
Beneficiary to proceed to enforce or exercise any rights, powers and remedies it
may have under the Security Documents, the Credit Documents in any particular
manner, in any particular order, or in any particular State or other
jurisdiction. Furthermore, the Trustor acknowledges and agrees that the
Beneficiary shall be allowed to enforce payment and performance of the
Obligations and to exercise all rights and powers provided under this Deed of
Trust, the other Security Documents, the Credit Documents or, any of them or
under any provision of law, by one or more proceedings, whether contemporaneous,
consecutive or both in any one or more States in which the security is located.
Neither the acceptance of this Deed of Trust, or any other Security Document, or
any Credit Document, nor its enforcement in one State, whether by court action,
power of sale, or otherwise, shall prejudice or in any way limit or preclude
enforcement of the Security Documents, the Credit Documents or any of them,
through one or more additional proceedings, in that state or in any other State.
(c) The Trustor further agrees that any particular proceeding,
including without limitation, foreclosure through court action (in a state or
federal court) or power of sale, may be brought and prosecuted in the local or
federal courts of any one or more States as to all or any part of the Property
or the property encumbered by the Deeds of Trust, wherever located, without
regard to the fact that any one or more prior or contemporaneous proceedings
have been situated elsewhere with respect to the same or any other part of the
Property and the property encumbered by the Deeds of Trust.
(d) The Beneficiary may resort to any other security held by
the Beneficiary for the payment of the Obligations in such order and manner as
the Beneficiary may elect.
(e) Notwithstanding anything contained herein to the contrary,
the Beneficiary shall be under no duty to the Trustor or others, including,
without limitation, the holder of any junior, senior or subordinate Deed of
Trust on the Property or any part thereof or on any other security held by the
Beneficiary, to exercise or exhaust all or any of the rights, powers and
remedies available to the Beneficiary.
ARTICLE 6
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MISCELLANEOUS
6.1 Governing Law. This Deed of Trust shall be governed by and
construed in accordance with the laws of the State of California. In the event
that any provision or clause of this Deed of Trust conflicts with applicable
laws, such conflicts shall not affect other provisions of this Deed of Trust
which can be given effect without the conflicting provision, and to this end the
provisions of this Deed of Trust are declared to be severable.
6.2 Limitation on Interest. It is the intent of the Trustor and the
Beneficiary in the execution of this Deed of Trust and all other instruments
evidencing or securing the Obligations to contract in strict compliance with the
relevant usury laws. In furtherance thereof, the Beneficiary and the Trustor
stipulate and agree that none of the terms and provisions contained in this Deed
of Trust shall ever be construed to create a contract for the use, forbearance
or detention of money requiring payment of interest at a rate in excess of the
maximum interest rate permitted to be charged by relevant law.
6.3 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing and
delivered by Federal Express or by any other nationally recognized overnight
courier service, registered mail, hand delivery or facsimile: if to the Trustor,
at 312 West Douglas, El Cajon, California 92020, with a copy to Gerald F.
O'Connell, Esq., Graydon, Head & Ritchey, P.O. Box 6464, Cincinnati, Ohio 45201;
if to the Beneficiary, at 227 West Monroe Street, Suite 3300, Chicago, Illinois
60606, Attn: Steve Heinen and Mark Radzik, with a copy to Randall J. Rademaker,
Esq., Skadden, Arps, Slate, Meagher & Flom, 333 West Wacker Drive, Chicago,
Illinois 60606 or at such other address as shall be designated by such party in
a written notice to the other parties hereto. All such notices and
communications shall be effective as provided in the Credit Agreement.
6.4 Captions. The captions or headings at the beginning of each Article
and Section hereof are for the convenience of the parties and are not a part of
this Deed of Trust.
6.5 Waiver; Amendment. (a) None of the terms and conditions of this
Deed of Trust may be changed, waived, modified or varied in any manner
whatsoever except in accordance with the terms of the Credit Agreement.
(b) No delay on the part of the Beneficiary in exercising any
of its rights, remedies, powers and privileges hereunder or partial or single
exercise thereof, shall constitute a waiver thereof. No notice to or demand on
the Trustor in any case shall entitle it to nay other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the Beneficiary to any other or further action in any circumstances
without notice or demand.
6.6 Obligations Absolute. The obligations of the Trustor hereunder
shall remain in full force and effect without regard to, and shall not be
impaired by, (a) any bankruptcy, insolvency,
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reorganization, arrangement, readjustment, composition, liquidation or the like
of the Trustor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Deed of Trust or any
other Credit Document; or (c) any amendment to or modification of any Credit
Document or any security for any of the Obligations; whether or not the Trustor
shall have notice or knowledge of any of the foregoing.
6.7 Further Assurances. The Trustor, at its own expense, will execute,
acknowledge and deliver all such instruments and take all such action as may be
reasonably necessary to assure to the Beneficiary the interest in the Property
herein described and the rights intended to be provided to the Beneficiary
herein.
6.8 Remedies Cumulative. Each and every right, power and remedy hereby
specifically given to the Beneficiary shall be in addition to every other right,
power and remedy specifically given under this Deed of Trust or now or hereafter
existing at law or in equity, or by statute and each and every right, power and
remedy whether specifically herein given or otherwise existing may be exercised
from time to time or simultaneously and as often and in such order as may be
deemed expedient by the Beneficiary. All such rights, powers and remedies shall
be cumulative and the exercise or the beginning of exercise of one shall not be
deemed a waiver of the right to exercise of any other or others. No delay or
omission of the Beneficiary in the exercise of any such right, power or remedy
and no renewal or extension of any of the obligations shall impair any such
right, power or remedy or shall be construed to be a waiver of any Default or
Event of Default or an acquiescence therein. In the event the Beneficiary shall
seek to enforce its rights hereunder and shall be entitled to judgment, then in
such suit the Beneficiary may recover reasonable expenses, including reasonable
actual attorneys' fees, and the amounts thereof shall be included in such
judgment.
6.9 Partial Invalidity. If any of the provisions of this Deed of Trust
or the application thereof to any person, party or circumstances shall to any
extent be invalid or unenforceable, the remainder of this Deed of Trust, or the
application of such provision or provisions to persons, parties or circumstances
other than those as to whom or which it is held invalid or unenforceable, shall
not be affected thereby, and every provision of this Deed of Trust shall be
valid and enforceable to the fullest extent permitted by law.
6.10 Priority. This Deed of Trust is intended to and shall be valid and
have priority over all subsequent liens and encumbrances on the Property,
including statutory liens, excepting solely taxes and assessments levied on the
real estate, to the extent of the maximum amount secured hereby.
6.11 Trustor's Liability. It is understood that the Trustor shall
remain liable to the extent of any deficiency between the amount of the proceeds
and the amount of the sums referred to in Section with respect to the Trustor.
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6.12 Full Recourse. This Deed of Trust is made with full recourse to
the Trustor (including as to all assets of the Trustor, including the Secured
Property) and pursuant to and upon the representations, warranties, covenants
and the agreements on the part of the Trustor contained herein, in the other
Credit Documents and otherwise in writing in connection herewith or therewith.
Notwithstanding the foregoing, Beneficiary agrees that (a) in an action to
collect any amounts due under, or otherwise in respect of, this Deed of Trust,
no partner, shareholder, director or officer of the Trustor will be personally
liable for any amounts due or any other liability under this Deed of Trust, and
no deficiency or personal judgment will be sought against such partner,
shareholder, director or officer for payment of the Indebtedness secured by this
Deed of Trust and (b) no property or assets of any such partner, shareholder,
director or officer shall be sold, levied upon or otherwise used to satisfy any
judgment rendered in connection with any action brought with respect to this
Deed of Trust, provided, however, that in no event shall the foregoing
provisions of this sentence be deemed to release any such partner, shareholder,
director or officer from liability under this Deed of Trust for any fraudulent
action taken by such partner, shareholder, director or officer or for any
intentional material misrepresentation made by such partner, shareholder,
director or officer.
6.13 Acknowledgment of Receipt. The Trustor hereby acknowledges receipt
of a true copy of this Deed of Trust.
6.14 Release Upon Full Payment. Upon the date that all of the
obligations have been paid, this Deed of Trust shall be released of record and
the Beneficiary, at the request and expense of the Trustor, will execute and
deliver to the Trustor a proper instrument or instruments acknowledging the
satisfaction and termination of this Deed of Trust.
6.15 Time of the Essence. Time is of the essence of this Deed of Trust.
6.16 Leases. Any foreclosure of this Deed of Trust and any other
transfer of all or any part of the Property in extinguishment of all or any part
of the Obligations may, at the Beneficiary's option, be subject to any or all
leases of all or any part of the Property and the rights of tenants under such
leases. No failure to make any such tenant a defendant in any foreclosure
proceedings or to foreclose or otherwise terminate any such lease and the rights
of any such tenant in connection with any such foreclosure or transfer shall be,
or be asserted to be, a defense or hindrance to any such foreclosure or transfer
or to any proceedings seeking collection of all or any part of the Obligations
(including, without limitation, any deficiency remaining unpaid after completion
of any such foreclosure or transfer).
6.17 Suits to Protect Property. The Beneficiary is hereby irrevocably
authorized, at the Beneficiary's option, upon 30 days notice to the Trustor with
respect to items (a) and (d) and (e) of this Section to initiate and maintain
any and all suits and proceedings that the Beneficiary may deem advisable, at
the Trustor's expense (a) to prevent any impairment of the Property or of the
security of this Deed of Trust by any unlawful acts or omissions, (b) to prevent
the occurrence or continuance of any violation of this Deed of Trust, any other
Security Document
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or any Credit Document, (c) to foreclose this Deed of Trust, (d) to preserve and
protect the Beneficiary's interest in the Property, and (e) to restrain the
enforcement of, or compliance with, any law, ordinance, rule, regulation, order,
judgment, injunction or decree that may be unconstitutional or otherwise
invalid, if, and only to the extent, such enforcement or compliance might (in
the Beneficiary's reasonable judgment) impair the Property or the security of
this Secured Deed or be prejudicial to the interests of the Beneficiary.
6.18 Rules of Usage. The following rules of usage shall apply to this
Deed of Trust unless otherwise required by the context:
(a) Singular words shall connote the plural as well as the
singular, and vice versa, as may be appropriate.
(b) Unless otherwise indicated, references in any such
document to appendices, articles, schedules, sections or exhibits are references
to appendices, articles, schedules, sections or exhibits of such document.
(c) The words "herein," "hereof" and "hereunder" and words of
similar import appearing in each such document shall be construed to refer to
such document as a whole and not to any particular section, paragraph or other
subpart thereof unless expressly so stated.
(d) Any headings, subheadings or table of contents used in any
such document are solely for convenience of reference and shall not constitute a
part of such document nor shall they affect their meaning,construction or
effect.
(e) References to any person shall include such person and its
successors and permitted assigns.
(f) Each of the parties to this Deed of Trust and their
counsel have reviewed and revised, or requested revisions to, such documents,
and the usual rule of construction that any ambiguities are to be resolved
against the drafting party shall be inapplicable in the construction and
interpretation of such documents and any amendments or exhibits thereto.
(g) Unless an express provision requires otherwise, each
reference to "the Property" shall be deemed a reference to "the Property or any
part thereof," each reference to "Secured Property" shall be deemed a reference
to "the Secured Property or any part thereof" and each reference to "the
Property" shall be deemed a reference to "the Property or any part thereof."
6.19 Additional Advances. This Deed of Trust is given to secure the
Trustor's obligations under the (i) Subsidiary Guaranty, (ii) the Intercompany
Acquisition Note and, (iii) the Intercompany Demand Note and shall secure not
only guaranteed obligations with respect to presently existing indebtedness
under the Credit Agreement but also any and all other indebtedness now owing or
which may hereafter be owing by the Borrower to the Beneficiary, however
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incurred, whether interest, discount or otherwise, and whether the same shall be
deferred, accrued or capitalized (but only at the option of the Beneficiary),
including future advances and readvances, pursuant to the Credit Agreement,
whether such advances are obligatory or to be made at the option of the
Beneficiary, or otherwise, to the same extent as if such future advances were
made on the date of the execution of this Deed of Trust. The lien of this Deed
of Trust shall be valid as to all indebtedness secured hereby, including future
advances, from the time of its filing for record in the recorder's office of the
county in which the Property is located. The total principal amount of
indebtedness secured hereby may increase or decrease from time to time, but the
total unpaid balance of indebtedness secured hereby at any one time outstanding
shall not exceed $300,000,000 plus interest thereon, attorneys' fees, court
costs and any disbursements which the Beneficiary may make under this Deed of
Trust, the Credit Agreement or any other document with respect hereto (e.g., for
payment of Impositions or insurance on the Property) and interest on such
disbursements (all such indebtedness being hereinafter referred to as the
"maximum amount secured hereby") . This Deed of Trust is intended to and shall
be valid and have priority over all subsequent liens and encumbrances, including
statutory liens, excepting solely taxes and assessments levied on the real
estate, to the extent of the maximum amount secured hereby.
6.20 Beneficiary's Powers. Without affecting the liability of any other
Person liable for the payment of any obligation herein mentioned, and without
affecting the Lien or charge of this Deed of Trust upon any portion of the
Property not then or theretofore released as security for the Obligations,
Beneficiary may, from time to time and without notice: (a) release any Person so
liable; (b) extend the maturity or alter any of the terms of any such
obligation; (c) grant other indulgences; (d) release or cause to be released at
any time at Beneficiary's option any parcel, portion or all of the Property; (e)
take or release any other or additional security for any obligation herein
mentioned; (f) while an Event of Default is continuing, make compositions or
other arrangements with debtors or other mortgagors in relation to this Deed of
Trust; (g) advance additional funds to protect the security hereof; (h) while an
Event of Default is continuing, pay or discharge any or all of the Obligations;
(i) consent in writing to the making of any map or plat thereof; (j) join in
granting any easement thereon; or (k) join in any extension agreement or any
agreement subordinating the Lien or charge hereof; and, in any case referred to
in clauses (g) or (h), all amounts so advanced, with interest thereon at the
rate set forth in the Credit Agreement from the date of demand until paid, shall
be secured hereby.
ARTICLE 7
CONCERNING THE TRUSTEE
7.1 Covenants of the Trustee. The Trustee, by its acceptance hereof,
covenants faithfully to perform and fulfill the trusts herein created, being
liable, however, only for willful negligence or misconduct, and hereby waives
any statutory fee and agrees to accept reasonable compensation, in lieu thereof,
for any services rendered by it in accordance with the terms hereof.
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It shall not be the Trustee's duty to see to any recording, filing or
registration of this Deed of Trust or any other instrument in addition or
supplemental thereto or to give notice thereof, or to see to the payment of, or
be under any duty regarding any Imposition, or to see to the performance or
observance by the Trustor of any of the covenants and agreements contained
herein. The Trustee shall not be responsible for the execution, acknowledgement,
or validity of this Deed of Trust or of any instrument in addition or
supplemental hereto or for the insufficiency of the security purported to be
created hereby and makes no representation in respect thereof or regarding the
rights of the Beneficiary. The Trustee may advise with counsel upon any matters
arising hereunder and shall be fully protected in relying as to the legal
matters or on the advice of counsel. The Trustee shall not incur any personal
liability hereunder except for his own willful misconduct, and the Trustee may
rely on any instrument, document, or signature authorizing or supporting any
action taken or proposed to be taken by him hereunder, believed by him in good
faith to be genuine.
7.2 Resignation; Removal of the Trustee. The Trustee may resign at any
time without notice. In the event of the resignation or death or dissolution of
the Trustee, or the Trustee's failure, refusal or inability, for any reason, to
make any sale or to perform any of the trusts herein declared, or, at the option
of the Beneficiary, without cause, the Beneficiary may appoint a substitute
trustee, who shall thereupon succeed to all the estates, titles, rights, powers,
and trusts herein granted to and vested in the Trustee. The instrument of
appointment may, but shall not be required to, be recorded in the registrar's
office in which this Deed of Trust is recorded. If the Beneficiary is a
corporation, such appointment may be made on behalf of such the Beneficiary by
any person who is then the president, or a vice-president, assistant
vice-president, treasurer, cashier, secretary, or any other authorized officer
or agent of the Beneficiary. In the event of the registration or death of any
substitute trustee, or such substitute trustee's failure, refusal or inability
to make any such sale or perform such trusts, or, at the option of the
Beneficiary, without cause, successive substitute trustees may thereafter, from
time to time, be appointed in the same manner.
7.3 Actions by Trustee. At any time, or from time to time, without
liability therefor and without notice, upon written request of Beneficiary and
presentation of this Deed of Trust, and without affecting the personal liability
of any Person for payment of the Obligations secured hereby or the effect of
this Deed of Trust upon the remainder of the Property, Trustee may (a) reconvey
any part of the Property; (b) consent in writing to the making of any map or
plat thereof; (c) join in granting any easement thereon; or (iv) join in any
extension agreement or any agreement subordinating the Lien or charge hereof.
ARTICLE 8
FIXTURE FILING
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This Deed of Trust shall be effective as a financing statement filed as
a fixture filing with respect to all fixtures included in the Property and is to
be filed and recorded in, among other places, the real estate records of the
county where the Real Property is located as set forth on Exhibit A.
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IN WITNESS WHEREOF, the Trustor has caused this Deed of Trust to be
duly executed and sealed as of the day and year first above written.
CHESAPEAKE SECURITIES, INC.
a Delaware corporation
By: ________________________________
Its: ________________________________
STATE OF ___________ )
) ss.
COUNTY OF __________ )
On ____________________, 19____, before me, ____________________
personally appeared ____________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed
the instrument.
WITNESS my hand and official seal.
___________________________
Prepared by:
Alexandra V. Bergstein, Esq.
Skadden Arps Slate Meagher & Flom
333 West Wacker Drive, Suite 2100
Chicago, Illinois 60606
<PAGE> 36
EXHIBIT A
THAT PART OF THOSE PORTIONS OF PUEBLO LOT 272 OF THE PUEBLO LANDS OF THE CITY OF
SAN DIEGO, ACCORDING TO MAP THEREOF MADE BY JAMES PASCOE, IN MAY 1870, FILED IN
THE OFFICE OF THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER
14, 1921 AND KNOWN AS MISCELLANEOUS MAP NO. 36, AS CONVEYED TO THE STATE OF
CALIFORNIA BY DEEDS RECORDED DECEMBER 13, 1956 AS FILE NO. 176524, IN BOOK 6381,
PAGE 176 OF OFFICIAL RECORDS AND SEPTEMBER 11, 1951 IN BOOK 4228, PAGE 168 OF
OFFICIAL RECORDS, BOTH DEEDS ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, LYING EASTERLY OF THE FOLLOWING DESCRIBED LINE:
BEGINNING AT A POINT ON THE SOUTHEASTERLY LINE OF SAID PUEBLO LOT 272, DISTANT
ALONG SAID SOUTHEASTERLY LINE, SOUTH 36o 36' 30" WEST, 200.62 FEET FROM THE
INTERSECTION OF SAID SOUTHEASTERLY LINE WITH THE WESTERLY LINE OF THE RIGHT OF
WAY OF THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, AS SAID INTERSECTION
IS DESCRIBED IN SAID FILE NO. 176254; THENCE ALONG THE FOLLOWING NUMBERED
COURSES:
1. LEAVING SAID SOUTHEASTERLY LINE, NORTHERLY ALONG A CURVE, CONCAVE TO
THE EAST WITH A RADIUS OF 203.00 FEET THROUGH AN ANGLE OF 41o 39' 45",
A DISTANCE OF 147.61 FEET TO A POINT OF REVERSE CURVATURE.
2. NORTHERLY ALONG A CURVE, CONCAVE TO THE WEST WITH A RADIUS OF
272.00 FEET THROUGH AN ANGLE OF 58o 18' 13", A DISTANCE OF 276.78
FEET TO A POINT OF REVERSE CURVATURE.
3. NORTHERLY ALONG A CURVE CONCAVE TO THE EAST WITH A RADIUS OF 228.00
FEET THROUGH AN ANGLE OF 00o 37' 00", A DISTANCE OF 2.45 FEET.
4. NORTH 72o 56' 50" EAST 4.93 FEET.
5. NORTHERLY ALONG A CURVE CONCAVE TO THE NORTHEAST WITH A
RADIUS OF 174.20 FEET THROUGH AN ANGLE OF 26o 11' 49", A DISTANCE
OF 79.64 FEET.
6. NORTH 17o 03' 10" WEST, 348.51 FEET TO THE SOUTHEASTERLY TERMINUS
OF THAT COURSE SHOWN AS NORTH 17o 03' 10" WEST, 318.48 FEET IN
PARCEL 1 OF RELINQUISHMENT NO. 14748 ON SHEET 2 OF STATE HIGHWAY
MAP NO. 78, RECORDED JUNE 27, 1967 AS FILE NO. 79009 OF OFFICIAL
<PAGE> 37
RECORDS, ON FILE IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY.
A-2
<PAGE> 1
SECOND CONSOLIDATED AMENDED AND RESTATED
INTERCOMPANY DEMAND NOTE
February 20, 1996
FOR VALUE RECEIVED, the undersigned, an Ohio corporation (the
"Borrower"), promises to pay to the order of JACOR COMMUNICATIONS, INC., an
Ohio corporation (the "Company"), at the Company's offices at 1300 PNC Center,
Cincinnati, Ohio 45202, or such other address as the holder hereof shall have
designated to the Borrower, on demand, any and all amounts as may from time to
time be owing by the Borrower to the Company (including, without limitation,
any and all amounts as may be owing by the Borrower to the Company on the date
hereof pursuant to the Original Intercompany Demand Notes (as defined below)
which this Second Consolidated Amended and Restated Intercompany Demand Note
consolidates, amends and restates, but excluding amounts owing solely pursuant
to any and all Intercompany Acquisition Demand Notes executed by the Borrower),
together with interest on the unpaid principal amount hereof at a rate per
annum equal to the Base Rate (to be computed on the basis of a 360-day year).
Capitalized terms used herein but not defined shall have the meanings
assigned to such terms in the Credit Agreement (as hereinafter defined).
The Company shall, and is hereby authorized to, record on a schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each principal and interest payment hereunder. All
payments of principal and interest on this Second Consolidated Amended and
Restated Intercompany Demand Note shall be payable in lawful currency of the
United States of America, in immediately available funds.
This Second Consolidated Amended and Restated Intercompany Demand Note
is issued as a replacement for each of the intercompany demand notes, dated
January 11, 1993 which were consolidated, amended and restated
<PAGE> 2
in that certain Consolidated Amended and Restated Intercompany Demand Note
dated March 11, 1993 (collectively, the "Original Intercompany Demand Notes"),
made by Borrower, and this Second Consolidated Amended and Restated
Intercompany Demand Note is a continuation, restatement and extension of each
of such Original Intercompany Demand Note.
This Second Consolidated Amended and Restated Intercompany Demand Note
is one of the Intercompany Demand Notes referred to in that certain Credit
Agreement, dated as of February 20, 1996 (together with all amendments,
modifications, restatements and supplements from time to time thereto, the
"Credit Agreement"), among the Company, the banks identified therein (the
"Banks"), the Co-Agents (as defined therein) and Banque Paribas, as agent (the
"Agent"), to which Credit Agreement reference is hereby made for a statement of
terms and provisions and for a description of the Company Pledge Agreement,
dated as of February 20, 1996, pursuant to which this Second Consolidated
Amended and Restated Intercompany Demand Note has been pledged to the Agent for
the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers as security for the Obligations. Payment of this
Second Consolidated Amended and Restated Intercompany Demand Note is secured by
that certain Second Amended and Restated Intercompany Security Agreement and
Financing Statement, dated as of February 20, 1996 (as the same may be amended
and modified in effect from time to time, the "Intercompany Security
Agreement"), among the Borrower, the other Grantors named therein and the
Company, and reference is hereby made to the Intercompany Security Agreement
for a description of the properties mortgaged, pledged and assigned, the nature
and extent of the collateral and the rights of the parties to the Intercompany
Security Agreement in respect of such collateral.
In addition to and not in limitation of the foregoing and the
provisions of the Credit Agreement, the undersigned further agrees, subject
only to any limitation imposed by applicable law, to pay all expenses,
including reasonable attorneys' fees and legal expenses, incurred by the holder
of this Second
2
<PAGE> 3
Consolidated Amended and Restated Intercompany Demand Note in endeavoring to
collect any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
No delay on the part of the Company or any other holder of this Second
Consolidated Amended and Restated Intercompany Demand Note in the exercise of
any right, power or remedy shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or remedy preclude other or
further exercise thereof, or the exercise of any other right, power or remedy.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Second Consolidated Amended and Restated Intercompany Demand
Note shall in any event be effective unless the same shall be in writing and
signed and delivered by the Company or any other holder hereof.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest, notice of dishonor
and notice of the existence, creation or nonpayment of all or any of the loans
or advances evidenced hereby.
THIS SECOND CONSOLIDATED AMENDED AND RESTATED INTERCOMPANY DEMAND NOTE
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF
CONFLICTS) OF THE STATE OF ILLINOIS.
Address: JACOR BROADCASTING CORPORATION
an Ohio corporation
1300 PNC Center By: /s/ R. Christopher Weber
201 East Fifth Street ------------------------
Cincinnati, Ohio 45202 Its: SVP
------------------------
Pay to the order of
--------------------------
JACOR COMMUNICATIONS, INC.
By: /s/ R. Christopher Weber
------------------------
Its: SVP & CFO
------------------------
By: /s/ Jon M. Berry
------------------------
Its: SVP & Treasurer
------------------------
3
<PAGE> 1
SECOND AMENDED AND RESTATED INTERCOMPANY SECURITY
AGREEMENT AND FINANCING STATEMENT
DATED AS OF
FEBRUARY ___, 1996
THIS SECOND AMENDED AND RESTATED INTERCOMPANY SECURITY AGREEMENT
AND FINANCING STATEMENT, dated as of February ___, 1996 (the "Intercompany
Agreement"), is made by each of the parties listed on the signature pages hereof
(each a "Grantor" and collectively the "Grantors"), each a subsidiary of Jacor
Communications, Inc., an Ohio corporation (the "Company"), in favor of the
Company.
W I T N E S S E T H:
WHEREAS, the Company is entering into that certain Credit
Agreement, dated as of the date hereof, among the Company, the Banks (as defined
therein), the Co-Agents (as defined therein) and Banque Paribas, as agent (the
"Agent") for itself, the Co-Agents and the Banks (as modified, supplemented,
amended, extended, supplanted or restated from time to time, the "Credit
Agreement");
WHEREAS, the Credit Agreement requires the Company to enter into
certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Providers (as defined in the Credit Agreement);
WHEREAS, each of the Grantors is a wholly-owned direct or indirect
Subsidiary of the Company; and
<PAGE> 2
WHEREAS, it is a condition precedent to the availability of credit
under the Credit Agreement that each of the undersigned Grantors execute and
deliver this Intercompany Agreement, which amends and restates that certain
Amended and Restated Intercompany Security Agreement and Financing Statement
dated as of March 5, 1993 among the parties hereto, securing each Grantor's
payment and performance of the indebtedness of each such Grantor which
indebtedness is evidenced by the Intercompany Demand Note executed by each such
Grantor;
NOW, THEREFORE, in consideration of the foregoing and of the
direct and indirect benefits to be received by the Grantors and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS.
As used in this Security Agreement:
"Accounts" means "accounts" as defined in Section 9-106 of the
UCC.
"Chattel Paper" means "chattel paper" as defined in Section 9-105
of the UCC.
"Collateral" means all tangible and intangible property, wherever
located, whether now owned or hereafter existing, in which the Grantors (or any
of them) now has or hereafter acquires any right or interest, and the Proceeds
(including insurance proceeds), products, substitutions and replacements thereof
and additions and accessions thereto and all cash and cash equivalents, bank
accounts, special collateral accounts, and all books and records, customer
lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto, including, without limita-
2
<PAGE> 3
tion, the following property: all Accounts, Chattel Paper, Deposit Accounts,
Documents, Equipment, Fixtures, General Intangibles, Instruments, Inventory,
Stock Rights and Proceeds, products, substitutions, replacements, additions and
accessions thereto or thereof; provided, however, that Collateral shall not
include licenses and permits issued by the FCC to the extent it is unlawful to
grant a security interest in any such license or permit or to the extent that
the grant of any such security interest in any such license or permit would
result in the forfeiture of any such license or permit or a default under any
such license or permit.
"Deposit Accounts" means "deposit accounts" as defined in Section
9-105 of the UCC.
"Documents" means "documents" as defined in Section 9-105 of the
UCC.
"Equipment" means "equipment" as defined in Section 9-109(2) of
the UCC.
"Fixtures" means "fixtures" as defined in Section 9-313 of the
UCC.
"General Intangibles" means "general intangibles" as defined in
Section 9-106 of the UCC, including, without limitation, all contract rights,
rights to receive payments of money, chooses in action, judgments, tax refunds
and tax refund claims, patents, trademarks, trade names, copyrights, licenses
(including, without limitation, those issued by the FCC except to the extent
that it is unlawful to grant a security interest in any such license or that the
grant of any such security interest therein would result in a default under any
such license), franchises, leasehold interests in real or personal property,
rights to receive rentals of real or personal property, and guarantee claims.
3
<PAGE> 4
"Instruments" means "instruments" as defined in Section 9-105 of
the UCC, including, without limitation, all checks, drafts, notes, bonds,
debentures, government securities, certificates of deposit, letters of credit,
preferred and common stocks, options and warrants.
"Inventory" means "inventory" as defined in Section 9-109 of the
UCC, including, without limitation, all inventory, raw materials, work in
process, finished goods, returned or repossessed goods, goods held for sale or
lease or furnished or to be furnished under contracts of service and goods
released to a Grantor or to third parties under trust receipts or similar
documents.
"Proceeds" means "proceeds" as defined in Section 9-306 of the
UCC.
"Receivables" means the Accounts, Chattel Paper, Documents,
General Intangibles and Instruments.
"Section" means a numbered section of this Intercompany Agreement,
unless another document is specifically referenced.
"Secured Obligations" means, as to each Grantor, all obligations
of such Grantor under the Intercompany Demand Note executed by such Grantor,
including, without limitation, all unpaid principal of, accrued and unpaid
interest on, and all other amounts owing under, such Intercompany Demand Note
(including all such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the Federal Bankruptcy Code, 11 U.S.C.
ss. 362(a), and the operation of Sections 502(b) and 506(b) of the Federal
Bankruptcy Code, 11 U.S.C. Sections 502(b) and Sections 506(b)) and all
obligations of such Grantor under each Intercompany Acquisition Demand Note
executed by such Grantor, including, without limitation, all unpaid principal
of, accrued and unpaid interest on, and all other amounts owing under any and
4
<PAGE> 5
all such Intercompany Acquisition Notes (including all such amounts which would
become due but for the operation of the automatic stay under Section 362(a) of
the Federal Bankruptcy Code, 11 U.S.C. Sections 362(a), and the operation of
Sections 502(b) and 506(b) of the Federal Bankruptcy Code, 11 U.S.C. Sections
502(b) and ss. 506(b)).
"Stock Rights" means any stock, any dividend or other distribution
and any other right or property which a Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any shares of stock constituting Collateral and any
stock, any right to receive stock and any right to receive earnings, in which a
Grantor now has or hereafter acquires any right.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the State of Illinois.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Capitalized terms used herein
but not defined herein shall have the meanings ascribed to such terms in the
Credit Agreement.
2. GRANT OF SECURITY INTEREST.
As collateral security for the full and complete payment and
performance of the Secured Obligations when due, each Grantor hereby pledges and
grants to the Company a continuing lien and security interest in the Collateral.
Each of the Grantors further agrees that since, concurrently with
its execution and delivery of this Intercompany Agreement, the Company will
pledge, pursuant to certain other Collateral Documents, all of its rights
hereunder (and will deliver all Collateral delivered to the Company hereunder)
to the Agent, for the benefit of
5
<PAGE> 6
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers, the Agent may, until the final payment in full of all of the
Obligations and the termination of the Credit Agreement, exercise directly
without any further consent or other action by any Person as a condition to such
exercise all of the rights granted to the Company or the Agent herein. Upon the
final payment in full of all of the Obligations to the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers and the termination of
all Commitments, all of the rights granted to the Agent shall be exercisable by
the Company.
3. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants to the Company that:
3.1 Existence and Standing. Such Grantor is duly incorporated,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
3.2 Authorization, Validity and Enforceability. The execution and
delivery by such Grantor of each of this Intercompany Agreement and the
Intercompany Demand Note which such Grantor is a party to has been duly
authorized by proper corporate proceedings, and each of this Intercompany
Agreement and the Intercompany Demand Note which such Grantor is a party to
constitutes a legal, valid and binding obligation of such Grantor and this
Intercompany Agreement creates a security interest which is enforceable against
such Grantor in accordance with its terms in respect of all now owned and
hereafter acquired Collateral pledged by such Grantor, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
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<PAGE> 7
3.3 Conflicting Laws and Contracts. Except as provided in Section
5.3 of the Credit Agreement, neither the execution and delivery by such Grantor
of this Intercompany Agreement or the Intercompany Demand Note which such
Grantor is a party to, nor the creation and perfection of the security interest
in the Collateral granted by such Grantor hereunder, nor compliance with the
provisions hereof will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on such Grantor or such Grantor's
certificate of incorporation or by-laws or the provisions of any indenture,
instrument or agreement to which such Grantor is a party or is subject, or by
which it, or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on the
property of such Grantor pursuant to the terms of any such indenture, instrument
or agreement, except any violation or default which would not have a material
adverse effect on the business, financial condition or operations of such
Grantor. No order, consent, approval, license, authorization, or validation of,
or filing, recording or registration with, or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with the execution, delivery and performance of, or
the legality, validity, binding effect or enforceability of, this Intercompany
Agreement or the Intercompany Demand Note which such Grantor is a party to or
the grant of the security interest in the Collateral pursuant hereto, other than
the filing, within the period established by applicable law, of this
Intercompany Agreement with the FCC and except as otherwise provided in Section
5.3 of the Credit Agreement.
3.4 Principal Location. Such Grantor's mailing address and the
location of its chief executive office and the books and records relating to the
Receivables pledged by such Grantor are disclosed in Exhibit
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<PAGE> 8
"A" hereto; such Grantor has no other places of business except those set forth
in Exhibit "A" hereto.
3.5 Property Locations. The Inventory and Equipment and Fixtures
pledged by such Grantor are located solely at the locations described in Exhibit
"A" hereto and have not, within the four months preceding the date of this
Intercompany Agreement, been located at any other locations. None of said
locations are leased by such Grantor as lessee except those designated in Part B
of Exhibit "A" hereto.
3.6 No Other Names. Except as set forth on Exhibit "A" hereto,
such Grantor has not conducted business under any name except the name in which
it has executed this Intercompany Agreement.
3.7 No Default. No Default, Unmatured Default or L/C Default
exists.
3.8 Receivables. The names of the obligors, amounts owing, due
dates and other information with respect to the Receivables pledged by such
Grantor are and will be correctly stated in all material respects in all records
of such Grantor relating thereto and in all invoices and reports with respect
thereto furnished to the Company by such Grantor from time to time upon a
request therefor.
3.9 Filing Requirements. None of the Equipment pledged by such
Grantor (other than vehicles) is covered by any certificate of title. No
security interests or liens have been filed in respect of any of the Collateral
under any federal statute (other than filings with the United States Patent and
Trademark Office with respect to federally registered patents and trademarks).
The legal description and street address of those properties designated by the
Company on which any Fixtures pledged by such Grantor are located are set forth
in
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<PAGE> 9
Exhibit "B" hereto together with the name and address of the record owner of
each such property. Upon (a) filing financing statements naming each Grantor as
"debtor" and the Company as "secured party" and describing the Collateral in the
filing offices set forth for each such Grantor on Exhibit "E" hereto and (b) the
Instruments listed on Exhibit D which constitute Collateral having been
delivered to the Company, the security interests in the Collateral (other than
(i) motor vehicles, (ii) assets of Georgia Network Equipment, Inc., (iii)
Deposit Accounts, (iv) federally registered patents and trademarks to the extent
a filing with the United States Patent and Trademark Office is required to
perfect a security interest therein, (v) fixtures on real property owned or
leased by the Company or any Subsidiary which is not subject to a Mortgage and
(vi) the promissory notes listed in Section 6.15(f)(iii) and (iv) of the Credit
Agreement) granted to the Company hereunder will constitute perfected security
interests therein superior and prior to all Liens (other than Liens permitted by
Section 6.17 of the Credit Agreement).
3.10 No Financing Statements. No financing statement describing
all or any portion of the Collateral pledged by such Grantor which has not
lapsed or been terminated naming such Grantor as debtor has been filed in any
jurisdiction except financing statements (a) naming the Company or the Agent as
secured party, (b) covering Liens permitted by Section 6.17 of the Credit
Agreement and (c) as described in Exhibit "C" hereto.
3.11 Pledged Securities. Exhibit "D" hereto sets forth a complete
and accurate list of the Instruments, if any, delivered by such Grantor to the
Company. Such Grantor is the direct and beneficial owner of each share of stock,
if any, listed in Exhibit "D" annexed hereto as being owned by it. Such Grantor
further represents and warrants that all of such shares of stock have been duly
and validly issued, are fully paid and non-
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<PAGE> 10
assessable and are owned by such Grantor free and clear of any Liens, except for
the security interest granted to the Company hereunder and Liens permitted by
Section 6.17 of the Credit Agreement.
4. COVENANTS.
From the date of this Intercompany Agreement, and thereafter until
this Intercompany Agreement is terminated:
4.1 General.
4.1.1 Inspection. Each Grantor will permit the Company, by
its representatives and agents, to inspect the Collateral pledged by such
Grantor, to examine and make copies (other than records subject to third-party
confidentiality arrangements or confidential information relating to such
Grantor's relationship with third parties) of the records of such Grantor
relating thereto, and to discuss such Collateral and the records of such Grantor
with respect thereto with, and to be advised as to the same by, such Grantor's
officers and employees and, after the occurrence and during the continuance of
any Default, Unmatured Default or L/C Default, with any person or entity which
is or may be obligated on any Receivable pledged by such Grantor, all at such
reasonable times and intervals as the Company may determine, all at such
Grantor's expense.
4.1.2 Taxes. Each Grantor will pay, before they become
delinquent, all taxes, assessments and governmental charges and levies upon the
Collateral, except those which are being contested in good faith by appropriate
proceedings and with respect to which no Lien exists other than Liens permitted
by Section 6.17 of the Credit Agreement.
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<PAGE> 11
4.1.3 Records and Reports. Each Grantor will maintain
complete and accurate books and records with respect to the Collateral pledged
by such Grantor, and furnish to the Company, such reports relating to such
Collateral as the Company shall from time to time reasonably request.
4.1.4 Notice of Default. Each Grantor will give prompt
notice in writing to the Company of the occurrence of any Default, Unmatured
Default or L/C Default and of any other development (other than the issuance or
adoption of any new federal, state or local statute, regulation or ordinance or
any other development affecting the broadcasting industry generally), financial
or otherwise, which is reasonably likely to materially adversely affect a
substantial portion of the Collateral or the ability of such Grantor to pay or
perform its obligations hereunder or under the Intercompany Demand Note to which
it is a party.
4.1.5 Financing Statements and Other Actions. Each Grantor
will deliver to the Company copies of any and all financing statements and other
documents (and, if so requested by the Company, use its best efforts to obtain
landlord waivers) and take such further actions from time to time reasonably
requested by the Company in order to establish and maintain a first (subject to
the Subsidiary Security Agreement and any Subsidiary Pledge Agreement) perfected
security interest in the Collateral pledged by such Grantor or to otherwise
obtain the full benefits of this Intercompany Agreement. In addition, without
limiting the generality of the foregoing each Grantor will
(a) mark conspicuously each and every writing which
individually or which when taken with one or more other writings constitutes
Chattel Paper included in the Collateral with a legend, in form and substance
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<PAGE> 12
satisfactory to the Agent, indicating the interest of the Agent therein;
(b) after the occurrence and during the continuance of a
Default or a L/C Default, mark conspicuously each document included in the
Receivables and, at the request of the Company, each of its records pertaining
to the Collateral with a legend, in form and substance satisfactory to the
Company, indicating that such document or Collateral is subject to the security
interest granted hereby; and
(c) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Company may request, in order to perfect
and preserve the security interests and other rights granted or purported to be
granted to the Company hereby.
4.1.6 Disposition of Collateral. No Grantor will sell,
lease or otherwise dispose of the Collateral, except as permitted by Section
6.13 of the Credit Agreement.
4.1.7 Liens. No Grantor will create, incur, or suffer to
exist any Lien except the security interest created by this Intercompany
Agreement and Liens permitted by Section 6.17 of the Credit Agreement. Each
Grantor agrees to warrant and defend title to and ownership of the Collateral
pledged by such Grantor and the lien created by this Intercompany Agreement
against the claims of all Persons and maintain and preserve such lien at all
times during the term of this Intercompany Agreement.
4.1.8 Change in Location or Name. No Grantor will (i) have
any Inventory, Equipment or Fixtures or proceeds or products thereof (other than
Collat-
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eral disposed of as permitted by Section 4.1.6) at a location other than a
location of such Grantor specified in Exhibit "A" hereto or any jurisdiction in
the United States in which a financing statement or similar evidence of a
security interest under applicable law has been filed against such Grantor as
debtor by the Company as secured party (ii) maintain records relating to the
Receivables at a location other than at the location of such Grantor specified
on Exhibit "A", (iii) maintain a place of business at a location other than a
location of such Grantor specified on Exhibit "A" hereto, (iv) change its name,
or (v) change its mailing address, unless such Grantor shall have given the
Company not less than 30 days' prior written notice thereof.
4.1.9 Other Financing Statements. No Grantor will sign or
authorize the signing on its behalf of any financing statement naming it as
debtor covering all or any portion of the Collateral, except financing
statements (a) naming the Company as secured party, (b) covering Liens permitted
by Section 6.17 of the Credit Agreement and (c) as described in Exhibit "C"
hereto.
4.2 Receivables.
4.2.1 Certain Agreements on Receivables. No Grantor will
make or agree to make any discount, credit, rebate or other reduction in the
original amount owing on a Receivable or accept in satisfaction of a Receivable
less than the original amount thereof, except that, so long as no Default or L/C
Default has occurred and is continuing, each Grantor may reduce the amount of
Accounts pledged by such Grantor in accordance with its present policies and in
the ordinary course of business.
4.2.2 Collection of Receivables. Except as otherwise
provided in this Intercompany Agreement or the Credit Agreement, each Grantor
will collect and enforce, at such Grantor's sole expense, all amounts due
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<PAGE> 14
or hereafter due to such Grantor under the Receivables pledged by such Grantor.
4.2.3 Delivery of Invoices. Each Grantor will deliver to
the Company immediately upon its request while a Default or a L/C Default exists
duplicate invoices with respect to each Account pledged by such Grantor bearing
such language of assignment as the Company shall specify.
4.2.4 Disclosure of Counterclaims on Receivables. If any
discount, credit, agreement to make a rebate or to otherwise reduce the amount
owing on a Receivable in excess of $50,000 exists or if, to the knowledge of any
Grantor, any dispute, setoff, claim, counterclaim or defense exists or has been
asserted or threatened with respect to any such Receivable, the Grantor who
pledged such Receivable will disclose such fact to the Company in writing in
connection with the inspection by the Company of any record of such Grantor
relating to such Receivable and in connection with any invoice or report
furnished by such Grantor to the Company relating to such Receivable.
4.3 Inventory and Equipment.
4.3.1 Maintenance of Goods. Each Grantor will do all
things necessary to maintain, preserve, protect and keep the Inventory and the
Equipment pledged by such Grantor in good repair and working and saleable
condition, except for obsolete Equipment no longer used or useful in such
Grantor's business.
4.3.2 Insurance. Each Grantor will (i) maintain fire and
extended coverage insurance on the Inventory and Equipment pledged by such
Grantor containing a lender's loss payable clause in favor of the Agent and
providing that said insurance will not be terminated except after at least 30
days' written notice from the
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insurance company to the Agent, (ii) maintain such other insurance on such
Inventory and Equipment for the benefit of the Company as is consistent with
sound practice in the broadcasting industry and (iii) furnish to the Company
upon the request of the Company from time to time the originals of all policies
of insurance on such Inventory and Equipment and certificates with respect to
such insurance.
4.4 Instruments and Pledged Deposits; Delivery of Pledged
Collateral. Each Grantor will (i) deliver to the Company immediately upon the
execution of this Intercompany Agreement, the originals of all Instruments
included in the Collateral pledged by such Grantor (other than, so long as no
Default or L/C Default has occurred and is continuing, Proceeds of Inventory and
Receivables collected in the ordinary course of business) which are evidenced by
certificates, endorsed in blank, marked with such legends and assigned as the
Company shall specify, and (ii) hold in trust for the Company upon receipt and
immediately thereafter deliver to the Company any Instrument evidencing or
constituting Collateral pledged by such Grantor (except, so long as no Default
or L/C Default or L/C Default has occurred and is continuing, ordinary cash
dividends paid with respect to the Instruments which are stock and the Stock
Rights related thereto and Proceeds of Inventory and Receivables collected in
the ordinary course of business).
4.5 Uncertificated Securities. Each Grantor will permit the
Company from time to time to cause the appropriate issuers of uncertificated
securities constituting Instruments pledged by such Grantor to mark their books
and records with the numbers and face amounts of all uncertificated securities
constituting Instruments and all rollovers and replacements therefor to reflect
the Lien of the Company granted pursuant to this Intercompany Agreement.
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4.6 Stock.
4.6.1 Changes in Capital Structure of Issuers. No Grantor
will (i) permit or suffer any issuer of corporate securities constituting
Collateral which issuer is controlled by such Grantor to dissolve, liquidate,
retire any of its capital stock, reduce its capital or merge or consolidate with
any other entity, or (ii) vote any of the Instruments in favor of any of the
foregoing.
4.6.2 Stock Rights. Each Grantor will deliver to the
Company, promptly upon receipt, all Stock Rights pledged by such Grantor (other
than, so long as no Default or L/C Default has occurred and is continuing,
ordinary cash dividends received with respect to the Instruments which are
stock) and agrees that such Stock Rights shall be held in trust by such Grantor
for the Company until delivery thereof to the Company.
4.6.3 Registration of Instruments. Each Grantor will
permit any registerable Collateral pledged by such Grantor to be registered in
the name of the Company or its nominee at any time a Default or L/C Default
exists at the option of the Company.
4.6.4 Exercise of Rights in Instruments. Each Grantor will
permit the Company or its nominee at any time a Default or L/C Default exists,
without notice but subject to compliance with applicable law and subject to
Section 8.18 hereof, to exercise all voting and corporate rights relating to the
Collateral pledged by such Grantor, including, without limitation, exchange,
subscription or any other rights, privileges, or options pertaining to any
shares of the stock pledged by such Grantor as Collateral and the Stock Rights
as if it were the absolute owner thereof.
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4.7 Federal Claims; Notice to Company. If at any time from time to
time the Company directs the Grantors to begin doing so, each Grantor will
promptly notify the Company of any Collateral pledged by such Grantor which
constitutes a claim against the United States government or any instrumentality
or agency thereof, the assignment of which claim is restricted by federal law.
5. DEFAULT.
5.1 Default shall mean "Default" as defined in the Credit
Agreement, and "L/C Default" shall mean a default under any of the Citicasters
L/C Documents.
5.2 Acceleration and Remedies. If any Default described in Section
7.6 or 7.7 of the Credit Agreement shall occur and be continuing with respect to
the Company, the Secured Obligations shall immediately become due and payable
without any election or action on the part of the Company, the Agent, any
Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider. If any other
Default shall occur and be continuing, the Required Banks may declare the
Secured Obligations to be immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Grantor hereby expressly
waives. If any L/C Default shall occur and be continuing, subject to any
intercreditor agreement in effect from time to time, the L/C Providers may
declare the Secured Obligations to be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Grantor
hereby expressly waives.
In such event, the Company may, subject to section 8.18:
5.2.1 Obligations That May Be Accelerated. Exercise any or
all of the rights and remedies provided (i) in this Intercompany Agreement, (ii)
to a
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secured party when a debtor is in default under a security agreement by the
Uniform Commercial Code as enacted in the State of Illinois or other applicable
jurisdiction, as amended, and (iii) by any other applicable law including,
without limitation, any law governing the exercise of a bank's rights of setoff
or bankers' lien; and
5.2.2 Contingent Obligations. With respect to Secured
Obligations which are contingent and cannot be accelerated by their nature, the
Company may require the Grantors (or any of them) to deposit cash or other
acceptable collateral in an amount sufficient to cover principal and interest
which will have accrued by the maturity date on said Secured Obligations to be
held as security for said Secured Obligations in the special collateral account
referred to in Section 7.
5.3 Grantors' Obligations upon Default. Upon the request of the
Company after the occurrence and during the continuance of a Default or a L/C
Default, each Grantor will, subject to Section 8.18:
5.3.1 Assembly of Collateral. Assemble and make available
to the Company the Collateral pledged by such Grantor and all records relating
thereto at any place or places reasonably specified by the Company.
5.3.2 Company Access. Permit the Company, by the Company's
representatives and agents, to enter any premises where all or any part of the
Collateral pledged by such Grantor, or the books and records relating thereto,
or both, are located, to take possession of all or any part of such Collateral
and to remove all or any part of such Collateral.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of the Company to exercise any right or
remedy granted under this Intercompany
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Agreement shall impair such right or remedy or be construed to be a waiver of
any Default, or a L/C Default, or an acquiescence therein, and any single or
partial exercise of any such right or remedy shall not preclude other or further
exercise thereof or the exercise of any other right or remedy, and no waiver,
amendment or other variation of the terms, conditions or provisions of this
Intercompany Agreement whatsoever shall be valid unless in writing signed by the
Company and its assignee (if any), and then only to the extent in such writing
specifically set forth; provided, however, that any amendment purporting to
release all or any portion of the Collateral shall be valid only if signed by
the Company and its assignee (if any). All rights and remedies contained in this
Intercompany Agreement or by law afforded shall be cumulative and shall be
available to the Company until the Secured Obligations have been paid in full
and the Credit Agreement has terminated.
7. PROCEEDS; COLLECTION OF RECEIVABLES.
7.1 Collection of Receivables. At the request of the Company at
any time after the occurrence and during the continuance of a Default or a L/C
Default, the Grantors shall execute and deliver to the Company the Agent's
standard form irrevocable lockbox agreements. In addition, the Company may at
any time after the occurrence and during the continuance of a Default or a L/C
Default, by giving all or any of the Grantors written notice, elect to require
that any or all of the Receivables be paid directly to the Company. In such
event, the Grantor or Grantors pledging such Receivables shall, and shall permit
the Company to, promptly notify the account debtors or obligors under the
Receivables of the Company's interest therein and direct such account debtors or
obligors to make payment of all amounts then or thereafter due under the
Receivables directly to the Company. Upon receipt of any such notice from the
Company, the Grantor or Grantors shall thereafter hold sepa-
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rate and apart from the Grantor's own funds of property and in trust for the
Company all amounts and proceeds received by them with respect to such
Receivables and other Collateral and immediately and at all times thereafter
deliver to the Company all such amounts and proceeds in the same form as so
received, whether by cash, check, draft, chattel paper, other instruments or
writings for the payment of money, or otherwise, with any necessary endorsements
so that such items may be collected by the Company. The Company shall hold and
apply funds so received as provided by the terms of Sections 7.3 and 7.4.
7.2 Agreements of the Undersigned. The Company is authorized to
endorse, in the name of any of the Grantors, any item, howsoever received by the
Company, representing any payment on or other proceeds of any of the Collateral.
Each of the Grantors will (i) upon request of the Company, execute
such Uniform Commercial Code financing statements and other documents and do
such other acts and things, all as the Company may from time to time reasonably
request to establish and maintain a valid, perfected security interest in the
Collateral to secure the performance and payment of each Grantor's Secured
Obligations; (ii) furnish the Company such information as the Company may from
time to time reasonably request; (iii) upon request of the Company, stamp on its
records concerning the Collateral (and/or enter in its computer records
concerning the Collateral) and add on all Chattel Paper constituting a portion
of the Collateral a notation, in form reasonably satisfactory to the Company, of
the security interest of the Company hereunder; (iv) cause to be noted on the
applicable certificate, in the event any of its Equipment is covered by
certificates of title, the security interest of the Company in the Equipment
covered thereby; and (v) furnish to the Company, as soon as possible from time
to time of any change in the
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address of its location (as disclosed in Exhibit "A" hereto) or in its name,
notice in writing of such change.
7.3 Special Collateral Account. The Company may at any time after
the occurrence and during the continuance of a Default or a L/C Default require
all cash proceeds of the Collateral received by any Grantor to be deposited in a
special non-interest bearing cash collateral account of Company's choosing to be
held there as security for such Grantor's Secured Obligations. No Grantor shall
have any control whatsoever over said cash collateral account. The Company may
from time to time (a) deposit the collected balances in said cash collateral
account into the general operating account of any Grantor with the Company or
(b) apply the collected balances in said cash collateral account to the payment
of such Grantor's Secured Obligations whether or not such Grantor's Secured
Obligations shall then be due.
7.4 Application of Proceeds. The proceeds of the Collateral shall
be applied by the Company to payment of each Grantor's Secured Obligations in
the following order unless a court of competent jurisdiction shall otherwise
direct:
(a) FIRST, to payment of all reasonable costs and expenses
of the Company incurred in connection with the collection and enforcement of the
Grantor's Secured Obligations or of the security interest granted to the Company
pursuant to this Intercompany Agreement;
(b) SECOND, to payment of that portion of the Grantor's
Secured Obligations constituting accrued and unpaid interest;
(c) THIRD, to payment of the principal of the Grantor's
Secured Obligations; and
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(d) FOURTH, the balance, if any, after all of the
Grantor's Secured Obligations have been satisfied, shall be paid over by the
Company to such Grantor.
8. GENERAL PROVISIONS.
8.1 Notice of Disposition of Collateral, etc. Each Grantor hereby
waives notice of the time and place of any public sale or the time after which
any private sale or other disposition of all or any part of the Collateral may
be made. To the extent such notice may not be waived under applicable law, any
notice made shall be deemed reasonable if sent to a Grantor, addressed as set
forth in Section 9, at least 10 days prior to any such public sale or the time
after which any such private sale or other disposition may be made. In addition,
each Grantor waives, to the extent permitted by applicable law, (i) with respect
to the Secured Obligations, presentment and demand for payment, protest, notice
of protest and non-payment and (ii) all rights of marshalling in respect of any
and all of the Collateral.
8.2 Compromises and Collection of Collateral. Each Grantor and the
Company recognizes that setoffs, counterclaims, defenses and other claims may be
asserted by obligors with respect to certain of the Receivables, that certain of
the Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably may be expected to be recovered with respect
to a Receivable. In view of the foregoing, each Grantor agrees that the Company
may at any time and from time to time, if a Default or a L/C Default has
occurred and is continuing, compromise with the obligor on any Receivable
pledged by such Grantor, accept in full payment of any such Receivable such
amount as the Company in its reasonable discretion shall determine or abandon
any such Receivable, and any such action by the Company shall be commercially
reasonable so
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long as the Company acts in good faith based on information known to it at the
time it takes any such action.
8.3 Secured Party Performance of Each Grantor's Obligations.
Without having any obligation to do so, the Company may perform or pay any
obligation in this Intercompany Agreement which any Grantor has agreed to
perform or pay but which it has failed to so perform or pay in a timely manner
after a request therefor from the Company and each Grantor shall reimburse the
Company for any amounts paid by the Company pursuant to this Section 8.3. Each
Grantor's obligation to reimburse the Company pursuant to the preceding sentence
shall be a Secured Obligation of such Grantor payable on demand.
8.4 Authorization for Secured Party to Take Certain Action. Each
Grantor irrevocably authorizes the Company at any time and from time to time in
the sole discretion of the Company and irrevocably appoints the Company as its
attorney in fact to act on behalf of such Grantor (i) any time (if such Grantor
has failed to do so promptly upon a request therefor) (a) to execute on behalf
of such Grantor as debtor and to file financing statements necessary or
desirable in the Company's sole discretion to perfect and to maintain the
perfection and priority of the Company's security interest in the Collateral
pledged by such Grantor, and (b) to file a carbon, photographic or other
reproduction of this Intercompany Agreement or any financing statement with
respect to the Collateral pledged by such Grantor as a financing statement in
such offices as the Company in its sole discretion deems necessary or desirable
to perfect and maintain the perfection and priority of the Company's security
interest in such Collateral and (ii) at any time after the occurrence and during
the continuance of a Default or a L/C Default (a) to endorse and collect any
cash proceeds of the Collateral, (b) subject to the terms of Section 4.1.6, to
enforce payment of the Receivables pledged by such Grantor in the name of the
Company or
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such Grantor, and (c) to apply the proceeds of any Collateral pledged by such
Grantor received by the Company to the Secured Obligations of such Grantor as
provided in Section 7. Each Grantor hereby acknowledges, consents and agrees
that the power of attorney granted pursuant to this Section is irrevocable and
coupled with an interest.
8.5 Specific Performance of Certain Covenants. Each Grantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.6, 4.4, 5.3, 7 and 8.7 will cause irreparable injury to the
Company, that the Company has no adequate remedy at law in respect to such
breaches and therefore agrees, without limiting the right of the Company to seek
and obtain specific performance of other obligations of such Grantor contained
in this Intercompany Agreement, that the covenants of such Grantor contained in
the Sections referred to in this Section 8.5 shall be specifically enforceable
against such Grantor.
8.6 Use and Possession of Certain Premises. Subject to the
provisions of Section 8.18, upon the occurrence and during the continuance of a
Default or a L/C Default, the Company shall be entitled to occupy and use any
premises owned or leased by any Grantor where any of the Collateral pledged by
such Grantor or any records relating to such Collateral are located until the
Secured Obligations of such Grantor are paid or the Collateral is removed
therefrom, whichever first occurs, without any obligation to pay such Grantor
for such use and occupancy.
8.7 Dispositions Not Authorized. No Grantor is authorized to sell
or otherwise dispose of the Collateral except as set forth in Section 4.1.6 and
notwithstanding any course of dealing between any Grantor and the Company or
other conduct of the Company, no authorization to sell or otherwise dispose of
the Collateral (except as set forth in Section 4.1.6) shall be binding
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upon the Company unless such authorization is in writing signed by the Company.
8.8 Definition of Certain Terms. Terms defined in the Illinois
Commercial Code which are not otherwise defined in this Intercompany Agreement
are used in this Intercompany Agreement as defined in the Illinois Commercial
Code as in effect on the date hereof.
8.9 Benefit of Agreement. The terms and provisions of this
Intercompany Agreement shall be binding upon and inure to the benefit of each of
the Grantors and the Company and their respective successors and assigns, except
that no Grantor shall have the right to assign its rights under this
Intercompany Agreement or any interest herein, without the prior written consent
of the Company.
8.10 Survival of Representations. All representations and
warranties of the Grantors contained in this Intercompany Agreement shall
survive the execution and delivery of this Intercompany Agreement.
8.11 Taxes and Expenses. Any taxes (excluding taxes on the overall
net income of the Company) payable or ruled payable by Federal or State
authority in respect of this Intercompany Agreement shall be paid by the
Grantors, together with interest and penalties, if any. The Grantors shall
reimburse the Company for any and all reasonable out-of-pocket expenses and
internal charges customarily charged by the Company (including reasonable
attorneys', auditors' and accountants' fees and reasonable time charges of
attorneys, paralegals, auditors and accountants who may be employees of the
Company) paid or incurred by the Company in connection with the preparation
execution, delivery, administration, collection and enforcement of this
Intercompany Agreement and in the audit, analysis, administration, collection,
preservation or sale of the Collateral (including the expenses and
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charges associated with any periodic or special audit of the Collateral).
8.12 Headings. The title of and section headings in this
Intercompany Agreement are for convenience of reference only, and shall not
govern the interpretation of any of the terms and provisions of this
Intercompany Agreement.
8.13 Termination. This Intercompany Agreement shall continue in
effect (notwithstanding the fact that from time to time there may be no Secured
Obligations or commitments therefor outstanding) until (i) the Grantors have
received written notice of its termination from the Company or its agents or the
Liens in favor of the Company have been released, (ii) no Secured Obligations or
commitments of the Company which would give rise to any Secured Obligation shall
be outstanding and (iii) the Credit Agreement has terminated.
8.14 Entire Agreement. This Intercompany Agreement embodies the
entire agreement and understanding between each of the Grantors and the Company
relating to the Collateral and supersedes all prior agreements and
understandings between each of the Grantors and the Company relating to the
Collateral.
8.15 CHOICE OF LAW; CONSENT TO JURISDICTION. THIS INTERCOMPANY
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS. EACH GRANTOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS INTERCOMPANY AGREEMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT.
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8.16 Distribution of Reports. Each Grantor authorizes the Company,
as the Company may elect in its sole discretion, to discuss with and furnish to
the Agent, the Co-Agents, the Banks, any L/C Providers or any Interest Rate
Providers or to any other person or entity having an interest in the Secured
Obligations (whether as a guarantor, pledgor of collateral, participant or
otherwise) all financial statements, audit reports and other information
pertaining to such Grantor whether such information was provided by such Grantor
or prepared or obtained by the Company provided that such other person or entity
agrees to hold such information in confidence except for disclosure: (i) to
legal counsel, accountants and other professional advisors to such purchasers,
(ii) to regulatory officials, (iii) as required by law, regulation or legal
process or (iv) in connection with any legal proceeding to which such person or
entity is a party. Neither the Company nor any of its employees, officers,
directors or agents makes any representations or warranty regarding any audit
reports or other analyses of any Grantor's condition which the Company may in is
sole discretion prepare to elect to distribute, nor shall the Company or any of
its employees, officers, directors or agents be liable to any person or entity
receiving a copy of such reports or analyses for any inaccuracy or omission
contained in or relating thereto.
8.17 Indemnity. Each Grantor hereby agrees to assume liability
for, and does hereby agree to indemnify and keep harmless the Company and its
respective successors, assigns, agents and employees, from and against any and
all liabilities, damages, penalties, suits, costs, and expenses of any kind and
nature, imposed on, incurred by or asserted against the Company or its
respective successors, assigns, agents and employees, in any way relating to or
arising out of this Intercompany Agreement, or the manufacture, purchase,
acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any
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Collateral (including, without limitation, latent and other defects, whether or
not discoverable by the Company or any Grantor, and any claim or patent,
trademark or copyright infringement), excluding any such losses, claims,
damages, penalties, judgments, liabilities, costs or expenses which result from
the gross negligence or willful misconduct of the Company or which result solely
from actions of the Company taken in exercising the remedies permitted hereunder
after the occurrence of a Default or a L/C Default.
8.18 Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary,
except for the grant of a security interest hereunder to the extent permitted by
law, this Intercompany Agreement and the transactions contemplated hereby do not
and will not constitute the transfer, assignment, or disposition in any manner,
voluntarily or involuntarily, directly or indirectly, of any license at any time
issued by the FCC to any Grantor ("License"), or the transfer of control of any
Grantor within the meaning of Section 310 of the Communications Act of 1934, as
amended.
(b) Notwithstanding any other provision of this
Intercompany Agreement, any foreclosure on, sale, transfer, or other disposition
of, or the exercise of any right to vote or consent with respect to, any of the
Collateral as provided herein or any other action taken or proposed to be taken
by the Company, the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers hereunder which would affect the operational, voting, or
other control of any Grantor, shall be pursuant to Section 310 of the
Communications Act of 1934, as amended, to any applicable state laws and to the
applicable rules and regulations thereunder and, if and to the extent required
thereby, subject to the prior approval of the FCC.
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(c) Subject to Section 8.18(e), if a Default or a L/C
Default shall have occurred and be continuing, each Grantor shall take any
action which the Company may reasonably request in order to transfer and assign
to the Company or to such one or more third parties as the Company may
designate, or to a combination of the foregoing, each License. To enforce the
provisions of this Section 8.18 the Company is empowered to request the
appointment of a receiver from any court of competent jurisdiction. Such
receiver shall be instructed to seek from the FCC an involuntary transfer of
control of each such License for the purpose of seeking a bona fide purchaser to
whom control will ultimately be transferred. Each Grantor hereby agrees to
authorize such an involuntary transfer of control upon the request of the
receiver so appointed and, if any Grantor shall refuse to authorize the
transfer, such Grantor's approval may be required by the court. Upon the
occurrence and continuance of a Default or a L/C Default, each Grantor shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Intercompany
Agreement including, without limitation, the preparation, execution and filing
with the FCC of the assignor's or transferor's portion of any application or
applications for consent to the assignment of any License or transfer of control
necessary or appropriate under the FCC's rules and regulations for approval of
the transfer or assignment of any portion of the Collateral, together with any
License.
(d) Each Grantor acknowledges that the assignment or
transfer of each License is integral to the Company's realization of the value
of the Collateral, that there is no adequate remedy at law for failure by such
Grantor to comply with the provisions of this Section 8.18 and that such failure
would not be adequately compensable in damages, and therefore agrees that the
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agreements contained in this Section 8.18 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in
this Intercompany Agreement the Company shall not, without first obtaining the
approval of the FCC, take any action pursuant to this Intercompany Agreement
which would constitute or result in any assignment of a License or any change of
control of any License or any Grantor if such assignment or change in control
would require, under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC.
8.19 Insurance Proceeds. Subject to the limitations set forth in
Section 6.18 of the Credit Agreement, so long as no Default or L/C Default has
occurred and is continuing or is reasonably anticipated to occur, insurance
proceeds received in respect of Inventory, Equipment and Fixtures shall be
remitted to the Grantor pledging such Collateral by the Company, provided that
such proceeds are used to rebuild, repair or restore such Inventory, Equipment
or Fixtures to a condition at least as good as its former condition or to
replace such Inventory, Equipment or Fixture with like property of at least
equal value.
8.20 Grantors Remain Liable. Anything herein to the contrary
notwithstanding,
(a) each Grantor shall remain liable under the contracts
and agreements included in the Collateral to the extent set forth therein and
shall perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Intercompany Agreement had not been
executed,
(b) the exercise by the Company of any of its rights
hereunder shall not release any Grantor from
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any of its duties or obligations under any such contracts or agreements included
in the Collateral, and
(c) the Company shall not have any obligation or liability
under any such contracts or agreements included in the Collateral by reason of
this Intercompany Agreement, nor shall the Company be obligated to perform any
of the obligations or collect or enforce any claim for payment assigned
hereunder.
9. NOTICES; COUNTERPARTS; ETC.
9.1 Sending Notices. Any notice required or permitted to be given
under this Intercompany Agreement shall be in writing and may be, and shall be
deemed given, if mailed, three days after the date when deposited in the United
States mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by personal delivery
or by telecopy, when received, addressed to each Grantor at the address set
forth on Exhibit "A" hereto as its chief executive office (with a copy to Sheli
J. Rosenberg, Esq., Rosenberg & Liebentritt, 2 North Riverside Plaza, Suite 600,
Chicago, Illinois 60606, provided, however, that the failure to provide any such
copy shall not affect the validity or sufficiency of any such notice) and to the
Company at the address indicated below its signature hereto.
9.2 Change in Address for Notices. Each Grantor and the Company
may change the address for service of notice upon it by a notice in writing to
the other parties.
9.3 Counterparts. This Intercompany Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Intercompany Agreement
by signing any such counterpart. This Inter-
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company Agreement shall be effective when it has been executed by each Grantor
and the Company.
9.4 Loan Document. This Intercompany Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
9.5 Amendments, etc. No amendment to or waiver of any provision of
this Intercompany Agreement, nor consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Company, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
9.6 Joinder. Any other Person may become a Grantor under and
become bound by the terms and provisions hereof by executing and delivering to
the Agent a counterpart signature page hereto substantially in the form of
Appendix I hereto.
9.7 WAIVER OF JURY TRIAL. THE COMPANY AND EACH GRANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS INTERCOMPANY AGREEMENT. EACH GRANTOR ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT, THE CO-AGENTS,
THE BANKS, ANY L/C PROVIDERS AND ANY INTEREST RATE PROVIDERS ENTERING INTO THE
CREDIT AGREEMENT, THE CITICASTERS L/C DOCUMENTS AND ANY RATE HEDGING AGREEMENTS,
RESPECTIVELY.
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<PAGE> 33
IN WITNESS WHEREOF, the undersigned have executed this
Intercompany Agreement as of the date first above written.
DEBTORS
GEORGIA NETWORK EQUIPMENT, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
JACOR BROADCASTING OF FLORIDA, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
JACOR BROADCASTING OF ATLANTA INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
33
<PAGE> 34
JACOR BROADCASTING OF KNOXVILLE, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
JACOR BROADCASTING OF COLORADO, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
JACOR BROADCASTING OF TAMPA BAY, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
JACOR CABLE, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
34
<PAGE> 35
JACOR BROADCASTING CORPORATION
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
BROADCAST FINANCE, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
CHESAPEAKE SECURITIES, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
OIA BROADCASTING L.L.C.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
35
<PAGE> 36
JACOR BROADCASTING OF ST. LOUIS, INC.
Address:
1300 PNC Center
210 East Fifth Street By:
Cincinnati, Ohio 45202 ----------------------------------------
Title:
36
<PAGE> 37
SECURED PARTY
Address:
Jacor Communications, Inc.
1300 PNC Center
210 East Fifth Street
Cincinnati, Ohio 45202
By:
-----------------------------------
Title:
------------------------------
37
<PAGE> 38
Appendix I to Intercompany Agreement
[Form of Counterpart Signature Page to
Intercompany Agreement]
By signing below, [each of] the undersigned becomes a Grantor
under the Intercompany Agreement dated as of February ___, 1996, to which this
signature page is attached and is made a part, and is bound by the terms
thereof.
[Grantor]
Date:
------------------------- By:
-------------------------------------
Name:
Title:
[Grantor]
Date:
------------------------- By:
-------------------------------------
Name:
Title:
38
<PAGE> 1
E*
CREDIT AGREEMENT
among
NOBLE BROADCAST GROUP, INC.,
NOBLE BROADCAST HOLDINGS, INC.,
and
BROADCAST FINANCE, INC.
Dated as of February 20, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1 Amount and Terms of Credit. . . . . . . . . . . . . . . . . . . . .. . . . 1
--------------------------
1.1 Commitments. . . . . . . . . . . . . . . . . . . . . . . .. . . . 1
1.2 Minimum Borrowing Amounts, etc. . . . . . . . . . . . . . .. . . . 1
1.3 Notice of Borrowing. . . . . . . . . . . . . . . . . . . .. . . . 1
1.4 Disbursement of Funds. . . . . . . . . . . . . . . . . . .. . . . 2
1.5 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 2
1.6 Interest. . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 2
1.7 Maturity; Termination. . . . . . . . . . . . . . . . . . .. . . . 3
SECTION 2 Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 3
--------
2.1 Voluntary Prepayments. . . . . . . . . . . . . . . . . . .. . . . 3
2.2 Mandatory Prepayments. . . . . . . . . . . . . . . . . . .. . . . 3
2.3 Method and Place of Payment. . . . . . . . . . . . . . . .. . . . 4
2.4 Net Payments. . . . . . . . . . . . . . . . . . . . . . . .. . . . 5
SECTION 3 Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . .. . . . 5
--------------------
3.1 Execution of Agreement; Notes. . . . . . . . . . . . . . .. . . . 5
3.2 No Default. . . . . . . . . . . . . . . . . . . . . . . . .. . . . 5
3.3 Opinions of Counsel. . . . . . . . . . . . . . . . . . . .. . . . 5
3.4 Corporate Proceedings. . . . . . . . . . . . . . . . . . .. . . . 5
3.5 Subsidiary Guaranty. . . . . . . . . . . . . . . . . . . .. . . . 5
3.6 Additional Guaranties. . . . . . . . . . . . . . . . . . .. . . . 6
3.7 Security Documents. . . . . . . . . . . . . . . . . . . . .. . . . 6
3.8 Release of Chase Liens. . . . . . . . . . . . . . . . . . .. . . . 6
3.9 Solvency Opinions; Insurance Analyses. . . . . . . . . . .. . . . 7
3.10 Notice of Borrowing. . . . . . . . . . . . . . . . . . . .. . . . 7
3.11 Jacor Transactions. . . . . . . . . . . . . . . . . . . . .. . . . 7
SECTION 4 Representations, Warranties and Agreements. . . . . . . . . . . . .. . . . 7
------------------------------------------
4.1 Corporate Status. . . . . . . . . . . . . . . . . . . . . .. . . . 7
4.2 Power and Authority. . . . . . . . . . . . . . . . . . . .. . . . 8
4.3 Representations and Warranties in . . . . . . . . . . . .. . . . 8
4.4 Use of Proceeds: Margin Regulations. . . . . . . . . . . .. . . . 8
4.5 Security Interests. . . . . . . . . . . . . . . . . . . . .. . . . 9
4.6 No Violation. . . . . . . . . . . . . . . . . . . . . . . .. . . . 9
SECTION 5 Affirmative Covenants. . . . . . . . . . . . . . . . . . . . . . . .. . . . 10
---------------------
5.1 Financial Information. . . . . . . . . . . . . . . . . . .. . . . 10
5.2 Insurance. . . . . . . . . . . . . . . . . . . . . . . . .. . . . 10
5.3 Conduct of Business. . . . . . . . . . . . . . . . . . . .. . . . 10
5.4 Additional Security; Further Assurances. . . . . . . . . .. . . . 10
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS CONTINUED
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
5.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . 11
5.6 Foreign Subsidiaries. . . . . . . . . . . . . . . . . . . . 11
SECTION 6 Negative Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 12
------------------
6.1 Conduct of Business. . . . . . . . . . . . . . . . . . . . 12
6.2 Operations Within Budget. . . . . . . . . . . . . . . . . . 12
6.3 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7 Events of Default; Remedies. . . . . . . . . . . . . . . . . . . . . 12
---------------------------
7.1 Events of Default. . . . . . . . . . . . . . . . . . . . . 12
7.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Specific Performance. . . . . . . . . . . . . . . . . . . . 14
SECTION 8 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
-----------
SECTION 9 Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
-------------
9.1 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . 25
9.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.3 Benefit of Agreement. . . . . . . . . . . . . . . . . . . . 26
9.4 No Waiver; Remedies Cumulative. . . . . . . . . . . . . . . 26
9.5 Calculations; Computations. . . . . . . . . . . . . . . . . 26
9.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. . . . . . 26
9.7 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 27
9.8 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . 28
9.9 Headings Descriptive. . . . . . . . . . . . . . . . . . . . 28
9.10 Amendment or Waiver. . . . . . . . . . . . . . . . . . . . 28
9.11 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . 28
9.12 Exclusion of Denver Stations. . . . . . . . . . . . . . . . 28
SECTION 10 Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
--------
10.1 The Guaranty. . . . . . . . . . . . . . . . . . . . . . . . 28
10.2 Bankruptcy. . . . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Nature of Liability. . . . . . . . . . . . . . . . . . . . 29
10.4 Independent Obligation. . . . . . . . . . . . . . . . . . . 29
10.5 Authorization. . . . . . . . . . . . . . . . . . . . . . . 29
10.6 Reliance. . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.7 Subordination. . . . . . . . . . . . . . . . . . . . . . . 31
10.8 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>
ii
<PAGE> 4
CREDIT AGREEMENT, dated as of February 20, 1996, among NOBLE BROADCAST
GROUP, INC., a Delaware corporation ("Parent"), NOBLE BROADCAST HOLDINGS, INC.,
a Delaware corporation (the "Borrower"), and BROADCAST FINANCE, INC., an Ohio
corporation ("Lender"). Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 8 are used herein as so defined.
W I T N E S S E T H
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lender is willing to make available to the Borrower the respective credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1 Amount and Terms of Credit.
1.1 Commitments. Subject to and upon the terms and conditions
herein set forth, Lender agrees to make loans to the Borrower, which loans shall
be drawn under the Term Loan Facility and the Revolving Loan Facility, as set
forth below:
(a) The Loan under the Term Loan Facility (the "Term Loan")
shall be in the amount of $40,000,000 and shall be made pursuant to a single
drawing. Once repaid, the Term Loan may not be reborrowed.
(b) Loans under the Revolving Loan Facility (each a "Revolving
Loan" and, collectively, the "Revolving Loans") (i) shall be made at any time
and from time to time on and after the Initial Borrowing Date and prior to the
Final Maturity Date, (ii) shall bear interest at the Applicable Loan Rate, (iii)
may be repaid and reborrowed in accordance with the provisions hereof, and (iv)
shall not exceed One Million and 00/100 Dollars ($1,000,000) at any time
outstanding.
1.2 Minimum Borrowing Amounts, etc. The minimum principal
amount of each Borrowing under the Revolving Loan Facility shall be $50,000.
1.3 Notice of Borrowing.
(a) Whenever the Borrower desires to incur Revolving Loans
under any Facility, it shall give the Lender at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days' irrevocable prior
written notice (or telephonic notice promptly confirmed in writing) of each
Borrowing, in the form of Exhibit A, appropriately completed to specify (i) the
aggregate principal amount of the Loans to be made pursuant to such Borrowing,
and (ii) the date of such Borrowing (which shall be a Business Day).
1
<PAGE> 5
(b)If Borrower gives telephonic notice, the Borrower hereby waives the right to
dispute the Lender's record of the terms of such telephonic notice.
1.4 Disbursement of Funds. Lender shall disburse borrowed funds
by depositing such funds in Borrower's bank account designated in writing by
Borrower to Lender, no later than 2 p.m. (New York time) on the date specified
in each Notice of Borrowing. All amounts shall be made available in U.S. dollars
and immediately available funds.
1.5 Notes.
(a) The Borrower's obligation to pay the principal of, and
interest on, all the Loans made to it shall be evidenced (i) for the Term Loan,
by a promissory note in the form of Exhibit B-1 (the "Term Note") and (ii) if
Revolving Loans, by a promissory note in the form of Exhibit B-2 (the "Revolving
Note").
(b) The Term Note shall (i) be executed by the Borrower, (ii)
be payable to the order of Lender and be dated the Initial Borrowing Date, (iii)
be in the stated principal amount of $40,000,000; (iv) mature on the Final
Maturity Date, (v) bear interest at the Applicable Loan Rate, (vi) be subject to
voluntary prepayment as provided in Section 2.1 and mandatory prepayment as
provided in Section 2.2 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(c) The Revolving Note shall (i) be executed by the Borrower,
(ii) be payable to the order of Lender and be dated the Initial Borrowing Date,
(iii) be in a stated principal amount of $1,000,000, (iv) mature on the Final
Maturity Date, (v) bear interest at the Applicable Loan Rate, (vi) be subject to
voluntary prepayment as provided in Section 2.1 and mandatory repayment as
provided in Section 2.2 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(d) Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any Note endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of such Loans.
1.6 Interest.
(a) Upon the occurrence and during the continuance of a Default
of the type described in Section 7.1(a) or any Event of Default, all principal
and, to the extent permitted by law, overdue interest in respect of each Loan
and any other overdue amount payable hereunder shall bear interest at a rate per
annum equal to the Applicable Loan Rate plus 2% per annum.
2
<PAGE> 6
(b) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable quarterly in arrears on the last Business Day of each March, June,
September and December, and on any prepayment (on the amount prepaid) at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(c) All computations of interest hereunder shall be made in
accordance with Section 9.5(b).
1.7 Maturity; Termination. The Total Revolving Loan Commitment
(and the Revolving Loan Commitment of each Lender) shall terminate on the
earlier of (i) the date on which any Change of Ownership Event occurs and (ii)
the Final Maturity Date.
SECTION 2 Payments.
2.1 Voluntary Prepayments. The Borrower shall have the right to
prepay the Term Note and the Revolving Loans, in whole or in part, without
premium or penalty except as otherwise provided in this Agreement, from time to
time, provided that each repayment in the minimum amount of $25,000.
2.2 Mandatory Prepayments.
(a) Requirements:
(i) If on any date the aggregate outstanding principal
amount of Revolving Loans exceed One Million and 00/100 Dollars ($1,000,000)
(after giving effect to all other repayments thereof on such date), the Borrower
shall repay on such date the principal of outstanding Revolving Loans in an
aggregate amount equal to the outstanding principal amount of Revolving Loans in
excess of $1,000,000.
(ii) Subject to and in accordance with Section 2.2(b),
on or prior to the third Business Day after the date of receipt thereof by
Parent and/or any of its Subsidiaries of the Cash Proceeds from any Asset Sale,
an amount equal to 100% of the Net Cash Proceeds from such Asset Sale shall be
applied as a mandatory repayment of principal of the then outstanding Loans,
provided that to the extent no Default or Event of Default has occurred and is
continuing at the required time of payment, any such Net Cash Proceeds received
by the Borrower or any of its Subsidiaries shall not be required to be so
applied if the Borrower has delivered a Reinvestment Notice to the Lender on or
prior to the third Business Day after the date of receipt of such Cash Proceeds
to the extent of the Anticipated Reinvestment Amount specified in such
Reinvestment Notice.
(iii) Subject to and in accordance with Section
2.2(b), on or prior to the third Business Day after the date of receipt thereof
by Parent and/or any of its
3
<PAGE> 7
Subsidiaries of any Insurance Proceeds from any Recovery Event, an amount equal
to 100% of the Net Insurance Proceeds from such Recovery Event shall be applied
as a mandatory repayment of principal of the then outstanding Loans; provided
that to the extent no Default or Event of Default has occurred and is continuing
at the required time of payment, any such Net Insurance Proceeds received by the
Borrower or any of its Subsidiaries shall not be required to be so applied if
the Borrower has delivered a Reinvestment Notice to the Lender on or prior to
the third Business Day after the date of receipt of such Insurance Proceeds to
the extent of the Anticipated Reinvestment Amount specified in such Reinvestment
Notice.
(iv) Subject to and in accordance with Section 2.2(b),
on the date of receipt thereof by Parent and/or any of its Subsidiaries of any
cash capital contribution or the proceeds from the sale or issuance, after the
Initial Borrowing Date, of equity, an amount equal to 100% of such cash capital
contribution or the net proceeds from any such equity issuance of any such sale
or issuance, as the case may be, shall be applied as a mandatory repayment of
principal of the then outstanding Loans.
(v) Subject to and in accordance with Section 2.2(b),
on each Reinvestment Prepayment Date, an amount equal to the Reinvestment
Prepayment Amount with respect to the applicable Reinvestment Event shall be
applied to the prepayment of the outstanding principal amount of Loans.
(vi) On the date of any Change of Ownership Event, the
outstanding principal amount of the Loans, if any, shall be due and payable in
full.
(b) Application:
(i) Each mandatory repayment of Loans required to be
made pursuant to Section 2.2(a)(ii), 2.2(a)(iii), 2.2(a)(iv), 2.2(a)(v) and
2.2(a)(vi) shall be applied: (i) first, to repay the Term Loan; and (ii) second,
to prepay the principal of outstanding Revolving Loans.
2.3 Method and Place of Payment. All payments under this
Agreement shall be made to the Lender, not later than 1:00 p.m. (New York time)
on the date when due and shall be made in immediately available funds and in
lawful money of the United States of America at the Payment Office. Any payments
under this Agreement which are made later than 1:00 p.m. (New York time) shall
be deemed to have been made on the next succeeding Business Day. Whenever any
payment to be made hereunder shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable during such extension at the applicable rate in effect immediately prior
to such extension.
4
<PAGE> 8
2.4 Net Payments. All payments made by Parent or the Borrower
hereunder, under any Note or any other Credit Document, will be made without
setoff, counterclaim or other defense.
SECTION 3 Conditions Precedent. The obligation of the Lender to make
each Loan to the Borrower hereunder is subject, at the time of each such Credit
Event (except as otherwise hereinafter indicated or as set forth in the
Disclosure Letter) to the satisfaction of the following conditions:
3.1 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, this Agreement shall have become effective as provided in
Section 9.8 and there shall have been delivered to the Lender the Term Note and
Revolving Note executed by the Borrower, and in the amount, maturity and as
otherwise provided herein.
3.2 No Default. At the time of each Credit Event and also after
giving effect thereto there shall exist no Default or Event of Default.
3.3 Opinions of Counsel. On the Initial Borrowing Date, the
Lender shall have received opinions satisfactory to Lender, from Gray Cary Ware
& Freidenrich, counsel to the Borrower, which opinion shall cover such matters
as the Lender may reasonably request.
3.4 Corporate Proceedings.
(a) On the Initial Borrowing Date, the Lender shall have
received from each Credit Party a certificate, dated the Initial Borrowing Date,
signed by the chairman, a vice chairman, the president or any vice-president of
such Credit Party, with appropriate insertions and deletions, together with
copies of the certificate of incorporation and by-laws of such Credit Party and
the resolutions of such Credit Party referred to in such certificate and all of
the foregoing (including each such certificate of incorporation and by-laws)
shall be satisfactory to the Lender.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Transaction Documents
shall be satisfactory in form and substance to the Lender, and the Lender shall
have received all information and copies of all certificates, documents and
papers, including good standing certificates and any other records of corporate
proceedings and governmental approvals, if any, which the Lender may have
requested in connection therewith, such documents and papers, where appropriate,
to be certified by proper corporate or governmental authorities.
3.5 Subsidiary Guaranty. On the Initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Guaranty in form and
5
<PAGE> 9
substance reasonably satisfactory to Lender (as modified, amended or
supplemented from time to time in accordance with the terms hereof and thereof,
the "Subsidiary Guaranty"), and the Subsidiary Guaranty shall be in full force
and effect.
3.6 Additional Guaranties. On or prior to the Initial Borrowing
Date, (i) RDP shall have duly authorized, executed and delivered a guaranty in
form and substance satisfactory to the Lender (as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof,
the "RDP Guaranty"), and the RDP Guaranty shall be in full force and effect, and
(ii) Nobro shall have duly authorized, executed and delivered a guaranty in form
and substance satisfactory to the Lender (as modified, amended or supplemented
from time to time in accordance with the terms hereof and thereof, the "Nobro
Guaranty") and the Nobro Guaranty shall be in full force and effect.
3.7 Security Documents.
(a) On the Initial Borrowing Date, each Credit Party shall have
duly authorized, executed and delivered a Pledge Agreement in form and substance
reasonably satisfactory to Lender (as modified, amended or supplemented from
time to time in accordance with the terms thereof and hereof, the "Pledge
Agreement") and shall have delivered to the Lender, as pledgee thereunder, all
of the certificates representing the Pledged Securities referred to therein,
endorsed in blank or accompanied by executed and undated stock powers, and the
Pledge Agreement shall be in full force and effect.
(b) On the Initial Borrowing Date, each Credit Party shall have
duly authorized, executed and delivered a Security Agreement in form and
substance reasonably satisfactory to Lender (as modified, supplemented or
amended from time to time in accordance with the terms thereof and hereof, the
"Security Agreement") covering all of such Credit Party's present and future
Security Agreement Collateral, in each case together with:
(i) executed copies of Financing Statements (Form
UCC-1) in appropriate form for filing under the UCC of each jurisdiction as may
be necessary to perfect the security interests purported to be created by the
Security Agreement;
(ii) evidence that all other filings, recordings or
actions necessary or, in the opinion of the Lender, desirable to perfect and
protect the security interests purported to be created by the Security Agreement
have been taken.
3.8 Release of Chase Liens. On the Initial Borrowing Date and
concurrently with the incurrence of the Loans on such date, the creditors in
respect of the Chase Indebtedness shall have terminated and released any and all
security interests in and liens on the capital stock of, and assets owned by,
Parent, the Borrower, their respective Subsidiaries, Nobro and RDP and shall
have released each Parent, the Borrower and their
6
<PAGE> 10
respective Subsidiaries from all guarantees entered in connection with any such
Indebtedness, and the Lender shall have received all such releases as may have
been requested by the Lender, which releases shall be in form and substance
satisfactory to the Lender.
3.9 Solvency Opinions; Insurance Analyses. On the Initial
Borrowing Date, the Borrower shall cause to be delivered to the Lender:
(a) a certificate, in form and substance reasonably
satisfactory to Lender, from the Chief Financial Officer of the Borrower
expressing opinions of value and other appropriate factual information regarding
the solvency of Parent and the Borrower on a stand-alone basis and Parent and
its Subsidiaries taken as a whole and the Borrower and its Subsidiaries taken as
a whole; and
(b) evidence of insurance complying with the requirements of
this Agreement for the business and properties of Parent, the Borrower and its
Subsidiaries, in scope, form and substance satisfactory to the Lender.
3.10 Notice of Borrowing. Prior to the making of each Loan, the
Lender shall have received a Notice of Borrowing satisfying the requirements of
Section 1.3.
3.11 Jacor Transactions. The Jacor Transaction Documents shall
have been executed and delivered by all parties thereto and the transactions
contemplated by the Redemption Closing (as defined in the Stock Purchase
Agreement) have occurred, to the extent to which they were contemplated to occur
on or before the date of this Agreement.
SECTION 4 Representations, Warranties and Agreements. In order to induce
the Lender to enter into this Agreement and to make the Loans, each Parent and
the Borrower make the following representations, warranties and agreements with
the Lender (the "Borrower Representations and Warranties"). Unless otherwise
specifically provided herein, the Borrower Representations and Warranties are
hereafter subject to the provisions of the Stock Purchase Agreement regarding
the expiration of the "Company Representations and Warranties." The Borrower's
Representations and Warranties are qualified in their entirety by the
information disclosed in the Disclosure Letter.
4.1 Corporate Status. Parent, Borrower and each Subsidiary is a
corporation duly organized, validly existing and in good standing under the laws
of the state of its incorporation, the details of which are set forth in the
Disclosure Letter. Each Credit Party has all requisite corporate and legal power
and authority, including without limitation all licenses, permits,
authorizations and approvals (corporate, governmental and otherwise) necessary
to own, lease and operate their respective assets and properties and to conduct
their business in the manner and in the places where such assets and properties
are owned, leased or operated or such business is conducted by them. Each Credit
Party
7
<PAGE> 11
is licensed or qualified as a foreign corporation in each state and foreign
country in which it is doing business and where the nature and extent of such
business requires such license or qualification, the details of which are set
forth in the Disclosure Letter.
4.2 Power and Authority. Each Credit Party has the full power
and authority to execute and deliver this Agreement and all other Transaction
Documents to which it is or will be a party, and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Transaction Documents, and the consummation by the Borrower and each
Credit Party of the transactions contemplated hereby and thereby, have been duly
authorized by all necessary corporate action. This Agreement has been, and each
of the other Transaction Documents to which a Credit Party is or will be a
party, has been or will be duly executed and delivered by the respective Credit
Party thereto. The obligations imposed on each Credit Party by this Agreement
are, and by the Transaction Documents when executed and delivered by appropriate
Credit Party will be, the valid and binding obligations of the respective Credit
Party thereto, enforceable against them in accordance with their respective
terms. The Borrower hereby makes each of the representations and warranties set
forth in this Section with respect to the execution, delivery and consummation
by each Subsidiary of any Transaction Document to which such Subsidiary is a
party.
4.3 Representations and Warranties in Stock Purchase Agreement.
All representations and warranties set forth in Article IV of the Stock Purchase
Agreement are made a part hereof and incorporated herein by reference. This
Agreement, the Notes, all Security Documents, and the Guaranties shall each be
considered an "Ancillary Document", as defined in the Stock Purchase Agreement
and all representations and warranties in the Stock Purchase Agreement which
refer to Ancillary Documents shall be read to include this Agreement, the Notes,
the Security Documents and the Guaranty as if such terms were specifically set
forth in the Stock Purchase Agreement.
4.4 Use of Proceeds: Margin Regulations.
(a) The proceeds of all Term Loan incurred by the Borrower on
the Initial Borrowing Date shall be utilized to repay the Chase Indebtedness.
(b) The proceeds of all Revolving Loans incurred by the
Borrower shall be utilized to repay the Chase Indebtedness (if necessary) and
for the general corporate and working capital purposes of the Borrower and its
Subsidiaries.
(c) Neither the making of any Loan hereunder, nor the use of
the proceeds thereof, will violate the provisions of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System and no part of the proceeds
of any Loan will be used to purchase or carry any Margin Stock or to extend
credit for the purpose of purchasing or carrying any Margin Stock.
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4.5 Security Interests. On and after the Initial Borrowing
Date, each of the Security Documents creates, as security for the Obligations, a
valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto, superior to and prior to the rights of all third
Persons and subject to no other Liens (except that the Security Agreement
Collateral may be subject to Permitted Encumbrances relating thereto). No
filings or recordings are required in order to perfect the security interests
created under any Security Document except for filings or recordings executed in
connection with any such Security Document executed on the date of this
Agreement.
4.6 No Violation. Except as set forth in the Disclosure Letter,
neither the Parent, Borrower nor any Subsidiary is in violation of its
Certificate of Incorporation, Bylaws or its charter and other governance
documents, and neither the Parent, Borrower nor any Subsidiary has in the past
been in violation of its Certificate of Incorporation, Bylaws or its charter and
other governance documents the consequence of which past failure would have a
material adverse effect on the Parent, Borrower or any Subsidiary. The
execution, delivery and performance by each of the Credit Parties of this
Agreement and each Transaction Document to which it is a party, and the
performance and consummation by each of the Credit Parties of the transactions
contemplated hereby and thereby:
(a) other than the governmental and regulatory consents and
approvals required by Article VII of the Stock Purchase Agreement or as
otherwise specified in the Transaction Documents, do not require on behalf of
any Credit Party any consent, authorization, order, waiver or approval of, or
registration, declaration or filing with, any governmental entity;
(b) will not result in a violation of any material law or
regulation, or any judgment, writ, injunction, order, rule, ruling or decree of
any governmental entity to which any Credit Party is subject;
(c) will not conflict with or constitute a breach or violation
of or default under the Certificate of Incorporation, Bylaws or its charter and
other governance documents of the Parent, Borrower or any Subsidiary;
(d) other than the governmental and regulatory consents and
approvals required by Article VII of the Stock Purchase Agreement or as
otherwise specified in the Transaction Documents and except with respect to
certain of the Transaction Documents that must be filed with the FCC, do not
require on behalf of any Credit Party any consent, authorization, order, waiver
or approval of, or registration, declaration or notice to, or filing with any
party, nor does it violate or conflict with or result in a breach of, or
constitute a default of or give rise to a right of termination or acceleration
(or an event which with notice or lapse of time or both would give rise to a
right of termination or acceleration) under, any provision of any contract,
indenture, mortgage, lease, agreement, license, permit or other instrument to
which any Credit Party is a party or to which any
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of their respective assets or properties are subject, where the failure to
obtain such consent, authorization, order, waiver or approval, or make such
registration, declaration or notice, or filing, or where the occurrence of such
violation or conflict would have a Material Adverse Effect; and
(e) will not result in the creation of any lien, charge or
encumbrance against the Parent, Borrower or any Subsidiary or any of their
assets or properties.
SECTION 5 Affirmative Covenants.
5.1 Financial Information. Subject to Section 9.12 of this
Agreement, the Parent, Borrower and Subsidiaries shall comply with the
provisions of the Stock Purchase Agreement (including without limitation Section
6.7 of the Stock Purchase Agreement) regarding the furnishing of financial
information to Jacor.
5.2 Insurance. Parent will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance set
forth in such amounts, covering such risks and liabilities and with such
deductibles as are in accordance with normal industry practice. Parent will, and
will cause its Subsidiaries to, furnish on the Initial Borrowing Date and
annually thereafter to the Lender a summary of the insurance carried in respect
of Parent and its Subsidiaries and the assets of Parent and each of its
Subsidiaries together with certificates of insurance and other evidence of such
insurance, if any, naming the Lender as a secured party and/or loss payee in
respect of any casualty loss policies and naming the Lender as an additional
insured with respect to any liability policy and stating that such insurance
shall not be cancelled or materially revised without at least thirty (30) days'
prior written notice by the insurer to the Lender.
5.3 Conduct of Business. (a) The Parent and the Borrower shall,
and the Borrower shall cause each Subsidiary to, conduct its business in the
ordinary course in accordance with the provisions of the Stock Purchase
Agreement, including without limitation the affirmative covenants contained in
Section 6.2 of the Stock Purchase Agreement.
5.4 Additional Security; Further Assurances.
(a) Each Parent and the Borrower will, and will cause each of
its Domestic Subsidiaries to, grant to the Lender security interests and
mortgages (each, an "Additional Mortgage") in such Real Property or Leaseholds
of Parent or any of its Subsidiaries as may be requested from time to time by
the Lender (each such Real Property or Leasehold, an "Additional Mortgaged
Property"). All such Additional Mortgages shall be in such form as is reasonably
satisfactory to the Lender and shall constitute valid and enforceable perfected
Liens superior to and prior to the rights of all third Persons and subject to no
other Liens except Permitted Encumbrances. The Additional Mortgages or
instruments related thereto shall have been duly recorded or filed in such
manner and in such places as
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are required by law to establish, perfect, preserve and protect the Liens in
favor of the Lender required to be granted pursuant to the Additional Mortgages
and all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
(b) Each Parent and the Borrower will, and will cause its
Subsidiaries to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Lender from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further actions in furtherance of
the intent of the Security Documents as the Lender may reasonably require.
Furthermore, at the time of the execution and delivery of any Additional
Mortgage, the Borrower shall cause to be delivered to the Lender such opinions
of counsel, title insurance, real property surveys and other related documents
as may be reasonably requested by the Lender to assure itself that this Section
5.4 has been complied with.
(c) Each Parent and the Borrower agree that each action
required above by clause (a) or (b) of this Section 5.4 shall be completed as
soon as possible, but in no event later than thirty (30) days after such action
is requested to be taken by the Lender.
5.5 Use of Proceeds. All proceeds of Loans shall be used as
provided in Section 4.4.
5.6 Foreign Subsidiaries. If a Foreign Subsidiary has not
dissolved within ninety (90) days after the date of this Agreement, then Lender
may request and Borrower agrees to cause (to the extent permitted by applicable
law) the (i) a pledge (x) of 66-2/3 % or more of the total combined voting power
of all classes of capital stock of such Foreign Subsidiary entitled to vote, and
(y) of any promissory note issued by such Foreign Subsidiary to Parent or any of
its Domestic Subsidiaries, and (ii) the entering into by such Foreign Subsidiary
of a security agreement in substantially the form of the Security Agreement.
However, if such actions would cause the undistributed earnings of such Foreign
Subsidiary as determined for Federal income tax purposes to be treated as a
deemed dividend to such Foreign Subsidiary's United States parent for Federal
income tax purposes, then in the case of a failure to deliver the evidence
described in clause (i) above, that portion of such Foreign Subsidiary's
outstanding capital stock or any promissory notes so issued by such Foreign
Subsidiary, in each case not theretofore pledged pursuant to the Pledge
Agreement shall be pledged to the Lender pursuant to the Pledge Agreement (or
another pledge agreement in substantially similar form, if needed), and in the
case of a failure to deliver the evidence described in clause (ii) above, such
Foreign Subsidiary shall execute and deliver the Security Agreement (or another
security agreement in substantially similar form, if needed), granting the
Lender a security interest in all of such Foreign Subsidiary's assets and
securing the Obligations of the Borrower under the Credit Documents. Parent and
Borrower shall not create or acquire or permit any Subsidiary to
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create or acquire any Foreign Subsidiary which is not in existence on the date
of this Agreement.
SECTION 6 Negative Covenants. Each Parent and the Borrower hereby
covenant and agree that as of the Effective Date, and thereafter for so long as
this Agreement is in effect and until the Total Commitments have terminated, no
Notes are outstanding and the Loans, together with interest and all other
Obligations incurred hereunder are paid in full:
6.1 Conduct of Business. The Parent shall not, the Borrower
shall not, and the Borrower shall cause the Subsidiaries not to, take any
actions outside of the Borrower's or such Subsidiary's ordinary course of
business with the provisions of the Stock Purchase Agreement, including without
limitation the negative covenants contained in Section 6.2 of the Stock Purchase
Agreement.
6.2 Operations Within Budget. Parent and Borrower will operate,
and cause each Subsidiary to operate, in accordance with a budget of expenses
for each fiscal quarter, which budget shall be developed by Borrower and
affirmed by Lender (such affirmance not to be unreasonably withheld) prior to
the commencement of each fiscal quarter. Borrower shall promptly notify Lender
if expenses are not within the budgeted amounts. Thereafter, Lender and Borrower
shall mutually agree upon a course of action to appropriately deal with the
excess expenses.
6.3 Liens. Neither Parent nor the Borrower will, or will permit
any of their respective Subsidiaries to create, incur, assume or suffer to exist
any Lien upon or with respect to any property or assets of any kind (real or
personal, tangible or intangible) of Parent, the Borrower or their respective
Subsidiaries, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable or
notes) or assign any right to receive income, or file or permit the filing of
any financing statement under the UCC or any similar notice of Lien under any
similar secondary or notice statute, except as provided for in the Stock
Purchase Agreement.
SECTION 7 Events of Default; Remedies.
7.1 Events of Default. Any of the following specified events
shall be an event of default hereunder (each an "Event of Default"):
(a) Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default shall
continue for two or more Business Days, in the payment when due of interest on
the Loans, or of any other amounts owing hereunder or under any other Credit
Document, provided, however, that there shall
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not be a default under this Section 7.1(a) if such non-payment is a result of
Failed TBA Payment; or
(b) Bankruptcy, etc. Parent, the Borrower or any of their
respective Subsidiaries shall commence a voluntary case concerning itself under
Title 11 of the United States Code entitled "Bankruptcy", as now or hereafter in
effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case
is commenced against Parent, the Borrower or any of their respective
Subsidiaries by any entity other than the Lender, Jacor or its affiliates or
subsidiaries, or as a result of Failed TBA Payments, and the petition is not
controverted within sixty (60) days, or is not dismissed within sixty (60) days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of Parent, the Borrower or any of their respective Subsidiaries; or
Parent, the Borrower or any of their respective Subsidiaries commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Parent, the Borrower
or any of their respective Subsidiaries; or there is commenced against Parent,
the Borrower or any of their respective Subsidiaries any such proceeding which
remains undismissed for a period of sixty (60) days; or Parent, the Borrower or
any of their respective Subsidiaries is adjudicated insolvent or bankrupt; or
any order of relief or other order approving any such case or proceeding is
entered; or Parent, the Borrower or any of their respective Subsidiaries suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of sixty (60)
days; or Parent, the Borrower or any of their respective Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by Parent, the Borrower or any of their respective Subsidiaries for the
purpose of effecting any of the foregoing; or
(c) Guaranties. (i) Any Guaranty shall cease to be in full
force and effect and is not reinstated or reaffirmed in a legally binding and
enforceable manner within thirty (30) days after notice thereof to Borrower from
Lender, or (ii) any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under any
Guaranty and such denial or disaffirmation is not satisfied by a Purchase Price
Offset or (iii) any Guarantor shall default in the due payment of any amount due
and payable pursuant to any Guaranty and such default is not satisfied by a
Purchase Price Offset; or
(d) Security Documents. At any time after the execution and
delivery thereof any of the Security Documents shall cease (i) to be in full
force and effect, or (ii) to give the Lender the Liens, rights, powers and
privileges purported to be created thereby (including, without limitation, a
perfected security interest in, and Lien on, all of the Collateral), in favor of
the Lender, superior to and prior to the rights of all third Persons (except as
permitted by Section 6.3), and subject to no other Liens (except as permitted by
Section 6.3), and the result of either clause (i) or (ii) of this Section 7.1(d)
can not be either (y) satisfied by a Purchase Price Offset or (z) cured within
thirty (30)
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days after written notice thereof to Borrower from Lender or such longer period
of time as is necessary so long as Borrower has initiated curative action within
such thirty (30) day period and thereafter diligently pursues such action to
completion; or
(e) Specific Performance. Parent, Borrower or any Subsidiary
shall fail to fully comply on a timely basis with an order or direction of a
court of competent jurisdiction or other governmental body as a result of
Lender's or any of its assignee's actions brought pursuant to Section 7.3 of
this Agreement.
(f) Omnibus Default. The Stock Purchase Price has been reduced
to Zero (0) as a result of Purchase Price Offsets. The Stock Purchase Agreement
will include a provision that a breach of the Borrower's Representations and
Warranties and the other covenants contained in this Agreement and the other
Security Documents will be a Purchase Price Offset.
7.2 Remedies.
(a) Upon the occurrence and during the continuation of any
Event of Default, the Lender shall, by written notice to the Borrower, take any
or all of the following actions, without prejudice to the rights of the Lender
to enforce its claims against any Credit Party (provided, that if an Event of
Default specified in Section 7.1(b) shall occur with respect to the Borrower,
the result which would occur upon the giving of written notice by the Lender as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment (or the unutilized
portion thereof) terminated, whereupon the Commitment of Lender (or Lender's
unutilized portion thereof) shall forthwith terminate immediately and without
any other notice of any kind; (ii) declare the principal of and any accrued
interest in respect of all Loans and all obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; and (iii) enforce, as Lender (or direct
the Lender to enforce), any or all of the Liens and security interests created
pursuant to the Security Documents.
(b) Notwithstanding anything in the Security Documents to the
contrary, Lender agrees not to pursue any rights and remedies granted to Lender
under any Security Document until an Event of Default as defined in this
Agreement has occurred and is continuing.
7.3 Specific Performance. The Credit Parties hereby declare
that it is impossible to measure in money the damages which will accrue to
Lender by reason of a breach or violation of any representation, warranty or
covenant contained in this Agreement or any other Credit Document which is not
satisfied by a Purchase Price Offset (a "Breach"). Therefore, Lender may
institute any action or proceeding to specifically enforce and cause the Credit
Parties to remedy a Breach of a provisions of this Agreement
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or any Credit Documents and any Credit Party against whom such action or
proceeding is brought hereby waives the claim or defense therein that such
Credit Party has an adequate remedy at law. Furthermore, such Credit Party shall
not urge in any such action or proceeding the claim or defense that such remedy
at law exists.
SECTION 8 Definitions. As used herein, the following terms shall have
the meanings herein specified unless the context otherwise requires. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural the singular:
"Additional Mortgage" shall have the meaning provided in Section
5.4(a).
"Additional Mortgaged Property" shall have the meaning provided in
Section 5.4(a).
"Affected Company" shall mean (i) with respect to any Reinvestment
Event arising in connection with the consummation of an Asset Sale, the Borrower
or any of its Subsidiaries and (ii) with respect to any Reinvestment Event
arising from the receipt of Net Insurance Proceeds from a Recovery Event, the
Borrower or the Subsidiary of the Borrower which owned the assets which are the
subject of such Recovery Event.
"Agreement" shall mean this Credit Agreement, as the same may be from
time to time modified, amended and/or supplemented.
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Event, the amount specified in the Reinvestment Notice with respect
thereto as the amount of the respective Net Cash Proceeds or Net Insurance
Proceeds, as the case may be, that the Borrower or such Subsidiary of the
Borrower intends in good faith to use to restore, purchase, construct or
otherwise acquire Reinvestment Assets.
"Applicable Loan Rate" shall mean, for the period from the Initial
Borrowing Date through December 31, 1996, the Prime Rate of Banque Paribas on
the Initial Borrowing Date and for each calendar year thereafter, Applicable
Loan Rate shall mean the Prime Rate of Banque Paribas on January 1 of such
calendar year; provided that if the relevant financial institution ceases to
exist or ceases to publish a prime rate or comparable base rate, Lender shall
select another domestic financial institution to replace it for purposes of
determining the Applicable Loan Rate.
"Asset Purchase Agreement" shall mean the Asset Purchase Agreement,
dated as of February 1, 1996, between Chesapeake Securities, Inc. and Noble
Broadcast of San Diego, Inc., as in effect on, the Initial Borrowing Date, and
as the same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"Asset Sale" shall mean any sale, transfer or other disposition by
Parent or any of its Subsidiaries to any Person other than the Borrower or any
wholly-owned Subsidiary of
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the Borrower of any asset (including, without limitation, any capital stock,
limited liability company interests, partnership interests or other securities
of another Person but excluding any sale, transfer or other disposition by
Parent or any of its Subsidiaries of its capital stock, limited liability
interests, partnership interests or other securities issued by it) of Parent or
any such Subsidiary (other than any sale, transfer or other disposition of Cash
Equivalents).
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the city of New York a legal holiday or a day on which banking institutions
are authorized by law or other governmental actions to close.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, and including
any amounts received under any noncompete or similar agreement or as
disbursement or withdrawals from any escrow or similar account established in
connection with any such Asset Sale, but, in each such case, only as and when so
received) received by Parent and/or any of its Subsidiaries from such Asset
Sale.
"Change of Ownership Event" shall mean (i) any of (y) so long as John
T. Lynch is employed by Parent, John T. Lynch, together with his heirs,
executors, administrators, testamentary trustees, legatees or beneficiaries and
any trust, the beneficiaries of which, or a corporation or partnership, the sole
stockholder or partner of which include only himself, his spouse, parents,
siblings or direct lineal descendants, or (z) so long as Frank A. DeFrancesco is
employed by Parent, Frank A. DeFrancesco, together with his heirs, executors,
administrators, testamentary trustees, legatees or beneficiaries and any trust,
the beneficiaries of which, or a corporation or partnership, the sole
stockholder or partner of which include only himself, his spouse, parents,
siblings or direct lineal descendants, shall cease to own on a fully diluted
basis the percentage of the economic and voting interest in Parent's capital
stock as such shareholders held on the Initial Borrowing Date after giving
effect to the Transaction, (ii) Parent shall cease to own directly 100% on a
fully diluted basis of the economic and voting interest in the Borrower's
capital stock without giving effect to any Warrants of Borrower, (iii) the
Borrower shall cease to own directly 100% on a fully diluted basis (or at least
70% in the case of Nova) of the economic and voting interest in the capital
stock of any Subsidiary of the Borrower or (iv) any "Triggering Event," or any
similar provision or event under the Jacor Transaction Documents, shall occur.
"Chase Indebtedness" shall mean the indebtedness and obligations of
Borrower under the Credit Agreement among Parent, Borrower, Various Lending
Institutions, CIBC, Inc. and
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First Union National Bank of North Carolina, as co-agents and the Chase
Manhattan Bank, N.A., as agent dated as of August 18, 1995, as amended from time
to time.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in each of the
Security Documents.
"Commitment" shall mean Lender's Term Loan Commitment and Revolving
Loan Commitment.
"Conseco" shall mean Conseco, Inc., an Indiana corporation.
"Credit Documents" shall mean this Agreement, the Notes, the Guaranties
and each Security Document.
"Credit Event" means the making of any Loan under this Agreement.
"Credit Party" shall mean each Parent, the Borrower, each Subsidiary
Guarantor, Nobro and RDP. "Credit Parties" shall refer collectively to each
Credit Party taken together as a whole.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Deferred Repayment Amount" shall mean, with respect to any
Reimbursement Event, the aggregate amount that (i) would have been applied to
repay the Loan pursuant to Section 2.2 had not the Borrower delivered a
Reinvestment Notice and (ii) is not so applied to repay the Loans as a result of
being designated as an Anticipated Reinvestment Amount in such Reinvestment
Notice so delivered.
"Disclosure Letter" means the disclosure letter of even date from the
Credit Parties to Jacor delivered to Jacor in connection with the Jacor
Transaction.
"Domestic Subsidiary" shall mean each Subsidiary of Parent which is not
a Foreign Subsidiary.
"Effective Date" shall have the meaning provided in Section 9.8.
"Event of Default" shall have the meaning provided in Section 7.
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"Existing Indebtedness" means a non-interest bearing promissory note of
Noble Broadcast of St. Louis, Inc. in the face amount of $500,000 with a nominal
unpaid balance of $250,000, given as part of the purchase price for an
AM/FM combo in St. Louis, balance due on May 13, 1996. The note is subject to an
offset against a portion of the note for certain property taxes chargeable to
the seller's account in the purchase transaction.
"Existing Indebtedness Agreements" means the note and related documents
evidencing the Existing Indebtedness.
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the Term Loan Facility or the Revolving Loan Facility.
"Failed TBA Payments" means an Event of Default under Section 16.1.1 of
the Time Brokerage Agreement for non-payment of amounts owing to the Licensee
(as defined in the Time Brokerage Agreement).
"FCC" shall mean the Federal Communications Commission, or any
successor thereto.
"Final Maturity Date" shall mean February 1, 2002.
"Foreign Subsidiary" shall mean each Subsidiary of Parent that is
incorporated under the laws of any jurisdiction other than the United States of
America, any State thereof, or any territory thereof.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Section 6,
including defined terms as used therein, are subject (to the extent provided
therein) to Section 9.5(a).
"Guaranties " shall mean the guaranty provided by Parent pursuant to
Section 10 of this Agreement, the Subsidiary Guaranty, the Nobro Guaranty and
the RDP Guaranty.
"Guarantor" shall mean Parent, each Subsidiary Guarantor, Nobro and
RDP.
"Immaterial Subsidiaries" shall mean and include each of (i) Noble
Broadcast of Ballybunion, Inc., a California corporation, (ii) Noble Broadcast
of Connecticut, Inc., a California corporation, (iii) Noble Broadcast of Kansas
City, Inc., a California corporation and (iv) Noble Broadcast of Houston, Inc.,
a Delaware corporation.
"Initial Borrowing Date" shall mean the date occurring on or after the
Effective Date on which the initial Credit Event hereunder occurs.
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"Insurance Proceeds" shall mean, with respect to any Recovery Event,
the aggregate cash payments received by Parent, the Borrower or any of their
respective Subsidiaries from such Recovery Event (including any cash payments
received in respect of any condemnation award or the exercise of any power of
eminent domain).
"Intercompany Loans" means loans between and among the Credit Parties.
"Intercompany Note" shall mean promissory notes evidencing Intercompany
Loans.
"Jacor" means Jacor Communications, Inc., an Ohio corporation.
"Jacor Transaction Documents" mean (a) The Stock Purchase and Warrant
Redemption Agreement among Jacor Communications, Inc., Prudential Venture
Partners II, L.P., Northeast Ventures II, John T. Lynch, Frank A. DeFrancesco,
Thomas R. Jimenez, William R. Arbenz, CIHC Insurance, Inc., Bankers & Life
Holding Corporation and Parent ("Stock Purchase Agreement"); (b) The Investment
Agreement between Jacor Communications, Inc. and Parent; (c) The Stock Escrow
and Security Agreement between Jacor Communications, Inc. and all stockholders
of Parent; (d) The Asset Purchase Agreement; (e) the Time Brokerage Agreements
between Jacor Communications, Inc. and Noble Broadcast of St. Louis, Inc. and
Noble Broadcast of Toledo, Inc., respectively; and (f) all Ancillary Documents
(as defined in the Stock Purchase Agreement).
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall have the meaning provided in the first paragraph of this
Agreement.
"License Subsidiary" shall mean Noble Broadcast Licenses, Inc., a
Delaware corporation and a special purpose Wholly-Owned Subsidiary of the
Borrower formed for the purpose of holding the FCC Licenses.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each and every loan made by the Lender hereunder,
including Term Loan and Revolving Loans.
"Lynch" shall mean John T. Lynch, Chairman and Chief Executive Officer
of Parent.
"Margin Stock" shall have the meaning provided in Regulation U.
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"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities, condition (financial or otherwise) or
prospects of Parent, Parent and its Subsidiaries taken as a whole, or of the
Borrower or of the Borrower and its Subsidiaries taken as a whole.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net of (a) reasonable cash expenses of sale
(including, without limitation, payment of principal, premium and interest on
Indebtedness and other liabilities other than the Loans required to be repaid as
a result of such Asset Sale) and (b) incremental income taxes paid or payable as
a result thereof.
"Net Insurance Proceeds" shall mean the Insurance Proceeds received by
Parent, the Borrower and/or any of their respective Subsidiaries with respect to
any Recovery Event net of reasonable costs and expenses associated therewith
(including payment of principal, premium and interest of Indebtedness other than
Loans, required to be, and which is, repaid under the terms thereof as a result
of such Recovery Event), and incremental taxes paid or payable as a result
thereof.
"Nobro" shall mean Nobro, S.A. de C.V., a corporation organized and
existing under the laws of the Republic of Mexico.
"Nobro Guaranty" shall have the meaning provided in Section 3.6.
"Note" shall mean each of the Term Note and the Revolving Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.3.
"Notice Office" shall mean the office of the Lender at Jacor
Communications, Inc., 1300 PNC Center, 201 East Fifth Street, Cincinnati, Ohio
45202, ATTN: Chief Financial Officer, or such other office as the Lender may
designate to the Borrower and the Lender from time to time.
"Nova" shall mean Nova Marketing, Inc., a California corporation.
"Obligations" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to the
Lender pursuant to the terms of this Agreement or any other Credit Document.
"Operating Subsidiaries" shall mean each Subsidiary Guarantor other
than the License Subsidiary.
"Parent" shall have the meaning provided in the first paragraph of this
Agreement.
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"Payment Office" shall mean the office of the Lender at Jacor
Communications, Inc., 1300 PNC Center, 201 East Fifth Street, Cincinnati, Ohio
45202, ATTN: Chief Financial Officer, or such other office as the Lender may
designate to the Borrower and the Lender from time to time.
"Permitted Encumbrances" shall mean (a) with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Lender in its reasonable discretion and (b)
any liens, security interests or other encumbrances granted to either Lender (as
security for the Obligations) or to Borrower (as security for the Intercompany
Loans).
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Pledge Agreement" shall have the meaning provided in Section 3.7(a).
"Pledge Agreement Collateral" shall mean all "Collateral" under and as
defined in the Pledge Agreement.
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"Purchase Price Offset" means a monetary offset Jacor makes against the
Stock Purchase Price (as defined in the Stock Purchase Agreement) for any
damages resulting from a breach of the Stock Purchase Agreement.
"RDP" shall mean Radiodifusora del Pacifico, S.A., a Mexican
corporation. "RDP Acknowledgment" shall have the meaning provided in Section
3.6. "RDP Guaranty" shall have the meaning provided in Section 3.6.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Parent or any of its
Subsidiaries of any Insurance Proceeds payable (i) by reason of theft, physical
destruction or damage or any other similar event (including as a result of any
condemnation proceeding or the exercise of the power of eminent domain) with
respect to any properties or assets of Parent or any of its Subsidiaries, (ii)
by reason of any condemnation, taking, seizing or similar event with respect to
any properties or assets of Parent or any of its Subsidiaries and (iii) under
any policy of insurance required to be maintained under Section 5.2.
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"Regulation A" shall mean Regulation A of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing margin requirements.
"Reinvestment Assets" shall mean, with respect to any Asset Sale or the
receipt of any Net Insurance Proceeds from a Recovery Event, assets to be
employed in, and/or the capital stock of any Person engaged in, the types of
businesses currently conducted by Borrower and the Subsidiaries.
"Reinvestment Event" shall mean the consummation of any Asset Sale or
the receipt of any Net Insurance Proceeds from a Recovery Event, in each case to
the extent the Borrower has delivered, in connection therewith, a Reinvestment
Notice as permitted by Section 2.2(a)(iii) or 2.2(a)(iv), as the case may be.
"Reinvestment Notice" shall mean a written notice signed by the
president or any vice-president of the Borrower stating that the Borrower, in
good faith, intends and expects to use (directly or through its Subsidiaries)
within a period of not in excess of 120 days all or a specified portion of the
Net Cash Proceeds of an Asset Sale or the Net Insurance Proceeds of a Recovery
Event, as the case may be, to restore, purchase, construct or other-wise acquire
Reinvestment Assets.
"Reinvestment Prepayment Amount" shall mean with respect to any
Reinvestment Event, the Deferred Repayment Amount relating thereto less any
amount expended by any Affected Company prior to the Reinvestment Prepayment
Date applicable thereto in furtherance of the restoration, purchase,
construction or other acquisition of Reinvestment Assets.
"Reinvestment Prepayment Date" shall mean, with respect to any
Reinvestment Event, the earliest of (i) the date, if any, upon which the Lender
shall have delivered a written termination notice to the Borrower, provided that
such-notice may only be given while an Event of Default exists, (ii) the date
occurring 120 days after such Reinvestment Event and (iii) the date on which the
relevant Affected Company shall have determined not to, or shall have otherwise
ceased to, proceed with the restoration, purchase, construction or other
acquisition of Reinvestment Assets in connection with such Reinvestment Event.
"Revolving Loan" shall have the meaning provided in Section 1.1(b).
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"Revolving Loan Commitment" shall mean the commitment of the Lender to
make Revolving Loans as set forth in Section 1.1.
"Revolving Loan Facility" shall mean the Facility evidenced by the
Total Revolving Loan Commitment.
"Revolving Note" shall have the meaning provided in Section 1.5(a).
"Security Agreement" shall have the meaning provided in Section 3.7(b).
"Security Agreement Collateral" shall mean all "Collateral" under and
as defined in the Security Agreement.
"Security Documents" shall mean and include the Pledge Agreement, the
Security Agreement, each Mortgage and, after the execution and delivery thereof,
each Additional Mortgage.
"Stations" shall mean, at any time, collectively, all radio stations
currently owned by all Credit Parties, including without limitation, WVKS(FM),
KMJM(FM), KATZ(AM), KNJZ-FM, KBCO(AM), KBCO-FM, KHOW(AM), KHIH(FM), WSPD(AM) and
WLQR(FM).
"Stock Purchase Agreement" shall have the meaning set forth for it in
the definition of Jacor Transaction Documents.
"Subordinated Notes" shall mean the outstanding 8.108% Subordinated
Notes due August 2002, issued by Parent in favor of Subsidiaries of Conseco.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association (including
business trusts), joint venture or other entity in which such Person directly or
indirectly through Subsidiaries, has more than a 50% voting or equity interest
at the time.
"Subsidiary Guarantor" shall mean each of (i) each Subsidiary of the
Borrower existing on the Initial Borrowing Date other than the Immaterial
Subsidiaries and (h) such other Subsidiaries of the Borrower that become a
Subsidiary Guarantor by executing and delivering to the Lender a counterpart of
the Subsidiary Guaranty.
"Subsidiary Guaranty" shall mean the Subsidiary Guaranty of even date
from the Subsidiaries to the Lender, as from time to time amended or
supplemented.
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"Term Loan" shall have the meaning provided in Section 1.1(a).
"Term Loan Facility" shall mean the Facility evidenced by the Term Loan
Commitment.
"Term Note" shall have the meaning provided in Section 1.5(a).
"Time Brokerage Agreement" means, collectively, the following
agreements: (i) the Time Brokerage Agreement of even date by and among the
License Subsidiary, Noble Broadcast of St. Louis, Inc., Jacor Broadcasting of
St. Louis, Inc. and Jacor, as amended or supplemented from time to time; (ii)
Time Brokerage Agreement of even date by and among Noble Broadcast of Toledo,
Inc., License Subsidiary, Jacor Broadcasting Corporation and Jacor, as amended
or supplemented from time to time; and (iii) Time Brokerage Agreement of even
date by and among Noble Broadcast of San Diego, Inc., Sports Radio, Inc. and
Chesapeake Securities, Inc., as amended or supplemented from time to time.
"Total Commitment" shall mean the sum of the Total Term Loan Commitment
and the Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean the Revolving Loan
Commitment of the Lender.
"Total Term Loan Commitment" shall mean the Term Loan Commitment of the
Lender.
"Transaction" shall mean, collectively, (i) the consummation of the
documents contemplated by the Jacor Transactions Documents, (ii) the
consummation of the transactions contemplated by this Agreement and (iii) the
occurrence of any Credit Event on the Initial Borrowing Date.
"Transaction Documents" shall mean, collectively, (i) the Jacor
Transaction Documents and (ii) the Credit Documents.
"UCC" shall mean the Uniform Commercial Code as in effect in the State
of New York.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile device, telegraph or cable.
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SECTION 9 Miscellaneous.
9.1 Payment of Expenses, etc. The Borrower agrees to: (a) pay
all reasonable out-of-pocket costs and expenses of the Lender in connection with
the enforcement of the Credit Documents and the documents and instruments
referred to therein and, after an Event of Default shall have occurred and be
continuing, the protection of the rights of the Lender thereunder (including,
without limitation, the reasonable fees and disbursements of counsel for the
Lender); (b) pay and hold the Lender harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save the Lender harmless from and against any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to Lender) to pay such taxes; and (c) indemnify the Lender,
its officers, directors, employees, representatives and agents from and hold
each of them harmless against any and all losses, liabilities, claims, damages
or expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, (i) any investigation, litigation or other
proceeding (whether or not the Lender is a party thereto) related to the
entering into and/or performance of this Agreement or any other Transaction
Document or the use of the proceeds of any Loans hereunder or the Transaction or
the consummation of any other transactions contemplated in any Credit Document
(but excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified), (ii) any settlement entered into in connection with
the foregoing to the extent such settlement has been consented to by Parent, the
Borrower or any of their respective Subsidiaries, or (iii) the actual or alleged
presence, generation or release of Hazardous Materials on or from, or the
transportation of Hazardous Materials to or from, any Real Property owned or
operated at any time by Parent, the Borrower or any of their respective
Subsidiaries, the non-compliance of any such Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including applicable
permits thereunder) applicable to any such Real Property, or any Environmental
Claim with respect to Parent, the Borrower or any of their respective
Subsidiaries or any such Real Property, in each case including, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation,
Environmental Claim or any of such Credit Party's acts, omissions, business,
operations or Real Property, or other proceeding (but excluding any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the indemnified person). To the extent
that the undertaking to indemnify and hold harmless set forth in this Section
9.1 may be unenforceable because it is violative of any law or public policy as
determined by a final judgment of a court of competent jurisdiction, the
Borrower shall make the maximum contribution to the payment and satisfaction of
each of the liabilities giving rise to claims under the indemnification
provisions of this Section 9.1 which is permissible under applicable law.
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9.2 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile transmission or cable communication)
and mailed, telegraphed, telexed, facsimile transmitted, cabled or delivered, if
to any Credit Party, at the address specified opposite its signature below or in
the other relevant Credit Documents, as the case may be; if to Lender, at its
Notice Address; or, at such other address as shall be designated by any party in
a written notice to the other parties hereto. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied or cabled or
sent by overnight courier, and shall be effective when received.
9.3 Benefit of Agreement.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto; provided, that neither Parent nor the Borrower may assign or
transfer any of its rights or obligations hereunder without the prior written
consent of the Lender. Lender may make a collateral assignment of its right,
title and interest in this Agreement and all Credit Documents.
9.4 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Lender in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between any Credit
Party and the Lender shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Credit Document preclude any other or further exercise thereof or the exercise
of any other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Lender would otherwise have. No notice to or demand
on any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Lender to any other or further action in any
circumstances without notice or demand.
9.5 Calculations; Computations.
(a) The financial statements to be furnished to the Lender
pursuant hereto shall be made and prepared in accordance with GAAP consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrower to the Lender).
(b) All computations of interest hereunder shall be made on
the actual number of days elapsed over a year of 360 days.
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9.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS
OTHERWISE PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF OHIO OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF OHIO, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, PARENT AND THE BORROWER EACH HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH PARENT AND THE
BORROWER HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
JURISDICTION OVER PARENT OR THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT
LACKS JURISDICTION OVER PARENT OR THE BORROWER. EACH PARENT AND THE BORROWER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO PARENT OR THE BORROWER, AS THE
CASE MAY BE, AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 9.2, SUCH SERVICE TO
BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. EACH PARENT AND THE
BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE
OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT
THE RIGHT OF THE LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED
AGAINST PARENT OR THE BORROWER IN ANY OTHER JURISDICTION.
(c) EACH PARENT AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (b) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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9.7 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A complete set of
counterparts executed by all the parties hereto shall be lodged with Parent, the
Borrower and the Lender.
9.8 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which each Parent, the Borrower and the Lender
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered the same to the Lender at the Notice Office.
9.9 Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
9.10 Amendment or Waiver. Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Party thereto.
9.11 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
9.12 Exclusion of Denver Stations. Notwithstanding anything to
the contrary in this Agreement, including without limitation Section 5.1 hereof,
any rights of Lender to financial information, books, records and inspections
hereunder shall exclude proprietary information relating to the operations of
the Stations licensed to the Denver, Colorado market (the "Denver Stations") to
the extent that the rules, policies, conditions or orders of the FCC in effect
at such time would require the operation of the Denver Stations to be separate
from, in whole or in part, from radio stations of Jacor subsidiaries licensed to
the Denver, Colorado market.
SECTION 10 Guaranty.
10.1 The Guaranty. In order to induce the Lender to enter into
this Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by Parent from the proceeds of the Loans, Parent hereby
agrees with the Lender as follows: Parent hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment and performance when due, upon maturity, acceleration or otherwise, of
any and all indebtedness of the Borrower to the
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Lender under this Agreement and the other Credit Documents. If any or all of the
indebtedness of the Borrower to the Lender becomes due and payable hereunder or
under any other Credit Document, Parent unconditionally promises to pay such
indebtedness to the Lender, or order, on demand, together with any and all
expenses which may be incurred by the Lender in collecting any of the
indebtedness. The word "indebtedness" is used in this Section 10 in its most
comprehensive sense and includes any and all advances, debts, obligations and
liabilities of the Borrower arising in connection with this Agreement or any
other Credit Documents, in each case, heretofore, now, or hereafter made,
incurred or created, whether voluntarily or involuntarily, absolute or
contingent, liquidated or unliquidated, determined or undetermined, whether or
not such indebtedness is from time to time reduced, or extinguished and
thereafter increased or incurred, whether the Borrower may be liable
individually or jointly with others, whether or not recovery upon such
indebtedness may be or hereafter become barred by any statute of limitations,
and whether or not such indebtedness may be or hereafter become otherwise
unenforceable. This is a guaranty of payment and not of collection.
10.2 Bankruptcy. Additionally, Parent unconditionally and
irrevocably guarantees the payment of any and all indebtedness of the Borrower
to the Lender whether or not due or payable by the Borrower upon the occurrence
of any of the events specified in Section 7.1(b), and unconditionally and
irrevocably promises to pay such indebtedness to the Lender, or order, on
demand, in lawful money of the United States.
10.3 Nature of Liability. The liability of Parent hereunder is
exclusive and independent of any security for or other guaranty of the
indebtedness of the Borrower whether executed by Parent or by any other party,
and the liability of Parent hereunder is not affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party, or
(b) any other continuing or other guaranty, undertaking or maximum liability of
a guarantor or of any other party as to the indebtedness of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or (d)
any dissolution, termination or increase, decrease or change in personnel of the
Borrower, or (e) any payment made to the Lender on the indebtedness which the
Lender repays to the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
Parent waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding.
10.4 Independent Obligation. The obligations of Parent
hereunder are independent of the obligations of any other guarantor, any other
party or the Borrower, and a separate action or actions may be brought and
prosecuted against Parent whether or not action is brought against any other
guarantor, any other party or the Borrower and whether or not any other
guarantor, any other party or the Borrower be joined in any such action or
actions. Parent waives, to the fullest extent permitted by law, the benefit of
any statute of limitations affecting its liability hereunder or the enforcement
thereof. Any
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payment by the Borrower or other circumstance which operates to toll any statute
of limitations as to the Borrower shall operate to toll the statute of
limitations as to Parent.
10.5 Authorization. Parent authorizes the Lender without notice
or demand (except as shall be required by applicable statute and cannot be
waived), and without affecting or impairing its liability hereunder, from time
to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or alter,
any of the indebtedness (including any increase or decrease in the rate of
interest thereon), any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
indebtedness as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the indebtedness
and sell, exchange, release, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the indebtedness or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower or others or otherwise act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;
(e) settle or compromise any of the indebtedness, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
the Borrower to its creditors other than the Lender;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Lender regardless of what
liability or liabilities of Parent or the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements referred
to herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of Parent from its liabilities under this Guaranty.
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10.6 Reliance. It is not necessary for the Lender to inquire
into the capacity or powers of the Borrower or its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act on their behalf, and
any indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
10.7 Subordination. Any indebtedness of the Borrower now or
hereafter held by Parent is hereby subordinated to the indebtedness of the
Borrower to the Lender; and such indebtedness of the Borrower to Parent, if the
Lender, after an Event of Default has occurred, so requests shall be collected,
enforced and received by Parent as trustee for the Lender and be paid over to
the Lender on account of the indebtedness of the Borrower to the Lender, but
without affecting or impairing in any manner the liability of Parent under the
other provisions of this guaranty. Prior to the transfer by Parent of any note
or negotiable instrument evidencing any indebtedness of the Borrower to Parent,
Parent shall mark such note or negotiable instrument with a legend that the same
is subject to this subordination. Without limiting the generality of the
foregoing, Parent hereby agrees with the Lender that it will not exercise any
right of subrogation which it may at any time otherwise have as a result of this
Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or
otherwise) or any contractual, statutory or common law right of reimbursement,
contribution or indemnity which it may at any time otherwise have as a result of
this Guaranty, until all indebtedness guaranteed hereby has been irrevocably
paid in full in cash.
10.8 Waiver.
(a) Parent waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Lender to (i) proceed
against the Borrower, any other guarantor or any other party; (ii) proceed
against or exhaust any security held from the Borrower; or (iii) pursue any
other remedy in the Lender's power whatsoever. Parent waives any defense based
on or arising out of any defense of the Borrower, any other guarantor or any
other party other than payment in full of the indebtedness, including without
limitation, any defense based on or arising out of the disability of the
Borrower, any other guarantor or any other party or the unenforceability of the
indebtedness or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the indebtedness.
The Lender may, at its election, foreclose on any security held by the Lender by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Lender may have
against the Borrower, or any security, without affecting or impairing in any way
the liability of Parent hereunder except to the extent the indebtedness has been
paid in full. Parent waives any defense arising out of any such election by the
Lender, even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of Parent against the
Borrower or any security. Parent waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of
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<PAGE> 35
acceptance of this Guaranty, and notices of the existence, creation or incurring
of new or additional indebtedness. Parent assumes all responsibility for being
and keeping itself informed of the Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
indebtedness and the nature, scope and extent of the risks which Parent assumes
and incurs hereunder, and agrees that the Lender shall have no duty to advise
Parent of information known to it regarding such circumstances or risks.
(b) This Parent understands that the indebtedness guaranteed
hereby arises under successive transactions continuing, compromising, extending,
increasing, modifying, releasing, or renewing such guaranteed indebtedness,
changing the interest rate, payment terms, or other terms and conditions
thereof, or creating new or additional indebtedness guaranteed hereby after
prior indebtedness guaranteed hereby have been satisfied in whole or in part. To
the maximum extent permitted by law, Parent hereby waives and agrees not to
assert any right it has under California Civil Code Section 2815 to revoke this
Agreement as to future indebtedness and any and all rights arising under
California Civil Code Section 2814. If such a revocation is effective
notwithstanding the foregoing waiver, Parent acknowledges and agrees that (i) no
such revocation shall be effective until written notice thereof has been
received by Lender, (ii) no such revocation shall apply to any indebtedness
guaranteed hereby in existence on such date (including, any subsequent
continuation, extension, or renewal thereof, or change in the interest rate,
payment terms, or other terms and conditions thereof), (iii) no such revocation
shall apply to any indebtedness guaranteed hereby made or created after such
date to the extent made or created pursuant to a legally binding commitment of
Lender in existence on the date of such revocation, (iv) no payment by Parent,
Borrower, or from any other source, prior to the date of such revocation shall
reduce the maximum obligation of Parent hereunder, and (v) any payment by
Borrower or from any source other than Parent, subsequent to the date of such
revocation, shall first be applied to that portion of the indebtedness
guaranteed hereby as to which the revocation is effective and which are not,
therefore, guaranteed hereunder, and to the extent so applied shall not reduce
the maximum obligation of Parent hereunder.
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<PAGE> 36
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Agreement to be duly executed and delivered by its respective authorized
officer as of the date first above written.
ADDRESS:
4891 Pacific Highway NOBLE BROADCAST GROUP, INC.
San Diego, California 92110
Telephone No.: (619) 291-9510 By: ____________________________
Facsimile No.: (619) 294-9393 Name: ____________________________
Attention: John T. Lynch
Title: ____________________________
4891 Pacific Highway NOBLE BROADCAST HOLDINGS, INC.
San Diego, California 92110
Telephone No.: (619) 291-9510 By: ____________________________
Facsimile No.: (619) 294-9393 Name: ____________________________
Attention: John T. Lynch
Title: ____________________________
1300 PNC Center BROADCAST FINANCE, INC.
201 East Fifth Street
Cincinnati, Ohio 45202
Telephone No.: (513) 621-1300 By: _____________________________
Facsimile No.: (513) 621-0090
Attention: Chief Financial Officer Name: _____________________________
Title: _____________________________
33
<PAGE> 1
SUBSIDIARY GUARANTY
GUARANTY, dated as of February 20, 1996 (as amended, modified or
supplemented from time to time, the "Guaranty"), made by each of the undersigned
(each a "Guarantor" and collectively, the "Guarantors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement (as
defined below) shall be used herein as therein defined.
W I T N E S S E T H
WHEREAS, Noble Broadcast Group, Inc. ("Parent"), Noble Broadcast
Holdings, Inc. (the "Borrower") and Broadcast Finance, Inc., an Ohio corporation
(the "Lender"), have entered into a Credit Agreement of even date (as amended,
modified or supplemented from time to time, the "Credit Agreement), providing
for the making of Loans to the Borrower as contemplated therein;
WHEREAS, each Guarantor is a wholly-owned direct or indirect Subsidiary
of the Borrower;
WHEREAS, it is a condition to the making of Loans under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty;
and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower under the Credit Agreement and, accordingly, desires to
execute this Guaranty in order to satisfy the conditions described in the
preceding paragraph and to induce the Lender to make Loans to the Borrower;
NOW, THEREFORE. in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Lender and hereby covenants and agrees with the Lender as
follows:
1. Each Guarantor, jointly and severally, irrevocably and
unconditionally guarantees to the Lender the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of and interest on the Notes issued by, and the Loans made to, the
Borrower under the Credit Agreement and (y) all other obligations (including
obligations which, but for any automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities owing by the Borrower to the
Lender (including, without limitation, indemnities, Fees and interest thereon)
now existing or hereafter incurred under, arising out of or in connection with
the Credit Agreement or any other Credit Document and the due performance and
compliance with the terms, conditions and agreements contained in the Credit
Documents by the Borrower (all such principal, interest, liabilities and
obligations being herein collectively called the "Credit Agreement Obligations"
or the "Guaranteed Obligations"); provided, that the maximum amount
payable by each Guarantor hereunder shall at no time exceed the Maximum Amount
(as hereinafter defined) of such Guarantor. As used herein, "Maximum
<PAGE> 2
Amount" of each Guarantor means an amount equal to 95% of the amount by which
(i) the present fair saleable value of such Guarantor's assets exceeds (ii) the
total liabilities of such Guarantor (including the maximum amount reasonably
expected to come due in respect of contingent liabilities, other than contingent
liabilities of such Guarantor hereunder) in each case determined on the Initial
Borrowing Date or on the day any demand is made under this Guaranty, whichever
date results in the higher Maximum Amount. Subject to the proviso in the second
preceding sentence, each Guarantor understands, agrees and confirms that the
Lender may enforce this Guaranty up to the full amount of the Guaranteed
Obligations against any security for the Guaranteed Obligations, or under any
other guaranty covering all or a portion of the Guaranteed Obligations. This
Guaranty shall constitute a guaranty of payment and not of collection. All
payments by each Guarantor under this Guaranty shall be made on the same basis
as payments by the Borrower under the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally, unconditionally
and irrevocably, guarantees the payment of any and all Guaranteed Obligations of
the Borrower to the Lender whether or not due or payable by the Borrower upon
the occurrence of the bankruptcy or insolvency of the Borrower and
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Lender, or order, on demand, in lawful money of
the United States; provided, however, that the maximum amount payable by each
Guarantor pursuant to this Guaranty shall at no time exceed the Maximum Amount
of such Guarantor.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (i) any direction as to application of
payment by the Borrower or by any other party, (ii) any other continuing or
other guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the indebtedness of the Borrower, (iii) any payment on or in
reduction of any such other guaranty or undertaking, (iv) any dissolution,
termination or increase, decrease or change in personnel by the Borrower or (v)
any payment made to the Lender on the indebtedness which the Lender repays the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement.
moratorium or other debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding.
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other Guarantor of the Borrower or the
Borrower, and a separate action or actions may be brought and prosecuted against
each Guarantor whether or not action is brought against any other Guarantor, any
other guarantor of the Borrower or the Borrower and whether or not any other
Guarantor, any other guarantor of the Borrower or the Borrower be joined in any
such action or actions. Each Guarantor waives, to the fullest extent permitted
by law, the benefit of any statute of limitations
2
<PAGE> 3
affecting its liability hereunder or the enforcement thereof. Any payment by the
Borrower or other circumstance which operates to toll any statute of limitations
as to the Borrower shall operate to toll the statute of limitations as to each
Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the Lender
against, and any other notice to, any party liable thereon (including such
Guarantor or any other Guarantor of the Borrower).
6. The Lender may at any time and from time to time without the consent
of, or notice to, any Guarantor, without incurring responsibility to such
Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payments of, and/or change or
extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to the
Guaranteed Obligations as so changed, extended, renewed or altered;
(ii) sell, exchange, release, surrender, realize upon or otherwise deal
with in any manner and in any order any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(iii) exercise or refrain from exercising any rights against the
Borrower, any Guarantor, any other guarantor of the Borrower or others or
otherwise act or refrain from acting;
(iv) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and may subordinate the
payment of all or any part thereof to the payment of any liability (whether due
or not) of the Borrower to creditors of the Borrower;
(v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Lender regardless of what
liabilities of the Borrower remain unpaid;
(vi) consent to or waive any breach of, or any act, omission or default
under, any of the Credit Documents or any of the instruments or agreements
referred to therein, or
3
<PAGE> 4
otherwise amend, modify or supplement any of the Credit Documents or any of such
other instruments or agreements; and/or
(vii) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
8. (a) This Guaranty is a continuing one and all liabilities to which
it applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. This Guaranty includes Guaranteed
Obligations arising under successive transactions continuing, compromising,
extending, increasing, modifying, releasing, or renewing the Guaranteed
Obligations, changing the interest rate, payment terms, or other terms and
conditions after prior Guaranteed Obligations have been satisfied in whole or in
part. To the maximum extent permitted by law, Guarantor hereby waives and agrees
not to assert any right it has under California Civil Code Section 2815 to
revoke this Guaranty as to future indebtedness and any and all rights arising
under California Civil Code Section 2814. If such revocation is effective and
notwithstanding the foregoing waiver, Guarantor acknowledges and agrees that (i)
no such revocation shall be effective until written notice thereof has been
received by Lender, (ii) no such revocation shall apply to any Guaranteed
Obligations in existence on such date (including, any subsequent continuation,
extension, or renewal thereof, or change in the interest rate, payment terms or
other terms and conditions thereof), (iii) no such revocation shall apply to any
Guaranteed Obligations made or created after such date to the extent made or
created pursuant to a legally binding commitment of Lender in existence on such
date of such revocation, (iv) no payment by Guarantor, Borrower, or from any
other source, prior to the date of such revocation shall reduce the maximum
obligation of Guarantor hereunder, and (v) any payment by Borrower or from any
source other than Guarantor, subsequent to the date of such revocation, shall
first be applied to that portion of the Guaranteed Obligations as to which the
revocation is effective and which are not, therefore, guaranteed hereunder, and
to the extent so applied shall not reduce the maximum obligation of Guarantor
hereunder.
(b) No failure or delay on the part of the Lender in exercising any
right, power or privilege hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein expressly specified
are cumulative and not exclusive of any rights or remedies which the Lender
would otherwise have. No notice to or demand on any Guarantor in any case
4
<PAGE> 5
shall entitle such Guarantor to any other further notice or demand in similar or
other circumstances or constitute a waiver of the rights of the Lender to any
other or further action in any circumstances without notice or demand. It is not
necessary for the Lender to inquire into the capacity or powers of the Borrower
or any of its Subsidiaries or the officers, directors, partners or agents acting
or purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Lender; and such indebtedness of the Borrower to any Guarantor, if the Lender,
after an Event of Default has occurred, so requests, shall be collected,
enforced and received by such Guarantor as trustee for the Lender and be paid
over to the Lender on account of the indebtedness of the Borrower to the Lender,
but without affecting or impairing in any manner the liability of such Guarantor
under the other provisions of this Guaranty. Prior to the transfer by any
Guarantor of any note or negotiable instrument evidencing any indebtedness of
the Borrower to such Guarantor, such Guarantor shall mark such note or
negotiable instrument with a legend that the same is subject to this
subordination.
10. (a) Each Guarantor waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Lender to: (i) proceed
against the Borrower, any other Guarantor, any other guarantor of the Borrower
or any other party; (ii) proceed against or exhaust any security held from the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party; or (iii) pursue any other remedy in the Lender's power whatsoever. Each
Guarantor waives any defense based on or arising out of any defense of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party other than payment in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of the
Borrower, any other Guarantor, any other guarantor of the Borrower or any other
party, or the unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the Borrower
other than payment in full of the Guaranteed Obligations. The Lender may, at its
election, foreclose on any security held by the Lender or the other Lender by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Lender may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor waives
any defense arising out of any such election by the Lender, even though such
election operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of such Guarantor against the Borrower or
any other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest,
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<PAGE> 6
notices of dishonor, notices of acceptance of this Guaranty, and notices of the
existence, creation or incurring of new or additional indebtedness. Each
Guarantor assumes all responsibility for being and keeping itself informed of
the Borrower's financial condition and assets, and of all other circumstances
bearing upon the risk of nonpayment of the Guaranteed Obligations and the
nature, scope and extent of the risks which such Guarantor assumes and incurs
hereunder, and agrees that the Lender shall have no duty to advise any Guarantor
of information known to them regarding such circumstances or risks.
(c) Each Guarantor hereby waives all rights of subrogation which it may
at any time otherwise have as a result of this Guaranty (whether contractual,
under Section 509 of the Bankruptcy Code, or otherwise) to the claims of the
Lender against the Borrower or any other guaranty of the Guaranteed Obligations
(the "Other Parties") and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Party which it may at
any time otherwise have as a result of this Guaranty. Each Guarantor hereby
further waives any right to enforce any other remedy which the Lender now have
or may hereafter have against any Other Party, and any benefit of, and any right
to participate in, any security or collateral given to or for the benefit of the
Lender to secure payment of the Guaranteed Obligations. Each Guarantor also
waives all claims (as such term is defined in the Bankruptcy Code) it may at any
time otherwise have against any Other Party arising from any transaction
whatsoever, including, without limitation, its right to assert or enforce any
such claims.
(d) EACH GUARANTOR UNDERSTANDS THAT IF ALL OR ANY PART OF THE
GUARANTEED OBLIGATIONS IS SECURED BY REAL PROPERTY LOCATED IN THE STATE OF
CALIFORNIA, SUCH GUARANTOR SHALL BE LIABLE FOR THE FULL AMOUNT OF ITS LIABILITY
HEREUNDER NOTWITHSTANDING FORECLOSURE ON SUCH REAL PROPERTY BY TRUSTEE SALE OR
ANY OTHER REASON IMPAIRING SUCH GUARANTOR'S OR THE LENDER'S RIGHT TO PROCEED
AGAINST ANY GUARANTOR OR ANY SUBSIDIARY OF SUCH GUARANTOR. EACH GUARANTOR HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS AND BENEFITS UNDER
SECTION 2809 OF THE CALIFORNIA CIVIL CODE (OR ANY SIMILAR LAW IN ANY OTHER
JURISDICTION) PURPORTING TO REDUCE A GUARANTOR'S OBLIGATION IN PROPORTION TO THE
PRINCIPAL OBLIGATION. EACH GUARANTOR HEREBY WAIVES ALL RIGHTS AND BENEFITS UNDER
SECTION 580A OF THE CALIFORNIA CODE OF CIVIL PROCEDURE (OR ANY SIMILAR LAW IN
ANY OTHER JURISDICTION) PURPORTING TO LIMIT THE AMOUNT OF ANY DEFICIENCY
JUDGMENT WHICH MIGHT BE RECOVERABLE FOLLOWING THE OCCURRENCE OF A TRUSTEE'S SALE
UNDER A DEED OF TRUST, ALL RIGHTS AND BENEFITS UNDER SECTION 580B OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE (OR ANY SIMILAR LAW IN ANY OTHER
JURISDICTION) STATING THAT NO DEFICIENCY MAY BE RECOVERED ON A REAL PROPERTY
PURCHASE MONEY OBLIGATION, ALL RIGHTS AND BENEFITS UNDER SECTION 580D OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE (OR ANY SIMILAR LAW IN ANY OTHER
JURISDICTION) STATING THAT NO DEFICIENCY MAY BE RECOVERED ON A NOTE SECURED BY A
DEED OF TRUST ON REAL PROPERTY
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<PAGE> 7
IN CASE SUCH REAL PROPERTY IS SOLD UNDER THE POWER OF SALE CONTAINED IN SUCH
DEED OF TRUST, AND ALL RIGHTS AND BENEFITS UNDER SECTION 726 OF THE CALIFORNIA
CODE OF CIVIL PROCEDURE (OR ANY SIMILAR LAW IN ANY OTHER JURISDICTION) IF SUCH
SECTIONS, OR ANY OF THEM, HAVE ANY APPLICATION HERETO OR ANY APPLICATION TO SUCH
GUARANTOR. IN ADDITION, EACH GUARANTOR HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING OR ANY OTHER
PROVISION HEREOF, ALL RIGHTS, DEFENSES AND BENEFITS WHICH MIGHT OTHERWISE BE
AVAILABLE TO SUCH GUARANTOR UNDER CALIFORNIA CIVIL CODE SECTIONS 2799, 2808,
2809, 2810, 2814, 2815, 2819, 2820, 2821, 2822, 2825, 2838, 2839, 2845, 2846,
2847, 2848, 2849, 2850, 2855, 2899, AND 3433 (OR ANY SIMILAR LAW IN ANY OTHER
JURISDICTION).
(e) GUARANTOR WAIVES ALL RIGHTS AND DEFENSES ARISING OUT OF AN ELECTION
OF REMEDIES BY THE LENDER, EVEN THOUGH THAT ELECTION OF REMEDIES, SUCH AS A
NONJUDICIAL FORECLOSURE WITH RESPECT TO SECURITY FOR A GUARANTEED OBLIGATION,
HAS DESTROYED THE GUARANTOR'S RIGHTS OF SUBROGATION AND REIMBURSEMENT AGAINST
THE PRINCIPAL BY THE OPERATION OF SECTION 580D OF THE CODE OF CALIFORNIA CIVIL
PROCEDURE OR OTHERWISE.
11. In order to induce the Lender to make Loans pursuant to the Credit
Agreement, each Guarantor represents, warrants and covenants that:
(a) Such Guarantor (i) is a duly organized and validly existing
corporation and is in good standing under the laws of the jurisdiction of its
organization, and has the corporate power and authority to own its property and
assets and to transact the business in which it is engaged and presently
proposes to engage and (ii) is duly qualified and is authorized to do business
and is in good standing in all jurisdictions where it is required to be so
qualified except where the failure to be so qualified would have a Material
Adverse Effect.
(b) Such Guarantor has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Guaranty and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of this Guaranty. Such Guarantor has duly executed and
delivered this Guaranty, and this Guaranty constitutes the legal, valid and
binding obligation of such Guarantor enforceable in accordance with its terms.
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the termination of the Total Commitment and when no Note
remains outstanding and all Guaranteed Obligations have been paid in full, such
Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in the Credit
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<PAGE> 8
Agreement, and so that no Event of Default, is caused by the actions of such
Guarantor or any of its Subsidiaries.
13. Each Guarantor hereby jointly and severally agrees to pay all
reasonable out-of-pocket costs and expenses of the Lender in connection with the
enforcement of this Guaranty and the protection of the Lender's rights
hereunder, and in connection with any amendment, waiver or consent relating
hereto (including, without limitation, the reasonable fees and disbursements of
counsel employed by any of the Lenders).
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Lender and its
successors and assigns.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated in any manner whatsoever unless in writing duly
signed by the Lender.
16. Each Guarantor acknowledges that an executed (or conformed) copy of
the Credit Agreement has been made available to its principal executive officers
and such officers are familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under applicable
law (including, without limitation, Section 151 of the New York Debtor and
Creditor Law) and not by way of limitation of any such rights, upon the
occurrence and during the continuance of an Event of Default (such term to mean
and include any "Event of Default" as defined in the Credit Agreement continuing
after any applicable grace period), the Lender is hereby authorized at any time
or from time to time, without notice to any Guarantor or to any other Person,
any such notice being expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any time
held or owing by the Lender to or for the credit or the account of such
Guarantor, against and on account of the obligations and liabilities of such
Guarantor to the Lender under this Guaranty, irrespective of whether or not the
Lender shall have made any demand hereunder and although said obligations,
liabilities, deposits or claims, or any of them, shall be contingent or
unmatured. The Lender agrees to promptly notify the relevant Guarantor after any
such set off and application; provided, however, that the
failure to give such notice shall not affect the validity of such set off and
application.
18. All notices, requests, demands or other communications pursuant
hereto shall be deemed to have been duly given or made when delivered to the
Person to which such notice, request, demand or other communication is required
or permitted to be given or made under this Guaranty, addressed to such party at
(i) in the case of any Lender, as provided in the Credit Agreement and (ii) in
the case of any Guarantor, at its address set forth opposite its signature
below; or in any case at such other address as any of the Persons listed above
may hereafter notify the others in writing.
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<PAGE> 9
19. If claim is ever made upon the Lender for repayment or recovery of
any amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrower), then and in such event each Guarantor agrees
that any such judgment, decree, order, settlement or compromise shall be binding
upon such Guarantor, notwithstanding any revocation hereof or the cancellation
of any Note other instruments evidencing any liability of the Borrower, and such
Guarantor shall be and remain liable to the aforesaid payees hereunder for the
amount so repaid or recovered to the same extent as if such amount had never
originally been received by any such payee.
20. (A) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE LENDER AND
OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF THE STATE OF NEW YORK.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY
OTHER CREDIT DOCUMENT TO WHICH ANY GUARANTOR IS A PARTY MAY BE BROUGHT IN THE
COURTS OF THE STATE OF OHIO OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN
DISTRICT OF OHIO, AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH
GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH
GUARANTOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM TO ANY SUCH COURTS LACK OF
JURISDICTION OVER SUCH GUARANTOR, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT
TO WHICH IT IS A PARTY BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH
COURT LACKS JURISDICTION OVER SUCH GUARANTOR. EACH GUARANTOR FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE
MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
EACH GUARANTOR AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT TO WHICH SUCH GUARANTOR
IS A PARTY THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE.
NOTHING HEREIN SHALL AFFECT THE RIGHT BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST EACH GUARANTOR IN ANY OTHER JURISDICTION.
9
<PAGE> 10
(C) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (B) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
21. In the event that all of the capital stock of one or more
Guarantors is
sold or otherwise disposed of or liquidated in compliance with the requirements
of the Credit Agreement (or such sale or other disposition has been approved in
writing by the Lender) and the proceeds of such sale, disposition or liquidation
are applied in accordance with the provisions of the Credit Agreement, to the
extent applicable, such Guarantor shall be released from this Guaranty and this
Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no
further force or effect (it being understood and agreed that the sale of one or
more Persons that own, directly or indirectly, all of the capital stock of any
Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this Section 21).
22. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN AN ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
GUARANTY, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
23. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense.
24. This Guaranty may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Lender.
* * *
10
<PAGE> 11
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
Address:
4891 Pacific Highway NOBLE BROADCAST CENTER, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
4891 Pacific Highway NOBLE BROADCAST OF COLORADO, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
4891 Pacific Highway NOBLE BROADCAST OF ST. LOUIS, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
4891 Pacific Highway NOBLE BROADCAST OF TOLEDO, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
4891 Pacific Highway NOVA MARKETING GROUP, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
11
<PAGE> 12
4891 Pacific Highway NOBLE BROADCAST LICENSES, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
4891 Pacific Highway NOBLE BROADCAST OF SAN DIEGO, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
4891 Pacific Highway SPORTS RADIO, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
4891 Pacific Highway SPORTS RADIO BROADCASTING, INC.
San Diego, California 92110 as Guarantor
Attention: John T. Lynch
Telephone: (619) 291-8510
Facsimile: (619) 294-9393 By: ________________________________
Title:
Accepted and Agreed to:
BROADCAST FINANCE, INC.
as Lender
By: _________________________
Title:
12
<PAGE> 1
TERM NOTE
U.S. $40,000,000 Cincinnati, Ohio
February 20, 1996
FOR VALUE RECEIVED, NOBLE BROADCAST HOLDINGS, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of BROADCAST
FINANCE, INC., an Ohio corporation (the "Lender"), in lawful money of the United
States of America in immediately available funds, at the Lender's Payment Office
(as defined in the Agreement referred to below) initially located at 1300 PNC
Center, 201 East Fifth Street, Cincinnati, Ohio 45202 on the Final Mailing Date
(as defined in the Agreement) the principal sum of FORTY MILLION DOLLARS or, if
less, the unpaid principal amount of all Term Loans (as defined in the
Agreement) made by the Lender pursuant to the Agreement, payable at such times
and in such amounts as are specified in the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each Term Loan made by the Lender in like money at said office from
the date hereof until paid at the rates and at the times provided in the
Agreement.
This Note is the Term Note referred to in the Credit Agreement, of even
date, among the Borrower, Noble Broadcast Group, Inc. and Lender (as amended,
modified or supplemented from time to time, the "Agreement") and is entitled to
the benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Final Maturity Date, in whole or
in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
NOBLE BROADCAST HOLDINGS, INC.
By: ______________________________
Title:
<PAGE> 1
REVOLVING NOTE
U.S. $1,000,000 Cincinnati, Ohio
February 20, 1996
FOR VALUE RECEIVED, NOBLE BROADCAST HOLDINGS, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of BROADCAST
FINANCE, INC., an Ohio corporation (the "Lender"), in lawful money of the United
States of America in immediately available funds, at the Lender's Payment Office
(as defined in the Agreement referred to below) initially located at 1300 PNC
Center, 201 East Fifth Street, Cincinnati, Ohio 45202 on the Final Maturity Date
(as defined in the Agreement) the principal sum of ONE MILLION DOLLARS or, if
less, the unpaid principal amount of all Revolving Loans (as defined in the
Agreement) made by the Lender pursuant to the Agreement, payable at such times
and in such amounts as are specified in the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount of each Revolving Loan made by the Lender in like money at said office
from the date hereof until paid at the rates and at the times provided in the
Agreement.
This Note is the Revolving Note referred to in the Credit Agreement, of
even date, among the Borrower, Noble Broadcast Group, Inc. and the Lender (as
amended, modified or supplemented from time to time, the "Agreement") and is
entitled to the benefits thereof and of the other Credit Documents (as defined
in the Agreement). This Note is secured by the Security Documents (as defined in
the Agreement) and is entitled to the benefits of the Guaranties (as defined in
the Agreement). As provided in the Agreement, this Note is subject to voluntary
prepayment and mandatory repayment prior to the Final Maturity Date, in whole or
in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
NOBLE BROADCAST HOLDINGS, INC.
By: ________________________________
Title:
<PAGE> 1
FOR IMMEDIATE RELEASE
---------------------
CONTACT: KIRK BREWER
(312) 466-4042
JACOR COMMUNICATIONS TAKES ANOTHER STEP TOWARD
----------------------------------------------
NOBLE BROADCAST GROUP ACQUISITION
---------------------------------
CINCINNATI, FEB. 22, 1996 -- JACOR COMMUNICATIONS, INC. (NASDAQ: JCOR) today
announced it has taken another step toward the completion of its acquisition of
Noble Broadcast Group, Inc. Noble owns 10 stations serving three of the
nation's top 75 markets, and provides programming to and sells air time for two
stations serving the San Diego market.
Jacor today purchased a warrant entitling it to buy approximately 79
percent of the outstanding shares of Noble, and has entered into a stock
purchase agreement to acquire the remaining 21 percent. The warrant and stock
purchase agreement are expected to be exercised upon receipt of final
regulatory approvals. Jacor today also purchased the assets of a Noble
subsidiary which provides the programming to and sells the air time for two
stations serving San Diego, having received Hart Scott Rodino approval to do
so, and provided a credit facility to Noble.
In addition, Jacor entered into time brokerage agreements with Noble's
stations in St. Louis and Toledo, Ohio.
As previously reported, the transaction is valued at approximately
$152 million. Jacor said it has funded the transaction with borrowings from a
$300 million credit facility obtained for the purpose of funding this
transaction and for future
<PAGE> 2
acquisitions. Jacor also used this credit facility to repay approximately $45
million in previously outstanding debt.
Noble's radio stations serve Denver (two AM, and two FM), St. Louis
(one AM, two FM) and Toledo, Ohio (one AM, two FM). Noble also provides
programming to and sells the air time for two radio stations serving San Diego
(one AM, one FM).
With its acquisition of Noble, along with its recent agreement to
acquire Citicasters, Inc., Jacor will become the nation's largest radio group
in terms of number of stations owned.
Jacor Communications is headquartered in Cincinnati. Jacor plans to
pursue growth through continued acquisitions of complementary stations in its
existing markets, and radio groups or individual stations with significant
presence in attractive markets.
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