<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 11, 1997 (June 23, 1997)
SFX BROADCASTING, INC.
(Exact name of registrant as specified in charter)
DELAWARE 0-22486 13-3649750
(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
150 EAST 58TH STREET, 19TH FLOOR, NEW YORK, NEW YORK 10155
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (212) 407-9191
N/A
(Former name or former address, if changed since last report)
===============================================================================
<PAGE>
ITEM 5. OTHER EVENTS
Unaudited Condensed Pro Forma Condensed Combined Financial Statements of
SFX Broadcasting, Inc.
Attached hereto as Annex A and incorporated herein by reference are
Unaudited Pro Forma Condensed Combined Financial Statements of SFX
Broadcasting, Inc. (the "Company").
Increase in Line of Credit
On June 23, 1997, the Company increased the amount of its senior revolving
credit facility (the "Credit Agreement") to $400.0 million and reduced the
applicable interest rate on borrowings thereunder. Borrowings under the
Credit Agreement may be used to finance permitted acquisitions, for working
capital and general corporate purposes, and for letters of credit up to $30.0
million. Any amounts outstanding under the Credit Agreement are due on June
30, 2005. The amount that may be borrowed by the Company under the Credit
Agreement shall be reduced by $18.0 million on March 31, June 30, September
30 and December 31 of each year, commencing on March 31, 2000 and ending on
December 31, 2004, and by $20.0 million on each of March 31, 2005 and June
30, 2005. Interest on the funds borrowed under the Credit Agreement is based
on a floating rate selected by the Company of either (i) the higher of (a)
The Bank of New York's prime rate and (b) the federal funds rate plus 0.5%,
plus, in each case, a margin which varies from 0.0% to 1.0%, based on the
Company's then-current leverage ratio, or (ii) a rate tied to LIBOR plus a
margin which varies from 0.5% to 2.25%, based on the Company's then-current
leverage ratio. The Company must prepay outstanding borrowings in advance of
their scheduled due dates in certain circumstances. The Company must pay an
annual commitment fee equal to a specified percentage of the unutilized
commitments under the Credit Agreement. The commitment fee is either 0.375%
or 0.250%, depending on the Company's leverage ratio. The Company's
obligations under the Credit Agreement are secured by substantially all of
its assets, including property, stock of subsidiaries and accounts
receivable, and are guaranteed by the Company's subsidiaries. The foregoing
description of the Credit Agreement does not purport to be complete and is
qualified by reference to the copy of the Credit Agreement attached hereto as
an exhibit, which is incorporated herein by reference.
Acquisition of Assets of Sunshine Promotions, Inc. and Other Related
Entities
On June 23, 1997, the Company acquired substantially all of the assets of
Sunshine Promotions, Inc., one of the largest concert promoters in the
Midwest, and certain other related entities. The purchase price consisted of
the payment of an aggregate of approximately $53.9 million to the sellers and
to their creditors, the issuance of approximately $4.0 million worth of Class
A Common Stock of the Company, half of which was issued at the closing and
the remainder of which is to be issued ratably on the first and second
anniversaries of the closing, the issuance of a five-year note in the
principal amount of $2.0 million, without interest, the assumption of
negative working capital of approximately $2.6 million and the assumption of
substantially all of the remaining debt and capital lease obligations (which
have a value of approximately $800,000) of the acquired entities. The assets
acquired include Deer Creek Music Center, a 21,000 seat complex located in
Indianapolis, Indiana, the Polaris Amphitheatre, a 20,000 seat complex
located in Columbus, Ohio, and a lease to operate Murat Centre, a 2,700 seat
theater and 2,200 seat ballroom located in Indianapolis, Indiana.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
10.1 Third Amended and Restated Credit Agreement, dated as of June 23,
1997, among SFX Broadcasting, Inc., the subsidiaries of SFX
Broadcasting, Inc. from time to time parties thereto, The Bank of New
York, individually and as agent for the lenders, and the lenders from
time to time parties thereto.
1
<PAGE>
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 thereto duly authorized.
SFX BROADCASTING, INC.
By: /s/ Thomas P. Benson
----------------------------------
Name: Thomas P. Benson
Title: Vice President and Chief
Financial Officer
Date: June 30, 1997
2
<PAGE>
ANNEX A
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
The following financial statements and notes thereto contain
forward-looking statements that involve risks and uncertainties. The actual
results of the Company may differ materially from those discussed herein.
Factors that could cause or contribute to such differences include, but are
not limited to, risks and uncertainties relating to the ability of the
Company to achieve cost savings, revenue of stations owned or to be acquired,
the need for additional financing, consummation of the Pending Transactions
(see Glossary), integration of the acquired stations, and the management of
growth. The Company undertakes no obligation to publicly release the result
of any revisions to these forward-looking statements that may be made to
reflect any future events or circumstances.
In the opinion of management, all adjustments necessary to fairly present
this pro forma information have been made. The Unaudited Pro Forma Condensed
Combined Financial Statements are based upon, and should be read in
conjunction with, the historical financial statements and the respective
notes to such financial statements incorporated herein by reference. The pro
forma information is based upon tentative allocations of purchase price for
the Pending Transactions, and does not purport to be indicative of the
results that would have been reported had such events actually occurred on
the dates specified, nor is it indicative of the Company's future results if
the aforementioned transactions are completed. The Company cannot predict
whether the consummation of the acquisitions or dispositions will conform to
the assumptions used in the preparation of the Unaudited Pro Forma Condensed
Combined Financial Statements. The Unaudited Pro Forma Statement of
Operations data as of March 31, 1997 and December 31, 1996 include
adjustments to station operating expenses to reflect savings that management
believes it would have been able to achieve through the implementation of its
strategy had the Pending and Recent Transactions been consummated as of
January 1, 1996. However, there can be no assurance that the Company will be
able to achieve such savings, if any. Management does not have sufficient
information to determine the extent of cost savings, if any, associated with
the Hearst Acquisition, Charlotte Exchange, and Greenville Exchange
applicable to the December 31, 1996 and March 31, 1997 Unaudited Pro Forma
Statements of Operations, that it anticipates it will be able to achieve.
The Unaudited Pro Forma Condensed Combined Balance Sheet at March 31, 1997
is presented as if the Company had completed the Recent and Pending
Transactions as of March 31, 1997. No adjustment has been made to the
Unaudited Pro Forma Condensed Combined Balance Sheet for the Greenville
Exchange, CBS Exchange, Charlotte Exchange or Chancellor Exchange, other than
the receipt or payment of cash, as they will be recorded at historical cost.
The Unaudited Pro Forma Condensed Combined Statements of Operations for
the year ended December 31, 1996 and the three months ended March 31, 1997
are presented as if the Company had completed the Recent and Pending
Transactions as of January 1, 1996. The Albany Acquisition, the Chancellor
Exchange, Greenville Exchange and the Greenville Acquisition have not been
reflected in the Unaudited Pro Forma Condensed Combined Statement of
Operations as they would not have a material impact.
F-1
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
MARCH 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
SFX
BROADCASTING SECRET CAPSTAR PRO FORMA
INC. AS COMMUNICATIONS DISPOSITION SUNSHINE HEARST RICHMOND ADJUSTMENTS
REPORTED ACQUISITION (1) ACQUISITION ACQUISITION ACQUISITION (2) PRO FORMA
------------ -------------- ----------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets..... $ 170,052 $ 6,878 $ 56,771 $ 6,015 $3,574 $ 4,366 $ (4,100)(a) $ 58,207
600 (a)
206,000 (b)
(4,000)(c)
(26,600)(d)
(4,366)(d)
(6,878)(e)
(245,000)(e)
(57,531)(f)
(3,574)(g)
(35,000)(g)
(9,000)(h)
Property and
equipment, net.... 89,398 4,324 (5,112) 34,587 1,034 1,095 -- 125,326
Intangible assets,
net............... 765,597 40,208 (34,085) -- -- 5,770 4,000 (c) 1,115,719
12,271 (c)
36,183 (d)
210,275 (e)
32,534 (f)
33,966 (g)
9,000 (h)
Other assets....... 55,075 193 (324) 878 283 52 (12,271)(c) 16,225
(16,500)(d)
(10,000)(e)
(878)(f)
(283)(g)
---------- ------- -------- ------- ------ ------- ---------
Total assets....... $1,080,122 $51,603 $ 17,250 $41,480 $4,891 $11,283 $ 108,848 $1,315,477
========== ======= ======== ======= ====== ======= ========= ==========
</TABLE>
F-2
<PAGE>
<TABLE>
<CAPTION>
SFX
BROADCASTING SECRET CAPSTAR PRO FORMA
INC. AS COMMUNICATIONS DISPOSITION SUNSHINE HEARST RICHMOND ADJUSTMENTS
REPORTED ACQUISITION (1) ACQUISITION ACQUISITION ACQUISITION (2) PRO FORMA
------------ -------------- ----------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities .. $ 56,131 $ 2,685 $(1,453) $ 9,657 $1,257 $ 2,555 $ (3,500)(a) $ 60,835
(2,555)(d)
(2,685)(e)
(1,257)(g)
Other liabilities .... 15,653 -- -- -- 3,862 -- 3,357 (f) 19,010
(3,862)(g)
Long-term debt
(including current
portion):
Credit
Agreement............ -- -- -- -- -- -- 206,000 (b) 206,000
Senior Subordinated
Notes ............... 450,000 -- -- -- -- -- -- 450,000
Acquired
company debt......... -- 31,890 (500) 31,094 -- 16,240 (16,240)(d) 91
(31,890)(e)
(30,503)(f)
Other debt............ 1,080 -- -- -- -- -- -- 1,080
Deferred taxes........ 102,254 -- -- -- -- -- -- 102,254
Redeemable preferred
stock
Series B
Preferred Stock...... 943 -- -- -- -- -- -- 943
Series C
Preferred Stock...... 10 -- -- -- -- -- -- 10
Series D
Preferred Stock...... 141,402 -- -- -- -- -- -- 141,402
Series E
Preferred Stock...... 225,000 -- -- -- -- -- -- 225,000
Stockholders'
equity............... 87,649 17,028 19,203 729 (228) (7,512) 7,512 (d) 108,852
(17,028)(e)
(729)(f)
2,000 (f)
228 (g)
---------- ------- ------- ------- ------ ------- -------- ----------
Total liabilities and
stockholders'
equity............... $1,080,122 $51,603 $17,250 $41,480 $4,891 $11,283 $108,848 $1,315,477
========== ======= ======= ======= ====== ======= ======== ==========
</TABLE>
F-3
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(1) Capstar Disposition
To reflect the Capstar Disposition for $60,000,000 in cash to the Company.
The Company will record a gain of approximately $19,000,000 on the
Disposition.
<TABLE>
<CAPTION>
JACKSON
AND
BILOXI CAPSTAR
SALE PROCEEDS STATIONS DISPOSITION
------------- -------- -----------
(IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets .............................. $60,000 $ (3,229) $ 56,771
Property and equipment, net ................. (5,112) (5,112)
Intangible assets, net ...................... (34,085) (34,085)
Other assets ................................ (324) (324)
------- -------- --------
Total assets ............................... $60,000 $(42,750) $ 17,250
======= ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities ......................... $ (1,453) $ (1,453)
Long-term debt .............................. (500) (500)
Stockholders' equity ........................ $60,000 (40,797) 19,203
------- -------- --------
Total liabilities and stockholders' equity $60,000 $(42,750) $ 17,250
======= ======== ========
</TABLE>
The Company expects to use the proceeds of the Capstar Disposition to
complete a similar acquisition so that the Capstar disposition can be treated
as a like-kind exchange which would be substantially tax free. Should the
Company be unable to structure such a transaction, the Company would utilize
its available net operating loss carryforwards and pay approximately
$6,000,000 in additional income taxes.
(2) Pro Forma Adjustments
a. Represents the pending Little Rock Disposition for $4,100,000,
$3,500,000 of which has been received as a deposit and the removal
of related assets held for sale of $4,100,000 from SFX's balance
sheet. No gain or loss will be recognized by the Company in
connection with this transaction.
b. To reflect the remaining cash needs, to complete the Pending
Transactions, assumed to be borrowed under the Credit Agreement.
c. To reflect additional acquisition costs related to the Pending
Transactions.
d. To reflect the Richmond Acquisition for $43,100,000 in cash
($16,500,000 of which has been paid as a deposit), the recording of
the related excess of the purchase price paid over the net book
value of the assets carried on the adjusted balance sheet of
$36,183,000, and adjustments to remove current assets of
$4,366,000, current liabilities of $2,555,000, long-term debt of
$16,240,000 and stockholders' deficit of $7,512,000.
e. To reflect the Secret Communications Acquisition for $255,000,000
in cash ($10,000,000 of which has been paid as a deposit), the
related excess of the purchase price paid over net book value of
the assets carried on the adjusted balance sheet of $210,275,000
and the adjustments to remove $6,878,000 of current assets,
$2,685,000 of current liabilities, and $17,028,000 of stockholders'
equity.
f. To reflect the Sunshine Acquisition for $62,888,000, $57,531,000 in
cash (including $30,503,000 in debt repayment, a $3,642,000 working
capital deficiency as of March 1997 and debt and capital lease
obligations of $591,000), $2,000,000 in SFX stock, and future cash
and stock commitments with a present value of $3,357,000, the
recording of the excess of the purchase price over the net
F-4
<PAGE>
book value of assets carried on the adjusted balance sheet of
$32,534,000, and adjustments to remove $878,000 of other assets and
$729,000 of stockholders' equity which are not being acquired.
g. To reflect the Hearst Acquisition for $35,000,000, the related
excess of the purchase price paid over net book value of
$33,966,000, and the adjustments to remove $3,574,000 of current
assets, $283,000 of other assets, $1,257,000 of current
liabilities, $3,862,000 of other liabilities, and stockholders'
deficit of $228,000.
h. To reflect the $11,000,000 of cash to be received in the Chancellor
Exchange and the $20,000,000 of cash to be paid in the Charlotte
Exchange. No gain or loss will be recognized because the fair
market value of the stations received, as adjusted for cash
received or paid, equals the carrying value of the stations
exchanged.
F-5
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
SFX
BROADCASTING,
INC. AS TEXAS COAST HARTFORD MEADOWS
REPORTED ACQUISITION ACQUISITION ACQUISITION
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net broadcast
revenues............ $ 44,991 $652 $638
Concert promotion
revenue ............ 7,789 -- -- $ 601
Station and other
operating expenses . 29,916 401 664
Concert promotion
operating expense . 7,738 -- -- 631
Depreciation,
amortization,
duopoly integration
costs and
acquisition related
costs............... 8,145 -- -- 221
Corporate expenses .. 2,049* -- -- --
---------- ---- ---- -----
Operating income
(loss).............. 4,932 251 (26) (251)
Interest expense ... 12,815 -- -- 199
Other expense
(income)............ (1,680) -- -- (1)
---------- ---- ---- -----
Income before income
tax expense......... (6,203) 251 (26) (449)
Income tax expense
(benefit)........... 285 -- -- --
---------- ---- ---- -----
Net income (loss) .. (6,488) 251 (26) (449)
Preferred stock
dividend
requirement......... 7,952 -- -- --
---------- ---- ---- -----
Net income (loss)
applicable to
common shares....... $ (14,440) $251 $(26) $(449)
========== ==== ==== =====
Net loss per common
share............... $ (1.58)
Average common
shares outstanding . 9,161,433
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SECRET
COMMUNICATIONS CHARLOTTE PRO FORMA
CBS ACQUISITION RICHMOND EXCHANGE SUNSHINE CAPSTAR HEARST ADJUSTMENTS
EXCHANGE(7) (8) ACQUISITION (9) ACQUISITION DISPOSITION ACQUISITION (6) PRO FORMA
----------- ----------- ----------- --------- ----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net broadcast
revenues............ $ (60) $8,231 $1,933 $ 908 $(2,836) $1,758 $ 56,215
Concert promotion
revenue ............ -- -- -- -- $ 5,357 -- -- 13,747
Station and other
operating expenses . 630 5,327 1,547 1,058 (1,761) 1,910 (470)(a) 39,222
Concert promotion
operating expense . -- -- -- -- 5,977 -- -- 14,346
Depreciation,
amortization,
duopoly integration
costs and
acquisition related
costs............... -- 891 -- 125 388 (393) 36 $ 42 (b) 11,662
1,915 (c)
198 (d)
25 (c)
69 (o)
Corporate expenses .. -- -- -- -- -- -- -- -- 2,049
--------- -------------- ----------- --------- ----------- ----------- ----------- ----------- ---------
Operating income
(loss).............. (690) 2,013 386 (275) (1,008) (682) (188) (1,779) 2,683
Interest expense ... -- -- -- -- 512 (666) -- 3,707 (b) 16,687
107 (k)
13 (m)
Other expense
(income)............ -- 77 -- -- (228) -- -- (77)(l) (1,909)
--------- -------------- ----------- --------- ----------- ----------- ----------- ----------- ---------
Income before income
tax expense......... (690) 1,936 386 (275) (1,292) (16) (188) (5,529) (12,095)
Income tax expense
(benefit)........... 32 -- -- -- -- -- -- 317
--------- -------------- ----------- --------- ----------- ----------- ----------- ----------- ---------
Net income (loss) .. (722) 1,936 386 (275) (1,292) (16) (188) (5,529) (12,412)
Preferred stock
dividend
requirement......... -- -- -- -- -- -- -- 1,579 (j) 9,531
--------- -------------- ----------- --------- ----------- ----------- ----------- ----------- ---------
Net income (loss)
applicable to
common shares....... $(722) $1,936 $ 386 $ (275) $(1,292) $ (16) $ (188) $(7,108) $ (21,943)
========= ============== =========== ========= =========== =========== =========== =========== ==========
Net loss per common
share............... $ (2.38)
Average common
shares outstanding . 70,796 (n) 9,232,229
</TABLE>
- --------------
* Net of $625 of fees from Triathlon.
F-6
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
LIBERTY PRISM
ACQUISITION ACQUISITION HOUSTON
SFX INCLUDING INCLUDING EXCHANGE
BROADCASTING, MMR WASHINGTON LOUISVILLE OTHER 1996 AND DALLAS
INC. AS MERGER DISPOSITIONS DISPOSITIONS ACQUISITIONS DISPOSITION
REPORTED (1) (2) (3) (4) (5)
------------- ------- ------------ ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
Net broadcast
revenues............ $ 143,061 $20,038 $24,992 $13,511 $ 4,728 $ (8,680)
Concert promotion
revenue ............ -- -- -- -- -- --
Station and other
operating
expenses............ 92,816 10,739 17,774 10,897 2,869 (10,307)
Concert promotion
operating expense . -- -- -- -- -- --
Depreciation,
amortization,
duopoly integration
costs and
acquisition
related costs....... 17,311 6,081 5,150 1,241 1,492 (284)
Corporate expenses .. 6,313 1,253 1,478 808 111 110
Other................ 28,994 577 -- -- -- (3,500)
---------- ------- ------- ------- -------- --------
Operating income
(loss).............. (2,373) 1,388 590 565 256 5,301
Interest expense ... 34,897 -- 3,326 773 382 (1,667)
Other expense
(income)............ (2,117) -- 5,935 -- (11,948) --
---------- ------- ------- ------- -------- --------
Income before income
tax expense......... (35,153) 1,388 (8,671) (208) 11,822 6,968
Income tax expense
(benefit)........... 480 -- (3,378) -- 45 938
---------- ------- ------- ------- -------- --------
Net income (loss) ... (35,633) 1,388 (5,293) (208) 11,777 6,030
Preferred stock
dividend
requirement......... 6,061 -- -- -- -- --
---------- ------- ------- ------- -------- --------
Net income (loss)
applicable to
common shares....... $ (41,694) $ 1,388 $(5,293) $ (208) $ 11,777 $ 6,030
========== ======= ======= ======= ======== ========
Net loss per common
share............... $ (4.57)
Average common
shares
outstanding......... 9,127,985
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
DELSENER/ CBS
SLATER TEXAS COAST HARTFORD MEADOWS EXCHANGE
ACQUISITION ACQUISITION ACQUISITION ACQUISITION (7)
----------- ----------- ----------- ----------- --------
<S> <C> <C> <C> <C> <C>
Net broadcast
revenues............ $4,281 $5,742 $ 10
Concert promotion
revenue ............ $51,084 -- -- $10,314 --
Station and other
operating
expenses............ 2,968 5,607 1,288
Concert promotion
operating expense . 45,983 -- -- 9,312 --
Depreciation,
amortization,
duopoly integration
costs and
acquisition
related costs....... 747 36 27 1,550 --
Corporate expenses .. -- -- -- -- --
Other................ -- (48) -- -- (363)
------- ------ ------ ------- -------
Operating income
(loss).............. 4,354 1,325 108 (548) (915)
Interest expense ... 60 -- 19 1,166 --
Other expense
(income)............ -- (65) (8) -- --
------- ------ ------ ------- -------
Income before income
tax expense......... 4,294 1,390 97 (1,714) (915)
Income tax expense
(benefit)........... 106 22 32 -- 783
------- ------ ------ ------- -------
Net income (loss) ... 4,188 1,368 65 (1,714) (1,698)
Preferred stock
dividend
requirement......... -- -- -- -- --
------- ------ ------ ------- -------
Net income (loss)
applicable to
common shares....... $ 4,188 $1,368 $ 65 $(1,714) $(1,698)
======= ====== ====== ======= =======
Net loss per common
share ..............
Average common
shares
outstanding ........
</TABLE>
F-7
<PAGE>
SFX BROADCASTING, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1996 -- CONTINUED
(In Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
SECRET
COMMUNICATIONS CHARLOTTE PRO FORMA
ACQUISITION RICHMOND EXCHANGE SUNSHINE CAPSTAR HEARST ADJUSTMENTS
(8) ACQUISITION (9) ACQUISITION DISPOSITION ACQUISITION (6) PRO FORMA
-------------- ------------- ----------- ------------- ------------- ------------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net broadcast
revenues............ $35,532 $ 9,007 $6,222 $(9,012) $15,631 $ (450)(o) $ 264,613
Concert promotion
revenue ............ -- -- -- 45,654 -- -- -- 107,052
Station and other
operating
expenses............ 20,844 7,757 3,885 $ -- (5,265) 15,130 (8,540)(a) 168,462
Concert promotion
operating expense . -- -- -- 38,999 -- -- 100 (a) 94,194
Depreciation,
amortization,
duopoly integration
costs and
acquisition
related costs ...... 3,970 780 500 1,492 (852) 293 1,491 (b) 51,802
9,843 (c)
100 (e)
559 (f)
275 (o)
Corporate expenses .. -- 1,037 -- -- -- 169 (3,713)(g) 6,000*
1,434 (g)
(3,000)(h)
Other................ 2 -- -- -- -- -- -- 25,662
------- ------- ------ ------- ------- ------- -------- ---------
Operating income
(loss).............. 10,716 (567) 1,837 5,163 (2,895) 39 1,201 25,545
Interest expense ... -- 1,210 -- 2,930 (2,108) -- 7,922 (b) 66,752
17,059 (b)
716 (k)
67 (m)
Other expense
(income)............ 1,175 -- -- (436) (538) -- (5,935)(i) (3,192)
11,920 (i)
(1,175)(l)
------- ------- ------ ------- ------- ------- -------- ---------
Income before income
tax expense......... 9,541 (1,777) 1,837 2,669 (249) 39 (29,373) (38,015)
Income tax expense
(benefit)........... -- -- -- -- -- -- 1,612 (i) 640
------- ------- ------ ------- ------- ------- -------- ---------
Net income (loss) ... 9,541 (1,777) 1,837 2,669 (249) 39 (30,985) (38,655)
Preferred stock
dividend
requirement......... -- -- -- -- -- -- 32,063 (j) 38,124
------- ------- ------ ------- ------- ------- -------- ---------
Net income (loss)
applicable to
common shares....... $ 9,541 $(1,777) $1,837 $ 2,669 $ (249) $ 39 $(63,048) $ (76,779)
======= ======= ====== ======= ======= ======= ======== =========
Net loss per common
share............... $ (8.35)
Average common
shares
outstanding......... 70,796 (n) 9,198,781
</TABLE>
- --------------
* Net of $3,000 of fees from Triathlon; see Note 6(a).
F-8
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENTS OF OPERATIONS
(1) MMR Merger
Reflects the net effect of the historical operations of Multi-Market
Radio, Inc. ("MMR") as adjusted for acquisitions and dispositions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
----------------------------------------------------------------
MMR
AS MMR HARTFORD PRO FORMA MMR
REPORTED DISPOSITIONS(A) ACQUISITION ADJUSTMENTS MERGER
-------- --------------- ----------- ----------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net broadcast revenues....... $18,832 $(1,623) $2,829 $20,038
Station operating expenses .. 11,422 (1,931) 2,040 $ (792)(b) 10,739
Depreciation/amortization ... 7,611 (1,833) 277 26 (c) 6,081
Corporate expenses........... 2,517 -- -- 1,253 (d) 1,253
(2,517)(d)
Other........................ 63 -- -- 514 (f) 577
------- ------- ------ ------- -------
Operating income (loss) ..... (2,781) 2,141 512 1,516 1,388
Interest expense............. 5,265 -- 274 (5,539)(e) --
Other expense (income)....... -- (57) (12) 69 (e) --
Income tax expense
(benefit)................... -- 7 (7)(e) --
------- ------- ------ ------- -------
Net income (loss)............ $(8,046) $ 2,198 $ 243 $ 6,993 $ 1,388
======= ======= ====== ======= =======
</TABLE>
- --------------
(a) Reflects the elimination of the operations of stations WRSF-FM, sold
in March 1996, WRXR-FM and WKBG-FM, sold in July 1996, and the
pending Little Rock Disposition and recent Myrtle Beach Disposition.
(b) Reflects cost savings of $792,000 for the year ended December 31,
1996, which would have been achieved in connection with the MMR
Hartford Acquisition had the transaction been consummated as of
January 1, 1996, consisting principally of the elimination of certain
duplicative technical sales and general and administrative functions
due to operating a cluster of stations in the Hartford market.
(c) Reflects $26,000 for the year ended December 31, 1996, in
amortization of intangible assets recorded in connection with the MMR
Merger, Myrtle Beach Acquisition, MMR Hartford Acquisition, related
incremental deferred taxes and change in amortization periods.
(d) To record incremental corporate overhead charges of $1,253,000
associated with the MMR Merger for the year ended December 31, 1996,
and to eliminate MMR's existing corporate overhead of $2,517,000 for
the year ended December 31, 1996.
(e) Elimination of a nonrecurring income of $69,000 for the year ended
December 31, 1996, interest expense of $5,539,000 for the year ended
December 31, 1996, and income tax expense of $7,000 for the year
ended December 31, 1996.
(f) Reflects non-cash compensation charge for the issuance of shares of
the Series A and Series B Convertible Preferred Stock of MMR. The
shares of Series A and Series B stock were issued to certain officers
and advisors of MMR in July and November 1996, respectively, and
converted into Class A Common Stock of the Company upon consummation
of the MMR Merger. Certain of the shares issued pursuant to the
Series A and Series B conversions which were issued to individuals
currently employed by the Company are being held in escrow and will
be released in five equal annual installments ending in April 2001.
F-9
<PAGE>
(2) Liberty Acquisition
Reflects the net effect of the historical operations of the Liberty
Acquisition adjusted for the Washington Dispositions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------------
LIBERTY AS WASHINGTON LIBERTY
REPORTED DISPOSITIONS ACQUISITION
------------ -------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net broadcast revenues .... $25,966 $ (974) $24,992
Station operating
expenses.................. 19,337 (1,563) 17,774
Depreciation/amortization . 5,926 (776) 5,150
Corporate expenses......... 1,566 (88) 1,478
------- ------- -------
Operating income........... (863) 1,453 590
Interest expense........... 3,467 (141) 3,326
Other expense (income) ... 5,935 -- 5,935
Income tax benefit......... (3,378) -- (3,378)
------- ------- -------
Net income (loss).......... $(6,887) $ 1,594 $(5,293)
======= ======= =======
</TABLE>
(3) Prism Acquisition
Reflects the net effect of the historical operations of the Prism
Acquisition adjusted for the Louisville Dispositions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
---------------------------------------
PRISM AS LOUISVILLE PRISM
REPORTED DISPOSITIONS ACQUISITION
---------- -------------- -------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net broadcast revenues .... $16,859 $(3,348) $13,511
Station operating
expenses.................. 13,373 (2,476) 10,897
Depreciation/amortization . 1,599 (358) 1,241
Corporate expenses......... 808 -- 808
------- ------- -------
Operating income (loss) ... 1,079 (514) 565
Interest expense........... 773 -- 773
------- ------- -------
Net loss................... $ 306 $ (514) $ (208)
======= ======= =======
</TABLE>
F-10
<PAGE>
(4) Other 1996 Acquisitions
Reflects the net effect of the combined historical operations of the
Greensboro Acquisition, the Raleigh-Greensboro Acquisitions, the Greenville
Acquisition and the Jackson Acquisitions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
------------------------------------------------------
RALEIGH-
GREENSBORO AND
GREENSBORO GREENVILLE JACKSON
ACQUISITIONS ACQUISITION ACQUISITIONS TOTAL
-------------- ------------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net broadcast revenues .... $3,619 $ 639 $470 $ 4,728
Station operating expenses 2,264 271 334 2,869
Depreciation/amortization . 1,168 244 80 1,492
Corporate expenses ......... 4 107 -- 111
------ -------- ---- --------
Operating income (loss) .... 183 17 56 256
Interest expense............ 59 323 -- 382
Other expense (income) ..... (51) (11,897) -- (11,948)
Income tax expense.......... 45 -- -- 45
------ -------- ---- --------
Net income (loss)........... $ 130 $ 11,591 $ 56 $ 11,777
====== ======== ==== ========
</TABLE>
(5) Houston Exchange and Dallas Disposition
To reflect the exchange of KRLD-AM and the Texas State Networks for
KKRW-FM in the Houston Exchange, and the sale of KTCK-AM in the Dallas
Disposition.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------------------------------------
HOUSTON EXCHANGE
DISPOSITIONS ACQUISITION ADJUSTMENTS* AND DALLAS DISPOSITION
--------------------------------- ------------- -------------- ----------------------
KRLD-AM TSN KTCK-AM KKRW-FM
----------- ---------- ---------- -------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Net broadcast revenues .... $(10,711) $(2,843) $(2,136) $7,010 $ -- $ (8,680)
Station operating expenses (9,316) (2,222) (2,490) 3,721 -- (10,307)
Depreciation/amortization . (1,157) (226) (284) 81 1,302 (284)
Corporate expenses ......... -- -- -- 110 -- 110
Other....................... (1,600) -- (1,900) -- -- (3,500)
-------- ------- ------- ------ ------- --------
Operating income (loss) ... 1,362 (395) 2,538 3,098 (1,302) 5,301
Interest expense ........... (1,482) (373) 188 -- -- (1,667)
Other expense (income) .... -- -- -- 938 -- 938
-------- ------- ------- ------ ------- --------
Net income (loss) .......... $ 2,844 $ (22) $ 2,350 $2,160 $(1,302) $ 6,030
======== ======= ======= ====== ======= ========
</TABLE>
- --------------
(*) To reflect historical depreciation and amortization of KRLD-AM and the
Texas State Networks and the disposition of KTCK-AM.
F-11
<PAGE>
(6) Pro Forma Adjustments
a. Reflects cost savings which would have been realized for the year ended
December 31, 1996 following the Liberty Acquisition, the Chancellor
Exchange, the Prism Acquisition, the Jackson Acquisitions, the Richmond
Acquisition, the Texas Coast Acquisition and Hartford Acquisition and
for the three months ended March 31, 1997 following the Richmond
Acquisition, Hartford Acquisition, and Texas Coast Acquisition, had
these transactions been consummated as of January 1 of their respective
periods. The cost savings consist principally of the elimination of
certain duplicative technical, sales and general and administrative
functions due to operating a cluster of stations in each of its
principal markets, a reduction of employee benefit costs and commission
rates and the elimination of programming personnel due to automation
and simulcasting.
Also reflected are the elimination of non-recurring losses of
Delsener/Slater and the elimination of certain salaries and expenses of
employee-shareholders in connection with the Hartford Acquisition.
Management anticipates there will be additional cost savings associated
with the Hearst Acquisition, Charlotte Exchange and Greenville Exchange;
however the Company does not currently have sufficient information to
determine the extent of the cost savings related to these transactions
for the year ended December 31, 1996 and the three months ended March 31,
1997.
While management believes that such cost savings and the elimination of
non-recurring expenses are reasonably achievable, the Company's ability
to achieve such cost savings and to eliminate the non-recurring expenses
is subject to numerous factors, many of which are beyond the Company's
control. These factors may include difficulties in integrating the
acquired stations and the incurrence of unanticipated severance,
promotional or other costs and expenses. There can be no assurance that
the Company will realize all such cost savings.
b. To reflect interest expense of $12,094,000 and $48,375,000 for the three
months ended March 31, 1997 and the year ended December 31, 1996,
respectively, related to the $450,000,000 of Senior Subordinated Notes at
10.75% issued in 1996, amortization of deferred financing costs of
$42,000 and $1,491,000 for the three months ended March 31, 1997 and the
year ended December 31, 1996, respectively, interest expense of
$4,265,000 and $17,059,000 relating to the borrowings from the Credit
Agreement at 8.25% for the three months ended March 31, 1997 and the year
ended December 31, 1996, respectively, and elimination of existing
interest expense (net of interest on other debt) of $12,652,000 and
$40,453,000 related to the Company and the sellers for the three months
ended March 31, 1997 and the year ended December 31, 1996, respectively.
c. Reflects increase (decrease) in amortization of intangible assets
resulting from the purchase price allocation, deferred taxes recorded and
change in amortization period:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
--------------------------------------------
INCREASE DUE DECREASE DUE
TO PURCHASE TO CHANGE IN
PRICE AMORTIZATION NET INCREASE
ALLOCATION PERIODS (DECREASE)
-------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Liberty Acquisition................ $1,699 $(2,399) $ (700)
Prism Acquisition.................. 1,010 (642) 368
Charlotte WTDR/WLYT Acquisition ... 490 -- 490
Jackson Acquisitions............... 73 35 108
Greenville and Greensboro
Acquisitions...................... 597 (623) (26)
Albany Acquisition ................ 23 -- 23
Hartford Acquisition .............. 910 -- 910
Meadows Acquisition................ 223 (285) (62)
Texas Coast Acquisition............ 1,067 -- 1,067
Delsener/Slater Acquisition........ 1,649 (703) 946
Richmond Acquisition............... 905 (340) 565
Sunshine Acquisition .............. 2,169 (104) 2,065
Hearst Acquisition................. 850 -- 850
Secret Communications Acquisition 5,257 (2,018) 3,239
------
Total Pro Forma adjustments ..... $9,843
======
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 30, 1997
--------------------------------------------
INCREASE DUE DECREASE DUE
TO PURCHASE TO CHANGE IN
PRICE AMORTIZATION NET INCREASE
ALLOCATION PERIODS (DECREASE)
-------------- -------------- --------------
(IN THOUSANDS)
<S> <C> <C> <C>
Liberty Acquisition................
Prism Acquisition..................
Charlotte WTDR/WLYT Acquisition ...
Jackson Acquisitions...............
Greenville and Greensboro
Acquisitions......................
Albany Acquisition ................ $ 6 -- $ 6
Hartford Acquisition .............. 152 -- 152
Meadows Acquisition................ 37 $ (48) (11)
Texas Coast Acquisition............ 89 -- 89
Delsener/Slater Acquisition........ -- -- --
Richmond Acquisition............... 226 (85) 141
Sunshine Acquisition .............. 542 (26) 516
Hearst Acquisition................. 212 -- 212
Secret Communications Acquisition 1,314 (504) 810
------
Total Pro Forma adjustments ..... $1,915
======
</TABLE>
F-12
<PAGE>
d. To reflect depreciation expense for fixed assets associated with the
Texas Coast, Hartford and Richmond Acquisitions as per the Company's
depreciation policy.
e. Amortization of $25,000 and $100,000 for acquisition costs associated
with the Recent and Pending Acquisitions for the three months ended
March 31, 1997 and the year ended December 31, 1996, respectively.
f. To reflect $559,000 in amortization relating to the present value of
the Triathlon consulting fees assigned to the Company under the SCMC
Termination Agreement for the year ended December 31, 1996.
g. To record incremental corporate overhead charges of $3,713,000 for
the year ended December 31, 1996, relating to increases in personnel,
professional fees and administrative expenses associated with the
increased size of the Company due to the Recent and Pending
Acquisitions and the elimination of $1,434,000 for the year ended
December 31, 1996, of the corporate overhead of the sellers.
h. Reflects fees of $3,000,000 incurred by Triathlon and payable to SCMC
for the year ended December 31, 1996. Future fees may be lesser or
greater based upon future acquisition and financing activity by
Triathlon. Minimum annual fees will be $1,000,000 per year.
i. Elimination of acquisition related costs of $5,935,000 recorded on
the income statement of Liberty for the year ended December 31, 1996,
a gain on the sale of assets of $11,920,000 recorded on the books of
ABS Greenville Partners, L.P. for the year ended December 31, 1996
and net income tax benefits of $317,000 and $1,612,000 for the three
months ended March 31, 1997 and the year ended December 31, 1996,
respectively.
j. To record the incremental Series D Preferred Stock and the Series E
Preferred Stock dividends issued in January 1997 to finance a portion
of the Pending Acquisitions at a rate of 6.5% and 12 5/8%,
respectively.
k. To record interest expense of $107,000 and $716,000 for the three
months ended March 31, 1997 and the year ended December 31, 1996,
respectively, in connection with the long-term payments due for the
Delsener/Slater Acquisition, the Texas Coast Acquisition and the
Sunshine Acquisition.
l. Elimination of LMA fees paid by Secret Communications for WJJJ and
WDSY.
m. Elimination of interest expense on Jackson note payable to third
party acquired by Capstar.
n. Reflects the issuance of 70,796 shares of Class A common stock in
connection with the Sunshine Acquisition for a total value of
$2,000,000.
o. To reflect the reduced amortization of goodwill and elimination of
LMA fees of the Chancellor Exchange.
F-13
<PAGE>
(7) CBS Exchange
To reflect the net effect of the exchange of WHFS-FM for KTXQ-FM and
KRRW-FM in the CBS Exchange.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1997
----------------------------------------------
KTXQ-FM WHFS-FM CBS
KRRW-FM DISPOSAL ADJUSTMENTS* EXCHANGE
--------- ---------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net broadcast revenues .... $1,628 $1,688 $ -- $ (60)
Station operating
expenses.................. 1,655 1,025 -- 630
Depreciation/amortization . 54 783 729 --
------ ------ ----- -----
Operating income (loss) ... (81) (120) (729) (690)
Income tax expense......... 32 -- -- 32
------ ------ ----- -----
Net income (loss).......... $ (113) $ (120) $(729) $(722)
====== ====== ===== =====
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
----------------------------------------------
KTXQ-FM WHFS-FM CBS
KRRW-FM DISPOSAL ADJUSTMENTS* EXCHANGE
--------- ---------- -------------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net broadcast revenues........ $9,572 $9,562 $ -- $ 10
Station operating expenses ... 7,116 5,828 -- 1,288
Depreciation/amortization .... 218 1,548 1,330 --
Other ........................ -- 363 -- (363)
------ ------ ------- -------
Operating income.............. 2,238 1,823 (1,330) (915)
Income tax expense (benefit) 783 -- -- 783
------ ------ ------- -------
Net income (loss)............. $1,455 $1,823 $(1,330) $(1,698)
====== ====== ======= =======
</TABLE>
- --------------
* To eliminate depreciation of KTXQ-FM and KRRW-FM and reflect depreciation
of WHFS-FM.
(8) Secret Communications Acquisition
Reflects the Secret Communications Acquisition after the pending
acquisition of WJJJ-FM in Pittsburgh, Pennsylvania by Secret Communications.
The Company has identified nonrecurring marketing costs of approximately
$580,000 in 1996 at the Pittsburgh stations. These costs have not been
reflected as a pro forma adjustment.
F-14
<PAGE>
(9) Charlotte Exchange
Reflects the pending transfer of WDSY-FM and $20,000,000 in exchange for
WRFX-FM in the Charlotte Exchange.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1997
-----------------------------------------------------
WDSY-FM WRFX-FM CHARLOTTE
DISPOSITION ACQUISITION ADJUSTMENTS EXCHANGE
------------- ------------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues................... $(1,253) $2,161 $ 908
Station operating expenses .... (598) 1,656 1,058
Depreciation, amortization and
acquisition related costs .... -- 758 $(633)* 125
------- ------ ----- ------
Operating income............... (655) (253) 633 (275)
------- ------ ----- ------
Net income (loss).............. $ (655) $ (253) $ 633 $ (275)
======= ====== ===== ======
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1996
-----------------------------------------------------
WDSY-FM WRFX-FM CHARLOTTE
DISPOSITION ACQUISITION ADJUSTMENTS EXCHANGE
------------- ------------- ------------- -----------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Net revenues................... $(3,697) $9,919 $6,222
Station operating expenses .... (1,593) 5,478 3,885
Depreciation, amortization and
acquisition related costs .... -- 2,907 $(2,407)* 500
------- ------ ------- ------
Operating income............... (2,104) 1,534 2,407 1,837
------- ------ ------- ------
Net income (loss).............. $(2,104) $1,534 $ 2,407 $1,837
======= ====== ======= ======
</TABLE>
- ------------
* To reflect historical depreciation of WDSY-FM net of decrease in
amortization due to the exchange allocation.
F-15
<PAGE>
GLOSSARY
"Albany Acquisition" means the acquisition, consummated in January 1997,
of substantially all of the assets used in the operation of WYSR-FM,
operating in Albany, New York.
"Capstar Disposition" means the pending sale of the Jackson stations and
the Biloxi station.
"CBS Exchange" means the exchange by the Company, consummated in March
1997 of radio station WHFS-FM, operating in Washington, D.C./Baltimore,
Maryland, for KTXQ-FM and KRRW-FM, both operating in Dallas, Texas, and owned
by CBS, Inc.
"Chancellor Exchange" means the pending exchange of the Company's radio
stations WBAB-FM, WHFM-FM, WBLI-FM and WGBB-AM, each operating on Long
Island, New York, for WFYV-FM and WAPE-FM, both operating in Jacksonville,
Florida, and a payment to the Company of $11.0 million in cash.
"Charlotte Acquisition" means the acquisition, consummated in February
1996, of WTDR-FM and WLYT-FM, both operating in Charlotte, North Carolina.
"Charlotte Exchange" means the pending exchange of one radio station in
Pittsburgh, Pennsylvania and $20 million in cash for one radio station in
Charlotte, North Carolina.
"Credit Agreement" means the definitive credit agreement the Company
entered into on June 23, 1997, which increases amounts available under its
senior credit facility to $400.0 million.
"Dallas Disposition" means the sale, consummated in October 1996, of radio
station KTCK-AM, operating in Dallas, Texas.
"Delsener/Slater Acquisition" means the acquisition, consummated in
January 1997, of Delsener/ Slater Enterprises, Ltd., a concert promotion
company, and certain affiliated entities (collectively, "Delsener/Slater").
"Greensboro Acquisition" means the acquisition, consummated in November
1996, of substantially all of the assets of WHSL-FM, operating in Greensboro,
North Carolina.
"Greenville Acquisition" means the acquisition, consummated in June 1996,
of substantially all of the assets of WROQ-FM, operating in
Greenville-Spartanburg, South Carolina.
"Greenville Exchange" means the pending exchange of two radio stations in
Wichita, Kansas and one radio station in Daytona Beach, Florida for three
radio stations in Greenville, South Carolina.
"Hartford Acquisition" means the pending acquisition by the Company of
WWYZ-FM, which operates in Hartford, Connecticut.
"Hearst Acquisition" means the pending acquisition of two radio stations
operating in Pittsburgh, Pennsylvania and two stations in Milwaukee,
Wisconsin for cash.
"Houston Exchange" means the exchange, consummated in December 1996, of
the Company's radio station KRLD-AM, operating in Dallas, Texas, and the
Company's Texas State Networks for radio station KKRW-FM, operating in
Houston, Texas.
"Jackson Acquisitions" means, collectively, the acquisitions, consummated
in the third quarter of 1996, of substantially all of the assets of WJDX-FM,
WSTZ-FM and WZRX-AM, each operating in Jackson, Mississippi.
"Liberty Acquisition" means the acquisition, consummated in July 1996, of
Liberty Broadcasting Incorporated, which owned and operated or provided
programming to or sold advertising on behalf of 14 FM and six AM radio
stations located in six markets: Washington, DC/Baltimore, Maryland;
Nassau-Suffolk, New York; Providence, Rhode Island; Hartford, Connecticut;
Albany, New York; and Richmond, Virginia.
"Little Rock Disposition" means the pending sale of KOLL-FM, operating in
Little Rock, Arkansas, to Triathlon.
F-16
<PAGE>
"Louisville Acquisition" means the acquisition, consummated in September
1996, from Prism of substantially all of the assets of WVEZ-FM, WTFX-FM and
WWKY-AM, each operating in Louisville, Kentucky.
"Louisville Dispositions" means the sale, consummated in October 1996, of
the three stations acquired in the Louisville Acquisition.
"Meadows Acquisition" means the acquisition, consummated in March 1997, of
the Meadows Music Theater in Hartford, Connecticut.
"MMR Hartford Acquisition" means MMR's acquisition, consummated in
September 1996, of WKSS-FM, operating in Hartford, Connecticut.
"MMR Merger" means the merger, consummated in November 1996, of a
wholly-owned subsidiary of the Company with and into MMR, as a result of
which MMR became a wholly-owned subsidiary of the Company.
"Myrtle Beach Acquisition" means MMR's acquisition of WMYB-FM, operating
in Myrtle Beach, South Carolina.
"Myrtle Beach Disposition" means the pending sale of WYAK-FM and WMYB-FM,
both operating in Myrtle Beach, South Carolina.
"Pending Transactions" means, collectively, the Capstar Disposition, the
Richmond Acquisition, the Little Rock Disposition, the Secret Communications
Acquisition, the Hearst Acquisition and the Sunshine Acquisition.
"Prism Acquisition" means the acquisition, consummated in the third
quarter of 1996, of substantially all of the assets of Prism used in the
operation of ten FM and six AM radio stations located in five markets:
Louisville, Kentucky; Jacksonville, Florida; Raleigh, North Carolina; Tucson,
Arizona; and Wichita, Kansas.
"Raleigh-Greensboro Acquisitions" means the acquisition, consummated in
June 1996, of substantially all of the assets of WMFR-AM, WMAG-FM and
WTCK-AM, each operating in Greensboro, North Carolina, and WTRG-FM and
WRDU-FM, both operating in Raleigh, North Carolina.
"Recent Transactions" means, collectively, the MMR Merger, the Greensboro
Acquisition, the Liberty Acquisition, the Prism Acquisition, the Jackson
Acquisitions, the Greenville Acquisition, the CBS Exchange, the Louisville
Acquisition, the Raleigh-Greensboro Acquisitions, the Houston Exchange, the
Albany Acquisition, the Delsener/Slater Acquisition, the acquisitions of
WTDR-FM and WLYT-FM, both operating in Charlotte, North Carolina, KTCK-FM,
operating in Dallas, Texas, and KYXY-FM, operating in San Diego, California,
the Washington Dispositions, the Louisville Dispositions, the Dallas
Disposition.
"Richmond Acquisition" means the acquisition, consummated in July 1997, of
ABS Communications L.L.C., which owns or will acquire WVGO-FM, WLEE-FM,
WKHK-FM and WBZU-FM, each operating in Richmond, Virginia.
"Secret Communications Acquisition" means the acquisition of WFBQ-FM,
WRZX-FM and WNDE-AM, consummated in April 1997, each operating in
Indianapolis, Indiana, and WDVE-FM, WXDX-FM, and WJJJ-FM, consummated in June
1997, each operating in Pittsburgh, Pennsylvania.
"Sunshine Acquisition" means the acquisition, consummated in June 1997, of
Sunshine Promotions, Inc. a concert promotion company, and certain affiliated
entities (collectively "Sunshine").
"Texas Coast Acquisition" means the acquisition, consummated in February
1997, of radio stations KQUE-FM and KNUZ-AM in Houston, Texas.
"Washington Dispositions" means the sale, consummated in July 1996, of
three of the stations acquired from Liberty Broadcasting, each operating in
the Washington, D.C./Baltimore, Maryland market.
F-17
<PAGE>
===============================================================================
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
SFX BROADCASTING, INC.,
BORROWER
THE SUBSIDIARIES OF BORROWER
FROM TIME TO TIME PARTIES HERETO
THE BANK OF NEW YORK,
AS AGENT FOR THE LENDERS AND INDIVIDUALLY AS A LENDER
AND
THE LENDERS FROM TIME TO TIME PARTIES HERETO
DATED AS OF JUNE 23, 1997
===============================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
CERTAIN DEFINITIONS AND TERMS
Section 1.1 Defined Terms.............................................1
Section 1.2 Other Definitional Provisions............................29
ARTICLE II
COMMITMENTS AND LOANS
Section 2.1 Loans....................................................30
Section 2.2 Manner of Borrowing/Converting/Continuing
and Disbursement.......................................30
Section 2.3 Interest.................................................33
Section 2.4 Commitment Fee...........................................34
Section 2.5 Prepayments..............................................34
Section 2.6 Reductions and Changes of Commitments....................37
Section 2.7 Non-Receipt of Funds by the Agent........................39
Section 2.8 Reimbursement............................................39
Section 2.9 Payments.................................................40
Section 2.10 Booking Loans............................................41
Section 2.11 Taxes....................................................41
Section 2.12 LIBOR Rate Determination Inadequate......................43
Section 2.13 Illegality...............................................44
Section 2.14 Increased Costs..........................................44
Section 2.15 Effect on Alternate Base Rate Loans......................45
Section 2.16 Capital Adequacy.........................................46
Section 2.17 Letters of Credit........................................46
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to the
Effectiveness of Third Amended and
Restated Credit Agreement..............................55
Section 3.2 Conditions Precedent to All Loans and
Letters of Credit......................................59
Section 3.3 Permitted Acquisitions...................................60
Section 3.4 Loans....................................................60
-i-
<PAGE>
Page
Section 3.5 Continuations/Conversions................................61
Section 3.6 Materiality of Conditions................................61
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Corporate Existence and Authority........................61
Section 4.2 Authorization; Binding Obligations.......................61
Section 4.3 Compliance with Laws and Documents;
No Default.............................................62
Section 4.4 Ownership................................................62
Section 4.5 Other Corporate or Trade Names...........................63
Section 4.6 Fiscal Year..............................................63
Section 4.7 Business.................................................63
Section 4.8 Relationship with Lenders................................63
Section 4.9 Financial Statements.....................................63
Section 4.10 Litigation...............................................64
Section 4.11 Taxes....................................................64
Section 4.12 Government Regulation....................................64
Section 4.13 Employee Benefit Plans...................................65
Section 4.14 Purpose of Loan..........................................67
Section 4.15 Certain Material Agreements..............................67
Section 4.16 No Consents..............................................67
Section 4.17 Environmental Laws; Hazardous Substances.................68
Section 4.18 Chief Executive Office; Location of
Collateral; Assumed and Trade Names;
Priority of Liens......................................68
Section 4.19 Insurance................................................68
Section 4.20 Real Property; Leases....................................69
Section 4.21 Ownership of Stations....................................69
Section 4.22 Possession of Franchises, Licenses, Etc..................69
Section 4.23 FCC, Copyright, Patent and Trademark Matters.............69
Section 4.24 No Adverse Effect........................................70
Section 4.25 No Contribution Obligations..............................70
Section 4.26 Solvency.................................................70
Section 4.27 Management Fees..........................................70
Section 4.28 Disclosure...............................................70
Section 4.29 License Subsidiaries.....................................71
Section 4.30 Existing Debt............................................71
Section 4.31 Existing Subordinated Note Indenture.....................71
Section 4.32 1996 Indenture...........................................72
Section 4.33 Investments..............................................72
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ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1 Use of Proceeds..........................................72
Section 5.2 Books and Records........................................72
Section 5.3 Items to be Furnished....................................72
Section 5.4 Inspection...............................................78
Section 5.5 Taxes....................................................78
Section 5.6 Maintenance of Corporate Existence,
Assets and Business....................................78
Section 5.7 Insurance; Condemnation..................................78
Section 5.8 Compliance with Applicable Laws..........................80
Section 5.9 Environmental Laws.......................................80
Section 5.10 Further Assurances.......................................80
Section 5.11 Contractual Obligations..................................81
Section 5.12 New Subsidiaries/Collateral..............................81
Section 5.13 Further Documentation....................................82
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1 Debt.....................................................83
Section 6.2 Liens....................................................83
Section 6.3 Investments..............................................83
Section 6.4 Deposits.................................................83
Section 6.5 Limitation on Fundamental Changes........................84
Section 6.6 Transactions with Affiliates.............................84
Section 6.7 Employee Benefit Plans...................................84
Section 6.8 Sale and Leaseback Transactions..........................87
Section 6.9 Management Agreements....................................87
Section 6.10 Restricted Payments......................................88
Section 6.11 Issuance of Securities...................................88
Section 6.12 Sale of Assets, Exchange of Assets and
Permitted Acquisitions.................................89
Section 6.13 Redemption of Notes......................................91
Section 6.14 Hazardous Substances.....................................91
Section 6.15 New Businesses...........................................91
Section 6.16 Fiscal Year and Accounting Methods.......................91
Section 6.17 Fixed Charge Coverage Ratio..............................91
Section 6.18 Pro Forma Interest Expense Ratio.........................91
Section 6.19 Total Leverage Ratio.....................................91
Section 6.20 Senior Leverage Ratio....................................92
Section 6.21 Pro Forma Debt Service Ratio.............................92
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Page
Section 6.22 Material Agreements......................................93
ARTICLE VII
DEFAULT
Section 7.1 Payment of Obligations...................................94
Section 7.2 Certain Covenants........................................94
Section 7.3 Other Covenants..........................................94
Section 7.4 Necessary Authorization and the
Communications Act.....................................94
Section 7.5 Interruption of Operations...............................95
Section 7.6 Voluntary Debtor Relief..................................95
Section 7.7 Involuntary Proceedings..................................95
Section 7.8 Final Orders.............................................95
Section 7.9 Default Under Other Debt.................................95
Section 7.10 Misrepresentation........................................96
Section 7.11 Change of Control........................................96
Section 7.12 Security Documents.......................................96
ARTICLE VIII
RIGHTS AND REMEDIES
Section 8.1 Remedies On Default......................................96
Section 8.2 Obligor Liability Absolute...............................97
Section 8.3 Performance by Lenders...................................97
Section 8.4 Delegation of Duties and Rights..........................98
Section 8.5 Lenders Not in Control...................................98
Section 8.6 Waivers by Lenders.......................................98
Section 8.7 Cumulative Rights........................................98
Section 8.8 Application of Proceeds..................................98
Section 8.9 Diminution in Value of Collateral........................99
Section 8.10 Certain Proceedings......................................99
Section 8.11 Right of Set-off........................................100
Section 8.12 Sharing of Payments.....................................100
ARTICLE IX
THE AGENT
Section 9.1 Appointment.............................................101
Section 9.2 Delegation of Duties....................................101
Section 9.3 Exculpatory Provisions..................................101
Section 9.4 Reliance by Agent.......................................102
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Page
Section 9.5 Notice of Default.......................................102
Section 9.6 Non-Reliance on Agent and Other Lenders.................103
Section 9.7 Indemnification.........................................103
Section 9.8 Agent in Its Individual Capacity........................104
Section 9.9 Successor Agent.........................................104
Section 9.10 Benefits of Article.....................................105
ARTICLE X
MISCELLANEOUS
Section 10.1 Changes in GAAP.........................................105
Section 10.2 Expenses of Agent and Lenders...........................106
Section 10.3 Communications..........................................106
Section 10.4 Form and Number of Documents............................107
Section 10.5 Survival................................................108
Section 10.6 Confidentiality.........................................108
Section 10.7 VENUE; SERVICE OF PROCESS...............................108
Section 10.8 WAIVER OF JURY TRIAL....................................109
Section 10.9 Severability............................................109
Section 10.10 Conditions to Effectiveness; Assignment;
and Waiver of Rights..................................109
Section 10.11 General Indemnification of Lenders......................110
Section 10.12 Environmental Indemnification of Lenders................111
Section 10.13 Multiple Counterparts...................................111
Section 10.14 Parties Bound; Participations; Assignments..............112
Section 10.15 Entire Agreement........................................113
Section 10.16 Governing Law...........................................113
Section 10.17 Subordination of Intercompany Obligations...............113
Exhibit A - Form of Promissory Note
Exhibit B - Form of Borrower Pledge and Security
Agreement
Exhibit C - Form of Borrower Security Agreement
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Guaranty
Exhibit F - Form of Intercompany Note
Exhibit G - Form of Operating Agreement
Exhibit H - Form of Subsidiary Pledge and
Security Agreement
Exhibit I - Form of Subsidiary Security Agreement
Exhibit J - Form of Letter of Credit Reimbursement
Agreement
Exhibit K - Form of Officers' Certificate
Exhibit L - Form of Borrower's Counsel Opinion
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Exhibit M - Form of Borrower's FCC Counsel Opinion
Exhibit N - Form of Perfection Certificate
Exhibit O - [Intentionally Left Blank]
Exhibit P - Form of Solvency Certificate
Exhibit Q - Form of Funding Certificate
Exhibit R - Form of Assignment and Acceptance Agreement
Exhibit S - Form of Letter of Credit Request
Exhibit T - Form of Assumption Agreement
Schedule A - Schedule of Commitments
Schedule 1.1(A) - Domestic Lending Offices of Lenders
Schedule 1.1(B) - LIBOR Lending Offices of Lenders
Schedule 1.1(C) - Non-Recurring Expense Adjustments
Schedule 1.1(D) - Permitted Debt
Schedule 1.1(E) - Permitted Liens
Schedule 3.1(c)-1 - Mortgaged Properties
Schedule 3.1(c)-2 - Fixture Filing Locations
Schedule 4.1 - Qualified Jurisdictions
Schedule 4.4(A) - Shareholder Agreements
Schedule 4.4(B) - Capital Stock Rights
Schedule 4.4(C) - Restrictions on Transfer
Schedule 4.4(D) - Subsidiaries
Schedule 4.10 - Litigation
Schedule 4.11 - Taxes
Schedule 4.15 - Certain Material Agreements
Schedule 4.17 - Environmental Matters
Schedule 4.21 - Stations Owned
Schedule 4.23 - FCC Matters
Schedule 4.29 - Stations Without License Subsidiaries
Schedule 4.33 - Investments
Schedule 5.3(n) - Mortgagee Policies of Title Insurance Amounts
Schedule 6.6 - Transactions with Affiliates
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT is entered
into as of June 23, 1997 among SFX Broadcasting, Inc., a Delaware corporation
("Borrower"), the Subsidiaries from time to time parties hereto, the Lenders
from time to time parties hereto and The Bank of New York, as Agent for the
Lenders, and amends and restates the Second Amended and Restated Credit
Agreement, dated November 22, 1996 (as amended from time to time thereafter),
among the Borrower, the Subsidiaries from time to time parties thereto, the
lenders from time to time parties thereto and the Agent.
PRELIMINARY STATEMENT
Borrower has requested that the Lenders make loans to it
from time to time in an amount not to exceed $400,000,000 at any time
outstanding for the purpose of (a) financing Permitted Acquisitions and the
payment of cash deposits in connection with proposed acquisitions, (b)
providing availability for working capital and general corporate purposes,
including transaction expenses and (c) the issuance of standby Letters of
Credit pursuant to this Agreement. The Lenders are prepared to make such loans
subject to the terms and conditions set forth below.
In consideration of the promises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS AND TERMS
Section 1.1 Defined Terms. For purposes of this Agreement,
the following terms shall have the following meanings:
"ABS" means ABS Communications, L.L.C., a Virginia
limited liability company.
"Acquisition Agreement" means any purchase agreement entered
into by Borrower in connection with a proposed Permitted Acquisition and any
LMA Agreement entered into by Borrower in connection with a proposed Permitted
Acquisition, or either thereof.
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"Acquisition Deposit Cap" shall have the meaning ascribed to
such a term in Section 6.4.
"Affiliate" of any Person means (a) any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person and (b) any officer or director of such Person. As
used in this definition, "control" (including, with its correlative meanings,
"controlled by" and "under common control with") means the possession,
directly or indirectly, of power either to (a) vote 10% or more of the
securities or partnership or other ownership interests of a Person having
ordinary voting power for the election of directors or Persons of equivalent
position or (b) direct or cause the direction of the management or policies of
a Person, in each case, whether through ownership of securities or partnership
or other ownership interests, by contract or otherwise. Notwithstanding the
foregoing, the Obligors shall not be deemed to be Affiliates of each other.
"Agent" means, as the context requires, The Bank of New York
in its capacity as agent for the Lenders under this Agreement and the other
Loan Documents and The Bank of New York in its capacity as the issuer of
Letters of Credit pursuant to this Agreement and the Letter of Credit
Reimbursement Agreement, and its successors and assigns in such capacities as
appointed pursuant to Section 9.9.
"Aggregate Commitment" means the collective obligations of
the Lenders to make the Loans to Borrower pursuant to Article II in an
aggregate principal amount at any one time outstanding not to exceed
$400,000,000, as such amount may be reduced from time to time in accordance
with the terms of this Agreement.
"Agreement" means this Third Amended and Restated Credit
Agreement, including the Schedules and Exhibits, as the same may be amended,
modified, restated, supplemented, renewed, extended, rearranged or substituted
from time to time.
"Alternate Base Rate" or "ABR" means the fluctuating rate of
interest per annum as shall be in effect from time to time equal to the sum of
(a) the higher of (i) the rate of interest announced publicly by the Agent
from time to time as its U.S. dollar prime commercial lending rate (which rate
may or may not be the lowest rate of interest charged by the Agent) and (ii)
the sum of 0.5% plus the Federal Funds Rate, plus, in each case, (b) the
Applicable Margin. The Alternate Base Rate shall be adjusted automatically as
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of the opening of business on the effective date of each change in the prime
rate or Federal Funds Rate to account for such change.
"Alternate Base Rate Loan" means any Loan that bears
interest at the Alternate Base Rate.
"Applicable Lending Office" means, with respect to a Lender,
such Lender's Domestic Lending Office in the case of Alternate Base Rate Loans
and such lender's LIBOR Lending Office in the case of LIBOR Loans.
"Applicable Letter of Credit Fee Percentage" means, at any
time, the per annum percentage equal to the Applicable Margin with respect to
LIBOR Loans at such time, and when the Default Rate is in effect with respect
to Loans, at such Applicable Margin with respect to LIBOR Loans at such time
plus 2%.
"Applicable Margin" will be based on the Total Leverage
Ratio and means the following per annum percentages applicable in the
following situations:
- ------------------------------------------------------------------------------
TOTAL LEVERAGE RATIO
GREATER THAN OR
EQUAL TO LESS THAN ABR + LIBOR +
- ------------------------------------------------------------------------------
6.50x 1.000% 2.250%
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6.00x 6.50x 0.750% 2.000%
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5.50x 6.00x 0.375% 1.625%
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5.00x 5.50x 0.125% 1.375%
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4.50x 5.00x 0% 1.125%
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4.00x 4.50x 0% 0.875%
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3.50x 4.00x 0% 0.750%
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3.50x 0% 0.500%
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The Total Leverage Ratio for purposes of determining the
Applicable Margin on Loans made on the Closing Date through the first
Calculation Date occurring after the Closing Date shall be as set forth on the
Compliance Certificate to be delivered to the Lenders pursuant to Section
3.1(x). Thereafter, the Applicable Margin payable by Borrower on the Loans
outstanding hereunder from time to time shall be subject to reduction or
increase, as applicable, in accordance with the table above according to the
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performance of Borrower for the preceding twelve month period as tested by the
Total Leverage Ratio. Any reduction or increase in the Applicable Margin
provided for herein shall be effective as of the applicable Calculation Date
and, subject to the last two sentences of this definition, continue in effect
to the next succeeding Calculation Date. The Applicable Margin shall be
calculated by Borrower and set forth on the Compliance Certificate to be
delivered pursuant to Section 5.3(b). Promptly after receipt by the Agent of
each Compliance Certificate that includes Borrower's calculation of the Total
Leverage Ratio and Applicable Margin, the Agent shall notify the Lenders of
the Applicable Margin to be used for the relevant period. If the Financial
Statements of Borrower and the Compliance Certificate setting forth the Total
Leverage Ratio and the Applicable Margin are not received by the Agent on or
prior to four Business Days after the date specified in Section 5.3(b), after
such fourth Business Day the Applicable Margin for the relevant period shall
be determined as if the Total Leverage Ratio equals or exceeds 6.50 to 1.00
until the third Business Day after such Financial Statements and Compliance
Certificate are received by the Agent. Notwithstanding anything above to the
contrary, if the Compliance Certificate required to be delivered pursuant to
Section 5.3(k) prior to any Permitted Acquisition indicates that the Total
Leverage Ratio, after giving effect to such Permitted Acquisition, would
result in an increase or decrease in the Applicable Margin for the then
relevant period, the Applicable Margin shall be increased or decreased, as
applicable, to the applicable percentage amount determined from such
Compliance Certificate as of the date of such acquisition.
"Applicable Proceeds" means any and all proceeds of casualty
insurance or condemnation held by the Agent pursuant to Section 5.7 in
connection with a casualty or condemnation event for which the conditions for
use thereof by any Obligor, as set forth in Section 5.7, shall not have been
satisfied.
"Assignee" means any Eligible Assignee of a Lender
pursuant to an Assignment Agreement.
"Assignment Agreement" has the meaning set forth in
Section 10.14(c).
"Assignor" has the meaning set forth in Section 10.14(c).
"Authorized Signatory" means one or more officers of
Borrower as may be duly authorized and designated by Borrower in writing to
the Agent to execute documents, agreements and instruments on behalf of
Borrower and to request Loans.
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"Available Amount" means, an amount equal to the excess, if
any, of (a) the amount of the Aggregate Commitment minus (b) (x) the aggregate
principal amount of all Loans then outstanding under such commitment, plus (y)
the outstanding amount of Letter of Credit Obligations.
"Borrower" has the meaning set forth in the introductory
paragraph of this Agreement.
"Borrower Pledge Agreement" means the Third Amended and
Restated Pledge and Security Agreement dated the date hereof, executed and
delivered by Borrower and the Agent, substantially in the form of Exhibit B,
as such agreement may be amended, modified, restated, supplemented, renewed,
extended, rearranged or substituted from time to time.
"Borrower Security Agreement" means the Third Amended and
Restated Security Agreement, dated the date hereof, executed and delivered by
Borrower, substantially in the form of Exhibit C, as such agreement may be
amended, modified, restated, supplemented, renewed, extended, rearranged or
substituted from time to time.
"Borrowing Date" means any Business Day prior to the
Maturity Date on which the Borrower desires to borrow any Loans. Such
"Borrowing Date" shall be specified in each notice of borrowing pursuant to
Section 2.2(a) and 2.2(b).
"Broadcast Cash Flow ("BCF")" means Operating Cash Flow, to
the extent attributable to radio broadcasting operations, plus all corporate
expenses.
"Budget" has the meaning set forth in Section 5.3(d).
"Business Day" means (a) for all purposes other than as
provided in clause (b) below, any day except Saturday, Sunday and any day that
is a legal holiday or a day on which Lenders are authorized or required to be
closed in New York City and (b) with respect to all notices and determinations
in connection with any borrowings consisting of or payments of principal and
interest in respect of LIBOR loans, any day that is a Business Day described
in clause (a) above and that is also a day for trading between prime banks in
the London interbank market.
"CAA" means the Clean Air Act, 42 U.S.C.ss.ss.7401 et seq.,
as amended.
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"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ss.ss. 9601 et seq.,
as amended.
"CWA" means the Clean Water Act, 33 U.S.C. ss.ss. 1251 et
seq., as amended.
"Calculation Date" means for any fiscal quarter the fifth
Business Day after the date that the quarterly Financial Statements are
required to be delivered to the Lenders pursuant to Section 5.3(b) or the
fifth Business Day after the delivery of a Compliance Certificate delivered
other than with respect to a fiscal quarter.
"Capital Expenditure" means any expenditure (net of any
casualty insurance proceeds or condemnation awards used to replace fixed
assets following a casualty event or condemnation with respect thereto) by any
Person that, in conformity with GAAP, is required to be accounted for as a
capital expenditure on the consolidated balance sheet of Borrower.
"Capital Lease" means any obligations in respect of any
lease of any property (whether real, personal or mixed) that, in conformity
with GAAP, are required to be capitalized on the consolidated balance sheet of
Borrower.
"Change of Control" means any of (a) a "change of control",
as such term is defined in the 1996 Indenture, (b) the failure of Robert F.X.
Sillerman ("Sillerman"), any Affiliate of Sillerman or, together with any
executor, heir or successor appointed to take control of Sillerman's affairs
in the event of his death, disability or incapacity, to own directly or
indirectly, in the aggregate, of record and beneficially, more than 35% of the
voting power of all issued and outstanding capital stock of the Borrower, or
(c) if within 90 days after the date Sillerman ceases to be employed by
Borrower in his present capacity, a replacement for Sillerman reasonably
satisfactory to the Required Lenders has not been appointed.
"Charter Documents" means with respect to any Person (a) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such Person, (b) the bylaws (or the equivalent governing
documents) of such Person and (c) any document setting forth the designation,
amount and relative rights, limitations and preferences of any class or series
of such Person's capital stock or of any rights in respect of such Person's
capital stock (or the equivalent ownership interest).
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"Class A Common Stock" means the Class A Common Stock of
the Borrower.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended,
and all regulations promulgated and rulings issued thereunder.
"Collateral" has the meaning set forth in
Section 5.12(b).
"Commitment" means, as to any Lender, such Lender's loan
commitment in the amount set forth opposite such Lender's name under the
heading "Commitment" on Schedule A attached hereto, as such amount may be
reduced from time to time.
"Commitment Fee" has the meaning set forth in
Section 2.4.
"Communications Act" means the Communications Act of 1934,
as amended, and the rules and regulations and published policies thereunder,
as from time to time in effect.
"Compliance Certificate" means a certificate executed by the
Chief Executive Officer, Chief Financial Officer, President, Treasurer,
Controller or any Executive Vice President of Borrower substantially in the
form of Exhibit D and containing such other certifications, statements,
calculations, explanations and conclusions as the Agent or the Required
Lenders may reasonably request with respect to compliance with any or all of
the covenants and conditions contained in this Agreement or any other Loan
Document.
"Contractual Obligations" of any Person means any provision
of any security issued by such Person or indenture, mortgage, deed of trust,
security agreement, lease agreement, guaranty, contract, undertaking,
instrument or other agreement to which such Person is a party or by which it
or any of its property, assets or revenues is bound or to which any of its
property, assets or revenues is subject, including, without limitation, with
respect to the Obligors, obligations in respect of Material Leases and LMA
Agreements.
"Conversion", "Convert", "Converted" and "Converting" each
refers to a conversion of Alternate Base Rate Loans into LIBOR Loans or LIBOR
Loans into Alternate Base Rate Loans.
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"Current Date" means any date not more than thirty days
prior to the date of this Agreement.
"Current Financials" means the audited consolidated
Financial Statements of Borrower and its Subsidiaries for the fiscal year
ended December 31, 1996 and the unaudited consolidated Financial Statements of
Borrower and its Subsidiaries as at March 31, 1997.
"Customary Permitted Liens" means Liens on the property or
assets of any Person (other than Liens arising pursuant to any Environmental
Law and Liens in favor of the PBGC):
(a) with respect to the payment of Taxes, assessments or
governmental charges or levies which are not yet due or which are
being contested in good faith by appropriate proceedings and with
respect to which adequate reserves are being maintained in accordance
with GAAP;
(b) of landlords arising by statute and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen, banker's
liens and other Liens imposed by Law created in the ordinary course
of business of such Person for amounts not yet due or which are being
contested in good faith by appropriate proceedings and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(c) incurred on pledges and deposits made in the ordinary
course of business of such Person in connection with worker's
compensation, unemployment insurance, pensions or other types of
social security benefits or to secure the performance of statutory
obligations or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money), surety,
warranty, advance payment, appeal, customs, performance bonds and
similar obligations;
(d) to secure the payment of all or a part of the purchase
price of property or assets used in the ordinary course of business,
provided that (a) such property or assets are used in the same or
similar line of business as the Borrower or any Obligor is engaged in
on the date hereof and (b) at the time of incurrence of any such
Lien, the aggregate principal amount of the obligations secured by
such Lien does not exceed the cost of the assets or property (or
portions
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<PAGE>
thereof) so acquired and attaches to such assets or property
within 120 days of the purchase thereof;
(e) arising with respect to zoning restrictions, licenses,
covenants, building restrictions and other similar charges or
encumbrances on the use of real property of such Person which do not
materially interfere with the ordinary conduct of such Person's
business;
(f) any interest or title of a lessor under any lease
permitted hereunder;
(g) constituting the filing of notice financing statements
of a lessor's rights in and to personal property leased to such
Person in the ordinary course of such Person's business; and
(h) defects and irregularities in titles, survey exceptions,
encumbrances, easements or reservations of others for rights-of-way,
roads, pipelines, railroad crossings, services, utilities or other
similar purposes, outstanding mineral rights or reservations
(including rights with respect to the removal of material resource)
which do not materially diminish the value of the surface estate,
assuming usage of such surface estate similar to that being carried
on by any Obligor as of the date of this Agreement.
"Debt" of any Person means, without duplication (a) (i) any
liability of such Person for borrowed money (including, without limitation,
reimbursement obligations with respect to surety bonds, letters of credit,
bankers acceptances and similar instruments), for the deferred purchase price
of property or services, under conditional sale or other title retention
agreements relating to property purchased by such Person or in respect of
which interest charges are customarily paid (other than trade payables that
are not more than 90 days past due or accrued account liabilities other than
for borrowed money arising in the ordinary course of business of such Person
in connection with the purchase of property or services), (ii) any liability
of such Person evidenced by notes, bonds, debentures or similar instruments,
(iii) any liability secured by any Lien on any property of such Person,
whether or not such Person has assumed such liability or otherwise become
liable for the payment thereof and (iv) any liability of such Person in
respect of Capital Leases, (b) any liability of such Person (other than trade
payables that are not more than 90 days past due, reserves for deferred income
taxes and accrued account liabilities other than for borrowed money arising in
the ordinary course of
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business of such Person) that would be included as a liability on a balance
sheet of such Person prepared in accordance with GAAP and (c) the full amount
of any liability of others described in the preceding clause (a) or (b) in
respect of which such Person has incurred, assumed or acquired a liability by
means of a Guaranty Obligation.
"Debt Service" means, for the most recently completed twelve
months, the sum of (a) Interest Expense, (b) the scheduled maturities of Total
Funded Debt which shall include prepayments mandated by Section 2.6(c), (c)
the scheduled redemption of Series B Preferred Stock and (d) obligations due
during such period as a result of the exercise of any put or call rights with
respect to the Series C Preferred Stock.
"Debtor Relief Laws" means the Bankruptcy Code of the United
States of America and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments or similar debtor relief Laws from time
to time in effect affecting the Rights of creditors generally.
"Default" means the occurrence of any event which, with
notice or lapse of time or both, could become an Event of Default.
"Default Rate" means a per annum rate of interest equal to
the sum of the Alternate Base Rate or the LIBOR Rate, as applicable, plus 2.0%
per annum.
"Dollars" and "$" means lawful currency of the United
States of America.
"Domestic Lending Office" means, with respect to a Lender or
the Letter of Credit Issuing Bank, the office designated as its Domestic
Lending Office on Schedule 1.1(A) and such other office of such Lender or any
of its Affiliates or the Letter of Credit Issuing Bank hereafter designated by
notice to Borrower and the Agent.
"Eligible Assignee" means (a) a Lender or any Affiliate of a
Lender, (b) a commercial bank reasonably acceptable to the Agent organized
under the Laws of the United States of America or any state thereof and having
a combined capital, surplus and undivided profits of not less than
$100,000,000 or (c) a finance company, savings and loan association, savings
bank, mutual fund, pension fund, insurance company or other financial
institution acceptable to the Agent.
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"Environmental Law" means any Law (a) pertaining to air
emissions, water discharge, noise emissions, solid or liquid waste disposal,
hazardous wastes or materials, industrial hygiene, (b) pertaining to other
environmental matters or conditions on, under, or about real property or any
portion thereof or otherwise regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
including, without limitation, the CAA, CWA, CERCLA, OSHA, RCRA and similar
Laws of any Tribunal, as such Laws may be amended or supplemented from time to
time or (c) arising under such common law doctrines as trespass or nuisance
that involves environmental, health or safety matters.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means any Subsidiary of Borrower or trade
or business (whether or not incorporated) which is a member or has been a
member of a group of which Borrower or any Subsidiary is or was a member and
which is or was under common control with Borrower or any Subsidiary within
the meaning of section 414 of the Code.
"Event of Default" has the meaning set forth in
Article VII.
"Excess Cash Flow" means Operating Cash Flow (before any
adjustments to reflect acquisitions, sales and exchanges during such period)
for each fiscal year of the Borrower less the sum of the following during such
fiscal year: (a) Fixed Charges and (b) voluntary prepayments of the Loans,
provided that the Aggregate Commitment is permanently reduced by a like
amount.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statutes.
"Existing Subordinated Note Indenture" means that certain
Indenture dated as of October 7, 1993 between Borrower and Chemical Bank, as
trustee, as the same may be amended, modified, restated, supplemented,
renewed, extended, rearranged or substituted from time to time.
"Existing Subordinated Notes" means the 11.375% Senior
Subordinated Notes, due October 1, 2000 issued by Borrower pursuant to the
Existing Subordinated Note Indenture.
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"FCC" means the Federal Communications Commission or any
Tribunal succeeding to the functions thereof.
"Federal Funds Rate" means for any day the rate per annum
(rounded upwards if necessary, to the nearest 1/100th 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 (a) if such day 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 (b) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions as
determined by the Agent.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System.
"Final Order" means an action by the FCC or other Tribunal
that has not been vacated, reversed, stayed, enjoined, set aside, annulled or
suspended and with respect to which no requests by any Person are pending for
administrative or judicial review, reconsideration, appeal or stay and the
time for filing any such requests and the time to review or comment with
respect to any such action and for the FCC or other Tribunal to set aside such
action on its own order have expired.
"Financial Statements" means balance sheets, profit and loss
statements, statements of cash flow, schedules of sources and applications of
funds and such other statements and schedules of financial data of any kind
and, when applicable, prepared in accordance with GAAP.
"Fixed Charge Coverage Ratio" means as of any date of
determination the ratio of (a) Operating Cash Flow for the most recently ended
twelve months to (b) Fixed Charges.
"Fixed Charges" means for the most recently completed twelve
months for the Borrower and its Subsidiaries on a consolidated basis, the sum
of the following paid during such fiscal period: (a) Debt Service, (b) cash
income taxes, (c) Capital Expenditures, (d) investments made in unconsolidated
entities, exclusive of those made prior to the Closing Date (e) all dividends
with respect to the Series C Preferred Stock, (f) all dividends with respect
to the Series D Preferred Stock, (g) all
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cash dividends with respect to the Series E Preferred Stock, and (h) all
repurchases of shares of Series E Preferred Stock pursuant to Section
6.10(iv).
"Funding Certificate" means a Funding Certificate
substantially in the form of Exhibit Q.
"GAAP" means generally accepted accounting principles,
applied on a consistent basis (a) as set forth in opinions of the accounting
principles board of the American Institute of Certified Public Accountants
("AICPA") and in the Financial Accounting Standards Board statements that are
applicable in the circumstances as of the date in question and (b) where not
inconsistent with such opinions and statements, as set forth in other AICPA
publications and guidelines. The requisite that such principles be applied on
a consistent basis means, subject to Section 10.1, that the accounting
principles in a current period are comparable in all material respects to
those applied in preparation of the audited Financial Statements of Borrower
for the fiscal year ended December 31, 1996 or, as the case may be, comparable
in all material respects to those applied in the preceding period.
"GSAC Partners" means a Delaware partnership the partners of
which are Pavilion Partners and Exit 116 Revisited, Inc.
"Guaranty" means the Second Amended, Restated and
Consolidated Guaranty, dated the date hereof, substantially in the form of
Exhibit E, executed and delivered by each Subsidiary of Borrower, guaranteeing
payment and performance of the Obligations, as the same may be amended,
modified, restated, supplemented, renewed, extended, rearranged or substituted
from time to time.
"Guaranty Obligation" means for any Person, without
duplication, any obligation, contingent or otherwise, of such Person
guaranteeing or otherwise becoming liable for any Debt of any other Person
("primary obligor") in any manner, whether directly or indirectly, and
including, without limitation, any obligation of such Person, direct or
indirect (a) to purchase or pay, or to advance or supply funds for the
purchase or payment of such Debt or to purchase (or to advance or supply funds
for the purchase of) any security for the payment of such Debt, (b) to
purchase property, securities or services for the purpose of assuring the
owner of such Debt of the payment of such Debt or (c) to maintain working
capital, equity capital or other financial statement condition or liquidity of
the primary obligor so as to enable the primary obligor to pay such Debt;
provided that the term
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Guaranty Obligation shall not include endorsements for collection or deposit,
in the ordinary course of the endorser's business.
"Hazardous Substance" means any substance, product, waste or
other material that is or becomes listed, regulated or addressed under any
Environmental Law, including, without limitation (a) any substance included
within the definition of "hazardous waste" pursuant to section 1004 of RCRA
and implementing regulations, (b) any substance included within the definition
of "hazardous substance" pursuant to section 101 of CERCLA and implementing
regulations and (c) any pollutant listed under the CAA, the CWA or
implementing regulations pursuant to the CAA or the CWA.
"Indemnified Party" has the meaning set forth in
Section 10.11.
"Intercompany Debt" means any and all Debt evidenced by
Intercompany Notes.
"Intercompany Note" means a promissory note in the form of
Exhibit F executed by an Obligor and payable to the order of any other
Obligor, evidencing loans, advances or other extensions of credit heretofore
or hereafter made by any Obligor to any other Obligor, together with any
amendments, modifications, supplements, renewals, extensions, increases,
restatements, rearrangements or substitutions thereto or thereof from time to
time.
"Interest Expense" means the sum of all interest expense and
Commitment Fees incurred with respect to Total Funded Debt.
"Interest Period" means for any LIBOR Loan the period
beginning on the date the Loan is made or on the date of the Conversion of any
Alternate Base Rate Loan into a LIBOR Loan and ending one, two, three or six
months after such date as Borrower shall elect pursuant to Section 2.2(b) and,
thereafter, with respect to the continuation of such LIBOR Loan as a LIBOR
Loan at the end of the applicable Interest Period, each subsequent Interest
Period for such Loan shall begin on the last day of such immediately preceding
Interest Period and end on the last day of the one, two, three or six-month
period selected by Borrower therefor pursuant to Section 2.2(c).
Notwithstanding the foregoing, no Interest Period on a Revolving Credit Loan
may extend past the Maturity Date. Whenever the last day of any Interest
Period would otherwise occur on a day other than a Business Day, the last day
of such Interest Period shall be extended to the next succeeding Business Day,
provided that if such extension would cause the last day of such Interest
Period to occur in the next
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following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day. LIBOR Loans made by the Lenders on the same
date and having the same Interest Period shall, for purposes of Section
2.1(a), be treated as having a single Interest Period.
"Law" means all applicable statutes, laws, ordinances,
regulations, rules, guidelines, orders, writs, injunctions, or decrees of any
state, commonwealth, nation, territory, province, possession, township,
county, parish, municipality or Tribunal.
"Lender" means each financial institution shown on the
signature pages hereof as long as such financial institution retains its
Commitment or is owed any part of the Obligations (including the Agent in its
individual capacity as a Lender) and each Eligible Assignee that hereafter
becomes a party to this Agreement pursuant to Section 10.14 as long as it
retains its Commitment or is owed any part of the Obligations.
"Letter of Credit or Letters of Credit" has the meaning
set forth in Section 2.17(a).
"Letter of Credit Issuing Bank" means the Agent.
"Letter of Credit Obligations" means, at the time of any
determination, the sum of (a) the Reimbursement Obligations, plus (b) the
Letter of Credit Undrawn Amount.
"Letter of Credit Reimbursement Agreement" means a Letter of
Credit Reimbursement Agreement in the form of Exhibit J.
"Letter of Credit Request" has the meaning set forth in
Section 2.17(e).
"Letter of Credit Undrawn Amount" means, at the time of any
determination, the aggregate amount issued and available for drawing under all
outstanding Letters of Credit.
"LIBOR Lending Office" means, with respect to a Lender, the
office designated as its LIBOR Lending Office on Schedule 1.1(B) and such
other office of such Lender or any of its Affiliates hereafter designated by
notice to Borrower and the Agent.
"LIBOR Loan" means any Loan that bears interest at the
LIBOR Rate.
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"LIBOR Rate" means a per annum rate (rounded upwards, if
necessary, to the nearest 1/100 of 1%) equal to the rate determined pursuant
to the following formula:
LIBOR Rate = London Interbank Rate + Applicable Margin
------------------------------
100% - LIBOR Reserve Percentage
Once determined, the LIBOR Rate shall be subject to Article
II and market availability and shall remain unchanged during the applicable
Interest Period, except for changes to reflect adjustments in the LIBOR
Reserve Percentage and the Applicable Margin.
"LIBOR Reserve Percentage" means, with respect to any
Interest Period, the percentage determined by the Agent to be the reserve
requirement in effect for the Agent from time to time during such Interest
Period, including any basic, supplemental and emergency reserves (expressed as
a percentage) applicable to a member bank of the Federal Reserve System in
respect of "eurocurrency liabilities" under Regulation D of the Federal
Reserve Board.
"License Subsidiaries" means any Subsidiary of Borrower in
existence on the Closing Date or hereafter organized by Borrower for the sole
purpose of holding FCC licenses and other authorizations.
"Lien" means any lien, security interest, pledge, collateral
assignment or other charge or encumbrance of any kind, or any other type of
preferential arrangement, upon or with respect to any property, including,
without limitation, the Rights of a vendor, lessor or similar party under any
conditional sales agreement (or other title retention agreement or lease
substantially equivalent thereto) and any other Rights or other arrangement
with any creditor to have its claim satisfied out of any property or assets,
or the proceeds therefrom, prior to the general creditors of the owner
thereof.
"Litigation" means any proceeding, claim, lawsuit or
investigation conducted or threatened by or pending before any Tribunal or
pending before any public or private arbitration board or panel.
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"LMA Agreements" means any time brokerage agreement, local
marketing agreement, local market affiliation agreement, joint sales
agreement, joint operating agreement or joint operating venture for the
operation of a radio station or related or similar agreements entered into,
directly or indirectly, between any Obligor and any other Person which are (i)
in existence at closing or (ii) entered into in connection with acquisitions,
asset sales or asset exchanges not otherwise prohibited by the terms of this
Agreement.
"Loan Documents" means this Agreement, the Notes, the
Security Documents, the Letter of Credit Reimbursement Agreement, UCC
financing statements, any agreements between any Obligor and the Agent or any
Lender in respect of fees or the reimbursement of costs and expenses or
relating to any interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements or any similar agreements or arrangements
designed to hedge the risk of variable interest rate volatility and any and
all other documents, instruments, certificates and agreements now or hereafter
executed or delivered by any Obligor pursuant to or in connection with any of
the foregoing, and any and all present or future amendments, modifications,
supplements, renewals, extensions, increases, restatements, rearrangements or
substitutions from time to time of all or any part of any of the foregoing.
"Loans" means collectively, Alternate Base Rate Loans and
LIBOR Loans.
"London Interbank Rate" means with respect to LIBOR Loans
for the relevant Interest Period the per annum rate of interest determined by
the Agent as the per annum rate of interest quoted by the Agent at which
Dollar deposits are offered by the Agent to prime banks in the London
interbank market at approximately 11:00 a.m., London time, two Business days
prior to the first day of such Interest Period, which deposits are for a
period equal to such Interest Period and in an amount substantially equal to
the Agent's (in its capacity as a Lender) Specified Percentage of such LIBOR
Loans.
"Material Adverse Effect" means a material adverse change in
or effect on (a) the business, condition (financial or otherwise), operations,
performance, property or assets, or prospects of Borrower and its Subsidiaries
taken as a whole since December 31, 1996 or (b) the ability of any Obligor to
perform its obligations under any Loan Document or the 1996 Indenture.
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"Material Lease" means each lease of real property by any
Obligor, as lessee, sublessee or lessor, which is a radio studio location or
antenna, tower or transmitter site.
"Maturity Date" means the earlier of June 30, 2005 or any
date on which the Obligations become due and payable in full, whether by
acceleration or otherwise.
"Mortgage" means each deed of trust, leasehold deed of
trust, mortgage, deed to secure debt, leasehold mortgage, collateral
assignment of leases or other real estate security document securing the
Obligations or any portion thereof and all modifications and supplements to
any of the foregoing that are executed or delivered pursuant to or in
connection with any of the Loan Documents, and any and all amendments,
modifications, restatements, supplements, renewals, extensions, rearrangements
or substitutions from time to time of any of the foregoing.
"Multiemployer Plan" means a multiemployer plan as defined
in sections 3(37) or 4001(a)(3) of ERISA or section 414 of the Code to which
Borrower or any ERISA Affiliate is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.
"Multiple Employer Plan" means any employee benefit plan
within the meaning of section 3(3) of ERISA, other than a Multiemployer Plan,
that is subject to Title IV of ERISA and to which Borrower or any ERISA
Affiliate and an employer other than an ERISA Affiliate or Borrower contribute
or have an obligation to contribute.
"Necessary Authorization" means any license, permit,
consent, franchise, order approval or authorization from, or any filing or
registration with, any Tribunal (including, without limitation, the FCC)
necessary or appropriate to the conduct of any Obligor's business or for the
ownership, maintenance and operation by any Obligor of its stations and other
properties or to the performance by any Obligor of its obligations under any
LMA Agreement to which it is a party.
"Net Cash Proceeds" means cash proceeds received from a
disposition or an exchange after deduction of taxes payable in cash in
connection therewith and net of reasonable transaction expenses.
"New Notes" means the $450,000,000 Senior Subordinated
Notes, due May 15, 2006 issued by the Borrower pursuant to the 1996 Indenture.
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"1996 Agreement" means the Second Amended and Restated
Credit Agreement, dated November 22, 1996 (as amended from time to time
thereafter), that this Agreement amends and restates.
"1996 Indenture" means that certain Indenture dated as of
May 31, 1996 between Borrower and Chemical Bank, as trustee, as the same may
be amended, modified, restated, supplemented, renewed, extended, rearranged or
substituted from time to time.
"Notes" means Borrower's promissory notes substantially in
the form of Exhibit A, payable to the order of the respective Lenders,
evidencing the Loans, together with any and all amendments, modifications,
restatements, supplements, renewals, extensions, rearrangements or
substitutions thereof from time to time.
"Obligations" means (a) all obligations or liabilities of
any form or nature (whether matured or unmatured, fixed or contingent,
liquidated or unliquidated, joint, several or joint and several) of any
Obligor to the Agent, the Letter of Credit Issuing Bank or any Lender arising
under or related to the Loan Documents, as they may be amended, modified,
renewed, extended, restated, supplemented, increased, rearranged or
substituted from time to time and (b) all obligations or liabilities of any
Obligor for losses, damages, expenses or any other liabilities of any kind
that any Lender may suffer by reason of a breach by any Obligor of any
obligation, covenant or undertaking with respect to any Loan Document, whether
any such obligations or liabilities are direct, indirect, fixed, contingent,
liquidated, unliquidated, joint, several or joint and several or was, prior to
acquisition thereof by the Lenders, owed to some other Person.
"Obligor" means any of Borrower or its Subsidiaries and
"Obligors" means, collectively, Borrower and its Subsidiaries.
"Operating Agreement" means an agreement substantially in
the form of Exhibit G.
"Operating Cash Flow" or "OCF" means for the most recently
completed twelve months, the sum of: (a) revenues (exclusive of reciprocal
revenues) minus (b) expenses (excluding depreciation, amortization, reciprocal
expenses, interest expense and income tax expense), plus (c) non-recurring
expense items or non-cash expense items mutually agreed upon by the Borrower
and the Required Lenders; less (d) the amount of any cash payments related to
non-cash charges that were added back in determining Operating Cash Flow
pursuant to (c) above in any prior period.
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Except in the calculation of the Fixed Charge Coverage Ratio
after September 30, 1997, Operating Cash Flow will be adjusted to reflect
acquisitions, dispositions and exchanges during such period as if they had
occurred at the beginning of such period.
Operating Cash Flow will be adjusted on a pro forma basis
for certain non-recurring expenses as set forth on Schedule 1.1(C).
In the case of a non-Wholly-Owned Subsidiary, the above OCF
calculation will only be considered to the extent of Borrower's percentage
ownership interest in such non-Wholly-Owned Subsidiary.
"Operating Lease" means any lease that is an operating lease
in accordance with GAAP and that has an initial or remaining noncancellable
lease term in excess of one year.
"Operating Subsidiary" means any Obligor that manages and
operates a Station or any other station acquired pursuant to a Permitted
Acquisition.
"OSHA" means the Occupational Safety and Health Act, 29
U.S.C. ss.ss.651 et seq., as amended.
"Other Taxes" has the meaning set forth in Section
2.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation, or
any successor thereof, established pursuant to ERISA.
"Perfection Certificate" has the meaning set forth in
Section 3.1(y).
"Permitted Acquisition" means any of the following: (a) the
acquisition of stations WVGO-FM, WLEE-FM, WKHK-FM and WBZU-FM in Richmond,
Virginia; (b) the acquisition of stations WDVE-FM, WXDX-FM, WDSY-FM and
WJJJ-FM in Pittsburgh, Pennsylvania from Secret Communications; (c) the
acquisition of stations WVTY-FM and WTAE-AM in Pittsburgh, Pennsylvania and
WLTQ-FM and WISN-AM in Milwaukee, Wisconsin from Hearst Broadcasting Group;
(d) acquisitions of radio stations in Principal Markets; (e) acquisitions of
radio stations in Top 75 markets; (f) the acquisition of Sunshine Promotions,
Inc. and its related companies, including Suntex, Inc. and Tour Design, Inc.;
(g) up to $50 million of non-radio station acquisitions; and (h) all other
acquisitions approved by the Required Lenders.
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"Permitted Debt" means (a) the Obligations, (b) the New
Notes, (c) the Existing Subordinated Notes, (d) Intercompany Debt, (e) Debt of
any Obligor listed on Schedule 1.1(D) (together with any refinancings,
substitutions or replacements thereof, provided that any such refinancings,
substitutions or replacements shall not increase the principal amount of such
Debt and the stated maturity date of any such Debt shall not be shortened to a
date that is less than one year after June 30, 2005 and the economic terms of
any such refinancings, substitutions or replacements shall not otherwise be
more onerous than the terms of such Debt being refinanced, substituted or
replaced), (f) indebtedness assumed in connection with a Permitted Acquisition
(excluding any debt assumed under bank facilities, note agreements or other
similar instruments), (g) unsecured subordinated indebtedness of the Borrower
issued pursuant to the exchange of the Borrower's Series D Preferred Stock and
Series E Preferred Stock, provided that immediately before and after giving
effect thereto no Default or Event of Default shall exist, and (h) other
indebtedness of any Obligor (which shall exclude indebtedness of the Borrower
and its Subsidiaries existing on the effective date of this Agreement and
reflected on Schedule 1.1(D)) in an amount up to $25 million in the aggregate
(for all Obligors together).
Permitted Debt also means the obligations referred to in
clause (d) of Customary Permitted Liens above, so long as the amount of Debt
so incurred does not exceed the cost of such assets or property.
"Permitted Investments" means (a) investments in obligations
of the United States of America maturing within one year from the date of
acquisition, (b) certificates of deposit issued by commercial banks organized
under the Laws of the United States of America or any state thereof and having
a combined capital, surplus and undivided profits of not less than
$100,000,000, (c) investments in commercial paper, maturing not more than 90
days after the date of issue, issued by a Person (other than an Affiliate)
with a rating of "P-1" (or its then equivalent) according to Moody's Investors
Service, Inc., "A-1" (or its then equivalent) according to Standard & Poor's
Corporation, or a better rating, (d) investments in Wholly-Owned Subsidiaries
identified on Schedule 4.4(D) and in Wholly-Owned Subsidiaries organized in
connection with Permitted Acquisitions and in Wholly-Owned Subsidiaries
organized in connection with an exchange of assets as permitted by Section
6.12(b), (e) the investment in ABS equal to at least a 96% interest therein,
(f) the existing 25% equity interest in Music Technologies, LLC, (g) the
existing 50%
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equity interest in GSAC Partners and (h) additional investments in
unconsolidated entities of up to $5 million.
"Permitted Liens" means (a) the Liens in favor of the Agent
for the benefit of the Lenders, (b) the Liens described on Schedule 1.1(E),
(c) Customary Permitted Liens, (d) Liens assumed in connection with a
Permitted Acquisition (excluding any Liens assumed under bank facilities, note
agreements or similar instruments) and (e) Liens shown on the mortgage
policies of title insurance issued in accordance with Section 5.3(n) hereof.
"Person" means any individual, sole proprietorship,
unincorporated organization, corporation, association, partnership, joint
venture, trust, institution, Tribunal, or other entity.
"Plan" means an employee pension benefit plan defined in
Section 3(2) of ERISA in respect of which Borrower or any ERISA Affiliate is,
or within the immediately preceding five years was, an "employer" as defined
in Section 3(5) of ERISA.
"Pledge Agreements" means the Borrower Pledge Agreement
and the Subsidiary Pledge Agreements.
"Preferred Stock" means Series B Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock and Series E
Preferred Stock.
"Principal Market" means a market in which the Borrower owns
two or more FM radio stations.
"Pro Forma Debt Service" means the sum of (a) Pro Forma
Interest Expense, (b) the scheduled current maturities of Total Funded Debt
which shall include prepayments mandated by Section 2.6(c), (c) the scheduled
redemption of Series B Preferred Stock, and (d) obligations due as a result of
the exercise of any put or call rights with respect to the Series C Preferred
Stock (but in no event more than $2,000,000), each measured for the twelve
months immediately succeeding the date of determination.
"Pro Forma Debt Service Ratio" means as of any date of
determination the ratio of (a) Operating Cash Flow for the most recently ended
twelve months to (b) Pro Forma Debt Service.
"Pro Forma Interest Expense" means Interest Expense
calculated for the twelve months following the calculation date, giving effect
to (a) the Total Funded Debt outstanding and the
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rates in effect as of the date of determination and (b) the amortization
scheduled during such period.
"Pro Forma Interest Expense Ratio" means as of any date of
determination the ratio of (a) Operating Cash Flow for the most recently ended
twelve months to (b) Pro Forma Interest Expense.
"Quarterly Date" means the last Business Day of each March,
June, September and December, commencing June 30, 1997.
"RCRA" means the Resource Conservation and Recovery Act,
42 U.S.C. ss.ss.6901 et seq., as amended.
"Reimbursement Obligations" means, at the time of any
determination, all matured and unpaid reimbursement or repayment obligations
of Borrower to the Agent with respect to Letters of Credit.
"Reinvested Proceeds" means the Net Cash Proceeds from
station sales or exchanges which are used to acquire additional radio stations
through a merger, acquisition or exchange in accordance with the covenants
during the Reinvestment Period.
"Reinvestment Period" means 360 days from the date that
proceeds from a station sale or exchange are received by the Borrower.
"Required Lenders" means, on any date of determination, any
combination of the Lenders that hold in the aggregate 51.00% or more of the
sum of the aggregate principal amount of Loans then outstanding; provided,
however, that if there are no Loans outstanding hereunder, "Required Lenders"
shall mean any combination of the Lenders whose Specified Percentages
aggregate at least 51.00%.
"Restricted Payment" means as to any Person (a) any
declaration or any payment of any dividend or other distribution, direct or
indirect, on account of any shares of any class of capital stock or other
equity interest of such Person now or hereafter outstanding, except a dividend
payable solely in shares of that class of stock or in any junior class of
stock to the holders of that class, (b) any (i) direct or indirect redemption,
retirement, purchase or other acquisition for value of or (ii) direct or
indirect purchase, payment or sinking fund or similar deposit for the
redemption, retirement, purchase or other acquisition for value of or to
obtain the surrender of any shares of any class of capital stock of such
Person now or hereafter
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outstanding or any warrants, options or other rights to acquire or subscribe
for purchase of shares of any class of capital stock of such person or any of
its Subsidiaries now or hereafter outstanding.
"Revolving Credit Loans" shall have the meaning ascribed to
such term in Section 2.1(a).
"Revolving Credit Reduction Amount" shall have the meaning
ascribed to that term in Section 2.6(a).
"Rights" means rights, remedies, powers and privileges.
"Sale and Leaseback Transaction" means a transaction whereby
any Obligor becomes liable with respect to any lease, whether an Operating
Lease or a Capital Lease, or any property (whether real, personal or mixed),
whether now owned or hereafter acquired, which (a) any Obligor has sold or
transferred or is to sell or transfer to any other Person or (b) any Obligor
intends to use for substantially the same purposes as any other property which
has been or is to be sold or transferred by any Obligor to any other Person in
connection with such lease.
"Scheduled Asset Exchanges" shall mean any of the following:
(i) the exchange of stations WBAB-FM, WHFM-FM, WBLI-FM and WGBB-AM in Long
Island, New York for stations WFYV-FM and WAPE-FM in Jacksonville, Florida;
(ii) the exchange of station WDSY-FM in Pittsburgh, Pennsylvania for station
WRFX-FM in Charlotte, North Carolina; (iii) the exchange of stations WGNE-FM
in Daytona Beach, Florida and KRZZ-FM and KKRD-FM in Wichita, Kansas for
stations WESC-FM, WESC-AM and WTPT-FM in Greenville, South Carolina; and (iv)
the exchange of station KNSS-AM in Wichita, Kansas for a radio station
(together with other assets, if any) of substantially equal value.
"Scheduled Asset Sales" shall mean the sale of any of the
following: (i) stations WYAK-FM and WMYB-FM in Myrtle Beach, South Carolina;
(ii) station KOLL-FM in Little Rock, Arkansas; (iii) stations WMJY-FM and
WKNN-FM in Biloxi, Mississippi and WMSI-FM, WKTF-FM, WJDS-AM, WSTZ-FM, WJDX-FM
and WZRX-AM in Jackson, Mississippi; (iv) a single station in Richmond,
Virginia in order to comply with FCC ownership rules; (v) each of the real
properties located at: (a) 2100 North Silverbell Road, Tucson, Arizona, (b)
345 East Cedar Street, Newington, Connecticut, (c) 1039 Asylum Avenue,
Hartford, Connecticut, (d) 6869 Lenox Avenue, Jacksonville, Florida (e) 4810
San Felipe, Houston, Texas and (f) 4701 Caroline Street, Houston, Texas; and
(vi) other real property, whether now
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owned or hereafter acquired the aggregate fair market value of which does not
exceed $5 million, at not less than fair market value.
"Scheduled Revolving Credit Reduction Date" has the
meaning set forth in Section 2.6(a).
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, and any successor statute.
"Security Agreements" means the Borrower Security
Agreement and the Subsidiary Security Agreement.
"Security Documents" means the Security Agreements, the
Pledge Agreements, the Mortgages, the Guaranty and any and all other
agreements, deeds of trust, mortgages, chattel mortgages, security agreements,
pledges, guaranties, assignments of proceeds, assignments of income,
assignments of contract rights, assignments of partnership interest,
assignments of royalty interests, assignments of performance or other
collateral assignments, completion or surety bonds, standby agreements,
subordination agreements, undertakings and other documents, agreements,
instruments and financing statements now or hereafter executed or delivered by
any Person in connection with, or as security for the payment or performance
of, the Obligations or any part thereof.
"Senior Funded Debt" means the Total Funded Debt less the
sum of (a) the amount outstanding under the Existing Subordinated Notes, (b)
the amount outstanding under the New Notes and (c) the amount of other
outstanding subordinated indebtedness permitted pursuant to Section 6.1
hereof.
"Senior Leverage Ratio" means the ratio of (a) Senior Funded
Debt less cash and cash equivalents in excess of $5 million to (b) Operating
Cash Flow.
"Series B Preferred Stock" means the Borrower's Series B
Preferred Stock, par value $.01 per share.
"Series C Preferred Stock" means the Borrower's 6% Series C
Convertible Preferred Stock, par value $.01 per share.
"Series D Preferred Stock" means the Borrower's 6 1/2%
Series D Cumulative Convertible Exchangeable Preferred Stock, due
May 31, 2007.
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"Series E Preferred Stock" means the Borrower's 12.625%
Series E Cumulative Exchangeable Preferred Stock, due October 31,
2006.
"SFX Warrants" means the following warrants assumed by
SFX pursuant to the merger between SFX and Multi-Market Radio, Inc.
("MMR"): (i) the outstanding Class A and Class B Warrants of MMR
issued pursuant to the Warrant Agreement dated as of March 23, 1994
by and among MMR, American Stock Transfer & Trust Company, D.H.
Blair Investment Banking Corp. and Americorp Securities, Inc. or
(ii) warrants issued pursuant to the Unit Purchase Option provided
for in such agreement.
"Solvent" means, with respect to any Person as of the date
of any determination, that on such date (a) the fair value of the property of
such Person (both at fair valuation and at present fair saleable value) is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the normal course of business, (d) such Person does not intend
to, and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would
constitute unreasonably small capital after giving due consideration to
current and anticipated future capital requirements and current and
anticipated future business conduct and the prevailing practice in the
industry in which such Person is engaged. In computing the amount of
contingent liabilities at any time, such liabilities shall be computed at the
amount which, in light of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Specified Percentage" means as to any Lender the percentage
of the Aggregate Commitment indicated beside such Lender's name on the
signature pages hereof or, if applicable, specified in its most recent
Assignment Agreement.
"Station" or "Stations" has the meaning set forth in
Section 4.21.
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"Subsidiary" of any Person means (a) any corporation,
securities of which having ordinary voting power to elect a majority of the
board of directors (irrespective of whether or not at the time stock of any
other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) are at the time, directly
or indirectly, owned or controlled by such Person or by one or more of its
Subsidiaries or (b) any partnership, association, limited liability company,
joint venture or other entity, ownership interests of which ordinarily
constitute a majority voting interest, including any partnership in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than 50%, are at the time, directly or indirectly, owned
or controlled by such Person. "Wholly-Owned Subsidiary" shall mean (a) any
such corporation of which all of such shares, other than directors' qualifying
shares, are so owned or controlled, directly or indirectly, and (b) any such
partnership, association, limited liability company, joint venture or other
entity in which such Person owns or controls, directly or indirectly, 100% of
such interests.
"Subsidiary Guarantors" means Subsidiaries of the Borrower
that have entered into a Guaranty.
"Subsidiary Pledge Agreement" means the Second Amended,
Restated and Consolidated Subsidiary Pledge and Security Agreement, dated the
date hereof, substantially in the form of Exhibit H, executed and delivered by
Borrower's Subsidiaries as such agreement may be amended, modified, restated,
supplemented, renewed, extended, rearranged or substituted from time to time.
"Subsidiary Security Agreement" means the Second Amended,
Restated and Consolidated Security Agreement, dated the date hereof,
substantially in the form of Exhibit I, executed and delivered by Borrower's
Subsidiaries as such agreement may be amended, modified, restated,
supplemented, renewed, extended, rearranged or substituted from time to time.
"Taxes" means all taxes, assessments, fees, levies, imposts,
duties, deductions, withholdings or other charges of any nature whatsoever
from time to time or at any time imposed by any Law or Tribunal, excluding, in
the case of each Lender and the Agent, taxes based on or measured by its net
income, and franchise taxes and any doing business taxes imposed on it, by any
jurisdiction (or political subdivisions thereof) in which the Agent
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or such Lender or any Applicable Lending Office is organized, located or doing
business.
"Termination Event" means (a) a "reportable event" as
defined in section 4043 of ERISA, (b) the withdrawal of Borrower or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was a
"substantial employer" as defined in section 4001(a)(2) of ERISA, (c) the
filing of a notice of intent to terminate a Plan or a Multiple Employer Plan
or the treatment of a plan amendment as a termination under section 4041(c) of
ERISA, (d) the institution of proceedings to terminate a Plan or a Multiple
Employer Plan by the PBGC, (e) any other event or condition which might
constitute grounds under section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or a Multiple Employer Plan,
(f) the occurrence of an event described in section 4068(f) of ERISA with
respect to a Plan or (g) any occurrence similar to any of those referred to in
clauses (a) through (f) above under the applicable Laws of a foreign country.
"Total Funded Debt" of Borrower and its Subsidiaries on a
consolidated basis means as of the date of any determination (a) all
outstanding Obligations, (b) all other Debt of any Obligor of the type
described in clause (a) of the definition of Debt, and (c) all liabilities of
others described in clause (a) or (b) in respect of which any Obligor has
incurred, assumed or acquired a liability by means of a Guaranty Obligation.
"Total Leverage Ratio" means the ratio of (a) Total Funded
Debt less cash and cash equivalents in excess of $5 million to (b) Operating
Cash Flow.
"Tribunal" means any court or governmental department,
commission, board, bureau, agency or instrumentality of the United States of
America or any state, commonwealth, nation, territory, province, possession,
township, county, parish or municipality, whether now or hereafter constituted
or existing.
"UCC" means the Uniform Commercial Code as enacted in the
State of New York or other applicable jurisdiction, as amended from time to
time.
"Welfare Plan" means an employee welfare benefit plan as
defined in section 3(1) of ERISA in which any personnel of Borrower or of an
ERISA Affiliate participate, excluding any Multiemployer Plan, but including
any such plan established or maintained by
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Borrower or an ERISA Affiliate, or to which Borrower or any ERISA Affiliate
contributes, under the Laws of any foreign country.
"Wholly-Owned Subsidiary" has the meaning set forth in
the definition of Subsidiary.
Section 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the same defined meanings when used in the Note or
other Loan Documents.
(b) As used in any Loan Document, accounting terms relating
to Borrower and its Subsidiaries not defined in Section 1.1 and accounting
terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement and
Article, Section, subsection, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(d) The meanings given to terms defined in any Loan Document
shall be equally applicable to both the singular and plural forms of such
terms.
(e) Unless stipulated otherwise (i) all references in any of
the Loan Documents to "dollars", "money", "payments" or other similar
financial or monetary terms, are references to currency of the United States
of America and (ii) all references to interest are to simple not compound
interest.
(f) The headings and captions used in any of the Loan
Documents are for convenience only and shall not be deemed to limit, amplify
or modify the terms of the Loan Documents nor affect the meaning thereof.
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ARTICLE II
COMMITMENTS AND LOANS
Section 2.1 Loans.
(a) The Revolving Credit Loans. Subject to the terms and
conditions of this Agreement and relying on the representations and warranties
set forth herein, each Lender severally, and not jointly, agrees to make
Revolving Credit Loans (the "Revolving Credit Loans") to the Borrower from
time to time on any Borrowing Date that occurs prior to the Maturity Date up
to an aggregate principal amount of Revolving Credit Loans at any one time
outstanding not to exceed an amount equal to its Specified Percentage of such
Revolving Credit Loans on such Borrowing Date. Within such limits and during
such period and subject to the other provisions of this Article II, the
Revolving Credit Loans may be repaid and reborrowed. In no event, however,
shall the aggregate amount of all Letter of Credit Obligations and the
outstanding principal amount of the Revolving Credit Loans exceed the
Aggregate Commitment.
(b) Applicable Interest Rate. Revolving Credit Loans may, at
the option of Borrower as provided in Section 2.2, be made as Alternate Base
Rate Loans or as LIBOR Loans; provided that with respect to LIBOR Loans there
shall be no more than four separate Interest Periods in effect at any one
time.
Section 2.2 Manner of Borrowing/Converting/Continuing and
Disbursement. Subject to the satisfaction of the applicable conditions set
forth in Article III and the provisions of this Section 2.2, Borrower may
borrow Alternate Base Rate Loans and LIBOR Loans, may continue and Convert
LIBOR Loans and may Convert Alternate Base Rate Loans, as follows:
(a) Alternate Base Rate Loans. In the case of Alternate Base
Rate Loans, an Authorized Signatory of Borrower shall give the Agent at least
one Business Day's prior written notice of its intention to borrow Alternate
Base Rate Loans hereunder. Such notice shall be irrevocable, shall be given to
the Agent prior to 11:00 a.m., New York City time, and shall be accompanied by
a duly executed Funding Certificate. Such notice of borrowing shall specify
(i) the requested Borrowing Date and (ii) the amount of the proposed aggregate
Alternate Base Rate Loans to be made by the Lenders.
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(b) LIBOR Loans. In the case of LIBOR Loans, an Authorized
Signatory of Borrower shall give the Agent at least three Business Days' prior
written notice of its intention to borrow LIBOR Loans hereunder. Such notice
of borrowing shall be irrevocable, shall be given to the Agent prior to 11:00
a.m., New York City time, and shall be accompanied by a duly executed Funding
Certificate. Such notice of borrowing shall specify (i) the requested
Borrowing Date, (ii) the amount of the proposed aggregate LIBOR Loans to be
made by the Lenders and (iii) the duration of the Interest Period selected by
Borrower for such LIBOR Loans.
(c) Continuations and Conversions. In the case of continuing
LIBOR Loans as LIBOR Loans at the end of the applicable Interest Period for
such Loans, Converting LIBOR Loans to Alternate Base Rate Loans at the end of
the applicable Interest Period for such Loans or Converting Alternate Base
Rate Loans into LIBOR Loans:
(1) In the case of continuations or Conversions of
LIBOR Loans, at least three Business Days' prior to the expiration of
an Interest Period relating to any outstanding LIBOR Loans, an
Authorized Signatory of Borrower shall give the Agent notice, which
notice shall be irrevocable, specifying the applicable Interest
Period and advising whether on the last day of such Interest Period
all or a portion of such LIBOR Loans are to be continued as LIBOR
Loans or are to be Converted to Alternate Base Rate Loans. If
Borrower elects to continue all or a portion of such LIBOR Loans as
LIBOR Loans, such notice shall also select the duration of the new
Interest Period applicable to such Loans. If Borrower has elected to
have such LIBOR Loans Convert to Alternate Base Rate Loans or if the
conditions for continuing LIBOR Loans as such Loans set forth in
Section 3.5 are not satisfied, on the date of the expiration of the
applicable Interest Period such outstanding LIBOR Loans shall Convert
to Alternate Base Rate Loans. In the event Borrower fails to provide
the Agent with the notice required by this subsection (c)(i), on the
last day of the applicable Interest Period all LIBOR Loans relating
to such Interest Period shall Convert to Alternate Base Rate Loans.
(2) In the case of Conversions of Alternate Base
Rate Loans, at least three Business Days prior to the date of
Conversion of any outstanding Alternate Base Rate Loans into LIBOR
Loans, an Authorized Signatory of Borrower shall give the Agent
notice, which notice shall be irrevocable,
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specifying the principal amount of Alternate Base Rate Loans to be
Converted and the duration of the Interest Period selected by
Borrower for such Loans. On the date specified in such notice, if the
conditions for converting Alternate Base Rate Loans into LIBOR Loans
set forth in Section 3.5 have been satisfied, such Alternate Base
Rate Loans shall convert to LIBOR Loans.
(d) Minimum Amounts. The aggregate amount of Alternate Base
Rate Loans to be made by the Lenders on any Borrowing Date (other than
Alternate Base Rate Loans made by the Lenders pursuant to Section 2.17(h))
shall be in a principal amount that is not less than $1,000,000 and is an
integral multiple of $100,000 for drawings in excess thereof. The aggregate
amount of LIBOR Loans having the same Interest Period and to be made by the
Lenders on any Borrowing Date shall be in a principal amount that is not less
than $5,000,000 and is an integral multiple of $1,000,000 for drawings in
excess thereof.
(e) Funding. The Agent shall promptly notify the Lenders of
each notice received from Borrower pursuant to this Section 2.2. In the case
of a notice of borrowing pursuant to Section 2.2(a) or 2.2(b) each Lender
shall no later than 12:00 p.m., New York City time, on the Borrowing Date for
such requested borrowing, deliver to the Agent, at its address set forth
herein, an amount equal to such Lender's Specified Percentage thereof in
Dollars and in immediately available funds in accordance with the Agent's
instructions. Prior to 2:00 p.m., New York City time, on the Borrowing Date,
the Agent shall, subject to satisfaction of the applicable conditions set
forth in Article III, disburse the amounts made available to the Agent by the
Lenders by (1) transferring such amounts by wire transfer pursuant to
Borrower's instructions or (2) in the absence of such instructions, crediting
such amounts to the account of Borrower maintained with the Agent.
(f) Funding and Maintaining LIBOR Loans. The borrowing or
continuation of any LIBOR Loans and the conversion of Alternate Base Rate
Loans into LIBOR Loans shall in all cases be subject to Sections 2.12, 2.13,
2.14 and 2.16. The provisions of this Agreement relating to calculation of the
LIBOR Rate are included only for the purpose of determining the rate of
interest or other amounts to be paid hereunder that are based upon such rate,
it being understood that each Lender shall be entitled to fund and maintain
its funding of all or any part of its LIBOR Loans as it deems appropriate.
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(g) Promissory Note. In order to further evidence the
Borrower's obligation to repay the Loans, the Borrower shall execute and
deliver to each Lender (or to the Agent for re-delivery to such Lender) a Note
payable to the order of such Lender. The Note of the Borrower issued to a
Lender shall (i) be in the principal amount of such Lender's Commitment, (ii)
be dated not later than the Closing Date, (iii) be stated to mature on the
Maturity Date and bear interest from its date until the Maturity Date on the
principal balance from time to time outstanding thereunder, payable at the
rates, at the times, and in the manner provided herein, and (iv) shall be in
the form attached hereto as Exhibit A. Each Lender is authorized to indicate
upon the grid attached to its Note all Loans made by it pursuant to this
Agreement, interest elections and payments of principal and interest thereon.
In the absence of manifest error, such notations shall be presumptively
correct as to the aggregate unpaid principal amount of all Loans made by such
Lender to the Borrower, and interest due thereon, but the failure by any
Lender to make such notations or the inaccuracy or incompleteness of any such
notations shall not affect the obligations of the Borrower hereunder or under
the Notes.
Section 2.3 Interest.
(a) Alternate Base Rate Loans. Borrower shall pay interest
on the unpaid principal amount of the Alternate Base Rate Loans from the date
such Loans are made until the same become due (whether at maturity, by reason
of acceleration or otherwise) or are earlier repaid at a rate per annum equal
to the Alternate Base Rate. Interest on the Alternate Base Rate Loans shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be due and payable in arrears on each Quarterly Date and on the
Maturity Date.
(b) LIBOR Loans. Borrower shall pay interest on the unpaid
principal amount of the LIBOR Loans from the date such Loans are made until
the same become due (whether at maturity, by reason of acceleration or
otherwise) or are earlier repaid at a rate per annum equal to the LIBOR Rate
applicable to such Loans. The Agent, whose determination shall be conclusive,
shall determine the LIBOR Rate on the second Business Day prior to the
Borrowing Date and shall notify Borrower and the Lenders of such LIBOR Rate.
Interest on the LIBOR Loans shall be computed on the basis of a 360-day year
for the actual number of days elapsed and shall be due and payable in arrears
on the last day of the applicable Interest Period and on the Maturity Date;
provided, however, that if the Interest Period for any LIBOR Loans exceeds
three months, interest on such Loans
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shall also be due and payable in arrears on the date that is three months from
the first day of such Interest Period.
(c) Interest After an Event of Default. After the Maturity
Date (by acceleration or otherwise) or during the continuance (i) of any
payment Event of Default or (ii) for more than 30 days following any other
Event of Default, automatically and without any action by the Agent or any
Lender, to the extent permitted by applicable law, the outstanding Obligations
shall bear interest at a rate per annum equal to the Default Rate instead of
the Alternate Base Rate or the LIBOR Rate, as applicable. Such interest shall
be payable on demand and shall accrue until the earlier of (i) waiver or cure
(to the satisfaction of the requisite number of Lenders) of the applicable
Event of Default, (ii) agreement by the Lenders to rescind the charging of
interest at the Default Rate or (iii) payment in full of the Obligations and
termination of the Commitments.
Section 2.4 Commitment Fee. Borrower agrees to pay to the
Agent for distribution to the Lenders (based on their respective Specified
Percentages) a commitment fee with respect to the Aggregate Commitment, from
the date of this Agreement to, but not including, the Maturity Date or the
date of any termination of the Aggregate Commitment, as the case may be, at
the rate of (i) 0.375% per annum for periods in which the Total Leverage Ratio
is greater than or equal to 5.50 to 1.00 and (ii) 0.250% per annum for periods
in which the Total Leverage Ratio is less than 5.50 to 1.00, on the daily
average amount of the Available Amount (collectively, the "Commitment Fee").
Such Commitment Fee shall be payable in arrears on each Quarterly Date and the
Maturity Date and on the date of any termination of the Aggregate Commitment.
For purposes of this Section 2.4, the Total Leverage Ratio used to determine
the amount of any Commitment Fee payable on each Quarterly Date, shall be
based upon the information set forth in the applicable Compliance Certificate
and shall be effective as of the applicable Calculation Date, to the same
extent and in the same manner as the Total Leverage Ratio is calculated to
determine the Applicable Margin. The Commitment Fee shall be computed on the
basis of a 360-day year for the actual number of days elapsed.
Section 2.5 Prepayments.
(a) Mandatory Prepayments and Reduction of Commitment. Upon
receipt by the Borrower of proceeds as contemplated pursuant to Section 2.5(d),
2.5(e) or 2.5(f) hereof, the amount of the Aggregate Commitment shall be
reduced by the amount of such proceeds. If, after such reduction of the
Aggregate Commitment,
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the principal amount outstanding under the Loans plus the Letter of Credit
Obligations exceeds the Aggregate Commitment, then the Borrower shall prepay
the Loans in the amount that is in excess of the Aggregate Commitment. All
mandatory reductions contemplated pursuant to Section 2.5(d), 2.5(e) or 2.5(f)
hereof and this Section 2.5(a) shall be applied to the scheduled reduction of
Commitments required pursuant to Section 2.6 in inverse order of their
scheduled reduction date.
(b) Voluntary Prepayments. The principal amount of Alternate
Base Rate Loans may be prepaid in whole or in part at any time, without
penalty, on one Business Day's prior written notice by an Authorized Signatory
to the Agent, specifying the amount of such Loans to be repaid. Prepayments of
Alternate Base Rate Loans shall be in a principal amount that is not less than
$1,000,000 and is an integral multiple of $100,000 for amounts in excess
thereof. LIBOR Loans may be voluntarily prepaid in whole or in part only on
the last day of the Interest Period for such Loans on three Business Days'
prior written notice by an Authorized Signatory to the Agent, specifying the
amount of such Loans to be repaid. Prepayments of LIBOR Loans shall be in a
principal amount that is not less than $5,000,000 and is an integral multiple
of $1,000,000 for amounts in excess thereof. Each notice of prepayment shall
be irrevocable and the amount of such prepayment shall be due and payable on
the date set forth in Borrower's notice thereof.
(c) Voluntary Reductions of Commitments. Borrower shall have
the right, on not less than three Business Days' prior written notice by an
Authorized Signatory to the Agent, which shall promptly notify the Lenders, to
terminate or permanently reduce the Aggregate Commitment. Each such reduction
or termination of the Aggregate Commitment shall be allocated among the
Lenders' respective Commitments, as the case may be, in accordance with the
Lenders' respective Specified Percentages. Each reduction shall be in an
aggregate amount not less than $5,000,000; provided that if the Aggregate
Commitment aggregates less than $5,000,000, Borrower may terminate the
Aggregate Commitment in an amount less than $5,000,000. Notwithstanding the
foregoing, Borrower shall have no right to terminate or reduce Aggregate
Commitments if as a result thereof (i) the aggregate amount of all Letter of
Credit Obligations and the outstanding principal amount of all Loans would
exceed the Aggregate Commitment or (ii) any LIBOR Loans would be required to
be prepaid prior to the last day of the relevant Interest Period for such
Loans.
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(d) Station Sales, Exchanges or other Dispositions. All Net
Cash Proceeds received from (i) station sales or exchanges (reduced by
Reinvested Proceeds within the Reinvestment Period) other than (A) Scheduled
Asset Sales or (B) Scheduled Asset Exchanges, or (ii) other dispositions
(other than in the ordinary course of business) shall be applied as a
prepayment pursuant to Section 2.5(a).
(e) Excess Cash Flow Prepayments. Commencing with the year
ended December 31, 2000, and payable on March 31st of each succeeding fiscal
year thereafter, when the Total Leverage Ratio is greater than 5.00 to 1.00 as
of the end of a fiscal year, Borrower shall pay to the Agent as a prepayment
pursuant to Section 2.5(a) an amount not less than 50% of Excess Cash Flow
calculated for such fiscal year.
(f) Insurance/Condemnation Prepayments. All Applicable
Proceeds (i) in excess of amounts used to replace or repair any properties or
(ii) which are not used or designated to replace or repair properties within
one year after receipt thereof shall be applied as a prepayment pursuant to
Section 2.5(a) provided that the Borrower shall have commenced the restoration
or replacement process (including the making of appropriate filings and
requests for approval) within 45 days after such casualty or after the receipt
of any such condemnation proceeds, as the case may be, and diligently pursues
the same through completion.
(g) Equity Issuances. All cash proceeds from the issuance of
common equity from the Closing Date forward, shall be applied to prepay the
Loans, provided, however, that such prepayment shall not result in, nor shall
such issuance of common equity require, a reduction of the Aggregate
Commitment.
(h) Prepayments and Reductions, Generally. Each prepayment
of any Loans shall be accompanied by (i) the payment of interest accrued and
unpaid on the Loans being prepaid to the date of prepayment and (ii) in the
case of LIBOR Loans, reimbursement payments to the Lenders of losses or
expenses, if applicable, pursuant to Section 2.8. All payments made pursuant
to subsections (c), (d), (e), (f) and (g) above shall be applied first to the
prepayment of the Alternate Base Rate Loans under the applicable Commitments
until repaid in full and then to LIBOR Loans under the applicable Commitments.
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(i) If at the time of any prepayment or reduction in
Aggregate Commitment required by Section 2.5(a), 2.5(d), 2.5(e), 2.5(f) or 2.6
or as a result of the application of some but not all of the funds available
for such prepayment, the Loans have been paid in full but there remain
outstanding Letters of Credit, such Letters of Credit shall be cash
collateralized by the amount by which the outstanding Letters of Credit exceed
the Aggregate Commitment as so reduced, and such cash collateral shall be held
and applied by the Agent in the same manner as cash collateral is held and
applied by the Agent pursuant to Section 2.17(q); provided, however, (i) such
excess funds shall not be held as cash collateral to the extent that they
exceed the aggregate amount of outstanding Letters of Credit and (ii) the
holding of such cash collateral shall not effect any permanent reduction of
the Commitments as provided in Section 2.5(c), 2.5(d), 2.5(e) and 2.5(f) until
such time as such cash collateral is applied by the Agent toward payment of
Reimbursement Obligations becoming due with respect to Letters of Credit or
such Letters of Credit expire or are earlier cancelled.
Section 2.6 Reductions and Changes of Commitments.
(a) Scheduled Reductions. Subject to the adjustment
described in Section 2.6(b) hereof, the Aggregate Commitment shall be
automatically reduced on each Quarterly Date falling on or nearest to the date
specified in column (x) below (each such Quarterly Date, a "Scheduled
Revolving Credit Reduction Date") by the dollar amount specified in column (y)
below opposite such date (the "Revolving Credit Reduction Amount"):
(x) (y)
Quarterly Date Falling Revolving Credit Reduction
on or Nearest to Amount
---------------------- ------
March 31, 2000 $18,000,000
June 30, 2000 $18,000,000
September 30, 2000 $18,000,000
December 31, 2000 $18,000,000
March 31, 2001 $18,000,000
June 30, 2001 $18,000,000
September 30, 2001 $18,000,000
December 31, 2001 $18,000,000
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March 31, 2002 $18,000,000
June 30, 2002 $18,000,000
September 30, 2002 $18,000,000
December 31, 2002 $18,000,000
March 31, 2003 $18,000,000
June 30, 2003 $18,000,000
September 30, 2003 $18,000,000
December 31, 2003 $18,000,000
March 31, 2004 $18,000,000
June 30, 2004 $18,000,000
September 30, 2004 $18,000,000
December 31, 2004 $18,000,000
March 31, 2005 $20,000,000
June 30, 2005 $20,000,000
(b) Adjustments to Scheduled Revolving Credit Reduction
Amounts. Upon any reduction of the Aggregate Commitment pursuant to Section
2.5(a) or (c) hereof on any date, the schedule set forth in Section 2.6(a)
hereof shall be adjusted, after giving effect to any prior adjustments thereto
pursuant to this Section 2.6(b), by reducing the Revolving Credit Reduction
Amount set forth in column (y) of such schedule opposite each Scheduled
Revolving Credit Reduction Date occurring after such date, by applying the
reduction of the Aggregate Commitment to the Scheduled Revolving Credit
Reduction Amount in inverse order of their scheduled reduction date.
(c) If, after such scheduled reduction of the Aggregate
Commitment, the principal amount outstanding under the Loans plus the Letter
of Credit Obligations exceeds the Aggregate Commitment, then the Borrower
shall prepay the Loans in the amount that is in excess of the Aggregate
Commitment.
(d) The Aggregate Commitment, once terminated or
reduced, may not be reinstated.
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Section 2.7 Non-Receipt of Funds by the Agent. Unless the
Agent shall have been notified by a Lender prior to the date of any proposed
Loans requested by Borrower (which notice shall be effective upon receipt)
that such Lender does not intend to make available to the Agent such Lender's
Specified Percentage amount of such Loans, the Agent may assume that such
Lender has made its Specified Percentage amount available to the Agent on the
applicable Borrowing Date in accordance with Section 2.2(e) and the Agent may
(but shall not be required to), in reliance on such assumption, make available
to Borrower on such date a corresponding amount. If and to the extent that
such Lender shall not have so made its Specified Percentage amount available
to the Agent, such Lender and Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to Borrower until the
date such amount is repaid to the Agent (a) in the case of Borrower, at the
interest rate applicable to such Loans and (b) in the case of such Lender, at
the Federal Funds Rate if such amount is paid in full within three Business
Days after demand therefor by the Agent and, thereafter, at the Alternate Base
Rate. If such Lender shall repay to the Agent such corresponding amount, such
amount so repaid shall constitute such Lender's Specified Percentage amount of
such Loans for purposes of this Agreement. The failure of any Lender to
provide its Specified Percentage amount of any requested Loans shall not
relieve any other Lender of its obligation hereunder to make its Specified
Percentage amount of such Loans.
Section 2.8 Reimbursement. Borrower shall compensate each
Lender for any loss or expense which such Lender may sustain or incur as a
consequence of (a) the failure of Borrower to pay when due the principal
amount of or interest on any LIBOR Loans, (b) the failure of Borrower to make
a borrowing of, Conversion into or continuation of any LIBOR Loans after
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) the failure of Borrower to make any
prepayment after Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (d) a payment or prepayment of any LIBOR Loans
is made on a day that is not the last day of the applicable Interest Period,
including, without limitation, in each case, any such loss (excluding loss of
the Applicable Margin) or expense arising from the reemployment of funds
obtained by such Lender or from amounts payable by such Lender to lenders of
funds obtained by such Lender in order to make or maintain such LIBOR Loans.
Such compensation may include an amount equal to the excess, if any, of (i)
the amount of interest which would have accrued on the amount so paid or
prepaid, or not so borrowed,
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Converted or continued, for the period from the date of such payment or
prepayment, or of such failure to borrow, Convert or continue, to the last day
of the applicable Interest Period in the case of a payment or prepayment or,
in the case of a failure to borrow, Convert or continue, to the last day of
the Interest Period that would have commenced on the date of such failure, in
each case at the applicable LIBOR Rate (minus the Applicable Margin) for such
Loans over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with prime banks in the London
interbank market. Nothing in this Section 2.8 shall be construed to permit
Borrower to make payments or prepayments in respect of the Obligations on a
day other than as provided in the respective Loan Documents.
Section 2.9 Payments.
(a) Manner/Timing Payments. Except as otherwise set forth in
Section 2.17(h), each payment (including prepayment) by Borrower of principal
of or interest on the Loans, fees and any other Obligation owing by any
Obligor under this Agreement or any other Loan Document shall be made not
later than 11:00 a.m., New York City time, on the date specified for such
payment under this Agreement or such other Loan Document to the Agent for the
accounts of the respective Lenders entitled thereto at the Agent's office in
Dollars and in immediately available funds. If any payment under this
Agreement or any other Loan Document shall be specified to be made on a day
that is not a Business Day, it shall be made on the next succeeding day that
is a Business Day, unless such payment is in respect of principal of or
interest on LIBOR Loans and such Business Day falls in another calendar month,
in which case payment shall be made on the next preceding Business Day.
Borrower shall pay principal, interest, fees and all other amounts due under
the Loan Documents without notice and without set-off, counterclaim or any
other deduction whatsoever. Payments made in respect of the Loans received by
Agent shall be promptly distributed to the Lenders in accordance with Section
2.9(b).
(b) Allocation of Payments. Subject to Section 8.8, all
payments of principal and interest in respect of the Loans, all payments in
respect of the Commitment Fee and all payments in respect of other Obligations
(other than any interest rate swap agreements, interest rate cap agreements,
interest rate collar agreements or any similar agreements or arrangements
designed to hedge the risk of variable interest rate volatility) shall be
allocated among and paid to the Lenders as are entitled thereto in proportion
to their respective Specified Percentages. All payments
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in respect of LIBOR Loans shall be paid by the Agent to the Lenders for the
account of their respective LIBOR Lending Offices and all other payments in
respect of the Obligations shall be paid by the Agent to the Lender for the
account of their respective Domestic Lending Offices.
Section 2.10 Booking Loans. Any Lender may make, carry or
transfer Loans at, to or for the account of any Applicable Lending Office
designated by such Lender.
Section 2.11 Taxes.
(a) Any and all payments by any Obligor of the Obligations
shall be made, in accordance with Section 2.9, free and clear of and without
deduction for any and all present or future Taxes. If Borrower shall be
required by any Law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, (i) the sum payable by Borrower shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.11) such Lender or the Agent (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii)
Borrower shall make such deductions and (iii) Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable Law.
(b) In addition, Borrower shall pay any and all present and
future stamp and documentary Taxes and any and all other excise and property
Taxes, charges and similar levies that arise from any payment made hereunder
or from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred to as
"Other Taxes").
(c) Borrower shall indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.11) paid by such Lender or the Agent (as the case may be) and all
liabilities (including penalties, additions to tax, interest and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted, other than penalties, additions to
tax, interest and expenses arising as a result of gross negligence on the part
of such Lender or the Agent. Payments in respect of the foregoing
indemnification shall be made within five days after the date such Lender or
the Agent (as the case may be) makes demand therefor.
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(d) Within 30 days after the date of any payment of Taxes by
Borrower pursuant to this Section 2.11, Borrower shall furnish to the Lenders
the original or a certified copy of a receipt evidencing payment thereof. If
Borrower makes any payment in respect of any Obligation from any account
located outside the United States or any such payment is made by a payor that
is not a United States Person and if no Taxes are payable in respect of such
payment, Borrower shall furnish to each of the Lenders a certificate from each
appropriate taxing authority, or an opinion of counsel acceptable to the
Agent, in either case stating that such payment is exempt from or not subject
to Taxes. For purposes of this Section 2.11, the terms "United States" and
"United States Person" shall have the meanings set forth in Section 7701 of
the Code.
(e) Each Lender which is not a United States Person hereby
agrees that:
(1) it shall, no later than the date of this
Agreement (or, in the case of a Lender which becomes a party
hereto pursuant to Section 10.14 after the date of this
Agreement, the date upon which such Lender becomes a party
hereto) deliver to Borrower through the Agent, with a copy
to the Agent (A) if any lending office is located in the
United States of America, two (2) accurate and complete
signed originals of Internal Revenue Service Form 4224 or
any successor thereto ("Form 4224") (B) if any lending
office is located outside the United States of America, two
(2) accurate and complete signed originals of Internal
Revenue Service Form 1001 or any successor thereto ("Form
1001"), in each case indicating that such Lender is on the
date of delivery thereof entitled to receive payments of
principal, interest and fees for the account of such lending
office or lending offices under this Agreement free from
withholding of United States federal income tax;
(2) if at any time such Lender changes its lending
office or lending offices or selects an additional lending
office it shall, at the same time or reasonably promptly
thereafter but only to the extent the forms previously
delivered by it hereunder are no longer effective, deliver
to Borrower through the Agent, with a copy to the Agent, in
replacement for the forms previously delivered by it
hereunder (A) if such changed or additional lending office
is located in the United States of America, two (2) accurate
and complete
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signed originals of Form 4224 or (B) otherwise, two (2)
accurate and complete signed originals of Form 1001, in each
case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest
and fees for the account of such changed or additional
lending office under this Agreement free from withholding of
United States federal income tax;
(3) it shall, before or promptly after the
occurrence of any event (including the passing of time but
excluding any event mentioned in clause (2) above) requiring
a change in the most recent Form 4224 or Form 1001
previously delivered by such Lender and if the delivery of
the same be lawful, deliver to Borrower through the Agent,
with a copy to the Agent, two (2) accurate and complete
original signed copies of Form 4224 or Form 1001 in
replacement for the forms previously delivered by such
Lender; and
(4) it shall, promptly upon the reasonable request
of Borrower to that effect, deliver to Borrower through the
Agent such other forms or similar documentation as may be
required from time to time by any applicable Law, treaty,
rule or regulation in order to establish such Lender's tax
status for withholding purposes.
(f) The obligations of Borrower contained in this Section
2.11 shall survive the termination of this Agreement and the payment in full
of the Obligations.
Section 2.12 LIBOR Rate Determination Inadequate.
(a) If with respect to any LIBOR Loans for any Interest
Period, the Agent determines that for any reason appropriate information is
not available to it for purposes of determining the LIBOR Rate for such
Interest Period, (i) the Agent shall notify Borrower and the Lenders that the
interest rate cannot be determined for such LIBOR Loans, (ii) the obligation
of the Lenders to make or to continue LIBOR Loans or to Convert Loans into
LIBOR Loans shall be suspended and (iii) all outstanding LIBOR Loans shall
automatically, on the last day of the then existing respective Interest
Periods therefor, Convert into Alternate Base Rate Loans, until such time as
the LIBOR Rate can be determined.
(b) If, with respect to any LIBOR Loans, any Lender notifies
the Agent that the LIBOR Rate determined by the Agent for
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any Interest Period for such Loans will not adequately reflect the cost to
such Lender of making or continuing its LIBOR Loans or Converting its Loans
into LIBOR Loans for such Interest Period, the Agent shall so notify Borrower,
whereupon (i) the obligation of such Lender to make or continue LIBOR Loans or
to Convert Loans into LIBOR Loans shall be suspended and (ii) each LIBOR Loan
maintained by such Lender shall automatically, on the last day of the then
existing Interest Period therefor, Convert into an Alternate Base Rate Loan,
until the Lender shall notify Borrower and the Agent that the circumstances
causing such suspension no longer exist.
Section 2.13 Illegality. If any applicable Law or any change
therein, adoption thereof or interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or if compliance by any Lender (or
its LIBOR Lending Office) with any request or directive (whether or not having
the force of Law) of any such authority, central bank or comparable agency,
shall make it unlawful or impossible for such Lender (or its LIBOR Lending
Office) to make, continue or Convert into its Specified Percentage amount of
LIBOR Loans, such Lender shall so notify Borrower and the Agent and such
Lender's obligation to make LIBOR Loans, to continue LIBOR Loans or to Convert
any Alternate Base Rate Loans into LIBOR Loans shall be suspended until such
Lender shall notify Borrower and the Agent that the circumstances causing such
suspension no longer exist. On receipt of such notice, notwithstanding
anything to the contrary contained in Article II, Borrower shall immediately
(a) repay in full the then outstanding principal amount of the LIBOR Loans
owing to the notifying Lender, together with accrued and unpaid interest
thereon or (b) Convert such LIBOR Loans into Alternate Base Rate Loans, and,
in either such case, reimburse such Lender for its losses and expenses as
required under Section 2.8.
Section 2.14 Increased Costs.
(a) If any applicable Law or any change in or adoption of
any Law or any interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation
or administration thereof or compliance by any Lender (or its LIBOR Lending
Office) with any request or directive (whether or not having the force of Law)
of any such authority, central bank or comparable agency:
(1) shall subject a Lender (or its LIBOR Lending
Office) to any Taxes (net of any tax benefit engendered
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thereby) with respect to its LIBOR Loans or its obligation
to make such Loans or shall change the basis of taxation of
payments to a Lender (or to its LIBOR Lending Office) of the
principal of or interest on its LIBOR Loans or in respect of
any other amounts due under this Agreement, as the case may
be; or
(2) shall impose, modify or deem applicable any
reserve (including, without limitation, any reserve
requirement imposed by the Federal Reserve Board), special
deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, a Lender
or its LIBOR Lending Office or shall impose on a Lender (or
its LIBOR Lending Office) or on the United States market for
certificates of deposit or the London interbank market any
other condition affecting its LIBOR Loans or its obligation
to make such Loans;
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or continuing any LIBOR Loans or
Converting Loans into LIBOR Loans, or to reduce the amount of any sum received
or receivable by a Lender (or its LIBOR Lending Office) with respect thereto,
then, within 15 days after demand by a Lender, Borrower shall pay to such
Lender such additional amount as will compensate such Lender for such
increased costs or reduced amounts.
(b) A written statement of any Lender claiming compensation
under this Section 2.14 and setting forth in good faith the additional amounts
to be paid to it hereunder and calculations therefor shall be binding and
conclusive, absent manifest error. In determining such amount, a Lender may
use any reasonable averaging and attribution methods. If a Lender demands
compensation under this Section 2.14, Borrower may at any time, upon at least
five Business Days' prior notice to Lender, after reimbursing such Lender in
accordance with this Section 2.14 for all costs incurred or losses suffered,
Convert in full the then outstanding LIBOR Loans of such Lender into Alternate
Base Rate Loans and reimburse such Lender for all its losses and expenses as
required pursuant to Section 2.8, whereupon the obligation of such Lender to
make or continue LIBOR Loans or to Convert Loans into LIBOR Loans shall be
suspended.
Section 2.15 Effect on Alternate Base Rate Loans. If notice
has been given pursuant to Section 2.12(b), 2.13 or 2.14 suspending the
obligation of a Lender to make LIBOR Loans, then, unless and until the Agent
notifies Borrower that the circumstances
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giving rise to such suspension no longer apply, all Loans which would
otherwise be made by such Lender as LIBOR Loans shall be made instead as
Alternate Base Rate Loans. All Loans of a Lender that but for any such
suspension pursuant to Section 2.12(b), 2.13 or 2.14 would be made or
continued as LIBOR Loans or Converted into LIBOR Loans of such Lender shall be
deemed to be such Lender's LIBOR Loans for purposes of calculating such
Lender's ratable portion of payments made in respect of all LIBOR Loans.
Section 2.16 Capital Adequacy. If either (a) the
introduction of or any change in or adoption of any Law or any change in the
interpretation thereof by any Tribunal or (b) compliance by a Lender (or its
LIBOR Lending Office) with any Law or request from any Tribunal (whether or
not having the force of Law) affects or would affect the amount of capital
required or expected to be maintained by a Lender, its LIBOR Lending Office or
any corporation controlling such Lender, and such Lender determines that the
amount of such capital is increased by or based upon the existence of such
Lender's Specified Percentage of the Aggregate Commitment or its Loans
hereunder and other commitments or advances of such Lender of this type, then,
upon demand by such Lender, Borrower shall immediately pay to such Lender,
from time to time as specified by such Lender, additional amounts sufficient
to compensate such Lender with respect to such circumstances, to the extent
that such Lender determines such increase in capital to be allocable to the
existence of such Lender's Specified Percentage of the Aggregate Commitment or
its Loans hereunder. A statement as to such amounts submitted to Borrower by a
Lender hereunder shall be binding and conclusive, absent manifest error.
Section 2.17 Letters of Credit.
(a) The Letter of Credit Issuing Bank agrees, on the terms
and conditions hereinafter set forth, to issue, extend and renew standby
letters of credit (the "Letters of Credit" or if the singular, "Letter of
Credit") from time to time on any Business Day during the period from the date
of this Agreement to the Maturity Date, in such form as may be requested by
Borrower and agreed to by the Letter of Credit Issuing Bank for the purpose of
supporting the Borrower's obligations with respect to deposit requirements
associated with proposed acquisitions and to support ordinary course working
capital needs. The Letter of Credit Issuing Bank shall have no obligation to
issue any Letter of Credit in excess of the Available Amount. In no event
shall the Letter of Credit Obligations at any time exceed $30,000,000.
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(b) No Lender other than the Letter of Credit Issuing Bank
has any obligation to issue any Letter of Credit.
(c) Terms of Letters of Credit. Each Letter of Credit shall
be denominated in Dollars and in no event shall the expiry date of any Letter
of Credit extend beyond one Business Day prior to the Maturity Date. Any
extension of any expiry date or renewal of a Letter of Credit shall constitute
an "issuance" of such Letter of Credit for all purposes of this Agreement.
(d) Letter of Credit Reimbursement Agreement. In addition to
the terms and conditions of this Agreement, each Letter of Credit shall be
issued pursuant to and the Letter of Credit Issuing Bank shall be entitled to
the benefits of a Letter of Credit Reimbursement Agreement. In the event of
any conflict or inconsistency between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement shall
control to the extent of any such conflict or inconsistency.
(e) Requests for Issuance of Letters of Credit. Each
issuance of a Letter of Credit shall be made on notice given by Borrower to
the Letter of Credit Issuing Bank not later than 11:00 a.m. New York City time
four Business Days prior to the date of the proposed issuance of the Letter of
Credit. Each such notice (a "Letter of Credit Request") shall be in the form
of Exhibit S, which shall include a completed application for a standby Letter
of Credit. Such Letter of Credit Request shall be irrevocable and shall
specify (i) the stated amount of the Letter of Credit, (ii) the proposed date
of issuance of such Letter of Credit, (iii) the expiry date of such Letter of
Credit, (iv) the beneficiary of such Letter of Credit, (v) the purpose for
which such Letter of Credit is being requested and (vi) such other information
reasonably satisfactory to the Letter of Credit Issuing Bank as to enable the
Letter of Credit Issuing Bank to issue such Letter of Credit consistent with
the reasonable requirements of the beneficiary thereof. The Letter of Credit
Issuing Bank shall promptly deliver a copy of each Letter of Credit Request to
each Lender.
(f) Issuance of Letters of Credit: Participations. Subject
to the terms and conditions of this Section 2.17, the Letter of Credit Issuing
Bank shall on the date requested in the Letter of Credit Request issue a
Letter of Credit for the account of Borrower in accordance with the Letter of
Credit Issuing Bank's usual and customary business practices and confirm to
the Lenders that such Letter of Credit has been issued. Immediately upon the
issuance of a Letter of Credit, the Letter of Credit Issuing Bank
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shall be deemed to have sold and transferred to each Lender, and each Lender
shall be deemed to have irrevocably and unconditionally purchased and received
from the Letter of Credit Issuing Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such Lender's Specified
Percentage thereof, in such Letter of Credit and the obligations of Borrower
with respect thereto and any security therefor and any guaranty pertaining
thereto at any time existing.
(g) Drawings on Letters of Credit. The Letter of Credit
Issuing Bank shall promptly notify (i) each Lender of the Letter of Credit
Issuing Bank's receipt of a drawing request under any Letter of Credit,
stating the amount of such Lender's Specified Percentage of such drawing
request and the date on which such request will be honored and (ii) Borrower
of the amount of such drawing request and the date on which such request will
be honored. Any failure of the Letter of Credit Issuing Bank to give or any
delay in the Letter of Credit Issuing Bank's giving any such notice shall not
release or diminish the obligations of Borrower or any Lender in respect
thereof. In determining whether to pay under any Letter of Credit, the Letter
of Credit Issuing Bank shall have no obligation to any Lender or the Borrower
other than to confirm that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. In the absence of gross
negligence or willful misconduct on the part of the Letter of Credit Issuing
Bank, the Letter of Credit Issuing Bank shall have no liability to any Lender
or the Borrower for any action taken or omitted to be taken by it under or in
connection with any Letter of Credit, including any such action negligently
taken or negligently omitted to be taken by it.
(h) Borrower's Reimbursement Obligation. Borrower shall pay
(either from the proceeds of the Loans or otherwise) to the Letter of Credit
Issuing Bank on demand at the Letter of Credit Issuing Bank's Domestic Lending
Office in Dollars in immediately available funds the amount of all
Reimbursement Obligations owing to the Letter of Credit Issuing Bank under any
Letter of Credit, together with interest thereon at a rate of interest equal
to the Alternate Base Rate in effect from time to time for each day from, and
including, the date of payment by the Letter of Credit Issuing Bank of the
applicable draw request under such Letter of Credit to, but excluding, the
payment in full to the Letter of Credit Issuing Bank of such Reimbursement
Obligations, irrespective of any claim, setoff, defense or other right which
Borrower may have at any time against the Letter of Credit Issuing Bank or any
other Person. In the event that the Letter of Credit Issuing Bank makes any
payment
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under any Letter of Credit and Borrower shall not have repaid such amount to
the Letter of Credit Issuing Bank when due, the Letter of Credit Issuing Bank
shall promptly notify each Lender of such failure, and each Lender shall
promptly and unconditionally pay to the Letter of Credit Issuing Bank the
amount of such Lender's Specified Percentage of such payment in Dollars in
immediately available funds on the Business Day the Letter of Credit Issuing
Bank so notifies such Lender if such notice is given prior to 12:00 Noon, New
York City time, or, if such notice is given after 12:00 Noon, New York City
time, such Lender shall make its Specified Percentage of such payment
available to the Letter of Credit Issuing Bank prior to 12:00 Noon, New York
City time, on the next succeeding Business Day. All such payments by the
Lenders shall constitute Alternate Base Rate Loans made by such Lenders to
Borrower pursuant to Section 2.2 (irrespective of the satisfaction of the
conditions in Article III, which are irrevocably waived) and the Reimbursement
Obligations with respect to which such Loans were made shall thereupon be
satisfied to the extent of such payments; provided, however, if pursuant to
any Law, such payment made by any Lender is not permitted to be made as a
Loan, such Reimbursement Obligations shall be reinstated and not so reduced by
the amount of such payment and such Lender's participations therein pursuant
to Section 2.17(f) similarly shall be reinstated to such amount.
(i) Lender's Obligations. If and to the extent any Lender
shall not make such Lender's Specified Percentage of any Reimbursement
Obligations available to the Letter of Credit Issuing Bank when due in
accordance with Section 2.17(h), such Lender agrees to pay interest to the
Letter of Credit Issuing Bank on such unpaid amount for each day from the date
such payment is due until the date such amount is paid in full to the Letter
of Credit Issuing Bank at the Federal Funds Rate until (and including) the
third Business Day after the date due and thereafter at the Alternate Base
Rate. The obligations of the Lenders under this Section 2.17(i) are several
and not joint or joint and several, and the failure of any Lender to make
available to the Letter of Credit Issuing Bank its Specified Percentage of any
Reimbursement Obligations when due in accordance with Section 2.17(h) shall
not relieve any other Lender of its obligation hereunder to make its Specified
Percentage of such Reimbursement Obligations so available when so due, but no
Lender shall be responsible for the failure of any other Lender to make such
other Lender's Specified Percentage of such Reimbursement Obligations so
available when so due.
(j) Reimbursement Obligation Payments. Whenever the Letter
of Credit Issuing Bank receives a payment of a Reimbursement Obligation from
or on behalf of Borrower as to which the Letter of
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Credit Issuing Bank has received any payment from a Lender pursuant to Section
2.17(h), the Letter of Credit Issuing Bank shall promptly pay to such Lender
an amount equal to such Lender's Specified Percentage of such payment from or
on behalf of Borrower. If any payment by or on behalf of Borrower and received
by the Letter of Credit Issuing Bank with respect to any Letter of Credit is
rescinded or must otherwise be returned by the Letter of Credit Issuing Bank
for any reason and the Letter of Credit Issuing Bank has paid to any Lender
any portion thereof, each such Lender shall forthwith pay over to the Letter
of Credit Issuing Bank an amount equal to such Lender's Specified Percentage
of the amount which must be so returned by the Letter of Credit Issuing Bank.
(k) Issuer's Costs and Expenses. Each Lender, upon the
demand of the Letter of Credit Issuing Bank, shall reimburse the Letter of
Credit Issuing Bank, to the extent the Letter of Credit Issuing Bank has not
been reimbursed by Borrower after demand therefor, for the reasonable costs
and expenses (including reasonable attorneys' fees) incurred by the Letter of
Credit Issuing Bank in connection with the collection of amounts due under,
and the preservation and enforcement of any rights conferred by, any Letter of
Credit or the performance of the Letter of Credit Issuing Bank's obligations
as issuer of the Letters of Credit under this Agreement in respect thereof, to
the extent of such Lender's Specified Percentage of the amount of such costs
and expenses provided, however, that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent the
same result solely from the gross negligence or willful misconduct of the
Agent. The Letter of Credit Issuing Bank shall refund any costs and expenses
reimbursed by such Lender that are subsequently recovered from Borrower in an
amount equal to such Lender's Specified Percentage thereof.
(l) Borrower's and Lenders' Obligations Absolute. The
obligation of the Borrower to reimburse the Letter of Credit Issuing Bank
pursuant to this Section 2.17, and the obligation of each Lender to make
available to the Letter of Credit Issuing Bank the amounts set forth in this
Section 2.17 shall be absolute, unconditional and irrevocable under any and
all circumstances, shall be made without reduction for any set-off,
counterclaim or other deduction of any nature whatsoever, may not be
terminated, suspended or delayed for any reason whatsoever, shall not be
subject to any qualification or exception and shall be made in accordance with
the terms and conditions of this Agreement under all circumstances, including
without limitation, any of the following circumstances:
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(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which Borrower may have at any time against a beneficiary named in
a Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Letter of Credit Issuing Bank,
any Lender or any other Person, whether in connection with this Agreement, any
other Loan Document, any Letter of Credit, the transactions contemplated in
the Loan Documents or any unrelated transactions (including any underlying
transaction between Borrower and the beneficiary named in any such Letter of
Credit);
(iii) any draft, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any Collateral
for the performance or observance of any of the terms of any of the
Loan Documents; or
(v) the occurrence of any Default or Event of
Default.
Nothing contained in this Section 2.17(l), however, shall require the Borrower
or any Lender to reimburse the Letter of Credit Issuing Bank for any amounts
that become due by reason of the Letter of Credit Issuing Bank's gross
negligence or wilful misconduct.
(m) Letter of Credit Fees. Borrower shall pay to the Letter
of Credit Issuing Bank, for the ratable account of the Lenders, a letter of
credit fee on the Letter of Credit Undrawn Amount for each day at the rate per
annum equal to the Applicable Letter of Credit Fee Percentage, calculated on
the basis of a 360-day year, payable in arrears on each Quarterly Date prior
to the Maturity Date and on the date any Letter of Credit is canceled or
expires to the extent accrued and unpaid on the amount subject to such
cancellation or expiration.
(n) Increased Costs. Without duplication of any amounts
owing pursuant to Section 2.14, if after the date of this Agreement any change
in any applicable Law or in the interpretation or administration thereof by
any central bank or comparable agency or any other Tribunal charged with the
interpretation or
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administration thereof (whether or not having the force of law) shall impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of or credit extended by
any Lender or the Letter of Credit Issuing Bank, or shall impose on such
Lender or the Letter of Credit Issuing Bank any other condition affecting this
Agreement or any Letter of Credit or participation therein, and the result of
any of the foregoing shall be to increase the cost to such Lender or the
Letter of Credit Issuing Bank of issuing or maintaining any Letter of Credit,
paying or funding any draw request thereunder or purchasing or maintaining a
participation therein, or to reduce the amount of any sum received or
receivable by such Lender hereunder or the Letter of Credit Issuing Bank
hereunder or under any Letter of Credit Reimbursement Agreement (whether of
principal, interest, fees or otherwise) by an amount reasonably determined by
such Lender or the Letter of Credit Issuing Bank to be material, then Borrower
shall pay to such Lender or the Letter of Credit Issuing Bank, as the case may
be, following receipt of a notice from such Lender or the Letter of Credit
Issuing Bank, as the case may be, to such effect, such additional amount or
amounts as will compensate such Lender or the Letter of Credit Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered.
The Letter of Credit Issuing Bank or any Lender requiring payment under this
Section 2.17(n) shall deliver to Borrower a statement reasonably setting forth
the amount and manner of determination thereof, which statement shall be
conclusive, absent manifest error.
(o) Capital Adequacy. Without duplication of any amount
owing pursuant to Section 2.16, if any Lender or the Letter of Credit Issuing
Bank shall have determined that (i) the adoption after the date of this
Agreement of any Law, guideline or directive regarding capital adequacy, (ii)
any change after the date of this Agreement in any such Law, guideline or
directive or in the interpretation or administration thereof after the date
hereof by any central bank or comparable agency or any other Tribunal charged
with the interpretation or administration thereof or (iii) compliance by any
Lender (or any lending office of such Lender) or the Letter of Credit Issuing
Bank or any Lender's or the Letter of Credit Issuing Bank's holding company
with any request or directive regarding capital adequacy issued after the date
hereof under any Law or guideline (whether or not having the force of law) of
any Tribunal has or would have the effect of reducing the rate of return on
such Lender's or the Letter of Credit Issuing Bank's capital or on the capital
of such Lender's or the Letter of Credit Issuing Bank's holding company, if
any, as a consequence of this Agreement, the Letter of Credit Reimbursement
Agreement or the
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participations in Letters of Credit purchased by such Lender pursuant hereto
or the Letters of Credit issued by the Letter of Credit Issuing Bank pursuant
hereto to a level below that which such Lender or the Letter of Credit Issuing
Bank or such Lender's or the Letter of Credit Issuing Bank's holding company
could have achieved but for such applicability, adoption, change or compliance
(taking into consideration such Lender's or the Letter of Credit Issuing
Bank's policies and the policies of such Lender's or the Letter of Credit
Issuing Bank's holding company with respect to capital adequacy) by an amount
reasonably determined by such Lender or the Letter of Credit Issuing Bank to
be material, then from time to time Borrower shall pay to such Lender or the
Letter of Credit Issuing Bank, as the case may be, following receipt of a
notice from such Lender to such effect, such additional amount or amounts as
shall compensate such Lender or the Letter of Credit Issuing Bank or such
Lender's or the Letter of Credit Issuing Bank's holding company for any such
reduction suffered. The Letter of Credit Issuing Bank or any Lender requiring
payment under this Section 2.17(o) shall deliver to Borrower a statement
reasonably setting forth the amount and manner of determination thereof, which
statement shall be conclusive, absent manifest error.
(p) Cash Collateral. During the continuance of any Event of
Default, the Letter of Credit Issuing Bank, on notice to Borrower, may (but
shall not be obligated to), and, if so directed by the Required Lenders,
shall, demand that Borrower deliver cash collateral to the Letter of Credit
Issuing Bank in an amount equal to the aggregate amount of Letter of Credit
Obligations then outstanding, whereupon Borrower shall be obligated to deliver
such cash collateral immediately; provided, however, that if an Event of
Default as described in Section 7.6 or 7.7 occurs, then, without any demand or
notice from the Letter of Credit Issuing Bank or any Lender, Borrower shall
deliver such cash collateral to the Letter of Credit Issuing Bank immediately
upon the occurrence of such Event of Default. Such cash collateralization
shall be made by deposit by Borrower of Dollars in immediately available
funds, in the amount of such required cash collateralization into a
non-interest bearing cash collateral account at the Letter of Credit Issuing
Bank, which account shall be under the sole dominion and control of the Letter
of Credit Issuing Bank and is hereby pledged to the Letter of Credit Issuing
Bank for the benefit of itself and the Lenders as security for the payment of
any Letter of Credit Obligations and any other Obligations that may become
payable under any Loan Documents. Funds deposited in such account (i) shall
automatically be applied by the Letter of Credit Issuing Bank to reimburse the
Letter of Credit Issuing Bank for all Reimbursement Obligations that Borrower
has not paid, and thereafter (ii) may be
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applied by the Letter of Credit Issuing Bank against the Letter of Credit
Obligations as they become due or, if the maturity of the Loans has been
accelerated, against payment of any other Obligations under the Loan Documents
as such amounts become due. Any funds remaining in such account when all
Letter of Credit Obligations and all other Obligations payable under the Loan
Documents have been paid shall be promptly remitted to Borrower. The rights
granted under this Section 2.17(p) shall be in addition to any other rights
available to the Letter of Credit Issuing Bank and the Lenders under Article
VIII.
(q) Conditions to the Issuance of Letters of Credit. The
obligation of the Letter of Credit Issuing Bank to issue any Letter of Credit
is subject to the satisfaction of the following conditions precedent on the
date of the issuance of such Letter of Credit:
(i) Each condition specified in Section 3.1 shall
have been and shall continue to be satisfied;
(ii) the Letter of Credit Issuing Bank has received
a Letter of Credit Reimbursement Agreement, duly executed and delivered by
Borrower, and such other documents and items relating to such Letter of Credit
as the Letter of Credit Issuing Bank reasonably may request;
(iii) the Letter of Credit Issuing Bank has
received a Letter of Credit Request with respect to such Letter of Credit in
accordance with Section 2.17(e);
(iv) the representations and warranties set forth
herein and each of the other Loan Documents shall be deemed made by each
Obligor to the Lenders and the Letter of Credit Issuing Bank as of such date
(unless made only as of a specific date) and the same shall be true and
correct;
(v) no Default or Event of Default exists or would
exist as a result of the issuance of such Letter of Credit;
(vi) the issuance of such Letter of Credit will not
contravene any Law applicable to the Letter of Credit Issuing Bank or any
Lender;
(vii) the Letter of Credit Issuing Bank has
received all amounts due to the Letter of Credit Issuing Bank in connection
with such Letter of Credit;
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(viii) the Letter of Credit Issuing Bank has
received a Funding Certificate signed by the Chief Financial Officer of the
Obligors; and
(ix) no event or condition shall have occurred
which could reasonably be expected to have a Material Adverse Effect.
ARTICLE III
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to the Effectiveness of
Third Amended and Restated Credit Agreement. The effectiveness of this
Agreement on the Closing Date is subject to receipt by the Agent on or before
the Closing Date of the Notes as described in clause (a) below for each
Lender, and of each of the other documents described below (with a copy for
each Lender) in form and substance satisfactory to the Lenders (except as
otherwise set forth in this Section 3.1):
(a) Execution and Notes. This Agreement, duly executed and
delivered by each of the Obligors, each of the Subsidiaries guaranteeing
payment and performance of the Obligations, the Lenders, the Agent and the
Letter of Credit Issuing Bank, and the Notes, duly executed by Borrower and
payable to the order of each Lender, as described in Section 2.2(g), dated as
of the date of this Agreement.
(b) Guaranty. The Guaranty, duly executed by each Subsidiary
of Borrower, dated as of the date of this Agreement.
(c) Mortgages and Fixture Filings. (i) Mortgages, or, to the
extent Mortgages were previously delivered, mortgage modification agreements
covering the fee properties set forth on Schedule 3.1(c)-1, duly executed by
the appropriate Obligor, dated as of the date of this Agreement and (ii) UCC
fixture filings in the locations set forth on Schedule 3.1(c)-2, duly executed
by such parties.
(d) Borrower Security Agreement. The Borrower Security
Agreement, duly executed and completed by Borrower, dated as of the date of
this Agreement, together with all promissory notes owned by Borrower not
previously endorsed to the Agent, duly endorsed to the Agent.
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(e) Subsidiary Security Agreement. The Subsidiary Security
Agreement, duly executed and completed by each Subsidiary of Borrower, dated
as of the date of this Agreement, together with all promissory notes owned by
such Subsidiaries not previously endorsed to the Agent, duly endorsed to the
Agent.
(f) Borrower Pledge Agreement. The Borrower Pledge
Agreement, duly executed and completed by Borrower, dated as of the date of
this Agreement, granting to the Lenders a lien on and security interest in all
capital stock owned by Borrower, together with the stock certificates
representing all such capital stock owned by Borrower and related stock powers
duly executed in blank not previously pledged to Agent.
(g) Subsidiary Pledge Agreement. The Subsidiary Pledge
Agreement, duly executed and completed by each Subsidiary of the Borrower
(including special purpose license subsidiaries holding FCC radio licenses)
granting to the Lenders a lien on and security interest in all capital stock
owned by such Subsidiaries, together with the stock certificates representing
all such capital stock and related stock powers duly executed in blank.
(h) Intercompany Notes. The Intercompany Notes that have not
yet been endorsed by the payee thereunder to the Agent, duly executed by each
applicable Subsidiary, dated as of the date of this Agreement and duly
endorsed by the payee thereunder to the Agent.
(i) UCC Financing Statements. New UCC financing statements,
assignments and/or amendments to existing UCC financing statements and all
other requisite filing documents deemed necessary by the Agent to perfect the
Liens in favor of the Agent, as secured party, for the ratable benefit of the
Lenders, duly executed by the appropriate Obligor, to be recorded with the
appropriate filing offices.
(j) Lien Searches. Results of a recent search, by a Person
satisfactory to the Agent, of the Uniform Commercial Code and tax lien filings
which may have been filed with respect to personal property of any Obligor, in
each of the jurisdictions where assets of such Obligor are located, and the
results of such search shall reveal no Liens on any of the assets of such
Obligor, except for Permitted Liens, and shall otherwise be satisfactory to
the Agent.
(k) Cancellation of Liens. Evidence that all Liens other
than Permitted Liens have been cancelled and released,
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including duly executed releases and UCC-3 financing statements in recordable
form and otherwise in form and substance satisfactory to the Agent, as may be
necessary to reflect that the Liens assigned and granted to the Agent, as
secured party for the ratable benefit of the Lenders, and the Security
Documents are first and prior Liens.
(l) Copies of Exception Documents. To the extent required by
the Agent, copies of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies and a copy, certified by
such parties as the Agent may deem appropriate, of all other documents
affecting the property covered by each Mortgage.
(m) Flood Insurance. The Agent shall have determined that no
flood insurance is required in connection with the properties covered by the
Mortgages or, if necessary, Borrower shall have provided evidence,
satisfactory to the Agent, that Borrower has purchased such required flood
insurance.
(n) Environmental Audit. To the extent requested by the
Agent, the Agent shall have received an environmental audit (which shall be a
Phase I, unless the initial findings indicate a need for additional review) in
form and substance satisfactory to it from an environmental consulting firm
acceptable to the Agent with respect to any environmental hazards, conditions
or liabilities (contingent or otherwise) to which any Obligor may be subject.
(o) Landlord Waivers and Consents. To the extent the Agent
so requires, the Agent shall have received landlord waivers and consents
signed by each lessor of a Material Lease waiving such lessor's liens in and
to the equipment or fixtures of the applicable Obligor located on the leased
premises and consenting to an assignment of the applicable lease to the
Lenders, in form and substance satisfactory to the Agent.
(p) Existence, Good Standing and Authority. Original
certificates dated a Current Date of existence and good standing, as
applicable from appropriate officials of each Obligor's respective state of
incorporation and certificates dated a Current Date of good standing and
authority to do business from appropriate officials of any and all
jurisdictions where each Obligor's property or business makes qualification to
transact business therein necessary and where the failure to be so qualified
could reasonably be expected to have a Material Adverse Effect.
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(q) Resolutions. Copies of resolutions of each Obligor
approving this Agreement and the other Loan Documents to which such Obligor is
a party and authorizing the transactions contemplated herein and therein, duly
adopted at a meeting of, or by the unanimous written consent of, the Board of
Directors of such Obligor.
(r) Charter Documents. A copy of all Charter Documents of
each Obligor. The articles/certificate of incorporation of each Obligor shall
be accompanied by an original certificate issued by the Secretary of the State
of incorporation of such Obligor dated a Current Date certifying that such
copy is correct and complete.
(s) Officers' Certificate. A duly executed Officers'
Certificate, dated the date of this Agreement, in the form of Exhibit K, from
an executive officer and the Secretary or Assistant Secretary of each Obligor.
(t) Opinions of Counsel. An original executed opinion dated
the date of this Agreement from Baker & McKenzie, counsel to Borrower,
substantially in the form of Exhibit L and such opinions of local counsel to
Borrower as the Agent may require in respect of the Mortgages, other Security
Documents, and such other legal opinions, letter and other documentation as
the Agent may reasonably request, in form and substance satisfactory to the
Agent.
(u) Opinion of FCC Counsel. An original executed opinion
dated the date of this Agreement from Fisher Wayland Cooper Leader & Zarogoza
LLP, FCC counsel to Borrower, substantially in the form of Exhibit M.
(v) Insurance. Certificates of insurance naming the Agent as
loss payee for the benefit of the Lenders and the Agent and the Lenders as
additional insureds, as required by Section 5.7.
(w) Fees and Expenses. Borrower shall have paid to the Agent
(i) all fees and expenses to be received by the Agent and the Lenders that are
due and payable on the date of this Agreement pursuant to this Agreement or
any other Loan Document and (ii) an amount equal to the estimated costs and
out-of-pocket expenses of the Agent's counsel incurred in connection with the
preparation, examination, negotiation, execution and delivery of this
Agreement, the other Loan Documents and the consummation of the transactions
contemplated by the foregoing.
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(x) Financial Information. Certified copies of a Compliance
Certificate of Borrower reflecting the Obligations to be incurred hereunder,
if applicable, but using the results of operations for the most recent twelve
month period for which Financial Statements are available, satisfactory to the
Lenders.
(y) Perfection Certificate. A Perfection Certificate, dated
the date of this Agreement, duly executed by each Obligor, in the form of
Exhibit N (the "Perfection Certificate").
(z) No Material Litigation. No litigation, inquiry,
injunction or restraining order shall be pending, entered or threatened
(including any proposed statute, rule or regulation) that could reasonably be
expected to have a Material Adverse Effect.
(aa) Solvency Certificate. A duly executed Solvency
Certificate as to Borrower and each of its Subsidiaries dated the date of this
Agreement in the form of Exhibit P.
Section 3.2 Conditions Precedent to All Loans and Letters of
Credit. The obligation of each Lender to make any Loans, including its initial
Loans, and in the case of the Letter of Credit Issuing Bank, to issue Letters
of Credit, is subject to the following conditions:
(a) Compliance with Section 3.1. Each condition specified in
Section 3.1 shall have been and shall continue to be satisfied.
(b) Notice of Borrowing. Borrower shall have submitted a
notice of borrowing in accordance with Section 2.2(a) or 2.2(b).
(c) Representations and Warranties. On each Borrowing Date
the representations and warranties made in this Agreement and the other Loan
Documents shall be deemed made by each Obligor to the Agent and the Lenders as
of such date (unless made only as of a specific date) and the same shall be
true and correct.
(d) No Material Adverse Effect. No event or condition shall
have occurred which could reasonably be expected to have a Material Adverse
Effect.
(e) No Default. No Default or Event of Default shall exist
or would exist after giving effect to such borrowing.
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(f) Legality. The making of the Loans is permitted by Law.
(g) Funding Certificate. The Agent shall have received a
Funding Certificate signed by the Chief Financial Officer of the Borrower.
(h) Other Documents. The Lenders shall have received such
other agreements, documents, instruments, legal memoranda, certificates,
information, approvals or opinions as the Agent may reasonably request.
Section 3.3 Permitted Acquisitions. The closing of all
Permitted Acquisitions is subject to the following conditions:
(a) Permitted Acquisition Agreements. All material
agreements relating to a Permitted Acquisition shall be in form and substance
reasonably satisfactory to the Agent.
(b) FCC and SEC Issues. The Agent shall be satisfied that
each Permitted Acquisition complies with applicable laws or regulations,
including applicable regulations of the FCC and SEC.
(c) Security Documents. Additional documents as may be
necessary to effect the pledge of all assets acquired in a Permitted
Acquisition shall be delivered promptly after the closing of the Permitted
Acquisition in accordance with Section 5.12 hereof.
Section 3.4 Loans. If a borrowing is a Loan in connection
with the closing of a Permitted Acquisition, (a) the Agent or the Required
Lenders, as the case may be, shall have given the requisite approval therefor
to the extent necessary hereunder, (b) Borrower and its Wholly-Owned
Subsidiaries shall have obtained Final Orders with respect to all Necessary
Authorizations required to be obtained by Borrower or such Subsidiaries in
connection therewith and (c) the Agent and the Lenders shall have received a
Compliance Certificate evidencing that no Default or Event of Default would
exist as a result of such Permitted Acquisition. If a borrowing or Letter of
Credit is requested for the purpose of funding a cash deposit, or providing
security in lieu thereof, or for an option fee payment, in connection with a
proposed Permitted Acquisition, Borrower shall certify to the Agent and the
Lenders in the Funding Certificate that, after making such borrowing or after
the issuance of such Letter of Credit that Borrower is in compliance with
Section 6.4.
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Section 3.5 Continuations/Conversions. LIBOR Loans may be
continued as LIBOR Loans at the end of the applicable Interest Period and
Alternate Base Rate Loans may be Converted to LIBOR Loans, subject to the
following conditions: on the last day of the applicable Interest Period or, as
the case may be, the date of Conversion (i) no event or condition shall have
occurred which could reasonably be expected to have a Material Adverse Effect;
(ii) no Default or Event of Default shall exist; (iii) the representations and
warranties made in this Agreement and the other Loan Documents shall be deemed
made by each Obligor to the Agent and the Lenders as of such date (unless made
only as of a specific date) and the same shall be true and correct; and (iv)
Borrower shall have submitted the applicable notice required by Section
2.2(c).
Section 3.6 Materiality of Conditions. Each condition
precedent herein is material to the transactions contemplated by the Loan
Documents.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Obligor represents and warrants to the Agent and the
Lenders as follows:
Section 4.1 Corporate Existence and Authority. Each Obligor
(a) is a corporation duly organized, validly existing and in good standing
under the Law of its jurisdiction of incorporation, (b) has all requisite
corporate power to conduct its business and to execute and deliver and perform
its obligations under this Agreement and the other Loan Documents to which it
is a party and (c) is duly qualified to transact business and in good standing
as a foreign corporation in each jurisdiction where the nature and extent of
its assets, business, properties or operations require the same (such
jurisdictions being identified on Schedule 4.1), except where failure to be so
duly qualified and in good standing could not reasonably be expected to have a
Material Adverse Effect.
Section 4.2 Authorization; Binding Obligations. The
execution, delivery and performance by each Obligor of this Agreement and each
other Loan Document to which such Obligor is or will be a party, and the
incurrence of the Debt and other Obligations contemplated hereby and thereby,
have been duly authorized and approved by all necessary corporate action on
the
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part of such Obligor. Except insofar as the enforceability of a Loan Document
may be limited by applicable Debtor Relief Laws or subject to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law), (a) this Agreement constitutes the
legal, valid and binding obligation of each Obligor, (b) each other Loan
Document to which any Obligor is or will be a party will be, when executed and
delivered by such Obligor, the legal, valid and binding obligation of such
Obligor and (c) each Loan Document to which an Obligor has or will become a
party will be enforceable against such Obligor in accordance with its terms.
Section 4.3 Compliance with Laws and Documents; No Default.
No Obligor is in breach or violation of or in default under (a) other than
such violations which individually or in the aggregate could not be reasonably
expected to have a Material Adverse Effect, any applicable Law (b) the
Existing Subordinated Note Indenture or the 1996 Indenture, (c) any Material
Lease or LMA Agreement, (d) other than such breaches, violations or defaults
that individually or in the aggregate could not be reasonably expected to have
a Material Adverse Effect, any other Contractual Obligation or (e) its Charter
Documents. No Obligor's execution, delivery, performance, or compliance with
the terms of a Loan Document does or will, and consummation of the
transactions contemplated by the Loan Documents does not and will not: (a)
conflict with, breach, violate or constitute a default under (i) any
applicable Law, (ii) the 1996 Indenture, (iii) the Charter Documents of any
Obligor, or (iv) any other Contractual Obligation of any Obligor; (b) result
in the mandatory acceleration or prepayment of any Debt owed by any Obligor or
afford any holder of any such Debt the right to require any Obligor to
purchase, redeem or otherwise acquire, reacquire or repay any such Debt; or
(c) result in the imposition of any Lien upon the assets, properties, revenues
or Rights of any Obligor (other than Liens imposed or created or to be imposed
or created under or pursuant to the Loan Documents).
Section 4.4 Ownership. All the outstanding shares of capital
stock of each Obligor are duly authorized, validly issued, fully paid and
nonassessable, and none of such shares has been issued in violation of any
preemptive or preferential Rights of any Person. As of the date hereof, no
voting trusts, shareholder agreements or other voting arrangements or any
other agreements exist with respect to the capital stock of any Obligor to
which any Obligor, or any Affiliate of any Obligor, is a party, or of which
any Obligor, or any Affiliate of any Obligor, has knowledge, other than those
listed on Schedule 4.4(A). As of the date hereof, no
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outstanding subscription, contract, convertible or exchangeable security,
option, warrant, call or other Right (whether absolute or contingent,
statutory or otherwise) obligating or permitting any Obligor to issue, sell,
exchange or otherwise dispose of or to purchase, redeem or otherwise acquire
shares of, or securities convertible into or exchangeable for, capital stock
of any Obligor exists except as set forth on Schedule 4.4(B). As of the date
hereof, no capital stock of any Obligor is subject to any restriction on
transfer thereof except as set forth on Schedule 4.4(C) and except for
restrictions imposed by federal or state securities Laws or which may arise as
a result of any Obligor being subject to the Communications Act. Pursuant to
the Pledge Agreements, the Lenders at all times will hold a valid and
perfected first priority Lien on all the issued and outstanding capital stock
of each Subsidiary of Borrower, on a fully diluted basis. With the exception
of ABS, in which Borrower holds at least a 96% interest, each Subsidiary of
Borrower is, directly or indirectly, a Wholly-Owned Subsidiary and, except for
Subsidiaries organized by Borrower in connection with a Permitted Acquisition
or an exchange of assets as permitted by Section 6.12(b), Borrower has no
Subsidiaries as of the date hereof other than those listed on Schedule 4.4(D).
Section 4.5 Other Corporate or Trade Names. During the
period of five years ending on the date of this Agreement, no Obligor has
transacted business under any corporate or trade name, been a party to any
merger, combination or consolidation or acquired all or substantially all of
the assets of any Person other than as set forth in the Perfection
Certificate.
Section 4.6 Fiscal Year. The fiscal year of Borrower ends on
December 31.
Section 4.7 Business. No Obligor is directly or indirectly
engaged in any business other than the radio broadcast business and that which
is incidental or related to radio broadcasting, including concert promotion.
Section 4.8 Relationship with Lenders. No Person who may be
deemed to have "control" of any Obligor is an "executive officer," "director"
or "principal shareholder" of any Lender or any correspondent of any Lender,
as such terms are defined in section 215.2 of Regulation O of the Federal
Reserve Board.
Section 4.9 Financial Statements. The Current Financials and
all other Financial Statements of the Obligors have been or will be prepared
in accordance with GAAP and present fairly
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the consolidated and consolidating financial conditions and results of
operations of the Obligors as of, and for the portion of the fiscal year
ending on, the date or dates thereof. All material liabilities (direct or
indirect, fixed or contingent) of the Obligors as of the date or dates of the
Current Financials and all other Financial Statements of the Obligors are
reflected thereon or in the notes thereto. Since December 31, 1996, no other
material liabilities (direct or indirect, fixed or contingent) have been
incurred by any Obligor.
Section 4.10 Litigation. Other than as set forth in Schedule
4.10, no Obligor is involved in, the subject of or aware of any threat against
any Obligor of any Litigation that could reasonably be expected to have a
Material Adverse Effect, and no outstanding or unpaid judgments against any
Obligor exist.
Section 4.11 Taxes. Except as disclosed in Schedule 4.11
hereto, all United States federal income tax returns of Borrower and its
Subsidiaries required by law to be filed have been filed and all taxes shown
by such returns or otherwise assessed, which are due and payable, have been
paid, except assessments which are being contested in good faith by
appropriate proceedings, for which the criteria for Permitted Liens have been
satisfied, including, without limitation, for which adequate reserves are
maintained in accordance with GAAP. Except as disclosed in Schedule 4.11
hereto, each Obligor has filed all other tax returns that are required to have
been filed by it pursuant to applicable foreign, state, local or other law
except insofar as the failure to file such returns would not have a Material
Adverse Effect and has paid all taxes and other assessments due pursuant to
such returns or pursuant to any assessment received by any Obligor, except for
such taxes and other assessments, if any, as are being contested in good
faith, for which the criteria for Permitted Liens have been satisfied,
including, without limitation, for which adequate reserves are maintained in
accordance with GAAP. The charges, accruals and reserves on the books of the
Obligors in respect of any income and corporation tax liability for any years
not finally determined are adequate in accordance with GAAP to meet any
assessments or reassessments for additional tax for all years not finally
determined.
Section 4.12 Government Regulation. No Obligor is (a) an
"investment company" or a company "controlled by" an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder, (b) a "holding company" or a
"subsidiary" or "affiliate" of a "holding company" or a "public utility," as
such
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terms are defined in the Public Utility Holding Company Act of 1935, as
amended, and the rules and regulations thereunder or (c) subject to any Law
that regulates or otherwise limits its ability to issue promissory notes or
securities (other than, with respect to the issuance of securities, the
Communications Act, the Securities Act, the Trust Indenture Act of 1939, as
amended, and the rules and regulations thereunder, and state "blue sky" laws)
or to consummate the transactions contemplated by the Loan Documents. None of
the transactions contemplated by this Agreement will violate or result in a
violation of Section 7 of the Exchange Act or any regulations thereunder,
including, without limitation, Regulations G, T, U and X of the Federal
Reserve Board. None of the proceeds from the Loans will be used to purchase or
carry (or refinance any borrowing the proceeds of which were used to purchase
or carry) any "margin stock" in violation of the Exchange Act. No Loans will
be secured directly or indirectly in whole or in part by collateral that
includes any "margin stock." The making of the Loans and the issue and
acquisition of the Notes do not constitute "purpose credit" within the meaning
of Regulation G or U of the Federal Reserve Board, and the Lenders are not
required to obtain a statement from Borrower on any Federal Reserve Board form
with respect to the extension of credit hereunder. Borrower does not intend to
apply, nor will it apply, any part of the proceeds of the Loans in any manner
that is unlawful or would involve a violation of the Foreign Assets Control
Regulations or the Cuban Assets Control Regulations of the United States
Treasury Department or any other Law applicable to Borrower or the
transactions contemplated by this Agreement.
Section 4.13 Employee Benefit Plans. Neither Borrower nor
any ERISA Affiliate has incurred nor is reasonably expected to incur any
withdrawal liability under ERISA to, or with respect to, any Multiemployer
Plan. Neither Borrower nor any ERISA Affiliate or any fiduciary of any Plan or
Welfare Plan has engaged in any conduct which it knew or should have known to
constitute a prohibited transaction within the meaning of section 4975 of the
Code or sections 406 or 407 of ERISA or breached any fiduciary duty under Part
4 of Title I of ERISA owed with respect to any Plan or any Welfare Plan. The
execution and delivery of this Agreement, the consummation of the transactions
contemplated by this Agreement and the lending of funds pursuant to the
provisions of this Agreement will not involve any prohibited transaction
within the meaning of sections 406 or 407 of ERISA or section 4975 of the
Code. No Plan established or maintained by Borrower or any ERISA Affiliate, or
to which Borrower or any ERISA Affiliate has made contributions, had an
accumulated funding deficiency (as such term is defined in section 302 of
ERISA or section 412 of the Code),
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whether or not waived, as of the last day of the most recently ended plan year
of such Plan. No liability, individually or in the aggregate, to the PBGC
(other than required insurance premiums, all of which that are due and have
been paid) has been incurred by Borrower or any ERISA Affiliate with respect
to any Plan or Multiple Employer Plan. No event or conditions, other than a
Termination Event, has occurred, or is reasonably expected to occur, which
presents a material risk of the termination of any Plan under circumstances
which could result in a material liability to Borrower, directly or as a
result of an ERISA Affiliate's liability. All material obligations of Borrower
or of any ERISA Affiliate (but only if such ERISA Affiliate's obligations
could result in a material liability to Borrower) for payments by any of them
to any trust or other fund or to any governmental or administrative authority
with respect to pension benefits, unemployment compensation benefits, social
security or other benefits for employees or former employees of Borrower or of
any ERISA Affiliate, whether arising by operation of Law, by contract or by
legally binding past custom or practice, have been paid, or adequate accruals
therefor have been made in the books and records of Borrower or the
appropriate ERISA Affiliate. None of the obligations described in the
preceding sentence has been rendered not due by reason of any extension,
whether at the request of Borrower, any ERISA Affiliate, or otherwise. All
material obligations of Borrower or of any ERISA Affiliate (but only if such
ERISA Affiliate's obligations could result in a material liability to
Borrower) for salaries, vacation and holiday pay, bonuses and other forms of
compensation, current or deferred, payable to employees or former employees of
Borrower or of any ERISA Affiliate, whether arising by operation of Law, by
contract, by legally binding past custom or practice or otherwise, have been
paid, or adequate accruals therefor have been made in books and records of
Borrower or the appropriate ERISA Affiliate for such obligations have been
made. For purposes of this Section 4.13, an obligation or liability shall be
considered material if it could reasonably be expected to result, individually
or in the aggregate, in a Material Adverse Effect. No Lien in favor of a Plan,
a Welfare Plan, the PBGC or any Multiemployer Plan exists nor has there been
any occurrence that, with the passage of time, could reasonably be expected to
result in the imposition of such a Lien which could be superior to the Liens
in favor of Lenders or which could reasonably be expected to result in a
material liability to Borrower. Neither Borrower nor any ERISA Affiliate is
aware of any failure to comply with the continuing health care coverage
requirements of sections 162(k) or Part 6 of Title I of ERISA. All Plans and
related trust agreements, annuity contracts or other funding instruments
comply currently, or have complied in the past,
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with ERISA and the Code, where required to meet the requirements of sections
401(a) and 403(a) of the Code, and all other applicable Laws. All necessary
government approvals for the Plans and each amendment thereto have been
obtained or will be timely obtained. There are no excise Taxes, additions to
tax or penalties due to any entity or agency as a result of the maintenance or
operation of any Plan or Welfare Plan. No Welfare Plan currently provides or
is obligated to provide benefits to former employees of Borrower or of any
ERISA Affiliate.
Section 4.14 Purpose of Loan. The proceeds of the Loans have
been or will be used only to fund Permitted Acquisitions (including
transactions costs associated therewith), to fund cash deposits made in
connection with proposed acquisitions prior to approval thereof as a Permitted
Acquisition (to the extent necessary hereunder) by the Agent or the Required
Lenders, as the case may be, for issuance of standby Letters of Credit and for
working capital or general corporate purposes of the Obligors. No proceeds of
the Loans have been loaned, contributed or otherwise advanced by any Obligor
to any other Person except as permitted by Section 6.3. The Letters of Credit
shall be used by Borrower only as security, in lieu of cash deposits, in
connection with proposed Permitted Acquisitions and for general corporate
purposes other than in connection with a proposed Permitted Acquisition.
Section 4.15 Certain Material Agreements. Except for
Operating Agreements, LMA Agreements and except as described in Schedule 4.15,
no Obligor is a party to any management or sales agreement. Except for
Material Leases entered into in connection with the consummation of a
Permitted Acquisition and except as described in Schedule 4.15, no Obligor is
a party to any Material Lease.
Section 4.16 No Consents. No order, consent, approval,
license, permit, franchise, waiver, exemption, authorization of or validation
of, or filing, recording or registration with (except those that have been
heretofore obtained or made) or exemption by, any Person or Tribunal
(including the FCC) is required to authorize, or is required in connection
with, the execution, delivery, performance, legality, validity, binding effect
or enforceability of this Agreement and the other Loan Documents except for
(a) to the extent required by Law, the filing with the FCC of this Agreement
and certain of the other Loan Documents pursuant to FCC rules, which shall be
accomplished within the required time period after the date this Agreement is
executed and delivered by the parties hereto, (b) the filing of UCC financing
statements, the Mortgages and other actions expressly required to
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be taken pursuant to the Loan Documents and (c) the consent of the FCC (and
FCC filings in connection with such consent) to the extent required in
connection with the exercise by the Agent or the Lenders of their rights and
remedies hereunder or under the Security Documents.
Section 4.17 Environmental Laws; Hazardous Substances. Other
than as set forth in Schedule 4.17, each Obligor is in compliance with all
Environmental Laws applicable to it, including, without limitation, the
operations currently being conducted, or to be conducted, on the real property
owned or leased by such Obligor, other than violations of such Laws which
could not reasonably be expected to have a Material Adverse Effect. Other than
as set forth in Schedule 4.17, no Obligor has received any summons, complaint,
order or similar notice that it or its owned or leased real property is not in
compliance with, or that any Tribunal is investigating its compliance with,
Environmental Laws and is otherwise unaware of any contingent liability with
respect to its owned or leased real property or such real property's
noncompliance with Environmental Laws or its generation, handling, use,
storage or disposal of Hazardous Substances.
Section 4.18 Chief Executive Office; Location of Collateral;
Assumed and Trade Names; Priority of Liens. Except for information not
reflected therein as a result of the consummation of any Permitted Acquisition
or an exchange of assets permitted by Section 6.12(b), the Perfection
Certificate correctly sets forth (a) the address of the present chief
executive office of each Obligor, (b) the present and foreseeable location of
all the books and records relating to accounts and accounts receivable of each
Obligor (all of which are in the possession or control of such Obligor), (c)
the location of all assets of each Obligor, including all real property owned
or leased by such Obligor (as lessee, sublessee or lessor), (d) all assumed or
trade names and all prior corporate names of each Obligor and (e) all
registered trademarks and copyrights owned or licensed by each Obligor. Each
Obligor is entitled to receive notices under the Loan Documents at its chief
executive office, notwithstanding that such Obligor may maintain other places
of business. Pursuant to the Security Documents, the Agent, as secured party
or beneficiary thereunder, holds, for the pro rata benefit of the Lenders,
valid and perfected, first priority Liens in and to or on the Collateral
covered thereby, subject only to Permitted Liens.
Section 4.19 Insurance. All insurance maintained by the
Obligors is in compliance with the requirements of Section 5.7, including,
without limitation, the requirement that the Agent be
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named as a loss payee for the benefit of the Lenders under casualty policies
of insurance and that the Agent and the Lenders be named as additional
insureds under liability policies of insurance.
Section 4.20 Real Property; Leases. Each Obligor has good
and marketable title to, or a valid and subsisting leasehold interest in, all
its assets, property and revenues, subject to no Liens except for Permitted
Liens. Each Obligor enjoys peaceful and undisturbed possession of its owned
and leased real property and the improvements thereon and no Material Lease or
other lease material to the operation of any Obligor's business contains any
unusual provisions that might adversely affect or impair such Obligor's use
and enjoyment of the property covered thereby or the operation of such
Obligor's business. All Material Leases and such other material leases are in
full force and effect and no default or potential default exists thereunder.
Section 4.21 Ownership of Stations. Schedule 4.21 completely
and correctly lists each radio station owned directly or indirectly by any
Obligor (individually, a "Station" and collectively, the "Stations") as of the
date of this Agreement. No Obligor owns any radio stations other than the
Stations or those acquired in connection with a Permitted Acquisition or an
exchange of assets permitted by Section 6.12(b).
Section 4.22 Possession of Franchises, Licenses, Etc. Each
Obligor possesses all Necessary Authorizations for its respective business,
free from any unusual or materially adverse restrictions. No Obligor is in
violation of any Necessary Authorization except for such violations that
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
Section 4.23 FCC, Copyright, Patent and Trademark Matters.
Except as disclosed on Schedule 4.23, each Obligor has duly and timely made
all filings and placements in its respective public inspection files (other
than immaterial filings and placements) and taken other steps as are required
by the Communications Act and is in all material respects in compliance with
the Communications Act, including, without limitation, the rules, regulations
and policies of the FCC relating to the acquisition and operation of radio
stations, including, without limitation, the Stations. No Obligor is liable to
any Person for copyright infringement under the Federal Copyright Act or any
state copyright Laws. No Obligor owns any patents or trademarks that have been
registered with any Tribunal and no applications for
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registration are pending with respect to any patents or trademarks owned by
any Obligor.
Section 4.24 No Adverse Effect. Since December 31, 1996, no
event or circumstance has occurred or arisen that could reasonably be expected
to have a Material Adverse Effect.
Section 4.25 No Contribution Obligations. Except for
Borrower's contractual contribution obligation with respect to ABS or GSAC
Partners, no Obligor has any contractual contribution obligation with respect
to any partnership, joint venture or other similar arrangement. Except for (i)
the Borrower's interest in ABS, (ii) LMA Agreements, (iii) partnerships, joint
ventures or other similar arrangements entered into after the date of this
Agreement with the prior consent of the Required Lenders, (iv) the existing
25% equity interest in Music Technologies, LLC, and (v) the existing 50%
equity interest in GSAC Partners, and (vi) additional investments in
unconsolidated entities up to $5 million, no Obligor has any partnership
interest, joint venture interest or similar interest in any partnership, joint
venture or similar arrangement.
Section 4.26 Solvency. Each Obligor is Solvent, both before
and after giving effect to (a) the transactions contemplated by this
Agreement, (b) each borrowing requested by Borrower hereunder and (c) each
Permitted Acquisition.
Section 4.27 Management Fees. No Obligor is obligated to pay
management, consulting, servicing fees or similar fees to any of such
Obligor's Affiliates, except as set forth on Schedule 6.6.
Section 4.28 Disclosure. All information that has been or is
hereafter made available to the Agent or any Lender by or on behalf of any
Obligor in connection with or pursuant to this Agreement, any other Loan
Document or the transactions contemplated hereby or thereby was and will be
complete and correct in all material respects and did not and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not materially
misleading in light of the circumstances under which such statements were or
will be made. All financial projections that have been or are hereafter from
time to time prepared by any Obligor and made available to the Agent or any
Lender pursuant to or in connection with this Agreement, any other Loan
Document or the transactions contemplated hereby have been and will be
prepared in good faith and were and will be based on facts and assumptions
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that are reasonable in light of the then current and foreseeable business
conditions of the Obligors and represented and will represent Borrower's
management's reasonable best estimate of the projected financial performance
of the Obligors based on the information available to the Obligors at the time
so furnished. All pro forma financial statements prepared by Borrower and
furnished to the Agent or any Lender pursuant to or in connection with this
Agreement, the other Loan Documents or the transactions contemplated hereby
were and will be prepared in good faith and fairly presented or present on a
pro forma basis for the period covered thereby Borrower's consolidated
financial condition, based on the information available to the Obligors at the
time so furnished.
Section 4.29 License Subsidiaries. Except as set forth in
Schedule 4.29, all FCC licenses and other authorizations relating to the
Stations and all FCC licenses and other authorizations relating to any other
stations acquired in connection with a Permitted Acquisition or asset exchange
are held by their respective License Subsidiaries. In the case of those
Stations set forth on Schedule 4.29 and those stations acquired in connection
with a Permitted Acquisition or asset exchange, Borrower shall cause by the
later of (i) August 31, 1997 or (ii) 60 days after such acquisition or
exchange, as the case may be, all FCC licenses and other authorizations
relating to such stations to be held by their respective License Subsidiaries.
No License Subsidiary (a) owns or holds any assets (including the ownership of
stock or any other interest in any Person) other than Operating Agreements and
FCC licenses and other authorizations relating to the Stations and Operating
Agreements and FCC licenses and other authorizations relating to any other
stations acquired in connection with Permitted Acquisitions, (b) is engaged in
any business other than the holding, acquisition and maintenance of FCC
licenses and other authorizations, (c) has any investments in any other Person
or (d) owes any Debt to any Person other than Intercompany Debt.
Section 4.30 Existing Debt. No Obligor owes any Debt to any
Person other than Intercompany Debt, Debt listed on Schedule 1.1(D) and Debt
permitted by Section 6.1.
Section 4.31 Existing Subordinated Note Indenture. The
Obligations of Borrower under the Loan Documents constitute "Senior Debt" of
the "Company", this Agreement is a "Credit Agreement" and the Agent and the
Lenders are the "Lender" within the respective meanings ascribed to the quoted
terms by the Existing Subordinated Note Indenture, and the Agent and the
Lenders will be entitled to
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all the benefits afforded to the "Lender" under the "Credit Agreement" by the
Existing Subordinated Note Indenture, including, without limitation, the
second sentence of Section 10.02(b) thereof.
Section 4.32 1996 Indenture. The Obligations of Borrower
under the Loan Documents constitute "Senior Debt" of the "Company", this
Agreement is the "New Credit Agreement" and the Agent and the Lenders are the
"holders of Senior Debt" within the respective meanings ascribed to the quoted
terms by the 1996 Indenture and the Agent and the Lenders will be entitled to
all the benefits afforded to the "holders of Senior Debt" by the 1996
Indenture.
Section 4.33 Investments. Except as set forth on Schedule
4.33, as of the date of this Agreement, no Obligor has outstanding any loans,
advances or other extensions of credit (other than trade credit on customary
terms) to any Person or any other investments in any Person other than the
Subsidiaries of the Borrower listed on Schedule 4.4(D).
ARTICLE V
AFFIRMATIVE COVENANTS
As long as the Lenders are committed to make Loans under
this Agreement and thereafter until the Obligations are paid and performed in
full, the Obligors jointly and severally covenant and agree with the Agent and
the Lenders as follows:
Section 5.1 Use of Proceeds. The Obligors shall use the
proceeds of Loans only as represented in Section 4.14. Borrower shall use the
Letters of Credit only as represented in Section 4.14 and in any Letter of
Credit Request.
Section 5.2 Books and Records. Each Obligor shall maintain a
system of accounting established and administered in accordance with sound
business practices to permit preparation of consolidated and consolidating
financial statements and proper books of records and account and each of the
Financial Statements described in Section 5.3 shall be prepared from such
system and records.
Section 5.3 Items to be Furnished. Borrower shall cause the
following to be furnished to the Agent and each of the Lenders:
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(a) Annual Financial Statements. As soon as available, but
in any event no later than 90 days after the end of each fiscal year of
Borrower (i) audited consolidated Financial Statements of Borrower and its
Subsidiaries, including comparative figures from the prior fiscal year,
certified by Ernst & Young LLP or other independent certified public
accountants of recognized national standing acceptable to the Agent, which
report shall be certified without qualification or modification and shall
state that such Financial Statements fairly present in all material respects
the consolidated financial position of Borrower and results of operations and
cash flow for the periods indicated in conformity with GAAP applied on a basis
consistent with prior years and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and (ii) a Compliance
Certificate with respect to such Financial Statements.
(b) Quarterly Financial Statements. As soon as available but
in any event no later than 45 days after the end of each fiscal quarter of
each fiscal year (i) unaudited consolidated Financial Statements of Borrower
and its Subsidiaries as of the end of such fiscal quarter, and for the period
from the beginning of the then current fiscal year to the end of such fiscal
quarter, all prepared by Borrower and certified by its Chief Financial Officer
as fairly presenting in all material respects the consolidated financial
position of Borrower and its Subsidiaries and results of operations and cash
flow for the periods indicated (subject to normal year-end adjustments), which
Financial Statements shall include comparative figures from comparable periods
in the prior year and a comparison of actual results to those set forth in the
Budget for such period and (ii) a Compliance Certificate.
(c) Monthly Financial Statements. As soon as available but
in any event no later than 30 days after the end of each calendar month,
unaudited revenue and expense statements for each radio market and for each of
the Borrower's other lines of business as of the end of such calendar month
and for the period from the beginning of the then current fiscal year to the
end of such calendar month, including comparative figures from comparable
periods in the prior year and a comparison of actual results to those set
forth in the Budget for such period, all prepared by Borrower and otherwise in
form and detail satisfactory to the Agent.
(d) Budget. No later than thirty days prior to the end
of each fiscal year, the budget: (i) on a market-by-market basis
for the Borrower's radio business, inclusive of each radio market
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to be entered pursuant to a pending Permitted Acquisition or permitted
exchange under Section 6.12(b), and (ii) for each of the Borrower's other
lines of business, prepared on a monthly basis (the "Budget"), for the next
succeeding fiscal year, setting forth in satisfactory detail the projected
revenues and expenses, Capital Expenditures and Operating Cash Flow and the
underlying assumptions therefor.
(e) Accountant's Statement. Together with each delivery of
the Financial Statements referred to in Section 5.3(a), a written statement of
Ernst & Young LLP or another firm of independent certified public accountants
of recognized national standing acceptable to the Agent giving the report
stating (i) that their audit examination has included a review of the terms
hereof as it relates to accounting matters, including a review of Borrower's
calculations relating to its compliance with Sections 6.12 and 6.17 through
6.21, and (ii) whether, in connection with their audit examination, any
condition or event which constitutes an Event of Default or Default has come
to their attention, and if such condition or event has come to their
attention, specifying the nature and period of existence thereof. The
statement referred to above shall be accompanied by a copy of the management
letter or any similar report delivered to Borrower or to any officer or
employee thereof by such accountants in connection with such Financial
Statements (or, if such management letter or similar report is not delivered
to Borrower or any such officer or employee simultaneously with the issuance
of such Financial Statements, then Borrower shall cause such letter or report
to be delivered to the Agent and the Lenders promptly after the receipt
thereof by Borrower or such officer or employee). On prior notice to Borrower,
Borrower shall authorize the Agent and each Lender to communicate directly
with such accountants.
(f) Litigation; Defaults; ERISA; Material Adverse Effect;
Collateral Value. Promptly after any officer of any Obligor knows or has
reason to know, and in any event within five days after the discovery thereof,
notice of (i) the existence and status of any Litigation with respect to such
Obligor which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect or, in any event, could reasonably be expected to
require the payment of an amount in excess of $250,000, (ii) any change in any
material fact or circumstance represented or warranted in this Agreement or
any other Loan Document, (iii) a Default or an Event of Default, specifying
the nature thereof and what action any Obligor has taken, is taking or
proposes to take with respect thereto, (iv) the occurrence of a reportable
event (as defined in ERISA) with respect to any Plan of any Obligor subject
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to ERISA, or the complete or partial withdrawal from participation in a
Multiemployer Plan by any Obligor (or the intention of any Obligor to do so),
or the initiation (or intent to initiate) by the PBGC or any Obligor of
proceedings under ERISA to terminate any Plan, Multiple Employer Plan or
Multiemployer Plan, or the occurrence of any event or condition which might
constitute grounds for termination of any Plan, Multiple Employer Plan or
Multiemployer Plan under ERISA, (v) the occurrence of any event or
circumstance which has caused or could reasonably be expected to cause a
material loss or decline in the value of any Collateral and the actual or
estimated amount of any such loss or decline or (vi) any other development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
(g) Regulatory Filings. Promptly after the filing or mailing
thereof, and in any event within five days thereafter, a copy of each material
application, statement, report, registration statement, notice or other filing
which is (i) filed with the FCC by or on behalf of any Obligor or any
Affiliate of any Obligor, or of which any Obligor or any Affiliate of any
Obligor has knowledge, with respect to or affecting a Station owned directly
or indirectly by any Obligor or any other station acquired by an Obligor
pursuant to a Permitted Acquisition, (ii) made with the Securities and
Exchange Commission or (iii) distributed to the public shareholders or
debtholders of Borrower generally, and, promptly on the request of any Lender,
a copy of any other statement, report, notice or other filing filed or made
with (x) the FCC by or on behalf of any Obligor or any Affiliate of any
Obligor, or of which any Obligor or any Affiliate of any Obligor has
knowledge, (y) the Securities and Exchange Commission or (z) any other
Tribunal.
(h) Interruption of Broadcasting. Promptly after such
occurrence, and in any event within five days thereafter, notice of any
situation in which on-air broadcasting operations of any Station or any other
station acquired by any Obligor pursuant to a Permitted Acquisition are
interrupted for more than 24 consecutive hours.
(i) Necessary Authorizations. Promptly after any officer of
any Obligor becomes aware thereof, and in any event within five days
thereafter, information and a copy of any notice received by any Obligor from
the FCC or other Tribunal or any Person that concerns (i) any event or
circumstance that could reasonably be expected to materially and adversely
affect any Necessary Authorization and (ii) any notice of abandonment,
expiration, revocation, material impairment, nonrenewal or suspension of any
Necessary Authorization, together with a written
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explanation of any such event or circumstance or the circumstances surrounding
such abandonment, expiration, revocation, material impairment, nonrenewal or
suspension.
(j) LMA Agreements; Material Leases. Promptly after any
officer of any Obligor becomes aware thereof, and in any event within five
days thereafter, notice of any default or breach of any term or provision by
any Person in connection with any LMA Agreement, any Material Lease or any
other Contractual Obligation of such Obligor, together with a written
explanation of the circumstances surrounding such default or breach and what
action any Obligor plans to take with respect thereto.
(k) Information Regarding an acquisition, asset sale or
asset exchange. Prior to the closing of any acquisition, asset sale or asset
exchange not otherwise prohibited by the terms of this Agreement, where the
value equals or exceeds $50 million, provide the Lenders with: (i) such
details of such proposed transaction as the Agent, for itself or on behalf of
any other Lender, shall reasonably request; (ii) a Compliance Certificate
stating that the Borrower is in compliance with all covenants on a pro forma
basis after inclusion of the proposed transaction; and (iii) a certificate
stating that immediately before and after giving effect to the proposed
transaction all representations and warranties shall be true and correct and
no default or Event of Default shall exist.
(l) Environmental Notices. Promptly after receipt by any
Obligor thereof, and in any event within five days thereafter, notice of (i)
any notice or claim by any Tribunal or any other Person to the effect that any
Obligor is or may be liable to any Person, or is subject to an investigation
by a Tribunal, relating to a "release" or "threatened release", as such terms
are defined in CERCLA, of any Hazardous Substance into the environment, (ii)
any notice that any property of any Obligor is subject to an environmental
Lien, (iii) any commencement or written threat of any proceeding by any
Tribunal alleging a violation by any Obligor of any Environmental Law or a
condition that may create liability under an Environmental Law or (iv) any
changes to an existing Environmental Law that could reasonably be expected to
have a Material Adverse Effect.
(m) Insurance. Within ninety (90) days after the end of each
fiscal year of Borrower, Borrower shall deliver to the Agent (i) a report in
form and substance satisfactory to the Agent and the Lenders outlining all
material insurance coverage (including any self-insurance provided by
Borrower) maintained as of the date
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of such report by any Obligor and the duration of such coverage and (ii) to
the extent such insurance coverage is not provided by Borrower, an insurance
broker's statement that all premiums then due and payable with respect to such
coverage have been paid.
(n) Mortgagee Policies of Title Insurance. As requested at
any time by the Agent, mortgagee policies of title insurance in the amounts
set forth on Schedule 5.3(n), insuring that the Mortgages create in favor of
the Agent for the ratable benefit of the Lenders a first priority Lien on the
real property covered by such Mortgages and showing a state of title and
exceptions thereto, if any, acceptable to the Agent and containing such
endorsements as the Agent may require.
(o) Surveys. To the extent required by the Agent and
reasonably available to Borrower, an as-built survey of the site of each tract
of real property covered by each Mortgage certified to the Lenders, their
successors and assigns, and the title insurance company issuing mortgagee
policies of title insurance in a manner satisfactory to them, dated a date
satisfactory to the Agent and such title insurance company by an independent
professional licensed land surveyor satisfactory to the Agent and such title
insurance company, which surveys shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality of the
foregoing, there shall be surveyed and shown on such surveys the following:
(i) the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (ii) the lines of
streets abutting the sites and width thereof; (iii) all access and other
easements appurtenant to the sites or necessary or desirable to use the sites;
(iv) all roadways, paths, driveways, easements, encroachments and overhanging
projections and similar encumbrances affecting the site, whether recorded,
apparent from a physical inspection of the sites or otherwise known to the
surveyor; (v) any encroachments on any adjoining property by the building
structures and improvements on the sites; and (vi) if the site is described as
being on a filed map, a legend relating the survey to said map.
(p) Other Information. Promptly after receipt of a request
therefor by the Agent, and in any event within five days thereafter or such
longer period of time as the Agent shall agree, such information respecting
the business, affairs, books, assets, Collateral or liabilities of any
Obligor, the reported ratings for any radio broadcast station owned by any
Obligor and such other
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information, as the Agent or any Lender may reasonably request from
time to time.
Section 5.4 Inspection. Each Obligor shall permit any Lender
or any agent, officer, employee, expert or consultant thereof to (a) visit and
inspect any of such Obligor's properties, prior to a Default, on reasonable
notice and during reasonable business hours and, after a Default, at any time
and (b) discuss any of its affairs, conditions and finances with its
directors, officers, agents, accountants or employees from time to time.
Subject to the foregoing, each Obligor shall on reasonable notice and during
reasonable business hours permit any officer or employee of, or any agent or
consultant designated by any Lender to have access to, examine and inspect the
books, assets and Collateral of such Obligor and to audit and make extracts
from such Obligor's records, files and books of account, all at the expense of
such Obligor after and during the continuance of an Event of Default,
including the cost of experts or consultants hired by such Lender in
connection with such inspection. Each Obligor hereby authorizes all duly
constituted federal, state and municipal authorities to furnish to any Lender
or any agent, officer, employee, expert or consultant thereof, copies of any
reports of examination of such Obligor which have been made by such
authorities.
Section 5.5 Taxes. The Obligors shall pay when due any and
all Taxes, except Taxes for which the criteria for Permitted Liens have been
satisfied.
Section 5.6 Maintenance of Corporate Existence, Assets, and
Business. Each Obligor shall: (a) maintain its corporate existence and
authority to transact business and good standing in its jurisdiction of
incorporation and all other jurisdictions where the failure to maintain such
existence, authority or good standing could reasonably be expected to have a
Material Adverse Effect, (b) keep all of its property and assets that are
useful in and necessary to its business in good working order and condition
and make all necessary repairs thereto and replacements thereof so that the
value and operating efficiency thereof shall at all times be maintained and
preserved and (c) prevent any of its equipment from becoming a fixture to real
property or an accession to personal property not owned by any Obligor.
Section 5.7 Insurance; Condemnation.
(a) Each Obligor shall, at its sole cost and expense, keep
and maintain (i) insurance coverage on all improvements to
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real property and tangible personal property owned or leased by it in amounts
not less than the full replacement cost of such improvements and the net book
value of such tangible personal property and (ii) other insurance against loss
or damage by fire, theft, explosion, liability, business interruption and all
other hazards, risks and contingencies ordinarily insured against by other
owners or users of such properties in similar businesses of comparable size.
Notwithstanding the foregoing, all policies of insurance shall be in a form
and in an amount, with such deductibles and with insurers recognized as
financially sound and reputable by prudent business Persons in the same
businesses as the Obligors, acceptable to the Agent. Such policies of
insurance and the certificates evidencing the same shall contain an
endorsement, in form and substance acceptable to the Agent, showing losses
payable to the Agent for the ratable benefit of the Lenders and listing the
Agent and each Lender as additional insureds, in each case, as their
respective interests may appear. Such endorsement or an independent instrument
furnished to the Agent shall provide that the insurance companies will give
the Agent at least thirty days prior written notice before any such policy or
policies of insurance expire or before a payment is made in the case of loss
or damage. Upon the payment by the insurer to the Agent of the proceeds of any
policy of insurance, as long as no Default or Event of Default exists, the
Obligors shall have the use of such insurance proceeds if such proceeds are
used to repair or replace the property the damage or destruction of which gave
rise to the payment of such insurance proceeds; provided that (i) any
insurance proceeds that are not used or designated for such repair or
replacement within one year after receipt thereof or (ii) if no Obligor has
commenced the process of restoration or replacement of the damaged property
(including the making of appropriate governmental filings and/or requests for
governmental approval) within 45 days after the related casualty or (iii) if
such Obligor has failed to diligently pursue to completion the repair or
replacement of the damaged property, then such proceeds shall be retained by
the Agent and applied as a prepayment on the Loans and reduction of the
Aggregate Commitment in the manner and with the effect provided for in Section
2.5.
(b) All proceeds derived from any condemnation or taking of
any property of any Obligor, or any private sale made in lieu thereof, shall
be paid to the Agent and, as long as no Default or Event of Default exists,
the Obligor shall have use of such proceeds if such proceeds are used to
repair or replace the property so condemned or taken or sold; provided that
(i) any condemnation proceeds that are not used or designated for such repair
or replacement within one year after receipt thereof by the
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Agent or (ii) if no Obligor has commenced the process of such restoration or
replacement (including the making of appropriate governmental filings and/or
requests for governmental approval) within 45 days after the receipt of such
proceeds by the Agent or (iii) if such Obligor has failed to diligently pursue
to completion such repair or replacement, then such proceeds shall be retained
by the Agent and applied as a prepayment of the Loans and reduction of the
Aggregate Commitment in the manner and with the effect provided for in Section
2.5.
Section 5.8 Compliance with Applicable Laws. Each Obligor
shall comply with all applicable Laws and maintain all material licenses
(including FCC licenses), authorizations and permits, except where any such
failure or the aggregate of all such failures could not reasonably be expected
to have a Material Adverse Effect and obtain, maintain in full force and
effect and comply with all Necessary Authorizations for its respective
business.
Section 5.9 Environmental Laws. Each Obligor shall comply in
all material respects with all Environmental Laws applicable to its business
and shall promptly take corrective action to remedy any non-compliance with
any Environmental Law. Each Obligor shall establish and maintain at its
expense a system which, in the reasonable business judgment of Borrower, will
assure and monitor continued compliance with Environmental Laws by any and all
owners or operators of its real property, which system shall include annual
review of such compliance by employees or agents of the Obligors who are
familiar with the requirements of the Environmental Laws.
Section 5.10 Further Assurances. Each Obligor shall make,
execute or endorse, and acknowledge and deliver or file, or cause the same to
be done, all such notices, certifications, documents, instruments and
agreements, and shall take or cause to be taken such other actions as the
Agent may, from time to time, deem reasonably necessary or appropriate in
connection with this Agreement or any of the other Loan Documents and the
obligation of such Obligor to carry out the terms and conditions of this
Agreement and the other Loan Documents to which it is a party, including,
without limitation, each Obligor shall perform such acts and duly authorize,
execute, acknowledge, deliver, file and record such additional assignments,
security agreements, deeds of trust, mortgages, financing statements, and
other agreements, documents, instruments and certificates as the Agent may
deem reasonably necessary or appropriate in order to create, perfect and
maintain the Liens in favor of the Agent for the benefit of the Lenders in
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and to the Collateral and preserve and protect the Rights of the Lenders
hereunder, under the other Loan Documents and in and to the Collateral. Each
Obligor acknowledges that certain transactions contemplated by this Agreement
and the other Loan Documents, and certain actions which may be taken by the
Agent or the Lenders in the exercise of their Rights under this Agreement or
any other Loan Document, may require the consent of the FCC. If the Agent
reasonably determines that the consent of the FCC is required in connection
with the execution, delivery or performance of any of the aforesaid documents
or any documents delivered to the Agent or the Lenders in connection therewith
or as a result of any action which may be taken or be proposed to be taken
pursuant thereto, then each Obligor, at its sole cost and expense, shall use
its best efforts to secure such consent and to cooperate with the Agent and
the Lenders in any such action taken or proposed to be taken by the Agent or
any Lender.
Section 5.11 Contractual Obligations. Each Obligor shall (a)
pay on or before the respective due dates thereof all rents and other amounts
payable under any Material Lease or other Contractual Obligation material to
the business and operations of any Obligor and (b) timely and fully observe
and perform all of the terms, covenants, agreements and conditions of each
Material Lease and such other Contractual Obligations required to be observed
and performed by any Obligor except where any such failure or the aggregate of
all such failures could not reasonably be expected to result in the loss of a
Necessary Authorization or otherwise could not be reasonably expected to have
a Material Adverse Effect; provided, however, that nothing in this Section
5.11 is intended or shall be construed to affect in any way the Rights of the
Agent and the Lenders to enforce the provisions of Article 10 of the Existing
Subordinated Note Indenture against the parties thereto and the holders of the
Existing Subordinated Notes and Articles 10 and 11 of the 1996 Indenture
against the parties thereto and the holders of the New Notes.
Section 5.12 New Subsidiaries/Collateral.
(a) At the time of the formation of, or at the time of an
acquisition of or an acquisition through an exchange of, any Subsidiary not
identified on Schedule 4.4(D), Borrower (subject to Section 6.3) shall notify
the Agent in writing thereof and shall cause such Subsidiary to promptly
thereafter execute and deliver to the Agent, for the benefit of the Lenders,
to secure, guarantee and otherwise ensure the payment and performance of the
Obligations, an assumption agreement, in the form of Exhibit T, and shall
execute and deliver any financing statements and such other agreements,
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mortgages, documents, instruments and certificates as the Agent may from time
to time, in its discretion, request, all in form and substance satisfactory to
the Agent.
(b) To secure full and complete payment and performance of
the Obligations, on or prior to the Closing Date and at such other times as
the Agent shall request, each Obligor shall grant and convey to, and create in
favor of, the Agent for the ratable benefit of the Lenders, a continuing first
priority perfected Lien in, to and on the following items and types of
property, including all proceeds thereof, all as more particularly described
in the Loan Documents:
(1) all of such Obligor's present and future
assets, including, without limitation, its equipment,
inventory, goods, accounts, accounts receivable,
instruments, documents, chattel paper, securities, general
intangibles, intellectual property, fixtures and real
estate, other than FCC licenses or authorizations to the
extent prohibited by Law; and
(2) all of the capital stock of each Subsidiary of
such Obligor, now owned or hereafter acquired by such
Obligor, and all cash and noncash distributions or other
proceeds thereof or with respect thereto.
The foregoing items and types of property generally described above subject to
such Liens securing the Obligations are collectively referred to herein as the
"Collateral".
Section 5.13 Further Documentation. In the event that
stations WBAB-FM, WHFM-FM, WBLI-FM and WGBB-AM in Long Island, New York shall
not be exchanged as permitted by and in accordance with Section 6.12(b)(i) by
December 31, 1997, Borrower shall cause to be promptly delivered to the Agent,
the documents described in Section 3.1(c), and such other documentation as the
Agent may from time to time, in its discretion request, all in form and
substance satisfactory to the Agent.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments are terminated and the Obligations are
paid and performed in full, the Obligors jointly and severally covenant and
agree with the Agent and the Lenders as follows:
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Section 6.1 Debt. No Obligor will, directly or indirectly,
create, incur or assume or otherwise become liable with respect to or suffer
to exist any Debt other than Permitted Debt.
Section 6.2 Liens. No Obligor will, directly or indirectly
(a) create or suffer to exist or permit to be created any Lien on any of its
assets other than Permitted Liens or (b) enter into or permit to exist any
arrangement or agreement that, directly or indirectly, prohibits any Obligor
from creating or incurring any Lien on any of its assets other than the Loan
Documents, the Existing Subordinated Note Indenture and the 1996 Indenture.
Section 6.3 Investments. No Obligor will, directly or
indirectly (a) loan, advance or otherwise extend credit (other than trade
credit on customary terms) to or contribute capital to, any Person, including,
without limitation, purchase any Debt or accounts receivable from such Person
or (b) purchase or commit to purchase any stock, bonds, notes, debentures or
other securities of, evidences of Contractual Obligations of, or partnership
or joint venture or any other interests in, or all or substantially all of the
assets or any assets constituting a business unit of, or make any other
investment in, any Person, other than (v) Permitted Investments, (w) loans,
advances or other extensions of credit constituting Intercompany Debt, (x)
transactions permitted by Section 6.5, subject to the limitation imposed by
the Acquisition Deposit Cap; (y) securities received as partial consideration
in a sale or exchange transaction permitted by Section 6.12; (z) repurchases
or redemptions of capital stock or other securities provided for under Section
6.10; (aa) redemptions of the Borrower's Existing Subordinated Notes; and (ab)
Permitted Acquisitions as long as no Default or Event of Default exists at the
time of any such acquisition or would exist after giving effect thereto.
Section 6.4 Deposits. No Obligor shall make cash deposits or
option fee payments with, or have issued a Letter of Credit for the benefit
of, any Person other than in connection with a proposed Permitted Acquisition
provided however, that if a borrowing or Letter of Credit is requested for the
purpose of funding a cash deposit, or providing security in lieu thereof, or
for an option fee payment, in connection with a proposed Permitted
Acquisition, Borrower shall certify to the Agent and the Lenders in the
Funding Certificate that, after making such borrowing or after the issuance of
such Letter of Credit, the aggregate amount of the face amount of all issued
and undrawn Letters of Credit (other than any Letter of Credit that has
expired or has been cancelled) and all outstanding cash deposits or option fee
payments, in each case,
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issued for the account of Borrower or made by the Obligors, as the case may
be, in connection with proposed Permitted Acquisitions which have not been
consummated does not exceed $30,000,000 (the "Acquisition Deposit Cap").
Section 6.5 Limitation on Fundamental Changes. No Obligor
will, directly or indirectly, enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease, assign, transfer or
otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except (a) any Subsidiary of Borrower may be merged or consolidated
with or into Borrower (provided that Borrower shall be the continuing or
surviving corporation) or another Wholly-Owned Subsidiary of Borrower, (b) any
Subsidiary may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to Borrower or another
Wholly- Owned Subsidiary of Borrower, (c) any Subsidiary may reorganize or
convert into a different form of business entity provided that such new entity
remains a Subsidiary hereunder, (d) any Subsidiary which has no material
assets or liabilities as of the date of this Agreement and as of the date of
liquidation or dissolution may liquidate or dissolve itself, and (e) as
provided for in Section 6.12. Notwithstanding the foregoing, no License
Subsidiary shall own or hold any assets other than Operating Agreements and
FCC licenses and other authorizations relating to the Stations and Operating
Agreements and FCC licenses and other authorizations relating to any other
stations acquired pursuant to Permitted Acquisitions or engage in any business
other than the ownership (or holding), acquisition and maintenance of
Operating Agreements and FCC licenses and other authorizations.
Section 6.6 Transactions with Affiliates. No Obligor will,
directly or indirectly, enter into or suffer to exist any transaction
(including, without limitation, the lease, purchase, sale or exchange of
property or the rendering of service) with any of its Affiliates, except (i)
executive compensation arrangements in the form of salary, bonuses or stock
options approved by Borrower's Board of Directors in accordance with the
by-laws of Borrower and (ii) as set forth on Schedule 6.6.
Section 6.7 Employee Benefit Plans. Borrower shall not and
shall not permit any ERISA Affiliate to:
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(a) Do any of the following, which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect:
(1) Engage in any transaction or other action or
failure to act which it knows or has reason to know could
result in a civil penalty being assessed pursuant to section
502(i) of ERISA, a Tax being imposed under Subtitle D,
Chapter 43 of the Code, or an addition to Tax or penalty
being imposed under Subtitle F, Chapter 68 of the Code;
(2) Fail to make any payments when due to any
Multiemployer Plan that Borrower or an ERISA Affiliate is
required to make under any agreement relating to such
Multiemployer Plan or any Law pertaining thereto;
(3) Incur withdrawal liability under ERISA to a
Multiemployer Plan;
(4) Voluntarily terminate or, in the case of a
"substantial employer" as defined in section 4001(a)(2) of
ERISA, withdraw from any Plan or Multiple Employer Plan if
such termination or withdrawal could reasonably result in
the imposition of a Lien on Borrower or an ERISA Affiliate
under section 4068 of ERISA;
(5) Fail to make any required contribution when due
to any Plan subject to section 412(n) of the Code that, with
the passage of time, could result in a Lien upon the
properties or assets of Borrower or an ERISA Affiliate;
(6) Adopt any amendment to a Plan the effect of
which is to materially increase the "current liability"
under the Plan as defined in section 302(d)(7) of ERISA;
(7) Incur any liability to the PBGC or to a trustee
appointed under section 4042(b) of ERISA (other than
required insurance premiums); or
(8) Act or fail to act, and, as a result thereof,
an event similar to any of those referred to in clauses (1)
through (7) could occur under the applicable Law of a
foreign country;
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(b) Permit the present value of all benefits (irrespective
of whether vested) under all Plans that have assets less than benefits
(irrespective of whether vested) to exceed the "current value", as defined in
section 3(26) of ERISA, of the assets of such Plans by an aggregate amount
which could reasonably be expected to have a Material Adverse Effect;
(c) Permit an adoption, implementation or amendment of any
unfunded deferred compensation agreement or other arrangement of a similar
nature, irrespective of whether subject to the funding requirements of ERISA,
which could reasonably be expected to have a Material Adverse Effect;
(d) Permit any failure to comply with the requirements of
sections 162(k) or 4980B of the Code or Part 6 of Title I of ERISA (and their
successors) which could reasonably be expected to have a Material Adverse
Effect;
(e) Permit the liability under any Welfare Plan to any
former employee of Borrower or of any ERISA Affiliate to increase beyond that
existing on the date of this Agreement under circumstances which could
reasonably be expected to have a Material Adverse Effect; or
(f) (1) Engage in any conduct which constitutes a
"prohibited transaction" (as defined in section 406 of ERISA or
section 4975 of the Code) which could reasonably be expected to
result in a material liability to Borrower or any ERISA Affiliate;
(2) Permit to exist any material "accumulated funding
deficiency" (as defined in section 302 of ERISA or section 412 of the
Code), whether or not waived, with respect to any Plan or Multiple
Employer Plan, if such accumulated funding deficiency would give rise
to a material liability of Borrower or any ERISA Affiliate;
(3) Apply for or be granted a funding waiver under
section 302 of ERISA or section 412 of the Code, which waiver or
request for waiver is for a material amount;
(4) Occur a reportable event as defined in section
4043 of ERISA with respect to any Plan or Multiple Employer Plan,
which reportable event is likely to result in the termination of such
Plan or Multiple Employer Plan for purposes of Title IV of ERISA and
to give rise to a material liability of Borrower or any ERISA
Affiliate;
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(5) Permit to be filed a notice of intent to
terminate a Plan or Multiple Employer Plan under section 4041(c) with
the PBGC if such termination would give rise to material liability of
Borrower or any ERISA Affiliate;
(6) Permit any Multiemployer Plan to reorganize or
become insolvent in connection with which the circumstances are such
that there could reasonably be a material liability incurred by or
imposed upon Borrower or any ERISA Affiliate;
(7) Permit a complete or partial withdrawal from a
Multiemployer Plan under circumstances that could reasonably subject
Borrower or any ERISA Affiliate to material liability;
(8) Permit any Lien arising under section 4068 of
ERISA or section 412(n) of the Code to attach to the assets or
property of Borrower or any ERISA Affiliate which could reasonably be
expected to result in a Material Adverse Effect;
(9) Permit, through action or failure to act, any
Plan to fail to meet the requirements of section 401(a) or 403(a) of
the Code and such failure could reasonably be expected to give rise
to a material liability of Borrower or any ERISA Affiliate; or
(10) Permit any event or condition described in (1)
through (9) above (determined without regard to whether the event or
condition taken alone would or could result in a material liability)
to occur or exist with respect to a Plan, Multiple Employer Plan or
Multiemployer Plan which individually or in combination with one or
more of any events described in (1) through (9) above (determined
without regard to whether the event or condition taken alone would or
could result in a material liability), if any, could subject Borrower
or any ERISA Affiliate to any material excise Tax, penalty, addition
to tax or other liability.
Section 6.8 Sale and Leaseback Transactions. No Obligor
will, directly or indirectly, enter into any Sale and Leaseback Transaction.
Section 6.9 Management Agreements. No Obligor will, directly
or indirectly, enter into any transaction whereby such Obligor is obligated to
pay any management, consulting or similar fee to any Person, except as set
forth on Schedule 6.6.
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Section 6.10 Restricted Payments. No Obligor shall make a
Restricted Payment, except (a) any Obligor may make a Restricted Payment to
Borrower and (b) so long as no Default or Event of Default would exist before
or after giving effect thereto, Restricted Payments shall be permitted with
respect to: (i) cash dividends equal to 6% per annum of the liquidation
preference for the Series C Preferred Stock in accordance with the terms
thereof as in effect on the date hereof, (ii) cash dividends payable on the
Borrower's Series D Preferred Stock in accordance with the terms thereof as in
effect on the date hereof, (iii) cash dividends payable on the Borrower's
Series E Preferred Stock in accordance with the terms thereof as in effect on
the date hereof, (iv) repurchases of shares of Series E Preferred Stock the
aggregate dollar amount of which does not exceed the aggregate dollar amount
of the additional shares of such Series E Preferred Stock issued by the
Borrower in lieu of cash dividends on such Series E Preferred Stock in
accordance with the terms thereof, (v) scheduled redemptions of the Series B
Preferred Stock in accordance with the terms thereof as in effect on the date
hereof, (vi) redemptions of the Borrower's Series C Preferred Stock in
accordance with the terms thereof as in effect on the date hereof, (vii) the
redemption of the SFX Warrants in an amount not to exceed $250,000, (viii) any
redemption of up to a 4% minority interest held in ABS, (ix) the redemption,
at a price not to exceed $33 per share, of up to 250,838 shares of common
stock of the Borrower issued in connection with the acquisition by the
Borrower of various companies that operate the Meadows Music Theater in
Hartford, Connecticut, pursuant to the exercise of the put or call options
under the provision of the purchase agreement entered into by the Borrower and
certain of its Subsidiaries in connection therewith, and (x) up to $25,000,000
in repurchases of the Borrower's stock or warrants, other than any stock or
warrants specified in clauses (iv), (v), (vi), (vii), (viii) and (ix) above
provided that the Total Leverage Ratio is less than or equal to 4.5 to 1.0
before and after giving effect thereto.
Section 6.11 Issuance of Securities. No Obligor will,
directly or indirectly, issue, sell or otherwise dispose of (a) any of its
shares of capital stock or any other investment securities of any class, (b)
any securities convertible into or exchangeable for any such shares or (c) any
warrants, options, rights to subscribe for or purchase any such shares or
other rights with respect to such shares, except that, (i) Borrower may issue
from time to time securities to employees, officers, or directors of Borrower,
or to consultants providing bona fide services to Borrower or a Subsidiary of
Borrower on commercially reasonable terms, in either case pursuant to any
stock option, stock bonus or
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other employee benefit plan approved by the board of directors of Borrower,
unless, at the time when such plan is approved, or at the time when rights
under any such plan are exercised, in either case on a fully diluted basis, a
Default or Event of Default would exist after giving effect thereto and by
reason thereof or after giving effect to and by reason of the exercise by such
employees, officers or directors of their respective rights thereunder
(including, an Event of Default of the nature described in Section 7.11) and
(ii) Borrower may issue common equity provided no Default or Event of Default
would exist after giving effect thereto and by reason thereof (including an
Event of Default of the nature described in Section 7.11) and (iii) Borrower
may pay dividends on its Series E Preferred Stock in the form of shares of the
Series E Preferred Stock in accordance with the terms thereof.
Section 6.12 Sale of Assets, Exchange of Assets and
Permitted Acquisitions.
(a) Sale of Assets. No Obligor shall, directly or
indirectly, sell, lease, transfer or otherwise dispose of any of its assets
except as permitted by Section 6.5, and so long as no Default or Event of
Default would exist before or after giving effect thereto, other than:
(i) dispositions of equipment from time to time if
such equipment is obsolete or no longer useful in the ordinary course of
business of any Obligor; provided, however, the aggregate amount of all such
dispositions for all Obligors shall not exceed $500,000 in any fiscal year;
(ii) the Scheduled Asset Sales;
(iii) other radio broadcast stations provided that:
(A) the BCF attributable to all such
other radio broadcast stations
sold and/or exchanged during the
preceding one-year period ending
on the date of the proposed sale
shall not exceed 15% of the BCF of
the Borrower;
(B) the BCF attributable to all such
other radio broadcast stations
sold and/or exchanged since the
date of this Agreement, after
giving effect to the proposed
sale, shall not exceed 25% of the
BCF of the Borrower;
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(C) fair value is received by any of the
Obligors; and
(D) at least 75% of the consideration
to be received by any of the
Obligors is in the form of cash or
cash equivalents.
(b) Exchange of Assets. No Obligor shall, directly or
indirectly, exchange any of its assets except as permitted by Section 6.5, and
so long as no Default or Event of Default would exist before or after giving
effect thereto, other than:
(i) the Scheduled Asset Exchanges; and
(ii) other radio broadcast stations provided that:
(A)(1) the BCF attributable to all such
other radio broadcast stations sold
and/or exchanged during the one-year
period ending on the date of the proposed
exchange shall not exceed 15% of the BCF
of the Borrower;
(2) the BCF attributable to all
such other radio broadcast stations sold
and/or exchanged since the date of this
Agreement, after giving effect to the
proposed exchange, shall not exceed 25%
of the BCF of the Borrower; and
(3) fair value is received by any
of the Obligors; and
(4) at least 75% of the consideration
to be received by any of the Obligors is
in the form of a radio broadcast station
or other assets used in the broadcast of
radio programming and/or cash or cash
equivalents; and
(B) the assets received by any of the
Obligors pursuant to such exchanges
qualify as a Permitted Acquisition.
(c) Permitted Acquisitions. So long as no Default or Event
of Default would exist before and after giving effect thereto, the Permitted
Acquisitions will each be allowed.
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Section 6.13 Redemption of Notes. The Borrower shall not
redeem any portion of the New Notes prior to the scheduled maturity of the New
Notes.
Section 6.14 Hazardous Substances. No Obligor will permit
the manufacture, storage, transmission, presence, release, discharge or
disposal of any Hazardous Substance over, upon or under any of the real
property owned or leased by it or otherwise used by it in its business except
as permitted by Law. No Obligor will cause or suffer any Liens to be recorded
against any of its real property owned or leased by it or otherwise used by it
in its business as a consequence of, or in any way related to, the presence,
remediation or disposal of Hazardous Substances in, on, under or about any of
such real property, including any so-called "superfund" Lien relating to such
matters.
Section 6.15 New Businesses. No Obligor will, directly or
indirectly, engage in any business other than the radio broadcast business and
that which is incidental or related to radio broadcasting, including concert
promotion, provided that at least 80% of the Borrower's OCF plus corporate
overhead shall be attributable to radio broadcasting.
Section 6.16 Fiscal Year and Accounting Methods. Borrower
will not change its fiscal year or method of accounting (other than immaterial
changes in methods).
Section 6.17 Fixed Charge Coverage Ratio. Borrower will not
permit the Fixed Charge Coverage Ratio at any fiscal quarter end to be less
than 1.05 to 1.00.
Section 6.18 Pro Forma Interest Expense Ratio. Borrower will
not permit the Pro Forma Interest Expense Ratio at any fiscal quarter end to
be less than:
PERIOD RATIO
------ -----
On the date of this Agreement
through and including June 30, 1.50 to 1.00
1999:
July 1, 1999 through and
including June 30, 2001: 1.75 to 1.00
July 1, 2001 and thereafter: 2.00 to 1.00
Section 6.19 Total Leverage Ratio. Borrower will not permit
the Total Leverage Ratio at any time to exceed:
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PERIOD RATIO
------ -----
The date of this Agreement
through and including 7.00 to 1.00
March 31, 1998:
April 1, 1998 through and
including September 30, 1998: 6.75 to 1.00
October 1, 1998 through and
including June 30, 1999: 6.50 to 1.00
July 1, 1999 through and
including June 30, 2000: 6.00 to 1.00
July 1, 2000 through and
including June 30, 2001: 5.50 to 1.00
July 1, 2001 through and
including December 31, 2001: 5.00 to 1.00
January 1, 2002 through and 4.50 to 1.00
including June 30, 2002:
July 1, 2002 and thereafter: 4.00 to 1.00
Notwithstanding the foregoing, as a condition precedent to
the funding of a Permitted Acquisition, the Total Leverage Ratio of the
Borrower shall not exceed the lesser of: (a) 6.75 to 1.0 and (b) the
applicable Total Leverage Ratio covenant.
Section 6.20 Senior Leverage Ratio. Borrower will not permit
the Senior Leverage Ratio at any time to exceed:
PERIOD RATIO
------ -----
The date of this Agreement
through and including 3.25 to 1.00
March 31, 1998:
April 1, 1998 through and
including March 31, 2000: 3.00 to 1.00
April 1, 2000 and thereafter: 2.50 to 1.00
Section 6.21 Pro Forma Debt Service Ratio. Borrower will not
permit the Pro Forma Debt Service Ratio at any fiscal quarter end to be less
than 1.10 to 1.00.
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Section 6.22 Material Agreements.
(a) No Obligor will enter into any amendment, modification
or waiver of any term or provision of the 1996 Indenture without the prior
consent of the Required Lenders other than those amendments, modifications or
waivers which are not adverse to the interests of the Lenders.
(b) No Obligor will, directly or indirectly (i) enter into
or suffer to exist a participation in any partnerships, joint ventures or
management agreements, other than (A) LMA Agreements and (B) as permitted by
Section 4.25 hereof, or (ii) except as required by the FCC, agree to any
extension or termination of or amendment, modification or waiver of any
material terms of any LMA Agreement without the prior consent of the Required
Lenders.
(c) No Obligor will amend or modify any Intercompany Note
without the prior consent of the Required Lenders. No Obligor will incur or
permit to exist any Debt owing to any other Obligor that is not evidenced by
any Intercompany Note.
(d) No Obligor will repeal, amend or modify its Charter
Documents without the prior consent of the Required Lenders if the effect of
any thereof could reasonably be expected to materially and adversely affect
the Rights of the Lenders and the Agent in or to any Collateral or under or
pursuant to any Loan Document or affect or impede the performance by any
Obligor of any of its obligations under any Loan Documents to which it is a
party or otherwise could reasonably be expected to have a Material Adverse
Effect. Each Obligor shall promptly notify the Agent of any such action with
respect to its Charter Documents and deliver copies to the Agent of any and
all agreements or documents effecting the same whether or not there is any
expectation of an adverse consequence therefrom.
(e) From and after August 31, 1997 (or, if an Operating
Subsidiary is formed or acquired by the Borrower after the date hereof, from
and after the date which is the later of August 31, 1997 or 60 days after such
formation or acquisition), no Operating Subsidiary shall operate, manage or
direct the day-to-day operations of any Station or any station acquired
pursuant to a Permitted Acquisition or a permitted asset exchange unless it
has entered into an Operating Agreement with a License Subsidiary and such
Operating Agreement is in full force and effect.
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ARTICLE VII
DEFAULT
The term "Event of Default" means the occurrence of any one
or more of the following events:
Section 7.1 Payment of Obligations. The failure of any
Obligor to pay the Reimbursement Obligations or the principal amount of any
Loans as the same become due and payable pursuant to the terms hereof or any
other Loan Document; or the failure of any Obligor to pay any other Obligation
as the same becomes due and payable and such failure continues for a period of
three days.
Section 7.2 Certain Covenants. The failure or refusal of any
Obligor to punctually and properly perform, observe and comply with any
covenant, agreement or condition of Section 5.1, 5.3(f), 5.3(h) through
5.3(l), 5.4, 5.5, 5.6(a), 5.6(c), 5.8, 5.9, 5.12 or Article VI or an Event of
Default occurs under and as such term is defined in any Mortgage.
Section 7.3 Other Covenants. The failure or refusal of any
Obligor to punctually and properly perform, observe and comply with any
covenant, agreement or condition contained herein or in any of the other Loan
Documents (other than covenants to pay the Obligations and the covenants
described in Section 7.2) and such failure or refusal continues for a period
of 30 days.
Section 7.4 Necessary Authorization and the Communi cations
Act. The occurrence of any of the following: (a) any proceeding shall be
brought by any Person challenging the validity or enforceability of any
Necessary Authorization except when such proceeding could not reasonably be
expected to have a Material Adverse Effect; (b) appropriate proceedings for
the renewal of any Necessary Authorization shall not be commenced at least 90
days prior to the expiration thereof or any Necessary Authorization shall not
be renewed 30 days prior to its expiration and in either case such nonrenewal
could reasonably be expected to have a Material Adverse Effect; (c) any
Obligor shall fail to comply with the Communications Act or any rule or
regulation promulgated by the FCC and such failure to comply results or could
reasonably be expected to result in a fine in excess of $100,000; (d) the FCC
or other Tribunal shall materially and adversely modify any Necessary
Authorization or shall suspend, revoke or terminate or shall commence
proceedings to materially and adversely modify, suspend, revoke or terminate
any Necessary Authorization and such proceedings shall not be dismissed or
discharged within 60 days; or
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(e) any Contractual Obligation which is necessary to the operation of the
broadcasting operations of any Obligor shall be revoked or terminated and not
replaced by a substitute reasonably acceptable to the Required Lenders within
30 days after such revocation or termination.
Section 7.5 Interruption of Operations. Any Obligor's
on-the-air broadcasting operations are interrupted at any time for more than
48 hours during any period of ten consecutive days, unless the broadcasting
operations of all or substantially all the radio stations in the relevant
market are also interrupted for a like period of time.
Section 7.6 Voluntary Debtor Relief. Any Obligor shall (a)
execute an assignment for the benefit of creditors, (b) admit in writing its
inability to pay its debts generally as they become due, (c) voluntarily seek
the benefits of any Debtor Relief Law or (d) take any corporate or partnership
action to authorize any of the foregoing.
Section 7.7 Involuntary Proceedings. An order for relief or
other order, judgment or decree shall be entered against any Obligor by any
Tribunal pursuant to any Debtor Relief Law in a case or proceeding in which
such Obligor is the subject of such case or proceeding as a "debtor" under the
United States Bankruptcy Code or similar status under any other Debtor Relief
Law or a case or other proceeding shall be commenced against any Obligor
seeking relief or any other benefit provided for by any Debtor Relief Law and
such case or proceeding shall continue undismissed or unstayed for a period of
60 days after the commencement thereof.
Section 7.8 Final Orders. Any Final Order for the payment of
money in excess of $500,000 shall be rendered against any Obligor or any of
its property or assets and such Final Order shall not be satisfied in
accordance with its terms and (a) shall continue in effect for 60 days or (b)
enforcement proceedings shall have been commenced thereon.
Section 7.9 Default Under Other Debt. Any Obligor shall
default (a) in any payment of principal of or interest on any of its Debt
beyond any period of grace provided with respect thereto or (b) in the
performance of any other agreement, condition or term in any agreement or
instrument under or by which any such Debt is created, evidenced or secured if
the effect of such default is to cause, or to permit the holder(s) of such
Debt or the trustee(s) or other representative(s) under any such agreement or
instrument to cause, such Debt or any installment thereof to become
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due prior to its stated or otherwise scheduled maturity or to require an
Obligor to purchase, repurchase or otherwise acquire or retire, or to make an
offer to purchase, repurchase or otherwise acquire or retire, such Debt or any
installment thereof, whether or not such default in payment or performance
shall be waived by the holder(s) of such Debt or such trustee(s) or other
representative(s); provided, however, that no Event of Default shall occur
under this Section 7.9 if the amount of all Debt of the Obligors as to which a
default of the type referred to in this Section 7.9 has occurred and is
continuing does not exceed $500,000.
Section 7.10 Misrepresentation. Any statement,
representation or warranty herein or in any other Loan Documents or in any
writing delivered to the Agent or any Lender pursuant hereto or any other Loan
Document is false, misleading or erroneous in any material respect when made
or deemed made.
Section 7.11 Change of Control. A Change of Control shall
occur.
Section 7.12 Security Documents. Any Security Document shall
at any time after the execution and delivery thereof cease for any reason to
be in full force and effect or any Security Document shall cease to create, or
the Agent, as secured party or beneficiary thereunder, shall cease to hold for
the benefit of the Lenders, a valid and perfected, first priority Lien in and
to or on any of the Collateral covered thereby, subject only to Permitted
Liens, or any action or proceeding is commenced by any Person challenging the
legal, valid or binding nature of any Security Document or any Obligor shall
seek to repudiate its obligations under any thereof to which it is a party.
ARTICLE VIII
RIGHTS AND REMEDIES
Section 8.1 Remedies On Default. Should an Event of Default
occur and be continuing, the Agent shall, upon the direction of the Required
Lenders, do any one or more of the following: (a) declare the entire unpaid
amount of the Obligations or any part thereof immediately due and payable,
whereupon such Obligations shall be due and payable, without demand,
presentment, protest, notice of default, notice of protest, notice of intent
to accelerate or any other notice or action of any kind, all of which are
hereby expressly waived by each Obligor (provided that, upon
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the occurrence of an Event of Default under Section 7.6 or 7.7, the entire
unpaid amount of the Obligations shall automatically become due and payable
without demand, presentment, protest, notice of default, notice of protest,
notice of intent to accelerate or any other notice or action of any kind, all
of which are hereby expressly waived by each Obligor); (b) except for the
Aggregate Commitments to make Loans pursuant to Section 2.17(h), terminate the
Aggregate Commitments (provided that, except for the Aggregate Commitments to
make Loans pursuant to Section 2.17(h), upon the occurrence of an Event of
Default under Section 7.6 or 7.7, the Aggregate Commitments shall
automatically terminate); (c) reduce any claim to judgment; (d) foreclose any
or all Liens or otherwise realize upon any and all Rights the Agent or the
Lenders may have in and to the Collateral, or any part thereof; and (e) to the
extent not prohibited by the Communications Act, exercise any and all other
legal or equitable Rights afforded by the Loan Documents, the Laws of the
State of New York or any other applicable jurisdiction, including, but not
limited to (i) the Right to bring suit or other proceedings before any
Tribunal either for specific performance of any covenant or condition
contained in any of the Loan Documents or in aid of the exercise of any Right
granted to the Lenders or the Agent in any of the Loan Documents and (ii) all
of the Rights of a secured party under the UCC. Notwithstanding the foregoing,
whether or not the Agent shall have been directed by the Required Lenders, to
the fullest extent permitted by any applicable Law, the Agent may (but shall
not be obligated to) take such action as it deems in its sole discretion
necessary or appropriate to preserve and protect the Collateral and the Rights
of the Agent and the Lenders therein.
Section 8.2 Obligor Liability Absolute. Each Obligor agrees
that its liability with respect to the Obligations or any part thereof shall
not be affected by any renewal or extension in the time of payment of the
Obligations, by any indulgence or by any release or change in any security for
the payment of the Obligations and hereby consents to any and all renewals,
extensions, indulgences, releases or changes, regardless of the number
thereof.
Section 8.3 Performance by Lenders. If any covenant, duty or
agreement of any Obligor is not performed in accordance with the terms of any
Loan Document, after the occurrence and during the continuance of an Event of
Default, the Agent or any Lender may, as provided in the Loan Documents, to
the extent not prohibited by the Communications Act, at its option, perform or
attempt to perform, such covenant, duty or agreement on behalf of such
Obligor. In such event, any amount expended by the Agent or
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any Lender in such performance or attempted performance shall be jointly and
severally payable by the Obligors to the Agent or such Lender on demand, shall
become part of the Obligations and shall bear interest at the Default Rate
from the date of such expenditure until paid. Notwithstanding the foregoing,
it is expressly understood that the Agent and the Lenders do not assume and
shall never have any liability, obligation or responsibility for the
performance of any covenants, duty or agreement of any Obligor.
Section 8.4 Delegation of Duties and Rights. The Agent may
perform any of its duties or exercise any of its Rights under the Loan
Documents by or through its officers, directors, employees, attorneys, agents
or other representatives.
Section 8.5 Lenders Not in Control. None of the covenants or
other provisions contained in this Agreement shall, or shall be deemed to,
give any Lender or the Agent the Right to exercise control over the affairs or
management of any Obligor, the Rights of the Lenders and the Agent being
limited to the Right (subject to the Communications Act) to exercise the
remedies provided in this Article VIII and the other Loan Documents or
otherwise available at Law or in equity.
Section 8.6 Waivers by Lenders. The acceptance by any Lender
at any time and from time to time of partial payment on the Obligations shall
not be deemed to be a waiver of any Default or Event of Default then existing.
No course of dealing nor any failure or delay by the Agent or any Lender with
respect to exercise of any Right under any Loan Document shall impair such
Right or be construed as a waiver thereof nor shall any single or partial
exercise of any such Right preclude other or further exercise thereof or the
exercise of any other Right under the Loan Documents or otherwise.
Section 8.7 Cumulative Rights. All Rights available to the
Lenders or the Agent under the Loan Documents are cumulative of and in
addition to all other Rights granted to the Lenders or the Agent at Law or in
equity, whether or not the Obligations are due and payable and whether or not
any Lender has instituted any suit for collection, foreclosure or other action
in connection with the Loan Documents.
Section 8.8 Application of Proceeds. After the occurrence of
an Event of Default and during the continuance thereof, all payments in
respect of the Obligations and all proceeds of Collateral received by the
Agent may, and shall on the acceleration of the Obligations pursuant to
Section 8.1, be applied
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by the Agent to the Obligations, as follows: (a) first, to pay (i) interest on
and the principal of any portion of any Loan which the Agent has advanced on
behalf of any Lender for which the Agent has not then been reimbursed by any
Obligor or such Lender and (ii) any amount in respect of a drawing under a
Letter of Credit which the Letter of Credit Issuing Bank has paid for which
the Letter of Credit Issuing Bank has not then been reimbursed by any Obligor
or any Lender, together with any accrued and unpaid interest thereon; (b)
second, to pay Obligations in respect of any fees, expense reimbursements or
indemnities then due to the Agent (in its capacity as Agent); (c) third, to
pay Obligations in respect of any fees, expense reimbursements or indemnities
then due to the Lenders; (d) fourth, to pay interest due in respect of the
Loans; (e) fifth, to pay or prepay principal outstanding on the Loans; (f)
sixth, to pay all Obligations in respect of any interest rate contracts or
similar agreements or arrangements providing interest rate protection with any
Lender; and (g) seventh, to pay all other Obligations, or in such other order
and manner as the Required Lenders shall determine, and the Obligors shall
remain jointly and severally liable to the Agent and the Lenders for any
deficiency. With respect to the foregoing, if sufficient funds are not
available to fund the payments to be made in respect of the Obligations
described in the foregoing clauses (a) through (g), the available funds shall
be applied to Obligations referred to in any one clause to the ratable payment
of such Obligations, based on the proportion of the respective interests of
the Lenders sharing in such payment in the aggregate outstanding Obligations
described in such clause.
Section 8.9 Diminution in Value of Collateral. The Lenders
and the Agent shall have no liability or responsibility whatsoever for any
diminution in or loss of value of any Collateral.
Section 8.10 Certain Proceedings. Each Obligor shall
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, permit,
license or authorization of any Tribunal or other Person necessary or
appropriate for the effective exercise of any Rights under the Loan Documents.
Without limiting the generality of the foregoing, each Obligor agrees that
upon the occurrence and continuation of a Default, each Obligor shall provide
the Lenders with such environmental audits as the Agent shall reasonably
request at Borrower's expense. Borrower shall execute and deliver all
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applications, certificates, assignments and other documents the Agent may
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 any Tribunal or any other Person to the exercise by the
Agent of any of such Rights relating to all or any of the Collateral.
Furthermore, because each Obligor agrees that the Agent's remedies at Law for
failure of any Obligor to comply with the provisions of this Section 8.10
would be inadequate and that such failure would not be adequately compensable
in damages, each Obligor agrees that the covenants of this Section 8.10 may be
specifically enforced.
Section 8.11 Right of Set-off. Upon the occurrence and
during the continuance of any Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by Law, to set-off
and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by such Lender to or for the credit or the account of any Obligor
against any and all of the Obligations of any Obligor now or hereafter
existing under this Agreement and the other Loan Documents, whether or not
such Lender shall have made any demand under this Agreement or the other Loan
Documents and even if such Obligations are unmatured. Each Lender shall
promptly notify such Obligor after any such set-off and application, provided
that the failure to give such notice shall not affect the validity of such
set-off and application. The Rights of each Lender under this Section 8.11 are
in addition to other Rights (including, without limitation, other rights of
set-off) which each Lender may have.
Section 8.12 Sharing of Payments. Any Lender obtaining a
payment (whether voluntary or involuntary, due to the exercise of any right of
set-off or otherwise) on account of any Loans in excess of its Specified
Percentage amount of such Loans shall purchase from each other Lender such
participation in such Loans made by such other Lenders as shall be necessary
to cause such purchasing Lender to share the excess payment pro rata according
to Specified Percentages with each other Lender; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery, but without interest. Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 8.12, to the fullest extent permitted by Law, shall have and may
exercise all Rights with respect to such participation (including the Right of
set-off) as fully as if such Lender were
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the direct creditor of Borrower in the amount of such participation.
ARTICLE IX
THE AGENT
Section 9.1 Appointment. Each Lender hereby irrevocably
designates and appoints The Bank of New York as the Agent of such Lender under
the Loan Documents and each such Lender hereby irrevocably authorizes The Bank
of New York, as the Agent for such Lender, to take such action on its behalf
under the provisions of the Loan Documents and to exercise such powers and to
perform such duties as are expressly delegated to the Agent by the terms of
the Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary contained in
any Loan Document, except for those duties and responsibilities expressly set
forth in the Loan Documents, the Agent shall owe no other duties or
responsibilities to any Lender under any Loan Document, and no Loan Document
shall be construed or interpreted as creating for the benefit of any Lender
any implied covenants or other functions, responsibilities, duties,
obligations or liabilities of the Agent. By entering into this Agreement, each
Lender expressly acknowledges and agrees that no fiduciary relationship exists
between such Lender and the Agent by virtue of any provision of any Loan
Document or otherwise.
Section 9.2 Delegation of Duties. The Agent may execute any
of its duties under the Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to rely upon the advice of counsel
concerning all matters pertaining to such duties.
Section 9.3 Exculpatory Provisions. Neither the Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with the Loan Documents
(except for its own gross negligence or willful misconduct) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Obligor or any officer or other
representative thereof contained in the Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, the Loan Documents or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of any of the Loan Documents or the Collateral or for any failure of any
Obligor or any other Person to perform its obligations thereunder. The Agent
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shall have no obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, the Loan Documents, or to inspect the properties, books or records of any
Obligor. The Agent shall have no responsibility or any liability whatsoever,
as Agent, to any Obligor or any other Person as a consequence of any failure
or delay in performance, or any breach, by any Lender of any of its
obligations under any of the Loan Documents.
Section 9.4 Reliance by Agent. The Agent may rely, and shall
be fully protected in relying, on any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and on the advice and statements of legal
counsel (including, without limitation, counsel to any Obligor), independent
accountants and other experts selected by the Agent. The Agent shall have no
duty to examine or pass upon the validity, effectiveness or genuineness of the
Loan Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Agent shall be entitled to assume
that the same are valid, effective and genuine, have been signed or sent by
the proper Person or Persons and are what they purport to be. The Agent shall
be fully justified in failing or refusing to take any action under the Loan
Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate. The Agent shall under all
circumstances be fully protected in acting, or in refraining from acting,
under the Loan Documents pursuant to a request or direction of the Required
Lenders, and such request or direction and the Agent's compliance therewith
shall be binding on all the Lenders and all future holders of the Notes.
Section 9.5 Notice of Default. The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Agent has received written notice thereof from a Lender or
an Obligor. In the event that the Agent receives such a notice, the Agent
shall promptly give notice thereof to the Lenders. The Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders; provided, however, that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem to be in the best
interests of the Lenders and shall be fully protected in so doing to the
extent the Agent
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acts within the authority vested in it pursuant to this Article IX and such
action shall be binding on all the Lenders and all future holders of the
Notes.
Section 9.6 Non-Reliance on Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereafter, including, without limitation, any review of the affairs of any
Obligor, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender hereby represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, based
on such documents and information as it has deemed appropriate, made its own
evaluation of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Obligors and made
its own decision to enter into this Agreement and the other Loan Documents to
which it is a party. Each Lender also represents to the Agent that it will,
independently and without reliance upon the Agent or any other Lender, based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, evaluations and decisions to take or
not to take action under any Loan Document, and continue to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the Obligors. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent pursuant to any Loan
Document, the Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Obligors
which may come into the possession of the Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
Section 9.7 Indemnification. Each Lender agrees to indemnify
and reimburse the Agent in its capacity as such (to the extent not promptly
reimbursed by Borrower and without limiting the obligation of any other
Obligor to do so), pro rata according to its Specified Percentage, from and
against any and all liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever, including, without limitation, any amounts paid to the
Lenders (through the Agent) by Borrower or any other Obligor pursuant to the
terms of any Loan Document, that are subsequently rescinded or avoided, or
must otherwise be restored or returned,
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which may at any time (including, without limitation, at any time following
the payment of the Obligations) be imposed on, incurred by or asserted against
the Agent in any way relating to or arising out of the Loan Documents or any
other documents contemplated by or referred to therein or the transactions
contemplated thereby or any action taken or omitted to be taken by the Agent
under or in connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent the same result solely from the gross
negligence or willful misconduct of the Agent. The obligations of the Lenders
under this Section 9.7 shall survive the termination of this Agreement and the
payment in full of the Obligations.
Section 9.8 Agent in Its Individual Capacity. The Bank of
New York and its respective Affiliates may make loans to, accept deposits
from, issue letters of credit for the account of any Obligor and generally
engage in any kind of business with any Obligor as though the Bank of New York
were not the Agent hereunder. With respect to The Bank of New York's
Commitments and the Notes issued to it, The Bank of New York shall have the
same rights and powers under the Loan Documents as any other Lender and may
exercise the same as though it were not the Agent, and the terms "Lender" and
"Lenders" shall in each case include The Bank of New York.
Section 9.9 Successor Agent. If at any time the Agent deems
it advisable, in its sole discretion, it may submit to each of the Lenders a
written notice of its resignation as Agent under this Agreement, such
resignation to be effective upon the earlier of (a) the written acceptance of
the duties of the Agent under the Loan Documents by a successor Agent and (b)
on the 30th day after the date of such notice. Upon any such resignation, the
Required Lenders shall have the right to appoint from among the Lenders a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and accepted such appointment in writing within 30 days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which successor
Agent shall be a commercial bank organized under the laws of the United States
of America or any State thereof, having a combined capital and surplus of at
least $100,000,000. Upon the acceptance of any appointment as the 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's rights, powers, privileges and duties
as the Agent
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under the Loan Documents shall be terminated. The Obligors and the Lenders
shall execute such documents as shall be necessary to effect such appointment.
After any retiring Agent's resignation or removal hereunder as the Agent, the
provisions of the Loan Documents shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under the Loan
Documents. If at any time there shall not be a duly appointed and acting
Agent, during such time each Obligor agrees to make each payment due under the
Loan Documents directly to the Lenders entitled thereto.
Section 9.10 Benefits of Article. None of the provisions of
this Article IX shall inure to the benefit of any Person other than the
Lenders; consequently, no Person shall be entitled to rely upon, or to raise
as a defense, in any manner whatsoever, the failure of the Agent or any Lender
to comply with the provisions of this Article IX.
ARTICLE X
MISCELLANEOUS
Section 10.1 Changes in GAAP. All accounting and financial
terms used in any of the Loan Documents and the compliance with each covenant
contained in the Loan Documents that relates to financial matters shall be
determined in accordance with GAAP, except to the extent that a deviation
therefrom is expressly stated in such Loan Documents. Should a change in GAAP
require a change in any method of accounting or should any voluntary change in
the accounting methods be permitted hereunder, the Financial Statements
required to be delivered to the Lenders pursuant to the terms hereof shall be
prepared in compliance with such new method or methods of accounting (it being
agreed that the preparation of such Financial Statements in accordance with
such new method of accounting shall not constitute a Default or Event of
Default), but shall be accompanied by (a) adjusted Financial Statements
prepared based on the methods of accounting used by Borrower in the
preparation of the Current Financials, (b) the Compliance Certificate based on
such adjusted Financial Statements and (c) such other information, in form and
detail satisfactory to the Lenders, that will allow the Lenders to readily
determine the effect of such changes in accounting methods. For the purpose of
determining whether a Default or an Event of Default has occurred, the Lenders
shall look solely to such adjusted Financial Statements.
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Section 10.2 Expenses of Agent and Lenders. Whether or not
the transactions contemplated by this Agreement shall be consummated, Borrower
shall reimburse or pay (a) all reasonable and documented costs, fees and
expenses of or paid or incurred by the Agent or its legal counsel (including
FCC counsel) in connection with, or otherwise due under, this Agreement or any
of the other Loan Documents, including, without limitation, reasonable and
documented costs, fees and expenses relating to due diligence reviews,
syndication efforts, lien searches and filing or recording fees in connection
with the examination, negotiation, preparation, execution, interpretation,
administration or modification of this Agreement or any other Loan Document,
any agreement pertaining to a Permitted Acquisition, permitted asset sale or
permitted asset exchange or any amendment, agreement, document, assignment,
waiver or consent with respect to any of the foregoing, (b) all reasonable and
documented costs (including, without limitation, court costs), fees and
expenses of or paid or incurred by the Agent, any Lender or any counsel to the
Agent or any Lender (which may include allocated in-house legal expenses of
any Lender) in connection with the enforcement of the Obligations, any
work-out or restructuring of the Obligations or the exercise of any Rights
under this or any other Loan Document and (c) all reasonable and documented
costs, fees and expenses of or paid or incurred by the Agent in connection
with appraisals, audits, insurance, experts or consultants, all of which
costs, fees and expenses set forth in clauses (a), (b) and (c) above shall be
part of the Obligations and shall bear interest at the Default Rate from and
after the date such payment becomes overdue until paid in full. Borrower shall
pay any and all stamp and other Taxes which may be payable or determined to be
payable in connection with the execution and delivery of this Agreement, any
Note or any other Loan Document, and Borrower shall indemnify and save each
holder of a Note harmless from and against any and all liabilities with
respect to or resulting from any delay or omission to pay any such Taxes. The
obligations of Borrower under this Section 10.2 shall survive the termination
of this Agreement and the payment in full of the Obligations. Borrower shall
make the reimbursements and payments required by this Section 10.2 within 10
days after the Agent's demand therefor, except that any costs, fees and
expenses of the nature described in clauses (a), (b) and (c) of this Section
10.2 which are reimbursable or payable by Borrower as of the date hereof shall
be so reimbursed or paid simultaneously with the execution and delivery
hereof.
Section 10.3 Communications. Unless specifically otherwise
provided, whenever any Loan Document requires or permits any consent,
acceptance, permission, approval, notice, request or demand from one party to
another, such communication must be in
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writing, must be personally served, telecopied or sent by courier service and
shall be deemed to have been given when delivered in person or by courier
service or upon receipt of a telecopy. Until changed by notice pursuant
hereto, the address and telecopy number for each party for purposes hereof is
as follows:
Any Obligor: SFX Broadcasting, Inc.
150 East 58th Street, 19th Floor
New York, New York 10155
Telecopy No.: (212) 832-5121
Attention: Robert F.X. Sillerman
The Agent: The Bank of New York
One Wall Street, 16th Floor
New York, New York 10286
Telecopy No.: (212) 635-8595/8593
Attention: Joseph P. Matteo
Vice President
Article II
notices, with
a copy to: The Bank of New York
One Wall Street, 18th Floor
New York, New York 10286
Telephone No.: (212) 635-4695
Telecopy No.: (212) 635-8852
Attention: Carol Surles
Agency Function Administration
Except for
Article II
notices, with
a copy to: Sullivan & Cromwell
125 Broad Street
New York, New York 10004
Attention: Erik D. Lindauer
Until changed by notice to Borrower pursuant hereto, all items to be delivered
to any Lender shall be sent to such Lender (other than The Bank of New York
which shall be sent as aforesaid) to the address of such Lender set forth in
Schedule 1.1(A).
Section 10.4 Form and Number of Documents. Each agreement,
document, instrument or other writing to be furnished to the Lenders under any
provision of this Agreement or any other Loan Document must be in form and
substance and in such number of counterparts satisfactory to the Agent.
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Section 10.5 Survival. All covenants, agreements,
undertakings, representations and warranties made in any of the Loan Documents
shall survive all closings under the Loan Documents and shall not be affected
by any investigation made by any Person.
Section 10.6 Confidentiality. The Agent and each Lender
shall hold all nonpublic information obtained pursuant to the requirements of
this Agreement in accordance with such Person's customary procedures for
handling confidential information of such nature and in accordance with safe
and sound lending practices; provided, however, the Agent and each Lender may
in any event make disclosure of such nonpublic information (a) to any
participants in the Loans of any Lender, to any bona fide offerees or
assignees in connection with a contemplated transfer or participation, or to
its accountants, lawyers and other advisers, provided that such participants,
offerees, assignees, accountants, lawyers and advisers also agree to maintain
the confidentiality of such information in accordance herewith, (b) as
required by any Tribunal or (c) pursuant to legal process.
Section 10.7 VENUE; SERVICE OF PROCESS. EACH OBLIGOR, FOR
ITSELF, ITS SUCCESSORS AND ASSIGNS, HEREBY KNOWINGLY AND INTENTIONALLY AND
IRREVOCABLY AND UNCONDITIONALLY a) SUBMITS, FOR ITSELF AND ITS PROPERTY, TO
THE NONEXCLUSIVE JURISDICTION OF THE STATE COURTS OF THE STATE OF NEW YORK AND
THE FEDERAL COURTS SITTING IN THE STATE OF NEW YORK AND AGREES AND CONSENTS
THAT SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY LEGAL PROCEEDING ARISING
OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS, OR THE OBLIGATIONS BY SERVICE
OF PROCESS AS PROVIDED BY NEW YORK LAW, b) WAIVES TO THE EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY LITIGATION ARISING OUT OF OR IN CONNECTION WITH THE LOAN DOCUMENTS, OR
THE OBLIGATIONS BROUGHT IN ANY NEW YORK STATE COURT OR FEDERAL COURT SITTING
IN THE CITY OF NEW YORK, STATE OF NEW YORK, c) WAIVES ANY CLAIMS THAT ANY
LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM, d) CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH LITIGATION BY THE MAILING OF COPIES THEREOF BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, TO BORROWER AT THE ADDRESS
SET FORTH HEREIN AND e) AGREES THAT ANY LEGAL PROCEEDING AGAINST SUCH OBLIGOR
ARISING OUT OF, RELATED TO OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE
OBLIGATIONS MAY BE BROUGHT IN ANY COURT OF COMPETENT JURISDICTION IN THE CITY
OF NEW YORK, COUNTY OF NEW YORK. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
LENDERS TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY OBLIGOR
IN ANY OTHER JURISDICTION OR TO SERVE PROCESS IN ANY MANNER PERMITTED BY
APPLICABLE LAW.
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Section 10.8 WAIVER OF JURY TRIAL. EACH OBLIGOR, THE AGENT
AND EACH LENDER, FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, HEREBY KNOWINGLY
AND INTENTIONALLY AND IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST
EXTENT PERMITTED BY LAW ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR ANY DEALINGS WITH THE LENDERS RELATING TO THE SUBJECT MATTER OF
THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY AND THE RELATIONSHIP THAT IS
BEING ESTABLISHED. THE FOREGOING WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, MODIFICATIONS, RENEWALS, EXTENSIONS, RESTATEMENTS, REARRANGEMENTS,
SUPPLEMENTS OR SUBSTITUTIONS TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS
WHETHER OR NOT EXPRESSLY SET FORTH THEREIN.
Section 10.9 Severability. Whenever possible, each provision
of each Loan Document shall be interpreted in such manner as to be effective
and valid under applicable Law. If, however, any provision in any Loan
Document should be held to be illegal, invalid or unenforceable, such
provision shall be fully severable; the appropriate Loan Document shall be
construed and enforced as if such provision had never comprised a part
thereof; and the remaining provisions thereof shall remain in full force and
effect and shall not be affected by such provision or by its severance
therefrom.
Section 10.10 Conditions to Effectiveness; Assignment; and
Waiver of Rights.
(a) This Agreement shall become effective as of the date
hereof, at which time the 1996 Agreement shall be deemed amended and restated
in its entirety by this Agreement. Prior to the effectiveness of this
Agreement, the 1996 Agreement shall remain in full force and effect.
(b) Upon the effectiveness of this Agreement, The Bank of
New York shall be deemed to have assigned, without representation or warranty,
all of its rights under the 1996 Agreement to the Lenders pro rata in
accordance with their respective Specified Percentages with respect to the
Loans, the Aggregate Commitment and the Letters of Credit.
(c) No amendment or waiver of any provision of this
Agreement or any other Loan Document nor consent to any departure by any
Obligor therefrom, shall be effective unless the same shall be in writing and
signed by the Obligors and the Required Lenders and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given;
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provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by each of the Lenders (1) change the Commitment of any
Lender (except to the extent otherwise contemplated by Section 2.5 or Section
10.14(c)), (2) reduce the amount of any principal, interest or fees or other
amounts payable to the Lenders hereunder, reduce the interest rate applicable
to any Loan or the rate at which the Commitment Fee accrues or waive any
Default under Section 7.1, (3) postpone any date fixed for any payment of
principal, interest, fees or other amounts payable to the Lenders hereunder
(including without limitation, the dates when mandatory prepayments become due
under Section 2.5), (4) release any collateral or guaranties securing any
Obligor's obligations hereunder except as specifically provided for in the
Loan Documents, (5) change the definition of the Required Lenders, the meaning
of Specified Percentage, the number of the Lenders required to take any action
hereunder or the conditions precedent to each Lender's obligation to make
Loans as set forth in Article III or (vi) amend Section 2.9(b) or this Section
10.10. No amendment, waiver or consent shall affect the Rights or duties of
the Agent under any Loan Documents unless it is in writing and signed by the
Agent in addition to the requisite number of the Lenders.
Section 10.11 General Indemnification of Lenders. Each
Obligor shall, jointly and severally (a) indemnify and hold harmless the
Agent, each Lender, the respective Affiliates of the Agent and each Lender,
and the respective officers, directors, employees, agents, attorneys,
consultants and advisors of the Agent, each Lender and each such Affiliate
(each, an "Indemnified Party") from and against any and all losses, claims,
damages, liabilities, obligations, penalties, actions, judgments, suits,
disbursements, costs and expenses of any kind or nature (including, without
limitation, the reasonable fees and disbursements of counsel) which may be
incurred by or awarded against such Indemnified Party or to which such
Indemnified Party may become subject arising out of or in connection with or
in any way relating to or resulting from any actual or threatened claim,
litigation, investigation or proceeding relating to this Agreement (including
the use of the proceeds thereof), the other Loan Documents or any transaction
contemplated by any of the foregoing, whether or not such Indemnified Party is
a party thereto, whether direct or indirect, whether based on any federal,
state or local law or other statutory regulation, securities or commercial law
or regulation or under common law or in equity, or on contract, tort or
otherwise, and whether or not the transactions contemplated hereby are ever
consummated, and (b) reimburse each Indemnified Party, on demand, for all
out-of-pocket costs and expenses (including, without limitation, the
reasonable fees and disbursements of counsel)
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incurred in connection with any of the foregoing, including, without
limitation, costs and expenses incurred in connection with investigating,
defending or participating in any legal proceeding relating to any of the
foregoing, provided, however, that no Obligor shall have any obligation to
indemnify any Person against such Person's gross negligence or willful
misconduct. No Obligor shall make any claim against any Indemnified Party for
any special, indirect or consequential damages in respect of any breach or
wrongful conduct (whether the claim therefor is based in contract, tort or
duty imposed by law) in connection with, arising out of or in any way related
to the transactions contemplated by, and the relationship established by, the
Loan Documents, or any act, omission or event occurring in connection
therewith, and each Obligor hereby waives, releases and agrees not to sue upon
any such claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor. The obligation of each Obligor under
this Section 10.11 shall survive the termination of this Agreement and the
payment in full of the Obligations.
Section 10.12 Environmental Indemnification of Lenders. Each
Obligor shall jointly and severally, indemnify, protect and hold each
Indemnified Party harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
proceedings, costs, expenses (including, without limitation, reasonable
attorneys' fees and legal expenses whether or not suit is brought) and
disbursements of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against such Indemnified Party, with
respect to or as a direct or indirect result of the violation by any Obligor
of any Environmental Law or with respect to or as a direct or indirect result
of the use, generation, manufacture, production, storage, release, threatened
release, discharge, disposal of a Hazardous Substance, or presence of a
Hazardous Substance, on, under, from or about its real property. The
obligation of each Obligor under this Section 10.12 shall survive the
termination of this Agreement and the payment in full of the Obligations.
Section 10.13 Multiple Counterparts. This Agreement has been
executed in a number of identical counterparts, each of which shall be deemed
an original for all purposes and all of which constitute, collectively, one
Agreement; but, in making proof of this Agreement, it shall not be necessary
to produce or account for more than one such counterpart.
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Section 10.14 Parties Bound; Participations; Assignments.
(a) This Agreement is binding upon, and inures to the
benefit of, the Agent, the Lenders, the Obligors and permitted assigns;
provided that, no Obligor may, without prior consent of all the Lenders,
assign any Rights, duties or obligations hereunder and any purported
assignments in violation of the foregoing shall be void.
(b) Subject to compliance with all applicable Law, each
Lender may (i) sell participations in all or a portion of its interest in
Loans and Commitments under this Agreement or (ii) assign all or a portion of
its Loans and Commitments under this Agreement to a Federal Reserve Bank
without the consent of the Agent. Each Obligor agrees that each participant
shall be entitled to the benefits of Sections 2.8, 2.11, 2.13, 2.14 and 2.16.
Any Lender may in connection with a participation or proposed participation
disclose to the participant or proposed participant any information relating
to any Obligor furnished to such Lender by or on behalf of any Obligor.
(c) Subject to compliance with all applicable Law and
compliance with the terms of this subsection (c) and each Eligible Assignee's
compliance with Section 2.11(e)(1), each Lender may assign all or a portion of
its Rights and obligations as a Lender under the Loan Documents to one or more
Eligible Assignees provided, however, that (i) in the case of a partial
assignment, each such assignment shall be in a minimum amount equal to
$5,000,000 and (ii) any assignment shall require the written consent of the
Agent (which will not be unreasonably withheld). On or prior to the effective
date of such assignment, the assigning Lender (the "Assignor") and such
Eligible Assignee shall execute and deliver to the Agent an Assignment and
Acceptance Agreement (an "Assignment Agreement") in the form of Exhibit R,
together with the Notes subject to such Assignment Agreement and a processing
fee in the amount of $3,500 payable by the Assignor. Provided such assignment
has been consented to as required hereinabove, Borrower shall execute and
deliver to the Assignor, in exchange for the Notes issued to the Assignor, new
Notes payable to the order of the Assignor, if applicable, and such Assignee
in the principal face amounts equal to their respective Specified Percentages
of the Aggregate Commitments, dated as of the effective date of the Assignment
Agreement, within five Business Days after the effective date of the
Assignment Agreement. On and after the effective date of each Assignment
Agreement, the Assignee shall be a party hereto, included in the definition of
"Lender" and shall have the Rights
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and obligations of a Lender under the Loan Documents. In the event any Lender
assigns all of its rights and obligations as a Lender under the Loan Documents
to one or more Assignees, on and after the effective date of such assignment,
the Rights and obligations of the Assignor under the Loan Documents shall
terminate except for those provisions that specifically recite that they
survive the termination of this Agreement and the other Loan Documents.
(d) The Agent shall maintain at its address set forth herein
a copy of each Assignment Agreement received by it from each Assignor and a
register (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of Loans owing to,
each Lender from time to time. The entries in the Register shall be binding
and conclusive absent manifest error, and Borrower, the Agent and the Lenders
may treat each Person whose name is recorded in the Register as the owner of
the Loans recorded therein for all purposes of this Agreement and the other
Loan Documents.
(e) Any Lender may in connection with any proposed
assignment disclose to the proposed Assignee any information relating to any
Obligor furnished to such Lender by or on behalf of any Obligor.
(f) Nothing in this Section 10.14 shall prohibit or prevent
any Lender from creating at any time a security interest in all or any portion
of its Rights under this Agreement (including, without limitation, the Loans
owing to it and the Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Federal Reserve Board.
Section 10.15 Entire Agreement. This Agreement, taken
together with all of the other Loan Documents heretofore, now or hereafter
executed, embodies the entire agreement and understanding among the parties
hereto and supersedes the commitment letter dated April 25, 1997 among BNY
Capital Markets Inc., The Bank of New York and Borrower and any and all prior
agreements and understandings between any Obligor and the Agent or any Lender,
written or oral, relating to the subject matter hereof.
Section 10.16 Governing Law. The Loan Documents shall be
governed by and construed in accordance with the laws of the State of New
York, except to the extent otherwise specified in any Loan Document.
Section 10.17 Subordination of Intercompany Obligations.
Each Obligor hereby acknowledges that (a) the principal amount of
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any Debt now or hereafter due from Borrower to any other Obligor (including,
without limitation, Debt owed by Borrower to a Subsidiary of Borrower) shall
not be required to be paid (whether by way of mandatory sinking fund,
mandatory redemption, mandatory prepayment or otherwise) prior to the Maturity
Date, and (b) the payment of principal of or any interest on any such Debt,
and any other obligations of Borrower relating thereto, are hereby
subordinated to the prior payment in full of the principal of and interest
(including, without limitation, post-petition interest, whether or not any
such post-petition interest is an allowable claim in any bankruptcy
proceeding) on the Loans and all other Obligations of the Obligors to the
Lenders under the Loan Documents.
EXECUTED as of the day and year first mentioned.
SFX BROADCASTING, INC., Borrower
By:/s/ Robert F.X. Sillerman
----------------------------------
Name: Robert F.X. Sillerman
Title: Executive Chairman
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Ardee Festivals N.J. Inc.
Ardee Productions, Ltd
Beach Concerts, Inc.
Beck-Ross Communications, Inc.
Broadway Concerts, Inc.
Connecticut Performing Arts, Inc.
Connecticut Concerts, Incorporated
Deer Creek Amphitheatre Concerts, Inc.
Delsener/Slater Enterprises, Inc.
Delsener/Slater Enterprises, Ltd.
Dumb Deal, Inc.
Exit 116 Revisited, Inc.
FPI Concerts, Inc.
General Broadcasting Corp.
General Broadcasting of
Connecticut, Inc.
General Broadcasting of Florida, Inc.
General Communicorp, Inc.
Great American Musical Fest &
Production Co.
In House Tickets, Inc.
Irving Plaza Concerts, Inc.
KJQY-FM Licensee, Inc.
Koplik, Inc.
Liberty Broadcasting Group Incorporated
Liberty Broadcasting, Incorporated
Liberty Broadcasting of Albany
Incorporated
Liberty Broadcasting of Maryland II
Incorporated
Liberty Broadcasting of New York
Incorporated
Multi-Market Radio Acquisition
Corporation
Multi-Market Radio, Inc.
Multi-Market Radio of Augusta, Inc.
Multi-Market Radio of Fayettville, Inc.
Multi-Market Radio of Hartford, Inc.
Multi-Market Radio of Myrtle Beach, Inc.
Multi-Market Radio of Northhampton, Inc.
Murat Center Concerts, Inc.
Musical Heights, Inc.
NOC, Inc.
Parker Broadcasting Company
Polaris Amphitheatre Concerts, Inc.
QN-Corp.
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SFX Broadcasting of Arizona, Inc.
SFX Broadcasting of California, Inc.
SFX Broadcasting of Connecticut, Inc.
SFX Broadcasting of Connecticut
Licensee, Inc.
SFX Broadcasting of Florida, Inc.
SFX Broadcasting of Hartford, Inc.
SFX Broadcasting of Hartford II, Inc.
SFX Broadcasting of Indiana, Inc.
SFX Broadcasting of Kansas, Inc.
SFX Broadcasting of Massachusetts, Inc.
SFX Broadcasting of Massachusetts
Licensee, Inc.
SFX Broadcasting of New York, Inc.
SFX Broadcasting of Pennsylvania, Inc.
SFX Broadcasting of Rhode Island, Inc.
SFX Broadcasting of San Diego, Inc.
SFX Broadcasting of San Diego Licensee,
Inc.
SFX Broadcasting of South Carolina, Inc.
SFX Broadcasting of Texas (KTCK), Inc.
SFX Broadcasting of Texas (KTCK)
Licensee, Inc.
SFX Broadcasting of the Midwest, Inc.
SFX Broadcasting of Virginia, Inc.
SFX Broadcasting of Wisconsin, Inc.
SFX Delaware, Inc.
SFX GP, Inc.
SFX Holdings, Inc.
SFX Operating Company of Mississippi,
Inc.
SFX Operating Company of North
Carolina, Inc.
SFX Operating Company of Tennessee, Inc.
SFX Operating GP, Inc.
SFX Performance Marketing, Inc.
SFX Texas Limited Partnership
Southern Starr Broadcasting Group, Inc.
Southern Starr Communications, Inc.
Southern Starr Limited Partnership
Southern Starr Management, Inc.
Southern Starr of Arkansas, Inc.
Sunshine Designs, Inc.
Suntex Acquisition, Inc.
SFXAZ Limited Partnership
SFXBX Limited Partnership
SFXFL Limited Partnership
SFXIN Limited Partnership
-116-
<PAGE>
SFXKS Limited Partnership
SFXMS Limited Partnership
SFXNC Limited Partnership
SFXPA Limited Partnership
SFXSC Limited Partnership
SFXTN Limited Partnership
SFXTX Limited Partnership
SFXWI Limited Partnership
WBAB, Inc.
W.B.L.I., Inc.
WBLI-FM, Inc.
WDSY, Inc.
WGBB, Inc.
WGNA, Inc.
WGNA-FM, Inc.
WHCN, Inc.
WHCN-FM, Inc.
WHFM, Inc.
WHFS, Inc.
WHJJ, Inc.
WHJY, Inc.
WMXB, Inc.
WPOP, Inc.
WPYX, Inc.
WSNE, Inc.
WSNE-FM, Inc.
WTRY, Inc.
WWYZ, Inc.
WXTR, Inc.
WYSR, Inc.
-117-
<PAGE>
By: /s/ Robert F.X. Sillerman
----------------------------------------------
Name: Robert F.X. Sillerman
Title: Executive Chairman of Borrower
and of each of the Subsidiaries
of the Borrower
-118-
<PAGE>
Specified
Percentage:
7.25000000% THE BANK OF NEW YORK, as the Agent,
the Letter of Credit Issuing Bank
and as a Lender
By: /s/ Joseph P. Matteo
----------------------------------------------
Name: Joseph P. Matteo
Title: Vice President
-118-
A
<PAGE>
Specified
Percentage:
5.62500000% LEHMAN COMMERCIAL PAPER INC.,
as a Co-Agent
By: /s/ Dennis J. Dee
----------------------------------------------
Name:
Title:
-119-
<PAGE>
Specified
Percentage:
5.62500000% BANK OF TOKYO - MITSUBISHI TRUST
COMPANY, as a Co-Agent
By: /s/ Augustine Okwu Jr.
----------------------------------------------
Name: Augustine Okwu Jr.
Title: VP & Co-Head
-120-
<PAGE>
Specified
Percentage:
4.50000000% BANK OF MONTREAL, as a Co-Agent
By: /s/ W.T. Calder
----------------------------------------------
Name: W.T. Calder
Title: Director
-121-
<PAGE>
Specified
Percentage:
4.50000000% BANKERS TRUST COMPANY, as a Co-Agent
By: /s/ Gina S. Thompson
----------------------------------------------
Name: Gina S. Thompson
Title: Vice President
-122-
<PAGE>
Specified
Percentage:
4.50000000% CIBC INC.
By: /s/ D. Steele
----------------------------------------------
Name: MANAGING DIRECTOR, CIBC WOOD GUNDY
Title: SECURITIES CORP., AS AGENT
-123-
<PAGE>
Specified
Percentage:
4.50000000% CORESTATES BANK, N.A., as a Co-Agent
By: /S/ Douglas E. Blackman
----------------------------------------------
Name: Douglas E. Blackman
Title: Vice President
-124-
<PAGE>
Specified
Percentage:
4.50000000% THE FUJI BANK, LIMITED,
NEW YORK BRANCH, as a Co-Agent
By: /s/ Teiji Teramoto
----------------------------------------------
Name: TEIJI TERAMOTO
Title: Vice President & Manager
-125-
<PAGE>
Specified
Percentage:
4.50000000% SOCIETE GENERALE, as a Co-Agent
By: /s/ Elaine Khalil
----------------------------------------------
Name: ELAINE KHALIL
Title: VICE PRESIDENT
-126-
<PAGE>
Specified
Percentage:
4.50000000% SUNTRUST BANK, CENTRAL FLORIDA, N.A.,
as a Co-Agent
By: /s/ Ronald K. Rueve
----------------------------------------------
Name: Ronald K. Rueve
Title: Vice President
-127-
<PAGE>
Specified
Percentage:
3.50000000% TORONTO DOMINION (NEW YORK), INC.
By: /s/ David G. Parker
----------------------------------------------
Name: DAVID G. PARKER
Title: VICE PRESIDENT
-129-
<PAGE>
Specified
Percentage:
3.50000000% VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /s/ Jeffrey W. Maillet
----------------------------------------------
Name: JEFFREY W. MAILLET
Title: Senior Vice President & Director
-129-
A
<PAGE>
Specified
Percentage:
3.50000000% BANQUE NATIONALE de PARIS
By: /s/ Mark Whitson
----------------------------------------------
Name: Mark Whitson
Title: Vice President
By: /s/ Serge Desrayaud
----------------------------------------------
Name: Serge Desrayaud
Title: Vice President
-130-
<PAGE>
Specified
Percentage:
3.50000000% COMPAGNIE FINANCIERE de CIC et de
L'UNION EUROPEENNE
By: /s/ Marcus Edward
----------------------------------------------
Name: Marcus Edward
Title: Vice President
By: /s/ Brian O'Leary
----------------------------------------------
Name: Brian O'Leary
Title: Vice President
-131-
<PAGE>
Specified
Percentage:
3.50000000% CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Mark Agulla
----------------------------------------------
Name:
Title:
-132-
<PAGE>
Specified
Percentage:
3.50000000% GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ Stephen J. McGuinness
----------------------------------------------
Name: STEPHEN J. McGUINNESS
Title: Authorized Signatory
-133-
<PAGE>
Specified
Percentage:
3.50000000% PNC BANK, NATIONAL ASSOCIATION
By: /s/ Cynthia L. Rogers
----------------------------------------------
Name: Cynthia L. Rogers
Title: Banking Officer
-134-
<PAGE>
Specified
Percentage:
3.50000000% COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK NEDERLAND",
NEW YORK BRANCH
By: /s/ Ian Reece
----------------------------------------------
Name: Ian Reece
Title: Senior Credit Officer
By: /s/ Angela R. Reilly
----------------------------------------------
Name: Angela R. Reilly
Title: Vice President
-135-
<PAGE>
Specified
Percentage:
3.50000000% THE SANWA BANK LIMITED, NEW YORK BRANCH
By: /s/ Paul Judicke
----------------------------------------------
Name: Paul Judicke
Title: Vice President
-136-
<PAGE>
Specified
Percentage:
3.50000000% SOUTHERN PACIFIC THRIFT & LOAN
ASSOCIATION
By: /s/ Chris Kelleher
----------------------------------------------
Name: CHRIS KELLEHER
Title: VICE PRESIDENT
-137-
<PAGE>
Specified
Percentage:
2.50000000% THE SUMITOMO BANK, LIMITED
By: /s/ J. H. Broadley
----------------------------------------------
Name: J. H. Broadley
Title: Vice Presdient, NY Office
By: /s/ William N. Paty
----------------------------------------------
Name: WILLIAM N. PATY
Title: VICE PRESIDENT AND MANAGER
-138-
<PAGE>
Specified
Percentage:
2.50000000% THE DAI-ICHI KANGYO BANK, LTD.,
NEW YORK BRANCH
By: /s/ Frank A. Bertelle
----------------------------------------------
Name: Frank A. Bertelle
Title: Assistant Vice President
-139-
<PAGE>
Specified
Percentage:
2.50000000% THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED, NEW YORK BRANCH
By: /s/ Shaichi Tajima
----------------------------------------------
Name: Shaichi Tajima
Title: Deputy General Manager
-140-
<PAGE>
Specified
Percentage:
2.50000000% NATIONAL BANK OF CANADA
By: /s/ Teresa Camasu
----------------------------------------------
Name: Teresa Camasu
Title: Vice President
-141-
<PAGE>
Specified
Percentage:
2.50000000% SUMMIT BANK
By: /s/ Henry G. Kush, Jr.
----------------------------------------------
Name: Henry G. Kush, Jr.
Title: Vice President
-142-
<PAGE>
Specified
Percentage:
2.50000000% NATIONAL CITY BANK
By: /s/ Andrew J. Walshaw
----------------------------------------------
Name: Andrew J. Walshaw
Title: Account Officer
-143-
