SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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):
September 6, 1996
KATZ MEDIA GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-13674 13-3779269
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(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
125 West 55th Street, New York, New York 10019
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 424-6000
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Item 5. Other Events
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On September 6, 1996, the Company, through Katz Media Services,
Inc., a newly-formed, wholly-owned subsidiary, as borrower, established a new
senior secured Revolving Credit Facility (the "New Credit Facility") with a
group of lenders for which The First National Bank of Boston acts as agent. The
New Credit Facility provides for borrowings of up to $35.0 million and matures
on March 31, 1998. $5.0 million is available to cover interest payments over the
term of the facility, and the balance of the facility is available to fund
acquisitions and contract buyouts and for general corporate purposes.
Borrowings under the New Credit Facility bear interest at the
Company's option at either 150 basis points over the Base Rate (as defined) or
250 basis points over the Eurodollar Rate (as defined). In addition, the Company
pays a commitment fee of 0.5% per annum on the average daily balance of the
unused commitments.
The New Credit Facility contains customary affirmative and
negative covenants and events of default.
In connection with the New Credit Facility, the Company amended
the terms of its existing Credit Agreement to advance the final maturity from
September 30, 1999 to June 30, 1999.
Item 7. Financial Statements and Exhibits
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(c) Exhibits
1. U.S. $35,000,000 Credit Agreement dated September 6, 1996
among Katz Media Services, Inc., as borrower, the Lenders party
thereto, and The First National Bank of Boston, as Agent.
2. Modification No. 6 to Credit Agreement dated April 29, 1996
3. Modification No. 7 to Credit Agreement dated September 6, 1996
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
KATZ MEDIA GROUP, INC.
By: /S/ RICHARD E. VENDIG
-------------------------
Richard E. Vendig
Senior Vice President
Chief Financial &
Administrative Officer
Treasurer
Date: September 13, 1996
CREDIT AGREEMENT, dated as of September 6, 1996, among KATZ MEDIA
SERVICES, INC., a Delaware corporation (the "Borrower"), the financial
institutions that are now or hereafter become parties hereto as lenders (the
"Lenders") and THE FIRST NATIONAL BANK OF BOSTON ("FNBB"), as agent for the
Lenders (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make a
$35,000,000 revolving credit facility available to the Borrower for the purpose
of making permitted acquisitions and for other general corporate purposes; and
WHEREAS, the Lenders are willing to make such revolving credit
facility available to the Borrower, all upon the terms and subject to the
conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Accounts" with respect to any Person, has the meaning assigned
to that term in the Security Agreement executed by such Person.
"Acquisition" means any transaction, or any series of related
transactions, in which the Borrower or any of its Subsidiaries (a) acquires all
or at least a majority of the business and assets of any Person, or of any
division of any Person (b) directly or indirectly acquires ownership of a
majority (in number of votes) of the Voting Shares of any Person, by purchase of
Stock, merger or otherwise or (c) with the consent of the Majority Lenders,
acquires a less than majority interest in a joint venture partnership or other
similar arrangement.
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"Affiliate" means, as to any Person, (a) any Subsidiary of such
Person and (b) any other Person which, directly or indirectly, controls, is
controlled by, or is under common control with, such Person and includes, in the
case of a Person other than an individual, each officer or director or general
partner of such Person, and each Person who is the beneficial owner of 10% or
more of such Person's outstanding Stock having ordinary voting power of such
Person. Each of the DLJ Entities and each of their respective Affiliates shall
be deemed to be Affiliates of the Borrower and its Subsidiaries for all purposes
of this Agreement. For the purposes of this definition, "control" means the
possession of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise. Notwithstanding the foregoing, in no event shall any
Lender be deemed to be an Affiliate of any Loan Party for the purposes of any
document.
"Agent" has the meaning specified in the introductory paragraph.
"Agreement" means this Credit Agreement, together with all
Exhibits and Schedules hereto, as the same may be amended, supplemented or
otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender,
its Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Asset Sale" means any sale or other disposition, or series of
sales or other dispositions, including, without limitation, by merger or
consolidation, and whether by operation of law or otherwise, made on or after
the Closing Date by the Borrower or any of its Subsidiaries to any Person of (i)
all or substantially all of the outstanding Stock of any Subsidiary of the
Borrower, (ii) all or substantially all of its assets or the assets of any
division of the Borrower or any of its Subsidiaries, or (iii) any other asset or
assets of the Borrower or any of its Subsidiaries which, when taken together
with all Asset Sales not covered by clauses (i) and (ii), yield Asset Sale
Proceeds having a Fair Market Value equal to or in excess of $500,000.
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"Asset Sale Proceeds" means cash payments in Dollars or freely
convertible into Dollars received by the Borrower or any of its Subsidiaries
(including, without limitation, any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise,
but only as and when received) from any Asset Sale, in each case net of the
amount of (i) reasonable brokers' and advisors' fees and commissions payable
other than to an Affiliate of the Borrower in connection with such Asset Sale,
(ii) all foreign, Federal, state and local taxes payable as a direct consequence
of such Asset Sale, net of any tax benefits derived in respect of such dividend
or distribution, (iii) the reasonable legal fees and expenses attributable to
such Asset Sale to the extent not included in clause (i) above, except to the
extent payable to any Affiliate, and (iv) any amounts required to be paid to any
Person (other than the Borrower or any of its Subsidiaries) owning a beneficial
interest in the property or asset sold. For the purposes of this definition,
Asset Sale Proceeds shall be deemed to include, without limitation, any award of
compensation for any asset or property or group thereof taken by condemnation or
eminent domain and insurance proceeds for the loss of or damage to any asset or
property if such award or proceeds equals or exceeds $100,000 (per
occurrence)and within 180 days after the receipt thereof replacement or repair
of such asset or property has not commenced, except that in the event that at
any time such replacement or repair is abandoned or is otherwise discontinued or
is not diligently pursued, the remaining award or proceeds, as the case may be,
shall constitute Asset Sale Proceeds at such time.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee of such Lender, and accepted by the
Agent, in substantially the form of Exhibit H.
"Available Commitment" means, with respect to any Lender on any
date, an amount equal to the Revolving Credit Commitment of such Lender on such
date minus the principal amount of such Lender's Revolving Credit Loans
outstanding on such date.
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"Bankruptcy Code" means Title 11 of the United States Code (or
any successor legislation thereto), as amended from time to time.
"Base Rate" means, at any time, the rate per annum equal to the
higher of:
(a) the rate of interest announced publicly by FNBB in Boston,
Massachusetts at such time as FNBB's base rate; and
(b) the sum (adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent)
of (i) 1/2 of one percent per annum, plus (ii) the Federal Funds Rate in effect
at such time.
"Base Rate Loan" means any outstanding principal amount of
Revolving Credit Loans of any Lender that bears interest with reference to the
Base Rate.
"Base Rate Margin" means a rate per annum equal to 1.50%.
"Borrower" has the meaning specified in the introductory
paragraph.
"Borrower Pledge Agreement" means the Pledge Agreement, in the
form of Exhibit E hereto, executed by the Borrower in favor of the Agent.
"Borrower Security Agreement" means the Security Agreement, in
the form of Exhibit G hereto, executed by the Borrower in favor of the Agent.
"Borrowing" means a borrowing consisting of Revolving Credit
Loans made on the same day on which interest is calculated on the same basis
and, if such basis is with reference to the Eurodollar Rate, for the same
Interest Period, by the Lenders ratably according to their respective Revolving
Credit Commitments.
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"Business Day" means a day of the year on which banks are not
required or authorized to close in Boston, Massachusetts or New York City, New
York and, if the applicable Business Day relates to a Eurodollar Rate Loan, a
day on which dealings are also carried on in the London interbank market.
"Capital Expenditures" means, for any period, the aggregate
(without duplication) of (i) all expenditures by the Borrower and its
Subsidiaries during such period for property, plant or equipment, including,
without limitation, renewals, improvements, replacements and capitalized
repairs, which would be reflected as additions to property, plant or equipment
on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in
conformity with GAAP, and (ii) the principal amount of all Indebtedness incurred
or assumed in connection with any such additions to property, plant and
equipment. For the purpose of this definition, the purchase price of equipment
which is acquired simultaneously with, or within 30 days following, the trade-in
of existing equipment owned by the Borrower or any of its Subsidiaries or with
insurance proceeds shall be included in Capital Expenditures only to the extent
of the gross amount of such purchase price less the credit granted by the seller
of such equipment being traded in at such time or the amount of such proceeds,
as the case may be.
"Capitalized Lease" means, as to any Person, any lease of
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person under Capitalized Leases,
as determined in conformity with GAAP.
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"Cash Equivalents" means (i) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States government or any agency thereof, (ii) certificates of
deposit, eurodollar time deposits, overnight bank deposits and bankers'
acceptances of any Lender having maturities of one year or less from the date of
acquisition, and (iii) commercial paper of any Lender or Affiliate thereof or
any other issuer rated at least A-1 by Standard & Poor's Corporation or P-1 by
Moody's Investors Service, Inc., or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of investments.
"Change of Control" means an event or series of events (including
a merger or consolidation) as a result of which any "person" or "group" within
the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act (other than the
DLJ Entities, their Affiliates and employees of any of the DLJ Entities or any
of their Affiliates), together with their Affiliates (other than any such
Persons who are Affiliates of the DLJ Entities), (i) holds or acquires, directly
or indirectly, outstanding Voting Shares of KMG such that such person or group,
together with such Affiliates thereof, is or becomes the "beneficial owner"
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) of
outstanding Voting Shares of KMG entitling such person or group, together with
such Affiliates, to exercise more than 50% of the total voting power of all
classes of outstanding Voting Shares of KMG, or (ii) has a sufficient number of
its or their nominees elected to the Board of Directors of KMG such that such
nominees so elected (whether new or continuing as directors) shall constitute a
majority of the Board of Directors of KMG.
"Closing Date" means the date on which this Agreement becomes
effective as provided in Section 3.1.
"Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.
"Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any of the Loan Documents.
"Collateral Documents" means, collectively, the Security
Agreements, the Pledge Agreements and any other document executed and delivered
by a Loan Party granting a Lien on any of its property to secure payment of the
Obligations.
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"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness or Contractual Obligation of another Person, if the
purpose or intent of such Person incurring the Contingent Obligation is to
provide assurance to the obligee of such Indebtedness or Contractual Obligation
that such Indebtedness or Contractual Obligation will be paid or discharged, or
that any agreement relating thereto will be complied with, or that any holder of
such Indebtedness or Contractual Obligation will be protected (in whole or in
part) against loss in respect thereof. Contingent Obligations of a Person
include, without limitation and without duplication, (a) the direct or indirect
guarantee, endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of another Person, (b) any liability of such
Person for the obligations of another Person through any agreement (contingent
or otherwise) (i) to purchase, repurchase or otherwise acquire such obligation
or any security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such obligation or to assure
the holder of such obligation against loss or (v) to supply funds to, or in any
other manner invest in, such other Person (including, without limitation, to pay
for property or services irrespective of whether such property is received or
such services are rendered), if in the case of any agreement described under
subclause (i), (ii), (iii), (iv) or (v) of this sentence the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported.
"Contract Management Agreements" means any Contract Management
Agreement, in the form of Exhibit K hereto, between the Borrower or any of its
Subsidiaries and Katz Media or any of its Subsidiaries.
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"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument to which such Person is a party or by which it
or any of its property is bound or to which any of its properties is subject,
including, without limitation, in the case of the Borrower and each of its
Subsidiaries, any Representation Agreement.
"Default" means any event which with the passing of time or the
giving of notice or both would become an Event of Default.
"DLJ Entities" means, collectively, DLJ Merchant Banking
Partners, L.P., DLJ International Partners, C.V., DLJ Offshore Partners, C.V.
and DLJ Merchant Banking Funding, Inc.
"DOL" means the United States Department of Labor, or any
successor thereto.
"Dollars" and the sign "$" each mean the lawful money of the
United States of America.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or such other office of such Lender as such Lender may from
time to time specify to the Borrower and the Agent.
"EBITDA" means, for any Person and its Subsidiaries for any
period, Net Income (Loss) for such period taken as a single accounting period,
plus (a) the sum (without duplication) of the following amounts for such Person
and its Subsidiaries (including all such amounts for any Subsidiary, business or
Representation Agreement acquired by such Person or any of its Subsidiaries
during such period on a pro forma basis as if such acquisition had occurred on
the first day of such period) on a consolidated basis for such period to the
extent included in the determination of such Net Income (Loss): (i) depreciation
expense; (ii) amortization expense; (iii) gross interest expense; (iv) total
income tax expense; (v) extraordinary losses (and other losses on Asset Sales
not otherwise included in extraordinary losses); and (vi) "Loss on sale of
<PAGE>
station service contracts" as reflected on a consolidated statement of income of
such Person and its Subsidiaries; less (b) the sum (without duplication) of the
following amounts for such Person and its Subsidiaries (including all such
amounts for any Subsidiary, business or Representation Agreement acquired by
such Person or any of its Subsidiaries during such period on a pro forma basis
as if such acquisition had occurred on the first day of such period) on a
consolidated basis for such period to the extent included in the determination
of such Net Income (Loss): (i) extra-ordinary gains (and other gains on Asset
Sales not otherwise included in extraordinary gains); (ii) the Net Income (Loss)
of any other Person that is accounted for by the equity method of accounting,
except to the extent of the amount of dividends or distributions paid to such
Person; (iii) the Net Income (Loss) of any other Person acquired by such Person
or a Subsidiary of such Person in a transaction accounted for as a pooling of
interests for any period prior to the date of such acquisition; and (iv) "Gains
on sale of station service contracts" as reflected on a consolidated statement
of income of such Person and its Subsidiaries. The determination of EBITDA for
any Person for any period shall also include pro forma adjustments for the
elimination of excess overhead expenses of such Person for such period that are
established to the reasonable satisfaction of the Agent.
For all purposes of this Agreement, the EBITDA of any Person,
business or division for any period shall be determined in a manner consistent
in all relevant respects with the method used to determine EBITDA described
above, but on a non-consolidated basis. The determination of EBITDA for any
business or division for any period shall account for only those items included
in the definition of EBITDA that are attributable to such business or division.
"Eurocurrency Liabilities" has the meaning assigned to that term
in Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule II (or, if no such office is specified, its Domestic Lending
Office) or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.
<PAGE>
"Eurodollar Rate" means, for any Interest Period, an interest
rate per annum equal to the rate per annum obtained by dividing (i) the rate of
interest per annum at which deposits in United States dollars are offered by the
principal office of FNBB in London, England to prime banks in the London
interbank market at 11:00 A.M. (London time) two Business Days before the first
day of such Interest Period in an amount substantially equal to the Eurodollar
Rate Loan of FNBB during such Interest Period and for a period equal to such
Interest Period by (ii) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount of
the Revolving Credit Loans of any Lender that, for any Interest Period, bears
interest at a rate determined with reference to the Eurodollar Rate.
"Eurodollar Rate Margin" means a rate per annum equal to 2.50%.
"Eurodollar Rate Reserve Percentage" for any Interest Period
means the reserve percentage applicable two Business Days before the first day
of such Interest Period under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities which includes deposits by reference to which the
interest rate on Eurodollar Rate Loans is determined) having a term equal to
such Interest Period.
"Event of Default" has the meaning specified in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
<PAGE>
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Final Maturity Date" means March 31, 1998, or such earlier date
on which the outstanding Revolving Credit Loans hereunder are declared due and
payable and the Revolving Credit Commitments are terminated pursuant to the
terms of this Agreement.
"Fiscal Quarter" means a fiscal quarter of the Borrower, which
shall be a three-month period ending on the last day of any of March, June,
September or December.
"Fiscal Year" means a fiscal year of the Borrower, which shall be
the twelve-month period ending on December 31 of each year.
"FNBB has the meaning specified in the introductory paragraph.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
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"Guarantor" means each Subsidiary of the Borrower.
"Indebtedness" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money (including, without limitation,
reimbursement and all other obligations with respect to surety bonds, letters of
credit and bankers' acceptances, whether or not matured) or for the deferred
purchase price of property or services, (ii) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, (iii) all
indebtedness of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property, provided that in any such case the amount of such indebtedness shall
not, at any time, be deemed to exceed the fair market value of such property at
such time), (iv) all Capitalized Lease Obligations of such Person, (v) all
Contingent Obligations of such Person, (vi) all obligations of such Person to
purchase, redeem, retire, defease or otherwise acquire for value any Stock or
Stock Equivalents of such Person, valued at the greatest of its voluntary or
involuntary liquidation preference or purchase, redemption, retirement or
defeasance price, (vii) all obligations of such Person under Interest Rate
Contracts, (viii) all Indebtedness referred to in clause (i), (ii), (iii), (iv),
(v), (vi) or (vii) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, and (ix) in
the case of the Borrower, the unpaid principal of and interest on the Revolving
Credit Loans and all other monetary obligations with respect to the Obligations.
"Indemnitee" has the meaning specified in Section 9.4.
"Indenture" means the Indenture, dated as of December 2, 1992,
among Katz Media, Katz Communications, Inc., Banner Radio Sales, Inc., Christal
Radio Sales, Inc., Eastman Radio Sales, Inc., Seltel, Inc., and First Fidelity
Bank, National Association, New Jersey, as trustee.
"Interest Period" means, in the case of any Eurodollar Rate Loan,
(i) initially, the period commencing on the date such Eurodollar Rate Loan is
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made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan, and ending one, two or three months (or such other duration as is
available to each Lender) thereafter, as selected by the Borrower in its Notice
of Revolving Credit Borrowing or Notice of Conversion or Continuation given to
the Agent pursuant to Section 2.2 or 2.7 and (ii) thereafter, if such Revolving
Credit Loan is continued, in whole or in part, as a Eurodollar Rate Loan
pursuant to Section 2.7, a period commencing on the last day of the immediately
preceding Interest Period therefor and ending one, two or three months (or such
other duration as is available to each Lender) thereafter, as selected by the
Borrower in its Notice of Conversion or Continuation given to the Agent pursuant
to Section 2.7; provided, however, that all of the foregoing provisions relating
to Interest Periods in respect of Eurodollar Rate Loans are subject to the
following:
(A) if any Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension for any Eurodollar
Rate Loan would be to extend such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day;
(B) any Interest Period for any Eurodollar Rate Loan that begins
on the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(C) the Borrower may not select any Interest Period which ends
after the Final Maturity Date.
"Interest Rate Contracts" means interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements, interest rate
insurance, and other agreements or arrangements designed to provide protection
against fluctuations in interest rates.
"IRS" means the Internal Revenue Service, or any successor
thereto.
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"Katz Media" means Katz Media Corporation, a Delaware
corporation.
"Katz Media Credit Agreement" means the Third Amended and
Restated Credit Agreement, dated as of September 9, 1994, among Katz Media,
certain financial institutions, and FNBB and Credit Lyonnais New York Branch, as
Underwriting Agents, and FNBB, as Agent.
"KCC" means Katz Capital Corporation, a Delaware corporation.
"KMG" means Katz Media Group, Inc., a Delaware corporation.
"KMG Pledge Agreement" means the Pledge Agreement, in the form of
Exhibit F hereto, executed by KMG in favor of the Agent.
"Leases" means, with respect to the Borrower or any of its
Subsidiaries, all of those leasehold estates in real property now owned by the
Borrower or such Subsidiary as lessee or sublessee or hereafter acquired by the
Borrower or such Subsidiary, as lessee or sublessee.
"Lenders" has the meaning specified in the introductory
paragraph.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a Capitalized Lease Obligation, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing, under the Uniform Commercial Code or comparable law of any jurisdiction,
of any financing statement naming the owner of the asset to which such Lien
relates as debtor.
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"Loan Documents" means, collectively, this Agreement, the
Revolving Credit Notes, each Subsidiary Guaranty to be executed by a Subsidiary
of the Borrower pursuant to Section 5.18, the Collateral Documents, and each
certificate, agreement or document executed by a Loan Party and delivered to the
Agent or any Lender in connection with or pursuant to any of the foregoing.
"Loan Party" means each of the Borrower and its Subsidiaries,
KMG, and any other Affiliate of the Borrower that executes and delivers a Loan
Document.
"Majority Lenders" means, at any time, Lenders holding at least
60% of the then aggregate unpaid principal amount of the Revolving Credit Loans
or, if no such principal amount is then outstanding, Lenders having at least 60%
of the Revolving Credit Commitments, provided, however, that as long as there
are four or more Lenders, the Majority Lenders shall include at least three
Lenders.
"Material Adverse Change" means a material adverse change in any
of (i) the condition (financial or otherwise), business, performance, prospects,
operations or properties of the Borrower, or of the Borrower and its
Subsidiaries taken as one enterprise, (ii) the legality, validity or
enforceability of any Loan Document, (iii) the fully perfected first priority
status of the Liens granted pursuant to the Collateral Documents, (iv) the
ability of the Borrower to repay the Obligations or of any Loan Party to perform
its obligations hereunder or under any other Loan Document or (v) the rights and
remedies of the Lenders or the Agent under any of the Loan Documents.
"Material Adverse Effect" means an effect that results in or
causes a Material Adverse Change.
"Net Income (Loss)" means, for any Person for any period, the net
income (or loss) from continuing operations of such Person and its Subsidiaries
for such period, including, without limitation, the net income (or loss)
attributable to any business or Representation Agreement acquired during such
period on a pro forma basis as if such acquisition had occurred on the first day
of such period.
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"Notice of Conversion or Continuation" has the meaning specified
in Section 2.7.
"Notice of Revolving Credit Borrowing" has the meaning specified
in Section 2.2(a).
"Obligations" means the Revolving Credit Loans and all other
advances, debts, liabilities, obligations, covenants and duties owing by the
Borrower or any of the its Subsidiaries to the Agent or any Lender of every type
and description, present or future, arising under this Agreement or under any
other Loan Document, whether or not evidenced by any note, guaranty or other
instrument, whether or not for the payment of money, whether arising by reason
of an extension of credit, loan, guaranty, indemnification or Interest Rate
Contract, whether direct or indirect (including, without limitation, those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term "Obligations"
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and disbursements and any other amounts chargeable to the Borrower or any
of its Subsidiaries under this Agreement or any other Loan Document.
"Operating Expenses" means, for any Person and its Subsidiaries
for any period, all operating expenses (exclusive of depreciation, amortization
and other similar charges) of such Person and its Subsidiaries for such Period
determined on a consolidated basis in accordance with GAAP.
"Other Taxes" has the meaning specified in Section 2.14(b).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Person" means an individual, partnership, corporation (including
a business trust), joint stock company, trust, unincorporated association, joint
venture or other entity, or a Governmental Authority.
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"Plan" means an employee benefit plan, as defined in Section 3(3)
of ERISA, which the Borrower or any of its Subsidiaries maintains, contributes
to or has an obligation to contribute to on behalf of participants who are or
were employed by any of them.
"Pledge Agreements" means, collectively, the Borrower Pledge
Agreement, the KMG Pledge Agreement and any Pledge Agreement entered into by any
Subsidiary of the Borrower pursuant to Section 5.18.
"Pledged Shares" means, collectively, the Pledged Shares as
defined in each of the Pledge Agreements.
"Ratable Portion" or "ratably" means, with respect to any Lender,
the quotient obtained by dividing the aggregate principal amount of all
Revolving Credit Loans held by such Lender by the aggregate principal amount of
all Revolving Credit Loans held by all Lenders, and if no Revolving Credit Loans
are then outstanding, by dividing the Revolving Credit Commitment of such Lender
by the Revolving Credit Commitments of all Lenders.
"Reference Bank" means FNBB.
"Refinancing Event" means (i) any permanent repayment or
prepayment of, or any repurchase, redemption, acquisition or defeasance of, all
or substantially all of the Indebtedness evidenced by the Katz Media Credit
Agreement or by debentures issued under the Indenture, or (ii) any sale,
transfer or other disposition, whether by merger, operation of law, or
otherwise, but excluding terminations of Representation Agreements, of all or
any substantial part of the assets of KCC, or of Katz Media and its Subsidiaries
taken as a whole, or of the Stock and Stock Equivalents of KCC or Katz Media. As
used in this definition, a "substantial part of the assets of Katz Media and its
Subsidiaries taken as a whole" shall mean assets which (i) on a historical basis
generated revenue equal to twenty-five percent (25%) or more of the consolidated
revenue of Katz Media and its Subsidiaries for the immediately preceding four
fiscal quarters of Katz Media or (ii) is expected, based on projections prepared
by management of Katz Media in good faith, to generate revenue equal to
twenty-five percent (25%) or more of the consolidated revenue of Katz Media and
its Subsidiaries for the next four fiscal quarters of Katz Media.
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"Representation Agreement" means any agreement now in effect or
hereafter entered into between the Borrower or any of its Subsidiaries and
owners and operators of radio or television stations and cable systems pursuant
to which the Borrower or such Subsidiary represents such stations or systems in
the sale of national spot broadcast advertising time.
"Representation Agreement Acquisition Payments" means, for any
Person for any period, the aggregate of all payments which would be reflected as
"Payment made on purchase of station representation contracts" on a consolidated
statement of cash flows of such Person and its Subsidiaries for such period.
"Representation Agreement Termination Payments" means, for any
Person for any period, the aggregate of all payments received which would be
reflected as "Payment received on sale of station representation contracts" on a
consolidated statement of cash flows of such Person and its Subsidiaries for
such period.
"Requirement of Law" means, as to any Person, the charter and
bylaws or other organizational or governing documents of such Person, and all
Federal, state and local laws, rules and regulations, including, without
limitation, all disclosure requirements of ERISA and all orders, judgments,
decrees or other determinations of an arbitrator, court or other Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Responsible Officer" means, with respect to any Person, any of
the principal executive officers of such Person.
"Revolving Credit Borrowing" means a Borrowing consisting of
Revolving Credit Loans made on the same day by the Lenders ratably according to
their respective Revolving Credit Commitments.
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"Revolving Credit Commitment" has the meaning specified in
Section 2.1(a).
"Revolving Credit Loan" means a loan made by a Lender to the
Borrower pursuant to Section 2.1(a).
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender in a principal amount equal to the amount of
such Lender's Revolving Credit Commitment as originally in effect, in
substantially the form of Exhibit A, evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from the Revolving Credit Loans made by
such Lender.
"Secured Parties" means the Lenders and the Agent.
"Security Agreements" means, collectively, the Borrower Security
Agreement and any Security Agreement entered into by any Subsidiary of the
Borrower pursuant to Section 5.18.
"Shares" means the Borrower's Common Stock.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which an aggregate of 50% or more of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors, managers, trustees or other controlling Persons, or an equivalent
controlling interest therein, of such Person is, at the time, directly or
indirectly, owned or controlled by such Person and/or one or more Subsidiaries
of such Person (irrespective of whether, at the time, Stock of any other class
<PAGE>
or classes of such entity shall have or might have voting power by reason of the
happening of any contingency).
"Subsidiary Guaranty" means the Guaranty, in the form of Exhibit
D hereto, to be executed by each Subsidiary of the Borrower in favor of the
Agent.
"Taxes" has the meaning specified in Section 2.14(a).
"Voting Shares" means, for any Person, Stock of such Person which
under ordinary circumstances has the voting power entitling the holders of such
Stock to elect the board of directors or other governing body of such Person.
1.2. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding" and the word "through" means "to and including".
1.3. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.
1.4. Certain Terms. (a) The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, and not to any particular Article, Section, subsection or clause in this
Agreement. References herein to an Exhibit, Schedule, Article, Section,
subsection or clause shall refer to the appropriate Exhibit or Schedule to, or
Article, Section, subsection or clause in, this Agreement.
(b) The terms Lender and the Agent include their respective
successors and the term Lender includes each assignee of such Lender who becomes
a party hereto pursuant to Section 9.7.
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(c) References to any agreement, instrument or other document
refer to such agreement, instrument or other document as originally executed or,
if subsequently amended, replaced or supplemented from time to time, as so
amended, replaced or supplemented and in effect at the relevant time of
reference.
ARTICLE II
THE REVOLVING CREDIT LOANS
2.1. The Revolving Credit Loans. (a) On the terms and subject to
the conditions contained in this Agreement, each Lender severally agrees to make
loans (each a "Revolving Credit Loan") to the Borrower from time to time on any
Business Day during the period from the Closing Date until the Final Maturity
Date in an aggregate amount not to exceed at any time outstanding the amount set
forth opposite such Lender's name on Schedule I as its Revolving Credit
Commitment (such Lender's "Revolving Credit Commitment"). Within the limits of
each Lender's Revolving Credit Commitment, amounts prepaid pursuant to Section
2.6(b) may be reborrowed under this Section 2.1. The Revolving Credit Loans of
each Lender shall be evidenced by a Revolving Credit Note.
(b) Notwithstanding any other provision of this Agreement,
$5,000,000 of the aggregate Revolving Credit Commitments of $35,000,000 shall be
held available to pay interest arising under this Agreement and the other Loan
Documents, and shall not be available for any other purposes.
2.2. Making the Revolving Credit Loans. (a) Each Revolving Credit
Borrowing shall be made upon receipt of a notice, in substantially the form of
Exhibit B (the "Notice of Revolving Credit Borrowing"), given by the Borrower to
the Agent not later than 11:00 A.M. (Boston time) on the third (or, in the case
of a Borrowing consisting only of Base Rate Loans, the first) Business Day prior
to the date of the proposed Revolving Credit Borrowing (each such date being
referred to herein as a "Closing Date"). Each Notice of Revolving Credit
Borrowing shall be by telecopy, telex or cable, confirmed promptly by a manually
<PAGE>
signed writing, specifying therein (i) the proposed Closing Date, (ii) the
aggregate amount of such proposed Revolving Credit Borrowing, (iii) the amount
thereof, if any, requested to be Eurodollar Rate Loans and (iv) the initial
Interest Period or Periods for any such Eurodollar Rate Loans. Each Revolving
Credit Loan shall be made as a Base Rate Loan unless (subject to Section 2.11)
the Notice of Revolving Credit Borrowing specifies that all or a pro rata
portion thereof shall be Eurodollar Rate Loans; provided, however, that the
aggregate of the Eurodollar Rate Loans for each Interest Period must be in an
amount of not less than $500,000 or an integral multiple of $100,000 in excess
thereof.
(b) The Agent shall give to each Lender prompt notice of the
Agent's receipt of a Notice of Revolving Credit Borrowing and, if Eurodollar
Rate Loans are properly requested in such Notice of Revolving Credit Borrowing,
the applicable interest rate under Section 2.8(b). Each Lender shall, before
11:00 A.M. (Boston time) on the date of the proposed Closing Date, make
available for the account of its Applicable Lending Office to the Agent at its
address referred to in Section 9.2, in immediately available funds, such
Lender's Ratable Portion of such proposed Revolving Credit Borrowing. After the
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Agent will make such funds available to the
Borrower at the Agent's aforesaid address.
(c) Each Notice of Revolving Credit Borrowing shall be
irrevocable and binding on the Borrower. In the case of a proposed Revolving
Credit Borrowing which the Notice of Revolving Credit Borrowing specifies is to
be comprised of Eurodollar Rate Loans, the Borrower shall indemnify each Lender
against any loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in such Notice of Revolving
Credit Borrowing for such proposed Revolving Credit Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(including, without limitation, loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund any Eurodollar Rate Loan to be made by such
Lender as part of such proposed Borrowing when such Eurodollar Rate Loan, as a
result of such failure, is not made on the specified Closing Date.
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(d) Unless the Agent shall have received notice from a Lender
prior to any proposed Closing Date that such Lender will not make available to
the Agent such Lender's Ratable Portion of such Revolving Credit Borrowing, the
Agent may assume that such Lender has made such Ratable Portion available to the
Agent on the proposed Closing Date in accordance with this Section 2.2 and the
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have so
made such Ratable Portion available to the Agent, such Lender and the 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 the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to the Revolving Credit Loans comprising such Revolving Credit Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Revolving Credit Loan as part of such Revolving Credit
Borrowing for purposes of this Agreement. If the Borrower shall repay to the
Agent such corresponding amount, such payment shall not relieve such Lender of
any obligation it may have to the Borrower hereunder.
(e) The failure of any Lender to make the Revolving Credit Loan
to be made by it as part of a Revolving Credit Borrowing shall not relieve any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Loan on the Closing Date of such Revolving Credit Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Revolving Credit
Loan to be made by such other Lender on the such Closing Date.
(f) Each Revolving Credit Borrowing consisting solely of Base
Rate Loans shall be in an aggregate amount of not less than $100,000 or an
integral multiple of $100,000 in excess thereof.
<PAGE>
2.3. Commitment Fees. The Borrower agrees to pay to each Lender a
fee on the average daily Available Commitment of such Lender from the date
hereof until the Final Maturity Date at the rate of 1/2 of 1% per annum, payable
in arrears on the first day of each January, April, July and October during the
term of such Lender's Revolving Credit Commitment, and on the Final Maturity
Date.
2.4. Reduction and Termination of the Commitments. (a) The
Borrower shall have the right, upon at least three Business Days' prior notice
to the Agent, to terminate in whole or permanently reduce ratably in part the
unused portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in the aggregate amount
of not less than $1,000,000 or an integral multiple of $1,000,000 in excess
thereof.
(b) The Revolving Credit Commitments shall in any event terminate
in their entirety on the earlier of (i) the occurrence of any Refinancing Event,
or (ii) the Final Maturity Date.
2.5. Repayment. The Borrower shall repay the aggregate unpaid
principal amount of the Revolving Credit Loans on the Final Maturity Date.
2.6. Prepayments. (a) The Borrower shall have no right to prepay
the principal amount of any Revolving Credit Loan other than as provided in this
Section 2.6.
(b) The Borrower may, upon at least three Business Days' prior
notice to the Agent stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given, the Borrower shall prepay the
outstanding principal amount of the Revolving Credit Loans, in whole or ratably
in part, without penalty, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that any
prepayment of any Eurodollar Rate Loan shall include, if applicable, all amounts
payable under Section 9.4(c), and provided, further, that each partial
prepayment pursuant to this Section 2.6(b) shall be in an aggregate amount not
less than $500,000 (or in the case of a prepayment of Base Rate Loans, $100,000)
or integral multiples of $100,000 in excess thereof.
<PAGE>
(c) If, at any time the aggregate outstanding principal amount of
the Revolving Credit Loans exceeds the aggregate Revolving Credit Commitments,
the Borrower shall forthwith prepay ratably the outstanding principal amount of
the Revolving Credit Loans by the amount of such excess, together with accrued
interest to the date of such prepayment on the principal amount prepaid.
(d) Concurrently with the receipt by the Borrower or any of its
Subsidiaries of: (i) Asset Sale Proceeds or (ii) Representation Agreement
Termination Payments, the Borrower shall forthwith prepay ratably the Revolving
Credit Loans in an amount equal to such Asset Sale Proceeds or Representation
Agreement Termination Payments, together with accrued interest to the date of
such prepayment on the principal amount prepaid.
(e) Immediately upon the occurrence of any Refinancing Event, the
Borrower shall prepay all the outstanding Revolving Credit Loans, all accrued
interest on the Revolving Credit Loans and all other Obligations.
(f) Any prepayment of Revolving Credit Loans pursuant to this
Section 2.6 made on a day other than the last day of an Interest Period for any
Loans shall be applied first to Base Rate Loans, if any, then outstanding and
second to Eurodollar Rate Loans with the shortest Interest Periods remaining.
2.7. Conversion/Continuation Option. The Borrower may elect (i)
at any time to convert Base Rate Loans or any portion thereof to Eurodollar Rate
Loans, (ii) at the end of any Interest Period with respect thereto, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate of the Eurodollar Loans
for each Interest Period therefor must be in the amount of not less than
$500,000 or an integral multiple of $100,000 in excess thereof. Each conversion
or continuation shall be allocated among the Revolving Credit Loans of the
Lenders in accordance with each Lender's Ratable Portion of the amount so
converted or continued. Each such election shall be in substantially the form of
Exhibit C (a "Notice of Conversion or Continuation") and shall be made by giving
the Agent at least three Business Days' prior written notice thereof specifying
(A) the amount and type of conversion or continuation, (B) in the case of a
conversion to or a continuation of Eurodollar Rate Loans, the Interest Period
therefor and (C) in the case of a conversion, the date of conversion (which date
shall be a Business Day and, if a conversion from Eurodollar Rate Loans, shall
also be the last day of the Interest Period therefor). The Agent shall promptly
notify each Lender of its receipt of a Notice of Conversion or Continuation and
of the contents thereof. Notwithstanding the foregoing, no conversion in whole
or in part of Base Rate Loans to Eurodollar Rate Loans, and no continuation in
whole or in part of Eurodollar Rate Loans upon the expiration of any Interest
Period therefor, shall be permitted at any time at which a Default or an Event
of Default shall have occurred and be continuing. If, within the time period
required under the terms of this Section 2.7, the Agent does not receive a
Notice of Conversion or Continuation from the Borrower containing a permitted
election to continue any Eurodollar Rate Loans for an additional Interest
Period, then, upon the expiration of the Interest Period therefor, such Loans
will be automatically converted to Base Rate Loans. Each Notice of Conversion or
Continuation shall be irrevocable.
<PAGE>
2.8. Interest. The Borrower shall pay interest on the unpaid
principal amount of each Revolving Credit Loan from and including the date
thereof until the principal amount thereof shall be paid in full, at the
following rates per annum:
(a) Base Rate Loans. For Base Rate Loans, at a rate per annum
equal at all times to the Base Rate Margin plus the Base Rate in effect from
time to time, payable quarterly in arrears on the first day of each January,
April, July and October and on the date any Base Rate Loan is converted or paid
in full and on the Final Maturity Date; provided, however, that during the
continuance of an Event of Default, all Base Rate Loans shall bear interest,
payable on demand, at a rate per annum equal at all times to 2.00% above the
Base Rate in effect from time to time plus the Base Rate Margin.
(b) Eurodollar Rate Loans. For Eurodollar Rate Loans, at a rate
per annum equal at all times during the applicable Interest Period for each
Eurodollar Rate Loan to the sum of the Eurodollar Rate for such Interest Period
plus the Eurodollar Rate Margin, payable in arrears on the last day of such
Interest Period, on the Final Maturity Date and on the date any Eurodollar Rate
Loan is converted or paid in full and, if such Interest Period has a duration of
<PAGE>
more than three months, on each day during such Interest Period which occurs
every three months from the first day of such Interest Period; provided,
however, that during the continuance of an Event of Default, all Eurodollar Rate
Loans shall bear interest, payable on demand, at a rate per annum equal at all
times to 2.00% above the Eurodollar Rate plus the Eurodollar Rate Margin until
the maturity of the Revolving Credit Loans or the end of the Interest Period,
whichever occurs first, and thereafter at 2.00% per annum above the Base Rate in
effect from time to time plus the Base Rate Margin.
2.9. Interest Rate Determination. (a) The Eurodollar Rate for
each Interest Period for Eurodollar Rate Loans shall be determined by the Agent
on the basis of applicable rates furnished to and received by the Agent two
Business Days before the first day of such Interest Period.
(b) The Agent shall give prompt notice to the Borrower and the
Lenders of the applicable interest rate determined by the Agent for purposes of
Section 2.8.
(c) If, with respect to Eurodollar Rate Loans, the Majority
Lenders notify the Agent that the Eurodollar Rate for any Interest Period
therefor will not adequately reflect the cost to the Majority Lenders of making
such Loans or funding or maintaining their respective Eurodollar Rate Loans for
such Interest Period, the Agent shall forthwith so notify the Borrower and the
Lenders, whereupon
(i) each Eurodollar Loan will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate Loan; and
(ii) the obligation of the Lenders to make, and the right of the
Borrower to select, Eurodollar Rate Loans or to convert Revolving Credit Loans
into Eurodollar Rate Loans shall be suspended until the Agent shall notify the
Borrower that such Lenders have determined that the circumstances causing such
suspension no longer exist.
<PAGE>
2.10. Increased Costs. If, due to either (i) the introduction of,
or any change (other than any change by way of, imposition or increase of
reserve requirements included in the Eurodollar Rate Reserve Percentage) in the
interpretation of, or compliance with, any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining any Eurodollar Rate Loans, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the amount
of such increased cost setting forth in reasonable detail the basis for
computing the amount payable to such Lender pursuant to this Section 2.10 shall
be submitted to the Borrower and the Agent by such Lender and such certificate
shall be conclusive and binding for all purposes, absent manifest error. If the
Borrower so notifies the Agent within five Business Days after any Lender
notifies the Borrower of any increased cost pursuant to the foregoing provisions
of this Section 2.10, the Borrower may either (A) prepay in full all Eurodollar
Rate Loans of such Lender then outstanding in accordance with Section 2.6(b)
and, additionally, reimburse such Lender for such increased cost in accordance
with this Section 2.10 or (B) convert all Eurodollar Rate Loans of all Lenders
then outstanding into Base Rate Loans in accordance with Section 2.7 and,
additionally, reimburse such Lender for such increased cost in accordance with
this Section 2.10.
2.11. Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of, or any change in or in the interpretation of,
any law or regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans, then, on notice thereof and demand therefor
by such Lender to the Borrower through the Agent, (i) the obligation of such
Lender to make or to continue Eurodollar Rate Loans and to convert Base Rate
Loans into Eurodollar Rate Loans shall terminate and (ii) the Borrower shall
forthwith prepay in full all Eurodollar Rate Loans of such Lender then
outstanding, together with interest accrued thereon, except to the extent the
Borrower, within five Business Days of such notice and demand (or such shorter
time as may be required by law), converts all Eurodollar Rate Loans of all
Lenders then outstanding into Base Rate Loans.
<PAGE>
2.12. Capital Adequacy. If either (i) the introduction of, or any
change in or in the interpretation of, or compliance with, any law or regulation
or (ii) compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), affects or
would affect the amount of capital required or expected to be maintained by any
Lender or any corporation controlling any Lender and such Lender reasonably
determines that such amount is based upon the existence of such Lender's
Revolving Credit Commitment or Revolving Credit Loans and other commitments or
loans of this type, then, upon demand by such Lender (with a copy of such demand
to the Agent), the Borrower shall pay to the Agent for the account of such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's Revolving Credit Commitment or
Revolving Credit Loans. A certificate as to such amounts setting forth in
reasonable detail the basis for computing the amount payable to such Lender
pursuant to this Section 2.12 shall be submitted to the Borrower and the Agent
by such Lender and such certificate shall be conclusive and binding for all
purposes absent manifest error.
2.13. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Revolving Credit Notes not later than 11:00 A.M.
(Boston time) on the day when due, in Dollars, to the Agent at its address
referred to in Section 9.2 in immediately available funds without set-off or
counterclaim. The Agent will promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal or interest or
fees to the Lenders, in accordance with their respective Ratable Portions (other
than amounts payable pursuant to Section 2.10, 2.11, 2.12 or 2.14), for the
account of their respective Applicable Lending Offices, and like funds relating
to the payment of any other amount payable to any Lender to such Lender for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Payment received by the Agent after
11:00 A.M. (Boston time) shall be deemed to be received on the next Business
Day.
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(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder as provided in
the first sentence of Section 2.13(a), to charge from time to time against any
or all of the Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall be
made by the Agent on the basis of a year of 365 or 366 days, as the case may be,
and all computations of interest based on the Eurodollar Rate or the Federal
Funds Rate and of fees shall be made by the Agent on the basis of a year of 360
days, in each case for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest and fees
are payable. Each determination by the Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Revolving Credit
Notes shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest or
fees, as the case may be; provided, however, that if such extension would cause
payment of interest on or principal of any Eurodollar Rate Loan to be made in
the next calendar month, such payment shall be made on the next preceding
Business Day.
(e) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due hereunder to the Lenders that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each Lender shall repay to the Agent forthwith on demand such amount distributed
to such Lender together with interest thereon, for each day from the date such
amount is distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
<PAGE>
2.14. Taxes. (a) Any and all payments by the Borrower hereunder
or under the Revolving Credit Notes shall be made, in accordance with Section
2.13, free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities
with respect thereto, excluding, (i) in the case of each Lender and the Agent,
taxes imposed on its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender or the Agent, as the case may
be, is organized or any political subdivision thereof, (ii) in the case of each
Lender, taxes measured by its net income, and franchise taxes imposed on it, by
the jurisdiction of such Lender's Applicable Lending Office or any political
subdivision thereof and (iii) in the case of each Lender, United States
withholding tax payable with respect to payments by the Borrower hereunder under
laws (including, without limitation, any statute, treaty, ruling, determination
or regulation) in effect on the Initial Date for such Lender, but not excluding
withholding tax payable as a result of any change in such laws occurring after
the Initial Date (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
For the purpose of this Section 2.14, the term "Initial Date" shall mean, with
respect to each Lender, the date of this Agreement and, with respect to each
assignee of any Lender, the effective date specified in the Assignment and
Acceptance pursuant to which such assignee becomes a party to this Agreement. If
the Borrower shall be required by law to deduct any Taxes from or in respect of
any sum payable hereunder to any Lender or the Agent, (A) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.14) 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, (B) the
Borrower shall make such deductions, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
applicable law and (D) the Borrower shall deliver to the Agent evidence of such
payment to the relevant taxation or other authority.
<PAGE>
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction which arise from any payment made hereunder or
under the Revolving Credit Notes or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or the Revolving Credit Notes
(hereinafter referred to as "Other Taxes"); provided, however, that the Borrower
shall not be required to pay any amount of Other Taxes to the extent arising
from the sale, assignment or other transfer of, or sale of participations in,
any Loan by any Lender.
(c) The Borrower will indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.14) paid by such Lender or the Agent, as the case may be, and any liability
(including, without limitation, for penalties, interest and expenses, except to
the extent that such penalties, interest or expenses are caused by the gross
negligence, bad faith or willful misconduct of such Lender) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Agent, as the case may be, makes written demand
therefor.
(d) Within 30 days after the date of any payment by the Borrower
of Taxes or Other Taxes, the Borrower will furnish to the Agent, at its address
referred to in Section 9.2, the original or a certified copy of a receipt
evidencing payment thereof by the Borrower.
<PAGE>
(e) Prior to the date of this Agreement in the case of each
Lender that is a signatory hereto, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Lender and from time to time thereafter if reasonably requested by the Borrower
or the Agent, each Lender organized under the laws of a jurisdiction outside the
United States that is entitled to an exemption from United States withholding
tax, or that is subject to such tax at a reduced rate under an applicable tax
treaty, shall provide the Agent and the Borrower with an IRS Form 4224 or Form
1001 or other applicable form, certificate or document prescribed by the IRS
certifying as to such Lender's entitlement to such exemption or reduced rate
with respect to all payments to be made to such Lender hereunder and under the
Revolving Credit Notes. Unless the Borrower and the Agent have received forms or
other documents satisfactory to them indicating that payments hereunder or under
any Revolving Credit Note are not subject to United States withholding tax or
are subject to such tax at a rate reduced by an applicable tax treaty, the
Borrower or the Agent shall withhold taxes from such payments at the applicable
statutory rate in the case of payments to or for any Lender organized under the
laws of a jurisdiction outside the United States.
(f) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.14 shall survive the payment in full of principal and interest
hereunder and under the Revolving Credit Notes.
2.15. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Revolving Credit Loans made by it
(other than pursuant to Section 2.10, 2.11, 2.12 or 2.14) in excess of its
Ratable Portion of payments on account of the Revolving Credit Loans obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in their Revolving Credit Loans as shall be necessary to
cause such purchasing Lender to share the excess payment ratably with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
<PAGE>
pursuant to this Section 2.15 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
ARTICLE III
CONDITIONS OF LENDING
3.1. Conditions Precedent to Initial Borrowing. The obligations
of each Lender to make Revolving Credit Loans on the initial Closing Date
hereunder are subject to satisfaction of the following conditions precedent:
(a) Loan Documents, etc. The Agent shall have received, on the
Closing Date, the following, each dated the initial Closing Date unless
otherwise indicated, in form and substance satisfactory to the Agent, in its
sole judgment exercised reasonably, and (except for the Revolving Credit Notes)
in sufficient copies for each Lender:
(i) a fully executed counterpart of this Agreement, dated the
date hereof, and a Revolving Credit Note payable to the order of each Lender;
(ii) certified copies of (A) the resolutions of the Board of
Directors and the stockholders, where required, of each Loan Party approving
each Loan Document to which it is a party and (B) all documents evidencing other
necessary corporate action and required governmental and material third party
approvals, licenses and consents with respect to each Loan Document and the
transactions contemplated thereby;
(iii) a copy of the certificate of incorporation of each Loan
Party, certified as of a recent date by the Secretary of State of the state of
incorporation of such Loan Party, together with certificates of such official
attesting to the good standing of each such Loan Party, and a copy of the
<PAGE>
by-laws of each Loan Party certified as of a recent date by the Secretary or an
Assistant Secretary of such Loan Party;
(iv) a certificate of the Secretary or an Assistant Secretary of
each Loan Party, certifying the names and true signatures of other officers of
such Loan Party who have been authorized to execute and deliver any Loan
Document or other document required hereunder to be executed and delivered by or
on behalf of such Loan Party;
(v) the KMG Pledge Agreement and the Borrower Pledge Agreement,
in each case duly executed by the Loan Party thereto, together with (i)
certificates representing the Pledged Shares and undated stock powers for such
certificates executed in blank and (ii) evidence that all action necessary or,
in the opinion of the Agent, desirable to perfect and protect the Liens created
by the Pledge Agreements has been taken;
(vi) the Borrower Security Agreement, duly executed by the
Borrower, together with (A) duly executed Financing Statements (Form UCC-1) in
proper form for filing under the Uniform Commercial Code in all jurisdictions as
may be necessary or, in the opinion of the Agent, desirable to perfect and
protect the Liens created by the Borrower Security Agreement, and (B) evidence
satisfactory to the Agent of the release of all Liens over the property of the
Borrower other than Liens permitted by Section 6.1;
(vii) a favorable opinion of Davis Polk & Wardwell, counsel to
the Loan Parties, in the form of Exhibit I hereto;
(viii) intentionally omitted;
(ix) a certificate, signed by a Responsible Officer of the
Borrower, stating that the conditions specified in Sections 3.1(c) through (e)
and 3.2(a) have been met;
(x) audited consolidated financial statements of KMG for the
fiscal year of KMG ending December 31, 1995, accompanied by an unqualified
report thereon prepared by the independent certified public accountant of KMG,
<PAGE>
and unaudited interim consolidated financial statements of KMG for the fiscal
quarters ending March 31, 1996 and June 30, 1996;
(xi) a pro forma balance sheet of the Borrower and its
Subsidiaries as of the initial Closing Date;
(xii) any executed Contract Management Agreements between the
Borrower and Katz Media or one of its Subsidiaries;
(xiii) an amendment to the Katz Media Credit Agreement, in the
form of Exhibit J hereto, duly and validly executed by all parties thereto; and
(xiv) such additional documents, information and materials as any
Lender, through the Agent, may reasonably request.
(b) Capital Structure of Borrower. The Borrower shall be
established as a wholly-owned direct Subsidiary of KMG with a corporate and
capital structure satisfactory to the Agent.
(c) No Material Adverse Change. There shall have been no Material
Adverse Change in the financial condition or prospects of KMG or Katz Media
since June 30, 1996.
(d) Government Approvals. All necessary governmental and third
party approvals required to be obtained by any Loan Party in connection with the
transactions contemplated hereby shall have been obtained and shall remain in
effect.
(e) No Injunction. There shall exist no judgment, order,
injunction or other restraint prohibiting or imposing materially adverse
conditions upon the consummation of the transactions contemplated hereby.
(f) No Proceedings. There shall exist no claim, action, suit,
investigation or proceeding (including, without limitation, stockholder or
derivative litigation) threatened in any court or before any arbitrator or
Governmental Authority which relates to the financing hereunder or which has a
reasonable likelihood of having a Material Adverse Effect.
<PAGE>
(g) Fees, Expenses, etc. All costs and accrued and unpaid fees
and expenses (including, without limitation, legal fees and expenses) required
to be paid to the Agent or the Lenders on the initial Closing Date shall have
been paid.
3.2. Conditions Precedent to Each Revolving Credit Loan. The
obligation of each Lender to make any Revolving Credit Loan shall be subject to
the further conditions precedent that:
(a) The following statements shall be true and correct on the
date of such Revolving Credit Loans, before and after giving effect thereto and
to the application of the proceeds therefrom (and the acceptance by the Borrower
of the proceeds of such Revolving Credit Loans shall constitute a representation
and warranty by the Borrower that on the date of such Revolving Credit Loans
such statements are true):
(i) The representations and warranties of the Borrower contained
in Article IV and of each Loan Party in the other Loan Documents (other than
those representations and warranties which specifically relate to an earlier
date) are correct on and as of such date as though made on and as of such date;
and
(ii) No Default or Event of Default is continuing as of the
applicable Closing Date or will result from the Revolving Credit Loans being
made on such date or the proposed application of proceeds of such Revolving
Credit Loan.
(b) The making of the Revolving Credit Loans on such date does
not violate any Requirement of Law and is not enjoined, temporarily, preliminary
or permanently.
(c) The Agent shall have received such additional documents,
information and materials as any Lender, through the Agent, may reasonably
request.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders and the Agent to enter into this Agreement,
the Borrower represents and warrants to the Lenders and the Agent as follows:
4.1. Corporate Existence; Compliance with Law. Each Loan Party is
a corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation. Each of the Borrower and its
Subsidiaries (i) is duly qualified to transact business as a foreign corporation
and in good standing as a foreign corporation under the laws of each
jurisdiction, except where the failure to be so qualified has no reasonable
likelihood of having a Material Adverse Effect, including those jurisdictions
listed on Schedule 4.1; (ii) has all requisite corporate power and authority and
the legal right to own, pledge, mortgage and operate its properties, to lease
the property it operates under lease and to conduct its business as now or
currently proposed to be conducted; (iii) is in compliance with its certificate
of incorporation and by-laws; (iv) is in compliance with all applicable
Requirements of Law, except for such non-compliances that, individually or in
the aggregate, have no reasonable likelihood of having a Material Adverse
Effect; and (v) has all necessary licenses, permits, consents or approvals from
or by, has made all necessary filings with, and has given all necessary notices
to, each Governmental Authority having jurisdiction, to the extent required for
such ownership, operation and conduct, except for licenses, permits, consents or
approvals which can be obtained by the taking of ministerial action to secure
the grant or transfer thereof or which the failure to have, individually or in
the aggregate, would have no reasonable likelihood of having a Material Adverse
Effect.
4.2. Corporate Power; Authorization; Enforceable Obligations. (a)
The execution, delivery and performance by each Loan Party of the Loan Documents
to which it is a party and the consummation of the transactions related to the
financing contemplated hereby:
<PAGE>
(i) are within such Loan Party's corporate powers;
(ii) have been duly authorized by all necessary corporate action,
including, without limitation, the consent of stockholders where required;
(iii) do not and will not (A) contravene any Loan Party's
certificate of incorporation or by-laws or other comparable governing documents,
(B) violate any Requirement of Law (including, without limitation, Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System), or any
order or decree of any Governmental Authority or arbitrator binding on or
affecting such Loan Party, (C) conflict with or result in the breach of, or
constitute a default under, or result in the termination of, any Contractual
Obligation of any Loan Party, except such as would, individually or in the
aggregate, have no reasonable likelihood of having a Material Adverse Effect, or
(D) require or permit the acceleration of any Indebtedness of any Loan Party or
(E) result in the creation or imposition of any Lien upon any of the property of
any Loan Party, other than those in favor of the Agent on behalf of and for the
ratable benefit of the Secured Parties; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority or any
other Person, other than (A) those which have been or will be, prior to the
initial Closing Date, obtained or made and copies of which are required to be
delivered to the Agent pursuant to Section 3.1, each of which is or on the
initial Closing Date will be in full force and effect and (B) the consent of,
authorization by, or approval of, any lessor of the Borrower or any of its
Subsidiaries which, if not obtained, would, individually or in the aggregate,
have no reasonable likelihood of having a Material Adverse Effect and the
absence of which would not, individually or in the aggregate, affect the
Borrower's or any of its Subsidiaries' ability to consummate the transactions
contemplated by the Loan Documents.
(b) This Agreement and each of the other Loan Documents have been
duly executed and delivered by each Loan Party thereto. This Agreement and each
of the other Loan Documents are the legal, valid and binding obligations of each
Loan Party thereto, enforceable against it in accordance with its terms, except
that (i) such enforceability may be subject to bankruptcy, insolvency,
<PAGE>
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights and (ii) the remedy of specific performance and
injunction and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
4.3. Taxes. The Borrower and its Subsidiaries have (a) made or
filed all federal and state income and all other material tax returns, reports
and declarations required by any jurisdiction to which any of them is subject or
properly filed for and received extensions with respect thereto which are still
in full force and effect and which have been fully complied with in all material
respects, (b) paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith by appropriate proceedings and for which
adequate reserves, to the extent required by GAAP, have been established and (c)
set aside on their books provisions reasonably adequate for the payment of all
estimated taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Borrower know of no basis for any such claim.
4.4. Full Disclosure. No written statement prepared or furnished
by or on behalf of any Loan Party or any of its Affiliates in connection with
any of the Loan Documents or the consummation of the transactions contemplated
thereby, and no financial statement delivered pursuant hereto or thereto,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading. All facts known to the Borrower which are material to an
understanding of the financial condition, business, properties or prospects of
the Borrower and its Subsidiaries taken as one enterprise have been disclosed to
the Lenders.
4.5. Financial Matters. (a) The balance sheet of the Borrower as
at the initial Closing Date, certified by the chief financial officer of the
Borrower, copies of which have been furnished to the Agent, fairly present the
financial condition of the Borrower as at such date all in conformity with GAAP.
<PAGE>
(b) The Borrower does not have at the initial Closing Date any
material obligation, contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitment which is not reflected on the
balance sheet at such date referred to in subsection (a) above or in the notes
thereto.
4.6. Litigation. Except as disclosed on Schedule 4.6, there are
no pending or, to the knowledge of the Borrower, threatened actions,
investigations or proceedings affecting the Borrower or any of its Subsidiaries
before any Governmental Authority or arbitrator. To the knowledge of the
Borrower, the performance of any action by any Loan Party required or
contemplated by any of the Loan Documents is not restrained or enjoined (either
temporarily, preliminary or permanently), and no material adverse condition has
been imposed by any Governmental Authority or arbitrator upon any of the
foregoing transactions.
4.7. Use of Proceeds; Margin Regulations. (a) The proceeds of the
Revolving Credit Loans shall be used by the Borrower solely as follows: (i) for
Acquisitions permitted by Section 6.5(e) and other Investments permitted by
Section 6.5(a), (ii) for the payment of interest, transaction costs, fees and
expenses related to the execution, delivery and performance of the Loan
Documents and (iii) for other general corporate purposes not otherwise
prohibited by this Agreement or the other Loan Documents (including, with the
consent of the Majority Lenders, the acquisition of interests in one or more
joint venture arrangements).
(b) No proceeds of any Revolving Credit Borrowing will be used to
acquire any equity security of a class which is registered pursuant to Section
12 of the Exchange Act.
(c) The Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation U issued by the Board of Governors of the Federal Reserve
System), and no proceeds of any Borrowing will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock, in contravention of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
<PAGE>
4.8. Capitalization; Subsidiaries. The authorized Stock of the
Borrower consists of 1,000 shares of Common Stock, $1.00 par value, of which
1,000 shares are issued and outstanding. All of the outstanding capital stock of
the Borrower has been validly issued, is fully paid and non-assessable and is
owned by KMG free and clear of all Liens, other than Liens under the KMG Pledge
Agreement. There are no agreements or understandings with respect to the voting
of any Stock of the Borrower or, to the best knowledge of the Borrower, any
agreement restricting the transfer or hypothecation of any such shares.
(b) As of the date hereof, the Borrower has no Subsidiaries. As
of the date hereof, the Borrower does not own or hold, directly or indirectly,
any capital stock or equity security of, or any equity interest in, any Person.
4.9. ERISA. (a) None of the Borrower or any of its Subsidiaries
(at any time after the Acquisition of such Subsidiary by the Borrower) has
maintained, contributed to or incurred any obligation to contribute to any Plan.
4.10. Liens. There are no Liens of any nature whatsoever on any
properties of the Borrower and its Subsidiaries other than those permitted by
Section 6.1. The Liens granted by the Loan Parties to the Agent on behalf and
for the ratable benefit of the Secured Parties pursuant to the Collateral
Documents are fully perfected first priority Liens in and to the Collateral
described therein, subject to no other Liens.
4.11. No Burdensome Restrictions; No Defaults. (a) No Loan Party
is (i) a party to any Contractual Obligation which has a reasonable likelihood
of having a Material Adverse Effect or the performance of which by any thereof,
either unconditionally or upon the happening of an event, will result in the
creation of a Lien on the property or assets of any thereof or (ii) subject to
any charter or corporate restriction which has a reasonable likelihood of having
a Material Adverse Effect.
(b) No Loan Party nor, to the knowledge of the Borrower, any
other party is in default under or with respect to any Contractual Obligation
which has a reasonable likelihood of having a Material Adverse Effect.
<PAGE>
(c) No Event of Default or Default has occurred and is
continuing.
(d) There is no Requirement of Law the compliance with which by
any Loan Party would have a reasonable likelihood of having a Material Adverse
Effect.
(e) None of the Borrower's Subsidiaries is subject to any
restriction or limitation (other than Requirements of Law) on its ability to
declare or make any dividend payment or other distribution on account of any
shares of any class of its Stock or on its ability to purchase, redeem, defease,
or otherwise acquire for value or make any payment in respect of any such shares
or any shareholder rights, except pursuant to the Loan Documents.
4.12. No Other Ventures. On the date hereof, no Loan Party (other
than KMG) is engaged in any joint venture or partnership with any other Person.
4.13. Investment Company Act. The Borrower is not an "investment
company", as such term is defined in the Investment Company Act of 1940, as
amended. The making of the Revolving Credit Loans by the Lenders, the
application of the proceeds and repayment thereof by the Borrower and the
consummation of the transactions contemplated by the Loan Documents will not
violate any provision of such Act or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder.
4.14. Insurance. All policies of insurance of any kind or nature
owned by or issued to the Borrower or any of its Subsidiaries, including,
without limitation, policies of life, fire, theft, product liability, public
liability, property damage, other casualty, employee fidelity, workers'
compensation, employee health and welfare, title, property and liability
insurance, are in full force and effect and are of a nature and provide such
coverage which the Borrower believes is sufficient and which is customarily
carried by companies of the size and character of the Borrower and its
Subsidiaries.
<PAGE>
4.15. Labor Matters. (a) There are no strikes, work stoppages,
slow downs, lockouts, other labor disputes or grievances pending against the
Borrower or any of its Subsidiaries.
(b) There are no arbitrations, unfair labor practice charges or
grievances pending or in process or threatened by or on behalf of any employee
or group of employees of the Borrower or any of its Subsidiaries, and no written
complaints received by the Borrower or any of its Subsidiaries, or threatened,
or, with respect to unresolved complaints, on file with any Federal, state or
local governmental agency, alleging employment discrimination by the Borrower or
any of its Subsidiaries which has a reasonable likelihood of having a Material
Adverse Effect. Neither the Borrower nor any of its Subsidiaries is a party to
any collective bargaining agreement.
4.16. Environmental Protection. Except as disclosed on Schedule
4.16, (i) none of the facilities of the Borrower nor those of any of its
Subsidiaries or of any tenants of the Borrower or any of its Subsidiaries
contain any asbestos-containing materials, (ii) neither the Borrower nor any of
its Subsidiaries nor, to the knowledge of the Borrower, any of such tenants is
subject to any order or directive of any Governmental Authority relating to
asbestos-containing materials, and (iii) the operations of the Borrower and each
of its Subsidiaries and each of such tenants comply with all applicable
Requirements of Law relating to environmental matters, except for such
non-compliance that, individually or in the aggregate, have no reasonable
likelihood of having a Material Adverse Effect.
4.17. Real Estate. Neither the Borrower nor any of its
Subsidiaries owns any real property. The Borrower and each of its Subsidiaries
hold valid, binding and enforceable leasehold interests in all properties and
assets, if any, purported to be leased by the Borrower or such Subsidiary
(except to the extent that the failure of the Borrower to hold any such
leasehold interests would, individually or in the aggregate, have no reasonable
likelihood of having a Material Adverse Effect). Each of the Borrower and its
Subsidiaries has received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar agreements, bills of sale and other
documents concerning property, if any, leased by the Borrower or any of its
Subsidiaries, except for such instruments the failure to obtain would,
individually or in the aggregate, have no reasonable likelihood of having a
Material Adverse Effect.
<PAGE>
(b) None of the Borrower or any of its Subsidiaries owns or
holds, or is obligated under or a party to, any option, right of first refusal
or other contractual right to purchase, acquire, sell, assign or dispose of any
real property leased by the Borrower or any of its Subsidiaries.
(c) The properties operated or leased by the Borrower or any of
its Subsidiaries, if any, are in good repair and operating condition (reasonable
wear and tear excepted) and suitable for the uses presently made thereof.
(d) Neither the Borrower nor any of its Subsidiaries has received
any notice of any pending, threatened or contemplated condemnation proceeding
affecting any real property, if any, leased by the Borrower or any of its
Subsidiaries or any material part thereof.
4.18. Certain Indebtedness. Except as disclosed in the financial
statements referred to in Section 4.5, there is no Indebtedness of the Borrower
or any of its Subsidiaries which is not permitted by Section 6.2.
4.19. Conduct of Business. The Borrower and its Subsidiaries are
principally engaged in only the business of representing radio and television
stations and cable systems in the sale of national spot advertising time and
programming, and other business reasonably related thereto.
4.20. Representation Agreements. Each Representation Agreement is
in full force and effect, and is enforceable in accordance with its terms,
except such Representation Agreements the termination or enforceability of
which, individually or in the aggregate, would have no reasonable likelihood of
having a Material Adverse Effect. No default or event of default, to the best of
the Borrower's knowledge, has occurred under any of the Representation
Agreements and no party to any of such Representation Agreements has given
notice of termination of, or notice of its intention to terminate, any such
agreement, except in the ordinary course of business and which individually or
in the aggregate, would have no reasonable likelihood of having a Material
Adverse Effect.
<PAGE>
4.21. Contract Management Agreements. The Borrower has delivered
to the Agent true and correct copies of all Contract Management Agreements. Each
of the Contract Management Agreements is in full force and effect and is
enforceable in accordance with its terms. No default or event of default has
occurred under any Contract Management Agreement and no party to any Contract
Management Agreement has given notice of termination of, or notice of its
intention to terminate, any such agreement, except in circumstances where no
Representation Agreements are then being managed by the Person party to such
Contract Management Agreement.
4.22. Force Majeure. Neither the business nor the properties of
the Borrower or any of its Subsidiaries are currently suffering from the effects
of any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or of the public enemy or
other casualty (whether or not covered by insurance), other than those the
consequences of which, individually or in the aggregate, would have no
reasonable likelihood of having a Material Adverse Effect.
ARTICLE V
AFFIRMATIVE COVENANTS
As long as any of the Obligations or any Revolving Credit
Commitments remain outstanding, the Borrower agrees with the Lenders and the
Agent that:
5.1. Compliance with Laws, Etc. The Borrower shall comply, and
shall cause each of its Subsidiaries to comply, in all material respects, with
all Requirements of Law, Contractual Obligations, commitments, instruments,
licenses, permits and franchises, including, without limitation, all Permits,
except for such non-compliance the consequence of which, individually or in the
aggregate, has no reasonable likelihood of having a Material Adverse Effect.
<PAGE>
5.2. Conduct of Business. The Borrower shall (a) conduct, and
shall cause each of its Subsidiaries to conduct, its business in a regular
manner; (b) use, and cause each of its Subsidiaries to use, its reasonable
efforts, in the ordinary course and in a manner consistent with past practice,
to (i) preserve its business and the goodwill and business of the customers,
advertisers, suppliers and others having business relations with the Borrower or
any of its Subsidiaries, and (ii) keep available the services and goodwill of
its present employees generally; and (c) perform and observe, and cause each of
its Subsidiaries to perform and observe, all the terms, covenants and conditions
required to be performed and observed by the Borrower or such Subsidiary under
its Contractual Obligations (including, without limitation, to pay all rent and
other charges payable under any lease and all debts and other obligations as the
same become due) and do, and cause each of its Subsidiaries to do, all things
necessary to preserve and to keep unimpaired its rights under such Contractual
Obligations, in each case, except such failures the consequence of which have no
reasonable likelihood of having a Material Adverse Effect.
5.3. Payment of Taxes, Etc. The Borrower shall pay and discharge,
and shall cause each of its Subsidiaries to pay and discharge, before the same
shall become delinquent, all lawful claims, taxes, assessments and governmental
charges or levies, except where contested in good faith, by proper proceedings,
where adequate reserves therefor have been established on the books of the
Borrower or the appropriate Subsidiary in conformity with GAAP, and the
consequence of all such non-payments has no reasonable likelihood of having a
Material Adverse Effect.
5.4. Maintenance of Insurance. The Borrower shall maintain, and
shall cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar businesses and
owning or leasing similar properties in the same general areas in which the
Borrower or such Subsidiary operates and in any event, all insurance required by
any Collateral Document. All such insurance will name the Agent and the Lenders
as additional insured or loss payees, as the Agent shall determine. The Borrower
shall furnish to the Lenders through the Agent from time to time such
information as may be reasonably requested as to such insurance.
<PAGE>
5.5. Preservation of Corporate Existence, etc. The Borrower shall
preserve and maintain, and shall cause each of its Subsidiaries to preserve and
maintain, its corporate existence, rights (charter and statutory) and
franchises, except as permitted under Section 6.4.
5.6. Access. The Borrower shall, at any reasonable time and from
time to time, and upon reasonable notice to the Borrower, unless a Default or an
Event of Default has occurred and is continuing, in which case no notice shall
be necessary, permit (a) the Agent or any of the Lenders, or any agents or
representatives thereof, to (i) examine and make copies of and abstracts from
the records and books of account of the Borrower and each of its Subsidiaries,
(ii) visit the properties of the Borrower and each of its Subsidiaries and (iii)
discuss the affairs, finances and accounts of the Borrower and each of its
Subsidiaries with any of their respective executive officers or directors and
(b) the Agent, individually or on behalf of any Lender, to communicate directly
with the Borrower's independent certified public accountants. The Borrower shall
authorize its independent certified public accountants to disclose to the Agent,
individually or on behalf of any Lender, any and all financial statements and
other information of any kind relating to the Borrower or any of its
Subsidiaries, including, without limitation, copies of any management letters.
5.7. Keeping of Books. The Borrower shall keep, and shall cause
each of its Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made of all financial transactions and the
assets and business of the Borrower and each such Subsidiary.
5.8. Maintenance of Properties, Etc. The Borrower shall maintain
and preserve, and shall cause each of its Subsidiaries to maintain and preserve,
(i) all of its properties which are used or useful or necessary in the conduct
of its business in good working order and condition and (ii) all rights,
permits, licenses, approvals and privileges (including, without limitation, all
Permits) which are used or useful or necessary in the conduct of its business.
5.9. Performance and Compliance with Other Covenants. The
Borrower shall perform, observe and comply with, and shall cause each of its
Subsidiaries to perform, observe and comply with, each of the covenants and
agreements set forth in each material agreement to which it is a party.
<PAGE>
5.10. Application of Proceeds. The Borrower shall use the entire
amount of the proceeds of the Revolving Credit Loans as provided in Section
4.7(a).
5.11. Financial Statements. The Borrower shall furnish to the
Lenders:
(a) as soon as available and in any event within 60 days after
the end of the first three Fiscal Quarters of each Fiscal Year, a consolidated
balance sheet of the Borrower and its Subsidiaries as of the end of such quarter
and consolidated statements of income, retained earnings, cash flow and
operations of the Borrower and its Subsidiaries for the period commencing at the
end of the previous Fiscal Year and ending with the end of such Fiscal Quarter,
all prepared in conformity with GAAP and certified by the chief financial
officer of the Borrower as fairly presenting the financial condition and results
of operations of the Borrower and its Subsidiaries at such date and for such
period, together with a certificate of said officer stating that no Default or
Event of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which the Borrower proposes to take with respect thereto;
(b) as soon as available and in any event within 120 days after
the end of each Fiscal Year, a consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such year and consolidated statements of
income, retained earnings, cash flow and operations of the Borrower and its
Subsidiaries for such Fiscal Year all prepared in conformity with GAAP, and
certified by the chief financial officer of the Borrower as fairly representing
the financial condition of the Borrower and its Subsidiaries at the end of and
for such Fiscal Year, together with a certificate of said officer stating that
no Default or Event of Default has occurred and is continuing or, if a Default
or any Event of Default has occurred and is continuing, a statement as to the
nature thereof and the action which the Borrower proposes to take with respect
thereto;
<PAGE>
(c) simultaneously with the delivery of the financial statements
referred to in this Section 5.11, a report in form, scope and detail reasonably
satisfactory to the Agent, as to the Representation Agreements terminated
(including a statement of payments received in connection therewith) and
Representation Agreements entered into with new clients (including a statement
of payments made in connection therewith), by the Borrower or any of its
Subsidiaries during the most recently completed Fiscal Quarter and for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such Fiscal Quarter, certified by the chief financial officer of the
Borrower;
(d) in the event the Borrower makes a change in accounting
treatment or reporting practices, simultaneously with the delivery of the
financial statements referred to in paragraphs (a) and (b) of this Section 5.11;
and
(e) promptly after the same are received by the Borrower, a copy
of each management letter provided to the Borrower by its independent certified
public accountants which refers in whole or in part to any inadequacy, defect,
problem, qualification or other lack of fully satisfactory accounting controls
utilized by the Borrower or any of its Subsidiaries.
5.12. Reporting Requirements. The Borrower shall furnish to the
Lenders:
(a) (i) to the extent practicable, prior to any Asset Sale or any
sale of any Representation Agreement anticipated to generate in excess of
$100,000 in gross proceeds, a notice (A) describing the assets being sold and
(B) stating the estimated gross proceeds in respect of such sale, and (ii )
prior to any purchase of any Representation Agreement for aggregate
consideration in excess of $100,000, a notice describing such Representation
Agreement and the consideration paid therefor;
<PAGE>
(b) as soon as available and in any event within 45 days after
the end of each Fiscal Year, an annual budget of the Borrower and its
Subsidiaries prepared on a quarterly basis for the succeeding Fiscal Year (other
than for Capital Expenditures and Representation Agreement Acquisition Payments
which need to be on an annual basis only), displaying forecasted revenues, net
income and EBITDA, Capital Expenditures and the difference between
Representation Agreement Termination Payments and Representation Agreement
Acquisition Payments, and, within ten days of the preparation thereof, any
revisions thereto;
(c) promptly after the commencement thereof, notice of any
action, suit or proceeding before any domestic or foreign Governmental Authority
or arbitrator affecting any Loan Party, except for such actions, suits or
proceedings, which if adversely determined, would, in the aggregate, have no
reasonable likelihood of having a Material Adverse Effect;
(d) promptly and in any event (i) within two Business Days after
the Borrower becomes aware of the existence of any Event of Default and (ii)
within five Business Days after the Borrower becomes aware of the existence of
(A) any Default, (B) any termination, breach or non-performance of, or any
default under, any Contractual Obligation which is material to the business,
prospects, operations or financial condition of the Borrower and its
Subsidiaries taken as one enterprise, or (C) any Material Adverse Change, or any
event, development or other circumstance which has a reasonable likelihood of
resulting in a Material Adverse Change, telephonic or telegraphic notice in
reasonable detail specifying the nature of such Event of Default, Default,
termination, breach, default, Material Adverse Change, event, circumstance,
development or information, including, without limitation, the anticipated
effect thereof, which notice shall be promptly confirmed in writing within five
days;
(e) upon the request of any Lender through the Agent, copies of
all Federal, state and local tax returns and reports filed by the Borrower or
any of its Subsidiaries in respect of taxes measured by income (excluding sales,
use and like taxes);
<PAGE>
(f) promptly upon execution thereof, copies of any Contract
Management Agreements;
(g) promptly after any change in accounting treatment or
reporting practices, notice disclosing the nature of the change and the reasons
therefor; and
(h) such other information respecting the business, properties or
the condition or operations, financial or otherwise, of the Borrower or any of
its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.
5.13. Leases. The Borrower shall provide the Agent with a copy of
each Lease to which the Borrower or any of its Subsidiaries is a party as
lessor. The Borrower shall, and shall cause each of its Subsidiaries to, (i)
comply, in all material respects with all of its obligations under each Lease
now or hereafter held by the Borrower or such Subsidiary, as the case may be,
except for such non-compliances, individually or in the aggregate, that have no
reasonable likelihood of having a Material Adverse Effect, (ii) provide the
Agent with a copy of each notice of default under any Lease received by the
Borrower or any of its Subsidiaries immediately upon receipt thereof and deliver
to the Agent a copy of each notice of default sent by the Borrower or any of its
Subsidiaries under any Lease simultaneously with its delivery of such notice
under such Lease, (iii) notify the Agent at least 14 days prior to the date the
Borrower or any of its Subsidiaries takes possession of, or becomes liable
under, any new Lease, whichever is earlier, and (iv) upon the Agent's request,
promptly execute, deliver and record a first priority leasehold mortgage in
favor of the Agent for the ratable benefit of the Secured Parties should the
Borrower or any of its Subsidiaries hereafter enter into a Lease, which Lease
shall expressly permit the mortgaging thereof to the Agent, contain
non-disturbance provisions satisfactory to the Agent and such other customary
lender protections as may be required by the Agent, together with, at the
Borrower's sole cost and expense, a title insurance policy in an amount
reasonably requested by the Agent and a current ALTA survey and surveyor's
certificate, in each case, in form and substance satisfactory to the Agent.
<PAGE>
5.14. New Real Estate. If, at any time, the Borrower or any of
its Subsidiaries acquires any real property, the Borrower shall, or shall cause
such Subsidiary to, promptly execute, deliver and record a first priority
mortgage in favor of the Agent for the ratable benefit of the Secured Parties
covering such real property (subordinate to no other mortgages other than such
permitted mortgages as are necessary to allow the Borrower or such Subsidiary to
acquire such real property and to such Liens as are permitted hereunder), in
form and substance satisfactory to the Agent, and provide the Agent, at the
Borrower's sole cost and expense, with a title insurance policy covering such
real property in an amount equal to the purchase price of such real property,
and a current ALTA survey thereof, and a surveyor's certificate, in each case,
in form and substance satisfactory to the Agent.
5.15. Broker's Fee. The Borrower shall indemnify the Agent and
the Lenders for, and hold the Agent and the Lenders harmless from and against,
any and all claims for brokerage commissions, fees and other compensation made
against the Agent or any of the Lenders for any broker, finder or consultant
with respect to any agreement, arrangement or understanding made by or on behalf
of any Loan Party in connection with the transactions contemplated by this
Agreement.
5.16. Fiscal Year. The Borrower shall maintain as its Fiscal Year
the twelve month period ending on December 31 of each year.
5.17. Separate Corporate Existence. The Borrower will and will
cause each of its Subsidiaries to take all reasonable steps to maintain its
identity as a separate legal entity and to make it apparent to third parties
that it is a corporation with properties and liabilities distinct from those of
any Affiliate (other than the Borrower and its Subsidiaries). Without limiting
the generality of the foregoing, the Borrower will and will cause each of its
Subsidiaries to use its best efforts to: (a) maintain its books and records
complete and separate from those of any Affiliate (other than the Borrower and
its Subsidiaries); (b) not maintain bank accounts or other depository accounts
to which any Affiliate is an account party, into which any Affiliate (other than
the Borrower and its Subsidiaries) makes deposits or from which any Affiliate
<PAGE>
(other than the Borrower and its Subsidiaries) has the power to make
withdrawals; and (c) refrain from filing or otherwise initiating or supporting
the filing of a motion in any bankruptcy or insolvency proceeding to
substantively consolidate the Borrower with any Affiliate of the Borrower.
5.18. Identification of Subsidiaries; Provision of Collateral. If
and whenever any Subsidiary of the Borrower shall be created or acquired by the
Borrower or any of its Subsidiaries at any time after the date hereof, the
Borrower will:
(a) furnish promptly to the Agent a written notice identifying
such Subsidiary and setting forth with respect to such Subsidiary information
reasonably requested by the Agent;
(b) promptly pledge or cause to be pledged to the Agent, upon the
terms contained in the Borrower Pledge Agreement or any other applicable Pledge
Agreement, all of the issued and outstanding shares of the capital stock of such
Subsidiary; and
(c) promptly cause the new Subsidiary to execute and deliver a
counterpart of, and to become party to, the Subsidiary Guaranty, a Security
Agreement substantially in the form of the Borrower Security Agreement and a
Pledge Agreement, substantially in the form of the Borrower Pledge Agreement.
ARTICLE VI
NEGATIVE COVENANTS
As long as any of the Obligations or Revolving Credit Commitments
remain outstanding, the Borrower agrees with the Lenders and the Agent that:
<PAGE>
6.1. Liens, Etc. The Borrower shall not create or suffer to
exist, and shall not permit any of its Subsidiaries to create or suffer to
exist, any Lien upon or with respect to any of its properties, whether now owned
or hereafter acquired, or assign, or permit any of its Subsidiaries to assign
for collateral purposes, any right to receive income, except:
(a) Purchase money Liens or purchase money security interests
upon or in any property acquired or held by the Borrower or any of its
Subsidiaries in the ordinary course of business to secure the purchase price of
such property or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such property, and Liens existing on such property
at the time of its acquisition (other than any such Lien created in
contemplation of such acquisition); provided, however, that the aggregate
principal amount of the Indebtedness secured by the Liens referred to in this
clause (a) shall not exceed $500,000 at any time outstanding;
(b) Liens created pursuant to the Loan Documents and Liens
securing Indebtedness permitted by Section 6.2(v);
(c) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons incurred by
the Borrower or any of its Subsidiaries in the ordinary course of business which
secure its obligations to such Person; provided, however, that (i) the Borrower
or such Subsidiary is not in default with respect to such payment obligation to
such Person or is in good faith and by appropriate proceedings diligently
contesting such obligation and adequate provision is made for the payment
thereof, and (ii) all such Liens, in the aggregate, would have no reasonable
likelihood of having a Material Adverse Effect;
(d) Liens securing taxes, assessments or governmental charges or
levies; provided, however, that (i) neither the Borrower nor any of its
Subsidiaries is in default in respect of any payment obligation with respect
thereto unless the Borrower or such Subsidiary is in good faith and by
appropriate proceedings diligently contesting such obligation and adequate
provision is made for the payment thereof and (ii) all such Liens, in the
aggregate, would have no reasonable likelihood of having a Material Adverse
Effect;
<PAGE>
(e) Liens incurred or pledges and deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, old-age pensions and other social security benefits;
(f) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, letters of credit, surety, security, performance and appeal bonds
and other obligations of like nature, incurred as an incident to and in the
ordinary course of business, and judgment liens; provided, however, that all
such Liens have no reasonable likelihood of having a Material Adverse Effect;
and provided, further, that any Liens securing letters of credit, surety,
security, performance and appeal bonds do not secure more than $500,000 in the
aggregate at any one time;
(g) Zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities incident
thereto which do not in the aggregate materially detract from the value or use
of the property or assets of the Borrower or any of its Subsidiaries, or which
with respect to all other properties do not in the aggregate materially detract
from the value or use of the property or assets of the Borrower and its
Subsidiaries taken as a whole, or impair, in any material manner, the use of
such property for the purposes for which such property is held by the Borrower
or any such Subsidiary;
(h) Liens to secure Capitalized Lease Obligations if the
incurrence of such Capitalized Lease Obligations is permitted by Section 6.2(v);
provided that (A) any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the cost
(including, without limitation, the cost of construction) of the property
subject thereto, (B) the principal amount of the Indebtedness secured by such
Lien does not exceed 100% of such cost and (C) such Lien does not extend to or
cover any other property other than such item of property and any improvements
on such item; and
<PAGE>
(i) Liens securing the renewal, extension or refunding of any
Indebtedness or other obligations secured by any Lien permitted by Section
6.1(a) without any increase in the amount secured thereby or in the assets
subject to such Liens.
6.2. Indebtedness. The Borrower shall not create or suffer to
exist, or permit any of its Subsidiaries to create or suffer to exist, any
Indebtedness, except:
(i) the Obligations;
(ii) liabilities in respect of Contingent Obligations to the
extent such Contingent Obligations are permitted under Section 6.9;
(iii) Indebtedness owing to any wholly-owned Subsidiary of the
Borrower by the Borrower and Indebtedness owing to the Borrower or any other
Subsidiary of the Borrower by any Subsidiary of the Borrower;
(iv) subject to clause (vi) below, Indebtedness secured by Liens
permitted under Section 6.1(a);
(v) Indebtedness of the Borrower or any of its Subsidiaries under
Capitalized Lease Obligations; provided, however, that the aggregate amount of
Indebtedness incurred under clause (iv) above and under this clause (v) shall
not exceed $500,000 at any time outstanding;
(vi) Indebtedness of the Borrower or any of its Subsidiaries
consisting of Contingent Obligations secured by Liens permitted under Section
6.1(e) and (f); provided, however, that the aggregate amount of all such
Indebtedness shall not exceed $500,000 at any time outstanding; and
(vii) Indebtedness arising under the Management Services
Contract.
<PAGE>
6.3. Restricted Payments. The Borrower shall not, and shall not
permit any of its Subsidiaries to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account or in respect of, or on account of the redemption, repurchase or other
acquisition of, any of its Stock or Stock Equivalents, except cash dividends
paid or distributions made by any Subsidiary of the Borrower on its Common Stock
to the Borrower or to any other Subsidiary of the Borrower.
6.4. Mergers, Stock Issuances, Sale of Assets, Etc. (a) The
Borrower shall not, and shall not permit any of its Subsidiaries to, (i) merge
with any Person, (ii) consolidate with any Person, or (iii) enter into any joint
venture or partnership with any Person.
(b) The Borrower shall not and shall not permit any of its
Subsidiaries to issue or transfer any Stock or Stock Equivalents, other than the
issuance of Stock of any Subsidiary of the Borrower by such Subsidiary to the
Borrower or to another Subsidiary of the Borrower.
(c) The Borrower shall not, and shall not permit any of its
Subsidiaries to, sell, convey, transfer, lease or otherwise dispose of any of
its assets or any interest therein to any Person, or permit any other Person to
acquire any interest in any of the assets of the Borrower or any such
Subsidiary, except the sale of Representation Agreements in the ordinary course
of business for cash in an amount not less than fair market value (determined in
accordance with established industry standards), or of used equipment which has
become obsolete or is replaced in the ordinary course of business, or of other
immaterial assets which are no longer useful in the ordinary course of business
of the Borrower or any such Subsidiary.
6.5. Investments. The Borrower shall not, directly or indirectly,
make or maintain, or permit any of its Subsidiaries to, directly or indirectly,
make or maintain, any loan or advance to any Person or own, purchase or
otherwise acquire, or permit any of its Subsidiaries to own, purchase or
otherwise acquire, any Stock or Stock Equivalents, other equity interests,
obligations or other securities of, or any assets of or make or maintain, or
permit any of its Subsidiaries to make or maintain, any capital contribution to,
or otherwise invest in, any Person (any such transaction being an "Investment"),
except:
<PAGE>
(a) Investments constituting the acquisition of Representation
Agreements by the Borrower or any of its Subsidiaries in the ordinary course of
business, and Indebtedness owed to the Borrower or any of its Subsidiaries
arising out of the termination of Representation Agreements;
(b) Investments consisting of intercompany loans and advances by
(i) any Subsidiary of the Borrower in any other Subsidiary of the Borrower or
(ii) the Borrower in any Subsidiary of the Borrower;
(c) Investments by the Borrower in the common stock of any
Subsidiary of the Borrower, and by any Subsidiary of the Borrower in the common
stock of any other Subsidiary of the Borrower;
(d) Investments consisting of loans and advances to officers and
employees for moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $100,000 in the aggregate at any time
outstanding;
(e) Investments constituting Acquisitions, provided that each of
the following conditions shall be satisfied on and as of the date of such
Acquisition:
(i) the total consideration paid by the Borrower or any
Subsidiary of the Borrower with respect to such Acquisition consists solely of
cash in an amount not to exceed $15,000,000, all of which shall be payable on
the closing date of such Acquisition;
(ii) the primary business of the acquiree (or of the business or
division acquired in such Acquisition) shall be the business of representing
radio and television stations or cable systems in the sale of national spot
advertising time and programming and other businesses reasonably related
thereto;
<PAGE>
(iii) the Borrower shall have established to the reasonable
satisfaction of the Agent that the acquiree (or the business or division
acquired in such Acquisition) shall have had positive EBITDA for the period of
four fiscal quarters of the acquiree most recently ended; and
(iv) no Default or Event of Default shall be continuing
immediately prior to the date of such Acquisition or shall result therefrom;
(f) investments not permitted by any other clause of this Section
6.5, provided that the aggregate amount of all such Investments after the date
of this Agreement shall not exceed $50,000; and
(g) Investments in Cash Equivalents.
6.6. Change in Nature of Business. The Borrower shall not,
directly or indirectly, make, or permit any of its Subsidiaries to make, any
material change in the nature or conduct of its business contemplated at the
date hereof.
6.7. Plans. None of the Borrower or any of its Subsidiaries will
maintain, contribute to, or enter into any comitment to contribute to any Plan.
6.8. Modification of Material Agreements; Contract Management
Agreements. The Borrower shall not, and shall not permit any of its Subsidiaries
to, (a) alter, amend, modify, rescind, terminate or waive any of its rights
under, or permit any breach or event of default to exist on the part of the
Borrower or any of its Subsidiaries under, any of its Contract Management
Agreements or other material Contractual Obligations, except for immaterial
alterations, amendments or modifications which are not otherwise prohibited by
this Agreement, or (b) enter into any agreement or arrangement with any Person
for the management of any Representation Agreements to which the Borrower or any
such Subsidiary is a party other than Contract Management Agreements.
<PAGE>
6.9. Contingent Obligations. The Borrower shall not, and shall
not permit any of its Subsidiaries to, incur, assume, endorse, be or become
liable for, or guarantee, directly or indirectly, any Contingent Obligation,
except for:
(i) guarantees by the Borrower or any of its Subsidiaries of
Indebtedness of the Borrower or any of its Subsidiaries, to the extent such
underlying Indebtedness is permitted hereunder; and
(ii) Contingent Obligations arising under the Management Services
Contract; and
(iii) indemnities entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business of the Borrower and its
Subsidiaries in connection with Representation Agreement Acquisition Payments.
6.10. Transactions with Affiliates. The Borrower shall not, and
shall not permit any of its Subsidiaries to, do any of the following: (i) make
any Investment in any Affiliate which is not a wholly-owned Subsidiary of the
Borrower; (ii) transfer, sell, lease, assign or otherwise dispose of any assets
to any Affiliate which is not a wholly-owned Subsidiary of the Borrower, other
than the sale of Representation Agreements to Katz Media or any of its
Subsidiaries for cash in an amount equal to not less than fair market value
(determined in accordance with established industry standards); (iii) merge into
or consolidate with or purchase or acquire assets from any Affiliate which is
not a wholly-owned Subsidiary, other than the purchase of Representation
Agreements from Katz Media or any of its Subsidiaries for fair market value
(determined in accordance with industry standards); (iv) repay any Indebtedness
to any such Affiliate which is not a wholly-owned Subsidiary; or (v) enter into
any other transaction directly or indirectly with or for the benefit of any such
Affiliate which is not a wholly-owned Subsidiary (including, without limitation,
guaranties and assumptions of obligations of any such Affiliate), except, in
each case, for (A) any transaction required by this Agreement, any of the Loan
Documents or the Contract Management Agreements, (B) customary compensation
arrangements with officers and directors of the Borrower or any of its
<PAGE>
Subsidiaries, (C) subject to Section 5.18, participation by the Borrower or any
of its Subsidiaries in the cash management system of Katz Media and its
Subsidiaries, and (D) other transactions not otherwise permitted under this
Section 6.10, on terms that are no less favorable to the Borrower or any of its
Subsidiaries than would be obtained in an arm's length transaction at the time
from Persons who are not Affiliates, provided that the aggregate value of all
such transactions under this clause (D) shall not exceed $500,000.
6.11. Cancellation of Indebtedness. The Borrower shall not, and
shall not permit any of its Subsidiaries to, cancel any claim or Indebtedness
owed to it except for cash equal to the amount of such claim or Indebtedness or,
in the case of claims arising under Representation Agreements, in the ordinary
course of business.
6.12. Limitation on Capital Expenditures. The Borrower will not,
and will not cause or permit any of its Subsidiaries to, make or commit to make
any Capital Expenditures in excess of $500,000 in the aggregate after the date
of this Agreement.
6.13. Limitation on Operating Expenses. The Borrower will not,
and will not cause or permit any of its Subsidiaries to incur or permit to
accrue or pay any Operating Expenses other than (a) accrued fees payable under
the Contract Management Agreements or the Loan Documents, and (b) other
Operating Expenses that are necessary for the conduct of the business of the
Borrower and its Subsidiaries in the ordinary course of business and do not
exceed $150,000 in the aggregate after the date of this Agreement.
6.14. Capital Structure; New Subsidiaries. The Borrower shall
not, and shall not permit any of its Subsidiaries to, make any change in its
capital structure or amend its certificate of incorporation or by-laws.
6.15. Adverse Transactions. The Borrower shall not enter into or
be a party to, or permit any of its Subsidiaries to enter into or be a party to,
any transaction the performance of which in the future would be inconsistent
with or has a reasonable likelihood of resulting in a breach of any covenant
contained herein or give rise to a Default or Event of Default.
<PAGE>
ARTICLE VII
EVENTS OF DEFAULT
7.1. Events of Default. Each of the following events shall be an
Event of Default:
(a) The Borrower shall (i) fail to pay any principal (including,
without limitation, mandatory prepayments of principal) of any Revolving Credit
Loan when the same becomes due and payable; or (ii) fail to pay any interest on
any Revolving Credit Loan or any fee or any other amount due hereunder or under
the other Loan Documents or any of the other Obligations within five days after
the same shall become due and payable; or
(b) Any representation or warranty made or deemed made by any
Loan Party in any Loan Document or by or on behalf of any Loan Party in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) Any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article VI or in any Collateral Document, or
(ii) any other term, covenant or agreement contained in this Agreement or in any
other Loan Document if such failure under this clause (ii) shall remain
unremedied for 30 days after the earlier of the date on which (A) a Responsible
Officer of the Borrower becomes aware that such an event is a Default or (B)
written notice thereof shall have been given to the Borrower by the Agent or any
Lender; or
(d) KMG, KCC or any of its Subsidiaries or the Borrower or any of
its subsidiaries shall fail to make any payment in respect of principal of or
premium or interest on any Indebtedness of such Person (excluding the
Obligations) in the principal amount in excess of $1,000,000, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
<PAGE>
acceleration, demand or otherwise) after expiration of any applicable grace
period; or any other event shall occur or condition shall exist under any
agreement or instrument relating to any such Indebtedness, if the effect of such
event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or any such Indebtedness shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), prior to the stated maturity thereof; or
(e) KMG or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors, or any proceeding shall be instituted by or against KMG or any of its
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief, or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a custodian, receiver, trustee or other
similar official for it or for any substantial part of its property, and, in the
case of any such proceedings instituted against KMG or any of its Subsidiaries
(but not instituted by it), either such proceedings shall remain undismissed or
unstayed for a period of 60 days or any of the actions sought in such
proceedings shall occur; or KMG or any of its Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$1,000,000 shall be rendered against KMG or KCC or any of its Subsidiaries or
the Borrower or any of its Subsidiaries and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order, or (ii)
there shall be any period of ten consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
<PAGE>
(g) Any provision of any Collateral Document or any Subsidiary
Guaranty shall for any reason cease to be valid and binding on any Loan Party,
or any Loan Party shall so state in writing, other than provisions which,
individually or in the aggregate, do not materially and adversely affect the
practical realization of the rights and benefits afforded to the Lenders and the
Agent by any such Collateral Document or Subsidiary Guaranty; or
(h) Any Collateral Document shall, for any reason, cease to
create a valid Lien on any of the Collateral purported to be covered thereby, or
such Lien shall cease to be a perfected and first priority Lien other than
solely as a result of action or inaction by the Agent or any Lender; or
(i) any default shall occur under any Management Services
Contract that is reasonably likely to have a Material Adverse Effect;
(j) any Change of Control shall occur; or
(k) (i) KMG shall cease to own and control, with the power to
vote, and free and clear of all Liens (other than Liens under the Collateral
Documents), all the outstanding Stock and Stock Equivalents of KCC and the
Borrower, or (ii) KCC shall cease to own and control, with the power to vote,
and free and clear of all Liens, all the outstanding Stock of Katz Media.
7.2. Remedies. If there shall occur and be continuing an Event of
Default, the Agent (i) shall at the request, or may with the consent, of the
Majority Lenders, by notice to the Borrower, declare the obligation of each
Lender to make Revolving Credit Loans to be terminated, whereupon the same shall
forthwith terminate and (ii) shall at the request, or may with the consent, of
the Majority Lenders, by notice to the Borrower, declare the Revolving Credit
Loans, the Revolving Credit Notes, all interest thereon and all other amounts
and Obligations payable under this Agreement to be forthwith due and payable,
whereupon the Revolving Credit Loans, the Revolving Credit Notes, all such
interest and all such amounts and all such Obligations shall become and be
<PAGE>
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that, upon the occurrence of any Event of Default specified
in subparagraph (e) above, (A) the obligation of each Lender to make Revolving
Credit Loans shall automatically be terminated and (B) the Revolving Credit
Loans, the Revolving Credit Notes, all such interest and all such amounts and
all Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
the Agent may exercise any remedies provided for by the Collateral Documents in
accordance with the terms thereof or any other remedies provided by applicable
law, including, without limitation, the power to foreclose on any leasehold
mortgage or mortgage executed and delivered by the Borrower or any of its
Subsidiaries upon the occurrence and during the continuance of an Event of
Default.
ARTICLE VIII
THE AGENT
8.1. Authorization and Action.
(a) Each Lender hereby appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers as are reasonably incidental
thereto. Without limitation of the foregoing, each Lender hereby authorizes the
Agent to execute and deliver, and to perform its obligations under, each of the
Loan Documents to which the Agent is a party, and to exercise all rights, powers
and remedies that the Agent may have under such Loan Documents.
<PAGE>
(b) As to any matters not expressly provided for by this
Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Revolving Credit Notes and the Obligations),
the Agent shall not be required to exercise any discretion or take any action,
but shall be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the instructions of the
Majority Lenders, and such instructions shall be binding upon all Lenders and
all holders of the Revolving Credit Notes; provided, however, that the Agent
shall not be required to take any action which the Agent in good faith believes
exposes the Agent to personal liability or which is contrary to this Agreement
or applicable law. The Agent agrees to give to each Lender prompt notice of each
notice given to it by any Loan Party pursuant to the terms of this Agreement or
the other Loan Documents.
8.2. Agent's Reliance, etc. None of the Agent, its Affiliates or
any of their respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with this Agreement or the other Loan Documents, except for its or their own
gross negligence, bad faith or willful misconduct. Without limitation of the
generality of the foregoing, the Agent (i) may treat the payee of any Revolving
Credit Note as the holder thereof until such Revolving Credit Note has been
assigned in accordance with Section 9.7; (ii) may consult with legal counsel
(including, without limitation, counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iii)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations made in or in
connection with this Agreement or the other Loan Documents; (iv) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement or the other Loan
Documents on the part of the Borrower or any other Loan Party or to inspect the
property (including the books and records) of the Borrower or any other Loan
Party; (v) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
<PAGE>
Agreement or the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (vi) shall incur no liability under or
in respect of this Agreement or any of the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telegram, cable or telex) believed by it to be genuine and signed or sent by the
proper party or parties.
8.3. FNBB and Affiliates. With respect to its Revolving Credit
Commitments and the Revolving Credit Loans made by it and each Revolving Credit
Note issued to it, FNBB shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include FNBB in its individual capacity. FNBB and its affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, the Borrower or any other Loan
Party and any Person who may do business with or own securities of the Borrower
or any other Loan Party, all as if FNBB were not the Agent and without any duty
to account therefor to the Lenders.
8.4. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender and
based on the financial statements referred to in Article IV and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Agent or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and other Loan Documents.
8.5. Indemnification. The Lenders agree to indemnify the Agent
and its Affiliates, directors, officers, employees, agents and advisors (to the
extent not reimbursed by the Borrower or other Loan Parties), ratably according
to the respective then outstanding principal amounts of the Revolving Credit
Notes then held by each of them (or if no Revolving Credit Notes are at the time
outstanding, ratably according to the respective amounts of the aggregate of the
<PAGE>
Lenders' Revolving Credit Commitments), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements (including, without limitation, fees and
disbursements of legal counsel) of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against, the Agent in any way relating to
or arising out of this Agreement or the other Loan Documents or any action taken
or omitted by the Agent under this Agreement or the other Loan Documents;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence,
bad faith or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including fees and disbursements of legal
counsel) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or the other Loan
Documents, to the extent that the Agent is not reimbursed for such expenses by
the Borrower or another Loan Party.
8.6. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Majority
Lenders, and shall have accepted such appointment, 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 shall be a commercial
bank organized under the laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. After any retiring Agent's resignation hereunder
<PAGE>
as Agent, the provisions of this Article VIII shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents.
ARTICLE IX
MISCELLANEOUS
9.1. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the other Loan Documents, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same shall be in
writing, approved by the Majority Lenders and signed by the Agent, and then (x)
any such amendment other than an amendment not affecting the rights or duties of
the Borrower under this Agreement or the other Loan Documents shall be effective
only if signed by the Borrower, and (y) any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders do any of the following: (i) increase the
Revolving Credit Commitments of the Lenders or subject the Lenders to any
additional obligations; (ii) reduce the principal of, or interest on, the
Revolving Credit Loans or any fees or other amounts payable hereunder; (iii)
postpone any date fixed for any scheduled payment of principal of, or interest
on, the Revolving Credit Loans or any fees or other amounts payable hereunder,
or reduce any interest rates or the amount of any fees payable hereunder; (iv)
change the number of Lenders which shall be required for the Lenders or any of
them to take any action hereunder; (v) release all or any substantial portion of
the Collateral or any Guarantor; or (vi) amend this Section 9.1; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement or the
other Loan Documents.
<PAGE>
9.2. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed by certified or registered
mail, return receipt requested, telegraphed, telexed, telecopied, cabled or
delivered by hand or overnight courier, if to the Borrower, at its address at
125 West 55th Street, New York, New York 10019, Attention: Chief Financial
Officer and Chief Operating Officer; if to any Lender, at its Domestic Lending
Office specified opposite its name on Schedule II; and if to the Agent, at its
address at 100 Federal Street, Boston, Massachusetts 02110; or, as to the
Borrower or the Agent, at such other address as shall be designated by such
party in a written notice to the other parties and, as to each other party, at
such other address as shall be designated by such party in a written notice to
the Borrower and the Agent. All such notices and communications shall, when
telegraphed, telexed, telecopied, cabled or delivered, be effective when
deposited in the mails, delivered to the telegraph company, confirmed by telex
answerback, telecopied with confirmation of receipt, delivered to the cable
company or delivered by hand to the addressee or its agent, respectively, and
when mailed as aforesaid, be effective three days after being deposited in the
mails, except that notices and communications to the Agent pursuant to Article
II or VIII shall not be effective until received by the Agent.
9.3. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Revolving Credit Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
9.4. Costs; Expenses; Indemnities. (a) The Borrower agrees to pay
on demand (i) all costs and out-of-pocket expenses of the Agent in connection
with the preparation, execution, delivery, administration, modification and
amendment of this Agreement, each of the other Loan Documents and each of the
other documents to be delivered hereunder and thereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel,
<PAGE>
accountants, appraisers, consultants or industry experts retained by the Agent
with respect thereto and of counsel to the Agent with respect to advising the
Agent as to its rights and responsibilities under this Agreement and the other
Loan Documents and the other documents to be delivered hereunder or thereunder,
including all costs and expenses incurred by the Agent in connection with the
syndication of the Revolving Credit arrangements contemplated by this Agreement
and (ii) all costs and out-of-pocket expenses of the Agent and the Lenders
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel, accountants, appraisers, consultants or industry experts retained by
the Agent or any Lender) in connection with the restructuring of, enforcement
(whether through negotiations, legal proceedings or otherwise) of, or protection
of legal rights under, this Agreement, the other Loan Documents and the other
documents to be delivered hereunder and thereunder.
(b) The Borrower agrees to defend, protect, indemnify and hold
harmless the Agent and each Lender and their respective Affiliates, and the
directors, officers, employees, agents, attorneys, consultants and advisors of
or to any of the foregoing (including, without limitation, those retained in
connection with the satisfaction or attempted satisfaction of any of the
conditions set forth herein) (each of the foregoing being an "Indemnitee") from
and against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including, without limitation, fees and disbursements of counsel
to any such Indemnitee) which may be imposed on, incurred by or asserted against
any such Indemnitee in connection with or arising out of any investigation,
litigation or proceeding, whether or not any such Indemnitee is a party thereto,
whether direct, indirect or consequential in any manner relating to or arising
out of this Agreement or any other Loan Document or any act, event or
transaction related or attendant thereto, including, without limitation, (i) the
making of any assignments of or participations in the Revolving Credit Loans and
the management of the Revolving Credit Loans or (ii) the use or intended use of
the proceeds of the Revolving Credit Loans or in connection with any
investigation of any potential matter covered hereby or by reason of Section
502(l) of ERISA (collectively, the "Indemnified Matters"); provided, however,
that the Borrower shall not have any obligation hereunder to an Indemnitee with
respect to an Indemnified Matter caused by or resulting from the gross
negligence, bad faith or willful misconduct of that Indemnitee, as determined by
<PAGE>
a court of competent jurisdiction in a final non-appealable judgment or order;
provided, further, that the Borrower shall have no obligation to any Indemnitee
hereunder with respect to any Indemnified Matter to the extent (i) such
Indemnified Matter arises out of a dispute among the Lenders or between the
Agent and the Lenders or (ii) the manner of the making of any assignment or
participation by such Indemnitee violates the registration provisions of the
Securities Act of 1933, as amended.
(c) If any Lender receives any payment of principal of, or is
subject to a conversion of, any Eurodollar Rate Loan other than on the last day
of an Interest Period relating to such Revolving Credit Loan, as a result of any
payment or conversion made by the Borrower or acceleration of the maturity of
the Revolving Credit Notes pursuant to Section 7.2 or for any other reason, the
Borrower shall, upon demand by such Lender (with a copy of such demand to the
Agent), pay to the Agent for the account of such Lender all amounts required to
compensate such Lender for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment or conversion, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain such Loan. A certificate as to such
amounts setting forth in reasonable detail the basis for computing the amount
payable to such Lender pursuant to this Section 9.4(c) shall be submitted to the
Borrower and the Agent by such Lender and such certificate shall be conclusive
and binding for all purposes, absent manifest error.
(d) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including,
without limitation, pursuant to this Section 9.4) or any other Loan Document
shall also inure to the benefit of any Person who was at any time an Indemnitee
under this Agreement or any other Loan Document.
<PAGE>
9.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of 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 the Borrower against any and all
of the Obligations now or hereafter existing irrespective of whether or not such
Lender shall have made any demand under this Agreement or any Revolving Credit
Note or any other Loan Document and although such Obligations may be unmatured.
Each Lender agrees promptly to notify the Borrower after any such set-off and
application made by such Lender; provided, however, 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 are in addition to the other rights and
remedies (including, without limitation, other rights of set-off) which such
Lender may have.
9.6. Binding Effect. (a) This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and when the
Agent shall have been notified by each Lender that such Lender has executed it
and thereafter shall be binding upon and inure to the benefit of the Borrower,
the Agent and each Lender and their respective successors and assigns, except
that the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
(b) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in Sections 2.14 and 9.4 shall survive the payment in full of principal and
interest hereunder and under the Revolving Credit Notes.
9.7. Assignments and Participations. (a) Each Lender may sell,
transfer, negotiate or assign to one or more other Lenders, commercial banks,
insurance companies, mutual funds or other financial institutions or entities
all or a portion of its Revolving Credit Commitments, the Revolving Credit Loans
<PAGE>
owing to it and the Revolving Credit Notes held by it and a commensurate portion
of its rights and obligations hereunder; provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement and (ii) the
aggregate amount of the Revolving Credit Commitments, Revolving Credit Loans and
Revolving Credit Notes being assigned pursuant to each such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $3,000,000 without the consent of the
Borrower and the Agent (except that such minimum amount shall not apply in the
case of assignments between or among the Lenders and in the case of an
assignment of all of a Lender's Revolving Credit Commitments, Revolving Credit
Loans owing to it or Revolving Credit Notes held by it). The parties to each
assignment shall execute and deliver to the Agent, for its acceptance and
recording, an Assignment and Acceptance, together with the Revolving Credit
Notes (or an affidavit of loss and indemnity with respect to such Revolving
Credit Notes satisfactory to the Agent) subject to such assignment and a
processing and recordation fee of $2,500 (except that no such fee shall be
payable in connection with any such assignment by FNBB within 30 days after the
date of this Agreement). Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations under this Agreement and the other Loan
Documents have been assigned to such assignee pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender hereunder and (B) the
assignor thereunder shall, to the extent that rights and obligations under this
Agreement have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (except those which survive the payment in full of the
Obligations) and be released from its obligations under this Agreement and the
other Loan Documents (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement and the other Loan Documents, such Lender shall cease to be
a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
<PAGE>
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any of the statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
or any other instrument or document furnished pursuant hereto or thereto; (ii)
such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or any
other Loan Party or the performance or observance by the Borrower or any other
Loan Party of any of its obligations under this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assigning Lender confirms that it has delivered to the
assignee and the assignee confirms that it has received a copy of this Agreement
and each of the Loan Documents, together with copies of the financial statements
referred to in Section 4.5 of this Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee agrees
that it will, independently and without reliance upon such assigning Lender or
any other Lender or the Agent and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decision in
taking or not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; (vi)
such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Lender; (vii) such assignee specifies as its Domestic
Lending Office (and address for notices) and Eurodollar Lending Office the
offices provided in such Assignment and Acceptance; and (viii) such assignee
attaches the forms prescribed by the IRS certifying as to such assignee's status
for purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to assignee under this Agreement or such
other documents as are necessary to indicate that all such payments are subject
to such rates at a rate reduced by an applicable tax treaty.
<PAGE>
(c) The Agent shall maintain at its address referred to in
Section 9.2 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitments of, and principal amount of the
Revolving Credit Loans owing to, each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Loan Parties, the Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender for all purposes
of this Agreement. The Register shall be available for inspection by the
Borrower or any Lender at a reasonable time and from time to time upon
reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with the Revolving Credit Notes
subject to such assignment, the Agent shall, if such Assignment and Acceptance
has been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Borrower. Within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for such surrendered Revolving Credit Notes, new Revolving
Credit Notes to the order of such assignee in an amount equal to the Revolving
Credit Commitments assumed by it pursuant to such Assignment and Acceptance and,
if the assigning Lender has retained Revolving Credit Commitments hereunder, new
Revolving Credit Notes to the order of the assigning Lender in an amount equal
to the Revolving Credit Commitments retained by it hereunder. Such new Revolving
Credit Notes shall be dated the same date as the surrendered Revolving Credit
Notes and be in substantially the form of Exhibit A.
(e) In addition to the other assignment rights provided in this
Section 9.7, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including, without limitation, rights to payments
of principal or interest on the Revolving Credit Notes) to any Federal Reserve
Bank without notice to or consent of the Borrower or the Agent; provided,
however, that no such assignment shall release the assigning Lender from any of
<PAGE>
its obligations hereunder. The terms and conditions of any such assignment and
the documentation evidencing such assignment shall be in form and substance
satisfactory to the assigning Lender and the assignee Federal Reserve Bank.
(f) Each Lender may sell participations to one or more Lenders,
commercial banks, insurance companies, mutual funds or other financial
institutions or entities in or to all or a portion of its rights and obligations
under the Loan Documents (including, without limitation, all or a portion of its
Revolving Credit Commitments or the Revolving Credit Loans owing to it and the
Revolving Credit Notes held by it). The terms of such participation shall not,
in any event, require the participant's consent to any amendments, waivers or
other modifications of any provision of any Loan Documents, the consent to any
departure by any Loan Party therefrom, or to the exercising or refraining from
exercising any powers or rights which such Lender may have under or in respect
of the Loan Documents (including, without limitation, the right to enforce the
obligations of the Loan Parties), except if any such amendment, waiver or other
modification or consent would (i) reduce the amount, or postpone any date fixed
for, any amount (whether of principal, interest or fees) payable to such
participant under the Loan Documents, to which such participant would otherwise
be entitled under such participation or (ii) result in the release of all or any
substantial portion of the Collateral or any Guarantor other than in accordance
with the Collateral Documents. In the event of the sale of any participation by
any Lender, (i) such Lender's obligations under the Loan Documents (including,
without limitation, its Revolving Credit Commitment to the Borrower hereunder)
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii) such Lender
shall remain the holder of such Revolving Credit Notes and Obligations for all
purposes of this Agreement, and (iv) the Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement.
<PAGE>
(g) Anything herein to the contrary notwithstanding, the Borrower
shall not, at any time, be obligated to pay to any participant of any interest
of any Lender, under Section 2.11, 2.13 or 2.15, any sum in excess of the sum
which the Borrower would have been obligated to pay to such Lender in respect of
such interest had such participation not been sold.
(h) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.7, disclose to the assignee or participant or proposed assignee or participant
any information relating to the Borrower and any of its Subsidiaries furnished
to such Lender by or on behalf of the Borrower; provided, however, that, prior
to any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any confidential
information relating to the Borrower and any such Subsidiary received by it from
such Lender in accordance with Section 9.13.
9.8. GOVERNING LAW; SEVERABILITY. This Agreement and the
Revolving Credit Notes and the rights and obligations of the parties hereto
shall be governed by, and construed in accordance with, the law of The
Commonwealth of Massachusetts. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this agreement.
9.9. SUBMISSION TO JURISDICTION; JURY TRIAL. (a) Any legal action
or proceeding with respect to this agreement or the Revolving Credit Notes or
any document related hereto may be brought in the courts of The Commonwealth of
Massachusetts or of the United States of America for the District of
Massachusetts, and, by execution and delivery of this agreement, the Borrower
hereby accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. The parties hereto
hereby irrevocably waive any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(b) The Borrower irrevocably consents to the service of process
of any of the aforementioned courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid, to
the Borrower at its address provided herein, such service to become effective 30
days after such mailing.
<PAGE>
(c) Nothing contained in this Section 9.9 shall affect the right
of the Agent, any Lender or any holder of a Revolving Credit Note to serve
process in any other manner permitted by law or commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction.
(d) Each of the parties hereto waives any right it may have to
trial by jury in respect of any litigation based on, or arising out of, under,
or in connection with, this Agreement or any other Loan Document, or any course
of conduct, course of dealing, oral or written statements or actions of any
party hereto.
9.10. Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
9.11. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
9.12. Entire Agreement. This Agreement, together with all of the
other Loan Documents and all certificates and documents delivered hereunder or
thereunder embody the entire agreement of the parties and supersedes all prior
agreements and understandings relating to the subject matter herein.
9.13. Confidentiality. Each Lender and the Agent agree to keep
information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's or the Agent's, as the case may
be, customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (i) to such Lender's or the Agent's, as the
case may be, employees, representatives and agents who are or are expected to be
<PAGE>
involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (ii) to the extent such information
presently is or hereafter becomes available to such Lender or the Agent, as the
case may be, on a non-confidential basis from a source other than the Borrower,
(iii) to the extent such disclosure is required by law, regulation or judicial
order (which requirement or order shall be promptly notified to the Borrower) or
requested or required by bank regulators and auditors, or (iv) to assignees or
participants or potential assignees or participants who agree to be bound by the
provisions of this sentence.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
THE BORROWER:
KATZ MEDIA SERVICES, INC.
By: /S/ RICHARD E. VENDIG
----------------------------
Name: RICHARD E. VENDIG
Title:SENIOR VICE PRESIDENT
THE AGENT:
THE FIRST NATIONAL BANK OF BOSTON,
as Agent
By: /S/ ROBERT F. MILORDI
------------------------------
Name: ROBERT F. MILORDI
Title:MANAGING DIRECTOR
THE LENDERS:
THE FIRST NATIONAL BANK OF BOSTON
By: /S/ ROBERT F. MILORDI
------------------------------
Name: ROBERT F. MILORDI
Title:MANAGING DIRECTOR
KATZ MEDIA CORPORATION
125 West 55th Street
New York, New York 10019
Dated as of: April 29, 1996
The First National Bank of Boston Credit Lyonnais Cayman Island Branch
individually, as Agent, and as Fleet National Bank
Underwriting Agent Banque Paribas
Credit Lyonnais New York Branch, State Street Bank and Trust Company
individually and as Underwriting National Bank of Canada
Agent European American Bank
Re: Modification No. 6 to Credit Agreement
--------------------------------------
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Credit Agreement, dated
as of September 9, 1994 (as amended, modified or supplemented from time to time
and in effect, the "Credit Agreement"), by and among Katz Media Corporation
-----------------
("Borrower"), the financial institutions party thereto as lenders ("Lenders"),
-------- -------
The First National Bank of Boston, as agent for the Lenders ("Agent"), and The
-----
First National Bank of Boston and Credit Lyonnais New York Branch, as
underwriting agents for the Lenders. All capitalized terms used herein and not
defined herein shall have the meanings specified for such terms in the Credit
Agreement.
The Borrower has requested the Agent and the Lenders to amend the Credit
Agreement in certain respects.
The Agent and the undersigned Majority Lenders are willing to amend the
Credit Agreement on the terms and subject to the conditions set forth in this
letter agreement ("this Agreement").
---- ---------
Accordingly, the parties hereto hereby agree as follows:
<PAGE>
-2-
ARTICLE I
MODIFICATIONS TO CREDIT AGREEMENT
---------------------------------
SECTION 1.1. Modification to Fixed Charge Coverage Ratio. Section 5.1 of
--------------------------------------------
the Credit Agreement is amended and restated in its entirety to read as follows:
5.1. Fixed Charge Coverage Ratio. The Borrower shall maintain (a)
---------------------------
at the end of each Fiscal Quarter ending on or prior to December 31,
1997, a ratio of EBITDA for the four Fiscal Quarters ending on the
last day of such Fiscal Quarter to Fixed Charges for the four Fiscal
Quarters ending on the last day of such Fiscal Quarter, of not less
than 1.0 to 1.0, (b) at the end of each Fiscal Quarter ending after
December 31, 1997, for which the Total Debt to EBITDA Ratio is greater
than or equal to 3.5 to 1.0, a ratio of EBITDA for the four Fiscal
Quarters ending on the last day of such Fiscal Quarter to Fixed
Charges for the four Fiscal Quarters ending on the last day of such
Fiscal Quarter, of not less than 1.1 to 1.0 and (c) at the end of each
Fiscal Quarter ending after December 31, 1997, for which the Total
Debt to EBITDA Ratio is less than 3.5 to 1, a ratio of EBITDA for the
four Fiscal Quarters ending on the last day of such Fiscal Quarter to
Fixed Charges for the four Fiscal Quarters ending on the last day of
such Fiscal Quarter, of not less than 1.05 to 1.0.
SECTION 1.2. Modification to Article V: Additional Financial Covenant. The
--------------------------------------------------------
Credit Agreement shall be amended by adding to Article V the following new
Section 5.1A:
5.1A. Adjusted Fixed Charge Coverage Ratio. The Borrower shall
-------------------------------------
maintain, at the end of each Fiscal Quarter, a ratio of EBITDA for the
four Fiscal Quarters ending on the last day of such Fiscal Quarter to
Adjusted Fixed Charges for the four Fiscal Quarters ending on the last
day of such Fiscal Quarter, of not less than 1.25 to 1.0. For purposes
of this Section 5.1A, the term "Adjusted Fixed Charges" shall mean,
-------- ----- -------
for any period, Fixed Charges for such period, less the amount
included in Fixed Charges for such period under clause (vii) of the
definition thereof.
SECTION 1.3. Modification to Financial Statements Requirement. The Agent
-------------------------------------------------
and the Majority Lenders agree to amend Section 6.11 of the Credit Agreement to
permit delivery of the certificate required to be delivered by Price Waterhouse
under such Section 6.11 for the Fiscal Year ended December 31, 1995 within 130
days after the end of such Fiscal Year.
<PAGE>
-3-
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower hereby represents and warrants to the Agent and each of the
Lenders as of the date of this Agreement as follows:
SECTION 2.1. Representations in Loan Documents. Each of the representations
---------------------------------
and warranties made by or on behalf of the Borrower and each Guarantor to the
Agent and the Lenders in the Loan Documents was true and correct when made, and
is true and correct on and as of the date of this Agreement, except, in each
case, (a) as effected by the consummation of the transactions contemplated by
the Loan Documents and (b) to the extent that any such representation or
warranty relates by its express terms solely to a prior date.
SECTION 2.2. Binding Effect of Documents, etc. This Agreement has been duly
--------------------------------
executed and delivered by the Borrower and by each of the Guarantors. The
agreements and obligations of each of the Borrower and the Guarantors contained
in this Agreement constitutes the legal, valid and binding obligation of such
Person enforceable against such Person in accordance with their respective
terms, except that (a) such enforceability may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (b) the remedy of specific performance
and injunction and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
SECTION 2.3. Corporate Authority, etc. The execution and delivery by each
--------------------------
of the Borrower and the Guarantors of this Agreement have been duly and properly
authorized by all necessary corporate or other action on the part of such Person
and do not and will not (a) contravene any provision of the certificate of
incorporation, by-laws or other comparable governing documents of such Person,
(b) conflict with, result in a breach of the terms, conditions or provisions of,
constitute a default under or result in the creation of any Lien upon any of the
property of such Person under, any Contractual Obligation to which such Person
is a party or by which such Person or its property is bound or affected, (c)
violate or contravene any provision of any Requirement of Law or any decree,
order or judgment of any Governmental Authority binding on such Person, (d)
result in or permit the acceleration of any Indebtedness of such Person, or (e)
require any consents or approvals from any shareholders of such Person.
SECTION. 2.4 No Defaults. After giving effect to this Agreement, no
------------
Defaults or Events of Default are continuing.
<PAGE>
-4-
ARTICLE III
EFFECTIVENESS
-------------
This Agreement shall be effective, as of April 29, 1996, upon receipt by
the Agent of counterparts of this Agreement duly executed and delivered by each
of the Majority Lenders, the Borrower and each of the Guarantors.
ARTICLE IV
CONSENT OF GUARANTORS
---------------------
SECTION 4.1. Consent of Guarantors.
---------------------
(a) Each of the undersigned Guarantors absolutely and unconditionally
-
consents to the execution, delivery and performance by the Borrower of this
Agreement.
(b) It is the express understanding and intention of each Guarantor that
-
all the Obligations of the Borrower and of such Guarantor shall at all times
hereafter continue to be entitled to all the benefits of, and to all the
security constituted by, such Guarantor's Guaranty to the same extent as prior
to the execution of this Agreement. All of such Obligations are hereby ratified
and confirmed by each Guarantor in all respects.
ARTICLE V
PROVISIONS OF GENERAL APPLICATION
---------------------------------
Except as otherwise expressly provided by this Agreement, all of the terms,
conditions and provisions of the Credit Agreement and each of the other Loan
Documents remain unaltered. All of the Obligations of the Borrower to the Agent
and the Lenders under the Credit Agreement and the other Loan Documents are, by
the execution and delivery by the Borrower of this Agreement, ratified and
confirmed by the Borrower in all respects. This Agreement and the rights and
obligations hereunder of each of the parties hereto shall be governed by and
interpreted and determined in accordance with the laws of The Commonwealth of
Massachusetts. This Agreement shall be a Loan Document. This Agreement shall be
binding upon and inure to the benefit of each of the parties hereto and their
respective successors in title and assigns. This Agreement may be executed in
any number of counterparts, but all of such counterparts shall together
constitute but one and the same agreement. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one counterpart
hereof signed by each of the parties hereto.
<PAGE>
-5-
If you are in agreement with the foregoing, please sign the enclosed
counterparts of this Agreement and return such counterparts to the undersigned,
whereupon this Agreement shall become a binding agreement between the
undersigned, the Agent and the Lenders on and as of the date first above
written.
Very truly yours,
KATZ MEDIA CORPORATION
By: /S/ RICHARD E. VENDIG
----------------------------
Title: SENIOR VICE PRESIDENT
The foregoing Agreement is hereby accepted by the undersigned Agent and
Majority Lenders on and as of the date first above written.
THE FIRST NATIONAL BANK OF BOSTON,
individually, as Agent, and as one of the Underwriting
Agents
By: /S/ ROBERT F. MILORDI
-----------------------------------
Title: MANAGING DIRECTOR
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as one of the Underwriting Agents
By:
------------------------------------
Title:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By:
------------------------------------
Title:
FLEET NATIONAL BANK
By: /S/ STEPHEN J. HEALEY
------------------------------------
Title: VICE PRESIDENT
<PAGE>
-6-
BANQUE PARIBAS
By: /S/ EILEEN BURKE
------------------------------------
Title:
STATE STREET BANK AND TRUST COMPANY
By: /S/ H. WOOD, JR.
------------------------------------
Title: VICE PRESIDENT
NATIONAL BANK OF CANADA
By: /S/ THERESA WHITE
------------------------------------
Title: ASSISTANT VICE PRESIDENT
EUROPEAN AMERICAN BANK
By: /S/ GILBERT TORRES
------------------------------------
Title: VICE PRESIDENT
Each of the Guarantors listed below consents to this Agreement on and as of
the date first above written and joins herein for purposes of Article IV hereof
on and as of the date first above written.
BANNER RADIO SALES, INC.
CHRISTAL RADIO SALES, INC.
EASTMAN RADIO SALES, INC.
KATZ COMMUNICATIONS, INC.
SELTEL INC.
THE CABLE COMPANY, INC.
THE NATIONAL PAYROLL COMPANY
By: /S/ RICHARD E. VENDIG
------------------------------------
Title: VICE PRESIDENT
KATZ MEDIA CORPORATION
125 West 55th Street
New York, New York 10019
Dated as of: September 6, 1996
The First National Bank of Boston,
individually, as Agent, and as Underwriting Agent
Credit Lyonnais New York Branch, individually
and as Underwriting Agent
Credit Lyonnais Cayman Island Branch
Fleet National Bank Banque
Paribas State Street Bank and Trust Company
National Bank of Canada
European American Bank
Re: Modification No. 7 to Credit Agreement
Ladies and Gentlemen:
Reference is made to the Third Amended and Restated Credit Agreement, dated
as of September 9, 1994 (as amended, modified or supplemented from time to time
and in effect, the "Credit Agreement"), by and among Katz Media Corporation
("Borrower"), the financial institutions party thereto as lenders ("Lenders"),
The First National Bank of Boston, as agent for the Lenders ("Agent"), and The
First National Bank of Boston and Credit Lyonnais New York Branch, as
underwriting agents for the Lenders. All capitalized terms used herein and not
defined herein shall have the meanings specified for such terms in the Credit
Agreement.
The Borrower has requested the Agent and the Lenders to amend the Credit
Agreement in certain respects.
The Agent and the undersigned Majority Lenders are willing to amend the
Credit Agreement on the terms and subject to the conditions set forth in this
Agreement.
<PAGE>
Accordingly, the parties hereto hereby agree as follows:
ARTICLE I
MODIFICATIONS TO CREDIT AGREEMENT
SECTION 1.1. Modification to Definitions and Accounting Terms. Section 1.1
of the Credit Agreement is amended by inserting the following new definitions in
appropriate places by alphabetical order:
"Contract Management Agreement" means any Contract Management Agreement,
substantially in the form of Exhibit A to Modification No. 7 to this Agreement.
"Katz Media Services" means Katz Media Services, Inc.
"Katz Media Services Credit Agreement" means the Credit Agreement, dated as
of September 6, 1996 among Katz Media Services, the lenders party thereto, and
The First National Bank of Boston, as Agent for the lenders.
SECTION 1.2. Termination of Commitments. The Termination Date shall be June
30, 1999, unless the Revolving Credit Commitments of the Lenders are earlier
terminated in accordance with Section 8.2 of the Credit Agreement. The Credit
Agreement (including Section 2.4 thereof) and the other Loan Documents are
hereby amended to reflect the foregoing amendment to the Termination Date.
SECTION 1.3. Modification to Total Debt to EBITDA Ratio. The Maximum Total
Debt to EBITDA Ratio as of the end of the Fiscal Quarter ending September 30,
1996 is hereby reduced to 4.25:1.0. Section 5.3 of the Credit Agreement is
hereby amended to reflect the foregoing.
<PAGE>
SECTION 1.4. Modification to Negative Covenants.
(a) Repurchase of Debentures. Section 7.4 of the Credit Agreement is
amended by (i) deleting clauses (ii)(C), (ii)(D) and (ii)(E) in their entirety,
and (ii) adding the following new clause (ii)(C):
"(C) payments in respect of the Debentures with the proceeds of the issuance of
Subordinated Take-Out Notes, provided that no Default or Event of Default is
existing on the date of any such payment or would result therefrom (including
any such Default or Event of Default that may arise as a result of any such
payment solely as a result of a cross default to the Katz Media Services Credit
Agreement)";
(b) Transactions with Affiliates. Section 7.13 of the Credit Agreement is
hereby amended by inserting the following new phrase immediately before the end
of clause (A) thereof:
", including any such transaction involving the purchase or sale of
Representation Agreements from or to Katz Media Services or any of its
Subsidiaries and the management and performance of obligations under
Representation Agreements owned by Katz Media Services pursuant to any Contract
Management Agreements."
SECTION 1.5. Events of Default. Section 8.1 of the Credit Agreement is
hereby amended by:
(a) deleting the phrase "Any Loan Party" in the first line of paragraph (d)
thereof, and inserting in its place, the following new phrase: "the Purchaser or
KCC or any of its Subsidiaries or Katz Media Services or any of its
Subsidiaries";
(b) deleting the phrase "such Loan Party" in the third line of paragraph
(d) thereof, and inserting in its place, the following new phrase: "the
Purchaser or KCC or any of its Subsidiaries or Katz Media Services or any of its
Subsidiaries";
<PAGE>
(c) deleting the phrase "Any Loan Party or any of its Subsidiaries" in the
first, fifth, thirteenth, and sixteenth lines of paragraph (e) thereof, and
inserting in place, in each case, the following new phrase: "the Purchaser or
KCC or any of its Subsidiaries or Katz Media Services or any of its
Subsidiaries";
(d) deleting the phrase "Loan Party" in the second line of paragraph (f)
thereof, and inserting in its place, the following new phrase: "the Purchaser or
KCC or any of its Subsidiaries or Katz Media Services or any of its
Subsidiaries";
(e) by amending and restating paragraph (m), clause (ii) thereof to read in
its entirety as follows:
"(ii) the Purchaser shall no longer own all of the outstanding Stock of KCC free
and clear of any Liens (other than Liens securing obligations under the Katz
Media Services Credit Agreement or related Loan Documents);" and
(f) inserting the following new paragraph (p):
"(p) Any Event of Default (as that term is defined in the Katz Media Services
Credit Agreement) shall occur under the Katz Media Services Credit Agreement."
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Agent and each of the
Lenders as of the date of this Agreement as follows:
<PAGE>
SECTION 2.1. Representations in Loan Documents. Each of the representations
and warranties made by or on behalf of the Borrower and each Guarantor to the
Agent and the Lenders in the Loan Documents was true and correct when made, and
is true and correct on and as of the date of this Agreement, except, in each
case, (a) as effected by the consummation of the transactions contemplated by
the Loan Documents and (b) to the extent that any such representation or
warranty relates by its express terms solely to a prior date.
SECTION 2.2. Binding Effect of Documents, etc. This Agreement has been duly
executed and delivered by the Borrower and by each of the Guarantors. The
agreements and obligations of each of the Borrower and the Guarantors contained
in this Agreement constitutes the legal, valid and binding obligation of such
Person enforceable against such Person in accordance with their respective
terms, except that (a) such enforceability may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and (b) the remedy of specific performance
and injunction and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
SECTION 2.3. Corporate Authority, etc. The execution and delivery by each
of the Borrower and the Guarantors of this Agreement have been duly and properly
authorized by all necessary corporate or other action on the part of such Person
and do not and will not (a) contravene any provision of the certificate of
incorporation, by-laws or other comparable governing documents of such Person,
(b) conflict with, result in a breach of the terms, conditions or provisions of,
constitute a default under or result in the creation of any Lien upon any of the
property of such Person under, any Contractual Obligation to which such Person
is a party or by which such Person or its property is bound or affected, (c)
violate or contravene any provision of any Requirement of Law or any decree,
order or judgment of any Governmental Authority binding on such Person, (d)
result in or permit the acceleration of any Indebtedness of such Person, or (e)
require any consents or approvals from any shareholders of such Person.
SECTION. 2.4 No Defaults. After giving effect to this Agreement, no
Defaults or Events of Default are continuing.
<PAGE>
ARTICLE III
CONDITIONS PRECEDENT
This Agreement shall be effective, from and after the date on which all of
the following conditions shall have been satisfied:
SECTION 3.1. Execution of this Agreement. The Agent shall have received
counterparts of this Agreement duly executed and delivered by each of the
Majority Lenders, the Borrower and each of the Guarantors.
SECTION 3.2. Katz Media Credit Agreement. The Katz Media Credit Agreement
shall have been duly executed and delivered by each of the parties thereto.
SECTION 3.3. Fairness Opinion. The Borrower shall have received and
delivered to the Agent the fairness opinion required pursuant to the Indenture
in connection with the transactions contemplated by the Contract Management
Agreements.
ARTICLE IV
CONSENT OF GUARANTORS
SECTION 4.1. Consent of Guarantors.
(a) Each of the undersigned Guarantors absolutely and unconditionally
consents to the execution, delivery and performance by the Borrower of this
Agreement.
<PAGE>
(b) It is the express understanding and intention of each Guarantor that
all the Obligations of the Borrower and of such Guarantor shall at all times
hereafter continue to be entitled to all the benefits of, and to all the
security constituted by, such Guarantor's Guaranty to the same extent as prior
to the execution of this Agreement. All of such Obligations are hereby ratified
and confirmed by each Guarantor in all respects.
ARTICLE V
PROVISIONS OF GENERAL APPLICATION
Except as otherwise expressly provided by this Agreement, all of the terms,
conditions and provisions of the Credit Agreement and each of the other Loan
Documents remain unaltered. All of the Obligations of the Borrower to the Agent
and the Lenders under the Credit Agreement and the other Loan Documents are, by
the execution and delivery by the Borrower of this Agreement, ratified and
confirmed by the Borrower in all respects. This Agreement and the rights and
obligations hereunder of each of the parties hereto shall be governed by and
interpreted and determined in accordance with the laws of The Commonwealth of
Massachusetts. This Agreement shall be a Loan Document. This Agreement shall be
binding upon and inure to the benefit of each of the parties hereto and their
respective successors in title and assigns. This Agreement may be executed in
any number of counterparts, but all of such counterparts shall together
constitute but one and the same agreement. In making proof of this Agreement, it
shall not be necessary to produce or account for more than one counterpart
hereof signed by each of the parties hereto.
<PAGE>
If you are in agreement with the foregoing, please sign the enclosed
counterparts of this Agreement and return such counterparts to the undersigned,
whereupon this Agreement shall become a binding agreement between the
undersigned, the Agent and the Lenders on and as of the date first above
written.
Very truly yours,
KATZ MEDIA CORPORATION
By: /S/ RICHARD E. VENDIG
------------------------
Title: SENIOR VICE PRESIDENT
<PAGE>
The foregoing Agreement is hereby accepted by the undersigned Agent and
Majority Lenders on and as of the date first above written.
THE FIRST NATIONAL BANK OF BOSTON,
individually, as Agent, and as one of the Underwriting Agents
By: /S/ ROBERT F. MILORDI
------------------------------
Name: ROBERT F. MILORDI
Title: MANAGING DIRECTOR
CREDIT LYONNAIS NEW YORK BRANCH,
individually and as one of the Underwriting Agents
By:
-----------------------------------
Title:
CREDIT LYONNAIS CAYMAN ISLAND BRANCH
By:
-----------------------------------
Title:
FLEET NATIONAL BANK
By: /S/ STEPHEN J. HEALEY
-----------------------------------
Title: VICE PRESIDENT
<PAGE>
BANQUE PARIBAS
By: /S/ EILEEN BURKE
-----------------------------------
Title:
STATE STREET BANK AND TRUST COMPANY
By: /S/ H. WOOD, JR.
------------------------------------
Title: VICE PRESIDENT
NATIONAL BANK OF CANADA
By: /S/ THERESA WHITE
-----------------------------------
Title: ASSISTANT VICE PRESIDENT
EUROPEAN AMERICAN BANK
By: /S/ GILBERT TORRES
-----------------------------------
Title: VICE PRESIDENT
<PAGE>
Each of the Guarantors listed below consents to this Agreement on and as of
the date first above written and joins herein for purposes of Article IV hereof
on and as of the date first above written.
BANNER RADIO SALES, INC.
CHRISTAL RADIO SALES, INC.
EASTMAN RADIO SALES, INC.
KATZ COMMUNICATIONS, INC.
SELTEL INC.
THE CABLE COMPANY, INC.
THE NATIONAL PAYROLL COMPANY
By: /S/ RICHARD E. VENDIG
-----------------------------------
Title: SENIOR VICE PRESIDENT
