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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): June 2, 1997
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TRIATHLON BROADCASTING COMPANY
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(Exact name of registrant as specified in charter)
Delaware 0-26530 33-0668235
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(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
Symphony Towers, 750 B Street, Suite 1920, San Diego, CA 92101
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (619) 239-4242
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N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On June 2, 1997, Triathlon Broadcasting Company (the "Company")
consummated the acquisition of the assets of radio stations KGOR-FM and
KFAB-AM, each operating in the Omaha, Nebraska market from American Radio
Systems Corporation. The purchase price for this acquisition which also
included the exclusive Muzak franchise for the Omaha and Lincoln, Nebraska
markets was $38.0 million. The purchase price was determined in arms length
negotiations between the Company and American Radio Systems Corporation and was
principally funded with the proceeds of a loan agreement entered into on June
2, 1997 with AT&T Commercial Finance Corporation and Union Bank of California,
described below.
This acquisition increases the Company's radio station ownership in
Nebraska to seven FM and one AM radio stations. The Company already owns and
operates radio stations KTNP-FM and KXKT-FM serving the Omaha market and in
the Lincoln market, the Company owns and operates radio stations KIBZ-FM,
KKNB-FM, KXKX-FM and KTGL-FM. In addition, in April 1997, the Company
acquired Pinnacle Sports Productions LLC, which has exclusive production and
advertising sales rights to sports events at the University of Nebraska and
operates a radio network in Nebraska.
ITEM 5. OTHER EVENTS
On June 2, 1997, the Company entered into a credit agreement with AT&T
Commercial Finance Corporation and the Union Bank of California (the "Credit
Agreement") which allows for an increase in the amount available for borrowings
from $40.0 million to $80.0 million. The Credit Agreement is more fully
described in the Company's annual report on Form 10-KSB for the transition
period ended December 31, 1996. On June 2, 1997, the Company increased its
borrowings under the Credit Agreement to fund the acquisition described in
ITEM 2 above and has $1.5 million of borrowing availability remaining under
the Credit Agreement.
ITEM 7. FINANCIAL STATEMENTS
(a) Financial Statements of Businesses Acquired
As of the date of the filing of this Form 8-K, it is impracticable to
provide the required financial statements. The required financial statements
will be filed no later than 60 days from the date this Form 8-K was required to
be filed.
(b) Pro Forma Financial Information
As of the date of the filing of this Form 8-K, it is impracticable to
provide the required pro forma financial information. The required pro forma
financial information will be filed no later than 60 days from the date this
Form 8-K was required to be filed.
(c) Exhibits
10.1 Asset Purchase Agreement dated as of October 17, 1996,
between Triathlon Broadcasting of Omaha, Inc. and American
Radio Systems Corporation (incorporated by reference to the
Company's Quarterly Report on Form 10-QSB for the nine months
ending on September 30, 1996 filed with the Securities and
Exchange Commission on November 14, 1996)
10.2 Amended and Restated Loan Agreement dated May 30, 1997 among
AT&T Commercial Finance Corporation and Union Bank of
California, N.A. and Triathlon Broadcasting of Wichita, Inc.,
Triathlon Broadcasting Of Lincoln, Inc., Triathlon
Broadcasting of Omaha, Inc., Triathlon Broadcasting of
Spokane, Inc., Triathlon Broadcasting of Tri-Cities, Inc.,
Triathlon Broadcasting of Colorado Springs, Inc., and
Triathlon Broadcasting of Little Rock, Inc.
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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 thereto duly authorized.
TRIATHLON BROADCASTING COMPANY
By: /s/ Jan E. Chason
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Name: Jan E. Chason
Title: Chief Financial Officer and Treasurer
Date: June 11, 1997
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AMENDED AND RESTATED LOAN AGREEMENT
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THIS AMENDED AND RESTATED LOAN AGREEMENT is made as of the 30th day of
May, 1997, by and between
TRIATHLON BROADCASTING OF WICHITA, INC., a Delaware corporation
("TBW"), TRIATHLON BROADCASTING OF LINCOLN, INC. (formerly known as LINCOLN
RADIO ACQUISITION CORP.), a Delaware corporation ("TBL"), TRIATHLON
BROADCASTING OF OMAHA, INC., a Delaware corporation ("TBO"), TRIATHLON
BROADCASTING OF SPOKANE, INC., a Delaware corporation ("TBS"), TRIATHLON
BROADCASTING OF TRI-CITIES, INC., a Delaware corporation ("TBTC"), TRIATHLON
BROADCASTING OF COLORADO SPRINGS, INC., a Delaware corporation ("TBCS"), and
TRIATHLON BROADCASTING OF LITTLE ROCK, INC., a Delaware corporation ("TBLR")
(TBW, TBL, TBO, TBS, TBTC, TBCS and TBLR are sometimes hereinafter referred to
individually as a "BORROWER" and collectively as the "BORROWERS");
THE FINANCIAL INSTITUTIONS which are now, or in accordance with
ARTICLE XII hereof hereafter become, parties hereto and "LENDERS" hereunder by
execution of the signature pages to this Agreement or otherwise (collectively,
the "LENDERS" and each individually, a "LENDER");
AT&T COMMERCIAL FINANCE CORPORATION, a Delaware corporation, as agent
for the Lenders (in such capacity, together with its successors and assigns in
such capacity, the "AGENT") and in its capacity as Administrative Agent,
Documentation Agent and Managing Agent; and
UNION BANK OF CALIFORNIA, N.A., a national banking association, as
co-agent for the Lenders (in such capacity, together with its successors and
assigns in such capacity, the "CO-AGENT") and in its capacity as Syndication
Agent, Managing Agent, and Designated Reviewing Bank.
RECITALS:
A. The Borrowers and AT&T Commercial Finance Corporation, a Delaware
corporation ("AT&T-CFC") are parties to a certain Loan Agreement dated November
19, 1996, as heretofore amended (as amended, the "ORIGINAL LOAN AGREEMENT")
pursuant to which AT&T-CFC made loans to the Borrowers severally in an
aggregate original principal amount of Forty Million Dollars ($40,000,000.00)
(the "ORIGINAL LOANS").
B. Certain of the Borrowers used a portion of the proceeds of the
Original Loans to make inter-company loans to TBLR and to other Borrowers.
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C. AT&T-CFC has assigned to the Agent for the ratable benefit of the
Lenders all of AT&T-CFC's right, title and interest in, under and to the
Original Loan Agreement and the Original Loans, and all agreements securing or
guaranteeing the payment thereof.
D. As of the Closing Date, the outstanding and unpaid principal
balance of the Original Loans is Forty Million Dollars ($40,000,000.00), of
which AT&T-CFC holds $20,000,000.00 and Union Bank of California, N.A. ("UBOC")
holds $20,000,000.00 as a result of the Loan Purchase hereinafter described.
E. The Borrowers have applied to the Lenders for the extension of
additional credit facilities in the aggregate principal amount of up to
$40,000,000.00, and have applied for the establishment of an acquisition line
of credit to enable the Borrowers to make additional acquisitions of radio
broadcast properties, subject to the terms and conditions hereinafter set
forth.
F. The Borrowers, the Lenders, the Agent and the Co-Agent desire to
amend and restate the Original Loan Agreement in its entirety to reflect the
foregoing and to add the Lenders as additional parties hereto.
G. The Borrowers and the Lenders desire to amend certain of the terms
of the Original Loan Agreement, and for ease of administration and
interpretation, the parties desire to accomplish such amendments by restating
the Original Loan Agreement in its entirety as hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound hereby, hereby agree,
and hereby amend and restate the original Loan Agreement in its entirety, as
follows:
I. DEFINITIONS
As used herein the following terms shall have the following respective
meanings:
ACCOUNTANTS: the meaning specified in SECTION 6.05.
ACQUISITION(S): the meaning specified in SECTION 7.04.
ACQUISITION AGREEMENT: with respect to any Permitted Acquisition, the
respective acquisition, purchase and sale, or other agreement(s) which set
forth the terms and conditions of such Acquisition.
ACQUISITION LOAN(S): the meaning specified in SECTION 2.04(A).
ACQUISITION LOAN COMMITMENT: the aggregate principal amount of all
Acquisition Loans which AT&T-CFC may make pursuant to SECTION 2.04.
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ACQUISITION LOAN NOTE(S): the meaning specified in SECTION 2.04(B).
ADJUSTED BROADCAST CASH FLOW: for any period of twelve (12)
consecutive months or four (4) consecutive Fiscal Quarters, the combined
Broadcast Cash Flow of the Stations, radio broadcast properties or the
Companies, as applicable, determined on a combined basis in accordance with
generally accepted accounting principles, adjusted (as of the effective date of
a Disposition or Acquisition, as applicable) to reflect any Disposition or
Acquisition permitted by this Agreement, as the case may be, by an amount
reasonably determined by the Agent and the Borrowers to be appropriate to
reflect the effect of all such Dispositions and Acquisitions during such
period.
ADMINISTRATION FEE: the meaning specified in SECTION 2.07(C).
ADVANCE(S): advance(s) of loan proceeds constituting all or a portion
of a Loan.
AFFILIATE(S): as applied to any Person, a spouse or relative of such
Person within the third degree of consanguinity, any partner, shareholder,
member, director, officer or manager of such Person, any corporation,
association, partnership, joint venture, firm or other entity of which such
Person is a partner, shareholder, venturer, member, director, officer or
manager, and any other Person directly or indirectly controlling, controlled
by, or under common control with, such Person.
AFFILIATE SUBORDINATION AGREEMENTS: the meaning specified in SECTION
2.09.
AGENT: the meaning specified in the Preamble.
AGREEMENT: this Loan Agreement, as the same may be amended from time
to time.
AGGREGATE TRANCHE A LOAN COMMITMENT: the sum of each Tranche A
Lender's Tranche A Loan Commitment.
AMERICAN RADIO: American Radio Systems Corporation, a Delaware
corporation, its successors and assigns.
APPLICABLE MARGIN: the meaning specified in SECTION 2.06(B).
ARKANSAS STATIONS: radio broadcast stations KSSN-FM (Little Rock,
Arkansas), KMVK-FM (Benton, Arkansas) and KOLL-FM (Maumelle, Arkansas).
ASSIGNMENT AND ACCEPTANCE: the meaning specified in ARTICLE XII.
AT&T - CFC: AT&T Commercial Finance Corporation, a Delaware
corporation, its successors and assigns.
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AT&T - CFC TRANCHE B LOANS: the Tranche B Loans which are initially
made by AT&T-CFC on the Closing Date and all extensions, refinancings,
divisions and portions thereof.
BASE RATE: for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Reference
Rate in effect on such day and (b) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. If, for any reason, UBOC shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason, including,
without limitation, the inability or failure of UBOC to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to CLAUSE (B) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Reference Rate or the
Federal Funds Effective Rate shall be effective on the effective date of such
change in the Reference Rate or the Federal Funds Effective Rate, respectively.
BASE RATE LOANS: Loans (or any portion thereof) the rate of interest
applicable to which is based upon the Base Rate.
BENEFIT LIABILITIES: the meaning specified in SECTION 4.12.
BORROWERS: the meaning specified in the Preamble.
BROADCAST CASH FLOW: for any fiscal period, Net Income for such
period, after restoring thereto (without duplication) amounts deducted in the
computation thereof for (a) depreciation; (b) amortization; (c) Interest
Expense; (d) other non-cash expenses determined in accordance with generally
accepted accounting principles; (e) Corporate Overhead payments (in an amount
not to exceed in the aggregate the maximum amount permitted by SECTION 5.05(A),
if applicable); and (f) taxes in respect of income and profits.
BUSINESS DAY: any day other than a Saturday, Sunday or legal holiday
on which banks in Newark, New Jersey, New York, New York, and Los Angeles,
California, are open for the transaction of a substantial part of their
commercial banking business.
CAPITAL EXPENDITURE: any payment made directly or indirectly for the
purpose of acquiring or constructing fixed assets, real property or equipment
which, in accordance with generally accepted accounting principles, would be
added as a debit to the fixed asset account of the Person making such
expenditure, including, without limitation, amounts paid or payable for labor
or under any conditional sale or other title retention agreement or under any
Lease or other periodic payment arrangement which is of such a nature that
payment obligations of the lessee or obligor thereunder would be required by
generally accepted accounting principles to be capitalized on the balance sheet
of such lessee or obligor.
CAPITAL LEASE: any Lease of property (real, personal or mixed) which,
in accordance with generally accepted accounting principles, would be
capitalized on the lessee's balance sheet
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or for which the amount of the asset and liability thereunder as if so
capitalized should be disclosed in a note to such balance sheet.
CASH COLLATERAL DEPOSIT: cash deposits made by the Borrowers to the
Co-Agent, to be held by the Co-Agent as Collateral pursuant to the Security
Documents for the reimbursement of drawings under the Letters of Credit.
CERCLA: the meaning specified in SECTION 4.19.
CLEAR CHANNEL: Clear Channel Radio, Inc., a Nevada corporation.
CLEAR CHANNEL GUARANTY: the guaranty of even date herewith issued by
Clear Channel to AT&T-CFC and the Agent in respect to the Tranche C Loan to
TBLR and the $5,000,000.00 intercompany loan made or to be made by TBO to TBLR.
CLOSING DATE: the effective date of closing on the transactions
contemplated hereby as evidenced by the Lenders' initial funding of the Tranche
A Loans, the Tranche B Loans, and the Tranche C Loans, which Closing Date shall
not be later than June 10, 1997, unless the Lenders otherwise agree.
CO-AGENT: the meaning specified in the Preamble.
COBRA: the meaning specified in SECTION 4.12.
CODE: the Internal Revenue Code of 1986, as amended from time to time.
COLLATERAL: collectively, any and all collateral referred to herein or
in the Security Documents, or any of them, and any and all other collateral
pledged to the Lenders from time to time in connection with the Loan Documents.
COMMITMENT FEE: the meaning specified in SECTION 2.07(A).
COMMITMENT(S): collectively, the Tranche A Commitment, the Tranche B
Commitment, the Tranche C Commitment and the Acquisition Loan Commitment.
COMMONLY CONTROLLED ENTITY: the meaning specified in SECTION 4.12.
COMPANIES: the Borrowers, the License Subsidiaries and, effective on
the date that Pinnacle Sports has paid in full all of its Indebtedness to
Havelock Bank and the Agent has received UCC lien searches and other
satisfactory evidence that the security interests granted by Pinnacle Sports,
TSPN and TSPI to the Agent and the Lenders are first priority perfected
security interests, Pinnacle Sports, TSPN and TSPI.
CORPORATE OVERHEAD: sums expended by the Companies (a) in paying the
salary of Norman Feuer, President of the Parent and the Borrowers, (b) in
reimbursing the Parent for usual
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and customary business expenses incurred in the ordinary course of business for
business travel and reasonable accounting, office and secretarial expense
incurred by the Parent on behalf of the Companies, (c) in paying management
fees and consulting fees (including, without limitation, such fees as may be
payable to SCMC and SFX Broadcasting), and (d) in making any dividend payments
or other distributions to the Parent, including such dividend payments and
distributions made for the purpose of funding dividends payable by the Parent
in respect of stock issued pursuant to the Preferred Stock Public Offering.
COVENANT COMPLIANCE CERTIFICATE: the quarterly certificate issued and
to be issued by the Borrowers pursuant to SECTION 6.05(C)(III), in the form of
EXHIBIT E hereto.
CURRENT ASSETS: current assets of a Borrower, determined in accordance
with generally accepted accounting principles on a basis consistent with that
employed by the Accountants in preparing the financial statements referred to
in SECTION 6.05. For the purposes of SECTION 5.03(B) hereof, Current Assets
shall exclude accounts receivable outstanding more than one hundred twenty
(120) days from invoice.
CURRENT LIABILITIES: current liabilities of a Borrower, determined in
accordance with generally accepted accounting principles on a basis consistent
with that employed by the Accountants in preparing the financial statements
referred to in SECTION 6.05.
DEFAULT RATE: the meaning specified in SECTION 9.02.
DISPOSITION: the meaning specified in SECTION 7.03.
DRAWING LENDER: the meaning specified in SECTION 2.01(E)(III).
EFFECTIVE DATE: the meaning specified in SECTION 2.11(B).
EMPLOYEE BENEFIT PLANS; EMPLOYEE PENSION PLAN AND EMPLOYEE WELFARE
PLAN: the respective meanings specified in SECTION 4.12.
ENVIRONMENTAL LAWS: the meaning specified in SECTION 4.19.
ERISA: the meaning specified in SECTION 4.12.
EVENT OF DEFAULT: the meaning specified in ARTICLE VIII.
EXCESS CASH FLOW: for any Fiscal Year, Broadcast Cash Flow for such
Fiscal Year, minus the sum of (a) Fixed Charges during such period, and (b)
voluntary prepayments of the Notes made during such period.
FCC: the Federal Communications Commission or any other federal
governmental agency which may hereafter perform its functions.
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FEDERAL FUNDS EFFECTIVE RATE: for any day, 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 on the next
succeeding 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 the day of such transactions received by the Co-Agent from
three federal funds brokers of recognized standing selected by it.
FEE LETTER: the letter agreement of even date herewith among the
Borrowers, the Agent and the Co-Agent, as amended from time to time.
FINAL ORDER: written action or order issued by the FCC setting forth
the consent of the FCC (a) which has not been reversed, stayed, enjoined, set
aside, annulled or suspended, and (b) with respect to which (i) no requests
have been filed for administrative or judicial review, consideration, appeal or
stay, and the normal time for filing any such requests and for the FCC to set
aside the action on its own motion (whether upon reconsideration or otherwise)
has expired, or (ii) in the event of review, reconsideration or appeal, the
time for further review, reconsideration or appeal has expired.
FISCAL QUARTERS: the three-month periods ending March 31, June 30,
September 30 and December 31.
FISCAL YEAR: the year ending December 31.
FIXED CHARGES: for any fiscal period, the sum of (a) Total Debt
Service for such period (but not more than the amount otherwise permitted by
this Agreement for such period), (b) Corporate Overhead payments during such
period (but not more than the amount otherwise permitted by this Agreement for
such period), (c) Capital Expenditures during such period (but not more than
the amount otherwise permitted by this Agreement for such period), and (d)
taxes.
GOVERNMENTAL AUTHORITY: any nation or government, any state or other
political subdivision thereof and any entity exercising any executive,
legislative, judicial, regulatory or administrative functions of, or pertaining
to, government.
GUARANTEES: the meaning specified in SECTION 2.09.
GUARANTORS: the Parent, TSPI, TSPN, Pinnacle Sports, the Borrowers,
the License Subsidiaries and all other Subsidiaries of the Parent and the
Borrowers, if any, whether now existing or hereafter arising.
HAVELOCK AGREEMENT: the meaning specified in SECTION 2.09.
HAVELOCK BANK: Havelock Bank, a Nebraska banking corporation.
HAZARDOUS MATERIAL: the meaning specified in SECTION 4.19.
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INDEBTEDNESS OR INDEBTEDNESS: as applied to any Person, (a) all items
(except items of capital stock, capital or paid-in surplus or of retained
earnings) which, in accordance with generally accepted accounting principles,
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person as at the date as of which Indebtedness
is to be determined, including any obligation to pay the deferred purchased
price of property acquired by such Person, and any Lease which in accordance
with generally accepted accounting principles consistently applied would
constitute indebtedness, (b) all indebtedness secured by any mortgage, pledge,
security, lien or conditional sale or other title retention agreement to which
any property or asset owned or held by such Person is subject, whether or not
the indebtedness secured thereby shall have been assumed, and (c) all
indebtedness of others which such Person has directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), discounted or sold with recourse or agreed (contingently or
otherwise) to purchase or repurchase or otherwise acquire, or in respect of
which such Person has agreed to supply or advance funds (whether by way of
loan, stock or equity purchase, capital contribution or otherwise) or otherwise
to become directly or indirectly liable.
INDEMNITEES: the meaning specified in SECTION 6.10.
INTERCREDITOR AGREEMENT: the Intercreditor Agreement of even date
herewith among the Lenders, the Agent, the Co-Agent and the Managing Agents, as
the same may be amended from time to time.
INTEREST EXPENSE: for any period, the aggregate amount (determined in
accordance with generally accepted accounting principles) of interest accrued
(whether or not paid) during such period by the Borrowers in respect of all
Indebtedness for borrowed money and Capital Leases.
INTEREST PERIOD: with respect to each LIBOR Loan, the period
commencing on the date such Loan is made or converted from a Base Rate Loan, or
the last day of the immediately preceding Interest Period, as to LIBOR Loans
being continued as such, and ending one (1), two (2), three (3), or six (6)
months thereafter, as the Borrowers may jointly elect in the applicable
Interest Rate Option Notice, provided that:
(i) any Interest Period (other than an Interest Period
determined pursuant to CLAUSE (IV) below) that would otherwise end on a day
that is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in which case
such Interest Period shall end on the immediately preceding Business Day;
(ii) if the Borrowers shall fail to give an Interest Rate
Option Notice, the Borrowers shall be deemed to have requested a conversion of
the affected LIBOR Loan to a Base Rate Loan on the last day of the then current
Interest Period with respect thereto;
(iii) any Interest Period relating to a LIBOR 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, subject to CLAUSE (IV) below, end on the last
Business Day of a calendar month;
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(iv) any Interest Period related to a LIBOR Loan that would
otherwise end after the final maturity date of such LIBOR Loan shall end on
such final maturity date;
(v) no Interest Period in respect of any LIBOR Loan shall
include a principal repayment date for the corresponding LIBOR Loan unless an
aggregate principal amount of such Loan at least equal to the principal amount
due on such principal repayment date shall be a UBOC Rate Loan or LIBOR Loan
having an Interest Period ending on or before such principal repayment date;
and
(vi) notwithstanding CLAUSES (IV) and (V) above, no Interest
Period shall have a duration of less than one (1) month.
INTEREST RATE OPTION NOTICE: a notice in form acceptable to the
Co-Agent given by all of the Borrowers jointly to the Co-Agent (with a copy to
the Agent) of the Borrowers' election to convert Loans to a different type or
continue Loans as the same type, in accordance with SECTION 2.06(B).
INVOLUNTARY PETITION: the meaning specified in paragraph (1) of
ARTICLE VIII.
KFAB/KGOR: radio stations KFAB-AM and KGOR (FM) (licensed to Omaha,
Nebraska).
LEASE(S): any lease of, or other periodic payment arrangement for the
use or possession of, property (real, personal or mixed).
LENDER(S): the meaning specified in the Preamble.
LETTER(S) OF CREDIT: the meaning specified in SECTION 2.01(A).
LETTER OF CREDIT AMOUNT: the stated maximum amount, available to be
drawn under a particular Letter of Credit, as such amount may be reduced or
reinstated from time to time in accordance with the terms of such Letter of
Credit.
LETTER OF CREDIT FEE: the meaning specified in SECTION 2.01(E).
LETTER OF CREDIT REQUEST: a request by the Borrowers for the issuance
of a Letter of Credit, on the Co-Agent's standard form of Application for
Irrevocable Standby Letter of Credit, the current form of which is attached
hereto as EXHIBIT F, and containing terms and conditions satisfactory to the
Co-Agent in its sole discretion.
LEVERAGE RATIO: the ratio, as of the last day of the most recent
Fiscal Quarter, of (i) the Total Debt of a Person or Persons on such date to
(ii) the Adjusted Broadcast Cash Flow of such Person or Persons for the twelve
(12) month period ending on such date, calculated on a
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consolidated basis in accordance with generally accepted accounting principles,
after deduction of all intercompany items.
LIBOR: with respect to each day during each Interest Period pertaining
to a LIBOR Loan, the rate of interest determined by the Co-Agent to be the rate
per annum at which deposits in dollars would be offered to the Co-Agent by
leading banks in the London Interbank Market at or about 9:00 a.m., Los Angeles
time, two Eurodollar Business Days prior to the beginning of such Interest
Period for the number of days comprised therein and in an amount comparable to
the amount of its LIBOR Loan to be outstanding during such Interest Period. For
the purposes hereof, "EURODOLLAR BUSINESS DAY" shall mean any day on which
banks are open for dealings in dollar deposits in the London Interbank Market.
LIBOR RATE: with respect to each day during each Interest Period
pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBOR
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1.00 - LIBOR Reserve Requirements
LIBOR LOANS: Tranche A Loans (or any portion thereof) and UBOC Tranche
B Loans (or any portion thereof) the rate of interest applicable to which is
based upon LIBOR.
LIBOR RESERVE REQUIREMENTS: for any day as applied to a LIBOR Loan,
the aggregate (without duplication) of the maximum rates (expressed as a
decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or
other Governmental Authority having jurisdiction with eurocurrency funding
(currently referred to as "EUROCURRENCY LIABILITIES" in Regulation D of such
Board as the same is from time to time in effect, and all official rulings and
interpretations thereunder or thereof and any successor regulation thereto)
maintained by a member bank of such Federal Reserve System.
LICENSES: the meaning specified in SECTION 4.13.
LICENSE SUBSIDIARIES: the meaning specified in SECTION 6.17.
LIFE INSURANCE: the meaning specified in SECTION 2.09.
LIFE INSURANCE ASSIGNMENT: the meaning specified in SECTION 2.09.
LOANS: the Tranche A Loans, the Tranche B Loans, the Tranche C Loans,
and the Acquisition Loans.
LOAN DOCUMENTS: this Agreement, the Notes, the Security Documents and
all other documents, certificates, and agreements contemplated by or executed
in connection with the
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transactions contemplated hereby, including Letter of Credit Requests and Rate
Hedging Agreements.
LOAN PURCHASE: the meaning specified in SECTION 2.10.
MAJORITY LENDERS: Lenders holding in the aggregate at least two-thirds
(2/3) of the sum of (i) the aggregate outstanding principal balance of the
Loans, (ii) the aggregate Letter of Credit Amount (or participation therein)
outstanding, and (iii) the aggregate amount of the unused Commitments, if any,
excluding from such calculation any Lender which has failed or refused to fund
a Loan when required to do so.
MANAGING AGENTS: the Agent and the Co-Agent jointly.
MATERIAL ADVERSE EFFECT: any circumstance or event which, individually
or in the aggregate with other such circumstances or events, (a) has had, or
could reasonably be expected to have, an adverse effect on the validity or
enforceability of this Agreement or the other Loan Documents in any material
respect, (b) has had, or could reasonably be expected to have, an adverse
effect on the condition (financial or other), business, results of operations,
prospects or properties of any Borrower, any Subsidiary of any Borrower, or any
Guarantor in any material respect, or (c) has impaired, or could reasonably be
expected to impair, the ability of any Borrower, any Subsidiary of any
Borrower, or any Guarantor to fulfill its obligations under this Agreement, the
Note(s) to which it is a party or any other Loan Document to which such Person
is a party.
MONTHLY DUE DATES: the first day of each calendar month.
MULTIEMPLOYER PLAN: the meaning specified in SECTION 4.12.
NET INCOME: for any fiscal period, the net income (or loss) of a
Person or Station, as applicable, excluding any extraordinary income or
non-cash gains for such period (taken as a cumulative whole), after deducting
all operating expenses, provisions for all taxes and reserves (including
reserves for deferred income taxes) and all other proper deductions, all
determined in accordance with generally accepted accounting principles;
provided, however, (a) that income and expenses arising from Trades shall be
excluded in determining Net Income, (b) the write-off of the unamortized
balance of closing fees incurred by the Borrowers in connection with the
Original Loan Agreement shall be excluded from expenses, (c) deferred cash
compensation to Norm Feuer not to exceed $250,000 per Fiscal Year shall be
excluded from expenses until such compensation is paid, and (d) compensation in
the form of a Parent's capital stock, stock options or stock appreciation
rights shall be excluded from expenses.
NET SALE PROCEEDS: with respect to any Disposition, the aggregate
amount of all cash payments received by the Borrowers, directly or indirectly,
in connection with such Disposition, whether at the time thereof or after such
Disposition under deferred payment arrangements or investments entered into or
received in connection with such Disposition, minus the aggregate amount of any
reasonable and customary legal, accounting, regulatory, title and recording tax
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expenses, transfer taxes, commissions and other fees and expenses paid at any
time by the Borrowers in connection with such Disposition.
NOTES: the Tranche A Notes, the Tranche B Notes, the Tranche C Notes,
and the Acquisition Loan Notes, as the same may be amended, extended and
restated from time to time.
NOTICE OF DEFAULT: the meaning specified in SECTION 10.03.
OPERATING LEASE: any Lease (real, personal or mixed) other than
Capital Leases.
ORIGINAL LOAN AGREEMENT: the meaning specified in the Preamble.
ORIGINAL LOANS: the meaning specified in the Preamble.
PARENT: TRIATHLON BROADCASTING COMPANY, a Delaware corporation.
PARTICIPANT: the meaning specified in SECTION 2.16.
PBGC: the meaning specified in SECTION 4.12.
PERMITTED ACQUISITIONS: the meaning specified in SECTION 7.04.
PERMITTED INVESTMENTS: (a) investments in property to be used by the
Companies in the ordinary course of business; (b) Current Assets arising from
the sale of goods and services in the ordinary course of business; (c)
investments (of one year or less) in direct or guaranteed obligations of the
United States or any agency thereof; (d) investments (of 90 days or less) in
certificates of deposit of any national bank having capital, surplus and
undivided profits in excess of $100,000,000; (e) investments (of 90 days or
less) in commercial paper given the highest rating by Standard and Poor's Bond
Rating Index or by Moody's Investor Service; (f) shares and certificates
redeemable at any time without penalty and funds invested solely in money
market instruments placed through national banks within the United States
having capital, surplus and undivided profits in excess of $100,000,000; (g)
advances to employees in the ordinary course of business for the payment of
bona fide, properly documented business expenses to be incurred on behalf of a
Borrower in an aggregate amount not to exceed $10,000 outstanding at any time;
(h) loans to Norman Feuer pursuant to Section 7.3 of his Employment Agreement
dated August, 1995, in an aggregate amount not to exceed $200,000 minus his
Discretionary Bonus (as defined in said Employment Agreement) for the then
current year; (i) subject to the Affiliate Subordination Agreement, if approved
by the Managing Agents in writing, loans by a Borrower to another Borrower or
to another Company so long as such loans are evidenced by promissory notes
which shall be pledged and delivered to the Agent on behalf of the Lenders
pursuant to the Security Documents; and (j) the Parent's investment in TSPI and
TSPN, and the investments of TSPI and TSPN in Pinnacle Sports.
PERSON OR PERSON: any individual, corporation, partnership, joint
venture, trust or unincorporated organization or any government or any agency
or political subdivision thereof.
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PINNACLE SPORTS: Pinnacle Sports Productions, L.L.C., a Nebraska
limited liability company.
PINNACLE SPORTS PURCHASE AGREEMENTS: those certain Purchase and Sale
Agreements (a) between TPSI and Dale M. Jensen, and (b) between TPSI, TPSN and
Paul R. Aaron, each dated April 23, 1997, pursuant to which TPSI and TPSN
acquired all of the membership interests in Pinnacle Sports.
PLEDGED INTERESTS: the meaning specified in SECTION 13.17.
PREFERRED STOCK: the 5,834,000 Depository Shares, each representing a
one-tenth interest in a share of 9% Mandatory Convertible Preferred Stock,
issued by the Parent pursuant to prospectus dated March 4, 1996.
PREMISES: the meaning specified in SECTION 4.19.
PURCHASE MONEY SECURITY AGREEMENT: any agreement pursuant to which a
Person incurs Indebtedness for the limited purpose of funding the acquisition
cost of equipment to be used in the ordinary course of the Person's business,
and pursuant to which the Person grants to the holder of such agreement a
security interest only in such equipment and its proceeds to secure only the
payment of such Indebtedness.
PURCHASE PRICE: with respect to any Acquisition, the aggregate amount
of consideration and transaction costs payable in connection therewith,
including customary indemnities and holdbacks and any Subordinated Debt owed to
Seller.
QUARTERLY DUE DATES: January 1, April 1, July 1 and October 1 in each
year.
RATE HEDGING AGREEMENTS: any written agreements evidencing Rate
Hedging Obligations, including, without limitation, the LIBOR provisions of
this Agreement.
RATE HEDGING OBLIGATIONS: any and all obligations of the Borrowers,
whether direct or indirect and whether absolute or contingent, at any time
created, arising, evidenced or acquired (including all renewals, extensions,
modifications and amendments thereof and all substitutions therefor), in
respect of: (a) any and all agreements, arrangements, devices and instruments
designed or intended to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions, including without
limitation dollar-denominated or cross currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options, puts and
warrants and so-called "rate swap" agreements; and (b) any and all
cancellations, buy-backs, reversals, terminations or assignments of any of the
foregoing.
RCRA: the meaning specified in SECTION 4.19.
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RECOVERING PARTY AND RECOVERY: the respective meanings specified in
SECTION 2.17(B).
REFERENCE RATE: the rate of interest per annum publicly announced from
time to time by UBOC as its "reference rate " in effect at its offices in Los
Angeles, California.
REGULATORY CHANGE: with respect to any Lender, any change after the
Closing Date in any law, rule or regulation (including without limitation
Regulation D) of the United States, any state or any other nation or political
subdivision thereof, including, without limitation, the issuance of any final
regulations or guidelines, or the adoption or making after the Closing Date
(or, if later, the date as of which such Person became a Lender) of any
interpretation, directive or request under any such law, rule or regulation
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or monetary authority
charged with the interpretation thereof.
REQUEST FOR ADVANCE: the meaning specified in SECTION 2.04(D).
RESTRICTED PAYMENT: any distribution or payment of cash or property
(other than in the form of Parent's capital stock, stock options or stock
appreciation rights), or both, directly or indirectly (a) in respect of
Subordinated Debt, or (b) to any Guarantor, Stockholder or other Affiliate of a
Borrower or any of their respective Affiliates for any reason whatsoever,
including, without limitation, salaries, debt repayment, consulting fees,
management fees, expense reimbursements and dividends, distributions and
payments in respect of ownership interests in a Borrower.
REVERSAL AGREEMENT: the Unwind Agreement dated May 30, 1997,
between TBO and American Radio.
SCMC: Sillerman Communications Management Corporation, a New York
corporation, its successors and assigns.
SEC: the meaning specified in SECTION 6.05(E).
SECURITY DOCUMENT(S): the meaning specified in SECTION 2.09.
SELLER: with respect to any Acquisition, the owner of the stock (or
other ownership interest) to be acquired, or the entity, the assets and
properties of which are to be acquired by a Borrower pursuant to such
Acquisition.
SENIOR DEBT: at any time, all outstanding Indebtedness of the
Companies, and each of them, to the Lenders, or any of them, including, without
limitation, Indebtedness incurred pursuant to this Agreement.
SFX BROADCASTING: SFX Broadcasting, Inc., a Delaware corporation, its
successors and assigns.
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STATION(S): the TBW Stations, the TBL Stations, the TBO Stations, the
TBS Stations, the TBTC Stations, the TBCS Stations, the Arkansas Stations, all
Substituted Stations, all radio broadcast stations hereafter acquired with the
proceeds of one or more Acquisition Loans, and all other radio broadcast
stations acquired by any of the Borrowers or any Subsidiaries, or provided
services by any of the Borrowers or any Subsidiaries pursuant to a time
brokerage agreement, local marketing agreement or similar agreement.
STOCKHOLDER(S): the meaning specified in SECTION 4.15 and all Persons
who at any time hold or acquire capital stock of the Borrowers.
SUBORDINATED DEBT: indebtedness subordinated in writing in right of
payment to the prior payment of Senior Debt, on terms approved by the Managing
Agents in writing.
SUBORDINATION AGREEMENTS: the meaning specified in SECTION 2.09,
including, without limitation, the Subordination Agreements of even date
herewith executed by SCMC and SFX Broadcasting in favor of the Lenders and the
Agent.
SUBSIDIARIES: all corporations and business entities in which any
Borrower directly or indirectly owns or holds more than a fifty percent (50%)
ownership interest, including, without limitation, the License Subsidiaries.
SUBSTITUTED STATION(S) : the meaning specified in SECTION 7.03.
SURETY: any person who is (or any part of whose assets are) at any
time directly or contingently liable for all or any portion of a Borrower's
obligations to a Lender hereunder or under the Notes or Security Documents,
whether pursuant to a guaranty, an assumption agreement, a pledge agreement, or
otherwise and any person to whom a Borrower is at any time indebted if such
Indebtedness has been subordinated to Indebtedness of the Borrower to the
Lenders. For the purposes of this Agreement, the term "SURETY" shall include
(i) the Guarantors, (ii) Clear Channel to the extent the Clear Channel Guaranty
remains or is required to remain in effect, and (iii) American Radio to the
extent that the Reversal Agreement remains or is required to remain in effect.
TAXES: the meaning specified in SECTION 2.13(A).
TBCS; TBL; TBLR; TBO; TBS; TBTC; AND TBW: the respective meanings
specified in the Preamble.
TBO ASSET PURCHASE AGREEMENT: that certain Asset Purchase Agreement
dated October 16, 1996, between American Radio and TBO for the purchase of
KFAB/KGOR.
TBLR ASSET SALE AGREEMENT: that certain Asset Purchase Agreement dated
April 11, 1997, between Clear Channel, Clear Channel Radio Licenses, Inc., a
Nevada corporation, and TBLR for TBLR's sale of the Arkansas Stations.
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TBCS STATIONS; TBL STATIONS; TBO STATIONS; TBS STATIONS; TBTC
STATIONS; AND TBW STATIONS: the respective meanings specified in SECTION 4.13.
TOTAL DEBT: at any time, all outstanding Indebtedness of a Person or
Persons for borrowed money and in respect of Capital Leases.
TOTAL DEBT SERVICE: for any period, the aggregate amount (determined
in accordance with generally accepted accounting principles) of principal,
interest and premiums, commitment fees and other charges, if any, required to
be paid during such period by the Borrowers and each of them in respect of
Total Debt; provided, however, that the $1,700,000 contingency payment pursuant
to the Pinnacle Sports Purchase Agreements shall be excluded from Total Debt
Service unless earned and payable.
TOTAL INTEREST EXPENSE: for any period, the aggregate amount
(determined, without duplication, in accordance with generally accepted
accounting principles) of (a) interest, fees, charges and other expenses
accrued (whether or not paid) during such period (including the interest
component of Capital Lease Obligations) by the Borrowers in respect of all
Indebtedness for borrowed money, plus (b) the net amount payable (or minus the
net amount receivable) under Rate Hedging Agreements during such period
(whether or not actually paid or received during such period).
TRADES: those assets and liabilities of the Borrowers, and each of
them, which do not represent the right to receive payment in cash or the
obligation to make payment in cash and which arise pursuant to so-called
"trade" or "barter" transactions.
TRANCHE A COMMITMENTS: with respect to each Tranche A Lender, its
commitment listed as its "Revolving Loan Commitment" on the signature page
hereto, or in the Assignment and Acceptance pursuant to which it becomes a
party hereto, to make Tranche A Loans and participate in Letters of Credit
hereunder, as the same shall be adjusted from time to time pursuant to this
Agreement.
TRANCHE A COMMITMENT EXPIRATION DATE: April 1, 2004.
TRANCHE A LENDERS: all Lenders who hold Tranche A Notes or Tranche A
Commitments.
TRANCHE A LENDER'S COMMITMENT PERCENTAGE: the percentage commitment of
each Tranche A Lender to fund Advances and purchase participation interests in
Letters of Credit under the Tranche A Commitment calculated as the ratio which
such Tranche A Lender's Tranche A Commitment bears to the total Tranche A
Commitments of all Tranche A Lenders.
TRANCHE A LOANS: the meaning specified in SECTION 2.01(A) hereof.
TRANCHE A NOTES: the meaning specified in SECTION 2.01(B).
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TRANCHE B COMMITMENT: the aggregate principal amount of all Tranche B
Loans which the Lenders may make pursuant to SECTION 2.02.
TRANCHE B LOANS: the meaning specified in SECTION 2.02(A) hereof.
TRANCHE B NOTES: the meaning specified in SECTION 2.02(B).
TRANCHE C COMMITMENT: the aggregate principal amount of all Tranche C
Loans which AT&T-CFC may make pursuant to SECTION 2.03.
TRANCHE C LOANS: the meaning specified in SECTION 2.03(A) hereof.
TRANCHE C NOTES: the meaning specified in SECTION 2.03(B).
TRANSACTION DOCUMENTS: the meaning specified in SECTION 4.02.
TRANSFERRED STATION(S) : the meaning specified in SECTION 7.03.
TSPI: Triathlon Sports Programming, Inc., a Delaware corporation, its
successors and assigns.
TSPN: TSPN, Inc., a Delaware corporation, its successors and assigns.
UBOC: Union Bank of California, N.A., its successors and assigns.
UBOC TRANCHE B LENDERS: Lenders holding UBOC Tranche B Loans.
UBOC TRANCHE B LOANS: the Tranche B Loans which are initially made by
UBOC on the Closing Date, and all extensions, refinancings, divisions and
portions thereof.
UNMATURED EVENT OF DEFAULT: any event or condition, which, after
notice or lapse of time, or both, would constitute an Event of Default.
UNUSED AVAILABILITY FEE: the meaning specified in SECTION 2.07(B).
WSJ LIBOR RATE: the per annum rate of interest published from time to
time by The Wall Street Journal as being the one-month London Interbank Offered
Rate (identified in The Wall Street Journal as the average of interbank offered
rates for one-month dollar deposits in the London market based on quotations of
five major banks), or if The Wall Street Journal shall for any reason cease or
fail to publish a one-month "LIBOR" rate or shall for any reason discontinue
publication or designation of a one-month "LIBOR" rate, such other comparable
interest rate index as the Agent shall reasonably designate in writing to the
Borrowers as a substitute therefor. If The Wall Street Journal quotes or
publishes more than one such one-month "LIBOR" rate, the highest of such rates
will be used.
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YEAR-TO-DATE: at and as of any date, the amount accrued, earned,
received, expended or calculated, as applicable, from the immediately preceding
January 1 through such date.
All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
referred to in SECTION 4.01 hereof; provided, however, that in any event income
and expenses arising from Trades shall be excluded in determining Net Income,
Broadcast Cash Flow and Adjusted Broadcast Cash Flow; and provided, further,
that for the purposes of SECTIONS 5.01, 5.02 and 5.03 hereof, the Broadcast
Cash Flow of the Arkansas Stations and Indebtedness consisting of the Tranche C
Loans shall be excluded from all calculations required thereby. All personal
pronouns used in this Agreement, whether used in the masculine, feminine or
neuter gender, shall include all other genders. All references in this
Agreement to Articles, Sections, subsections, paragraphs, clauses or Schedules
shall refer to the corresponding Articles, Sections, subsections, paragraphs,
clauses and Schedules, respectively, contained in or which are attached to or
made part of this Agreement, as applicable, unless specific reference is made
to the Articles, Sections or other subdivisions of, or Schedules to, another
agreement or document.
II. GENERAL TERMS
SECTION 2.01. TRANCHE A LOANS; LETTERS OF CREDIT.
(a) LOANS. Subject to the terms and conditions contained in this
Agreement, the Lenders and the Borrowers hereby agree that $15,000,000.00 held
by UBOC in principal amount of the Original Loans outstanding from the
Borrowers (other than TBLR) under the Original Loan Agreement, after giving
effect to the Loan Purchase provided in SECTION 2.10, shall on the Closing Date
be converted to, and deemed to constitute outstanding and unpaid Tranche A
Loans. On the Closing Date, subject to the terms and conditions contained in
this Agreement, each Tranche A Lender severally agrees to (i) make Tranche A
Loans, on a revolving credit basis, to the Borrowers (other than TBLR), from
time to time from the Closing Date to the Tranche A Commitment Expiration Date,
and (ii) participate in letters of credit (the "LETTERS OF CREDIT") issued for
the account of the Borrowers (other than TBLR) from time to time from the
Closing Date to the Tranche A Commitment Expiration Date; provided that the sum
of (A) the aggregate principal amount of all Tranche A Loans outstanding, (B)
the aggregate Letter of Credit Amount of all Letters of Credit outstanding and
(C) the aggregate amount of unreimbursed drawings under all Letters of Credit
shall not exceed the Aggregate Tranche A Loan Commitment at any time; and
provided, further, that the sum of (x) the aggregate Letter of Credit Amount of
all Letters of Credit outstanding and (y) the aggregate amount of unreimbursed
drawings under all Letters of Credit shall not exceed $2,000,000 at any time.
Within the limits of each Tranche A Lender's Tranche A Commitment, such
Borrowers may borrow, have Letters of Credit issued for the account of such
Borrowers, prepay Tranche A Loans, reborrow Tranche A Loans, and have
additional Letters of Credit issued for the account of such Borrowers after the
expiration of previously issued Letters of Credit. All Advances made, and Loans
deemed outstanding, under this SECTION 2.01, are referred to herein as the
"TRANCHE A LOANS".
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(b) NOTES. The Tranche A Loans shall be evidenced by the Borrowers'
several Amended and Restated Secured Promissory Notes in the aggregate
principal amount of $35,000,000.00, each in the form of EXHIBIT A hereto (with
all blanks appropriately completed) (together with any additional notes issued
to any assignee of the Tranche A Loans under ARTICLE XII hereof, referred to
collectively as the "TRANCHE A NOTES"), payable to UBOC (or its successors and
assigns), and allocated to the Borrowers as set forth below:
Original Principal Amount of
Borrower Name Tranche A Note(s) Issued by such Borrower
- ------------- -----------------------------------------
TBW $5,810,000.00
TBL $4,620,000.00
TBO $14,560,000.00
TBS $5,810,000.00
TBTC $700,000.00
TBCS $3,500,000.00
(c) REDUCTIONS IN TRANCHE A COMMITMENTS; PRINCIPAL IN RESPECT OF
TRANCHE A LOANS. On each date set forth below, the aggregate Tranche A
Commitments to the Borrowers shall be automatically and permanently reduced in
the corresponding amount set forth below opposite such date:
Reduced Aggregate Amount of
Effective Date of Reduction Tranche A Commitments
--------------------------- --------------------------
July 1, 1998 $34,650,000.00
October 1, 1998 $34,300,000.00
January 1, 1999 $33,950,000.00
April 1, 1999 $33,600,000.00
July 1, 1999 $33,250,000.00
October 1, 1999 $32,900,000.00
January 1, 2000 $31,675,000.00
April 1, 2000 $30,450,000.00
July 1, 2000 $29,225,000.00
October 1, 2000 $28,000,000.00
January 1, 2001 $26,162,500.00
April 1, 2001 $24,325,000.00
July 1, 2001 $22,487,500.00
October 1, 2001 $20,650,000.00
January 1, 2002 $18,593,750.00
April 1, 2002 $16,537,500.00
July 1, 2002 $14,481,250.00
October 1, 2002 $12,425,000.00
January 1, 2003 $10,237,500.00
April 1, 2003 $8,050,000.00
July 1, 2003 $5,862,500.00
October 1, 2003 $3,675,000.00
January 1, 2004 $1,837,500.00
April 1, 2004 $0.00
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Reductions of the Tranche A Commitments pursuant to this SECTION
2.01(C) or SECTION 2.05(D) shall automatically effect a reduction of the
Tranche A Commitments of each Lender holding a Tranche A Note on a pro rata
basis based upon respective outstanding unpaid principal balances of the
Tranche A Notes as more specifically set forth on SCHEDULE 2.01(C).
Upon the effective date of each reduction of the Tranche A Commitments
pursuant to this SECTION 2.01(C), the Borrowers (other than TBLR) shall (i)
prepay the amount, if any, by which the sum of (A) the aggregate unpaid
principal amount of the Tranche A Loans, (B) the aggregate Letter of Credit
Amount of all Letters of Credit outstanding and (C) the aggregate amount of
unreimbursed drawings under all Letters of Credit, exceeds the aggregate amount
of the Tranche A Commitments as so reduced, together with accrued interest on
the amount being prepaid to the date of such prepayment (or, with respect to
outstanding Letters of Credit, make a Cash Collateral Deposit in an amount
equal to such excess to the extent such excess is not corrected by the
foregoing prepayment), (ii) compensate the holders of the Tranche A Notes for
their funding costs, if any, in accordance with SECTIONS 2.06, 2.11 and 2.14,
and (iii) pay the Unused Availability Fee.
(d) ADVANCES UNDER THE TRANCHE A NOTES.
Each Advance shall be at least $500,000.00 (except in the case of TBTC
as to which each Advance shall be an integral multiple of $100,000), and, if
more, an integral multiple of $100,000.00. The Borrowers shall give the Agent
(with copy to the Co-Agent) irrevocable written notice (which notice must be
received by the Co-Agent prior to 9:00 A.M., New York time, three (3) Business
Days prior to each proposed borrowing date or, if all or any part of the
Tranche A Loans are requested to be made as LIBOR Loans, four (4) Business Days
prior to each proposed borrowing date) requesting that the Tranche A Lenders
make the Tranche A Loans on the proposed borrowing date and specifying (i) the
aggregate amount of Tranche A Loans requested to be made, (ii) subject to
SECTION 2.06, whether the Tranche A Loans are to be LIBOR Loans, Base Rate
Loans or a combination thereof and (iii) if the Tranche A Loans are to be
entirely or partly LIBOR Loans, the respective amounts of each such type of
Tranche A Loan and the length of the initial Interest Period therefor. On
receipt of such notice, the Agent shall promptly notify each Tranche A Lender
thereof not later than 5:00 P.M., New York time, on the date of receipt of such
notice. On the proposed borrowing date, not later than 1:00 P.M., New York
time, each Tranche A Lender shall make available to the Agent at its office
specified herein the amount of such Tranche A Lender's pro rata share of the
aggregate borrowing amount in immediately available funds. The Agent may, in
the absence of notification from any Tranche A Lender that such Tranche A
Lender has not made its pro rata share available to the Agent, on such date,
credit the account of the Borrowers on the books of such office of the Agent
with the aggregate amount of Tranche A Loans.
(e) ISSUANCE OF LETTERS OF CREDIT.
(i) The Borrowers shall be entitled to request the issuance
of Letters of Credit pursuant to the terms of this Agreement from time to time
from and including the Closing Date
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to but excluding the date which is two Business Days prior to the Tranche A
Commitment Expiration Date, by giving the Co-Agent a Letter of Credit Request
(with a copy thereof being provided to the Agent contemporaneously therewith)
at least three (3) Business Days before the requested date of issuance of such
Letter of Credit (which shall be a Business Day); provided, however, that (A)
the sum of all Letter of Credit Amounts in respect of all outstanding Letters
of Credit plus the outstanding principal balance of all unpaid reimbursement
obligations thereunder shall not at any time exceed $2,000,000, and (B) the sum
of all Letter of Credit Amounts in respect of all outstanding Letters of Credit
plus the outstanding principal balance of all unpaid reimbursement obligations,
plus the outstanding aggregate unpaid principal balance of all Tranche A Loans
shall not at any time exceed the then existing Tranche A Commitments as reduced
from time to time. Any Letter of Credit Request received by the Co-Agent later
than 10:00 a.m., Los Angeles time, shall be deemed to have been received on the
next Business Day. Each Letter of Credit Request shall be made in writing,
shall be signed by a duly authorized officer of all of the Borrowers (other
than TBLR), shall be irrevocable and shall be effective upon receipt by the
Co-Agent. Provided that a valid Letter of Credit Request has been received by
the Co-Agent and upon fulfillment of the other applicable conditions set forth
in ARTICLE III, the Co-Agent will issue the requested Letter of Credit from its
office specified on its signature page hereto. No Letter of Credit shall have
an expiration date later than two Business Days prior to the Tranche A
Commitment Expiration Date.
(ii) Immediately upon the issuance of each Letter of Credit,
the Co-Agent shall be deemed to have sold and transferred to each Tranche A
Lender, and each Tranche A Lender shall be deemed to have purchased and
received from the Co-Agent, in each case irrevocably and without any further
action by any party, an undivided interest and participation in such Letter of
Credit, each drawing thereunder and the obligations of the Borrowers (other
than TBLR) under this Agreement and the corresponding Letter of Credit Request
in respect thereof in an amount equal to the product of (A) such Tranche A
Lender's Commitment Percentage and (B) the maximum amount available to be drawn
under such Letter of Credit (assuming compliance with all conditions to
drawing). The Co-Agent shall promptly advise each Tranche A Lender of the
issuance of each Letter of Credit, the Letter of Credit Amount of such Letter
of Credit, any change in the face amount or expiration date of such Letter of
Credit, the cancellation or other termination of such Letter of Credit and any
drawing under such Letter of Credit.
(iii) The payment by the Co-Agent of a draft drawn under any
Letter of Credit shall first be made from any Cash Collateral Deposit held by
the Co-Agent with respect to such Letter of Credit. After any such Cash
Collateral Deposit has been applied, the payment by the Co-Agent of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Co-Agent in its individual capacity as a Lender
hereunder (in such capacity, the "Drawing Lender") of a Base Rate Loan in the
amount of such payment (but without any requirement of compliance with the
conditions set forth in ARTICLE III). In the event that any such Loan by the
Drawing Lender resulting from a drawing under any Letter of Credit is not
repaid by the Borrowers by 12:00 noon, Los Angeles time, on the day of payment
of such drawing, the Co-Agent shall promptly notify each of the other Tranche A
Lenders. Each Tranche A Lender shall, on the day of such notification (or if
such notification is not given by 3:00 p.m., Los Angeles time, on such day,
then on the next succeeding Business Day), make a
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Base Rate Loan, which shall be used to repay the applicable portion of the Base
Rate Loan of the Drawing Lender with respect to such Letter of Credit drawing,
in an amount equal to the amount of such Tranche A Lender's participation in
such drawing for application to repay the Drawing Lender (but without any
requirement of compliance with the applicable conditions set forth in ARTICLE
III) and shall deliver to the Co-Agent for the account of the Drawing Lender,
on the day of such notification (or if such notification is not given by 3:00
p.m., Los Angeles time, on such day, then on the next succeeding Business Day)
and in immediately available funds, the amount of such Base Rate Loan. In the
event that any Tranche A Lender fails to make available to the Co-Agent for the
account of the Drawing Lender the amount of such Base Rate Loan, the Drawing
Lender shall be entitled to recover such amount on demand from such Tranche A
Lender together with interest thereon at the Federal Funds Effective Rate for
each day such amount remains outstanding.
(iv) The obligations of the Borrowers with respect to any
Letter of Credit, any Letter of Credit Request, any other agreement or
instrument relating to any Letter of Credit and any Base Rate Loan made under
SECTION 2.01(D) shall be absolute, unconditional and irrevocable and shall be
paid strictly in accordance with the terms of the aforementioned documents
under all circumstances, including the following:
(A) any lack of validity or enforceability of any Letter of
Credit, this Agreement or any other Loan Document;
(B) the existence of any claim, setoff, defense or other
right that the Borrowers may have at any time against any beneficiary or
transferee of any Letter of Credit (or any Person for whom any such beneficiary
or transferee may be acting), the Co-Agent, the Agent, any Lender (other than
the defense of payment to a Lender in accordance with the terms of this
Agreement) or any other Person, whether in connection with this Agreement, any
other Loan Document, the transactions contemplated hereby or thereby or any
unrelated transaction;
(C) any statement or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect, or any statement therein being untrue or inaccurate in any respect
whatsoever; and
(D) any exchange, release or nonperfection of any Collateral
or other collateral, or any release, amendment or waiver of or consent to
departure from any Guarantees, other Loan Document or other guaranty, for any
of the Obligations of the Borrowers in respect of the Letters of Credit.
(v) The Borrowers (other than TBLR) shall pay to the Co-Agent
for the account of the Tranche A Lenders with respect to each Letter of Credit
issued hereunder, for the period from and including the day such Letter of
Credit is issued to but excluding the day such Letter of Credit expires, a
letter of credit fee (the "LETTER OF CREDIT FEE") equal to the product of (i)
the Applicable Margin for LIBOR Loans per annum and (ii) the Letter of Credit
Amount of such Letter of Credit from time to time, such Letter of Credit Fee to
be payable quarterly in arrears on the last day of each March, June, September
and December and on the expiration date
22
<PAGE>
of such Letter of Credit. Such Letter of Credit Fee shall be for the account of
the Tranche A Lenders; provided, that a portion thereof equal to one-eighth
(1/8) percent of such Letter of Credit Amount, shall be for the account of the
Co-Agent as compensation for its issuance of the Letter of Credit.
(vi) The Borrowers (other than TBLR) shall pay to the
Co-Agent for its own account, with respect to each Letter of Credit issued
hereunder, from time to time such additional fees and charges (including cable
charges) as are generally associated with letters of credit, in accordance with
the Co-Agent's standard internal charge guidelines and the related Letter of
Credit Request.
(vii) The Borrowers agree to the provisions in the Letter of
Credit Request form; provided, however, that the terms of the Loan Documents
shall take precedence if there is any inconsistency between the terms of the
Loan Documents and the terms of said form.
(viii) The Borrowers assume all risks of the acts or
omissions of any beneficiary or transferee of any Letter of Credit with respect
to its use of such Letter of Credit. Neither the Agent, the Co-Agent nor any
Lender nor any of their respective officers or directors shall be liable or
responsible for (A) the use that may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; or
(B) the validity, sufficiency or genuineness of documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged. In furtherance
and not in limitation of the foregoing, the Agent may accept any document that
appears on its face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
SECTION 2.02. TRANCHE B LOANS.
(a) LOANS. Subject to the terms and conditions contained in this
Agreement, the Lenders and the Borrowers hereby agree that $5,000,000.00 in
principal amount of the Original Loans outstanding under the Original Loan
Agreement and held by UBOC, after giving effect to the Loan Purchase provided
in SECTION 2.10, and $14,000,000.00 in principal amount of the Original Loans
outstanding under the Original Loan Agreement and held by AT&T-CFC, shall be
converted to loans under this SECTION 2.02 on the date hereof. AT&T-CFC agrees
to advance to the Borrowers the aggregate additional principal amount of
$6,000,000.00 on the Closing Date which additional principal amount, together
with the $19,000,000.00 in loans referred to in the preceding sentence, are
referred to as the "TRANCHE B LOANS"). As of the Closing Date, after giving
effect to the Loan Purchase and such Advances, UBOC will hold $5,000,000.00 in
principal amount of the Tranche B Loans, and AT&T-CFC will hold $20,000,000.00
in principal amount of the Tranche B Loans, all as more specifically described
in SCHEDULE 2.02 hereto.
(b) NOTES. The Tranche B Loans shall be evidenced by the Borrowers'
several Secured Promissory Notes in the aggregate principal amount of
$25,000,000.00, each in the form of EXHIBIT B hereto (with all blanks
appropriately completed) (together with any additional Notes issued to any
assignee of the Tranche B Loans under ARTICLE XII hereof, referred to
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<PAGE>
collectively as the "TRANCHE B NOTES"), payable to UBOC or AT&T-CFC, as
applicable (or their respective successors and assigns), and allocated to the
Borrowers as set forth below:
<TABLE>
<CAPTION>
Original Principal Amount of UBOC Original Principal Amount of AT&T-CFC
Borrower Name Tranche B Note Issued Tranche B Note Issued
------------- --------------------- ---------------------
<S> <C> <C>
TBW $830,000.00 $3,320,000.00
TBL $660,000.00 $2,640,000.00
TBO $2,080,000.00 $8,320,000.00
TBS $830,000.00 $3,320,000.00
TBTC $100,000.00 $400,000.00
TBCS $500,000.00 $2,000,000.00
</TABLE>
(c) PRINCIPAL IN RESPECT OF TRANCHE B LOANS. Each Tranche B Loan shall
be payable by the Borrower who borrowed the proceeds thereof, without setoff,
deduction or counterclaim in twenty-five (25) consecutive quarterly
installments on the Quarterly Due Dates commencing July 1, 1998, and continuing
in each case until July 1, 2004, when all remaining outstanding principal and
accrued interest thereon, and all outstanding and unpaid fees and charges due
to the Lenders, shall be due and payable in full without setoff, deduction or
counterclaim. The aggregate amount of all quarterly payments of principal in
respect of the Tranche B Loans shall be $31,250.00 applied pro rata to the
Tranche B Loans, as more specifically set forth in SCHEDULE 2.02(C).
SECTION 2.03. TRANCHE C LOANS.
(a) LOANS. Subject to the terms and conditions contained in this
Agreement, the Lenders and the Borrowers hereby agree that $6,000,000.00 in
principal amount of the Original Loans outstanding to TBLR from AT&T-CFC under
the Original Loan Agreement, shall be converted to a loan under this SECTION
2.03 on the date hereof. AT&T-CFC agrees to advance to TBLR and TBO
respectively, the additional principal amounts of $9,000,000.00 and
$5,000,000.00, respectively, on the Closing Date which additional principal
amounts, together with the $6,000,000.00 in loan referred to in the preceding
sentence, are referred to as the "TRANCHE C LOANS"). After giving effect to
such Advance, AT&T-CFC will hold $20,000,000.00 in principal amount of the
Tranche C Loans.
(b) NOTES. The Tranche C Loans shall be evidenced by TBLR's and TBO's
several Secured Promissory Notes in the aggregate principal amounts of
$15,000,000.00 and $5,000,000.00, respectively, each in the form of EXHIBIT C
hereto (together with any additional Notes issued to any assignee of the
Tranche C Loans under ARTICLE XII hereof, referred to collectively as the
"TRANCHE C NOTES"), payable to AT&T-CFC (or its successors and assigns).
(c) PRINCIPAL IN RESPECT OF TRANCHE C LOANS. The Tranche C Loans shall
be repaid in a single payment of $20,000,000.00 due and payable on the earlier
to occur of (i) November 1, 1998, or (ii) the date of sale of all or any of the
Arkansas Stations to Clear Channel or any other Person. Notwithstanding any
provision contained herein to the contrary, but subject to the Intercreditor
Agreement, the Net Sale Proceeds payable to TBLR in consideration of the sale of
24
<PAGE>
the Arkansas Stations to Clear Channel or any other purchaser of the Arkansas
Stations shall be paid first to the holders of the Tranche C Notes until
payment in full of the Tranche C Loans, including all interest accrued thereon,
and the balance, if any, to the Lenders pro rata, for payment of the remaining
outstanding Loans.
SECTION 2.04. ACQUISITION LOANS.
(a) ACQUISITION LOANS. Subject to the terms and conditions contained
in this Agreement, from and after the date the Tranche C Loans have been paid
in full in cash, AT&T-CFC agrees to make one or more loans (individually, an
"ACQUISITION LOAN", and collectively, the "ACQUISITION LOANS") to the Borrowers
on or before the earliest to occur of (x) July 1, 2004, (y) the date the
parties terminate this Agreement, or (z) the date the Majority Lenders agree to
terminate the Borrowers' rights under this SECTION 2.04 by reason of the
occurrence of an Event of Default, in the aggregate principal amount of up to
the lesser of (i) Twenty Million Dollars ($20,000,000.00), or (ii) the maximum
amount which could be added to the Companies' then existing Total Debt, without
violating SECTION 5.01.
(b) NOTE. Each Acquisition Loan shall be evidenced by a Secured
Promissory Note in the form of EXHIBIT D (with all blanks appropriately
completed) (each an "ACQUISITION LOAN NOTE"), issued by the Borrower(s)
receiving the proceeds of such Acquisition Loan and payable to AT&T-CFC (or its
successors and assigns).
(c) PRINCIPAL IN RESPECT OF ACQUISITION LOANS. Each Acquisition Loan
shall be repaid by the Borrower(s) who received the proceeds thereof in
quarterly installments on the Quarterly Due Dates commencing with the first
such Quarterly Due Date occurring after the date of Advance of the Acquisition
Loan, with each quarterly principal payment equal to an amount calculated as
(i) $31,250.00, multiplied by (ii) a fraction, the numerator of which is the
original principal amount of such Acquisition Loan, and the denominator of
which is $20,000,000.00.
(d) AUTHORIZATIONS. The Borrowers shall provide AT&T-CFC with not less
than ninety (90) days advance notice of their intent to obtain an Acquisition
Loan, the amount thereof and the intended use thereof, together with all
information required by the Managing Agents in respect to the anticipated
acquisition. Each Advance shall be made upon not less than ten (10) business
days prior written notice from the Borrowers in the form attached hereto as
EXHIBIT G (a "REQUEST FOR ADVANCE").
SECTION 2.05. PREPAYMENTS.
(a) RIGHT OF VOLUNTARY PREPAYMENT. Subject to the provisions hereof,
the Borrowers may at any time prepay the principal of the Notes, in whole or in
part from time to time upon not less than five (5) business days prior written
notice to the Agent, provided that any voluntary prepayment shall be an
integral multiple of Five Hundred Thousand Dollars ($500,000.00) or such lesser
amount as equals the then outstanding principal amount of the Notes. Except as
provided in SECTION 2.05(B), each prepayment shall be without premium or
penalty. Each such notice shall specify the prepayment date and the principal
amount of the
25
<PAGE>
Notes to be prepaid. All prepayments shall, unless otherwise determined by all
of the Lenders, be applied first to prepayment premiums, second to accrued but
unpaid interest, late charges and fees, then to prepayments of installments of
principal of the Notes being prepaid (pro rata based on outstanding unpaid
principal balances thereof) in the inverse order of maturity thereof; provided,
however, that no prepayments shall be made with respect to the Tranche C Loans
(except as provided in the Intercreditor Agreement); and provided, further,
that, unless an Event of Default shall have occurred and be continuing, the
Borrower may direct that prepayments shall be applied to payment of the Tranche
A Loans. Except as provided in SECTION 2.01, the Lenders shall have no
obligation to relend principal balances repaid or prepaid.
(b) PREPAYMENT PREMIUMS. Notwithstanding the foregoing any prepayment
of an Advance (except Advances in respect of the Tranche C Loans) made prior to
the third anniversary of the date such Advance is made shall, to the extent
permitted by applicable law, be accompanied by the payment of a prepayment
premium in accordance with the Fee Letter.
(c) MANDATORY PREPAYMENTS.
(i) EXCESS CASH FLOW. Within one hundred twenty (120) days
after the end of each Fiscal Year, commencing with Fiscal Year ending December
31, 1997, the Borrowers shall prepay the Notes in an aggregate amount equal to
fifty percent (50%) of the Borrowers' Excess Cash Flow for such Fiscal Year,
unless the Borrowers' Leverage Ratio as of the last day of such Fiscal Year is
less than 3.0:1.0.
(ii) EQUITY OFFERINGS. In the event that any Borrower or the
Parent shall raise additional cash equity in connection with the issuance or
sale of capital stock or the issuance of Subordinated Debt, (A) one hundred
percent (100%) of the net proceeds thereof (after deduction of reasonable costs
of raising such equity) shall be paid by the Borrowers to the Agent on behalf
of the Tranche A Lenders and the UBOC Tranche B Lenders and applied to the
prepayment of the Tranche A Loans and the UBOC Tranche B Loans if either (1) an
Event of Default or Unmatured Event of Default exists, or (2) the Borrowers'
Leverage Ratio as of the most recent Fiscal Quarter end is equal to or greater
than 5.0:1.0, and (B) fifty percent (50%) of such net proceeds shall be paid by
the Borrowers to the Lenders and applied to the prepayment of the Loans if such
Leverage Ratio as of said date is less than 5.0:1.0, but equal to or greater
than 4.0:1.0. Mandatory prepayments made pursuant to this SECTION 2.05(C)(II)
shall not be subject to the payment of a prepayment premium.
(iii) ASSET DISPOSITIONS. Unless such proceeds are applied by
the Borrowers within six (6) months of their arising to the payment of the
purchase price of assets permitted to be acquired by the Borrowers pursuant to
this Agreement, one hundred percent (100%) of the Net Sale Proceeds of all
assets and properties sold or disposed of by the Borrowers pursuant to or as
part of a Disposition shall be paid to the Agent on behalf of the Lenders at
the expiration of said six-month period to be applied to the prepayment of the
Loans; provided, however, that, unless an Event of Default or Unmatured Event
of Default shall have occurred and be then continuing, such Net Sale Proceeds
shall not be required to be paid to the Agent if such Disposition yields Net
Sale Proceeds of not more than $300,000, except to the extent that the
aggregate amount of
26
<PAGE>
Net Sale Proceeds resulting from all such Dispositions described in this
proviso exceeds $1,000,000. Notwithstanding the foregoing, (A) the Net Sale
Proceeds from the sale of the Arkansas Stations shall be immediately applied
exclusively to the payment in full of the Tranche C Loans in accordance with
SECTION 2.03 and the Intercreditor Agreement until payment in full thereof, and
(B) if an Event of Default shall then exist, the Net Sale Proceeds from the
sale of any other assets shall be immediately paid to the Agent for prepayment
of the Notes.
(d) APPLICATION OF REDUCTIONS AND PREPAYMENTS.
All prepayments of the Notes under this SECTION 2.05, (i) shall be
made without set-off, deduction or counterclaim, (ii) shall (except for
prepayments of the Tranche C Notes) be applied to the Lenders' Notes pro rata
(based upon the outstanding principal balance thereof) and (iii) unless
otherwise specified in this SECTION 2.05, shall be applied first, to pay
applicable prepayment premiums, second, to pay to interest, fees and expenses
hereunder, and third to pay principal of the Notes, provided that (1)
applications of prepayments of principal shall be made, proportionately, to
subsequent scheduled payments under the Notes, in the inverse order in which
they appear, and (2) all prepayments of principal in respect to the Tranche A
Loans shall be made first to Base Rate Loans and then to LIBOR Loans. Except as
provided in SECTION 3 of the Intercreditor Agreement, no prepayment of the
Tranche C Loans shall be permitted without the prior written consent of all
Lenders.
If, at any time, the Tranche A Loans are repaid in full, additional
prepayments hereunder shall be applied first, to make a Cash Collateral Deposit
until such time as all outstanding Letters of Credit are collateralized in
full, and thereafter (with regard to prepayments under SECTION 2.05(C)) , to
permanently reduce the aggregate Tranche A Commitments by an amount equal to
what such prepayment would have been under this SECTION 2.05 if Tranche A Loans
had been outstanding against which to apply such prepayment. Each prepayment of
the Tranche A Loans and each Cash Collateral Deposit under this SECTION 2.05
shall be applied to permanently reduce the Tranche A Commitments pro rata with
respect to each of the scheduled reduction dates set forth in SECTION 2.01
remaining at such time.
Cash Collateral Deposits held by the Co-Agent shall, subject to the
Intercreditor Agreement, be applied to reimburse drawings on Letters of Credit
in the order in which such drawings are presented to the Co-Agent. Upon written
request of the Borrowers (other than TBLR) with regard to any Letter of Credit
for which the Co-Agent is holding a Cash Collateral Deposit, the Co-Agent shall
release to the Borrowers (other than TBLR) any portion of such deposit not
applied to reimburse drawings thereunder upon the earliest of (i) fourteen days
following expiration of such Letter of Credit according to its terms and (ii)
receipt by the Co-Agent of written acknowledgment from the beneficiary of such
Letter of Credit requesting the cancellation thereof and relinquishing all its
rights thereunder, accompanied by the original of such Letter of Credit.
27
<PAGE>
SECTION 2.06. APPLICABLE INTEREST RATES; PAYMENT OF INTEREST.
(a) INTEREST RATES. Subject to the provisions of SECTION 9.02 hereof,
the outstanding principal balance of each Loan shall bear interest from the
date of the first Advance thereof until payment in full, both before and after
maturity, at a rate or rates per annum calculated from time to time in
accordance with this SECTION 2.06.
(b) INTEREST RATE APPLICABLE TO TRANCHE A LOANS. (i) Base Rate/LIBOR
Rate. Subject to the terms and conditions set forth in this SECTION 2.06(B),
the Borrowers may jointly elect an interest rate for the outstanding principal
balances from time to time of the Tranche A Loans, or any portion thereof,
based on either the Base Rate or the applicable LIBOR Rate and determined by
the Co-Agent as follows:
(x) the rate for any Base Rate Loan shall be the Base Rate
plus the Applicable Margin for Base Rate Loans then in effect; and
(y) the rate for any LIBOR Loan shall be the applicable LIBOR
Rate plus the Applicable Margin for LIBOR Loans in effect on the first day of
the applicable Interest Period.
(ii) APPLICABLE MARGIN. The "APPLICABLE MARGIN" shall be
determined as follows:
(A) from and after the Closing Date until the first interest
adjustment in accordance with this SECTION 2.06(B), the Applicable Margin for
Base Rate Loans shall be 1.75% and the Applicable Margin for LIBOR Loans shall
be 2.75%;
(B) thereafter, subject to the provisions of subparagraph (F)
below, the Applicable Margin shall be determined from the following tables
based upon the Leverage Ratio for the last day of the most recent four (4)
Fiscal Quarters:
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
APPLICABLE MARGIN
- ------------------------------------------------------------- ---------------------------- --------------------
LEVERAGE RATIO BASE RATE LOANS LIBOR LOANS
- ------------------------------------------------------------- ---------------------------- --------------------
<S> <C> <C>
Greater than or equal to 5.50:1.00 1.75% 2.75%
- ------------------------------------------------------------- ---------------------------- --------------------
Less than 5.50:1.00 but greater than or equal to 5.00:1.00 1.50% 2.50%
- ------------------------------------------------------------- ---------------------------- --------------------
Less than 5.00:1.00 but greater than or equal to 4.50:1.00 1.00% 2.00%
- ------------------------------------------------------------- ---------------------------- --------------------
Less than 4.50:1.00 .50% 1.50%
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(C) Nothing in paragraphs (A) or (B) above shall be deemed to
constitute a waiver of the requirements of SECTION 5.01, default under which
will result in an Event of Default and the application of the default rate of
interest specified in SECTION 9.02.
28
<PAGE>
(D) For purposes of determining the Applicable Margin for all
Tranche A Loans and the Letter of Credit Fees referred to in SECTION 2.01(E),
interest rates on the Tranche A Loans and such fees shall be calculated on the
basis of the Leverage Ratio set forth in the most recent Covenant Compliance
Certificate received by the Co-Agent in accordance with SECTION 6.05(C). For
accrued and unpaid interest and fees only (no changes being made for interest
or fee payments previously made), changes in interest rates on the Tranche A
Loans, or in such fees, attributable to changes in the Applicable Margin caused
by changes in the applicable Leverage Ratio shall be calculated upon the
delivery of a Covenant Compliance Certificate and such change shall be
effective (y) in the case of a Base Rate Loan or such fees, from the first day
subsequent to the last day covered by the Covenant Compliance Certificate and
(z) in the case of a LIBOR Loan, from the first day of the Interest Period
applicable to such LIBOR Loan subsequent to the last day covered by the
Covenant Compliance Certificate. If, for any reason, the Borrowers shall fail
to deliver a Covenant Compliance Certificate when due in accordance with
SECTION 6.05(C), and such failure shall continue for a period of ten days, the
Leverage Ratio shall be deemed to be greater than 5.50:1.00, retroactive to the
date on which the Borrowers should have delivered such Covenant Compliance
Certificate and shall continue until a Covenant Compliance Certificate
indicating a different Leverage Ratio is delivered to the Co-Agent.
(E) The Co-Agent will notify the Borrowers, all Lenders
holding Tranche A Loans, and the Agent of any adjustment of the Applicable
Margin within fifteen (15) Business Days after receipt of the Covenant
Compliance Certificate.
(F) Notwithstanding the foregoing, no downward adjustment of
the Applicable Margin hereunder shall be permitted during the existence of any
Event of Default or Unmatured Event of Default.
(iii) CONVERSION TO A DIFFERENT TYPE OF LOAN. The Borrowers
may jointly elect from time to time to convert any outstanding principal
balances under the Tranche A Loans and UBOC Tranche B Loans to Base Rate Loans
or LIBOR Loans, as the case may be, provided that (i) with respect to any such
conversion of LIBOR Loans to Base Rate Loans, the Borrowers shall provide the
appropriate Interest Rate Option Notice to the Co-Agent by 10:00 A.M. (Los
Angeles time) one Business Day prior to the date of such proposed conversion;
(ii) with respect to any such conversion of Base Rate Loans to LIBOR Loans, the
Borrowers shall provide the appropriate Interest Rate Option Notice by 10:00
A.M. (Los Angeles time ) at least three Business Days prior to the date of such
proposed conversion; (iii) with respect to any such conversion of LIBOR Loans
into Base Rate Loans, such conversion shall only be made on the last day of the
related Interest Period unless the required indemnification payments are made
under SECTION 2.14; (iv) no Loans may be converted into LIBOR Loans when any
Event of Default has occurred and is continuing; (v) the Borrowers may have no
more than one (1) LIBOR Loan rate in effect at any time in respect to each of
the Tranche A Loans and the UBOC Tranche B Loans; (vi) any conversion of less
than all of the outstanding Base Rate Loans into LIBOR Loans shall be in a
minimum aggregate principal amount of $1,000,000 and, if greater, an integral
multiple of $500,000; and (vii) any conversion of less than all of the
outstanding LIBOR Loans into Base Rate Loans shall be in a minimum aggregate
principal amount of $1,000,000 and, if greater, an integral multiple of
$100,000 or, if less, the aggregate principal amount of
29
<PAGE>
LIBOR Loans then outstanding. The Co-Agent shall promptly notify the Lenders
holding Tranche A Notes and Tranche B Notes, as applicable, of such Interest
Rate Option Notice and the information contained therein (with a copy to the
Agent).
(iv) CONTINUANCE OF AN INTEREST RATE OPTION. The Borrowers
may continue any LIBOR Loans as such in respect of Tranche A Loans and UBOC
Tranche B Loans upon the expiration of the related Interest Period by providing
to the Co-Agent (i) an Interest Rate Option Notice in compliance with the
notice provisions set forth in the preceding paragraph (iii), or (ii) standing
written instructions authorizing the automatic continuation of such LIBOR
Loans, which instructions shall be effective until written notice to the
Co-Agent by the Borrowers revoking the same (such notice to take effect no
sooner than three Business Days after receipt by the Co-Agent); provided that
no LIBOR Loans in respect of Tranche A Loans and UBOC Tranche B Loans may be
continued when any Event of Default has occurred and is continuing, but shall
be automatically converted to Base Rate Loans on the last day of the first
applicable Interest Period which ends during the continuance of such Event of
Default. Base Rate Loans shall be deemed to continue as such until receipt of
an Interest Rate Option Notice requesting conversion thereof to LIBOR Loans.
(v) FORM OF NOTICE. Each Interest Rate Option Notice shall be
substantially in form acceptable to the Co-Agent and shall specify: (i) the
aggregate principal amount of Tranche A Loans or UBOC Tranche B Loans to be
continued or converted; (ii) the proposed date thereof; (iii) if LIBOR Loans,
the Interest Period for such LIBOR Loans; and (iv) whether such Loans shall be
LIBOR Loans or Base Rate Loans. The Borrowers shall provide a copy of each
Interest Rate Option Notice to the Agent at the time the original is delivered
to the Co-Agent.
(c) TRANCHE B AND ACQUISITION LOANS. Subject to the provisions of
SECTION 9.02, (i) the interest rate applicable to the UBOC Tranche B Loans
shall be the LIBOR Rate plus three and one-half percentage points (3.50%) or
the Base Rate plus two and one-half percentage points (2.50%) as jointly
elected by the Borrowers, and (ii) the interest rate applicable to the AT&T-CFC
Tranche B Loans and the Acquisition Loans shall be the WSJ LIBOR Rate plus
three and one-half percentage points (3.50%).
(d) TRANCHE C LOANS. Subject to the provisions of SECTION 9.02, the
interest rate applicable to the Tranche C Loans shall be the WSJ LIBOR Rate
plus three and one-quarter percentage points (3.25%); provided, however, that
if either (i) Clear Channel fails to execute and deliver, and to maintain at
all times, the Clear Channel Guaranty in form and substance acceptable to the
holders of the Tranche C Loans, or (ii) Clear Channel defaults in the payment
or performance of any of its obligations under the Clear Channel Guaranty, or
(iii) the Arkansas Stations are at any time not the subject of a binding and
enforceable bona fide purchase and sale agreement on terms and in substance
acceptable to, and executed by a purchaser acceptable to, the holders of the
Tranche C Notes and the Agent (including, without limitation, a purchase price
of not less than $20,000,000.00), the interest rate applicable to the Tranche C
Loans shall be as follows (measured from the date of the occurrence of such
event):
30
<PAGE>
For Period of Time from The Interest Rate Applicable to Tranche C
Date of Notice of Occurrence: Loans shall be WSJ LIBOR Rate plus:
- ----------------------------- -----------------------------------
Day 1 through Day 60 3.25%
Day 61 through Day 90 3.75%
Day 91 through Day 180 4.50%
After Day 180 5.50%
(e) INTEREST PAYMENT DATES. Interest on the Tranche A Loans and UBOC
Tranche B Loans shall be payable quarterly in arrears without setoff, deduction
or counterclaim on the Quarterly Due Dates and at maturity, whether by reason
of acceleration, payment, prepayment or otherwise. Interest on all other Loans
shall be payable monthly in arrears without setoff, deduction or counterclaim
on the Monthly Due Dates and at maturity, whether by reason of acceleration,
payment, prepayment or otherwise. If the initial Advance in respect of an
AT&T-CFC Tranche B Loan, a Tranche C Loan or Acquisition Loan is made on or
before the 15th day of the month, the first interest payment in respect of such
Loan will be due on the first Monthly Due Date occurring after the date of such
Advance; in all other cases, the first interest payment in respect of a Loan
will be the second Monthly Due Date occurring after the date of such initial
Advance.
(f) INTEREST CALCULATIONS. Interest shall be computed on the basis of
a three hundred sixty (360) day year counting the actual number of days
elapsed. Each change in the interest rate hereunder and under the Notes which
is tied to the WSJ LIBOR Rate shall take effect without notice as of the first
(1st) day of each month based upon the first such WSJ LIBOR Rate published for
such month by The Wall Street Journal.
(g) DEFAULT RATE. The interest rate(s) in effect from time to
time are also subject to increase
from time to time in accordance with the provisions of SECTION 9.02.
SECTION 2.07. COMMITMENT FEE; UNUSED AVAILABILITY FEE; ADMINISTRATION
FEE.
(a) COMMITMENT FEE. In consideration of the Lenders entering into this
Agreement, the Borrowers agree jointly and severally to pay on the Closing Date
a non-refundable commitment fee (the "COMMITMENT FEE") in accordance with the
Fee Letter. Any earnest money deposit heretofore paid by the Borrowers to the
Lenders shall be credited against the Borrowers' obligations under SECTION
13.02 hereof, and the balance, if any, to the Commitment Fee.
(b) UNUSED AVAILABILITY FEE. The Borrowers agree jointly and severally
to pay to the Co-Agent, on behalf of the Tranche A Lenders and to AT&T-CFC, on
behalf of the Lenders having an Acquisition Loan Commitment, within thirty (30)
days of each Quarterly Due Date a fee (the "UNUSED AVAILABILITY FEE") which
shall be calculated, respectively, on the average daily amount of the unused
Tranche A Commitment during the preceding Fiscal Quarter and on the unused
Acquisition Loan Commitment as of the last day of the preceding Fiscal Quarter
at the rate of one-half of one percent (0.5%) per annum. The Unused
Availability Fee shall be computed on the basis of a 360 day year counting the
actual number of days elapsed. The first
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Unused Availability Fee shall be due and payable on November 1, 1997, for the
Fiscal Quarter ending September 30, 1997.
(c) ADMINISTRATION FEE. The Borrowers agree jointly and severally to
pay to the Agent and the Co-Agent on the Closing Date and annually on the 1st
day of June in each year commencing June 1, 1998 an Administration Fee (the
"ADMINISTRATION FEE") in accordance with the Fee Letter. The Administration Fee
shall be deemed fully earned when due and payable and no portion shall be
subject to refund.
SECTION 2.08. [THIS SECTION IS INTENTIONALLY OMITTED.]
SECTION 2.09. SECURITY FOR THE NOTES.
Each Borrower's obligations and indebtedness to the Lenders and to the
Agent hereunder and under the Notes to which it is a party shall be secured at
all times by:
(a) a Security Agreement of such Borrower of even date herewith
granting to the Agent and the Lenders a continuing first priority perfected
security interest in all presently owned and hereafter acquired tangible and
intangible personal property and fixtures of such Borrower (except for licenses
and permits issued by the FCC to the extent it is unlawful to grant a security
interest in such licenses and permits), subject only to any prior liens
expressly permitted under this Agreement;
(b) first mortgages or deeds of trust on all presently owned and
hereafter acquired real estate owned by such Borrower, subject only to any
prior liens expressly permitted under this Agreement, together with mortgagee's
title insurance policies acceptable to the Agent;
(c) except as waived by the Agent, first priority perfected collateral
assignments of, or leasehold mortgages or deeds of trust in respect of, all
real estate leases in which such Borrower now has or may in the future have an
interest, subject only to any prior liens expressly permitted under this
Agreement, together with such third party consents, lien waivers and estoppel
certificates as the Agent shall reasonably require;
(d) one or more Pledge Agreements executed by all stockholders of such
Borrower effecting thereby a first priority perfected pledge of (i) all
presently outstanding and hereafter issued shares of capital stock of the
Borrower, (ii) all voting trust certificates issued in respect of the capital
stock of the Borrower, or any extension or renewal thereof, and (iii) all
warrants, options and other rights to acquire any such shares;
(e) first priority perfected collateral assignments of such
construction contracts, management agreements, programming agreements, network
affiliation agreements, joint sales agreements, local marketing agreements,
licenses, permits, authorizations and agreements as the Agent shall deem
necessary to protect its interests, subject only to any prior license expressly
permitted under this Agreement, together with such third party consents, lien
waivers and estoppel certificates as the Agent shall reasonably require;
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(f) the subordination in favor of the Lenders, pursuant to
subordination agreements satisfactory to the Agent in form and substance
(collectively the "AFFILIATE SUBORDINATION AGREEMENTS"), of all indebtedness of
such Borrower to any Affiliates of such Borrower, designated by the Agent;
(g) the subordination in favor of the Lenders, pursuant to
subordination agreements satisfactory to the Agent in form and substance
(collectively, the "SUBORDINATION AGREEMENTS"), of all indebtedness of such
Borrower to any lenders to such Borrower and any creditors of such Borrower
holding a note or non-competition agreement executed by the Borrower, as
obligor thereunder, designated by the Agent, together with UCC-3 and such other
lien subordination documents as the Agent shall require;
(h) the joint and several, absolute and unconditional guaranties of
the Guarantors (the "Guarantees"), which shall be secured by security
agreements, mortgages, deeds of trust and such other agreements as the Managing
Agents shall reasonably require, creating first priority, perfected blanket
liens on all real and personal property of the Guarantors, except as otherwise
consented to by the Managing Agents;
(i) a collateral assignment (the "LIFE INSURANCE ASSIGNMENT") of life
insurance on the life of Norman Feuer in an amount not less than $2,500,000
(the "LIFE INSURANCE");
(j) an intercreditor agreement in form and substance acceptable to the
Agent executed by Havelock Bank with respect to Pinnacle Sports, TSPI and TSPN
(the "Havelock Agreement"); and
(k) in the case of the Tranche C Loan to TBLR and the intercompany
loan from TBO to TBLR of the proceeds of the Tranche C Loan made to TBO, the
Clear Channel Guaranty, in form and substance acceptable to the Agent.
All agreements and instruments described or contemplated in this
SECTION 2.09, together with any and all other agreements and instruments
heretofore or hereafter securing the Notes and each Borrowers' obligations
hereunder or otherwise executed in connection with this Agreement, shall in all
respects be acceptable to the Agent and its special counsel in form and
substance, and such agreements and instruments, as the same may be amended from
time to time, are sometimes hereinafter referred to collectively as the
"SECURITY DOCUMENTS" and individually as a "SECURITY DOCUMENT". Each Borrower
agrees to take such action as the Lenders or the Agent may reasonably request
from time to time in order to cause the Lenders and the Agent to be secured at
all times as described in this SECTION 2.09, and the Lenders' security
interests to be perfected at all times.
SECTION 2.10. USE OF PROCEEDS.
(a) PURCHASE OF ORIGINAL LOANS. The Borrowers acknowledge and agree
that (i) as of the date hereof there is outstanding an aggregate of
$40,000,000.00 in principal amount of
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Original Loans made to the Borrowers, and (ii) immediately prior to the
execution hereof, UBOC purchased from AT&T-CFC outstanding principal
indebtedness in the aggregate amount of $20,000,000.00 owed by the Borrowers
(other than TBLR) to AT&T-CFC in respect of the Original Loans (the "Loan
Purchase"). The Borrowers agree to pay to AT&T-CFC upon invoice all accrued
interest in respect of the Original Loans through the Closing Date.
(b) LOANS. $15,000,000.00 of the Tranche A Loans, and $19,000,000.00
of the Tranche B Loans are in substitution and replacement of the aggregate
principal amount of the Original Loans, and represent a continuation (not a
refinancing or reborrowing) of the outstanding obligations of the Borrowers
with respect to such Original Loans. The remaining $20,000,000.00 in proceeds
of the Tranche A Loans, together with the remaining $6,000,000.00 in proceeds
of the Tranche B Loan, and $14,000,000.00 in proceeds of the Tranche C Loans
shall be used in accordance with SCHEDULE 2.10 hereto.
SECTION 2.11. REQUIREMENTS OF LAW.
(a) In the event that any Regulatory Change shall:
(i) change the basis of taxation of any amounts payable to
any Lender under this Agreement or the Notes in respect of any Loans, including
without limitation LIBOR Loans (other than taxes imposed on the net income of
such Lender);
(ii) impose or modify any reserve, compulsory loan
assessment, special deposit or similar requirement relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of, any
applicable office of such Lender (including any of such Loans or any deposits
referred to in the definition of "LIBOR" in ARTICLE I); or
(iii) impose any other conditions affecting this Agreement in
respect of Loans, including without limitation LIBOR Loans (or any of such
extensions of credit, assets, deposits or liabilities);
and the result of any of the foregoing shall be to increase such Lender's costs
of making or maintaining any Loans, including without limitation LIBOR Loans,
or to reduce any amount receivable by such Lender hereunder in respect of any
of its LIBOR Loans, in each case only to the extent that such additional
amounts are not included in the LIBOR Rate applicable to such Loans, then the
Borrowers shall pay on demand to such Lender, through the Agent, and from time
to time as specified by such Lender, such additional amounts as such Lender
shall reasonably determine are sufficient to compensate such Lender for such
increased cost or reduced amount receivable.
(b) If at any time after the date of this Agreement any Lender shall
have determined that the applicability of any law, rule, regulation or
guideline adopted after the Closing Date pursuant to, or arising after the
Closing Date out of, the July 1988 report of the Basle Committee on Lending
Regulations and Supervisory Practices entitled "International Convergence of
Capital Measurement and Capital Standards", or the adoption or implementation
after the Closing Date
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of any other Regulatory Change regarding capital adequacy or any change after
the Closing Date in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof (whether or not having the force of
law), has or will have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of the existence of its obligations hereunder to a level below
that which such Lender or its holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount reasonably deemed by
such Lender to be material, then from time to time following written notice by
such Lender to the Borrowers as provided in paragraph (c) of this SECTION 2.11,
within fifteen (15) days after demand by such Lender, the Borrowers shall pay
to such Lender, through the Agent, such additional amount or amounts as such
Lender shall reasonably determine will compensate such Lender or such
corporation, as the case may be, for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this SECTION 2.11, it shall promptly notify the Borrowers of the
event by reason of which it has become so entitled. A certificate setting forth
in reasonable detail the computation of any additional amounts payable pursuant
to this SECTION 2.11 submitted by such Lender to the Borrowers shall be
presumed correct in the absence of manifest error. The covenants contained in
this SECTION 2.11 shall survive the termination of this Agreement and the
payment of the outstanding Notes. No failure on the part of any Lender to
demand compensation under paragraph (a) or (b) above on any one occasion shall
constitute a waiver of its rights to demand compensation on any other occasion.
The protection of this SECTION 2.11 shall be available to each Lender
regardless of any possible contention of the invalidity or inapplicability of
any law, regulation or other condition which shall give rise to any demand by
such Lender for compensation thereunder.
SECTION 2.12. LIMITATIONS ON LIBOR LOANS; ILLEGALITY.
(a) Anything herein to the contrary notwithstanding, if, on or prior
to the determination of an interest rate for any LIBOR Loans for any applicable
Interest Period, the Co-Agent shall determine (which determination shall be
conclusive absent manifest error) that:
(i) by reason of any event affecting United States money
markets or the London interbank market, quotations of interest rates for the
relevant deposits are not being provided in the relevant amounts or for the
relevant maturities for purposes of determining the rate of interest for such
Loans under this Agreement; or
(ii) the rates of interest referred to in the definition of
"LIBOR" in ARTICLE I, on the basis of which the rate of interest on any LIBOR
Loans for such period is determined, do not accurately reflect the cost to the
Lenders of making or maintaining such LIBOR Loans for such period;
then the Co-Agent shall give the Borrowers prompt notice thereof (and shall
thereafter give the Borrowers prompt notice of the cessation, if any, of such
condition), and so long as such
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condition remains in effect, the Lenders shall be under no obligation to make
LIBOR Loans or to convert Base Rate Loans into LIBOR Loans and the Borrowers
shall, at their sole discretion, on the last day(s) of the then current
Interest Period(s) for any outstanding LIBOR Loans, either prepay such LIBOR
Loans or convert such Loans into Base Rate Loans.
(b) Notwithstanding any other provision herein, if for any reason a
Lender shall be unable to make or maintain LIBOR Loans as contemplated by this
Agreement, such Lender shall provide prompt written notice to the Borrowers and
(i) such Lender's commitment hereunder to make LIBOR Loans, continue LIBOR
Loans as such and convert Base Rate Loans to LIBOR Loans shall thereupon
terminate (subject to reinstatement by such Lender at any such time as this
SECTION 2.12 shall no longer preclude LIBOR lending by such Lender) and (ii)
such Lender's Loans then outstanding as LIBOR Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then
current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a LIBOR Loan occurs on a
day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to SECTION 2.14.
SECTION 2.13. TAXES.
(a) All payments made by the Borrowers under this Agreement and the
Notes shall be made free and clear of, and without deduction or withholding for
or on account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority
(all such taxes, levies, imposts, duties, charges, fees, deductions and
withholdings being hereinafter called "TAXES"); provided, however, that the
term "TAXES" shall not include net income taxes or franchise taxes (imposed in
lieu of net income taxes) imposed on the Agent or any Lender, as the case may
be, as a result of a present or former connection or nexus between the
jurisdiction of the government or taxing authority imposing such tax (or any
political subdivision or taxing authority thereof or therein) and the Agent or
such Lender. If any Taxes are required to be withheld from any amounts payable
to the Agent or any Lender hereunder or under the Notes, the amounts so payable
to the Agent or such Lender shall be increased to the extent necessary to yield
to the Agent or such Lender (after payment of all Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in
this Agreement and the Notes. Whenever any Taxes are payable by the Borrowers
in respect of this Agreement or the Notes, as promptly as possible thereafter
the Borrowers shall send to the Agent for its own account or for the account of
such Lender, as the case may be, a certified copy of an original official
receipt received by the Borrowers showing payment thereof. If the Borrowers
fail to pay any Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary
evidence, the Borrowers shall, jointly and severally, indemnify the Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Agent or any Lender as a result of any such failure. If, after
any payment of Taxes by the Borrowers under this Section, any part of any Tax
paid by the Agent or any Lender is subsequently recovered by the Agent or such
Lender, the Agent or such Lender shall reimburse the Borrowers to the extent of
the amount so recovered. A
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certificate of an officer of the Agent or such Lender setting forth the amount
of such recovery and the basis therefor shall, in the absence of manifest
error, be conclusive. The agreements in this subsection shall survive the
termination of this Agreement, the expiration of all Letters of Credit, and the
payment of the Notes and all other amounts payable hereunder.
(b) Each Lender, if any, that is not incorporated under the laws of
the United States or a state thereof agrees that prior to the first date as of
which any payment is required to be made to it hereunder it will deliver to the
Borrowers and the Agent (i) two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 or successor applicable form, as the case may
be, and (ii) an Internal Revenue Service Form W-8 or W-9 or successor
applicable form. Each such Lender also agrees to deliver to the Borrowers and
the Agent two further copies of the said Form 1001 or 4224 and Form W-8 or W-9,
or successor applicable forms or other manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers, and such extensions or renewals
thereof as may reasonably be requested by the Borrowers or the Agent, unless in
any such case an event (including, without limitation, any change in treaty,
law or regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable or which
would prevent such Lender from duly completing and delivering any such form
with respect to it and such Lender so advises the Borrowers and the Agent. Such
Lender shall certify (x) in the case of a Form 1001 or 4224, that it is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes and (y) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax.
SECTION 2.14. INDEMNIFICATION. The Borrowers shall pay to the
Co-Agent, for the account of each Lender, upon the request of such Lender
delivered to the Co-Agent and thereafter delivered by the Co-Agent to the
Borrowers, such amount or amounts as shall compensate such Lender for any loss,
cost or expense incurred by such Lender (as reasonably determined by such
Lender) as a result of:
(a) any payment or prepayment or conversion of any LIBOR Loan held by
such Lender on a date other than the last day of the Interest Period for such
LIBOR Loan (including, without limitation, any such payment, prepayment or
conversion required under SECTION 2.05 or due to the acceleration of such Loan
pursuant to the terms hereof); or
(b) any failure by the Borrowers to borrow, convert into or continue a
LIBOR Loan on the date for such borrowing specified in the relevant Request for
Advances or Interest Rate Option Notice under SECTION 2.06 or otherwise.
Such indemnification may include an amount equal to the excess, if
any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to
the last day of such Interest Period (or, in the case of a failure to borrow,
convert or continue, the Interest Period that would have commenced on the date
of such failure) in each
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case at the applicable rate of interest for such Loans provided for herein
(excluding, however, the Applicable Margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank eurodollar market.
This covenant shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder. The determination by each
such Lender of the amount of any such loss or expense, when set forth in a
written notice delivered to the Co-Agent (and thereafter delivered by the
Co-Agent to the Borrowers and the Agent), containing such Lender's calculation
thereof in reasonable detail, shall be presumed correct in the absence of
manifest error.
SECTION 2.15. PAYMENTS UNDER THE NOTES. All payments made by the
Borrowers of principal of, and interest on, the Notes shall be made via wire
transfer in immediately available funds to the Agent, for the benefit of the
Lenders, for receipt by the Agent not later than 2:00 P.M. (New York Time), on
the date on which such payment shall become due. The failure by a Borrower to
make any such payment by such hour shall not constitute a default hereunder so
long as payment is received later that day, provided that any such payment made
after 2:00 P.M. (New York Time), on such due date shall be deemed to have been
made on the next Business Day for the purpose of calculating interest on
amounts outstanding on the Notes. The Borrowers shall, at the time of making
each payment under this Agreement or the Notes, specify to the Agent the Notes
or amounts payable by the Borrowers hereunder to which such payment is to be
applied (and in the event that it fails to so specify, or if an Event of
Default has occurred and is continuing, the Agent may distribute such payments
in such manner as the Majority Lenders may direct or, absent such direction, as
it determines to be appropriate, subject to the provisions of SECTION 2.17 and
the Intercreditor Agreement). Except as otherwise provided in the definition of
"INTEREST PERIOD" with respect to LIBOR Loans, if any payment hereunder or
under the Notes shall be due and payable on a day which is not a Business Day,
such payment shall be deemed due on the next following Business Day and
interest shall be payable at the applicable rate specified herein through such
extension period. Each payment received by the Agent under this Agreement or
any Note or other Loan Document for the account of a Lender shall be paid
promptly (and in any event within one (1) Business Day of receipt) to such
Lender, in immediately available funds, for the account of such Lender for the
Note in respect to which such payment is made.
SECTION 2.16. SET-OFF, ETC. Each Borrower agrees that, in addition to
(and without limitation of) any right of set-off, bankers' lien or counterclaim
a Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it (other than accounts as to which the Borrower is
acting solely as a fiduciary) for the account of such Borrower at any of its
offices, against any principal of or interest on the Notes held by such Lender
or other fees or charges owed to such Lender hereunder which are not paid when
due (regardless of whether such balances are then due to such Borrower), in
which case it shall promptly notify the Borrowers and the Agent thereof,
provided that such Lender's failure to give such notice shall not affect the
validity thereof and (as security for any Indebtedness hereunder) each Borrower
hereby grants to the Agent and the Lenders a continuing security interest in
any and all balances, credit, deposits, accounts or moneys of the Borrower
maintained with the Agent and any Lender now or hereafter
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(other than accounts as to which the Borrower is acting solely as a fiduciary).
If a Lender shall obtain payment of any principal, interest or other amounts
payable under this Agreement through the exercise of any right of set-off,
banker's lien or counterclaim or otherwise, it shall promptly purchase from the
other Lenders participations in (or, if and to the extent specified by such
Lender, direct interests in) the Note(s) held by the other Lenders in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
payment (net of any expenses which may be incurred by such Lender in obtaining
or preserving such benefit) pro rata in accordance with the unpaid principal
amounts of and interest on the Note(s) held by each of them within one Business
Day of such event. To such end, the Lenders shall make appropriate adjustments
among themselves (by the resale of participations sold or otherwise) within
five (5) Business Days if such payment is rescinded or must otherwise be
restored. Each Borrower agrees that any Lender or any other Person which
purchases a participation (or direct interest) in the Note(s) held by any or
all of the Lenders (each being hereinafter referred to as a "PARTICIPANT") may
exercise all rights of set-off, bankers' lien, counterclaim or similar rights
with respect to such participation as fully as if such Participant were a
direct holder of Notes in the amount of such participation, provided that the
Borrower was notified of such purchase. Nothing contained herein shall be
deemed to require any Participant to exercise any such right or shall affect
the right of any Participant to exercise, and retain the benefits of
exercising, any such right with respect to any indebtedness or obligation of
the Borrowers, other than the Borrowers' indebtedness and obligations under
this Agreement.
SECTION 2.17. PRO RATA TREATMENT; SHARING.
(a) Except to the extent otherwise provided herein or in the
Intercreditor Agreement: (i) each borrowing from the Lenders shall be made from
the Lenders, each payment of the Commitment Fee and the Unused Availability Fee
under SECTION 1.07 shall be made to the Lenders entitled to share in such fees,
and each reduction of the Commitments shall be applied to the Notes held by the
Lenders pro rata according to the amounts of their respective Commitments; (ii)
each payment and prepayment of principal of the Notes shall be made to the
Lenders pro rata in accordance with the respective unpaid principal amounts of
the respective Notes held by the Lenders; (iii) each payment of interest on the
Notes shall be made for the accounts of the Lenders and each payment of sums
and charges payable under this Agreement (except for the Agency Fee, the
Administration Fee, and the Unused Availability Fee, which are payable in
accordance with SECTION 2.07) shall be made to the Lenders pro rata in
accordance with the respective unpaid principal amounts of, and interest on,
the Loans made by each of them (calculated, as applicable, for each day of the
relevant payment period); (iv) each payment under SECTION 2.11, 2.13 or 2.14
shall be made to each Lender in the amount required to be paid to such Lender
pursuant to such Section for losses suffered or costs incurred by such Lender;
and (v) each distribution of cash, property, securities or other value received
by any Lender, directly or indirectly, in respect of the Borrowers'
Indebtedness hereunder, whether pursuant to any attachment, garnishment,
execution or other proceedings for the collection thereof or pursuant to any
bankruptcy, reorganization, liquidation or other similar proceeding, after
payment of collection and other expenses as provided herein and in the Security
Documents, shall be apportioned among the Lenders pro rata in accordance with
the respective unpaid principal amounts of and interest on the Notes or
participations in Letters of Credit held by each of them.
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(b) Notwithstanding the foregoing, if any Lender (a "RECOVERING
PARTY") shall receive any such distribution (a "RECOVERY") in respect thereof,
such Recovering Party shall pay to the Agent for distribution to the Lenders as
set forth herein their respective pro rata shares of such Recovery, as set
forth herein, unless the Recovering Party is legally required to return any
Recovery, in which case each party receiving a portion of such Recovery shall
return to the Recovering Party its pro rata share of the sum required to be
returned without interest. For purposes of this Agreement, calculations of the
amount of the pro rata share of each Lender shall be rounded to the nearest
whole dollar.
(c) Each Borrower acknowledges and agrees that, if any Recovering
Party shall be obligated to pay to the other Lenders a portion of any Recovery
pursuant to SECTION 2.17(B) and shall make such Recovery payment, the Borrowers
shall be deemed to have satisfied its obligations in respect of Indebtedness
held by such Recovering Party only to the extent of the Recovery actually
retained by such Recovering Party after giving effect to the pro rata payments
by such Recovering Party to the other Lenders. The obligations of each Borrower
in respect of Indebtedness held by each other Lender shall be deemed to have
been satisfied to the extent of the amount of the Recovery distributed to each
such other Lender by the Recovering Party.
SECTION 2.18. REPLACEMENT OF NOTES. Upon receipt of notice to the
Borrowers of the loss, theft, destruction or mutilation of any Note and, in the
case of any such loss, theft or destruction, upon delivery of an indemnity
agreement reasonably satisfactory to the Borrowers, or in the case of any such
mutilation, upon the surrender of such Note for cancellation, the Borrowers
will execute and deliver, in lieu of such lost, stolen, destroyed, or mutilated
Note, a new Note of like tenor.
III. CONDITIONS OF MAKING THE LOANS
SECTION 3.01. CONDITIONS TO CLOSING.
The obligation of the Lenders to make any Advance in respect of any
Loan hereunder, or to issue any Letter of Credit hereunder, is subject to the
satisfaction of the following conditions on the Closing Date (which shall not
be later than June 9, 1997):
(a) The representations and warranties set forth in this Agreement and
in the Security Documents shall be true and correct on and as of the date
hereof and shall be true and correct in all material respects as of the date
each Advance is made or Letter of Credit issued, as applicable, and the
Borrowers shall have performed all obligations which were to have been
performed by them hereunder prior to the date the Advance is made or Letter of
Credit issued.
(b) The Borrowers shall have executed and delivered to the Agent (or
shall have caused to be executed and delivered to the Agent by the appropriate
Persons) the following (each of which shall be in form and substance
satisfactory to the Managing Agents):
(i) The Notes;
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(ii) The Security Documents, together with any other
documents required or contemplated by the terms thereof;
(iii) Certified copies of resolutions of the Board of
Directors and Stockholders of each Borrower and Guarantor, with incumbency
certificate, authorizing the execution and delivery of this Agreement, the
Notes and the Security Documents, as applicable;
(iv) A copy of the corporate charter or articles of
incorporation, certified by the Secretary of State of the state of
organization, of each Borrower and Guarantor;
(v) A certified copy of the by-laws of each Borrower and
Guarantor;
(vi) Certificates of good standing (both as to corporation
law and tax matters) issued by the state in which each Borrower and Guarantor
is organized and any other state in which it is authorized, qualified or
required to be qualified to transact business;
(vii) True and correct copies of all material consents,
contracts, licenses, instruments and other documents specified in SCHEDULES
4.04, 4.13, 4.14 and 4.15;
(viii) Certificates of insurance evidencing the Life
Insurance and evidencing all other insurance coverage and policy provisions
required in this Agreement and the Security Documents;
(ix) A pay-off letter, UCC termination statements and
mortgage and lien releases from all lenders and creditors who are being paid
with the proceeds of the Loans;
(x) The Financial Consulting Agreement between SCMC, SFX
Broadcasting and the Parent, the Employment Agreement between the Parent and
Norman Feuer, all joint sales agreements, local marketing agreements and
similar agreements to which the Parent or any Borrower is a party, and such
other agreements as the Lenders shall require;
(xi) A certified and complete copy of the TBLR Asset Sale
Agreement, and copies of, or other satisfactory evidence of, the regulatory
filings required to be made thereunder with the FCC, the Department of Justice
and the Federal Trade Commission;
(xii) A certified and complete copy of the TBO Asset Purchase
Agreement, all instruments of transfer pursuant thereto and all opinions of
American Radio's counsel to TBO (each of which opinions shall authorize
reliance thereon by the Agent and the Lender);
(xiii) A certificate of the Borrowers confirming that, as of
the date of the Advance (or issuance of the Letter of Credit), all
representations and warranties contained in the Loan Documents are true,
accurate and complete, and no Event of Default or Unmatured Event of Default
exists; and
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(xiv) Such other supporting documents and certificates as the
Lenders may reasonably request, including, without limitation, current
financial statements of each Borrower and Guarantor, engineering reports,
appraisals and environmental and Hazardous Material assessments, reports and
questionnaires as the Lenders may reasonably request.
(c) The Borrowers shall have paid the Commitment Fee and the initial
Administration Fee to the Lenders.
(d) The Lenders and the Agent shall have received the favorable
written opinions of general counsel for the Borrowers, the Guarantors and the
Parent and FCC counsel for the Borrowers and the Parent dated as of the Closing
Date, satisfactory to the Lenders and the Agent in scope and substance.
(e) The Lenders and the Agent shall have received current financial
statements of the Parent, the Borrowers and the Guarantors in form and
substance acceptable to the Lenders, and such financial statements shall
confirm, inter alia, that the Borrowers' combined Adjusted Broadcast Cash Flow
for the most recent twelve (12) month period is not less than $10,000,000.00.
(f) The Lenders and the Agent shall have received (i) engineering
environmental reports on the Stations in form and substance acceptable to the
Lenders and the Agent, and (ii) environmental questionnaires and other evidence
satisfactory to the Lenders and the Agent confirming the absence of any
Hazardous Material on the Premises.
(g) The Agent shall have received written evidence reasonably
satisfactory to the Agent and its counsel that, except as otherwise disclosed
in SCHEDULE 4.21, all Leases covering tower and transmitter sites used by the
Stations have lease terms (including all extension and renewal options
exerciseable unilaterally by the Borrowers) through April 1, 2007.
(h) The transactions contemplated by the TBO Asset Purchase Agreement
shall have been consummated (except for the payment of that portion of the
purchase price thereunder being paid with the proceeds of Advances)
substantially in accordance with the terms thereof and, in any event, in a
manner reasonably satisfactory to the Agent, including, without limitation, (i)
the repayment in full in cash (simultaneously with, and from the proceeds of,
Advances or otherwise) of all Indebtedness of American Radio related to the
assets and properties transferred under such agreement which is not being
assumed by TBO, (ii) the valid assumption by TBO of all other liabilities of
American Radio in respect of such assets and properties, (iii) the consent to
such transaction by the FCC pursuant to a Final Order, and (iv) the execution
and delivery of the Reversal Agreement in form and substance acceptable to the
Agent.
(i) All legal matters incident to the transactions hereby contemplated
shall be satisfactory to special counsel for the Lenders.
(j) Neither an Event of Default nor an Unmatured Event of Default
shall have occurred and be continuing.
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(k) The Borrowers and the Parent shall have not less than $2,000,000
of working capital in the form of unrestricted available cash on hand in the
form of collected funds in unrestricted and available demand deposit accounts,
free and clear of all security interests, liens and encumbrances except
security interests in favor of the Lenders and the Agent.
(l) Each Borrower shall have executed and delivered to the Lender(s)
at least three (3) Business Days prior to the date of the requested Advance (or
such longer period as required by SECTION 2.01), a Request for Advance in the
form of EXHIBIT G hereto.
(m) The ratio of the Borrowers' Total Debt (exclusive, however, of the
Tranche C Loans) to the Borrowers' combined Adjusted Broadcast Cash Flow
(exclusive of TBLR's Broadcast Cash Flow) for the most recent twelve (12) month
period is less than 6.0:1.0.
SECTION 3.02. ACQUISITION LOANS. The obligations of the Lenders to
make any Advances to any Borrower to finance any subsequent Permitted
Acquisition after the Closing Date are subject to the following conditions:
(a) ACQUISITION CLOSING.
(i) The transactions contemplated by the applicable
Acquisition Agreement shall have been consummated (except for the payment of
that portion of the Purchase Price thereunder being paid with the proceeds of
Advances) substantially in accordance with the terms thereof and, in any event,
in a manner reasonably satisfactory to the Agent, including, without
limitation, (A) the repayment in full in cash (simultaneously with, and from
the proceeds of, Advances or otherwise) of all Indebtedness of the applicable
Seller(s) related to the assets and properties transferred under such
Acquisition Agreement which is not being assumed by the Borrowers, and (B) the
valid assumption by the Borrowers of all other liabilities of the applicable
Seller(s) in respect of such assets and properties.
(ii) The Agent shall have received evidence of the receipt of
all licenses, permits, approvals and consents, if any, required with respect to
such Acquisition and any other related transaction contemplated by this
Agreement (including, without limitation, any necessary consents of the FCC to
the sale contemplated by such Acquisition Agreement as evidenced by a Final
Order, and any other required consents or filings of or with applicable
governmental authorities or other third parties).
(iii) The applicable Seller(s) shall have consented to the
collateral assignment to the Agent of the rights of the Borrowers under the
Acquisition Agreement and any other agreements executed thereunder, as required
under SECTION 2.09.
(iv) The Agent shall have received copies of the legal
opinions delivered by the Seller(s) pursuant to the applicable Acquisition
Agreement in connection with such Acquisition, together with a letter from each
Person delivering an opinion (or authorization within the opinion) authorizing
reliance thereon by the Agent and the Lenders.
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(b) OFFICER'S CERTIFICATES AS TO COMPLIANCE, SOLVENCY, DOCUMENTS, ETC.
The Borrowers shall have provided to the Agent one or more compliance and other
closing certificates, in forms satisfactory to the Agent, executed on behalf of
the Borrowers by their chief executive officer or chief financial officer,
certifying as to satisfaction by the Borrowers of the conditions to lending set
forth in this SECTION 3.02 and in SECTION 3.03 and, specifically, as to certain
matters reasonably specified therein.
(c) SPECIAL COMPLIANCE CERTIFICATE. The Borrowers shall have executed
and delivered to the Agent a certificate of representations, warranties,
compliance and non-default satisfactory in form and substance to the Agent,
together with updated versions of SCHEDULES 4.04, 4.07, 4.08, 4.09, 4.10, and
4.17 to this Agreement and of the Exhibits to the Borrowers' Security
Agreements, and otherwise adjusting the Borrowers' representations and
warranties contained herein and therein, to the extent appropriate in
connection with such Acquisition and approved by the Majority Lenders (as
applicable under SECTION 7.04(I)) in writing in their sole discretion (which
certificate, only if so approved, shall be deemed an amendment of this
Agreement and such Security Documents and shall be incorporated by reference
herein and therein).
(d) OTHER DELIVERIES. The Borrowers shall have executed and/or
delivered to the Agent (or shall have caused to be executed and delivered to
the Agent by the appropriate persons), the following:
(i) All lien searches reasonably required by the Agent with
respect to the assets to be acquired pursuant to such Acquisition and the
applicable Seller(s) (and their predecessors as owners of such assets),
together with all Uniform Commercial Code financing statements and termination
statements and all Mortgages and related title insurance policies reasonably
required by the Agent in connection with the Borrowers' compliance with the
provisions of SECTION 2.09;
(ii) Certified copies of the resolutions of the Borrowers,
authorizing such Acquisition;
(iii) Such certificates of public officials and copies of
material consents, agreements and other documents and such other supporting
documents and information as the Agent shall reasonably request;
(iv) If requested by the Agent no more than five (5) Business
Days after the Borrowers' delivery to the Agent and its counsel of the
applicable Acquisition Agreement, including detailed schedules of all owned and
leased real property to be acquired thereunder, environmental site assessments
or such other information (including Environmental Questionnaires) with respect
to owned and leased real properties, which shall be reasonably satisfactory in
all respects to the Majority Lenders;
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(v) Such Uniform Commercial Code, Federal tax lien and
judgment searches as the Agent shall reasonably require, the results thereof to
disclose no liens except liens permitted by this Agreement and liens to be
discharged upon completion of such Acquisition;
(vi) A balance sheet for the Borrowers and the Station(s) to
be acquired and updated projections, pro forma, of the Acquisition and the
proposed Advances and showing financial covenant compliance;
(vii) A current balance sheet of the Seller and related
statements of income;
(viii) Certificates of insurance evidencing the additional
insurance coverage and policy provisions required in this Agreement;
(ix) Engineering and environmental reports obtained by the
Agent at the Borrowers' expense with respect to the properties to be acquired,
all in form and substance acceptable to the Agent; and
(x) Such other supporting documents and certificates as the
Agent or the Lenders may reasonably request.
(e) OPINIONS. The Agent shall have received the favorable written
opinions of general, FCC and local counsel to the Borrowers, dated the date of
such Advances, addressed to the Agent and the Lenders and reasonably
satisfactory to the Agent in scope and substance.
(f) LEGAL FEES. All reasonable legal fees and expenses of counsel to
the Agent referred to in SECTION 13.02 incurred through the date of such
Advances shall have been paid in full.
(g) REVIEW BY AGENT'S COUNSEL. All legal matters incident to the
transactions hereby and contemplated shall be reasonably satisfactory to
counsel for the Agent.
(h) REPAYMENT OF TRANCHE C LOANS. The Tranche C Loans shall have been
paid in full and the Tranche C Commitment reduced to zero.
SECTION 3.03. ALL LOANS. The obligations of the Lenders to make any
Advances (including the Advances made after the date hereof and the Letters of
Credit) are subject to the following conditions:
(a) All warranties and representations set forth (or, with respect to
representations and warranties contained in the Original Agreement, confirmed)
in this Agreement shall be true and correct in all material respects as of the
date such Advances are made or Letter of Credit issued, except to the extent
they relate specifically to an earlier date or are affected by transactions
occurring after the date hereof (or, as applicable, the Closing Date) and
permitted hereunder.
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(b) After giving effect to such Advances and Letters of Credit (both
as of the proposed date thereof and, on a pro forma basis, the last day of the
most recent fiscal quarter for which financial statements have been delivered
to the Lenders or required under SECTION 6.05), no Event of Default and no
Unmatured Event of Default shall have occurred and be continuing. Each
telephonic or written request for such Advance and Letter of Credit shall
constitute a representation to such effect as of the date of such request and
as of the date of such borrowing.
(c) No event(s) shall have occurred, and no circumstance(s) shall
exist, which individually or in the aggregate with other such circumstances or
events, (i) has had, or could reasonably be expected to have, an adverse effect
on the validity or enforceability of this Agreement or the other Loan Documents
in any material respect, (ii) has had, or could reasonably be expected to have,
a Material Adverse Effect, other than any such events or circumstances which
are generally applicable to the radio broadcast industry or to general economic
conditions, or (iii) has impaired, or could reasonably be expected to impair,
the ability of the Borrowers and the Guarantors to fulfill their obligations
under this Agreement, the Notes or any other Loan Document to which any
Borrower or Guarantor is a party.
(d) The Agent shall have received a properly completed Request for
Advance or Letter of Credit Request, as applicable, together with all such
financial and other information as the Agent shall require to substantiate the
current and pro forma certifications of no Event of Default and no Unmatured
Event of Default contained therein.
(e) The Agent shall have received such other supporting documents and
certificates as the Agent and the Majority Lenders may reasonably request.
SECTION 3.04. LENDER APPROVALS. For purposes of determining compliance
with the conditions precedent referred to in SECTIONS 3.01, 3.02 and 3.03, as
of the date hereof, as of the Closing Date, or, with respect to Advances made
or Letter of Credit issued hereafter, as of the date of such Advances or Letter
of Credit, as applicable, each of the Lenders shall be deemed to have consented
to, approved or accepted or be satisfied with each document or other matter
which is the subject of such Lender's consideration under any of the provisions
of such Sections, unless an officer of the Agent responsible for the
transactions contemplated by the Loan Documents (and, in the case of a Letter
of Credit, an officer of the Co-Agent responsible for the Letter of Credit
transaction contemplated by the Loan Documents) shall have received written
notice from such Lender at least five (5) Business Days prior to the date
hereof or the applicable borrowing date, as the case may be, specifying its
objection thereto and such Lender shall have failed to execute and deliver this
Agreement or to make available to the Borrower(s) such Lender's ratable share
of such Advances or Letter of Credit, as the case may be.
IV. REPRESENTATIONS AND WARRANTIES
The Borrowers hereby jointly and severally represent and warrant to
each of the Lenders, the Agent and the Co-Agent (which representations and
warranties shall survive the delivery of the Notes and the making of the Loans
and issuance of any Letters of Credit) that:
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SECTION 4.01. FINANCIAL STATEMENTS.
The Borrowers have heretofore furnished to the Lenders (a) the
combined and individual audited balance sheets of the Borrowers and Parent as
of December 31, 1996, and the statement of operations, changes in stockholders'
equity and changes in financial position of the Borrowers for the fiscal year
or other period ending on such date, and (b) combined and individual balance
sheets of the Borrowers and Parent as of March 31, 1997, prepared by the
Borrowers, and the statement of operations for the Fiscal Quarter then ended.
Said financial statements and balance sheet have been prepared in accordance
with generally accepted accounting principles applied on a basis consistent
with that of preceding periods, and are complete and correct in all material
respects and fairly present the financial condition of the Borrowers as at said
dates and the results of operations of the Borrowers for the periods indicated.
Since December 31, 1996, there has occurred no material adverse change in any
Borrower's business, assets, properties or condition (financial or otherwise)
other than as disclosed in said balance sheets and financial statements. No
Borrower has any contingent obligations, liabilities for taxes or unusual
forward or long-term commitments except as specifically mentioned in the
foregoing financial statements. All financial projections submitted to the
Lenders by the Borrowers are reasonable in light of all information presently
known by the Borrowers.
SECTION 4.02. ORGANIZATION, ETC.
Each Borrower, the Parent and each Guarantor (other than Pinnacle
Sports) (a) is a corporation duly organized and validly existing under the laws
of the State of Delaware and is duly qualified to transact business in each
jurisdiction where the nature of its activities requires such qualification,
(b) has the power and authority to own its properties and to carry on its
business as now being conducted and as presently contemplated, (c) has the
power and authority to execute and deliver, and perform its obligations under,
the TBO Asset Purchase Agreement, the TBLR Asset Sale Agreement, the Pinnacle
Sports Purchase Agreements, this Agreement, the Notes, Letter of Credit
Requests, the Security Documents and the other Loan Documents (collectively,
the "TRANSACTION DOCUMENTS") to which it is or shall become a party or
signatory, and (d) except as described in SCHEDULE 4.02 hereto, has no
subsidiaries as of the date hereof. Pinnacle Sports (i) is a limited liability
company duly organized and validly existing under the laws of the State of
Nebraska, (ii) has the power and authority to own its properties and to carry
on its business as now being conducted and as presently contemplated, has the
power and authority to execute and deliver, and perform its obligations under
the Transaction Documents. Effective November 1, 1996, Wichita Acquisition
Corp., a New York corporation, merged into TBW, and TBW is the surviving entity
after such merger.
SECTION 4.03. AUTHORIZATION; COMPLIANCE, ETC.
The execution and delivery of, and the performance by each Borrower or
Guarantor of its obligations under, the Transaction Documents have been duly
authorized by all requisite corporate action and will not violate any provision
of law, any order, judgment or decree of any court or other agency of
government (including, without limitation, the FCC), the corporate charter,
article of incorporation or by-laws of such Borrower or Guarantor or any
indenture,
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agreement or other instrument to which such Borrower or Guarantor is a party,
or by which such Borrower or Guarantor is bound, or be in conflict with, result
in a breach of, or constitute (with due notice or lapse of time or both) a
default under, or except as may be permitted under this Agreement, result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of such Borrower pursuant to, any
such indenture, agreement or instrument.
SECTION 4.04. GOVERNMENTAL AND OTHER CONSENTS.
Except as described in SCHEDULE 4.04 hereto, no Borrower or Guarantor
is required to obtain any consent, approval or authorization from, or to file
any declaration or statement with, any governmental instrumentality or other
agency, including, without limitation, the FCC, or any other Person, in
connection with or as a condition to the execution, delivery or performance of
any of the Transaction Documents, except for (a) filing of certain of the
Transaction Documents with the FCC, (b) from time to time, FCC authorizations
or filings required in the ordinary course of business of such Borrower or
Guarantor, (c) FCC consents and filings required in connection with the
exercise of certain rights and remedies under the Security Documents, (d)
notification to the FCC of the consummation of any assignment or transfer of
control of an FCC License, and (e) FCC consents and filings in connection with
the assignment of FCC Licenses to the License Subsidiaries as contemplated by
SECTION 6.17. All consents, approvals and authorizations described in SCHEDULE
4.04 have been duly granted and are in full force and effect on the date hereof
and all filings described in such Schedule have been properly and timely made.
SECTION 4.05. LITIGATION.
Except as disclosed in SCHEDULE 4.05 hereto, there is no action, suit
or proceeding at law or in equity or by or before any governmental
instrumentality or other agency, including, without limitation, the FCC, the
Department of Justice, or any arbitration board or tribunal, now pending or, to
the knowledge of the Borrowers, threatened (nor is any basis therefor known to
the Borrowers), (a) which questions the validity of any of the Transaction
Documents, or any action taken or to be taken pursuant hereto or thereto, or
(b) against or affecting any Borrower or Guarantor which, if adversely
determined, either in any case or in the aggregate, could have a Material
Adverse Effect. The Borrowers have no knowledge of any adverse action or
determination by the Department of Justice or the Federal Trade Commission in
respect to Clear Channel's Hart-Scott-Rodino filings in respect to the TBLR
Asset Sale Agreement.
SECTION 4.06. COMPLIANCE WITH LAWS AND AGREEMENTS.
Except as otherwise disclosed in SCHEDULE 4.06 hereto, no Borrower or
Guarantor is a party to any agreement or instrument or subject to any corporate
or other restriction materially and adversely affecting its business,
operations, properties, assets or condition, financial or otherwise. No
Borrower or Guarantor is in violation of any provision of its corporate
charter, articles of incorporation or by-laws and no Borrower or Guarantor is
in violation of any material indenture, agreement or instrument to which it is
a party or by which it is bound or, to the best of the Borrowers' knowledge and
belief, of any provision of law, the violation of which could have
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a Material Adverse Effect upon such Borrower or Guarantor, or any order,
judgment or decree of any court or other agency of government (including,
without limitation, the FCC). Without limiting the scope of the foregoing, (a)
each Borrower and Guarantor is in compliance in all material respects with all
federal and state laws and regulations, including all federal and state
securities laws and regulations and all rules, regulations and administrative
orders of the FCC, the violation of which could have a Material Adverse Effect,
and (b) no Borrower or Guarantor has or is now engaged in any illegal activity,
including without limitation, a pattern of racketeering activity, that could
subject any of any Borrower's assets to forfeiture or seizure.
SECTION 4.07. TITLE TO PROPERTIES.
(a) Except as specified on SCHEDULE 4.07 hereto, each Borrower and
Guarantor has good title to all of its properties and assets (including,
without limitation, the assets shown on the financial statements referred to in
SECTION 4.01), free and clear of all mortgages, security interests,
restrictions, liens and encumbrances of any kind, including, without
limitation, liens or encumbrances in respect of unpaid taxes, except liens and
encumbrances permitted under this Agreement. Each Borrower enjoys quiet
possession under all Leases to which it is a party as lessee, and all of such
Leases are valid, subsisting and in full force and effect. None of such Leases
contains any provision restricting the incurrence of indebtedness by the
lessee.
(b) On or about June 13, 1996, TBL consummated its acquisition of
radio broadcast stations KIBZ-FM (Lincoln, Nebraska), and KKNB-FM (Crete,
Nebraska) from Rock Steady, Inc., and Calvin and R. Suzanne Krueger, pursuant
to a certain Asset Purchase Agreement dated September 5, 1995, between Rock
Steady, Inc., a Nebraska corporation, and Lincoln Radio Acquisition Corp.
(c) On or about April 19, 1996, TBTC consummated its acquisition of
radio broadcast stations KIOK-FM (Richland, Washington) and KALE-AM (Richland,
Washington) pursuant to a certain Asset Purchase Agreement dated February 8,
1996, between Sterling Realty Organization Co., a Washington corporation, and
the Parent.
(d) On or about May 15, 1996, TBS consummated its acquisition of radio
broadcast stations KISC-FM (Spokane, Washington), KNFR-FM (Opportunity,
Washington) and KAQQ-AM (Spokane, Washington) pursuant to a certain Asset
Purchase Agreement dated February 21, 1996, between Silverado Broadcasting
Company, a California corporation, and the Parent.
(e) On or about April 9, 1996, TBO consummated its acquisition of
radio broadcast station KTNP-FM (formerly KRRK-FM) (Bennington, Nebraska),
pursuant to a certain Asset Purchase Agreement dated December 8, 1995, between
93.3, INC., a Nebraska corporation, and the Parent.
(f) On or about April 9, 1996, TBO consummated its acquisition of
radio broadcast station KXKT-FM (Glenwood, Iowa) pursuant to a certain Asset
Purchase Agreement dated December 8, 1995, between Valley Broadcasting, Inc.,
an Illinois corporation, and the Parent.
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(g) On or about January 24, 1996, TBL consummated its acquisition of
radio broadcast stations KTGL-FM (Beatrice, Nebraska) and KZKX-FM (Seward,
Nebraska) pursuant to a certain Purchase and Sale Agreement dated March 23,
1995 between Pourtales and the Parent.
(h) On or about September 13, 1995, TBW consummated its acquisition of
radio broadcast station KRBB-FM (Wichita, Kansas) pursuant to a certain Asset
Purchase Agreement dated February 9, 1995, between Marathon Broadcasting
Corporation, a New Jersey corporation, and Wichita Acquisition Corp., a New
York corporation.
(i) On or about November 19, 1996, (A) TBTC acquired all of the
capital stock of KOTY-FM, Inc., a Colorado corporation; (B) TBS acquired all of
the capital stock of KEYF Corporation, a Colorado corporation, (C) TBCS
acquired all of the capital stock of Pourtales Holdings, Inc., a Colorado
corporation (which corporation than held all of the capital stock of Springs
Radio, Inc., a Colorado corporation), and KVUU/KSSS, Inc., a Colorado
corporation; and on or about November 27, 1996, each of such subsidiary
corporations merged into the respective corporation holding such capital stock,
as a result of which TBTC, TBS and TBCS were the surviving entities.
(j) On or about January 9, l997, TBW consummated its acquisition of
radio broadcast stations KZSN-AM (licensed to Wichita, Kansas) and KZSN-FM
(licensed to Hutchinson, Kansas) from Southern Skies Corporation.
(k) On or about April 25, 1997, TBLR consummated its acquisition of
the Arkansas Stations from Southern Starr of Arkansas, Inc., and from Arkansas
Skies Corporation and Southern Skies Corporation, pursuant to, respectively,
that certain Asset Purchase Agreement dated July 15, 1996, and that certain
Asset Purchase Agreement dated February 8, 1996, as amended by letter agreement
dated November 26, 1996.
(l) On or about May 15, 1997, TSPI and TSPN consummated their
acquisition of all of the outstanding membership interests in Pinnacle Sports.
SECTION 4.08. INTERESTS IN OTHER BUSINESSES.
No Borrower or Guarantor holds or owns any of the issued and
outstanding capital stock, partnership interests or other ownership interests,
or any rights to acquire the same, of any corporation, partnership, firm or
entity, except that the Parent owns all of the capital stock of the Borrowers,
TSPI and TSPN, and TSPI and TSPN own all of the membership interests in
Pinnacle Sports..
SECTION 4.09. NO INSOLVENCY.
Neither the borrowings made by the Borrowers under this Agreement nor
the execution, delivery and performance of the Notes and the Loan Documents
render or will render a Borrower or Guarantor insolvent or unable to pay its
debts as they become due; no Borrower or Guarantor
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is contemplating either the filing of a petition by it under any state or
federal bankruptcy or insolvency laws or the liquidating of all or a
substantial portion of its property, and no Borrower has any knowledge of any
person contemplating the filing of any such petition against any Borrower or
Guarantor.
SECTION 4.10. FULL DISCLOSURE.
No statement of fact made by or on behalf of any Person (other than
the Lenders or the Agent) in this Agreement, the Security Documents, or any
certificate or schedule furnished to the Lenders or the Agent pursuant hereto
or thereto contains any untrue statement of a material fact or omits to state
any material fact necessary to make statements contained therein or herein not
misleading. There is no fact presently known to the Borrowers which has not
been disclosed to the Lenders and the Agent in writing which materially affects
adversely, or, as far as the Borrowers can foresee, will materially affect
adversely the business, operations, properties, assets or condition, financial
or otherwise, of the Borrowers or the Guarantors.
SECTION 4.11. TAX RETURNS.
Except as set forth in SCHEDULE 4.11 hereto, each Borrower and each
Guarantor has filed all federal, state and local tax returns required to be
filed, and has paid or made adequate provision for the payment of all material
federal, state and local taxes, franchise fees, charges and assessments. No
Borrower has taken any reporting positions for which it does not have a
reasonable basis and does not anticipate any further material tax liability
with respect to the tax years that have not been closed. For purposes of this
SECTION 4.11, the term "BORROWER" shall include each other Person with which a
Borrower files consolidated or combined income tax returns or reports.
SECTION 4.12. PENSION PLANS, ETC.
(a) PLANS. Except as set forth in SCHEDULE 4.12 hereto, neither the
Borrowers nor any entity with which the Borrowers would be aggregated (a
"COMMONLY CONTROLLED ENTITY") under SECTION 414(B), (C), (M), OR (O) of the
Code, maintains or contributes to any pension, profit sharing or other similar
plan providing for a program of deferred compensation to any employee or former
employee.
(b) FUNDING OF EMPLOYEE BENEFIT PLANS. All contributions and other
payments required to be made by the Borrowers or any Commonly Controlled Entity
to all employee benefit plans, as defined in SECTION 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), which either a
Borrower or any Commonly Controlled Entity maintains or to which any of them
contributes (the "EMPLOYEE BENEFIT PLANS") have been made or reserves adequate
for such purposes have been set aside and reflected on the Borrower's financial
statements. With respect to any such Employee Benefit Plan which is an employee
pension benefit plan, as defined in SECTION 3(2) of ERISA (an "EMPLOYEE PENSION
PLAN"), there is no accumulated funding deficiency, as defined in SECTION 302
of ERISA and SECTION 412 of the Code, and no waiver has been applied for or
obtained from the Internal Revenue Service of
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any minimum funding requirement under SECTION 412 of the Code. No lien has
arisen under SECTION 412(n) of the Code with respect to the assets of a
Borrower. No Borrower has any reason to believe that the level of contributions
required to be made to each multiemployer plan, as defined in SECTION
4001(A)(3) of ERISA to which the Borrower or any Commonly Controlled Entity
contributed or contributes (a "MULTIEMPLOYER PLAN") is not sufficient to
maintain the level of benefits under such plan now in effect or scheduled to
become effective in the future.
(c) FIDUCIARY DUTIES, PROHIBITED TRANSACTIONS AND ADMINISTRATION.
Neither a Borrower nor any Commonly Controlled Entity has breached any
fiduciary duty imposed on it under Part 4 of Title I of ERISA with respect to
any Employee Benefit Plan and has not engaged in any prohibited transaction, as
defined in Title I of ERISA and SECTION 4975 of the Code, involving any
Employee Benefit Plan for which no exemption is available. Each Employee
Benefit Plan has been and is administered in accordance with its terms and
applicable laws, rules and regulations.
(d) STATUS OF FUNDED PENSION PLANS. Each funded Employee Pension Plan
has been determined by the Internal Revenue Service to be qualified under
SECTION 401(A) or SECTION 403(A) of the Code and nothing has occurred which
would cause the loss of such qualification or the imposition of any tax
liability or penalty under the Code or ERISA on the Borrowers. With respect to
each Employee Pension Plan which is subject to Title IV of ERISA, other than
Multiemployer Plans, (1) neither a Borrower nor any Commonly Controlled Entity
has failed to make required contributions or incurred any liability to the
Pension Benefit Guaranty Corporation ("PBGC"), (2) no reportable event, as
defined in SECTION 4043(B) of ERISA, has occurred, (3) the actuarial present
value of the benefit liabilities, as defined in SECTION 4001(A)(16) of ERISA
("BENEFIT LIABILITIES"), does not exceed the net assets available to provide
the Benefit Liabilities. Neither a Borrower nor any Commonly Controlled Entity
knows of any facts or circumstances which might give rise to any liability to
the PBGC under Title IV of ERISA (other than for premium payments). With
respect to Multiemployer Plans, neither the Borrower nor any Commonly
Controlled Entity has withdrawn or partially withdrawn, as described in
Subtitle E of Title IV of ERISA, from any such plan and thereby incurred any
obligation to discharge a withdrawal liability (including but not limited to
any contingent or secondary withdrawal liability) within the meaning of
SECTIONS 4201 AND 4202 of ERISA to any Multiemployer Plan, and there exists no
condition or set of circumstances which presents a risk of the occurrence of
any withdrawal from or the partition, termination, reorganization or insolvency
of any Multiemployer Plan which could result in any liability to the Borrower
or any Commonly Controlled Entity.
(e) STATUS OF EMPLOYEE WELFARE PLANS. No Employee Benefit Plan which
is an employee welfare benefit plan, as defined in SECTION 3(1) of ERISA (an
"EMPLOYEE WELFARE PLAN"), provides for continuing benefits or coverage for any
participant (or beneficiary) after the termination of the participant's
employment except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA") and regulations thereunder or
by applicable state statutory law. With respect to any Employee Welfare Plan,
Borrowers and each Commonly Controlled Entity have complied with the notice and
continuation coverage requirements of COBRA and regulations thereunder such
that there would
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not result in any loss of deduction under SECTION 162 of the Code or any tax,
penalty or liability to the Borrowers.
(f) CLAIMS. There are no claims (other than claims for benefits in the
normal course), actions or lawsuits asserted or instituted with respect to, and
neither a Borrower nor any Commonly Controlled Entity has knowledge of any
threatened claims or litigation with respect to, any Employee Benefit Plan
(other than a Multiemployer Plan) or any fiduciary thereof.
SECTION 4.13. LICENSES, ETC.
(a) SCHEDULE 4.13 hereto accurately and completely lists all material
authorizations, licenses, permits and franchises granted or assigned to the
Borrowers and the Guarantors by the FCC or any other public or governmental
agency or regulatory body, including all material authorizations, licenses,
permits and franchises granted or assigned to (i) TBW for the operation of
radio stations KFH-AM (licensed to Wichita, Kansas), KQAM-AM (licensed to
Wichita, Kansas), KWSJ-FM (formerly KXLK-FM) (licensed to Haysville, Kansas),
KRBB-FM (licensed to Wichita, Kansas), KEYN-FM (licensed to Wichita, Kansas),
KZSN-AM (licensed to Wichita, Kansas) and KZSN-FM (licensed to Hutchinson,
Kansas) (collectively, referred to as the "TBW STATIONS"), (ii) TBL for the
operation of radio stations, KIBZ-FM (licensed to Lincoln, Nebraska), KKNB-FM
(licensed to Crete, Nebraska), KTGL-FM (licensed to Beatrice, Nebraska), and
KZKX-FM (licensed to Seward, Nebraska) (collectively referred to as the "TBL
Stations"), (iii) TBO for the operation of radio stations KTNP-FM (formerly
KRRK-FM) (licensed to Bennington, Nebraska) and KXKT-FM (licensed to Glenwood,
Iowa) (collectively referred to as the "TBO STATIONS"), (iv) TBTC for the
operation of radio stations KALE-AM (licensed to Richland, Washington), KTCR-AM
(licensed to Kennewick, Washington), KEGX-FM (licensed to Richland,
Washington), KIOK-FM (licensed to Richland, Washington) and FM translator
K232CB (licensed to Pendleton, Oregon) (collectively referred to as the "TBTC
STATIONS"), (v) TBS for the operation of radio stations KAQQ-AM (licensed to
Spokane, Washington), KISC-FM (licensed to Spokane, Washington), KNFR-FM
(licensed to Opportunity, Washington), KUDY-AM (licensed to Spokane,
Washington), KKZX-FM (licensed to Spokane, Washington), KEYF-AM (licensed to
Dishman, Washington) and KEYF-FM (licensed to Cheney, Washington) (collectively
referred to as the "TBS STATIONS"), (vi) TBCS for the operation of radio
stations KTWK-AM (licensed to Colorado Springs, Colorado), KVUU-FM (licensed to
Pueblo, Colorado), KVOR-AM (licensed to Colorado Springs, Colorado) and KSPZ-FM
(licensed to Colorado Springs, Colorado) (collectively referred to as the "TBCS
STATIONS"), (viii) TBLR for the operation of the Arkansas Stations, and (ix)
effective the Closing Date, TBO for the operation of KFAB/KGOR (transferred to
TBO pursuant to the TBO Asset Purchase Agreement), and the same constitute the
only material licenses, permits or franchises or other authorizations of any
public or governmental agency or regulatory body required or advisable in
connection with the conduct by the Borrowers and the Guarantors of their
respective businesses as presently conducted or proposed to be conducted (such
licenses, permits, franchises and authorizations, together with any extensions
or renewals thereof and any additional licenses, permits, franchises or
authorizations hereafter issued to the Borrowers and the Guarantors, or any of
them [including the licenses applicable to KFAB/KGOR] being herein sometimes
referred to collectively as the "LICENSES"). All existing Licenses are in full
force and effect, are duly issued
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in the name of, or validly assigned to, the Borrowers and the Guarantors who
have full power and authority to operate thereunder. Such Schedule also
specifies the expiration date of each existing License.
(b) TBW surrendered to the FCC all FCC licenses, authorizations and
permits relating to radio broadcast station KHAT-AM (heretofore licensed to
Lincoln, Nebraska).
SECTION 4.14. MATERIAL AGREEMENTS.
(a) SCHEDULE 4.14 hereto accurately and completely lists all material
agreements to which each Borrower and each Guarantor is a party, including,
without limitation, all Leases, joint selling agreements, local marketing
agreements, time brokerage agreements, network and all affiliation,
programming, engineering, consulting, employment, management and related
agreements, if any, which are presently in effect in connection with the
conduct of a Borrower's or Guarantor's business and the operation of the
Stations. All of the foregoing agreements are valid, subsisting and in full
force and effect and neither the Borrowers and Guarantors nor, to the best of
the Borrowers' knowledge and belief, any other parties, are in material default
thereunder.
(b) TBLR holds the TBLR Asset Sale Agreement and the Clear Channel
Guaranty which remain in full force and effect, and which have not been
assigned, amended, rescinded or terminated by any of the parties thereto.
(c) TBO holds the TBO Asset Purchase Agreement and the Reversal
Agreement which remain in full force and effect, and which have not been
assigned, amended, rescinded or terminated by any of the parties thereto.
(d) To the best of TBO's knowledge and belief, no challenge has been
filed to the transactions contemplated by the TBO Asset Purchase Agreement, the
license renewals contemplated by the Reversal Agreement, or the transactions
contemplated by the TBLR Asset Sale Agreement.
SECTION 4.15. OWNERSHIP OF BORROWERS.
SCHEDULE 4.15 hereto correctly sets forth the number of shares of each
Borrower's capital stock of each class authorized, the name of each of its
stockholders (the "STOCKHOLDERS"), and the number of shares of each class of
such capital stock owned by such Stockholders. Such Schedule also sets forth
the name of each Person holding a voting trust certificate in respect of the
shares of capital stock of each Borrower and the number of shares of the
capital stock of the Borrower deposited in exchange for each such certificate.
All of said outstanding shares are validly issued, fully paid and
non-assessable and are owned by such Stockholders as specified in such
Schedule, free of any assignment, pledge, lien, security interest, charge,
option or other encumbrance, except for liens and security interests granted to
the Lender, transfer restrictions noted on the certificate evidencing such
shares, transfer restrictions imposed by the FCC and other encumbrances
specified in such Schedule. Such Schedule also sets forth a description of all
warrants, options and other rights to acquire shares of the Borrowers' capital
stock of any class
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and the names of the holders thereof. No Borrower is obligated in any manner to
issue any additional shares, or options or rights to acquire any such shares,
of its capital stock.
SECTION 4.16. PATENTS, TRADEMARKS, ETC.
Each Borrower and each Guarantor owns or possesses all the patents,
trademarks, service marks, trade names, broadcast call letters, copyrights and
licenses, and all rights with respect to the foregoing, necessary for the
conduct of its business as now conducted, without any known conflict with the
rights of others.
SECTION 4.17. BROKERS, ETC.
Except for The Sillerman Companies, Inc., the Borrowers have not dealt
with any broker, finder, commission agent or other similar person in connection
with the Loans or the transactions contemplated by this Agreement. The
Borrowers covenant and agree jointly and severally to pay all such fees and
commissions due to The Sillerman Companies, Inc., and to indemnify and hold
harmless the Lenders and the Agent from and against, any broker's fee, finder's
fee or commission in connection with such transactions.
SECTION 4.18. ENGINEERING REPORTS.
The Lender has obtained, at Borrowers' expense, environmental and
engineering studies of KFAB/KGOR and their operating assets and properties, and
environmental and engineering reports with respect to all real estate owned by
the Borrowers. All information provided by the Borrowers to the engineers
making such studies in connection with such studies is true and complete to the
best of the Borrowers' knowledge and belief.
SECTION 4.19. ENVIRONMENTAL MATTERS. Except as may be otherwise
specifically stated in SCHEDULE 4.19 hereto:
(a) neither the Borrowers nor, to the best of the Borrowers' knowledge
and belief, any other Person has ever caused, permitted, or suffered to exist
any oil, friable asbestos, hazardous waste, hazardous substance, or other
hazardous or toxic material (as defined under applicable law including, but not
limited to, the Comprehensive Environmental Response, Comprehension and
Liability Act of 1980 ["CERCLA"], 42 U.S.C. SECTIONS 9601(14) AND (33), the
Resource Conservation and Recovery Act ["RCRA"], 42 U.S.C. SECTION 6903(5), the
Toxic Substances Control Act, or any comparable state statute or regulation
[collectively, "ENVIRONMENTAL LAWS"] all of which material is collectively
referred to herein as "HAZARDOUS MATERIAL") to be spilled, released, placed,
held, located or disposed of on, nor are any now existing on, any real estate
legally or beneficially owned by a Borrower or leased by a Borrower (the
"PREMISES"), or into the atmosphere, any body of water, any wetlands or the
Premises;
(b) to the best of the Borrowers' knowledge and belief after due
inquiry, no portion of the Premises has ever been used (whether by a Borrower
or, to the best of the Borrowers'
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knowledge and belief, by any other Person) as a treatment, storage or disposal
(whether permanent or temporary) site for any Hazardous Material;
(c) to the best of the Borrowers' knowledge and belief after due
inquiry, no notice of violation, lien or other notice has been issued by any
governmental agency with respect to the environmental condition of the
Premises, the improvements thereon, any other property owned by a Borrower, or
any other property which was previously included in the property description of
the Premises or such other real property, or with respect to the release of
Hazardous Material at, upon, under or within the Premises, the improvements or
such other real property, or the past or ongoing migration of Hazardous
Material from neighboring lands or to the Premises or the improvements;
(d) to the best of the Borrowers' knowledge and belief after due
inquiry, no asbestos-containing materials, PCBs, radon gas, or urea
formaldehyde foam insulation are located or present at, upon, under or within
the Premises or any improvements thereon;
(e) no underground storage tanks, whether in use or closed, are on or
under the Premises; and
(f) to the best of the Borrowers' knowledge and belief after due
inquiry, the Premises and all operations conducted on the Premises are in
compliance with all Environmental Laws.
SECTION 4.20. ENFORCEABILITY.
Assuming that this Agreement, the Security Documents and the other
Loan Documents have been duly authorized, executed and delivered by the Lenders
and the Agent, this Agreement, the Notes, the Security Documents and the other
Loan Documents constitute the legal, valid and binding obligations of the
Borrowers and the Guarantors who are signatories thereto, enforceable against
the Borrowers and the Guarantors in accordance with their respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally.
SECTION 4.21. STUDIO AND TOWER SITES.
SCHEDULE 4.21 hereto completely and accurately lists for each Borrower
all real estate owned by such Borrower and each real estate location utilized
by such Person as a studio, transmitter or tower site in the operation of any
of the Stations. As to each such site, SCHEDULE 4.21 sets forth (a) the name(s)
of the record owner(s) of such site, (b) in the case of each leased site, the
date of the Lease (and all amendments thereto), the expiration date thereof and
the terms of any applicable renewal or extension options exerciseable
unilaterally by the tenant thereunder, (c) the street address of such site, and
(d) the legal description for such site.
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SECTION 4.22. MARGIN STOCK. The Borrowers do not own or have any
present intention of acquiring any "margin stock" within the meaning of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal
Reserve System (herein called "MARGIN STOCK").
SECTION 4.23. INVESTMENT COMPANY ACT. None of the Borrowers is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company," or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
SECTION 4.24. LABOR MATTERS. None of the Borrowers or Guarantors is
experiencing any strike, labor dispute, slow down or work stoppage due to labor
disagreements which could reasonably be expected to have a Material Adverse
Effect; there is no such strike, dispute, slow down or work stoppage threatened
against any of the Borrowers or Guarantors; and none of the Borrowers or
Guarantors is subject to any collective bargaining or similar arrangements.
SECTION 4.25. ORIGINAL AGREEMENT. The Borrowers hereby confirm and
repeat to each of the Agent and the Lenders each of the representations and
warranties set forth in the Original Loan Agreement and in the certificates
delivered to AT&T-CFC in connection with the advances made by AT&T-CFC
thereunder, each of which representations and warranties was true and correct
in all material respects as of the date made and is true and correct in all
material respects as of the date hereof (except to the extent modified by this
Agreement).
V. FINANCIAL COVENANTS.
The Borrowers covenant and agree to and with each of the Lenders, the
Agent and the Co-Agent that, so long as any Lender has any obligation to extend
credit to the Borrowers, or any of them, hereunder, or there remains
outstanding any portion of the principal of, or interest on, the Notes, or any
of them, or there remains outstanding any other Indebtedness of the Borrowers
or the Parent, or any of them, to any Lender (including all outstanding and
unpaid fees and expenses and all outstanding Letters of Credit), whether now
existing or arising hereafter and whether under this Agreement, the Notes, the
Security Documents or otherwise, the Borrowers will, and, as applicable, will
cause their Subsidiaries to:
SECTION 5.01. TOTAL DEBT TO ADJUSTED BROADCAST CASH FLOW.
Maintain on a combined basis for each period of twelve (12)
consecutive months ending on the respective dates indicated below, a ratio of
the Companies' Total Debt to the Companies' combined Adjusted Broadcast Cash
Flow for such period of not more than the respective ratios set forth below:
For Twelve Month Period Ending on Ratio of Total Debt to Adjusted
the last day of Each Fiscal Quarter Broadcast Cash Flow to be
During Period Indicated: not more than:
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Closing Date through December 31, 1997 6.00:1.00
Calendar Year Ending December 31, 1998 5.25:1.00
Calendar Year Ending December 31, 1999 4.50:1.00
Calendar Year Ending December 31, 2000 3.75:1.00
Calendar Year Ending December 31, 2001 and 3.00:1.00
thereafter
For the purposes of this SECTION 5.01, the ratios required to be
calculated as of June 30, 1997, and September 30, 1997, shall include, as an
addition to Adjusted Broadcast Cash Flow pro forma cost savings of $350,000 and
$200,000, respectively.
SECTION 5.02. TOTAL INTEREST EXPENSE COVERAGE.
Maintain on a combined basis a ratio of (a) the Companies' combined
Adjusted Broadcast Cash Flow to (b) the Companies' Total Interest Expense, of
not less than the respective ratios set forth below for each period of twelve
(12) months ending on the last day of each Fiscal Quarter, commencing June 30,
1997 indicated below:
Ratio of Adjusted Broadcast
Last Day of Each Fiscal Quarter during Cash Flow to Total Interest
Period Indicated: Expense to be not less than:
----------------- ----------------------------
Closing Date through December 31, 1998 2.00:1.00
From and After January 1, 1999 2.50:1.00
SECTION 5.03. FIXED CHARGE COVERAGE RATIO; WORKING CAPITAL RATIO.
(a) Maintain on a combined basis at all times a ratio of (i) the
Borrowers' combined Broadcast Cash Flow plus available cash on hand (in an
amount not to exceed $2,000,000.00, exclusive of any Cash Collateral Deposits)
for the preceding twelve (12) months to (iii) the Borrowers' Fixed Charges
during such period of not less than 1.05:1.00.
(b) Maintain on a combined basis at all times a ratio of the
Borrowers' combined Current Assets to their combined Current Liabilities of not
less than 1.50:1.00.
SECTION 5.04. CAPITAL EXPENDITURES.
Not make or incur Capital Expenditures without the prior approval of
the Majority Lenders in excess of (a) One Million Dollars ($1,000,000.00) in
the aggregate on a combined basis as to all Borrowers during each of Fiscal
Years ending December 31, 1997 and 1998, or (b) Seven Hundred Fifty Thousand
Dollars ($750,000) in the aggregate on a combined basis as to all Borrowers, in
each Fiscal Year commencing with Fiscal Year ending December 31, 1999.
SECTION 5.05. CORPORATE OVERHEAD.
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(a) Be permitted to make and may make payments in respect of Corporate
Overhead (exclusive of dividend payments) only so long as
(i) (y) at the time of each such payment, after giving effect
thereto, neither an Event of Default nor an Unmatured Event of Default exists
or will occur as a result of such payment, by reason of a default in the
performance of the Borrowers' obligations under SECTION 5.01, 5.02 or 5.03
hereof or otherwise, and (z) the aggregate amount of all such Corporate
Overhead payments (exclusive of dividends to the Parent to the extent permitted
by SECTION 5.06, but including, without limitation, the payments described in
SECTION 5.05(B)) shall not exceed Two Million Dollars ($2,000,000.00) during
Fiscal Year ending December 31, 1997, or in each subsequent Fiscal Year, one
hundred five percent (105%) of the maximum amount permitted to be paid under
this CLAUSE (Z) during the immediately preceding Fiscal Year; or
(ii) if at the time of such payment, after giving effect
thereto, the conditions set forth in the preceding paragraph (i) are not
satisfied, the aggregate amount of all Corporate Overhead payments (exclusive
of dividends to the Parent to the extent permitted by SECTION 5.06 but
including, without limitation, the payments described in SECTION 5.05(B)) shall
not exceed Seven Hundred Fifty Thousand Dollars ($750,000.00) during Fiscal
Year ending December 31, 1997, or in each subsequent Fiscal Year, one hundred
five percent (105%) of the maximum amount permitted to be paid under this
paragraph (ii) during the preceding Fiscal Year. Corporate Overhead payments in
respect of dividends shall be subject to SECTION 5.06(B).
(b) Subject in all respects to the SCMC Subordination Agreements, not
pay consulting fees or other sums to SCMC or SFX Broadcasting or any other
Person in any Fiscal Year in excess of (i) $500,000 in the aggregate as to the
Borrowers and the Parent, plus (ii) any reasonable investment banking services
fees earned by SCMC or SFX Broadcasting pursuant to Section 5 of the Amended
and Restated Financial Consulting Agreement dated February 1, 1996, as amended
by letter dated February 21, 1996, the Termination and Assignment Agreement
dated April 15, 1996; provided that no such payment pursuant to this SECTION
5.05(B) shall be provided to the extent the $2,000,000 or $750,000 limitations
(as applicable), set forth in SECTION 5.05(A), would be exceeded.
SECTION 5.06. RESTRICTED PAYMENTS.
(a) Except as permitted by SECTION 5.05 OR 5.06(B) hereof, not
directly or indirectly declare, order, pay or make any Restricted Payment or
set aside any sum or property therefor.
(b) Unless there shall have occurred and be continuing an Event of
Default or an Unmatured Event of Default, or unless such an Event of Default or
Unmatured Event of Default shall arise as a result of the payment hereinafter
described,
(i) each Borrower may, to the extent otherwise permitted by
applicable law, declare and pay dividends to the Parent in cash during and
within seventy-five (75) days following the end of each calendar year as to
which the Parent files a consolidated tax return with
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the Borrowers, in an amount not to exceed the lesser of (A) the product of the
maximum marginal corporate Federal income tax rate plus the maximum marginal
corporate State income tax rate times the taxable income of such Borrower for
such calendar year (taxable income being the amount which would be reported on
a Federal income tax return for a C corporation [Form 1120 S or comparable
form]), or (B) such Borrower's allocable share of the Parent's total income tax
liability for such calendar year based on such consolidated tax return;
(ii) the Borrowers may, to the extent otherwise permitted by
applicable law, declare and pay dividends to the Parent to the extent necessary
to enable the Parent to make current preferred dividend payments in respect to
the Preferred Stock; and
(iii) the Borrowers may to the extent otherwise permitted by
law, declare and pay dividends in addition to those permitted by the preceding
paragraphs (i) and (ii) if at the time of such declaration and payment, after
giving effect thereto, the Companies' Leverage Ratio is less than or equal to
3.0:1.0.
SECTION 5.07. PINNACLE SPORTS SELLER DEBT.
Not permit the aggregate principal amount of all Indebtedness of TSPN
and TSPI to Dale M. Jensen and Paul R. Aaron to exceed $3,700,000, and not make
payments in respect thereof in any Fiscal Year except from the Excess Cash Flow
of the Borrowers, TSPN, TSPI and Pinnacle Sports from the preceding Fiscal Year
after having provided the Managing Agents with a certificate evidencing and
confirming pro forma compliance with all covenants contained herein, after
giving effect to such payment.
VI. AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees to and with each of the Lenders,
the Agent and the Co-Agent that, so long as any Lender has any obligation to
extend credit to any Borrower hereunder, or there remains outstanding any
portion of the principal of, or interest on, the Notes, or any of them, or
there remains outstanding any other Indebtedness of the Borrowers or the
Parent, or any of them, to any of the Lenders (including all outstanding fees
and expenses and outstanding Letter of Credit), whether now existing or arising
hereafter and whether under this Agreement, the Notes, or otherwise, each
Borrower will, and will cause each of its Subsidiaries to:
SECTION 6.01. PRESERVATION OF ASSETS; COMPLIANCE WITH LAWS, ETC.
(a) Do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its existence as a corporation, and all material
rights, licenses, permits and franchises (including all Licenses) and comply in
every material respect with all laws and regulations applicable to it and all
material agreements to which it is a party, the violation of which could have a
Material Adverse Effect;
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(b) At all times maintain, preserve and protect all material trade
names (including the call letters of the Stations); and
(c) Preserve all the remainder of its material property used or useful
in the conduct of its business and keep the same in good repair, working order
and condition (reasonable wear and tear and damage by fire or other casualty
excepted), and from time to time, make or cause to be made all needful and
proper repairs, renewals, replacements, betterments and improvements thereto,
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times.
SECTION 6.02. INSURANCE.
(a) Keep all of its insurable properties now or hereafter owned
adequately insured at all times against loss or damage by fire or other
casualty (including flood, to the extent such property is in a flood plain) to
the extent customary with respect to like properties of companies conducting
similar businesses; maintain commercial general liability, broadcaster's
liability, auto liability and worker's compensation insurance insuring such
Borrower to the extent customary with respect to companies conducting similar
businesses, and maintain business interruption insurance with extra expense in
respect of the Stations and the broadcasting businesses conducted by the
Borrower, in amount and form acceptable to the Agent, in each case issued by
financially sound and reputable insurers, and furnish to the Agent satisfactory
evidence of the same prior to closing and on or before any expiration date with
respect to such insurance; notify the Agent of any material change in the
insurance maintained on the Borrower's properties after the date hereof and
furnish the Agent satisfactory evidence of any such change; maintain insurance
with respect to its tower, transmission and studio facilities and related
equipment and other insurable properties in an amount equal to the full
replacement cost thereof; provide that each insurance policy shall: (a) as
appropriate, name the Agent, on behalf of the Lenders, as an additional insured
and/or as loss payee pursuant to a so-called "standard mortgagee clause", (b)
provide that no action of the Borrowers or any tenant or sub-tenant shall void
such policy as to the Agent or the Lenders, and (c) provide that the Agent
shall be notified of any proposed cancellation of such policy at least thirty
(30) days in advance thereof and that the Agent or the Lenders will have the
opportunity to correct any deficiencies justifying such proposed cancellation.
In the event that such Borrower shall default in the performance of its
obligations under this SECTION 6.02, the Agent or any of the Lenders may, at
its option, effect such insurance coverage with an insurer acceptable to the
Agent and add the premium(s) paid therefor to the principal amount of the
indebtedness incurred pursuant hereto, and the amount of such premium shall be
payable by the Borrower on demand with interest thereon at the highest rate
payable hereunder. In the event of a property or casualty loss, the Agent may
deliver to the Borrower the proceeds of any insurance thereon, provided that
(i) the Borrower shall use such proceeds for the restoration or replacement of
the property or asset which was the subject of such loss, (ii) the Borrower
shall have demonstrated to the reasonable satisfaction of the Agent that such
property or asset will be restored to substantially its previous condition or
will be replaced by substantially identical property or assets, and (iii) if
the Lenders had a security interest in and lien upon the property or asset
which was the subject of such loss, the Lenders shall have received if
requested by it, a favorable opinion from the Borrower's counsel, in form and
substance satisfactory to the
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Agent, as to the priority of the Lenders' security interests in and lien upon
such restored or replaced property or asset. Notwithstanding the foregoing, in
lieu of delivering such proceeds to the Borrower, the Agent shall have the
right (x) to retain such proceeds for the purpose of making disbursement
thereof to any contractors, subcontractors and materialmen to whom payment is
owed in connection with such restoration, or (y) to apply such proceeds in
payment of the Notes and all other outstanding Senior Debt in the event of a
total casualty loss to the insured properties.
(b) Maintain in effect at all times the Life Insurance and cause such
Life Insurance to be collaterally assigned to the Agent for the benefit of the
Lenders pursuant to the Life Insurance Assignment.
SECTION 6.03. TAXES, ETC.
Pay and discharge or cause to be paid and discharged all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income and profits or upon any of its property, real, personal or mixed, or
upon any part thereof, before the same shall become in default, as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
might become a lien or charge upon such properties or any part thereof;
provided, however, that the Borrower shall not be required to pay and discharge
or cause to be paid and discharged any such tax, assessment, charge, levy or
claim so long as the validity thereof shall be contested in good faith by
appropriate proceedings and it shall have set aside on its books adequate
reserves with respect to any such tax, assessment, charge, levy or claim, so
contested; and provided, further that, in any event, payment of any such tax,
assessment, charge, levy or claim shall be made before any of its property
shall be seized or sold in satisfaction thereof.
SECTION 6.04. NOTICE OF PROCEEDINGS, DEFAULTS, ADVERSE CHANGE, ETC.
Promptly (and in any event within five days of the Borrower's
discovery thereof) give written notice to each of the Lenders of (a) any
proceedings instituted or threatened by or in any federal, state or local court
or before any commission or other regulatory body, whether federal, state or
local, which, if adversely determined, could have a Material Adverse Effect;
(b) any notices of default received by the Borrower (together with copies
thereof, if requested by any Lender) with respect to alleged defaults under or
violations of any of its material licenses, permits or franchises (including
the Licenses), or any material agreements to which the Borrower is a party or
any alleged defaults with respect to any evidence of material Indebtedness of
the Borrower or any mortgage, indenture or other agreement relating thereto;
(c) any material adverse change in the condition, financial or otherwise, of
the Borrower, or (d) the occurrence of any Event of Default or Unmatured Event
of Default.
SECTION 6.05. FINANCIAL STATEMENTS AND REPORTS.
Furnish to the Agent (with a copy to be sent by the Borrower to each
of the Co-Agent and the Lenders):
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(a) Within one hundred twenty (120) days after the end of each Fiscal
Year, (i) the audited consolidated balance sheet and statements of income,
changes in financial position and sources and uses of funds of the Parent,
TSPN, TSPI, Pinnacle Sports, and the Borrowers, together with supporting
schedules and the auditor's work papers for each of the Borrowers supporting
the consolidation, prepared and certified by independent certified public
accountants selected by the Parent and reasonably acceptable to the Majority
Lenders (the "ACCOUNTANTS"), the form of such statements to be satisfactory to
the Majority Lenders and otherwise in form and substance satisfactory to the
Majority Lenders, showing the individual financial condition of each of the
Borrowers, TSPN, TSPI, Pinnacle Sports and the Parent at the close of such
Fiscal Year and the results of operations during such year, and containing a
statement to the effect that such Accountants have examined the provisions of
this Agreement and that, to the best of their knowledge, no Event of Default or
Unmatured Event of Default has occurred (or, if such an event has occurred, a
statement explaining its nature and extent); provided, however, that in issuing
such statement, such Accountants shall not be required to exceed the scope of
normal auditing procedures conducted in connection with their opinion referred
to above; and (ii) a consolidating schedule of the Borrowers' year-end
financial statements prepared by the Parent in form acceptable to the Majority
Lenders;
(b) Within fifty (50) days after the end of each month, (i) each
Borrower's and Parent's statements of income, together with supporting
schedules, prepared by each Borrower and Parent, as applicable, and certified
by its chief financial officer, such statements of income to be for the month
then ended and the period from the beginning of the then current Fiscal Year to
the end of such month (in each case subject to normal audit and year-end
adjustments), and (ii) its quarterly accounts receivable and accounts payable
reports in form and scope acceptable to the Majority Lenders;
(c) Within fifty (50) days after the end of each Fiscal Quarter (i) a
quarterly consolidating balance sheet and statements of income of the Parent,
TSPN, TSPI, Pinnacle Sports and the Borrowers, prepared by the Parent and the
Borrowers and certified by their chief financial officer, such financial
statements to be as of the end of such Fiscal Quarter, and for the period from
the beginning of the then current Fiscal Year to the end of such Fiscal
Quarter, (ii) consolidated and consolidating financial statements for the
Borrowers for the trailing twelve (12) month period ending on the last day of
such Fiscal Quarter, including statements of income for such period, prepared
by the Borrowers and certified by their chief financial officer; (iii) a
certificate in the form of EXHIBIT E hereto signed by the chief financial
officer of each Borrower setting forth the calculations contemplated in ARTICLE
V of this Agreement, and certifying as to the fact that such Persons have
examined the provisions of this Agreement and that no Event of Default or
Unmatured Event of Default has occurred (or, if such an event has occurred, a
statement explaining its nature and extent and setting forth the steps the
Borrowers propose to take to cure or prevent any Event of Default), and (iv)
listings of Trades and the accounts payable and Trades and the accounts
receivable of each Borrower;
(d) Promptly upon circulation or filing thereof, copies of any
material written reports issued by any Borrower or the Parent to any of its
stockholders, partners or any material creditors relating to such Borrower's or
Parent's financial condition;
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(e) Within ten (10) days after the receipt or filing thereof by the
Parent, the Borrower or any Affiliate of the Borrower, copies of (i) any
registration statements, prospectuses and any amendments and supplements
thereto, and any regular and periodic reports (including, without limitation,
reports on Form 10-K, Form 10-Q or Form 8-K), if any, filed by any of such
Persons with any securities exchange or commission or with the United States
Securities and Exchange Commission ("SEC"), and (ii) any letters of comment or
correspondence with respect to filings or compliance matters sent to any of
such Persons by any such securities exchange or commission or the SEC in
relation to the Parent, the Borrower or such Affiliate and its respective
affairs;
(f) Promptly upon their becoming available, and in any event within
thirty (30) days following receipt thereof, (i) subject to the provisions of
SECTION 6.11 hereof, all Arbitron and other ratings reports applicable to the
Borrowers with respect to the radio broadcast markets in which the Stations are
located and to which the Borrowers subscribe, and (ii) copies of all material
contracts relating to the Stations;
(g) Promptly upon their becoming available, and in any event within
five (5) days after the receipt or filing thereof by a Borrower, copies of any
periodic or special reports filed by such Borrower with the FCC, if such
reports indicate any material change in the business, operations, affairs or
condition of such Borrower or if copies thereof are requested by any Lender,
and copies of any material notices and other material communications from the
FCC which specifically relate to any Borrower, any Station or any License;
(h) At least thirty (30) days prior to the beginning of each Fiscal
Year, a budget for each Borrower and the Parent for such Fiscal Year containing
projections of income and expenses in form acceptable to the Managing Agents
and prepared on a basis consistent with projected results for such period
provided to and relied upon by the Lenders in approving the Loans and
establishing the covenants set forth in ARTICLE V hereof;
(i) Promptly upon receipt thereof, and in any event within five (5)
days after such receipt, copies of all correspondence and notices received by
the Borrowers from the Internal Revenue Service relating to any adverse action
or determination by the Internal Revenue Service in respect to each Borrower's
tax status under the Code;
(j) As soon as reasonably possible and in any event within ten (10)
days after request therefor, such other information regarding the operations,
assets, business, affairs and financial condition of the Borrowers as any
Lender may reasonably request from time to time, including, without limitation,
accounts payable and receivable reports.
SECTION 6.06. INSPECTION.
Permit employees, agents and representatives of the Agent and the
Lenders to inspect, during normal business hours, the Premises and the
Borrower's books and records and to make abstracts or reproductions thereof.
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SECTION 6.07. ACCOUNTING SYSTEM.
Maintain a standard system of accounting in accordance with generally
accepted accounting principles consistently applied and maintain the Fiscal
Year as its fiscal year.
SECTION 6.08. NOTICE OF PURCHASE OF REAL ESTATE AND LEASES.
Subject to SECTION 7.13 hereof, promptly notify the Agent in the event
that the Borrower shall purchase any real estate or enter into any Lease of
real estate or of equipment material to the operation of the Stations, supply
the Lenders with a copy of the related purchase agreement or of such Lease, as
the case may be, and, without limiting the generality of SECTION 2.05, if
requested by the Managing Agents, execute and deliver, or cause to be executed
and delivered, to the Agent on behalf of the Lenders a deed of trust or
mortgage or assignment, together with landlord consents, in the case of leased
property, satisfactory in form and substance to the Lender, granting a valid
first lien on such property (subject to the provisions of SECTIONS 2.05 and
7.02).
SECTION 6.09. ADDITIONAL ASSURANCES.
From time to time hereafter, execute and deliver or cause to be
executed and delivered, such additional instruments, certificates and
documents, and take all such actions, as the Agent shall reasonably request for
the purpose of implementing or effectuating the provisions of this Agreement,
the Notes, the Security Documents and the other Loan Documents, and upon the
exercise by the Agent of any power, right, privilege or remedy pursuant to this
Agreement or the Security Documents which requires any consent, approval,
registration, qualification or authorization of any governmental authority or
instrumentality, exercise and deliver all applications, certifications,
instruments and other documents and papers that the Agent may be so required to
obtain.
SECTION 6.10. ENVIRONMENTAL INDEMNIFICATION.
In respect of all environmental matters:
(a) comply strictly and in all respects with the requirements of all
federal, state, and local Environmental Laws; notify the Agent promptly in the
event of any spill, release or disposal of Hazardous Material on, or hazardous
waste pollution or contamination affecting, the Premises; forward to the Agent
promptly any notices relating to such matters received from any governmental
agency; and pay promptly when due any fine or assessment against the Premises;
(b) promptly notify the Agent upon becoming aware of any fact or
change in circumstances that would or reasonably could be expected to cause any
of the representations and warranties contained in SECTION 4.19 hereof to cease
to be true for any time before all Senior Debt is paid in full;
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(c) not become involved, and will not permit any tenant of the
Premises to become involved, in any operations at the Premises generating,
storing, disposing, or handling Hazardous Material or any other activity that
could lead to the imposition on the Agent or any of the Lenders, Borrower or
the Premises of any liability or lien under any Environmental Laws;
(d) immediately contain and remove any Hazardous Material found on the
Premises, which work must be done in compliance with applicable Environmental
Laws and at the Borrower's expense; and the Borrower agrees that the Agent or
the Majority Lenders have the right, at their sole option but at the Borrower's
expense, to have an environmental engineer or other representative review the
work being done;
(e) promptly upon the request of the Agent or the Majority Lenders,
based upon the reasonable belief that a hazardous waste or other environmental
problem exists with respect to the Premises, provide the Lenders with an
environmental site assessment report or an update of any existing report, all
in scope, form and content and performed by such company as may be reasonably
satisfactory to the Agent or the Majority Lenders; and
(f) indemnify, protect, defend, and hold harmless the Agent and each
Lender and each of its Affiliates, officers, directors, employees, attorneys,
consultants and agents (collectively called the "INDEMNITEES") from and against
any and all liabilities, obligations, losses, damages (including, without
limitation, consequential damages), penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of
counsel for and consultants of such Indemnitees in connection with any
investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), which may be imposed on,
incurred by, or asserted against such Indemnitees (whether direct, indirect, or
consequential) now or hereafter arising as a result of any claim for
environmental cleanup costs, any resulting damage to the environment and any
other environmental claims against the Borrower, the Agent, any of the Lenders,
or the Premises. The provisions of this SECTION 6.10(F) shall continue in
effect and shall survive (among other things) any termination of this
Agreement, payment and satisfaction of the Notes, and release of any
Collateral.
SECTION 6.11. RATINGS REPORTS.
Subscribe to and maintain in full force and effect at all times (to
the extent the same may be available) at Borrower's expense not less than one
rating report service covering each of the radio broadcast markets in which the
Stations are located.
SECTION 6.12. ACCOUNTS PAYABLE.
Pay its accounts payable on an average of not later than sixty (60)
days following their respective due dates; provided, however, that the Borrower
shall not be required to pay any account payable so long as the validity
thereof shall be contested in good faith by appropriate proceedings and the
Borrower shall have set aside adequate reserves with respect thereto.
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SECTION 6.13. INTEREST RATE PROTECTION.
(a) Within ninety (90) days after the Closing Date, enter into, and,
thereafter during periods when either (i) an Event of Default or Unmatured
Event of Default exists, or (ii) the Borrowers' Leverage Ratio for the prior
twelve (12) consecutive months is greater than or equal to 3.5:1.0, maintain in
full force and effect, one or more Rate Hedging Agreements containing terms and
conditions reasonably satisfactory to the Managing Agents generally prevailing
at such time and sufficient to ensure that at least fifty percent (50%) of the
aggregate principal amount of the Tranche A Loans and Tranche B Loans then
outstanding is protected at all times against increases in the applicable Base
Rate, LIBOR Rate or WSJ LIBOR Rate for a term extending for at least two (2)
years. Such Rate Hedging Agreements shall protect against increases in
six-month LIBOR above seven and one-half percent (7.50%) per annum.
(b) At least five (5) Business Days prior to the execution of any such
Rate Hedging Agreement, provide the form thereof to the Managing Agents for
their review and approval, and concurrently with the execution thereof, deliver
to the Managing Agents copies of each such executed Rate Hedging Agreement,
including any and all amendments thereto and substitutions therefor and such
other documentation relating thereto as the Managing Agents may from time to
time request.
SECTION 6.14. APPRAISALS.
If any Lender determines in good faith that it is required, by
applicable law or by the Comptroller of the Currency or any other Governmental
Authority, to obtain appraisals as to the market value of any Collateral,
obtain such appraisals, at the sole cost and expense of the Borrower and in
conformity with all requirements of applicable law, as in effect from time to
time.
SECTION 6.15. RECOMMENDED CORRECTIVE ACTION.
Within six (6) months of the Closing Date, complete to the reasonable
satisfaction of the Agent all corrective actions described in SCHEDULE 6.15.
SECTION 6.16. USE OF LOAN PROCEEDS.
Use and expend the proceeds of each Advance solely in accordance with
the requirements of this Agreement.
SECTION 6.17. LICENSE SUBSIDIARIES.
Not later than ten (10) Business Days after the Closing Date, provide
the Agent with evidence satisfactory to the Agent that each Borrower has
incorporated a wholly-owned subsidiary of such Borrower created for the purpose
of holding all FCC Licenses used by such Borrower, and not later than sixty
(60) days after the Closing Date, provide the Agent with evidence satisfactory
to the Agent, that each Borrower has, in accordance with applicable law,
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transferred all of its FCC Licenses to such subsidiary (individually, a
"License Subsidiary", and collectively, the "License Subsidiaries"). Within ten
(10) days of their incorporation, the License Subsidiaries shall execute
Guarantees and Security Documents in form and substance acceptable to the
Managing Agents pursuant to which the License Subsidiaries shall guarantee the
payment of all Senior Debt, shall grant security interests to the Agent and the
Lenders on all of their respective assets, and shall agree to such affirmative
and negative covenants as the Managing Agents shall reasonably require to
prohibit the incurring of additional Indebtedness and liens and engaging in any
other business by such License Subsidiaries. The Borrowers shall provide the
Agent promptly with the satisfactory opinions of the Borrowers' counsel and FCC
counsel, and satisfactory lien searches, with respect to the transactions
contemplated by this SECTION 6.17.
VII. NEGATIVE COVENANTS
Each Borrower covenants and agrees to and with each of the Lenders,
the Agent and the Co-Agent that, so long as any Lender has any obligation to
extend credit to any Borrower hereunder, or there remains outstanding any
portion of the principal of, or interest on, the Notes, or any of them, or
there remains outstanding any other Indebtedness of the Borrowers or the
Parent, or any of them, to any Lender (including all outstanding fees and
expenses and outstanding Letter of Credit), whether now existing or arising
hereafter and whether under this Agreement, the Notes, or any of them, or
otherwise, unless the Majority Lenders shall otherwise consent in writing, it
will not, and will not permit or cause any of its Subsidiaries to, directly or
indirectly:
SECTION 7.01. INDEBTEDNESS.
Incur, create, assume, become or be liable in any manner with respect
to, or permit to exist, any Indebtedness or liability, whether direct, indirect
or contingent, except:
(a) Indebtedness to the Lenders under this Agreement, the Notes, the
Guarantees and otherwise;
(b) Indebtedness with respect to trade obligations and other normal
accruals in the ordinary course of business; provided, however, that the
aggregate unpaid balance of all such obligations and accruals outstanding and
owed by the Borrowers and the Parent shall not exceed $500,000.00 at any time;
(c) Indebtedness under Capital Leases and Purchase Money Security
Agreements relating to the purchase price of office equipment and non-essential
broadcasting equipment to be used in the business of the Borrower, to the
extent such Indebtedness was permitted by SECTION 5.04 hereof at the time
incurred; provided, however, that the aggregate unpaid principal balance of all
Indebtedness (i) owed by the Parent and/or the Borrowers and permitted by this
paragraph (c) shall not exceed $500,000 outstanding at any time, or (ii) owed
by the Borrowers individually and permitted by this paragraph (c) shall not
exceed at any time the respective amounts set forth in SCHEDULE 7.01 hereto;
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(d) Indebtedness to any Affiliate, provided that such Indebtedness is
subject to the applicable Affiliate Subordination Agreement;
(e) Indebtedness existing on the date hereof and described in SCHEDULE
7.01 attached hereto; provided, however, that the terms of such Indebtedness
shall not be modified or amended, nor shall payment thereof be extended,
without the prior written consent of the Majority Lenders;
(f) Indebtedness in respect of endorsements of negotiable instruments
for collection in the ordinary course of business;
(g) Rate Hedging Obligations incurred pursuant to the Rate Hedging
Agreements required by SECTION 6.13; and
(h) Subordinated Debt specifically consented to by the Majority
Lenders and which is subordinated in writing in all respects in form and
substance acceptable to the Majority Lenders, with full subordination and
standstill provisions.
SECTION 7.02. LIENS.
Create, incur, assume, suffer or permit to exist any mortgage, pledge,
lien, charge or other encumbrance of any nature whatsoever on any of its assets
or capital stock, now or hereafter owned, other than:
(a) liens securing the payment of taxes, either not yet due or the
validity of which is being contested in good faith by appropriate proceedings,
and as to which it shall have set aside on its books adequate reserves;
(b) deposits under workmen's compensation, unemployment insurance and
social security laws, or to secure the performance of bids, tenders, contracts
(other than for the repayment of borrowed money) or Leases, or to secure
statutory obligations or surety or appeal bonds, or to secure indemnity,
performance or other similar bonds arising in the ordinary course of business;
(c) liens imposed by law, such as carriers', warehousemen's or
mechanics' liens, incurred by it in good faith in the ordinary course of
business, and liens with respect to judgments but only to the extent that (i)
any such judgment does not otherwise constitute an Event of Default pursuant to
CLAUSE (M) of ARTICLE VIII, and (ii) either (A) such lien is not prior or
senior to any of the liens granted to the Lenders and the Agent pursuant to the
Security Documents, or (B) such lien attaches solely to property of the
Borrower, if any, with respect to which the Lenders and the Agent do not have a
lien;
(d) security interests and liens in favor of the Lenders and the
Agent;
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(e) Capital Leases described in SECTION 7.01(C) and security interests
granted by Purchase Money Security Agreements to the extent permitted by
SECTION 7.01(C), provided that each such lien shall at all times be limited
solely to the item or items of property so acquired;
(f) restrictions, easements and minor irregularities in title which do
not and will not interfere with the occupation, use and enjoyment by the
Borrower of such properties and assets in the normal course of its business as
presently conducted or materially impair the value of such properties and
assets for the purpose of such business;
(g) security interests and liens securing the Indebtedness permitted
by SECTION 7.01(E) to the extent set forth in said SCHEDULE 7.01; and
(h) any other liens existing on the date hereof and described in
SCHEDULE 7.02 attached hereto.
SECTION 7.03. DISPOSITION OF ASSETS.
Sell, lease, transfer or otherwise dispose of any of its properties,
assets, rights, Licenses or franchises to any person, except in connection with
the replacement of equipment with other equipment of at least equal utility and
value (provided that the Lenders' and Agent's liens upon such newly-acquired
equipment have the same priority as the Agent's and the Lenders' liens upon the
replaced equipment) and the disposition without replacement of obsolete assets
not material, individually or in the aggregate, to the operation of its
business; provided, however, that in no event shall a Borrower sell, lease,
transfer or dispose of any material portion of the assets of, or enter into any
time brokerage agreement, local marketing agreement or similar arrangement in
respect of, a Station without the prior written consent of all of the Lenders,
which consent shall not be unreasonably withheld; provided, however, that the
aggregate fair market value of all assets and properties so conveyed by the
Borrowers shall not exceed Two Million Dollars ($2,000,000.00) during the term
of this Agreement unless otherwise consented to in writing by all Lenders. The
Net Sales Proceeds to be received upon sale of any Station (any Station sold
with the Lenders' written consent is herein referred to as a "TRANSFERRED
STATION") shall be applied to payment of the Senior Debt; provided, however,
that if the Parent requests use of the Net Sale Proceeds of a Transferred
Station for the purchase by a Borrower of one or more additional radio
broadcast stations (the "SUBSTITUTED STATIONS"), then the Lenders agree to
allow such proceeds to be used by such Borrower for such purpose (such proceeds
to be held by the Co-Agent in an interest-bearing account to be established and
then agreed upon by the Borrowers and the Co-Agent and pledged to the Lenders
pending satisfaction of such requirements) conditional upon the satisfaction of
each of the following requirements:
(i) no Event of Default or Unmatured Event of Default shall
have occurred and be continuing as of the date of such sale or as of any date
thereafter prior to consummation of such acquisition of the Substituted
Station;
(ii) the Majority Lenders shall have received and approved
up-to-date financial statements for the Substituted Station(s), in form and
substance acceptable to the
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Majority Lenders confirming to the Majority Lenders' reasonable satisfaction
that the financial condition of the Substituted Station(s) is not less
favorable than the Transferred Station(s) sold by the Borrower;
(iii) the acquisition of the Substituted Station(s) is
consummated pursuant to a Final Order approving such acquisition, within one
hundred eighty (180) days of the sale of the Transferred Station(s); and
(iv) the Parent and the Borrowers shall have complied in all
respects with the provisions of SECTION 7.04, and shall have executed and/or
delivered to the Lenders and the Agent such additional Security Documents and
opinions as the Majority Lenders and the Agent may reasonably require to
evidence and confirm the satisfaction of the foregoing requirements and the
requirements of SECTION 2.09 hereof with respect to the Substituted Station(s),
including, without limitation, the grant to the Agent and the Lenders of a
first priority perfected security interest and lien on all assets of the
Substituted Station(s).
SECTION 7.04. FUNDAMENTAL CHANGES; ACQUISITIONS.
(a) (i) Form any subsidiary (other than the License Subsidiaries) or
otherwise change the legal structure or organization of any Borrower; (ii)
permit or suffer any material amendment of its corporate charter, articles of
incorporation or by-laws; (iii) permit or suffer any amendment of any other
agreement which could have a Material Adverse Effect; (iv) dissolve, liquidate,
consolidate with or merge with, or otherwise acquire any radio broadcast
property (other than KFAB/KGOR) or all or any substantial portion of the
ownership interests or assets or properties of any corporation, partnership or
other entity or any other material assets (in each case, an "ACQUISITION"),
other than pursuant to Permitted Acquisitions and Capital Expenditures
permitted hereunder and other than purchases of inventory and supplies in the
ordinary course of business; or (v) redeem any capital stock, except for
redemption effected solely by the issuance of securities (A) in respect of
which the Borrowers or Companies have no obligation to redeem or to pay cash
distributions or dividends or to accord any other preferential treatment, (B)
the issuance of which does not result in any Event of Default and (C) which
shall have been collaterally assigned or pledged to the Agent as required
hereunder.
(b) As used herein, the term "PERMITTED ACQUISITION" shall mean any
Acquisition made after the Closing Date by any Borrower of radio broadcast
properties, provided that, in each case, the following conditions shall have
been satisfied in full:
(A) If such Acquisition involves the purchase of stock or
other ownership interests, the same shall be effected in such a manner as to
assure that the acquired entity is promptly merged into the Borrower, with the
Borrower being the surviving entity;
(B) (1) No later than thirty (30) days prior to the
consummation of any such Acquisition or, if earlier, ten (10) Business Days
after the execution and delivery of the related Acquisition Agreement, the
Borrower shall have delivered to the Agent (in sufficient copies for all the
Lenders) copies of executed counterparts of such Acquisition Agreement,
together with all
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Schedules thereto, the forms of any additional agreements or instruments to be
executed at the closing thereunder (to the extent available), and all
applicable financial information, including historical financial statements, a
detailed Capital Expenditures budget and ten (10) year projections, updated to
reflect such Acquisition and any related transactions, and a description of the
properties accompanied by applicable market rating books and other information
as the Managing Agents shall require, (2) promptly following a request
therefor, the Borrower shall have delivered to the Agent (with copies for all
of the Lenders) copies of such other documents relating to such Acquisition as
any Lender shall have reasonably requested, (3) all of the foregoing shall be
satisfactory to the Lenders, in their sole and absolute discretion, and (4)
promptly following the consummation of such Acquisition, the Borrower shall
have delivered to the Agent (with copies for all of the Lenders) certified
copies of the agreements, instruments and documents referred to above, to the
extent the same have been executed and delivered at the closing under such
Acquisition Agreement;
(C) The aggregate Purchase Price payable by the Borrower in
connection with such Acquisition (other than earn-outs, customary post-closing
adjustments, escrows, holdbacks, indemnities and Seller notes permitted by the
Majority Lenders) shall be payable in full on the date of such Acquisition;
(D) The Borrower shall not, in connection with any such
Acquisition, assume or remain liable with respect to any Indebtedness
(including any material tax or ERISA liability) of the related Seller, except
(i) to the extent permitted under SECTION 7.01 and (ii) obligations of the
Seller incurred in the ordinary course of business and necessary or desirable
to the continued operation of the underlying properties, and any other such
liabilities or obligations not permitted to be assumed or otherwise supported
by the Borrower hereunder shall be paid in full or released as to the assets
being so acquired on or before the consummation of such Acquisition;
(E) All other assets and properties acquired in connection
with any such Acquisition shall be free and clear of any liens, charges and
other encumbrances other than as permitted under SECTION 7.02;
(F) The Borrower shall have complied with all of the
provisions of SECTIONS 2.09, 3.02 AND 3.03 including the execution and delivery
of such additional agreements, instruments, certificates, documents, consents,
environmental site assessments, opinions and other papers as the Majority
Lenders may require;
(G) Immediately prior to any such Acquisition and after
giving effect thereto, no Event of Default or Unmatured Event of Default shall
have occurred or be continuing, including any default under the provisions of
ARTICLE V, (1) determined on a pro forma basis as of the end of and for the
fiscal quarter most recently ended prior to the date of such Acquisition for
which financial statements are required to be provided (and have been so
delivered) under SECTION 6.05 and (2) as reflected in the Borrower's updated
Projections referred to above, and the Borrower shall provide to the Agent and
the Lenders a certificate signed on behalf of the Borrower by its chief
financial officer demonstrating such compliance in reasonable detail;
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(H) The Borrower's equityholders shall have made additional
cash equity contributions to the Borrower with respect to such Acquisition in
an aggregate amount sufficient to assure that the Borrower shall be in actual
and pro forma compliance with all of its financial and other covenants and
agreements under this Agreement and the other Loan Documents, as required
above; and
(I) Any such Acquisition having a Purchase Price exceeding
$500,000, individually, shall have been approved in writing by the Majority
Lenders, in their sole and absolute discretion; and the aggregate Purchase
Price of all Acquisitions shall not exceed $20,000,000 unless approved in
writing by all Lenders, in their sole and absolute discretion.
(c) Any Acquisition which is subject to the prior written consent of
the Majority Lenders shall be in the sole and absolute discretion of such
Lenders and shall be subject to any and all conditions designated by such
Lenders in the exercise of such discretion, including without limitation,
compliance with the provisions of SECTION 2.09 and the execution and delivery
of such additional agreements, instruments, certificates, documents, consents,
environmental site assessments, opinions and other papers as such Lenders and
the Agent may require.
SECTION 7.05. MANAGEMENT.
Turn over the management of its properties, assets, rights, licenses
and franchises to any Person other than the Stockholders or, to the extent
permitted by applicable FCC rules and regulations, a full-time employee of the
Borrower.
SECTION 7.06. SALE AND LEASEBACK.
Enter into any arrangements, directly or indirectly, with any Person
whereby it shall sell or transfer any property, real, personal or mixed, used
or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property.
SECTION 7.07. INVESTMENTS.
Except for Permitted Investments and Permitted Acquisitions, purchase,
invest in or otherwise acquire or hold securities (including, without
limitation, capital stock and interests in general or limited partnerships,
either as a general or limited partner or otherwise) and evidences of
indebtedness of, or make loans or advances to, or enter into any arrangement
for the purpose of providing funds or credit to, any other Person.
SECTION 7.08. CHANGE IN BUSINESS.
Engage, directly or indirectly, in any business other than that of
operating the Stations.
SECTION 7.09. ACCOUNTS RECEIVABLE.
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Sell, assign, discount or dispose in any way of any accounts
receivable, promissory notes or trade acceptances held by the Borrower, with or
without recourse, except for collection (including endorsements) in the
ordinary course of business.
SECTION 7.10. TRANSACTIONS WITH AFFILIATES.
Except as may be provided in or contemplated by SCHEDULE 2.10 hereto
or otherwise specifically permitted by this Agreement, enter into any
transaction, including, without limitation, the purchase, sale or exchange of
property or assets or the rendering or accepting of any service with or to any
Affiliate of the Borrower except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's business and upon
terms not less favorable to the Borrower than it could obtain in a comparable
arm's-length transaction with a third party other than such Affiliate.
SECTION 7.11. AMENDMENT OF CERTAIN AGREEMENTS.
Amend or modify in any material respect any License, any agreement or
instrument evidencing Subordinated Debt, or any material agreement listed in
SCHEDULE 4.14 to which the Borrower is a party, without the prior written
consent of the Majority Lenders.
SECTION 7.12. ERISA.
(a) Fail, or permit any Commonly Controlled Entity to fail, to comply
with the requirements of ERISA with respect to any Employee Benefit Plan; (b)
permit any funded Employee Pension Plan to lose its qualified status under
Section 401(a) or 403(a) of the Code; (c) fail, or permit any Commonly
Controlled Entity to fail, to meet the minimum funding standards of Section 302
of ERISA and Section 412 of the Code; (d) fail, or permit any Commonly
Controlled Entity to fail, to discharge any obligations to the PBGC with
respect to the termination of an Employee Pension Plan or to any Multiemployer
Plan on account of its withdrawal or partial withdrawal therefrom or allow to
exist any event or condition which presents a substantial risk of Borrower
incurring liability to the PBGC by reason of the termination of any Employee
Pension Plan; (e) create or adopt, or permit any Commonly Controlled Entity to
create or adopt, any new Employee Pension Plan without the prior written
consent of the Majority Lenders; (f) modify, or permit any Commonly Controlled
Entity to modify, any existing Employee Pension Plan so as to increase its
obligations thereunder, except in the ordinary course of business consistent
with past practice or with the prior written consent of the Majority Lenders;
(g) create or adopt any new Employee Welfare Plan or modify any existing
Employee Welfare Plan, or permit any Commonly Controlled Entity to create or
adopt any new Employee Welfare Plan or modify any existing Employee Welfare
Plan, to provide continuing benefits or coverage for any participant (or
beneficiary) after the termination of the participant's employment except as
may be required by COBRA, regulations thereunder or applicable state statutory
law or with the prior written consent of the Majority Lenders; or (h) engage,
or permit any Commonly Controlled Entity to engage, in any transaction which
would reasonably result in the assessment of a direct or indirect liability to
Borrower or any Commonly Controlled Entity under Section 409 or 502 of ERISA or
Section 4975 of the Code.
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SECTION 7.13. ACQUISITION OF ASSETS.
Except as otherwise specifically permitted by this Agreement, purchase
or acquire any real property or additional broadcast properties (including any
time brokerage or local marketing agreement) without the Majority Lenders'
prior written consent.
SECTION 7.14. ILLEGAL ACTIVITIES.
Engage in any conduct or activity, including, without limitation, a
pattern of racketeering activity, that could subject any of the Borrower's
assets to forfeiture or seizure.
SECTION 7.15. MARGIN STOCK.
Use or permit the use of any of the proceeds of the Loans, directly or
indirectly, for the purpose of purchasing or carrying, or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry, any Margin Stock or for any other purpose which might constitute the
transactions contemplated hereby a "purpose credit" within the meaning of
Regulation U (12 CFR Part 221) of the Board of Governors of the Federal Reserve
System, or cause any Loan, the application of proceeds thereof or this
Agreement to violate Regulation G, Regulation U, Regulation T or Regulation X
of the Board of Governors of the Federal Reserve System or any other regulation
of such Board or the Securities Exchange Act of 1934, as amended, or any rules
or regulations promulgated under such statutes.
SECTION 7.16. NEGATIVE PLEDGES, ETC.
Enter into any agreement (excluding this Agreement or any other
Transaction Document) prohibiting (a) the Borrower from amending or otherwise
modifying this Agreement or any other Transaction Document, or (b) the creation
or assumption of any lien upon the properties, revenues or assets of the
Borrower, whether now owned or hereafter acquired.
VIII. DEFAULTS
Each of the following events (each of which is herein sometimes called
an "EVENT OF DEFAULT") shall constitute an Event of Default under this
Agreement:
(a) any representation or warranty made in this Agreement, a Security
Document, or any other Transaction Document, or in any report, certificate,
financial statement or other instrument furnished in connection with this
Agreement, or the borrowings hereunder, shall prove to be false or misleading
in any material respect; or
(b) default in the payment of any installment of the principal of a
Note or the principal of any other Indebtedness of a Borrower to any Lender or
to the Agent, whether now existing or hereafter arising, when the same shall
become due and payable, whether at the due
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date thereof or at a date fixed for prepayment or by acceleration or otherwise,
and continuation of such default for ten (10) days following the date such
payment is due and payable; or
(c) default in the payment of any fee, rental, expense, or other
obligation payable by the Borrower to any Lender or any installment of any
interest or premium on a Note or on or in respect of any other Indebtedness or
Rate Hedging Obligation of a Borrower to any Lender or to the Agent, whether
now existing or hereafter arising, when the same shall become due and payable,
whether at the due date thereof or at a date fixed for prepayment or by
acceleration or otherwise, and continuation of such default for ten (10) days
following the date such payment is due and payable; or
(d) default in the due observance or performance by any Person other
than the Lenders or the Agent of any covenant, condition or agreement contained
in ARTICLES II, III, V, VI AND VII of this Agreement, or in any Security
Document, Loan Document or Rate Hedging Agreement and, in the case of a default
under any Security Document, continuance of such default unremedied for more
than the applicable period of grace, if any, specified thereon; or
(e) default in the due observance or performance of any other
covenant, condition or agreement, on the part of any Person other than the
Lenders or the Agent to be observed or performed pursuant to the terms hereof
or any other agreement by and between the Borrowers or Guarantors, or any of
them, on the one hand and the Lenders and the Agent on the other, which default
shall continue unremedied for thirty (30) days after the earlier to occur of
(i) a Borrower's discovery of such default, or (ii) written notice thereof from
a Lender or the Agent to the Borrowers; provided, however, that if such default
cannot be remedied, then such default shall be deemed to be an Event of Default
as of the date of the occurrence thereof; or
(f) for any reason any Security Document at any time shall not be in
full force and effect in all material respects or shall not be enforceable in
all material respects in accordance with its terms, or any material security
interest or material lien granted pursuant thereto shall fail to be perfected,
or any party thereto other than the Lenders or the Agent shall contest the
validity of any material lien granted under, or shall seek to disaffirm or
reduce its obligations under, any Security Document; or
(g) any Event of Default, as defined in any Security Document and the
continuance of such default unremedied for more than the applicable period of
grace, if any, specified therein; or
(h) default with respect to any Subordinated Debt or any other
evidence of Indebtedness of a Borrower for borrowed money; default with respect
to any other Indebtedness or under any agreement giving rise to monetary
remedies, which, when aggregated with all other such defaults, exceeds $50,000,
if the effect of such default is to permit the holder of such Indebtedness to
accelerate the maturity of such Indebtedness; or if any Indebtedness is not
paid at maturity; or default by a Borrower under the Joint Sales Agreement with
Citadel Broadcasting Company or any other joint sales agreement which results
in termination of such agreement; or
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(i) the on-the-air broadcast operations of any Station or Stations
having gross revenues for the immediately preceding twelve (12) months equal to
or greater than $360,000.00 in the aggregate, shall be interrupted at any time
for more than forty-eight (48) hours (or, in the event of force majeure,
seventy-two (72) hours), whether or not consecutive, during any period of ten
(10) consecutive days; or
(j) (i) a Borrower shall lose, fail to keep in force, suffer the
termination, suspension or revocation of, or terminate, forfeit or suffer an
amendment to, any License at any time held by it, which would have a Material
Adverse Effect; (ii) the FCC shall schedule or conduct a hearing on the renewal
or revocation of any material License held by a Borrower and the Majority
Lenders shall reasonably and in good faith believe that the result thereof
shall be the termination, revocation, suspension, or material adverse amendment
of such License; or (iii) any governmental regulatory authority shall commence
an action or proceeding seeking the termination, suspension, revocation or
material adverse amendment of any material License held by a Borrower and the
Majority Lenders shall reasonably and in good faith believe that the result
thereof shall be the termination, revocation, suspension or material adverse
amendment of such License; or
(k) a Borrower shall (i) discontinue its business or operation of a
Station, (ii) apply for or consent to the appointment of a receiver, trustee,
custodian or liquidator of it or any of its property, (iii) admit in writing
its inability to pay its debts as they mature, (iv) make a general assignment
for the benefit of creditors, (v) be adjudicated a bankrupt or insolvent or be
the subject of an order for relief under Title 11 of the United States Code, or
(vi) file a voluntary petition in bankruptcy, or a petition or an answer
seeking reorganization or an arrangement with creditors or to take advantage of
any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute, or an answer admitting the material allegations
of a petition filed against it in any proceeding under any such law, or
corporate action shall be taken for the purpose of effecting any of the
foregoing; or
(1) there shall be filed against a Borrower an involuntary petition
seeking reorganization of such Borrower or the appointment of a receiver,
trustee, custodian or liquidator of a Borrower or any material part of its
assets, or an involuntary petition under any bankruptcy, reorganization or
insolvency law of any jurisdiction, whether now or hereafter in effect (any of
the foregoing petitions being herein referred to as an "INVOLUNTARY PETITION");
or
(m) final judgment for the payment of money which, when aggregated
with all other outstanding judgments against a Borrower, exceeds $50,000, shall
be rendered against a Borrower, if the same shall remain undischarged (unless
fully bonded upon terms satisfactory to the Lender) for a period of thirty (30)
consecutive days; or an execution in respect of any judgment against the
Borrower shall have issued; or
(n) the occurrence of any attachment of any deposits or other property
of a Borrower in the hands or possession of any Lender, or the occurrence of
any attachment of any other property of a Borrower in an amount exceeding
$50,000 in the aggregate which shall not be
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discharged or fully bonded on terms satisfactory to the Agent within thirty
(30) days of the date of such attachment, or if an execution in respect of such
judgment shall have issued; or
(o) the occurrence of any event or condition described in paragraph
(k) or (1) with respect to any Surety; or
(p) for any reason Norman Feuer shall cease to be actively engaged as
chief executive officer of each Borrower on a full-time basis in the management
of the Stations; or
(q) for any reason less than one hundred percent (100%) of the issued
and outstanding capital stock of each Borrower is owned by the Parent and
pledged to the Lenders and the Agent on terms acceptable to the Agent; or
(r) a Borrower shall make a material change in a Station's format
without the prior written consent of the Lender (which consent shall not be
unreasonably withheld) and the Borrowers shall fail to refinance and pay in
full all Indebtedness of the Borrowers to the Lenders and the Agent within one
hundred twenty (120) days of the Agent giving notice to the Borrowers of the
Majority Lender's objection to such format change; or
(s) a Borrower or any material part of its business or assets shall be
the subject of any seizure or forfeiture proceeding or action instituted or
conducted by any agency, office or department of state or federal government;
or
(t) any Lease of real estate used or to be used by a Borrower as a
studio, tower or transmitter site (i) shall not be renewed by the Borrower or
the landlord thereunder at least six (6) months prior to its scheduled
expiration or termination date, unless the Majority Lenders consent thereto
after having received from the Borrower evidence and assurances acceptable to
the Lender that (A) the Borrower has obtained a replacement location which is
not less favorable to the Borrower and its business operations pursuant to a
signed written Lease acceptable to the Majority Lenders, and (B) the Borrower
will be able to relocate to such replacement premises without adversely
affecting its continued business operations or station signal, or (ii) shall be
in default as a result of the Borrower's failure to observe or abide by all
terms, conditions and covenants contained therein, or (iii) shall be the
subject of a default notice or eviction notice initiated or sent by the
landlord thereof to either the Borrower or the Agent or a Lender; or
(u) revocation, termination, rescission or the issuance of a notice
suspending the effectiveness of the Clear Channel Guaranty prior to payment in
full of the Tranche C Loans, or any attempt by Clear Channel to effect any of
the foregoing; or
(v) failure by Pinnacle Sports (i) to cause the cancellation on or
before October 31, 1997, of the Havelock Bank letter of credit issued to the
University of Nebraska, or (ii) to pay in full on or before December 31, 1997,
all of its Indebtedness to Havelock Bank and to obtain releases of all liens in
favor of Havelock Bank securing such Indebtedness; or
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(w) the occurrence of any event described in any of paragraphs (a)
through (n) or paragraph (r) or (s) of this ARTICLE VIII with respect to any
Guarantor, License Subsidiary or Company other than the Borrowers, or any other
subsidiary of any of the Borrowers; or
(x) for any reason TBLR fails to consummate the sale of the Arkansas
Stations pursuant to the TBLR Asset Sale Agreement within twenty (20) days of
the date the conditions contained in SECTIONS 6.3, 6.4, 7.3 and 7.4 thereof
have been satisfied; or
(y) the chief executive officer or chief financial officer of the
Parent or any Borrower shall be convicted by any state, local or federal
authority of the commission of a felony.
Upon the occurrence of any such Event of Default and at any time thereafter
during the continuance of such Event of Default, at the election of the
Majority Lenders, the Commitments and the commitment to issue Letters of Credit
shall terminate and the Notes and all other Indebtedness of the Borrowers, and
each of them, to the Lenders and the Agent shall immediately become due and
payable, both as to principal and interest, fees and charges, without
presentment, demand, or protest, all of which are hereby expressly waived,
anything contained herein or in the Notes or other evidence of such
indebtedness to the contrary notwithstanding (except in the case of an Event of
Default under paragraph (K) or (1) of this ARTICLE VIII, in which event the
Commitments and the commitment to issue Letters of Credit shall automatically
terminate and such Indebtedness shall automatically become due and payable). In
such event, the Borrowers shall deliver to the Co-Agent a Cash Collateral
Deposit equal to the aggregate outstanding Letter of Credit Amounts under all
outstanding Letters of Credit. In the event of an acceleration of the
Borrowers' Indebtedness hereunder as a result of the filing of an Involuntary
Petition as specified in paragraph (1) of this ARTICLE VIII, such acceleration
shall be rescinded, and the Borrowers' rights hereunder reinstated, if, within
sixty (60) days following the filing of such Involuntary Petition, such
Involuntary Petition shall have been dismissed, and there shall then exist no
other Event of Default or Unmatured Event of Default under this Agreement.
IX. REMEDIES ON DEFAULT, ETC.
SECTION 9.01. REMEDIES.
In case any one or more Events of Default shall occur and be
continuing, the Agent, on behalf of the Lenders, may proceed to protect and
enforce the Lenders' and the Agent's rights by an action at law, suit in equity
or other appropriate proceeding, whether for the specific performance of any
agreement contained in this Agreement, any Security Document, any Loan Document
or the Notes or for an injunction against a violation of any of the terms
hereof or thereof or in and of the exercise of any power granted hereby or
thereby or by law. No right conferred upon the Agent or the Lenders hereby or
by any Security Document, Loan Document or the Notes shall be exclusive of any
other right referred to herein or therein or now or hereafter available at law,
in equity, by statute or otherwise.
SECTION 9.02. DEFAULT RATE.
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Without regard to whether the Agent has exercised any other rights or
remedies hereunder, the applicable interest rate under each Note shall at the
option of the holder of such Note, but only to the extent permitted by law, be
increased to a rate per annum (the "DEFAULT RATE") equal to the interest rate
then in effect pursuant to SECTION 2.06, plus (a) four percent (4.0%) upon the
occurrence of an Event of Default as defined in either paragraph (B) or (C) of
ARTICLE VIII hereof, or (b) two percent (2.0%) upon the occurrence of any other
Event of Default defined in ARTICLE VIII hereof.
SECTION 9.03. EFFECT ON PAYMENTS.
If an Event of Default shall have occurred and be continuing, the
Borrowers shall not make payments in respect of Corporate Overhead or any
Restricted Payments (including, without limitation, loans to Norman Feuer) to
the Guarantors, Stockholders or any Affiliates, in excess of the levels
specified in SECTION 5.05(A)(II) hereof.
SECTION 9.04. CONSENT TO RECEIVER.
Without limiting the generality of the foregoing or limiting in any
way the rights of the Lenders and the Agent under the Security Documents or
otherwise under applicable law, and to the extent permitted by the FCC, at any
time after the occurrence, and during the continuance, of an Event of Default,
the Agent, at the direction of the Majority Lenders, shall be entitled to apply
for and have a receiver or receiver and manager appointed under state, or
Federal law of the United States by a court of competent jurisdiction in any
action taken by the Agent or the Lenders to enforce their rights and remedies
hereunder and under the Security Documents in order to manage, protect,
preserve, sell and otherwise dispose of all or any portion of the Collateral
and continue the operation of the business of the respective Borrowers, and to
collect all revenues and profits thereof and apply the same to the payment of
all expenses and other charges of such receivership, including the compensation
of the receiver, and to the payment of the Notes until a sale or other
disposition of such Collateral shall be finally made and consummated. EACH
BORROWER HEREBY IRREVOCABLY CONSENTS TO AND WAIVES ANY RIGHT TO OBJECT TO OR
OTHERWISE CONTEST THE APPOINTMENT OF A RECEIVER AS PROVIDED ABOVE. EACH
BORROWER GRANTS SUCH WAIVER AND CONSENT KNOWINGLY AFTER HAVING DISCUSSED THE
IMPLICATIONS THEREOF WITH COUNSEL, ACKNOWLEDGES THAT THE UNCONTESTED RIGHT TO
HAVE A RECEIVER APPOINTED FOR THE FOREGOING PURPOSES IS CONSIDERED ESSENTIAL BY
THE LENDERS IN CONNECTION WITH THE ENFORCEMENT OF THEIR RIGHTS AND REMEDIES
HEREUNDER AND UNDER THE SECURITY DOCUMENTS, AND THE AVAILABILITY OF SUCH
APPOINTMENT AS A REMEDY UNDER THE FOREGOING CIRCUMSTANCES WAS A MATERIAL FACTOR
IN INDUCING THE LENDERS TO MAKE (AND COMMIT TO MAKE) THE LOANS TO THE
BORROWERS, AND AGREES TO ENTER INTO ANY AND ALL STIPULATIONS IN ANY LEGAL
ACTIONS, OR AGREEMENTS OR OTHER INSTRUMENTS IN CONNECTION WITH THE FOREGOING
AND TO COOPERATE FULLY WITH THE AGENT AND THE LENDERS IN CONNECTION WITH THE
ASSUMPTION AND EXERCISE OF CONTROL BY THE RECEIVER OVER ALL OR ANY PORTION OF
THE COLLATERAL.
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X. THE AGENT.
SECTION 10.01. APPOINTMENT, POWERS AND IMMUNITIES.
(a) AGENT. Each Lender hereby irrevocably (subject to SECTION 10.08)
designates and appoints AT&T-CFC, which designation and appointment is coupled
with an interest, as the Agent of such Lender under this Agreement and the
other Transaction Documents, and each such Lender irrevocably authorizes
AT&T-CFC, as the Agent of such Lender, to take such action on its behalf under
the provisions of this Agreement and the other Transaction Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Agreement and the other Transaction Documents,
together with such other powers as are reasonably incidental thereto. The Agent
(which term as used in this sentence and in SECTION 10.05 and such first
sentence of SECTION 10.06 hereof shall include reference to its Affiliates and
its own and such Affiliates' officers, directors, employees and agents) shall
not: (i) have any duties or responsibilities to be a trustee for any Lender;
(ii) be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, or in any
certificate or other document referred to or provided for in, or received by it
under, this Agreement, or for the due execution, legality, value, validity,
effectiveness, genuineness, enforceability, perfection or sufficiency of this
Agreement, any Note, any Security Document or any other document referred to or
provided for herein or for any failure by the Borrowers or any other Person to
perform any of its obligations hereunder or thereunder; (c) be required to
initiate or conduct any litigation or collection proceedings hereunder, except
to the extent requested by the Majority Lenders; and (d) be responsible for any
action taken or omitted to be taken by it hereunder or under any other document
or instrument referred to or provided for herein or in connection herewith,
except for its own gross negligence or willful misconduct. The Agent may employ
and consult with agents, attorneys-in-fact, public accountants and other
experts selected by it and shall not be responsible for the negligence or
misconduct of any such agents, attorneys-in-fact, public accountants or other
experts it selects with reasonable care. Subject to the foregoing, to ARTICLE
XI and to the provisions of any intercreditor agreement among the Lenders in
effect from time to time, the Agent shall, on behalf of the Lenders, (a) hold
and apply any and all Collateral, and the proceeds thereof, at any time
received by it, in accordance with the provisions of the Security Documents and
this Agreement; (b) exercise any and all rights, powers and remedies of the
Lenders under this Agreement or any of the Security Documents, including the
giving of any consent or waiver or the entering into of any amendment; (c)
execute, deliver and file UCC financing statements, mortgages, deeds of trust,
lease assignments and other such agreements, and possess instruments on behalf
of any or all of the Lenders; and (d) in the event of acceleration of any
Borrower's Indebtedness hereunder, sell or otherwise liquidate or dispose of
any portion of the Collateral held by it and otherwise exercise the rights of
the Lenders hereunder and under the Security Documents.
(b) CO-AGENT. Each Tranche A Lender and UBOC Tranche B Lender hereby
irrevocably (subject to SECTION 10.08) designates and appoints UBOC, which
designation and appointment is coupled with an interest, as the Co-Agent of
such Tranche A Lenders and UBOC Tranche B Lenders under this Agreement and the
other Transaction Documents, and each such
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Tranche A Lender and UBOC Tranche B Lender irrevocably authorizes UBOC as the
Co-Agent of such Tranche A Lender and UBOC Tranche B Lender to take such action
on its behalf under the provisions of this Agreement and the other Transaction
Documents as are assigned or delegated to the Co-Agent by the terms of this
Agreement and the other Transaction Documents, together with such other powers
as are reasonably incidental thereto, including without limitation, the
determination of the applicable LIBOR and Base Rates and the issuance of
Letters of Credit pursuant to this Agreement. The Co-Agent (which term as used
in this sentence and as SECTION 10.05 and in the first sentence of SECTION
10.06 hereof shall include reference to its Affiliates and its own and such
Affiliates' officers, directors, employees and agents) shall not (i) have any
duties or responsibilities to be a trustee for any Tranche A Lender or UBOC
Tranche B Lender, (ii) be responsible to the Tranche A Lenders and UBOC Tranche
B Lenders for any recitals, statements, representations or warranties contained
in this Agreement or any certificate or other document referred to or provided
for in, or received by it under, this Agreement, or for the due execution,
legality, value, validity, effectiveness, genuiness, enforceability, perfection
or sufficiency of this Agreement, any Letter of Credit, any Letter of Credit
Request or any other document referred to or provided for herein or for any
failure by the Borrowers or any other Person to perform any of its obligations
hereunder or thereunder; and (iii) be responsible for any action taken or
omitted to be taken by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith, except for its
own gross negligence or willful misconduct. The Co-Agent may employ and consult
with agents, attorneys-in-fact, public accountants and other experts selected
by it and shall not be responsible for the negligence or misconduct of any such
agents, attorneys-in-fact, public accountants or other experts selected with
reasonable care.
SECTION 10.02. RELIANCE BY AGENT. Each of the Agent and the Co-Agent
shall be entitled to rely upon any certification, notice or other communication
(including any communication by telephone, telex, facsimile transmission,
telegram or cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by the Agent or the Co-Agent, as applicable. The Agent may treat the
payee of any Note as the holder thereof until the Agent receives written notice
of the assignment or transfer thereof, in form satisfactory to the Agent,
signed by such payee and including the agreement of the assignee or transferee
to be bound hereby as it would have been if it had been an original Lender
hereunder. As to any matters not expressly provided for by this Agreement, the
Agent and the Co-Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by the
Majority Lenders or the Lenders or Tranche A Lenders, as the case may be, and
such instructions and any action taken or failure to act pursuant thereto shall
be binding on the Lenders.
SECTION 10.03. EVENTS OF DEFAULT. The Agent shall not be deemed to
have knowledge of the occurrence of an Event of Default (other than the
non-payment of principal of or interest on the Notes or Letter of Credit
Request which it holds as a Lender hereunder) unless such Agent has received
written notice from any Lender or any Borrower specifying such Event of Default
and stating that such notice is a "NOTICE OF DEFAULT". In the event that the
Agent receives such a notice of the occurrence of an Event of Default, the
Agent shall give prompt notice thereof to the
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Lenders (and shall give each Lender prompt notice of each such non-payment).
The Agent shall (subject to SECTION 10.07) take such action with respect to
such Event of Default as shall be directed by the Majority Lenders, as provided
under ARTICLE XI, provided that, unless and until the Agent shall have received
such directions, the Agent may (but shall not be obligated to) take such action
on behalf of the Lenders, or refrain from taking such action, with respect to
such Event of Default as it shall deem advisable in the best interest of the
Lenders. The Co-Agent shall not be deemed to have knowledge of the occurrence
of any Event of Default.
SECTION 10.04. RIGHTS AS A LENDER. With respect to its Commitments and
the Loans made by AT&T-CFC and UBOC hereunder, and the Notes issued to them,
and the Letters of Credit issued by UBOC, each of AT&T-CFC and UBOC shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not acting as the Agent or Co-Agent; and
the terms "Lender", "Lenders" and "Majority Lenders" shall, unless otherwise
expressly indicated, include each of AT&T-CFC and UBOC in its individual
capacity. Each of the Agent and the Co-Agent, and their respective Affiliates
may, without having to account therefor to the Lenders and without giving rise
to any fiduciary or other similar duty to any Lender, accept deposits from,
lend money to and generally engage in any kind of banking, trust or other
business with the Borrowers and any of their Affiliates as if it were not
acting as an agent and as if AT&T-CFC or UBOC, as applicable, were not a
Lender, and the Agent may accept fees and other consideration from or on behalf
of the Borrowers for services in connection with this Agreement or otherwise
without having to account for the same to the Lenders.
SECTION 10.05. INDEMNIFICATION. The Lenders agree to indemnify the
Agent and the Tranche A Lenders and UBOC Tranche B Lenders agree to indemnify
the Co-Agent (in each case, to the extent not reimbursed under SECTION L3.02,
but without limiting the obligations of the Borrowers under such SECTION
L3.02), ratably in accordance with the respective aggregate principal amounts
of the Notes held by such Lenders and participation interests in the Letters of
Credit (or, if no such principal or interest or Letter of Credit, as
applicable, is at the time outstanding, ratably in accordance with their
respective Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, action, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent or Co-Agent in any way relating to or
arising out of this Agreement or any Security Document or Loan Document or any
other document contemplated by or referred to herein or the transactions
contemplated by or referred to herein or therein (including, without
limitation, the costs and expenses which the Borrowers are obligated to pay
under SECTION 13.02) or the enforcement of any of the terms of this Agreement
or of any Security Document or of any such other documents, or in any way
relating to any action taken or omitted by the Agent or the Co-Agent under this
Agreement, provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
party to be indemnified. Without limitation of the foregoing, each Lender
agrees to reimburse the Agent and the Co-Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees, but
exclusive of any costs and expenses of syndications) incurred by the Agent and
the Co-Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or
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otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, to the extent that the Agent or Co-Agent, as applicable, is not
reimbursed for such expenses by the Borrowers.
SECTION 10.06. NON-RELIANCE ON AGENT, CO-AGENT AND OTHER LENDERS. Each
Lender agrees that it has, independently and without reliance on the Agent,
Co-Agent or any other Lenders, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Borrowers and
its own decision to enter into this Agreement and that it will, independently
and without reliance upon the Agent, Co-Agent or any other Lenders, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement. Neither the Agent nor the Co-Agent makes any warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement. Neither the Agent nor the Co-Agent shall be
required to inquire or keep itself informed as to the performance or observance
by the Borrowers of this Agreement or any other document referred to or
provided for herein or to inspect the properties or books of the Borrowers.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Agent or Co-Agent hereunder,
neither the Agent nor the Co-Agent shall have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or businesses of the Borrowers or any Affiliates of the
Borrowers which may come into the possession of the Agent or Co-Agent or any of
their respective Affiliates. Notwithstanding the foregoing, the Agent will
provide to the Lenders any and all information reasonably requested by them and
reasonably available to the Agent promptly upon such request.
SECTION 10.07. FAILURE TO ACT. Except for action expressly required of
the Agent or Co-Agent hereunder, the Agent and Co-Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it shall be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
SECTION 10.08. RESIGNATION OR REMOVAL OF AGENT. AT&T-CFC (or any other
Agent hereunder) and UBOC (or any other Co-Agent hereunder), may resign as the
Agent or Co-Agent, respectively, at any time by giving thirty (30) days' prior
written notice thereof to the Lenders and the Borrowers. Any such resignation
or removal shall take effect at the end of such thirty (30) day period or upon
the earlier appointment of a successor Agent or Co-Agent, as applicable, by the
Majority Lenders as provided below. Upon any resignation, the Majority Lenders
shall appoint a successor agent from among the Lenders or, if such appointment
is deemed inadvisable or impractical by the Majority Lenders, another financial
institution with a combined capital and surplus of at least $500,000,000. Upon
the acceptance of any appointment as Agent or Co-Agent hereunder by a successor
Agent or Co-Agent, such successor Agent or Co-Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent or Co-Agent. After the effective date of the resignation of an
Agent or Co-Agent hereunder, the retiring Agent or Co-Agent shall be discharged
from its duties and obligations hereunder, provided that the provisions of this
ARTICLE X shall continue in effect for its benefit in
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respect of any actions taken or omitted to be taken by it while it was acting
as the Agent or Co-Agent. In the event that there shall not be a duly appointed
and acting Agent, the Borrowers agree to make each payment due to the Agent
hereunder and under the Notes, if any, directly to each Lender entitled
thereto, pursuant to written instructions provided by the retiring Agent, and
to provide copies of each certificate or other document required to be
furnished to the Agent hereunder, if any, directly to each Lender.
SECTION 10.09. COOPERATION OF LENDERS. Each Lender shall (a) promptly
notify the other Lenders and the Agent and Co-Agent of any Event of Default
known to such Lender under this Agreement and not reasonably believed to have
been previously disclosed to the other Lenders; (b) provide the other Lenders
and the Agent and Co-Agent with such information and documentation as such
other Lenders or the Agent and Co-Agent shall reasonably request in the
performance of their respective duties hereunder, including, without
limitation, all information relative to the outstanding balance of principal,
interest and other sums owed to such Lender by each Borrower but excluding
internally generated reports and analyses and other customarily confidential
materials; and (c) cooperate with the Agent and Co-Agent with respect to any
and all collections and/or foreclosure procedures at any time commenced against
the Borrowers or otherwise in respect of the Collateral by the Agent in the
name and on behalf of the Lenders.
XI. ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS; ACTIONS BY THE
LENDERS.
(a) This Agreement (including the Schedules hereto) and the other Loan
Documents constitute the entire agreement of the parties herein and supersede
any and all prior agreements, written or oral, as to the matters contained
herein, and no modification or waiver of any provision hereof or of the Notes
or any other Loan Document, nor consent to the departure by the Borrowers or
any other Person therefrom, shall be effective unless the same is in writing,
and then such waiver or consent shall be effective only in the specific
instance, and for the purpose, for which given. Except as hereinafter provided
or in cases where the consent of all Lenders is required by the terms of this
Agreement or other Loan Document, the consent of the Majority Lenders shall be
required and sufficient (i) to amend, with the consent of the other party or
parties thereto, any term of this Agreement, the Notes or any other Loan
Document; (ii) to waive the observance of any term of this Agreement, the Notes
or any other Loan Document (either generally or in a particular instance or
either retroactively or prospectively); (iii) to take or refrain from taking
any action under this Agreement, the Notes, any other Loan Document or
applicable law, including, without limitation, (A) the acceleration of the
payment of the Notes, (B) the exercise of the Agent's and the Lenders' remedies
hereunder and under the Security Documents and (C) the giving of any approvals,
consents, directions or instructions required under this Agreement or the
Security Documents; provided, however, that no such amendment, waiver or
consent shall, without the prior written consent of all of the Lenders or the
holders of all of the Notes at the time outstanding, (1) extend the fixed
maturity or reduce the principal amount of, or reduce the amount or extend the
time of payment of any principal of, or interest on, any Note (including the
Applicable Margin but excluding mandatory prepayments of the Notes out of
Excess Cash Flow required under SECTION 2.05(D)(I)), (2) increase or extend any
Commitment of any Lender (it being understood that waivers or modifications of
conditions precedent,
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covenants, or Events of Default shall not constitute any such increase or
extension), (3) release any Guarantees or any Collateral, unless (x) such
release of Collateral is in connection with a Disposition permitted under
SECTION 7.03 or to which any required consent of the Majority Lenders has been
given and (y) substantially all of the Net Sale Proceeds of such sale are used
to repay the Borrowers' indebtedness to the Lenders hereunder or otherwise used
in a manner permitted hereunder, (4) change the percentage referred to in the
definition of "MAJORITY LENDERS" contained in ARTICLE I, (5) change any other
provisions requiring the consent of all of the Lenders or the Majority Lenders
or (6) amend the provisions of this ARTICLE XI.
(b) Any amendment or waiver effected in accordance with this ARTICLE
XI shall be binding upon each holder of any Note at the time outstanding, each
future holder of any Note and the Borrowers. The Lenders' failure to insist
(directly or through the Agent) upon the strict performance of any term,
condition or other provision of this Agreement, any Note, or any of the
Security Documents, or to exercise any right or remedy hereunder or thereunder,
shall not constitute a waiver by the Lenders of any such term, condition or
other provision or default or Event of Default in connection therewith, nor
shall a single or partial exercise of any such right or remedy preclude any
other or future exercise, or the exercise of any other right or remedy; and any
waiver of any such term or condition or other provision or of any such default
or Event of Default shall not affect or alter this Agreement, any Note or any
of the Security Documents, and each and every term, condition and other
provision of this Agreement, the Notes and the Security Documents shall, in
such event, continue in full force and effect and shall be operative with
respect to any other then existing or subsequent default or Event of Default in
connection therewith. An Event of Default hereunder and a default under any
Note or under any of the Security Documents shall be deemed to be continuing
unless and until waived in writing by the Majority Lenders or all of the
Lenders, as provided in paragraph (a) above.
XII. BENEFIT OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS
(a) This Agreement shall be binding upon and inure to the benefit of
the Borrowers, the Lenders, the Agent, the Co-Agent and their respective
successors and assigns, and all subsequent holders of any of the Notes or any
portion hereof.
(b) Each Lender may assign its rights and interests under this
Agreement, the Notes and the Security Documents in whole or in part, and sell
participations in the Notes and the Security Documents as security therefor,
provided as follows:
(i) No Lender shall make any assignment (other than
assignment in full) other than to a separately organized branch or an Affiliate
of the same Lender, if, after giving effect thereto, such Lender would hold
less than $5,000,000 of the then aggregate outstanding principal amount of the
Notes.
(ii) Any such assignment made other than to a separately
organized branch, or an Affiliate of, a Lender shall reflect an assignment of
such assigning Lender's Notes which is in an aggregate principal amount of at
least $5,000,000, and if greater, shall be an integral multiple of $1,000,000.
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(iii) Notwithstanding any provision of this Agreement to the
contrary, each Lender may at any time assign all or any portion of its rights
under this Agreement and each of the other Loan Documents, including, without
limitation, the Notes held by such Lender, to a Federal Reserve Bank (or
equivalent thereof in the case of Lenders chartered outside of the United
States); provided that no such assignment shall release a Lender from any of
its obligations and liabilities under the Loan Documents. Any Federal Reserve
Bank (or equivalent thereof) which receives such an assignment from any Lender
may make further assignments of such rights in accordance with the provisions
of this Section.
(iv) Any assignments made hereunder shall be pursuant to an
instrument of assignment and acceptance (the "ASSIGNMENT AND ACCEPTANCE")
substantially in the form of EXHIBIT H and the parties to each such assignment
shall execute and deliver to the Agent and the Co-Agent for their acceptance
the Assignment and Acceptance together with any Note or Notes subject thereto.
Upon such execution and delivery, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least two
(2) Business Days after the execution thereof, (A) the assignee thereunder
shall become a party hereto, to the Loan Documents and to the Intercreditor
Agreement and, to the extent provided in such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder with a commitment as set forth
therein and (B) the assigning Lender thereunder shall, to the extent provided
in such assignment, be released from its obligations under this Agreement as to
that portion of its obligation being so assigned and delegated. The Assignment
and Acceptance shall be deemed to amend this Agreement to the extent, and only
to the extent, necessary to reflect the addition of the assignee as a Lender
and the resulting adjustment of Commitments arising from the purchase by and
delegation to such assignee of all or a portion of the rights and obligations
of such assigning Lender under this Agreement.
(v) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and the assignee together with the Note subject to such
assignment and payment by the assignee to the Agent of a registration and
processing fee of $2,000.00, the Agent shall accept such Assignment and
Acceptance. Promptly upon delivering such Assignment and Acceptance to the
Agent, the assigning Lender shall give notice thereof to the Borrowers and the
other Lenders. Within five (5) Business Days after receipt of such notice, the
Borrowers shall execute and deliver to the Agent in exchange for such
surrendered Note(s) a new Note or Notes payable to the order of such assignee
in an amount equal to the portion of the Loan(s) assumed by such assignee
pursuant to such Assignment and Acceptance and a new Note or Notes payable to
the order of the assigning Lender in an amount equal to the portion of the
Loans retained by it hereunder. Such new Notes shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form provided in ARTICLE II. The canceled Notes surrendered by the
assigning Lender shall be returned to the Borrowers upon the execution and
delivery of such new Notes.
(vi) Each Lender may sell participations in all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments and the Notes held by it);
provided, however, that, (A) the selling Lender shall
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remain obligated under this Agreement to the extent as it would if it had not
sold such participation, (B) the selling Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations, (C) at no
time shall the selling Lender agree with such participant to take or refrain
from taking any action hereunder or under any other Loan Document, except that
the selling Lender may agree not to consent, without such participant's
consent, to any of the actions referred to ARTICLE XI, to the extent that the
same require the consent of each Lender hereunder, (D) all amounts payable by
the Borrowers hereunder shall be determined as if such Lender had not sold such
participation and no participant shall be entitled to receive any greater
amount pursuant to this Agreement than the selling Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such Lender to such participant had no such transfer occurred, and (E) the
Borrowers, the Agent, the Co-Agent and the other Lenders shall continue to deal
solely and directly with the selling Lender in connection with such Lender's
rights and obligations under this Agreement.
(vii) Except during the existence of an Event of Default, no
assignment by a Lender referred to above other than to a separately organized
branch or Affiliate of such Lender and other than under paragraph (b)(iii)
hereof shall be permitted without the prior written consent of the Managing
Agents, which consent shall not be unreasonably withheld or delayed.
(viii) No Borrower may assign any of its rights or delegate
any of its duties or obligations hereunder.
(ix) Any Lender may, in connection with any assignment or
participation pursuant to this Section, disclose to the assignee or participant
any information relating to the Borrowers, Parents or Guarantors furnished to
such Lender by or on behalf of the Borrowers and such assignee or participant
shall treat such information as confidential.
XIII. MISCELLANEOUS
SECTION 13.01. SURVIVAL.
This Agreement and all covenants, agreements, representations and
warranties made herein and in the certificates delivered pursuant hereto, shall
survive the making by the Lenders of the Loans and shall continue in full force
and effect so long as the Notes or any other Indebtedness of the Borrowers, or
any of them, to the Lenders is outstanding and unpaid or any Lender has any
obligation to make credit extensions hereunder.
SECTION 13.02. EXPENSES.
The Borrowers agree jointly and severally to reimburse the Agent, the
Co-Agent and the Lenders upon demand for all reasonable out-of-pocket costs,
charges, liabilities, documentary stamp taxes, intangible taxes, any other
taxes due under any applicable state law (exclusive of taxes measured or
imposed in terms of any Lender's net income) and any other reasonable expenses
of the Agent, the Co-Agent and the Lenders (including reasonable fees and
disbursements of (i) counsel to the Agent, the Co-Agent and the Lenders, (ii)
the appraisers and
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engineers referred to in SECTION 4.18(A) and (B) hereof and SECTION 6.10(D)
hereof, and (iii) agents of the Agent, the Co-Agent and the Lenders not
regularly in their employ) in connection with (a) the preparation, negotiation,
interpretation, execution and delivery of this Agreement, the Notes, any
Security Documents and any other agreements or documents relating thereto, (b)
the making and administration of the Loans, (c) any amendments, modifications,
consents or waivers in respect thereof, (d) any enforcement of any of the
Transaction Documents, (e) any proceedings with respect to the bankruptcy,
reorganization, insolvency readjustment of debt, dissolution or liquidation of
the Borrower or any party to any Security Document, (f) any claims by third
parties relating to the foregoing, and (g) any appraisal, studies or reports
required by this Agreement.
SECTION 13.03. SETOFFS, ETC.
The Borrowers agree that, in addition to (and without limitation of)
any right of set-off, bankers lien or counterclaim the Lenders, Agent and
Co-Agent may otherwise have, each Lender shall be entitled at its option, to
offset balances held by it for the account of the Borrowers, or any of them, at
any of its offices, against any Indebtedness or other fees or charges owed to
such Lender hereunder if the same are not paid when due (regardless of whether
such balances are then due to the Borrowers) or if a Borrower becomes
insolvent, howsoever evidenced, or if any Event of Default occurs, and that
such offset balances may be applied toward the payment of any Indebtedness of
the Borrowers to the Lenders or to any purchaser of any participations in the
Notes, whether or not such Indebtedness or any part thereof shall then be due;
in which case such Lender shall promptly notify the Borrowers thereof,
provided, however, that such Lender's failure to give such notice shall not
affect the validity thereof.
SECTION 13.04. GOVERNING LAW.
THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SAID STATE.
SECTION 13.05. AMENDMENT; MODIFICATION.
No modification or waiver of any provision of this Agreement, or of
the Notes or any other Loan Document, nor consent to any departure by the
Borrowers therefrom, shall in any event be effective unless the same shall be
in writing, and then such waiver or consent shall be effective only in the
specific instance, and for the purpose, for which given. No notice to, or
demand on, the Borrowers, in any case, shall entitle the Borrowers to any other
or future notice or demand in the same, similar or other circumstances.
SECTION 13.06. WAIVER.
The failure by the Agent or any Lender to insist upon the strict
performance of any term, condition or other provision of this Agreement, the
Notes or any of the Security Documents or other Transaction Documents, or to
exercise any right or remedy hereunder or thereunder, shall not constitute a
waiver by the Agent or the Lenders of any such term, condition or other
provision or default or Event of Default in connection therewith; and any
waiver of any such term, condition or other
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provision or of any such default or Event of Default shall not affect or alter
this Agreement, the Notes or any of the Security Documents or other Transaction
Documents, and each and every term, condition and other provision of this
Agreement, the Notes, the Security Documents and other Transaction Documents
shall, in such event, continue in full force and effect and shall be operative
with respect to any other then existing or subsequent default or Event of
Default in connection therewith. An Event of Default hereunder or under any of
the Security Documents shall be deemed to be continuing unless and until waived
in writing by the Lenders.
SECTION 13.07. NOTICE.
All notices, requests, demands and other communications provided for
hereunder shall be in writing and either mailed, sent by nationally recognized
overnight courier service, or delivered to the applicable party at the
addresses indicated below.
If to the Agent:
AT&T COMMERCIAL FINANCE CORPORATION
44 Whippany Road
Morristown, New Jersey 07962
Attention: Vice President, Credit/Operations
Capital Markets Division-Media
with a copy (which shall not constitute notice) to:
AT&T COMMERCIAL FINANCE CORPORATION
44 Whippany Road
Morristown, New Jersey 07962
Attention: Chief Counsel, Capital Markets Division
and with a copy (which shall not constitute notice) to:
Andrew J. Chlebus, Esq.
Edwards & Angell
2700 Hospital Trust Tower
Providence, Rhode Island 02903
If to any Lender, to it at the address set forth on the appropriate
signature page hereto or, with respect to any assignee under ARTICLE XII, at
the address designated by such assignee in a written notice to the other
parties hereto.
If to the Borrowers or any of them:
c/o Triathlon Broadcasting Company
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Symphony Towers, Suite 1920
750 B Street
San Diego, CA 92101
Attention: Norman Feuer, President
with a copy (which shall not constitute notice) to:
Howard M. Berkower, Esq.
Baker & McKenzie
805 Third Avenue
New York, NY 10022
or, as to each party, at such other address as shall be designated by such
parties in a written notice to the other party complying as to delivery with
the terms of this Section. All such notices, requests, demands and other
communication shall be deemed given upon the earliest to occur of (a) the third
day following deposit thereof in the United States mail, (b) twelve noon local
time on the first business day following timely deposit thereof with a
nationally recognized overnight courier service with effective instructions to
such courier to make delivery on the next business day, or (c) receipt by the
party to whom such notice is directed.
SECTION 13.08. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Agent and the Lenders and their respective successors and
assigns, except that the Borrowers shall not have the right to assign any of
their rights hereunder or delegate any of their obligations hereunder without
the prior written consent of the Lenders. Any such impermissible assignment or
delegation shall be void and of no effect.
SECTION 13.09. CONSENT TO JURISDICTION, SERVICE OF PROCESS.
Each Borrower, to the extent that it may lawfully do so, hereby
consents to the jurisdiction of the courts of the States of Kansas, Nebraska,
New York, Washington, Colorado, Arkansas and New Jersey and the United States
District Courts for the Districts of Kansas, Nebraska, New York, Washington,
Colorado, Arkansas and New Jersey, as well as to the jurisdiction of all courts
from which an appeal may be taken from such courts, for the purpose of any
suit, action or other proceeding arising out of any of its obligations arising
hereunder or under the Notes, the Security Documents or any other Transaction
Documents, or with respect to the transactions contemplated hereby, and
expressly waives any and all objections it may have as to venue in any of such
courts. In addition, to the extent that it may lawfully so do, each Borrower
hereby consents to the service of process by U.S. certified or registered mail,
return receipt requested, addressed to the Borrower at the address to which
notices are to be given hereunder.
SECTION 13.10. WAIVER OF JURY TRIAL.
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EACH BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY ACTION BROUGHT ON OR
WITH RESPECT TO THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS OR ANY OTHER
AGREEMENTS EXECUTED IN CONNECTION HEREWITH. NEITHER THE BORROWERS NOR ANY
ASSIGNEE OF OR SUCCESSOR TO THE BORROWERS, SHALL SEEK A JURY TRIAL IN ANY
LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION OR PROCEDURE BASED
UPON, OR ARISING OUT OF, THIS AGREEMENT, THE NOTES, THE SECURITY DOCUMENTS OR
ANY OF THE OTHER DOCUMENTS, INSTRUMENTS AND AGREEMENTS ENTERED INTO IN
CONNECTION HEREWITH OR THEREWITH OR THE DEALINGS OR THE RELATIONSHIP BETWEEN OR
AMONG THE PARTIES HERETO, OR ANY OF THEM. NO PARTY WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION, IN WHICH A JURY TRIAL HAS BEEN WAIVED, WITH ANY OTHER ACTION IN
WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS
SECTION 13.10 HAVE BEEN FULLY DISCUSSED BY THE PARTIES HERETO, AND THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION
13.10 WILL NOT BE FULLY ENFORCED IN ALL INSTANCES.
SECTION 13.11. INDEMNIFICATION; LIMITATION OF LIABILITY.
(a) Each Borrower agrees to protect, indemnify and hold harmless the
Indemnitees from and against any and all liabilities, obligations, losses,
damages (including, without limitation, consequential damages), penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any
kind or nature whatsoever (including, without limitation, the reasonable fees
and disbursements of counsel for and consultants of such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), which may
be imposed on, incurred by, or asserted against such Indemnitees (whether
direct, indirect, or consequential and whether based on any federal or state
laws or other statutory regulations, including, without limitation, securities,
environmental and commercial laws and regulations, under common law or at
equitable cause or on contract or otherwise) in any manner relating to or
arising out of (i) any act or omission of the Borrower, the Guarantors, any
Affiliate of any such Persons, or any other Person with respect to (x) the
transactions evidenced by or relating to this Agreement, the Notes or any of
the Security Documents or other Loan Documents, or any act, event or
transaction related or attendant thereto, (y) the agreements of Lenders
contained herein, the making of the Loans or issuance of the Letters of Credit,
or the management of the Loans the Letters of Credit or the Collateral, or (z)
the use or the intended use of the proceeds of the Loans hereunder; or (ii) any
claim, cause of action, event or circumstances relating to the business,
assets, properties, licenses or operations of the Borrowers, including, without
limitation, all claims relating to or arising out of the condition, quality,
maintenance or use of any asset which constitutes Collateral, the manner in
which the Borrowers operates the Stations and their business, and the
Borrowers' compliance with the rules and regulations of the FCC and other
applicable law; provided, however, that the Borrowers shall have no obligation
to any Indemnitee under this SECTION 13.11 with respect to matters indemnified
hereby which are caused by or resulting from the willful
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misconduct or gross negligence of such Indemnitee. To the extent that the
undertaking to indemnify, pay and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrowers shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all indemnified matters incurred by the Indemnitees.
(b) To the extent permitted by applicable law, no claim may be made by
the Borrowers or any other Person against the Indemnitees for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement, the Notes, or any of the Security
Documents or any act, omission or event occurring in connection therewith; and
the Borrowers hereby waive, release and agree not to sue upon any claim for any
such damages, whether or not accrued and whether or not known or suspected to
exist in its favor. No Indemnitee shall be liable for any action taken or
omitted to be taken by it or them under or in connection with any of the
above-referenced documents, except for its or their own gross negligence or
willful misconduct.
(c) The provisions of this SECTION 13.11 shall continue in effect and
shall survive (among other things) any termination of this Agreement, payment
and satisfaction of the Notes, and release of any Collateral.
SECTION 13.12. SEVERABILITY.
(a) Any provision of this Agreement, the Notes or any of the Security
Documents which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
(b) All agreements between the Borrowers and the Lenders are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the Indebtedness or otherwise, shall the
amount paid or agreed to be paid to the Lenders for the use, forbearance or
detention of the Indebtedness evidenced hereby or incurred pursuant hereto
exceed the maximum permissible under applicable law. If, from any circumstances
whatsoever, fulfillment of any provision hereof, at the time performance of
such provision shall be due, shall involve transcending the limit of validity
prescribed by law, then, ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity, and if from any circumstance any Lender
should ever receive as interest an amount which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the
reduction of the principal balance evidenced hereby and not to the payment of
interest. As used herein, the term "applicable law" shall mean the law in
effect as of the date hereof, provided, however, that in the event there is a
change in the law which results in a higher permissible rate of interest, then
this Agreement shall be governed by such new law as of its effective date. This
provision shall control every other provision of all Transaction Documents
between the Borrowers and the Lenders.
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SECTION 13.13. SECTION HEADINGS.
Any Article and Section headings in this Agreement are included herein
for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
SECTION 13.14. AMENDMENT OF OTHER AGREEMENTS.
All references in this Agreement to other documents and agreements to
which the Lenders are not a party shall be deemed to refer to such documents
and agreements as presently constituted and not as hereafter amended or
modified unless the Majority Lenders shall have expressly consented to in
writing pursuant to ARTICLE XI.
SECTION 13.15. ACCOUNTING PRINCIPLES.
All references in this Agreement to any calculations or determinations
made in accordance with generally accepted accounting principles shall mean,
for any fiscal period, such principles applied on a basis consistent with (a)
the application of the same in prior fiscal periods, (b) that employed by the
Accountants in preparing the financial statements referred to in SECTION 4.01
hereof.
SECTION 13.16. KNOWLEDGE AND DISCOVERY.
All references in this Agreement to "knowledge" of, or "discovery" by,
a Borrower shall be deemed to include any such knowledge of, or discovery by,
any of the holders of common stock of such Borrowers or any of such Borrower's
executive officers.
SECTION 13.17. FCC.
Notwithstanding anything to the contrary contained herein or in any of
the Security Documents, the Agent and the Lenders will not take any action
pursuant to this Agreement or any of the Security Documents that would
constitute or result in any assignment of an FCC license or any change of
control of the Stations if such assignment of license or change of control
would require under then existing law (including the written rules and
regulations promulgated by the FCC), the prior approval of the FCC, without
first obtaining such approval of the FCC. Each Lender and the Agent
specifically agree that (a) voting rights in the capital stock or voting trust
certificate of the Borrowers (the "PLEDGED INTERESTS") will remain with the
holders of such voting rights upon and following the occurrence of an Event of
Default unless any required prior approvals of the FCC to the transfer of such
voting rights to the Lenders or the Agent shall have been obtained; (b) upon
and following the occurrence of any Event of Default and foreclosure upon the
Pledged Interests by the Lenders or the Agent, there will be either a private
or public sale of the Pledged Interests; and (c) prior to the exercise of
voting rights by the purchaser at any such sale, the prior consent of the FCC
pursuant to 47 U.S.C. ss.310(d) will be obtained. The Borrowers agree to take
any action which the Lenders or the Agent may reasonably request in order to
obtain and enjoy the full rights and benefits granted to the Lender by this
Agreement
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including specifically, at the Borrowers' own cost and expense, the use of the
best efforts of the Borrowers to assist in obtaining approval of the FCC for
any action or transaction contemplated by this Agreement or the Security
Documents which is then required by law, and specifically, without limitation,
upon request following the occurrence of an Event of Default, to prepare, sign
and file (or cause to be prepared, signed or filed) with the FCC any portion of
any application or applications for consent to the assignment of license or
transfer of control required to be signed by the Borrowers and necessary or
appropriate under the FCC's rules and regulations for approval of any sale or
transfer of any of the capital stock or assets of the Borrowers or any transfer
of control over any FCC license.
SECTION 13.18. INTEGRATION.
(a) This Agreement supersedes the Borrowers' application for the
Loans, the Lenders' commitments and proposal letters in respect of the Loans,
and all other prior written or oral agreements and representations between the
parties hereto and their respective agents, employees or officers with respect
to the credit facilities extended hereby, and this Agreement, together with the
other Transaction Documents, constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof.
(b) This Agent constitutes an amendment and restatement of the
Original Loan Agreement in its entirety and supersedes any inconsistent terms
or provisions contained in the Original Loan Agreement.
(c) All Lenders who are parties hereto are also parties to the
Intercreditor Agreement and all rights of the Lenders hereunder and under the
Loan Documents are subject thereto.
SECTION 13.19 COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute one and the same
Agreement.
*SIGNATURES CONTINUED ON NEXT PAGE*
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IN WITNESS WHEREOF, the Agent, the Lenders and the Borrowers have
caused this Agreement to be duly executed as a sealed instrument by their
respective duly authorized officers, all as of the day and year first above
written.
TRIATHLON BROADCASTING OF
WICHITA, INC.
By: /s/ Norman Feuer
-------------------------------------
Title: President and Chief Executive
Officer
TRIATHLON BROADCASTING OF
LINCOLN, INC.
By: /s/ Norman Feuer
-------------------------------------
Title: President and Chief Executive
Officer
TRIATHLON BROADCASTING OF
OMAHA, INC.
By: /s/ Norman Feuer
-------------------------------------
Title: President and Chief Executive
Officer
TRIATHLON BROADCASTING OF
SPOKANE, INC.
By: /s/ Norman Feuer
-------------------------------------
Title: President and Chief Executive
Officer
TRIATHLON BROADCASTING OF
TRI-CITIES, INC.
By: /s/ Norman Feuer
-------------------------------------
Title: President and Chief Executive
Officer
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TRIATHLON BROADCASTING OF
COLORADO SPRINGS, INC.
By: /s/ Norman Feuer
-------------------------------------
Title: President and Chief Executive
Officer
TRIATHLON BROADCASTING OF
LITTLE ROCK, INC.
By: /s/ Norman Feuer
-------------------------------------
Title: President and Chief Executive
Officer
AGENT:
AT&T COMMERCIAL FINANCE
CORPORATION, AS AGENT
By: /s/ Samuel D. Bush
-------------------------------------
Title: Vice President
CO-AGENT:
UNION BANK OF CALIFORNIA, N.A.,
AS CO-AGENT
By: /s/ Bryan G. Petermann
-------------------------------------
Title: Vice President
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LENDER:
AT&T COMMERCIAL FINANCE
CORPORATION
By: /s/ Samuel D. Busch
-------------------------------------
Title: Vice President
Lending Office for all Loans:
44 Whippany Road
Morristown, New Jersey 07962
Telecopier No.: 201-397-4196
Telephone No.: 201-397-3000 or
201-397-3482
Address for Notices:
44 Whippany Road
Morristown, New Jersey 07962
Attention: Vice President,
Credit/Operations
Capital Markets - Media
With a copy to :
AT&T Commercial Finance Corporation
44 Whippany Road
Morristown, New Jersey 07962
Attention: Chief Counsel
Capital Markets
And a copy to:
Andrew J. Chlebus, Esq.
Edwards & Angell
2700 Hospital Trust Tower
Providence, Rhode Island 02903
Tranche B Commitment: $20,000,000
Tranche C Commitment: $20,000,000
Acquisition Loan Commitment: $20,000,000
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LENDER:
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Bryan G. Petermann
-------------------------------------
Title:
Lending Office for all Loans:
445 South Figueroa Street
15th Floor
Los Angeles, CA 90071
Address for Notices:
445 South Figueroa Street
15th Floor
Los Angeles, CA 90071
Attention: Bryan Petermann
Vice President
Communications/Media Division
Telecopier No.: 213-236-5747
Telephone No.: 213-236-5813
Tranche A Commitment: $35,000,000
Tranche B Commitment: $5,000,000
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