GUARANTY
This GUARANTY, dated as of June 22, 2001 (this "Guaranty"), is by and
between Emmis Communications corporation, an Indiana corporation (the
"Guarantor"), in favor of (i) TORONTO DOMINION (TEXAS), INC., a Delaware
corporation, as administrative agent (hereinafter, in such capacity, the
"Administrative Agent") for itself and the other lending institutions
(hereinafter, collectively, the "Lenders") which are or may become parties to a
Fourth Amended and Restated Revolving Credit and Term Loan Agreement, dated as
of December 29, 2000December __, 2000 (as amended, supplemented, restated or
otherwise modified and in effect from time to time, the "Credit Agreement"),
among EMMIS OPERATING COMPANY, an Indiana corporation (as the assignee of the
Guarantor) (the "Company"), the Lenders, Fleet National Bank, as documentation
agent, First Union National Bank, as syndication agent, Credit Suisse First
Boston, as co-documentation agent, and the Administrative Agent and (ii) each of
the Lenders.
WHEREAS, the Company and the Guarantor are members of a group of related
entities, the success of any one of which is dependent in part on the success of
the other members of such group;
WHEREAS, the Guarantor expects to receive substantial direct and indirect
benefits from the extensions of credit to the Company by the Lenders pursuant to
the Credit Agreement (which benefits are hereby acknowledged);
WHEREAS, it is a condition precedent to the Lenders' making any loans or
otherwise extending credit to the Company under the Credit Agreement that the
Guarantor execute and deliver to the Administrative Agent, for the benefit of
the Lenders and the Administrative Agent, a guaranty substantially in the form
hereof;
WHEAREAS, the Guarantor has executed and delivered to the Administrative
Agent that certain Stock Pledge Agreement, dated as of the date hereof (as
amended, supplemented, restated or otherwise modified and in effect from time to
time, the "Parent Pledge Agreement"), pursuant to which, inter alia, the
Guarantor pledged, assigned, and granted to the Administrative Agent, for its
benefit and that of the Lenders, a security interest in one hundred percent
(100%) of the issued and outstanding stock of the Company in accordance with the
terms set forth therein;
WHEREAS, the Guarantor wishes to guaranty the Company's Obligations to the
Lenders and the Administrative Agent;
NOW, THEREFORE, the Guarantor hereby agrees with the Lenders and the
Administrative Agent as follows:
1. Definitions. The term "Obligations" and all other capitalized terms used
herein without definition shall have the respective meanings provided therefor
in the Credit Agreement.
2. Guaranty of Payment and Performance. The Guarantor hereby guarantees to
the Lenders and the Administrative Agent the full and punctual payment when due
(whether at stated maturity, by required pre-payment, by acceleration or
otherwise), as well as the performance, of all of the Obligations including all
such Obligations which would become due but for the operation of the automatic
stay pursuant to ss.362(a) of the Federal Bankruptcy Code and the operation of
ss.ss.502(b) and 506(b) of the Federal Bankruptcy Code. This Guaranty is an
absolute, unconditional and continuing guaranty of the full and punctual payment
and performance of all of the Obligations and not of their collectibility only
and is in no way conditioned upon any requirement that the Administrative Agent
or any Lender first attempt to collect any of the Obligations from the Company
or resort to any collateral security or other means of obtaining payment. Should
the Company default in the payment or performance of any of the Obligations, the
obligations of the Guarantor hereunder with respect to such Obligations in
default shall, upon demand by the Administrative Agent, become immediately due
and payable to the Administrative Agent, for the benefit of the Lenders and the
Administrative Agent, without demand or notice of any nature, all of which are
expressly waived by the Guarantor. Payments by the Guarantor hereunder may be
required by the Administrative Agent on any number of occasions. All payments by
the Guarantor hereunder shall be made to the Administrative Agent, in the manner
and at the place of payment specified therefor in the Credit Agreement, for the
account of the Lenders and the Administrative Agent.
3. Limitation on Liability of Guarantor. The liability of the Guarantor
hereunder shall be satisfied solely from the proceeds of the "Stock" and the
"Stock Collateral" (as each such term is defined in the Parent Pledge Agreement)
and any other collateral pledged pursuant to the Parent Pledge Agreement; and,
except for exercising their respective rights with respect to such Stock, Stock
Collateral and other collateral, the Administrative Agent and the Lenders waive
any rights any of them may have, and agree that they will not seek, to receive
or recover the Obligations from the Guarantor.
4. Guarantor's Agreement to Pay Enforcement Costs, etc. The Guarantor
further agrees, as the principal obligor and not as a guarantor only, to pay to
the Administrative Agent, on demand, all reasonable costs and expenses
(including court costs and legal expenses) incurred or expended by the
Administrative Agent or any Lender in connection with the Obligations to the
extent such costs and expenses are required to be paid by the Company or the
Guarantor under the Credit Agreement and all reasonable costs and expenses
(including court costs and legal expenses) incurred or expended by the
Administrative Agent or any Lender in connection with this Guaranty and the
enforcement thereof, together with interest on amounts recoverable under this
ss.4 from the time when such amounts become due until payment, whether before or
after judgment, at the rate of interest for overdue principal set forth in the
Credit Agreement, provided that if such interest exceeds the maximum amount
permitted to be paid under applicable law, then such interest shall be reduced
to such maximum permitted amount.
5. Waivers by Guarantor; Lenders' Freedom to Act. The Guarantor agrees that
the Obligations will be paid and performed strictly in accordance with their
respective terms, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent or any Lender with respect thereto. The Guarantor waives
promptness, diligences, presentment, demand, protest, notice of acceptance,
notice of any Obligations incurred and all other notices of any kind, all
defenses which may be available by virtue of any valuation, stay, moratorium law
or other similar law now or hereafter in effect, any right to require the
marshalling of assets of the Company or any other entity or other person
primarily or secondarily liable with respect to any of the Obligations, and all
suretyship defenses generally. Without limiting the generality of the foregoing,
the Guarantor agrees to the provisions of any instrument evidencing, securing or
otherwise executed in connection with any Obligation and agrees that the
obligations of the Guarantor hereunder shall not be released or discharged, in
whole or in part, or otherwise affected by (i) the failure of the Administrative
Agent or any Lender to assert any claim or demand or to enforce any right or
remedy against the Company or any other entity or other person primarily or
secondarily liable with respect to any of the Obligations; (ii) any extensions,
compromise, refinancing, consolidation or renewals of any Obligation; (iii) any
change in the time, place or manner of payment of any of the Obligations or any
rescissions, waivers, compromise, refinancing, consolidation or other amendments
or modifications of any of the terms or provisions of the Credit Agreement, the
Notes, the other Loan Documents or any other agreement evidencing, securing or
otherwise executed in connection with any of the Obligations, (iv) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligation; (v) the adequacy of any rights which the
Administrative Agent or any Lender may have against any collateral security or
other means of obtaining repayment of any of the Obligations; (vi) the
impairment of any collateral securing any of the Obligations, including without
limitation the failure to perfect or preserve any rights which the
Administrative Agent or any Lender might have in such collateral security or the
substitution, exchange, surrender, release, loss or destruction of any such
collateral security; or (vii) any other act or omission which might in any
manner or to any extent vary the risk of the Guarantor or otherwise operate as a
release or discharge of the Guarantor, all of which may be done without notice
to the Guarantor. To the fullest extent permitted by law, the Guarantor hereby
expressly waives any and all rights or defenses arising by reason of (A) any
"one action" or "anti-deficiency" law which would otherwise prevent the
Administrative Agent or any Lender from bringing any action, including any claim
for a deficiency, or exercising any other right or remedy (including any right
of set-off), against the Guarantor before or after the Administrative Agent's or
such Lender's commencement or completion of any foreclosure action, whether
judicially, by exercise of power of sale or otherwise, or (B) any other law
which in any other way would otherwise require any election of remedies by the
Administrative Agent or any Lender.
6. Unenforceability of Obligations Against Company. If for any reason the
Company has no legal existence or is under no legal obligation to discharge any
of the Obligations, or if any of the Obligations have become irrecoverable from
the Company by reason of the Company's insolvency, bankruptcy or reorganization
or by other operation of law or for any other reason, this Guaranty shall
nevertheless be binding on the Guarantor to the same extent as if the Guarantor
at all times had been the principal obligor on all such Obligations. In the
event that acceleration of the time for payment of any of the Obligations is
stayed upon the insolvency, bankruptcy or reorganization of the Company, or for
any other reason, all such amounts otherwise subject to acceleration under the
terms of the Credit Agreement, the Notes, the other Loan Documents or any other
agreement evidencing, securing or otherwise executed in connection with any
Obligation shall be immediately due and payable by the Guarantor.
7. Subrogation; Subordination.
7.1. Waiver of Rights Against Company. Until the final payment and
performance in full of all of the Obligations, (i) the Guarantor
shall not exercise and hereby waives any rights against the
Company arising as a result of payment by the Guarantor
hereunder, by way of subrogation, reimbursement, restitution,
contribution or otherwise, and will not prove any claim in
competition with the Administrative Agent or any Lender in
respect of any payment hereunder in any bankruptcy, insolvency or
reorganization case or proceedings of any nature; (ii) the
Guarantor will not claim any setoff, recoupment or counterclaim
against the Company in respect of any liability of the Guarantor
to the Company; and (iii) the Guarantor waives any benefit of and
any right to participate in any collateral security which may be
held by the Administrative Agent or any Lender.
7.2. Subordination. The payment of any amounts due with respect to any
indebtedness of the Company for money borrowed or credit received
now or hereafter owed to the Guarantor is hereby subordinated to
the prior payment in full of all of the Obligations. The
Guarantor agrees that, after the occurrence of any default in the
payment or performance of any of the Obligations, the Guarantor
will not demand, sue for or otherwise attempt to collect any such
indebtedness of the Company to the Guarantor until all of the
Obligations shall have been paid in full. If, notwithstanding the
foregoing sentence, the Guarantor shall collect, enforce or
receive any amounts in respect of such indebtedness while any
Obligations are still outstanding, such amounts shall be
collected, enforced and received by the Guarantor as trustee for
the Lenders and the Administrative Agent and be paid over to the
Administrative Agent, for the benefit of the Lenders and the
Administrative Agent, on account of the Obligations without
affecting in any manner the liability of the Guarantor under the
other provisions of this Guaranty.
7.3. Provisions Supplemental. The provisions of this ss.7 shall be
supplemental to and not in derogation of any rights and remedies
of the Lenders and the Administrative Agent under any separate
subordination agreement which the Administrative Agent may at any
time, and from time to time, enter into with the Guarantor for
the benefit of the Lenders and the Administrative Agent.
8. Security. Subject to the provisions of ss.3, the Guarantor grants to
each of the Administrative Agent and the Lenders, as security for the full and
punctual payment and performance of all of the Guarantor's obligations
hereunder, a continuing lien on and security interest in all securities
belonging to the Guarantor now or hereafter held by the Administrative Agent or
such Lender.
9. Further Assurances. The Guarantor agrees that it will from time to time,
at the request of the Administrative Agent, do all such things and execute all
such documents as the Administrative Agent may consider necessary or desirable
to give full effect to this Guaranty and to perfect and preserve the rights and
powers of the Lenders and the Administrative Agent hereunder. The Guarantor
acknowledges and confirms that the Guarantor itself has established its own
adequate means of obtaining from the Company on a continuing basis all
information desired by the Guarantor concerning the financial condition of the
Company and that the Guarantor will look to the Company and not to the
Administrative Agent or any Lender in order for the Guarantor to keep adequately
informed of changes in the Company's financial condition.
10. Termination; Reinstatement. This Guaranty shall remain in full force
and effect until the Administrative Agent is given written notice of the
Guarantor's intention to discontinue this Guaranty, notwithstanding any
intermediate or temporary payment or settlement of the whole or any part of the
Obligations. No such notice shall be effective unless received and acknowledged
by an officer of the Administrative Agent at the address of the Administrative
Agent for notices set forth in ss.19.6 of the Credit Agreement. No such notice
shall affect any rights of the Administrative Agent or any Lender hereunder,
including without limitation the rights set forth in ss.ss.5 and 7, with respect
to any Obligations incurred or accrued prior to the receipt of such notice or
any Obligations incurred or accrued pursuant to any contract or commitment in
existence prior to such receipt. This Guaranty shall continue to be effective or
be reinstated, notwithstanding any such notice, if at any time any payment made
or value received with respect to any Obligation is rescinded or must otherwise
be returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy or reorganization of the Company, or otherwise, all as though such
payment had not been made or value received.
11. Successors and Assigns. This Guaranty shall be binding upon the
Guarantor, its successors and assigns, and shall inure to the benefit of the
Administrative Agent and the Lenders and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing
sentence, each Lender may assign or otherwise transfer the Credit Agreement, the
Notes, its Revolving Credit Commitment, its Tranche A Commitment, its Tranche B
Commitment, the other Loan Documents or any other agreement or note held by it
evidencing, securing or otherwise executed in connection with the Obligations,
or sell participations in any interest therein, to any other entity or other
person, and such other entity or other person shall thereupon become vested, to
the extent set forth in the agreement evidencing such assignment, transfer or
participation, with all the rights in respect thereof granted to such Lender
herein, all in accordance with ss.18 of the Credit Agreement. The Guarantor may
not assign any of its obligations hereunder.
12. Amendments and Waivers. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Administrative
Agent with the consent of the Required Lenders and the Guarantor. No failure on
the part of the Administrative Agent or any Lender to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right.
13. Notices. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or mailed
first class, postage prepaid, or, in the case of telegraphic or telexed notice,
when transmitted, answer back received, addressed as follows:
(a) if to the Guarantor, at Emmis Operating Company, One Emmis Plaza, 40
Monument Circle, Suite 700, Indianapolis, Indiana 46204, Attention:
Jeffrey H. Smulyan, Chairman, and J. Scott Enright, Esq.; with a copy
to Eric Goodison, Esq., Paul, Weiss, Rifkind, Wharton & Garrison, 1285
Avenue of the Americas, New York, New York 10019, or at such other
address for notice as the Guarantor shall last have furnished in
writing to the Person giving the notice; and
(b) if to the Administrative Agent, at 909 Fannin, Ste. 1700, Houston,
Texas 77010, Attention: Neva Nesbitt, with a copy to Sula R. Fiszman,
Esq., Bingham Dana LLP, 150 Federal Street, Boston, Massachusetts
02110, or such other address for notice as the Administrative Agent
shall have last furnished in writing to the Person giving the notice.
14. Governing Law; Consent to Jurisdiction. THIS GUARANTY IS INTENDED TO
TAKE EFFECT AS A SEALED INSTRUMENT AND SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (without regard to choice of
law provisions). The Guarantor agrees that any suit for the enforcement of this
Guaranty may be brought in the courts of the State of New York or any federal
court sitting therein and consents to the nonexclusive jurisdiction of such
court and to service of process in any such suit being made upon the Guarantor
by mail at the address specified by reference in ss.13. The Guarantor hereby
waives any objection that it may now or hereafter have to the venue of any such
suit or any such court or that such suit was brought in an inconvenient court.
15. Waiver of Jury Trial. THE GUARANTOR HEREBY WAIVES ITS RIGHT TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE
PERFORMANCE OF ANY OF SUCH RIGHTS OR OBLIGATIONS. Except as prohibited by law,
the Guarantor hereby waives any right which it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. The Guarantor (i) certifies that neither the Administrative
Agent nor any Lender nor any representative, agent or attorney of the
Administrative Agent or any Lender has represented, expressly or otherwise, that
the Administrative Agent or any Lender would not, in the event of litigation,
seek to enforce the foregoing waivers and (ii) acknowledges that, in entering
into the Credit Agreement and the other Loan Documents to which the
Administrative Agent or any Lender is a party, the Administrative Agent and the
Lenders are relying upon, among other things, the waivers and certifications
contained in this ss.14.
16. Miscellaneous. This Guaranty constitutes the entire agreement of the
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of or collateral security for any of the Obligations. The invalidity or
unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for the
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty shall be
equally applicable to the singular and plural forms of the terms defined. This
Guaranty is the "Parent Guaranty" referenced in the Credit Agreement.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
and delivered as of the date first above written.
EMMIS COMMUNICATIONS CORPORATION
By:
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Name:
Title: