[DESCRIPTION]Loan Agreement - Society National Bank
LOAN AGREEMENT
by and among
OSBORN COMMUNICATIONS CORPORATION,
as the Borrower,
SOCIETY NATIONAL BANK,
as Agent,
and
THE FINANCIAL INSTITUTIONS LISTED HEREIN
AS OF August 17, 1995
TABLE OF CONTENTS
SECTION 1 DEFINITIONS.............................................1
1.1 DEFINITIONS.............................................1
1.2 OTHER TERMS............................................20
1.3 ACCOUNTING PROVISIONS..................................20
SECTION 2 THE LOANS..............................................21
2.1 THE REDUCING COMMITMENT AND THE REDUCING LOANS.........21
2.2 THE ACQUISITION COMMITMENT AND THE ACQUISITION LOANS...22
2.3 MAKING AND CONTINUATION/CONVERSION OF THE LOANS........23
2.4 THE NOTES..............................................24
2.5 FEES...................................................25
2.6 PREPAYMENT.............................................25
2.7 RESERVES OR DEPOSIT REQUIREMENTS, ETC..................28
2.8 EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE........................................29
2.9 CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL..........29
2.10 FUNDING................................................29
2.11 INDEMNITY..............................................29
2.12 CAPITAL ADEQUACY.......................................30
2.13 TAXES..................................................30
SECTION 3 INTEREST; PAYMENTS.....................................32
3.1 INTEREST...............................................32
3.2 MANNER OF PAYMENTS.....................................34
SECTION 4 CLOSING................................................34
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE BORROWER.........35
5.1 ORGANIZATION AND POWERS................................35
5.2 AUTHORIZATION..........................................35
5.3 FINANCIAL STATEMENTS...................................36
5.4 PROJECTIONS............................................36
5.5 CAPITALIZATION OF THE BORROWER AND ITS SUBSIDIARIES....36
5.6 TITLE TO PROPERTIES; PATENTS, TRADEMARKS, ETC..........37
5.7 LITIGATION; PROCEEDINGS................................37
5.8 TAXES..................................................37
5.9 ABSENCE OF CONFLICTS...................................38
5.10 INDEBTEDNESS...........................................38
5.11 COMPLIANCE.............................................39
5.12 STATEMENTS NOT MISLEADING..............................39
5.13 CONSENTS OR APPROVALS..................................40
5.14 MATERIAL CONTRACTS AND COMMITMENTS.....................40
5.15 EMPLOYEE BENEFIT PLANS.................................40
5.16 LICENSES AND OPERATING AGREEMENTS......................41
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5.17 MATERIAL RESTRICTIONS..................................42
5.18 INVESTMENT COMPANY ACT.................................42
5.19 ABSENCE OF MATERIAL ADVERSE CHANGES....................42
5.20 DEFAULTS...............................................42
5.21 REAL ESTATE............................................42
5.22 SECURITIES LAWS........................................42
5.23 INSURANCE..............................................43
5.24 LABOR MATTERS..........................................43
5.25 ENVIRONMENTAL COMPLIANCE...............................43
5.26 SOLVENCY...............................................46
5.27 ATLANTIC CITY..........................................46
SECTION 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS.......46
6.1 COMPLIANCE.............................................46
6.2 SECURITY AGREEMENTS....................................47
6.3 PLEDGE AGREEMENTS......................................47
6.4 REAL ESTATE MATTERS....................................48
6.5 FINANCING STATEMENTS...................................50
6.6 SUBSIDIARY GUARANTY....................................50
6.7 COLLATERAL ASSIGNMENT OF KEY MAN LIFE INSURANCE........50
6.8 OPINION OF BORROWER'S COUNSEL..........................50
6.9 FINANCIAL INFORMATION..................................51
6.10 ENGINEER'S REPORT......................................51
6.11 DUE DILIGENCE INVESTIGATION............................51
6.12 BORROWING REQUEST......................................51
6.13 INSURANCE CERTIFICATES.................................52
6.14 CORPORATE DOCUMENTS....................................52
6.15 LIEN SEARCHES, CONSENTS AND RELEASES OF LIENS..........52
6.16 NO ORDER, JUDGMENT OR DECREE...........................53
6.17 FEE LETTER; FEES AND EXPENSES..........................53
6.18 LEGAL APPROVAL.........................................53
6.19 OTHER DOCUMENTS........................................53
SECTION 7 AFFIRMATIVE COVENANTS OF THE BORROWER..................53
7.1 USE OF PROCEEDS........................................53
7.2 CONTINUED EXISTENCE; MAINTENANCE OF RIGHTS AND
LICENSES; COMPLIANCE WITH LAW..........................53
7.3 INSURANCE..............................................54
7.4 OBLIGATIONS AND TAXES..................................55
7.5 FINANCIAL STATEMENTS AND REPORTS.......................56
7.6 NOTICES................................................58
7.7 MAINTENANCE OF PROPERTY................................59
7.8 INFORMATION AND INSPECTION.............................59
7.9 MAINTENANCE OF LIENS...................................60
7.10 TITLE TO PROPERTY......................................60
7.11 ENVIRONMENTAL COMPLIANCE AND INDEMNITY.................60
7.12 RATE HEDGING OBLIGATIONS...............................62
7.13 FCC CONSENTS...........................................62
7.14 APPRAISALS.............................................63
7.15 GADSDEN AND ATLANTIC CITY..............................63
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7.16 LICENSE SUBSIDIARIES..................................64
SECTION 8 NEGATIVE COVENANTS OF THE BORROWER....................65
8.1 INDEBTEDNESS..........................................65
8.2 LIENS.................................................65
8.3 GUARANTIES............................................66
8.4 [Intentionally Omitted]...............................66
8.5 [Intentionally Omitted]...............................66
8.6 CAPITAL LEASES........................................66
8.7 CAPITAL EXPENDITURES..................................66
8.8 NOTES, ACCOUNTS RECEIVABLE AND CLAIMS.................67
8.9 CAPITAL DISTRIBUTIONS; RESTRICTIONS ON PAYMENTS TO
STOCKHOLDERS..........................................67
8.10 DISPOSAL OF PROPERTY; MERGERS; ACQUISITIONS;
REORGANIZATIONS......................................68
8.11 INVESTMENTS..........................................71
8.12 AMENDMENT OF GOVERNING DOCUMENTS.....................72
8.13 FINANCIAL COVENANTS..................................72
8.14 MANAGEMENT AGREEMENTS AND FEES.......................73
8.15 FISCAL YEAR..........................................74
8.16 ERISA................................................74
8.17 AFFILIATES...........................................74
8.18 CHANGE OF NAME, IDENTITY OR CORPORATE STRUCTURE......74
8.19 AMENDMENTS OR WAIVERS................................74
8.20 ISSUANCE OR TRANSFER OF CAPITAL STOCK................75
8.21 CHANGE IN BUSINESS...................................75
8.22 REGULATION U.........................................75
8.23 LICENSE SUBSIDIARIES.................................75
SECTION 9 EVENTS OF DEFAULT....................................75
9.1 NON-PAYMENT..........................................75
9.2 FAILURE OF PERFORMANCE IN RESPECT OF OTHER OBLIGATIONS.76
9.3 BREACH OF WARRANTY...................................76
9.4 CROSS-DEFAULTS.......................................76
9.5 ASSIGNMENT FOR BENEFIT OF CREDITORS..................76
9.6 BANKRUPTCY...........................................76
9.7 APPOINTMENT OF RECEIVER; LIQUIDATION.................77
9.8 JUDGMENTS............................................77
9.9 IMPAIRMENT OF COLLATERAL; INVALIDATION OF ANY LOAN
DOCUMENT.............................................77
9.10 TERMINATION OF LICENSE OR OPERATING AGREEMENT........78
9.11 CHANGE OF CONTROL....................................78
9.12 CONDEMNATION.........................................79
9.13 CESSATION OF OPERATIONS..............................79
SECTION 10 REMEDIES............................................79
10.1 OPTIONAL DEFAULTS....................................79
10.2 AUTOMATIC DEFAULTS...................................80
10.3 PERFORMANCE BY THE BANKS.............................80
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10.4 OTHER REMEDIES.......................................80
10.5 ENFORCEMENT AND WAIVER BY THE BANKS..................80
SECTION 11 THE AGENT...........................................81
11.1 APPOINTMENT.........................................81
11.2 POWERS..............................................81
11.3 GENERAL IMMUNITY....................................81
11.4 ACTION ON INSTRUCTIONS OF THE BANKS.................82
11.5 EMPLOYMENT OF AGENTS AND COUNSEL....................82
11.6 RELIANCE ON DOCUMENTS; COUNSEL......................82
11.7 AGENT'S REIMBURSEMENT AND
INDEMNIFICATION.....................................82
11.8 RIGHTS AS A BANK....................................83
11.9 BANK CREDIT DECISION................................83
11.10 SUCCESSOR AGENT.....................................83
11.11 RATABLE SHARING.....................................84
11.12 ACTIONS BY THE AGENT AND THE BANKS..................84
SECTION 12 MISCELLANEOUS.......................................84
12.1 CONSTRUCTION.........................................84
12.2 FURTHER ASSURANCE....................................85
12.3 EXPENSES OF THE AGENT AND THE BANKS; INDEMNIFICATION.85
12.4 NOTICES..............................................86
12.5 WAIVER AND RELEASE BY THE BORROWER...................87
12.6 RIGHT OF SET OFF.....................................87
12.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS...............88
12.8 APPLICABLE LAW.......................................90
12.9 BINDING EFFECT AND ENTIRE AGREEMENT..................90
12.10 COUNTERPARTS........................................90
12.11 SURVIVAL OF AGREEMENTS..............................90
12.12 MODIFICATION........................................90
12.13 SEPARABILITY........................................91
12.14 SECTION HEADINGS....................................91
12.15 ENFORCEMENT.........................................91
12.16 TERMINATION.........................................92
12.17 FCC COMPLIANCE......................................92
12.18 JURY TRIAL WAIVER...................................93
12.19 MARSHALING; PAYMENTS SET ASIDE......................94
12.20 CONFIDENTIALITY.....................................94
LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of August 17,
1995, by and among OSBORN COMMUNICATIONS CORPORATION, a Delaware
corporation (the "Borrower"), the FINANCIAL INSTITUTIONS listed on the
signature pages hereof, and SOCIETY NATIONAL BANK, as agent (the "Agent").
R E C I T A L S:
The Borrower desires to borrow up to $46,000,000 on a reducing
revolving credit basis and up to $10,000,000 on a revolving credit
converting to a term loan basis from the Banks (as that term is defined
below), the proceeds of which will be used for the payment of certain
existing indebtedness, for certain permitted acquisitions of radio
properties, for certain repurchases of the capital stock of the Borrower
and for capital expenditures and for working capital purposes in the
operations of the Borrower and its Subsidiaries.
A G R E E M E N T S:
Accordingly, the Borrower, the Banks and the Agent agree as
follows:
SECTION 1 DEFINITIONS.
1.` DEFINITIONS. All terms typed with leading capitals are
terms defined in this Agreement. For the purposes of this Agreement, the
terms defined in this Section 1 shall have the meanings set out below.
"ACQUISITION COMMITMENT" has the meaning assigned to it in
Section 2.2(a).
"ACQUISITION LOANS" has the meaning assigned to it in Section
2.2(a).
"ACQUISITION NOTES" has the meaning assigned to it in Section
2.4.
"AFFILIATE" means, with respect to any Person (a) any other
Person which is directly or indirectly controlled by, under common control
with or controlling the first specified Person;
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(b) a Person owning beneficially or controlling 5% or more of the equity
interest in such other Person; or (c) any officer, director or partner of
such other Person. The term "control" means possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person whether through the ownership of
voting securities, partnership interests, by contract or otherwise.
"APPLICABLE MARGIN" means, as of any date of determination, the
percentage determined from the following table based upon the ratio of the
principal amount of Total Debt outstanding as of such date to Operating
Cash Flow for the four quarter period then most recently ended:
Total Debt to Applicable Applicable Margin
Operating Margin for for LIBOR Loans:
Cash Flow for Base Rate
last four Loans:
quarters:
Greater than 1.50% 2.75%
5.25:1.0 but
less than or
equal to
5.50:1.0
Greater than 1.25% 2.50%
5.00:1.0 but
less than or
equal to
5.25:1.0
Greater than 1.00% 2.25%
4.50:1.0 but
less than or
equal to
5:00:1.0
Greater than 0.75% 2.00%
4.00:1.0 but
less than or
equal to
4.50:1.0
Greater than 0.50% 1.75%
3.50:1.0 but
less than or
equal to
4.00:1.0
Less than or 0.00% 1.50%
equal to
3.50:1.0
"APPLICABLE PERCENTAGE" means, as of any date of determination,
the percentage determined from the following table based upon the ratio of
the principal amount of Total Debt
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outstanding as of such date to Operating Cash Flow for the fiscal year then
most recently ended:
Total Debt to Operating Applicable Percentage:
Cash Flow for prior
fiscal year:
Greater than 5.0:1.0 50%
Greater than 4.0:1.0 but 25%
less than or equal to
5.0:1.0
Less than or equal to 0%
4.0:1.0
PROVIDED, HOWEVER, that the Applicable Percentage shall be 100% if at the
time of determination a Possible Default or Event of Default exists.
"ASSET SALE" means the sale by the Borrower or any of its
Subsidiaries to any Person of any of the stock or other equity interests of
any Subsidiary or any other assets, other than (a) the sale of assets in
any transaction or related series of transactions with an aggregate value
which does not exceed an amount equal to $1,000,000 and (b) the sale in the
ordinary course of business of assets held for resale in the ordinary
course of business or the trade-in or replacement of assets in the ordinary
course of business.
"ATLANTIC CITY" means Atlantic City Broadcasting Corp., a
Delaware corporation, all of the issued and outstanding capital stock of
which is owned by the Borrower.
"BANKING DAY" means a day on which the main office of the Agent
is open to the public for the transaction of business, and on which, with
respect to any LIBOR Loan, banks are open for business in London, England,
and quoting deposit rates for dollar deposits.
"BANKS" means the financial institutions listed on the signature
pages of this Agreement and their respective successors and assigns.
"BASE RATE" means the rate of interest determined and publicly
announced by the Agent from time to time as its prime rate at its main
office in Cleveland, Ohio. The prime rate functions as a reference rate
index, and the Agent may charge borrowers more or less than the prime rate.
The Base Rate will automatically change as and when such prime rate
changes.
"BASE RATE LOANS" means those Loans described in Sections 2.1 and
2.2 on which the Borrower shall pay interest at a rate based on the Base
Rate.
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"BENEFIT ARRANGEMENT" means any pension, profit-sharing, thrift,
or other retirement plan, medical, hospitalization, vision, dental, life,
disability or other insurance or benefit plan, deferred compensation, stock
ownership, stock purchase, stock option, performance share, bonus, fringe
benefit, savings or other incentive plan, severance plan or other similar
plan, agreement, arrangement or understanding, to which the Borrower or any
member of the Controlled Group is, or in the preceding six years was,
required to contribute on behalf of its employees or directors, whether or
not such plan, agreement, arrangement or understanding is subject to ERISA.
"BORROWER PLEDGE AGREEMENT" has the meaning assigned to it in
Section 6.3
"BORROWER SECURITY AGREEMENT" has the meaning assigned to it in
Section 6.2
"CAPITAL DISTRIBUTION" means any payment or distribution made,
liability incurred or other consideration given for the purchase,
acquisition, redemption or retirement of any stock, partnership interest or
other equity interest of the Borrower or any of its Subsidiaries or as a
dividend, return of capital or other payment or distribution of any kind to
a shareholder or partner of the Borrower or any of its Subsidiaries in
respect of the Borrower's or such Subsidiary's stock or partnership
interests.
"CAPITAL EXPENDITURES" means any payments by a Person for or in
connection with the rental, lease, purchase, construction or use of any
real or personal property the value or cost of which, under GAAP, should be
capitalized and appear on such Person's balance sheets in the category of
property, plant or equipment, without regard to the manner in which such
payments or the instrument pursuant to which they are made are
characterized by such Person or any other Person; PROVIDED, HOWEVER, that
neither (a) the capitalized portion of the purchase price payable in
connection with a Permitted Acquisition, nor (b) expenditures of proceeds
of casualty insurance policies reasonably and promptly applied to replace
insured assets, nor (c) exchanges of advertising time for such real or
personal property (up to a maximum of $300,000 in the aggregate for such
exchanges in any four quarter period) shall constitute a Capital
Expenditure for purposes of this Agreement.
"CAPITALIZED LEASE OBLIGATIONS" means, as to any Person, the
obligations of such Person to pay rent or other amounts under leases of, or
other agreements conveying the right to use real or personal property,
which obligations are required
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to be classified and accounted for as capital leases on a balance sheet of
such Person, prepared in accordance with GAAP.
"CLOSING" and "CLOSING DATE" have the meanings assigned to them
in Section 4.
"CODE" means the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
"COLLATERAL DOCUMENTS" means all promissory notes, agreements,
assignments, guaranties, mortgages, financing statements, certificates and
other instruments and documents which are required by this Agreement or any
other Collateral Document to be executed or delivered by or on behalf of
the Borrower, any of its Subsidiaries or any other Person.
"COMMITMENTS" means the Reducing Commitment and the Acquisition
Commitment, and "COMMITMENT" means either of such Commitments.
"CONTROLLED GROUP" means a controlled group of entities which are
treated as a single employer under Sections 414(b), 414(c) or 414(m) of the
Code of which the Borrower or any of its Subsidiaries is a part.
"CONVERSION DATE" means December 31, 1996.
"DEFAULT INTEREST RATE" means a rate of interest equal to the
Base Rate plus 3.5% per annum.
"DISCOUNT RATE" means, with respect to a prepayment or conversion
of a LIBOR Loan on a date other than the last day of its Interest Period, a
rate equal to the interest rate (as of the date of prepayment) on United
States Treasury obligations in a like amount as such Loan and with a
maturity approximately equal to the period between the prepayment or
conversion date and the last day of the Interest Period of such Loan, as
determined by the Agent.
"ENVIRONMENTAL CLAIM" means, with respect to any Person, any
written or oral notice, claim, demand, request for information, citation,
summons, order or other communication (each, a "CLAIM") by any other Person
alleging or asserting the liability of the recipient of such claim for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other property or health, personal injuries, fines or
penalties arising out of, based on or resulting from (a) the presence, or
Release, of any Hazardous Material at or from any location, whether or not
owned by such Person, or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law. The term
"Environmental
Page 6
Claim" shall include, without limitation, any claim by any
governmental authority for enforcement, cleanup, removal, response,
remedial or other actions or damages pursuant to any applicable
Environmental Law, and any claim by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief resulting from the presence or Release of Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment.
"ENVIRONMENTAL LAWS" means all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and binding standards promulgated by
the government of the United States of America or by any state or
municipality thereof or by any court, agency, instrumentality, regulatory
authority or commission of any of the foregoing concerning health, safety
and protection of, or regulation of the emission, release or discharge of
substances into, the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.
"EVENT OF DEFAULT" means any of the events specified in Section
9.
"EXCESS CASH FLOW" for any fiscal year of the Borrower means
Operating Cash Flow for such fiscal year, MINUS the sum of the following:
(a) all principal payments required to be made on the Reducing Loans
pursuant to Section 2.6(b)(i) during such fiscal year, PLUS (b) all
principal payments required to be made on the Acquisition Loans pursuant to
Section 2.2(d) during such fiscal year, PLUS (c) all principal payments
required to be made by the Borrower and its Subsidiaries on Total Debt
(other than the Loans) during such fiscal year, PLUS (d) all Interest
Expense of the Borrower and its Subsidiaries required to be paid during
such fiscal year, PLUS (e) Capital Expenditures paid by the Borrower and
its Subsidiaries to the extent permitted in Section 8.7 during such fiscal
year, less the net sales proceeds, if any, of property being replaced by
such Capital Expenditures, PLUS (f) federal and state income taxes paid
during such fiscal year, PLUS (g) $500,000, PLUS (g) the excess, if any, in
Working Capital as of the end of such fiscal year over Working Capital as
of the end of the prior fiscal year.
"FCC" means the Federal Communications Commission or any
governmental authority at any time substituted therefor.
"FINAL ORDER" means an action or order issued by the FCC
(a) which has not been reversed, stayed, enjoined, set aside, annulled or
suspended, and (b) with respect to which (i) no requests or petitions have
been filed for administrative or
Page 7
judicial review, reconsideration, rehearing, appeal or stay, and
the time for filing any such requests or petitions and for the FCC
to set aside the action on its own motion has expired, (ii) in the
event of review, reconsideration or appeal, the time for further
review, reconsideration or appeal has expired, and (iii) no appeal
to a court or request for stay by a court of such action is pending
or in effect, and, if any deadline for filing any such appeal or request is
designated by statute or rule, it has passed.
"GADSDEN" means Gadsden Broadcasting Corp., a Delaware
corporation, all of the stock of which is currently subject to the Trust
Agreement, and which is beneficially owned, indirectly, by the Borrower
"GAAP" means generally accepted accounting principles in effect
from time to time in the United States, consistently applied.
"GUARANTOR" means one who pledges its credit or property in any
manner, or otherwise becomes responsible for the payment or other
performance of the indebtedness, contract or other obligation of another
Person and includes (without limitation) any guarantor (whether of payment
or of collection), surety, co-maker, endorser or one who agrees
conditionally or otherwise to make any purchase, loan or investment in
order thereby to enable another to prevent or correct a default of any kind
and one who has endorsed (otherwise than for collection or deposit in the
ordinary course of business), or has discounted with recourse or agreed
(contingently or otherwise) to purchase or repurchase or otherwise acquire
or become liable for, any Indebtedness or who has entered into any
agreement for the purchase or other acquisition of any product, materials
or supplies, or for the making of shipments, or for the payment for
services, if in any such case payment therefor is to be made regardless of
the nondelivery of the product, materials or supplies or the non-furnishing
of the services.
"GUARANTY" shall have the meaning assigned to it in Section 6.6.
"HAZARDOUS MATERIAL" means, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other
equipment that contain polychlorinated biphenyls ("PCBS"), (b) any
chemicals or other materials or substances that are now or hereafter become
defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous wastes",
"restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of
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similar import under any Environmental Law and (c) any other chemical or
other material or substance, exposure to which is now or hereafter
prohibited, limited or regulated under any Environmental Law.
"HEALTHCARE COMMUNICATIONS BUSINESS" means the business conducted
by Osborn Healthcare Communications, Inc., a Delaware corporation.
"HISTORICAL FIXED CHARGES" means as of the end of any four fiscal
quarter period of the Borrower, the sum of the aggregate amount of (a) all
principal payments required to be made pursuant to Section 2.6(b)(i) as a
result of a scheduled Reducing Commitment reduction pursuant to Section
2.1(b) during such four quarter period, (b) all principal payments required
to be paid on the Acquisition Loans pursuant to Section 2.2(d) during such
four quarter period, (c) all required principal payments on Total Debt
(other than the Loans) during such four quarter period, (d) all Interest
Expense of the Borrower or any of its Subsidiaries required to be paid
during such four quarter period, (e) Capital Expenditures made by the
Borrower or any of its Subsidiaries during such four quarter period
(excluding any Capital Expenditures permitted pursuant to Section 8.7(b) or
(c)), and (f) federal and state income taxes paid by the Borrower during
such four quarter period (other than any such taxes resulting from sales,
exchanges or other dispositions of property not in the ordinary course of
business). In calculating Historical Fixed Charges for any period which
includes any period prior to the Closing Date, the Total Debt of the
Borrower owing to World Subordinated Debt Partners, L.P. outstanding during
such period shall be deemed not to have been outstanding, and instead an
amount equal to the Loans made on the Closing Date hereunder shall be
deemed to be outstanding during such period, and the interest rate in
effect hereunder on the date of determination shall be deemed to be the
interest rate which was in effect on such indebtedness for such period.
"INDEBTEDNESS" of any Person means, without duplication, all
liabilities, obligations and reserves, contingent or otherwise, which, in
accordance with GAAP, would be reflected as a liability on a balance sheet
or the notes thereto (excluding trade accounts payable and accrued expenses
arising in the ordinary course of business and not more than ninety days
past due), including, without limitation, (a) all obligations of such
Person for borrowed money or with respect to deposits or advances of any
kind, (b) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, (c) all obligations of such Person upon which
interest charges are customarily paid, (d) all obligations of such Person
under conditional sale or other title retention agreements relating to
assets purchased by such Person, (e) all obligations of such
Page 9
Person incurred, issued or assumed as the deferred purchase price of property
or services (other than to the extent any such obligation is to be satisfied
by the delivery of common stock of the Borrower or preferred stock of the
Borrower which (i) has no mandatory dividend rights, other than dividends
payable solely by the delivery of common stock or preferred stock which
satisfies the conditions of this parenthetical, and (ii) has no liquidation
rights, put rights or other mandatory payment rights exercisable at any
time prior to one year after the Termination Date), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed by such Person, (g) all obligations or
liabilities in respect of which such Person is a Guarantor, (h) all
Capitalized Lease Obligations of such Person, (i) all Rate Hedging
Obligations, and (j) all obligations of such Person as an account party to
reimburse any Person in respect of letters of credit or bankers'
acceptances. The Indebtedness of any Person shall include any recourse
Indebtedness of any partnership in which such Person is a general partner.
"INTEREST EXPENSE" means, without duplication, for any period,
interest expense (net of any interest income) deducted in determining Net
Earnings for such period (including interest with respect to Capital
Leases), excluding: (a) the amortization of fees and costs incurred with
respect to this Agreement and (b) any interest paid in kind or other non-
cash interest expense. For purposes of the foregoing, interest expense
shall be determined after giving effect to any net payments made or
received by the Borrower with respect to Rate Hedging Obligations.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the
period selected by the Borrower, commencing on the date such Loan is made,
continued or converted and ending on the last day of such period as
selected by the Borrower. The Interest Period for each LIBOR Loan shall be
one, two, three or six months; PROVIDED, HOWEVER, that whenever the last
day of such Interest Period would otherwise occur on a day other than a
Banking Day, the last day of such Interest Period shall occur on the next
succeeding Banking Day; PROVIDED, FURTHER, that if such extension of time
would cause the last day of such Interest Period to occur in the next
calendar month, the last day of such Interest Period shall occur on the
next preceding Banking Day. The Borrower shall not select any Interest
Period which extends beyond any date on which a scheduled payment is or may
be required to be made pursuant to Section 2.2(d) or Section 2.6(b)(i)
unless the sum of the amount available to be drawn under the Commitments
plus the aggregate principal balance of all Base Rate Loans and all LIBOR
Loans with Interest Periods ending
Page 10
prior to such date is at least equal to the maximum amount that is, or may
be, required to be paid on such date.
"LIBOR" means the average (rounded upwards, if necessary, to the
nearest 1/16th of 1%) of the per annum rates at which deposits in
immediately available funds in United States dollars for the relevant
Interest Period and in an amount approximately equal to the Loan to be
disbursed or to remain outstanding during such Interest Period, as the case
may be, are offered to the Agent by prime banks in the London Eurodollar
market, determined as of 11:00 a.m. London time (or as soon thereafter as
practicable), two Banking Days prior to the beginning of the relevant
Interest Period.
"LIBOR LOANS" means those Loans described in Sections 2.1 and 2.2
on which the Borrower shall pay interest at a rate based on the applicable
LIBOR Rate.
"LIBOR RATE" means a rate per annum equal to the quotient
obtained (rounded upwards, if necessary, to the nearest 1/100th of 1%) by
dividing (a) the applicable LIBOR by (b) 1.00 minus the LIBOR Reserve
Percentage.
"LIBOR RESERVE PERCENTAGE" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
all basic, supplemental, marginal and other reserves and taking into
account any transitional adjustments or other scheduled changes in reserve
requirements) for a member bank of the Federal Reserve System in respect of
Eurocurrency Liabilities (as that term is defined in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time). The LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in the LIBOR Reserve Percentage.
"LICENSE" means any authorization, permit, consent, franchise,
ordinance, registration, certificate, license, agreement or other right
filed with, granted by, or entered into by a federal, state or local
governmental authority which permits or authorizes the acquisition,
construction or operation of a radio or television broadcasting station, a
subscription audio or video service, a satellite distribution system for
audio or video programming or any part of a radio or television
broadcasting station or satellite distribution system or which is required
for the acquisition, ownership or operation of any Station or any part of
the Muzak Business or the Healthcare Communications Business.
Page 11
"LICENSE SUBSIDIARY" means each Subsidiary formed pursuant to
Section 7.16 to hold Licenses issued by the FCC.
"LICENSING AUTHORITY" means a governmental authority which has
granted or issued a License.
"LIEN" as applied to the property of any Person means: (a) any
mortgage, lien, pledge, charge, lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or other
security interest or encumbrance of any kind in respect of any property of
such Person, or upon the income or profits therefrom; (b) any arrangement,
express or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same
to the payment of Indebtedness in priority to the payment of the general,
unsecured creditors of such Person; (c) the filing of, or any agreement to
give, any financing statement under the Uniform Commercial Code or its
equivalent of any jurisdiction in respect of Indebtedness; and (d) in the
case of securities or other equity interests, any purchase option, call or
similar right of a third party with respect to such securities or other
equity interests.
"LIFE INSURANCE ASSIGNMENT" has the meaning assigned to it in
Section 6.7.
"LOANS" means the Reducing Loans and the Acquisition Loans.
"MAJORITY BANKS" means, at any time, the Banks holding at least
66 2/3% of the then aggregate unpaid principal amount of the Notes, or, if
no principal amount of the Notes is then outstanding, the Banks having at
least 66 2/3% of the Commitments.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon or
change in (a) the properties, assets, business, operations, financial
condition or prospects of the Borrower or any of its Subsidiaries which,
together with any other of its Subsidiaries suffering or affected by the
same material adverse effect or change, has 15% or more of the consolidated
assets of, or contributed 15% or more to the consolidated Operating Cash
Flow of, the Borrower and its Subsidiaries taken as a whole, or on the
ability of the Borrower or any such Subsidiary to conduct its business, (b)
the ability of the Borrower, any of the Borrower's Subsidiaries or any
other party to a Collateral Document (other than the Agent or any Bank) to
perform its obligations hereunder or under any other Collateral Document to
which it is a party, (c) the validity or enforceability of this Agreement,
the Notes or any other Collateral Document, or (d) the rights or remedies
of the Agent or the Banks under this
Page 12
Agreement, the Notes or any other Collateral Document or at law or in equity.
"MORTGAGES" has the meaning assigned to it in Section 6.4(a).
"MUZAK BUSINESS" means the business conducted under the Muzak
Franchises.
"MUZAK FRANCHISE" means a franchise from (a) Muzak Limited
Partnership (or its successors) to market and distribute subscription music
services and adjunct services relating to the sequencing, changing and
switching of music-program communications and the delivery of advertising,
video and data communications or (b) some other Person with a system that
is substantially similar to the system described in (a).
"NET EARNINGS" means, with respect to the Borrower, the
consolidated net income (or deficit) of the Borrower for the period
involved, after taxes paid or accrued and after all proper charges and
reserves (excluding, however, non-recurring special charges and credits),
all as determined in accordance with GAAP; PROVIDED, HOWEVER, that in
calculating Net Earnings for any period that includes any calendar quarter
in 1994, the actual amount of corporate overhead deducted in respect of
such quarter shall be added back and an amount equal to $425,000 for such
quarter shall be subtracted.
"NOTES" means the Reducing Notes and the Acquisition Notes.
"OBLIGATIONS" means any obligation of the Borrower or any of its
Subsidiaries (a) to pay to the Banks the principal of and interest on the
Loans in accordance with the terms hereof and of the Notes, including,
without limitation, any interest accruing after the date of any filing by
the Borrower or any Subsidiary of any petition in bankruptcy or the
commencing of bankruptcy, insolvency or similar proceedings with respect to
the Borrower or any of its Subsidiaries, regardless of whether such
interest is allowable as a claim in any such proceeding; (b) in respect of
any Rate Hedging Obligations owing to any Bank or any Affiliate of any
Bank; (c) to pay, satisfy or perform any other liability or obligation to
the Agent or any Bank, arising under this Agreement or any Collateral
Document, whether now existing or hereafter incurred by reason of future
advances or otherwise, matured or unmatured, direct or contingent, joint or
several, including any extensions, modifications or renewals thereof and
substitutions therefor, and including without limitation all fees,
indemnification amounts, costs and expenses, including interest thereon and
reasonable attorneys' fees, incurred by the Agent or any Bank for the
protection, preservation or enforcement
Page 13
of its rights and remedies arising hereunder or under the Collateral
Documents; (d) to repay to the Banks all amounts advanced at any
time by the Banks hereunder or under any Collateral Document,
including, without limitation, advances for principal or interest
payments to prior secured parties, mortgagees, lienors or other Persons, or
for taxes, levies, insurance, rent or repairs to, or maintenance or storage
of, any of the property of the Borrower or any of its Subsidiaries; (e) to
perform any covenant or agreement made with the Banks pursuant to this
Agreement or any Collateral Document; or (f) to take any other action in
respect of any other liability of any nature of the Borrower or any of its
Subsidiaries to the Banks under this Agreement or any Collateral Document.
"OPERATING AGREEMENT" means any programming agreement, time
brokerage, local marketing or similar agreement, network affiliation
agreement, franchise agreement, lease or other agreement relating to the
operation of a Station, the Muzak Business or the Healthcare Communications
Business by the Borrower or any of its Subsidiaries, the termination or
adverse modification of which could have a Material Adverse Effect.
"OPERATING CASH FLOW" means, during any period, the consolidated
Net Earnings of the Borrower for such period (excluding, to the extent
included in Net Earnings, (i) the effect of any exchange of advertising
time for non-cash consideration, such as merchandise or services, (ii) any
other non-cash income or expense (including the cumulative effect of a
change in accounting principles and extraordinary items), (iii) any gains
or losses from sales, exchanges and other dispositions of property not in
the ordinary course of business, and (iv) equity in results of affiliated
companies, as reflected on the Borrower's financial statements, including
Ruth Broadcasting Corporation, but only to the extent that losses
attributable to Ruth Broadcasting Corporation are actually funded by the
Borrower or any of its Subsidiaries), MINUS any interest income, investment
income and other non-operating income, MINUS any cash payments made in
respect of Programming Obligations in such period, PLUS the sum of (a)
depreciation on or obsolescence of fixed or capital assets and amortization
of intangibles and leasehold improvements (including, without limitation,
amortization in respect of Programming Obligations) for such period, PLUS
(b) Interest Expense for such period, PLUS (c) federal and state income
taxes for such period, PLUS (d) any cash payments of management fees
received by the Borrower from Fairmont Communications Corporation and
Northstar Television Group, Inc. in such period, all on a consolidated
basis and computed on the accrual method. For purposes of calculating
Operating Cash Flow in any period (other than for purposes of calculating
Excess Cash Flow), any acquisition of any Station, and any sale or other
disposition of any Station, which occurs
Page 14
during such period shall be deemed to have occurred on the first day of
such period.
"PBGC" means the Pension Benefit Guaranty Corporation or any
governmental authority at any time substituted therefor.
"PENSION PLAN" means an employee pension benefit plan as defined
in Section 3(2) of ERISA which is subject to the provisions of Section 302
or Title IV of ERISA or Section 412 of the Code.
"PERMITTED ACQUISITION" has the meaning assigned to it in Section
8.10(b).
"PERMITTED DIVESTITURE" means (a) any sale by the Borrower or any
of its Subsidiaries of all or substantially all of the assets of, or more
than 50% of the capital stock of the Subsidiary which owns, any of the
following Stations: WOLZ-FM, Fort Myers, Florida; WFKS-FM, Daytona Beach,
Florida; WAAX-AM/WQEN-FM, Gadsden, Alabama; WAYV-FM, Atlantic City, New
Jersey; WWRD-FM, Jacksonville, Florida; WING-FM, Dayton, Ohio; WFXK-FM,
Raleigh, North Carolina; and WRWS, San Carlos, Florida; and (b) any sale by
Osborn Sound and Communications of Georgia, Inc. of the real property
located at 1209 Williams Street, NW, Atlanta, Georgia 30309.
"PERMITTED LIEN" means any of the following Liens:
(a) Liens for taxes or assessments and similar charges,
which are either not delinquent or being contested diligently and in good
faith by appropriate proceedings, and (i) as to which the Borrower or its
affected Subsidiary has set aside adequate reserves to the extent required
by and in accordance with GAAP on its books and (ii) which do not entail
any significant risk of loss, forfeiture, foreclosure or sale of the
property subject thereto;
(b) statutory Liens, such as mechanic's, materialman's,
warehouseman's, landlord's, artisan's, workman's, contractor's, carrier's
or other like Liens, (i) incurred in good faith in the ordinary course of
business, (ii) which are either not delinquent or are being contested
diligently and in good faith by appropriate proceedings, (iii) as to which
the Borrower or its affected Subsidiary has set aside adequate reserves to
the extent required by and in accordance with GAAP on its books or bonded
satisfactorily to the Agent and (iv) which do not entail any significant
risk of loss, forfeiture, foreclosure or sale of the property subject
thereto;
(c) encumbrances consisting of zoning restrictions,
easements, licenses, reservations, provisions,
Page 15
covenants, conditions, waivers, restrictions on the use of real property,
minor survey defects or minor irregularities of title, PROVIDED that none
of such encumbrances materially impairs the use or value of any property
in the operation of the Borrower's or any of its Subsidiaries' business;
(d) Liens securing conditional sale or purchase money
obligations to the extent the Indebtedness secured thereby is permitted
under Section 8.1 and Capitalized Lease Obligations permitted under Section
8.6 (and protective UCC-1 financing statements filed by lessors in
connection with leases not intended as security), but only in the property
which is the subject of such obligations;
(e) Liens arising under or pursuant to this Agreement or
any Collateral Document or otherwise securing any Obligation;
(f) Liens in respect of judgments or awards with respect to
which the Borrower or any of its Subsidiaries is, in good faith,
prosecuting an appeal or proceeding for review and with respect to which a
stay of execution upon such appeal or proceeding for review has been
secured, and as to which judgments or awards the Borrower or such
Subsidiary has established adequate reserves to the extent required by and
in accordance with GAAP on its books or has bonded in a manner satisfactory
to the Agent;
(g) pledges or deposits made in the ordinary course of
business to secure payment of worker's compensation, or to participate in
any fund in connection with worker's compensation, unemployment insurance,
old-age pensions or other social security programs;
(h) Liens granted to secure the performance of bids,
tenders, contracts, leases, public or statutory obligations, surety,
customs, appeal and performance bonds and other similar obligations and not
incurred in connection with the borrowing of money, the obtaining of
advances or the payment of the deferred purchase price of any property;
(i) Liens on the assets and capital stock of Atlantic City
in favor of National Westminster Bank or its assignees securing loans to
Atlantic City in a principal amount not to exceed $3,400,000;
(j) leases or subleases granted to others not interfering
in any material respect with the business of the Borrower or its
Subsidiaries;
Page 16
(k) any interest or title of a lessor or sublessor under
any lease pursuant to which the Borrower or any of its Subsidiaries holds a
leasehold interest as tenant; and
(l) any other Liens listed on EXHIBIT G hereto or to which
the Majority Banks have consented in writing and renewals and extensions
thereof.
"PERSON" shall include natural persons, corporations, business
trusts, associations, companies, limited liability companies, joint
ventures and partnerships.
"PLAN" means any employee benefit plan, as defined under Section
3(3) of ERISA, established or maintained by the Borrower or any member of
the Controlled Group or any such Plan to which the Borrower or any member
of the Controlled Group is, or in the last six years was, required to
contribute on behalf of its employees.
"PLEDGE AGREEMENTS" means the Borrower Pledge Agreement and the
Subsidiary Pledge Agreement.
"POSSIBLE DEFAULT" means an event, condition, situation or thing
which constitutes, or which with the lapse of any applicable grace period
or the giving of notice or both would constitute, an Event of Default.
"PREPAYMENT PREMIUM" with respect to the prepayment or conversion
of any LIBOR Loan or any other receipt or recovery of any LIBOR Loan prior
to the end of the applicable Interest Period, whether by voluntary
prepayment, acceleration, conversion to a Base Rate Loan or otherwise,
means an amount equal to the sum of (a) the present value (discounted at
the Discount Rate) of the product of (i) the excess, if any, of the rate of
interest applicable to such Loan pursuant to Section 3.1 hereof at the time
of such prepayment or conversion on the principal amount so prepaid,
converted or accelerated, as the case may be, over the rate of interest on
United States Treasury obligations on the date of payment, conversion or
acceleration, as the case may be, of such principal amount and having a
maturity date approximating the last Banking Day of the applicable Interest
Period, as determined by the Agent, multiplied by (ii) the principal amount
so prepaid, converted or accelerated, as the case may be, multiplied by
(iii) a fraction, the numerator of which is the number of days remaining in
the related Interest Period and the denominator of which is 360 (taking
into consideration the applicable compounding for the frequency of
installment payments of the Loans being prepaid), plus (b) reasonable out-
of-pocket costs and expenses incurred by the Banks and the Agent with
respect to such prepayment.
Page 17
"PROGRAMMING OBLIGATIONS" means all direct or indirect
liabilities, contingent or otherwise, with respect to contracts for
television broadcast rights relating to television series or other programs
produced or distributed for television release.
"PROJECTED DEBT SERVICE" means, as of any date, the sum of (a)
all scheduled Reducing Commitment reductions pursuant to Section 2.1(b)
during the four quarter period following such date, (b) all principal
payments required to be made on the Acquisition Loans pursuant to Section
2.2(d) during such subsequent four quarter period, (c) all principal
payments required to be made by the Borrower and its Subsidiaries on Total
Debt (other than the Loans) during such subsequent four quarter period, and
(d) all Interest Expense of the Borrower and its Subsidiaries required to
be paid during such subsequent four quarter period. In calculating
Projected Debt Service, (i) the interest rate during such subsequent period
on any Indebtedness which does not bear interest at a rate which is fixed
for the entire subsequent period shall be deemed to be the interest rate in
effect on such Indebtedness as of the date of determination, (ii) for dates
of determination prior to the Conversion Date, it shall be assumed that the
principal amount of Acquisition Loans outstanding as of the date of
determination will be outstanding immediately following the Conversion
Date, and (iii) it shall be assumed that the principal amount of Reducing
Loans outstanding as of the date of determination will be outstanding for
the subsequent four quarter period, subject to required Reducing Commitment
reductions.
"QUARTERLY DATE" means the last day of each of the Borrower's
fiscal quarters.
"RATABLE SHARE" means with respect to any Bank, its pro rata
share of the Commitments or the Loans. Initially, the Ratable Share of
Society shall be 100%.
"RATE HEDGING OBLIGATIONS" means any and all obligations of the
Borrower, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefor), under (a) any and
all agreements, devices or arrangements designed to protect the Borrower
from the fluctuations of interest rates, including interest rate exchange
or swap agreements, interest rate cap or collar protection agreements, and
interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"REDUCING COMMITMENT" has the meaning assigned to it in Section
2.1(a).
Page 18
"REDUCING LOANS" has the meaning assigned to it in Section
2.1(a).
"REDUCING NOTES" has the meaning assigned to it in Section 2.4.
"REGULATORY CHANGE" means the adoption of or any change in
federal, state or local treaties, laws, rules or regulations or the
adoption of or change in any interpretations, guidelines, directives or
requests of or under any federal, state or local treaties, laws, rules or
regulations (whether or not having the force of law) by any court,
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof.
"RELEASE" shall mean any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment, including, without
limitation, the movement of Hazardous Materials through ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata.
"REPORTABLE EVENT" means a reportable event as that term is
defined in Title IV of ERISA, excluding, however, such events as to which
the PBGC by regulation has waived the requirement of Section 4043(a) of
ERISA that it be notified within thirty days of the occurrence of such
event (PROVIDED that a failure to meet the minimum funding standard of
Section 412 of the Code and of Section 302 of ERISA shall be a Reportable
Event regardless of the issuance of any such waivers in accordance with
Section 412(d) of the Code).
"SECURITY AGREEMENTS" means the Borrower Security Agreement and
the Subsidiary Security Agreement.
"SOCIETY" means Society National Bank.
"STATIONS" means, as of any date, the radio and television
broadcasting stations owned by the Borrower or any of its Subsidiaries as
of such date, including any such stations being constructed; all auxiliary
stations owned or operated in connection with the foregoing or any
satellite, microwave or other communications station owned or operated at
such time by the Borrower or any of its Subsidiaries.
"SUBSIDIARY" means each partnership or corporation, the majority
of the outstanding partnership interests, capital stock or voting power of
which is (or upon the exercise of all outstanding warrants, options and
other rights would be) owned, directly or indirectly, at the time in
question by the Borrower. The foregoing to the contrary notwithstanding,
Atlantic City
Page 19
shall not be deemed to be a Subsidiary of the Borrower until
such time as the debt owed by Atlantic City to National Westminster Bank
shall have been paid in full.
"SUBSIDIARY PLEDGE AGREEMENT" has the meaning assigned to it in
Section 6.3.
"SUBSIDIARY SECURITY AGREEMENT" has the meaning assigned to it in
Section 6.2.
"TERMINATION DATE" means December 31, 2001.
"TOTAL DEBT" means all Indebtedness of the Borrower and its
Subsidiaries for borrowed money, including, without limitation, the Loans,
all Capitalized Lease Obligations of the Borrower and its Subsidiaries, all
other Indebtedness of the Borrower or any of its Subsidiaries represented
by notes or drafts representing extensions of credit for borrowed money or
on which interest is typically charged, all obligations evidenced by bonds,
debentures, notes or other similar instruments (including all such
obligations to which any property or asset owned by the Borrower or any of
its Subsidiaries is subject, whether or not the obligation secured thereby
shall have been assumed), all obligations under conditional sale or other
title retention agreements relating to purchased assets, all obligations
incurred, issued or assumed as the deferred purchase price of property or
services (other than to the extent any such obligation is to be satisfied
by the delivery of common stock of the Borrower or preferred stock of the
Borrower which (a) has no mandatory dividend rights, other than dividends
payable solely by the delivery of common stock or preferred stock which
satisfies the conditions of this parenthetical, and (b) has no liquidation
rights, put rights or other mandatory payment rights exercisable at any
time prior to one year after the Termination Date), all obligations or
liabilities in respect of which the Borrower or any of its Subsidiaries is
a Guarantor, and all obligations as an account party to reimburse any
Person in respect of letters of credit or bankers' acceptances.
"TRUST AGREEMENT" means the Irrevocable Voting Trust Agreement
among Southeast Radio Holding Corp., Gadsden, the Borrower and James M.
Ward, Trustee, pursuant to which legal title to, and all voting rights
relating to, the stock of Gadsden are held by James M. Ward as trustee for
the benefit of Southeast Radio Holding Corp., a Delaware corporation which
is wholly owned by the Borrower.
"WORKING CAPITAL" means, as of any date, the excess of the
consolidated current assets, other than cash, of the Borrower and its
Subsidiaries over their consolidated current liabilities,
Page 20
other than the current portion of long term debt, as of such date.
1.2 OTHER TERMS. Except as otherwise specifically provided
in this Agreement, each term not otherwise expressly defined herein which
is defined in the Uniform Commercial Code, as amended (the "UCC") as
adopted in any applicable jurisdiction shall have the meaning assigned to
it in the UCC in effect in such jurisdiction. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. All references herein to Sections or Exhibits shall be
deemed to be references to Sections of, and Exhibits to, this Agreement
unless the context shall otherwise require. Whenever any agreement,
promissory note or other instrument or document is defined in this
Agreement, such definition shall be deemed to mean and include, from and
after the date of any amendment, restatement or modification thereof, such
agreement, promissory note or other instrument or document as so amended,
restated or modified. All terms defined in this Agreement in the singular
shall have comparable meanings when used in the plural and vice versa. The
words "hereof," "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.
1.3 ACCOUNTING PROVISIONS. All accounting terms used in this
Agreement which are not expressly defined herein shall have the respective
meanings given to them in accordance with GAAP, all computations shall be
made in accordance with GAAP, and all balance sheets and other financial
statements shall be prepared in accordance with GAAP. All financial
covenants and calculations required herein and all financial statements and
other information furnished to the Agent and the Banks pursuant to Section
7.5 (a) shall reflect the assets and results of operations of Gadsden, Ruth
Broadcasting Corporation (to the extent any losses of Ruth Broadcasting
Corporation are actually funded by the Borrower or any of its Subsidiaries)
and each other entity the assets or results of operations of which are
reflected in the Borrower's financial statements as "equity in results of
affiliated companies" as if each such entity were a consolidated Subsidiary
for purposes of GAAP and as if each such entity were owned by the Borrower
since July 1994 (in the case of Gadsden) or the date of the Borrower's
acquisition of such other entity, and (b) shall exclude the assets and
results of operations of Atlantic City as if Atlantic City were not a
subsidiary of the Borrower until such time as the debt owing by Atlantic
City to National Westminster Bank shall have been paid in full.
Page 21
SECTION 2 THE LOANS.
2.1 THE REDUCING COMMITMENT AND THE REDUCING LOANS.
(a) Subject to the terms and conditions hereof, during the
period up to but not including the Termination Date, the Banks severally,
but not jointly, shall make loans to the Borrower in such amounts as the
Borrower may from time to time request (the "Reducing Loans") but not
exceeding in aggregate principal amount at any one time outstanding
$46,000,000 (as such amount may be reduced from time to time, the "Reducing
Commitment"). Each Reducing Loan requested by the Borrower shall be funded
by the Banks in accordance with their Ratable Shares of the requested
Reducing Loan. A Bank shall not be obligated hereunder to make any
additional Reducing Loan if immediately after making such Loan, the
aggregate principal balance of all Reducing Loans made by such Bank would
exceed such Bank's Ratable Share of the Reducing Commitment. The Reducing
Loans may be comprised of Base Rate Loans or LIBOR Loans, as provided in
Section 2.3.
(b) On each date set forth in the table below, the Reducing
Commitment shall automatically reduce by the amount set forth for such date
in such table:
Calendar Year March 31 June 30 September 30 December 31
1995 $0 $0 $0 $0
1996 $0 $0 $0 $1,518,000
1997 $1,023,500 $1,023,500 $1,023,500 $1,023,500
1998 $1,357,000 $1,357,000 $1,357,000 $1,357,000
1999 $1,725,000 $1,725,000 $1,725,000 $1,725,000
2000 $2,277,000 $2,277,000 $2,277,000 $2,277,000
2001 $2,208,000 $2,208,000 $2,208,000 $12,328,000
(c) Prior to the Termination Date, the Borrower may, at its
option, from time to time prepay all or any portion of the Reducing Loans,
subject to the provisions of Section 2.6, and the Borrower may reborrow
from time to time hereunder amounts so paid up to the amount of the
Reducing Commitment in effect at the time of reborrowing.
(d) At any time prior to the Termination Date, by written
notice to the Agent no later than 11:00 A.M. Cleveland, Ohio time five
Banking Days prior to such termination or
Page 22
reduction, the Borrower may permanently terminate, or from time to time
permanently reduce, the Reducing Commitment. Such notice shall be in
writing or by telephonic communication confirmed by telecopy or other
facsimile transmission on the same day as such telephone notice. Any
such partial reduction hereunder shall be in an amount which is not
less than $1,000,000 or an integral multiple of $1,000,000 in excess
thereof. The Agent shall notify the Banks of any such reduction or
termination of the Reducing Commitment.
(e) All Reducing Loans, together with all interest accrued
thereon, shall be paid in full no later than the Termination Date.
2.2 THE ACQUISITION COMMITMENT AND THE ACQUISITION LOANS.
(a) Subject to the terms and conditions hereof, during the
period up to but not including the Conversion Date, the Banks severally,
but not jointly, shall make loans to the Borrower in such amounts as the
Borrower may from time to time request (the "Acquisition Loans") but not
exceeding in aggregate principal amount at any one time outstanding
$10,000,000 (as such amount may be reduced from time to time, the
"Acquisition Commitment"). Each Acquisition Loan requested by the Borrower
shall be funded by the Banks in accordance with their Ratable Shares of the
requested Acquisition Loan. A Bank shall not be obligated hereunder to
make any additional Acquisition Loan if immediately after making such Loan,
the aggregate principal balance of all Acquisition Loans made by such Bank
would exceed such Bank's Ratable Share of the Acquisition Commitment. The
Acquisition Loans may be comprised of Base Rate Loans or LIBOR Loans, as
provided in Section 2.3.
(b) Prior to the Conversion Date, the Borrower may, at its
option, from time to time prepay all or any portion of the Acquisition
Loans, subject to the provisions of Section 2.6, and the Borrower may
reborrow from time to time hereunder amounts so paid up to the amount of
the Acquisition Commitment in effect at the time of reborrowing.
(c) At any time prior to the Conversion Date, by written
notice to the Agent no later than 11:00 A.M. Cleveland, Ohio time five
Banking Days prior to such termination or reduction, the Borrower may
permanently terminate, or from time to time permanently reduce, the
Acquisition Commitment. Such notice shall be in writing or by telephonic
communication confirmed by telecopy or other facsimile transmission on the
same day as such telephone notice. Any such partial reduction hereunder
shall be in an amount which is not less than $1,000,000 or an integral
multiple of $1,000,000 in excess thereof. The
Page 23
Agent shall notify the Banks of any such reduction or termination of the
Acquisition Commitment.
(d) On the Conversion Date each then outstanding
Acquisition Loan shall automatically be converted into, and continued and
extended as, a five year term loan. The aggregate principal of the
Acquisition Loans shall be repaid in twenty consecutive quarterly
installments commencing on the first Quarterly Date after the Conversion
Date. No amount so paid may be reborrowed. The installments shall be due
on each date set forth in the following table, with each installment being
in an amount equal to that percentage set forth in such table for such date
of the principal amount of the Acquisition Loans outstanding on the
Conversion Date, with the final installment of all then outstanding
principal, together with all accrued interest, due no later than the
Termination Date:
Calendar Year March 31 June 30 September 30 December 31
1997 2.5% 2.5% 2.5% 2.5%
1998 5.0% 5.0% 5.0% 5.0%
1999 5.0% 5.0% 5.0% 5.0%
2000 6.25% 6.25% 6.25% 6.25%
2001 6.25% 6.25% 6.25% all remaining
principal
2.3 MAKING AND CONTINUATION/CONVERSION OF THE LOANS.
(a) MAKING OF THE LOANS.
(i) Each Loan shall be made by the Banks in such
amount as the Borrower shall request, PROVIDED that each borrowing shall be
in an amount which is a minimum of (A), with respect to any LIBOR Loan,
$1,000,000, and integral multiples of $1,000,000 in excess thereof, and (B)
with respect to any Base Rate Loan, $500,000 and integral multiples of
$500,000 in excess thereof or such lesser amount as may be equal to the
then unused portion of the Reducing Commitment or the Acquisition
Commitment, as the case may be. The obligation of the Banks to make any
Loan is conditioned upon the fact that (x) no Possible Default or Event of
Default shall then exist or immediately after the Loan would exist; (y) all
of the Collateral Documents shall still be in full force and effect; and
(z) the representations and warranties contained herein and in the
Collateral Documents shall be true and correct in all material respects as
if made on and as
Page 24
of the date of such borrowing, except to the extent that
any thereof expressly relate to an earlier date.
(ii) Loans shall be effected at the principal banking
office of the Agent in Cleveland, Ohio, and shall be made at such times as
the Borrower may request by notice to the Agent no later than 11:00 A.M.
Cleveland, Ohio time (A) three Banking Days prior to the date of a
requested LIBOR Loan and (B) one Banking Day prior to the date of a
requested Base Rate Loan. Such notices shall be in writing, or by
telephonic communication confirmed by telecopy or other facsimile
transmission on the same day as the telephone request, and shall specify
the proposed date and the amount of the requested Loan, whether it is to
bear interest initially based upon the Base Rate or the LIBOR Rate, and the
Interest Period thereof, if applicable.
(iii) Upon receipt of each borrowing notice for a
Loan, the Agent shall promptly notify each Bank of the type, Interest
Period, if applicable, amount and date of the proposed borrowing. Not
later than 11:00 A.M. Cleveland time, on the date of a proposed borrowing,
each Bank shall provide the Agent at its address specified in Section 12.4
hereof with immediately available funds covering such Bank's Ratable Share
of the borrowing, and the Agent shall pay over such immediately available
funds to the Borrower.
(b) CONVERSION/CONTINUATION OF THE LOANS. At the
Borrower's election pursuant to notice given to the Agent not later than
11:00 A.M. Cleveland, Ohio time three Banking Days prior to such conversion
or continuation, any Base Rate Loan or any LIBOR Loan may be converted to
or continued as a LIBOR Loan as requested by the Borrower; PROVIDED,
HOWEVER, that each conversion shall be in an amount which is a minimum of
$1,000,000, and integral multiples of $1,000,000 in excess thereof; and
PROVIDED, FURTHER, that no Loan may be continued as or converted to a LIBOR
Loan at any time that an Event of Default or Possible Default exists. If
the Borrower has not delivered to the Agent such notice with respect to any
terminating Interest Period at least three Banking Days prior to the end of
such Interest Period, the affected LIBOR Loan shall convert to a Base Rate
Loan at the end of such Interest Period.
(c) NUMBER OF INTEREST RATE OPTIONS. In no event shall the
Borrower have more than three LIBOR Loans outstanding at any time.
2.4 THE NOTES. All Reducing Loans shall be evidenced by
separate promissory notes payable to the Banks substantially in the form
attached hereto as EXHIBIT A to be duly executed and delivered by the
Borrower at or prior to the Closing in the
Page 25
aggregate principal amount of the Reducing Commitment (the "Reducing Notes").
All Acquisition Loans shall be evidenced by separate promissory notes payable
to the Banks substantially in the form attached hereto as EXHIBIT B to be duly
executed and delivered by the Borrower at or prior to the Closing in the
aggregate principal amount of the Acquisition Commitment (the "Acquisition
Notes"). The Banks may, and are hereby authorized by the Borrower to, set
forth on the grids attached to the Notes, or in other comparable records
maintained by them, the amount of each Loan, all payments and prepayments of
principal and interest received, the current outstanding principal balance,
and other appropriate information. The aggregate unpaid amount of any Loan
set forth in any records maintained by a Bank with respect to a Note shall be
presumptive evidence of the principal amount owing and unpaid on such Note.
Failure of a Bank to record the principal amount of any Loan on the grid(s)
attached to a Note shall not limit or otherwise affect the obligation of
the Borrower hereunder or under such Note to repay the principal amount of
such Loan and all interest accruing thereon.
2.5 FEES.
(a) COMMITMENT FEES. The Borrower shall pay to the Agent
for the benefit of the Banks a post-closing commitment fee of 1/2% per
annum (based on a year having 360 days and actual days elapsed) on the
aggregate average daily undisbursed amount of each Commitment. Such
commitment fee shall (i) commence to accrue as of the Closing Date and
continue for each day to and including the Termination Date, with respect
to the Reducing Commitment, and the Conversion Date, with respect to the
Acquisition Commitment, (ii) be in addition to any other fee required by
the terms and conditions of this Agreement, (iii) be payable quarterly in
arrears on each Quarterly Date, and (iv) be shared by the Banks in
accordance with their Ratable Shares.
(b) OTHER FEES. The Borrower shall pay to the Agent such
other fees as are set forth in the letter agreement between the Borrower
and the Agent of even date herewith.
2.6 PREPAYMENT.
(a) VOLUNTARY PREPAYMENTS. By notice to the Agent (which
shall be in writing or by telephonic communication confirmed by telecopy or
other facsimile transmission on the same day as such telephone notice) no
later than 11:00 A.M. Cleveland, Ohio time on the Banking Day prior to such
prepayment (with respect to any Base Rate Loan) or on the third Banking Day
prior to such prepayment (with respect to any LIBOR Loan), the Borrower
may, at its option, prepay the Loans in whole at any time or in part from
time to time without penalty or premium (except that any such prepayment of
any LIBOR Loan shall be made together with
Page 26
the applicable Prepayment Premium); PROVIDED, HOWEVER, that each partial
prepayment shall be in the aggregate principal amount of not less than
$1,000,000 or an integral multiple of $1,000,000 in excess thereof. All
accrued interest on the amount prepaid shall be paid with the prepayment.
Each voluntary prepayment of the Acquisition Loans after the Conversion
Date shall be applied to the principal installments due pursuant to
Section 2.2(d) pro rata, and no amount so prepaid may be reborrowed.
(b) MANDATORY PREPAYMENTS.
(i) REDUCTION OF COMMITMENT. If at any time the
outstanding principal amount of the Reducing Loans exceeds the Reducing
Commitment, or if at any time prior to the Conversion Date the outstanding
principal amount of the Acquisition Loans exceeds the Acquisition
Commitment, the Borrower shall immediately prepay the Reducing Notes or the
Acquisition Notes, as the case may be, without penalty or premium (except
that any such prepayment of any LIBOR Loan shall be made together with the
applicable Prepayment Premium), in an amount necessary to cause the
outstanding principal amount of the Reducing Loans not to exceed the
Reducing Commitment or to cause the outstanding principal amount of the
Acquisition Loans not to exceed the Acquisition Commitment, as the case may
be. All accrued interest on the amount prepaid shall be paid with the
prepayment.
(ii) EXCESS CASH FLOW. Within ninety days after the
end of each fiscal year of the Borrower, commencing with the fiscal year
ending on December 31, 1996, the Borrower shall make a mandatory prepayment
of the Loans in an amount equal to the Applicable Percentage of Excess Cash
Flow, if any, for such fiscal year. Mandatory prepayments made pursuant to
this Section 2.6(b)(ii) shall be determined from the annual financial
statements for such fiscal year delivered by the Borrower pursuant to
Section 7.5(a) and shall be accompanied by a certificate signed by the
Borrower's chief financial officer setting forth the calculations from
which the amount of such prepayment was determined.
(iii) PROCEEDS OF ASSET SALES. The Borrower shall
make a mandatory prepayment of the Loans in an amount equal to the cash
proceeds of any Asset Sale, net of any reasonable costs directly incurred
in connection with such Asset Sale and any taxes payable in connection with
such Asset Sale. Together with such prepayment, the Borrower shall deliver
to the Agent a certificate executed by the Borrower's chief financial
officer setting forth the calculation of the net cash proceeds of such
Asset Sale. Such prepayment shall be made within two Banking Days after
receipt by the Borrower of such cash proceeds.
Page 27
(iv) INSURANCE PROCEEDS. Within 180 days after the
date of receipt of any cash payments under any insurance policy maintained
by the Borrower or any of its Subsidiaries which have not been reinvested
in assets of a kind then used or usable in the business of the Borrower or
such Subsidiary or used to maintain the business of the Borrower and its
Subsidiaries as going concerns as a consequence of any business
interruption, the Borrower shall make a mandatory prepayment of the Loans
in the amount of such unreinvested or unused proceeds; PROVIDED, HOWEVER,
that notwithstanding any of the foregoing to the contrary, upon and during
the continuance of any Event of Default or Possible Default, all such
insurance proceeds, regardless of reinvestment or other use, received by
the Borrower or any Subsidiary shall be applied as a prepayment of the
Loans.
(v) MANAGEMENT FEES. Within five days of receipt
thereof, the Borrower shall make a mandatory prepayment of the Reducing
Loans in the amount of any management fees or other payments (other than
fees paid by Fairmont Communications Corporation to the Borrower or any of
its Subsidiaries for actual services rendered in an aggregate amount not to
exceed $11,000 per month) which it or any of its Subsidiaries receives from
Fairmont Communications Corporation or Northstar Television Group, Inc.
(collectively, "Management Fees").
(c) APPLICATION OF PREPAYMENTS; REDUCTION OF COMMITMENTS.
(i) APPLICATION TO ACCRUED INTEREST. All prepayments
made pursuant to this Section 2.6 shall be applied first to any Prepayment
Premium then due, then to accrued interest and then to the principal
outstanding under the Loans. For purposes of the calculation of interest
and the determination of whether any Prepayment Premium is due in
connection with any such prepayment, such principal prepayments shall be
applied first to the Base Rate Loans and then to the LIBOR Loans with the
shortest remaining Interest Periods.
(ii) APPLICATION TO REDUCING LOANS AND ACQUISITION
LOANS. All mandatory prepayments of principal required to be made pursuant
to Section 2.6(b)(ii), (iii) or (iv) shall be applied first to the Reducing
Loans and then, after the Reducing Loans and the Reducing Commitment have
been reduced to zero, to the Acquisition Loans.
(iii) APPLICATION TO THE REDUCING LOANS AND THE
REDUCING COMMITMENT. Any mandatory prepayment of the Reducing Loans
pursuant to Sections 2.6(b)(ii), (iii) or (iv) shall cause the Reducing
Commitment to be immediately and automatically reduced by the amount of
such prepayment, and each
Page 28
such mandatory prepayment shall be applied to the subsequent Reducing
Commitment reductions set forth in Section 2.1(b) in the inverse
order of maturity; PROVIDED, HOWEVER, that any mandatory
prepayment of the Reducing Loans from the proceeds of a Permitted
Divestiture shall not cause a reduction in the Reducing Commitment; and
PROVIDED, FURTHER, that any mandatory prepayment of the proceeds of an
Asset Sale other than a Permitted Divestiture shall be applied to the
scheduled Reducing Commitment reductions pro rata. Any mandatory
prepayment of the Reducing Loans pursuant to Section 2.6(b)(v) shall not
cause a reduction in the Reducing Commitment.
(iv) APPLICATION TO THE ACQUISITION LOANS AND THE
ACQUISITION COMMITMENT. Any mandatory prepayment of the Acquisition Loans
prior to the Conversion Date (other than pursuant to Section 2.6(b)(i))
shall cause the Acquisition Commitment to be immediately and automatically
reduced by the amount of such prepayment; PROVIDED, HOWEVER, that any
mandatory prepayment of the Acquisition Loans from the proceeds of a
Permitted Divestiture shall not cause a reduction in the Acquisition
Commitment. Any mandatory prepayment of the Acquisition Loans pursuant to
Section 2.6(b)(v) shall not cause a reduction in the Acquisition
Commitment. Any mandatory prepayment of the Acquisition Loan after the
Conversion Date shall be applied to the subsequent principal installments
due under Section 2.2(d) in the inverse order of maturity; PROVIDED,
HOWEVER, that any mandatory prepayment of the proceeds of an Asset Sale
other than a Permitted Divestiture shall be applied to the subsequent
principal installments due under Section 2.2(d) pro rata.
(d) PREPAYMENT PREMIUM. The Borrower shall pay to the
Agent, for the benefit of the Banks, the applicable Prepayment Premium upon
any prepayment or conversion (whether voluntary or involuntary) of any
LIBOR Loan not made on the last day of the applicable Interest Period.
2.7 RESERVES OR DEPOSIT REQUIREMENTS, ETC. If at any time any
Regulatory Change (including without limitation, Regulation D of the Board
of Governors of the Federal Reserve System) shall impose any reserve and/or
special deposit requirement (other than reserves included in the LIBOR
Reserve Percentage, the effect of which is reflected in the interest rate
of any LIBOR Loan) against assets held by, or deposits in or for the amount
of any loans by, any Bank, and the result of the foregoing is to increase
the cost (whether by incurring a cost or adding to a cost) to such Bank of
taking or maintaining hereunder any LIBOR Loan or to reduce the amount of
principal, interest or fees received by such Bank with respect to any such
Loan, then such Bank shall notify the Agent and the Borrower of such
occurrence. Thereafter, upon demand by such Bank the Borrower
Page 29
shall pay to such Bank additional amounts sufficient to compensate and
indemnify such Bank for such increased cost or reduced amount. A statement
as to the increased cost or reduced amount as a result of any event mentioned
in this Section shall be submitted by such Bank to the Agent and the Borrower
and shall, in the absence of manifest error, be conclusive and binding as to
the amount thereof.
2.8 EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. If any Bank determines that dollar deposits of the
relevant amount for the relevant Interest Period are not available to it in
the applicable Eurodollar market or that, by reason of circumstances
affecting such market, adequate and reasonable means do not exist for
ascertaining the LIBOR Rate applicable to such Interest Period, or that the
LIBOR Rate does not adequately reflect the cost to such Bank of making such
Loan, as the case may be, such Bank shall promptly give notice of such
determination to the Agent and the Borrower, and any request for a new
LIBOR Loan or notice of conversion of an existing Loan to a LIBOR Loan
given thereafter or previously given by the Borrower and not yet converted
shall be deemed a notice to make a Base Rate Loan.
2.9 CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any Regulatory Change shall make it unlawful for any Bank to fund any
LIBOR Loan which it has committed to make hereunder with moneys obtained in
the applicable Eurodollar market, such Bank shall notify the Agent and the
Borrower, and the obligation of the Banks to fund such Loan shall, upon the
happening of such event, forthwith be suspended for the duration of such
illegality. If any such change makes it unlawful for any Bank to continue
in effect the funding in the applicable Eurodollar market of any LIBOR Loan
previously made by it hereunder, such Bank shall, upon the happening of
such event, notify the Agent and the Borrower thereof in writing stating
the reasons therefor, and the Borrower shall, on the earlier of (a) the
last day of the then current Interest Period or (b) if required by such
Regulatory Change on such date as shall be specified in such notice, either
convert all such Loans to Base Rate Loans or prepay all such Loans in full.
2.10 FUNDING. Any Bank may, but shall not be required to, make
LIBOR Loans hereunder with funds obtained outside the United States.
2.11 INDEMNITY. Without prejudice to any other provisions of
Sections 2.7 through Section 2.10, the Borrower hereby agrees to indemnify
each Bank against any loss or expense which it may sustain or incur as a
consequence of the Borrower's failure to borrow any LIBOR Loan requested
pursuant to this Agreement or any default by the Borrower in payment when due
of
Page 30
any amount due hereunder in respect of any LIBOR Loan, including,
but not limited to, any premium or penalty actually incurred by such Bank
in respect of funds borrowed by it for the purpose of making or maintaining
such Loan, as determined by such Bank. A statement as to any such loss or
expense shall be submitted by such Bank to the Borrower for payment under
the aforesaid indemnification, with a copy to the Agent, which statement
shall, in the absence of manifest error, be conclusive and binding as to
the amount thereof.
2.12 CAPITAL ADEQUACY. If any Bank shall determine that any
Regulatory Change regarding capital adequacy or compliance by such Bank (or
its lending office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any governmental
authority, central bank or comparable agency has the effect of reducing the
rate of return on such Bank's capital (or on the capital of such Bank's
holding company) as a consequence of its obligations hereunder to a level
below that which such Bank (or its holding company) could have achieved but
for such Regulatory Change or compliance (taking into consideration such
Bank's policies or the policies of its holding company with respect to
capital adequacy) by an amount which such Bank deems to be material, then
from time to time, within ten days after demand by such Bank, the Borrower
shall pay to such Bank such additional amount or amounts as will compensate
such Bank (or its holding company) for such reduction. Such Bank will
designate a different lending office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in the
sole judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of such Bank claiming compensation under this Section and
setting forth the additional amount to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount,
such Bank may use any reasonable averaging and attribution methods.
Failure on the part of any Bank to demand compensation for any reduction in
return on capital with respect to any period shall not constitute a waiver
of such Bank's rights to demand compensation for any reduction in return on
capital in such period or in any other period. The protection of this
Section shall be available to each Bank regardless of any possible
contention of the invalidity or inapplicability of the law, regulation or
other condition which shall have been imposed.
2.13 TAXES.
(a) All sums payable by the Borrower hereunder or under the
Notes, whether of principal, interest, fees, expenses or otherwise, shall
be paid in full, free of any deductions or withholdings for any and all
present and future taxes, levies, imposts, stamps, duties, fees,
assessments, deductions, withholdings, and other governmental charges and
all liabilities
Page 31
with respect thereto, EXCLUDING, in the case of each Bank and the Agent,
(i) taxes imposed on its income, and franchise taxes imposed on it,
by the United States or the jurisdiction under the laws of which
such Bank or the Agent (as the case may be) is organized or any political
subdivision or taxing authority thereof or therein, and (ii) taxes imposed
on its income, and franchise taxes imposed on it, by the jurisdiction of
such Bank's or the Agent's principal office or lending office or any
political subdivision or taxing authority thereof or therein (all such non-
excluded taxes, levies, imposts, stamps, duties, fees, assessments,
deductions, withholdings and charges being hereafter referred to as
"TAXES"). If the Borrower is prohibited by law from making payments
hereunder or under the Notes free of such deductions or withholdings, then
the Borrower shall pay such additional amount as may be necessary in order
that the actual amount received by the Banks after such deduction or
withholding shall equal the full amount stated to be payable hereunder or
under the Notes. The Borrower shall pay directly to all appropriate taxing
authorities any and all present and future Taxes, and all liabilities with
respect thereto imposed by law or by any taxing authority on or with regard
to any aspect of the transactions contemplated by this Agreement or the
execution and delivery of this Agreement or the Notes, except for any Taxes
or other liabilities that the Borrower is contesting in good faith by
appropriate proceedings, PROVIDED that a Bank shall designate a different
lending office if, in the judgment of such Bank, such designation would
avoid the need for, or reduce the amount of, any Taxes required to be
deducted from or in respect of any sum payable hereunder to such Bank or
the Agent and would not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank.
(b) The Borrower hereby indemnifies the Agent and the Banks
and holds them harmless from and against any and all liabilities, fees or
additional expense with respect to or resulting from any delay in paying,
or omission to pay, Taxes; PROVIDED, HOWEVER, that, in the event any Bank
or the Agent (as the case may be) successfully contests the assessment of
such Taxes or any liability arising therefrom or with respect thereto, such
Bank or the Agent shall refund, to the extent of any refund thereof made to
such Bank or the Agent, any amount paid by the Borrower under this Section
2.13 in respect of such Taxes or liabilities arising therefrom or with
respect thereto. Each Bank shall notify the Borrower and the Agent of any
payment of Taxes required or requested of it and shall give due
consideration to any advice or recommendation given in response thereto by
the Borrower, and upon notice from such Bank that Taxes or any liability
relating thereto (including penalties and interest) have been paid, the
Borrower shall pay or reimburse such Bank therefor within ten days of such
notice.
Page 32
(c) Within thirty days after the payment by the Borrower of
any Taxes, the Borrower shall furnish the Agent with the original or a
certified copy of the receipt evidencing payment thereof, together with any
other information the Agent may reasonably require to establish to its
satisfaction that full and timely payment of such Taxes has been made.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States and the Agent, if organized under the laws of a
jurisdiction outside the United States, shall, on or prior to the Closing
Date or, with respect to an assignee that becomes a Bank pursuant to
Section 12.7(b), the effective date of the assignment to it of an interest
in the Loans and the Commitment, and from time to time thereafter if
requested in writing by the Borrower or the Agent (but only to the extent
such Bank or the Agent is and remains lawfully able to do so), provide the
Borrower and (in the case of any such Bank other than the Agent) the Agent
with two duly completed copies of Internal Revenue Service Form 1001 or
4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Bank or the Agent is entitled to
benefits under an income tax treaty to which the United States is a party
that reduces the rate of withholding tax on payments hereunder or under the
Notes or certifying that the income receivable pursuant to this Agreement
or the Notes is effectively connected with the conduct of a trade or
business in the United States.
(e) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section shall survive the payment in full of
principal and interest hereunder and under the Note.
SECTION 3 INTEREST; PAYMENTS.
3.1 INTEREST.
(a) Subject to Section 3.1(c), prior to maturity, LIBOR
Loans shall bear interest at the LIBOR Rate plus the Applicable Margin, and
Base Rate Loans shall bear interest at the Base Rate plus the Applicable
Margin.
(b) The Applicable Margin shall be determined by the Agent
quarterly based on the financial statements and the Compliance Certificate
delivered to the Banks pursuant to Sections 7.5(b) and (d) below. Any
change in the interest rate on the Loans due to a change in the Applicable
Margin shall be effective on the fifth Banking Day after delivery of such
financial statements and Compliance Certificate; PROVIDED, HOWEVER, that if
any such quarterly financial statements and
Page 33
Compliance Certificate indicate an increase in the Applicable Margin
and such financial statements and certificate are not provided
within the time period required in Section 7.5(b), the change
in the interest rate due to such change in the Applicable Margin
shall be effective retroactively as of the fifth Banking Day after
the date on which such financial statements and certificate were
due; PROVIDED, FURTHER, that if such quarterly financial statements and
certificate reflect a decrease in the Applicable Margin, such decrease
shall be effective as of the fifth Banking Day after the date on which such
financial statements and certificate are actually delivered. Until
delivery of financial statements for the first full fiscal quarter of the
Borrower after the Closing, for purposes of calculating the Applicable
Margin, the ratio of Total Debt to Operating Cash Flow shall be deemed to
be 5.5 to 1.0. The Borrower shall deliver to the Banks with each set of
quarterly financial statements which indicate a change in the Applicable
Margin a notice with respect to such change which notice shall set forth
the calculation of, and the supporting evidence for, such change.
(c) Upon the occurrence of any Event of Default, the entire
outstanding principal amount of each Loan and (to the extent permitted by
law) unpaid interest thereon and all other amounts due hereunder shall bear
interest from the date of occurrence of such Event of Default until paid in
full at the Default Interest Rate which shall be payable upon demand.
(d) Interest shall be computed on a Three Hundred Sixty day
year basis calculated for the actual number of days elapsed. Interest
accrued on each Base Rate Loan shall be paid quarterly in arrears on each
Quarterly Date after the date hereof until such Loan is paid in full, and
interest accrued on each LIBOR Loan shall be paid on the last day of the
Interest Period thereof and, in addition, if such Interest Period is more
than three months, on the day that would have been the last day of such
Interest Period if such Interest Period had been three months.
(e) The rate of interest payable on any Note from time to
time shall in no event exceed the maximum rate, if any, permissible under
applicable law. If the rate of interest payable on any Note is ever
reduced as a result of the preceding sentence and any time thereafter the
maximum rate permitted by applicable law shall exceed the rate of interest
provided for on such Note, then the rate provided for on such Note shall be
increased to the maximum rate permitted by applicable law for such period
as is required so that the total amount of interest received by the holder
of such Note is that which would have been received by such holder but for
the operation of the preceding sentence.
Page
3.2 MANNER OF PAYMENTS.
(a) Prior to each Quarterly Date and the end of each
Interest Period, the Agent shall render a statement to the Borrower of all
amounts due to the Banks for principal, interest and fees hereunder. All
amounts listed on each such statement shall be due and payable on the
Quarterly Date or, as the case may be, the last day of such Interest
Period, in respect of which such statement was sent. As to all other
Obligations which become due and payable other than on a fixed date by
their terms, the Agent shall advise the Borrower by a written statement
that they are due and payable, and the Borrower shall pay the same within
five days of receipt of such statement. Any failure by the Agent to render
any such statement or give any such advice shall in no way relieve the
Borrower of any liability for or obligation to pay any amount due and
payable hereunder.
(b) Whenever any payment to be made hereunder, including
without limitation any payment to be made on a Note, shall be stated to be
due on a day which is not a Banking Day, such payment may be made on the
next succeeding Banking Day, and such extension of time shall in each case
be included in the computation of the interest payable on such Note.
(c) Unless otherwise provided in this Agreement, all
payments or prepayments made or due hereunder or under the Notes shall be
made in immediately available funds by federal funds wire transfer, and
without setoff, deduction or counterclaim, to the Agent prior to 11:00
A.M., Cleveland time, on the date when due, at its offices at 127 Public
Square, Cleveland, Ohio 44114, or at such other place as may be designated
by the Agent. Funds received after 1:00 P.M., Cleveland time, shall be
deemed to have been received on the next Banking Day. To the extent any
such payment is made for the ratable benefit of the Banks, the Agent shall
promptly distribute such payment to the Banks in accordance with their
respective Ratable Shares.
SECTION 4 CLOSING.
The closing of the transactions contemplated by this Agreement
shall take place at the offices of Dow, Lohnes & Albertson, 1255 23rd
Street, N.W., Washington, D.C. 20037 on or about August 17, 1995, or such
other date and place as to which the parties may agree (the "Closing" and
the "Closing Date"). Subject to the terms and conditions hereof, upon the
fulfillment or waiver in writing of all the conditions precedent set out in
Section 6 below, and the delivery to the Agent of the Notes, the Banks
shall make such Loans as may be requested by the Borrower.
Page 35
SECTION 5 REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
To induce the Banks to enter into this Agreement and to make the
Loans, the Borrower represents and warrants as follows:
5.1 ORGANIZATION AND POWERS.
(a) The Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware. The
Borrower is duly qualified or registered to conduct business and in good
standing under the laws of each other jurisdiction in which the character
of its business or the ownership of its assets makes such qualification or
registration necessary, except where failure to so qualify or register
could not reasonably be expected to have a Material Adverse Effect. The
Borrower has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and proposed to be
conducted, to enter into this Agreement, the Collateral Documents to which
it is a party and all other documents to be executed by it in connection
with the transactions contemplated hereby and thereby and to carry out the
terms hereof and thereof.
(b) Each Subsidiary of the Borrower is a corporation, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is duly qualified or registered to
conduct business and in good standing under the laws of each other
jurisdiction in which the character of its business, the location of its
employees or the ownership of its assets makes such qualification or
registration necessary, except where failure to so qualify or register
could not reasonably be expected to have a Material Adverse Effect. Each
Subsidiary of the Borrower has all requisite power and authority to own and
operate its properties, to carry on its business as now conducted and
proposed to be conducted, to enter into the Collateral Documents to which
it is a party and all other documents to be executed by it in connection
with the transactions contemplated hereby and thereby and to carry out the
terms thereof.
5.2 AUTHORIZATION. All necessary corporate, shareholder or
other actions on the part of the Borrower and its Subsidiaries to authorize
the execution and delivery of this Agreement and the Collateral Documents
and the performance of the respective obligations of the Borrower and its
Subsidiaries herein and therein have been taken. This Agreement and each
Collateral Document are valid and legally binding upon each of the Borrower
and its Subsidiaries, to the extent it is a party thereto, and enforceable
in accordance with their respective terms, except to the extent that the
enforceability hereof and
Page 36
thereof may be limited by bankruptcy, insolvency or like laws affecting
creditors rights generally and by the application of general equitable
principles.
5.3 FINANCIAL STATEMENTS. EXHIBIT C attached hereto contains
(a) the audited consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal years ending December 31, 1993, and December
31, 1994, and (b) the unaudited consolidated financial statements of the
Borrower and its Subsidiaries as of June 30, 1995, and for the six month
period then ended (the "Financial Statements"). The Financial Statements
are true and complete in all material respects (including, without
limitation, a disclosure of all material contingent liabilities) and
present fairly the financial condition and results of operations of the
Borrower and its Subsidiaries, as of the dates and for the periods
indicated and have been prepared in accordance with GAAP, subject in the
case of statements for interim periods to normal year-end adjustments and
the absence of footnotes.
5.4 PROJECTIONS. EXHIBIT D attached hereto contains the
Borrower's projections for the calendar years 1995 through 1999. Such
projections were prepared by the Borrower in good faith on the basis of
assumptions the Borrower believed were reasonable in light of the
conditions existing at the time of preparation thereof and remain
reasonable as of the date hereof.
5.5 CAPITALIZATION OF THE BORROWER AND ITS SUBSIDIARIES. The
capitalization of the Borrower and its Subsidiaries as of the Closing Date
is as set forth on EXHIBIT E attached hereto. The Borrower has no
Subsidiaries as of the Closing Date except as listed on EXHIBIT E. All of
the issued and outstanding capital stock of each of the Borrower and its
Subsidiaries has been duly and validly issued and is fully paid and
nonassessable. All of the authorized, issued and outstanding capital stock
of each of the Borrower and its Subsidiaries is free and clear of any Lien,
charge, encumbrance, or right or option to purchase, except for (a) the
Liens granted pursuant to the Pledge Agreements, (b) the pledge of the
stock of Atlantic City to National Westminster Bank and (c) the rights of
the trustee under the Trust Agreement. None of the capital stock of the
Borrower or of any of its Subsidiaries has been issued in violation of the
Securities Act of 1933, as amended, or the securities or "Blue Sky" or any
other applicable laws, rules or regulations of any applicable jurisdiction.
Except as set forth on EXHIBIT E, as of the Closing Date, neither the
Borrower nor any of its Subsidiaries has any commitment or obligation,
either firm or conditional, to issue, deliver, purchase or sell, under any
offer, option agreement, bonus agreement, purchase plan, incentive plan,
compensation plan, warrant, conversion rights, contingent share agreement,
shareholders agreement, partnership
Page 37
agreement or otherwise, any shares of its capital stock, or other equity
securities or securities convertible into shares of capital stock or other
equity securities.
5.6 TITLE TO PROPERTIES; PATENTS, TRADEMARKS, ETC. The Borrower
and each of its Subsidiaries have good and marketable title to all of their
assets, whether real or personal, tangible or intangible, free and clear of
any Liens or adverse claims, except Permitted Liens. The Borrower and each
of its Subsidiaries own or possess the valid right to use all the patents,
patent applications, patent and know-how licenses, inventions, technology,
permits, trademark registrations and applications, trademarks, service
marks, trade names, copyrights, product designs, applications, formulae,
processes, circulation, and other subscriber lists, industrial property
rights and licenses and rights in respect of the foregoing used or
necessary for the conduct of its business (collectively, "proprietary
rights"). The Borrower is not aware of any existing or threatened
infringement or misappropriation of (a) any such proprietary rights of
others by the Borrower or any of its Subsidiaries or (b) any proprietary
rights of the Borrower or any of its Subsidiaries by others.
5.7 LITIGATION; PROCEEDINGS. Except as disclosed on EXHIBIT F
attached hereto, there is no action, suit, complaint, proceeding, inquiry
or investigation at law or in equity, or by or before any court or
governmental instrumentality or agency, nor any order (including, without
limitation, any order to show cause or order of forfeiture), decree or
judgment in effect, pending or, to the best of the Borrower's knowledge,
threatened against or affecting the Borrower, any of its Subsidiaries, any
Station or any of the properties or rights relating to any Station which
could reasonably be expected to have a Material Adverse Effect. No Person
has filed or, to the best of the Borrower's knowledge, threatened to file,
any material competing application, petition to deny or other opposition
against any application, including any renewal application, filed or to be
filed by the Borrower or any of its Subsidiaries.
5.8 TAXES. All Federal, state and local tax returns, reports
and statements (including, without limitation, those relating to income
taxes, withholding, social security and unemployment taxes, sales and use
taxes, and franchise taxes) required to be filed by the Borrower or any of
its Subsidiaries have been properly filed with the appropriate governmental
agencies in all jurisdictions in which such returns, reports and statements
are required to be filed, which returns, reports and statements are
complete and accurate, and all taxes and other impositions due and payable
have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for non-payment thereof
except where
Page 38
contested in good faith and by appropriate proceedings. As of the
Closing Date, except for extensions through 1995 relating to the
Borrower's New York City tax returns for the years 1989, 1990 and 1991,
neither the Borrower nor any of its Subsidiaries has filed with the
Internal Revenue Service or any other governmental authority any agreement
or other document extending or having the effect of extending the period
for assessment or collection of any Federal, state, local or foreign taxes
or other impositions. All tax deficiencies asserted or assessments made as
a result of any examinations conducted by the Internal Revenue Service or
any other governmental authority relating to the Borrower or any of its
Subsidiaries have been fully paid or are being contested in accordance with
the provisions of Section 7.4. Proper and accurate amounts have been
withheld by the Borrower and its Subsidiaries from its employees for all
periods to fully comply with the tax, social security and unemployment
withholding provisions of applicable Federal, state, local and foreign law.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are
adequate.
5.9 ABSENCE OF CONFLICTS. The execution, delivery and
performance of this Agreement and the Collateral Documents and all actions
and transactions contemplated hereby and thereby will not (a) violate, be
in conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under (i) any provision of the Certificate
or Articles of Incorporation or By-Laws or any shareholders agreement or
other organizational document of the Borrower or any of its Subsidiaries,
(ii) any arbitration award or any order of any court or of any other
governmental agency or authority binding on the Borrower or any of its
Subsidiaries, (iii) any License of the Borrower or any of its Subsidiaries,
(iv) any applicable law, rule, order or regulation (including without
limitation, (A) the Communications Act of 1934, as amended, (B) any law,
rule, regulation or policy of the FCC or any other Licensing Authority or
(C) regulations G, T, U or X of the Board of Governors of the Federal
Reserve System) or (v) any Operating Agreement, Muzak Franchise, or other
material agreement, instrument or document relating to a Station, the Muzak
Business or the Healthcare Communications Business or to which the Borrower
or any of its Subsidiaries is a party, or by which the Borrower or any of
its Subsidiaries or any of their properties is bound, or (b) result in the
creation or imposition of any Lien of any nature whatsoever, other than
those Liens arising hereunder or under the Collateral Documents, upon any
of the properties of the Borrower or any of its Subsidiaries.
5.10 INDEBTEDNESS. As of the Closing Date, neither the Borrower
nor any of its Subsidiaries has any Indebtedness of any nature, whether due
or to become due, absolute, contingent or
Page 39
otherwise, including Indebtedness for taxes and any interest or
penalties relating thereto, except (a) the liability to pay
legal and accounting fees and reasonable closing expenses
in connection with this Agreement, (b) the Obligations, (c) Indebtedness
incurred in the ordinary course of business since June 30, 1995, (d) as
disclosed in the Financial Statements, and (e) as disclosed on EXHIBIT G
attached hereto.
5.11 COMPLIANCE. The Borrower, each of its Subsidiaries and the
ownership, construction and operation of each Station is in compliance with
all Licenses and all statutes, ordinances, laws, rules, regulations and
orders of the United States of America, the FCC (including, without
limitation, applicable federal laws and the rules, regulation, policies and
orders of the FCC relating to foreign ownership restrictions or to
limitations on the nature and number of media outlets that may be held
under common ownership or control), the Federal Aviation Administration and
any other federal, state, county, municipal or other governmental agency or
authority applicable to the Borrower or any of its Subsidiaries, their
properties, the ownership, construction or operation of any Station or the
conduct of their business except to the extent that failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
Neither the Borrower nor any of its Subsidiaries nor the ownership,
construction or operation of any Station is in violation of or has breached
the provisions of any indenture, License, Operating Agreement, Muzak
Franchise, note, lease, or other instrument or document to which it is a
party or by which it is bound, nor does there exist any default, or any
event or condition which, upon notice or lapse of time, or both, would
become a default, under any such indenture, License, Operating Agreement,
Muzak Franchise, note, lease, or other instrument or document if such
violation, breach or default could reasonably be expected to have a
Material Adverse Effect. The Borrower and each of its Subsidiaries have
the legal right and authority to conduct their respective businesses as now
conducted or proposed to be conducted.
5.12 STATEMENTS NOT MISLEADING. No statement, representation or
warranty made by the Borrower, any of its Subsidiaries or any other party
(other the Agent or the Banks) in or pursuant to this Agreement or the
Exhibits attached hereto or any of the Collateral Documents contains any
untrue statement of a material fact, nor omits to state a material fact
necessary to make such statement not misleading in light of the
circumstances under which such statement was made, or otherwise violates
any federal or state securities laws, rules or regulations. There is no
fact known to the Borrower (other than matters of a general economic nature
or relating to the broadcasting industry generally) that has had or could
reasonably be expected to have a Material Adverse Effect.
Page 40
5.13 CONSENTS OR APPROVALS. No consent, approval or
authorization of, or filing, registration or qualification with, any
governmental authority or any other Person (including, without limitation,
the FCC and any other Licensing Authority) is required to be obtained by
the Borrower or any of its Subsidiaries in connection with the execution,
delivery or performance of this Agreement or any of the Collateral
Documents, including without limitation, in connection with the granting of
Liens in the capital stock of the Borrower's Subsidiaries or in the assets
of the Borrower and its Subsidiaries, which has not already been obtained
or completed, except for (a) the filing with the FCC of this Agreement and
certain of the Collateral Documents pursuant to FCC rules, which shall be
accomplished within the required time period after the Closing, (b) the
filing of financing statements, the Mortgages and other actions expressly
required to be taken pursuant to the Collateral Documents, (c) the consents
listed on EXHIBIT H which have not been obtained and (d) the consent of the
FCC to the extent required in connection with the exercise by the Agent or
the Banks of their rights and remedies hereunder or under the Collateral
Documents.
5.14 MATERIAL CONTRACTS AND COMMITMENTS. EXHIBIT I attached
hereto contains a true and complete description of all material contracts
and commitments of the Borrower or any of its Subsidiaries or which relate
to a Station, the Muzak Business or the Healthcare Communications Business
as of the Closing Date, whether oral or written, including, without
limitation, (a) any security agreement, pledge agreement, mortgage or
guaranty; (b) any material management, construction supervision, service or
employment agreements, conditional sale contract or lease of personal
property; (c) any collective bargaining agreement; (d) any material
contract or commitment for the future purchase or sale of goods; (e) any
contract or commitment which involves a material Capital Expenditure; and
(h) all Licenses and Operating Agreements and Muzak Franchises. To the
best of the Borrower's knowledge, except as disclosed on EXHIBIT I, as of
the Closing Date, all of the items listed on EXHIBIT I are in full force
and effect without material default. EXHIBIT I further identifies each
such contract which requires consent to the granting of a Lien in favor of
the Agent for the benefit of the Banks on the rights of the Borrower or its
Subsidiaries under such contract. The Borrower has made available to the
Agent true and complete copies of each of the above.
5.15 EMPLOYEE BENEFIT PLANS. EXHIBIT J contains a true and
complete list of all Plans maintained by the Borrower or any member of the
Controlled Group. Neither the Borrower nor any member of the Controlled
Group has any liability, or reasonably anticipates any liability, of any
kind in excess, in the
Page 41
aggregate, of $75,000, to or in respect of any Plan or Benefit Arrangement.
With respect to the Plans and Benefit Arrangements maintained by the
Borrower or any member of the Controlled Group: (a) each
Plan that is intended to be qualified under Code Section 401(a) is so
qualified and has been so qualified since its adoption, and each trust
forming a part thereof is exempt from tax under Code Section 501(a); (b)
each Plan complies in all material respects with all applicable
requirements of law, has been administered in accordance with its terms and
all required contributions have been made; (c) neither the Borrower nor any
member of the Controlled Group knows or has reason to know that the
Borrower or any member of the Controlled Group has engaged in a transaction
which would subject it to any material tax, penalty or liability under
ERISA or the Code for any prohibited transaction; (d) no Plan is subject to
the minimum funding requirements under ERISA Section 302 or Code Section
412, is a multiemployer plan (as defined in ERISA Section 4001(a)(3)), is a
defined benefit plan (as defined under ERISA Section 3(35) or Code Section
414(j)), or is a multiple employer plan (as defined in ERISA Section 4063).
No Plan or Benefit Arrangement maintained by the Borrower or any member of
the Controlled Group is a multiple employer welfare arrangement (as defined
in ERISA Section 3(40)).
5.16 LICENSES AND OPERATING AGREEMENTS. The Licenses and
Operating Agreements shown on EXHIBIT I constitute all of the Licenses and
Operating Agreements which, as of the Closing Date, are necessary for the
lawful ownership, construction or operation of the Stations, the Muzak
Business and the Healthcare Communications Business and of the other
businesses of the Borrower and its Subsidiaries in the manner and to the
full extent they are currently owned, constructed and operated. EXHIBIT I
sets forth a correct and complete list, as of the Closing Date, of the
expiration date of each License and of each pending application for a
License. Except as specified on EXHIBIT I, all of the Licenses relating to
the Stations and all of the other Licenses of the Borrower and its
Subsidiaries have been duly and validly issued to and are legally held by
the Borrower or one of its Subsidiaries and are in full force and effect
without condition except those of general application. All such Licenses
have been issued in compliance with all applicable laws and regulations,
are legally binding and enforceable in accordance with their terms and are
in good standing. The Borrower knows of no facts or conditions which would
constitute grounds for any Licensing Authority to deny any pending
application for a License, to suspend, revoke, materially adversely modify,
designate for hearing, annul, fail to renew on or before its renewal date
or renew for less than a full license period any License or to impose a
material financial penalty on the Borrower or any of its Subsidiaries. On
or before June 17, 1993, RKZ Television, Inc. (the "TV Subsidiary") made a
valid
Page 42
election of must carry with respect to each cable system located
within the Area of Dominant Influence of television station WJSU. No cable
system has advised the TV Subsidiary of any signal quality or copyright
indemnity or other prerequisite to cable carriage of the TV Subsidiary's
signal, and no such cable system has declined or threatened to decline such
carriage or failed to respond to a request for carriage or sought any form
of relief from carriage from the FCC.
5.17 MATERIAL RESTRICTIONS. Except as disclosed in this
Agreement or the Exhibits attached hereto, neither the Borrower nor any of
its Subsidiaries is a party to any agreement or other instrument or subject
to any other restriction which has had or could reasonably be expected to
have a Material Adverse Effect.
5.18 INVESTMENT COMPANY ACT. The Borrower (a) is not an
investment company as that term is defined in the Investment Company Act of
1940, as amended, (b) does not directly or indirectly control, and is not
directly or indirectly controlled by, a company which is an investment
company as that term is defined in such act and (c) is not otherwise
subject to regulation under such act.
5.19 ABSENCE OF MATERIAL ADVERSE CHANGES. No Material Adverse
Effect has occurred since December 31, 1994.
5.20 DEFAULTS. No Possible Default or Event of Default now
exists or will exist upon the making of any Loan.
5.21 REAL ESTATE. EXHIBIT K attached hereto lists all real
estate owned as of the Closing Date by the Borrower or any of its
Subsidiaries and all leases pursuant to which the Borrower or any of its
Subsidiaries has acquired, as of the Closing Date, a leasehold interest in
real estate. EXHIBIT K lists the use of such owned and leased property in
the Borrower's or its Subsidiary's operations and the Borrower's good faith
estimate of the fair market value of each such owned parcel.
5.22 SECURITIES LAWS. No proceeds of any Loan will be used by
the Borrower or any of its Subsidiaries to acquire any security in any
transaction which is subject to Section 13 or 14 of the Securities Exchange
Act of 1934, as amended. Neither the registration of any security under
the Securities Act of 1933, as amended, or the securities laws of any
state, nor the qualification of an indenture in respect thereof under the
Trust Indenture Act of 1939, as amended, is required in connection with the
consummation of this Agreement or the execution and delivery of the Notes.
Page 43
5.23 INSURANCE. All policies of insurance of any kind or nature
owned by or issued to the Borrower or any of its Subsidiaries are in
compliance with the requirements of Section 7.3 and are in full force and
effect. In the past three years neither the Borrower nor any of its
Subsidiaries has been refused insurance for which it applied or had any
policy of insurance terminated (except at its own request).
5.24 LABOR MATTERS. There are no material strikes, unfair labor
practice charges or other material labor disputes or grievances pending or,
to the best of the Borrower's knowledge, threatened against the Borrower,
any of its Subsidiaries, any Station, the Muzak Business or the Healthcare
Communications Business. The Borrower has not received any written
complaints or knowledge of any threatened complaints, nor to the best of
the Borrower's knowledge, are any such complaints on file with any Federal,
state or local governmental agency, alleging employment discrimination by
the Borrower or any of its Subsidiaries or in connection with any Station,
the Muzak Business or the Healthcare Communications Business. All payments
due under any collective bargaining agreement to which the Borrower or any
of its Subsidiaries is a party have been paid or accrued as a liability on
the books of the Borrower or such Subsidiary.
5.25 ENVIRONMENTAL COMPLIANCE.
Except as set forth in EXHIBIT L attached hereto:
(a) The Borrower and each of its Subsidiaries have obtained
all material permits, licenses and other authorizations which are required
under all Environmental Laws. The Borrower and each of its Subsidiaries is
in material compliance with all terms and conditions of all such permits,
licenses and authorizations and are also in material compliance with all
other applicable limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained
in any applicable Environmental Law or in any regulation, code, plan,
order, decree, judgment, injunction, notice or demand letter issued,
entered, promulgated or approved thereunder, including, without limitation,
all Environmental Laws in all jurisdictions in which the Borrower or such
Subsidiary owns or operates a Station, a facility or site, arranges or has
arranged for disposal or treatment of Hazardous Materials, solid waste or
other wastes, accepts or has accepted for transport any Hazardous
Materials, solid waste or other wastes or holds or has held any interest in
real property or otherwise.
(b) No material Environmental Claim has been issued, no
material complaint has been filed, no material penalty has been assessed
and no material litigation, proceeding, investigation or review is pending
or, to the best of the
Page 44
Borrower's knowledge, threatened by any Person with respect to any alleged
failure by the Borrower, any of its Subsidiaries or any property owned by
the Borrower or any Subsidiary to comply with any Environmental Law or to
have any permit, license or authorization required in connection with
the conduct of the business of the Borrower or any of its Subsidiaries or
with respect to any generation, treatment, storage, recycling,
transportation, use, disposal or Release of any Hazardous Materials
generated by the Borrower or any of its Subsidiaries or with respect
to any real property in which the Borrower or any of its Subsidiaries
holds or has held an interest or any past or present operation of the
Borrower or any of its Subsidiaries.
(c) There are no Environmental Laws requiring any material
work, repairs, construction, Capital Expenditures or other remedial work of
any nature whatsoever, with respect to any real property in which the
Borrower or any of its Subsidiaries holds an interest.
(d) Neither the Borrower nor any of its Subsidiaries has
handled any Hazardous Material, on any property now or previously owned or
leased by the Borrower or any of its Subsidiaries in a manner that has, or
could reasonably be expected to have, a Material Adverse Effect.
(e) To the best of the Borrower's knowledge:
(i) no PCBs or asbestos is present at any property now
or previously owned or any premises now or previously leased by the
Borrower or any of its Subsidiaries except to the extent permitted under
Environmental Laws;
(ii) no underground storage tanks for Hazardous
Materials, active or abandoned, are now or were previously operated at any
property now or previously owned by the Borrower or any of its
Subsidiaries, and, with respect to premises now or previously leased by the
Borrower or any of its Subsidiaries, no underground storage tanks for
Hazardous Materials, active or abandoned, are now or were previously
operated by the Borrower or any of its Subsidiaries; and
(iii) no Hazardous Materials have been Released at, on
or under any property now or previously owned or any premises now or
previously leased by the Borrower or any of its Subsidiaries to an extent
that it has, or could reasonably be expected to have, a Material Adverse
Effect.
(f) Neither the Borrower nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous Material to
any location that is listed on the National Priorities List ("NPL") under
the Comprehensive
Page 45
Environmental Response, Compensation and Liability Act of
1980, as amended ("CERCLA"), listed for possible inclusion on the NPL by
the Environmental Protection Agency in the Comprehensive Environmental
Response and Liability Information System, as provided for by 40 C.F.R.
Section 300.5 ("CERCLIS"), or on any similar state or local list or that
is the subject of Federal, state or local enforcement actions or other
investigations that may lead to Environmental Claims against the Borrower
or any of its Subsidiaries.
(g) No Hazardous Material generated by the Borrower or any
of its Subsidiaries has been recycled, treated, stored, disposed of or
Released by the Borrower or any of its Subsidiaries at any location in a
manner which could form the basis for a material Environmental Claim
against the Borrower or any of its Subsidiaries or any of the properties of
the Borrower or any of its Subsidiaries.
(h) No oral or written notification of a Release of a
Hazardous Material has been filed by or on behalf of the Borrower or any of
its Subsidiaries and no property now or previously owned or premises leased
by the Borrower or any of its Subsidiaries is listed or proposed for
listing on the National Priorities list promulgated pursuant to CERCLA, on
CERCLIS or on any similar state list of sites requiring investigation or
clean-up where such notification or listing could form the basis for a
material Environmental Claim against the Borrower or any of its
Subsidiaries or any of the properties of the Borrower or any of its
Subsidiaries.
(i) There are no Liens arising under or pursuant to any
Environmental Laws on any of the property owned or premises leased by the
Borrower or any of its Subsidiaries, and no government actions have been
taken or are in process which could subject any of such property to such
Liens, and, to the best of the Borrower's knowledge, neither the Borrower
nor any of its Subsidiaries would be required to place any notice or
restriction relating to the presence of Hazardous Materials at any property
owned by it in any deed to such property.
(j) Neither the Borrower nor any of its Subsidiaries has
retained or assumed any liabilities (contingent or otherwise) in respect of
any Environmental Claims under the terms of any contract or agreement or by
operation of law as a result of the sale of assets or stock.
(k) There have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or which are
in the possession of the Borrower or any of its Subsidiaries in relation to
any property or facility
Page 46
now or previously owned or leased by the Borrower or such Subsidiary which
have not been made available to the Banks.
5.26 SOLVENCY. The Borrower has received, or has the right
hereunder to receive, consideration which is the reasonable equivalent
value of the obligations and liabilities that the Borrower has incurred to
the Banks. The Borrower is not insolvent as defined in Section 101 of
Title 11 of the United States Code or any applicable state insolvency
statute, nor, after giving effect to the consummation of the transactions
contemplated herein, will the Borrower be rendered insolvent by the
execution and delivery of this Agreement, the Notes or the Collateral
Documents to the Banks. The Borrower is not engaged or about to engage in
any business or transaction for which the assets retained by it shall be an
unreasonably small capital, taking into consideration the obligations to
the Banks incurred hereunder. The Borrower does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay them as they
mature.
5.27 ATLANTIC CITY. Atlantic City has operated in such a manner
as not to give rise to any inference, or otherwise mislead third Persons to
believe, that (a) it is not an entity separate and distinct from the
Borrower and the Borrower's other Subsidiaries and (b) it is not solely
responsible for its debts, without any support from the Borrower or any of
its other Subsidiaries. Neither Borrower nor any of its Subsidiaries has
commingled assets or funds with Atlantic City. Neither Borrower nor any of
its other Subsidiaries has guaranteed any of Atlantic City's Indebtedness,
contingent obligations or other obligations nor do such Persons have a
subscription for any Indebtedness or capital stock of, or other investment
in, Atlantic City. There is no basis for any creditors of Atlantic City to
assert any bona fide claim against the Borrower or any of its other
Subsidiaries for the payment of the obligations of Atlantic City to such
creditor.
SECTION 6 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS.
The obligations of the Banks to make any Loan and the performance
by the Banks of the other actions to be taken by them on or after the
Closing Date are subject to the fulfillment or waiver in writing of each of
the following conditions precedent. The Borrower shall deliver to the
Agent copies for each Bank of each document, instrument or other item to be
delivered pursuant to this Section 6.
6.1 COMPLIANCE. All of the representations and warranties of
the Borrower and its Subsidiaries in Section 5 hereof and in the Collateral
Documents shall be true in all material respects on and as of the Closing
Date and the date of
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any subsequent Loan, as if made on and as of such date and time, except
to the extent that such representations and warranties expressly
relate to an earlier date, in which case such representations and
warranties shall be true in all material respects as of such earlier date.
The Borrower and its Subsidiaries shall have performed and shall be in
compliance with all the applicable terms and provisions of this Agreement
and the Collateral Documents and no Possible Default or Event of Default
shall have occurred and be continuing, on and as of the Closing Date and
the date of any subsequent Loan or after giving effect to the making of
such Loan. On the Closing Date, the Borrower shall deliver to the Banks a
certificate, dated as of the Closing Date and signed by an executive
officer of the Borrower certifying compliance with the conditions of this
Section 6.1. Each request by the Borrower for a Loan shall, in and of
itself, constitute a representation and warranty that the Borrower, as of
the date of such Loan, is in compliance with this Section.
6.2 SECURITY AGREEMENTS.
(a) The Borrower shall have executed and delivered to the
Agent a Security Agreement in form and substance satisfactory to the Agent
(the "Borrower Security Agreement"), granting to the Agent, for the benefit
of the Banks, a first priority security interest in substantially all of
the Borrower's personal property; and the Borrower Security Agreement, and
the security interests granted pursuant thereto, shall be in full force and
effect.
(b) Each Subsidiary of the Borrower (other than Gadsden)
shall have executed and delivered to the Agent a Security Agreement in form
and substance satisfactory to the Agent (the "Subsidiary Security
Agreement"), granting to the Agent, for the benefit of the Banks, a first
priority security interest in substantially all of such Subsidiary's
personal property; and the Subsidiary Security Agreement, and the security
interests granted pursuant thereto, shall be in full force and effect.
6.3 PLEDGE AGREEMENTS.
(a) The Borrower shall have executed and delivered to the
Agent a Pledge Agreement in form and substance satisfactory to the Agent
(the "Borrower Pledge Agreement"), granting to the Agent, for the benefit
of the Banks, a first priority security interest in all of the issued and
outstanding capital stock of each direct Subsidiary of the Borrower held by
the Borrower (other than Atlantic City); the Borrower shall have delivered
to the Agent stock certificates evidencing all of such stock and duly
executed blank stock powers in respect thereof and shall have taken all
other actions as may be required to effect
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the grant and perfection of the Agent's security interest in such stock;
and the Borrower Pledge Agreement, and the security interests granted
pursuant thereto, shall be in full force and effect.
(b) Each stockholder of an indirect Subsidiary of the
Borrower shall have executed and delivered to the Agent a Pledge Agreement
in form and substance satisfactory to the Agent (the "Subsidiary Pledge
Agreement"), granting to the Agent, for the benefit of the Banks, a first
priority security interest in all of the issued and outstanding capital
stock of such indirect Subsidiary (other than Gadsden) of which it is a
stockholder; each such stockholder shall have delivered to the Agent stock
certificates evidencing all of such stock and duly executed blank stock
powers in respect thereof and shall have taken all other actions as may be
required to effect the grant and perfection of the Agent's security
interest in such stock; and the Subsidiary Pledge Agreement, and the
security interests granted pursuant thereto, shall be in full force and
effect.
6.4 REAL ESTATE MATTERS.
(a) With respect to each parcel of real property owned by
the Borrower or any of its Subsidiaries (other than Gadsden), the Borrower
or such Subsidiary shall (on or prior to the Closing Date with respect to
real property owned as of the Closing Date and, with respect to real
property thereafter acquired, after acquisition thereof in accordance with
Section 7.9 hereof) have executed and delivered a first priority mortgage
or deed of trust, in form and substance reasonably satisfactory to the
Agent, covering such parcel of real property. With respect to each parcel
of real property leased by the Borrower or any of its Subsidiaries (other
than Gadsden and Atlantic City), the Borrower or such Subsidiary shall (on
or prior to the Closing Date with respect to leases held as of the Closing
Date listed on Schedule 6.4(a) hereto and, with respect to leases
thereafter acquired, promptly after acquisition thereof in accordance with
Section 7.4 hereof) have executed and delivered a first priority leasehold
mortgage, in form and substance reasonably satisfactory to the Agent,
covering such leasehold interest. With respect to each of the real
property leases listed on Schedule 6.4(b) hereto, the Borrower or the
Subsidiary which is tenant thereunder shall deliver a collateral assignment
of lease in form and substance reasonably satisfactory to the Agent. Such
mortgages, deeds of trust and leasehold mortgages may be referred to
hereinafter collectively as the "Mortgages". Each Mortgage shall have been
duly recorded, and the Borrower shall have paid all taxes, fees or charges
incurred in connection with the execution or recording thereof.
Page 49
(b) The Borrower shall have procured and delivered to the
Agent a commitment from a title insurance company reasonably satisfactory
to the Agent (the "Title Company") for an ALTA mortgagee's policy of title
insurance (Form 1970 if available, or 1984 or 1990 with 1970 Endorsement)
covering each parcel of real estate owned by the Borrower or any of its
Subsidiaries and subject to a Mortgage, which policy shall be for the
benefit of the Agent on behalf of the Banks and in form and in an amount
reasonably satisfactory to the Agent and shall insure that such Mortgage is
a valid first mortgage lien on the property covered thereby. Such policy
shall, to the extent available at commercially reasonable rates and
appropriate: (i) insure title to the real property and all recorded
easements benefitting such real property, (ii) contain an "Extended
Coverage Endorsement" insuring over the general exceptions contained
customarily in such policy, (iii) contain an endorsement insuring that the
real property described in the title insurance policy is the same real
estate as shown on the survey, if any, delivered with respect to such
property, (iv) contain an endorsement insuring that each street adjacent to
the real property is a public street and that there is direct and
unencumbered pedestrian and vehicular access to such street from the real
property, (v) if the real property consists of more than one record parcel,
contain a "contiguity" endorsement, if applicable, insuring that all of the
record parcels are contiguous to one another, and (vi) contain appropriate
endorsements insuring against encroachments. No title indemnities shall be
established in connection with the issuance of the aforesaid lender's title
insurance policy.
(c) With respect to each parcel of real property owned by
the Borrower and subject to a Mortgage, the Borrower shall have procured
and delivered to the Agent evidence as to whether such parcel of property
is located within a flood hazard area for purposes of the National Flood
Insurance Act of 1968, as amended.
(d) The Borrower shall obtain from each lessor under a
lease, in respect of which the Borrower or any of its Subsidiaries has
granted to the Agent a Mortgage, written consent to such grant in form and
substance reasonably satisfactory to the Agent. The Borrower shall use
commercially reasonable efforts to obtain from each lessor under a lease of
which the Borrower or any of its Subsidiaries has granted to Agent a
collateral assignment of lease, written consent to such Agent.
(e) The Borrower shall have provided to the Agent copies of
(i) Phase I environmental surveys, acceptable to the Agent, with respect to
each parcel of real estate owned by the Borrower or any of its
Subsidiaries, (ii) to the extent available, all environmental surveys or
audits performed during
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the past five years in connection with each of the parcels of real estate
which is subject to a Mortgage, and the results of a search of the public
records of the authorities in the relevant jurisdictions responsible for
environmental matters with respect to any proceeding or action affecting
any parcel of real estate which is subject o a Mortgage and (iii) such
other evidence concerning compliance (both past and present) with
Environmental Laws by the Borrower and its Subsidiaries as the Agent may
reasonably request. The results of each Phase I environmental survey
shall be reasonably satisfactory to the Agent.
(f) The Agent shall have received, with respect to each of
the properties listed on Schedule 6.4(f) hereto, a survey (collectively,
the "Surveys") of each parcel of real estate owned by the Borrower or any
of its Subsidiaries, dated not more than ninety days prior to the Closing
Date, certified to the Agent, made in accordance with the "Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys" established and
adopted by the American Land Title Association and American Congress on
Surveying and Mapping in 1992, showing all buildings and other
improvements, if any, all encroachments, if any, all set-back lines, if
any, and all areas affected by any easements or other instruments of
record, if any (the recording data in respect of which shall be marked on
the survey), containing metes and bounds description of such parcel,
setting forth the flood zone designations, if any, in which such parcel is
located.
6.5 FINANCING STATEMENTS. Any financing statements or fixture
filings required by the Security Agreements, the Pledge Agreements and the
Mortgages shall have been filed for record with the appropriate
governmental authorities.
6.6 SUBSIDIARY GUARANTY. Each Subsidiary of the Borrower (other
than Gadsden) shall have executed and delivered to the Agent, for the
benefit of the Banks, a guaranty (the "Guaranty"), in form and substance
satisfactory to the Agent, pursuant to which each such Subsidiary
guarantees the Obligations of the Borrower to the Bank.
6.7 COLLATERAL ASSIGNMENT OF KEY MAN LIFE INSURANCE. The
Borrower shall have executed and delivered to the Agent a collateral
assignment of the key man life insurance policy required pursuant to
Section 7.3, in form and substance satisfactory to the Agent (the "Life
Insurance Assignment"), granting to the Agent, for the benefit of the
Banks, a security interest in the Borrower's right, title and interest in
and to such policy.
6.8 OPINION OF BORROWER'S COUNSEL. On the Closing Date, the
Agent shall have received the favorable written opinions of special counsel
to the Borrower and the Subsidiaries,
Page 51
of FCC counsel to the Borrower and the Subsidiaries, and of such local counsel
as the Agent may request, in each case dated the Closing Date, addressed to
the Banks and in form and substance satisfactory to the Agent.
6.9 FINANCIAL INFORMATION.
(a) OPERATING CASH FLOW. The Borrower shall have delivered
to the Agent on or prior to the Closing Date a certificate, in form and
substance satisfactory to the Agent, signed by a firm of independent
certified public accountants acceptable to the Agent setting forth
Operating Cash Flow for the twelve month period ending no earlier than
thirty days prior to the Closing Date, together with a detailed calculation
thereof, which certificate shall also set forth all of the operating
revenues and expenses of the Stations, the Muzak Business and the
Healthcare Communications Business.
(b) PRO FORMA FINANCIAL STATEMENTS. On the Closing Date,
the Borrower shall have delivered to the Agent a consolidated pro forma
balance sheet and income statement as of the Closing Date giving effect to
the closing under this Agreement.
6.10 ENGINEER'S REPORT. On the Closing Date, the Borrower shall
have delivered to the Agent a detailed engineering report from the
Borrower's engineer, acceptable in form and substance to the Agent,
certifying that the construction, engineering, installation and operation
of each Station and the communications facilities and equipment included in
the Muzak Business or the Healthcare Communications Business conform in all
material respects with generally accepted standards of good engineering
practice and comply with all laws, rules and regulations of each
governmental authority and agency having jurisdiction over such Station,
facilities and equipment. Such certificate shall also list any material
equipment problems at any Station or relating to the Muzak Business or the
Healthcare Communications Business and any material upgrades of equipment
which are currently, or which will within six months be, required at any
Station or in connection with the Muzak Business or the Healthcare
Communications Business.
6.11 DUE DILIGENCE INVESTIGATION. On or prior to the Closing,
the Agent shall have conducted a due diligence investigation of the
Borrower, its Subsidiaries, their respective properties and businesses, and
the results of such investigation shall have been satisfactory to the
Agent.
6.12 BORROWING REQUEST. On the date of each Loan, the Borrower
shall have delivered to the Agent a borrowing request for such Loan in form
and substance satisfactory to the Agent,
Page 52
setting forth the application of the proceeds of such Loan, evidence that
such application is permitted pursuant to Section 7.1, and showing the
recipient, the amount of the payment and the wire transfer instructions.
6.13 INSURANCE CERTIFICATES. On the Closing Date, the Borrower
shall have furnished to the Agent certificates of insurance together with
copies, if requested by the Agent, of all policies or other satisfactory
evidence that the insurance required by Section 7.3 is in full force and
effect.
6.14 CORPORATE DOCUMENTS. On the Closing Date, the Borrower
shall deliver to the Agent the following:
(a) certificates of good standing for the Borrower and each
of its Subsidiaries from the Secretary of State of its state of
incorporation and from the Secretary of State of each other state in which
such corporation is qualified or registered to do business, in each case
dated as of a date as near to the Closing Date as practicable;
(b) a certificate signed by the Secretary or Assistant
Secretary of the Borrower, dated as of the Closing Date, certifying that
attached thereto are true and complete copies of (i) the Certificate of
Incorporation and By-Laws of the Borrower, (ii) the Certificate or Articles
of Incorporation and By-Laws of each of the Borrower's Subsidiaries, and
(iii) resolutions adopted by the respective Boards of Directors of the
Borrower and each of its Subsidiaries, authorizing the execution, delivery
and performance of this Agreement, the Collateral Documents and the
Obligations;
(c) incumbency certificates for the Borrower and each of
its Subsidiaries; and
(d) such other documents as any Bank may reasonably request
in connection with the proceedings taken by the Borrower or any of its
Subsidiaries authorizing this Agreement and the Collateral Documents.
6.15 LIEN SEARCHES, CONSENTS AND RELEASES OF LIENS. The Agent
shall have received: (a) certified copies of UCC search reports listing all
effective financing statements that name the Borrower or any of its
Subsidiaries as debtor together with copies of all such financing
statements, (b) consents to the granting of Liens in all Operating
Agreements, Muzak Franchises and other material contracts and leases of the
Borrower and each of its Subsidiaries, which by their terms require such
consent, and (c) releases of any existing Liens encumbering any assets of
the Borrower or any of its Subsidiaries, except for Permitted Liens.
Page 53
6.16 NO ORDER, JUDGMENT OR DECREE. No order, judgment or decree
of any court, arbitrator or governmental authority shall purport to enjoin
or restrain the Banks from making the Loans.
6.17 FEE LETTER; FEES AND EXPENSES. The Borrower shall have
executed and delivered to the Agent a fee letter in form and substance
reasonably satisfactory to the Agent, and the Borrower shall have paid all
fees, expenses and other amounts due pursuant hereto and thereto.
6.18 LEGAL APPROVAL. All legal matters incident to this
Agreement and the consummation of the transactions contemplated hereby
shall be satisfactory to Dow, Lohnes & Albertson, special counsel to the
Agent.
6.19 OTHER DOCUMENTS. The Agent shall have received all
Collateral Documents duly executed, and each Bank shall have received such
other certificates, opinions, agreements and documents, in form and
substance satisfactory to it, as it may reasonably request.
SECTION 7 AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower agrees with the Banks that so long as this Agreement
shall remain in effect or any of the Obligations shall remain unpaid or to
be performed, it shall perform and comply with the affirmative covenants
contained in this Section.
7.1 USE OF PROCEEDS. The Borrower shall use the proceeds of the
Reducing Loans only for the following purposes: (a) to pay at Closing
existing Indebtedness in an amount not to exceed $51,210,000, (b) to pay
the purchase price of Permitted Acquisitions, (c) for Capital Expenditures
to the extent permitted pursuant to Section 8.7, (d) for working capital
purposes (including the payment of closing costs in connection with this
Agreement), and (e) for repurchases of the stock of the Borrower to the
extent permitted pursuant to Section 8.9(a)(ii). The Borrower shall use
the proceeds of the Acquisition Loans only for Permitted Acquisitions, but
no Acquisition Loan shall be made at any time that there is availability
under the Revolving Commitment.
7.2 CONTINUED EXISTENCE; MAINTENANCE OF RIGHTS AND LICENSES;
COMPLIANCE WITH LAW. Except for the merger or liquidation into the
Borrower or a wholly owned Subsidiary of the Borrower of an inactive
Subsidiary or of a Subsidiary which has sold substantially all of its
assets pursuant to a Permitted Divestiture or pursuant to a sale otherwise
permitted pursuant to
Page 54
Section 8.10, the Borrower shall, and shall cause each of its Subsidiaries
to, do or cause to be done all things necessary to preserve, renew and
keep in full force and effect its corporate existence and its material
rights and Licenses. Without limiting the generality of the foregoing,
the Borrower shall, and shall cause each of its Subsidiaries to,
maintain in full force and effect, until termination in accordance with
their respective terms, any and all Licenses, Operating Agreements and
other material contracts and other rights necessary to operate the
Stations, the Muzak Business and the Healthcare Communications Business,
not breach or violate the same in any material respect, and take all
actions which may be required to comply in all material respects with all
applicable laws, statutes, rules, regulations, orders and decrees now in
effect or hereafter promulgated by any governmental authority. The
Borrower shall, and shall cause each of its Subsidiaries to, obtain, renew
and extend all of the foregoing rights, Licenses and the like which may be
necessary for the continuance of the operation of the Stations, the Muzak
Business and the Healthcare Communications Business. The Borrower shall
use its best efforts to obtain any consents listed on EXHIBIT H attached
hereto which were not obtained on or prior to the Closing Date.
7.3 INSURANCE.
(a) The Borrower shall, and shall cause each of its
Subsidiaries to, keep its insurable properties insured to the full
replacement cost thereof at all times by financially sound and reputable
insurers reasonably acceptable to the Agent, and maintain such other
insurance, to such extent and against such risks, including fire,
lightning, vandalism, malicious mischief, flood (to the extent required by
the Agent, if any of the Borrower's or any of its Subsidiaries' property is
located in an identified flood hazard area, in which insurance has been
made available pursuant to the National Flood Insurance Act of 1968) and
other risks insured against by extended coverage, as is customary with
companies in the broadcasting business. All such insurance shall be in
amounts sufficient to prevent the Borrower or any of its Subsidiaries from
becoming a coinsurer, shall name the Agent, for the benefit of the Banks,
as loss payee and may contain loss deductible provisions which shall not
exceed $10,000. The Borrower shall maintain, for itself and its
Subsidiaries, in full force and effect liability insurance, business
interruption insurance, errors and omissions insurance, general accident
and public liability insurance and all other insurance as is usually
carried by companies engaged in the same or similar businesses similarly
situated against claims for personal or bodily injury, death or property
damage occurring upon, in, about or in connection with the use or operation
of any property or motor vehicles owned, occupied, controlled or used by
the Borrower, its Subsidiaries and their employees or agents, or
Page 55
arising in any other manner out of the business conducted by the Borrower
and its Subsidiaries. All of such insurance shall be in amounts reasonably
satisfactory to the Agent and shall be obtained and maintained by means of
policies with generally recognized, responsible insurance companies
authorized to do business in such states as may be necessary depending upon
the locations of the Borrower's and its Subsidiaries' assets and shall name
the Agent, for the benefit of the Banks, as an additional insured or loss
payee, as the case may be. The insurance to be provided may be blanket
policies. Each policy of insurance shall be written so as not to be
subject to cancellation or substantial modification without not less than
thirty days advance written notice to the Agent. The Borrower shall
furnish the Agent annually with certificates or other evidence satisfactory
to the Agent that the insurance required hereby has been obtained and is in
full force and effect and, prior to the expiration of any such insurance,
the Borrower shall furnish the Agent with evidence satisfactory to the
Agent that such insurance has been renewed or replaced. The Borrower
shall, upon request of the Agent, furnish the Agent such information about
such insurance as the Agent may from time to time reasonably request.
(b) The Borrower shall maintain key man life insurance
policies with responsible insurance carriers and pursuant to insurance
policies reasonably acceptable to the Agent, covering Mr. Frank Osborn in
an amount of not less than $5,000,000, and all such policies shall be
collaterally assigned to the Agent, for the benefit of the Banks, pursuant
to the Life Insurance Assignment, as security for the Obligations.
7.4 OBLIGATIONS AND TAXES. The Borrower shall, and shall cause
each of its Subsidiaries to, pay or perform all of its material
Indebtedness and other material liabilities and obligations in a timely
manner in accordance with normal business practices and with the terms
governing the same. The Borrower shall, and shall cause each of its
Subsidiaries to, comply with the terms and covenants of all material
agreements and all material leases of real or personal property and shall
keep them all in full force and effect until termination thereof in
accordance with their respective terms. The Borrower shall, and shall
cause each of its Subsidiaries to, pay and discharge promptly all taxes,
assessments and governmental charges or levies imposed upon it or in
respect of its property before the imposition of any penalty, as well as
all lawful claims for labor, materials, supplies or other matters which, if
unpaid, might become a Lien or charge upon such properties or any part
hereof; PROVIDED, HOWEVER, that neither the Borrower nor any of its
Subsidiaries shall be required to pay and discharge any such tax,
assessment, charge, levy or claim so long as (a) the validity thereof is
being contested diligently and in good faith
Page 56
by appropriate proceedings and the enforcement thereof is stayed, pending the
outcome of such proceedings, (b) the Borrower or such Subsidiary has set
aside on its books adequate reserves in accordance with GAAP with respect
thereto, and (c) such contest will not endanger the Lien of the Agent in
any of the Borrower's or such Subsidiary's assets.
7.5 FINANCIAL STATEMENTS AND REPORTS. The Borrower shall, and
shall cause each of its Subsidiaries to, maintain true and complete books
and records of account in accordance with GAAP. The Borrower shall furnish
to the Agent, for delivery to the Banks, the following financial statements
and projections at the following times:
(a) As soon as available, but in no event later than ninety
days after the end of each fiscal year of the Borrower, the Borrower shall
furnish (i) audited consolidated financial statements, including audited
consolidated balance sheets and income and expense statements, showing the
financial condition of the Borrower and its Subsidiaries as of the close of
such fiscal year and the results of their operations during such fiscal
year, and a consolidated statement of cash flows for such fiscal year,
together with such additional statements, schedules and footnotes as are
customary in a complete accountant's report (such financial statements
shall be certified by independent certified public accountants selected by
the Borrower and reasonably acceptable to the Agent and the opinion of such
accountants shall be unqualified); (ii) a copy of each management letter of
such accountants to the Borrower in respect of such annual financial
statements promptly after receipt thereof but in no event later than May 31
of each year; and (iii) a statement signed by such accountants to the
effect that in connection with their examination of such financial
statements they have reviewed the provisions of this Agreement and have no
knowledge of any event or condition which constitutes an Event of Default
or Possible Default or, if they have such knowledge, specifying the nature
and period of existence thereof; PROVIDED, HOWEVER, that in issuing such
statement, such independent accountants shall not be required to go beyond
normal auditing procedures conducted in connection with their opinion
referred to above;
(b) As soon as available, but in no event later than forty-
five days after the end of each fiscal quarter of the Borrower, the
Borrower shall furnish unaudited consolidated and consolidating financial
statements, including consolidated and consolidating balance sheets and
income and expense statements, showing the financial condition of the
Borrower and its Subsidiaries as of the end of such period and the results
of their operations during such period and for the then elapsed portion of
the fiscal year, and a consolidated and consolidating statement of cash
flows for the portion of the fiscal year ended
Page 57
with the last day of such quarter; all such financial statements shall set
forth, in comparative form, corresponding figures for the equivalent period
of the prior year and a comparison to budget, shall be in form and detail
satisfactory to the Agent, and shall be certified as to accuracy and
completeness by the chief financial officer of the Borrower;
(c) As soon as available, but in no event later than thirty
days after the end of each month, the Borrower shall furnish unaudited
statements of income and expense for each Station, the Muzak Business and
the Healthcare Communications Business, which shall contain a comparison
with the budget or projections for such period and a comparison to the
comparable period for the prior year, and which shall be certified by the
chief financial officer of the Borrower;
(d) The financial statements required under (a) and (b)
above shall be accompanied by a compliance certificate in the form attached
hereto as EXHIBIT M of the chief financial officer of the Borrower (i)
setting forth the computations showing compliance with the financial
covenants set forth in Section 8 below, and (ii) certifying that no
Possible Default or Event of Default has occurred, or if any Possible
Default or Event of Default has occurred, stating the nature thereof and
the actions the Borrower intends to take in connection therewith;
(e) The Borrower shall furnish (i) no later than the
fifteenth day of the first month of each fiscal year, an annual operating
budget or fiscal projections for such fiscal year, and (ii) promptly upon
preparation thereof, any material revisions of such annual budget or fiscal
projections;
(f) Promptly upon their becoming available, the Borrower
shall furnish (i) copies of any periodic or special reports filed by the
Borrower or any of its Subsidiaries with the FCC or any other federal,
state or local governmental agency or authority if such reports indicate
any material change in the ownership of the Borrower or such Subsidiary, or
any materially adverse change in the business, operations, affairs or
condition of the Borrower or such Subsidiary, (ii) copies of any material
notices and other material communications from the FCC or any other
federal, state or local governmental agency or authority which specifically
relate to the Borrower, any of its Subsidiaries, any Station or any
material License, and the substance of which relates to a matter that could
reasonably be expected to have a Material Adverse Effect, and (iii) copies
of the results of each survey conducted by the Borrower or any of its
Subsidiaries for the purpose of certifying to the FCC compliance with
federal laws and the rules, regulations, policies and orders of the FCC
relating to foreign ownership restrictions
Page 58
and to limitations on the nature and number of media outlets that may be
held under common ownership or control;
(g) Promptly upon their becoming available, the Borrower
shall furnish (i) copies of any registration statements and regular
periodic reports, if any, which the Borrower or any of its Subsidiaries
shall have filed with the Securities and Exchange Commission (or any
governmental agency substituted therefor) or any national securities
exchange, (ii) copies of all financial statements, reports and proxy
statements mailed to its public stockholders, and (iii) all press releases
and other public statements made available by the Borrower;
(h) The Borrower shall furnish (i) upon request, promptly
after the filing thereof with the Internal Revenue Service, copies of each
annual report with respect to each Plan established or maintained by the
Borrower or any member of the Controlled Group for each plan year,
including (A) where required by law, a statement of assets and liabilities
of such Plan as of the end of such plan year and statements of changes in
fund balance and in financial position, or a statement of changes in net
assets available for plan benefits, for such plan year, certified by an
independent public accountant satisfactory to the Agent, and (B) if
prepared by or available to the Borrower, an actuarial statement of such
Plan applicable to such plan year, certified by an enrolled actuary of
recognized standing acceptable to the Agent; and (ii) promptly after
receipt thereof, a copy of any notice the Borrower or a member of the
Controlled Group may receive from the Department of Labor or the Internal
Revenue Service with respect to any Plan (other than notices of general
application) which could result in a material liability to the Borrower;
the Borrower will promptly notify the Banks of any material taxes assessed,
proposed to be assessed or which the Borrower has reason to believe may be
assessed against the Borrower or any member of the Controlled Group by the
Internal Revenue Service with respect to any Plan or Benefit Arrangement;
and
(i) Upon the Agent's written request, such other
information about the financial condition, properties and operations of the
Borrower or any of its Subsidiaries as any Bank may from time to time
reasonably request.
7.6 NOTICES. The Borrower shall give the Agent, for
distribution to the Banks, notice (a) within five days after its receipt of
notice thereof, of any action, suit, investigation or proceeding by or
against the Borrower or any of its Subsidiaries, which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect,
including, without limitation, any material admonition, censure or adverse
citation or order by the FCC or any other governmental authority or
regulatory agency, (b) within three days after its receipt of notice
thereof, (i) of
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any action or event constituting an event of default or violation of
any License, Operating Agreement, Muzak Franchise or other material
contract to which the Borrower or any of its Subsidiaries is a party
or by which the Borrower or any such Subsidiary is bound, and (ii) of
any competing application, petition to deny or other opposition to any
license renewal application filed by the Borrower or any of its
Subsidiaries with the FCC, if such event of default, violation or other
matter could reasonably be expected to have a Material Adverse Effect, (c)
within three days after its receipt of notice thereof, of the occurrence of
any Possible Default or Event of Default and the actions the Borrower
intends to take in connection therewith, (d) within five days after its
receipt of notice thereof, of any cancellation of or any material amendment
to any of the insurance policies maintained in accordance with the
requirements of this Agreement, except for cancellations and amendments
that occur in the ordinary course of business, (e) promptly after the
occurrence thereof, of any material, adverse change in the business or
financial condition of the Borrower or any of its Subsidiaries, and (f)
promptly after the occurrence thereof, of any material strike, labor
dispute, slow down or work stoppage due to a labor disagreement (or any
material development regarding any thereof) affecting the Borrower or any
of its Subsidiaries.
7.7 MAINTENANCE OF PROPERTY. The Borrower shall, and shall
cause each of its Subsidiaries to, at all times maintain and preserve its
towers, machinery, equipment, motor vehicles, fixtures and other property
in good working order, condition and repair, normal wear and tear excepted,
and in compliance with all material applicable standards, rules or
regulations imposed by any governmental authority or agency (including,
without limitation, the FCC, the Federal Aviation Administration or any
other Licensing Authority) or policy of insurance, except for such property
which, in the judgment of the Borrower, is no longer necessary to the
business of the Borrower or any of its Subsidiaries.
7.8 INFORMATION AND INSPECTION. The Borrower shall furnish to
the Agent and the Banks from time to time, promptly upon request,
information reasonably requested by the Agent or any Bank pertaining to any
covenant, provision or condition hereof, or to any matter connected with
the books, records, operations, financial condition, properties, activities
or business of the Borrower or of any of its Subsidiaries. At all
reasonable times, the Borrower shall permit any authorized representative
designated by any Bank to visit and inspect any of the properties of the
Borrower or any of its Subsidiaries, and their books and records, and to
take extracts therefrom and make copies thereof, and to discuss the
Borrower's and its Subsidiaries' affairs, finances and accounts with the
management
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of the Borrower and its Subsidiaries and with the Borrower's independent
accountants.
7.9 MAINTENANCE OF LIENS. The Borrower shall do all things
necessary or requested by the Agent to preserve and perfect the Liens of
the Agent, for the benefit of the Banks, arising pursuant hereto and
pursuant to the Collateral Documents as first Liens, except for Permitted
Liens, and to insure that the Agent, for the benefit of the Banks, has a
Lien on substantially all of the assets of the Borrower and its
Subsidiaries (other than Gadsden, except as provided in Section 7.15). If
the Borrower or any of its Subsidiaries purchases any real property, the
Borrower or such Subsidiary shall notify the Agent and, within thirty days
of such purchase, execute, deliver and cause to be recorded a Mortgage in
connection therewith, which shall be a first lien, except for Permitted
Liens and take such other actions as would have been required pursuant to
Section 6.4 had such property been owned on the Closing Date. If the
Borrower or any of its Subsidiaries enters into a new Operating Agreement
or other material contract or lease which prohibits the assignment thereof
or the granting of a security interest therein without the consent of the
other party, the Borrower shall use commercially reasonable efforts to
obtain the written consent of such other party to the grant to the Agent,
for the benefit of the Banks, of a security interest therein pursuant to
the Security Agreements.
7.10 TITLE TO PROPERTY. The Borrower shall, and shall cause
each of its Subsidiaries to, own and hold title to all of its assets in its
own name and not in the name of any nominee.
7.11 ENVIRONMENTAL COMPLIANCE AND INDEMNITY.
(a) The Borrower shall, and shall cause each of its
Subsidiaries to, comply in all material respects with any and all
applicable Environmental Laws, including, without limitation, all
Environmental Laws in jurisdictions in which the Borrower or any of its
Subsidiaries owns or operates a facility or site, arranges for disposal or
treatment of Hazardous Materials, solid waste or other wastes, accepts for
transport any Hazardous Materials, solid wastes or other wastes or holds
any interest in real property or otherwise except where the failure to do
so would not reasonably be expected to have, either individually or in
aggregate, a Material Adverse Effect. The Borrower and each of its
Subsidiaries shall promptly take any and all necessary remedial actions in
response to the presence, storage, use, transportation or Release of any
Hazardous Materials on, under or about any real property owned, leased or
operated by the Borrower or any of its Subsidiaries, unless such presence,
storage, use, transportation or Release would not reasonably be expected to
have a Material Adverse Effect. In the event the Borrower or any of its
Subsidiaries undertakes any remedial action with respect
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to any Hazardous Material on, under or about any real property owned, leased
or operated by the Borrower or any of its Subsidiaries, the Borrower or the
relevant Subsidiary shall conduct and complete such remediation action in
compliance with applicable Environmental Laws, and in accordance with the
policies, orders and directives of all federal, state and local governmental
authorities, except where the liability of the Borrower or such Subsidiary
for such presence, storage, use, transportation or Release of any Hazardous
Material is being contested in good faith by the Borrower or such
Subsidiary and appropriate reserves therefor have been established in
accordance with GAAP. The Borrower shall notify the Banks promptly after
its receipt of notice thereof, of any Environmental Claim which the
Borrower receives involving any potential or actual material liability of
the Borrower or any of its Subsidiaries arising in connection with any
noncompliance with or violation of the requirements of any Environmental
Law or a material Release or threatened Release of any Hazardous Materials,
solid waste or other waste into the environment. The Borrower shall
promptly notify the Banks (i) of any material Release of Hazardous Material
on, under or from the real property in which the Borrower or any of its
Subsidiaries holds or has held an interest, upon the Borrower's learning
thereof by receipt of notice that the Borrower or any of its Subsidiaries
is or may be liable to any Person as a result of such Release or that the
Borrower or such Subsidiary has been identified as potentially responsible
for, or is subject to investigation by any governmental authority relating
to, such Release, and (ii) of the commencement or threat of any judicial or
administrative proceeding alleging a violation of any Environmental Laws.
(b) If the Agent at any time has a reasonable basis to
believe that there may be a violation of any Environmental Law by, or any
liability arising thereunder of, the Borrower or any of its Subsidiaries or
related to any real property owned, leased or operated by the Borrower or
any of its Subsidiaries or real property adjacent to such real property,
which violation or liability would reasonably be expected to have a
Material Adverse Effect, then the Borrower shall, upon request from the
Agent, provide the Agent with such reports, certificates, engineering
studies or other written material or data as the Agent may require so as to
satisfy the Agent that the Borrower or such Subsidiary is in material
compliance with all applicable Environmental Laws relating to the suspected
violation or liability.
(c) The Borrower shall defend, indemnify and hold the Agent
and the Banks, and their respective officers, directors, shareholders,
employees, agents, affiliates, successors and assigns harmless from and
against all costs, expenses, claims, demands, damages, penalties and
liabilities of every kind or nature whatsoever incurred by them (including
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reasonable attorneys fees) arising out of, resulting from or relating to
(i) the noncompliance of the Borrower, any of its Subsidiaries or any
property owned or leased by the Borrower or any of its Subsidiaries with
any Environmental Law (whether or not such non-compliance is disclosed to
the Agent or the Banks herein, in any Collateral Document or otherwise), or
(ii) any investigatory or remedial action involving the Borrower, any of
its Subsidiaries or any property owned or leased by the Borrower or any of
its Subsidiaries and required by Environmental Laws or by order of any
governmental authority having jurisdiction under any Environmental Laws, or
(iii) any injury to any person whatsoever or damage to any property arising
out of, in connection with or in any way relating to the breach of any of
the environmental warranties or covenants contained in this Agreement or
any facts or circumstances that cause any of the environmental
representations or warranties contained in this Agreement to cease to be
true, or (iv) the existence, treatment, storage, Release, generation,
transportation, removal, manufacture or other handling of any Hazardous
Material on or affecting any property owned or leased by the Borrower or
any of its Subsidiaries, or (v) the presence of any asbestos-containing
material or underground storage tanks, whether in use or closed, under or
on any property owned or leased by the Borrower or any of its Subsidiaries;
PROVIDED, HOWEVER, that the foregoing indemnity shall not apply to any such
costs, expenses, claims, demands, damages, penalties or liabilities that
arise solely out of the gross negligence or willful misconduct of the
indemnified person.
7.12 RATE HEDGING OBLIGATIONS. Within sixty days after the
Closing Date, the Borrower shall enter into, and shall at all times
thereafter maintain in full force and effect, agreements in form and
substance reasonably satisfactory to the Agent regarding Rate Hedging
Obligations so that the notional amount subject to such agreements equals
at all times at least 50% of the principal amount of the Loans then
outstanding; PROVIDED, HOWEVER, that the Borrower shall not be required to
maintain such agreements at any time that the ratio of Total Debt to
Operating Cash Flow for the most recently ended four quarter period is less
than or equal to 3.0 to 1.0.
7.13 FCC CONSENTS. The Borrower acknowledges that certain
transactions contemplated by this Agreement or the Collateral Documents,
and certain actions which may be taken by the Agent or the Banks in the
exercise of their rights under this Agreement or the Collateral Documents,
may require the consent of the FCC. If counsel to the Agent determines
that the consent of the FCC is required in connection with the execution,
delivery and performance of any of the aforesaid documents or any documents
delivered to the Agent or the Banks in connection therewith or as a result
of any action which may be taken pursuant thereto, then the Borrower, at
its sole cost and
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expense, shall use its best efforts to secure such consent and to cooperate
with the Agent and the Banks in any action commenced by the Agent or the
Banks to secure such consent. The Borrower shall not take any action
which interferes with the exercise or completion of any such action
taken by the Agent or the Banks. The Borrower further consents to
the transfer of control or assignment of Licenses to a receiver or
trustee or similar official or to any purchaser of the collateral
securing the Loans pursuant to any public or private sale, judicial sale,
foreclosure or exercise of other remedies available to the Agent or the
Banks as permitted by applicable law upon the occurrence of an Event of
Default.
7.14 APPRAISALS. If at any time any Bank determines that it
must have current appraisals of any of the real property subject to a
Mortgage to comply with any law, rule or regulation applicable to it, then,
upon request by such Bank, the Borrower shall, at its expense, order
appraisals of all of such real property. Such appraisals shall be in form
and substance reasonably acceptable to the Banks, shall be prepared by
appraisers reasonably acceptable to the Banks and shall be delivered to the
Agent within forty-five days of the request therefor.
7.15 GADSDEN AND ATLANTIC CITY.
(a) GADSDEN.
(i) Within ten Banking Days of the earlier of the
termination of the Trust Agreement or the reversion of the voting rights
relating to the capital stock of Gadsden from the trustee thereunder to
Southeast Radio Holding Corp., the Borrower shall cause Southeast Radio
Holding Corp. to pledge to the Agent, for the benefit of the Banks, all of
the capital stock of Gadsden and shall cause Gadsden to execute the
Guaranty and to grant to the Agent, for the benefit of the Banks, first
priority liens and security interests in all of its property, real and
personal, tangible and intangible, in each case pursuant to documentation
in form and substance reasonably satisfactory to the Agent.
(ii) The Banks and the Borrower acknowledge that
during the period the stock of Gadsden is held in the trust created by the
Trust Agreement, the Borrower cannot cause Gadsden to take any actions or
refrain from taking any actions, the trustee under such trust having all
voting power with respect to the stock of Gadsden. Consequently, the Banks
and the Borrower acknowledge that neither Gadsden nor the trustee under the
Trust Agreement is bound by the covenants set forth in this Agreement.
Notwithstanding the foregoing, if Gadsden takes any action or fails to take
any action which would be prohibited or required by the terms or covenants
of this Agreement, as the case may be, the
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Borrower shall be deemed to be in breach of such term or covenant.
(b) ATLANTIC CITY.
(i) The Borrower shall cause Atlantic City to operate
in such a manner as not to give rise to any inference, or otherwise mislead
third Persons to believe, that it is not an entity separate and distinct
from the Borrower and each of its other Subsidiaries or that it is not
solely responsible for its debts, without any support from the Borrower or
any of its other Subsidiaries. Neither the Borrower nor any of its other
Subsidiaries shall commingle assets or funds with Atlantic City or become a
Guarantor for the benefit of Atlantic City.
(ii) Within ten Banking Days after the payment in full
by Atlantic City of all amounts owed by it to National Westminster Bank or
its assignees, the Borrower shall pledge to the Agent, for the benefit of
the Banks, all of the capital stock of Atlantic City and shall cause
Atlantic City to execute the Guaranty and to grant to the Agent, for the
benefit of the Banks, first priority liens and security interests in all of
its property, real and personal, tangible and intangible, in each case
pursuant to documentation in form and substance reasonably satisfactory to
the Agent.
7.16 LICENSE SUBSIDIARIES. Upon the reasonable request of the
Agent and the Majority Banks, the Borrower shall form one or more wholly
owned Subsidiaries and shall cause all of the FCC Licenses held by it or
any of its Subsidiaries to be assigned to such Subsidiaries with the
consent of the FCC. Each such Subsidiary may be referred to herein as a
"License Subsidiary". Immediately upon the creation of a License
Subsidiary, the Borrower shall pledge to the Agent, for the benefit of the
Banks, all of the capital stock of such License Subsidiary and shall cause
such License Subsidiary to execute the Guaranty and to grant to the Agent,
for the benefit of the Banks, first priority liens and security interests
in all of its property, real and personal, tangible and intangible, in each
case pursuant to documentation in form and substance reasonably
satisfactory to the Agent. In addition, the Borrower shall deliver to the
Agent evidence reasonably satisfactory to the Agent to the effect that all
approvals, consents or authorizations required in connection with the
creation of such License Subsidiary and the assignment of the FCC Licenses
shall have been obtained and such opinions as the Agent may reasonably
request as to the corporate or other organization of such License
Subsidiary, the liens and security interests granted to the Agent as
required pursuant to this Section and as to the required regulatory
approvals.
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SECTION 8 NEGATIVE COVENANTS OF THE BORROWER.
The Borrower agrees with the Banks that so long as this Agreement
shall remain in effect or any of the Obligations shall remain unpaid or to
be performed, the Borrower shall not, directly or indirectly, take any of
the actions set out in this Section 8 nor permit any of the conditions set
out herein to occur.
8.1 INDEBTEDNESS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, incur, create, assume or permit to exist any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness arising under conditional sale, rental and
purchase money arrangements incurred in the ordinary course of business and
Indebtedness permitted under Section 8.6 hereof, including, without
limitation, Capitalized Lease Obligations owing to Society in an aggregate
amount not to exceed $1,000,000;
(c) unsecured trade accounts payable and other unsecured
current Indebtedness incurred in the ordinary course of business (but
excluding any Indebtedness for borrowed money);
(d) Indebtedness for taxes, assessments, governmental
charges, liens or similar claims to the extent that payment thereof shall
not be required to be made by the provisions of Section 7.4;
(e) Indebtedness incurred in respect of Rate Hedging
Obligations required pursuant to Section 7.12;
(f) Intercompany Indebtedness among the Borrower and its
Subsidiaries;
(g) Indebtedness arising under deferred compensation
arrangements with employees or former employees in an aggregate amount not
to exceed $300,000 at any time; and
(h) Indebtedness of Atlantic City owing to National
Westminster Bank in a principal amount not to exceed $3,400,000 so long as
such indebtedness is non-recourse to the Borrower and all of its other
Subsidiaries.
8.2 LIENS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, incur, create, assume or permit to exist any Lien of
any nature whatsoever on any property or assets now owned or hereafter
acquired by the Borrower or any of its Subsidiaries, other than Permitted
Liens. The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter
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into or permit to exist any arrangement or agreement, other than pursuant
to this Agreement or any Collateral Document, which directly or indirectly
prohibits the Borrower or any of its Subsidiaries from creating or
incurring any Lien on any of its assets, other than (a) leases and
agreements regarding purchase money Indebtedness (so long as such
prohibition only relates to the asset which is subject to such
lease or which secure such Indebtedness), and (b) provisions in
agreements which prohibit the assignment of such agreement.
8.3 GUARANTIES. The Borrower shall not, and shall not permit
any of its Subsidiaries to, become a Guarantor for any Person, except with
respect to (a) endorsements of negotiable instruments for collection in the
ordinary course of business, (b) the Guaranty, (c) contingent obligations
under indemnity agreements to title insurers to cause such title insurers
to issue to the Agent mortgagee title insurance policies, as provided in
Section 6.4, (d) contingent obligations incurred in the ordinary course of
business with respect to surety and appeal bonds, performance and return-
of-money bonds and other similar obligations not exceeding at any time
outstanding $25,000 in aggregate liability, and (e) contingent obligations
with respect to Indebtedness permitted by Section 8.1 (other than Section
8.1(h)).
8.4 [Intentionally Omitted]
8.5 [Intentionally Omitted]
8.6 CAPITAL LEASES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, incur, create, assume or permit to exist
Capitalized Lease Obligations if the aggregate amount payable by the
Borrower and its Subsidiaries in respect thereof in any fiscal year would
exceed the sum of $500,000 plus the amount of any such obligations incurred
pursuant to a Permitted Acquisition.
8.7 CAPITAL EXPENDITURES.
(a) Except as otherwise expressly provided in Sections
8.7(b) and (c) below, the Borrower and its Subsidiaries shall not make
Capital Expenditures (not including Capitalized Lease Obligations in
respect of equipment leased by the Borrower or any of its Subsidiaries
which is used in the Muzak Business) in any fiscal year which exceed, in
the aggregate, $1,000,000.
(b) Osborn Healthcare Communications, Inc. may make Capital
Expenditures which, during the term of this Agreement, do not exceed an
aggregate amount of $2,000,000. Such Capital Expenditures may include
investments in other healthcare communications businesses so long as (i)
such businesses have generated positive cash flow for the twelve month
period ended
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most recently prior to such acquisition, (ii) no Possible Default or
Event of Default exists or would exist after giving effect to
the acquisition of such investment and (iii) the interest of Osborn
Healthcare Communications, Inc. in such other healthcare communications
business is pledged to the Agent, for the benefit of the Banks, pursuant to
documents in form and substance reasonably satisfactory to the Agent.
(c) In addition to amounts permitted pursuant to Section
8.7(a), the Borrower may make, or permit its Subsidiaries to make, Capital
Expenditures in connection with Stations WWNC-AM/WKSF-FM, Asheville, North
Carolina; WOLZ-FM, Fort Myers, Florida; WFKS-FM, Daytona Beach, Florida;
and WQEN-FM and WAAX-AM, Gadsden, Alabama, which, for the period from the
date of acquisition of such Stations through the term of this Agreement, do
not exceed an aggregate amount of $500,000 so long as no Possible Default
or Event of Default exists or would exist after giving effect to the making
of any such Capital Expenditure.
8.8 NOTES, ACCOUNTS RECEIVABLE AND CLAIMS. The Borrower shall
not, and shall not permit any of its Subsidiaries to, sell, discount or
otherwise dispose of any note, account receivable or other right to receive
payment, with or without recourse, except for collection in the ordinary
course of business; or fail to timely assert any claim, cause of action or
contract right which it possesses against any third party or agree to
settle or compromise any such claim, cause of action or contract right
except in any case in the exercise of good business judgment and except for
settlements or compromises made in the reasonable exercise of business
judgment in the ordinary course of business.
8.9 CAPITAL DISTRIBUTIONS; RESTRICTIONS ON PAYMENTS TO
STOCKHOLDERS.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, make, or declare or incur any liability to make, any
Capital Distribution, except that:
(i) any Subsidiary of the Borrower may make Capital
Distributions to the Borrower or to a wholly owned Subsidiary of the
Borrower; and
(ii) the Borrower may make open market purchases of
its common stock so long as (i) on the date of any such purchase, and after
giving effect thereto, the ratio of Total Debt as of such date to Operating
Cash Flow for the four quarter period most recently ended is less than 3.0
to 1.0, (ii) no Possible Default or Event of Default exists or would exist
after giving effect to any such purchase, and (iii) the aggregate amount of
such purchases during the term of this Agreement does not exceed
$5,000,000.
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(b) The Borrower shall not permit any of its Subsidiaries
to agree to or to be subject to any restriction on its ability to make
Capital Distributions or loans or other asset transfers to its stockholders
other than restrictions imposed by applicable law and the restriction set
forth in this Section.
8.10 DISPOSAL OF PROPERTY; MERGERS; ACQUISITIONS;
REORGANIZATIONS.
(a) Except as provided in paragraphs (b), (c), (d) and (e)
below, the Borrower shall not, and shall not permit any of its Subsidiaries
to, (i) dissolve or liquidate; (ii) sell, lease, transfer or otherwise
dispose of any material portion of its properties and assets to any Person
except for (A) the disposition of assets in the ordinary course of business
in an aggregate amount not to exceed $1,000,000 in any transaction or
related series of transactions, (B) the disposition of any asset which, in
the good faith exercise of its business judgment, the Borrower determines
is no longer useful in the conduct of its or its Subsidiaries' business and
(C) other sales expressly permitted pursuant to Section 8.10(c) below;
(iii) be a party to any consolidation, merger, recapitalization or other
form of reorganization; (iv) make any acquisition of all or substantially
all the assets of any Person, or of a business division or line of business
of any Person, or of any other assets constituting a going business; (v)
create, acquire or hold any Subsidiary (other than the Subsidiaries of the
Borrower as of the date of this Agreement and the receipt of the stock of
Gadsden from the trustee pursuant to the Trust Agreement), or (vi) be or
become a party to any joint venture or other partnership.
(b) The Borrower or any wholly owned Subsidiary of the
Borrower may make acquisitions of substantially all of the assets of any
radio station or of all of the capital stock or other equity interests of a
Person which owns a radio station, subject to the satisfaction of the
following conditions (any such acquisition which satisfies all of such
conditions being referred to hereinafter as a "Permitted Acquisition"):
(i) such radio station shall be located in one of the
one hundred largest areas of dominant influence ("ADI"), as determined by
the Arbitron Company, in the United States of America, and shall have had
positive cash flow for the four quarter period most recently ended prior to
the closing of such acquisition;
(ii) the total purchase price (including all cash,
non-cash and deferred consideration and payments in respect of non-
competition covenants and similar payments) of any such acquisition shall
not exceed $7,500,000, and the aggregate total
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purchase price of all such acquisitions in any six month period shall not
exceed $15,000,000;
(iii) the Borrower shall have given to the Agent
written notice of such acquisition at least thirty days prior to executing
any binding commitment with respect thereto, which notice shall state the
additional amounts, if any, by which the Borrower proposes to increase the
dollar limitations set forth in Section 8.6;
(iv) the Borrower shall have demonstrated to the
satisfaction of the Agent that the Borrower will be in compliance with all
of the covenants contained herein after giving effect to such acquisition
and that no Event of Default or Possible Default then exists or would exist
after giving effect to such acquisition, and the Borrower shall have
delivered to the Agent within ten days prior to the consummation of such
acquisition an acquisition report signed by an executive officer of the
Borrower in form and substance satisfactory to the Agent which shall
contain calculations demonstrating on a pro forma basis the Borrower's
compliance with the financial covenants set forth in this Section 8 after
giving effect to such acquisition and projections for the Borrower for a
five year period after the closing of such acquisition giving effect to the
acquisition and including a statement of sources and uses of funds for such
acquisition showing, among other things, the source of financing for the
acquisition;
(v) the agreement governing such acquisition and all
related documents and instruments shall be reasonably satisfactory to the
Agent in form and substance;
(vi) if requested by the Agent, all FCC Licenses
acquired in connection with such acquisition shall be transferred
immediately upon consummation of such acquisition to a License Subsidiary
which shall have no other assets or liabilities;
(vii) the Borrower shall have taken any actions as may
be necessary or reasonably requested by the Agent to grant to the Agent,
for the benefit of the Banks, perfected Liens in all assets, real and
personal, tangible and intangible, acquired by the Borrower in such
acquisition pursuant to the Collateral Documents, subject to no prior Liens
except Permitted Liens;
(viii) if the Borrower acquires a Subsidiary or
creates a Subsidiary (including a License Subsidiary) pursuant to or in
connection with such acquisition,
(A) the Borrower shall, or shall cause the
stockholder of such newly acquired or created Subsidiary to,
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pledge to the Agent, for the benefit of the Banks, all of the stock or other
securities or equity interests of such acquired or created Subsidiary pursuant
to documentation in form and substance satisfactory to the Agent; and
(B) such acquired or created Subsidiary shall
execute and deliver to the Agent, for the benefit of the Banks, a Guaranty
and shall grant to the Agent, for the benefit of the Banks, a first
priority, perfected lien or security interest in substantially all of its
assets, real and personal, tangible and intangible, subject to no prior
Liens except for Permitted Liens, pursuant to documentation in form and
substance satisfactory to the Agent; and
(ix) the Borrower shall have delivered to the Agent
evidence reasonably satisfactory to the Agent to the effect that all
approvals, consents or authorizations required in connection with such
acquisition from any Licensing Authority or other governmental authority
shall have been obtained and that any consent of the FCC shall have become
a Final Order, and such opinions as the Agent may reasonably request as to
the Liens granted to the Agent, for the benefit of the Banks, as required
pursuant to this Section and as to any required regulatory approvals for
such acquisition.
(c) The Borrower may (i) make Permitted Divestitures, (ii)
sell or otherwise dispose of its interests in Fairmont Communications
Corporation and Northstar Television Group, Inc. and (iii) conduct other
Asset Sales not otherwise permitted pursuant to this Section 8.10 with the
consent of the Majority Banks. All such sales or other dispositions shall
be for cash, and the proceeds of each Permitted Divestiture and each other
Asset Sale shall be paid to the Agent for the benefit of the Banks as a
mandatory prepayment of the Loans pursuant to Section 2.6(b)(iii).
(d) The Borrower and its Subsidiaries may create wholly
owned corporate Subsidiaries subject to satisfaction of each of the
following conditions:
(i) no Event of Default or Possible Default then
exists or would exist after giving effect to such creation;
(ii) the Borrower shall have given the Agent five days
prior written notice of the creation of such wholly owned Subsidiary and
shall have provided information to the Agent as to the business purpose for
creating such Subsidiary;
(iii) the Borrower shall, or shall cause the
stockholder of such newly created Subsidiary to, pledge to the Agent, for
the benefit of the Banks, all of the stock of such
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wholly owned Subsidiary pursuant to documentation in form and substance
satisfactory to the Agent;
(iv) such wholly owned Subsidiary shall execute and
deliver to the Agent the Guaranty and shall grant to the Agent, for the
benefit of the Banks, a perfected Lien in all of its assets, real and
personal, tangible and intangible, subject to no prior Liens except for
Permitted Liens, pursuant to documentation in form and substance
satisfactory to the Agent; and
(v) the Borrower shall have delivered to the Agent
evidence reasonably satisfactory to the Agent to the effect that all
approvals, consents or authorizations required in connection with the
creation of such wholly owned Subsidiary and the transfer to it of any
assets and the grant of such Liens shall have been obtained and such
opinions as the Agent may reasonably request as to the corporate
organization of such Subsidiary, the Liens granted to the Agent for the
benefit of the Banks as required pursuant to this Section and such other
matters as the Agent may deem appropriate.
(e) The Borrower may cause the merger or liquidation into
the Borrower or a wholly owned Subsidiary of the Borrower of an inactive
Subsidiary or of a Subsidiary which has sold substantially all of its
assets pursuant to a Permitted Divestiture or pursuant to a sale otherwise
permitted pursuant to this Section.
8.11 INVESTMENTS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, purchase or otherwise acquire, hold or invest
in any stock or other securities or evidences of indebtedness of, or any
interest or investment in, or make or permit to exist any loans or advances
to, any other Person, except:
(a) direct obligations of the United States Government
maturing within one year or investments in mutual funds which hold only
such direct obligations of the United States;
(b) certificates of deposit of a member bank of the Federal
Reserve System having capital, surplus and undivided profits in excess of
$2,000,000,000;
(c) any investment in commercial paper which at the time of
such investment is assigned the highest quality rating in accordance with
the rating systems employed by either Moody's Investors Service, Inc. or
Standard & Poor's Corporation;
(d) money market funds;
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(e) securities received pursuant to a plan of
reorganization adopted in an insolvency proceeding or otherwise in
immaterial amounts in exchange for accounts receivable of the entity which
is the subject of such insolvency proceeding generated in the ordinary
course of the Borrower's or any of its Subsidiaries' business;
(f) loans to employees not to exceed $250,000 and advances
of expenses to employees;
(g) investments in existing Subsidiaries listed on EXHIBIT
E and Subsidiaries created pursuant to Section 7.16 or 8.10;
(h) investments by Osborn Healthcare Communications, Inc.
permitted pursuant to Section 8.7(b);
(i) the investment as of the date hereof by the Borrower in
Ruth Broadcasting Corporation; and
(j) other investments which do not have an acquisition cost
which in the aggregate exceeds $50,000.
8.12 AMENDMENT OF GOVERNING DOCUMENTS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, amend, modify or
supplement its Certificate or Articles of Incorporation, By-Laws or other
organizational or governing documents, unless required by law, in any
manner that is adverse to the interests of the Banks (as may be reasonably
determined by the Banks).
8.13 FINANCIAL COVENANTS.
(a) TOTAL DEBT TO OPERATING CASH FLOW RATIO. The Borrower
shall not permit the ratio of Total Debt outstanding at any time during any
period listed in Column A below to Operating Cash Flow for the four fiscal
quarter period then ended or most recently ended to be greater than the
ratio set forth in Column B below opposite such period:
COLUMN A COLUMN B
PERIOD: PERMITTED RATIO:
Closing through March 31, 5.50:1.0
1996:
April 1, 1996, through 5.25:1.0
June 30, 1996:
July 1, 1996, through 5.00:1.0
December 31, 1996:
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January 1, 1997, through 4.75:1.0
December 31, 1997:
January 1, 1998, through 4.50:1.0
December 31, 1998:
January 1, 1999, and 4.00:1.0
thereafter:
(b) OPERATING CASH FLOW TO PROJECTED DEBT SERVICE. The
Borrower shall not permit the ratio of Operating Cash Flow for any four
fiscal quarter period ending on or prior to June 30, 1997, to Projected
Debt Service as of the end of such four quarter period to be less than 1.10
to 1.00; and the Borrower shall not permit the ratio of Operating Cash Flow
for any four fiscal quarter period ending after June 30, 1997, to Projected
Debt Service as of the end of such four quarter period to be less than 1.05
to 1.00.
(c) OPERATING CASH FLOW TO HISTORICAL FIXED CHARGES. The
Borrower shall not permit the ratio of Operating Cash Flow for any four
fiscal quarter period ending on or prior to December 31, 1995, to
Historical Fixed Charges as of the end of such four quarter period to be
less than 1.20 to 1.00; and the Borrower shall not permit the ratio of
Operating Cash Flow for any four fiscal quarter period ending after
December 31, 1995, to Historical Fixed Charges as of the end of such four
quarter period to be less than 1.00 to 1.00.
8.14 MANAGEMENT AGREEMENTS AND FEES.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, make or enter into, or pay any management fees pursuant
to, any so-called management or service agreement or joint operating
agreement whereby management, supervision or control of its business, or
any significant aspect thereof, shall be delegated to or placed in any
Person other than an employee of the Borrower or such Subsidiary; PROVIDED,
HOWEVER, that the Borrower may pay consulting fees to certain of its
Directors as disclosed in the Borrower's Proxy Statement to its
stockholders dated April 11, 1995. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make or enter into, or receive any
management fees pursuant to, any so-called management or service agreement
or joint operating agreement whereby management, supervision or control of
the business of any other Person (other than a Subsidiary of the Borrower),
or any significant aspect thereof, shall be delegated to or placed in the
Borrower or any of its Subsidiaries.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, except in connection with a Permitted Acquisition, enter
into, or otherwise be obligated under, with
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respect to any radio or television station, including the Stations, any local
marketing agreement, time brokerage agreement, program service agreement,
facilities leasing agreement or similar arrangement, except (i) for such
agreements in effect as of the date hereof in respect of Stations WFXK-FM
and WING-FM, and (ii) any such agreements entered into in connection with
any Permitted Divestiture of Stations WFKS-FM and WWRD-FM.
8.15 FISCAL YEAR. The Borrower shall not, and shall not permit
any Subsidiary to, change its fiscal year, which shall be the calendar
year.
8.16 ERISA. Neither the Borrower nor any member of the
Controlled Group shall fail to make any contributions which are required
pursuant to the terms of any Plan or any Benefit Arrangement. Neither the
Borrower nor any member of the Controlled Group shall contribute to or
agree to contribute to any Plan which is (a) subject to the minimum funding
requirements under ERISA Section 302 or Code Section 412; (b) a
multiemployer plan (as defined in ERISA Section 4001(a)(3)); (c) a defined
benefit plan (as defined under ERISA Section 3(35) or Code Section 414(j));
(d) a multiple employer plan (as defined in ERISA Section 4063); or (e) a
multiple employer welfare arrangement (as defined in ERISA Section 3(40)).
8.17 AFFILIATES. Except as expressly provided in Section 8.14,
the Borrower shall not, and shall not permit any of its Subsidiaries to,
enter into any transaction or agreement with any Affiliate of the Borrower
or pay any compensation or salary to any such Person unless such
transaction or agreement is in the ordinary course of and pursuant to the
reasonable requirements of the business of the Borrower or any of its
Subsidiaries and the terms of such transaction or agreement are not
substantially less favorable to the Borrower or such Subsidiary than could
be obtained in an arms-length transaction with an unaffiliated third party
or unless the amount paid to such person is not substantially in excess of
the fair value of the services rendered by such person.
8.18 CHANGE OF NAME, IDENTITY OR CORPORATE STRUCTURE. The
Borrower shall not, and shall not permit any of its Subsidiaries to, change
its name, identity or corporate structure without thirty days prior written
notice to the Agent.
8.19 AMENDMENTS OR WAIVERS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, amend, alter or modify, or consent
to or suffer any amendment, alteration or modification of, any License or
any Operating Agreement or other material contract to which the Borrower or
such Subsidiary is a party, except for any amendments, alterations or
modifications
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which could not reasonably be expected to have a Material Adverse Effect.
8.20 ISSUANCE OR TRANSFER OF CAPITAL STOCK. The Borrower shall
not permit any of its Subsidiaries to sell or issue any capital stock or
other equity interests or any warrants, options or other securities
convertible into or exercisable for any capital stock or other equity
interests, and the Borrower shall not permit any of its Subsidiaries to
permit the transfer of any capital stock or other such equity interests.
8.21 CHANGE IN BUSINESS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, change the nature of its business in any
material respect. Neither the Borrower nor any of its Subsidiaries shall
engage in any business other than those described in the Borrower's annual
report to its stockholders for the year ending December 31, 1994, and other
activities incidental or related to such businesses.
8.22 REGULATION U. The Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, (a) apply any part of
the proceeds of the Loans to the purchasing or carrying of any "margin
stock" within the meaning of Regulations G, T, U or X of the Federal
Reserve Board, or any regulations, interpretations or rulings thereunder,
(b) extend credit to others for the purpose of purchasing or carrying any
such margin stock, or (c) retire Indebtedness which was incurred to
purchase or carry any such margin stock.
8.23 LICENSE SUBSIDIARIES. The Borrower shall not permit any
License Subsidiary to (a) incur, create, assume or permit to exist any
Indebtedness, (b) incur, create, assume or permit to exist any Lien of any
nature whatsoever on any property or assets now owned or hereafter acquired
by it except in favor of the Agent, for the benefit of the Banks, (c) make
any Capital Expenditures, (d) acquire any assets other than the Licenses,
(e) conduct any business, or (f) hire or engage any employees.
SECTION 9 EVENTS OF DEFAULT.
The occurrence of any one or more of the following events,
whether voluntarily or involuntarily or by operation of law, shall
constitute an Event of Default hereunder:
9.1 NON-PAYMENT. The Borrower shall fail to pay when due,
whether by acceleration of maturity or otherwise, any installment of
principal due hereunder or under any Note, or shall fail to pay when due,
or within two days after the date when due, any installment of interest due
hereunder or under any Note or any fee or other payment obligation in
respect of the Obligations.
Page
9.2 FAILURE OF PERFORMANCE IN RESPECT OF OTHER OBLIGATIONS. (a)
The Borrower shall fail to observe, perform or be in compliance with any of
the provisions of Section 8, Section 7.1, Section 7.3, Section 7.8 or the
first sentence of Section 7.2; or (b) the Borrower, any of its Subsidiaries
or any other party to a Collateral Document (other than the Agent or a
Bank) shall fail to observe, perform or be in compliance with the terms of
any Obligation, covenant or agreement (other than those referred to in
Section 9.1, Section 8, Section 7.1, Section 7.3, Section 7.8 or the first
sentence of Section 7.2) to be observed, performed or complied with by the
Borrower, any of its Subsidiaries or such other party hereunder or under
any Collateral Document and, PROVIDED that such failure is of a type which
can be cured, such failure shall continue and not be cured for thirty days
after: (i) written notice thereof from the Agent or a Bank; or (ii) the
Banks are notified thereof or should have been notified thereof pursuant to
the provisions of Section 7.6 hereof, whichever is earlier.
9.3 BREACH OF WARRANTY. Any financial statement,
representation, warranty, statement or certificate made or furnished by the
Borrower, any of its Subsidiaries or any other party to a Collateral
Document (other than the Agent or a Bank) in or in connection with this
Agreement or any Collateral Document, or as an inducement to the Agent or
the Banks to enter into this Agreement and the Collateral Documents,
including, without limitation, those in Section 5 above, shall have been
false, incorrect or incomplete when made or deemed made in any material
respect.
9.4 CROSS-DEFAULTS. The Borrower or any of its Subsidiaries
shall default in any payment due on any Total Debt in excess of $250,000
and such default shall continue for more than the period of grace, if any,
applicable thereto; or the Borrower or any of its Subsidiaries shall
default in the performance of or compliance with any term of any evidence
of such Total Debt or of any mortgage, indenture or other agreement
relating thereto, and any such default shall continue for more than the
period of grace, if any, specified therein and shall not have been waived
pursuant thereto if such default causes, or permits the holder thereof to
cause, the acceleration of such Total Debt.
9.5 ASSIGNMENT FOR BENEFIT OF CREDITORS. The Borrower or any of
its Subsidiaries shall make an assignment for the benefit of its creditors,
or shall admit its insolvency or shall fail to pay its debts generally as
such debts become due.
9.6 BANKRUPTCY. Any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, shall be
filed by or against the Borrower or
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any of its Subsidiaries or any proceeding shall be commenced by or against the
Borrower or any of its Subsidiaries with respect to relief under the provisions
of any other applicable bankruptcy, insolvency or other similar law of the
United States or any State providing for the reorganization, winding-up or
liquidation of Persons or an arrangement, composition, extension or adjustment
with creditors; PROVIDED, HOWEVER, that no Event of Default shall be deemed to
have occurred if any such involuntary petition or proceeding shall be
discharged within sixty days of its filing or commencement.
9.7 APPOINTMENT OF RECEIVER; LIQUIDATION. A receiver or trustee
shall be appointed for the Borrower or any of its Subsidiaries or for any
substantial part of its assets, and such receiver or trustee shall not be
discharged within sixty days of his appointment; any proceedings shall be
instituted for the dissolution or the full or partial liquidation of the
Borrower or any of its Subsidiaries and such proceedings shall not be
dismissed or discharged within sixty days of their commencement; or the
Borrower or any of its Subsidiaries shall discontinue its business.
9.8 JUDGMENTS. The Borrower or any of its Subsidiaries shall
incur non-appealable final judgments for the payment of money aggregating
at any one time in excess of $250,000 (to the extent not covered by
insurance) and shall not discharge (or make adequate provision for the
discharge of) the same within a period of thirty days unless, pending
further proceedings, execution thereon has been effectively stayed; or a
non-monetary judgment or order shall be rendered against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect, and there shall be any period of thirty
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect.
9.9 IMPAIRMENT OF COLLATERAL; INVALIDATION OF ANY LOAN DOCUMENT.
(i) A creditor of the Borrower or any of its Subsidiaries shall obtain
possession of any significant portion of the collateral for the Obligations
by any means, including, without limitation, levy, distraint, replevin or
self-help, or any creditor shall establish or obtain any right in such
collateral which is equal or senior to a Lien of the Agent, for the benefit
of the Banks, in such collateral; or (ii) any material damage to, or loss,
theft or destruction of, any material collateral for the Loans shall occur,
except to the extent such loss, damage or injury is covered by insurance;
or (iii) the Agent, for the benefit of the Banks, shall cease to have a
first priority perfected lien in all of the issued and outstanding capital
stock of the Borrower's Subsidiaries (other than Atlantic City and Gadsden
except as provided in Section 7.15); or (iv) any Lien granted or created or
purported to be
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granted or created by this Agreement or any Collateral Document shall cease or
fail to be perfected with respect to any significant portion of the collateral
purported to be covered thereby; or (v) this Agreement, any Note or any
Collateral Document ceases to be a legal, valid and binding agreement or
obligation enforceable against any party thereto (including the Banks or the
Agent) in accordance with its terms, or shall be terminated, invalidated, set
aside or declared ineffective or inoperative.
9.10 TERMINATION OF LICENSE OR OPERATING AGREEMENT. The FCC or
any other Licensing Authority shall (a) revoke, terminate, substantially
and adversely modify or fail to renew any material License relating to a
Station, the Muzak Business or the Healthcare Business, or (b) designate
any material License for hearing or commence proceedings to suspend,
revoke, terminate or substantially and adversely modify any such License
and such proceedings shall not be dismissed or discharged within sixty
days; or any Operating Agreement, Muzak Franchise or any other agreement
which is necessary to the operation of a Station, the Muzak Business or the
Healthcare Communications Business shall be revoked or terminated or
materially, adversely modified and not replaced by a substitute acceptable
to the Majority Banks within thirty days of such revocation, termination or
modification.
9.11 CHANGE OF CONTROL. (i) Except as permitted pursuant to
this Agreement, the Borrower shall cease or fail to own, directly or
indirectly, beneficial and legal title to (a) all of the issued and
outstanding capital stock of each of its Subsidiaries which is wholly owned
by it or (b) at least 95%, on a fully diluted basis, of the issued and
outstanding capital stock of Osborn Healthcare Communications, Inc.; or
(ii) Mr. Frank D. Osborn shall, for any reason whatever (including death),
at any time cease to be the chief executive officer of the Borrower, or
shall become physically or mentally disabled or incapacitated (whether
totally or partially) and shall be unable, for a period of more than three
consecutive months, to perform his duties as the chief executive officer of
the Borrower, and within ninety days thereafter the Borrower shall not have
appointed as chief executive officer another Person with comparable skills
and experience in the broadcasting industry; or (iii) Mr. Frank D. Osborn
shall cease, for any reason (other than death), to own and control, both
legally and beneficially, with the power to vote and free and clear of any
Liens, at least 856,668 shares of common stock of the Borrower on a fully
diluted basis (as such number is appropriately adjusted to reflect stock
splits, stock dividends or other similar recapitalization); or (iv) any
Person (or group of Persons) is or becomes the "beneficial owner" (within
the meaning of Rule 13d-3 and 13d-5 under the federal Securities Exchange
Act of 1934, as amended), directly or indirectly, of a percentage of the
common equity interest of the Borrower greater than 33 1/3; or (v) Spears,
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Benzak, Salomon & Ferrel shall have the power to vote or direct the vote of
common equity interests of the Borrower greater than 33 1/3; or (vi) during
any period of twenty-four consecutive months, individuals who at the
beginning of such period constituted the Board of Directors of the Borrower
(together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Borrower was approved by
a majority of the directors then still in office who were either directors
at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office.
9.12 CONDEMNATION. Any court, government or governmental agency
shall condemn, seize or otherwise appropriate, or take custody or control
of any substantial portion of the assets of the Borrower or any of its
Subsidiaries pursuant to a final, non-appealable order unless such taking
could not reasonably be expected to have a Material Adverse Effect.
9.13 CESSATION OF OPERATIONS. The operations of any Station
shall be interrupted at any time for more than forty-eight hours, whether
or not consecutive, during any period of five consecutive days unless (a)
such interruption is covered by insurance sufficient to assure that its per
diem Operating Cash Flow during such period is a least equal to that which
could reasonably have been expected during such period but for the
interruption or (b) such interruption could not reasonably be expected to
have a Material Adverse Effect.
SECTION 10 REMEDIES.
Notwithstanding any contrary provision or inference herein or
elsewhere,
10.1 OPTIONAL DEFAULTS.
If any Event of Default referred to in Sections 9.1-9.4 or 9.8-
9.13 hereof shall occur, the Agent, with the consent of the Majority Banks,
upon written notice to the Borrower, may
(a) terminate the Commitments and the credit hereby
established and forthwith upon such election the obligations of the Banks
to make any further Loans hereunder immediately shall be terminated, and/or
(b) accelerate the maturity of the Loans and all other
Obligations, whereupon all Obligations shall become and thereafter be
immediately due and payable in full without any
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presentment or demand and without any further or other notice of any kind,
all of which are hereby waived by the Borrower.
10.2 AUTOMATIC DEFAULTS. If any Event of Default referred to in
Sections 9.5-9.7 shall occur,
(a) the Commitments and the credit hereby established shall
automatically and forthwith terminate, and the Banks thereafter shall be
under no obligation to grant any further Loans hereunder, and
(b) the principal of and interest on the Notes, then
outstanding, and all of the other Obligations shall thereupon become and
thereafter be immediately due and payable in full, all without any
presentment, demand or notice of any kind, which are hereby waived by the
Borrower.
10.3 PERFORMANCE BY THE BANKS. If at any time the Borrower or
any of its Subsidiaries fails or refuses to pay or perform any material
obligation or duty to any third Person, except for payments which are the
subject of bona fide disputes in the ordinary course of business, the Banks
may, in their sole discretion, but shall not be obligated to, pay or
perform the same on behalf of the Borrower or such Subsidiary, and the
Borrower shall promptly repay all amounts so paid, and all costs and
expenses so incurred. This repayment obligation shall become one of the
Obligations of the Borrower hereunder and shall bear interest at the
Default Interest Rate.
10.4 OTHER REMEDIES. Upon the occurrence of an Event of Default,
the Agent and the Banks may exercise any other right, power or remedy as
may be provided herein, in the Notes or in any other Collateral Document,
or as may be provided at law or in equity, including, without limitation,
the right to recover judgment against the Borrower for any amount due
either before, during or after any proceedings for the enforcement of any
security or any realization upon any security.
10.5 ENFORCEMENT AND WAIVER BY THE BANKS. The Banks shall have
the right at all times to enforce the provisions of this Agreement and all
Collateral Documents in strict accordance with the terms hereof and
thereof, notwithstanding any conduct or custom on the part of the Banks in
refraining from so doing at any time, unless the Banks shall have waived
such enforcement in writing in respect of a particular instance. The
failure of the Banks at any time to enforce their rights under such
provisions shall not be construed as having created a custom or course of
dealing in any way contrary to the specific provisions of this Agreement or
the Collateral Documents, or as having in any way modified or waived the
same. All rights, powers and remedies of the Banks are cumulative and
concurrent and the exercise of one
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right, power or remedy shall not be deemed a waiver or release of any other
right, power or remedy.
SECTION 11 THE AGENT.
11.1 APPOINTMENT. Society is hereby appointed Agent hereunder,
and each of the Banks irrevocably authorizes the Agent to act as the agent
of such Bank. The Agent agrees to act as such upon the express conditions
contained in this Section 11. The Agent shall not have a fiduciary
relationship in respect of any Bank by reason of this Agreement.
11.2 POWERS. The Agent shall have and may exercise such powers
hereunder as are specifically delegated to it by the terms hereof, together
with such powers as are reasonably incidental thereto. The Agent shall not
have any implied duties or any obligation to the Banks to take any action
hereunder except any action specifically provided by this Agreement to be
taken by the Agent.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, affiliates, agents or employees shall be liable to the
Banks or any Bank for any action taken or omitted to be taken by it or them
hereunder or in connection herewith except for its or their own gross
negligence or wilful misconduct. Without limiting the foregoing, neither
the Agent nor any of its directors, officers, affiliates, agents or
employees shall be responsible for, or have any duty to examine (a) the
genuineness, execution, validity, effectiveness, enforceability, value or
sufficiency of this Agreement, any Collateral Document, or any other
document or instrument furnished pursuant to or in connection with this
Agreement or any Collateral Document, (b) the collectibility of any amounts
owed by the Borrower, (c) any recitals, statements, reports,
representations or warranties made in connection with this Agreement or any
Collateral Document, (d) the performance or satisfaction by the Borrower of
any covenant or agreement contained herein or in any Collateral Document,
(e) any failure of any party to this Agreement to receive any communication
sent, including any telegram, teletype, bank wire, cable, radiogram or
telephone message sent or any writing, application, notice, report,
statement, certificate, resolution, request, order, consent letter or other
instrument or paper or communication entrusted to the mails or to a
delivery service, or (f) the assets or liabilities or financial condition
or results of operations or business or credit-worthiness of the Borrower
or any of its Subsidiaries. The Agent shall not be bound to ascertain or
inquire as to the performance or observance of any of the terms of this
Agreement or any Collateral Document.
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11.4 ACTION ON INSTRUCTIONS OF THE BANKS. The Agent shall not be
required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Majority
Banks (subject to Section 11.12 hereof), and such instructions shall be
binding upon all the Banks and all holders of the Notes; PROVIDED, HOWEVER,
that the Agent shall not be required to take any action which exposes it to
personal liability or which is contrary to this Agreement or applicable
law. The foregoing provisions of this Section 11.4 shall not limit in any
way the exercise by any Bank of any right or remedy granted to such Bank
pursuant to the terms of this Agreement or any Collateral Document. Except
as otherwise expressly provided herein, any reference in this Agreement to
action by the Banks shall be deemed to be a reference to the Majority
Banks.
11.5 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any
of its duties as Agent hereunder by or through employees, agents and
attorneys-in-fact and shall not be answerable to the Banks, except as to
money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care.
11.6 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled
to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons,
and, with respect to legal matters, upon the opinion of counsel selected by
the Agent, which counsel may be employees of the Agent, concerning all
matters pertaining to the agency hereby created and its duties hereunder.
11.7 AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Banks agree
to reimburse and indemnify the Agent (which indemnification shall be shared
by the Banks ratably in proportion to their respective Ratable Shares) (a)
for any amounts not reimbursed by the Borrower for which the Agent is
entitled to reimbursement by the Borrower hereunder or under any Collateral
Document, (b) for any other expenses reasonably incurred by the Agent on
behalf of the Banks, in connection with the preparation, execution,
delivery, administration, amendment or enforcement hereof or of any of the
Collateral Documents and (c) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement, any Collateral Document or any other document
related hereto or thereto or the transactions contemplated hereby or the
enforcement of any of the terms hereof
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or thereof or of any such other documents, PROVIDED that no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent.
11.8 RIGHTS AS A BANK. With respect to its Ratable Share of the
Commitments, the Loans made by it and the Notes issued to it, the Agent
shall have the same rights and powers hereunder as any Bank and may
exercise the same as though it were not the Agent, and the term "Bank" or
"Banks" shall, unless the context otherwise indicates, include the Agent in
its individual capacity. The Agent may accept deposits from, lend money
to, and generally engage in any kind of banking or trust business with the
Borrower or any of its Subsidiaries as if it were not the Agent hereunder.
11.9 BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and
based on the financial statements prepared by the Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Collateral
Documents. Each Bank also acknowledges that it will, independently and
without reliance upon the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Collateral Documents. The Agent shall
not be required to keep the Banks informed as to the performance or
observance by the Borrower and its Subsidiaries of this Agreement or any
other document referred to or provided for herein or to inspect the
properties or books of the Borrower or any of its Subsidiaries. Except for
notices, reports and other documents and information expressly required to
be furnished to the Banks by the Agent hereunder, the Agent shall not have
any duty or responsibility to provide any Bank with any credit or other
information concerning the affairs, financial condition or business of the
Borrower or any of its Subsidiaries which may come into its possession.
11.10 SUCCESSOR AGENT. The Agent may resign at any time by
giving written notice thereof to the Banks. Upon any such resignation, the
Majority Banks (with the consent of the Borrower, if at the time of such
resignation no Event of Default exists, which consent shall not be
unreasonably withheld) shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Majority Banks
(with the consent of the Borrower to the extent required) and shall have
accepted such appointment within thirty days after the notice of
resignation, then the retiring Agent may appoint a successor Agent. Such
successor Agent shall be a commercial bank having capital and retained
earnings of at least $500,000,000. Upon the acceptance of any appointment
as the Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed
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to and become vested with all the rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation
hereunder as the Agent, the provisions of this Section 11 shall continue
in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent hereunder.
11.11 RATABLE SHARING. All principal and interest payments on
Loans and commitment fees received by the Agent shall be remitted to the
Banks in accordance with their Ratable Shares. Any amounts received by the
Agent or any other Bank upon the sale of any collateral for the Loans or
upon the exercise of any remedies hereunder or under any of the Collateral
Documents or upon the exercise of any right of setoff shall be remitted to
the Banks in accordance with their Ratable Shares; PROVIDED, HOWEVER, that,
solely for purposes of the sharing of any amounts received by the Agent or
any other Bank, if at the time of any such receipt the Borrower has
defaulted under any agreements regarding Rate Hedging Obligations entered
into pursuant to Section 7.12 hereof with any Bank or an Affiliate of any
Bank, such Bank's Ratable Share shall be proportionately increased and the
Ratable Shares of the other Banks shall be proportionately decreased based
upon the amount due to such Bank pursuant to such agreements. If any Bank
shall obtain any payment hereunder (whether voluntary, involuntary, through
exercise of any right of set-off or otherwise) in excess of its Ratable
Share, then such Bank shall immediately remit such excess to the other
Banks pro rata.
11.12 ACTIONS BY THE AGENT AND THE BANKS. The Agent shall take
formal action only upon the agreement of the Majority Banks; PROVIDED,
HOWEVER, that if the Agent gives notice to the Banks of a Possible Default
or an Event of Default, and the Majority Banks cannot agree (which
agreement shall not be unreasonably withheld) on a mutual course of action
within thirty days following such notice, the Agent may (but shall not be
required to) pursue such legal rights and remedies against the Borrower as
it deems necessary and appropriate to protect the Banks and any collateral
under the circumstances.
SECTION 12 MISCELLANEOUS.
12.1 CONSTRUCTION. The provisions of this Agreement shall be in
addition to those of the Collateral Documents and to those of any other
guaranty, security agreement, note or other evidence of the liability
relating to the Borrower held by the Banks, all of which shall be construed
as complementary to each other. Nothing contained herein shall prevent the
Agent or the Banks from enforcing any or all of such instruments in
accordance with their respective terms. Each right, power or privilege
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specified or referred to in this Agreement or in any Collateral Document is
in addition to any other rights, powers or privileges that the Agent or the
Banks may otherwise have or acquire by operation of law, by other contract
or otherwise. No course of dealing in respect of, nor any omission or
delay in the exercise of, any right, power or privilege by the Agent or the
Banks shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any further or other exercise thereof or of any
other, as each right, power or privilege may be exercised independently or
concurrently with others and as often and in such order as the Agent or the
Banks may deem expedient. Notwithstanding any other provision of this
Agreement, the Borrower shall not be required to pay any amount of interest
pursuant hereto which is in excess of the maximum amount permitted by law.
12.2 FURTHER ASSURANCE. From time to time, the Borrower shall
execute and deliver to the Banks such additional documents and take such
actions as the Agent may reasonably require to carry out the purposes of
this Agreement or any of the Collateral Documents, or to preserve and
protect the rights of the Banks hereunder or thereunder.
12.3 EXPENSES OF THE AGENT AND THE BANKS; INDEMNIFICATION.
(a) Whether or not the transactions contemplated by this
Agreement are consummated, the Borrower shall pay the costs and expenses,
including the reasonable fees and disbursements of the Agent's special
counsel, incurred by the Banks in connection with (i) the negotiation,
preparation, amendment or enforcement of this Agreement and the Collateral
Documents and any amendment or modification thereof and the closing of the
transactions contemplated hereby and thereby; (ii) the perfection of the
Liens granted pursuant hereto; (iii) the making of the Loans hereunder;
(iv) the negotiation, preparation or enforcement of any other document in
connection with this Agreement, the Collateral Documents or the Loans made
hereunder; (v) any proceeding brought or formal action taken by the Banks
to enforce any provision of this Agreement or any Collateral Document, or
to enforce or exercise any right, power or remedy hereunder or thereunder;
or (vi) any action which may be taken or instituted by any Person against
any Bank as a result of any of the foregoing. The estimated fees and
expenses of the Agent's special counsel through the Closing shall be paid
on the Closing Date. If any taxes, charges or fees shall be payable, or
ruled to be payable, to any state or Federal authority in respect of the
execution, delivery or performance of this Agreement, the Notes or any
other Collateral Document by reason of any existing or hereinafter enacted
Federal or state statute, the Borrower shall pay all such taxes, charges or
fees, including interest and
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penalties thereon, if any, and will indemnify and hold harmless the Banks
against any liability in connection therewith.
(b) The Borrower hereby indemnifies and holds harmless the
Agent and each Bank and their respective directors, officers, employees,
agents, counsel, subsidiaries and affiliates (the "Indemnified Persons")
from and against any and all losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind or nature whatsoever (including, without limitation, reasonable
attorneys fees) which may be imposed on, incurred by, or asserted against
any Indemnified Person in any way relating to or arising out of this
Agreement, the Collateral Documents, or any of them, or the Loans made
pursuant hereto, or the use of the proceeds thereof or any of the
transactions contemplated hereby or thereby or the ownership or operation
of the Stations, the Muzak Business, the Healthcare Communications Business
or any of the other assets of the Borrower or its Subsidiaries or the
breach by the Borrower or any of its Subsidiaries of any of the
representations, warranties, covenants and agreements contained herein or
in any Collateral Document; PROVIDED, HOWEVER, that the Borrower shall not
be liable to any Indemnified Person, if there is a final judicial
determination that such losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulted solely from the gross negligence or willful misconduct of such
Indemnified Person.
12.4 NOTICES. Except as otherwise expressly provided herein, all
notices, demands and requests required or permitted to be given under the
provisions of this Agreement shall be in writing and shall be deemed to
have been duly delivered and received (a) on the date of personal delivery,
(b) on the date of receipt (as shown on the return receipt) if mailed by
registered or certified mail, postage prepaid and return receipt requested,
(c) on the next business day after delivery to a courier service that
guarantees delivery on the next business day if the conditions to the
courier's guarantee are complied with, or (d) on the date of receipt by
telecopy, in each case addressed as follows:
TO THE AGENT:
Society National Bank
127 Public Square
M/C OH-01-127-0602
Cleveland, Ohio 44114-1306
Attention: Media Finance Division
Telecopy: 216-689-4666
Page 87
Copy to:
Timothy J. Kelley, Esq.
Dow, Lohnes & Albertson
1255 Twenty-third Street, N.W.
Suite 500
Washington, D.C. 20037
Telecopy: 202-857-2900
TO THE BANKS, AT THE ADDRESSES LISTED ON THE SIGNATURE PAGES
HEREOF OR IN THE ASSIGNMENT INSTRUMENT DELIVERED PURSUANT TO
SECTION 12.7(b)
TO THE BORROWER OR ANY OF ITS SUBSIDIARIES:
Osborn Communications Corporation
130 Mason Street
Greenwich, Connecticut 06830
Attention: Thomas S. Douglas
Telecopy: 203-629-1749
Copy to:
Robert M. Hirsh, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Telecopy: 212-759-3990
or to such other address or addresses as the party to which such notice is
directed may have designated in writing to the other parties hereto.
12.5 WAIVER AND RELEASE BY THE BORROWER. Neither the Agent, nor
any Bank, nor any affiliate, officer, director, employee, attorney, or
agent of the Agent or any Bank shall have any liability with respect to,
and the Borrower hereby waives, releases and agrees not to sue any of them
upon, any claim for any special, indirect, incidental or consequential
damages suffered or incurred by the Borrower or any of its Subsidiaries in
connection with, arising out of, or in any way related to, this Agreement
or any of the Collateral Documents, or any of the transactions contemplated
by this Agreement or any of the Collateral Documents, unless arising from
the gross negligence or willful misconduct of such Person as determined by
a final judgment of a court of competent jurisdiction.
12.6 RIGHT OF SET OFF. Upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set-
off and apply any and all deposits (general or special, time or demand,
provisional or
Page 88
final) at any time held and other indebtedness at any time
owing by such Bank to or for the credit or the account of the Borrower or
any of its Subsidiaries against any and all of the obligations of the
Borrower or any of its Subsidiaries now or hereafter existing hereunder or
under any Collateral Document, irrespective of whether or not such Bank
shall have made any demand under any Collateral Document and although such
obligations may be unmatured. Such Bank agrees promptly to notify the
Borrower after any such set-off and application made by such Bank;
PROVIDED, HOWEVER, that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Banks
under this Section are in addition to other rights and remedies (including
without limitation, other rights of set-off) which the Banks may have. The
Borrower agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in the Notes may
exercise rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation were a
direct creditor of the Borrower or any of its Subsidiaries in the amount of
such participation.
12.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; PROVIDED, HOWEVER, that the Borrower may not assign
or transfer any of its rights or obligations hereunder or under the Notes
without the prior written consent of all of the Banks and the Agent.
(b) Each Bank may assign all or any part of any of its
Loans, its Notes, and its share of the Commitments with the consent of the
Borrower and the Agent, which consent shall not be unreasonably withheld;
PROVIDED that (i) no such consent by the Borrower shall be required (w) for
any such assignment by any Bank to an Affiliate of such Bank, (x) if, at
the time of such assignment, an Event of Default has occurred and is
continuing, (y) in the case of any assignment to another branch of a
principal office of a Bank, or (z) for any such assignment to another Bank
or an Affiliate of another Bank; and (ii) any such partial assignment shall
be in an amount at least equal to $10,000,000. Upon execution and delivery
by the assignor and the assignee to the Borrower and the Agent of an
instrument in writing pursuant to which such assignee agrees to become a
"Bank" hereunder (if not already a Bank) having the share of the
Commitments and Loans specified in such instrument, and upon consent
thereto by the Borrower, to the extent required above, and the Agent, the
assignee shall have, to the extent of such assignment (unless otherwise
provided in such assignment with the consent of the Borrower and the
Agent), the obligations, rights and benefits of a Bank hereunder holding the
share of the Commitments and Loans (or portions thereof) assigned to it (in
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addition to the share of the Commitments and Loans, if any, theretofore
held by such assignee) and the assigning Bank shall, to the extent of such
assignment, be released from the share of the Commitments and the
obligations hereunder so assigned.
(c) Upon its receipt of an assignment pursuant to Section
12.7(b) above duly executed by an assigning Bank and the assignee, together
with any Notes subject to such assignment and the Agent's standard
processing and recordation fee of $2,500, the Agent shall, if such
assignment has been completed, accept such assignment. Within five
business days after receipt of such notice, the Borrower, at Borrower's own
expense, shall execute and deliver to the Agent in exchange for the
surrendered Notes new Notes to the order of the assignee in an amount equal
to the share of the Commitments and of the Loans assumed by the assignee
and, if the assigning Bank has retained a portion of the Commitments and
the Loans hereunder, new Notes to the order of the assigning Bank in an
amount equal to the share of the Commitments and the Loans retained by it
hereunder. Such new Notes shall be in an aggregate principal amount equal
to the aggregate principal amount of such surrendered Notes, shall be dated
the effective date of such assignment and shall otherwise be in
substantially the form of EXHIBITS A AND B hereto, as the case may be.
Cancelled Notes shall be returned to the Borrower.
(d) A Bank may sell or agree to sell to one or more other
Persons (each, a "Participant") a participation in all or any part of any
Loans held by it, or in its share of the Commitments. Except as otherwise
provided in the last sentence of this Section 12.7(d), no Participant shall
have any rights or benefits under this Agreement or any Note or any other
Collateral Documents (the Participant's rights against such Bank in respect
of such participation to be those set forth in the agreements executed by
such Bank in favor of the Participant). All amounts payable by the
Borrower to any Bank under Section 2 hereof in respect of Loans held by it,
and its share of the Commitments, shall be determined as if such Bank had
not sold or agreed to sell any participations in such Loans and share of
the Commitments, and as if such Bank were funding each of such Loan and its
share of the Commitments in the same way that it is funding the portion of
such Loan and its share of the Commitments in which no participations have
been sold. In no event shall a Bank that sells a participation agree with
the Participant to take or refrain from taking any action hereunder or
under any other Collateral Document except that such Bank may agree with
the Participant that it will not, without the consent of the Participant,
agree to any modification, supplement or waiver hereof or of any of the
other Collateral Documents to the extent that the same, under Section 12.12
hereof, requires the consent of each Bank. The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.7 through 2.13
and Section 12.6 with respect to its participating interest.
Page 90
(e) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.7, any Bank may
assign and pledge all or any portion of its Loans and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release the
assigning Bank from its obligations hereunder.
(f) A Bank may furnish any information concerning the
Borrower and its Subsidiaries in the possession of such Bank from time to
time to assignees and participants (including prospective assignees and
participants).
(g) Anything in this Section 12.7 to the contrary
notwithstanding, no Bank may assign or participate any interest in any Loan
held by it hereunder to the Borrower or any of its Affiliates without the
prior written consent of all of the Banks.
12.8 APPLICABLE LAW. This Agreement and the Collateral
Documents, and the duties, rights, powers and remedies of the parties
hereto and thereto, shall be construed in accordance with, and governed by,
the laws of the State of Ohio, without regard to the conflicts of laws
provisions thereof, except to the extent that any Collateral Document
provides that the local law of another jurisdiction governs the grant,
perfection or enforcement of the Liens granted pursuant to such Collateral
Document.
12.9 BINDING EFFECT AND ENTIRE AGREEMENT. This Agreement shall
inure to the benefit of, and shall be binding upon, the respective
successors and permitted assigns of the parties hereto. This Agreement,
the Exhibits hereto, which are hereby incorporated in this Agreement, and
the Collateral Documents constitute the entire agreement among the parties
on the subject matter hereof.
12.10 COUNTERPARTS. This Agreement may be executed in any number
of counterparts or duplicate originals, each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.
12.11 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein or in any Collateral Document
shall survive any investigation and the Closing and shall continue in full
force and effect so long as any of the Obligations remain to be performed
or paid or the Banks have any obligation to advance sums hereunder.
12.12 MODIFICATION. Any term of this Agreement or of the Notes
may be amended and the observance of any term of this
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Agreement or of the Notes may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Borrower and the Majority Banks; PROVIDED, HOWEVER, that no such
amendment or waiver or other action shall, without the prior written consent of
all of the Banks or the holders of all of the Notes at the time outstanding,
(a) extend the maturity or reduce the principal amount of, or reduce the
rate or extend the time of payment of interest on, or reduce the amount or
extend the time of payment of any principal of, any Note, (b) reduce the
amount or extend the time of payment of the commitment fees, (c) change the
Commitments or the Ratable Share of any Bank (other than any change in
Commitments or Ratable Share resulting from the sale of a participation in
or assignment of any Bank's interest in the Commitments and Loans in
accordance with subsection 12.7), (d) change the percentage referred to in
the definition of "Majority Banks" contained in Section 1.1, (e) amend this
Section 12.12, (f) amend or waive compliance with Section 2.6(b), or (g)
release any collateral for the Loans except in connection with a sale
permitted pursuant to Section 8.10; and PROVIDED, FURTHER, that
notwithstanding the foregoing provisions of this Section 12.12, this
Agreement and the Notes may be amended or modified in the manner
contemplated by Section 12.7 for the purpose of permitting any Bank to
assign its interest, rights and obligations hereunder to another bank or
financial institution, if the appropriate assignment agreement or
counterparts thereof are executed by the Borrower (to the extent required),
the Agent and the appropriate Bank assignor and assignee. Any amendment or
waiver effected in accordance with this Section 12.12 shall be binding upon
each holder of any Note at the time outstanding, each future holder of any
Note and the Borrower.
12.13 SEPARABILITY. If any one or more of the provisions
contained in this Agreement or any Collateral Document should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of all remaining provisions shall not in any way be affected
or impaired. Any provision of this Agreement 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.
12.14 SECTION HEADINGS. The section headings contained herein
are for reference purposes only and shall not in any way affect the meaning
or interpretation of this Agreement.
12.15 ENFORCEMENT. The Borrower (a) hereby irrevocably submits
to the jurisdiction of the state courts of the State of Ohio and to the
jurisdiction of the United States District Court for the Northern District
of Ohio, for the purpose
Page 92
of any suit, action or other proceeding arising out of or based upon
this Agreement or any Collateral Document or the subject matter
hereof or thereof brought by the Banks or their successors or
assigns and (b) hereby waives, and agrees not to assert, by way of
motion, as a defense, or otherwise, in any such suit, action or proceeding,
any claim that it is not subject personally to the jurisdiction of the
above-named courts, that its property is exempt or immune from attachment
or execution, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is
improper or that this Agreement or any Collateral Document or the subject
matter hereof or thereof may not be enforced in or by such court, and (c)
hereby waives and agrees not to seek any review by any court of any other
jurisdiction which may be called upon to grant an enforcement of the
judgment of any such Ohio state or federal court. The Borrower hereby
consents to service of process by registered mail at the address to which
notices are to be given. The Borrower agrees that its submission to
jurisdiction and its consent to service of process by mail is made for the
express benefit of the Banks. Final judgment against the Borrower in any
such action, suit or proceeding may be enforced in other jurisdictions by
suit, action or proceeding on the judgment, or in any other manner provided
by or pursuant to the laws of such other jurisdiction; PROVIDED, HOWEVER,
that the Banks may at their option bring suit, or institute other judicial
proceedings, against the Borrower or any of its assets in any state or
federal court of the United States or of any country or place where the
Borrower, or such assets, may be found.
12.16 TERMINATION. This Agreement shall terminate when all
amounts due hereunder, under the Notes and under each Collateral Document
shall have been indefeasibly paid in full in cash and all other Obligations
hereunder or thereunder shall have been fully performed, so long as the
Banks have no further obligation to advance sums hereunder. Upon such
termination, at the request of the Borrower, the Agent and the Banks shall
release all Liens granted herein or in any Collateral Document at the
Borrower's expense and return all collateral held pursuant hereto or to any
Collateral Document without recourse or representation. Notwithstanding
anything to the contrary contained herein, each expense reimbursement and
indemnification provision in this Agreement or in any Collateral Document
shall survive the repayment in full of the Loans and the termination of
this Agreement.
12.17 FCC COMPLIANCE.
(a) Notwithstanding anything herein or in any of the
Collateral Documents to the contrary, but without limiting or waiving the
Borrower's or any of its Subsidiaries' obligations hereunder or under any
of the Collateral Documents, the Agent's and the Banks' remedies hereunder
and under the Collateral
Page 93
Documents are subject to compliance with the Communications Act of 1934, as
amended, and to all applicable rules, regulations and policies of the FCC, and
neither the Agent nor the Banks will take any action pursuant to this
Agreement or any of the Collateral Documents that will constitute or result in
any assignment of a License issued by the FCC or any change of control of the
Borrower or any of its Subsidiaries which owns any FCC License 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. This Agreement, the Collateral Documents and the transactions
contemplated hereby and thereby do not and will not constitute, create, or
have the effect of constituting or creating, directly or indirectly, actual or
practical ownership of the Borrower or any of its Subsidiaries by the Agent
or the Banks or control, affirmative or negative, direct or indirect, of
the Borrower or any of its Subsidiaries by the Agent or the Banks, over the
management or any other aspect of the operation of the Borrower or any of
its Subsidiaries, which ownership and control remain exclusively and at all
times in the stockholders and directors of the Borrower and its
Subsidiaries until such time as the Banks have complied with such law,
rules, regulations and policies.
(b) Furthermore, the parties acknowledge their intent that,
upon the occurrence of an Event of Default, the Banks shall receive, to the
fullest extent permitted by applicable law and governmental policy
(including, without limitation, the rules, regulations and policies of the
FCC), all rights necessary or desirable to obtain, use or sell the Licenses
and the collateral securing the Loans, and to exercise all remedies
available to them under this Agreement, the Collateral Documents, the
Uniform Commercial Code or other applicable law. Therefore, the parties
agree that, in the event of changes in law or governmental policy occurring
after the date hereof that affect in any manner the Agent's or the Banks'
rights of access to, or use or sale of, the Licenses or such collateral, or
the procedures necessary to enable the Agent or the Banks to obtain such
rights of access, use or sale, the Agent, the Banks and the Borrower shall
amend this Agreement and the Collateral Documents in such manner as the
Agent shall reasonably request, in order to provide the Agent and the Banks
such rights to the greatest extent possible consistent with then applicable
law and governmental policy.
12.18 JURY TRIAL WAIVER. THE BORROWER AND THE BANKS EACH WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE BANKS AND THE BORROWER
ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR
THE NOTES OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN
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CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT
MATTER OF THIS TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. THE BORROWER, THE AGENT AND THE BANKS ACKNOWLEDGE THAT THIS WAIVER
IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
THE BORROWER, THE AGENT AND THE BANKS FURTHER WARRANT AND REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT
IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (UNLESS EXPRESSLY
MODIFIED IN WRITING BY ALL PARIES HERETO), AND THE WAIVER SHALL APPLY TO
ANY SUBSEQUENT AMENDMENTS, THE COLLATERAL DOCUMENTS, OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
12.19 MARSHALING; PAYMENTS SET ASIDE. The Agent and the Banks
shall not be under any obligation to marshal any assets in favor of the
Borrower or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Borrower or any of its Subsidiaries
makes a payment or payments to the Banks or the Agent or any Bank enforces
its security interest or exercises its rights of setoff, and such payment
or payments or the process of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law
or equitable cause, then to the extent of such recovery, the Obligations or
part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement had not occurred.
12.20 CONFIDENTIALITY. In handling any information which the
Borrower has identified to the Agent and the Banks as being confidential,
the Agent and the Banks shall exercise the same degree of care that they
exercise with respect to their own proprietary information of the same
types to maintain the confidentiality of any non-public information thereby
received or received pursuant to this Agreement except that disclosure of
such information may be made (a) to the subsidiaries or affiliates of the
Agent or any Bank in connection with their present or prospective business
relations with the Borrower or any of its Subsidiaries, (b) to the Agent's
or any Bank's business and legal advisors, (c) to prospective transferees or
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purchasers of any interest in the Loans, provided that they have agreed
to abide by confidentiality restrictions similar to those set forth in this
Section, (d) as required by law, regulations, rule or order, subpoena,
judicial order or similar order and (e) as may be required in connection
with the examination, audit or similar investigation of the Agent or any
Bank.
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TO WITNESS THE ABOVE, the Borrower, the Banks and the Agent have
caused this Loan Agreement to be executed by their respective
representatives thereunto duly authorized as of the date first above
written.
BORROWER:
OSBORN COMMUNICATIONS CORPORATION
By:___________________________
Name: Thomas S. Douglas
Title: Senior Vice President
BANKS:
SOCIETY NATIONAL BANK
By:___________________________
Name: Kenneth J. Keeler
Title: Vice President
Address: 127 Public Square
Cleveland, Ohio 44114-1306
Attention: Media Finance Division
AGENT:
SOCIETY NATIONAL BANK
By:___________________________
Name: Kenneth J. Keeler
Title: Vice President
LIST OF EXHIBITS
Exhibit A Form of Reducing Note
Exhibit B Form of Acquisition Note
Exhibit C Financial Statements
Exhibit D Projections
Exhibit E Subsidiaries and Capitalization
Exhibit F Proceedings and Litigation
Exhibit G Liens and Indebtedness
Exhibit H Consents to be Obtained
Exhibit I Schedule of Contracts, Commitments, Material
Agreements, licenses and Consents
Exhibit J ERISA Liabilities and Plans
Exhibit K Real Estate
Exhibit L Environmental Matters
Exhibit M Form of Compliance Certificate