Exhibit 10.1
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AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
July 9, 2002
among
LBI MEDIA, INC.,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO,
FLEET NATIONAL BANK,
as Administrative Agent,
FLEET SECURITIES, INC.,
as Sole Lead Arranger
GENERAL ELECTRIC CAPITAL CORPORATION
and
U.S. BANK, N.A.,
as Co- Syndication Agents,
and
CIT LENDING SERVICES CORPORATION
and
SUNTRUST BANK,
as Co-Documentation Agents
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TABLE OF CONTENTS
Page
Article 1 Definitions .......................................................... 1
1.1 Defined Terms ........................................................ 1
1.2 Classification of Loans and Borrowings ............................... 37
1.3 Terms Generally ...................................................... 37
1.4 Accounting Terms; GAAP ............................................... 38
Article 2 The Credits .......................................................... 39
2.1 Revolving Credit Commitments ......................................... 39
2.2 Loans and Borrowings ................................................. 41
2.3 Requests for Borrowings .............................................. 41
2.4 Letters of Credit .................................................... 43
2.5 Funding of Borrowings ................................................ 47
2.6 Interest Elections ................................................... 48
2.7 Termination and Reduction of Commitments ............................. 49
2.8 Mitigation Obligations; Replacement of Lenders ....................... 51
2.9 Repayment of Loans; Evidence of Debt ................................. 52
2.10 Prepayment of Loans .................................................. 53
2.11 Fees ................................................................. 56
2.12 Interest ............................................................. 58
2.13 Alternate Rate of Interest ........................................... 59
2.14 Increased Costs ...................................................... 59
2.15 Break Funding Payments ............................................... 60
2.16 Taxes ................................................................ 61
2.17 Payments Generally: Pro Rata Treatment; Sharing of Set-Offs .......... 62
Article 3 Guarantee by Guarantors .............................................. 64
3.1 The Guarantee ........................................................ 64
3.2 Obligations Unconditional ............................................ 65
3.3 Reinstatement ........................................................ 65
3.4 Subrogation .......................................................... 66
3.5 Remedies ............................................................. 66
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TABLE OF CONTENTS
(continued)
Page
3.6 Continuing Guarantee ........................................ 66
3.7 Rights of Contribution ...................................... 66
3.8 General Limitation on Guarantee Obligations ................. 67
3.9 Waivers ..................................................... 67
Article 4 Representations and Warranties .............................. 68
4.1 Organization; Powers ........................................ 68
4.2 Authorization; Enforceability ............................... 68
4.3 Governmental Approvals; No Conflicts ........................ 68
4.4 Financial Condition; No Material Adverse Change ............. 69
4.5 Properties .................................................. 70
4.6 Litigation and Environmental Matters ........................ 71
4.7 Compliance with Laws and Agreements ......................... 71
4.8 Investment and Holding Company Status ....................... 71
4.9 Taxes ....................................................... 71
4.10 ERISA ....................................................... 72
4.11 Disclosure .................................................. 72
4.12 Ownership and Capitalization ................................ 72
4.13 Subsidiaries ................................................ 72
4.14 Material Indebtedness, Liens and Agreements ................. 73
4.15 Permits and Licenses ........................................ 74
4.16 Federal Reserve Regulations ................................. 74
4.17 Burdensome Restrictions ..................................... 75
4.18 Force Majeure ............................................... 75
4.19 Labor and Employment Matters. ............................... 75
4.20 Subchapter S Election and QSSS Election ..................... 76
4.21 Senior Indebtedness ......................................... 76
Article 5 Conditions .................................................. 76
5.1 Effective Time .............................................. 76
5.2 Each Extension of Credit .................................... 83
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TABLE OF CONTENTS
(continued)
Page
5.3 Consummation of Acquisitions .............................................. 84
Article 6 Affirmative Covenants ..................................................... 85
6.1 Financial Statements and Other Information ................................ 85
6.2 Notices of Material Events ................................................ 87
6.3 Existence; Conduct of Business ............................................ 88
6.4 Payment of Obligations .................................................... 88
6.5 Maintenance of Properties; Insurance ...................................... 88
6.6 Books and Records; Inspection Rights ...................................... 89
6.7 Fiscal Year ............................................................... 89
6.8 Compliance with Laws, Maintenance of FCC Licenses ......................... 89
6.9 Use of Proceeds ........................................................... 89
6.10 Certain Obligations Respecting Guarantors and Collateral Security ......... 90
6.11 ERISA ..................................................................... 91
6.12 Environmental Matters; Reporting .......................................... 91
6.13 Conforming Leasehold Interests; Matters Relating to Real Property
Collateral ................................................................ 92
6.14 Hedging Agreements ........................................................ 94
6.15 Post-Closing Obligations .................................................. 94
Article 7 Negative Covenants ........................................................ 95
7.1 Indebtedness .............................................................. 95
7.2 Liens ..................................................................... 96
7.3 Contingent Liabilities .................................................... 98
7.4 Fundamental Changes; Asset Sales .......................................... 98
7.5 Investments; Hedging Agreements ........................................... 103
7.6 Restricted Junior Payments ................................................ 106
7.7 Transactions with Affiliates .............................................. 107
7.8 Restrictive Agreements .................................................... 107
7.9 Sale-Leaseback Transactions ............................................... 108
7.10 Certain Financial Covenants ............................................... 108
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TABLE OF CONTENTS
(continued)
Page
7.11 Lines of Business; Restrictions on the Borrower ....................... 109
7.12 Subordinated Indebtedness ............................................. 110
7.13 Modifications of Certain Documents .................................... 110
7.14 Empire Burbank ........................................................ 110
7.15 Holding Company Restrictions .......................................... 111
7.16 License Subsidiaries .................................................. 112
Article 8 Events of Default ..................................................... 113
8.1 Events of Default ..................................................... 113
Article 9 The Administrative Agent .............................................. 117
9.1 Appointment and Authorization ......................................... 117
9.2 Administrative Agent's Rights as Lender ............................... 117
9.3 Duties As Expressly Stated ............................................ 117
9.4 Reliance By Administrative Agent ...................................... 118
9.5 Action Through Sub-Agents ............................................. 119
9.6 Resignation of Administrative Agent and Appointment of Successor
Administrative Agent .................................................. 119
9.7 Lenders' Independent Decisions ........................................ 119
9.8 Indemnification ....................................................... 120
9.9 Consents Under Other Loan Documents ................................... 120
9.10 The Agents ............................................................ 120
Article 10 Miscellaneous ......................................................... 120
10.1 Notices ............................................................... 120
10.2 Waivers; Amendments ................................................... 121
10.3 Expenses; Indemnity; Damage Waiver .................................... 123
10.4 Successors and Assigns ................................................ 124
10.5 Survival .............................................................. 128
10.6 Counterparts; Integration; References to Agreement; Effectiveness ..... 128
10.7 Severability .......................................................... 128
10.8 Right of Setoff ....................................................... 128
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TABLE OF CONTENTS
(continued)
Page
10.9 Governing Law; Jurisdiction; Consent to Service of Process ......... 129
10.10 WAIVER OF JURY TRIAL ............................................... 129
10.11 Headings ........................................................... 130
10.12 Release of Collateral and Guarantees ............................... 130
10.13 Confidentiality .................................................... 130
10.14 Continued Effectiveness; No Novation ............................... 131
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SCHEDULES & EXHIBITS
Schedule 2.1 List of Lenders and Revolving Credit Commitments
Schedule 4.3 Governmental Approval
Schedule 4.4 Financial Condition; No Material Adverse Change
Schedule 4.5 Properties
Schedule 4.6 Litigation and Environmental Matters
Schedule 4.7 Compliance with Laws and Agreements
Schedule 4.9 Taxes
Schedule 4.11 Management Structure
Schedule 4.12 Organization; Capitalization; Subsidiaries
Schedule 4.13 Subsidiaries
Schedule 4.14 Material Indebtedness, Liens and Agreements
Schedule 4.15 FCC Licenses
Schedule 4.19 Labor and Employment Matters
Schedule 7.2(b) Permitted Liens
Schedule 7.7 Transactions with Affiliates
Schedule 7.8 Restrictive Agreements
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Amended and Restated Security Agreement/
Schedule I - Perfection Certificate
Exhibit C Form of Confirmation of Pledge Agreement
Exhibit D-1 Form of Borrowing Request
Exhibit D-2 Form of Interest Election Request
Exhibit E Form of Lender Joinder Agreement
Exhibit F Form of Confirmation of Hazardous Materials Indemnity Agreement
Exhibit G Forms of Solvency Certificate
Exhibit H Form of Mortgage and Security Agreement
Exhibit I Form of Leasehold Mortgage
Exhibit J-1 Form of Landlord Waiver and Consent
Exhibit J-2 Form of Licensor Consent
Exhibit K-1 Form of Opinion of O'Melveny & Myers LLP
Exhibit K-2 Form of Opinion of Gilchrist & Rutter
Exhibit K-3 Form of Opinion of Strasburger & Price
Exhibit L Form of Opinion of FCC Counsel
Exhibit M Form of Assignment and Acceptance
Exhibit N Form of Compliance Certificate
Exhibit O Form of Confirmation of Subordination Agreements
Exhibit P Form of Control Agreement
Exhibit Q Form of Existing Mortgage Amendment
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 9, 2002 (this
"Agreement"), among LBI MEDIA, INC. (formerly known as LBI Holdings, Inc.), THE
GUARANTORS PARTY HERETO, THE LENDERS PARTY HERETO, FLEET NATIONAL BANK, as
Administrative Agent, FLEET SECURITIES, INC., as Sole Lead Arranger, GENERAL
ELECTRIC CAPITAL CORPORATION and U.S. BANK, N.A., as Co-Syndication Agents, and
CIT LENDING SERVICES CORPORATION and SUNTRUST BANK, as Co-Documentation Agents.
This Agreement amends, restates and supersedes, in its entirety, the Credit
Agreement dated as of March 20, 2001 among the Borrower, the guarantors party
thereto, the lenders party thereto, the Administrative Agent, and Union Bank of
California, N.A., as Syndication Agent, and CIT Lending Services Corporation and
General Electric Capital Corporation, as Co-Documentation Agents (as amended
from time to time prior to the date hereof, the "Existing Credit Agreement").
The parties hereto agree as follows:
ARTICLE 1
Definitions
1.1 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
"Acquisition" means any transaction, or any series of related
transactions, consummated after the date hereof, by which (i) any Credit Party
acquires the business of, or all or substantially all of the assets of, any firm
or corporation which is not a Credit Party, or any division or station of such
firm or corporation, located in a specific geographic area or areas, whether
through purchase of assets, purchase of stock, merger or otherwise or (ii) any
Person that was not theretofore a Subsidiary of a Credit Party becomes a
Subsidiary of a Credit Party. Notwithstanding anything herein to the contrary,
no Relocation shall be deemed to be an Acquisition.
"Acquisition Date" means, with respect to each of the El Dorado
Acquisitions, the date of the consummation of such Acquisition.
"Additional Mortgage" has the meaning assigned to such term in Section
6.13(b)(i).
"Additional Mortgage Policies" has the meaning assigned to such term in
Section 6.13(b)(vi).
"Additional Mortgaged Property" has the meaning assigned to such term
in Section 6.13(b).
"Adjusted Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Adjusted
Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Adjusted LIBO Rate" means, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means Fleet National Bank in its capacity as
administrative agent for the Lenders hereunder and any successors appointed
pursuant to Section 9.6.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person
that Controls or is Controlled by or is under common Control with the Person
specified. Notwithstanding the foregoing, (a) no individual shall be an
Affiliate solely by reason of his or her being a director, officer or employee
of any Credit Party and (b) none of the Credit Parties shall be Affiliates of
each other.
"Agents" means the Administrative Agent, the Co-Syndication Agents and
the Co-Documentation Agents.
"Alta" means Alta Communications VIII, L.P., Alta-Comm VIII S by S,
LLC, Alta Communications VIII-B, L.P., Alta VIII Associates, LLC, California
State Teachers' Retirement System, UnionBanCalequities, Inc. and BancBoston
Investments Inc., and their respective successors and assigns.
"Alta Subordination Agreement" means the Subordination and
Intercreditor Agreement dated as of the Original Closing Date among Alta and the
Administrative Agent, as amended by the Holdings Amendment and confirmed by the
Confirmation of Subordination Agreements, as such agreement may hereafter be
further amended, supplemented or otherwise modified from time to time.
"Applicable Margin" means, for any Type of Loans (i) for the Initial
Payment Period (as defined below):
Applicable Margin (% per annum)
-------------------------------
Loans Base Rate Loans LIBOR Loans
----- --------------- -----------
Revolving Credit Loans 1.750% 3.000%
and
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(ii) for any Payment Period (as defined below) other than the Initial
Payment Period, the respective rates indicated below for Loans of such Type
opposite the applicable Total Leverage Ratio indicated below (or as
provided in the final paragraph of this definition, for part of a Payment
Period):
Applicable Margin (% per annum)
-------------------------------
Revolving Credit Loans
Total Leverage Ratio Base Rate LIBOR
-------------------- --------- -----
Loans Loans
----- -----
Greater than or equal to 7.00 to 1 1.750% 3.000%
Less than 7.00 to 1 and greater 1.500% 2.750%
than or equal to 6.50 to 1
Less than 6.50 to 1 and greater 1.250% 2.500%
than or equal to 6.00 to 1
Less than 6.00 to 1 and greater 1.000% 2.250%
than or equal to 5.50 to 1
Less than 5.50 to 1 and greater 0.750% 2.000%
than or equal to 5.00 to 1
Less than 5.00 to 1 and greater 0.500% 1.750%
than or equal to 4.50 to 1
Less than 4.50 to 1 0.250% 1.500%
For purposes hereof, a "Payment Period" means (i) initially, the period
commencing on the Closing Date to and including the third Business Day after the
date of delivery of the quarterly financial statements required by Section
6.1(b) for the fiscal quarter of the Borrower ended September 30, 2002 (the
"Initial Payment Period") and (ii) thereafter, the period commencing on the day
immediately succeeding the last day of the prior Payment Period to but not
including the third Business Day after the earlier of (x) the due date of the
next Compliance Certificate required to be delivered by the Borrower to the
Administrative Agent pursuant to Section 6.1(c) concurrently with the delivery
by the Borrower of the annual or any of the four quarterly financial statements
required by Sections 6.1(a) or 6.1(b), respectively, or (y) the date of the
actual receipt by the Administrative Agent of such Compliance Certificate.
Subject to and in accordance with the final paragraph of this definition, the
Applicable Margin shall be effective for each Payment Period (or in the
circumstances described in the final paragraph of this definition, such portion
of a Payment Period) whether or not such Payment Period coincides with an
Interest Period for LIBOR Borrowing.
The Total Leverage Ratio for any Payment Period except the Initial
Payment Period shall be determined on the basis of the Compliance Certificate
required to be delivered to the Administrative Agent pursuant to Section 6.1(c)
concurrently with the delivery by the Borrower of the annual or quarterly
financial statements required by Sections 6.1(a) or 6.1(b), respectively,
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setting forth, among other things, a calculation of the Total Leverage Ratio as
at the last day of the fiscal quarter immediately preceding such Payment Period
(i.e. the Total Leverage Ratio set forth in the Compliance Certificate delivered
pursuant to Section 6.1(c) that is delivered together with the financial
statements for the fiscal quarter ended September 30, 2002 shall be used to
determine the Applicable Margin with respect to the first Payment Period that
follows the Initial Payment Period, the Total Leverage Ratio set forth in the
Compliance Certificate that is delivered together with the financial statements
for the fiscal quarter ended December 31, 2002 shall be used to determine the
Applicable Margin with respect to the second Payment Period that follows the
Initial Payment Period, and so forth); provided that upon delivery by the
Borrower of the Compliance Certificate concurrently with the delivery of the
annual financial statements required by Section 6.1(a), the Applicable Margin
shall be adjusted retroactively, as of the first day of the then current Payment
Period, based on the calculation of the Total Leverage Ratio pursuant to such
certificate and financial statements to the extent that the Total Leverage Ratio
so calculated differs from the Total Leverage Ratio calculated based on the
Compliance Certificate delivered concurrently with the quarterly financial
statements for the fourth fiscal quarter of the preceding fiscal year required
by Section 6.1(b). In the event of a retroactive adjustment in the determination
of the Applicable Margin in favor of the Borrower, the amount of interest
thereby refundable to the Borrower shall be applied on the date of such
retroactive adjustment, to prepay interest payable on the Loans on a pro rata
basis, thus permitting the Borrower to deduct such amount from their next
interest payment. If the retroactive adjustment is in favor of the Lenders, the
amount of interest due to the Lenders shall be paid in full to the
Administrative Agent within five (5) days after written notice of such
adjustment is provided to the Borrower. Notwithstanding the foregoing, the
Borrower shall include a request for any downward adjustment of the Applicable
Margin with, or as part of, the Compliance Certificate concurrently with the
delivery by the Borrower of the annual financial statements required by Section
6.1(a) and, in any event, the Administrative Agent and the Lenders shall not be
required to make any downward adjustment until a request of the Borrower shall
have been received and unless such request is received within three months after
the date of delivery of such Compliance Certificate.
"Applicable Percentage" means (a) with respect to any Revolving Credit
Lender for purposes of the definition of LC Exposure and of Section 2.4, the
percentage of the total Revolving Credit Commitments represented by such
Lender's Revolving Credit Commitment, and (b) with respect to any Lender in
respect of any indemnity claim under Section 10.3 arising out of an action or
omission of the Administrative Agent under this Agreement, the percentage of the
total Commitments or, in the event the Commitments are terminated, Loans
hereunder represented by the aggregate amount of such Lender's Commitment or, in
the event the Commitments are terminated, Loans hereunder.
"Applicable Recipient" has the meaning set forth in Section 2.17.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
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"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.4), and accepted by the Administrative Agent, in the form
of Exhibit M.
"Base Rate" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted Base Rate.
"Basic Documents" means the Loan Documents, the Holdings Amendment, the
Oaktree Redemption Agreement, the Intermediate Holdings Intercompany Note, the
Senior Subordinated Note Indenture, the Senior Subordinated Notes and the
documents relating thereto, the El Dorado Acquisitions Documents and the
Guajillo Acquisitions Documents.
"Bering Property" means the 3-story office building comprising
approximately 29,000 square feet, together with the parking lot and other real
property with respect thereto, commonly known as 3000 Bering Drive, Houston,
Texas.
"Board" means the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrower" means LBI Media, Inc. (formerly known as LBI Holdings II,
Inc.), a California corporation.
"Borrower's knowledge" or any "Credit Party's knowledge" or any similar
phrase or words when used in connection with a statement, representation or
warranty means to the actual knowledge of Jose or Lenard Liberman, the Chief
Financial Officer of the Borrower or such Credit Party, as applicable, or any
responsible executive officer (as defined in Rule 3b-7 promulgated under the
Securities Exchange Act of 1934, as amended), of the Borrower or such Credit
Party, as applicable, after reasonable good faith inquiry made to ascertain the
accuracy of the statement, representation or warranty.
"Borrowing" means Loans of the same Type, made, converted or continued
on the same date and, in the case of LIBOR Loans, as to which a single Interest
Period is in effect.
"Borrowing Request" means a request for a Borrowing satisfying the
requirements of Section 2.3 and substantially in the form of Exhibit D-1 annexed
hereto.
"Broadcast Stations" has the meaning assigned to such term in Section
4.15(b).
"Burbank Office Property" means that certain real property located at
1845 Empire Avenue, Burbank,California 91504.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts, Los Angeles, California
or New York City are authorized or required by law to remain closed; provided
that, when used in connection with a LIBOR Loan, the term "Business Day" shall
also exclude any day on which banks are not open for dealings in U.S. dollar
deposits in the London interbank market.
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"California Taxable Income" shall mean the taxable income of Holdings I
for any taxable year computed pursuant to Section 23802 (or any successor
provisions) of the California Revenue and Tax Code but calculated as if the
taxable year of Holdings I ended on the date with respect to which such taxable
income calculation is made, reduced, but not below zero, by the amount of any
Suspended Losses which are treated as incurred by Holdings I in, and allowed as
deductions on the tax returns of the Holdings I's stockholders for, such taxable
year.
"Capital Expenditures" means, for any period, the sum for the Credit
Parties (determined on a consolidated basis without duplication in accordance
with GAAP) of the aggregate amount of expenditures (including the aggregate
amount of Capital Lease Obligations incurred during such period) made to acquire
or construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding expenditures for repairs that do not extend the
useful life of the asset) during such period computed in accordance with GAAP;
provided that such term shall not include (i) any such expenditures in
connection with any replacement or repair of Property affected by a Casualty
Event, (ii) any such expenditures in connection with a Relocation with the
exception of cash expenditures not subject to the reimbursement obligations of a
Person other than a Credit Party, (iii) for each broadcast station received in
any Voluntary Relocation, up to $4,000,000 in such expenditures but only to the
extent paid from the cash proceeds received in such Voluntary Relocation which
are used to upgrade or improve such broadcast station, (iv) for each broadcast
station received in any Involuntary Relocation, any such expenditures paid from
the cash proceeds received in such Involuntary Relocation which are used to
upgrade or improve such broadcast station or (v) the purchase price, any
broker's fees payable and any transaction costs incurred in connection with the
Clear Channel Acquisition, the Shop At Home Acquisition, the El Dorado
Acquisitions, the Guajillo Acquisitions or any other Acquisition permitted
hereunder.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP. Notwithstanding anything herein to the contrary, any obligations
under the Empire Burbank Lease shall not be Capital Lease Obligations.
"Cash Equivalents" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government, (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's ("S&P") or Moody's Investors Service,
Inc. ("Moody's"); (iii) commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from Moody's; (iv) certificates
of deposit or bankers' acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof or the District of
6
Columbia that (1) is at least "adequately capitalized" (as defined in the
regulations of its primary Federal banking regulator) and (2) has Tier 1 capital
(as defined in such regulations) of not less than $100,000,000; and (v) shares
of any money market mutual fund that (1) has at least 95% of its assets invested
continuously in the types of investments referred to in clauses (i) and (ii)
above, (2) has net assets of not less than $500,000,000, and (3) has the highest
rating obtainable from either S&P or Moody's, or (c) other cash equivalent
investments agreed to from time to time between the Borrower and the
Administrative Agent.
"Casualty Event" means, with respect to any Property of any Person, any
loss of or damage to, or any condemnation or other taking of, such Property for
which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation; provided that an
Involuntary Relocation shall not be a Casualty Event.
"Change in Control" means (a) prior to the Intercompany Merger,
Intermediate Holdings shall cease to own, directly or indirectly, 100% of the
Borrower's outstanding capital stock and Total Voting Power, (b) prior to the
Intercompany Merger, Holdings I shall cease to own, directly or indirectly, 100%
of Intermediate Holdings' outstanding capital stock and Total Voting Power, (c)
after the Intercompany Merger, Holdings I shall cease to own, directly or
indirectly, 100% of the Borrower's outstanding capital stock and Total Voting
Power, (d) Jose and Lenard Liberman (together with their spouses, lineal
descendants or heirs and devisees and any trusts controlled by them) shall cease
to collectively own, directly or indirectly, more than 50% of (i) the economic
interests in the outstanding equity securities of Holdings I or (ii) the Total
Voting Power of Holdings I, (e) the Borrower no longer owns and controls,
directly or indirectly, 100% of the capital stock of each of Liberman
Broadcasting, Inc., Liberman Television Inc., Liberman Television of Houston,
Inc., Liberman Broadcasting of Houston, Inc., and any License Subsidiary, unless
one hundred percent (100%) or any portion of such entity's capital stock is
transferred in accordance with the terms and conditions of this Agreement, (f)
any Holding Company or the Borrower sells, leases, conveys, transfers, exchanges
or otherwise disposes of, in a single transaction or through a series of related
transactions, all of the FCC Licenses owned by such Holding Company, the
Borrower and the other Credit Parties to any Person other than any of the Credit
Parties or (g) the occurrence of any "Change of Control" as defined in any
Holdings Securities Purchase Documents or in the Senior Subordinated Note
Indenture.
"Change in Law" means (a) the adoption of any law, rule or regulation
after the Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender or the Issuing Lender (or, for
purposes of Section 2.14(b), by any lending office of such Lender or by such
Lender's or the Issuing Lender's holding company, if any) with any request,
guideline, order, decree or directive (whether or not having the force of law)
of any Governmental Authority or the National Association of Insurance
Commissioners made or issued after the Closing Date.
"Clear Channel Acquisition" means the acquisition by Liberman
Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp.
from the Clear Channel Sellers of five (5) radio broadcast stations: KQUE-AM
located in Houston, Texas, KSEV-AM located in Tomball, Texas, KTJM-FM located in
Port Arthur, Texas, KJOJ-AM located in
7
Conroe, Texas and KJOJ-FM located in Freeport, Texas for cash consideration not
in excess of $44,000,000.
"Clear Channel Acquisition Documents" means the Asset Purchase
Agreement dated December 8, 2000 as amended by the First Amendment to Asset
Purchase Agreement dated as of March 13, 2001 and all related instruments,
agreements and other documents entered into by any Credit Party and any Clear
Channel Seller in connection therewith, in each case, as amended, supplemented
or modified in accordance with the restrictions of Section 7.13.
"Clear Channel Sellers" means Capstar Radio Operating Company, Capstar
TX Limited Partnership, Clear Channel Broadcasting, Inc. and Clear Channel
Broadcasting Licenses, Inc.
"Closing Date" means the date during which the Effective Time shall
occur.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means, collectively, all of the Property (including
capital stock and other equity interests) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for all obligations of
the Credit Parties hereunder.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement, Alta Subordination Agreement, the Mortgages, the Existing Mortgage
Amendments, the Investor Subordination Agreement, the Liberman Subordination
Agreements, the Control Agreements and all other agreements, instruments or
documents delivered by any Credit Party or any shareholder of a Credit Party
pursuant to this Agreement or any of the other Loan Documents in order to grant
to the Administrative Agent, on behalf of the Lenders, a Lien on any real,
personal or mixed property of that Credit Party as security for any of the
obligations of the Credit Parties hereunder.
"Commitments" means the Revolving Credit Commitments.
"Commitment Fee Rate" has the meaning specified in Section 2.11.
"Commitment Utilization Percentage" means, for any day, the ratio of
(a) the sum of (i) the principal amount of the Loans outstanding on such day
plus (ii) the face amount of Letters of Credit outstanding on such day to (b)
the aggregate amount of Revolving Credit Commitments for such day, expressed as
a percentage.
"Communications Act" means the Communications Act of 1934, as amended.
"Compliance Certificate" means a certificate duly executed by a
Financial Officer of the Borrower (required to be delivered pursuant to Section
6.1(c), 7.4(d)(ii), 7.5(a)(x)(2) or 7.6(c)), in substantially the form of
Exhibit N hereto, (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Section 7.10 (including, in
each case if applicable, a statement of the Total Leverage Ratio for purposes of
the definition of Applicable Margin and, for any Compliance Certificate
delivered with the financial statements required by Section 6.1(a), a request by
the
8
Borrower for a retroactive adjustment to the Applicable Margin), and, if such
certificate is accompanying the annual financial statements required to be
delivered pursuant to Section 6.1(a), commencing with the delivery of the annual
financial statements for the fiscal year ending December 31, 2002, setting forth
a detailed calculation reasonably satisfactory to the Administrative Agent of
the amount of Excess Cash Flow for the Credit Parties' most recently completed
fiscal year for the purpose of Sections 7.5 and 7.6 and (iii) stating whether
there has occurred since the date of the audited financial statements referred
to in Section 4.4 any change in GAAP or in the application thereof which has or
could have an effect on the financial statements accompanying such certificate
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate.
"Confirmation of Hazardous Materials Indemnity Agreement" means the
Confirmation of Hazardous Materials Indemnity Agreement dated as of the date
hereof among the Administrative Agent and the Credit Parties, substantially in
the form of Exhibit F.
"Confirmation of Pledge Agreement" means the Confirmation of Pledge
Agreement dated as of the date hereof among the Administrative Agent and the
Credit Parties, substantially in the form of Exhibit C.
"Confirmation of Subordination Agreements" means the Confirmation of
Subordination Agreements dated as of the date hereof among Alta and the
Administrative Agent, substantially in the form of Exhibit O.
"Conforming Leasehold Interest" means any leasehold interest as to
which the lessor has agreed in writing for the benefit of the Administrative
Agent (which writing has been delivered to the Administrative Agent), whether
under terms of the applicable lease or under the terms of a Landlord Waiver and
Consent, to the matters described in the "Landlord Waiver and Consent" attached
hereto as Exhibit J, which interest, if a subleasehold interest or
sub-subleasehold interest, is not subject to any contrary restrictions contained
in a superior lease or sublease.
"Control" means the possession, directly or indirectly, through one or
more intermediaries, of the power to direct or cause the direction of the
management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. "Controlling" and "Controlled" have
meanings correlative thereto.
"Control Agreement" means, with respect to any bank account of any
Credit Party except a bank account maintained with the Administrative Agent, a
Control Agreement, substantially in the form of Exhibit P, or such other form
that is satisfactory to the Administrative Agent in its reasonable discretion,
executed and delivered by such Credit Party, the depository institution at which
such account is maintained and the Administrative Agent at the Original Closing
Date or from time to time thereafter, as any such agreement may be amended,
supplemented or otherwise modified from time to time.
"Credit Parties" means the Borrower and the Guarantors (except that
Empire Burbank will be a Guarantor but will not be deemed a Credit Party
hereunder).
"Debt Service" means, for any period, the sum, for the Credit Parties
(determined on a consolidated basis without duplication in accordance with GAAP,
including without duplication
9
of previous payments), of the following: (a) all regularly scheduled cash
principal payments, as such amounts may be adjusted from time to time by reason
of any prepayments, of any Total Debt (including principal payments, if any,
resulting from the Revolving Credit Commitment reductions under Section 2.7(b)
and the principal component of any payments in respect of Capital Lease
Obligations, but excluding any prepayments of the Loans) made during such period
plus (b) all Interest Expense for such period.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 4.6.
"Disposition" means any sale, sale-leaseback, assignment, conveyance,
exchange, long-term lease accorded sales treatment under GAAP, transfer or other
disposition (including by means of a merger, consolidation, amalgamation, joint
venture or other substantive combination) of any assets, business or property
(whether now owned or hereafter acquired) by any Credit Party to any Person
other than a Credit Party, including any Relocation but excluding (a) the
granting of Liens permitted hereunder and (b) any sale, assignment, transfer or
other disposition of (i) any property sold or disposed of in the ordinary course
of business and on ordinary business terms, (ii) any property no longer used or
useful in the business of the Credit Parties and (iii) any Collateral under and
as defined in the Collateral Documents pursuant to an exercise of remedies by
the Administrative Agent thereunder, (c) leasing of any property in the ordinary
course of business, (d) the sale or other disposition of any Excluded Asset, (e)
the sale of marketable securities, including "margin stock" within the meaning
of Regulation U, liquid investments and other financial instruments in
connection with the ordinary course cash management of the Credit Parties, (f)
forgiveness or cancellation by any Credit Party of any loan by such Credit Party
to any of its Affiliates and (g) other sale, assignment, transfer or other
disposition in the ordinary course of business.
"Disposition Investment" means, with respect to any Disposition, any
promissory notes or other evidences of Indebtedness or Investments received by
any Credit Party in connection with such Disposition.
"Dividend Limitation" shall mean, with respect to Holdings I, the sum
of: (i) the product of the Maximum Effective California Rate times Holdings I's
California Taxable Income except that the product in this clause (i) shall be
zero (0) in the event Holdings I does not qualify (or subsequently elects not)
to be treated as an S Corporation for California income tax purposes, or
Intermediate Holdings or the Borrower does not qualify (or subsequently elects
not) to be treated as a qualified subchapter S subsidiary; plus, (ii) the
product of the Maximum Federal Rate and Holdings I's Federal Taxable Income.
"Documentation Agents" means CIT Lending Services Corporation and
SunTrust Bank, in their capacities as co-documentation agents hereunder.
"EBITDA" means, for any period of four consecutive fiscal quarters, Net
Income of the Credit Parties during such period, plus (to the extent deducted in
computing Net Income) (a) the
10
sum of (i) Interest Expense during such period and any interest expense accrued
during such period pursuant to the Oaktree Note Purchase Documents or the
Holdings Securities Purchase Documents, (ii) depreciation and amortization
expense during such period (including without limitation charges under SFAS 142
for broadcast licenses, goodwill or other indefinite lived intangible assets),
(iii) the aggregate amount paid, required to be paid or accrued (without
duplication) in respect of income, franchise, real estate and other like taxes
during such period, (iv) extraordinary losses during such period, (v) other non
cash charges during such period, (vi) (x) Relocation costs, expenses and other
amounts set forth in clauses (ii)(A) and (B), and subclauses (a)(i), (a)(v),
(a)(vi) and (a)(vii) and (b) of clause (ii)(C) of the definition of Net Cash
Payments and (y) Transaction Costs, in each case, incurred or paid during such
period, (vii) for the period commencing on May 20, 2002 and ending on the date
of the closing of the El Dorado Acquisitions, payments required to be made by
any of the Credit Parties to the El Dorado Sellers pursuant to the local
marketing agreements in respect of the stations not in excess of $150,000 for
any calendar month and for a period of not more than twelve (12) calendar
months, (viii) Extraordinary Expenses for such period, (ix) Permitted
Shareholder Tax Distributions and Permitted Holdings Tax Distributions during
such period, (x) any non-compete payments made in cash during such period to
sellers in connection with any Permitted Acquisition in an aggregate amount not
to exceed 20% of the aggregate consideration paid or payable by the Credit
Parties in connection with such Permitted Acquisition, (xi) the aggregate amount
of any payments made in cash during such period with respect to any portion of
the "Incentive Bonus" which may become payable pursuant to the employment
agreements of Andrew Mars dated November 15, 1998, Xavier Ortiz dated September
1, 1999, and Eduardo Leon dated December 1, 1999 (including the aggregate amount
of any payments made in cash during such period with respect to any notes issued
with respect thereto) and (xii) forgiveness or cancellation of the loan to
Lenard Liberman described in Item 5 of Schedule 7.5 annexed hereto minus (to the
extent not deducted in computing Net Income) (b) the sum of (i) extraordinary
gains during such period, (ii) cash Program Obligations Payments actually made
during such period (or, with respect to Program Obligations Payments for which
the proviso in the definition thereof is applicable, Program Obligations
Payments amortized during such period) and (iii) any cash interest paid during
such period in respect of the Liberman Subordinated Debt (excluding interest on
the Liberman Subordinated Debt to the extent paid on the Closing Date); provided
that (1) for purposes of determining EBITDA for any period during which a
Disposition (other than any Relocation) is consummated, EBITDA shall be adjusted
in a manner reasonably satisfactory to the Administrative Agent to give effect
to the consummation of the Disposition (other than any Relocation) on a
pro-forma basis, as if the Disposition (other than any Relocation) occurred on
the first day of such period; (2) for the purposes of determining EBITDA for any
period during which a Permitted Acquisition is consummated, EBITDA shall be
adjusted in a manner reasonably satisfactory to the Administrative Agent (a) to
give effect to the consummation of such Acquisition on a pro-forma basis, as if
such Acquisition occurred on the first day of such period and (b) to reflect
certain expense deductions in connection with such Acquisition reasonably
acceptable to the Administrative Agent, and (3) for purposes of determining
EBITDA for the four fiscal quarter periods ending on September 30, 2002,
December 31, 2002 and March 31, 2003, the EBITDA attributable to the stations
and other assets acquired in connection with the El Dorado Acquisitions and the
Guajillo Acquisitions (or, in the case of KQQK-FM and KEYH-AM, prior to the
consummation of the El Dorado Acquisitions, the EBITDA attributable to such
stations under applicable local marketing agreements) to the extent any such
stations or
11
assets are converted to or maintained as a Spanish language format, shall be
calculated as follows: for the four fiscal quarter periods ending on September
30, 2002, December 31, 2002 and March 31, 2003, the EBITDA attributable to such
stations and other assets shall be based on the EBITDA attributable to such
stations and other assets for the one fiscal quarter ended September 30, 2002
times 4 (if such EBITDA is greater than zero) or times 1 (if such EBITDA is less
than zero), for the two fiscal quarters ended December 31, 2002 times 2 (if such
EBITDA is greater than zero) or times 1 (if such EBITDA is less than zero), and
for the three fiscal quarters ended March 31, 2003 times 1 and 1/3 (if such
EBITDA is greater than zero) or times 1 (if such EBITDA is less than zero),
respectively (it being understood that to the extent any such stations or assets
are not so converted to or maintained as Spanish language format, EBITDA
therefor shall include the actual EBITDA for the applicable four fiscal quarters
attributable to such stations or assets (regardless of whether any portion of
such period occurred prior to the time of the El Dorado Acquisitions or the
Guajillo Acquisitions, as the case may be)). Notwithstanding the foregoing, to
the extent deducted in computing Net Income during the periods set forth below
and actually paid in cash by the Credit Parties, the following expenses incurred
by the Credit Parties in respect of settlement costs and attorneys' fees and
expenses in connection with the wrongful termination claim against the Credit
Parties by a former employee may be added to EBITDA: (a) for any time prior to
December 31, 2001, attorneys' fees and expenses not in excess of $396,280.20,
and (b) for the fiscal quarter ending on March 31, 2002, attorneys' fees and
expenses not in excess of $249,868.07 and settlement costs not in excess of
$200,000.
"Effective Time" means the time when the conditions specified in
Section 5.1 are satisfied (or waived in accordance with Section 10.2).
"Effective Time Mortgage" has the meaning assigned to such term in
Section 5.1(f)(i).
"Effective Time Mortgage Policy" has the meaning assigned to such term
in Section 5.1(f)(vii).
"Effective Time Mortgaged Property" has the meaning assigned to such
term in Section 5.1(f)(i).
"El Dorado Acquisitions" means the proposed acquisitions by Liberman
Broadcasting of Houston, Inc. and Liberman Broadcasting of Houston License Corp.
from the El Dorado Sellers of the assets of one or both of two (2) radio
broadcast stations located in Houston, Texas: KQQK-FM for cash consideration not
in excess of $23,000,001 and KEYH-AM for cash consideration not in excess of
$7,000,000; provided that KEYH-AM shall not be acquired unless KQQK-FM is also
acquired.
"El Dorado Acquisitions Documents" means (a) the AM Asset Purchase
Agreement dated April 5, 2002, and (b) the FM Asset Purchase Agreement dated
April 5, 2002, and all related instruments, agreements and other documents
entered into by any Credit Party and any El Dorado Seller in connection with
each such asset purchase agreement, in each case, as amended, supplemented or
modified in accordance with the restrictions of Section 7.13.
"El Dorado Sellers" means El Dorado Communications, Inc. El Dorado 108,
Inc. and KXTJ License, Inc.
12
"Eligible Assignee" means (a) any Lender, any Affiliate of any Lender
and any Approved Fund of any Lender; and (b) (i) any commercial bank organized
under the laws of the United States or any state thereof; (ii) any savings and
loan association or savings bank organized under the laws of the United States
or any state thereof; (iii) any commercial bank organized under the laws of any
other country or a political subdivision thereof; provided that (1) such bank is
acting through a branch or agency located in the United States or (2) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (iv) any other entity that is an "accredited investor" (as defined
in Regulation D under the Securities Act of 1933, as amended) that extends
credit or buys loans as one of its businesses including insurance companies,
mutual funds, financing companies and lease financing companies; provided that
no Credit Party or any Affiliate of any Credit Party shall be an Eligible
Assignee.
"Empire Burbank" means Empire Burbank Studios, Inc, a California
corporation and a Wholly-Owned Subsidiary of the Borrower.
"Empire Burbank Lease" means that certain Lease dated as of July 15,
1999 between Empire Burbank, as lessor, and LBI, as lessee, relating to
occupancy of the Burbank Office Property, as such lease may be amended or
modified in accordance with Section 7.14.
"Empire Burbank Loan" means a loan in the original principal amount of
$3,250,000 made by City National Bank to Empire Burbank pursuant to the Empire
Burbank Loan Documents and any Permitted Refinancing.
"Empire Burbank Loan Documents" means the Empire Burbank Mortgage and
the other documents evidencing the Empire Burbank Loan and described on Schedule
4.14, or any replacement documents evidencing a Permitted Refinancing, as such
documents or replacement documents may be amended or modified in accordance with
Section 7.14.
"Empire Burbank Mortgage" means that certain deed of trust encumbering
the Burbank Office Property, executed by Empire Burbank in favor of City
National Bank securing the Empire Burbank Loan, or any replacement deed of trust
evidencing a Permitted Refinancing, as such deed of trust or replacement deed of
trust may be amended or modified in accordance with Section 7.14.
"Empire Burbank Sublease" means that certain Sublease Agreement between
LBI, as lessor, and Empire Burbank, as lessee, relating to occupancy of certain
portions of the Burbank Office Property by Empire Burbank, as such lease may be
amended or modified from time to time.
"Environmental Laws" means all applicable laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any
13
Credit Party directly or indirectly resulting from or based upon (a) violation
of any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Rights" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
within the meaning of Section 414(b), (c), (m) or (o) of the Code.
Notwithstanding the foregoing, for purposes of any liability related to a
Multiemployer Plan under Title IV of ERISA, the term "ERISA Affiliate" means any
trade or business that together with the Borrower is treated as a single
employer within the meaning of Section 4001(b) of ERISA.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to any Pension
Plan, (b) the existence with respect to any Pension Plan of an "accumulated
funding deficiency" (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived, (c) the filing pursuant to Section 412(d) of the
Code or Section 303(d) of ERISA of an application for a waiver of the minimum
funding standard with respect to any Pension Plan, (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA
with respect to the termination of any Pension Plan, (e) the receipt by the
Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Pension Plan or Pension Plans
or to appoint a trustee to administer any Pension Plan or (f) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"Event of Default" has the meaning assigned to such term in Section
8.1.
"Excess Cash Flow" means, for each fiscal year, (a) EBITDA for such
period minus (b) (to the extent not deducted in computing EBITDA) the sum of (i)
the aggregate amount of all Capital Expenditures made during such period to the
extent paid in cash during such period (excluding payment of Capital Lease
Obligations to the extent included in Debt Service for such period and all
Capital Expenditures made by the reinvestment of Net Cash Payments made in
accordance with Section 2.10(b)), (ii) Debt Service for such period, (iii) the
aggregate amount paid in cash or withheld (and not deducted in the calculation
of Excess Cash Flow in any prior
14
fiscal year) by the Credit Parties in respect of income, real estate, franchise,
and other like taxes for such period, (iv) Transaction Costs incurred during
such period, (v) Extraordinary Expenses incurred during such period, (vi) the
Net Cash Payments of Dispositions made during such period to the extent such
proceeds (A) are included in EBITDA and (B) have been used to prepay the Loans
or are reinvested, in each case, pursuant to Section 2.10(b), (vii) loans or
Restricted Junior Payments made during such period as permitted by Sections
7.5(a)(x)(1) or 7.6(a), as applicable, and (viii) except to the extent
reimbursed, Relocation costs, expenses and other amounts set forth in clauses
(ii)(A) and (B), and subclauses (a)(i), (a)(v), (a)(vi), (a)(vii) and (b) of
clause (ii)(C) of the definition of Net Cash Payments incurred or paid during
such period plus (c) the amount of any payment or prepayment during such period
of loans made pursuant to Section 7.5(a)(x)(1).
"Excluded Assets" means, at any time no Event of Default pursuant to
Section 8.1(a) or as a result of a failure by the Credit Parties to comply with
any provision of Section 7.10 has occurred and is continuing, the Hollywood
Office Property.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Lender or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income, net worth
or franchise taxes imposed on (or measured by) its net income or net worth by
the United States of America, or by a jurisdiction under the laws of which such
recipient is organized or in which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located or in
which it is taxable solely on account of some connection other than the
execution, delivery or performance of this Agreement or the receipt of income
hereunder, (b) any branch profits taxes imposed by the United States of America
or any similar tax imposed by any other jurisdiction in which the Borrower is
located and (c) in the case of a Foreign Lender (other than an assignee pursuant
to a request by the Borrower under Section 2.8(b)), any withholding tax that is
imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement or is attributable to such Foreign
Lender's failure or inability to comply with Section 2.16(e), except to the
extent that such Foreign Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower pursuant to Section
2.16(a).
"Existing Credit Agreement" has the meaning assigned to such term in
the preamble hereof.
"Existing Debt" means Indebtedness described in (a) Schedule 4.14 and
denoted "to be repaid on the Closing Date" and (b) Schedule 4.14 and denoted "to
remain outstanding after the Closing Date".
"Existing Mortgage Amendment" means, with respect to any Existing
Mortgaged Property, an amendment to the Mortgage for such property,
substantially in the form of Exhibit Q or in such other form as may be approved
by the Administrative Agent in its sole and reasonable discretion.
"Existing Mortgaged Property" has the meaning assigned to such term in
Section 5.1(f)(ii).
15
"Existing Title Policy Endorsement" has the meaning assigned to such
term in Section 5.1(f)(ix).
"Extraordinary Expenses" means those certain non-recurring,
extraordinary fees and expenses incurred by Holdings I or the Borrower or any of
its Subsidiaries in connection with proposed radio or television acquisitions
not to exceed $250,000, individually, or $500,000 in the aggregate.
"FCC" means the Federal Communications Commission or any governmental
authority succeeding to any of its functions.
"FCC Licenses" means all radio, broadcast and or other licenses,
permits, certificates of compliance, franchises, approvals or authorizations
granted or issued by the FCC to any Credit Party. Each reference to "Material
FCC Licenses" shall be deemed to include the main station FCC License for each
broadcast station but shall be deemed not to include any auxiliary services
licenses held by any Credit Party in connection with such broadcast station.
"FCC Regulations" means the Communications Act, and all regulations and
written policies promulgated from time to time by the FCC under or in connection
with or pertaining to the Communications Act.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Taxable Income" shall mean the taxable income of Holdings I
for any taxable year computed pursuant to Section 1363(b) (or any successor
provision) of the Code but calculated as if the taxable year of Holdings I ended
on the date with respect to which such taxable income calculation is made,
reduced, but not below zero, by the amount of any Suspended Losses treated as
incurred by Holdings I in, and allowed as deductions on the tax returns of
Holdings I's stockholders for, such taxable year.
"Financial Officer" means the executive vice president, chief financial
officer, principal accounting officer, treasurer or controller of the Borrower.
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such Lien is
the most senior Lien (other than Liens permitted pursuant to Section 7.2) to
which such Collateral is subject.
"Fixed Charge Ratio" means, as at any date, the ratio of (a) the sum of
(i) EBITDA for the period of four consecutive fiscal quarters ending on or most
recently ended prior to such date plus (ii) cash and Cash Equivalents held by
the Credit Parties on such date in excess of $2,000,000, to (b) the sum for the
Credit Parties (determined on a consolidated basis without
16
duplication in accordance with GAAP), of (i) all amounts included in Debt
Service for such period; provided that for purposes of determining the Debt
Service as of the end of (A) the fiscal quarter ending September 30, 2002, Debt
Service shall be computed on an annualized basis by multiplying the actual Debt
Service for the quarter ending September 30, 2002 by four; (B) the fiscal
quarter ending December 31, 2002, Debt Service shall be computed on an
annualized basis by multiplying the actual Debt Service for the two quarters
ending December 31, 2002 by two; and (C) the fiscal quarter ending March 31,
2003, Debt Service shall be computed on an annualized basis by multiplying the
actual Debt Service for the three quarters ending March 31, 2003 by one and
one-third, (ii) the aggregate amount of all Capital Expenditures made during
such period to the extent paid in cash during such period (excluding payment of
Capital Lease Obligations to the extent included in Debt Service for such period
and expenditures not in excess of $2,000,000 for the acquisition of the Bering
Property), (iii) the aggregate amount paid, or required to be paid (without
duplication), in cash by the Credit Parties in respect of income, franchise,
real estate and other like taxes for such period, (iv) Permitted Shareholder Tax
Distributions and Permitted Holdings Tax Distributions made during such period,
(v) the aggregate amount of any payments made in cash during such period with
respect to any portion of the "Incentive Bonus" which may become payable
pursuant to the employment agreements of Andrew Mars dated November 15, 1998,
Xavier Ortiz dated September 1, 1999, and Eduardo Leon dated December 1, 1999
(including the aggregate amount of any payments made in cash during such period
with respect to any notes issued with respect thereto), and (vi) the amount of
non-compete payments made in cash during such period to sellers in connection
with Permitted Acquisitions in an aggregate amount not to exceed 20% of the
aggregate consideration paid or payable by the Credit Parties in connection with
such Acquisitions, to the extent such non-compete payments are added back in the
calculation of EBITDA for such period.
"Fleet" means Fleet National Bank, a national bank.
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government and the National Association of Insurance Commissioners.
"Guajillo Acquisitions" means the acquisitions by Liberman Broadcasting
of Houston, Inc. and Liberman Broadcasting of Houston License Corp. from the
Guajillo Sellers of the assets
17
of two (2) radio stations: KIOX-FM and KXGJ-FM located in Texas for aggregate
cash consideration not in excess of $3,150,000.
"Guajillo Acquisitions Documents" means the Asset Purchase Agreement,
dated as of June 21, 2002, among the Borrower, Liberman Broadcasting of Houston,
Inc., Liberman Broadcasting of Houston License Corp. and the Guajillo Sellers,
and all related instruments, agreements and other documents entered into by any
Credit Party and any Guajillo Seller in connection therewith, in each case, as
amended, supplemented or modified in accordance with the restrictions of Section
7.13.
"Guajillo Sellers" means Guajillo Investments, LLC, a Louisiana limited
liability company.
"Guarantee" means a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including
causing a bank or other financial institution to issue a letter of credit or
other similar instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course of business. The
amount of any Guarantee shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder). The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning.
"Guaranteed Obligations" has the meaning assigned to such term in
Section 3.1.
"Guarantors" means all Subsidiaries of the Borrower.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature in each case regulated or
subject to regulation pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Holding Company" means each of (i) Holdings I, (ii) prior to the
Intercompany Merger, Intermediate Holdings and (iii) any holding company formed
after the Closing Date which owns all the equity interests of the Borrower and
whose sole equity holder is Holdings I.
"Holding Company Debt" means any Indebtedness of Holdings I in respect
of the Holdings Securities Purchase Documents.
18
"Holdings Amendment" means the First Amendment to Securities Purchase
Agreement, Warrant Agreement and Subordination and Intercreditor Agreements
dated as of the date hereof among Holdings I, Oaktree, Alta and the
Administrative Agent pursuant to which Alta shall have agreed, among other
things, to extend the maturity date of the Holding Company Debt described
thereby to July 9, 2013.
"Holdings I" means LBI Holdings I, Inc., a California corporation and
the sole shareholder of Intermediate Holdings prior to the Intercompany Merger
and the sole shareholder of the Borrower or another Holding Company after the
Intercompany Merger.
"Holdings Securities Purchase Documents" means the (a) Securities
Purchase Agreement dated as of March 20, 2001 among the purchasers named therein
and Holdings I pursuant to which Alta purchased the junior subordinated notes of
Holdings I in a principal amount of $30,000,000, (b) any notes issued in
connection with such agreement on the Original Closing Date, (c) any additional
notes issued in respect of capitalized interest in respect of such agreement,
(d) the Warrant Agreement dated as of March 20, 2001 between Holdings I and
Alta, (e) any notes or warrants issued by Holdings I to Alta pursuant to the
Holdings Amendment on the Closing Date in exchange for the notes described in
clauses (b) and (c) above and the warrants described in clause (d) above and (f)
all related instruments, agreements and other documents entered into by Holdings
I and Alta in connection therewith, in each case, as amended by the Holdings
Amendment and as further amended, supplemented or modified in accordance with
the restrictions of Section 7.15.
"Hollywood Office Property" means that certain property located at 5724
Hollywood Blvd. and 5718 Hollywood Blvd., Los Angeles, Los Angeles County,
California.
"Indebtedness" means, for any Person, without duplication: (a)
obligations created, issued or incurred by such Person for borrowed money
(whether by loan, advance, the issuance and sale of debt securities or the sale
of Property to another Person subject to an understanding or agreement,
contingent or otherwise, to repurchase such Property from such Person); (b)
obligations of such Person to pay the deferred purchase or acquisition price of
Property or services, other than trade accounts payable (other than for borrowed
money) arising, and accrued expenses incurred, in the ordinary course of
business so long as such trade accounts are payable within 180 days after the
date of the respective goods are delivered or the respective services are
rendered or otherwise are payable in accordance with customary practices; (c)
Capital Lease Obligations of such Person; (d) obligations of such Person in
respect of letters of credit or similar instruments issued or accepted by banks
and other financial institutions for the account of such Person; (e)
Indebtedness of others secured by a Lien on the Property of such Person, whether
or not the respective indebtedness so secured has been assumed by such Person;
and (f) Indebtedness of others Guaranteed by such Person. The Indebtedness of
any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. Notwithstanding
anything herein to the contrary, (x) the obligations of any Credit Party to pay
Relocation Profits (including any Relocation Tax Benefits (as defined in the
Shop At Home Acquisition Documents)) to the Shop At Home Sellers under the Shop
At Home Acquisition Documents shall not be Indebtedness
19
until such time as such obligations are overdue and payable and not being
contested in good faith or represented by a separate instrument, (y) any
obligations under the Empire Burbank Lease shall not be Indebtedness and (z) any
obligations with respect to non-compete payments in connection with any
Permitted Acquisition shall not constitute Indebtedness so long as (i) the
aggregate amount of all non-compete payments with respect to such Permitted
Acquisition do not exceed 20% of the aggregate consideration paid or payable in
connection with such Permitted Acquisition and (ii) such non-compete payments do
not have an interest or similar component.
"Indemnified Taxes" means all Taxes other than (a) Excluded Taxes and
Other Taxes and (b) amounts constituting penalties or interest imposed with
respect to Excluded Taxes or Other Taxes.
"Intercompany Merger" means the merger of Intermediate Holdings with
and into the Borrower in accordance with the provisions of Section 7.4(g).
"Interest Coverage Ratio" means as at any date, the ratio of (a) EBITDA
for the period of four consecutive quarters ending on or most recently ended
prior to such date, to (b) Interest Expense for such period.
"Interest Election Request" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.6 substantially in the form
of Exhibit D-2 annexed hereto.
"Interest Expense" means, for any period, the sum, for the Credit
Parties (determined on a consolidated basis without duplication in accordance
with GAAP), of the following: (a) interest in respect of Total Debt accrued
during such period (whether or not actually paid during such period) plus (b)
the net amounts payable (or minus the net amounts receivable) under Hedging
Agreements accrued during such period (whether or not actually paid or received
during such period), with fees and costs attributable to such period being
calculated assuming such fees and costs are amortized equally over the term of
such Hedging Agreement, but excluding (i) reimbursement of legal fees and other
similar transaction costs of the Transactions and (ii) any non-cash amortization
of fees and expenses of the Transactions plus (c) all letter of credit fees and
expenses incurred after the Effective Time plus (d) any payments in respect of
liquidated damages paid in cash during such period pursuant to any registration
rights agreement entered into in connection with any Indebtedness; provided that
interest in respect of Indebtedness which is not paid in cash but which is
instead "paid-in-kind" through the issuance of additional notes or other
instruments shall not be included in "Interest Expense"; provided further that
for purposes of determining the Interest Expense as of the end of (a) the fiscal
quarter ending September 30, 2002, Interest Expense shall be computed on an
annualized basis by multiplying the actual Interest Expense for the quarter
ending September 30, 2002 by four; (b) the fiscal quarter ending December 31,
2002, Interest Expense shall be computed on an annualized basis by multiplying
the actual Interest Expense for the two quarters ending December 31, 2002 by
two; and (c) the fiscal quarter ending March 31, 2003, Interest Expense shall be
computed on an annualized basis by multiplying the actual Interest Expense for
the three quarters ending March 31, 2003 by one and one-third.
20
"Interest Payment Date" means (a) with respect to any Base Rate Loan,
each Quarterly Date and (b) with respect to any LIBOR Loan, the last Business
Day of the Interest Period applicable to the Borrowing of which such Loan is a
part and, in the case of a LIBOR Borrowing with an Interest Period of more than
three months' duration, each Business Day prior to the last day of such Interest
Period that would have been the last day of the Interest Period for such LIBOR
Loan had successive three month Interest Periods been applicable to such LIBOR
Loan.
"Interest Period" means with respect to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
(or, with the consent of the Administrative Agent and provided such periods are
available from all Lenders, nine or twelve months) thereafter, as the Borrower
may elect; provided, that (i) if any Interest Period would end on a day other
than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of such
Interest Period. For purposes hereof, the date of a Borrowing initially shall be
the date on which such Borrowing is made and thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.
Notwithstanding the foregoing,
(x) if any Interest Period for any Revolving Credit
Borrowing would otherwise end after the Revolving Credit Maturity
Date, such Interest Period shall end on the Revolving Credit
Maturity Date,
(y) no Interest Period for the Revolving Credit Loans may
commence before and end after any Revolving Credit Commitment
Reduction Date unless, after giving effect thereto, the aggregate
principal amount of the Revolving Credit Loans having Interest
Periods that end after such Revolving Credit Commitment Reduction
Date shall be equal to or less than the aggregate principal
amount of the Revolving Credit Commitments after giving effect to
the scheduled reduction thereto on such Revolving Credit
Commitment Reduction Date, and
(z) notwithstanding the foregoing clauses (x) and (y), no
Interest Period shall have a duration of less than one month and,
if the Interest Period for any LIBOR Loan would otherwise be a
shorter period, such Loan shall not be available hereunder as a
LIBOR Loan for such period.
"Intermediate Holdings" means LBI Intermediate Holdings, Inc, a
California corporation, which is, prior to the Intercompany Merger, the sole
shareholder of the Borrower and a Wholly-Owned Subsidiary of Holdings I.
"Intermediate Holdings Intercompany Note" means the Promissory Note
dated of even date herewith made by Intermediate Holdings to the order of the
Borrower in the original principal amount of $54,282,851.82.
21
"Investment" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such short sale) or (b) the making of any
deposit with, or advance, loan or other extension of credit to, any other Person
(including the purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such Property to
such Person, but excluding any such advance, loan or extension of credit having
a term not exceeding 180 days representing the purchase price of goods or
services sold by such Person in the ordinary course of business or otherwise are
payable in accordance with customary practices). Notwithstanding the foregoing,
Capital Expenditures, Acquisitions and Relocations (other than promissory notes
or debt or equity securities acquired in connection with any Relocation) shall
not be deemed "Investments" for purposes hereof.
"Investor Subordination Agreement" means the Investor Subordination
Agreement dated as of the Original Closing Date between Alta and the
Administrative Agent as amended by the Holdings Amendment and as confirmed by
the Confirmation to Subordination Agreements and as such agreement may hereafter
be further amended, supplemented or otherwise modified from time to time.
"Involuntary Relocation" means with respect to any television Broadcast
Station, any Relocation described in clause (2) of the definition of the term
Relocation. Without limiting the generality of the foregoing, the term
Involuntary Relocation shall include any "Specified Involuntary Relocation" as
defined in the Shop At Home Acquisition Documents as in effect on March 20,
2001.
"IP Collateral" means, collectively, any Collateral which is
intellectual property of a Credit Party.
"Issuing Lender" means Fleet National Bank, in its capacity as an
issuer of Letters of Credit hereunder.
"LBI" means Liberman Broadcasting, Inc., a California corporation.
"Landlord Waiver and Consent" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in substantially the form of Exhibit J-1 or in such
other form reasonably approved by the Administrative Agent.
"LC Disbursement" means a payment made by the Issuing Lender pursuant
to a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving Credit Lender at
any time shall be its Applicable Percentage of the total LC Exposure at such
time.
22
"Leasehold Property" means any leasehold interest of any Credit Party
as lessee under any lease of real property, other than any such leasehold
interest not material to the business and operations of the Credit Parties as
reasonably designated from time to time by Administrative Agent, as not being
required to be included in the Collateral.
"Lender Joinder Agreement" means the Lender Joinder Agreement attached
hereto as Exhibit E pursuant to which a New Lender shall become a party to this
Agreement.
"Lenders" means the Persons listed on Schedule 2.1 (including the
Issuing Lender) and any other Person that shall have become a party hereto
pursuant to (a) an Assignment and Acceptance, other than any such Person that
ceases to be a party hereto pursuant to an Assignment and Acceptance or (b) a
Lender Joinder Agreement.
"Letter of Credit" means any letter of credit issued on a standby basis
or in support of trade obligations of any Credit Party pursuant to this
Agreement.
"Liberman Subordinated Debt" means, collectively (A) Indebtedness of
LBI to (i) Lenard Liberman pursuant to the Third Amended and Restated Demand
Promissory Note dated March 20, 2001 in the aggregate principal amount on the
Original Closing Date of $194,414 and (ii) Jose Liberman pursuant to that Third
Amended and Restated Demand Promissory Note dated March 20, 2001 in the
aggregate principal amount on the Original Closing Date of $3,667,193, in each
case, prior to the payments made on or after the Original Closing Date, as the
same may be amended, supplement or otherwise modified in accordance with the
restrictions of Section 7.13 and (B) the Indebtedness incurred pursuant to
Section 7.1(f).
"Liberman Subordination Agreements" means (a) those certain Liberman
Subordination Agreements dated as of the Original Closing Date among the
Borrower, the Administrative Agent and each of Jose and Lenard Liberman, and
such agreements shall be deemed to be terminated upon the payment in full on the
Closing Date of the obligations described in clauses (i) and (ii) of the
definition of Liberman Subordinated Debt; provided that such agreements and the
obligations of such subordinated creditors shall be reinstated and revived with
respect to any such amounts which are required to be restored or returned in
connection with any Reorganization (as defined therein), and (b) the
subordination agreements, if any, entered into pursuant to Section 7.1(f), as
such agreements may be amended or modified in accordance with the terms hereof.
"LIBOR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"LIBO Rate" means, with respect to any LIBOR Borrowing for any Interest
Period, the rate appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or substitute
for such Service, providing rate quotations comparable to those currently
provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates
applicable to U.S. dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate
23
for U.S. dollar deposits with a maturity comparable to such Interest Period. In
the event that such rate is not available at such time for any reason, then the
"LIBO Rate" with respect to such LIBOR Borrowing for such Interest Period shall
be the rate at which U.S. dollar deposits of $5,000,000, and for a maturity
comparable to such Interest Period, are offered by four major banks in the
London interbank market as selected by the Administrative Agent in immediately
available funds in the London interbank market at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period.
"License Subsidiary" means any Wholly-Owned Subsidiary of the Borrower
(or of a Subsidiary of the Borrower) formed solely for the purpose of holding
FCC Licenses.
"Licensor Consent" means, with respect to any Material Property
License, a letter, certificate or other instrument in writing from the lessor
under the related lease, in substantially the form of Exhibit J-2 or in such
other form reasonably approved by the Administrative Agent.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (other
than an operating lease) (or any financing lease having substantially the same
economic effect as any of the foregoing) relating to such asset and (c) in the
case of securities, any purchase option, call or similar right of a third party
with respect to such securities.
"Loan Documents" means this Agreement, any promissory notes evidencing
Loans hereunder, the Collateral Documents and any other instruments or documents
delivered or to be delivered from time to time pursuant to this Agreement, as
the same may be supplemented and amended from time to time in accordance with
their respective terms.
"Loans" means the Revolving Credit Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations or financial condition of the Credit Parties taken
as a whole, (b) the ability of any Credit Party to perform any of its respective
material obligations under this Agreement or the other Loan Documents or (c) the
material rights of or material benefits available to the Lenders under this
Agreement and the other Loan Documents.
"Material Indebtedness" means (a) the Senior Subordinated Notes and
(b)(i) Indebtedness (other than the Loans or Letters of Credit or the Empire
Burbank Loan), or (ii) obligations in respect of one or more Hedging Agreements,
of any one or more of the Credit Parties in each case of clause (i) and clause
(ii) in an aggregate principal amount exceeding $3,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
any Person in respect of any Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Person
would be required to pay if such Hedging Agreement were terminated at such time.
"Material Leasehold Property" means a Leasehold Property reasonably
determined by the Administrative Agent in good faith consultation with the
Borrower to be of material value as Collateral or of material importance to the
operations of the Credit Parties, taken as a whole.
24
"Material Property License" means a license to use real or mixed
property (excluding FCC Licenses) reasonably determined by the Administrative
Agent in good faith consultation with the Borrower to be of material value as
Collateral or of material importance to the operations of the Credit Parties,
taken as a whole.
"Maximum Effective California Rate" shall mean the product of: (i) the
maximum California personal income tax rate imposed on individuals pursuant to
Section 17041(a) and (c) (or any successor provisions) of the California Revenue
and Tax Code; times (ii) the difference between one (1) and the Maximum Federal
Rate expressed as a decimal.
"Maximum Federal Rate" shall mean the maximum Federal income tax rate
imposed on individuals pursuant to Section 1(a)-(d) (or any successor
provisions) of the Code, as adjusted pursuant to Section 15 (or any successor
provision) of the Code, if applicable.
"Mortgage" means (i) a security instrument (whether designated as a
deed of trust or a mortgage, leasehold mortgage, assignment of leases and rents
or by any similar title) executed and delivered by any Credit Party in
substantially the form of Exhibits H and I or in such other form as may be
approved by the Administrative Agent in its sole and reasonable discretion, in
each case with such changes thereto as may be recommended by Administrative
Agent's local counsel based on local laws or customary local practices, (ii) or
at Administrative Agent's option, in the case of an Additional Mortgaged
Property, an amendment to an existing Mortgage, in form satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage, in either case as such
security instrument or amendment may be amended, supplemented or otherwise
modified from time to time. "Mortgages" means all such instruments, including
the Effective Time Mortgage and any Additional Mortgages, collectively.
"Mortgaged Property" means the Existing Mortgaged Property, Effective
Time Mortgaged Property or an Additional Mortgaged Property.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Cash Payments" means,
(i) with respect to any Casualty Event, the aggregate amount
of cash proceeds of insurance, cash condemnation awards and other cash
compensation received by the Credit Parties in respect of such Casualty
Event net of (A) legal, title, transfer and recording tax expenses,
commissions, and fees and expenses directly related to such casualty
event (including legal, accounting, brokerage, outside consultant and
advisor, advertising and closing costs) incurred by the Credit Parties
in connection therewith and (B) contractually required repayments of
Indebtedness to the extent secured by a Lien on such property, (C) any
Federal, state and local income, transfer or other taxes paid or
estimated to be payable by Holdings I, Intermediate Holdings or any of
the Credit Parties in respect of such Casualty Event and (D) any
Permitted Shareholder Tax Distributions and Permitted Holdings Tax
Distributions relating to taxes paid or estimated to be payable as a
result of such Casualty Event; and
25
(ii) with respect to any Disposition, the aggregate amount of
all cash payments received by any of the Credit Parties in connection
with such Disposition directly or indirectly, whether at the time of
such Disposition or after such Disposition under deferred payment
arrangements or Investments entered into or received in connection with
such Disposition (including Disposition Investments); provided that
(A) Net Cash Payments shall be net of (I) the amount of
any legal, title, transfer and recording tax expenses,
commissions and other fees and expenses (including legal,
accounting, brokerage, outside consultant and advisor,
advertising and closing costs) paid or payable by Holdings I,
Intermediate Holdings or any of the Credit Parties in
connection with such Disposition and (II) any Federal, state
and local income, transfer or other taxes paid or reasonably
estimated to be payable by any of the Credit Parties as a
result of such Disposition, but only to the extent that such
estimated taxes are in fact paid to the relevant Federal,
state or local governmental authority within twelve months
after the end of the calendar year in which the date of such
Disposition occurs and (III) to the extent not included in the
foregoing, any Permitted Holdings Tax Distributions and
Permitted Shareholder Tax Distributions related to taxes paid
or estimated to be payable as a result of such Disposition;
and
(B) Net Cash Payments shall be net of any repayments by
any of the Credit Parties of Indebtedness to the extent that
(I) such Indebtedness is secured by a Lien on the property
that is the subject of such Disposition and (II) the
transferee of (or holder of a Lien on) such property requires
that such Indebtedness be repaid as a condition to the
purchase of such property.
(C) In addition to but without duplicating any amounts
required to be deducted from Net Cash Payments under clauses
(A) and (B) above, Net Cash Payments in connection with any
Disposition involving a Relocation shall be net of (a) all
reasonable costs (as determined by Borrower (or its successor
or assign) in its reasonable discretion) directly related to
such Relocation including, without limitation, (i) transaction
expenses (including professional advisor's or broker's fees
and costs and financing and related fees, commissions and
expenses, including lender waiver fees), (ii) engineering,
construction, equipment and moving costs, (iii) marketing
costs, (iv) the estimated aggregate amount of all obligations
of any Credit Party (or its successor or its assign) after
such Relocation under leases with respect to which it is the
lessee immediately prior to such Relocation, (v) any penalties
or liabilities incurred (or estimated to be incurred) by any
Credit Party (or its success or assign) under contracts which
cannot be terminated by such Credit Party (or its successor or
assign) prior to such Relocation but which cannot be performed
or are no longer necessary (in the sole but reasonable
discretion of the Borrower (or its successor or assign)) by
any Credit Party (or its successor or assign) following such
Relocation, (vi) costs incurred in seeking governmental
consents and permits required as part of such Relocation and
(vii) costs incurred in seeking FCC consent to move such
replaced station's digital operations to the site of such
replacement station's analog operations (including all
expenses of a type set forth in other clauses of this
26
definition) and (b) any Relocation Profits (as defined in the
Shop At Home Acquisition Documents), including any Relocation
Tax Benefits (as defined in the Shop At Home Acquisition
Documents), that are paid or payable to the Shop At Home
Sellers or their assignees pursuant to the terms of the Shop
At Home Acquisition Documents. Any estimated amounts under
this clause (C) shall be based on good faith estimates of the
Borrower on the date of the consummation of any Relocation
which were reasonable when made but such estimates shall be
subject to adjustment within 90 days thereafter;
"Net Income" means net income of the Credit Parties on a consolidated
basis determined in accordance with GAAP.
"New Lender" has the meaning assigned to such term in Section
2.1(b)(ii).
"Oaktree" means Oaktree Capital Management, LLC or its successors and
assigns, in its capacity as agent under the Oaktree Note Purchase Documents.
"Oaktree Note Purchase Documents" means (a) the Note Purchase Agreement
dated as of March 20, 2001 among Oaktree, the purchasers party thereto and
Intermediate Holdings pursuant to which Oaktree and such purchasers purchased
the senior notes of Intermediate Holdings in a principal amount of $40,000,000,
(b) any notes issued in connection with such agreement, (c) any additional notes
issued in respect of capitalized interest in respect of such agreement and (d)
all related instruments, agreements and other documents entered into by
Intermediate Holdings, Oaktree and such purchasers in connection therewith, in
each case, as amended by the Holdings Amendment and as further amended,
supplemented or modified in accordance with the restrictions of Section 7.15.
"Oaktree Redemption Agreement" means the Agreement Relating to Note
Purchase Agreement dated as of June 28, 2002, among Oaktree, the purchasers
party to the Oaktree Note Purchase Documents and Intermediate Holdings.
"Original Closing Date" means March 20, 2001.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement and the other Loan Documents,
provided that there shall be excluded from "Other Taxes" all Excluded Taxes.
"Participant" has the meaning assigned to such term in Section 10.4(f).
"Pension Plan" means any Plan that is a defined benefit pension plan
subject to the provisions of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Permitted Acquisition" has the meaning set forth in Section 7.4.
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"Permitted Dividend Amount" shall mean, for any taxable period, the
amount by which the Dividend Limitation for the taxable year exceeds the
aggregate Permitted Shareholder Tax Distributions paid by the Borrower for such
year pursuant to Section 7.5(a)(x)(1) or 7.6(a) hereof, including distributions
paid or loans made by the Borrower within 105 days after the end of the taxable
year for which a distribution is paid or loan is made; provided, that:
(a) if, at the end of any taxable year of the Borrower, the Dividend
Limitation for such year exceeds the aggregate Permitted Shareholder Tax
Distributions paid by the Borrower for such year pursuant to Section
7.5(a)(x)(1) or 7.6(a) hereof, such excess shall be ignored for purposes of
computing the Permitted Dividend Amount for any subsequent period;
(b) if, at the end of any taxable year of the Borrower, the aggregate
Permitted Shareholder Tax Distributions paid by the Borrower for such year
pursuant to Section 7.5(a)(x)(1) or Section 7.6(a) hereof exceed the Dividend
Limitation, the Permitted Dividend Amount shall be zero (0) and such excess
shall be included in the calculation of the aggregate Permitted Shareholder Tax
Distributions paid by the Borrower for the following taxable year(s); and
(c) if Holdings I's S Corporation election made pursuant to Code
Section 1362 (or any successor provision) shall be determined to be invalid, or
is revoked or terminated, or the QSSS Election shall cease to be in effect for
the Borrower, the Permitted Dividend Amount for the Borrower shall be zero (0)
from and after the date of such invalidity, revocation, or termination.
"Permitted Holdings Tax Distributions" means cash distributions or
loans from the Borrower to Intermediate Holdings or, after the Intercompany
Merger, Holdings I, in respect of any taxable year equal to the sum of estimated
and final state income taxes paid or payable by Holdings I or Intermediate
Holdings which are attributable to the taxable income of the Borrower for such
taxable year calculated as though the Borrower were an S Corporation.
Notwithstanding any other provision of the Agreement to the contrary, if, in any
year Holdings I or Intermediate Holdings is required to pay additional taxes
with respect to a prior year's tax return which are attributable to the taxable
income of the Borrower calculated as though the Borrower were an S Corporation
(whether because of an audit by a taxing authority, an amended return the filing
of which is required in the reasonable judgment of Holdings I, Intermediate
Holdings or otherwise), the amount of Permitted Holdings Tax Distributions which
may be paid or loaned in such year shall be increased by the amount of such
additional taxes.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard and Poor's Ratings Service or from
Moody's Investors Service, Inc.;
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(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
(e) investments in money market mutual funds that are rated AAA by
Standard & Poor's Rating Service; and
(f) Cash Equivalents.
"Permitted Liens" has the meaning set forth in Section 7.2.
"Permitted Lines of Business" means the television and radio broadcast
business, television and radio program production, rental of television, radio
and related facilities and properties, outdoor advertising, the leasing or
licensing of property or tower space, and general business services related to
any of the foregoing and any business incident thereto.
"Permitted Refinancing" means a refinancing of the Empire Burbank Loan
(other than with the Loans); provided that (i) the terms of the Empire Burbank
Loan Documents evidencing such refinancing shall be substantially similar to the
terms of the Empire Burbank Loan Documents existing March 20, 2001, with such
changes as do not materially adversely affect the Administrative Agent or the
Lenders (it being understood that no change to those provisions of the Empire
Burbank Loan Documents referred to in Section 7.14(a)(ii) shall be permitted
without the prior written consent of the Administrative Agent), (ii) no
additional property shall be encumbered by the Empire Burbank Mortgage executed
in connection with such refinancing and (iii) prior to consummation of such
refinancing, the Borrower shall deliver to the Administrative Agent copies of
all loan documents relating thereto, certified by the Borrower to be true and
correct copies thereof and to be all loan documents executed in connection with
such refinancing.
"Permitted Shareholder Tax Distributions" means cash distributions made
by the Borrower to Intermediate Holdings, Holdings I or the shareholders of
Holdings I to permit the shareholders of Holdings I to pay their estimated and
final federal and state income tax liabilities attributable to the income of the
Borrower calculated as though the Borrower were an S Corporation. Permitted
Shareholder Tax Distributions may be made not more frequently than quarterly
with respect to each period for which an installment of estimated tax would be
required to be paid by the shareholders of Holdings I, provided, however, that
the amount of such distributions or loans shall not exceed the Permitted
Dividend Amount. For purposes of computing the amount of aggregate Permitted
Shareholder Tax Distributions paid by the Borrower for any taxable year, amounts
paid in such taxable year by the Borrower to the State of California on behalf
of nonresident shareholders as estimated taxes or as withholding taxes pursuant
to the California Revenue and Taxation Code shall be treated as Permitted
Shareholder
29
Tax Distributions paid by the Borrower. If nonresident shareholders recontribute
to the Borrower any such amounts paid on their behalf, however, the amounts
contributed shall be subtracted from the amount of aggregate Permitted
Shareholder Tax Distributions paid by the Borrower for the taxable year in which
the contributions are made. Notwithstanding any other provisions of this
Agreement to the contrary, if in any year Holdings I's shareholders are required
to pay additional taxes with respect to a prior year's tax return which are
attributable to the taxable income of the Borrower calculated as though the
Borrower were an S Corporation (whether because of an audit by a taxing
authority, an amended return the filing of which is required in the reasonable
judgment of Holdings I, or otherwise), the amount of Permitted Shareholder Tax
Distributions which may be paid in such year shall be increased by the amount of
such additional taxes as determined by a Tax Accountant.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee benefit plan within the meaning of Section
3(3) of ERISA in which the Borrower or any ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA including but not limited to any Pension Plan
or Multiemployer Plan.
"Pledge Agreement" means the Pledge Agreement executed and delivered by
each of the Credit Parties on the Original Closing Date as confirmed and amended
by the Confirmation of Pledge Agreement dated as of the Closing Date, as such
agreement may be further amended, supplemented or otherwise modified from time
to time, including the addition of new Credit Parties in accordance with Section
6.10.
"Post-Default Rate" means, for Base Rate Loans, a rate per annum equal
to the Adjusted Base Rate plus the Applicable Margin plus 2%, and, for LIBOR
Loans, a rate per annum equal to the Adjusted LIBO Rate plus the Applicable
Margin plus 2%.
"Prime Rate" means the rate of interest per annum publicly announced
from time to time by Fleet National Bank, as its prime rate in effect at its
principal office in Boston, Massachusetts; each change in the Prime Rate shall
be effective from and including the date such change is publicly announced as
being effective.
"Program Obligations" means all obligations, whether fixed or
contingent, of the Credit Parties in respect of the purchase, use, license or
acquisition of programs, programming materials, films and similar assets used in
connection with the television broadcast business and operations of the Credit
Parties.
"Program Obligations Payments" means, for any period, the sum
(determined on a consolidated basis and without duplication) of all payments by
the Credit Parties made or scheduled to be made during such period in respect of
Program Obligations; provided that, with respect to any contract for Program
Obligations which requires that the consideration therefor be paid by a Credit
Party in one lump-sum payment, or in unequal payments over the term of such
contract, such payment (or payments) shall be amortized over the period during
which such programming is available under such contract.
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"Property" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"Proprietary Rights" has the meaning assigned to such term in Section
4.5(b).
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the
reasonable opinion of the Administrative Agent, desirable in order to create or
perfect Liens on any IP Collateral.
"Quarterly Dates" means the last day of each fiscal quarter of the
Credit Parties, the first of which shall be September 30, 2002.
"QSSS Election" means the election to treat any Person as a qualified
Subchapter S subsidiary pursuant to Code Section 1361(b)(3) (or any successor
provision).
"Real Estate Acquisition Expenditures" means, for any period, the sum
for the Credit Parties (determined on a consolidated basis, without duplication,
in accordance with GAAP) of the aggregate amount of Capital Expenditures made to
acquire any fee interest in real property excluding any real property received
or acquired in any Acquisition or Relocation.
"Real Property Asset" means, at any time of determination, any fee
ownership or leasehold interest then owned by any Credit Party in any real
property.
"Recorded Leasehold Interest" means a Leasehold Property with respect
to which a Recorded Document (as hereinafter defined) has been recorded in all
places necessary or desirable, in the Administrative Agent's reasonable
judgment, to give constructive notice of such Leasehold Property to third-party
purchasers and encumbrancers of the affected real property. For purposes of this
definition, the term "Recorded Document" means, with respect to any Leasehold
Property, (a) the lease evidencing such Leasehold Property or a memorandum
thereof, executed and acknowledged by the owner of the affected real property,
as lessor, or (b) if such Leasehold Property was acquired or subleased from the
holder of a Recorded Leasehold Interest, the applicable assignment or sublease
document, executed and acknowledged by such holder, in each case in form
sufficient to give such constructive notice upon recordation and otherwise in
form reasonably satisfactory to the Administrative Agent.
"Register" has the meaning assigned to such term in Section 10.4.
"Registered Rights" has the meaning assigned to such term in Section
4.5(b).
"Reimbursement Obligation" has the meaning assigned to such term in
Section 2.4(e).
"Reinvestment Date" has the meaning specified in Section 2.10(b).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
31
"Relocation" means with respect to any television Broadcast Station,
(1) any transaction in which a 700 MHz Holder (or any other Person) offers
consideration (which consideration consists of a different frequency or
frequencies and/or other cash or non-cash consideration) to any Credit Party for
the cessation of broadcasting on any of the existing analogue and/or digital
frequencies of such Broadcast Station in order to accommodate the spectrum needs
of such 700 MHz Holder, including the prevention of interference with such 700
MHz Holder's operations, and such Credit Party is not ordered or directly or
indirectly required by the FCC or any other Governmental Authority to enter into
such transaction, or (2) any transaction in which FCC or any other Governmental
Authority orders or otherwise directly or indirectly requires any Credit Party
to cease broadcasting on any of its existing analogue and/or digital frequencies
in order to accommodate the spectrum needs of any 700 MHz Holder, including the
prevention of interference with such 700 MHz Holder's operations, with or
without any consideration. Without limiting the generality of the foregoing, the
term Relocation shall include any "Relocation" as defined in the Shop At Home
Acquisition Documents as in effect on March 20, 2001. As used herein, "700 MHz
Holder" means a holder of a 700 MHz license or construction permit.
"Relocation Profits" has the meaning given such term in the Shop At
Home Acquisition Documents.
"Required Lenders" means Lenders having Loans, LC Exposure and unused
Commitments representing in excess of 50% of the sum of the total Loans, LC
Exposure and unused Commitments.
"Restricted Junior Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of, or other equity interests in, any Credit Party now or hereafter outstanding,
except a dividend payable solely in shares of stock or interests of the same
class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of, or other equity interests in, any Credit Party now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of, or other equity interests in, any Credit Party
now or hereafter outstanding, (iv) any payment or prepayment of principal of,
premium, if any, or interest on, or redemption purchase, retirement, defeasance
(including economic or legal defeasance), sinking fund or similar payment or
liquidated damages with respect to, any Subordinated Indebtedness, Holding
Company Debt or other Indebtedness of any Holding Company (other than any
intercompany loans from any of the Credit Parties), (v) any payment made to Alta
Communications or any Affiliates of any Credit Party in respect of management,
consulting or other similar services provided to any Credit Party, and (vi) any
portion of "Incentive Bonus" which may become payable pursuant to the employment
agreement with Eduardo Leon referred to in Section 5.1(i). Notwithstanding the
foregoing, the following shall not be deemed to be Restricted Junior Payments:
(a) any payment to any director, officer or employee of any Credit Party
consisting of salary, other compensation (except to the extent described in
clause (vi) above) or reimbursement of expenses and (b) any payments made in
respect of the transactions permitted pursuant to Section 7.7. The cancellation
or forgiveness of any loan made by any Credit Party with no cash payment by a
Credit Party at the time of such
32
forgiveness or cancellation to any of its Affiliates shall not be deemed to be a
Restricted Junior Payment.
"Revolving Credit Availability Period" means the period from and
including the Effective Time to but excluding the earlier of (a) the Revolving
Credit Maturity Date and (b) the date of termination of the Revolving Credit
Commitments.
"Revolving Credit Commitment" means, with respect to each Lender, the
commitment of such Lender to make Revolving Credit Loans and to acquire
participations in Letters of Credit hereunder, as such commitment may be (a)
reduced from time to time pursuant to Sections 2.7 and 2.10, (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.4 or (c) adjusted from time to time pursuant to Section
2.1(b). The initial maximum amount of each Lender's Revolving Credit Commitment
is set forth on Schedule 2.1, or in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Revolving Credit Commitment, as
applicable. The aggregate original amount of the Revolving Credit Commitments is
equal to $160,000,000.00.
"Revolving Credit Commitment Increase" has the meaning assigned to such
term in Section 2.1(b)(i).
"Revolving Credit Commitment Increase Date" has the meaning assigned to
such term in Section 2.1(b)(iii).
"Revolving Credit Commitment Reduction Date" has the meaning assigned
to such term in Section 2.7(b). "Revolving Credit Conversion Date" means June
30, 2005.
"Revolving Credit Exposure" means, with respect to any Revolving Credit
Lender at any time, the sum of the outstanding principal amount of such Lender's
Revolving Credit Loans and its LC Exposure at such time.
"Revolving Credit Lender" means (a) initially, a Lender that has a
Revolving Credit Commitment set forth opposite its name on Schedule 2.1 and (b)
thereafter, the Lenders from time to time holding Revolving Credit Loans and
Revolving Credit Commitments, after (i) giving effect to any assignments thereof
permitted by Section 10.4 or (ii) becoming a New Lender in accordance with
Section 2.1(b).
"Revolving Credit Loan" means a Loan made pursuant to Section 2.1(a)
that utilizes the Revolving Credit Commitment.
"Revolving Credit Maturity Date" means September 30, 2009.
"Revolving Credit Maximum Amount" means $200,000,000.00.
"Revolving Credit Notes" means the amended and restated promissory
notes, substantially in the form of Exhibit A, issued by the Borrower in favor
of the Revolving Credit Lenders.
33
"S Corporation" means a small business corporation within the meaning
of Code Section 1361 (or any successor provision) for which an election is in
effect under Code Section 1362(a) (or any successor provision).
"Security Agreement" means the Amended and Restated Security Agreement,
substantially in the form of Exhibit B, executed and delivered by each of the
Credit Parties on the Closing Date and thereafter in accordance with Section
6.10, as such agreement may be amended, supplemented or otherwise modified from
time to time.
"Senior Debt" means the Total Debt, excluding (i) any Subordinated
Indebtedness and (ii) obligations of Credit Parties to pay any liquidated
damages under any registration rights agreement entered into in connection with
Indebtedness to the extent such liquidated damages remain unpaid after the
applicable due date under such registration rights agreement.
"Senior Leverage Ratio" means, as at any date of determination thereof,
the ratio of (a) Senior Debt to (b) EBITDA for the period of four consecutive
fiscal quarters ending on or most recently ended prior to such date.
"Senior Subordinated Notes" means the Borrower's 10 1/8% Senior
Subordinated Notes due 2012, including any Additional Notes and Exchange Notes
(as each such term is defined in the Senior Subordinated Note Indenture), in
each case as issued pursuant to the Senior Subordinated Note Indenture in an
aggregate principal amount not in excess of $200,000,000, as amended,
supplemented or otherwise modified in accordance with the restrictions of
Section 7.13.
"Senior Subordinated Note Indenture" means the Indenture dated as of
the date hereof, among the Borrower, the Guarantors and U.S. Bank, N.A., as
trustee, as amended, supplemented or otherwise modified in accordance with the
restrictions of Section 7.13.
"Shop at Home Acquisition" means the acquisition by Liberman Television
of Houston, Inc. and KZJL License Corp. from the Shop at Home Sellers of the
Broadcast Station KZJL-TV in Houston, Texas for cash consideration of
$57,000,000.
"Shop At Home Acquisition Documents" means the Asset Purchase
Agreement, dated November 10, 2000, among the Borrower, Liberman Television of
Houston, Inc. and KZJL License Corp. and the Shop At Home Sellers, as amended by
First Amendment to Asset Purchase Agreement dated as of December 22, 2000, the
Second Amendment to Asset Purchase Agreement dated as of February 27, 2001 and
the Third Amendment to Asset Purchase Agreement dated as of March 15, 2001 and
all related instruments, agreements and other documents entered into by any
Credit Party and any Shop At Home Seller in connection therewith, in each case,
as amended, supplemented or modified in accordance with the restrictions of
Section 7.13.
"Shop At Home Sellers" means Shop At Home, Inc., SAH - Houston
Corporation, SAH-Houston License Corp. and SAH License, Inc.
"Sole Lead Arranger" means Fleet Securities, Inc., in its capacity as
sole lead arranger hereunder.
34
"Special Counsel" means Palmer & Dodge LLP, in its capacity as special
counsel to Fleet National Bank, as Administrative Agent, and to Fleet
Securities, Inc., as Sole Lead Arranger.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration, exemptions
or offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Subordinated Indebtedness" means (a) the Senior Subordinated Notes,
(b) the Liberman Subordinated Debt and (c) any Indebtedness of any Credit Party,
incurred after the Effective Time with the prior written consent of the Required
Lenders, which matures in its entirety later than the Loans and by its terms (or
by the terms of the instrument under which it is outstanding and to which
appropriate reference is made in the instrument evidencing such Subordinated
Indebtedness) is made subordinate and junior in right of payment to the Loans
and to all of the Borrower's other obligations to the Lenders hereunder by
provisions satisfactory in form and substance to the Required Lenders.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent. References herein to "Subsidiaries" shall,
unless the context requires otherwise, be deemed to be references to
Subsidiaries of the Borrower.
"Suspended Losses" means the aggregate amount of losses and deductions
of Holdings I which have been taken into account by the shareholders of Holdings
I and disallowed under Code section 1366(d) (or successor provisions) in a prior
taxable year.
"Syndication Agents" means General Electric Capital Corporation and
U.S. Bank, N.A., in their capacity as co-syndication agents for the Lenders
hereunder.
"Tax Accountant" means any one of the five largest nationally
recognized independent accounting firms, or any other independent accounting
firm jointly approved by the Administrative Agent and the Borrower.
35
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Title Company" means one or more other title insurance companies
reasonably satisfactory to the Administrative Agent.
"Total Debt" means, as of any date of determination thereof, the
Indebtedness of the Credit Parties (determined on a consolidated basis without
duplication in accordance with GAAP) plus obligations of Credit Parties to pay
any liquidated damages under any registration rights agreement entered into in
connection with any Indebtedness to the extent such liquidated damages remain
unpaid after the applicable due date under such registration rights agreement,
excluding (a) intercompany loans among the Credit Parties, (b) Indebtedness
under the Oaktree Note Purchase Documents to the extent such Indebtedness is
being repaid on the Closing Date and Indebtedness under the Holdings Securities
Purchase Documents, (c) the Liberman Subordinated Debt and (d) the Empire
Burbank Loan.
"Total Leverage Ratio" means, as of any date of determination thereof,
the ratio of (a) the Total Debt to (b) EBITDA for the period of four consecutive
fiscal quarters ending on or most recently ended prior to such date.
"Total Voting Power" means, with respect to any Person, the total
number of votes which holders of securities or other ownership interests having
the ordinary power to vote, in the absence of contingencies but after giving
effect to the exercise and/or conversion of all outstanding options, warrants,
and other securities which by their terms are convertible into voting
securities, are entitled to cast in the election of directors, general partners
or managers of such Person.
"Transaction Costs" means, for any period, nonrecurring out-of-pocket
costs, fees and expenses (including attorneys' fees) which are incurred by
Holdings I and its Subsidiaries in connection with (a) the negotiation,
preparation and consummation of the transactions contemplated under this
Agreement and the Basic Documents and the Basic Documents (as defined in the
Existing Credit Agreement), including obtaining all regulatory approvals,
consents, filings or other matters required in connection with the transactions
described therein, including, any filing, registration or recording fees and
charges and including costs, fees and expenses incurred after the Original
Closing Date or the Closing Date, as applicable, (b) financing agreements and
proposed financing agreements related to this Agreement and the Basic Documents
and the Basic Documents (as defined in the Existing Credit Agreement) (including
without limitation all fees and expenses paid to Agents and their respective
counsel and like amounts paid in respect of obligations described in clause (a)
of the definition of Existing Debt and refinancing thereof) and (c) the
negotiation and consummation of the transactions contemplated under the El
Dorado Acquisitions Documents, the Guajillo Acquisitions Documents and all
financing agreements and proposed financing agreements related thereto including
any due diligence, engineering, consulting, environmental, travel and
accommodation, appraisal or other similar costs and expenses. The term
"Transaction Costs" shall include the initial and the routine periodic rating
agency fees related to the issuance of the Senior Subordinated Notes and the
maintenance of the rating(s) thereon but excluding any rating
36
agency fees related to subsequent transactions unrelated to the Senior
Subordinated Notes and excluding any rating agency fees payable in connection
with an Acquisition.
"Transactions" means with respect to the Borrower and each other Credit
Party, the execution, delivery and performance by the Borrower or such other
Credit Party of the Loan Documents (and the refinancing of the Existing Credit
Agreement), the Senior Subordinated Note Indenture and the documents related
thereto, the El Dorado Acquisitions Documents, the Guajillo Acquisitions
Documents, and the Holdings Amendment, the Oaktree Redemption Agreement (and the
repayment by Intermediate Holdings of the amounts outstanding under the Oaktree
Note Purchase Documents) to which the Borrower or such other Credit Party or
Holding Company is a party, the borrowing of Loans and the use of the proceeds
thereof, the issuance of Letters of Credit hereunder, and all transactions
contemplated by the foregoing documents.
"Type" when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Adjusted
Base Rate.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"U.S. Dollars" or "$" refers to lawful money of the United States of
------------ -
America.
"Voluntary Relocation" means with respect to any television Broadcast
Station, any Relocation described in clause (1) of the definition of the term
Relocation. Without limiting the generality of the foregoing, the term Voluntary
Relocation shall include any "Voluntary Relocation" as defined in the Shop At
Home Acquisition Documents as in effect on March 20, 2001.
"Wholly Owned Subsidiary" means, with respect to any Person at any
date, any corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing 100%
of the equity or ordinary voting power (other than directors' qualifying shares)
or, in the case of a partnership, 100% of the general partnership interests are,
as of such date, directly or indirectly owned, controlled or held by such Person
or one or more Wholly Owned Subsidiaries of such Person or by such Person and
one or more Wholly Owned Subsidiaries of such Person.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
1.2 Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Type (e.g., a "Base Rate
Loan" or a "LIBOR Loan"). In similar fashion, Borrowings may be classified and
referred to by Type.
1.3 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation".
37
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. References in Articles 6 and 7 in respect of the affirmative
and negative covenants to be performed by the Credit Parties shall be
interpreted to mean, with respect to Article 6, that the Borrower will, and will
cause each of the other Credit Parties to, comply with such covenant, and, with
respect to Article 7, that the Borrower will not, and will not permit any of the
other Credit Parties to, violate such covenant.
1.4 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time; provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), the Administrative Agent and the Borrower shall negotiate in
good faith to amend any such provision to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders); provided, further, however, regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
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ARTICLE 2
The Credits
2.1 Revolving Credit Commitments.
(a) Revolving Credit Loans. Subject to the terms and conditions set
forth herein, each Revolving Credit Lender agrees to make Revolving Credit Loans
to the Borrower from time to time during the Revolving Credit Availability
Period in an aggregate principal amount that will not result in such Lender's
Revolving Credit Loans exceeding such Lender's maximum Revolving Credit
Commitment; provided that the total Revolving Credit Exposure (after giving
effect to any requested Revolving Credit Borrowing) shall not at any time exceed
the total Revolving Credit Commitments. Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may borrow, prepay
and reborrow Revolving Credit Loans.
(b) Revolving Credit Commitment Increases.
(i) In the event that the aggregate amount of the Revolving Credit
Commitments as of the Closing Date is less than the Revolving Credit
Maximum Amount, the Borrower shall have the right, at any time and from
time to time prior to the Revolving Credit Conversion Date, by delivering
written notice to the Administrative Agent, to request that the Revolving
Credit Commitments be increased by an amount (an "Revolving Credit
Commitment Increase") up to but not exceeding the difference between (x)
the Revolving Credit Maximum Amount and (y) the aggregate amount of the
Revolving Credit Commitments as of the date of such request for an
Revolving Credit Commitment Increase.
(ii) Upon receipt of a written request from the Borrower, the
Administrative Agent and the Sole Lead Arranger shall attempt to arrange
and syndicate such Revolving Credit Commitment Increase, by contacting one
or more new lenders (the "New Lenders") or one or more existing Lenders to
determine whether such New Lenders desire to enter into Revolving Credit
Commitments, and/or whether any such existing Lender, in its sole
discretion, desires to increase the aggregate amount of its Revolving
Credit Commitments. Each such Revolving Credit Commitment Increase shall be
arranged and syndicated by the Administrative Agent and the Sole Lead
Arranger, and any New Lenders shall be selected by the Administrative Agent
and the Sole Lead Arranger in consultation with the Borrower. The
Administrative Agent's and the Sole Lead Arranger's agreements to arrange
and syndicate any such Revolving Credit Commitment Increase shall not be
deemed to constitute a commitment, or an offer, to provide, such Revolving
Credit Commitment Increase or a representation, direct or implied, that
such arrangement and syndication will be successful. The Borrower shall pay
to the Administrative Agent and the Sole Lead Arranger such fees and
expenses in connection with arranging and syndicating each such Revolving
Credit Commitment Increase, as may be agreed by the Borrower, the
Administrative Agent and the Sole Lead Arranger, to achieve a successful
syndication of such Revolving Credit Commitment Increase, and no portion of
such fees shall be allocable to any persons other than the
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Administrative Agent, the Sole Lead Arranger, a Lender increasing the
aggregate amount of its Revolving Credit Commitments or the New Lenders,
unless otherwise agreed by the Administrative Agent and the Sole Lead
Arranger. The Administrative Agent and the Sole Lead Arranger shall have no
liability to the Borrower or the Lenders if the Administrative Agent and
the Sole Lead Arranger are unable to successfully arrange and syndicate any
requested Revolving Credit Commitment Increase. The Borrower may request
Revolving Credit Commitment Increases on any number of occasions, subject
to the conditions and provisions set forth herein. No Lender shall have any
obligation to increase its Revolving Credit Commitment.
(iii) If the Administrative Agent and the Sole Lead Arranger are able
to successfully arrange and syndicate any requested Revolving Credit
Commitment Increase, such Revolving Credit Commitment Increase shall become
effective on the date specified by the Administrative Agent (each such date
being referred to a "Revolving Credit Commitment Increase Date") provided
that (x) no Default shall exist on the Revolving Credit Commitment Increase
Date both before and after giving effect to such proposed Revolving Credit
Commitment Increase; (y) the Borrower shall have paid all fees and expenses
in connection with the arrangement and syndication of such Revolving Credit
Commitment Increase; and (z) the Borrower shall have delivered or caused to
be delivered to the Administrative Agent any certificates or other
documents reasonably requested by the Administrative Agent in connection
with such Revolving Credit Commitment Increase including amendments to
Mortgages and endorsements to title insurance policies or new title
insurance policies (if and to the extent it is determined that new title
policies are necessary to insure the lien of the Mortgages with respect to
the Revolving Credit Commitment Increase). In the event the Administrative
Agent and the Sole Lead Arranger shall be unable to successfully arrange
and syndicate any requested Revolving Credit Commitment Increase within
thirty days of the date of any written request by the Borrower for such
Revolving Credit Commitment Increase, such request by the Borrower shall be
deemed to have expired and the Administrative Agent and the Sole Lead
Arranger shall have no further obligation to continue such arrangement and
syndication efforts; provided that the expiration of such thirty-day period
shall not limit the Borrower's right to make one or more additional
requests for an Revolving Credit Commitment Increase.
(iv) On each Revolving Credit Commitment Increase Date, subject to
the satisfaction of the foregoing terms and conditions, and subject to the
limitations set forth in clause (v) of this Section 2.1(b): (w) each New
Lender shall enter into one or more Lender Joinder Agreements or other
documents in form and substance reasonably satisfactory to the
Administrative Agent, and upon execution of such Lender Joinder Agreements
or other documents, such New Lender shall be deemed to be a "Lender" under
this Agreement and the other Loan Documents; (x) the Revolving Credit
Commitments shall be adjusted to take into account the Revolving Credit
Commitments of the New Lenders and the increases, if any, of the Revolving
Credit Commitments of the existing Lenders, and (y) each existing Lender
who is increasing their Revolving Credit Commitments shall have returned to
the Administrative Agent for cancellation its Revolving Credit Note, and
the Borrower shall have executed and delivered to the Administrative Agent
for the benefit of each New Lender and each existing Lender who
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is increasing its Revolving Credit Commitments a new Revolving Credit
Note, in each case, in the aggregate principal amount of such Lender's
Revolving Credit Commitment after giving effect to the Revolving
Credit Commitment Increase. Each of the Lenders hereby authorizes the
Administrative Agent to revise Schedule 2.1 on each Revolving Credit
Commitment Increase Date to reflect such increase without an amendment
to this Agreement.
(v) Notwithstanding anything to the contrary set forth in this
Section 2.1(b), in no event shall any Revolving Credit Commitment
Increase result in (1) any increase or decrease in the amount of any
Lender's Revolving Credit Commitment without such Lender's prior
written consent, or (2) the aggregate amount of the Revolving Credit
Commitments exceeding the Revolving Credit Maximum Amount.
2.2 Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, each Borrowing shall be comprised
entirely of Base Rate Loans or LIBOR Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any LIBOR Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for a LIBOR
Borrowing, such Borrowing shall be in an aggregate amount at least equal to
$500,000 or any greater multiple of $100,000. At the time that each Base Rate
Borrowing is made, such Borrowing shall be in an aggregate amount that is at
least equal to $100,000 or any greater multiple of $100,000; provided that (i) a
Base Rate Borrowing of Revolving Credit Loans may be in an aggregate amount that
is equal to the entire unused balance of the total Revolving Credit Commitments,
and (ii) a Base Rate Borrowing of Revolving Credit Loans may be in an amount
that is required to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.4(e). Borrowings of more than one Type may be
outstanding at the same time; provided that there shall not at any time be more
than a total of ten LIBOR Borrowings outstanding.
2.3 Requests for Borrowings.
(a) To request a Borrowing, the Borrower shall notify the
Administrative Agent of such request by telephone (i) in the case of a LIBOR
Borrowing, not later than 1:00 p.m., Boston, Massachusetts time, three Business
Days before the date of the proposed Borrowing; provided that LIBOR Borrowings
shall not be available on the Closing Date unless otherwise consented to by the
Administrative Agent in writing, or (ii) in the case of a Base Rate Borrowing
not later than 1:00 p.m., Boston, Massachusetts time, one Business Day before
the
41
date of the proposed Borrowing; provided that any such notice of a Base Rate
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
Section 2.4(e) may be given not later than 1:00 p.m., Boston, Massachusetts
time, on the date of the proposed Borrowing. Each such telephonic Borrowing
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form
approved by the Administrative Agent and signed by the Borrower.
(b) Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.2:
(i) the aggregate amount of such Borrowing;
(ii) the effective date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be a Base Rate Borrowing or a
LIBOR Borrowing;
(iv) in the case of a LIBOR Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period";
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.5;
(vi) a detailed calculation of the Senior Leverage Ratio and,
commencing on the first anniversary of the Closing Date, the Total Leverage
Ratio, in each case based on the Senior Debt or the Total Debt (in each
case, after giving effect to such Borrowing), as applicable, and EBITDA of
the Credit Parties for the period of four consecutive fiscal quarters
reported in the Compliance Certificate most recently delivered to the
Administrative Agent demonstrating (A) that the Senior Leverage Ratio
(after giving effect to such Borrowing) shall not exceed (1) for the period
from the Closing Date to the date of delivery of the first Compliance
Certificate required to be delivered pursuant to Section 6.1(c), the
maximum Senior Leverage Ratio permitted on the Closing Date pursuant to
Section 5.1(m)(ii) and (2) thereafter, the maximum Senior Leverage Ratio
permitted under Section 7.10(b) for the fiscal quarter most recently ended
and (B) that the Total Leverage Ratio (after giving effect to such
Borrowing) shall not exceed the maximum Total Leverage Ratio permitted
under Section 7.10(a) for the fiscal quarter most recently ended; provided
that for purposes of calculating such ratios (x) prior to the delivery of
the first Compliance Certificate required to be delivered hereunder, the
Credit Parties shall use EBITDA reported in the last Compliance Certificate
provided under the Existing Credit Agreement; provided that if the Borrower
delivers a Compliance Certificate for the four-fiscal quarter period ended
June 30, 2002 giving pro forma effect to the consummation of the El Dorado
Acquisitions and the Guajillo Acquisitions as if such Acquisitions had
occurred at the beginning of the applicable period and after reflecting
certain expense deductions in connection with such Acquisitions reasonably
acceptable to the Administrative Agent, then the Credit Parties shall use
EBITDA as
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reported in such Compliance Certificate and (y) for Loans being requested
in connection with an Acquisition such ratios shall be calculated giving
pro forma effect to the Acquisition as if such Acquisition has occurred at
the beginning of the applicable period and after reflecting certain expense
deductions in connection with such Acquisition reasonably acceptable to the
Administrative Agent; and
(vii) at any time when the outstanding Loans exceed $150,000,000
minus the aggregate amount of all "Net Proceeds" of "Asset Sales" and
"Relocations" applied by the Borrower or any of its "Restricted
Subsidiaries" after the Closing Date to repay any term "Indebtedness" under
any "Credit Facility" or to repay any revolving credit "Indebtedness" under
any "Credit Facility" and effect a corresponding commitment reduction under
a "Credit Facility" pursuant to Section 4.10 of the Senior Subordinated
Note Indenture (all of the foregoing terms in quotation marks are used as
defined in the Senior Subordinated Note Indenture), (A) a certification
that the Loans, after giving effect to such Borrowing Request, are not
incurred in violation of the Senior Subordinated Note Indenture, including
a detailed calculation of the Leverage Ratio (as defined in the Senior
Subordinated Note Indenture) demonstrating that such Leverage Ratio does
not exceed 7.0 to 1 after giving effect to the Borrowing Request and (B)
the Borrowing Request therefor must be in writing (and no telephonic
Borrowing Requests shall be permitted).
(c) If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be a Base Rate Borrowing. If no Interest Period is
specified with respect to any requested LIBOR Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section 2.3,
the Administrative Agent shall advise each Lender of the details thereof and of
the amount of such Lender's Loan to be made as part of the requested Borrowing.
2.4 Letters of Credit.
(a) General. Subject to the terms and conditions set forth herein, in
addition to the Revolving Credit Loans provided for in Section 2.1(a), the
Borrower may request the issuance of Letters of Credit for its own account by an
Issuing Lender, in a form reasonably acceptable to such Issuing Lender, at any
time and from time to time during the Revolving Credit Availability Period. In
addition to such form, at the time of such request, the Borrower shall also
deliver to the Administrative Agent the information required to be delivered
pursuant to Section 2.3(b)(vi) (assuming, for the calculation of the Senior
Leverage Ratio and the Total Leverage Ratio, the issuance of the requested
Letter of Credit) and, if applicable, Section 2.3(b)(vii). Letters of Credit
issued hereunder shall constitute utilization of the Revolving Credit
Commitments. In the event of any inconsistency between the terms and conditions
of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, an Issuing Lender relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an
43
outstanding Letter of Credit), the Borrower shall hand deliver or send by
telephonic facsimile (fax) (or transmit by electronic communication, if
arrangements for doing so have been approved by such Issuing Lender) to an
Issuing Lender and the Administrative Agent (two Business Days before the date
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, the date of issuance, amendment,
renewal or extension, the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section 2.4), the amount of such
Letter of Credit, the name and address of the beneficiary thereof, whether such
Letter of Credit is a documentary or trade Letter of Credit or a standby Letter
of Credit, and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. If requested by such Issuing Lender, the
Borrower also shall submit a letter of credit application on such Issuing
Lender's standard form in connection with any request for a Letter of Credit. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the Borrower
shall be deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension (i) the aggregate LC Exposure of the
Issuing Lender (determined for these purposes without giving effect to the
participations therein of the Revolving Credit Lenders pursuant to paragraph (d)
of this Section 2.4) shall not exceed $5,000,000 and (ii) the total Revolving
Credit Exposure shall not exceed the total Revolving Credit Commitments. If the
Issuing Lender is not the Administrative Agent, the Issuing Lender shall notify
the Administrative Agent promptly in writing of the issuance, amendment, renewal
or extension of any Letter of Credit, with a summary of the pertinent terms
thereof and shall provide the Administrative Agent with a copy of such Letter of
Credit and related application and any other documentation related thereto.
(c) Expiration Date. Each Letter of Credit shall expire (without giving
effect to any extension thereof by reason of an interruption of business) at or
prior to the close of business on the earlier of (i) the date 365 days, in the
case of standby Letters of Credit, or 180 days, in the case of documentary or
trade Letters of Credit, after the date of the issuance of such Letter of Credit
(or, in the case of any renewal or extension thereof, 365 days or 180 days, as
applicable, after such renewal or extension) provided that any such Letter of
Credit may provide for automatic extensions thereof to a date not later than 365
days, in the case of standby Letters of Credit, or 180 days, in the case of
documentary or trade Letters of Credit, beyond its current expiration date, and
(ii) the date that is five Business Days prior to the Revolving Credit Maturity
Date. No Letter of Credit may be extended beyond the date that is five Business
Days prior to the Revolving Credit Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) by an Issuing
Lender, and without any further action on the part of such Issuing Lender, such
Issuing Lender hereby grants to each Revolving Credit Lender, and each Revolving
Lender hereby acquires from such Issuing Lender, a participation in such Letter
of Credit equal to such Revolving Credit Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay to the Administrative Agent,
for the account of such Issuing Lender, such Revolving Credit Lender's
Applicable Percentage of each LC Disbursement made by such Issuing Lender and
not reimbursed by the Borrower on the date due as provided in paragraph (e) of
this Section 2.4, or of any reimbursement payment required to be
44
refunded to the Borrower for any reason. Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment to the Administrative Agent, for the account of such
Issuing Lender shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Reimbursement. If an Issuing Lender shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
(each a "Reimbursement Obligation") such Issuing Lender in respect of such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 1:00 p.m., Boston, Massachusetts time, on (i) the
Business Day that the Borrower receives notice of such LC Disbursement, if such
notice is received prior to 11:00 a.m., Boston, Massachusetts time; or (ii) the
Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time, provided that the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.3 that such payment be financed with a Revolving
Credit Base Rate Borrowing in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting Revolving Credit Base Rate Borrowing.
If the Borrower fails to make such payment when due, the Administrative
Agent shall notify each Revolving Credit Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such
Revolving Credit Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Credit Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.5 with respect to
Revolving Credit Loans made by such Lender (and Section 2.5 shall apply to the
payment obligations of the Revolving Credit Lenders, treating each such payment
as a Loan for this purpose), and the Administrative Agent shall promptly pay to
the applicable Issuing Lender the amounts so received by it from the Revolving
Credit Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent
shall distribute such payment to the applicable Issuing Lender or, to the extent
that the Revolving Credit Lenders have made payments pursuant to this paragraph
to reimburse such Issuing Lender, then to such Lenders and such Issuing Lender
as their interests may appear. Any payment made by a Revolving Credit Lender
pursuant to this paragraph to reimburse an Issuing Lender for any LC
Disbursement shall not constitute a Loan and shall not relieve the Borrower of
its obligation to reimburse such LC Disbursement.
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(f) Obligations Absolute.
(i) The Borrower's obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section 2.4 shall be absolute,
unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (A) any lack of validity or enforceability
of any Letter of Credit, or any term or provision therein, (B) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue
or inaccurate in any respect, (C) payment by the Issuing Lender under a
Letter of Credit against presentation of a draft or other document that
does not comply strictly with the terms of such Letter of Credit and (D)
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
(ii) Neither the Administrative Agent, any Lender nor Issuing
Lender, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer
of any Letter of Credit by the Issuing Lender or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances
referred to in clause (f)(i) above), or any error, omission, interruption,
loss or delay in transmission or delivery of any draft, notice or other
communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes
beyond the control of the Issuing Lender; provided that nothing in this
Section 2.4 shall be construed to excuse the Issuing Lender from liability
to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the Issuing Lender's gross negligence or
willful misconduct when determining whether drafts and other documents
presented under a Letter of Credit comply with the terms thereof. Subject
in all respects to the foregoing, the parties hereto expressly agree that:
(A) the Issuing Lender may accept documents that appear on
their face to be in substantial compliance with the terms of a
Letter of Credit without responsibility for further
investigation, regardless of any notice or information to the
contrary, and may make payment upon presentation of documents
that appear on their face to be in substantial compliance with
the terms of such Letter of Credit;
(B) the Issuing Lender shall have the right, in its sole
discretion, to decline to accept such documents and to decline to
make such payment if such documents are not in strict compliance
with the terms of such Letter of Credit; and
(C) this clause (f)(ii) shall establish the standard of care
to be exercised by the Issuing Lender when determining whether
drafts and other documents presented under a Letter of Credit
comply with the terms thereof (and
46
the parties hereto hereby waive, to the extent permitted by applicable
law, any standard of care inconsistent with the foregoing).
(g) Disbursement Procedures. The Issuing Lender shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under any Letter of Credit. The Issuing Lender shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Lender has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Lender and the Revolving Credit Lenders with respect to
any such LC Disbursement.
(h) Interim Interest. If the Issuing Lender shall make any LC
Disbursement in respect of any Letter of Credit, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made,
the unpaid amount thereof shall bear interest, for each day from and including
the date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then applicable
to Revolving Credit Base Rate Loans; provided that, if the Borrower fails to
reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section 2.4, then interest calculated in accordance with Section 2.12(c) shall
accrue on the unpaid amount thereof. Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Lender, except that interest accrued on
and after the date of payment by any Revolving Credit Lender pursuant to
paragraph (e) of this Section 2.4 to reimburse the Issuing Lender shall be for
the account of such Lender to the extent of such payment.
(i) Cash Collateralization. If either (i) an Event of Default shall
occur and be continuing and the Borrower receives notice from the Administrative
Agent or the Required Lenders demanding the deposit of cash collateral pursuant
to this paragraph, or (ii) the Borrower shall be required to provide cover for
LC Exposure pursuant to Section 2.9(a) or 2.10(b), the Borrower shall
immediately deposit with the Issuing Lender an amount in cash equal to, in the
case of an Event of Default, the LC Exposure as of such date plus any accrued
and unpaid interest thereon and, in the case of cover pursuant to Section 2.9(a)
or 2.10(b), the amount required under Section 2.9(a) or 2.10(b), as the case may
be; provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default described in clause (g) or (h) of Section 8.1. Such deposit
shall be held by the Administrative Agent as collateral in the first instance
for the LC Exposure under this Agreement and thereafter for the payment of any
other obligations of the Credit Parties hereunder.
2.5 Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, Boston, Massachusetts time to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in Boston, Massachusetts and
47
designated by the Borrower in the applicable Borrowing Request; provided that
Revolving Credit Base Rate Loans made to finance the reimbursement of an LC
Disbursement under any Letter of Credit as provided in Section 2.4(e) shall be
remitted by the Administrative Agent to the Issuing Lender.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
2.5 and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender (and if the applicable Lender fails to pay immediately upon
demand, the Borrower) agrees to pay to the Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan included in such Borrowing.
Nothing in this Section 2.5 shall be deemed to relieve any Lender from its
obligation to fulfill its Commitments to the extent required by this Agreement
or to prejudice any rights that the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
2.6 Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a LIBOR Borrowing, may elect
Interest Periods therefor, all as provided in this Section 2.6. The Borrower may
elect different options for continuations and conversions with respect to
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a
separate Borrowing.
(b) To make an election pursuant to this Section 2.6, the Borrower
shall notify the Administrative Agent of such election by telephone by the time
that a Borrowing Request would be required under Section 2.3(a) if the Borrower
were requesting a Borrowing of the Type resulting from such election to be made
on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Interest Election Request
signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.2:
(i) the Borrowing to which such Interest Election Request applies
and, if different options for continuations or conversions are being
elected with respect to
48
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a Base Rate
Borrowing or a LIBOR Borrowing; and
(iv) if the resulting Borrowing is a LIBOR Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a LIBOR Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each affected Lender of the details thereof
and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a LIBOR Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
a Base Rate Borrowing. Notwithstanding any contrary provision hereof, if an
Event of Default has occurred and is continuing and the Administrative Agent, at
the request of the Required Lenders, so notifies the Borrower, then, so long as
an Event of Default is continuing (i) no outstanding Borrowing may be converted
to or continued as a LIBOR Borrowing and (ii) unless repaid, each LIBOR
Borrowing shall be converted to a Base Rate Borrowing at the end of the Interest
Period applicable thereto.
(f) The Borrower shall not be obligated to deliver a Borrowing Request
in connection with any election to convert any Borrowing to a different Type or
to continue any Borrowing or, in the case of a LIBOR Borrowing, any election of
an Interest Period therefor pursuant this Section 2.6.
2.7 Termination and Reduction of Commitments.
(a) Unless previously terminated in accordance with the terms hereof,
the Revolving Credit Commitments shall terminate at the close of business on the
Revolving Credit Maturity Date.
(b) The aggregate amount of the Revolving Credit Commitments shall be
automatically reduced at the close of business on each Revolving Credit
Commitment Reduction Date set forth in column (A) below, each a "Revolving
Credit Commitment Reduction Date", by the amount set forth in column (B) below,
in each case, opposite such Revolving Credit Commitment Reduction Date:
49
(A) (B)
Revolving Credit Amount of
Commitment Reduction Date Commitment Reduction
June 30, and September 30, 2005 $ 5,333,333.33
December 31, 2005 $ 5,333,333.34
March 31, June 30, September 30,
and December 31, 2006 $ 4,000,000.00
March 31, June 30, September 30,
and December 31, 2007 $ 8,000,000.00
March 31, June 30, September 30,
and December 31, 2008 $ 8,000,000.00
March 31, and June 30, 2009 $21,333,333.33
September 30, 2009 $21,333,333.34
; provided that, for each Revolving Credit Commitment Reduction Date, the amount
of the reduction to the Revolving Credit Commitments on such date shall be
increased by an amount equal to the product of (x) the aggregate Revolving
Credit Commitment Increases as of the Revolving Credit Conversion Date, if any,
times (y) a fraction, the numerator of which is the amount of the reduction to
the Revolving Credit Commitments on such date as set forth in column (B) above
and the denominator of which is the aggregate original amount of the Revolving
Credit Commitments. The amount of any optional reductions of Revolving Credit
Commitments under Section 2.7(c) shall be applied to reduce all remaining
Revolving Credit Commitment reductions under this Section 2.7(b) in the order of
such scheduled reductions.
(c) The Borrower may at any time or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is at least equal to $500,000 or any greater multiple of $100,000,
and (ii) the Borrower shall not terminate or reduce the Revolving Credit
Commitments if, after giving effect to any concurrent repayment in accordance
with Section 2.9 or prepayment in accordance with Section 2.10 of the Loans, the
total Revolving Credit Exposure would exceed the total Revolving Credit
Commitments.
(d) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce Commitments under paragraph (c) of this Section
2.7 at least three Business Days prior to the effective date of such termination
or reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section 2.7 shall be irrevocable; provided that a notice of termination
of Revolving Credit
50
Commitments delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice may
be revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of Revolving Credit Commitments shall be permanent.
Each reduction of Revolving Credit Commitments shall be made ratably among the
Revolving Credit Lenders in accordance with their respective Revolving Credit
Commitments.
2.8 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender or the Issuing Lender requests compensation under
Section 2.14, or if the Borrower is required to pay any additional amount to any
Lender or the Issuing Lender or any Governmental Authority for the account of
any Lender or the Issuing Lender pursuant to Section 2.16, then such Lender or
the Issuing Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans or Letters of Credit hereunder, or to
assign its rights and obligations hereunder to another of its offices, branches
or Affiliates, if, in the judgment of such Lender or the Issuing Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.14 or 2.16, as the case may be, in the future and (ii) would not
subject such Lender or the Issuing Lender to any material unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender or the Issuing
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender or the Issuing Lender in connection with any such
designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 10.4), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, the Issuing Lender), which
consents shall not unreasonably be withheld or delayed, (ii) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans (and participations in LC Disbursements), accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.14 or
payments required to be made pursuant to Section 2.16, such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
(c) If a Lender (a "Non-Consenting Lender") refuses to consent to an
amendment, modification or waiver of this Agreement that, pursuant to Section
10.2, requires
51
consent of 100% of the Lenders (any such Lender, a "Subject Lender"), so long as
(i) no Event of Default shall have occurred and be continuing and the Borrower
has obtained a written commitment from another Lender or an Eligible Assignee to
purchase at par (plus accrued interest, fees and other amounts payable to the
Subject Lender hereunder) the Subject Lender's Loans and assume the Subject
Lender's Commitments and all other obligations of the Subject Lender hereunder,
(ii) such Lender is not an Issuing Lender with respect to any Letters of Credit
outstanding (unless all such Letters of Credit are terminated or arrangements
satisfactory to such Issuing Lender (such as a "back-to-back" letter of credit)
are made), (iii) at such time there is no more than one Non-Consenting Lender
and (iv) if applicable, the Subject Lender is unwilling to withdraw its refusal
to consent within 2 Business Days after receipt by the Subject Lender and
Administrative Agent of a written request to do so from the Borrower, the
Borrower may require the Subject Lender to assign all of its Loans and
Commitments to such other Lender, Lenders, Eligible Assignee or Eligible
Assignees pursuant to the provisions of Section 10.4, provided that, prior to or
concurrently with such replacement, (1) the Borrower has paid to the Subject
Lender all amounts required to be paid to such Lender under this Agreement
through the effective date of the assignment, (2) the processing fee required to
be paid by Section 10.4(b)(iv) shall have been paid by the Borrower or the
Assignee to Administrative Agent, (3) all of the requirements for such
assignment contained in Section 10.4, including the consent of Administrative
Agent (if required) and the receipt by Administrative Agent of an executed
Assignment and Acceptance Agreement (which each Subject Lender shall be
obligated to provide with respect to its interest in the Loans in connection
with the Borrower's exercise of its rights under this subsection) and other
supporting documents, have been fulfilled and (4) each assignee shall consent,
at the time of such assignment, to each matter in respect of which such Subject
Lender was a Non-Consenting Lender. Notwithstanding the foregoing no Subject
Lender shall be obligated to assign its Loans unless such Subject Lender
receives payment of the purchase price and all other amounts described in clause
(i) above as a condition to such assignment.
2.9 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Revolving Credit Lender the then
unpaid principal amount of such Lender's Revolving Credit Loans on the Revolving
Credit Maturity Date. In addition, if following any reduction in the Revolving
Credit Commitments or at any other time the aggregate principal amount of the
Revolving Credit Exposure shall exceed the aggregate Revolving Credit
Commitments, the Borrower shall first, repay Revolving Credit Loans, and second,
provide cover for LC Exposure as specified in Section 2.4(i) in an aggregate
amount equal to such excess.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received
52
by the Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section 2.9 shall be prima facie evidence of the existence
and amounts of the obligations recorded therein absent manifest error; provided
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Prior to the Closing Date or if any Lender enters into a
Commitment after the Closing Date on the date of such Commitment, the Borrower
shall prepare, execute and deliver to each Revolving Credit Lender, a Revolving
Credit Note in the principal amount of such Lender's Revolving Credit
Commitment. Thereafter, the Loans of each Lender evidenced by each such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 10.4) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns)
unless, in connection with an assignment of all or any portion of a promissory
note and interest thereon, the assignee informs the Administrative Agent in
writing that it does not wish that its Loans be evidenced by promissory notes.
2.10 Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, without
premium or penalty (other than LIBOR Loan breakage costs as provided in Section
2.15), subject to prior notice in accordance with paragraph (d) of this Section
2.10 and provided that each such prepayment shall be in an amount that is at
least equal to $500,000 or any greater multiple of $100,000. Each prepayment of
Loans shall be applied in accordance with paragraph (c) of this Section 2.10.
(b) Mandatory Prepayments. The Borrower shall make prepayments of the
Loans hereunder (and reduce the Commitments hereunder to the extent provided
below in clauses (i) and (ii)) as follows:
(i) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders to any Disposition
not otherwise permitted hereunder, the Borrower agrees, on or prior to the
occurrence of any Disposition or series of Dispositions by any Credit Party
with aggregate Net Cash Payments in excess of $3,500,000 in any fiscal
year, to deliver to the Administrative Agent a statement certified by a
Financial Officer of the Borrower, in form and detail reasonably
satisfactory to the Administrative Agent, of the estimated amount of the
Net Cash Payments of such Disposition that will (on the date of such
Disposition) be received by any Credit Party in cash, indicating on such
certificate, whether the Borrower intends to reinvest such Net Cash
Payments or will be prepaying the Loans, as hereinafter provided, and the
Borrower will be obligated to either (A) reinvest such Net Cash Payments
within 170 days after receipt into assets used in a Permitted Line of
Business pursuant to one or more Capital Expenditures permitted hereunder
or Acquisitions permitted hereunder; provided that no
53
reinvestment of Net Cash Payments shall be permitted under this clause
(A): (x) for the acquisition of fee interests in real property
(excluding any real property received or acquired in any Acquisition
or Relocation) in excess of $5,000,000 made in the aggregate after the
Closing Date or (y) if and to the extent that such Net Cash Payments
would be required to be used to repay any Subordinated Indebtedness or
Holding Company Debt or purchase or repurchase any notes issued
thereunder or (B) prepay the Loans hereunder (and provide cover for LC
Exposure as specified in Section 2.4(i)), and the Commitments
hereunder shall be subject to automatic reduction, as follows:
(x) within one Business Day after the date of such
Disposition, or on the date (the "Reinvestment Date") which
is 170 days after such date if the Borrower had indicated on
the certificate delivered as hereinabove required that it
intended to reinvest the Net Cash Payments of such
Disposition, in an aggregate amount equal to 100% of such
estimated or non-reinvested (as applicable) amount of such
Net Cash Payments, to the extent received (and not
reinvested as provided above) by any Credit Party in cash on
the date of such Disposition or, if applicable, the
Reinvestment Date; and
(y) thereafter, quarterly, on the date of the delivery by
the Borrower to the Administrative Agent pursuant to Section
6.1 of the financial statements for any quarterly fiscal
period or fiscal year, to the extent any Credit Party shall
receive Net Cash Payments during the quarterly fiscal period
ending on the date of such financial statements in cash
under deferred payment arrangements or Disposition
Investments entered into or received in connection with any
Disposition, an amount equal to (A) 100% of the aggregate
amount of such Net Cash Payments minus (B) any transaction
expenses associated with Dispositions and not previously
deducted in the determination of Net Cash Payments plus (or
minus, as the case may be) (C) any other adjustment received
or paid by any Credit Party pursuant to the respective
agreements giving rise to Dispositions and not previously
taken into account in the determination of the Net Cash
Payments.
(ii) Proceeds of Casualty Events. Upon the date 180 days
following the receipt by any Credit Party of the proceeds of
insurance, condemnation awards or other compensation in respect of any
Casualty Event affecting any property of any Credit Party (or upon
such earlier date as such Credit Party, as the case may be, shall have
determined not to repair or replace the property affected by such
Casualty Event), to the extent of Net Cash Payments in excess of
$250,000 per occurrence and $500,000 for all occurrences after the
Closing Date (except that such exclusions shall not apply after the
occurrence and during the continuation of an Event of Default) the
Borrower shall prepay the Loans (and provide cover for LC Exposure as
specified in Section 2.4(i)), and, if applicable, the Commitments
shall be subject to automatic reduction, in an aggregate amount, if
any, equal to 100% of the Net Cash Payments from such Casualty Event
not theretofore applied or committed to be applied to the repair or
replacement of such property (it being understood that if Net Cash
Payments committed to be applied are not
54
in fact applied within 360 days after receipt thereof, then such Net
Cash Payments shall be applied to the prepayment of Loans, cover for
LC Exposure and, reduction of Commitments as provided in this clause
(ii) at the expiration of such 360-day period), such prepayment and
reduction to be effected in each case in the manner and to the extent
specified in paragraph (c) of this Section 2.10.
(iii) On the date of the incurrence by the Borrower of any
Indebtedness under the proviso to Section 7.1(k), the Borrower shall
deliver to the Administrative Agent a statement certified by a
financial officer of the Borrower, in form and detail reasonably
satisfactory to the Administrative Agent, of the estimated amount of
the net cash proceeds (net of all legal, underwriting and other fees,
costs and expenses incurred in connection with the incurrence of such
Indebtedness) from such incurrence of such Indebtedness that will (on
the date of such incurrence of Indebtedness) be received by the
Borrower and the Borrower will, prepay the Loans hereunder (and
provide cover for LC Exposure as specified in Section 2.4(i)), with no
reduction of the Commitments hereunder, on the date of such incurrence
of Indebtedness, in an aggregate amount equal to the lesser of (A)
100% of the net cash proceeds (net of all legal, underwriting and
other fees, costs and expenses incurred in connection with the
incurrence of such Indebtedness) from such incurrence of Indebtedness
received by the Borrower and (B) the sum of the aggregate amount of
Loans outstanding plus LC Exposure then in effect, and such prepayment
(other than the amount provided to cover LC Exposure) shall be shared
and applied ratably among the Revolving Credit Lenders in proportion
to their respective Revolving Credit Commitments (with no reduction to
the Revolving Credit Commitments).
Notwithstanding anything herein to the contrary, (i) in the event
any radio or television station owned by any Credit Party is sold, as
permitted by paragraph (f) of Section 7.4, during the continuance of
any Event of Default, all Net Cash Payments shall be applied in the
manner specified in paragraph (c) of this Section 2.10, and (ii) in
the event that any of the Credit Parties shall have consummated (I)
any "Asset Sale" (as defined in the Senior Subordinated Note
Indenture) or (II) any "Sale of the Company" (as defined in the
Holdings Securities Purchase Documents) that, in either case, would
not be deemed a Disposition requiring a prepayment under this Section
2.10(b), in any such case, the Credit Parties shall nonetheless prepay
the Loans to the extent that the Senior Subordinated Note Indenture or
the Holdings Securities Purchase Documents would require any
prepayment or redemption of the Senior Subordinated Notes or any
Holding Company Debt or warrants issued by any Holding Company
pursuant to the Holdings Securities Purchase Documents, respectively.
Prepayments of Loans (and cover for LC Exposure) and reductions of
Commitments shall be effected in each case in the manner and to the
extent specified in paragraph (c) of this Section 2.10.
(c) Application. The Borrower shall have the right at any time
to cause voluntary prepayments pursuant to subsection (a) of this Section to be
applied to prepay the Revolving Credit Loans, and such prepayment shall be
applied ratably among the Revolving Credit Lenders in proportion to their
respective Revolving Credit Commitments (with no reduction to the Revolving
Credit Commitments). Subject to the preceding sentence and subject to the
prepayment made pursuant to the subsection (b)(iii) of this Section being
applied in
55
accordance with such subsection (b)(iii) (with no reduction to the Revolving
Credit Commitments), in the event of any optional prepayment of Borrowings
pursuant to subsection (a) of this Section, or any mandatory prepayment of Loans
pursuant to subsection (b) of this Section, the proceeds shall be applied as
follows:
(i) first, to the extent that Revolving Credit Exposure shall at
such time exceed the total Revolving Credit Commitments, such prepayment
shall be applied to the repayment of Revolving Credit Loans to be shared
and applied ratably among the Revolving Credit Lenders in proportion to
their respective Revolving Credit Commitments (with no reduction to the
Revolving Credit Commitments); and
(ii) second, (A) the amount of any optional prepayment shall be
applied to the repayment of Revolving Credit Loans, and (B) the amount of
any mandatory prepayment shall be applied first, to the repayment of
Revolving Credit Loans and, second, to provide cover for LC Exposure, and,
in the case of clause (B), to the simultaneous permanent reduction of the
Revolving Credit Commitments, in each case to be shared and applied ratably
among the Revolving Credit Lenders in proportion to their respective
Revolving Credit Commitments. Each such reduction of the Revolving Credit
Commitments shall be applied to reduce all remaining scheduled Revolving
Credit Commitment reductions under Section 2.7(b) pro rata based upon the
respective amounts of such scheduled reductions. Optional prepayments
pursuant to the first sentence of this clause (c) shall not reduce the
remaining scheduled Revolving Credit Commitment reductions.
(d) Notification of Prepayments. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
under Sections 2.10(a) or 2.10(b) not later than 1:00 p.m., Boston,
Massachusetts time, three Business Days before the date of prepayment, except
that prepayments of Base Rate Loans pursuant to Section 2.10(a) may be made upon
one Business Day's notice. Each such notice shall be irrevocable and shall
specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given
in connection with a conditional notice of termination of Revolving Credit
Commitments as contemplated by Section 2.7(d), then such notice of prepayment
may be revoked if such notice of termination is revoked in accordance with
Section 2.7. Promptly following receipt of any such notice relating to a
Borrowing, the Administrative Agent shall advise the Lenders of the contents
thereof. Each partial prepayment of any Borrowing under paragraph (a) of this
Section 2.10 shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.2.
(e) Prepayments Accompanied by Interest. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.12.
2.11 Fees.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at a rate per annum
equal to the percentage set forth below opposite the Commitment Utilization
Percentage with respect to each day (the "Commitment Fee Rate") of the daily
unused amount of the respective Revolving Credit
56
Commitment of such Lender during the period from and including the date on which
the Effective Time shall occur to but excluding the date on which such Revolving
Credit Commitment terminates:
Commitment Utilization Percentage Commitment Fee Rate
--------------------------------- -------------------
Less than 50% 0.500%
Greater than or equal to 50% 0.375%
The Commitment Fee Rate shall be calculated on each Quarterly Date for each day
occurring during the fiscal quarter then ending.
(b) Accrued commitment fees shall be payable in arrears on each
Quarterly Date and on the date such Commitments terminate, commencing on the
first such date to occur after the Closing Date. All commitment fees shall be
computed on the basis of a year of 365 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay with respect to Letters of Credit
outstanding hereunder the following fees:
(i) to the Administrative Agent for the account of each Revolving
Credit Lender a participation fee with respect to its participations in
Letters of Credit, which shall accrue at a rate per annum equal to the
Applicable Margin then used in determining interest on Revolving Credit
LIBOR Loans on the average daily amount of such Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Closing Date to but
excluding the later of the date on which such Lender's Revolving Credit
Commitment terminates and the date on which there shall no longer be any
Letters of Credit outstanding hereunder, and
(ii) to the Issuing Lender (x) a fronting fee for its own account,
equal to 0.25% per annum on the face amount of each Letter of Credit,
payable in arrears on each Quarterly Date, and (y) the Issuing Lender's
standard fees with respect to the issuance, amendment, renewal or extension
of any Letter of Credit or processing of drawings thereunder.
Accrued participation fees shall be payable in arrears on each Quarterly Date
and on the date the Revolving Credit Commitments terminate, commencing on the
first such date to occur after the date hereof, provided that any such fees
accruing after the date on which the Revolving Credit Commitments terminate
shall be payable on demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
57
(d) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed in
writing between the Borrower and the Administrative Agent.
(e) All fees payable hereunder shall be paid on the dates due, in
immediately available funds. Fees paid shall not be refundable under any
circumstances, absent manifest error in the determination thereof.
2.12 Interest.
(a) The Loans comprising each Base Rate Borrowing shall bear interest
at a rate per annum equal to the Adjusted Base Rate plus the Applicable Margin.
(b) The Loans comprising each LIBOR Borrowing shall bear interest at a
rate per annum equal to the Adjusted LIBO Rate for the Interest Period in effect
for such Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, (i) all amounts which are not paid
when due shall bear interest until paid in full at the Post-Default Rate and
(ii) during the period when any Event of Default shall have occurred and be
continuing, immediately upon the delivery of written notice from the
Administrative Agent to the Borrower at the request of the Required Lenders the
principal of all Loans hereunder shall bear interest, after as well as before
judgment, at the Post-Default Rate.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan; provided that (i) interest accrued at the
Post-Default Rate shall be payable on demand, (ii) in the event of any repayment
or prepayment of any LIBOR Loan, accrued interest on the principal amount repaid
or prepaid shall be payable on the date of such repayment or prepayment, (iii)
in the event of any conversion of any LIBOR Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion and (iv) all accrued interest on Revolving
Credit Loans shall be payable upon expiration of the Revolving Credit
Commitments.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Adjusted Base Rate
at times when the Adjusted Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Adjusted Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
(f) Notwithstanding anything to the contrary set forth herein, the
aggregate interest, fees and other amounts required to be paid by the Borrower
to the Lenders or any Lender hereunder are hereby expressly limited so that in
no contingency or event whatsoever whether by reason of acceleration of maturity
of the Indebtedness evidenced hereby or otherwise, shall the amount paid or
agreed to be paid to the Lenders or any Lender for the use or the forbearance of
the Indebtedness evidenced hereby exceed the maximum permissible under
applicable law. If under or from any circumstances whatsoever, fulfillment of
any provision
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hereof or of any of the other Loan Documents at the time of performance of such
provision shall be due, shall involve transcending the limit of such validity
prescribed by applicable law then the obligation to be fulfilled shall
automatically be reduced to the limits of such validity and if under or from
circumstances whatsoever the Lenders or any Lender should ever receive as
interest any amount which would exceed the highest lawful rate, the amount of
such interest that is excessive shall be applied to the reduction of the
principal balance of the Indebtedness evidenced hereby and not to the payment of
interest. This provision shall control every other provision of this Agreement
and all provisions of every other Loan Document.
2.13 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a LIBOR Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable,
for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
affected Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and such Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any such Borrowing to, or
continuation of any such Borrowing as, a LIBOR Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a LIBOR Borrowing, such Borrowing
shall be made as a Base Rate Borrowing.
2.14 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Lender; or
(ii) impose on any Lender or the Issuing Lender or the London
interbank market any other condition affecting this Agreement or LIBOR
Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan) or to increase the cost to such Lender or the Issuing
Lender of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Lender hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts
59
as will compensate such Lender or the Issuing Lender, as the case may be, for
such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Lender reasonably determines that any
Change in Law regarding capital requirements has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Lender's capital or
on the capital of such Lender's or the Issuing Lender's holding company, if any,
as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued the
Issuing Lender, to a level below that which such Lender or the Issuing Lender or
such Lender's or the Issuing Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's or the Issuing
Lender's policies and the policies of such Lender's or the Issuing Lender's
holding company with respect to capital adequacy), then from time to time the
Borrower will pay to such Lender or the Issuing Lender, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing
Lender, or such Lender's or the Issuing Lender's holding company, for any such
reduction suffered.
(c) A certificate of a Lender or the Issuing Lender setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Lender or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section 2.14 shall be delivered to the Borrower and shall be conclusive so
long as it reflects a reasonable basis for the calculation of the amounts set
forth therein and does not contain any manifest error. The Borrower shall pay
such Lender or the Issuing Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Lender
to demand compensation pursuant to this Section 2.14 shall not constitute a
waiver of such Lender's or the Issuing Lender's right to demand such
compensation; provided that the Borrower shall not be required to compensate a
Lender or the Issuing Lender pursuant to this Section 2.14 for any increased
costs or reductions incurred more than six months prior to the date that such
Lender or the Issuing Lender, as the case may be, notifies the Borrower of the
Change in Law giving rise to such increased costs or reductions and of such
Lender's or the Issuing Lender's intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs
or reductions is (i) retroactive and (ii) occurred within such six-month period,
then the six-month period referred to above may be extended to include the
period of retroactive effect thereof, but in no event any period prior to the
Closing Date.
2.15 Break Funding Payments.
(a) In the event of (i) the payment of any principal of any LIBOR Loan
other than on the last day of an Interest Period applicable thereto (including
as a result of an Event of Default), (ii) the conversion of any LIBOR Loan other
than on the last day of the Interest Period applicable thereto, (iii) the
failure to borrow, convert, continue or prepay any LIBOR Loan on the date
specified in any notice delivered pursuant hereto (regardless of whether such
notice is permitted to be revocable and is revoked in accordance herewith) or
(iv) the assignment of any LIBOR Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.8, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event; provided that if
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the occurrence of any event described in clause (iii) above shall occur solely
as a result of any Lender's failure to make available such Lender's share of any
LIBOR Borrowing, such Lender shall not be entitled to compensation under this
Section 2.15(a) with respect to such event. Nothing in this Section 2.15 shall
be deemed to relieve any Lender from its obligation to fulfill its Commitments
to the extent required by this Agreement or to prejudice any rights that the
Borrower may have against any Lender as a result of any default by such Lender
hereunder.
(b) In the case of a LIBOR Loan, the loss to any Lender attributable
to any such event shall be deemed to include an amount determined by such Lender
to be equal to the excess, if any, of
(i) the amount of interest that such Lender would pay for a
deposit equal to the principal amount of such Loan for the period from the
date of such payment, conversion, failure or assignment to the last day of
the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the duration of the Interest Period
that would have resulted from such borrowing, conversion or continuation)
if the interest rate payable on such deposit were equal to the Adjusted
LIBO Rate for such Interest Period (or if such Lender does not accept
deposits, then the Adjusted LIBO Rate for such Interest Period),
over
(ii) the amount of interest that such Lender would earn on such
principal amount for such period if such Lender were to invest such
principal amount for such period at the interest rate that would be bid by
such Lender (or an Affiliate of such Lender) for U.S. dollar deposits from
other banks in the LIBOR market at the commencement of such period.
(c) A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section 2.15 shall be
delivered to the Borrower and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
2.16 Taxes.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.16) the Administrative Agent, any Lender or the Issuing
Lender (as the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall make such
deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
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(c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Lender, within 10 days after written demand therefor, for the
full amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 2.16) paid by the Administrative Agent, such Lender or the Issuing
Lender, as the case may be (and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto during the period prior to the
Borrower making the payment demanded under this paragraph (c)), whether or not
such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the Borrower by a Lender or the
Issuing Lender, or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuing Lender, shall be conclusive absent manifest error. If
the Administrative Agent, a Lender or the Issuing Lender (as the case may be)
shall become aware that it is entitled to claim a refund from a Governmental
Authority in respect of any Indemnified Taxes or Other Taxes as to which it has
been indemnified by the Borrower, or with respect to which the Borrower has paid
increased amounts pursuant to this Section 2.16, such Lender shall notify the
Borrower of the availability of such refund claim and shall exercise reasonable
efforts (at no cost to such Lender) to make the appropriate claim to such
Governmental Authority for such a refund. In the event any such Indemnified
Taxes or Other Taxes paid by the Borrower to the Administrative Agent, a Lender
or the Issuing Lender are refunded to such Administrative Agent, Lender or
Issuing Lender, the Lender receiving such refund shall forthwith pay over such
amount to the Administrative Agent and each such refunded amount shall be (i)
applied to prepay interest payable on the Revolving Credit Loans, or to pay any
other obligations of the Credit Parties then due hereunder, or (ii) in the event
all obligations hereunder and under all of the Loan Documents have been
indefeasibly paid in full, refunded to the Borrower.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of any
receipt issued by such Governmental Authority to the Borrower evidencing such
payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of a jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate.
2.17 Payments Generally: Pro Rata Treatment; Sharing of Set-Offs.
(a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or under Sections 2.14, 2.15 or 2.16, or otherwise) prior to 1:00
p.m., Boston, Massachusetts time, on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Administrative Agent, be
62
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the
Administrative Agent at such of its offices in Boston, Massachusetts as shall be
notified to the relevant parties from time to time, except payments to be made
directly to the Issuing Lender as expressly provided herein and except that
payments pursuant to Sections 2.14, 2.15 or 2.16 and 10.3 shall be made directly
to the Persons entitled thereto. The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof, and the Borrower shall
have no liability in the event timely or correct distribution of such payments
is not so made. If any payment hereunder shall be due on a day that is not a
Business Day, the date for payment shall be extended to the next succeeding
Business Day, and, in the case of any payment accruing interest, interest
thereon shall be payable for the period of such extension. All payments
hereunder shall be made in U.S. dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder under any circumstances,
including during, or as a result of the exercise by the Administrative Agent or
the Lenders of remedies under the Collateral Documents and applicable law, such
funds shall be applied (i) first, to pay interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, (ii) second, to pay principal and
unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties and (iii) third, to obligations with
respect to Hedging Agreements entered into by a Lender; in each case, regardless
of whether such funds are the proceeds of Collateral that is security for less
than all of the Loans.
(c) If any Revolving Credit Lender shall obtain any payment (whether
voluntary, involuntary, through the exercise of set-off or otherwise) on account
of the Revolving Credit Loans made by it (other than pursuant to Sections 2.4,
2.14 or 2.16), then, if there is any Reimbursement Obligation outstanding in
respect of which the Issuing Lender has not received payment in full from such
Revolving Credit Lender pursuant to Section 2.4(e) (the amount of such
Reimbursement Obligation being such Revolving Credit Lender's "LC Deficiency
Amount"), such Revolving Credit Lender shall purchase a participation in such
Reimbursement Obligation in an amount equal to such Lender's LC Deficiency
Amount. If, after giving effect to the foregoing, any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans (or participations
in LC Disbursements) (other than pursuant to Sections 2.4, 2.14 or 2.16),
resulting in such Lender receiving payment of a greater proportion of the
aggregate principal amount of its Loans (and participations in LC Disbursements)
and accrued interest thereon than the proportion of such amounts received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans (and LC Disbursements) of
the other Lenders to the extent necessary so that the benefit of such payments
shall be shared by all the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans (and
participations in LC Disbursements); provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to
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apply to any payment obtained by a Lender as consideration for the assignment of
or sale of a participation in any of its Loans (or participations in LC
Disbursements) to any assignee or participant, other than to any Credit Party or
any Subsidiary or Affiliate thereof (as to which the provisions of this
paragraph shall apply). The Borrower consents to the foregoing and agrees, to
the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Lender entitled thereto (the
"Applicable Recipient") hereunder that the Borrower will not make such payment,
the Administrative Agent may assume that the Borrower has made such payment on
such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Applicable Recipient the amount due. In such event, if the
Borrower has not in fact made such payment, then each Applicable Recipient
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Applicable Recipient with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the Federal Funds
Effective Rate.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.4(d), 2.4(e), 2.5(b), or 2.17(d), then the
Administrative Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Administrative
Agent for the account of such Lender to satisfy such Lender's obligations under
such Section until all such unsatisfied obligations are fully paid.
ARTICLE 3
Guarantee by Guarantors
3.1 The Guarantee. Each Guarantor hereby jointly and severally guarantees
to each Lender, the Issuing Lender and the Administrative Agent and their
respective successors and assigns the prompt payment and performance in full
when due (whether at stated maturity, by acceleration or otherwise) of the
principal of and interest on the Loans made by the Lenders to the Borrower, all
LC Disbursements and all other amounts from time to time owing to the Lenders,
the Issuing Lender or the Administrative Agent by the Borrower hereunder or
under any other Loan Document, and all other obligations of the Borrower to any
Lender hereunder or under any Hedging Agreement, in each case strictly in
accordance with the terms thereof (such obligations being herein collectively
called the "Guaranteed Obligations"). Each Guarantor hereby further agrees that
if the Borrower shall fail to pay in full when due (whether at stated maturity,
by acceleration or otherwise) any of the Guaranteed Obligations, each Guarantor
will promptly pay the same, without any demand or notice whatsoever, and that in
the case of any extension of time of payment or renewal of any of the Guaranteed
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, by acceleration or otherwise) in accordance with the terms of
such extension or renewal.
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3.2 Obligations Unconditional. The obligations of each Guarantor under
Section 3.1 are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of this Agreement, the other
Loan Documents or any other agreement or instrument referred to herein or
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 3.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Guarantors hereunder which shall
remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to such
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(ii) any of the acts mentioned in any of the provisions hereof or
of the other Loan Documents or any other agreement or instrument referred
to herein or therein shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under the
other Loan Documents or any other agreement or instrument referred to
herein or therein shall be waived or any other guarantee of any of the
Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or
(iv) any lien or security interest granted to, or in favor of, the
Administrative Agent, the Issuing Lender or any Lender or Lenders as
security for any of the Guaranteed Obligations shall fail to be perfected
or any Collateral is released or otherwise compromised or liquidated for
less than fair value.
The Guarantors hereby expressly waive diligence, presentment, demand of payment,
protest and all notices whatsoever (except as expressly required hereby) and any
requirement that the Administrative Agent, the Issuing Lender or any Lender
exhaust any right, power or remedy or proceed against the Borrower hereunder or
under the other Loan Documents or any other agreement or instrument referred to
herein or therein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
3.3 Reinstatement. The obligations of each Guarantor under this Article 3
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of the Borrower in respect of the Guaranteed Obligations
is rescinded or must be otherwise restored by any holder of any of the
Guaranteed Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each of the Guarantors agrees that it will
indemnify the Administrative Agent, the Issuing Lender and each Lender on demand
for all reasonable costs and expenses (including reasonable fees and expenses of
counsel) incurred by
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the Administrative Agent, any Lender or the Issuing Lender in connection with
such rescission or restoration, including any such costs and expenses incurred
in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
3.4 Subrogation. Until such time as the Guaranteed Obligations shall have
been indefeasibly paid in full, each Guarantor hereby waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including any such right arising under the Federal Bankruptcy Code of 1978, as
amended) or otherwise by reason of any payment by it pursuant to the provisions
of this Article 3 and further agrees with the Borrower for the benefit of each
of its creditors (including each Lender, the Issuing Lender and the
Administrative Agent) that any such payment by it shall constitute a
contribution of capital by such Guarantor to the Borrower.
3.5 Remedies. Each Guarantor agrees that, as between such Guarantor and the
Lenders, the obligations of the Borrower hereunder may be declared to be
forthwith due and payable as provided in Section 8.1 or Section 2.4(i), as
applicable (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 8.1 or Section 2.4(i), as applicable) for
purposes of Section 3.1 notwithstanding any stay, injunction or other
prohibition preventing such declaration (or such obligations from becoming
automatically due and payable) as against the Borrower and that, in the event of
such declaration (or such obligations being deemed to have become automatically
due and payable), such obligations (whether or not due and payable by the
Borrower) shall forthwith become due and payable by such Guarantor for purposes
of Section 3.1.
3.6 Continuing Guarantee. The guarantee in this Article 3 is a continuing
irrevocable guarantee of payment and performance, and shall apply to all
Guaranteed Obligations prior to the indefeasible payment in full of Borrower's
obligations hereunder.
3.7 Rights of Contribution. The Guarantors hereby agree, as between
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below) by reason of the payment by such Guarantor of any Guaranteed
Obligations, each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the next sentence), pay to such Excess Funding
Guarantor an amount equal to such Guarantor's Pro Rata Share (as defined below
and determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Guarantor to any Excess Funding Guarantor under this Section 3.7 shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Guarantor under the other provisions of this Article 3 and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations.
For purposes of this Section 3.7, (i) "Excess Funding Guarantor" means, in
respect of any Guaranteed Obligations, a Guarantor that has paid an amount in
excess of its Pro Rata Share of such Guaranteed Obligations, (ii) "Excess
Payment" means, in respect of any Guaranteed Obligations, the amount paid by an
Excess Funding Guarantor in excess of its Pro Rata Share of such Guaranteed
Obligations and (iii) "Pro Rata Share" means, for any Guarantor, the ratio
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(expressed as a percentage) of (x) the amount by which the aggregate present
fair saleable value of all properties of such Guarantor (excluding any shares of
stock of, or ownership interest in, any other Guarantor) exceeds the amount of
all the debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder and any obligations of any other
Guarantor that have been Guaranteed by such Guarantor) to (y) the amount by
which the aggregate fair saleable value of all properties of all of the Credit
Parties exceeds the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities, but excluding
the obligations of the Borrower and the Guarantors hereunder and under the other
Loan Documents) of all of the Credit Parties, determined (A) with respect to any
Guarantor that is a party hereto at the Effective Time, as of the Effective
Time, and (B) with respect to any other Guarantor, as of the date such Guarantor
becomes a Guarantor hereunder.
3.8 General Limitation on Guarantee Obligations. In any action or
proceeding involving any state or non-U.S. corporate law, or any state or
Federal or non-U.S. bankruptcy, insolvency, reorganization or other law
affecting the rights of creditors generally, if the obligations of any Guarantor
under Section 3.1 would otherwise, taking into account the provisions of Section
3.7, be held or determined to be void, invalid or unenforceable, or subordinated
to the claims of any other creditors, on account of the amount of its liability
under Section 3.1, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by such
Guarantor, any Lender, Agent or other Person, be automatically limited and
reduced to the highest amount that is valid and enforceable and not subordinated
to the claims of other creditors as determined in such action or proceeding.
3.9 Waivers. As used in this paragraph, any reference to "the principal"
includes the Borrower, and any reference to "the creditor" includes the
Administrative Agent and each of the Lenders. In accordance with Section 2856 of
the California Civil Code (a) each Guarantor waives any and all rights and
defenses available to such Guarantor by reason of Sections 2787 to 2855,
inclusive, 2899 and 3433 of the California Civil Code, including without
limitation any and all rights or defenses any Guarantor may have by reason of
protection afforded to the principal with respect to any of the Guaranteed
Obligations, or to any other guarantor of any of the Guaranteed Obligations with
respect to any of such guarantor's obligations under its guaranty, in either
case pursuant to the antideficiency or other laws of the State of California
limiting or discharging the principal's indebtedness or such guarantor's
obligations, including without limitation Section 580a, 580b, 580d, or 726 of
the California Code of Civil Procedure; and (b) each Guarantor waives all rights
and defenses arising out of an election of remedies by the creditor, even though
that election of remedies, such as a nonjudicial foreclosure with respect to
security for a Guaranteed Obligation, has destroyed Guarantor's rights of
subrogation and reimbursement against the principal by the operation of Section
580d of the Code of Civil Procedure or otherwise; and even though that election
of remedies by the creditor, such as nonjudicial foreclosure with respect to
security for an obligation of any other guarantor of any of the Guaranteed
Obligations, has destroyed Guarantor's rights of contribution against such other
guarantor. No other provision of this Guaranty shall be construed as limiting
the generality of any of the covenants and waivers set forth in this paragraph.
As provided below, this Agreement shall be governed by, and shall be construed
and enforced in accordance with, the internal laws of the Commonwealth of
Massachusetts, without regard to conflicts of laws principles. This paragraph is
included solely out of an abundance of caution, and shall not be construed to
mean
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that any of the above-referenced provisions of California law are in any way
applicable to the provisions of this Article 3 or to any of the Guaranteed
Obligations.
ARTICLE 4
Representations and Warranties
Each of the Credit Parties and Empire Burbank represents and warrants
to the Lenders, the Issuing Lender and the Administrative Agent, as to itself
and each other Credit Party and Empire Burbank that:
4.1 Organization; Powers. Each Credit Party and Empire Burbank has
been duly formed or organized and is validly existing under the laws of
formations or its jurisdiction of organization. Each Credit Party and Empire
Burbank has all requisite organizational power and authority to carry on its
business as now conducted and is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure to have such power or authority or to be so qualified or in
good standing, individually or in the aggregate, would not reasonably be
expected to result in a Material Adverse Effect.
4.2 Authorization; Enforceability. The Transactions are within the
organizational power and authority of each Credit Party and Empire Burbank to
the extent such Credit Party or Empire Burbank, as applicable, is a party to the
Basic Documents and have been duly authorized by all necessary organizational
action on the part of such Credit Party or Empire Burbank, as applicable, to the
extent such Credit Party or Empire Burbank, as applicable, is a party thereto.
This Agreement, the Collateral Documents and all other Basic Documents have been
duly authorized, executed and delivered by each Credit Party or Empire Burbank,
that is a party thereto and constitute legal, valid and binding obligations of
such Credit Party or Empire Burbank, as applicable, enforceable in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
4.3 Governmental Approvals; No Conflicts. As of the Closing Date and
each Acquisition Date except as set forth on Schedule 4.3, the Transactions (a)
do not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, (b) will not violate any applicable
law, policy or regulation or the organizational documents of any Credit Party or
Empire Burbank that is a party to the Basic Documents or any order of any
Governmental Authority where any violation would have a Material Adverse Effect,
(c) will not violate or result in a default under any material indenture,
agreement or other instrument binding upon any Credit Party or Empire Burbank,
or any assets, or give rise to a right thereunder to require any payment to be
made by any Credit Party or Empire Burbank, where any such violation or default
or right to payment would have a Material Adverse Effect, and (d) except for the
Liens created by the Collateral Documents, will not result in the creation or
imposition of any material Lien on any asset of any Credit Party or Empire
Burbank. Except as set forth therein, all consents, approvals, registrations,
filings and other actions required as set
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forth in such Schedule 4.3 have been obtained on or before the Closing Date or,
with respect to any consents, approvals, registrations, filings and other
actions related to the consummation of the El Dorado Acquisitions or the
Guajillo Acquisitions, will be obtained on or before their respective
Acquisition Dates.
4.4 Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore delivered to the Lenders the following
financial statements:
(i) the audited consolidated balance sheet, statements of
earnings, statements of stockholders' equity, statements of cash flows and
notes to consolidated financial statements of Holdings I and the applicable
Credit Parties as of and for fiscal years ended December 31, 1999, 2000 and
2001, respectively, accompanied by an opinion of Ernst & Young, LLP
independent public accountants;
(ii) the unaudited consolidated balance sheet and income
statement to consolidated financial statements of Holdings I and the
applicable Credit Parties as of and for the three-month period ended March
31, 2002, certified by the executive vice president of Holdings I that such
financial statements fairly present in all material respects (subject, in
the case of such balance sheet as at March 31, 2002 and such statements of
income and cash flows for the three months then ended, to normal year-end
audit adjustments) the consolidated financial condition of Holdings I and
the applicable Credit Parties as at such dates and the consolidated results
of the operations of Holdings I and the applicable Credit Parties for the
periods ended on such dates and that all such financial statements,
including the related schedules thereto have been prepared in accordance
with GAAP applied consistently throughout the periods involved; and
(iii) projected statements of cash flow for the Credit Parties for
fiscal years 2002 through 2009.
Such financial statements (except for any portion thereof which represents a
projection or assumption as to future events of the date of such statement,
including any financial projections and pro formas) in the Borrower's opinion
present fairly, in all material respects, the respective actual consolidated
financial position and results of operations and cash flows of the respective
entities as of such respective dates and for such periods in accordance with
GAAP, subject to year-end audit adjustments and the absence of footnotes in the
case of such unaudited statements. Such pro forma statements were prepared by
the Credit Parties in good faith and incorporate adjustments that were
reasonable when made. Such projections were prepared by the Credit Parties in
good faith and were based on assumptions that the Credit Parties believed were
reasonable when made.
(b) Since March 31, 2002, there has been no change in the business,
assets, operations or condition, financial or otherwise, of the Credit Parties
taken as a whole from that set forth in the March 31, 2002 unaudited
consolidated financial statements referred to in clause (ii) of paragraph (a)
above that has a Material Adverse Effect.
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(c) None of the Credit Parties has on the date hereof any contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments in each case
that are material in relation to the Credit Parties taken as a whole, except as
referred to or reflected or provided for in the balance sheets as at the end of
their respective fiscal years ended in 2000 and 2001 and as at the end of the
fiscal quarter ended on March 31, 2002, referred to above, as provided for in
Schedule 4.4, or as otherwise expressly provided in this Agreement, or as
referred to or reflected or provided for in the financial statements described
in this Section 4.4.
4.5 Properties.
(a) Each of the Credit Parties has good and marketable title to, or
valid, subsisting and enforceable leasehold interests in, all its Property
material to its business, except where the failure to have such good and
marketable title or leasehold or license interests could not reasonably be
expected to have a Material Adverse Effect.
(b) As of the Closing Date and each Acquisition Date except as
disclosed on Schedule 4.5(b), each of the Credit Parties owns, or is licensed to
use, all trademarks, service marks, trade names, copyrights, patents and other
intellectual property material to its business (including the call letters with
respect to each Broadcast Station) (excluding rights related to software
programs and copyrights with respect to the content of news and other
programming broadcast or disseminated as part of the Permitted Lines of
Business) as currently conducted except for those failure to own or license
which would not reasonably be expected to have a Material Adverse Effect (the
"Proprietary Rights"), and, to the Borrower's knowledge, the use thereof by the
Credit Parties does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect. As of the Closing
Date and each Acquisition Date, all such trademark applications and
registrations, trademarks, registered copyrights, patents and patent
applications, together with the domain names, web sites, and web site
registrations which are owned by or licensed to any Credit Party are listed on
Schedule 4.5(b) (collectively "Registered Rights"). As of the Closing Date and
each Acquisition Date, except as set forth on Schedule 4.5, all of the
Registered Rights have been duly registered in, filed in or issued by the PTO,
the United States Register of Copyrights, a domain name registrar or other
corresponding offices of other jurisdictions as identified on such schedule, and
have been properly maintained and renewed in accordance with all applicable
provisions of law and administrative regulations in the United States or in each
such other jurisdiction, as applicable, except where the failure to so register,
file, maintain or renew would not reasonably be expected to result in a Material
Adverse Effect.
(c) As of the Closing Date and each Acquisition Date, Schedule 4.5(c)
contains a true, accurate and complete list of (i) all owned Real Property
Assets and (ii) all material leases, subleases or assignments of leases
(together with all material amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of any Credit
Party, regardless of whether such Credit Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Closing Date and each Acquisition Date, to the
Borrower's knowledge except as specified in clause (ii) of Parts I and II of
Schedule 4.5(c), each agreement listed in
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clause (ii) of the immediately preceding sentence is in full force and effect
and, to the Borrower's knowledge, no material default has occurred and is
continuing thereunder, and each such agreement constitutes the legal, valid and
binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles.
4.6 Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority which have been filed against or, to the
Borrower's knowledge, threatened against or affecting the Credit Parties (i) as
to which there is a reasonable possibility of an adverse determination and that,
if adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve any of the Loan Documents.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, none of the Credit Parties (i)
has failed to comply with any Environmental Law or to obtain, maintain or comply
with any permit, license or other approval required under any Environmental Law,
(ii) to the Borrower's knowledge, has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or any inquiry, allegation, notice or other
communication from any Governmental Authority which is currently outstanding or
pending concerning its compliance with any Environmental Law or (iv) knows of
any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of (i) the Disclosed Matters (excluding the Disclosed Matters related to
potential Environmental Liabilities) or (ii) to the Borrower's knowledge, the
Disclosed Matters related to potential Environmental Liabilities, that, in each
case, individually or in the aggregate, has resulted in, or materially increased
the likelihood of, a Material Adverse Effect.
4.7 Compliance with Laws and Agreements. Except as set forth on Schedule
4.7, each of the Credit Parties is in compliance with all laws, regulations,
policies and orders of any Governmental Authority applicable to it or its
property and all indentures, agreements and other instruments binding upon it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
4.8 Investment and Holding Company Status. No Credit Party is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended, (b) a "holding company" as defined
in, or subject to regulation under, the Public Utility Holding Company Act of
1935, as amended or (c) a "bank holding company" as defined in, or subject to
regulation under, the Bank Holding Company Act of 1956, as amended.
4.9 Taxes. Except as set forth on Schedule 4.9, each of the Credit Parties
has timely filed or caused to be filed all Tax returns and reports required to
have been filed and has paid or
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caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
such Credit Party has set aside on its books adequate reserves with respect
thereto in accordance with GAAP or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.
4.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur
that, when taken together with all other such ERISA Events for which liability
is reasonably expected to occur, could reasonably be expected to result in a
Material Adverse Effect.
4.11 Disclosure. As of the Closing Date and each Acquisition Date, the
management structure of the Credit Parties after giving effect to the
Transactions occurring on or prior to such date is set forth on Schedule 4.11.
The information, reports, financial statements, exhibits and schedules furnished
in writing by or on behalf of the Credit Parties or the Holding Companies to the
Administrative Agent or any Lender, both in connection with the negotiation,
preparation or delivery of this Agreement and the other Basic Documents or
included herein or therein or delivered pursuant hereto or thereto, prepared by
the Administrative Agent in reliance on such information, when taken as a whole
do not contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, not misleading in any material
respect at the time made or delivered.
4.12 Ownership and Capitalization. As of the Closing Date and each
Acquisition Date, the capital structure and ownership of the Credit Parties and
the Holding Companies, both before and after giving effect to the Transactions
occurring on or prior to such date, is correctly described in Schedule 4.12. As
of the Closing Date and each Acquisition Date, the authorized, issued and
outstanding capital stock of, and other equity interests in, each of the Credit
Parties and the Holding Companies consists, after giving effect to the
Transactions occurring on or prior to such date, of the stock and interests
described on Schedule 4.12, in each case all of which is duly and validly issued
and outstanding, fully paid and nonassessable. As of the Closing Date and each
Acquisition Date, except as set forth in Schedule 4.12, after giving effect to
the Transactions occurring on or prior to such date, (x) there are no
outstanding Equity Rights with respect to any Credit Party and (y) there are no
outstanding obligations of any Credit Party to repurchase, redeem, or otherwise
acquire any shares of capital stock of or other interests in any Credit Party
nor are there any outstanding obligations of any Credit Party to make payments
to any Person, such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market value or equity value of any Credit
Party.
4.13 Subsidiaries.
(a) As of the Closing Date and each Acquisition Date, set forth in
Schedule 4.12 is a complete and correct list of all of the Subsidiaries of the
Credit Parties, after giving effect to the Transactions occurring on or prior to
such date, together with, for each such Subsidiary, (i) the jurisdiction of
organization of such Subsidiary, (ii) each Person holding ownership interests in
such Subsidiary and (iii) the nature of the ownership interests held by each
such Person and the percentage of ownership of such Subsidiary represented by
such ownership interests. Except as disclosed in Schedule 4.12, (x) each Credit
Party and its respective Subsidiaries owns, free and clear of Liens (other than
Liens created pursuant to the Collateral
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Documents), and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Schedule 4.12, (y) all of the
issued and outstanding capital stock of each such Person organized as a
corporation is validly issued, fully paid and nonassessable and (z) there are no
outstanding Equity Rights with respect to such Person.
(b) Except as set forth in Schedule 7.8 and except for the Senior
Subordinated Note Indenture and the documents related thereto, the Holdings
Securities Purchase Documents, the Oaktree Note Purchase Documents and the
Subordination and Intercreditor Agreement referred to in Section 7.8, as of the
date of this Agreement, none of the Credit Parties is subject to any indenture,
agreement, instrument or other arrangement containing any provision of the type
described in Section 7.8, other than any such provision the effect of which has
been unconditionally, irrevocably and permanently waived so long as any portion
of the Loans or any Commitment is outstanding.
4.14 Material Indebtedness, Liens and Agreements.
(a) As of the Closing Date and each Acquisition Date, Schedule 4.14(a)
is a complete and correct list of all Material Indebtedness (other than
intercompany loans between or among the Credit Parties and/or to or from Empire
Burbank) to, or guarantee of any Material Indebtedness by, any Credit Party or
Holding Company, and, to the extent specified therein, the aggregate principal
or face amount outstanding or that may become outstanding with respect thereto
is correctly described in Schedule 4.14(a).
(b) As of the Closing Date and each Acquisition Date, Schedule 4.14(b)
is a complete and correct list of each Lien securing Material Indebtedness of
any Credit Party and covering any property of the Credit Parties, and the
aggregate Material Indebtedness secured (or which may be secured) by such Liens
in the aggregate and the Property covered by each such Lien is correctly
described in the appropriate part of Schedule 4.14(b).
(c) As of the Closing Date and each Acquisition Date, Schedule 4.14(c)
is a complete and correct list of each Material Property License and material
equipment lease to which any Credit Party is a party with an indication of
whether such license or lease requires the consent of the licensor or lessor for
it to be assignable to the Administrative Agent pursuant to the Collateral
Documents and whether such consent has been obtained.
(d) As of the Closing Date and each Acquisition Date, Schedule 4.14(d)
is a complete and correct list of all programming, advertising, management,
network affiliation, engineering, research, service billing, purchase, "LMA",
co-location and other contracts to which any Credit Party is a party for which
breach, nonperformance, cancellation or failure to renew would have a Material
Adverse Effect.
True and complete copies of each agreement listed on the appropriate part of
Schedule 4.14 have been delivered to the Administrative Agent, together with all
amendments, waivers and other modifications thereto. As of the Closing Date and
each Acquisition Date, all such agreements are valid, subsisting, in full force
and effect, are currently binding and after the Transactions occurring on or
prior to such date will continue to be binding upon each Credit Party that is a
party thereto and, to the Credit Parties' knowledge, binding upon the other
parties thereto in
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accordance with their terms, except where the failure to be so valid,
subsisting, in full force and effect or binding would not reasonably be expected
to have a Material Adverse Effect. As of the Closing Date and each Acquisition
Date, the Credit Parties are not in default under any such agreements, except
where such default would not reasonably be expected to have a Material Adverse
Effect. As of the Closing Date and each Acquisition Date, the licenses and other
agreements listed on Schedule 4.14 collectively entitle the Credit Parties to
use all Proprietary Rights material to the conduct of the business of the Credit
Parties as presently conducted and as proposed to be conducted after the
Transactions occurring on or prior to such date, except where the failure to be
so entitled would not reasonably be expected to have a Material Adverse Effect.
4.15 Permits and Licenses.
(a) Each of the Credit Parties has, and is in all material respects in
compliance with respect to, all licenses, permits, approvals and authorizations
of Governmental Authorities necessary to conduct its business as presently
conducted and to own or lease and operate its properties excluding FCC Licenses.
(b) As of the Closing Date and each Acquisition Date, Schedule 4.15 is
a complete and correct list of each Material FCC License granted or assigned to
any Credit Party, including those under which the Credit Parties have the right
to operate their respective television and radio broadcast stations covered
thereby ("Broadcast Stations") (and includes, with respect to each such FCC
License, the city of license and the call letters, frequency and expiration date
thereof). As of the Closing Date and each Acquisition Date, the FCC Licenses
listed on Schedule 4.15 with respect to any Broadcast Station owned or operated
by the Credit Parties include all material authorizations, licenses and permits
issued by the FCC (other than auxiliary services licenses) that are required or
necessary for the operation of such Broadcast Station and conduct of the
business of the Credit Parties with respect to such Broadcast Station, as now
conducted or proposed to be conducted. As of the Closing Date and each
Acquisition Date, the FCC Licenses listed on Schedule 4.15 are validly issued
and in full force and effect. As of the Closing Date and each Acquisition Date,
the Credit Parties have fulfilled all of their obligations with respect thereto
(including the filing of all registrations, applications, reports, and other
documents as required by the FCC or other Governmental Authority), and have paid
all fees and other amounts required to be paid by them under all applicable FCC
Regulations, in each case, except where the failure to do so would not result in
termination, suspension or material diminution in scope of a Material FCC
License. To the Borrower's knowledge, no rights of any Credit Party under any
Material FCC License conflict with the valid rights of any other Person in any
material respect. To the Borrower's knowledge, no event has occurred that would
be reasonably likely to result in the revocation, termination or material
adverse modification of any Material FCC License or affect materially adversely
any rights of the Credit Parties thereunder, and none of the Credit Parties has
any reason to believe that any Material FCC License will not be renewed in the
ordinary course of business other than FCC Licenses for analog television
stations which may expire upon completion of conversion to digital television or
loss of any license solely as a result from a Relocation.
4.16 Federal Reserve Regulations. No Credit Party is engaged principally or
as one of its important activities in the business of extending credit for the
purpose of purchasing or carrying margin stock (as defined in Regulation U of
the Board). The making of the Loans
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hereunder, the use of the proceeds thereof or of any Letter of Credit as
contemplated hereby and the security arrangements contemplated by the Loan
Documents will not violate or be inconsistent with any of the provisions of
Regulation U, T or X of the Board of Governors of the Federal Reserve System.
4.17 Burdensome Restrictions. No Credit Party is a party to or otherwise
bound by any indenture, loan or credit agreement or any lease or other agreement
or instrument or subject to any charter, corporate or partnership restriction
which has a currently operative provision which would have a Material Adverse
Effect.
4.18 Force Majeure. Since the date of the most recent financial statements
referred to in Section 4.4(a)(ii) to the Closing Date, the business, properties
and other assets of the Credit Parties have not, as the result of any fire or
other casualty, strike, lockout or other labor trouble, embargo, sabotage,
confiscation, contamination, riot, civil disturbance, activity of armed forces
or act of God, suffered a Material Adverse Effect.
4.19 Labor and Employment Matters.
(a) As of the Closing Date and each Acquisition Date, except as set
forth on Schedule 4.19, (A) no employee of any Credit Party is represented by a
labor union, no labor union has been certified or recognized as a representative
of any such employee; (B) there are no pending or, to the Borrower's knowledge,
threatened representation campaigns, elections or proceedings; (C) no Credit
Party has any knowledge of any strikes, slowdowns or work stoppages of any kind,
or threats thereof; and (D) no Credit Party has engaged in, admitted committing
or been held to have committed any unfair labor practice, in each case except
where such occurrence would not reasonably be expected to have a Material
Adverse Effect.
(b) As of the Closing Date and each Acquisition Date, Schedule 4.19
sets forth all material employment contracts for members of senior management of
the Credit Parties under which any Credit Party thereof has any obligations to
provide compensation or remuneration of any kind (other than obligations to make
current wage or salary payments that are terminable at will without notice).
(c) Except as set forth on Schedule 4.19, each Credit Party has at all
times complied in all material respects, and are in material compliance with,
all applicable laws, rules and regulations respecting employment, wages, hours,
compensation, benefits, and payment and withholding of taxes in connection with
employment, except where the failure to so comply would not reasonably be
expected to have a Material Adverse Effect.
(d) Except as set forth on Schedule 4.19, except as could not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, the Credit Parties have at all times since March 31, 2002
complied with, and are in compliance with, all applicable laws, rules and
regulations respecting occupational health and safety, whether now existing or
subsequently amended or enacted, including the Occupational Safety & Health Act
of 1970, 29 U.S.C. Section 651 et seq. and the state analogies thereto, all as
amended or superseded from time to time, and any common law doctrine relating to
worker health and safety.
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4.20 Subchapter S Election and QSSS Election. Holdings I has made an S
Corporation election in accordance with Code Section 1362 and an election to
treat Intermediate Holdings and the Borrower as a qualified subchapter S
subsidiaries have been made. Holdings I has not elected, pursuant to California
Revenue and Taxation Code Section 23801, not to be treated as an S Corporation
for California income tax purposes. None of Holdings I's shareholders are or
shall be nonresidents of the State of California.
4.21 Senior Indebtedness. The obligations of the Credit Parties hereunder
and under the other Loan Documents constitute "Senior Debt" and "Designated
Senior Debt" under and as defined in the Senior Subordinated Note Indenture. The
provisions of Article 10 of the Senior Subordinated Note Indenture are
enforceable by each Lender and each other holder of any obligations of the
Credit Parties under the Loan Documents in accordance with their terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles.
ARTICLE 5
Conditions
5.1 Effective Time. The obligations of the Lenders to make Revolving Credit
Loans, and of the Issuing Lender to issue Letters of Credit, hereunder shall not
become effective until the date on which each of the following conditions is
satisfied (or waived in accordance with Section 10.2):
(a) Counterparts of Agreement. The Administrative Agent shall have
received from each party hereto either (i) a counterpart of this Agreement
signed on behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of
this Agreement.
(b) Notes. The Administrative Agent shall have received a duly
completed and executed Revolving Credit Note for each Lender, unless waived by
the Lender which would otherwise receive any such note.
(c) Organizational Structure. The organizational structure,
capitalization and ownership of the Credit Parties, both before and after giving
effect to the Transactions occurring on the Closing Date, shall be as set forth
on Schedules 4.11 and 4.12. The Administrative Agent shall have had the
opportunity to review, and shall be reasonably satisfied with, the Credit
Parties' state and federal tax assumptions and the capital, organization and
structure of the Credit Parties, both before and after giving effect to the
Transactions occurring on the Closing Date.
(d) Existence and Good Standing. The Administrative Agent shall have
received such documents and certificates as the Administrative Agent or Special
Counsel may reasonably request relating to the organization, existence and good
standing of Empire Burbank, each Credit Party and Holding Company, the
authorization of the Transactions occurring on the Closing Date and any other
legal matters relating to the Credit Parties or Holding Companies,
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this Agreement, the other Loan Documents or the Transactions occurring on the
Closing Date, all in form and substance reasonably satisfactory to the
Administrative Agent and Special Counsel.
(e) Security Interests in Personal and Mixed Property. To the extent
not otherwise satisfied pursuant to Section 5.1(f), the Administrative Agent
shall have received evidence satisfactory to it that the Credit Parties shall
have taken or caused to be taken all such actions, executed and delivered or
caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing of the UCC statements described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of the Administrative
Agent, desirable in order to create in favor of the Administrative Agent, for
the benefit of the Lenders, a valid and (upon such filing and recording)
perfected First Priority security interest in the entire personal and mixed
property Collateral; provided, however, that to the extent that the
Administrative Agent in its reasonable discretion after good faith consultation
with the Borrower shall determine that the costs of obtaining a security
interest in any item of Collateral is excessive in relation to the value of the
security to be afforded thereby, the Administrative Agent may waive such
requirement with respect to such item, so long as the Credit Parties covenant
that such item shall not become subject to any Liens other than Permitted Liens.
Such actions shall include the following:
(i) Collateral Documents. Delivery to the Administrative Agent
of all the Security Agreement, the Confirmation to the Pledge Agreement,
and the Confirmation to Subordination Agreements, duly executed by the
applicable Credit Party, together with accurate and complete schedules to
all such Collateral Documents;
(ii) Stock Certificates and Instruments. To the extent not
previously delivered to the Administrative Agent in connection with the
Existing Credit Agreement, delivery to the Administrative Agent of (A)
certificates (which certificates shall be accompanied by irrevocable
undated stock powers, duly endorsed in blank and otherwise satisfactory in
form and substance to the Administrative Agent) representing all capital
stock and other certificated equity interests pledged pursuant to the
Pledge Agreement and (B) all promissory notes or other instruments,
including any promissory note made by Lenard Liberman to a Credit Party
pursuant to Section 6.9(e), (duly endorsed, where appropriate, in a manner
satisfactory to the Administrative Agent) evidencing any Collateral;
(iii) Lien Searches and UCC Termination Statements. Delivery to
the Administrative Agent of (A) the results of recent searches, by one or
more Persons satisfactory to the Administrative Agent, of all effective UCC
financing statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any personal or mixed
property of the El Dorado Sellers or the Guajillo Sellers, together with
copies of all such filings disclosed by such search, and (B) to the extent
any of the El Dorado Acquisitions or the Guajillo Acquisitions are being
consummated on the Closing Date, UCC termination statements for filing in
all applicable jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings encumbering the assets being
acquired in each such Acquisition disclosed in such search (other than any
such financing statements or fixture filings in respect of Liens permitted
to remain outstanding pursuant to the terms of this Agreement);
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(iv) UCC Financing Statements and Fixture Filings. Delivery to
the Administrative Agent of amendments to UCC financing statements and,
where appropriate, amendments to fixture filings, with respect to all
personal and material mixed property Collateral of such Credit Party, for
filing in all jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to reflect the change in name of the
Borrower;
(v) PTO Cover Sheets, Etc. Delivery to the Administrative
Agent of all cover sheets or other documents or instruments required to be
filed with the PTO in order to reflect the change in name of the Borrower
and to create or perfect Liens in respect of any new IP Collateral, if any;
(vi) Perfection Certificates. Delivery to the Administrative
Agent of perfection certificates dated the Closing Date substantially in
the form of Schedule I to the form of Security Agreement duly executed by a
Financial Officer of each Credit Party;
(vii) [Intentionally Omitted]; and
(viii) Opinions of Local Counsel. Delivery to the Administrative
Agent of an opinion of counsel (which counsel shall be reasonably
satisfactory to the Administrative Agent) under the laws of California and
Texas with respect to the continuation of the attachment and perfection of
the security interests in favor of the Administrative Agent in the personal
or mixed property Collateral and such other matters governed by the laws of
such jurisdiction regarding such security interests as the Administrative
Agent may reasonably request in form and substance reasonably satisfactory
to the Administrative Agent.
(f) Effective Time Mortgage; Effective Time Mortgage Policy; Etc. The
Administrative Agent shall have received from each Credit Party:
(i) Effective Time Mortgage. A fully executed and notarized
Mortgage (the "Effective Time Mortgage"), in proper form for recording in
all appropriate places in all applicable jurisdictions, encumbering the
Real Property Asset listed in Part II of Schedule 4.5(c) and identified
thereon as a property for which a Mortgage will be provided on the Closing
Date (the "Effective Time Mortgaged Property") but in any event excluding
the Burbank Office Property and the Hollywood Office Property;
(ii) Existing Mortgage Amendments. With respect to each Real
Property Asset listed in Part I (Existing Mortgages) of Schedule 4.5(c)
other than the Excluded Assets (each an "Existing Mortgaged Property"), a
fully executed and notarized Existing Mortgage Amendment, in proper form
for recording in all appropriate places in all applicable jurisdictions.
(iii) Surveys. With respect to the Effective Time Mortgaged
Property, copies of all existing surveys in the Credit Parties' possession;
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(iv) Leasehold Interests. In the case of each Effective Time
Mortgaged Property listed in clause (ii) of Part II of Schedule 4.5(c),
copies of all leases between any Credit Party and any landlord or tenant;
(v) Landlord Waivers and Consents. In the case of each
Effective Time Mortgaged Property listed in clause (ii) of Part II of
Schedule 4.5(c), a Landlord Waiver and Consent with respect thereto and
where required by the terms of any lease, the consent of the fee mortgagee,
ground lessor or other party;
(vi) Licensor Consents. In the case of each Material Property
License listed in Part II of Schedule 4.14(c), a Licensor Consent with
respect thereto;
(vii) Matters Relating to Flood Hazard Properties. (A)
Evidence reasonably acceptable to the Administrative Agent as to whether
any Effective Time Mortgaged Property is a Flood Hazard Property and (B) if
any Effective Time Mortgaged Property is a Flood Hazard Property, evidence
that the applicable Credit Party has obtained flood insurance with respect
to each Flood Hazard Property in amounts approved by the Administrative
Agent, or evidence acceptable to the Administrative Agent that such
insurance is not available;
(viii) Confirmation of Environmental Indemnity. A Confirmation of
Hazardous Materials Indemnity Agreement fully executed by each of the
parties thereto;
(ix) Title Insurance. (A) an ALTA mortgagee title insurance
policy or unconditional commitment therefor (the "Effective Time Mortgage
Policy") issued by the Title Company with respect to each Effective Time
Mortgaged Property listed in Part II of Schedule 4.5(c), in an amount not
less than the amount designated therein with respect to, or a valid
leasehold interest in, the Effective Time Mortgaged Property, insuring
leasehold or fee simple title, as applicable to the Effective Time
Mortgaged Property vested in such Credit Party and assuring the
Administrative Agent that the Effective Time Mortgage creates a valid and
enforceable First Priority mortgage Lien on the Effective Time Mortgaged
Property, subject only to any standard exceptions as may be reasonably
acceptable to the Administrative Agent, which Effective Time Mortgage
Policy (I) shall include all endorsements for matters reasonably requested
by the Administrative Agent and (II) shall provide for affirmative
insurance and such reinsurance as the Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably satisfactory
to the Administrative Agent; and (B) a CLTA Form 110.5 endorsement or
unconditional commitment therefor with respect to each of the Existing
Title Policies issued with respect to an Existing Mortgaged Property
located in California, and a Texas Form T-38 endorsement or unconditional
commitment therefor with respect to each of the Existing Title Policies
issued with respect to an Existing Mortgaged Property located in Texas,
provided that with respect to the KSEV tower site in The Woodlands,
Montgomery County, Texas and the Bering Property, new title policies, each
substantially in the form of an Effective Time Mortgage Policy, shall be
issued by the Title Company in place of such endorsements (such new title
policies, together with the referenced endorsements, each being referred to
herein as an "Existing Title Policy Endorsement") and (C) evidence
satisfactory to the Administrative Agent
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that such Credit Party has (I) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection
with the issuance of the Effective Time Mortgage Policy or the Existing
Title Policy Endorsement and (II) paid to the Title Company or to the
appropriate Governmental Authorities or concurrently with the Closing Date
shall pay all expenses and premiums of the Title Company in connection with
the issuance of the Effective Time Mortgage Policy or the Existing Title
Policy Endorsement and all recording and stamp taxes (including mortgage
recording and intangible taxes) payable in connection with recording the
Effective Time Mortgage in the appropriate real estate records;
(x) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise referred
to in the Effective Time Mortgage Policy or in the title reports delivered
pursuant to Section 5.1(f)(viii);
(xi) Opinions of Local Counsel. An opinion of counsel (which
counsel shall be reasonably satisfactory to the Administrative Agent) in
each state in which the Effective Time Mortgaged Property and the Existing
Mortgaged Property is located with respect to the enforceability of the
form of the Effective Time Mortgage and the Existing Mortgage Amendment to
be recorded in such state and such other matters as the Administrative
Agent may reasonably request, in each case in form and substance reasonably
satisfactory to the Administrative Agent;
(xii) Empire Burbank Loan Documents. To the extent not delivered
to the Administrative Agent in connection with the Existing Credit
Agreement, the Administrative Agent shall have received copies of the
Empire Burbank Loan Documents, each certified as true and correct and in
full force and effect by the Borrower and further certified to be all the
documents, instruments and agreements relating to the Empire Burbank Loan.
(g) Environmental Reports. To the extent not delivered to the
Administrative Agent in connection with the Existing Credit Agreement, the
Administrative Agent shall have received copies of all reports and other
information in possession of any Credit Party regarding environmental matters
relating to the Real Property Assets and evidence of compliance with any
recommended remediation or further investigation indicated by such reports and
information.
(h) Evidence of Insurance. The Administrative Agent shall have
received a certificate from the Credit Parties' insurance broker or other
evidence satisfactory to them that all insurance required to be maintained
pursuant to Section 6.5 is in full force and effect and that the Administrative
Agent on behalf of the Lenders has been named as additional insured, mortgagee
and loss payee thereunder to the extent required under Section 6.5.
(i) Management; Employment and Consulting Contracts. The management
structure of the Credit Parties after giving effect to the Transactions shall be
as set forth on Schedule 4.11. To the extent not delivered to the Administrative
Agent in connection with the Existing Credit Agreement, the Administrative Agent
shall have received copies of, and shall be satisfied with the form and
substance of (i) any and all agreements among any of the holders of capital
stock of or other equity interests in the Credit Parties, (ii) any and all
material consulting
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agreements with any Persons and (iii) any stock option plans, phantom stock
incentive programs and similar arrangements provided by the Credit Parties to
any Person, in each case as such will be in effect from and after the Closing
Date. The employment agreements with Messrs. Eduardo Leon dated December 1,
1999, Andrew Mars dated November 15, 1998, Jose Francisco Garza dated February
8, 1999 and Xavier Ortiz dated September 1, 1999 constitute all material
employment agreements with senior executives of the Credit Parties on the
Closing Date.
(j) Necessary Governmental Authorizations and Consents; Expiration of
Waiting Periods, Etc. The Credit Parties have obtained all permits, licenses,
authorizations or consents from all Governmental Authorities (including the FCC)
and all consents of other Persons with respect to Material Indebtedness, Liens
and agreements listed on Schedule 4.14 (and so identified thereon), in each case
that are necessary in connection with the Transactions contemplated by the Basic
Documents and occurring on the Closing Date (except that if any of the El Dorado
Acquisitions or the Guajillo Acquisitions will not close on the Closing Date,
the permits, licenses, authorizations and consents with respect any such
Acquisition not closing on the Closing Date will not be required to be obtained
until the closing of such Acquisition), and the continued operation of the
Broadcast Stations operated and business conducted, and proposed to be
conducted, by the Credit Parties, in substantially the same manner as conducted
by the Credit Parties prior to the Closing Date, and each of the foregoing shall
be in full force and effect, in each case other than those the failure to obtain
or maintain which, either individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect. All applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Transactions occurring on the Closing Date (including the
Pre-Merger/Hart-Scott-Rodino Act, as amended). No action, request for stay,
petition for review or rehearing, reconsideration or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable Governmental
Authority to take action to set aside its consent on its own motion shall have
expired.
(k) Borrowing Request. The Borrower shall have requested Loans
hereunder in an amount not to exceed the sum of the amounts payable under clause
(a) of the definition of Existing Debt plus, to the extent the proceeds of the
initial Loans hereunder are to be used on the Closing Date to fund a portion of
the purchase price of the El Dorado Acquisitions or the Guajillo Acquisitions,
the purchase price for such Acquisitions being consummated on the Closing Date
plus the Transaction Costs plus the payments to Jose and Lenard Liberman set
forth in Sections 6.9(d) and (e) plus the amount needed for working capital.
(l) Existing Debt. The Administrative Agent shall have received
evidence that all principal, interest and other amounts owing in respect of all
Existing Debt described in clause (a) of the definition thereof (including the
payment in full of the Liberman Subordinated Debt and all obligations under the
Oaktree Note Purchase Documents) shall have been or shall simultaneously be,
repaid in full.
(m) Financial Statements; Pro Forma Balance Sheet; Closing Date
Compliance Certificate. The Administrative Agent shall have received from the
Credit Parties (i) the certified financial statements, operating projections and
budgets referred to in Section 4.4 hereof, and the same shall be reasonably
satisfactory to the Administrative Agent and the Lenders and
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shall not be inconsistent with the information previously provided to the
Administrative Agent and (ii) a certificate of a Financial Officer
demonstrating, on a pro-forma basis, that the Senior Leverage Ratio, for the
period of four consecutive fiscal quarters of the Borrower ended March 31, 2002,
giving effect to the Transactions occurring on the Closing Date on a pro forma
basis as if such Transactions had occurred on the first day of such period, does
not exceed 4.00 to 1.
(n) Solvency Assurances. The Administrative Agent shall have received
a certificate, substantially in the form of Exhibit H, from a Financial Officer
of the Borrower to the effect that, as of the Effective Time and after giving
effect to the initial Loans hereunder, the issuance of the Senior Subordinated
Notes and to the other Transactions occurring on the Closing Date:
(i) the aggregate value of all properties of the Credit Parties
at their present fair saleable value on a going concern basis (i.e., the
amount that may be realized within a reasonable time, considered to be six
months to one year, either through collection or sale at the regular market
value, conceiving the latter as the amount that could be obtained for such
properties within such period by a capable and diligent businessman from an
interested buyer who is willing to purchase under ordinary selling
conditions), exceed the amount of all the debts and liabilities (including
contingent, subordinated, unmatured and unliquidated liabilities) of the
Credit Parties;
(ii) the Credit Parties will not, on a consolidated basis, have
unreasonably small capital with which to conduct their business operations
as heretofore conducted; and
(iii) the Credit Parties will have, on a consolidated basis,
sufficient cash flow to enable them to pay their debts as they mature.
Such certificate shall include a statement to the effect that the financial
projections and underlying assumptions contained in such analysis are, fair
and reasonable in the opinion of such Financial Officer at the time when
made.
(o) Financial Officer Certificate. The Administrative Agent shall have
received a certificate, dated the Closing Date and signed by the President, an
Executive Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (a) and (b) of Section
5.2 at the Effective Time.
(p) Senior Subordinated Notes. (i) The Borrower shall have issued the
Senior Subordinated Notes in an aggregate principal amount of not less than
$150,000,000, (ii) the Administrative Agent shall have received copies of the
Senior Subordinated Note Indenture and the same shall be reasonably satisfactory
to the Administrative Agent and Special Counsel, (iii) the Borrower shall have
applied the proceeds thereof in accordance with Section 6.9 and (iv) the
Administrative Agent shall have received a certificate of a Financial Officer of
the Borrower in form satisfactory to the Administrative Agent confirming that
the Borrower has received from the purchasers of the Senior Subordinated Notes
all cash proceeds from the sale of such notes.
(q) No Material Adverse Effect. Since March 31, 2002, there shall have
occurred no Material Adverse Effect (in the reasonable judgment of the
Administrative Agent)
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with respect to the Credit Parties or on the assets to be acquired in connection
with any Acquisition occurring on the Closing Date.
(r) Holdings Amendment; Oaktree Redemption Agreement. At or prior to
the Effective Time, (i) the Holdings Amendment and the Oaktree Redemption
Agreement shall constitute a binding written agreement of each of the parties
thereto and (ii) the Administrative Agent shall have received copies of such
amendment and agreement and the same shall be reasonably satisfactory to the
Administrative Agent and Special Counsel.
(s) Opinions. The Administrative Agent shall have received favorable
written opinions (addressed to the Administrative Agent and the Lenders and
dated the Closing Date) of (i) O'Melveny & Myers LLP, Gilchrist & Rutter, and
Strasburger & Price, each special counsel to the Credit Parties, substantially
in the forms of Exhibits K-1, K-2 and K-3, respectively, (ii) O'Melveny & Myers
LLP, special FCC counsel to the Credit Parties substantially in the form of
Exhibit L and (iii) local counsel to the Credit Parties covering such matters
relating to local laws and the perfection of security interests as the
Administrative Agent or the Required Lenders shall request (and each Credit
Party hereby requests each such counsel to deliver such opinions).
(t) Fees and Expenses. The Administrative Agent and the Issuing Lender
shall have received all reasonable fees and other amounts due and payable to
such Persons and Special Counsel at or prior to the Effective Time, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
(u) Other Documents. The Administrative Agent shall have received all
material contracts and such other documents as the Administrative Agent or any
Lender or Special Counsel shall have reasonably requested and the same shall be
satisfactory to each of them and Special Counsel.
5.2 Each Extension of Credit. The obligation of each Lender to make a Loan
on the occasion of any Borrowing, and of the Issuing Lender to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:
(a) Representations and Warranties. The representations and warranties
of each Credit Party set forth in this Agreement and the other Loan Documents
shall be true and correct on and as of the date of such Borrowing, or (as
applicable) the date of issuance, amendment, renewal or extension of such Letter
of Credit, both before and after giving effect thereto and to the use of the
proceeds thereof (or, if any such representation or warranty is expressly stated
to have been made as of an earlier date, such representation or warranty shall
have been true and correct as of such earlier date, and to the extent any
representation or warranty makes reference to one or more of the Schedules to
this Agreement, the Credit Parties shall make revisions to the Schedules,
reasonably acceptable to the Administrative Agent, to take into account the
consummation of any Acquisitions permitted hereunder and other transactions
permitted hereunder).
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(b) No Defaults. At the time of and immediately after giving effect to
such Borrowing, or (as applicable) the date of issuance, amendment, renewal or
extension of such Letter of Credit, no Default shall have occurred and be
continuing.
5.3 Consummation of Acquisitions. If the proceeds of the initial Loans
hereunder are to be used to fund on the Closing Date a portion of the purchase
price of the El Dorado Acquisitions or the Guajillo Acquisitions, the following
conditions must also be satisfied with respect to the Acquisition the purchase
price of which will be funded with the initial Loans on the Closing Date:
(i) All conditions precedent to the consummation of the El
Dorado Acquisitions or the Guajillo Acquisitions, as applicable, including
those set forth in the El Dorado Acquisitions Documents or the Guajillo
Acquisitions Documents, respectively, shall have been satisfied or the
fulfillment of any such conditions shall have been waived with the consent
of the Administrative Agent and the Lenders;
(ii) the Acquisition shall have been consummated substantially in
accordance with the terms of the El Dorado Acquisitions Documents or the
Guajillo Acquisitions Documents, as applicable;
(iii) the Administrative Agent shall have received copies of the
documents relating to the Acquisition and such legal opinions relating
thereto as are provided for in the El Dorado Acquisitions Documents or the
Guajillo Acquisitions Documents, as applicable, (which opinions shall also
be addressed to the Administrative Agent and the Lenders or shall be
accompanied by letters authorizing or shall otherwise expressly permit the
Administrative Agent and the Lenders to rely thereon) and the same shall be
satisfactory to the Administrative Agent and Special Counsel and shall be
in full force and effect and shall not have been amended, modified or
supplemented except in accordance with the terms hereof;
(iv) the Administrative Agent shall have received evidence that
all filings and registrations required to be made with the FCC and all
other applicable Governmental Authorities in connection with the
consummation of the Acquisition shall have been submitted and, to the
extent applicable, approved, and shall be effective (except for any filings
required to be made following the consummation of the Acquisition,
including filing with the FCC of notice of the consummation of the
Acquisition and of any related financing documents and ownership reports);
and
(v) the Administrative Agent shall have received a certificate
of an officer of the Borrower to the effect that the conditions set forth
in clauses (i)-(iv) above have been satisfied.
To the extent that the El Dorado Acquisitions or the Guajillo Acquisitions are
not consummated on the Closing Date, the Credit Parties shall be required to
satisfy the requirements of Section 7.4(d) with respect to such Acquisition.
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ARTICLE 6
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of the Credit Parties covenants
and agrees with the Lenders that:
6.1 Financial Statements and Other Information. The Borrower will furnish
to the Administrative Agent for distribution to each Lender:
(a) as soon as available and in any event within 120 days after the end
of each fiscal year of the Credit Parties:
(i) consolidated and consolidating (by Broadcast Station)
statements of income and consolidated statements of retained earnings and
cash flows of the Credit Parties for such fiscal year and the related
consolidated balance sheet of the Credit Parties as at the end of such
fiscal year, setting forth in each case in comparative form the
corresponding consolidated figures for the preceding fiscal year,
(ii) an opinion of independent certified public accountants of
recognized national standing (without a "going concern" or like
qualification or exception and without any qualification or exception as to
the scope of such audit) stating that said consolidated financial
statements referred to in the preceding clause (i) fairly present in all
material respects the consolidated financial condition and results of
operations of the Credit Parties as at the end of, and for, such fiscal
year in accordance with GAAP, and a statement of such accountants that, in
connection with their audit, nothing came to their attention that caused
them to believe that the Credit Parties failed to comply with the terms,
covenants, provisions or conditions of Section 7.10, insofar as they relate
to accounting matters, and
(iii) a certificate of a Financial Officer of the Credit Parties
stating that said consolidating financial statements referred to in the
preceding clause (i), substantially in the form previously delivered
supplied by the Borrower to its lenders, fairly present the respective
individual unconsolidated results of operations of the Credit Parties for
such fiscal year;
(b) as soon as available and in any event within 60 days after the end
of each quarterly fiscal period (including the fourth fiscal period) of each
fiscal year of the Credit Parties:
(i) consolidated and consolidating (by Broadcast Station and by
television and radio businesses) statements of income of the Credit Parties
for such period and for the period from the beginning of the respective
fiscal year to the end of such period, and the related consolidated balance
sheet of the Credit Parties as at the end of such period, together with a
comparison of cash flows against management's budget for such period, and
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(ii) a certificate of a Financial Officer of the Credit Parties,
which certificate shall state that said consolidated financial statements
referred to in the preceding clause (i) fairly present, in all material
respects, the consolidated financial condition and results of operations of
the Credit Parties and that said consolidating financial statements
referred to in the preceding clause (i) fairly present, in all material
respects, the respective individual unconsolidated results of operations of
the Credit Parties, in each case in accordance with generally accepted
accounting principles, consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments and the omission
of footnotes);
(c) commencing with the financial statements delivered under clause
(b) above for the fiscal quarter ending September 30, 2002, concurrently with
any delivery of financial statements under clauses (a) and (b) above, a
Compliance Certificate;
(d) as soon as available and in any event within 45 days after the end
of each month of each fiscal year of the Credit Parties:
(i) consolidated statement of income and a statement showing a
calculation of EBITDA for such period of the Credit Parties for such period
and for the period from the beginning of the respective fiscal year to the
end of such period, and, together with a comparison of results against such
period of the prior fiscal year,
(ii) a certificate of a Financial Officer of the Credit Parties,
which certificate shall state that said consolidated financial statements
referred to in the preceding clause (i) fairly present in all material
respects the consolidated results of operations of the Credit Parties for
such period (subject to normal year-end audit adjustments and the omission
of footnotes);
(e) promptly upon the mailing thereof to the holders of any
Indebtedness or equity interests in the Credit Parties or the Holding Companies
generally, copies of all financial statements, regular reports and other
statements so mailed;
(f) as soon as available and in any event no later than 30 days after
the commencement of each fiscal year, a budget for the Credit Parties for such
fiscal year;
(g) promptly after the same become publicly available, copies of all
registration statements, regular periodic and other reports and statements filed
by any Holding Company or any Credit Party with the Securities and Exchange
Commission or any Governmental Authority succeeding to any or all of the
functions of said Commission or with any national securities exchange or market
quotation system and copies of all press releases by the Holding Company or any
Credit Party including, to the extent not included in the foregoing, any regular
periodic and other reports and statements provided by any Holding Company or any
Credit Party to the holders of the Senior Subordinated Notes; and
(h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of any Credit
Party, or compliance with the terms of this Agreement, as the Administrative
Agent or the Required Lenders may reasonably request.
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6.2 Notices of Material Events. The Credit Parties, promptly upon
obtaining knowledge thereof, will furnish to the Administrative Agent for
distribution to each Lender written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Credit
Party or other Affiliate thereof for which there is a reasonable possibility of
a determination that would have a Material Adverse Effect;
(c) a final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate (regardless of insurance coverage), shall be
rendered by one or more courts, administrative tribunals or other bodies having
jurisdiction against any Credit Party;
(d) the occurrence of any ERISA Event related to the Plan of any
Credit Party or knowledge after due inquiry of any ERISA Event related to a Plan
of any other ERISA Affiliate that, alone or together with any other ERISA Events
that have occurred, could reasonably be expected to result in liability of the
Credit Parties in an aggregate amount exceeding $250,000;
(e) the receipt by any Credit Party from the FCC or any other
Governmental Authority of (a) any order or notice of the FCC or any other
Governmental Authority or any court of competent jurisdiction which designates
any Material FCC License or any other material license, permit or authorization
of the Credit Parties, or any application therefore, for a hearing, or which
refuses renewal or extension of, or revokes, materially modifies, terminates or
suspends any Material FCC License or other material license, permit or
authorization now or hereafter held by any Credit Party, or (b) any notice of
any competing application filed with respect to any Material FCC License or
other material license, permit or authorization now or hereafter held by any
Credit Party, or any material citation, material notice of violation or material
order to show cause issued by the FCC or any other Governmental Authority with
respect to any Credit Party;
(f) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect;
(g) any communication, written or oral, with the Internal Revenue
Service or the California Franchise Tax Board regarding the validity,
revocation, and/or termination of the S Corporation Election or the QSSS
Election as well as the timing thereof;
(h) copies of its federal income tax returns (Forms 1120-S),
California income tax returns, and summaries of all financial information used
to calculate the Permitted Shareholder Tax Distributions and Permitted Holdings
Tax Distributions;
(i) any communications, written or oral, with the Internal Revenue
Service or the California Franchise Tax Board regarding proposed or agreed upon
changes in the Federal Taxable Income or the California Taxable Income which
would have a Material Adverse Effect;
87
(j) in any taxable year in which the Federal Taxable Income or the
California Taxable Income is negative, with copies of Holdings I's shareholders'
individual federal and California income tax returns for the taxable year(s) of
its shareholder(s) ending on or after such year; and
(k) on the date of the occurrence thereof, notice that (i) any or all
of the obligations under the Senior Subordinated Note Indenture have been
accelerated, or (ii) that trustee or required holders of the Senior Subordinated
Notes has been given notice that any or all such obligations are to be
accelerated.
Each notice delivered under this Section 6.2 shall be accompanied by a statement
of a Financial Officer or other executive officer of the Credit Parties setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
6.3 Existence; Conduct of Business. Each of the Credit Parties will do or
cause to be done all things necessary in the exercise of its reasonable business
judgment to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of the business of the Credit Parties taken as a whole; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation,
dissolution or any discontinuance or sale of such business permitted under
Section 7.4.
6.4 Payment of Obligations. Each of the Credit Parties will pay its
obligations, including Tax liabilities, that, if not paid, could result in a
Material Adverse Effect before the same shall become delinquent or in default,
except where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) such Credit Party has set aside on its books
adequate reserves with respect thereto in accordance with GAAP and (c) the
failure to make payment pending such contest could not reasonably be expected to
result in a Material Adverse Effect.
6.5 Maintenance of Properties; Insurance. Each of the Credit Parties will
(a) keep and maintain all property material to the conduct of its business in
good working order and condition, ordinary wear and tear excepted, and (b)
maintain insurance, with financially sound and reputable insurance companies, as
may be required by law, and such other insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations, including
business interruption, product liability insurance media perils insurance.
Without limiting the generality of the foregoing, the Credit Parties will
maintain or cause to be maintained (or provide evidence reasonably acceptable to
the Administrative Agent that such insurance is not available at a reasonable
cost) replacement value property insurance on the Collateral under such policies
of insurance and (x) with respect to each property located in California on the
Closing Date, such policies of earthquake insurance as are currently maintained
by the Credit Parties and (y) for each property located in California acquired
after the Closing Date such additional policies of earthquake insurance with
similar scope and amounts as the policies maintained by the Credit Parties on
the Closing Date, in each case with such insurance companies, in such amounts,
with such deductibles, and covering such terms and risks as are at all times
satisfactory to the Administrative Agent in its commercially reasonable
judgment. Such policies of insurance with
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respect to the Credit Parties shall (x) name the Administrative Agent and the
Lenders as additional insureds thereunder as their interests may appear and (y)
in the case of each business interruption and property insurance policy, contain
a loss payable clause or endorsement, satisfactory in form and substance to the
Administrative Agent that names the Administrative Agent for the benefit of the
Lenders as the loss payee thereunder (except with respect to losses of less than
$500,000 per occurrence, which may be paid directly to Borrower provided no
Default is continuing) and provides for at least 30 days' prior written notice
to the Administrative Agent of any modifications or cancellation of such policy.
6.6 Books and Records; Inspection Rights. Each of the Credit Parties will
keep proper books of record and account in which entries are made of all
material dealings and transactions in relation to its business and activities
which fairly record such transactions and activities consistent with past
practice. Each of the Credit Parties will permit any representatives designated
by the Administrative Agent or any Lender upon reasonable notice and at
reasonable times during normal business hours to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with Jose and Lenard Liberman, the
Borrower's chief financial officer and Borrower's independent accountants;
provided the Borrower may choose to be present at or participate in any of such
discussions. The Credit Parties, in consultation with the Administrative Agent,
if requested by the Administrative Agent, will arrange for a meeting to be held
at least once every year with the Lenders and the Administrative Agent hereunder
at which the business and operations of the Credit Parties are discussed.
6.7 Fiscal Year. None of the Credit Parties will change its fiscal year or
the method of determining the last day of the first three fiscal quarters in
each of its fiscal years without the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld but which may be
conditioned on amendments to Section 7.10.
6.8 Compliance with Laws, Maintenance of FCC Licenses. Each of the Credit
Parties will comply with (i) all laws, rules, regulations and orders including
all FCC Regulations, Environmental Laws and all other laws, rules, regulations,
policies and orders of any Governmental Authority, (ii) the terms of all FCC
Licenses, and (iii) all contractual obligations, in each case applicable to it
or its property, except, in each case, where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. Each Credit Party shall file or cause to be filed all necessary
applications for renewal of, and shall preserve in full force and effect all,
Material FCC Licenses; provided, however, that any failure to preserve any
Material FCC License in full force and effect which results either from (x) the
conversion of analog television stations to digital television or (y) from a
Relocation shall not constitute a breach of this Section 6.8. Each Credit Party
shall promptly furnish or caused to be furnished to the Administrative Agent
copies of all material applications, reports and filings filed by the Credit
Parties with the FCC, and promptly upon the Borrower acquiring knowledge
thereof, copies of all material petitions and motions filed by third parties
with the FCC involving the Credit Parties, in each case, with respect to the
Material FCC Licenses or the Broadcast Stations.
6.9 Use of Proceeds. The proceeds of the Loans and the Letters of Credit
(together with the proceeds of the issuance of the Senior Subordinated Notes)
will be used only for (a)
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financing the purchase price for El Dorado Acquisitions and the Guajillo
Acquisitions, (b) the refinancing on the Closing Date of amounts payable under
clause (a) of the definition of Existing Debt, (c) the redemption on the Closing
Date of existing Indebtedness of Intermediate Holdings to Oaktree and certain
other debt holders under the Oaktree Note Purchase Documents (including
redemption premiums) in an aggregate amount not in excess of $55,000,000, (d)
the repayment on the Closing Date of up to $1,580,000 aggregate principal amount
of Liberman Subordinated Debt to Jose Liberman, (e) the repayment of Liberman
Subordinated Debt, and/or the payment of a dividend, or the making of a loan, to
Lenard Liberman in an aggregate amount up to $2,130,000 on the Closing Date, in
each case, plus accrued interest, (f) Transaction Costs, (g) Permitted
Acquisitions pursuant to Section 7.4, (h) Capital Expenditures permitted
hereunder, (i) closing costs for the Transactions, and (j) general corporate and
working capital purposes of the Credit Parties. No part of the proceeds of any
Loan or the Letters of Credit will be used, whether directly or indirectly, to
purchase or carry any margin stock or for any purpose that entails a violation
of any of the Regulations of the Board, including Regulations U, T and X. All
net proceeds from the issuance of the Senior Subordinated Notes shall be applied
by the Borrower for the foregoing purposes concurrently with any proceeds of the
Loans being applied for such purposes.
6.10 Certain Obligations Respecting Guarantors and Collateral Security.
(a) Additional Subsidiaries. In the event that any Credit Party shall
form or acquire any new Subsidiary after the date hereof, such Credit Party will
cause such new Subsidiary,
(i) within ten Business Days after such formation or acquisition:
(A) to execute and deliver to the Administrative Agent the
following documents: (1) a counterpart to this Agreement (and thereby
to become a party to this Agreement, as a "Guarantor" hereunder) and
(2) a counterpart to the Pledge Agreement and a counterpart to the
Security Agreement (and thereby to become a party to each such
agreement);
(B) to take such action (including delivering such shares of
stock and executing and delivering such UCC financing statements) as
shall be necessary to create and perfect valid and enforceable First
Priority Liens on all assets and property of such Subsidiary, subject
only to Permitted Liens, consistent with the provisions of the
applicable Collateral Documents (other than the Mortgages to be
provided under clause (ii) below); and
(C) to deliver such proof of corporate action, incumbency of
officers and other documents as is consistent with those delivered by
each Credit Party pursuant to Section 5.1 at the Effective Time or as
the Administrative Agent shall have reasonably requested; and
(ii) within thirty days after such formation or acquisition to
execute and deliver to the Administrative Agent Mortgages and such other
instruments, documents and agreements as may be reasonably required by the
Administrative Agent as
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shall be necessary to create and perfect valid and enforceable First
Priority Liens, subject only to Permitted Liens;.
(b) Ownership of Subsidiaries. Subject to Section 7.4, no Credit Party
shall sell, transfer or otherwise dispose of any shares of stock or other equity
interests in any Subsidiary owned by it, nor issue or permit any Subsidiary, to
issue, any shares of stock of any class or other equity interests whatsoever to
any Person, except that (i) the Borrower may issue stock or equity to
Intermediate Holdings (or after the merger of Intermediate Holdings with and
into the Borrower in accordance with Section 7.4(g), to Holdings I) and (ii) any
Credit Party may issue stock or equity to another Credit Party provided such
stock or equity is pledged to the Administrative Agent as set forth below.
Subject to Section 7.4, each of the Credit Parties will cause each of its
Subsidiaries to take such action from time to time as shall be necessary to
ensure that the percentage of the equity capital of any class or character owned
by such Credit Party in any Subsidiary on the date hereof (or, in the case of
any newly formed or newly acquired Subsidiary, on the date of formation or
acquisition) is not at any time decreased, other than by reason of transfers to
another Credit Party. In the event that any additional shares of stock or other
equity interests shall be issued by any Credit Party (other than issuance by the
Borrower of its capital stock to Intermediate Holdings(or after the merger of
Intermediate Holdings with and into the Borrower in accordance with Section
7.4(g), to Holdings I)), the respective holder of such shares of stock or other
equity interests shall forthwith deliver to the Administrative Agent pursuant to
the Pledge Agreement the certificates evidencing such shares of stock,
accompanied by undated stock powers executed in blank, and shall take such other
action as the Administrative Agent shall request to perfect the security
interest created therein pursuant to such pledge agreement.
6.11 ERISA. Except where a failure to comply with any of the following,
individually or in the aggregate, would not or could not reasonably be expected
to result in a Material Adverse Effect, (i) to the extent applicable, the Credit
Parties will maintain, and cause each ERISA Affiliate to maintain, each Plan of
any Credit Party or any ERISA Affiliate in compliance with all applicable
requirements of ERISA and of the Code and with all applicable rulings and
regulations issued under the provisions of ERISA and of the Code and (ii) the
Credit Parties will not and, to the extent they have the authority to do so,
will not permit any of the ERISA Affiliates to (a) engage in any transaction
with respect to any Plan which would subject any Credit Party to either a civil
penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code, (b) fail to make full payment when due of all amounts which,
under the provisions of any Plan, any of the Credit Parties or any ERISA
Affiliate is required to pay as contributions thereto, or permit to exist any
accumulated funding deficiency (as such term is defined in Section 302 of ERISA
and Section 412 of the Code), whether or not waived, with respect to any Pension
Plan or (c) fail to make any payments to any Multiemployer Plan that any of the
Credit Parties or any of the ERISA Affiliates may be required to make under any
agreement relating to such Multiemployer Plan or any law pertaining thereto.
6.12 Environmental Matters; Reporting. The Credit Parties will observe and
comply with, and cause each Affiliate to observe and comply with all laws,
rules, regulations and orders of any government or government agency relating to
health, safety, pollution, hazardous materials or other environmental matters to
the extent non-compliance could have a Material Adverse Effect. The Credit
Parties will give the Administrative Agent prompt written notice of
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any violation as to any environmental matter by any Credit Party or Affiliate
and of the commencement of any judicial or administrative proceeding relating to
health, safety or environmental matters (a) in which an adverse result would
have a material adverse effect on any operating permits, air emission permits,
water discharge permits, hazardous waste permits or other permits held by any
Credit Party or Affiliate which are material to the operations of such Credit
Party or Affiliate, or (b) which will, or is likely to, have a Material Adverse
Effect on such Credit Party or Affiliate to any Person or which will require a
material expenditure by such Credit Party or Affiliate to cure any alleged
problem or violation.
6.13 Conforming Leasehold Interests; Matters Relating to Real Property
Collateral.
(a) If (i) any Credit Party acquires or (ii) at the time any Person
becomes a Subsidiary (other than a Subsidiary that is not required to become a
Guarantor), such Person holds, any Material Leasehold Property, the Credit Party
or such Person shall cause such Material Leasehold Property to be a Conforming
Leasehold Interest but excluding any Material Leasehold Property where, in the
Administrative Agent's reasonable discretion, the costs of causing such property
to become a Conforming Leasehold Interest is excessive in relation to the value
of the benefit to be afforded to the Lenders thereby or where such property is
not material to the business and operations of such Credit Party or such Person.
(b) From and after the Effective Time, in the event that (i) any
Credit Party acquires any fee interest in real property or any Material
Leasehold Property, or (ii) at the time any Person becomes a Subsidiary (other
than a Subsidiary that is not required to become a Guarantor), such Person owns
or holds any fee interest in real property or any Material Leasehold Property,
in either case excluding any such Real Property Asset (x) where, in the
Administrative Agent's reasonable discretion, the costs of obtaining a security
interest in such Real Property Asset is excessive in relation to the value of
the benefit to be afforded to the Lenders thereby or where such property is not
material to the business and operations of such Credit Party or such Person or
(y) the encumbering of which requires the consent of any applicable lessor or
(in the case of clause (ii) above) any then-existing senior lienholder, where
the Credit Parties are unable to obtain such lessor's or senior lienholder's
consent (any such non-excluded Real Property Asset described in the foregoing
clause (i) or (ii) being a "Additional Mortgaged Property"), such Credit Party
shall deliver to the Administrative Agent, as soon as practicable after such
Person acquires such Additional Mortgaged Property or such Person is acquired,
the following:
(i) Additional Mortgages. A fully executed and notarized Mortgage
(an "Additional Mortgage"), in proper form for recording in all appropriate
places in all applicable jurisdictions, encumbering the interest of such
Credit Party in such Additional Mortgaged Property, and the Administrative
Agent shall have the right in its sole discretion, but only after
consulting with the Borrower, to record such Additional Mortgage;
(ii) Leasehold Interests. In the case of any Additional Mortgaged
Property consisting of a Leasehold Property, copies of all leases between
any Credit Party and any landlord or tenant;
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(iii) Landlord Waivers and Consents. In the case of any Additional
Mortgaged Property consisting of a Leasehold Property, (a) a Landlord
Waiver and Consent with respect thereto and where required by the terms of
any lease, the consent of the mortgagee, ground lessor or other party and
(b) evidence that such Leasehold Property is a Recorded Leasehold Interest;
(iv) Matters Relating to Flood Hazard Properties. (A) Evidence
as to whether any Additional Mortgaged Property is a Flood Hazard Property
and (B) if such Additional Mortgaged Property is a Flood Hazard Property,
evidence that the applicable Credit Party has obtained flood insurance with
respect to each Flood Hazard Property in amounts reasonably approved by the
Administrative Agent, or evidence acceptable to the Administrative Agent
that such insurance is not available;
(v) Title Insurance. (A) If required by the Administrative
Agent, ALTA mortgagee title insurance policies or unconditional commitments
therefor (the "Additional Mortgage Policies") issued by the Title Company
with respect to the Additional Mortgaged Property, in an amount reasonably
satisfactory to the Administrative Agent, insuring fee simple title to, or
a valid leasehold interest in, each such Additional Mortgaged Property
vested in such Credit Party and assuring the Administrative Agent that such
Additional Mortgage creates a valid and enforceable First Priority mortgage
Lien on such Additional Mortgaged Property, subject only to any standard
exceptions as may be reasonably acceptable to the Administrative Agent,
which Additional Mortgage Policy (I) shall include all endorsements for
matters reasonably requested by the Administrative Agent and (II) shall
provide for affirmative insurance and such reinsurance as the
Administrative Agent may reasonably request, all of the foregoing in form
and substance reasonably satisfactory to the Administrative Agent; and (B)
evidence reasonably satisfactory to the Administrative Agent that such
Credit Party has (I) delivered to the Title Company all certificates and
affidavits required by the Title Company in connection with the issuance of
the Additional Mortgage Policy and (II) paid to the Title Company or to the
appropriate Governmental Authorities all expenses and premiums of the Title
Company in connection with the issuance of the Additional Mortgage Policy
and all recording and stamp taxes (including mortgage recording and
intangible taxes) payable in connection with recording the Additional
Mortgage in the appropriate real estate records;
(vi) Copies of Documents Relating to Title Exceptions. Copies of
all recorded documents listed as exceptions to title or otherwise referred
to in the Additional Mortgage Policy;
(vii) Environmental Audit. If reasonably required by the
Administrative Agent, reports and other information in form, scope and
substance reasonably satisfactory to the Administrative Agent and prepared
by environmental consultants satisfactory to the Administrative Agent,
concerning any environmental hazards or liabilities to which any Credit
Party may be subject with respect to such Additional Mortgaged Property;
and
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(viii) Opinions of Counsel. (1) A favorable opinion of counsel
(which counsel shall be reasonably satisfactory to the Administrative Agent
and Special Counsel), as to the due authorization, execution and delivery
by such Credit Party of such Additional Mortgage and such other matters as
the Administrative Agent may reasonably request, and (2) if required by the
Administrative Agent, an opinion of counsel (which counsel shall be
reasonably satisfactory to the Administrative Agent and Special Counsel) in
the state in which such Additional Mortgaged Property is located with
respect to the enforceability of the form of Additional Mortgages to be
recorded in such state and such other matters (including any matters
governed by the laws of such state regarding personal property security
interests in respect of any Collateral) as the Administrative Agent may
reasonably request, in each case in form and substance reasonably
satisfactory to the Administrative Agent.
(c) If (i) any Credit Party acquires or (ii) at the time any Person
becomes a Subsidiary (other than a Subsidiary that is not required to become a
Guarantor), such Person holds, any Material Property License, the Credit Party
or such Person shall cause to be delivered to the Administrative Agent, a
Licensor Consent with respect thereto excluding any Material Property License
where, in the Administrative Agent's reasonable discretion, the costs of
obtaining such consent is excessive in relation to the value of the benefit to
be afforded to the Lenders thereby.
(d) Notwithstanding anything herein to the contrary, the Credit
Parties shall be required only to exercise best efforts to comply with the terms
of this Section 6.13 with respect to any leasehold or license interest in any
Real Property Assets acquired in connection with the acquisition of radio
stations KEYH-AM, KQQK-FM, KIOX-FM or KXGJ-FM.
(e) Notwithstanding the foregoing, the Credit Parties and Empire
Burbank shall not be obligated to comply with this Section 6.13 with regard to
(i) the Burbank Office Property so long as the Empire Burbank Loan shall be
outstanding, and the Empire Burbank Mortgage shall continue to encumber such
property and (ii) the Hollywood Office Property. So long as the Empire Burbank
Loan shall be outstanding, Empire Burbank shall not be required to grant to the
Administrative Agent a security interest in any of its assets.
6.14 Hedging Agreements. The Borrower shall maintain, at all times when the
Total Leverage Ratio as at the end of the preceding fiscal quarter for which
financial statements and a Compliance Certificate shall have been delivered
pursuant to Section 6.1(c) is greater than or equal to 4.00 to 1, a Hedging
Agreement, reasonably satisfactory to the Administrative Agent, that shall cap
for the period from the Closing Date to the second anniversary thereof the rate
of interest payable by the Borrower with respect to its outstanding Indebtedness
for borrowed money with respect to the principal amount of such Indebtedness
equal to the excess of (a) 50% of the aggregate outstanding principal amount of
Indebtedness for borrowed money and with respect to letters of credit of the
Borrower minus (b) any Indebtedness for borrowed money and with respect to
letters of credit of the Borrower that is subject to a fixed rate of interest.
6.15 Post-Closing Obligations. The Borrower will, and will cause each of
its Subsidiaries to, exercise diligent efforts to obtain a Control Agreement for
the deposit accounts
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and securities accounts maintained by the Credit Parties at Union Bank of
California, N.A. on or before the date that is sixty (60) days after the Closing
Date.
ARTICLE 7
Negative Covenants
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit shall have expired or terminated and all LC Disbursements
shall have been reimbursed, the Credit Parties covenant and agree with the
Administrative Agent and the Lenders that:
7.1 Indebtedness. The Credit Parties and their Subsidiaries shall not
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness created under the Loan Documents;
(b) Indebtedness existing on the date hereof which is set forth in
Schedule 4.14 and has been designated on such schedule as Indebtedness that will
remain outstanding following the funding of the initial Loans, and any
extension, renewal, refunding or replacement of any such Indebtedness that does
not increase the principal amount thereof;
(c) Unsecured Indebtedness of any Credit Party to any other Credit
Party;
(d) Indebtedness of Empire Burbank under the Empire Burbank Loan
Documents; provided that the outstanding principal amount of Indebtedness under
the Empire Burbank Loan does not exceed $3,000,000;
(e) Indebtedness evidenced by the promissory notes described in
clause (A) of the definition of "Liberman Subordinated Debt" which shall be paid
in full on the Closing Date with the proceeds of the Loans;
(f) Indebtedness to Jose and/or Lenard Liberman (or their spouses,
lineal descendants, or heirs and devises or any trusts controlled by them)
referred to in clause (B) of the definition of the "Liberman Subordinated Debt"
but only to the extent such indebtedness is subordinated to the Loans (or any
Credit Party's obligations to the Lenders and the Administrative Agent) pursuant
to subordination agreements substantially identical to the Liberman
Subordination Agreements; provided that the aggregate Indebtedness of the Credit
Parties under Sections 7.1(e) and (f) shall not exceed $5,000,000 at any one
time outstanding;
(g) Indebtedness of the Credit Parties (determined on a consolidated
basis without duplication in accordance with GAAP) consisting of Capital Lease
Obligations, secured by Liens permitted under Section 7.2(i) and/or in
connection with the acquisition of real property (other than any real property
received or acquired in any Acquisition or Relocation) in an aggregate principal
amount not exceeding $7,000,000 at any one time outstanding;
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(h) Indebtedness (i) under any Hedging Agreement required under
Section 6.14 or otherwise not prohibited under Section 7.5(b) or (ii) for bank
overdrafts in the ordinary course of business that are promptly repaid;
(i) Indebtedness arising from guaranties of Indebtedness of any Credit
Party permitted hereunder or other agreements of any Credit Party providing for
indemnification, adjustment of purchase price or similar customary obligations,
in each case incurred or assumed in connection with the disposition of any
business or assets of any Credit Party permitted by Section 7.4; provided that
the maximum assumable liability in respect of all such Indebtedness shall at no
time exceed the gross proceeds actually received by the Credit Parties in
connection with such disposition;
(j) Indebtedness in respect of the Relocation Profit to the extent
required to be paid to the Shop At Home Sellers pursuant to the Shop At Home
Acquisition Documents;
(k) unsecured Indebtedness in respect of the Senior Subordinated Notes
in an aggregate principal amount not exceeding $150,000,000; provided the
Borrower may incur up to an additional $50,000,000 of unsecured Indebtedness in
respect of the Senior Subordinated Notes so long as no Default shall have
occurred and be continuing or caused thereby and, if the interest rate on such
additional Indebtedness exceeds 10-1/8% per annum, then subject to the delivery
by the Borrower to the Administrative Agent of an officer's certificate executed
by a Financial Officer demonstrating on a pro forma basis compliance with the
covenant set forth in Section 7.10(c) for the period of four consecutive fiscal
quarters most recently ended as if such incurrence had occurred on the first day
of such period;
(l) Indebtedness required to be incurred in connection with any
"Incentive Bonus" which may become payable pursuant to Eduardo Leon's employment
agreement; and
(m) In addition to the foregoing, unsecured Indebtedness in an
aggregate principal amount not exceeding $4,000,000 at any time outstanding;
provided that Indebtedness under this subsection (m) shall not include any
Indebtedness to any holder of Holding Company Debt or other Indebtedness of any
Holding Company unless such Indebtedness is subject to a subordination agreement
satisfactory in form and substance to the Administrative Agent.
7.2 Liens. No Credit Party or Subsidiary will create, incur, assume or
permit to exist any Lien in favor of any other Person on any Property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof, except (the
following being called "Permitted Liens"):
(a) Liens created under the Loan Documents;
(b) any Lien on any property or asset of any Credit Party or
Subsidiary existing on the date hereof and set forth in Schedule 7.2(b);
provided that (i) such Lien shall not apply to any other property or asset of
any Credit Party and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
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(c) Liens imposed by any Governmental Authority for taxes, assessments
or charges not yet due or (in the case of property taxes and assessments not
exceeding $1,000,000 in the aggregate more than 90 days overdue) which are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of any Credit Party or Subsidiary in
accordance with GAAP;
(d) landlords', carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens, and vendors' Liens imposed by statute or common
law not securing the repayment of Indebtedness, arising in the ordinary course
of business which are not overdue for a period of more than 60 days or which are
being contested in good faith and by appropriate proceedings and Liens securing
judgments (including pre-judgment attachments) but only to the extent for an
amount and for a period not resulting in an Event of Default under Section
8.1(j) hereof;
(e) pledges or deposits under worker's compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance agreements;
(f) pledges and deposits to secure the performance of bids, tenders,
trade contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and encumbrances
consisting of zoning restrictions, easements, licenses, restrictions on the use
of Property or minor imperfections in title thereto which, in the aggregate, are
not material in amount, and which do not, in the aggregate, materially detract
from the value of the Property of any Credit Party or materially interfere with
the ordinary conduct of the business of any Credit Party;
(h) Liens consisting of bankers' liens and rights of setoff, in each
case, arising by operation of law, and Liens on documents presented in letter of
credit drawings;
(i) Liens on tangible property, including real or personal property,
acquired, constructed or improved by any Credit Party, provided that (A) such
Liens secure Indebtedness (including Capital Lease Obligations) permitted by
Section 7.1(g), (B) such Liens and the Indebtedness secured thereby are incurred
prior to or within 120 days after such acquisition or the completion of such
construction or improvement, (C) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing or improving such fixed or capital
assets, and (D) such security interests shall not apply to any other property or
assets of any Credit Party or Subsidiary;
(j) the Liens created by (i) the Empire Burbank Mortgage; provided
that such Liens shall apply only to the Burbank Property and any other property
of Empire Burbank referred to in such Mortgage on the date the Empire Burbank
Loan was funded and (ii) the Empire Burbank Lease;
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(k) Uniform Commercial Code financing statement filings with respect
to Property leased by the Credit Parties;
(l) Assignments of uncollectible accounts receivable to collection
agencies in the ordinary course of business; and
(m) any zoning or similar law or right reserved to or vested in any
Governmental Authority to control or regulate the use of any real property which
does not result in, or could not reasonably be expected to result in, a Material
Adverse Effect.
7.3 Contingent Liabilities. No Credit Party or Subsidiary will Guarantee
the Indebtedness or other obligations of any Person, or Guarantee the payment of
dividends or other distributions upon the stock of, or the earnings of, any
Person, except:
(a) endorsements of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business;
(b) Guarantees of obligations of any Credit Party by any other Credit
Party to the extent constituting Indebtedness expressly permitted by Section
7.1, except that no Credit Party shall Guarantee the Empire Burbank Loan;
(c) Guarantees in effect on the date hereof which are disclosed in
Schedule 4.14, and any replacements thereof in amounts not exceeding such
Guarantees;
(d) obligations to the Issuing Lender in respect of Letters of Credit;
(e) Guarantees of obligations of any Credit Party by any other Credit
Party for obligations to suppliers, customers, franchisees, lessors and
licensees to the extent incurred in the ordinary course of business;
(f) unsecured Guarantees by the Guarantors of the Senior Subordinated
Notes; and
(g) Guarantees of the Credit Parties in addition to the Guarantees
permitted under the foregoing clauses of this Section 7.3 (excluding any
Guarantee of the Empire Burbank Loan); provided that (i) the maximum aggregate
principal amount Guaranteed under this clause (g) shall not exceed $2,000,000 at
any time outstanding and (ii) the maximum aggregate principal amount Guaranteed
under this clause (g) plus principal amount of any Investments permitted under
Section 7.5(a)(iii) shall not exceed $4,000,000 at any time outstanding.
7.4 Fundamental Changes; Asset Sales. No Credit Party will enter into any
transaction of merger or consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution). No Credit Party will
effect any Disposition or Relocation or acquire any business or property from,
or capital stock of, or other equity interests in, or be a party to any
acquisition (including any Acquisition) of, any Person except for purchases by
any Credit Party of property to be used in the ordinary course of business,
Investments permitted hereunder, Capital Expenditures permitted hereunder, and
Acquisitions permitted hereunder (including the El Dorado Acquisitions and the
Guajillo Acquisitions). No
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Credit Party will convey, sell, lease, transfer or otherwise dispose (including
any Disposition) of, in one transaction or a series of transactions, any part of
its business or property, whether now owned or hereafter acquired (including
receivables and leasehold interests, but excluding (x) obsolete or worn-out
property (including leasehold interests), tools or equipment no longer used or
useful in its business, and (y) any inventory or other property sold or disposed
of in the ordinary course of business and on ordinary business terms; provided
that a Credit Party may (1) lease or sublease real property to the extent such
lease or sublease would not materially interfere with the operation of the
businesses of the Credit Parties and (2) enter into any sale, lease, transfer or
other disposition described clauses (a) through (f) of the definition of
Disposition. The Lenders and the Administrative Agent (as the case may be) at
the Borrower's expense hereby agree to complete, execute and deliver to the
Borrower, upon reasonable prior written notice to the Administrative Agent and
upon provision by the Borrower of a draft of such instrument, any release or
termination of security interest required to permit the applicable Credit Party
conveying, selling, leasing, transferring or otherwise disposing of any part of
its property pursuant to and in accordance with the preceding sentence to
convey, sell, lease, transfer or otherwise dispose of such property free and
clear of any Lien under the Collateral Documents.
Notwithstanding the foregoing provisions of this Section 7.4:
(a) any Credit Party (other than the Borrower or any License
Subsidiary) may be merged or consolidated with or into the Borrower or any other
Credit Party, and any Subsidiary that is not a Credit Party may be merged into
any Credit Party (with the Credit Party as the surviving entity); provided that
if any such transaction shall be between a Subsidiary and the Borrower or a
Wholly Owned Subsidiary, the Borrower or such Wholly Owned Subsidiary, as
applicable, shall be the continuing or surviving corporation;
(b) any Credit Party (other than the Borrower or any License
Subsidiary) may sell, lease, transfer or otherwise dispose of any or all of its
property (upon voluntary liquidation or otherwise) to any other Credit Party;
(c) the capital stock of, or other equity interests in, any Credit
Party may be sold, transferred or otherwise disposed of to the Borrower or any
other Credit Party;
(d) the Borrower may enter into Acquisitions to acquire all or
substantially all of the assets or any division, business or broadcast station
or capital stock of, or other equity interests in (including acquisitions by
merger and each of the El Dorado Acquisitions and the Guajillo Acquisitions, to
the extent such Acquisition is not consummated on the Closing Date), any Person
only located in and organized under the laws of the United States or any state
thereof (collectively, "Permitted Acquisitions"), subject to satisfaction of the
following conditions:
(i) the aggregate consideration paid or exchanged by the Borrower
in connection with any such acquisition shall not exceed $50,000,000;
(ii) both (A) immediately prior to the proposed Acquisition and
(B) immediately following the proposed Acquisition after giving effect to
such Acquisition on a pro forma basis incorporating such pro forma
assumptions as are satisfactory to the
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Administrative Agent in its reasonable discretion, the Credit Parties shall
be in compliance with the covenants set forth in Section 7.10;
(iii) the business so acquired shall be in the Permitted Lines
of Business and shall be located in the United States;
(iv) the assets so acquired shall be transferred free and clear
of any Liens (except to the extent permitted by Section 7.2), and no
Indebtedness shall be incurred, guaranteed, assumed or consolidated in
connection with such Acquisition (except to the extent permitted by Section
7.1);
(v) the Administrative Agent shall have received Lien searches
reasonably satisfactory to the Administrative Agent with respect to the
assets of, and equity interests in, any business being acquired;
(vi) the Administrative Agent shall have received a First
Priority perfected security interest in substantially all of the assets
being acquired in such Acquisition (including the assets of any entity
acquired) but excluding real property not otherwise required under Section
6.13 and all filings, recordings and other actions with respect thereto
shall be reasonably satisfactory in form and substance to the
Administrative Agent; provided, however, that the security interest or
mortgage as to any real property asset which is required to be obtained
hereunder shall be perfected within a reasonable time after the
consummation of such Acquisition;
(vii) if requested, the Administrative Agent shall have received
an opinion of counsel in each applicable jurisdiction reasonably
satisfactory to it to the effect that the Administrative Agent has been
granted a perfected security interest in such assets and as to such other
matters as the Administrative Agent may reasonably require;
(viii) in connection with such proposed Acquisition, the Borrower
shall deliver to the Administrative Agent (i) a copy of the purchase
agreement pursuant to which such Acquisition will be consummated, (ii)
unless waived by the Administrative Agent in its reasonable discretion, a
consent to the assignment of such purchase agreement to the Administrative
Agent for collateral purposes, which consent shall be in form and substance
satisfactory to the Administrative Agent; (iii) a copy of each material
services agreement, consulting agreement, lease, credit or financing
agreement or other material agreement relating to such Acquisition to be in
effect after the consummation of such Acquisition, (iv) unless waived by
the Administrative Agent in its reasonable discretion, an opinion of
counsel to the sellers addressed to the Administrative Agent and the
Lenders or permitting them to rely thereon and (v) such other information
or reports as the Administrative Agent may reasonably request with respect
to such Acquisition;
(ix) to the extent any representation or warranty herein makes
reference to one or more of the Schedules to this Agreement, the Credit
Parties shall make revisions to such Schedules, in each case as of the date
of the consummation of such Acquisition and notwithstanding that such
representation or warranty may expressly state that it is
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made as of an earlier date, reasonably acceptable to the Administrative
Agent, solely to take into account the consummation of such Acquisition;
(x) the Credit Parties shall have obtained all material
permits, licenses, authorizations or consents from all Governmental
Authorities (including the FCC and the United States Department of Justice)
and all consents of other Persons, in each case that are necessary in
connection with such proposed Acquisition, the continued operation of the
business being acquired in such proposed Acquisition, as proposed to be
conducted, by the Credit Parties, prior to or concurrently with the
consummation thereof, and each of the foregoing shall be in full force and
effect, in each case other than those the failure to obtain or maintain
which, either individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect;
(xi) subject to the waiver by the Administrative Agent in its
reasonable discretion, all applicable waiting periods with respect to such
proposed Acquisition shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on such Acquisition (including the
Pre-Merger/Hart-Scott-Rodino Act, as amended), and no action, request for
stay, petition for review or rehearing, reconsideration or appeal with
respect to any of the foregoing shall be pending, and the time for any
applicable Governmental Authority to take action to set aside its consent
on its own motion shall have expired;
(xii) the Administrative Agent shall have received a certificate
from the Credit Parties' insurance broker or other evidence satisfactory to
it that all insurance required to be maintained pursuant to Section 6.5 is
in full force and effect with respect to the assets being acquired in such
Acquisition and that the Administrative Agent on behalf of the Lenders has
been named as additional insured, mortgagee and loss payee thereunder to
the extent required under Section 6.5;
(xiii) immediately prior to such Acquisition and after giving
effect thereto, no Default shall have occurred and be continuing;
(xiv) to the extent either or both of the El Dorado Acquisitions
is not consummated on the Closing Date and only with respect to such
Acquisition, since March 31, 2002, there shall have occurred no Material
Adverse Effect (in the reasonable judgment of the Administrative Agent)
with respect to the Credit Parties or the assets to be acquired in
connection with the Acquisition;
(xv) to the extent either or both of the El Dorado Acquisitions
is not consummated on the Closing Date and only with respect to such
Acquisitions, the Administrative Agent shall have received a certificate,
substantially in the form of Exhibit H, from a Financial Officer of the
Borrower to the effect that, as of the date of such Acquisition and after
giving effect to the Loans to fund a portion of the purchase price thereof:
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(A) the aggregate value of all properties of the Credit
Parties at their present fair saleable value on a going concern basis
(i.e., the amount that may be realized within a reasonable time,
considered to be six months to one year, either through collection or
sale at the regular market value, conceiving the latter as the amount
that could be obtained for such properties within such period by a
capable and diligent businessman from an interested buyer who is
willing to purchase under ordinary selling conditions), exceed the
amount of all the debts and liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the Credit
Parties;
(B) the Credit Parties will not, on a consolidated basis,
have unreasonably small capital with which to conduct their business
operations as heretofore conducted; and
(C) the Credit Parties will have, on a consolidated basis,
sufficient cash flow to enable them to pay their debts as they mature;
Such certificate shall include a statement to the effect that the financial
projections and underlying assumptions contained in such analysis are, fair
and reasonable in the opinion of such Financial Officer at the time when
made; and
(xvi) to the extent either or both of the El Dorado Acquisitions
is not consummated on the Closing Date and only with respect to such
Acquisition, such Acquisition shall have been consummated substantially in
accordance with the terms of the El Dorado Acquisitions Documents except
for any conditions set forth therein that shall have been waived with the
consent of the Administrative Agent and the Lenders; and
(e) The Credit Parties shall be permitted to effect any Relocation,
provided that the following conditions have been satisfied:
(i) Such Voluntary Relocation shall not, as determined on the
date of the consummation of such Voluntary Relocation, have a material
adverse effect on the business, assets, operations or financial condition
of the Credit Parties, taken as a whole;
(ii) The Credit Parties shall give 30 days' prior written notice
to the Administrative Agent of the proposed Relocation which notice shall
include a description of all material aspects of the Relocation including
the consideration to be received by any Credit Party in connection
therewith;
(iii) Simultaneously with informing the Shop At Home Sellers
under the Shop At Home Acquisition Documents of any Relocation Profit, the
Credit Parties shall so inform the Administrative Agent and thereafter keep
the Administrative Agent apprised of the negotiation thereof, and shall
forward to the Administrative Agent copies of all material correspondence,
including, without limitation, any "Buyer's Relocation Profit Notice" or
"Challenge Notice" (as such terms are defined in the Shop At Home
Acquisition Documents) and all correspondence pertaining to any
implementation of the Valuation Mechanism (as defined in the Shop At Home
Acquisition Documents);
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(iv) to the extent any representation or warranty herein makes
reference to one or more of the Schedules to this Agreement, the Credit
Parties shall make revisions to such Schedules, in each case as of the date
of the consummation of any Relocation and notwithstanding that such
representation or warranty may expressly state that it is made as of an
earlier date, reasonably acceptable to the Administrative Agent, solely to
take into account the consummation of such Relocation; and
(v) In connection with any Involuntary Relocation the Credit
Parties shall use their best efforts to receive only cash consideration
therefor.
(f) The Credit Parties shall be permitted to sell any radio and
television stations in any fiscal year, provided that the aggregate EBITDA
attributable to all such stations sold in any fiscal year shall not exceed 15%
of the EBITDA of the Credit Parties for the immediately preceding fiscal year as
stated in the Compliance Certificate required to be delivered for such fiscal
year pursuant to Section 6.1(c) or, if such Compliance Certificate is not
available at the time of such proposed sale, as demonstrated through financial
statements and reports acceptable to the Administrative Agent in its reasonable
discretion.
(g) Intermediate Holdings may be merged with and into the Borrower on
or after the Closing Date; provided that (i) the Borrower shall be the surviving
corporation, (ii) immediately prior to such merger, Intermediate Holdings shall
have no assets except for its ownership interest in the Borrower and no
Indebtedness except Indebtedness pursuant to the Oaktree Note Purchase Documents
which will be paid in full on or before the date of such merger, (iii) such
merger does not require any consent or approval of, registration or filing with,
or any other action by, any Governmental Authority (other than the consent of
the FCC, which consent has been obtained) or any other Person except for such
consents, approvals, registrations, filings and other actions as have been
obtained on or before the date of such merger; and (iv) such merger will not
violate or result in a default under any material indenture, agreement or other
instrument binding upon any Credit Party, or any assets, or give rise to a right
thereunder to require any payment to be made by any Credit Party, where any such
violation or default or right to payment would have a Material Adverse Effect.
(h) Upon 30 days prior written notice to the Administrative Agent and
with the prior written consent of the Administrative Agent (such consent not to
be unreasonably withheld), the Borrower may merge with an Affiliate incorporated
solely for the purpose of reincorporating the Borrower in another jurisdiction
to realize tax or other benefits. The Administrative Agent shall give prompt
notice thereof to the Lenders.
7.5 Investments; Hedging Agreements.
(a) No Credit Party will make or permit to remain outstanding any
Investment, except in the case of any Credit Party:
(i) Investments by the Credit Parties in capital stock of, and
other equity interests in, their Subsidiaries to the extent outstanding at
the Effective Time and as set forth on Schedule 4.12 hereto, Investments
consisting of deferred payment obligations in connection with permitted
sales of assets in the aggregate not to exceed
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$250,000 at any one time, advances by any Credit Party to any other Credit
Party (which advances, whether existing on the Closing Date or made
thereafter, may be cancelled or forgiven by such Credit Party) and capital
contributions by any Credit Party to any other Credit Party;
(ii) Permitted Investments;
(iii) advances, loans and extensions of credit to any director,
officer or employee of a Credit Party or any other Person, Investments by
the Credit Parties in connection with the satisfaction of accounts
receivable or other Indebtedness due from a customer of a Credit Party or
claims due and owing to the Credit Parties or otherwise for the benefit the
business of the Credit Parties; provided that (A) the maximum aggregate
principal amount of any Investments permitted under Section 7.5(a)(iii)
shall not exceed $3,000,000 at any time outstanding and (B) the maximum
aggregate principal amount of any Investments permitted under Section
7.5(a)(iii) plus the principal amount Guaranteed under Section ---- 7.3(g)
shall not exceed $4,000,000 at any time outstanding, and, so long as no
Default shall have occurred and be continuing and no Default shall be
caused thereby, the Credit Parties may forgive or cancel any such advance,
loan or extension of credit;
(iv) Checking and deposit accounts used in the ordinary course
of business maintained with the Administrative Agent or depository
institutions who have executed Control Agreements except for (A) the escrow
account maintained with U.S. Bank National Association in the amount not
exceeding $50,000, (B) the deposit accounts maintained with Wells Fargo
Bank, N.A., so long as the Borrower maintains an agreement to sweep the
daily balances in such accounts at the end of each Business Day on which
such daily balances exceed a specified balance, not to exceed $250,000 to
(1) an account at Union Bank of California, N.A. described on Schedule 1 of
the Control Agreement delivered in connection with the Existing Credit
Agreement (the "Existing Control Agreement") or (2) an account covered by a
new Control Agreement obtained pursuant to Section 6.15 or otherwise, and
(C) the securities accounts and deposit accounts maintained with Union Bank
of California, N.A., except to the extent a Control Agreement is obtained
pursuant to Section 6.15;
(v) escrow deposits made pursuant to the El Dorado Acquisitions
Documents, the Guajillo Acquisitions Documents and Permitted Acquisitions;
(vi) the Borrower and its Subsidiaries may continue to own the
Investments owned by them and described in Schedule 7.5 annexed hereto and
the Borrower may own any intercompany loans made by Intermediate Holdings
to Holdings I prior to the Closing Date (the ownership of which will be
transferred to the Borrower by operation of law upon the consummation of
the Intercompany Merger) and the Borrower may forgive or cancel such loans;
(vii) the Borrower may acquire and hold obligations of one or
more officers or other employees of the Credit Parties in connection with
such officers' or employees' acquisition of shares of Holdings I's common
stock, so long as no cash is actually advanced by any Credit Party to such
officers or employees or any Holding
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Company in connection with the acquisition of any such obligations and, so
long as no Default shall have occurred and be continuing and no Default
shall be caused thereby, the Credit Parties may forgive or cancel any such
advance, loan or extension of credit;
(viii) the Credit Parties may accept promissory notes, debt or
equity securities or other Investments as consideration in any Relocation,
the aggregate amount of which received after the Closing Date shall not
exceed $10,000,000; provided, that the Credit Parties may accept promissory
notes, debt or equity securities or other Investments as consideration in
an Involuntary Relocation in excess of such amount so long as the receipt
of such excess Investments would not result in a Material Adverse Effect;
(ix) the Borrower may make a loan to Intermediate Holdings on
the Closing Date in the amount of the Intermediate Holdings Intercompany
Note and the Borrower may forgive or cancel such loan; and
(x) (1) for so long as Holdings I is an S Corporation or a
substantially similar pass-through entity for federal income tax purposes
and a QSSS Election is in effect for Intermediate Holdings (prior to the
Intercompany Merger) and the Borrower, the Borrower may make loans to
Intermediate Holdings, Holdings I or the shareholders of Holdings I in an
amount (together with dividend payments made pursuant to Section 7.6(a))
not in excess of the Permitted Holdings Tax Distributions and the Permitted
Shareholder Tax Distributions, (2) so long as no Default shall have
occurred and be continuing and no Default shall be caused thereby, at any
time the Total Leverage Ratio is less than 4.5 to 1 as of the end of any
fiscal year with respect thereto, as shown in the financial statements
required to be delivered pursuant to Section 6.1(a) and in the Compliance
Certificate required to be delivered in respect of such fiscal year
pursuant to Section 6.1(c), the Borrower may make loans (together with
dividend payments made pursuant to Section 7.6(c)) to any Holding Company
or the shareholders of Holdings I to the extent of Excess Cash Flow for
such fiscal year; provided that the aggregate amount of loans made pursuant
to this clause (2) after the date hereof (together with the aggregate
amount of dividends made pursuant to Section 7.6(c) after the date hereof,
shall not exceed $5,000,000, (3) so long as no Default shall have occurred
or be continuing or shall be caused thereby, the Borrower may make loans to
any Holding Company to pay corporate administrative expenses, provided,
that the amount of cash loans made pursuant to this clause (3), together
with the amount of cash distributions made pursuant to Section 7.6(d),
shall not exceed $1,000,000 in any fiscal year, and (4) so long as no
Default shall have occurred or be continuing or shall be caused thereby,
any Credit Party may make loans to Holdings I to enable Holdings I to make
the payments with respect to any portion of the "Incentive Bonus" which may
become payable pursuant to the employment agreements of Andrew Mars dated
November 15, 1998 and Xavier Ortiz dated September 1, 1999, respectively,
or with respect to any notes issued with respect thereto; provided that the
aggregate amount of such loans together with the aggregate amount of
dividends made pursuant to Section 7.6(g) shall not exceed the amount of
such bonuses required to be paid under such employment agreements
(including any amounts required to be paid under any such notes), and (5)
Borrower may forgive or cancel any of the loans made pursuant to clause
(1), (2), (3) or (4) above.
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(b) No Credit Party will enter into any Hedging Agreement, other than
(i) Hedging Agreements required to be entered into pursuant to Section 6.14 of
this Agreement and (ii) Hedging Agreements entered into in the ordinary course
of business to hedge or mitigate risks to which any Credit Party is exposed in
the conduct of its business or the management of its liabilities.
7.6 Restricted Junior Payments. No Credit Party will declare or make any
Restricted Junior Payment at any time; provided, however, that (a) for so long
as Holdings I is an S Corporation or a substantially similar pass-through entity
for federal income tax purposes and a QSSS Election is in effect for
Intermediate Holdings (prior to the Intercompany Merger) and the Borrower, the
Borrower may declare and make dividend payments to Intermediate Holdings (or
after the merger of Intermediate Holdings with and into the Borrower in
accordance with Section 7.4(g), to Holdings I) in an amount (together with loans
made pursuant to Section 7.5(a)(x)(1)) not in excess of the Permitted Holdings
Tax Distributions and the Permitted Shareholder Tax Distributions; (b) so long
as no Default shall have occurred and be continuing and no Default shall be
caused thereby, the Borrower may make scheduled payments of interest on the
Senior Subordinated Notes to the extent required to be paid in cash pursuant to
the Senior Subordinated Note Indenture and any liquidated damages required to be
paid in connection with any registration rights agreement related thereto; (c)
so long as no Default shall have occurred and be continuing and no Default shall
be caused thereby, at any time the Total Leverage Ratio is less than 4.5 to 1 as
of the end of any fiscal year with respect thereto, as shown in the financial
statements required to be delivered pursuant to Section 6.1(a) and Compliance
Certificate required to be delivered in respect of such fiscal year pursuant to
Section 6.1(c), the Borrower may declare and make dividend payments (together
with loans made pursuant to Section 7.5(a)(x)(2)) to Intermediate Holdings (or
after the merger of Intermediate Holdings with and into the Borrower in
accordance with Section 7.4(g), to Holdings I or any other Holding Company, as
applicable) to the extent of Excess Cash Flow for such fiscal year, provided
that the aggregate amount paid pursuant to this clause (c) after the date hereof
(together with the aggregate amount of loans made pursuant to Section
7.5(a)(x)(2) after the date hereof) shall not exceed $5,000,000, (d) so long as
no Default shall have occurred or be continuing or shall be caused thereby the
Borrower may declare and make Restricted Junior Payments to any Holding Company
to pay corporate administrative expenses, provided that the amount of cash
distributions made pursuant to this clause (d) (together with the amount of
loans made pursuant to Section 7.5(a)(x)(3)) shall not exceed $1,000,000 in any
fiscal year, (e) the Credit Parties may pay their obligations to Empire Burbank
to the extent required to be paid under the Empire Burbank Lease, (f) so long as
no Default shall have occurred or be continuing or shall be caused thereby,
Liberman Broadcasting, Inc., or any successor entity thereto, may make the
payments described in clause (vi) of the definition of Restricted Junior Payment
or make the payments with respect to any notes issued under the employment
agreement described in such clause (vi), (g) so long as no Default shall have
occurred or be continuing or shall be caused thereby, any Credit Party may make
dividend payments to Holdings I (through another Holding Company, if
applicable), to enable Holdings I to make the payments with respect to any
portion of the "Incentive Bonus" which may become payable pursuant to the
employment agreements of Andrew Mars dated November 15, 1998 and Xavier Ortiz
dated September 1, 1999, respectively, or with respect to any notes issued with
respect thereto; provided that the aggregate amount of such dividends together
with the aggregate amount of loans made pursuant to Section 7.5(a)(x)(4) shall
not exceed the amount of such bonuses required to be paid under such
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employment agreements (including any amounts required to be paid under any such
notes), and (h) the Credit Parties may make payments on the Liberman
Subordinated Debt on the Closing Date in an amount not in excess of $1,920,000
and may make payments of interest on the Liberman Subordinated Debt to the
extent such payments of interest are permitted to be made under the Liberman
Subordination Agreements. Nothing herein shall be deemed to prohibit the making
of any dividend or distribution, or other payment constituting a Restricted
Junior Payment under clauses (ii) or (iii) of the definition thereof by any
Subsidiary to any Credit Party. Notwithstanding anything herein to the contrary,
if part or all of a Permitted Holdings Tax Distribution or a Permitted
Shareholder Tax Distribution is made in the form of a loan (rather than a
dividend or other form of distribution), then (i) the terms of such loan shall
be determined in the sole discretion of the Borrower, and (ii) the subsequent
cancellation or forgiveness of such loan shall not be treated as a Restricted
Junior Payment and shall not reduce the amount of subsequent Permitted Holdings
Tax Distributions or Permitted Shareholder Tax Distributions.
7.7 Transactions with Affiliates. Except as expressly permitted by this
Agreement (including pursuant to any of the Sections of Articles 6 or 7), no
Credit Party will directly or indirectly (a) make any Investment in an
Affiliate; (b) transfer, sell, lease, assign or otherwise dispose of any
property to an Affiliate; (c) merge into or consolidate with an Affiliate, or
purchase or acquire property from an Affiliate; or (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including guarantees and assumptions of obligations of an Affiliate); provided
that:
(i) any Affiliate who is an individual may serve as a director,
officer, employee or consultant of any Credit Party, receive compensation
for his or her services in such capacity and benefit from Investments to
the extent specified in Section 7.5(a)(iii);
(ii) the Credit Parties may engage in and continue the
transactions with or for the benefit of Affiliates which are described in
Schedule 7.7, and in other similar transactions or transactions entered in
the ordinary course of business provided that the terms of such similar
transactions or such ordinary course transactions are not less favorable to
the Credit Parties than the terms of a commercially reasonable, arms'
length transaction between non-affiliated parties; provided, further that
with respect to any such transaction involving the payment by a Credit
Party of consideration in excess of $1,000,000, the Credit Parties shall
provide adequate documentary and other evidence reasonably satisfactory to
the Administrative Agent that the terms of such transaction satisfy the
immediately preceding proviso;
(iii) the Credit Parties may make the payments permitted by
Sections 6.9(d) and (e); and
(iv) the Borrower may make an intercompany loan to Intermediate
Holdings pursuant to the Intermediate Holdings Intercompany Note and
Intermediate Holdings may merge with and into the Borrower in accordance
with Section 7.4(g).
7.8 Restrictive Agreements. No Credit Party will, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement (other
than this Agreement, the
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Senior Subordinated Note Indenture and the documents related thereto and the
Holdings Securities Purchase Documents and the Subordination and Intercreditor
Agreement dated as of March 21, 2001 by and among Holdings I, Alta and Oaktree,
as such agreement is amended by the Holdings Amendment and as it may be further
amended, supplemented or otherwise modified from time to time in accordance with
the restrictions set forth in Section 7.15) that prohibits, restricts or imposes
any condition upon (a) the ability of any Credit Party to create, incur or
permit to exist any Lien upon any of its property or assets, or (b) the ability
of any Subsidiary to pay dividends or other distributions with respect to any
shares of its capital stock or other equity interests or to make or repay loans
or advances to any other Credit Party or to Guarantee Indebtedness of any other
Credit Party; provided that (i) the foregoing shall not apply to restrictions
and conditions imposed by law, this Agreement, the Senior Subordinated Note
Indenture and the documents related thereto, or the Holdings Securities Purchase
Documents or the Subordination and Intercreditor Agreement referred in this
Section 7.8 above, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 7.8 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition), (iii) the foregoing shall not
apply to customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary, its assets or other Dispositions pending such sale
or Disposition; provided such restrictions and conditions apply only to the
Subsidiary or assets that are to be sold or Disposed of, as the case may be, and
such sale or Disposition is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any agreement
relating to secured Indebtedness permitted by this Agreement and (v) clause (a)
of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
7.9 Sale-Leaseback Transactions. No Credit Party will, directly or
indirectly, enter into any arrangements with any Person (other than another
Credit Party; provided the Administrative Agent receives prior written notice of
such transaction, copies of all documents and an opportunity to comment thereon)
whereby such Credit Party shall sell or transfer (or request another Person to
purchase) any property, real, personal or mixed, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property from any Person.
7.10 Certain Financial Covenants. All of the following covenants shall be
measured at the end of each fiscal quarter of the Credit Parties, based on the
four immediately preceding fiscal quarters of the Credit Parties, except as
otherwise set forth below.
(a) Total Leverage Ratio. The Credit Parties will not permit the Total
Leverage Ratio at the end of any fiscal quarter occurring during the periods
below to exceed the ratio set opposite such period below:
Period Ratio
------ -----
Closing Date through June 29, 2003 Not applicable
June 30, 2003 through June 29, 2004 7.25 to 1
June 30, 2004 through December 30, 2004 6.75 to 1
December 31, 2004 through June 29, 2005 6.25 to 1
June 30, 2005 through December 30, 2005 6.00 to 1
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December 31, 2005 through June 29, 2006 5.50 to 1
June 30, 2006 through June 29, 2007 5.00 to 1
June 30, 2007 and thereafter 4.50 to 1
(b) Senior Leverage Ratio. The Credit Parties will not permit the
Senior Leverage Ratio at the end of any fiscal quarter occurring during the
periods below to exceed the ratio set opposite such period below:
Period Ratio
Closing Date through June 30, 2004 4.00 to 1
July 1, 2004 and thereafter 3.50 to 1
(c) Interest Coverage Ratio. The Credit Parties will not permit the
Interest Coverage Ratio at the end of any fiscal quarter occurring during the
periods below to be less than the ratio set opposite such period below:
Period Ratio
Closing Date through June 29, 2003 1.40 to 1
June 30, 2003 through December 30, 2003 1.50 to 1
December 31, 2003 through June 30, 2004 1.60 to 1
July 1, 2004 through December 31, 2004 1.75 to 1
January 1, 2005 through June 30, 2006 2.00 to 1
July 1, 2006 and thereafter 2.25 to 1
(d) Capital Expenditures. The Credit Parties will not permit the
aggregate amount of Capital Expenditures in any fiscal year to exceed
$8,000,000; provided, however that (i) for each fiscal year, no more than
$2,000,000 in each fiscal year may be used for Real Estate Acquisition
Expenditures, (ii) for each fiscal year, no more than $6,000,000 may be used for
Capital Expenditures not constituting Real Estate Acquisition Expenditures, and
(iii) to the extent that actual Capital Expenditures permitted pursuant to
clause (ii) above in any fiscal year shall be less than the maximum amount
permitted by clause (ii) for such fiscal year, the excess of the maximum amount
permitted under clause (ii) over the actual Capital Expenditures shall be
available for Capital Expenditures under clause (ii) in the immediately
succeeding fiscal year but may not be carried over into any subsequent fiscal
year; provided that the sublimits set forth in clauses (i) and (ii) above shall
not apply to fiscal year 2002; and provided further that up to $1,000,000 of the
unused availability in fiscal year 2002 may be carried forward to fiscal year
2003 for Capital Expenditures not constituting Real Estate Acquisition
Expenditures. For purposes of this Section 7.10(d), Capital Expenditures made by
the reinvestment of Net Cash Payments in accordance with Section 2.10(b) shall
not be deemed Capital Expenditures.
(e) Fixed Charge Ratio. The Credit Parties will not permit the Fixed
Charge Ratio at the end of any fiscal quarter occurring after the Closing Date
to be less than 1.10 to 1.
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7.11 Lines of Business; Restrictions on the Borrower. No Credit Party shall
engage to any substantial extent in any line or lines of business activity other
than (i) the Permitted Lines of Business, and (ii) such other lines of business
as may be consented to by the Required Lenders and the Administrative Agent. The
Borrower shall not own any assets, other than holding the equity interests of
its Subsidiaries, cash and cash equivalents, and Investments permitted hereunder
and shall not conduct any business, other than performing managerial functions
relating the business of the Credit Parties and entering into and performing the
Basic Documents, the Basic Documents (as defined in the Existing Credit
Agreement) and other documents to which it is a party to the extent the
execution of such documents is not otherwise prohibited hereunder (excluding by
operation of this sentence) including agreements with respect to Acquisitions
permitted hereunder.
7.12 Subordinated Indebtedness. No Credit Party will purchase, redeem,
retire or otherwise acquire for value, or set apart any money for a sinking,
defeasance or other analogous fund for the purchase, redemption, retirement or
other acquisition of, or make any payment or prepayment of the principal of or
interest on, or any other amount owing in respect of, any Subordinated
Indebtedness, except (a) to the extent permitted by the Liberman Subordination
Agreements and (b) payments in respect of the Senior Subordinated Notes and
payments of liquidated damages required to be paid in connection with any
registration rights agreement related thereto permitted by Section 7.6(b).
7.13 Modifications of Certain Documents. No Credit Party will consent to
any modification, supplement or waiver of any of the provisions of any
agreements, instruments or documents in respect of any Subordinated
Indebtedness, the effect of which is to (i) increase principal, interest, fees,
reimbursements or other amounts payable with respect thereto or create any
additional payment obligations thereunder, (ii) accelerate any scheduled or
otherwise required payments of principal, interest, fees, reimbursements or
other amounts, (iii) cause any covenants or other agreements to be more
restrictive upon, or burdensome to the Credit Parties in any material respect,
(iv) alter any event of default provisions contained in any Subordinated
Indebtedness in a manner materially adverse to the Credit Parties, (v) modify
any of the subordination provisions thereof, (vi) designate any Indebtedness
(other than the Loans and the other obligations of the Credit Parties under the
Loan Documents) as "Designated Senior Debt" for purposes of the Senior
Subordinated Note Indenture, or (vii) make any other change which could
reasonably be expected to have a Material Adverse Effect, in each case, without
the prior consent of the Required Lenders or the Administrative Agent on their
behalf. No Credit Party will consent to any modification, supplement or waiver
of any of the provisions of any of the Clear Channel Acquisition Documents, the
Shop At Home Acquisition Documents El Dorado Acquisitions Documents or the
Guajillo Acquisitions Documents in a manner materially adverse to the Credit
Parties, without the prior consent of the Required Lenders or the Administrative
Agent on their behalf. Without limiting the generality of the foregoing except
as expressly permitted by this Agreement, no Credit Party will Guarantee any
Subordinated Indebtedness or any Holding Company Debt or any other Indebtedness
of any Holding Company without the prior consent of the Required Lenders and the
Administrative Agent.
7.14 Empire Burbank.
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(a) Empire Burbank shall not (i) make any optional payment or
prepayment under the Empire Burbank Loan Documents (other than a prepayment made
with the proceeds of a Permitted Refinancing), (ii) amend, modify or change, or
consent or agree to any amendment, modification or change to, the Empire Burbank
Loan Documents in a manner which materially adversely affects the Administrative
Agent or the Lenders (it being understood that no amendment or modification to
Section 10.1 (regarding the pledge of Empire Burbank stock to the Administrative
Agent, and the exercise of the Administrative Agent's rights in connection
therewith), Section 13, or Section 14.3 (regarding notice to the Administrative
Agent) thereof shall be permitted without the prior written consent of the
Administrative Agent) or (iii) amend, modify or change, or consent or agree to
any amendment, modification or change to, the Empire Burbank Lease in a manner
which materially adversely affects the Administrative Agent or the Lenders (it
being understood that no amendment or modification to the last sentence of
Section 5.2 of the Empire Burbank Lease (regarding the rights of creditors to
enter the premises to exercise rights and remedies regarding personal property
of LBI) shall be permitted without the prior written consent of the
Administrative Agent) without the prior written consent of the Administrative
Agent, which consent shall not be unreasonably withheld or delayed.
(b) The Borrower agrees to deliver to the Administrative Agent prompt
written notice of any written declaration of default made by the lender under
the Empire Burbank Loan Documents.
(c) Empire Burbank shall not (i) engage in any business other than the
ownership of the Burbank Office Property (and any additions to such Property),
the leasing of such Property pursuant to the Empire Burbank Lease, the
subleasing of certain portions thereof under the Empire Burbank Sublease, the
subleasing or renting to third parties of certain sound stages, production
equipment, studios and related office space included in such Property (or any
additions to such Property) for use by such third parties or Empire Burbank as
production facilities and businesses incidental thereto and guaranteeing the
obligations under the Loan Documents, obligations under the Senior Subordinated
Notes and the Senior Subordinated Note Indenture and the documents related
thereto or (ii) own any assets other than the Burbank Office Property and any
additions to such Property, its interests under the Empire Burbank Lease and the
Empire Burbank Sublease and certain production and related equipment for use by
third parties in connection with the subleasing of such sound stages and studios
and additional assets necessary or advisable for the conduct in the ordinary
course of its business described in clause (i).
7.15 Holding Company Restrictions. Except for (a) the Holding Company Debt
incurred or to be incurred by Holdings I on or after March 20, 2001 pursuant to
the Holdings Securities Purchase Documents, (b) intercompany Indebtedness
incurred by any Holding Company and owing to Intermediate Holdings (and after
the Intercompany Merger, such Indebtedness and other intercompany Indebtedness
incurred by any Holding Company to the Borrower or any other Credit Party or any
other Holding Company) and (c) the Indebtedness which may be required to be
incurred by the Holding Company under the employment agreements described in
Section 5.1(i) to the extent that payments under the phantom stock incentive
provisions of such agreements are not permitted by this Agreement or any other
document to be made in cash, the Holding Companies shall not create incur,
assume or permit to exist any Indebtedness which requires the payment in cash of
any principal or interest in respect
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thereof prior to March 31, 2010 without the prior written consent of the
Required Lenders. No Holding Company will purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
or make any payment or prepayment of the principal of, or interest on, or any
other amount owing in respect of, the Holdings Securities Purchase Documents,
except, subject to the provisions of the Alta Subordination Agreement, to the
extent required by the Holdings Securities Purchase Documents. No Holding
Company will consent to any modification, supplement or waiver of any of the
provisions of the Holdings Securities Purchase Documents, the effect of which is
to (i) increase principal, interest, fees, reimbursements or other amounts
payable with respect thereto or create any additional payment obligations
thereunder, (ii) accelerate any scheduled or otherwise required payments of
principal, interest, fees, reimbursements or other amounts, (iii) cause any
covenants or other agreements to be more restrictive upon, or burdensome to,
such Holding Company, in any respect materially adverse to the Credit Parties,
(iv) alter any event of default provisions contained in the Holdings Securities
Purchase Documents in any material respect, or (v) make any other change which
could reasonably be expected to have a Material Adversely Effect, in each case,
without the prior written consent of the Required Lenders or the Administrative
Agent on their behalf except that (A) Holdings I may enter into and perform its
obligations under the Holdings Amendment and (B) in accordance with the Holdings
Amendment, may, on the Closing Date, exchange (x) the notes outstanding under
the Holdings Securities Purchase Documents for new notes, in the form attached
to the Holdings Amendment, and (y) the warrants issued pursuant to the Holdings
Securities Purchase Documents for new warrants, in the form attached to the
Holdings Amendment. Intermediate Holdings shall not conduct any business or own
any assets other than holding all of the equity interests issued by the
Borrower, cash and cash equivalents, any loans to Holdings I or any Credit
Party, performing managerial functions relating to the businesses of the Credit
Parties and entering into and performing its obligations under the Oaktree Note
Purchase Documents, the Oaktree Redemption Agreement and the Basic Documents to
which it is a party except that Intermediate Holdings may enter and perform the
Intermediate Holdings Intercompany Note, the documents relating to the
Intercompany Merger and may merge with and into the Borrower in accordance with
the provisions of Section 7.4(g). Holdings I shall not conduct any business or
own any assets other than holding all of the equity interests issued by
Intermediate Holdings, or, after the Intercompany Merger, all of the equity
interests issued by the Borrower (or, if a new Holding Company is created after
the Closing Date, all of the equity interests of such Holding Company), cash and
cash equivalents, performing managerial functions relating to the businesses of
the Credit Parties and entering into and performing its obligations under the
Holdings Securities Purchase Documents, the other Basic Documents to which it is
a party, the key employee agreements to which it is a party (and service
agreements with any Credit Party relating to such employment agreements), the
intercreditor and subordination agreement referred to in the last sentence of
this Section 7.15, making distributions or loans to its shareholders with the
proceeds of Permitted Shareholder Tax Distributions or Permitted Holdings Tax
Distributions, and forgiving or canceling any such loans or any other loans to
its Affiliates. Intermediate Holdings (or after the merger of Intermediate
Holdings with and into the Borrower in accordance with Section 7.4(g), Holdings
I) shall not pledge, encumber or hypothecate any of the capital stock of the
Borrower. Holdings I will not consent to any modification, supplement or waiver
of any of the provisions of the Intercreditor and Subordination Agreement dated
as of March 20, 2001 among Holdings I, Alta and Oaktree,
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except pursuant to the Holdings Amendment, without the prior written consent of
the Administrative Agent in its sole discretion.
7.16 License Subsidiaries.
(a) Other than ancillary FCC Licenses owned by Empire Burbank (none of
which are Material FCC Licenses), the Credit Parties will cause each FCC License
which is owned or acquired by any Credit Party to be held in a License
Subsidiary at all times (and provided that any FCC License relating to a
Broadcast Station located outside the Designated Market Areas of those Broadcast
Stations owned on the Closing Date, and acquired after the date hereof shall, at
the reasonable request of the Required Lenders, be held in a separate License
Subsidiary).
(b) The Credit Parties shall not allow any License Subsidiary to (i)
own any right, franchise or other asset except for FCC Licenses transferred to
it by a Credit Party and FCC Licenses acquired by it directly or (ii) engage in
any business or make any Investment other than holding such FCC Licenses.
(c) Notwithstanding the foregoing, no License Subsidiary shall be
permitted, under any circumstances, to create, incur, assume or suffer to exist:
(i) any Indebtedness, other than Indebtedness to the Credit
Parties or under the Loan Documents and the Indebtedness as a guarantor
under the Senior Subordinated Note Indenture;
(ii) any Lien, other than Liens created under the Loan Documents;
and
(iii) any Guarantee, other than the Guarantee of the Loans and the
Guarantee of the Senior Subordinated Note Indenture and the Senior
Subordinated Notes.
ARTICLE 8
Events of Default
8.1 Events of Default.
If any of the following events ("Events of Default") shall occur:
(a) the Credit Parties shall fail to pay to the Administrative Agent
or the Lenders (i) any principal of any Loan on the due date thereof, (ii) any
interest on, any Loan or any Reimbursement Obligation in respect of any LC
Disbursement, within three Business Days after the same shall become due and
payable, whether at the due date thereof or at a date fixed for prepayment
thereof or otherwise, or (iii) any other amount payable under this Agreement or
any fee payable under this Agreement or any other agreement, within five
Business Days after the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof, by acceleration of such
due or prepayment date, or otherwise;
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(b) any representation or warranty made or deemed made by or on behalf
of any Credit Party or Empire Burbank in or in connection with this Agreement or
any amendment or modification hereof or of any Loan Document, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or of any
Loan Document, shall prove to have been incorrect when made or deemed made in
any material respect;
(c) (i) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in Sections 6.2, 6.3, 6.7, 6.8, 6.9,
6.10, 6.14 or in Article 7, (ii) any Holding Company shall fail to observe or
perform any covenant, condition or agreement contained in Section 7.15, or (iii)
any Credit Party shall fail to observe or perform any other covenant, condition
or agreement contained in Article 6 and such failure described in this clause
(iii) shall continue unremedied for a period of 30 days after the earlier of (x)
actual knowledge by a Financial Officer of any Credit Party or (y) notice
thereof from the Administrative Agent (given at the request of any Lender) to
the Borrower;
(d) (i) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement (other than those
specified in clauses (a), (b) or (c) of this Article) or any other Loan Document
or (ii) Empire Burbank shall fail to observe or perform any covenant, condition
or agreement contained in Section 7.14, and such failure described in clause (i)
or (ii) shall continue unremedied for a period of 30 days after notice thereof
from the Administrative Agent (given at the request of any Lender) to the
Borrower;
(e) any Credit Party shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness (other than obligations under the Loan Documents) of any Credit
Party, when and as the same shall become due and payable, after giving effect to
any grace period with respect thereto;
(f) any event or condition occurs that results in any Material
Indebtedness of any Credit Party becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the lapse of time
or both) the holder or holders of any such Material Indebtedness or any trustee
or agent on its or their behalf to cause any such Material Indebtedness to
become due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity except for prepayments, repurchases,
redemptions or defeasances of secured Material Indebtedness of any Credit Party
resulting from the voluntary sale or transfer of property securing such
Indebtedness;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of any Credit Party or Holding Company or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Credit Party or Holding Company or for a substantial
part of its assets, and, in any such case, such proceeding or petition shall
continue undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
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(h) any Credit Party or Holding Company shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (g) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for any Credit Party or Holding Company or for a substantial
part of its assets, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing; provided that none of the foregoing events of
this clause (h) shall be deemed to have occurred as a result of the consummation
of the Intercompany Merger;
(i) any Credit Party or Holding Company shall become unable, admit in
writing or fail generally to pay its debts as they become due;
(j) a final judgment or judgments for the payment of money in excess
of $3,500,000 in the aggregate (exclusive of judgment amounts fully covered by
insurance where the insurer has admitted liability in respect of such judgment)
shall be rendered by one or more courts, administrative tribunals or other
bodies having jurisdiction against any Credit Party and the same shall not be
vacated or discharged (or provision shall not be made for such discharge), or a
stay of execution thereof shall not be procured, within 60 days from the date of
entry thereof and the relevant Credit Party shall not, within said period of 60
days, or such longer period during which execution of the same shall have been
stayed, appeal therefrom and cause the execution thereof to be stayed during
such appeal;
(k) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
(l) there shall have been asserted against any Credit Party claims or
liabilities, whether accrued, absolute or contingent, based on or arising from
the generation, storage, transport, handling or disposal of Hazardous Materials
by any Credit Party or any of its Affiliates, or any predecessor in interest of
any Credit Party or any of its Affiliates, or relating to any site or facility
owned, operated or leased by any Credit Party or any of its Subsidiaries or
Affiliates, which claims or liabilities (insofar as they are payable by any
Credit Party but after deducting any portion thereof which is reasonably
expected to be paid by other credit worthy Persons jointly and severally liable
therefor), in the judgment of the Required Lenders are reasonably likely to be
determined adversely to any Credit Party, and the amount thereof is, singly or
in the aggregate, reasonably likely to have a Material Adverse Effect;
(m) any Change of Control shall have occurred;
(n) Lenard Liberman (1) dies or (2) shall no longer be an officer of
any Credit Party and shall not be providing any oversight role or services (in a
capacity such as, but not limited to, chairman or vice chairman of the board of
directors) and a successor of comparable experience and abilities (or a
successor otherwise having reasonable qualifications and abilities in the
broadcast industry) shall not have been engaged within 180 days of such death or
such
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cessation; provided that in the event Lenard Liberman is unable to serve as and
perform the duties as an officer of any Credit Party due to physical or mental
illness, the date of such cessation for purposes of this clause (n) shall
commence only after such inability exists for 170 days (including a period of 75
consecutive days) in any 12 consecutive month period;
(o) any of the following shall occur: (i) the Liens created by the
Collateral Documents shall at any time (other than by reason of the
Administrative Agent relinquishing such Lien) cease in any material respect to
constitute valid and perfected Liens on the Collateral intended to be covered
thereby; (ii) except for expiration in accordance with its respective terms, any
Collateral Document shall for whatever reason be terminated, or shall cease to
be in full force and effect; or (iii) the enforceability of any Collateral
Document shall be contested in writing by any Credit Party;
(p) any Credit Party or Empire Burbank shall assert in writing that
its obligations hereunder or under the Collateral Documents shall be invalid or
unenforceable;
(q) any Holding Company shall fail to observe or perform any covenant,
condition or agreement in respect of any Holding Company Debt that results in
such Holding Company Debt becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Holding Company Debt or any trustee or agent
on its or their behalf to cause any Holding Company Debt to become due, or to
require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity except for prepayments, repurchases, redemptions or
defeasances resulting from the voluntary sale or transfer of property securing
such Holding Company Debt to the extent permitted hereunder;
(r) Jose or Lenard Liberman shall default in the observance or
performance of their respective obligations under the Liberman Subordination
Agreements (if any) and such default shall continue unremedied for a period of
30 days after the earlier of (x) actual knowledge by a Financial Officer of any
Credit Party or (y) notice thereof from the Administrative Agent (given at the
request of any Lender) to the Borrower;
(s) other than as a result of a sale or other Disposition permitted
hereunder or from the conversion of any Broadcast Station to digital television
or in connection with any Relocation, except any such conversion or Relocation
which causes a Material Adverse Effect, any Credit Party shall lose, fail to
keep in force, suffer the termination, suspension or revocation of, or
terminate, forfeit or suffer an adverse amendment to, any Material FCC
License(s) held by any Credit Party which contribute(s) in the aggregate in
excess of 5% of the EBITDA of the Credit Parties for the immediately preceding
fiscal year as stated in the Compliance Certificate required to be delivered for
such fiscal year pursuant to Section 6.1(c) or, if such Compliance Certificate
is not available at the time of such loss, termination, suspension or
revocation, as demonstrated through financial statements and reports acceptable
to the Administrative Agent in its reasonable discretion; or
(t) any Credit Party shall permit its on-the-air broadcast operations
to be interrupted at any time for more than seven days, whether or not
consecutive, during any period of ten consecutive days, if such interruption is
likely to have a Material Adverse Effect unless
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(and only so long as), substantially all damages, liabilities and other effects
of such interruption of service (including any adverse effect on the Credit
Parties' ability to perform its obligations under this Agreement) are fully
covered by business interruption insurance;
then, and in every such event (other than an event described in clause (g) or
(h) of this Section 8.1), and at any time thereafter during the continuance of
such event, the Administrative Agent may, and at the request of the Required
Lenders shall, by notice to the Credit Parties, take either or both of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Credit Parties accrued hereunder, shall become
due and payable immediately, without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties, and
(iii) the Administrative Agent may exercise all of the rights hereunder or under
the Collateral Documents or applicable law, including the rights as secured
party and mortgagee under the Collateral Documents; and in case of any event
described in clause (g) or (h) of this Section 8.1, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Credit Parties accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Credit Parties, and the Administrative Agent shall be
permitted to exercise such rights hereunder or under the Collateral Documents or
applicable law, including the rights as secured party and mortgagee under the
Collateral Documents to the extent permitted by applicable law.
ARTICLE 9
The Administrative Agent
9.1 Appointment and Authorization. Each of the Lenders and the Issuing
Lender hereby irrevocably appoints the Administrative Agent as its agent and
authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms
of this Agreement and the other Loan Documents, together with such actions and
powers as are reasonably incidental thereto.
9.2 Administrative Agent's Rights as Lender. The Lender or other financial
institution serving as the Administrative Agent or the Issuing Lender hereunder
shall have the same rights and powers in its capacity as a Lender hereunder as
any other Lender and may exercise the same as though it were not the
Administrative Agent or the Issuing Lender, and such institution and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with any Credit Party or any Subsidiary or other Affiliate of
any thereof as if it were not the Administrative Agent or the Issuing Lender
hereunder.
9.3 Duties As Expressly Stated. Neither the Administrative Agent nor the
Issuing Lender shall have any duties or obligations except those expressly set
forth in this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, (a) neither the
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Administrative Agent nor the Issuing Lender shall be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) neither the Administrative Agent nor the Issuing Lender shall
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated by this
Agreement and the other Loan Documents that the Administrative Agent or Issuing
Lender is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as is required hereunder with respect to
such action), and (c) except as expressly set forth herein and in the other Loan
Documents, neither the Administrative Agent nor the Issuing Lender shall have
any duty to disclose, or shall be liable for the failure to disclose, any
information relating to any Credit Party or any of their respective Subsidiaries
that is communicated to or obtained by the financial institution serving as the
Administrative Agent or the Issuing Lender or any of its Affiliates or Approved
Funds in any capacity. Neither the Administrative Agent nor the Issuing Lender
shall be liable for any action taken or not taken by it with the consent or at
the request of the Required Lenders (or such other number or percentage of the
Lenders as is required hereunder with respect to such action) or all of the
Lenders if expressly required, or in the absence of its own gross negligence or
willful misconduct. Neither the Administrative Agent nor the Issuing Lender
shall be deemed to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent or the Issuing Lender by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in, or in connection with, this Agreement or the other Loan
Documents, (ii) the contents of any certificate, report or other document
delivered hereunder or under any of the other Loan Documents or in connection
herewith of therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or in any
other Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article 5 or elsewhere herein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent or the Issuing Lender.
Neither the Administrative Agent nor the Issuing Lender shall, except to the
extent the Administrative Agent expressly instructed by the Required Lenders
with respect to collateral security under the Collateral Documents, be required
to initiate or conduct any litigation or collection proceedings hereunder or
under any other Loan Document; provided, however, that the Administrative Agent
shall not be required to take any action which exposes the Administrative Agent
to personal liability or which is contrary to the Loan Documents or applicable
law.
9.4 Reliance By Administrative Agent. The Administrative Agent and the
Issuing Lender shall be entitled to rely upon, and shall not incur any liability
for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Administrative Agent and the
Issuing Lender also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent and the
Issuing Lender may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts. The Administrative Agent and
the Issuing Lender shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if
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so specified by this Agreement, all Lenders) as it deems appropriate or it shall
first be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action (it being understood that this provision
shall not release the Administrative Agent from performing any action with
respect to the Borrower expressly required to be performed by it pursuant to the
terms hereof) under this Agreement. The Administrative Agent and the Issuing
Lender shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Loan Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.
9.5 Action Through Sub-Agents. The Administrative Agent and the Issuing
Lender may perform any and all of its duties, and exercise its rights and
powers, by or through any one or more sub-agents appointed by the Administrative
Agent or the Issuing Lender. The Administrative Agent and the Issuing Lender and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through its Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and the Issuing Lender and any such
sub-agent, and shall apply to its activities in connection with the syndication
of the credit facilities provided for herein as well as activities of the
Administrative Agent or the Issuing Lender.
9.6 Resignation of Administrative Agent and Appointment of Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
Administrative Agent, as provided in this paragraph, the Administrative Agent
may resign at any time upon 30 days' notice to the Lenders, the Issuing Lender
and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, with the prior written consent of the Borrower (which shall not be
unreasonably withheld or delayed), to appoint a successor Administrative Agent.
If no successor shall have been so appointed and shall have accepted such
appointment within 30 days after such retiring Administrative Agent gives notice
of its resignation, then such retiring Administrative Agent may, on behalf of
the Lenders and the Issuing Lender, appoint a successor Administrative Agent,
which shall be a bank with an office in Boston, Massachusetts, Los Angeles,
California or New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder, by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. The fees payable by the Borrower
to a successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After an Administrative Agent's resignation hereunder, the provisions of this
Article and Section 10.3 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while it was acting as Administrative Agent.
9.7 Lenders' Independent Decisions. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Lender or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also
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acknowledges that it will, independently and without reliance upon the
Administrative Agent, the Issuing Lender or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement and the other Loan Documents, any related agreement or any
document furnished hereunder or thereunder. Except as explicitly provided
herein, neither the Administrative Agent nor the Issuing Lender has any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect to such operations, business,
property, condition or creditworthiness, whether such information comes into its
possession on or before the first Event of Default or at any time thereafter.
Neither the Administrative Agent nor the Issuing Lender shall be deemed a
trustee or other fiduciary on behalf of any party.
9.8 Indemnification. Each Lender agrees to indemnify and hold harmless
each of the Agents, the Sole Lead Arranger and the Issuing Lender (to the extent
not reimbursed under Section 10.3, but without limiting the obligations of the
Borrower under Section 10.3), ratably in accordance with the aggregate principal
amount of the respective Commitments of and/or Loans and LC Exposure held by the
Lenders (or, if all of the Commitments shall have been terminated or expired,
ratably in accordance with the aggregate outstanding amount of the Loans and LC
Exposure held by the Lenders), for any and all liabilities (including pursuant
to any Environmental Law), obligations, losses, damages, penalties, actions,
judgments, deficiencies, suits, costs, expenses (including reasonable attorney's
fees) or disbursements of any kind and nature whatsoever that may be imposed on,
incurred by or asserted against any of the Agents, the Sole Lead Arranger or the
Issuing Lender (including by any Lender) arising out of or by reason of any
investigation in or in any way relating to or arising out of any Loan Document
or any other documents contemplated by or referred to therein for any action
taken or omitted to be taken by any Agent, the Sole Lead Arranger or the Issuing
Lender under or in respect of any of the Loan Documents or other such documents
or the transactions contemplated thereby (including the costs and expenses that
the Borrower is obligated to pay under Section 10.3, but excluding, unless a
Default has occurred and is continuing, normal administrative costs and expenses
incident to the performance of its agency duties hereunder) or the enforcement
of any of the terms hereof or thereof or of any such other documents; provided,
however, that no Lender shall be liable for any of the foregoing to the extent
they are determined by a court of competent jurisdiction in a final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the party to be indemnified. The agreements set forth in this
Section 9.8 shall survive the payment of all Loans and other obligations
hereunder and shall be in addition to and not in lieu of any other
indemnification agreements contained in any other Loan Document.
9.9 Consents Under Other Loan Documents. Except as otherwise provided in
this Agreement and the other Loan Documents, the Administrative Agent may, with
the prior consent of the Required Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the other Loan Documents.
9.10 The Agents. None of the Co-Syndication Agents nor the Co-Documentation
Agents shall have any duties or obligations under this Agreement or the other
Loan Documents, express or implied. None of the Co-Syndication Agents nor the
Co-Documentation Agents shall incur any personal liability by reason of being
named the Co-Syndication Agents or Co-Documentation Agents hereunder.
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ARTICLE 10
Miscellaneous
10.1 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telephonic facsimile (fax), as follows:
(a) if to any Credit Party, to LBI Media, Inc., 1813 Victory Place,
Burbank, CA 91504, Attention: Executive Vice President (fax no. (818) 558-4244),
with copies to: O'Melveny & Myers LLP, 400 South Hope Street, Los Angeles, CA
90071, Attention: Joseph K. Kim (fax no. (213) 430-6407).
(b) if to the Administrative Agent, to Fleet National Bank, 1185
Avenue of the Americas, 16/th/ Floor, Media & Entertainment Group, Mail Stop
NYEH 30916K, New York, New York 10036-2600, Attention: Garret Komjathy (fax no.
(212) 819-6202), with a copy to Palmer & Dodge LLP, 111 Huntington Avenue,
Boston, Massachusetts 02199, Attention: George Ticknor (fax no. (617) 227-4420);
(c) if to any Lender (including to Fleet in its capacity as the
Issuing Lender), to it at its address (or fax number) set forth in its
Administrative Questionnaire.
Any party hereto may change its address or fax number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
10.2 Waivers; Amendments.
(a) No failure or delay by the Administrative Agent, the Issuing
Lender or any Lender in exercising any right or power hereunder shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Lender and the Lenders hereunder are cumulative and are not exclusive of
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Credit Party or
Subsidiary therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 10.2, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan or
issuance of a Letter of Credit shall not be construed as a waiver of any
Default, regardless of whether the Administrative Agent, any Lender or the
Issuing Lender may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except to the
extent this Agreement or any other Loan Document provides for revisions to the
schedules hereto or thereto with the
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approval of the Administrative Agent or pursuant to an agreement or agreements
in writing entered into by the Borrower and the Required Lenders or by the
Borrower and the Administrative Agent with the written consent of the Required
Lenders and the Administrative Agent; provided that no such agreement shall:
(i) increase the Commitment of any Lender without the written
consent of such Lender and the Administrative Agent, except that the
consent of the Administrative Agent shall not be required with respect to
any Revolving Credit Commitment Increase;
(ii) reduce the principal amount of any Loan or LC Disbursement
or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby;
(iii) postpone the scheduled date of payment of the principal
amount of any Loan or LC Disbursement other than mandatory prepayments of
the Loans required under Section 2.10(b), or any interest thereon, or any
fees payable hereunder, or reduce the amount of, waive or excuse any such
payment, change the maturity date of any Loan, or postpone the scheduled
date of expiration of any Commitment, or postpone the ultimate expiration
date of any Letter of Credit beyond the Revolving Credit Maturity Date,
without the written consent of each Lender affected thereby;
(iv) change Section 2.10(c) in a manner that would alter the
application of prepayments thereunder, or change Section 2.17(b) or (c) in
a manner that would alter the pro rata sharing of payments required
thereby, without in each case the written consent of each Lender;
(v) change any of the provisions of this Section 10.2 or the
definition of "Required Lenders" or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or under any other Loan Document or make any determination
or grant any consent hereunder or thereunder, without the written consent
of each Lender;
(vi) release any of the Guarantors from its obligations in
respect of its Guarantee under Article 3 or release all or substantially
all of the Collateral (or terminate any Lien with respect thereto), except
as expressly permitted in the Loan Documents, without the written consent
of each Lender; or
(vii) waive any of the conditions precedent specified in Section
5.1 without the consent of each Lender and the Administrative Agent;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of any Agent or the Issuing Lender hereunder without the
prior written consent of such Agent or the Issuing Lender, as the case may be.
(c) None of the Collateral Documents nor any provision thereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered
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into by the Credit Parties party thereto, and by the Administrative Agent with
the written consent of the Required Lenders.
10.3 Expenses; Indemnity; Damage Waiver.
(a) The Credit Parties jointly and severally agree to pay, or
reimburse the Administrative Agent, the Sole Lead Arranger or the Lenders, as
applicable, for paying, (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent, the Sole Lead Arranger and their Affiliates, including
the reasonable fees, charges and disbursements of Special Counsel, any FCC
counsel or local counsel, in connection with the syndication of the credit
facilities provided for herein, the preparation of this Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Lender in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment
thereunder, (iii) all out-of-pocket expenses incurred by the Administrative
Agent, the Issuing Lender, the Sole Lead Arranger or any Lender, including the
reasonable fees, charges and disbursements of any counsel for the Administrative
Agent, the Issuing Lender, the Sole Lead Arranger or any Lender, in connection
with the enforcement or protection of its rights in connection with this
Agreement and the other Loan Documents, including its rights under this Section
10.3, or in connection with the Loans made or Letters of Credit issued
hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof, and (iv) all Other Taxes levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents or any other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Collateral Document or any other document referred to
therein.
(b) The Credit Parties jointly and severally agree to indemnify the
Agents, the Sole Lead Arranger, the Issuing Lender and each Lender, and each
Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee and settlement
costs, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, the other Loan Documents or any agreement or instrument contemplated
hereby, the performance or failure to perform by the parties hereto and thereto
of their respective obligations hereunder or thereunder or the consummation of
the Transactions or any other transactions contemplated hereby or thereby, (ii)
any Loan or Letter of Credit or the use of the proceeds therefrom (including any
refusal by the Issuing Lender to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or release of Hazardous Materials on or from any property owned or
operated by any Credit Party or any of their Subsidiaries, or any Environmental
Liability related in any way to any Credit Party or any of their Subsidiaries,
or (iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be
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available to the extent that such losses, claims, damages, liabilities or
related expenses (are determined by a court of competent jurisdiction by final
and nonappealable judgment to have) resulted from the gross negligence or
willful misconduct of such Indemnitee.
(c) To the extent that the Credit Parties fail to pay any amount
required to be paid by them to the Administrative Agent under paragraph (a) or
(b) of this Section 10.3, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such. To the
extent that the Credit Parties fail to pay any amount required to be paid by
them to the Sole Lead Arranger under paragraph (a) or (b) of this Section 10.3,
each Lender severally agrees to pay to the Sole Lead Arranger such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Sole Lead Arranger in its capacity as such. To the extent that the
Credit Parties fail to pay any amount required to be paid by them to the Issuing
Lender under paragraph (a) or (b) of this Section 10.3, each Revolving Credit
Lender severally agrees to pay to the Issuing Lender such Lender's Applicable
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Issuing
Lender in its capacity as such.
(d) To the extent permitted by applicable law, none of the Credit
Parties shall assert, and each Credit Party hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement, the other Loan Documents or
any agreement or instrument contemplated hereby or thereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section 10.3 shall be payable promptly
after written demand therefor.
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10.4 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that no Credit Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and the Administrative Agent (and any attempted assignment or
transfer by any Credit Party without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Related Parties of the Administrative Agent, the Issuing Lender and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of
its rights and obligations under this Agreement (including all or a portion of
its Commitment and the Loans at the time owing to it) and may assign Revolving
Credit Commitment and Revolving Credit Loans; provided that:
(i) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund of a Lender, the Borrower and the
Administrative Agent (and, in the case of an assignment of all or a portion
of a Revolving Credit Commitment or any Lender's obligations in respect of
its LC Exposure, the Issuing Lender) each must give its prior written
consent to such assignment (which consent shall not be unreasonably
withheld, delayed or conditioned),
(ii) except in the case of an assignment to a Lender or an
Affiliate of a Lender or Approved Fund of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Loans or Commitment, the
amount of the Loans or Commitment of the assigning Lender subject to each
such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent)
shall not be less than the lesser of $5,000,000 or the entire Commitment of
such assigning Lender, unless the Borrower and the Administrative Agent
otherwise consent;
(iii) the parties to each assignment (other than an assignment to
a Lender or its Affiliate or Approved Fund) shall execute and deliver to
the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,000, and
(iv) the assignee shall be an Eligible Assignee and shall deliver
to the Administrative Agent an Administrative Questionnaire;
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required (i) if an Event of Default has occurred and is
continuing, (ii) in the event of an assignment to an existing Lender, or (iii)
in the event of an assignment by General Electric Capital Corporation following
a determination by such Lender or its affiliate, the National Broadcasting
Company ("NBC"), that continued ownership of rights or obligations hereunder
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would (A) violate FCC rules pertinent to attributable ownership or (B) cause NBC
to forgo investments or acquisition opportunities in any of the markets in which
the Borrower then operates, then, in each case, such Lender shall consult with
the Borrower and the Administrative Agent regarding proposed assignees and use
reasonable efforts to cause such assignment to an assignee reasonably acceptable
to the Borrower and the Administrative Agent.
Notwithstanding the foregoing, the restrictions of this Section 10.4(b)(ii)
shall not apply until the date on which the primary syndication of the
Commitments has been completed.
(c) Upon acceptance and recording pursuant to paragraph (e) of this
Section 10.4, from and after the effective date specified in each Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the extent
of the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.16 and 10.3 with respect to matters described therein occurring or
accruing prior to the effective date of any such Assignment and Acceptance).
Notwithstanding anything therein to the contrary, no Approved Fund shall be
entitled to receive any greater amount pursuant to Sections 2.14, 2.15 and 2.16
than the transferor Lender would have been entitled to receive in respect of the
assignment effected by such transferor Lender had no assignment occurred. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with paragraph (b) of this Section 10.4 shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (f) of this Section.
(d) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in Boston, Massachusetts a
copy of each Assignment and Acceptance and Lender Joinder Agreement delivered to
it and a register for the recordation of the names and addresses of the Lenders,
and the Commitment of, and principal amount of the Loans and LC Disbursements
owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive (absent manifest
error), and the Borrower, the Administrative Agent, the Issuing Lender and the
Lenders may treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary (absent manifest error). The Register
shall be available for inspection by the Borrower, the Issuing Lender and any
Lender or the Administrative Agent, at any reasonable time and from time to time
upon reasonable prior notice.
(e) (i) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 10.4 and any written consent to such assignment required by
paragraph (b) of this Section 10.4, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in
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the Register as provided in this paragraph, and (ii) upon its receipt of a duly
completed Lender Joinder Agreement executed by a New Lender and Administrative
Agent in accordance with Section 2.1(b), and the New Lender's completed
Administrative Questionnaire, the Administrative Agent shall accept such Lender
Joinder Agreement and record the information contained therein in the Register.
(f) Any Lender may, without the consent of or notice to the Borrower,
the Administrative Agent or the Issuing Lender, sell participations to one or
more banks or other entities (a "Participant") in all or a portion of such
Lender's rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Issuing
Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 10.2(b), or Section 10.2(c), that affects such Participant. Subject to
paragraph (g) of this Section 10.4, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.14. 2.15 and 2.16 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section 10.4.
(g) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.16 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.16 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.16(e) as
though it were a Lender.
(h) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any such pledge or assignment to a Federal Reserve Bank;
provided that no such pledge or assignment of a security interest shall release
a Lender from any of its obligations hereunder or substitute any such assignee
for such Lender as a party hereto.
(i) Anything in this Section 10.4 to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to any Credit Party or any of its Affiliates or Subsidiaries without the prior
consent of each Lender and the Administrative Agent.
(j) A Lender may furnish any information concerning any Credit Party,
Holding Company or Subsidiary in the possession of such Lender from time to time
to assignees and participants (including prospective assignees and participants)
subject, however, to and so long as the recipient agrees in writing to be bound
by, the provisions of Section 10.13. In
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addition, the Administrative Agent may furnish any information concerning any
Credit Party or any of its Subsidiaries or Affiliates in the Administrative
Agent's possession to any Affiliate of the Administrative Agent, subject,
however, to the provisions of Section 10.13. The Credit Parties shall assist any
Lender in effectuating any assignment or participation pursuant to this Section
10.4 (including during syndication) in whatever manner such Lender reasonably
deems necessary, including participation in meetings with prospective
transferees.
(k) Each Lender listed on the signature pages hereof hereby agrees (i)
that it is an Eligible Assignee described in the definition thereof. Each Lender
that becomes a party hereto pursuant to an Assignment and Acceptance shall be
deemed to agree that the agreements of such Lender contained in Section 3 of
such Assignment and Acceptance are incorporated herein by this reference.
10.5 Survival. All covenants, agreements, representations and warranties
made by the Credit Parties and Subsidiaries herein and in the other Loan
Documents, and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement and the other Loan Documents, shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of any Loans and issuance of any Letters of Credit,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that the Administrative Agent, the Issuing Lender or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect so long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement or the other Loan Documents is outstanding and unpaid or any Letter of
Credit is outstanding and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.14, 2.15, 2.16 and 10.3 and Article 9
shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the
expiration or termination of the Letters of Credit and the Commitments or the
termination of this Agreement or any other Loan Document or any provision hereof
or thereof.
10.6 Counterparts; Integration; References to Agreement; Effectiveness.
This Agreement may be executed in counterparts (and by different parties hereto
on different counterparts), each of which shall constitute an original, but all
of which when taken together shall constitute a single contract. This Agreement
and any separate letter agreements with respect to fees payable to the
Administrative Agent or its counsel and to certain other lenders constitute the
entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Whenever there is a reference in any
Collateral Document or UCC Financing Statement to the "Credit Agreement" to
which the Administrative Agent, the Lenders and the Credit Parties are parties,
such reference shall be deemed to be made to this Agreement among the parties
hereto. Except as provided in Section 5.1, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an
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executed counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
10.7 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
10.8 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section 10.8 are in addition to any other rights and remedies
(including other rights of setoff) that such Lender may have.
10.9 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement and all issues arising with respect hereto,
including the validity or enforceability of any agreement contained herein and
the issue of usury with respect to the transactions contemplated hereby, shall
be construed in accordance with and governed by the law, other than the conflict
of law rules, of The Commonwealth of Massachusetts.
(b) Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of the courts of
The Commonwealth of Massachusetts and of the United States District Court for
the District of Massachusetts, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
Massachusetts court (or, to the extent permitted by law, in such Federal court).
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Issuing
Lender or any Lender may otherwise have to bring any action or proceeding
relating to this Agreement against any Credit Party or Subsidiary or its
properties in the courts of any jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents in any court referred to in paragraph (b) of this Section 10.9. Each
of the parties hereto hereby irrevocably waives, to the fullest extent
129
permitted by law, the defense of an inconvenient forum to the maintenance of
such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 10.10.
10.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and
shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
10.12 Release of Collateral and Guarantees. The Administrative Agent and
the Lenders agree that if all of the capital stock of or other equity interests
in, or any assets of, any Subsidiary that is owned by the Credit Parties is sold
to any Person as permitted by the terms of this Agreement and the Collateral
Documents, or if any Subsidiary is merged or consolidated with or into any other
Person as permitted by the terms of this Agreement and such Subsidiary is not
the continuing or surviving corporation, the Administrative Agent shall, upon
request of the Borrower (and upon the receipt by the Administrative Agent of
such evidence as the Administrative Agent or any Lender may reasonably request
to establish that such sale, designation, merger or consolidation is permitted
by the terms of this Agreement), terminate the Guarantee of such Subsidiary
under Article 3 and authorize the Administrative Agent to release the Lien
created by the Collateral Documents on any capital stock of or other equity
interests in such Subsidiary and on any assets of such Subsidiary.
10.13 Confidentiality. Each Lender agrees to keep confidential information
obtained by it pursuant hereto and the other Loan Documents confidential in
accordance with such Lender's customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender's employees, representatives, directors, attorneys, auditors, agents,
professional advisors, trustees or Affiliates who are advised of the
confidential nature of such information or to any direct or indirect contractual
counter party in swap agreements or such contractual counter party's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counter party agrees to be bound by the provisions
of this Section 10.13), (b) to the extent such information presently is or
hereafter becomes available
130
to such Lender on a non-confidential basis from any source of such information
that is in the public domain at the time of disclosure (so long as such
information does not become publicly available as a result of a breach of this
Section 10.13), (c) to the extent disclosure is required by law (including
applicable securities law), regulation, subpoena or judicial order or process
(provided that notice of such requirement or order shall be promptly furnished
to the Borrower unless such notice is legally prohibited) or requested or
required by bank, securities, insurance or investment company regulators or
auditors or any administrative body or commission (including the Securities
Valuation Office of the National Association of Insurance Commissioners) to
whose jurisdiction such Lender may be subject, (d) to any rating agency to the
extent required in connection with any rating to be assigned to such Lender, (e)
to assignees or participants or prospective assignees or participants who agree
to be bound by the provisions of this Section 10.13, (f) to the extent required
in connection with any litigation between any Credit Party and any Lender with
respect to the Loans or this Agreement and the other Loan Documents or (g) with
the Borrower's prior written consent.
10.14 Continued Effectiveness; No Novation. Notwithstanding anything
contained herein, the terms of this Agreement are not intended to and do not
serve to effect a novation of the obligations, liabilities or indebtedness of
the Credit Parties under the Existing Credit Agreement. Instead, it is the
express intention of the parties hereto to reaffirm, amend and restate the
obligations, liabilities and indebtedness created under or otherwise evidenced
by the Existing Credit Agreement that is evidenced by the notes provided for
therein and secured by the collateral contemplated thereby and hereby. The
Credit Parties acknowledge and confirm that the liens and security interests
granted pursuant to the Loan Documents secure the obligations, liabilities and
indebtedness of the Credit Parties to the Lenders under the Existing Credit
Agreement, as amended and restated hereby, and that the term "Secured
Obligations" used in certain of the Loan Documents (or any other term used
herein to describe or refer to the obligations, liabilities and indebtedness of
the Credit Parties) describes and refers to the Credit Parties' obligations,
liabilities and indebtedness hereunder and under the Existing Credit Agreement,
as amended and restated hereby, as the same may be further amended, modified,
supplemented or restated from time to time. The Loan Documents and all
agreements, documents and instruments executed and delivered in connection with
any of the foregoing shall each be deemed to be amended to the extent necessary
to give effect to the provisions of this Agreement. Cross-references in the Loan
Documents to particular section or subsection numbers in the Existing Credit
Agreement shall be deemed to be cross-references to the corresponding sections
or subsections, as applicable, of this Agreement.
131
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
BORROWER
--------
LBI MEDIA, INC., (formerly known as LBI
Holdings II, Inc.)
a California corporation
By: /s/ Lenard Liberman
------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
GUARANTORS
----------
LIBERMAN TELEVISION OF HOUSTON, INC., a
California corporation
By: /s/ Lenard Liberman
-------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
KZJL LICENSE CORP.,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
LIBERMAN TELEVISION, INC.,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
KRCA TELEVISION, INC.,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
KRCA LICENSE CORP.,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
LIBERMAN BROADCASTING, INC.,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
LBI RADIO LICENSE CORP.,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
LIBERMAN BROADCASTING OF HOUSTON, INC.,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
LIBERMAN BROADCASTING OF HOUSTON LICENSE
CORP., a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
EMPIRE BURBANK STUDIOS, INC.,
a California Corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
HOLDING COMPANIES
-----------------
Solely with respect to provisions of
------------------------------------
Section 7.15:
------------
LBI HOLDINGS I, INC. ,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
LBI INTERMEDIATE HOLDINGS, INC. ,
a California corporation
By: /s/ Lenard Liberman
--------------------------------------
Name: Lenard Liberman
Title: Executive Vice President
ADMINISTRATIVE AGENT
FLEET NATIONAL BANK,
as Administrative Agent and Lender
By: /s/ Stephen J. Healey
--------------------------------------
Name: Stephen J. Healey
Title: Managing Director
SOLE LEAD ARRANGER
------------------
FLEET SECURITIES, INC.,
as Sole Lead Arranger
By: /s/ Jonathan Mullen
--------------------------------------
Name: Jonathan Mullen
Title: Vice President
CO-SYNDICATION AGENTS
GENERAL ELECTRIC CAPITAL CORPORATION,
as Co-Syndication Agent and Lender
By: /s/ K.M. Gacevich
-----------------------------------
Name: Kenneth M. Gacevich
Title: Duly Authorized Signatory
U.S. BANK, N.A.,
as Co-Syndication Agent and Lender
By: /s/ Jaycee Earll
--------------------------------
Name: Jaycee Earll
Title: Assistant Vice President
CO-DOCUMENTATION AGENTS
-----------------------
CIT LENDING SERVICES CORPORATION,
as Co-Documentation Agent and Lender
By: /s/ Rosemary Abee
---------------------------------
Name: Rosemary Abee
Title: Vice President
SUNTRUST BANK,
as Co-Documentation Agent and Lender
By: /s/ Thomas C. King, Jr.
---------------------------------
Name: Thomas C. King, Jr.
Title: Vice President
LENDERS
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH
By: /s/ Paul J. Corona /s/ Bill O'Daly
----------------------------------------------
Name: Paul J. Corona Bill O'Daly
Title: Director Director
CIBC INC.
By: /s/ Keith Labbate
-----------------------
Name: Keith Labbate
Title: Executive Director
CIBC World Markets Corp. As Agent
UBS AG, STAMFORD BRANCH
By: /s/ Wilfred V. Saint
-------------------------------
Name: Wilfred V. Saint
Title: Associate Director
Banking Products
Services, US
By: /s/ Luke Goldsworthy
-------------------------------
Name: Luke Goldsworthy
Title: Associate Director
Banking Products
Services, US
CITY NATIONAL BANK
By: /s/ Aaron C. Cohen
------------------------------
Name: Aaron C. Cohen
Title: Vice President