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EXHIBIT 4.07
SALEM COMMUNICATIONS CORPORATION
___________________________
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
BY AND AMONG
SALEM COMMUNICATIONS CORPORATION,
THE BANK OF NEW YORK,
AS ADMINISTRATIVE AGENT,
BANK OF AMERICA NT&SA,
AS DOCUMENTATION AGENT,
AND
THE LENDERS PARTY HERETO
___________________________
WITH
BNY CAPITAL MARKETS, INC.,
AS ARRANGER
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8.14 Transactions with Affiliates............................ 53
8.15 Sale and Leaseback...................................... 54
8.16 Stock Issuance.......................................... 54
8.17 Subordinated Indenture.................................. 54
8.18 Federal Reserve Regulations............................. 54
8.19 Change in Name; Nature of Business...................... 54
8.20 Lease Obligations....................................... 54
9. DEFAULT....................................................... 55
9.1 Events of Default....................................... 55
10. THE ADMINISTRATIVE AGENT..................................... 58
10.1 Appointment............................................. 58
10.2 Delegation of Duties.................................... 58
10.3 Exculpatory Provisions.................................. 58
10.4 Reliance by Administrative Agent........................ 59
10.5 Notice of Default....................................... 59
10.6 Non-Reliance............................................ 59
10.7 Indemnification......................................... 60
10.8 Administrative Agent in its Individual
Capacity................................................ 60
10.9 Successor............................................... 60
10.10 Updating Exhibits and Schedules........................ 61
10.11 The Arranger........................................... 61
10.12 The Documentation Agent................................ 61
11. MISCELLANEOUS................................................ 61
11.1 Amendments and Waivers.................................. 61
11.2 Notices................................................. 62
11.3 No Waiver; Cumulative Remedies.......................... 64
11.4 Survival of Representations and Warranties.............. 64
11.5 Payment of Expenses and Taxes........................... 64
11.6 Lending Offices......................................... 65
11.7 Successors and Assigns.................................. 65
11.8 Counterparts............................................ 66
11.9 Adjustments; Set-off.................................... 67
11.10 No Third Party Beneficiary............................. 68
11.11 Indemnity.............................................. 68
11.12 Governing Law.......................................... 69
11.13 Headings............................................... 69
11.14 Severability........................................... 69
11.15 Integration............................................ 69
11.16 Limitation of Liability................................ 69
11.17 Consent of Jurisdiction................................ 70
11.18 Service of Process..................................... 70
11.19 No Limitation of Service or Suit....................... 70
11.20 WAIVER OF TRIAL BY JURY................................ 70
11.21 Confidentiality........................................ 71
iii
EXHIBITS
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Exhibit A List of Commitments
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Borrowing Request
Exhibit D Form of Letter of Credit Request
Exhibit E Form of Opinion of Secret Counsel
Exhibit F Form of Opinion of Counsel to the Borrower
and Subsidiaries
Exhibit G Form of Opinion of FCC Counsel to the
Borrower and Subsidiaries
Exhibit H Form of Compliance Certificate
Exhibit I Form of Borrower Security Agreement
Exhibit J Form of Subsidiary Guaranty
Exhibit K Form of Assignment and Assumption Agreement
SCHEDULES
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Schedule 1.1(L) List of Lending Offices
Schedule 4.1 List of Subsidiaries
Schedule 4.6 List of Litigation
Schedule 4.7 List of Conflicting Agreements
Schedule 4.8 List of Taxes
Schedule 4.11(b) List of Property
Schedule 4.11(c) FCC Matters
Schedule 4.14 List of Plans
Schedule 4.18 List of Environmental Plans
Schedule 8.1 List of Borrowing
Schedule 8.2 List of Liens
Schedule 8.5(c) List of Investments
-iv-
CREDIT AGREEMENT, dated as of September 25, 1997, by and among SALEM
COMMUNICATIONS CORPORATION, a California corporation (the "Borrower"), THE BANK
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OF NEW YORK, as administrative agent for the Lenders hereunder (in such
capacity, the "Administrative Agent"), BANK OF AMERICA NT&SA, as documentation
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agent (in such capacity, the "Documentation Agent"), and each Lender party
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hereto or which becomes a "Lender" pursuant to the provisions of section 11.7
(each a "Lender" and, collectively, the "Lenders").
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1. DEFINITIONS
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1.1 Defined Terms.
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As used in this Agreement, terms defined in the preamble have the
meanings therein indicated, and the following terms have the following meanings:
"ABR Loans": the Loans (or any portions thereof) at such time as they (or
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such portions) are made or are being maintained at a rate of interest based upon
the Alternate Base Rate.
"Accountants": Ernst & Young LLP, or such other firm of certified public
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accountants of recognized national standing selected by the Borrower and
reasonably satisfactory to the Administrative Agent.
"Adjusted Operating Cash Flow": Operating Cash Flow less Excluded Cash
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Flow.
"Affected Loan": as defined in section 2.15.
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"Affected Principal Amount": (i) in the event that the Borrower shall fail
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for any reason to borrow or convert a Loan after it shall have notified the
Administrative Agent of its intent to do so in which it shall have requested a
Eurodollar Loan pursuant to section 2.3 or 2.8, as the case may be, an amount
equal to the principal amount of such Loan; (ii) in the event that a Eurodollar
Loan shall terminate for any reason prior to the last day of the Interest Period
applicable thereto, an amount equal to the principal amount of such Loan; and
(iii) in the event that the Borrower shall prepay or repay all or any part of
the principal amount of a Eurodollar Loan prior to the last day of the Interest
Period applicable thereto, an amount equal to the principal amount of such Loan
so prepaid or repaid.
"Affiliate": as to any Person, any other Person which, directly or
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indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, control of a Person shall mean
the power, direct or indirect, (i) to vote 5% or more of the securities having
ordinary voting power for the election of directors of such Person or (ii) to
direct or cause direction of the management and policies of such Person whether
by contract or otherwise.
"Agreement": this Credit Agreement, as the same may be amended, supplemented
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or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per annum equal to
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the higher of (i) the BNY Rate in effect on such date or (ii) 1/2 of 1% plus the
Federal Funds Rate in effect on such date.
"Applicable Margin": (a) subject to paragraph (b) of this definition, at all
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times during the applicable periods set forth below, (i) with respect to the
unpaid principal amount of the ABR Loans, the percentage set forth below under
the heading "Alternate Base Rate Margin" next to the applicable period and (ii)
with respect to the unpaid principal amount of the Eurodollar Loans, the
percentage set forth below under the heading "Eurodollar Rate Margin" next to
the applicable period:
Alternate Base Eurodollar
Period Rate Margin Rate Margin
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when the Total
Leverage Ratio
is equal to or
greater than
6.00:1.00 1.750% 3.000%
when the Total
Leverage Ratio
is equal to or greater
than 5.50:1.00 but
less than 6.00:1.00 1.250% 2.500%
when the Total
Leverage Ratio
is equal to or greater
than 5.00:1.00 but
less than 5.50:1.00 1.000% 2.250%
when the Total
Leverage Ratio
is equal to or greater
than 4.50:1.00 but less
than 5.00:1.00 0.500% 1.750%
when the Total
Leverage Ratio
is equal to or greater
than 4.00:1.00 but
less than 4.50:1.00 0.250% 1.500%
when the Total
Leverage Ratio
is equal to or greater
than 3.50:1.00 but
less than 4.00:1.00 0.000% 1.250%
-2-
when the Total
Leverage Ratio
is less than 3.50:1.00 0.000% 1.000%
(b) Changes in the Applicable Margin resulting from a change in the
Total Leverage Ratio, as evidenced by a Compliance Certificate delivered to the
Administrative Agent pursuant to section 7.1(d) or a Borrowing Request or Letter
of Credit Request delivered to the Administrative Agent pursuant to section
5.2(c) evidencing such a change, shall become effective upon (i) in the case of
the delivery of a Compliance Certificate, the first Business Day following the
delivery of (x) such Compliance Certificate and (y) the applicable financial
statements required to be delivered pursuant to section 7.1(a) or (c), as the
case may be, and (ii) in the case of the delivery of a Borrowing Request or
Letter of Credit Request, the Borrowing Date applicable thereto. If the
Borrower shall fail to deliver a Compliance Certificate within 60 days after the
end of any of the first three fiscal quarters, or within 120 days after the end
of the last fiscal quarter, of each fiscal year (each a "certificate delivery
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date"), for purposes of calculating the Applicable Margin, the Total Leverage
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Ratio from and including such certificate delivery date to the date of delivery
by the Borrower to the Administrative Agent of such Compliance Certificate shall
be conclusively presumed to be greater than 6.00:1.00.
"Arranger": BNY Capital Markets, Inc.
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"Assignment": as defined in section 11.7(b).
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"Assignment and Assumption Agreement": an agreement substantially in the
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form of Exhibit K.
"Assignment Fee": as defined in section 11.7(b).
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"Authorized Signatory": the chief executive officer, the chief financial
--------------------
officer, the chief operating officer, the president, a general partner or any
other duly authorized officer (acceptable to the Administrative Agent) of a Loan
Party.
"BNY": The Bank of New York.
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"BNY Rate": a rate of interest per annum equal to the rate of interest
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publicly announced in New York City by BNY from time to time as its prime
commercial lending rate, such rate to be adjusted automatically (without notice)
on the effective date of any change in such publicly announced rate.
"Borrower Security Agreement": the Borrower Security Agreement, dated as
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of the date hereof, between the Borrower and the Administrative Agent,
substantially in the form attached hereto as Exhibit I, as the same may be
amended, supplemented or otherwise modified from time to time.
"Borrowing Date": (i) any Business Day specified in a Borrowing Request as
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a date on which the Borrower requests the Lenders to make Loans or (ii) any
Business Day specified in a Letter of Credit Request as a date on which the
Borrower requests the Issuing Bank to issue a Letter of Credit.
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"Borrowing Request": a Borrowing Request substantially in the form of
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Exhibit C.
"Broadcasting Station": all related licenses, franchises and permits
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issued under federal, state or local laws from time to time which authorize a
Person to receive or distribute, or both, over the airwaves, audio and visual,
radio or microwave signals within a geographic area for the purpose of providing
commercial broadcasting radio programming, together with all Property owned or
used in connection with the programming provided pursuant to, and all interest
of such Person to receive revenues from any other Person which derives revenues
from or pursuant to, said licenses, franchises and permits. The term
"Broadcasting Station" shall also include a corporation incorporated in the
United States which shall own one or more Broadcasting Stations.
"Business Day": (i) for all purposes other than as set forth in clause
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(ii) below, any day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law or other
governmental action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) above
and which is also a day on which dealings in foreign currency and exchange
between banks in the interbank eurodollar market may be carried on as determined
by the Administrative Agent.
"CERCLA": the Comprehensive Environmental Response, Compensation and
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Liability Act, as set forth at 42 U.S.C. (S)9601, et seq. as the same may be
-- ---
amended from time to time, and the rules and regulations issued thereunder, as
from time to time in effect.
"Change of Control": any of the following: (i) the Permitted Holders fail
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to own at least 75% of the total outstanding Voting Stock of the Borrower, (ii)
if neither Edward G. Atsinger III nor Stuart W. Epperson is serving as chief
executive officer of the Borrower and, if such circumstance is caused solely as
a result of death or incapacity, the continuation thereof for a period of 30
days or (iii) a "Change of Control" (under and as defined in the Subordinated
Indenture) occurs.
"Code": the Internal Revenue Code of 1986, as the same may be amended from
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time to time, or any successor thereto, and the rules and regulations issued
thereunder, as from time to time in effect.
"Collateral": collectively, the Collateral under and as defined in the
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Collateral Documents.
"Collateral Documents": collectively, the Borrower Security Agreement and
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the Subsidiary Guaranty.
"Commitment Fee" and "Commitment Fees": as defined in section 3.1(a).
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"Commonly Controlled Entity": any Subsidiary or any entity, whether or not
--------------------------
incorporated, which is under common control with the Borrower within the meaning
of Section 414(b) or 414(c) of the Code.
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"Communications Act": the Communications Act of 1934, as the same may be
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amended from time to time, and the rules and regulations issued thereunder, as
from time to time in effect.
"Compliance Certificate": a certificate substantially in the form of
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Exhibit H.
"Consolidated": the Borrower and its Subsidiaries which are consolidated
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for financial reporting purposes.
"Consolidated Adjusted Operating Cash Flow": Adjusted Operating Cash Flow
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of the Borrower and its Subsidiaries on a Consolidated basis.
"Consolidated Annual Adjusted Operating Cash Flow": at any time,
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Consolidated Adjusted Operating Cash Flow for the immediately preceding four
fiscal quarters for which financial statements have been delivered pursuant to
section 7.1(a) or (c), or, in the event that the date of determination is a
fiscal quarter ending date, the fiscal quarter then ended and the immediately
preceding three fiscal quarters.
"Consolidated Annual Operating Cash Flow": at any time, Consolidated
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Operating Cash Flow for the immediately preceding four fiscal quarters for which
financial statements have been delivered pursuant to section 7.1(a) or (c), or,
in the event that the date of determination is a fiscal quarter ending date, the
fiscal quarter then ended and the immediately preceding three fiscal quarters.
"Consolidated Operating Cash Flow": Operating Cash Flow of the Borrower
--------------------------------
and its Subsidiaries on a Consolidated basis.
"Consolidating": the Borrower and each of its Subsidiaries taken
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separately.
"Contingent Obligation": as to any Person, any obligation of such Person
---------------------
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (ii) to advance or supply funds for the purchase or
payment of any such primary obligation or to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the beneficiary of any such
primary obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the beneficiary
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include the indorsement of
instruments for deposit or collection in the ordinary course of business. The
term Contingent Obligation shall also include the liability of a general partner
in respect of the Indebtedness of a partnership in which it is a general
partner, excluding Indebtedness which is non-recourse to such general partner.
The amount of any Contingent Obligation of a Person shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.
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"Control Person": as defined in section 2.14.
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"Copyright Act": Title 17 of the United States Code, as amended, and the
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rules and regulations issued thereunder, as from time to time in effect.
"Credit Exposure" with respect to any Lender at any time, its RC
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Commitment or, if no RC Commitment is in effect, the sum of its outstanding RC
Loans and Letter of Credit Exposure, at such time.
"Debt Service": the sum of Interest Expense and scheduled principal
------------
amortization (including scheduled mandatory reductions of revolving credit and
similar commitments) of Total Debt, whether or not actually paid, for, as
applicable, the immediately preceding four fiscal quarters for which financial
statements have been delivered pursuant to section 7.1(a) or (c), or, in the
event that the date of determination is a fiscal quarter ending date, the fiscal
quarter then ended and the immediately preceding three fiscal quarters.
"Default": any of the events specified in section 9, whether or not any
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requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Dollars" and "$": lawful currency of the United States of America.
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"Effective Date": September 25, 1997.
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"Environmental Laws": any and all federal, state and local laws relating
------------------
to the environment, the use, storage, transporting, manufacturing, handling,
discharge, disposal or recycling of hazardous substances, materials or
pollutants or industrial hygiene and including, without limitation, (i) CERCLA;
(ii) the Resource Conservation and Recovery Act of 1976, as amended, 42 USCA
(S)6901 et seq.; (iii) the Toxic Substance Control Act, as amended, 15 USCA
-- ---
(S)2601 et. seq.; (iv) the Water Pollution Control Act, as amended, 33 USCA
-- ---
(S)1251 et. seq.; (v) the Clean Air Act, as amended, 42 USCA (S)7401 et seq.;
-- ---
(vi) the Hazardous Material Transportation Authorization Act of 1994, as
amended, 49 USCA (S)5101 et seq. and (viii) all rules, regulations judgments,
-- ---
decrees, injunctions and restrictions thereunder and any analogous state law, in
each case as from time to time in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
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from time to time, and the rules and regulations issued thereunder, as from time
to time in effect.
"Eurodollar Loan": a portion of the Loans selected by the Borrower to
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bear interest during an Interest Period selected by the Borrower at a rate per
annum based upon a Eurodollar Rate determined with reference to such Interest
Period, all pursuant to and in accordance with sections 2.3 and 2.8.
"Eurodollar Rate": with respect to any Interest Period, the rate per
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annum, as determined by the Administrative Agent, obtained by dividing (and then
rounding to the nearest 1/16 of 1%, or, if there is no nearest 1/16 of 1%, the
next higher 1/16 of 1%):
(a) the rate quoted by the Administrative Agent to major banks in the
interbank eurodollar market as the rate at which the Administrative Agent is
offering
-6-
Dollar deposits in an amount approximately equal to BNY's pro rata share of the
given portion of the Loans selected by the Borrower to bear interest during such
Interest Period based upon a rate of interest determined under this definition,
and having a term to maturity corresponding to such Interest Period, as quoted
at approximately 10:00 A.M. two Business Days prior to the date upon which such
Interest Period is to commence, by
(b) a number equal to 1.00 minus the aggregate of the then stated
maximum rates during such Interest Period of all reserve requirements
(including, without limitation, marginal, emergency, supplemental and special
reserves), expressed as a decimal, established by the Board of Governors of the
Federal Reserve System and any other banking authority to which BNY and other
major United States banks or money center banks are subject, in respect of
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Board of Governors of the Federal Reserve System). Such
reserve requirements shall include, without limitation, those imposed under such
Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
liabilities and as such shall be deemed to be subject to such reserve
requirements without benefit of credits for proration, exceptions or offsets
which may be available from time to time to any Lender under such Regulation D.
The Eurodollar Rate shall be adjusted automatically on and as of the effective
date of any change in any such reserve requirement.
"Event of Default": any of the events specified in section 9, provided
----------------
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Excess Cash Flow": at any time, in respect of any period, Consolidated
----------------
Operating Cash Flow for such period (before any adjustments to reflect
acquisitions, sales and exchanges of Property during such period) less the sum
of, without duplication, (i) Fixed Charges and (ii) voluntary principal
prepayments made pursuant to section 2.5(a), provided that the RC Commitments
are permanently reduced in an aggregate amount equal to such prepayments made
under section 2.5(a).
"Exchange Act": the Securities Exchange Act of 1934, as amended.
------------
"Excluded Cash Flow": at any time, for any period, Operating Cash Flow
------------------
for such period allocable to all Excluded Properties at such time.
"Excluded Property": at any time, any Broadcasting Station, designated in
-----------------
writing by the Borrower to the Administrative Agent and the Lenders as an
Excluded Property, that was acquired by the Borrower within the immediately
preceding 18 month period and in respect of which the Borrower changed the
format from that in effect at the time such Broadcasting Station was acquired by
the Borrower.
"Existing Credit Agreement": the Third Amended and Restated Credit
-------------------------
Agreement, dated as of January 10, 1997, by and among the Borrower, New
Inspiration Broadcasting Company, Inc., Golden Gate Broadcasting Company, Inc.,
Beltway Media Partners, the banks party thereto, Bank of America National Trust
and Savings Association, as Agent and Collateral Agent, and The Bank of New
York, as Documentation Agent, as amended.
-7-
"FCC": the Federal Communications Commission, or any Governmental
---
Authority succeeding to the functions thereof.
"Federal Funds Rate": for any day, the rate per annum (rounded to the
------------------
nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, then to the next
higher 1/16 of 1%) equal to the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers on such day, as published by the Federal Reserve Bank
of New York on the Business Day next succeeding such day, provided that (i) if
the day for which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (ii) if such rate is not so published for any day, the Federal Funds Rate
for such day shall be the average rate charged to the Administrative Agent on
such day on such transactions as determined by the Administrative Agent.
"Fixed Charges": the sum, without duplication, of (a) Debt Service, (b)
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cash income taxes paid and (c) capital expenditures (excluding capital
expenditures made with insurance proceeds and capital expenditures associated
with an acquisition made within the 12 month period immediately following such
acquisition), in each case of the Borrower and its Subsidiaries on a
Consolidated basis, determined in accordance with GAAP, for, as applicable, the
immediately preceding four fiscal quarters for which financial statements have
been delivered pursuant to section 7.1(a) or (c), or, in the event that the date
of determination is a fiscal quarter ending date, the fiscal quarter then ended
and the immediately preceding three fiscal quarters.
"GAAP": generally accepted accounting principles set forth in the opinions
----
and pronouncements of the Accounting Principles Board and the American Institute
of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or in such other statement by such other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination,
consistently applied. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in this Agreement,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to reflect such change in GAAP (subject
to the approval of the Required Lenders), provided that, until so amended, (i)
such ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (ii) the Borrower shall provide to the
Administrative Agent, and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.
"Governmental Authority": any nation or government, any state or other
----------------------
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any court or arbitrator.
"Hazardous Discharge": as defined in section 11.11(b).
-------------------
"Highest Lawful Rate": as to any Lender, the maximum rate of interest, if
-------------------
any, that at any time or from time to time may be contracted for, taken, charged
or received by such Lender on the Notes held thereby, or which may be owing to
such Lender pursuant
-8-
to this Agreement and the other Loan Documents under the laws applicable to such
Lender and this transaction.
"Indebtedness": as to any Person, at a particular time, all items which
------------
constitute, without duplication, (i) indebtedness for borrowed money or the
deferred purchase price of Property (other than trade payables incurred in the
ordinary course of business), (ii) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (iii) obligations with respect to any
conditional sale agreement or title retention agreement, (iv) indebtedness
arising under acceptance facilities and the amount available to be drawn under
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn thereunder to the extent such Person shall not
have reimbursed the issuer in respect of the issuer's payment of such drafts,
(v) all liabilities secured by any Lien on any Property owned by such Person
even though such Person has not assumed or otherwise become liable for the
payment thereof (other than Liens permitted under sections 8.2(i) through (iv)
and carriers', warehousemen's, mechanics', repairmen's or other like non-
consensual Liens arising in the ordinary course of business), (vi) obligations
for principal payments under leases which have been, or under GAAP are required
to be, capitalized and (vii) all Contingent Obligations.
"Indemnified Party": shall have the meaning set forth in section
-----------------
11.11(a).
"Interest Expense": the sum of all (i) interest (adjusted to give effect
----------------
to all Interest Rate Protection Arrangements and fees and expenses paid in
connection with same, all as determined in accordance with GAAP) on Total Debt
and (ii) commitment, letter of credit and similar fees, in each case of the
Borrower and its Subsidiaries on a Consolidated basis, determined in accordance
with GAAP, for, as applicable, the immediately preceding four fiscal quarters
for which financial statements have been delivered pursuant to section 7.1(a) or
(c), or, in the event that the date of determination is a fiscal quarter ending
date, the fiscal quarter then ended and the immediately preceding three fiscal
quarters.
"Interest Payment Date": (i) as to any ABR Loan, the last day of each
---------------------
March, June, September and December commencing on the first of such days to
occur after such ABR Loan is made, (ii) as to any Eurodollar Loan in respect of
which the Borrower has selected an Interest Period of one, two or three months,
the last day of such Interest Period and (iii) as to any Eurodollar Loan in
respect of which the Borrower has selected an Interest Period of six months, the
last day of such Interest Period and the corresponding day of the month which is
three months after the date of the commencement of such Interest Period, or, if
such day is not a Business Day or does not exist, on the immediately preceding
Business Day.
"Interest Period": the period commencing on any Business Day selected by
---------------
the Borrower in accordance with section 2.3 or 2.8 and ending one, two, three or
six months thereafter, as selected by the Borrower in accordance with such
section, subject to the following:
(a) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the immediately
succeeding Business Day unless the result of such extension would be to carry
the end of such Interest Period into another calendar month, in which event such
Interest Period shall end on the Business Day immediately preceding such day;
and
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(b) if any Interest Period shall begin on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period), such Interest Period
shall end on the last Business Day of a calendar month.
"Interest Rate Protection Arrangement": any interest rate swap, cap or
------------------------------------
collar arrangement or any other derivative product customarily offered by banks
to their customers in order to manage the exposure of such customers to interest
rate fluctuations.
"Investments": as defined in section 8.5.
-----------
"Issuing Bank": BNY.
------------
"Lending Office": in respect of any Lender, initially, the office or
--------------
offices of such Lender designated as such in Schedule 1.1(L) hereto; thereafter,
such other office or offices of such Lender, if any, which shall be making or
maintaining Loans.
"Letter of Credit": as defined in Section 2.18.
----------------
"Letter of Credit Commitment": the commitment of the Issuing Bank to issue
---------------------------
Letters of Credit in accordance with the terms hereof in an aggregate
outstanding face amount not exceeding $15,000,000 (or, if less, the RC
Commitments) at any time, as the same may be reduced pursuant to Section 2.4.
"Letter of Credit Exposure": at any time, (a) in respect of all Lenders,
-------------------------
the sum, without duplication, of (i) the maximum aggregate amount which may be
drawn under all unexpired Letters of Credit at such time (whether the conditions
for drawing thereunder have or may be satisfied), (ii) the aggregate amount, at
such time, of all unpaid drafts (which have not been dishonored) drawn under all
Letters of Credit, and (iii) the aggregate unpaid principal amount of the
Reimbursement Obligations at such time, and (b) in respect of any Lender, an
amount equal to such Lender's RC Commitment Percentage at such time multiplied
by the amount determined under clause (a) of this definition.
"Letter of Credit Fee": as defined in Section 3.1(c).
--------------------
"Letter of Credit Participation": with respect to each Lender, its
------------------------------
obligations to the Issuing Bank under Section 2.19.
"Letter of Credit Request": a request in the form of Exhibit D.
------------------------
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), or other security agreement
or security interest of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement and any
financing lease having substantially the same economic effect as any of the
foregoing.
"Loans": the RC Loans.
-----
"Loan Documents": collectively, this Agreement, the Notes, the
--------------
Reimbursement Agreements and the Collateral Documents.
-10-
"Loan Party": the Borrower, each Subsidiary Guarantor and each other party
----------
(other than the Administrative Agent, the Issuing Bank and the Lenders) that is
a signatory to a Loan Document.
"Margin Stock": any "margin stock", as said term is defined in Regulation
------------
U of the Board of Governors of the Federal Reserve System, as the same may be
amended or supplemented from time to time.
"Material Adverse Change": a material adverse change in (i) the
-----------------------
operations, business, prospects, Property or condition (financial or otherwise)
of (a) the Borrower or (b) the Borrower and its Subsidiaries on a Consolidated
basis, (ii) the ability of the Borrower or any other Loan Party to perform its
obligations under the Loan Documents to which it is a party or (iii) the ability
of the Administrative Agent or any of the Lenders to enforce any of the Loan
Documents.
"Material Adverse Effect": a material adverse effect on (i) the
-----------------------
operations, business, prospects, Property or condition (financial or otherwise)
of (a) the Borrower or (b) the Borrower and its Subsidiaries on a Consolidated
basis, (ii) the ability of the Borrower or any other Loan Party to perform its
obligations under the Loan Documents to which it is a party or (iii) the ability
of the Administrative Agent or any of the Lenders to enforce any of the Loan
Documents.
"Maturity Date": August 31, 2004.
-------------
"Multiemployer Plan": a Plan which is a multiemployer plan as defined in
------------------
Section 4001(a)(3) of ERISA.
"Net Equity Proceeds": as defined in section 2.4(b)(v).
-------------------
"Notes": the RC Notes.
-----
"Operating Cash Flow": at any time, with respect to any Person, for any
-------------------
period: (i) revenues (exclusive of reciprocal and barter revenues) of such
Person, determined in accordance with GAAP, for such period, less (ii) expenses
----
(exclusive of depreciation, amortization, interest, income tax and reciprocal
and barter expenses included therein), plus (iii) non-recurring expense items
----
and other non-cash expense items of such Person for such period, in each case
mutually agreed upon between the Borrower and the Required Lenders, to the
extent deducted in accordance with clause (ii) above, less (iv) the amount of
----
any cash payments related to non-cash expense items added pursuant to clause
(iii) above. Operating Cash Flow shall be adjusted on a consistent basis to
reflect the acquisition, sale, exchange and disposition of Property during such
period. Operating Cash Flow shall exclude all gains and losses from the sale or
disposition of Property and all extraordinary gains and losses.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
----
Subtitle A of Title IV of ERISA, or any Governmental Authority succeeding to the
functions thereof.
"Permitted Holders": as of any date of determination (i) any of Stuart W.
-----------------
Epperson and Edward G. Atsinger III; (ii) family members or the relatives of the
Persons described in clause (i); (iii) any trusts created for the benefit of the
Persons described in
-11-
clauses (i), (ii) or (iv) or any trust for the benefit of such trust; or (iv) in
the event of the incompetence or death of any of the Persons described in
clauses (i) and (ii), such Persons's estate, executor, administrator, committee
or other personal representative or beneficiaries, in each case who at any
particular date shall beneficially own or have the right to acquire, directly or
indirectly, Voting Stock of the Borrower.
"Permitted Liens": Liens permitted to exist pursuant to section 8.2.
---------------
"Permitted Non-Commercial Educational Station Investment": a loan made by
-------------------------------------------------------
the Borrower or a Subsidiary to a non-profit entity, the proceeds of which are
used to acquire assets used in the operation of a Broadcasting Station; provided
that so long as any such Investment remains outstanding (i) such loan shall be
evidenced by a promissory note and shall not be subordinated to any other
Indebtedness of such non-profit entity; (ii) at least 40% of the board seats (or
other comparable governing body) of such non-profit entity shall be held by
executive officers of the Borrower, and (iii) a technical and professional
services agreement shall be in full force and effect between such non-profit
entity and the Borrower pursuant to which the Borrower shall be compensated for
providing engineering, accounting, legal and other assistance in connection with
the operation of the station licensed to such non-profit entity (which agreement
shall contain customary terms and conditions for technical and professional
services agreements in the radio broadcasting industry generally).
"Person": an individual, a partnership, a corporation, a business trust, a
------
joint stock company, a trust, an unincorporated association, a joint venture, a
limited liability company, a Governmental Authority or any other entity of
whatever nature.
"Plan": any pension plan which is covered by Title IV of ERISA and which
----
is maintained by or to which contributions are made by the Borrower or a
Commonly Controlled Entity or in respect of which the Borrower or a Commonly
Controlled Entity has or may have any liability.
"Pro-Forma Debt Service": the sum of Pro-Forma Interest Expense and the
----------------------
scheduled payments of principal (including scheduled mandatory reductions of
revolving credit and similar commitments) in respect of Total Debt required to
be made during the four fiscal quarters of the Borrower immediately succeeding
any determination thereof. For purposes of calculating Pro-Forma Debt Service,
the principal amount outstanding under any revolving or line of credit facility
on the date of any calculation of Pro-Forma Debt Service shall be assumed to be
outstanding during the entire applicable four fiscal quarter period, subject to
any mandatory scheduled payments of principal required to be made during such
period.
"Pro-Forma Interest Expense": the sum of all interest (adjusted to give
--------------------------
effect to all Interest Rate Protection Arrangements and fees and expenses paid
in connection with the same, all as determined in accordance with GAAP) in
respect of Total Debt for the four fiscal quarters of the Borrower immediately
succeeding any determination thereof. Where any item of interest varies or
depends upon a variable rate of interest (or other rate of interest which is not
fixed for such entire four fiscal quarters), such rate, for purposes of
calculating Pro-Forma Interest Expense, shall be assumed to equal the interest
rate in effect on the date of such calculation. Also, for purposes of
calculating Pro-Forma Interest Expense, the principal amount outstanding under
any revolving or line of credit facility on the date of any calculation of Pro-
Forma Debt Service shall be assumed to be
-12-
outstanding during the entire applicable four fiscal quarter period, subject to
any mandatory scheduled payments of principal required to be made during such
period.
"Property": all types of real, personal, tangible, intangible or mixed
--------
property.
"RC Commitment": as to any Lender, the amount set forth next to the name
-------------
of such Lender on Exhibit A under the heading "RC Commitment", as such RC
Commitment may be reduced from time to time pursuant to section 2.4.
"RC Commitments": the RC Commitments of all Lenders.
--------------
"RC Commitment Percentage": as to any Lender, the percentage set forth
------------------------
opposite the name of such Lender on Exhibit A under the heading "RC Commitment
Percentage".
"RC Commitment Period": the period from the Effective Date until the RC
--------------------
Commitment Termination Date.
"RC Commitment Termination Date": the earlier of the Business Day
------------------------------
immediately preceding the Maturity Date or such other date upon which the RC
Commitments shall have been terminated in accordance with section 2.4 or 9.1.
"RC Loan" and "RC Loans": as defined in section 2.1.
------- --------
"RC Note" and "RC Notes": as defined in section 2.2.
------- --------
"Reimbursement Agreement": as defined in Section 2.18(b).
-----------------------
"Reimbursement Obligations": all obligations and liabilities of the
-------------------------
Borrower due and to become due (a) under the Reimbursement Agreements and (b)
hereunder in respect of Letters of Credit.
"Reinvested Proceeds": net cash proceeds from the sale, exchange or other
-------------------
disposition of all or substantially all of a Broadcasting Station, after giving
effect to the payment of cash taxes payable in connection with the same, which
cash proceeds are used to acquire one or more additional Broadcasting Stations
through a merger or acquisition in accordance with section 8.3 during the
Reinvestment Period.
"Reinvestment Period": the period which is 360 days from the date that
-------------------
proceeds from the sale, exchange or other disposition of all or substantially
all of a Broadcasting Station are received by the Borrower.
"Remaining Interest Period": (i) in the event that the Borrower shall fail
-------------------------
for any reason to borrow or convert Loans after it shall have notified the
Administrative Agent of its intent to do so in which it shall have requested a
Eurodollar Loan pursuant to section 2.3 or 2.8, a period equal to the Interest
Period that the Borrower elected in respect of such Eurodollar Loan; (ii) in the
event that a Eurodollar Loan shall terminate for any reason prior to the last
day of the Interest Period applicable thereto, a period equal to the period from
and including the date of such termination to but excluding the last day of such
Interest Period; and (iii) in the event that the Borrower shall prepay or repay
all or any part of the principal amount of a Eurodollar Loan prior to the last
day of the Interest
-13-
Period applicable thereto, a period equal to the period from and including the
date of such prepayment or repayment to but excluding the last day of such
Interest Period.
"Reportable Event": any event described in Section 4043(b) of ERISA, other
----------------
than an event (excluding an event described in Section 4043(b)(1) relating to
tax disqualification) with respect to which the 30-day notice requirement has
been waived.
"Required Lenders": at any date of determination, Lenders having Credit
----------------
Exposures equal to or greater than 51% of the Total Credit Exposure.
"Restricted Payment": as defined in section 8.4.
------------------
"Single Employer Plan": any Plan which is not a Multiemployer Plan.
--------------------
"Solvent": with respect to any Person as of any date of determination, on
-------
such date (i) the fair value of the assets of such Person (both at fair
valuation and at present fair saleable value) is, as of such date of
determination, greater than the total amount of liabilities, including, without
limitation, contingent and unliquidated liabilities, of such Person, (ii) such
Person is able to pay all of its liabilities as they mature, and (iii) such
Person does not have unreasonably small capital with which to carry on its
business. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Special Counsel": Emmet, Marvin & Martin, LLP, special counsel to the
---------------
Administrative Agent.
"Stock": any and all shares, interests, participations, options, warrants
-----
or other equivalents (however designated) of corporate stock, including, without
limitation, phantom stock.
"Subordinated Indenture": the Indenture, dated as of September 25, 1997,
----------------------
between the Borrower and The Bank of New York, as trustee, as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
section 8.19.
"Subordinated Indenture Notes": the 9.5% Senior Subordinated Notes, due
----------------------------
2007, in the aggregate principal amount of $150,000,000, issued pursuant to the
Subordinated Indenture, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with section 8.19.
"Subordinated Indenture Subsidiary Guaranty": the subordinated guaranty
------------------------------------------
or guaranties executed and delivered by one or more of the Subsidiaries in
connection with the Subordinated Indenture, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with section
8.19.
"Subsidiary": any corporation, association, partnership, joint venture or
----------
other business entity of which the Borrower and/or any Subsidiary of the
Borrower, directly or indirectly, either (i) in respect of a corporation, owns
or controls more than 50% of the
-14-
outstanding Stock having ordinary voting power to elect a majority of the board
of directors or similar managing body, irrespective of whether or not a class or
classes shall or might have voting power by reason of the happening of any
contingency, or (ii) in respect of an association, partnership, joint venture or
other business entity, is entitled to share in more than 50% of the profits and
losses, however determined.
"Subsidiary Guarantor": each Subsidiary.
--------------------
"Subsidiary Guaranty": the Subsidiary Guaranty and Security Agreement,
-------------------
dated as of the date hereof, made by the Subsidiaries to the Administrative
Agent, substantially in the form attached hereto as Exhibit J, as the same may
be amended, supplemented or otherwise modified from time to time.
"Taxes": any present or future income, stamp or other taxes, levies,
-----
imposts, duties, fees, assessments, deductions, withholding, or other charges of
whatever nature, now or hereafter imposed, levied, collected, withheld, or
assessed by any jurisdiction, or by any department, agency, state or other
political subdivision thereof or therein.
"Total Adjusted Debt": Total Debt less, with respect to each Excluded
------------------- ----
Property, the lesser of (i) 50% of the lesser of (x) the purchase price of such
Excluded Property and (y) the independent appraisal value (if required under
clause (i) of the first paragraph of section 8.3(b)) of such Excluded Property
and (ii) $40,000,000 prior to December 31, 1998 and $25,000,000 thereafter.
"Total Credit Exposure": at any time, the sum of the Credit Exposures of
---------------------
all Lenders at such time.
"Total Debt": the aggregate Indebtedness of the Borrower and its
----------
Subsidiaries on a Consolidated basis, determined in accordance with GAAP.
"Total Leverage Ratio": the ratio of (i) Total Adjusted Debt less cash and
--------------------
cash equivalents in excess of $5,000,000 to (ii) Consolidated Annual Adjusted
Operating Cash Flow.
"Upstream Transfers": as defined in section 8.13.
------------------
"Voting Stock": Stock of the class or classes pursuant to which the
------------
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time Stock of any other class
or classes shall have or might have voting power by reason or the happening of
any contingency).
1.2 Principles of Construction.
--------------------------
(a) All terms defined in this Agreement shall have the meanings given
such terms herein when used in the Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto, unless otherwise defined
therein.
(b) Unless otherwise specified herein, as used in the Loan Documents
and in any certificate, opinion or other document made or delivered pursuant
hereto or
-15-
thereto, all accounting terms used herein shall be interpreted, and all
accounting determinations hereunder shall be made, in accordance with GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and similar
words when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section, paragraph,
schedule and exhibit references contained herein shall refer to sections or
paragraphs hereof or schedules or exhibits hereto unless otherwise expressly
provided herein.
(d) The word "or" shall not be exclusive; "may not" is prohibitive and
not permissive; and the singular includes the plural.
(e) Unless otherwise specifically set forth herein, all references to
time shall refer to New York City time.
2. AMOUNT AND TERMS OF LOANS.
--------------------------
2.1 Loans.
-----
Subject to the terms and conditions hereof, each Lender having an RC
Commitment agrees to make loans (each an "RC Loan" and, collectively with the
-------
other RC Loans of such Lender and/or with the RC Loans of each other Lender, the
"RC Loans") to the Borrower from time to time during the RC Commitment Period.
--------
At all times during the RC Commitment Period, the Borrower may borrow, prepay
and reborrow RC Loans in accordance with the provisions hereof, provided that
the aggregate unpaid principal amount of all RC Loans and the Letter of Credit
Exposure of all Lenders at any one time shall not exceed the RC Commitments then
in effect, and provided further that the aggregate unpaid principal amount of
each Lender's RC Loans and its Letter of Credit Exposure at any one time shall
not exceed such Lender's RC Commitment. The principal amount of each Lender's
RC Loan made on a Borrowing Date shall be an amount equal to its RC Commitment
Percentage of all RC Loans made on such date. Subject to the provisions of
sections 2.3, 2.8 and 2.15, RC Loans may be (i) ABR Loans, (ii) Eurodollar Loans
or (iii) any combination thereof.
2.2 Notes.
-----
The RC Loans of each Lender shall be evidenced by a promissory note in
the form of Exhibit B (each as indorsed or modified from time to time, including
all replacements thereof and substitutions therefor, an "RC Note" and,
-------
collectively with the RC Note of each other Lender, the "RC Notes"), payable to
--------
the order of such Lender, in the maximum stated principal amount equal to such
Lender's RC Commitment. Each RC Note shall (i) be dated the Effective Date,
(ii) be stated to mature on the Maturity Date and be payable in the amounts and
at the times required by section 2.5 and (iii) bear interest on the unpaid
principal amount thereof at the applicable interest rate or rates per annum
determined as provided in section 2.6, payable as specified in section 2.6.
Each Lender is hereby irrevocably authorized by the Borrower to enter on the
schedule attached to its RC Note and/or in its internal books and records the
amount of each RC Loan made by it thereunder, each payment thereon, and the
other information provided for on such schedule, and such schedule and books and
records shall be presumptively correct absent manifest error as to the amount of
such Lender's RC Loans and as to the amount of
-16-
principal and interest paid by the Borrower in respect of such RC Loans and as
to the other information set forth on such schedule or books and records
relating to the RC Loans, provided, however, that the failure to make any such
entry (or any error therein) with respect to any RC Loan shall not limit or
otherwise affect the obligations of the Borrower hereunder or under such RC
Note. Each Lender may attach one or more continuations to such schedule as and
when required. In all events, the principal amount owing by the Borrower to each
Lender in respect of such Lender's RC Note shall be the aggregate amount of all
RC Loans made by such Lender thereunder less all payments of principal thereon
made by the Borrower.
2.3 Procedure for Borrowing Loans.
-----------------------------
(a) The Borrower may borrow RC Loans on any Business Day occurring
during the RC Commitment Period, provided that, with respect to any requested
borrowing, the Borrower shall notify the Administrative Agent (by telephone or
telecopy) no later than 1:00 P.M., three Business Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, and no later than 1:00 P.M.,
one Business Day prior to the requested Borrowing Date, in the case of ABR
Loans, specifying (i) the aggregate amounts to be borrowed under the RC
Commitments, (ii) the requested Borrowing Date, (iii) whether the borrowing is
to be a Eurodollar Loan, an ABR Loan, or a combination thereof, and (iv) if the
borrowing is to be a Eurodollar Loan, the length of the initial Interest Period
for such Eurodollar Loan. Each such notice shall be irrevocable and confirmed
immediately by delivery to the Administrative Agent of a Borrowing Request.
Each borrowing of RC Loans, consisting of ABR Loans shall be in an aggregate
principal amount equal to $1,000,000 or such amount plus an integral multiple of
$100,000 in excess thereof or, if less, the unused amount of the RC Commitments.
Each borrowing of RC Loans, as the case may be, consisting of Eurodollar Loans
shall be in a minimum aggregate principal amount equal to $2,000,000 or an
integral multiple of $250,000 in excess thereof. Upon receipt of each notice of
borrowing from the Borrower, the Administrative Agent shall promptly notify each
Lender (by telephone or otherwise, such notice to be confirmed by telecopy or
other writing) of the requested borrowing. Subject to its receipt of the notice
referred to in the preceding sentence and to the other terms and conditions of
this Agreement, each Lender will make the amount of its applicable RC Commitment
Percentage, of each borrowing available to the Administrative Agent for the
account of the Borrower at the office of the Administrative Agent set forth in
section 11.2 not later than 12:00 Noon, on the Borrowing Date requested by the
Borrower, in funds immediately available to the Administrative Agent at such
office. The amounts so made available to the Administrative Agent on a Borrowing
Date will then, subject to the satisfaction of the terms and conditions of this
Agreement as determined by the Administrative Agent, be made available on such
date to the Borrower by the Administrative Agent, in immediately available
funds, at the office of the Administrative Agent specified in section 11.2 by
crediting the account of the Borrower on the books of such office with the
aggregate of said amounts received by the Administrative Agent.
(b) Unless the Administrative Agent shall have received prior notice
from a Lender (by telephone or otherwise, such notice to be confirmed by
telecopy or other writing) that such Lender will not make available to the
Administrative Agent such Lender's pro rata share of the Loans requested by the
Borrower, the Administrative Agent may assume that such Lender has made such
share available to the Administrative Agent on such Borrowing Date in accordance
with this section 2.3 provided that such Lender
-17-
received notice of the proposed borrowing from the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such Borrowing Date a corresponding amount. If and to the extent
such Lender shall not have so made such pro rata share available to the
Administrative Agent, such Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount (to the
extent not previously paid by the other), together with interest thereon for
each day from the date such amount is made available to the Borrower until the
date such amount is paid to the Administrative Agent, at a rate per annum equal
to, in the case of the Borrower, the applicable interest rate set forth in
section 2.6, and, in the case of such Lender, the Federal Funds Rate in effect
on such date (as determined by the Administrative Agent). Such payment by the
Borrower, however, shall be without prejudice to its rights against such Lender.
If such Lender shall pay to the Administrative Agent such corresponding amount,
such amount so paid shall constitute such Lender's Loan as part of such Loans
for purposes of this Agreement, which Loan shall be deemed to have been made by
such Lender on the Borrowing Date applicable to such Loans.
2.4 Reduction of Commitments.
------------------------
(a) Voluntary Reductions. The Borrower shall have the right, upon at
--------------------
least three Business Days' prior irrevocable written notice to the
Administrative Agent, to reduce permanently the RC Commitments or the Letter of
Credit Commitment, in whole at any time, or in part from time to time, without
premium or penalty, to an amount not less than (i) in the case of the RC
Commitments, the sum of the aggregate outstanding principal balance of the RC
Loans, after giving effect to any contemporaneous prepayment thereof, and the
Letter of Credit Exposure of all Lenders, provided that each partial reduction
of such RC Commitments shall be in a minimum amount of $5,000,000 or an integral
multiple of $1,000,000 in excess thereof or, if less, the amount of the RC
Commitments then in effect, and (ii) in the case of the Letter of Credit
Commitment, the Letter of Credit Exposure of all Lenders, provided that each
partial reduction of the Letter of Credit Commitment shall be in a minimum
amount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof or,
if less, the Letter of Credit Commitment then in effect.
(b) Mandatory Reductions of RC Commitments.
--------------------------------------
(i) Mandatory Scheduled Reductions of RC Commitments. On each date
------------------------------------------------
set forth below, the RC Commitments shall be reduced by the amount set forth
below next to such date:
Reduction
Dates Amounts
----- -------
March 31, 1999 $ 2,500,000
June 30, 1999 $ 2,500,000
September 30, 1999 $ 2,500,000
December 31, 1999 $ 2,500,000
March 31, 2000 $ 2,500,000
June 30, 2000 $ 2,500,000
September 30, 2000 $ 2,500,000
December 31, 2000 $ 2,500,000
March 31, 2001 $ 2,500,000
-18-
June 30, 2001 $ 2,500,000
September 30, 2001 $ 2,500,000
December 31, 2001 $ 2,500,000
March 31, 2002 $ 2,500,000
June 30, 2002 $ 2,500,000
September 30, 2002 $ 2,500,000
December 31, 2002 $ 2,500,000
March 31, 2003 $ 2,500,000
June 30, 2003 $ 2,500,000
September 30, 2003 $ 2,500,000
December 31, 2003 $ 2,500,000
March 31, 2004 $ 6,250,000
June 30, 2004 $ 6,250,000
August 31, 2004 $12,500,000
(ii) Mandatory Reductions of RC Commitments Relating to Excess Cash
--------------------------------------------------------------
Flow. On the earlier of (i) the date the annual financial statements in respect
- ----
of each fiscal year (commencing with the fiscal year ending December 31, 1998),
are delivered to the Administrative Agent pursuant to section 7.1(a) or (ii) the
120th day following the end of each fiscal year (commencing with the fiscal year
ending December 31, 1998), the RC Commitments shall be reduced by an amount
equal to 50% of Excess Cash Flow with respect to such fiscal year, provided that
no such reduction in respect of such fiscal year shall be required if (x) the
Total Leverage Ratio as at the end of such fiscal year is less than 3.50:1.00
and (y) no Default or Event of Default shall exist at the end of such fiscal
year or on the date the RC Commitments would be required to be reduced.
(iii) Mandatory Reductions of RC Commitments Relating to Insurance
------------------------------------------------------------
and Condemnation. The RC Commitments shall be reduced in the amounts and at the
- ----------------
times required by sections 7.5(b) and 7.5(c).
(iv) Mandatory Reductions of RC Commitments Relating to Proceeds of
--------------------------------------------------------------
Broadcasting Station Sales and Other Property Sales. The RC Commitments shall
- ---------------------------------------------------
be reduced by an amount equal to the difference between (a) 100% of the proceeds
of the sale, exchange or other disposition of (A) all or substantially all of
any Broadcasting Station of the Borrower or any of its Subsidiaries, or (B) any
other Property to the extent not sold, exchanged or disposed of in the ordinary
course of business (net of (1) sales and other commissions and legal and other
expenses incurred, (2) cash taxes payable, and (3) Indebtedness permitted under
sections 8.1(ii) and (iv) which is secured by the Broadcasting Station or other
Property sold, exchanged or disposed of and required to be repaid and is repaid,
in each case in connection therewith), and (b) the amount of Reinvested Proceeds
in connection with such sale, exchange or other disposition of a Broadcasting
Station which has been used prior to the date such reduction is required to be
made to acquire one or more additional Broadcasting Stations through a merger or
acquisition in accordance with section 8.3. Such reduction shall be made on the
earlier of (x) the last day of the Reinvestment Period with respect to such
sale, exchange or other disposition, or (y) the occurrence of a Default or Event
of Default.
(v) Mandatory Reductions of RC Commitments Relating to Issuances of
---------------------------------------------------------------
Equity. The RC Commitments shall be reduced immediately upon receipt by the
- ------
Borrower of the aggregate proceeds of any issuance by the Borrower of Stock (net
of sales and other commissions and legal and other related expenses incurred in
connection with such issuance) (the "Net Equity Proceeds") by an amount equal
-------------------
to:
-19-
(A) if the Total Leverage Ratio is greater than 6.00:1.00, the lesser
of (x) 100% of the Net Equity Proceeds and (y) if no Default or Event of Default
shall then exist, the amount of the Net Equity Proceeds which when applied to
the prepayment of the Loans will result in the Total Leverage Ratio being equal
to 6.00:1.00;
(B) if the Total Leverage Ratio is greater than 4.50:1.00 but less
than or equal to 6.00:1.00 (whether before or after giving effect to clause (A)
above), the lesser of (x) 50% of the Net Equity Proceeds (excluding the amount
of Net Equity Proceeds applied to the prepayment of the Loans pursuant to clause
(A) above) if no Default or Event of Default shall then exist and (y) if no
Default or Event of Default shall then exist, the amount of the Net Equity
Proceeds which when applied to the prepayment of the Loans will result in the
Total Leverage Ratio not exceeding 4.50:1.00; and
(C) if a Default or Event of Default shall then exist, 100% of the Net
Equity Proceeds.
Notwithstanding the foregoing, provided that no Default or Event of Default
shall exist immediately before or after giving effect thereto, Net Equity
Proceeds shall not reduce the RC Commitments to the extent the RC Commitments
are equal to or less than $50,000,000.
(vi) Mandatory Reductions of RC Commitments Relating to FCC License
--------------------------------------------------------------
Interruption. In the event that for any reason any Broadcasting Station shall
- ------------
be off the air for a period of 30 consecutive days due to action by any
Governmental Authority, the RC Commitments shall be reduced by an amount equal
to the Total Leverage Ratio then in effect (but not exceeding 6.00) multiplied
by the Operating Cash Flow allocable to such Broadcasting Station for the
immediately preceding four fiscal quarters or, if such Broadcasting Station was
acquired by the Borrower within the 18 month period prior to the first day of
such 30 day period, by an amount equal to the aggregate purchase price paid by
the Borrower for such Broadcasting Station.
(c) Application of Reductions.
-------------------------
(i) Each reduction of the RC Commitments made pursuant to this section
2.4 shall effect a corresponding reduction of each Lender's applicable RC
Commitment by an amount equal to such Lender's applicable RC Commitment
Percentage of such reduction.
(ii) Reductions of the RC Commitments made pursuant to section 2.4(a)
or 2.4(b)(ii), (iii), (iv), (v) and (vi) shall be applied in inverse order among
the remaining RC Commitment reductions set forth in section 2.4(b)(i).
(iii) Simultaneously with each reduction of the RC Commitments under
this section 2.4, the Borrower shall pay the applicable Commitment Fee accrued
on the amount by which such RC Commitments have been reduced.
(iv) If for any reason the Letter of Credit Exposure of all Lenders
shall exceed the RC Commitments, the Borrower shall immediately deposit in a
cash collateral account maintained with and under the sole dominion and control
of the Administrative Agent an amount equal to such excess.
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2.5 Prepayments of the Loans.
------------------------
(a) Voluntary Prepayments. The Borrower may, at its option, prepay the
---------------------
RC Loans, in whole or in part, without premium or penalty, at any time and from
time to time, by notifying the Administrative Agent at least three Business
Days' prior to the proposed prepayment date with respect to Eurodollar Loans,
and at least one Business Day prior to the proposed prepayment date with respect
to ABR Loans. Each such notice shall be in writing and shall specify the Loans
to be prepaid (whether Eurodollar Loans or ABR Loans), the amount to be prepaid,
and the date of prepayment. Upon receipt by the Administrative Agent of any
such notice, the Administrative Agent shall promptly notify each Lender thereof.
If any such notice of the Borrower is given pursuant to this section 2.5, such
notice shall be irrevocable and the payment amount specified in such notice
shall be due and payable on the date specified, together with accrued interest
to the date of such payment on the amount prepaid. Partial prepayments of ABR
Loans shall be in an aggregate principal amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof and partial prepayments of Eurodollar
Loans shall be in an aggregate principal amount of $2,000,000 or an integral
multiple of $250,000 in excess thereof, or, if less, the outstanding principal
balance of such Loans.
(b) Mandatory Prepayments of Loans. The Borrower shall immediately
------------------------------
prepay the RC Loans (i) at any time at which the sum of the aggregate
outstanding principal amount of the outstanding RC Loans and the Letter of
Credit Exposure of all Lenders exceeds the aggregate RC Commitments of all
Lenders in an amount equal to the amount of such excess and (ii) in the amounts
and at the times required by section 7.5.
(c) In General. If any prepayment is made under this section 2.5 with
----------
respect to any Eurodollar Loans, in whole or in part, prior to the last day of
the applicable Interest Period, the Borrower agrees to indemnify the Lenders in
accordance with section 2.9. After giving effect to any partial prepayment with
respect to Eurodollar Loans which were made (whether as the result of a
borrowing or a conversion) on the same date and which had the same Interest
Period, the outstanding principal amount of such Eurodollar Loans shall not be
less than $2,000,000 or an integral multiple of $250,000 in excess thereof. The
Borrower may designate which Loans (ABR Loans or Eurodollar Loans) are to be
prepaid in connection with any prepayment made under this section 2.5.
2.6 Interest Rate and Payment Dates; Highest Lawful Rate.
----------------------------------------------------
(a) Prior to Maturity. Prior to maturity, the outstanding principal
-----------------
amount of the Loans shall bear interest on the unpaid principal amount thereof
at the Alternate Base Rate or the Eurodollar Rate, as applicable, plus the
Applicable Margin.
(b) Default Rate. After maturity and at all times during the
------------
continuance of any Event of Default under section 9.1(a), (b), (h) or (i) or
during the continuance for more than 30 days of any other Event of Default, the
outstanding principal amount of all Loans hereunder shall bear interest,
notwithstanding the rate which would otherwise be applicable pursuant to section
2.6(a) above, at a rate of interest per annum equal to 2% above such otherwise
applicable rate.
(c) Late Payment Rate. Any payment of interest on any Note or any
-----------------
Reimbursement Obligation and any payment of any Commitment Fee, Letter of Credit
Fee or other fee or payment payable by the Borrower under any Loan Document and
not paid on the
-21-
date when due and payable shall bear interest, to the extent permitted by law,
at the Alternate Base Rate plus the Applicable Margin for ABR Loans plus 2% per
annum from the due date thereof until the date such payment is made.
(d) General. Interest on ABR Loans, to the extent based on the BNY
-------
Rate, shall be calculated on the basis of a 365 or 366 day year (as the case may
be), and interest on all Eurodollar Loans and ABR Loans, to the extent based on
the Federal Funds Rate, shall be calculated on the basis of a 360 day year, in
each case for the actual number of days elapsed. Interest shall be payable in
arrears on each Interest Payment Date and upon payment (or prepayment (or
required payment or prepayment) of the Loans, except that interest payable
pursuant to sections 2.6(b) and 2.6(c) shall be payable on demand. Any change
in the interest rate on a Loan resulting from a change in the Alternate Base
Rate shall become effective as of the opening of business on the day on which
such change in the Alternate Base Rate shall become effective. The
Administrative Agent shall, as soon as practicable, notify the Borrower and the
Lenders of the effective date and the amount of each such change in the
Alternate Base Rate, but failure to so notify shall not in any manner affect the
obligation of the Borrower to pay interest on the Loans in the amounts and on
the dates required. Each determination of the Alternate Base Rate or Eurodollar
Rate by the Administrative Agent pursuant to this Agreement shall be conclusive
and binding on the Borrower and the Lenders absent manifest error.
(e) Highest Lawful Rate. At no time shall the interest rate payable
-------------------
on the Loans of any Lender, together with the Commitment Fees, the Letter of
Credit Fee and all other fees and other amounts payable hereunder, to the extent
the same are construed to constitute interest, exceed the Highest Lawful Rate
applicable to such Lender. If interest payable to a Lender on any date would
exceed the maximum amount permitted by the Highest Lawful Rate, such interest
payment shall automatically be reduced to such maximum permitted amount, and
interest for any subsequent period, to the extent less than the maximum amount
permitted for such period by the Highest Lawful Rate, shall be increased by the
unpaid amount of such reduction. Any interest actually received for any period
in excess of such maximum allowable amount for such period shall be deemed to
have been applied as a prepayment of such Lender's Loans. The Borrower
acknowledges that to the extent interest payable on ABR Loans is based on the
BNY Rate, such BNY Rate is only one of the bases for computing interest on loans
made by the Lenders, and by basing interest payable on ABR Loans on the BNY
Rate, the Lenders have not committed to charge, and the Borrower has not in any
way bargained for, interest based on a lower or the lowest rate at which the
Lenders may now or in the future make loans to other borrowers.
2.7 Use of Proceeds.
---------------
(a) The proceeds of all Loans shall be used first to repay in full all
obligations under the Existing Credit Agreement and, thereafter, (i) to finance
acquisitions of Broadcasting Stations permitted hereunder, including transaction
expenses in connection therewith, (ii) to make capital expenditures permitted
hereunder, (iii) for working capital purposes and (iv) for general corporate
purposes.
(b) Letters of Credit shall be used to support ordinary course working
capital purposes and to fulfill deposit requirements associated with proposed
acquisitions of Broadcasting Stations.
-22-
(c) Notwithstanding anything to the contrary contained in any Loan
Document, the Borrower agrees that no part of the proceeds of any Loan or Letter
of Credit have been or will be used, directly or indirectly, for a purpose which
violates any law, rule or regulation of any Governmental Authority, including
without limitation the provisions of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System, as amended.
2.8 Conversions; Other Matters.
--------------------------
(a) The Borrower may elect from time to time to convert Eurodollar
Loans to ABR Loans by giving the Administrative Agent at least two Business
Days' prior irrevocable notice of such election, specifying the amount to be so
converted, provided, that any such conversion shall only be made on the last day
of the Interest Period applicable thereto. In addition, the Borrower may elect
from time to time to convert ABR Loans to Eurodollar Loans or to convert
Eurodollar Loans to new Eurodollar Loans by giving the Administrative Agent at
least three Business Days' prior irrevocable notice of such election, specifying
the amount to be so converted and the initial Interest Period relating thereto,
provided that any such conversion of ABR Loans to Eurodollar Loans shall only be
made on a Business Day and any such conversion of Eurodollar Loans to new
Eurodollar Loans shall only be made on the last day of the Interest Period
applicable to the Eurodollar Loans which are to be converted to such new
Eurodollar Loans. The Administrative Agent shall promptly provide the Lenders
with notice of any such election. Loans may be converted pursuant to this
section 2.8(a) in whole or in part, provided that conversions of ABR Loans to
Eurodollar Loans, or Eurodollar Loans to new Eurodollar Loans having the same
Interest Period, shall be in an aggregate principal amount of $2,000,000 or such
amount plus a whole multiple of $250,000.
(b) Notwithstanding anything in this Agreement to the contrary, upon
the occurrence and during the continuance of a Default or Event of Default, the
Borrower shall have no right to elect to convert any ABR Loan to a Eurodollar
Loan or to convert any Eurodollar Loan to a new Eurodollar Loan. In such event,
such ABR Loan shall be automatically continued as an ABR Loan or such Eurodollar
Loan shall be automatically converted to an ABR Loan on the last day of the
Interest Period applicable to such Eurodollar Loan. If a Default or an Event of
Default shall have occurred and be continuing, the Administrative Agent shall,
at the request of the Required Lenders, notify the Borrower (by telephone or
otherwise) that all, or such lesser amount as the Administrative Agent and the
Required Lenders shall designate, of the outstanding Eurodollar Loans, if any,
shall be automatically converted to ABR Loans, in which event such Eurodollar
Loans of each Lender, at the option of such Lender, shall be automatically
converted to ABR Loans on the date such notice is given.
(c) Each such conversion shall be effected by each Lender by applying
the proceeds of the new ABR Loan or Eurodollar Loan, as the case may be, to the
Loan (or portion thereof) being converted (it being understood that such
conversion shall not constitute a borrowing for purposes of sections 4 or 5).
(d) Notwithstanding any other provision of this Agreement:
(i) If the Borrower shall have failed to elect a Eurodollar Loan
under sections 2.3 or 2.8, as the case may be, in connection with any borrowing
of new Loans or expiration of an Interest Period with respect to any existing
Eurodollar Loan, the amount of the Loans subject to such borrowing or such
existing Eurodollar
-23-
Loan shall thereafter be an ABR Loan until such time, if any, as the Borrower
shall elect a new Eurodollar Loan pursuant to section 2.8,
(ii) The Borrower shall not be permitted to select any Eurodollar
Loan the Interest Period in respect of which ends later than the Maturity Date,
(iii) When electing a Eurodollar Loan, the Borrower shall select
an Interest Period such that, on each date that a mandatory principal payment is
required to be made pursuant to section 2.5(b) in connection with a RC
Commitment reduction pursuant to section 2.4(b), the outstanding principal
amount of all Loans which are ABR Loans, when added to the aggregate principal
amount of all Loans which are Eurodollar Loans the Interest Period in respect of
which shall end on such date, shall equal or exceed the aggregate principal
amount of the Loans required to be paid on such date, and
(iv) The Borrower shall not be permitted to have more than five
Interest Periods with respect to outstanding Eurodollar Loans at any one time.
2.9 Indemnification for Loss.
------------------------
Notwithstanding anything contained herein to the contrary, if the
Borrower shall fail to borrow or convert a Loan after it shall have given notice
to do so in which it shall have requested a Eurodollar Loan pursuant to section
2.3 or 2.8, as the case may be, or if a Eurodollar Loan shall be terminated for
any reason prior to the last day of the Interest Period applicable thereto, or
if any repayment or prepayment of the principal amount of a Eurodollar Loan is
made for any reason on a date which is prior to the last day of the Interest
Period applicable thereto, the Borrower agrees to indemnify each Lender against,
and to pay on demand directly to such Lender, any loss or expense suffered by
such Lender as a result of such failure to borrow or convert, or such
termination, repayment or prepayment, including without limitation, an amount
equal to:
A x (B-C) x D
---
360
in which:
"A" equals such Lender's pro rata share of the Affected Principal Amount;
"B" equals the Eurodollar Rate (expressed as a decimal) applicable to such
Eurodollar Loan;
"C" equals the Eurodollar Rate (expressed as a decimal) which would be
applicable to a Eurodollar Loan made on or about the date of such failure to
borrow or convert, or such termination, repayment or prepayment, in an amount
equal approximately to such Lender's pro rata share of the Affected Principal
Amount and having an Interest Period equal approximately to the Remaining
Interest Period with respect thereto; and
"D" equals the number of days during such Remaining Interest Period;
-24-
and any other out-of-pocket loss, cost or expense (including any internal
processing charge customarily charged by such Lender) suffered by such Lender in
liquidating or employing deposits acquired to fund or maintain the funding of
the Affected Principal Amount, or redeploying funds prepaid or repaid, in
amounts which correspond to such Lender's pro rata share of such proposed
borrowing, conversion, terminated Eurodollar Loan, prepayment or repayment.
2.10 Reimbursement for Costs.
-----------------------
The Borrower hereby agrees to reimburse each Lender and the Issuing
Bank on demand for its reasonable costs (excluding general administrative and
overhead costs) directly attributable to its compliance with this Agreement
during the term hereof with all applicable future laws, executive orders, and
regulations of the governments of the United States and the United Kingdom, and
of any other applicable government, and of any regulatory or administrative
agency thereof (including, without limitation, the reserve requirements
established by the Board of Governors of the Federal Reserve System under
Regulation D), or any change in existing or future applicable laws, executive
orders and regulations and in the interpretations thereof which impose, modify
or deem applicable any reserve, asset, special deposit or special assessment
requirements on deposits obtained in the interbank eurodollar market, or which
subject any Lender or the Issuing Bank to any tax (documentary, stamp or
otherwise) with respect to any Loan Document or Letter of Credit, or change the
basis of taxation of payments to any Lender or the Issuing Bank, of principal,
interest, fees or other amounts payable under any Loan Document or Letter of
Credit (except for any tax, or changes in the rate of tax, on its income or
receipts (including franchise taxes on or based upon such income or receipts)
imposed by the United States or any other jurisdiction). Each such Lender and
the Issuing Bank agrees to provide the Borrower with notice of any law,
executive order or regulation, or change in the interpretation thereof, which
would require the Borrower to indemnify such Lender or the Issuing Bank under
this section 2.10 promptly upon it obtaining actual knowledge thereof and
determining that it intends to require the Borrower to reimburse it pursuant to
this section 2.10 for any costs resulting therefrom. The cost to each Lender in
complying with laws, executive orders or regulations which impose, modify or
deem applicable any reserve, asset, special deposit or special assessment
requirements on deposits obtained in the market for eurocurrency loans shall be
computed by determining the amount by which such requirements effectively
increase such Lender's cost of making and maintaining its Eurodollar Loans and
by computing the additional amount which would have been owing to such Lender
hereunder if such effective increase had been added to the Eurodollar Rate for
purposes of determining the applicable Eurodollar Rate during the period or
applicable portion thereof in question. Each Lender and the Issuing Bank may
make multiple requests for compensation under this section 2.10.
2.11 Illegality of Funding.
---------------------
Notwithstanding anything contained herein to the contrary, if any law,
regulation, treaty or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender to make or
maintain any Eurodollar Loan as contemplated by this Agreement, (i) the
commitment of such Lender to make Eurodollar Loans or convert ABR Loans to
Eurodollar Loans, as the case may be, shall forthwith be suspended and (ii) such
Lender's then outstanding Eurodollar Loans affected thereby, if any, shall be
converted automatically to ABR Loans on the last day of the then
-25-
current Interest Period applicable thereto or at such earlier time as may be
required. If the commitment of any Lender with respect to Eurodollar Loans is
suspended pursuant to this section 2.11 and such Lender shall notify the
Administrative Agent and the Borrower that it is once again legal for such
Lender to make or maintain Eurodollar Loans, such Lender's commitment to make or
maintain Eurodollar Loans shall be reinstated.
2.12 Option to Fund.
--------------
Each Lender has indicated that, if the Borrower requests a Eurodollar
Loan, such Lender may wish to purchase one or more deposits in order to fund or
maintain its funding of its pro rata share of such Loan during the Interest
Period with respect thereto; it being understood that the provisions of this
Agreement relating to such funding are included only for the purpose of
determining the rate of interest to be paid on such Loan and any amounts owing
under sections 2.9, 2.10, 2.11 and 2.15. Each Lender shall be entitled to fund
and maintain its funding of all or any part of its Eurodollar Loans in any
manner it sees fit, but all such determinations hereunder shall be made as if
each Lender had actually funded and maintained its Eurodollar Loans during the
applicable Interest Period through the purchase of deposits in an amount equal
to its pro rata share of the Eurodollar Loans having a maturity corresponding to
such Interest Period. Any Lender may fund its pro rata share of the Eurodollar
Loans from any branch or office of such Lender as such Lender may choose from
time to time, subject to section 2.17.
2.13 Taxes; Net Payments.
-------------------
(a) All payments made by the Borrower under the Loan Documents shall
be made free and clear of, and without reduction for or on account of, any Taxes
required by law to be withheld from any amounts payable under the Loan
Documents. In the event that the Borrower is prohibited by law from making such
payments free of deductions or withholdings, then the Borrower shall pay such
additional amounts to the Administrative Agent, for the benefit of the Issuing
Bank and the Lenders, as may be necessary in order that the actual amounts
received by the Issuing Bank and the Lenders in respect of interest and any
other amounts payable under the Loan Documents after deduction or withholding
(and after payment of any additional Taxes or other charges due as a consequence
of the payment of such additional amounts) shall equal the amount that would
have been received if such deduction or withholding were not required. In the
event that any such deduction or withholding can be reduced or nullified as a
result of the application of any relevant double taxation convention, the
Lenders, the Issuing Bank and the Administrative Agent will, at the expense of
the Borrower, cooperate with the Borrower in making application to the relevant
taxing authorities seeking to obtain such reduction or nullification, provided
that the Lenders, the Issuing Bank and the Administrative Agent shall have no
obligation to (i) engage in any litigation, hearing or proceeding with respect
thereto or (ii) disclose any tax return or other confidential information. If
the Borrower shall make any payment under this section or shall make any
deduction or withholding from amounts paid under any Loan Document, the Borrower
shall forthwith forward to the Administrative Agent original or certified copies
of official receipts or other evidence acceptable to the Administrative Agent
establishing each such payment, deduction or withholding, as the case may be,
and the Administrative Agent in turn shall distribute copies thereof to the
Issuing Bank and each Lender. In the event that the Issuing Bank or any Lender
determines that it received a refund or credit for Taxes paid by the Borrower
under this section, the Issuing Bank or such Lender, as the case may be, shall
promptly notify the Administrative Agent and the Borrower of such fact and shall
remit to
-26-
the Borrower the amount of such refund or credit applicable to the payments made
by the Borrower in respect of the Issuing Bank or such Lender, as the case may
be, under this section.
(b) So long as it is lawfully able to do so, each Lender not
incorporated under the laws of the United States or any State thereof shall
deliver to the Administrative Agent and the Borrower such certificates,
documents or other evidence as the Administrative Agent or the Borrower may
reasonably require from time to time as are necessary to establish that such
Lender is not subject to withholding under Section 1441, 1442 or 3406 of the
Code or as may be necessary to establish, under any law imposing upon the
Borrower, hereafter, an obligation to withhold any portion of the payments made
by the Borrower under the Loan Documents, that payments to the Administrative
Agent on behalf of such Lender are not subject to withholding. Notwithstanding
any provision herein to the contrary, the Borrower shall have no obligation to
pay to the Issuing Bank or any Lender any amount that the Borrower is liable to
withhold due to the failure of the Issuing Bank or such Lender, as the case may
be, to file any statement of exemption required by the Code.
2.14 Capital Adequacy.
----------------
If the amount of capital required or expected to be maintained by any
Lender, the Issuing Bank or any Person directly or indirectly owning or
controlling such Lender or the Issuing Bank (each a "Control Person"), shall be
--------------
affected by
(a) the introduction or phasing in of any law, rule or regulation
after the date hereof,
(b) any change after the date hereof in the interpretation of any
existing law, rule or regulation by any central bank or United
States or foreign Governmental Authority charged with the
administration thereof, or
(c) compliance by such Lender, the Issuing Bank or such Control Person
with any directive, guideline or request from any central bank or
United States or foreign Governmental Authority (whether or not
having the force of law) promulgated or made after the date
hereof,
and such Person shall have determined that such introduction, phasing in, change
or compliance shall have had or will thereafter have the effect of reducing (i)
the rate of return on its capital, or (ii) the asset value to such Lender, the
Issuing Bank or such Control Person of the Loans made or maintained by such
Lender, the Letters of Credit issued or maintained by the Issuing Bank or the
Reimbursement Obligations or any participation therein owed to the Issuing Bank
or any Lender to a level below that which such Lender, the Issuing Bank or such
Control Person could have achieved or would thereafter be able to achieve but
for such introduction, phasing in, change or compliance (after taking into
account such Lender's, the Issuing Bank's or such Control Person's policies
regarding capital), in either case by an amount which it deems material, then,
within ten days after demand by such Lender or the Issuing Bank, the Borrower
shall pay to such Lender, the Issuing Bank or such Control Person, as the case
may be, such additional amount or amounts as shall be sufficient to compensate
such Lender, the Issuing Bank or such Control Person, as the case may be, for
such reduction on an after-tax basis.
-27-
2.15 Substituted Interest Rate.
-------------------------
In the event that (i) the Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the Borrower) that by
reason of circumstances affecting the interbank eurodollar market either
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
applicable pursuant to section 2.6 or (ii) in the event that any Lender shall
have notified the Administrative Agent that it has determined (which
determination shall be conclusive and binding on the Borrower) that the
applicable Eurodollar Rate will not adequately and fairly reflect the cost to
such Lender of maintaining or funding loans bearing interest based on such
Eurodollar Rate, with respect to a proposed Loan that the Borrower has requested
be made as a Eurodollar Loan, or a Eurodollar Loan that will result from the
requested conversion of any Loan into a Eurodollar Loan (any such Loan being
herein called an "Affected Loan"), the Administrative Agent shall promptly
-------------
notify the Borrower and the Lenders (by telephone or otherwise) of such
determination, confirmed in writing, on or prior to the requested Borrowing Date
for such Affected Loan or the requested conversion date of such Loan. If the
Administrative Agent shall give such notice, (a) any requested Affected Loan
shall be made as an ABR Loan, (b) any Loan that was to have been converted to an
Affected Loan shall be converted to or continued as an ABR Loan and (c) any
outstanding Affected Loan shall be converted, on the last day of the then
current Interest Period with respect thereto, to an ABR Loan. Until any such
notice under clause (i) of this section 2.15 has been withdrawn by the
Administrative Agent (by notice to the Borrower promptly upon the Administrative
Agent's having determined that such circumstances affecting the interbank
eurodollar market no longer exist and that adequate and reasonable means do
exist for determining the Eurodollar Rate pursuant to section 2.6) no further
Eurodollar Loans shall be made by the Lenders nor shall the Borrower have the
right to convert any Loans to Eurodollar Loans. Until any such notice under
clause (ii) of this section 2.15 has been withdrawn by the Administrative Agent
(by notice to the Borrower promptly upon the Administrative Agent's having been
notified by such Lender that circumstances no longer render any Loan an Affected
Loan), no further Eurodollar Loans shall be required to be made by such Lender
nor shall the Borrower have the right to convert any Loan of such Lender to a
Eurodollar Loan of such Lender.
2.16 Transaction Record.
------------------
The Administrative Agent's records regarding the amount of each Loan,
each payment by the Borrower of principal and interest on the Loans, each Letter
of Credit and other information relating to the Loans and Letters of Credit
shall be presumed correct absent manifest error.
2.17 Certificates of Payment and Reimbursement; Other Provisions Regarding
---------------------------------------------------------------------
Yield Protection.
- ----------------
(a) In connection with any request by a Lender or the Issuing Bank for
payment or reimbursement pursuant to section 2.9, 2.10, 2.11, 2.14 or 2.15, such
Lender or the Issuing Bank, as the case may be, shall provide the Borrower with
a certificate, signed by an officer, setting forth a description, in reasonable
detail, of any such payment or reimbursement. Each determination by a Lender or
the Issuing Bank of such amount or amounts owed by the Borrower to it under any
such section shall be presumed correct absent manifest error, and shall be made
without duplication as to any other amounts owing by the Borrower to it under
section 2.9, 2.10, 2.11, 2.14 or 2.15.
-28-
(b) In the event that any amount is owed by the Borrower to any Lender
pursuant to section 2.9, 2.10, 2.11, 2.14 or 2.15 and an assignment by such
Lender of its rights and a delegation and transfer of its obligations hereunder
to another office or branch of such Lender would cause such amount to cease to
be owed by the Borrower, then such Lender shall make reasonable efforts (which
shall not in any event require such Lender to incur a loss or otherwise suffer
any disadvantage) to make an assignment of its rights and a delegation and
transfer of its obligations hereunder to such other office or branch, so long as
such assignment and delegation will not cause other amounts to be owed by the
Borrower under section 2.9, 2.10, 2.11, 2.14 or 2.15 and so long as the Lender
shall be permitted under applicable law to make and maintain Eurodollar Loans
after giving effect to such assignment and delegation.
(c) The obligations of the Borrower under sections 2.9, 2.10, 2.11,
2.14 and 2.15 shall survive any termination of this Agreement, the expiration of
the RC Commitments and the payment of all indebtedness of the Borrower hereunder
and under the Loan Documents.
2.18 Letter of Credit Sub-Facility.
-----------------------------
(a) Subject to the terms and conditions hereof and the payment by the
Borrower to the Issuing Bank of such fees as the Borrower and the Issuing Bank
shall have agreed in writing, the Issuing Bank agrees, in reliance on the
agreement of the other Lenders set forth in section 2.19, to issue standby
letters of credit (each a "Letter of Credit" and, collectively, the "Letters of
---------------- ----------
Credit") during the RC Commitment Period for the account of the Borrower,
- ------
provided that immediately after the issuance of each Letter of Credit (i) the
Letter of Credit Exposure of all Lenders shall not exceed the Letter of Credit
Commitment, and (ii) the sum of the aggregate outstanding RC Loans and the
Letter of Credit Exposure of all Lenders shall not exceed the RC Commitments.
Each Letter of Credit shall have an expiration date which shall be not later
than the earlier to occur of one year from the date of issuance or last
extension thereof or one Business Day prior to the RC Commitment Termination
Date. No Letter of Credit shall be issued if the Administrative Agent, or any
Lender by notice to the Administrative Agent and the Issuing Bank no later than
3:00 P.M. one Business Day prior to the requested date of issuance of such
Letter of Credit, shall have determined that the applicable conditions set forth
in Section 5 have not been satisfied.
(b) Each Letter of Credit shall be issued for the account of the
Borrower. The Borrower shall give the Administrative Agent and the Issuing Bank
a Letter of Credit Request for the issuance of each Letter of Credit no later
than 1:00 P.M at least three Business Days prior to the requested date of
issuance. Such Letter of Credit Request shall be accompanied by the Issuing
Bank's standard Application and Agreement for Standby Letter of Credit (each a
"Reimbursement Agreement") executed by the Borrower, and shall specify (i) the
- ------------------------
beneficiary of such Letter of Credit and the obligations of the Borrower in
respect of which such Letter of Credit is to be issued, (ii) the Borrower's
proposal as to the conditions under which a drawing may be made under such
Letter of Credit and the documentation to be required in respect thereof, (iii)
the maximum amount to be available under such Letter of Credit and (iv) the
requested date of issuance. Upon receipt of such Letter of Credit Request from
the Borrower, the Administrative Agent shall promptly notify each Lender
thereof. The Issuing Bank shall, on the proposed date of issuance and subject to
the other terms and conditions of this Agreement, issue the requested Letter of
Credit. Each Letter of Credit shall be in a minimum amount of
-29-
$1,000,000 and be in form and substance reasonably satisfactory to the Issuing
Bank, with such provisions with respect to the conditions under which a drawing
may be made thereunder and the documentation required in respect of such drawing
as the Issuing Bank shall reasonably require. Each Letter of Credit shall be
used solely for the purposes described therein.
(c) Each payment by the Issuing Bank of a draft drawn under a Letter
of Credit shall give rise to the obligation of the Borrower to immediately
reimburse the Issuing Bank for the amount thereof. The Issuing Bank shall
promptly notify the Borrower of such payment by the Issuing Bank of a draft
drawn under a Letter of Credit, but any failure to so notify shall not in any
manner affect the obligation of the Borrower to make reimbursement when due. In
lieu of such notice, if the Borrower has not made reimbursement prior to the end
of the Business Day when due, the Borrower hereby irrevocably authorizes the
Issuing Bank to deduct the amount of any such reimbursement from any account(s)
of the Borrower maintained with the Issuing Bank, upon which the Issuing Bank
shall apply the amount of such deduction to such reimbursement. If all or any
portion of any reimbursement obligation in respect of a Letter of Credit shall
not be paid when due (whether at the stated maturity thereof, by acceleration or
otherwise), such overdue amount shall bear interest, payable upon demand, at a
rate per annum equal to the Alternate Base Rate plus the Applicable Margin
applicable to ABR Loans plus 2% (calculated in the same manner as ABR Loans),
from the date of such nonpayment until paid in full (whether before or after the
entry of a judgment thereon).
2.19 Letter of Credit Participation
------------------------------
(a) Each Lender hereby unconditionally and irrevocably, severally (and
not jointly) takes an undivided participating interest in the obligations of the
Issuing Bank under and in connection with each Letter of Credit in an amount
equal to such Lender's RC Commitment Percentage of the amount of such Letter of
Credit. Each Lender shall be liable to the Issuing Bank for its RC Commitment
Percentage of the unreimbursed amount of any draft drawn and honored under each
Letter of Credit. Each Lender shall also be liable for an amount equal to the
product of its RC Commitment Percentage and any amounts paid by the Borrower
pursuant to Sections 2.18 and 2.20 that are subsequently rescinded or avoided,
or must otherwise be restored or returned. Such liabilities shall be
unconditional and without regard to the occurrence of any Default or Event of
Default or the compliance by the Borrower with any of its obligations under the
Loan Documents.
(b) The Issuing Bank shall promptly notify the Administrative Agent,
and the Administrative Agent shall promptly notify each Lender (which notice
shall be promptly confirmed in writing), of the date and the amount of each
draft paid under each Letter of Credit with respect to which full reimbursement
payment shall not have been made by the Borrower as provided in Section 2.18(c),
and forthwith upon receipt of such notice, such Lender shall promptly make
available to the Administrative Agent for the account of the Issuing Bank its RC
Commitment Percentage of the amount of such unreimbursed draft at the office of
the Administrative Agent specified in Section 11.2 in lawful money of the United
States and in immediately available funds. The Administrative Agent shall
distribute the payments made by each Lender pursuant to the immediately
preceding sentence to the Issuing Bank promptly upon receipt thereof in like
funds as received. Each Lender shall indemnify and hold harmless the
Administrative Agent and the Issuing Bank from and against any and all losses,
liabilities (including liabilities for penalties), actions, suits, judgments,
demands, costs and expenses (including, without
-30-
limitation, reasonable attorneys' fees and expenses) resulting from any failure
on the part of such Lender to provide, or from any delay in providing, the
Administrative Agent with such Lender's RC Commitment Percentage of the amount
of any payment made by the Issuing Bank under a Letter of Credit in accordance
with this subsection (b) above (except in respect of losses, liabilities or
other obligations suffered by the Administrative Agent or the Issuing Bank, as
the case may be, resulting from the gross negligence or willful misconduct of
the Administrative Agent or the Issuing Bank, as the case may be). If a Lender
does not make available to the Administrative Agent when due such Lender's RC
Commitment Percentage of any unreimbursed payment made by the Issuing Bank under
a Letter of Credit, such Lender shall be required to pay interest to the
Administrative Agent for the account of the Issuing Bank on such Lender's RC
Commitment Percentage of such payment at a rate of interest per annum equal to
(i) from the date such Lender should have made such amount available until the
third day therefrom, the Federal Funds Effective Rate, and (ii) thereafter, the
Federal Funds Effective Rate plus 2%, in each case payable upon demand by the
Issuing Bank. The Administrative Agent shall distribute such interest payments
to the Issuing Bank upon receipt thereof in like funds as received.
(c) Whenever the Administrative Agent is reimbursed by the Borrower,
for the account of the Issuing Bank, for any payment under a Letter of Credit
and such payment relates to an amount previously paid by a Lender in respect of
its RC Commitment Percentage of the amount of such payment under such Letter of
Credit, the Administrative Agent (or the Issuing Bank, if such payment by a
Lender was paid by the Administrative Agent to the Issuing Bank) will promptly
pay over such payment to such Lender.
2.20 Absolute Obligation with respect to Letter of Credit Payments
-------------------------------------------------------------
The Borrower's obligation to reimburse the Issuing Bank for each
payment under or in respect of each Letter of Credit shall be absolute and
unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower may have or have had
against the beneficiary of such Letter of Credit, the Administrative Agent, the
Issuing Bank, any Lender or any other Person, including, without limitation, any
defense based on the failure of any drawing to conform to the terms of such
Letter of Credit, any drawing document proving to be forged, fraudulent or
invalid, or the legality, validity, regularity or enforceability of such Letter
of Credit, provided, however, that, with respect to any Letter of Credit, the
foregoing shall not relieve the Issuing Bank of any liability it may have to the
Borrower for any actual damages sustained by the Borrower arising from a
wrongful payment (or failure to pay) under such Letter of Credit made as a
result of the Issuing Bank's gross negligence or willful misconduct.
3. FEES; PAYMENTS
--------------
3.1 Fees.
----
(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a fee (the "Commitment Fee") during the RC Commitment
--------------
Period, payable quarterly in arrears on the last day of each March, June,
September and December of each year, commencing on the first such date following
the Effective Date, and on the RC Commitment Termination Date, on the average
daily excess of (i) the RC
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Commitment of such Lender, over (ii) the aggregate outstanding principal balance
of the RC Loans of such Lender, at a rate per annum equal to (a) at all times
when the Total Leverage Ratio is greater than or equal to 4.50:1.00, 0.500% and
(b) at all times when the Total Leverage Ratio is less than 4.50:1.00, 0.375%.
The Commitment Fee shall be computed on the basis of a 360-day year for the
actual number of days elapsed.
(b) Solely for purposes of calculating the Commitment Fee, changes in
the Total Leverage Ratio, as evidenced by a Compliance Certificate delivered to
the Administrative Agent pursuant to section 7.1(d) or a Borrowing Request or
Letter of Credit Request delivered to the Administrative Agent pursuant to
section 5.2(c) evidencing such a change, shall become effective upon (i) in the
case of the delivery of a Compliance Certificate, the first Business Day
following the delivery of (x) such Compliance Certificate and (y) the applicable
financial statements required to be delivered pursuant to section 7.1(a) or (c),
as the case may be, and (ii) in the case of the delivery of a Borrowing Request
or Letter of Credit Request, the Borrowing Date applicable thereto. Solely for
purposes of calculating the Commitment Fee, if the Borrower shall fail to
deliver a Compliance Certificate within 60 days after the end of each of the
first three fiscal quarters, or within 120 days after the end of the last fiscal
quarter, of each fiscal year (each a "certificate delivery date"), the Total
-------------------------
Leverage Ratio from and including such certificate delivery date to the date of
delivery by the Borrower to the Administrative Agent of such Compliance
Certificate shall be conclusively presumed to be greater than 4.50:1.00.
(c) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a fee (the "Letter of Credit Fee") with respect to the
--------------------
Letters of Credit during the period commencing on the Effective Date and ending
on the RC Commitment Termination Date or, if later, the date when the Letter of
Credit Exposure of all Lenders is $0, payable quarterly in arrears on the last
day of each March, June, September and December of each year, commencing on the
first such date following the Effective Date, on the RC Commitment Termination
Date and on the last date of such period, on such Lender's RC Commitment
Percentage of the average daily aggregate amount which may be drawn under the
Letters of Credit during such period (whether or not the conditions for drawing
thereunder have or may be satisfied) multiplied by a rate per annum equal to the
Applicable Margin for Eurodollar Loans during such period. The Letter of Credit
Fee shall be computed on the basis of a 360-day year for the actual number of
days elapsed.
3.2 Pro Rata Treatment and Application of Payments.
----------------------------------------------
All payments (including prepayments) made by the Borrower to the
Administrative Agent on account of principal of or interest on the RC Loans
shall be made pro rata according to the outstanding principal amount of each
Lender's RC Loans. All payments by the Borrower shall be made without set-off
or counterclaim and shall be made prior to 1:00 P.M. on the date such payment is
due, to the Administrative Agent for the account of the Lenders, at the
Administrative Agent's office specified in section 11.2, in each case in lawful
money of the United States of America and in immediately available funds, and,
as between the Borrower and the Lenders, any payment by the Borrower to the
Administrative Agent for the account of the Lenders shall be deemed to be
payment by the Borrower to the Lenders. The failure of the Borrower to make any
such payment by 1:00 P.M. on such due date shall not constitute a Default or
Event of Default hereunder, provided that such payment is made on such due date,
but any such payment
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received by the Administrative Agent on any Business Day after 1:00 P.M. shall
be deemed to have been received on the immediately succeeding Business Day for
the purpose of calculating any interest payable in respect thereof. The
Administrative Agent agrees promptly to notify the Borrower if it shall receive
any such payment after 1:00 P.M. on the due date hereof, provided that the
failure of the Administrative Agent to give such prompt notice shall in no way
affect the Borrower's obligation to make any payment hereunder on the date such
payment is due. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. Unless otherwise set
forth in the definition of "Interest Period", if any payment hereunder or on any
Note becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate or rates during such extension.
4. REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Administrative Agent, the Issuing Bank and the
Lenders to enter into this Agreement and to make Loans, and in order to induce
the Issuing Bank to issue Letters of Credit and the Lenders to participate
therein, the Borrower hereby makes the following representations and warranties
to the Administrative Agent, the Issuing Bank and to each Lender:
4.1 Subsidiaries.
------------
The Borrower has only the Subsidiaries set forth in Schedule 4.1.
Except as set forth in Schedule 4.1, the shares of each corporate Subsidiary
owned by the Borrower are duly authorized, validly issued, fully paid and
nonassessable. The shares of each Subsidiary are owned free and clear of any
Liens, except (i) Liens in favor of the Administrative Agent and the Lenders
pursuant to the Collateral Documents and (ii) Permitted Liens.
4.2 Corporate Existence and Power.
-----------------------------
The Borrower and each Subsidiary is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
has all requisite corporate power and authority to own its Property and to carry
on its business as now conducted, and is in good standing and authorized to do
business in each jurisdiction in which the failure to be so authorized could
reasonably be expected to have a Material Adverse Effect.
4.3 Authority.
---------
The Borrower and each other Loan Party has full power and authority to
enter into, execute, deliver and carry out the terms of the Loan Documents to
which it is a party, to make the borrowings contemplated hereby, to execute,
deliver and carry out the terms of the Notes and to incur the obligations
provided for herein and therein, all of which have been duly authorized by all
proper and necessary action and are in full compliance with its certificate of
incorporation and by-laws.
-33-
4.4 Governmental Authority Approvals.
--------------------------------
No consent, authorizations or approval of, filing with, notice to, or
exemption by, stockholders, any Governmental Authority or any other Person
(except for those which have been obtained, made or given and those which will
be obtained, made or given prior to the Effective Date) is required to
authorize, or is required in connection with the execution, delivery and
performance of the Loan Documents, or is required as a condition to the validity
or, except as expressly set forth in the Collateral Documents with respect to
the FCC, the enforceability of the Loan Documents. Except as set forth in the
preceding sentence, no provision of any applicable statute, law (including,
without limitation, any applicable usury or similar law), rule or regulation of
any Governmental Authority will prevent the execution, delivery or performance
of, or affect the validity of, the Loan Documents.
4.5 Binding Agreement.
-----------------
The Loan Documents constitute the valid and legally binding
obligations of the Borrower and each other Loan Party to which it is a party,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally.
4.6 Litigation.
----------
Except as set forth in Schedule 4.6, there are no actions, suits,
arbitration proceedings or claims (whether or not purportedly on behalf of the
Borrower or any Subsidiary) pending or, to the knowledge of the Borrower,
threatened against the Borrower or any Subsidiary, or maintained by the Borrower
or any Subsidiary, at law or in equity, before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect. There are no
proceedings pending or, to the knowledge of the Borrower, threatened against the
Borrower or any Subsidiary which call into question the validity or
enforceability of any of the Loan Documents.
4.7 No Conflicting Agreements.
-------------------------
Except as set forth in Schedule 4.7, neither the Borrower nor any
Subsidiary is in default under any mortgage, indenture, contract, agreement,
judgment, decree or order to which it is a party or by which it or any of its
Property is bound, which defaults, taken as a whole, could reasonably be
expected to have a Material Adverse Effect. The execution, delivery or carrying
out of the terms of the Loan Documents will not constitute a default under,
conflict with, require any consent under (other than consents which have been
obtained) or result in the creation or imposition of, or obligation to create,
any Lien upon the Property of the Borrower or any Subsidiary pursuant to the
terms of any such mortgage, indenture, contract, agreement, judgment, decree or
order, which defaults, conflicts and consents, if not obtained, taken as a
whole, could reasonably be expected to have a Material Adverse Effect.
-34-
4.8 Taxes.
-----
Except as set forth in Schedule 4.8, the Borrower and each Subsidiary
has filed or caused to be filed all tax returns required to be filed and has
paid, or has made adequate provision for the payment of, all Taxes shown to be
due and payable on said returns or in any assessments made against it which
would be material to the Borrower or any Subsidiary, and no tax Liens (other
than Permitted Liens) have been filed. Except as set forth in Schedule 4.8, the
charges, accruals and reserves on the books of the Borrower and each Subsidiary
with respect to all federal, state, local and other Taxes are, to the best
knowledge of the Borrower, adequate, and the Borrower knows of no unpaid
assessment which is due and payable against it or any Subsidiary or any claims
being asserted which could reasonably be expected to have a Material Adverse
Effect, except such thereof as are being contested in good faith and by
appropriate proceedings diligently conducted, and for which adequate reserves
have been set aside in accordance with GAAP.
4.9 Compliance with Applicable Laws.
-------------------------------
Neither the Borrower nor any Subsidiary is in default with respect to
any judgment, order, writ, injunction, decree or decision of any Governmental
Authority which default could reasonably be expected to have a Material Adverse
Effect. The Borrower and each Subsidiary is complying in all material respects
with all applicable statutes and regulations, including ERISA, of all
Governmental Authorities, a violation of which could reasonably be expected to
have a Material Adverse Effect.
4.10 Governmental Regulations.
------------------------
Neither the Borrower nor any Subsidiary is subject to regulation under
the Public Utility Holding Company Borrower Act of 1935, the Federal Power Act
or the Investment Company Act of 1940, and neither the Borrower nor any
Subsidiary is subject to any statute or regulation which prohibits or restricts
the incurrence of Indebtedness under the Loan Documents, including, without
limitation, statutes or regulations relative to common or contract carriers or
to the sale of electricity, gas, steam, water, telephone, telegraph or other
public utility services.
4.11 Property; Broadcasting Business.
-------------------------------
(a) The Borrower and each Subsidiary has good and, except with respect
to FCC licenses which cannot be transferred without the consent of the
applicable Governmental Authority, marketable title to all of its Property,
title to which is material to the Borrower and the Subsidiaries taken as a
whole, subject to no Liens, except Liens in favor of the Administrative Agent
and the Lenders pursuant to the Collateral Documents and Permitted Liens.
(b) Schedule 4.11(b) sets forth a summary description of all real
property owned by the Borrower and its Subsidiaries, and of all real property
leasehold estates held by the Borrower and its Subsidiaries, which summary is
accurate and complete in all material respects. Except as set forth in Schedule
4.11(b), the leases creating such real property leasehold estates are in full
force and effect and create a valid leasehold estate on the terms of each such
lease, neither the Borrower nor any of its Subsidiaries is in default or breach
of any thereof and, to the best knowledge of the Borrower, no other party
thereto is in default or breach thereof.
-35-
(c) The Borrower and the Subsidiaries are the registered holders of
all radio licenses duly issued by the FCC in respect of all Broadcasting
Stations owned and operated by the Borrower and each Subsidiary. Such licenses
constitute all of the authorizations by the FCC or any other Governmental
Authority necessary for the operation of the business of the Borrower and each
Subsidiary substantially in the manner presently being conducted by it, and such
licenses are validly issued and in full force and effect, unimpaired by any act
or omission by the Borrower or such Subsidiary. To the best of the Borrower's
knowledge, except as set forth in Schedule 4.11(c), neither the Borrower nor any
Subsidiary is a party to any investigation, notice of violation, order or
complaint issued by or before the FCC. Except as set forth in Schedule 4.11(c),
there are no proceedings by or before the FCC, which could in any manner
materially threaten or adversely affect the validity of any of such licenses.
Neither the Borrower nor any Subsidiary has knowledge of a threat of any
investigation, notice of violation, order, complaint or proceeding before the
FCC, and has no reason to believe that any of such licenses will not be renewed
in the ordinary course.
4.12 Federal Reserve Regulations; Use of Proceeds.
--------------------------------------------
Neither the Borrower nor any Subsidiary is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock. No part of the proceeds of
the Loans or Letters of Credit will be used, directly or indirectly, to purchase
or carry any Margin Stock or for a purpose which violates any law, rule or
regulation of any Governmental Authority, including without limitation the
provisions of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System, as amended.
4.13 No Misrepresentation.
--------------------
No representation or warranty contained herein and no certificate or
report furnished or to be furnished by the Borrower or any Subsidiary in
connection with the transactions contemplated hereby, contains or will contain a
misstatement of material fact, or, to the best knowledge of the Borrower or any
Subsidiary omits or will omit to state a material fact required to be stated in
order to make the statements herein or therein contained not misleading in the
light of the circumstances under which made.
4.14 Plans.
-----
The Borrower and each Subsidiary have only the Plans listed in
Schedule 4.14. Each Single Employer Plan and, to the best knowledge of the
Borrower, each Multiemployer Plan is in compliance in all material respects with
the applicable provisions of ERISA and the Code, and the Borrower and each
Subsidiary have filed all reports required to be filed by them under ERISA and
the Code with respect to each such Plan. The Borrower and each Subsidiary have
met all material requirements imposed by ERISA and the Code with respect to the
funding of all Plans, including Multiemployer Plans. Since the effective date
of ERISA, there have not been, nor are there now existing, any events or
conditions which would permit any Single Employer Plan or, to the best knowledge
of the Borrower, Multiemployer Plan to be terminated under circumstances which
would cause the Lien provided under Section 4068 of ERISA to attach to the
Property of the Borrower or any Subsidiary. Since the effective date of ERISA,
no Reportable Event which may constitute grounds for the termination of any
Single Employer Plan or, to the
-36-
best knowledge of the Borrower, Multiemployer Plan under Title IV of ERISA has
occurred and no Single Employer Plan or Multiemployer Plan has been terminated
in whole or in part.
4.15 FCC Matters.
-----------
The Borrower and each Subsidiary (i) have duly and timely filed all
filings which are required to be filed by the Borrower and each Subsidiary under
the Communications Act and the rules and regulations of the FCC, the failure to
file of which could reasonably be expected to have a Material Adverse Effect,
and (ii) are in all material respects in compliance with the Communications Act,
including, without limitation, the rules and regulations of the FCC relating to
the transmission of radio signals.
4.16 Burdensome Obligations.
----------------------
Neither the Borrower nor any Subsidiary is a party to or bound by any
franchise, agreement, deed, lease or other instrument, or subject to any
corporate restriction which, in the opinion of the management of the Borrower,
is so unusual or burdensome, in the context of the Borrower's or such
Subsidiary's business, as in the foreseeable future might materially and
adversely affect or impair the revenue or Operating Cash Flow of the Borrower or
any Subsidiary or the ability of the Borrower or any Subsidiary to perform its
respective obligations under the Loan Documents. The Borrower does not
presently anticipate that future expenditures needed to meet the provisions of
federal or state statutes, orders, rules or regulations will be so burdensome as
to have a Material Adverse Effect.
4.17 Financial Statements.
--------------------
The Borrower has heretofore delivered to the Lenders a copy of (i) the
annual audited Consolidated (and unaudited Consolidating) Balance Sheets of the
Borrower and its Subsidiaries as of December 31, 1996, together with the related
Consolidated and Consolidating Statements of Operations, Shareholders' Equity
and Cash Flows for the period then ended, and (ii) the unaudited Consolidated
and Consolidating Balance Sheets of the Borrower and its Subsidiaries as of
March 31, 1997 and June 30, 1997, together with the related Consolidated and
Consolidating Statements of Operations for the periods then ended. The
foregoing financial statements fairly present the Consolidated and Consolidating
financial condition and results in the operations of the Borrower and its
Subsidiaries as of the dates and for the periods indicated therein and have been
prepared in conformity with GAAP. Except as reflected in such financial
statements or in the footnotes thereto, neither the Borrower nor any of its
Subsidiaries has any obligation or liability of any kind (whether fixed,
accrued, contingent, unmatured or otherwise) which, in accordance with GAAP,
should have been shown on such financial statements and was not. Since December
31, 1996, the Borrower and its Subsidiaries have conducted their business only
in the ordinary course (except with respect to the acquisitions of Broadcasting
Stations permitted by the terms hereof or the Existing Credit Agreement or
otherwise consented to by the Required Lenders (or the required lenders under
the Existing Credit Agreement), and except as set forth in the March 31, 1997
and June 30, 1997 financial statements referred to above), and there has been no
Material Adverse Change.
-37-
4.18 Environmental Matters.
---------------------
Except as set forth in Schedule 4.18, neither the Borrower nor any
Subsidiary (i) has received written notice or otherwise learned of any claim,
demand, action, event, condition, report or investigation indicating or
concerning any potential or actual liability which individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect arising
in connection with (a) any non-compliance with or violation of the requirements
of any Environmental Law, or (b) the release or threatened release of any toxic
or hazardous waste, substance or constituent, or other substance into the
environment, (ii) to the best knowledge of the Borrower, has any threatened or
actual liability in connection with the release or threatened release of any
toxic or hazardous waste, substance or constituent, or other substance into the
environment which individually or in the aggregate could reasonably be expected
to have a Material Adverse Effect, (iii) has received notice of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release or threatened release of any toxic or hazardous waste, substance or
constituent or other substance into the environment for which the Borrower or
any Subsidiary is or may be liable, or (iv) has received notice that the
Borrower or any Subsidiary is or may be liable to any Person under any
Environmental Law. The Borrower and each Subsidiary is in compliance in all
material respects with the financial responsibility requirements of all
Environmental Laws to the extent applicable, including, without limitation,
those contained in 40 C.F.R., parts 264 and 265, subpart H, and any analogous
state law.
5. CONDITIONS OF LENDING
---------------------
5.1 First Loans and Letters of Credit on the First Borrowing Date.
-------------------------------------------------------------
In addition to the requirements set forth in section 5.2, the
obligation of each Lender to make one or more Loans or the Issuing Bank to issue
a Letter of Credit on the first Borrowing Date is subject to the fulfillment of
the following conditions precedent:
(a) Evidence of Corporate or Other Action. The Administrative Agent
-------------------------------------
shall have received a certificate, dated the first Borrowing Date, of the
Secretary or an Assistant Secretary of each Loan Party (i) attaching a true and
complete copy of the resolutions of its Board of Directors or other authorizing
documents and of all documents evidencing all necessary corporate or other
action (in form and substance reasonably satisfactory to the Administrative
Agent) taken by it to authorize the Loan Documents to which it is a party and
the transactions contemplated thereby, (ii) attaching a true and complete copy
of its certificate of incorporation and by-laws of other organizational
documents, (iii) setting forth the incumbency of its officer or officers who may
sign such Loan Documents, including therein a signature specimen of such
officer or officers and (iv) attaching a certificate of good standing, if
available, of the Secretary of State of the State of its incorporation or
formation and of each other State in which it is qualified to do business.
(b) Notes. The Borrower shall have delivered to the Administrative
-----
Agent the Notes, each duly executed on behalf of the Borrower by an Authorized
Signatory thereof.
-38-
(c) No Liens. The Administrative Agent shall have received a
--------
certificate of the Borrower, signed by an Authorized Signatory thereof, dated
the first Borrowing Date, certifying that, upon the making of the first Loans,
there exist no Liens on the Collateral other than Permitted Liens.
(d) Subsidiary Guaranty and Borrower Security Agreement. The Borrower
---------------------------------------------------
shall have delivered to the Administrative Agent (i) the Subsidiary Guaranty,
dated as of the Effective Date, duly executed on behalf of each Subsidiary by an
Authorized Signatory thereof, (ii) the Borrower Security Agreement, dated as of
the Effective Date, duly executed on behalf of the Borrower by an Authorized
Signatory thereof, (iii) one or more share certificates, representing all of the
issued and outstanding Stock of each of the Subsidiaries, together with undated
stock powers, duly executed in blank on behalf of the Borrower by an Authorized
Signatory thereof and bearing an appropriate signature guarantee in all respects
satisfactory to the Administrative Agent, in respect of each such certificate,
(iv) all documents evidencing intercompany Indebtedness owing to the Borrower or
any Subsidiary, and (v) certificates of insurance in all respects satisfactory
to the Administrative Agent evidencing the insurance required to be maintained
pursuant to section 7.5(b).
(e) UCC Searches; Filing of Financing Statements. The Administrative
--------------------------------------------
Agent shall have received such Lien and judgment searches as it shall have
requested. The Borrower shall have executed and delivered to the Administrative
Agent such financing statements, recordations and other documents with respect
to the Collateral Documents as the Administrative Agent or Special Counsel may
request for the purpose of perfecting the Liens granted thereunder. All filing
fees and Taxes in connection with the filing of the Collateral Documents shall
have been paid or otherwise provided for and the Administrative Agent and
Special Counsel shall have received satisfactory evidence thereof.
(f) Existing Indebtedness. Prior to or simultaneously with the making
---------------------
of the first Loans, the Borrower shall have paid all Indebtedness under the
Existing Credit Agreement, and all agreements with respect thereto shall have
been cancelled or terminated, all Liens, if any, securing the same shall have
been terminated, and the Administrative Agent shall have received evidence
reasonably satisfactory to it thereof.
(g) Approvals. The Administrative Agent shall have received evidence
---------
reasonably satisfactory to it that all approvals and consents of all Persons
required to be obtained in connection with the consummation of the transactions
contemplated by the Loan Documents have been obtained and that all required
notices have been given and all required waiting periods have expired.
(h) Litigation. There shall be no injunction, writ, preliminary
----------
restraining order or other order of any nature issued by any Governmental
Authority in any respect affecting any Loan Document, or any transaction
contemplated by the Loan Documents and no action or proceeding by or before any
Governmental Authority shall have been commenced and be pending seeking to
prevent or delay any of the foregoing or challenging any term or provision
thereof or seeking any damages in connection therewith, and the Administrative
Agent shall have received a certificate, in all respects reasonably satisfactory
to the Administrative Agent, of an Authorized Signatory of the Borrower to the
foregoing effect.
-39-
(i) Approval of Special Counsel. All legal matters incident to the
---------------------------
making of the Loans on the first Borrowing Date shall be reasonably satisfactory
to Special Counsel, and the Administrative Agent shall have received from
Special Counsel an opinion, dated the first Borrowing Date, substantially in the
form of Exhibit E.
(j) Opinion of Counsel to the Borrower and the Subsidiaries. The
-------------------------------------------------------
Administrative Agent shall have received opinions of counsel to the Borrower and
its Subsidiaries, dated the first Borrowing Date, substantially in the form of
Exhibit F.
(k) Opinion of FCC Counsel to the Borrower and the Subsidiaries. The
-----------------------------------------------------------
Administrative Agent shall have received opinions of special FCC counsel to the
Borrower and its Subsidiaries, dated the first Borrowing Date, substantially in
the form of Exhibit G.
(l) Payment of Fees. The Borrower shall have paid to the
---------------
Administrative Agent and the Lenders all fees and expenses which it shall have
agreed to pay, to the extent such fees and expenses have become payable on or
prior to the first Borrowing Date, and shall have paid the reasonable fees and
disbursements of Special Counsel.
(m) Financial Statements and Financial Projections. The Borrower
----------------------------------------------
shall have delivered to the Administrative Agent and the Lenders the financial
statements referred to in section 4.17 together with such projections and other
information as the Administrative Agent and the Lenders shall reasonably
require, all of which shall be in all material respects satisfactory to the
Administrative Agent and the Lenders.
(n) Subordinated Indenture and Subordinated Indenture Subsidiary
------------------------------------------------------------
Guaranty. The Administrative Agent shall have received a copy of the
- --------
Subordinated Indenture and Subordinated Indenture Subsidiary Guaranty duly
certified by an Authorized Signatory of the Borrower as a true and complete copy
thereof and the Borrower shall have received the proceeds of the Subordinated
Indenture Notes.
(o) Asset Valuation. The Administrative Agent shall have received a
---------------
copy of the asset valuation, dated July 31, 1997, prepared by Gary Stevens & Co.
Incorporated.
(p) Other Documents. The Administrative Agent shall have received
---------------
such other documents as the Administrative Agent shall reasonably require in
connection with the making of the first Loans.
5.2 All Loans and Letters of Credit.
-------------------------------
The obligation of the Lenders to make any Loan on a Borrowing Date,
and the obligation of the Issuing Bank to issue a Letter of Credit on a
Borrowing Date, is subject to the satisfaction of the following conditions
precedent as of the date of such Loan or Letter of Credit:
(a) Compliance. On each Borrowing Date and after giving effect to the
----------
Loans or Letter of Credit to be made or issued thereon, (i) the Loan Parties
shall be in compliance with all of the terms, covenants and conditions of the
Loan Documents, (ii) there shall exist no Default or Event of Default, (iii) the
representations and warranties contained in the Loan Documents shall be true and
correct with the same effect as though such representations and warranties had
been made on such Borrowing Date, except as the
-40-
context otherwise requires, except as otherwise permitted or contemplated by
this Agreement, and except such matters relating thereto as are indicated in
each Borrowing Request which shall be reasonably satisfactory to the
Administrative Agent and the Required Lenders, and (iv) there shall have
occurred no Material Adverse Change since December 31, 1996. Each borrowing by
the Borrower and each issuance of a Letter of Credit shall constitute a
certification by the Borrower as of the date of such borrowing or issuance that
each of the foregoing matters is true and correct in all respects.
(b) Loan Closings. All documents required by the provisions of this
-------------
Agreement to be executed or delivered to the Administrative Agent on or before
the applicable Borrowing Date shall have been executed and shall have been
delivered at the office of the Administrative Agent set forth in section 11.2 on
or before such Borrowing Date.
(c) Borrowing Request or Letter of Credit Request. The Administrative
---------------------------------------------
Agent shall have received a Borrowing Request or a Letter of Credit Request, as
applicable, duly executed by an Authorized Signatory of the Borrower.
(d) Reimbursement Agreement. In connection with any Letter of Credit
-----------------------
Request, the Issuing Bank shall have received a Reimbursement Agreement duly
executed by an Authorized Signatory of the Borrower.
(e) Approval of Counsel. All legal matters in connection with the
-------------------
making of each Loan or issuance of such Letter of Credit shall be reasonably
satisfactory to Special Counsel.
(f) Other Documents. The Administrative Agent shall have received
---------------
such other documents as the Administrative Agent shall reasonably request.
6. FINANCIAL COVENANTS
-------------------
The Borrower covenants and agrees that on and after the Effective Date and
until all obligations of the Borrower under the Notes and the other Loan
Documents have been paid in full and all RC Commitments of the Lenders have been
terminated and no obligations of the Administrative Agent, the Issuing Bank or
any of the Lenders exist under any of the Loan Documents, the Borrower shall:
6.1 Total Leverage Ratio.
--------------------
Maintain at all times a Total Leverage Ratio not greater than the
applicable ratio set forth below opposite the applicable period set forth below:
Periods Ratio
------- -----
Effective Date through
June 29, 1998 7.00:1.00
June 30, 1998 through
December 30, 1998 6.25:1.00
-41-
December 31, 1998 through
December 30, 1999 5.75:1.00
December 31, 1999 through
December 30, 2000 5.25:1.00
December 31, 2000 through
December 30, 2001 4.50:1.00
December 31, 2001
and thereafter 4.00:1.00
6.2 Consolidated Annual Operating Cash Flow to Pro-Forma Debt Service.
-----------------------------------------------------------------
Maintain as at the end of each fiscal quarter a ratio of Consolidated
Annual Operating Cash Flow to Pro-Forma Debt Service not less than 1.10:1.00.
6.3 Consolidated Annual Operating Cash Flow to Pro-Forma Interest Expense.
---------------------------------------------------------------------
Maintain as at the end of each fiscal quarter during the applicable
periods set forth below a ratio of Consolidated Annual Operating Cash Flow to
Pro-Forma Interest Expense not less than the ratio set forth below opposite the
applicable period set forth below:
Periods Ratio
------- -----
Effective Date through
March 31, 1998 1.25:1.00
April 1, 1998 through
March 31, 1999 1.50:1.00
April 1, 1999 through
September 30, 2001 1.75:1.00
October 1, 2001 and
thereafter 2.00:1.00
6.4 Consolidated Annual Operating Cash Flow to Fixed Charges.
--------------------------------------------------------
Maintain as at the end of each fiscal quarter a ratio of Consolidated
Annual Operating Cash Flow to Fixed Charges not less than 1.10:1.00.
7. AFFIRMATIVE COVENANTS
---------------------
The Borrower covenants and agrees that on and after the Effective Date and
until all obligations of the Borrower under the Notes and the other Loan
Documents have been paid in full and all RC Commitments have been terminated and
no obligations of the
-42-
Administrative Agent, the Issuing Bank or any of the Lenders exist under any of
the Loan Documents, the Borrower shall:
7.1 Financial Statements.
--------------------
Maintain, and cause each Subsidiary to maintain, a standard system of
accounting in accordance with GAAP, and furnish or cause to be furnished to the
Administrative Agent and each Lender:
(a) As soon as available, but in any event within 120 days after the
end of each fiscal year of the Borrower, a copy of the Consolidated and
Consolidating Balance Sheets of the Borrower and its Subsidiaries as at the end
of such fiscal year, together with the related Consolidated Statements of
Shareholders' Equity and Cash Flows and Consolidated and Consolidating
Statements of Operations as of and through the end of such fiscal year, setting
forth in each case, in comparative form, the Consolidated and Consolidating
figures for the preceding fiscal year. The Consolidated Balance Sheet and
Statements of Operations, Shareholders' Equity and Cash Flows shall be certified
without qualification by the Accountants, which certification (i) shall state
that the examination by such Accountants in connection with such Consolidated
financial statements has been made in accordance with generally accepted
auditing standards and, accordingly, included such tests of the accounting
records and such other auditing procedures as were considered necessary in the
circumstances, (ii) shall include the opinion of such Accountants that such
Consolidated financial statements have been prepared in accordance with GAAP in
a manner consistent with prior fiscal periods, except as otherwise specified in
such opinion.
(b) Simultaneously with the delivery of the certified Consolidated
financial statements required by clause (a) above, copies of a certificate of
such Accountants stating that, in making the examination necessary for their
audit of such financial statements for such fiscal year, nothing came to their
attention of an accounting nature that caused them to believe that the Borrower
was not in compliance with the terms, covenants, provisions, or conditions of
this Agreement, including, without limitation, sections 6.1, 6.2, 6.3 and 6.4,
or, if so, specifying in such certificate all such instances of noncompliance
and the nature and status thereof.
(c) As soon as available, but in any event not later than 60 days
after the end of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, a copy of the Consolidated and Consolidating
Balance Sheets of the Borrower and its Subsidiaries as at the end of each such
quarterly period, together with the related Consolidated and Consolidating
Statements of Operations, for such period and for the elapsed portion of the
fiscal year through such date, setting forth in each case, in comparative form,
the Consolidated and Consolidating figures for the corresponding periods of the
preceding fiscal year, certified by the Chief Financial Officer of the Borrower
(or such other officer acceptable to the Administrative Agent), as being
complete and correct in all material respects and as presenting fairly the
Consolidated and Consolidating financial condition and the results of operations
of each of the Borrower and its Subsidiaries, subject to normal, non-material
year-end adjustments.
(d) Within 60 days after the end of each of the first three fiscal
quarters (120 days after the end of the fourth fiscal quarter) of the Borrower,
a Compliance Certificate as at the end of such fiscal quarter, certified by the
Chief Financial Officer of the Borrower (or such other officer as shall be
acceptable to the Administrative Agent).
-43-
(e) Concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and (c), a profile of each Broadcasting Station,
which shall include, but not be limited to, the call letters and location of
each Broadcasting Station and management's estimate of the fair market value
thereof and a management's discussion and analysis of such financial statements,
including a summary of all acquisitions and dispositions of Broadcasting
Stations that occurred during the period covered by such financial statements,
which shall include a schedule of the consideration paid in each acquisition and
the cash received in each disposition.
(f) Within 30 days after the beginning of each fiscal year, an annual
Consolidated and Consolidating forecast for the Borrower and its Subsidiaries
for such fiscal year and the following two fiscal years, including projected
Consolidated and Consolidating statements of income of the Borrower and its
Subsidiaries, all in reasonable detail acceptable to the Administrative Agent;
(ii) promptly upon preparation thereof, such other forecasts that the Borrower
or any of its Subsidiaries may prepare and any revisions that may be made to any
forecast previously delivered to the Lenders; and (iii) no later than 30 days
after the end of each fiscal quarter in which there has been a material
deviation from a forecast provided to the Lenders, a certificate of an
Authorized Signatory explaining the deviation and the action, if any, that has
been taken or is proposed to be taken with respect thereto; in each case the
foregoing forecasts shall state all underlying assumptions.
7.2 Certificates; Other Information.
-------------------------------
Furnish to the Administrative Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness of the Borrower or
any Subsidiary is declared or shall become due and payable prior to its stated
maturity, or called and not paid when due, (ii) a default shall have occurred
under any note (other than the Notes) or the holder of any such note, or other
evidence of Indebtedness, certificate or security evidencing any such
Indebtedness or any obligee with respect to any other Indebtedness of the
Borrower or any Subsidiary has the right to declare any such Indebtedness due
and payable prior to its stated maturity as a result of such default, or (iii)
there shall occur and be continuing a Default or an Event of Default;
(b) Prompt written notice of: (i) any citation, summons, subpoena,
order to show cause or other order naming the Borrower or any Subsidiary a party
to any proceeding before any Governmental Authority which might have a Material
Adverse Effect or which call into question the validity or enforceability of any
of the Loan Documents and include with such notice a copy of such citation,
summons, subpoena, order to show cause or other order, (ii) the commencement or
threat of any action, suit, arbitration proceeding or claim by, on behalf of or
against the Borrower or any Subsidiary, at law or in equity, before any
Governmental Authority, which could reasonably be expected to have a Material
Adverse Effect, (iii) any lapse or other termination of any material license,
permit, franchise or other authorization issued to the Borrower or any
Subsidiary by any Governmental Authority, (iv) any refusal by any Governmental
Authority to renew or extend any such material license, permit, franchise or
other authorization, and (v) any dispute between the Borrower or any Subsidiary
and any Governmental Authority, which dispute might have a material adverse
effect on any Broadcasting Station or a Material Adverse Effect;
-44-
(c) Promptly upon becoming available, copies of all (i) regular,
periodic or special reports, schedules and other material that the Borrower or
any Subsidiary may now or hereafter be required to file with or deliver to any
securities exchange or the Securities and Exchange Commission, or any other
Governmental Authority succeeding to the functions thereof, (ii) material
reports, schedules and other material which the Borrower or any Subsidiary may
now or hereafter be required to file with or deliver to the FCC and (iii)
material news releases and annual reports relating to the Borrower or any of its
Subsidiaries;
(d) Prompt written notice in the event that (i) the Borrower or any
Commonly Controlled Entity shall receive notice from the Internal Revenue
Service or the Department of Labor that the Borrower or such Commonly Controlled
Entity shall have failed to meet the minimum funding requirements of Section 412
of the Code with respect to a Plan, if applicable, and include therewith a copy
of such notice, or (ii) the Borrower or any Commonly Controlled Entity gives or
is required to give notice to the PBGC of any Reportable Event with respect to a
Plan, or knows that the plan administrator of a Plan has given or is required to
give notice of any such Reportable Event;
(e) With respect to a Single Employer Plan of the Borrower or any
Commonly Controlled Entity, copies of any request for a waiver of the funding
standards or any extension of the amortization periods required by Sections 303
and 304 of ERISA or Section 412 of the Code promptly after any such request is
submitted to the Department of Labor or the Internal Revenue Service, as the
case may be;
(f) Promptly after the filing thereof, a copy of the annual report
required to be filed pursuant to Section 103 of ERISA in connection with each
Single Employer Plan of the Borrower and each Commonly Controlled Entity for
each plan year, including (i) a statement of the assets and liabilities of such
Plan as of the end of such plan year and statements of changes in fund balance
and in financial position, or a statement of changes in net assets available for
plan benefits, for such plan year, certified by the Accountants and (ii) an
actuarial statement of such Plan applicable to such plan year, certified by an
enrolled actuary of recognized standing reasonably acceptable to the
Administrative Agent and the Required Lenders;
(g) Promptly upon request therefor, such other information and reports
relating to the past, present or future financial condition, operations, plans
and projections of the Borrower or its Subsidiaries as the Administrative Agent
or any other Lender (through the Administrative Agent) may at any time and from
time to time reasonably request;
(h) Promptly after the same are received by the Borrower, copies of
all management letters and similar reports provided to the Borrower or any
Subsidiary by its independent certified public accountants;
(i) Prompt written notice of any material change in the accounting
policies or financial reporting practices of the Borrower or any of its
Subsidiaries; and
(j) Prompt written notice of the occurrence of a Material Adverse
Change or the occurrence of any event or facts or circumstances which are
reasonably likely to result in a Material Adverse Change.
-45-
7.3 Legal Existence.
---------------
Except as otherwise permitted by section 8.3, maintain, and cause each
Subsidiary to maintain, its corporate existence, and maintain its good standing
in the jurisdiction of its incorporation or organization and in each other
jurisdiction in which the failure so to do could reasonably be expected to have
a Material Adverse Effect.
7.4 Taxes.
-----
Pay and discharge when due, and cause each Subsidiary so to do, all
Taxes, assessments and governmental charges, license fees and levies upon or
with respect to the Borrower or such Subsidiary and upon the income, profits and
Property of the Borrower and the Subsidiaries taken as a whole, which if unpaid,
could reasonably be expected to have a Material Adverse Effect or become a Lien
on the Property of the Borrower or any Subsidiary not permitted under section
8.2, unless and to the extent only that such Taxes, assessments, charges,
license fees and levies shall be contested in good faith and by appropriate
proceedings diligently conducted by the Borrower or such Subsidiary and provided
that the Borrower shall give the Administrative Agent prompt notice of such
contest and that such reserve or other appropriate provision as shall be
required by the Accountants in accordance with GAAP shall have been made
therefor.
7.5 Insurance and Condemnation.
--------------------------
(a) Liability Insurance. Maintain, and cause each Subsidiary to
-------------------
maintain, insurance with financially sound insurance carriers on such of its
Property, against at least such risks, and in at least such amounts, as are
customarily insured against by similar businesses and which, in the case of
property insurance, shall be in amounts sufficient to prevent the Borrower or
any Subsidiary from becoming a co- insurer, including, without limitation,
public liability (bodily injury and property damage), fidelity, bonding and
workers' compensation with deductibles not exceeding $25,000 per occurrence, in
each case naming the Administrative Agent as an additional insured under such
policies, and file with the Administrative Agent within five days after request
therefor a detailed list of such insurance then in effect, stating the names of
the carriers thereof, the policy numbers, the insureds thereunder, the amounts
of insurance, dates of expiration thereof, and the Property and risks covered
thereby, together with a certificate of an Authorized Signatory certifying that
in the opinion of such officer such insurance is adequate in nature and amount,
complies with the obligations of the Borrower under this section 7.5, and is in
full force and effect.
(b) Property Insurance. Maintain such property and other insurance as
-------------------
is customarily maintained by companies engaged in similar businesses with
deductibles not exceeding $25,000 per occurrence. Promptly upon request
therefor, the Borrower shall deliver or cause to be delivered to the
Administrative Agent originals or duplicate originals of all such policies of
insurance. All such property insurance shall name the Administrative Agent,
under a standard loss payable clause, as sole loss payee in respect of each
claim resulting in a payment under any such insurance policy exceeding $500,000
and shall contain such endorsements as the Administrative Agent shall require.
Provided that no Default or Event of Default shall exist, the Administrative
Agent agrees, promptly upon its receipt thereof, to pay over to the Borrower the
proceeds of any such payment received by the Administrative Agent in its
capacity as Administrative Agent hereunder. If a Default or Event of Default
shall exist, the Borrower, at the request of the
-46-
Administrative Agent, shall prepay the Loans with such proceeds, in an amount
equal to the total amount of such insurance payment. The RC Commitments shall be
reduced by an amount equal to any such insurance proceeds not used by the
Borrower or any of its Subsidiaries within 360 days to repair or replace any
Property in respect of which it received property insurance proceeds.
(c) Condemnation Awards. If a Default or Event of Default shall
-------------------
exist, promptly upon receipt by the Borrower or any of its Subsidiaries of the
proceeds of any condemnation or similar awards, the Borrower shall pay over the
proceeds thereof to the Administrative Agent and, at the request of the
Administrative Agent, shall prepay the Loans in an amount equal to the total
amount of such proceeds. The RC Commitments shall be reduced by an amount equal
to any such proceeds not used by the Borrower or any of its Subsidiaries within
360 days to repair or replace any Property in respect of which it received a
condemnation or similar award.
7.6 Payment of Indebtedness and Performance of Obligations.
------------------------------------------------------
Pay and discharge, and cause each Subsidiary to pay and discharge,
when due all lawful Indebtedness, obligations and claims for labor, materials
and supplies or otherwise which, if unpaid, might (i) have a Material Adverse
Effect, or (ii) become a Lien upon Property of the Borrower or any Subsidiary
not permitted under section 8.2, unless and to the extent only that the validity
of such Indebtedness (other than Indebtedness under the Loan Documents),
obligation or claim shall be contested in good faith and by appropriate
proceedings diligently conducted by the Borrower or such Subsidiary, and that
any such contested Indebtedness, obligations or claims shall not constitute, or
create, a Lien on any Property of the Borrower senior to the Lien granted to the
Administrative Agent by the Collateral Documents on such Property, and further
provided that the Borrower shall give the Administrative Agent and the Lenders
prompt notice of any such contest and that such reserve or other appropriate
provision as shall be required by the Accountants in accordance with GAAP shall
have been made therefor.
7.7 Condition of Property.
---------------------
At all times, maintain, protect and keep in good repair, working order
and condition (ordinary wear and tear excepted), and cause each Subsidiary so to
do, all Property necessary to the operation of the Borrower's or such
Subsidiary's business.
7.8 Observance of Legal Requirements; ERISA; Environmental Laws.
-----------------------------------------------------------
Observe and comply in all respects, and cause each Subsidiary so to
do, with all laws (including ERISA and Environmental Laws), ordinances, orders,
judgments, rules, regulations, certifications, franchises, permits, licenses,
directions and requirements of all Governmental Authorities, which now or at any
time hereafter may be applicable to the Borrower or such Subsidiary, a violation
of which could reasonably be expected to have a Material Adverse Effect, except
such thereof as shall be contested in good faith and by appropriate proceedings
diligently conducted by the Borrower or such Subsidiary, provided that the
Borrower shall give the Administrative Agent and the Lenders prompt notice of
such contest and that such reserve or other appropriate provision as shall be
required by the Accountants in accordance with GAAP shall have been made
therefor.
-47-
7.9 Inspection of Property; Books and Records; Discussions.
------------------------------------------------------
Keep proper books of record and account in which full, true and
correct entries in conformity with GAAP and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Administrative Agent and each
Lender, or potential assignees and/or participants of the Administrative Agent
or any Lender, to visit the offices of the Borrower and the Subsidiaries, to
inspect any of its Property and examine and make copies or abstracts from any of
its books and records at any reasonable time and as often as may reasonably be
desired, and to discuss the business, operations, prospects, licenses, Property
and financial condition of the Borrower and the Subsidiaries with the officers
thereof and with the Accountants.
7.10 FCC Licenses, Etc.
-----------------
Maintain and cause each Subsidiary to maintain, in full force and
effect, each license issued by the FCC to it for each Broadcasting Station. The
Borrower shall also maintain and cause each Subsidiary to maintain, in full
force and effect, all other material licenses, copyrights, patents, including
all licenses, permits, applications, reports, authorizations and other rights as
are necessary for the conduct of its business, except to the extent that such
ownership or right to use shall terminate as a matter of law or expire as a
matter of contractual right through no action or default by the Borrower or any
Subsidiary.
7.11 Subsidiary Guaranty.
-------------------
Promptly upon the creation or acquisition of any Subsidiary, cause
such Subsidiary to execute and deliver to the Administrative Agent a supplement
to the Subsidiary Guaranty in the form attached thereto, together with such
other documents and opinions of counsel as the Administrative Agent shall
reasonably required in connection therewith.
8. NEGATIVE COVENANTS
------------------
The Borrower covenants and agrees that on and after the Effective Date and
until all obligations of the Borrower under Notes and the other Loan Documents
have been paid in full and all RC Commitments have been terminated and no
obligations of the Administrative Agent, the Issuing Bank or any of the Lenders
exist under any of the Loan Documents, the Borrower shall not:
8.1 Borrowing.
---------
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any Subsidiary so to do, except: (i) Indebtedness under
the Loan Documents; (ii) Indebtedness (including Contingent Obligations) of the
Borrower and the Subsidiaries existing on the date hereof as set forth in
Schedule 8.1 and other Indebtedness of the Borrower in an aggregate outstanding
principal amount for all such Indebtedness under this clause (ii) not in excess
of $5,000,000; (iii) Indebtedness of the Borrower and the Subsidiaries evidenced
by the Subordinated Indenture Notes and Subordinated Indenture Subsidiary
Guaranty; (iv) intercompany Indebtedness between the Borrower and its
-48-
Subsidiaries; and (v) refinancings of any Indebtedness permitted under clause
(ii) above with other Indebtedness permitted under clause (i) or (ii) above.
8.2 Liens.
-----
Create, incur, assume or suffer to exist, or enter into any agreement
with any third Person agreeing not to create, incur, assume or suffer to exist,
any Lien upon any of its Property, whether now owned or hereafter acquired, or
permit any Subsidiary so to do, except: (i) Liens for Taxes, assessments or
similar charges incurred in the ordinary course of business which are not
delinquent or which are being contested in accordance with section 7.4, provided
that such Liens are not senior to the Liens granted to the Administrative Agent
and the Lenders by the Collateral Documents, (ii) Liens in connection with
workers' compensation, unemployment insurance or other social security
obligations (but not ERISA), (iii) deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business, (iv) zoning ordinances, easements
and other similar restrictions affecting real property which do not materially
adversely affect the value of such real property or the financial condition of
the Borrower or such Subsidiary or materially impair its use for the operation
of the business of the Borrower or such Subsidiary, (v) the Liens created under
the Collateral Documents, (vi) statutory Liens arising by operation of law such
as mechanics' liens incurred in the ordinary course of business which are not
delinquent or which are being contested in accordance with section 7.4, (vii)
Liens arising out of judgments or decrees which are being contested in
accordance with section 7.4, provided that such Liens are subordinate to the
Liens granted to the Administrative Agent and the Lenders by the Collateral
Documents and provided further that enforcement of such Liens is stayed during
such contest, (viii) Liens on Property of the Borrower and the Subsidiaries
existing on the date hereof as set forth in Schedule 8.2, (ix) Liens in
connection with the making of deposits in accordance with section 8.5(e) and (x)
Liens in connection with Indebtedness permitted under Section 8.1(ii), provided
that such Liens extend only to the Property acquired with such Indebtedness.
8.3 Merger and Acquisition or Sale of Property.
------------------------------------------
Consolidate with, be acquired by, or merge into or with any Person, or
acquire all or substantially all of the Stock or Property of any Person, or,
except as otherwise permitted under section 8.7, sell, lease or otherwise
dispose of all or substantially all of its Property, or otherwise alter or
modify its structure, status or existence, or permit any Subsidiary so to do,
except:
(a) any wholly-owned Subsidiary may merge with the Borrower (with the
Borrower as survivor) or with another wholly-owned Subsidiary;
(b) subject to the last paragraph of this section 8.3, upon 30 days'
notice to the Administrative Agent, the Borrower or any wholly- owned Subsidiary
may acquire Broadcasting Station(s) through an acquisition or merger (with the
Borrower or such wholly-owned Subsidiary (or a Person that becomes a wholly-
owned Subsidiary) as the survivor thereof for an aggregate gross consideration
(including capital expenditures anticipated for the 12 month period following
such acquisition) not exceeding $10,000,000 with respect to each such
acquisition of Broadcasting Station(s)), provided that (i) if the aggregate
gross consideration for any such acquisition exceeds $20,000,000 and if the
-49-
Required Lenders shall have consented to such acquisition, there shall have been
delivered to the Administrative Agent and each Lender an independent appraisal
of each Broadcasting Station to be acquired, such appraisal to be in all
respects satisfactory to the Administrative Agent and the Required Lenders, (ii)
if the aggregate gross consideration for any such acquisition exceeds
$10,000,000, and if the Required Lenders shall have consented to such
acquisition, the Administrative Agent and each Lender shall have received such
details of such transaction as the Administrative Agent or any other Lender
(through the Administrative Agent) shall reasonably request, and (iii)
immediately before and after giving effect to such acquisition the Total
Leverage Ratio shall not exceed the lesser of (x) 6.00:1.00 and (y) the maximum
Total Leverage Ratio then permitted under section 6.1; and
(c) as permitted under section 8.5(j).
Immediately before and after giving effect to any proposed acquisition or merger
permitted under this section 8.3, all representations and warranties contained
in the Loan Documents shall be true and correct and no Default or Event of
Default shall exist and, prior to the consummation of such acquisition or
merger, the Borrower shall have delivered to the Administrative Agent a
certificate of an Authorized Signatory of the Borrower certifying as to the
foregoing. Immediately upon the consummation of any acquisition or merger
permitted under section 8.3(b), (i) the Borrower shall have delivered to the
Administrative Agent such UCC financing statements and other documents as the
Administrative Agent shall reasonably require in order to grant to the
Administrative Agent a first priority perfected security interest in the Stock
and/or Property, as applicable, of such Broadcasting Station under and pursuant
to the Collateral Documents, subject to no Liens other than Permitted Liens,
(ii) if the Borrower shall have acquired a Subsidiary in connection with such
acquisition, such Subsidiary shall have become a party to the Subsidiary
Guaranty, (iii) the Borrower shall have received, with respect to each pending
acquisition, a final order (subject to no appeal) from the FCC, and all other
similar material orders from all other applicable Governmental Authorities, with
regard to the acquisition or merger, and the Administrative Agent shall have
received true, complete and correct copies, certified by an Authorized Signatory
of the Borrower, of all such orders and (iv) the Borrower shall have delivered
to the Administrative Agent such opinions and other documents as the
Administrative Agent shall reasonably require in connection therewith.
8.4 Dividends; Purchase of Stock.
----------------------------
Declare or pay any dividends payable in cash or otherwise or apply any
of its Property to the purchase, redemption or other retirement of, or set apart
any sum for the payment of any dividends on, or make any other distribution by
reduction of capital or otherwise in respect of, any of its Stock (each a
"Restricted Payment") or permit any Subsidiary so to do, except that:
- -------------------
(a) any wholly-owned Subsidiary may declare and pay dividends to the
Borrower from time to time.
8.5 Investments, Loans, Etc.
------------------------
At any time, purchase or otherwise acquire, hold or invest in the
Stock of, or any other interest in, any Person, or make any loan or advance
(excluding deposits or
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pledges permitted under section 8.2(iii)) to, or enter into any arrangement for
the purpose of providing funds or credit to, or make any other investment,
whether by way of capital contribution or otherwise, in or with any Person (all
of which are sometimes referred to herein as "Investments"), or permit any
-----------
Subsidiary so to do, except:
(a) Investments in short-term domestic and eurodollar certificates of
deposit issued by any Lender, or any other commercial bank, trust company or
national banking association incorporated under the laws of the United States or
any State thereof and having undivided capital surplus and retained earnings
exceeding $500,000,000;
(b) Investments in short-term direct obligations of the United States
of America or agencies thereof which obligations are guaranteed by the United
States of America;
(c) Investments existing on the date hereof as set forth in Schedule
8.5(c);
(d) Investments to the extent the same are acquisitions permitted
pursuant to section 8.3;
(e) Investments by the Borrower in the form of deposits or options
made in the ordinary course of business in connection with any proposed
acquisition or acquisitions of Property permitted pursuant to the terms of this
Agreement;
(f) loans and advances to employees for travel and relocation
purposes; and
(g) loans and advances to employees for other valid business purposes
that do not exceed $100,000 in the aggregate at any one time outstanding;
(h) intercompany Indebtedness permitted pursuant to section 8.1(iv);
(i) Permitted Non-Commercial Educational Station Investments in an
aggregate amount not exceeding $5,000,000 for any one such Investment or
$10,000,000 for all such Investments for the period from and after the Effective
Date; and
(j) the merger or consolidation of Beltway Media Partners with or
into, or the transfer or conveyance of all or substantially all of its assets
to, a wholly-owned Subsidiary.
8.6 Business Changes.
----------------
Engage in any material line of business substantially different from
those lines of business carried on as of the Effective Date, or permit any
Subsidiary so to do.
8.7 Sale of Property.
----------------
Sell, exchange, lease, transfer or otherwise dispose of any Property
to any Person, or permit any Subsidiary so to do, except sales, exchanges,
leases, transfers or other dispositions made in the ordinary course of business
(which shall not include the sale
-51-
or other disposition of all or substantially all of the Stock or assets of any
Broadcasting Station or involve an FCC license of the Borrower or any of its
Subsidiaries), except that:
(a) the Borrower may sell or exchange any Broadcasting Station,
provided that (i) the aggregate gross consideration to be received for all
Broadcasting Stations that have been sold or exchanged pursuant to the
provisions of this section 8.7(a) during the one year period ending on the date
of the proposed sale of exchange, (including the Broadcasting Station then being
contemplated to be sold or exchanged) shall not exceed $15,000,000 and (ii) the
aggregate gross consideration to be received for all Broadcasting Stations that
have been sold or exchanged pursuant to the provisions of this section 8.7(a)
during the period commencing on the Effective Date and ending through and
including the date of the proposed sale of exchange (including the Broadcasting
Station then being contemplated to be sold or exchanged) shall not exceed
$30,000,000.
In connection with any sale or exchange permitted under section 8.7(a), (i) if
the gross consideration to be received for such sale or exchange is equal to or
exceeds $10,000,000, the Administrative Agent and each Lender shall have
received such information and details with respect to such sale or exchange as
the Administrative Agent or any Lender (through the Administrative Agent) shall
reasonably request and immediately before and after giving effect to the
proposed sale or exchange (including any related change in Indebtedness), all
representations and warranties contained in the Loan Documents shall be true and
correct, no Default or Event of Default shall exist and the Borrower shall be in
pro-forma compliance with all covenants set forth in Sections 6.1, 6.2, 6.3 and
6.4, and the Borrower shall have delivered to the Administrative Agent a
certificate of an Authorized Signatory of the Borrower certifying and
demonstrating as to the same, (ii) the Borrower shall have received fair value
for each Broadcasting Station sold or exchanged and (iii) at least 80% of the
consideration to be received in connection with any such sale shall be in cash
or cash equivalents.
8.8 Subsidiaries.
------------
Create or acquire any other Subsidiary, or permit any Subsidiary so to
do, except in connection with an Acquisition permitted in section 8.3.
8.9 Compliance with ERISA.
---------------------
Adopt any Plan other than those listed in Schedule 4.14 or permit any
Subsidiary so to do, or engage in any "prohibited transaction", as such term is
defined in Section 4975 of the Code or Section 406 of ERISA, with respect to any
Plan, or incur any "accumulated funding deficiency", as such term is defined in
Section 412 of the Code or Section 302 of ERISA, or terminate, or permit any
Commonly Controlled Entity to terminate, any Plan that would result in any
liability of the Borrower or any Commonly Controlled Entity to the PBGC, or
permit the occurrence of any Reportable Event or any other event or condition
that presents a risk of such a termination by the PBGC of any Plan, or withdraw
or effect a partial withdrawal from a Multiemployer Plan, or permit any Commonly
Controlled Entity which is an employer under such a Multiemployer Plan so to do,
if any such withdrawal would result in such withdrawing employer incurring any
withdrawal liability in excess of $250,000.
-52-
8.10 Certificate of Incorporation and By-laws.
----------------------------------------
Amend or otherwise modify its certificate of incorporation, by- laws
or other organizational documents, or permit any Subsidiary so to do, in any way
that would adversely affect the interests of the Lenders or the Issuing Bank or
the obligations of any Loan Party under any of the Loan Documents.
8.11 Prepayments of Indebtedness.
---------------------------
Prepay or obligate itself to prepay, in whole or in part, any
Indebtedness (other than the Loans) prior to the due date thereof, or permit any
Subsidiary so to do, other than (i) the prepayment by any Subsidiary of
Indebtedness owing by such Subsidiary to the Borrower, (ii) the prepayment of
Indebtedness permitted under section 8.1(ii) with the proceeds of other
Indebtedness permitted under section 8.1(i) or (ii) or with the proceeds of
Stock issued by the Borrower pursuant to section 8.16, (iii) provided no Default
or Event of Default shall then exist, the Borrower may prepay the Indebtedness
in the aggregate principal amount of $6,692,000 payable to New Inspiration
Broadcasting Company, Inc. and Golden Gate Broadcasting Company, Inc., and New
Inspiration Broadcasting Company, Inc. and Golden Gate Broadcasting Company,
Inc. may, in turn, prepay the Indebtedness in an equal amount payable to its
former shareholders, and (iv) provided that no Default or Event of Default shall
then exist, the prepayment by the Borrower of Indebtedness incurred by the
Borrower in the ordinary course of its business to any Subsidiary.
8.12 Accounting Practice; Fiscal Year.
--------------------------------
Make any significant change in accounting treatment or reporting
practices, except as required by GAAP, or change its fiscal year from a fiscal
year commencing January 1st and ending December 31st, or permit any of its
Subsidiaries so to do.
8.13 Limitation on Upstream Transfers.
--------------------------------
Permit or cause any of its Subsidiaries to enter into or agree, or
otherwise be or become subject, to any agreement, contract or other arrangement
(other than this Agreement) with any Person pursuant to the terms of which (a)
such Subsidiary is or would be prohibited from making any advances to the
Borrower or declaring or paying any cash dividends on any class of its Stock
owned directly or indirectly by the Borrower or any of the other Subsidiaries or
from making any other distribution on account of any class of any such Stock
(herein referred to as "Upstream Transfers"), or (b) the declaration or payment
------------------
of Upstream Transfers on an annual or cumulative basis is or would be otherwise
limited or restricted.
8.14 Transactions with Affiliates.
----------------------------
Become, or permit any Subsidiary to become, a party to any transaction
with any Affiliate of the Borrower or any Subsidiary on a basis less favorable
to the Borrower or such Subsidiary in any material respect than if such
transaction were not with an Affiliate of the Borrower or such Subsidiary.
-53-
8.15 Sale and Leaseback.
------------------
Enter into any arrangement with any Person, or permit any Subsidiary
so to do, providing for the leasing by the Borrower or such Subsidiary of
Property which has been or is to be sold or transferred by the Borrower or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such Property or rental
obligations of the Borrower or such Subsidiary.
8.16 Stock Issuance.
--------------
Issue any additional shares of Stock, or permit any of its
Subsidiaries so to do, except (i) the Borrower may issue shares of its common
Stock and (ii) any Subsidiary may issue shares of its Stock to the Borrower or
any wholly-owned Subsidiary.
8.17 Subordinated Indenture.
----------------------
Enter into or agree to any amendment, modification or waiver of any
term or condition of the Subordinated Indenture, the Subordinated Indenture
Notes or the Subordinated Indenture Subsidiary Guaranty, or purchase, redeem or
make any payment with respect to Indebtedness under the Subordinated Indenture
Notes or the Subordinated Indenture Subsidiary Guaranty, or permit any of its
Subsidiaries so to do, except for required payments to the extent expressly
permitted pursuant to the subordination terms set forth therein, provided that
all payments required to be made under this Agreement shall have been made.
8.18 Federal Reserve Regulations.
---------------------------
Own, or permit any of its Subsidiaries to own, Margin Stock in excess
of 25% (or such greater or lesser percentage as is provided in the exclusions
from the definition of "Indirectly Secured" contained in Regulation G and
Regulation U in effect at the time of the making of each Loan or the issuance of
each Letter of Credit) of the value of the assets of (i) the Borrower, or (ii)
the Borrower and the Subsidiaries on a Consolidated basis.
8.19 Change in Name; Nature of Business.
----------------------------------
Change its legal name or make any material change in the nature of its
business, taken as a whole, as conducted on the Effective Date, or permit any of
its Subsidiaries so to do.
8.20 Lease Obligations.
-----------------
Create or suffer to exist any obligations for the payment of rent for
any Property under lease or agreement to lease, or permit any of its
Subsidiaries so to do, except for:
(a) leases in existence on the Effective Date and any renewal,
extension or refinancing thereof;
(b) operating leases entered into after the Effective Date in the
ordinary course of business; and
-54-
(c) capital leases other than those permitted under clauses (a) and
(b) of this section, entered into after the Effective Date to finance the
acquisition of equipment to the extent the Indebtedness evidenced by such
capital leases is permitted under section 8.1.
9. DEFAULT
-------
9.1 Events of Default.
-----------------
The following shall each constitute an "Event of Default" hereunder:
----------------
(a) The failure of the Borrower to pay any installment of principal on
any Note or any reimbursement payment in respect of a Letter of Credit on the
date when due and payable; or
(b) The failure of the Borrower to pay any installment of interest or
any other fees or expenses payable hereunder or under or in connection with any
other Loan Documents within three Business Days of the date when due and
payable; or
(c) The use by the Borrower of the proceeds of any Loan or Letter of
Credit in a manner inconsistent with or in violation of section 2.7; or
(d) The failure of the Borrower to observe or perform any covenant or
agreement contained in section 6, section 7.3, 7.5, 7.10 or 7.11, or section 8;
or
(e) The failure of the Borrower to observe or perform any other term,
covenant, or agreement contained in this Agreement and such failure shall have
continued unremedied for a period of 30 days after the Borrower shall have
obtained knowledge thereof; or
(f) Any representation or warranty of any Loan Party (or of any
officer on its behalf) made in any Loan Document or in any certificate, report,
opinion (other than an opinion of counsel) or other document delivered or to be
delivered pursuant to any Loan Document, shall prove to have been incorrect or
misleading (whether because of misstatement or omission) in any material respect
when made; or
(g) Any obligation of the Borrower or any Subsidiary (other than its
obligations under the Loan Documents), whether as principal, guarantor, surety
or other obligor, for the payment or purchase of any Indebtedness or operating
lease(s) (i) shall become or shall be declared to be due and payable prior to
the expressed maturity thereof, or (ii) shall not be paid or purchased when due
or within any grace period for the payment or purchase thereof, or (iii) the
holder of any such obligation(s) in excess of $500,000 in the aggregate shall
have the right to declare such obligation(s) due and payable or require the
purchase thereof prior to the expressed maturity thereof; or
(h) The Borrower or any Subsidiary shall (i) suspend or discontinue
its business, or (ii) make an assignment for the benefit of creditors, or (iii)
generally not be paying its debts as such debts become due, or (iv) admit in
writing its inability to pay its debts as they become due, or (v) file a
voluntary petition in bankruptcy, or (vi) become insolvent (however such
insolvency shall be evidenced), or (vii) file any petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment of debt,
-55-
liquidation or dissolution or similar relief under any present or future
statute, law or regulation of any jurisdiction, or (viii) petition or apply to
any tribunal for any receiver, custodian or any trustee for any substantial part
of its Property, or (ix) be the subject of any such proceeding filed against it
which remains undismissed for a period of 60 days, or (x) file any answer
admitting or not contesting the material allegations of any such petition filed
against it or of any order, judgment or decree approving such petition in any
such proceeding, or (xi) seek, approve, consent to, or acquiesce in any such
proceeding, or in the appointment of any trustee, receiver, custodian,
liquidator, or fiscal agent for it, or any substantial part of its Property, or
an order is entered appointing any such trustee, receiver, custodian, liquidator
or fiscal agent and such order remains in effect for 60 days, or (xii) take any
formal action for the purpose of effecting any of the foregoing or looking to
the liquidation or dissolution of the Borrower or such Subsidiary; or
(i) An order for relief is entered under the United States bankruptcy
laws or any other decree or order is entered by a court having jurisdiction (i)
adjudging the Borrower or any Subsidiary a bankrupt or insolvent, or (ii)
approving as properly filed a petition seeking reorganization, liquidation,
arrangement, adjustment or composition of or in respect of the Borrower or any
Subsidiary under the United States bankruptcy laws or any other applicable
Federal or state law, or (iii) appointing a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the Borrower or
any Subsidiary or of any substantial part of the Property thereof, or (iv)
ordering the winding up or liquidation of the affairs of the Borrower or any
Subsidiary, and any such decree or order continues unstayed and in effect for a
period of 60 days; or
(j) Any judgments or decrees against the Borrower or its Subsidiaries
(to the extent not covered by independent third-party insurance as to which the
insurer does not dispute coverage) aggregating in excess of $500,000 for all
such parties shall remain unpaid, unstayed on appeal, undischarged, unbonded or
undismissed for a period of 30 days; or
(k) The occurrence of an Event of Default under and as defined in any
Collateral Document or any Reimbursement Agreement; or
(l) Any of the Loan Documents shall cease, for any reason, to be in
full force and effect, or any Loan Party shall so assert in writing or shall
disavow its obligations thereunder; or
(m) The FCC or any other Governmental Authority revokes or fails to
renew any material license, permit or franchise of the Borrower or any of its
Subsidiaries, or the Borrower or any of its Subsidiaries for any reason loses
any material license, permit or franchise, or the Borrower or any of its
Subsidiaries suffers the imposition of any restraining order, escrow, suspension
or impound of funds in connection with any proceeding (judicial or
administrative) with respect to any material license, permit or franchise; or
(n) The occurrence of a Material Adverse Change; or
(o) A Change of Control shall occur.
Upon the occurrence of an Event of Default or at any time thereafter during
the continuance thereof, (a) if such event is an Event of Default specified in
clauses (h) or (i)
-56-
above, the RC Commitments and the Letter of Credit Commitment shall immediately
and automatically terminate and the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents shall immediately
become due and payable, and the Administrative Agent may, and upon the direction
of the Required Lenders shall, exercise any and all remedies and other rights
provided pursuant to the Loan Documents and (b) if such event is any other Event
of Default, any or all of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, and upon the
direction of the Required Lenders shall, by notice to the Borrower, declare the
RC Commitments and the Letter of Credit Commitment to be terminated whereupon
the RC Commitments and the Letter of Credit Commitment shall immediately
terminate, and (ii) with the consent of the Required Lenders, the Administrative
Agent may, and upon the direction of the Required Lenders shall, by notice of
default to the Borrower, declare the Loans, all accrued and unpaid interest
thereon and all other amounts owing under the Loan Documents to be due and
payable forthwith, whereupon the same shall immediately become due and payable,
and the Administrative Agent may, and upon the direction of the Required Lenders
shall, exercise any and all remedies and other rights provided pursuant to the
Loan Documents. Except as otherwise provided in this section 9.1, presentment,
demand, protest and all other notices of any kind are hereby expressly waived to
the extent permitted by applicable law. The Borrower hereby further expressly
waives and covenants not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, to the extent permitted by applicable law, now or at
any time hereafter in force, which might delay, prevent or otherwise impede the
performance or enforcement of any of the Loan Documents. In the event that the
Administrative Agent shall fail or refuse so to proceed, the Issuing Bank and
each Lender shall be entitled to take such action as the Required Lenders shall
deem appropriate to enforce its rights under the Loan Documents.
In the event that the RC Commitments or the Letter of Credit Commitment
shall have been terminated or all of the Notes shall have been declared due and
payable pursuant to the provisions of this section 9.1, (i) the Borrower shall
forthwith deposit an amount equal to the Letter of Credit Exposure in a cash
collateral account with and under the sole dominion and control of the
Administrative Agent and (ii) the Lenders and the Issuing Bank agree, among
themselves, that any funds received in respect of the Loan Documents from or on
behalf of the Borrower by any of the Lenders or the Issuing Bank (except funds
received by any Lender or the Issuing Bank as a result of a purchase pursuant to
the provisions of section 11.9) shall be remitted to the Administrative Agent,
and shall be applied by the Administrative Agent in payment of the Loans, the
Reimbursement Obligations and the obligations of the Borrower under the Loan
Documents in the following manner and order: (1) first, to reimburse the
Administrative Agent, the Issuing Bank and the Lenders for any expenses due from
the Borrower pursuant to the provisions of section 11.5; (2) second, to the
payment of the Commitment Fee and Letter of Credit Fee, pro rata according to
the RC Commitment Percentage of each Lender; (3) third, to the payment of any
other fees, expenses or amounts (other than the principal of and interest on the
Notes, the Reimbursement Obligations and any obligations to any Lender (and any
Affiliate of any Lender) arising out of any Interest Rate Protection
Arrangement) payable by the Borrower to the Administrative Agent, the Issuing
Bank or any of the Lenders under the Loan Documents; (4) fourth, to the payment,
pro rata according to the outstanding Loans of each Lender and outstanding
Reimbursement Obligations including any interest by a Lender therein), of
interest due thereon; (5) fifth, on a pro rata basis, to the payment of (1) the
principal outstanding on the Notes, pro rata according to each Lender's
outstanding Loans, (2) the principal outstandings on the Reimbursement
-57-
Obligations, pro rata according to the Issuing Bank's and each other Lender's
interest therein, and (3) the obligations of the Borrower to the Lenders (and
any Affiliate of any Lender) arising out of any Interest Rate Protection
Arrangements; and (6) sixth, any remaining funds shall be paid to whomsoever
shall be entitled thereto or as a court of competent jurisdiction shall direct.
10. THE ADMINISTRATIVE AGENT
------------------------
10.1 Appointment.
-----------
Each Lender hereby irrevocably designates and appoints BNY as the
Administrative Agent of such Lender under and in connection with the Loan
Documents. Each such Lender hereby irrevocably authorizes BNY as the
Administrative Agent for such Lender to take such action on its behalf under the
provisions of the Loan Documents and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
the Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement or any of the other Loan Documents, the Administrative Agent shall
have no duties or responsibilities, except those expressly set forth herein or
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into the Loan Documents or otherwise exist against the Administrative
Agent.
10.2 Delegation of Duties.
--------------------
The Administrative Agent may execute any of its duties under the Loan
Documents by or through agents or attorneys-in-fact and shall be entitled to
rely upon the advice of counsel concerning all matters pertaining to such
duties.
10.3 Exculpatory Provisions.
----------------------
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with the Loan Documents (except for its own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any officer thereof contained in the Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Administrative Agent under or in connection with, the Loan Documents or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of any of the Loan Documents or for any failure of the Borrower or
any other Person to perform its obligations hereunder or thereunder. The
Administrative Agent shall be under no obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, the Loan Documents, or to inspect the
properties, books or records of the Borrower or any Subsidiary. The
Administrative Agent shall have no liability or responsibility whatsoever to the
Borrower or any other Person as a consequence of any failure or delay in
performance, or any breach, by the Issuing Bank or any Lender of any of its
obligations under any of the Loan Documents.
-58-
10.4 Reliance by Administrative Agent.
--------------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, opinion, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower), independent accountants and other
experts selected by it. Subject to section 11.7, the Administrative Agent may
treat each Lender as the holder of all of the interests of such Lender in its RC
Commitment and in its Loans and Notes. The Administrative Agent shall have no
duty to examine or pass upon the validity, effectiveness or genuineness of the
Loan Documents or any instrument, document or communication furnished pursuant
thereto or in connection therewith, and the Administrative Agent shall be
entitled to assume that the same are valid, effective and genuine, have been
signed or sent by the proper parties and are what they purport to be. The
Administrative Agent shall be fully justified in failing or refusing to take any
action under the Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate. The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under the Loan Documents in accordance with a request of the Required
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
Notes.
10.5 Notice of Default.
-----------------
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless it
has received written notice thereof from the Issuing Bank, a Lender or the
Borrower. In the event that the Administrative Agent receives such a notice, it
shall promptly give notice thereof to the Issuer and the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided, however, that unless and until the Administrative Agent shall have
- -------- -------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem to be in the best interests
of the Lenders.
10.6 Non-Reliance.
------------
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter, including any review of the affairs of
the Borrower or the Subsidiaries, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
evaluation of and investigation into the business, operations, Property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
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own credit analysis, evaluations and decisions in taking or not taking action
under this Agreement or any of the Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, Property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall have no duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, Property, financial and other condition or creditworthiness of the
Borrower or its Subsidiaries which may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7 Indemnification.
---------------
Each Lender agrees to indemnify the Administrative Agent in its
capacity as such (to the extent not promptly reimbursed by or on behalf of the
Borrower and without limiting the obligation of the Borrower or any other Loan
Party to do so), ratably according to its Credit Exposure at such time, from and
against any and all liabilities, obligations, claims, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever including, without limitation, any amounts paid to the Lenders
(through the Administrative Agent) by the Borrower pursuant to the terms hereof,
that are subsequently rescinded or avoided, or must otherwise be restored or
returned) which may at any time (including, without limitation, at any time
following the payment of the Notes) be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement, the other Loan Documents or any other documents contemplated by or
referred to herein or the transactions contemplated hereby or any action taken
or omitted to be taken by the Administrative Agent under or in connection with
any of the foregoing; provided, however, that no Lender shall be liable for the
-------- -------
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements to the
extent resulting directly and primarily from the gross negligence or willful
misconduct of the Administrative Agent. The agreements in this section 10.7
shall survive the payment of the Notes and all other amounts payable under the
Loan Documents.
10.8 Administrative Agent in its Individual Capacity.
-----------------------------------------------
BNY and its Affiliates, may make loans to, accept deposits from, issue
letters of credit for the account of and generally engage in any kind of
business with, the Borrower and its Subsidiaries as though BNY were not the
Administrative Agent. With respect to the RC Commitment made by BNY and each
Note issued to BNY, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it was not the Administrative Agent or the Issuing
Bank, and the terms "Lender" and "Lenders" shall in each case include BNY.
10.9 Successor.
---------
If at any time the Administrative Agent deems it advisable, in its
sole discretion, it may submit to each of the Lenders a written notification of
its resignation as Administrative Agent under the Loan Documents, such
resignation to be effective on the later to occur of (i) the thirtieth day after
the date of such notice and (ii) the date upon which any successor
Administrative Agent, in accordance with the provisions of this
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section 10.9, shall have accepted in writing its appointment as such successor
Administrative Agent. Upon any such resignation of the Administrative Agent, the
Required Lenders shall have the right to appoint from among the Lenders a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders and accepted such appointment within
30 days after the retiring Administrative Agent's giving of notice of
resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which successor
Administrative Agent shall be a commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $100,000,000. Upon the acceptance of any appointment as
Administrative Agent by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent's rights, powers, privileges and duties as
Administrative Agent under the Loan Documents shall be terminated. The Borrower
and the Lenders shall execute such documents as shall be necessary to effect
such appointment. After any retiring Administrative Agent's resignation as
Administrative Agent, the provisions of section 10 shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was Administrative
Agent under the Loan Documents. If at any time hereunder there shall not be a
duly appointed and acting Administrative Agent, the Borrower agrees to make each
payment due under the Loan Documents directly to the Persons entitled thereto
during such time.
10.10 Updating Exhibits and Schedules.
-------------------------------
The Administrative Agent is hereby authorized and directed from time
to time to (i) amend Exhibit A to reflect the RC Commitments of each Lender as
of the date of each assignment pursuant to section 11.7 and, in connection
therewith, the Lending Offices and address for notices of each assignee
"Lender", (ii) amend Schedule 1.1(L) to reflect any change of address of which
the Administrative Agent has received written notice pursuant to section 11.2,
and (iii) in each such case, to send a copy thereof to each party hereto.
10.11 The Arranger.
------------
The Arranger shall have no duties or obligations under the Loan
Documents in its capacity as Arranger.
10.12 The Documentation Agent.
-----------------------
The Documentation Agent shall have no duties or obligations under the
Loan Documents in its capacity as Documentation Agent.
11. MISCELLANEOUS
-------------
11.1 Amendments and Waivers.
----------------------
With the written consent of the Required Lenders, which consent may be
transmitted by telecopier, the Administrative Agent and the appropriate Loan
Parties may, from time to time, enter into written amendments, supplements or
modifications of the Loan Documents and, with the consent of the Required
Lenders, the Administrative Agent
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on behalf of the Lenders may execute and deliver to any such parties a written
instrument waiving or consenting to the departure from, on such terms and
conditions as the Administrative Agent may specify in such instrument, any of
the requirements of the Loan Documents or any Default or Event of Default and
its consequences; provided, however, that:
(a) no such amendment, supplement, modification, waiver or consent
shall, without the written consent of all of the Lenders, (i) increase the RC
Commitments or the Letter of Credit Commitment, (ii) extend the Maturity Date or
the RC Commitment Termination Date, (iii) extend the date or decrease the amount
of any mandatory reduction of the RC Commitments pursuant to section 2.4(b)(i),
(iv) decrease the interest rate, extend the time, forgive or change the pro rata
method of payment of interest or principal on or applicable to any Note or
Reimbursement Obligation, (v) decrease the amount, extend the time, forgive or
change the pro rata method of payment of the Commitment Fee or the Letter of
Credit Fee, (vi) release all or any part of the Collateral or any Subsidiary
Guaranty except in connection with a permitted sale or other permitted
disposition of the Collateral or the applicable Subsidiary Guarantor, as the
case may be, or to the extent that the Administrative Agent shall be required or
permitted to do so under the terms and provisions of the Loan Documents, (vii)
change the definition of Required Lenders, (viii) change the sharing provisions
among the Lenders, (ix) change the several nature of the obligations of the
Lenders to make Loans and participate in Letters of Credit, or (x) change the
provisions of sections 2.9, 2.10, 2.11, 2.13, 2.14, 11.1, 11.7(a) or 11.11;
(b) without the written consent of the Administrative Agent, no such
amendment, supplement, modification or waiver shall amend, modify or waive any
provision of section 10 or otherwise change any of the rights or obligations of
the Administrative Agent under the Loan Documents; and
(c) without the written consent of the Issuing Bank, no such
amendment, supplement, modification or waiver shall amend, modify or waive any
provision relating to the Issuing Bank, the Letter of Credit Commitment or the
Letters of Credit or otherwise change any of the rights or obligations of the
Issuing Bank hereunder or under the Loan Documents.
Any such amendment, supplement, modification or waiver shall apply
equally to each of the Lenders and shall be binding upon the parties to the
applicable agreement, the Lenders, the Administrative Agent, the Issuing Bank
and all future holders of the Notes and the Reimbursement Obligations. In the
case of any waiver, the parties to the applicable agreement, the Lenders, the
Administrative Agent, and the Issuing Bank shall be restored to their former
position and rights under the Loan Documents to the extent provided for in such
waiver, and any Default or Event of Default waived shall not extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
11.2 Notices.
-------
Except as otherwise expressly provided herein, all notices, requests
and demands to or upon the respective parties hereto to be effective shall be in
writing and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made (i) when delivered by hand, (ii) one Business Day after
having been sent by
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overnight courier service, (iii) five Business Days after having been deposited
in the mail, first-class postage prepaid, or (iv) in the case of telecopier
notice, when sent and transmission confirmed (which may include electronic
confirmation), addressed as follows in the case of the Borrower, the
Administrative Agent and the Issuing Bank, and as set forth in Schedule 1.1(L)
hereto in the case of each of the Lenders, or to such other addresses as to
which the Administrative Agent may be hereafter notified by the respective
parties hereto or any future holders of the Notes:
The Borrower:
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Dirk Gastaldo,
Vice President/
Chief Financial Officer
Telephone: (805) 384-4531
Telecopy: (805) 384-4532
with a copy to:
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathon Block, Esq.
Telephone: (805) 487-0400 (ext. 106)
Telecopy: (805) 384-4505
The Administrative Agent, the Issuing Bank and/or BNY:
The Bank of New York
Communications, Publishing & Entertainment Division
One Wall Street, 16th Floor
New York, New York 10286
Attention: Wade E. Layton,
Vice President
Telephone: (212) 635-8693
Telecopy: (212) 635-8593
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with a copy to, in the case of all Borrowing Requests and Letter of Credit
Requests, prepayment notices under section 2.5(a) and conversion notices under
section 2.8, and to the attention of, in the case of all fundings by the
Lenders:
The Bank of New York, as Administrative Agent
Agency Function Administration
One Wall Street, 18th Floor
New York, New York 10286
Attention: Genoveso Caviness
Telephone: (212) 635-4694
Telecopy: (212) 635-6365 (or 6366/6367)
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent, the Issuing Bank or the Lenders pursuant to section 2.3,
2.4, 2.5, 2.8 or 2.18 shall not be effective until received.
11.3 No Waiver; Cumulative Remedies.
------------------------------
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent, the Issuing Bank or any Lender, any right, remedy, power
or privilege under any Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
under any Loan Document preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges under the Loan Documents are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties.
------------------------------------------
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement, the Notes and the
other Loan Documents.
11.5 Payment of Expenses and Taxes.
-----------------------------
The Borrower agrees, promptly upon presentation of a statement or
invoice therefor, and whether or not any Loan is made or Letter of Credit is
issued, (i) to pay or reimburse the Administrative Agent and the Arranger for
all their out-of-pocket reasonable costs and expenses incurred in connection
with the development, preparation, execution and syndication of, and any
amendment, waiver, consent, supplement or modification to, the Loan Documents,
any documents prepared in connection therewith and the consummation of the
transactions contemplated hereby and thereby, whether such Loan Documents or any
such other documents are executed and whether the transactions contemplated
thereby are consummated, including, without limitation, the reasonable fees and
disbursements of Special Counsel, (ii) to pay or reimburse the Administrative
Agent, the Issuing Bank, the Arranger and the Lenders for all of their
respective reasonable costs and expenses incurred in connection with the work-
out, enforcement or preservation of any rights under the Loan Documents and any
such documents, including, without limitation, reasonable fees and disbursements
of counsel (including the allocated cost of internal counsel) to the
Administrative Agent, the Issuing Bank, the Arranger and the Lenders
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including, without limitation, reasonable expenses of the Administrative Agent,
the Issuing Bank, the Arranger and the Lenders in connection with or
attributable to commercial finance examiners, accountants, investment banks and
environmental consultants, (iii) to pay, indemnify, and hold each Lender, the
Administrative Agent, the Issuing Bank and the Arranger harmless from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other Taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of, or consummation of any of the transactions contemplated by, or any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, any of the Loan Documents and any such other documents, and (iv) to
pay, indemnify and hold each Lender, the Administrative Agent, the Issuing Bank
and the Arranger and each of their respective officers, directors, employees and
agents harmless from and against any and all other liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable counsel fees and disbursements (including the allocated
cost of internal counsel)) with respect to the execution, delivery, enforcement
and performance of the Loan Documents or the use of the proceeds of the Loans
and Letters of Credit hereunder (all the foregoing, collectively, the
"indemnified liabilities") and, if and to the extent that the foregoing
-----------------------
indemnity may be unenforceable for any reason, the Borrower agrees to make the
maximum payment permitted under applicable law; provided, however, that the
Borrower shall have no obligation hereunder to pay indemnified liabilities to
the Administrative Agent, the Issuing Bank, the Arranger or any Lender to the
extent arising directly and primarily from the gross negligence or willful
misconduct of the Administrative Agent, the Issuing Bank, the Arranger or such
Lender, as the case may be. The agreements in this section 11.5 shall survive
the termination of the RC Commitments and the payment of the Notes and all other
amounts payable hereunder.
11.6 Lending Offices.
---------------
Subject to section 2.17(b), each Lender shall have the right at any
time and from time to time to transfer any Loan to a different office of such
Lender, provided that such Lender shall promptly notify the Administrative Agent
and the Borrower of any such change of office. Such office shall thereupon
become such Lender's Lending Office.
11.7 Successors and Assigns.
----------------------
(a) This Agreement, the Notes and the other Loan Documents to which
the Borrower is a party shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Administrative Agent, the Issuing Bank, all future
holders of the Notes and their respective successors and assigns, except that
the Borrower may not assign, delegate or transfer any of its rights or
obligations under this Agreement, the Notes and the Loan Documents to which the
Borrower is a party without the prior written consent of each Lender.
(b) Each Lender shall have the right at any time, upon written notice
to the Administrative Agent of its intent to do so, to sell or assign (each an
"Assignment") all or any part of its Loans, its RC Commitment and its Notes, on
----------
a pro rata basis to one or more of the other Lenders (or, with the written
consent of the Issuing Bank, such consent not to be unreasonably withheld or
delayed, to affiliates of such Lender or such other Lenders) or, with the
written consent of Administrative Agent and the Issuing Bank (such
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consents not to be unreasonably withheld or delayed), to any other bank,
insurance company, pension fund, mutual fund or other financial institution,
provided that (i) each such partial Assignment shall be in a minimum aggregate
amount of $5,000,000 (unless otherwise consented to by the Borrower), (ii) the
parties to each such Assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption Agreement along with a fee (the "Assignment
----------
Fee") of $3,500 with respect to the Assignment made under this Agreement and
- ---
(iii) no such assignment may be made to the Borrower or to any Affiliate of the
Borrower. Upon receipt of each such duly executed Assignment and Assumption
Agreement together with the Assignment Fee therefor in compliance with the
provisions hereof, the Administrative Agent shall (x) record the same and
signify its acceptance thereof by executing two copies of such Assignment and
Assumption Agreement in the appropriate place and delivering one copy to the
assignor and one copy to the assignee and (y) request the Borrower to execute
and deliver (1) to such assignee one or more Notes, in an aggregate principal
amount equal to the Loans assigned to, and RC Commitments assumed by, such
assignee and (2) to such assignor one or more Notes, in an aggregate principal
amount equal to the balance of such assignor Lender's Loans and RC Commitment,
if any, in each case against receipt of such assignor Lender's existing Notes.
The Borrower agrees that it shall, upon each such request of the Administrative
Agent, execute and deliver such new Notes at its own cost and expense. Upon such
delivery, acceptance and recording by the Administrative Agent, from and after
the effective date specified in such Assignment and Assumption Agreement, the
assignee thereunder shall be a party hereto and shall for all purposes of this
Agreement and the other Loan Documents be deemed a "Lender" and, to the extent
provided in such Assignment and Assumption Agreement, the assignor Lender
thereunder shall be released from its obligations under this Agreement and the
other Loan Documents.
(c) Each Lender may grant participations in all or any part of its
Loans, its Notes or its RC Commitment to any other bank, insurance company,
pension fund, mutual fund, financial institution or other entity, provided that
no such participant shall have any right to require such Lender to take or omit
to take any action under any Loan Document except any action which would require
the consent of all Lenders pursuant to section 11.1. The Borrower hereby
acknowledges and agrees that any such participant shall for purposes of sections
2.9, 11.5, 11.9 and 11.11 be deemed to be a "Lender".
(d) No Lender shall, as between and among the Borrower, the
Administrative Agent, the Issuing Bank, and such Lender, be relieved of any of
its obligations under the Loan Documents as a result of any Assignment or
granting of a participation in, all or any part of its Loans, its RC Commitment
or its Notes, except that a Lender shall be relieved of its obligations to the
extent of any Assignment of all or any part of its Loans, its RC Commitment or
its Notes pursuant to subsection (b) above.
(e) Notwithstanding anything to the contrary contained in this section
11.7, any Lender may at any time assign all or any portion of its rights under
the Loan Documents to a Federal Reserve Bank. No such assignment shall release
such Lender from its obligations thereunder.
11.8 Counterparts.
------------
This Agreement and each of the other Loan Documents (other than the
Notes) may be executed by one or more of the parties to this Agreement or to
such other Loan Document, as the case may be, on any number of separate
counterparts and all of
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said counterparts taken together shall be deemed to constitute one and the same
agreement. It shall not be necessary in making proof of any Loan Document to
produce or account for more than one counterpart signed by the party to be
charged. Any of the parties to this Agreement and the other Loan Documents may
rely on signatures of such parties hereto and thereto which are transmitted by
telecopier or other electronic means as fully as if originally signed. A set of
the copies of this Agreement and each of the other Loan Documents signed by all
the parties shall be lodged with each of the Borrower and the Administrative
Agent.
11.9 Adjustments; Set-off.
--------------------
(a) If any Lender (a "benefited Lender") shall at any time receive any
----------------
payment of all or any part of its Loans, or interest thereon, or receive any
collateral in respect thereof (whether voluntarily or involuntarily, by set-off,
pursuant to events or proceedings of the nature referred to in section 9.1 (h)
or (i), or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Loans, or interest thereon, such benefited Lender shall notify the
Administrative Agent and shall purchase for cash from the other Lenders such
portion of each such other Lender's Loans, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest, unless the benefitted Lender is required to pay
interest on the amount of the excess payment to be returned, in which case the
other Lenders shall pay their pro rata share of such interest. The Borrower
agrees that each Lender so purchasing a portion of another Lender's Loans may
exercise all rights of payment (including, without limitation, rights of set-
off) with respect to such portion as fully as if such Lender were the direct
holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided by
law, upon the occurrence and at any time during the continuance of an Event of
Default, each Lender shall have the right, without prior notice to any Loan
Party, any such notice being expressly waived by each such Loan Party to the
extent permitted by applicable law, to set off and apply against any
indebtedness, whether matured or unmatured, of such Loan Party to such Lender,
any amount owing from such Lender to such Loan Party, at, or at any time after,
the happening of any of the above-mentioned events. To the extent permitted by
applicable law, the aforesaid right of set-off may be exercised by such Lender
against each Loan Party or against any trustee in bankruptcy, custodian, debtor
in possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of such Loan Party, or against anyone else
claiming through or against such Loan Party or such trustee in bankruptcy,
custodian, debtor in possession, assignee for the benefit of creditors,
receiver, or execution, judgment or attachment creditor, notwithstanding the
fact that such right of set-off shall not have been exercised by such Lender
prior to the making, filing or issuance, or service upon such Lender of, or of
notice of, any such petition, assignment for the benefit of creditors,
appointment or application for the appointment of a receiver, or issuance of
execution, subpoena, order or warrant. Promptly after any such set-off and
application made by a Lender against a Loan Party, such Lender shall notify such
Loan Party and the Administrative Agent, provided
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that the failure to give such notice shall not affect the validity of such set-
off and application.
11.10 No Third Party Beneficiary.
--------------------------
This Agreement is among the Borrower, the Lenders, the Administrative
Agent, the Issuing Bank and the Arranger and no other Person is intended to or
shall have any rights hereunder or shall be permitted to rely hereon.
11.11 Indemnity.
---------
(a) The Borrower agrees to indemnify and hold harmless each of the
Administrative Agent, the Issuing Bank, the Arranger, each Lender and each of
their respective officers, directors, employees and agents (each an "Indemnified
-----------
Party") from and against any loss, cost, liability, damage or expense (including
- -----
the reasonable fees and out-of-pocket expenses of counsel to each such
Indemnified Party, including all local counsel hired by any such counsel)
incurred by each such Indemnified Party in investigating, preparing for,
defending against, or providing evidence, producing documents or taking any
other action in respect of, any claim, commenced or threatened litigation,
administrative proceeding or investigation under any federal securities law or
any other statute of any jurisdiction, or any regulation, or at common law or
otherwise, which is alleged to arise out of or is based upon (i) any untrue
statement or alleged untrue statement of any material fact of the Borrower or
any Subsidiary in any document or schedule executed or filed with the Securities
and Exchange Commission or any other Governmental Authority by or on behalf of
the Borrower or any Subsidiary, (ii) any omission or alleged omission to state
any material fact required to be stated in such document or schedule, or
necessary to make the statements made therein, in light of the circumstances
under which made, not misleading, (iii) any of the Loan Documents, the
transactions contemplated hereby or thereby or any acts, practices or omissions
or alleged acts, practices or omissions of the Borrower or any of its agents
relating to the use of the proceeds of any or all Letters of Credit or Loans
which are alleged to be in violation of section 2.7, or in violation of any
federal securities law or of any other statute, regulation or other law of any
jurisdiction applicable thereto, or (iv) any acquisition or proposed acquisition
by the Borrower or any Subsidiary of all or a portion of the Stock, or all or a
portion of the assets, of any Person, in each case whether or not any
Indemnified Party is a party thereto.
(b) In addition to the indemnity provided under section 11.11(a), the
Borrower agrees to defend, indemnify and hold harmless each Indemnified Party
from and against any loss, cost, liability, fine, penalties, damage or expense
(including the reasonable fees and out-of- pocket expenses of counsel to each
such Indemnified Party, including all local counsel hired by any such counsel)
suffered or incurred by each such Indemnified Party, pertaining to any release
or threatened release of a reportable quantity of any hazardous substance or
hazardous waste at any Property of the Borrower or any of its Subsidiaries (a
"Hazardous Discharge"), including, but not limited to, claims of any
-------------------
Governmental Authority or any third Person, whether arising under or on account
of any Environmental Law or tort, contract or common law, including, without
limitation, the assertion of any Lien thereunder, with respect to any Hazardous
Discharge, the presence of any hazardous substances or hazardous wastes
affecting any Property of the Borrower or any of its Subsidiaries, whether or
not the same originates or engages from such Property or any contiguous real
estate, including any loss of value of such Property as a
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result of the foregoing. The Borrower's obligations under this section 11.11(b)
shall arise upon the discovery of any Hazardous Discharge at such Property,
whether or not any Governmental Authority or any other Person has taken or
threatened any action in connection with the presence of any hazardous
substances or hazardous wastes.
(c) The indemnities set forth herein shall be in addition to any other
obligations or liabilities of the Borrower to the Indemnified Parties hereunder
or at common law or otherwise, and shall survive any termination of this
Agreement, the expiration of the RC Commitments and the payment of all
indebtedness of the Borrower hereunder and under the other Loan Documents,
provided that the Borrower shall have no obligation under this section 11.11 to
an Indemnified Party with respect to any of the foregoing to the extent arising
directly and primarily out of the gross negligence or wilful misconduct of such
Indemnified Party.
11.12 Governing Law.
-------------
This Agreement, the Notes and the other Loan Documents and the rights
and obligations of the parties under this Agreement, the Notes and the other
Loan Documents shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York, without regard to principles of
conflict of laws.
11.13 Headings.
--------
Section headings have been inserted herein and in the other Loan
Documents for convenience only and shall not be construed to be a part hereof or
thereof.
11.14 Severability.
------------
Every provision of this Agreement and the other Loan Documents is
intended to be severable, and if any term or provision hereof or thereof shall
be invalid, illegal or unenforceable for any reason, the validity, legality and
enforceability of the remaining provisions hereof or thereof shall not be
affected or impaired thereby, and any invalidity, illegality or unenforceability
in any jurisdiction shall not affect the validity, legality or enforceability of
any such term or provision in any other jurisdiction.
11.15 Integration.
-----------
All exhibits and schedules to this Agreement shall be deemed to be a
part of this Agreement or the applicable Loan Document, as the case may be.
Except for agreements between the Borrower and the Administrative Agent, the
Issuing Bank and the Arranger with respect to certain fees, this Agreement and
the other Loan Documents embody the entire agreement and understanding among the
Borrower, the Administrative Agent, the Issuing Bank, the Arranger and the
Lenders with respect to the subject matter hereof and thereof and supersede all
prior agreements and understandings among the Borrower, the Administrative
Agent, the Issuing Bank, the Arranger and the Lenders with respect to the
subject matter hereof and thereof.
11.16 Limitation of Liability.
------------------------
No claim may be made by the Borrower, any of its Subsidiaries, any
other Loan Party, any Lender or other Person against the Administrative Agent,
the Issuing
-69-
Bank, any Lender, the Arranger, or any directors, officers, employees, or agents
of any of them, for any special, indirect, consequential or punitive damages in
respect of any claim for breach of contract or any other theory of liability
arising out of or related to the transactions contemplated by any Loan Document,
or any act, omission or event occurring in connection therewith, and each of the
Borrower, its Subsidiaries, such other Loan Party, any such Lender or other
Person hereby waives, releases and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
11.17 Consent to Jurisdiction.
-----------------------
The Borrower hereby irrevocably submits to the jurisdiction of any New
York State or Federal Court sitting in the City of New York over any suit,
action or proceeding arising out of or relating to the Loan Documents. The
Borrower hereby irrevocably waives, to the fullest extent permitted by law, any
objection which it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding brought in such a court and any claim that any
such suit, action or proceeding brought in such a court has been brought in an
inconvenient forum. The Borrower hereby agrees that a final judgment in any
such suit, action or proceeding brought in such a court, after all appropriate
appeals, shall be conclusive and binding upon it.
11.18 Service of Process.
------------------
The Borrower hereby agrees that process may be served in any suit,
action, counterclaim or proceeding of the nature referred to in section 11.17 by
mailing copies thereof by registered or certified mail, postage prepaid, return
receipt requested, to the address of the Borrower set forth in section 11.2 or
to any other address of which the Borrower shall have given written notice to
the Administrative Agent. The Borrower hereby agrees that such service, to the
extent permitted by applicable law (i) shall be deemed in every respect
effective service of process upon it in any such suit, action, counterclaim or
proceeding, and (ii) shall to the fullest extent enforceable by law, be taken
and held to be valid personal service upon and personal delivery to it.
11.19 No Limitation on Service or Suit.
--------------------------------
Nothing in the Loan Documents or any modification, waiver, or
amendment thereto shall affect the right of the Administrative Agent, the
Issuing Bank or any Lender to serve process in any manner permitted by law or
limit the right of the Administrative Agent, the Issuing Bank or any Lender to
bring proceedings against the Borrower in the courts of any jurisdiction or
jurisdictions.
11.20 WAIVER OF TRIAL BY JURY.
-----------------------
THE ADMINISTRATIVE AGENT, THE ISSUING BANK, THE LENDERS AND THE
BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER
OR IN CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREIN. FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT
OF THE ADMINISTRATIVE AGENT,
-70-
THE ISSUING BANK OR THE LENDERS, OR COUNSEL TO THE ADMINISTRATIVE AGENT, THE
ISSUING BANK OR THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE LENDERS WOULD NOT, IN THE EVENT OF
SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION.
THE BORROWER ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND
THE LENDERS HAVE BEEN INDUCED TO ENTER INTO THE LOAN DOCUMENTS BY, INTER ALIA,
----- ----
THE PROVISIONS OF THIS SECTION.
11.21 Confidentiality.
---------------
The Administrative Agent, the Issuing Bank and the Lenders each agree
that, without the prior written consent of the Borrower, it will not disclose
the terms of this Agreement or any material confidential information with
respect to the Borrower, or any of its Subsidiaries which is furnished pursuant
to this Agreement to any Person except (i) its accountants, attorneys and other
advisors who have a need to know such information or its Affiliates, and in each
case who agree to be bound by the provisions of this section 11.21, (ii) to the
extent such information is requested to be disclosed to any regulatory or
administrative body or commission to whose jurisdiction the Administrative
Agent, the Issuing Bank or such Lender is subject, (iii) to the extent such
information is requested or required to be disclosed by subpoena or similar
process of applicable law or regulation, (iv) to the extent the Borrower has
previously disclosed such information publicly or such information is otherwise
in the public domain (except by virtue of a breach by the Administrative Agent,
the Issuing Bank or such Lender of its obligations under this section 11.21) at
the time of disclosure, (v) such information which is disclosed in connection
with any litigation or dispute between the Administrative Agent, the Issuing
Bank or such Lender and any Loan Party concerning this Agreement, any other
Loan Document, or any instrument or document executed or delivered in connection
herewith or therewith, (vi) such information which was in the possession of such
Person or such Person's Affiliates without the obligation of confidentiality
prior to the Administrative Agent, the Issuing Bank or such Lender furnishing
it to such Person, and (vii) in connection with a prospective assignment, grant
of a participation interest or other transfer by a Lender of any of its interest
in this Agreement or the Notes, provided that the Person to whom such
information is disclosed shall agree to be bound by the provisions of this
section 11.21.
-71-
SALEM COMMUNICATIONS CORPORATION
CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SALEM COMMUNICATIONS CORPORATION
By: /s/ Eric H. Halvorson
---------------------
Name: Eric H. Halvorson
-----------------
Title: Executive Vice President
------------------------
THE BANK OF NEW YORK,
Individually and as Administrative Agent and
Issuing Bank
By: /s/ Stephen M. Nettler
----------------------
Name: Stephen M. Nettler
------------------
Title: V.P.
----
SALEM COMMUNICATIONS CORPORATION
CREDIT AGREEMENT
BANK OF AMERICA NT & SA,
Individually and as Documentation Agent
By: /s/ Matthew J. Koenig
---------------------
Name: Matthew J. Koenig
-----------------
Title: V.P.
----
SALEM COMMUNICATIONS CORPORATION
CREDIT AGREEMENT
BANKBOSTON, N.A.
By: /s/ Jennifer R. Buras
---------------------
Name: Jennifer R. Buras
-----------------
Title: Director
--------
SALEM COMMUNICATIONS CORPORATION
CREDIT AGREEMENT
FLEET BANK, N.A.
By: /s/ Garret Komjathy
-------------------
Name: Garret Komjathy
---------------
Title: Vice President
--------------
SALEM COMMUNICATIONS CORPORATION
CREDIT AGREEMENT
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Kristina M. Mouzakis
------------------------
Name: Kristina M. Mouzakis
--------------------
Title: Assistant Vice President
------------------------
SALEM EXHIBIT A
---------------
LIST OF RC COMMITMENTS
----------------------
RC RC Commitment
Bank Commitment Percentage
- ---- ----------- -------------
The Bank of New York $20,000,000 20/75
Bank of America NT&SA $17,500,000 17.5/75
BankBoston, N.A. $12,500,000 12.5/75
Fleet Bank, N.A. $12,500,000 12.5/75
Union Bank of California, N.A. $12,500,000 12.5/75
TOTAL $75,000,000.00 100%
============== ====
SALEM EXHIBIT B
---------------
FORM OF RC NOTE
---------------
$-------------- ____________,1997
New York, New York
FOR VALUE RECEIVED, on the Maturity Date, SALEM COMMUNICATIONS CORPORATION, a
California corporation (the "Borrower"), hereby promises to pay to the
order of ________________________(the "Lender"), at the office of The Bank of
New York, as Administrative Agent (the "Administrative Agent"), located at One
Wall Street, New York, New York, 10286 or at such other place as the
Administrative Agent may specify from time to time, in lawful money of the
United States of America, the principal sum of $ , or such lesser unpaid
---------
principal balance as shall be outstanding hereunder, payable in the amounts and
at the times set forth in the Agreement (as hereinafter defined).
This RC Note shall bear interest from the date hereof on the unpaid balance
hereof payable on the dates and at the rate or rates provided for in the Credit
Agreement, dated as of September 25, 1997, by and among the Borrower, the
Lenders party thereto, Bank of America NT&SA, as Documentation Agent, and the
Administrative Agent (as the same may be amended, modified or supplemented from
time to time, the "Agreement"). Capitalized terms used herein which are defined
in the Agreement shall have the meanings therein defined. In no event shall the
interest rate payable in respect hereof exceed the Highest Lawful Rate.
This RC Note is one of the RC Notes referred to in the Agreement is subject
to the terms, set forth in the Agreement and is entitled to the benefits set
forth in the Loan Documents. The principal of this RC Note is prepayable in the
amounts and under the circumstances, and its maturity is subject to acceleration
upon the terms, set forth in the Agreement. Except as otherwise expressly
provided in the Agreement, if any payment on this RC Note becomes due and
payable on a day which is not a Business Day the maturity thereof shall be
extended to the next Business Day, and interest shall be payable at the
applicable rate or rates specified in the Agreement during such extension
period.
Presentment for payment, demand, notice of dishonor, protest, notice of
protest and all other demands and notices in connection with the delivery,
performance and enforcement of this RC Note are hereby waived, except as
specifically otherwise provided in the Agreement.
This RC Note is being delivered in, is intended to be performed in, shall be
construed and interpreted in accordance with, and be governed by the internal
laws of, the State of New York without regard to principles of conflict of laws.
This RC Note may be amended only by an instrument in writing executed
pursuant to the provisions of Section 11.1 of the Agreement.
SALEM COMMUNICATIONS CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SCHEDULE TO RC NOTE
-------------------
Type of RC Interest Interest
Loan (ABR or Borrowing Principal Rate (if Period (if Unpaid
Eurodollar or Amount of paid or Eurodollar Euro-dollar Principal Notation
Date Loan) Conversion RC Loan prepaid Loan) Loan) Amount Made By
- ---- ------------ ---------- --------- --------- ---------- ----------- --------- -------
SALEM EXHIBIT C
---------------
FORM OF BORROWING REQUEST
-------------------------
[DATE]
The Bank of New York, as Administrative Agent
One Wall Street - 16th Floor
New York, New York 10286
Attention: Wade E. Layton,
Vice President
and
The Bank of New York, as Administrative Agent
One Wall Street - 18th Floor
New York, New York 10286
Attention: Genoveso Caviness,
Agency Function Administration
Re: Credit Agreement, dated as of September 25, 1997, by and among
Salem Communications Corporation, the Lenders party thereto, The
Bank of New York, as Administrative Agent, and Bank of America
NT&SA, as Documentation Agent (as the same may be amended,
modified or supplemented from time to time, the "Agreement")
------------------------------------------------------------------
Capitalized terms used herein which are defined in the Agreement shall have
the meanings therein defined.
Pursuant to section 2.3 of the Agreement, the Borrower hereby gives notice of
its intention to borrow RC Loans in an aggregate principal amount of $______, on
__________________, which borrowing shall consist of the following RC Loan(s):
Type of RC Loan
(Eurodollar Interest Period
or ABR) Amount (for Eurodollar Loan)
----------- ------ ---------------------
(1)
(2)
Immediately after giving effect to the RC Loans and Letters of Credit to be
made and issued on the Borrowing Date set forth above, the Total Leverage Ratio
will be ______:1.00, as shown on Exhibit I attached hereto.
The Borrower hereby certifies that on the date hereof and on the Borrowing
Date set forth above, and after giving effect to the RC Loan(s) requested
hereby:
(a) The Borrower is and shall be in compliance with all of the terms,
covenants and conditions of the Agreement and the other Loan Documents.
(b) There exists and there shall exist no Default or Event of Default under
the Agreement.
(c) The proceeds of such RC Loans will be used in accordance with section 2.7
of the Agreement.
(d) Each of the representations and warranties contained in the Loan
Documents which is required to be made on such Borrowing Date is and shall be
true and correct.
IN WITNESS WHEREOF, the Borrower has caused this certificate to be executed
by its duly authorized officer as of the date and year first written above.
SALEM COMMUNICATIONS CORPORATION
By:________________________
Name:______________________
Title:_____________________
-2-
EXHIBIT I
---------
Calculation of Total Leverage Ratio
-----------------------------------
-3-
SALEM EXHIBIT D
---------------
FORM OF LETTER OF CREDIT REQUEST
--------------------------------
[DATE]
The Bank of New York, as Administrative Agent
One Wall Street - 16th Floor
New York, New York 10286
Attention: Wade E. Layton,
Vice President
and
The Bank of New York, as Administrative Agent
One Wall Street - 18th Floor
New York, New York 10286
Attention: Genoveso Caviness
Agency Function Administration
Re: Credit Agreement, dated as of September 25, 1997, by and among Salem
Communications Corporation, the Lenders party thereto, The Bank of New
York, as Administrative Agent, and Bank of America NT&SA, as
Documentation Agent (as the same may be amended, modified or
supplemented from time to time, the "Agreement")
----------------------------------------------------------------------
Capitalized terms used herein which are defined in the Agreement shall have
the meanings therein defined.
Pursuant to section 2.18 of the Agreement, the Borrower hereby requests the
Issuing Bank to issue Letter(s) of Credit in an aggregate principal amount
of $_____, on _________________, in accordance with the information annexed
hereto.
Immediately after giving effect to the RC Loans and Letters of Credit to be
made and issued on the Borrowing Date set forth above, the Total Leverage Ratio
will be _______:1.00, as shown on Exhibit I attached hereto.
The Borrower hereby certifies that on the date hereof and on the Borrowing
Date set forth above, and after giving effect to the Letters of Credit requested
hereby:
(a) The Borrower is and shall be in compliance with all of the terms,
covenants and conditions of the Agreement and the other Loan Documents.
(b) There exists and there shall exist no Default or Event of Default under
the Agreement.
(c) The proceeds of such Letters of Credit will be used in accordance with
section 2.7 of the Agreement:
(d) Each of the representations and warranties contained in the Loan
Documents which is required to be made on such Borrowing Date is and shall be
true and correct.
IN WITNESS WHEREOF, the Borrower has caused this certificate to be executed
by its duly authorized officer as of the date and year first written above.
SALEM COMMUNICATIONS CORPORATION
By:________________________
Name:______________________
Title:_____________________
-2-
LETTER OF CREDIT INFORMATION
1. Name of Beneficiary:___________________________.
2. Address of Beneficiary to which Letter of Credit will be sent:
______________________________________________________________________________.
3. Conditions under which a drawing may be made (specify any required
documentation):
______________________________________________________________________________.
4. Maximum amount to be available under such Letter of Credit: $ _______.
5. Requested date of issuance:____________________.
6. Requested date of expiration:___________________.
-3-
EXHIBIT I
---------
Calculation of Total Leverage Ratio
-----------------------------------
-4-
SALEM EXHIBIT E
---------------
FORM OF OPINION OF SPECIAL COUNSEL
----------------------------------
____________, 1997
To the Administrative Agent,
the Issuing Bank and the Lenders
under the Agreement
as defined below
Re: Credit Agreement, dated as of September 25, 1997, by and among Salem
Communications Corporation, the Lenders party thereto, The Bank of
New York, as Administrative Agent, and Bank of America NT&SA, as
documentation Agent (the "Agreement")
-----------------------------------------------------------------
We have acted as Special Counsel to the Administrative Agent in connection
with the Agreement. Capitalized terms used herein which are not otherwise
defined herein shall have the respective meanings ascribed thereto in the
Agreement.
We have examined originals or copies certified to our satisfaction of the
documents required to be delivered pursuant to the provisions of Section 5 of
the Agreement. In conducting such examination, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity to originals of all documents submitted to us as
copies.
Based upon the foregoing examination, and assuming the accuracy of (a) the
opinion of Eric H. Halvorson, general counsel for the Borrower and its
Subsidiaries, (b) the opinion of Fletcher, Heald & Hildreth, P.C., special FCC
counsel to the Borrower and its Subsidiaries, (c) the representations and
warranties of the Loan Parties contained in the Loan Documents, and (d) certain
representations of the Administrative Agent, and subject to all assumptions,
qualifications and other limitations contained in such opinions, all of which
are expressly incorporated herein by reference, we are of the opinion that all
legal preconditions to the making of the first Loans on the first Borrowing Date
under the Agreement have been satisfactorily met.
This opinion is rendered solely for your benefit in connection with the
transactions referred to herein and may not be relied upon by any other Person.
We express no opinion as to laws other than the laws of the State of New
York and the federal laws of the United States of America.
Very truly yours,
-2-
SALEM EXHIBIT F
---------------
OUTLINE OF LEGAL OPINIONS - COUNSEL TO THE BORROWER
---------------------------------------------------
In connection with the Credit Agreement (the "Agreement"), to be entered, by
---------
and among SALEM COMMUNICATIONS CORPORATION (the "Borrower"), the Lenders party
--------
thereto, THE BANK OF NEW YORK, as Administrative Agent (the "Administrative
---------------
Agent"), and BANK OF AMERICA NT&SA, as Documentation Agent, set forth below is
- -----
an outline of opinions (the "Opinions") to be included in, or covered by, the
--------
legal opinion to be delivered to the Administrative Agent, pursuant to Section
5.l(j) of the Agreement by counsel to the Borrower and its Subsidiaries. The
Opinions, including all assumptions contained therein, shall be in all respects
satisfactory to the Administrative Agent.
DEFINITIONS:
- ------------
(a) Capitalized terms used in the Opinions and which are not otherwise
defined therein shall have the respective meanings ascribed thereto in
the Agreement.
(b) When used in the Opinions, "NYUCC" shall mean Articles 1, 8 and 9 of
-----
the Uniform Commercial Code as in effect in the State of New York on
the date on which the Opinions are rendered.
(c) When used in the Opinions, the following capitalized terms shall have
the respective meanings ascribed thereto in the NYUCC (as defined
above): "Certificated Security", "Chattel Paper", "Instrument",
------------ -------- ------------- ----------
"Issuer", "Security", "Security Interest" and "Uncertificated
------ -------- ----------------- --------------
Security".
--------
OPINIONS:
- ---------
1. The Borrower has only the Subsidiaries set forth on Schedule 4.1 to
the Agreement. The shares of each corporate Subsidiary owned by the Borrower are
duly authorized, validly issued, fully paid and nonassessable. The shares of
each Subsidiary are owned free and clear of any Liens, except (i) Liens in favor
of the Administrative Agent and the Lenders pursuant to the Collateral Documents
and (ii) Permitted Liens.
2. The Borrower and each Subsidiary is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
has all requisite corporate power and authority to own its Property and to carry
on its business as now conducted, and is in good standing and authorized to do
business in each jurisdiction in which the failure to be so authorized could
reasonably be expected to have a Material Adverse Effect.
3. The Borrower and each other Loan Party has full power and authority to
enter into, execute, deliver and carry out the terms of the Loan Documents to
which it is a party, to make the borrowings contemplated thereby, to execute,
deliver and carry out the terms of the Notes and to incur the obligations
provided for therein, all of
which have been duly authorized by all proper and necessary action and are in
full compliance with its certificate of incorporation and by-laws.
4. The Loan Documents constitute the valid and legally binding
obligations of the Borrower and each other Loan Party to which it is a party,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity, whether considered in a
proceeding at law or in equity.
5. To the best of my knowledge, except as set forth in Schedule 4.6,
there are no actions, suits, arbitration proceedings or claims (whether or not
purportedly on behalf of the Borrower or any Subsidiary) pending or threatened
against the Borrower or any Subsidiary, or maintained by the Borrower or any
Subsidiary, at law or in equity, before any Governmental Authority which could
reasonably be expected to have a Material Adverse Effect. To the best of my
knowledge, there are no proceedings pending or threatened against the Borrower
or any Subsidiary which call into question the validity or enforceability of any
of the Loan Documents.
6. To the best of my knowledge, except as set forth in Schedule 4.7,
neither the Borrower nor any Subsidiary is in default under any mortgage,
indenture, contract, agreement, judgment, decree or order to which it is a party
or by which it or any of its Property is bound, which defaults, taken as a
whole, could reasonably be expected to have a Material Adverse Effect. To the
best of my knowledge, the execution, delivery or carrying out of the terms of
the Loan Documents will not constitute a default under, conflict with, require
any consent under (other than consents which have been obtained) or result in
the creation or imposition of, or obligation to create, any Lien upon the
Property of the Borrower or any Subsidiary pursuant to the terms of any such
mortgage, indenture, contract, agreement, judgment, decree or order, which
defaults, conflicts and consents, if not obtained, taken as a whole, could
reasonably be expected to have a Material Adverse Effect.
7. To the best of my knowledge, neither the Borrower nor any Subsidiary
is in default with respect to any judgment, order, writ, injunction, decree or
decision of any Governmental Authority which default could reasonably be
expected to have a Material Adverse Effect.
8. Neither the Borrower nor any Subsidiary is subject to regulation under
the Public Utility Holding Company Borrower Act of 1935, the Federal Power Act
or the Investment Company Act of 1940, and neither the Borrower nor any
Subsidiary is subject to any statute or regulation which prohibits or restricts
the incurrence of Indebtedness under the Loan Documents, including, without
limitation, statutes or regulations relative to common or contract carriers or
to the sale of electricity, gas, steam, water, telephone, telegraph or other
public utility services.
9. Neither the Borrower nor any Subsidiary is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock. If used solely for the
purposes set forth in Section 2.6 of the Agreement, no part of the proceeds of
the Loans or Letters of Credit will be used, directly or indirectly, to purchase
or carry any Margin Stock or for a
-2-
purpose which violates any law, rule or regulation of any Governmental
Authority, including without limitation the provisions of Regulations G, T, U or
X of the Board of Governors of the Federal Reserve System, as amended.
10. The fees, interest and other charges payable under the Loan Documents
do not violate any usury or similar laws of the State of California.
11. The Borrower Security Agreement, together with the delivery to the
Administrative Agent of the Certificated Securities constituting Collateral (as
defined in the Borrower Security Agreement) and the continuous possession
thereof by the Administrative Agent in the State of New York, creates a
continuing "enforceable" Security Interest in the Collateral (as defined in the
Borrower Security Agreement) in favor of the Administrative Agent. Upon (a) the
presentation for filing of the Financing Statements (as defined in the Borrower
Security Agreement) at the respective offices listed thereon together with the
appropriate filing fee therefor, (b) the delivery to the Administrative Agent of
the Instruments constituting the Collateral (as defined in the Borrower Security
Agreement), and (c) the registration, in accordance with Article 8 of the NYUCC,
of the Security Interest granted by the Borrower Security Agreement on the books
of each Person which is an Issuer of an Uncertificated Security constituting the
Collateral (as defined in the Borrower Security Agreement), (i) such Security
Interest shall be perfected, and (ii) assuming that the Administrative Agent has
acted in "good faith and without notice of any adverse claim" within the meaning
of Article 8 of the NYUCC, the Administrative Agent shall be a "bona fide
purchaser", within the meaning of such Article, with respect to Collateral (as
defined in the Borrower Security Agreement) consisting of Securities.
12. The Subsidiary Guaranty, together with the delivery to the
Administrative Agent of the Certificated Securities constituting Collateral (as
defined in the Subsidiary Guaranty) and the continuous possession thereof by the
Administrative Agent in the State of New York, creates a continuing
"enforceable" Security Interest in the Collateral (as defined in the Subsidiary
Guaranty) in favor of the Administrative Agent. Upon (a) the presentation for
filing of the Financing Statements (as defined in the Subsidiary Guaranty) of
each Guarantor (as defined in the Subsidiary Guaranty) at the respective offices
listed thereon together with the appropriate filing fee therefor, (b) the
delivery to the Administrative Agent of the Instruments constituting the
Collateral (as defined in the Subsidiary Guaranty), and (c) the registration, in
accordance with Article 8 of the NYUCC, of the Security Interest granted by the
Subsidiary Guaranty on the books of each Person which is an Issuer of an
Uncertificated Security constituting the Collateral (as defined in the
Subsidiary Guaranty), (i) such Security Interest shall be perfected, and (ii)
assuming that the Administrative Agent has acted in "good faith and without
notice of any adverse claim" within the meaning of Article 8 of the NYUCC, the
Administrative Agent shall be a "bona fide purchaser", within the meaning of
such Article, with respect the Collateral (as defined in the Subsidiary
Guaranty) consisting of Securities.
13. Neither the Administrative Agent nor any Lender is required to comply
with the requirements of any foreign lender statute in the State of California
in order to avail itself of the remedies provided thereby.
-3-
Exhibit G
[LETTERHEAD OF FLETCHER, HEALD & HILDRETH, P.L.C.]
SEPTEMBER 25, 1997
The Bank of New York, as Administrative Agent
One Wall Street
New York, NY 10286
and each Lender from
time to time party
to the Credit Agreement
defined below
Re: Salem Communications Corporation
Dear Sirs:
We have represented Salem Communications Corporation (the "Borrower") and
the Subsidiaries as special counsel before the Federal Communications Commission
("FCC") with respect to matters related to the Communications Act of 1934, as
amended, and the rules, regulations, interpretations, policies, and published
opinions of the FCC (collectively, the "Communications Laws") in connection with
the FCC licenses held by the Subsidiaries for the Broadcasting Stations owned by
the Borrower and its Subsidiaries and regulation by the FCC under the
Communications Laws of the operations of such Stations as well as in connection
with the regulation by the FCC of the Borrower's or a Subsidiary's operation of
broadcast stations not licensed to the Borrower or a Subsidiary. Capitalized
terms used herein and not otherwise defined have the respective meanings given
those terms in the Credit Agreement, dated as of September 25, 1997
("Agreement"), by and among the Borrower, the lenders party thereto, The Bank of
New York, as Administrative Agent, and Bank of America NT&SA, as Documentation
Agent.
This opinion is being furnished to you at the request of the Borrower and
the Subsidiaries pursuant to Section 5.1(k) of the Agreement.
FLETCHER, HEALD & HILDRETH, P.L.C.
The Bank of New York
September 25, 1997
Page 2
As to questions of fact relevant to this opinion, we have relied
solely upon (a) a review of the pertinent public files of the FCC and
inquiries of appropriate staff members of the FCC, (b) an examination of
appropriate files of this firm and an inquiry of this firm's lawyers who
have had substantial responsibility for the Borrower's legal matters
handled by this firm, and (c) representations made by the Borrower in the
Agreement and by it to the FCC in documents and filings which are available
in the public files of the FCC. We have assumed the correctness and
completeness of FCC public files and of records and certificates issued by
the FCC. We have not performed any on-site investigations of facilities
owned or operated by the Borrower and the Subsidiaries, and in any event do
not express any opinion regarding the actual operations of the Broadcasting
Stations. You should be aware that records of the FCC that are public as a
matter of law (e.g., pursuant to the Federal Freedom of Information Act)
may not, in fact, be contained in the public files of the FCC which we
examined in connection with this opinion. Furthermore, there may be records
of matters pending at the FCC that are not available for inspection by the
public as a matter of law.
We have also examined such provisions of the Communications Laws as we
have deemed necessary for purposes of this opinion. This opinion is limited
to matters arising under the Communications Laws, and we express no opinion
as to any other laws.
Based upon and subject to the foregoing, and to the further
qualifications, assumptions, and limitations set forth herein, we are of
the opinion that:
1. The Borrower and the Subsidiaries are the registered holders of all
radio licenses duly issued by the FCC in respect of all Broadcasting
Stations owned by the Borrower and the Subsidiaries, as listed in
Schedule A to this opinion. Such licenses constitute all of the
authorizations of the FCC necessary for the operation of the
Broadcasting Stations owned by the Borrower and the Subsidiaries, and
such licenses are validly held by the Borrower and the Subsidiaries
and in full force and effect. To the best of our knowledge, neither
the Borrower nor any Subsidiary is a party to any investigation,
notice of violation, order or complaint issued by or before the FCC.
To the best of our knowledge, there are no proceedings by or before
the FCC, other than rulemaking proceedings or similar proceedings of
general applicability to entities such as the Borrower or Subsidiaries
or to facilities such as the Broadcasting Stations, which could
reasonably be expected to materially threaten or adversely affect the
validity of any such licenses.
2. To the best of our knowledge, the Borrower and each Subsidiary have
duly and timely filed all filings which are required to be filed by
the Borrower and each Subsidiary
FLETCHER, HEALD & HILDRETH, P.L.C.
The Bank of New York
September 25, 1997
Page 3
under the Communications Act, the failure to file of which could
reasonably be expected to have a Material Adverse Effect.
3. No order, approval or consent by the FCC is required for the
execution, delivery and performance of the Loan Documents, except that
any exercise of rights or remedies under the Loan Documents
constituting an exercise of control over, or transfer of control of,
any of the Broadcasting Station licenses issued by the FCC will be
subject to compliance with the Communications Act, including the
obtaining of any required prior approval of the FCC.
This opinion is furnished to you by this firm as special
communications counsel to the Borrower. This opinion is solely for
your benefit under the Agreement and the Loan Documents and may not be
relied upon by any other person or by you in any other context.
Very truly yours,
FLETCHER, HEALD & HILDRETH, P.L.C.
By:/s/JAMES P. RILEY
--------------------------------
James P. Riley
SCHEDULE A
----------
Call Sign Community of License
- --------- --------------------
KBIQ (FM) Manitou Springs, CO
KGFT (FM) Pueblo, CO
KPRZ (FM) Fountain, CO
KTSL (FM) Medical Lake, WA
WHLO (AM) Akron, OH
WHK (FM) Canton, OH
WITH (AM) Baltimore, MD
WTSJ (AM) Cincinnati, OH
KPXQ (AM) Phoenix, AZ
KKMS (AM) Richfield, MN
WHK (AM) Cleveland, OH
KFAX (AM) San Francisco, CA
KKLA (AM) San Bernardino, CA
KWRD (FM) Arlington, TX
KGNW (AM) Seattle-Burien, WA
KLFE (AM) Seattle, WA
WEZE (AM) Boston, MA
WPZE (AM) Boston, MA
KKLA (FM) Los Angeles, CA
KAVC (FM) Rosamond, CA
Call Sign Community of License
- --------- --------------------
WFIL (AM) Philadelphia, PA
WZZD (AM) Philadelphia, PA
KPRZ (AM) San Marcos-Poway, CA
WMCA (AM) New York, NY
WYLL (FM) Des Plaines, IL
WWDJ (AM) Hackensack, NJ
KLTX (AM) Long Beach, CA
KRKS (FM) Boulder, CO
KRKS (AM) Denver, CO
KNUS (AM) Denver, CO
WRFD (AM) Columbus-Worthington, OH
KPDQ (AM) Portland, OR
KPDQ (FM) Portland, OR
WORD (FM) Pittsburgh, PA
WPIT (AM) Pittsburgh, PA
KSLR (AM) San Antonio, TX
KKHT (FM) Conroe, TX
KENR (AM) Houston, TX
KFIA (AM) Carmichael, CA
KTKZ (AM) Sacramento, CA
KDAR (FM) Oxnard, CA
WAVA (FM) Arlington, VA
SALEM EXHIBIT H
---------------
FORM OF COMPLIANCE CERTIFICATE
------------------------------
[DATE]
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention: Wade E. Layton,
Vice President
Reference is made to the Credit Agreement, dated as of September 25,
1997, by and among Salem Communications Corporation, the Lenders party thereto,
The Bank of New York, as Administrative Agent, and Bank of America NT&SA, as
Documentation Agent (as the same may be amended, modified or supplemented from
time to time, the "Agreement"). Capitalized terms used herein which are defined
---------
in the Agreement shall have the meanings therein defined.
There exists no violation of any of the terms or provisions of the
Loan Documents, or the occurrence of any condition or event which would
constitute a Default or Event of Default, except ____________.
The Total Leverage Ratio as of ______________ for the four fiscal
quarter period ended ______________ is __._:1.00, as determined on Exhibit I
attached hereto.
The ratio of Consolidated Annual Operating Cash Flow to Pro/Forma Debt
Service as of _____________ is __._:1.00, as determined on Exhibit I attached
hereto.
The ratio of Consolidated Annual Operating Cash Flow to Pro/Forma
Interest Expense as of ___________________ is __._:1.00, as determined on
Exhibit I attached hereto.
The ratio of Consolidated Annual Operating Cash Flow to Fixed Charges
as of _______________ is __._:1.00, as determined on Exhibit I attached hereto.
SALEM COMMUNICATIONS CORPORATION
By:________________________
Name:______________________
Title:_____________________
EXHIBIT I
---------
Calculation of Total Leverage Ratio
-----------------------------------
Calculation of Ratio of
-----------------------
Consolidated Annual Operating Cash Flow
---------------------------------------
to Pro-Forma Debt Service
-------------------------
Calculation of Ratio of
-----------------------
Consolidated Annual Operating Cash Flow
---------------------------------------
to Pro-Forma Interest Expense
-----------------------------
Calculation of Ratio of
-----------------------
Consolidated Annual Operating Cash Flow
---------------------------------------
to Fixed Charges
----------------
SALEM EXHIBIT I
---------------
FORM OF BORROWER SECURITY AGREEMENT
-----------------------------------
BORROWER SECURITY AGREEMENT (as the same may be amended, supplemented or
otherwise modified from time to time, this "Agreement"), dated as of September
---------
25, 1997, by and between SALEM COMMUNICATIONS CORPORATION, a California
corporation (the "Borrower"), and THE BANK OF NEW YORK (the "Administrative
-------- --------------
Agent"), in its capacity as Administrative Agent for the Lenders under the
- -----
Credit Agreement referred to below and the Rate Protection Lenders as defined
therein.
RECITALS
--------
I. Reference is made to the Credit Agreement, dated as of the date
hereof, by and among the Borrower, the Lenders party thereto, the Administrative
Agent, and Bank of America NT&SA, as Documentation Agent (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
------
Agreement").
- ---------
II. It is a condition precedent to the making of all loans and all other
extensions of credit under the Credit Agreement that the Borrower shall have
executed and delivered this Agreement.
Therefore, in consideration of the Recitals, the terms and conditions herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Borrower and the Administrative Agent
hereby agree as follows:
1. Defined Terms
-------------
(a) Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
(b) When used in this Agreement, the following capitalized terms shall have
the respective meanings ascribed thereto as follows:
"Collateral": as defined in section 2.
"Equity Interest": (i) with respect to a corporation, the capital stock
---------------
thereof, (ii) with respect to a partnership, a partnership interest therein, all
rights of a partner in such partnership, whether arising under the partnership
agreement of such partnership or otherwise; (iii) with respect to a limited
liability company, a membership interest therein, all rights of a member of
such limited liability company, whether arising under the limited liability
company agreement of such limited liability company or otherwise; (iv) with
respect to any other firm, association, trust, business enterprise or other
entity, any equity interest therein, any interest therein which entitles the
holder thereof to share in the revenue, income, earnings or losses thereof or to
vote or otherwise participate in any election of one or more members of the
Managing Person thereof, and (v) all
warrants and options in respect of any of the foregoing and all other securities
which are convertible or exchangeable therefor.
"Event of Default": as defined in section 6.
----------------
"Financing Statements": the UCC financing statements executed by the
--------------------
Borrower and delivered pursuant to the Credit Agreement.
"Grants of Security Interests": collectively, the Grant of Security
----------------------------
Interest (Patents) and the Grant of Security Interest (Trademarks), in the form
of Annexes B-1 and B-2 hereto, respectively, in each case appropriately
completed and signed by the Borrower.
"NYUCC": the UCC as in effect in the State of New York on the date hereof.
-----
"Obligations": all of the obligations and liabilities of the Borrower under
-----------
the Loan Documents and under each Interest Rate Protection Arrangement entered
into by the Borrower with a Rate Protection Lender, in each case whether fixed,
contingent, now existing or hereafter arising, created, assumed, incurred or
acquired, as such obligations and liabilities may be amended, increased,
modified, renewed, refinanced by the Administrative Agent and the Lenders,
refunded or extended from time to time.
"Office Location": as defined in section 3(a).
---------------
"Patents": all patents issued under the laws of the United States of America
-------
and all patent applications filed with the United States Patent and Trademark
Office, and all of the rights associated with each of the foregoing.
"Proceeds": as defined in the NYUCC, together with (i) all dividends,
--------
distributions and income on and in respect of all of the Securities and
Instruments and all other rights and benefits in respect thereof, and (ii) with
respect to the Patents and Trademarks, all renewals thereof, all proceeds of
infringement suits, all rights to sue for infringement, all license royalties,
all reissues, divisions, continuations, extensions and continuations-in-part
thereof.
"Rate Protection Lenders": collectively, the Lenders and any affiliates
-----------------------
of the Lenders which from time to time enter or have entered into Interest Rate
Protection Arrangements with the Borrower.
"Registrations": (i) patents issued under the laws of the United States of
-------------
America, (ii) patent applications filed with the United States Patent and
Trademark Office, and (iii) all registered trademarks.
"Trademarks": (i) all rights under the laws of the United States of America,
----------
and each State thereof, to trademarks, together with all registrations thereof,
applications therefor and all of the rights associated therewith, and (ii) the
goodwill of the Borrower's business symbolized by registered trademarks.
-2-
"Transaction Statement": a transaction statement in the form of Annex A
---------------------
hereto.
"UCC": with respect to any jurisdiction, Articles 1, 8 and 9 of the
---
Uniform Commercial Code as from time to time in effect in such jurisdiction.
(c) When used in this Agreement, the following capitalized terms shall
have the respective meanings ascribed thereto in the NYUCC: "Account",
-------
"Certificated Security", "Chattel Paper", "Document", "Equipment", "Fixture",
--------------------- ------------- -------- --------- -------
"General Intangible", "Instrument", "Inventory", "Issuer", "Secured Party",
------------------ ---------- --------- ------ -------------
"Security", "Security Interest" and "Uncertificated Security".
-------- ----------------- -----------------------
2. Grant of Security Interest
--------------------------
To secure the prompt and complete payment, observance and
performance of the Obligations, the Borrower hereby grants to the Administrative
Agent, for its benefit and the ratable benefit of the Lenders, the Issuing Bank
and the Rate Protection Lenders, a Security Interest in and to all of the
Borrower's right, title and interest in and to all: Accounts, Chattel Paper,
Documents, Equipment, Fixtures, General Intangibles, Instruments, including,
without limitation, Instruments evidencing intercompany Indebtedness, Inventory,
Patents, Trademarks, Equity Interests in each Person which now is or may
hereafter become a Subsidiary of the Borrower, whether or not evidenced by a
Security, and all Proceeds of all of the foregoing, in each case whether now
owned or existing or hereafter arising or acquired, and including, without
limitation, all licenses, approvals, permits and other authorizations issued by
the FCC, including the Proceeds of any sale or other disposition thereof, in
each case to the extent that a security interest therein is not prohibited by
law, provided that to the extent that a security interest therein is now so
prohibited and to the extent that such security interest at any time hereafter
shall no longer be so prohibited, then such security interest shall
automatically and without any further action attach and become fully effective
at that time (giving effect to any retroactive effect to any change in
applicable law or regulation) (collectively, the "Collateral").
----------
3. Representations and Warranties
------------------------------
The Borrower hereby represents and warrants to the Administrative Agent
as follows:
(a) Chief Executive Office. As of the date hereof, the Borrower's
----------------------
place of business or, if the Borrower has more than one place of business, its
chief executive office, is, and has been continuously for the immediately
preceding 5 month period, located at the address set forth for notices to the
Borrower contained in the Credit Agreement (the "Office Location"). The Borrower
has not changed its legal name during the six year period immediately preceding
the date hereof.
(b) Information. As of the date hereof, all of the information set forth
-----------
on each of the Schedules hereto is true, complete and correct.
(c) Security Interest. This Agreement, together with the delivery to the
-----------------
Administrative Agent of the Certificated Securities constituting Collateral and
the
-3-
continuous possession thereof by the Administrative Agent in the State of New
York, creates a continuing "enforceable" Security Interest in the Collateral in
favor of the Administrative Agent. Upon (i) the presentation for filing of the
Financing Statements at the respective offices listed thereon together with the
appropriate filing fee therefor, (ii) the delivery to the Administrative Agent
of the Instruments constituting the Collateral, and (iii) the registration, in
accordance with Article 8 of the NYUCC, of the Security Interest granted hereby
on the books of each Person which is an Issuer of an Uncertificated Security
constituting the Collateral, and (iv) the filing of the Grants of Security
Interests in the United States Patent and Trademark Office with respect to
Patents, Registrations, and Trademarks, (A) such Security Interest shall be
perfected, and (B) assuming that the Administrative Agent has acted in "good
faith and without notice of any adverse claim" within the meaning of Article 8
of the NYUCC, the Administrative Agent shall be a "bona fide purchaser", within
the meaning of such Article, with respect to the Collateral consisting of
Securities.
(d) Absence of Liens. There are no Liens upon the Collateral other than
----------------
Permitted Liens, if any.
(e) Equity Interests. The Equity Interests listed on Schedule 3(e) hereto
----------------
constitute, as of the date hereof, all of the Equity Interests in each
Subsidiary in which the Borrower has any right, title or interest, and each such
Equity Interest issued by a corporate Issuer has been duly authorized, validly
issued and fully paid for, and is non-assessable. As of the Effective Date,
except as set forth on Schedule 3(e), (i) no Subsidiary of the Borrower has
issued any securities convertible into, or options or warrants for, any common
or preferred equity securities thereof and (ii) there are no agreements, voting
trusts or understandings binding upon the Borrower or any of its Subsidiaries
with respect to the voting securities of any of such Subsidiary or affecting in
any manner the sale, pledge, assignment or other disposition thereof, including
any right of first refusal, option, redemption, call or other right with respect
thereto, whether similar or dissimilar to any of the foregoing.
(f) Chattel Paper, Documents and Instruments. The Chattel Paper, Documents
-----------------------------------------
and Instruments listed on Schedule 3(f) hereto constitute, as of the date
hereof, all of the Chattel Paper, Documents and Instruments which constitute the
Collateral, and, to the best of the Borrower's knowledge, all such Chattel
Paper, Documents and Instruments have been duly authorized, issued and
delivered, and constitute the legal, valid, binding and enforceable obligations
of the respective makers thereof.
(g) Accounts. As of the date hereof, all records concerning any Account
--------
constituting the Collateral are located at its Office Location, and no such
Account is evidenced by a promissory note or other instrument.
(h) Equipment and Inventory. Except for Equipment and Inventory in transit
-----------------------
with common carriers, the Borrower has exclusive possession and control of all
Equipment and Inventory constituting the Collateral, all of which is as of the
date hereof and has been continuously for the 5 month period immediately
preceding the date hereof, located at one or more of the places listed on
Schedule 3(h) hereto.
-4-
(i) Patents and Trademarks. The Borrower has no Registrations relating to
----------------------
Patents other than those listed on Schedule 3(i) hereto, and each such
Registration is subsisting and is not invalid or unenforceable, in whole or in
part, except to the extent that the unenforceability thereof could not
reasonably be expected to have a material adverse effect on the value of the
Patents taken as a whole. The Borrower has no Registrations relating to
Trademarks other than those listed on Schedule 3(i) hereto, and each such
Registration is subsisting and has not been adjudged invalid or unenforceable,
in whole or in part, except to the extent that the unenforceability thereof
could not reasonably be expected to have a material adverse effect on the value
of the Trademarks taken as a whole. To the best of the Borrower's knowledge,
each Patent and Trademark constituting Collateral is valid and enforceable.
Except for Permitted Liens, the Borrower is the sole and exclusive owner of the
entire and unencumbered right, title and interest in and to each of the Patents
and Trademarks constituting Collateral, free and clear of all Liens. To the best
of the Borrower's knowledge, no claim has been made that the use of any Patent
or Trademark violates the rights of any third person. The Borrower has used
consistent standards of quality in its manufacture of products sold under the
Patents and Trademarks.
4. Covenants of the Borrower
-------------------------
The Borrower hereby covenants with the Administrative Agent as follows:
(a) Chief Executive Office. The Borrower shall maintain its place of
----------------------
business, or if the Borrower has more than one place of business, its chief
executive office, at the Office Location or at such other location in respect of
which (A) the Borrower shall have provided the Administrative Agent with prior
written notice thereof, and (B) UCC financing statements (or amendments
thereto), in form and substance reasonably satisfactory to the Administrative
Agent, shall have been filed within two months of such change.
(b) Further Assurances. The Borrower shall, at its own expense,
------------------
promptly execute and deliver all certificates, documents, instruments, financing
and continuation statements and amendments thereto, notices and other
agreements, and take all further action, that the Administrative Agent may
reasonably request from time to time, in order to perfect and protect the
Security Interest granted hereby or to enable the Administrative Agent to
exercise and enforce its rights and remedies hereunder with respect to the
Collateral. The Borrower hereby irrevocably appoints the Administrative Agent as
the Borrower's true and lawful attorney-in-fact, in the name, place and stead of
the Borrower, to perform on behalf of the Borrower any and all obligations of
the Borrower under this Agreement, and the Borrower agrees that the power of
attorney herein granted constitutes a power coupled with an interest, provided,
however, that the Administrative Agent shall have no obligation to perform any
such obligation and such performance shall be at the sole cost and expense of
the Borrower. If the Borrower fails to comply with any of its obligations
hereunder, the Administrative Agent may do so in the Borrower's name or in the
Administrative Agent's name, but at the Borrower's expense, and the Borrower
hereby agrees to reimburse the Administrative Agent in full for all reasonable
expenses, including reasonable attorney's fees, incurred by the Administrative
Agent in connection therewith.
-5-
(c) Information. The Borrower at its own expense shall furnish to the
-----------
Administrative Agent such information, reports, statements and schedules with
respect to the Collateral as the Administrative Agent may reasonably request
from time to time.
(d) Defense of Collateral. The Borrower at its own expense shall defend the
---------------------
Collateral against all claims of any kind or nature (other than Permitted Liens,
if any) of all Persons at any time claiming the same or any interest therein
adverse to the interests of the Administrative Agent, the Issuing Bank, any Rate
Protection Lender or any Lender, and the Borrower shall not cause, permit or
suffer to exist any Lien upon the Collateral other than Permitted Liens, if any.
(e) Uncertificated Securities. The Borrower shall cause each Person which is
-------------------------
an Issuer of an Uncertificated Security constituting Collateral (i) to register
the Security Interest granted hereby upon the books of such Person in accordance
with Article 8 of the NYUCC, and (ii) to issue to the Administrative Agent an
initial Transaction Statement and issue to the Administrative Agent subsequent
Transaction Statements in accordance with Section 8-408 of the UCC in effect in
the State of New York.
(f) Delivery of Pledged Collateral. Each Certificated Security representing
-------------------------------
an Equity Interest in a Person which is or shall become a Subsidiary of the
Borrower shall be promptly delivered to the Administrative Agent, to be held by
the Administrative Agent pursuant hereto, in suitable form for transfer by
delivery or accompanied by duly executed documents of transfer or assignment in
blank, all in form and substance satisfactory to the Administrative Agent. The
Borrower agrees that until so delivered, each such Certificated Security shall
be held by the Borrower in trust for the benefit of the Administrative Agent and
be segregated from the other Property of the Borrower.
(g) Chattel Paper, Documents and Instruments. All of the Instruments,
----------------------------------------
Documents and Chattel Paper now or hereafter owned by or in the possession of
the Borrower which constitute Collateral (other than checks received in the
ordinary course of collection) shall be promptly delivered to the Administrative
Agent, to be held by the Administrative Agent pursuant hereto, in suitable form
for transfer by delivery or accompanied by duly executed documents of transfer
or assignment in blank, all in form and substance reasonably satisfactory to the
Administrative Agent. The Borrower agrees that, with respect to all items of the
Collateral which it is or shall hereafter be obligated to deliver to the
Administrative Agent, until so delivered such items shall be held by the
Borrower in trust for the benefit of the Administrative Agent and be segregated
from the other Property of the Borrower.
(h) Accounts. Except as otherwise provided in this section 4(h), the Borrower
--------
shall continue to collect in accordance with its customary practice, at its own
expense, all amounts due or to become due to the Borrower in respect of the
Borrower's Accounts and, prior to the occurrence of an Event of Default, the
Borrower shall have the right to adjust, settle or compromise the amount or
payment of any such Account, all in accordance with its customary practices. In
connection with such collections, the Borrower may take and, at the direction of
the Administrative Agent at any time that an Event of Default shall have
occurred and be continuing shall take, such action as the Borrower
-6-
or the Administrative Agent may reasonably deem necessary or advisable to
enforce collection of such Accounts.
(i) Equipment and Inventory. The Borrower shall keep the Equipment and
-----------------------
Inventory constituting Collateral at the places listed on Schedule 3(h) hereto,
and at such other places located within the United States in respect of which
(i) the Borrower shall have provided the Administrative Agent with prior written
notice, and (ii) UCC financing statements (or amendments thereto), in form and
substance satisfactory to the Administrative Agent, shall have been filed within
two months of such change. The Borrower shall promptly furnish to the
Administrative Agent a statement respecting any material loss or damage to any
of the Equipment or Inventory constituting Collateral except to the extent that
such loss or damage shall be insured pursuant to policies required to be
maintained pursuant to the Credit Agreement.
(j) Patent and Trademarks. The Borrower will continue to use for the
---------------------
duration of this Agreement, consistent standards of quality in its manufacture
of products sold under the Patents and Trademarks constituting Collateral. The
Borrower shall give to the Administrative Agent prompt written notice thereof in
the event that the Borrower shall obtain any right to any new Patent or
Trademark or to any reissue, division, continuation, renewal, extension, or
continuation-in-part of any Patent or Trademark. The Borrower shall prosecute
diligently any applications of the Patents and Trademarks constituting
Collateral pending as of the date of this Agreement or thereafter, and preserve
and maintain all rights in applications of Patents and Trademarks constituting
Collateral consistent with past practice, including the payment of all
maintenance fees, except to the extent the failure so to preserve or maintain
such rights could not reasonably be expected to have a material adverse effect
on either (i) the value of the Patents taken as a whole, or (ii) the value of
the Trademarks taken as a whole. The Borrower shall not abandon any right to
file an application or any pending application for any Patent or Trademark
unless the failure so to do could not reasonably be expected to have a material
adverse effect on either (i) the value of the Patents taken as a whole, or (ii)
the value of the Trademarks taken as a whole. The Borrower agrees that it will
not enter into any agreement, including a license agreement, with respect to any
Patent or Trademark which is inconsistent with the Borrower's past practices of
licensing Patents or Trademarks as the case may be. The Borrower hereby grants
to the Administrative Agent the right to visit the Borrower's plants and
facilities which manufacture, inspect or store products sold under any of the
Patents and Trademarks, and to inspect the products and quality control records
relating thereto at reasonable times during regular business hours upon
reasonable prior notice.
5. Other Agreements of the Borrower
--------------------------------
(a) No Duty to Preserve. Except as otherwise required by law, the Borrower
-------------------
agrees that, with respect to the Collateral, neither the Administrative Agent,
the Issuing Bank, any Rate Protection Lender nor any Lender has any obligation
to preserve rights against prior or third parties.
(b) Administrative Agent's Duty With Respect to Collateral. The
------------------------------------------------------
Administrative Agent's only duty with respect to the Collateral delivered to it
shall be to use reasonable care in the custody and preservation of the
Collateral, and the Borrower agrees that if the Administrative Agent accords the
Collateral substantially the same kind
-7-
of care as it accords its own Property, such care shall conclusively be deemed
reasonable. In the event that all or any part of the Certificated Securities or
Instruments constituting the Collateral are lost, destroyed or wrongfully taken
while such Certificated Securities or Instruments are in the possession of the
Administrative Agent, the Borrower agrees that it will use its best efforts to
cause the delivery of new Certificated Securities or Instruments in place of the
lost, destroyed or wrongfully taken Certificated Securities or Instruments upon
request therefor by the Administrative Agent, without the necessity of any
indemnity bond or other security, other than the Administrative Agent's
agreement of indemnity upon usual and customary terms therefor. Anything herein
to the contrary notwithstanding, the Administrative Agent shall not be under any
duty to send notices, perform services, exercise any rights of collection,
enforcement, conversion or exchange, vote, pay for insurance, taxes or other
charges or take any action of any kind in connection with the management of the
Collateral.
(c) Liability of Borrower under Contracts and Agreements Included in the
--------------------------------------------------------------------
Collateral. Anything herein to the contrary notwithstanding, (i) the Borrower
- ----------
shall remain liable under the contracts and agreements included in the
Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (ii) the exercise by the Administrative Agent, the Issuing Bank, any
Rate Protection Lender or any Lender of any of its rights hereunder shall not
release the Borrower from any of its duties or obligations under any such
contract or agreement, (iii) neither the Administrative Agent, the Issuing Bank,
any Rate Protection Lender nor any Lender shall have any obligation or
liability, including indemnification obligations, under any such contract or
agreement by reason of this Agreement, nor shall the Administrative Agent, the
Issuing Bank, any Rate Protection Lender or any Lender be obligated to perform
any of the obligations or duties of the Borrower thereunder, to make any
payment, to make any inquiry as to the nature or sufficiency of any payment
received by the Borrower or the sufficiency of any performance by any party
under any such contract or agreement or to take any action to collect or enforce
any claim for payment assigned hereunder, and (iv) neither the Administrative
Agent, the Issuing Bank, any Rate Protection Lender nor any Lender shall be
under any duty to send notices, perform services, exercise any rights of
collection, enforcement, conversion or exchange, vote, pay for insurance, taxes
or other charges or take any action of any kind in connection with the
management of the Collateral.
6. Events of Default
-----------------
Each of the following shall constitute an "Event of Default":
----------------
(a) If the Borrower shall fail to observe or perform any term, covenant
or agreement contained in this Agreement; or
(b) The occurrence and continuance of an Event of Default under, and as
such term is defined in, the Credit Agreement.
-8-
7. Remedies
--------
(a) Upon the occurrence of an Event of Default or at any time thereafter
during the continuance thereof, the Administrative Agent may:
(i) exercise any and all rights and remedies (A) granted to a Secured
Party by the UCC in effect in the State of New York or otherwise allowed at
law, and (B) otherwise provided by this Agreement, and
(ii) dispose of the Collateral as it may choose, so long as every aspect
of the disposition including the method, manner, time, place and terms are
commercially reasonable, and the Borrower agrees that, without limitation,
the following are each commercially reasonable: (A) the Administrative
Agent shall not in any event be required to give more than 10 days' prior
notice to the Borrower of any such disposition, (B) any place within the
City of New York or the Counties of Nassau, Suffolk, and Westchester may be
designated by the Administrative Agent for disposition, and (C) the
Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was
so adjourned.
(b) The Borrower acknowledges and agrees that the Administrative Agent may
elect, with respect to the offer or sale of any or all of the Equity Interests
constituting the Collateral, to conduct such offer and sale in such a manner as
to avoid the need for registration or qualification of such Equity Interests or
the offer and sale thereof under any Federal or state securities laws and that
the Administrative Agent is authorized to comply with any limitation or
restriction in connection with such sale as counsel may advise the
Administrative Agent is reasonably necessary in order to avoid any violation of
applicable law, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Equity Interests, or in order to obtain any required approval of
the sale or of the purchaser by any Governmental Authority. The Borrower further
acknowledges and agrees that any such transaction may be at prices and on terms
less favorable than those which may be obtained through a public sale and not
subject to such restrictions and agrees that, notwithstanding the foregoing, the
Administrative Agent is under no obligation to conduct any such public sale and
may elect to impose any or all of the foregoing restrictions, or any other
restrictions which may be reasonably necessary in order to avoid any such
registration or qualification, at its sole discretion or with the consent or
direction of the Required Lenders, and that any such offer and sale so conducted
shall be deemed to have been made in a commercially reasonable manner.
(c) To the extent permitted by law, the Borrower hereby expressly waives and
covenants not to assert any appraisement, valuation, stay, extension, redemption
or similar laws, now or at any time hereafter in force, which might delay,
prevent or otherwise impede the performance or enforcement of this Agreement.
-9-
(d) Notwithstanding anything to the contrary contained in this
Agreement, any other Loan Document or in any other agreement, instrument or
document executed by the Borrower and delivered to the Administrative Agent, the
Issuing Bank or any Lender, neither the Administrative Agent, the Issuing Bank
nor any Lender will take any action pursuant to this Agreement, any other Loan
Document or any other document referred to above which would constitute or
result in any assignment of any license, approval, permit, certificate or other
authorization issued by the FCC or any change of control of the Borrower or any
Subsidiary if such assignment or change of control would require, under then
existing law, the prior approval of the FCC without first obtaining such prior
approval of the FCC. Upon the occurrence of an Event of Default or at any time
during the continuance thereof, the Borrower waives, to the extent permitted by
law, any right it may have to oppose, and agrees to take any action that the
Administrative Agent may reasonably request in order to obtain from the FCC,
such approval as may be necessary to enable the Administrative Agent, the
Issuing Bank and the Lenders to exercise and enjoy the full rights and benefits
granted to the Administrative Agent, the Issuing Bank and the Lenders by this
Agreement, the other Loan Documents and the other documents referred to above,
including specifically, at the cost and expense of the Borrower, the use of
commercially reasonable efforts to assist in obtaining approval of the FCC for
any action or transaction contemplated by this Agreement for which such approval
is or shall be required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or transferor's
portion of any application or applications for consent to the assignment of
license or transfer of control necessary or appropriate under the FCC's rules
and regulations for approval of (a) any sale or other disposition of the
Collateral by or on behalf of the Administrative Agent, or (b) any assumption by
the Administrative Agent of voting rights in the Collateral effected in
accordance with the terms of this Agreement. It is understood and agreed that
all foreclosure and related actions will be made in accordance with the
Communications Act and applicable regulations and published policies and
decisions of the FCC pertaining to such foreclosure and related actions.
8. Voting
------
Notwithstanding anything to the contrary contained in this Agreement,
the Borrower shall have the right to vote all Securities and General Intangibles
constituting the Collateral and receive and retain all dividends and
distributions thereon until such time, if any, as an Event of Default shall have
occurred and be continuing and the Administrative Agent shall have notified the
Borrower that the Administrative Agent shall have elected to terminate the
rights of the Borrower under this section, at which time the Administrative
Agent shall then be vested with the right to vote all Securities constituting
the Collateral and receive and retain all dividends and distributions thereon,
until such time as such Event of Default is cured or waived.
9. Notices
-------
All notices and other communications provided for or otherwise required
hereunder or in connection herewith shall be given in the manner and to the
addresses set forth in section 11.2 of the Credit Agreement.
-10-
10. Termination
-----------
On any date upon which (i) the Lenders shall no longer have any obligation to
make Loans, (ii) the Issuing Bank shall no longer have (A) any obligation to
issue Letters of Credit and (B) any obligations under the Letters of Credit
theretofor issued, and (iii) the Obligations shall have been paid in full in
cash, the outstanding principal balance of the Loans together with all accrued
interest thereon, all of the Reimbursement Obligations and all other sums then
due and owing under the Loan Documents, the Liens granted hereby shall cease and
the Administrative Agent shall, at the Borrower's expense (A) execute and
deliver all UCC Termination Statements and other documents necessary to
terminate the Liens granted hereby that the Borrower shall have reasonably
requested, and (B) return to the Borrower all Collateral that shall remain in
the possession of the Administrative Agent at such time.
11. Relationship to Credit Agreement
--------------------------------
This Agreement is the "Borrower Security Agreement" under, and as such term
is defined in, the Credit Agreement, and is subject to, and should be construed
in accordance with, the provisions thereof. Each of the Administrative Agent and
the Borrower acknowledges that certain provisions of the Credit Agreement,
including, without limitation, sections 1.2 (Principles of Construction), 11.1
(Amendments and Waivers), 11.3 (No Waiver; Cumulative Remedies), 11.4 (Survival
of Representations and Warranties), 11.7 (Successors and Assigns), 11.8
(Counterparts), 11.9 (Adjustments; Set-off), 11.12 (Governing Law), 11.13
(Headings), 11.14 (Severability), 11.15 (Integration), 11.16 (Limitation of
Liability), 11.17 (Consent to Jurisdiction), 11.18 (Service of Process), 11.19
(No Limitation on Service or Suit) and 11.20 (WAIVER OF TRIAL BY JURY) thereof,
are made applicable to this Agreement and all such provisions are incorporated
by reference herein as if fully set forth herein.
-11-
IN EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Borrower Security
Agreement to be duly executed on its behalf.
SALEM COMMUNICATIONS CORPORATION
By:________________________________
Name:______________________________
Title:_____________________________
THE BANK OF NEW YORK, as Administrative Agent
By:________________________________
Name:______________________________
Title:_____________________________
-12-
Schedule 3(e) to the Borrower Security Agreement
Dated as of September 25, 1997
LIST OF EQUITY INTERESTS
------------------------
Percentage of
Number of Cert. Outstanding
Issuer Class Shares Number Shares
- ------ ----- ------ ------ -------------
-13-
Schedule 3(f) to the Borrower Security Agreement
Dated as of September 25, 1997
LIST OF CHATTEL PAPER, DOCUMENTS AND INSTRUMENTS
------------------------------------------------
-14-
Schedule 3(h) to the Borrower Security Agreement
Dated as of September 25, 1997
ADDRESSES FOR EQUIPMENT AND INVENTORY LOCATIONS
------------------------------------------------
-15-
Schedule 3(i) to the Borrower Security Agreement
Dated as of September 25, 1997
LIST OF REGISTRATIONS
---------------------
A. Patents
-------
B. Trademarks
----------
-16-
ANNEX A TO THE BORROWER SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
FORM OF TRANSACTION STATEMENT
-----------------------------
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE
TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHT ON
THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A SECURITY.
[DATE]
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Ladies and Gentlemen:
The undersigned,_________________ (the "Issuer"), hereby acknowledges receipt
of the Borrower Security Agreement (as the same may be amended, supplemented or
otherwise modified from time to time, the "Agreement"), dated as of September
25, 1997, by and between SALEM COMMUNICATIONS CORPORATION (the "Borrower") and
THE BANK OF NEW YORK, as Administrative Agent (in such capacity, the
"Administrative Agent"), and (i) consents to the terms thereof and (ii) confirms
--------------------
that a pledge of the right, title and interest in the security referred to below
has been registered in the books and records of the Issuer in the name of the
Administrative Agent, as set forth below. This Transaction Statement is issued
under Section 8-408 of the New York State Uniform Commercial Code.
1. Description of the Security:__________________________________
2. Number of Shares or Units Pledged:____________________________
3. Registered Owner:
SALEM COMMUNICATIONS CORPORATION
4880 Santa Rosa Road Suite 300
Camarillo, California 93012
Attention: Vice President/
Chief Financial Officer
Taxpayer ID# ______________________.
4. REGISTERED PLEDGEE AND TAXPAYER INDENTIFICATION NUMBER (IF ANY):
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention: ______________________________
____________________________
Taxpayer ID# 13-5160382
5. DATE OF REGISTRATION OF THE PLEDGE: The pledge described herein was
registered on _____________, on the books and records of the Issuer.
6. NOTATION OF LIENS: There are no liens, restrictions or adverse claims as to
which the Issuer has a duty under Section 8-403(4) of the Uniform
Commercial Code (the "UCC") to which such security is or may be subject,
---
other than those set forth in the Loan Documents (as defined in that
certain Credit Agreement, dated as of ________________, 1997, by and among
the Borrower, the Lenders party thereto and The Bank of New York, as
Administrative Agent and Bank of America NT & SA, as Documentation Agent,
as amended, supplemented or otherwise modified from time to time) or [list
applicable organizational documents].
The Issuer hereby agrees, at the request of the Administrative Agent
and at the expense of the Issuer, to register any further assignment or transfer
of the foregoing security effected in the manner contemplated by the Agreement
and promptly to furnish to the Administrative Agent and any such assignee or
transferee any statement contemplated by Section 8-408 of the UCC.
[NAME OF ISSUER]
By:_________________________
Name:_______________________
Title:______________________
-2-
ANNEX B-1 TO THE BORROWER SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
FORM OF GRANT OF SECURITY INTEREST (PATENTS)
--------------------------------------------
SALEM COMMUNICATIONS CORPORATION, a California corporation (the "Borrower"),
--------
is obligated to THE BANK OF NEW YORK, as Administrative Agent (the
"Administrative Agent"), and has entered into a Borrower Security Agreement
--------------------
dated the date hereof (the "Agreement") with the Administrative Agent.
---------
Pursuant to the Agreement, the Borrower granted to the Administrative Agent a
security interest in all of the right, title and interest of the Borrower in and
to the letters patent or applications for letters patent, of the United States,
more particularly described on Schedule 1 (the "Patents") together with any
-------
reissue, continuation, continuation-in-part or extension thereof, and all
proceeds thereof, any and all causes of action which may exist by reason of
infringement thereof for the full term of the Patents (the "Collateral"), to
----------
secure the prompt payment, performance and observance of the Obligations (as
defined in the Agreement).
For good and valuable consideration, the receipt of which is hereby
acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Borrower does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Obligations.
The Borrower does hereby further acknowledge and affirm that the rights and
remedies of the Administrative Agent with respect to the assignment of and
security interest in the Collateral made and granted hereby are set forth in the
Agreement, the terms and provisions of which are hereby incorporated herein by
reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Obligations (as such term
is defined in the Agreement), the Administrative Agent will take whatever
actions are necessary at the Borrower's expense to release or reconvey to
Borrower all right, title and interest of the Borrower in and to the Patents.
The Administrative Agent's address is: One Wall Street, New York, New
York 10286.
-19-
IN WITNESS WHEREOF, the Borrower has caused this Assignment to be duly
executed by its duly authorized officer as of the __ day of_____,________.
SALEM COMMUNICATIONS CORPORATION
By:___________________________
Name:_________________________
Title:________________________
- 20 -
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of __, __, before me personally came _________________, to me
known, who, being by me duly sworn, did depose and say that he resides at
_________________; that he is the ________ of SALEM COMMUNICATIONS CORPORATION,
the corporation described in and which executed the above instrument, and that
he signed his name thereto by order of the board of directors thereof.
_____________________________
Notary Public
[Notary's Stamp]
- 21 -
Schedule 1
to
Grant of Security Interest (Patents)
Dated as of_____________________
- 22 -
Annex B-2 to the Borrower Security Agreement
Dated as of September 25, 1997
FORM OF GRANT OF SECURITY INTEREST (TRADEMARKS)
-----------------------------------------------
SALEM COMMUNICATIONS CORPORATION, a California corporation (the "Borrower"),
--------
is obligated to THE BANK OF NEW YORK, as Administrative Agent (the
"Administrative Agent"), and has entered into a Borrower Security Agreement
--------------------
dated the date hereof (the "Agreement") with the Administrative Agent.
---------
Pursuant to the Agreement, the Borrower granted to the Administrative Agent a
security interest in all of the right, title and interest of the Borrower in and
to the trademarks listed on Schedule 1, which trademarks are registered in the
United States Patent and Trademark Office (the "Trademarks"), together with the
----------
goodwill of the business symbolized by the Trademarks and the applications and
registrations therefor, and all proceeds thereof, any and all causes of action
which may exist by reason of infringement thereof (the "Collateral"), to secure
----------
the prompt payment, performance and observance of the Obligations (as defined in
the Agreement).
For good and valuable consideration, the receipt of which is hereby
acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Borrower does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Obligations.
The Borrower does hereby further acknowledge and affirm that the rights and
remedies of the Administrative Agent with respect to the assignment of and
security interest in the Collateral made and granted hereby are set forth in the
Agreement, the terms and provisions of which are hereby incorporated herein by
reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Obligations (as such term
is defined in the Agreement), the Administrative Agent will take whatever
actions are necessary at the Borrower's expense to release or reconvey to the
Borrower all right, title and interest of the Borrower in and to the Trademarks.
The Administrative Agent's address is: One Wall Street, New York, New
York 10286.
- 23 -
IN WITNESS WHEREOF, the Borrower has caused this Assignment to be duly
executed by its duly authorized officer as of the __ day of _______,_______.
SALEM COMMUNICATIONS CORPORATION
By:____________________________________
Name:__________________________________
Title:_________________________________
- 24 -
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this _____ day of ________, _________, before me personally
came __________________ , to me known, who, being by me duly sworn, did depose
and say that he resides at ______________ ; that he is the ________________
of SALEM COMMUNICATIONS CORPORATION, the corporation described in and which
executed the above instrument, and that he signed his name thereto by order of
the board of directors thereof.
------------------------
Notary Public
[Notary's Stamp]
- 25 -
Schedule 1
to
Grant of Security Interest Trademarks)
Dated as of _____________
- 26 -
SALEM EXHIBIT J
---------------
FORM OF SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
--------------------------------------------------
SUBSIDIARY GUARANTY AND SECURITY AGREEMENT (as the same may be amended,
supplemented or otherwise modified from time to time, this "Agreement"), dated
---------
as of September 25, 1997, by and among the Persons party hereto (the "Current
-------
Guarantors"), such other Persons which from time to time may become party hereto
- ----------
(the "Additional Guarantors", and collectively with the Current Guarantors, the
----------------------
"Guarantors"), SALEM COMMUNICATIONS CORPORATION, a California corporation (the
- -----------
"Borrower"), and THE BANK OF NEW YORK (the "Administrative Agent"), in its
-------- --------------------
capacity as Administrative Agent for the Lenders under the Credit Agreement
referred to below and the Rate Protection Lenders as hereinafter defined.
RECITALS
--------
I. Reference is made to the Credit Agreement, dated as of the date hereof,
by and among the Borrower, the Lenders party thereto, the Administrative Agent,
and Bank of America NT&SA, as Documentation Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
----------------
II. In the past, as now, the Borrower has provided financing for the
Guarantors and the Guarantors have relied upon the Borrower to provide such
financing. In addition, it is anticipated that, if the Guarantors execute and
deliver this Agreement, the Borrower will continue to provide such financing to
the Guarantors, and that the proceeds of the Loans to be made and Letters of
Credit to be issued will be used, in part, for the general corporate and working
capital purposes of the Guarantors. Pursuant to the Credit Agreement, the
Lenders will not make Loans and the Issuing Bank will not issue Letters of
Credit unless and until the Guarantors shall have executed and delivered this
Agreement and, therefore, in light of all of the foregoing, each Guarantor
expects to derive substantial benefit from the Credit Agreement and the
transactions contemplated thereby and, in furtherance thereof, has agreed to
execute and deliver this Agreement.
Therefore, in consideration of the Recitals, the terms and conditions herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Guarantors, the Borrower and the
Administrative Agent hereby agree as follows:
1. Defined Terms
-------------
(a) Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
(b) When used in this Agreement, the following capitalized terms shall have
the respective meanings ascribed thereto as follows:
"Borrower Obligations": all of the obligations and liabilities of the
--------------------
Borrower under the Loan Documents and under each Interest Rate Protection
Arrangement entered into by the Borrower with a Rate Protection Lender, in each
case whether fixed, contingent, now existing or hereafter arising, created,
assumed, incurred or acquired, and whether before or after the occurrence of any
Insolvency Event, and including (i) any obligation or liability in respect of
any breach of any representation or warranty and (ii) all post-petition interest
and funding losses, whether or not allowed as a claim in any proceeding arising
in connection with an Insolvency Event.
"Collateral": as defined in section 4.
----------
"Equity Interest": (i) with respect to a corporation, the capital stock
---------------
thereof, (ii) with respect to a partnership, a partnership interest therein, all
rights of a partner in such partnership, whether arising under the partnership
agreement of such partnership or otherwise; (iii) with respect to a limited
liability company, a membership interest therein, all rights of a member of such
limited liability company, whether arising under the limited liability company
agreement of such limited liability company or otherwise; (iv) with respect to
any other firm, association, trust, business enterprise or other entity, any
equity interest therein, any interest therein which entitles the holder thereof
to share in the revenue, income, earnings or losses thereof or to vote or
otherwise participate in any election of one or more members of the Managing
Person thereof, and (v) all warrants and options in respect of any of the
foregoing and all other securities which are convertible or exchangeable
therefor.
"Financing Statements": the UCC financing statements executed by the
--------------------
Guarantor and delivered pursuant to the Credit Agreement.
"Grants of Security Interests": collectively, the Grant of Security
----------------------------
Interest (Patents) and the Grant of Security Interest (Trademarks), in the form
of Annexes C-1 and C-2 hereto, respectively, in each case appropriately
completed and signed by the Guarantor.
"Guarantor Obligations": with respect to each Guarantor, all of the
---------------------
obligations and liabilities of such Guarantor hereunder, whether fixed,
contingent, now existing or hereafter arising, created, assumed, incurred or
acquired.
"Insolvency Event": any Event of Default under section 9.l(h) or (i) of
----------------
the Credit Agreement.
"NYUCC": the UCC as in effect in the State of New York on the
-----
date hereof.
"Office Location": as defined in section 5(c).
---------------
"Patents": all patents issued under the laws of the United States of
-------
America and all patent applications filed with the United States Patent and
Trademark Office, and all of the rights associated with each of the foregoing.
-2-
"Proceeds": as defined in the NYUCC, together with (i) all dividends,
--------
distributions and income on and in respect of all of the Securities and
Instruments and all other rights and benefits in respect thereof, and (ii) with
respect to the Patents and Trademarks, all renewals thereof, all proceeds of
infringement suits, all rights to sue for infringement, all license royalties,
all reissues, divisions, continuations, extensions and continuations-in-part
thereof.
"Registrations": (i) patents issued under the laws of the United States of
-------------
America, (ii) patent applications filed with the United States Patent and
Trademark Office, and (iii) all registered trademarks.
"Rate Protection Lenders": collectively, the Lenders and any affiliates
-----------------------
of the Lenders which from time to time enter or have entered into Interest Rate
Protection Arrangements with the Borrower.
"Supplement": a Supplement to this Agreement, duly completed, in the form
----------
of Annex A hereto.
"Trademarks": as to any Guarantor (i) all rights under the laws of the
----------
United States of America, and each State thereof, to trademarks, together with
all registrations thereof, applications therefor and all of the rights
associated therewith, and (ii) the goodwill of such Guarantor's business
symbolized by registered trademarks.
"Transaction Statement": a transaction statement in the form of An-
---------------------
nex B hereto.
"UCC": with respect to any jurisdiction, Articles 1, 8 and 9 of the
---
Uniform Commercial Code as from time to time in effect in such jurisdiction.
(c) When used in this Agreement, the following capitalized terms shall have
the respective meanings ascribed thereto in the NYUCC: "Account", "Certificated
-------- ------------
Security", "Chattel Paper", "Document", "Equipment", "Fixture", "General
- -------- ------------- -------- --------- ------- -------
Intangible", "Instrument", "Inventory", "Issuer", "Secured Party", "Security",
- ---------- ---------- --------- ------ ------------- --------
"Security Interest" and "Uncertificated Security".
- ------------------ -----------------------
2. Guaranty
--------
(a) Subject to section 2(b) hereof, each Guarantor hereby absolutely,
irrevocably and unconditionally guarantees the full and prompt payment when due
(whether at stated maturity, by acceleration or otherwise) of the Borrower
Obligations. This Agreement constitutes a guaranty of payment and neither the
Administrative Agent, the Issuing Bank nor any Lender shall have any obligation
to enforce any Loan Document or any Interest Rate Protection Arrangement or
exercise any right or remedy with respect to any collateral security thereunder
by any action, including making or perfecting any claim against any Person or
any collateral security for any of the Borrower Obligations, prior to being
entitled to the benefits of this Agreement. The Administrative Agent may, at its
option, proceed against the Guarantors, or any one or more of them, in the first
instance, to enforce the Guarantor Obligations without first proceeding against
the Borrower or any other Person, and without first resorting to any other
rights or remedies, as the Administrative Agent may deem advisable. In
furtherance hereof, if the Administrative
-3-
Agent, the Issuing Bank or any Lender is prevented by law from collecting or
otherwise hindered from collecting or otherwise enforcing any Borrower
Obligation in accordance with its terms, the Administrative Agent, the Issuing
Bank or such Lender, as the case may be, shall be entitled to receive hereunder
from the Guarantors after demand therefor, the sums which would have been
otherwise due had such collection or enforcement not been prevented or hindered.
(b) Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the greatest amount that would not render
such Guarantor's obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any provisions of applicable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (a) in respect of intercompany indebtedness to the Borrower or
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(b) under any guarantee of senior unsecured indebtedness or Indebtedness
subordinated in right of payment to the Obligations which guarantee contains an
assumption that indebtedness incurred under the Credit Agreement shall be deemed
to have been incurred prior to any indebtedness incurred under any such
guarantee or contains a limitation as to maximum amount similar to that set
forth in this subsection, pursuant to which the liability of such Guarantor
hereunder is included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights
------------------------
to subrogation, contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among such Guarantor and other Affiliates of the Borrower
of obligations arising under guarantees by such parties.
(c) Each Guarantor agrees that the Guarantor Obligations may at any
time and from time to time exceed the maximum liability of such Guarantor
hereunder without impairing this Agreement or affecting the rights and remedies
of the Administrative Agent, the Issuing Bank or any Lender hereunder.
3. Absolute Obligation
-------------------
No Guarantor shall be released from liability hereunder unless and until the
Maturity Date shall have occurred and either (a) the Issuing Bank shall not
have any obligation under the Letters of Credit and the Borrower shall have paid
in full in cash the outstanding principal balance of the Loans, together with
all accrued interest thereon, all of the Reimbursement Obligations, and all
other sums then due and owing under the Loan Documents, or (b) the Guarantor
Obligations of such Guarantor shall have been paid in full in cash. Each
Guarantor acknowledges and agrees that (i) neither the Administrative Agent, the
Issuing Bank nor any Lender has made any representation or warranty to such
Guarantor with respect to the Borrower, its Subsidiaries, any Loan Document, any
Interest Rate Protection Arrangement, or any agreement, instrument or document
executed or delivered in connection therewith, or any other matter whatsoever,
and (ii) such Guarantor shall be liable hereunder, and such liability shall not
be affected or impaired, irrespective
-4-
of (A) the validity or enforceability of any Loan Document, any Interest Rate
Protection Arrangement, or any agreement, instrument or document executed or
delivered in connection therewith, or the collectability of any of the Borrower
Obligations, (B) the preference or priority ranking with respect to any of the
Borrower Obligations, (C) the existence, validity, enforceability or perfection
of any security interest or collateral security under any Loan Document, or any
Interest Rate Protection Arrangement, or the release, exchange, substitution or
loss or impairment of any such security interest or collateral security, (D) any
failure, delay, neglect or omission by the Administrative Agent, the Issuing
Bank or any Lender to realize upon, enforce or protect any direct or indirect
collateral security, indebtedness, liability or obligation, any Loan Document,
any Interest Rate Protection Arrangement, or any agreement, instrument or
document executed or delivered in connection therewith, or any of the Borrower
Obligations, (E) the existence or exercise of any right of set-off by the
Administrative Agent, the Issuing Bank or any Lender, (F) the existence,
validity or enforceability of any other guaranty with respect to any of the
Borrower Obligations, the liability of any other Person in respect of any of the
Borrower Obligations, or the release of any such Person or any other guarantor
of any of the Borrower Obligations, (G) any act or omission of the
Administrative Agent, the Issuing Bank or any Lender in connection with the
administration of any Loan Document, any Interest Rate Protection Arrangement,
or any of the Borrower Obligations, (H) the bankruptcy, insolvency,
reorganization or receivership of, or any other proceeding for the relief of
debtors commenced by or against, any Person, (I) the disaffirmance or rejection,
or the purported disaffirmance or purported rejection, of any of the Borrower
Obligations, any Loan Document, any Interest Rate Protection Arrangement, or any
agreement, instrument or document executed or delivered in connection therewith,
in any bankruptcy, insolvency, reorganization or receivership, or any other
proceeding for the relief of debtor, relating to any Person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Loan Document, any Interest Rate
Protection Arrangement, or any agreement, instrument or document executed or
delivered in connection therewith or any of the Borrower Obligations, or which
might cause or permit to be invoked any alteration in the time, amount, manner
or payment or performance of any of the Borrower's obligations and liabilities
(including the Borrower Obligations), (K) the merger or consolidation of the
Borrower into or with any Person, (L) the sale by the Borrower of all or any
part of its assets, (M) the fact that at any time and from time to time none of
the Borrower Obligations may be outstanding or owing to the Administrative
Agent, the Issuing Bank or any Lender, (N) any amendment or modification of, or
supplement to, any Loan Document or any Interest Rate Protection Arrangement or
(O) any other reason or circumstance which might otherwise constitute a defense
available to or a discharge of the Borrower in respect of its obligations or
liabilities (including the Borrower Obligations) or of such Guarantor in respect
of any of the Guarantor Obligations (other than by the performance in full
thereof).
4. Grant of Security Interest
--------------------------
To secure the prompt and complete payment, observance and performance
of the Guarantor Obligations, each Guarantor hereby grants to the Administrative
Agent, for its benefit and the ratable benefit of the Issuing Bank, the Lenders
and the Rate Protection Lenders, a Security Interest in and to all of such
Guarantor's right, title and interest in and to all: Accounts, Chattel Paper,
Documents, Equipment, Fixtures, General Intangibles, Instruments, including,
without limitation, Instruments evidencing intercompany Indebtedness,
Inventory, Patents, Trademarks, Equity Interests in each Person which
-5-
now is or may hereafter become a Subsidiary of such Guarantor or of the
Borrower, whether or not evidenced by a Security, and all Proceeds of all of the
foregoing, and including, without limitation, all licenses, approvals, permits
and other authorizations issued by the FCC, including the Proceeds of any sale
or other disposition thereof, in each case to the extent that a security
interest therein is not prohibited by law, provided that to the extent that a
security interest therein is now so prohibited and to the extent that such
security interest at any time hereafter shall no longer be so prohibited, then
such security interest shall automatically and without any further action attach
and become fully effective at that time (giving effect to any retroactive effect
to any change in applicable law or regulation), in each case whether now owned
or existing or hereafter arising or acquired, (collectively, the "Collateral").
----------
5. Representations and Warranties
------------------------------
Each Guarantor hereby represents and warrants to the Administrative
Agent as follows:
(a) Binding Obligation. This Agreement constitutes the valid and binding
------------------
obligation of such Guarantor, enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws related to or affecting the
enforcement of creditors' rights generally.
(b) Solvency. Such Guarantor (if a Current Guarantor, both immediately before
--------
and after giving effect to this Agreement and to all Indebtedness incurred by
the Borrower in connection with the Loan Documents or, if an Additional
Guarantor, immediately before and after giving effect to this Agreement) (i) is
not insolvent, (ii) is not engaged, and is not about to engage, in any business
or transaction, for which it has unreasonably small capital, and (iii) does not
intend to incur, and does not believe that it would incur, debts that would be
beyond its ability to pay such debts as they mature, in each case referred to
above within the meaning of both Title XI of the United States Code and Article
10 of New York Debtor Credit Law, each as in effect on the date hereof.
(c) Chief Executive Office. As of the date hereof, such Guarantor's place of
----------------------
business or, if such Guarantor has more than one place of business, its chief
executive office, is, and has been continuously for the immediately preceding 5
month period, located (the "Office Location") at, (i) if such Guarantor is a
---------------
Current Guarantor, the address therefor referred to in Schedule 5(c) hereto, or
(ii) if such Guarantor is an Additional Guarantor, the address therefor set
forth on Schedule 5(c) to the Supplement delivered by such Additional Guarantor.
Such Guarantor, (i) in the case of a Current Guarantor, has not changed its
legal name during the 6 year period immediately preceding the date hereof, and
(ii) in the case of an Additional Guarantor, has not changed its legal name
during the 6 year period immediately preceding the date it became a Guarantor
hereunder, except as otherwise disclosed on the Supplement delivered by such
Additional Guarantor.
(d) Information. If such Guarantor is a Current Guarantor, all of the
-----------
information with respect to such Guarantor, or any of its Property, set forth on
each of the Schedules hereto is true, complete and correct as of the date
hereof. If such Guarantor is an Additional Guarantor, all of the information
with respect to such Guarantor, or any
- 6-
of its Property, set forth on each of the Schedules to the Supplement delivered
by such Additional Guarantor is true, complete and correct as of the date of
such Supplement. All of such Guarantor's books, records and documents relating
to its Guarantor Collateral are in all material respects what they purport to
be.
(e) Security Interest. This Agreement, together with the delivery to the
-----------------
Administrative Agent of the Certificated Securities constituting Collateral and
the continuous possession thereof by the Administrative Agent in the State of
New York, creates a continuing "enforceable" Security Interest in the Collateral
in favor of the Administrative Agent. Upon (i) the presentation for filing of
the Financing Statements at the respective offices listed thereon together with
the appropriate filing fee therefor, (ii) the delivery to the Administrative
Agent of the Instruments constituting the Collateral, (iii) the registration, in
accordance with Article 8 of the NYUCC, of the Security Interest granted hereby
on the books of each Person which is an Issuer of an Uncertificated Security
constituting the Collateral, and (iv) the filing of the Grants of Security
Interests in the United States Patent and Trademark Office with respect to
Patents, Registrations, and Trademarks, (A) such Security Interest shall be
perfected, and (B) assuming that the Administrative Agent has acted in "good
faith and without notice of any adverse claim" within the meaning of Article 8
of the NYUCC, the Administrative Agent shall be a "bona fide purchaser", within
the meaning of such Article, with respect to the Collateral consisting of
Securities.
(f) Absence of Liens. There are no Liens upon the Collateral other than
----------------
Permitted Liens, if any.
(g) Equity Interests. As of the Effective Date with respect to each Current
----------------
Guarantor, as of the date of the Supplement executed by an Additional Guarantor
with respect to such Additional Guarantor, (i) the Equity Interests listed on
Schedule 5(g) or Schedule 5(g) to the Supplement, as the case may be, constitute
all of the Equity Interests in each Subsidiary in which such Guarantor has any
right, title or interest, and each such Equity Interest issued by a corporate
Issuer has been duly authorized, validly issued and fully paid for, and is non-
assessable and (ii) except as set forth in such Schedule 5(g) or Schedule 5(g)
to such Supplement, (A) no Subsidiary of such Guarantor has issued any
securities convertible into, or options or warrants for, any common or preferred
equity securities thereof, (B) there are no agreements, voting trusts or
understandings binding upon such Guarantor or any of its Subsidiaries with
respect to the voting securities of any of such Subsidiary or affecting in any
manner the sale, pledge, assignment or other disposition thereof, including any
right of first refusal, option, redemption, call or other right with respect
thereto, whether similar or dissimilar to any of the foregoing and (C) no such
Equity Interest is represented by an Uncertificated Security.
(h) Chattel Paper, Documents and Instruments. With respect to each Current
----------------------------------------
Guarantor, the Chattel Paper, Documents and Instruments listed on Schedule 5(h)
hereto constitute, as of the date hereof, and with respect to each Additional
Guarantor, the Chattel Paper, Documents and Instruments listed on Schedule 5(h)
to the Supplement delivered by such Additional Guarantor constitute, as of the
date of such Supplement, all of the Chattel Paper, Documents and Instruments
which constitute the Collateral, and, to the best of such Guarantor's knowledge,
all such Chattel Paper, Documents and Instruments have been duly authorized,
issued and delivered, and constitute the legal, valid, binding and enforceable
obligations of the respective makers thereof.
-7-
(b) Further Assurances. Such Guarantor shall, at its own expense, promptly
------------------
execute and deliver all certificates, documents, instruments, financing and
continuation statements and amendments thereto, notices and other agreements,
and take all further action, that the Administrative Agent may reasonably
request from time to time, in order to perfect and protect the Security Interest
granted hereby or to enable the Administrative Agent to exercise and enforce its
rights and remedies hereunder with respect to the Collateral. Such Guarantor
hereby irrevocably appoints the Administrative Agent as such Guarantor's true
and lawful attorney-in-fact, in the name, place and stead of such Guarantor, to
perform on behalf of such Guarantor any and all obligations of such Guarantor
under this Agreement, and such Guarantor agrees that the power of attorney
herein granted constitutes a power coupled with an interest, provided, however,
that the Administrative Agent shall have no obligation to perform any such
obligation and such performance shall be at the sole cost and expense of such
Guarantor. If such Guarantor fails to comply with any of its obligations
hereunder, the Administrative Agent may do so in such Guarantor's name or in the
Administrative Agent's name, but at such Guarantor's expense, and such Guarantor
hereby agrees to reimburse the Administrative Agent in full for all reasonable
expenses, including reasonable attorney's fees, incurred by the Administrative
Agent in connection therewith.
(c) Information. Such Guarantor shall, at its own expense, furnish to the
-----------
Administrative Agent such information, reports, statements and schedules with
respect to the Collateral as the Administrative Agent may reasonably request
from time to time.
(d) Defense of Collateral. Such Guarantor shall, at its own expense, defend
---------------------
the Collateral against all claims of any kind or nature (other than Permitted
Liens, if any) of all Persons at any time claiming the same or any interest
therein adverse to the interests of the Administrative Agent, the Issuing Bank,
any Rate Protection Lender or any Lender, and such Guarantor shall not cause,
permit or suffer to exist any Lien upon the Collateral other than Permitted
Liens, if any.
(e) Uncertificated Securities. Such Guarantor shall cause each Person which
-------------------------
is an Issuer of an Uncertificated Security constituting the Collateral (i) to
register the Security Interest granted hereby upon the books of such Person in
accordance with Article 8 of the NYUCC, and (ii) to issue to the Administrative
Agent an initial Transaction Statement and issue to the Administrative Agent
subsequent Transaction Statements in accordance with Section 8-408 of the UCC in
effect in the State of New York.
(f) Delivery of Pledged Collateral. Each Certificated Security
------------------------------
representing an Equity Interest in a Person which is or shall become a
Subsidiary of the Borrower shall be promptly delivered to the Administrative
Agent, to be held by the Administrative Agent pursuant hereto, in suitable form
for transfer by delivery or accompanied by duly executed documents of transfer
or assignment in blank, all in form and substance satisfactory to the
Administrative Agent. Such Guarantor agrees that until so delivered, each such
Certificated Security shall be held by such Guarantor in trust for the benefit
of the Administrative Agent and be segregated from the other Property of such
Guarantor.
-9-
(g) Chattel Paper, Documents and Instruments. All of the Instruments,
----------------------------------------
Documents and Chattel Paper now or hereafter owned by or in the possession of
such Guarantor which constitute Collateral (other than checks received in the
ordinary course of collection) shall be promptly delivered to the Administrative
Agent, to be held by the Administrative Agent pursuant hereto, in suitable form
for transfer by delivery or accompanied by duly executed documents of transfer
or assignment in blank, all in form and substance reasonably satisfactory to the
Administrative Agent. Such Guarantor agrees that, with respect to all items of
the Collateral which it is or shall hereafter be obligated to deliver to the
Administrative Agent, until so delivered such items shall be held by such
Guarantor in trust for the benefit of the Administrative Agent and be segregated
from the other Property of such Guarantor.
(h) Accounts. Except as otherwise provided in this subsection, such
--------
Guarantor shall continue to collect in accordance with its customary practice,
at its own expense, all amounts due or to become due to such Guarantor in
respect of such Guarantor's Accounts and, prior to the occurrence of an Event of
Default, such Guarantor shall have the right to adjust, settle or compromise the
amount or payment of any such Account, all in accordance with its customary
practices. In connection with such collections, such Guarantor may take and, at
the direction of the Administrative Agent at any time that an Event of Default
shall have occurred and be continuing shall take, such action as such Guarantor
or the Administrative Agent may reasonably deem necessary or advisable to
enforce collection of such Accounts.
(i) Equipment and Inventory. Such Guarantor shall keep the Equipment and
-----------------------
Inventory constituting Collateral at the places listed on (i) if such Guarantor
is a Current Guarantor, Schedule 5(1) hereto, and (ii) if such Guarantor is an
Additional Guarantor, Schedule 5(1) to the Supplement delivered by such
Guarantor, and at such other places located within the United States in respect
of which (A) such Guarantor shall have provided the Administrative Agent with
prior written notice, and (B) UCC financing statements (or amendments thereto),
in form and substance satisfactory to the Administrative Agent, shall have been
filed within two months of such change. Such Guarantor shall promptly furnish to
the Administrative Agent a statement respecting any material loss or damage to
any of the Equipment or Inventory constituting Collateral except to the extent
that such loss or damage shall be insured pursuant to policies required to be
maintained pursuant to the Credit Agreement.
(j) Patents and Trademarks. Such Guarantor will continue to use for the
----------------------
duration of this Agreement, consistent standards of quality in its manufacture
of products sold under the Patents and Trademarks constituting Collateral. Such
Guarantor shall give to the Administrative Agent prompt written notice thereof
in the event that such Guarantor shall obtain any right to any new Patent or
Trademark or to any reissue, division, continuation, renewal, extension, or
continuation-in-part of any Patent or Trademark. Such Guarantor shall prosecute
diligently any applications of the Patents and Trademarks constituting
Collateral pending as of the date of this Agreement or thereafter, and preserve
and maintain all rights in applications of Patents and Trademarks constituting
Collateral consistent with past practice, including the payment of all
maintenance fees, except to the extent the failure so to preserve or maintain
such rights could not reasonably be expected to have a material adverse effect
on either (i) the value of the Patents taken as a whole, or (ii) the value of
the Trademarks taken as a whole. Such Guarantor shall not abandon any right to
file an application or any pending application for any Patent or
- 10-
Trademark unless the failure so to do could not reasonably be expected to have
a material adverse effect on either (i) the value of the Patents taken as a
whole, or (ii) the value of the Trademarks taken as a whole. Such Guarantor
agrees that it will not enter into any agreement, including a license agreement,
with respect to any Patent or Trademark which is inconsistent with such
Guarantor's past practices of licensing Patents or Trademarks as the case may
be. Such Guarantor hereby grants to the Administrative Agent the right to visit
such Guarantor's plants and facilities which manufacture, inspect or store
products sold under any of the Patents and Trademarks, and to inspect the
products and quality control records relating thereto at reasonable times during
regular business hours upon reasonable prior notice.
7. Other Agreements of the Guarantors
----------------------------------
(a) No Duty to Preserve. Except as otherwise required by law, each
-------------------
Guarantor agrees that, with respect to the Collateral, neither the
Administrative Agent, the Issuing Bank, any Rate Protection Lender nor any
Lender has any obligation to preserve rights against prior or third parties.
(b) Administrative Agent's Duty With Respect to Collateral. Each
------------------------------------------------------
Guarantor agrees that the Administrative Agent's only duty with respect to the
Collateral delivered to the Administrative Agent shall be to use reasonable care
in the custody and preservation of the Collateral, and each Guarantor agrees
that if the Administrative Agent accords the Collateral substantially the same
kind of care as the Administrative Agent accords its own Property, such care
shall conclusively be deemed reasonable. In the event that all or any part of
the Certificated Securities or Instruments constituting the Collateral are lost,
destroyed or wrongfully taken while such Certificated Securities or Instruments
are in the possession of the Administrative Agent, each Guarantor agrees that it
will use its best efforts to cause the delivery of new Certificated Securities
or Instruments in place of the lost, destroyed or wrongfully taken Certificated
Securities or Instruments upon request therefor by the Administrative Agent,
without the necessity of any indemnity bond or other security, other than the
Administrative Agent's agreement of indemnity upon usual and customary terms
therefor. Anything herein to the contrary notwithstanding, the Administrative
Agent shall not be under any duty to send notices, perform services, exercise
any rights of collection, enforcement, conversion or exchange, vote, pay for
insurance, taxes or other charges or take any action of any kind in connection
with the management of the Collateral.
(c) Liability of Guarantors under Contracts and Agreements Included
---------------------------------------------------------------
in the Collateral. Anything herein to the contrary notwithstanding, (i) each
- -----------------
Guarantor shall remain liable under the contracts and agreements to which it is
a party and which is included in the Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Administrative
Agent, the Issuing Bank, any Rate Protection Lender or any Lender of any of its
rights hereunder shall not release any Guarantor from any of its duties or
obligations under any such contract or agreement, (iii) neither the
Administrative Agent, the Issuing Bank, any Rate Protection Lender nor any
Lender shall have any obligation or liability, including indemnification
obligations, under any such contract or agreement by reason of this Agreement,
nor shall the Administrative Agent, the Issuing Bank, any Rate Protection Lender
or any Lender be obligated to perform any of the obligations or duties of any
Guarantor thereunder, to make any payment, to make any
-11-
inquiry as to the nature or sufficiency of any payment received by any Guarantor
or the sufficiency of any performance by any party under any such contract or
agreement or to take any action to collect or enforce any claim for payment
assigned hereunder, and (iv) neither the Administrative Agent, the Issuing Bank,
any Rate Protection Lender nor any Lender shall be under any duty to send
notices, perform services, exercise any rights of collection, enforcement,
conversion or exchange, vote, pay for insurance, taxes or other charges or take
any action of any kind in connection with the management of the Collateral.
8. Events of Default
-----------------
Each of the following shall constitute an "Event of Default":
----------------
(a) The failure of any Guarantor to observe or perform any term,
covenant or agreement contained in this Agreement; or
(b) The occurrence and continuance of an Event of Default under, and as
such term is defined in, the Credit Agreement.
9. Remedies
--------
(a) Upon the occurrence of an Event of Default or at any time thereafter
during the continuance thereof, the Administrative Agent may:
(i) exercise any and all rights and remedies (A) granted to a Secured
Party by the UCC in effect in the State of New York or otherwise allowed at
law, and (B) otherwise provided by this Agreement, and
(ii) dispose of the Collateral as it may choose, so long as every
aspect of the disposition including the method, manner, time, place and
terms are commercially reasonable, and each Guarantor agrees that, without
limitation, the following are each commercially reasonable: (A) the
Administrative Agent shall not in any event be required to give more than
10 days' prior notice to the Guarantors of any such disposition, (B) any
place within the City of New York or the Counties of Nassau, Suffolk, and
Westchester may be designated by the Administrative Agent for disposition,
and (C) the Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Each Guarantor acknowledges and agrees that the Administrative Agent
may elect, with respect to the offer or sale of any or all of the Equity
Interests constituting the Collateral, to conduct such offer and sale in such a
manner as to avoid the need for registration or qualification of such Equity
Interests or the offer and sale thereof under any Federal or state securities
laws and that the Administrative Agent is authorized to comply with any
limitation or restriction in connection with such sale as counsel may advise the
Administrative Agent is reasonably necessary in order to avoid any violation of
applicable law, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons
-12-
who will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or resale of such Equity
Interests, or in order to obtain any required approval of the sale or of the
purchaser by any Governmental Authority. Each Guarantor further acknowledges and
agrees that any such transaction may be at prices and on terms less favorable
than those which may be obtained through a public sale and not subject to such
restrictions and agrees that, notwithstanding the foregoing, the Administrative
Agent is under no obligation to conduct any such public sale and may elect to
impose any or all of the foregoing restrictions, or any other restrictions which
may be reasonably necessary in order to avoid any such registration or
qualification, at its sole discretion or with the consent or direction of the
Required Lenders, and that any such offer and sale so conducted shall be deemed
to have been made in a commercially reasonable manner.
(c) To the extent permitted by law, each Guarantor hereby expressly waives
and covenants not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, now or at any time hereafter in force, which might
delay, prevent or otherwise impede the performance or enforcement of this
Agreement.
(d) Notwithstanding anything to the contrary contained in this Agreement, any
other Loan Document or in any other agreement, instrument or document executed
by any Guarantor and delivered to the Administrative Agent, the Issuing Bank or
any Lender, neither the Administrative Agent, the Issuing Bank nor any Lender
will take any action pursuant to this Agreement, any other Loan Document or any
other document referred to above which would constitute or result in any
assignment of any license, approval, permit, certificate or other authorization
issued by the FCC or any change of control of the Borrower or any Subsidiary if
such assignment or change of control would require, under then existing law, the
prior approval of the FCC without first obtaining such prior approval of the
FCC. Upon the occurrence of an Event of Default or at any time thereafter during
the continuance thereof, each Guarantor waives, to the extent permitted by law,
any right it may have to oppose, and agrees to take any action that the
Administrative Agent may reasonably request in order to obtain from the FCC,
such approval as may be necessary to enable the Administrative Agent, the
Issuing Bank and the Lenders to exercise and enjoy the full rights and benefits
granted to the Administrative Agent, the Issuing Bank and the Lenders by this
Agreement, the other Loan Documents and the other documents referred to above,
including specifically, at the cost and expense of the Borrower, the use of
commercially reasonable efforts to assist in obtaining approval of the FCC for
any action or transaction contemplated by this Agreement for which such approval
is or shall be required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or transferor's
portion of any application or applications for consent to the assignment of
license, approval, permit, certificate or other authorization or transfer of
control necessary or appropriate under the FCC's rules and regulations for
approval of (i) any sale or other disposition of the Collateral by or on behalf
of the Administrative Agent, or (ii) any assumption by the Administrative Agent
of voting rights in the Collateral effected in accordance with the terms of this
Agreement. It is understood and agreed that all foreclosure and related actions
will be made in accordance with the Communications Act and applicable
regulations and published policies and decisions of the FCC pertaining to such
foreclosure and related actions.
-13-
10. Voting
------
Notwithstanding anything to the contrary contained in this Agreement,
each Guarantor shall have the right to vote all Securities constituting its
Collateral and receive and retain all dividends and distributions thereon until
such time, if any, as an Event of Default shall have occurred and be continuing
and the Administrative Agent shall have notified such Guarantor that the
Administrative Agent shall have elected to terminate the rights of such
Guarantor under this section, at which time the Administrative Agent shall then
be vested with the right to vote all Securities constituting the Collateral and
receive and retain all dividends and distributions thereon, until such time as
such Event of Default is cured or waived.
11. Termination
-----------
On any date upon which (i) the Lenders shall no longer have any
obligation to make Loans, (ii) the Issuing Bank shall no longer have (A) any
obligation to issue Letters of Credit and (B) any obligations under the Letters
of Credit theretofor issued, and (iii) the Obligations shall have been paid in
full in cash, the outstanding principal balance of the Loans together with all
accrued interest thereon, all of the Reimbursement Obligations and all other
sums then due and owing under the Loan Documents, the Liens granted hereby shall
cease and the Administrative Agent shall, at the Guarantors' expense (A) execute
and deliver all UCC Termination Statements and other documents necessary to
terminate the Liens granted hereby that the Guarantors shall have reasonably
requested, and (B) return to the Guarantors all their respective Collateral that
shall remain in the possession of the Administrative Agent at such time.
12. Notices
-------
Except as otherwise specifically provided herein, all notices, requests,
consents, demands, waivers and other communications hereunder shall be in
writing (including facsimile) and shall be electronically transmitted or mailed
by registered or certified mail or delivered in person, and all statements,
reports, documents, certificates and papers to be delivered hereunder shall be
mailed by first class mail or delivered in person, in each case to the
respective parties to this Agreement as follows: in the case of the
Administrative Agent or the Borrower, as set forth in section 11.2 of the Credit
Agreement, in the case of each Current Guarantor, as set forth adjacent to the
name of such Current Guarantor on the signature page(s) hereof, and, in the case
of each Additional Guarantor, as set forth adjacent to the name of such
Additional Guarantor on the signature page(s) of the Supplement delivered by
such Additional Guarantor, or to such other addresses as to which the
Administrative Agent may be hereafter notified by the respective parties hereto.
Any notice, request, consent, demand, waiver or communication given in
accordance with the provisions of this section shall be conclusively deemed to
have been received by a party hereto and to be effective on the day on which
delivered to such party at its address specified above or, if sent by registered
or certified mail, on the delivery date noted on the receipt therefor, provided
that a notice of change of address shall be deemed to be effective only when
actually received. Any party hereto may rely on signatures of the other parties
hereto which are transmitted by facsimile or other electronic means as fully as
if originally signed.
-14-
13. Expenses
--------
Each Guarantor agrees that it shall, upon demand, pay to the
Administrative Agent any and all reasonable out-of-pocket sums, costs and
expenses, which the Administrative Agent, the Issuing Bank or any Lender may pay
or incur defending, protecting or enforcing this Agreement (whether suit is
instituted or not), reasonable attorneys' fees and disbursements. All sums,
costs and expenses which are due and payable pursuant to this section shall bear
interest, payable on demand, at the highest rate then payable on the Borrower
Obligations.
14. Repayment in Bankruptcy, etc.
-----------------------------
If, at any time or times subsequent to the payment of all or any part of
the Borrower Obligations or the Guarantor Obligations, the Administrative Agent,
the Issuing Bank or any Lender shall be required to repay any amounts previously
paid by or on behalf of the Borrower or any Guarantor in reduction thereof by
virtue of an order of any court having jurisdiction in the premises, as a result
of an adjudication that such amounts constituted preferential payments or
fraudulent conveyances, the Guarantors unconditionally agree to pay to the
Administrative Agent within 10 days after demand a sum in cash equal to the
amount of such repayment, together with interest on such amount from the date of
such repayment by the Administrative Agent, the Issuing Bank or such Lender, as
the case may be, to the date of payment to the Administrative Agent at the
applicable after-maturity rate set forth in the Credit Agreement.
15. Additional Guarantors
---------------------
Upon the execution and delivery to the Administrative Agent of a
Supplement by any Person, appropriately acknowledged, such Person shall be a
Guarantor.
16. Agreement to Pay; Subordination
--------------------------------
In furtherance of the foregoing and not in limitation of any other right
that the Administrative Agent, the Issuing Bank, any Lender or any Rate
Protection Lender has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Borrower Obligations when and as the same shall become due, whether at maturity,
be acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Administrative
Agent in cash the amount of such unpaid Obligations. Upon payment by any
Guarantor of any sums to the Administrative Agent as provided above, all rights
of such Guarantor against the Borrower arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Borrower Obligations. In
addition, any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated in right of payment to the prior payment in
full in cash of the Borrower Obligations. If any amount shall erroneously be
paid to any Guarantor on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of the
Borrower, such amount shall be held in trust for the benefit of the
Administrative Agent, the Issuing Bank, the Lenders and the Rate Protection
Lenders and shall forthwith be paid to the Administrative
-15-
Agent to be credited against the payment of the Borrower Obligations, whether
matured or unmatured, in accordance with the terms of the Loan Documents.
17. Miscellaneous
-------------
(a) Except as otherwise expressly provided in this Agreement, each
Guarantor hereby waives presentment, demand for payment, notice of default,
nonperformance and dishonor, protest and notice of protest of or in respect of
this Agreement, the other Loan Documents, each Interest Protection Arrangement,
and the Borrower Obligations, notice of acceptance of this Agreement and
reliance hereupon by the Administrative Agent, the Issuing Bank and each Lender,
and the incurrence of any of the Borrower Obligations, notice of any sale of
collateral security or any default of any sort.
(b) No Guarantor is relying upon the Administrative Agent, the Issuing
Bank or any Lender to provide to such Guarantor any information concerning the
Borrower or any of its Subsidiaries, and each Guarantor has made arrangements
satisfactory to such Guarantor to obtain from the Borrower on a continuing basis
such information concerning the Borrower and its Subsidiaries as such Guarantor
may desire.
(c) Each Guarantor agrees that any statement of account with respect to
the Borrower Obligations from the Administrative Agent, the Issuing Bank or any
Lender to the Borrower which binds the Borrower shall also be binding upon such
Guarantor, and that copies of said statements of account maintained in the
regular course of the Administrative Agent's, the Issuing Bank's or such
Lender's business, as the case may be, may be used in evidence against such
Guarantor in order to establish its Guarantor Obligations.
(d) Each Guarantor acknowledges that it has received a copy of the Loan
Documents and each Interest Rate Protection Arrangement and has approved of the
same. In addition, such Guarantor acknowledges having read each Loan Document
and each such Interest Rate Protection Arrangement and having had the advice of
counsel in connection with all matters concerning its execution and delivery of
this Agreement.
(e) No Guarantor may assign any right, or delegate any duty, it may have
under this Agreement.
(f) Subject to the limitations set forth in section 2(b), the Guarantor
Obligations shall be joint and several and shall also be joint and several.
(g) This Agreement is the "Subsidiary Guaranty" referred to in the Credit
Agreement, and is subject to, and should be construed in accordance with, the
provisions thereof. Each of the Administrative Agent, the Guarantors and the
Borrower acknowledges that certain provisions of the Credit Agreement,
including, without limitation, sections 1.2 (Principles of Construction), 11.1
(Amendments and Waivers), 11.3 (No Waiver; Cumulative Remedies), 11.4 (Survival
of Certain Obligations), 11.7 (Successors and Assigns), 11.8 (Counterparts),
11.9 (Adjustments; Set-off), 11.12 (Governing Law), 11.13 (Headings), 11.14
(Severability), 11.15 (Integration), 11.16 (Limitation of Liability), 11.17
(Consent to Jurisdiction), 11.18 (Service of Process), 11.19 (No Limitation on
Service or Suit) and 11.20 (WAIVER OF TRIAL BY JURY) thereof, are made
-16-
applicable to this Agreement and all such provisions are incorporated by
reference herein as if fully set forth herein.
-17-
IN EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Subsidiary Guaranty
and Security Agreement to be duly executed on its behalf.
[NAME OF CURRENT GUARANTOR]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address for Notices:
--------------------
------------------------
------------------------
------------------------
Attention:
--------------
Telephone: ( ) -
--- --- ----
Telecopy: ( ) _
--- --- ----
[NAME OF CURRENT GUARANTOR]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address for Notices:
--------------------
------------------------
------------------------
------------------------
Attention:
--------------
Telephone: ( ) _
--- --- ----
Telecopy: ( ) _
--- --- ----
-18-
[NAME OF CURRENT GUARANTOR]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
Address for Notices:
--------------------
------------------------
------------------------
------------------------
Attention:
--------------
Telephone: ( ) _
--- --- ----
Telecopy: ( ) _
--- --- ----
SALEM COMMUNICATIONS
CORPORATION
By:
-----------------------
Name:
---------------------
Title:
--------------------
THE BANK OF NEW YORK, as
Administrative Agent
By:
-----------------------
Name:
---------------------
Title:
--------------------
-19-
Schedule 5(c) to the Subsidiary Guaranty
and Security Agreement
Dated as of September 25, 1997
LIST OF OFFICE LOCATIONS
------------------------
-20-
Schedule 5(g) to the Subsidiary Guaranty
and Security Agreement
Dated as of September 25, 1997
LIST OF EQUITY INTERESTS
------------------------
Percentage of
Number of Cert. Outstanding
Issuer Class Shares Number Shares
- ------ ----- -------- ------ -------------
-21-
Schedule 5(h) to the Subsidiary Guaranty
and Security Agreement
Dated as of September 25, 1997
LIST OF CHATTEL PAPER, DOCUMENTS AND INSTRUMENTS
------------------------------------------------
-22-
Schedule 5(j) to the Subsidiary Guaranty
and Security Agreement
Dated as of September 25, 1997
ADDRESSES FOR EQUIPMENT AND INVENTORY LOCATIONS
-----------------------------------------------
-23-
Schedule 5(k) to the Subsidiary Guaranty
and Security Agreement
Dated as of September 25, 1997
LIST OF REGISTRATIONS
---------------------
A. Patents
-------
B. Trademarks
----------
- 24 -
ANNEX A TO THE SUBSIDIARY GUARANTY
FORM OF SUPPLEMENT TO SUBSIDIARY GUARANTY
------------------------------------------
SUBSIDIARY GUARANTY AND SECURITY AGREEMENT, dated as of September 25, 1997,
by and among the Guarantors party thereto and The Bank of New York, as
Administrative Agent (as the same may be amended, supplemented or otherwise
modified from time to time, the "Agreement").
---------
[DATE]
Capitalized terms used heroin which are not otherwise defined herein shall
have the respective meanings ascribed thereto in the Agreement. Pursuant to
section 15 of the Agreement, by execution and delivery of this Supplement and,
upon acceptance hereof by the Administrative Agent, the undersigned (i) shall
be, and shall be deemed to be, a "Guarantor" under, and as such term is defined
in, the Agreement, (ii) shall have made, and shall be deemed to have made, the
representations and warranties contained in section 5 of the Agreement on and as
of the date hereof, (iii) as security for the payment and performance in full of
its Guarantor Obligations, does hereby create and grant to the Administrative
Agent, its successors and permitted assigns, for its benefit and the ratable
benefit of the Issuing Bank, the Lenders and the Rate Protection Lenders, their
respective successors and permitted assigns, a security interest in the
Collateral (as defined in the Agreement) of the Additional Guarantor and (iv)
shall have made, and shall be deemed to have made, all of the covenants and
agreements of a Guarantor set forth in the Agreement.
[NAME OF ADDITIONAL GUARANTOR]
By:
------------------
Name:
----------------
Title:
---------------
Address for Notices:
-------------------
-------------------
-------------------
-------------------
Attention:
--------
Telephone: ( ) -
--- --- ----
Telecopy: ( ) -
--- --- ----
-25-
Accepted and agreed to as
of the date first above written:
THE BANK OF NEW YORK, as Administrative Agent
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[SCHEDULES CORRESPONDING TO THE SCHEDULES
IN THE AGREEMENT ARE TO BE ATTACHED]
- 26 -
ANNEX B TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF September 25, 1997
FORM OF TRANSACTION STATEMENT
-----------------------------
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE
TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHT ON
THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A SECURITY.
[DATE]
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Ladies and Gentlemen:
The undersigned, (the "Issuer"), hereby acknowledges receipt
----------------- ------
of the Subsidiary Guaranty and Security Agreement, dated as of September 25,
1997 (as the same may be amended, supplemented or otherwise modified from time
to time, the "Agreement"), by and among each Guarantor party thereto, SALEM
---------
COMMUNICATIONS CORPORATION (the "Borrower") and THE BANK OF NEW YORK, as
--------
Administrative Agent (in such capacity, the "Administrative Agent") and (i)
--------------------
consents to the terms thereof and (ii) confirms that a pledge of the right,
title and interest in the security referred to below has been registered in the
books and records of the Issuer in the name of the Administrative Agent, as set
forth below. This Transaction Statement is issued under Section 8-408 of the New
York State Unifortn Commercial Code.
1. Description of the Security:
-----------------------------------.
2. Number of Shares or Units Pledged:
------------------------------.
3. Registered Owner:
[NAME OF PLEDGING GUARANTOR]
-------------------------
-------------------------
-------------------------
Attention:
---------------
---------------
Taxpayer ID#
-------------.
4. Registered Pledgee and Taxpayer Identification Number (if any):
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention:
------------------
------------------
Taxpayer ID# 13-5160382
5. Date of Registration of the Pledge: The pledge described herein was
registered on on the books and records of the Issuer.
------------------
6. Notation of Liens: There are no liens, restrictions or adverse claims as to
which the Issuer has a duty under Section 8-403(4) of the Uniform Commercial
Code (the "UCC") to which such security is or may be subject, other than
---
those set forth in the Loan Documents (as defined in that certain Credit
Agreement, dated as of the date hereof, by and among the Borrower, the
Lenders party thereto and The Bank of New York, as Administrative Agent and
Bank of America NT & SA, as Documentation Agent, as amended, supplemented or
otherwise modified from time to time) or [LIST APPLICABLE ORGANIZATIONAL
DOCUMENTS].
The Issuer hereby agrees, at the request of the Administrative Agent and
at the expense of the Issuer, to register any further assignment or transfer of
the foregoing security effected in the manner contemplated by the Agreement
and promptly to furnish to the Administrative Agent and any such assignee or
transferee any statement contemplated by Section 8-408 of the UCC.
[NAME OF ISSUER]
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
-2-
IN WITNESS WHEREOF, the Guarantor has caused this Assignment to be duly
executed by its duly authorized officer as of the day of , .
-- ----- ---------
[NAME OF GUARANTOR]
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
- 30 -
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this day of , , before me personally came
-- -- ----
, to me known, who, being by me duly sworn, did depose and say that he
- --------
resides at ; that he is the of [NAME OF GUARANTOR], the
------------------ ---------
corporation described in and which executed the above instrument, and that he
signed his name thereto by order of the board of directors thereof.
----------------------------
Notary Public
[Notary's Stamp]
-31-
Schedule 1
to
Grant of Security Interest (Patents)
Dated as of ____________
-32-
Annex C-2 to the Subsidiary Guaranty
and Security Agreement
Dated as of September 25, 1997
FORM OF GRANT OF SECURITY INTEREST (TRADEMARKS)
-----------------------------------------------
[NAME OF GUARANTOR], a _______________ corporation (the "Guarantor"),
---------
is obligated to THE BANK OF NEW YORK, as Administrative Agent (the
"Administrative Agent"), and has entered into a Subsidiary Guaranty and
--------------------
Security Agreement, dated as of September 25, 1997 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Agreement"), by and
---------
among each Guarantor party thereto, SALEM COMMUNICATIONS CORPORATION (the
"Borrower") and THE BANK OF NEW YORK, as Administrative Agent (in such capacity,
--------
the "Administrative Agent").
--------------------
Pursuant to the Agreement, the Guarantor granted to the Administrative
Agent a security interest in all of the right, title and interest of the
Guarantor in and to the trademarks listed on Schedule 1, which trademarks are
registered in the United States Patent and Trademark Office (the "Trademarks"),
----------
together with the goodwill of the business symbolized by the Trademarks and the
applications and registrations therefor, and all proceeds thereof, any and all
causes of action which may exist by reason of infringement thereof (the
"Collateral"), to secure the prompt payment, performance and observance of the
Guarantor Obligations (as defined in the Agreement).
For good and valuable consideration, the receipt of which is hereby
acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Guarantor does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Guarantor Obligations.
The Guarantor does hereby further acknowledge and affirm that the
rights and remedies of the Administrative Agent with respect to the assignment
of and security interest in the Collateral made and granted hereby are set forth
in the Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Guarantor
Obligations (as such term is defined in the Agreement), the Administrative Agent
will take whatever actions are necessary at the Guarantor's expense to release
or reconvey to the Guarantor all right, title and interest of the Guarantor in
and to the Trademarks.
The Administrative Agent's address is: One Wall Street, New York, New
York 10286.
-33-
IN WITNESS WHEREOF, the Guarantor has caused this Assignment to be
duly executed by its duly authorized officer as of the __ day of ________, ____.
[NAME OF GUARANTOR]
By: __________________________
Name: ________________________
Title:________________________
-34-
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this __ day of ____________, ____, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he resides at ________________; that he is the _______ of [NAME OF
GUARANTOR], the corporation described in and which executed the above
instrument, and that he signed his name thereto by order of the board of
directors thereof.
______________________________
Notary Public
[Notary's Stamp]
-35-
Schedule 1
to
Grant of Security Interest (Trademarks)
Dated as of ____________
-36-
SALEM EXHIBIT K
---------------
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
-------------------------------------------
This Assignment and Assumption Agreement is made and entered into as of
_______________, by and between __________ (the "Assignor") and __________ (the
--------
"Assignee").
R E C I T A L S
- - - - - - - -
A. Capitalized terms used herein which are not defined herein shall have
the meanings set forth in the Credit Agreement (as hereinafter defined).
B. The Assignor, certain other lenders (together with any prior
assignees, the "Lenders") and The Bank of New York, as Administrative Agent (the
-------
"Administrative Agent"), and Bank of America NT&SA, as Documentation Agent, are
--------------------
parties to that certain Credit Agreement, dated as of September 25, 1997 (as
amended, modified or otherwise supplemented, the "Credit Agreement"), with Salem
----------------
Communications Corporation, a California corporation (the "Borrower"). Pursuant
--------
to the Credit Agreement, the Lenders agreed to make RC Loans to the Borrower
under the RC Commitments in the aggregate amount of $75,000,000 and the Issuing
Bank agreed to issue Letters of Credit under the Letter of Credit Commitment in
the aggregate amount of $15,000,000. The amount of the Assignor's RC Commitment
is specified in Item 1 of Schedule 1 hereto. The type and outstanding principal
amount of the Assignor's RC Loans are specified in Item 2 of Schedule 1 hereto.
The Assignor's Letter of Credit Exposure is specified in Item 3 of Schedule 1
hereto.
C. The Assignor wishes to sell and assign to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, (i) the portion of the
Assignor's RC Commitment specified in Item 4 of Schedule 1 hereto (the "Assigned
--------
Commitment"), (ii) the portion of the Assignor's RC Loans specified in Item 5 of
- ----------
Schedule 1 hereto (the "Assigned Loans") and (iii) the portion of the Assignor's
--------------
Letter of Credit Exposure specified in Item 7 of Schedule 1 hereto (the
"Assigned Letter of Credit Exposure").
----------------------------------
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth herein and
----------
in the Credit Agreement, the Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, without
recourse, on the date set forth above (the "Assignment Date") all right, title,
---------------
interest and obligations under the Credit Agreement and the other Loan Documents
of the Assignor in and with respect to the Assigned Loans, the Assigned Letter
of Credit Exposure and the Assigned Commitments. As full consideration for the
sale of the Assigned Loans, the Assigned Letter of Credit Exposure and the
Assigned Commitment, the Assignee shall pay to the Assignor on the Assignment
Date the principal amount of the Assigned Loans (the "Purchase Price").
--------------
2. Representation and Warranties. Each of the Assignor and the Assignee
-----------------------------
represents and warrants to the other that (a) it has full power and legal right
to execute and deliver this Agreement and to perform the provisions of this
Agreement; (b) the execution,
delivery and performance of this Agreement have been authorized by all action,
corporate or otherwise, and do not violate any provisions of its charier or by-
laws or any contractual obligations or requirement of law binding on it; and (c)
this Agreement constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms.
3. Condition Precedent. The obligations of the Assignor and the Assignee
-------------------
hereunder shall be subject to the fulfillment of the condition that the Assignor
shall have (a) received payment in full of the Purchase Price, and (b) complied
with the other applicable provisions of section 11.7 of the Credit Agreement.
4. Notice of Assignment. The Assignor agrees to give notice of the
--------------------
assignment and assumption of the Assigned Loans, the Assigned Letter of Credit
Exposure and the Assigned Commitment to the Administrative Agent and the
Borrower and hereby instructs the Administrative Agent and the Borrower to make
all payments with respect to the Assigned Loans, the Assigned Letter of Credit
Exposure and the Assigned Commitment directly to the Assignee at the applicable
Lending Offices specified in Item 8 on Schedule 1 hereto; provided, however,
that the Borrower and the Administrative Agent shall be entitled to continue to
deal solely and directly with the Assignor in connection with the interests so
assigned until the Administrative Agent and the Borrower shall have received
notice of the assignment, the Administrative Agent and the Issuing Bank (to the
extent required by section 11.7 of the Credit Agreement) shall have consented in
writing thereto, and the Administrative Agent shall have recorded and accepted
this Agreement and received the Assignment Fee required to be paid pursuant to
section 11.7 of the Credit Agreement. From and after the date (the "Effective
---------
Date") on which the Administrative Agent shall notify the Borrower and the
- ----
Assignor that the requirements set forth in the foregoing sentence shall have
occurred and all consents (if any) required shall have been given, (i) the
Assignee shall be deemed to be a party to the Credit Agreement and, to the
extent that rights and obligations thereunder shall have been assigned to
Assignee as provided in such notice of assignment to the Administrative Agent,
shall have the rights and obligations of a Lender under the Credit Agreement,
and (ii) the Assignee shall be deemed to have appointed the Administrative Agent
to take such action as Administrative Agent on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Administrative Agent by
the terms thereof, together with such powers as are reasonably incidental
thereto. After the Effective Date, the Administrative Agent shall make all
payments in respect of the interest assigned hereby (including payments of
principal, interest, fees and other amounts) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustment in payments under the Assigned
Loans, the Assigned Letter of Credit Exposure and the Assigned Commitment for
periods prior to the Effective Date hereof directly between themselves. The
Assignee agrees to deliver to the Borrower and the Administrative Agent such
Internal Revenue Service forms as may be required to establish that the Assignee
is entitled to receive payments under the Credit Agreement without deduction or
withholding of tax.
5. Independent Investigation. The Assignee acknowledges that it is
-------------------------
purchasing the Assigned Loans, the Assigned Letter of Credit Exposure and the
Assigned Commitment from the Assignor totally without recourse and, except as
provided in Section 2 hereof, without representation or warranty. The Assignee
further acknowledges that it has made its own independent investigation and
credit evaluation of the Borrower and the other Loans Parties in connection with
its purchase of the Assigned Loans, the Assigned Letter of Credit Exposure and
the Assigned Commitment. Except for the
-2-
representations or warranties set forth in Section 2, the Assignee acknowledges
that it is not relying on any representation or warranty of the Assignor,
expressed or implied, including without limitation, any representation or
warranty relating to the legality, validity, genuineness, enforceability,
collectibility, interest rate, repayment schedule or accrual status of the
Assigned Loans, the Assigned Letter of Credit Exposure or the Assigned
Commitment, the legality, validity, genuineness or enforceability of the Credit
Agreement, the related Notes, or any other Loan Document referred to in or
delivered pursuant to the Credit Agreement, or financial condition or
creditworthiness of the Borrower or any other Person. The Assignor has not and
will not be acting as either the representative, Administrative Agent or trustee
of the Assignee with respect to matters arising out of or relating to the Credit
Agreement or this Agreement. From and after the Effective Date, except as set
forth in Section 4 above, the Assignor shall have no rights or obligations with
respect to the Assigned Loans, the Assigned Letter of Credit Exposure or the
Assigned Commitment.
6. Method of Payment. All payments to be made by either party hereunder
-----------------
shall be in funds available at the place of payment on the same day and shall be
made by wire transfer to the account designated by the party to receive payment.
7. Integration. This Agreement shall supersede any prior agreement or
-----------
understanding between the parties (other than the Credit Agreement) as to the
subject matter hereof.
8. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and shall be
binding upon both parties, their successors and assigns.
9. Headings. Section headings have been inserted herein for convenience
--------
only and shall not be construed to be a part hereof.
10. Amendments; Waivers. This Agreement may not be amended, changed,
-------------------
waived or modified except by a writing executed by the parties hereto, and may
not be amended, changed, waived or modified in any manner inconsistent with
section 11.7 of the Credit Agreement without the prior written consent of the
Administrative Agent.
11. Governing Law. This Agreement shall be governed by, and construed in
-------------
accordance with the laws of, the State of New York.
[ASSIGNOR]
By: _______________________________
Title: ____________________________
[ASSIGNEE]
By: ________________________________
Title:______________________________
-3-
Consented and Accepted:
THE BANK OF NEW YORK, as Administrative Agent
By: ______________________________
Title: ___________________________
Consented:
THE BANK OF NEW YORK, as Issuing Bank
By: ______________________________
Title: ___________________________
-4-
SCHEDULE 1
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
relating to the
Credit Agreement, dated as of September 25, 1997, by and among Salem
Communications Corporation, the Lenders party thereto, The Bank of New
York, as Administrative Agent, and Bank of America NT&SA, as Documentation
Agent, as amended, modified or otherwise supplemented.
Item 1. Assignor's RC Commitment $______________
Item 2. Assignor's RC Loans $______________
consisting of:
ABR Loans $______________
Eurodollar Loans $______________
Item 3. Assignor's Letter of $______________
Credit Exposure
Item 4. Amount of Assigned RC $______________
Commitment
Item 5. Percentage of RC
Commitment Assigned
as a percentage of
the aggregate RC
Commitments of all
Lenders _________%
Item 6. Amount of Assigned RC Loans $______________
consisting of:
ABR Loans $______________
Eurodollar Loans $______________
Item 7. Amount of Assigned Letter
of Credit Exposure $______________
Item 8. Applicable Lending Offices
of Assignee and Address for
Notices pursuant to section
11.2 of the Credit Agreement
Applicable Applicable
Lending Lending Office
Office for ABR for Eurodollar Address
Loans Loans for Notices
- ------------- --------------- -----------
_____________ _______________ ___________
_____________ _______________ ___________
Attention: Attention: Attention:
Telephone: Telephone: Telephone:
Telecopier: Telecopier: Telecopier:
-2-
SALEM COMMUNICATIONS CORPORATION
SCHEDULE 1.1(L)
LIST OF APPLICABLE LENDING OFFICES
----------------------------------
APPLICABLE LENDING OFFICE
FOR BASE RATE LOANS APPLICABLE LENDING OFFICE
AND CD RATE LOANS FOR LIBOR RATE LOANS
------------------------- --------------------------
1. The Bank of New York 1. The Bank of New York
One Wall Street One Wall Street
New York, New York 10286 New York, New York 10286
Attention: Michael Pizarro Attention: Michael Pizarro
Telephone: (212) 635-4697 Telephone: (212) 635-4697
Telecopy: (212) 635-6365 Telecopy: (212) 635-6365
2. Bank of America NT & SA 2. Bank of America NT & SA
333 So. Beaudry - 19th Floor 333 So. Beaudry - 19th Floor
Los Angeles, CA 90071 Los Angeles, CA 90071
Attention: Yolanda Monarrez Attention: Yolanda Monarrez
Telephone: (213) 345-6534 Telephone: (213) 345-6534
Telecopy: (213) 345-6550 Telecopy: (213) 345-6550
3. BankBoston, N.A. 3. BankBoston, N.A.
100 Federal Street 100 Federal Street
MS 01-08-08 MS 01-08-08
Boston, MA 02110 Boston, MA 02110
Attention: Steve Lynn Attention: Steve Lynn
Telephone: (617) 434-9627 Telephone: (617) 434-9627
Telecopy: (617) 434-9829 Telecopy: (617) 434-9829
4. Fleet Bank, N.A. 4. Fleet Bank, N.A.
60 East 42nd Street - 3rd F1. 60 East 42nd Street - 3rd Fl.
New York, NY 10017 New York, NY 10017
Attention: Garrett Komjathy Attention: Garrett Komjathy
Telephone: (212) 907-5677 Telephone: (212) 907-5677
Telecopy: (212) 907-5627 Telecopy: (212) 907-5627
Address as of 9/29/97: Address as of 9/29/97:
Fleet National Bank Fleet National Bank
1185 Avenue of the Americas 1185 Avenue of the Americas
16th Floor 16th Floor
New York, NY 10036 New York, NY 10036
Attention: Garrett Komjathy Attention: Garrett Komjathy
Telephone: (212) 819-6043 Telephone: (212) 819-6043
Telecopy: (212) 819-6202 Telecopy: (212) 819-6202
5. Union Bank of California, N.A. 5. Union Bank of California, N.A.
445 South Figueroa Street 445 South Figueroa Street
7th Floor 7th Floor
Los Angeles, CA 90071 Los Angeles, CA 90071
Attention:______________ Attention: ______________
Telephone: (___) ___-____ Telephone: (___) ___-____
Telecopy: (___) ___-____ Telecopy: (___) ___-____
-2-
SCHEDULE 4.1
------------
TO CREDIT AGREEMENT
-------------------
Schedule 4.1 to the Credit Agreement
Dated as of September 25, 1997
LIST OF SUBSIDIARIES
--------------------
NOTE: All listed entities are corporations except Beltway Media Partners,
which is a general partnership. Salem Communications Corporation
("Salem"), New Inspiration Broadcasting, Inc. and Golden Gate
Broadcasting, Inc. are the sole partners of Beltway Media Partners.
ATEP Radio, Inc.
Beltway Media Partners
Bison Media, Inc.
Caron Broadcasting, Inc.
Common Ground Broadcasting, Inc.
Golden Gate Broadcasting Co., Inc.
Inland Radio, Inc.
Inspiration Media of Texas, Inc.
Inspiration Media, Inc.
New England Continental Media, Inc.
New Inspiration Broadcasting Co., Inc.
Oasis Radio, Inc.
Pennsylvania Media Associates, Inc.
Radio 1210, Inc.
Salem Communications Corporation, a Delaware corporation
Salem Media Corporation
Salem Media of California, Inc.
Salem Media of Colorado, Inc.
Salem Media of Louisiana, Inc.
Salem Media of Ohio, Inc.
Salem Media of Oregon, Inc.
Salem Media of Pennsylvania, Inc.
Salem Media of Texas, Inc.
Salem Music Network, Inc.
Salem Radio Network Incorporated
Salem Radio Representatives, Inc.
South Texas Broadcasting, Inc.
SRN News Network, Inc.
Vista Broadcasting, Inc.
SCHEDULE 4.6
------------
TO CREDIT AGREEMENT
-------------------
Schedule 4.6 to the Credit Agreement
Dated as of September 25, 1997
BORROWER'S MATERIAL LITIGATION
------------------------------
None.
SCHEDULE 4.7
------------
TO CREDIT AGREEMENT
-------------------
SCHEDULE 4.7 TO THE CREDIT AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
BORROWER'S CONFLICTING AGREEMENTS
---------------------------------
None.
SCHEDULE 4.8
------------
TO CREDIT AGREEMENT
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SCHEDULE 4.8 TO THE CREDIT AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
BORROWER'S TAXES
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None.
SCHEDULE 4.11(b)
TO CREDIT AGREEMENT
Schedule 4.11(b) to the Credit Agreement
Dated as of September 25, 1997
LIST OF PROPERTY
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The following is a summary description of all real property owned and all
real property leasehold estates held by each Borrower and its Subsidiaries:
ATEP Radio, Inc. The Corporation leases office and studio space in a building in
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Oxnard, California, from Martin V. Smith & Associates under a lease expiring in
2002. The Corporation licenses the main antenna site in Ventura, California,
from Fox/Loe Properties under a lease agreement expiring in 2006, with three (3)
options to extend the term by five (5) years each.
Beltway Media Partners. The Partnership leases office and studio space in
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Arlington, Virginia, from Rosslyn Building East, L.P. under a lease expiring in
2005. The Partnership leases antenna tower space in Arlington, Virginia, from
WAVA Building Limited Partnership under a lease expiring in 2047. However, the
Partnership may terminate the tower lease with one-year's notice.
BISON Media, Inc. The Corporation leases office space from Cambridge Holdings,
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Ltd. under a lease expiring in 2002. The Corporation leases antenna and
transmitter space from Cheyenne Propagation under leases expiring in 2005
(KBIQ), 2003 (KGFT) and 2002 (KPRZ). The Corporation leases studio space in
Spokane, Washington from Walter B. Worthy under lease terminable by either party
upon 90 days notice. The Corporation leases antenna and transmitter space in
Washington from James Codiga under a lease expiring in 2001 with the option to
renew for five (5) successive periods of five (5) years each.
Caron Broadcasting. Inc. The Corporation leases office/studio space for WHK and
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WHLO from S&S Realty Investments under a lease expiring in 1998, with two
options to renew for five (5) years each. The Corporation leases transmitter
space for WHK & WTSJ from Messrs. Atsinger and Epperson under lease expiring in
2007; for WITH from Curtain Avenue Limited under a lease expiring in 1998; and
for WCCD from Walter Oschek under a lease expiring in 2022. The Corporation
leases office/studio space for WITH from Executive Offices Corporation under a
lease expiring in 1998; and, for WTSJ from Messrs. Atsinger and Epperson under
lease expiring in 2007.
Common Ground Broadcasting. Inc. The Corporation leases office space in Phoenix,
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Arizona, from Esplanade Office Limited Partnership under a lease expiring in
2006 and antenna and transmitter space from Johnaquille J. Hegel under a lease
expiring in 2016. The Corporation lease office and transmitter space in Eagan,
Minnesota, from Messrs. Atsinger and Epperson under a lease expiring in 2006.
The Corporation leases office space in Cleveland, Ohio under lease from Summit
Office Park Limited Partnership expiring in 2009 and leases antenna and
transmitter space in Seven Hills, Ohio from Messrs. Atsinger and Epperson under
a lease expiring in 2007.
Golden Gate Broadcasting Company, Inc. The Corporation leases office and studio
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space in Fremont, California, from San Francisco Federal Savings & Loan under a
lease expiring in 1999. The antenna and tower site, consisting of 11 acres of
land in Hayward, California, is leased from Salem Broadcasting Company, a
partnership consisting of Messrs. Atsinger and Epperson, under a lease expiring
in 2003.
Inland Radio, Inc. The Corporation leases the studio and transmitter site,
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consisting of three acres of land and two buildings in San Bernardino,
California, from Messrs. Atsinger and Epperson under a lease expiring in 2002.
Inspiration Media of Texas. The Corporation leases office space in Irving,
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Texas, from TRST Las Colinas, Inc. under a lease expiring in 2001. The antenna
site is leased from Aretex Corporation under a lease expiring in 2005.
Inspiration Media, Inc. The Corporation leases office and studio space in
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Seattle, Washington, from Inter Co-op USA, No. 2 under a lease expiring in 2000,
with an option to extend the lease for an additional five years. The transmitter
site for KGNW, consisting of 20 acres of land located on Vashon Island near
Seattle, Washington, is leased by the Corporation from Messrs. Atsinger and
Epperson under a lease expiring in 2002. The transmitter site for KLFE,
consisting of 12 acres on Bainbridge Island near Seattle, Washington, is leased
by the Corporation from Messrs. Atsinger and Epperson under a lease expiring in
2004.
New England Continental Media, Inc. The Corporation leases office and studio
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space in Quincy, Massachusetts, from 500 Victory Road Associates Limited
Partnership under a lease expiring in 1999. The transmitter site for WPZE is
leased by the Corporation from Messrs. Atsinger and Epperson under a lease
expiring in 2007. The transmitter site for WEZE is leased from the Fellsway
Plaza Trust under a Lease expiring in 2008.
New Inspiration Broadcasting Company, Inc. The Corporation leases office and
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studio space in Glendale, California, from 701 N. Brand Partnership under a
lease expiring in 2002. The Corporation leases an antenna and transmitter site
on Mt. Wilson, California, from KCET-TV under a lease expiring in 1999. A backup
antenna and transmitter site is located on Flint Peak in Glendale, California,
and is leased from KPWR, Inc. under a lease expiring in 1997.
Oasis Radio, Inc. The Corporation leases office and studio space in Lancaster,
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California, from Fischer Industrial Properties under a lease expiring in 1999.
The transmitter site, consisting of nine acres of land in Rosamond, California,
is leased from the Atsinger Family Trust under a lease expiring in 2002.
Pennsylvania Media Associates, Inc. The Corporation leases studio and
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transmitter (WZZD) property in Lafayette Hill, Pennsylvania, from Messrs.
Atsinger and Epperson under a lease expiring in 2004. The Corporation leases
antenna tower space for WFIL in Lafayette Hill, Pennsylvania, from Messrs.
Atsinger and Epperson under a lease expiring in 1998, with options to renew for
an additional 15 years.
Radio 1210, Inc. The Corporation leases office and studio space in San Diego,
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California, from Radnor/La Jolla Center Partnership under a lease expiring in
2001. The transmitter site, consisting of 11 acres of land in Olivenhain,
California, is leased from the Atsinger Family. Trust under a lease expiring in
2002.
Salem Communications Corporation. The Corporation leases office space in
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Camarillo, California, from the Pardee Construction Company under a lease
expiring in 2000.
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Salem Media Corporation The Corporation leases office and studio space in
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Rutherford, New Jersey, from HIP-Linque Partners One, L.P. under a lease
expiring in 2001. The Corporation owns a perpetual easement to use the
transmitter site in Kearney, New Jersey for WMCA. The transmitter site for WWDJ
in Hackensack is leased by the Corporation from Industrialand Associates under a
lease expiring in 2016. The Corporation leases office and studio space in Elk
Grove Village, Illinois, from Metropolitan Life Insurance Company under a lease
expiring in 2002. The transmitter site is located in Arlington Heights,
Illinois, and is leased by the Corporation from Messrs. Atsinger and Epperson
under a lease expiring in 2002.
Salem Media of California, Inc. The Corporation shares studios with New
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Inspiration Media, Inc. and a transmitter site consisting of six acres of
property in Paramount, California, from Messrs. Atsinger and Epperson under
leases expiring in 2002.
Salem Media of Colorado, Inc. The Corporation leases office and studio space in
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Aurora, Colorado from Plaza Place Corporation under a lease expiring in 2006.
The Corporation leases the AM antenna and transmitter site from the KRKS General
Partnership under a lease expiring in 1999. The Corporation leases the FM
transmitter and antenna site from Sterling Realty Organization under a lease
expiring in 2018. The Corporation leases the KNUS tower site from Messrs.
Atsinger and Epperson under a lease expiring in 2006.
Salem Media of Ohio, Inc. The Corporation leases office and studio space in
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Columbus, Ohio, from Eastrich No. 152 Corporation under a lease expiring in
2005. The transmitter site in Columbus, Ohio, is leased by the Corporation from
Messrs. Atsinger and Epperson under a lease expiring in 2002.
Salem Media of Oregon, Inc. The Corporation leases the office and studio
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building in Portland, Oregon, from Messrs. Atsinger and Epperson under a lease
expiring in 2002. The Corporation also leases the AM transmitter site,
consisting of 15 acres in Raleigh Hills, Oregon, from Messrs. Atsinger and
Epperson under a lease expiring in 2002. The Corporation leases the FM
transmitter site in Portland, Oregon, from KSGO/KGON, Inc. under a lease
expiring in 2000.
Salem Media of Pennsylvania, Inc. The Corporation leases offices and studio
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space in Pittsburgh, Pennsylvania, from PWC Associates under a lease expiring in
2001. The Corporation leases the transmitter site in Pittsburgh, Pennsylvania,
from Messrs. Atsinger and Epperson under a lease expiring in 2003.
Salem Media of Texas, Inc. The Corporation lease office and studio space in San
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Antonio, Texas, from Fiesta Properties under a lease expiring in 2002 with an
option to renew for five (5) years. The transmitter site located on Gonzalez
Road in San Antonio is leased from Messrs. Atsinger and Epperson under a lease
expiring in 2004.
Salem Music Network, Inc. The Corporation leases office space in Colorado
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Springs, Colorado, from Bethesda Management Company under a lease expiring in
2003 and in Nashville, Tennessee, from the Equitable Life Assurance Society of
the United States under a lease expiring in 1997.
Salem Radio Network Incorporated The Corporation leases office space in Irving,
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Texas, from TRST Last Colinas, Inc. under a lease expiring in 2001. The
Corporation leases office space in Arlington, Virginia, from Rosslyn Building
East, L.P. under a lease expiring in 2005.
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Salem Radio Representatives, Inc. The Corporation leases office space in
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Irving, Texas, from Cambridge/Las Colinas Limited Parmership under a lease
expiring in 1997. The Corporation shares office space with WAVA (Arlington,
Virginia), WYLL (Elk Grove, Illinois), KGNW (Seattle, Washington), Salem Music
Network, Inc. (Nashville, Tennessee) and Salem Communications Corporation
(Camarillo, California).
South Texas Broadcasting. Inc. The Corporation leases office and studio space in
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Houston, Texas, from American National Insurance Company under two leases
expiring in 2000 and 2005, respectively. The FM transmitter site, located in San
Jacinto County, Texas, and the AM transmitter site, located in Harris County,
Texas, are leased from Messrs. Atsinger and Epperson under a lease expiring in
2005.
SRN News Network, Inc. The Corporation leases office space in Arlington,
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Virginia, from Rosslyn Building East Limited Partnership under a lease expiring
in 2005.
Vista Broadcasting. Inc. The Corporation leases office and studio space in
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Sacramento, California, from P. T. West Associates, L.P. under a lease expiring
in 2007. The antenna site for KFIA is leased from Messrs. Atsinger and Epperson
under a lease expiring in 2005. The antenna site for KMJI is leased from Krisik,
et. al., under a lease expiring in 2029 and from Messrs. Tracy under a lease
expiring in 1999.
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SCHEDULE 4.11(c)
TO CREDIT AGREEMENT
Schedule 4.11(c) to the Credit Agreement
Dated as of September 25, 1997
FCC MATTERS
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None.
SCHEDULE 4.14
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TO CREDIT AGREEMENT
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Schedule 4.14 to the Credit Agreement
Dated as of September 25, 1997
BORROWER'S TAXES
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1. The Borrower provides a 401(k) Savings Plan to employees for the purposes
of providing retirement benefits to full-time employees of the Borrower and
its Subsidiaries.
SCHEDULE 4.18
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TO CREDIT AGREEMENT
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Schedule 4.18 to the Credit Agreement
Dated as of September 25, 1997
BORROWER'S ENVIRONMENTAL MATTERS
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None.
SCHEDULE 8.1
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TO CREDIT AGREEMENT
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Schedule 8.1 to the Credit Agreement
Dated as of September 25, 1997
LIST OF BORROWINGS
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None.
SCHEDULE 8.2
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TO CREDIT AGREEMENT
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Schedule 8.2 to the Credit Agreement
Dated as of September 25, 1997
LIST OF LIENS
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1. Liens on the property of Borrower or its Subsidiaries arising out of or
relating to the Existing Credit Agreement.
SCHEDULE 8.5(c)
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TO CREDIT AGREEMENT
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Schedule 8.5(c) to the Credit Agreement
Dated as of September 25, 1997
BORROWER'S INVESTMENTS, LOANS, ETC.
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1. Borrower loaned $350,000 to Truth for Life, an Ohio non-profit corporation,
pursuant to a Loan Agreement dated January 9, 1995, as amended July 1,
1996.