EXECUTION COPY
LOAN AGREEMENT
by and among
GRAY COMMUNICATIONS SYSTEMS, INC.,
as the Borrower,
KEYBANK NATIONAL ASSOCIATION,
as Agent,
NATIONSBANK, N.A. (SOUTH),
as Co-Agent,
and
THE FINANCIAL INSTITUTIONS LISTED HEREIN
AS OF SEPTEMBER 23, 1996
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
1.3 Accounting Provisions. . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2. THE LOANS AND THE LETTERS OF CREDIT. . . . . . . . . . . . . . . 19
2.1 The Revolving Commitment and the Revolving
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.2 The Term Commitment and the Term Loans . . . . . . . . . . . . . 21
2.3 Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . 22
2.4 Making and Continuation/Conversion of the Loans. . . . . . . . . 27
2.5 The Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.6 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.7 Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.8 Reserves or Deposit Requirements, Etc. . . . . . . . . . . . . . 33
2.9 Tax Law, Increased Costs, Etc. . . . . . . . . . . . . . . . . . 33
2.10 Eurodollar Deposits Unavailable or Interest Rate
Unascertainable. . . . . . . . . . . . . . . . . . . . . . . . . 34
2.11 Changes in Law Rendering LIBOR Loans Unlawful. . . . . . . . . . 34
2.12 Funding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.13 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.14 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . 35
2.15 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
2.16 Incremental Commitment . . . . . . . . . . . . . . . . . . . . . 36
SECTION 3. INTEREST; PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . 37
3.1 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.2 Manner of Payments . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 4. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER . . . . . . . . . 39
5.1 Organization and Powers. . . . . . . . . . . . . . . . . . . . . 39
5.2 Authorization. . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . 41
5.4 Projections. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.5 Capitalization of the Borrower and its
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 41
5.6 Title to Properties; Patents, Trademarks, Etc. . . . . . . . . . 42
5.7 Litigation; Proceedings. . . . . . . . . . . . . . . . . . . . . 42
5.8 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
5.9 Absence of Conflicts . . . . . . . . . . . . . . . . . . . . . . 43
5.10 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.11 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.12 Statements Not Misleading. . . . . . . . . . . . . . . . . . . . 45
5.13 Consents or Approvals. . . . . . . . . . . . . . . . . . . . . . 45
5.14 Material Contracts and Commitments . . . . . . . . . . . . . . . 45
5.15 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . 46
5.16 Licenses and Operating Agreements. . . . . . . . . . . . . . . . 46
5.17 Material Restrictions. . . . . . . . . . . . . . . . . . . . . . 47
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5.18 Investment Company Act . . . . . . . . . . . . . . . . . . . . . 47
5.19 Absence of Material Adverse Effect . . . . . . . . . . . . . . . 47
5.20 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.21 Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.22 Securities Laws. . . . . . . . . . . . . . . . . . . . . . . . . 48
5.23 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.24 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 48
5.25 Environmental Compliance . . . . . . . . . . . . . . . . . . . . 48
5.26 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
5.27 Phipps Purchase Agreement, Subordinated Note
Indenture and Registration Statements. . . . . . . . . . . . . . 51
5.28 License Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS . . . . . . . . 53
6.1 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
6.2 Security Agreements. . . . . . . . . . . . . . . . . . . . . . . 53
6.3 Pledge Agreements. . . . . . . . . . . . . . . . . . . . . . . . 54
6.4 Real Estate Matters. . . . . . . . . . . . . . . . . . . . . . . 54
6.5 Financing Statements . . . . . . . . . . . . . . . . . . . . . . 56
6.6 Subsidiary Guaranty. . . . . . . . . . . . . . . . . . . . . . . 56
6.7 Opinion of Borrower's Counsel. . . . . . . . . . . . . . . . . . 57
6.8 Consummation of Phipps Purchase Agreement. . . . . . . . . . . . 57
6.9 Subordinated Notes . . . . . . . . . . . . . . . . . . . . . . . 58
6.10 Class B Common Stock Issuance. . . . . . . . . . . . . . . . . . 58
6.11 Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . . . 58
6.12 Payment of Existing Indebtedness . . . . . . . . . . . . . . . . 58
6.13 Financial Information. . . . . . . . . . . . . . . . . . . . . . 58
6.14 Engineer's Report. . . . . . . . . . . . . . . . . . . . . . . . 59
6.15 Due Diligence. . . . . . . . . . . . . . . . . . . . . . . . . . 59
6.16 Borrowing Request. . . . . . . . . . . . . . . . . . . . . . . . 59
6.17 Insurance Certificates . . . . . . . . . . . . . . . . . . . . . 60
6.18 Corporate Documents. . . . . . . . . . . . . . . . . . . . . . . 60
6.19 Lien Searches, Consents and Releases of Liens. . . . . . . . . . 60
6.20 No Order, Judgment or Decree . . . . . . . . . . . . . . . . . . 61
6.21 No Material Adverse Effect . . . . . . . . . . . . . . . . . . . 61
6.22 Fee Letter; Fees and Expenses. . . . . . . . . . . . . . . . . . 61
6.23 Legal Approval . . . . . . . . . . . . . . . . . . . . . . . . . 61
6.24 Other Documents. . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER. . . . . . . . . . . . . . 61
7.1 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . 61
7.2 Continued Existence; Maintenance of Rights and
Licenses; Compliance with Law. . . . . . . . . . . . . . . . . . 62
7.3 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.4 Obligations and Taxes. . . . . . . . . . . . . . . . . . . . . . 63
7.5 Financial Statements and Reports . . . . . . . . . . . . . . . . 64
7.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
7.7 Maintenance of Property. . . . . . . . . . . . . . . . . . . . . 67
7.8 Information and Inspection . . . . . . . . . . . . . . . . . . . 68
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7.9 Maintenance of Liens . . . . . . . . . . . . . . . . . . . . . . 68
7.10 Title To Property. . . . . . . . . . . . . . . . . . . . . . . . 68
7.11 Environmental Compliance and Indemnity . . . . . . . . . . . . . 68
7.12 Rate Hedging Obligations . . . . . . . . . . . . . . . . . . . . 70
7.13 FCC Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 70
7.14 Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
7.15 Real Estate. . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 8. NEGATIVE COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . 71
8.1 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.2 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.3 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
8.4 Rental and Conditional Sale Obligations. . . . . . . . . . . . . 73
8.5 Real Property Interests. . . . . . . . . . . . . . . . . . . . . 73
8.6 Capitalized Lease Obligations. . . . . . . . . . . . . . . . . . 73
8.7 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . 73
8.8 Notes, Accounts Receivable and Claims. . . . . . . . . . . . . . 74
8.9 Capital Distributions; Restrictions on Payments to
Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . 74
8.10 Disposal of Property; Mergers; Acquisitions;
Reorganizations. . . . . . . . . . . . . . . . . . . . . . . . . 76
8.11 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . 79
8.12 Amendment of Governing Documents . . . . . . . . . . . . . . . . 79
8.13 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . 79
8.14 Management Agreements and Fees . . . . . . . . . . . . . . . . . 81
8.15 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . 82
8.16 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
8.17 Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
8.18 Change of Name, Identity or Corporate Structure. . . . . . . . . 82
8.19 Amendments or Waivers. . . . . . . . . . . . . . . . . . . . . . 82
8.20 Issuance or Transfer of Capital Stock and other
Equity Interests . . . . . . . . . . . . . . . . . . . . . . . . 83
8.21 Change in Business . . . . . . . . . . . . . . . . . . . . . . . 83
8.22 Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . 83
8.23 License Subsidiaries . . . . . . . . . . . . . . . . . . . . . . 83
8.24 Subordinated Debt. . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 9. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . 84
9.1 Non-Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.2 Failure of Performance in Respect of Other
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . 85
9.3 Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . 85
9.4 Cross-Defaults . . . . . . . . . . . . . . . . . . . . . . . . . 85
9.5 Assignment for Benefit of Creditors. . . . . . . . . . . . . . . 85
9.6 Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.7 Appointment of Receiver; Liquidation . . . . . . . . . . . . . . 86
9.8 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
9.9 Impairment of Collateral; Invalidation of any Loan
Document . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
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9.10 Termination of License or Operating Agreement. . . . . . . . . . 87
9.11 Change of Control. . . . . . . . . . . . . . . . . . . . . . . . 87
9.12 Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.13 Cessation of Operations. . . . . . . . . . . . . . . . . . . . . 88
9.14 Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . 88
9.15 Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . 88
SECTION 10. REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
10.1 Optional Defaults. . . . . . . . . . . . . . . . . . . . . . . . 88
10.2 Automatic Defaults . . . . . . . . . . . . . . . . . . . . . . . 89
10.3 Performance by the Banks . . . . . . . . . . . . . . . . . . . . 89
10.4 Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . 90
10.5 Enforcement and Waiver by the Banks. . . . . . . . . . . . . . . 90
SECTION 11. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
11.3 General Immunity . . . . . . . . . . . . . . . . . . . . . . . . 90
11.4 Action on Instructions of the Banks. . . . . . . . . . . . . . . 91
11.5 Employment of Agents and Counsel . . . . . . . . . . . . . . . . 91
11.6 Reliance on Documents; Counsel . . . . . . . . . . . . . . . . . 92
11.7 Agent's Reimbursement and Indemnification. . . . . . . . . . . . 92
11.8 Rights as a Bank . . . . . . . . . . . . . . . . . . . . . . . . 92
11.9 Bank Credit Decision . . . . . . . . . . . . . . . . . . . . . . 92
11.10 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . . 93
11.11 Ratable Sharing. . . . . . . . . . . . . . . . . . . . . . . . . 93
11.12 Actions by the Agent and the Banks . . . . . . . . . . . . . . . 94
SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 94
12.1 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . 94
12.2 Further Assurance. . . . . . . . . . . . . . . . . . . . . . . . 94
12.3 Expenses of the Agent and the Banks;
Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 95
12.4 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
12.5 Waiver and Release by the Borrower . . . . . . . . . . . . . . . 97
12.6 Right of Set Off . . . . . . . . . . . . . . . . . . . . . . . . 97
12.7 Successors and Assigns; Participations . . . . . . . . . . . . . 98
12.8 APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . 100
12.9 ENFORCEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 100
12.10 JURY TRIAL WAIVER. . . . . . . . . . . . . . . . . . . . . . . . 101
12.11 Binding Effect and Entire Agreement. . . . . . . . . . . . . . . 101
12.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.13 Survival of Agreements . . . . . . . . . . . . . . . . . . . . . 102
12.14 Modification . . . . . . . . . . . . . . . . . . . . . . . . . . 102
12.15 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . 103
12.16 Section Headings . . . . . . . . . . . . . . . . . . . . . . . . 103
12.17 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . 103
12.18 FCC Compliance . . . . . . . . . . . . . . . . . . . . . . . . . 103
12.19 Marshaling; Payments Set Aside . . . . . . . . . . . . . . . . . 104
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LOAN AGREEMENT
THIS LOAN AGREEMENT is made and entered into as of September 23, 1996,
by and among GRAY COMMUNICATIONS SYSTEMS, INC., a Georgia corporation (the
"Borrower"), the FINANCIAL INSTITUTIONS listed on the signature pages hereof,
NATIONSBANK, N.A. (SOUTH), as co-agent (the "Co-Agent"), and KEYBANK NATIONAL
ASSOCIATION, as agent (the "Agent").
RECITALS:
The Borrower desires to borrow from the Banks (as that term is defined
below) up to $53,500,000 on a reducing revolving credit basis and up to
$71,500,000 on a revolving credit converting to a term loan basis, the
proceeds of which will be used to fund certain acquisitions, for the
repayment of certain existing indebtedness, for capital expenditures and
working capital purposes in the operations of the Borrower and its
Subsidiaries and to provide standby letters of credit.
AGREEMENTS:
Accordingly, the Borrower, the Banks and the Agent agree as follows:
SECTION 1. DEFINITIONS.
1.1 DEFINITIONS. All terms typed with leading capitals are
terms defined in this Agreement. For the purposes of this Agreement, the terms
defined in this Section 1 shall have the meanings set out below.
"AFFILIATE" means, with respect to any Person (a) any other
Person which is directly or indirectly controlled by, under common control with
or controlling the first specified Person; (b) a Person owning beneficially or
controlling 10% or more of the equity interest in such other Person; (c) any
officer, director or partner of such other Person; or (d) any spouse or relative
(by blood, adoption or marriage) of any such individual Person. The term
"control" means possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person whether through
the ownership of voting securities, partnership interests, by contract or
otherwise.
"APPLICABLE MARGIN" means, as of any date of determination, the
percentage determined from the following table based upon the Leverage Ratio:
Leverage Ratio: Applicable Margin Applicable Margin
- -------------- for Base Rate for LIBOR Loans:
Loans: ---------------
------
Greater than 1.0% 3.25%
6.5:1.0 but less
than or equal to
6.75:1.0
Greater than 0.75% 3.00%
6.25:1.0 but less
than or equal to
6.50:1.0
Greater than 0.50% 2.75%
6.00:1.0 but less
than or equal to
6.25:1.0
Greater than 0.25% 2.50%
5.50:1.0 but less
than or equal to
6.00:1.0
Greater than 0.00% 2.25%
5.00:1.0 but less
than or equal to
5.50:1.0
Greater than 0.00% 2.00%
4.50:1.0 but less
than or equal to
5:00:1.0
Greater than 0.00% 1.75%
4.00:1.0 but less
than or equal to
4.50:1.0
Less than or equal 0.00% 1.50%
4.0:1.0
"APPLICABLE PERCENTAGE" means, as of any date of determination, the
percentage determined from the following table based upon the Leverage Ratio:
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Leverage Ratio: Applicable Percentage:
- -------------- ---------------------
Greater than 4.5:1.0 50%
Less than or equal to 4.5:1.0 0%;
PROVIDED, HOWEVER, that the Applicable Percentage shall be 100% if at the time
of determination a Possible Default or Event of Default exists.
"ASSET SALE" means the sale by the Borrower or any of its Subsidiaries
to any Person of any of the stock, partnership interests or other equity
interests of any Subsidiary or any other assets of the Borrower or any
Subsidiary, other than (a) the sale of assets in one transaction or a series
of transactions with an aggregate value which does not exceed in any fiscal
year an amount equal to $300,000 and (b) the sale in the ordinary course of
business of assets held for resale in the ordinary course of business or the
trade in or replacement of assets in the ordinary course of business;
PROVIDED, HOWEVER, that the transfer of all or substantially all of the
assets of WALB-TV or WJHG-TV to a trust of which the Borrower and/or its
Subsidiaries are the sole beneficiaries shall not constitute an Asset Sale
(except that any subsequent sale or transfer by such trust to any third party
shall constitute an Asset Sale).
"BANKING DAY" means a day on which the main office of the Agent is open
to the public for the transaction of business, and on which, with respect to
any LIBOR Loan, banks are open for business in London, England, and quoting
deposit rates for dollar deposits.
"BANKS" means the financial institutions listed on the signature pages
of this Agreement and their respective successors and assigns; the term
"Banks" shall include the Issuing Bank.
"BASE RATE" means the rate of interest determined and publicly announced
by the Agent from time to time as its prime rate at its main office in
Cleveland, Ohio. The prime rate functions as a reference rate index, and the
Agent may charge borrowers more or less than the prime rate. The Base Rate
will automatically change as and when such prime rate changes.
"BASE RATE LOANS" means those Loans described in Sections 2.1 and 2.2 on
which the Borrower shall pay interest at a rate based on the Base Rate.
"BENEFIT ARRANGEMENT" means any pension, profit-sharing, thrift or other
retirement plan, medical, hospitalization, vision, dental, life, disability
or other insurance or benefit plan, deferred compensation, stock
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ownership, stock purchase, stock option, performance share, bonus, fringe
benefit, savings or other incentive plan, severance plan or other similar
plan, agreement, arrangement or understanding, to which the Borrower or any
member of the Controlled Group is, or in the preceding six years was,
required to contribute on behalf of its employees or directors, whether or
not such plan, agreement, arrangement or understanding is subject to ERISA.
"BORROWER PLEDGE AGREEMENT" has the meaning assigned to it in Section
6.3(a).
"BORROWER SECURITY AGREEMENT" has the meaning assigned to it in Section
6.2(a).
"CAPITAL DISTRIBUTION" means any dividend, payment or distribution made,
liability incurred or other consideration given for the purchase,
acquisition, redemption or retirement of any stock, partnership interest or
other equity interest of the Borrower or any of its Subsidiaries or as a
dividend, return of capital or other payment or distribution of any kind to a
shareholder or partner of the Borrower or any of its Subsidiaries in respect
of the Borrower's or such Subsidiary's stock or partnership interests;
PROVIDED, HOWEVER, that any dividend or other distribution with respect to
any class of capital stock paid or made in such class of capital stock shall
not constitute a Capital Distribution for purposes of this Agreement.
"CAPITAL EXPENDITURES" means any payments by the Borrower or any of its
Subsidiaries for or in connection with the rental, lease, purchase,
construction or use of any real or personal property the value or cost of
which, under GAAP, should be capitalized and appear on the Borrower's or such
Subsidiary's balance sheet in the category of property, plant or equipment,
without regard to the manner in which such payments or the instrument
pursuant to which they are made are characterized by the Borrower or such
Subsidiary or any other Person; PROVIDED, HOWEVER, that neither (a) the
capitalized portion of the purchase price payable in connection with the
Phipps Purchase Agreement or a Permitted Acquisition, nor (b) expenditures of
proceeds of casualty insurance policies reasonably and promptly applied to
replace insured assets, shall constitute a Capital Expenditure for purposes
of this Agreement.
"CAPITALIZED LEASE OBLIGATIONS" means the obligations of the Borrower or
any of its Subsidiaries to pay rent or other amounts under leases of, or
other agreements conveying the right to use real or personal property, which
obligations are required to be classified and accounted for as capital leases
on a balance sheet of the Borrower or such Subsidiary, prepared in accordance
with GAAP.
- 4 -
"CLOSING" and "CLOSING DATE" have the meanings assigned to
them in Section 4.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute thereto.
"COLLATERAL DOCUMENTS" means all promissory notes, letters of credit,
agreements, assignments, guaranties, mortgages, financing statements,
certificates and other agreements, instruments and documents which are
required by or executed in connection with or contemplated by this Agreement
or any other Collateral Document to be executed or delivered by or on behalf
of the Borrower, any of its Subsidiaries or any other Person.
"COMMITMENTS" means Revolving Commitment and the Term Commitment, and
"COMMITMENT" means either of them.
"CONTROLLED GROUP" means a controlled group of entities which are
treated as a single employer under Sections 414(b), 414(c) or 414(m) of the
Code of which the Borrower or any of its Subsidiaries is a part.
"CONVERSION DATE" means December 31, 1998.
"DEFAULT INTEREST RATE" means a rate of interest equal to the sum of the
Base Rate plus 3.0% per annum.
"DISCOUNT RATE" means, with respect to a prepayment or conversion of a
LIBOR Loan on a date other than the last day of its Interest Period, a rate
equal to the interest rate (as of the date of prepayment or conversion) on
United States Treasury obligations in a like amount as such Loan and with a
maturity approximately equal to the period between the prepayment or
conversion date and the last day of the Interest Period of such Loan, as
determined by the Agent.
"ENVIRONMENTAL CLAIM" means, with respect to any Person, any written or
oral notice, claim, demand, request for information, citation, summons, order
or other communication (each, a "CLAIM") by any other Person alleging or
asserting the liability of the recipient of such claim for investigatory
costs, cleanup costs, governmental response costs, damages to natural
resources or other property or health, personal injuries, fines or penalties
arising out of, based on or resulting from (a) the presence, or Release, of
any Hazardous Material at or from any location, whether or not owned by such
Person, or (b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental Claim" shall
include, without limitation, any claim by any governmental authority for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any
- 5 -
applicable Environmental Law, and any claim by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence or Release of Hazardous
Materials or arising from alleged injury or threat of injury to health,
safety or the environment.
"ENVIRONMENTAL LAWS" means all provisions of law, statutes, ordinances,
rules, regulations, permits, licenses, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or by any state or municipality thereof or by any
court, agency, instrumentality, regulatory authority or commission of any of
the foregoing concerning health, safety and protection of, or regulation of
the emission, release or discharge of substances into, the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the regulations thereunder.
"EVENT OF DEFAULT" means any of the events specified in Section 9.
"EXCESS CASH FLOW" for any fiscal year of the Borrower means Operating
Cash Flow for such fiscal year, PLUS the decrease, if any, in Working Capital
as of the end of such fiscal year over Working Capital as of the end of the
prior fiscal year, minus the sum of the following without duplication: (a)
all principal payments required to be made on the Loans pursuant to Sections
2.1, 2.2 and 2.7(b)(i) during such fiscal year, PLUS (b) all principal
payments required to be made by the Borrower and its Subsidiaries on Total
Debt (other than the Loans) during such fiscal year, PLUS (c) all cash
Interest Expense of the Borrower and its Subsidiaries during such fiscal
year, PLUS (d) all Capital Distributions made during such fiscal year in
accordance with this Agreement (other than Capital Distributions made
pursuant to Section 8.9(a)(iii)), PLUS (e) all Capital Expenditures made by
the Borrower and its Subsidiaries during such fiscal year in accordance with
this Agreement, PLUS (f) federal, state and local income taxes paid or
accrued during such fiscal year, PLUS (g) the increase, if any, in Working
Capital as of the end of such fiscal year over Working Capital as of the end
of the prior fiscal year, PLUS (h) $1,000,000.
"FCC" means the Federal Communications Commission or any governmental
authority at any time substituted therefor.
"FEE LETTER" means the letter agreement dated as of the date hereof
between the Agent and the Borrower relating to certain fees payable by the
Borrower.
"FINAL ORDER" means an action or order issued by the FCC (a) which has
not been reversed, stayed, enjoined, set aside,
- 6 -
annulled or suspended, and (b) with respect to which (i) no requests or
petitions have been filed for administrative or judicial review,
reconsideration, rehearing, appeal or stay, and the time for filing any such
requests or petitions and for the FCC to set aside the action on its own
motion has expired, (ii) in the event of review, reconsideration or appeal,
the time for further review, reconsideration or appeal has expired, and (iii)
no appeal to a court or request for stay by a court of such action is pending
or in effect, and, if any deadline for filing any such appeal or request is
designated by statute or rule, it has passed.
"FIXED CHARGE COVERAGE RATIO" means, as of the end of any fiscal
quarter, the ratio of Operating Cash Flow for the four quarter period then
ended to the sum of (a) all Interest Expense for such four quarter period,
PLUS (b) all scheduled Revolving Commitment reductions pursuant to Section
2.1 during such four quarter period, PLUS (c) all required principal payments
due on the Term Loans during such four quarter period, PLUS (d) all principal
payments required to be made by the Borrower and its Subsidiaries on Total
Debt (other than the Loans) during such four quarter period, PLUS (e) Capital
Expenditures made by the Borrower and its Subsidiaries during such four
quarter period, PLUS (f) any federal, state or local income taxes accrued by
the Borrower or any of its Subsidiaries during such four quarter period, PLUS
(g) any Capital Distributions made by the Borrower in such four quarter
period.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States, consistently applied.
"GUARANTOR" means one who pledges its credit or property in any manner,
or otherwise becomes responsible for the payment or other performance of the
indebtedness, contract or other obligation of another Person and includes
(without limitation) any guarantor (whether of payment or of collection),
surety, co-maker, endorser or one who agrees conditionally or otherwise to
make any purchase, loan or investment in order thereby to enable another to
prevent or correct a default of any kind and one who has endorsed (otherwise
than for collection or deposit in the ordinary course of business), or has
discounted with recourse or agreed (contingently or otherwise) to purchase or
repurchase or otherwise acquire or become liable for, any Indebtedness.
"GUARANTY" shall have the meaning assigned to it in Section 6.6.
"HAZARDOUS MATERIAL" means, collectively, (a) any petroleum
or petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam
- 7 -
insulation, and transformers or other equipment that contain polychlorinated
biphenyls ("PCBS"), (b) any chemicals or other materials or substances that
are now or hereafter become defined as or included in the definition of
"hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants", "pollutants" or words of similar import under
any Environmental Law and (c) any other chemical or other material or
substance, exposure to which is now or hereafter prohibited, limited or
regulated under any Environmental Law.
"INDEBTEDNESS" of any Person means all liabilities, obligations and
reserves, contingent or otherwise, which, in accordance with GAAP, would be
reflected as a liability on a balance sheet (excluding trade accounts payable
and accrued expenses arising in the ordinary course of business), and
(without duplication) (a) all obligations of such Person for borrowed money
or with respect to deposits or advances of any kind, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person upon which interest charges are customarily
paid, (d) all obligations of such Person under conditional sale or other
title retention agreements relating to assets purchased by such Person, (e)
all obligations of such Person issued or assumed as the deferred purchase
price of property or services, (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed
by such Person, (g) all obligations or liabilities in respect of which such
Person is a Guarantor, (h) all Capitalized Lease Obligations of such Person,
(i) all Rate Hedging Obligations, and (j) all obligations of such Person as
an account party to reimburse any Person in respect of letters of credit
(including the Letters of Credit) or bankers' acceptances. The Indebtedness
of any Person shall include any recourse Indebtedness of any partnership in
which such Person is a general partner.
"INTEREST EXPENSE" shall mean, for any period, the gross interest
expense accrued by the Borrower and its Subsidiaries in respect of their
Indebtedness for such period, determined on a consolidated basis, all fees
payable under Section 2.6 or the Fee Letter and any other fees, charges,
commissions and discounts in respect of Indebtedness, including fees payable
in connection with the Letters of Credit. For purposes of the foregoing,
gross interest expense shall be determined after giving effect to any net
payments made or received by the Borrower with respect to Rate Hedging
Obligations.
- 8 -
"INTEREST PERIOD" means, with respect to any LIBOR Loan, the period
selected by the Borrower, commencing on the date such Loan is made, continued
or converted and ending on the last day of such period as selected by the
Borrower. The Interest Period for each LIBOR Loan shall be one, two, three
or six months or, if available from all of the Banks, twelve months;
PROVIDED, HOWEVER, that whenever the last day of such Interest Period would
otherwise occur on a day other than a Banking Day, the last day of such
Interest Period shall occur on the next succeeding Banking Day; PROVIDED,
FURTHER, that if such extension of time would cause the last day of such
Interest Period to occur in the next calendar month, the last day of such
Interest Period shall occur on the next preceding Banking Day; and PROVIDED,
FURTHER, that if the first day of an Interest Period is the last Banking Day
of a month or a day for which there is no numerically corresponding day in
the appropriate subsequent calendar month, then such Interest Period shall
end on the last Banking Day of the appropriate subsequent calendar month.
The Borrower shall not select any Interest Period which extends beyond any
date on which a scheduled payment is or may be required to be made pursuant
to Sections 2.1(b), 2.2 or 2.7(b)(i) unless the sum of the amount available
to be drawn under the Commitments plus the aggregate principal balance of all
Base Rate Loans and all LIBOR Loans with Interest Periods ending prior to
such date is at least equal to the maximum amount that is, or may be,
required to be paid on such date.
"ISSUING BANK" means KeyBank in its capacity as the issuer of the
Letters of Credit, or any successor issuer of the Letters of Credit.
"LETTERS OF CREDIT" has the meaning ascribed to it in Section 2.3(a).
"LEVERAGE RATIO", as of any date, means the ratio of Total Debt as of
such date to Operating Cash Flow for the four quarter period then ended or
most recently ended.
"KEYBANK" means KeyBank National Association.
"LIBOR" means the average (rounded upwards, if necessary, to the nearest
1/16th of 1%) of the per annum rates at which deposits in immediately
available funds in United States dollars for the relevant Interest Period and
in an amount approximately equal to the Loan to be disbursed or to remain
outstanding during such Interest Period, as the case may be, are offered to
the Agent by prime banks in the London Eurodollar market, determined as of
11:00 a.m. London time (or as soon thereafter as practicable), two Banking
Days prior to the beginning of the relevant Interest Period.
- 9 -
"LIBOR LOANS" means those Loans described in Sections 2.1 and 2.2 on
which the Borrower shall pay interest at a rate based on the applicable LIBOR
Rate.
"LIBOR RATE" means a rate per annum equal to the quotient obtained
(rounded upwards, if necessary, to the nearest 1/100th of 1%) by dividing (a)
the applicable LIBOR by (b) 1.00 minus the LIBOR Reserve Percentage.
"LIBOR RESERVE PERCENTAGE" means for any day that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, all basic,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
for a member bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (as that term is defined in Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to time).
The LIBOR Rate shall be adjusted automatically on and as of the effective
date of any change in the LIBOR Reserve Percentage.
"LICENSE" means any license, authorization, permit, consent, franchise,
ordinance, registration, certificate, agreement or other right filed with,
granted by, or entered into by a federal, state or local governmental
authority which permits or authorizes the acquisition, construction or
operation of a television broadcasting station, or any part of a television
broadcasting station or which is required for the acquisition, ownership or
operation of any Station, any Newspaper, the Porta Phone Business or the
Satellite Broadcasting Business.
"LICENSE SUBSIDIARY" means each Subsidiary which has no assets other
than Licenses issued by the FCC.
"LICENSING AUTHORITY" means a governmental authority which has granted
or issued a License.
"LIEN" as applied to the property of any Person means: (a) any mortgage,
lien, pledge, charge, lease constituting a Capitalized Lease Obligation,
conditional sale or other title retention agreement, or other security
interest or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement, express
or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same to
the payment of Indebtedness in priority to the payment of the general,
unsecured creditors of such Person; (c) the filing of, or any agreement to
give, any financing statement under the Uniform Commercial Code or its
equivalent of any jurisdiction in respect of Indebtedness; and (d) in the
case of
- 10 -
securities or other equity interests, any purchase option, call or similar
right of a third party with respect to such securities or other equity
interests.
"LOANS" means the Revolving Loans and the Term Loans.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon or change
in (a) the properties, assets, business, operations, financial condition or
prospects of the Borrower or any of its Subsidiaries or on the ability of the
Borrower or any such Subsidiary to conduct its business, (b) the ability of
the Borrower, any of its Subsidiaries or any other party to a Collateral
Document (other than the Agent or any Bank) to perform its obligations
hereunder or under any other Collateral Document to which it is a party, (c)
the validity or enforceability of this Agreement, the Notes or any other
Collateral Document, or (d) the rights or remedies of the Agent or the Banks
under this Agreement, the Notes or any other Collateral Document or at law or
in equity.
"MORTGAGES" has the meaning assigned to it in Section 6.4(a).
"NET EARNINGS" means, with respect to the Borrower, the consolidated net
income (or deficit) of the Borrower and its Subsidiaries for the period
involved, after taxes paid or accrued and after all proper charges and
reserves (excluding, however, non-recurring special charges and credits), all
as determined in accordance with GAAP.
"NEWSPAPERS" means, as of any date, the newspapers owned by
the Borrower or any of it Subsidiaries as of such date.
"NOTES" means the Revolving Notes and the Term Notes.
"OBLIGATIONS" means any obligation of the Borrower or any of its
Subsidiaries (a) to pay to the Banks the principal of and interest on the
Loans in accordance with the terms hereof and of the Notes and the contingent
liability of the Borrower under all outstanding Letters of Credit, including,
without limitation, any interest accruing after the date of any filing by the
Borrower or any Subsidiary of any petition in bankruptcy or the commencing of
bankruptcy, insolvency or similar proceedings with respect to the Borrower or
any of its Subsidiaries, regardless of whether such interest is allowable as
a claim in any such proceeding; (b) in respect of any Rate Hedging
Obligations owing to any Bank or any Affiliate of any Bank; (c) to pay,
satisfy or perform any other liability or obligation to the Agent or any
Bank, arising under this Agreement or any Collateral Document, whether now
existing or hereafter incurred by reason of future advances or otherwise,
matured or unmatured, direct or contingent, joint or several, including any
extensions,
- 11 -
modifications or renewals thereof and substitutions therefor, and including
without limitation all fees, indemnification amounts, costs and expenses,
including interest thereon and reasonable attorneys' fees, incurred by the
Agent or any Bank for the protection, preservation or enforcement of its
rights and remedies arising hereunder or under the Collateral Documents; (d)
to repay to the Agent or the Banks all amounts advanced at any time by the
Agent or the Banks hereunder or under any Collateral Document, including,
without limitation, advances for principal or interest payments to prior
secured parties, mortgagees, lienors or other Persons, or for taxes, levies,
insurance, rent or repairs to, or maintenance or storage of, any of the
property of the Borrower or any of its Subsidiaries; (e) to perform any
covenant or agreement made with the Banks pursuant to this Agreement or any
Collateral Document; or (f) to take any other action in respect of any other
liability of any nature of the Borrower or any of its Subsidiaries to the
Banks under this Agreement or any Collateral Document.
"OPERATING AGREEMENT" means any programming agreement, time brokerage,
local marketing or similar agreement, network affiliation agreement,
franchise agreement, lease or other agreement of the Borrower or any of its
Subsidiaries relating to the operation of a Station, a Newspaper, the Porta
Phone Business or the Satellite Broadcasting Business, the termination or
adverse modification of which could reasonably be expected to have a Material
Adverse Effect.
"OPERATING CASH FLOW" means, during any period, the consolidated Net
Earnings of the Borrower for such period (excluding, to the extent included
in Net Earnings, (i) the effect of any exchange of advertising time for
non-cash consideration, such as merchandise or services, (ii) any other
non-cash income or expense (including the cumulative effect of a change in
accounting principles and extraordinary items) and (iii) any gains or losses
from sales, exchanges and other dispositions of property not in the ordinary
course of business), MINUS any interest income, investment income and other
non-operating income, MINUS any cash payments made in respect of Programming
Obligations, PLUS the sum of (a) depreciation on or obsolescence of fixed or
capital assets and amortization of intangibles and leasehold improvements
(including, without limitation, amortization in respect of Programming
Obligations) for such period, PLUS (b) Interest Expense accrued in such
period, PLUS (c) federal, state and local income taxes accrued in such period
(other than any such taxes resulting from any gains from sales and exchanges
and other distributions not in the ordinary course of business), all to the
extent deducted in calculating Net Earnings in such period and on a
consolidated basis and computed on the accrual method. For purposes of
calculating Operating Cash Flow in any period (other than for purposes of
calculating Excess Cash Flow), any acquisition of any
- 12 -
Station or Newspaper, and any sale or other disposition of any Station, any
Newspaper, the Porta Phone Business or the Satellite Broadcasting Business,
which occurs during such period shall be deemed to have occurred on the first
day of such period.
"PBGC" means the Pension Benefit Guaranty Corporation or any
governmental authority at any time substituted therefor.
"PENSION PLAN" means an employee pension benefit plan as defined in
Section 3(2) of ERISA which is subject to the provisions of Section 302 or
Title IV of ERISA or Section 412 of the Code.
"PERMITTED ACQUISITION" has the meaning assigned to it in Section
8.10(b).
"PERMITTED LIEN" means any of the following Liens:
(a) Liens for taxes or assessments and similar charges, which are
either not delinquent or being contested diligently and in good faith by
appropriate proceedings, and (i) as to which the Borrower or its affected
Subsidiary has set aside adequate reserves in accordance with GAAP on its
books and (ii) which do not entail any significant risk of loss, forfeiture,
foreclosure or sale of the property subject thereto;
(b) statutory Liens, such as mechanic's, materialman's,
warehouseman's, landlord's, artisan's, workman's, contractor's, carrier's or
other like Liens, (i) incurred in good faith in the ordinary course of
business, (ii) which are either not delinquent or are being contested
diligently and in good faith by appropriate proceedings, (iii) as to which
the Borrower or its affected Subsidiary has set aside adequate reserves in
accordance with GAAP on its books or bonded satisfactorily to the Agent and
(iv) which do not entail any significant risk of loss, forfeiture,
foreclosure or sale of the property subject thereto;
(c) encumbrances consisting of zoning restrictions, easements,
licenses, reservations, provisions, covenants, conditions, waivers,
restrictions on the use of real property or minor irregularities of title,
PROVIDED that none of such encumbrances materially impairs the use or value
of any property in the operation of the Borrower's or any of its
Subsidiaries' business;
(d) Liens securing conditional sale, rental or purchase money
obligations permitted under Section 8.4 and Capitalized Lease Obligations
permitted under Section 8.6 (and protective UCC-1 financing statements filed
by lessors in connection therewith under leases not intended as security),
but only in the property which is the subject of such obligations;
- 13 -
(e) Liens arising under or pursuant to this Agreement or any
Collateral Document or otherwise securing any Obligation;
(f) Liens in respect of judgments or awards with respect to which
the Borrower or any of its Subsidiaries is, in good faith, prosecuting an
appeal or proceeding for review and with respect to which a stay of execution
upon such appeal or proceeding for review has been secured, and as to which
judgments or awards the Borrower or such Subsidiary has established adequate
reserves in accordance with GAAP on its books or has bonded in a manner
satisfactory to the Agent;
(g) pledges or deposits made in the ordinary course of business to
secure payment of worker's compensation, or to participate in any fund in
connection with worker's compensation, unemployment insurance, old-age
pensions or other social security programs;
(h) Liens granted to secure the performance of bids, tenders,
contracts, leases, public or statutory obligations, surety, customs, appeal
and performance bonds and other similar obligations and not incurred in
connection with the borrowing of money, the obtaining of advances or the
payment of the deferred purchase price of any property; and
(i) any other Liens listed on EXHIBIT G hereto or to which the
Required Banks have consented in writing.
"PERSON" shall include natural persons, corporations, business trusts,
associations, companies, limited liability companies, joint ventures and
partnerships.
"PHIPPS BUSINESS" means substantially all the assets relating to
television stations WCTV-TV, Tallahassee, Florida-Thomasville, Georgia,
WKXT-TV, Knoxville, Tennessee, the Satellite Broadcasting Business and the
Porta Phone Business, currently owned by John H. Phipps, Inc. and its
subsidiaries and to be acquired by the Borrower pursuant to the Phipps
Purchase Agreement.
"PHIPPS PURCHASE AGREEMENT" means the Asset Purchase Agreement dated as
of March 15, 1996, between the Phipps Seller and the Borrower, as amended on
July 5, 1996, pursuant to which the Borrower will purchase the Phipps
Business.
"PHIPPS SELLER" means Media Acquisition Partners, L.P., a Delaware
limited partnership and its successors or assigns.
"PLAN" means any employee benefit plan, as defined under Section 3(3) of
ERISA, established or maintained by the Borrower or any member of the
Controlled Group or any such Plan
- 14 -
to which the Borrower or any member of the Controlled Group is, or in the
last six years was, required to contribute on behalf of its employees.
"PLEDGE AGREEMENTS" means the Borrower Pledge Agreement and the
Subsidiary Pledge Agreement.
"PORTA PHONE BUSINESS" means the Porta Phone paging business currently
owned and operated by John H. Phipps, Inc. and to be acquired by the Borrower
pursuant to the Phipps Purchase Agreement.
"POSSIBLE DEFAULT" means an event, condition, situation or thing which
constitutes, or which with the lapse of any applicable grace period or the
giving of notice or both would constitute, an Event of Default.
"PREPAYMENT PREMIUM" means, with respect to the prepayment or conversion
of any LIBOR Loan or any other receipt or recovery of any LIBOR Loan prior to
the end of the applicable Interest Period, whether by voluntary prepayment,
acceleration, conversion to a Base Rate Loan or otherwise, an amount equal to
the sum of (a) the present value (discounted at the Discount Rate) of the
product of (i) the excess, if any, of the rate of interest applicable to such
Loan pursuant to Section 3.1 at the time of such prepayment or conversion on
the principal amount so prepaid, converted or accelerated, as the case may
be, over the Discount Rate, as determined by the Agent, multiplied by (ii)
the principal amount so prepaid, converted or accelerated, as the case may
be, multiplied by (iii) a fraction, the numerator of which is the number of
days remaining in the related Interest Period and the denominator of which is
360 (taking into consideration the applicable compounding for the frequency
of installment payments of the Loans being prepaid), plus (b) reasonable
out-of-pocket costs and expenses incurred by the Banks and the Agent with
respect to such prepayment.
"PRO FORMA DEBT SERVICE" means, as of the end of any fiscal quarter, the
sum of (a) all scheduled Revolving Commitment reductions pursuant to Section
2.1 during the four quarter period following such date, (b) all principal
payments required to be made on the Term Loans pursuant to Section 2.2 during
such subsequent four quarter period, (c) all principal payments required to
be made by the Borrower and its Subsidiaries on Total Debt, other than the
Loans, during such subsequent four quarter period, and (d) all Interest
Expense during such subsequent four quarter period. In calculating Pro Forma
Debt Service, (i) the interest rate in effect in such subsequent period on
any Indebtedness which does not bear interest at a rate which is fixed for
the entire subsequent period shall be deemed to be the interest rate in
effect on such Indebtedness as of the date of determination, and (ii) for the
purpose of determining the amount
- 15 -
of principal payments required on the Term Loans pursuant to Section 2.2 in
future periods, it shall be assumed that the principal amount of Term Loans
outstanding as of the date of determination will be outstanding for the
subsequent four quarter period, subject to any required principal payments.
"PROGRAMMING OBLIGATIONS" means all direct or indirect monetary
liabilities, contingent or otherwise, with respect to contracts for
television broadcast rights relating to television series or other programs
produced or distributed for television release.
"QUARTERLY DATE" means the last day of each of the Borrower's fiscal
quarters.
"RATABLE SHARE" means, with respect to any Bank, its pro rata share of
the Revolving Commitment, the Term Commitment, the Letters of Credit and the
Loans. The Ratable Share of each Bank as of the date of this Agreement is as
set forth on Schedule 1.1 attached hereto.
"RATE HEDGING OBLIGATIONS" means any and all obligations of the
Borrower, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions
and modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect the Borrower from the
fluctuations of interest rates, including interest rate exchange or swap
agreements, reverse swap agreements, interest rate cap or collar protection
agreements, and interest rate options, puts and warrants, and (b) any and all
cancellations, buy backs, reversals, terminations or assignments of any of
the foregoing.
"REGULATORY CHANGE" means the adoption of or any change in federal,
state or local treaties, laws, rules or regulations or the adoption of or
change in any interpretations, guidelines, directives or requests of or under
any federal, state or local treaties, laws, rules or regulations (whether or
not having the force of law) by any court, governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof.
"RELEASE" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration
into the indoor or outdoor environment, including, without limitation, the
movement of Hazardous Materials through ambient air, soil, surface water,
ground water, wetlands, land or subsurface strata.
"REPORTABLE EVENT" means a reportable event as that term is defined in
Title IV of ERISA, excluding, however, such
- 16 -
events as to which the PBGC by regulation has waived the requirement of
Section 4043(a) of ERISA that it be notified within thirty days of the
occurrence of such event (PROVIDED that a failure to meet the minimum funding
standard of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waivers in accordance
with Section 412(d) of the Code).
"REQUIRED BANKS" means, at any time, the Banks holding at least 66 2/3%
of the then aggregate unpaid principal amount of the Notes, or, if no
principal amount of the Notes is then outstanding, the Banks having at least
66 2/3% of the Commitments.
"REVOLVING COMMITMENT" has the meaning assigned to it in Section 2.1(a).
"REVOLVING LOAN LETTERS OF CREDIT" has the meaning assigned to it in
Section 2.3(a).
"REVOLVING LOANS" has the meaning assigned to it in Section 2.1(a).
"REVOLVING NOTES" has the meaning assigned to it in Section 2.5.
"SATELLITE BROADCASTING BUSINESS" means the satellite broadcasting
business currently owned and operated by John H. Phipps, Inc. and to be
acquired by the Borrower pursuant to the Phipps Purchase Agreement.
"SECURITY AGREEMENTS" means the Borrower Security Agreement and the
Subsidiary Security Agreement.
"STATIONS" means, as of any date, the television broadcasting stations
owned by the Borrower or any of its Subsidiaries as of such date; all
television translators, all auxiliary stations and all low power television
stations owned or operated in connection with the foregoing or any other
communications station owned or operated at such time by the Borrower or any
of its Subsidiaries.
"SUBORDINATED DEBT" means all Indebtedness of the Borrower and its
Subsidiaries under the Subordinated Note Indenture or any agreements, notes,
instruments or documents executed or delivered in connection therewith and
all other Indebtedness of the Borrower the repayment of which is subordinated
in right of payment to the Obligations pursuant to a subordination agreement
in form and substance satisfactory to all of the Banks.
- 17 -
"SUBORDINATED NOTE INDENTURE" means the Indenture to be dated as of
September 25, 1996, among the Borrower, all of its Subsidiaries and Bankers
Trust Company in respect of the Borrower's 10-5/8% Senior Subordinated Notes
due 2006, as the same may be amended to the extent permitted in Section 8.19.
"SUBSIDIARY" means each partnership or corporation, the majority of the
outstanding partnership interests, capital stock or voting power of which is
(or upon the exercise of all outstanding warrants, options and other rights
would be) owned, directly or indirectly, at the time in question by the
Borrower.
"SUBSIDIARY PLEDGE AGREEMENT" has the meaning assigned to it in Section
6.3(b).
"SUBSIDIARY SECURITY AGREEMENT" has the meaning assigned to it in
Section 6.2(b).
"TERM COMMITMENT" has the meaning assigned to it in Section 2.2(a).
"TERM LOAN LETTERS OF CREDIT" has the meaning assigned to it in Section
2.3(a).
"TERM LOANS" has the meaning assigned to it in Section 2.2(a).
"TERM NOTES" has the meaning assigned to it in Section 2.5.
"TERMINATION DATE" means June 30, 2003.
"TOTAL DEBT" means (a) all Indebtedness of the Borrower and its
Subsidiaries for borrowed money, including, without limitation, the Loans,
(b) all Capitalized Lease Obligations of the Borrower and its Subsidiaries,
(c) all other Indebtedness of the Borrower or any of its Subsidiaries
represented by notes or drafts representing extensions of credit or on which
interest is typically charged, (d) all obligations of the Borrower or any of
its Subsidiaries evidenced by bonds, debentures, notes or other similar
instruments (including all such obligations to which any property or asset
owned by the Borrower or any of its Subsidiaries is subject, whether or not
the obligation secured thereby shall have been assumed), (e) all obligations
of the Borrower or any of its Subsidiaries under conditional sale or other
title retention agreements relating to purchased assets, (f) all obligations
of the Borrower or any of its Subsidiaries which are incurred, issued or
assumed as the deferred purchase price of property or services and which are
payable over a period in excess of one year, (g) all obligations or
liabilities in respect of which the Borrower or any of its Subsidiaries is a
- 18 -
Guarantor, (h) at any time after the occurrence and during the continuance of
an event of default under any agreement of the Borrower or any of its
Subsidiaries governing Rate Hedging Obligations, the aggregate amount payable
by the Borrower or such Subsidiary under such agreement, and (i) all
obligations of the Borrower or any of its Subsidiaries as an account party to
reimburse any Person in respect of letters of credit (including the stated
amount of all Letters of Credit) or bankers' acceptances.
"WORKING CAPITAL" means, as of any date, the excess of the consolidated
current assets, other than cash, of the Borrower and its Subsidiaries over
their consolidated current liabilities, other than the current portion of
long term debt, as of such date.
1.2 OTHER TERMS. Except as otherwise specifically provided in this
Agreement, each term not otherwise expressly defined herein which is defined
in the Uniform Commercial Code, as amended (the "UCC") as adopted in any
applicable jurisdiction shall have the meaning assigned to it in the UCC in
effect in such jurisdiction. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. All
references herein to Sections, Schedules or Exhibits shall be deemed to be
references to Sections of, and Schedules and Exhibits to, this Agreement
unless the context shall otherwise require. Whenever any agreement,
promissory note or other instrument or document is defined in this Agreement,
such definition shall be deemed to mean and include, from and after the date
of any amendment, restatement or modification thereof, such agreement,
promissory note or other instrument or document as so amended, restated or
modified. All terms defined in this Agreement in the singular shall have
comparable meanings when used in the plural and vice versa. The words
"hereof," "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
1.3 ACCOUNTING PROVISIONS. All accounting terms used in this Agreement
which are not expressly defined herein shall have the respective meanings
given to them in accordance with GAAP, all computations shall be made in
accordance with GAAP, and all balance sheets and other financial statements
shall be prepared in accordance with GAAP. All financial or accounting
calculations or determinations required pursuant to this Agreement unless
otherwise expressly provided shall be made on a consolidated basis for the
Borrower and its Subsidiaries.
SECTION 2. THE LOANS AND THE LETTERS OF CREDIT.
2.1 THE REVOLVING COMMITMENT AND THE REVOLVING LOANS.
- 19 -
(a) Subject to the terms and conditions hereof, during the period
from the Closing Date up to but not including the Termination Date, the Banks
severally, but not jointly, shall make loans to the Borrower in such amounts
as the Borrower may from time to time request but not exceeding in aggregate
principal amount at any one time outstanding $53,500,000 (as such amount may
be reduced from time to time, the "Revolving Commitment"); PROVIDED, HOWEVER,
that in no event shall the aggregate principal amount of such loans plus the
aggregate stated amount of the Revolving Loan Letters of Credit exceed the
Revolving Commitment. All amounts borrowed by the Borrower pursuant to this
Section 2.1(a) and all amounts drawn under any Revolving Loan Letter of
Credit and not repaid may be referred to hereinafter collectively as the
"Revolving Loans." Each Revolving Loan requested by the Borrower shall be
funded by the Banks in accordance with their Ratable Shares of the requested
Revolving Loan. A Bank shall not be obligated hereunder to make any
additional Revolving Loan if immediately after making such Revolving Loan,
the aggregate principal balance of all Revolving Loans made by such Bank plus
such Bank's Ratable Share of any outstanding Revolving Loan Letters of Credit
would exceed such Bank's Ratable Share of the Revolving Commitment. The
Revolving Loans may be comprised of Base Rate Loans or LIBOR Loans, as
provided in Section 2.4.
(b) On each date set forth in the table below, the Revolving
Commitment shall automatically reduce by the amount set forth for such date
in such table:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Calendar March 31 June 30 September 30 December 31
Year
- --------------------------------------------------------------------------------
1997 $1,839,062 $1,839,062 $1,839,063 $1,839,063
- --------------------------------------------------------------------------------
1998 $2,006,250 $2,006,250 $2,006,250 $2,006,250
- --------------------------------------------------------------------------------
1999 $2,006,250 $2,006,250 $2,006,250 $2,006,250
- --------------------------------------------------------------------------------
2000 $2,006,250 $2,006,250 $2,006,250 $2,006,250
- --------------------------------------------------------------------------------
2001 $2,006,250 $2,006,250 $2,006,250 $2,006,250
- --------------------------------------------------------------------------------
2002 $2,340,625 $2,340,625 $2,340,625 $2,340,625
- --------------------------------------------------------------------------------
2003 $2,340,625 $2,340,625
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(c) Prior to the Termination Date, the Borrower may, at its
option, from time to time prepay all or any portion of the Revolving Loans,
subject to the provisions of Section 2.7, and the Borrower may reborrow from
time to time hereunder amounts so paid up to the amount of the Revolving
Commitment in effect at the time of reborrowing.
- 20 -
(d) At any time prior to the Termination Date, by written notice
to the Agent no later than 11:00 A.M. Cleveland, Ohio time five Banking Days
prior to such termination or reduction, the Borrower may permanently
terminate, or from time to time permanently reduce, the Revolving Commitment.
Such notice shall be in writing or by telephonic communication confirmed by
telecopy or other facsimile transmission on the same day as such telephone
notice. Any such partial reduction hereunder shall be in an amount which is
not less than $250,000 or an integral multiple of $100,000 in excess thereof.
The Agent shall notify the Banks of any such reduction or termination of the
Revolving Commitment.
(e) All Revolving Loans, together with all interest accrued
thereon, shall be paid in full no later than the Termination Date.
2.2 THE TERM COMMITMENT AND THE TERM LOANS.
(a) Subject to the terms and conditions hereof, during the period
from the Closing Date up to but not including the Conversion Date, the Banks
severally, but not jointly, shall make loans to the Borrower in such amounts
as the Borrower may from time to time request but not exceeding in aggregate
principal amount at any one time outstanding $71,500,000 (as such amount may
be reduced from time to time, the "Term Commitment"); PROVIDED, HOWEVER that
in no event shall the aggregate principal amount of such loans plus the
aggregate face value of the Term Loan Letters of Credit exceed the Term
Commitment. All amounts borrowed by the Borrower pursuant to this Section
2.2(a) and all amounts drawn under any Term Loan Letter of Credit and not
repaid may be referred to hereinafter collectively as the "Term Loans". Each
Term Loan requested by the Borrower shall be funded by the Banks in
accordance with their Ratable Shares of the requested Term Loan. A Bank
shall not be obligated hereunder to make any additional Term Loan if
immediately after making such Loan, the aggregate principal balance of all
Term Loans made by such Bank plus such Bank's Ratable Share of any
outstanding Term Loan Letters of Credit would exceed such Bank's Ratable
Share of the Term Commitment. The Term Loans may be comprised of Base Rate
Loans or LIBOR Loans, as provided in Section 2.4.
(b) Prior to the Conversion Date, the Borrower may, at its option,
from time to time prepay all or any portion of the Term Loans, subject to the
provisions of Section 2.7, and the Borrower may reborrow from time to time
hereunder amounts so paid up to the amount of the Term Commitment in effect
at the time of reborrowing. On the Conversion Date, the Term Commitment
shall terminate, and no new Term Loans shall be made.
(c) At any time prior to the Conversion Date, by written notice to
the Agent no later than 11:00 A.M. Cleveland,
- 21 -
Ohio time five Banking Days prior to such termination or reduction, the
Borrower may permanently terminate, or from time to time permanently reduce,
the Term Commitment. Such notice shall be in writing or by telephonic
communication confirmed by telecopy or other facsimile transmission on the
same day as such telephone notice. Any such partial reduction hereunder
shall be in an amount which is not less than $250,000 or an integral multiple
of $100,000 in excess thereof. The Agent shall notify the Banks of any such
reduction or termination of the Term Commitment.
(d) On the Conversion Date each then outstanding Term Loan shall
automatically be converted into, and continued and extended as, a four and
one-half year term loan. The aggregate principal of the Term Loans shall be
repaid in nineteen consecutive quarterly installments commencing on the
Conversion Date. The installments shall be due on each date set forth in the
following table, with each installment being in an amount equal to that
percentage set forth in such table for such date of the principal amount of
the Term Loans outstanding on the Conversion Date (before giving effect to
the payment due on the Conversion Date), with the final installment of all
then outstanding principal, together with all accrued interest, due no later
than the Termination Date:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Calendar March 31 June 30 September 30 December 31
Year
- --------------------------------------------------------------------------------
1998 0.0% 0.0% 0.0% 2.5%
- --------------------------------------------------------------------------------
1999 2.5% 2.5% 2.5% 2.5%
- --------------------------------------------------------------------------------
2000 3.75% 3.75% 3.75% 3.75%
- --------------------------------------------------------------------------------
2001 3.75% 3.75% 3.75% 3.75%
- --------------------------------------------------------------------------------
2002 3.75% 3.75% 3.75% 3.75%
- --------------------------------------------------------------------------------
2003 3.75% all
remaining
principal
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
No amount so paid may be reborrowed.
2.3 LETTERS OF CREDIT.
(a) ISSUANCE. Subject to the terms and conditions hereof,
including the provisions of Section 6, the Borrower may request that the
Issuing Bank issue, from time to time on and after the Closing Date, and the
Issuing Bank agrees to issue, from time to time on and after the Closing
Date, letters of credit in an aggregate stated amount not exceeding
- 22 -
$15,000,000 (the "Letters of Credit"). At the time of requesting any Letter
of Credit, the Borrower shall notify the Issuing Bank as to whether the
requested Letter of Credit is to be issued under the Revolving Commitment or
the Term Commitment. Letters of Credit issued under the Revolving Commitment
may be referred to herein as "Revolving Loan Letters of Credit," and Letters
of Credit issued under the Term Commitment may be referred to herein as "Term
Loan Letters of Credit." No Letter of Credit shall be issued for a term of
more than three hundred sixty-four days, no Revolving Loan Letter of Credit
shall have an expiration date which is later than the Termination Date, and
no Term Loan Letter of Credit shall have an expiration date which is later
than the Conversion Date. No Revolving Loan Letter of Credit shall be issued
if after giving effect to such issuance, the sum of the outstanding principal
balance of the Revolving Loans (including amounts drawn on Revolving Loan
Letters of Credit and not repaid), plus the aggregate stated amount of
outstanding Revolving Loan Letters of Credit, would exceed the Revolving
Commitment, and no Term Loan Letter of Credit shall be issued if after giving
effect to such issuance the sum of the outstanding principal balance of the
Term Loans (including amounts drawn on Term Loan Letters of Credit and not
repaid) plus the aggregate stated amount of the outstanding Term Letters of
Credit would exceed the Term Commitment. Each Letter of Credit shall be
issued in the manner and on the conditions set forth in this Section 2.3 and
Section 6. Each Letter of Credit shall be in the Issuing Bank's standard
form for letters of credit or in such other form as is acceptable to the
Issuing Bank in form and substance.
(b) APPLICATION. Each request for a Letter of Credit shall be made to
the Issuing Bank by an application on the Issuing Bank's standard form or in
such other manner as the Issuing Bank may approve. Promptly following the
issuance of any Letter of Credit, the Issuing Bank shall notify the Agent and
the Banks of such issuance.
(c) PARTICIPATION BY THE BANKS.
(i) By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Bank or the other Banks in respect thereof,
the Issuing Bank hereby grants to each other Bank, and each other Bank hereby
agrees to acquire from the Issuing Bank, a participation in such Letter of
Credit equal to such Bank's Ratable Share of the stated amount of such Letter
of Credit, effective upon the issuance of such Letter of Credit; PROVIDED,
HOWEVER, that no Bank shall be required to acquire participations in
any Revolving Loan Letter of Credit that would result in its Ratable Share of
the sum of outstanding Revolving Loans plus the stated amount of all
outstanding Revolving Loan Letters of Credit to be greater than its Ratable
Share of the Revolving Commitment or to acquire participations in
- 23 -
any Term Loan Letters of Credit that would result in its Ratable Share of the
sum of the outstanding Term Loans plus the stated amount of all outstanding
Term Loan Letters of Credit to be greater than its Ratable Share of the Term
Commitment. In consideration and in furtherance of the foregoing, each Bank
hereby absolutely and unconditionally agrees to pay to the Agent, for the
account of the Issuing Bank, in accordance with Section 2.3(d), such Bank's
Ratable Share of each amount disbursed pursuant to a Letter of Credit;
PROVIDED, that payment by the Issuing Bank under such Letter of Credit
against presentation of such draft or document shall not have constituted
gross negligence or willful misconduct of the Issuing Bank.
(ii) Each Bank acknowledges and agrees that its obligation to
acquire participations pursuant to paragraph (i) above in respect of Letters
of Credit is absolute and unconditional and shall not be affected by any
circumstances whatsoever, including the occurrence and continuance of an
Event of Default or Possible Default, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(d) LETTER OF CREDIT DISBURSEMENTS.
(i) If the Agent has not received from the Borrower the payment
permitted pursuant to paragraph (ii) of this Section 2.3(d) by 11:00 a.m.,
Cleveland time, on the date on which the Issuing Bank has notified the
Borrower that payment of a draft presented under any Letter of Credit will be
made, as provided in such paragraph (ii), the Agent shall promptly notify the
Issuing Bank and each other Bank of the disbursement to be made under such
Letter of Credit and, in the case of each Bank, its Ratable Share of such
disbursement. Each Bank shall pay to the Agent, not later than 1:00 P.M.,
Cleveland time, on such date (or, if the Issuing Bank shall elect to defer
reimbursement from the Banks hereunder, such later date as the Issuing Bank
shall specify by notice to the Agent and the Banks), such Bank's Ratable
Share of such disbursement, which the Agent shall promptly pay to the Issuing
Bank. The Agent will promptly remit to each Bank its share of any amount
subsequently received by the Agent from the Borrower in respect of such
disbursement; PROVIDED that amounts so received for the account of any Bank
prior to payment by such Bank of amounts required to be paid by it hereunder
in respect of any disbursement shall be remitted to the Issuing Bank.
(ii) If the Issuing Bank shall receive any draft presented under
any Letter of Credit, the Issuing Bank shall give notice thereof as provided
in paragraph (iii) below. If the Issuing Bank shall pay any draft presented
under a Letter of Credit, the Borrower may (but shall not be required to) pay
to the Agent, for the account of the Issuing Bank, an amount equal
- 24 -
to the amount of such draft before 11:00 A.M., Cleveland time, on the Banking
Day on which the Issuing Bank shall have notified the Borrower that payment
of such draft will be made. The Agent will promptly pay any such amounts
received by it to the Issuing Bank.
(iii) The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment
under a Letter of Credit to ascertain that the same appear on their face to
be in substantial conformity with the terms and conditions of such Letter of
Credit. The Issuing Bank shall as promptly as reasonably practicable give
oral notification, confirmed in writing, to the Agent and the Borrower of
such demand for payment and the determination by the Issuing Bank as to
whether such demand for payment was in accordance with the terms and
conditions of such Letter of Credit and whether the Issuing Bank has made or
will make a disbursement thereunder, provided that the failure to give such
notice shall not relieve the Borrower of its obligation to reimburse such
disbursement, and the Agent shall promptly give each Bank notice thereof.
(e) OBLIGATION TO REPAY LETTER OF CREDIT DISBURSEMENTS, ETC. The
Borrower assumes all risks in connection with the Letters of Credit and the
Borrower's obligation to repay each disbursement under a Letter of Credit
shall be absolute, unconditional and irrevocable under any and all
circumstances and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any other person may at any time have against the
beneficiary under any Letter of Credit, the Agent, the Issuing Bank or any
other Bank (other than the defense of payment in accordance with the terms of
this Agreement or a defense based on the gross negligence or willful
misconduct of the Issuing Bank) or any other Person in connection with this
Agreement or any other agreement or transaction;
(iii) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
PROVIDED that payment by the Issuing Bank under such Letter of Credit against
presentation of such draft or document shall not have constituted gross
negligence or willful misconduct of the Issuing Bank; and
(iv) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing; PROVIDED that such other circumstance or
event shall not have
- 25 -
been the result of gross negligence or willful misconduct of the Issuing Bank.
It is understood that in making any payment under a Letter of Credit (A)
the Issuing Bank's exclusive reliance as to any and all matters set forth
therein, including reliance on the amount of any draft presented under such
Letter of Credit, whether or not the amount due to the beneficiary equals the
amount of such draft and whether or not any documents presented pursuant to
such Letter of Credit prove to be insufficient in any respect, if such
document on its face appears to be in order, and whether or not any such
Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever and (B) any
noncompliance in any immaterial respect of the documents presented under a
Letter of Credit with the terms thereof, shall, in each case, not be deemed
willful misconduct or gross negligence of the Issuing Bank.
(f) INDEMNIFICATION. The Borrower shall: (i) indemnify and hold
each Bank (including the Issuing Bank) harmless from any loss resulting from
any claim, demand or liability which may be asserted against such Bank in
connection with actions taken under any Letter of Credit, and (ii) reimburse
such Bank for any fees or other reasonable expenses paid or incurred by such
Bank in connection with any Letter of Credit, other than any loss or expense
resulting from such Bank's willful misconduct or gross negligence. Any
amounts paid by the Issuing Bank on any Letter of Credit shall be deemed to
be a Revolving Loan (in the case of a Revolving Loan Letter of Credit) or a
Term Loan (in the case of a Term Loan Letter of Credit) for all purposes of
this Agreement and shall bear interest from the date of payment by the
Issuing Bank at the rates provided in Section 3.1 until paid in full.
(g) SECURITY. Upon the occurrence of any Event of Default, the
Borrower shall, upon demand, pay to the Issuing Bank the stated amount of all
outstanding Letters of Credit, which amount the Issuing Bank shall hold as
security for the obligations incurred under such Letter of Credit, this
Agreement or the Notes. The payment by the Borrower of such security shall
not terminate the obligations of the Borrower under this Section 2.3.
(h) ADDITIONAL COSTS. If any Regulatory Change shall either (i)
impose upon, modify, require, make or deem applicable to any Bank (or its
holding company) any reserve requirement, special deposit requirement,
insurance assessment or similar requirement against or affecting any Letter
of Credit issued or to be issued hereunder, or (ii) subject any Bank to any
tax, charge, fee, deduction or withholding of any kind whatsoever, or (iii)
impose any condition upon or cause in any manner the addition of any
supplement to or increase of any kind
- 26 -
to any Bank's (or its holding company's) capital or cost base for issuing
such Letter of Credit which results in an increase in the capital requirement
supporting such Letter of Credit, or (iv) impose upon, modify, require, make
or deem applicable to any Bank (or its holding company) any capital
requirement, increased capital requirement or similar requirement such as the
deeming of such Letters of Credit to be assets held by such Bank (or its
holding company) for capital calculation or other purposes and the result of
any events referred to in (i), (ii), (iii) or (iv) above shall be to increase
the costs or decrease the benefit in any way to a Bank (or its holding
company) of issuing, maintaining or participating in such Letters of Credit,
then and in such event the Borrower shall, within ten days after the mailing
of written notice of such increased costs and/or decreased benefits to the
Agent and the Borrower by any Bank, pay to such Bank all such additional
amounts which in such Bank's sole good faith calculation as allocated to such
Letters of Credit, shall be sufficient to compensate it (or its holding
company) for all such increased costs and/or decreased benefits. Such Bank's
calculation shall be conclusive absent manifest error.
(i) FEES. The Letters of Credit shall be issued for a
fee of 1.125% per annum of the stated amount thereof, payable upon issuance.
The fee shall be payable to the Agent for the benefit of the Banks in accordance
with their Ratable Shares. If any Letter of Credit is drawn upon prior to its
expiration date, the Banks shall reimburse to the Borrower that portion of the
fee allocable to the period from the date of the draw to the expiration date,
calculated in accordance with the Issuing Bank's standard letter of credit
procedures. In addition, the Borrower shall pay to the Issuing Bank for its own
account its standard charges for the issuance of letters of credit and for draws
upon letters of credit, which charges, as of the date hereof, are as follows:
(i) $200 per Letter of Credit, payable upon issuance and (ii) $100 per Letter of
Credit, payable upon a draw under such Letter of Credit.
2.4 MAKING AND CONTINUATION/CONVERSION OF THE LOANS.
(a) MAKING OF THE LOANS.
(i) Each Revolving Loan or Term Loan, as the case may be,
shall be made by the Banks in such amount as the Borrower shall request,
PROVIDED that each borrowing shall be in an amount which is a minimum of (A),
with respect to any LIBOR Loan, $1,000,000, and integral multiples of
$200,000 in excess thereof, and (B) with respect to any Base Rate Loan,
$500,000 and integral multiples of $200,000 in excess thereof or such lesser
amount as may be equal to the then unused portion of the Revolving Commitment
or Term Commitment, as the case may be. The obligation of the Banks to make
any Loan is conditioned upon the
- 27 -
fact that (x) no Possible Default or Event of Default shall then exist or
immediately after the Loan would exist; (y) all of the Collateral Documents
shall still be in full force and effect; and (z) the representations and
warranties contained herein and in the Collateral Documents shall be true and
correct in all material respects as if made on and as of the date of such
borrowing, except to the extent that any thereof expressly relate to an
earlier date.
(ii) Loans shall be effected at the principal banking office
of the Agent in Cleveland, Ohio, and shall be made at such times as the
Borrower may request by notice to the Agent no later than 11:00 A.M.
Cleveland, Ohio time (A) three Banking Days prior to the date of a requested
LIBOR Loan and (B) one Banking Day prior to the date of a requested Base Rate
Loan. Such notices shall be in writing, or by telephonic communication
confirmed by telecopy or other facsimile transmission on the same day as the
telephone request, and shall specify the proposed date and the amount of the
requested Loan, whether it is to bear interest initially based upon the Base
Rate or the LIBOR Rate, and the Interest Period thereof, if applicable.
(iii) Upon receipt of each borrowing notice for a Loan, the
Agent shall promptly notify each Bank of the type, Interest Period, if
applicable, amount and date of the proposed borrowing. Not later than 11:00
A.M. Cleveland time, on the date of a proposed borrowing, each Bank shall
provide the Agent at its address specified in Section 12.4 with immediately
available funds covering such Bank's Ratable Share of the borrowing, and the
Agent shall pay over such immediately available funds to the Borrower.
(b) CONVERSION/CONTINUATION OF THE LOANS. At the Borrower's
election pursuant to notice given to the Agent not later than 11:00 A.M.
Cleveland, Ohio time three Banking Days prior to such conversion or
continuation, any Base Rate Loan may be converted to, or any LIBOR Loan may
be continued as, a LIBOR Loan as requested by the Borrower; PROVIDED,
HOWEVER, that each conversion shall be in an amount which is a minimum of
$1,000,000, and integral multiples of $200,000 in excess thereof; and
PROVIDED, FURTHER, that no Loan may be continued as or converted to a LIBOR
Loan at any time that an Event of Default or Possible Default exists. If the
Borrower has not delivered to the Agent such notice with respect to any
terminating Interest Period at least three Banking Days prior to the end of
such Interest Period, the affected LIBOR Loan shall convert to a Base Rate
Loan at the end of such Interest Period.
(c) NUMBER OF INTEREST RATE OPTIONS. In no event shall the
Borrower have more than five LIBOR Loans outstanding at any time.
- 28 -
2.5 THE NOTES. All Revolving Loans shall be evidenced by separate
promissory notes payable to the Banks substantially in the form attached
hereto as EXHIBIT A to be duly executed and delivered by the Borrower at or
prior to the Closing in the aggregate principal amount of the Revolving
Commitment (the "Revolving Notes"). All Term Loans shall be evidenced by
separate promissory notes payable to the Banks substantially in the form
attached hereto as EXHIBIT B to be duly executed and delivered by the
Borrower at or prior to the Closing in the aggregate principal amount of the
Term Commitment (the "Term Notes"). The Banks may, and are hereby authorized
by the Borrower to, set forth on the grids attached to the Notes, or in other
comparable records maintained by them, the amount of each Loan, all payments
and prepayments of principal and interest received, the current outstanding
principal balance, and other appropriate information. The aggregate unpaid
amount of any Loan set forth in any records maintained by a Bank with respect
to a Note shall be presumptive evidence of the principal amount owing and
unpaid on such Note. Failure of a Bank to record the principal amount of any
Loan on the grid(s) attached to a Note shall not limit or otherwise affect
the obligation of the Borrower hereunder or under such Note to repay the
principal amount of such Loan and all interest accruing thereon.
2.6 FEES.
(a) COMMITMENT FEES. The Borrower shall pay to the Agent for the
benefit of the Banks a non-refundable commitment fee of 1/2% per annum (based
on a year having 360 days and actual days elapsed) on the excess of the
aggregate average daily undisbursed amount of each Commitment over the
aggregate stated amount of the Letters of Credit then outstanding issued
under such Commitment; PROVIDED, HOWEVER, that the commitment fee shall be
1/4% per annum for any day on which the Leverage Ratio is less than or equal
to 4.5 to 1.0. Such commitment fee shall (i) commence to accrue as of the
date hereof and continue for each day to and including the Termination Date,
with respect to the Revolving Commitment, and to and including the Conversion
Date, with respect to the Term Commitment, (ii) be in addition to any other
fee required by the terms and conditions of this Agreement, (iii) be payable
quarterly in arrears on each Quarterly Date and, with respect to the
Revolving Commitment, on the date the Revolving Commitment is terminated,
and, with respect to the Term Commitment, on the date the Term Commitment is
terminated, and (iv) be shared by the Banks in accordance with their Ratable
Shares.
(b) OTHER FEES. The Borrower shall pay to the Agent such other
fees as are set forth in the Fee Letter.
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2.7 PREPAYMENT.
(a) VOLUNTARY PREPAYMENTS. By notice to the Agent (which shall be
in writing or by telephonic communication confirmed by telecopy or other
facsimile transmission on the same day as such telephone notice) no later
than 11:00 A.M. Cleveland, Ohio time on the Banking Day prior to such
prepayment (with respect to any Base Rate Loan) or on the third Banking Day
prior to such prepayment (with respect to any LIBOR Loan), the Borrower may,
at its option, prepay the Loans in whole at any time or in part from time to
time without penalty or premium (except that any such prepayment of any LIBOR
Loan shall be made together with the applicable Prepayment Premium);
PROVIDED, HOWEVER, that each partial prepayment shall be in the aggregate
principal amount of not less than $1,000,000 or an integral multiple of
$500,000 in excess thereof. Each voluntary prepayment of the Term Loans made
after the Conversion Date shall be applied to the principal installments due
pursuant to Section 2.2 in the inverse order of maturity, and no amount so
prepaid may be reborrowed.
(b) MANDATORY PREPAYMENTS.
(i) REDUCTION OF COMMITMENTS. If at any time the outstanding
principal amount of the Revolving Loans plus the aggregate stated amount of
all Revolving Loan Letters of Credit exceeds the Revolving Commitment, as the
Revolving Commitment may be reduced pursuant to the terms hereof, or if at
any time prior to the Conversion Date the outstanding principal amount of the
Term Loans plus the aggregate stated amount of all Term Loan Letters of
Credit exceeds the Term Commitment, the Borrower shall immediately prepay the
Revolving Notes or the Term Notes, as the case may be, without penalty or
premium (except that any such prepayment of any LIBOR Loan shall be made
together with the applicable Prepayment Premium), in an amount necessary to
cause the outstanding principal amount of the Revolving Loans plus the
aggregated stated amount of all Revolving Loan Letters of Credit not to
exceed the Revolving Commitment, as so reduced, or to cause the outstanding
principal amount of the Term Loans plus the aggregate stated amount of all
Term Loan Letters of Credit not to exceed the Term Commitment, as the case
may be.
(ii) EXCESS CASH FLOW. Within one hundred twenty days after
the end of each fiscal year of the Borrower, commencing with the fiscal year
ending on December 31, 1997, the Borrower shall make a mandatory prepayment
of the Loans in an amount equal to the Applicable Percentage of Excess Cash
Flow, if any, for such fiscal year. Mandatory prepayments made pursuant to
this Section 2.7(b)(ii) shall be determined from the annual financial
statements for such fiscal year delivered by the Borrower pursuant to Section
7.5(a) and shall be accompanied by a certificate signed by the Borrower's
chief financial officer
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setting forth the calculations from which the amount of such prepayment was
determined.
(iii) PROCEEDS OF ASSET SALES. The Borrower shall make a
mandatory prepayment of the Loans in an amount equal to the cash proceeds of
any Asset Sale (including any sale permitted pursuant to Section 8.10(c)),
net of any reasonable costs directly incurred in connection with such Asset
Sale and any taxes payable by the Borrower or the selling Subsidiary in
connection with such Asset Sale; PROVIDED that the Borrower shall not be
required to make such a mandatory prepayment of the Loans in respect of any
sale of substantially all the assets of the Porta Phone Business, so long as
(A) no Event of Default or Possible Default exists as of the date of such
Asset Sale or at the date of the reinvestment of such proceeds and (B) the
Borrower reinvests such proceeds by making a Permitted Acquisition within
nine months of the date of consummation of such Asset Sale. If any such
Event of Default or Possible Default exists or if such proceeds are not so
reinvested within such nine month period, or used to pay such purchase price,
then the Borrower shall make a mandatory prepayment of the Loans in an amount
equal to the cash proceeds of such Asset Sale, net of any reasonable costs
directly incurred in connection with such Asset Sale and any taxes payable by
the Borrower or the selling Subsidiary in connection with such Asset Sale.
Together with any prepayment required by this Section 2.7(b)(iii), the
Borrower shall deliver to the Agent a certificate executed by the Borrower's
chief financial officer setting forth the calculation of the net cash
proceeds of such Asset Sale, including a calculation of the taxes payable by
the Borrower or the selling Subsidiary in respect of such sale. Such
prepayment shall be made simultaneously with the consummation of such Asset
Sale.
(iv) INSURANCE PROCEEDS. Within 90 days after the date of
receipt of any cash payments under any insurance policy maintained by the
Borrower or any of its Subsidiaries which have not been reinvested in assets
of a kind then used or usable in the business of the Borrower or such
Subsidiary or used to maintain the business of the Borrower and its
Subsidiaries as going concerns as a consequence of any business interruption,
the Borrower shall make a mandatory prepayment of the Loans in the amount of
such unreinvested or unused proceeds; PROVIDED, HOWEVER, that notwithstanding
any of the foregoing to the contrary, upon and during the continuance of any
Event of Default or Possible Default, all such insurance proceeds, regardless
of reinvestment or other use, received by the Borrower or any Subsidiary
shall be applied as a prepayment of the Loans.
(v) NET EQUITY PROCEEDS. If the Borrower issues or sells any
shares of its capital stock or other equity interests or securities
convertible into or exercisable for any
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shares of its capital stock or other equity interests, it shall, within five
days of such sale or issuance, make a mandatory prepayment of the Loans in an
amount (not to exceed 100% of the net cash proceeds of such issuance or sale)
equal to that amount which, had it been paid on the last day of the most
recently ended quarter, would have caused the Leverage Ratio to equal 4.5 to
1.0; PROVIDED, HOWEVER, that if, as of the date of such equity issuance, the
Borrower is a party to a legally binding acquisition agreement for a
Permitted Acquisition permitted pursuant to Section 8.10(b), the Borrower may
use the proceeds of such issuance or sale to pay the purchase price of such
Permitted Acquisition; PROVIDED, FURTHER, that no such mandatory prepayment
shall be required in respect of (A) the first $1,000,000 in proceeds in each
fiscal year arising from the issuance of shares or other equity interests to
employees of the Borrower or its Subsidiaries pursuant to any employee stock
option plan or (B) the proceeds of shares of capital stock issued in order to
satisfy an overallotment of shares issued pursuant to the Registration
Statement for the issuance of Class B Common Stock referred to in Section
5.27.
(c) APPLICATION OF PREPAYMENTS; REDUCTION OF COMMITMENTS.
(i) APPLICATION TO PREPAYMENT PREMIUM, ACCRUED INTEREST AND
PRINCIPAL. All prepayments made pursuant to this Section 2.7 shall be
applied first to any Prepayment Premium then due, then to accrued interest in
accordance with the Agent's standard operating procedures and then to the
principal outstanding under the Loans. For purposes of the calculation of
interest and the determination of whether any Prepayment Premium is due in
connection with any such prepayment, such principal prepayments shall be
applied first to the Base Rate Loans and then to the LIBOR Loans with the
shortest remaining Interest Periods.
(ii) APPLICATION TO LOANS. All mandatory prepayments of
principal required to be made pursuant to Section 2.7(b)(ii), (iii), (iv) or
(v) prior to the Conversion Date shall be applied first to the Revolving
Loans and then, after the Revolving Loans and the Revolving Commitment have
been reduced to zero, to the Term Loans. All mandatory prepayments of
principal required to be made pursuant to Section 2.7(b)(ii), (iii), (iv) or
(v) on or after the Conversion Date shall be applied first to the Term Loans
and then, after the Term Loans have been paid in full, to the Revolving Loans.
(iii) APPLICATION TO REVOLVING LOANS AND
REVOLVING COMMITMENT. Any mandatory prepayment which, pursuant to Section
2.7(c)(ii), is to be applied to the Revolving Loans shall cause the Revolving
Commitment to be immediately, automatically and permanently reduced by the
amount of such
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prepayment. No amount so prepaid may be reborrowed. Each such mandatory
prepayment of the Revolving Loans shall be applied to the subsequent
Revolving Commitment reductions set forth in Section 2.1(b) pro rata.
(iv) APPLICATION TO TERM LOANS AND TERM COMMITMENT. Any
mandatory prepayment prior to the Conversion Date which, pursuant to Section
2.7(c)(ii), is to be applied to the Term Loans shall cause the Term
Commitment to be immediately, automatically and permanently reduced by the
amount of such prepayment. Any mandatory prepayment on or after the
Conversion Date which, pursuant to Section 2.7(c)(ii), is to be applied to
the Term Loans shall be applied to the principal installments due pursuant to
Section 2.2 in the inverse order of maturity. No amount so prepaid may be
reborrowed.
(d) PREPAYMENT PREMIUM. The Borrower shall pay to the Agent, for
the benefit of the Banks, the applicable Prepayment Premium upon any
prepayment or conversion (whether voluntary or involuntary) of any LIBOR Loan
not made on the last day of the applicable Interest Period.
2.8 RESERVES OR DEPOSIT REQUIREMENTS, ETC. If at any time any
Regulatory Change (including without limitation, Regulation D of the Board of
Governors of the Federal Reserve System) shall impose any reserve and/or
special deposit requirement (other than reserves included in the LIBOR
Reserve Percentage, the effect of which is reflected in the interest rate of
any LIBOR Loan) against assets held by, or deposits in or for the amount of
any loans by, any Bank, and the result of the foregoing is to increase the
cost (whether by incurring a cost or adding to a cost) to such Bank of taking
or maintaining hereunder any LIBOR Loan or to reduce the amount of principal,
interest or fees received by such Bank with respect to any such Loan, then
such Bank shall notify the Agent and the Borrower of such occurrence.
Thereafter, upon demand by such Bank the Borrower shall pay to such Bank
additional amounts sufficient to compensate and indemnify such Bank for such
increased cost or reduced amount. A statement as to the increased cost or
reduced amount as a result of any event mentioned in this Section shall be
submitted by such Bank to the Agent and the Borrower and shall, in the
absence of manifest error, be conclusive and binding as to the amount thereof.
2.9 TAX LAW, INCREASED COSTS, ETC. In the event that by reason of any
Regulatory Change, any Bank shall, with respect to this Agreement or any
transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other
than any tax imposed upon the net income of such Bank and other than changes
in franchise taxes), and if any such measure or any other similar measure
shall result in an increase in the costs to such Bank of
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making or maintaining any LIBOR Loan or in a reduction in the amount of
principal or interest ultimately receivable by such Bank in respect of such
Loan, then such Bank shall notify the Agent and the Borrower stating the
reasons therefor. The Borrower shall thereafter pay to such Bank within ten
days after written demand such additional amounts as will compensate such
Bank for such increased cost or reduced amount. A statement as to any such
increased cost or reduced amount shall be submitted by such Bank to the Agent
and the Borrower and shall, in the absence of manifest error, be conclusive
and binding as to the amount thereof.
2.10 EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE.
If any Bank determines that dollar deposits of the relevant amount for the
relevant Interest Period are not available to it in the applicable Eurodollar
market or that, by reason of circumstances affecting such market, adequate
and reasonable means do not exist for ascertaining the LIBOR Rate applicable
to such Interest Period, or that the LIBOR Rate does not adequately reflect
the cost to such Bank of making such Loan, as the case may be, such Bank
shall promptly give notice of such determination to the Agent and the
Borrower, and any request for a new LIBOR Loan or notice of conversion of an
existing Loan to a LIBOR Loan given thereafter or previously given by the
Borrower and not yet made or converted shall be deemed a notice to make a
Base Rate Loan.
2.11 CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any time any
Regulatory Change shall make it unlawful for any Bank to fund any LIBOR Loan
which it has committed to make hereunder with moneys obtained in the
applicable Eurodollar market, such Bank shall notify the Agent and the
Borrower, and the obligation of the Banks to fund such Loan shall, upon the
happening of such event, forthwith be suspended for the duration of such
illegality. If any such change makes it unlawful for any Bank to continue in
effect the funding in the applicable Eurodollar market of any LIBOR Loan
previously made by it hereunder, such Bank shall, upon the happening of such
event, notify the Agent and the Borrower thereof in writing stating the
reasons therefor, and the Borrower shall, on the earlier of (a) the last day
of the then current Interest Period or (b) if required by such Regulatory
Change on such date as shall be specified in such notice, either convert all
such Loans to Base Rate Loans or prepay all such Loans in full.
2.12 FUNDING. Any Bank may, but shall not be required to, make LIBOR
Loans hereunder with funds obtained outside the United States.
2.13 INDEMNITY. Without prejudice to any other provisions of Sections
2.8 through Section 2.12 or to the obligation of the Borrower to pay the
Prepayment Premium pursuant
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to Section 2.7(d), but without duplication, the Borrower hereby agrees to
indemnify each Bank against any loss or expense which it may sustain or incur
as a consequence of the Borrower's failure to borrow any LIBOR Loan requested
pursuant to this Agreement, or the Borrower's failure to continue any LIBOR
Loan or convert any Base Rate Loan to a LIBOR Loan, in either case after
notice of such continuation or conversion shall have been given to the Agent
pursuant to Section 2.4(b), or any default by the Borrower in payment when
due of any amount due hereunder in respect of any LIBOR Loan, including, but
not limited to, any premium or penalty actually incurred by such Bank in
respect of funds borrowed by it for the purpose of making or maintaining such
Loan, as determined by such Bank. A statement as to any such loss or expense
shall be submitted by such Bank to the Borrower for payment under the
aforesaid indemnification, with a copy to the Agent, which statement shall,
in the absence of manifest error, be conclusive and binding as to the amount
thereof.
2.14 CAPITAL ADEQUACY. If any Bank shall determine that any Regulatory
Change regarding capital adequacy or compliance by such Bank (or its lending
office) with any request or directive regarding capital adequacy (whether or
not having the force of law) of any governmental authority, central bank or
comparable agency has the effect of reducing the rate of return on such
Bank's capital (or on the capital of such Bank's holding company) as a
consequence of its obligations hereunder to a level below that which such
Bank (or its holding company) could have achieved but for such Regulatory
Change or compliance (taking into consideration such Bank's policies or the
policies of its holding company with respect to capital adequacy) by an
amount which such Bank deems to be material, then from time to time, within
ten days after demand by such Bank, the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank (or its holding
company) for such reduction. Such Bank will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the sole judgment of such Bank, be
otherwise disadvantageous to such Bank. A certificate of such Bank claiming
compensation under this Section and setting forth the additional amount to be
paid to it hereunder shall be conclusive in the absence of manifest error.
In determining such amount, such Bank may use any reasonable averaging and
attribution methods. Failure on the part of any Bank to demand compensation
for any reduction in return on capital with respect to any period shall not
constitute a waiver of such Bank's rights to demand compensation for any
reduction in return on capital in such period or in any other period. The
protection of this Section shall be available to each Bank regardless of any
possible contention of the invalidity or inapplicability of the law,
regulation or other condition which shall have been imposed.
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2.15 TAXES. Without duplication of any other Section of this
Agreement, including, without limitation Section 2.9, all sums payable by the
Borrower hereunder or under the Notes or in respect of the Letters of Credit,
whether of principal, interest, fees, expenses or otherwise, shall be paid in
full, free of any deductions or withholdings for any and all present and
future taxes, levies, imposts, stamps, duties, fees, assessments, deductions,
withholdings, and other governmental charges and all liabilities with respect
thereto (collectively referred to as "TAXES"). If the Borrower is prohibited
by law from making payments hereunder or under the Notes or in respect of the
Letters of Credit free of such deductions or withholdings, then the Borrower
shall pay such additional amount as may be necessary in order that the actual
amount received by the Banks after such deduction or withholding shall equal
the full amount stated to be payable hereunder or under the Notes or in
respect of the Letters of Credit. The Borrower shall pay directly to all
appropriate taxing authorities any and all present and future Taxes, and all
liabilities with respect thereto imposed by law or by any taxing authority on
or with regard to any aspect of the transactions contemplated by this
Agreement or the execution and delivery of this Agreement or the Notes or the
issuance of the Letters of Credit, except for any Taxes or other liabilities
that the Borrower is contesting in good faith by appropriate proceedings,
PROVIDED that the Borrower hereby indemnifies the Agent and the Banks and
holds them harmless from and against any and all liabilities, fees or
additional expense with respect to or resulting from any delay in paying, or
omission to pay, Taxes. Within thirty days after the payment by the Borrower
of any Taxes, upon request of the Agent, the Borrower shall furnish the Agent
with the original or a certified copy of the receipt evidencing payment
thereof, together with any other information the Agent may require to
establish to its satisfaction that full and timely payment of such Taxes has
been made. Each Bank shall notify the Borrower and the Agent of any payment
of Taxes required or requested of it and shall give due consideration to any
advice or recommendation given in response thereto by the Borrower, and upon
notice from such Bank that Taxes or any liability relating thereto (including
penalties and interest) have been paid, the Borrower shall pay or reimburse
such Bank therefor within ten days of such notice. The foregoing to the
contrary notwithstanding, in no event shall any Bank receive any amount
pursuant to this Section in excess of the amount required to be paid by it in
respect of any Taxes. Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section shall survive the payment in full of
principal and interest hereunder and under the Notes.
2.16 INCREMENTAL COMMITMENT. At any time prior to December 31, 1997,
the Borrower may, with the consent of the Required Banks, solicit from the
Banks an incremental commitment
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of up to $50,000,000 in the form of a senior secured reducing revolving
credit in form and substance similar to the existing credit facilities
hereunder; PROVIDED, HOWEVER, that any such incremental commitment shall be
discretionary on the part of the Banks, and no Bank shall be obligated to
increase its Commitments beyond the amount it has agreed to as of the Closing
Date. Any such increase shall be on terms and conditions, such as the
applicable interest rate and amortization, as may be negotiated between the
Borrower and the consenting Banks. If any such increase is approved by the
Required Banks, then the Borrower shall enter into any amendments and
modifications to this Agreement and the Collateral Documents as the Agent may
request to reflect such increase and such additional terms and conditions.
SECTION 3. INTEREST; PAYMENTS.
3.1 INTEREST.
(a) Subject to Section 3.1(c), prior to maturity, LIBOR Loans
shall bear interest at the LIBOR Rate plus the Applicable Margin and Base
Rate Loans shall bear interest at the Base Rate plus the Applicable Margin.
(b) The Applicable Margin shall be determined by the Agent
quarterly, and upon the making of each Loan in an amount in excess of
$5,000,000 and the issuance of each Letter of Credit with a stated amount in
excess of $5,000,000, based on the financial statements and the Compliance
Certificate delivered to the Banks pursuant to Sections 7.5(b) and (d) (in
the case of a quarterly determination) and the compliance certificate
delivered pursuant to Section 6.13(c) (in the case of the determination of
the Applicable Margin upon the making of a Loan or the issuance of a Letter
of Credit). Any change in the interest rate on the Loans due to a change in
the Applicable Margin shall be effective on the fifth Banking Day after
delivery of such financial statements or compliance certificate; PROVIDED,
HOWEVER, that if any such quarterly financial statements and Compliance
Certificate indicate an increase in the Applicable Margin and such financial
statements and certificate are not provided within the time period required
in Section 7.5(b), the increase in the interest rate due to such increase in
the Applicable Margin shall be effective retroactively as of the fifth
Banking Day after the date on which such financial statements and certificate
were due. Until delivery of financial statements for the first fiscal
quarter of the Borrower ending after the Closing, for purposes of calculating
the Applicable Margin, the Leverage Ratio shall be determined, after giving
effect to the Loans made on and after the Closing Date, from the certificate
delivered to the Agent pursuant to Section 6.13(b). The Borrower shall
deliver to the Banks with each set of quarterly financial statements which
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indicate a change in the Applicable Margin a notice with respect to such
change, which notice shall set forth the calculation of, and the supporting
evidence for, such change.
(c) Upon the occurrence of any Event of Default, the entire
outstanding principal amount of each Loan and (to the extent permitted by
law) unpaid interest thereon and all other amounts due hereunder shall bear
interest, from the date of occurrence of such Event of Default until the
earlier of the date such Loan is paid in full and the date on which such
Event of Default is cured or waived in writing, at the Default Interest Rate
which shall be payable upon demand.
(d) Interest shall be computed on a Three Hundred Sixty day year
basis calculated for the actual number of days elapsed. Interest accrued on
each Base Rate Loan shall be paid quarterly in arrears on each Quarterly Date
after the date hereof until such Loan is paid in full and on the date such
Loan is paid in full, and interest accrued on each LIBOR Loan shall be paid
on the last day of the Interest Period thereof and on the date such Loan is
paid in full and, in addition, if such Interest Period has a duration of more
than three months, on each day that occurs during such Interest Period that
is three, six or nine months from the first day of such Interest Period.
(e) The rate of interest payable on any Note from time to time
shall in no event exceed the maximum rate, if any, permissible under
applicable law. If the rate of interest payable on any Note is ever reduced
as a result of the preceding sentence and any time thereafter the maximum
rate permitted by applicable law shall exceed the rate of interest provided
for on such Note, then the rate provided for on such Note shall be increased
to the maximum rate permitted by applicable law for such period as is
required so that the total amount of interest received by the holder of such
Note is that which would have been received by such holder but for the
operation of the preceding sentence.
3.2 MANNER OF PAYMENTS.
(a) Prior to each Quarterly Date and the end of each Interest
Period, the Agent shall render a statement to the Borrower of all amounts due
to the Banks for principal, interest and fees hereunder. All amounts listed
on each such statement shall be due and payable on the Quarterly Date or, for
LIBOR Loans, the last day of such Interest Period, in respect of which such
statement was sent. As to all other Obligations which become due and payable
other than on a fixed date by their terms, the Agent shall advise the
Borrower by a written statement that they are due and payable, and the
Borrower shall pay the same within five days of receipt of such statement.
Any failure by the Agent to render any such statement or give any such advice
- 38 -
shall in no way relieve the Borrower of any liability for or obligation to
pay any amount due and payable hereunder.
(b) Whenever any payment to be made hereunder, including without
limitation any payment to be made on a Note, shall be stated to be due on a
day which is not a Banking Day, such payment may be made on the next
succeeding Banking Day, and such extension of time shall in each case be
included in the computation of the interest payable on such Note; PROVIDED,
HOWEVER, that if such extension of time would cause payment of interest on or
principal of a LIBOR Loan to be made in the next calendar month, such payment
shall be made on the next preceding Banking Day.
(c) Unless otherwise provided in this Agreement, all payments or
prepayments made or due hereunder or under the Notes shall be made in
immediately available funds by federal funds wire transfer, and without
setoff, deduction or counterclaim, to the Agent prior to 11:00 A.M.,
Cleveland time, on the date when due, at its offices at 127 Public Square,
Cleveland, Ohio 44114, or at such other place as may be designated by the
Agent. Funds received after 1:00 P.M., Cleveland time, shall be deemed to
have been received on the next Banking Day. To the extent any such payment
is made for the ratable benefit of the Banks, the Agent shall promptly
distribute such payment to the Banks in accordance with their respective
Ratable Shares.
SECTION 4. CLOSING.
The closing of the first Loan to be made hereunder and the other
transactions contemplated hereby shall take place at the offices of Dow,
Lohnes & Albertson at 1200 New Hampshire Avenue, N.W., Washington, D.C. on a
date set forth in a notice delivered by the Borrower to the Agent at least
ten days before such date or at such other date and place as to which the
parties may agree (the "Closing" and the "Closing Date"). Subject to the
terms and conditions hereof, upon the fulfillment or waiver in writing of all
the conditions precedent set out in Section 6 below, and the delivery to the
Agent of the Notes, the Banks shall make such Revolving Loans and Term Loans
and issue such Letters of Credit as the Borrower may request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
To induce the Banks to enter into this Agreement and to make the Loans
and issue the Letters of Credit, the Borrower represents and warrants as
follows:
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5.1 ORGANIZATION AND POWERS.
(a) The Borrower is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Georgia. The
Borrower is duly qualified or registered to conduct business and in good
standing under the laws of each other jurisdiction in which the character of
its business or the ownership of its assets makes such qualification or
registration necessary, except where failure to so qualify or register could
not reasonably be expected to have a Material Adverse Effect. The Borrower
has all requisite power and authority to own and operate its properties, to
carry on its business as now conducted and proposed to be conducted, to enter
into and perform the Phipps Purchase Agreement, this Agreement, the
Collateral Documents to which it is a party and all other documents to be
executed by it in connection with the transactions contemplated hereby and
thereby, to acquire the additional Stations and Newspapers and the Porta
Phone Business and the Satellite Broadcasting Business pursuant to the Phipps
Purchase Agreement and to carry out the terms hereof and thereof.
(b) As of the date hereof, the Borrower has no Subsidiaries other
than the Subsidiaries listed on EXHIBIT E attached hereto. Each Subsidiary is
a corporation, duly organized, validly existing and in good standing under
the laws of its State of incorporation and is duly qualified and in good
standing under the laws of each other jurisdiction in which the character of
its business or the ownership of its assets makes such qualification or
registration necessary, except where failure to so qualify or register could
not reasonably be expected to have a Material Adverse Effect. Each Subsidiary
is a direct or indirect, wholly owned Subsidiary of the Borrower. Each
Subsidiary has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and proposed to be
conducted, to enter into and perform the Collateral Documents to which it is
a party and all other documents to be executed by it in connection with the
transactions contemplated hereby and thereby and to carry out the terms
hereof and thereof.
5.2 AUTHORIZATION. All necessary corporate, shareholder or other
actions on the part of the Borrower and its Subsidiaries to authorize the
execution and delivery of the Phipps Purchase Agreement, this Agreement and
the Collateral Documents and the performance of the respective obligations of
the Borrower and its Subsidiaries herein and therein have been taken. The
Phipps Purchase Agreement, this Agreement and each Collateral Document have
been duly authorized, executed and delivered by each of the Borrower and its
Subsidiaries and are valid and legally binding upon each of the Borrower and
its Subsidiaries, to the extent it is a party thereto, and enforceable in
accordance with their respective terms, except to
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the extent that the enforceability hereof and thereof may be limited by
bankruptcy, insolvency or like laws affecting creditors rights generally and
by the application of general equitable principles.
5.3 FINANCIAL STATEMENTS. EXHIBIT C attached hereto contains (a) the
audited consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal years ended December 31, 1995, and December 31,
1994, (b) the audited financial statements of WRDW-TV, for the fiscal years
ended December 31, 1995, and December 31, 1994, (c) the audited financial
statements of the broadcasting and paging operations of John H. Phipps, Inc.
for the fiscal years ended December 31, 1995 and December 31, 1994, (d) the
unaudited consolidated financial statements of the Borrower and its
Subsidiaries as of June 30, 1996, and for the six month period then ended,
and (e) the unaudited financial statements of the broadcasting and paging
operations of John H. Phipps, Inc. as of June 30, 1996, and for the six month
period then ended (the "Financial Statements"). The Financial Statements are
true and complete in all material respects (including, without limitation, a
disclosure of all material contingent liabilities) and present fairly the
financial condition and results of operations of the Borrower and its
Subsidiaries, WRDW-TV or John H. Phipps, Inc., as the case may be, as of the
dates and for the periods indicated and have been prepared in accordance with
GAAP, subject in the case of statements for interim periods to normal
year-end adjustments and the absence of footnotes.
5.4 PROJECTIONS. EXHIBIT D attached hereto contains the Borrower's
projections for the fiscal years 1996 through 2003. Such projections assume
the consummation of the transactions contemplated in the Registration
Statements referenced in Section 5.27(c) and the Phipps Purchase Agreement
and the sale of KTVE-TV, were prepared by the Borrower in good faith on the
basis of assumptions the Borrower believes were reasonable in light of the
conditions existing at the time of preparation thereof and remain reasonable
as of the date hereof, and as of the date hereof there are no facts which are
known to the Borrower which the Borrower believes would cause a material
adverse change in such projections.
5.5 CAPITALIZATION OF THE BORROWER AND ITS SUBSIDIARIES.
The capitalization of the Borrower and the Subsidiaries as of the Closing Date
is as set forth on EXHIBIT E attached hereto and all of the issued and
outstanding shares of capital stock of the Subsidiaries are owned as set forth
on EXHIBIT E. EXHIBIT E identifies each License Subsidiary and, with respect to
each other Subsidiary, the Stations, Newspapers or other business owned and
operated by such Subsidiary. All of the issued and outstanding capital stock of
the Borrower and of each Subsidiary has been duly and validly issued and is
fully
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paid and nonassessable. All of the issued and outstanding capital stock of
each Subsidiary is free and clear of any Lien, charge, encumbrance or right
or option to purchase except for the Liens granted pursuant to the Subsidiary
Pledge Agreement and except for Liens that will be released on the Closing
Date. None of the capital stock of the Borrower or of any Subsidiary has been
issued in violation of the Securities Act of 1933, as amended, or the
securities or "Blue Sky" or any other applicable laws, rules or regulations
of any applicable jurisdiction. Except as set forth on EXHIBIT E, as of the
Closing Date, neither the Borrower nor any of its Subsidiaries has any
commitment or obligation, either firm or conditional, to issue, deliver,
purchase or sell, under any offer, option agreement, bonus agreement,
purchase plan, incentive plan, compensation plan, warrant, conversion rights,
contingent share agreement, shareholders agreement, partnership agreement or
otherwise, any shares of its capital stock, partnership interests or other
equity securities or securities convertible into shares of capital stock,
partnership interests or other equity securities.
5.6 TITLE TO PROPERTIES; PATENTS, TRADEMARKS, ETC. The Borrower and
each of its Subsidiaries have, and will have after giving effect to the
closings under the Phipps Purchase Agreement, good and marketable title to
all of their assets, whether real or personal, tangible or intangible, free
and clear of any Liens or adverse claims, except Permitted Liens. The
Borrower and each of its Subsidiaries own or possess, and will own or possess
after giving effect to the closing under the Phipps Purchase Agreement, the
valid right to use all the patents, patent applications, patent and know-how
licenses, inventions, technology, permits, trademark registrations and
applications, trademarks, service marks, trade names, copyrights, product
designs, applications, formulae, processes, circulation, and other subscriber
lists, industrial property rights and licenses and rights in respect of the
foregoing used or necessary for the conduct of its business (collectively,
"proprietary rights"). The Borrower is not aware of any existing or
threatened infringement or misappropriation of (a) any such proprietary
rights of others by the Borrower or any of its Subsidiaries or (b) any
proprietary rights of the Borrower or any of its Subsidiaries by others.
5.7 LITIGATION; PROCEEDINGS. Except as disclosed on EXHIBIT F attached
hereto, there is no action, suit, complaint, proceeding, inquiry or
investigation at law or in equity, or by or before any court or governmental
instrumentality or agency, nor any order (including, without limitation, any
order to show cause or order of forfeiture), decree or judgment in effect,
pending or, to the best of the Borrower's knowledge, threatened against or
affecting the Borrower, any of its Subsidiaries, any Station, any Newspaper,
the Porta Phone Business or the Satellite Broadcasting Business or any of the
properties or rights relating
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to any Station, any Newspaper, the Porta Phone Business or the Satellite
Broadcasting Business. None of such actions, suits, complaints, proceedings,
inquiries or investigations, orders, decrees or judgments could reasonably be
expected to have a Material Adverse Effect. No Person has filed or, to the
best of the Borrower's knowledge, threatened to file, any material competing
application, petition to deny or other opposition against any application,
including any renewal application, filed or to be filed by the Borrower or
any of its Subsidiaries.
5.8 TAXES. All Federal, state and local tax returns, reports and
statements (including, without limitation, those relating to income taxes,
withholding, social security and unemployment taxes, sales and use taxes, and
franchise taxes) required to be filed by the Borrower or any of its
Subsidiaries have been properly filed with the appropriate governmental
agencies in all jurisdictions in which such returns, reports and statements
are required to be filed, which returns, reports and statements are complete
and accurate, and all taxes and other impositions due and payable have been
timely paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except where
contested in good faith and by appropriate proceedings. As of the Closing
Date, neither the Borrower nor any of its Subsidiaries has filed with the
Internal Revenue Service or any other governmental authority any agreement or
other document extending or having the effect of extending the period for
assessment or collection of any Federal, state, local or foreign taxes or
other impositions. All tax deficiencies asserted or assessments made as a
result of any examinations conducted by the Internal Revenue Service or any
other governmental authority relating to the Borrower or any of its
Subsidiaries have been fully paid or are being contested in accordance with
the provisions of Section 7.4. Proper and accurate amounts have been
withheld by the Borrower and its Subsidiaries from its employees for all
periods to fully comply with the tax, social security and unemployment
withholding provisions of applicable Federal, state, local and foreign law.
The charges, accruals and reserves on the books of the Borrower and its
Subsidiaries in respect of any taxes or other governmental charges are
adequate.
5.9 ABSENCE OF CONFLICTS. The execution, delivery and performance of
the Phipps Purchase Agreement, this Agreement and the Collateral Documents
and all actions and transactions contemplated hereby and thereby will not (a)
violate, be in conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under (i) any provision of the
Articles or Certificate of Incorporation or By-Laws or any shareholders
agreement or other organizational document of the Borrower or any of its
Subsidiaries, (ii) any arbitration award or any order of any court or of any
other governmental agency or authority binding on the Borrower or any
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of its Subsidiaries, (iii) any License of the Borrower or of any of its
Subsidiaries or under which the Borrower or any of its Subsidiaries operates
or will operate after giving effect to the closing under the Phipps Purchase
Agreement, (iv) any applicable law, rule, order or regulation (including
without limitation, (A) the Communications Act of 1934, as amended, (B) any
law, rule, regulation or policy of the FCC or any other Licensing Authority
or (C) regulations G, T, U or X of the Board of Governors of the Federal
Reserve System) or (v) any Operating Agreement, the Subordinated Note
Indenture or other material agreement, instrument or document relating to a
Station, a Newspaper, the Porta Phone Business or the Satellite Broadcasting
Business or to which the Borrower or any of its Subsidiaries is a party, or
by which the Borrower or any of its Subsidiaries or any of their properties
is bound, or (b) result in the creation or imposition of any Lien of any
nature whatsoever, other than those Liens arising hereunder or under the
Collateral Documents, upon any of the properties of the Borrower or any of
its Subsidiaries.
5.10 INDEBTEDNESS. As of the Closing Date, the Borrower has no
Indebtedness of any nature, whether due or to become due, absolute,
contingent or otherwise, including Indebtedness for taxes and any interest or
penalties relating thereto, which exceeds in the aggregate, $150,000, except
(a) the liability to pay legal and accounting fees and reasonable closing
expenses in connection with this Agreement and the Phipps Purchase Agreement,
(b) the Obligations, (c) Indebtedness under the Subordinated Note Indenture
and the notes issued pursuant thereto, (d) Indebtedness incurred in the
ordinary course of business since June 30, 1996, (e) as disclosed in the
Financial Statements, and (f) as disclosed on EXHIBIT G attached hereto.
5.11 COMPLIANCE. Except as disclosed in EXHIBIT F attached hereto,
neither the Borrower nor any of its Subsidiaries nor the ownership,
construction or operation of any Station, Newspaper, the Porta Phone Business
or the Satellite Broadcasting Business is in material violation of its
Articles or Certificate of Incorporation, its By-laws, any License or any
statute, ordinance, law, rule, regulation or order of the United States of
America or the FCC (including, without limitation, applicable federal laws
and the rules, regulation, policies and orders of the FCC relating to foreign
ownership restrictions or to limitations on the nature and number of media
outlets that may be held under common ownership or control), the Federal
Aviation Administration or any other federal, state, county, municipal or
other governmental agency or authority applicable to the Borrower or any of
its Subsidiaries, their properties, the ownership, construction or operation
of any Station, Newspaper, the Porta Phone Business or the Satellite
Broadcasting Business or the conduct of their business. Neither the Borrower
nor any of its Subsidiaries nor the ownership, construction or operation of
any Station, any Newspaper, the Porta Phone Business or the Satellite
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Broadcasting Business is in violation or has breached in any material respect
the provisions of the Subordinated Note Indenture or any indenture, License,
Operating Agreement, note, lease or other agreement, instrument or document
to which it is a party or by which it is bound, nor does there exist any
material default, or any event or condition which, upon notice or lapse of
time, or both, would become a material default, under the Subordinated Note
Indenture or any such indenture, License, Operating Agreement, note, lease,
or other agreement, instrument or document. The Borrower and each of its
Subsidiaries have the legal right and authority to conduct their respective
businesses as now conducted or proposed to be conducted.
5.12 STATEMENTS NOT MISLEADING. No statement, representation or
warranty made by the Borrower or any of its Subsidiaries in or pursuant to
this Agreement or the Schedules or Exhibits attached hereto or any of the
Collateral Documents contains any untrue statement of a material fact, nor
omits to state a material fact necessary to make such statement not
misleading in light of the circumstances under which such statement was made,
or otherwise violates any federal or state securities laws, rules or
regulations. There is no fact known to the Borrower (other than matters of a
general economic nature or relating to the broadcasting and newspaper
industries generally) that has had or could reasonably be expected to have a
Material Adverse Effect.
5.13 CONSENTS OR APPROVALS. No consent, approval or authorization of,
or filing, registration or qualification with, any governmental authority or
any other Person (including, without limitation, the FCC and any other
Licensing Authority) is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution, delivery or performance of the
Subordinated Note Indenture, the Phipps Purchase Agreement or this Agreement
or any of the Collateral Documents, including without limitation, in
connection with the granting of Liens in the assets of the Borrower or in the
capital stock and the assets of its Subsidiaries, which has not already been
obtained or completed, except for (a) the filing with the FCC of this
Agreement and certain of the Collateral Documents pursuant to FCC rules,
which shall be accomplished within the required time period after the
Closing, (b) the filing of financing statements, the Mortgages and other
actions expressly required to be taken pursuant to the Collateral Documents,
and (c) the consent of the FCC to the extent required in connection with the
exercise by the Agent or the Banks of their rights and remedies hereunder or
under the Collateral Documents.
5.14 MATERIAL CONTRACTS AND COMMITMENTS. EXHIBIT H attached hereto
contains a true and complete description of all material contracts and
commitments of the Borrower or any of its Subsidiaries or which relate to a
Station, a Newspaper, the Porta
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Phone Business or the Satellite Broadcasting Business as of the Closing Date,
after giving effect to the closing under the Phipps Purchase Agreement,
whether oral or written, including, without limitation, (a) any security
agreement, pledge agreement, mortgage or guaranty; (b) any material
management, construction supervision, service or employment agreements,
conditional sale contract or lease of personal property; (c) any collective
bargaining agreement; (d) any material contract or commitment for the future
purchase or sale of goods in excess of $200,000 in any single case; (e) any
contract or commitment which involves a material Capital Expenditure in
excess of $200,000 in any single case; (f) all Licenses; and (g) all
Operating Agreements. To the best of the Borrower's knowledge, except as
disclosed on EXHIBIT H, as of the Closing Date, all of the items listed on
EXHIBIT H are in full force and effect without material default. EXHIBIT H
further identifies each such contract which requires consent to the granting
of a Lien in favor of the Agent for the benefit of the Banks on the rights of
the Borrower or its Subsidiaries under such contract. The Borrower has made
available to the Agent true and complete copies of each of the above.
5.15 EMPLOYEE BENEFIT PLANS. EXHIBIT I contains a true and complete
list of all Plans maintained by the Borrower or any member of the Controlled
Group. Neither the Borrower nor any member of the Controlled Group has or
will have, after giving effect to the closing under the Phipps Purchase
Agreement, any liability, or reasonably anticipates any liability, of any
kind (including any withdrawal liability under Section 4201 of ERISA) which
is in excess, in the aggregate, of $250,000 and which is more than one
hundred twenty days past due, to or in respect of any Plan or Benefit
Arrangement. With respect to the Plans and Benefit Arrangements maintained
by the Borrower or any member of the Controlled Group: (a) each Plan that is
intended to be qualified under Code Section 401(a) is so qualified and has
been so qualified since its adoption, and each trust forming a part thereof
is exempt from tax under Code Section 501(a); (b) each Plan complies in all
material respects with all applicable requirements of law, has been
administered in accordance with its terms and all required contributions have
been made; (c) neither the Borrower nor any member of the Controlled Group
knows or has reason to know that the Borrower or any member of the Controlled
Group has engaged in a transaction which would subject it to any material
tax, penalty or liability under ERISA or the Code for any prohibited
transaction; (d) no Plan is subject to the minimum funding requirements under
ERISA Section 302 or Code Section 412, is a multiemployer plan (as defined in
ERISA Section 4001(a)(3)), is a defined benefit plan (as defined under ERISA
Section 3(35) or Code Section 414(j)), or is a multiple employer plan (as
defined in ERISA Section 4063). No Plan or Benefit Arrangement maintained by
the Borrower or any member of the Controlled Group
- 46 -
is a multiple employer welfare arrangement (as defined in ERISA Section
3(40)).
5.16 LICENSES AND OPERATING AGREEMENTS. The Licenses and Operating
Agreements shown on EXHIBIT H constitute all of the Licenses and Operating
Agreements which, as of the Closing Date, are necessary for the lawful
ownership, construction or operation of the Stations (including the Stations
being acquired pursuant to the Phipps Purchase Agreement), the Newspapers,
the Porta Phone Business and the Satellite Broadcasting Business and of the
other businesses of the Borrower and its Subsidiaries in the manner and to
the full extent they are currently owned, constructed or operated. EXHIBIT H
sets forth a correct and complete list, as of the Closing Date, of the
expiration date of each License and of each pending application for a
License. Except as specified on EXHIBIT H, all of the Licenses relating to
the Stations, the Newspapers, the Porta Phone Business or the Satellite
Broadcasting Business and all other Licenses of the Borrower and its
Subsidiaries have been duly and validly issued or assigned to and are legally
held by the Borrower or one of its Subsidiaries and are in full force and
effect without condition except those of general application. All such
Licenses have been issued in compliance with all applicable laws and
regulations, are legally binding and enforceable in accordance with their
terms and are in good standing. The Borrower knows of no facts or conditions
which would constitute grounds for any Licensing Authority to deny any
pending application for a License, to suspend, revoke, materially adversely
modify, designate for a hearing, annul, fail to renew on or before its
renewal date, or renew for less than a full license period any License or to
impose a material financial penalty on the Borrower or any of its
Subsidiaries.
5.17 MATERIAL RESTRICTIONS. Neither the Borrower nor any of its
Subsidiaries is a party to any agreement or other instrument or subject to
any other restriction which has had or could reasonably be expected to have a
Material Adverse Effect.
5.18 INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
Subsidiaries (a) is an investment company as that term is defined in the
Investment Company Act of 1940, as amended, (b) directly or indirectly
controls, or is directly or indirectly controlled by, a company which is an
investment company as that term is defined in such act or (c) is otherwise
subject to regulation under such act.
5.19 ABSENCE OF MATERIAL ADVERSE EFFECT. No Material Adverse Effect
has occurred since December 31, 1995.
5.20 DEFAULTS. No Possible Default or Event of Default now exists or
will exist upon the making of any Loan.
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5.21 REAL ESTATE. EXHIBIT J attached hereto lists all real estate
owned as of the Closing Date by the Borrower or any of its Subsidiaries and
all real estate which the Borrower or any Subsidiary will acquire pursuant to
the Phipps Purchase Agreement and all leases pursuant to which the Borrower
or any of its Subsidiaries has acquired, as of the Closing Date, or will
acquire pursuant to the Phipps Purchase Agreement, a leasehold interest in
real estate. EXHIBIT J lists the use of such owned and leased property in the
Borrower's or its Subsidiary's operations and the Borrower's good faith
estimate of the fair market value of each such parcel of owned real estate.
5.22 SECURITIES LAWS. No proceeds of any Loan will be used by the
Borrower or any of its Subsidiaries to acquire any security in any
transaction which is subject to Section 13 or 14 of the Securities Exchange
Act of 1934, as amended. Neither the registration of any security under the
Securities Act of 1933, as amended, or the securities laws of any state, nor
the qualification of an indenture in respect thereof under the Trust
Indenture Act of 1939, as amended, is required in connection with the
consummation of this Agreement or the Phipps Purchase Agreement or the
execution and delivery of the Notes.
5.23 INSURANCE. All policies of insurance of any kind or nature owned
by or issued to the Borrower or any of its Subsidiaries are in compliance
with the requirements of Section 7.3 and are in full force and effect. In
the past three years neither the Borrower nor any of its Subsidiaries has
been refused insurance for which it applied or had any policy of insurance
terminated (except at its own request).
5.24 LABOR MATTERS. There are no material strikes, unfair labor
practice charges or other material labor disputes or grievances pending or,
to the best of the Borrower's knowledge, threatened against the Borrower, any
of its Subsidiaries or any Station, any Newspaper, the Porta Phone Business
or the Satellite Broadcasting Business. The Borrower has not received any
written complaints or knowledge of any threatened complaints, nor to the best
of the Borrower's knowledge, are any such complaints on file with any
Federal, state or local governmental agency, alleging employment
discrimination by the Borrower or any of its Subsidiaries or in connection
with any Station, any Newspaper, the Porta Phone Business or the Satellite
Broadcasting Business. All payments due under any collective bargaining
agreement to which the Borrower or any of its Subsidiaries is a party have
been paid or accrued as a liability on the books of the Borrower or such
Subsidiary.
5.25 ENVIRONMENTAL COMPLIANCE.
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Except as set forth in EXHIBIT K attached hereto and after giving effect
to the consummation of the Phipps Purchase Agreement:
(a) The Borrower and each of its Subsidiaries have obtained all
material permits, licenses and other authorizations which are required under
all Environmental Laws. The Borrower and each of its Subsidiaries are in
material compliance with all terms and conditions of all such permits,
licenses and authorizations and are also in material compliance with all
other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any
applicable Environmental Law or in any regulation, code, plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated or
approved thereunder, including, without limitation, all Environmental Laws in
all jurisdictions in which the Borrower or such Subsidiary owns or operates a
Station, a Newspaper, a facility or site, arranges or has arranged for
disposal or treatment of Hazardous Materials, solid waste or other wastes,
accepts or has accepted for transport any Hazardous Materials, solid waste or
other wastes or holds or has held any interest in real property or otherwise.
(b) No Environmental Claim has been issued, no complaint has been
filed, no penalty has been assessed and no litigation, proceeding,
investigation or review is pending or, to the best of the Borrower's
knowledge, threatened by any Person with respect to any alleged failure by
the Borrower, any of its Subsidiaries or any property owned by the Borrower
or any Subsidiary to comply with any Environmental Law or to have any permit,
license or authorization required in connection with the conduct of the
business of the Borrower or any of its Subsidiaries or with respect to any
generation, treatment, storage, recycling, transportation, use, disposal or
Release of any Hazardous Materials generated by the Borrower or any of its
Subsidiaries or with respect to any real property in which the Borrower or
any of its Subsidiaries holds or has held an interest or any past or present
operation of the Borrower or any of its Subsidiaries.
(c) There are no Environmental Laws requiring any material work,
repairs, construction, Capital Expenditures or other remedial work of any
nature whatsoever, with respect to any real property in which the Borrower or
any of its Subsidiaries holds or has held an interest or any past or present
operation of the Borrower or any Subsidiary.
(d) Neither the Borrower nor any of its Subsidiaries has handled
any Hazardous Material, on any property now or previously owned or leased by
the Borrower or any of its
- 49 -
Subsidiaries to an extent that it has, or could reasonably be expected to
have, a Material Adverse Effect.
(e) To the best of the Borrower's knowledge:
(i) no PCBs or asbestos is present at any property now or
previously owned or any premises now or previously leased by the Borrower or
any of its Subsidiaries;
(ii) no underground storage tanks for Hazardous Materials,
active or abandoned, are now or were previously operated at any property now
or previously owned by the Borrower or any of its Subsidiaries, and, with
respect to premises now or previously leased by the Borrower or any of its
Subsidiaries, no underground storage tanks for Hazardous Materials, active or
abandoned, are now or were previously operated by the Borrower or any of its
Subsidiaries;
(iii) no Hazardous Materials have been Released, in a
reportable quantity, where such a quantity has been established by statute,
ordinance, rule, regulation or order, at, on or under any property now or
previously owned by the Borrower or any of its Subsidiaries; and
(iv) no Hazardous Materials have been otherwise Released at,
on or under any property now or previously owned or any premises now or
previously leased by the Borrower or any of its Subsidiaries to an extent
that it has, or could reasonably be expected to have, a Material Adverse
Effect.
(f) Neither the Borrower nor any of its Subsidiaries has
transported or arranged for the transportation of any Hazardous Material to
any location that is listed on the National Priorities List ("NPL") under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended ("CERCLA"), listed for possible inclusion on the NPL by the
Environmental Protection Agency in the Comprehensive Environmental Response
and Liability Information System, as provided for by 40 C.F.R. Section 300.5
("CERCLIS"), or on any similar state or local list or that is the subject of
Federal, state or local enforcement actions or other investigations that may
lead to Environmental Claims against the Borrower or any of its Subsidiaries.
(g) No Hazardous Material generated by the Borrower or any of its
Subsidiaries has been recycled, treated, stored, disposed of or Released by
the Borrower or any of its Subsidiaries at any location.
(h) No oral or written notification of a Release of a Hazardous
Material has been given or filed by or on behalf of the Borrower or any of
its Subsidiaries and no property now or
- 50 -
previously owned or premises leased by the Borrower or any of its
Subsidiaries is listed or proposed for listing on the National Priorities
list promulgated pursuant to CERCLA, on CERCLIS or on any similar state list
of sites requiring investigation or clean-up.
(i) There are no Liens arising under or pursuant to any
Environmental Laws on any of the property owned or premises leased by the
Borrower or any of its Subsidiaries, and no government actions have been
taken or are in process which could subject any of such property to such
Liens, and neither the Borrower nor any of its Subsidiaries would be required
to place any notice or restriction relating to the presence of Hazardous
Materials at any property owned by it in any deed to such property.
(j) Neither the Borrower nor any of its Subsidiaries has retained
or assumed any liabilities (contingent or otherwise) in respect of any
Environmental Claims under the terms of any contract or agreement or by
operation of law as a result of the sale of assets or stock.
(k) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or which are in the
possession of the Borrower or any of its Subsidiaries in relation to any
property or facility now or previously owned or leased by the Borrower or
such Subsidiary which have not been made available to the Banks.
5.26 SOLVENCY. The Borrower has received, or has the right hereunder
to receive, consideration which is the reasonably equivalent value of the
obligations and liabilities that the Borrower has incurred to the Banks. The
Borrower is not insolvent as defined in Section 101 of Title 11 of the United
States Code or any applicable state insolvency statute, nor, after giving
effect to the consummation of the transactions contemplated herein, in the
Phipps Purchase Agreement and in the Subordinated Note Indenture, will the
Borrower be rendered insolvent by the execution and delivery of this
Agreement, the Notes or the Collateral Documents to the Banks. The Borrower
is not engaged or about to engage in any business or transaction for which
the assets retained by it shall be an unreasonably small capital, taking into
consideration the obligations to the Banks incurred hereunder. The Borrower
does not intend to, nor does it believe that it will, incur debts beyond its
ability to pay them as they mature.
5.27 PHIPPS PURCHASE AGREEMENT, SUBORDINATED NOTE INDENTURE AND
REGISTRATION STATEMENTS.
(a) The Borrower has provided to the Agent a complete and correct
copy of the Phipps Purchase Agreement. All
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of the representations and warranties of the Borrower and, to the best of the
Borrower's knowledge, each other party thereto in the Phipps Purchase
Agreement are true and correct in all material respects as of the date hereof
as if given as of the date hereof and will be true and correct in all
material respects as of the Closing Date as if given as of such date. No
party to the Phipps Purchase Agreement has given notice of any breach of its
representations, warranties or covenants therein. All of the representations
and warranties of the Borrower in this Section 5 shall be deemed to be given
after giving effect to the consummation of the closing under the Phipps
Purchase Agreement, and the television stations being acquired pursuant to
the Phipps Purchase Agreement shall be deemed to be Stations for all purposes
of these representations and warranties.
(b) The Borrower has provided to the Agent a complete and correct
copy of the Subordinated Note Indenture and the notes and other agreements
and documents executed and delivered pursuant thereto. All of the
representations and warranties of the Borrower in the Subordinated Note
Indenture are true and correct in all material respects as of the date hereof
as if given as of the date hereof, and will be true and correct in all
material respects as of the Closing Date as if given as of such date, and no
default or event of default exists thereunder or will exist after giving
effect to the making of any Loan or the issuance of any Letter of Credit
hereunder. The Subordinated Note Indenture has not been amended or modified,
and no provisions thereof have been waived.
(c) The Borrower has provided to the Agent complete and correct
copies of (i) the Registration Statement on Form S-1 (Registration No.
333-4338) relating to the notes issued pursuant to the Subordinated Note
Indenture and (ii) the Registration Statement on Form S-1 (Registration No.
333-4340) relating to the Borrower's issuance of 3,500,000 shares of its
Class B Common Stock. No statement, representation or warranty made in
either such Registration Statement (including the prospectus contained
therein) contains any untrue statement of a material fact, nor omits to state
a material fact necessary to make such statement not misleading in light of
the circumstances under which such statement was made, or otherwise violates
any federal or state securities laws, rules or regulations.
5.28 LICENSE SUBSIDIARIES. Neither the Borrower nor any of its
Subsidiaries (other than License Subsidiaries) holds any License issued by
the FCC. No License Subsidiary (a) has any Indebtedness (other than pursuant
to the License Subsidiary Guaranty, the License Subsidiary Security Agreement
and the subordinated guaranty executed by such License Subsidiary pursuant to
the Subordinated Note Indenture), (b) has any assets other than FCC Licenses,
(c) is a party to or bound by any contract or agreement, (d) conducts any
business or (e) has any
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employees, and there are no Liens of any nature whatsoever on any of the
property or assets of any License Subsidiary except in favor of the Agent,
for the benefit of the Banks. All of the Licenses issued by the FCC in
connection with the ownership and operation of the Stations, including the
Stations being acquired pursuant to the Phipps Purchase Agreement, the Porta
Phone Business and the Satellite Broadcasting Business, have been, or at the
closing under the Phipps Purchase Agreement will be, duly assigned to a
License Subsidiary.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS.
The obligations of the Banks to make any Loan or to issue or renew any
Letter of Credit and the performance by the Banks of the other actions to be
taken by them on or after the Closing Date are subject to the fulfillment or
waiver in writing of each of the following conditions precedent. The
Borrower shall deliver to the Agent copies for each Bank of each document,
instrument or other item to be delivered pursuant to this Section 6.
6.1 COMPLIANCE. All of the representations and warranties of the
Borrower and its Subsidiaries herein and in the Collateral Documents shall be
true and correct on and as of the Closing Date and the date of any subsequent
Loan (other than a Loan resulting from the funding of a Letter of Credit) or
the issuance or renewal of a Letter of Credit, as if made on and as of such
date and time before and after giving effect to the making of the proposed
loan or the issuance of the proposed Letter of Credit, except to the extent
that such representations and warranties expressly relate to an earlier date,
in which case such representations and warranties shall be true and correct
as of such earlier date. The Borrower and its Subsidiaries shall have
performed and shall be in compliance with all the applicable terms and
provisions of this Agreement and the Collateral Documents and no Possible
Default or Event of Default shall have occurred and be continuing, on and as
of the Closing Date and the date of any subsequent Loan (other than a Loan
resulting from the funding of a Letter of Credit) or the issuance or renewal
of a Letter of Credit, before and after giving effect to the making of the
proposed Loan or the issuance of the proposed Letter of Credit. On the
Closing Date, the Borrower shall deliver to the Banks a certificate, dated as
of the Closing Date and signed by an executive officer of the Borrower
certifying compliance with the conditions of this Section 6.1. Each request
by the Borrower for a Loan or the issuance of a Letter of Credit shall, in
and of itself, constitute a representation and warranty that the Borrower, as
of the date of such Loan, is in compliance with this Section.
6.2 SECURITY AGREEMENTS.
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(a) The Borrower shall have executed and delivered to the Agent a
Security Agreement in form and substance satisfactory to the Agent (the
"Borrower Security Agreement"), granting to the Agent, for the benefit of the
Banks, a first priority security interest in substantially all of the
Borrower's personal property, including, without limitation, the property
acquired pursuant to the Phipps Purchase Agreement; and the Borrower Security
Agreement, and the security interests granted pursuant thereto, shall be in
full force and effect.
(b) Each Subsidiary shall have executed and delivered to the Agent
a Security Agreement in form and substance satisfactory to the Agent (the
"Subsidiary Security Agreement"), granting to the Agent, for the benefit of
the Banks, a first priority security interest in substantially all of each
Subsidiary's personal property, including, without limitation, the property
acquired pursuant to the Phipps Purchase Agreement; and the Subsidiary
Security Agreement, and the security interests granted pursuant thereto,
shall be in full force and effect.
6.3 PLEDGE AGREEMENTS.
(a) The Borrower shall have executed and delivered to the Agent a
Pledge Agreement in form and substance satisfactory to the Agent (the
"Borrower Pledge Agreement"), granting to the Agent, for the benefit of the
Banks, a first priority security interest in all of the issued and
outstanding capital stock of each of the Borrower's direct Subsidiaries; the
Borrower shall have delivered to the Agent stock certificates evidencing all
of such capital stock and stock powers, duly endorsed in blank, with respect
thereto; the Borrower shall have taken all actions as may be required to
effect the grant and perfection of the Agent's security interest in such
capital stock; and the Borrower Pledge Agreement, and the security interests
granted pursuant thereto, shall be in full force and effect.
(b) Each Subsidiary of the Borrower which has a Subsidiary shall
have executed and delivered to the Agent a Pledge Agreement in form and
substance satisfactory to the Agent (the "Subsidiary Pledge Agreement"),
granting to the Agent, for the benefit of the Banks, a first priority
security interest in all of the issued and outstanding capital stock of each
Subsidiary owned by such Subsidiary; each such Subsidiary shall have
delivered to the Agent stock certificates evidencing all of such capital
stock and stock powers, duly endorsed in blank, with respect thereto; each
such Subsidiary shall have taken all actions as may be required to effect the
grant and perfection of the Agent's security interest in such capital stock;
and the Subsidiary Pledge Agreement, and the security interests granted
pursuant thereto, shall be in full force and effect.
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6.4 REAL ESTATE MATTERS.
(a) With respect to each parcel of real property owned by the
Borrower or any of its Subsidiaries, to the extent requested by the Agent,
the Borrower or such Subsidiary shall (on or prior to the Closing Date with
respect to real property owned or to be acquired as of the Closing Date and,
with respect to real property thereafter acquired, promptly after acquisition
thereof) have executed and delivered a first priority mortgage or deed of
trust, in form and substance satisfactory to the Agent, covering such parcel
of real property. With respect to each parcel of real property leased by the
Borrower or any of its Subsidiaries, to the extent requested by the Agent,
the Borrower or such Subsidiary shall (on or prior to the Closing Date with
respect to leases held or to be acquired as of the Closing Date and, with
respect to leases thereafter acquired, promptly after acquisition thereof)
have executed and delivered a first priority leasehold mortgage or collateral
assignment of lease, in form and substance satisfactory to the Agent,
covering such leasehold interest. Such mortgages, deeds of trust, leasehold
mortgages and collateral assignments of leases may be referred to hereinafter
collectively as the "Mortgages". Each Mortgage shall have been duly
recorded, and the Borrower shall have paid all taxes, fees or charges
incurred in connection with the execution or recording thereof.
(b) The Borrower shall have procured and delivered to the Agent a
commitment from a title insurance company satisfactory to the Agent for an
ALTA mortgagee's policy of title insurance (Form 1970 if available, or 1984
or 1990 with 1970 Endorsement) covering each parcel of real estate owned by
the Borrower or any of its Subsidiaries which is subject to a Mortgage, which
policy shall be for the benefit of the Agent on behalf of the Banks and
satisfactory to the Agent and shall insure that such Mortgage is a valid
first mortgage lien on the property covered thereby. Such policy shall, to
the extent available and appropriate: (i) insure title to the real property
and all recorded easements benefitting such real property, (ii) contain an
"Extended Coverage Endorsement" insuring over the general exceptions
contained customarily in such policy, (iii) contain an endorsement insuring
that the real property described in the title insurance policy is the same
real estate as shown on the survey delivered with respect to such property,
(iv) contain an endorsement insuring that each street adjacent to the real
property is a public street and that there is direct and unencumbered
pedestrian and vehicular access to such street from the real property, (v) if
the real property consists of more than one record parcel, contain a
"contiguity" endorsement, if applicable, insuring that all of the record
parcels are contiguous to one another, (vi) contain appropriate endorsements
insuring against encroachments and (vii) contain a commercial revolving line
of credit endorsement insuring that advances made
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subsequent to the date of the title insurance policy are included in the
title coverage, not to exceed the face amount of the title policy. No title
indemnities shall be established in connection with the issuance of the
aforesaid lender's title insurance policy.
(c) With respect to each parcel of real property owned by the
Borrower or any of its Subsidiaries which is subject to a Mortgage, the
Borrower shall have procured and delivered to the Agent evidence as to
whether such parcel of property is located within a flood hazard area for
purposes of the National Flood Insurance Act of 1968, as amended.
(d) The Borrower shall obtain from each lessor under a lease, in
respect of which the Borrower or any of its Subsidiaries has granted to the
Agent a Mortgage or collateral assignment, written consent to such grant in
form and substance satisfactory to the Agent.
(e) The Borrower shall have provided to the Agent copies of (i)
Phase I environmental surveys, acceptable to the Agent, conducted by a
company acceptable to the Agent, with respect to each parcel of real estate
acquired pursuant to the Phipps Purchase Agreement which is subject to a
Mortgage, (ii) to the extent available, all environmental surveys or audits
performed during the past five years in connection with each of the parcels
of real estate which is subject to a Mortgage, and the results of any
existing search of the public records of the authorities in the relevant
jurisdictions responsible for environmental matters with respect to any
proceeding or action affecting any parcel of real estate which is subject to
a Mortgage and (iii) such other evidence concerning compliance (both past and
present) with Environmental Laws by the Borrower and its Subsidiaries as the
Agent may request. The results of each Phase I environmental survey shall be
satisfactory to the Agent.
(f) The Agent shall have received a survey (collectively, the
"Surveys") of each parcel of real estate acquired pursuant to the Phipps
Purchase Agreement which is the subject of a Mortgage, which survey shall be
made in accordance with the "Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys" established and adopted by the American Land
Title Association and American Congress on Surveying and Mapping in 1992, and
meeting the accuracy requirement of an "Urban" survey as defined therein,
showing all buildings and other improvements, if any, all encroachments, if
any, all set-back lines, if any, and all areas affected by any easements or
other instruments of record, if any (the recording data in respect of which
shall be marked on the survey), containing metes and bounds description of
such parcel, setting forth the flood zone designations, if any, in which such
parcel is located.
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6.5 FINANCING STATEMENTS. Any financing statements or fixture filings
required by the Security Agreements, the Pledge Agreements and the Mortgages
shall have been filed for record with the appropriate governmental
authorities.
6.6 SUBSIDIARY GUARANTY. Each Subsidiary shall have executed and
delivered to the Agent, for the benefit of the Banks, a guaranty (the
"Guaranty"), in form and substance satisfactory to the Agent, pursuant to
which such Subsidiary shall guarantee the Obligations of the Borrower to the
Banks.
6.7 OPINION OF BORROWER'S COUNSEL. On the Closing Date, the Agent
shall have received the favorable written opinions of special counsel to the
Borrower and the Subsidiaries, of FCC counsel to the Borrower and the
Subsidiaries, and of local counsel in the States of Florida and Kentucky, in
each case dated the Closing Date, addressed to the Banks and in form and
substance satisfactory to the Agent.
6.8 CONSUMMATION OF PHIPPS PURCHASE AGREEMENT.
(a) The transactions contemplated by the Phipps Purchase Agreement
shall have been consummated, or shall be consummated simultaneously with the
making of the initial Loans hereunder, without the waiver of any material
term or condition by any party thereto, and the FCC shall have issued its
consent to the assignment of the FCC Licenses relating to Stations WCTV-TV
and WKXT-TV to WCTV Licensee Corp. and WKXT Licensee Corp., respectively.
Without limiting the foregoing sentence, the Borrower and such License
Subsidiaries shall have purchased pursuant to the Phipps Purchase Agreement
substantially all of the operating assets of Stations WCTV-TV and WKXT-TV,
the Porta Phone Business and the Satellite Broadcasting Business, free and
clear of all Liens, except Permitted Liens. The consummation of the
transactions contemplated by the Phipps Purchase Agreement shall be completed
in a manner satisfactory to the Agent, and the Agent shall have received
conformed copies or photocopies of all conveyance and other material
documents relating thereto. The Borrower shall use its best efforts to cause
all opinions and certificates delivered to the Borrower in connection with
such closing to be addressed to the Banks.
(b) The Borrower shall have executed and delivered to the Agent a
collateral assignment, in form and substance satisfactory to the Agent, of
all of its rights under the Phipps Purchase Agreement, and the Phipps Seller
shall have acknowledged and consented to such collateral assignment.
(c) The letter of credit delivered to the Phipps Seller pursuant
to the Phipps Purchase Agreement shall have terminated and each agreement,
document and instrument executed
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by the Borrower in connection therewith, and the Borrower's reimbursement
obligation thereunder, shall have terminated.
(d) The Borrower shall have delivered to the Agent certified
copies of the Phipps Purchase Agreement and of all agreements, documents and
instruments entered into in connection therewith.
6.9 SUBORDINATED NOTES. The Borrower shall have delivered to the
Agent certified copies of the Subordinated Note Indenture and the notes
issued pursuant thereto. The subordinated notes issued under the
Subordinated Note Indenture shall have been issued, with total gross proceeds
to the Borrower of at least $150,000,000 and an effective interest rate not
exceeding 11.25% per annum, all terms and conditions of such notes, the
Subordinated Note Indenture and the other instruments and documents related
thereto shall be satisfactory to the Agent and the Banks in their sole
discretion, and all amounts held by the trustee under the Subordinated Note
Indenture as security for the notes issued pursuant thereto shall have been
released to the Borrower. The Borrower shall have delivered evidence
satisfactory to the Agent that the requested Loan, or the stated amount of
the requested Letter of Credit, constitutes "Senior Debt" for all purposes of
the Subordinated Note Indenture.
6.10 CLASS B COMMON STOCK ISSUANCE. The Borrower shall have
consummated a public offering of its Class B Common Stock with total gross
proceeds payable to the Borrower of at least $50,000,000, and all of the
terms and conditions of such offering and any agreements, instruments and
documents related thereto shall be satisfactory to the Agent and the Banks in
their sole discretion.
6.11 PREFERRED STOCK. Bull Run Corporation shall have converted its
existing $10,000,000 8% subordinated notes to Series A Preferred Stock of the
Borrower with a liquidation value of $10,000,000, and Bull Run Corporation
and J. Mack Robinson or affiliates thereof together shall have purchased
Series B Preferred Stock of the Borrower with net proceeds to the Borrower of
at least $10,000,000, and all terms and conditions of such preferred stock,
the issuance thereof and the instruments and documents related thereto shall
be satisfactory to the Agent and the Banks in their sole discretion.
6.12 PAYMENT OF EXISTING INDEBTEDNESS. The existing senior secured
indebtedness of the Borrower shall have been paid in full, the agreements and
instruments governing and evidencing such indebtedness shall have been
terminated and cancelled, all Liens in connection therewith shall have been
released and the instruments and documents related thereto shall be
satisfactory to the Agent and the Banks in their sole discretion.
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6.13 FINANCIAL INFORMATION.
(a) AUDITS. The Borrower shall have delivered to the Agent on or
prior to the Closing Date (i) unaudited consolidated financial statements for
the six month period ended June 30, 1996, including consolidated balance
sheets and income and expense statements, of the Borrower and its
Subsidiaries as of, and for the six month period ended, June 30, 1996, and
the results of their operations during such period and (ii) unaudited
consolidated financial statements of John H. Phipps, Inc. for the six month
period ended June 30, 1996, including consolidated balance sheets and income
and expense statements, as of, and for the six month period ended, June 30,
1996, and the results of its operations during such period.
(b) PRO FORMA FINANCIAL STATEMENTS. On the Closing Date, the
Borrower shall have delivered to the Agent (i) a consolidated pro forma
balance sheet and income statement, for the four-quarter period ended June
30, 1996, after giving effect to the closing under this Agreement and the
Phipps Purchase Agreement and the sale of Station KTVE-TV, and (ii) a
certificate in form and substance satisfactory to the Agent showing in detail
the calculation of the Applicable Margin (using pro forma four quarter
trailing cash flow as of June 30, 1996) after giving effect to the closings
under this Agreement and the Phipps Purchase Agreement.
(c) COMPLIANCE CERTIFICATE. The Borrower shall have delivered to
the Agent a pro forma compliance certificate in form and substance
satisfactory to the Agent showing the Leverage Ratio as the date of such
borrowing or issuance of a Letter of Credit and the Borrower's compliance
with the financial covenants set forth in Section 8.
(d) SOLVENCY CERTIFICATE. On the Closing Date, the Borrower shall
have delivered to the Agent a solvency certificate in form and substance
satisfactory to the Agent executed by the chief financial officer of the
Borrower.
6.14 ENGINEER'S REPORT. On the Closing Date, the Borrower shall have
delivered to the Agent a detailed engineering report from the Borrower's
engineer, acceptable in form and substance to the Agent, as to the
construction, engineering, installation and operation of each of the
Stations, including the Stations being acquired pursuant to the Phipps
Purchase Agreement, and its facilities and equipment. Such certificate shall
also list any material equipment problems at such Station and any material
upgrades of equipment which are currently, or which will within six months
be, required at such Station.
6.15 DUE DILIGENCE. The Agent and its counsel shall have conducted a
due diligence investigation of the Borrower, its
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Subsidiaries and the Phipps Business, and the results of such investigation
shall have been satisfactory to the Agent in all respects.
6.16 BORROWING REQUEST. On the date of each Loan, the Borrower shall
have delivered to the Agent a borrowing request for such Loan in form and
substance satisfactory to the Agent, setting forth the application of the
proceeds of such Loan, evidence that such application is permitted pursuant
to Section 7.1, and showing the recipient, the amount of the payment and the
wire transfer instructions.
INSURANCE CERTIFICATES. On the Closing Date, the Borrower shall have
furnished to the Agent certificates of insurance together with copies, if
requested by the Agent, of all policies or other satisfactory evidence that
the insurance required by Section 7.3 is in full force and effect.
6.18 CORPORATE DOCUMENTS. On the Closing Date, the Borrower shall
deliver to the Agent the following:
(a) certificates of good standing for each of the Borrower and its
Subsidiaries from the Secretary of State of the state of its incorporation
and from the Secretary of State of each other state in which the Borrower or
such Subsidiary is qualified or registered to do business, in each case dated
as of a date as near to the Closing Date as practicable;
(b) a certificate signed by the Secretary or Assistant Secretary
of the Borrower, dated as of the Closing Date, certifying that attached
thereto are true and complete copies of (i) the Articles or Certificate of
Incorporation and By-Laws of the Borrower and each Subsidiary, (ii)
resolutions adopted by the respective Boards of Directors of the Borrower and
each of its Subsidiaries authorizing the execution, delivery and performance
of the Phipps Purchase Agreement, the Subordinated Note Indenture, this
Agreement, the Collateral Documents and the Obligations;
(c) incumbency certificates for the Borrower and each Subsidiary;
and
(d) such other documents as any Bank may reasonably request in
connection with the proceedings taken by the Borrower or any of its
Subsidiaries authorizing this Agreement and the Collateral Documents.
6.19 LIEN SEARCHES, CONSENTS AND RELEASES OF LIENS. The Agent shall
have received: (a) certified copies of UCC, judgment and tax lien search
reports for each jurisdiction in which the Borrower or any Subsidiary owns
any property or conducts any business listing all effective financing
statements
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and other Liens on any of the property of the Borrower or such Subsidiary,
(b) consents to the granting of Liens in all Operating Agreements and other
material contracts and leases of the Borrower and each of its Subsidiaries
(including any acquired pursuant to the Phipps Purchase Agreement), which by
their terms require such consent, and (c) releases of any existing Liens
encumbering any assets of the Borrower or any of its Subsidiaries (including
assets being acquired pursuant to the Phipps Purchase Agreement), except for
Permitted Liens.
6.20 NO ORDER, JUDGMENT OR DECREE. No order, judgment or decree of any
court, arbitrator or governmental authority shall purport to enjoin or
restrain the Banks from making the Loans.
6.21 NO MATERIAL ADVERSE EFFECT. There shall have occurred no Material
Adverse Effect since December 31, 1995. No material disruption of or
material adverse change in financial, banking or capital markets shall have
occurred since May 10, 1996, and be continuing as of the Closing Date that,
in the Agent's reasonable judgment, would have a material adverse effect on
any Bank's ability to fund the initial Loans hereunder. No material
disruption of or material adverse change in the primary or secondary loan
syndication markets, shall have occurred since May 10, 1996, and be
continuing as of the Closing Date that, in the Agent's reasonable judgment,
would have a material adverse effect on the syndication of the Loans.
6.22 FEE LETTER; FEES AND EXPENSES. The Borrower shall have paid all
fees, expenses and other amounts due pursuant hereto and pursuant to the Fee
Letter.
6.23 LEGAL APPROVAL. All legal matters incident to this Agreement and
the consummation of the transactions contemplated hereby shall be
satisfactory to Dow, Lohnes & Albertson, special counsel to the Agent.
6.24 OTHER DOCUMENTS. The Agent shall have received all Collateral
Documents duly executed, and each Bank shall have received such other
certificates, opinions, agreements and documents, in form and substance
satisfactory to it, as it may reasonably request.
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower agrees with the Banks that so long as this Agreement shall
remain in effect or any of the Obligations shall remain unpaid or to be
performed or any Letter of Credit shall remain outstanding, it shall perform
and comply with the affirmative covenants contained in this Section.
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7.1 USE OF PROCEEDS.
(a) The Borrower shall use the proceeds of the Revolving Loans
only for the following purposes: (i) to pay a portion of the purchase price
under the Phipps Purchase Agreement, (ii) to fund Permitted Acquisitions,
(iii) to repay existing Indebtedness, (iv) to fund Capital Expenditures to
the extent permitted by Section 8.7, (v) for working capital purposes
(including the payment of closing costs in connection with the Phipps
Purchase Agreement and this Agreement), and (vi) for the optional redemption
of the subordinated notes issued under the Subordinated Note Indenture to the
extent permitted by Section 8.24.
(b) The Borrower shall use the proceeds of the Term Loans only for
the following purposes: (i) to fund Permitted Acquisitions, (ii) to fund
Capital Expenditures associated with Permitted Acquisitions to the extent
permitted by Section 8.7, (iii) for working capital purposes, (iv) to repay
existing Indebtedness, and (v) for the optional redemption of the
subordinated notes issued under the Subordinated Note Indenture to the extent
permitted by Section 8.24.
7.2 CONTINUED EXISTENCE; MAINTENANCE OF RIGHTS AND LICENSES; COMPLIANCE
WITH LAW. The Borrower shall, and shall cause each of its Subsidiaries to,
do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its corporate existence and its material rights and
Licenses. Without limiting the generality of the foregoing, the Borrower
shall, and shall cause each of its Subsidiaries to, maintain in full force
and effect, until termination in accordance with their respective terms, any
and all Licenses, Operating Agreements and other material contracts and other
rights necessary to operate the Stations, the Newspapers, the Porta Phone
Business and the Satellite Broadcasting Business, not breach or violate the
same in any material respect, and take all actions which may be required to
comply in all material respects with all applicable laws, statutes, rules,
regulations, orders and decrees now in effect or hereafter promulgated by any
governmental authority, including without limitation, the FCC. The Borrower
shall, and shall cause each of its Subsidiaries to, obtain, renew and extend
all of the foregoing rights, Licenses and the like which may be necessary for
the continuance of the operation of the Stations, the Newspapers, the Porta
Phone Business and the Satellite Broadcasting Business.
7.3 INSURANCE. The Borrower shall, and shall cause each of its
Subsidiaries to, keep its insurable properties insured to the full
replacement cost thereof at all times by financially sound and reputable
insurers reasonably acceptable to the Agent, and maintain such other
insurance, to such extent and against such risks, including fire, lightning,
vandalism,
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malicious mischief, flood (to the extent required by the Agent, if any of the
Borrower's or any of its Subsidiaries' property is located in an identified
flood hazard area, in which insurance has been made available pursuant to the
National Flood Insurance Act of 1968) and other risks insured against by
extended coverage, as is customary with companies in the broadcasting and
media businesses. All such insurance shall be in amounts sufficient to
prevent the Borrower or any of its Subsidiaries from becoming a coinsurer,
shall name the Agent, for the benefit of the Banks, as loss payee and may
contain loss deductible provisions which shall not exceed $250,000. The
Borrower shall maintain, for itself and its Subsidiaries, in full force and
effect liability insurance, business interruption insurance, errors and
omissions insurance, general accident and public liability insurance and all
other insurance as is usually carried by companies engaged in the same or
similar businesses similarly situated against claims for personal or bodily
injury, death or property damage occurring upon, in, about or in connection
with the use or operation of any property or motor vehicles owned, occupied,
controlled or used by the Borrower, its Subsidiaries and their employees or
agents, or arising in any other manner out of the business conducted by the
Borrower and its Subsidiaries. All of such insurance shall be in amounts
reasonably satisfactory to the Agent and shall be obtained and maintained by
means of policies with generally recognized, responsible insurance companies
authorized to do business in such states as may be necessary depending upon
the locations of the Borrower's and its Subsidiaries' assets and shall name
the Agent, for the benefit of the Banks, as an additional insured or loss
payee, as the case may be. The insurance to be provided may be blanket
policies. Each policy of insurance shall be written so as not to be subject
to cancellation or substantial modification without not less than thirty days
advance written notice to the Agent. The Borrower shall furnish the Agent
annually with certificates or other evidence satisfactory to the Agent that
the insurance required hereby has been obtained and is in full force and
effect and, prior to the expiration of any such insurance, the Borrower shall
furnish the Agent with evidence satisfactory to the Agent that such insurance
has been renewed or replaced. The Borrower shall, upon request of the Agent,
furnish the Agent such information about such insurance as the Agent may from
time to time reasonably request.
7.4 OBLIGATIONS AND TAXES. The Borrower shall, and shall cause each of
its Subsidiaries to, pay and perform all of its material Indebtedness and
other material liabilities and obligations in a timely manner in accordance
with normal business practices and with the terms governing the same. The
Borrower shall, and shall cause each of its Subsidiaries to, comply with the
terms and covenants of all material agreements and all material leases of
real or personal property and shall keep them all in full force and effect
until termination thereof in
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accordance with their respective terms. The Borrower shall, and shall cause
each of its Subsidiaries to, pay and discharge promptly all taxes,
assessments and governmental charges or levies imposed upon it or in respect
of its property before the imposition of any penalty, as well as all lawful
claims for labor, materials, supplies or other matters which, if unpaid,
might become a Lien or charge upon such properties or any part thereof;
PROVIDED, HOWEVER, that neither the Borrower nor any of its Subsidiaries
shall be required to pay and discharge any such tax, assessment, charge, levy
or claim so long as (a) the validity thereof is being contested diligently
and in good faith by appropriate proceedings and the enforcement thereof is
stayed, pending the outcome of such proceedings, (b) the Borrower or such
Subsidiary has set aside on its books adequate reserves in accordance with
GAAP with respect thereto, and (c) such contest will not endanger the Lien of
the Agent in any of the Borrower's or such Subsidiary's assets.
7.5 FINANCIAL STATEMENTS AND REPORTS. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain true and complete books and
records of account in accordance with GAAP. The Borrower shall furnish to
the Agent, for delivery to the Banks, the following financial statements and
projections at the following times:
(a) As soon as available, but in no event later than ninety days
after the end of each fiscal year of the Borrower, the Borrower shall furnish
(i) audited consolidated financial statements, including audited consolidated
balance sheets and income and expense statements, of the Borrower and its
Subsidiaries as of the close of such fiscal year and the results of their
operations during such fiscal year, and a consolidated statement of cash
flows for such fiscal year, together with such additional statements,
schedules and footnotes as are customary in a complete accountant's report;
such financial statements shall be certified by independent certified public
accountants selected by the Borrower and acceptable to the Agent, and the
opinion of such accountants shall be unqualified; and (ii) a statement signed
by such accountants to the effect that in connection with their examination
of such financial statements they have reviewed the provisions of this
Agreement and have no knowledge of any event or condition which constitutes
an Event of Default or Possible Default or, if they have such knowledge,
specifying the nature and period of existence thereof; PROVIDED, HOWEVER,
that in issuing such statement, such independent accountants shall not be
required to go beyond normal auditing procedures conducted in connection with
their opinion referred to above;
(b) As soon as available, but in no event later than forty-five
days after the end of each fiscal quarter of the Borrower, the Borrower shall
furnish unaudited consolidated and
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consolidating financial statements, including consolidated and consolidating
balance sheets and income and expense statements, of the Borrower and its
Subsidiaries as of the end of such period and the results of their operations
during such period and for the then elapsed portion of the fiscal year, and a
consolidated statement of cash flows for the portion of the fiscal year ended
with the last day of such quarter; all such financial statements shall set
forth, in comparative form, corresponding figures for the equivalent period
of the prior year and a comparison to budget for the applicable quarter,
shall be in form and detail satisfactory to the Agent, and shall be certified
as to accuracy and completeness by the chief financial officer of the
Borrower;
(c) As soon as available, but in no event later than forty-five
days after the end of each month, the Borrower shall furnish unaudited
statements of income and expense for each Station, each Newspaper, the Porta
Phone Business and the Satellite Broadcasting Business, which shall contain a
comparison with the budget or projections for such period and a comparison to
the comparable period for the prior year, and which shall be certified by the
chief financial officer of the Borrower;
(d) The financial statements required under (a) and (b) above
shall be accompanied by a compliance certificate in the form attached hereto
as EXHIBIT L of the chief financial officer of the Borrower (i) setting forth
the computations showing compliance with the financial covenants set forth in
Section 8 below, and (ii) certifying that no Possible Default or Event of
Default has occurred, or if any Possible Default or Event of Default has
occurred, stating the nature thereof and the actions the Borrower intends to
take in connection therewith;
(e) The Borrower shall furnish (i) no later than thirty days after
the commencement of each fiscal year, an annual operating budget or fiscal
projections for such fiscal year, and (ii) promptly upon preparation thereof,
any material revisions of such annual budget or fiscal projections;
(f) Promptly upon their becoming available, the Borrower shall
furnish (i) copies of any periodic or special reports filed by the Borrower
or any of its Subsidiaries with the FCC or any other federal, state or local
governmental agency or authority if such reports indicate any material change
in the ownership of the Borrower or such Subsidiary, or any materially
adverse change in the business, operations, affairs or condition of the
Borrower or such Subsidiary, (ii) copies of any material notices and other
material communications from the FCC or any other federal, state or local
governmental agency or authority which specifically relate to the Borrower,
any of its Subsidiaries, any Station, the Porta Phone Business or the
Satellite Broadcasting Business or any material License, and the substance of
which relates to a matter that could reasonably be
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expected to have a Material Adverse Effect, and (iii) copies of the results
of each survey conducted by the Borrower or any of its Subsidiaries for the
purpose of certifying to the FCC compliance with federal laws and the rules,
regulations, policies and orders of the FCC relating to foreign ownership
restrictions and to limitations on the nature and number of media outlets
that may be held under common ownership or control;
(g) Promptly upon their becoming available, the Borrower shall
furnish (i) copies of any registration statements and regular periodic
reports, if any, which any Borrower or any Subsidiary shall have filed with
the Securities and Exchange Commission (or any governmental agency
substituted therefor) or any national securities exchange, and (ii) copies of
all financial statements, reports and proxy statements mailed to its
stockholders;
(h) The Borrower shall furnish (i) upon request, promptly after
the filing thereof with the Internal Revenue Service, copies of each annual
report with respect to each Plan established or maintained by the Borrower or
any member of the Controlled Group for each plan year, including (A) where
required by law, a statement of assets and liabilities of such Plan as of the
end of such plan year and statements of changes in fund balance and in
financial position, or a statement of changes in net assets available for
plan benefits, for such plan year, certified by an independent public
accountant satisfactory to the Agent, and (B) if prepared by or available to
the Borrower, an actuarial statement of such Plan applicable to such plan
year, certified by an enrolled actuary of recognized standing acceptable to
the Agent; and (ii) promptly after receipt thereof, a copy of any notice the
Borrower or a member of the Controlled Group may receive from the Department
of Labor or the Internal Revenue Service with respect to any Plan (other than
notices of general application) which could result in a material liability to
the Borrower; the Borrower will promptly notify the Agent of any material
taxes assessed, proposed to be assessed or which the Borrower has reason to
believe may be assessed against the Borrower or any member of the Controlled
Group by the Internal Revenue Service with respect to any Plan or Benefit
Arrangement within thirty days after the Borrower knows or has reason to know
that any Reportable Event with respect to any Plan has occurred, a statement
of the chief financial officer of the Borrower setting forth details as to
such Reportable Event and the action which the Borrower proposes to take with
respect thereto, together with a copy of the notice of such reportable event
given to the PBGC if a copy of such notice is available to the Borrower;
notice within thirty days after the Borrower or any other member of the
Controlled Group knows or has reason to know that any multiemployer plan (as
defined in Code Section 414(f)) under which the Borrower or member of the
Controlled Group is an employer, is in reorganization (as defined in Code
Section 418 or ERISA Title IV) or is insolvent; the Borrower will promptly
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notify the Agent of any withdrawal liability asserted against the Borrower or
any member of the Controlled Group under ERISA Section 4201(a) with respect
to any Plan;
(i) Without duplication of any delivery requirements otherwise set
forth herein, copies of any reports, notices or other communications that the
Borrower is required to deliver to the trustee under the Subordinated Note
Indenture; and
(j) Upon the Agent's written request, such other information about
the financial condition, properties and operations of the Borrower or any of
its Subsidiaries as any Bank may from time to time reasonably request.
7.6 NOTICES. The Borrower shall give the Agent, for distribution to
the Banks, notice within five days after its receipt of notice or knowledge
thereof, (a) of any action, suit, investigation or proceeding by or against
the Borrower or any of its Subsidiaries, which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect, including,
without limitation, any material admonition, censure or adverse citation or
order by the FCC or any other governmental authority or regulatory agency,
(b) (i) of any action or event constituting an event of default or violation
of the Subordinated Note Indenture, or any License, Operating Agreement or
other material contract to which the Borrower or any of its Subsidiaries is a
party or by which the Borrower or any Subsidiary is bound, and (ii) of any
competing application, petition to deny or other opposition to any license
renewal application filed by the Borrower or any of its Subsidiaries with the
FCC, if such event of default, violation or other matter could reasonably be
expected to have a Material Adverse Effect, (c) of the occurrence of any
Possible Default or Event of Default and the actions the Borrower intends to
take in connection therewith, (d) of any cancellation of or any material
amendment to any of the insurance policies maintained in accordance with the
requirements of this Agreement, except for cancellations and amendments that
occur in the ordinary course of business, (e) of any material, adverse change
in the business or financial condition of the Borrower or any of its
Subsidiaries, and (f) of any material strike, labor dispute, slow down or
work stoppage due to a labor disagreement (or any material development
regarding any thereof) affecting the Borrower or any of its Subsidiaries.
7.7 MAINTENANCE OF PROPERTY. The Borrower shall, and shall cause each
of its Subsidiaries to, at all times maintain and preserve its towers,
printing presses, machinery, equipment, motor vehicles, fixtures and other
property in good working order, condition and repair, normal wear and tear
excepted, and in compliance with all material applicable standards, rules or
regulations imposed by any governmental authority or agency (including,
without limitation, the FCC, the Federal Aviation
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Administration or any other Licensing Authority) or policy of insurance,
except for such property which, in the judgment of the Borrower, is no longer
necessary to the business of the Borrower or any of its Subsidiaries.
7.8 INFORMATION AND INSPECTION. The Borrower shall furnish to the
Agent and the Banks from time to time, promptly upon request, information
reasonably requested by the Agent or any Bank pertaining to any covenant,
provision or condition hereof or of any Collateral Document, or to any matter
connected with the books, records, operations, financial condition,
properties, activities or business of the Borrower or of any of its
Subsidiaries. At all reasonable times, the Borrower shall permit any
authorized representative designated by any Bank to visit and inspect any of
the properties of the Borrower or any of its Subsidiaries, and their books
and records, and to take extracts therefrom and make copies thereof, and to
discuss the Borrower's and its Subsidiaries' affairs, finances and accounts
with the management of the Borrower and its Subsidiaries and with the
Borrower's independent accountants.
7.9 MAINTENANCE OF LIENS. The Borrower shall do all things necessary
or requested by the Agent to preserve and perfect the Liens of the Agent, for
the benefit of the Banks, arising pursuant hereto and pursuant to the
Collateral Documents as first Liens, except for Permitted Liens, and to
insure that the Agent, for the benefit of the Banks, has a Lien on
substantially all of the assets of the Borrower and in all of the capital
stock and substantially all of the assets of each of its Subsidiaries. If
the Borrower or any of its Subsidiaries purchases any real property, the
Borrower or such Subsidiary shall notify the Agent and execute, deliver and
cause to be recorded any Mortgage requested by the Agent in connection
therewith, which shall be a first lien, except for Permitted Liens and take
such other actions as would have been required pursuant to Section 6.4 had
such property been owned on the Closing Date. If the Borrower or any of its
Subsidiaries enters into a new Operating Agreement or other material contract
or lease which prohibits the assignment thereof or the granting of a security
interest therein without the consent of the other party, the Borrower shall
use its best efforts to obtain the written consent of such other party to the
grant to the Agent, for the benefit of the Banks, of a security interest
therein pursuant to the Security Agreements.
7.10 TITLE TO PROPERTY. The Borrower shall, and shall cause each of
its Subsidiaries to, own and hold title to all of its assets in its own name
and not in the name of any nominee.
7.11 ENVIRONMENTAL COMPLIANCE AND INDEMNITY.
(a) The Borrower shall, and shall cause each of its Subsidiaries
to, comply in all material respects with all
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Environmental Laws, including, without limitation, all Environmental Laws in
jurisdictions in which the Borrower or any of its Subsidiaries owns or
operates a facility or site, arranges for disposal or treatment of Hazardous
Materials, solid waste or other wastes, accepts for transport any Hazardous
Materials, solid wastes or other wastes or holds any interest in real
property or otherwise. Neither the Borrower nor any of its Subsidiaries
shall cause or allow the Release of Hazardous Materials, solid waste or other
wastes on, under or to any real property in which the Borrower or such
Subsidiary holds any interest or performs any of its operations, in material
violation of any Environmental Law. The Borrower shall notify the Banks
promptly after its receipt of notice thereof, of any Environmental Claim
which the Borrower receives involving any potential or actual material
liability of the Borrower or any of its Subsidiaries arising in connection
with any noncompliance with or violation of the requirements of any
Environmental Law or a material Release or threatened Release of any
Hazardous Materials, solid waste or other waste into the environment. The
Borrower shall promptly notify the Banks (i) of any material Release of
Hazardous Material on, under or from the real property in which the Borrower
or any of its Subsidiaries holds or has held an interest, upon the Borrower's
learning thereof by receipt of notice that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of such Release or
that the Borrower or such Subsidiary has been identified as potentially
responsible for, or is subject to investigation by any governmental authority
relating to, such Release, and (ii) of the commencement or threat of any
judicial or administrative proceeding alleging a violation of any
Environmental Laws.
(b) If the Agent at any time has a reasonable basis to believe
that there may be a violation of any Environmental Law by, or any liability
arising thereunder of, the Borrower or any of its Subsidiaries or related to
any real property owned, leased or operated by the Borrower or any of its
Subsidiaries or real property adjacent to such real property, which violation
or liability could reasonably be expected to have a Material Adverse Effect,
then the Borrower shall, upon request from the Agent, provide the Agent with
such reports, certificates, engineering studies or other written material or
data as the Agent may require so as to satisfy the Agent that the Borrower or
such Subsidiary is in material compliance with all applicable Environmental
Laws.
(c) The Borrower shall defend, indemnify and hold the Agent and
the Banks, and their respective officers, directors, shareholders, employees,
agents, affiliates, successors and assigns harmless from and against all
costs, expenses, claims, demands, damages, penalties and liabilities of every
kind or nature whatsoever incurred by them (including reasonable attorneys
fees) arising out of, resulting from or relating to (i) the noncompliance of
the Borrower, any of its
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Subsidiaries or any property owned or leased by the Borrower or any of its
Subsidiaries with any Environmental Law, or (ii) any investigatory or
remedial action involving the Borrower, any of its Subsidiaries or any
property owned or leased by the Borrower or any of its Subsidiaries and
required by Environmental Laws or by order of any governmental authority
having jurisdiction under any Environmental Laws, or (iii) any injury to any
person whatsoever or damage to any property arising out of, in connection
with or in any way relating to the breach of any of the environmental
warranties or covenants contained in this Agreement or any facts or
circumstances that cause any of the environmental representations or
warranties contained in this Agreement to cease to be true, or (iv) the
existence, treatment, storage, Release, generation, transportation, removal,
manufacture or other handling of any Hazardous Material on or affecting any
property owned or leased by the Borrower or any of its Subsidiaries, or (v)
the presence of any asbestos-containing material or underground storage
tanks, whether in use or closed, under or on any property owned or leased by
the Borrower or any of its Subsidiaries; PROVIDED, HOWEVER, that the
foregoing indemnity shall not apply to any such costs, expenses, claims,
demands, damages, penalties or liabilities that are determined in a final
non-appealable order of a court of competent jurisdiction to have arisen
solely out of the gross negligence or willful misconduct of the indemnified
person.
7.12 RATE HEDGING OBLIGATIONS. The Borrower shall within sixty days
after the Closing enter into, and shall at all times thereafter maintain in
full force and effect, agreements in form and substance reasonably
satisfactory to the Agent regarding Rate Hedging Obligations so that the sum
of the notional amount subject to such agreements plus the aggregate
principal amount of all Total Debt which bears interest at a fixed interest
rate equals at all times at least 50% of the principal amount of Total Debt
then outstanding.
7.13 FCC CONSENTS. The Borrower acknowledges that certain transactions
contemplated by this Agreement or the Collateral Documents, and certain
actions which may be taken by the Agent or the Banks in the exercise of their
rights under this Agreement or the Collateral Documents, may require the
consent of the FCC. If counsel to the Agent determines that the consent of
the FCC is required in connection with the execution, delivery and
performance of any of the aforesaid documents or any documents delivered to
the Agent or the Banks in connection therewith or as a result of any action
which may be taken pursuant thereto, then the Borrower, at its sole cost and
expense, shall use its best efforts, and shall cause its Subsidiaries to use
their best efforts, to secure such consent and to cooperate with the Agent
and the Banks in any action commenced by the Agent or the Banks to secure
such consent. The Borrower shall not, and shall not permit any Subsidiary
to, take any action which interferes with the exercise or completion of
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any such action taken by the Agent or the Banks. The Borrower further
consents to the transfer of control or assignment of Licenses to a receiver
or trustee or similar official or to any purchaser of the collateral securing
the Loans pursuant to any public or private sale, judicial sale, foreclosure
or exercise of other remedies available to the Agent or the Banks as
permitted by applicable law upon the occurrence of an Event of Default.
7.14 APPRAISALS. If at any time any Bank determines that it must have
current appraisals of any of the real property subject to a Mortgage to
comply with any law, rule or regulation applicable to it, then, upon request
by such Bank, the Borrower shall, at its expense, order appraisals of all of
such real property. Such appraisals shall be in form and substance
acceptable to the Banks, shall be prepared by appraisers acceptable to the
Banks and shall be delivered to the Agent within forty-five days of the
request therefor.
7.15 REAL ESTATE. Within forty-five days after any reasonable request
by the Agent, the Borrower shall deliver to the Agent copies of the following
items, all of which shall be in form and substance reasonably satisfactory to
the Agent, in respect of any parcel of real estate owned by the Borrower or
any of its Subsidiaries and in respect of which such items were not delivered
to the Agent at the Closing:
(a) a Phase I environmental survey of such parcel, conducted by a
company acceptable to the Agent, and such other evidence concerning
compliance (both past and present) with Environmental Laws by the Borrower
and its Subsidiaries as the Agent may request; and
(b) a survey of such parcel, which survey shall be made in
accordance with the "Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys" established and adopted by the American Land Title Association
and American Congress on Surveying and Mapping in 1992, and meeting the
accuracy requirement of an "Urban" survey as defined therein, showing all
buildings and other improvements, if any, all encroachments, if any, all
set-back lines, if any, and all areas affected by any easements or other
instruments of record, if any (the recording data in respect of which shall
be marked on the survey), containing metes and bounds description of such
parcel, and setting forth the flood zone designations, if any, in which such
parcel is located.
SECTION 8. NEGATIVE COVENANTS OF THE BORROWER.
The Borrower agrees with the Banks that so long as this Agreement shall
remain in effect or any of the Obligations shall remain unpaid or to be
performed or any Letter of Credit shall remain outstanding, the Borrower
shall not, directly or
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indirectly, take any of the actions set out in this Section 8 nor permit any
of the conditions set out herein to occur.
8.1 INDEBTEDNESS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, incur, create, assume or permit to exist any
Indebtedness, except:
(a) the Obligations;
(b) Indebtedness permitted under Sections 8.3, 8.4, 8.5 or 8.6
hereof and any other Indebtedness secured by a Permitted Lien;
(c) unsecured trade accounts payable and other unsecured current
Indebtedness incurred in the ordinary course of business (but excluding any
Indebtedness for borrowed money);
(d) Indebtedness for taxes, assessments, governmental charges,
liens or similar claims to the extent that payment thereof shall not be
required to be made by the provisions of Section 7.4;
(e) Indebtedness incurred in respect of Rate Hedging Obligations
required pursuant to Section 7.12;
(f) Subordinated Debt incurred pursuant to the terms of the
Subordinated Note Indenture as in effect on the date hereof in a principal
amount not to exceed $150,000,000; and
(g) existing Indebtedness listed on EXHIBIT G.
8.2 LIENS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, incur, create, assume or permit to exist any Lien of any
nature whatsoever on any property or assets now owned or hereafter acquired
by the Borrower or any of its Subsidiaries, other than Permitted Liens. The
Borrower shall not, and shall not permit any of its Subsidiaries to, enter
into or permit to exist any arrangement or agreement, other than pursuant to
this Agreement or any Collateral Document, which directly or indirectly
prohibits the Borrower or any of its Subsidiaries from creating or incurring
any Lien on any of its assets, other than (a) leases and agreements regarding
purchase money Indebtedness permitted pursuant to Section 8.4 (so long as
such prohibition only relates to the asset which is subject to such lease or
which secure such Indebtedness), (b) provisions in agreements which prohibit
the assignment of such agreements and (c) restrictions on the creation of
Liens contained in the Subordinated Note Indenture as in effect as of the
date hereof.
8.3 GUARANTIES. The Borrower shall not, and shall not permit any of
its Subsidiaries to, become a Guarantor for any Person, except with respect
to (a) endorsements of negotiable instruments for collection in the ordinary
course of business,
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(b) the Guaranty, (c) guaranties by the Borrower's Subsidiaries of the
Borrower's obligations under the Subordinated Debt, so long as such
guaranties are subordinate to the obligations of the Borrower's Subsidiaries
under the Guaranty to the same extent as the Subordinated Debt under the
Subordinated Note Indenture is subordinate to the Obligations, (d) contingent
obligations under indemnity agreements to title insurers to cause such title
insurers to issue to the Agent mortgagee title insurance policies, as
provided in Section 6.4, and (e) contingent obligations incurred in the
ordinary course of business with respect to surety and appeal bonds,
performance and return-of-money bonds and other similar obligations not
exceeding at any time outstanding $50,000 in aggregate liability.
8.4 RENTAL AND CONDITIONAL SALE OBLIGATIONS. The Borrower shall not,
and shall not permit any of its Subsidiaries to, incur, create, assume or
permit to exist, with respect to any personal property, any conditional sale
obligation, any purchase money obligation, any rental obligation, any
purchase money security interest or any other arrangement for the use of
personal property of any other Person, which in any such case has an
unexpired term of not less than one year, other than an arrangement
constituting a Capitalized Lease Obligation, if the aggregate amount payable
by the Borrower and its Subsidiaries pursuant to all such arrangements in any
fiscal year would exceed the sum of $500,000 plus the amount of any such
obligations incurred pursuant to a Permitted Acquisition.
8.5 REAL PROPERTY INTERESTS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, be obligated under, enter into, assume or
permit to exist any lease or rental obligation for real property which has an
unexpired term of not less than one year, if the aggregate amount payable in
respect of all such arrangements by the Borrower and its Subsidiaries in any
fiscal year would exceed the sum of $2,000,000 plus the amount of any such
obligations incurred pursuant to a Permitted Acquisition.
8.6 CAPITALIZED LEASE OBLIGATIONS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, incur, create, assume or permit to
exist Capitalized Lease Obligations if the aggregate amount payable by the
Borrower and its Subsidiaries in respect of all such Capitalized Lease
Obligations in any fiscal year would exceed the sum of $1,000,000 plus the
amount of any such obligations incurred pursuant to a Permitted Acquisition.
8.7 CAPITAL EXPENDITURES. The Borrower and its Subsidiaries shall not
make Capital Expenditures in any fiscal year which exceed in the aggregate
$5,000,000 (the amount permitted in any year pursuant to this sentence being
referred to as the "Base Amount" for such year). If the Base Amount for any
year exceeds the aggregate amount of Capital Expenditures
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actually made by the Borrower and its Subsidiaries in such year (such excess
being referred to as the "Excess Amount"), then the Borrower and its
Subsidiaries may make Capital Expenditures in the immediately succeeding year
(but not in any year thereafter) in excess of the Base Amount for such
succeeding year in an amount not to exceed the Excess Amount for the prior
year.
8.8 NOTES, ACCOUNTS RECEIVABLE AND CLAIMS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, sell, discount or otherwise
dispose of any note, account receivable or other right to receive payment,
with or without recourse, except for collection in the ordinary course of
business; or fail to timely assert any claim, cause of action or contract
right which it possesses against any third party or agree to settle or
compromise any such claim, cause of action or contract right except in any
case in the exercise of good business judgment and except for settlements or
compromises made in the reasonable exercise of business judgment in the
ordinary course of business.
8.9 CAPITAL DISTRIBUTIONS; RESTRICTIONS ON PAYMENTS TO STOCKHOLDERS.
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, make, or declare or incur any liability to make, any Capital
Distribution, except that:
(i) any Subsidiary of the Borrower may make Capital
Distributions to the Borrower or to a wholly owned Subsidiary of the Borrower;
(ii) the Borrower may make Capital Distributions to the
holders of its Series A Preferred Stock so long as: (A) the aggregate amount
distributed in any fiscal year to such holders shall not exceed the lesser of
$800,000 or 8% of the aggregate liquidation price of the then outstanding
Series A Preferred Stock; (B) prior to making any such distribution, the
Borrower shall have demonstrated to the satisfaction of the Agent that the
Borrower will be in compliance with all of the covenants contained herein
after giving effect to such distribution; (C) no Possible Default or Event of
Default exists at the time of making such distribution or would exist after
giving effect thereto; (D) prior to making any such distribution, the
Borrower shall have delivered to the Agent and the Co-Agent a certificate of
its chief financial officer in form and substance satisfactory to the Agent
which shall contain calculations demonstrating on a pro forma basis the
Borrower's compliance with the financial covenants set forth in this Section
8 after giving effect to such distribution; and (E) such distributions shall
not be made more frequently than four times per year;
(iii) the Borrower may make Capital Distributions to the
holders of its Series B Preferred Stock, so
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long as: (A) the aggregate amount distributed in any fiscal year to such
holders shall not exceed the lesser of (I) 6% of the aggregate liquidation
price of the then outstanding Series B Preferred Stock or (II) an amount
equal to the excess of Excess Cash Flow as of the end of the immediately
preceding year over the amount of the mandatory prepayment required to be
made in respect of such year pursuant to Section 2.7(b)(ii); (B) no such
Capital Distribution shall be made prior to the second anniversary of the
Closing Date; (C) prior to making any such distribution, the Borrower shall
have demonstrated to the satisfaction of the Agent that the Borrower will be
in compliance with all of the covenants contained herein after giving effect
to such distribution; (D) no Possible Default or Event of Default exists at
the time of making such distribution or would exist after giving effect
thereto; (E) prior to making any such distribution, the Borrower shall have
delivered to the Agent and the Co-Agent a certificate of its chief financial
officer in form and substance satisfactory to the Agent which shall contain
calculations demonstrating on a pro forma basis the Borrower's compliance
with the financial covenants set forth in this Section 8 after giving effect
to such distribution; and (F) such distributions shall not be made more
frequently than four times per year;
(iv) the Borrower may make Capital Distributions to the
holders of its Common Stock so long as: (A) the aggregate amount distributed
in any fiscal year to such holders of Common Stock shall not exceed
$1,000,000; (B) prior to making any such distribution, the Borrower shall
have demonstrated to the satisfaction of the Agent that the Borrower will be
in compliance with all of the covenants contained herein after giving effect
to such distribution; (C) no Possible Default or Event of Default exists at
the time of making such distribution or would exist after giving effect
thereto; (D) prior to making any such distribution, the Borrower shall have
delivered to the Agent and the Co-Agent a certificate of its chief financial
officer in form and substance satisfactory to the Agent which shall contain
calculations demonstrating on a pro forma basis the Borrower's compliance
with the financial covenants set forth in this Section 8 after giving effect
to such distribution; and (E) such distributions shall not be made more
frequently than four times per year;
(b) The Borrower shall not permit any of its Subsidiaries to agree
to or to be subject to any restriction on its ability to make Capital
Distributions or loans or loan repayments or other asset transfers to its
stockholders other than restrictions imposed by applicable law, the
restrictions set forth in this Section and the restrictions contained in the
Subordinated Note Indenture or any subordinated guaranties issued by the
Borrower's Subsidiaries pursuant thereto.
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8.10 DISPOSAL OF PROPERTY; MERGERS; ACQUISITIONS; REORGANIZATIONS.
(a) Except as provided in paragraphs (b) and (c) below, the
Borrower shall not, and shall not permit any of its Subsidiaries to, (i)
dissolve or liquidate; (ii) sell, lease, transfer or otherwise dispose of any
material portion of its properties and assets to any Person, except for (A)
the disposition of assets in the ordinary course of business in an aggregate
amount not to exceed $300,000 in any transaction or related series of
transactions, (B) the disposition of any asset which, in the good faith
exercise of its business judgment, the Borrower determines is no longer
useful in the conduct of its or its Subsidiaries' business, and (C) the
disposition of substantially all of the assets of the Porta Phone Business,
so long as in each such case the Borrower has complied with the provisions of
Section 2.7(b)(iii); (iii) be a party to any consolidation, merger,
recapitalization or other form of reorganization; (iv) make any acquisition
of all or substantially all the assets of any Person, or of a business
division or line of business of any Person, or of any other assets
constituting a going business; (v) create, acquire or hold any Subsidiary
(other than Subsidiaries existing on the date hereof and Subsidiaries created
pursuant to Permitted Acquisitions), or (vi) be or become a party to any
joint venture or other partnership.
(b) The Borrower may make the acquisition contemplated in the
Phipps Purchase Agreement. In addition, the Borrower or any of its wholly
owned Subsidiaries may make acquisitions of substantially all of the assets
of any television station or newspaper operation or of all of the capital
stock or other equity interests of a Person which owns a television station
or newspaper operation, subject to the satisfaction of the following
conditions (any acquisition which satisfies all of the following conditions
being referred to hereinafter as a "Permitted Acquisition"):
(i) any television station to be acquired (A) shall be
located in any of the top 125 United States markets, as ranked by Designated
Market Area as determined by Nielsen Media Research, (B) shall be a CBS, NBC
or ABC network affiliate and located in a market ranked 126 through 175, as
ranked by Designated Market Area as determined by Nielsen Media Research, or
(C) if permitted by law and the rules and regulations of the FCC, shall be an
affiliate of the Fox network and located in a market in which the Borrower or
any of its Subsidiaries owns a television station;
(ii) any newspaper to be acquired shall be a daily newspaper
with a minimum paid circulation of 25,000;
(iii) the Borrower shall have given to the Agent written
notice of such acquisition at least fifteen days
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prior to executing any binding commitment with respect thereto, which notice
shall state the additional amounts, if any, by which the Borrower proposes to
increase the dollar limitations set forth in Sections 8.4, 8.5 and 8.6; and
the structure of the transaction shall be acceptable to the Agent in form and
substance;
(iv) the Borrower shall have demonstrated to the satisfaction
of the Agent that the Borrower will be in compliance with all of the
covenants contained herein after giving effect to such acquisition and that
no Event of Default or Possible Default then exists or would exist after
giving effect to such acquisition, and the Borrower shall have delivered to
the Agent within ten days prior to the consummation of such acquisition an
acquisition report signed by an executive officer of the Borrower in form and
substance satisfactory to the Agent which shall contain (A) calculations
demonstrating on a pro forma basis the Borrower's compliance with the
financial covenants set forth in this Section 8 after giving effect to such
acquisition, (B) projections for the Borrower for a five year period after
the closing of such acquisition giving effect to the acquisition and
including a statement of sources and uses of funds for such acquisition
showing, among other things, the source of financing for the acquisition and
(C) if such acquisition is of a television station, a detailed engineering
report from the Borrower's engineer, acceptable in form and substance to the
Agent, as to the construction, engineering, installation and operation of the
station being acquired and its facilities and equipment, which certificate
shall also list any material equipment problems at such station and any
material upgrades of equipment which will, within six months of such
acquisition, be required at such Station;
(v) if such acquisition is of a television station that does
not have an affiliation agreement with ABC, CBS or NBC, the Borrower shall
negotiate in good faith with the Banks regarding a limitation, to be added as
a negative covenant to this Agreement, on the annual amount of its
Programming Obligations;
(vi) the agreement governing such acquisition and all related
documents and instruments shall be satisfactory to the Agent in form and
substance;
(vii) any FCC Licenses acquired in connection with such
acquisition shall be transferred immediately upon consummation of such
acquisition to a License Subsidiary or to a direct wholly owned Subsidiary of
the Borrower which shall have no other assets or liabilities;
(viii) the Borrower shall have delivered to the Agent UCC,
judgment and tax lien searches for each relevant
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jurisdiction with respect to the assets being acquired and shall have taken
any actions as may be necessary or requested by the Agent to grant to the
Agent, for the benefit of the Banks, perfected Liens in all assets, real and
personal, tangible and intangible, acquired by the Borrower or any of its
Subsidiaries in such acquisition pursuant to the Collateral Documents,
subject to no prior Liens except Permitted Liens;
(ix) if the Borrower acquires a Subsidiary or creates a
Subsidiary (including a License Subsidiary) pursuant to or in connection with
such acquisition,
(A) the Borrower shall, or shall cause its Subsidiary
which is the stockholder of such newly acquired or created Subsidiary to,
pledge to the Agent, for the benefit of the Banks, all of the stock or other
securities or equity interests of such acquired or created Subsidiary
pursuant to documentation in form and substance satisfactory to the Agent; and
(B) such acquired or created Subsidiary shall execute
and deliver to the Agent, for the benefit of the Banks, a guaranty of all of
the Obligations of the Borrower, in form and substance satisfactory to the
Agent, and shall grant to the Agent, for the benefit of the Banks, a first
priority, perfected lien or security interest in substantially all of its
assets, real and personal, tangible and intangible, subject to no prior Liens
except for Permitted Liens, pursuant to documentation in form and substance
satisfactory to the Agent; and
(x) the Borrower shall have delivered to the Agent evidence
reasonably satisfactory to the Agent to the effect that all approvals,
consents or authorizations required in connection with such acquisition
(including the formation of any License Subsidiary and the transfer of any
FCC Licenses to such Subsidiary) from any Licensing Authority or other
governmental authority shall have been obtained and that any consent of the
FCC shall have become a Final Order, and such opinions as the Agent may
reasonably request as to the Liens granted to the Agent, for the benefit of
the Banks, as required pursuant to this Section, as to any required
regulatory approvals for such acquisition and as to such other matters as the
Agent may reasonably request.
(c) The FCC, as a condition to its consent to the acquisition by
the Borrower of the Phipps Business, may require that the Borrower sell or
otherwise dispose of Stations WALB and WJHG. In such event, the Borrower
shall either exchange such Stations for other properties in a transaction
that otherwise satisfies the conditions of Section 8.10(b) or shall sell such
Stations for cash and apply the net proceeds of such sale in accordance with
the provisions of Section 2.7(b)(iii). If the Borrower transfers such
Stations to a trust to satisfy FCC
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requirements, the Borrower shall pledge to the Agent, for the benefit of the
Banks, all of its right, title and interest in and to any trust so created,
and the Borrower shall cause the trustee of any such trust to grant to the
Agent, for the benefit of the Banks, liens and security interests in
substantially all of the assets of such Stations as security for the
Obligations of the Borrower to the Agent and the Banks, in each case pursuant
to agreements, documents and instruments in form and substance satisfactory
to the Agent.
8.11 INVESTMENTS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, purchase or otherwise acquire, hold or invest in any
stock or other securities or evidences of indebtedness of, or any interest or
investment in, or make or permit to exist any loans or advances to, any other
Person, except:
(a) direct obligations of the United States Government maturing
within one year;
(b) certificates of deposit of a member bank of the Federal
Reserve System having capital, surplus and undivided profits in excess of
$2,000,000,000;
(c) any investment in commercial paper which at the time of such
investment is assigned the highest quality rating in accordance with the
rating systems employed by either Moody's Investors Service, Inc. or Standard
& Poor's Corporation;
(d) money market funds;
(e) securities received pursuant to a plan of reorganization
adopted in an insolvency proceeding or otherwise in immaterial amounts in
exchange for accounts receivable of the entity which is the subject of such
insolvency proceeding generated in the ordinary course of the Borrower's or
any of its Subsidiaries' business; and
(f) investments in its existing Subsidiaries and in Subsidiaries
created pursuant to Section 8.10(b).
8.12 AMENDMENT OF GOVERNING DOCUMENTS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, amend, modify or supplement its
Certificate or Articles of Incorporation, By-Laws or other organizational or
governing documents or any shareholders or security holders agreement, unless
required by law, in any manner that is adverse to the interests of the Banks
(as may be determined by the Agent).
8.13 FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. The Borrower shall not permit the Leverage
Ratio at any time during any period listed in
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Column A below to be greater than the ratio set forth in Column B below
opposite such period:
COLUMN A COLUMN B
- -------- --------
PERIOD: PERMITTED RATIO:
- ------ ---------------
the date hereof through March 6.50:1.0
31, 1997:
April 1, 1997, through December 6.25:1.0
31, 1997:
January 1, 1998, through 6.00:1.0
September 30, 1998:
October 1, 1998, through June 5.75:1.0
30, 1999:
July 1, 1999, through March 31, 5.50:1.0
2000:
April 1, 2000, through December 5.25:1.0
31, 2000:
January 1, 2001, and 5.00:1.0
thereafter:
PROVIDED, HOWEVER, that if, but only if, the ratio of the sum of Total Debt as
of the Closing Date (after giving effect to the closings under the Phipps
Purchase Agreement and this Agreement) plus $10,000,000 to Operating Cash Flow
for the twelve month period then most recently ended for which financial
statements are available (the "Special Leverage Ratio") exceeds 6.5 to 1.0,
then, notwithstanding the foregoing provisions of this Section 8.13(a), the
Borrower may permit the Leverage Ratio at any time during the period from the
Closing Date through December 30, 1996, to exceed 6.5 to 1.0, so long as (i) the
Leverage Ratio does not exceed at any time during such period the lesser of the
Special Leverage Ratio and 6.75 to 1.0, and (ii) the Leverage Ratio as of the
Closing Date (after giving effect to the closings under the Phipps Purchase
Agreement and this Agreement) is less than or equal to 6.5 to 1.0.
(b) SENIOR DEBT TO OPERATING CASH FLOW RATIO. The Borrower shall
not permit the ratio of the sum of the principal amount of the Loans
outstanding and the aggregate stated amount of the outstanding Letters of
Credit as of any date to Operating Cash Flow for the four quarter period then
ended or most recently ended to be greater than 3.5 to 1.00.
(c) OPERATING CASH FLOW TO INTEREST EXPENSE. The Borrower shall
not permit the ratio of Operating Cash Flow for
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any four fiscal quarter period ending on or prior to September 30, 1997, to
Interest Expense for such four quarter period to be less than 1.40 to 1.00;
the Borrower shall not permit the ratio of Operating Cash Flow for any four
fiscal quarter period ending after September 30, 1997, but on or before
September 30, 1999, to Interest Expense for such four quarter period to be
less than 1.50 to 1.00; and the Borrower shall not permit the ratio of
Operating Cash Flow for any four fiscal quarter period ending after September
30, 1999, to Interest Expense for such four quarter period to be less than
2.00 to 1.00.
(d) PRO FORMA DEBT SERVICE COVERAGE RATIO. The Borrower shall not
permit the ratio of Operating Cash Flow for any four fiscal quarter period
ending on or prior to September 30, 1997, to Pro Forma Debt Service as of the
end of such four quarter period to be less than 1.10 to 1.00; the Borrower
shall not permit the ratio of Operating Cash Flow for any four fiscal quarter
period ending after September 30, 1997, but on or prior to September 30,
2000, to Pro Forma Debt Service as of the end of such four quarter period to
be less than 1.15 to 1.00; and the Borrower shall not permit the ratio of
Operating Cash Flow for any four fiscal quarter period ending after September
30, 2000, to Pro Forma Debt Service as of the end of such four quarter period
to be less than 1.20 to 1.00.
(e) FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit the
Fixed Charge Coverage Ratio as of the end of any fiscal quarter to be less
than 1.05 to 1.00.
8.14 MANAGEMENT AGREEMENTS AND FEES.
(a) Except for agreements permitted pursuant to Section 8.14(b),
the Borrower shall not, and shall not permit any of its Subsidiaries to, make
or enter into, or pay any management fees pursuant to, any management or
service agreement or joint operating agreement whereby management,
supervision or control of its business, or any significant aspect thereof,
shall be delegated to or placed in any Person other than the Borrower, an
employee of the Borrower or such Subsidiary. The Borrower shall not, and
shall not permit any of its Subsidiaries to, make or enter into, or receive
any management fees pursuant to, any management or service agreement or joint
operating agreement whereby management, supervision or control of the
business of any other Person (other than a Subsidiary of the Borrower), or
any significant aspect thereof, shall be delegated to or placed in the
Borrower or any of its Subsidiaries.
(b) Without the prior written consent of the Agent, the Borrower
shall not, and shall not permit any of its Subsidiaries to, enter into, or
otherwise be obligated under any local marketing agreement, time brokerage
agreement, program service agreement, joint sales agreement, facilities
leasing agreement or similar arrangement.
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8.15 FISCAL YEAR. The Borrower shall not, and shall not permit any
Subsidiary to, change its fiscal year.
8.16 ERISA. Neither the Borrower nor any member of the Controlled
Group shall fail to make any contributions which are required pursuant to the
terms of any Plan or any Benefit Arrangement. Neither the Borrower nor any
member of the Controlled Group shall contribute to or agree to contribute to
any Plan which is (a) subject to the minimum funding requirements under ERISA
Section 302 or Code Section 412; (b) a multiemployer plan (as defined in
ERISA Section 4001(a)(3)); (c) a defined benefit plan (as defined under ERISA
Section 3(35) or Code Section 414(j)); (d) a multiple employer plan (as
defined in ERISA Section 4063); or (e) a multiple employer welfare
arrangement (as defined in ERISA Section 3(40)).
8.17 AFFILIATES. The Borrower shall not, and shall not permit any of
its Subsidiaries to, enter into any transaction or agreement with any
Affiliate of the Borrower or pay any compensation or salary to any such
Person unless such transaction or agreement is in the ordinary course of and
pursuant to the reasonable requirements of the business of the Borrower or
any of its Subsidiaries and the terms of such transaction or agreement are
not less favorable to the Borrower or such Subsidiary than could be obtained
in an arms-length transaction with an unaffiliated third party or unless the
amount paid to such person is not in excess of the fair value of the services
rendered by such person.
8.18 CHANGE OF NAME, IDENTITY OR CORPORATE STRUCTURE. The Borrower
shall not, and shall not permit any of its Subsidiaries to, change its name,
identity or corporate structure without thirty days prior written notice to
the Agent.
8.19 AMENDMENTS OR WAIVERS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, amend, alter or modify, or consent to or
suffer any amendment, alteration or modification of, (a) the Subordinated
Note Indenture or any notes or other documents or agreements issued or
entered into pursuant to the Subordinated Note Indenture without the prior
written consent of all of the Banks if such amendment, alteration or
modification affects the subordination provisions thereof or imposes any more
onerous term or condition on the Borrower or any of its Subsidiaries than is
contained in such agreement, note or document as of the date hereof or is
otherwise materially adverse to the Borrower,
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any of its Subsidiaries or the Banks, or without the prior written consent of
the Required Banks if such amendment, alteration or modification does not
affect the subordination provisions thereof or impose any more onerous term
or condition on the Borrower or any of its Subsidiaries than is contained in
such agreement, note or document as of the date hereof and is not otherwise
materially adverse to the Borrower, any of its Subsidiaries or the Banks, in
either case as reasonably determined by the Agent, or (b) without the prior
written consent of the Agent, the Phipps Purchase Agreement, any License or
any Operating Agreement or other material contract to which the Borrower or
such Subsidiary is a party except for any amendments, alterations or
modifications to any License or Operating Agreement which could not
reasonably be expected to have a Material Adverse Effect. The Agent shall
deliver to the Banks promptly after its receipt thereof a copy of each
amendment or modification to the Phipps Purchase Agreement.
8.20 ISSUANCE OR TRANSFER OF CAPITAL STOCK AND OTHER EQUITY INTERESTS.
The Borrower shall not issue any stock that by its terms (or the terms of any
security into which it is convertible or for which it is exchangeable), or
upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or redeemable at the
option of the holder thereof, in whole or in part or that by its terms is
entitled to a mandatory distribution or dividend. The Borrower shall not
permit any of its Subsidiaries to sell or issue any capital stock,
partnership interests or other equity interests or any warrants, options or
other securities convertible into or exercisable for any capital stock,
partnership interests or other equity interests, and the Borrower shall not
permit any of its Subsidiaries to permit the transfer of any capital stock,
partnership interests or other such equity interests.
8.21 CHANGE IN BUSINESS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, change the nature of its business in any material
respect. Neither the Borrower nor any of its Subsidiaries shall engage in
any business other than the ownership and operation of the Stations, the
Newspapers, the Porta Phone Business and the Satellite Broadcasting Business
acquired pursuant to the Phipps Purchase Agreement and other activities
incidental or related thereto.
8.22 REGULATION U. The Borrower shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, (a) apply any part of the
proceeds of the Loans to the purchasing or carrying of any "margin stock"
within the meaning of Regulations G, T, U or X of the Federal Reserve Board,
or any regulations, interpretations or rulings thereunder, (b) extend credit
to others for the purpose of purchasing or carrying any such margin stock, or
(c) retire Indebtedness which was incurred to purchase or carry any such
margin stock.
8.23 LICENSE SUBSIDIARIES. The Borrower shall not, and shall not
permit any Subsidiary (other than a License Subsidiary) to, hold any FCC
Licenses, but rather shall cause all FCC Licenses to be issued to and held by
License Subsidiaries. The Borrower shall not permit any License Subsidiary
to (a)
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incur, create, assume or permit to exist any Indebtedness (other than
pursuant to the License Subsidiary Guaranty, the License Subsidiary Security
Agreement and the subordinated guaranty executed by such License Subsidiary
pursuant to the Subordinated Note Indenture), (b) incur, create, assume or
permit to exist any Lien of any nature whatsoever on any property or assets
now owned or hereafter acquired by it except in favor of the Agent, for the
benefit of the Banks, (c) make any Capital Expenditures, (d) acquire any
assets other than the Licenses, (e) conduct any business, or (f) hire or
engage any employees.
8.24 SUBORDINATED DEBT. The Borrower shall not redeem, purchase,
discharge, pay, prepay or defease all or any portion of the principal or
interest of any Subordinated Debt, prior to the indefeasible payment in full
in cash of all Obligations, except that (a) the Borrower may pay interest on
the Subordinated Debt in accordance with the provisions of the Subordinated
Note Indenture as in effect on the date hereof or as amended in accordance
with the provisions of Section 8.19 so long as no Event of Default or
Possible Default then exists, and (b) the Borrower may make open market
purchases of notes issued pursuant to the Subordinated Note Indenture (to the
extent permitted in, and in accordance with the provisions of, the
Subordinated Note Indenture as in effect on the date hereof) so long as: (i)
prior to making any such purchase, the Borrower shall have demonstrated to
the satisfaction of the Agent that the Borrower will be in compliance with
all of the covenants contained herein after giving effect to such purchase;
(ii) no Possible Default or Event of Default exists at the time of making
such distribution or would exist after giving effect thereto; and (iii) prior
to making any such purchase, the Borrower shall have delivered to the Agent a
certificate of its chief financial officer in form and substance satisfactory
to the Agent which shall contain calculations demonstrating on a pro forma
basis the Borrower's compliance with the financial covenants set forth in
this Section 8 after giving effect to such purchase. The Borrower shall not
take any action in violation of any of the provisions of Article X of the
Subordinated Note Indenture and shall not permit any Subsidiary to take any
action in violation of any of the provisions of Article XI of the
Subordinated Note Indenture.
SECTION 9. EVENTS OF DEFAULT.
The occurrence of any one or more of the following events, whether
voluntarily or involuntarily or by operation of law, shall constitute an
Event of Default hereunder:
9.1 NON-PAYMENT. The Borrower shall fail to pay when due, whether by
acceleration of maturity or otherwise, any installment of principal due
hereunder or under any Note or shall
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fail to pay within three days of the date when due, whether by acceleration
of maturity or otherwise, any installment of interest due hereunder or under
any Note or any fee or other payment obligation in respect of the Obligations
or payable pursuant to the Fee Letter.
9.2 FAILURE OF PERFORMANCE IN RESPECT OF OTHER OBLIGATIONS.
(a) The Borrower shall fail to observe, perform or be in
compliance with any of the provisions of Section 8, Section 7.1, Section 7.3,
Section 7.8 or the first sentence of Section 7.2; or
(b) the Borrower, any of its Subsidiaries or any other party to a
Collateral Document (other than the Agent or a Bank) shall fail to observe,
perform or be in compliance with the terms of any Obligation, covenant or
agreement (other than those referred to in Section 9.1, Section 8, Section
7.1, Section 7.3, Section 7.8 or the first sentence of Section 7.2) to be
observed, performed or complied with by the Borrower, any of its Subsidiaries
or such other party hereunder or under any Collateral Document and, PROVIDED
that such failure is of a type which can be cured, such failure shall
continue and not be cured for thirty days after: (i) written notice thereof
from the Agent or a Bank; or (ii) the Agent or the Banks are notified thereof
or should have been notified thereof pursuant to the provisions of Section
7.6 hereof, whichever is earlier.
9.3 BREACH OF WARRANTY. Any financial statement, representation,
warranty, statement or certificate made or furnished by the Borrower, any of
its Subsidiaries or any other party to a Collateral Document (other than the
Agent or a Bank) in or in connection with this Agreement or any Collateral
Document, or as an inducement to the Agent or the Banks to enter into this
Agreement and the Collateral Documents, including, without limitation, those
in Section 5 above, shall have been false, incorrect or incomplete when made
or deemed made in any material respect.
9.4 CROSS-DEFAULTS. Any Change in Control or Event of Default, as
those terms are defined in the Subordinated Note Indenture as in effect as of
the date hereof, shall occur; or the Borrower or any of its Subsidiaries
shall default in any payment due on any Total Debt in excess of $250,000 and
such default shall continue for more than the period of grace, if any,
applicable thereto; or the Borrower or any of its Subsidiaries shall default
in the performance of or compliance with any term of any evidence of such
Total Debt or of any mortgage, indenture or other agreement relating thereto,
and any such default shall continue for more than the period of grace, if
any, specified
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therein if such default causes, or permits the holder thereof to cause, the
acceleration of such Total Debt.
9.5 ASSIGNMENT FOR BENEFIT OF CREDITORS. The Borrower or any of its
Subsidiaries shall make an assignment for the benefit of its creditors, or
shall admit its insolvency or shall fail to pay its debts generally as such
debts become due.
9.6 BANKRUPTCY. Any petition seeking relief under Title 11 of the
United States Code, as now constituted or hereafter amended, shall be filed
by or against the Borrower or any of its Subsidiaries or any proceeding shall
be commenced by or against the Borrower or any of its Subsidiaries with
respect to relief under the provisions of any other applicable bankruptcy,
insolvency or other similar law of the United States or any State providing
for the reorganization, winding-up or liquidation of Persons or an
arrangement, composition, extension or adjustment with creditors; PROVIDED,
HOWEVER, that no Event of Default shall be deemed to have occurred if any
such involuntary petition or proceeding shall be discharged within sixty days
of its filing or commencement.
9.7 APPOINTMENT OF RECEIVER; LIQUIDATION. Other than in connection
with a proceeding described in Section 9.6, a receiver or trustee shall be
appointed for the Borrower or any of its Subsidiaries or for any substantial
part of its assets (except as expressly permitted in Section 8.10(c)), and
such receiver or trustee shall not be discharged within sixty days of his
appointment; any proceedings shall be instituted for the dissolution or the
full or partial liquidation of the Borrower or any of its Subsidiaries and
such proceedings shall not be dismissed or discharged within sixty days of
their commencement; or the Borrower or any of its Subsidiaries shall
discontinue its business.
9.8 JUDGMENTS. The Borrower or any of its Subsidiaries shall incur
final judgments for the payment of money aggregating at any one time in
excess of $250,000 (to the extent not covered by insurance) and shall not
discharge (or make adequate provision for the discharge of) the same within a
period of thirty days unless, pending further proceedings, execution thereon
has been effectively stayed; or a non-monetary judgment or order shall be
rendered against the Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect, and there shall be
any period in excess of thirty consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect.
9.9 IMPAIRMENT OF COLLATERAL; INVALIDATION OF ANY LOAN DOCUMENT. (i) A
creditor of the Borrower or of any of its Subsidiaries shall obtain
possession of any significant portion of the collateral for the Obligations
by any means, including,
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without limitation, levy, distraint, replevin or self-help, or any creditor
shall establish or obtain any right in such collateral which is equal or
senior to a Lien of the Agent, for the benefit of the Banks, in such
collateral; or (ii) any material damage to, or loss, theft or destruction of,
any material collateral for the Loans shall occur, except to the extent such
loss, damage or injury is covered by insurance; or (iii) the Agent, for the
benefit of the Banks, shall cease to have a first priority perfected lien
(except for Permitted Liens) in all of the issued and outstanding capital
stock of each Subsidiary of the Borrower and in substantially all of the
properties and assets of the Borrower and each Subsidiary; or (iv) any Lien
granted or created or purported to be granted or created by this Agreement or
any Collateral Document shall cease or fail to be perfected with respect to
any significant portion of the collateral purported to be covered thereby; or
(v) this Agreement, any Note or any Collateral Document ceases to be a legal,
valid and binding agreement or obligation enforceable against any party
thereto (including the Banks or the Agent) in accordance with its terms, or
shall be terminated, invalidated, set aside or declared ineffective or
inoperative and such cessation, termination, invalidity, set aside or
declaration could reasonably be expected to have a Material Adverse Effect;
or (vi) any party to any Collateral Document shall contest or deny the
validity or enforceability of such Collateral Document or any lien, security
interest or obligation purported to be created thereby.
9.10 TERMINATION OF LICENSE OR OPERATING AGREEMENT. Subject to Section
8.10(c), the FCC or any other Licensing Authority shall (a) revoke,
terminate, substantially and adversely modify or fail to renew any material
License, or (b) designate any material License for hearing or commence
proceedings to suspend, revoke, terminate or substantially and adversely
modify any such License and such proceedings shall not be dismissed or
discharged within sixty days; or any Operating Agreement or any other
agreement which is necessary to the operation of a Station, a Newspaper, the
Porta Phone Business or the Satellite Broadcasting Business shall be revoked
or terminated or materially, adversely modified and not replaced by a
substitute acceptable to the Required Banks within thirty days of such
revocation, termination or modification.
9.11 CHANGE OF CONTROL. (i) any Person (or group of
Persons) is or becomes the "beneficial owner" (within the meaning of Rules 13d-3
and 13d-5 under the federal Securities Exchange Act of 1934, as amended),
directly or indirectly, of a percentage of the common voting stock of the
Borrower greater than 35%, other than J. Mack Robinson or Robert S. Prather,
Jr., the spouse and lineal descendants or either such individual, the estate,
executor, administrator, or other personal representative of either such
individual, or any trust created for either such
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individual or for the spouse or lineal descendants of either such individual;
or (ii) during any period of twenty-four consecutive months, individuals who
at the beginning of such period constituted the Board of Directors of the
Borrower (together with any new directors whose election by such Board or
whose nomination for election by the stockholders of the Borrower was
approved by a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors then in office; or (iii) except as
permitted pursuant to this Agreement, the Borrower shall cease or fail to
own, directly or indirectly, beneficial and legal title to all of the issued
and outstanding capital stock of each of its Subsidiaries or any Subsidiary
of the Borrower shall cease to be a wholly owned Subsidiary of the Borrower.
9.12 CONDEMNATION. Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of any
substantial portion of the assets of the Borrower or any of its Subsidiaries
pursuant to a final, non-appealable order.
9.13 CESSATION OF OPERATIONS. The Borrower's on-the-air broadcast
operations at any Station shall be interrupted at any time for more than
forty-eight hours, whether or not consecutive, during any period of five
consecutive days, unless (a) the broadcasting operations of all or
substantially all of the television stations in the relevant market also are
interrupted for a like period of time, or (b) the Borrower shall be receiving
during such period of interruption insurance sufficient to assure that its
per diem Operating Cash Flow during such period is a least equal to that
which could reasonably have been expected during such period but for the
interruption.
9.14 SUBORDINATION. The Borrower or any holder of Subordinated Debt
shall fail to comply with the agreement or instrument governing or evidencing
such Subordinated Debt or any separate subordination agreement, and the Agent
shall have determined that such failure to comply could reasonably be
expected to have a material adverse effect on the Borrower or any of its
Subsidiaries or on its ability to perform its obligations hereunder or under
any of the Collateral Documents or on the rights and remedies of the Agent
and the Banks hereunder or under the Collateral Documents.
9.15 MATERIAL ADVERSE EFFECT. Any Material Adverse Effect shall occur.
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SECTION 10. REMEDIES.
Notwithstanding any contrary provision or inference herein or elsewhere,
10.1 OPTIONAL DEFAULTS. If any Event of Default referred to in Section
9.1 through and including Section 9.4 or Section 9.8 through and including
Section 9.15 shall occur, the Issuing Bank shall not be required to issue any
additional Letters of Credit, and the Agent, with the consent of the Required
Banks, upon written notice to the Borrower, may
(a) terminate the Commitments and the credit hereby established
and forthwith upon such election the obligations of the Banks to make any
further Loans hereunder (other than Loans resulting from the funding of
Letters of Credit) immediately shall be terminated, and/or
(b) accelerate the maturity of the Loans and all other
Obligations, whereupon all Obligations shall become and thereafter be
immediately due and payable in full without any presentment or demand and
without any further or other notice of any kind, all of which are hereby
waived by the Borrower, and/or
(c) demand the payment to the Issuing Bank of the aggregate stated
amount of the outstanding Letters of Credit, which amount the Issuing Bank
shall hold as security for the obligations incurred under the Letters of
Credit.
10.2 AUTOMATIC DEFAULTS. If any Event of Default referred to in
Sections 9.5-9.7 shall occur,
(a) the Commitments and the credit hereby established shall
automatically and forthwith terminate, and the Banks thereafter shall be
under no obligation to grant any further Loans hereunder (other than Loans
resulting from the funding of Letters of Credit), and
(b) the principal of and interest on the Notes, then outstanding,
and all of the other Obligations shall thereupon become and thereafter be
immediately due and payable in full, all without any presentment, demand or
notice of any kind, which are hereby waived by the Borrower, and
(c) the Issuing Bank shall not be required to issue any additional
Letters of Credit, and the aggregate stated amount of the outstanding Letters
of Credit shall be immediately payable by the Borrower to the Issuing Bank,
which amount the Issuing Bank shall hold as security for the obligations
incurred under the Letters of Credit.
10.3 PERFORMANCE BY THE BANKS. If at any time after the occurrence and
during the continuance of an Event of Default
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the Borrower or any of its Subsidiaries fails or refuses to pay or perform
any material obligation or duty to any third Person, except for payments
which are the subject of bona fide disputes in the ordinary course of
business, the Agent or the Banks may, in their sole discretion, but shall not
be obligated to, pay or perform the same on behalf of the Borrower or such
Subsidiary, and the Borrower shall promptly repay all amounts so paid, and
all costs and expenses so incurred. This repayment obligation shall become
one of the Obligations of the Borrower hereunder and shall bear interest at
the Default Interest Rate.
10.4 OTHER REMEDIES. Upon the occurrence of an Event of Default, the
Agent and the Banks may exercise any other right, power or remedy as may be
provided herein, in the Notes or in any other Collateral Document, or as may
be provided at law or in equity, including, without limitation, the right to
recover judgment against the Borrower for any amount due either before,
during or after any proceedings for the enforcement of any security or any
realization upon any security.
10.5 ENFORCEMENT AND WAIVER BY THE BANKS. The Agent and the Banks
shall have the right at all times to enforce the provisions of this Agreement
and all Collateral Documents in strict accordance with the terms hereof and
thereof, notwithstanding any conduct or custom on the part of the Agent or
the Banks in refraining from so doing at any time, unless the Agent or the
Banks shall have waived such enforcement in writing in respect of a
particular instance. The failure of the Agent or the Banks at any time to
enforce their rights under such provisions shall not be construed as having
created a custom or course of dealing in any way contrary to the specific
provisions of this Agreement or the Collateral Documents, or as having in any
way modified or waived the same. All rights, powers and remedies of the
Agent and the Banks are cumulative and concurrent and the exercise of one
right, power or remedy shall not be deemed a waiver or release of any other
right, power or remedy.
SECTION 11. THE AGENT.
11.1 APPOINTMENT. KeyBank is hereby appointed Agent hereunder, and
each of the Banks irrevocably authorizes the Agent to act as the agent of
such Bank. The Agent agrees to act as such upon the express conditions
contained in this Section 11. NationsBank, N.A. (South) is hereby appointed
Co-Agent. NationsBank, N.A. (South), as Co-Agent, shall have no rights or
obligations hereunder or under any of the Collateral Documents in its
capacity as Co-Agent. Neither the Agent nor the Co-Agent shall have a
fiduciary relationship in respect of any Bank by reason of this Agreement.
11.2 POWERS. The Agent shall have and may exercise such powers
hereunder as are specifically delegated to it by the
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terms hereof, together with such powers as are reasonably incidental thereto.
The Agent shall not have any implied duties or any obligation to the Banks
to take any action hereunder except any action specifically provided by this
Agreement to be taken by the Agent.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, affiliates, agents or employees shall be liable to the Banks or any
Bank for any action taken or omitted to be taken by it or them hereunder or
in connection herewith except for its or their own gross negligence or wilful
misconduct. Without limiting the foregoing, neither the Agent nor the
Co-Agent nor any of their respective directors, officers, affiliates, agents
or employees shall be responsible for, or have any duty to examine (a) the
genuineness, execution, validity, effectiveness, enforceability, value or
sufficiency of this Agreement, any Collateral Document, or any other document
or instrument furnished pursuant to or in connection with this Agreement or
any Collateral Document, (b) the collectibility of any amounts owed by the
Borrower, (c) any recitals, statements, reports, representations or
warranties made in connection with this Agreement or any Collateral Document,
(d) the performance or satisfaction by the Borrower or any Subsidiary of any
covenant or agreement contained herein or in any Collateral Document, (e) any
failure of any party to this Agreement to receive any communication sent,
including any telegram, teletype, bank wire, cable, radiogram or telephone
message sent or any writing, application, notice, report, statement,
certificate, resolution, request, order, consent letter or other instrument
or paper or communication entrusted to the mails or to a delivery service, or
(f) the assets or liabilities or financial condition or results of operations
or business or credit-worthiness of the Borrower or any of its Subsidiaries.
The Agent shall not be bound to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement or any Collateral Document.
11.4 ACTION ON INSTRUCTIONS OF THE BANKS. The Agent shall not be
required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting
or refraining from acting) upon the instructions of the Required Banks
(subject to Section 11.12 hereof), and such instructions shall be binding
upon all the Banks and all holders of the Notes; PROVIDED, HOWEVER, that the
Agent shall not be required to take any action which exposes it to personal
liability or which is contrary to this Agreement or applicable law. The
foregoing provisions of this Section 11.4 shall not limit in any way the
exercise by any Bank of any right or remedy granted to such Bank pursuant to
the terms of this Agreement or any Collateral Document. Except as otherwise
expressly provided herein, any reference in this Agreement to action by the
Banks shall be deemed to be a reference to the Required Banks.
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11.5 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of
its duties as Agent hereunder by or through employees, agents and
attorneys-in-fact and shall not be answerable to the Banks, except as to
money or securities received by it or its authorized agents, for the default
or misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
11.6 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper, document or other communication believed by it to
be genuine and correct and to have been signed or sent by the proper person
or persons, and, with respect to legal matters, upon the opinion of counsel
selected by the Agent, which counsel may be employees of the Agent,
concerning all matters pertaining to the agency hereby created and its duties
hereunder.
11.7 AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Banks agree to
reimburse and indemnify the Agent (which indemnification shall be shared by
the Banks ratably in proportion to their respective Ratable Shares of the
Loans) (a) for any amounts not reimbursed by the Borrower for which the Agent
is entitled to reimbursement by the Borrower hereunder or under any
Collateral Document, (b) for any other expenses reasonably incurred by the
Agent on behalf of the Banks, in connection with the preparation, execution,
delivery, administration, amendment or enforcement hereof or of any of the
Collateral Documents and (c) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising
out of this Agreement, any Collateral Document or any other document related
hereto or thereto or the transactions contemplated hereby or the enforcement
of any of the terms hereof or thereof or of any such other documents,
PROVIDED that no Bank shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent.
11.8 RIGHTS AS A BANK. With respect to its Ratable Share of the
Commitments, the Loans made by it, the Notes issued to it, and the Letters of
Credit issued by it, each of the Agent and the Co-Agent shall have the same
rights and powers hereunder as any Bank and may exercise the same as though
it were not the Agent or the Co-Agent, as the case may be, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent and Co-Agent in their individual capacities. Each of the Agent and the
Co-Agent may accept deposits from, lend money to, and generally engage in any
kind of banking or trust business with the Borrower or any of its
Subsidiaries as if it were not the Agent or the Co-Agent, respectively
hereunder.
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11.9 BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement and the other Collateral Documents.
Each Bank also acknowledges that it will, independently and without reliance
upon the Agent or any other Bank and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement and the other
Collateral Documents. The Agent shall not be required to keep the Banks
informed as to the performance or observance by the Borrower and its
Subsidiaries of this Agreement or any other document referred to or provided
for herein or to inspect the properties or books of the Borrower or any of
its Subsidiaries. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower or any of its Subsidiaries which may
come into its possession.
11.10 SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to the Banks. Upon any such resignation, the Required
Banks shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Required Banks and shall have
accepted such appointment within thirty days after the notice of resignation,
then the retiring Agent may appoint a successor Agent. Such successor Agent
shall be a commercial bank having capital and retained earnings of at least
$500,000,000. Upon the acceptance of any appointment as the Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder
as the Agent, the provisions of this Section 11 shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent hereunder.
11.11 RATABLE SHARING. All principal and interest payments on Loans
and commitment fees received by the Agent shall be remitted to the Banks in
accordance with their Ratable Shares. Any amounts received by the Agent or
any other Bank upon the sale of any collateral for the Loans or upon the
exercise of any remedies hereunder or under any of the Collateral Documents
or upon the exercise of any right of setoff shall be remitted to the Banks in
accordance with their Ratable Shares of the Loans; PROVIDED, HOWEVER, that,
solely for purposes of the sharing of any amounts received by the Agent or
any other Bank, if at the time of any such receipt the Borrower has defaulted
under any
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agreements regarding Rate Hedging Obligations entered into pursuant
to Section 7.12 with any Bank or any Affiliate of any Bank, then the Ratable
Share of the affected Bank shall be proportionately increased and the Ratable
Shares of the other Banks shall be proportionately decreased based upon the
amount due to the affected Bank (or such Bank's Affiliate) pursuant to such
agreements. If any Bank shall obtain any payment hereunder (whether
voluntary, involuntary, through exercise of any right of set-off or
otherwise) in excess of its Ratable Share, then such Bank shall immediately
remit such excess to the other Banks pro rata.
11.12 ACTIONS BY THE AGENT AND THE BANKS. The Agent shall take formal
action following the occurrence of a Possible Default or an Event of Default
only upon the agreement of the Required Banks; PROVIDED, HOWEVER, that if the
Agent gives notice to the Banks of a Possible Default or an Event of Default,
and the Required Banks cannot agree (which agreement shall not be
unreasonably withheld) on a mutual course of action within thirty days
following such notice, the Agent may (but shall not be required to) pursue
such legal rights and remedies against the Borrower as it deems necessary and
appropriate to protect the Banks and any collateral under the circumstances.
SECTION 12. MISCELLANEOUS.
12.1 CONSTRUCTION. The provisions of this Agreement shall be in
addition to those of the Collateral Documents and to those of any other
guaranty, security agreement, note or other evidence of the liability
relating to the Borrower held by the Banks, all of which shall be construed
as complementary to each other. Nothing contained herein shall prevent the
Agent or the Banks from enforcing any or all of such instruments in
accordance with their respective terms. Each right, power or privilege
specified or referred to in this Agreement or in any Collateral Document is
in addition to any other rights, powers or privileges that the Agent or the
Banks may otherwise have or acquire by operation of law, by other contract or
otherwise. No course of dealing in respect of, nor any omission or delay in
the exercise of, any right, power or privilege by the Agent or the Banks
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any further or other exercise thereof or of any other, as
each right, power or privilege may be exercised independently or concurrently
with others and as often and in such order as the Agent or the Banks may deem
expedient. Notwithstanding any other provision of this Agreement, the
Borrower shall not be required to pay any amount of interest pursuant hereto
which is in excess of the maximum amount permitted by law.
12.2 FURTHER ASSURANCE. From time to time, the Borrower shall execute
and deliver to the Banks, and shall cause
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its Subsidiaries to execute and deliver to the Banks, such additional
documents and take such actions as the Agent may reasonably require to carry
out the purposes of this Agreement or any of the Collateral Documents, or to
preserve and protect the rights of the Agent and the Banks hereunder or
thereunder.
12.3 EXPENSES OF THE AGENT AND THE BANKS; INDEMNIFICATION.
(a) Whether or not the transactions contemplated by this Agreement
are consummated, the Borrower shall pay the costs and expenses, including the
reasonable fees and disbursements of the Agent's special counsel and of the
Co-Agent's special counsel, incurred by the Agent, the Co-Agent and the Banks
in connection with (i) the negotiation, preparation, amendment or enforcement
of this Agreement and the Collateral Documents and any amendment or
modification thereof and the closing of the transactions contemplated hereby
and thereby; (ii) the perfection of the Liens granted pursuant hereto and
pursuant to the Collateral Documents; (iii) the making of the Loans and the
issuance of the Letters of Credit hereunder; (iv) the negotiation,
preparation or enforcement of any other document in connection with this
Agreement, the Collateral Documents or the Loans made hereunder; (v) any
proceeding brought or formal action taken by the Agent or the Banks to
enforce any provision of this Agreement or any Collateral Document, or to
enforce or exercise any right, power or remedy hereunder or thereunder; or
(vi) any action which may be taken or instituted by any Person against the
Agent or any Bank as a result of any of the foregoing; PROVIDED, HOWEVER,
that the Borrower shall not be responsible for the legal fees of any Bank
other than the Agent and the Co-Agent in respect of any period prior to the
occurrence of a Possible Default. The estimated fees and expenses of the
Agent's special counsel and of the Co-Agent's special counsel through the
Closing shall be paid on the Closing Date.
(b) The Borrower hereby indemnifies and holds harmless the Agent
and each Bank and their respective directors, officers, employees, agents,
counsel, subsidiaries and affiliates (the "Indemnified Persons") from and
against any and all claims, losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, reasonable
attorneys fees) which may be imposed on, incurred by, or asserted against any
Indemnified Person in any way relating to or arising out of this Agreement,
the Collateral Documents, or any of them, or the Loans made pursuant hereto
or the Letters of Credit issued pursuant hereto, or the use of the proceeds
thereof or any of the transactions contemplated hereby or thereby or the
ownership or operation of the Stations, the Newspapers, the Porta Phone
Business or the Satellite Broadcasting Business or any of the other assets or
businesses of the Borrower or its Subsidiaries or the breach by the Borrower
or any of its Subsidiaries of any of
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the representations, warranties, covenants and agreements contained herein or
in any Collateral Document; PROVIDED, HOWEVER, that the Borrower shall not be
liable to any Indemnified Person, if there is a final non-appealable judicial
determination that such claims, losses, liabilities, obligations, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulted solely from the gross negligence or willful misconduct of such
Indemnified Person.
12.4 NOTICES. Except as otherwise expressly provided
herein, all notices, demands and requests required or permitted to be given
under the provisions of this Agreement shall be in writing and shall be deemed
to have been duly delivered and received (a) on the date of personal delivery,
(b) on the date of receipt (as shown on the return receipt) if mailed by
registered or certified mail, postage prepaid and return receipt requested, (c)
on the next business day after delivery to a courier service that guarantees
delivery on the next business day if the conditions to the courier's guarantee
are complied with, or (d) on the date of receipt by telecopy, in each case
addressed as follows:
TO THE AGENT:
KeyBank National Association
127 Public Square
M/C OH-01-127-0602
Cleveland, Ohio 44114-1306
Attention: Media Finance Division
Telecopy: 216-689-4666
Copy to:
Timothy J. Kelley, Esq.
Dow, Lohnes & Albertson
1200 New Hampshire Ave., N.W.
Suite 800
Washington, D.C. 20036
Telecopy: 202-776-2222
TO THE CO-AGENT:
NationsBank, N.A. (South)
Financial Strategies Group
600 Peachtree Street, N.E.
19th Floor
Atlanta, GA 30308
Copy to:
Chris D. Molen, Esq.
Paul, Hastings, Janofsky & Walker LLP
600 Peachtree Street, N.E.
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Suite 200
Atlanta, Georgia 30308-2222
Telecopy : (404) 815-2424
TO THE BANKS, AT THE ADDRESSES LISTED ON THE SIGNATURE PAGES
HEREOF OR IN THE ASSIGNMENT INSTRUMENT DELIVERED PURSUANT TO
SECTION 12.7(b)
TO THE BORROWER OR ANY OF ITS SUBSIDIARIES:
Gray Communications Systems, Inc.
126 North Washington Street
Albany, Georgia 31701
Attention: William A. Fielder, III
Telecopy: 912-888-9374
Copy to:
Neal H. Ray, Esq.
Heyman & Sizemore
2300 Cain Tower
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Telecopy: 404-521-2838
or to such other address or addresses as the party to which such notice is
directed may have designated in writing to the other parties hereto.
12.5 WAIVER AND RELEASE BY THE BORROWER. Neither the
Agent, nor any Bank, nor any Affiliate, officer, director, employee, attorney or
agent of the Agent or any Bank shall have any liability with respect to, and the
Borrower hereby waives, releases and agrees not to sue any of them upon, any
claim for any special, indirect, incidental or consequential damages suffered or
incurred by the Borrower or any of its Subsidiaries in connection with, arising
out of, or in any way related to, this Agreement or any of the Collateral
Documents, or any of the transactions contemplated by this Agreement or any of
the Collateral Documents, unless arising from the gross negligence or willful
misconduct of such Person as determined by a final non-appealable judgment of a
court of competent jurisdiction.
12.6 RIGHT OF SET OFF. Upon the occurrence and during the
continuance of any Event of Default, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank or
an Affiliate of such Bank to or for the credit or the account of the Borrower or
any of its Subsidiaries against
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any and all of the obligations of the Borrower or any of its Subsidiaries now
or hereafter existing hereunder or under any Collateral Document,
irrespective of whether or not such Bank shall have made any demand hereunder
or under any Collateral Document and although such obligations may be
unmatured. Such Bank agrees promptly to notify the Agent and the Borrower
after any such set-off and application made by such Bank; PROVIDED, HOWEVER,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of the Banks under this Section are in
addition to other rights and remedies (including without limitation, other
rights of set-off) which the Banks may have. The Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that any holder
of a participation in the Notes may exercise rights of set-off or
counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower or
any of its Subsidiaries in the amount of such participation.
12.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) Whenever in this Agreement any of the parties
hereto is referred to, such reference shall be deemed to include the successors
and assigns of such party; PROVIDED, HOWEVER, that the Borrower may not assign
or transfer any of its rights or obligations hereunder or under the Notes
without the prior written consent of all of the Banks and the Agent.
(b) Each Bank may assign all or any part of any of its
Loans, its Notes, and its share of the Commitments and the Letters of Credit
with the consent of the Borrower and the Agent, which consent shall not be
unreasonably withheld; PROVIDED that (i) no such consent by the Borrower shall
be required (A) for any such assignment by any Bank to an Affiliate of such
Bank, (B) if, at the time of such assignment, an Event of Default or Possible
Default has occurred and is continuing, (C) in the case of any assignment to
another branch or a principal office of a Bank, or (D) for any such assignment
to another Bank or an Affiliate of another Bank; (ii) any such partial
assignment shall be in an amount at least equal to $5,000,000; and (iii) each
such assignment shall be made by a Bank in such manner that the same portion of
its Loans, its Notes, its share of the Commitments and its participation in the
Letters of Credit is assigned to the assignee. Upon execution and delivery by
the assignor and the assignee to the Borrower and the Agent of an instrument in
writing pursuant to which such assignee agrees to become a "Bank" hereunder (if
not already a Bank) having the share of the Commitments, Loans and Letters of
Credit specified in such instrument, and upon consent thereto by the Agent and
the Borrower (to the extent required), the assignee shall have, to the extent of
such assignment (unless otherwise provided in such assignment with the consent
of the Agent), the obligations, rights and benefits of a Bank hereunder holding
the share of the
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Commitments, Loans and Letters of Credit (or portions thereof) assigned to it
(in addition to the share of the Commitments, Loans and Letters of Credit, if
any, theretofore held by such assignee) and the assigning Bank shall, to the
extent of such assignment, be released from the share of the Commitments, the
Letters of Credit and the obligations hereunder so assigned.
(c) Upon its receipt of an assignment pursuant to
Section 12.7(b) above duly executed by an assigning Bank and the assignee,
together with any Notes subject to such assignment and the Agent's standard
processing and recordation fee of $2,500, the Agent shall, if such assignment
has been completed, accept such assignment. Within five business days after
receipt of such notice, the Borrower, at the Borrower's own expense, shall
execute and deliver to the Agent in exchange for the surrendered Notes new Notes
to the order of the assignee in an amount equal to the share of the Commitments,
of the Loans and of the Letters of Credit assumed by the assignee and, if the
assigning Bank has retained a portion of the Commitments, the Loans and the
Letters of Credit hereunder, new Notes to the order of the assigning Bank in an
amount equal to the share of the Commitments and the Loans retained by it
hereunder. Such new Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Notes, shall be dated the
effective date of such assignment and shall otherwise be in substantially the
form of EXHIBITS A AND B hereto. Cancelled Notes shall be returned to the
Borrower.
(d) A Bank may sell or agree to sell to one or more
other Persons (each, a "Participant") a participation in all or any part of any
Loans held by it, or in its share of the Commitments and the Letters of Credit.
Except as otherwise provided in the last sentence of this Section 12.7(d), no
Participant shall have any rights or benefits under this Agreement or any Note
or any other Collateral Documents (the Participant's rights against such Bank in
respect of such participation to be those set forth in the agreements executed
by such Bank in favor of the Participant). All amounts payable by the Borrower
to any Bank under Section 2 hereof in respect of Loans held by it, and its share
of the Commitments, shall be determined as if such Bank had not sold or agreed
to sell any participations in such Loans and share of the Commitments, and as if
such Bank were funding each of such Loans and its share of the Commitments in
the same way that it is funding the portion of such Loans and its share of the
Commitments in which no participations have been sold. In no event shall a Bank
that sells a participation agree with the Participant to take or refrain from
taking any action hereunder or under any other Collateral Document except that
such Bank may agree with the Participant that it will not, without the consent
of the Participant, agree to any modification, supplement or waiver hereof or of
any of the other Collateral Documents to the extent that the same, under Section
12.12 hereof, requires the consent
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of each Bank. The Borrower agrees that each Participant shall be entitled to
the benefits of Sections 2.8 through 2.15 and Section 12.6 with respect to
its participating interest.
(e) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 12.7, any Bank may
assign and pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the assigning Bank
from its obligations hereunder.
(f) A Bank may furnish any information concerning the
Borrower and its Subsidiaries in the possession of such Bank from time to time
to assignees and participants (including prospective assignees and
participants).
(g) Anything in this Section 12.7 to the contrary
notwithstanding, no Bank may assign or participate any interest in any Loan held
by it hereunder to the Borrower or any of its Affiliates without the prior
written consent of all of the Banks.
12.8 APPLICABLE LAW. THIS AGREEMENT AND THE COLLATERAL
DOCUMENTS, AND THE DUTIES, RIGHTS, POWERS AND REMEDIES OF THE PARTIES HERETO AND
THERETO, SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF OHIO, WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF,
EXCEPT TO THE EXTENT THAT ANY COLLATERAL DOCUMENT PROVIDES THAT THE LOCAL LAW OF
ANOTHER JURISDICTION GOVERNS THE GRANT, PERFECTION OR ENFORCEMENT OF THE LIENS
GRANTED PURSUANT TO SUCH COLLATERAL DOCUMENT. THE PROVISIONS OF THIS SECTION
HAVE BEEN FULLY DISCUSSED BY THE BORROWER AND THE AGENT ON BEHALF OF THE BANKS
AND SHALL BE SUBJECT TO NO EXCEPTIONS. THE BORROWER HAS MADE THIS CHOICE OF
GOVERNING LAW KNOWINGLY AND WILLINGLY AND AFTER CONSULTING WITH ITS COUNSEL.
NONE OF THE AGENT, THE CO-AGENT, ANY BANK NOR THE BORROWER HAVE AGREED WITH OR
REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
12.9 ENFORCEMENT. THE BORROWER (A) HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE STATE COURTS OF THE STATE OF OHIO AND TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
OHIO, FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR
BASED UPON THIS AGREEMENT OR ANY COLLATERAL DOCUMENT OR THE SUBJECT MATTER
HEREOF OR THEREOF BROUGHT BY THE AGENT OR THE BANKS OR THEIR SUCCESSORS OR
ASSIGNS AND (B) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A
DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT
IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT
ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT,
ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT
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THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS
AGREEMENT OR ANY COLLATERAL DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF
MAY NOT BE ENFORCED IN OR BY SUCH COURT, AND (C) HEREBY WAIVES AND AGREES NOT
TO SEEK ANY REVIEW BY ANY COURT OF ANY OTHER JURISDICTION WHICH MAY BE CALLED
UPON TO GRANT AN ENFORCEMENT OF THE JUDGMENT OF ANY SUCH OHIO STATE OR
FEDERAL COURT. THE BORROWER HEREBY CONSENTS TO SERVICE OF PROCESS BY
REGISTERED MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN. THE
BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION AND ITS CONSENT TO
SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE AGENT AND
THE BANKS. FINAL JUDGMENT AGAINST THE BORROWER IN ANY SUCH ACTION, SUIT OR
PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT, ACTION OR
PROCEEDING ON THE JUDGMENT, OR IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO
THE LAWS OF SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE AGENT OR THE
BANKS MAY AT THEIR OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL
PROCEEDINGS, AGAINST THE BORROWER OR ANY OF ITS ASSETS IN ANY STATE OR
FEDERAL COURT OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE THE
BORROWER, OR SUCH ASSETS, MAY BE FOUND.
12.10 JURY TRIAL WAIVER. THE BORROWER, THE AGENT AND THE
BANKS EACH WAIVE IRREVOCABLY, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT
OR OTHERWISE, BETWEEN THE BANKS AND THE BORROWER ARISING OUT OF, IN CONNECTION
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS AGREEMENT OR THE NOTES OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED HERETO AND THERETO. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE BORROWER, THE
AGENT AND THE BANKS ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO
ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER
IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE
WAIVER IN THEIR RELATED FUTURE DEALINGS. THE BORROWER, THE AGENT AND THE BANKS
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (UNLESS EXPRESSLY
MODIFIED IN WRITING BY ALL PARIES HERETO), AND THE WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, THE COLLATERAL DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
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12.11 BINDING EFFECT AND ENTIRE AGREEMENT. This Agreement
shall inure to the benefit of, and shall be binding upon, the respective
successors and permitted assigns of the parties hereto. This Agreement, the
Schedules and Exhibits hereto, which are hereby incorporated in this Agreement,
and the Collateral Documents constitute the entire agreement among the parties
on the subject matter hereof.
12.12 COUNTERPARTS. This Agreement may be executed in any
number of counterparts or duplicate originals, each of which shall be deemed to
be an original, but all of which together shall constitute one and the same
instrument.
12.13 SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein or in any Collateral Document shall
survive any investigation and the Closing and shall continue in full force and
effect so long as any of the Obligations remain to be performed or paid or the
Banks have any obligation to advance sums hereunder or any Letters of Credit
remain outstanding.
12.14 MODIFICATION. Any term of this Agreement or of the
Notes may be amended and the observance of any term of this Agreement or of the
Notes may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Borrower
and the Required Banks or, if there are only two Banks each of which holds a
Ratable Share of 80% or less of the Loans, with the written consent of the
Borrower and both Banks; PROVIDED, HOWEVER, that no such amendment or waiver or
other action shall, without the prior written consent of all of the Banks or the
holders of all of the Notes at the time outstanding, (a) extend the maturity or
reduce the principal amount of, or reduce the rate or extend the time of payment
of interest on, or reduce the amount or extend the time of payment of any
principal installment of, any Note, (b) reduce the amount or extend the time of
payment of the commitment fees, (c) change the Commitments or the Ratable Share
of any Bank (other than any change in Commitments or Ratable Share resulting
from the sale of a participation in or assignment of any Bank's interest in the
Commitments and Loans in accordance with subsection 12.7 or resulting from an
increase in Commitments under Section 2.16), (d) change the percentage referred
to in the definition of "Required Banks" contained in Section 1.1 or reduce the
number of Banks required to approve any waiver, amendment or modification, (e)
amend this Section 12.14, (f) amend or waive compliance with Section 2.7(b), (g)
release any collateral or any guaranty for the Loans except in connection with a
sale permitted pursuant to Section 8.10, (h) amend or waive any of the
conditions precedent set forth in Section 6 for the making of the initial Loans
on the Closing Date, or (i) extend the expiration date of any outstanding Letter
of Credit or postpone the reimbursement obligations of the Borrower in respect
of any Letter of Credit or reduce the fees payable by the Borrower in
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respect of any Letter of Credit; and PROVIDED, FURTHER, that notwithstanding
the foregoing provisions of this Section 12.14, this Agreement and the Notes
may be amended or modified in the manner contemplated by Section 12.7 for the
purpose of permitting any Bank to assign its interest, rights and obligations
hereunder to another Person if the appropriate assignment agreement or
counterparts thereof are executed by the Borrower (to the extent required),
the Agent and the appropriate Bank assignor and assignee. Any amendment or
waiver effected in accordance with this Section 12.14 shall be binding upon
each holder of any Note at the time outstanding, each future holder of any
Note and the Borrower.
12.15 SEPARABILITY. If any one or more of the provisions
contained in this Agreement or any Collateral Document should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of all remaining provisions shall not in any way be affected or
impaired. Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
12.16 SECTION HEADINGS. The section headings contained
herein are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
12.17 TERMINATION. This Agreement shall terminate when all
amounts due hereunder, under the Notes and under each Collateral Document shall
have been indefeasibly paid in full in cash and all other Obligations hereunder
or thereunder shall have been fully performed, so long as no Letters of Credit
are then outstanding and the Banks have no further obligation to advance sums
hereunder. Upon such termination, at the request of the Borrower, the Agent and
the Banks shall release all Liens granted herein or in any Collateral Document
at the Borrower's expense and return all collateral held pursuant hereto or to
any Collateral Document without recourse or representation. Notwithstanding
anything to the contrary contained herein, each expense reimbursement and
indemnification provision in this Agreement or in any Collateral Document shall
survive the repayment in full of the Loans and the termination of this
Agreement.
12.18 FCC COMPLIANCE.
(a) Notwithstanding anything herein or in any of the
Collateral Documents to the contrary, but without limiting or waiving the
Borrower's or any of its Subsidiaries' obligations hereunder or under any of the
Collateral Documents, the Agent's and the Banks' remedies hereunder and under
the Collateral
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Documents are subject to compliance with the Communications Act of 1934, as
amended, and to all applicable rules, regulations and policies of the FCC,
and neither the Agent nor the Banks will take any action pursuant to this
Agreement or any of the Collateral Documents that will constitute or result
in any assignment of a License issued by the FCC or any change of control of
the Borrower or any of its Subsidiaries which owns any FCC License if such
assignment of License or change of control would require under then existing
law (including the written rules and regulations promulgated by the FCC), the
prior approval of the FCC, without first obtaining such approval of the FCC.
This Agreement, the Collateral Documents and the transactions contemplated
hereby and thereby do not and will not constitute, create, or have the effect
of constituting or creating, directly or indirectly, actual or practical
ownership of the Borrower or any of its Subsidiaries by the Agent or the
Banks or control, affirmative or negative, direct or indirect, of the
Borrower or any of its Subsidiaries by the Agent or the Banks, over the
management or any other aspect of the operation of the Borrower or any of its
Subsidiaries, which ownership and control remain exclusively and at all times
in the stockholders and directors of the Borrower and its Subsidiaries until
such time as the Agent and the Banks have complied with such law, rules,
regulations and policies.
(b) Furthermore, the parties acknowledge their intent
that, upon the occurrence of an Event of Default, the Agent and the Banks shall
receive, to the fullest extent permitted by applicable law and governmental
policy (including, without limitation, the rules, regulations and policies of
the FCC), all rights necessary or desirable to obtain, use or sell the Licenses
and the collateral securing the Loans, and to exercise all remedies available to
them under this Agreement, the Collateral Documents, the Uniform Commercial Code
or other applicable law. Therefore, the parties agree that, in the event of
changes in law or governmental policy occurring after the date hereof that
affect in any manner the Agent's or the Banks' rights of access to, or ability
to obtain a Lien in, or use or sale of, the Licenses or such collateral, or the
procedures necessary to enable the Agent or the Banks to obtain such rights of
access, Liens, use or sale, the Agent, the Banks and the Borrower shall amend
this Agreement and the Collateral Documents in such manner as the Agent shall
reasonably request, in order to provide the Agent and the Banks such rights to
the greatest extent possible consistent with then applicable law and
governmental policy.
12.19 MARSHALING; PAYMENTS SET ASIDE. The Agent and the
Banks shall not be under any obligation to marshal any assets in favor of the
Borrower or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Borrower or any of its Subsidiaries makes a
payment or payments to the Agent or the Banks or the Agent or any Bank enforces
its security interest or exercises its rights of setoff,
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and such payment or payments or the process of such enforcement or setoff or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, receiver or
any other party under any bankruptcy or insolvency law, state or federal law,
common law or equitable cause, then to the extent of such recovery, the
Obligations or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor, shall be revived and continued in full
force and effect as if such payment had not been made or such enforcement had
not occurred.
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TO WITNESS THE ABOVE, the Borrower, the Banks and the Agent
have caused this Loan Agreement to be executed by their respective
representatives thereunto duly authorized as of the date first above written.
BORROWER:
GRAY COMMUNICATIONS SYSTEMS, INC.
By: /s/ J. Mack Robinson
___________________________
Name: J. Mack Robinson
_________________________
Title: Interim President
_________________________
BANKS:
KEYBANK NATIONAL ASSOCIATION
By: /s/ Jason R. Weaver
___________________________
Name: Jason R. Weaver
Title: Assistant Vice President
Address: 127 Public Square
Cleveland, Ohio 44114-1306
Attention: Media Finance Division
S-1
NATIONSBANK, N.A. (SOUTH)
By: /s/ Gary L. Young
___________________________
Name: Gary L. Young
Title: Senior Vice President
Address: 600 Peachtree Street, N.E.
19th Floor
Atlanta, Georgia 30308
Attention: Financial Strategies Group
CIBC INC.
By: /s/ Harold Birk
___________________________
Harold Birk
Director, CIBC Wood Gundy
Securities Corp., As Agent
Address: 425 Lexington Avenue
New York, New York 10017
CORESTATES BANK, N.A.
By: /s/ Chris Kalmbach
___________________________
Name: Chris Kalmbach
Title: Vice President
Address: 1339 Chestnut Street
FC 1-8-11-28
Philadelphia, Pennsylvania 19107
THE BANK OF NEW YORK
By: /s/ Ted Ryan
___________________________
Name: Ted Ryan
Title: Vice President
Address: One Wall Street
New York, New York 10286
S-2
AGENT:
KEYBANK NATIONAL ASSOCIATION
By: /s/ Jason R. Weaver
___________________________
Name : Jason R. Weaver
Title: Assistant Vice President
CO-AGENT:
NATIONSBANK, N.A. (SOUTH)
By: /s/ Gary L. Young
___________________________
Name : Gary L. Young
Title: Senior Vice President
S-3
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1 Ratable Shares of the Banks
Exhibit A Form of Revolving Note
Exhibit B Form of Term Note
Exhibit C Financial Statements
Exhibit D Projections
Exhibit E Capitalization
Exhibit F Proceedings, Litigation, Non-Compliance
with Law; Tax Matters
Exhibit G Liens and Indebtedness
Exhibit H Schedule of Contracts, Commitments,
Material Agreements, licenses and
Consents
Exhibit I ERISA Liabilities and Plans
Exhibit J Real Estate
Exhibit K Environmental Matters
Exhibit L Form of Compliance Certificate
SCHEDULE 1.1
RATABLE SHARES
Bank: Ratable Share:
- ---- -------------
KeyBank 24%
NationsBank 24%
CIBC 18%
CoreStates 18%
Bank of New York 16%