EXHIBIT 10.1
REVOLVING LINE OF CREDIT AGREEMENT
Dated as of July 2, 1998
Among
INTEREP NATIONAL RADIO SALES, INC.,
MCGAVREN GUILD, INC. ,
D&R RADIO, INC.,
CBS RADIO SALES, INC.,
ALLIED RADIO PARTNERS, INC.
CABALLERO SPANISH MEDIA L.L.C., and
CLEAR CHANNEL RADIO, LLC
as Borrowers
and
VARIOUS FINANCIAL INSTITUTIONS
NOW OR HEREAFTER PARTIES HERETO,
as Lenders
and
BANKBOSTON, N.A.,
as Administrative Agent
and
SUMMIT BANK
as Documentation Agent
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This REVOLVING LINE OF CREDIT AGREEMENT (this "Credit Agreement") is dated
as of July 2, 1998 among INTEREP NATIONAL RADIO SALES, INC. (the "Company"),
MCGAVREN GUILD, INC., D&R RADIO, INC., CBS RADIO SALES, INC., ALLIED RADIO
PARTNERS, INC., CABALLERO SPANISH MEDIA L.L.C., and CLEAR CHANNEL RADIO, LLC,
(collectively, the "Subsidiary Borrowers", and, together with the Company, the
"Borrowers"), BANKBOSTON, N.A., as Administrative Agent, SUMMIT BANK, as
Documentation Agent, and the undersigned Lenders and other Lenders that may from
time to time be parties hereto.
WHEREAS, the Borrowers have requested that the Lenders make available
credit facilities in the aggregate principal amount of $10,000,000 for the
purposes hereinbelow described;
WHEREAS, the Lenders have agreed, on the terms and conditions set forth in
this Credit Agreement, to provide credit facilities to the Borrowers for such
purposes.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
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Section 1.01 Certain Defined Terms. As used herein, the following terms
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shall have the following meanings.
"Accumulated Funding Deficiency" shall mean an accumulated funding
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deficiency as defined in Section 302 of ERISA.
"Acquisition EBITDA" shall mean, as of any date, the EBITDA generated by a
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Representative Firm acquired or to be acquired by one or more of the Borrowers
for the following number of Quarters:
(i) if measured during the Quarter such Representative Firm is
acquired or to be acquired, Acquisition EBITDA shall mean the EBITDA of
such Representative Firm for the four Quarters immediately preceding the
date of such acquisition; or
(ii) if measured during the first Quarter following the date such
Representative Firm is acquired, Acquisition EBITDA shall mean the
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EBITDA of such Representative Firm for the three Quarters immediately
preceding the date of such acquisition; or
(iii) if measured during the second Quarter following the date such
Representative Firm is acquired, Acquisition EBITDA shall mean the EBITDA
of such Representative Firm for the two Quarters immediately preceding the
date of such acquisition; or
(iv) if measured during the third Quarter following the date such
Representative Firm is acquired, Acquisition EBITDA shall mean the EBITDA
of such Representative Firm for the Quarter immediately preceding the date
of such acquisition; or
(v) if measured during the fourth or subsequent Quarter following the
date such Representative Firm is acquired, Acquisition EBITDA shall not
include any EBITDA of such Representative Firm for any Quarter preceding
the date of such acquisition.
Acquisition EBITDA shall be determined from the latest audited financial
statements of the Representative Firm to be acquired. The Lenders may, in their
sole discretion, permit adjustments to such Acquisition EBITDA which may
involve, among others things, an analysis of the amounts paid to former owners
or principals with respect to wages or benefits, or Pension Plan expenses.
"Additional Costs" shall have the meaning given to such term in Section
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5.01 hereof.
"Affiliate" shall mean, as to any Person, any other Person which directly
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or indirectly controls, or is under common control with, or is controlled by,
such Person. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control with") shall
mean possession, directly or indirectly, of the power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise); provided,
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however, that any Person which owns directly or indirectly 10% or more of the
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securities having ordinary voting power for the election of directors or other
governing body of a corporation or 10% or more of the partnership or other
ownership interests of any other Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
"Agent" shall mean BankBoston, N.A., in its capacity as administrative
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agent for the Lenders hereunder, and its successors in such capacity.
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"Agents" shall mean, collectively, the Agent and the Documentation Agent.
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"Aggregate Commitment" shall mean, as to each Lender, the aggregate amount
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set forth opposite its name on the signature pages hereto under the heading
"Revolving Credit Commitment" (as the same may be reduced or otherwise adjusted
from time to time as provided in this Credit Agreement).
"Annual Compliance Certificates" shall mean the certificates delivered to
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the Lenders pursuant to Section 8.01(b) hereof.
"Assignment and Acceptance" shall have the meaning given to such term in
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Section 11.06(d) hereof.
"Base Rate" shall mean, for any period, a fluctuating interest rate per
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annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the rate of interest announced by BankBoston, N.A., from time
to time, as its reference rate for the determination of interest rates on loans
of varying maturities in Dollars to United States residents of varying degrees
of creditworthiness and being quoted at such time by BankBoston, N.A., as its
"base rate," which rate is not necessarily the lowest rate of interest charged
by BankBoston, N.A.
"Base Rate Loans" shall mean Loans which accrue interest on the basis of
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the Base Rate.
"Base Rate Loan Interest Margin" shall have the meaning given to such term
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in Section 2.04(b) hereof.
"Borrowers" shall have the meaning given to such term in the preamble to
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this Credit Agreement.
"Business Day" shall mean any day other than a day on which commercial
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banks in Boston, Massachusetts or New York City are authorized or required to
close.
"Capital Expenditures" shall mean, for any period, amounts paid or
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Indebtedness incurred by the Borrowers in connection with the purchase or lease
of capital assets that would be required to be capitalized and shown on the
consolidated balance sheet of the Borrowers in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any period, the amount of the
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liability reflecting the aggregate discounted amount of future payments under
all leases which are or should be capitalized on the balance sheet of the lessee
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calculated in accordance with GAAP pursuant to Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board.
"Capital Maintenance Costs" shall mean, for any period, with respect to the
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Loans of each Lender, any costs which such Lender determines are attributable to
the maintenance by such Lender or any holding company of such Lender, pursuant
to any law or regulation or any interpretation, directive or request (whether or
not having the force of law) of any court or governmental or monetary authority,
whether in effect on the Closing Date or thereafter, of capital in respect of
its maintaining Loans hereunder or its commitment to make Loans hereunder (e.g.,
any additional capital maintenance requirements imposed by the Board of
Governors of the Federal Reserve System with respect to the Loans pursuant to
Regulation D).
"Closing Date" shall mean the date of this Credit Agreement.
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"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Collateral" shall mean the collateral subject to the Security Documents.
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"Commitment. Percentage" shall mean, as to each Lender at any time, the
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percentage obtained by dividing such Lender's Revolving Credit Commitment by the
Total Revolving Credit Commitment.
"Commitment Termination Date" shall mean the Quarterly Date falling on or
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nearest to July 1, 2004.
"Company" shall have the meaning given to such term in the preamble to this
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Credit Agreement.
"Contracts" shall mean all binding contracts or agreements between any of
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the Borrowers and any radio, television or cable systems or network utilizes of
such forms of media which grant any Borrower the right to act as agent in
securing national advertising for such entity. Each such Contract shall
conform, in form and substance, with the then prevailing industry practice.
"Contract Buyout Disbursements" shall mean, for any period, the aggregate
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cash payments made by any Borrower to other Persons in connection with the
termination, sale, transfer, assignment or other disposition of a Contract by
any such other Person to any Borrower, plus any cash payments made by any
Borrower in connection with any long term Investments related to the business of
the Borrowers as permitted by Section 8.15 hereof.
"Contract Buyout Expense" shall mean, for any period, the accrued amount of
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any expenses incurred by any Borrower in connection with the
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termination, sale, transfer, assignment or other disposition of a Contract by
other Persons to any Borrower.
"Contract Buyout Receipts" shall mean, for any period, the aggregate cash
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payments received by any Borrower from other Persons in connection with the
termination, sale, transfer, assignment or other disposition of a Contract by
such Borrower to any such other Person.
"Contract EBITDA" shall mean, for any Contract, the product of (i) the
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greater of (A) the total revenue from such Contract for the most recently
completed twelve-month period, or (B) the total revenue to be received from such
Contract for the next twelve-month period, as determined by the Borrowers on a
reasonable basis, multiplied by (ii) the EBITDA margin of the Borrowers for the
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most recently completed period of four consecutive Quarters. The Borrowers may
submit a schedule of pro forma expenses for such Contract and request
adjustments to the EBITDA margin which the Lenders, in their reasonable
discretion, may approve.
"Contract Value" shall mean, with respect to a Contract, the dollar amount
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produced by multiplying (i) the Average Monthly Commissions, times (ii) the
number of months remaining under the applicable Contract plus two (2). The term
"Average Monthly Commissions" shall mean the amount produced by dividing (i) the
amount produced by multiplying (x) the commission rate stated in the applicable
Contract, times (y) the annual billings which the Borrowers estimate in good
faith (supported by such detail as the Lenders may reasonably require) will be
generated pursuant to such Contract during the next twelve month period, or, if
less than twelve months remain before the expiration of such Contract, the
estimated billings to be generated during the remaining life of the Contract, by
(ii) the lesser of (x) 12 and (y) the number of months remaining before the
expiration of the Contract.
"Contract Value Report" shall mean a report in substantially the form of
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Exhibit B hereto listing Contract Values on a station by station basis, as of
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the close of business on the last Business Day of the immediately preceding
Quarter of the Borrowers.
"Credit Agreement" shall have the meaning given to such term in the
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preamble hereof.
"Credit Documents" shall mean each of this Credit Agreement, the Notes, and
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the Security Documents, and all other agreements or documents delivered by the
Borrowers to the Lenders in connection with the transactions contemplated by
this Credit Agreement.
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"Default" shall mean an event or condition which, with notice and/or the
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passage of time or both, would become an Event of Default hereunder.
"Deferred Compensation Plan" shall mean the Company's Compensation Deferral
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Plan as in effect from time to time.
"Documentation Agent" shall mean Summit Bank, in its capacity as
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documentation agent for the Lenders, and its successors in such capacity.
"Dollars" shall mean lawful money of the United States of America.
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"EBITDA" shall mean, for any period, the Borrowers' operating income for
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such period determined on a consolidated basis plus the sum of (i) all non-cash
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charges (including, without limitation, depreciation and amortization) of the
Borrowers for such period, to the extent deducted in determining such operating
income, and (ii) Acquisition EBITDA for such period, if any, minus all non-cash
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revenues of the Borrowers for such period, to the extent included in determining
such operating income. For purposes of calculating EBITDA for any period, (A)
there shall be included in EBITDA the Contract EBITDA for any Material Contract
entered into by the Borrowers during such period multiplied by a fraction, the
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numerator of which shall be the number of days from the first day of such period
through the date of such Material Contract, and the denominator of which shall
be 365, and (B) there shall be excluded from EBITDA the Contract EBITDA for any
Material Contract of the Borrowers cancelled or otherwise terminated during such
period multiplied by a fraction, the numerator of which shall be the number of
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days from the first day of such period through the date of such cancellation or
termination, and the denominator of which shall be 365.
For the purposes of determining compliance with the Sections in Article
VIII D hereof for the fiscal Quarters ending on or before December 31, 1998,
certain expenses associated with the Florida Relocation and Expense Reduction
Program, identified and reasonably acceptable to the Lenders, and in amounts not
to exceed the following amounts for the following periods, will be excluded from
the definition of EBITDA by adding such amounts in the calculation of EBITDA for
the periods set forth in the table (the "Adjustment Table") as follows:
Aggregate Annualized
Quarter or Fiscal Year Ending Adjustment to EBITDA
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September 30, 1998 $825,000
December 31, 1998 $500,000
"Effective Date" shall have the meaning given to such term in Section 11.10
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hereof.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
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amended.
"ESOP" shall mean the Company's Employee Stock Ownership Plan as in effect
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from time to time.
"Eurodollar Breakage Costs" shall mean, for any Lender, an amount equal to
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the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount paid, prepaid or converted or not borrowed for the period
from the date of such payment, prepayment or conversion or failure to borrow to
the last day of the Interest Period for such Loan (or, in the case of a failure
to borrow, the Interest Period for such Loan which would have commenced on the
date of such failure to borrow) had such principal amount borne interest on the
basis of the Eurodollar Rate applicable to such Loan in accordance with Section
2.04(a)(ii) hereof over (ii) the interest component of the amount such Lender
would be required to bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such Lender).
"Eurodollar Business Day" shall mean any Business Day on which dealings in
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Dollars are carried on in the London interbank market.
"Eurodollar Loan" shall mean any Loan which accrues interest on the basis
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of the Eurodollar Rate.
"Eurodollar Loan Interest Margin" shall have the meaning given to such term
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in Section 2.04(b) hereof.
"Eurodollar Rate" shall mean, for any Interest Period for all Eurodollar
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Loans to which such Interest Period relates, the rate per annum obtained by
dividing (x) the "London Interbank Offered Rate" for Dollar deposits, as quoted
by the Agent to prime banks in the London interbank market at approximately
11:00 a.m. (London time) two Eurodollar Business Days prior to the first day of
such Interest Period, in accordance with the usual practice in such market, for
delivery on the first day of such Interest Period and for the number of days
comprised therein, in amounts comparable to the aggregate principal amount of
such Eurodollar Loans, by (y) a percentage equal to 100% minus the Eurodollar
Reserve Percentage. Such rate of interest shall be rounded, if necessary,
upwards to the next higher 1/16 of 1% (if such rate is not an integral multiple
of 1/16 of 1%). Each determination by the Agent of any Eurodollar Rate shall,
in the absence of manifest error, be conclusive.
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"Eurodollar Reserve Percentage" shall mean, for any Interest Period for all
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Eurodollar Rate Loans to which such Interest Period relates, a percentage equal
to the daily average during such Interest Period of the maximum percentages in
effect on each day of such Interest Period, as prescribed by the Board of
Governors of the Federal Reserve System, for determining the maximum reserve
requirements applicable to "Eurocurrency Liabilities" pursuant to Regulation D
or any other applicable regulation of the Board of Governors of the Federal
Reserve System that prescribes reserve requirements applicable to "Eurocurrency
Liabilities" as currently defined in Regulation D.
"Event of Default" shall mean any of the events described in Article IX
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hereof
"Exchange Offer" shall mean the offer to exchange the 1998 Subordinated
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Notes for a new issue of notes of the Company that are registered under the
Securities Act of 1933, as amended, as contemplated by the Offering Memorandum.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
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rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers on such day, as published for
such day (or if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York in the statistical release
designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities,
or any successor publication (including any such successor publication, the
"Composite 3:30 p.m. Quotations"), under the caption "Federal Funds Effective
Rate". If such rate is not published in the Composite 3:30 p.m. Quotations for
any Business Day, the rate for such Business Day will be the arithmetic mean of
the rates for the last transaction in overnight federal funds arranged prior to
9:00 a.m. (Boston, Massachusetts time) on such Business Day by each of three
leading brokers of federal funds transactions in New York City selected by the
Agent.
"Fixed Charge Coverage" shall mean, for any period (based upon the most
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recent financial statements required to be delivered pursuant to Section 8.01
hereof), the ratio of (i) EBITDA for the immediately preceding four Quarter
period for which financial statements are required to be delivered as aforesaid,
to (ii) the sum of (u) Total Debt Service for such immediately preceding four
Quarter period, (v) income taxes paid during such immediately preceding four
Quarter period, (w) Capital Expenditures made during such immediately preceding
four Quarter period, and (x) Net Contract Buyout Disbursements for the
immediately preceding twelve months.
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"Florida Relocation and Expense Reduction Program" shall mean the
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identified one-time expenses incurred by the Borrowers to relocate certain
personnel and assets to Florida and identified severance expenses related to
severance packages for certain employees, all as set forth on Exhibit P attached
hereto and as reflected in the Adjustment Table set forth in the definition of
EBITDA above.
"GAAP" shall mean generally accepted accounting principles as defined by
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controlling pronouncements of the Financial Accounting Standards Board, as from
time to time supplemented and amended.
"Governmental Authority" shall mean any federal, state, local, foreign or
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other governmental or administrative (including self-regulatory) body,
instrumentality, department or agency or any court, tribunal, administrative
hearing body, arbitration panel, commission or other similar dispute resolving
panel or body, including, without limitation, those governing the regulation and
protection of the environment.
"Guild" shall mean Ralph C. Guild.
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"Hedging Breakage Costs" shall mean, with respect to any prepayment made by
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the Borrowers pursuant to Section 3.01 in respect of Loans which are the subject
of an Interest Rate Hedging Agreement, any costs or expenses incurred as a
result of such prepayment by the bank or banks which are party to such Interest
Rate Hedging Agreement, including, without limitation, (i) any contractual
costs, damages or penalties required to be paid pursuant to the express terms of
such Interest Rate Hedging Agreement, (ii) any Capital Maintenance Costs, and
(z) any reduction in the income to be earned by such bank or banks pursuant to
such Interest Rate Hedging Agreement.
"Indebtedness" shall mean all obligations, contingent and otherwise, which
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in accordance with GAAP should be classified upon the obligor's balance sheet as
liabilities, including but not limited to, Settlement Obligations, liabilities
secured by any mortgage, pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject thereto, whether or
not the liability secured thereby shall have been assumed, and all guarantees,
endorsements and other contingent obligations whether direct or indirect with
respect to Indebtedness of others and the obligations to reimburse the issuer of
any letters of credit, but excluding solely for the purpose of determining Total
Debt Service and Total Funded Debt: indebtedness representing trade payable,
liabilities which accrue but are not currently payable, indebtedness giving rise
to Contract Buyout Expense, liabilities for deferred compensation owing to
employees, obligations owing to terminated employees, and indebtedness owing to
the Company or any Subsidiary from the Company or any Subsidiary.
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"Interest Margin" shall have mean the Base Rate Loan Interest Margin or the
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Eurodollar Loan Interest Margin, whichever shall be applicable pursuant to
Section 2.04(b) hereof.
"Interest Period" shall mean: (i) with respect to a Eurodollar Loan, the
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period commencing on the date such Eurodollar Loan is made, if applicable, or on
the date such Eurodollar Loan is converted from a Base Rate Loan, or, in the
case of a continuation, on the last day of the immediately preceding Interest
Period applicable to such Eurodollar Loan, and ending on the date which is one,
two, three or six months thereafter, as the Borrowers may select as provided in
Section 2.02 or Section 2.03 hereof, or (ii) with respect to a Base Rate Loan,
the period commencing on the date such Base Rate Loan is made and ending on the
next Quarterly Date thereafter. Notwithstanding the foregoing: (i) no Interest
Period with respect to any Loan may end after the Commitment Termination Date;
(ii) each Interest Period for a Eurodollar Loan which would otherwise end on a
day which is not a Eurodollar Business Day shall end on the next succeeding
Eurodollar Business Day unless such next succeeding Eurodollar Business Day
falls in the next succeeding calendar month, in which case such Interest Period
shall end on the next preceding Eurodollar Business Day; and (iii) any Interest
Period for a Eurodollar Loan that begins on the last Eurodollar Business Day of
a calendar month (or on a day for which there is no numerically corresponding
day in the calendar month in which such Interest Period ends) shall, subject to
the foregoing clauses (i) through (ii) above, end on the last Eurodollar
Business Day of the calendar month in which such Interest Period ends.
"Interest Rate Hedging Agreement" shall mean an interest rate swap, cap or
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collar agreement or similar arrangement among the Borrowers and one or more
banks satisfactory to the Lenders providing for protection against fluctuations
in interest rates or the exchange of nominal interest obligations among the
Borrowers and such banks, either generally or under specific contingencies, as
said agreement or arrangement shall be modified and supplemented and in effect
from time to time.
"Investments" shall have the meaning given to such term in Section 8.15
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hereof.
"Lenders" shall mean BankBoston, N.A. and Summit Bank, in their capacity as
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Lenders hereunder, and any other person which may become a Lender pursuant to
Section 11.06 hereof
"Letter of Credit" shall mean a letter of credit issued by the Letter of
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Credit Lender for the account of the Borrowers, or any of them, in accordance
with Section 2.01 hereof.
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"Letter of Credit Exposure" shall mean, as of any date, the aggregate
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maximum amount available for drawing under all outstanding Letters of Credit
without regard to whether conditions to drawing can then be satisfied.
"Letter of Credit Lender" shall mean BankBoston, N.A., in its capacity as
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the issuer of a Letter of Credit.
"Liens" shall have the meaning given to such term in Section 8.12 hereof
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"Loans" shall mean Revolving Credit Loans.
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"Majority Lenders" shall mean one or more Lenders whose Aggregate
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Commitments, when added together, total at least 51% of the amount of the Total
Revolving Credit Commitment.
"Margin Stock" shall mean "margin stock" as defined in Regulations G and U.
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"Material Adverse Effect" shall mean, with respect to any Person, a
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material adverse effect upon the business, assets, financial condition or
results of operations of such Person.
"Material Contract" shall mean any Contract the Contract EBITDA for which
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would have been equal to five percent (5%) or more of the EBITDA of the
Borrowers for the period of four consecutive Quarters ended most recently prior
to the date of determination.
"Membership Interest Pledge Agreements" shall mean the Membership Interest
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Pledge Agreements among the Securing Parties and the Agent substantially in the
form of Exhibit C hereto, as amended and in effect from time to time.
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"1940 Act" shall mean the Investment Company Act of 1940, as amended.
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"1998 Subordinated Note Documents" shall mean the 1998 Subordinated Note
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Indenture, the 1998 Subordinated Notes and each of the documents, instruments
and other agreements evidencing, governing or guaranteeing the obligations of
the Company under the 1998 Subordinated Notes, as in effect on the Closing Date
and as the same may be amended, modified or supplemented from time to time in
accordance with the terms thereof and hereof.
"1998 Subordinated Note Indenture" shall mean the Indenture to be executed
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by and among the Company, the other Borrowers and Summit Bank, as trustee,
providing for the issuance of the 1998 Subordinated Notes.
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"1998 Subordinated Notes" shall mean the 10% Senior Subordinated Notes due
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2008 of the Company issued in accordance with the terms contained in the
Offering Memorandum in an aggregate principal amount outstanding on the Closing
Date not to exceed $100,000,000. The 1998 Subordinated Notes shall include the
notes issued pursuant to the Exchange Offer.
"Net Contract Buyout Disbursements" shall mean, for any period, the excess,
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if any, of Contract Buyout Disbursements over Contract Buyout Receipts.
"Net Contract Buyout Receipts" shall mean, for any period, the excess, if
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any, of Contract Buyout Receipts over Contract Buyout Disbursements.
"New Subsidiary" shall mean any Person which becomes a Subsidiary of the
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Borrowers after the Closing Date.
"Notice of Borrowing" shall have the meaning given to such term in Section
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2.02(a) hereof.
"Notes" shall mean the Revolving Credit Notes.
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"Obligations" shall mean, collectively, the obligations of the Borrowers
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hereunder in respect of principal of and interest on the Loans, together with
all obligations in respect of or relating to any Letter of Credit issued
hereunder, and all obligations in respect of fees and other amounts payable by
the Borrowers hereunder.
"Offering Memorandum" shall mean the offering memorandum dated as of June
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29, 1998, disclosing the terms and conditions of the 1998 Subordinated Notes.
"Participant" shall have the meaning given to such term in Section 11.06(c)
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hereof.
"Participation Agreement" shall have the meaning given to such term in
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Section 11.06(c) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
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succeeding to any or all of its functions under ERISA.
"Pension Plan" shall mean the Company's KPMG Peat Marwick LLP Regional
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Prototype Retirement Savings Plan as adopted by the Company with its Adoption
Agreement #005, dated December 22, 1994, as in effect from time to time or any
successor Plan thereto having the same basic characteristics.
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"Permitted Acquisition" shall have the meaning given to such term in
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Section 8.14(b) hereof.
"Permitted Investments" shall mean: (i) shares of a money market fund
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which: (a) is a registered investment company under the 1940 Act; and (b)
complies with Rule 270.2a7 of the 1940 Act (the "Rule") and either (A) is rated
in one of the two highest rating categories by Standard & Poor's Ratings Group
or Moody's Investors Service, Inc. or (B) (1) has assets of at least
$200,000,000 at all times upon and after the date of acquisition of such shares,
and (2) will limit its portfolio investments to instruments that are, at the
time of acquisition, "First Tier Securities" or "Government Securities" as such
terms are defined in the Rule; (ii) investments in certificates of deposit or
Eurodollar time deposits of the Lenders or other banks organized under the laws
of the United States or any State thereof having a combined capital and surplus
of at least $100,000,000; (iii) investments in commercial paper given a rating
of at least "A" or its equivalent by Moody's Investors Service, Inc. or Standard
and Poor's Corporation or similarly rated by any successor to either of such
rating services and which has a maturity of 180 days or less; (iv) Interest Rate
Hedging Agreements; and (v) obligations of the United States of America or any
agency thereof which are backed by the full faith and credit of the United
States of America and which mature not more than one year from the date of
acquisition thereof.
"Permitted Liens" shall mean, with respect to any Person, (i) pledges or
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deposits by such Person under worker's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public or statutory
obligations of such Person or deposits of cash or U.S. Government bonds to
secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent; (ii)
liens imposed by law, such as carriers', warehousemen's and mechanics' liens or
other liens arising out of judgments or awards against such Person with respect
to which such Person shall then be prosecuting in good faith an appeal or other
proceedings for review (and as to which all foreclosures and other enforcement
proceedings shall have been fully bonded or otherwise effectively stayed) or to
the extent that payment of the obligations secured thereby shall not at the time
be required to be made in accordance with the provisions of applicable law,
rule, regulation or agreement, as the case may be; (iii) liens for property
taxes not yet subject to penalties for non-payment which are being contested in
good faith and by appropriate proceedings (and as to which all foreclosures and
other enforcement proceedings shall have been fully bonded or otherwise
effectively stayed); (iv) liens in favor of issuers of performance bonds issued
pursuant to the request of and for the account of such Person in the ordinary
course of its
-14-
business (but only if junior to the liens created by the Security
Documents); and (v) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for rights of way, sewers, electric lines,
telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties or liens incidental to the conduct
of the business of such Person or to the ownership of its properties (including
landlord's liens), which were not incurred in connection with Indebtedness or
other extensions of credit and which do not in the aggregate constitute a
Material Adverse Effect with respect to such Person.
"Permitted Payments" shall mean (i) contributions made to the ESOP to the
------------------
extent permitted by the terms of the ESOP, (ii) all payments required to be made
by the terms of the ESOP, the Stock Growth Plan, the Pension Plan or the
Deferred Compensation Plan on account of the repurchase of any stock of the
Borrowers from employees who have terminated or have been terminated from their
employment with the Borrowers, (iii) all payments required by the terms of any
other employment agreement or applicable law or contemplated by Article VIII of
the by-laws of the Company on account of the repurchase of any stock of the
Borrowers from employees who have terminated or have been terminated from their
employment with the Borrowers, (iv) Restricted Payments made on the Closing Date
with the proceeds of the issuance of the 1998 Subordinated Notes and described
in the Offering Memorandum, (v) payments of interest on the 1998 Subordinated
Notes, provided that such payments are not prohibited by the subordination
provisions contained in the 1998 Subordinated Note Indenture, (vi) Restricted
Payments consisting of the exchange of notes pursuant to the Exchange Offer,
(vii) the redemption by the Company of 1998 Subordinated Notes with the net cash
proceeds of an offering of common stock of the Company, provided that such
--------
redemption is made in accordance with the terms of Article 3 of the 1998
Subordinated Note Indenture, as in effect on the date of this Agreement and
(viii) the redemption by the Company of the 1998 Subordinated Notes with Excess
Proceeds (as defined in the 1998 Subordinated Note Indenture), provided that
--------
such redemption is made in accordance with, and only as required by, Section
4.10 of the 1998 Subordinated Note Indenture, as in effect on the date of this
Agreement, and provided, further that no Default or Event of Default shall have
-------- -------
occurred and shall be continuing at the time of such redemption and, after
giving pro forma effect to any such redemption, no Default or Event of Default
shall occur and be continuing, including without limitation, any such Default or
Event of Default arising as the result of a violation of the terms of Article
VIII D hereof.
"Permitted Seller Note Indebtedness" Permitted Seller Note Indebtedness
----------------------------------
shall mean unsecured Indebtedness, in an aggregate principal amount not to
exceed $5,000,000 at any one time outstanding, arising under or related to
acquisitions of Representative Firms, provided that (i) after giving effect to
such Permitted Seller Note Indebtedness, no Default or Event of Default shall
have
-15-
occurred and shall be continuing (including, without limitation, any violation
of any Section in Articles 8(C) or 8(D) hereof), and (ii) any such Permitted
Seller Note Indebtedness should be expressly subordinated to the Obligations
pursuant to subordination documentation acceptable to the Majority Lenders in
their sole discretion.
"Permitted Subordinated Debt" shall mean the issuance of any subordinated
---------------------------
Indebtedness for borrowed money by any Borrower after the Closing Date,
provided, however that (i) all such Permitted Subordinated Debt shall be
- --------
unsecured, (ii) the provisions of all such Permitted Subordinated Debt shall
have been approved in writing by the Majority Lenders, (iii) the maturity date
of any such Permitted Subordinated Debt is not less than two years after the
Commitment Termination Date, and (iv) after giving effect to any such Permitted
Subordinated Debt, no Default or Event of Default shall have occurred and shall
be continuing (including, without limitation, any violation of any Section in
Articles VIII C or VIII D hereof).
"Person" shall mean an individual, a corporation, a partnership, a limited
------
liability company, a joint venture or adventure, a trust or estate or
unincorporated organization, a joint stock company or other similar
organization, a governmental or political subdivision thereof, or any other
legal entity.
"Plan" shall mean an employee pension benefit plan which is covered by
----
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Code, and is either (i) maintained by any of the Borrowers or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
any of the Borrowers is then making or accruing an obligation to make
contributions or has within the preceding six Plan years made contributions.
"Post-Default Rate" shall mean a rate per annum equal to 2% above the
-----------------
highest interest rate per annum otherwise applicable to any Loan pursuant to
Section 2.04 hereof.
"Prior Loan Documents" shall mean that certain Amended and Restated
--------------------
Revolving Line of Credit Agreement, dated as of September 19, 1997, entered into
among Interep National Radio Sales, Inc., McGavren Guild, Inc., D&R Radio, Inc.,
Group W Radio Sales, Inc., Allied Radio Partners, Inc., McGavren Guild Radio
Sales, Inc., Caballero Spanish Media L.L.C., Clear Channel Radio, LLC, and
Infinity Radio Sales LLC, as borrowers, the financial institutions parties
thereto, as lenders, Fleet National Bank, as administrative agent, and Summit
Bank and BankBoston, N.A., as co-documentation agents, and all notes
instruments, documents and agreements executed in connection therewith.
-16-
"Prohibited Transaction" shall mean a transaction that is prohibited under
----------------------
Section 4975 of the Code or Section 406 of ERISA and not exempt under Section
4975 of the Code or Section 408 of ERISA.
"Quarter" shall mean each period of three consecutive months ending on the
-------
last day of each March, June, September and December.
"Quarterly Compliance Certificates" shall mean the certificates delivered
---------------------------------
to the Lenders pursuant to Section 8.01(a) hereof.
"Quarterly Date" shall mean the last day of each March, June, September and
--------------
December, the first of which shall be on September 30, 1998, or, if any such day
is not a Business Day, the next succeeding Business Day.
"Regulation D" shall mean Regulation D of the Board of Governors of the
------------
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation G" shall mean Regulation G of the Board of Governors of the
------------
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation T" shall mean Regulation T of the Board of Governors of the
------------
Federal Revenue System as the same may be supplemented from time to time.
"Regulation U" shall mean Regulation U of the Board of Governors of the
------------
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulation X" shall mean Regulation X of the Board of Governors of the
------------
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" shall mean, with respect to any Lender, any change, on
-----------------
or after the Closing Date, in United States Federal, state or foreign laws or
regulations (including Regulation D), or the adoption or making on or after such
date of any interpretations, directives or requests applying to a class of banks
including such Lender, of or under any United States Federal, state or foreign
laws or regulations (whether or not having the force of law), by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Amount" shall have the meaning given to such term in Section
--------------------
2.01(f) hereof.
-17-
"Reportable Event" shall mean (i) any of the events set forth in Sections
----------------
4043(b) (other than a Reportable Event as to which the provision of 30 days'
notice to the PBGC is waived under applicable regulations), 4068(f) or 4063(a)
of ERISA or the regulations thereunder, (ii) an event requiring the Borrowers to
provide security to a Plan under Section 401(a)(29) of the Code, and (iii) any
failure to make payments required by Section 412(m) of the Code if such failure
continues for 30 days following the due date for any required payment.
"Representative Firm" shall mean a broadcast media representation firm
-------------------
which is engaged in the business of contracting with media systems or network
utilizers of media to act as agent in securing national advertising.
"Reserve Requirement" shall mean, for any Eurodollar Loan, the rate at
-------------------
which the Lenders are required to maintain reserves under Regulation D against
"Eurocurrency Liabilities" (as such term is used in Regulation D), including any
marginal, supplemental or emergency reserves. Without limiting the effect of
the foregoing, the Reserve Requirement shall reflect any other reserves actually
required to be maintained by the Lenders by reason of any Regulatory Change
applicable to (i) any category of liabilities which includes deposits by
reference to which the Eurodollar Rate is to be determined as provided in the
definition of Eurodollar Rate in this Section 1.01, or (ii) any category of
extensions of credit or other assets which include Eurodollar Loans.
"Restricted Payments" shall mean (i) direct or indirect distributions,
-------------------
dividends or other payments by the Borrowers on account of any general or
limited partnership or joint venture interest in, or any capital stock of, any
of the Borrowers, including, without limitation, sinking fund or other payments
on account of the redemption, retirement, purchase or acquisition of any such
interests or capital stock (whether made in cash, property or other
obligations), other than payment of salaries, bonuses, expense reimbursements
paid in the ordinary course of business, advances to employees of the Borrowers
made in the ordinary course of the Borrowers' business and not exceeding
$500,000 in the aggregate, "payment in kind" distributions on preferred stock or
"payment in kind" distributions on shares which have been distributed as
"payment in kind" and (ii) direct or indirect payments or distributions on or in
respect of the 1998 Subordinated Note Documents, whether on account of
principal, interest or other sums, or in respect of the purchase, repurchase,
redemption, retirement, acquisition or defeasance of any Indebtedness under the
1998 Subordinated Note Documents.
"Revolving Credit Commitment" shall mean, as to each Lender, the amount set
---------------------------
forth opposite its name on the signature pages hereto under the heading
"Revolving Credit Commitments" (as the same may be reduced or otherwise adjusted
from time to time as provided in this Credit Agreement).
-18-
"Revolving Credit Loans" shall mean the Loans made pursuant to Section 2.01
----------------------
(a) hereof.
"Revolving Credit Notes" shall mean the promissory notes evidencing the
----------------------
Revolving Credit Loans provided for by Section 2.01 (a) hereof.
"Securing Parties" shall mean the debtors, pledgors and grantors under the
----------------
Security Documents.
"Security Agreement" shall mean the Security Agreement granted by the
------------------
Securing Parties to the Agent substantially in the form of Exhibit D attached
------- -
hereto, as amended and in effect from time to time.
"Security Documents" shall mean the Security Agreement, the Stock Pledge
------------------
Agreements, the Membership Interest Pledge Agreements, the Trademark Collateral
Assignment Agreement and all documents relating thereto.
"Senior Debt" shall mean Indebtedness of the Borrowers arising under or
-----------
relating to (i) any of the Credit Documents, (ii) purchase money transactions,
(iii) financing leases and (iv) mortgages.
"Settlement. Obligations" shall mean the aggregate amount of any
-----------------------
liabilities or obligations of any of the Borrowers, whether or not contingent,
arising out of any judgment, settlement or compromise of any litigation,
arbitration, administrative or legal proceeding or investigation, whether
pending or threatened.
"Settlement Expenses" shall mean, for any period, the sum of all payments
-------------------
made with respect to Settlement Obligations.
"Shareholder Stock Appraisal Reports" shall mean stock appraisal reports in
-----------------------------------
the form customarily prepared by the Company in connection with the Stock Growth
Plan.
"Solvency Certificate" shall mean a certificate of the Chief Financial
--------------------
Officer or Treasurer of each of the Borrowers in substantially the form of
Exhibit E hereto.
- ------- -
"Stock Growth Plan" shall mean the Interep Radio Store Stock Growth Plan,
-----------------
effective as of January 1, 1995, as in effect from time to time.
"Stock Pledge Agreements" shall mean the Stock Pledge Agreements among the
-----------------------
Securing Parties and the Agent substantially in the form of Exhibit F hereto, as
------- -
amended and in effect from time to time.
-19-
"Subsidiary" shall mean, with respect to any Person, any corporation,
----------
limited liability company, partnership, joint venture or adventure, trust or
estate with respect to which:
(a) in the case of a corporation, such Person owns, directly or indirectly,
a majority of the outstanding capital stock of such corporation necessary to
elect a majority of the Board of Directors (whether or not such Person's voting
power may be diluted upon the occurrence of any contingency);
(b) in the case of a limited liability company, partnership or joint
venture, such Person is a general partner, joint venture, or managing member or
such Person owns, directly or indirectly, a majority of the partnership,
membership or other ownership interests; or
(c) in the case of a trust or estate, such Person owns, directly or
indirectly, the beneficial interest of such trust or estate.
The Subsidiaries of the Company as of the date hereof are set forth on Schedule
--------
1.01(i) hereto.
- -------
"Subsidiary Borrowers" shall have the meaning given to such term in the
--------------------
preamble to this Credit Agreement.
"Termination Event" shall mean (i) a Reportable Event, (ii) the termination
-----------------
of a Plan, or the filing of a notice of intent to terminate a Plan, or the
treatment of a Plan amendment as a termination under Section 4041 (c) of ERISA,
(iii) the institution of proceedings to terminate a Plan under Section 4042 of
ERISA, or (iv) the appointment of a trustee to administer any Plan under Section
4042 of ERISA.
"Total Debt Service" shall mean, for any period, the Total Interest Expense
------------------
for such period plus the amount of any principal payments required to be made
pursuant to Section 3.02 hereof for such period, plus any other scheduled
payments of principal, interest and expenses or other charges on account of any
other Indebtedness of the Borrowers during such period (including, but not
limited to, Settlement Expenses and any principal portion paid with respect to
Capital Lease Obligations or Permitted Seller Note Indebtedness).
"Total Funded Debt" shall mean all Indebtedness of the Borrowers for
-----------------
borrowed money or extensions of credit (other than in connection with operating
leases) which bear interest, including, without limitation, the obligations of
the Borrowers hereunder in respect of the principal of and interest on the
Loans, outstanding Indebtedness pursuant to the Settlement Obligations, any
-20-
Permitted Seller Note Indebtedness, and any Permitted Subordinated Debt;
provided, however, the amount of Permitted Subordinated Debt to be included the
- -------- -------
calculation of Total Funded Debt shall include the face amount of all Permitted
Subordinated Debt without any deduction for original issue discount required by
GAAP.
"Total Interest Expense" shall mean, for any period, the sum of the
----------------------
aggregate amount of interest accrued in respect of Indebtedness of the Borrowers
(including the interest component in respect of Capital Lease Obligations). For
purposes hereof, the amount of interest accrued in respect of Indebtedness for
any period shall be increased (to the extent not already treated as interest
expense) by the excess, if any, of amounts payable by the Borrowers arising
under any Interest Rate Hedging Agreements during such period over amounts
receivable by the Borrowers thereunder (or reduced by the excess, if any, of
such amounts receivable over such amounts payable). Interest on any Capital
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Borrowers to be the rate of interest implicit in such Capital
Lease Obligation in accordance with GAAP taking into account the provisions of
Statement of Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board.
"Total Leverage" shall mean, at any time, the ratio of (i) Total Funded
--------------
Debt to (ii) EBITDA for the immediately preceding four Quarter period for which
the most recent financial statements are required to be delivered pursuant to
Section 8.01 hereof.
"Total Revolving Credit Commitment" shall mean, at any time, the aggregate
---------------------------------
amount of the Revolving Credit Commitments of all the Lenders (as the same may
be reduced or otherwise adjusted from time to time as provided in this Credit
Agreement).
"Trademark Collateral Assignment Agreement" shall mean the Trademark
-----------------------------------------
Collateral Assignment Agreement among the Securing Parties and the Agent
substantially in the form of Exhibit G hereto, as amended and in effect from
------- -
time to time.
"Type" shall mean and describe, with respect to a Revolving Credit Loan,
----
whether such Revolving Credit Loan is a Base Rate Loan or a Eurodollar Loan.
Section 1.02 Accounting Terms. Unless otherwise specified herein, all
----------------
accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all financial
statements and certificates and reports as to financial matters required to be
delivered hereunder shall be prepared, in accordance with GAAP, applied on a
-21-
basis consistent with the audited financial statements of the Borrowers referred
to in Section 7.04 hereof.
Section 1.03 Fiscal Year. To enable the ready determination of compliance
-----------
by the Borrowers with the various covenants set forth in Article VIII hereof,
the Borrowers agree that the fiscal year of each Borrower shall end each
December 31, and the first three Quarters in each fiscal year shall end on March
31, June 30 and September 30, respectively.
ARTICLE II
THE LOANS
---------
Section 2.01 Amounts and Types of Loans. Each Lender severally agrees to
--------------------------
make Loans to the Borrowers in accordance with the following terms and
conditions.
(a) Revolving Credit Loans. On or after the Effective Date, each Lender
----------------------
shall make one or more Revolving Credit Loans to the Borrowers from time to time
on any Business Day prior to the Commitment Termination Date, in an aggregate
principal amount not to exceed at any time outstanding such Lender's Revolving
Credit Commitment; provided, however, that the sum of (x) the aggregate
-------- -------
principal amount of all Loans plus (y) the Letter of Credit Exposure plus (z)
the aggregate principal amount of all Reimbursement Amounts shall not at any
time exceed the Total Revolving Credit Commitment. The Revolving Credit Loans
made by each Lender shall be evidenced by a Revolving Credit Note executed and
delivered by the Borrowers and substantially in the form of Exhibit A hereto,
------- -
each dated as of the Effective Date and payable to the order of such Lender in a
principal amount equal to such Lender's Revolving Credit Commitment as of the
Effective Date.
(b) Types of Loans. The Loans, at the option of the Borrowers, may be made
--------------
as, and from time to time continued as, or converted into, Base Rate Loans or
Eurodollar Loans or any combination thereof.
(c) Letters of Credit. Subject to the terms and conditions hereof, and
-----------------
provided that no Event of Default has occurred and is continuing, the Letter of
Credit Lender shall, upon the request of the Borrowers pursuant to Section
2.01(d) hereof, issue Letters of Credit for the account of the Borrowers prior
to the Commitment Termination Date, provided, however, that (i) the aggregate
-------- -------
face amount of all outstanding Letters of Credit shall not at any time exceed
$1,000,000, and (ii) each such Letter of Credit shall terminate no later than
the Commitment Termination Date. Such Letters of Credit shall only be issued in
conformity with the policies and requirements of the Letter of Credit Lender
existing at the time of such issuance relating to the issuance of letters of
credit
-22-
generally for customers of the Letter of Credit Lender, including, without
limitation, the use of applications, agreements, forms and other documentation
customarily utilized by the Letter of Credit Lender when issuing letters of
credit.
(d) Procedure for Issuing Letters of Credit. The Borrowers may request
---------------------------------------
that the Letter of Credit Lender issue a Letter of Credit by written notice to
the Agent and the Letter of Credit Lender in accordance with the standard
practices for issuance of letters of credit by the Letter of Credit Lender given
to the Agent and the Letter of Credit Lender not less than five Business Days
prior to the proposed date of issuance of such Letter of Credit.
(e) Fees and Expenses. The Borrowers hereby agree to pay to the Letter of
-----------------
Credit Lender, for its own account, sums equal to any and all customary fees
charged by the Letter of Credit Lender in connection with the issuance of
letters of credit for customers of the Letter of Credit Lender, together with
any expenses which the Letter of Credit Lender may pay or incur relative to the
issuance of any Letter of Credit, any amendment, transfer, or negotiation
thereof, or any payment by the Letter of Credit Lender of a draw thereunder.
(f) Reimbursement Obligation. The Borrowers hereby agree to pay to the
------------------------
Letter of Credit Lender, on the date on which the Letter of Credit Lender shall
be required to pay any draft presented under any Letter of Credit, a sum (the
"Reimbursement Amount") equal to: (i) the amount so paid under such Letter of
Credit, plus (ii) interest on any amount remaining unpaid by the Borrowers to
the Letter of Credit Lender under clause (i) for the period from and including
the date on which such amount becomes payable pursuant to clause (i) until
payment in full, payable on demand, at the rate of interest applicable to Base
Rate Loans. If the Borrowers shall fail to pay to the Letter of Credit Lender
the Reimbursement Amount on the date on which the Letter of Credit Lender shall
be required to pay any draft presented under any Letter of Credit, the Letter of
Credit Lender may, at its election, consider such failure to be a request for
Base Rate Loans in the aggregate principal amount of the unpaid Reimbursement
Amount. The Borrowers hereby authorize the Letter of Credit Lender, without
further request from the Borrowers, to direct the Agent to cause the Borrowers'
liability to the Letter of Credit Lender for reimbursement to be repaid from the
proceeds of Base Rate Loans to be made hereunder; provided, however, that in the
-------- -------
event that the Lenders do not make such Base Rate Loans for any reason, each
Lender shall pay to the Agent, acting on behalf of the Letter of Credit Lender,
in immediately available funds, not later than 3:00 p.m. (Boston, Massachusetts
time) on the date of such payment (or if the Agent shall notify such other
Lender of such payment after 1:00 p.m. (Boston, Massachusetts time), not later
than 3:00 p.m. (Boston Massachusetts time) on the next succeeding Business Day),
an amount equal to its ratable share of such payment based on its Commitment
Percentage. Each Lender's obligation to
-23-
make such payment to the Agent shall be absolute and unconditional under any and
all circumstances without regard to any termination or reduction of the total
Revolving Credit Commitment, any demand for payment of any Obligations or any
failure of any other Lender to make such payment. Promptly upon its receipt of
funds from the Lenders, the Agent shall pay such amounts, in immediately
available funds, to the Letter of Credit Lender, whereupon each such Lender
which pays the Agent as aforesaid shall have a participation in the Letter of
Credit equal to its Commitment Percentage.
Section 2.02 Procedure for Making Revolving Credit Loans.
-------------------------------------------
(a) Revolving Credit Loans shall be made pursuant to a notice (a "Notice of
Borrowing") given by the Company, on behalf of the Borrowers, to the Agent not
later than 1:00 p.m. (Boston, Massachusetts time) (y) in the case of Base Rate
Loans, on the day of the requested Base Rate Loans, or (z) in the case of
Eurodollar Loans, at least three Eurodollar Business Days prior to the date of
the requested Eurodollar Loans. Each such Notice of Borrowing shall be given to
the Agent by telephone, telecopy, telex or cable, in each case confirmed
immediately in writing by the Borrowers in substantially the form of Exhibit H
------- -
hereto, specifying therein (i) the requested date of such Loans (which date
shall be a Business Day, in the case of Base Rate Loans, and a Eurodollar
Business Day, in the case of Eurodollar Loans), (ii) the aggregate principal
amount of such Loans (which must be in integral multiples of $100,000), (iii)
whether such request is a request for Base Rate Loans or Eurodollar Loans, and
(iv) in the case of Eurodollar Loans, the duration of the requested Interest
Period. In the event the Borrowers shall fail to state the Type of Loans, or,
if the Borrowers shall select Eurodollar Loans but shall fail to select an
Interest Period with respect to such Loans, the Borrowers shall be deemed to
have chosen Base Rate Loans. The Borrowers hereby agree that each request for
Loans shall constitute a representation and warranty by the Borrowers that no
Default or Event of Default has occurred and is continuing under the Credit
Documents. The Agent shall notify each of the Lenders of any requested Loans
promptly after the Agent receives a Notice of Borrowing requesting such Loans
and of such Lender's share thereof based on its Commitment Percentage. The
Borrowers agree to indemnify and hold the Agent and the Lenders harmless for any
action, including the making of any Loans hereunder, or loss or expense
(excluding the Lenders' or the Agent's internal costs and expenses), taken or
incurred by the Agent or the Lenders in good faith reliance upon any such
request for Revolving Credit Loans.
(b) Not later than 3:00 p.m. (Boston, Massachusetts time) on the date
specified for each borrowing hereunder, each Lender shall make available to the
Agent, at its address for notices specified in Section 11.02 hereof, the amount
of the Revolving Credit Loan to be made by it on such date in immediately
available funds. The amounts so received by the Agent shall, subject to the
-24-
terms and conditions of this Agreement, be made available to the Borrowers by
depositing the same, in immediately available funds, in a designated account of
the Borrowers, which account is maintained at the office of the Agent, or by
wiring the same, in immediately available funds, to any other account specified
by the Borrowers in the Notice of Borrowing.
(c) Unless the Agent shall have received a notice from a Lender prior to
the date of funding any Loan stating that such Lender will not make available to
the Agent the amount of the Loan to be made by it on such date, the Agent may
assume that such Lender has made such amount available to the Agent on the date
of such Loan in accordance with and as provided by this Section 2.02(c), and the
Agent may, in reliance upon such assumption, make available on such date a
corresponding amount to the Borrowers. If and to the extent such Lender shall
not have made available to the Agent the amount of the Loan to be made by it on
such date, and the Agent shall have made available such corresponding amount to
the Borrower, such Lender agrees to pay the Agent forthwith on demand, and the
Borrowers agree to repay to the Agent within thirty (30) days after demand (but
only after demand for payment has first been made to such Lender and such Lender
has failed to make such payment), an amount equal to such corresponding amount
together with interest thereon, for each day from the date the Agent shall have
made such amount available to the Borrowers until the date such amount is paid
or repaid to the Agent, at the then current Federal Funds Rate, in the case of
such Lender, and the higher of (i) the interest rate applicable thereto pursuant
to Section 2.04 hereof and (ii) the Federal Funds Rate, in the case of the
Borrowers. If such Lender shall pay to the Agent such corresponding amount,
such amount so paid shall constitute such Lender's Loan for the purposes of this
Credit Agreement. If the Borrowers make a repayment required by the foregoing
provisions of this Section 2.02(c) and thereafter such Lender makes the payments
to the Agent required by this Section 2.02(c), the Agent will promptly refund
the amount of the repayment made by the Borrowers.
Section 2.03 Conversion and Continuation of Loans.
------------------------------------
(a) All or any part of the principal amount of a Loan may, on any Business
Day, be converted into another Type of Loan; provided, however, that Eurodollar
-------- -------
Loans may be converted into Base Rate Loans only on the last day of the
applicable Interest Period; provided, further, that the share of each Lender in
-------- -------
the Loans being so converted shall correspond to its Commitment Percentage.
(b) Base Rate Loans shall continue as Base Rate Loans unless and until such
Loans are converted into Eurodollar Loans.
(c) Each Eurodollar Loan shall continue as a Eurodollar Loan until the end
of the then current Interest Period applicable thereto, at which time such
-25-
Loans shall be automatically converted into Base Rate Loans unless the Borrowers
shall have given the Agent notice in accordance with Section 2.03(e) hereof
requesting that such Eurodollar Loans continue as Eurodollar Loans for another
Interest Period.
(d) Notwithstanding anything to the contrary contained in this Section
2.03, upon the occurrence and continuation of a Default or an Event of Default,
Loans may not be converted into or continued as Eurodollar Loans, unless the
Majority Lenders shall instruct the Agent to notify the Borrowers, and the Agent
so notifies the Borrowers in writing, that Loans may be converted into or
continued as Eurodollar Loans.
(e) The Borrowers shall give the Agent notice of each conversion or
continuation of Loans not later than 1:00 p.m. (Boston, Massachusetts time) as
follows: (y) at least three Eurodollar Business Days prior to the date of any
requested conversion of a Base Rate Loan into a Eurodollar Loan, or (z) at least
three Eurodollar Business Days prior to the date of any requested continuation
of a Eurodollar Loan. Such notice shall be substantially in the form of Exhibit
-------
I hereto, and shall be irrevocable and effective only upon receipt by the Agent.
- -
Such notice shall specify (i) the aggregate amount and the description of the
Loans to be converted or continued, (ii) the requested date of such conversion
or continuation, and (iii) the amount and Type of Loans into which such Loans,
if any, are to be converted, or the amount of the Loans, if any, which are to be
continued and, in the case of continued Eurodollar Loans, or Loans being
converted into Eurodollar Loans, the duration of the Interest Period therefor.
Section 2.04 Interest.
--------
(a) The Borrowers shall pay to each Lender interest on the unpaid principal
amount of each Loan made by such Lender, at the following rates per annum:
(i) if such Loan is a Base Rate Loan, the Base Rate plus the Base Rate
Loan Interest Margin for each day that such Loan is outstanding; or
(ii) if such Loan is a Eurodollar Loan, the Eurodollar Rate for the
applicable Interest Period plus the Eurodollar Loan Interest Margin.
Notwithstanding the foregoing, upon the occurrence of an Event of Default
hereunder, the Borrowers shall pay to each Lender interest at the Post-Default
Rate on the outstanding principal balance of any Loan made by such Lender, and
on any other amount payable by the Borrowers hereunder to or for the account of
such Lender, until the same is paid in full or, if applicable, until such Event
of Default is cured.
-26-
(b) The Base Rate Loan Interest Margin and the Eurodollar Loan Interest
Margin shall be adjusted within ten (10) days of the receipt by the Agent of the
Borrowers' Quarterly Compliance Certificates delivered pursuant to Section
8.01(a) hereof, and the adjusted Base Rate Loan Interest Margin and the adjusted
Eurodollar Loan Interest Margin shall apply to all outstanding balances from the
date of such adjustment forward. The Interest Margin shall be based on the
computation of Total Leverage calculated from such Quarterly Compliance
Certificates as follows:
Total Base Rate Loan Eurodollar
Leverage Interest Margin Loan
- -------- --------------- Interest Margin
---------------
greater than or equal to 1.875% 2.875%
4.50:1
greater than or equal to 1.625% 2.625%
4.00:1; but less than 4.50:1
greater than or equal to 1.375% 2.375%
3.50:1 but less than 4.00:1
greater than or equal to 1.125% 2.125%
3.00:1 but less than 3.50:1
greater than or equal to 0.875% 1.875%
2.00:1 but less than 3.00:1
less than 2.00:1 0.625% 1.625%
(c) Accrued interest on each Loan shall be payable (i) in the case of a
Base Rate Loan, on each Quarterly Date and, in the case of a Eurodollar Loan, on
the last day of the Interest Period for such Eurodollar Loan and, if such
Interest Period is longer than three months, on the day which falls three months
after the first day thereof, (ii) when such Loan shall become due and payable
(whether at maturity, by reason of prepayment or acceleration or otherwise) and
(iii) on the date of conversion of such Loan to another Type of Loan. After the
determination of any interest rate provided for herein or any change thereto,
the Agent shall notify the Lenders and the Borrowers thereof
(d) All computations of interest and fees hereunder shall be made by the
Agent (i) in the case of fees and Eurodollar Loans, on the basis of a year of
360 days, and (ii) in the case of Base Rate Loans, on the basis of a year of 365
or 366 days, as the case may be, in each case for the actual number of days
elapsed (including the first day but excluding the last day). No interest
payment or interest rate charged hereunder shall exceed the maximum rate
authorized from time to time by applicable law.
-27-
Section 2.05 Fees.
----
(a) The Borrowers shall pay to each Lender a commitment fee on the daily
average unutilized amount of such Lender's Revolving Credit Commitment for the
period from and including the Effective Date to, but not including, the earlier
of (i) the date such Lender's Revolving Credit Commitment is terminated or (ii)
the Commitment Termination Date, at a rate per annum (based on a year of 360
days) equal to .50%, if Total Leverage (calculated from the most recent
Quarterly Compliance Certificate) is greater than or equal to 3.00:1, and .375%
if such Total Leverage is less than 3.00:1, of the unused portion of such
Lender's Revolving Credit Commitment. For purposes of calculating such
commitment fee, the Revolving Credit Commitment of each Lender shall be deemed
to be utilized in an amount equal to the aggregate outstanding principal amount
of such Lender's Revolving Credit Loans. Accrued commitment fees under this
Section 2.05(a) shall be payable in arrears on each Quarterly Date.
(b) The Borrowers shall pay to the Agent, for the account of the Lenders, a
Facility Fee in accordance with the terms of the commitment letters executed and
delivered by the Lenders in respect of the transactions contemplated hereby.
(c) The Borrowers shall pay to the Agent an Agent's fee in accordance with
Section 10.09 hereof.
Section 2.06 Reductions to Commitments.
-------------------------
(a) Reduction. The Borrowers shall have the right to reduce, in whole or
---------
in part, the unutilized Total Revolving Credit Commitment at any time or from
time to time, provided that (i) the Borrowers shall give notice of each such
reduction to the Agent at least two Business Days prior thereto and (ii) each
partial reduction thereof shall be in an aggregate amount of not less than
$100,000. Any such reduction to the Total Revolving Credit Commitment shall also
reduce each Lender's Revolving Credit Commitment by an amount equal to the
product of such total reduction multiplied by such Lender's Percentage
Commitment in respect of the Total Revolving Credit Commitment (prior to
reduction).
(b) No Reinstatement. The Total Revolving Credit Commitment, and each
----------------
Lender's Revolving Credit Commitment, once terminated or reduced, may not be
reinstated.
Section 2.07 Several Obligations; Remedies of Lenders. The failure of any
----------------------------------------
Lender to make any Loan required to be made hereunder shall not relieve any
other Lender of its obligations hereunder, but neither the Agent nor any Lender
shall be responsible for the failure of any other Lender to comply with
-28-
the provisions of this Credit Agreement. The amounts payable by the Borrowers
hereunder and under the Notes shall be a separate and independent debt owing to
each Lender and the Agents, and each of the Lenders and the Agents shall,
subject to the limitations contained in the Credit Documents, be entitled to
protect and enforce its rights arising out of the Credit Documents, and it shall
not be necessary for any other Lender or any Agent to be joined as an additional
party in any proceedings for such purposes.
Section 2.08 Use of Proceeds. The proceeds of the Revolving Credit Loans
---------------
shall be used by the Borrowers for capital expenditures, working capital and
other general business purposes of the Borrowers, including, without limitation,
the acquisition of Contracts. The proceeds of any extension of credit hereunder
shall not be used in violation of the provisions of Section 7.07 hereof.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
----------------------------------
Section 3.01 Prepayments.
-----------
(a) Voluntary Payments. The Borrowers may, at any time and from time to
------------------
time, prepay, in whole or in part, the principal balance of any Loans upon not
less than three Business Days' prior notice, in the case of Base Rate Loans, and
five Eurodollar Business Days prior notice, in the case of Eurodollar Loans, to
the Agent (which shall notify the Lenders thereof), which notice shall specify
the prepayment date (which shall be a Business Day), and the amount of the
prepayment (which shall be not less than $100,000) provided that interest on the
principal prepaid, accrued to the prepayment date, and, in the case of a
prepayment of Eurodollar Loans on a day other than the last day of an Interest
Period applicable thereto, any amounts payable pursuant to Section 3.01(b)
hereof shall be paid on the prepayment date. Such prepayment shall be
irrevocable and effective only upon receipt by the Agent. All payments made by
the Borrower pursuant to this Section 3.01 (a) shall be applied first, to the
amount of any interest outstanding pursuant to such Loan and any amounts payable
pursuant to Section 3.01(b) hereof, and second, to the amount of the principal
balance of such Loan.
(b) Breakage Costs. If the Borrowers make any payment of principal with
--------------
respect to any Eurodollar Loans on any day other than the last day of the
Interest Period applicable to such Eurodollar Loans, the Borrowers shall pay to
the Lenders any Eurodollar Breakage Costs incurred by the Lenders on account of
such payment. In addition, if the Borrowers make any payment of principal with
respect to Loans which are the subject of an Interest Rate Hedging Agreement,
the Borrowers shall pay all Hedging Breakage Costs incurred by the
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any Lender which is a party to such Interest Rate Hedging Agreement with any
such Borrower.
Section 3.02 Mandatory Prepayments. If, after giving effect to any
---------------------
termination or reduction of the Revolving Loan Commitments pursuant to Section
2.06(a), the aggregate outstanding principal balance of the Revolving Credit
Loans exceeds the Total Revolving Credit Commitment, the Borrowers shall repay
Revolving Credit Loans on the date of such termination or reduction in an
aggregate principal amount equal to such excess.
Section 3.03 Records of Loans and Payments. Each Lender is hereby
-----------------------------
authorized by the Borrowers to set forth in writing on a schedule attached to
each Note of such Lender (or on any continuation thereof) the amount and date of
each Loan made by such Lender to the Borrowers hereunder, and the amount of each
payment on account of principal or interest of such Loans received by such
Lender, provided, however, that any failure by such Lender to make any such
-------- -------
notation shall not affect the obligations of the Borrowers under such Note or
hereunder in respect of such Loans.
ARTICLE IV
PAYMENT PROCEDURES; DISTRIBUTIONS TO LENDERS
--------------------------------------------
Section 4.01 Procedure For Making Payments. Except to the extent
-----------------------------
otherwise provided herein, all payments of principal, interest and other amounts
to be made by the Borrowers hereunder and under the Notes shall be made in
Dollars, in immediately available funds, to the Agent not later than 11:00 a.m.
(Boston, Massachusetts time) on the date on which such payment shall become due
without set-off, recoupment, counterclaim or deduction of any nature whatsoever.
Any such payment made after such time on such due date shall be deemed to have
been made on the next succeeding Business Day. Any Lender may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time and date to any ordinary deposit or checking account of the Borrowers or
any of them maintained with such Lender. Except as otherwise required by the
terms of this Credit Agreement, the Borrowers may, at the time of making each
payment hereunder or under any Note, specify to the Agent the Loans or other
amounts payable by the Borrowers hereunder to which such payment is to be
applied (but in the event that the Borrowers fail to so specify, or if an Event
of Default has occurred and is continuing, the Lenders may apply such payment as
they may elect in their sole discretion). Each payment hereunder shall be paid
promptly to the Agent at its address for notices as set forth in Section 11.02.
Whenever any payment of principal of, or interest on, the Base Rate Loans or of
fees shall be due on a day which is not a Business Day, the date for payment
thereof shall be extended to the next succeeding Business Day. Whenever any
payment of principal of, or interest on, the
-30-
Eurodollar Loans shall be due on a day which is not a Eurodollar Business Day,
the date for payment thereof shall be extended to the next succeeding Eurodollar
Business Day unless such Eurodollar Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
Eurodollar Business Day.
Section 4.02 Pro Rata Treatment. Except to the extent otherwise provided
------------------
herein: (i) Loans should be advanced by the Lenders pro rata according to their
respective Commitment Percentages, as applicable, and each payment made by the
Borrowers on account of such Loans shall be paid to the Agent and distributed to
the Lenders pro rata according to their respective Commitment Percentages, and
shall be applied to each Loan first, to any accrued but unpaid interest, and
second, to the principal balance of each Loan. Each payment of fees due to be
paid by the Borrowers pursuant to Section 2.05(a) shall be made to the Lenders
pro rata in accordance with their respective Commitment Percentages.
Section 4.03 Sharing of Payments, Etc.
------------------------
Each of the Borrowers agrees that, in addition to (and without limitation of)
any right of set-off, banker's lien or counterclaim which a Lender may otherwise
have, each Lender shall be entitled, upon the occurrence and during the
continuance of a Default or Event of Default, to offset balances held by it for
the account of any of the Borrowers at any of its offices, in Dollars or in any
other currency, against any principal of or interest on any of such Lender's
Loans hereunder, which is not paid when due (regardless of whether such balances
are then due to the Borrowers), whereupon it shall promptly notify the Borrowers
and the Agent thereof, provided that such Lender's failure to give such notice
shall not affect the validity thereof If a Lender shall obtain payment of any
principal of, or interest on any Loan made by it to the Borrowers under this
Credit Agreement through the exercise of any right of set-off, banker's lien,
counterclaim or similar right or otherwise, and, as a result of such payment,
such Lender shall have received a greater percentage of the amounts then due
from the Borrowers to such Lender than it would otherwise be entitled to receive
pursuant to its Commitment Percentage, such Lender shall promptly purchase from
any other Lender which receives less than its Commitment Percentage a
participation in the Loans made by such other Lender in such amounts, and make
such other adjustments from time to time as shall be equitable, to the end that
all the Lenders shall share the benefit of such excess payment (net of any
expense which may be incurred by such Lender in obtaining or preserving such
excess payment) pro rata in accordance with the Commitment Percentage of each
Lender. To such end, all the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if such payment
is rescinded or must otherwise be restored. The Borrowers agree that any Lender
so purchasing a participation in the Loans made by other Lenders may exercise
all rights of set-off, banker's lien, counterclaim or similar rights with
respect to such participation as fully as
-31-
if such Lender were a direct holder of Loans in the amount of such
participation. Nothing contained herein shall require any Lender to exercise any
such right or shall affect the right of any Lender to exercise and retain the
benefits of exercising any such right with respect to any other indebtedness or
obligation of the Borrowers. If, under any applicable bankruptcy, insolvency or
other similar law, any Lender receives a secured claim in lieu of a set-off to
which this Section 4.03 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section 4.03 to share in the
benefits of any recovery on such secured claim.
Section 4.04. Withholding Taxes. All payments by the Borrowers of
-----------------
principal of and interest on the Notes and of all other amounts payable under
this Credit Agreement are payable without deduction for or on account of any
present or future taxes, duties or other charges levied or imposed by any
Governmental Authority or by any political subdivision or taxing authority
thereof or therein through withholding or deduction with respect to any such
payments. If any such taxes, duties or other charges are so levied or imposed,
the Lender or the Agent, as the case may be, so affected shall notify the Agent
and the Borrowers thereof as promptly as practicable after it obtains knowledge
thereof, and the Borrowers will pay additional interest or will make additional
payments in such amounts so that every net payment of principal of and interest
on the Notes and of all other amounts payable by them under this Credit
Agreement, after withholding or deduction for or on account of any such present
or future taxes, duties or other charges, will not be less than the amount
provided for herein; provided, however, that the failure of the Lender or the
-------- -------
Agent so affected to give such notice shall not affect the obligations of the
Borrowers under this Section 4.04. The Borrowers shall furnish promptly to the
Agent official receipts evidencing the payment of such taxes, duties or other
charges.
ARTICLE V
YIELD PROTECTION AND ILLEGALITY
-------------------------------
Section 5.01 Additional Costs in Respect of Loans.
------------------------------------
(a) The Borrowers shall pay to the Agent from time to time such amounts as
any Lender may determine to be necessary to compensate it for any costs incurred
by such Lender, which such Lender determines are attributable to its making or
maintaining any Loans hereunder or its commitment to make such Loans hereunder,
or any reduction in any amount receivable by such Lender hereunder in respect of
such Loans (collectively "Additional Costs"), resulting from any Regulatory
Change which:
-32-
(i) changes the basis of taxation of any amounts payable to such
Lender under this Credit Agreement or the Notes in respect of such Loans;
or
(ii) imposes any reserve, special deposit or other requirement (other
than any reserve included in the Eurodollar Reserve Percentage with respect
to Eurodollar Loans) or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirements relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of,
such Lender (including any deposits referred to the definition of
"Eurodollar Rate" in Section 1.01 hereof), or any commitments of such
Lender; or
(iii) imposes any other similar or like condition affecting this
Credit Agreement or the commitments of such Lender.
Each Lender shall notify the Agent and the Borrowers of any event which shall
entitle such Lender to compensation pursuant to this Section 5.01(a) as promptly
as practicable after it obtains knowledge thereof and determines to request such
compensation. Each Lender will furnish the Agent and the Borrowers with a
statement setting forth the basis and amount of each request by such Lender for
compensation under this Section 5.01(a). If any Lender requests compensation
from the Borrowers under this Section 5.01(a), the Borrowers may, by notice to
such Lender, require that any Loan for which compensation is requested be
converted into a different Type of Loan in accordance with Section 2.03 hereof.
(b) Without limiting the effect of the foregoing provisions of this Section
5.01, in the event that, by reason of any Regulatory Change, any Lender either
(i) incurs Additional Costs based on or measured by the excess above a specified
level of the amount of a category of deposits or other liabilities of such
Lender (which includes deposits by reference to which the interest rate on any
Eurodollar Loans is determined as provided in this Credit Agreement) or a
category of extensions of credit or other assets of such Lender (which includes
any Eurodollar Loans), or (ii) becomes subject to restrictions on the amount of
such category of liabilities or assets which it may hold, then, if such Lender
so elects by notice to the Borrowers (with a copy to the Agent), the obligation
of such Lender to make the Type of Loans which are subject to such Additional
Costs or such restrictions, and to convert any Loan into such Type of Loan,
shall be suspended until the date such Regulatory Change ceases to be in effect.
(c) Without limiting the effect of the foregoing provisions of this Section
5.01 (but without duplication), the Borrowers shall pay directly to each Lender
from time to time on request such amounts as such Lender may determine to be
necessary to compensate such Lender for Capital Maintenance
-33-
Costs with respect to its Loans (such compensation to include, without
limitation, an amount equal to any reduction of the rate of return on assets or
equity of such Lender to a level below that which such Lender could have
achieved but for such law, regulation, interpretation, directive or request).
Each Lender will notify the Borrowers that it is entitled to compensation
pursuant to this Section 5.01(c) as promptly as practicable after it determines
to request such compensation.
(d) Determinations by any Lender for purposes of this Section 5.01 of the
effect of any Regulatory Change on its costs of making or maintaining Loans or
maintaining its commitments or on amounts receivable by it in respect of Loans
or such commitments, and of the additional amounts required to compensate such
Lender in respect of any Additional Costs, shall be conclusive absent manifest
error.
Section 5.02 Limitation on Types of Loans. Anything herein to the
----------------------------
contrary notwithstanding, if, with respect to any Eurodollar Loans:
(i) the Agent determines (which determination shall be conclusive) that
quotations of interest rates for the relevant deposits referred to in the
definition of "Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for such Loans as provided in
this Credit Agreement; or
(ii) a Lender reasonably determines and notifies the Agent, the Borrowers
and the other Lenders that the relevant rates of interest referred to in
the definition of "Eurodollar Rate" in Section 1.01 hereof do not
adequately cover the cost to such Lender of making or maintaining such
Loans;
then, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make Eurodollar Loans and the Borrowers shall not be
entitled to convert Base Rate Loans into Eurodollar Loans, and upon the
expiration of any Interest Period applicable to Eurodollar Loans, such Loans
shall convert to Base Rate Loans.
Section 5.03 Illegality. Notwithstanding any other provision of this
----------
Credit Agreement to the contrary, in the event that it becomes unlawful for any
Lender to (i) honor its obligation to make a particular Type of Loan hereunder,
or (ii) maintain a particular Type of Loan hereunder, then such Lender shall
promptly notify the Agent and the Borrowers thereof (which notice shall include
a statement explaining the nature of such unlawfulness) and such Lender's
obligation to make such Type of Loan shall be suspended until such time as such
Lender may again make and maintain such Type of Loan, and such Lender's
-34-
outstanding Loans constituting such Type of Loan shall be converted into another
Type of Loan in accordance with Section 2.03 hereof.
Section 5.04 Compensation.
------------
(a) The Borrowers shall pay to each Lender, upon the request of such
Lender, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, costs or expenses incurred by it
as a result of:
(i) any payment, prepayment or conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Article IX hereof) on a date other than the last day of an
Interest Period for such Loan; or
(ii) any failure by the Borrowers for any reason (including, without
limitation, the failure of any of the conditions precedent specified in
Article VI hereof to be satisfied) to borrow a Eurodollar Loan to be made
by such Lender on the date for such borrowing specified in the relevant
Notice of Borrowing under Section 2.02 hereof.
(b) Such compensation shall include Eurodollar Breakage Costs in the case
of any payment, prepayment or conversion of, or failure to borrow, any Loan made
or to be made as a Eurodollar Loan.
Section 5.05 Replacement of Lenders. If any Lender requests compensation
----------------------
pursuant to Section 5.01 or 4.04, or such Lender's obligation to make or
continue, or to convert Loans into any other Type of Loan shall be suspended
pursuant to Section 5.02 or Section 5.03, the Borrowers, upon three Business
Days' notice to the Agent and such Lender, may request that such Lender transfer
the administration of this Credit Agreement and such Lender's Notes to another
lending office of such Lender, or require that such Lender transfer all of its
right, title and under this Credit Agreement and such Lender's Notes to any bank
or financial institution identified by the Borrowers with the consent of the
Agent (which consent shall not be unreasonably withheld); provided, however,
-------- -------
that such proposed transferee agrees to assume all of the obligations of such
Lender for consideration equal to the outstanding principal amount of such
Lender's Loans, together with interest thereon to the date of such transfer, and
satisfactory arrangements are made for payment to such Lender of all other
amounts payable hereunder to such Lender on or prior to the date of such
transfer (as if all of such Lender's Loans were being prepaid in full on such
date). The agreements of the Borrowers contained in Sections 11.03 and 11.04
(without duplication of any payments made to such Lender by the
-35-
Borrowers or the proposed transferee) shall survive for the benefit of any
Lender replaced under this Section 5.05 with respect to the time period prior to
such replacement.
ARTICLE VI
CONDITIONS PRECEDENT TO MAKING LOANS
------------------------------------
Section 6.01 Initial Loans. The obligation of each Lender to make the
-------------
initial Revolving Credit Loan is subject to the satisfaction of the following
conditions precedent on or prior to the date of such initial advance.
(a) Execution. This Credit Agreement shall have been duly authorized,
---------
executed and delivered by each of the Borrowers, the Lenders and the Agents,
each Borrower shall have executed and delivered to each Lender its respective
Revolving Credit Note evidencing the Revolving Credit Loans to be made by such
Lender hereunder.
(b) Signatures. Each of the Borrowers shall have certified to the Agent
----------
(with copies to be provided for each Lender) the name and signature of each of
the persons authorized (i) to sign on its respective behalf this Credit
Agreement, the Notes, the Security Documents and other Credit Documents to which
it is a party, and (ii) to borrow under this Credit Agreement. The Lenders may
conclusively rely on such certifications until they receive notice in writing
from any Borrower, as the case may be, to the contrary.
(c) Proof of Action. The Agent shall have received evidence satisfactory
---------------
to the Agent of all necessary action taken by each of the Borrowers to authorize
the execution, delivery and performance of such of the Credit Documents to which
it is a party.
(d) Opinions of Counsel to the Borrowers. The Agent shall have received an
------------------------------------
opinion of Christy & Viener, special New York counsel to the Borrowers,
substantially in the form of Exhibit J hereto.
------- -
(e) Security Documents. Each Borrower shall have duly authorized,
------------------
executed, delivered, filed, registered and recorded such Security Documents,
notices, financing statements and other instruments as the Agent may have
reasonably requested, at any time and from time to time, in order to perfect the
liens required pursuant to the Credit Documents.
(f) Contract Value Report. The Borrowers shall have delivered to the Agent
---------------------
an updated Contract Value Report as of March 31, 1998.
-36-
(g) Solvency Certificate. The Agent shall have received a Solvency
--------------------
Certificate demonstrating that, after giving effect to the Credit Documents,
each of the Borrowers is solvent.
(h) Certain Fees. The Borrowers shall have paid to the Agents any fees due
------------
pursuant to Section 2.05 hereof.
(i) Regulations G, T, U and X. Each Lender shall be satisfied that the
-------------------------
making of any Loan shall not violate Regulations G, T, U or X (or any successor
provisions) and no order, judgment or decree of any Governmental Authority shall
enjoin or restrain, or purport to enjoin or restrain, any Lender from making any
Loan.
(j) Other Documents. The Borrower shall have delivered to the Agent such
---------------
other documents and papers relating to the Credit Documents and the transactions
contemplated hereby as any Lender or the Agent shall reasonably request.
(k) Payment of Prior Indebtedness. The Borrowers shall have paid in full
-----------------------------
all of their obligations under the Prior Loan Documents and the commitments of
the Lenders thereunder shall have terminated.
(l) No Litigation. There shall be no litigation, proceeding, inquiry or
-------------
other action seeking an injunction or other restraining order, damages or other
relief by any Governmental Authority or any Person, or investigation by any
Governmental Authority pending or existing with respect to, or known to any of
the Borrowers to be threatened with respect to, any of the Borrowers or any of
their respective assets or any of the Credit Documents or any of the
transactions contemplated thereby, as to which, in the view of the Lenders,
could reasonably be expected to have a Material Adverse Effect, and there shall
have occurred no development in any action, suit, proceeding, investigation or
arbitration previously disclosed to the Lenders pursuant to this Credit
Agreement as to which, in the view of the Lenders, there is a reasonable
possibility of such an effect.
(m) No Material Adverse Change. Except as set forth in Schedule 6.01(m)
-------------------------- -------- -------
attached hereto, since the date of the most recent financial statements
delivered to the Agent in connection with this Credit Agreement, there shall
have been no change in the business or assets or in the financial condition of
the Borrowers, singly or taken as a whole, that could reasonably be expected to
have a Material Adverse Effect on the Borrowers, and none of the Borrowers shall
have entered into any transaction outside of the ordinary course of business
which is material to such Borrower.
-37-
(n) Consents and Approvals. The Lenders shall be satisfied that the
----------------------
execution, delivery and performance by the Borrowers of the Credit Documents
(including the application of the proceeds of the Loans) and the grant of the
security interests in the Collateral pursuant to the Security Documents) do not
and will not require any registration with, consent or waiver or approval of, or
notice to, or other action, with or by, any Governmental Authority or other
Person, except filings required for the perfection of security interests granted
pursuant to the Security Documents and except for consents previously obtained.
(o) No Violation. Neither the execution, delivery nor performance by any
------------
of the Borrowers of any of the Credit Documents to which such Borrower is, or is
to be, a party, nor the compliance with any of the terms and provisions of any
thereof, nor the consummation of any of the transactions contemplated therein
(i) will contravene any provision of any law, statute, rule, regulation, order,
writ, injunction or decree of any Governmental Authority, (ii) will, to the best
of Borrowers' knowledge after reasonable investigation, conflict or be
inconsistent with, or result in any breach of, any of the terms, covenants,
conditions or provisions of, or constitute (with notice or lapse of time or
both) a default under, or (other than the Liens created by the Security
Documents) result in the creation, imposition of (or the obligation to create or
impose) any Lien upon any of the property or assets of any Borrower pursuant to
any contractual obligation, or (iii) will violate any provision of any of the
organizational documents of any Borrower.
(p) Organizational Documents. The Lenders shall have received copies of
------------------------
(i) the organizational documents and good standing certificates of each of the
Borrowers and any agreements entered into, or to be entered into, by any
Borrower governing the terms and relative rights of its capital stock or any
agreements entered into by stockholders relating to any Borrower, and (ii)
resolutions of the board of directors or other governing body under applicable
law of each Borrower approving and authorizing the execution, delivery and
performance of this Credit Agreement and each of the other Credit Documents to
which it is, or is to be, a party and any other documents, instruments and
certificates required to be executed by it in connection herewith or therewith
and approving and authorizing the execution, delivery and payment of the Notes
to be issued by it and the Liens to be created by it, as the case may be, and
the other transactions contemplated by this Credit Agreement, certified, in each
case, as true and complete by an appropriate corporate officer or Governmental
Authority, and the provisions of the foregoing shall be satisfactory in form and
substance to each of the Lenders.
(q) Financial Statements. The Borrowers shall have delivered to the
--------------------
Lenders (i) the Borrowers' most recent audited consolidated balance sheet and
related consolidated statements of earnings and retained earnings for the most
-38-
recent audited fiscal year, together with any notes to such financial
statements, (ii) the Borrowers' unaudited consolidated balance sheets and
related consolidated statements of earnings and retained earnings for the period
ending March 31, 1998, and (iii) such other financial statements as the Lenders
may reasonably request.
(r) Investigation Satisfaction. The Agent and the Lenders shall have
--------------------------
completed their review of the assets, business operations and business plan of
the Borrowers, and shall have determined that the same (including, without
limitation, the business plan) are satisfactory to the Agent and the Lenders.
(s) Equity Purchase. All equity interests held by Providence Media
---------------
Partners L.P. in any Borrower and any such equity interests held by any
Affiliate of Providence Media Partners L.P. shall have been repurchased either
by the Company or an Affiliate of the Company for an aggregate purchase price
not to exceed $15,000,000.
(t) Subordinated Debt Issuance. The Borrowers shall have received not less
--------------------------
than $100,000,000 as proceeds of the issuance of the 1998 Subordinated Notes.
Section 6.02 All Revolving Credit Loans. The obligation of each Lender to
--------------------------
make each Revolving Credit Loan hereunder (which shall not include any
conversion or continuation of any outstanding Loan) is subject to the additional
conditions precedent that: (i) no Default or Event of Default shall have
occurred and be continuing or shall occur as a result of any such requested
Loan; (ii) the representations and warranties in Article VII hereof and in each
of the Credit Documents shall be true and correct on and as of the date of the
making of, and after giving effect to, such Loan with the same force and effect
as if made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date; and (iii)
the Borrowers shall have delivered to the Agent a Notice of Borrowing
satisfactory to the Agent.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
------------------------------
Each of the Borrowers represents and warrants as follows:
Section 7.01 Existence and Power. Each of the Borrowers is a corporation
-------------------
or a limited liability company duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and, except as set
forth on Schedule 7.01 attached hereto, is duly qualified to transact business
-------- ----
and is in good standing in all jurisdictions in which such qualification is
necessary in view of the properties and assets owned and presently intended to
-39-
be owned and the business transacted and presently intended to be transacted by
it, except for qualifications the lack of which, singly or in the aggregate,
have not had and are not reasonably expected to have a Material Adverse Effect,
and each of the Borrowers has full power, authority and legal night to make and
perform each of the Credit Documents to which it is a party.
Section 7.02 Subsidiaries and Affiliates. Schedule 1.01(i) contains a
--------------------------- -------- -------
complete and correct list, as of the date hereof, of all Subsidiaries of the
Company and a description of the legal nature of such Subsidiaries, the nature
of the ownership interests (shares of stock, membership or general or limited
partnership or other interests) in such Subsidiaries and the holders of such
interests and as of the Closing Date the Company and each of its Subsidiaries
owns all of the ownership interests of its Subsidiaries indicated in such
Schedule. 1.01(i) as being owned by the Company or such Subsidiary, as the case
- -------- -------
may be, and all such ownership interests are validly issued and, in the case of
shares of stock, fully paid and non-assessable. Schedule 7.02 hereto contains a
-------- ----
complete and correct list, as of the Closing Date, of all Affiliates of the
Company or its Subsidiaries which are not Subsidiaries of the Company or its
Subsidiaries, the nature of the respective ownership interests in each such
Affiliate, and the holder of each such interest.
Section 7.03 Authority, No Conflict. The making and performance by each
----------------------
of the Borrowers of such of the Credit Documents to which it is a party, and
each extension of credit hereunder, have been duly authorized by all necessary
action and do not and will not: (i) subject to the consummation of the action
described in Section 7.12 hereof, violate any provision of any laws, orders,
rules or regulations presently in effect, or any provision of any of such
Borrower's charter, certificate, by-laws or operating agreement presently in
effect; or (ii) to the best of Borrowers' knowledge after reasonable
investigation, result in the breach of, or constitute a default or require any
consent (except for the consents described on Schedule 7.03 hereto, each of
-------- ----
which has been duly obtained) under, any existing indenture or other agreement
or instrument to which any Borrower is a party or their respective properties
may be bound or affected; or (iii) result in, or require, the creation or
imposition of any Lien (other than those contemplated by the Security Documents)
upon or with respect to any of the properties or assets now owned or hereafter
acquired by any of the Borrowers.
Section 7.04 Financial Condition. The Borrowers have furnished to each
-------------------
Lender the audited consolidated balance sheets of the Company and its
Subsidiaries as at December 31, 1997, and the related consolidated statements of
operations, stockholders' equity (deficiency) and cash flows for the fiscal year
ended on said date, said financial statements having been audited by Arthur
Andersen & Co., LLP, whose opinion shall be unqualified. All financial
statements referred to above are complete and correct in all material respects
and fairly present the financial condition of the Borrowers on said date. None
of
-40-
the Borrowers had on said date any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments or operations which are substantial in
amount, except as referred to, or reflected or provided for in said financial
statements. From the date of the most recent financial statements delivered to
the Lenders, there has been no change in the financial condition or the
businesses or operations of the Borrowers, singly or taken as a whole on a
consolidated basis, which could reasonably be expected to have a Material
Adverse Effect on the Borrowers.
Section 7.05 Litigation, Etc. Except as disclosed to the Lenders on
---------------
Schedule 7.05, there are no lawsuits or other proceedings pending against any
- -------- ----
Borrower or any of their respective properties or assets before any court or
arbitrator or by or before any governmental commission, bureau or other
regulatory authority that, singly or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on the Borrowers. No Borrower is in
default under, or in violation of or with respect to, any laws or orders, or any
material provision of any rules or regulations, or any writ, injunction or
decree of any court, arbitrator, governmental commission, bureau or other
regulatory authority, except for minor defaults which, if continued unremedied,
are not reasonably expected to have a Material Adverse Effect on the Borrowers.
Section 7.06 Titles and Liens. Except as set forth on Schedule 8.12, each
---------------- -------- ----
of the Borrowers has good title to its properties and assets, free and clear of
all Liens except those permitted by Section 8.12 hereof.
Section 7.07 Regulations G, T, U and X. No part of the proceeds of the
-------------------------
Loans will be used to purchase or carry any Margin Stock in violation of
Regulation U or to extend credit for the purpose of purchasing or carrying any
Margin Stock. Neither the making of any Loan hereunder nor the use of the
proceeds thereof will violate or be inconsistent with the provisions of
Regulations G, T, U or X.
Section 7.08 Taxes. Except as is otherwise set forth in Schedule 7.01
----- -------- ----
hereof, each of the Borrowers has filed all tax returns which are required to be
filed under any law applicable thereto, and has paid, or made provision for the
payment of, all taxes shown to be due pursuant to said returns or pursuant to
any assessment received by any of the Borrowers, except such taxes, if any, as
are being contested in good faith and as to which adequate reserves have been
provided.
Section 7.09 Other Credit Agreements. Schedule 8.10 (Existing
----------------------- -------- ----
Indebtedness) and Schedule 8.12 (Existing Liens) attached hereto contain
-------- ----
complete and correct lists, as at the date hereof, of all credit agreements,
indentures, purchase agreements, obligations in respect of letters of credit,
-41-
guarantees and other instruments presently in effect (including Capital Lease
Obligations) providing for, evidencing, securing or otherwise relating to any
Indebtedness of the Borrowers, and such lists, as of the date hereof, correctly
set forth the names of the debtor or lessee and creditor or lessor with respect
to the Indebtedness outstanding or to be outstanding thereunder, the rate of
interest or rent, a description of any security given or to be given therefor,
and the maturity or maturities or expiration date or dates thereof
Section 7.10 Full Disclosure. As of the Closing Date, none of the
---------------
financial statements referred to in Section 7.04 hereof contains any untrue
statement of a material fact, nor do such financial statements and such written
statements, taken as a whole, omit to state a material fact necessary to make
the statements contained therein not misleading.
Section 7.11 No Default. None of the Borrowers is in default in the
----------
payment or performance or observance of any contract, agreement or other
instrument to which it is a party or by which it or its properties or assets may
be affected or bound, which default, either alone or in conjunction with all
other such defaults, has had or could reasonably be expected to have a Material
Adverse Effect on the Borrowers.
Section 7.12 Approval of Regulatory Authorities. No approval or consent
----------------------------------
of, or filing or registration with, any Federal, state or local commission or
other regulatory authority is required in connection with the execution,
delivery and performance by any of the Borrowers of any of the Credit Documents
to which it is a party. All such described action required to be taken as a
condition to the execution and delivery of such of the Credit Documents to which
any of the Borrowers is a party has been duly taken by all such commissions and
authorities or other Persons, as the case may be, and all such action required
to be taken as a condition to the initial advance hereunder has been or will be
duly taken prior to such initial advance.
Section 7.13 Binding Agreements. The Credit Documents constitute the
------------------
legal, valid and binding obligations of each of the Borrowers which is a party
thereto, enforceable in accordance with their respective terms (except for
limitations on enforceability under bankruptcy, reorganization, insolvency and
other similar laws affecting creditors' rights generally, and limitations on the
availability of the remedy of specific performance imposed by the application of
general equitable principles).
Section 7.14 Collective Bargaining Agreements. There are no collective
--------------------------------
bargaining agreements between any of the Borrowers and any trade or labor union
or other employee collective bargaining agent.
-42-
Section 7.15 Investments. Schedule 7.15 attached hereto contains a
----------- -------- ----
complete and correct list, as of the Closing Date, of all Investments in amounts
in excess of $50,000 of the Borrowers (other than Investments in Subsidiaries or
overnight cash management Investments made on behalf of the Company or its
Subsidiaries) showing the respective amounts of each such Investment and the
respective entity in which each such Investment has been made.
Section 7.16 Real Property. As of the Closing Date, none of the Borrowers
-------------
owns any real property.
Section 7.17 Intellectual Property. The Borrowers own or have a valid
---------------------
right to use the patents, patent rights or licenses, trademarks, trademark
applications, trademark rights and trade names or trade name rights or
franchises now being used or necessary to conduct its business, all of which, as
of the Closing Date, are listed on the attached Schedule 7.17. The conduct of
-------- ----
the businesses of the Borrowers as now operated does not conflict with any valid
patents, patent rights or licenses, trademarks, trademark rights and trade names
and trade name rights or franchises of others in any manner that could result in
a Material Adverse Effect on the Borrowers.
Section 7.18 Principal Places of Business. The principal place of
----------------------------
business and chief executive offices of each Borrower is located at 100 Park
Avenue, New York, New York 10017. The Borrowers maintain no records relating
to Collateral at any address other than their respective Chief Executive Offices
(other than copies of materials, the originals of which are maintained at such
Chief Executive Offices), nor do the Borrowers maintain, store or keep any
material Collateral at any location other than such office.
Section 7.19 Investment Company Act; Public Utility Holding Company Act.
----------------------------------------------------------
None of the Borrowers is an "investment company" or a "company controlled by
an investment company" within the meaning of the 1940 Act, or a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.20 1998 Subordinated Note Documents. True and complete copies
--------------------------------
of the 1998 Subordinated Note Documents have been delivered to the Lenders, and
each of the 1998 Subordinated Note Documents have been duly executed and
delivered by the parties thereto and are in full force and effect. All
Obligations constitute "Senior Indebtedness" (or the equivalent term) under and
as described in the 1998 Subordinated Note Documents and the Offering
Memorandum. No default has occurred and is continuing under the 1998
Subordinated Note Documents.
-43-
ARTICLE VIII
COVENANTS
---------
From and after the Closing Date until the payment in full of all Obligations
hereunder and the performance of all other obligations of the Borrowers under
the Credit Documents, each of the Borrowers agrees that, unless the Lenders
shall otherwise consent in writing:
A. Informational Covenants:
-----------------------
Section 8.01 Financial Information. The Company, on behalf of the
---------------------
Borrowers, shall deliver to each Lender:
(a) As soon as available and in any event within 60 days of the end of each
Quarter of each fiscal year of the Borrowers: (i) consolidated statements of
income and loss for such Quarter and for the period from the beginning of such
fiscal year to the end of such Quarter and (ii) the related consolidated balance
sheets of the Borrowers as of the end of such Quarter (which financial
statements shall set forth in comparative form the corresponding figures as at
the end of and for the corresponding Quarter in the preceding fiscal year), all
in reasonable detail and, accompanied by a Quarterly Compliance Certificate in
the form of Exhibit K hereto of the Chief Financial Officer or Treasurer of the
------- -
Company certifying, on behalf of the Borrowers, such financial statements,
subject, however, to year-end audit adjustments, which certificate shall include
a statement that the Chief Financial Officer or Treasurer signing the same has
no knowledge, except as specifically stated, that any Default or Event of
Default has occurred and is continuing; provided, however, that the financial
-------- -------
statements for the last Quarter of each fiscal year shall be delivered at the
time the financial statements referred to in Section 8.01(b) hereof shall be
due.
(b) As soon as available and in any event within 120 days after the end of
each fiscal year of the Borrowers: (i) audited consolidated statements of income
and loss and sources and applications of funds of the Borrowers for such fiscal
year and (ii) the related consolidated balance sheets of the Borrowers, as of
the end of such fiscal year (which financial statements shall set forth in
comparative form the corresponding figures as at the end of and for the
preceding fiscal year), all in reasonable detail and accompanied by (x) an
opinion of independent certified public accountants of nationally recognized
standing selected by the Borrowers as to said financial statements, together
with a certificate of such accountants stating that, in making the examination
necessary for said opinion, they obtained no knowledge, except as specifically
stated, of any failure by the Borrowers to perform or observe any of its
covenants relating to financial matters contained in this Credit Agreement, and
it being understood that the examination of such accountants cannot be relied
-44-
upon to give them knowledge of any such Default or Event of Default except as it
relates to accounting and auditing matters, (y) an Annual Compliance Certificate
in the form of Exhibit L hereto of the Chief Financial Officer or Treasurer of
------- -
the Company stating that, on behalf of the Borrowers, such financial statements
are correct and complete and fairly present the financial condition and results
of operations of the respective entities covered thereby as at the end of and
for such fiscal year and that the officer signing the same has no knowledge,
except as specifically stated, that any Default or Event of Default has occurred
and is continuing.
(c) Promptly after becoming available, copies of all financial statements
which any of the Borrowers shall have sent to their respective shareholders
generally (other than tax returns, unless specifically requested under clause
(h) of this Section 8.01), and copies of all documents, if any, which any of the
Borrowers shall have filed with any Governmental Authority, including, without
limitation, the Securities and Exchange Commission.
(d) At the time of delivery of the financial statements required in
subsections (a) and (b) of this Section 8.01, a Contract Value Report.
(e) Prior to the last day of each fiscal year, a revised annual budget for
the Borrowers, on a consolidated and consolidating basis, for the following
fiscal year, satisfactory in form to the Lenders.
(f) Within 30 days of receipt by the Company, Shareholder Stock Appraisal
Reports.
(g) As soon as possible, and in any event within five (5) days after any
senior executive of any of the Borrowers shall have obtained knowledge of the
occurrence of a Default or Event of Default, a statement describing such Default
or Event of Default and the action which is proposed to be taken with respect
thereto.
(h) As soon as possible, and in any event within five (5) days after any
senior executive shall have obtained knowledge of a default under any 1998
Subordinated Note Document, a statement describing the same.
(i) As soon as possible, and in any event within five (5) days, copies of
all amendments entered into and waivers granted in respect of the 1998
Subordinated Note Documents and copies of all notices and other communications
received by the Company from, or given by the Company to, the trustee under the
1998 Subordinated Note Indenture or any holder of a 1998 Subordinated Note.
-45-
(j) From time to time, with reasonable promptness, such further information
or financial reports (including, without limitation, audit letters) regarding
the business, affairs and financial condition of the Borrowers or any of their
respective Affiliates, as any Lender may reasonably request.
B. Affirmative Covenants:
----------------------
Section 8.02 Taxes and Claims. Each of the Borrowers will pay and
----------------
discharge all taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits, or upon any properties or assets belonging to
it, prior to the date on which penalties attach thereto, and all other lawful
claims which, if unpaid, might become a Lien (other than Permitted Liens) upon
the property of any of the Borrowers, provided, that none of the Borrowers shall
--------
be required to pay any such tax, assessment, charge, levy, fee or other claim
the payment of which is being contested in good faith and by proper proceedings
if it maintains adequate reserves with respect thereto.
Section 8.03 Insurance. Each of the Borrowers will maintain insurance
---------
issued by responsible companies in such amounts and against such risks as is
prudent in the Company's reasonable discretion. The Company, on behalf of the
Borrowers, will furnish to any Lender, upon the request of such Lender from time
to time, full information as to the insurance maintained in accordance with this
Section 8.03. Without limiting the generality of the foregoing, within 45 days
after the Closing Date, the Company shall deliver to the Agent copies of all
insurance policies, certificates and endorsements, which shall name the Agent
(for the benefit of the Lenders) as loss payee.
Section 8.04 Maintenance of Existence. Except as permitted by Section 8.14
------------------------
hereof, each of the Borrowers will preserve and maintain its existence and
corporate structure and all of its rights, privileges and franchises, except
where a failure to do so, singly or in the aggregate, is not reasonably expected
to have a Material Adverse Effect on the Borrowers taken as a whole.
Section 8.05 Maintenance of and Access to Properties. Each of the
---------------------------------------
Borrowers will keep all of its properties and assets necessary to its business
in good working order and condition, ordinary wear and tear excepted, and, upon
reasonable advance notice, will permit and assist representatives of the Lenders
to inspect such properties, to confer with its officers, employees, directors
and agents, and to examine and make extracts from its books and records, during
normal business hours.
Section 8.06 Compliance with Applicable Laws. Each of the Borrowers will
-------------------------------
comply with the requirements of all applicable laws, rules, regulations and
-46-
orders of any governmental body or regulatory authority, a breach of which could
reasonably be expected, singly or in the aggregate, to have a Material Adverse
Effect on the Borrowers taken as a whole.
Section 8.07 Litigation. The Company, on behalf of each of the Borrowers,
----------
will promptly give to the Lenders notice in writing of all litigation and of all
proceedings before any courts, arbitrators or governmental or regulatory
agencies against any of the Borrowers or, to the knowledge of any of the
Borrowers, otherwise affecting any of the Borrowers or any of their respective
properties or assets, except litigation or proceedings which, if adversely
determined, could reasonably be expected, singly or in the aggregate, to have a
Material Adverse Effect on the Borrowers taken as a whole. Following the
initial notice of each such litigation or proceeding, supplementary notices of
all material developments in respect thereof shall be given to the Lenders from
time to time in like manner.
Section 8.08 New Subsidiaries. Promptly upon the acquisition or formation
----------------
of any New Subsidiary or the issuance of new stock and/or other ownership
interest in any existing Subsidiary, the Borrowers shall notify the Agent of
such acquisition, formation or issuance and cause (by documentation satisfactory
to the Lenders) (i) the capital stock of and/or other ownership interests in
such New Subsidiary or existing Subsidiary held by any Borrower to be pledged or
otherwise assigned and delivered with stock powers executed in blank to the
Agent, as additional collateral under the Security Documents, (ii) such New
Subsidiary to undertake all of the obligations of a "Borrower" as defined under
this Credit Agreement and of a "Securing Party" under the Security Documents,
and to create on its revenues and assets all of the Liens to be created by a
"Securing Party" under the Security Documents, and (iii) all such filings and
recordings in public offices as the Lenders shall determine to be desirable in
order to perfect the Liens in favor of the Agent on the properties of such New
Subsidiary created under the Security Documents as contemplated by clause (ii)
above to be effected. Each such New Subsidiary shall thereafter be a
"Borrower," a " Borrower Subsidiary" and a "Securing Party" for all purposes of
the Credit Documents.
Section 8.09 [INTENTIONALLY OMITTED]
C. Negative Covenants:
------------------
Section 8.10 Indebtedness. Except as otherwise permitted in this Credit
------------
Agreement, none of the Borrowers shall create, incur or suffer to exist any
Indebtedness except:
(i) Indebtedness created by this Credit Agreement;
-47-
(ii) Indebtedness in respect of Capital Lease Obligations, and
Indebtedness incurred to finance the purchase price of property or
equipment, so long as the aggregate principal amount of all such
Indebtedness outstanding at any one time does not exceed $2,500,000.
(iii) Indebtedness under the 1998 Subordinated Note Documents in an
aggregate principal amount not to exceed $100,000,000 minus the amount of
-----
any payment, prepayment, purchase, repurchase, redemption, retirement, or
other acquisition of, or cancellation or discharge of, any 1998
Subordinated Notes (excluding, for purposes of this reduction, the exchange
of notes pursuant to the Exchange Offer);
(iv) current liabilities of the Borrowers, other than for money
borrowed, incurred in the ordinary course of business;
(v) indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment thereof shall not at the time be required to be made in
accordance with the terms of applicable law, rules, regulations or
contracts, as the case may be, and indebtedness secured by liens of
carriers, warehousemen, mechanics and material men permitted by Section
8.12 hereof,
(vi) liabilities for deferred compensation owing to employees of the
Borrowers;
(vii) obligations owing to terminated employees of the Borrowers;
(viii) Permitted Seller Note Indebtedness; and
(ix) Permitted Subordinated Debt.
As of the Closing Date, all Indebtedness of the Borrowers other than pursuant to
clause (ii) above is set forth on Schedule 8.10 attached hereto.
-------- ----
Section 8.11 Contingent Liabilities. Except as set forth on Schedule 8.11
---------------------- -------- ---
attached hereto, or as otherwise permitted in this Credit Agreement, none of the
Borrowers shall, directly or indirectly (including, without limitation, by means
of causing a bank to open a letter of credit), guarantee, endorse, contingently
agree to purchase or to furnish funds for the payment or maintenance of, or
otherwise be or become contingently liable upon or with respect to, the
Indebtedness of any other Person, or guarantee the payment of dividends or other
distributions upon the stock or other ownership interests of any other Person,
or agree to purchase, sell or lease (as lessee or lessor) property, products,
materials, supplies or services primarily for the purpose of enabling a
-48-
debtor to make payment of its obligations or to assure a creditor against loss,
except endorsements of negotiable instruments for deposit or collection in the
ordinary course of business.
Section 8.12 Liens. None of the Borrowers shall create or suffer to exist
-----
any mortgage, pledge, security interest, conditional sale or other title
retention agreement, lien, charge or encumbrance upon any of its assets, now
owned or hereafter acquired, securing any Indebtedness (all such security being
herein called "Liens"), except:
(i) Liens securing Indebtedness permitted by Section 8.10 hereof;
(ii) Liens provided for by the Security Documents;
(iii) Permitted Liens;
(iv) Liens existing on the Closing Date and listed in Schedule 8.12
-------- ----
hereof, and
(v) the renewal, extension or refunding of any of the foregoing liens
securing an amount not exceeding the amount thereof remaining unpaid
immediately prior to such renewal, extension or refunding.
In addition, none of the Borrowers shall enter into or permit to exist any
undertaking by it or affecting any of its properties whereby any of the
Borrowers shall agree with any Person (other than the Lenders or the Agent) not
to create or suffer to exist any Liens in favor of any other Person.
As of the Closing Date, all Liens of any of the Borrowers, except for
Permitted Liens and Liens permitted pursuant to clause (ii) above, are set forth
on Schedule 8.12 attached hereto.
-------- ----
Section 8.13 Leases. None of the Borrowers shall incur, assume or have
------
outstanding any obligation to pay rent under leases (as lessee, guarantor or
otherwise) except:
(i) obligations under leases by one Subsidiary to another Subsidiary
or the Company;
(ii) obligations under leases of equipment and other real or personal
property for use in the ordinary course of business; and
(iii) Capital Lease Obligations to the extent permitted by Section
8.10 hereof.
-49-
All leases in respect of real estate to which any of the Borrowers are a
party as of the Closing Date are set forth on Schedule 8.13 attached hereto.
-------- ----
The Company shall give prompt notice to the Agent of any leases entered into
after the Closing Date.
Section 8.14 Mergers, Acquisitions and Dispositions.
--------------------------------------
(a) Except as set forth in Section 8.14(b), none of the Borrowers shall
consolidate or merge with any Person, or sell, lease, license, assign, transfer
or otherwise dispose of any part of its business, assets or rights; provided,
--------
however, that, unless a Default or Event of Default has occurred and is
- -------
continuing: (i) the Borrowers may make dispositions in the ordinary course of
business (including dispositions of obsolete or worn-out property and other
property reasonably determined by the management of the disposing entity to be
not used or useful in its business); and (ii) the Company or a Subsidiary may
merge with another wholly-owned Subsidiary Borrower or the Company provided that
such wholly-owned Subsidiary Borrower or the Company shall be the surviving
entity.
(b) None of the Borrowers shall purchase or acquire assets from, or the
business or assets of, any other Person, except: (i) the purchase of assets in
the ordinary course of business as conducted on the Closing Date by the
Borrowers; or (ii) the acquisition of all or any part of the business or assets
of, or merger with any Representative Firm (a "Permitted Acquisition"),
provided, however, that: (w) after giving pro forma effect to any such merger or
- -------- -------
acquisition, (including the incurrence by any Borrower of any Indebtedness in
connection therewith) (A) no Default or Event of Default shall have occurred and
shall be continuing and (B) no Default shall occur under Article VIII D hereof
as of the last day of the most recent Quarter (assuming for this purpose that
the merger or acquisition was completed on the first day of the four Quarter
period ending on such day); (x) prior to such merger or acquisition, the
Borrowers shall have furnished to the Lenders the terms of such merger or
acquisition, including a reasonably detailed description of such business or
assets; (y) if the assets so acquired consist of stock of any Person, such
Person acquired shall immediately agree to become a "Borrower" and "Subsidiary
Borrower" in accordance with Section 8.08 hereof; and (z) after giving effect to
such merger or acquisition, Guild will hold at least the same percentage of
common or voting stock of the Company as he held prior to such merger or
acquisition.
Section 8.15 Investments. Except as otherwise permitted in this Credit
-----------
Agreement, and except for Permitted Investments, investments by the Company in
any Subsidiary Borrower, and long-term investments related to the business of
the Borrowers in the aggregate amount outstanding at any time not to exceed
$250,000, none of the Borrowers shall, directly or indirectly, make or permit to
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remain outstanding any advances, loans (other than advances to employees of the
Borrowers made in the ordinary course of the Borrowers' business and not
exceeding $200,000 in the aggregate), accounts receivable (other than accounts
receivable arising in the ordinary course of business of the Borrowers,
including, without limitation, any accounts receivable arising from the purchase
of Contracts), or purchase or own any stocks, bonds, notes, debentures,
interests or securities (including, without limitation, any interests in any
partnership, joint venture or joint adventure), or guarantee any Indebtedness or
other obligations of any Person except as expressly permitted by Section 8.11 of
this Credit Agreement (all such transactions being herein called "Investments").
Section 8.16 Restricted Payments. None of the Borrowers shall, directly or
-------------------
indirectly, make any Restricted Payment, except that the Company may make
Permitted Payments, and a Subsidiary may make dividend payments to the Company.
Section 8.17 Business.
--------
(a) None of the Borrowers shall engage in any business other than that of a
Representative Firm.
(b) The Company will not (i) permit any Subsidiary identified as "inactive"
in Schedule 8.17(b) attached hereto or identified by the Company "inactive" in
-------- -------
any written notice furnished to the Agent at any time after the date hereof to
conduct or engage in any business or operations of any kind, to own any property
other than its nominal capitalization and rights under immaterial agreements or
contracts that do not require any payments by such Subsidiary, to incur or
assume or permit to exist any Indebtedness or to make or permit to exist any
Investment (other than Investments in nominal aggregate amounts), or (ii) create
or acquire at any time after the date hereof any direct or indirect Subsidiaries
other than Subsidiaries that are created or acquired (A) pursuant to or in
connection with any Permitted Acquisitions, and (B) in compliance with Section
8.08 hereof.
Section 8.18 Transactions with Affiliates. None of the Borrowers shall
----------------------------
effect any transaction with any of its Affiliates that is not a Borrower
hereunder unless (i) the Lenders shall have received notice of any such
transaction which exceeds $100,000 and (ii) any such transaction is entered into
on a basis which is no less favorable to such Borrower than would be obtainable
in connection with a comparable transaction at arms' length dealing with an
unrelated third party.
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Section 8.19 Material Change to Corporate Structure. None of the Borrowers
--------------------------------------
shall amend, modify or supplement any of the provisions of its charter or by-
laws as presently in effect.
Section 8.20 Issuance of Stock.
-----------------
(a) The Borrowers shall not permit any Subsidiary to issue any shares of
stock or other ownership interests in such Subsidiary if, after giving effect
thereto, the percentage of ownership interests in such Subsidiary held by one or
more of the Borrowers immediately prior to such issuance would be decreased.
(b) In the event that an Event of Default has occurred and is continuing,
the Company may not issue any shares of capital stock or other equity interest
unless the net cash proceeds thereof are paid to the Lenders for application
against the Obligations hereunder
Section 8.21 Amendments or Termination of 1998 Subordinated Note Documents.
-------------------------------------------------------------
None of the Borrowers shall enter into, agree to or otherwise permit any
amendment, supplement or other modification to any 1998 Subordinated Note
Document.
D. Financial Covenants:
-------------------
Section 8.22 Total Leverage. At all times during each of the periods
--------------
listed below, the Borrowers shall, on a consolidated basis, maintain a ratio of
(i) (a) Total Funded Debt, less (b) the aggregate amount of cash and Permitted
----
Investments of the Borrowers in excess of $5,000,000 to (ii) EBITDA (measured
for the immediately preceding four Quarters for which the most recent financial
statements are required to be delivered pursuant to Section 8.01 hereof) of not
more than the amount listed below opposite each such period:
PERIOD MAXIMUM
------ -------
Closing Date - December 31, 1999 4.75:1
January 1, 2000 - December 31, 2000 4.50:1
January 1, 2001 - December 31, 2001 4.25:1
January 1, 2002 and thereafter 4.00:1
Section 8.23 Interest Coverage. At all times during each of the periods
-----------------
listed below, the Borrowers shall, on a consolidated basis, maintain a ratio of
(i) EBITDA (measured for the immediately preceding four Quarters for which the
most recent financial statements are required to be delivered pursuant to
Section 8.01 hereof) to (ii) Total Interest Expense of not less than the amount
listed below opposite each such period:
PERIOD LIMIT
------ -----
Closing Date - December 31, 1999 1.60:1
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January 1, 2000 - December 31, 2000 1.75:1
January 1, 2001 and thereafter 2.00:1
Section 8.24. Senior Leverage. At all times during the periods listed
---------------
below, the Borrowers shall, on a consolidated basis, maintain a ratio of (i)
Senior Debt to (ii) EBITDA (measured for the immediately preceding four Quarters
for which the most recent financial statements are required to be delivered
pursuant to Section 8.01 hereof) of not more than the amount listed below
opposite such period:
PERIOD LIMIT
------ -----
Closing Date - December 31, 1999 2.00:1
January 1, 2000 - December 31, 2000 1.85:1
January 1, 2001 and thereafter 1.75:1
Section 8.25 Fixed Charge Coverage. At all times, the Borrowers shall, on
---------------------
a consolidated basis, maintain a Fixed Charge Coverage of not less than 1.05 to
1.
Section 8.26 Aggregate Contract Value. At all times, the Borrowers shall,
------------------------
on a consolidated basis, maintain an aggregate Contract Value for all of the
Borrowers' Contracts of not less than $150,000,000.
Section 8.27 Capital Expenditures. The Borrowers shall not, on a
--------------------
consolidated basis, make Capital Expenditures for any fiscal year (commencing
with the fiscal year ending December 31, 1998) in excess of the sum of (i)
$1,750,000 and (ii) the difference, if any, between $1,750,000 and the aggregate
amount of Capital Expenditures for the immediately preceding fiscal year.
ARTICLE IX
DEFAULTS
--------
Section 9.01 Events of Default. If any one of the following events shall
-----------------
occur and be continuing (each, an "Event of Default"):
(a) Failure of the Borrowers to pay when due any amount payable pursuant to
the Credit Documents; or
(b) Failure by any of the Borrowers to perform or observe any of the terms
or provisions of this Credit Agreement (other than Sections 8.01, 8.02, 8.03,
8.05, 8.06, 8.07, and 8.08, but including Section 8.01(g) hereof);or
(c) Failure by any Borrower to perform or observe any of the terms or
provisions of Sections 8.01 (excluding Section 8.01(g)), 8.02, 8.03, 8.05, 8.06,
8.07 or 8.08 hereof or failure by any of the Borrowers to perform or observe
any of the
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terms or provisions contained in the other Credit Documents to which it is a
party (and not referred to in paragraph (b) above), and such failure continues
unremedied for 30 days; or
(d) Any representation or warranty contained in any of the Credit Documents,
or in any certificate, statement or other document furnished to the Lenders or
the Agent pursuant thereto (including, without limitation, any amendment to any
of the foregoing), or any certification made or deemed to have been made by any
Borrower to the Agent or any Lender hereunder, shall prove to have been
incorrect in any material respect, when made or deemed made, or
(e) A default shall have occurred and be continuing beyond any applicable
grace period under any Indebtedness of any Borrower which Indebtedness has an
outstanding balance exceeding $200,000, and such default shall be sufficient to
permit the holder or holders of such Indebtedness (or a trustee or agent on its
or their behalf) to accelerate the maturity thereof or to enforce any Lien
provided for by such Indebtedness, or such Indebtedness shall become due by its
terms and shall not be promptly paid or extended; or
(f) (i) any default or event of default shall occur under any 1998
Subordinated Note Document, (ii) any holder or holders of any 1998 Subordinated
Note (or any representatives of any such holders) shall exercise, purport to
exercise, give any notice of its intention to exercise, or become entitled by
the terms of any 1998 Subordinated Note Document to exercise (A) any right to
accelerate any 1998 Subordinated Note or (B) any right to require any payment,
prepayment, purchase, repurchase, redemption, retirement, acquisition or
defeasance of any 1998 Subordinated Note not permitted by this Credit Agreement,
or (iii) any Borrower shall make, offer to make or become obligated to make or
offer to make any payment, prepayment, purchase, repurchase, redemption,
retirement, acquisition or defeasance of any 1998 Subordinated Note not
permitted by this Credit Agreement, including any optional prepayment or
repurchase thereof, or any prepayment or repurchase thereof upon a change in
control or upon a sale of assets;
(g) Any Borrower shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (ii) admit in writing
its inability, or be generally unable, to pay its debts as they become due,
(iii) make a general assignment for the benefit of creditors, (iv) be
adjudicated a bankrupt or insolvent, (v) commence a voluntary case under the
Federal bankruptcy laws (as now or hereafter in effect), (vi) file a petition
seeking to take advantage of any law relating to bankruptcy, insolvency,
reorganization, winding up or composition or adjustment of debts, (vii)
acquiesce in writing to, or fail to controvert in a timely and appropriate
manner, any petition filed against any
-54-
Borrower in any involuntary case under such bankruptcy laws, or (viii) take any
action for the purpose of effecting any of the foregoing; or
(h) A case or other proceeding shall be commenced, without the application,
approval or consent of any Borrower, in any court of competent jurisdiction,
seeking the liquidation, reorganization, dissolution, winding up, or composition
or readjustment of debts of any Borrower, the appointment of a trustee,
receiver, custodian, liquidator or the like of such Borrower or of all or any
substantial part of its assets, or any other similar action with respect to such
Borrower under the laws of bankruptcy, insolvency, reorganization, winding up or
composition or adjustment of debts, and such case or proceeding shall continue
undismissed, or unstayed and in effect, for a period of 45 consecutive days, or
an order for relief against any Borrower shall be entered in an involuntary case
under the Federal bankruptcy laws (as now or hereafter in effect); or
(i) A judgment for the payment of money in excess of $200,000 shall be
rendered against any Borrower and such judgment shall remain unsatisfied and in
effect for any period of 30 consecutive days without a stay of execution or (if
a stay is not provided for by applicable law) without having been fully bonded,
or
(j) (i) Any Termination Event shall occur; (ii) any Accumulated Funding
Deficiency, whether or not waived, shall exist with respect to any Plan; (iii)
any Person shall engage in any Prohibited Transaction involving any Plan; (iv)
one or more of the Borrowers in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a multiemployer Plan resulting from such
Borrower's complete or partial withdrawal (as described in Section 4203 or 4205
of ERISA) from such Plan; (v) any of the Borrowers shall fail to pay when due an
amount which is payable by it to the PBGC or to a Plan under Title IV of ERISA;
(vi) a proceeding shall be instituted by a fiduciary of any Plan against any of
the Borrowers to enforce Section 515 of ERISA and such proceeding shall not have
been dismissed within 30 days thereafter, or
(k) Guild shall cease to own (beneficially or directly) stock of the Company
having at least 10.75% of the votes that may be cast by the holders of all
classes of stock of the Company; or
(l) Guild shall cease to be a trustee of the ESOP or the Stock Growth Plan,
unless a determination is made by the Board of Directors of the Company that the
removal of Guild is prudent, in which case the Board of Directors shall
immediately notify the Lenders in writing describing the nature and
circumstances giving rise to such determination; or
(m) Guild shall cease to perform services in his current capacities with
the
-55-
Company and a replacement employee satisfactory to the Majority Lenders is
not hired by the Company within 180 days.
THEREUPON, the Majority Lenders may direct the Agent to do any one or more
of the following: (i) by notice to the Borrowers, terminate the Revolving Credit
Commitments of the Lenders hereunder (if then outstanding), (ii) declare the
unpaid principal of and accrued interest on the Notes, and all other amounts
payable hereunder, to be forthwith due and payable, whereupon the same shall be
and become forthwith due and payable, without presentment or demand for payment,
notice of nonpayment, protest or further notice or demand of any kind, all of
which are hereby expressly waived by the Borrowers, provided, however, that the
-------- -------
Revolving Credit Commitments hereunder shall forthwith terminate and the unpaid
principal of and accrued interest on the Notes, and all other amounts payable
hereunder, shall automatically become due and payable upon the occurrence of any
event specified in clauses (g) or (h) above without any such notice or other
action, all of which are hereby expressly waived by the Borrowers, and (iii)
exercise any or all of the rights of the Agent or the Lenders under the Credit
Documents or under applicable law (including all rights as a secured party, for
the benefit of the Lenders, under the Security Documents).
ARTICLE X
THE AGENT
---------
Section 10.01 Appointment, Powers and Immunities.
----------------------------------
(a) Each Lender hereby appoints and authorizes the Agent to act as its agent
hereunder with such powers as are specifically delegated to the Agent by the
terms of the Credit Documents, together with such other powers as are reasonably
incidental thereto. The Agent shall not have any duties or responsibilities
except those expressly set forth in the Credit Documents and shall not be a
trustee for any Lender. The Agent shall not be responsible to any of the
Lenders for any recitals, statements, representations or warranties contained in
any of the Credit Documents, or in any certificate or other document referred to
or provided for in, or received by, any of the Lenders under the Credit
Documents, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Credit Documents (including, without
limitation, for the creation or perfection of any security interests granted by
the Security Documents) or any other document referred to or provided for
therein or for any failure by the Borrowers to perform any of their obligations
thereunder. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or attorneys-in-
fact selected by it with reasonable care. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable or responsible for any
action taken or omitted to be taken by it or them hereunder or under the
-56-
Security Documents or in connection herewith or therewith, except for its or
their own gross negligence or willful misconduct.
(b) Maintenance of Books and Records. The Agent shall maintain books and
--------------------------------
records in which shall be recorded: (i) the names and addresses of the Lenders
and the Revolving Credit Commitments of, and the principal amount of Obligations
owing to, each Lender from time to time; (ii) all other appropriate debits and
credits as provided in this Credit Agreement, including, without limitation, all
interest, fees (including attorneys' fees and disbursements to the extent
reimbursable hereunder), expenses, charges and other Obligations; and (iii) all
payments of Obligations made by the Borrowers or for the Borrowers' account.
All entries in such books and records shall be made in accordance with the
Agent's customary accounting practices as in effect from time to time. The Agent
will render periodic statements to the Borrowers detailing all relevant
transactions for billing purposes. Each and every such statement shall be
deemed final, binding and conclusive upon the Borrowers in all respects as to
all matters reflected therein, unless the Borrowers, within 15 days after the
date such statement is rendered, delivers to the Agent written notice of any
objections which the Borrowers may have to any such statement. In that event,
only those items expressly objected to in such notice shall be deemed to be
disputed by the Borrowers. Notwithstanding the foregoing, the Agent's entries
in the books and records evidencing Loans and other financial accommodations
made from time to time shall be final, binding and conclusive upon the Borrowers
as to the existence and amount of the Obligations recorded in such books and
records.
Section 10.02 Reliance by Agent By Lenders. The Agent shall be entitled to
----------------------------
rely upon any certification, notice or other communication (including any
received by telephone, telex, telegram or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper
Person, and upon advice and statements of legal counsel, independent accountants
and other experts selected by the Agent. As to any matters not expressly
provided for by this Credit Agreement, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder or thereunder in
accordance with instructions given by the Majority Lenders. Any instructions
given by the Majority Lenders to the Agent and any action taken or not taken
pursuant thereto shall be binding on all of the Lenders, and no Lender shall
take any action or exercise any rights under any of the Credit Documents which
is inconsistent with any instructions given to the Agent by the Majority
Lenders.
Section 10.03 No Knowledge of Defaults. The Agent shall not be deemed to
------------------------
have knowledge of the occurrence of a Default or Event of Default unless the
Agent has received notice from a Lender or the Borrowers specifying such Default
or Event of Default and stating that such notice is a "Notice of Default". In
the event that the Agent receives such a notice of the occurrence of a Default
-57-
or Event of Default, the Agent shall give prompt notice thereof to the Lenders.
The Agent shall (subject to Section 10.07 hereof) take such action with respect
to such Default or Event of Default as shall be reasonably directed by the
Majority Lenders, provided that, unless and until the Agent shall have received
such directions, the Agent may take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
Section 10.04 Rights as a Lender. With respect to its Revolving Credit
------------------
Commitment and the Loans made by it, BankBoston, N.A., in its capacity as a
Lender hereunder, shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include BankBoston, N.A. in its individual capacity. BankBoston, N.A. and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to and generally engage in any kind of banking, trust
or other business with the Borrowers and any of their Affiliates as if it were
not acting as Agent, and BankBoston, N.A. and its Affiliates may accept fees and
other consideration from the Borrowers for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
Section 10.05 Indemnification. The Lenders agree to indemnify the Agent,
---------------
ratably in accordance with the aggregate principal amount of the Obligations
held by the Lenders (or, if no Loans are at the time outstanding, ratably in
accordance with their respective Commitment Percentages), for any and all
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 the Credit Documents or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses which the Borrowers are
obligated to pay under Sections 11.03 and 11.04 hereof) or the enforcement of
any of the terms hereof or of any such other documents, provided, however, that
-------- -------
no Lender shall be liable for any of the foregoing to the extent they arise from
the gross negligence or willful misconduct of the Agent.
Section 10.06 Non-Reliance on Agent and Other Lenders. Each Lender agrees
---------------------------------------
that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and the decision to
enter into this Credit Agreement, and that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
-58-
analysis and decisions in taking or not taking action under the Credit Documents
or any other document contemplated by or referred to herein. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Borrowers of the provisions of this Credit Agreement or to inspect the
properties or books of the Borrowers. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrowers (or any of their Affiliates)
which may come into the possession of the Agent or any of its Affiliates;
provided, however, that the Agent shall deliver to the Lenders copies of any
- -------- -------
documents or writings received by the Agent pursuant to Section 6.01 hereof.
Section 10.07 Failure to Act. Except for action expressly required of the
--------------
Agent hereunder, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless it shall be indemnified to its satisfaction by
the Lenders against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
Section 10.08 Resignation or Removal of Agent. Subject to the appointment
-------------------------------
and acceptance of a successor Agent as provided below, the Agent may resign at
any time by giving notice thereof to the Lenders and the Borrowers, and the
Agent may be removed at any time with or without cause by the Majority Lenders.
Upon any such resignation or removal, the Majority Lenders shall have the night
to appoint a successor Agent. If no successor Agent she have been so appointed
by the Majority Lenders and shall have accepted such appointment within 30 days
after the retiring Agent has given notice of resignation or the removal of the
retiring Agent by the Majority Lenders, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent, which shall be a bank organized under
the laws of the United States of America or any State having a combined capital
and surplus of at least $100,000,000. Upon the acceptance of an appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After the retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article X 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.
Section 10.09 Agency Fee. So long as the Commitments are outstanding and
----------
until payment in full of all Obligations hereunder, the Borrowers shall pay to
the Agent an annual Agent's fee payable on the first Business Day of each
calendar year in accordance with the terms of that certain letter dated of even
date herewith. Such fees, once paid, shall be non-refundable.
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ARTICLE XI
MISCELLANEOUS
-------------
Section 11.01 No Waiver, Confidentiality.
--------------------------
(a) No failure on the part of the Agent or any Lender to exercise, and no
delay in exercising, and no course of dealing with respect to, any right, power
or privilege under this Credit Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under this
Credit Agreement preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The remedies provided herein are
cumulative and not exclusive of any other remedies provided by law.
(b) The Agent and each of the Lenders hereby acknowledge that the written
information to be furnished to them by the Borrowers pursuant to this Credit
Agreement and the documents related hereto may be non-public information. In
addition to any duty of confidentiality imposed on the Agent or any Lender by
applicable law, each of the Agent and each Lender hereby agrees that it will
keep all such information expressly marked "Confidential" and furnished to it
confidential in accordance with reasonable, customary, safe and sound banking
practices, and will not knowingly make any disclosure to any other person of
such information until the same she have become public, except (i) in connection
with disputes arising out of this Credit Agreement or the Security Documents
(including, without limitation, litigation involving the Borrowers, the Agent or
the Lenders) and with the obligations of any of the Agent or such Lender under
law or regulation, (ii) pursuant to subpoenas or similar process, (iii) to
governmental authorities or examiners, (iv) to independent auditors or counsel,
(v) to any corporate Affiliate of any of the Agent or such Lender, or (vi) to
any participant or proposed participant or assignee or proposed assignee
hereunder so long as such participant or proposed participant or assignee or
proposed assignee (a) is not in the same general type of business as the
Borrowers on the date of such disclosure and (b) agrees in writing to accept
such information subject to the restrictions provided in this Section 11.01(b).
The Agent and the Lenders further agree to use such information solely for the
purpose of their respective evaluations of the transactions contemplated hereby
and their respective ongoing relationships with the Borrowers. Neither the
Agent nor any Lender shall be liable or responsible for the breach or violation
of this Section 11.01(b) which breach or violation is caused by any other Person
(including any other Lender).
Section 11.02 Notices. All notices and other communications provided for
-------
herein shall be by telegraph, cable or in writing and telecopied, telegraphed,
cabled, mailed or delivered to the intended recipient at the "Address for
Notices"
-60-
specified in Schedule 11.02 attached hereto or at such other address as shall be
-------- -----
designated by such party in a notice to each other party. Except as otherwise
provided in Section 2.02 hereof, all notices and other communications hereunder
shall be deemed to have been duly given when transmitted by telecopier,
delivered to the telegraph or cable office, or personally delivered or, in the
case of a mailed notice, four Business Days after the date deposited in the
mails, postage prepaid, in each case given or addressed as aforesaid.
Section 11.03 Expenses, Etc. The Borrowers shall pay or reimburse each of
-------------
the Lenders and the Agent for: (i) the reasonable fees and expenses of Bingham
Dana LLP incurred in connection with any amendment, modification or waiver of
any of the terms of the Credit Documents or any other documents contemplated
thereby or referred to therein; (ii) all reasonable costs and expenses of the
Lenders and the Agent (including reasonable attorneys' fees) incurred in
connection with the enforcement of any of the Credit Documents or the other
documents contemplated by or referred to herein; and (iii) all transfer, stamp,
documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of the Credit Document or any other
document referred to herein.
Section 11.04 Indemnification. The Borrowers shall (to the fullest extent
---------------
permitted by applicable law) indemnify the Agent, the Lenders and each Affiliate
thereof and their respective directors, officers, employees, attorneys and
agents from, and hold each of them harmless against, any and all losses,
liabilities, claims or damages to which any of them may become subject, insofar
as such losses, liabilities, claims or damages arise out of, or in any way
relate to, or result from any actual or proposed use by the Borrowers of the
proceeds of any of the Loans and/or the negotiation, execution, delivery or
performance of the Credit Documents, or from any investigation, litigation or
other proceeding (including any threatened investigation or proceeding) relating
to the foregoing, and the Borrowers shall reimburse the Agent and each Lender,
and each Affiliate thereof and their respective directors, officers, employees,
attorneys and agents, upon demand, for any expenses (including legal fees)
incurred in connection with any such investigation or proceeding (but excluding
any such losses, liabilities, claims, damages, or expenses to the extent caused
by action taken which constitutes the gross negligence or willful misconduct of
the Person to be indemnified). If and to the extent that the obligations of the
Borrowers under the preceding sentence may be unenforceable for any reason, the
Borrowers shall make the maximum contribution to the payment and satisfaction of
each of the losses, liabilities, claims, damages and expenses referred to above
as may be permitted by applicable law.
Section 11.05 Amendments, Etc. No amendment or waiver of any provision of
---------------
the Credit Documents, nor any consent to waive strict compliance with such
provisions, shall in any event be effective unless the same shall be
-61-
agreed or consented to in writing by the Majority Lenders, and each such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
-------- -------
shall, unless the same shall be in writing and signed by all the Lenders: (a)
increase the Revolving Credit Commitment of any of the Lenders, extend the
Commitment Termination Date, or subject the Lenders to any additional
obligations; (b) reduce the principal of, or interest on, or fees with respect
to, the Obligations; (c) postpone any date fixed for payment of principal of, or
interest on, the Obligations or the Notes; (d) change the Commitment Percentages
of any of the Lenders or the aggregate unpaid principal amount of the
Obligations, or the number of Lenders which shall be required for the Lenders or
any of them to take any action under this Credit Agreement; (e) release all or a
significant portion of the Collateral; (f) modify the definition of Majority
Lenders; or (g) change any provision contained in Section 4.03, Articles V or
VI, Section 11.03 or this Section 11.05.
Section 11.06 Successors and Assigns.
----------------------
(a) This Credit Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
(b) The Borrowers may not sell or assign their rights or obligations
hereunder or under the Notes without the prior consent of all of the Lenders and
the Agent.
(c) At any time after the Effective Date, any Lender or Lenders may, with
the consent of the Agent and the Borrowers (not to be unreasonably withheld),
sell a participation interest in a portion of its rights and obligations under
such Lenders' Revolving Credit Commitment and Notes to one or more commercial
banks or investment companies that enter into participations of the type
contemplated by this Section 11.06 in the ordinary course of their business and
that qualify as "accredited investors," as such term is defined under Regulation
D under the Securities Act of 1933, as amended (each, a "Participant"), such
Participant's rights against such Lender to be set forth in a participation
agreement (a "Participation Agreement"); provided, however, that the aggregate
-------- -------
amount of such participation must be in an amount not less than $5,000,000. All
amounts payable by the Borrowers to any Lender under Article V hereof shall be
determined as if such Lender had not sold any such participation and as if such
Lender were funding all of its Revolving Credit Commitments and Loans in the
same way that it is funding the Revolving Credit Commitments and Loans in which
no participation have been sold. In no event shall a Lender that sells a
participation agree to be obligated to the Participant under its Participation
Agreement to refrain from taking any action hereunder or under any of such
Lender's Notes, except that such Lender may
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agree in such Participation Agreement that it will not, without the consent of
such Participant, agree to (i) extend the Commitment Termination Date, (ii)
reduce the principal of, or interest on, the Obligations or under the Notes or
any fees hereunder, (iii) postpone any date fixed for payment of the principal
of, or interest on, the Obligations or under the Notes, or (iv) consent to any
release of all or a significant portion of the Collateral. Any Lender selling a
participation hereunder shall promptly notify the Borrowers, the other Lenders,
and the Agent of the effectiveness thereof.
(d) At any time after the Effective Date, a Lender or Lenders may assign a
portion of their rights and obligations under such Lenders' Revolving Credit
Commitments and Notes to one or more commercial banks (each, an "assignee")
pursuant to an Assignment and Acceptance Agreement substantially in the form of
Exhibit M hereto (an "Assignment and Acceptance"); provided, however, that (i)
- ------- - -------- -------
such Lenders shall have submitted in writing to the Borrowers and the Agent a
request that each of the Borrowers and the Agent consent to the choice of the
assignee, (ii) the Borrowers and the Agent shall have consented in writing to
the choice of the assignee prior to the time of effectiveness of such
assignment, such consent not to be unreasonably withheld, (iii) such assignment
must be in an aggregate amount of not less than $5,000,000, and (iv) the parties
to each assignment shall execute and deliver to the Agent, for its approval,
acceptance and recording in the books and records maintained pursuant to Section
10.01(b) hereof, an Assignment and Acceptance, together with a processing and
recordation fee of $2,500. Upon such execution, delivery, approval, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, (i) the assignee thereunder shall be a party hereto, and to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and under the Notes and (ii) the Lender assignors thereunder shall, to
the extent that rights and obligations hereunder have been assigned by them
pursuant to such Assignment and Acceptance, relinquish their rights and be
released from their obligations hereunder and under the Notes. Any Lender
making an assignment hereunder shall promptly notify the Borrowers of the
effectiveness thereof In the event of any such assignment, the Borrowers shall,
against receipt of the existing Notes of the assigning Lenders, issue new Notes
to the assignee and, in the case of a partial assignment, to such assignors, in
either case appropriately reflecting such assignment.
(e) By executing and delivering an Assignment and Acceptance, the assignor
thereunder and the assignee thereunder shall confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in, or in connection with, this
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Credit Agreement or the Security Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement or
the Security Documents or any other instrument or document furnished pursuant
hereto; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrowers or the performance or observance by the Borrowers of any of their
obligations under this Credit Agreement, the Security Documents or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Credit Agreement, together with copies of
the financial statements referred to in Sections 7.04 and 8.01 hereof and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, the
assigning Lender or any other Lender, 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 Credit Agreement; (v)
such assignee appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under this Credit Agreement and the
Security Documents as are delegated to the Agent by the terms hereof and
thereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Credit Agreement and the
Security Documents are required to be performed by it as a Lender.
(f) The Agent shall retain a copy of each Assignment and Acceptance
delivered to and accepted by it and shall record in its books and records the
names and addresses of each Lender and the Revolving Credit Commitments of, and
the principal amount of the Loans owing to, such Lender from time to time. The
Borrowers, the Agent and the Lenders may treat each Person whose name is so
recorded as a Lender hereunder for ail purposes of this Credit Agreement.
(g) A Lender may furnish any information concerning any of the Borrowers in
the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants).
(h) Notwithstanding anything in the foregoing to the contrary, each Lender
may, without complying with any restrictions set forth in this Section 11.06,
sell participations in or assign all or any part of its rights and obligations
under such Lender's Revolving Credit Commitment under this Credit Agreement and
the Notes to any Affiliate of such Lender or to any Federal Reserve Bank.
Section 11.07 Survival. The obligations of the Borrowers under Sections
--------
11.03 and 11.04, and the obligations of the Lenders under Section 10.05 hereof,
shall survive the repayment of the Loans.
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Section 11.08 Joint and Several. The Obligations of the Borrowers
-----------------
hereunder, including, without limitation, the liability of the Borrowers for the
payment of all fees, costs, expenses, Additional Costs, and any compensation
required to be paid pursuant to Section 5.04, constitute the joint and several
obligation and liability of each of the Borrowers.
Section 11.09 Senior Indebtedness. The Obligations, including, without
-------------------
limitation, the obligations of the Borrowers to pay when due (whether at stated
maturity, by acceleration or otherwise) the principal of and interest on the
Loans to be made by the Lenders to the Borrowers pursuant to Section 2.01
hereof, and the obligations of the Borrowers with respect to Interest Rate
Hedging Agreements, shall constitute "Senior Indebtedness" as such term is
defined in all documents to which any Borrower shall be a party.
Section 11.10 Conditions to Effectiveness. This Credit Agreement shall
---------------------------
become effective on the first day (the "Effective Date") on which (i) this
Credit Agreement shall have been duly executed by the parties hereto and (ii)
the conditions precedent to the initial extension of credit under Article VI
hereof shall have been satisfied.
Section 11.11 Counterparts. This Credit Agreement may be executed in any
------------
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any of the parties hereto may execute this Credit Agreement
by signing any such counterpart.
SECTION 11.12 WAIVER OF JURY TRIAL. THE BORROWERS HEREBY WAIVE TRIAL BY
--------------------
JURY IN ANY JUDICIAL PROCEEDING TO WHICH ANY OF THEM IS A PARTY INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THE CREDIT
DOCUMENTS OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
Section 11.13 Entire Agreement. The Credit Documents embody the entire
----------------
agreement among the Borrowers and the Lenders and supersede all prior
agreements, representations, understandings and courses of dealing, if any,
relating to the subject matter hereof.
Section 11.14 Governing, Law. The Credit Documents shall be governed by,
--------------
and construed in accordance with, the law of The Commonwealth of Massachusetts.
Section 11.15 Captions, Etc. Captions, section headings and the table of
-------------
contents appearing herein are included solely for convenience of reference and
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are not intended to affect the interpretation of any provision of this Credit
Agreement.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be duly executed as of the day and year first above written.
THE COMPANY:
INTEREP NATIONAL RADIO SALES, INC.
By: /s/ Marc G. Guild
---------------------------------------
Name: Marc G. Guild
Title: President, Marketing Division
THE SUBSIDIARIES:
McGAVREN GUILD, INC.
By: /s/ William J. McEntee, Jr.
----------------------------------------
Name: William J. McEntee, Jr.
Title: Vice President and
Chief Financial Officer
D&R RADIO, INC.
By: /s/ William J. McEntee, Jr.
----------------------------------------
Name: William J. McEntee, Jr.
Title: Vice President and
Chief Financial Officer
CBS RADIO SALES, INC.
By: /s/ William J. McEntee, Jr.
----------------------------------------
Name: William J. McEntee, Jr.
Title: Vice President and
Chief Financial Officer
ALLIED RADIO PARTNERS, INC.
By: /s/ William J. McEntee, Jr.
----------------------------------------
Name: William J. McEntee, Jr.
Title: Vice President and
Chief Financial Officer
CABALLERO SPANISH MEDIA L.L.C.
By: /s/ William J. McEntee, Jr.
----------------------------------------
Name: William J. McEntee, Jr.
Title: Vice President and
Chief Financial Officer
CLEAR CHANNEL RADIO, LLC
By: /s/ William J. McEntee, Jr.
----------------------------------------
Name: William J. McEntee, Jr.
Title: Vice President and
Chief Financial Officer
THE ADMINISTRATIVE AGENT:
BANKBOSTON, N.A., as
Administrative Agent
By: /s/ Jay Michael MacKeen
---------------------------------------
Name: Jay Michael MacKeen
Title: Vice President
THE LENDERS:
REVOLVING
CREDIT
COMMITMENT
- ----------
$5,000,000 BANKBOSTON, N.A., as Lender
By: /s/ Jay Michael MacKeen
---------------------------------------
Name: Jay Michael MacKeen
Title: Vice President
$5,000,000 SUMMIT BANK, as Lender
By: /s/ Kenneth Stoddard
---------------------------------------
Name: Kenneth Stoddard
Title: Vice President
THE DOCUMENTATION AGENT
SUMMIT BANK, as Documentation Agent
By: /s/ Kenneth Stoddard
---------------------------------------
Name: Kenneth Stoddard
Title: Vice President