LOAN AGREEMENT
BY AND BETWEEN
KEYMARKET OF SOUTH CAROLINA, INC.,
AS BORROWER,
AND
RIVER CITY BROADCASTING, L.P.,
AS LENDER
AS OF JULY 7, 1995
LOAN AGREEMENT
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THIS LOAN AGREEMENT (this "Agreement") is made as of this 7th
day of July, 1995, by and among KEYMARKET OF SOUTH CAROLINA, INC., a South
Carolina corporation ("Borrower"), and RIVER CITY BROADCASTING L.P., a Delaware
limited partnership ("Lender").
RECITALS:
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A. Borrower has requested that Lender make certain loans to
it, and Lender is willing to make such loans on the terms and subject to the
conditions set forth herein.
B. Borrower owns and operates Radio Stations WFBC-AM and
WFBC-FM, Greenville, South Carolina and WORD-AM, Spartanburg, South Carolina,
(individually, an "Owned Station" and collectively, the "Owned Stations")
pursuant to licenses issued by the Federal Communications Commission (the "FCC")
and operates Radio Stations WSPA-FM and WSPA-FM, Spartanburg, South Carolina
(individually, an "LMA Station" and collectively, the "LMA Stations"), pursuant
to the LMA. The Owned Stations together with the LMA Stations are hereinafter
collectively referred to as the "Stations" and individually as a "Station."
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual agreements and covenants contained herein, and other good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending legally to be bound, hereby agree as
follows:
ARTICLE I
Defined Terms
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1.1 Definitions. Unless otherwise stated in this Agreement,
the following this shall have the following meanings:
"Affiliate" of a party means any Person, directly or
indirectly, controlling or controlled by such party, or any Person under direct
or indirect common control with such party (as such terms are interpreted from
time to time pursuant to the Securities Act of 1933, as amended).
"Assets" means all of Borrower's rights title and interest in
and to all of the assets, properties privileges, rights, interests and claims,
tangible and intangible, of every type and description, wherever located and
whether or not carried on Borrower's books and records, including all such
assets that are used or useful in connection with the conduct of the business
and operations of any Owned Station and the contracts, rights and other assets
relating to the LMA Stations.
"Capital Expenditures" means payments that are made by
Borrower for the rental, lease, purchase, construction, or use of any property
the value or cost of which, under generally
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accepted accounting principles, consistently applied, should be capitalized and
appear on Borrower's balance sheet in the category of property, plant, or
equipment, without regard to the manner in which such payments or the instrument
pursuant to which they are made are characterized by Borrower or any other
Person.
"Closing" means the consummation of the transactions
contemplated by this Agreement in accordance with the provisions of Section 3.1
hereof.
"Confer" means Kerby E. Confer.
"Contract" means all contracts, leases, non-governmental
licenses and other agreements, written or oral, including any amendments or
other modifications thereto, of Borrower or to which Borrower is a party that
relate to any of the Assets or the business and operations of any Owned Station.
"Default Rate" means a rate of interest equal to the Base Rate
plus two percent (2%) per annum.
"Disclosure Schedule" means that document labeled as such and
referred to in this Agreement, which has been delivered by Borrower to Lender
contemporaneously with the execution of this Agreement.
"Environmental conditions means conditions of the environment
including the ocean, natural resources (including flora and fauna), soil,
surface water, ground water, any present or potential drinking water supply,
subsurface strata or the ambient air, relating to or arising out of the use,
handling, storage, treatment recycling, generation, transportation, dumping,
Release, or threatened Release of Hazardous Materials by any Person. With
respect to claims by employees, Environmental Conditions also includes the
exposure of persons to Hazardous materials within a work place on the Real
Property.
"Environmental Noncompliance" sooner but is not limited to:
(1) the Release or threatened Release of any Hazardous Materials into the
environment, any storm drain, sewer, septic system or publicly owned treatment
works, in violation of any effluent or emission limitations, standards or other
criteria or guidelines established by any federal, state or local law,
regulation, rule, ordinance, plan or order or other Environmental Law; and (2)
any facility operations, procedures, designs, etc., which do not conform with
the requirements of any Environmental Orders and Laws.
"Event of Default" means any of the events specified in
Article VIII hereof.
"FCC Licenses" means those Licenses issued by the FCC to
Borrower in connection with the businesses and operations of any Owned Station,
including those listed in Section 4.5 of the Disclosure schedule.
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"Final Order" means an action or order by the FCC (a) that has
not been reversed, stayed, enjoined, set aside, annulled or suspended, and (b)
with respect to which (i) no requests have been filed for administrative or
judicial review, reconsideration, appeal or stay and the FCC has not initiated a
review of such action or order on its own action and the periods provided by
statute or FCC regulations for filing any such requests and for the FCC to set
aside tho action on its own motion have expired, or (ii) in the event of review,
reconsideration or appeal, the period provided by statute or FCC regulations for
further review, reconsideration or appeal has expired; and with respect to
Renewal, means, in addition to (a) and (b) above, Renewal of each of the FCC
Licenses for the full license term without any now adverse conditions.
"Financial Statements" (i) the unaudited statements of income
and expense and cash flow for Multimedia Broadcasting and The Spartan
Radiocasting Company for the twelve months ended December 31, 1993 and December
31, 1994, and (ii) the unaudited balance sheets of Multimedia Broadcasting and
The Spartan Radiocasting Company as of December 31, 1993 and December 31, 1994.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by. a significant segment of
the accounting profession, that are applicable to the circumstances as of the
date of determination.
"Hazardous Materials" means (1) hazardous materials,
contaminants, constituents hazardous wastes and hazardous substances as those
terms are defined in the following statutes and their implementing regulations,
as amended: the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.,
the Comprehensive Environmental Response, Compensation and Liability Act, as
amended by the Superfund Amendments and Reauthorization Act, 42 U.S.C. ss. 9601
et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., and the Toxic
Substance control Act, 15 U.S.C. ss. 2601 sea., (2) petroleum, including crude
oil and any fractions thereof, (3) natural gas, synthetic gas and any mixtures
thereof (4) asbestos and/or asbestos-containing materials, (5) PCBs, or
PCB-containing materials or fluids, (6) any substances with respect to which any
federal, state or local agency or other governmental authority may require
either an environmental investigation or environmental remediation, and (7) any
other hazardous or noxious substance, material, pollutant or solid or liquid
waste that is regulated by any Environmental Orders and Laws.
"Indebtedness" means any Liability of Borrower, whether
direct, indirect, or contingent (a) for the payment of borrowed money, (b) that
is evidenced by a promissory note, bond, debenture, or similar instrument or (c)
all leases which should be capitalized on the books of the Borrower as lessee in
accordance with GAAP.
"Intangibles" means all copyrights, trademarks, trade names,
service marks, service names, licenses, patents, permits, jingles, rights to
software franchises, trade secrets, know-how, processes, righter privileges, and
other similar intangible or intellectual property
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rights and interests (and any goodwill associated with any of the foregoing)
applied for, issued to or owned by Borrower (whether or not any registration or
filing has been made with respect thereto) or under which Borrower is licensed
or franchised or in which Borrower has any interest or which is used or useful
in the business and operations of any owned station, including these listed in
Section 4.9 of the Disclosure Schedule.
"Keymarket Closing Date" means the "Closing Date", an defined
in the Keymarket Purchase Agreement.
"Keymarket Purchase Agreement" means the Asset Purchase
Agreement entered into on March 29, 1995 between Lender and the Keymarket
Sellers.
"Keymarket Sellers" means Keymarket of New Orleans, Inc., a
Georgia corporation Keymarket of NEPA, Inc., a Georgia corporation, Lackazerene
Inc, a Georgia corporation, Keymarket of Buffalo, Inc., a Georgia corporation
Keymarket of Nashville, Inc., a Georgia corporation, and Keymarket of Los
Angeles, Inc., a California corporation, and Keymarket Communications, a Georgia
general partnership.
"Lender Debt" means any obligation of Borrower (a) to pay to
Lender the principal of and interest on the Note; (b) to pay, satisfy, or
perform any other Liability or obligation to Lender, whether arising under this
Agreement or otherwise, whether now existing or hereafter incurred matured or
unmatured, direct or contingent, joint or several, including any extensions,
modifications, or renewals thereof and substitutions therefor, and including
without limitation all costs and expenses, including interest thereon and
reasonable attorneys' fees, incurred by Lender for the protection preservation,
or enforcement of rights and remedies arising hereunder or under the Related
Documents; (c) to repay to Lender all amounts advanced at any time by Lender,
including, without limitation, advances for principal or interest payments to
prior secured parties, mortgagee, or lienors, or for taxes, levies, insurance,
rents or repairs to, or maintenance or storage of, any of the property of
Borrower; (d) to perform any covenant or agreement made with Lender; or (e) to
take any other action in respect of any other Liability of any nature of
Borrower to Lender.
"Lender's Option" means the Option Agreement dated the date
hereof among Confer, Borrower and Lender.
"Liability" means (a) any liability or obligation, matured,
contingent, or otherwise, that, in accordance with generally accepted accounting
principles, consistently applied, should be classified as a liability, including
all tax and other proper accruals whether or not it is necessary to disclose
such on a balance sheet; (b) any obligation secured by any mortgage, pledge,
security agreements security interest liens or conditional sale or other title
retention agreement validly existing on or applying to any property or asset
owned, acquired, or hold subject thereto by Borrower, whether or not the
obligation secured thereby has been assumed by Borrower; (c) any obligation of
any other Person (i) that Borrower has directly or indirectly guaranteed assumed
responsibility for, endorsed (other than for collection or deposit in the
ordinary course of business), discounted with recourse, agreed (contingently or
otherwise) to
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purchase or repurchase or otherwise acquire, or otherwise agreed to become
directly or indirectly liable or responsible for, or (ii) in consideration of
which Borrower has agreed to supply or advance funds (whether by way of loan,
stock purchase, capital contribution, or otherwise); (d) all Capital
Expenditures that Borrower is required to make by the terms of any lease, rental
agreement, installment or conditional sale agreement, or other agreement; and
(e) all liabilities in respect of unfunded vested benefits under any Plan and in
respect of withdrawal liability incurred under ERISA.
"Licenses" means all licenses. permits, and other
authorizations (including the FCC Licenses) issued by the FCC or any other
federal, state, or local governmental authority to Borrower which are used or
useful in the business and operations of any Owned Station, including those
listed in Section 4.5 of the Disclosure Schedule.
"LMA" means the Time Brokerage Agreement dated as of August
30, 1994, by and between the Spartan Radiocasting Company and Borrower and any
contracts or agreements of Borrower relating to the foregoing, all of which are
listed on Section 4.23 of the Disclosure Schedule.
"LMA Owner" means any owner of an LMA Station.
"Loan Obligations" mean any and all obligations of Borrower
(a) to pay to Lender the principal of and interest on the Note; (b) to pay,
satisfy, or perform any other Liability or obligation to Lender, arising under
this Agreement, the Note, any Related Document or any other document or
instrument executed in connection with the Loans, and including without
limitation all costs and expenses, including interest thereon and reasonable
attorneys' fees, incurred by Lender for the protection, preservation, or
enforcement of its rights and remedies arising hereunder, under the Note, any
Related Document or such other documents; or (c) to perform any other covenant
or agreement made with Lender hereunder or under the Note, any Related Document
or such other documents.
"Material Adverse change" means a material adverse change,
effect or development (or any change, effect or development that is reasonably
likely to have a material adverse effect) on the assets, business, operating
condition (excluding financial condition) or prospects of the specified
Person(s).
"Option" means the Option Agreement dated August 30, 1994 for
the purchase of WSPA-AM and WSPA-FM Spartanburg, South Carolina between The
Spartan Radiocasting Company and Borrower.
"Permitted Lien" means any of the following liens,
encumbrances, or security interests:
(a) liens for taxes or assessments and similar
charges, that are either (i) not delinquent or (ii) being contested diligently
and in good faith by appropriate proceedings, and as to which Borrower has set
aside adequate reserves on its books;
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(b) statutory liens, . such as mechanics,
materialman's, warehouseman's, carrier's, landlord's (including those landlord's
liens deemed to arise by contract) or other similar liens, incurred in good
faith in the ordinary course of business, that are paid in the ordinary course
of business or that are bonded in order to remove such lion of record within
sixty days after the moneys become due and owing;
(c) liens or security interests arising under or
pursuant to this Agreement or any Related Document or otherwise securing Lander
Debt; and
(d) liens incurred in connection with equipment
leases entered into by Borrower, which are now existing or incurred hereafter in
the ordinary course of business, so long as the aggregate amount of such liens
does not exceed $10,000 at any time.
"Person" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, joint
ventures, associations companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not local entities (including
the Stations), and governments and agencies and political subdivisions thereof.
"Possible Default" means an event, situation, or thing that,
with the lap" of any applicable grace period or the giving of notice or both,
would constitute an Event of Default.
"Real Property" means all fee estates and buildings and other
improvements thereon, leasehold interests and all buildings and other
improvements thereon, easements, licenses, rights to access, rights-of-way, and
other real property interests used or useful in the business and operations of
any Owned Station, including the property identified and described in Section
4.6 of the Disclosure Schedule.
"Related Document" means any promissory note, agreement,
guaranty, assignment, collateral assignment mortgage, security agreement, pledge
agreement, financing statement, or other agreement, writing, document, or
instrument, or any amendment or restatement of any of the foregoing, furnished
to Lender pursuant to or otherwise in connection with this Agreement and shall
include, without limitation, the Note.
"Release" means any release, spill, emission leaking, pumping,
pouring, injection, escaping, emptying, deposit, disposal, discharge, dispersal,
leaching, or migration into the indoor or outdoor environment (including,
without limitation, the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), or into or out of
any Real Property and any real property operated or used by Borrower, including
the movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.
"Renewal" means a grant by the FCC of the 1995 license renewal
application for each of the Stations.
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"Restricted Investment" means any investment, by stock
purchase, capital contribution, loan, advance, guaranty of indebtedness,
assumption of liability, or otherwise, in any Affiliate, or any other Person if
such other Person becomes an Affiliate as a result of such investment, of
Borrower.
"Restricted Payment" means (a) any payment or distribution
made, liability incurred, or other consideration given for the purchase,
acquisition, redemption, or retirement of any capital stock of the Borrower, or
as a dividend, return of capital, or other payment or distribution of any kind
on any capital stock of the Borrower outstanding at any time, or (b) any payment
in connection with any loan from a stockholder or Affiliate to the Borrower, or
(c) any payment to purchase, redeem, acquire or retire, or otherwise in respect
of, any Indebtedness or any other liability that is subordinate in right of
payment to, or is pari passu with, the Loans.
"Subsidiary" means any corporation, partnership, joint venture
or other legal entity (a) of which Borrower directly or indirectly owns or
controls at the time outstanding shares of stock or other equity or ownership
interests which have in ordinary circumstances (not dependent upon the happening
of a contingency) voting power to elect a majority of the board of directors, or
similar governing body of said corporation, partnership, joint venture or other
legal entity or otherwise have the legal right to control the management,
policies and direction of such corporation, partnership, joint venture or other
legal entity or (b) of which shares of stock or other equity or ownership
interests of the character described in the foregoing clause (a) are at the time
owned or controlled directly or indirectly by Borrower and one or more
Subsidiaries as defined in the foregoing clause (a) or by one or more such
Subsidiaries.
"Tangible Personal Property" means all machinery, equipment,
tools, vehicles, furniture, office equipment, plant, inventory, goods and wares
of every character (including without limitation all video and audio libraries
and archives) and other tangible personal property owned by Borrower, including
the property identified and described in Section 4.7 of the Disclosure Schedule
and all logs, customer lists, files, lists of advertisers, vendors and
suppliers, computer and electronic data processing material programs and
programming material, plans, diagrams, blueprints schematics, and books and
records relating to the operation of any Owned Station (other than those which
are included among the Excluded Assets), filings with the FCC, and executed
copies of the Contracts.
1.2 List of Other Definitions. The following is a list of
additional terms used in this Agreement and a reference to the Section hereof in
which such term is defined:
Terms Section
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Administration Section 4.21
Advance Loans Section 2.l
Approved Capital Expenditures Section 5.2
Base Rate Section 2.2 (a)
CERCLIS Section 4.20(a)
Closing Date Section 3.1(a)
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Closing Date Loan Section 2.1
Closing Date Notice Section 2.4
Code Section 4.12(j)
Communications Act Section 5.6(a)
Compensation Arrangement Section 4.12(j)
Employee Plan Section 4.12(J)
Environmental Orders and Laws Section 4.20(a)
Environmental Permits Section 4.20(b)
ERISA Section 4.12(j)
FCC Recitals
LMA Stations Recitals
Loans Section 2.1
Multi-employer Plan Section 4.12(j)
Note Section 2.4
Option Loan Section 2.1
OSHA Section 4.21
Owned Stations Recitals
PCBS Section 4.20(c)
Stations Recitals
Any accounting term not specifically defined in this Section 1
shall have the meaning assigned thereto by generally accepted accounting
principles not inconsistent with Borrower's present accounting procedures.
ARTICLE II
Amount and Terms of Credit
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2.1 Loans. (a) Subject to the terms and conditions of this
Agreement, Lander shall make (i) a loan of Five Million Five Hundred and Fifty
Thousand ($5,550,000) Dollars on the closing Date (the "Closing Date Loan")
subject to adjustments an provided in the following paragraph; (ii) at the
request of Borrower, but in the reasonable discretion of Lander, additional
advances not to exceed Five Hundred Thousand ($500,000) for capital and other
operating expenditures (including Approved Capital Expenditures) related to the
operation of the Stations (the *Advance Loans"); and (iii) upon the closing in
connection with the exercise of the Option with the prior written consent of
Lander pursuant to Section 5.14 hereof, a loan in the amount of Five Million one
Hundred Fifty Thousand Dollars ($5,150,000) as the purchase price in connection
with the exercise of the Option, which amount shall be subject to Lender's
approval (the "Option Loan", together with the Closing Date loan and the Advance
Loans, collectively, the "Loans").
(b) If following final resolution of the
determination of the amount of the Working Capital Balance or the Working
Capital Deficit, as the case may be, as contemplated by Section 7.1(p), there
are changes in the amount of such Working Capital Balance or Working Capital
Deficit from that agreed upon by Buyer and Lender as of the
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Closing Date following receipt of Borrower's Certificate under Section 7.1(p),
the following shall apply:
(i) If the Working Capital Balance is
greater, or the Working Capital Deficit is loss, than
tho amounts determined as of the Closing Date, a loan
in the amount of such difference shall be made to the
Borrower;
(ii) If the Working Capital Balance is less,
or Working Capital Deficit is greater, than the
amounts determined as of the Closing Date, a downward
adjustment in the $1,000,000 amount payable by Lender
at the consummation of the asset purchase or stock
purchase (as the case may be) as contemplated under
the Lender's Option, shall be made in an amount equal
to the amount of such difference.
2.2 Interest.
(a) The Loans shall boar interest at the applicable
federal rate, as defined in ss.1274(d) of the Code, (the "Base Rate"). If any
installment of principal or interest or any other Loan Obligations are not paid
when due, all amounts of principal, interest, and other Loan Obligations shall
thereafter bear interest until paid at the Default Rate. Interest shall accrue
on the outstanding principal balance of each of the Loans from the date of each
such Loan and compound annually. Interest shall be computed on the basis of a
year having 360 days and actual days elapsed. Interest on the Loans shall be
paid on the Maturity Date.
(b) The rate of interest payable on the Note from
time to time shall in no event exceed the maximum rate, if any, permissible
under applicable law. If the rate of interest payable on the Note is ever
reduced an a result of the preceding sentence and any time thereafter the
maximum rate permitted by applicable law shall exceed the rate of interest
provided for on the Note, then the rate provided for on the Note shall be
increased to the maximum rate permitted by applicable law for such period as is
required so that the total amount of interest received by Lender is that which
would have been received by Lender but for the operation of the preceding
sentence.
2.3 Maturity. Unless Payment is earlier demanded by Lender,
the Outstanding Principal amount Of the Loans together with all interest accrued
but unpaid thereon, shall be payable on the earlier of (a) July 6, 2000, and (b)
the date on which the asset purchase agreement or the stock purchase agreement
contemplated under the Lender's Option is terminated or consummated and (c) the
date on which the Lender's Option expires and is terminated ("the Maturity
Date").
2.4 The Note. The Loans shall be evidenced by promissory note
in the principal amount of Eleven Million Two Hundred Thousand Dollars
($11,200,000) and payable to Lender, substantially in the form attached hereto
as Exhibit-A attached hereto (the "Note").
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2.5 Payments. All payments or prepayments made or due
hereunder or under the Note shall be made, without offset or counterclaim, in
immediately available funds to Lender prior to 12:00 noon, St. Louis, Missouri
time, on the date when due, at Lender's offices at 1215 Cole Street, St. Louis,
Missouri 63106, or at such other place as Lender may designate in writing.
Whenever any payment to be made under this Agreement is due on a day that is not
a business day, such payment may be made on the next succeeding business day and
such extension of time shall in each case be included in the computation of the
interest payable on the Note.
2.6 Prepayments. Borrower shall not have the right to prepay
all or any part of the Loans, plus interest accrued on the amount prepaid
without the prior written consent of Lender.
ARTICLE III
The Closing
3.1 Time and Place of Closing. (a) Subject to the satisfaction
or, to the extent permissible by law, waiver by Lender on the date scheduled for
Closing of the closing conditions described in Article VII hereof, the parties
hereto shall be obligated to consummate the transactions contemplated hereby at
the Closing of this Agreement, which shall take place at 10:00 a.m., eastern
time, on the Keymarket Closing Date (the "Closing Date").
(b) The Closing shall take place at the offices of
Dow, Lohnes & Albertson, 1235 23rd Street, N.W., Washington, D.C. 20037;
O'Melveny & Myers, 153 East 53rd Street, New York, New York 10022; or at such
other place as shall be mutually agreed to by Lender and-Borrower.
ARTICLE IV
Borrower's Representations and Warranties
-----------------------------------------
Borrower represents and warrants to Lender as follows:
4.1 Organization and Standing. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina and is duly qualified to do business in each jurisdiction where
the conduct of the business or operations of the Stations owned or operated by
Borrower requires such qualification (which jurisdictions are set forth in
Section 4.1 of the Disclosure Schedule). Borrower has the requisite corporate
power and authority to own, lease and operate the Assets, to carry on the
business of the Stations owned or operated by Borrower as now being conducted
and to execute and deliver this Agreement, the Note, each Related Document and
the documents contemplated hereby and thereby to which it is a party and to
perform and comply with all terms, covenants and conditions to be performed and
complied with by Borrower hereunder and thereunder.
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4.2 Subsidiaries. Borrower does not have any Subsidiary or any
other direct or indirect equity interest (by way of stock ownership, partnership
interest or otherwise) in any entity or person.
4.3 Authorization and Binding Obligation. Borrower has full
corporate power and authority to execute, deliver and perform this Agreement,
the Note, each Related Document and all documents contemplated hereby to which
it is a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement, the Note,
each Related Document and all documents contemplated hereby to which it is a
party and the consummation of the transactions contemplated hereby and thereby
by Borrower have been duly and validly authorized by all necessary corporate
action on the part of Borrower and no further action or approval of any director
or shareholder of Borrower or any lender to Borrower is required. This
Agreement, the Note and each Related Document has been, and the documents
contemplated hereby and thereby to which it is a party will be, duly and validly
executed and delivered by Borrower and constitutes (or in the case of documents
not yet executed, will be) a legal, valid and binding agreement of Borrower
enforceable against Borrower in accordance with its respective term, except as
the same may be limited by bankruptcy, insolvency, reorganization, moratorium
and other similar laws and related court decisions of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
4.4 Consents and Approvals; No Violation.
(a) Except as set forth in Section 4.4 of the
Disclosure Schedule, there in no requirement applicable to Borrower to make any
filing with, or to obtain any permit, authorization, consent or approval of, any
governmental or regulatory authority or third party (i) in connection with or to
permit the lawful consummation by Borrower of the borrowings and other
transactions contemplated under this Agreement, the Note, any Related Documents
and the other transactions contemplated hereby and thereby; or (ii) to maintain
the continuing validity and effectiveness of (and to prevent any default under
or violation of) any License, FCC License or Contract from and after the date
hereof and after consummation of the transactions contemplated hereby.
(b) The execution, delivery and performance of this
Agreement, the Note and each other Related Document to which Borrower is a party
(assuming receipt of any consents set forth in Section 4.4 of the Disclosure
Schedule) will not (i) violate, conflict with or result in any breach of any
provision of the Certificate of Incorporation or Bylaws of Borrower, (ii)
violate, conflict with or result in a breach or default (or give rise to any
right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, agreement lease or other
instrument or obligation to which Borrower is a party or by which any of its
assets or the Assets or the Owned Stations may be bound, (iii) violate or
conflict with any statute, law, rule, regulation, order, writ, injunction or
decree applicable to Borrower, or any of its assets or any of the Assets or any
of the Owned Stations, (iv) require the consent of any third party or (v) create
any claim, liability, mortgagor lien, pledge, condition, charge, or
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encumbrance of any nature whatsoever upon any of Borrower's property, or capital
stock or other equity capital.
4.5 Governmental Authorizations. Section 4.5 of the Disclosure
Schedule lists the FCC Licenses and all other Licenses from governmental and
regulatory authorities which are required for the lawful conduct of the business
and operations of each Owned Station in the manner it is now being conducted.
such FCC Licenses and other Licenses constitute all such licenses necessary to
conduct the business and operations of the Owned Stations an presently conducted
Borrower is the authorized legal holder of the FCC Licenses and all other
Licenses listed in Section 4.5 of the Disclosure Schedule and designated as hold
by Borrower, None of the FCC licenses or other Licenses in subject to any
restriction or condition which would limit the operation of the owned stations
as presently operated. Borrower in not a party to any agreement with any
community group, governmental authority or other third party restricting
programming, employment practices or other aspects of the business or operations
of any owned Station. Borrower has delivered to Lender true, correct and
complete copies of the Licenses listed in Section 4.5 of the Disclosure Schedule
(including any and all amendments and other modifications thereto). The FCC
Licenses and all other Licenses listed in Section 4.5 of the Disclosure Schedule
are valid for the full term set forth in Section 4.5 of the Disclosure Schedule,
are in good standing and are in full force and effect and are not subject to any
liens or encumbrances except as set forth in Section 4.5 of the Disclosure
Schedule Borrower has not engaged in any activity which could cause the
revocation or suspension of the FCC Licenses or any such other Licenses.
Borrower has no reason to believe that anything has occurred since the last
renewal of the FCC Licenses that would adversely affect the application for
Renewal or the prospects for obtaining the Renewal in the ordinary course of
business for full license terms without any adverse new conditions. Borrower is
not aware of any action which would adversely affect the interference-free
technical service area of any owned station as such service area is presently
authorized by the FCC.
4.6 Title to and Condition of Real Property. (a) Section 4.6
of the Disclosure Schedule contains a listing of all the Real Property, and the
Real Property Constitutes all real property interests of any nature whatsoever
necessary to conduct the business or operations of the Owned Stations an now
conducted. Borrower has delivered to Lander true, correct and complete copies of
all deeds, by which Borrower has received an interest in any of the Real
Property, leases, by which Borrower in the losses or lessor of any of the Real
Property, title insurance policies, which Borrower has received with respect to
any of the Real Property, surveyor which Borrower has received with respect to
any of the Real Property, and inspection reports or other instruments or
reports, which Borrower has received with respect to any of the Real Property,
(including any and all amendments and other modifications of such instruments).
All of the Real Property has full practical and insurable legal access to public
roads or streets and has all utilities and services necessary for the proper and
lawful conduct and operation of each of the Owned Stations as now conducted. All
towers, earth receiving dishes and facilities, and other installations equipment
and facilities utilized in connection with the Owned Stations (including any
related buildings and guy anchors) are maintained, placed and located in
accordance with the provisions of all applicable laws, rules, regulations,
deeds, easements, restrictions, leases, licenses, permits or other arrangements
except to the extent that any failure to
- 12 -
so maintain, place or locate such equipment does not materially interfere with
and will not affect the present or reasonably expected future use of such
equipment or the Real Property and are located entirely on the Real Property
either owned or leased by Borrower, Borrower has sole, good, valid, indefeasible
and marketable fee simple title, insurable at standard rates by a reputable
national title insurer, to all of the fee estates (including the buildings or
improvements thereon), listed in Section 4.6 of the Disclosure Schedule and
designated as owned by Borrower, free and clear of all liens, mortgages,
pledges, covenants, options, rights of first refusal, easements, restrictions,
encroachments, leases, charges and other claims and encumbrances of any nature
whatsoever, and without reservation or exclusion of any mineral, timber or other
rights or interests, except for (i) liens for real estate taxes not yet due and
payable, (ii) liens in favor of Bank of Montreal, as agent, which will be
removed prior to or at the Closing, (iii) easements, rights-of-way and
restrictions of record, none of which materially interferes with or affects the
present or reasonably expected future use or value of such property, and (iv)
any other claims, encumbrances, reservations or exclusions which are described
in Part 2 of Section 4.6 of the Disclosure Schedule.
(b) With respect to each leasehold interest included
in the Real Property, Borrower is not in default thereunder (nor to the
knowledge of Borrower is any other party thereto) and such leasehold interest
(i) is valid, subsisting and in full force and effect; (ii) is not subject to
any liens or encumbrances, except in favor of Bank of Montreal, as agent, which
will be removed prior to or at the Closing or as set forth in Section 4.6 of the
Disclosure Schedule; and (iii) so long an Borrower fulfills its obligations
under the lease therefor, Borrower has enforceable rights to nondisturbance and
peaceful and quiet enjoyment, and no third party holds any real property
interests in the leased promises with the right to foreclose upon or otherwise
terminate or materially impair Borrower's leasehold interest in such promises
(absent a default by Borrower under the terms of the lease therefor). The rental
not forth in each of the leases listed in Section 4.6 of the Disclosure Schedule
in the actual rental being paid, and there are no separate agreements or
understandings with respect to same. Borrower currently has the full right to
exercise any-renewal options contained in any of the leases listed in Section
4.6 of the Disclosure Schedule, on the terms and conditions contained therein
and, upon due exercise, currently would be entitled to enjoy the use of each
leased promises for the full term of such renewal options. To the best of
Borrower's knowledge the leased promises are occupied under a valid and current
occupancy permit or the like to the extent required by law; there are no facts
known to Borrower which would prevent any leased promises from being occupied
after the closing in substantially the same manner as before.
(c) All Real Property (including the improvements
thereon) (i) is in good condition and repair in accordance with normal and
customary industry practices (ordinary wear and tear excepted), (ii) is
available for immediate use in the conduct of the business or operations of each
of the owned Stations, and (iii) complies in all material respects with all
applicable building or zoning codes and the regulations of any governmental
authority having jurisdiction. There are no condemnation proceedings or eminent
domain proceedings, lawsuits or legal proceedings of any kind pending or, to the
knowledge of Borrower, threatened, in connection with any Real Property. The
Real Property and the present us, and condition thereof do not violate any
applicable deed restrictions or other covenants, restrictions, agreements,
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existing site plan approvals, or, in any material respect, any zoning or
subdivision regulations or urban redevelopment plans applicable to the Real
Property as modified by any duly issued variances, and no permits, licenses or
certificates pertaining to the ownership or operation of the Real Property,
other than those which are transferable with the Real Property, are required by
any governmental agency having jurisdiction over the Real Property or their
operation. All improvements made by or constructed for Borrower and, to
Borrower's knowledge with respect to improvements used by Borrower but not made
by it or constructed for it, on the Real Property, were constructed in
compliance in all material respects with all applicable Federal, state or other
statutes, laws, ordinances, regulations, rules, codes, orders or requirements
(including, but not limited to, any building, zoning or environmental laws or
codes) affecting such promises. Section 4.6 of the Disclosure Schedule sets
forth a true and complete list of all construction, architect, engineering and
other agreements, if any, relating to uncompleted construction projects entered
into by Borrower in connection with any Real Property Borrower has heretofore
delivered to Lender true, correct and complete copies of such construction
agreements.
4.7 Title to and Condition of Tangible Personal Property.
Section 4.7 of the Disclosure Schedule contains a listing of each item of
Tangible Personal Property with a value of $2,500 or more. Except with respect
to leased property or an set forth in Section 4.7 of the Disclosure Schedule,
Borrower owns and has good, valid and indefeasible title to the Tangible
Personal Property, free and clear of all liens, mortgages, pledges, and
encumbrances, except for liens for taxes not yet due and payable, liens in favor
of Bank of Montreal, as agents which will be removed prior to or at the Closing,
and any liens set forth in Section 4.7 of the Disclosure Schedule and annotated
to indicate that such liens will be removed at or prior to Closing. Borrower has
not materially reduced its inventory of usable supplies and supply parts from
the quantities normally maintained by Borrower in accordance with its past
practices. Except as set forth in Section 4.7 of the Disclosure Schedule, the
Tangible Personal Property listed in Section 4.7 of the Disclosure Schedule is
in good operating condition and repair in accordance with normal and customary
radio industry practices for items of comparable age and use, ordinary wear and
tear excepted, and is available for immediate use in the business and operations
of the Owned Stations.
4.8 Contracts.
(a) Section 4.8(a) of the Disclosure Schedule lists
all Contracts, except (i) Contracts entered into in the ordinary course of
business for the sale or sponsorship of advertising time on any Owned Station,
for cash substantially at such owned Station's prevailing rat* in an amount for
each such contract not in excess of Fifty Thousand Dollars ($50,000) and with
not more than twelve (12) months remaining in any of their terms; and (ii)
Contracts (other than Contracts as specified in clause (i) above for the sale or
sponsorship of advertising time on any owned Station), entered into in the
ordinary course of business and which impose monetary obligations not in excess
of Twelve Thousand Dollars ($12,000) individually, and which impose no
significant non-monetary obligations on Borrower. Borrower has delivered or made
available to Lender true, correct and complete copies of all written Contracts
and memoranda of all oral agreements and understandings listed in Section 4.8(a)
of the Disclosure Schedule (including any and all amendments and other
modifications to the Contracts). Each of the Contracts is in full
- 14 -
force and effect and constitutes the legal, valid, binding and legally
enforceable obligation of Borrower (and, to the knowledge of Borrower, of the
other parties thereto), and Borrower has good, valid and indefeasible title to
such Contract, free and clear of any lions or encumbrances except an set forth
in Section 4.8(a) of the Disclosure Schedule. Except as set forth in Section
4.8(a) of the Disclosure Scheduler there is not, under any of the Contracts
designated in Section 4.8(a) of the Disclosure Schedule, any existing defaults
event of default or other event which, with or without due notice or lapse of
time or both, would constitute a default or event of default on the part of
Borrower or, to the knowledge of Borrower, any other party thereto.
(b) Section 4.8(b) of the Disclosure Schedule
describes all outstanding commitments or proposals to make capital expenditures,
additions, improvements and projects which are not yet completed (whether or not
yet begun or in progress), which have been approved by management of any Owned
Station and which will or are expected to require payments to third parties.
4.9 Intangibles. Section 4.9 of the Disclosure Schedule is a
list of all the Intangibles. Borrower has delivered to Lender true, correct and
complete copies of all documents establishing or evidencing the Intangibles.
Except as disclosed in Section 4.9 of the Disclosure Schedule, Borrower owns,
free and clear of all liens and encumbrances, and has good, valid and
indefeasible title to, all the Intangibles designated in Section 4.9 of the
Disclosure Schedule as being owned by Borrower, and Borrower is not infringing
upon or otherwise acting adversely to the right or, to the knowledge of Borrower
claimed right, of any person. Except as disclosed in Section 4.9 of the
Disclosure Schedule, Borrower is not obligated pursuant to any contract to make
any payments by way of royalties, fees or otherwise with respect to any of the
Intangibles Borrower has not received any written notice of any claim that it
has infringed upon or is in conflict with any Intangibles of any third party,
which claim remains outstanding or unresolved an of the date hereof.
4.10 Financial Statements. Borrower has heretofore delivered
to Lender true and complete copies of the Financial Statements. Except as set
forth in Section 4.10 of the Disclosure Schedule, and in the case of those
statements ending before year-end subject to customary year-end adjustments and
accruals, the Financial Statements are in accordance with the books and records
of Borrower, have been prepared in accordance with GAAP consistently applied and
present fairly the financial condition, and results of operations of Borrower
for the periods and as of the date set forth. Borrower has no material
liabilities (fixed, accrued, contingent or otherwise) that have not been
disclosed or referred to in the Financial Statements.
4.11 Totality of Assets. The Assets include all of the assets
or rights, including without limitation, all necessary Real Property, Tangible
Personal Property, Contracts, Licenses, FCC Licenses and Intangibles, necessary
for the continued operation of the Owned Stations in the same manner as
currently operated.
4.12 Personnel Information; Employee Benefit Plans.
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(a) Borrower has heretofore delivered to Lender a
true and complete list of all persons employed at the Owned Stations, including
a description of all compensation arrangements affecting such persons and a
description of the basis for their compensation.
(b) All of Borrower's Employee Plans and Compensation
Arrangements are listed and described in Section 4.12 of the Disclosure
Schedule, and true, correct and complete copies of any such written Employee
Plans and Compensation Arrangements (or related insurance policies) have been
furnished to Lender, along with copies of any employee handbooks or similar
documents describing such Employee Plans and Compensation Arrangements, True,
correct and complete descriptions of any unwritten Employee Plans or
Compensation Arrangements also are provided in Section. 4.12 of the Disclosure
Schedule. Except as disclosed in Section 4.12 of the Disclosure Schedule,
Borrower is not a party to and does not have in effect or to become effective
after the date of this Agreement any bonus, cash or deferred compensation,
severance, medical, health or hospitalization, pension, profit sharing or
thrift, retirement, stock option, employee stock ownership, life or group
insurance, death benefit, welfare, incentive, vacation sick leave, disability or
trust agreement or arrangement.
(c) Each Employee Plan and Compensation Arrangement
has been administered in compliance with its own term and in material compliance
with the provisions of ERISA, the Code, the Age Discrimination in Employment Act
and any other applicable Federal or state laws.
(d) Borrower does not contribute to and is not
required to contribute to any Multi-employer Plan with respect to its employees,
and neither Borrower nor any other trade or business under common control with
Borrower (within the meaning of Sections 414(b), (c), (a) or (o) of the Code)
have incurred or reasonably expect to incur any "withdrawal liability," as
defined under Section 4201 et seq. of ERISA.
(e) At all times on or prior to the closing, the
Employee Plans, to the extent such Employee Plans are intended to be
tax-qualified, satisfy all coverage and minimum participation requirements if
any, imposed on such Employee Plans by the applicable terms of the Code and
ERISA.
(f) Borrower is not aware of the existence of any
governmental audit or examination of any Employee Plan or compensation
Arrangement or of any facts which would lead it to believe that any such audit
or examination is pending or threatened. There exists no action, suit or claim
(other than routine claims for benefits) with respect to any Employee Plan or
Compensation Arrangement pending or, to the knowledge of Borrower, threatened
against any of such plans or arrangements, and Borrower possesses no knowledge
of any facts which could give rise to any such action, suit or claim.
(g) Except as described in Section 4.12 of the
Disclosure Schedule, neither Borrower nor any other trade or business under
common control with Borrower (within
- 16 -
the meaning of Sections 414(b), (c), (m) or (o) of the Code) sponsor, maintain
or contribute to any Employee Plan or Compensation Arrangement that provides
retiree medical or retiree life insurance coverage to former employees of
Borrower.
(h) Except as described in Section 4.12 of the
Disclosure Schedule, with respect to each Employee Plan and, to the extent
applicable, each Compensation Arrangement: (i) each Employee Plan that is
intended to be tax-qualified, and each amendment thereto, is the subject of a
favorable determination letter, and no plan amendment that is not the subject of
a favorable determination letter would affect the validity of an Employee Plants
letter; (ii) no liability to the Pension Benefit Guaranty corporation has been
or is expected by Borrower or any trade or business under common control with
Borrower (within the meaning of Sections 414(b), (c), (a) or (o) of the Code) to
be incurred; (iii) no Employee Plan ever has incurred an "accumulated funding
deficiency," as such term is defined in Section 302(a)(2) of ERISA and Section
412(a) of the Code, whether or not waived, and otherwise always has fully met
the funding standards required under Title I of ERISA and Section 412 of the
Code; (iv) no "reportable events" as that term in defined in Section 4043(b)(1)
through (8) of ERISA and, to the knowledge of Borrower, Section 4043(b)(9) of
ERISA, ever has occurred with respect to any Employee Plan; (v) there are no
unfunded liabilities with respect to any Employee Plan, i.e., the actuarial
present value of all "benefit liabilities" determined within the meaning of
section 401(a)(2) of the Code) under such Employee Plan, whether or not vested,
does not exceed the current value of the assets of such Employee Plan; (vi) no
prohibited transaction, within the definition of section 4975 of the Code or
Title 1. Part 4 of ERISA, has occurred which would subject Borrower to any
liability; and (vii) all contributions premiums or payments accrued, in whole or
in parts under each Employee Plan or Compensation Arrangement or with respect
thereto as of the Closing will be paid by Borrower prior to the Closing,
including, but not limited to, contributions thereto with respect to the plan
year ending immediately prior to the Closing.
(i) Section 4.12 of the Disclosure Schedule contains
a true, correct and complete list of all qualified beneficiaries, an defined
under Section 4980B(g)(1) of the Code as of the effective date of this Agreement
(excluding, however, qualified beneficiaries who are in the election period for
continuation coverage but who have not yet elected continuation coverage) with
respect to Borrower's operation of the owned Stations, There have been no
failures to provide continuation coverage as required by Section 4980B(f) of the
Code.
(j) For purposes of this Agreement, the following
terms shall have the meaning indicated: (i) "Employee Plan" shall mean any
pension, profit-sharing, deferred compensation, vacation, bonus, incentive,
medical, vision, dental, disability, life insurance or any other employee
benefit plan as defined in Section 3(3) of ERISA to which Borrower or any entity
related to Borrower (under the terms of Section 414(b), (c), (m) or (o) of the
Code) contributes or to which Borrower or any entity related to Borrower (under
the terms of Sections 414(b), (c), (m) or (o) of the Code) sponsors, maintains
or otherwise is bound; (ii) "Code" shall mean the Internal Revenue Code of 1986,
as amended, any successor thereto and any regulations promulgated thereunder;
(iii) "Compensation Arrangement" shall mean any plan or
- 17 -
compensation arrangement other than an Employee Plan, whether written or
unwritten which provides to employees, former employees, officers, directors and
shareholders of Borrower or any entity related to Borrower (under the terms of
Section 414(b), (c), (m) or (o) of the Code) any compensation or other benefits,
whether deferred or not, in excess of bass salary or wages, including, but not
limited to, any bonus or incentive plan, stock rights plan, deferred
compensation arrangement life insurance, stock purchase plan, severance pay plan
and any other employee fringe benefit plan; (iv) "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended, any successor thereto and
any regulations promulgated thereunder; and (v) "Multi-employer Plan" means a
plan, as defined in ERISA Section 3(37), to which Borrower or any entity related
to Borrower (under the terms of Section 414(b) or (c) of the Code) contributes
or is required to contribute.
(k) Borrower has provided to Lender a copy of all
employment contacts with Owned Station employees, all employee handbooks and
employment policies or procedures* Borrower agrees to provide Lender access to
all personnel records for any and all Owned Station employees.
4.13 Labor Relations. Except as not forth in Section 4.13 of
the Disclosure schedule, Borrower is not a party to any collective bargaining
agreement. Borrower is in compliance in all material respects and have complied
in all material respects with respect to the operations of the Owned Stations
with all applicable laws, rules and regulations relating to the employment of
labor including, without limitation, those related to wages, hours, collective
bargaining, occupational safety, discrimination, and the payment of social
security and other payroll-related taxes. Except as set forth in Section 4.13 of
the Disclosure Schedule, there are no organizing campaigns, picketing, work
stoppages, work slow-downs, work to the rule campaigns, strikes, unfair labor
practice charges, arbitrations, lawsuits or other labor disputes, disturbances
or other controversies or proceedings pending or to Borrower's knowledge
threatened involving Borrower or the employees of any Owned Station or any labor
union or other collective bargaining unit claiming to represent any of the
employees of any Owned Station or seeking to organize the employees of any Owned
Station.
4.14 Litigation. Except as set forth in Section 4.14 of the
Disclosure Schedule, there is no litigation or material action, proceeding or
investigation pending or to Borrower's knowledge threatened against or affecting
Borrower or any owned Station in any federal, state or local court, or before
any arbitrator or administrative agency (including, without limitation, any
proceeding which seeks the forfeiture of, or opposes the renewal of, any of the
FCC Licenses or the other Licenses listed in Section 4.5 of the Disclosure
Schedule), or which seeks to enjoin or prohibit, or otherwise questions the
validity of, any action taken or to be taken pursuant to or in connection with
this Agreement, the Note or any Related Document or which adversely affects
Borrower's ability to perform its obligations under this Agreement, the Note or
any other Related Document. Except as set forth in Section 4.14 of the
Disclosure schedule, neither Borrower nor any Owned Station nor any of the
Assets is subject to any Judgment, write, order, injunction, award or decree by
any court, arbitrator or governmental authority, including any administrative
agency.
- 18 -
4.15 Reports. All material returns, reports and statements
currently required to be filed by Borrower with the FCC and any other
governmental agency relating to the operations of any Owned Station have been
filed, and all reporting requirements of the FCC and other governmental
authorities having jurisdiction thereof have been complied with in all material
respects. All of such reports, returns and statements are complete and correct
in all material respects as filed. All documents required by the FCC to be
maintained in Borrower's public file (as defined by the rules of the FCC) are
contained therein.
4.16 Taxes. Borrower has filed, or caused to be filed, all
federal, state and local tax returns which are required to be filed in
connection with its ownership interest in and operation of the Owned Stations
owned by Borrower, Except as set forth in Section 4.16 of the Disclosure
Schedule, Borrower has paid, or made provisions for the payment of, (i) all
taxes (including interest and penalties) shown due on such returns for the
periods covered thereby, except such accrued and unpaid taxes for which
appropriate accruals are reflected in the Financial Statements and (ii) all tax
deficiencies (including interest and penalties) assessed as a result of any
examination of tax returns of Borrower by federal, state or local tax
authorities. Borrower is not delinquent in the payment of and there are no
claims pending for the payment of, any tax (including interest and penalties) of
any nature whatsoever that could impose transferee liability upon Lender.
4.17 Compliance with Laws. Except as set forth in Section 4.17
of the Disclosure Schedule, the operations of each Owned Station have been and
are in compliance in all material respects with all FCC Licenses and any other
material Licenses and all applicable laws, regulations and other requirements of
all federal, state and local governmental authorities having jurisdiction over
such Owned Station and its operations.
4.18 Absence of Certain Changes. Except an set forth in
Section 4.18 of the Disclosure Schedule, since September 30, 1994, (a) to the
date hereof, no Owned Station has suffered a Material Adverse Change and (b)
each Owned Station has been operated in the ordinary course and consistent with
past practices and neither Borrower nor the Owned Stations have:
(i) incurred any obligation or liability (fixed,
accrued, contingent or otherwise) except normal trade or business obligations
and liabilities incurred in the ordinary course of business, none of which is
materially adverse;
(ii) mortgaged, pledged or subjected to any other
lien any of the Assets, tangible or intangible otherwise than in the ordinary
course of business;
(iii) sold, assigned, transferred, leased or
otherwise disposed of or agreed to sell, assigns transfer, lease or otherwise
dispose of any of the Assets, tangible or intangible, except for a fair
consideration in the ordinary course of business, or acquired or leased any
assets or properties except for a fair consideration in the ordinary course of
business;
- 19 -
(iv) cancelled or compromised any claim or liability
other than in the ordinary course of business;
(v) except as shown on the Financial Statements,
waived or released any rights of value or modified any material agreement,
whether or not in the ordinary course of business;
(vi) transferred or granted any rights under any
lease, licenses, agreements, trademarks, trade names, service marks or
otherwise;
(vii) entered into or renewed any employment
contracts or compensation agreements or made, agreed to make or announced any
change in employment policies or procedures, wages, compensation or employee
benefits for any Owned Station employee, except as may be required by an
existing employments agreement, as required by law, or as otherwise expressly
provided herein;
(viii) suffered any material casualty losses or
damages (whether or not any such loss or damage shall have been covered by
insurance);
(ix) terminated, discontinued, closed or disposed of
any plant, facility or business operation;
(x) revalued any of the Assets (whether tangible or
intangible) or changed any of its accounting records or practices or changed its
depreciation or amortization policies or rates;
(xi) made, or forgiven, any loans or advances to any
person, other than for travels customer entertainment or business promotion not
in excess of $5,000 to any one person; or
(xii) entered into any agreement to do any of the
foregoing.
4.19 Transactions with Affiliates. Except for Kerby E. Confer,
Keymarket Consultants, Inc. and as disclosed in Section 4.19 of the Disclosure
Scheduler Borrower in not now, a party, directly or indirectly, to any contract,
lease, arrangement or transaction whether for the purchase, lease or sale of
property, for the rendition of services or otherwise, with any Affiliate of
Borrower, or any officer, director, employee, proprietor, shareholder or any
"associate of Borrower (as the term "associate" is defined in Rule 405 of the
Rules and Regulations promulgated under the Securities Act of 1933, as amended).
4.20 Environmental Matters.
---------------------
(a) Borrower is not in violation of, and has no
liability or obligation under, any applicable order, judgment, injunction,
award, decree or writ or any applicable law, statute, code, ordinance,
regulation or other requirement of any government or political
- 20 -
subdivision thereof, whether federal, state, local or foreign, or any agency,
regulatory authority or instrumentality of any such government or political
subdivision, or any court or arbitrator relating to pollution or protection of
health, public welfare or the environment ("Environmental Orders and Laws"),
including, without limitation, Environmental Orders and Laws relating to
Releases, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials.
There are no claims, actions, suits, proceedings, investigations or inquiries
pending or, to the knowledge of Borrower threatened, and there are no judgments,
orders, writs, or decrees entered against Borrower or relating to or affecting
any Owned Station by or before any federal, state or other court or governmental
authority or agency concerning any Environmental Orders and Laws. None of the
Owned Stations or Borrower has received written notice from the United states
Environmental Protection Agency or any other governmental authority that it is
or may be considered to be a potentially responsible party under any
Environmental Orders and Laws with respect to any site that is listed on the
National Priorities List, the Comprehensive Environmental Response, Compensation
and Liability Act Information System ("CERCLIS") data base or a similar state,
provincial, regional territorial, municipal, local or foreign law list. None of
the Owned Stations or Borrower has received any written notice from any
governmental authority of any condition on any property where any Owned Station
or Borrower has caused Hazardous Materials to be disposed of which would require
any remedial action or removal action, as such terms are defined in
Environmental Orders and Laws.
(b) No lion has been attached to (or is, to the
knowledge of Borrower, threatened to be attached to) any real or personal
property owned or leased by Borrower or relating to any Owned Station pursuant
to any Environmental Orders and Laws. There has been no treatment, storage or
Release of any Hazardous material by any Person on any property owned, operated,
or leased by Borrower or, relating to any Owned Station at any time in any
manner that could reasonably be expected to lead to a material liability. There
are no sites, locations or operations at which there are currently being
undertaken, or have completed, any remedial or response action relating to any
Release of any Hazardous Material, as required by Environmental Orders and Laws.
Borrower has obtained, and is in compliance in all material respects with, all
permits, licenses, authorizations, registrations and other governmental consents
required by applicable Environmental Orders and Laws ("Environmental Permits"),
True, correct and complete copies of all Environmental Permits have been
provided to Lender.
(c) Except as disclosed in Section 4.20 of the
Disclosure Scheduler all of the property owned or leased by Borrower is free of
contamination from any Hazardous Materials, and no discharge, spillage,
uncontrolled loss, seepage or filtration of Hazardous Materials has occurred at,
upon, under or within any property owned or leased by Borrower or at, upon,
under or within any contiguous real estate. Any Hazardous Materials removed for
disposal from the facilities used by Borrower was and is documented, transported
and disposed of in compliance in all material respects with all applicable
Environmental orders and Laws. Except as described in Section 4.20 of the
Disclosure Schedule, none of the property owned or leased by Borrower now
contains, or to the knowledge of Borrower, in the past has contained, any
underground or above ground tanks for the storage of Hazardous Materials. Any
underground storage tanks and/or solid waste disposal facilities owned by
Borrower are used in
- 21 -
compliance in all material respects with Environmental orders and Laws. There
are-no polychlorinated biphonyls ("PCBs") in any facilities (as defined under
Environmental Orders and Laws) on, about, under or within such properties and
there is no friable asbestos at, on, about, under or within such properties.
4.21 OSHA Matters. Each Owned Station and Borrower is in
compliance in all material respects with the requirements of the occupational
Safety and Health Act and the regulations promulgated thereunder and any similar
laws or regulations of any state or local jurisdiction ("OSHA"). None of the
Owned Stations or Borrower has received any citation from the occupational
Safety and Health Administration or any comparable administration of any state
or local jurisdiction (an "Administration") or any Administration inspector
getting forth any respect in which the facilities or operations of such Owned
Station or Borrower are not in compliance with OSHA, or the regulations under
such act, which non-compliance has not been corrected or remedied to the
satisfaction of such Administration or inspector. Borrower has heretofore
furnished to Lender copies of all citations heretofore issued to any Owned
Station or Borrower and relating to any Owned Station under OSHA and copies of
all correspondence from and to such Administration and any Administration
inspectors during the past three years.
4.22 Insurance. Section 4.22 of the Disclosure Schedule lists
all insurance policies of Borrower which relate to the ownership of the Owned
Stations. All of such policies are in full force and effect and Borrower is not
in default in any material respect thereunder.
4.23 LMA and Option. (a) Borrower has delivered to Lender
true, correct and complete copies of the LMA and Option (including any and all
amendments and other modifications thereto). Each of the LMA and Option is in
full force and effect and constitutes the legal, valid, binding and legally
enforceable obligation of Borrower (and, to the knowledge of Borrower, of the
other parties thereto), and Borrower has good, valid and indefeasible title to
the INA and Option, free and clear of any liens or encumbrances except as set
forth in section 4.23(a) of the Disclosure Schedule. Except as set forth in
Section 4.23(a) of the Disclosure Schedule, there is not, under the LMA or
Option, any existing default, event of default or other event which, with or
without due notice or laps of time or both, would constitute a default or event
of default on the part of Borrower or, to the knowledge of Borrower, any other
party thereto. The Option constitutes the only option hold by Borrower for the
purchase of any radio station and the LMA constitutes the only time brokerage
agreement (including sales and marketing agreements with respect to any radio
station. Each of the INA and Option has been and is in compliance in all
material respects with all licenses, permits, and other authorizations issued by
the FCC or any other federal, state, or local governmental authority to any LMA
Owner which are used or useful in the business and operations of any LMA
Station, and all applicable laws, regulations and other requests of all federal,
state and local governmental authorities having jurisdiction over the LMA
Station related thereto and its operations; and
(b) Each of the representations set forth in Article
IV hereof with respect to Borrower and the Owned Stations are hereby made, to
the knowledge of Borrower with respect to the LMA owners and the LMA Stations
and are hereby incorporated herein, and each defined tern included therein shall
be deemed modified such that the definitions of each
- 22 -
such term applies to the LMA Owners and the LMA Stations. Set forth an Section
4.23 of the Disclosure Schedule is all of the analogous information to the
extent reasonably available to Borrower relating to the LMA Owners, Borrower, as
operator of the INA Stations, and LMA Stations that is set forth in Sections 4.1
through 4.22 of the Disclosure Schedules with respect to Borrower and Owned
Stations.
4.24 No Commitment of Borrower. No part of any of the Owned
Stations or the Assets is directly or indirectly subject in any manner to any
oral or written commitment or any arrangement for the sale, transfer, assignment
or disposition thereof, in whole or in part.
4.25 Defaults. No Possible Default or Event of
Default exists hereunder or will exist after giving effect to the making of the
Loans.
4.26 Liabilities. Borrower has no Liability of any nature,
whether due or to become due, absolute, contingent, or otherwise, including
Liabilities for taxes and any interest or penalties relating thereto, except for
Liabilities permitted pursuant to Section 6.2 of this Agreement. Borrower does
not know, nor does it have reason to know, of any basis for the assertion
against Borrower of any other Liability,
4.27 Accounts. Each material account (as that term is defined
in the Uniform Commercial Code) as shown on Borrower's books and records,
whether currently existing or hereafter arising, is or will be genuine and in
all respects is or will be what it purports to be, subject to a reasonable
allowance for doubtful accounts consistent with industry practice. The whole of
the balance indicated as being unpaid and owing with respect to each such
account on the books of Borrowers in, and shall be, unpaid and owing.
4.28 No Other Names. Borrower has not conducted business under
any name other than the name in which it executed this Agreement.
4.29 Material Restrictions. Borrower in not a party to any
agreement or other instrument and is not subject to any other restriction that
materially and adversely affects its business, property, assets, operations, or
condition, financial or otherwise.
4.30 Stock of Borrower. The authorized capital stock of
Borrower consists of 100,000 shares of Common Stock, par value $1.00 per share,
1,000 shares of which are issued and outstanding and none of which are hold as
treasury stock. Confer has good, valid and marketable title to all shares of
capital stock of Borrower, free and clear of all Liens, except Permitted Liens.
All of the shares of capital stock of Borrower are duly authorized, validly
issued, fully-paid, nonassessable and free of any preemptive rights, duties or
other governmental charges and have been issued in compliance with all
applicable state and federal laws concerning the issuance of securities. There
are no shares of capital stock of Borrower reserved for issuance.
4.31 Options, Warrants, Rights. Borrower has no outstanding
securities convertible into or evidencing the right to purchase shares or
subscribe for any of its capital
- 23 -
stock nor does it have any outstanding or authorized subscriptions options
(including inactive and non-qualified stock options), warrants, calls, rights,
commitments or any other agreements or arrangements preemptive or contractual
obligating it to issue any shares of its capital stock or any securities
convertible into or evidencing the right to purchase or subscribe for any shares
of such stock or any other similar arrangements. There are no agreements,
understandings or arrangements with respect to the dividend rights, voting, sale
or transfer of shares of the capital stock of Borrower. There are no irrevocable
proxies executed by confer and no existing rights of Confer to require Borrower
to register any securities of Borrower or to participate with Borrower in any
registration by Borrower of its securities.
4.32 Disclosure. No representation or warranty contained in
this Agreement, in the Disclosure Schedule or any other Related Document to
which Borrower is a party, contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements herein
or therein, taken as a whole, in light of the circumstances under which they
were made, not misleading.
ARTICLE V
Affirmative Covenants
---------------------
Borrower agrees that so long as this Agreement remains in
effect or any of the Loan Obligations remain unpaid, Borrower will perform and
observe each of the following provisions, unless Lender expressly permits in
writing the nonperformance or nonobservance of such provision.
5.1 Conduct of Business of the Stations. Subject to other
provisions of this Agreement, Borrower will conduct the business and operations
of each Station according to the ordinary and usual course of business
consistent with past practices.
5.2 Maintenance of Assets, Records and Inventory. Borrower
will maintain the Assets or replacements thereof in good operating condition and
repair, ordinary wear and tear excepted. Borrower will keep adequate records and
books of account, in which complete entries will be made in accordance with
generally accepted accounting principles consistently applied, reflecting all
financial transactions of Borrower, Borrower will maintain levels of inventory
and spare parts consistent with past practices and will continue to make
operating, promotional and marketing expenditures in the ordinary course of
business consistent with past practices. From and after March 28, 1995, the
Borrower shall not be obligated to make capital expenditures (other than such
expenditures necessary for the maintenance of the normal and customary
operations of the Stations, which shall be made in the ordinary course of
business) except if such capital expenditures are approved by Lender ("Approved
Capital Expenditures"); provided that any equipment ordered prior to March 28,
1995 in connection with $41,500 of WSPA-AM leasehold improvements and a $75,000
STL expenditure for the WSPA-FM studio move shall be purchased by Borrower in
accordance with such orders.
- 24 -
5.3 Access to Information. Borrower will give Lender and its
authorized representatives reasonable access during normal business hours to the
Assets and to the books and records relating thereto, and will furnish or cause
to be furnished to Lender and their authorized representatives all information
relating to the stations, as Lender may from time to time reasonably request;
provided, however, that the rights of Lender under this Section 5.3 shall not be
exercised in any manner that would interfere unreasonably with the operation of
the Stations. Borrower will use reasonable efforts to obtain, and to provide to
Lender, any information relating to the LMA Stations and LMA Owners (including
such information to be disclosed on Section 4.23 of the Disclosure Schedule) to
the extent such information is not reasonably available to Borrower on the date
of such execution of this Agreement.
5.4 Financial and Other Information. Borrower will, unless
Lender shall otherwise consent in writing, furnish to Lender:
(a) Monthly Financial Statements. As soon as
available and in any event within thirty (30) days after the close of each
month, an unaudited statement of income and expense of the Stations, all
prepared in accordance with generally accepted accounting principles
consistently applied and fairly presenting the financial condition and results
of operations of the Stations as of the dates and for the period indicated;
(b) Annual Financial Statements. As soon as available
and in any event within ninety (90) days after the end of each fiscal year of
Borrower, a balance sheet of the Stations of the end of such fiscal year, and a
statement of income and retained earnings of the Stations for such fiscal year,
and a statement of change in financial position of the Stations for such fiscal
year, all in reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date and period in the prior fiscal
year and all prepared in accordance with generally accepted accounting
principles consistently applied and as to the consolidated statements and
certified by the chief financial officer of Borrower or, if requested by Lender,
accompanied by an opinion thereon acceptable to Lender by KPMG Peat Marwick or
other independent accounts selected by Borrower and acceptable to Lender.
(c) Accountant's Reports. Promptly upon receipt
thereof, copies of any reports submitted to Borrower by independent certified
public accountants in connection with examination of the financial statements of
Borrower made by such accountants.
(d) Information Related to ERISA. Borrower shall
administer each Employee Plan and compensation Arrangement listed in Section
4.12 of the Disclosure Schedule in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, the Age Discrimination in
Employment Act and any other applicable Federal or state laws. Promptly after
the filing or receiving thereof, copies of all reports, including annual
reports, and notices which Borrower files with or receives from the U.S.
Department of Labor; and as soon as possible and in any event within thirty (30)
days after Borrower knows or has reason to know that any Prohibited Transaction
(as defined in ERISA) has occurred with respect to any Employee Plan, Borrower
will deliver to Lender a certificate of the chief financial officer of
- 25 -
Borrower setting forth details as to such Prohibited Transaction and the action
Borrower proposes to take with respect thereto.
(e) Accountant's Certificate Regarding Events of
Default. Simultaneously with the delivery of the annual financial statements
referred to in Section 5.4(b), if requested by Lender, a certificate of the
independent public accountants who audited such statements to the effect that,
in making the examination necessary for the audit of such statements, they have
obtained no knowledge of any condition or event which constitutes an Event of
Default or which, with the giving of notice or lapse of time or both, would
constitute an Event of Default, or if such accountants shall have obtained
knowledge of any such condition or event, specify in such certificate each such
condition or event of which they have knowledge and the nature and status
thereof.
(f) Other Information. Borrower shall furnish to
Lender any and all other information prepared by Borrower concerning the
condition or operations, financial or otherwise, of the Stations that Lender may
reasonably request.
5.5 Notices of Default or Breach.
Borrower will give prompt notice to Lender of (i) any
notice to Lender of (i) any notice of, or other communication relating to, any
default by Borrower or any LMA Owner under any instrument or agreement to which
Borrower is a party or by which Borrower, any Station or the Assets are bound
and (ii) any notice or other communications from any third party alleging that
the consent of such third party is or may be required in connection with the
transactions contemplated by this Agreement.
5.6 FCC Matters.
(a) Borrower will operate each Station in conformity
in all material respects with the FCC Licenses, the Communications Act of 1934,
as amended (the "Communications Act"), and the rules and regulations of the FCC
and other applicable laws, rules and regulations, and maintain the FCC Licenses
in full force and effect. Borrower shall file in a timely manner all reports,
replies and submissions required to be filed with the FCC or any other
governmental agency, department or body in respect of each of the Owned Stations
(including all FCC regulatory fee filings, with payment in full of all fees
due); all such documents will be complete and correct in all material respects.
(b) On or before August 1, 1995, Borrower shall file
with the FCC an application for renewal of the FCC Licensee for the Owned
Stations with the filing fee applicable thereto. Borrower shall thereafter
prosecute such license renewal application with all reasonable diligence and
otherwise use vigorous efforts to obtain the Renewal as expeditiously as
possible and without any adverse new conditions. If reconsideration, review or
judicial review is sought with respect to the Renewal, Borrower shall oppose
such efforts for reconsideration review or judicial review vigorously. Borrowers
shall monitor actions of the LMA Owners with respect to each of the actions set
forth in this Section 5.6(b) with respect to
- 26 -
the LMA Stations and shall use its reasonable efforts to the extent it is
permitted by applicable agreements to ensure that the LMA Owners take each of
the actions required of Borrower set forth in this Section 5.6(b).
(c) If any provision of this Agreement or the
application thereof to any person or circumstance shall be contrary to the rules
and regulations of the FCC to any extent, the remainder of this Agreement and
the application of such provision to other persons or circumstances shall not be
affected thereby and shall be enforced to the greatest extent permitted by law
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is contrary to the rules and
regulations of the FCC, the parties hereto shall negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the greatest extent possible. Lender shall
not, directly or indirectly, control, supervise or direct, or attempt to
control, supervise or direct, the operation of the Stations; such operation,
including complete control and supervision of all of each Station's programs,
employees and policies, shall be the sole responsibility of Borrowers. Nothing
in this paragraph shall affect the covenants set forth in Sections 5.1 and 6.1
hereof.
5.7 Maintenance of Insurance.
(a) Borrower shall keep all of its material property
and material equipment continuously insured in amounts not less their
replacement an in a manner so as to avoid the application of any co-insurance
clause, insuring such properties against such risks, including fire, lighting,
flood, vandalism, malicious mischief and such perils as are at any time
comprehended within the term "all risk coverages."
(b) Borrower shall further maintain in full force and
effect comprehensive general accident and public liability insurance against
claim for personal injury, death, or property damage occurring upon, in, about
or in connection with the use or operation of any properties or motor vehicles
owned, occupied, controlled, or used by it, or its employees or agents, or
arising in any other manner out of the business conducted by Borrower.
(c) All of the insurance specified in paragraphs (a)
and (b) above shall be in amounts approved from time to time by Lender and shall
be obtained and maintained by means of policies issued by generally recognized,
financially sound insurance companies. The insurance to be provided may consist
of blanket policies. Borrower shall deposit with Lender upon request
certificates or other evidence satisfactory to Lender that the insurance
required hereby had been obtained and is in full force and effect and, fifteen
days prior to the expiration of any such insurance, Borrower shall furnish
Lender upon request with evidence satisfactory to Lender that such insurance has
been renewed or replaced. At the request of Lender, Borrower shall consolidate
all of its insurance Policies with Lender's insurance policies.
(d) All proceeds of insurance payable in respect of
damage or destruction to any of Borrower's property shall (1) if no Event of
Default or Possible Default
- 27 -
then exists, be paid to Borrower to be used solely for repair or replacement of
the property so damaged or (2) if an Event of Default or Possible Default then
exists, be applied, in Lenders discretion, against Lender Debt then outstanding,
whether or not then due and payable.
5.8 Money Obligations. Borrower shall pay in full when due all
taxes, assessments, and governmental charges and levies for which it may be or
become liable or to which any or all of its properties may be or become subject
and all of its other obligations calling for the payment of money (except in
each such case only those so long as and to the extent that the same shall be
diligently contested in good faith by appropriate and timely proceedings and for
which Borrower has established adequate reserves) in accordance with normal
business practices and with the terms governing the same.
5.9 Notice. Borrower shall promptly notify Lender (a) whenever
any Event of Default or Possible Default may occur hereunder or any
representation or warranty made in this Agreement or in any Related Document may
for any reason cease in any material respect to be true and complete, (b)
whenever any action, suit or proceeding is commenced by or against Borrower
which, if successful, might materially and adversely affect Borrower or its
ability to perform its obligations hereunder, and (c) whenever any material
adverse change occurs in the assets or proportion of Borrowers.
5.10 Continued Existence; Compliance with Law. Borrower shall
preserve, renew, and keep in full force and effect (i) its existence and good
standing as a corporation in the jurisdiction of its incorporation and qualify
and remain qualified as a foreign corporation in each jurisdiction in which such
qualification is required and (ii) its material rights, certificates, permits
and Licenses, and Borrower shall comply in all material respects with all FCC
Licenses and any other material Licenses and all applicable laws, regulations,
and other requirements of all federal, state and local governmental authorities
having jurisdiction over the Owned Stations and their operations. Without
limiting the generality of the foregoing, Borrower shall maintain and preserve
in full force and effect, and shall not breach or violate, its Licenses and
Contracts if such breach or violation might materially and adversely affect
Borrower or its ability to perform its obligations hereunder.
5.11 Title to Property. All property, whether real or
personal, of Borrower shall be held in the name of Borrower or such Subsidiary,
except for such property which is rented or leased.
5.12 Conduct of Business. Borrower will continue to engage in
an efficient and economical manner in a business of the same general type as now
conducted by it.*
5.13 Consents. Borrower will cooperate with Lender to obtain
from any contracting party with whom Borrower has a contract or agreement,
including without limitation, if requested by Lender, the Contracts, the LMA or
the Option, a consent to the grant by Borrower of a security interest in such
contract or agreement to Lender and Buyer's Lenders.
- 28 -
5.14 Option. Borrower will exercise the Option at the earliest
possible date under the terms of the Option; provided, however, that Borrower
will give Lender written notice prior to exercising the Option and will refrain
from exercising the Option for so long as Lender objects to the exercise of the
Option by Borrower.
ARTICLE VI
Negative Covenants
------------------
Borrower agrees that so long as this Agreement remains in
effect or any of the Loan Obligations remain unpaid, Borrower shall not directly
or indirectly take any of the actions set out in this Section 6 nor permit any
of the conditions set out herein to occur without the prior written consent of
Lender.
6.1 Conduct of Business of the Stations. Without limiting the
generality of Section 5.1 above, Borrower, unless otherwise consented to in
writing by Lender:
(a) will not enter into or renew any transaction,
contract or commitment (including, without limitation, trade or barter
agreements) that involve a value of more than $5,000, individually, or $25,000
in the aggregate for Borrower, except for time sales agreements for cash entered
into in the ordinary course of business at such Station's prevailing rates for a
term not to exceed one year;
(b) (i) will not sell, assign, transfer or otherwise
dispose of any Assets, except in connection with the acquisition of equivalent
replacement property; (ii) will not permit a sale, exchange, transfer or other
disposition of the stock or partnership interests (or any portion thereof) of
Borrower; and (iii) will not solicit or entertain any discussions with respect
to the foregoing;
(c) will not increase the compensation payable, or to
become payable, to any employee of any Station by more than 5% for any
subsequent term, except as required by existing written agreements that have
been disclosed to Lender in writing;
(d) will not (i) modify, amend, renew, change or
terminate in any respect any contract, including any existing license, lease,
contract or other similar document relating to any Station in any manner that
night have the effect of materially and adversely (a) affecting its financial
condition, (b) affecting the rights of Lender, or (c) decreasing the value of
the collateral securing the Loans; or (ii) undertake any borrowing from third
parties of any nature whatsoever relating to any Station;
(e) will not enter into any collective bargaining
agreement covering any employees, through negotiations or otherwise, or make any
commitment or incur any liability to any labor organization with respect to any
employees; and
- 29 -
(f) will not purchase or enter into any contract to
purchase (a) the stock of any company; (b) the assets of any company purchased
as part of the acquisition of a business except in connection with any permitted
exercise of the Option; or (c) any other acquisition of assets involving in any
single transaction more than $10,000.
6.2 Indebtedness and Liabilities. Borrower shall not incur,
create, assume, or permit to exist any Indebtedness or Liabilities, except:
(a) Indebtedness arising hereunder or any other
Indebtedness owed to Lender;
(b) unsecured trade accounts payable and other
unsecured current Liabilities incurred and paid in the ordinary course of
business;
(c) liabilities for taxes, assessments, governmental
charges, liens, or similar claims to the extent that payment thereof shall not
be required to be made by the provisions hereof;
(d) any transfer of a check or other medium of
payment for deposit or collection through normal banking channels or any similar
transaction in the normal course of business; and
(e) Liabilities or Indebtedness incurred in
connection with Permitted Liens.
6.3 Guaranties. Borrower shall not pledge its credit or
property in any manner, or otherwise become responsible, for the payment or
other performance of the indebtedness, contract, or other obligation of another
Person and shall not act as a guarantor (whether of payment or of collection),
surety, co-maker, endorser, or agree conditionally or otherwise to make any
purchase, loan, or investment in order thereby to enable another Person to
prevent or correct a default of any kind, except in connection with endorsements
of negotiable instruments for collection in the ordinary course of business.
6.4 Notes, Accounts Receivable, and Claims. Borrower shall not
sell, discount, or otherwise dispose of any note or account receivable, with or
without recourse, except for collection in the ordinary course of business; fail
to assert timely any claim, cause of action, or contract right that it possesses
against any third party; nor agree to settle or compromise any such claim, cause
of action, or contract right except for settlements or compromises made in the
reasonable exercise of business judgment in the ordinary course of business.
6.5 Amendment of Governing Documents. Borrower shall not amend
or modify its Articles of Incorporation or Bylaws unless required by law.
- 30 -
6.6 Issuance and Sale of Equity Interest. Borrower shall not
(a) issue or sell any capital stock or other equity interest or securities
convertible into or exercisable for any of its capital stock or other equity
interest; (b) permit the transfer of any of its capital stock or other equity
interest; (c) make any direct or indirect redemption purchase or other
acquisition of any of its capital stock; (d) issue any shares of its capital
stock or any other securities, effect any stock split or otherwise change its
capitalization as it exists on the date hereof; or (e) grant, confer or award
any options, warrants, conversion rights or other rights to acquire any shares
of its capital stock.
6.7 Mergers and Consolidations. Borrower shall not be a party
to any consolidation, merger, recapitalization, or other form of reorganization,
or transfer all or substantially all of its assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions) to any Person.
6.8 Liens. Borrower shall not (a) acquire any property outside
the ordinary course of business that is subject to any inventory consignment,
lease, land contract, or other title retention contract except as otherwise
expressly permitted herein, or (b) suffer or permit any of the Assets (whether
now owned or hereafter acquired) to be or become encumbered by any mortgage,
security interest, pledge, financing statement, or lien of any kind or nature,
other than Permitted Liens.
6.9 Restricted Payments and Restricted Investments. Borrower
shall not make any Restricted Payments or Restricted Investments.
6.10 Transactions with Affiliates. Borrower shall not enter
into any transaction with any Affiliate, unless such transaction is on terms
which are no less favorable than those reasonably obtainable by Borrower in a
comparable arms'-length transaction with a Person that is not an Affiliate.
6.11 ERISA. Borrower shall not create, become a party to,
incur any liability to or in respect of, or agree or incur any obligation to
contribute to, any Employee Plan other than Employee Plans listed on Section
4.12 of the Disclosure Schedule.
6.12 Accounting Matters. Borrower shall not change its fiscal
year or accounting basis.
6.13 Change of Name. Borrower shall not change its name nor
use any trade name other than its true corporate name, without the prior written
consent of Lender.
ARTICLE VII
Closing Conditions
------------------
7.1 Conditions to the Obligations of Lander to Effect the
Transactions Contemplated Hereby. The obligations of Lander to make the Closing
Date Loan shall be
- 31 -
further subject to the fulfillment at or prior to the Closing Date of the
following conditions, any one or more of which may be waived in writing by
Lender:
(a) Borrower shall, in all material respects, have
performed and complied with all covenants and agreements contained in this
Agreement required to be performed or complied with by Borrower at or prior to
the closing Date, and all of the representations and warranties of Borrower set
forth in this Agreement shall be true, correct and complete in all material
respects as of the Closing Date as though made at and as of such Closing Date,
except for any representation or warranty that is stated as of a specified
earlier date, in which case such representation and warranty shall be true and
correct in all material respects as of such date. Lender shall have received a
certificate to the effect set forth in the preceding sentence signed on behalf
of Borrower by an executive officer authorized on behalf of Borrower, which
certificate shall be given by such officers after due inquiry, but without
personal liability.
(b) Borrower shall have executed and delivered the
Note.
(c) Borrower shall have executed and delivered to
Lender security agreements mortgages and other Related Documents in form and
substance satisfactory to Lender pursuant to which Borrower grants to Lender a
duly perfected first priority lion on all of the Assets, including real,
personal and mixed property of Borrower, now owned and hereafter acquired which
Lender has heretofore requested or may request, and Borrower shall have caused
Confer to have executed and delivered to Lender pledge agreements and other
Related Documents in form and substance satisfactory to Lender pursuant to which
Confer grants to Lender a duly perfected first priority lion on all of the
capital stock of Borrower.
(d) Lender and Lender's lenders shall have received
opinions addressed to Lender and its lenders in form and substance reasonably
satisfactory to Lender and its lenders.
(e) Lender shall have received from Borrower copies,
certified by an executive officer of Borrower of resolutions adopted on behalf
of Borrower authorizing the execution, delivery and performance of this
Agreement, the Note the Related Documents and all instruments and documents to
be delivered in connection herewith and therewith and the transactions
contemplated hereby and thereby.
(f) Borrower shall have delivered to Lender certified
copies of (a) the Articles of Incorporation of Borrower, certified by the
Secretary of State of the state of its incorporation as of the most recent date
practicable; (b) the Bylaws of Borrower, certified by the secretary of Borrower;
and (c) a certificate of the secretary of Borrower certifying the names of the
officers of Borrower authorized to sign this Agreement, the Note and the other
Related Documents, together with the true signatures of such officers.
(g) No litigation, action or proceeding shall be
pending or threatened before any court, administration or other governmental
agency or arbitrator which (i) challenges or seeks to restrain or prohibit the
condition of the Transactions contemplated hereby; (ii) seeks
- 32 -
to obtain from Lender or any of its affiliates any material damages as a result
of the transactions contemplated hereby; (iii) may result in the revocation,
cancellation, suspension forfeiture, modification, or impairment of any of the
FCC Licenses; or (iv) is otherwise reasonably likely to result in or have a
Material Adverse Change on any Station or on Lender.
(h) Since the date of this Agreement there shall not
have been any Material Adverse Change in Borrower; provided that a change,
effect or development shall not be doomed a Material Adverse Change hereunder,
if such change, effect or development is primarily the result of general
economic conditions or matters affecting the radio broadcasting industry
generally.
(i) Lender shall have received the audited statements
of income and expense and cash flows for Borrower for the year ended December
31, 1994 and audited balance shoots of Borrower for the year ended December 31,
1994.
(j) Borrower shall have delivered to Lender such
other certificates, opinions, agreements and documents, in form and substance
satisfactory to Lender, an Lender reasonably may request.
(k) Borrower shall have delivered a certificate
signed on behalf of Borrower by an executive officer authorized on behalf of
Borrower setting forth a schedule of insurance with respect to each of the
insurance policies required pursuant to Section 5.7 hereof, and Lender shall be
satisfied with the nature and scope of the insurance policies and each such
insurance policy shall have Lender as loss payee for amounts in excess of an
amount reasonably requested by Lender.
(1) The Assets shall be free and clear of any
liabilities, liens, security interests or encumbrances other than Permitted
Liens and liens created under the Related Documents in favor of Lender.
(m) If available following Borrower's reasonable
efforts to obtain them, Borrower shall deliver an executed Landlord Estoppel
Certificate, substantially in the form annexed hereto as Exhibit B-l for each
leased tower, office and studio site of each Owned Station and a Non-Disturbance
Agreement, substantially in the form of Exhibit B-2 for the leased properties
identified with an asterisk in Section 4.6 of the Disclosure Schedule.
(n) Lender shall have received copies of the
information described in subsections 5.4(a) for the most recent period ended on
or prior to the closing Date, and all such information shall be in form and
substance reasonably satisfactory to Lenders.
(o) The closing under the Keymarket Purchase
Agreement shall have occurred.
(p) At the Closing, Borrower shall deliver to Lender
a certificate of an authorized officer of Borrower setting forth the "Working
Capital Balance* (as hereinafter
- 33 -
defined) or "Working Capital Deficit" (as hereinafter defined) as the case may
be* As used herein, the term "Working Capital Balance" shall mean the amount, if
any, by which *Current Assets" exceed "Current Liabilities", and the term
"Working Capital Deficit" shall mean the amount, if any, by which "Current
Liabilities" exceed "Current Assets"* As used herein, (A) the term "Current
Liabilities" shall mean the sum, as of 12:01 a.m. on the Closing Date, with
respect to the Borrower of (i) trade accounts payable, (ii) accrued expenses and
(iii) other current liabilities of the Seller, excluding (x) the current portion
of the indebtedness under this Loan Agreement or any long-term indebtedness of
the Seller that is being discharged at the Closing, and, interest thereon, (y)
accrued sick pay and accrued vacation pay of employees of Seller, except for
employees fitting within the categories set forth in Exhibit L to the Keymarket,
Purchase Agreement and (B) the term "Current Assets" shall mean the sun, as of
12:01 a.m. on the Closing Date, with respect to the Borrower, of (i) accounts
receivable (net of a bad debt reserve of 5 % of the face amount of such accounts
receivable) and (ii) prepaid expenses and other current assets of Seller except
(x) prepaid expenses relating to insurance and other contracts of Seller of the
type not being assumed under the Keymarket Purchase Agreement, (y) inventory and
(z) that portion of prepaid expenses with respect to which revenue already has
been received. For purposes hereof, accrued sick pay and accrued vacation pay
shall have the same meaning as provided for such terms in Section 2.6 of the
Keymarket Purchase Agreement. Except as otherwise expressly provided for herein,
Current Assets and Current Liabilities shall be determined in accordance with
generally accepted accounting principles consistently applied. Lender shall have
a period of ninety (90) days after Closing to submit any changes to such
certificate. If the Borrower and Lender do not agree on such changes to the
certificate, any dispute will be resolved in accordance with the procedures set
forth in Section 2.6 of the Keymarket Purchase Agreement.
ARTICLE VIII
Events of Default
-----------------
8.1 Payments. If the principal or any installment of interest
due under the Note shall not be paid in full when due or if any other Loan
Obligations (other than any installment of principal or interest) due hereunder
shall not be paid in full within ton days of the date when due.
8.2 Covenants. If Borrower shall fail or omit to perform,
observe, or satisfy any agreement, covenant, or other provision (other than
those referred to in Section 8.1. hereof) contained or referred to in this
Agreement or any Related Document and such failure shall not have been fully
corrected within thirty days after: (a) the giving of written notice thereof to
Borrower by Lender that the specified Possible Default is to be remedied; or (b)
Lender is notified of such Possible Default or should have been notified
pursuant to Section 5.9 above, whichever is earlier; provided, however, that if
any such failure does not admit of correction, then such failure shall be deemed
to be an Event of Default an of the date of occurrence of such failure.
- 34 -
8.3 Borrower's Solvency. If Borrower or Confer shall (a)
discontinue business, or (b) generally not pay its or his (as applicable) debts
as such debts become due, or (c) make a general assignment for the benefit of
creditors, or (d) apply for or consent to or acquiesce in the appointment of a
receiver, a custodian, a trustee, or liquidator of all or a substantial part of
its or his (as applicable) assets, or (e) be adjudicated a debtor or have
entered against it or him (as applicable) an order for relief under Title 11 of
the United States Code, as the same may be amended from time to time, or (f)
file a voluntary case in bankruptcy or file a petition or an answer smoking
reorganization or an arrangement with creditors or seeking to take advantage of
any other law (whether federal or state) relating to relief of debtors, or admit
(by answer, by default or otherwise) the material allegations of a petition
filed against it or him (as applicable) in any bankruptcy reorganization,
insolvency, or other proceeding (whether federal or state) relating to relief of
debtors, or (g) suffer or permit to continue unstayed and in effect for sixty
consecutive days any judgment, decree, or order, entered by a court or
governmental commission of competent jurisdiction, that assumes custody or
control of Borrower or Confer (as applicable) approves a petition seeking its or
his (as applicable) reorganization or any other judicial modification of the
rights of its or his (as applicable) creditors, or appoints a receiver,
custodian, trustee, or liquidator for Borrower or Confer (as applicable) or of
all or a substantial part of its his (as applicable) assets, or (h) take, or
omit to take, any action in order thereby to effect any of the foregoing.
8.4 Challenge to Enforceability. If the validity or
enforceability of any provision of this Agreement, the Note or any other Related
Document shall be contested by Borrower or by any stockholder or officer of
Borrower, or by any other Person who has executed any Related Document, or
Borrower or any such other Person shall deny that it or he has any further
liability or obligation hereunder or thereunder.
8.5 Condemnation. Any courts government or governmental agency
shall condemn, seize, or otherwise appropriate, or take custody or control of,
any portion of the property of Borrower, if such condemnation, seizure, or other
appropriation could have a material adverse effect upon Borrower or its ability
to perform its obligations under this Agreement, the Note or any of the other
Related Documents.
8.6 Security Agreements. Any security agreement, mortgage,
pledge agreement, financing statement or other security document included in the
Related Documents shall, at any time after its execution and delivery and for
any reasons cease (1) to create a valid and perfected first priority security
interest in and to the property purported to be subject to such agreement or (2)
to be in full force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by the party thereto or
the party thereto shall deny it has any further liability or obligation under
such agreement.
8.7 Support Agreement. The Keymarket Purchase Agreement or the
Lender's Option shall, at any time after its execution and delivery and for any
reason, cease to be in full force and effect or shall be declared null and void,
or the validity or enforceability thereof shall be contested by the party
thereto or the party thereto shall deny it has any further liability or
obligation under the Keymarket Purchase Agreement or the Lender's Option.
- 35 -
8.8 FCC Licenses. If any FCC License relating to any Owned
Station shall be (i) cancelled, revoked or finally denied renewal for any reason
or (ii) renewed on terms which could reasonably be expected to result in a
Material Adverse Change on any Station or in Borrower.
8.9 Employee Retirement Income Security Act. Any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Internal
Revenue code) involving any Employee Plan exists with respect to Borrower or any
ERISA Affiliate and in such event or condition, together with all other events
or conditions, if any, could in the opinion of Lender subject Borrower to any
tax, penalty, or other liability to or with respect to an Employee Plan which in
the aggregate exceed or may exceed Twenty-Five Thousand Dollars ($25,000).
ARTICLE IX
Remedies Upon Default
---------------------
9.1. Optional Defaults. If any Event of Default (other than
the Event of Default referred to in Section 8.3 hereof) occurs, Lender, upon
written notice to Borrower, may accelerate the maturity of all Loan Obligations,
whereupon all Loan Obligations shall become immediately due and payable in full
without any presentment or demand and without any further or other notice of any
kind, all of which are hereby waived by Borrower.
9.2 Automatic Default. If any Event of Default referred to in
Section 8.3 hereof occurs, all principal of and interest on the Note and all of
Borrower's other Loan Obligations shall thereupon become immediately due and
payable in full, all without any presentment, demand, or notice of any kind,
which are hereby waived by Borrower.
9.3 Offsets. If there shall occur or exist any Event of
Default or Possible Default referred to in Section 8.3 hereof or if the maturity
of the Note is accelerated pursuant to Section 9.1 or 9.2 hereof or otherwise,
Lender shall have the right at any time to set off against, and to appropriate
and apply toward the payment of, any and all Lender Debt then owing to Lender by
Borrower, whether or not the same shall then have matured, all indebtedness then
held or owing by Lender to or for the credit or account of Borrower, all without
notice to or demand upon Borrower or any other Person, all such notices and
demands being hereby expressly waived by Borrower.
9.4 Performance by Lender. If at any time Borrower fails or
refuses to pay or perform (i) any obligation or duty to any Person, except for
payments that are the subject of bona fide disputes in the ordinary course of
business, or (ii) any obligation or duty (including each of the agreements and
covenants by Borrower hereunder), Lender may, in its sole discretion, pay or
perform the same on behalf of Borrower, and Borrower shall promptly repay all
amounts so paid, and all costs and expenses so incurred. This repayment
obligation shall become a Loan obligation and shall bear interest at the Default
Rate.
- 36 -
9.5 Other Remedies. Upon the occurrence of an Event of Default
hereunder, and during the continuance thereof, Lender may exercise any other
right, power, or remedy as may be provided herein, in the Note, or an may be
provided at law or in equity, including, without limitation, the right to seek
specific performance and/or monetary damages. In recognition of the unique
nature of the Loans made hereunder and the damages which Lender will suffer in
the event of a breach by Borrower, Borrower hereby waives any defense that
Lender has an adequate remedy at law for the breach of this Agreement by
Borrower.
ARTICLE X
Miscellaneous Provisions
------------------------
10.1 Interpretation. Each right, power or privilege specified
or referred to in this Agreement or in any Related Document is in addition to
any other rights, powers, or privileges that Lender may otherwise have or
acquire by operation of law, by other contract or otherwise. No course of
dealing in respect of, nor any omission or delay in the exercise of, any right,
power, or privilege by Lender shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any further or other exercise
thereof or of any other right, power or privileges, as each right, powers or
privilege may be exercised independently or concurrently with others and as
often and in such order as Lender nay deem expedient.
10.2 Expenses of Lenders: Indemnity. Whether or not the
transactions contemplated hereby are consummated, except as otherwise expressly
provided herein, all costs and expenses incurred in connection with the
negotiation, preparation and execution of this Agreement, the Related Documents
and the transactions contemplated hereby will be paid by the party incurring
such costs and expenses.
Borrower agrees to pay the reasonable costs and expenses,
including the fees and disbursements of Lender's legal counsel, incurred by
Lender, in connection with (1) the enforcement of this Agreement and the Note;
(2) enforcement of any amendment to or waiver of this Agreement, the Note or the
other Loan Obligations; (3) any proceeding brought or formal action taken by
Lender to enforce any provision of this Agreement, the Note or the other Loan
Obligations or to enforce or exercise any right, power, or remedy hereunder or
thereunder; (4) any action that may be taken or instituted by any Person against
Lender an a result of any of the foregoing; and (5) the implementation of this
Agreement and the Related Documents including, without limitation, the
reasonable fees and expenses of outside legal and business counsel. To the
extent the Lender's Option is exercised, Borrower agrees to pay the reasonable
costs and expenses, including the fees and disbursements of Lender's legal
counsel, incurred by Lender in connection with the negotiation or preparation of
any amendment to or waiver of this Agreement, the Note or the other Loan
obligations which amounts shall be added to the amount of Loans hereunder. If
any taxes shall be payable, or ruled to be payable, to any State or Federal
authority with respect to the execution, delivery, and performance of this
Agreement, the Note or any other Loan Obligation by reason of any existing or
hereinafter enacted Federal or State statute, including without limitation any
documentary stamp tax, Borrower will pay all such
- 37 -
taxes, including interest and penalties thereon, if any, and will indemnify and
hold harmless Lender against any liability in connection therewith.
10.3 Further Assurances. Borrower take, or cause to be taken,
all actions, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Loans by, and security interests granted to, Lender contemplated by this
Agreement. From time to time after the Closing Date, without further
consideration, Borrower will, at Lender's expense, execute and deliver, or cause
to be executed and delivered, such additional security agreements, mortgages,
memoranda of lease, Lender's title insurance policies, deeds of trust, pledge
agreements, assignments, licenses, landlord consents and releases and all other
instruments or documents (including, without limitation, UCC financing
statements, fixture filings or similar documents required in order to perfect
the liens created by the security documents included in the Related Documents),
statements, agreements and reports to Lender as Lender may request and to
evidence, preserve protect perfect or otherwise implement or assure the rights
of Lender as contemplated herein and in the Related Documents and to evidence
the representations and warranties of Borrower.
10.4 Amendment and Modification. This Agreement may be
amended, modified or supplemented only by written agreement of Borrower and
Lender. No waiver by Lender of any right, power, or remedy under any of such
instruments shall be effective unless given in writing by Lender.
10.5 Waiver of Compliance; Consents. Except as otherwise
provided in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation, warranty,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure. Whenever this Agreement
requires or permits consent by or on behalf of any party hereto, such consent
shall be given in writing in a manner consistent with the requirements for a
waiver of compliance as set forth in this Section 10.5.
10.6 Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given when delivered personally or by
Federal Express or other comparable nationally recognized courier service
(receipt requested) or by facsimile transmission telexed or mailed by registered
or certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party an shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
To BORROWER:
- ------------
Keymarket Communications, Inc.
2743 Perimeter Parkway
Building 100, Suite 250
- 38 -
Augusta, Georgia 30909
Attention: Mr. Donald J. Alt
Telephone: (706) 855-0555
Telecopy: (706) 855-1955
Copies to:
- ----------
Joel B. Piassick, Esq.
Kilpatrick & Cody
1100 Peachtree Street
Suits 2800
Atlanta, Georgia 30309
Telephone: (404) 815-6527
Telecopy: (404) 815-6555
Mr. Richard A. Churchill
MC Partners
75 State Street
Suite 2500
Boston, Massachusetts 02109
Telephone: (617) 345-7200
Telecopy: (617) 345-7201
Bruce E. Rogoff, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02111
Telephone: (617) 542-6000
Telecopy: (617) 542-2241
To LENDER:
- ----------
c/o River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry D. Marcus
Telephone: (314) 259-5700
Telecopy: (314) 259-5709
- 39 -
Copies to:
- ----------
John T, Byrnes, Esq.
Dow, Lohnes & Albertson
1255 23rd Street, N.W.
Suite 500
Washington, D.C. 20037
Telephone: (202) 857-2518
Telecopy: (202) 857-2900
10.7 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns (including, without
limitation, any subsequent holders, if any, of the Note or any replacement
Note(s)), but, except as provided for herein, neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by Borrower
without the prior written consent of Lender.
The parties agree as follows:
(a) Without the consent of Borrower, Lender may
assign its rights and obligations under this Agreement to any other party or
parties; and Lender or such assignee may assign Lender's or such assignee's
rights to indemnification hereunder to its lenders. To the extent this Agreement
is assigned by Lender in accordance with the terms of this Section 10.7, Lender
will take, or cause to be taken, all actions, and do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the assignment contemplated by this Section 10.7.
Furthermore, to the extent this Agreement is assigned by Lender in accordance
with the terms of this Section 10.7 to a party that is not an Affiliate of
Lender, upon such assignment Lender shall have no further obligations under this
Agreement and Borrower's only recourse under this Agreement shall be against
such assignee of Lender.
(b) Except as expressly provided herein, this
Agreement is not intended to, and shall not, confer upon any other person except
the parties hereto any rights or remedies hereunder.
10.8 Governing Law. THIS AGREEMENT AND THE NOTE SHALL BE
GOVERNED BY THE LAWS OF THE STATE OF MISSOURI (BUT NOT THE LAWS PERTAINING TO
CHOICE OF LAW) AS TO ALL MATTERS, INCLUDING BUT NOT LIMITED TO MATTERS OF
VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
10.9 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
- 40 -
10.10 Headings. The article and section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning-or
interpretation of this Agreement.
10.11 Entire Agreement. This Agreement, including the Exhibits
hereto, the Disclosure Schedule and the documents delivered pursuant to the
Agreement, including the Note and the other Related Documents, embody the entire
agreement and understanding of the parties hereto in respect of the transactions
contemplated by this Agreement. The Exhibits hereto and the Disclosure Schedule
are an integral part of this Agreement and are incorporated by reference herein.
This Agreement supersedes all prior negotiations, agreements and understandings
between the parties with respect to the transactions contemplated by this
Agreement and all letters of intent and other writings relating to such
negotiations agreements and understandings.
10.12 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greatest extent permitted by law so long as
the economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party. Upon such determination
that any term or other provision is invalid or unenforceable, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the greatest
extent possible.
10.13 Press Releases. No press releases or other public
announcements concerning this Agreement or the transactions contemplated hereby
shall be made by any party hereto without the prior written consent of the other
party unless the first such party is legally compelled to do so.
10.14 Publicity. Neither Borrower nor Lender shall make or
issue or cause to be made or issued, any announcement (written or oral)
concerning this Agreement or the transactions contemplated hereby for
dissemination to the general public without the prior consent of the other
party. This provision shall not apply, however, to any announcement or written
statement required to be made by law or the regulations of any federal or state
governmental agency or any stock exchange, except that the party required to
make such announcement shall provide a draft copy thereof to the other party
hereto, and consult with such other party concerning the timing and content of
such announcement, before such announcement is made.
10.15 Survival of Agreements. All covenants, agreements,
representations, and warranties made herein or in any Related Document shall
survive any investigation and the Closing Date, and shall continue in full force
and effect so long as any of the Loan obligations remain to be performed or
paid.
- 41 -
10.16 Termination. This Agreement shall terminate when all
Loan Obligations shall have been paid in full and all other obligations under
this Agreement, the Note and any other Related Document shall have been fully
performed.
10.17 FCC and License Compliance. Notwithstanding anything
herein or in any of the Related Documents to the contrary, but without limiting
or waiving Borrower's obligations hereunder or under any of the Related
Documents, Lender's remedies hereunder and under the Related Documents are
subject to compliance with the Communications Act of 1934, as amended, the
Licenses and with all applicable rules, regulations and policies of the FCC and
any other governmental authority that has issued a License, and Lender will not
take any action pursuant to this Agreement or any of the Related Documents that
will constitute or result in any assignment of an FCC License or other License
or any change of control of the Station if such assignment of License or change
of control would require under then existing law or the terms of any License
(including the written rules and regulations promulgated by the FCC), the prior
approval of the FCC or any other governmental authority, without first obtaining
such approval. This Agreement, the Related Documents and the transactions
contemplated hereby and thereby do not and will not constitute, create, or have
the effect of constituting or creating, directly or indirectly, actual or
practical ownership of Borrower by Lender or control, affirmative or negative,
direct or indirect, of Borrower by Lender, over the management, or any other
aspect of the operations of Borrower, which ownership and control remains
exclusively and at all times in the stockholders, officers, and employees of
Borrower until such time as Lender has complied with such law, rules,
regulations and policies.
10.8 WAIVER OF JURY TRIAL. BORROWER, TO THE EXTENT PERMITTED
BY LAW, WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LENDER AND BORROWER
ARISING OUT OF, IN CONNECTION WITH, RELATING TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR THE
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
- 42 -
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be signed by their respective duly authorized officers as of the
date first above written.
BORROWER:
KEYMARKET OF SOUTH CAROLINA, INC.
By: /s/Kerby E. Confer
------------------------
Name: Kerby E. Confer
Title: President
LENDER:
RIVER CITY BROADCASTING, L.P.
By: BETTER COMMUNICATIONS, INC,
General Partner
By: /s/LarryD. Marcus
------------------------------
Name: Larry D. Marcus
Title: Vice President
- 43 -
EXHIBITS & DISCLOSURE SCHEDULES
-------------------------------
LISTING
-------
EXHIBITS
--------
EXHIBIT A - Promissory Note
EXHIBIT B-l - Landlord Estoppel Certificate
EXHIBIT B-2 - Non-Disturbance Agreement
DISCLOSURE SCHEDULES
--------------------
Section 4.1 - Organization and Standing
Section 4.4 - Consents
Section 4.5 - FCC Licenses and Other Licenses
Section 4.6 - Real Property
Section 4.7 - Tangible Personal Property
Section 4.8 - Contracts
Section 4.9 - Intangibles
Section 4.10 - Financial Statements
Section 4.12 - Personnel Information; Employee Benefit Plan
Section 4.13 - Labor Relations
Section 4.14 - Litigation
Section 4.16 - Taxes
Section 4.17 - Compliance with Laws
Section 4.18 - Absence of Certain Changes
Section 4.19 - Transactions with Affiliates
Section 4.20 - Environmental Matters
Section 4.22 - Insurance
Section 4.23 - LMA and Option
- 44 -
EXHIBIT A
---------
PROMISSORY NOTE
---------------
$11,200,000 July 7, 1995
FOR VALUE RECEIVED, the undersigned, KEYMARKET OF SOUTH
CAROLINA, Inc, a South Carolina corporation (the "Maker"), promises to pay to
the order of RIVER CITY BROADCASTING, L,P, a Delaware limited partnership (the
"Payee"), in the manner and at the place provided in that certain Loan
Agreement, dated as of July 7, 1995, between the Maker and the Payee (as the
same may be further amended, modified, restated or extended from time to time,
the "Loan Agreement"), the lesser of (x) the principal sum of Eleven Million Two
Hundred Thousand Dollars ($11,200,000) and (y) the unpaid principal amount of
all advances made by Payee to Maker as the Loans under the Loan Agreement,
together with interest accrued thereon as provided in this Note. Capitalized
terms used herein without definition shall have the meanings assigned those
terms in the Loan Agreement.
The unpaid principal balance of this Note shall bear interest
prior to maturity at the rates determined in accordance with the provisions of
the Loan Agreement.
This Note evidences indebtedness of the Maker to the Payee
arising under the Loan Agreement, to which reference is hereby made for a
statement of the rights of the Payee (including the right of the holder hereof
to declare this Note due prior to its stated maturity and the other rights and
remedies of the holder hereof) and the duties and obligations of the Maker in
relation thereto, but neither this reference to the Loan Agreement nor any
provision thereof shall affect or impair the absolute and unconditional
obligation of the Maker to pay the principal of or interest on this Note when
due.
The principal of and all interest on this Note shall be paid
as provided in the Loan Agreement in immediately available funds constituting
lawful money of the United States of America, not later than 12:00 noon (St.
Louis, Missouri time) on the day when due, at the Payee's offices at 1215 Cole
Street, St. Louis, Missouri 63106, or at such other place as the Payee may
designate in writing. Until notified in writing of the transfer of this Note in
accordance with the terms of the Loan Agreement, Maker shall be entitled to deem
Payee or such person who has been identified by the transferor in writing to
Maker as the owner and holder of this Note, as the owner and holder of this
Note. Each of Payee and any subsequent holder of this Note agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; provided, however, that the
failure to make a notation of any payment made on this Note shall not limit or
otherwise affect the obligation of Maker hereunder with respect to payments of
principal or interest on this Note.
- 45 -
Whenever any payment on this Note shall be stated to be due on
a day that is not a business day, such payment may be made on the next
succeeding business day and such extension of time shall in each case be
included in the computation of interest payable on this Note.
This Note is subject to prepayment as provided in Section 2.6
of the Loan Agreement.
To the extent permitted by law, the Maker and each endorser of
this Note, and their respective heirs, successors, legal representatives, and
assigns, hereby severally waive (i) any and all homestead or exemption laws and
rights, and (ii) presentment for payment, demand, protest, notice of
non-payment, notice of protest, and notice of dishonor of the debt evidenced
hereby, together with each and every other notice of any kind respecting this
Note and all lack of diligence or delays in collection or enforcement hereof.
Upon the occurrence of an Event of Default, the unpaid balance
of the principal amount of this Note may become, or may be declared to be, due
and payable in the manner, upon the conditions and with the effect provided in
the Loan Agreement.
The terms of this Note are subject to amendment only in the
manner provided in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment
as provided in Section 10.7 of the Loan Agreement and as otherwise may be agreed
in writing between Maker and Payee.
If at any time the indebtedness evidenced by this Note is
collected through legal proceedings or this Note is placed in the hands of
attorneys for collection, the Maker and each endorser of this Note hereby
jointly and severally agree to pay all costs and expenses (including reasonable
attorneys' fees) incurred by the holder of this Note in collecting or attempting
to collect such indebtedness, or otherwise arising in connection with the
enforcement by such holder of any rights or remedies under this Note.
THE MAKER, TO THE EXTENT-PERMITTED BY LAW, WAIVES ANY RIGHT TO
HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE, BETWEEN THE PAYEE AND THE MAKER ARISING OUT OF, IN
CONNECTION WITH, RELATING TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED HERETO.
No delay or omission on the part of the Payee in exercising
any right hereunder shall operate as a waiver of such right or of any other
right of the Payee, nor shall any delay,
- 46 -
omission or waiver on any one occasion be deemed a bar to or a waiver of the
same or any other right on any future occasion.
In case any provision (or any part of any provision) contained
in this Note shall for any reason be held by a court of competent jurisdiction
to be invalid illegal, or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision (or
remaininq part of the affected provision) of this Note, but this Note shall be
construed as if such invalid, illegal or unenforceable provision (or part
thereof) had never been contained herein but only to the extent it is invalid,
illegal or unenforceable.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
MISSOURI (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW) AS TO ALL MATTERS,
INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION, EFFECT,
PERFORMANCE AND REMEDIES.
This note being pledged by Payee to its Lenders to secure
obligations under the First Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of April 21, 1995 by and among Payee, Bank of Montreal,
Banks Trust Company and the Lenders listed therein (the "Lenders").
- 47 -
IN WITNESS WHEREOF, Maker has caused this Note to be executed
and delivered by its duly authorized officer, as of the day and year and at the
place first above written,
KEYMARKET OF SOUTH CAROLINA, INC,
By: __________________________________
Name:
Title:
- 48 -
TRANSACTIONS ON PROMISSORY NOTE
Outstanding
Amount of Amount of Principal
Loan Made Principal Paid Balance Notation
Date This Date This Date This Date Made By
- ---- --------- --------- --------- -------
- 49 -
EXHIBIT B-1
-----------
LANDLORD ESTOPPEL CERTIFICATE
________________________ ("Landlord') is the owner of the
property described in Exhibit A. attached hereto and made a part hereof (the
"Property"). Landlord and ------------------ ("Tenant") are the parties to that
certain lease, described and identified on Exhibit B, attached hereto and made a
part hereof (the "Lease"), pursuant to which the Property as specifically
described therein (the "Leased Premises") is leased to Tenant. Tenant seeks to
assign the Lease to River City Broadcasting, L.P. ("RCB") and pursuant to the
request of RCB's lenders, desires to obtain certain assurances from Landlord
with respect to the Lease and the Leased Premises. For good and valuable
consideration, the sufficiency of which in hereby acknowledged, Landlord does
hereby certify for the benefit of Tenant, RCB and their senior secured lenders
an follows:
1. Landlord hereby consents to the execution, delivery,
enforcement and recording of mortgages and collateral assignments of and
security interests in Tenant's and RCB's interest in the Lease and the Leased
Promises and RCB's property in favor of its lenders. If the Lease terminates
prior to its expiration date, then upon request of such lenders, Landlord will
enter into a new lease of the Leased Premises with such lenders' designee upon
the same terms as are contained in the Lease for the remainder of the term of
the Lease, provided such lenders cure all defaults then existing under the
Lease.
2. The Lease is in full force and effect, is unmodified and
has not been altered in any way.
3. To the best of Landlord's knowledge, no default exists
under the Lease, and no event has occurred which, with the passage of time or
the giving of notice, or both, would constitute a default thereunder.
4. To the best of Landlord's knowledge, Tenant has been and is
in full compliance with all of its obligations under the Lease.
5. Landlord has no notice or knowledge that any petition in
bankruptcy has been filed by or against Landlord, or that Landlord has been
adjudicated a bankrupt or insolvent, or that there has been a petition or answer
filed by or against Landlord seeking or acquiescing in any reorganization
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under present federal, state or local law relating to bankruptcy,
insolvency or other relief
- 50 -
for debtors, or that there has been a trustee, receiver or liquidator appointed
for all or part of Landlord's assets and properties.
LANDLORD:
Dated: ____________________________ By: __________________________
Name:
Title:
- 51 -
EXHIBIT B-2
-----------
NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This NON-DISTURBANCE AGREEMENT (this "Agreement") is made as
of this ___ day of ____________, 1995, by-and among _____________ (hereinafter
referred to as "Lender", RIVER CITY BROADCASTING, L.P. (hereinafter referred to
as "Tenant") and __________________ (hereinafter collectively referred to as
"Landlord").
R E C I T A L S:
----------------
WHEREAS, Landlord and ________________ were parties to that
certain lease described in Exhibit A attached hereto and made a part hereof
(hereinafter referred to as the "Lease"), relating to the premises described in
Exhibit B attached hereto and by this reference made a part hereof (hereinafter
referred to as the "Premises"); and
WHEREAS, Landlord has consented to the assignment of the Lease
by [Keymarket Entity] to Tenant pursuant to that certain Landlord estoppel
Certificate dated
, 1995; and
WHEREAS, Lender has made or has committed to make a loan to
Landlord (hereinafter referred to as the "Loan") secured by a mortgage, deed of
trust or deed to secure debt (hereinafter referred to as the "Mortgage") which
contains an assignment of leases and rents from Landlord to Lender covering the
Premises;
NOW, THEREFORE, for and in consideration of the mutual
covenants herein contained, the sum of Ten Dollars ($10.00) and other good and
valuable considerations, the receipt and sufficiency of which are hereby
acknowledged, and notwithstanding anything in the Lease to the contrary, it is
hereby agreed as follows:
1. Lender does hereby agree with Tenant that, in the event
Lender becomes the Owner of the Premises by foreclosure, conveyance in lieu of
foreclosure or otherwise so long as Tenant complies with and performs its
obligations under the Lease, (a) Lender will take no action which will interfere
with or disturb (i) possession or use of the Premises by Tenant or Tenant's
assigns, including Tenant's lenders or (ii) the exercise of any other rights
under the Lease by Tenant or Tenant's assigns, including Tenant's lenders and
(b) the Premises shall be subject to the Lease and Lender shall recognize Tenant
and Tenant's assigns, including Tenant's lenders, as the tenant of the Premises
for the remainder of the term of the Lease (including renewal options) in
accordance with the provisions thereof.
2. Tenant does hereby agree with Lender that, in the event
Lender becomes the owner of the Premises by foreclosure, conveyance in lieu of
foreclosure or otherwise, then
- 52 -
Tenant shall attorn to and recognize Lender as the landlord under the Lease for
the remainder of the term thereof (including renewal options), and Tenant shall
perform and observe its obligations thereunder, subject only to the terms and
conditions of the Lease.
3. All notices and other communications hereunder shall be in
writing and shall be deemed given when delivered personally or by Federal
Express or other comparable nationally recognized courier service (receipt
requested) or by facsimile transmission, telexed or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof):
To Lender:
----------
------------------------------
------------------------------
------------------------------
To Tenant:
---------- River City Broadcasting, L.P.
1215 Cole Street
St. Louis, Missouri 63106
Attention: Mr. Larry D. Marcus
Telephone: (314) 259-5700
Telecopy: (314) 259-5709
To Landlord:
------------
------------------------------
------------------------------
------------------------------
------------------------------
------------------------------
4. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors, successors-in-title and assigns. When used herein, the term
"landlord" refers to Landlord and to any successor to the interest of Landlord
under the Lease.
- 53 -
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first above written.
LENDER:
As to Lender, signed [__________________________________]
sealed and delivered in
the presence of:
___________________________________ By: ____________________________
Unofficial Witness Name:
Title:
___________________________________ (BANK SEAL)
Notary Public
Commission Expiration Date:
(NOTARIAL SEAL)
- 54 -
TENANT:
As to Tenant, signed RIVER CITY BROADCASTING, L.P.
sealed and delivered in
the presence of: By: BETTER COMMUNICATIONS,
INC., General Partner
___________________________________ By: ___________________________
Unofficial Witness Name:
Title:
___________________________________ (CORPORATE SEAL)
Notary Public
Commission Expiration Date:
(NOTARIAL SEAL)
- 55 -
As to Landlord, signed LANDLORD:
sealed and delivered in
the presence of: [__________________________________]
___________________________________ By: ___________________________
Unofficial Witness
Its:______________________-
Attest:_____________________________
___________________________________ Its:___________________________
Notary Public
[CORPORATE SEAL]
Commission Expiration Date:
(NOTARIAL SEAL)
- 56 -
DISCLOSURE SCHEDULES
SCHEDULE 4.1 - LOAN AGREEMENT
Organization and Standing
-------------------------
State State
Corporation Incorp. Qualified
- ----------- ------- ---------
Keymarket of South Carolina, Inc. SC --
- 57 -
SCHEDULE 4.4 - LOAN AGREEMENT
Consents
--------
None.
- 58 -
SCHEDULE 4.5 - LOAN AGREEMENT
FCC and Other Licences
----------------------
Keymarket of South Carolina, Inc.
1. Radio Station WORD (AM), Spartanburg, South Carolina
Renewal of Station License, expires 12/01/96
KPM-508 Remote Pickup Base,
expires 12/01/96
WLP-258 Aural 1-C Relay,
expires 12/01/96
WCP-260 Aural 1-C Relay,
expires 12/01/96
WNTA-993 Part 94 TEL
WNTB-717 Part 94 TEL
2. Radio Station WFBC (FM), Greenville, South Carolina
Renewal of Station License, expires 12/01/95
KIY-43 Aural Studio Transmitter Link,
expires 12/01/95
KPK-45[0] Remote Pickup Mobile System,
expires 12/01/95
KPL-9[0]6 Remote Pickup Mobile System,
expires 12/01/95
K[_ _]-962 Remote Pickup Base,
expires 12/01/95
K[_]-[_ _]23 Remote Pickup Mobile,
expires 12/01/95
3. Radio Station W[_ _]C (AM), Greenville, South Carolina
- 59 -
Renewal of Station License, expires 12/01/95
KA-[_]8696 Remote Pickup Mobile System,
expires 12/01/95
KA-95342 Remote Pickup Mobile System,
expires 12/01/95
KFR-360 Remote Pickup Base,
expires 12/01/95
KIP-335 Remote Pickup Base,
expires 12/01/95
KPI-955 Remote Pickup Base,
expires 12/01/95
WHA-866 Aural Studio Transmitter Link,
expires 12/01/95
WYR-259 Remote Pickup Base,
expires 12/01/95
WYR-260 Remote Pickup Base
expires 12/01/95
4. Satellite Uplink
E910487 Domestic Fixed Satellite,
expires 08/30/2001
- 60 -
SCHEDULE 4.6 - LOAN AGREEMENT
Real Property
-------------
Keymarket of South Carolina, Inc.
Greenville/Spartanburg, SC
Call Letters: WFBC (AM/FM)
WORD (AM)
Studio: All three stations operate from studio at:
501 Rutherford Street
Greenville, SC 29609
Owned by Keymarket of south Carolina, Inc.
Tower Sites:
WFBC-AM
59 North Sixth Street
Greenville, SC 29611
Owned by Keymarket of South Carolina, Inc.
WFBC-FM 505 Hemlock Trail Cleveland, SC
29635 *Leased from Multimedia, Inc.
WORD-AM
383 Belcher Road
Inman, SC 29349
Owned by Keymarket of South Carolina, Inc.
Reservations, exceptions and exclusions:
1. As to 501 Rutherford Street:
Apparent encroachment of parking spaces off circular drive onto insured
premises as shown on a plat of survey for Multimedia, Inc. and KSDK,
Inc., by Piedmont Surveyors, dated February 18, 1983, and recorded in
Plat Book 9-J, page 66, RMC Office.
2. As to 59 North Sixth Street:
- 61 -
Title to those portions of the property within the bounds of Birnie
Street, Vance Street, and 60-foot street as shown on Plat 000, page 65,
said RMC Office.
Lack of record title as to the remaining Portion of 31,65-acre tract,
20 acres, more or less, prior to December 29, 1966, being the date of
recordation of Deed to Southeastern Broadcasting Corporation from Abney
Mills, dated November 16, 1966, and recorded in Deed book 810, page
142, RMC Office for Greenville County, South Carolina; also, defects,
liens, or encumbrances (including, among others, possible outstanding
interests of former owners, or those claiming under them), created
prior to recordation of said deed.
- 62 -
SCHEDULE 4.7 - LOAN AGREEMENT
Tangible Personal Property
--------------------------
Copies of the Tangible Personal Property list are available from Dow,
Lohnes and Albertson or River City Broadcasting, L.P.
- 63 -
SCHEDULE 4.81/
Contracts
---------
KEYMARKET OF SOUTH CAROLINA, INC.
WFCB-AM/FM & WORD-AM
REVENUE
Network
- -------
CBS - WFBC/FM
- WFBC/AM
- WORD/AM
ABC -
Affiliation AGT
Sports Rights
- -------------
Clemson
Furman University Athletic Department Sports Ntwk Agt. 05/08/92
Other Revenue
- -------------
Carolina Sound, Inc. 01/01/89
DIRECT COSTS
National Rep
- ------------
The KATZ Agency, Inc. - FM 03/23/70 (Illegible)
- AM 03/23/70 (Illegible)
Licensing
- ---------
Broadcast Music, Inc. - WFBC/AM02/03/94
- WFBC/FM
- WORD/AM
SESAC Inc. - WFBC 04/27/88
- WORD 03/15/91
American Society of Composers, Authors and Publishers
- WFBC/FM01/01/91
- WFBC/AM01/01/91
- WORD/AM01/01/91
- --------
1/ Contracts listed on Schedule 4.6 are incorporated herein by reference.
- 64 -
PROGRAMMING
Talent
- ------
Michael Reagan Show
Richard Ervasti d/b/a Dick Ervasti Prod
Music Services
- --------------
Vallie Consulting
Shane Media
Program Rights
- --------------
EFM Media Management - FM 10/25/90
- AM 12/07/93
Tony Griffin
Carolina Panthers
Atlanta Braves
NPR - Clemson Satellite
Dow, Jones & Company, Inc. - Wall Street Journal Report 04/19/94
SJS Entertainment Promedia, Inc. 06/09/94
Premiere Radio Networks 02/03/92
Gold Comedy Network
News/Weather
- ------------
Accu-Weather, Inc. 05/21/92
The Associated Press WFBC-AM/FM/WORD 07/22/93
Weatherline, Inc. 07/10/90
TECHNICAL
Technical - Rent
- ----------------
Tower Lease Agreement Between KSDK, Inc. and Multimedia
SALES DEPARTMENT
Rating Services
- ---------------
The Arbitron Ratings Company 03/26/91
Tapscan Incorporated 04/07/93
Marketing Research Partners, Inc. 01/21/94
Griffin Radio Research Reports 12/12/92
ADVERTISING PROMOTION
Advertising/Promotion
- ---------------------
Film House, Inc. 01/21/94
CUZ - Robert Michaelson
- 65 -
GENERAL & ADMINISTRATIVE
G&A - Rent/Lease
- ----------------
Alco Capital Resources, Inc. Copier Lease 03/31/93
AT&T Credit Corporation Voice Mail System 09/14/89
AT&T Credit Corporation Voice Mail System 01/12/90
Spartanburg Business
Advanced Business Systems (copier service) 03/30/93
Computer Services
- -----------------
Columbine Systems, Inc. AM/FM/WORD 09/30/93
Columbine Printer Main Agt
Radio Computing Services, Inc. 07/24/92
Building Services
- -----------------
Southeastern Alarm (Date Illegible)
(Alarm Security Company)
Jam Productions, Inc. 01/20/94
LMA
- ---
Spartan Radiocasting Company 08/30/94
- 66 -
SCHEDULE 4.9 - LOAN AGREEMENT
Intangibles
-----------
WFBC-AM
WFBC-FM
WORD-AM
- 67 -
SCHEDULE 4.10 - LOAN AGREEMENT
Financial Statements
--------------------
None.
- 68 -
SCHEDULE 4.12 - LOAN AGREEMENT
Personnel Information; Employee Benefit Plans
---------------------------------------------
Health and Life Insurance
- 69 -
SCHEDULE 4.13 - LOAN AGREEMENT
Labor Relations
---------------
None.
- 70 -
SCHEDULE 4.14 - LOAN AGREEMENT
Litigation
----------
None.
- 71 -
SCHEDULE 4.16 - LOAN AGREEMENT
Taxes
-----
None.
- 72 -
SCHEDULE 4.17 - LOAN AGREEMENT
Compliance with Laws
--------------------
None.
- 73 -
SCHEDULE 4.18 - LOAN AGREEMENT
Absence of Certain Changes
--------------------------
None.
- 74 -
SCHEDULE 4.19 - LOAN AGREEMENT
Transactions with Affiliates
----------------------------
None.
- 75 -
SCHEDULE 4.20 - LOAN AGREEMENT
Environmental Matters
---------------------
PCBs relative to WFBC-AM, at Tower Site at 501 Rutherford Road, which
are presently being removed, the cost of which is being reimbursed by
Multimedia, Inc.
- 76 -
SCHEDULE 4.22 - LOAN AGREEMENT
Insurance
---------
Employer Reinsurance Corporation - broadcasters liability, errors and omissions
Continental - general liability, workman's compensation, auto, fire and casualty
- 77 -
SCHEDULE 4.23 - LOAN AGREEMENT
LMA and Option
--------------
Section 4.23(a)
None
Section 4.23(b)
I. Spartan Radiocasting Company
Schedule 4.5: WSPA-AM, Spartanburg, SC
WSPA-FM, Spartanburg, SC
Schedule 4.8: See attached 4.23(a)
Schedule 4.9: WSPA-AM
WSPA-FM
- 78 -
PROGRAM DEPARTMENT CONTRACTS 4.23(a)
WSPA-FM
Contract Name
- -------------
Broadcast Programming, Inc. - Music Service 11/15/94
MCA Skywatch Traffic, Inc.
CBS, Inc.05/02/94 (with Spartan Radiocasting Company)
Jack Taddeo Communications Corp. 03/31/92
Jeff Davis Productions 05/03/94 - TFN
Carried, but not under contract:
Surfside Diner Beach show (Sundays 7P - 12M)
WSPA-AM
Contract Name
- -------------
Host Communications, Inc. 07/27/94
Charlotte Hornets 1994 - '95 (no date)
South Carolina Network, Inc. 07/22/82
(with Spartan Radiocasting Company)
Clear Channel Radio 05/25/94
(with Spartan Radiocasting Company)
WSB, Inc. 12/10/91
Mutual Broadcasting System, Inc. 07/20/93
Jim Hightower Show 03/02/93
Champion Productions 11/01/93
(with Spartan Radiocasting Company)
The Broadcast Group 02/06/89
(with Spartan Radiocasting company)
CBS Radio Programs 08/24/92
(with Spartan Radiocasting company)
Whitaker Productions 06/02/94
(with Spartan Radiocasting Company)
Dow Jones and Company, Inc. 10/19/92
(with Spartan Radiocasting Company)
MCA Skywatch Traffic, Inc. 12/30/93
Carried, but not under contract:
Wofford College Football and Basketball
High School Football Game of The Week
Battle of The Brains (8th Grade Quiz Show)
On The House-SNP Radio Network
NFL Football (CBS Radio Network)
- 79 -
TABLE OF CONTENTS
Page
ARTICLE I
Defined Terms
1.1 Definitions..........................................................1
1.2 List of Other Definitions............................................8
ARTICLE II
Amount and Terms of Credit
2.1 Loans................................................................8
2.2 Interest.............................................................9
2.3 Maturity............................................................10
2.4 The Note............................................................10
2.5 Payments............................................................10
ARTICLE III
The Closing
3.1 Time and Place of Closing...........................................10
ARTICLE IV
Borrower's Representations and Warranties
4.1 Organization and Standing...........................................11
4.2 Subsidiaries........................................................11
4.3 Authorization and Binding Obligation................................11
4.4 Consents and Approvals; No Violation................................11
4.5 Governmental Authorizations.........................................12
4.6 Title to and Condition of Real Property.............................13
4.7 Title to and Condition of Tangible Personal Property................14
4.8 Contracts...........................................................15
4.9 Intangibles.........................................................15
4.10 Financial Statements................................................16
4.11 Totality of Assets..................................................16
4.12 Personnel Information; Employee Benefit Plans.......................16
4.13 Labor Relations.....................................................18
4.14 Litigation..........................................................19
4.15 Reports.............................................................19
4.16 Taxes...............................................................19
4.17 Compliance with Laws................................................20
4.18 Absence of Certain Changes..........................................20
4.19 Transactions with Affiliates........................................21
4.20 Environmental Matters...............................................21
4.21 OSHA Matters........................................................22
4.22 Insurance...........................................................23
4.23 LMA and Option......................................................23
- i -
4.24 No Commitment of Borrower...........................................23
4.25 Defaults............................................................23
4.26 Liabilities.........................................................24
4.27 Accounts............................................................24
4.28 No Other Names......................................................24
4.29 Material Restrictions...............................................24
4.30 Stock of Borrower...................................................24
4.31 Options, Warrants, Rights...........................................24
4.32 Disclosure..........................................................24
ARTICLE V
Affirmative Covenants
5.1 Conduct of Business of the Stations.................................25
5.2 Maintenance of Assets, Records and Inventory........................25
5.3 Access to Information...............................................25
5.4 Financial and Other Information.....................................26
5.5 Notices of Default or Breach........................................27
5.6 FCC Matters.........................................................27
5.7 Maintenance of Insurance............................................28
5.8 Money Obligations...................................................28
5.9 Notice..............................................................29
5.10 Continued Existence; Compliance with Law............................29
5.11 Title to Property...................................................29
5.12 Conduct of Business.................................................29
5.13 Consents............................................................29
5.14 Option..............................................................29
ARTICLE VI
Negative Covenants
6.1 Conduct of Business of the Stations.................................30
6.2 Indebtedness and Liabilities.......................................30
6.3 Guaranties..........................................................31
6.4 Notes, Accounts Receivable, and Claims..............................31
6.5 Amendment of Governing Documents....................................31
6.6 Issuance and Sale of Equity Interest................................31
6.7 Mergers and Consolidations..........................................32
6.8 Liens...............................................................32
6.9 Restricted Payments and Restricted Investments......................32
6.10 Transactions with Affiliates........................................32
6.11 ERISA...............................................................32
6.12 Accounting Matters..................................................32
6.13 Change of Name......................................................32
ARTICLE VII
Closing Conditions
7.1 Conditions to the Obligations of Lander to Effect the
Transactions........................................................32
- ii -
ARTICLE VIII
Events of Default
8.1 Payments............................................................35
8.2 Covenants...........................................................35
8.3 Borrower's Solvency.................................................35
8.4 Challenge to Enforceability.........................................36
8.5 Condemnation........................................................36
8.6 Security Agreements.................................................36
8.7 Support Agreement...................................................36
8.8 FCC Licenses........................................................36
8.9 Employee Retirement Income Security Act.............................37
ARTICLE IX
Remedies Upon Default
9.1. Optional Defaults...................................................37
9.2 Automatic Default...................................................37
9.3 Offsets.............................................................37
9.4 Performance by Lender...............................................37
9.5 Other Remedies......................................................37
ARTICLE X
Miscellaneous Provisions
10.1 Interpretation......................................................38
10.2 Expenses of Lenders: Indemnity......................................38
10.3 Further Assurances..................................................38
10.4 Amendment and Modification..........................................39
10.5 Waiver of Compliance; Consents......................................39
10.6 Notices.............................................................39
10.7 Assignment..........................................................41
10.8 Governing Law.......................................................42
10.9 Counterparts........................................................42
10.10 Headings............................................................42
10.11 Entire Agreement....................................................42
10.12 Severability........................................................42
10.13 Press Releases......................................................42
10.14 Publicity...........................................................42
10.15 Survival of Agreements..............................................43
10.16 Termination.........................................................43
10.17 FCC and License Compliance..........................................43
10.8 WAIVER OF JURY TRIAL................................................43
EXHIBITS & DISCLOSURE SCHEDULES
LISTING.............................................................45
- iii -
EXHIBITS
Exhibit A - Promissory Note..........................................46
Exhibit B-1 - Landlord Estoppel Certificate............................51
Exhibit B-2 - Non-disturbance and Attornment Agreement.................53
DISCLOSURE SCHEDULES
Schedule 4.1 - Loan Agreement - Organization and Standing...............58
Schedule 4.4 - Loan Agreement - Consents................................59
Schedule 4.5 - Loan Agreement - FCC and Other Licences..................60
Schedule 4.6 - Loan Agreement - Real Property...........................62
Schedule 4.7 - Loan Agreement - Tangible Personal Property..............64
Schedule 4.8 - Contracts................................................65
Schedule 4.9 - Loan Agreement - Intangibles.............................68
Schedule 4.10 - Loan Agreement - Financial Statements....................69
Schedule 4.12 - Loan Agreement - Personnel Information; Employee
Benefit Plans...........................70
Schedule 4.13 - Loan Agreement - Labor Relations.........................71
Schedule 4.14 - Loan Agreement - Litigation..............................72
Schedule 4.16 - Loan Agreement - Taxes...................................73
Schedule 4.17 - Loan Agreement - Compliance with Laws....................74
Schedule 4.18 - Loan Agreement - Absence of Certain Changes..............75
Schedule 4.19 - Loan Agreement - Transactions with Affiliates............76
Schedule 4.20 - Loan Agreement - Environmental Matters...................77
Schedule 4.22 - Loan Agreement - Insurance...............................78
Schedule 4.23 - Loan Agreement - LMA and Option..........................79
- iv -
FIRST AMENDMENT TO LOAN AGREEMENT
This First Amendment to Loan Agreement (the "Amendment") is
entered into as of May 24, 1996 by and between KEYMARKET OF SOUTH CAROLINA,
INC., a South Carolina corporation ("Borrower") and RIVER CITY BROADCASTING,
L.P., a Delaware limited partnership ("Lender")
WITNESSETH
WHEREAS, the Borrower and Lender are parties to that certain
Loan Agreement dated as of July 7, 1995 (the "Loan Agreement"); and
WHEREAS, Borrower has requested that Lender make certain
additional loans to it, and Lender has made, and is willing to make, such loans
on the terms and subject to the conditions set forth herein;
NOW THEREFORE, in consideration of the premises herein
contained, and for other good and valuable consideration, the receipt of which
is hereby acknowledged, the parties hereto hereby agree as follows:
l. Defined Terms. Capitalized terms used herein and not otherwise defined
herein shall have the meanings attributed to such terms in the Loan
Agreement.
2. Amendments of the Loan Aareement.
2.1 Section 1.1 is hereby amended by adding the following definitions
thereto in their proper alphabetical order:
"Additional Loan Funding Date" means the date of the funding
of an Additional Loan.
"Joint Sales Agreements" means each of the Joint Sales
Agreement dated as of November 10, 1995 by and among Borrower,
WLWZ Operating Company, Inc., WLWZ License Subsidiary, Inc.,
WLYZ Operating Company, Inc. and WLYZ License Subsidiary,
Inc., and the Joint Sales Agreement dated April 30, 1996 among
Borrower, Palm Broadcasting Company, L.P. and Palm
Broadcasting License Partnership.
"JSA Stations" means Radio Stations WXWX-FM, Easley, South
Carolina and WXWZ-FM, Greer, South Carolina.
"Notice of Borrowing" means written or telegraphic notice given to
Lender specifying the date and the amount of the Additional Loan that
Borrower seeks.
2.2 Section 1.2 is hereby amended by adding the following additional terms in
their proper alphabetical order:
Additional Loans Section 2.1
Confer Loan Section 4.33
Initial Additional Loans Section 2.1
Other Loans Section 2.1
2.3 Section 2.1 is hereby amended in its entirety as follows:
2.1 Loans. (a) Subject to the terms and conditions of this Agreement,
Lender shall make (i) a loan of Five Million Five Hundred and Fifty
Thousand ($5,550,000) Dollars on the Closing Date (the "Closing Date
Loan") subject to adjustments as provided in the following paragraph;
(ii) at the request of Borrower, but in the reasonable discretion of
Lender, additional advances not to exceed Five Hundred Thousand
($500,000) for capital and other operating expenditures (including
Approved Capital Expenditures) related to the operation of the Stations
(the "Advance Loans"); (iii) upon the closing in connection with the
exercise of the Option with the prior written consent of Lender
pursuant to Section 5.14 hereof, a loan in the amount of Five Million
One Hundred Fifty Thousand Dollars ($5,150,000) as the purchase price
in connection with the exercise of the Option, which amount shall be
subject to Lender's approval (the "Option Loan"); (iv) advances to be
made no more frequently than monthly in an aggregate amount not to
exceed One Million Two Hundred Thousand Dollars ($1,200,000) solely for
operating expenditures related to the operations of the Stations and
the JSA Stations pursuant to the Joint Sales Agreements and to repay
the Confer Loan (the "Additional Loans") subject to satisfaction of the
conditions set forth in Section 7.2 hereof and notwithstanding anything
to the contrary set forth herein, only to the extent Lender does not
deem itself insecure hereunder and (v) other loans as may be approved
by Lender in its sole discretion in an aggregate amount not to exceed
$775,000 (the "Other Loans").
The parties acknowledge and agree that following the advances
heretofore made by Lender to Borrower in the amounts of (i) $4,478.46,
(ii) $9,729.20, (iii) $100,000, (iv) $103,915.46, (v) $96,000.00, (vi)
$132,363.84 to repay the Confer Loan, (vii) $33,000.00, (viii)
$164,000.00, (ix) $30,000.00, (x) $94,400.00, (xi) $75,600.00 (xii)
$40,000.00, (xiii) $75,000.00 and (xiv) $40,000.00 (collectively, the
"Initial Additional Loans") constitute Additional Loans. The Closing
Date Loan, the Advance Loans, the Option Loans, the Additional Loans
and the Other Loans are hereinafter collectively referred to as the
"Loans".
2.4 Section 2.4 is hereby amended to read in its entirety as follows:
2.4 The Note. The Loans shall be evidenced by an amended and
restated promissory note in the principal amount of Thirteen Million
One Hundred Seventy-Five Thousand Dollars ($13,175,000) and payable to
Lender, substantially in the form attached as Exhibit A to the First
Amendment to Loan Agreement dated as of May 24, 1996 between Borrower
and Lender (the "Note").
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2.5 Article IV is hereby amended by adding the following provision at the end
thereof, and Borrower hereby represents and warrants to Lenders as follows:
4.33 Confer Loan. On December 26, 1995, Confer made a loan to
Borrower in the amount of $131,000, bearing interest on the outstanding
principal amount at a rate of ten percent (10%) per annum (the "Confer
Loan").
2.6 Article V is hereby amended by adding the following provision at the end
thereof, and Borrower hereby agrees that so long as the Loan Agreement, as it
may be amended, remains in effect or any of the Loan Obligations remain unpaid,
Borrower will perf orm and observe the following provision:
5.15 Additional Funding. Prior to taking, or omitting to take,
any action that could effect any of the matters set forth in Section
8.3 below, Borrower will notify Lender and seek additional funding from
Lender, and to the extent Lender agrees to provide such funding,
Borrower will accept such funding in order to prevent any of the
matters set forth in Section 8.3 from occurring.
2.7 Article VII is hereby amended by renaming such Article VII "Closing
Conditions and Additional Loan and Other Loan Funding Conditions" and by adding
the following provisions at the end thereof:
7.2 Conditions to the Obligations of Lender to Effect the
Additional Loans Contemplated Hereby. The obligations of Lender to make
Additional Loans on each Additional Loan Funding Date shall be further
subject to the fulfillment of the following conditions, any one or more
of which may be waived in writing by Lender:
At least five (5) days before the proposed Additional Loan
Funding Date:
(a) Lender shall have received no later than 12:00 Noon
(St. Louis time) an irrevocable, originally executed Notice of
Borrowing signed by a duly authorized officer of Borrower.
(b) Lender shall have received on the date of delivery of
the Notice of Borrowing, a certificate of a duly authorized
officer of Borrower, with supporting documentation, as to each
Additional Loan other than the Initial Additional Loans, (i)
setting forth an itemization of the operating expenditures
related to the operations of the Stations and the JSA Stations
pursuant to the Joint Sales Agreement for the preceding month
and (ii) certifying that the proceeds of the preceding
Additional Loan were used solely to pay expenses in accordance
with the previous certificate delivered under this Section
7.2(b) (i) and Section 2.1(a) (iv) hereof, such certificate
and supporting documentation to be in form and substance
satisfactory to Lender.
7.3 Conditions to the Obligation of Lender to Effect the Other
Loans Contemplated Hereby. The obligations of Lender to make Other
Loans on each Other
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Loan Funding Date shall be further subject to the fulfillment of the
following conditions, any one or more of which may be waived in writing
by Lender:
(a) At least ten (10) days before the proposed Other
Loan Funding Date Lender shall have received, no later
than 12:00 Noon (St. Louis time) a certificate of a duly
authorized officer of Borrower setting forth in reasonable
detail the purposes of such other loan; and
(b) In the event Lender shall have notified Borrower
of its willingness to make such Other Loan, at least five
(5) days before the proposed Other Loan Funding Date
Lender shall have received an irrevocable, originally
executed Notice of Borrowing signed by a duly authorized
officer of Borrower.
2.8 Article VIII is here amended by adding the following
provisions at the end thereof:
8.10 Use of Proceeds of Additional Loans and Other Loans.
The proceeds of any Additional Loan are used for any purpose
other than as specified in Section 2.1(a) (iv) hereof or the
proceeds of any Other Loan are used for any purpose other than
approved by Lender as specified in Section 2.1(a) (v) hereof.
3. Conditions-of Effectiveness to this Amendment. This
Amendment shall become effective on the date on which each of the
following conditions has been fulfilled:
(a) This Amendment. The Borrower and the Lender shall have
each executed and delivered this Amendment.
(b) Amended and Restated Note. The Borrower shall have
executed and delivered to Lender the Note.
(c) Certified Resolutions. Lender shall have received from
Borrower copies, certified by an executive officer of Borrower
of resolutions adopted on behalf of Borrower authorizing the
execution, delivery and performance of this Amendment, and all
instruments and documents to be delivered in connection
herewith and the transactions contemplated hereby.
(d) Evidence of Payment to the MC Partners. Release and
Certified Resolutions. The Keymarket Sellers shall have
provided evidence of payment of the Release Payment to the MC
Partners in connection with, and as defined under, the release
executed by the MC Partners in favor of the Borrower, and the
Lender in substantially the form of Exhibit B attached hereto
and Lender shall have received (i) an executed copy of such
release and (ii) copies, certified by an executive officer of
each of the MC Partners, of resolutions adopted on behalf of
such MC Partner authorizing the execution, delivery and
performance of such release.
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4. Amendment of Related Documents: Affirmation and Agreement of the
Borrower. The Borrower acknowledges and agrees that each Related
Document, including the security agreements, stock pledge agreements
and mortgages executed in connection with the Loan Agreement shall
continue in full force and effect and all of the obligations thereunder
shall be valid and enforceable and shall not be impaired or affected by
the execution or effectiveness of this Amendment or the amendment and
restatement of the Note. The Borrower represents and warrants that all
representations and warranties contained in the Related Documents are
true, correct and complete in all material respects on and as of the
date hereof to the extent as though made on as of the date hereof. The
Borrower further acknowledges and agrees that the security interests
and liens granted by the Borrower and Confer to the Bank pursuant to
the Related Documents shall secure all obligations of the Borrower
arising under the Loan Agreement, as amended hereby, and the Note, as
amended and restated, and that the Secured Obligations (as that term is
defined in the Security Agreement executed by Borrower and in the
Pledge Agreement executed by Confer) shall include all obligations of
Borrower arising under the Loan Agreement, as amended hereby, and the
Note as amended and restated.
5. Ratification. Except as specifically amended pursuant hereto, the Loan
Agreement, the Note and all other Related Documents, shall remain in
full force and effect and are hereby ratified, approved and confirmed.
6. Reference to Loan Agreement.
----------------------------
(a) From and after the Effective Date, each reference in the
Loan Agreement to "this Agreement", "hereof", or "hereunder" or words
of like import, and all references to the Loan Agreement in any and all
Related Documents, agreements, instruments, documents, notes,
certificates and other writings of every kind and nature shall be
deemed to mean the Loan Agreement, as amended by this Amendment, and
each reference in the Loan Agreement to "the Note" or words of like
import, and all references to the Note in any and all Related
Documents, agreements, instruments, documents, notes, certificates and
other writings of every kind and nature shall be deemed to mean the
Note, as amended and restated pursuant to this Amendment.
(b) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or remedy
of the Lender under the Loan Agreement or any of the Related Documents,
nor constitute a waiver of any provision of the Loan Agreement or any
of the Related Documents.
7. CHOICE OF LAW. THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE
STATE OF MISSOURI (BUT NOT THE LAWS PERTAINING TO CHOICE OF LAW) AS TO
ALL MATTERS, INCLUDING, BUT NOT LIMITED TO MATTERS OF VALIDITY,
CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
8. Execution in Counterparts. This Amendment may be executed in any number
of counterparts and by different parties hereto in separate
counterparts, each of which when
5
so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the date first above written.
BORROWER:
KEYMARKET OF SOUTH CAROLINA, INC.
By: /s/ Kerby E. Confer
--------------------------
Name:
Title:
LENDER:
RIVER CITY BROADCASTING, L.P.
By: BETTER COMMUNICATIONS, INC.,
General Partner
By: /s/ Larry D. Marcus
----------------------------
Name:
Title:
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Exhibit A to Loan Agreement
AMENDED AND RESTATED PROMISSORY NOTE
------------------------------------
$13,175,000 May 24, 1996
FOR VALUE RECEIVED, the undersigned, KEYMARKET OF SOUTH CAROLINA, Inc.,
a South Carolina corporation (the "Maker"), promises to pay to the order of
RIVER CITY BROADCASTING, L.P., a Delaware limited partnership (the "Payee"), in
the manner and at the place provided in that certain Loan Agreement, dated as of
July 7, 1995, as amended between the Maker and the Payee (as the same may be
further amended, modified, restated or extended from time to time, the "Loan
Agreement"), the lesser of (x) the principal sum of Thirteen Million One Hundred
Seventy-Five Thousand Dollars ($13,175,000) and (y) the unpaid principal amount
of all advances made by Payee to Maker as the Loans under the Loan Agreement,
together with interest accrued thereon as provided in this Note. Capitalized
terms used herein without definition shall have the meanings assigned those
terms in the Loan Agreement.
The unpaid principal balance of this Note shall bear interest prior to
maturity at the rates determined in accordance with the provisions of the Loan
Agreement.
This Note evidences indebtedness of the Maker to the Payee arising
under the Loan Agreement, to which reference is hereby made for a statement of
the rights of the Payee (including the right of the holder hereof to declare
this Note due prior to its stated maturity and the other rights and remedies of
the holder hereof) and the duties and obligations of the Maker in relation
thereto, but neither this reference to the Loan Agreement nor any provision
thereof shall affect or impair the absolute and unconditional obligation of the
Maker to pay the principal of or interest on this Note when due. This Note is an
amendment and restatement of the Note dated July 7, 1995 made by Maker in favor
of Payee (the "Original Note") and not a replacement, substitution or repayment
thereof. The indebtedness and liabilities of Maker under the Original Note
remain in full force and effect, as amended, renewed and extended hereby.
The principal of and all interest on this Note shall be paid as
provided in the Loan Agreement in immediately available funds constituting
lawful money of the United States of America, not later than 12:00 noon (St.
Louis, Missouri time) on the day when due, at the Payee's offices at 1215 Cole
Street, St. Louis, Missouri 63106, or at such other place as the Payee may
designate in writing. Until notified in writing of the transfer of this Xote in
accordance with the terms of-the Loan Agreement, Maker shall be entitled to deem
Payee or such person who has been identified by the transferor in writing to
Maker as the owner and holder of this Note, as the owner and holder of this
Note. Each of Payee and any subsequent holder of this Note agrees, by its
acceptance hereof, that before disposing of this Note or any part hereof it will
make & notation hereon of all principal payments previously made hereunder and
of the date to which interest hereon has been paid; that the failure to make a
notation of any payment made on this Note shall not limit or otherwise affect
the obligation of Maker hereunder with respect to payments of principal or
interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day
that is not a business day, such payment may be made on the next succeeding
business day and such extension of time shall in each case be included in the
computation of interest payable on this Note.
This Note is subject to prepayment as provided in Section 2.6 of the
Loan Agreement.
To the extent permitted by law, the Maker and each endorser of this
Note, and their respective heirs, successors, legal representatives, and
assigns, hereby severally waive (i) any and all homestead or exemption laws and
rights, and (ii) presentment for payment, demand, protest, notice of
non-payment, notice of protest, and notice of dishonor of the debt evidenced
hereby, together with each and every other notice of any kind respecting this
Note and all lack of diligence or delays in collection or enforcement hereof.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Loan Agreement.
The terms of this Note are subject to amendment only in the manner
provided in the Loan Agreement.
This Note is subject to restrictions on transfer or assignment as
provided in Section 10.7 of the Loan Agreement and as otherwise may be agreed in
writing between Maker and Payee.
If at any time the indebtedness evidenced by this Note is collected
through legal proceedings or this Note is placed in the hands of attorneys for
collection, the Maker and each endorser of this Note hereby jointly and
severally agree to pay all costs and expenses (including reasonable attorneys'
fees) incurred by the holder of this Note in collecting or attempting to collect
such indebtedness, or otherwise arising in connection with the enforcement by
such holder of any rights or remedies under this Note.
THE MAKER, TO THE EXTENT PERMITTED BY LAW, WAIVES ANY RIGHT TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN THE PAYEE AND THE MAKER ARISING OUT OF, IN CONNECTION
WITH, RELATING TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
No delay or omission on the part of the Payee in exercising any right
hereunder shall operate as a waiver of such right or of any other right of the
Payee, nor shall any delay, omission or waiver on any one occasion be deemed a
bar to or a waiver of the same or any other right on any future occasion.
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In case any provision (or any part of any provision) contained in this
Note shall for any reason be held by a court of competent jurisdiction to be
invalid, illegal, or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision (or remaining part of
the affected provision) of this Note, but this Note shall be construed as if
such invalid, illegal or unenforceable provision (or part thereof) had never
been contained herein but only to the extent it is invalid, illegal or
unenforceable.
THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF MISSOURI (BUT
NOT THE LAWS PERTAINING TO CHOICE OF LAW) AS TO ALL MATTERS, INCLUDING BUT NOT
LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION, EFFECT, PERFORMANCE AND REMEDIES.
This note being pledged by Payee to its Lenders to secure obligations
under the First Amended and Restated Credit Agreement (the "Credit Agreement')
dated as of April 21, 1995 by and among Payee, Bank of Montreal, Banks Trust
Company and the Lenders listed therein (the "Lenders").
IN WITNESS WHEREOF, Maker has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year and at the
place first above written.
KEYMARKET OF SOUTH CAROLINA, INC.
By:__________________________________
Name:
Title:
3