EXHIBIT 2.6
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LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT
by and between
JACOR COMMUNICATIONS, INC.
and
BANQUE PARIBAS
Dated as of March 13, 1996
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TABLE OF CONTENTS
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Section Title Page
------- ----- -----
Section 1. DEFINITIONS...................................... 1
1.1 Defined Terms............................... 1
1.2 Use of Defined Terms in
Other Documents............................ 5
Section 2. TERMS OF THE LETTER OF CREDIT.................... 5
2.1 Issuance of Letter of Credit;
Termination of Letter of Credit............ 5
2.2 Repayment of Drawings....................... 5
2.3 Fees........................................ 7
2.4 Liability of Bank........................... 7
2.5 Liability of the Company.................... 8
2.6 Change In Circumstances..................... 9
2.7 Taxes....................................... 11
2.8 Availability of Rate Options................ 13
2.9 Funding Indemnification..................... 14
2.10 Manner and Place of Payments;
Interest Calculation;
Overdue Amounts............................ 14
2.11 L/C Providers............................... 15
Section 3. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.......................................... 15
Section 4. CONDITIONS PRECEDENT TO ISSUANCE OF
THE LETTER OF CREDIT............................. 17
4.1 Date of Issuance............................ 17
Section 5. COVENANTS OF THE COMPANY......................... 18
5.1 Affirmative Covenants....................... 19
Section 6. EVENTS OF DEFAULT................................ 20
Section 7. MISCELLANEOUS.................................... 21
7.1 Amendments, Etc............................. 21
7.2 Addresses for Notices....................... 21
7.3 No Waiver; Remedies......................... 22
7.4 Indemnification............................. 22
7.5 Successors and Assigns...................... 24
7.6 Fees and Expenses........................... 24
7.7 Severability................................ 25
7.8 Right of Set-Off............................ 25
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Section Title Page
------- ----- -----
7.9 Governing Law............................... 25
7.10 Headings................................... 25
7.11 Counterparts............................... 25
7.12 Termination................................ 25
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This LETTER OF CREDIT AND REIMBURSEMENT AGREEMENT (this "Agreement"),
dated as of March 13, 1996, is by and between JACOR COMMUNICATIONS, INC. (the
"Company"), a corporation organized under the laws of the State of Ohio, and
BANQUE PARIBAS, a banking corporation organized under the laws of France (the
"Bank").
PRELIMINARY STATEMENT
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The Company and Citicasters Inc. ("Citicasters"), a corporation
organized under the laws of Florida, have entered into an Agreement and Plan of
Merger, dated February 12, 1996, pursuant to which JCAC, Inc., a wholly-owned
subsidiary of the Company will be merged with and into Citicasters (the "Merger
Agreement"). In connection with and as required by the Merger Agreement, the
Company has requested that the Bank issue an irrevocable letter of credit in
substantially the form of Exhibit A hereto (together with any amendments or
supplements thereto, the "Letter of Credit") in order to provide funds as
contemplated thereunder. The Bank is prepared to issue the Letter of Credit
pursuant to and upon the terms and conditions stated in this Agreement.
All obligations of the Company to reimburse the Bank for payments made
by the Bank under the Letter of Credit and to pay all other amounts payable to
the Bank arising under or pursuant to this Agreement (all such obligations being
hereinafter collectively referred to as the "Reimbursement Obligations") are
created under and will be evidenced by this Agreement and will be secured by a
pledge and assignment of the Collateral to the extent provided in the Credit
Agreement and the Collateral Documents, all as hereinafter defined.
Section 1. DEFINITIONS
1.1 Defined Terms. Capitalized terms used herein and not otherwise
defined are used as defined in the Credit Agreement as in effect on the date
hereof. As used herein the following terms shall have the following meanings,
unless the context otherwise requires and such meanings shall be equally
applicable to both singular and plural forms of the terms herein defined.
"Agreement" shall mean this Letter of Credit and Reimbursement
Agreement, as the same may from time to time be amended, supplemented or
otherwise modified in accordance with its terms.
"Applicable Eurodollar Rate Margin" shall mean, for the period from
the date of the Letter of Credit Advance is made to the date which is three
months thereafter 4.0% per annum, plus for every three months thereafter the
margin shall increase by .25% per annum (i.e. at three months the applicable
margin shall increase to 4.25% per annum, at six months 4.50% per annum, etc.)
until the Letter of Credit Advance is paid in full.
"Applicable Floating Rate Margin" shall mean (regardless of when the
Letter of Credit Advance bears interest at the Base Rate), for the period from
the date the Letter of Credit Advance is made to the date which is three months
thereafter 2.75% per annum, plus for every three months thereafter the margin
shall increase by .25% per annum (i.e. at three months the applicable margin
shall increase to 3.0% per annum, at six months 3.25% per annum, etc.) until the
Letter of Credit Advance is paid in full.
"Available Commitment" shall mean $75,000,000.
"Bank Rate" shall mean a fluctuating rate of interest per annum equal
to the Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
"Base Rate" shall have the meaning as set forth in the Credit
Agreement.
"Business Day" shall mean a day other than (a) Saturday, (b) Sunday,
(c) a day on which banks located in New York City or Chicago are required or
authorized by law to remain closed, or (d) a day on which The New York Stock
Exchange is closed.
"Collateral" shall have the meaning as set forth in the Credit
Agreement.
"Collateral Documents" shall have the meaning as set forth in the
Credit Agreement.
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"Credit Agreement" shall mean the Credit Agreement among the Company,
the Bank, the First National Bank of Boston, Bank of America Illinois and the
Banks (as defined therein), dated February 20, 1996. References herein to the
Credit Agreement shall mean such agreements in force as of the Date of Issuance
and such references shall continue in effect notwithstanding the termination of
such agreement.
"Date of Issuance" shall mean the date on which the Letter of Credit
is issued.
"Default" shall mean any Event of Default and any event, condition or
occurrence which with the passage of time or the giving of notice, or both, or
with the satisfaction of any other condition, would become an Event of Default.
"Demand for Payment" shall mean the single demand for payment under
the Letter of Credit accompanied by a certificate in the form of Annex A to the
Letter of Credit.
"Documents" shall mean this Agreement, the Letter of Credit, the
Escrow Agreement, the Credit Agreement, the Collateral Documents and all
agreements, instruments, financing statements and certificates delivered in
connection therewith or contemplated thereby. References herein to the
Documents shall mean such agreements in force as of the Date of Issuance and
such references shall continue in effect, notwithstanding the termination of any
such agreement.
"Escrow Agent" shall mean the bank designated pursuant to the Escrow
Agreement to serve as escrow agent, and any successors designated pursuant to
the Escrow Agreement and approved by the Bank. The initial Escrow Agent shall
be PNC Bank, Ohio, N.A.
"Escrow Agreement" shall mean the Escrow Agreement by and among the
Company, Citicasters, and the Escrow Agent with respect to the Escrow Agent's
responsibilities as escrow agent with respect to the Letter of Credit, dated as
of March 13, 1996.
"Eurodollar Base Rate" shall mean the rate determined by the Bank to
be the rate at which deposits
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in United States dollars are offered by the Bank to first-class banks in the
interbank Eurodollar market at approximately 11:00 a.m. two Business Days prior
to the first day of the relevant Interest Period.
"Eurodollar Rate" shall mean, with respect to a Letter of Credit
Advance for the relevant Interest Period, the quotient obtained by taking (a)
the Eurodollar Base Rate applicable to that Interest Period, divided by (b) one
minus the Reserve Requirement (expressed as a decimal) applicable to that
Interest Period.
"Event of Default" shall mean any event specified in Section 6 of this
Agreement, provided that any requirement for notice, lapse of time, or both, or
any other condition to such an event becoming an "Event of Default" thereunder
has been satisfied.
"Expiration Date" shall have the meaning as set forth in the Letter
of Credit.
"Interest Period" shall have the meaning as set forth in Section
2.2(b).
"Letter of Credit" shall mean the irrevocable letter of credit to be
issued by the Bank pursuant hereto for the account of the Company, which shall
be in substantially the form of Exhibit A to this Agreement.
"Letter of Credit Advance" shall mean the amount advanced by the Bank
under the Letter of Credit.
"Letter of Credit Amount" shall have the meaning as set forth in the
Letter of Credit as the amount available to be drawn thereunder.
"Letter of Credit Fees" shall mean the fees payable under subsection
2.3(a) hereof.
"Maturity Date" shall mean December 31, 1997.
"Participant" shall mean the Bank or any entity to which any
Participant has granted a participation in the Letter of Credit, provided,
however, any such participant shall take such participation subject to the terms
of this Agreement.
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"Person" shall mean any individual, partnership, firm, corporation,
association, joint venture, trust or other entity, or any government (or
political subdivision or agency, department or instrumentality thereof).
"Reimbursement Obligations" shall mean all amounts payable to the Bank
or any Participant hereunder.
"Reserve Requirement" shall mean, with respect to an Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on eurocurrency
liabilities.
"Stated Termination Date" shall mean June 3, 1997.
"Taxes" shall have the meaning as set forth in the Credit Agreement.
1.2 Use of Defined Terms in Other Documents. Terms which are defined
in this Agreement or in the Credit Agreement shall have such defined meanings
when used in any document, certificate, report or agreement furnished from time
to time in connection with this Agreement unless the context otherwise requires.
Unless otherwise specified, all times herein shall mean Chicago, Illinois time.
Section 2. TERMS OF THE LETTER OF CREDIT
2.1 Issuance of Letter of Credit; Termination of Letter of Credit.
The Bank agrees, on the terms and subject to the conditions hereinafter set
forth, to issue for the account of the Company and for the benefit of the Escrow
Agent the Letter of Credit (substantially in the form of Exhibit A hereto),
dated the Date of Issuance and completed in accordance with such form and the
terms of this subsection 2.1. The Letter of Credit Amount under the Letter of
Credit on the Date of Issuance shall be $75,000,000. The Letter of Credit shall
terminate on the Expiration Date.
2.2 Repayment of Drawings. (a) The Company agrees to reimburse the
Bank, at the times, in the manner
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and otherwise in accordance with the terms of this Agreement, for all amounts
drawn under the Letter of Credit in connection with the Demand for Payment and
to pay all other Reimbursement Obligations together with interest thereon,
pursuant to the terms hereof.
The Company agrees to pay, or cause to be paid, to the Bank on the
Maturity Date, an amount equal to the amount disbursed by the Bank pursuant to
the Letter of Credit, plus interest which shall accrue and be payable for each
Interest Period, on the amount so disbursed by the Bank at the Bank Rate from
and including the date of such disbursement to but not including the date the
Bank is reimbursed in full subject to the provisions of Section 2.8 in which
case such amounts will bear interest at the Base Rate plus the Applicable
Floating Rate Margin. Interest shall be payable hereunder on the last day of
each Interest Period and, in the case of an Interest Period of six months, on
the date occurring three months from the first day of such Interest Period and
on the Maturity Date.
(b) The Company shall, in respect of the making of a Letter of
Credit Advance, select the interest period (the "Interest Period") applicable to
such Letter of Credit Advance, which Interest Period shall, at the option of the
Company, be either a one-month, two-month, three-month or six-month period,
provided that:
(i) the initial Interest Period for any Letter of Credit Advance
shall commence on the date of the making of such Letter of Credit Advance
and each Interest Period occurring thereafter in respect of such Letter of
Credit Advance shall commence on the date on which the next preceding
Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, however, that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
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such Interest Period shall expire on the next preceding Business Day;
(iii) if any Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last Business Day of
such calendar month; and
(iv) no Interest Period in respect of the Letter of Credit
Advance shall extend beyond the Maturity Date.
(c) The Company shall give the Bank, not later than the third
Business Day prior to the end of each Interest Period, written notice of its
designation of the next succeeding Interest Period. In the event the Bank fails
to receive such notice, the next succeeding Interest Period shall be for one
month.
2.3 Fees.
(a) Reference is hereby made to that certain letter dated March 13,
1996 (the "Fee Letter"), from the Bank to the Company (as amended or
supplemented from time to time) regarding the agreement as to certain fees
payable by the Company to the Bank (the "Letter of Credit Fees"), the provisions
of which letter are incorporated herein by reference. Any reference herein or
in any other document to fees and/or other amounts or obligations payable under
this Agreement shall include without limitation all fees and other amounts
payable pursuant to the aforementioned letter concerning Letter of Credit Fees
and any reference to this Agreement shall be deemed to include reference to said
letter.
2.4 Liability of Bank. Neither the Bank nor any of their officers or
directors shall be liable or responsible for (a) the use which may be made of
the Letter of Credit or for any acts, omissions, errors, interruptions, delays
in transmission, dispatch or delivery of any message or advice, however
transmitted, of the Bank in connection with the Letter of Credit; (b) any
action, inaction or omission which may be taken by the Bank in connection with
the Letter of Credit; (c) the validity, sufficiency or genuineness of documents,
or of
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any endorsements thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged; (d) payment by
the Bank against presentation of documents which do not comply with the terms of
the Letter of Credit, including failure of any documents to bear any reference
or adequate reference to the Letter of Credit; or (e) any other circumstances
whatsoever in making or failing to make payment under the Letter of Credit,
except only that the Company shall have a claim against the Bank for acts or
events described in the immediately preceding clauses (a) through (d), and the
Bank shall be liable to the Company, to the extent, but only to the extent, of
any direct, as opposed to consequential, damages suffered by it which the
Company proves were caused by (i) the Bank's willful misconduct or gross
negligence in determining whether documents presented under the Letter of Credit
comply with the terms of the Letter of Credit or (ii) the Bank's willful failure
or gross negligence in failing to pay under the Letter of Credit after the
presentation to it by the Escrow Agent of a certificate strictly complying with
the terms and conditions of the Letter of Credit. The Company further agrees
that any action taken or omitted by the Bank under or in connection with the
Letter of Credit or the related draft or documents, if done without gross
negligence, shall be effective against the Company as to the rights, duties and
obligations of the Bank and shall not place the Bank under any liability to the
Company. In furtherance and not in limitation of the foregoing, the Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary; provided that if the Bank shall receive written
notification from the Company and the Escrow Agent that sufficiently conforming
(in the opinion of the Bank) documents presented to the Bank are not to be
honored, the Bank agrees that they will not honor such documents; provided,
further, however, that the Company hereby acknowledges that such dishonor by the
Bank shall constitute a circumstance that the Bank may seek indemnification for
under Section 7.4. The foregoing is not intended to limit the liability of the
Bank under the Letter of Credit.
2.5 Liability of the Company. The Company and the Bank agree that
the obligation of the Company to pay the Reimbursement Obligations are
contractual obligations
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of the Company and shall be fulfilled strictly in accordance with this Agreement
and the Credit Agreement, and shall not be affected by, and the Bank shall not
be responsible for, among other things, (i) the validity, genuineness or
enforceability of the Credit Agreement, the collateral security created
thereunder, any other documents, notices or endorsements relating thereto (even
if such documents, notices or endorsements relating thereto should in fact prove
to be in any and all respects invalid, fraudulent or forged), (ii) any dispute
between or among the Company or the Escrow Agent, or any claims whatsoever of
the Company against the Escrow Agent, or (iii) any other circumstances or
happenings whatsoever, whether or not similar to any of the foregoing.
2.6 Change In Circumstances.
(a) If any law or any governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any
regulatory interpretation thereof, or compliance of the Bank or any Participant
with such (which has been adopted or changed after the date hereof),
(i) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, the Bank or any Participant (other than reserves and assessments taken
into account in determining the interest rate applicable to any loan) or in
maintaining the Letter of Credit, or
(ii) imposes any other condition the result of which is to
increase the cost to the Bank or any Participant of making, funding or
maintaining any loan or the Letter of Credit or reduces any amount
receivable by the Bank in connection with any such loan, or requires the
Bank or any Participant to make any payment calculated by reference to the
amount of any loan made or interest received by it, by an amount deemed
material by the Bank or any Participant, or
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(iii) affects the amount of capital required or expected to be
maintained by the Bank or any Participant and the Bank or any Participant
determines the amount of capital required is increased by or based upon the
existence of this Agreement or the Letter of Credit,
and the result of any of the foregoing is to increase the cost to the Bank or
any Participant of agreeing to issue, issuing, making any payment under or
maintaining this Agreement and the Letter of Credit, or to reduce the amount of
any payment (whether of principal, interest or otherwise) receivable by the Bank
or any Participant or to require the Bank or any Participant to make any payment
on or calculated by reference to the gross amount of any sum received by it, in
each case by an amount which the Bank or such Participant in its reasonable
judgment deems material, then:
(1) the Bank or such Participant shall, upon making a determination to
impose increased costs as a result of the occurrence of any of the foregoing,
notify the Bank in writing who shall thereupon notify the Company of such
determination in writing;
(2) after giving notice of such determination, the Bank or such
Participant shall also as promptly as practicable deliver to the Bank (who shall
thereupon deliver such certificate to the Company) a certificate stating the
change which has occurred or the reserve requirements or other costs or
conditions which have been imposed on the Bank or such Participant or the
request, direction or requirement with which it has complied together with the
date thereof, the amount of such increased cost, reduction or payment and the
way in which such amount has been calculated, including a reasonably detailed
calculation and the Bank or such Participants' determination of such amounts,
absent fraud or manifest error, shall be conclusive; and
(3) the Company shall pay to the Bank for the account of the Bank or
Participant, from time to time as specified by the Bank or such Participant but
not earlier than 30 days after notice and demand to the Company, such an amount
or amounts as will compensate the Bank or such Participant for such additional
cost, reduc-
10
tion or payment, together with interest on such amount from, but including, the
day specified by such Bank or such Participant for payment at the Bank Rate.
(b) The protections of this Section shall be available to the Bank
and the Participants regardless of any possible contention of invalidity or
inapplicability of the law, regulation or condition which has been imposed;
provided, however, that if it shall be later determined that any amount so paid
by the Company pursuant to this Section is in excess of the amount payable under
the provisions hereof, the Bank or such Participant, as the case may be, shall
refund such excess amount to the Company as soon as practicable; provided
further, however, if such excess amount is not refunded as of the thirtieth day
following actual notice by the Bank or a Participant of such excess amount then
due, such amount owing to the Company shall earn interest at the Bank Rate until
paid in full.
(c) Notwithstanding anything in this Section to the contrary, if such
costs are to be incurred on a continuing basis and the Bank or a Participant
shall notify the Company in writing as to the amount thereof, such costs shall
be paid by the Company monthly in arrears.
2.7 Taxes.
(a) Except as required by law, all payments made by the Company under
this Agreement shall be made free and clear of, and without reduction for or on
account of, any present or future taxes, levies, imposts, duties, charges, fees,
deductions, or withholdings, imposed, levied, collected, withheld or assessed by
any Governmental Authority after the Date of Issuance as a result of the
adoption of or any change in any law, treaty, rule, regulation, guideline or
determination of such Governmental Authority, but excluding net income,
franchise and branch profits taxes, imposed on the Bank or a Participant by (i)
the United States of America or any taxing authority thereof or therein or (ii)
the jurisdiction under the laws of which the Bank or any Participant is
organized or in which it has its principal office or is managed and controlled
or any political subdivision or taxing authority thereof or therein. If any
Taxes are required to be withheld from any amounts payable to the
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Bank or any Participant the amounts so payable to the Bank or any such
Participant shall be increased to the extent necessary to yield to the Bank or
any such Participant (after payment of all Taxes, including Taxes attributable
to such increase, and free and clear of all liability, including, without
limitation, interest and penalties, in respect of such Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement. Whenever any Taxes are payable by the Company, as promptly as
possible thereafter, the Company shall pay such Taxes. If the Company fails to
pay Taxes when due to the appropriate taxing authority the Company shall
indemnify the Bank or any Participant for any incremental Taxes, interest or
penalties that may become payable by the Bank or any such Participant as a
result of any such failure together with any expenses payable by the Bank or any
such Participant in connection therewith. If the Company is required to make
any additional payment to the Bank or any Participant pursuant to this Section
2.7, and the Bank or any such Participant receives, or is entitled to receive, a
credit against or relief or remission for, or repayment of, any tax paid or
payable by it in respect of, or calculated with reference to the Taxes giving
rise to such payment, the Bank or any such Participant shall, within a
reasonable time of the earlier of the date that it receives or is entitled to
receive such credit, relief, remission or repayment, use its reasonable efforts
to reimburse the Company the amount of any such credit, relief, remission or
repayment to the extent not inconsistent with the Banks' or any such
Participants' internal policies.
(b) Prior to or at the Date of Issuance, (i) the Bank and each
Participant shall deliver to the Company two duly completed copies of the United
States Internal Revenue Service Form 1001 or 4224 or successor applicable form,
as the case may be, certifying in each case that the Bank and each Participant
are entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) the Bank and
each Participant will deliver to the Company an Internal Revenue Service Form W-
8 or W-9 or successor applicable form, as the case may be, to establish an
exemption from United States backup withholding tax. The Bank and each
Participant further undertake, if requested by the Company, to deliver to the
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Company two further copies of said statement or Form 1001 or 4224 and Form W-8
or W-9, or successor applicable forms, or other manner of certification, as the
case may be, on or before the date that any such statement or form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent statement or form previously delivered by it to the Company, and
such extension or renewals thereof as may reasonably be requested by the
Company, certifying in the case of a Form 1001 or 4224 that the Bank and each
Participant are entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, unless in
any such case any change in treaty, law or regulation has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent the Bank or any Participant from
duly completing and delivering any such statement or form with respect to it and
the Bank and each Participant advise the Company that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax and, in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax. The Company shall not be required to pay
any increased amount on account of Taxes pursuant to this Section 2.7 to the
Bank or any Participant that fails to furnish any form or statement that it was
required to furnish in accordance with this Section 2.7, and, to the extent
required by law, the Company shall be entitled to deduct Taxes from the payments
owed to the Bank or any of the Participants.
2.8 Availability of Rate Options. If the Bank or any Participant
determines that maintenance of its Letter of Credit Advance at a suitable
Lending Office would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or determines that (i) deposits of a
type and maturity appropriate to match fund any Letter of Credit Advance are not
available or (ii) the Eurodollar Rate portion of the Bank Rate does not
accurately reflect the cost of making or maintaining any Letter of Credit
Advance, then (unless such unavailability or inaccuracy results solely from a
deterioration in the creditworthiness of the Bank or such Participant subsequent
to the date hereof) the Bank or any such Participant shall suspend the
availability of Bank Rate from the Bank or any such Participant
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and require the interest rate applicable to any Letter of Credit Advance by the
Bank or any such Participant then outstanding to be changed to the Base Rate
plus the Applicable Floating Rate Margin.
2.9 Funding Indemnification. If any payment in respect of any Letter
of Credit Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of prepayment or otherwise, the Company will
indemnify the Bank and any Participant for any loss or cost incurred by it
resulting therefrom upon request by the Bank or any such Participant accompanied
by a certificate complying with Section 2.6(a)(iii)(2).
2.10 Manner and Place of Payments; Interest Calculation; Overdue
Amounts.
(a) All payments by the Company under this Agreement shall be made to
the Bank in lawful money of the United States and in immediately available funds
to Bankers Trust, New York ABA No. 02100-1033, Credit to Banque Paribas, New
York, Account No. 00000000, with further credit to Banque Paribas, Chicago
Branch, Reference: Jacor, Attention: Letter of Credit Department, or to such
other account as Banque Paribas may from time to time designate in writing to
the Company (the "Payment Account").
(b) All payments by the Company hereunder shall be made to the Bank
not later than 1:00 p.m., New York City time, to its Payment Account. If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day.
(c) Except as may be otherwise provided, interest and fees payable
hereunder shall be calculated on the basis of a year of 360 days based on the
actual number of days elapsed.
(d) Whenever a payment is due to the Bank under this Agreement, the
Company shall be deemed to have made such payment at the time such payment is
actually received by the Bank.
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(e) All overdue amounts under this Agreement, shall bear interest
at the Bank Rate from the date such amount comes due until paid in full.
2.11 L/C Providers. The parties hereby agree that the Bank and each
of the Participants are L/C Providers at such term is used in the Credit
Agreement and the other Documents. In addition, the parties hereby acknowledges
that the Bank shall be entitled to act as Agent for the L/C Providers under all
of the Documents including the Collateral Documents as contemplated therein.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Bank to enter into this Agreement and issue the
Letter of Credit, the Company represents and warrants as of the Date of
Issuance, with respect to itself, this Agreement and certain matters as follows:
(a) Power and Authority. The Company has and had full power, right
and authority to enter into and deliver this Agreement and any and all of the
Documents required to be executed, adopted or delivered pursuant to or in
connection herewith or therewith and to perform each and all of the matters and
things herein and therein provided for.
(b) The execution and delivery by the Company of the Documents to
which it is a party, and the performance of its obligations thereunder, have
been duly authorized by necessary corporate proceedings, and the Documents to
which it is a party constitute legal, valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
(c) Approvals. The Company has taken all requisite action to
authorize or approve, as appropriate, the execution or adoption, issuance and
delivery of, and the performance of its obligations under, this Agreement and
any and all of the Documents required to be executed,
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adopted or delivered pursuant to or in connection herewith or therewith.
(d) Contravention. The execution or adoption, delivery and
performance by the Company of its obligations under this Agreement and any and
all of the Documents required to be executed in connection herewith or
therewith, were and are within the powers of the Company and will not violate
any provision of any applicable law, regulation, decree or governmental
authorization, and will not violate or cause a default under any provision of
any contract, agreement, mortgage, indenture or other undertaking to which it is
a party or which is binding upon it or any of its property or assets, and will
not result in the imposition or creation of any lien, charge, or encumbrance
upon or invalidate or adversely impact in any way the Collateral all as provided
in the Credit Agreement pursuant to the provisions of any such contract,
agreement, mortgage, indenture or undertaking.
(e) Compliance; No Breach. The Company is in compliance with the
terms and conditions of this Agreement and the other Documents and no breach of
the terms hereof has occurred and is continuing, and no event, act or omission
has occurred and is continuing which, with the lapse of time, the giving of
notice, or both, would constitute a breach of the terms hereof or thereof.
(f) Disclosure. Neither this Agreement nor any other Document,
certificate or statement (including the unaudited financial statements of the
Company and the projections of revenues and receipts and cash flows of the
Company) furnished to the Bank by or on behalf of the Company in connection with
the transactions contemplated hereby or thereby contains any untrue statement of
any material fact or omits to state any material fact necessary so as to make
the statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
(g) Consents. The Company hereby represents that it has obtained all
approvals and consents under the Credit Agreement required for the execution,
delivery and performance of the Documents.
16
(h) Incorporation of Representations and Warranties by Reference.
The Company hereby makes to the Bank and each Participant the same
representations and warranties made by the Company in the Credit Agreement and
the other Documents (other than those representations and warranties which speak
as of a date different than the Date of Issuance, which the Company hereby
represents and warrants are true and correct as of the date such representations
speak), which representations and warranties, as well as the related defined
terms contained therein, are hereby incorporated by reference for the benefit of
the Bank and each Participant with the same effect as if each and every such
representation and warranty and defined term were set forth herein in its
entirety. No amendment to such representations and warranties or defined terms
or termination of the Credit Agreement shall be effective to amend such
representations and warranties and defined terms as incorporated by reference
herein or terminate the same, as the case may be, without the prior written
consent of the Bank.
Section 4. CONDITIONS PRECEDENT TO ISSUANCE OF THE LETTER OF CREDIT
4.1 Date of Issuance. The obligation of the Bank to issue the Letter
of Credit shall be subject to the fulfillment of the following conditions
precedent on or before the Date of Issuance, in a manner satisfactory to the
Bank and its counsel:
(a) The Bank shall have received an opinion from counsel to the
Company dated the Date of Issuance in form satisfactory to the Bank and
its counsel.
(b) The Bank shall have received an executed original or copy of
each of the Documents and certified copies of all other documents and
certificates delivered in connection therewith;
(c) The Bank shall have received (i) a certificate of the
Company dated the Date of Issuance certifying the names and true signatures
of the officers of the Company authorized to execute, on behalf of the
Company, this Agreement, and (ii) a certified copy of the
17
resolutions of the Company authorizing the execution and delivery of this
Agreement;
(d) (i) The representations and warranties set forth in Section
3 of this Agreement, the Credit Agreement and in the Collateral Documents
shall be true and correct in all material respects as of the Date of
Issuance other than those representations and warranties which speak as of
a different date (which shall be true and correct as of such different
date); (ii) no material adverse change shall have occurred in the condition
(financial or otherwise) of the Company between the date of the Company's
most recent audited financial statements and the Date of Issuance, and on
or prior to the Date of Issuance, no transactions or obligations having a
material adverse effect on the financial condition or operations of the
Company shall have been entered into by the Company subsequent to the date
of the Company's most recent audited financial statements; (iii) on the
Date of Issuance no Event of Default, and no event, act or omission which
with notice, lapse of time or both would constitute an Event of Default,
shall have occurred and be continuing; and (iv) the Company shall have
delivered to the Bank a certificate, to the effect of the immediately
preceding clauses (i) through (iii), which certificate shall be dated the
Date of Issuance;
(e) All other legal matters pertaining to the execution and
delivery of this Agreement shall be reasonably satisfactory to the Bank and
its counsel;
(f) The Company shall have made payment of all Letter of Credit
Fees due on the Date of Issuance under Section 2.3(a) and 7.6; and
(g) The Bank shall have received such other documents,
certificates, opinions, approvals and filings with respect to this
Agreement as the Bank may reasonably request.
Section 5. COVENANTS OF THE COMPANY
So long as the Letter of Credit is outstanding and until all
Reimbursement Obligations shall have been paid in full, the Company shall do the
following:
18
5.1 Affirmative Covenants.
(a) Compliance with Documents. The Company agrees that it will
perform and comply with each and every covenant and agreement required to be
performed or observed by it in the Credit Agreement and the other Documents,
which provisions, as well as related defined terms contained therein, are hereby
incorporated by reference herein with the same effect as if each and every such
provision were set forth herein in its entirety all of which shall be deemed to
be made for the benefit of the Bank and each Participant and shall be
enforceable against the Company. To the extent that any such incorporated
provision permits any party thereto to waive compliance with such provision or
requires that a document, opinion or other instrument or any event or condition
be acceptable or satisfactory to any party thereto, for purposes of this
Agreement such provision shall not be complied with only if it is specifically
waived by the Bank in writing and such document, opinion or other instrument and
such event or condition shall be acceptable or satisfactory only if it is
acceptable or satisfactory to the Bank which shall only be evidenced by the
Bank's written approval of the same. No termination or amendment to such
covenants and agreements or defined terms or release of the Company with respect
thereto made pursuant to the Credit Agreement and the other Documents shall be
effective to terminate or amend such covenants and agreements and defined terms
or release of the Company with respect thereto as incorporated by reference
herein without the prior written consent of the Bank. Notwithstanding any
termination or expiration of any such Document, the Company shall continue to
observe the covenants therein contained for the benefit of the Bank and the
Participants until the termination of this Agreement. All such incorporated
covenants shall be in addition to the express covenants contained herein and
shall not be limited by the express covenants contained herein nor shall such
incorporated covenants be a limitation on the express covenants contained
herein.
(b) Further Assurances. From time to time hereafter, the Company
will execute and deliver such additional instruments, certificates or documents,
and will take all such actions as the Bank and the Participants may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement
19
for the purpose of more fully perfecting or renewing the Bank and the
Participants' rights with respect to the rights, properties or assets subject to
such documents (or with respect to any additions thereto or replacements or
proceeds thereof or with respect to any other property or assets hereafter
acquired by the Company which may be deemed to be a part thereof) pursuant
hereto or thereto. Upon the exercise by the Bank or any Participant of any
power, right, privilege or remedy pursuant to this Agreement which requires any
consent, approval, registration, qualification or authorization of any
governmental authority or instrumentality, the Company will, to the extent
permitted by law, execute and deliver all necessary applications,
certifications, instruments and other documents and papers that the Bank or any
of the Participants may be required to obtain for such governmental consent,
approval, registration, qualification or authorization.
Section 6. EVENTS OF DEFAULT
If any of the following Events of Default shall occur and be
continuing:
(a) The Company shall fail to pay, or cause to be paid, when due
any Reimbursement Obligation; or
(b) A "default" shall occur and be continuing under the Credit
Agreement or any of the other Documents (regardless of whether or not such
agreement shall have been terminated and regardless of whether or not such
default shall have been waived under any such agreement); or
(c) The Company shall default in the performance of any other
covenant or agreement contained in this Agreement and such default shall
continue for 7 days after written notice of such default shall have been given
to the Company by the Bank; or
(d) Any representation or warranty on the part of the Company
contained or incorporated in this Agreement, shall at any time prove to have
been incorrect in any material respect when made or when effective or when
reaffirmed, as the case may be; or
20
(e) Any provision of this Agreement or any other Document shall at
any time for any reason cease to be valid and binding on the Company or shall be
declared to be null and void by any court or governmental authority or agency
having jurisdiction over the Company, or the validity or the enforceability
thereof shall be contested by the Company, in a judicial or administrative
proceeding;
then, and in any such event, the Bank may (but shall not be obligated to), at
the same or different times, so long as such Event of Default shall not have
been remedied to the sole satisfaction of the Bank, (i) demand that all amounts
outstanding hereunder be paid in full immediately or (ii) proceed to enforce all
remedies available under the Credit Agreement and the other Documents and under
applicable law and in equity, including but not limited to the right to seek
mandamus or (iii) notify the Escrow Agent of the occurrence of an Event of
Default hereunder and that the Letter of Credit will expire in accordance with
its terms.
Section 7. MISCELLANEOUS
7.1 Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by the parties hereto shall in any event
be effective unless the same shall be in writing and signed by such parties, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. The obligation of the Bank under the
Letter of Credit shall not be released or terminated, except as specified
herein.
7.2 Addresses for Notices. Any notice required or permitted to be
given under or in connection with this Agreement shall be in writing and shall
be mailed by first-class mail, registered or certified, return receipt
requested, or express mail, postage prepaid, or sent by telex, telegram,
telecopy or other similar form of rapid transmission confirmed by mailing (by
first-class mail, registered or certified, return receipt requested, or express
mail, postage prepaid) written confirmation at substantially the same time as
such rapid transmission, or personally delivered to an officer of the receiving
party. All such communications
21
shall be mailed, sent or delivered to the address or numbers set forth below, or
as to each party at such other address or numbers as shall be designated by such
party in a written notice to the other party.
(i) If to the Company:
1300 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn.: R. Xxxxxxxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with copies to:
Xxxxx X. Xxxxxxxxx,
Xxxxxxxxx & Xxxxxxxxxxx,
0 Xxxxx Xxxxxxxxx Xxxxx,
Xxxxx 000,
Xxxxxxx, Xxxxxxxx 00000.
(ii) If to Banque Paribas:
000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn.: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
7.3 No Waiver; Remedies. No failure on the part of any party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other further exercise thereof or the exercise of any other right.
The rights herein provided are cumulative and not exclusive of any rights
provided by law.
7.4 Indemnification. The Company hereby agrees to indemnify and hold
harmless the Bank and the Participants from and against (i) any and all claims,
damages, losses, liabilities, costs or expenses whatsoever which the Bank or any
Participant may incur (or which may be claimed against the Bank or any
Participant by any Person or entity whatsoever) by reason of or in connection
with the execution and delivery of this Agreement and the Letter of Credit;
provided, however, that the
22
Company shall not be required to indemnify the Bank or any Participant for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by (a) the willful misconduct or gross negligence of the
Bank or any Participant in determining whether a sight draft or certificate
presented under the Letter of Credit complied with the terms of the Letter of
Credit or (b) the Bank or Participants' willful failure or gross negligence in
failing to pay under the Letter of Credit after the presentation to them by the
Escrow Agent (or a successor escrow agent under the Escrow Agreement to whom the
Letter of Credit has been transferred in accordance with its terms) of a sight
draft and certificate strictly complying with the terms and conditions of the
Letter of Credit; and (ii) any and all fees and expenses, including taxes and
recording costs or charges, if any, payable or incurred by the Bank or any
Participant in connection with the performance, administration and enforcement
of this Agreement and any amendments, modifications, supplements, consents and
waivers with respect hereto, including without limitation the fees and expenses
of counsel to the Bank and each Participant, and agrees to save the Bank and
each Participant harmless from and against any and all liabilities with respect
to or resulting from any delay in paying or omission to pay such fees, expenses,
taxes, costs and charges, if any, provided that the Bank and each Participant
agrees promptly to notify the Company of any such fees, expenses and taxes, if
any. Nothing in this Section 7.4 is intended to limit any other obligations of
the Company contained in this Agreement. The provisions of this Section 7.4
shall survive the termination of this Agreement.
The Bank and each Participant shall, promptly after the receipt of
notice of the commencement of any action against the Bank or such Participant in
respect of which indemnification may be sought against the Company, notify the
Company in writing of the commencement thereof. In case any such action shall
be brought against the Bank or such Participant, the Bank shall notify the
Company of the commencement thereof, the Company may, or if so requested by the
Bank or such Participant shall, participate therein or assume the defense
thereof, with counsel reasonably satisfactory to the Bank or such Participant,
and after notice from the Company to the Bank or such Participant of an election
to so assume the defense thereof, the Company will not be liable to the
23
Bank or such Participant under this paragraph for any legal or other expenses
subsequently incurred by the Bank or such Participant in connection with the
defense thereof; provided, however, that unless and until the Company assumes
the defense of any such action at the request of the Bank or such Participant,
the Company shall have the right to participate at its own expense in the
defense of any such action. If the Company shall not have employed counsel to
have charge of the defense of any such action or if the Bank or such Participant
shall have reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to the Company
(in which case the Company shall not have the right to direct the defense of
such action on behalf of the Bank or such Participant), legal and other expenses
incurred by the Bank or such Participant shall be borne by the Company. The
Company shall not be liable for any settlement of any such action effected
without the consent of the Company but if settled with the consent of the
Company or if there is a final judgment for the plaintiff in any such action,
the Company will reimburse and hold harmless the Bank or such Participant from
and against any loss or liability by reason of such settlement or judgment
insofar as such settlement or judgment shall relate to any liability with
respect of which indemnity may be sought hereunder.
7.5 Successors and Assigns. This Agreement shall (a) be binding upon
the Company and its assigns, and (b) inure to the benefit of and be enforceable
by the Bank and its successors; provided that the Company may not assign all or
any part of this Agreement without the prior written consent of the Bank. The
Bank shall at all times, have the right to sell, at a price or prices which such
selling Bank in its sole discretion shall determine, all or any portion of its
interest in the Letter of Credit.
7.6 Fees and Expenses. The Company shall pay at closing any and all
reasonable out-of-pocket fees, expenses and documentary stamp, intangible and
other similar taxes, if any, of the Bank and each Participant (including
reasonable fees, office charges and expenses of counsel to the Bank and each
Participant) payable in connection with the preparation, execution and delivery
of this Agreement.
24
7.7 Severability. Any provision of this Agreement which is
prohibited, unenforceable or not authorized in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
7.8 Right of Set-Off. Upon the occurrence and during the continuance
of any failure by the Company to make payment to the Bank or any Participant of
any Reimbursement Obligation due hereunder, the Bank or any such Participant is
hereby authorized at any time and from time to time, without notice to the
Company (any such notice being expressly waived by the Company) and to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by the Bank or any such Participant to or
for the credit or the account of the Company against any and all of the
obligations of the Company now or hereafter existing under this Agreement,
irrespective of whether or not the Bank or such Participant shall have made any
demand hereunder or thereunder and although such obligations may be unmatured.
7.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
7.10 Headings. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose.
7.11 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which counterparts, taken together, shall constitute but one and the same
Agreement.
7.12 Termination. Subject to Section 7.4 hereof, this Agreement
shall remain in full force and effect until all payment obligations of the
Company hereunder have been paid in full.
25
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
JACOR COMMUNICATIONS, INC.
By /s/ Xxxxx Xxxxxxxx
-------------------------
Name: Xxxxx Xxxxxxxx
Title: President
By /s/ Xxx X. Xxxxx
-------------------------
Name: Xxx X. Xxxxx
Title: S.V.P. and Treasurer
BANQUE PARIBAS
By /s/ Xxxxxx X. Xxxxxx
-------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
By /s/ Xxxx X. Xxxxxx
-------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
26
EXHIBIT A Form of Letter of Credit
IRREVOCABLE LETTER OF CREDIT
BANQUE PARIBAS, CHICAGO BRANCH
No. 21388/96
March 13, 1996
PNC Bank, Ohio, N.A.
as Escrow Agent and beneficiary
under the Escrow Agreement dated
March 13, 1996 among the Escrow
Agent, Jacor Communications, Inc.
and Citicasters Inc.
000 Xxxx Xxxxx Xxxxxx
Corporate Trust Department
Third Floor
Cincinnati, OH 45202
Ladies and Gentlemen:
At the request and on the instructions of our customer, Jacor
Communications, Inc. (the "Company"), Banque Paribas, acting through its Chicago
Branch (the "Bank") hereby establishes (subject to the limitations as
hereinafter set forth) in your favor, as Escrow Agent under the Escrow Agreement
referred to above (the "Escrow Agreement"), our irrevocable letter of credit No.
21388/96 (the "Letter of Credit"), in the amount of U.S. $75,000,000 (the
"Letter of Credit Amount"), effective immediately and expiring at the close of
business at the Chicago office of the Bank on June 3, 1997 (the "Stated
Termination Date") unless earlier terminated as set forth herein.
We hereby irrevocably authorize you to draw on us by presentation, in
accordance with the terms and conditions hereunder set forth, of this original
Letter of Credit together with your single demand for payment in
the form of Annex A hereto (the "demand for payment") on your letterhead with
all blanks appropriately filled in and alternatives designated and signed by
your duly authorized officer, an aggregate amount not to exceed the Letter of
Credit Amount. Your right to draw funds hereunder shall terminate on the
earlier of (i) the Stated Termination Date or (ii) seven business days after
your receipt of written notice from us of the occurrence of an Event of Default
under the Letter of Credit and Reimbursement Agreement, dated as of March 13,
1996, between the Company and us or (iii) our honoring of the single demand for
payment, such earliest date being the "Expiration Date".
Subject to the foregoing and further provisions of this Letter of
Credit, funds under this Letter of Credit are available to you against your
presentation of this original Letter of Credit together with your demand for
payment which shall be made by hand delivery at the Chicago office of the Bank
located at 000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attn:
Letter of Credit Department, or at such other place which may be designated by
the Bank by written notice delivered to you.
We hereby engage with you that to the extent of our liability as
provided herein, the single demand for payment made under and in compliance with
the terms of this Letter of Credit will be duly honored by us upon delivery of
this original Letter of Credit together with your demand for payment as
specified at the Bank's office not later than the Expiration Date. If such
demand for payment is made hereunder at or prior to 12:00 noon, Chicago time, on
a business day, and provided that such demand for payment and the documents
presented in connection therewith conform to the terms and conditions hereof,
payment shall be made of the amount specified in immediately available funds, no
later than 1:00 p.m., Chicago time, on the next succeeding business day. If
such demand for payment is received after 12:00 noon Chicago time, such demand
for payment shall be deemed to have been received at the opening of business at
the Chicago office of the Bank on the next succeeding business day. If a demand
for payment made by you hereunder does not, in any instance, conform to the
terms and conditions of this Letter of Credit, we shall give you prompt notice
that the demand for payment was not effect-
2
ed in accordance with the terms and conditions of this Letter of Credit, stating
the reasons therefor and that we will upon your instructions hold any documents
at your disposal or return the same to you. Upon being notified that the demand
for payment was not effected in conformity with this Letter of Credit, you may
attempt to correct any such nonconforming demand for payment to the extent that
you are entitled to do so; provided, however, that so long as such nonconforming
demand for payment was presented at the Bank's Chicago office not later than the
Expiration Date, you shall have up to two (2) business days after the Expiration
Date to correct such nonconforming demand for payment.
Payment under this Letter of Credit shall be made by us by wire
transfer of immediately available funds, to PNC Bank, Ohio, N.A., A.B.A. No.
000-000-000, Acct. No. 105-1395, Ref: Jacor Communications, Attn: Xxxx Xxxxxx,
Corporate Trust Department, Telephone: (000) 000-0000, Facsimile: (513) 651-
7901. Such account may be changed only by presentation to the Bank of a letter
specifying a different account with the Escrow Agent and executed by the Escrow
Agent. As used in this Letter of Credit "business day" shall mean any day on
which banks generally located in Chicago, Illinois and in the jurisdiction in
which the principal office of the Escrow Agent is located are not required or
authorized by law to remain closed.
Only the Escrow Agent may make a demand for payment under this Letter
of Credit. Upon payment as provided herein of the amount specified in the
demand for payment, we shall be fully discharged of our obligation under this
Letter of Credit and this Letter of Credit shall be retained by us for
cancellation.
The demand for payment hereunder shall not exceed the Letter of Credit
Amount.
This Letter of Credit shall be governed by and shall be deemed a
contract under and shall be construed in accordance with the laws of the State
of Illinois, including, without limitation, Article 5 of the Uniform Commercial
Code as in effect in the State of Illinois. Unless otherwise specified herein,
communications with respect to this Letter of Credit shall be in writing on your
letterhead and shall be directed to the Bank at 227
0
Xxxx Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attn: Letter of Credit
Department, specifically referring thereon to this Letter of Credit by number.
You may transfer your rights under this Letter of Credit in their
entirety (but not in part) to any transferee who has succeeded to you as Escrow
Agent under the Escrow Agreement and such transferred rights may be successively
transferred. Transfer of your rights under this Letter of Credit to any such
transferee shall be effected upon the presentation to the Bank of this Letter of
Credit accompanied by a transfer letter in the form attached hereto as Annex B.
Upon such transfer, at the option of the Bank, this Letter of Credit shall be
returned and amended to reflect the new transferee.
4
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein
(including, without limitation, the Escrow Agreement), except only the
certificates and letters referred to herein; and no such reference shall be
deemed to incorporate herein by reference any document, instrument or agreement.
Very truly yours,
BANQUE PARIBAS, CHICAGO BRANCH
By:_____________________________
Name:
Title:
By:_____________________________
Name:
Title:
5
ANNEX A TO
IRREVOCABLE LETTER OF CREDIT
BANQUE PARIBAS
NO. 21388/96
[LETTERHEAD OF ESCROW AGENT]
[DATE]
Banque Paribas, Chicago Branch
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Letter of Credit Department
Re: Certificate and Demand for Payment
----------------------------------
Ladies Gentlemen:
PNC Bank, Ohio, N.A. (the "Escrow Agent") hereby certifies to Banque
Paribas, Chicago Branch, with reference to the Irrevocable Letter of Credit No.
21388/96 issued by the Bank, dated March 13, 1996 (the "Letter of Credit";
unless otherwise specified, capitalized terms contained herein are used as
defined or otherwise referenced in the Letter of Credit), that:
1. The Escrow Agent is the Escrow Agent or a successor escrow agent
under the Escrow Agreement.
2. The Escrow Agent is making a drawing under the Letter of Credit in
the amount of $75,000,000.
[Select one of the two alternate paragraph 3's]
6
3. [The Escrow Agent has received written notice from Citicasters
Inc. that an Escrow-Surrender Event, as defined in the Escrow Agreement has
occurred (a copy of which notice is attached hereto) and the drawing hereunder
is required to be made pursuant to Section 4 of the Escrow Agreement.]
[or alternatively]
[The Letter of Credit will expire or terminate pursuant to its terms
on _________ and the drawing hereunder is required to be made pursuant to
Section 2 of the Escrow Agreement.]
4. The amount hereby demanded does not exceed the Letter of Credit
Amount.
5. Upon honoring of the demand for payment made hereby, the Letter of
Credit shall automatically terminate and no further amounts may be drawn
thereunder.
6. The proceeds of the drawing hereunder shall be applied by the
Escrow Agent in accordance with the Escrow Agreement.
7. In connection with honoring this drawing, the Bank shall retain
the original Letter of Credit presented with this demand for payment for
cancellation.
IN WITNESS WHEREOF, the Escrow Agent has executed and delivered this
Certificate by its duly authorized officer on the ___ day of __________, 19__.
PNC Bank, Ohio, N.A.,
as Escrow Agent
By____________________________
7
ANNEX B TO
IRREVOCABLE LETTER OF CREDIT
BANQUE PARIBAS
NO. 21388/96
[LETTERHEAD OF ESCROW AGENT]
[DATE]
Banque Paribas, Chicago Branch
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Letter of Credit Department
Re: Transfer of Irrevocable Letter of Credit
Xx. 00000/00 dated March 13, 1996
---------------------------------
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
-----------------------------
(Name of Transferee)
-----------------------------
(Address)
as successor Escrow Agent under the Escrow Agreement (as defined in the above-
referenced Letter of Credit) all rights of the undersigned beneficiary to draw
under the above-referenced Letter of Credit in its entirety.
8
By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the transferee and the transferee shall have
the sole rights as beneficiary thereof, including sole rights relating to any
amendments, whether increases or extensions, or other amendments and whether now
existing or hereafter made. All amendments are to be advised directly to the
transferee without necessity of any consent of or notice to the undersigned
beneficiary.
The original Letter of Credit (and any amendments thereto) is returned
herewith, and we ask you to endorse the transfer on the reference thereof, and
forward it directly to the transferee with your customary notice of transfer.
Very truly yours,
_________________________,
as Escrow Agent
By______________________________
9