EXHIBIT 10.1
CREDIT AND GUARANTY AGREEMENT
DATED AS OF MARCH 18, 1999
AMONG
AUDIO COMMUNICATIONS NETWORK, LLC,
AS BORROWER
MUZAK HOLDINGS LLC
AND
CERTAIN SUBSIDIARIES OF AUDIO COMMUNICATIONS NETWORK, LLC,
AS GUARANTORS,
VARIOUS LENDERS,
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
AS SYNDICATION AGENT,
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT,
AND
XXXXXXX SACHS CREDIT PARTNERS L.P.,
AND
CIBC XXXXXXXXXXX CORP.
AS CO-LEAD ARRANGERS
________________________________________________________
$230,000,000 SENIOR SECURED CREDIT FACILITIES
________________________________________________________
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND INTERPRETATION.................................. 2
1.1. Definitions..................................................... 2
1.2. Accounting Terms................................................ 41
1.3. Interpretation, Etc............................................. 42
SECTION 2. LOANS AND LETTERS OF CREDIT..................................... 42
2.1. Term Loans...................................................... 42
2.2. Revolving Loans................................................. 43
2.2A Letters of Credit............................................... 45
2.3. Pro Rata Shares; Availability of Funds.......................... 49
2.4. Use of Proceeds................................................. 50
2.5. Evidence of Debt; Register; Lenders' Books and Records.......... 50
2.6. Interest Payments............................................... 51
2.7. Conversion/Continuation......................................... 53
2.8. Default Interest................................................ 54
2.9. Fees............................................................ 54
2.10. Scheduled Payments/Reductions................................... 55
2.11. Voluntary Prepayments/Reductions................................ 56
2.12. Mandatory Prepayments/Reductions................................ 57
2.13. Application of Prepayments/Reductions; Prepayment Fee........... 59
2.14. Allocation of Certain Payments and Proceeds..................... 61
2.15. General Provisions Regarding Payments........................... 62
2.16. Ratable Sharing................................................. 63
2.17. Making or Maintaining Eurodollar Rate Loans..................... 64
2.18. Increased Costs; Capital Adequacy............................... 65
2.19. Taxes; Withholding, Etc......................................... 67
2.20. Obligation to Mitigate.......................................... 68
2.21. Defaulting Lenders.............................................. 69
2.22. Removal or Replacement of a Lender.............................. 70
SECTION 3. CONDITIONS PRECEDENT............................................ 71
3.1. Closing Date.................................................... 71
3.2. Conditions to Each Credit Extension............................. 76
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................. 77
4.1. Organization; Powers; Qualification; Capitalization............. 77
4.2. Valid Issuance.................................................. 78
4.3. Authorization of Credit Documents; No Conflict.................. 79
4.4. Governmental Consents........................................... 79
(i)
4.5. Binding Obligation.............................................. 79
4.6. Financial Statements; Projections............................... 79
4.7. No Material Adverse Effect; No Restricted Junior Payments....... 80
4.8. Adverse Proceedings, Etc........................................ 80
4.9. Payment of Taxes................................................ 80
4.10. Title to Properties; Intellectual Property...................... 80
4.11. Collateral...................................................... 82
4.12. Environmental................................................... 83
4.13. No Defaults; Material Contracts................................. 83
4.14. Governmental Regulation......................................... 84
4.15. Margin Stock.................................................... 84
4.16. Employee Matters................................................ 84
4.17. Employee Benefit Plans.......................................... 84
4.18. Certain Fees.................................................... 85
4.19. Solvency........................................................ 85
4.20. Related Agreements.............................................. 85
4.21. Year 2000 Issues................................................ 85
4.22. Disclosure...................................................... 86
4.23. No Burdensome Restrictions...................................... 86
4.24. Holdings........................................................ 86
SECTION 5. AFFIRMATIVE COVENANTS........................................... 87
5.1. Financial Statements and Other Reports.......................... 87
5.2. Existence....................................................... 91
5.3. Payment of Taxes and Claims..................................... 91
5.4. Maintenance of Properties....................................... 91
5.5. Insurance....................................................... 91
5.6. Inspections; Lenders Meetings................................... 92
5.7. Compliance with Laws; Contractual Obligations................... 92
5.8. Environmental................................................... 92
5.9. Subsidiaries.................................................... 92
5.10. Material Real Estate Assets..................................... 93
5.11. Interest Rate Protection........................................ 93
5.12. Year 2000 Issues................................................ 93
5.13. Further Assurances.............................................. 93
5.14. Other Transactions; Related Agreements.......................... 94
SECTION 6. NEGATIVE COVENANTS.............................................. 95
6.1. Indebtedness.................................................... 95
6.2. Liens........................................................... 97
6.3. Equitable Lien; No Further Negative Pledges..................... 99
6.4. Restricted Payments; Restrictions on Subsidiary Distributions... 99
6.5. Investments..................................................... 100
(ii)
6.6. Financial Covenants............................................. 101
6.7. Fundamental Changes; Disposition of Assets; Acquisitions........ 104
6.8. Disposal of Subsidiary Interests................................ 105
6.9. Sales and Lease-Backs........................................... 105
6.10. Sale or Discount of Receivables................................. 106
6.11. Transactions with Shareholders and Affiliates................... 106
6.12. Conduct of Business; Holdings................................... 106
6.13. Amendments or Waivers of Certain Related Agreements............. 106
6.14. Fiscal Year..................................................... 107
6.15. Corporate Separateness.......................................... 107
SECTION 7. GUARANTY........................................................ 108
7.1. Guaranty of the Obligations..................................... 108
7.2. Contribution by Guarantors...................................... 108
7.3. Payment by Guarantors........................................... 109
7.4. Liability of Guarantors Absolute................................ 109
7.5. Waivers by Guarantors........................................... 111
7.6. Guarantors' Rights of Subrogation, Contribution, Etc............ 111
7.7. Subordination of Other Obligations.............................. 112
7.8. Continuing Guaranty............................................. 112
7.9. Authority of Guarantors or Borrower............................. 113
7.10. Financial Condition of Borrower................................. 113
7.11. Bankruptcy, Etc................................................. 113
7.12. Notice of Events................................................ 114
7.13. Discharge of Guaranty Upon Sale of Guarantor.................... 114
SECTION 8. EVENTS OF DEFAULT............................................... 114
8.1. Events of Default............................................... 114
SECTION 9. AGENTS.......................................................... 117
9.1. Appointment of Agents........................................... 117
9.2. Powers and Duties............................................... 117
9.3. General Immunity................................................ 118
9.4. Agents Entitled to Act as Lender................................ 118
9.5. Lenders' Representations and Warranties......................... 119
9.6. Right to Indemnity.............................................. 119
9.7. Successor Administrative Agent.................................. 119
9.8. Collateral Documents and Guaranties............................. 120
SECTION 10. MISCELLANEOUS................................................... 121
10.1. Notices......................................................... 121
10.2. Expenses........................................................ 121
10.3. Indemnity....................................................... 122
(iii)
10.4. Set-Off......................................................... 122
10.5. Amendments and Waivers.......................................... 123
10.6. Successors and Assigns; Participations.......................... 125
10.7. Independence of Covenants....................................... 127
10.8. Survival of Representations, Warranties and Agreements.......... 128
10.9. No Waiver; Remedies Cumulative.................................. 128
10.10. Marshalling; Payments Set Aside................................. 128
10.11. Severability.................................................... 128
10.12. Obligations Several; Independent Nature of Lenders' Rights...... 128
10.13. Headings........................................................ 129
10.14. APPLICABLE LAW.................................................. 129
--------------
10.15. CONSENT TO JURISDICTION......................................... 129
-----------------------
10.16. WAIVER OF JURY TRIAL............................................ 129
--------------------
10.17. Confidentiality................................................. 130
10.18. Usury Savings Clause............................................ 130
10.19. Counterparts; Effectiveness..................................... 131
(iv)
APPENDICES: A Term Loan Amounts and Revolving Commitments
B Notice Addresses
SCHEDULES: 4.1 Organization, Etc.
4.10(b) Real Estate Assets
4.10(c) Intellectual Property; Proprietary Software; License
Agreements
4.13 Material Contracts
5.10 Material Real Estate Asset Requirements
6.1 Certain Indebtedness
6.2 Certain Liens
6.5 Certain Investments
EXHIBITS: A Funding Notice
B Conversion/Continuation Notice
C Compliance Certificate
D Issuance Notice
E Assignment Agreement
F Certificate Re Non-bank Status
G-1 Closing Date Certificate
G-2 Solvency Certificate
H Counterpart Agreement
I Pledge and Security Agreement
(v)
CREDIT AND GUARANTY AGREEMENT
This CREDIT AND GUARANTY AGREEMENT, dated as of March 18, 1999, is entered
into by and among AUDIO COMMUNICATIONS NETWORK, LLC, a Delaware limited
liability company ("BORROWER"), MUZAK HOLDINGS LLC, a Delaware limited liability
company ("HOLDINGS"), and CERTAIN DOMESTIC SUBSIDIARIES OF BORROWER, as
Guarantors, the Lenders party hereto from time to time, XXXXXXX XXXXX CREDIT
PARTNERS L.P. ("GSCP"), as Syndication Agent (in such capacity,"SYNDICATION
AGENT"), CANADIAN IMPERIAL BANK OF COMMERCE ("CIBOC"), as Administrative Agent
(together with its permitted successors in such capacity,"ADMINISTRATIVE
AGENT"), and GSCP and CIBC XXXXXXXXXXX CORP. ("CIBC"), as CO-LEAD ARRANGERS (in
such capacity, "CO-LEAD ARRANGERS").
RECITALS:
WHEREAS, capitalized terms used in these Recitals shall have the respective
meanings set forth for such terms in Section 1.1 hereof;
WHEREAS, Borrower is a Wholly-Owned Subsidiary of Holdings;
WHEREAS, pursuant to an Agreement and Plan of Merger dated as of January
29, 1999 (the "MERGER AGREEMENT") among Borrower, Holdings, Muzak Limited
Partnership ("MLP"), MLP Acquisition, L.P. and Music Holdings Corp., MLP shall
be merged with and into Borrower, with Borrower as the surviving entity in such
merger (the "MERGER");
WHEREAS, Borrower will change its name to Muzak LLC and Holdings will
change its name to Muzak Holdings LLC at the time of the Merger;
WHEREAS, Lenders have agreed to extend certain credit facilities to
Borrower, in an aggregate amount not to exceed $230,000,000, consisting of
$30,000,000 aggregate principal amount of Tranche A Term Loans, $105,000,000
aggregate principal amount of Tranche B Term Loans, $60,000,000 aggregate
principal amount of Tranche C Term Loans (unless the Senior Subordinated Notes
are issued on or prior to the Closing Date) and up to $35,000,000 aggregate
principal amount of Revolving Loans, the proceeds of which will be used,
together with the Equity Contribution and the proceeds of the Senior
Subordinated Notes, if issued on or prior to the Closing Date, to pay the
approximately $127,500,000 Cash consideration in connection with the Merger (the
"MERGER CONSIDERATION"), to finance the Capstar Contribution (including payment
of an approximately $5,500,000 Cash purchase price adjustment to Capstar), to
repay Existing Debt, to pay Transaction Costs and for working capital and other
general business purposes of Borrower and its Included Subsidiaries, including
acquisitions and capital expenditures permitted hereunder;
WHEREAS, Borrower may issue and sell the Senior Subordinated Notes on or
prior to the Closing Date, and if the Senior Subordinated Notes are issued on or
prior to such date, the Tranche C Term Loan Commitment of each Lender will be
cancelled and the Tranche C Term Loans will not be made;
WHEREAS, after giving effect to the Transactions, Sponsors will own 73.2%
of the voting membership interests of Holdings, management will own
approximately 3.9% of the voting membership interests of Holdings, and Capstar
will own approximately 22.9% of the voting membership interests of Holdings;
WHEREAS, Borrower has agreed to secure all of its obligations hereunder by
granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on
all material intellectual property and all of its other real, personal and mixed
property (other than non-material real property), including a pledge of all of
the Capital Stock of each of its Domestic Subsidiaries that is a Guarantor and
65% of all the Capital Stock of each of its Foreign Subsidiaries; and
WHEREAS, Guarantors have agreed to guarantee the obligations of Borrower
hereunder and to secure all of their respective obligations hereunder by
granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on
all material intellectual property and all of their other respective real,
personal and mixed property (other than non-material real property), including a
pledge of all of the Capital Stock of each of their respective Domestic
Subsidiaries (including Borrower but excluding Muzak Holdings Finance) and 65%
of all the Capital Stock of each of their respective Foreign Subsidiaries.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Guarantors, Lenders, and
Agents agree as follows:
SECTION 1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. The following terms used herein, including in the
preamble, recitals, exhibits and schedules hereto, shall have the following
meanings:
"ACKNOWLEDGMENT OF PLEDGE" as defined in the Pledge and Security Agreement.
"ACNI" means Audio Communications Network, Inc., a Florida corporation.
"ACQUISITION CASH FLOW" means for each acquired entity or assets an amount
calculated for such entity or assets on a non-consolidated basis in accordance
with the definition of "Adjusted Annualized Operating Cash Flow" and all
definitions included, directly or indirectly, in the calculation thereof,
provided that in connection with each such acquisition, Borrower shall deliver a
draft Compliance Certificate and a Compliance Certificate as set forth in the
definition of "Permitted Acquisition", each of which shall set forth in
reasonable detail the calculation of the
2
foregoing amount for such entity or assets, which calculation shall be
satisfactory to Administrative Agent in all respects.
"ADDITIONAL ACQUISITIONS" means (i) the acquisition on January 15, 1999 by
Borrower of all of the outstanding stock of BSI, (ii) the acquisition on
December 31, 1998 by MLP of certain of the assets and certain of the liabilities
of MTI and (iii) the acquisition on February 25, 1999 by Borrower of all of the
outstanding stock of Electro.
"ADDITIONAL ACQUISITION RELATED DOCUMENTS" means, collectively, (i) the
Asset Purchase Agreement dated October 28, 1998 between MLP and MTI, as amended
by the Amendment dated November 27, 1998, the Second Amendment dated December
23, 1998, and the Third Amendment dated December 30, 1998, (ii) the Stock
Purchase Agreement dated December 28, 1998 among Borrower, BSI and the
Shareholders of BSI and (iii) the Stock Purchase Agreement dated February 18,
1999 among Borrower, Electro and Carolina Georgia Sound, Inc., as the same may
be further amended, restated, supplemented or otherwise modified from time to
time (a) on or prior to the Closing Date pursuant to documentation in form and
substance reasonably satisfactory to Administrative Agent and Requisite Lenders
or (b) thereafter to the extent permitted under Section 6.13.
"ADJUSTED ANNUALIZED OPERATING CASH FLOW" means, for any Fiscal Quarter,
Annualized Operating Cash Flow for such Fiscal Quarter, adjusted to give effect
on a Pro Forma Basis to all acquisitions, Asset Sales and Franchise Additions
and Terminations made by Borrower and its Included Subsidiaries during such
Fiscal Quarter.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination Date
with respect to an Interest Period for a Eurodollar Rate Loan, the rate per
annum obtained by dividing (i) (a) the rate per annum equal to the rate
determined by Administrative Agent to be the offered rate which appears on the
page of the Telerate Screen which displays an average British Bankers
Association Interest Settlement Rate (such page currently being page number 3740
or 3750, as applicable) for deposits (for delivery on the first day of such
period) with a term equivalent to such period in Dollars, determined as of
approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the preceding
clause (a) does not appear on such page or service or if such page or service
shall cease to be available, the rate per annum equal to the rate determined by
Administrative Agent to be the offered rate on such other page or other service
which displays an average British Bankers Association Interest Settlement Rate
for deposits (for delivery on the first day of such period) with a term
equivalent to such period in Dollars, determined as of approximately 11:00 a.m.
(London, England time) on such Interest Rate Determination Date, or (c) in the
event the rates referenced in the preceding clauses (a) and (b) are not
available, the rate per annum equal to the offered quotation rate to first class
banks in the London interbank market by Administrative Agent for deposits (for
delivery on the first day of the relevant period) in Dollars of amounts in same
day funds comparable to the principal amount of the applicable Loan of
Administrative Agent, in its capacity as a Lender, for which the Eurodollar Rate
is then being determined with maturities comparable to such period as of
approximately 11:00 a.m.
3
(London, England time) on such Interest Rate Determination Date, by (ii) an
amount equal to (a) one minus (b) the Applicable Reserve Requirement.
-----
"ADMINISTRATIVE AGENT" as defined in the preamble hereto.
"ADVERSE PROCEEDING" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Holdings, Borrower or any
of their respective Subsidiaries) at law or in equity, or before or by any
Governmental Authority, domestic or foreign (including any Environmental
Claims), whether pending or, to the knowledge of Holdings, Borrower or any of
their respective Subsidiaries, threatened against or affecting Holdings,
Borrower or any of their respective Subsidiaries or any property of Holdings,
Borrower or any of their respective Subsidiaries.
"AFFECTED LENDER" as defined in Section 2.17(b).
"AFFECTED LOANS" as defined in Section 2.17(b).
"AFFILIATE", as applied to any Person, means any other Person directly or
indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AFFILIATE SALES" means Asset Sales by Borrower made in connection with and
as a result of Permitted Acquisitions consummated after the date hereof
consisting of sales of acquired accounts located in the "territory" or other
similar domain of any "Muzak" franchisee in accordance with, and to the extent
required by, the terms of such franchisee's franchise agreement.
"AGENT" means each of Syndication Agent, Administrative Agent and each Co-
Lead Arranger.
"AGGREGATE AMOUNTS DUE" as defined in Section 2.16.
"AGGREGATE PAYMENTS" as defined in Section 7.2.
"AGREEMENT" means this Credit and Guaranty Agreement dated as of March 18,
1999, as it may be amended, supplemented or otherwise modified from time to
time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greater of (i) the Prime Rate in effect on such day and (ii) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective day of such change in the
Prime Rate or the Federal
4
Funds Effective Rate, respectively.
"ALTERNATE BASE RATE LOAN" means a Loan bearing interest at a rate
determined by reference to the Alternate Base Rate.
"ANNUALIZED OPERATING CASH FLOW" means, for any Fiscal Quarter,
Consolidated Operating Cash Flow for such Fiscal Quarter, multiplied by four.
"APPLICABLE MARGIN'' means (i) with respect to Tranche A Term Loans and
Revolving Loans that are Eurodollar Rate Loans (a) from the Closing Date until
six months following the Closing Date, a percentage, per annum, determined by
reference to the following table as if the Total Leverage Ratio then in effect
was greater than 5.25:1.00; and (b) thereafter, a percentage, per annum,
determined by reference to the Total Leverage Ratio in effect from time to time
as set forth below:
===========================================================================
Tranche A Term Loans and Revolving Loans
---------------------------------------------------------------------------
Total Applicable Applicable
Leverage Alternate Base Rate Eurodollar Rate
Ratio Margin Margin
---------------------------------------------------------------------------
Greater than or equal to 5.25:1.00 2.00% 3.00%
---------------------------------------------------------------------------
Less than 5.25:1.00 1.75% 2.75%
Greater than or equal to 4.75:1.00
---------------------------------------------------------------------------
Less than 4.75:1.00 1.50% 2.50%
Greater than or equal to 4.25:1.00
---------------------------------------------------------------------------
Less than 4.25:1.00 1.25% 2.25%
Greater than or equal to 3.75:1.00
---------------------------------------------------------------------------
Less than 3.75:1.00 1.00% 2.00%
===========================================================================
(ii) with respect to Tranche B Term Loans (a) 3.50% per annum for Eurodollar
Rate Loans at any time after any High Yield Issuance and 3.75% for Eurodollar
Rate Loans at any time prior to any High Yield Issuance and (b) 2.50% per annum
for Alternate Base Rate Loans at any time after any High Yield Issuance and
2.75% for Alternate Base Rate Loans at any time prior to any High Yield Issuance
and (iii) with respect to Tranche C Team Loans (a) 3.375% per annum for
Eurodollar Rate Loans (b) and 2.375% per annum for Alternate Base Rate Loans.
After the six month anniversary of the Closing Date, the "Applicable Margin"
shall be determined by reference to the Total Leverage Ratio set forth in the
most recent Compliance Certificate delivered pursuant to Section 5.1(d);
thereafter, no change in the Applicable Margin with respect to Tranche A Term
Loans and Revolving Loans shall be effective until three Business Days after the
date on which Administrative Agent shall have received the applicable quarterly
financial statements and a Compliance Certificate pursuant
5
to Section 5.1(d) calculating such new Total Leverage Ratio. At any time
Borrower has not submitted to Administrative Agent the applicable information as
and when required under Section 5.1(d), the Applicable Margin shall be
determined as if the Total Leverage Ratio were in excess of 5.25:1.00. Promptly
following receipt of the applicable information as and when required under
Section 5.1(d), Administrative Agent shall give each Lender telefacsimile or
telephonic notice (confirmed in writing) of the Applicable Margin in effect from
such date.
"APPLICABLE REVOLVING COMMITMENT FEE PERCENTAGE" means (a) from the Closing
Date until six months following the Closing Date, a percentage, per annum,
determined by reference to the following table as if the Total Leverage Ratio
then in effect was greater than 5.00 to 1.00; and (b) thereafter, a percentage,
per annum, determined by reference to the Total Leverage Ratio in effect from
time to time as set forth below:
======================================================
Total Leverage Ratio Commitment Fee
------------------------------------------------------
Greater than or equal to 5.00 0.625%
------------------------------------------------------
Less than 5.00 0.500%
Greater than 4.00
------------------------------------------------------
Less than or equal to 4.00 0.375%
======================================================
After the six month anniversary of the Closing Date, the "Applicable Revolving
Commitment Fee Percentage" shall be determined by reference to the Total
Leverage Ratio set forth in the most recent Compliance Certificate delivered
pursuant to Section 5.1(d); thereafter, no change in the Applicable Revolving
Commitment Fee Percentage shall be effective until three Business Days after the
date on which Administrative Agent shall have received the applicable quarterly
financial statements and a Compliance Certificate pursuant to Section 5.1(d)
calculating such new Total Leverage Ratio. At any time Borrower has not
submitted to Administrative Agent the applicable information as and when
required under Section 5.1(d), the Applicable Revolving Commitment Fee
Percentage shall be determined as if the Total Leverage Ratio were in excess of
5.00:1.00. Promptly following receipt of the applicable information as and when
required under Section 5.1(d), Administrative Agent shall give each Lender
telefacsimile or telephonic notice (confirmed in writing) of the Applicable
Revolving Commitment Fee Percentage in effect from such date.
"APPLICABLE RESERVE REQUIREMENT" means, at any time, for any Eurodollar
Rate Loan the maximum rate at which reserves (including, without limitation, any
marginal, special, supplemental or emergency reserves) are required to be
maintained with respect thereto against "Eurocurrency liabilities" (as such term
is defined in Regulation D) under regulations issued from time to time by the
Board of Governors of the Federal Reserve System or other applicable banking
regulator. Without limiting the effect of the foregoing, the Applicable Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (i) any category of
6
liabilities which includes deposits by reference to which the applicable
Eurodollar Rate or any other interest rate of a Loan is to be determined, or
(ii) any category of extensions of credit or other assets which include
Eurodollar Rate Loans. A Eurodollar Rate Loan shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credit for proration, exceptions or offsets
that may be available from time to time to the applicable Lender. The rate of
interest on Eurodollar Rate Loans shall be adjusted automatically on and as of
the effective date of any change in the Applicable Reserve Requirement.
"ARTICLES OF MERGER" means the Certificate of Merger dated as of the date
hereof relating to the Merger, as such certificate may be amended from time to
time thereafter to the extent permitted pursuant to Section 6.13.
"ASSET SALE" means a sale, lease or sub-lease (as lessor or sublessor),
sale and leaseback, assignment, conveyance, transfer or other disposition to, or
any exchange of property with, any Person, in one transaction or a series of
transactions, of all or any part of Holdings', Borrower's or any of their
respective Subsidiaries' businesses, assets or properties of any kind
whatsoever, whether real, personal, or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, including, without limitation, Capital
Stock (including, without limitation, Capital Stock of any such Subsidiaries),
other than (i) inventory sold or a license granted in the ordinary course of
business and (ii) disposals of obsolete, worn out or surplus property.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement substantially in the
form of Exhibit E (with such amendments or modifications as may be approved by
Administrative Agent).
"AUTHORIZED OFFICER" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer, treasurer or controller.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BENEFICIARY" means each Agent, each Lender and each Lender Counterparty
party to an Interest Rate Agreement required pursuant to Section 5.11.
"BORROWER" as defined in the preamble hereto.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate or any Eurodollar Rate Loans, that is also a day for trading by and between
banks in Dollar deposits in the London interbank market.
7
"BSI" means Business Sound, Inc., an Ohio corporation.
"CAPITAL LEASE" means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is accounted for as a capital lease on the balance sheet of that
Person.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"CAPSTAR" means Capstar Broadcasting Corporation, a Delaware corporation.
"CAPSTAR CONTRIBUTION" means the contribution to Borrower of the three
"Muzak" franchises owned or to be acquired by Capstar pursuant to the Capstar
Documentation.
"CAPSTAR CONTRIBUTION AGREEMENT" means a Contribution Agreement among
Administrative Agent for the benefit of Lenders, ABRY Broadcast Partners III,
L.P., Holdings and Borrower that (i) is executed and in full force and effect on
or prior to the Closing Date, (ii) provides for the unconditional obligation by
ABRY Broadcast Partners III, L.P. to make capital contributions in an amount
equal to the Capital Contribution Amount (as defined in such Contribution
Agreement) to Holdings, which will have an unconditional obligation to make
capital contributions to Borrower, and the application of such contributions by
Borrower to the Obligations, in each case in such amounts and on such terms and
conditions as shall be satisfactory to Administrative Agent, provided that such
agreement will provide that on the earlier to occur of (a) the delivery of
notice by Borrower pursuant to Section 5.14 that the Capstar Omaha Contribution
will not be consummated and (b) December 31, 1999, if the Capstar Omaha
Contribution has not been consummated, each such capital contribution shall be
made so that Borrower receives additional Equity Capital, and (iii) is otherwise
in form and substance reasonably satisfactory to Administrative Agent.
"CAPSTAR DOCUMENTATION" means the Contribution Agreement dated February 19,
1999 between Capstar and Holdings relating to the Capstar Contribution, as
amended, restated, supplemented or otherwise modified from time to time (i) on
or prior to the Closing Date pursuant to documentation in form and substance
reasonably satisfactory to Administrative Agent and Requisite Lenders or (ii)
thereafter to the extent permitted under Section 6.13.
"CAPSTAR OMAHA CONTRIBUTION" means the contribution to Borrower of the
Omaha, Nebraska "Muzak" franchise.
"CASH" means money, currency or a credit balance in any Deposit Account.
8
"CASH EQUIVALENTS" means, as at any date of determination, (i) marketable
securities (a) issued or directly and unconditionally guaranteed as to interest
and principal by the United States Government or (b) issued by any agency of the
United States the obligations of which are backed by the full faith and credit
of the United States, in each case maturing within one year after such date;
(ii) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, a rating of at least A-1
from S&P or at least P-1 from Xxxxx'x; (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Xxxxx'x; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender, Xxxxx Brothers
Xxxxxxxx, or any commercial bank organized under the laws of the United States
of America or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; and (v) shares of any money market mutual fund
that (a) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Xxxxx'x.
"CERTIFICATE RE NON-BANK STATUS" means a certificate substantially in the
form of Exhibit F.
"CHANGE OF CONTROL" means, at any time, (i) Sponsors in the aggregate shall
cease to beneficially own and control at least 51% of the issued and outstanding
membership interests of Holdings entitled (without regard to the occurrence of
any contingency) to vote for the election of the Board of Directors; (ii)
Holdings shall cease to beneficially own and control all of the issued and
outstanding membership interests of Borrower; (iii) any "change of control" or
similar event under the Senior Subordinated Notes Related Documents or the
Holdings Note Related Documents shall occur; (iv) a majority of the Board of
Directors of Holdings shall not be Continuing Directors; or (v) a majority of
the voting power of the members of the Board of Directors of Borrower shall not
have been elected or nominated by Sponsors.
"CIBC" as defined in the preamble hereto.
"CIBOC" as defined in the preamble hereto.
"CLASS" means (i) with respect to Lenders, each of the following classes of
Lenders: (a) Lenders having Tranche A Term Loan Exposure, (b) Lenders having
Tranche B Term Loan Exposure, (c) Lenders having Tranche C Term Loan Exposure,
and (d) Lenders having Revolving Exposure, and (ii) with respect to Loans, each
of the following classes of Loans: (a) Tranche A Term Loans, (b) Tranche B Term
Loans, (c) Tranche C Term Loans, and (d) Revolving Loans.
"CLOSING DATE" means the date on which the Term Loans are made.
9
"CLOSING DATE CERTIFICATE" means a certificate substantially in the form of
Exhibit G.
"CLOSING DATE SPONSOR DEBT" as defined in the definition of "PERMITTED
SPONSOR SUBORDINATED DEBT".
"CO-LEAD ARRANGERS" as defined in the preamble.
"COLLATERAL" means, collectively, all of the real, personal and mixed
property (including Capital Stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL ACCOUNT" as defined in the Pledge and Security Agreement.
"COLLATERAL DOCUMENTS" means the Pledge and Security Agreement, the Capstar
Contribution Agreement and all other instruments, documents and agreements
delivered by any Credit Party pursuant to this Agreement or any of the other
Credit Documents in order to grant to Administrative Agent, on behalf of
Lenders, a Lien on any real, personal or mixed property of that Credit Party as
security for the Obligations.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form of
Exhibit C.
"CONSENT SOLICITATION" means, collectively, the offer by Borrower to
repurchase up to and including 100% of the outstanding Existing Senior Notes and
the consent solicitation by Borrower from the holders of outstanding Existing
Senior Notes of consents to certain amendments to the Existing Senior Note
Indenture, in each case as described in the Consent Solicitation Materials.
"CONSENT SOLICITATION MATERIALS" means, collectively, (i) the respective
Offer to Purchase and Consent Solicitation Statements dated February 8, 1999
made by Borrower in respect of the Existing Senior Notes and (ii) all related
documents and agreements, including the Dealer Manager Agreement dated February
8, 1999 among Borrower, CIBC and Xxxxxxx, Xxxxx & Co., as each may be amended,
restated, supplemented or otherwise modified from time to time (i) on or prior
to the Closing Date pursuant to documentation in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders or (ii) thereafter to
the extent permitted under Section 6.13.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the aggregate of
all expenditures of Borrower and its Included Subsidiaries during such period
determined on a consolidated basis that, in accordance with GAAP, are or should
be included in "purchase of property and equipment" or similar items reflected
in the consolidated statement of cash flows of Borrower and its Included
Subsidiaries. Consolidated Capital Expenditures shall include capitalized
expenditures (excluding expenditures related to the Capstar Omaha Contribution,
but only excluding expenditures made or incurred prior to the time of such
contribution, and including any subsequent
10
expenditures made or incurred in respect of the Omaha, Nebraska "Muzak"
affiliate) related to new location growth ("NEW LOCATION EXPENDITURES").
"CONSOLIDATED CASH INTEREST EXPENSE" means, for any period, Consolidated
Interest Expense for such period, excluding any amount not required to be paid
in Cash until maturity of the Indebtedness on which such interest is payable.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of determination, the
total assets of Borrower and its Included Subsidiaries on a consolidated basis
that may properly be classified as current assets in conformity with GAAP,
excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of determination,
the total liabilities of Borrower and its Included Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, excluding the current portion of long term debt.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to: (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated Operating Cash Flow, (b) the Consolidated Working
Capital Adjustment and (c) any net Cash extraordinary gains, minus (ii) the sum,
-----
without duplication, of the amounts for such period of (a) voluntary and
scheduled repayments of Consolidated Total Debt (excluding (1) prepayments of
Loans pursuant to Section 2.12(c) and (2) repayments of Revolving Loans except
to the extent the Revolving Commitments are permanently reduced in connection
with such repayments), (b) Consolidated Capital Expenditures and Permitted
Acquisitions made during such period (net of (1) the aggregate principal amount
of all Indebtedness incurred or assumed by Borrower and its Included
Subsidiaries during such period in connection with the financing of such
expenditures and acquisitions and (2) the amount of any such expenditures or
acquisitions made with Net Asset Sale Proceeds and Net Insurance/Condemnation
Proceeds reinvested pursuant to Section 2.12) to the extent such expenditures
and acquisitions were permitted pursuant to Sections 6.6 and 6.7, (c)
Consolidated Cash Interest Expense, (d) any provision for current taxes based on
income of Borrower and its Included Subsidiaries and payable in Cash with
respect to such period, (e) any Restricted Junior Payment permitted to be made
pursuant to Section 6.4 to the extent payable in Cash with respect to such
period and (f) any net Cash extraordinary losses.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum, without
duplication, of the amounts determined for Borrower and its Included
Subsidiaries on a consolidated basis of each of the following for such period,
(i) any provision for current taxes based on income of Borrower and its Included
Subsidiaries and payable in Cash during such period, (ii) Consolidated Cash
Interest Expense, (iii) scheduled prepayments of the Loans required to be made
pursuant to Section 2.10 for such period, (iv) Consolidated Capital Expenditures
(other than New Location Expenditures), and (v) Restricted Junior Payments
(including, without limitation, Tax Distributions and Management Fees, but
excluding payments by Borrower to Holdings or to either Sponsor, as applicable,
with
11
respect to Permitted Sponsor Subordinated Debt to the extent permitted
hereunder) to the extent payable in Cash with respect to such period.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Borrower and its Included Subsidiaries on
a consolidated basis with respect to all outstanding Indebtedness of Borrower
and its Included Subsidiaries, including all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing and net costs under Interest Rate Agreements, but excluding, however,
any amounts referred to in Section 2.9 payable on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, (i) the net income (or
loss) of Borrower and its Included Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
together with the amount of dividends or other distributions actually paid to
Borrower or any Included Subsidiary by Electro during such period to the extent
Electro is not an Included Subsidiary during such period, minus (ii) (a) the
-----
income of any Person (other than an Included Subsidiary of Borrower) in which
any other Person has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Borrower or any of its
Included Subsidiaries by such Person during such period, (b) the income (or
loss) of any Person accrued prior to the date it becomes an Included Subsidiary
of Borrower or is merged into or consolidated with Borrower or any of its
Included Subsidiaries or that Person's assets are acquired by Borrower or any of
its Included Subsidiaries, (c) the income of any Included Subsidiary of Borrower
to the extent that the declaration or payment of dividends or similar
distributions by that Included Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Included Subsidiary, (d) any after-tax gains or losses attributable to
Asset Sales or returned surplus assets of any Pension Plan, (e) the income (or
loss) of any Included Subsidiary attributable to discontinued operations
(including, without limitation, operations disposed of during such period) and
(f) (to the extent not included in clauses (a) through (e) above) any net
extraordinary gains or net extraordinary losses.
"CONSOLIDATED OPERATING CASH FLOW" means, for any period, without
duplication, an amount determined for Borrower and its Included Subsidiaries on
a consolidated basis equal to (i) to the sum of the amounts for such period of
(a) Consolidated Net Income, (b) Consolidated Interest Expense, (c) any
provisions for taxes based on income, (d) total depreciation expense, (e) total
amortization of intangibles (but excluding any non-Cash item to the extent it
represents the amortization of a prepaid Cash expense that was paid in any prior
period) expense, (f) Management Fees, and (g) all other non-Cash items reducing
Consolidated Net Income for such period except for any non-Cash items that
represent accruals of, or reserves for, Cash disbursements to be made in any
future accounting period, minus (ii) all other non-Cash items increasing
-----
Consolidated Net Income (other than any non-Cash items representing deferred
revenue to the extent that such revenue was not included in Net Income in any
prior period).
12
"CONSOLIDATED SENIOR DEBT" means, as at any date of determination,
Consolidated Total Debt less the aggregate outstanding principal amount of the
Senior Subordinated Notes on such date.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination, all
Indebtedness of Borrower and its Included Subsidiaries on such date on a
consolidated basis, excluding (i) any Permitted Sponsor Subordinated Debt, (ii)
Deferred Management Fees and (iii) items of Indebtedness of the type described
in clause (x) of the definition of Indebtedness, but only if as of such date of
determination, such Indebtedness would not be considered as a liability on a
balance sheet in conformity with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONTINGENT OBLIGATIONS" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebtedness, lease, dividend or other obligation of another if the primary
purpose or intent thereof by the Person incurring the Contingent Obligation is
to provide assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such obligation
will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under Hedge Agreements. Contingent Obligations shall include, without
limitation, (a) the direct or indirect guaranty, endorsement (otherwise than for
collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of another, (b) the obligation to make take-or-pay or similar payments if
required regardless of non-performance by any other party or parties to an
agreement, and (c) any liability of such Person for the obligation of another
through any agreement (contingent or otherwise) (x) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise) or (y) to
maintain the solvency or any balance sheet item, level of income or financial
condition of another if, in the case of any agreement described under subclauses
(x) or (y) of this sentence, the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any Contingent Obligation
shall be equal to the amount of the obligation so guaranteed or otherwise
supported or, if less, the amount to which such Contingent Obligation is
specifically limited.
"CONTINUING DIRECTORS" means individuals who at the beginning of any period
of two consecutive calendar years constituted the Board of Directors of
Holdings, together with any new
13
directors whose election by such Board of Directors or whose nomination for
election was approved by a vote of at least two-thirds of the members of such
Board of Directors then still in office who either were members of such Board of
Directors at the beginning of such period or whose election or nomination for
election was previously so approved.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any provision of
any Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.
"CONVERSION/CONTINUATION DATE" means the effective date of a continuation
or conversion, as the case may be, as set forth in the applicable
Conversion/Continuation Notice.
"CONVERSION/CONTINUATION NOTICE" means a notice substantially in the form
of Exhibit A.
"COUNTERPART AGREEMENT" means a counterpart agreement substantially in the
form of Exhibit H.
"CONTRIBUTING GUARANTORS" as defined in Section 7.2.
"CREDIT DATE" means the date of the making of a Loan.
"CREDIT DOCUMENT" means any of this Agreement, any promissory notes
delivered in connection herewith, the Collateral Documents, any documents or
certificates executed by Borrower in favor of Issuing Bank relating to Letters
of Credit, and all other documents, instruments or agreements executed and
delivered by a Credit Party for the benefit of any Agent or Lender in connection
herewith.
"CREDIT EXTENSION" means the making of a Loan or the issuing of a Letter of
Credit.
"CREDIT PARTY" means each Person (other than any Agent or any Lender or any
other representative thereof) from time to time party to a Credit Document.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Borrower's and its Included Subsidiaries'
operations.
"CUTOFF DATE" as defined in Section 2.13(c).
"DEFAULT" means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.
14
"DEFAULT EXCESS'' means, with respect to any Defaulting Lender, the excess,
if any, of such Defaulting Lender's Pro Rata Share of the aggregate outstanding
principal amount of Revolving Loans of all Lenders (calculated as if all
Defaulting Lenders (other than such Defaulting Lender) had funded all of their
respective Defaulted Loans) over the aggregate outstanding principal amount of
all Revolving Loans of such Defaulting Lender.
"DEFAULT PERIOD'' means, with respect to any Defaulting Lender, the period
commencing on the date of the applicable Funding Default and ending on the
earliest of the following dates: (i) the date on which all Revolving Commitments
are cancelled or terminated and/or the Obligations are declared or become
immediately due and payable, (ii) the date on which (a) the Default Excess with
respect to such Defaulting Lender shall have been reduced to zero (whether by
the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting
Lender or by the non-pro rata application of any voluntary or mandatory
prepayments of the Revolving Loans in accordance with the terms of Section 2.11
or Section 2.12 or by a combination thereof) and (b) such Defaulting Lender
shall have delivered to Borrower and Administrative Agent a written
reaffirmation of its intention to honor its obligations hereunder with respect
to its Commitment, and (iii) the date on which Borrower, Administrative Agent
and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in
writing.
"DEFAULTING LENDER" as defined in Section 2.21.
"DEFAULTING LOAN" as defined in Section 2.21.
"DEFERRED MANAGEMENT FEES" as defined in Section 6.4(a)(viii).
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United States of
America.
"DOMESTIC SUBSIDIARY" means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.
"ELECTRO" means Electro Systems Corporation, a Florida corporation.
"ELIGIBLE ASSIGNEE" means (i) any Lender, any Affiliate of any Lender and
any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), and (ii) any commercial bank,
insurance company, investment or mutual fund or other entity that is an
"accredited investor" (as defined in Regulation D under the Securities Act) and
which extends credit or buys loans as one of its businesses; provided, no
Affiliate of Holdings or Borrower shall be an Eligible Assignee.
15
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was sponsored, maintained, contributed to by
or required to be contributed by Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates.
"EMPLOYMENT AGREEMENT" means the Employment Agreement dated as of a date on
or about the Closing Date between Borrower and Xxxxxxx X. Xxxx, in the form
provided to Syndication Agent and Administrative Agent on the Closing Date, as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with Section 6.13.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of violation,
claim, action, suit, proceeding, demand, abatement order or other order or
directive (conditional or otherwise), by any governmental authority or any other
Person, arising (i) pursuant to or in connection with any actual or alleged
violation of any Environmental Law; (ii) in connection with any Hazardous
Material or any actual or alleged Hazardous Materials Activity; or (iii) in
connection with any actual or alleged damage, injury, threat or harm to health,
safety, natural resources or the environment.
"ENVIRONMENTAL LAWS" means any and all current or future foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of governmental
authorities relating to (i) environmental matters, including those relating to
any Hazardous Materials Activity; (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii) occupational safety
and health, industrial hygiene, land use or the protection of human, plant or
animal health or welfare, in any manner applicable to Borrower or any of its
Subsidiaries or any Facility.
"EQUITY CAPITAL" means capital that was contributed to Borrower by Holdings
in the form of Cash or property in exchange for common membership interests in
Borrower and includes (i) the Equity Contribution and (ii) the following capital
contributions: (a) $25,300,000 contributed by Sponsor in connection with the
acquisition of the assets of Borrower, (b) $4,100,000 contributed in connection
with the acquisition of BSI, (c) $600,000 contributed in connection with the
acquisition of Electro and (d) $1,500,000 contributed by management in
connection with the acquisition of the assets of Borrower.
"EQUITY CONTRIBUTION" means equity contributions to Borrower on or about
the Closing Date by Holdings consisting of (i) Cash contributed by MEM, (ii)
Cash or MLP partnership interests contributed by management of Holdings, (iii)
the Cash proceeds from the issuance of the Holdings Notes or from the incurrence
of the Closing Date Sponsor Debt and (iv) the net value of assets contributed as
part of the Capstar Contribution.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
16
"ERISA AFFILIATE" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
of the Internal Revenue Code of which that Person, any corporation described in
clause (i) above or any trade or business described in clause (ii) above is a
member. Any former ERISA Affiliate of Borrower or any of its Subsidiaries shall
continue to be considered an ERISA Affiliate of Borrower or any such Subsidiary
within the meaning of this definition with respect to the period such entity was
an ERISA Affiliate of Borrower or such Subsidiary and with respect to
liabilities arising after such period for which Borrower or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any Pension
Plan (whether or not waived in accordance with Section 412(d) of the Internal
Revenue Code) or the failure to make by its due date a required installment
under Section 412(m) of the Internal Revenue Code with respect to any Pension
Plan or the failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA; (v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability on Borrower, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by Borrower,
any of its Subsidiaries or any of their respective ERISA Affiliates of notice
from any Multiemployer Plan that it is in reorganization or insolvency pursuant
to Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act
or omission which could give rise to the imposition on Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates of fines, penalties,
taxes or related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of
any Employee Benefit Plan; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from
17
the Internal Revenue Service of notice of the failure of any Pension Plan (or
any other Employee Benefit Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal Revenue
Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n)
of the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"EURODOLLAR RATE LOAN" means a Loan bearing interest at a rate determined
by reference to the Adjusted Eurodollar Rate.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.1.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"EXISTING DEBT" means all Indebtedness (other than Indebtedness hereunder
and under the Senior Subordinated Notes, if issued on or prior to the Closing
Date, and Indebtedness identified in Schedule 6.1 annexed hereto) of Borrower
and its Subsidiaries (including, for such purpose, MLP and its Subsidiaries)
outstanding at any time on the Closing Date, including, without limitation, the
Indebtedness under the Existing Sponsor Loan and the Existing MLP Debt
Agreements.
"EXISTING INDENTURE AMENDMENTS" means the amendments, modifications and
supplements to the Existing Senior Note Indenture described in the Consent
Solicitation Materials.
"EXISTING MLP DEBT AGREEMENTS" means, collectively, (i) the Existing
Senior Notes, (ii) the Loan and Security Agreement dated as of December 30, 1998
between MLP and Foothill Capital Corporation and all agreements and documents
related thereto, as in effect on the Closing Date, and (iii) the promissory note
dated December 30, 1998 issued by MLP to MTI.
"EXISTING SENIOR NOTE INDENTURE" means the Indenture dated October 2, 1996
between MLP, MCC and U.S. Bank Trust National Association pursuant to which the
Existing Senior Notes were issued, as amended, restated, supplemented or
otherwise modified from time to time on or prior to the Closing Date to the
extent contemplated in the Consent Solicitation Materials or otherwise to the
extent permitted under Section 6.13.
"EXISTING SENIOR NOTES" means the 10% Senior Notes due 2003 issued by MLP
and MCC pursuant to the Existing Senior Note Indenture.
"EXISTING SPONSOR LOAN" means the loan made by Sponsor to Borrower as
evidenced by the Promissory Note dated October 6, 1998 by Borrower to Sponsor.
18
"FACILITY" means any real property (including all buildings, fixtures or
other improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Borrower or any of its Subsidiaries or any of their
respective predecessors or Affiliates.
"FAIR SHARE CONTRIBUTION AMOUNT" as defined in Section 7.2.
"FAIR SHARE" as defined in Section 7.2.
"FAIR SHARE SHORTFALL" as defined in Section 7.2.
"FEDERAL FUNDS EFFECTIVE RATE" means for any day, the rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; provided, (i) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (ii) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
Administrative Agent, in its capacity as a Lender, on such day on such
transactions as determined by Administrative Agent.
"FINANCIAL OFFICER CERTIFICATION" means, with respect to the financial
statements for which such certification is required, the certification of
Borrower, executed on Borrower's behalf by the chief financial officer or
treasurer of Borrower, that such financial statements fairly present, in all
material respects, the financial condition of Borrower and its Subsidiaries as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments.
"FINANCIAL PLAN" as defined in Section 5.1(j).
"FINANCIAL STATEMENTS" means, collectively, the Historical Financial
Statements and the Pro Forma Financial Statements.
"FIRST PRIORITY" means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral Document, that such Lien is the only
Lien to which such Collateral is subject, other than Permitted Liens.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Borrower and its Subsidiaries ending
on December 31 of each calendar year.
"FIXED CHARGE COVERAGE RATIO" means the ratio as of the last day of any
period of (i) Consolidated Operating Cash Flow for the period then ended, to
(ii) Consolidated Fixed Charges for
19
such period, in each case as set forth in the Compliance Certificate based on
the Fiscal Quarter then ended. For purposes of calculating the Fixed Charge
Coverage Ratio, each of Consolidated Operating Cash Flow and Consolidated Fixed
Charges shall be calculated on a Pro Forma Basis from the date of any
transaction for which pro forma effect is being given.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FRANCHISE ADDITION" means (i) an investment by Borrower or an Included
Subsidiary in any other Person pursuant to which such Person shall become an
Included Subsidiary, or shall be merged with or into Borrower or any Included
Subsidiary or (ii) the acquisition of Borrower or any Included Subsidiary of the
assets of any Person (other than an Included Subsidiary) which constitute all or
substantially all of the assets of such Person or comprise any division or class
of business of such Person or any other properties or assets of such Person
other than in the ordinary course of business.
"FRANCHISE TERMINATION" means any direct or indirect sale, issuance,
conveyance, assignment, transfer, lease or other disposition, other than in the
ordinary course of business as to Borrower or an Included Subsidiary, in any
single or series of related transactions, of a division or line of business.
"FUNDING DEFAULT" as defined in Section 2.21.
"FUNDING GUARANTORS" as defined in Section 7.2.
"FUNDING NOTICE" means a notice substantially in the form of Exhibit A.
"GAAP" means, subject to the limitations on the application thereof set
forth in Xxxxxxx 0.0, Xxxxxx Xxxxxx generally accepted accounting principles in
effect as of the date of determination thereof.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any Governmental
Authority.
"GOVERNMENTAL AUTHORITY" means any federal, state, municipal, national or
other governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign
entity or government.
"GSCP" as defined in the preamble hereto.
"GUARANTEED OBLIGATIONS" as defined in Section 7.1.
20
"GUARANTOR" means each of Holdings and each Domestic Subsidiary of Borrower
other than Muzak Heart and Soul Foundation, a Washington nonprofit corporation,
and Muzak Finance
"GUARANTY" means the guaranty of each Guarantor set forth in Section 7.
"HAZARDOUS MATERIALS" means any chemical, material or substance, exposure
to which is prohibited, limited or regulated by any governmental authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency Agreement
entered into in order to satisfy the requirements of this Agreement or otherwise
in the ordinary course of Borrower's or any of its Included Subsidiaries'
businesses and not for speculative purposes.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to any Lender which are presently in effect or, to the
extent allowed by law, under such applicable laws which may hereafter be in
effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"HIGH YIELD DEBT" means Indebtedness of (i) Borrower under the Senior
Subordinated Notes and (ii) Holdings under the Holdings Notes.
"HIGH YIELD ISSUANCE" means the issuance and sale by (i) Borrower of the
Senior Subordinated Notes and (ii) Holdings of the Holdings Notes.
"HISTORICAL FINANCIAL STATEMENTS" means as of the Closing Date, (a) with
respect to MLP, the audited financial statements of MLP and its Subsidiaries,
for the immediately preceding five fiscal years, consisting of balance sheets
and the related consolidated statements of income, partners' equity and cash
flows for such Fiscal Years, (b) with respect to Borrower, the audited financial
statements of Borrower and its Subsidiaries, for the period from October 7, 1998
through December 31, 1998, consisting of the consolidated balance sheets as of
December 31, 1998 and the related statements of income, members' equity and cash
flows for such period, together with a Financial Officer Certification, (c) with
respect to ACNI, (i) the audited financial statements of ACNI and its
Subsidiaries, for the immediately preceding two Fiscal Years, consisting of
balance sheets and the related consolidated statements of income, shareholders'
equity and cash flows for such Fiscal Years,
21
and (ii) the audited financial statements of ACNI and its Subsidiaries for the
period from January 1, 1998 to October 6, 1998, consisting of a balance sheet
and the related consolidated statements of income, shareholders' equity and cash
flows for the period, and, in the case of clause (ii), certified by Borrower,
executed on Borrower's behalf by the chief financial officer of Borrower, that
they fairly present, in all material respects, the financial condition of ACNI
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, (d) with respect to BSI,
unaudited financial statements for the year ended December 31, 1997, (e) with
respect to MTI, unaudited financial statements for the years ended December 31,
1996 and 1997, (f) with respect to Capstar, an unaudited balance sheet and
income statement for the year ended December 31, 1998, and (g) with respect to
Electro, unaudited financial statements for the year ended December 31, 1998.
"HOLDINGS" as defined in the preamble hereto.
"HOLDINGS LLC AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of Holdings dated as of a date on or about the Closing Date,
as amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under Section 6.13.
"HOLDINGS NOTE INDENTURE" means the Indenture dated as of the Closing Date,
by and among Holdings and Muzak Finance, as Issuers, and State Street Bank and
Trust Co., as Trustee, pursuant to which the Holdings Notes are to be issued, as
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under Section 6.13.
"HOLDINGS NOTE RELATED DOCUMENTS" means any or all of, as the context may
require, (i) the Holdings Notes, (ii) the Holdings Note Indenture, (iii) the
Purchase Agreement dated March 12, 1999, by and among Holdings and Muzak
Holdings Finance, as Issuers, and CIBC and GSCP, as Initial Purchasers, and (iv)
the Registration Rights Agreement dated as of the Closing Date, by and among
Holdings and Muzak Holdings Finance, as Issuers, and CIBC and GSCP, as Initial
Purchasers, as each may be amended, restated, supplemented or otherwise
modified from time to time to the extent permitted under Section 6.13.
"HOLDINGS NOTES" means $75 million aggregate principal amount at maturity
of 13% Senior Discount Notes due 2010 of Holdings and Muzak Holdings Finance to
be issued pursuant to the Holdings Note Indenture.
"INCLUDED SUBSIDIARY" means each Domestic Subsidiary of Borrower that is a
Guarantor other than Electro at any time that Electro has any Indebtedness;
provided that for as long as the Capstar Contribution Agreement is in full force
and effect and no contribution has been requested by Administrative Agent
pursuant thereto and until (i) Borrower has delivered notice to Administrative
Agent pursuant to Section 5.14 that the Capstar Omaha Contribution will not be
consummated or (ii) the Capstar Omaha Contribution is consummated, the Omaha,
Nebraska "Muzak" affiliate shall be treated as if it were an Included Subsidiary
for purposes of all financial
22
definitions contained herein and for purposes of Section 6.6; provided further
that the notice referred to in clause (i) shall be delivered, or the Capstar
Omaha Contribution shall have been consummated, no later than December 31, 1999.
"INCREASED-COST LENDERS" as defined in Section 2.22.
"INDEBTEDNESS" as applied to any Person, means, without duplication, (i)
all indebtedness for borrowed money or with respect to deposits or advances of
any kind; (ii) that portion of obligations with respect to Capital Leases that
is properly classified as a liability on a balance sheet in conformity with
GAAP; (iii) notes payable and drafts accepted representing extensions of credit
whether or not representing obligations for borrowed money; (iv) any obligation
owed for all or any part of the deferred purchase price of property or services
(excluding ordinary course trade payables); (v) all obligations of such Person
upon which interest charges are customarily paid; (vi) all obligations evidenced
by notes, bonds (other than performance bonds), debentures or other similar
instruments; (vii) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to any property or assets
acquired by such Person (even though the rights and remedies of the seller or
the lender under such agreement in the event of default are limited to
repossession or sale of such property or assets); (viii) all obligations,
contingent or otherwise, as an account party under any letter of credit or under
acceptance, letter of credit or similar facilities to the extent not reflected
as trade liabilities on the balance sheet of such Person in accordance with
GAAP; (ix) all obligations, contingent or otherwise, to purchase, redeem, retire
or otherwise acquire for value any Capital Stock; (x) all obligations under
Interest Rate Agreements and other Hedge Agreements, calculated as of any date
of determination as the net amounts, if any, that would be required to be paid
by such Person if such Agreements were terminated on such date; (xi) the
principal portion of all obligations of such Person under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product of such Person where such transaction is considered
borrowed money indebtedness for tax purposes but is classified as an operating
lease in accordance with GAAP; (xii) payment obligations of such Person under
any facility for the sale or financing of receivables; (xiii) Contingent
Obligations; (xiv) all indebtedness secured by any Lien on any property or asset
owned or held by that Person regardless of whether the indebtedness secured
thereby shall have been assumed by that Person or is nonrecourse to the credit
of that Person. The Indebtedness of any Person shall include the Indebtedness
of any other entity (including any partnership in which such Person is a general
partner or any Joint Venture) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness provide that
such Person is not liable therefor.
"INDEMNIFIED LIABILITIES" means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
actions, judgments, suits, claims (including Environmental Claims), costs
(including the costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or xxxxx any Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in
23
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or the other Credit Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make Credit Extensions or the use or intended use of the proceeds thereof, or
any enforcement of any of the Credit Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Guaranty)); (ii) the statements contained in the commitment
letter delivered by any Lender to Borrower with respect thereto; or (iii) any
Environmental Claim or any Hazardous Materials Activity relating to or arising
from, directly or indirectly, any past or present activity, operation, land
ownership, or practice of Borrower or any of its Subsidiaries.
"INDEMNITEE" as defined in Section 10.3.
"INSTALLMENT" as defined in Section 2.10(a).
"INSTALLMENT DATE" as defined in Section 2.10(a).
"INTELLECTUAL PROPERTY" means "Intellectual Property" as such term is
defined in the Pledge and Security Agreement.
"INTELLECTUAL PROPERTY COLLATERAL" means as all of the Intellectual
Property subject to the Lien of the Pledge and Security Agreement.
"INTEREST COVERAGE RATIO" means the ratio as of the last day of any period
of (i) Consolidated Operating Cash Flow for the period then ended, to (ii)
Consolidated Cash Interest Expense for such period, in each case as set forth in
the Compliance Certificate based on the Fiscal Quarter then ended. For purposes
of calculating the Interest Coverage Ratio, each of Consolidated Operating Cash
Flow and Consolidated Cash Interest Expense shall be calculated on a Pro Forma
Basis from the date of any transaction for which pro forma effect is being
given.
"INTEREST PAYMENT DATE" means with respect to (i) any Alternate Base Rate
Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date; and (ii) any
Eurodollar Rate Loan, the last day of each Interest Period applicable to such
Loan; provided, in the case of each Interest Period of longer than three months
"Interest Payment Date" shall also include each date that is three months, or an
integral multiple thereof, after the commencement of such Interest Period.
24
"INTEREST PERIOD" means, in connection with a Eurodollar Rate Loan, an
interest period of one-, two-, three- or six-months, as selected by Borrower in
the applicable Notice, (i) initially, commencing on the Credit Date or
Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter,
commencing on the day on which the immediately preceding Interest Period
expires; provided, (a) if an Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day unless no further Business Day occurs in such month, in
which case such Interest Period shall expire on the immediately preceding
Business Day; (b) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall, subject to
clauses (c) through (f), of this definition, end on the last Business Day of a
calendar month; (c) no Interest Period with respect to any portion of any Class
of Term Loans shall extend beyond the such Class's Term Loan Maturity Date; (d)
no Interest Period with respect to any portion of the Revolving Loans shall
extend beyond the Revolving Commitment Termination Date; (e) no Interest Period
with respect to any portion of Revolving Loans shall extend beyond a date on a
which Borrower is required to make a scheduled reduction of Revolving
Commitments, unless the sum of (1) the aggregate principal amount of such
Revolving Loans that are Alternate Base Rate Loans, and (2) the aggregate
principal amount of Revolving Loans that are Eurodollar Rate Loans with Interest
Periods expiring on or before such date or reduction equals or exceeds the
amount required to be paid with respect to the Revolving Commitments on such
date; and (f) no Interest Period with respect to any portion of a Class of Term
Loans shall extend beyond a date on a which Borrower is required to make a
scheduled payment of principal of such Class of Term Loans, unless the sum of
(1) the aggregate principal amount of such Class of Term Loans that are
Alternate Base Rate Loans, and (2) the aggregate principal amount of such Class
of Term Loans that are Eurodollar Rate Loans with Interest Periods expiring on
or before such date equals or exceeds the principal amount required to be paid
on such Class of Term Loans on such date.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement or other similar agreement or
arrangement, each of which is for the purpose of hedging the interest rate
exposure associated with Borrower's and its Included Subsidiaries' operations.
"INTEREST RATE DETERMINATION DATE" means, with respect to any Interest
Period, the date that is two Business Days prior to the first day of such
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"INVESTMENT" means (i) any direct or indirect purchase or other acquisition
by Holdings or any of its Subsidiaries of, or of a beneficial interest in, any
of the Securities of any other Person; (ii) any direct or indirect redemption,
retirement, purchase or other acquisition for value, by Holdings or any of its
Subsidiaries from any Person, of any Capital Stock of such Person; and (iii) any
direct or indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital
25
contribution by Holdings or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.
"INVESTMENT PROPERTY" as defined in the Pledge and Security Agreement.
"INVESTOR SECURITIES PURCHASE AGREEMENT" means the Investment Securities
Purchase Agreement dated as of October 6, 1998 among Holdings, Sponsor, Xxxxxx
Xxxx and Xxxxx Xxxxx, as amended, restated, supplemented or otherwise modified
from time to time (i) on or prior to the Closing Date pursuant to documentation
in form and substance reasonably satisfactory to Administrative Agent and
Requisite Lenders or (ii) thereafter to the extent permitted under Section 6.13.
"ISSUANCE NOTICE" means a notice substantially in the form of Exhibit D.
"ISSUING BANK" means CIBOC as Issuing Bank hereunder, together with its
permitted successors and assigns in such capacity.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"LEASEHOLD PROPERTY" means any leasehold interest of any Credit Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.
"LENDER" means each financial institution listed on the signature pages
hereto as a Lender, together with each such institution's successors and
permitted assigns, and Issuing Bank.
"LENDER COUNTERPARTY" means each Lender or any Affiliate thereof
counterparty to a Hedge Agreement.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Standby Letters of Credit
issued or to be issued by Issuing Bank for the account of Borrower pursuant to
Section 2.2A.
"LETTER OF CREDIT SUBLIMIT" means the lesser of (i) $5,000,000 and (ii) the
aggregate unused amount of the Revolving Commitments then in effect.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the sum of
(i) the maximum aggregate amount which is, or at any time thereafter may become,
available for drawing
26
under all Letters of Credit then outstanding, and (ii) the aggregate amount of
all drawings under Letters of Credit honored by Issuing Bank and not theretofore
reimbursed by or on behalf of Borrower.
"LICENSE AGREEMENTS" as defined in the Pledge and Security Agreement.
"LIEN" means (i) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to give
any security interest) and any option, trust or other preferential arrangement
having the practical effect of any of the foregoing and (ii) in the case of
Securities, any purchase option, call or similar right of a third party with
respect to such Securities.
"LOAN" means a Tranche A Term Loan, a Tranche B Term Loan, a Tranche C Term
Loan, and a Revolving Loan.
"MANAGEMENT AGREEMENT" means the Amended and Restated Management and
Consulting Services Agreement dated as of a date on or about the Closing Date
between ABRY Partners, Inc. and Borrower, as amended, restated, modified or
supplemented from time to time to the extent permitted under Section 6.13.
"MANAGEMENT FEES" means management fees payable by Borrower to ABRY
Partners, Inc. pursuant to the Management Agreement.
"MARGIN STOCK" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of Borrower and its Subsidiaries on a consolidated basis, (ii) the
ability of any Credit Party to fully and timely perform the Obligations, (iii)
the legality, validity, binding effect or enforceability against a Credit Party
of a Credit Document to which it is a party, or (iv) the rights, remedies and
benefits available to, or conferred upon, any Agent and any Lender under any
Credit Document.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Holdings, Borrower or any of their respective Subsidiaries is a party (other
than the Credit Documents) for which breach, nonperformance, cancellation or
failure to renew could reasonably be expected to have a Material Adverse Effect
; provided, however, that no franchise contract or arrangement or license
contract or arrangement entered into by Borrower or any of its Subsidiaries in
the ordinary course of business shall be considered a Material Contract unless
it involves aggregate annual consideration payable or receivable by Borrower or
such Subsidiary of not less than $2,500,000.
"MATERIAL REAL ESTATE ASSET'' means (i) a fee-owned Real Estate Asset
having a fair market value in excess of $500,000 as of the date of the
acquisition thereof, or (ii) all Leasehold Properties
27
other than those (a) with respect to which the aggregate payments under the term
of the lease are less than $250,000 per annum, (b) that do not contain any
financial records, the original or a copy of which is not contained elsewhere,
(c) that do not have any personal property located thereon with an aggregate
value in excess of $500,000 and (d) that relates to a site the loss of which
would not otherwise have a material adverse effect on the operation of the
business of Borrower or any of its Subsidiaries.
"MAXIMUM AVAILABLE AMOUNT" as defined in Section 2.2A(h).
"MCC" means Muzak Capital Corporation, a Delaware corporation.
"MEM" means MEM Holdings, LLC, a Delaware limited liability company.
"MEMBERS AGREEMENT" means the Amended and Restated Members Agreement dated
as of a date on or about the Closing Date among Holdings, MEM, Xxxxxx Xxxx and
Xxxxx Xxxxx, as amended, restated, supplemented or otherwise modified from time
to time to the extent permitted under Section 6.13.
"MERGER" as defined in the recitals hereto.
"MERGER AGREEMENT" as defined in the recitals hereto, as amended, restated,
supplemented or otherwise modified from time to time (i) on or prior to the
Closing Date pursuant to documentation in form and substance reasonably
satisfactory to Administrative Agent and Requisite Lenders or (ii) thereafter to
the extent permitted under Section 6.13.
"MERGER CONSIDERATION" as defined in the recitals hereto.
"MLP" as defined in the recitals hereto.
"MOODY'S" means Xxxxx'x Investor Services, Inc.
"MTI" means Music Technologies, Inc., a Michigan corporation.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"MUZAK FINANCE" means Muzak Finance Corp., a Delaware corporation.
"MUZAK HOLDINGS FINANCE" means Muzak Holdings Finance Corp., a Delaware
corporation.
28
"MUZAK LLC AGREEMENT" means the Amended and Restated Limited Liability
Company Agreement of Borrower dated as of a date on or about the Closing Date,
as amended, restated, supplemented or otherwise modified from time to time to
the extent permitted under Section 6.13.
"NAIC" means The National Association of Insurance Commissioners, and any
successor thereto.
"NARRATIVE REPORT" means, with respect to the financial statements for
which such narrative report is required, a narrative report of management's
discussion and analysis of financial condition and results of operations of
Borrower and its Subsidiaries in the form prepared for filings under the
Exchange Act for the applicable Fiscal Quarter or Fiscal Year and for the period
from the beginning of the then current Fiscal Year or, if later, the Closing
Date, to the end of such period to which such financial statements relate.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, an amount
equal to: (i) Cash payments (including any Cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) received from such Asset Sale, minus (ii) any bona
-----
fide direct costs incurred in connection with such Asset Sale, including (a)
income or gains taxes actually payable (by the seller or, to the extent such
taxes would give rise to a Tax Distribution, by any direct or indirect owner of
the seller) within two years of the date of receipt of such Cash payments as a
result of any gain recognized in connection with such Asset Sale and (b) payment
of the outstanding principal amount of, premium or penalty, if any, and interest
on any Indebtedness (other than the Loans) that is secured by a Lien on the
stock or assets in question and that is required to be repaid under the terms
thereof as a result of such Asset Sale.
"NET HIGH YIELD PROCEEDS" means, with respect to any High Yield Issuance,
an amount equal to the Cash proceeds received from such issuance, minus any bona
-----
fide direct costs incurred in connection with such issuance.
"NET INSURANCE/CONDEMNATION PROCEEDS" means an amount equal to: (i) any
Cash payments or proceeds received (a) under any casualty insurance policy in
respect of a covered loss thereunder or (b) as a result of the taking of any
assets of Borrower or any of its Subsidiaries by any Person pursuant to the
power of eminent domain, condemnation or otherwise, or pursuant to a sale of any
such assets to a purchaser with such power under threat of such a taking, minus
------
(ii) (a) any actual and reasonable documented costs incurred by Borrower or any
of its Subsidiaries in connection with the adjustment or settlement of any
claims of Borrower or such Subsidiary in respect thereof, and (b) any bona fide
direct costs incurred in connection with any sale of such assets as referred to
in clause (i)(b) of this definition, including income taxes actually payable (by
the seller or, to the extent such taxes would give rise to a Tax Distribution,
by any direct or indirect owner of the seller) within two years of the date of
receipt of such Cash payments as a result of any gain recognized in connection
therewith.
"NEW COMMITMENTS" as defined in Section 2.2(a)(ii).
29
"NEW LOCATION EXPENDITURES" as defined in the definition of "CONSOLIDATED
CAPITAL EXPENDITURES".
"NEW REVOLVING LENDERS" as defined in Section 2.2(a)(ii).
"NEW TRANCHE B LENDER" as defined in Section 2.2(a)(ii).
"NEW TRANCHE B TERM LOAN" as defined in Section 2.2(a)(ii).
"NEW TRANCHE B TERM LOAN AMOUNT" as defined in Section 2.2(a)(ii).
"NON-US LENDER" as defined in Section 2.19(c).
"NOTICE" means a Funding Notice, an Issuance Notice or a
Conversion/Continuation Notice.
"OBLIGATIONS" means, with respect to any Credit Party, obligations of such
Credit Party, whether now existing or hereafter made, incurred or created,
whether absolute or contingent, liquidated or unliquidated, whether due or not
due, whether for principal, interest, fees, expenses, indemnification or
otherwise, and however arising under or in connection herewith and any other
Credit Document, including any Letter of Credit, and any Interest Rate Agreement
required pursuant to Section 5.11 with a Lender Counterparty (including payments
for early termination under such Hedge Agreements), including those arising
under successive borrowing transactions hereunder which shall either continue
the Obligations of such Credit Party from time to time or renew them after they
have been satisfied and including interest which, but for the filing of a
petition in bankruptcy with respect to such Credit Party, would have accrued on
any Obligation, whether or not a claim is allowed against such Credit Party for
such interest in the related bankruptcy proceeding.
"OBLIGEE GUARANTOR" as defined in Section 7.7.
"ORGANIZATIONAL DOCUMENTS" means (i) with respect to any corporation, its
certificate or articles of incorporation, as amended, and its by-laws, as
amended, (ii) with respect to any limited partnership, its certificate of
limited partnership, as amended, and its partnership agreement, as amended,
(iii) with respect to any general partnership, its partnership agreement, as
amended, and (iv) with respect to any limited liability company, its certificate
of formation, as amended, and its operating agreement, as amended. In the event
any term or condition of this Agreement or any other Credit Document requires
any Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such "Organizational Document" shall
only be to a document of a type customarily certified by such governmental
official.
"ORIGINAL ENTERPRISE VALUE" means the sum of (i) the amount of Equity
Capital, plus (ii) the amount of Indebtedness incurred hereunder, plus (iii) the
amount of aggregate proceeds from any issuance of the Senior Subordinated Notes,
plus (iv) the aggregate outstanding principal amount of other Indebtedness of
Borrower and its Included Subsidiaries.
30
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA.
"PERMITTED ACQUISITION" means any acquisition by Borrower or any of its
Included Subsidiaries, whether by purchase, merger or otherwise, of all or
substantially all of the assets of, all of the Capital Stock of, or a business
line or a division of, any Person; provided:
(i) immediately prior to, and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing or would
result therefrom;
(ii) all transactions in connection therewith shall be consummated
in accordance with all applicable laws and in conformity with all applicable
Governmental Authorizations;
(iii) in the case of the acquisition of Capital Stock, all of the
Capital Stock (except for any such Securities in the nature of directors
qualifying shares required pursuant to applicable law) acquired or otherwise
issued by such Person or any newly formed Subsidiary of Borrower in connection
with such acquisition shall be owned 100% by Borrower or any of its Wholly-Owned
Included Domestic Subsidiaries, and Borrower shall have taken, or caused to be
taken, as of the date such Person becomes a Subsidiary of Borrower, each of the
actions set forth in Section 5.9;
(iv) Borrower and its Subsidiaries shall be in compliance with
Section 6.6, both immediately before and after giving effect to such acquisition
on a Pro Forma Basis as of the most recently ended Fiscal Quarter for which a
Compliance Certificate has been delivered pursuant to Section 5.1(d);
(v) Borrower shall have delivered (a) to Administrative Agent and
Syndication Agent at least five Business Days prior to such proposed acquisition
a draft certificate in the form of a Compliance Certificate and (b) to
Administrative Agent on the date of such acquisition a certificate in the form
of a Compliance Certificate, in each case evidencing such compliance with such
Section, together with all relevant financial information for such acquired
assets, including, without limitation, the aggregate consideration for such
acquisition, the Acquisition Cash Flow for each acquired entity and the
information required pursuant to Section 6.6, if relevant; and
(vi) any Person or assets or division as acquired in accordance
herewith shall be in primarily the same business or lines of business in which
Borrower and/or its Subsidiaries are engaged as of the Closing Date.
"PERMITTED LIENS" means each of the Liens permitted pursuant to Section
6.2.
"PERMITTED SPONSOR DEBT AGREEMENT" means any loan agreement between one or
more Sponsors and Holdings or Borrower, as applicable, evidencing the Permitted
Sponsor Subordinated
31
Debt, as amended, restated, supplemented or otherwise modified from time to time
thereafter to the extent permitted under Section 6.13.
"PERMITTED SPONSOR SUBORDINATED DEBT" means subordinated unsecured loans
from one or more Sponsors to Holdings or Borrower, provided (i) prior to the
payment in full in Cash of all of the Obligations no payment in respect of the
principal of or interest on such loans shall be required or made (unless
otherwise approved by Requisite Lenders), (ii) no such loan shall mature earlier
than June 30, 2007, (iii) if such loans are to Holdings, the net proceeds
thereof shall either be contributed as Equity Capital to Borrower or loaned to
Borrower on the terms described in clauses (i), (ii) and (iv) hereof (and any
such loan to Borrower from Holdings shall also constitute "Permitted Sponsor
Subordinated Debt") and (iv) in all other respects such loans shall be
subordinated to all of the Obligations on terms and conditions acceptable to
Requisite Lenders; provided, if any Permitted Sponsor Subordinated Debt is
issued on or prior to the Closing Date, it shall also be referred to as "CLOSING
DATE SPONSOR DEBT".
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PLAN OF CORRECTION" as defined in Section 4.21.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security Agreement
substantially in the form of Exhibit I, as it may be amended, supplemented or
otherwise modified from time to time.
"PREFERRED STOCK" means any Capital Stock of a Person, however designated,
which entitles the holder thereof to a preference with respect to dividends,
distributions or liquidation proceeds of such Person over the holders of other
Capital Stock issued by such Person.
"PRIME RATE" means the rate that CIBOC announces from time to time as its
prime lending rate, as in effect from time to time. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. CIBOC or any other Lender may make commercial
loans or other loans at rates of interest at, above or below the Prime Rate.
"PRINCIPAL OFFICE" means, for each of Administrative Agent and Issuing
Bank, such Person's "Principal Office" as set forth on Appendix B, or such other
office as such Person may from time to time designate in writing to Borrower,
Administrative Agent and each Lender.
"PRO FORMA BASIS" means, with respect to compliance with any test or
covenant hereunder, compliance with such covenant or test after giving effect to
any proposed acquisition, disposition
32
or other action which requires compliance on a pro forma basis, giving effect to
adjustments for cost reductions and non-recurring costs and using, for purposes
of determining such compliance, the historical financial statements of all
entities or assets so acquired or to be acquired and the consolidated financial
statements of Borrower and its Subsidiaries which shall be reformulated (i) as
if such acquisition, disposition or other action, and any other such action
which has been consummated during the period, and any Indebtedness or other
liabilities incurred in connection with any such actions, had been consummated
at the beginning of such period (and assuming that such Indebtedness bears
interest during any portion of the applicable measurement period prior to the
relevant action at the weighted average of the interest rates applicable to
outstanding Loans during such period), and (ii) otherwise in conformity with
such procedures as may be agreed upon between Administrative Agent and Borrower,
provided all the calculations referred to herein shall be in reasonable detail
and shall be in form and substance satisfactory to Administrative Agent in all
respects.
"PRO FORMA FINANCIAL STATEMENTS" as defined in Section 3.1(o).
"PROJECTIONS" as defined in Section 4.6.
"PROPRIETARY SOFTWARE" as defined in the Pledge and Security Agreement.
"PRO RATA SHARE" means (i) with respect to all payments, computations and
other matters relating to the Tranche A Term Loan of any Lender, the percentage
obtained by dividing (a) the Tranche A Term Loan Exposure of that Lender by (b)
the aggregate Tranche A Term Loan Exposure of all Lenders; (ii) with respect to
all payments, computations and other matters relating to the Tranche B Term Loan
of any Lender, the percentage obtained by dividing (a) the Tranche B Term Loan
Exposure of that Lender by (b) the aggregate Tranche B Term Loan Exposure of all
Lenders; (iii) with respect to all payments, computations and other matters
relating to the Tranche C Term Loan of any Lender, the percentage obtained by
dividing (a) the Tranche C Term Loan Exposure of that Lender by (b) the
aggregate Tranche C Term Loan Exposure of all Lenders; and (iv) with respect to
all payments, computations and other matters relating to the Revolving
Commitment or Revolving Loans of any Lender or any Letters of Credit issued or
participations therein purchased by any Lender, the percentage obtained by
dividing (a) the Revolving Exposure of that Lender by (b) the aggregate
Revolving Exposure of all Lenders. For all other purposes with respect to each
Lender, "Pro Rata Share" means the percentage obtained by dividing (A) an amount
equal to the Tranche A Term Loan Exposure, the Tranche B Term Loan Exposure, the
Tranche C Term Loan Exposure and the Revolving Exposure of that Lender, by (B)
an amount equal to the aggregate Tranche A Term Loan Exposure, the aggregate
Tranche B Term Loan Exposure, the aggregate Tranche C Term Loan Exposure and the
aggregate Revolving Exposure of all Lenders. The initial Pro Rata Share for
each Class of Loans of each Lender party hereto on the Closing Date is as set
forth on Appendix A.
"REAL ESTATE ASSET" means, at any time of determination, any interest
(whether leasehold, fee or otherwise) then owned by any Credit Party in any real
property.
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"REGISTER" as defined in Section 2.5(b).
"REGISTRATION AGREEMENT" means the Amended and Restated Registration dated
as of a date on or about the Closing Date among Holdings, MEM, Xxxxxx Xxxx,
Xxxxx Xxxxx, Music Holdings Corp. and Capstar, as amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under Section 6.13.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" as defined in Section 2.2A(d).
"RELATED AGREEMENTS" means, collectively, the following: the Merger
Agreement, the Articles of Merger, the Consent Solicitation Materials, the
Existing Senior Note Indenture, the Existing Indenture Amendments, the Capstar
Documentation, any Senior Subordinated Note Related Documents, any Holdings Note
Related Documents, any Permitted Sponsor Debt Agreement, the Additional
Acquisition Related Documents, any documentation related to the repayment of any
Existing Debt, the Muzak LLC Agreement, the Holdings LLC Agreement, the
Employment Agreement, the Management Agreement, the Members Agreement, the
Investor Securities Purchase Agreements, the Securityholders Agreement, the
Registration Agreement and the Securities Repurchase Agreement and all documents
related thereto.
"RELATED FUND" means, with respect to any Lender that is an investment
fund, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"RELEASE" means any release, spill, emission, leaking, pumping, pouring,
injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching
or migration of any Hazardous Material into the indoor or outdoor environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement of
any Hazardous Material through the air, soil, surface water or groundwater.
"REPLACEMENT LENDER" as defined in Section 2.22.
"REQUIRED PREPAYMENT DATE" as defined in Section 2.13(c).
"REQUISITE CLASS LENDERS" means, at any time of determination, (i) for the
Class of Lenders having Tranche A Term Loan Exposure, Lenders having or holding
more than 50% of the aggregate Tranche A Term Loan Exposure of all Lenders; (ii)
for the Class of Lenders having Tranche B Term Loan Exposure, Lenders having or
holding more than 50% of the aggregate Tranche B Term Loan Exposure of all
Lenders; (iii) for the Class of Lenders having Tranche C Term Loan Exposure,
Lenders having or holding more than 50% of the aggregate Tranche C Term Loan
Exposure of all
34
Lenders; and (iv) for the Class of Lenders having Revolving
Exposure, Lenders having or holding more than 50% of the aggregate Revolving
Exposure of all Lenders.
"REQUISITE LENDERS" means one or more Lenders having or holding Tranche A
Term Loan Exposure, Tranche B Term Loan Exposure, Tranche C Term Loan Exposure
and/or Revolving Exposure representing more than 50% of the sum of (i) the
aggregate Tranche A Term Loan Exposure of all Lenders, (ii) the aggregate
Tranche B Term Loan Exposure of all Lenders (iii) the aggregate Tranche C Term
Loan Exposure of all Lenders, and (iv) the aggregate Revolving Exposure of all
Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Holdings,
Borrower or any of their respective Subsidiaries now or hereafter outstanding,
except a dividend payable solely in shares of that class of stock to the holders
of that class, (ii) any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of stock of Holdings, Borrower or any of their respective Subsidiaries
now or hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Holdings, Borrower or any of their respective
Subsidiaries now or hereafter outstanding, (iv) any payment or prepayment of
principal of, premium, if any, or interest on, or redemption, purchase,
retirement, defeasance (including in-substance or legal defeasance), sinking
fund or similar payment with respect to, any Subordinated Indebtedness or the
Holdings Notes, and (v) any payment of any management, consulting, advisory or
other similar fees and/or expenses by Holdings, Borrower or any of their
respective Subsidiaries to any Person.
"REVOLVING COMMITMENT" means the commitment of a Lender to make or
otherwise fund any Credit Extension (other than any Term Loan). The amount of
each Lender's Revolving Commitment, if any, is set forth on Appendix A or in the
applicable Assignment Agreement, subject to any adjustment or reduction pursuant
to the terms and conditions hereof.
"REVOLVING COMMITMENT PERIOD" means the period from the Closing Date to but
excluding the Revolving Commitment Termination Date.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest to occur of (i)
April 30, 1999 if the Term Loans are not made on or before that date; (ii)
December 31, 2005, (iii) the date the Revolving Commitments are permanently
reduced to zero pursuant to Section 2.11(b) or 2.12, and (iv) the date of the
termination of the Revolving Commitments pursuant to Section 8.1.
"REVOLVING EXPOSURE" means, with respect to any Lender as of any date of
determination, (i) prior to the termination of the Revolving Commitments, such
Lender's Revolving Commitment; and (ii) after the termination of the Revolving
Commitments, the sum of (a) the aggregate outstanding principal amount of the
Revolving Loans of such Lender, (b) in the case of Issuing Bank, the aggregate
Letter of Credit Usage in respect of all Letters of Credit (net of any
35
participations purchased by Lenders in such Letters of Credit or any
unreimbursed drawing thereunder), and (c) the aggregate amount of all
participations purchased by such Lender in any outstanding Letters of Credit or
any unreimbursed drawing under any Letter of Credit.
"REVOLVING LENDER" means each Lender with a Revolving Commitment.
"REVOLVING LOAN" means a Loan made by a Lender to Borrower pursuant to
Section 2.2(a)(i).
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw Hill
Corporation.
"SECURITIES" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"SECURITIES REPURCHASE AGREEMENTS" means the Securities Repurchase
Agreements, entered into as of October 6, 1998 and entered into prior to, on or
after the Closing Date, among Holdings and MEM, on the one hand, and each of
Xxxxxx Xxxx, Xxxxx Xxxxx, and other management members on the other hand, as
amended, restated, supplemented or otherwise modified from time to time (i) on
or prior to the Closing Date pursuant to documentation in form and substance
reasonably satisfactory to Administrative Agent and Requisite Lenders or (ii)
thereafter to the extent permitted under Section 6.13.
"SECURITYHOLDERS AGREEMENT" means the Security holders Agreement dated as
of a date on or about the Closing Date among Holdings, MEM and Capstar, as
amended, restated, supplemented or otherwise modified from time to time to the
extent permitted under Section 6.13.
"SENIOR LEVERAGE RATIO" means the ratio as of any day of (i) Consolidated
Senior Debt as of such day to (ii) Adjusted Annualized Operating Cash Flow as
set forth in the Compliance Certificate based on the Fiscal Quarter then ended
(or, if no Fiscal Quarter is then ended, the most recently ended Fiscal Quarter)
delivered by Borrower to Administrative Agent pursuant to Section 5.1(d), plus,
without duplication, Acquisition Cash Flow for all entities and assets acquired
since such Fiscal Quarter.
36
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as of the
Closing Date, by and among Muzak Finance and Borrower, as Issuers, Holdings,
Muzak Capital Corporation, MLP Environmental Music, LLC and BSI, as Guarantors,
and State Street Bank and Trust Company, as Trustee, pursuant to which the
Senior Subordinated Notes are to be issued, as amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under Section
6.13.
"SENIOR SUBORDINATED NOTE RELATED DOCUMENTS" means any or all of, as the
context may require, (i) the Senior Subordinated Notes, (ii) the Senior
Subordinated Note Indenture, (iii) the Purchase Agreement dated as of March 12,
1999, by and among Muzak Finance and Borrower, as Issuers, Muzak Holdings
Finance, Muzak Capital Corporation, MLP Environmental Music, LLC and BSI, as
Guarantors and CIBC and GSCP, as Initial Purchasers, and (iv) the Registration
Rights Agreement dated as of the Closing Date, by and among Muzak Finance and
Borrower, as Issuers, Muzak Holdings Finance, Muzak Capital Corporation, MLP
Environmental Music, LLC and BSI, as Guarantors and CIBC and GSCP, as Initial
Purchasers, as each may be amended, restated, supplemented or otherwise modified
from time to time to the extent permitted under Section 6.13.
"SENIOR SUBORDINATED NOTES" means $115 million aggregate principal amount
of the 97/8% Senior Subordinated Notes due 2009 of Borrower and Muzak Finance to
be issued pursuant to the Senior Subordinated Note Indenture.
"SOLVENCY CERTIFICATE" means a certificate substantially in the form of
Exhibit G-2.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (i) (a) the sum of such Person's debts (including contingent
liabilities) does not exceed all of its property, at a fair valuation; (b) the
present fair saleable value of the property of such Person is not less than the
amount that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured; (c) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (d) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (ii) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability (irrespective of whether such contingent liabilities
meet the criteria for accrual under Statement of Financial Accounting Standard
No. 5).
"SPONSORS" means ABRY Broadcast Partners II, L.P. and ABRY Broadcast
Partners III, L.P.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or similar
instrument, in form and substance reasonably acceptable to the Issuing Bank,
issued for the purpose of supporting obligations of Borrower and its Included
Subsidiaries incurred or arising in the ordinary course of
37
business or in connection with a consummated or proposed Permitted Acquisition;
provided that Standby Letters of Credit may not be issued for the purpose of
supporting (a) trade payables or (b) any Indebtedness other than Indebtedness
which is otherwise permitted under this Agreement.
"SUBORDINATED INDEBTEDNESS" means (i) Indebtedness of Borrower under the
Senior Subordinated Note Related Documents, (ii) Indebtedness of Holdings or
Borrower under any Permitted Sponsor Debt Agreement and (iii) any other
subordinated Indebtedness of any Credit Party of any type.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"SUPPLEMENTAL COLLATERAL AGENT" as defined in Section 9.8(c).
"SYNDICATION AGENT" as defined in the preamble hereto.
"SYSTEMS" means any of the hardware, firmware or software systems
associated with information processing and delivery, operations or services
(e.g., security and alarms, elevators, communications, and HVAC) operated by,
provided to or otherwise reasonably necessary to the business or operations of
Borrower and its Subsidiaries.
"TAX" means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided, "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's principal office (and/or, in the
case of a Lender, its applicable lending office) is located on all or part of
the net income, profits or gains (whether worldwide, or only insofar as such
income, profits or gains are considered to arise in or to relate to a particular
jurisdiction, or otherwise) of that Person (and/or, in the case of a Lender, its
applicable lending office).
"TAX DISTRIBUTIONS" means distributions by Borrower and Holdings to each of
their members in respect of the tax liabilities of such members arising out of
such members' ownership interests in Borrower or Holdings, as applicable,
provided that, the amount of Tax Distributions in respect of any Fiscal Year to
which each such member shall be entitled shall be such that, in the
38
aggregate for such Fiscal Year and for all prior Fiscal Years, such member has
received an amount equal to the product of (i) the amount of taxable income
allocated to such member for such Fiscal Year and for all prior Fiscal Years,
reduced by the amount of taxable losses allocated to such member for such Fiscal
Year and for all prior Fiscal Years, and (ii) the effective maximum combined
marginal federal and Massachusetts state income tax rates (after giving effect
to any federal income tax deduction for such state income taxes) applicable to
individual taxpayers resident in Massachusetts in respect of income recognized
during such Fiscal Year.
"TERM LOAN" means a Tranche A Term Loan, a Tranche B Term Loan or a Tranche
C Term Loan.
"TERM LOAN EXPOSURE" means, as of any date of determination, the sum of
each of (i) the aggregate Tranche A Term Loan Exposure of all Lenders, (ii) the
aggregate Tranche B Term Loan Exposure of all Lenders and (iii) the aggregate
Tranche C Term Loan Exposure of all Lenders.
"TERMINATED LENDER" as defined in Section 2.22.
"TOTAL LEVERAGE RATIO" means the ratio as of any day of (i) Consolidated
Total Debt as of such day to (ii) Adjusted Annualized Operating Cash Flow as set
forth in the Compliance Certificate based on the Fiscal Quarter then ended (or,
if no Fiscal Quarter is then ended, the most recently ended Fiscal Quarter)
delivered by Borrower to Administrative Agent pursuant to Section 5.1(d), plus,
without duplication, Acquisition Cash Flow for all entities and assets acquired
since such Fiscal Quarter.
"TOTAL UTILIZATION OF REVOLVING COMMITMENTS" means, as at any date of
determination, the sum of (i) the aggregate principal amount of all outstanding
Revolving Loans (other than Revolving Loans made for the purpose of reimbursing
Issuing Bank for any amount drawn under any Letter of Credit, but not yet so
applied) and (ii) the Letter of Credit Usage.
"TRADE SECRET" as defined in the Pledge and Security Agreement.
"TRANCHE A TERM LOAN" means a Tranche A Term Loan made by a Lender to
Borrower pursuant to Section 2.1(a)(i).
"TRANCHE A TERM LOAN AMOUNT" means the amount of the Tranche A Term Loan to
be made by a Lender to Borrower. The amount of each Lender's Tranche A Term
Loan Amount, if any, is set forth on Appendix A.
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any Lender, as of any
date of determination, the outstanding principal amount of the Tranche A Term
Loans of such Lender; provided, at any time prior to the making of the Tranche A
Term Loans, the Tranche A Term Loan Exposure of any Lender shall be equal to
such Lender's Tranche A Term Loan Amount.
39
"TRANCHE A TERM LOAN MATURITY DATE" means the earlier of (i) December 31,
2005, and (ii) the date that all Tranche A Term Loans shall become due and
payable in full hereunder, whether by acceleration or otherwise.
"TRANCHE B TERM LOAN" means a Tranche B Term Loan made by a Lender to
Borrower pursuant to Section 2.1(a)(ii).
"TRANCHE B TERM LOAN AMOUNT" means the amount of the Tranche B Term Loan to
be made by a Lender to Borrower. The amount of each Lender's Tranche B Term
Loan Amount, if any, is set forth on Appendix A, except as otherwise provided in
Section 2.2(a)(ii).
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any Lender, as of any
date of determination, the outstanding principal amount of the Tranche B Term
Loans of such Lender; provided, at any time prior to the making of the Tranche B
Term Loans, the Tranche B Term Loan Exposure of any Lender shall be equal to
such Lender's Tranche B Term Loan Amount.
"TRANCHE B TERM LOAN MATURITY DATE" means the earlier of (i) December 31,
2006, and (ii) the date that all Tranche B Term Loans shall become due and
payable in full hereunder, whether by acceleration or otherwise.
"TRANCHE C TERM LOAN" means a Tranche C Term Loan made by a Lender to
Borrower pursuant to Section 2.1(a)(iii).
"TRANCHE C TERM LOAN AMOUNT" means the amount of the Tranche C Term Loan to
be made by a Lender to Borrower. The amount of each Lender's Tranche C Term
Loan Amount, if any, is set forth on Appendix A.
"TRANCHE C TERM LOAN COMMITMENT" means the commitment of a Lender to make a
Tranche C Term Loan. The amount of each Lender's Tranche C Term Loan
Commitment, if any, is equal to such Lender's Tranche C Term Loan Amount set
forth on Appendix A, subject to cancellation pursuant to the terms and
conditions hereof.
"TRANCHE C TERM LOAN EXPOSURE" means, with respect to any Lender, as of any
date of determination, the outstanding principal amount of the Tranche C Term
Loans of such Lender; provided, at any time prior to the making of the Tranche C
Term Loans, the Tranche C Term Loan Exposure of any Lender shall be equal to
such Lender's Tranche C Term Loan Amount.
"TRANCHE C TERM LOAN MATURITY DATE" means the earlier of (i) December 31,
2005, and (ii) the date that all Tranche C Term Loans shall become due and
payable in full hereunder, whether by acceleration or otherwise.
"TRANSACTION COSTS" means the fees, costs and expenses payable by Borrower
in connection with the Transactions.
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"TRANSACTIONS" means, collectively, (i) the consummation of the Merger,
(ii) the consummation of the Capstar Contribution, including the Capstar Omaha
Contribution, which is expected to be consummated after the Closing Date, (iii)
the consummation of the Additional Acquisitions, (iv) the repayment of the
Existing Debt, (v) the Consent Solicitation and the adoption of the Existing
Indenture Amendment, (vi) any issuance and sale of the Senior Subordinated Notes
on or prior to the Closing Date, (vii) any issuance and sale of the Holdings
Notes on or prior to the Closing Date, (viii) any incurrence of Closing Date
Sponsor Debt, (ix) the Equity Contribution, (x) the making of the Loans, and
(xi) any other transactions contemplated by the Related Agreements.
"TRANSITION DATE" as defined in Section 2.2(a)(ii).
"TREASURY REGULATIONS" means the Income Tax Regulations promulgated under
the Code.
"TYPE OF LOAN" means an Alternate Base Rate Loan or a Eurodollar Rate Loan.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UNADJUSTED EURODOLLAR RATE COMPONENT" means that component of the interest
costs to Borrower in respect of a Eurodollar Rate Loan that is based upon the
rate obtained pursuant to clause (i) of the definition of Adjusted Eurodollar
Rate.
"WAIVABLE MANDATORY PREPAYMENT" as defined in Section 2.13(c).
"WHOLLY-OWNED DOMESTIC SUBSIDIARY" means a Domestic Subsidiary of any
Person that is a Wholly-Owned Subsidiary.
"WHOLLY-OWNED INCLUDED DOMESTIC SUBSIDIARY" means a Domestic Subsidiary of
Borrower that is a Wholly-Owned Subsidiary and an Included Subsidiary.
"WHOLLY-OWNED SUBSIDIARY" means a Subsidiary of any Person, all of the
Capital Stock of which (other than directors' qualifying shares) is owned by
such Person or another Wholly-Owned Subsidiary of such Person.
"YEAR 2000 COMPLIANCE" as defined in Section 4.21.
"YEAR 2000 ISSUES" means limitations in the Year 2000 Compliance of any of
the Systems or Proprietary Software.
1.2 ACCOUNTING TERMS. Except as otherwise expressly provided herein, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lenders
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pursuant to Section 5.1(a), 5.1(b) and 5.1(c) shall be prepared in accordance
with GAAP as in effect at the time of such preparation (and delivered together
with the reconciliation statements provided for in Section 5.1(e), if
applicable). Calculations in connection with the definitions, covenants and
other provisions hereof shall utilize GAAP as in effect as of the date of and
the accounting principles and policies in conformity with those used to prepare
the Pro Forma Financial Statements (notwithstanding any change in GAAP since the
date thereof).
1.3 INTERPRETATION, ETC. Any of the terms defined herein may, unless the
context otherwise requires, be used in the singular or the plural, depending on
the reference. References herein to any Section, Appendix, Schedule or Exhibit
shall be to a Section, an Appendix, a Schedule or an Exhibit, as the case may
be, hereof unless otherwise specifically provided. The use herein of the word
"include" or "including", when following any general statement, term or matter,
shall not be construed to limit such statement, term or matter to the specific
items or matters set forth immediately following such word or to similar items
or matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
SECTION 2. LOANS AND LETTERS OF CREDIT
2.1 TERM LOANS. (a) Subject to the terms and conditions hereof:
(i) each Lender holding a Tranche A Term Loan Amount agrees to make,
on or before April 30, 1999, a Tranche A Term Loan to Borrower in an amount
equal to such Lender's Tranche A Term Loan Amount;
(ii) each Lender holding a Tranche B Term Loan Amount agrees to make,
on or before April 30, 1999 in the case of all Tranche B Term Loans other than
New Tranche B Term Loans, a Tranche B Term Loan to Borrower in an amount equal
to such Lender's Tranche B Term Loan Amount; and
(iii) each Lender holding a Tranche C Term Loan Amount agrees to make,
on or before April 30, 1999, a Tranche C Term Loan to Borrower in an amount
equal to such Lender's Tranche C Term Loan Amount; provided, if Borrower issues
the Senior Subordinated Notes on or prior to the Closing Date, the Tranche C
Term Loan Commitment of each Lender will be cancelled and the Tranche C Term
Loans will not be made.
Any amount borrowed under this Section 2.1(a) and subsequently repaid or prepaid
may not be reborrowed. Subject to Sections 2.11(a) and 2.12, all amounts owed
hereunder with respect to the Tranche A Term Loans, the Tranche B Term Loans and
the Tranche C Term Loans shall be paid in full no later than the Tranche A Term
Loan Maturity Date, the Tranche B Term Loan Maturity Date, and the Tranche C
Term Loan Maturity Date, respectively.
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(b) Borrower shall deliver to Administrative Agent a fully executed and
delivered Funding Notice no later than three days prior to the Closing Date.
Promptly upon receipt by Administrative Agent of such Certificate,
Administrative Agent shall notify each Lender of the proposed borrowing.
(c) Each Lender shall make its Tranche A Term Loan Amount, Tranche B Term
Loan Amount, and Tranche C Term Loan Amount, as the case may be, available to
Administrative Agent not later than 12:00 noon (New York City time) on the
Closing Date, by wire transfer of same day funds in Dollars, at Administrative
Agent's Principal Office. Promptly upon satisfaction or waiver of the
conditions precedent specified herein, Administrative Agent shall make the
proceeds of the Term Loans available to Borrower on the Closing Date by causing
an amount of same day funds in Dollars equal to the proceeds of all such Loans
received by Administrative Agent from Lenders to be credited to the account of
Borrower at Administrative Agent's Principal Office or to such other account as
may be designated in writing to Administrative Agent by Borrower.
2.2 REVOLVING LOANS.
(a) (i) During the Revolving Commitment Period, subject to the terms
and conditions hereof, each Lender holding a Revolving Commitment agrees to make
Revolving Loans to Borrower in the aggregate amount up to but not exceeding such
Lender's Revolving Commitment at such time; provided, after giving effect to the
making of any Revolving Loans in no event shall the Total Utilization of
Revolving Commitments exceed the Revolving Commitments then in effect. Amounts
borrowed pursuant to this Section 2.2(a)(i) may be repaid and reborrowed during
the Revolving Commitment Period. Each Lender's Revolving Commitment shall
expire on the Revolving Commitment Termination Date and all Revolving Loans and
all other amounts owed hereunder with respect to the Revolving Loans and the
Revolving Commitments shall be paid in full no later than such date.
(ii) On no more than three occasions prior to December 31, 2000,
Borrower may by written notice to Administrative Agent elect to increase either
the Revolving Commitments or the aggregate Tranche B Term Loan Amount
(collectively, the "NEW COMMITMENTS" or the "NEW TRANCHE B TERM LOAN AMOUNTS,"
as applicable), by an amount not in excess of $50,000,000 in the aggregate and
not less than $10,000,000 individually and integral multiples of $5,000,000 in
excess of that amount. Each such notice shall specify (A) the date (each, a
"TRANSITION DATE") on which Borrower proposes that New Commitments shall become
effective or that New Tranche B Term Loan Amounts shall be effective and that
New Tranche B Term Loans (collectively, "NEW TRANCHE B TERM LOANS") shall be
made, as applicable, which shall be not less than 10 Business Days after the
date on which such notice is delivered to Administrative Agent and (B) the
identity of each Lender or other Person (each, a "NEW REVOLVING LENDER" or a
"NEW TRANCHE B LENDER", as applicable) to whom Borrower proposes any portion of
such New Commitments shall be allocated and the amounts of such allocations or
whom Borrower proposes shall make New Tranche B Term Loans, as applicable,
provided (x) Borrower shall arrange for such New Revolving Lenders or New
Tranche B Lenders at its sole cost and expense, (y) any Lender approached by
Borrower may elect
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in its sole discretion to provide a New Commitment or a New Tranche B Term Loan,
and (z) the identity of any Person not a Lender as a New Revolving Lender or a
New Tranche B Lender, as applicable, shall be reasonably acceptable to
Administrative Agent. Such New Commitments shall become effective or such New
Tranche B Term Loans shall be made, as applicable, as of such Transition Date
provided (1) no Default or Event of Default shall exist on such Transition Date
before or after giving effect to such New Commitments; (2) both before and after
giving effect to the making of any New Tranche B Term Loan each of the
conditions set forth in Section 3.2 shall be satisfied; (3) each increase in
Revolving Commitments shall be effected pursuant to one or more assignment
agreements and each extension of New Tranche B Term Loans shall be effected
pursuant to one or more joinder agreements, in each case in form and substance
reasonably satisfactory to Administrative Agent, and executed and delivered to
Administrative Agent and recorded in the Register, each of which shall be
subject to the requirements set forth in Section 10.6(d) and 10.6(f); (4)
Borrower shall make any payments required pursuant to Section 2.17(c); and (5)
Borrower shall deliver or cause to be delivered any legal opinions or other
documents reasonably requested by Administrative Agent in connection with any
such transaction. On any Transition Date on which New Commitments are effected,
subject to the satisfaction of the foregoing terms and conditions, (a) each of
the Revolving Lenders shall assign to each of the New Revolving Lenders, and
each of the New Revolving Lenders shall purchase from each of the Revolving
Lenders, at the principal amount thereof (together with accrued interest), such
interests in the Revolving Loans outstanding on such Transition Date as shall be
necessary in order that, after giving effect to all such assignments and
purchases, such Revolving Loans will be held by Revolving Lenders and New
Revolving Lenders ratably in accordance with their Revolving Commitments after
giving effect to the addition of such New Commitments to the Revolving
Commitments, (b) each New Commitment shall be a Revolving Commitment, and (c)
each New Revolving Lender shall become a Revolving Lender. On any Transition
Date on which New Tranche B Term Loans are to be made, subject to the
satisfaction of the foregoing terms and conditions, (i) each New Tranche B
Lender shall make a New Tranche B Term Loan to Borrower in an amount equal to
its New Tranche B Term Loan Amount, (ii) each New Tranche B Term Loan shall be a
Tranche B Term Loan, and (iii) each New Tranche B Lender shall become a Lender.
The Administrative Agent shall notify the Lenders promptly upon receipt of
Borrower's notice of each Transition Date and in respect thereof the New
Commitments and the New Revolving Lenders or the New Tranche B Term Amounts and
the New Tranche B Lenders, as applicable, and, in the case of each notice to any
Revolving Lender, the respective interests in such Revolving Lender's Revolving
Loans subject to the assignments contemplated by this paragraph. Notwithstanding
anything contained herein to the contrary, in the event that New Revolving
Lenders or New Tranche B Lenders, as applicable, are willing to make loans
available to Borrower at interest rates that are lower than the interest rates
then in effect with respect to the Revolving Loans or the Tranche B Term Loans,
as applicable, then each Credit Party and each Revolving Lender or each Lender
with Tranche B Term Loan Exposure, as applicable, agrees to use its reasonable
efforts to cause an amendment to this Agreement to be entered into to give
effect to the foregoing.
(b) Revolving Loans shall be in an aggregate minimum amount of $1,000,000
and integral multiples of $100,000 in excess of that amount.
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(c) Whenever Borrower desires that Lenders make Revolving Loans, Borrower
shall deliver to Administrative Agent a fully executed and delivered Funding
Notice no later than 10:00 a.m. (New York City time) at least three Business
Days in advance of the proposed Credit Date in the case of a Eurodollar Rate
Loan, and at least one Business Day in advance of the proposed Credit Date in
the case of a Revolving Loan that is an Alternate Base Rate Loan. If either the
Senior Subordinated Notes or the Holdings Notes have been issued, then at any
time on or after any Transition Date pursuant to which the sum of the Total
Utilization of Revolving Commitments and the Term Loan Exposure, either before
or after giving effect to any proposed borrowing, equals or exceeds, or would
equal or exceed, $200,000,000, each Funding Notice shall be accompanied by a
certificate of Borrower, executed on behalf of Borrower by an Authorized
Officer, demonstrating in reasonable detail compliance with the covenants
contained in each of the Senior Subordinated Note Indenture and the Holdings
Note Indenture, as applicable, restricting the incurrence of Indebtedness (as
defined therein). Except as otherwise provided herein, a Funding Notice for a
Revolving Loan that is a Eurodollar Rate Loan shall be irrevocable on and after
the related Interest Rate Determination Date, and Borrower shall be bound to
make a borrowing in accordance therewith.
(d) Notice of receipt of each Funding Notice in respect of Revolving Loans,
together with the amount of each Lender's Pro Rata Share thereof, if any,
together with the applicable interest rate, shall be provided by Administrative
Agent to each applicable Lender by telefacsimile with reasonable promptness, but
(provided Administrative Agent shall have received such notice by 11:00 a.m.
(New York City time)), not later than 2:00 p.m. (New York City time) on the same
day as Administrative Agent's receipt of such Notice from Borrower.
(e) Each Lender shall make the amount of its Revolving Loan available to
Administrative Agent not later than 12:00 Noon (New York City time) on the
applicable Credit Date by wire transfer of same day funds in Dollars, at
Administrative Agent's Principal Office. Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified herein,
Administrative Agent shall make the proceeds of such Revolving Loans available
to Borrower on the applicable Credit Date by causing an amount of same day funds
in Dollars equal to the proceeds of all such Revolving Loans received by
Administrative Agent from Lenders to be credited to the account of Borrower at
Administrative Agent's Principal Office or to such other account as may be
designated in writing to Administrative Agent by Borrower.
2.2A LETTERS OF CREDIT. (a) During the Revolving Commitment Period,
subject to the terms and conditions hereof, Borrower may request from time to
time that Issuing Bank issue Letters of Credit for the account of Borrower for
the purposes specified in the definition of Standby Letters of Credit; provided,
Borrower shall not request that Issuing Bank issue, and Issuing Bank shall not
issue:
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Commitments would exceed the Revolving
Commitments then in effect;
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(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed the Letter of Credit Sublimit then in
effect;
(iii) any Standby Letter of Credit having an expiration date later
than the earlier of (A) five (5) days prior to the Revolving Commitment
Termination Date and (B) the date which is one year from the date of issuance of
such Standby Letter of Credit; subject to the foregoing, Issuing Bank may agree
that a Standby Letter of Credit will automatically be extended for one or more
successive periods not to exceed one year each unless Issuing Bank elects not to
extend for any such additional period; provided, Issuing Bank shall not extend
any such Standby Letter of Credit if it has received written notice that a
Default or an Event of Default has occurred and is continuing at the time
Issuing Bank must elect to allow such extension; and
(iv) any Letter of Credit denominated in a currency other than
Dollars.
(b) Whenever Borrower desires the issuance of a Letter of Credit, it shall
deliver to Administrative Agent an Issuance Notice no later than 12:00 Noon (New
York City time) at least three Business Days, or in each case such shorter
period as may be agreed to by Issuing Bank in any particular instance, in
advance of the proposed date of issuance. Upon satisfaction or waiver of the
conditions set forth in Section 3.2, Issuing Bank shall issue the requested
Letter of Credit in accordance with Issuing Bank's standard operating
procedures; provided, however, that no Letter of Credit shall require payment
against a conforming draft or other request for payment to be made thereunder on
the same business day (under the laws of the jurisdiction in which the office of
the Issuing Bank to which such draft or other request for payment is required to
be presented is located) that such draft or other request for payment is
presented if such presentation is made after 10:00 a.m. (in the time zone of the
Issuing Bank) on such Business Day. Upon the issuance of any Letter of Credit,
Issuing Bank shall promptly notify each other Lender of such issuance, and the
amount of such Lender's respective participation in such Letter of Credit
pursuant to Section 2.2A(e).
(c) In determining whether to honor any drawing under any Letter of Credit
by the beneficiary thereof, Issuing Bank shall be responsible only to examine
the documents delivered under such Letter of Credit with reasonable care so as
to ascertain whether they appear on their face to be in accordance with the
terms and conditions of such Letter of Credit. As between Borrower and Issuing
Bank, Borrower assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by Issuing Bank by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the foregoing,
Issuing Bank shall not be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of any
such Letter of Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any
46
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of Issuing Bank, including any acts by any
Governmental Authority, and none of the above shall affect or impair, or prevent
the vesting of, any of Issuing Bank's rights or powers hereunder. Without
limiting the foregoing and in furtherance thereof, any action taken or omitted
by Issuing Bank under or in connection with the Letters of Credit or any
documents and certificates delivered thereunder, if taken or omitted in good
faith, shall not put Issuing Bank under any resulting liability to Borrower.
Notwithstanding anything to the contrary contained in this Section 2.2A(c),
Borrower shall retain any and all rights it may have against Issuing Bank for
any liability arising solely out of the gross negligence or willful misconduct
of Issuing Bank, as determined by a final, non-appealable judgment, of a court
of competent jurisdiction.
(d) In the event Issuing Bank has determined to honor a drawing under a
Letter of Credit, it shall immediately notify Borrower and Administrative Agent,
and Borrower shall reimburse Issuing Bank on or before the Business Day
immediately following the date on which such drawing is honored (the
"REIMBURSEMENT DATE") in an amount in Dollars and in same day funds equal to the
amount of such honored drawing; provided, anything contained herein to the
contrary notwithstanding, (i) unless Borrower shall have notified Administrative
Agent and Issuing Bank prior to 10:00 a.m. (New York City time) on the date such
drawing is honored that Borrower intends to reimburse Issuing Bank for the
amount of such honored drawing with funds other than the proceeds of Revolving
Loans, Borrower shall be deemed to have given a timely Funding Notice to
Administrative Agent requesting Lenders to make Revolving Loans that are
Alternate Base Rate Loans on the Reimbursement Date in an amount in Dollars
equal to the amount of such honored drawing, and (ii) subject to satisfaction or
waiver of the conditions specified in Section 3.2, Lenders shall, on the
Reimbursement Date, make Revolving Loans that are Alternate Base Rate Loans in
the amount of such honored drawing, the proceeds of which shall be applied
directly by Administrative Agent to reimburse Issuing Bank for the amount of
such honored drawing; and provided further, if for any reason proceeds of
Revolving Loans are not received by Issuing Bank on the Reimbursement Date in an
amount equal to the amount of such honored drawing, Borrower shall reimburse
Issuing Bank, on demand, in an amount in same day funds equal to the excess of
the amount of such honored drawing over the aggregate amount of such Revolving
Loans, if any, which are so received. Nothing in this Section 2.2A(d) shall be
deemed to relieve any Lender from its obligation to make Revolving Loans on the
terms and conditions set forth herein, and Borrower shall retain any and all
rights it may have against any Lender resulting from the failure of such Lender
to make such Revolving Loans under this Section 2.2A(d).
(e) Immediately upon the issuance of each Letter of Credit, each Lender
having a Revolving Commitment shall be deemed to have purchased, and hereby
agrees to irrevocably purchase, from Issuing Bank a participation in such Letter
of Credit and any drawings honored thereunder in an amount equal to such
Lender's Pro Rata Share (with respect to the Revolving
47
Commitments) of the maximum amount which is or at any time may become available
to be drawn thereunder. In the event that Borrower shall fail for any reason to
reimburse Issuing Bank as provided in Section 2.2A(d), Issuing Bank shall
promptly notify each other Lender of the unreimbursed amount of such honored
drawing and of such Lender's respective participation therein based on such
Lender's Pro Rata Share of the Revolving Commitments. Each other Lender shall
make available to Issuing Bank an amount equal to its respective participation,
in Dollars and in same day funds, at the office of Issuing Bank specified in
such notice, not later than 12:00 Noon (New York City time) on the first
Business Day after the date notified by Issuing Bank. In the event that any
Lender fails to make available to Issuing Bank on such business day the amount
of such Lender's participation in such Letter of Credit as provided in this
Section 2.2A(e), Issuing Bank shall be entitled to recover such amount on demand
from such Lender together with interest thereon at the rate customarily used by
Issuing Bank for the correction of errors among banks for three Business Days
and thereafter at the Alternate Base Rate. Nothing in this Section 2.2A(e) shall
be deemed to prejudice the right of any Lender to recover from Issuing Bank any
amounts made available by such Lender to Issuing Bank pursuant to this Section
in the event that it is determined by the final, non-appealable judgment of a
court of competent jurisdiction that the payment with respect to a Letter of
Credit in respect of which payment was made by such Lender constituted gross
negligence or willful misconduct on the part of Issuing Bank.
(f) The obligation of Borrower to reimburse Issuing Bank for drawings
honored under the Letters of Credit issued by it and to repay any Revolving
Loans made by Lenders pursuant to Section 2.2A(d) and the obligations of Lenders
under Section 2.2A(e) shall be unconditional and irrevocable and shall be paid
strictly in accordance with the terms hereof under all circumstances including
any of the following circumstances: (i) any lack of validity or enforceability
of any Letter of Credit; (ii) the existence of any claim, set-off, defense or
other right which Borrower or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), Issuing Bank, Lender or any other Person or,
in the case of a Lender (other than Issuing Bank), against Borrower, whether in
connection herewith, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Borrower or one of its
Subsidiaries and the beneficiary for which any Letter of Credit was procured);
(iii) any draft or other document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; (iv) payment by
Issuing Bank under any Letter of Credit against presentation of a draft or other
document which does not substantially comply with the terms of such Letter of
Credit; (v) any adverse change in the business, operations, properties, assets,
condition (financial or otherwise) or prospects of Borrower or any of its
Subsidiaries; (vi) any breach hereof or any other Credit Document by any party
thereto; (vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or (viii) the fact that an Event of Default or
a Default shall have occurred and be continuing; provided, in each case, that
payment by Issuing Bank under the applicable Letter of Credit shall not have
constituted gross negligence or willful misconduct of Issuing Bank under the
circumstances in question (as determined by a final, non-appealable judgment of
a court of competent jurisdiction).
48
(g) In addition to amounts payable as provided herein, Borrower hereby
agrees to protect, indemnify, pay and save harmless Issuing Bank from and
against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable fees, expenses and disbursements of
counsel and allocated costs of internal counsel) which Issuing Bank may incur or
be subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit by Issuing Bank, other than as a result of (1) the gross
negligence or willful misconduct of Issuing Bank or (2) the wrongful dishonor by
Issuing Bank of a proper demand for payment made under any Letter of Credit
issued by it, or (ii) the failure of Issuing Bank to honor a drawing under any
such Letter of Credit as a result of any acts by any Governmental Authority.
(h) Upon the occurrence and during the continuance of an Event of Default
at the request of Issuing Bank or Requisite Class Lenders having more than 50%
of the aggregate Revolving Exposure, Borrower shall deliver funds for deposit in
the Collateral Account and pay to Administrative Agent an amount equal to the
Letter of Credit Usage at such time. If for any reason the aggregate amount
delivered by Borrower for deposit in the Collateral Account as aforesaid is less
than the Letter of Credit Usage at such time, the aggregate amount so delivered
by Borrower shall be apportioned among all outstanding Letters of Credit for
purposes of this Section 2.2A(h) in accordance with the ratio of the maximum
amount available for drawing under each such Letter of Credit (as to such Letter
of Credit, the "MAXIMUM AVAILABLE AMOUNT") to the Letter of Credit Usage at such
time. Upon any drawing under any outstanding Letter of Credit in respect of
which Borrower has deposited in the Collateral Account any amounts described
above, Administrative Agent shall apply such amounts to reimburse Issuing Bank
for the amount of such drawing. In the event of cancellation or expiration of
any Letter of Credit in respect of which Borrower has deposited in the
Collateral Account any amount described above, or in the event of any reduction
in the Maximum Available Amount under such Letter of Credit, Administrative
Agent shall apply the amount then on deposit in the Collateral Account in
respect of such Letter of Credit (less, in the case of such a reduction, the
Maximum Available Amount under such Letter of Credit immediately after such
reduction) first, to the payment of any amounts payable to Administrative Agent
pursuant to Section 9, second, to the extent of any excess, to the cash
collateralization pursuant to the terms of this Agreement of any outstanding
Letters of Credit in respect of which Borrower has failed to pay all or a
portion of the amounts described above (such cash collateralization to be
apportioned among all such Letters of Credit in the manner described above), and
third, to the extent of any further excess, to the payment of any other
outstanding Obligations in such order as directed by the Lenders holding more
than 50% of the sum of outstanding Revolving Commitments and Revolving Loans.
2.3 PRO RATA SHARES; AVAILABILITY OF FUNDS. (a) All Loans shall be made
by Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in such other Lender's obligation to make a Loan requested
hereunder nor shall the Revolving Commitment of any Lender be increased or
decreased as a result of a default by any other Lender in such other Lender's
obligation to make a Loan requested hereunder.
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(b) Unless Administrative Agent shall have been notified by any Lender
prior to the applicable Credit Date that such Lender does not intend to make
available to Administrative Agent the amount of such Lender's Loan requested on
such Credit Date, Administrative Agent may assume that such Lender has made such
amount available to Administrative Agent on such Credit Date and Administrative
Agent may, in its sole discretion, but shall not be obligated to, make available
to Borrower corresponding amount on such Credit Date. If such corresponding
amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Credit Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Alternate Base Rate. If
such Lender does not pay such corresponding amount forthwith upon Administrative
Agent's demand therefor, Administrative Agent shall promptly notify Borrower and
Borrower shall immediately pay such corresponding amount to Administrative Agent
together with interest thereon, for each day from such Credit Date until the
date such amount is paid to Administrative Agent, at the rate payable hereunder
for Alternate Base Rate Loans for such Class of Loans. Nothing in this Section
2.3(b) shall be deemed to relieve any Lender from its obligation to fulfill its
Revolving Commitments hereunder or to prejudice any rights that Borrower may
have against any Lender as a result of any default by such Lender hereunder.
2.4 USE OF PROCEEDS. The proceeds of the Term Loans and the Revolving
Loans, if any, made on the Closing Date shall be applied by Borrower together
with the Equity Contribution and the proceeds of the Senior Subordinated Notes,
if issued on or prior to the Closing Date, to pay the Merger Consideration, to
finance the Capstar Contribution (including payment of an approximately
$5,500,000 Cash purchase price adjustment to Capstar), to repay Existing Debt
and to pay Transaction Costs. The proceeds of the Revolving Loans and Letters
of Credit made after the Closing Date shall be applied by Borrower for working
capital and other general corporate purposes of Borrower and its Included
Subsidiaries, including for Permitted Acquisitions and Consolidated Capital
Expenditures to the extent permitted pursuant to Sections 6.6 and 6.7. No
portion of the proceeds of any Credit Extension shall be used by Borrower or any
of its Subsidiaries in any manner that might cause such Credit Extension or the
application of such proceeds to violate Regulation T, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation thereof or to violate the Exchange Act, in each case as in effect on
the date or dates of such Credit Extension and such use of proceeds.
2.5 EVIDENCE OF DEBT; REGISTER; LENDERS' BOOKS AND RECORDS. (a) Each
Lender shall maintain on its internal records an account or accounts evidencing
the indebtedness of Borrower to such Lender, including the amounts of the Loans
made by it and each repayment and prepayment in respect thereof. Any such
recordation shall be conclusive and binding on Borrower, absent manifest error;
provided, failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Revolving Commitments or Borrower's
Obligations in respect of any applicable Loans; and provided further, in the
event of any inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
50
(b) Administrative Agent shall maintain at its Principal Office a register
for the recordation of the names and addresses of Lenders and the Revolving
Commitments and Loans of each Lender from time to time (the "REGISTER"). The
Register shall be available for inspection by Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
Administrative Agent shall record in the Register the Revolving Commitments and
the Loans, and each repayment or prepayment in respect of the principal amount
of the Loans, and any such recordation shall be conclusive and binding on
Borrower and each Lender, absent manifest error; provided, failure to make any
such recordation, or any error in such recordation, shall not affect any
Lender's Revolving Commitments or Borrower's Obligations in respect of any Loan.
Borrower hereby designates CIBOC to serve as Borrower's agent solely for
purposes of maintaining the Register as provided in this Section 2.5, and
Borrower hereby agrees that, to the extent CIBOC serves in such capacity, CIBOC
and its officers, directors, employees, agents and affiliates shall constitute
"Indemnitees".
(c) If so requested by any Lender by written notice to Borrower (with a
copy to Administrative Agent) at least two Business Days prior to the Closing
Date, or at any time thereafter, Borrower shall execute and deliver to such
Lender (and/or, if applicable and if so specified in such notice, to any Person
who is an assignee of such Lender pursuant to Section 10.6) on the Closing Date
(or, if such notice is delivered after the Closing Date, promptly after
Borrower's receipt of such notice) a promissory note or notes to evidence such
Lender's Tranche A Term Loan, Tranche B Term Loan, Tranche C Term Loan, or
Revolving Loan, as the case may be.
2.6 INTEREST PAYMENTS. (a) Except as otherwise set forth herein, each
Class of Loan shall bear interest on the unpaid principal amount thereof from
the date made through maturity or repayment (whether by acceleration or
otherwise) thereof as follows:
(i) if an Alternate Base Rate Loan, at the Alternate Base Rate
plus the Applicable Margin; or
(ii) if a Eurodollar Rate Loan, at the Adjusted Eurodollar Rate
plus the Applicable Margin.
(b) The basis for determining the rate of interest with respect to any
Loan, and the Interest Period with respect to any Eurodollar Rate Loan, shall be
selected by Borrower and notified to Administrative Agent and Lenders pursuant
to the applicable Funding Notice or Conversion/Continuation Notice, as the case
may be; provided, no Eurodollar Rate Loan with an Interest Period in excess of
one month shall be available until the date that Syndication Agent notifies
Borrower and Administrative Agent that the primary syndication of the Loans and
Revolving Commitments has been completed, as determined by Syndication Agent.
If on any day a Loan is outstanding with respect to which a Funding Notice or
Conversion/Continuation Notice has not been delivered to Administrative Agent in
accordance with the terms hereof specifying the applicable basis for determining
the rate of interest, then for that day such Loan shall be an Alternate Base
Rate Loan.
51
(c) In connection with Eurodollar Rate Loans there shall be no more than
10 Interest Periods outstanding at any time. In the event Borrower fails to
specify between an Alternate Base Rate Loan or a Eurodollar Rate Loan or fails
to specify the Interest Period for any Eurodollar Rate Loan in the applicable
Funding Notice or Conversion/Continuation Notice, such Loan (if outstanding as a
Eurodollar Rate Loan) will be automatically converted into an Alternate Base
Rate Loan on the last day of the then-current Interest Period for such Loan (or
if outstanding as an Alternate Base Rate Loan) will remain as, or (if not then
outstanding) will be made as, an Alternate Base Rate Loan. As soon as
practicable after 10:00 a.m. (New York City time) on each Interest Rate
Determination Date, Administrative Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon all parties)
the interest rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable Interest Period and
shall promptly give notice thereof (in writing or by telephone confirmed in
writing) to Borrower and each Lender.
(d) Interest payable pursuant to Section 2.6(a) shall be computed (i) in
the case of Alternate Base Rate Loans based on the Prime Rate, on the basis of a
365-day or 366-day year, as the case may be, and (ii in the case of Alternate
Base Rate Loans based on the Federal Funds Effective Rate or Eurodollar Rate
Loans, on the basis of a 360-day year, in each case for the actual number of
days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to an Alternate Base Rate Loan
being converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Alternate Base Rate Loan, as the case may be, shall
be included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to an Alternate Base
Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of
such Alternate Base Rate Loan to such Eurodollar Rate Loan, as the case may be,
shall be excluded; provided, if a Loan is repaid on the same day on which it is
made, one day's interest shall be paid on that Loan.
(e) Except as otherwise set forth herein, interest on each Loan shall be
payable in arrears on and to (i) each Interest Payment Date applicable to that
Loan; (ii any prepayment of that Loan, whether voluntary or mandatory, to the
extent accrued on the amount being prepaid; and (ii at maturity, including final
maturity; provided, however that with respect to any prepayment of an Alternate
Base Rate Loan, accrued interest shall instead be payable on the applicable
Interest Payment Date.
(f) Borrower agrees to pay to Issuing Bank, with respect to drawings
honored under any Letter of Credit, interest on the amount paid by Issuing Bank
in respect of each such honored drawing from the date such drawing is honored to
but excluding the date such amount is reimbursed by or on behalf of Borrower at
a rate equal to (i) for the period from the date such drawing is honored to but
excluding the applicable Reimbursement Date, the rate of interest otherwise
payable hereunder with respect to Revolving Loans that are Alternate Base Rate
Loans, and (ii) thereafter, a rate which is 2% per annum in excess of the rate
of interest otherwise payable hereunder with respect to Revolving Loans that are
Alternate Base Rate Loans.
52
(g) Interest payable pursuant to Section 2.6(f) shall be computed on the
basis of a 360-day year for the actual number of days elapsed in the period
during which it accrues, and shall be payable on demand or, if no demand is
made, on the date on which the related drawing under a Letter of Credit is
reimbursed in full. Promptly upon receipt by Issuing Bank of any payment of
interest pursuant to Section 2.6(f), Issuing Bank shall distribute to each other
Lender, out of the interest received by Issuing Bank in respect of the period
from the date such drawing is honored to but excluding the date on which Issuing
Bank is reimbursed for the amount of such drawing (including any such
reimbursement out of the proceeds of any Revolving Loans), the amount that such
Lender would have been entitled to receive in respect of the letter of credit
fee that would have been payable in respect of such Letter of Credit for such
period if no drawing had been honored under such Letter of Credit. In the event
Issuing Bank shall have been reimbursed by the other Lenders for all or any
portion of such honored drawing, Issuing Bank shall distribute to each Lender
which has paid all amounts payable by it under Section 2.2A(e) with respect to
such honored drawing such Lender's Pro Rata Share of any interest received by
Issuing Bank in respect of that portion of such honored drawing so reimbursed by
the other Lenders for the period from the date on which Issuing Bank was so
reimbursed by the other Lenders to but excluding the date on which such portion
of such honored drawing is reimbursed by Borrower. Any such distribution shall
be made to a Lender at its primary address set forth below its name on Appendix
B or at such other address as such Lender may request.
2.7 CONVERSION/CONTINUATION. (a) Subject to Section 2.17 and so long as
no Default or Event of Default shall have occurred and then be continuing in the
case of any conversion to or continuance as a Eurodollar Rate Loan, Borrower
shall have the option:
(i) to convert at any time all or any part of any Term Loan or
Revolving Loan equal to $1,000,000 and integral multiples of $100,000 in excess
of that amount from one Type of Loan to another Type of Loan; provided, a
Eurodollar Rate Loan may only be converted into an Alternate Base Rate Loan on
the expiration of the Interest Period applicable to such Eurodollar Rate Loan
unless Borrower shall pay all amounts due under Section 2.17 in connection with
any such conversion; or
(ii) upon the expiration of any Interest Period applicable to any
Eurodollar Rate Loan, to continue all or any portion of such Loan equal to
$1,000,000 and integral multiples of $100,000 in excess of that amount as a
Eurodollar Rate Loan.
(b) Borrower shall deliver a Conversion/Continuation Notice to
Administrative Agent no later than 10:00 a.m. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to an Alternate Base Rate Loan) and at least three Business Days in
advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). Except as
otherwise provided herein, a Conversion/Continuation Notice for conversion to,
or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
53
Determination Date, and Borrower shall be bound to effect a conversion or
continuation in accordance therewith.
2.8 DEFAULT INTEREST. Upon the occurrence and during the continuance of
an Event of Default of the type specified in Section 8.1(a), the principal
amount of all Loans, and, to the extent permitted by applicable law, any
interest payments on the Loans or any fees or other amounts owed hereunder not
paid when due, in each case whether at stated maturity, by notice of prepayment,
by acceleration or otherwise, shall thereafter bear interest (including post-
petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate that is 2% per annum in
excess of the interest rate otherwise payable hereunder with respect to the
applicable Loans (or, in the case of any such fees and other amounts, at a rate
which is 2% per annum in excess of the interest rate otherwise payable hereunder
for Alternate Base Rate Loans); provided, in the case of Eurodollar Rate Loans,
upon the expiration of the Interest Period in effect at the time any such
increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Alternate Base Rate Loans and shall thereafter bear interest
payable upon demand at a rate which is 2% per annum in excess of the interest
rate otherwise payable hereunder for Alternate Base Rate Loans. Payment or
acceptance of the increased rates of interest provided for in this Section 2.8
is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Administrative Agent or any Lender.
2.9 FEES. (a) Borrower agrees to pay to Lenders having Revolving
Exposure the following fees:
(i) commitment fees equal to (1) the average of the daily excess of
the Revolving Commitments, minus the Total Utilization of Revolving Commitments,
times (2) the Applicable Revolving Commitment Fee Percentage; and
(ii) letter of credit fees equal to (1) the Applicable Margin for
Revolving Loans that are Eurodollar Rate Loans, times (2) the average daily
Letter of Credit Usage (determined as of the close of business on any date of
determination).
All fees referred to in this Section 2.9(a) shall be paid to Administrative
Agent at its Principal Office and upon receipt, Administrative Agent shall
promptly distribute to each Lender its Pro Rata Share thereof.
(b) Borrower agrees to pay directly to Issuing Bank, for its own account,
the following fees:
(i) a fronting fee equal to 0.250%, per annum, times the aggregate
daily amount available to be drawn under all Letters of Credit (determined as of
the close of business on any date of determination); and
54
(ii) such documentary and processing charges for any issuance,
amendment, transfer or payment of a Letter of Credit that are in accordance with
Issuing Bank's standard schedule for such charges and as in effect at the time
of such issuance, amendment, transfer or payment, as the case may be.
(c) All fees referred to in Section 2.9(a) shall be calculated on the
basis of a 360-day year and the actual number of days elapsed and shall be
payable quarterly in arrears on March 31, June 30, September 30 and December 31
of each year during the Revolving Commitment Period, commencing on the first
such date to occur after the Closing Date, and on the Revolving Commitment
Termination Date.
(d) In addition to any of the foregoing fees, Borrower agrees to pay to
Agents such other fees in the amounts and at the times separately agreed upon
thereby.
2.10. SCHEDULED PAYMENTS/REDUCTIONS. (a) The principal amounts of the Term
Loans shall be repaid according to the annual percentages set forth below in
consecutive installments (each, an "Installment") on June 30 and December 31 of
each Fiscal Year (each, an "Installment Date") occurring in each of the Fiscal
Years set forth below, commencing June 30, 2000, with 50% of each annual payment
being paid on each Installment Date:
====================================================================
Year Tranche A Tranche B Tranche C
Term Loan Term Loan Term Loan
Installments Installments Installments
--------------------------------------------------------------------
2000 7.5% 1.0% 7.5%
--------------------------------------------------------------------
2001 12.5% 1.0% 12.5%
--------------------------------------------------------------------
2002 17.5% 1.0% 17.5%
--------------------------------------------------------------------
2003 20.0% 1.0% 20.0%
--------------------------------------------------------------------
2004 20.0% 15.0% 20.0%
--------------------------------------------------------------------
2005 22.5% 25.0% 22.5%
--------------------------------------------------------------------
2006 N/A Remaining N/A
Aggregate
Principal
Amount
--------------------------------------------------------------------
Totals 100.0% 100.0% 100.0%
====================================================================
Notwithstanding the foregoing, (i) such Installments shall be reduced in
connection with any voluntary or mandatory prepayments of the Tranche A Term
Loans, the Tranche B Term Loans or the Tranche C Term Loans, as the case may be,
in accordance with Section 2.13; and (ii) the Tranche A Term Loans, the Tranche
B Term Loans, and the Tranche C Term Loans, together with all other amounts owed
hereunder with respect thereto, shall be paid in full no later than the
55
Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity Date or the
Tranche C Term Loan Maturity Date, as the case may be, and the final Installment
payable by Borrower on each such Date shall be in an amount sufficient to repay
all amounts owing by Borrower hereunder with respect to the Tranche A Term
Loans, the Tranche B Term Loans or the Tranche C Term Loans, as applicable.
(b) Following any Transition Date, the aggregate Revolving Commitments
shall be reduced quarterly, commencing on March 31, 2001, by 5% of the aggregate
New Commitments on December 31, 2000.
2.11. VOLUNTARY PREPAYMENTS/REDUCTIONS.
(a) Prepayments. (i) Any time and from time to time:
-----------
(1) with respect to Term Loans, Borrower may prepay any such
Loans on any Business Day in whole or in part, in an aggregate minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess of that amount; and
(2) with respect to Revolving Loans, Borrower may prepay any such
Loans on any Business Day in whole or in part in an aggregate minimum amount of
$2,500,000 and integral multiples of $1,000,000 in excess of that amount;
(ii) All such prepayments shall be made:
(1) upon not less than one Business Day's prior written or
telephonic notice, in the case of Alternate Base Rate Loans; and
(2) upon not less than three Business Days' prior written or
telephonic notice, in the case of Eurodollar Rate Loans;
in each case given to Administrative Agent by 12:00 noon (New York City time) on
the date required and, if given by telephone, promptly confirmed in writing to
Administrative Agent (and Administrative Agent will promptly transmit such
telephonic or original notice for Term Loans or Revolving Loans, as the case may
be, by telefacsimile or telephone to each Lender). Upon the giving of any such
notice, the principal amount of the Loans specified in such notice shall become
due and payable on the prepayment date specified therein.
(b) Reductions.
----------
(i) Borrower may, upon not less than three Business Days' prior
written or telephonic notice confirmed in writing to Administrative Agent (which
original written or telephonic notice Administrative Agent will promptly
transmit by telefacsimile or telephone to each applicable Lender), at any time
and from time to time terminate in whole or permanently reduce in part, without
56
premium or penalty, the Revolving Commitments in an amount up to the amount by
which the Revolving Commitments exceed the Total Utilization of Revolving
Commitments at the time of such proposed termination or reduction; provided, any
such partial reduction of the Revolving Commitments shall be in an aggregate
minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of
that amount.
(ii) Borrower's notice to Administrative Agent shall designate the
date (which shall be a Business Day) of such termination or reduction and the
amount of any partial reduction, and such termination or reduction of the
Revolving Commitments shall be effective on the date specified in Borrower's
notice and shall reduce the Revolving Commitment of each Lender proportionately
to its Pro Rata Share thereof.
2.12. MANDATORY PREPAYMENTS/REDUCTIONS. (a) Asset Sales. No later than
-----------
the first Business Day following the date of receipt by Holdings, Borrower or
any of their respective Subsidiaries of any Net Asset Sale Proceeds (other than
any Net Asset Sale Proceeds received in connection with (i) an intercompany
Asset Sale permitted pursuant to Section 6.7(a) or (ii) an Affiliate Sale),
Borrower shall prepay the Loans and/or the Revolving Commitments shall be
permanently reduced as set forth in Section 2.13 in an aggregate amount equal to
such Net Asset Sale Proceeds; provided, (i) so long as no Default or Event of
Default shall have occurred and be continuing, (ii) to the extent that aggregate
Net Asset Sale Proceeds from the Closing Date through the applicable date of
determination do not exceed $5,000,000 and (iii) Borrower shall have delivered a
certificate of Borrower, executed on behalf of Borrower by an Authorized
Officer, setting forth the details with respect thereto on such first Business
Day, Borrower shall have the option, directly or through one or more of its
Included Subsidiaries (except that if such proceeds were received by any
Subsidiary other than an Included Subsidiary, such Subsidiary shall be permitted
to make such investment), to invest such Net Asset Sale Proceeds within one
hundred eighty (180) days of receipt thereof (or within two hundred seventy
(270) days of receipt thereof, if Borrower shall have entered into a written
commitment to reinvest such proceeds within such 180-day period) in long term
productive assets of the general type used in the business of Borrower and its
Included Subsidiaries (except as set forth above); provided further, pending any
such investment all such Net Asset Sale Proceeds shall be applied to prepay
outstanding Revolving Loans (without a reduction in Revolving Commitments).
(b) Insurance/Condemnation Proceeds. No later than the first Business Day
-------------------------------
following the date of receipt by Holdings, Borrower or any of their respective
Subsidiaries, or Administrative Agent as loss payee, of any Net
Insurance/Condemnation Proceeds, Borrower shall prepay the Loans and/or the
Revolving Commitments shall be permanently reduced as set forth in Section 2.13
in an aggregate amount equal to such Net Insurance/Condemnation Proceeds;
provided, (i) so long as no Default or Event of Default shall have occurred and
be continuing, (ii) to the extent that aggregate Net Insurance/Condemnation
Proceeds from the Closing Date through the applicable date of determination do
not exceed $5,000,000 and (iii) Borrower shall have delivered a certificate of
Borrower, executed on behalf of Borrower by an Authorized Officer, setting forth
the details with respect thereto on such first Business Day, Borrower shall have
the option, directly or through one
57
or more of its Included Subsidiaries (except that if such proceeds were received
by any Subsidiary other than an Included Subsidiary, such Subsidiary shall be
permitted to make such investment), to invest such Net Insurance/Condemnation
Proceeds within one hundred eighty (180) days of receipt thereof in long term
productive assets of the general type used in the business of Borrower and its
Included Subsidiaries (except as set forth above), which investment may include
the repair, restoration or replacement of the applicable assets of Borrower or
its Included Subsidiaries; provided further, pending any such investment all
such Net Insurance/Condemnation Proceeds, as the case may be, shall be applied
to prepay outstanding Revolving Loans (without a reduction in Revolving
Commitments).
(c) Excess Cash Flow. In the event that the Total Leverage Ratio as of the
----------------
end of any Fiscal Year commencing with December 31, 2000 shall be greater than
or equal to 5.00:1.00, Borrower shall, no later than ninety (90) days after the
end of such Fiscal Year, prepay the Loans and/or the Revolving Commitments shall
be permanently reduced as set forth in Section 2.13 in an aggregate amount equal
to 100% of any Consolidated Excess Cash Flow for such Fiscal Year. In the event
that the Total Leverage Ratio as of the end of any Fiscal Year commencing with
December 31, 2000 shall be greater than or equal to 4.00:1.00, but less than
5.00:1.00, Borrower shall, no later than ninety (90) days after the end of such
Fiscal Year, prepay the Loans and/or the Revolving Commitments shall be
permanently reduced as set forth in Section 2.13 in an aggregate amount equal to
50% of any Consolidated Excess Cash Flow. Borrower may use Consolidated Excess
Cash Flow to the extent not required to prepay the Loans or reduce Revolving
Commitments as set forth in the preceding sentence (i) with the consent of
Requisite Lenders, to pay Deferred Management Fees to the extent permitted by
Section 6.4(a)(viii) or (ii) to make Permitted Acquisitions to the extent
permitted by Section 6.7(f).
(d) Issuance of Debt. No later than the first Business Day following
----------------
receipt by Holdings or Borrower of any Cash proceeds from (a) if any Tranche C
Term Loan is made, the first issuance of High Yield Debt after the Closing Date,
Borrower shall prepay the Loans in the aggregate amount necessary (such
aggregate amount not to exceed the Net High Yield Proceeds received in respect
of such issuance) to repay the Tranche C Term Loans in full, plus any additional
amount necessary to cause each of the Senior Leverage Ratio and the Total
Leverage Ratio to be not greater than 0.25:1.00 below the required level
therefor at such time pursuant to Section 6.6, and (b) in connection with each
other issuance of High Yield Debt (other than on or prior to the Closing Date),
Borrower shall prepay the Loans in an aggregate amount equal to 100% of the Net
High Yield Proceeds received in respect of such issuance.
(e) Revolving Loans. (i) Borrower shall from time to time prepay the
---------------
Revolving Loans to the extent necessary so that the Total Utilization of
Revolving Commitments shall not at any time exceed the Revolving Commitments
then in effect.
(ii) Borrower shall prepay Revolving Loans with 100% of Net Asset Sale
Proceeds received in connection with Affiliate Sales.
58
(f) Prepayment Certificate. Concurrently with any prepayment of the Loans
----------------------
and/or reduction of the Revolving Commitments pursuant to this Section 2.12,
Borrower shall deliver to Administrative Agent a certificate of an Authorized
Officer demonstrating the calculation of the amount of such prepayment, as the
case may be. In the event that Borrower shall subsequently determine that the
actual amount that should have been applied to prepay the Loans exceeded the
amount set forth in such certificate, Borrower shall promptly make an additional
prepayment of the Loans and/or the Revolving Commitments shall be permanently
reduced in an amount equal to such excess, and Borrower shall concurrently
therewith deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the derivation of such excess.
2.13. APPLICATION OF PREPAYMENTS/REDUCTIONS; PREPAYMENT FEE. (a) Any
prepayment of any Loan pursuant to Section 2.11(a) shall be applied to repay
Term Loans or Revolving Loans as specified by Borrower in the applicable notice
of prepayment; provided, in the event Borrower fails to specify the Loans to
which any such prepayment shall be applied, such prepayment shall be applied as
follows:
first, to repay outstanding Revolving Loans to the full extent
thereof; and
second, to prepay the Tranche A Term Loans, the Tranche B Term Loans
and the Tranche C Term Loans.
All voluntary prepayments of Term Loans shall be applied to prepay the Tranche A
Term Loans, the Tranche B Term Loans and the Tranche C Term Loans on a pro rata
basis (in accordance with the respective outstanding principal amounts thereof)
and shall be further applied on a pro rata basis to each scheduled Installment
of principal of the Tranche A Term Loans, the Tranche B Term Loans and the
Tranche C Term Loans.
(b) (i) Any amount required to be paid pursuant to Sections 2.12(a)
through 2.12(c) shall be applied as follows:
first, to prepay the Tranche A Term Loans, the Tranche B Term Loans
and the Tranche C Loans on a pro rata basis (in accordance with the respective
outstanding principal amounts thereof) and shall be further applied on a pro
rata basis to each scheduled Installment of principal of the Tranche A Term
Loans, the Tranche B Term Loans and the Tranche C Loans;
second, to the extent of any remaining portion of such amount, to
prepay the Revolving Loans to the full extent thereof and to further permanently
reduce the Revolving Commitments by the amount of such prepayment;
third, to prepay outstanding reimbursement obligations with respect to
Letters of Credit and to further permanently reduce the Revolving Loan
Commitments by the amount of such payment;
59
fourth, to cash collateralize Letters of Credit as provided in Section
2.2A and to further permanently reduce the Revolving Loan Commitments by the
amount of such cash collateralization; and
fifth, to the extent of any remaining portion of such amount (which
remaining portion need not be paid to the Lenders), to further permanently
reduce the Revolving Commitments to the full extent thereof.
(ii) Any amount required to be paid pursuant to Section 2.12(d) shall
be applied as follows:
first, to prepay in full the Tranche C Term Loans;
second, to the extent of any remaining portion of such amount to
prepay the Tranche A Term Loans and the Tranche B Terms Loan on a pro rata basis
(in accordance with the respective outstanding principal amounts thereof) and
shall be further applied on a pro rata basis to each scheduled Installment of
principal of the Tranche A Term Loans and Tranche B Term Loans; and
third, to the extent of any remaining portion of such amount, to
prepay the Revolving Loans to the full extent thereof.
(c) Anything contained herein to the contrary notwithstanding, so long as
any Tranche A or Tranche C Term Loans are outstanding, in the event Borrower is
required to make any mandatory prepayment (a "WAIVABLE MANDATORY PREPAYMENT") of
the Tranche B Term Loans, not less than three Business Days prior to the date
(the "REQUIRED PREPAYMENT DATE") on which Borrower is required to make such
Waivable Mandatory Prepayment, Borrower shall notify Administrative Agent of the
amount of such prepayment, and Administrative Agent will promptly thereafter
notify each Lender holding an outstanding Tranche B Term Loan of the amount of
such Lender's Pro Rata Share of such Waivable Mandatory Prepayment and such
Lender's option to refuse such amount. Each such Lender may exercise such option
by giving written notice to Borrower and Administrative Agent of its election to
do so on or before the first Business Day (the "CUTOFF DATE") prior to the
Required Prepayment Date (it being understood that any Lender which does not
notify Borrower and Administrative Agent of its election to exercise such option
on or before the Cutoff Date shall be deemed to have elected, as of the Cutoff
Date, not to exercise such option). On the Required Prepayment Date, Borrower
shall pay to Administrative Agent the amount of the Waivable Mandatory
Prepayment, which amount shall be applied (i) in an amount equal to that portion
of the Waivable Mandatory Prepayment payable to those Lenders that have elected
not to exercise such option, to prepay the Tranche B Term Loans of such Lenders
(which prepayment shall be applied as set forth in Section 2.13(b) above) and
(ii) in an amount equal to that portion of the Waivable Mandatory Prepayment
otherwise payable to those Lenders that have elected to exercise such option, in
the case of (A) any prepayment pursuant to Section 2.13(b)(i), to prepay the
Tranche A Term Loans and the Tranche C Term Loans on a pro rata basis (in
accordance with the respective outstanding principal amounts thereof) and shall
be further applied on a pro rata basis to each
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scheduled Installment of principal of the Tranche A Term Loans and the Tranche C
Term Loans and (B) any prepayment pursuant to Section 2.13(b)(ii), to prepay the
Tranche A Term Loans, which prepayment shall be applied on a pro rata basis to
each scheduled Installment of principal of the Tranche A Term Loans.
(d) Considering each Class of Loans being prepaid separately, any
prepayment thereof shall be applied first to Alternate Base Rate Loans to the
full extent thereof before application to Eurodollar Rate Loans, in each case in
a manner which minimizes the amount of any payments required to be made by
Borrower pursuant to Section 2.17(c).
(e) Each repayment of the Tranche B Term Loan, other than pursuant to
Section 2.10, shall be accompanied by a prepayment fee in an amount equal to (i)
for each payment made on or prior to the first anniversary of the Closing Date,
2.00% of the amount of such repayment, and (ii) for each payment made after the
first anniversary of the Closing Date but on or prior to the second anniversary
of the Closing Date, 1.00% of the amount of such repayment.
(f) Any amounts received by Administrative Agent pursuant to the Capstar
Contribution Agreement shall be applied to the Obligations (including the Loans)
in such order, in such amounts and at such times as Requisite Lenders may
decide.
2.14. ALLOCATION OF CERTAIN PAYMENTS AND PROCEEDS. If an Event of Default
shall have occurred and not otherwise be waived, and the maturity of the
Obligations shall have been accelerated pursuant to Section 8.1, all payments or
proceeds received by Agents hereunder in respect of any of the Obligations,
shall be applied by Agents in the following order:
first, amounts due to Administrative Agent pursuant to Section 10.2;
second, amounts due to Lenders, if any, pursuant to Sections 2.17,
2.18 or 2.19, to be applied for the ratable benefit of Lenders without
distinction or preference as among them;
third, amounts due to Lenders pursuant to Section 10.2, to be applied
for the ratable benefit of Lenders without distinction or preference as among
them;
fourth, amounts due to Agents pursuant to Section 2.9(d), to be
applied in accordance therewith;
fifth, amounts due to Lenders pursuant to Section 2.9 and payments of
interest on Loans, to be applied for the ratable benefit of Lenders, without
distinction or preference as among them;
sixth, payments of principal on Loans, and all Obligations then
payable to any Lender Counterparty pursuant to an Interest Rate Agreement
required pursuant to Section 5.11 permitted
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hereby, to be applied for the ratable benefit of Lenders and such Lender
Counterparties, without distinction or preference as among them;
seventh, amounts due to Indemnitees pursuant to Section 10.3, to be
applied for the ratable benefit thereof;
eighth, payments of all other Obligations due under any of the Credit
Documents, if any, to be applied for the ratable benefit of Lenders and Agents;
and
ninth, any surplus remaining after application as provided for herein,
to Borrower or as otherwise may be required by applicable law.
2.15. GENERAL PROVISIONS REGARDING PAYMENTS. (a) All payments by Borrower
of principal, interest, fees and other Obligations shall be made in Dollars in
same day funds, without defense, setoff or counterclaim, free of any restriction
or condition, and delivered to Administrative Agent not later than 12:00 Noon
(New York City time) on the date due at Administrative Agent's Principal Office
for the account of Lenders; funds received by Administrative Agent after that
time on such due date shall be deemed to have been paid by Borrower on the next
succeeding Business Day.
(b) All payments in respect of the principal amount of any Loan shall
include payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments (and, in any event, any payments in respect of
any Loan on a date when interest is due and payable with respect to such Loan)
shall be applied to the payment of interest before application to principal;
provided, however, that with respect to any prepayment of an Alternate Base Rate
Loan, accrued interest shall instead be payable on the applicable Interest
Payment Date.
(c) Administrative Agent shall promptly distribute to each Lender at such
address as such Lender shall indicate in writing, such Lender's applicable Pro
Rata Share of all payments and prepayments of principal and interest due
hereunder, together with all other amounts due thereto, including, without
limitation, all fees payable with respect thereto, to the extent received by
Administrative Agent.
(d) Notwithstanding the foregoing provisions hereof, if any
Conversion/Continuation Notice is withdrawn as to any Affected Lender or if any
Affected Lender makes Alternate Base Rate Loans in lieu of its Pro Rata Share of
any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
(e) Subject to the provisos set forth in the definition of "INTEREST
PERIOD", whenever any payment to be made hereunder shall be stated to be due on
a day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and such extension of time shall be included in the
computation of the payment of interest hereunder or of the Revolving Commitment
fees hereunder, as the case may be.
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(f) Borrower hereby authorizes Administrative Agent to charge Borrower's
accounts with Administrative Agent in order to cause timely payment to be made
to Administrative Agent of all principal, interest, fees and expenses due
hereunder (subject to sufficient funds being available in its accounts for that
purpose).
(g) Administrative Agent shall deem any payment by or on behalf of Borrower
hereunder that is not made in same day funds prior to 12:00 noon (New York City
time) to be a non-conforming payment. Any such payment shall not be deemed to
have been received by Administrative Agent until the later of (i) the time such
funds become available funds, and (ii) the applicable next Business Day.
Administrative Agent shall give prompt telephonic notice to Borrower and each
applicable Lender (confirmed in writing) if any payment is non-conforming. Any
non-conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section 8.1(a). Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.8 from the date such amount was due and payable
until the date such amount is paid in full.
2.16. RATABLE SHARING. Lenders hereby agree among themselves that if any of
them shall, whether by voluntary payment (other than a voluntary prepayment of
Loans made and applied in accordance with the terms hereof), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Credit
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to such
Lender hereunder or under the other Credit Documents (collectively, the
"AGGREGATE AMOUNTS DUE" to such Lender) which is greater than the proportion
received by any other Lender in respect of the Aggregate Amounts Due to such
other Lender, then the Lender receiving such proportionately greater payment
shall (a) notify Administrative Agent and each other Lender of the receipt of
such payment and (b) apply a portion of such payment to purchase participations
(which it shall be deemed to have purchased from each seller of a participation
simultaneously upon the receipt by such seller of its portion of such payment)
in the Aggregate Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in proportion to the
Aggregate Amounts Due to them; provided, if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
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2.17. MAKING OR MAINTAINING EURODOLLAR RATE LOANS. (a) In the event that
Administrative Agent shall have determined (which determination shall be final
and conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Borrower and each Lender of such determination, whereupon (i) no
Loans may be made as, or converted to, Eurodollar Rate Loans until such time as
Administrative Agent notifies Borrower and Lenders that the circumstances giving
rise to such notice no longer exist, and (ii any Funding Notice or
Conversion/Continuation Notice given by Borrower with respect to the Loans in
respect of which such determination was made shall be deemed to be rescinded by
Borrower.
(b) In the event that on any date any Lender shall have determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Borrower and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans
(i) has become unlawful as a result of compliance by such Lender in good faith
with any law, treaty, governmental rule, regulation, guideline or order (or
would conflict with any such treaty, governmental rule, regulation, guideline or
order not having the force of law even though the failure to comply therewith
would not be unlawful), or (ii has become impracticable, as a result of
contingencies occurring after the date hereof which materially and adversely
affect the London interbank market or the position of such Lender in that
market, then, and in any such event, such Lender shall be an "AFFECTED LENDER"
and it shall on that day give notice (by telefacsimile or by telephone confirmed
in writing) to Borrower and Administrative Agent of such determination (which
notice Administrative Agent shall promptly transmit to each other Lender).
Thereafter (1) the obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans shall be suspended until such notice
shall be withdrawn by the Affected Lender, (2) to the extent such determination
by the Affected Lender relates to a Eurodollar Rate Loan then being requested by
Borrower pursuant to a Funding Notice or a Conversion/Continuation Notice, the
Affected Lender shall make such Loan as (or continue such Loan as or convert
such Loan to, as the case may be) an Alternate Base Rate Loan, (3) the Affected
Lender's obligation to maintain its outstanding Eurodollar Rate Loans (the
"AFFECTED LOANS") shall be terminated at the earlier to occur of the expiration
of the Interest Period then in effect with respect to the Affected Loans or when
required by law, and (4) the Affected Loans shall automatically convert into
Alternate Base Rate Loans on the date of such termination. Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by Borrower
pursuant to a Funding Notice or a Conversion/Continuation Notice, Borrower shall
have the option, subject to the provisions of Section 2.17(c), to rescind such
Funding Notice or Conversion/Continuation Notice as to all Lenders by giving
notice (by telefacsimile or by telephone confirmed in writing) to Administrative
Agent of such rescission on the date on which the Affected Lender gives notice
of its determination as described above (which notice of rescission
Administrative Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this Section 2.17(b)
shall affect the obligation of any
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Lender other than an Affected Lender to make or maintain Loans as, or to
convert Loans to, Eurodollar Rate Loans in accordance with the terms hereof.
(c) Borrower shall compensate each Lender, upon written request by such
Lender (which request shall set forth the basis for requesting such amounts),
for all reasonable losses, expenses and liabilities (including any interest paid
by such Lender to lenders of funds borrowed by it to make or carry its
Eurodollar Rate Loans and any loss, expense or liability sustained by such
Lender in connection with the liquidation or re-employment of such funds but
excluding loss of anticipated profits) which such Lender may sustain: (i) if for
any reason (other than a default by such Lender) a borrowing of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Funding Notice or a
telephonic request for borrowing, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a
Conversion/Continuation Notice or a telephonic request for conversion or
continuation; (ii if any prepayment or other principal payment or any conversion
of any of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan; (ii if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by Borrower; (iv as a consequence of any other default by
Borrower in the repayment of its Eurodollar Rate Loans when required by the
terms hereof or (v) if any assignment of any of its Eurodollar Rate Loans occurs
pursuant to Section 2.2(a)(ii) on a date prior to the last day of an Interest
Period applicable to that Loan.
(d) Any Lender may make, carry or transfer Eurodollar Rate Loans at, to,
or for the account of any of its branch offices or the office of an Affiliate of
such Lender.
(e) Calculation of all amounts payable to a Lender under this Section 2.17
and under Section 2.18 shall be made as though such Lender had actually funded
each of its relevant Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the amount of such
Eurodollar Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such Eurodollar deposit from an offshore
office of such Lender to a domestic office of such Lender in the United States
of America; provided, each Lender may fund each of its Eurodollar Rate Loans in
any manner it sees fit and the foregoing assumptions shall be utilized only for
the purposes of calculating amounts payable under this Section 2.17 and under
Section 2.18.
2.18. INCREASED COSTS; CAPITAL ADEQUACY. (a) Subject to the provisions of
Section 2.19 (which shall be controlling with respect to the matters covered
thereby), in the event that any Lender shall determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental rule,
regulation or order), or any determination of a court or governmental authority,
in each case that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or quasi-governmental authority
(whether or not
65
having the force of law): (i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the overall net income of
such Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of principal,
interest, fees or any other amount payable hereunder; (ii imposes, modifies or
holds applicable any reserve (including any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of such Lender (other than any
such reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or (ii imposes any
other condition (other than with respect to a Tax matter) on or affecting such
Lender (or its applicable lending office) or its obligations hereunder or the
London interbank market; and the result of any of the foregoing is to increase
the cost to such Lender of agreeing to make, making or maintaining Loans
hereunder or to reduce any amount received or receivable by such Lender (or its
applicable lending office) with respect thereto; then, in any such case,
Borrower shall promptly pay to such Lender, upon receipt of the statement
referred to in the next sentence, such additional amount or amounts (in the form
of an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as may be
necessary to compensate such Lender on an after-tax basis for any such increased
cost or reduction in amounts received or receivable hereunder. Such Lender shall
deliver to Borrower (with a copy to Administrative Agent) a written statement,
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Lender under this Section 2.18(a), which statement shall be
conclusive and binding upon all parties hereto absent manifest error.
(b) In the event that any Lender shall have determined that the adoption,
effectiveness, phase-in or applicability after the date hereof of any law, rule
or regulation (or any provision thereof) regarding capital adequacy, or any
change therein or in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to,
such Lender's Loans or Revolving Commitments or Letters of Credit or other
obligations hereunder with respect to the Loans or the Letters of Credit to a
level below that which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in, applicability, change
or compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within five Business Days after receipt by Borrower from such Lender of
the statement referred to in the next sentence, Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Borrower (with a copy to Administrative Agent) a written
statement, setting forth in reasonable detail the basis for calculating the
additional amounts
66
owed to Lender under this Section 2.18(b), which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
2.19. TAXES; WITHHOLDING, ETC. (a) All sums payable by any Credit Party
hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) If any Credit Party or any other Person is required by law to make any
deduction or withholding on account of any such Tax from any sum paid or payable
by any Credit Party to Administrative Agent or any Lender under any of the
Credit Documents: (i) Borrower shall notify Administrative Agent of any such
requirement or any change in any such requirement as soon as Borrower becomes
aware of it; (ii Borrower shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay is
imposed on any Credit Party) for its own account or (if that liability is
imposed on Administrative Agent or such Lender, as the case may be) on behalf of
and in the name of Administrative Agent or such Lender; (ii the sum payable by
such Credit Party shall be increased to the extent necessary to ensure that,
after the making of all required deductions, withholding or payments (including
those applicable to additional sums payable under this Section), Administrative
Agent or such Lender, as the case may be, receives on the due date a net sum
equal to what it would have received had no such deduction, withholding or
payment been required or made; and (iv within thirty (30) days after paying any
sum from which it is required by law to make any deduction or withholding, and
within thirty (30) days after the due date of payment of any Tax which it is
required by clause (ii) above to pay, Borrower shall deliver to Administrative
Agent evidence satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant taxing or
other authority; provided, no such additional amount shall be required to be
paid to any Lender under clause (iii) above except to the extent that any change
after the date hereof (in the case of each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
(c) Each Lender that is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Internal Revenue Code) for U.S. federal
income tax purposes (a "NON-US LENDER") shall deliver to Administrative Agent
for transmission to Borrower, on or prior to the Closing Date (in the case of
each Lender listed on the signature pages hereof on the Closing Date) or on or
prior to the date of the Assignment Agreement pursuant to which it becomes a
Lender (in
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the case of each other Lender), and at such other times as may be necessary
in the determination of Borrower or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms), properly completed and duly executed
by such Lender, and such other documentation required under the Internal Revenue
Code and reasonably requested by Borrower to establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or other
amounts payable under any of the Credit Documents, or (ii if such Lender is not
a "bank" or other Person described in Section 881(c)(3) of the Internal Revenue
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any successor form),
properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Borrower to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to
such Lender of interest payable under any of the Credit Documents. Each Lender
required to deliver any forms, certificates or other evidence with respect to
United States federal income tax withholding matters pursuant to this Section
2.19(c) hereby agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever a lapse in time
or change in circumstances renders such forms, certificates or other evidence
obsolete or inaccurate in any material respect, that such Lender shall deliver
to Administrative Agent for transmission to Borrower two new original copies of
Internal Revenue Service Form 1001 or 4224, or a Certificate re Non-Bank Status
and two original copies of Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by Borrower to confirm or establish that such Lender is not subject to deduction
or withholding of United States federal income tax with respect to payments to
such Lender under the Credit Documents, or notify Administrative Agent and
Borrower of its inability to deliver any such forms, certificates or other
evidence. Borrower shall not be required to pay any additional amount to any
Non-US Lender under Section 2.19(b)(iii) if such Lender shall have failed to
deliver the forms, certificates or other evidence referred to in the second
sentence of this Section 2.19(c); provided, if such Lender shall have satisfied
the requirements of the first sentence of this Section 2.19(c) on the Closing
Date or on the date of the Assignment Agreement pursuant to which it became a
Lender, as applicable, nothing in this last sentence of Section 2.19(c) shall
relieve Borrower of its obligation to pay any additional amounts pursuant to
Section 2.18(a) in the event that, as a result of any change in any applicable
law, treaty or governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to
withholding as described herein.
2.20. OBLIGATION TO MITIGATE. Each Lender agrees that, as promptly as
practicable after the officer of such Lender responsible for administering its
Loans or Letters of Credit, as the case may be, becomes aware of the occurrence
of an event or the existence of a condition that would cause such Lender to
become an Affected Lender or that would entitle such Lender to receive payments
under Section 2.17, 2.18 or 2.19, it will, to the extent not inconsistent with
the internal policies of
68
such Lender and any applicable legal or regulatory restrictions, use reasonable
efforts (a) to make, issue, fund or maintain its Credit Extensions including any
Affected Loans, through another office of such Lender, or (b) take such other
measures as such Lender may deem reasonable, if as a result thereof the
circumstances which would cause such Lender to be an Affected Lender would cease
to exist or the additional amounts which would otherwise be required to be paid
to such Lender pursuant to Section 2.17, 2.18 or 2.19 would be materially
reduced and if, as determined by such Lender in its sole discretion, the making,
issuing, funding or maintaining of such Revolving Commitments, Loans or Letters
of Credit through such other office or in accordance with such other measures,
as the case may be, would not otherwise materially adversely affect such
Revolving Commitments, Loans, Letters of Credit or the interests of such Lender;
provided, such Lender will not be obligated to utilize such other office
pursuant to this Section 2.20 unless Borrower agrees to pay all incremental
expenses incurred by such Lender as a result of utilizing such other office as
described in clause (a) above. Such Lender will deliver to Borrower a
certificate as to the amount of any such expenses payable by Borrower pursuant
to this Section 2.20 setting forth in reasonable detail the basis for requesting
such amount (with a copy to Administrative Agent), and such certificate shall be
conclusive absent manifest error.
2.21. DEFAULTING LENDERS. Anything contained herein to the contrary
notwithstanding, in the event that any Lender, at the direction or request of
any regulatory agency or authority, defaults (a "DEFAULTING LENDER") in its
obligation to fund (a "FUNDING DEFAULT") any Revolving Loan (a "DEFAULTED
LOAN"), then (a) during any Default Period with respect to such Defaulting
Lender, such Defaulting Lender shall be deemed not to be a "Lender" for purposes
of voting on any matters (including the granting of any consents or waivers)
with respect to any of the Credit Documents; (b) to the extent permitted by
applicable law, until such time as the Default Excess with respect to such
Defaulting Lender shall have been reduced to zero, (i) any voluntary prepayment
of the Revolving Loans shall, if Borrower so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of other Lenders as if
such Defaulting Lender had no Revolving Loans outstanding and the Revolving
Exposure of such Defaulting Lender were zero, and (ii any mandatory prepayment
of the Revolving Loans shall, if Borrower so directs at the time of making such
mandatory prepayment, be applied to the Revolving Loans of other Lenders (but
not to the Revolving Loans of such Defaulting Lender) as if such Defaulting
Lender had funded all Defaulted Loans of such Defaulting Lender, it being
understood and agreed that Borrower shall be entitled to retain any portion of
any mandatory prepayment of the Revolving Loans that is not paid to such
Defaulting Lender solely as a result of the operation of the provisions of this
clause (b); (c) such Defaulting Lender's Revolving Commitment and outstanding
Revolving Loans and such Defaulting Lender's Pro Rata Share of the Letter of
Credit Usage shall be excluded for purposes of calculating the Revolving
Commitment fee payable to Lenders pursuant to Section 2.9 in respect of any day
during any Default Period with respect to such Defaulting Lender, and such
Defaulting Lender shall not be entitled to receive any Revolving Commitment fee
pursuant to Section 2.9 with respect to such Defaulting Lender's Revolving
Commitment in respect of any Default Period with respect to such Defaulting
Lender; and (d) the Total Utilization of Revolving Commitments as at any date of
determination shall be calculated as if such Defaulting Lender had funded all
Defaulted Loans of such Defaulting Lender. No Revolving Commitment of any
Lender shall be increased or otherwise
69
affected by, and, except as otherwise expressly provided in this Section 2.21,
performance by Borrower of its obligations hereunder and the other Credit
Documents shall not be excused or otherwise modified as a result of, any Funding
Default or the operation of this Section 2.21. The rights and remedies against a
Defaulting Lender under this Section 2.21 are in addition to other rights and
remedies which Borrower may have against such Defaulting Lender with respect to
any Funding Default and which Administrative Agent or any Lender may have
against such Defaulting Lender with respect to any Funding Default.
2.22. REMOVAL OR REPLACEMENT OF A LENDER. Anything contained herein to the
contrary notwithstanding, in the event that: (a) any Lender (an "INCREASED-COST
LENDER") shall give notice to Borrower that such Lender is an Affected Lender or
that such Lender is entitled to receive material payments under Section 2.17,
2.18 or 2.19, the circumstances which have caused such Lender to be an Affected
Lender or which entitle such Lender to receive such payments shall remain in
effect, and such Lender shall fail to withdraw such notice within five Business
Days after Borrower's request for such withdrawal; or (b) any Lender shall
become a Defaulting Lender, the Default Period for such Defaulting Lender shall
remain in effect, and such Defaulting Lender shall fail to cure the default as a
result of which it has become a Defaulting Lender within five Business Days
after Borrower's request that it cure such default; or (c) in connection with
any proposed amendment, modification, termination, waiver or consent with
respect to any of the provisions hereof as contemplated by Section 10.5(b), the
consent of Requisite Lenders shall have been obtained but the consent of one or
more of such other Lenders (each, a "NON-CONSENTING LENDER") whose consent is
required shall not have been obtained, and the failure to obtain Non-Consenting
Lenders' consents does not result solely from the exercise of Non-Consenting
Lenders' rights (and the withholding of any required consents by Non-Consenting
Lenders) pursuant to the proviso to Section 10.5(c)(i); then, with respect to
each such Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the
"TERMINATED LENDER"), Borrower may, by giving written notice to Administrative
Agent and any Terminated Lender of its election to do so, elect to cause such
Terminated Lender (and such Terminated Lender hereby irrevocably agrees) to
assign its outstanding Loans and its Revolving Commitments, if any, in full to
one or more Eligible Assignees (each, a "REPLACEMENT LENDER") in accordance with
the provisions of Section 10.6 and Terminated Lender shall pay any fees payable
thereunder in connection with such assignment; provided, (1) on the date of such
--------
assignment, Borrower shall pay any amounts payable to such Terminated Lender
pursuant to Section 2.17(c), 2.18 or 2.19 or otherwise as if it were a
prepayment and (2) in the event such Terminated Lender is a Non-Consenting
Lender, each Replacement Lender shall consent, at the time of such assignment,
to each matter in respect of which such Terminated Lender was a Non-Consenting
Lender; provided, (A) Borrower may not make such election with respect to any
--------
Non-Consenting Lender unless Borrower also makes such election with respect to
each other Terminated Lender which is a Non-Consenting Lender and (B) Borrower
may not make such election with respect to any Terminated Lender that is also an
Issuing Bank unless, prior to the effectiveness of such election, Borrower shall
have caused each outstanding Letter of Credit issued thereby to be cancelled.
Upon the prepayment of all amounts owing to any Terminated Lender and the
termination of such Terminated Lender's Revolving Commitments, if any, such
Terminated Lender shall no longer constitute a "Lender" for purposes hereof;
provided, any rights of such Terminated Lender to indemnification hereunder
--------
shall survive as to such Terminated Lender.
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SECTION 3. CONDITIONS PRECEDENT
3.1 CLOSING DATE. The obligation of any Lender to make a Credit Extension
on the Closing Date is subject to the satisfaction, or waiver in accordance with
Section 10.5, of the following conditions on or before the Closing Date:
(a) Credit Documents. Administrative Agent shall have received sufficient
----------------
copies of each Credit Document originally executed and delivered by each
applicable Credit Party for each Lender.
(b) Organizational Documents; Incumbency, Etc. Administrative Agent shall
-----------------------------------------
have received (i) sufficient copies of each Organizational Document originally
executed and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender and its counsel, each dated the Closing Date or a
recent date prior thereto; (ii) signature and incumbency certificates of the
officers of such Person executing the Credit Documents to which it is a party;
(iii) resolutions of the Board of Directors or similar governing body of each
Credit Party approving and authorizing the execution, delivery and performance
of this Agreement and the other Credit Documents and the Related Agreements to
which it is a party or by which it or its assets may be bound as of the Closing
Date, certified as of the Closing Date by its secretary or an assistant
secretary as being in full force and effect without modification or amendment;
(iv) a good standing certificate from the applicable Governmental Authority of
each Credit Party's jurisdiction of incorporation, organization or formation and
in each jurisdiction in which it is qualified as a foreign corporation or other
entity to do business, each dated a recent date prior to the Closing Date; and
(v) such other documents as Administrative Agent may reasonably request.
(c) Organizational and Capital Structure. The organizational structure and
------------------------------------
the capital structure of Holdings and its Subsidiaries, both before and after
giving effect to the Transactions, shall be as set forth on Schedule 4.1.
(d) Capitalization of Holdings. The Administrative Agent, the Syndication
--------------------------
Agent and Requisite Lenders shall be satisfied in all respects with Holdings'
capital structure.
(e) Capitalization of Borrower. On the Closing Date, Borrower shall have
--------------------------
Equity Capital equal to no less than 40% of Original Enterprise Value if the
Senior Subordinated Notes have not been issued, or 29.2% of Original Enterprise
Value if the Senior Subordinated Notes have been issued on or prior to the
Closing Date, as set forth in a certificate delivered to Administrative Agent
(with copies for each Lender) from the chief financial officer and the chief
executive officer of Borrower dated the Closing Date and with appropriate
attachments. The Administrative Agent, the Syndication Agent and Requisite
Lenders shall be satisfied in all other respects with the Borrower's capital
structure.
(f) Certain Employees. Syndication Agent and Administrative Agent shall
-----------------
have received duly executed copies of, and shall be satisfied with the form and
substance of, the Employment Agreement.
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(g) Related Agreements and Opinions. Syndication Agent and Administrative
-------------------------------
Agent shall each have received a fully executed or conformed copy of each
Related Agreement (without duplication of the Muzak LLC Agreement or the
Holdings LLC Agreement delivered pursuant to Section 3.1(b)), certified by each
Credit Party thereto, together with copies of each of the opinions of counsel
delivered to the parties under the Related Agreements, accompanied by a letter
from each such counsel authorizing Lenders to rely upon such opinion to the same
extent as though it were addressed to Lenders, except in the case of any such
legal opinion rendered by counsel to any Person other than a Credit Party to the
extent such counsel has refused to deliver such a letter on the basis that it is
inconsistent with such counsel's internal policies. Each Related Agreement,
including, without limitation, the Capstar Documentation (which documentation
shall evidence a definitive agreement among the parties thereto with respect to
the Capstar Contribution), shall be in form and substance reasonably
satisfactory to the Syndication Agent and Administrative Agent and shall be in
full force and effect and no provision thereof shall have been modified or
waived in any respect determined by Syndication Agent or Administrative Agent to
be material, in each case without the consent of Syndication Agent and
Administrative Agent.
(h) Consummation of Transactions.
----------------------------
(i) Merger. All conditions to the Merger set forth in Article VII of
------
the Merger Agreement shall have been satisfied in all material respects or the
fulfillment of any such conditions shall have been waived with the consent of
Syndication Agent and Administrative Agent, and the Merger shall have become
effective in accordance with the terms of the Merger Agreement. The aggregate
consideration paid by Borrower and Holdings in connection with the Merger shall
not exceed $127,500,000. Immediately following consummation of the Merger and
after giving effect thereto, there shall be at least $10,000,000 of Revolving
Loans available to be borrowed pursuant to Section 2.2.
(ii) Consent Solicitation. Each of the Consent Solicitation and the
--------------------
purchase of all Existing Senior Notes tendered pursuant thereto, and the
Existing Indenture Amendments shall have been effected and consummated and
Administrative Agent and the Syndication Agent shall have received evidence
reasonably satisfactory to them of the foregoing.
(iii) Other Transactions. All conditions to the other Transactions
------------------
(other than the Capstar Omaha Contribution) set forth in the Related Agreements
shall have been satisfied in all material respects or the fulfillment of any
such conditions shall have been waived with the consent of Administrative Agent
and Requisite Lenders (such consent not to be unreasonably withheld).
Administrative Agent shall have received evidence reasonably satisfactory to it
that each of the Transactions shall have been consummated or will be consummated
on the Closing Date other than the Capstar Omaha Contribution.
(i) Existing Debt.
-------------
(i) On the Closing Date, and after giving effect to the Transactions,
(A) all Existing Debt shall be paid in full, (B) any commitments to lend
thereunder shall have been terminated, (C) all security interests created to
secure the obligations arising in connection therewith
72
shall have been terminated or effectively assigned to Administrative Agent for
the benefit of Lenders, and (D) Borrower shall have delivered to Administrative
Agent UCC-3 termination statements or assignments (or comparable forms) and any
and all other instruments of release, satisfaction, assignment and/or
reconveyance (or evidence of the filing thereof) as may be necessary or
advisable to terminate or assign to Administrative Agent for the benefit of
Lenders all such security interests and all other security interests in the
Collateral. On or prior to the Closing Date, Syndication Agent and
Administrative Agent shall have received all pay-off or termination agreements
or other documents evidencing the repayment of all Existing Debt. The aggregate
amount of principal and premium required to repay, purchase and defease, as
applicable, all of the Existing Debt shall not exceed $175,000,000 or such
larger amount, if any, as is satisfactory to Requisite Lenders in their sole
discretion.
(ii) Syndication Agent and Administrative Agent shall have received a
certificate of Borrower executed on Borrower's behalf by an Authorized Officer
of Borrower stating that, after giving effect to the Transactions, the
Indebtedness of Credit Parties (other than Indebtedness under the Credit
Documents, any Senior Subordinated Notes and any Holdings Notes or Closing Date
Sponsor Debt) shall consist of approximately $6,100,000 in aggregate principal
amount of outstanding Indebtedness described on Schedule 6.1. The terms and
conditions of all such Indebtedness shall be in form and in substance
satisfactory to Syndication Agent, Administrative Agent and Requisite Lenders.
(j) Pro Forma Total Leverage Ratio. Borrower shall have delivered to
------------------------------
Administrative Agent (with copies for each Lender) a certificate of Borrower,
executed on behalf of Borrower by the chief financial officer and the chief
executive officer of Borrower, dated the Closing Date and with appropriate
attachments, demonstrating that after giving effect to the consummation of the
Transactions on a Pro Forma Basis, the Total Leverage Ratio shall not be greater
than 5.25:1.00 if the Senior Subordinated Notes have not been issued, or
6.25:1.00 if the Senior Subordinated Notes have been issued on or prior to the
Closing Date.
(k) Use of Proceeds by Borrower. Borrower shall have provided evidence
---------------------------
satisfactory to Syndication Agent and Administrative Agent that the proceeds
from the issuance of any Senior Subordinated Notes and from the issuance of any
Holdings Notes or from the incurrence of any Closing Date Sponsor Debt have been
irrevocably committed, prior to the application of the proceeds of the Term
Loans and any Revolving Loans made on the Closing Date, to the payment of a
portion of the financing requirements in connection with the Transactions.
(l) Transaction Costs. On or prior to the Closing Date, Borrower shall
-----------------
have delivered to Administrative Agent Borrower's reasonable best estimate of
the Transaction Costs (other than fees payable to any Agent) and such estimate
(together with all fees payable to Agents) shall not exceed $11,500,000.
(m) Governmental Authorizations and Consents. Each Credit Party shall have
----------------------------------------
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the Transactions
(other than the Capstar Omaha Contribution) and each of the foregoing shall be
in full force and effect and in form and substance reasonably
73
satisfactory to the Administrative Agent. All applicable waiting periods shall
have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Transactions or the financing thereof and no action, request for stay,
petition for review or rehearing, reconsideration, or appeal with respect to any
of the foregoing shall be pending, and the time for any applicable agency to
take action to set aside its consent on its own motion shall have expired.
(n) Personal and Mixed Property Collateral. In order to create in favor of
--------------------------------------
Administrative Agent, for the benefit of Lenders, a valid and, subject to any
filing and/or recording referred to herein, perfected First Priority security
interest in all personal and mixed property Collateral, Administrative Agent
shall have received:
(i) (A) certificates (which certificates shall be accompanied by
irrevocable undated stock powers, duly endorsed in blank and otherwise
satisfactory in form and substance to Administrative Agent) representing all
shares of Capital Stock pledged pursuant to the Pledge and Security Agreement,
and Acknowledgments of Pledge from each applicable issuer of Securities pledged
pursuant to the Pledge and Security Agreement and (B) all instruments and
promissory notes (which instruments shall be accompanied by instruments of
transfer or assignment duly endorsed in blank and otherwise in form and
substance satisfactory to Administrative Agent) evidencing all Indebtedness
pledged pursuant to the Pledge and Security Agreement;
(ii) (A) the results of a recent search, by a Person satisfactory to
Syndication Agent and Administrative Agent, of all effective UCC financing
statements and fixture filings and all judgment and tax lien filings which may
have been made with respect to any personal or mixed property of any Credit
Party, together with copies of all such filings disclosed by such search, and
(B) UCC termination statements duly executed by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements or fixture filings disclosed in such search
(other than any such financing statements or fixture filings in respect of
Permitted Liens);
(iii) UCC financing statements, duly executed by each applicable
Credit Party with respect to all personal and mixed property Collateral of such
Credit Party, for filing in all jurisdictions as may be necessary or, in the
opinion of Syndication Agent and Administrative Agent, desirable to perfect the
security interests created in such Collateral pursuant to the Collateral
Documents;
(iv) all releases, cover sheets or other documents or instruments
required to be filed in order to create or perfect Liens in respect of any
Intellectual Property;
(v) an opinion of counsel (which counsel shall be reasonably
satisfactory to Syndication Agent and Administrative Agent) with respect to the
creation and perfection of the security interests in favor of Administrative
Agent in such Collateral and such other matters governed by the laws of the
states of Washington and Maryland and each other jurisdiction in which any
Credit Party or any personal or mixed property Collateral is located as
Syndication Agent and
74
Administrative Agent may reasonably request, in each case in form and substance
reasonably satisfactory to Syndication Agent and Administrative Agent; and
(vi) evidence that each Credit Party shall have taken or caused to
be taken any other action, executed and delivered or caused to be executed and
delivered any other agreement, document and instrument, and made or caused to be
made any other filing and recording (other than as set forth herein) reasonably
required by Syndication Agent and Administrative Agent.
(o) Financial Statements; Projections. Lenders shall have received from
---------------------------------
Borrower (i) the Historical Financial Statements, (ii) pro forma consolidated
and consolidating balance sheets of Borrower and its Subsidiaries as at December
31, 1998, together with the related pro forma consolidated and consolidating
statements of income and cash flows, in each case prepared in accordance with
GAAP and reflecting the consummation of the Merger and the other Transactions to
occur on or prior to the Closing Date, which pro forma financial statements
shall be in form and substance satisfactory to Lenders (collectively the "PRO
FORMA FINANCIAL STATEMENTS"), and (iii) the Projections.
(p) Evidence of Insurance. Syndication Agent and Administrative Agent
---------------------
shall have received a certificate from Borrower's insurance broker or other
evidence satisfactory to it that all insurance required to be maintained
pursuant to Section 5.5 is in full force and effect and that Administrative
Agent on behalf of Lenders has been named as additional insured and/or loss
payee thereunder to the extent required under Section 5.5.
(q) Opinions of Counsel to Credit Parties. Lenders and their respective
-------------------------------------
counsel shall have received originally executed copies of the favorable written
opinions of Xxxxxxxx & Xxxxx, counsel for Credit Parties, and each other counsel
to any Credit Party, as to such matters as Administrative Agent or Syndication
Agent may reasonably request and in form and substance reasonably satisfactory
to Administrative Agent and Syndication Agent and its counsel, dated as of the
Closing Date.
(r) Opinions of Counsel to Syndication Agent. Lenders shall have received
----------------------------------------
originally executed copies of one or more favorable written opinions of Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to Syndication Agent and Administrative
Agent, dated as of the Closing Date, in form and substance reasonably
satisfactory to Syndication Agent and Administrative Agent.
(s) Fees. Borrower shall have paid to Syndication Agent and Administrative
----
Agent, for distribution (as appropriate) to Syndication Agent, Administrative
Agent and Lenders, the fees payable on the Closing Date referred to in Section
2.9.
(t) Solvency. On the Closing Date, Syndication Agent, Administrative Agent
--------
and Lenders shall have received (i) a letter from Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
dated the Closing Date and addressed to Syndication Agent, Administrative Agent
and Lenders, in form, scope and substance satisfactory to Syndication Agent and
Administrative Agent and (ii) a Solvency Certificate from Borrower, executed on
behalf of Borrower by the chief financial officer of Borrower, in each
75
case with appropriate attachments and demonstrating that after giving effect to
the consummation of the Transactions, Borrower and its Subsidiaries are and will
be Solvent.
(u) Completion of Proceedings. All partnership, corporate and other
-------------------------
proceedings taken or to be taken in connection with the Transactions (other than
the Capstar Omaha Contribution) and all documents incidental thereto not
previously found acceptable by Administrative Agent, acting on behalf of
Lenders, or Syndication Agent and its counsel shall be satisfactory in form and
substance to Administrative Agent and Syndication Agent and such counsel, and
Administrative Agent, Syndication Agent and such counsel shall have received all
such counterpart originals or certified copies of such documents as
Administrative Agent or Syndication Agent may reasonably request.
(v) Closing Date Certificate. Holdings and Borrower shall have delivered
------------------------
to Syndication Agent and Administrative Agent an originally executed Closing
Date Certificate, together with all attachments thereto.
(w) Closing Date. Lenders shall have made the Term Loans to Borrower on
------------
or before April 30, 1999.
Each Lender, by delivering its signature page to this Agreement and funding its
Tranche A Term Loan Amount, Tranche B Term Loan Amount, Tranche C Term Loan
Amount and/or a Revolving Loan on the Closing Date, shall be deemed to have
acknowledged receipt of, and consented to and approved, each Credit Document and
each other document required to be approved by Requisite Lenders or Lenders, as
applicable.
3.2. CONDITIONS TO EACH CREDIT EXTENSION. (a) The obligation of any Lender
to make a Credit Extension on any Credit Date, including the Closing Date, is
subject to the satisfaction, or waiver in accordance with Section 10.5, of the
following conditions precedent:
(i) Administrative Agent shall have received a fully executed and
delivered Funding Notice or Issuance Notice, as the case may be. If either the
Senior Subordinated Notes or the Holdings Notes have been issued, then at any
time on or after any Transition Date pursuant to which the sum of the Total
Utilization of Revolving Commitments and the Term Loan Exposure, either before
or after giving effect to any proposed borrowing, equals or exceeds, or would
equal or exceed, $200,000,000, each Funding Notice shall be accompanied by a
certificate of Borrower, executed on behalf of Borrower by an Authorized
Officer, demonstrating in reasonable detail compliance with the covenants
contained in each of the Senior Subordinated Note Indenture and the Holdings
Note Indenture, as applicable, restricting the incurrence of Indebtedness (as
defined therein);
(ii) after making the Credit Extensions requested on such Credit
Date, the Total Utilization of Revolving Commitments shall not exceed the
Revolving Commitments then in effect;
(iii) no injunction or other restraining order shall have been
issued and no hearing to cause an injunction or other restraining order to be
issued shall be pending or noticed with respect
76
to any action, suit or proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby or the making any Credit Extension;
(iv) as of such Credit Date, the representations and warranties
contained herein and in the other Credit Documents shall be true, correct and
complete in all material respects on and as of that Credit Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true, correct and
complete in all material respects on and as of such earlier date;
(v) as of such Credit Date, no event shall have occurred and be
continuing or would result from the consummation of the applicable Credit
Extension that would constitute an Event of Default or a Default; and
(vi) on or before the date of issuance of any Letter of Credit,
Administrative Agent shall have received all other information required by the
applicable Issuance Notice, and such other documents or information as Issuing
Bank may reasonably require in connection with the issuance of such Letter of
Credit.
(b) Any Notice shall be executed by an Authorized Officer in a writing
delivered to Administrative Agent. In lieu of delivering a Notice, Borrower may
give Administrative Agent telephonic notice by the required time of any proposed
borrowing, conversion/continuation or issuance of a Letter of Credit, as the
case may be; provided each such notice shall be promptly confirmed in writing by
delivery of the applicable Notice to Administrative Agent on or before the
applicable date of borrowing, continuation/conversion or issuance. Neither
Administrative Agent nor any Lender shall incur any liability to Borrower in
acting upon any telephonic notice referred to above that Administrative Agent
believes in good faith to have been given by a duly authorized officer or other
person authorized on behalf of Borrower or for otherwise acting in good faith.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to make each
Credit Extension to be made hereby, each Credit Party represents and warrants to
each Lender, on the Closing Date and on each Credit Date, that the following
statements are true, correct and complete (it being understood and agreed that
the representations and warranties made on the Closing Date are deemed to be
made concurrently with the consummation of the Transactions as contemplated
hereby):
4.1. ORGANIZATION; POWERS; QUALIFICATION; CAPITALIZATION. (a) Each of
Holdings, Borrower and each of their respective Subsidiaries (i) is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization as identified in Schedule 4.1, (ii) has all
requisite power and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to enter into the
Credit Documents to which it is a party and to carry out the transactions
contemplated thereby, and (iii) is qualified to do business and in
77
good standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, except in jurisdictions
where the failure to be so qualified or in good standing has not had, and could
not be reasonably expected to have, a Material Adverse Effect. Schedule 4.1
correctly sets forth the ownership interest of Holdings, Borrower and each of
their respective Subsidiaries in their respective Subsidiaries as of the Closing
Date, both before and after giving effect to the Transactions. Other than
Borrower and Muzak Holdings Finance, Holdings has no direct Subsidiaries or
Investments.
(b) The Capital Stock of each corporate Subsidiary of Borrower has been
duly authorized and validly issued and is fully paid and non-assessable. Except
as expressly provided on Schedule 4.1, as of the date hereof, there is no
existing option, warrant, call, right, commitment or other agreement to which
Holdings, Borrower or any of their respective Subsidiaries is a party requiring,
and there is no membership interest or other Capital Stock of Borrower or any of
its Subsidiaries outstanding which upon conversion or exchange would require,
the issuance by Borrower or any of its Subsidiaries of any additional membership
interests or other Capital Stock of Borrower or any of its Subsidiaries or other
Securities convertible into, exchangeable for or evidencing the right to
subscribe for or purchase, a membership interest or other Capital Stock of
Borrower or any of its Subsidiaries.
4.2. VALID ISSUANCE. (a) Holdings has the limited liability company power
and authority to issue the Holdings Notes. The Holdings Notes, when issued and
paid for, will be the legally valid and binding obligations of Holdings,
enforceable against Holdings in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The Obligations of Holdings hereunder are
and will be within the definition of "Permitted Indebtedness" included in such
terms. The Holdings Notes, when issued and sold, will either (i) have been
registered or qualified under applicable federal and state securities laws or
(ii) be exempt therefrom.
(b) Borrower has the limited liability company power and authority to
issue the Senior Subordinated Notes. The Senior Subordinated Notes, when issued
and paid for, will be the legally valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their respective terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability. The subordination provisions of the
Senior Subordinated Notes will be enforceable against the holders thereof and
the Loans and all other monetary Obligations hereunder are and will be within
the definition of "Senior Indebtedness" included in such provisions. The Senior
Subordinated Notes, when issued and sold, will either (i) have been registered
or qualified under applicable federal and state securities laws or (ii) be
exempt therefrom.
(c) Each of Holdings and Borrower has the limited liability company power
and authority to enter into each Permitted Sponsor Subordinated Debt Agreement,
if any. Each such Agreement, when executed, will constitute the legally valid
and binding obligation of Holdings or Borrower, as applicable, enforceable
against Holdings or Borrower, as applicable, in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws
78
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability. The subordination provisions of the Permitted
Sponsor Debt Agreement will be enforceable against the holders thereof, and the
Obligations of Holdings and Borrower, as applicable, hereunder are and will be
within the definition of "Senior Indebtedness" included in such provisions.
4.3. AUTHORIZATION OF CREDIT DOCUMENTS; NO CONFLICT. The execution,
delivery and performance of the Credit Documents have been duly authorized by
all necessary action on the part of each Credit Party that is a party thereto.
The execution, delivery and performance by Credit Parties of the Credit
Documents to which they are parties and the consummation of the transactions
contemplated by the Credit Documents do not and will not (a) violate any
provision of any law or any governmental rule or regulation applicable to
Holdings, Borrower or any of their respective Subsidiaries, any of the
Organizational Documents of Holdings, Borrower or any of their respective
Subsidiaries, or any order, judgment or decree of any court or other agency of
government binding on Holdings, Borrower or any of their respective
Subsidiaries; (b) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
Holdings, Borrower or any of their respective Subsidiaries; (c) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of Holdings, Borrower or any of their respective Subsidiaries (other than
any Liens created under any of the Credit Documents in favor of Administrative
Agent on behalf of Lenders); or (d) require any approval of members or
stockholders of Holdings, Borrower or any of their respective Subsidiaries or
any approval or consent of any Person under any Contractual Obligation, except
for such approvals or consents which will be obtained on or before the Closing
Date and disclosed in writing to Lenders and except for any such approvals or
consents the failure of which to obtain will not have a Material Adverse Effect.
4.4. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any Governmental Authority except for filings and
recordings with respect to the Collateral to be made, or otherwise delivered to
Administrative Agent, as of the Closing Date.
4.5. BINDING OBLIGATION. Each Credit Document has been duly executed and
delivered by each Credit Party that is a party thereto and is the legally valid
and binding obligation of such Credit Party, enforceable against such Credit
Party in accordance with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
4.6. FINANCIAL STATEMENTS; PROJECTIONS. The Financial Statements were
prepared in conformity with GAAP and fairly present, in all material respects,
the financial position, on a consolidated basis, of the Persons described in
such financial statements as at the respective dates thereof and the results of
operations and cash flows, on a consolidated basis, of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal year-
end adjustments. As of the date hereof, neither Borrower nor any of its
Subsidiaries has any contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
Financial
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Statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Borrower and any of its Subsidiaries taken as a
whole. On and as of the Closing Date, the Projections of Borrower and its
Subsidiaries for the period December 31, 1999 through December 31, 2006 (the
"PROJECTIONS") are based on good faith estimates and assumptions made by the
management of Borrower; provided, the Projections are not to be viewed as facts
and that actual results during the period or periods covered by the Projections
may differ from such Projections and that the differences may be material;
provided further, as of the Closing Date, management of Borrower believed that
the Projections were reasonable and attainable.
4.7. NO MATERIAL ADVERSE EFFECT; NO RESTRICTED JUNIOR PAYMENTS. Since
December 31, 1998, no event or change has occurred that has caused or evidences,
or could reasonably be expected to have, either in any case or in the aggregate,
a Material Adverse Effect, and neither Holdings, Borrower nor any of their
respective Subsidiaries has directly or indirectly declared, ordered, paid or
made, or set apart any sum or property for, any Restricted Junior Payment or
agreed to do so except as permitted pursuant to Section 6.4.
4.8. ADVERSE PROCEEDINGS, ETC. There are no Adverse Proceedings,
individually or in the aggregate, that could reasonably be expected to have a
Material Adverse Effect. Neither Holdings, Borrower nor any of their respective
Subsidiaries (a) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, or (b) is subject to or in default with respect
to any final judgments, writs, injunctions, decrees, rules or regulations of any
court or any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
4.9. PAYMENT OF TAXES. All Tax returns and reports of Holdings, Borrower
and their respective Subsidiaries required to be filed by any of them have been
timely filed and are true, correct and complete in all material respects, and
all Taxes upon Holdings, Borrower and their respective Subsidiaries and upon
their respective properties, assets, income, businesses and franchises required
to have been paid have been timely paid except Taxes that are being actively
contested in good faith and by appropriate proceedings and for which Holdings,
Borrower or such Subsidiary, as applicable, has set aside on its books adequate
reserves.
4.10. TITLE TO PROPERTIES; INTELLECTUAL PROPERTY. (a) Borrower and its
Subsidiaries have (i) good, sufficient and legal title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of their respective properties and
assets reflected in their respective Historical Financial Statements referred to
in Section 4.6 and in the most recent financial statements delivered pursuant to
Section 5.1, in each case except for assets disposed of since the date of such
financial statements in the ordinary course of business or as otherwise
permitted under Section 6.7. Except as permitted by this Agreement, all such
properties and assets are free and clear of Liens.
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(b) As of the Closing Date, Schedule 4.10(b) contains a true, accurate and
complete list of (i) all Real Estate Assets, and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Estate Asset of any
Credit Party, regardless of whether such Credit Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. Except as specified in Schedule 4.10(b), each agreement
listed in clause (ii) of the immediately preceding sentence is in full force and
effect and Borrower does not have knowledge of any default that has occurred and
is continuing thereunder that could reasonably be expected to have a Material
Adverse Effect, and each such agreement constitutes the legally valid and
binding obligation of each applicable Credit Party, enforceable against such
Credit Party in accordance with its terms, except as enforcement may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles.
(c) As of the date hereof, Schedule 4.10(c) sets forth, for all
Intellectual Property owned by each Credit Party, a complete and accurate list
of all U.S. and foreign: (1) patents and patent applications; (2) trademark and
service xxxx registrations (including Internet domain name registrations),
trademark and service xxxx applications and material unregistered trademarks and
service marks; and (3) copyright registrations, copyright applications and
material unregistered copyrights and all exclusively licensed copyrights. As of
the date hereof, no Credit Party owns or exclusively licenses (i) any material
copyrights, or (ii) either individually or in the aggregate, any material sound
recordings or musical compositions, whether unpublished or published. All sound
recordings or musical compositions used or necessary for each Credit Party's
business (other than such non-material sound recordings and musical compositions
as are owned or exclusively licensed by MLP or MLP Environmental Music, LLC) are
utilized solely pursuant to non-exclusive License Agreements with third parties,
true and complete copies of each such non-exclusive License Agreement in effect
on the Closing Date shall have been provided to Syndication Agent and
Administrative Agent. As of the date hereof, Schedule 4.10(c) lists all
contracts for material Proprietary Software which is owned, licensed, leased or
otherwise used by each Credit Party (other than for Proprietary Software
purchased or licensed for less than a total cost of $1,000), and identifies
which Proprietary Software is owned or licensed. As of the date hereof,
Schedule 4.10(c) sets forth a complete and accurate list of all License
Agreements to which any Credit Party is a party or otherwise bound, as licensee
or licensor thereunder, and which are material to the operation of any Credit
Party's business.
(d) (i) Each Credit Party owns or has the right to use all material
Intellectual Property used in or necessary to its business, free and clear of
all Liens other than Permitted Liens; (ii) except as would not, individually or
in the aggregate, have a Material Adverse Effect, any Intellectual Property
owned by any Credit Party is in full force and effect and has not been
cancelled, expired or abandoned and to the best of each Credit Party's knowledge
is valid; (iii) as of the date hereof, except as set forth on Schedule 4.10(c),
no Credit Party has received written notice from any third party regarding any
actual or potential infringement by it of any intellectual property of such
third party, and to the best of each Credit Party's knowledge, the conduct of
its business as currently conducted does not infringe on the intellectual
property of any third party; (iv) as of the date hereof, except as set forth on
Schedule 4.10(c) no Credit Party has received written notice from any third
party regarding any assertion or claim challenging the validity of any
Intellectual Property owned
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or used by such Credit Party and no Credit Party has any knowledge of any basis
for such a claim; (v) as of the date hereof, no Credit Party has licensed or
sublicensed any material rights in any Intellectual Property, or received or
been granted any such rights, other than pursuant to the License Agreements;
(vi) except as set on Schedule 4.10(c), to the best of each Credit Party's
knowledge, no third party is misappropriating, infringing, diluting or violating
any material Intellectual Property owned by any Credit Party; (vii) the License
Agreements are valid and binding obligations of the applicable Credit Party,
enforceable in accordance with their terms, and there exists no event or
condition which will result in a violation or breach of, or constitute a default
by such Credit Party or, to the knowledge of any Credit Party, the other party
thereto, under any such License Agreement; (viii) each of the Credit Parties
takes reasonable measures to protect the confidentiality of material Trade
Secrets including requiring third parties having access thereto to execute
written nondisclosure agreements and no material Trade Secret of any Credit
Party has been authorized to be disclosed to any third party or to the best of
each Credit Party's knowledge disclosed to any third party, other than pursuant
to a written nondisclosure agreement that adequately protects the Credit Party
proprietary interests in and to such material Trade Secrets; (ix) the
consummation of the Transactions will not result in the loss or impairment of
any Credit Party to own or use any of the Intellectual Property which are
material to the operation of any Credit Party's business, nor, except as set
forth on Schedule 4.10(c), will such consummation require the consent of any
third party in respect of any Intellectual Property which, individually or in
the aggregate, are material to the operation of such Grantor's business; and (x)
all Proprietary Software owned by a Credit Party set forth in Schedule 4.10(c)
was either developed (A) by employees of a Credit Party within the scope of
their employment; or (B) by independent contractors who have assigned all of
their rights to a Credit Party pursuant to written agreement.
(e) No Credit Party employs any employee, contractor or consultant who,
to any Credit Party's knowledge, is in violation of any material term of any
written employment contract, patent disclosure agreement or any other written
contract or agreement relating to the relationship of any such employee,
consultant or contractor with such Credit Party or, to such Credit Party's
knowledge, with another party that could reasonably be expected to negatively
impact upon such Credit Party's Intellectual Property.
4.11. COLLATERAL. (a) The execution and delivery of the Collateral
Documents by Credit Parties, together with the actions taken on or prior to the
date hereof pursuant to Section 3.1(n), are effective to create in favor of
Administrative Agent for the benefit of Lenders, as security for the respective
Obligations, a valid and perfected First Priority Lien on all of the Collateral,
and all filings and other actions necessary or desirable to perfect and maintain
the perfection and First Priority status of such Liens have been duly made or
taken and remain in full force and effect, other than (i) the filing of any UCC
financing statements delivered to Administrative Agent for filing (but not yet
filed), (ii) the actions required under federal law to register and record
interests in copyrights and (iii) the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of
Administrative Agent.
(b) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
either (i) the pledge or grant by any Credit Party of the Liens purported to be
created in favor of Administrative Agent pursuant to any of the
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Collateral Documents or (ii) the exercise by Administrative Agent of any rights
or remedies in respect of any Collateral (whether specifically granted or
created pursuant to any of the Collateral Documents or created or provided for
by applicable law), except (A) for filings or recordings contemplated by Section
3.1(n), (B) as may be required, in connection with the disposition of any
Investment Property, by laws generally affecting the offering and sale of
Securities and (C) any approval of the Federal Communications Commission that
may be required with respect to certain private microwave licenses held by any
Credit Party.
(c) Except with respect to any Permitted Lien and such as may have been
filed in favor of Administrative Agent as contemplated by Section 3.1(n), no
effective UCC financing statement, fixture filing or other instrument similar in
effect covering all or any part of the Collateral is on file in any filing or
recording office.
(d) All written information supplied to Administrative Agent by or on
behalf of any Credit Party with respect to any of the Collateral (in each case
taken as a whole with respect to any particular Collateral) is accurate and
complete in all material respects.
4.12. ENVIRONMENTAL. No Credit Party nor any of its Subsidiaries nor any
of their respective Facilities or operations are subject to any outstanding
written order, consent decree or settlement agreement with any Person relating
to any Environmental Law, any Environmental Claim, or any Hazardous Materials
Activity that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. No Credit Party nor any of its Subsidiaries has
received any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
(S) 9604) or any comparable state law that could reasonably be expected to have
a Material Adverse Effect. There are and, to each Credit Party's knowledge, have
been no conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Borrower or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. Neither Borrower
nor any of its Subsidiaries nor, to any Credit Party's knowledge, any
predecessor of Borrower or any of its Subsidiaries has filed any notice under
any Environmental Law indicating past or present treatment of Hazardous
Materials at any Facility, and none of Borrower's or any of its Subsidiaries'
operations involves the generation, transportation, treatment, storage or
disposal of hazardous waste, as defined under 40 C.F.R. Parts 260-270 or any
state equivalent that could reasonably be expected to have a Material Adverse
Effect. Compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws could not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect.
No event or condition has occurred or is occurring with respect to Borrower or
any of its Subsidiaries relating to any Environmental Law, any Release of
Hazardous Materials, or any Hazardous Materials Activity which individually or
in the aggregate has had, or could reasonably be expected to have, a Material
Adverse Effect.
4.13. NO DEFAULTS; MATERIAL CONTRACTS. No Credit Party is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any of its Contractual Obligations, and no condition
exists that, with the giving of notice or the lapse of time or both, could
constitute such a default, except where the consequences, direct or indirect, of
such
83
default or defaults, if any, could not reasonably be expected to have a
Material Adverse Effect. Schedule 4.13 contains a true, correct and complete
list of all the Material Contracts in effect on the Closing Date, and except as
described thereon, as of the Closing Date, all such Material Contracts are in
full force and effect and no defaults currently exist thereunder.
4.14. GOVERNMENTAL REGULATION. Neither Holdings, Borrower nor any of their
respective Subsidiaries is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act or the Investment Company Act
of 1940 or under any other federal or state statute or regulation which may
limit its ability to incur Indebtedness or which may otherwise render all or any
portion of the Obligations unenforceable.
4.15. MARGIN STOCK. Neither Holdings, Borrower nor any of their respective
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock. The pledge of the Investment Property pursuant the Pledge and
Security Agreement does not violate Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
4.16. EMPLOYEE MATTERS. There is no strike or work stoppage in existence
or threatened involving Borrower or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
4.17. EMPLOYEE BENEFIT PLANS. Borrower, each of its Subsidiaries and each
of their respective ERISA Affiliates are in compliance with all applicable
provisions and requirements of ERISA and the Internal Revenue Code and the
regulations and published interpretations thereunder with respect to each
Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan, except to the extent that any non-compliance with ERISA
or any such failure to perform would not, either individually or in the
aggregate, have a Material Adverse Effect on Borrower or any of its ERISA
Affiliates. Each Employee Benefit Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code is so qualified. No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Employee Benefit Plan or any trust established under Title
IV of ERISA has been, or is expected to be incurred by Borrower, any of its
Subsidiaries or any of their ERISA Affiliates. No ERISA Event has occurred or
is reasonably expected to occur. Except to the extent required under Section
4980B of the Internal Revenue Code or similar state laws, no Employee Benefit
Plan provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates. As of the most recent
valuation date for any Pension Plan there were no material unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) with respect to any
Pension Plan. The potential liability of Borrower, its Subsidiaries and their
respective ERISA Affiliates for a complete withdrawal from each Multiemployer
Plan (within the meaning of Section 4203 of ERISA), when aggregated with such
potential liability for a complete withdrawal from all Multiemployer Plans does
not exceed $2,500,000. Borrower, each of its Subsidiaries and each of their
ERISA Affiliates have complied with the requirements of Section 515 of ERISA
with respect to each Multiemployer Plan and are not in material "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan.
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4.18. CERTAIN FEES. No broker's or finder's fee or commission will be
payable with respect hereto or any of the transactions contemplated hereby.
4.19. SOLVENCY. Each Credit Party is and, upon the incurrence of any
Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
4.20. RELATED AGREEMENTS. Holdings and Borrower have delivered to
Syndication Agent and Administrative Agent complete and correct (i) copies of
each Related Agreement and of all exhibits and schedules thereto as of the date
hereof and (ii) copies of any material amendment, restatement, supplement or
other modification to or waiver of each Related Agreement entered into after the
date hereof. Except to the extent otherwise expressly set forth herein or in
the schedules hereto, and subject to the qualifications set forth therein, each
of the representations and warranties (a) given by MLP to Holdings and Borrower
in the Merger Agreement, (b) given by Holdings and Borrower to MLP in the Merger
Agreement, (c) given by any Credit Party in any other Related Agreement, and (d)
given in any Related Agreement by any other party to any Related Agreement, in
each case is true and correct in all material respects as of the Closing Date
(or as of any earlier date to which such representation and warranty
specifically relates). Notwithstanding anything in any Related Agreement to the
contrary, the representations and warranties of each Credit Party set forth in
this Section 4.20 shall, solely for purposes hereof, survive the Closing Date
for the benefit of Lenders. All Governmental Authorizations and all other
authorizations, approvals and consents of any other Person required by the
Related Agreements or to consummate the Transactions have been obtained and are
in full force and effect. On the Closing Date, (i) all of the conditions to
effecting or consummating the Transactions set forth in the Related Agreements
been duly satisfied or, with the consent of Administrative Agent and Requisite
Lenders, waived, and (ii) each of the Transactions has been consummated in
accordance with the Related Agreements and all applicable laws.
4.21. YEAR 2000 ISSUES. Borrower and its Subsidiaries (a) have engaged in
a process of assessment of the existence of the Year 2000 Issues reasonably
appropriate to the scope and complexity of their respective Systems and
Proprietary Software; (b) are in the process of adopting and implementing a plan
of correction ("PLAN OF CORRECTION") which will result in all Proprietary
Software and Systems used by Borrower and its Subsidiaries being Year 2000
Compliant by September 30, 1999; (c) are in the process of adopting and
successfully implementing validation procedures reasonably calculated to test on
an ongoing basis the sufficiency of the Plan of Correction, its implementation,
and the correction of Year 2000 Issues in all Systems and Proprietary Software;
(d) are in the process of adopting and implementing policies and procedures
requiring regular reports to, and monitoring by, senior management of Borrower
concerning the foregoing matters; and (e) have provided Administrative Agent
true and correct copies of the written Plan of Correction and all budget and
financial information relating to the Plan of Correction and Year 2000
Compliance. The cost to Borrower and its Subsidiaries of the implementation of
the Plan of Correction will not result in a Default or a Material Adverse
Effect. As used herein, "YEAR 2000 COMPLIANT" and "YEAR 2000 COMPLIANCE" mean
for all dates and times, including, without limitation dates and times after
December 31, 1999 and in the multi-century scenario, when used on a stand-alone
system or in combination with other Proprietary Software or Systems: (i) the
application system functions and receives and processes dates and times
correctly without abnormal
85
results; (ii) all date related calculations are correct (including, without
limitation, age calculations, duration calculations and scheduling
calculations); (iii) all manipulations and comparisons of date-related data
produce correct results for all valid date values within the scope of the
application; (iv) there is no century ambiguity; (v) all reports and displays
are sorted correctly; and (vi) leap years are accounted for and correctly
identified (including, without limitation, that 2000 is recognized as a leap
year). Borrower has obtained or shall use commercially reasonable efforts to
obtain written representations or assurances from each entity that (x) provides
any material data, product or service to Borrower or its Subsidiaries that is
dependent on Year 2000 Compliance, that all of such entity's related software
and systems that are used for, or on behalf of, Borrower or its Subsidiaries are
or will be Year 2000 Compliant by September 30, 1999.
4.22. DISCLOSURE. No representation or warranty of any Credit Party
contained in any Credit Document or in any other document, certificate or
written statement furnished to Lenders by or on behalf of Holdings, Borrower or
any of their respective Subsidiaries for use in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact (known to Holdings or Borrower, in the case of any
document not furnished by either of them) necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Borrower to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There are no facts known (or which should upon the reasonable exercise of
diligence be known) to Holdings or Borrower (other than matters of a general
economic nature) that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and that have not been disclosed
herein or in such other documents, certificates and statements furnished to
Lenders for use in connection with the transactions contemplated hereby.
4.23. NO BURDENSOME RESTRICTIONS. Neither Holdings, Borrower nor any of
their respective Subsidiaries is a party to or bound by any Contractual
Obligation which could reasonably be expected to have a Material Adverse Effect.
4.24. HOLDINGS. On the Closing Date, after giving effect to the
Transactions, Holdings (i) has not incurred, directly or indirectly, any
Indebtedness or any other obligation or liability whatsoever (whether absolute,
contingent or otherwise) other than its obligations under the Related Agreements
to which it is a party, (ii) is the owner of all of the outstanding Capital
Stock of Borrower and has not created or suffered to exist any Lien upon any
property or assets owned by it, including, without limitation, the Capital Stock
of Borrower, other than the Liens created under the Collateral Documents to
which it is a party, (iii) is not engaged in any business or activity and does
not own any assets or property other than holding the Capital Stock of Borrower
and Muzak Holdings Finance and performing its obligations under the Related
Agreements to which it is a party and (iv) is not a party to, or bound by, any
document, instrument or agreement other than the Credit Documents and Related
Agreements to which it is a party.
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SECTION 5. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that so long as any Revolving
Commitment is in effect and until payment in full of all Obligations and
cancellation or expiration of all Letters of Credit, each Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 5.
5.1. FINANCIAL STATEMENTS AND OTHER REPORTS. Borrower will deliver to
Administrative Agent:
(a) as soon as available and in any event within thirty (30) days after
the end of each month ending after the Closing Date (other than any Fiscal
Quarter end), the consolidated balance sheet of Borrower and its Subsidiaries as
at the end of such month and the related consolidated statements of income,
members' equity and cash flows of Borrower and its Subsidiaries for such month
and for the period from the beginning of the then current Fiscal Year to the end
of such month, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year and the
corresponding figures from the Financial Plan for the current Fiscal Year, to
the extent prepared on a monthly basis, all in reasonable detail, together with
a Financial Officer Certification with respect thereto;
(b) as soon as available and in any event within forty-five (45) days
after the end of each of the first three Fiscal Quarters of each Fiscal Year,
the consolidated balance sheet of Borrower and its Subsidiaries as at the end of
such Fiscal Quarter and the related consolidated statements of income, members'
equity and cash flows of Borrower and its Subsidiaries for such Fiscal Quarter
and for the period from the beginning of the then current Fiscal Year to the end
of such Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail, together with a Financial Officer Certification
and a Narrative Report with respect thereto;
(c) as soon as available and in any event within ninety (90) days after
the end of each Fiscal Year, (i) the consolidated balance sheet of Borrower and
its Subsidiaries as at the end of such Fiscal Year and the related consolidated
statements of income, members' equity and cash flows of Borrower and its
Subsidiaries for such Fiscal Year, setting forth in each case in comparative
form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, in reasonable detail, together with a Financial
Officer Certification and a Narrative Report with respect thereto; and (ii) a
report thereon of PricewaterhouseCoopers LLP or other independent certified
public accountants of recognized national standing selected by Borrower and in
form and substance reasonably satisfactory to Administrative Agent, together
with a written statement by such independent certified public accountants
stating whether, in connection therewith, any condition or event that
constitutes a Default or an Event of Default has come to their attention and, if
such a condition or event has come to their attention, specifying the nature and
period of existence thereof;
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(d) together with each delivery of financial statements of Borrower and
its Subsidiaries pursuant to Sections 5.1(b) and 5.1(c), a duly executed and
completed Compliance Certificate;
(e) if, as a result of any change in accounting principles and policies
from those used in the preparation of the Pro Forma Financial Statements, the
consolidated financial statements of Borrower and its Subsidiaries delivered
pursuant to Section 5.1(a), 5.1(b) or 5.1(c) will differ in any material respect
from the consolidated financial statements that would have been delivered
pursuant to such subdivisions had no such change in accounting principles and
policies been made, then promptly after and in no event more than sixty (60)
days after the first delivery of such financial statements after such change,
one or more statements of reconciliation for all such prior financial statements
in form and substance satisfactory to Administrative Agent;
(f) promptly upon their becoming available, copies of (i) all financial
statements, reports, notices and proxy statements sent or made available
generally by Holdings to its members acting in such capacity or by any Borrower
or any Subsidiary of Borrower to its security holders other than another
Subsidiary of Borrower, (ii) all regular and periodic reports and all
registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by Holdings, Borrower or any of their respective
Subsidiaries with any securities exchange or with the Securities and Exchange
Commission or any governmental or private regulatory authority, and (iii) all
press releases and other statements made available generally by Holdings,
Borrower or any of their respective Subsidiaries to the public concerning
material developments in the business of Holdings, Borrower or any of their
respective Subsidiaries;
(g) promptly upon any officer of Borrower obtaining knowledge (i) of any
condition or event that constitutes a Default or an Event of Default or that
notice has been given to Holdings or Borrower with respect thereto; (ii) that
any Person has given any notice to Holdings, Borrower or any of their respective
Subsidiaries or taken any other action with respect to any event or condition
set forth in Section 8.1(b); or (iii) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, a certificate of Borrower, executed on behalf of Borrower by its
Authorized Officers, specifying the nature and period of existence of such
condition, event or change, or specifying the notice given or action taken by
any such Person and the nature of such claimed Event of Default, Default,
default, event or condition, and what action Borrower has taken, is taking and
proposes to take with respect thereto;
(h) promptly upon any officer of Borrower obtaining knowledge of (i) the
institution of, or non-frivolous threat of, any Adverse Proceeding not
previously disclosed in writing by Borrower to Lenders, or (ii) any material
development in any Adverse Proceeding that, in the case of either (i) or (ii) if
adversely determined, could be reasonably expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby, written notice thereof together with such other information
as may be reasonably available to Borrower to enable Lenders and their counsel
to evaluate such matters;
(i) (i) promptly upon becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event, a written notice specifying the nature thereof,
what action Borrower, any of
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its Subsidiaries or any of their respective ERISA Affiliates has taken, is
taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto; and (ii) with reasonable promptness, copies of
(1) each Schedule B (Actuarial Information) to the annual report (Form 5500
Series) filed by Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates with the Internal Revenue Service with respect to each Pension
Plan; (2) all notices received by Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates from a Multiemployer Plan sponsor concerning
an ERISA Event; and (3) copies of such other documents or governmental reports
or filings relating to any Employee Benefit Plan as Administrative Agent shall
reasonably request;
(j) as soon as practicable and in any event no later than thirty (30) days
after to the beginning of each Fiscal Year, a consolidated plan and financial
forecast for such Fiscal Year and the next three succeeding Fiscal Years (a
"FINANCIAL PLAN"), including (i) a forecasted consolidated balance sheet and
forecasted consolidated statements of income and cash flows of Borrower and its
Subsidiaries for each such Fiscal Year, together with pro forma Compliance
Certificates for each such Fiscal Year and an explanation of the assumptions on
which such forecasts are based and (ii) forecasted consolidated statements of
income and cash flows of Borrower and its Subsidiaries for each month of each
such Fiscal Year, together with the assumptions on which such forecasts are
based stated in reasonable detail;
(k) as soon as practicable and in any event by the last day of each Fiscal
Year, a report in form and substance satisfactory to Administrative Agent
outlining all material insurance coverage maintained as of the date of such
report by Borrower and its Subsidiaries and all material insurance coverage
planned to be maintained by Borrower and its Subsidiaries in the immediately
succeeding Fiscal Year;
(l) together with each delivery of financial statements pursuant to
Sections 5.1(a), 5.1(b), and 5.1(c), written notice of any change in the Board
of Directors of Borrower or Holdings during the period for which such financial
statements are delivered;
(m) promptly, and in any event within ten (10) Business Days after any
Material Contract of Holdings, Borrower or any of their respective Subsidiaries
is terminated or amended in a manner that is materially adverse to Holdings,
Borrower or such Subsidiary, as the case may be;
(n) together with each delivery of financial statements pursuant to
Sections 5.1(a), 5.1(b), and 5.1(c), a written statement describing any new
Material Contract entered into during the period for which such financial
statements are delivered to Administrative Agent (to the extent such delivery is
permitted by the terms of any such Material Contract, provided, no such
prohibition on delivery shall be effective if it were bargained for by Holdings,
Borrower or its applicable Subsidiary with the intent of avoiding compliance
with this Section 5.1(n)), and an explanation of any actions being taken with
respect thereto;
(o) as soon as practicable following receipt thereof, copies of all
environmental audits and reports with respect to environmental matters at any
Facility or which relate to any
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environmental liabilities of Borrower or its Subsidiaries which, in any such
case, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect;
(p) Borrower will deliver to Administrative Agent and Lenders:
(i) as soon as practicable following receipt thereof, copies of all
environmental audits, investigations, analyses and reports of any kind or
character, whether prepared by personnel of Borrower or any of its Subsidiaries
or by independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any Facility or with
respect to any Environmental Claims;
(ii) promptly upon the occurrence thereof, written notice describing
in reasonable detail (1) any Release required to be reported to any federal,
state or local governmental or regulatory agency under any applicable
Environmental Laws, (2) any remedial action taken by Borrower or any other
Person in response to (A) any Hazardous Materials Activities the existence of
which has a reasonable possibility of resulting in one or more Environmental
Claims having, individually or in the aggregate, a Material Adverse Effect, or
(B) any Environmental Claims that, individually or in the aggregate, have a
reasonable possibility of resulting in a Material Adverse Effect, and (3)
Borrower's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of any Facility that could cause such Facility or
any part thereof to be subject to any material restrictions on the ownership,
occupancy, transferability or use thereof under any Environmental Laws;
(iii) as soon as practicable following the sending or receipt thereof
by Borrower or any of its Subsidiaries, a copy of any and all written
communications with respect to (1) any Environmental Claims that, individually
or in the aggregate, have a reasonable possibility of giving rise to a Material
Adverse Effect, (2) any Release required to be reported to any federal, state or
local governmental or regulatory agency, and (3) any request for information
from any governmental agency that suggests such agency is investigating whether
Borrower or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity;
(iv) prompt written notice describing in reasonable detail (1) any
proposed acquisition of stock, assets, or property by Borrower or any of its
Subsidiaries that could reasonably be expected to (A) expose Borrower or any of
its Subsidiaries to, or result in, Environmental Claims that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect or
(B) affect the ability of Borrower or any of its Subsidiaries to maintain in
full force and effect all material Governmental Authorizations required under
any Environmental Laws for their respective operations and (2) any proposed
action to be taken by Borrower or any of its Subsidiaries to modify current
operations in a manner that could reasonably be expected to subject Borrower or
any of its Subsidiaries to any additional obligations or requirements under any
Environmental Laws; and
(v) with reasonable promptness, such other documents and
information as from time to time may be reasonably requested by Administrative
Agent in relation to any matters disclosed pursuant to this Section 5.1(o); and
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(q) with reasonable promptness, such other information and data with
respect to Holdings, Borrower or any of their respective Subsidiaries as from
time to time may be reasonably requested by Administrative Agent or Requisite
Lenders.
5.2. EXISTENCE. Except as permitted under Section 6.7, each Credit Party
will, and will cause each of its Subsidiaries to, at all times preserve and keep
in full force and effect its existence and all rights, franchises, licenses and
permits material to its business; provided, no Credit Party nor any of its
Subsidiaries shall be required to preserve any such existence, right, franchise,
license or permit if such Person's Board of Directors (or similar governing
body) shall determine that the preservation thereof is no longer desirable in
the conduct of the business of such Person, and that the loss thereof is not
disadvantageous in any material respect to such Person or to Lenders.
5.3. PAYMENT OF TAXES AND CLAIMS. Each Credit Party will, and will cause
each of its Subsidiaries to, pay all Taxes imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty or fine accrues thereon, and all claims (including
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a Lien upon any of its
properties or assets, prior to the time when any penalty or fine shall be
incurred with respect thereto; provided, no such Tax or claim need be paid if it
is being contested in good faith by appropriate proceedings promptly instituted
and diligently conducted, so long as (a) adequate reserves shall have been made
therefor, and (b) in the case of a charge or claim which has or may become a
Lien against any of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral to satisfy such Tax or
claim. Borrower will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated, combined or similar income Tax
return with any Person (other than Holdings or any of its Subsidiaries).
5.4. MAINTENANCE OF PROPERTIES. Each Credit Party will, and will cause
each of its Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of Borrower and its Subsidiaries and
from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof.
5.5. INSURANCE. Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, such public liability insurance, third
party property damage insurance, business interruption insurance and casualty
insurance with respect to liabilities, losses or damage in respect of the
assets, properties and businesses of Borrower and its Subsidiaries as may
customarily be carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses, in each case in such
amounts (giving effect to self-insurance), with such deductibles, covering such
risks and otherwise on such terms and conditions as shall be customary for such
Persons. Without limiting the generality of the foregoing, Borrower will
maintain or cause to be maintained replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses. Each such policy of insurance shall
(i) name Administrative Agent for the benefit of Lenders as an additional
insured thereunder as its
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interests may appear and (ii) in the case of each business interruption and
casualty insurance policy, contain a loss payable clause or endorsement,
satisfactory in form and substance to Administrative Agent, that names
Administrative Agent for the benefit of Lenders as the loss payee thereunder for
any covered loss in excess of $500,000 and provides for at least thirty (30)
days prior written notice to Administrative Agent of any modification or
cancellation of such policy.
5.6. INSPECTIONS; LENDERS MEETINGS. Each Credit Party will, and will cause
each of its Subsidiaries to, permit any authorized representatives designated by
Administrative Agent or any Lender to visit and inspect any of the properties of
Borrower or of any of its Subsidiaries, to inspect, copy and take extracts from
its and their financial and accounting records, and to discuss its and their
affairs, finances and accounts with its and their officers and independent
public accountants, all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested.
Borrower will, upon the request of Administrative Agent or Requisite Lenders,
participate in a meeting of Administrative Agent and Lenders once during each
Fiscal Year to be held at Borrower's corporate offices (or at such other
location as may be agreed to by Borrower and Administrative Agent) at such time
as may be agreed to by Borrower and Administrative Agent.
5.7. COMPLIANCE WITH LAWS; CONTRACTUAL OBLIGATIONS. Each Credit Party will
comply, and shall cause each of its Subsidiaries and all other Persons, if any,
on or occupying any Facilities to comply, with the requirements of all
Contractual Obligations and all applicable laws, rules, regulations and orders
of any Governmental Authority (including all Environmental Laws), noncompliance
with which could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
5.8. ENVIRONMENTAL. Each Credit Party shall promptly take, and shall cause
each of its Subsidiaries promptly to take, any and all actions necessary to (i)
cure any violation of applicable Environmental Laws by such Credit Party or its
Subsidiaries that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and (ii) make an appropriate response to
any Environmental Claim against such Credit Party or any of its Subsidiaries and
discharge any obligations it may have to any Person thereunder where failure to
do so could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
5.9. SUBSIDIARIES. In the event that any Person becomes a Domestic
Subsidiary of Borrower, Borrower shall (i) promptly cause such Domestic
Subsidiary to become a Guarantor hereunder and a Grantor under the Pledge and
Security Agreement by executing and delivering to Administrative Agent a
Counterpart Agreement, and (ii) take all such actions and execute and deliver,
or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates similar to those described in Sections 3.1(b),
3.1(n) and 3.1(p). In the event that any Person becomes a Foreign Subsidiary
of Borrower, and the ownership interests of such Foreign Subsidiary are owned
by Borrower or by any Domestic Subsidiary thereof, Borrower shall, or shall
cause such Domestic Subsidiary to, deliver, all such documents, instruments,
agreements, and certificates similar to those described in Sections 3.1(b), and
Borrower shall take, or shall cause such Domestic Subsidiary to take, all of the
actions referred to in Section 3.1(n)(i) necessary to grant and to perfect a
First Priority Lien in favor of Administrative Agent, for the benefit of
Lenders, under the Pledge and Security Agreement in such ownership interests.
With respect to each such
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Subsidiary, Borrower shall promptly send to Administrative Agent written notice
setting forth with respect to such Person (i) the date on which such Person
became a Subsidiary of Borrower, and (ii) all of the data required to be set
forth in Schedule 4.1 with respect to all Subsidiaries of Borrower; provided,
such written notice shall be deemed to supplement Schedule 4.1 for all purposes
hereof.
5.10. MATERIAL REAL ESTATE ASSETS. In the event that any Credit Party
acquires an interest in or a Real Estate Asset owned on the date hereof becomes
a Material Real Estate Asset and such interest has not otherwise been made
subject to the Lien of the Collateral Documents in favor of Administrative
Agent, for the benefit of Lenders, then such Credit Party, contemporaneously
with acquiring such Material Real Estate Asset, shall take all such actions and
execute and deliver, or cause to be executed and delivered, all such mortgages,
documents, instruments, agreements, opinions and certificates, including,
without limitation, those described on Schedule 5.10, Administrative Agent shall
reasonably request to create in favor of Administrative Agent, for the benefit
of Lenders, a valid and, subject to any filing and/or recording referred to
herein, perfected First Priority security interest in such Real Estate Assets.
In addition to the foregoing, each Credit Party shall, at the request of
Requisite Lenders, deliver, from time to time, to Administrative Agent
appraisals as are required by law or regulation of Real Estate Assets with
respect to which Administrative Agent has been granted a Lien.
5.11. INTEREST RATE PROTECTION. At all times after the date which is
thirty (30) days after the Closing Date, Borrower shall maintain, or caused to
be maintained, in effect one or more Interest Rate Agreements for a term of not
less than three years and otherwise in form and substance reasonably
satisfactory to Administrative Agent, which Interest Rate Agreements shall
effectively limit the Unadjusted Eurodollar Rate Component of the interest costs
to Borrower with respect to an aggregate notional principal amount of not less
than 50% of Consolidated Senior Debt outstanding from time to time (based on the
assumption that such notional principal amount was a Eurodollar Rate Loan with
an Interest Period of three months) to a rate equal to not more than 7 1/4% per
annum.
5.12. YEAR 2000 ISSUES. Borrower shall periodically report to
Administrative Agent, in such form as Administrative Agent may reasonably
request, and Administrative Agent shall promptly forward each such report to
each Lender, on the progress of Borrower and its Subsidiaries in implementing
the Plan of Correction; the budget for, and actual financial performance with
respect to, implementation of the Plan of Correction; the assessment of
Borrower, and any senior manager of Borrower or any Subsidiary, of the adequacy
of the Plan of Correction or the related implementation budget; the
implementation of the Plan of Correction, the related financial performance, and
the conformity of actual performance with related implementation budgets.
5.13. FURTHER ASSURANCES. At any time or from time to time upon the
request of Administrative Agent, each Credit Party will, at its expense,
promptly execute, acknowledge and deliver such further documents and do such
other acts and things as Administrative Agent may reasonably request in order to
effect fully the purposes of the Credit Documents and to provide for payment of
the Obligations in accordance with the terms of this Agreement, any notes and
the other Credit Documents. In furtherance and not in limitation of the
foregoing, each Credit Party shall take
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such actions as Administrative Agent may reasonably request from time to time
(including, without limitation, the execution and delivery of guaranties,
security agreements, pledge agreements, mortgages, deeds of trust, landlord's
consents and estoppels, control agreements, acknowledgments of pledge, stock
powers, financing statements and other documents, the filing or recording of any
of the foregoing, title insurance with respect to any of the foregoing that
relates to any Real Estate Asset, and the delivery of stock certificates and
other collateral with respect to which perfection is obtained by possession) to
ensure that the Obligations are guarantied by the Guarantors and are secured by
substantially all of the assets of Holdings, Borrower and each of their
respective Subsidiaries and all of the outstanding Capital Stock of Borrower and
its Subsidiaries.
5.14. OTHER TRANSACTIONS; RELATED AGREEMENTS. (a) If Borrower determines
that it is in the best interest of Borrower to consummate the Capstar Omaha
Contribution, each of Holdings and Borrower shall use its respective reasonable
best efforts to cause the Capstar Omaha Contribution to be effected and
consummated pursuant to the Capstar Documentation. Borrower shall deliver
notice to Administrative Agent of any determination that the Capstar Omaha
Contribution will not be consummated promptly and in no event more than three
Business Days after any Credit Party makes or obtains knowledge of any such
determination. Each of Syndication Agent and Administrative Agent shall receive
at least ten Business Days' written notice of the closing of the Capstar Omaha
Contribution from Borrower. If the Capstar Omaha Contribution is consummated,
all conditions to the Capstar Omaha Contribution set forth in the Capstar
Documentation shall be satisfied in all material respects or the fulfillment of
any such conditions shall be waived with the consent of Administrative Agent and
Requisite Lenders (such consent not to be unreasonably withheld). In any event,
Borrower shall deliver notice that the Capstar Omaha Contribution will not be
consummated or the Capstar Omaha Contribution shall have been consummated no
later than December 31, 1999.
(b) If the Capstar Omaha Contribution is consummated, each of
Syndication Agent and Administrative Agent shall receive evidence reasonably
satisfactory to it that the Capstar Omaha Contribution shall have been
consummated and shall receive all drafts and executed copies of all agreements,
documents and information in connection therewith as it shall request,
including, without limitation, the following: a fully executed or conformed copy
of each agreement, instrument or any documents executed in connection therewith,
certified by each Credit Party thereto, together with copies of each of the
opinions of counsel delivered to the parties under such agreements, accompanied
by a letter from each such counsel authorizing Lenders to rely upon such opinion
to the same extent as though it were addressed to Lenders. Each such agreement
shall be in form and substance reasonably satisfactory in all material respects
to the Syndication Agent and Administrative Agent and shall be in full force and
effect.
(c) If the Capstar Omaha Contribution is consummated, simultaneously
with the consummation of the Capstar Omaha Contribution, the Credit Parties
shall take all of the actions set forth in this subsection. Borrower shall have
delivered to Administrative Agent UCC-3 termination statements or assignments
(or comparable forms) and any and all other instruments of release,
satisfaction, assignment and/or reconveyance (or evidence of the filing thereof)
as may be necessary or advisable to terminate or assign to Administrative Agent
for the benefit of Lenders all such security interests and all other security
interests in the Collateral. Borrower shall have delivered to
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Administration Agent all pay-off or termination agreements or other documents
evidencing the repayment of all Indebtedness to be repaid in connection with
such Transaction. Each Credit Party shall take all necessary action to create in
favor of Administrative Agent, for the benefit of Lenders, a valid and, subject
to any filing and/or recording referred to herein, perfected First Priority
security interest in all Material Real Estate Assets and all personal and mixed
property Collateral acquired in connection with each such transaction,
including, without limitation, the execution and delivery of all such mortgages,
documents, instruments, agreements, opinions and certificates and the taking of
all actions described in Sections 3.1(n) and 5.10.
(d) If the Capstar Omaha Contribution is consummated, simultaneously
with the consummation of the Capstar Omaha Contribution, each Credit Party shall
have obtained all Governmental Authorizations and all consents of other Persons,
in each case that are necessary or advisable in connection with such transaction
and each of the foregoing shall be in full force and effect and in form and
substance reasonably satisfactory to the Administrative Agent. If the Capstar
Omaha Contribution is consummated, simultaneously with the consummation of the
Capstar Omaha Contribution, all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on such
transactions or the financing thereof and no action, request for stay, petition
for review or rehearing, reconsideration, or appeal with respect to any of the
foregoing shall be pending, and the time for any applicable agency to take
action to set aside its consent on its own motion shall have expired.
(e) Administrative Agent shall receive drafts reasonably in advance of
the execution of any Securities Repurchase Agreement entered into after the
Closing Date if such agreement (i) is not substantially in the form of the
Securities Repurchase Agreements entered into as of October 6, 1998 or (ii)
provides for any affirmative obligation to repurchase management Securities.
Each such agreement shall be in form and substance reasonably satisfactory to
Administrative Agent. Administrative Agent shall receive a fully executed or
conformed copy of each such agreement and any documents executed in connection
therewith, certified by each Credit Party thereto, together with copies of any
opinion of counsel delivered to the parties thereto.
SECTION 6. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, so long as any Revolving
Commitment is in effect and until payment in full of all Obligations and
cancellation or expiration of all Letters of Credit, such Credit Party shall
perform, and shall cause each of its Subsidiaries to perform, all covenants in
this Section 6.
6.1. INDEBTEDNESS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or guaranty, or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness or issue any Preferred Stock, except:
(a) the Obligations, including Indebtedness under any Hedge Agreement
with any Lender Counterparty;
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(b) Indebtedness of any Wholly-Owned Included Domestic Subsidiary of
Borrower to Borrower or to any other Wholly-Owned Included Domestic Subsidiary
of Borrower, or of Borrower to any Wholly-Owned Included Domestic Subsidiary of
Borrower, provided, (i) all such Indebtedness shall be evidenced by promissory
notes and all such notes shall be subject to a First Priority Lien pursuant to
the Pledge and Security Agreement, (ii all such Indebtedness owed by Borrower to
any of its Included Subsidiaries shall be unsecured and subordinated in right of
payment to the payment in full of the Obligations pursuant to the terms of the
applicable promissory notes or an intercompany subordination agreement that in
any such case, are reasonably satisfactory to Administrative Agent, and (ii all
such Indebtedness shall include provisions as to the waiver of any subrogation
rights until after the Obligations have been paid in full;
(c) Borrower and its Wholly-Owned Included Domestic Subsidiaries may
become and remain liable with respect to Contingent Obligations in respect of
any obligations of Borrower or any of its Wholly-Owned Included Domestic
Subsidiaries permitted under this Agreement; provided, any such Contingent
Obligations shall (i) be unsecured, and (ii) include provisions as to the waiver
of any subrogation rights until after the Obligations have been paid in full;
(d) Contingent Obligations of Borrower or any of its Subsidiaries arising
from customary agreements providing for indemnification, adjustment of purchase
price or similar obligations of any such Person in connection with the Merger
Agreement, the Capstar Documentation and Permitted Acquisitions or Asset Sales
permitted pursuant to Sections 6.6 and 6.7;
(e) Contingent Obligations under guaranties in the ordinary course of
business of the obligations of suppliers, landlords, customers, franchisees and
licensees of Borrower and its Subsidiaries in an aggregate amount at any time
not to exceed $1,000,000;
(f) Indebtedness of Holdings or Borrower in respect of any Permitted
Sponsor Subordinated Debt;
(g) Indebtedness of Holdings and Muzak Holdings Finance in respect of the
Holdings Notes, provided, (i) the Net High Yield Proceeds received in connection
therewith shall not exceed $40,000,000 and shall be contributed to Borrower as
Equity Capital and (ii) such Indebtedness shall (a) be unsecured and on terms
and conditions acceptable to Requisite Lenders, (b) mature no earlier than the
tenth anniversary of the date of issuance thereof, (c) require by its terms,
that all interest on such debt be "paid-in-kind" through Xxxxx 00, 0000, (x)
contain other terms and conditions which shall be satisfactory to Requisite
Lenders, and (e) be issued on or before the first anniversary of the Closing
Date;
(h) Indebtedness of Borrower and Muzak Finance in respect of the Senior
Subordinated Notes in an aggregate principal amount of not less than
$115,000,000, provided, such Indebtedness shall (i) be unsecured and
subordinated to the Obligations of Borrower hereunder on terms and conditions
acceptable to Requisite Lenders, (ii) mature no earlier than December 31, 2007,
(iii) contain other terms and conditions which shall be satisfactory to
Requisite Lenders, and (iv) be issued on or before the first anniversary of the
Closing Date;
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(i) Contingent Obligations of Holdings and Borrower's Subsidiaries in
respect of the Senior Subordinated Notes, provided that such Contingent
Obligations shall (i) be unsecured and subordinated to the Obligations of such
Subsidiaries hereunder on terms and conditions acceptable to Requisite Lenders
and (ii) contain other terms and conditions which shall be satisfactory to
Requisite Lenders;
(j) Indebtedness of Holdings consisting of the obligation to repurchase
membership interests of former officers and directors of Holdings pursuant to
the Securities Repurchase Agreements, provided that the aggregate amount of such
Indebtedness incurred by Holdings measured on a cumulative basis from the
Closing Date shall not exceed $2,000,000;
(k) Deferred Management Fees, subject to Section 6.4;
(l) additional unsecured Indebtedness of Borrower and its Subsidiaries in
an aggregate outstanding principal amount not to exceed $5,000,000 at any time;
(m) each of Borrower and Holdings may become and remain liable with
respect to any Preferred Stock of Borrower and Holdings which by its terms does
not require any payment of Cash dividends or interest and does not mature or
provide for any repurchase or redemption thereof, in whole or in part,
contingent or otherwise, on or prior to December 31, 2007;
(n) Indebtedness described in Schedule 6.1, and until the Closing Date,
the Existing Debt; and
(o) additional secured Indebtedness of Borrower and its Subsidiaries,
including, without limitation, with respect to Capital Leases, in an aggregate
outstanding principal amount not to exceed $2,500,000 at any time;
provided, however, (i) neither Holdings nor any of its Subsidiaries shall incur
any Contingent Obligations in respect of any obligations of any Subsidiary other
than an Included Subsidiary and (ii) any Subsidiary that is not an Included
Subsidiary may only become and remain liable with respect to Indebtedness if
such Indebtedness is without recourse to any other Credit Party or their
respective assets, and in the case of Electro, does not exceed an aggregate
outstanding principal amount of $2,400,000.
6.2. LIENS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Administrative Agent for the benefit of Lenders
granted pursuant to any Credit Document;
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(b) Liens for Taxes or claims the payment of which is not, at the time,
required thereby;
(c) statutory Liens of landlords, banks (and rights of set-off), carriers,
warehousemen, mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law (other than any such Lien imposed pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or by ERISA), in each case incurred in
the ordinary course of business (i) for amounts not yet overdue or (ii for
amounts that are overdue and that (in the case of any such amounts overdue for a
period in excess of five days) are being contested in good faith by appropriate
proceedings, so long as such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such contested
amounts;
(d) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Borrower or any of its Subsidiaries;
(f) any attachment or judgment Lien not constituting a Default or Event of
Default pursuant to Section 8.1, so long as such Lien could not reasonably be
expected to have a Material Adverse Effect;
(g) any interest or title of a lessor or sublessor under any Capital Lease
permitted hereunder or any operating lease entered into the ordinary course of
business and not prohibited by this Agreement;
(h) Liens incurred in connection with the purchase or shipping of goods or
assets on the related assets and proceeds thereof in favor of the seller or
shipper of such goods or assets;
(i) Liens in favor of customs and revenue authorities arising as a matter
of law to secure payment of customs duties in connection with the importation of
goods;
(j) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(k) licenses of Intellectual Property granted by Borrower or any of its
Subsidiaries in the ordinary course of business and not interfering in any
respect with the ordinary conduct of the business of Borrower or such
Subsidiary;
(l) Liens securing Indebtedness permitted pursuant to Section 6.1(o); and
98
(m) Liens described in Schedule 6.2.
6.3. EQUITABLE LIEN; NO FURTHER NEGATIVE PLEDGES. If any Credit Party or
any of its Subsidiaries shall create or assume any Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than
Permitted Liens, it shall make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably with any and
all other Indebtedness secured thereby as long as any such Indebtedness shall be
so secured; provided, notwithstanding the foregoing, this covenant shall not be
construed as a consent by Requisite Lenders to the creation or assumption of any
such Lien not otherwise permitted hereby. Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, or (b) any
agreement prohibiting only the creation of Liens securing Subordinated
Indebtedness, no Credit Party nor any of its Subsidiaries shall enter into any
agreement prohibiting the creation or assumption of any Lien upon any of its
properties or assets, whether now owned or hereafter acquired.
6.4. RESTRICTED PAYMENTS; RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. (a) No
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, declare, order, pay, make or set apart any sum for any Restricted
Junior Payment except as long as no Default or Event of Default has occurred and
is continuing or would result therefrom, the following shall be permitted:
(i) substantially simultaneously with a High Yield Issuance of
Borrower, Borrower may use proceeds of such High Yield Issuance to make
Restricted Junior Payments to repay any Closing Date Sponsor Debt, provided (a)
immediately after giving effect to such Restricted Junior Payment, Borrower
shall have Equity Capital equal to no less than 29.2% of Original Enterprise
Value, and (b) immediately prior thereto, Borrower shall have made all mandatory
prepayments required pursuant to Section 2.12(d) in connection with such High
Yield Issuance;
(ii) Borrower may make regularly scheduled payments of interest
in respect of the Senior Subordinated Notes in accordance with the terms of, and
only to the extent required by, and subject to the subordination provisions
contained in, the Senior Subordinated Note Indenture, as such Indenture may be
amended from time to time to the extent permitted under Section 6.13;
(iii) beginning on September 15, 2004, Borrower may make
Restricted Junior Payments to Holdings in an amount sufficient to permit
Holdings to make payments of interest on the Holdings Notes, provided (a)
Holdings applies such amounts to the payment of such interest, (b) after giving
effect to such payment, Borrower shall be in compliance with Section 6.6 on a
Pro Forma Basis as of the most recently ended Fiscal Quarter for which a
Compliance Certificate has been delivered pursuant to Section 5.1(d), and (c)
such payments may only be made with respect to interest accruing on the Holdings
Notes after March 15, 2004;
(iv) Holdings may make payments of interest on the Holdings
Notes with amounts received from Borrower as described in clause (iii) above;
99
(v) for so long as either Holdings or Borrower, as
applicable, is disregarded as an entity or is classified as a partnership under
Treasury Regulations Section 301.7701 (but not a publicly traded partnership (as
defined in Section 7704 of the Code) taxed as a corporation), in each case for
U.S. income tax purposes, then Holdings or Borrower, as applicable, may make Tax
Distributions;
(vi) Borrower may make Restricted Junior Payments to pay
reasonable out-of-pocket expenses in connection with the Management Agreement;
(vii) Holdings may make Restricted Junior Payments in an
aggregate amount not in excess of $2,000,000 measured on a cumulative basis from
the Closing Date to repurchase membership interests from former officers and
directors thereof pursuant to the Securities Repurchase Agreements, provided
Borrower may make Restricted Junior Payments to fund such Restricted Junior
Payments by Holdings;
(viii) Borrower may accrue Management Fees payable in an
aggregate amount not in excess of $300,000 multiplied by 1.05 raised to the
power obtained by subtracting 1998 from the number of the calendar year in
respect of each Fiscal Year, provided (a) Borrower may not pay any such accrued
Management Fees, or any interest thereon, in respect of a Fiscal Year unless and
until Borrower shall have delivered to Administrative Agent and each Lender a
Compliance Certificate, together with consolidated audited financial statements,
each in respect of such Fiscal Year setting forth Borrower's compliance with the
terms hereof in respect of, and as at the end of, such Fiscal Year, (b) prior to
the payment in full in Cash of all of the Obligations, no payment in respect of
any such accrued Management Fees (or any interest thereon) that were not payable
as a result of clause (a) hereof or as a result of any Default or Event of
Default (collectively, "DEFERRED MANAGEMENT FEES"), shall be required or made
unless Requisite Lenders shall otherwise agree, and (c) in all other respects
Deferred Management Fees shall be subordinated to all of the Obligations on
terms and conditions acceptable to Requisite Lenders; and
(ix) any Subsidiary of Borrower may declare and pay dividends
to Borrower.
(b) Except as provided herein, no Credit Party shall, nor shall it permit
any of its Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary of Borrower to (i) pay dividends or make any other
distributions on any of such Subsidiary's Capital Stock owned by Borrower or any
other Subsidiary of Borrower, (ii repay or prepay any Indebtedness owed by such
Subsidiary to Borrower or any other Subsidiary of Borrower, (ii make loans or
advances to Borrower or any other Subsidiary of Borrower, or (iv transfer any of
its property or assets to Borrower or any other Subsidiary of Borrower.
6.5. INVESTMENTS. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including any Joint Venture, except:
(a) Cash Equivalents;
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(b) Investments owned as of the Closing Date in any Subsidiary;
(c) Investments in Borrower or in any of Borrower's Wholly-Owned Included
Domestic Subsidiaries;
(d) Investments (i) in accounts receivable arising and trade credit
granted in the ordinary course of business and in any Securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors and (ii) deposits, prepayments and other credits to suppliers made in
the ordinary course of business consistent with the past practices of Borrower
and its Subsidiaries;
(e) intercompany loans to the extent permitted under Section 6.1(b);
(f) Consolidated Capital Expenditures permitted by Section 6.6(e);
(g) loans to employees of Borrower and its Included Subsidiaries in an
aggregate principal amount not to exceed $500,000 at any time;
(h) Investments by Borrower in Electro in an aggregate annual amount not
to exceed $250,000, provided Electro shall apply the proceeds of any such
Investment to make or incur Consolidated Capital Expenditures permitted pursuant
to Section 6.7;
(i) Investments made in connection with Permitted Acquisitions permitted
pursuant to Section 6.7; and
(j) Investments described in Schedule 6.5;
provided, however, neither Holdings nor any of its Subsidiaries shall make or
own any Investment of any kind in any Subsidiary other than an Included
Subsidiary other than as permitted by Sections 6.5(b) and 6.5(h)(i).
6.6. FINANCIAL COVENANTS.
(a) Interest Coverage Ratio. The Interest Coverage Ratio as of the last
-----------------------
day of any Fiscal Quarter (which last day occurs in any period set forth below),
beginning with September 30, 1999, for any period of four Fiscal Quarters (or
for the number of full Fiscal Quarters following the Closing Date to the date of
such determination if such Fiscal Quarter ends during the period commencing with
the Closing Date and ending on the one year anniversary thereof) shall exceed
the correlative ratio indicated below:
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==========================================================
Ratio Ratio
(If No High (If High Yield
Period Yield Issuance) Issuance)
----------------------------------------------------------
Closing Date - 12/31/99 1.75:1.00 1.60:1.00
----------------------------------------------------------
1/1/00 - 12/31/00 2.00:1.00 1.80:1.00
----------------------------------------------------------
1/1/01 - 12/31/01 2.00:1.00 2.00:1.00
----------------------------------------------------------
1/1/02 - 12/31/02 2.50:1.00 2.25:1.00
----------------------------------------------------------
1/1/03 and thereafter 2.50:1.00 2.50:1.00
==========================================================
(b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio as of the
---------------------------
last day of any Fiscal Quarter, beginning with September 30, 1999, for any
period of four Fiscal Quarters (or for the number of full Fiscal Quarters
following the Closing Date to the date of such determination if such Fiscal
Quarter ends during the period commencing with the Closing Date and ending on
the one year anniversary thereof) shall exceed 1.35:1.00.
(c) Total Leverage Ratio. The Total Leverage Ratio at any time shall not
--------------------
exceed the correlative ratio indicated below:
==========================================================
Ratio Ratio
(If No High (If High Yield
Period Yield Issuance) Issuance)
----------------------------------------------------------
Closing Date - 12/31/99 5.50:1.00 6.50:1.00
----------------------------------------------------------
1/1/00 - 3/31/00 5.25:1.00 6.25:1.00
----------------------------------------------------------
4/1/00 - 9/30/00 5.25:1.00 6.00:1.00
----------------------------------------------------------
10/1/00 - 12/31/00 5.00:1.00 5.75:1.00
----------------------------------------------------------
1/1/01 - 12/31/01 4.50:1.00 5.00:1.00
----------------------------------------------------------
1/1/02 - 12/31/02 4.00:1.00 4.25:1.00
----------------------------------------------------------
1/1/03 and thereafter 3.50:1.00 3.75:1.00
===========================================================
(d) Senior Leverage Ratio. At any time after a High Yield Issuance, the
---------------------
Senior Leverage Ratio shall not exceed the correlative ratio indicated below:
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===============================================
Period Ratio
-----------------------------------------------
Closing Date - 12/31/99 4.25:1.00
-----------------------------------------------
1/1/00 - 12/31/00 3.75:1.00
-----------------------------------------------
1/1/01 - 12/31/01 3.25:1.00
-----------------------------------------------
1/1/02 - 12/31/02 2.75:1.00
-----------------------------------------------
1/1/02 and thereafter 2.25:1.00
===============================================
(e) Maximum Consolidated Capital Expenditures. Holdings shall not, and
-----------------------------------------
shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures in any Fiscal Year indicated below in an aggregate amount for
Borrower and its Included Subsidiaries and for Electro, subject to the
limitations set forth below, in excess of the corresponding amount set forth
below opposite such Fiscal Year; provided, such amount for any Fiscal Year shall
be increased as set forth below:
===========================================
Consolidated
Fiscal Year Capital Expenditures
-------------------------------------------
1999 $ 32,000,000
-------------------------------------------
2000 $ 32,000,000
-------------------------------------------
2001 $ 32,000,000
-------------------------------------------
2002 $ 35,000,000
-------------------------------------------
2003 $ 35,000,000
-------------------------------------------
2004 $ 37,000,000
-------------------------------------------
2005 $ 37,000,000
-------------------------------------------
2006 $ 37,000,000
===========================================
In connection with each Permitted Acquisition of a "Muzak" affiliate that is
permitted pursuant to Section 6.7 and consummated during any Fiscal Year, the
amount of permitted Consolidated Capital Expenditures for such Fiscal Year shall
be increased by an amount equal to the product of (A) 3.5 and (B) the total
monthly recurring revenue of such acquired "Muzak" affiliate (which, in the case
of any such acquisition consummated on or prior to the fifteenth day of any
month, shall be the total monthly recurring revenues for the second prior month,
and, in the case of any acquisition consummated after such fifteenth day, shall
be the total monthly recurring revenues for the prior month), provided such
amount for any Fiscal Year shall be prorated on an annualized basis from the
date of each such acquisition for such Fiscal Year, but the difference between
the total amount for such acquisition and the prorated amount for such
acquisition shall increase the amount of permitted
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Consolidated Capital Expenditures for subsequent Fiscal Years; provided further,
in connection with each such Permitted Acquisition, each of the draft Compliance
Certificate and the Compliance Certificate delivered by Borrower as set forth in
the definition of "Permitted Acquisition" shall set forth in reasonable detail
the calculation of the foregoing amount for such Permitted Acquisition, and such
calculation shall be satisfactory to Administrative Agent in all respects.
Except as permitted pursuant to Section 6.5(h), Borrower and its Included
Subsidiaries shall not be permitted to make or incur any Consolidated Capital
Expenditures of any kind in any Fiscal Year in respect of any Subsidiary other
than an Included Subsidiary. The aggregate annual amount of Consolidated Capital
Expenditures made or incurred by Electro in any Fiscal Year shall not exceed
$300,000.
6.7. FUNDAMENTAL CHANGES; DISPOSITION OF ASSETS; ACQUISITIONS. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, enter into any
transaction of merger or consolidation, or liquidate, wind-up or dissolve itself
(or suffer any liquidation or dissolution), or convey, sell, lease or sub-lease
(as lessor or sublessor), transfer or otherwise dispose of, in one transaction
or a series of transactions, all or any part of its business, assets or property
of any kind whatsoever, whether real, personal, or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, or acquire by purchase or
otherwise (other than purchases or other acquisitions of inventory, materials
and equipment in the ordinary course of business) the business, property, fixed
assets or Capital Stock of, any Person or any division or line of business of
any Person, except:
(a) any Included Subsidiary of Borrower may be merged with or into
Borrower or any of Borrower's Wholly-Owned Included Domestic Subsidiaries, or be
liquidated, wound up or dissolved, or all or any part of its business, property
or assets may be conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to Borrower or to any of
Borrower's Wholly-Owned Included Domestic Subsidiaries; provided, in the case of
such a merger involving Borrower, Borrower shall be the continuing or surviving
Person, and in the case of any other such merger, Borrower or such Wholly-Owned
Included Domestic Subsidiary shall be the continuing or surviving Person;
(b) sales of assets by Borrower or any of its Subsidiaries which do not
constitute Asset Sales, provided that the consideration received for such assets
shall be in an amount at least equal to the fair market value thereof
(determined in good faith by the Board of Directors of Borrower) and no less
than 80% thereof shall be paid in Cash;
(c) leases or subleases to other Persons of assets by Borrower or any of
it Subsidiaries in the ordinary course of business;
(d) licenses to other Persons of Intellectual Property by Borrower or any
Subsidiary thereof in the ordinary course of business;
(e) Asset Sales by Borrower or any of its Subsidiaries, the proceeds of
which constitute (i) less than $1,000,000 in the aggregate in any Fiscal Year,
and (ii) less than $5,000,000 in the aggregate from the Closing Date to the date
of determination, provided that (x) the consideration received for such assets
shall be in an amount at least equal to the fair market value thereof
(determined in good faith by the Board of Directors of Borrower), (y) no less
than 80% thereof shall
104
be paid in Cash, and (z) the Net Asset Sale Proceeds thereof shall be applied as
required by Section 2.12(a);
(f) Permitted Acquisitions, provided (i) if the aggregate consideration
for such acquisition is an amount that is greater than or equal to five times
the Acquisition Cash Flow of the acquired entity, then the consideration for all
such acquisitions shall constitute no more than $25,000,000 in the aggregate
from the Closing Date to the date of determination, (ii) if the aggregate
consideration for such acquisition is an amount that is less than five times the
Acquisition Cash Flow of the acquired entity, then the consideration for all
such acquisitions, together with the aggregate consideration for all
acquisitions described in clause (i), shall constitute no more than $50,000,000
in the aggregate from the Closing Date to the date of determination and (iii)
immediately following consummation of each such acquisition there shall be at
least $10,000,000 of Revolving Loans available to be borrowed pursuant to
Section 2.2;
(g) the Capstar Omaha Contribution, subject to the terms and conditions
set forth in Section 5.14 and provided immediately following consummation of
such transaction there shall be at least $10,000,000 of Revolving Loans
available to be borrowed pursuant to Section 2.2;
(h) in connection with each Permitted Acquisition by Borrower, Borrower
may sell acquired accounts located in the "territory" or other similar domain of
a "Muzak" franchisee to such franchisee in accordance with, and to the extent
required by, the terms of such franchisee's franchise agreement; and
(i) Investments made in accordance with Section 6.5.
6.8. DISPOSAL OF SUBSIDIARY INTERESTS. Except as required under the
Collateral Documents and except for any sale of 100% of the Capital Stock of any
of its Subsidiaries in compliance with the provisions of Section 6.7, no Credit
Party shall (a) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries, except to
qualify directors if required by applicable law; or (b) permit any of its
Subsidiaries directly or indirectly to sell, assign, pledge or otherwise
encumber or dispose of any Capital Stock of any of its Subsidiaries (including
such Subsidiary), except to another Credit Party (subject to the restrictions on
such disposition otherwise imposed herein under), or to qualify directors if
required by applicable law.
6.9. SALES AND LEASE-BACKS. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which Holdings or any of its Subsidiaries (a) has sold or transferred
or is to sell or to transfer to any other Person (other than Borrower or any of
its Subsidiaries), or (b) intends to use for substantially the same purpose as
any other property which has been or is to be sold or transferred by Holdings or
any of its Subsidiaries to any Person (other than Borrower or any of its
Subsidiaries) in connection with such lease.
105
6.10. SALE OR DISCOUNT OF RECEIVABLES. No Credit Party shall, nor shall it
permit any of its Subsidiaries to, directly or indirectly, sell with recourse,
or discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable.
6.11. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. No Credit Party
shall, nor shall it permit any of its Subsidiaries to, directly or indirectly,
enter into or permit to exist any transaction (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of Capital Stock of Holdings or any of its
Subsidiaries or with any Affiliate of Holdings or of any such holder, on terms
that are less favorable to Holdings or that Subsidiary, as the case may be, than
those that might be obtained at the time from Persons who are not such a holder
or Affiliate; provided, the foregoing restriction shall not apply, subject to
each other covenant contained herein, to (a) any transaction between Borrower
and any Wholly-Owned Included Domestic Subsidiary of Borrower or between any of
Borrower's Wholly-Owned Included Domestic Subsidiaries; (b) reasonable and
customary fees paid to members of the Board of Directors (or similar governing
body) of Borrower or Holdings and their respective Subsidiaries, (c) the payment
of Management Fees and (d) the repurchase of membership interests from former
officers and directors of Holdings pursuant to the Securities Repurchase
Agreements.
6.12. CONDUCT OF BUSINESS; HOLDINGS. (a) From and after the Closing Date,
no Credit Party shall, nor shall it permit any of its Subsidiaries to, engage in
any business other than (i) the businesses engaged in by such Credit Party on
the Closing Date as described in the Confidential Information Memorandum dated
February 1999 and similar or related businesses and (ii such other lines of
business as may be consented to by Requisite Lenders.
(b) Notwithstanding anything to the contrary contained herein, Holdings
shall not (i) incur, directly or indirectly, any Indebtedness or any other
obligation or liability whatsoever other than the Indebtedness and obligations
under the Related Agreements to which it is a party; (ii) create or suffer to
exist any Lien upon any property or assets now owned or hereafter acquired by it
other than the Liens created under the Collateral Documents to which it is a
party or permitted pursuant to Section 6.2; (iii) engage in any business or
activity or own any assets other than holding 100% of the Capital Stock of
Borrower and Muzak Holdings Finance and performing its obligations under the
Credit Documents, and to the extent not inconsistent therewith, the Related
Agreements; (iv) consolidate with or merge with or into, or convey, transfer or
lease all or substantially all its assets to, any Person; (v) sell or otherwise
dispose of any Capital Stock of any of its Subsidiaries; (vi) create or acquire
any Subsidiary or make or own any Investment in any Person other than Borrower
and Muzak Holdings Finance; or (vii) fail to hold itself out to the public as a
legal entity separate and distinct from any other Person.
6.13. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. (a) Except
with the prior written consent of Administrative Agent, no Credit Party shall,
nor shall it permit any of its Subsidiaries to, agree to any termination of,
amendment, restatement, supplement or other modification to, or waiver of, any
of its rights under, any Related Agreement (other than the Employment Agreement)
after the Closing Date, if such termination, amendment, restatement, supplement,
modification or waiver would be materially adverse to any Credit Party or any
Agent or Lender.
106
(b) No Credit Party shall, nor shall it permit any of its Subsidiaries to,
amend or otherwise change the terms of the Holdings Notes or any Subordinated
Indebtedness, or make any payment consistent with an amendment thereof or change
thereto, if the effect of such amendment or change is to increase the interest
rate on such Holdings Notes or Subordinated Indebtedness, change (to earlier
dates) any dates upon which payments of principal or interest are due thereon,
change any event of default or condition to an event of default with respect
thereto (other than to eliminate any such event of default or increase any grace
period related thereto), change the redemption, prepayment or defeasance
provisions thereof, change the subordination provisions of such Holdings Notes
or Subordinated Indebtedness (or of any guaranty thereof), or change any
collateral therefor (other than to release such collateral), or if the effect of
such amendment or change, together with all other amendments or changes made, is
to increase materially the obligations of the obligor thereunder or to confer
any additional rights on the holders of such Holdings Notes or Subordinated
Indebtedness (or a trustee or other representative on their behalf) which would
be adverse to any Credit Party or Lenders.
(c) Borrower shall not designate any Indebtedness as "DESIGNATED SENIOR
INDEBTEDNESS" (as defined in the Senior Subordinated Note Indenture) for
purposes of the Senior Subordinated Note Indenture without the prior written
consent of Requisite Lenders.
6.14. FISCAL YEAR. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, change its Fiscal Year-end from December 31.
6.15. CORPORATE SEPARATENESS. Borrower and its Subsidiaries on the one
hand and Holdings on the other hand shall (a) conduct their respective business
solely in their own respective names and through their own respective authorized
officers and agents so as not to mislead others as to their identity, (b) abide
by all corporate formalities and procedures (as applicable) as required by this
Agreement, their applicable formation document or the laws of their respective
jurisdictions of formation, including, without limitation, the maintenance of
current books and records, (c) not permit any of the financial statements of
Borrower or any of its Subsidiaries or Holdings in any way to suggest that the
assets of Borrower or any of its Subsidiaries are available to pay claims of
creditors of Holdings and shall ensure that the financial statements of Borrower
and its Subsidiaries shall not be consolidated with the financial statements of
Holdings unless separate financial statements of Borrower and its Subsidiaries
are also prepared and that none of the assets of Borrower and its Subsidiaries
will be consolidated or otherwise reflected on the financial statements of
Holdings, except as permitted by the foregoing, (d) hold Borrower or any of its
Subsidiaries out as having agreed to pay or become liable for the debts or
obligations of Holdings, (e) not operate or purport to operate as an integrated,
single economic unit with respect to each other and not seek or obtain credit or
incur any obligation to any third Person (other than obligations under the
Credit Documents and the Senior Subordinated Note Related Documents) based upon
the assets of the other, (f) manage their own liabilities, obligations and
expenses separate and apart from the other and each shall provide for and pay
out of their own respective assets their own respective liabilities, obligations
and expenses, (g) maintain and continue to maintain an arm's length relationship
with the other, (h) keep correct and complete records, books of account,
financial statements, accounting records and bank accounts separate and apart
from those of the other, (i) not seek the dissolution or winding up in whole, or
in part, of the other, and (j) ensure that the funds and other assets of
107
Holdings will be identifiable and will not be commingled with those of Borrower
or its Subsidiaries, and the assets and liabilities of Holdings shall and shall
continue to be readily distinguishable from the assets and liabilities of
Borrower or its Subsidiaries.
SECTION 7. GUARANTY
7.1. GUARANTY OF THE OBLIGATIONS. Subject to the provisions of Section
7.2, Guarantors jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative Agent for the ratable benefit of the Beneficiaries
the due and punctual payment in full of all Obligations when the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. (S) 362(a)) (collectively, the "GUARANTEED OBLIGATIONS").
7.2. CONTRIBUTION BY GUARANTORS. The Guarantors desire to allocate among
themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
equitable manner, their obligations arising under this Guaranty. Accordingly,
in the event any payment or distribution is made on any date by a Guarantor (a
"FUNDING GUARANTOR") under this Guaranty that exceeds its Fair Share as of such
date, that Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor's Fair Share Shortfall as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments to
equal its Fair Share as of such date. "FAIR SHARE" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii the aggregate of the Fair Share Contribution
Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations guarantied. "FAIR
SHARE SHORTFALL" means, with respect to a Contributing Guarantor as of any date
of determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor. "FAIR
SHARE CONTRIBUTION AMOUNT" means, with respect to a Contributing Guarantor as of
any date of determination, the maximum aggregate amount of the obligations of
such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any applicable provisions of comparable state law; provided, solely for
purposes of calculating the "Fair Share Contribution Amount" with respect to any
Contributing Guarantor for purposes of this Section 7.2, any assets or
liabilities of such Contributing Guarantor arising by virtue of any rights to
subrogation, reimbursement or indemnification or any rights to or obligations of
contribution hereunder shall not be considered as assets or liabilities of such
Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (1)
the aggregate amount of all payments and distributions made on or before such
date by such Contributing Guarantor in respect of this Guaranty (including,
without limitation, in respect of this Section 7.2), minus (2) the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this
Section 7.2. The amounts payable as contributions hereunder
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shall be determined as of the date on which the related payment or distribution
is made by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this Section 7.2 shall not be
construed in any way to limit the liability of any Contributing Guarantor
hereunder. Each Guarantor is a third party beneficiary to the contribution
agreement set forth in this Section 7.2.
7.3. PAYMENT BY GUARANTORS. Subject to Section 7.2, Guarantors hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in equity
against any Guarantor by virtue hereof, that upon the failure of Borrower to pay
any of the Obligations when and as the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or otherwise
(including amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. (S) 362(a)),
Guarantors will upon demand pay, or cause to be paid, in Cash, to Administrative
Agent for the ratable benefit of Beneficiaries, an amount equal to the sum of
the unpaid principal amount of all Obligations then due as aforesaid, accrued
and unpaid interest on such Obligations (including interest which, but for the
filing of a petition in bankruptcy with respect to Borrower, would have accrued
on such Obligations, whether or not a claim is allowed against Borrower for such
interest in the related bankruptcy proceeding) and all other Obligations then
owed to Beneficiaries as aforesaid.
7.4. LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Obligations. In furtherance of the foregoing and without limiting the
generality thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectability. This Guaranty is a primary obligation of each Guarantor and not
merely a contract of surety;
(b) Administrative Agent may enforce this Guaranty upon the occurrence of
an Event of Default notwithstanding the existence of any dispute between
Borrower and any Beneficiary with respect to the existence of such Event of
Default;
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Borrower and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrower, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Borrower or any of such other guarantors and whether
or not Borrower is joined in any such action or actions;
(d) payment by any Guarantor of a portion, but not all, of the Obligations
shall in no way limit, affect, modify or abridge any Guarantor's liability for
any portion of the Obligations which has not been paid. Without limiting the
generality of the foregoing, if Administrative Agent is awarded a judgment in
any suit brought to enforce any Guarantor's covenant to pay a portion of the
Obligations, such judgment shall not be deemed to release such Guarantor from
its covenant to pay the portion of the Obligations that is not the subject of
such suit, and such judgment shall not, except
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to the extent satisfied by such Guarantor, limit, affect, modify or abridge any
other Guarantor's liability hereunder in respect of the Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Obligations and
take and hold security for the payment hereof or the Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Obligations, any other guaranties of the Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Obligations and direct
the order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent herewith or the
applicable Hedge Agreement and any applicable security agreement, including
foreclosure on any such security pursuant to one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially reasonable,
and even though such action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of any Guarantor against
Borrower or any security for the Obligations; and (vi) exercise any other rights
available to it under the Credit Documents or the Hedge Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder shall be
valid and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Obligations), including the occurrence of any of the following, whether
or not any Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of law or
otherwise, of the exercise or enforcement of, any claim or demand or any right,
power or remedy (whether arising under the Credit Documents or the Hedge
Agreements, at law, in equity or otherwise) with respect to the Obligations or
any agreement relating thereto, or with respect to any other guaranty of or
security for the payment of the Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from, any of the terms
or provisions (including provisions relating to events of default) hereof, any
of the other Credit Documents, any of the Hedge Agreements or any agreement or
instrument executed pursuant thereto, or of any other guaranty or security for
the Obligations, in each case whether or not in accordance with the terms hereof
or such Credit Document, such Hedge Agreement or any agreement relating to such
other guaranty or security; (iii) the Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source (other than
payments received pursuant to the other Credit Documents or any of the Hedge
Agreements or from the proceeds of any security for the Obligations, except to
the extent such security also serves as collateral for
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indebtedness other than the Obligations) to the payment of indebtedness other
than the Obligations, even though any Beneficiary might have elected to apply
such payment to any part or all of the Obligations; (v) any Beneficiary's
consent to the change, reorganization or termination of the corporate structure
or existence of Borrower or any of its Subsidiaries and to any corresponding
restructuring of the Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures any of the
Obligations; (vii) any defenses, set-offs or counterclaims which Borrower may
allege or assert against any Beneficiary in respect of the Obligations,
including failure of consideration, breach of warranty, payment, statute of
frauds, statute of limitations, accord and satisfaction and usury; and (viii)
any other act or thing or omission, or delay to do any other act or thing, which
may or might in any manner or to any extent vary the risk of any Guarantor as an
obligor in respect of the Obligations.
7.5. WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the benefit
of Beneficiaries: (a) any right to require any Beneficiary, as a condition of
payment or performance by such Guarantor, to (i) proceed against Borrower, any
other guarantor (including any other Guarantor) of the Obligations or any other
Person, (ii proceed against or exhaust any security held from Borrower, any such
other guarantor or any other Person, (ii proceed against or have resort to any
balance of any Deposit Account or credit on the books of any Beneficiary in
favor of Borrower or any other Person, or (iv) pursue any other remedy in the
power of any Beneficiary whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Borrower or
any other Guarantor including any defense based on or arising out of the lack of
validity or the unenforceability of the Obligations or any agreement or
instrument relating thereto or by reason of the cessation of the liability of
Borrower or any other Guarantor from any cause other than payment in full of the
Obligations; (c) any defense based upon any statute or rule of law which
provides that the obligation of a surety must be neither larger in amount nor in
other respects more burdensome than that of the principal; (d) any defense based
upon any Beneficiary's errors or omissions in the administration of the
Obligations, except behavior which amounts to bad faith; (e) (i) any principles
or provisions of law, statutory or otherwise, which are or might be in conflict
with the terms hereof and any legal or equitable discharge of such Guarantor's
obligations hereunder, (ii the benefit of any statute of limitations affecting
such Guarantor's liability hereunder or the enforcement hereof, (ii any rights
to set-offs, recoupments and counterclaims, and (iv promptness, diligence and
any requirement that any Beneficiary protect, secure, perfect or insure any
security interest or lien or any property subject thereto; (f) notices, demands,
presentments, protests, notices of protest, notices of dishonor and notices of
any action or inaction, including acceptance hereof, notices of default
hereunder, the Hedge Agreements or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Obligations or any
agreement related thereto, notices of any extension of credit to Borrower and
notices of any of the matters referred to in Section 7.4 and any right to
consent to any thereof; and (g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
7.6. GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Until the
Guaranteed Obligations shall have been indefeasibly paid in full and the
Revolving Commitments shall have terminated and all Letters of Credit shall have
expired or been cancelled, each Guarantor hereby waives any claim, right or
remedy, direct or indirect, that such Guarantor now has or may hereafter
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have against Borrower or any other Guarantor or any of its assets in connection
with this Guaranty or the performance by such Guarantor of its obligations
hereunder, in each case whether such claim, right or remedy arises in equity,
under contract, by statute, under common law or otherwise and including without
limitation (a) any right of subrogation, reimbursement or indemnification that
such Guarantor now has or may hereafter have against Borrower with respect to
the Guaranteed Obligations, (b) any right to enforce, or to participate in, any
claim, right or remedy that any Beneficiary now has or may hereafter have
against Borrower or any other Guarantor, and (c) any benefit of, and any right
to participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full and the Revolving Commitments shall have terminated
and all Letters of Credit shall have expired or been cancelled, each Guarantor
shall withhold exercise of any right of contribution such Guarantor may have
against any other guarantor (including any other Guarantor) of the Guaranteed
Obligations, including, without limitation, any such right of contribution as
contemplated by Section 7.2. Each Guarantor further agrees that, to the extent
the waiver or agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, any
rights of subrogation, reimbursement or indemnification such Guarantor may have
against Borrower or against any collateral or security, and any rights of
contribution such Guarantor may have against any such other guarantor, shall be
junior and subordinate to any rights any Beneficiary may have against Borrower,
to all right, title and interest any Beneficiary may have in any such collateral
or security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement, indemnification or contribution rights at any time
when all Guaranteed Obligations shall not have been finally and indefeasibly
paid in full, such amount shall be held in trust for Administrative Agent on
behalf of Beneficiaries and shall forthwith be paid over to Guaranteed Party for
the benefit of Beneficiaries to be credited and applied against the Guaranteed
Obligations, whether matured or unmatured, in accordance with the terms hereof.
7.7. SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Borrower or
any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE GUARANTOR")
is hereby subordinated in right of payment to the Obligations, and any such
indebtedness collected or received by the Obligee Guarantor after an Event of
Default has occurred and is continuing shall be held in trust for Administrative
Agent on behalf of Beneficiaries and shall forthwith be paid over to
Administrative Agent for the benefit of Beneficiaries to be credited and applied
against the Obligations but without affecting, impairing or limiting in any
manner the liability of the Obligee Guarantor under any other provision hereof.
7.8. CONTINUING GUARANTY. This Guaranty is a continuing guaranty and shall
remain in effect until all of the Obligations shall have been finally and
indefeasibly paid in full and the Revolving Commitments shall have terminated
and all Letters of Credit shall have expired or been cancelled. Each Guarantor
hereby irrevocably waives any right to revoke this Guaranty as to future
transactions giving rise to any Obligations.
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7.9. AUTHORITY OF GUARANTORS OR BORROWER. It is not necessary for any
Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
7.10. FINANCIAL CONDITION OF BORROWER. Any Credit Extension may be made to
Borrower or continued from time to time, and any Hedge Agreements may be entered
into from time to time, in each case without notice to or authorization from any
Guarantor regardless of the financial or other condition of Borrower at the time
of any such grant or continuation or at the time such Hedge Agreement is entered
into, as the case may be. No Beneficiary shall have any obligation to disclose
or discuss with any Guarantor its assessment, or any Guarantor's assessment, of
the financial condition of Borrower. Each Guarantor has adequate means to obtain
information from Borrower on a continuing basis concerning the financial
condition of Borrower and its ability to perform its obligations under the
Credit Documents and the Hedge Agreements, and each Guarantor assumes the
responsibility for being and keeping informed of the financial condition of
Borrower and of all circumstances bearing upon the risk of nonpayment of the
Obligations. Each Guarantor hereby waives and relinquishes any duty on the part
of any Beneficiary to disclose any matter, fact or thing relating to the
business, operations or conditions of Borrower now known or hereafter known by
any Beneficiary.
7.11. BANKRUPTCY, ETC. (a) So long as any Obligations remain outstanding,
no Guarantor shall, without the prior written consent of Administrative Agent
acting pursuant to the instructions of Requisite Lenders, commence or join with
any other Person in commencing any bankruptcy, reorganization or insolvency
proceedings of or against Borrower or any other Guarantor. The obligations of
Guarantors hereunder shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or involuntary,
involving the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Borrower or any other Guarantor or by any defense which
Borrower or such Guarantor may have by reason of the order, decree or decision
of any court or administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Obligations if said proceedings had not been commenced) shall be
included in the Obligations because it is the intention of Guarantors and
Beneficiaries that the Obligations which are guarantied by Guarantors pursuant
hereto should be determined without regard to any rule of law or order which may
relieve Borrower of any portion of such Obligations. Guarantors will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Administrative Agent, or allow the claim
of Administrative Agent in respect of, any such interest accruing after the date
on which such proceeding is commenced.
(c) In the event that all or any portion of the Obligations are paid by
Borrower or any other Person, the obligations of Guarantors hereunder shall
continue and remain in full force and effect or be reinstated, as the case may
be, in the event that all or any part of such payment(s) are rescinded or
recovered directly or indirectly from any Beneficiary as a preference,
fraudulent transfer
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or otherwise, and any such payments which are so rescinded or recovered shall
constitute Obligations for all purposes hereunder.
7.12. NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge
thereof, such Guarantor shall give Administrative Agent written notice of any
condition or event which has resulted in (i) a material adverse change in the
financial condition of any Guarantor or Borrower or (ii a breach of or
noncompliance with any term, condition or covenant contained herein, any other
Credit Document, any Hedge Agreement or any other document delivered pursuant
hereto or thereto.
7.13. DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the Capital
Stock of any Guarantor or any of its successors in interest hereunder shall be
sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
or such successor in interest, as the case may be, hereunder shall automatically
be discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such Asset Sale; provided, as a
condition precedent to such discharge and release, Administrative Agent shall
have received evidence satisfactory to it that arrangements satisfactory to it
have been made for delivery to Administrative Agent of the applicable Net Asset
Sale Proceeds of such disposition pursuant to Section 2.12(a).
SECTION 8. EVENTS OF DEFAULT
8.1. EVENTS OF DEFAULT. If any one or more of the following conditions or
events shall occur:
(a) failure by Borrower to pay (i) when due any installment of principal
of any Loan when due, whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise; (ii) when due any amount payable to Issuing Bank in
reimbursement of any drawing under a Letter of Credit; or (iii) any interest on
any Loan or any fee or any other amount due hereunder within three (3) days
after the date due; or
(b) (i) failure of Holdings, Borrower or any of their respective
Subsidiaries to pay when due any principal of or interest on or any other amount
payable in respect of one or more items of Indebtedness (other than Indebtedness
referred to in Section 8.1(a)) in an individual principal amount of $1,250,000
or more or with an aggregate principal amount of $2,500,000 or more, in each
case beyond the end of any grace period provided therefor; or (ii) breach or
default by Holdings, Borrower or any of their respective Subsidiaries with
respect to any other term of (1) one or more items of Indebtedness in the
individual or aggregate principal amounts referred to in clause (i) above or (2)
any loan agreement, mortgage, indenture or other agreement relating to such
item(s) of Indebtedness, if the effect of such breach or default is to cause, or
to permit the holder or holders of that Indebtedness (or a trustee on behalf of
such holder or holders) to cause, that Indebtedness to become or be declared due
and payable (or redeemable) prior to its stated maturity or the stated maturity
of any underlying obligation, as the case may be (upon the giving or receiving
of notice, lapse of time, both, or otherwise); or
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(c) failure of any Credit Party to perform or comply with any term or
condition contained in Section 2.4, 5.1(d), 5.1(g), 5.2, 5.11 or Section 6
hereof; or
(d) any representation, warranty, certification or other statement made or
deemed made by any Credit Party in any Credit Document or in any statement or
certificate at any time given by any Credit Party in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any material
respect as the date made or deemed made; or
(e) any Credit Party shall default in the performance of or compliance
with any term contained herein or any of the other Credit Documents, other than
any such term referred to in any other Section of this Section 8.1, and such
default shall not have been remedied or waived within thirty (30) days after the
earlier of (i) an officer of such Credit Party becoming aware of such default or
(ii) receipt by Borrower of notice from Administrative Agent or any Lender of
such default; or
(f) (i) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of Holdings, Borrower or any of their respective
Subsidiaries, excluding Muzak Heart and Soul Foundation, in an involuntary case
under the Bankruptcy Code or under any other applicable bankruptcy, insolvency
or similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be commenced against Holdings,
Borrower or any of their respective Subsidiaries under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Holdings, Borrower or any
of their respective Subsidiaries, or over all or a substantial part of its
property, shall have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of Holdings,
Borrower or any of their respective Subsidiaries for all or a substantial part
of its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of Holdings,
Borrower or any of their respective Subsidiaries, and any such event described
in this clause (ii) shall continue for sixty (60) days unless dismissed, bonded
or discharged; or
(g) (i) Holdings, Borrower or any of their respective Subsidiaries,
excluding Muzak Heart and Soul Foundation, shall have an order for relief
entered with respect to it or shall commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or Holdings, Borrower or any of their
respective Subsidiaries shall make any assignment for the benefit of creditors;
or (ii) Holdings, Borrower or any of their respective Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors (or similar
governing body) of Holdings, Borrower or any of their respective Subsidiaries
(or any committee thereof) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to herein or in Section 8.1(f); or
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(h) any money judgment, writ or warrant of attachment or similar process
involving (i) in any individual case an amount in excess of $500,000 or (ii) in
the aggregate at any time an amount in excess of $2,500,000 (in either case to
the extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) shall be entered or
filed against Holdings, Borrower or any of their respective Subsidiaries or any
of their respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of thirty (30) days (or in any event later than five days
prior to the date of any proposed sale thereunder); or
(i) any order, judgment or decree shall be entered against Holdings,
Borrower or any of their respective Subsidiaries decreeing the dissolution or
split up of Holdings, Borrower or any of their respective Subsidiaries and such
order shall remain undischarged or unstayed for a period in excess of thirty
(30) days; or
(j) there shall occur one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
any Credit Party or any of their respective ERISA Affiliates in excess of
$2,500,000 during the term hereof; or there shall exist an amount of unfunded
benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually
or in the aggregate for all Pension Plans (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed benefit
liabilities), which exceeds $2,500,000; or
(k) a Change of Control shall occur; or
(l) at any time after the execution and delivery thereof, (i) the Guaranty
for any reason, other than the satisfaction in full of all Obligations, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void or any Guarantor shall repudiate its
obligations thereunder, (ii) any material provision of this Agreement or any
Collateral Document ceases to be in full force and effect (other than by reason
of a release of Collateral in accordance with the terms hereof or thereof or the
satisfaction in full of the Obligations in accordance with the terms hereof) or
shall be declared null and void, or Administrative Agent shall not have or shall
cease to have a valid and perfected Lien in any Collateral purported to be
covered thereby with the priority required by the relevant Collateral Document,
in each case for any reason other than the failure of Administrative Agent or
any Lender to take any action within its control, or (iii) any Credit Party
shall contest the validity or enforceability of any Credit Document in writing
or deny in writing that it has any further liability, including with respect to
future advances by Lenders, under any Credit Document to which it is a party; or
(m) the Merger shall not be consummated in accordance with this Agreement
and the applicable Related Agreements concurrently with the making of the
initial Loans, or the Merger shall be unwound, reversed or otherwise rescinded
in whole or in part for any reason; or
(n) Holdings shall (i) engage in any business other than entering into and
performing its obligations under and in accordance with the Credit Documents and
Related Agreements to which it is a party or (ii) own any assets other than 100%
of the Capital Stock of Borrower and Muzak Holdings Finance
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THEN, (1) upon the occurrence of any Event of Default described in Section
8.1(f) or 8.1(g), automatically, and (2) upon the occurrence of any other Event
of Default, at the request of (or with the consent of) Requisite Lenders, upon
notice to Borrower by Administrative Agent, (A) the Revolving Commitments, if
any, of each Lender having such Revolving Commitments and the Obligation of
Issuing Bank to issue any Letter of Credit shall immediately terminate, and (B)
each of the following shall immediately become due and payable, in each case
without presentment, demand, protest or other requirements of any kind, all of
which are hereby expressly waived by each Credit Party: (i) the unpaid principal
amount of and accrued interest on the Loans, (ii) an amount equal to the maximum
amount that may at any time be drawn under all Letters of Credit then
outstanding (regardless of whether any beneficiary under any such Letter of
Credit shall have presented, or shall be entitled at such time to present, the
drafts or other documents or certificates required to draw under such Letters of
Credit) and (iii) all other Obligations.
SECTION 9. AGENTS
9.1 APPOINTMENT OF AGENTS. GSCP and CIBC are hereby appointed Co-Lead
Arrangers and GSCP is hereby appointed Syndication Agent hereunder, and each
Lender hereby authorizes Co-Lead Arrangers and Syndication Agent to act as its
agents in accordance with the terms hereof and the other Credit Documents.
CIBOC is hereby appointed Administrative Agent hereunder and under the other
Credit Documents and each Lender hereby authorizes Administrative Agent to act
as its agent in accordance with the terms hereof and the other Credit Documents.
Each Agent hereby agrees to act upon the express conditions contained herein and
the other Credit Documents, as applicable. The provisions of this Section 9 are
solely for the benefit of Agents and Lenders and no Credit Party shall have any
rights as a third party beneficiary of any of the provisions thereof (other than
Borrower's right to approve the appointment of a successor Administrative Agent
under Section 9.7). In performing its functions and duties hereunder, each
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Holdings or any of its Subsidiaries. Syndication Agent,
without consent of or notice to any party hereto, may assign any and all of its
rights or obligations hereunder to any of its Affiliates. As of the Closing
Date, all the respective obligations of GSCP, in its capacity as Co-Lead
Arrangers and Syndication Agent, and CIBC, in its capacity as Co-Lead Arranger,
shall terminate.
9.2 POWERS AND DUTIES. Each Lender irrevocably authorizes each Agent to
take such action on such Lender's behalf and to exercise such powers, rights and
remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental thereto. Each
Agent shall have only those duties and responsibilities that are expressly
specified herein and the other Credit Documents. Each Agent may exercise such
powers, rights and remedies and perform such duties by or through its agents or
employees. No Agent shall have, by reason hereof or any of the other Credit
Documents, a fiduciary relationship in respect of any Lender; and nothing herein
or any of the other Credit Documents, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Credit Documents except as expressly set forth herein
or therein.
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9.3 GENERAL IMMUNITY. (a) No Agent shall be responsible to any Lender for
the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or any other Credit Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
any of Agent to Lenders or by or on behalf of any Credit Party to any Agent or
any Lender in connection with the Credit Documents and the transactions
contemplated thereby or for the financial condition or business affairs of any
Credit Party or any other Person liable for the payment of any Obligations, nor
shall any Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained in any of the Credit Documents or as to the use of the proceeds of the
Loans or as to the existence or possible existence of any Event of Default or
Default. Anything contained herein to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans or Letter of Credit Usage or the component
amounts thereof.
(b) No Agent nor any of its officers, partners, directors, employees or
agents shall be liable to Lenders for any action taken or omitted by any Agent
under or in connection with any of the Credit Documents except to the extent
caused by such Agent's gross negligence or willful misconduct. Each Agent shall
be entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection herewith or any of the other Credit
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders as
may be required to give such instructions under Section 10.5) and, upon receipt
of such instructions from Requisite Lenders (or such other Lenders, as the case
may be), such Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority, in accordance
with such instructions. Without prejudice to the generality of the foregoing,
(i) each Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper Person or
Persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for Holdings and its
Subsidiaries), accountants, experts and other professional advisors selected by
it; and (ii) no Lender shall have any right of action whatsoever against any
Agent as a result of such Agent acting or (where so instructed) refraining from
acting hereunder or any of the other Credit Documents in accordance with the
instructions of Requisite Lenders (or such other Lenders as may be required to
give such instructions under Section 10.5).
9.4 AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "LENDER" shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of banking, trust, financial advisory or other business with
Holdings or any of its Affiliates as if it were not performing the duties
specified herein, and
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may accept fees and other consideration from Borrower for services in connection
herewith and otherwise without having to account for the same to Lenders.
9.5 LENDERS' REPRESENTATIONS AND WARRANTIES. Each Lender represents and
warrants that it has made its own independent investigation of the financial
condition and affairs of Holdings, Borrower and each of their respective
Subsidiaries in connection with Credit Extensions hereunder and that it has made
and shall continue to make its own appraisal of the creditworthiness of
Holdings, Borrower and each of their respective Subsidiaries. No Agent shall
have any duty or responsibility, either initially or on a continuing basis, to
make any such investigation or any such appraisal on behalf of Lenders or to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any time
or times thereafter, and no Agent shall have any responsibility with respect to
the accuracy of or the completeness of any information provided to Lenders.
9.6 RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify each Agent, to the extent that such Agent shall
not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out hereof or the other
Credit Documents; provided, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished; provided,
in no event shall this sentence require any Lender to indemnify any Agent
against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement in excess of such Lender's Pro Rata Share
thereof; and provided further, this sentence shall not be deemed to require any
Lender to indemnify any Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement described in the
proviso in the immediately preceding sentence.
9.7 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign at
any time by giving thirty (30) days' prior written notice thereof to Lenders and
Borrower, and Administrative Agent may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to
Borrower and Administrative Agent and signed by Requisite Lenders. Upon any
such notice of resignation or any such removal, Requisite Lenders shall have the
right, upon five Business Days' notice to Borrower, to appoint a successor
Administrative Agent, as long as no Default or Event of Default has occurred and
is continuing, such appointment shall be subject to Borrower's approval, such
approval not to be unreasonably withheld. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Administrative Agent and the retiring or removed Administrative Agent
shall promptly (i) transfer to such successor Administrative Agent all sums,
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securities and other items of Collateral held under the Collateral Documents,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Administrative
Agent under the Credit Documents, and (ii) execute and deliver to such successor
Administrative Agent such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Administrative Agent of the security interests
created under the Collateral Documents, whereupon such retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent hereunder.
9.8 COLLATERAL DOCUMENTS AND GUARANTIES. (a) Each Lender hereby further
authorizes Administrative Agent, on behalf of and for the benefit of Lenders, to
be the agent for and representative of Lenders with respect to the Guaranty, the
Collateral and the Collateral Documents. Subject to Section 10.5, without
further written consent or authorization from Lenders, Administrative Agent may
execute any documents or instruments necessary to (i) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted hereby or to which Requisite Lenders (or such
other Lenders as may be required to give such consent under Section 10.5) have
otherwise consented or (ii release any Guarantor from the Guaranty pursuant to
Section 7.13 or with respect to which Requisite Lenders (or such other Lenders
as may be required to give such consent under Section 10.5) have otherwise
consented.
(b) Anything contained in any of the Credit Documents to the contrary
notwithstanding, Borrower, Administrative Agent and each Lender hereby agree
that (i) no Lender shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent for the benefit of Lenders in accordance with the terms hereof, and (ii)
in the event of a foreclosure by Administrative Agent on any of the Collateral
pursuant to a public or private sale, Administrative Agent or any Lender may be
the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Administrative Agent at such sale.
(c) It is the purpose hereof and the other Credit Documents that there
shall be no violation of any law of any jurisdiction denying or restricting the
right of banking corporations or associations to transact business as agent or
trustee in such jurisdiction. It is recognized that in case of litigation
hereunder or any of the other Credit Documents, and in particular in case of the
enforcement of any of the Credit Documents, or in case Administrative Agent
deems that by reason of any present or future law of any jurisdiction it may not
exercise any of the rights, powers or remedies granted herein or in any of the
other Credit Documents or take any other action which may be desirable or
necessary in connection therewith, it may be necessary that Administrative Agent
appoint an additional individual or institution as a separate trustee, co-
trustee, collateral agent or
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collateral co-agent (a "SUPPLEMENTAL COLLATERAL AGENT"). In the event that
Administrative Agent appoints a Supplemental Collateral Agent with respect to
any Collateral, (i) each and every right, power, privilege or duty expressed or
intended hereby or any of the other Credit Documents to be exercised by or
vested in or conveyed to Administrative Agent with respect to such Collateral
shall be exercisable by and vest in such Supplemental Collateral Agent to the
extent, and only to the extent, necessary to enable such Supplemental Collateral
Agent to exercise such rights, powers and privileges with respect to such
Collateral and to perform such duties with respect to such Collateral, and every
covenant and obligation contained in the Credit Documents and necessary to the
exercise or performance thereof by such Supplemental Collateral Agent shall run
to and be enforceable by either Agent or such Supplemental Collateral Agent, and
(ii) the provisions of this Section 9 and of Sections 10.2 and 10.3 that refer
to Administrative Agent shall inure to the benefit of such Supplemental
Collateral Agent and all references therein to Administrative Agent shall be
deemed to be references to Administrative Agent and/or such Supplemental
Collateral Agent, as the context may require. Should any instrument in writing
from Borrower or any other Credit Party be required by any Supplemental
Collateral Agent so appointed by Administrative Agent for more fully and
certainly vesting in and confirming to him or it such rights, powers, privileges
and duties, Borrower shall, or shall cause such Credit Party to, execute,
acknowledge and deliver any and all such instruments promptly upon request by
Administrative Agent. In case any Supplemental Collateral Agent, or a successor
thereto, shall die, become incapable of acting, resign or be removed, all the
rights, powers, privileges and duties of such Supplemental Collateral Agent, to
the extent permitted by law, shall vest in and be exercised by Administrative
Agent until the appointment of a new Supplemental Collateral Agent.
SECTION 10. MISCELLANEOUS
10.1 NOTICES. Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given to a Credit Party,
Syndication Agent, Issuing Bank or Administrative Agent shall be sent to such
Person's address as set forth on Appendix B or in the other relevant Credit
Document, and in the case of any Lender, the address as indicated on Schedule B
or otherwise indicated to Administrative Agent in writing. Each notice
hereunder shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided, no notice to any Agent shall be effective
until received by such Agent.
10.2 EXPENSES. Whether or not the transactions contemplated hereby shall
be consummated, Borrower agrees to pay promptly (a) all the actual and
reasonable costs and expenses of each Agent and Issuing Bank in the preparation
of the Credit Documents and any consents, amendments, waivers or other
modifications thereto (including, without limitation, all due diligence costs
and expenses incurred with respect thereto); (b) all the costs of furnishing all
opinions by counsel for Borrower and the other Credit Parties (including any
opinions requested by Lenders as to any legal matters arising hereunder) and of
Borrower's and each other Credit Party's performance of and compliance with all
agreements and conditions on its part to be performed or complied with
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hereunder and the other Credit Documents including with respect to confirming
compliance with environmental, insurance and solvency requirements; (c) the
reasonable fees, expenses and disbursements of counsel and other advisors to
Agents (in each case including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or matters requested by any Credit
Party; (d) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of Administrative Agent on behalf of Lenders pursuant
hereto, including filing and recording fees, expenses and taxes, stamp or
documentary taxes, search fees, title insurance premiums and reasonable fees,
expenses and disbursements of counsel to each Agent and of counsel providing any
opinions that any Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant the Collateral Documents; (e) all the
actual costs and reasonable fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers; (f) all the actual costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
appraisers, consultants, advisors and agents employed or retained by
Administrative Agent and its counsel) in connection with the custody or
preservation of any of the Collateral; (g) all other actual and reasonable costs
and expenses incurred by each Agent in connection with the syndication of the
Loans and Revolving Commitments and the negotiation, preparation and execution
of the Credit Documents and any consents, amendments, waivers or other
modifications thereto and the transactions contemplated thereby; and (h) after
the occurrence of a Default or an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by any Agent and Lenders in enforcing
any Obligations of or in collecting any payments due from any Credit Party
hereunder or under the other Credit Documents by reason of such Default or Event
of Default (including in connection with the sale of, collection from, or other
realization upon any of the Collateral or the enforcement of the Guaranty) or in
connection with any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a "work-out" or pursuant to any insolvency
or bankruptcy proceedings.
10.3 INDEMNITY. In addition to the payment of expenses pursuant to Section
10.2, whether or not the transactions contemplated hereby shall be consummated,
each Credit Party agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Agent and each Lender (each, an "INDEMNITEE"), from and against any and all
Indemnified Liabilities; provided, no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final, non-appealable
judgment of a court of competent jurisdiction. To the extent that the
undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 10.3 may be unenforceable in whole or in part because they are violative
of any law or public policy, the applicable Credit Party shall contribute the
maximum portion that it is permitted to pay and satisfy under applicable law to
the payment and satisfaction of all Indemnified Liabilities incurred by
Indemnitees or any of them.
10.4 SET-OFF. In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default each Lender is
hereby authorized by each Credit Party at any time or from time to
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time, without notice to any Credit Party or to any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of any
Credit Party against and on account of the obligations and liabilities of any
Credit Party to such Lender hereunder, the Letters of Credit and participations
therein and under the other Credit Documents, including all claims of any nature
or description arising out of or connected herewith, the Letters of Credit and
participations therein or with any other Credit Document, irrespective of
whether or not (a) such Lender shall have made any demand hereunder or (b) the
principal of or the interest on the Loans or any amounts in respect of the
Letters of Credit or any other amounts due hereunder shall have become due and
payable pursuant to Section 2 and although said obligations and liabilities, or
any of them, may be contingent or unmatured. Each Credit Party hereby further
grants to Administrative Agent and each Lender a security interest in all
Deposit Accounts maintained with Administrative Agent or such Lender as security
for the Obligations.
10.5 AMENDMENTS AND WAIVERS. (a) Subject to Section 10.5(b), 10.5(c) and
10.5(d), no amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the written concurrence of Requisite
Lenders.
(b) Without the written consent of each Lender, no amendment,
modification, termination, or consent shall be effective to:
(i) amend the pro rata sharing of payments required herein;
(ii) amend the definition of "REQUISITE LENDERS"; provided, with
the consent of Requisite Lenders, additional extensions of credit pursuant
hereto may be included in the determination of "REQUISITE LENDERS" on
substantially the same basis as the Term Loan Amounts, the Term Loans, the
Revolving Commitments and the Revolving Loans are included on the Closing Date;
(iii) amend, modify, terminate or waive any provision of this Section
10.5 or any other provision in this Agreement that by its terms expressly
requires the consent of certain Lenders;
(iv) extend the stated expiration date of any Letter of Credit
beyond the Revolving Commitment Termination Date;
(v) reduce the principal amount of any Loan or any reimbursement
obligation in respect of any Letter of Credit;
(vi) release or otherwise subordinate all or substantially all of
the Collateral or any of the Guarantors from the Guaranty except as expressly
provided in the Credit Documents;
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(vii) alter the required allocation of prepayments from Net High
Yield Debt Proceeds among the Term Loans as set forth in Section 2.13(b)(ii)
(except as otherwise set forth in Section 2.13(c)); or
(viii) amend the definition of Interest Period to permit Interest
Periods in excess of six months.
(c) Without the written consent of each Lender that would be affected
thereby, no amendment, modification, termination, or consent shall be effective
if the effect thereof would:
(i) increase any Revolving Commitment of any Lender over the amount
thereof then in effect; provided, no amendment, modification or waiver of any
condition precedent, covenant, Default or Event of Default shall constitute an
increase in any Revolving Commitment of any Lender;
(ii) reduce the principal amount of any Loan or the rate of interest
on any Loan (other than any waiver of any increase in the interest rate
applicable to any Loan pursuant to Section 2.8) or any fee payable hereunder or
reduce the amount of any payment of principal, interest or fees required to be
made hereunder;
(iii) extend, waive or excuse the scheduled final maturity of any
Loan or any note, any scheduled reduction of Revolving Commitments or any
scheduled payment of any Loan, interest on any Loan or any fee hereunder;
(iv) consent to the assignment or transfer by any Credit Party of
any of its rights and obligations under any Credit Document.
(d) No amendment, modification, termination or waiver of any provision of
the Credit Documents, or consent to any departure by any Credit Party therefrom,
shall:
(i) amend the definition of "REQUISITE CLASS LENDERS" without the
consent of Requisite Class Lenders of each Class; provided, with the consent of
the applicable Requisite Class Lenders, additional extensions of credit pursuant
hereto may be included in the determination of such "REQUISITE CLASS LENDERS" on
substantially the same basis as the Term Loan Amounts, the Term Loans, the
Revolving Commitments and the Revolving Loans are included on the Closing Date;
(ii) alter the required application of any repayments or prepayments
as between Classes pursuant to Section 2.13 without the consent of Requisite
Class Lenders of each Class which is being allocated a lesser repayment or
prepayment as a result thereof;
(iii) amend, modify, terminate or waive any provision of Section 9 as
the same applies to any Agent, or any other provision hereof as the same applies
to the rights or obligations of any Agent, in each case without the consent of
such Agent;
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(iv) amend, modify, terminate or waive any obligation of Lenders
relating to the purchase of participations in Letters of Credit as provided in
Section 2.2A(e) without the written consent of Administrative Agent and of
Issuing Bank;
(v) amend, modify, terminate or waive any provision of any
Collateral Document having the effect of securing thereunder additional
Indebtedness (other than Indebtedness comprising Obligations) by the Collateral
without the written concurrence of Lenders having or holding more than 66-2/3%
of the sum of the aggregate Tranche A Term Loan Exposure of all Lenders plus the
aggregate Tranche B Term Loan Exposure of all Lenders plus the aggregate Tranche
C Term Loan Exposure of all Lenders plus the aggregate Revolving Exposure of all
Lenders;
(vi) amend, modify, or waive any provision of Section 3.2 without
the consent of Requisite Class Lenders having more than 50% of the aggregate
Revolving Exposure; and
(vii) amend, modify or waive any provision of Section 2.12 or Section
6.4 or any definition contained in either such Section without the consent of
(A) Requisite Class Lenders having more than 50% of the sum of the aggregate
Revolving Exposure and the aggregate Tranche A Term Loan Exposure of all Lenders
and (B) Requisite Lenders.
(e) Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on any Credit Party in any case shall entitle any
Credit Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.5 shall be binding upon each Lender
at the time outstanding, each future Lender and, if signed by a Credit Party, on
such Credit Party.
10.6. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. (a) This Agreement shall be
binding upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and the successors and assigns
of Lenders. No Credit Party's rights or obligations hereunder nor any interest
therein may be assigned or delegated by any Credit Party without the prior
written consent of all Lenders.
(b) Borrower, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Revolving Commitments and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Revolving Commitment or Loan
shall be effective unless and until an Assignment Agreement effecting the
assignment or transfer thereof shall have been delivered to Administrative Agent
and recorded in the Register. Prior to such recordation, all amounts owed with
respect to the applicable Revolving Commitment or Loan shall be owed to the
Lender listed in the Register as the owner thereof, and any request, authority
or consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Revolving Commitments or Loans.
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(c) Each Lender shall have the right at any time to sell, assign or
transfer any Revolving Commitment, any Loan or any other Obligation:
(i) to any Person meeting the criteria of clause (i) of the
definition of the term "ELIGIBLE ASSIGNEE" upon the giving of notice to Borrower
and Administrative Agent; and
(ii) to any Person meeting the criteria of clause (ii) of the
definition of the term "Eligible Assignee" upon the consent of each of Borrower
and Administrative Agent (neither of which shall be unreasonably withheld or
delayed or shall be required at any time an Event of Default shall have occurred
and then be continuing); provided, each such assignment pursuant to this Section
10.6(c)(ii) shall be in an aggregate amount of not less than $3,000,000 (or such
lesser amount as may be agreed to by Borrower and Administrative Agent or as
shall constitute the aggregate amount of the Revolving Commitments, Loans and
other Obligations of the assigning Lender).
(d) The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, together with (i) a
processing and recordation fee of $3,500, and (ii) such forms, certificates or
other evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment Agreement may be
required to deliver to Administrative Agent pursuant to Section 2.19(c).
(e) Upon its receipt of a duly executed and completed Assignment
Agreement, together with the processing and recordation fee referred to in
Section 10.6(d) (and any forms, certificates or other evidence required by this
Agreement in connection therewith as a condition to such assignment),
Administrative Agent shall record the information contained in such Assignment
Agreement in the Register, shall give prompt notice thereof to Borrower and
shall maintain a copy of such Assignment Agreement.
(f) Each Lender, upon execution and delivery hereof or upon executing and
delivering an Assignment Agreement, as the case may be, represents and warrants
as of the Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments or
loans such as the Revolving Commitments or Loans, as the case may be; and (iii)
it will make or invest in, as the case may be, its Revolving Commitments or
Loans for its own account in the ordinary course of its business and without a
view to distribution of such Revolving Commitments or Loans within the meaning
of the Securities Act or the Exchange Act or other federal securities laws (it
being understood that, subject to the provisions of this Section 10.6, the
disposition of such Revolving Commitments, Loans or any interests therein shall
at all times remain within its exclusive control).
(g) Subject to the terms and conditions of this Section 10.6, as of the
"Effective Date" specified in such Assignment Agreement: (i) the assignee
thereunder shall have the rights and obligations of a "Lender" hereunder to the
extent such rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement and shall thereafter be a party hereto and a
"Lender" for all purposes hereof; (ii) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement,
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relinquish its rights (other than any rights which survive the termination
hereof under Section 10.8) and be released from its obligations hereunder (and,
in the case of an Assignment Agreement covering all or the remaining portion of
an assigning Lender's rights and obligations hereunder, such Lender shall cease
to be a party hereto; provided, anything contained in any of the Credit
Documents to the contrary notwithstanding, Issuing Bank shall continue to have
all rights and obligations thereof with respect to such Letters of Credit until
the cancellation or expiration of such Letters of Credit and the reimbursement
of any amounts drawn thereunder); (iii) the Revolving Commitments shall be
modified to reflect the Revolving Commitment of such assignee and any remaining
Revolving Commitment of such assigning Lender, if any; and (iv) if any such
assignment occurs after the issuance of any note hereunder, the assigning Lender
shall, upon the effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable notes to Administrative Agent for
cancellation, and thereupon Borrower shall issue and deliver new notes, if so
requested by the assignee and/or assigning Lender, to such assignee and/or to
such assigning Lender, with appropriate insertions, to reflect the new Revolving
Commitments and/or outstanding Loans of the assignee and/or the assigning
Lender.
(h) Each Lender shall have the right at any time to sell one or more
participations to any Person in all or any part of its Revolving Commitments,
Loans or in any other Obligation. The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder
except with respect to any amendment, modification or waiver described in
Section 10.5(b), 10.5(c) or 10.5(d) to the extent directly affecting the Loan or
Revolving Commitment relating to the participation. All amounts payable by any
Credit Party hereunder, including amounts payable to such Lender pursuant to
Section 2.17(c), 2.18 or 2.19, shall be determined as if such Lender had not
sold such participation. Each Credit Party and each Lender hereby acknowledge
and agree that, solely for purposes of Sections 2.16 and 10.4, (1) any
participation will give rise to a direct obligation of each Credit Party to the
participant and (2) the participant shall be considered to be a "Lender".
(i) In addition to any other assignment permitted pursuant to this
Section 10.6, (i) any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its notes, if any, to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank, and (ii) with the consent of Borrower and
Administrative Agent any Lender which is an investment fund may pledge all or
any portion of its notes, if any, or Loans; provided, no Lender, as between
Borrower and such Lender, shall be relieved of any of its obligations hereunder
as a result of any such assignment and pledge, and provided further, in no event
shall the applicable Federal Reserve Bank or other assignee be considered to be
a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
10.7. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
127
10.8. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Credit Extension.
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.17(c), 2.18, 2.19, 10.2,
10.3 and 10.4 and the agreements of Lenders set forth in Sections 2.16 and 9.6
shall survive the payment of the Loans, the cancellation or expiration of the
Letters of Credit and the reimbursement of any amounts drawn thereunder, and the
termination hereof.
10.9. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
Administrative Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Credit Document shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude other or further exercise thereof or of any other power,
right or privilege. The rights, powers and remedies given to each Agent and
each Lender hereby are cumulative and shall be in addition to and independent of
all rights, powers and remedies existing by virtue of any statute or rule of law
or in any of the other Credit Documents or any of the Hedge Agreements. Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
10.10. MARSHALLING; PAYMENTS SET ASIDE. Neither Administrative Agent nor
any Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent for the benefit of
Lenders), or Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds of
such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.11. SEVERABILITY. In case any provision in or obligation hereunder or
any note issued in connection herewith shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
10.12. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Revolving Commitments of any other Lender hereunder.
Nothing contained herein or in any other Credit Document, and no action taken by
Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be
128
necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.13. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
10.14. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
--------------
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES THEREOF.
10.15. CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
-----------------------
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER CREDIT DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION
WITH ITS PROPERTIES, IRREVOCABLY (A) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (B) WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS; (C) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (D) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (C)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE CREDIT
PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (E) AGREES SUCH LENDERS
RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
10.16. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
--------------------
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS OR
ANY DEALINGS BETWEEN THE PARTIES RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND
ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT
THIS
129
WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH
HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR
ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
10.17. CONFIDENTIALITY. Each Lender shall hold all non-public information
obtained pursuant to the requirements hereof which has been identified as
confidential by Borrower in accordance with such Lender's customary procedures
for handling confidential information of this nature and in accordance with
prudent lending or investing practices, it being understood and agreed by
Borrower that in any event a Lender may make disclosures to Affiliates of such
Lender or disclosures reasonably required by any bona fide or potential
assignee, transferee or participant in connection with the contemplated
assignment, transfer or participation by such Lender of any Loans or any
participations `therein or by any direct or indirect contractual counterparties
(or the professional advisors thereto) in swap agreements (provided, such swap
counterparties and advisors are advised of and agree to be bound by the
provisions of this Section 10.17) or disclosures required or requested by any
governmental agency or representative thereof or by the NAIC or pursuant to
legal process; provided, unless specifically prohibited by applicable law or
court order, each Lender shall notify Borrower of any request by any
governmental agency or representative thereof (other than any such request in
connection with any examination of the financial condition or other routine
examination of such Lender by such governmental agency) for disclosure of any
such non-public information prior to disclosure of such information; and
provided further, in no event shall any Lender be obligated or required to
return any materials furnished by Borrower or any of its Subsidiaries.
10.18. USURY SAVINGS CLAUSE. Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate. If the
rate of interest (determined without regard to the preceding sentence) under
this Agreement at any time exceeds the Highest Lawful Rate, the outstanding
amount of the Loans made hereunder shall bear interest at the Highest Lawful
Rate until the total amount of interest due hereunder equals the amount of
interest which would have been due hereunder if the stated rates of interest set
forth in this Agreement had at all times been in effect. In addition, if when
the Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase
130
provided for above) is less than the total amount of interest which would have
been due hereunder if the stated rates of interest set forth in this Agreement
had at all times been in effect, then to the extent permitted by law, Borrower
shall pay to Administrative Agent an amount equal to the difference between the
amount of interest paid and the amount of interest which would have been paid if
the Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of Lenders and Borrower to conform strictly to
any applicable usury laws. Accordingly, if any Lender contracts for, charges, or
receives any consideration which constitutes interest in excess of the Highest
Lawful Rate, then any such excess shall be cancelled automatically and, if
previously paid, shall at such Lender's option be applied to the outstanding
amount of the Loans made hereunder or be refunded to Borrower.
10.19. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
131
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
AUDIO COMMUNICATIONS NETWORK, LLC,
as Borrower
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: Executive Vice President
S-1
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MUZAK HOLDINGS LLC,
as a Guarantor
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title:
S-2
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MUZAK CAPITAL CORPORATION,
as a Guarantor
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-3
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
MLP ENVIRONMENTAL MUSIC, LLC,
as a Guarantor
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-4
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
ELECTRO-SYSTEMS CORPORATION,
as a Guarantor
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BUSINESS SOUND, INC.,
as a Guarantor
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: Vice President
S-6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Syndication Agent, Co-Lead Arranger and a
Lender
By: ______________________________________
Authorized Signatory
S-7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, Issuing Bank and a
Lender
By: /s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Director
S-8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
CIBC XXXXXXXXXXX CORP.,
as Co-Lead Arranger
By: /s/ Xxxxx Xxxxxxx
-------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Director
S-9
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BANKBOSTON, N.A.,
as Lender
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
S-10
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
TERM LOAN AMOUNTS
==============================================================================================
Tranche A Pro Tranche B Pro Tranche C Pro
Term Loan Rata Term Loan Rata Term Loan Rata
Lender Amount Share Amount Share Amount Share
==============================================================================================
Xxxxxxx Xxxxx Credit $10,612,500 35.375% $ 53,000,000 50.47619 --- ---
Partners L.P. %
Canadian Imperial Bank $10,612,500 35.375% $ 52,00,000 49.52381 --- ---
of Commerce %
BankBoston, N.A. $ 8,775,000 29.25% ---- --- --- ---
Total $30,000,000 100% $105,000,000 100% --- ---
==========================================================================================
REVOLVING COMMITMENTS
===============================================================================
Lender Revolving Commitment Pro Rata Share
Xxxxxxx Sachs Credit Partners L.P. $14,387,500 41.10714%
Canadian Imperial Bank of Commerce $14,387,500 41.10714%
BankBoston, N.A. $ 6,225,000 17.78572%
Total $35,000,000 100%
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXXXXXXX X-0
XXXXXXXX X
TO CREDIT AND GUARANTY AGREEMENT
NOTICE ADDRESSES
AUDIO COMMUNICATIONS
NETWORK, LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
MUZAK HOLDINGS LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
MUZAK CAPITAL CORPORATION
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
MLP ENVIRONMENTAL MUSIC, LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
BUSINESS SOUND, INC.
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
APPENDIX B-1
ELECTRO-SYSTEMS CORPORATION
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
In each case, with a copies (which will not constitute notice) to:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
and
Muzak LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Syndication Agent
Xxxxxxx Sachs Credit Partners L.P.
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy of all Notices to:
Xxxxxxx Xxxxx Credit Partners L.P.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopier: (000) 000-0000
APPENDIX B-2
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, Lender and Issuing Bank
Administrative Agent's Principal Office:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services
Telecopier: (000) 000-0000
In each case, with a copy to:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Media Group, 8th Floor
Telecopier: (000) 000-0000
BANKBOSTON, N.A.,
as Lender
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
APPENDIX B-3
APPENDIX A
TO CREDIT AND GUARANTY AGREEMENT
Term Loan Amounts
==========================================================================================
Tranche A Pro Tranche B Pro Tranche C Pro
Term Loan Rata Term Loan Rata Term Loan Rata
Lender Amount Share Amount Share Amount Share
==========================================================================================
Xxxxxxx Xxxxx Credit $10,612,500 35.375% $ 53,000,000 50.47619 --- ---
Partners L.P. %
Canadian Imperial Bank $10,612,500 35.375% $ 52,000,000 49.52381 --- ---
of Commerce %
BankBoston, N.A. $ 8,775,000 29.25% --- --- --- ---
Total $30,000,000 100% $105,000,000 100% --- ---
==========================================================================================
Revolving Commitments
===========================================================================
Lender Revolving Commitment Pro Rata Share
Xxxxxxx Sachs Credit Partners L.P. $14,387,500 41.00000%
Canadian Imperial Bank of Commerce $14,387,500 41.00000%
BankBoston, N.A. $ 6,225,000 17.78572%
Total $35,000,000 100%
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
XXXXXXXX X
TO CREDIT AND GUARANTY AGREEMENT
Notice Addresses
AUDIO COMMUNICATIONS
NETWORK, LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
MUZAK HOLDINGS LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
MUZAK CAPITAL CORPORATION
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
MLP ENVIRONMENTAL MUSIC, LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
BUSINESS SOUND, INC.
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
ELECTRO-SYSTEMS CORPORATION
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
In each case, with a copies (which will not constitute notice) to:
Xxxxxxxx & Xxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxx
Telecopier: (000) 000-0000
and
Muzak LLC
c/o ABRY Partners, Inc.
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Syndication Agent
Xxxxxxx Sachs Credit Partners L.P.
c/o Goldman, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy of all Notices to:
Xxxxxxx Xxxxx Credit Partners L.P.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxxx
Telecopier: (000) 000-0000
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent, Lender and Issuing Bank
Administrative Agent's Principal Office:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Agency Services
Telecopier: (000) 000-0000
In each case, with a copy to:
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Media Group, 8th Floor
Telecopier: (000) 000-0000
BANKBOSTON, N.A.,
as Lender
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
SCHEDULE 4.1 TO
CREDIT AND GUARANTY AGREEMENT
ORGANIZATION, ETC.
SCHEDULE 4.10(b) TO
CREDIT AND GUARANTY AGREEMENT
REAL ESTATE ASSETS
SCHEDULE 4.10(c) TO
CREDIT AND GUARANTY AGREEMENT
INTELLECTUAL PROPERTY; PROPRIETARY SOFTWARE;
LICENSE AGREEMENTS
REGISTERED
TRADEMARKS AND APPLICATIONS
---------------------------
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Reg. No. / Issued /
Jurisdiction Trademark (App. No.) (Date App.)
------------ --------- ---------- -----------
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REGISTERED
COPYRIGHTS AND APPLICATIONS
---------------------------
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Reg. No. / Issued /
Jurisdiction Copyright (App. No.) (Date App.)
------------ --------- ---------- -----------
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REGISTERED
PATENTS AND APPLICATIONS
------------------------
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Patent No. / Issued /
------------ --------
Jurisdiction Patent (App. No.) (Date App.)
------------ ------ ------------ -----------
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UNREGISTERED
TRADEMARKS AND SERVICE MARKS
----------------------------
UNREGISTERED
COPYRIGHTS AND EXCLUSIVELY LICENSED COPYRIGHTS
----------------------------------------------
SCHEDULE 4.13 TO
CREDIT AND GUARANTY AGREEMENT
MATERIAL CONTRACTS
SCHEDULE 5.10 TO
CREDIT AND GUARANTY AGREEMENT
CONDITIONS TO SATISFY AS TO
MATERIAL REAL ESTATE ASSETS
Fully executed and notarized Mortgages (as defined below), in proper form for
recording in all appropriate places in all applicable jurisdictions, encumbering
each such Material Real Estate Asset (each, a "Mortgaged Property").
1. An opinion of counsel (which counsel shall be reasonably satisfactory
to Syndication Agent and Administrative Agent) in each state in which a
Mortgaged Property is located with respect to the enforce ability of the
form(s) of Mortgages to be recorded in such state and such other matters as
Syndication Agent and Administrative Agent may reasonably request, in each
case in form and substance reasonably satisfactory to Syndication Agent and
Administrative Agent.
2. In the case of each Leasehold Property that is a Mortgaged Property,
(1) a Landlord Consent and Estoppel and (2) evidence that such Leasehold
Property is a Recorded Leasehold Interest (as defined below).
3. ALTA mortgagee title insurance policies or unconditional commitments
therefor issued by a title company with respect to each Mortgaged Property,
together with a title report issued by a title company with respect
thereto, and copies of all recorded documents listed as exceptions to title
or otherwise referred to therein, each in form and substance reasonably
satisfactory to Syndication Agent and Administrative Agent.
4. Evidence of flood insurance with respect to each Flood Hazard Property
(as defined below) that is located in a community that participates in the
National Flood Insurance Program, in each case in compliance with any
applicable regulations of the Board of Governors of the Federal Reserve
System, in form and substance reasonably satisfactory to Syndication Agent
and Administrative Agent.
5. ALTA surveys of all Mortgaged Properties which are not Leasehold
Properties, certified to Administrative Agent and dated not more than
thirty (30) days prior to the delivery of such survey.
DEFINED TERMS
-------------
"Flood Hazard Property" means a Mortgaged Property located in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards.
"Landlord Consent and Estoppel" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, pursuant to which such lessor agrees,
for the benefit of Administrative Agent, (i) that without any further consent of
such lessor or any further action on the part of the Credit Party holding such
Leasehold Property, such Leasehold Property may be encumbered pursuant to a
Mortgage and may be assigned to the purchaser at a foreclosure sale or in a
transfer in lieu of such a sale (and to a subsequent third party assignee if
Administrative Agent, any Lender, or an Affiliate of either so acquires such
Leasehold Property), (ii) that such lessor shall not terminate such lease as a
result of a default by such Credit Party thereunder without first giving
Administrative Agent notice of such default and at least sixty (60) days (or, if
such default cannot reasonably be cured by Administrative Agent within such
period, such longer period as may reasonably be required) to cure such default
and (iii) to such other matters relating to such Leasehold Property as
Administrative Agent may reasonably request.
"Leasehold Property" means any leasehold interest of any Credit Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Administrative Agent in its sole discretion as
not being required to be included in the Collateral.
"Mortgage" means a form of mortgage acceptable to Administrative Agent.
"Record Document" means, with respect to any Leasehold Property, (i) the
lease evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or (ii) if
such Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document, executed and
acknowledged by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
"Recorded Leasehold Interest" means a Leasehold Property with respect to
which a Record Document has been recorded in all places necessary or desirable,
in Administrative Agent's reasonable judgment, to give constructive notice of
such Leasehold Property to third-party purchasers and encumbrancers of the
affected real property.
SCHEDULE 6.1 TO
CREDIT AND GUARANTY AGREEMENT
CERTAIN INDEBTEDNESS
SCHEDULE 6.2 TO
CREDIT AND GUARANTY AGREEMENT
CERTAIN LIENS
SCHEDULE 6.5 TO
CREDIT AND GUARANTY AGREEMENT
CERTAIN INVESTMENTS
