BRIDGE LOAN AGREEMENT
This Bridge Loan Agreement, dated as of May 21, 1999 (this "Agreement"),
is by and among Sunburst Texas, LP, a Delaware limited partnership ("Borrower"),
Heftel Broadcasting Texas, L.P., a Delaware limited partnership ("Lender"), and
Heftel Broadcasting Corporation, a Delaware corporation ("Heftel").
WHEREAS, the Borrower has entered into that certain Stock Purchase
Agreement, dated March 2, 1999, as amended (the "Stock Purchase Agreement"),
with the holders of the Common and Class A Common Stock of Delaware Radio, Inc.,
a Delaware corporation ("DRI"), the licensee of radio station KLTY-FM (the
"Station"), providing for the purchase by Borrower of all of the capital stock
of DRI outstanding at the time of closing (the "DRI Acquisition"); and
WHEREAS, the Lender has entered into negotiations with SBT Communications
Statutory Trust (the "Trust") regarding a potential purchase of certain assets
of the Station (the "Asset Purchase"); and
WHEREAS, the Trust's obligations to proceed with the transactions
contemplated by the Asset Purchase will be conditioned upon the successful
consummation of the DRI Acquisition; and
WHEREAS, the Borrower will require funding to complete the DRI
Acquisition and has therefore requested that Heftel commit to cause the Lender
(Heftel's subsidiary) to extend a bridge loan to the Borrower; and
WHEREAS, Heftel has agreed to cause the Lender to extend such bridge loan
upon the terms and conditions set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
1. CERTAIN DEFINITIONS. As used herein, the following terms shall
have the following meanings:
"Affiliate" means any Person that directly or indirectly controls or is
controlled by or is under common control with another Person; and the term
"control" means the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities or equity interests, by contract or
otherwise.
"Applicable Rate" shall mean (i) 7% per annum with respect to the period
from the Effective Date through September 30, 1999; (ii) 7.5% per annum with
respect to the period from October 1, 1999 through October 31, 1999; (iii) 8%
per annum with respect to the period from November 1, 1999 through November 30,
1999; and (iv) 8.5% per annum with respect to the period from December 1, 1999
through January 15, 2000.
"Borrowing Notice" shall mean the written notice of Borrower to Lender
that it
requests to receive the Bridge Loan.
"Breakage Costs" shall mean (i) the difference between Lender's interest
obligation to its banks in respect of the LIBOR Advance and the interest earned
by Lender on its investment of the LIBOR Advance from the fourth business day
after the date of the Borrowing Notice through the Effective Date or Commitment
Termination Date, as the case may be, and (ii) the amounts charged to Lender by
its banks for any loss, cost or expense incurred by such banks by reason of
Lender's repayment to such banks of the LIBOR Advance on a date other than the
end of the applicable interest period.
"Bridge Loan" shall mean the extension of credit to Borrower made on the
Effective Date in the principal amount of $57.0 million.
"Bridge Loan Papers" shall mean this Bridge Loan Agreement, the Note, the
Guaranty, the Security Agreement, the Stock Pledge Agreement, the Collateral
Assignment Agreement, the Guarantor Security Agreement and the Partnership
Pledge Agreement.
"Collateral" shall have the meaning set forth in the Security Agreement
and the Guarantor Security Agreement.
"Collateral Assignment Agreement" means the Collateral Assignment of
Leases Agreement, dated the Effective Date and in the form of Exhibit F hereto,
pursuant to which certain leases of DRI will be pledged to Lender to secure
payment of the Obligations.
"Commitment Termination Date" shall mean the date on which Borrower has
advised Lender in writing of its election to terminate Lender's commitment to
make the Bridge Loan, as described in Section 3(b) hereof.
"Distribution" shall mean, with respect to any Person, (i) the
retirement, redemption, purchase or other acquisition for value of any capital
stock or other equity securities issued by such Person or (ii) the declaration
or payment of any dividend or distribution on or with respect to any such
capital stock or other equity securities (other than a stock dividend payable
only in the capital stock of such Person).
"Effective Date" shall mean the date on which the Bridge Loan is made.
"FCC" shall mean the Federal Communications Commission.
"GoGlobal" shall mean GoGlobal Broadcasting, Inc.
"Governmental Licenses" shall mean all licenses, construction permits or
authorizations issued by or pending before the FCC or any other governmental
authority for use in the operation of the Station, together with any and all
renewals, extensions and modifications thereof.
"Guarantor Security Agreement" means the Guarantor Security Agreement,
dated the Effective Date and in the form of Exhibit E hereto, pursuant to which
substantially all assets of DRI will be pledged to Lender to secure payment of
the Guarantor's Obligations (as defined in
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the Guarantor Security Agreement).
"Guaranty" shall mean the Guaranty, dated the Effective Date and in the
form of Exhibit B hereto, executed by DRI in favor of Lender.
"Highest Lawful Rate" shall mean, at the particular time of
determination, the maximum rate of interest which, under applicable law, Lender
is then permitted to charge with respect to the Bridge Loan.
"Holding Company" shall mean the corporate entity which the Borrower may
elect to form, after the Effective Date, as its wholly-owned subsidiary to own
the outstanding capital stock of DRI.
"Indebtedness" means all indebtedness of a Person (i) in respect of money
borrowed, (ii) evidenced by a note, debenture or other like written obligation
to pay money (including, without limitation, all of the Obligations), (iii) in
respect of rent or hire of property under leases required to be capitalized
under generally accepted accounting principles or for or in connection with the
deferred purchase price of property, (iv) in respect of obligations under
conditional sales or other title retention agreements and (v) all guaranties of
any or all of the foregoing.
"LIBOR Advance" shall mean the 30-day LIBOR option loan, in the principal
amount of the Bridge Loan, requested by Lender from its banks under Lender's
existing credit agreement as a result of Lender's receipt of the Borrowing
Notice to enable Lender to fund the Bridge Loan.
"Lien" shall mean any claim, lien, mortgage, deed of trust, security
interest, pledge, charge, encumbrance or other right of a creditor to have its
claim satisfied out of any property or assets, or the proceeds therefrom, prior
to the general creditors of the owner thereof.
"Maturity Date" shall mean the earlier of (i) the closing of the
transactions contemplated by the STLP Acquisition and (ii) January 15, 2000.
"Note" shall mean the promissory note, dated the Effective Date and in
the form of Exhibit A hereto, evidencing the Bridge Loan.
"Obligations" shall mean any and all indebtedness of Borrower due or to
become due to Lender pursuant to the terms of this Agreement.
"Partnership Pledge Agreement" means the Partnership Interest Pledge
Agreement, dated the date hereof and in the form of Exhibit G hereto, pursuant
to which all of the equity interests in the Borrower have been pledged to Lender
to secure payment of the Obligations.
"Permitted Liens" means any of the following Liens: (i) the Liens created
under the Bridge Loan Papers; (ii) Liens for taxes or assessments and similar
charges, which either are not delinquent or being contested diligently and in
good faith by appropriate proceedings, and as to which Borrower has set aside
adequate reserves on its books; (iii) statutory Liens, such as mechanic's,
materialman's, warehouseman's carrier's or other like Liens incurred in good
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faith in the ordinary course of business; (iv) zoning ordinances, easements,
licenses, reservations, provisions, covenants, conditions, waivers or
restrictions on the use of property and other title exceptions that do not
materially and adversely affect the use or value of a Person's property; (v)
Liens in respect of judgments or awards with respect to which no Event of
Default would exist; (vi) Liens to secure payment of insurance premiums in
connection with workers' compensation, unemployment insurance and similar
programs; and (vii) Liens arising in connection with purchase money security
interests for equipment leases or purchases in an aggregate amount not to exceed
$500,000.
"Permitted Investments" means (i) investments in direct obligations of,
or instruments unconditionally guaranteed by, the United States of America or in
certificates of deposit issued by a member bank of the Federal Reserve System
having a combined capital and surplus of at least $100 million, (ii) investments
in commercial or finance paper which, at the time of investment, is rated either
"A", "AAA" or better by Xxxxx'x Investors Service, Inc. or Standard & Poor's
Corporation, respectively, or at the equivalent rate by any of their respective
successors and (iii) any interests in any money market account maintained, at
the time of investment, with a member bank described in clause (i) above, the
investments of which, at the time of investment, are restricted to the types
described in clause (i) above; and in each case, with maturities not exceeding
one year.
"Person" shall mean any individual, corporation, limited liability
company, partnership, joint venture, trust or other entity.
"SDLP" shall mean Sunburst Dallas, LP, a Delaware limited partnership.
"STLP Acquisition" means the purchase by the Trust from the Borrower,
either directly or indirectly, of 100% of the issued and outstanding capital
stock of DRI.
"Security Agreement" shall mean that certain Security Agreement, dated
even date herewith and in the form of Exhibit C hereto, pursuant to which
substantially all assets of Borrower have been pledged to Lender to secure
payment of the Obligations.
"Stock Pledge Agreement" shall mean that certain Stock Pledge Agreement,
dated the Effective Date and in the form of Exhibit D hereto, pursuant to which
all of the capital stock of DRI will be pledged to Lender to secure payment of
the Obligations.
"Time Brokerage Agreement" shall mean a Time Brokerage Agreement, in
customary industry form and pursuant to which DRI will grant to SDLP the right
to program the Station.
2. THE BRIDGE LOAN.
2.1. REPAYMENT OF PRINCIPAL AMOUNT. Borrower shall repay the entire
unpaid principal amount of the Bridge Loan on the Maturity Date. Borrower shall
have the right to prepay without penalty all or any portion of the principal
amount of the Bridge Loan at any time prior to the Maturity Date. All
prepayments shall be credited first to accrued and unpaid interest on the Note
and second to the principal amount of the Note.
2.2. INTEREST ON LOAN. Borrower shall pay interest on the unpaid
principal amount of
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the Bridge Loan, as accrued from and including the Effective Date until the
principal amount shall be paid in full, at the Applicable Rate; provided,
however, that on and after an Event of Default, the Bridge Loan shall bear
interest, payable on demand, equal to the Highest Lawful Rate. Interest
shall be paid in arrears on the last business day of each month commencing
with the month in which the Effective Date occurs, until the principal
balance of, and all accrued and unpaid interest on, the Bridge Loan has been
paid in full. All computations of interest shall be made by Lender on the
basis of a year of 365 days.
2.3. PLACE OF PAYMENT; TAXES. Any and all payments by Borrower in
respect of the Bridge Loan shall be made in U.S. dollars at the office of Lender
set forth herein (or as otherwise advised in writing by Lender), free and clear
of and without deduction for any and all present or future levies, deductions,
stamp or documentary taxes or similar charges or withholdings.
2.4. USURY LAWS. It is the intention of the parties to comply with all
applicable laws. Accordingly, it is agreed that, notwithstanding any provisions
to the contrary in the Bridge Loan Papers, interest on the debt evidenced by the
Note shall not exceed the maximum amount of nonusurious interest that may be
contracted for, taken, reserved, charged or received under law; any interest in
excess of that maximum amount shall be credited on the principal of the debt or,
if that has been paid, refunded. It is further agreed that, without limitation
of the foregoing, all calculations of the rate of interest contracted for,
charged, or received under the Bridge Loan Papers which are made for the purpose
of determining whether such rate exceeds the maximum lawful rate of interest
shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating, and spreading in equal parts during the period of the
full term of the indebtedness evidenced thereby all interest at any time
contracted for, charged, or received from Borrower or otherwise by the holder or
holders hereof in connection with such indebtedness.
2.5. SECURITY FOR BRIDGE LOAN. Borrower's Obligations shall be secured
by a Lien upon all of the Collateral, which at all times shall be superior and
prior to all other Liens.
2.6. BRIDGE LOAN PAPERS AND RELATED DOCUMENTS.
(a) Borrower has herewith delivered to the Lender the following
documents:
(i) the Note, duly executed by Borrower;
(ii) a copy of the resolutions of the board of directors of the
general partner of Borrower approving the Bridge Loan Papers, certified
by the Secretary of the general partner of Borrower;
(iii) the Partnership Pledge Agreement, duly executed by the
partners of the Borrower;
(iv) the Security Agreement and accompanying financing statement
on Form UCC-1, duly executed by Borrower; and
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(v) the opinion of legal counsel to Borrower, in the form of
Exhibit H hereto;
all of which the Lender hereby accepts for all purposes hereof.
(b) On the Effective Date, Borrower will, or will cause DRI, to
furnish to the Lender the following:
(i) the Guaranty, duly executed by DRI;
(ii) the Stock Pledge Agreement (and accompanying stock
certificates of DRI and related stock powers), duly executed by the
Borrower;
(iii) the Guarantor Security Agreement and accompanying financing
statement on Form UCC-1, duly executed by DRI; and
(iv) the Collateral Assignment Agreement, duly executed by DRI.
3. BRIDGE LOAN COMMITMENT.
(a) For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Heftel hereby irrevocably commits to Borrower
to cause Lender to make, and to ensure that Lender has the funds to make, the
Bridge Loan to Borrower, subject only to the following conditions:
(i) Borrower shall have provided the Borrowing Notice at least
four business days prior to the Effective Date;
(ii) (A) Borrower shall have furnished to Lender the items set
forth in Section 2.6(a); and (B) Borrower or DRI (as applicable) shall
have furnished to Lender the items set forth in Section 2.6(b)
contemporaneously with the funding of the Bridge Loan on the Effective
Date;
(iii) the Effective Date shall not be prior to July 1, 1999; and
(iv) Except with the prior written consent of Lender (which
consent shall not be unreasonably withheld or delayed), Borrower shall
not have knowingly amended any provision of the Stock Purchase Agreement,
knowingly consented to any default by the sellers thereunder or knowingly
waived any condition to the closing of the DRI Acquisition, if the direct
consequence of such amendment, consent or waiver by Borrower would
reasonably be expected to materially and adversely impact the value of
the Station's Governmental Licenses or main transmitter site lease, or
(assuming Lender shall have entered into an agreement with respect
thereto) the ability of Lender to consummate the Asset Purchase.
Recognizing that Borrower is obligated to complete the DRI Acquisition as of
9:00 a.m., Dallas, Texas time, on the Effective Date, Lender agrees that the
Bridge Loan will consist of
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immediately available funds on the Effective Date and that it will instruct
its banks to wire such funds (pursuant to Borrower's written wire transfer
instructions) as promptly as practicable after the opening of business on the
Effective Date.
(b) The Borrower may elect at any time prior to the Effective Date to
terminate the Lender's obligation to make the Bridge Loan by so notifying the
Lender in writing; provided, however, that Borrower shall repay to Lender any
Breakage Costs as a result of any such termination made after the Borrowing
Notice has been issued (it being understood that Lender will use commercially
reasonable efforts to minimize such Breakage Costs). In the event of such
termination, the Lender shall, as promptly as practicable after the Commitment
Termination Date and repayment of such Breakage Costs, (i) return to Borrower
the items referred to in Section 2.6(a)(i) and (v) and (ii) release all
collateral covered by the documents referred to in Section 2.6(a)(iii) and (iv),
including any signed UCC-3 Termination Statement necessary to terminate any
financing statements filed of record.
(c) Heftel acknowledges that, due to its commitment to cause Lender to
make, and the Lender's commitment to make, the Bridge Loan, Borrower has relied
upon such commitment and foregone other financing arrangements to meet its
obligations under the Stock Purchase Agreement. Without limiting the provisions
of Section 3(a) hereof, the obligations of Heftel and Lender hereunder are not
subject in any manner to the failure, delay or termination of the proposed Asset
Purchase.
(d) Subject to Section 3(a) hereof, the agreements of Heftel and
Lender made herein shall continue in full force and effect for any closing of
the DRI Acquisition which occurs pursuant to the Stock Purchase Agreement, even
if later than July 15, 1999.
(e) In the event that the Effective Date is delayed (except as a
result of any default of Lender or Heftel hereunder) to a date more than four
days after the date of the Borrowing Notice, Borrower will repay to Lender any
Breakage Costs incurred by Lender as a result of such delay (it being understood
that Lender will use commercially reasonable efforts to minimize such Breakage
Costs).
4. REPRESENTATIONS AND WARRANTIES. To induce Heftel and Lender to
enter into this Agreement, Borrower represents and warrants to Heftel and Lender
as follows:
4.1. ORGANIZATION AND GOOD STANDING OF BORROWER. Borrower is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite partnership power and authority
to own and lease its properties and carry on its business as currently
conducted. Borrower has delivered to Lender true, complete and correct copies
of its agreement of limited partnership agreement, as in effect on the date
hereof.
4.2. SUBSIDIARIES. Borrower does not have any subsidiaries or equity
interests in other entities; provided, however, that (i) each of DRI and
GoGlobal will become a wholly-owned subsidiary of the Borrower on the Effective
Date and (ii) Borrower may cause the Holding Company to be incorporated and
organized as a wholly-owned subsidiary of Borrower.
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4.3. POWER AND AUTHORITY. Borrower has the power and authority and all
licenses and permits required by governmental authorities to own, lease and
operate its properties and assets, to carry on its business as currently being
conducted, and to execute, deliver and perform the Bridge Loan Papers to which
it is a party.
4.4. BINDING EFFECT. Each of the Bridge Loan Papers to which Borrower
is a party has been duly authorized, executed and delivered by Borrower and each
is the legal, valid and binding obligation of Borrower enforceable in accordance
with its terms except that (i) enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting creditors' rights and (ii) the
availability of equitable remedies may be limited by equitable principles of
general applicability.
4.5. CONSENTS; COMPLIANCE WITH OTHER INSTRUMENTS. Borrower has
obtained all consents, approvals and authorizations from, and has made all
filings with, each governmental instrumentality or other agency required as a
condition to the execution, delivery and performance of the Bridge Loan Papers
(except for the consents of the FCC which may be required for Lender to exercise
certain remedies after an event of default, as elsewhere described in the Bridge
Loan Papers). Neither the execution and delivery of the Bridge Loan Papers by
Borrower nor the consummation by it of the transactions contemplated thereby
will violate, breach, be in conflict with, or constitute a default under, or
permit the termination or the acceleration of maturity of, or result in the
imposition of any Lien upon any property or asset of Borrower pursuant to
(i) Borrower's agreement of limited partnership or (ii) any note, bond,
indenture, mortgage, deed of trust, evidence of indebtedness, loan or lease
agreement, other agreement or instrument, judgment, order, injunction or decree
by which Borrower is bound, to which it is a party or to which its assets are
subject.
4.6. CAPITALIZATION. The authorized partnership interests of Borrower
and the record and beneficial owners thereof is as set forth on the Partnership
Pledge Agreement. All of the issued and outstanding partnership interests of
Borrower have been duly authorized and validly issued and are fully paid and, as
to the limited partner interests, nonassessable, and were issued without
violation of any federal or state securities laws. Except as set forth on
Schedule 4.6 hereto, there are no voting trusts, shareholder agreements or other
voting arrangements by the shareholders of Borrower other than as described in
the Partnership Pledge Agreement. Except as described in the agreements
described on Schedule 4.6, there is no outstanding subscription, contract,
convertible or exchangeable security, option, warrant, call, or other right
(whether absolute or contingent) obligating Borrower to issue, sell, exchange,
or otherwise dispose of, or to purchase, redeem, or otherwise acquire equity
interests in the Borrower or securities convertible into or exchangeable for,
equity interests in the Borrower.
4.8. LITIGATION AND GOVERNMENT CLAIMS. There is no pending suit,
action or litigation, or administrative, arbitration or other proceeding or, to
Borrower's knowledge, any governmental investigation or inquiry, to which
Borrower is a party or to which its assets are subject which would reasonably be
expected to have a material adverse effect on the business, results of
operations, assets or the condition, financial or otherwise, of Borrower. To
the knowledge of Borrower, there are no such proceedings threatened,
contemplated, or any basis for any unasserted claims (whether or not the
potential claimant may be aware of the claim) which would reasonably be expected
to have a material adverse effect on the business, results
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of operations, assets or the condition, financial or otherwise, of Borrower.
5. COVENANTS. Until the Note has been paid in full, Borrower
covenants and agrees that it will, and (on and after the Effective Date) will
cause DRI to:
5.1. FINANCIAL STATEMENTS AND OTHER INFORMATION. Deliver to Lender the
following:
(i) within 30 days after the close of each month (commencing
with the month that includes the Effective Date) a copy of the balance
sheet and statement of operations of the Borrower and DRI as of the end
of such month and for the month then ended;
(ii) prompt notice of any citation, summons or other order
naming Borrower or DRI a party to any proceeding before any governmental
body which might reasonably be expected to have a material adverse effect
on Borrower or DRI; and
(iii) prompt notice of any lapse or other termination of any
Governmental License or any refusal by a governmental body to renew or
extend any Governmental License or any dispute between Borrower or DRI
and such governmental body.
5.2. INSPECTION. Permit Lender to visit and inspect its properties, to
examine its books of account and records and to discuss its affairs, finances
and accounts with its officers, all at such reasonable times during business
hours as may be requested by Lender.
5.3. MAINTENANCE OF LICENSES AND PROPERTIES. Maintain and preserve all
of the Governmental Licenses and its material properties which are used or
necessary in the conduct of its business; timely file all material reports,
applications, documents, instruments and information required to be filed
pursuant to all governmental authorities having jurisdiction over the operation
of its business; and continue to cause the Station to be operated in the
ordinary course of business, including maintaining the current "Contemporary
Christian" programming format.
5.4. USE OF PROCEEDS. Use the proceeds of the Bridge Loan to fund the
transactions contemplated by the Stock Purchase Agreement and, to the extent the
proceeds are not needed to consummate such transactions, to use the remaining
loan proceeds for any proper purpose, including the funding of working capital
advances to SDLP.
5.5. MAINTENANCE OF PRIORITY OF LENDER'S LIENS. Perform such acts and
duly authorize, execute, deliver, file and record such additional documents and
instruments as Lender may deem reasonably necessary or appropriate to perfect
and maintain the Liens in favor of Lender contemplated by the other Bridge Loan
Papers.
5.6. DISTRIBUTIONS. Not make or pay any Distribution.
5.7. LIENS. Not create, incur or suffer or permit to be created or
incurred or to exist any lien or encumbrance upon any of its assets except
Permitted Liens.
5.8. LOANS, ADVANCES AND INVESTMENTS. Not (i) loan, advance or
otherwise extend credit to, or contribute capital to invest in, GoGlobal or any
other Person or (ii) purchase or
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commit to purchase any stock, other securities or any other interests in any
other Person other than DRI, GoGlobal and Permitted Investments; provided,
however, that Borrower may organize the Holding Company to the extent that
(i) Borrower pledges all of the outstanding capital stock thereof to Lender
pursuant to an agreement in form comparable to the Stock Pledge Agreement and
(ii) Holding Company executes a guaranty of the Obligations in form
comparable to the Guaranty.
5.9. ACQUISITIONS, MERGERS AND DISSOLUTIONS. Not (i) acquire any
business other than DRI and GoGlobal, (ii) merge or consolidate with any Person
or (iii) liquidate, wind up or dissolve itself, or enter into any agreements to
do the foregoing.
5.10. TRANSACTIONS WITH AFFILIATES. Not (i) enter into any transactions
with Affiliates unless such transaction is on terms no less favorable than those
otherwise attainable on an arms' length basis from any Person which is not an
Affiliate or (ii) pay any management, consulting or similar fees to Affiliates.
5.11. SALES OF ASSETS. Not sell, lease, transfer or otherwise dispose
of any material assets of Borrower except in the ordinary course of business;
provided, however, that in no event shall the Borrower allow DRI to sell, lease,
transfer or otherwise dispose of any Governmental Licenses or material
intellectual property assets.
5.12. MODIFICATION OF GOVERNING DOCUMENTS. Without Lender's consent
(which will not be unreasonably withheld or delayed), not to modify, repeal or
amend any provision of the partnership agreement of Borrower or articles of
incorporation or bylaws of DRI.
5.13. INDEBTEDNESS. Not create or suffer to exist any Indebtedness
other than the Obligations.
5.14. CAPITAL STOCK OF DRI. Not issue, or commit to issue, any equity
securities of DRI or securities exercisable for or convertible into such equity
securities.
Notwithstanding the foregoing, it is understood and agreed by Lender that
Borrower may enter into the STLP Acquisition and take all necessary, advisable
and appropriate actions towards the consummation thereof (provided, however,
that the Obligations shall be repaid in full contemporaneously with the
consummation of the STLP Acquisition).
6. EVENTS OF DEFAULT. Should any of the following events (each of
which is herein called an "Event of Default") occur and be continuing, Borrower
shall be in default hereunder:
(a) If the repayment of principal or accrued interest is not made on
the due date and such default is not cured within 10 days' written notice;
(b) If Borrower or DRI shall fail to perform any of its obligations
and covenants in any of the Bridge Loan Papers and such default is not cured
after 30 days' written notice (provided, however, that such period shall be
extended to the extent and so long as the Borrower is proceeding in good faith
to cure such default and such default has not materially and adversely impacted
the value of the Collateral or Lender's rights with respect thereto);
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(c) If the on-air broadcasting operations of the Station shall cease
completely at any time for more than 72 hours during any period of three
consecutive days;
(d) If DRI has become subject to the revocation, suspension or adverse
modification of its main FM commercial broadcasting license, or a hearing for
such purpose has been scheduled or conducted;
(e) If Borrower or DRI (X) (i) makes a general assignment for the
benefit of creditors; (ii) files a voluntary bankruptcy petition; (iii) becomes
the subject of an order for relief or is declared insolvent in any federal or
state bankruptcy or insolvency proceedings; (iv) files a petition or answer
seeking for Borrower or DRI a reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any law; (v)
files an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against it in a proceeding of the type described
in subclauses (i) through (iv) of this clause (X); or (vi) seeks, consents to,
or acquiesces in the appointment of a trustee, receiver, or liquidator of
Borrower's or DRI's or of all or any substantial part of the properties of
either; or (Y) has filed against it a proceeding seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any law and 120 days have expired without dismissal thereof or with
respect to which, without the consent or acquiescence or Borrower or DRI (as
applicable), a trustee, receiver, or liquidator of the Borrower or DRI or of all
or any substantial part of the properties of Borrower or DRI (as applicable) has
been appointed and 90 days have expired without the appointment's having been
vacated or stayed, or 90 days have expired after the date of expiration of a
stay, if the appointment has not previously been vacated; or
(f) If there shall exist a final judgment or award against Borrower or
DRI which shall have been outstanding for a period of 60 days or more from the
date of entry thereof and shall not have been discharged in full or stayed
pending appeal, if the aggregate amount of all such judgments and awards exceeds
$1.0 million.
7. ACCELERATION OF INDEBTEDNESS. Upon the occurrence, and during the
continuance, of an Event of Default which is not waived by Lender, the entire
principal balance of the Bridge Loan, and all accrued and unpaid interest
thereon, shall be due and payable in full. Upon and after, and during the
continuance of, an Event of Default, Borrower shall pay to Lender on demand any
expenses or other costs, including reasonable attorneys' fees and expenses
incurred by Lender in connection with the enforcement or collection against the
Borrower or DRI of any provision of the Bridge Loan Papers, and in connection
with or arising out of any litigation, investigation or proceeding instituted by
any person with respect to any of the Bridge Loan Papers, whether or not suit is
instituted, including but not limited to such costs or expenses arising from the
enforcement or collection against Borrower or DRI of any provision of the Bridge
Loan Papers in a workout or restructuring or in any state or federal bankruptcy
or reorganization proceeding.
8. MISCELLANEOUS.
(a) The headings, captions and arrangements used in the Bridge Loan
Papers, unless specified otherwise, for convenience only and shall not be deemed
to limit, amplify or modify the terms of the Bridge Loan Papers, nor affect the
meaning thereof.
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(b) Any notice, consent, demand, request, approval or other
communication to be given hereunder by any party to another shall be deemed to
have been duly given if given in writing and personally delivered or sent by
overnight delivery service, facsimile transmission or United States mail,
registered or certified, postage prepaid, with return receipt requested, to the
address set forth under the parties' signature hereto. Notice so given shall,
in the case of notice so given by mail, be deemed to be given and received on
the fourth calendar day after posting, in the case of notice so given by
overnight delivery service or personal delivery, on the date of actual delivery
and, in the case of notice so given by facsimile transmission on the date of
actual transmission.
(c) The Bridge Loan Papers are intended to be performed in the State
of Texas, and the laws (other than conflict-of-laws provisions thereof) of such
State and of the United States of America shall govern the rights and duties of
the parties thereto and the validity, construction, enforcement and
interpretation of this Agreement, except to the extent otherwise specified
therein.
(d) If any provision in the Bridge Loan Papers is held to be illegal,
invalid or unenforceable, such provision shall be fully severable; the
applicable Bridge Loan Paper shall be construed and enforced as if such
provision had never comprised a part thereof; and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by such
provision or by its severance therefrom.
(e) THE BRIDGE LOAN PAPERS REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES OR ANY TERM SHEETS BETWEEN BORROWER
AND LENDER (ALL THE TERMS AND CONDITIONS OF WHICH ARE SUPERSEDED BY THE BRIDGE
LOAN PAPERS). THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
(f) Except as otherwise specifically provided, the Bridge Loan Papers
may only be amended by an instrument in writing executed jointly by Borrower,
Heftel and Lender and supplemented only by documents delivered or to be
delivered in accordance with the express terms thereof.
(g) This Agreement may be executed in a number of identical
counterparts, each of which shall be deemed an original for all purposes and all
of which constitute, collectively, one agreement.
(h) Heftel and Lender hereby represent and warrant to Borrower that
the execution, delivery and performance of the Bridge Loan Papers have been duly
authorized by all necessary corporate action and approvals, and the individual
signing this Agreement and the individuals who execute the Bridge Loan Papers on
behalf of Heftel or Lender, as the case may be, are duly authorized to execute
and deliver such Bridge Loan Papers on behalf of Heftel or Lender, as the case
may be.
(i) Notwithstanding any terms, provisions, conditions, covenants and
agreements
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contained in any or all of the Bridge Loan Papers to the contrary, Heftel and
Lender hereby consent to and agree that Borrower may engage in any or all of
the following described transactions without any of same, individually or in
the aggregate, constituting a default by Borrower under any of the Bridge
Loan Papers, and to the extent any of same constitute a default by Borrower
under any of the Bridge Loan Papers, such default is hereby waived:
(1) Borrower may acquire up to 100% of the issued and
outstanding stock of GoGlobal.
(2) Borrower shall be deemed to have advanced working capital
to DRI upon the consummation of the DRI Acquisition (as a result of the
working capital payment made by Borrower under the Stock Purchase
Agreement). DRI may pay to Borrower the cash collected from its accounts
receivable. Also, DRI may at any time transfer to Borrower its then
remaining uncollected accounts receivable.
(3) DRI may enter into the Time Brokerage Agreement with SDLP
upon such terms and conditions as DRI and SDLP shall deem necessary,
advisable or appropriate, provided that the Time Brokerage Agreement may
not become effective earlier than two days prior to the payment in full
of the Obligations. The Time Brokerage Agreement may include provisions
pursuant to which (i) DRI will time broker all of the Station's
commercial air time to SDLP, (ii) DRI will allow SDLP to use the
programming and other intellectual property of DRI in connection with
presenting its programming on the Station and (iii) SDLP will fulfill
DRI's obligations under Station operating agreements and agreements for
the broadcast of commercial air time.
(4) Borrower or DRI may reimburse SDLP for the employee costs
associated with any employees of the Station that are carried on SDLP's
payroll.
[signatures on following page]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
Sunburst Texas LP
By Sunburst Texas, Inc. (general partner)
By: /s/ Xxx X. Xxxxxx
-------------------------------
Xxx X. Xxxxxx
Vice President
Address: 1350 One Galleria Tower
00000 Xxxx Xxxx
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Heftel Broadcasting Corporation
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
Address: 0000 Xxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
Heftel Broadcasting Texas, L.P.
By Xxxxxx XX Texas, Inc. (general partner)
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Xxxxxxx X. Xxxxxx
Senior Vice President
Address: 0000 Xxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Fax: (000) 000-0000
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