UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (
Date of earliest event reported
): January 4, 2007
SPANISH BROADCASTING SYSTEM, INC.
(
Exact name of registrant as specified in its charter
)
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Delaware
(State or other jurisdiction
of incorporation)
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000-27823
(Commission
File Number)
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13-3827791
(IRS Employer Identification No.)
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2601 South Bayshore Drive, PH II, Coconut Grove, Florida
(Address of principal executive offices)
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33133
(Zip Code)
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(305) 441-6901
(Registrants telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (
see
General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive Agreement.
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Description of Loan, Promissory Note and Mortgage Agreements
In connection with the acquisition of the Property described in Item 2.01 below, on January 4,
2007, SBS Miami Broadcast Center, Inc. (SBS Miami Broadcast Center), a wholly owned subsidiary of
Spanish Broadcasting System, Inc. (the Company), entered into a loan agreement (the Loan
Agreement), a ten-year promissory note in the original principal amount of $7,650,000 (the
Note), and a Mortgage, Assignment of Rents and Security Agreement (the Mortgage) in favor of
Wachovia Bank, National Association (Wachovia). The Note bears an interest rate equal to
one-month LIBOR plus 125 basis points and requires monthly principal payments of $25,500 with any
unpaid balance due on its maturity date of January 4, 2017. The Note is secured by the Property and
any related collateral.
The terms of the loan include certain restrictions and covenants for SBS Miami Broadcast
Center, which limit, among other things, the incurrence of additional indebtedness and liens. The
Loan specifies a number of events of default (some of which are subject to applicable cure
periods), including, among others, the failure to make payments when due, noncompliance with
covenants and defaults under other agreements or instruments of indebtedness. Upon the occurrence
of an event of default and expiration of any applicable cure periods, Wachovia may accelerate the
loan and declare all amounts outstanding to be immediately due and payable.
Interest Rate Swap Agreement
On January 4, 2007, SBS Miami Broadcast Center entered into an interest rate swap arrangement
(the Swap Agreement) for the original notional principal amount of $7,650,000 whereby it will pay
a fixed interest rate of 6.31% as compared to interest at a floating rate equal to one-month LIBOR
plus 125 basis points on the Note. The interest rate swap amortization schedule is identical to
the Note amortization schedule, which has an effective date of January 4, 2007, monthly notional
reductions and an expiration date of January 4, 2017.
Unconditional Guaranty
On January 4, 2007, the Company agreed to unconditionally guaranty all obligations of SBS
Miami Broadcast Center pursuant to the Promissory Note, the Loan Agreement, the Mortgage, the loan documents thereto, and the Swap Agreement, for the benefit of Wachovia and its affiliates (the
Guaranty). In addition, the terms of the Guaranty contain certain financial covenants, which
require the Company to maintain available liquidity of not less than 1.2 times the then outstanding
principal balance of the loan made to SBS Miami Broadcast Center by Wachovia.
The foregoing description of the loan documentation does not purport to be complete and is
qualified in its entirety by reference to the complete text of the Loan Agreement, the related
Note, the Mortgage and the Guaranty, which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to this
report, respectively, and incorporated herein by reference.
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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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Completion of Purchase and Sale Agreement
On January 4, 2007, the Company, through its wholly owned subsidiary, SBS Miami Broadcast
Center, completed the acquisition of that certain real property located in Miami-Dade County, Florida pursuant to the Purchase and Sale Agreement, dated August 24, 2006, as
amended on September 25, 2006, as further amended on October 25, 2006 (the Purchase Agreement). The real property consists of 5.47 acres (234,208
square feet) and approximately 62,000 square feet of office space (the Property). The Property
was acquired from 7007 Palmetto Investments, LLC (Seller), an unrelated third party, for a total
purchase price of approximately $8,882,500, excluding closing costs and brokers fees. The Company
expects to incur significant construction costs for the new broadcasting facility. The Company
funded the purchase price using cash on hand and borrowings as described in Item 1.01 above.
Upon the completion of construction at the building, the Company will consolidate its Miami
radio and television operations at the new broadcasting facility. The Company is currently in
negotiations for the release of the leased space currently occupied by the television operations
located at 2601 South Bayshore Drive, Coconut Grove, Florida, where we rent executive offices
indirectly owned by Raúl Alarcón, Jr. and for the release of the leased studios and offices of our
Miami radio stations currently located in leased facilities, which are indirectly owned by Raúl
Alarcón, Jr. and Pablo Raúl Alarcón, Sr.
Termination of Lease Agreement
On January 4, 2007, SBS Miami Broadcast Center terminated the triple net lease agreement (the
Lease Termination) with Seller for the office space of approximately 62,000 square feet at a base
rent of $5,166 per month, plus applicable taxes and insurance. A copy of the Lease Termination is
attached hereto as Exhibit 10.5.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
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The information provided in Item 1.01 above is incorporated herein by reference.
Safe Harbor Statement; Forward Looking Statements.
This report contains forward-looking statements that involve significant risks and
uncertainties, including those discussed in this report and others that can be found in the Risk
Factors section of our Annual Report on Form 10-K for the year ended December 31, 2005 and our
periodic reports on Form 10-Q and Form 8-K. We are providing this information as of the date of
this report and do not undertake any obligation to update any forward-looking statements contained
in this document as a result of new information, future events or otherwise.
We caution investors not to place undue reliance on the forward-looking statements contained
in this report. No forward-looking statement can be guaranteed and actual events and results may
differ materially from those projected.
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Item 9.01
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Financial Statements and Exhibits.
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(c) Exhibits.
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10.1
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Loan Agreement dated January 4, 2007, by and between Wachovia Bank, National Association
(Wachovia) and SBS Miami Broadcast Center, Inc. (SBS Miami Broadcast Center).
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10.2
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Promissory Note, dated January 4, 2007, by SBS Miami Broadcast Center in favor of Wachovia.
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10.3
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Mortgage, Assignment of Rents and Security Agreement dated January 4, 2007, by and between
Wachovia and SBS Miami Broadcast Center.
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10.4
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Unconditional Guaranty dated January 4, 2007, by Spanish Broadcasting System,
Inc. in favor of Wachovia.
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10.5
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Termination of Lease dated January 4, 2007, by and between the Seller and SBS Miami
Broadcast Center.
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4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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SPANISH BROADCASTING SYSTEM, INC.
(Registrant)
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January 10, 2007
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By:
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/s/ Joseph A. García
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Joseph A. García
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Chief Financial Officer, Executive
Vice President and Secretary
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Exhibit Index
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Exhibit No.
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Description
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10.1
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Loan Agreement dated January 4, 2007, by and between Wachovia Bank, National Association
(Wachovia) and SBS Miami Broadcast Center, Inc. (SBS Miami Broadcast Center).
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10.2
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Promissory Note, dated January 4, 2007, by SBS Miami Broadcast Center in favor of Wachovia.
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10.3
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Mortgage, Assignment of Rents and Security Agreement dated January 4, 2007, by and between
Wachovia and SBS Miami Broadcast Center.
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10.4
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Unconditional Guaranty dated January 4, 2007, by Spanish Broadcasting System,
Inc. in favor of Wachovia.
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10.5
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Termination of Lease dated January 4, 2007, by and between the Seller and SBS Miami
Broadcast Center.
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6
Exhibit
10.1
LOAN AGREEMENT
Wachovia Bank, National Association
225 Water Street
Jacksonville, Florida 32202
(Hereinafter referred to as the Bank)
SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation
2601 S. Bayshore Drive
PH II
Coconut Grove, Florida 33133
(Hereinafter referred to as Borrower)
This Loan Agreement (Agreement) is entered into January 4, 2007, by and between Bank and
Borrower.
This Agreement applies to the loan (individually and collectively, the Loan) evidenced by that
certain Promissory Note dated of even date herewith made by Borrower to the Bank in the original
principal amount of $7,650,000.00 (as the same may be amended, modified, extended or increased from
time to time, the Note) and all Loan Documents. The terms Loan Documents and Obligations, as
used in this Agreement, are defined in the Note.
Relying upon the covenants, agreements, representations and warranties contained in this Agreement,
Bank is willing to extend credit to Borrower upon the terms and subject to the conditions set forth
herein, and Bank and Borrower agree as follows:
REPRESENTATIONS.
Borrower represents that from the date of this Agreement and until final payment
in full of the Obligations:
Accurate Information.
All information now and hereafter furnished to
Bank is and will be true, correct and complete in all material respects. Any such information
relating to Borrowers financial condition will accurately reflect Borrowers financial condition
as of the date(s) thereof, (including all contingent liabilities of every type), and Borrower
further represents that its financial condition has not changed materially or adversely since the
date(s) of such documents.
Authorization; Non-Contravention.
The execution, delivery and
performance by Borrower and any guarantor, as applicable, of this Agreement and other Loan
Documents to which it is a party are within its power, have been duly authorized as may be required
and, if necessary, by making appropriate filings with any governmental agency or unit and are the
legal, binding, valid and enforceable obligations of Borrower and any guarantors; and do not (i)
contravene, or constitute (with or without the giving of notice or lapse of time or both) a
violation of any provision of applicable law, a violation of the organizational documents of
Borrower or any guarantor, or a default under any agreement, judgment, injunction, order, decree or
other instrument binding upon or affecting Borrower or any guarantor, (ii) result in the creation
or imposition of any lien (other than the lien(s) created by the Loan Documents) on any of
Borrowers or any guarantors assets, or (iii) give cause for the acceleration of any obligations
of Borrower or any guarantor to any other creditor.
Asset Ownership.
Borrower has good and
marketable title to all of the properties and assets reflected on the balance sheets and financial
statements supplied Bank by Borrower, and all such properties and assets are free and clear of
mortgages, security deeds, pledges, liens, charges, and all other encumbrances, except as otherwise
disclosed to Bank by Borrower in writing and approved by Bank, including without limitation, those
liens arising under that certain First Lien Credit Agreement (as the same may be amended, modified,
extended or replaced from time to time, the Senior Credit Facility) among Guarantor, as borrower,
MERRILL LYNCH, PIERCE FENNER & SMITH, INCORPORATED, as syndication agent, Bank, as documentation
agent, LEHMAN COMMERCIAL PAPER INC., as administrative agent and other lenders, as lenders, dated
as of June 10, 2005 (as same may be amended or modified from time to time), which liens include,
without limitation, the pledge of all of the stock of Borrower and the lien against Borrowers
personal property (Permitted Liens). To Borrowers knowledge, no default has occurred under any
Permitted Liens and no claims or interests adverse to
Borrowers present rights in its properties and assets have arisen.
Discharge of Liens and Taxes.
Borrower has duly filed, paid and/or discharged all taxes or other claims that may become a lien on
any of its property or assets, except to the extent that such items are being appropriately
contested in good faith and an adequate reserve for the payment thereof is being maintained.
Sufficiency of Capital.
Borrower is not, and after consummation of this Agreement and after giving
effect to all indebtedness incurred and liens created by Borrower in connection with the Note and
any other Loan Documents, will not be, insolvent within the meaning of 11 U.S.C. § 101, as in
effect from time to time.
Compliance with Laws.
Borrower and any subsidiary of Borrower and any
guarantor are in compliance in all material respects with all federal, state and local laws, rules
and regulations applicable to its properties, operations, business, and finances, including,
without limitation, any federal or state laws relating to liquor (including 18 U.S.C. § 3617, et
seq.) or narcotics (including 21 U.S.C. § 801, et seq.) and/or any commercial crimes; all
applicable federal, state and local laws and regulations intended to protect the environment; and
the Employee Retirement Income Security Act of 1974, as amended (ERISA), if applicable. None of
Borrower, or any subsidiary or affiliate of Borrower or any guarantor is a Sanctioned Person or has
any of its assets in a Sanctioned Country or does business in or with, or derives any of its
operating income from investments in or transactions with, Sanctioned Persons or Sanctioned
Countries in violation of economic sanctions administered by OFAC. The proceeds from the Loan will
not be used to fund any operations in, finance any investments or activities in, or make any
payments to, a Sanctioned Person or a Sanctioned Country. OFAC means the U.S. Department of the
Treasurys Office of Foreign Assets Control. Sanctioned Country means a country subject to a
sanctions program identified on the list maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/sanctions/, or as otherwise published from time to
time. Sanctioned Person means (i) a person named on the list of Specially Designated Nationals
or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/enforcement/ofac/sdn/, or as otherwise published from time to time, or
(ii) (A) an agency of the government of a Sanctioned Country, (B) an organization controlled by a
Sanctioned Country, or (C) a person resident in a Sanctioned Country to the extent subject to a
sanctions program administered by OFAC.
Organization and Authority.
Borrower is duly created,
validly existing and in good standing under the laws of the state of its organization, and has all
powers, governmental licenses, authorizations, consents and approvals required to operate its
business as now conducted. Borrower is duly qualified, licensed and in good standing in each
jurisdiction where qualification or licensing is required by the nature of its business or the
character and location of its property, business or customers, and in which the failure to so
qualify or be licensed, as the case may be, in the aggregate, could have a material adverse effect
on the business, financial position, results of operations, properties or prospects of Borrower or
any such guarantor.
No Litigation.
There are no pending suits, claims or demands against Borrower
or any guarantor, which could materially affect any guarantors ability to fully repay the Loan,
that have not been disclosed to Bank by Borrower in writing, and approved by Bank. To the best of
Borrowers knowledge, there are no threatened suits, claims or demands, which could materially
affect the Borrowers or any guarantors ability to fully repay the Loan, against Borrower or any
guarantor that have not been disclosed to Bank by Borrower in writing, and approved by Bank.
ERISA.
Each employee pension benefit plan, as defined in ERISA, maintained by Borrower meets, as
of the date hereof, the minimum funding standards of ERISA and all applicable regulations thereto
and requirements thereof, and of the Internal Revenue Code of 1986, as amended. No Prohibited
Transaction or Reportable Event (as both terms are defined by ERISA) has occurred with respect
to any such plan.
Indemnity.
Borrower will indemnify Bank and its affiliates from and against any
losses, liabilities, claims, damages, penalties or fines imposed upon, asserted or assessed against
or incurred by Bank arising out of the inaccuracy or breach of any of the representations contained
in this Agreement or any other Loan Documents.
AFFIRMATIVE COVENANTS.
Borrower agrees that from the date hereof and until final payment in full
of the Obligations, unless Bank shall otherwise consent in writing, Borrower will:
Access to Books
and Records.
Allow Bank, or its agents, during normal business hours, upon reasonable notice by
Bank, access to the books, records and such other documents of Borrower as Bank shall reasonably
require, and allow Bank, at Borrowers expense, to inspect, audit and examine the same and to make
extracts therefrom and to make copies thereof.
Business Continuity.
Conduct its business in
substantially the same manner and locations as such business is now and has previously been
conducted.
Certificate of Full Compliance From Chief Financial Officer.
Deliver to Bank, with the
financial statements required
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herein, a certification by Borrowers chief financial officer that Borrower is in full compliance
with the Loan Documents. For purposes hereof, copies of the certificates required to be delivered
on behalf of Borrower by Guarantor pursuant to Section 6.2 of the Senior Credit Facility shall be
deemed acceptable to Bank.
Compliance with Other Agreements.
Comply with all terms and conditions
contained in this Agreement, and any other Loan Documents, and swap agreements, if applicable, as
defined in 11 U.S.C. § 101, as in effect from time to time.
Estoppel Certificate.
Furnish, within
thirty (30) days after request by Bank, a written statement duly acknowledged of the amount due
under the Loan and whether offsets or defenses exist against the Obligations.
Insurance
. Maintain
adequate insurance coverage with respect to its properties and business against loss or damage of
the kinds and in the amounts customarily insured against by companies of established reputation
engaged in the same or similar businesses including, without limitation, commercial general
liability insurance, workers compensation insurance, and business interruption insurance; all
acquired in such amounts and from such companies as Bank may reasonably require. For the purposes
of this Section, the insurance requirements set forth in that certain Mortgage, Assignment of Rents
and Security Agreement dated of even date herewith from Borrower in favor of Bank (as the same may
be amended or modified from time to time, the Mortgage), are deemed adequate.
Maintain
Properties.
Maintain, preserve and keep its property in good repair, working order and condition,
making all replacements, additions and improvements thereto necessary for the proper conduct of its
business, unless prohibited by the Loan Documents.
Notice of Default and Other Notices.
(a)
Notice of Default.
Furnish to Bank immediately upon becoming aware of the existence of any
condition or event which constitutes a Default (as defined in the Loan Documents) or any event
which, upon the giving of notice or lapse of time or both, may become a Default, written notice
specifying the nature and period of existence thereof and the action which Borrower is taking or
proposes to take with respect thereto. (b)
Other Notices.
Promptly notify Bank in writing of (i)
any material adverse change in its financial condition or its business; (ii) any default under any
material agreement, contract or other instrument to which it is a party or by which any of its
properties are bound, or any acceleration of the maturity of any indebtedness owing by Borrower;
(iii) any material adverse claim against or affecting Borrower or any part of its properties; (iv)
the commencement of, and any material determination in, any litigation with any third party or any
proceeding before any governmental agency or unit affecting Borrower; and (v) at least 30 days
prior thereto, any change in Borrowers name or address as shown above, and/or any change in
Borrowers structure.
Other Financial Information.
Deliver promptly such other information
regarding the operation, business affairs, and financial condition of Borrower which Bank may
reasonably request.
Payment of Debts.
Pay and discharge when due, and before subject to penalty
or further charge, and otherwise satisfy before maturity or delinquency, all obligations, debts,
taxes, and liabilities of whatever nature or amount, except those which Borrower in good faith
disputes.
Reports and Proxies.
Deliver to Bank, promptly, a copy of all financial statements,
reports, notices, and proxy statements, sent by Borrower to stockholders, and all regular or
periodic reports required to be filed by Borrower with any governmental agency or authority. Any
filings with the United States Securities and Exchange Commission are deemed to have been delivered
to Bank upon filing.
NEGATIVE COVENANTS.
Borrower agrees that from the date hereof and until final payment in full of
the Obligations, unless Bank shall otherwise consent in writing, Borrower will not:
Change of
Control.
Make or suffer a change of ownership that effectively changes control of Borrower from
current ownership such that SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation d/b/a SPANISH
BROADCASTING SYSTEM OF DELAWARE, INC. (Guarantor) does not, directly or indirectly, own at least
fifty-one percent (51%) of the issued and outstanding shares of Borrower and maintain control of
the day to day business operations of Borrower and so long as Guarantor continues to guaranty the
obligations of Borrower under the Note and other Loan Documents.
Encumbrances.
Create, assume, or
permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge or other
encumbrance on any of its assets, whether now owned or hereafter acquired, other than: (i) security
interests required by the Loan Documents; (ii) liens for taxes contested in good faith; (iii)
Permitted Liens, or (iv) equipment leases entered into by Borrower in the ordinary course of its
business, in an amount not to exceed $1,000,000.00 in the aggregate.
Guarantees.
Other than any
guarantee required under the Senior Credit Facility, Guarantee or otherwise become responsible for
obligations of any other person or persons, other than the endorsement of checks and drafts for
collection in the ordinary course of business.
Investments.
Purchase any stock, securities, or
evidence of indebtedness of any other person or entity except investments in direct obligations of
the United States Government and certificates
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of deposit of United States commercial banks having a tier 1 capital ratio of not less than 6% and
then in an amount not exceeding 10% of the issuing banks unimpaired capital and surplus.
Cross
Default.
Default in payment or performance of any obligation under any other loans, contracts or
agreements of Borrower with Bank or its affiliates that remains uncured beyond any applicable cure
or grace periods.
Default on Other Contracts or Obligations.
Default on any material contract
with or obligation when due to a third party or default in the performance of any obligation to a
third party incurred for money borrowed that remains uncured after any applicable cure or grace
periods.
Government Intervention.
Permit the assertion or making of any seizure, vesting or
intervention by or under authority of any governmental entity, as a result of which the management
of Borrower or any guarantor is displaced of its authority in the conduct of its respective
business or such business is curtailed or materially impaired.
Judgment Entered.
Permit the entry
of any monetary judgment or the assessment against, the filing of any tax lien against, or the
issuance of any writ of garnishment or attachment against any property of or debts due Borrower.
Prepayment of Other Debt.
Retire any long-term debt entered into prior to the date of this
Agreement (other than debt arising from the Senior Credit Facility) at a date in advance of its
legal obligation to do so.
Retire or Repurchase Capital Stock.
Retire or otherwise acquire any of
its capital stock.
ANNUAL FINANCIAL STATEMENTS.
Borrower shall deliver to Bank, within 90 days after the close of
each fiscal year, audited financial statements reflecting its operations during such fiscal year,
including, without limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the preceding year.
Such financial statements may be prepared on a consolidated and consolidating basis with SPANISH
BROADCASTING SYSTEM, INC., a Delaware corporation. All such statements shall be examined by an
independent certified public accountant acceptable to Bank. The opinion of such independent
certified public accountant shall not be acceptable to Bank if qualified due to any limitations in
scope imposed by Borrower or any other person or entity. Any other qualification of the opinion by
the accountant shall render the acceptability of the financial statements subject to Banks
approval. Any filings with the United States Securities and Exchange Commission are deemed to have
been delivered to Bank upon filing.
FINANCIAL COVENANTS.
Borrower agrees to the following provisions from the date hereof until final
payment in full of the Obligations, unless Bank shall otherwise consent in writing, using the
financial information for Borrower, its subsidiaries, affiliates and its holding or parent company,
as applicable:
Deposit Relationship.
Unless Bank sells or assigns the Loan pursuant to the terms
of the Loan Documents, Borrower shall maintain its primary depository account with Bank.
Limitation on Debt.
Other than trade payables and equipment leases entered into by Borrower in the
ordinary course of its business, in an amount not to exceed $1,000,000.00 in the aggregate,
indebtedness arising under the Senior Credit Facility, or indebtedness owed to Borrowers
shareholders (which indebtedness shall be expressly subordinate to repayment of the Loan), Borrower
shall not, directly or indirectly, create, incur, assume or become liable for any additional
indebtedness, whether contingent or direct, without the prior written consent of Bank.
CONDITIONS PRECEDENT.
The obligations of Bank to make the loan and any advances pursuant to this
Agreement are subject to the following conditions precedent:
Additional Documents.
Receipt by
Bank of such additional supporting documents as Bank or its counsel may reasonably request.
Opinion of Counsel.
On or prior to the date of any extension of credit hereunder, Bank shall have
received a written opinion of the counsel of Borrower acceptable to Bank that includes confirmation
of the following: (a) The accuracy of the representations set forth in this Agreement in the
Representations Subparagraphs entitled Authorization; Non-Contravention; Compliance with Laws,
and Organization and Authority. (b) This Agreement and other Loan Documents have been duly
executed and delivered by Borrower and constitute the legal, valid and binding obligations of
Borrower, enforceable in accordance with their terms. (c) No registration with, consent of,
approval of, or other action by, any federal, state or other governmental authority or regulatory
body is required by law in connection with the execution and delivery of this Agreement and the
other Loan Documents, or the extension of credit under this Agreement or the other Loan Documents,
or, if so required, such registration has been made, and such consent or approval given or such
other appropriate action taken. (d) The loan is not usurious.
Page 4
(e) The Loan Documents create the priority of lien on or security interest in the Collateral (as
defined in the Loan Documents) that is contemplated by the Loan Documents.
[EXECUTIONS APPEAR ON FOLLOWING PAGE]
Page 5
IN WITNESS WHEREOF
, Borrower and Bank, on the day and year first written above, have
caused this Agreement to be duly executed under seal.
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Borrower
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SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation
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CORPORATE
SEAL
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By: /s/ Joseph A. Garcia
Joseph A. Garcia, Executive Vice President
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Bank
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Wachovia Bank, National Association
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CORPORATE
SEAL
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By: /s/ George Leser
George Leser, Senior Vice President
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[ACKNOWLEDGEMENT APPEARS ON FOLLOWING PAGE]
Page 6
State of Florida
County of Miami-Dade
The foregoing instrument was acknowledged this day by Joseph A. Garcia, as Executive Vice
President of SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation on behalf of the corporation,
who is personally known to me or who has produced ___as identification.
Witness my hand and official seal, this _____ day of December, 2006.
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______________________________, Notary Public
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Notary Seal
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______________________________
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(Printed Name of Notary)
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Commission Expires: ___________________________
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Commission Number: ___________________________
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State of Florida
County of Miami-Dade
The foregoing instrument was acknowledged this day by George Leser, as Senior Vice President
of Wachovia Bank, National Association on behalf of the bank, who is personally known to me or who
has produced ___as identification.
Witness my hand and official seal, this _____ day of December, 2006.
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______________________________, Notary Public
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Notary Seal
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______________________________
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(Printed Name of Notary)
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Commission Expires: ___________________________
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Commission Number: ___________________________
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Page 7
Exhibit
10.2
PROMISSORY NOTE
$7,650,000.00
January 4, 2007
FLORIDA DOCUMENTARY STAMP TAX IN THE AMOUNT OF $26,775.00 HAS BEEN AFFIXED TO THE MORTGAGE PURSUANT
TO SECTION 201.08, FLORIDA STATUTE.
SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation
2601 S. Bayshore Drive
PH II
Coconut Grove, Florida 33133
(Hereinafter referred to as Borrower)
Wachovia Bank, National Association
225 Water Street
Jacksonville, Florida 32202
(Hereinafter referred to as Bank)
Borrower promises to pay to the order of Bank, in lawful money of the United States of America, at
its office indicated above or wherever else Bank may specify, the sum of Seven Million, Six Hundred
Fifty Thousand and No/100 Dollars ($7,650,000.00) or such sum as may be advanced and outstanding
from time to time, with interest on the unpaid principal balance at the rate and on the terms
provided in this Promissory Note (including all renewals, extensions or modifications hereof, this
Note).
LOAN AGREEMENT.
This Note is subject to the provisions of that certain Loan Agreement between Bank
and Borrower of even date herewith, as the same may be amended or modified from time to time (the
Loan Agreement).
USE OF PROCEEDS.
Borrower shall use the proceeds of the loan evidenced by this Note to finance the
acquisition of the property located at 7007 NW 77th Avenue in Miami, Florida (the Property).
SECURITY.
Borrower has granted Bank a security interest in the collateral described in the Loan
Documents, including, but not limited to, real and personal property collateral described in that
certain Mortgage, Assignment of Rents and Security Agreement of even date herewith, as the same may
be amended or modified from time to time (the Mortgage).
INTEREST RATE.
Interest shall accrue on the unpaid principal balance of this Note during each
Interest Period from the date hereof at a rate per annum equal to 1-month LIBOR plus 1.25%
(Interest Rate). Interest for each Interest Period shall accrue each day during such Interest
Period, commencing on and including the first day to but excluding the last day. Interest Period
means each period commencing on the first day of the calendar month and ending on the first day of
the next succeeding calendar month; provided (i) the first Interest Period shall commence on the
date hereof and (ii) any Interest Period that would otherwise extend past the maturity date of this
Note shall end on the maturity date of this Note. LIBOR means, with respect to each Interest
Period, the rate for U.S. dollar deposits with a maturity equal to the number of months specified
above, as reported on Telerate page 3750 as of 11:00 a.m., London time, on the second London
business day before such Interest Period begins, or, in the case of the first Interest Period, the
second London business day before the first day of the calendar month during which such Interest
Period begins (or if not so reported, then as determined by the Bank from another recognized source
or interbank quotation).
DEFAULT RATE.
In addition to all other rights contained in this Note, if a Default (as defined
herein) occurs and as long as a Default continues, all outstanding Obligations, other than
Obligations under any
swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time) between Borrower
and Bank or its affiliates, shall bear interest at the lesser of (i) the Interest Rate plus 3% or
(ii) the highest rate permitted by law (Default Rate). The Default Rate shall also apply from
acceleration until the Obligations or any judgment thereon is paid in full.
INTEREST AND FEE(S) COMPUTATION (ACTUAL/360).
Interest and fees, if any, shall be computed on the
basis of a 360-day year for the actual number of days in the applicable period (Actual/360
Computation). The Actual/360 Computation determines the annual effective yield by taking the
stated (nominal) rate for a years period and then dividing said rate by 360 to determine the daily
periodic rate to be applied for each day in the applicable period. Application of the Actual/360
Computation produces an annualized effective interest rate exceeding the nominal rate.
PREPAYMENT ALLOWED.
Subject to any payment obligations or termination fees or payments as may be
set forth in any swap agreement (as defined in 11 U.S.C. § 101, as in effect from time to time)
between Borrower and Bank (or any of its affiliates), Borrower may prepay the Loan in whole or in
part at any time without penalty or premium. Any prepayment in whole or in part shall include
accrued interest and all other sums then due under any of the Loan Documents (as defined below).
No partial prepayment shall affect the obligation of Borrower to make any payment of principal or
interest due under this Note.
REPAYMENT TERMS/MATURITY.
This Note shall be due and payable as set forth hereinbelow. Commencing
on February 5, 2007, this Note shall be payable in consecutive monthly payments of principal in the
amounts set forth in Schedule A attached hereto, plus accrued interest, on the dates set forth in
Schedule A, until fully paid. In any event, all principal and accrued interest shall be due and
payable on January 4, 2017 (the Maturity Date).
APPLICATION OF PAYMENTS.
Monies received by Bank from any source for application toward payment of
the Obligations shall be applied to accrued interest and then to principal. If a Default occurs,
monies may be applied to the Obligations in any manner or order deemed appropriate by Bank.
If any payment received by Bank under this Note or other Loan Documents is rescinded, avoided or
for any reason returned by Bank because of any adverse claim or threatened action, the returned
payment shall remain payable as an obligation of all persons liable under this Note or other Loan
Documents as though such payment had not been made.
DEFINITIONS. Loan Documents.
The term Loan Documents, as used in this Note and the other Loan
Documents, refers to all documents executed in connection with or related to the loan evidenced by
this Note and any prior notes which evidence all or any portion of the loan evidenced by this Note,
and any letters of credit issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in connection therewith or
related thereto, and may include, without limitation, the Loan Agreement, the Mortgage, that
certain Unconditional Guaranty dated of even date herewith made by SPANISH BROADCASTING SYSTEM,
INC., a Delaware corporation d/b/a SPANISH BROADCASTING SYSTEM OF DELAWARE, INC. (Guarantor) in
favor of Bank, security agreements, security instruments, financing statements, mortgage
instruments, any renewals or modifications, whenever any of the foregoing are executed, but does
not include swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to time).
Obligations.
The term Obligations, as used in this Note and the other Loan Documents, refers to
any and all indebtedness and other obligations under this Note, all other obligations under any
other Loan Document(s), and all obligations under any swap agreements (as defined in 11 U.S.C. §
101, as in effect from time to time) between Borrower and Bank, or its affiliates, whenever
executed.
Certain Other Terms.
All terms that are used but not otherwise defined in any of the
Loan Documents shall have the definitions provided in the Uniform Commercial Code.
LATE CHARGE.
If any payments are not timely made, Borrower shall also pay to Bank a late charge
equal to 5% of each payment past due for 10 or more days. This late charge shall not apply to
payments due at maturity or by acceleration hereof, unless such late payment is in an amount not greater
than the highest periodic payment due hereunder.
Page 2
Acceptance by Bank of any late payment without an accompanying late charge shall not be deemed a
waiver of Banks right to collect such late charge or to collect a late charge for any subsequent
late payment received.
ATTORNEYS FEES AND OTHER COLLECTION COSTS.
Borrower shall pay all of Banks reasonable expenses
actually incurred to enforce or collect any of the Obligations including, without limitation,
reasonable arbitration, paralegals, attorneys and experts fees and expenses, whether incurred
without the commencement of a suit, in any trial, arbitration, or administrative proceeding, or in
any appellate or bankruptcy proceeding.
USURY.
If at any time the effective interest rate under this Note would, but for this paragraph,
exceed the maximum lawful rate, the effective interest rate under this Note shall be the maximum
lawful rate, and any amount received by Bank in excess of such rate shall be applied to principal
and then to fees and expenses, or, if no such amounts are owing, returned to Borrower.
GRACE/CURE PERIOD. Grace Period
. The failure of timely payment of the Obligations shall not be a
Default until five (5) business days after such payment is due.
Cure Period.
Except as provided
below and as to any default under the Senior Credit Facility, any Default, other than non-payment,
may be cured within fifteen (15) days after written notice thereof is mailed to Borrower by Bank,
or if Borrower, in Banks reasonable discretion, is diligently pursuing a cure, within sixty (60)
days after written notice thereof is mailed to Borrower by Bank. Borrowers right to cure shall be
applicable only to curable defaults and shall not apply, without limitation, to Defaults based upon
False Warranty or Cessation; Bankruptcy. Also, any Default based on a failure to provide any
insurance required under the Loan Documents may only be cured by Borrower within ten (10) days
after written notice is mailed to Borrower by Bank. Bank shall not exercise its remedies to collect
the Obligations except as Bank reasonably deems necessary to protect its interest in collateral
securing the Obligations during a cure period
DEFAULT.
Subject to the grace and cure periods set forth above, if any of the following occurs, a
default (Default) under this Note shall exist:
Nonpayment; Nonperformance.
The failure of
timely payment or performance of the Obligations or Default under this Note or any other Loan
Documents.
False Warranty.
A warranty or representation made or deemed made in the Loan Documents
or furnished Bank in connection with the loan evidenced by this Note proves materially false, or if
of a continuing nature, becomes materially false.
Cross Default.
At Banks option, any default in
payment or performance of any obligation under that certain First Lien Credit Agreement, among
Guarantor, as borrower, MERRILL LYNCH, PIERCE FENNER & SMITH, INCORPORATED, as syndication agent,
Bank, as documentation agent, LEHMAN COMMERCIAL PAPER INC., as administrative agent and other
lenders, as lenders, dated as of June 10, 2005 (as same may be amended, modified, extended or
replaced from time to time, the Senior Credit Facility) that is not waived and continues beyond
any applicable grace and cure periods, and under any other loans, contracts or agreements of
Borrower or Guarantor with Bank or its affiliates that continues beyond any applicable grace and
cure periods.
Cessation; Bankruptcy.
The dissolution of, termination of existence of, loss of
good standing status by, appointment of a receiver for, assignment for the benefit of creditors of,
or commencement of any bankruptcy or insolvency proceeding by or against Borrower or Guarantor
which is not dismissed or dissolved within forty-five (45) days.
Material Capital Structure or
Business Alteration.
Without prior written consent of Bank, (i) a material alteration in the kind
or type of Borrowers business; (ii) the sale of substantially all of the business or assets of
Borrower, or a material portion (10% or more) of such business or assets if such a sale is outside
the ordinary course of business of Borrower, or more than 50% of the outstanding stock or voting
power of or in any such entity in a single transaction or a series of transactions; (iii) the
acquisition of substantially all of the business or assets or more than 50% of the outstanding
stock or voting power of any other entity; or (iv) should any Borrower enter into any merger or
consolidation.
Page 3
REMEDIES UPON DEFAULT.
If a Default occurs under this Note or any Loan Documents, Bank may at any
time thereafter, take the following actions:
Bank Lien.
Foreclose its security interest or lien
against Borrowers deposit accounts and investment property without notice.
Acceleration Upon
Default.
Accelerate the maturity of this Note and, at Banks option, any or all other Obligations,
other than Obligations under any swap agreements (as defined in 11 U.S.C. § 101, as in effect from
time to time) between Borrower and Bank, or its affiliates, which shall be due in accordance with
and governed by the provisions of said swap agreements; whereupon this Note and the accelerated
Obligations shall be immediately due and payable; provided, however, if the Default is based upon a
bankruptcy or insolvency proceeding commenced by or against Borrower or any guarantor or endorser
of this Note, all Obligations (other than Obligations under any swap agreement as referenced above)
shall automatically and immediately be due and payable.
Cumulative.
Exercise any rights and
remedies as provided under the Note and other Loan Documents, or as provided by law or equity.
FINANCIAL AND OTHER INFORMATION.
Borrower shall deliver to Bank such information as Bank may
reasonably request from time to time, including without limitation, financial statements and
information pertaining to Borrowers financial condition. Such information shall be true,
complete, and accurate in all material respects.
WAIVERS AND AMENDMENTS.
No waivers, amendments or modifications of this Note and other Loan
Documents shall be valid unless in writing and signed by an officer of Bank. No waiver by Bank of
any Default shall operate as a waiver of any other Default or the same Default on a future
occasion. Neither the failure nor any delay on the part of Bank in exercising any right, power, or
remedy under this Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or remedy.
Except to the extent otherwise provided by the Loan Documents or prohibited by law, each Borrower
and each other person liable under this Note waives presentment, protest, notice of dishonor,
demand for payment, notice of intention to accelerate maturity, notice of acceleration of maturity,
notice of sale and all other notices of any kind. Further, each agrees that Bank may (i) extend,
modify or renew this Note or make a novation of the loan evidenced by this Note, and/or (ii) grant
releases, compromises or indulgences with respect to any collateral securing this Note, or with
respect to any Borrower or other person liable under this Note or any other Loan Documents, all
without notice to or consent of each Borrower and other such person, and without affecting the
liability of each Borrower and other such person; provided, Bank may not extend, modify or renew
this Note or make a novation of the loan evidenced by this Note without the consent of the
Borrower, or if there is more than one Borrower, without the consent of at least one Borrower; and
further provided, if there is more than one Borrower, Bank may not enter into a modification of
this Note which increases the burdens of a Borrower without the consent of that Borrower.
MISCELLANEOUS PROVISIONS. Assignment.
This Note and the other Loan Documents shall inure to the
benefit of and be binding upon the parties and their respective heirs, legal representatives,
successors and assigns. Banks interests in and rights under this Note and the other Loan
Documents are freely assignable, in whole or in part, by Bank, to an Eligible Assignee upon
thirty (30) days prior notice to Borrower. For purposes hereof, Eligible Assignee shall mean a
AA rated commercial bank, finance company, insurance company or other financial institution that is
engaged in making, purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business. Upon the occurrence of a Default, or
if required by federal regulations, Banks interests in and rights under this Note and the other
Loan Documents are freely assignable, in whole or in part, by Bank. In addition, nothing in this
Note or any of the other Loan Documents shall prohibit Bank from pledging or assigning this Note or
any of the other Loan Documents or any interest therein to any Federal Reserve Bank. Borrower
shall not assign its rights and interest hereunder without the prior written consent of Bank, and
any attempt by Borrower to assign without Banks prior written consent is null and void. Any
assignment shall not release Borrower from the Obligations.
Applicable Law; Conflict Between
Documents.
This Note and, unless otherwise provided in any other Loan Document, the other Loan
Documents shall be governed by and interpreted under the laws of the state named in Banks address
on the first page hereof without regard to that states conflict of laws principles. If the terms
of
Page 4
this Note should conflict with the terms of any loan agreement or any commitment letter that
survives closing, the terms of this Note shall control.
Borrowers Accounts.
Except as prohibited
by law, Borrower grants Bank a security interest in all of Borrowers deposit accounts and
investment property with Bank and any of its affiliates.
Swap Agreements.
All swap agreements (as
defined in 11 U.S.C. § 101, as in effect from time to time), if any, between Borrower and Bank or
its affiliates are independent agreements governed by the written provisions of said swap
agreements, which will remain in full force and effect, unaffected by any repayment, prepayment,
acceleration, reduction, increase or change in the terms of this Note, except as otherwise
expressly provided in said written swap agreements, and any payoff statement from Bank relating to
this Note shall not apply to said swap agreements except as otherwise expressly provided in such
payoff statement.
Jurisdiction.
Borrower irrevocably agrees to non-exclusive personal
jurisdiction in the state identified as the Jurisdiction above.
Severability.
If any provision of
this Note or of the other Loan Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this Note or other such
document.
Notices.
Any notices to Borrower shall be sufficiently given, if in writing and mailed
or delivered to the Borrowers address shown above or such other address as provided hereunder,
with a copy to Greenberg Traurig, P.A., 1221 Brickell Avenue, Miami, Florida 33131, Attn: Joel
Goldman, Esq., and to Bank, if in writing and mailed or delivered to Wachovia Bank, National
Association, Mail Code VA7628, P. O. Box 13327, Roanoke, VA 24040 or Wachovia Bank, National
Association, Mail Code VA7628, 10 South Jefferson Street, Roanoke, VA 24011 or such other address
as Bank may specify in writing from time to time. Banks failure to send such courtesy copy to
Borrowers counsel shall not in any way be deemed a failure to properly deliver notice to Borrower.
Notices to Bank must include the mail code. In the event that Borrower changes Borrowers address
at any time prior to the date the Obligations are paid in full, Borrower agrees to promptly give
written notice of said change of address by registered or certified mail, return receipt requested,
all charges prepaid.
Plural; Captions.
All references in the Loan Documents to Borrower,
guarantor, person, document or other nouns of reference mean both the singular and plural form, as
the case may be, and the term person shall mean any individual, person or entity. The captions
contained in the Loan Documents are inserted for convenience only and shall not affect the meaning
or interpretation of the Loan Documents.
Advances.
Bank may, in its sole discretion, make other
advances which shall be deemed to be advances under this Note, even though the stated principal
amount of this Note may be exceeded as a result thereof.
Posting of Payments.
All payments
received during normal banking hours after 2:00 p.m. local time at the office of Bank first shown
above shall be deemed received at the opening of the next banking day.
Joint and Several
Obligations.
If there is more than one Borrower, each is jointly and severally obligated together
with all other parties obligated for the Obligations.
Fees and Taxes.
Borrower shall promptly pay
all documentary, intangible recordation and/or similar taxes on this transaction whether assessed
at closing or arising from time to time.
LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES.
EACH
OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION
OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVE
RSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF
OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR
DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT
SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR
CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY
WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE
FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED
BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE.
Patriot Act Notice.
To help fight the funding
of terrorism and money laundering activities, Federal law requires all financial institutions to
obtain, verify, and record information that identifies each person who opens an account. For
purposes of this section, account shall be understood to include loan accounts.
Final Agreement.
This Note and the other Loan Documents represent the final agreement between the parties and may
not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the
parties. There are no unwritten oral agreements between the parties.
Page 5
WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF BORROWER BY EXECUTION
HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS NOTE, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN
CONNECTION WITH THIS NOTE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT
TO BANK TO ACCEPT THIS NOTE
.
EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL SUPERSEDE AND
REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES CONTAINED IN ANY
LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION WITH, RELATED TO
OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS NOTE.
[EXECUTION APPEARS ON FOLLOWING PAGE]
Page 6
IN WITNESS WHEREOF
, Borrower, on the day and year first above written, has caused this Note to
be duly executed under seal.
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SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation
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By:
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/s/ Joseph A. Garcia
(SEAL)
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Joseph A. Garcia, Executive Vice President
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State of Florida
County of Miami-Dade
The foregoing instrument was acknowledged this day by Joseph A. Garcia, as Executive Vice
President of SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation on behalf of the corporation,
who is personally known to me or who has produced ___as identification.
Witness my hand and official seal, this _____ day of December, 2006.
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______________________________, Notary Public
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Notary Seal
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______________________________
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(Printed Name of Notary)
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Commission Expires: ___________________________
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Commission Number: ___________________________
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Page 7
Exhibit
10.3
For Clerk of Court Use
PREPARED BY: Thomas P. Angelo, Esq.
RETURN TO: Thomas P. Angelo, Esq.
Angelo & Banta, P.A.
515 East Las Olas Boulevard, Suite 850
Fort Lauderdale, Florida 33301
FLORIDA DOCUMENTARY STAMP TAXES IN THE AMOUNT OF $26,775.00 AND FLORIDA NON-RECURRING INTANGIBLE
TAXES IN THE AMOUNT OF $15,300.00 ARE BEING PAID UPON RECORDATION OF THIS INSTRUMENT.
MORTGAGE, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT
This MORTGAGE ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (hereafter referred to as Mortgage)
made January 4, 2007, by and between Wachovia Bank, National Association, a national banking
association, whose address is 225 Water Street, Jacksonville, Florida 32202 (Bank), and SBS MIAMI
BROADCAST CENTER, INC., a Delaware corporation whose address is 2601 S. Bayshore Drive, PH II,
Coconut Grove, Florida 33133 (Mortgagor).
W I T N E S S E T H :
To secure payment and performance of obligations under that certain Promissory Note dated of
even date herewith, in the original principal amount of $7,650,000.00, made by Mortgagor payable to
Bank (as the same may be amended, modified, extended or increased from time to time, the Note),
this Mortgage, any present or future Letters of Credit issued by Bank for the account of Mortgagor,
other loan documents as defined in the Note (the Loan Documents), and swap agreements as defined
in 11 U.S.C. § 101, as in effect from time to time, and any renewals, extensions, novations, or
modifications of the foregoing (collectively the Obligations), and in consideration of these
premises and for other consideration, Mortgagor does mortgage, grant and convey unto Bank
(for itself and its affiliates), its successors and assigns all of Mortgagors right, title and
interest now owned or hereafter acquired in and to each of the following (collectively, the
Property): (i) all those certain tracts of land in the State of Florida more particularly
described in EXHIBIT A attached hereto and made part hereof (the Land); (ii) all buildings
and improvements now or hereafter erected on the Land; (iii) all fixtures, machinery, equipment and
other articles of real, personal or mixed property attached to, situated or installed in or upon,
or used in the operation or maintenance of, the Land or any buildings or improvements situated
thereon, whether or not such real, personal or mixed property is or shall be affixed to the Land;
(iv) all
building materials, building machinery and building equipment delivered on site to the Land during
the course of, or in connection with, any construction, repair or renovation of the buildings and
improvements situated or to be situated thereon; (v) all leases, licenses or occupancy agreements
of all or any part of the Land and all extensions, renewals, and modifications thereof, and any
options, rights of first refusal or guarantees relating thereto; all rents, income, revenues,
security deposits, issues, profits, awards and payments of any kind payable under the leases or
otherwise arising from the Land; (vi) all contract rights, accounts receivable and general
intangibles relating to the Land or the use, occupancy, maintenance, construction, repair or
operation thereof; all management agreements, franchise agreements, utility agreements and
deposits; all maps, plans, surveys and specifications; all warranties and guaranties; all permits,
licenses and approvals; and all insurance policies; (vii) all estates, rights, tenements,
hereditaments, privileges, easements, and appurtenances of any kind benefiting the Land; all means
of access to and from the Land, whether public or private; and all water and mineral rights; and
(viii) all Proceeds of any of the above-described property, which term shall have the meaning
given to it in the Uniform Commercial Code of the jurisdiction where this Mortgage is recorded (the
UCC), whether cash or non-cash, and including insurance proceeds and condemnation awards; and all
replacements, substitutions and accessions thereof.
In the event that Mortgagor is the owner of a leasehold estate with respect to any portion of
the Property and Mortgagor obtains a fee estate in such portions of the Property, then, such fee
estate shall automatically, and without further action of any kind on the part of the Mortgagor, be
and become subject to the security title and lien of this Agreement.
TO HAVE AND TO HOLD the Property and all the estate, right, title and interest, in law and in
equity, of Mortgagors in and to the Property unto Bank, its successors and assigns,
forever.
Mortgagor WARRANTS AND REPRESENTS that Mortgagor is lawfully seized of the Property, in fee
simple, absolute, that Mortgagor has the legal right to convey and encumber the same, and that the
Property is free and clear of all liens and encumbrances. Mortgagor further warrants and will
forever defend all and singular the Property and title thereto to Bank and Banks successors and
assigns, against the lawful claims of all persons whomsoever.
PROVIDED ALWAYS that if (i) all the Obligations (including without limitation, all termination
payments and any other amounts due under or in connection with any swap agreements (as defined in
11 U.S.C. § 101, as in effect from time to time) secured hereunder) are paid in full, (ii) each and
every representation, warranty, agreement, covenant and condition of this Mortgage, and the other
Loan Documents, are complied with and abided by, and (iii) any and all swap agreements (as defined
in 11 U.S.C. § 101, as in effect from time to time) secured hereunder have matured or been
terminated, then this Mortgage and the estate hereby created shall cease and be null, void, and
canceled of record.
To protect the security of this Mortgage, Mortgagor further represents and agrees with Bank as
follows:
Payment of Obligations.
That the Obligations shall be timely paid and performed.
Future Advances.
This Mortgage is given to secure not only existing Obligations, but also
future advances, including obligations under swap agreements made, and future swap agreements (as
defined in 11 U.S.C. § 101, as in effect from time to time) entered into with Bank or any of its
affiliates, within 20 years of the date of this Mortgage to the same extent as if such future
advances and swap agreements are made on the date of the execution of this Mortgage. The principal
amount that may be so secured may decrease or increase from time to time, but the total amount so
secured at any one time shall not exceed $35,000,000.00, plus all interest, costs, reimbursements,
fees and expenses due under this Mortgage and secured hereby. Mortgagor shall not execute any
document that impairs or otherwise impacts the priority of any existing or future Obligations
secured by this Mortgage.
Grant of Security Interest in Personal Property.
This Mortgage constitutes a security
agreement under the UCC and shall be deemed to constitute a fixture financing statement hereby
grants
Page 2
a security interest in any personal property included in the Property. On request of Bank,
Mortgagor will execute one or more Financing Statements in form satisfactory to Bank and will pay
all costs and expenses of filing the same in all public filing offices, where filing is deemed
desirable by Bank. Bank is authorized to file Financing Statements relating to the Property
without Mortgagors signature where permitted by law. Mortgagor appoints Bank as its
attorney-in-fact to execute such documents necessary to perfect Banks security interest on
Mortgagors behalf. The appointment is coupled with an interest and shall be irrevocable as long
as any Obligations remain outstanding.
Nothing herein obligates Bank to provide credit in excess of the Obligations.
Leases, Subleases and Easements.
Mortgagor shall maintain, enforce and cause to be performed
all of the terms and conditions under any lease, sublease or easement which may constitute a
portion of the Property. Mortgagor shall not, without the consent of Bank (which consent
shall not be unreasonably withheld or delayed), enter into any new lease of all or any portion of
the Property except to an affiliate of Borrower (which lease(s) shall be subordinate to Banks
rights pursuant to a subordination and attornment agreement in a form acceptable to Bank in its
sole and absolute discretion and the terms of such lease(s) shall be subject to Banks reasonable
approval), agree to the cancellation or surrender under any lease of all or any portion of the
Property, agree to prepayment of rents, issues or profits (other than rent paid at the signing of a
lease or sublease), modify any such lease so as to shorten the term, decrease the rent, accelerate
the payment of rent, or change the terms of any renewal option; and any such purported new lease,
cancellation, surrender, prepayment or modification made without the consent of Bank shall be void
as against Bank.
Notwithstanding the foregoing, Mortgagor may modify the terms of that certain Memorandum of
Agreement recorded October 7, 1998, in Official Records Book 18304, at Page 193, of the Public
Records of Miami-Dade County, Florida, relating to an approximate 35 strip of land on the northern
boundary of the Property and create an easement for such strip of the Property, provided that the
form and substance of such easement is approved by Bank in its reasonable discretion prior to
recording of such easement.
Required Insurance.
Mortgagor shall maintain with respect to the Property: (i) during
construction of any improvements on the Property, all-risk builders risk insurance which must
include windstorm, hail damage, fire and vandalism (non-reporting Completed Value with Special
Cause of Loss form), in an amount not less than the lesser of (a) the completed replacement value
of the improvements under construction and (b) the outstanding principal amount of the Note, plus
accrued interest, naming Bank as mortgagee and loss payee; (ii) upon completion of construction,
upon occupancy of any improvements, and at all other times, insurance against loss or damage by
fire and other casualties and hazards by insurance written on an all risks basis, including
malicious mischief, collapse and sinkhole coverage, in an amount not less than the lesser of (a)
the completed replacement value of the improvements and (b) the outstanding principal amount of the
Note, plus accrued interest, naming Bank as loss payee and mortgagee; (iii) if the Property is
required to be insured pursuant to the National Flood Reform Act of 1994, and the regulations
promulgated thereunder, flood insurance is required in the amount equal to the lesser of the loan
amount or maximum available under the National Flood Insurance Program. If, after closing, the
Property (or any part thereof) is remapped and if the vertical improvements are determined to be
located in a special flood hazard area, Mortgagor must obtain and maintain a flood insurance
policy. If, within forty-five (45) days of receipt of notification from Bank that the Property has
been reclassified by FEMA as being located in a special flood hazard area, Mortgagor has not
provided sufficient evidence of flood insurance, Bank is mandated under federal law to purchase
flood insurance on behalf of Mortgagor, and Bank will add the associated costs to the principal
balance of the Note; (iv) as applicable, insurance which complies with the workers compensation
and employers liability laws of all states in which Mortgagor shall be required to maintain such
insurance; and (v) liability insurance providing coverage in such amount as Bank may reasonably
require but in no event less than $1,000,000.00 combined single limit, naming Bank as an additional
insured; and (vi) such other insurance as Bank may reasonably require from time to time; provided
such insurance is customary for property of this nature and is otherwise available at commercially
reasonable rates.
Page 3
All property insurance policies shall contain an endorsement or agreement by the insurer in
form reasonably satisfactory to Bank that any loss shall be payable in accordance with the terms of
such policy notwithstanding any act or negligence of Mortgagor and the further agreement (within
both the property and liability policies) of the insurer waiving rights of subrogation against
Bank, and rights of set-off, counterclaim or deductions against Mortgagor.
All insurance policies shall be in form, provide coverages, be issued by companies and be in
amounts reasonably satisfactory to Bank, as required above. At least 30 days prior to the
expiration of each such policy, Mortgagor shall furnish Bank with evidence satisfactory to Bank
that such policy has been renewed or replaced or is no longer required hereunder. All such
policies shall provide that the policy will not be canceled or materially amended without at least
30 days prior written notice to Bank. In the event Mortgagor fails to provide, maintain, keep in
force, and furnish to Bank the policies of insurance required by this paragraph, Bank may procure
such insurance or single-interest insurance in such amounts, at such premium, for such risks and by
such means as Bank chooses, at Mortgagors expense; provided however, Bank shall have no
responsibility to obtain any insurance, but if Bank does obtain insurance, Bank shall have no
responsibility to assure that the insurance obtained shall be adequate or provide any protection to
Mortgagor.
Insurance Proceeds.
After occurrence of any loss to any of the Property, Mortgagor shall give
prompt written notice thereof to Bank.
In the event of such loss all insurance proceeds, including unearned premiums, shall be
payable to Bank, and Mortgagor hereby authorizes and directs any affected insurance company to make
payment of such proceeds directly to Bank and not to Bank and Mortgagor jointly. Bank is hereby
authorized by Mortgagor to make proof of loss if not promptly made by Mortgagor, settle, adjust or
compromise any claims for loss or damage under any policy or policies of insurance and Mortgagor
appoints Bank as its attorney-in-fact to receive and endorse any insurance proceeds to Bank, which
appointment is coupled with an interest and shall be irrevocable as long as any Obligations remain
unsatisfied. Mortgagor shall pay the costs of collection, including attorneys fees, of insurance
proceeds payable on account of such damage or destruction. Mortgagor shall have no claim against the
insurance proceeds, or be entitled to any portion thereof, and all rights to the insurance proceeds
are hereby assigned to Bank as security for payment of the Obligations. Notwithstanding the
foregoing, prior to the occurrence of a Default, Mortgagor may settle, adjust or compromise any
claims for loss or damage under any policy or policies of insurance and Banks consent to any
settlement, adjustment or compromise shall not be unreasonably withheld.
In the event of any damage to or destruction of the Property, Bank shall have the option of
applying or paying all or part of the insurance proceeds to (i) the Obligations in such order as
Bank may determine, (ii) restoration, replacement or repair of the Property in accordance with
Banks standard construction loan disbursement conditions and requirements, or (iii) Mortgagor.
Nothing herein shall be deemed to excuse Mortgagor from restoring, repairing and maintaining the
Property as required herein.
Notwithstanding the foregoing, provided that all of the following conditions are fully
satisfied by Mortgagor, Bank shall disburse insurance proceeds for repair and restoration of the
Property in accordance with Banks standard construction loan disbursement conditions and
requirements: (i) no default or event which, with the giving of notice or the passage of time, or
both, would constitute a default shall have occurred under any Loan Document; (ii) Mortgagor shall
have delivered evidence satisfactory to Bank that the Property can be fully repaired and restored
at least six (6) months prior to the maturity of the Obligations; (iii) the work is performed under
a fixed price or guaranteed maximum price contract reasonably satisfactory to Bank in accordance
with plans and specifications and a budget satisfactory to Bank in accordance with all legal
requirements; (iv) Mortgagor shall have deposited with Bank for disbursement in connection with
the restoration the greater of: (A) the applicable deductible under the insurance policies
covering the loss; or (B) the amount by which the cost of restoration of the Property to
substantially the same value, condition and character as existed prior to such damage is estimated
by Bank to exceed the net insurance proceeds; (v) Mortgagors insurance company has agreed in
writing to pay the Mortgagors claim as to the casualty and the proceeds from such claim, together
with Borrowers
Page 4
deposit under the preceding subsection (iv) is sufficient to rebuild the Property; (vi)
Mortgagor has paid as and when due all of Banks costs and expenses incurred in connection with the
collection and disbursement of insurance proceeds, including without limitation, inspection,
monitoring, engineering and legal fees. If not paid on demand, at Banks option, such costs may be
deducted from the disbursements made by Bank or added to the sums secured by this Mortgage; and
(vii) such other terms and conditions as Bank may reasonably require.
Notwithstanding the foregoing, provided that all of the following conditions are fully
satisfied by Mortgagor, Bank shall not apply insurance proceeds to the Obligations if such
application would be adverse to any swap agreement entered by Mortgagor in connection with Loan:
(i) no default or event which, with the giving of notice or the passage of time, or both, would
constitute a default shall have occurred under any Loan Document; (ii) no lease of the Property has
been cancelled or terminated, is not cancelable or terminable by the tenant or Mortgagor on account
of the casualty, or, if it is, the tenant or Mortgagor (as applicable) has waived in writing its
right to cancel; (iii) Mortgagor has paid as and when due all of Banks costs and expenses incurred
in connection with the collection and disbursement of insurance proceeds, including without
limitation, inspection, monitoring, engineering and legal fees; if not paid on demand, at Banks
option, such costs may be deducted from the disbursements made by Bank or added to the sums secured
by this Mortgage; and (iv) such other terms and conditions as Bank may reasonably require. In the
event the application of such insurance proceeds would be adverse to any swap agreement entered
into by Mortgagor in connection with the Loan, and the above conditions are fully satisfied, Bank
shall place the insurance proceeds in a restricted account, in which restricted account Bank shall
have a perfected security interest, until such time as the application of such insurance proceeds
to the Obligations would not be adverse to any swap agreement.
Impositions; Escrow Deposit.
Mortgagor will pay all taxes, levies, assessments and other fees
and charges imposed upon or which may become a lien upon the Property under any law or ordinance
(all of the foregoing collectively Impositions) before they become delinquent, except for liens
for taxes contested by Mortgagor in good faith. Upon the occurrence of a Default and upon the
request of Bank, Mortgagor shall add to each periodic payment required under the Note the amount
estimated by Bank to be sufficient to enable Bank to pay, as they come due, all Impositions and
insurance premiums which Mortgagor is required to pay hereunder. Payments requested under this
provision shall be supplemented or adjusted as required by Bank from time to time. Such funds may
be commingled with the general funds of Bank and shall not earn interest. Upon the occurrence of a
Default, Bank may apply such funds to pay any of the Obligations.
Use of Property.
Mortgagor shall use and operate, and require its lessees or licensees to use
and operate, the Property in compliance with all applicable laws (including, for example, the
Americans with Disabilities Act and the Fair Housing Act) and ordinances, covenants, and
restrictions, and with all applicable requirements of any lease or sublease now or hereafter
affecting the Property. Mortgagor shall not permit any unlawful use of the Property or any use
that may give rise to a claim of forfeiture of any of the Property. Mortgagor shall not allow
changes in the stated use of Property from that disclosed to Bank at the time of execution hereof.
Mortgagor shall not initiate or acquiesce to a zoning change of the Property without prior notice
to, and written consent of, Bank.
Maintenance, Repairs and Alterations.
Mortgagor shall keep and maintain the Property in good
condition and repair and fully protected from the elements to the reasonable satisfaction of Bank.
Other than in connection with Mortgagors planned renovation of the building located on the
Property related to its planned use as a broadcast center, Mortgagor will not remove, demolish or
structurally alter any of the buildings or other improvements on the Property (except such
alterations as may be required by laws, ordinances or regulations) without the prior written
consent of Bank. Mortgagor shall promptly notify Bank in writing of any material loss, damage or
adverse condition affecting the Property.
Eminent Domain.
Should the Property or any interest therein be taken or damaged by reason of
any public use or improvement or condemnation proceeding (Condemnation), or should Mortgagor
receive any notice or other information regarding such Condemnation, Mortgagor shall give prompt
written notice thereof to Bank. Bank shall be entitled to all compensation, awards and other
payments or
Page 5
relief granted in connection with such Condemnation and, at its option, may commence, appear in and
prosecute in its own name any action or proceedings relating thereto. After the occurrence of a
Default, Bank shall be entitled to make any compromise or settlement in connection with such taking
or damage. All compensation, awards, and damages awarded to Mortgagor related to any Condemnation
(the Proceeds) are hereby assigned to Bank and Mortgagor agrees to execute such further
assignments of the Proceeds as Bank may reasonably require. Bank shall have the option of applying
or paying the Proceeds in the same manner as insurance proceeds as provided herein. Mortgagor
appoints Bank as its attorney-in-fact to receive and endorse the Proceeds to Bank, which
appointment is coupled with an interest and shall be irrevocable as long as any Obligations remain
unsatisfied.
Notwithstanding the provisions of this section to the contrary, if a de minimis (as
hereinafter defined) portion of the Property is taken by condemnation and if in Banks reasonable
judgment such portion may be restored or repaired to the similar condition immediately prior to
such taking without impairment of Banks security or the value of the Property, then, provided the
following conditions are satisfied, as determined by Bank in its reasonable discretion, the
Condemnation Proceeds received by Bank with respect to such taking, after deducting therefrom all
of Banks costs and expenses incurred by Bank in connection with such Condemnation, shall be
disbursed to Mortgagor as work progresses pursuant to a construction and disbursing agreement in
form and content satisfactory to Bank in its sole discretion, and Mortgagor shall promptly and
diligently, regardless of whether there are sufficient proceeds therefor, restore and repair the
Property in a manner satisfactory to Bank. The term de minimis for the purposes of this section
means an amount, as determined by Bank in its reasonable discretion.
The following conditions shall be satisfied, in Banks sole and absolute discretion:
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(i)
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Mortgagor shall have (a) delivered evidence that Condemnation Proceeds
(excluding such amounts as are attributable to a loss of rent, income, business or
profits) exist in an amount sufficient to reconstruct the improvements located on the
Property; and/or (b) made a deposit to Bank in such amount;
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(ii)
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no Default shall exist and/or no condition shall exist which but for notice,
passage of time, or both, would constitute a Default;
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(iii)
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the contemplated reconstruction shall not extend the Maturity Date set forth
in the Note or suspend or abate any obligation of Mortgagor or any Guarantor or any
other person;
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(iv)
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Mortgagor shall have obtained all necessary permits and other approvals to
reconstruct the Property;
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(v)
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Bank shall be satisfied that it will not incur any liability to any other
person as a result of such use or release of Condemnation Proceeds.
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In the event any one or more of the conditions set forth in this section above is not satisfied,
Bank may elect, in its sole and absolute discretion, to apply the Condemnation Proceeds against the
balance of the Obligations, whether or not due, in such manner as Bank shall elect. If a Default
shall occur hereunder, of if Mortgagor shall fail diligently to pursue and complete the
reconstruction, Bank may, in its sole discretion, apply any undisbursed Condemnation Proceeds and
any of Mortgagors deposits against the balance of the Obligations, whether or not due, in such
manner as Bank shall elect.
Notwithstanding the foregoing, provided that all of the following conditions are fully
satisfied by Mortgagor, Bank shall not apply Condemnation Proceeds to the Obligations if such
application would be adverse to any swap agreement entered by Mortgagor in connection with Loan:
(i) no default or event which, with the giving of notice or the passage of time, or both, would
constitute a default shall have occurred under any Loan Document; (ii) no lease of the Property is
cancelable or terminable by the tenant or Mortgagor on account of the Condemnation or, if it is,
the tenant or Mortgagor (as applicable) has waived in writing its right to cancel; (iii) Mortgagor
has paid as and when due all of Banks costs and expenses incurred in connection with the
collection and disbursement of Condemnation Proceeds, including without limitation, inspection,
monitoring, engineering and legal fees; if not paid on demand, at Banks option, such costs may be
deducted from the disbursements made by Bank or added to the sums secured by this Mortgage; and
(iv) such other terms and conditions as Bank may reasonably require. In
Page 6
the event the application of such Condemnation Proceeds would be adverse to any swap agreement
entered into by Mortgagor in connection with the Loan, and the above conditions are fully
satisfied, Bank shall place the Condemnation Proceeds in a restricted account, in which restricted
account Bank shall have a perfected security interest, until such time as the application of such
Condemnation Proceeds to the Obligations would not be adverse to any swap agreement.
Environmental Condition of Property and Indemnity.
Mortgagor warrants and represents to Bank,
except as reported by Mortgagor to Bank in writing (including any environmental reports provided to
Bank), that: (i) Mortgagor has inspected and is familiar with the environmental condition of the
Property; (ii) to Mortgagors knowledge, after diligent inquiry, the Property and Mortgagor, and
any occupants of the Property, are in compliance with and shall continue to be in compliance with
all applicable federal, state and local laws and regulations intended to protect the environment
and public health and safety as the same may be amended from time to time (Environmental Laws);
(iii) to Mortgagors knowledge, after diligent inquiry, the Property is not and has never been used
to generate, handle, treat, store or dispose of, in any quantity, oil, petroleum products,
hazardous or toxic substances, hazardous waste, regulated substances or hazardous air pollutants
(Hazardous Materials) in violation of any Environmental Laws; (iv) to Mortgagors knowledge,
after diligent inquiry, no Hazardous Materials (including asbestos, mold or lead paint in any form)
are located on or under the Property or emanate from the Property; (v) there are no unregistered
underground storage tanks on the Property that are subject to any underground storage tank
registration laws or regulations; (vi) no notice has been received by Mortgagor with regard to any
Hazardous Material on the Property; (vii) no action, investigation or proceeding is pending or to
Mortgagors knowledge threatened which seeks to enforce any right or remedy against Mortgagor or
the Property under any Environmental Law; and (viii) all licenses, permits and other governmental
or regulatory actions necessary for the Property to comply with Environmental Laws shall be
obtained and maintained and Mortgagor shall assure compliance therewith.
Further, Mortgagor represents to Bank that no portion of the Property is a protected wetland.
Mortgagor agrees to notify Bank immediately upon receipt of any citations, warnings, orders,
notices, consent agreements, process or claims alleging or relating to violations of any
Environmental Laws or to the environmental condition of the Property and shall conduct and complete
all investigations and all cleanup actions necessary to comply with the Environmental Laws and to
remove, in accordance with Environmental Laws, any Hazardous Material from the Property.
Mortgagor shall indemnify, hold harmless, and defend Bank from and against any and all
damages, penalties, fines, claims, suits, liabilities, costs, judgments and expenses, including
reasonable attorneys, consultants or experts fees of every kind and nature incurred, suffered by
or asserted against Bank as a direct or indirect result of: (i) representations made by Mortgagor
in this Section being or becoming untrue in any material respect; (ii) Mortgagors violation of or
failure to meet the requirements of any Environmental Laws; or (iii) Hazardous Materials which,
while the Property is subject to this Mortgage, exist on the Property. Bank shall have the right
to arrange for or conduct environmental inspections of the Property from time to time (including
the taking of soil, water, air or material samples). The cost of such inspections made after
Default (as hereinafter defined) or which are required by laws or regulations applicable to Bank
shall be borne by Mortgagor. However, Mortgagors indemnity shall not apply to any negligent or
intentional act of Bank which takes place before or after foreclosure or satisfaction of this
Mortgage. These indemnification obligations are in addition to General Indemnification provisions
set forth hereafter. Mortgagors Obligations under this section shall continue, survive and remain
in full force and effect notwithstanding the repayment of the Obligations, a foreclosure of or
exercise of power of sale under this instrument, a delivery of a deed in lieu of foreclosure, a
cancellation or termination of record of this instrument and the transfer of the Property.
Appraisals.
Mortgagor agrees that Bank may obtain an appraisal of the Property when required
by the regulations of the Federal Reserve Board or the Office of the Comptroller of the Currency,
or any other regulatory agency or at such other times as Bank may reasonably require. Such
appraisals shall be performed by an independent third party appraiser selected by Bank. The cost
of such appraisals shall be borne by Mortgagor. If requested by Bank, Mortgagor shall execute an
engagement letter addressed to the appraiser selected by Bank. Mortgagors failure or refusal to
sign such an engagement letter, however, shall not impair Banks right to obtain such an appraisal.
Mortgagor agrees to pay the cost of such appraisal within 10 days after receiving an invoice for such appraisal.
Page 7
Inspections.
Bank, or its representatives or agents, are authorized to enter at any
reasonable time upon any part of the Property for the purpose of inspecting the Property and for
the purpose of performing any of the acts it is authorized to perform under the terms of this
Mortgage.
Liens and Subrogation.
Mortgagor shall pay and promptly discharge all liens, claims and
encumbrances upon the Property. Mortgagor shall have the right to contest in good faith the
validity of any such lien, claim or encumbrance, provided: (i) such contest suspends the
collection thereof or there is no danger of the Property being sold or forfeited while such contest
is pending; (ii) Mortgagor first deposits with Bank a bond or other security satisfactory to Bank
in such amounts as Bank shall reasonably require; and (iii) Mortgagor thereafter diligently
proceeds to cause such lien, claim or encumbrance to be removed and discharged.
Bank shall be subrogated to any liens, claims and encumbrances against Mortgagor or the
Property that are paid or discharged through payment by Bank or with loan proceeds, notwithstanding
the record cancellation or satisfaction thereof.
Waiver of Mortgagors Rights.
To the fullest extent permitted by law, Mortgagor waives the
benefit of all laws now existing or that hereafter may be enacted providing for (i) any
appraisement before sale of any portion of the Property, (ii) in any way extending the time for the
enforcement of the collection of the Note or the debt evidenced thereby or any of the other
Obligations, and any rights to hearing prior to the exercise by Bank of any right, power, or remedy
herein provided to Bank.
To the full extent Mortgagor may do so, Mortgagor agrees that Mortgagor will not at any time
insist upon, plead, claim or seek to take the benefit or advantage of any law now or hereafter in
force providing for any exemption (including homestead exemption), appraisement, valuation, stay,
extension or redemption, and Mortgagor for themselves and their respective heirs, devisees,
representatives, successors and assigns, and for any and all persons claiming any interest in the
Property, to the extent permitted by law, hereby waive and release all rights of valuation,
appraisement, redemption, stay of execution, the benefit of all exemption laws, notice of election
to mature or declare due the whole of the secured indebtedness and marshalling in the event of
foreclosure of the liens hereby created. Mortgagor further waives any and all notices other than
those required under any Loan Document, including, without limitation, notice of intention to
accelerate and of acceleration of the Obligations.
Payments by Bank.
In the event of Default (as hereinafter defined) in the timely payment or
performance of any of the Obligations, Bank, at its option and without any duty on its part to
determine the validity or necessity thereof, may pay the sums for which Mortgagor is obligated.
Further, Bank may pay such sums as Bank deems appropriate for the protection and maintenance of the
Property including, without limitation, sums to pay Impositions and other levies, assessments or
liens, maintain insurance, make repairs, secure the Property, maintain utility service, intervene
in any condemnation and pay attorneys fees and other fees and costs to enforce this Mortgage or
protect the lien hereof (including foreclosure) or collect the Obligations, without limitation,
including those incurred in any proceeding including bankruptcy or arbitration. Any amounts so
paid shall bear interest at the default rate stated in the Note and shall be secured by this
Mortgage.
Indemnification.
Mortgagor shall protect, indemnify and save harmless Bank from and against
all losses, liabilities, obligations, claims, damages, penalties, fines, causes of action, costs
and expenses (including, without limitation, reasonable attorneys fees and expenses)
(collectively, Damages) imposed upon, incurred by or asserted or assessed against Bank on account
of or in connection with (i) the Loan Documents or any failure or alleged failure of Mortgagor to
comply with any of the terms of, or the inaccuracy or breach of any representation in, the Loan
Documents; (ii) the Collateral or any claim of loss or damage to the Property or any injury or
claim of injury to, or death of, any person or property that may be occasioned by any cause
whatsoever pertaining to the Property or the use, occupancy or operation thereof, (iii) any failure
or alleged failure of Mortgagor to comply with any law, rule or regulation applicable
Page 8
to it or to the Property or the use, occupancy or operation of the Property (including,
without limitation, the failure to pay any taxes, fees or other charges), provided that such
indemnity shall be effective only to the extent of any Damages that may be sustained by Bank in
excess of any net proceeds received by it from any insurance of Mortgagor (other than
self-insurance) with respect to such Damages, (iv) any Damages whatsoever by reason of any alleged
action, obligation or undertaking of Bank relating in any way to or any matter contemplated by the
Loan Documents, (v) any claim for brokerage fees or such other commissions relating to the Property
or any other Obligations, or (vi) any and all liability arising from any leases related to the
Property. Nothing contained herein shall require Mortgagor to indemnify Bank for any Damages
resulting from Banks gross negligence or its willful and wrongful acts. The indemnity provided
for herein shall survive payment of the Obligations and shall extend to the officers, directors,
employees and duly authorized agents of Bank. In the event the Bank incurs any Damages arising out
of or in any way relating to the transaction contemplated by the Loan Documents (including any of
the matters referred to in this section), the amounts of such Damages shall be added to the
Obligations, shall bear interest, to the extent permitted by law, at the interest rate borne by the
Obligations from the date incurred until paid and shall be payable on demand.
Assignment of Rents.
Mortgagor hereby absolutely assigns and transfers to Bank all the
leases, rents, issues and profits of the Property (collectively Rents). Although this assignment
is effective immediately, so long as no Default exists, Bank gives to and confers upon Mortgagor
the privilege under a revocable license to collect as they become due, but not prior to accrual,
the Rents and to demand, receive and enforce payment, give receipts, releases and satisfactions,
and sue in the name of Mortgagor for all such Rents. Mortgagor represents there has been no prior
assignment of leases or Rents, and agrees not to further assign such leases or Rents. Upon any
occurrence of Default, the license granted to Mortgagor herein shall be automatically revoked
without further notice to or demand upon Mortgagor, and Bank shall have the right, in its
discretion, without notice, by agent or by a receiver appointed by a court, and without regard to
the adequacy of any security for the Obligations, (i) to enter upon and take possession of the
Property, (ii) notify tenants, subtenants and any property manager to pay Rents to Bank or its
designee, and upon receipt of such notice such persons are authorized and directed to make payment
as specified in the notice and disregard any contrary direction or instruction by Mortgagor, and
(iii) in its own name, sue for or otherwise collect Rents, including those past due, and apply
Rents, less costs and expenses of operation and collection, including reasonable attorneys fees,
to the Obligations in such order and manner as Bank may determine or as otherwise provided for
herein. Banks exercise of any one or more of the foregoing rights shall not cure or waive any
Default or notice of Default hereunder.
Due on Sale or Further Encumbrance or Transfer of an Interest in Mortgagor.
Without the prior
written consent of Bank in each instance, Mortgagor shall not (i) sell, convey, transfer or
encumber the Property, or any part thereof or interest therein, whether legal or equitable, (ii)
cause or permit any transfer of the Property or any part thereof, whether voluntarily,
involuntarily or by operation of law, or (iii) enter into any agreement or transaction to transfer,
or accomplish in form or substance a transfer, of the Property. A transfer of the Property
includes: (a) the direct or indirect sale, transfer or conveyance of the Property or any portion
thereof or interest therein; (b) the execution of an installment sale contract or similar
instrument affecting all or any portion of the Property; (c) if Mortgagor or any general partner or
member of Mortgagor, is a corporation, partnership, limited liability company, trust or other
business entity, the transfer, pledge, assignment or encumbrance (whether in one transaction or a
series of transactions) of any stock, partnership, limited liability company or other ownership
interests in such corporation, partnership, limited liability company or entity including, without
limitation, changes in stockholders, partners, members, managers, trustees, beneficiaries, or their
respective interests; whether directly or indirectly; provided, however, that the pledge of
Mortgagors stock pursuant to that certain First Lien Credit Agreement, among SPANISH BROADCASTING
SYSTEM, INC., a Delaware corporation d/b/a SPANISH BROADCASTING SYSTEM OF DELAWARE, INC.
(Guarantor), as borrower, MERRILL LYNCH, PIERCE FENNER & SMITH, INCORPORATED, as syndication
agent, Bank, as documentation agent, LEHMAN COMMERCIAL PAPER INC., as administrative agent and
other lenders, as lenders, dated as of June 10, 2005 (as same may be amended, modified, extended or
replaced from time to time, the Senior Credit Facility) shall not be deemed a transfer; (d) if
Mortgagor, or any general partner or member of Mortgagor, is a corporation, the creation or
issuance of new stock by which an aggregate of
Page 9
more than 10% of such corporations stock shall be vested in a party or parties who are not now
stockholders; and (e) an agreement by Mortgagor leasing all or a substantial part of the Property
for other than actual occupancy by a space tenant thereunder or a sale, assignment or other
transfer of or the grant of a security interest in and to any Leases. Notwithstanding anything to
the contrary contained herein, Mortgagor may transfer (i) up to forty-nine percent (49%) of the
stock of Mortgagor so long as Guarantor owns, directly or indirectly, at least fifty-one percent
(51%) of the issued and outstanding shares of Mortgagor and maintains control of the day to day
business operations of Mortgagor and so long as Guarantor continues to guaranty the obligations of
Mortgagor under the Note, this Mortgage and other Loan Documents, or (ii) subject to the
immediately preceding subsection (i), shares of publicly traded stock in Guarantor.
Banks consent to any conveyance or encumbrance may be conditioned upon an increase in the
interest rate specified in the Note (or other Obligations), an extension or curtailment of the
maturity of the Obligations, or other modification of the Note or this instrument.
Notwithstanding the foregoing Mortgagor may lease the Property to affiliates of Borrower,
which lease(s) shall be subordinate to Banks rights pursuant to a subordination and attornment
agreement in a form acceptable to Bank in its sole and absolute discretion. The terms of such
lease(s) shall be subject to Banks reasonable approval.
Remedies of Bank on Default.
Failure of Mortgagor or any other person liable to timely pay or
perform, after the expiration of any applicable grace or cure periods set forth in the Loan
Documents, any of the Obligations is a default (Default) under this Mortgage. Upon the
occurrence of Default the following remedies are available, without limitation, to Bank: (i) Bank
may exercise any or all of Banks remedies under this Mortgage or other Loan Documents including,
without limitation, acceleration of the maturity of all payments and Obligations, other than
Obligations under any swap agreements (as defined in 11 U.S.C. § 101, as in effect from time to
time) with Bank or any of its affiliates, which shall be due in accordance with and governed by the
provisions of said swap agreements; (ii) Bank may take immediate possession of the
Property or any part thereof (which Mortgagor agrees to surrender to Bank) and manage, control or
lease the same to such persons and at such rental as it may deem proper and collect and apply Rents
to the payment of: (a) the Obligations, together with all costs and reasonable attorneys fees;
(b) all Impositions and any other levies, assessments or liens which may be prior in lien or
payment to the Obligations, and premiums for insurance, with interest on all such items; and (c)
the cost of all alterations, repairs, replacements and expenses incident to taking and retaining
possession of the Property and the management and operation thereof; all in such order or priority
as Bank in its sole discretion may determine. The taking of possession shall not prevent
concurrent or later proceedings for the foreclosure sale of the Property; (iii) Bank may apply to
any court of competent jurisdiction for the appointment of a receiver for all purposes including,
without limitation, to manage and operate the Property or any part thereof, and to apply the Rents
therefrom as hereinabove provided. In the event of such application, Mortgagor consents to the
appointment of a receiver, and agrees that a receiver may be appointed without notice to Mortgagor,
without regard to whether Mortgagor has committed waste or permitted deterioration of the Property,
without regard to the adequacy of any security for the Obligations, and without regard to the
solvency of Mortgagor or any other person, firm or corporation who or which may be liable for the
payment of the Obligations; (iv) Bank may exercise all the remedies of a mortgagee as provided by
law and in equity including, without limitation, foreclosure upon this Mortgage and sale of the
Property, or any part of the Property, at public sale conducted according to applicable law
(referred to as Sale) and conduct additional Sales as may be required until all of the Property
is sold or the Obligations are satisfied; (v) With respect to any portion of the Property governed
by the UCC, Bank shall have all of the rights and remedies of a secured party thereunder. Bank may
elect to foreclose upon any Property that is fixtures under law applicable to foreclosure of
interests in real estate or law applicable to personal property; (vi) Bank may bid at Sale and may
accept, as successful bidder, credit of the bid amount against the Obligations as payment of any
portion of the purchase price; and (vii) Bank shall apply the proceeds of Sale, first to any fees
or attorney fees permitted Bank by law in connection with Sale, second to expenses of foreclosure,
publication, and sale permitted Bank by law in connection with Sale, third to the Obligations, and
any remaining proceeds as required by law.
Page 10
Miscellaneous Provisions.
Mortgagor agrees to the following: (i) All remedies available to
Bank with respect to this Mortgage or available at law or in equity shall be cumulative and may be
pursued concurrently or successively. No delay by Bank in exercising any remedy shall operate as a
waiver of that remedy or of any Default. Any payment by Bank or acceptance by Bank of any partial
payment shall not constitute a waiver by Bank of any Default; (ii) Mortgagor represents that
Mortgagor (a) is a corporation duly organized, validly existing and in good standing under the laws
of its state of organization, and is authorized to do business in each other jurisdiction wherein
its ownership of property or conduct of business legally requires such organization (b) has the
power and authority to own its properties and assets and to carry on its business as now being
conducted and as now contemplated; and (c) has the power and authority to execute, deliver and
perform, and by all necessary action has authorized the execution, delivery and performance of, all
of its obligations under this Mortgage and any other Loan Document to which it is a party; (iii)
The provisions hereof shall be binding upon and inure to the benefit of Mortgagor, its heirs,
personal representatives, successors and assigns including, without limitation, subsequent owners
of the Property or any part thereof, and shall be binding upon and inure to the benefit of Bank,
its successors and assigns and any future holder of the Note or other Obligations; (iv) Any
notices, demands or requests shall be sufficiently given Mortgagor if in writing and mailed or
delivered to the address of Mortgagor shown above or to another address as provided herein and to
Bank if in writing and mailed or delivered to Wachovia Bank, National Association, Mail Code
VA7628, P. O. Box 13327, Roanoke, VA 24040 or Wachovia Bank, National Association, Mail Code
VA7628, 10 South Jefferson Street, Roanoke, VA 24011, or such other address as Bank may specify
from time to time and in the event that Mortgagor changes Mortgagors address at any time prior to
the date the Obligations are paid in full, that party shall promptly give written notice of such
change of address by registered or certified mail, return receipt requested, all charges prepaid.
Notices to Bank must include the mail code. (v) This Mortgage may not be changed, terminated or
modified orally or in any manner other than by an instrument in writing signed by the parties
hereto; (vi) All references to Bank shall mean to Bank (for itself and its affiliate); (vii)
The captions or headings at the beginning of each paragraph hereof are for the convenience of the
parties and are not a part of this Mortgage; (viii) If the lien of this Mortgage is invalid or
unenforceable as to any part of the Obligations, the unsecured portion of the Obligations shall be
completely paid (and all payments made shall be deemed to have first been applied to payment of the
unsecured portion of the Obligations) prior to payment of the secured portion of the Obligations
and if any clause, provision or obligation hereunder is determined invalid or unenforceable the
remainder of this Mortgage shall be construed and enforced as if such clause, provision or
obligation had not been contained herein; (ix) This Mortgage shall be governed by and construed
under the laws of the jurisdiction where this Mortgage is recorded; (x) Mortgagor by execution and
Bank by acceptance of this Mortgage agree to be bound by the terms and provisions hereof.
Final
Agreement.
This Agreement and the other Loan Documents represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the parties.
Waiver of Bankruptcy Stay.
MORTGAGOR HEREBY AGREES, IN CONSIDERATION OF THE RECITALS AND MUTUAL
COVENANTS CONTAINED HEREIN, AND FOR OTHER GOOD AND VALUABLE CONSIDERATION, INCLUDING THE EXTENSION
OF THE LOAN, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THAT IN THE EVENT THAT
MORTGAGOR SHALL FILE WITH ANY BANKRUPTCY COURT OF COMPETENT JURISDICTION OR BE THE SUBJECT OF ANY
PETITION UNDER TITLE 11 OF THE UNITED STATES CODE THE AUTOMATIC STAY IMPOSED BY SECTION 362 OF
TITLE 11 OF THE UNITED STATES CODE IS WAIVED, AND SUCH WAIVER CONSTITUTES CAUSE PURSUANT TO 11
U.S.C. SECTION 362(d)(1) FOR THE IMMEDIATE LIFTING OF THE AUTOMATIC STAY IN FAVOR OF BANK, AND
MORTGAGOR HEREBY KNOWINGLY AND IRREVOCABLY WAIVES ALL DEFENSES AND OBJECTIONS TO SUCH LIFTING OF
THE AUTOMATIC STAY.
[EXECUTION APPEARS ON FOLLOWING PAGE]
Page 11
IN WITNESS WHEREOF
, Mortgagor has duly signed and sealed this instrument as of the day
and year first above written.
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Signed, sealed and
delivered
in the presence of:
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Mortgagor
SBS MIAMI BROADCAST CENTER, INC., a
Delaware corporation
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/s/ Melanie M. Montenegro
Print Name: Melanie M. Montenegro
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By: /s/ Joseph A. Garcia
Joseph A. Garcia, Executive Vice President
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/s/ Jose Molina
Print Name: Jose Molina
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State of Florida
County of Miami-Dade
The foregoing instrument was acknowledged this day by Joseph A. Garcia, as Executive Vice
President of SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation on behalf of the corporation,
who is personally known to me or who has produced ___as identification.
Witness my hand and official seal, this ___day of December, 2006.
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______________________________, Notary Public
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Notary Seal
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______________________________
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(Printed Name of Notary)
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Commission Expires: ___________________________
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Commission Number: ___________________________
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Page 12
Exhibit
10.4
UNCONDITIONAL GUARANTY
January 4, 2007
SBS MIAMI BROADCAST CENTER, INC., a Delaware corporation
2601 S. Bayshore Drive
PH II
Coconut Grove, Florida 33133
(Hereinafter referred to as Borrower)
SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation
d/b/a SPANISH BROADCASTING SYSTEM OF DELAWARE, INC.
2601 S. Bayshore Drive
PH II
Coconut Grove, Florida 33133
(Hereinafter referred to as Guarantor)
Wachovia Bank, National Association
225 Water Street
Jacksonville, Florida 32202
(Hereinafter referred to as Bank)
To induce Bank to make, extend or renew loans, advances, credit, or other financial accommodations
to or for the benefit of Borrower, which are and will be to the direct interest and advantage of
the Guarantor, and in consideration of loans, advances, credit, or other financial accommodations
made, extended or renewed to or for the benefit of Borrower, which are and will be to the direct
interest and advantage of the Guarantor, Guarantor hereby absolutely, irrevocably and
unconditionally guarantees to Bank and its successors, assigns and affiliates the timely payment
and performance of all liabilities and obligations of Borrower to Bank and its affiliates,
including, but not limited to, all obligations under that certain Promissory Note dated of even
date herewith made by Borrower to the order of Bank in the original principal amount of
$7,650,000.00 (as the same may be amended or modified from time to time, the Note), that certain
Loan Agreement between Borrower and Bank dated of even date herewith (as the same may be amended or
modified from time to time, the Loan Agreement), that certain Mortgage, Assignment of Rents and
Security Agreement from Borrower in favor of Bank, to be recorded in the Public Records of
Miami-Dade County, Florida (as the same may be amended, modified, increased or extended from time
to time, the Mortgage) and the Loan Documents, as defined below, and all obligations of Borrower
to Bank or any of its affiliates under any swap agreement (as defined in 11 U.S.C. § 101, as in
effect from time to time), however and whenever incurred or evidenced, whether primary, secondary,
direct, indirect, absolute, contingent, due or to become due, now existing or hereafter contracted
or acquired, and all modifications, extensions and renewals thereof, (collectively, the Guaranteed
Obligations).
Guarantor further covenants and agrees:
GUARANTORS LIABILITY.
This Guaranty is a continuing and unconditional guaranty of payment and
performance and not of collection. The parties to this Guaranty are jointly and severally
obligated together with all other parties obligated for the Guaranteed Obligations. This Guaranty
does not impose any obligation on Bank to extend or continue to extend credit or otherwise deal
with Borrower at any subsequent time. This Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of the Guaranteed Obligations is
rescinded, avoided or for any other reason must be returned by Bank, and the returned payment shall
remain payable as part of the Guaranteed Obligations, all as though such payment had not been made.
Except to the extent the provisions of this
Guaranty give Bank additional rights, this Guaranty shall not be deemed to supersede or replace any
other guaranties given to Bank by Guarantor; and the obligations guaranteed hereby shall be in
addition to any other obligations guaranteed by Guarantor pursuant to any other agreement of
guaranty given to Bank and other guaranties of the Guaranteed Obligations.
TERMINATION OF GUARANTY.
Guarantor may terminate this Guaranty only by written notice, delivered
personally to or received by certified or registered United States Mail by an authorized officer of
Bank at the address for notices provided herein. Such termination shall be effective only with
respect to Guaranteed Obligations arising more than 15 days after the date such written notice is
received by said Bank officer. Such termination shall not be effective with respect to Guaranteed
Obligations (including any subsequent extensions, modifications or compromises of the Guaranteed
Obligations) then existing, or Guaranteed Obligations arising subsequent to receipt by Bank of said
notice if such Guaranteed Obligations are a result of Banks obligation to make advances pursuant
to a commitment, or are based on Borrowers obligations to make payments pursuant to any swap
agreement (as defined in 11 U.S.C. § 101, as in effect from time to time), entered into prior to
expiration of the 15 day notice period, or are a result of advances which are necessary for Bank to
protect its collateral or otherwise preserve its interests. Termination of this Guaranty by any
single Guarantor will not affect the existing and continuing obligations of any other Guarantor
hereunder.
CONSENT TO MODIFICATIONS.
Guarantor
consents and agrees that Bank (and, with respect to swap
obligations, its affiliates) may from time to time, in its sole discretion, without affecting,
impairing, lessening or releasing the obligations of Guarantor hereunder:
(a) extend or modify the
time, manner, place or terms of payment or performance and/or otherwise change or modify the credit
terms of the Guaranteed Obligations; (b) increase, renew, or enter into a novation of the
Guaranteed Obligations; (c) waive or consent to the departure from terms of the Guaranteed
Obligations; (d) permit any change in the business or other dealings and relations of Borrower or
any other guarantor with Bank; (e) proceed against, exchange, release, realize upon, or otherwise
deal with in any manner any collateral that is or may be held by Bank in connection with the
Guaranteed Obligations or any liabilities or obligations of Guarantor; and (f) proceed against,
settle, release, or compromise with Borrower, any insurance carrier, or any other person or entity
liable as to any part of the Guaranteed Obligations, and/or subordinate the payment of any part of
the Guaranteed Obligations to the payment of any other obligations, which may at any time be due or
owing to Bank; all in such manner and upon such terms as Bank may deem appropriate, and without
notice to or further consent from Guarantor. No invalidity, irregularity, discharge or
unenforceability of, or action or omission by Bank relating to any part of the Guaranteed
Obligations or any security therefor shall affect or impair this Guaranty.
WAIVERS AND ACKNOWLEDGMENTS. Guarantor waives and releases the following rights, demands, and
defenses
Guarantor may have with respect to Bank (and, with respect to swap obligations, its
affiliates) and collection of the Guaranteed Obligations: (a) promptness and diligence in
collection of any of the Guaranteed Obligations from Borrower or any other person liable thereon,
and in foreclosure of any security interest and sale of any property serving as collateral for the
Guaranteed Obligations; (b) any law or statute that requires that Bank (and, with respect to swap
obligations, its affiliates) make demand upon, assert claims against, or collect from Borrower or
other persons or entities, foreclose any security interest, sell collateral, exhaust any remedies,
or take any other action against Borrower or other persons or entities prior to making demand upon,
collecting from or taking action against Guarantor with respect to the Guaranteed Obligations,
including any such rights Guarantor might otherwise have had under any applicable law; (c) any law
or statute that requires that Borrower or any other person be joined in, notified of or made part
of any action against Guarantor; (d) that Bank or its affiliates preserve, insure or perfect any
security interest in collateral or sell or dispose of collateral in a particular manner or at a
particular time, provided that Banks obligation to dispose of Collateral in a commercially
reasonable manner is not waived hereby; (e) notice of extensions, modifications, renewals, or
novations of the Guaranteed Obligations, of any new transactions or other relationships between
Bank, Borrower and/or any guarantor, and of changes in the financial condition of, ownership of, or
business structure of Borrower or any other guarantor; (f) presentment, protest, notice of
dishonor, notice of
Page 2
default, demand for payment, notice of intention to accelerate maturity, notice of acceleration of
maturity, notice of sale, and all other notices of any kind whatsoever to which Guarantor may be
entitled other than notices required hereunder or required under any of the other Loan Documents;
(g) the right to assert against Bank or its affiliates any defense (legal or equitable), set-off,
counterclaim, or claim that Guarantor may have at any time against Borrower or any other party
liable to Bank or its affiliates; (h) all defenses relating to invalidity, insufficiency,
unenforceability, enforcement, release or impairment of Bank or its affiliates lien on any
collateral, of the Loan Documents, or of any other guaranties held by Bank; (i) any right to which
Guarantor is or may become entitled to be subrogated to Bank or its affiliates rights against
Borrower or to seek contribution, reimbursement, indemnification, payment or the like, or
participation in any claim, right or remedy of Bank or its affiliates against Borrower or any
security which Bank or its affiliates now has or hereafter acquires, until such time as the
Guaranteed Obligations have been fully satisfied beyond the expiration of any applicable preference
period; (j) any claim or defense that acceleration of maturity of the Guaranteed Obligations is
stayed against Guarantor because of the stay of assertion or of acceleration of claims against any
other person or entity for any reason including the bankruptcy or insolvency of that person or
entity; and (k) the right to marshalling of Borrowers assets or the benefit of any exemption
claimed by Guarantor. Guarantor acknowledges and represents that Guarantor has relied upon
Guarantors own due diligence in making an independent appraisal of Borrower, Borrowers business
affairs and financial condition, and any collateral; Guarantor will continue to be responsible for
making an independent appraisal of such matters; and Guarantor has not relied upon Bank or its
affiliates for information regarding Borrower or any collateral.
FINANCIAL CONDITION.
Guarantor warrants, represents and covenants to Bank and its affiliates that
on and after the date hereof: (a) the fair saleable value of Guarantors assets exceeds its
liabilities, Guarantor is meeting its current liabilities as they mature, and Guarantor is and
shall remain solvent; (b) all financial statements of Guarantor furnished to Bank are correct in
all material respects and accurately reflect the financial condition of Guarantor as of the
respective dates thereof; (c) since the date of such financial statements, there has not occurred a
material adverse change in the financial condition of Guarantor that would materially and adversely
affect the ability of Guarantor to perform its obligations hereunder; (d) there are not now pending
any court or administrative proceedings or undischarged judgments against Guarantor, no federal or
state tax liens have been filed or threatened against Guarantor, and Guarantor is not in default or
claimed default under any agreement that would materially and adversely affect the ability of
Guarantor to perform its obligations hereunder; and (e) at such reasonable times as Bank requests,
Guarantor will furnish Bank and its affiliates with such other financial information as Bank and
its affiliates may reasonably request.
INTEREST AND APPLICATION OF PAYMENTS.
Regardless of any other provision of this Guaranty or other
Loan Documents, if for any reason the effective interest on any of the Guaranteed Obligations
should exceed the maximum lawful interest, the effective interest shall be deemed reduced to and
shall be such maximum lawful interest, and any sums of interest which have been collected in excess
of such maximum lawful interest shall be applied as a credit against the unpaid principal balance
of the Guaranteed Obligations. Prior to the occurrence of a Default, monies received from any
source by Bank or its affiliates for application toward payment of the Guaranteed Obligations may
be applied to such Guaranteed Obligations as required under the Loan Documents, and after the
occurrence of a Default, monies received from any source by Bank or its affiliates for application
toward payment of the Guaranteed Obligations may be applied to such Guaranteed Obligations in any
manner or order deemed appropriate by Bank and its affiliates.
DEFAULT.
If any of the following events occur, a default (Default) under this Guaranty shall
exist: (a) failure of timely payment or performance of the Guaranteed Obligations, a default under
any Loan Document, or a default under any other contract or agreement of Guarantor with Bank or its
affiliates, beyond any applicable grace or cure periods, whether now existing or hereafter arising;
(b) a breach of any agreement or representation by Guarantor contained or referred to in the
Guaranty, or any of the Loan Documents, or contained in any other contract or agreement of
Guarantor with Bank or its affiliates, whether now existing or hereafter arising; (c) the
dissolution of, termination of existence of, loss of good
Page 3
standing status by, appointment of a receiver for, assignment for the benefit of creditors of, or
the commencement of any insolvency or bankruptcy proceeding by or against Guarantor that is not
dissolved or dismissed within forty-five (45) days and/or (d) any default in payment or performance
of any obligation under that certain First Lien Credit Agreement, among Guarantor, as borrower,
MERRILL LYNCH, PIERCE FENNER & SMITH, INCORPORATED, as syndication agent, Bank, as documentation
agent, LEHMAN COMMERCIAL PAPER INC., as administrative agent and other lenders, as lenders, dated
as of June 10, 2005 (as same may be amended, modified, extended or replaced from time to time, the
Senior Credit Facility) that is not waived and continues beyond any applicable grace and cure
periods.
If a Default occurs, the Guaranteed Obligations shall be due immediately and payable without
notice, other than Guaranteed Obligations under any swap agreements (as defined in 11 U.S.C. § 101,
as in effect from time to time) with Bank or its affiliates, which shall be due in accordance with
and governed by the provisions of said swap agreements, and, Bank and its affiliates may exercise
any rights and remedies as provided in this Guaranty and other Loan Documents, or as provided at
law or equity. Guarantor shall pay interest on the Guaranteed Obligations from such Default at the
highest rate of interest charged on any of the Guaranteed Obligations.
ATTORNEYS FEES AND OTHER COSTS OF COLLECTION.
Guarantor shall pay all of Banks and its
affiliates reasonable expenses incurred to enforce or collect any of the Guaranteed Obligations,
including, without limitation, reasonable arbitration, paralegals, attorneys and experts fees
and expenses, whether incurred without the commencement of a suit, in any suit, arbitration, or
administrative proceeding, or in any appellate, or bankruptcy proceeding.
SUBORDINATION OF OTHER DEBTS.
Guarantor agrees: (a) to subordinate the obligations now or
hereafter owed by Borrower to Guarantor (Subordinated Debt) to any and all obligations of
Borrower to Bank or its affiliates now or hereafter existing while this Guaranty is in effect,
provided however that Guarantor may receive regularly scheduled principal and interest payments on
the Subordinated Debt so long as (i) all sums due and payable by Borrower to Bank and its
affiliates have been paid in full on or prior to such date, and (ii) no event or condition which
constitutes or which with notice or the lapse or time would constitute a Default with respect to
the Guaranteed Obligations shall be continuing on or as of the payment date; (b) Guarantor will
either place a legend indicating such subordination on every note, ledger page or other document
evidencing any part of the Subordinated Debt or deliver such documents to Bank; and (c) except as
permitted by this paragraph, Guarantor will not request or accept payment of or any security for
any part of the Subordinated Debt, and any proceeds of the Subordinated Debt paid to Guarantor,
through error or otherwise, shall immediately be forwarded to Bank by Guarantor, properly endorsed
to the order of Bank, to apply to the Guaranteed Obligations.
MISCELLANEOUS. Assignment.
This Guaranty and other Loan Documents shall inure to the benefit of
and be binding upon the parties and their respective heirs, legal representatives, successors and
assigns. Banks interests in and rights under this Guaranty and other Loan Documents are freely
assignable, in whole or in part, by Bank to an Eligible Assignee upon thirty (30) days prior
notice to Borrower. For purposes hereof, Eligible Assignee shall mean a AA rated commercial
bank, finance company, insurance company or other financial institution that is engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in
the ordinary course of its business. Upon the occurrence of a Default, or unless required by
federal regulations, Banks interest in and rights under this Guaranty and other Loan Documents are
freely assignable, in whole or in part, by Bank. Any assignment shall not release Guarantor from
the Guaranteed Obligations.
Organization; Powers.
Guarantor (i) is a corporation duly organized,
validly existing and in good standing under the laws of its state of organization, and is
authorized to do business in each other jurisdiction wherein its ownership of property or conduct
of business legally requires such organization, (ii) has the power and authority to own its
properties and assets and to carry on its business as now being conducted and as now contemplated;
and (iii) has the power and authority to execute, deliver and perform, and by all necessary action
has authorized the execution, delivery and performance of, all of its obligations under this
Guaranty and any other Loan Document to which it is a party.
Applicable Law; Conflict Between
Page 4
Documents.
This Guaranty shall be governed by and construed under the laws of the state named in
Banks address shown above without regard to that states conflict of laws principles. If the
terms of this Guaranty should conflict with the terms of any commitment letter that survives
closing, the terms of this Guaranty shall control.
Jurisdiction.
Guarantor irrevocably agrees to
non-exclusive personal jurisdiction in the state named in Banks address shown above.
Severability.
If any provision of this Guaranty or of the other Loan Documents shall be prohibited
or invalid under applicable law, such provision shall be ineffective but only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision or the remaining
provisions of this Guaranty or other Loan Documents.
Notices.
Any notices to Guarantor shall be
sufficiently given if in writing and mailed or delivered to Guarantors address shown above or such
other address as provided hereunder, with a copy to Greenberg Traurig, P.A., 1221 Brickell Avenue,
Miami, Florida 33131, Attn: Joel Goldman, Esq., and to Bank, if in writing and mailed or delivered
to Wachovia Bank, National Association, Mail Code VA7628, P.O. Box 13327, Roanoke, VA 24040 or
Wachovia Bank, National Association, Mail Code VA7628, 10 South Jefferson Street, Roanoke, VA 24011
or such other address as Bank may specify in writing from time to time. Banks failure to send
such courtesy copy to Guarantors counsel shall not in any way be deemed a failure to properly
deliver notice to Borrower. Notices to Bank must include the mail code. In the event that
Guarantor changes Guarantors address at any time prior to the date the Guaranteed Obligations are
paid in full, Guarantor agrees to promptly give written notice of said change of address to Bank by
registered or certified mail, return receipt requested, all charges prepaid.
Plural; Captions.
All references in the Loan Documents to borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case may be, and the term person shall
mean any individual person or entity. The captions contained in the Loan Documents are inserted
for convenience only and shall not affect the meaning or interpretation of the Loan Documents.
Binding Contract.
Guarantor by execution of and Bank by acceptance of this Guaranty agree that
each party is bound to all terms and provisions of this Guaranty.
Amendments, Waivers and
Remedies.
No waivers, amendments or modifications of this Guaranty and other Loan Documents shall
be valid unless in writing and signed by an officer of Bank. No waiver by Bank or its affiliates
of any Default shall operate as a waiver of any other Default or the same Default on a future
occasion. Neither the failure nor any delay on the part of Bank or its affiliates in exercising
any right, power, or privilege granted pursuant to this Guaranty and other Loan Documents shall
operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or
further exercise or the exercise of any other right, power or privilege. All remedies available to
Bank or its affiliates with respect to this Guaranty and other Loan Documents and remedies
available at law or in equity shall be cumulative and may be pursued concurrently or successively.
Loan Documents.
The term Loan Documents refers to all documents executed in connection with or
related to the Guaranteed Obligations and may include, without limitation, the Note, the Loan
Agreement, the Mortgage, and any amendments or supplements.
LIMITATION ON LIABILITY; WAIVER OF
PUNITIVE DAMAGES.
EACH OF THE PARTIES HERETO, INCLUDING BANK BY ACCEPTANCE HEREOF, AGREES THAT IN
ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY BETWEEN OR AMONG THEM
THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED
HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR, (1) INDIRECT,
SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY
EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY
ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME
IS RESOLVED BY ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE.
Final Agreement.
This Agreement
and the other Loan Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no unwritten oral agreements between the parties.
FINANCIAL COVENANTS.
Guarantor agrees to the following provisions from the date hereof until final
payment in full of the Guaranteed Obligations, unless Bank shall otherwise consent in writing,
using the financial information for Guarantor, its subsidiaries, affiliates and its holding or
parent company, as
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applicable:
Deposit Relationship.
Guarantor shall maintain a depository relationship with Bank.
Liquidity Requirement.
Guarantor shall, at all times, maintain Available Liquidity of not less
than 1.2 times the then outstanding principal balance of the Loan. For the purposes hereof,
Available Liquidity shall mean the aggregate of (i) total unpledged cash, and (ii) unpledged Cash
Equivalents (as defined herein). Cash and Cash Equivalents held in all partnerships or trusts will
not contribute to the calculation of Available Liquidity unless and until the Guarantor
demonstrates, in form satisfactory to Bank, in Banks reasonable discretion, that it has an
uncontested legal right to use said cash and Cash Equivalents to satisfy its obligations at will
and without approval by any third party. Cash Equivalents shall mean readily marketable,
publicly traded securities meeting one of the following criteria: (i) shares of common or preferred
stock traded on the NYSE, AMEX, or NASDAQ with a share price greater than $10.00, (ii) debt
instruments rated BBB or higher by Moodys Investors Service (or receiving an equivalent rating
from another recognized rating agency), (iii) mutual fund shares containing shares of common or
preferred stock traded on the NYSE, AMEX, or NASDAQ with a share price greater than $10.00 or debt
instruments rated BBB or higher by Moodys Investors Service (or receiving an equivalent rating
from another recognized rating agency), or (iv) such other securities as may be acceptable to Bank
in Banks reasonable discretion. In the event the Guarantor fails to provide Bank with evidence of
such Available Liquidity within ten (10) days of Banks written request, such failure shall
constitute a Default hereunder, under the Note and under the other Loan Documents.
FINANCIAL AND OTHER INFORMATION.
Guarantor shall deliver to Bank such information as Bank may
reasonably request from time to time, including without limitation, financial statements and
information pertaining to Guarantors financial condition. Such information shall be true,
complete, and accurate in all material respects.
ANNUAL FINANCIAL STATEMENTS.
Guarantor shall deliver to Bank, within 90 days after the close of
each fiscal year, audited financial statements reflecting its operations during such fiscal year,
including, without limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules and in reasonable detail, prepared in conformity with generally
accepted accounting principles, applied on a basis consistent with that of the preceding year. All
such statements shall be examined by an independent certified public accountant reasonably
acceptable to Bank. The opinion of such independent certified public accountant shall not be
acceptable to Bank if qualified due to any limitations in scope imposed by Guarantor or any other
person or entity. Any other qualification of the opinion by the accountant shall render the
acceptability of the financial statements subject to Banks approval. Any filings with the United
States Securities and Exchange Commission are deemed to have been delivered to Lender upon filing.
WAIVER OF JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF GUARANTOR BY EXECUTION
HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS GUARANTY, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONNECTION WITH THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT TO BANK TO ACCEPT THIS GUARANTY
.
EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF SHALL
SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE PARTIES
CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN CONNECTION
WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS GUARANTY.
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IN WITNESS WHEREOF
, Guarantor, on the day and year first written above, has caused this
Unconditional Guaranty to be duly executed under seal.
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SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation d/b/a
SPANISH BROADCASTING SYSTEM OF DELAWARE, INC.
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By:
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/s/ Joseph A. Garcia
(SEAL)
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Joseph A. Garcia, Executive Vice President
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State of Florida
County of Miami-Dade
The foregoing instrument was acknowledged this day by Joseph A. Garcia, as Executive Vice
President of SPANISH BROADCASTING SYSTEM, INC., a Delaware corporation d/b/a SPANISH BROADCASTING
SYSTEM OF DELAWARE, INC. on behalf of the corporation, who is personally known to me or who has
produced ___as identification.
Witness my hand and official seal, this _____ day of December, 2006.
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______________________________, Notary Public
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Notary Seal
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______________________________
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(Printed Name of Notary)
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Commission Expires: ___________________________
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Commission Number: ___________________________
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