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CHESAPEAKE SECURITIES, INC.
SECONDARY PLEDGE AGREEMENT
THIS SECONDARY PLEDGE AGREEMENT (the "Secondary Pledge Agreement") is
executed as of February ___, 1996, by and between Chesapeake Securities, Inc.
(the "Company") and Jacor Communications, Inc., an Ohio corporation ("Jacor").
W I T N E S S E T H:
WHEREAS, Jacor is entering into that certain Credit Agreement dated as
of the date hereof with the Banks (as defined therein), the Co-Agents (as
defined therein) and the Agent (as modified, supplemented, amended, extended,
supplemented or restated from time to time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires Jacor to enter into certain Rate
Hedging Agreements (as defined in the Credit Agreement) with Interest Rate
Providers;
WHEREAS, the Company is a wholly-owned subsid- iary of Jacor;
WHEREAS, the Company expects to realize substantial direct and indirect
benefits as a result of Jacor entering into the Credit Agreement and the Rate
Hedging Agreements; and
WHEREAS, execution and delivery of this Secondary Pledge Agreement is a
condition precedent to the availability of credit under the Credit Agreement;
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NOW THEREFORE, in consideration of the foregoing and of the direct and
indirect benefits to be received by the Company, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement. The following term shall have the following meaning:
"Obligations" means, as to the Company, all obligations of the Company
under the Intercompany Demand Note executed by the Company, including, without
limitation, all unpaid principal of, accrued and unpaid interest on, and all
other amounts owing under, such Intercompany Demand Note (including all such
amounts which would become due but for the operation of the automatic stay under
Section 362(a) of the Federal Bankruptcy Code, 11 U.S.C. ss. 362(a), and the
operation of Sections 502(b) and 506(b) of the Federal Bankruptcy Code, 11
U.S.C. ss. 502(b) and 506(b)) and all obligations of the Company under each
Intercompany Acquisition Note executed by the Company, including, without
limitation, all unpaid principal of, accrued and unpaid interest on, and all
other amounts owing under any and all such Intercompany Acquisition Notes
(including all such amounts which would become due but for the operation of the
automatic stay under Section 362(a) of the Federal Bankruptcy Code, 11 U.S.C.
ss. 362(a), and the operation of Sections 502(b) and 506(b) of the Federal
Bankruptcy Code, 11 U.S.C. ss. 502(b) and ss. 506(b)).
2. Pledge and Security Interest; Deposit of Certificates for Pledged
Stock.
(a) Pledge and Security Interest. In order to secure the full and
complete payment and performance of the Obligations when due, the Company hereby
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pledges and grants to Jacor a continuing lien and security interest in (a) all
of the outstanding shares of capital stock of each Subsidiary of the Company
currently or hereafter owned by the Company (the "Pledged Stock"), (b) any
securities, dividends or other distributions and any other right or property at
any time in respect of or in exchange for any or all of the Pledged Stock and
any other property substituted or exchanged therefor and (c) any and all
proceeds (including, without limitation, "Proceeds" as defined in the Uniform
Commercial Code as in effect from time to time in the State of Illinois) of, and
substitutions and replacements for, the foregoing (all of the property and
rights described in the foregoing clauses (a) through (c) being herein
collectively called the "Collateral");
(b) Upon termination of the Primary Pledge Agreement, the Company
shall immediately deliver to Jacor the certificates representing the Pledged
Stock, endorsed in blank or accompanied by appropriate instruments of transfer
or assignments in blank, for the benefit of Jacor. Jacor shall not have any duty
to assure that all certificates representing the Pledged Stock have been
delivered to it or any obligation whatsoever with respect to the care, custody
or protection of any certificates which may be delivered to it except only to
exercise the same care in physically safekeeping such certificates as it would
exercise in the ordinary course of its own business. Jacor shall not be
obligated to preserve or protect any rights with respect to the Pledged Stock or
to receive or give any notice with respect thereto whether or not Jacor is
deemed to have knowledge of such matters.
3. Representations and Warranties. The Compa- ny represents and
warrants to Jacor that:
(a) Existence and Standing. As of the date hereof, the Company is
duly incorporated, validly
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existing and in good standing under the laws of its jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
(b) Authorization, Validity and Enforce- ability. The execution and
delivery by the Company of this Secondary Pledge Agreement have been duly
authorized by proper corporate proceedings, and this Secondary Pledge Agreement
constitutes a legal, valid and binding obligation of the Company and creates a
security interest which is enforceable against the Company in accordance with
its terms in respect of all now owned and hereafter acquired Collateral, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity. All of the shares of the Pledged Stock are duly
authorized, validly issued, fully paid and non-assessable.
(c) Transferability of Pledged Stock; Title Matters. The Pledged
Stock is free and clear of all liens, options, warrants, puts, calls, or other
rights of third persons, and restrictions, other than (i) those liens arising
under the Primary Pledge Agreement (ii) those liens arising under this Secondary
Pledge Agreement, and (iii) restrictions on transferability imposed by
applicable state and Federal securities laws or which may arise as a result of
the Company being subject to the Communications Act of 1934, as amended, and the
rules and regulations of the FCC thereunder. The Company agrees to warrant and
defend title to and ownership of the Pledged Stock and the lien created by this
Secondary Pledge Agreement against the claims of all Persons and maintain and
preserve such lien at all times during the terms of this Secondary Pledge
Agreement. Upon the delivery to Jacor of the Pledged Stock the security interest
in the Pledged Stock granted to Jacor hereunder will constitute a perfected
security interest
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therein superior and prior to all Liens other than Liens permitted by Section
6.17 of the Credit Agreement.
(d) Ownership of Pledged Stock. The Company is the holder of record
and the sole beneficial owner of 100% of the issued and outstanding voting
capital of each Subsidiary of the Company.
(e) Title and Power to Pledge the Pledged Stock. Subject to the
Primary Pledge Agreement, the Company has good and marketable title to the
Pledged Stock and has all requisite rights, power, and authority to execute,
deliver and comply with the terms of this Secondary Pledge Agreement and to
pledge and deliver the Collateral to Jacor pursuant hereto. Except as provided
in Section 5.3 of the Credit Agreement, no material authorization, consent or
approval of, and no notice to or filing with, any person or government agency
(other than as specified in Section 6 hereof) is required in connection with the
execution, delivery and performance of this Secondary Pledge Agreement which has
not been obtained.
4. Covenants. So long as any Obligations remain outstanding, the
Company covenants and agrees with Jacor as follows:
(a) Pledge and Additional Stock. If the Company shall at any time
acquire any additional shares of the capital stock of any class of the Pledged
Stock of any Subsidiary of the Company, whether such acquisition shall be by
purchase, exchange, reclassification, dividend, or otherwise, the Company shall,
to the extent doing so would not violate applicable law, forthwith (and without
the necessity for any request or demand by Jacor) deliver the certificates
representing such shares to Jacor, in the same manner as described in Section
2(b) hereof.
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(b) Applications, Approval and Consents. The Company will, at its
expense, promptly execute and deliver, or cause the execution and delivery of,
all applications, certificates, instruments, registration statements, and all
other documents and papers Jacor may reasonably request in connection with the
obtaining of any consent, approval, registration, qualification, or
authorization of the FCC or of any other Person necessary or appropriate for the
effective exercise of any rights under this Secondary Pledge Agreement. Without
limiting the generality of the foregoing, the Company agrees that in the event
that Jacor shall exercise its right to sell, transfer, or otherwise dispose of
or take any other action in connection with any of the Collateral pursuant to
this Secondary Pledge Agreement, the Company shall execute and deliver all
applications, certificates, and other documents that Jacor may reasonably
request and shall otherwise promptly, fully, and diligently cooperate with Jacor
and any other necessary Persons, in making any application for the prior consent
or approval of the FCC or any other Person to the exercise by Jacor of any of
such rights relating to all or any part of the Collateral. Furthermore, because
the Company agrees that Jacor's remedy at law for failure of the Company to
comply with the provisions of this Section 4(b) would be inadequate and that
such failure would not be adequately compensable in damages, the Company agrees
that the covenants of this Section 4(b) may be specifically enforced.
(c) Security Interest and Lien. Except as otherwise permitted by the
terms of the Credit Agreement or as otherwise contemplated by the Primary Pledge
Agreement, the Company will preserve, warrant, and defend the lien created
hereby in the Collateral against the claims of all Persons whomsoever; will not
at any time sell, assign, transfer or otherwise dispose of its right, title and
interest in and to any of the Collateral; will not at any time, directly or
indirectly, create, assume,
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or suffer to exist any lien, warrant, put, option, or other rights of third
Persons and restrictions, other than the liens created by this Secondary Pledge
Agreement, in and to the Collateral or any part thereof; and will not do or
suffer any matter or thing whereby the lien created by this Secondary Pledge
Agreement in and to the Collateral might or could be impaired.
(d) Further Assurances. The Company, at its expense, shall from time
to time execute and deliver to Jacor all such other assignments, certificates,
supplemental documents, and financing statements, and shall do all other acts or
things as Jacor may reasonably request in order to more fully create, evidence,
perfect, continue, and preserve the priority of the lien herein created or to
otherwise obtain the full benefits of this Secondary Pledge Agreement.
(e) Indebtedness; etc. The Company will not permit any Subsidiary of
the Company to incur any Indebtedness or permit any Liens (other than under the
Subsidiary Security Agreement, dated as of the date hereof, as amended) to exist
in respect of any such Subsidiary's assets except as permitted by the Credit
Agreement.
5. Rights of the Company and Jacor.
(a) Exercise of Stockholder Rights.
(i) Subject to the provisions of Section 6 hereof and the
provisions of the Primary Pledge Agreement, unless and until a Default
shall occur and be continuing or a default under any of the Citicasters L/C
Documents shall occur and be continuing, the Company shall be entitled to
receive all cash dividends or other
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distributions on the Pledged Stock (if and to the extent such dividends or
distributions are permitted by the terms of the Credit Agreement) except
(A) distributions made in capital stock on the Pledged Stock resulting from
stock dividends on or subdivision, combination, or reclassification or the
outstanding capital stock or any corporation; and (B) all sums paid on any
Pledged Stock upon liquidation or dissolution or reduction of capital,
repurchase, retirement, or redemption. All such sums, dividends,
distributions, proceeds, or property described in the immediately preceding
clauses (A) and (B) shall, if received by any Person other than Jacor, be
held in trust for the benefit of Jacor and shall forthwith be delivered to
Jacor for the benefit of Jacor (accompanied by proper instruments or
assignment and/or stock and/or bond powers executed by the Company in
accordance with Jacor's instructions) to be held subject to the terms of
this Secondary Pledge Agreement. Upon the occurrence of a Default, or a
default under any of the Citicasters L/C Documents, Jacor shall be entitled
to receive all payments of whatever kind made upon or with respect to any
Collateral.
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(ii) Unless a Default has occurred and is continuing or a default
under any of the Citicasters L/C Documents shall have occurred and be
continuing, the Company shall have the sole and exclusive right to vote and
give consents with respect to all the Collateral and to consent to, ratify,
or waive notice of any and all meetings. Upon the occurrence and during the
continuance of a Default or any default under any of the Citicasters L/C
Documents, subject to the provisions of the Primary Pledge Agreement and
subject to compliance with applicable law, Jacor shall have, subject to
Section 6 hereof, the right (A) to consent in advance to any vote proposed
to be cast by the Company with respect to any merger, consolidation,
liquidation or reorganization of any Subsidiary (but in no event with
respect to any election of directors) and, in connection therewith, to join
in and become a party to any plan of recapitalization, reorganization, or
readjustment (whether voluntary or involuntary) as shall seem desirable to
Jacor to protect or further their interests in respect of the Collateral,
(B) to deposit the Collateral under any such plan, and (C) to make any
exchange, substitution, cancellation, or surrender of the Collateral
required by any such
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plan and to take such action with respect to the Collateral as may be
required by any plan or for the accomplishment thereof; and no such
disposition, exchange, substitution, cancellation, or surrender shall be
deemed to constitute a release of the Collateral from the lien of this
Secondary Pledge Agreement.
(b) Right of Sale after Default. Upon the occurrence and during the
continuance of a Default or a default under any of the Citicasters L/C
Documents, subject to the provisions of the Primary Pledge Agreement and subject
to compliance with applicable law, Jacor may, subject to Section 6 hereof, sell,
without recourse to judicial proceedings, with the right to bid for and buy, the
Collateral or any part thereof, upon ten days' notice (which notice is agreed to
be reasonable notice for the purposes hereof) to the Company of the time and
place of sale, for cash, upon credit or for future delivery, at Jacor's option
and at Jacor's complete discretion:
(i) At public sale, including a sale at any broker's board or
exchange;
(ii) At private sale in any commercially reasonable manner which
will not require the Collateral, or any part thereof, to be registered in
accordance with the Securities Act of 1933, as amended, or the rules and
regulations promulgated thereunder, or any other law or regulation. Jacor
is also hereby authorized, but not obligated, to take such actions, give
such notices, obtain such consents, and do such other
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things as they may deem required or appropriate in the event of sale or
disposition of any of the Collateral, and the Company agrees that Jacor
shall not be liable or accountable to the Company for any discount allowed
by reason of the fact that such Collateral is sold in compliance with any
applicable limitation or restriction of any governmental regulatory
authority or official. The Company understands that Jacor may in its
discretion approach a restricted number of potential purchasers and that
sale under such circumstances may yield a lower price for the Collateral,
or any portion thereof, than would otherwise be obtainable if the same were
registered and sold in the open market. The Company agrees that in the
event Jacor shall so sell the Collateral, or any portion thereof, at such
private sale or sales, Jacor shall have the right to rely upon the advice
and opinion of any Person who regularly deals in or evaluates stock of the
type constituting the Collateral as to the price obtainable in a
commercially reasonable manner upon such a private sale thereof.
In the case of any sale by Jacor of the Collateral on credit or
for future delivery, the Collateral sold may be retained by Jacor until the
selling price is paid by the purchaser, but Jacor shall not incur liability in
case of failure of
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the purchaser to take up and pay for the Collateral so sold.
In connection with the sale of any of the Collateral, Jacor is
authorized, but not obligated, to limit prospective purchasers to the extent
deemed necessary or desirable by Jacor to render such sale exempt from the
registration requirements of the Securities Act of 1933, as amended, and any
applicable state securities laws. In the event that, in the opinion of Jacor, it
is necessary or advisable to have such securities registered under the
provisions of such Act, or any similar law relating to the registration of
securities, the Company agrees, at its own expense, to (i) execute and deliver
all such instruments and documents, and to do or cause to be done such other
acts and things, as may be necessary or, in the opinion of Jacor, advisable, to
register such securities under the provisions of such Act or any applicable
similar law relating to the registration of securities, and the Company will use
its best efforts to cause the registration statement relating thereto to become
effective and to remain effective for such period as Jacor shall reasonably
request, and to make all amendments thereof and/or to the related prospectus
which, in the opinion of Jacor, are necessary or desirable, all in conformity
with the requirements of such Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto; (ii) use its best efforts
to qualify such securities under state "blue sky" or securities laws, all as
reasonably requested by Jacor; (iii) at the request of Jacor, indemnify and hold
Jacor and any underwriters (and employees, officers, agents, attorneys and
accountants (collectively, the "Indemnified Parties")) harmless from and against
any loss, liability, claim, damage, and expense (including, without limitation,
reasonable fees of counsel incurred in connection therewith) under such Act or
otherwise, insofar as such loss, liability, claim, damage, or expense arises out
of or is based upon any untrue statement or alleged untrue statement of any
material fact fur-
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nished by the Company contained in any registration statement under which such
securities were registered under such Act or other securities laws, any
preliminary prospectus or final prospectus contained therein, or arise out of or
are based upon any omission or alleged omission by the Company to state therein
a material fact required to be stated or necessary to make the statements
therein not misleading, such indemnification to remain operative regardless of
any investigation made by or on behalf of any Indemnified Party; provided,
however, that the Company shall not be liable in any case to the extent that any
such loss, liability, claim, damage, or expense arises out of or is based upon
an untrue statement or alleged untrue statement or an omission or an alleged
omission made in reliance upon and in conformity with written information
furnished to the Company by an Indemnified Party specifically for use in such
registration statement or preliminary or final prospectus; (iv) cause each such
issuer to make available to its security holders, as soon as practicable, an
earnings statement that will satisfy the provisions of Section 11(a) of such
Act; and (v) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law.
(c) Other Rights after a Default. Sub- ject to Section 6 hereof and
subject to the provisions of the Primary Pledge Agreement, upon the occurrence
and during the continuance of a Default or a default under the Citicasters L/C
Documents, Jacor may exercise any and all rights available to secured parties
under the Uniform Commercial Code as enacted in the State of Illinois or other
applicable jurisdiction, as amended, in addition to any and all other rights
afforded at law, in equity, or otherwise.
(d) Application of Proceeds. Jacor shall apply the proceeds of the
Collateral, including the
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proceeds of any sales of other disposition of the Collateral, or any part
thereof, under this Section 5, in the following order unless a court of
competent jurisdiction shall otherwise direct:
(i) FIRST, to payment of all reasonable costs and expenses of
Jacor incurred in connection with the collection and enforcement of the
Obligations or of the security interest granted pursuant to this Secondary
Pledge Agreement;
(ii) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other
than principal) owing to Jacor;
(iii) THIRD, to payment of the principal of the Obligations
owing to Jacor; and
(iv) FOURTH, the balance, if any, after all of the Obligations
have been satisfied, shall be remitted to the Company.
(e) Governance. All rights and remedies available to Jacor with
respect to the grant, foreclosure and enforcement of the security interest and
lien granted hereby and with respect to any action permitted hereunder may be
exercised solely by Jacor and its successors and assignees.
6. Control, Limitation of Rights.
(a) Notwithstanding anything herein to the contrary, this Secondary
Pledge Agreement, the other Loan Documents and the transactions contemplated
hereby and thereby do not and will not constitute the transfer,
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assignment, or disposition in any manner, voluntarily or involuntarily, directly
or indirectly, of any license at any time issued by the FCC to any Subsidiary
("License"), or the transfer of control of any such Subsidiary within the
meaning of Section 310 of the Communications Act of 1934, as amended.
(b) Notwithstanding any other provision of this Secondary Pledge
Agreement, any foreclosure on, sale, transfer or other disposition of, or the
exercise of any right to vote or consent with respect to, any of the Collateral
as provided herein or any other action taken or proposed to be taken by Jacor
hereunder which would affect the operational, voting, or other control of any
Subsidiary, shall be pursuant to Section 310 of the Communications Act of 1934,
as amended, to any applicable state laws and to the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior approval of the FCC.
(c) Subject to Section 6(e) hereof and subject to the provisions of
the Primary Pledge Agreement, if a Default or a default under any of the
Citicasters L/C Documents shall have occurred and be continuing, the Company
shall take any action which Jacor may reasonably request in order to transfer
and assign to Jacor, or to such one or more third parties as Jacor may
designate, or to a combination of the foregoing, each License. To enforce the
provisions of this Section 6, Jacor is empowered to request the appointment of a
receiver from any court of competent jurisdiction. Such receiver shall be
instructed to seek from the FCC an involuntary transfer control of each such
License for the purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. The Company hereby agrees to authorize such an
involuntary transfer of control upon the request of the receiver so appointed
and, if the Company shall refuse to authorize the transfer, the Company's
approval may be required by the court.
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Upon the occurrence and continuance of a Default or a default under any the
Citicasters L/C Documents, the Company shall further use its best efforts to
assist in obtaining approval of the FCC, if required, for any action or
transactions contemplated by this Secondary Pledge Agreement including, without
limitation, the preparation, execution and filing with the FCC of the assignor's
or transferor's portion of any application or applications for consent to the
assignment of any License or transfer of control necessary or appropriate under
the FCC's rules and regulations for approval of the transfer or assignment of
any portion of the Collateral, together with any License.
(d) The Company acknowledges that the assignment or transfer of each
License is integral to Jacor's realization of the value of the Collateral, that
there is no adequate remedy at law for failure by the Company to comply with the
provisions of this Section 6 and that such failure would not be adequately
compensable in damages, and therefore agrees that the agreements contained in
this Section 6 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Secondary Pledge Agreement or in any other Loan Document, Jacor shall not,
without first obtaining the approval of the FCC, take any action pursuant to
this Secondary Pledge Agreement which would constitute or result in any
assignment of a License or any change of control of any License or any
Subsidiary if such assignment or change in control would require, under then
existing law (including the written rules and regulations promulgated by the
FCC), the prior approval of the FCC.
7. Miscellaneous.
(a) Term. This Secondary Pledge Agree- ment and the lien arising
hereunder (i) shall become
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effective as of the date hereof upon the execution hereof, and (ii) shall
continue in force until no Obligations to Jacor shall be outstanding and the
Commitments shall have been terminated. If no Obligations remain outstanding and
the Commitments have been terminated, Jacor, at the request and sole expense of
the Company, shall execute and deliver such documents and instruments as may be
necessary to evidence such termination and release.
(b) Releases; Partial Releases. Any cash dividends received by the
Company in accordance with the terms of Section 5(a)(i) hereof, shall be deemed
released from the lien of this Secondary Pledge Agreement and shall be held by
the Company (or any transferee of the Company) free and clear of the lien
created by this Secondary Pledge Agreement. Upon termination of this Pledge
Agreement in accordance with the provisions of Section 7(a) hereof, Jacor shall,
at the Company's request and expense and subject to the foregoing sentence,
execute such release as the Company may reasonably request, in form and upon
terms acceptable to Jacor in all respects, and shall deliver, without any
representations, warranties or recourse of any kind whatsoever (other than the
representation and warranty that such property is free and clear of Liens
created by Jacor, all certificates representing the Pledged Stock and other
property held in respect thereof hereunder which is in the Jacor's possession,
together with all stock powers or other instruments of transfer reasonably
required to effect delivery to the Company.
(c) Waivers. Except to the extent expressly otherwise provided
herein or in any Loan Document, the Company waives, to the extent permitted by
applicable law, (i) any right to require Jacor to proceed against any other
person, to exhaust their rights in any other collateral, or to pursue any other
right which Jacor may have, (ii) with respect to the Obligations, presentment
and demand for payment, protest, notice of
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protest and non-payment, and notice of the intention to accelerate, and (iii)
all rights of marshalling in respect of any and all of the Collateral. The
Company expressly waives any and all defenses now or hereafter arising or
asserted by reason of (a) any disability or other defense of any of the Company
or any other Person with respect to the Obligations, (b) the unenforceability or
invalidity of any security or guaranty for the Obligations or the lack of
perfection or continuing perfection or failure of priority of any security for
the Obligations, (c) the cessation for any cause whatsoever of the liability of
any of the Company or any other Person (other than by reason of the full payment
and performance of all Obligations), (d) any failure of Jacor to marshal assets
in favor of any Person, (e) any failure of Jacor to give notice of sale or other
disposition to any Person or any defect in any notice that may be given in
connection with any sale or disposition, (f) any act or omission of Jacor or
others that directly or indirectly results in or aids the discharge or release
of any of the Company or any other Person of the Obligations or any other
security or guaranty therefor by operation of Law or otherwise, (g) any law
which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects more burdensome than that of the
principal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligations or (h) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Company, whether or
not the Company shall have had notice or knowledge of any act or omission
referred to in the foregoing clauses (a) through (h) of this paragraph. The
Company expressly waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance,
protests, notices of protest, notices of dishonor and all other notices or
demands of any kind or nature whatsoever with respect to the Obligations, and
all notices of acceptance of this
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Secondary Pledge Agreement or of the existence, creation or incurring of new or
additional Obligations.
(d) Financing Statement. Jacor shall be entitled at any time to file
this Secondary Pledge Agreement or a carbon, photographic, or other reproduction
of this Secondary Pledge Agreement, as a financing statement, but the failure of
Jacor to do so shall not impair the validity or enforceability of this Secondary
Pledge Agreement.
(e) Amendments. This Secondary Pledge Agreement may be amended only
by an instrument in writing executed jointly by the Company and Jacor, and
supplemented only by documents delivered or to be delivered in accordance with
the express terms hereof, provided, however, that any release of all or any
substantial portion of the Collateral from the lien created hereby shall be
effective only if approved in accordance with Section 8.2 of the Credit
Agreement.
(f) GOVERNING LAW. THIS SECONDARY PLEDGE AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH THE PROVISIONS OF, THE INTERNAL LAWS (AND
NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS.
(g) Parties Bound; Assignment. This Secondary Pledge Agreement shall
be binding on the Company and its successors and assigns and shall inure to the
benefit of Jacor and their respective successors and assigns.
(h) Notices. Any notice required or permitted to be given under this
Secondary Pledge Agreement shall be in writing and may be, and shall be deemed,
given, if mailed, three days after the date when deposited in the United States
mail, postage prepaid, or if by telegraph or telex, when delivered to the
appropriate office for transmission, charges prepaid, or if by per-
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▇▇▇▇▇ delivery or by telecopy, when received, addressed to the Company (with a
copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ provided, however, that the failure to
provide any such copy shall not affect the validity or sufficiency of any such
notice) and to Jacor at the address indicated below its signature hereto. Both
the Company and Jacor may change the address for service of notice upon it by a
notice in writing to the other party hereto.
(i) Waiver of Subrogation. The Company hereby irrevocably waives any
claim or other rights which it may now or hereafter acquire against Jacor or any
other Person that arise from the existence, payment, performance or enforcement
of the Company's obligations under this Secondary Pledge Agreement or any other
Loan Document, including any right of subrogation, reimbursement, exoneration,
or indemnification, including the right to take or receive from Jacor or any
other Person, directly or indirectly, in cash or other property or by set-off or
in any manner, payment or security on account of such claim or other rights. If
any amount shall be paid to the Company in violation of the preceding sentence
and the Obligations shall not have been paid in cash in full and the Commitments
have not been terminated, such amount shall be deemed to have been paid to the
Company for the benefit of, and held in trust for Jacor and shall forthwith be
paid to Jacor to be credited and applied upon the Obligations, whether matured
or unmatured. The Company acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the Credit Agreement
and the Rate Hedging Agreements and that the waiver set forth in this Section is
knowingly made in contemplation of such benefits.
(j) Counterparts. This Secondary Pledge Agreement may be executed in
any number of counterparts,
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all of which taken together shall constitute one agreement, and either of the
parties hereto may execute this Secondary Pledge Agreement by signing any such
counterpart. This Secondary Pledge Agreement shall be effective when it has been
executed by the Company and Jacor.
(k) Loan Document. This Secondary Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
(l) Section Captions. Section captions used in this Secondary Pledge
Agreement are for convenience of reference only and shall not affect the
construction of this Secondary Pledge Agreement.
(m) Severability. Wherever possible each provision of this Secondary
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Secondary Pledge
Agreement.
(n) WAIVER OF JURY TRIAL. EACH OF JACOR AND THE COMPANY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS SECONDARY PLEDGE AGREEMENT. THE COMPANY ACKNOWLEDGES
AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS
PROVISION AND THAT THIS PROVISION.
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IN WITNESS WHEREOF, the undersigned have executed this Secondary
Pledge Agreement as of the date first above written.
CHESAPEAKE SECURITIES, INC.
By:
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Title:
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1300 PNC Center
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Attention: President
JACOR COMMUNICATIONS, INC.
By:
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Title:
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1300 PNC Center
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