PLEDGE OF MEMBERSHIP INTERESTS AGREEMENT
This PLEDGE AGREEMENT is entered into as of September 30, 1997,
among (i) ▇▇▇▇▇▇▇▇▇▇ COMMUNICATIONS COMPANY, a Delaware corporation (the
"Pledgor"); (ii) each of the wholly-owned limited liability company
subsidiaries of the Pledgor, KTUL LLC, KATV LLC, and WCIV LLC
(collectively, the "Subsidiary LLCs" and each an "Subsidiary LLC") party
hereto, and (iii) BANKBOSTON, N.A. (f/k/a The First National Bank of
Boston), as Agent for the Secured Parties (as defined below) (in such
capacity, the "Agent").
RECITALS
WHEREAS, the Pledgor and the Agent are parties to that certain
Revolving Credit Agreement, dated as of April 16, 1996 (as amended and
in effect from time to time, the "Credit Agreement"), among the Pledgor,
the financial institutions which are now, or hereafter may become,
parties to the Credit Agreement as lenders (the "Banks"), and
BankBoston, N.A., as agent for the Banks (the "Agent");
WHEREAS, the Pledgor, the Banks and the Agent desire to enter into
that certain Modification Letter Agreement dated as of September 30,
1997, by and among the Pledgor, the Banks and the Agent (the
"Modification Agreement"), which Modification Agreement shall amend the
Credit Agreement, and pursuant to which the Banks shall consent to the
merger of those certain Subsidiaries (the "Merged Subsidiaries") into
the Subsidiary LLCs;
WHEREAS, the Pledgor has pledged and granted to the Agent, for the
benefit of the Agent and the Banks party to the Credit Agreement, a
security interest on certain of its assets and stocks of the Merged
Subsidiaries pursuant to, among other things, a Pledge Agreement dated
as of April 16, 1996, (as amended and in effect from time to time, the
"Original Stock Pledge Agreement"); and
WHEREAS, it is a condition precedent to the Banks' entering
into the Modification Agreement that the Pledgor execute and deliver
to the Agent, for the benefit of the Banks and the Agent, a pledge
agreement in substantially the form hereof, pledging the membership
interests of each Subsidiary LLC; and
WHEREAS, the Pledgor wishes to grant pledges of the membership
interest of each of the Subsidiary LLCs in favor of the Agent, for
the benefit of the Banks and the Agent, as herein provided.
NOW, THEREFORE, in consideration of the premises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Accordingly, the parties hereto hereby agree as follows:
1. DEFINITIONS
1.1. Certain Terms. The following terms, when used in this
Agreement, including the introductory paragraph and Recitals hereto,
shall, unless the context otherwise requires, have the following
meanings:
"Agent" is defined in the first paragraph of the Recitals hereto.
"Agreement" means this Pledge Agreement.
"Banks" is defined in the first paragraph of the Recitals hereto.
"Credit Agreement" is defined in the first paragraph of the
Recitals hereto.
"Distributions" means all dividends, liquidating dividends, units
of Membership Interest resulting from splits, combinations,
reclassifications, mergers, consolidations, warrants, options, non-cash
dividends and other dividends or distributions (whether similar or
dissimilar to the foregoing) on or with respect to any Pledged Units or
other units of Membership Interests constituting Pledged Collateral, but
shall not mean Dividends.
"Dividends" means cash dividends, cash distributions, or other
property made out of capital surplus, owing or payable to the Pledgor
with respect to any Pledged Units.
"Instrument" means any contract, agreement, indenture, mortgage or
other document or writing (whether a formal agreement, letter or
otherwise) under which any obligation is evidenced, assumed or
undertaken, or any right to any security interest or other lien is
granted or perfected.
"Membership Interests" means any units, interests, participation
or other equivalents (howsoever designated) of limited liability company
membership interests or any options, warrants or other rights to
subscribe for, or to purchase, or to convert any Property into, or
exchange any property for, any such membership interests, options,
warrants or other rights.
"Merged Subsidiaries" is defined in the second paragraph of the
Recitals hereto.
"Modification Agreement" is defined in the second paragraph of the
Recitals hereto.
"Obligations" is defined in the Credit Agreement.
"Original Stock Pledge Agreement" is defined in the fourth
paragraph of the Recitals hereto.
"Permitted Dividends" means any Dividends with respect to any
Pledged Units made out of capital surplus, to the extent that such
Dividends are permitted by the Credit Agreement.
"Pledged Collateral" is defined in 2.1.
"Pledged Unit Issuer" means, with respect to the Pledged Units
identified on Attachment 1, the Person identified as the issuer of such
Pledged Units on Attachment 1, and any other limited liability company
becoming a Pledged Unit Issuer hereunder after the date hereof.
"Pledged Units" means all or substantially all of the units of
Membership Interest which are delivered or required to be delivered by
the Pledgor to the Agent for the purpose of pledge hereunder.
"Pledgor" is defined in the introductory paragraph hereto.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, and whether tangible or intangible.
"Secured Parties" means, collectively, the Agent and the Banks.
"Subsidiary LLC" is defined in the introductory paragraph hereto.
"U.C.C." means the Uniform Commercial Code as in effect in The
Commonwealth of Massachusetts.
1.2. Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Agreement,
including the introductory paragraph and Recitals hereto, that are
defined in the Credit Agreement shall have the meanings given to such
terms in the Credit Agreement.
1.3. U.C.C. Definitions. Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the
U.C.C. are used in this Agreement, including the introductory paragraph
and Recitals hereto, with such meanings.
1.4. General Provisions Relating to Definitions. Terms for
which meanings are defined in this Agreement shall apply equally to the
singular and plural forms of the term defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The term "including" means including, without
limiting the generality of any description preceding such term. Each
reference herein to any Person shall include a reference to such
Person's successors and assigns. References to any Instrument defined
in this Agreement refer to such Instrument as originally executed or, if
subsequently amended or supplemented from time to time, as so amended or
supplemented and in effect at the relevant time of reference thereto.
2. PLEDGE
2.1. Grant of Security Interest and Pledge. The Pledgor
hereby pledges, assigns, charges, mortgages, delivers and transfers
to the Agent, for the benefit of the Secured Parties, and hereby
grants to the Agent, for the benefit of the Secured Parties, a
continuing pledge and security interest in and to, all of the
following Property of such Pledgor, whether now owned or hereafter
acquired or existing (all of such Property being the "Pledged
Collateral"):
(a) all Pledged Units owned now or hereafter by the Pledgor;
(b) all Distributions from time to time received by such
Pledgor;
(c) except as provided in 4.3, all of the Pledgor's rights
and interests under the limited liability company agreement of each
Subsidiary LLC, including all voting and management rights and all
rights to grant or withhold consents or approvals;
(d) all other Property (including Dividends) that may from
time to time be delivered or be required to be delivered by such
Pledgor to the Agent for the purpose of pledge hereunder; and
(e) all products and proceeds of any of the foregoing.
2.2. Security for Obligations. This Agreement (and the Pledged
Collateral) secures the prompt payment in full and performance when due
of all and each of the Obligations of the Pledgor under the Credit
Agreement and the other Loan Documents. In addition, all advances,
charges, costs and expenses, including reasonable attorneys' fees,
incurred or paid by the Agent in exercising any right, power or remedy
conferred by this Agreement, or in the enforcement hereof, shall, to the
extent lawful, become a part of the Obligations secured hereby.
2.3. Pledge and Delivery of Pledged Collateral. All certificates
or instruments representing or evidencing any Pledged Collateral to be
delivered on the date hereof or hereafter shall be:
(a) delivered to and held by or on behalf of the Agent pursuant
hereto;
(b) in suitable form for transfer by delivery; and
(c) accompanied by all necessary instruments of transfer or
assignment (including, with respect to the Pledged Units, undated powers
of assignment), duly executed in blank, all in form and substance
satisfactory to the Agent.
The Pledgor shall deliver all of the Pledged Units owned by the Pledgor
to the Agent as of the date hereof. From and after the date hereof, the
Pledgor shall, immediately upon its receipt thereof, deliver or cause to
be delivered to the Agent in pledge hereunder any and all additional
units of Membership Interests of any Pledged Unit Issuer, and all other
Pledged Collateral (other than Permitted Dividends), issued, distributed
or sold to, or purchased or otherwise acquired by, the Pledgor. Upon
the formation by the Pledgor of any Subsidiary, the acquisition by the
Pledgor of or Investment by the Pledgor in any Person which as a result
of such acquisition or Investment becomes a Subsidiary of the Pledgor,
or the receipt by the Pledgor of any share of Capital Stock or units of
Membership Interest, as applicable, of any Subsidiary of the Pledgor,
the Pledgor shall, immediately upon such formation, acquisition,
Investment or receipt, deliver or cause to be delivered to the Agent in
pledge hereunder any and all shares of Capital Stock or units of
Membership Interest, as applicable, of such Subsidiary and all other
Pledged Collateral issued, distributed or otherwise delivered to, or
acquired by, the Pledgor in respect of or relating to such Capital Stock
or Membership Interests, as applicable. Each such Subsidiary shall,
immediately upon such formation, acquisition, Investment or receipt,
become a Pledged Unit Issuer and a Pledgor for all purposes of this
Agreement. The Pledgor shall take all other actions from time to time
requested by the Agent to grant to the Agent a first priority, perfected
security interest in all of the Pledged Collateral. The Agent shall
have the right at any time to exchange certificates or instruments
representing or evidencing any Pledged Units for certificates or
instruments of smaller or larger denominations.
As of the date hereof, the Agent shall deliver to the Pledgor
certificates, accompanied by any instruments of transfer, evidencing the
pledge of stock by KTUL Television, Inc., KATV Television, Inc., and
First Charleston Corp. pursuant to the Original Stock Pledge Agreement.
2.4. Waiver of Certain Provisions; Approval of Pledge. Each
Subsidiary LLC and the Pledgor irrevocably waive any and all provisions
of the Certificate of Formation that (a) prohibit, restrict, condition
or otherwise affect the grant hereunder of any lien, security interest,
or encumbrance on any of the Pledged Collateral or any enforcement
action which may be taken in respect of any such lien, security interest
or encumbrance, or (b) otherwise conflict with the terms of this
Agreement.
2.5. Continuing Security Interest; Transfer of Note. This
Agreement has created and shall create a continuing security interest in
all of the Pledged Collateral and shall:
(a) remain in full force and effect until the later of the
termination of all of the Commitments or payment in full in cash of each
of the Obligations;
(b) be binding upon the Pledgor, and the successors, transferees
and assigns of the Pledgor (provided that no Pledgor may assign any of
its obligations hereunder without the prior written consent of the
Agent); and
(c) inure to the benefit of the Secured Parties and their
successors, transferees and assigns.
Without limiting the foregoing clause (c), any Secured Party may assign
or otherwise transfer (in whole or in part) any Note, Loan or other
Obligation held by it to any other Person or entity in accordance with
the terms of the Credit Agreement, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted in this
Agreement or otherwise. Upon the later to occur of the termination of
all of the Commitments or the payment in full in cash of each of the
Obligations, the security interest granted herein by the Pledgor shall
terminate and all rights to the Pledged Collateral of the Pledgor shall
revert to the Pledgor. Upon any such termination of security interests,
the Agent will, at the sole expense of the Pledgor, deliver to the
Pledgor, without any representations, warranties or recourse of any kind
whatsoever, all certificates and instruments representing or evidencing
the Pledged Units, together with all other Pledged Collateral held by
the Agent hereunder, and will execute and deliver to the Pledgor such
documents as the Pledgor shall reasonably request to evidence such
termination.
2.5. Security Interest Absolute. All rights of the Agent and the
security interests granted hereunder, and all obligations of the Pledgor
hereunder, shall be absolute and unconditional, irrespective of, and
shall not be impaired or affected by:
(a) any lack of validity or enforceability of the Credit
Agreement, any other Loan Document, or any Instrument relating to any
thereof or to any of the Obligations;
(b) any change in the corporate existence, structure or
ownership of the Pledgor or its Subsidiaries, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting any
such Person or any Property of any such Person or any resulting release
or discharge of any Obligation contained in the Credit Agreement or any
other Loan Document;
(c) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any right
or remedy against the Pledgor, any other Pledgor or any other
Person under the provisions of the Credit Agreement or any other
Loan Document or any other Instrument relating to any thereof or
under any applicable law, or
(ii) to exercise any right or remedy against any Pledged
Collateral;
(d) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other
compromise, renewal, extension, acceleration or release with respect
thereto or with respect to the Pledged Collateral, or any other
amendment to, rescission, waiver or other modification of, or any
consent to any departure from, the Credit Agreement or any other Loan
Document or any other Instrument relating to any thereof;
(e) any increase, reduction, limitation, impairment or
termination of the Obligations for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and any defense or
set-off, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, non-genuineness, irregularity, compromise,
or unenforceability of, or any other event or occurrence affecting, any
of the Obligations (and the Pledgor hereby waives any right to or claim
of any such defense or set-off, counterclaim, recoupment or
termination);
(f) any sale, exchange, release or non-perfection of any Pledged
Collateral, or any release of or amendment to or waiver of or consent to
departure from any guaranty or collateral held by the Agent or any other
Secured Party securing or guaranteeing all or any of the Obligations;
(g) any defense, set-off or counterclaim which may at any time
be available to or be asserted by the Pledgor against any other Pledgor
or against any Secured Party; or
(h) any other circumstances which might otherwise constitute a
suretyship or other defense available to, or a legal or equitable
discharge of, the Pledgor.
3. REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties. The Pledgor hereby
represents and warrants to Agent, for the benefit of each of the
Secured Parties, as follows:
(a) Each of the Subsidiary LLCs is duly organized, validly
existing, and in good standing under the laws of the State of
Delaware and all other jurisdictions where each of the Subsidiary
LLCs does business; the Certificate of Formation are in full force
and effect; the Pledgor is a duly constituted member of each of the
Subsidiary LLCs pursuant to the Certificate of Formation; and the
Pledged Units of Membership Interest are validly issued, non-
assessable and, except as set forth in 3.1(g) hereof, fully paid
membership interests in each of the Subsidiary LLCs.
(b) No authorization, approval or other action by any
governmental authority or any member or creditor has been or will be
required either:
(i) for the pledge by the Pledgor of any Pledged Collateral
required to be pledged by the Pledgor under the terms of this Agreement,
for the execution, delivery or performance of this Agreement by the
Pledgor, or for the validity or enforceability of any such pledge or
this Agreement;
(ii) subject to 7.11, for the exercise by the Agent of the
voting or other rights provided for in this Agreement; or
(iii) except as may be required in connection with any
disposition of Pledged Units by applicable laws affecting the
offering and sale of securities generally, and subject to 7.11, for
the exercise by the Agent of any of the remedies in respect of the
Pledged Collateral purported to be pledged by the Pledgor pursuant to
this Agreement.
(c) The execution, delivery, and performance of this Agreement
and the transactions contemplated hereby (i) have been duly
authorized by all necessary proceedings on behalf of the Pledgor,
(ii) do not conflict with or result in any breach or contravention of
any applicable law, regulation, judicial order or decree to which the
Pledgor is subject, (iii) do not violate, conflict with, constitute a
default or event of default under, or result in any rights to
accelerate or modify any obligations under any agreement, instrument,
lease, mortgage or indenture to which the Pledgor is party or
subject, or to which any of its assets are subject.
(d) This Agreement has been duly executed and delivered by the
Pledgor and is the legal, valid, and binding obligation of the
Pledgor enforceable against the Pledgor in accordance with the terms
hereof except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any case or proceeding therefor may be brought.
(e) The Pledgor is the sole, direct, legal and beneficial
owner of all of the Pledged Units of Membership Interests pledged by
the Subsidiary LLCs hereunder, which Pledged Units of Membership
Interests constitutes one hundred percent (100%) of the Membership
Interest in each of the Subsidiary LLCs, and the Pledgor has good and
marketable title thereto, free and clear of any lien, security
interest, mortgage or other encumbrance, other than the liens and
security interest granted to the Agent hereunder, and the liens and
security interests hereunder constitute valid and perfected first
priority liens and security interests.
(f) KATV LLC's principal place of business is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇., ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, and the place where its records
concerning the Pledged Collateral are kept is located at
______________. KTUL LLC's principal place of business is at Lookout
Mountain, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and the place where its records
concerning the Pledged Collateral are kept is
____________________________. WCIV LLC's principal place of business
is ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and the place
where their records concerning the Pledged Collateral are kept is
located at ______________.
(g) The Pledgor has no obligation to make any contribution,
capital call or other payment to each of the Subsidiary LLCs with
respect to the Pledged Units of Membership Interests.
(h) The copy of the Certificate of Formation of each of the
Subsidiary LLCs attached hereto as Exhibit A is a true, correct, and
complete copy thereof, and the Certificate of Formation has not been
amended or modified in any respect, except for such amendments or
modifications as are attached to the copy thereof delivered to the
Agent.
4 COVENANTS.
4.1. Affirmative Covenants of the Pledgor. The Pledgor covenants and
agrees with the Agent, for the benefit of each of the Secured Parties,
and warrants that, until the later of the termination of all the
Commitments or the payment in full in cash of each of the Obligations,
the Pledgor will:
4.1.1. Defend the right and title herein granted unto the Agent
in and to the Pledged Collateral purported to be pledged by the Pledgor
hereunder (and all right, title and interest represented or evidenced by
such Pledged Collateral) against the claims and demands of any other
Person; promptly execute and deliver all further Instruments and other
assurances, and take, or cause to be taken, all further action, at the
expense of the Pledgor, that may be necessary or desirable, or that the
Agent may request, in order to perfect or protect any security interest
purported to be granted by the Pledgor under this Agreement or to enable
the Agent to exercise or enforce its rights and remedies hereunder with
respect to any Pledged Collateral purported to be pledged by the Pledgor
hereunder; and furnish to the Agent all such financing statements,
certificates, legal opinions and other documents, and obtain all such
authorizations and approvals as the Agent may request in order to give
full effect to this Agreement and to maintain, preserve, safeguard and
continue at all times all or any of the rights, remedies, powers and
privileges of the Agent under this Agreement.
4.1.2. From time to time upon the request of the Agent, (a)
promptly deliver to the Agent such powers of assignment, Instruments and
similar documents, satisfactory in form and substance to the Agent, with
respect to the Pledged Collateral purported to be pledged by the Pledgor
hereunder as the Agent may request, and (b) during the continuance of
any Event of Default, promptly transfer any Pledged Units or other units
of Membership Interests constituting any such Pledged Collateral into
the name of any nominee designated by the Agent.
4.1.3. Keep pledged to the Agent pursuant hereto all Pledged
Units and all other units of Membership Interests constituting Pledged
Collateral, and all other Pledged Collateral required to be pledged by
the Pledgor hereunder.
4.1.4. Deliver (properly endorsed where required hereby or
requested by the Agent) to the Agent:
(a) promptly upon receipt thereof by the Pledgor, all Dividends
(other than Permitted Dividends), Distributions and other cash payments
and other proceeds received by the Pledgor in respect of the Pledged
Collateral purported to be pledged by the Pledgor hereunder, all of
which shall be held by the Agent as additional Pledged Collateral for
use in accordance with 6.2; and
(b) if any Event of Default is continuing, promptly upon request
of the Agent, such proxies and other documents as may be necessary to
allow the Agent to exercise the voting power with respect to any share
of Capital Stock (including Pledged Units) constituting Pledged
Collateral purported to be pledged by the Pledgor hereunder.
All (i) Dividends, Distributions, cash payments and proceeds which may
at any time and from time to time be held by the Pledgor, but which is
then required to be delivered to the Agent and (ii) additional Pledged
Units received by the Pledgor, shall, in each case, until delivery to
the Agent, be held by the Pledgor holding or receiving such Pledged
Collateral separate and apart from its other Property in trust for the
Agent.
4.1.5. The Pledgor will comply with all laws, regulations,
judicial orders or decrees applicable to the Pledged Collateral or
any portion thereof, and perform and observe its duties under the
Certificate of Formation or other governing documents with respect to
the Pledged Units of Membership Interest.
4.1.6. The Pledgor will cause each of the Subsidiary LLCs to
(i) keep and maintain at its own cost and expense at its principal
place of business or the location where Pledged Collateral is to be
kept, as indicated in Section 3.1(f), satisfactory and complete
records of the Pledged Collateral including a record of all payments
received and all other dealings of a material nature with the Pledged
Collateral, and (ii) ▇▇▇▇ its books and records pertaining to the
Pledged Collateral to evidence this Agreement and the liens and
security interests granted hereby.
4.1.7. The Pledgor will pay promptly when due any taxes,
assessments, and governmental charges or levies imposed upon the
Pledged Collateral or in respect of its income or profits therefrom,
as well as all claims of any kind except that no such charge need be
paid if (i) the validity thereof is being diligently contested in
good faith by appropriate proceedings; (ii) such proceedings do not
involve any danger of the sale, forfeiture, or loss of any of the
Pledged Collateral or any interest therein; and (iii) such charge is
adequately reserved against in a manner acceptable to the Agent.
4.1.8. The Pledgor shall do or cause to be done all things
necessary to preserve, renew and keep in full force and effect the
legal existence of each of the Subsidiary LLCs, the power and
authority of each of the Subsidiary LLCs to own its property and
carry on its business, the qualification of and each of the
Subsidiary LLCs to do business in its jurisdiction of organization,
and the qualification of each of the Subsidiary LLCs to do business
in each other jurisdiction where such qualification is necessary
except where the failure so to qualify would not have a material
adverse effect on the rights and interests of the Agent hereunder.
4.2. No Other Liens. Except for any transfers of assets from any of
the Subsidiary LLCs to the Pledgor or among the Subsidiary LLCs, the
Pledgor agrees with the Agent, for the benefit of each of the Secured
Parties, and warrants that, until the later of the termination of all of
the Commitments or the payment in full in cash of each of the
Obligations, the Pledgor will not sell, assign, transfer, pledge,
hypothecate or otherwise encumber any of the Pledged Collateral (except
in favor of the Agent pursuant to the terms hereof).
4.3. Dividends and Voting Rights Other Than Following an Event of
Default. The Agent agrees with the Pledgor as follows:
(a) unless an Event of Default is continuing and the Agent has
delivered to the Borrower a notice referring to this 4.3 and the
exercise of rights hereunder (a "4.3 Notice"), the Pledgor shall be
entitled to exercise, in its reasonable judgment, but in a manner that
would not impair the Pledged Collateral and that would not be
inconsistent with the terms of this Agreement, the Credit Agreement or
any other Loan Document, the voting power and all other incidental
rights of ownership with respect to the Pledged Units or other units of
Membership Interest constituting Pledged Collateral pledged by the
Pledgor hereunder; and
(b) the Pledgor shall be entitled to receive all Permitted
Dividends on the Pledged Units pledged by the Pledgor hereunder.
The Agent agrees that, unless an Event of Default is continuing and the
Agent shall have delivered a 4.3 Notice, the Agent shall, upon the
written request of the Pledgor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by the Pledgor to
allow the Pledgor to exercise the rights described in clause (a).
5. THE AGENT
5.1. Agent Appointed Attorney-in Fact. The Pledgor hereby irrevocably
appoints the Agent, and any officer or agent thereof, the Pledgor's
attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time
in the Agent's discretion, to take any and all action and to execute any
Instrument or other assurance which the Agent may deem necessary or
advisable to accomplish the purposes of this Agreement, including:
(a) if an Event of Default is continuing, to ask, demand,
collect, ▇▇▇ for, recover, compromise, receive and give acquittance and
receipts for moneys due and to become due under or in respect of any of
the Pledged Collateral pledged by the Pledgor hereunder;
(b) to receive, endorse and collect any drafts or other
Instruments in connection with clause (a);
(c) to execute and do all such assurances, acts and things which
the Pledgor ought to do under the covenants and provisions of this
Agreement;
(d) to take any and all actions as the Agent may, in its sole
and absolute discretion, determine to be necessary or advisable for the
purpose of maintaining, preserving or protecting the security
constituted by this Agreement or any of the rights, remedies, powers or
privileges of the Agent under this Agreement; and
(e) generally, in the name of the Pledgor or in the name of the
Agent to exercise all or any of the powers, authorities and discretions
conferred on or reserved to the Agent pursuant to this Agreement.
The Pledgor hereby ratifies and confirms, and hereby agrees to ratify
and confirm, whatever the Agent shall do or purport to do in the
exercise of the power of attorney granted to the Agent pursuant to this
5.1, which power of attorney, being given for security, is irrevocable.
5.2. Agent Has No Duty. The powers conferred on the Agent hereunder
are solely to protect its interest (on behalf of the Secured Parties) in
the Pledged Collateral and shall not impose any duty on it to exercise
any such powers. Except as provided in 5.1 and except for accounting
for moneys actually received by it hereunder, the Agent shall have no
duty as to any Pledged Collateral or responsibility for taking any
necessary steps to preserve rights against prior parties or any other
rights pertaining to any Pledged Collateral except as otherwise required
by the U.C.C.
5.3. Reasonable Care. The Agent will exercise reasonable care in the
custody and preservation of the Pledged Collateral in its possession;
provided, however, that the Agent shall be deemed to have exercised
reasonable care in the custody and preservation of such Pledged
Collateral if it takes such action for that purpose as the Pledgor
reasonably requests in writing at times other than during the
continuance of an Event of Default, but failure of the Agent to comply
with any such request at any time shall not in itself be deemed a
failure to exercise reasonable care.
6. REMEDIES
6.1. Actions upon Event of Default.
(a) In addition to its rights and remedies provided hereunder,
whenever any Event of Default is continuing, the Agent shall have all
rights and remedies of a secured party upon default under the U.C.C.
(whether or not the U.C.C. applies to the affected Pledged Collateral)
or other applicable law, and also may, without notice except as
specified below, sell the Pledged Collateral or any part thereof in one
or more parcels at public or private sales, at any one of the Agent's
offices or elsewhere, for cash or credit or for future delivery, without
assumption of any credit risk, and upon such other terms as the Agent
may deem commercially reasonable. The Pledgor agrees that, to the
extent notice of sale shall be required by applicable law, at least ten
days' notice to the Pledgor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute
reasonable notification. The Agent shall not be obligated to make any
sale of Pledged Collateral regardless of notice of sale having been
given. The Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it
was so adjourned. Without limitation of the above, the Agent may,
whenever any Event of Default is continuing, without prior notice to the
Pledgor, take all or any of the following actions:
(i) vote any or all of the Pledged Units (whether or not
the same shall have been transferred into its name or the name of
its nominee or nominees) for any lawful purpose, give all
consents, waivers and ratifications in respect of the Pledged
Units, and otherwise act with respect thereto as though it were
the outright owner thereof;
(ii) transfer all or any part of the Pledged Collateral
into the name of the Agent or its nominee, with or without
disclosing that such Pledged Collateral is subject to the lien
hereunder;
(iii) enforce collection of any of the Pledged Collateral
by suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any obligations
of any nature of any party with respect thereto;
(iv) endorse any checks, drafts or other writings in the
name of the Pledgor to allow collection of the Pledged Collateral
pledged by the Pledgor hereunder;
(v) take control of any products or proceeds of the Pledged
Collateral;
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, and other instruments of conveyance or
transfer with respect to all or any of the Pledged Collateral; and
(vii) generally, do all such other acts and things as may
be considered incidental or conducive to any of the matters or
powers mentioned in the foregoing provisions of this paragraph (a)
and which the Agent may or can do lawfully and to use the name of
the Pledgor for such purposes and in any proceedings arising
therefrom.
(b) If the Agent shall determine to exercise its right to sell
any or all of the Pledged Units pursuant to this 6.1, and if in the
opinion of counsel for the Agent it is necessary, or if in the
reasonable opinion of the Agent it is advisable, to have the Pledged
Units, or that portion thereof to be sold, registered under the
provisions of the Securities Act of 1933, as amended (the "Securities
Act"), the Pledgor agrees to cause the Pledged Unit Issuer to execute
and deliver, and cause the directors and officers of the Pledged Unit
Issuer to execute and deliver, without any cost or expense to any of the
Secured Parties, all such Instruments, and to do or cause to be done all
such other acts and things as may be necessary or, in the reasonable
opinion of the Agent, advisable to register such Pledged Units under the
provisions of the Securities Act and to cause the registration statement
relating thereto to become effective and to remain effective for a
period of nine (9) months from the date such registration statement
became effective, and to make all amendments thereto or to the related
prospectus or both that, in the reasonable opinion of the Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the SEC applicable
thereto. The Pledgor agrees to cause such Pledged Unit Issuer to comply
with the provisions of the securities or "Blue Sky" laws of any
jurisdiction which the Agent shall designate and to cause such to make
available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions
of 11(a) of the Securities Act.
(c) The Pledgor recognizes that the Agent may be unable to
effect a public sale of the Pledged Units by reason of certain
prohibitions contained in the Securities Act, and other applicable laws,
but may be compelled to resort to one or more private sales thereof to a
restricted group of purchasers. The Pledgor agrees that any such
private sales may be at prices and other terms less favorable to the
seller than if sold at public sales and that such private sales shall
not by reason thereof be deemed not to have been made in a commercially
reasonable manner. The Agent shall be under no obligation to delay a
sale of any of the Pledged Units for the period of time necessary to
permit the applicable Pledged Unit Issuer to register such Pledged Units
for public sale under the Securities Act, or other Applicable Laws, even
if such Pledged Unit Issuer would agree to do so.
(d) So long as an Event of Default is continuing, the Pledgor
shall, upon the request of the Agent, take or cause to be taken (or, if
the Pledgor does not have the legal right to take such action or cause
such action to be taken, the Pledgor will use its best efforts to cause
such action to be taken), in good faith and promptly, and without any
cost or expense to any of the Secured Parties, all such action as may be
necessary or desirable, as soon as reasonably practicable, to sell or to
effect the sale of the Pledged Units of any Pledged Unit Issuer pledged
by the Pledgor hereunder. Such action shall include but shall not be
limited to the following:
(i) the Pledgor shall prepare and deliver to the Agent as
soon as practicable, but in any event not later than thirty (30)
days after request by the Agent, a written plan for the sale or
other disposition of such Pledged Units, which plan shall be
reasonably satisfactory in form and substance to the Majority
Banks;
(ii) the Pledgor shall and shall cause any Pledged Unit
Issuer to retain such investment banking firms, accountants,
appraisers and other consultants who are reasonably acceptable to
the Majority Banks to make recommendations with respect to and to
assist in such sale, and the Pledgor shall cause such investment
banking firms, accountants, appraisers and other consultants to
furnish the Agent with all such financial reports, appraisals,
opinions and other documents which the Agent shall reasonably
request; and
(iii) if (and on each occasion that) the Pledgor or any
Pledged Unit Issuer shall receive from any Person an offer to
purchase any such Pledged Units, the Pledgor shall and shall cause
the applicable Pledged Unit Issuer to furnish or cause to be
furnished to the Agent a written notice setting forth the full
particulars thereof, including (A) the name and address of such
Person, and (B) the terms of such offer to purchase.
Each purchaser of any of the Pledged Units, and the agreement entered
into by such purchaser in connection with such purchase and sale, shall
be subject to the prior written agreement, consent or approval of the
Majority Banks. The Pledgor shall and shall cause each of its
Subsidiaries to deliver forthwith to the Agent in the form received,
except for the addition of any endorsement or assignment necessary to
effect transfer of all rights therein to the Agent, any payment received
by the Pledgor or any of its Subsidiaries on account of any such
purchase and sale of any such Pledged Units. Until so delivered, each
such payment shall be held in trust for the Agent and shall not be
commingled with any other funds of the Pledgor or any of its
Subsidiaries.
(e) The Agent may buy any part or all of the Pledged Collateral
at any public sale and if any part or all of the Pledged Collateral is
of a type customarily sold in a recognized market, or is of the type
which is the subject of widely distributed price standard price
quotations, the Agent may buy at private sale, and may make payments
thereof by any means.
6.2. Application of Proceeds. All cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization
upon, all or any part of the Pledged Collateral shall be applied by the
Agent in the following order:
(a) first, to the Secured Parties, on account of the payment of,
or the reimbursement of any Secured Party for, all costs and expenses
incurred or sustained by any Secured Party that are required by the
terms of this Agreement, the Credit Agreement or any other Loan Document
to be paid or reimbursed by the Pledgor; and
(b) second, to the Secured Parties, pro rata, on account of all
other Obligations due and payable to such Secured Parties.
Any surplus of such cash proceeds held by the Agent and remaining after
payment in full of all the Obligations shall be paid over to the Pledgor
entitled thereto or to whomsoever else may be lawfully entitled to
receive such surplus. The Pledgor shall remain liable for any
deficiency.
6.3. Indemnity and Expenses. The Pledgor hereby agrees to indemnify
and hold harmless each Secured Party, and the shareholders, officers,
directors, employees, agents, Subsidiaries and Affiliates of each
Secured Party, from and against any and all claims, losses and
liabilities arising out of or resulting from this Agreement (including
the enforcement thereof), except for any portion of such claims, losses
or liabilities which a court of competent jurisdiction has found, in a
final, nonappealable order, resulted solely by reason of such Secured
Party's gross negligence or willful misconduct. Upon demand, the
Pledgor will pay to the Agent the amount of any and all reasonable
expenses, including the reasonable fees and disbursements of its counsel
and of any experts, which the Agent may incur in connection with:
(a) the administration of this Agreement or any Instrument
relating hereto;
(b) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Pledged
Collateral pledged by the Pledgor hereunder;
(c) the exercise or enforcement against such Company of any of
the rights of the Agent hereunder;
(d) the failure by the Pledgor to perform or observe any of the
provisions hereof; or
(e) the advancing of any funds in connection with actions taken
pursuant to 7.3.
6.4. No Waiver; Remedies Cumulative. No delay, act or omission on the
part of the Agent of any of its rights hereunder shall be deemed a
waiver of any rights hereunder unless also contained in a writing signed
by the Agent, nor shall any single or partial exercise of, or any
failure to exercise, any right, power or privilege preclude any other or
further or initial exercise thereof or of any other right, power or
privilege. The rights and remedies provided herein are cumulative, and
not exclusive of rights and remedies which may be granted or provided by
applicable law.
6.5. Marshalling. Neither the Agent nor any Secured Party shall be
required to marshal any present or future collateral security (including
but not limited to this Agreement and the Pledged Collateral) for, or
other assurances of payment of, the Obligations or any of them or to
resort to such collateral security or other assurances of payment in any
particular order, and all of the rights of the Agent hereunder and the
Agent or any Secured Party in respect of such collateral security and
other assurances of payment shall be cumulative and in addition to all
other rights, however existing or arising. To the extent that it
lawfully may, the Pledgor hereby agrees that it will not invoke any
applicable law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Agent's rights under
this Agreement or under any other Instrument creating or evidencing any
of the Obligations or under which any of the Obligations is outstanding
or by which any of the Obligations is secured or payment thereof is
otherwise assured, and, to the extent that it lawfully may, the Pledgor
hereby irrevocably waives the benefits of all such laws.
7. MISCELLANEOUS PROVISIONS
7.1. Security Document, etc. For all purposes of the Credit
Agreement, this Agreement is a "Security Document" and a "Loan Document"
executed and delivered pursuant to the Credit Agreement.
7.2. Amendments, etc. No amendment to or waiver of any provision of
this Agreement nor consent to any departure by the Pledgor hereto shall
in any event be effective unless the same shall be in writing and signed
by the Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it is
given.
7.3. Protection of Collateral. The Agent may from time to time, at
its option, perform any act which the Pledgor agrees hereunder to
perform and which the Pledgor shall fail to perform after being
requested in writing to so perform (it being understood that no such
request need be given during the continuance of any Default or Event of
Default), and the Agent may from time to time take any other action
which the Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Pledged Collateral or of the
security interests therein.
7.4. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing or by facsimile transmission
and, if to the Pledgor, addressed or delivered to it at the address set
forth below the signature of the Pledgor hereto, and if to the Agent,
addressed or delivered to it at the address set forth in Schedule 1.1 to
the Credit Agreement, or as to any party at such other address as shall
be designated by such party in a written notice to the other parties
complying as to delivery with the terms of this Section. Any such
notices and other communications, if mailed and properly addressed with
postage prepaid or transmitted by facsimile transmission, shall be
deemed given when received.
7.5. Subordination of Subrogation Rights. The rights which any of the
Subsidiary LLCs shall acquire against the Pledgor in the nature of
subrogation, indemnity or contribution rights, as a consequence of
making any payments to the Agent under this Agreement, or as a
consequence of the sale of any of the Pledged Collateral by the Agent
pursuant to this Agreement, are, in this 7.5, collectively called the
"Subrogation Rights." In the event of any bankruptcy or insolvency
proceeding involving the Pledgor or any Property of the Pledgor, if all
of the Obligations have not been paid in full in cash at the time, the
Agent is hereby irrevocably authorized by the Pledgor at any such
proceeding:
(a) to enforce all of the Subrogation Rights of the Pledgor,
either in the name of the Agent or in the name of the Pledgor, by proof
of debt, proof of claim, suit or otherwise;
(b) to collect any Property of the Pledgor distributed or
applied by way of dividend or payment on account of such Subrogation
Rights, and to apply the same, or the proceeds of any realization
thereof, towards the payment of the Obligations until all of the
Obligations have been paid in full in cash; and
(c) to vote claims arising under or in respect of all such
Subrogation Rights.
Except as and to the extent otherwise expressly contemplated and
permitted by the foregoing provisions of this 7.5, so long as any
Obligations remain unpaid, no Pledgor shall take any action of any kind
to enforce any of its Subrogation Rights, and no Pledgor shall receive
or accept from any Person or Persons any payments or other distributions
in respect of any of its Subrogation Rights. Should any payment or
distribution on account of any of the Subrogation Rights be received by
the Pledgor, such payment or distribution shall be delivered by the
Pledgor forthwith to the Agent for the benefit of the Secured Parties in
the form received by the Pledgor, except for the addition of any
endorsement or assignment necessary to effect transfer of all rights
therein to the Agent. Until so delivered, each such payment shall be
held by the Pledgor in trust for the benefit of the Secured Parties and
shall not be commingled with any other funds of the Pledgor.
7.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
7.7. Governing Law. THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN
THE COMMONWEALTH OF MASSACHUSETTS AND SHALL IN ALL RESPECTS BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF SUCH STATE
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH
STATE.
7.8. Consent to Jurisdiction. EACH PLEDGOR BY ITS EXECUTION HEREOF
(A) HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
STATE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS AND TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
DISTRICT OF MASSACHUSETTS FOR THE PURPOSE OF ANY SUIT, ACTION OR OTHER
PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF, AND (B) HEREBY WAIVES
TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW, AND AGREES NOT TO
ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH
PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE
JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR
IMMUNE FROM ATTACHMENT OR EXECUTION, THAT ANY SUCH PROCEEDING BROUGHT IN
ONE OF THE ABOVE-NAMED COURTS IS IMPROPER, OR THAT THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE
ENFORCED IN OR BY SUCH COURT. EACH PLEDGOR HEREBY CONSENTS TO SERVICE
OF PROCESS IN ANY SUCH PROCEEDING IN ANY MANNER PERMITTED BY CHAPTER
223A OF THE GENERAL LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, AND
AGREES THAT SERVICE OF PROCESS BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED IN OR PURSUANT TO 7.4 IS
REASONABLY CALCULATED TO GIVE ACTUAL NOTICE.
7.9. Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
7.10. Waiver Of Jury Trial. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH OF THE AGENT AND EACH
PLEDGOR HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY
FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY OBLIGATION OR IN ANY WAY
CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE AGENT OR
THE PLEDGOR IN CONNECTION WITH ANY OF THE ABOVE, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING AND WHETHER IN CONTRACT OR TORT OR
OTHERWISE. EACH PLEDGOR ACKNOWLEDGES THAT THE PROVISIONS OF THIS 7.10
CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE AGENT AND THE OTHER
SECURED PARTIES ARE RELYING AND WILL RELY IN ENTERING INTO THIS
AGREEMENT. THE AGENT, THE OTHER SECURED PARTIES OR THE PLEDGOR MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS 7.10 WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE AGENT AND THE PLEDGOR TO THE
WAIVER OF ITS RIGHT TO TRIAL BY JURY.
7.11. Compliance with Communications Act. Anything in this Agreement
to the contrary notwithstanding, the Agent shall not take any action
hereunder in violation of the Communications Act, and shall not vote any
of the Pledged Units, and no sale of the Pledged Collateral or transfer
thereof to the Agent or to the Agent's nominees shall be made without
such (if any) approval of the FCC as may be required by the
Communications Act. Neither the Agent nor any other Person other than
the duly licensed Pledgor shall operate or otherwise exercise any
control over the Station licensed to the Pledgor without first having
received such prior approval of the FCC as shall then be required. In
the event any such approval shall be required, the Pledgor absolutely
and unconditionally agrees to execute upon the request of the Agent, and
absolutely and unconditionally agrees to use its best efforts, upon the
request of the Agent, to cause the execution of, all such applications
and other instruments as may be necessary to obtain promptly such
approval.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
▇▇▇▇▇▇▇▇▇▇ COMMUNICATIONS
COMPANY
By /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Chief Financial Officer
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
BANKBOSTON, N.A., as Agent
By /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Managing Director
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
KATV LLC
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
KTUL LLC
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
WCIV LLC
By /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Title: Vice President
ATTACHMENT 1
(to the Pledge Agreement)
Pledged Units of Membership Interests
Pledgor Pledged Outstanding Outstanding Outstanding
Units Units Units Certificate
Issuer Pledged Number(s)
▇▇▇▇▇▇▇▇▇▇ KATV LLC 100%
Communicat
ions Co.
▇▇▇▇▇▇▇▇▇▇ KTUL LLC 100%
Communicat
ions Co.
▇▇▇▇▇▇▇▇▇▇ WCIV LLC 100%
Communicat
ions Co.