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Exhibit 10(e)
SECURITY AGREEMENT
THIS SECURITY AGREEMENT is entered into as of the 3rd day of December,
1997, by and between REGENT COMMUNICATIONS, INC., a Delaware corporation (the
"Borrower") and CITICASTERS CO., an Ohio corporation (the "Lender")
1. Definitions:
1.1 Specific Definitions. The following definitions shall apply:
"Accounts" means all accounts, contract rights, instruments,
documents, chattel paper, and all obligations in any form arising out of the
WSSP Loan Documents (as hereinafter defined); all guaranties, letters of credit
and other security for any of the above; and all books and records (including
computer programs, tapes and data processing software) evidencing an interest in
or relating to the above.
"General Intangibles" means all general intangibles, chosen in action,
causes of action, obligations or indebtedness owed to Borrower from any source
whatsoever under the WSSP Loan Documents, and all other intangible personal
property of every kind and nature (other than Accounts) including without
limitation patents, trademarks, trade names, service marks, copyrights and
applications for any of the above, and goodwill, trade secrets, licenses,
franchises, rights under agreements, tax refund claims, and all books and
records including all computer programs, disks, tapes, printouts, customer
lists, credit files and other business and financial records, and the equipment
containing any such information, pertaining to the WSSP Loan Documents.
"Lien" means any security interest, mortgage, pledge, assignment, lien
or other encumbrance of any kind, including interests of vendors or lessors
under conditional sale contracts or capital leases.
"Loan" shall mean the loan evidenced by the Note (as hereinafter
defined).
"Note" shall mean the Promissory Note executed by the Borrower in
favor of the Lender of even date herewith in the amount of $1,500,000 or such
lesser amount as provided for in such Promissory Note.
"Obligation(s)" means all loans, advances, indebtedness and other
obligations of the Borrower owed to Lender under the Note, and all expenses and
attorney's fees incurred by Lender with respect to the enforcement of this
Agreement in the event of a default hereunder.
"WSSP" shall mean the radio station known as WSSP-FM, licensed to
Goose Creek, South Carolina.
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"WSSP Sellers" means Southwind Broadcasting, Inc., a South Carolina
corporation, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III.
"WSSP Option Agreement" shall mean the Option Agreement, dated June 3,
1997 by and among ▇▇▇▇▇ Broadcast Group Limited Partnership, a Delaware limited
partnership ("WBG"), and WBG License Co., LLC, a Delaware limited liability
company ("WBG Licensee").
"WSSP Option" shall mean the option to purchase WSSP pursuant to the
WSSP Option Agreement.
"WSSP Note" means the Promissory Note made by the WSSP Sellers payable
to Borrower, dated of even date herewith.
"WSSP Loan Documents" means the Loan Commitment Agreement, dated June
3, 1997 by and among the WSSP Sellers and Borrower (as assignee of WBG) pursuant
to which Borrower is obligated to lend $1,500,000 to the WSSP Sellers which
shall be repaid to Borrower at the closing of the purchase of the WSSP Option,
the WSSP Note, and any other documents in connection with such loan.
2. Security
2.1 Security Interest of Lender. To induce Lender to make the Loan, and as
security for all the Obligations, Borrower hereby assigns to Lender as
collateral and grants to Lender a continuing first priority pledge and security
interest in the following property of Borrower (the "Collateral"), whether now
owned or existing or hereafter acquired or arising and regardless of where it is
located:
(a) all Accounts, including without limitation those Accounts
acquired by Borrower from Borrower's predecessor in interest;
(b) the WSSP Loan Documents and the WSSP Note included therein and
any and all other documents evidencing the right of payment from
the WSSP Sellers, all of which are hereby assigned and pledged
with the originals contemporaneously delivered from Borrower to
Lender in connection with the signing of this Agreement;
(c) all General Intangibles; provided however, Borrower shall assign
and grant a continuing first priority pledge and security
interest in any licenses and authorizations issued by the Federal
Communications Commission (the "FCC"), only to the extent
permitted by law and/or the proceeds of such licenses and
authorizations;
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(d) all proceeds and products of Collateral and all additions and
accessions to, replacements of, insurance or condemnation
proceeds of, and documents covering Collateral, all tort or other
claims against third parties arising out of damage or destruction
of Collateral, all property received wholly or partly in trade or
exchange for Collateral, all leases of Collateral and all rents,
revenues, issues, profits and proceeds arising from the sale,
lease, license, encumbrance, collection, or any other temporary
or permanent disposition, of the Collateral or any interest
therein; and
(e) all instruments, documents, securities, money or other property,
owned by Borrower or in which Borrower has an interest generated
in connection with the WSSP Loan Documents by Borrower or
acquired by Borrower from Borrower's predecessor in interest
under the WSSP Loan Documents.
2.2 Representations in Schedule I. Borrower represents and warrants that
the representations and warranties set forth in Schedule I, the Specific
Representations Schedule, are true and correct. Except as otherwise permitted
hereunder, Borrower will not change its name, transfer its executive offices or
maintain records with respect to Accounts at any location other than its present
executive offices specified in that Schedule.
2.3 Provisions Concerning WSSP Loan Documents.
(a) Other than the security interest granted to Borrower's senior
lenders, which has been subordinated to the security interest
granted to Lender hereunder, Borrower represents and warrants
that the WSSP Loan Documents are owned by Borrower free and clear
of all Liens in favor of any third party, will be a bona fide
existing obligation and is not subject to any known deduction,
offset, counterclaim, return privilege or other condition.
(b) Any officer, employee or agent of Lender shall have the right, at
any time or times hereafter, in the name of Lender or its nominee
(including Borrower), to verify the validity, amount or any other
matter relating to any WSSP Loan Documents. Lender or its
designee may at any time notify the WSSP Sellers that WSSP Loan
Documents have been assigned to Lender or of Lender's security
interest therein, and after default by Borrower hereunder collect
the same directly and charge all collection costs and expenses to
Borrower's account.
(c) Borrower appoints Lender or Lender's designee as its
attorney-in-fact to endorse Borrower's name on any checks, notes,
acceptances, money orders, drafts or other forms of payment or
security that may come into Lender's possession relating to the
WSSP Loan Documents; to sign Borrower's name
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on any invoice or ▇▇▇▇ of lading relating to any WSSP Loan
Documents, on notices of assignment and other public records, and
on proofs of claim, releases of lien and any other documents
needed to collect WSSP Loan Documents, and to do all things
necessary to carry out or enforce this Agreement. Borrower
ratifies and approves all acts of Lender as attorney-in-fact.
Lender as attorney-in-fact will not be liable for any acts or
omissions, or for any error of judgment or mistake of fact or law
except for bad faith. This power, being coupled with an interest,
is irrevocable until all Obligations have been fully satisfied.
Any person dealing with Lender shall be entitled to conclusively
rely on any written or oral statement of Lender or its designee
that this power of attorney is in effect.
(d) Borrower shall use its best commercially reasonable efforts to
collect the WSSP Loan from the WSSP Sellers including, without
limitation, promptly notifying WSSP Sellers of any defaults or
Event of Default under the WSSP Loan Documents, promptly
commencing litigation against WSSP Sellers in the event payment
is not forthcoming within twenty days after such notice, and
diligently and continuously pursuing such litigation to judgment
and then collecting and levying upon assets of WSSP Sellers in an
attempt to satisfy said judgment.
(e) Borrower shall either (a) exercise the WSSP Option and close on a
purchase of the WSSP assets prior to the expiration of the term
of the WSSP Option and, if Borrower so chooses as part of such
transaction, to sell the assets of WSSP to a qualified third
party either simultaneously therewith or at a later date, or, (b)
assign the WSSP Option to a third party purchaser which shall
exercise the WSSP Option and close on the purchase of the WSSP
Assets prior to the expiration of the WSSP Option.
Notwithstanding the above, in the event Borrower exercises the
WSSP Option and closes the purchase of the WSSP Assets, Borrower
shall grant to Lender first priority mortgages and security
interests in, and liens upon, all of the WSSP Assets, including
but not limited to all FCC licenses and authorizations as
security for repayment of the Note.
2.4 Provisions Concerning Accounts. Borrower represents and warrants that
except as otherwise disclosed herein, each Account is reflected in its books and
records is, or will at the time it arises be, owned by the Borrower free and
clear of all Liens in favor of any third party, will be a bona fide existing
obligation created by the final sale and delivery of goods or the completed
performance of services by the Borrower in the ordinary course of its business,
will be for a liquidated amount maturing as stated in the supporting data
covering such transaction, and will not be subject to any known deduction,
offset, counterclaim, return privilege or other condition, except as reflected
on the Borrower's books and records.
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2.5 Provisions Concerning General Intangibles. Borrower represents and
warrants that, except as otherwise disclosed herein, Borrower owns all of the
General Intangibles in which Borrower grants Lender a Lien, free and clear of
any Liens in favor of any person other than Lender. Borrower will preserve all
patents, trademarks, copyrights and the like which are necessary or useful for
the conduct of its business.
2.6 Liens. Borrower represents and warrants that, except as otherwise
disclosed herein, Borrower has good and marketable title to the Collateral, and
the Liens granted to Lender in this Agreement are fully perfected first priority
Liens in the Collateral with priority over the rights of every person other than
Borrower in the Collateral. Borrower is the owner of all personal property in
its possession or shown on its books and records, and, except as otherwise
disclosed herein, all assets of Borrower are owned free, clear and unencumbered,
except for the Lien of Lender and except for Liens imposed by law which secure
amounts not yet due and payable.
2.7 Further Assurances.
(a) Borrower will execute and deliver to Lender at Lender's request
all financing statements, continuation statements and other
documents that Lender may reasonably request, in form
satisfactory to Lender, to perfect and maintain perfected
Lender's security interest in the Collateral and to fully
consummate all transactions contemplated under this Agreement.
Borrower hereby irrevocably makes, constitutes and appoints
Lender (and any of Lender's officers, employees or agents
designated by Lender) as Borrower's true and lawful attorney with
power to sign the name of Borrower on any such documents.
Borrower ratifies and approves all acts of Lender and its
designees as attorney-in-fact. Lender or its designees as
attorney-in-fact will not be liable for any acts or omissions, or
for any error of judgment or mistake of fact or law, except for
bad faith.
(b) If any Collateral, including proceeds, consists of a letter of
credit, promissory note, advice of credit, instrument, money,
negotiable documents, chattel paper or similar property
(collectively, "Negotiable Collateral") Borrower will,
immediately upon receipt thereof, endorse and assign such
Negotiable Collateral over to Lender and deliver actual physical
possession of the Negotiable Collateral to Lender.
(c) Lender may inspect and verify Borrower's books and records at any
time or times hereafter, during usual business hours, in order to
verify the amount or condition of the Collateral, or any other
matter relating to the Collateral or Borrower's financial
condition. Borrower will promptly deliver to Lender copies of all
books and records requested by Lender.
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2.8 Reinstatement of Lien. If any payments made by Borrower or any other
person on Obligations must be disgorged by Lender after termination of this
Agreement for any reason whatsoever (including, without limitation, the
insolvency, bankruptcy or reorganization of Borrower or such other person), this
Agreement and Lender's Liens granted hereunder will be reinstated as to all
disgorged payments as though such payment had not been made, and Borrower will
sign and deliver to Lender all documents and things necessary to reperfect all
terminated Liens.
2.9 Other Amounts Deemed Part of Loan. If Borrower fails to pay any tax,
assessment, government charge or levy or to maintain insurance within the time
permitted by this Agreement or the Note, or to discharge any Lien prohibited
hereby, or to comply with any other obligation, Lender may, but shall not be
required to, pay, satisfy, discharge or bond the same for the account of
Borrower, and to the extent permitted by law and all monies so paid out shall be
secured by the Collateral.
2.10 Borrower Remains Liable. Borrower remains liable under any contracts
and agreements included in the Collateral to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, and Lender will not have any obligation or liability under such
contracts and agreements by reason of this Agreement or otherwise.
3. Events of Default and Remedies
3.1 Events of Default. Any of the following events shall be an Event of
Default:
(a) any representation or warranty made herein by Borrower is
incorrect when made or reaffirmed; or
(b) Borrower fails to observe or perform any covenant, condition or
agreement herein, and such default continues for 30 days after
written notice thereof to Borrower by Lender; or
(c) an Event of Default occurs under the Note or under the WSSP Loan
Documents.
(d) the WSSP Option terminates or expires without Borrower or
qualified third party purchaser exercising the WSSP Option and
closing on the purchase of the WSSP Assets.
3.2 Remedies. If any Event of Default shall occur and not be waived, in
addition to the remedies provided in the Note:
(a) Lender may resort to the rights and remedies of a secured party
under the Uniform Commercial Code including the right to enter
any premises of
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Borrower, with or without legal process and take possession of
the Collateral and remove it and any records pertaining thereto
and/or remain on such premises and use it for the purpose of
collecting, preparing and disposing of the Collateral;
(b) Lender may dispose of the Collateral as is or at its election;
Lender's failure to take steps to preserve rights against any
parties or property shall not be deemed to be failure to exercise
reasonable care with respect to the Collateral;
(c) Lender may in its sole discretion pay, purchase, contest or
compromise any encumbrance, charge or lien which in the opinion
of Lender appears to be prior or superior to its Lien, and pay
all expenses incurred in connection therewith;
(d) Lender may sell the Collateral at public or private sale, and
Borrower shall be credited with the net proceeds of such sale
only when they are actually received by Lender; any requirement
of reasonable notice of any disposition of the Collateral shall
be satisfied if such notice is sent to Borrower, as provided in
the Notices Section of this Agreement, 10 days prior to such
disposition;
(e) Borrower shall upon request of Lender assemble the Collateral and
any records pertaining thereto and make them available at a place
designated by Lender; and
(f) Lender may use, in connection with any assembly or disposition of
the Collateral, any trademark, trade name, trade style,
copyright, patent right, trade secret or technical process used
or utilized by Borrower.
(g) Notwithstanding anything to the contrary contained in this
Agreement, Lender will not take any action pursuant to this
Agreement or the Note which would constitute (or result in) any
assignment of any licenses issued by the FCC or any transfer of
control of Borrower if such assignment of licenses or transfer of
control would require, under then existing law (including the
written rules and regulations promulgated by the FCC), the prior
approval of the FCC, without first obtaining such approval of the
FCC.
(h) Borrower agrees to take (or cause to be taken), any action which
the Lender may reasonably request in order to obtain and enjoy
the full rights and benefits granted to Lender by this Agreement,
including specifically, at Borrower's own cost and expense, the
use of Borrower's best efforts (i) to
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assist in obtaining approval of the FCC for any action or
transaction contemplated by this Agreement which is then required
by law, and (ii) without limitation, upon request following the
occurrence of an Event of Default, to prepare, sign, and file
with the FCC (or cause to be prepared, signed, and filed with the
FCC) any portion of any application or applications for consent
to the assignment of the FCC licenses (the "Licenses") associated
with the operation of WSSP or transfer of control required to be
signed by Borrower and necessary or appropriate under the FCC's
rules and regulations of approval of any sale or transfer of any
of the ownership interests or assets of Borrower or any transfer
of control over any of the Licenses.
3.3 Cumulative Remedies. No remedy set forth herein is exclusive of any
other available remedy or remedies, but each is cumulative and in addition to
every other remedy given under this Agreement or any other agreement or now or
hereafter existing at law or in equity or by statute. Lender may pursue its
rights and remedies concurrently or in any sequence, and no exercise of one
right or remedy shall be deemed to be an election. If Borrower fails to comply
with this Agreement, no remedy of law will provide adequate relief to Lender,
and Lender shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages.
3.4 Fees and Expenses. Upon a sale, lease or other disposition of the
Collateral, the proceeds shall be applied first to the expenses of retaking,
holding, storing, processing and preparing for sale, selling and the like, and,
to the extent permitted by law, to reasonable attorneys' fees and legal
expenses, and then to the satisfaction of the obligations secured by this
Agreement. Borrower shall be liable for any deficiency.
3.5 FCC Compliance. In the event that Lender elects to exercise its
remedies upon an Event of Default as contemplated by Section 3.2 hereof or under
any other provision of this Agreement, Lender shall comply in all material
respects with the Communications Act of 1934, as amended, and all applicable
rules and regulations of the FCC, including, without limitation, obtaining any
required consent or approval of the FCC prior to the exercise of such remedies.
Borrower shall cooperate and otherwise use its best efforts to cause any such
required consent or approval to be granted.
4. Miscellaneous Provisions
4.1 Miscellaneous. No delay or omission to exercise any right shall impair
any such right or be a waiver thereof, and a waiver on one occasion shall be
limited to that particular occasion. This Agreement may be amended only in
writing signed by the party against whom enforcement of the amendment is sought.
This Agreement may be executed in counterparts. If any part of this Agreement is
held invalid, the remainder of this Agreement shall not be affected thereby.
4.2 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the respective legal representatives, successors and assigns of the
parties hereto; however, Borrower may
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not assign any of its rights or delegate any of its obligations hereunder.
Lender (and any subsequent assignee) may transfer and assign this Agreement or
may assign partial interests or participations in the Loan to other persons.
4.3 Subsidiaries. If Borrower has any Subsidiaries at any time during the
term of this Agreement, the term "Borrower" in each representation, warranty and
covenant herein shall mean "the Borrower and each Subsidiary individually and in
the aggregate," and Borrower shall cause each Subsidiary to be in compliance
therewith.
4.4 Notices. Any notice required, permitted or contemplated hereunder
shall be in writing and addressed to the party to be notified at the address set
forth below or at such other address as each party may designate for itself from
time to time by notice hereunder, and shall be deemed validly given (i) three
(3) days following deposit in the U.S. mails, with proper postage prepaid, or
(ii) the next business day after such notice was delivered to a regularly
scheduled overnight delivery carrier with delivery fees either prepaid or an
arrangement, satisfactory with such carrier, made for the payment thereof, or
(iii) upon receipt of notice given by telecopy, mailgram, telegram, telex or
personal delivery:
To Borrower: Regent Communications, Inc.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ & ▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
2100 PNC Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Lender: Citicasters Co.
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
12th Floor
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: ▇▇▇▇▇▇▇, Head & ▇▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
4.5 Governing Law; Jurisdiction. This Agreement will be governed by the
domestic laws of the Commonwealth of Kentucky. Borrower agrees that the state
and federal courts in Kenton County, Kentucky or any other court in which Lender
initiates proceedings have exclusive jurisdiction over all matters arising out
of this Agreement, and that service of process in any such proceeding shall be
effective if mailed to Borrower at its address described in the Notices section
of the Note. LENDER AND BORROWER HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY
MATTERS ARISING OUT OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
4.6 Subordinated Lien. Lender acknowledges that Borrower's senior lenders
have an existing security interest in the Collateral, which has been
subordinated to the interests granted to Lender hereunder, to the satisfaction
of Lender.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement by their duly authorized officers as of the date first above written.
REGENT COMMUNICATIONS, INC.
By:________________________________
Name:______________________________
Title: ____________________________
CITICASTERS CO.
By:________________________________
Name:______________________________
Title: ____________________________
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SCHEDULE I TO SECURITY AGREEMENT
Specific Representations
1. The exact legal name of the Borrower is:
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2. The Borrower's federal Employer I.D. number is:
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3. If the Borrower has changed its name since it was incorporated, its past
legal names were:
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4. The Borrower uses in its business and owns the following trade names:
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5. The Borrower was incorporated on , under the laws of the
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State of Delaware and is in good standing under those laws.
6. The Borrower has its chief executive office and principal place of business
at
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This office
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is in County. Borrower maintains all of its records with respect to
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its Accounts at that address.
7. The Borrower also has places of business at:
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8. No inventory, equipment or fixtures owned by the Borrower are located at
any other place, nor were they located at any other place within the past
four months, except at
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9. If the Borrower is incorporated in Kentucky or qualified to do business
there, its registered agent and registered office there as listed on the
Kentucky Secretary of State's corporate records are:
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