1
SUBSIDIARY SECURITY AGREEMENT
THIS SUBSIDIARY SECURITY AGREEMENT (the "Security Agreement") is
executed as of February __, 1996, and is made by each of the parties listed on
the signature pages hereof and those additional entities that hereafter become
parties hereto by executing counterpart signature pages hereof (each a "Grantor"
and collectively the "Grantors") in favor of Banque Paribas, as agent (the
"Agent") for itself, the banks (said banks, together with their respective
successors and assigns, collectively called the "Banks"), the co-agents (the
"Co-Agents") party to the Credit Agreement (as hereinafter defined), any L/C
Providers (as defined in the Credit Agreement) and any Interest Rate Providers
(as defined in the Credit Agreement).
W I T N E S S E T H:
WHEREAS, Jacor Communications, Inc. (the "Company") is entering into
that certain Credit Agreement dated as of the date hereof, with the Banks, the
Co- Agents and the Agent (as modified, supplemented, amended, extended,
supplanted or restricted from time to time, the "Credit Agreement");
WHEREAS, the Credit Agreement requires the Company to enter into
certain Rate Hedging Agreements (as defined in the Credit Agreement) with
Interest Rate Providers;
WHEREAS, each of the Grantors is a Wholly-Owned Subsidiary of the
Company;
2
WHEREAS, Grantors expect to realize substantial direct and indirect
benefits as a result of the Company entering into the Credit Agreement and the
Rate Hedging Agreements;
WHEREAS, the execution and delivery of this Security Agreement is a
condition precedent to the availability of credit under the Credit Agreement;
and
NOW, THEREFORE, for and in consideration of the foregoing and of the
direct and indirect benefits to be received by the Company and the Grantors and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. DEFINITIONS.
As used in this Subsidiary Security Agreement:
"Accounts" means "accounts" as defined in Section 9-106 of the UCC.
"Chattel Paper" means "chattel paper" as defined in Section 9-105 of
the UCC.
"Collateral" means all tangible and intangible Property, wherever
located, whether now owned or hereafter existing, in which the Grantors (or any
of them) now has or hereafter acquires any right or interest, and the Proceeds
(including insurance proceeds), products, substitutions and replacements thereof
and additions and accessions thereto and all cash and cash equivalents, bank
accounts, special collateral accounts, and all books and records, customer
lists, credit files, computer files, programs, printouts and other computer
materials and records related thereto, including, without limitation, the
following property: all Accounts, Chattel Paper, Documents, Deposit Accounts,
Equipment, Fixtures,
2
3
General Intangibles, Instruments, Inventory, Stock Rights and Proceeds,
products, additions and accessions thereto or thereof; provided, however, that
Collateral shall not include (i) licenses and permits issued by the FCC to the
extent it is unlawful to grant a security interest in any such license or permit
or to the extent that the grant of any such security interest in any such
license or permit would result in the forfeiture of any such license or permit
or a default under any such license or permit, (ii) assets and stock of newly
formed subsidiaries of the Grantors, to the extent that the Agent is not to
receive a security interest therein, as provided in Section 6.15(i) of the
Credit Agreement and (iii) collateral pledged to the Agent pursuant to any
Subsidiary Pledge Agreement to which any Grantor is a party.
"Deposit Accounts" means "deposit accounts" as defined in Section 9-105
of the UCC.
"Documents" means "documents" as defined in Section 9-105 of the UCC.
"Equipment" means "equipment" as defined in Section 9-109(2) of the
UCC.
"Fixtures" means "fixtures" as defined in Section 9-313 of the UCC.
"General Intangibles" means "general intangibles" as defined in 9-106
of the UCC including, without limitation, all contract rights, rights to receive
payments of money, chooses in action, judgments, tax refunds and tax refund
claims, patents, trademarks, trade names, copyrights, licenses (including,
without limitation, those issued by the FCC except to the extent that it is
unlawful to grant a security interest in any such license or that the grant of
any such security interest therein would result in a default under any such
license), franchises, leasehold interests in real or personal property,
3
4
rights to receive rentals of real or personal property, and guarantee claims.
"Instruments" means "instruments" as defined in Section 9-105 of the
UCC including, without limitation, all checks, drafts, notes, bonds, debentures,
government securities, certificates of deposit, letters of credit, preferred and
common stocks, options and warrants.
"Inventory" means "inventory" as defined in Section 9-109 of the UCC,
including, without limitation, all inventory, raw materials, work in process,
finished goods, returned or repossessed goods, goods held for sale or lease or
furnished or to be furnished under contracts of service and goods released to a
Grantor or to third parties under trust receipts or similar documents.
"Obligations" means, as to each Guarantor, all obligations of such
Guarantor under the Subsidiary Guaranty executed by such Guarantor including,
without limitation, all obligations of such Guarantor pursuant to Section 1 of
such Subsidiary Guaranty.
"Proceeds" means "proceeds" as defined in Section 9-306 of the UCC.
"Receivables" means the Accounts, Chattel Paper, Documents, General
Intangibles and Instruments.
"Section" means a numbered section of this Security Agreement, unless
another document is specifically referenced.
"Stock Rights" means any stock, any dividend or other distribution and
any other right or property which a Grantor shall receive or shall become
entitled to receive for any reason whatsoever with respect to, in substitution
for or in exchange for any shares of stock constituting Collateral and any
stock, any right to
4
5
receive stock and any right to receive earnings, in which a Grantor now has or
hereafter acquires any right.
"Subsidiary Security Agreement" means this Subsidiary Security
Agreement, as it may be amended or modified and in effect from time to time.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Illinois.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to such terms
in the Credit Agreement.
2. GRANT OF SECURITY INTEREST.
In order to secure the full and complete payment and performance of the
Obligations when due, each Grantor hereby pledges and grants to the Agent for
the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers, equally and ratably in proportion to the total
Obligations owing at any time to the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest Rate Providers, a continuing lien and security
interest in the Collateral.
3. REPRESENTATIONS AND WARRANTIES.
Each Grantor represents and warrants to the Agent, each Co-Agent, each
Bank and each Interest Rate Provider that:
3.1 Existence and Standing. Such Grantor is duly incorporated, validly
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.
5
6
3.2 Authorization, Validity and Enforceability. The execution and
delivery by such Grantor of this Subsidiary Security Agreement has been duly
authorized by proper corporate proceedings, and this Subsidiary Security
Agreement constitutes a legal, valid and binding obligation of such Grantor and
creates a security interest which is enforceable against such Grantor in
accordance with its terms in respect of all now owned and hereafter acquired
Collateral pledged by such Grantor, 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.
3.3 Conflicting Laws and Contracts. Except as provided in Section 5.3
of the Credit Agreement, neither the execution and delivery by such Grantor of
this Subsidiary Security Agreement, nor the creation and perfection of the
security interest in the Collateral granted by such Grantor hereunder, nor
compliance with the provisions hereof will violate any law, rule, regulation,
order, writ, judgment, injunction, decree or award binding on such Grantor or
such Grantor's certificate of incorporation or bylaws or the provisions of any
indenture, instrument or agreement to which such Grantor is a party or is
subject, or by which it, or its property, is bound, or conflict with or
constitute a default thereunder, or result in the creation or imposition of any
Lien in, of or on the property of such Grantor pursuant to the terms of any such
indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, this Subsidiary Security Agreement or the grant of
the securi-
6
7
ty interest in the Collateral pursuant hereto, other than the filing, within the
period established by applicable law, of this Subsidiary Security Agreement with
the FCC and as otherwise provided in Section 5.3 to the Credit Agreement.
3.4 Principal Location. Such Grantor's mailing address and the location
of its chief executive office and the books and records relating to the
Receivables pledged by such Grantor are disclosed in Exhibit "A" hereto; such
Grantor has no other places of business except those set forth in Exhibit "A"
hereto.
3.5 Property Locations. The Inventory and Equipment and Fixtures
pledged by such Grantor are located solely at the locations described in Exhibit
"A" hereto and have not, within the four months preceding the date of this
Security Agreement, been located at any other locations. None of said locations
are leased by such Grantor as lessee except those designated in Part B of
Exhibit "A" hereto.
3.6 No Other Names. Except as set forth on Exhibit "A" hereto, such
Grantor has not conducted business under any name except the name in which it
has executed this Subsidiary Security Agreement.
3.7 No Default. No Default, Unmatured Default or L/C Default exists as
of the date hereof.
3.8 Receivables. The names of the obligors, amounts owing, due dates
and other information with respect to the Receivables pledged by such Grantor
are and will be correctly stated in all material respects in all records of such
Grantor relating thereto and in all invoices and reports with respect thereto
furnished to the Agent by such Grantor from time to time upon a request
therefor.
7
8
3.9 Filing Requirements. None of the Equipment pledged by such Grantor
(other than vehicles) is covered by any certificate of title. No security
interests or liens have been filed in respect of any of the Collateral under any
federal statute (other than filings with the United States Patent and Trademark
Office with respect to federally registered patents and trademarks). The legal
description and street address of those properties designated by the Agent on
which any Fixtures pledged by such Grantor are located are set forth in Exhibit
"B" hereto together with the name and address of the record owner of each such
property. Upon (a) filing financing statements naming each Grantor as "debtor"
and the Agent as "secured party" and describing the Collateral in the filing
offices set forth for each such Grantor on Exhibit "E" hereto and (b) the
Instruments listed on Exhibit "D" hereto which constitute Collateral having been
delivered to the Agent, the security interests in the Collateral (other than (i)
motor vehicles, (ii) assets of Georgia Network Equipment, Inc., (iii) Deposit
Accounts, (iv) federally registered patents and trademarks to the extent a
filing with the United States Patent and Trademark Office is required to perfect
a security interest therein and (v) fixtures on real property owned or leased by
the Company or any Subsidiary which is not subject to a Mortgage granted to the
Agent hereunder) will constitute perfected security interests therein superior
and prior to all Liens (other than Liens permitted by Section 6.17 of the Credit
Agreement).
3.10 No Financing Statements. No financing statement describing all or
any portion of the Collateral pledged by such Grantor which has not lapsed or
been terminated naming such Grantor as debtor has been filed in any jurisdiction
except financing statements (a) naming the Agent as secured party, (b) covering
Liens permitted by Section 6.17 of the Credit Agreement and (c) as described in
Exhibit "C" hereto.
8
9
3.11 Pledged Securities. Exhibit "D" hereto sets forth a complete and
accurate list of the Instruments, if any, delivered by such Grantor to the Agent
for the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers. Such Grantor is the direct and beneficial owner of
each share of stock, if any, listed on Exhibit "D" annexed hereto as being owned
by it. Such Grantor further represents and warrants that all of such shares of
stock have been duly and validly issued, are fully paid and non-assessable and
are owned by such Grantor free and clear of any Liens, except for the security
interest granted to the Agent hereunder and Liens permitted by Section 6.17 of
the Credit Agreement.
4. COVENANTS.
From the date of this Subsidiary Security Agreement and thereafter
until this Subsidiary Security Agreement is terminated:
4.1 General.
4.1.1 Inspection. Each Grantor will permit the Agent, the
Co-Agents, the L/C Providers or any Bank, by its or their representatives and
agents, to inspect the Collateral pledged by such Grantor, to examine and
(except in the case of confidential information relating to the Company's or any
Grantor's relationship with third parties) make copies of the records of such
Grantor relating thereto, and to discuss such Collateral and the records of such
Grantor with respect thereto with, and to be advised as to the same by, such
Grantor's officers and employees and, after the occurrence and during the
continuance of any Default, Unmatured Default or L/C Default, with any person or
entity which is or may be obligated on any Receivable pledged by such Grantor,
all at such reasonable times and intervals as the Agent or any Bank may
determine, all at such Grantor's expense.
9
10
4.1.2 Taxes. Each Grantor will pay before they become delinquent
all taxes, assessments and governmental charges and levies upon the Collateral,
except those which are being contested in good faith by appropriate proceedings
and with respect to which no Lien exists other than Liens permitted by Section
6.17 of the Credit Agreement.
4.1.3 Records and Reports. Each Grantor will maintain complete and
accurate books and records with respect to the Collateral pledged by such
Grantor, and furnish to the Agent, with sufficient copies for each of the Banks,
and any L/C Providers and any Interest Rate Providers, such reports relating to
such Collateral as the Agent shall from time to time reasonably request.
4.1.4 Notice of Default. Each Grantor will give prompt notice in
writing to the Agent, the Banks, and any L/C Providers and any Interest Rate
Providers of the occurrence of any Default, Unmatured Default or L/C Default and
of any other development (other than the issuance or adoption of any new
federal, state or local statute, regulation or ordinance or any other
development affecting the broadcasting industry generally), financial or
otherwise, which is reasonably likely to materially adversely affect a
substantial portion of the Collateral or the ability of such Grantor to pay or
perform its obligations hereunder.
4.1.5 Financing Statements and Other Actions. Each Grantor will
execute and deliver to the Agent all financing statements and other documents
(and, if so requested by the Agent or any Bank, use its best efforts to obtain
landlord waivers) and take such further actions from time to time reasonably
requested by the Agent, any Co-Agent or any Bank in order to establish and
maintain a first perfected security interest in the Collateral pledged by such
Grantor or to otherwise obtain
10
11
the full benefits of this Security Agreement. In addition, without limiting the
generality of the foregoing, each Grantor will
(a) ▇▇▇▇ conspicuously each and every writing which individually or
which when taken with one or more other writings constitutes Chattel Paper
included in the Collateral with a legend, in form and substance satisfactory to
the Agent, indicating the interest of the Agent therein;
(b) after the occurrence and during the continuance of a Default or
L/C Default, ▇▇▇▇ conspicuously each document included in the Receivables and,
at the request of the Agent, each of its records pertaining to the Collateral
with a legend, in form and substance satisfactory to the Agent, indicating that
such document or Collateral is subject to the security interest granted hereby;
and
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Agent may request, in order to perfect and preserve the
security interests and other rights granted or purported to be granted to the
Agent hereby.
4.1.6 Disposition of Collaterial. No Grantor will sell, lease or
otherwise dispose of the Collaterial, except as permitted by Section 6.13 of
the Credit Agreement.
4.1.7 Liens. No Grantor will create, incur or suffer to exist any
Lien except the security interest created by this Subsidiary Security Agreement
and Liens permitted by Section 6.17 of the Credit Agreement. Each Grantor agrees
to warrant and defend title to and ownership of the Collateral pledged by such
Grantor
11
12
and the lien created by this Subsidiary Security Agreement against the claims of
all Persons and maintain and preserve such lien at all times during the term of
this Subsidiary Security Agreement.
4.1.8 Change in Location or Name. No Grantor will (i) have any
Inventory, Equipment or Fixtures or proceeds or products thereof (other than
Collateral disposed of as permitted by Section 4.1.6) at a location other than a
location of such Grantor specified in Exhibit "A" hereto or any jurisdiction in
the United States in which a financing statement or similar evidence of a
security interest under applicable law has been filed against such Grantor as
debtor by the Agent as secured party, (ii) maintain records relating to the
Receivables at a location of such Grantor other than at the location specified
on Exhibit "A", (iii) maintain a place of business at a location other than a
location of such Grantor specified on Exhibit "A" hereto, (iv) change its name,
or (v) change its mailing address, unless such Grantor shall have given the
Agent not less than 30 days' prior written notice thereof.
4.1.9 Other Financing Statements. No Grantor will sign or authorize
the signing on its behalf of any financing statement naming it as debtor
covering all or any portion of the Collateral, except financing statements (a)
naming the Agent as secured party, (b) covering Liens permitted by Section 6.17
of the Credit Agreement and (c) as described in Exhibit "C" hereto.
4.2 Receivables.
4.2.1 Certain Agreements on Receivables. No Grantor will make or
agree to make any discount, credit, rebate or other reduction in the original
amount owing on a Receivable or accept in satisfaction of a Receivable less than
the original amount thereof, except that, so long as no Default or L/C Default
has occurred
12
13
and is continuing, each Grantor may reduce the amount of Accounts pledged by
such Grantor in accordance with its present policies and in the ordinary course
of business.
4.2.2 Collection of Receivables. Except as otherwise provided in
this Subsidiary Security Agreement or the Credit Agreement, each Grantor will
collect and enforce, at such Grantor's sole expense, all amounts due or
hereafter due to such Grantor under the Receivables pledged by such Grantor.
4.2.3 Delivery of Invoices. Each Grantor will deliver to the Agent
immediately upon its request while a Default or L/C Default exists duplicate
invoices with respect to each Account pledged by such Grantor bearing such
language of assignment as the Agent shall specify.
4.2.4 Disclosure of Counterclaims on Receivables. If any discount,
credit, agreement to make a rebate or to otherwise reduce the amount owing on a
Receivable in excess of $50,000 exists or if, to the knowledge of any Grantor,
any dispute, setoff, claim, counterclaim or defense exists or has been asserted
or threatened with respect to any such Receivable, the Grantor who pledged such
Receivable will disclose such fact to the Agent in writing in connection with
the inspection by the Agent of any record of such Grantor relating to such
Receivable and in connection with any invoice or report furnished by such
Grantor to the Agent relating to such Receivable.
4.3 Inventory and Equipment.
4.3.1 Maintenance of Goods. Each Grantor will do all things
necessary to maintain, preserve, protect and keep the Inventory and the
Equipment pledged by such Grantor in good repair and working and saleable
13
14
condition, except for obsolete Equipment no longer used or useful in such
Grantor's business.
4.3.2 Insurance. Each Grantor will (i) maintain fire and extended
coverage insurance on the Inventory and Equipment pledged by such Grantor
containing a lender's loss payable clause in favor of the Agent (or, upon
request therefor, designating the Agent as an additional insured) and providing
that said insurance will not be terminated except after at least 30 days'
written notice from the insurance company to the Agent, (ii) maintain such other
insurance on such Inventory and Equipment for the benefit of the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers as is
consistent with sound practice in the broadcasting industry and (iii) furnish to
the Agent upon the request of the Agent from time to time the originals of all
policies of insurance on such Inventory and Equipment and certificates with
respect to such insurance.
4.4 Instruments; Delivery of Pledged Collateral. Each Grantor will (i)
deliver to the Agent immediately upon the execution of this Subsidiary Security
Agreement, the originals of all Instruments included in the Collateral pledged
by such Grantor (other than, so long as no Default or L/C Default has occurred
and is continuing, proceeds of Inventory and Receivables collected in the
ordinary course of business) which are evidenced by certificates, endorsed in
blank, marked with such legends and assigned as the Agent shall specify, and
(ii) hold in trust for the Agent, the Co-Agents, the Banks, any L/C Providers
and any Interest Rate Providers upon receipt and immediately thereafter deliver
to the Agent any Instrument evidencing or constituting Collateral (other than,
so long as no Default or L/C Default has occurred and is continuing, ordinary
cash dividends paid with respect to the Instruments which are stock and the
Stock Rights related thereto and proceeds of Inventory
14
15
and Receivables collected in the ordinary course of business).
4.5 Uncertificated Securities. Each Grantor will permit the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers from
time to time to cause the appropriate issuers of uncertificated securities
constituting Instruments pledged by such Grantor to ▇▇▇▇ their books and records
with the numbers and face amounts of all uncertificated securities constituting
Instruments and all rollovers and replacements therefor to reflect the Lien of
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers granted pursuant to this Subsidiary Security Agreement.
4.6 Stock.
4.6.1 Changes in Capital Structure of Issuers. Except as permitted
by Section 6.12 of the Credit Agreement, no Grantor will (i) permit or suffer
any issuer of corporate securities constituting Collateral which issuer is
controlled by such Grantor to dissolve, liquidate, retire any of its capital
stock, reduce its capital or merge or consolidate with any other entity, or (ii)
vote any of the Instruments in favor of any of the foregoing.
4.6.2 Stock Rights. Each Grantor will deliver to the Agent,
promptly upon receipt, all Stock Rights pledged by such Grantor (other than, so
long as no Default or L/C Default has occurred and is continuing, ordinary cash
dividends received with respect to the Instruments which are stock) and agrees
that such Stock Rights shall be held in trust by such Grantor for the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers until
delivery thereof to the Agent.
15
16
4.6.3 Registration of Instruments. Each Grantor will permit any
registrable Collateral pledged by such Grantor to be registered in the name of
the Agent or its nominee at any time a Default or L/C Default exists at the
option of the Required Banks.
4.6.4 Exercise of Rights in Instruments. Each Grantor will permit
the Agent or its nominee at any time a Default or L/C Default exists, without
notice but subject to compliance with applicable law and subject to Section 8.18
hereof, to exercise all voting and corporate rights relating to the Collateral
pledged by such Grantor, including, without limitation, exchange, subscription
or any other rights, privileges, or options pertaining to any shares of the
stock pledged by such Grantor as Collateral and the Stock Rights as if it were
the absolute owner thereof.
4.7 Federal Claims: Notice to Agent. If at any time from time to time
the Agent directs the Company to begin doing so, the Company will promptly
notify the Agent of any Collateral pledged by such Grantor which constitutes a
claim against the United States government or any instrumentality or agency
thereof, the assignment of which claim is restricted by federal law.
5. DEFAULT.
5.1 Default shall mean "Default" as defined in the Credit Agreement,
and "L/C Default" shall mean any default under the Citicasters L/C Documents.
5.2 Acceleration and Remedies. If any Default described in Sections 7.6
or 7.7 of the Credit Agreement shall occur and be continuing with respect to the
Company, the Obligations shall immediately become due and payable without any
election or action on the part of the Agent, any Co-Agent, any Bank, any L/C
Providers or any Interest Rate Provider. If any other Default shall occur
16
17
and be continuing, the Required Banks may declare the Obligations to be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Grantor hereby expressly waives. If any L/C Default
shall occur and be continuing, subject to the provisions of any intercreditor
agreement in effect from time to time, the L/C Providers may declare the
Obligations to be immediately due and payable, without present- ment, demand,
protest or notice of any kind, all of which the Grantor hereby expressly waives.
In such event, the Agent on behalf of the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers may, subject to Section
8.18:
5.2.1 Obligations That May Be Accelerat- ed. Exercise any or all of
the rights and remedies provided (i) in this Subsidiary Security Agreement, (ii)
to a secured party when a debtor is in default under a security agreement by the
Uniform Commercial Code as enacted in the State of Illinois or other applicable
jurisdiction, as amended, and (iii) by any other applicable law including,
without limitation, any law governing the exercise of a bank's right of setoff
or bankers' lien; and
5.2.2 Contingent Obligations. With respect to Obligations which are
contingent and cannot be accelerated by their nature, the Agent may require the
Grantors (or any of them) to deposit cash or other acceptable collateral in an
amount sufficient to cover principal and interest which will have accrued by the
maturity date on said Obligations to be held as security for said Obligations in
the special collateral account referred to in Section 7.
5.3 Grantor's Obligations upon Default. Upon the request of the Agent
after the occurrence and during
17
18
the continuance of a Default or L/C Default, each Grantor will, subject to
Section 8.18:
5.3.1 Assembly of Collateral. Assemble and make available to the
Agent the Collateral pledged by such Grantor and all records relating thereto at
any place or places reasonably specified by the Agent.
5.3.2 Agent Access. Permit the Agent, by the Agent's
representatives and agents, to enter any premises where all or any part of the
Collateral pledged by such Grantor, or the books and records relating thereto,
or both, are located, to take possession of all or any part of such Collateral
and to remove all or any part of such Collateral.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of the Agent, any Co- Agent, any Bank or any
Interest Rate Provider to exercise any right or remedy granted under this
Subsidiary Security Agreement shall impair such right or remedy or be construed
to be a waiver of any Default or any L/C Default or an acquiescence therein, and
any single or partial exercise of any such right or remedy shall not preclude
other or further exercise thereof or the exercise of any other right or remedy,
and no waiver, amendment or other variation of the terms, conditions or
provisions of this Subsidiary Security Agreement whatsoever shall be valid
unless in writing signed by the Agent and the Required Banks, and then only to
the extent in such writing specifically set forth; provided, however, that any
amendment purporting to release all or any substantial portion of the Collateral
shall be valid only if approved in accordance with Section 8.2 of the Credit
Agreement. All rights and remedies contained in this Subsidiary Security
Agreement or by law afforded shall be cumulative and all shall be available to
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers until the Obligations to the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest
18
19
Rate Providers until the Obligations to the Agent, the Co-Agents, the Banks, any
L/C Providers and any Interest Rate Providers have been paid in full and the
Commitments have been terminated.
7. PROCEEDS; COLLECTION OF RECEIVABLES.
7.1 Collection of Receivables. The Agent may at any time after the
occurrence and during the continuance of a Default or a L/C Default, by giving
the Grantors written notice, elect to require that any or all of the Receivables
be paid directly to the Agent for the benefit of the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers. In such event, the
Grantor or Grantors pledging such Receivables shall, and shall permit the Agent
to, promptly notify the account debtors or obligors under the Receivables of the
Agent's, the Co-Agents', the Banks', any L/C Provider's and any Interest Rate
Provider's interest therein and direct such account debtors or obligors to make
payment of all amounts then or thereafter due under the Receivables directly to
the Agent. Upon receipt of any such notice from the Agent, the Grantors shall
thereafter hold in trust for the Agent, the Co-Agents, the Banks, any L/C
Providers and any Interest Rate Providers all amounts and proceeds received them
with respect to such Receivables and other Collateral and immediately and at all
times thereafter deliver to the Agent all such amounts and proceeds in the same
form as so received, whether by cash, check, draft or otherwise, with any
necessary endorsements. The Agent shall hold and apply funds so received as
provided by the terms of Sections 7.3 and 7.4.
7.2 Lockboxes. Upon request of the Agent at any time after the
occurrence and during the continuance of a Default or a L/C Default, the
Grantors shall execute and deliver to the Agent the Agent's standard form
irrevocable lockbox agreements.
19
20
7.3 Special Collateral Account. The Agent may at any time after the
occurrence and during the continuance of a Default or a L/C Default require all
cash proceeds of the Collateral received by the Agent to be deposited in a
special non-interest-bearing cash collateral account with the Agent and held
there as security for the Obligations. No Grantor shall have any control
whatsoever over said cash collateral account. The Agent may from time to time
(a) deposit the collateral balances in said cash collateral account into the
general operating account of any Grantor with the Agent or (b) apply the
collected balances in said cash collateral account to the payment of the
Obligations whether or not the Obligations shall then be due.
7.4 Application of Proceeds. The proceeds of the Collateral shall be
applied by the Agent to payment of the Obligations in the following order unless
a court of competent jurisdiction shall otherwise direct:
(a) FIRST, to payment of all reasonable costs and expenses of the
Agent incurred in connection with the collection and enforcement of the
Obligations or of the security interest granted pursuant to this Subsidiary
Security Agreement;
(b) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest, fees and other amounts (other than
principal), pro rata amongst each Bank, the Agent, each Co-Agent and each L/C
Provider in accordance with the proportion which the accrued interest, fees and
other amounts (other than principal) constituting Obligations owing to each such
Bank, Agent, Co-Agent and L/C Provider bears to the aggregate amount of accrued
interest, fees and other amounts (other than principal) constituting Obligations
owing to all of the Banks, the Agent, the Co-Agents and the L/C Providers;
20
21
(c) THIRD, to payment of the principal of the Obligations owing to
the Banks, any Bank, any L/C Providers or any Interest Rate Provider, pro rata
amongst the Banks, any L/C Providers and any Interest Rate Providers in
accordance with the proportion that the principal of the Obligations owing to
each such Bank, L/C Provider or Interest Rate Provider bears to the aggregate
amount of principal of the Obligations owing to all of the Banks, any L/C
Providers and any Interest Rate Providers; and
(d) FOURTH, the balance, if any, after all of the Obligations have
been satisfied, shall be deposited by the Agent into the Grantors' general
operating account(s) with the Agent.
8. GENERAL PROVISIONS.
8.1 Notice of Disposition of Collateral. Each Grantor hereby waives
notice of the time and place of any public sale or the time after which any
private sale or other disposition of all or any part of the Collateral may be
made. To the extent such notice may not be waived under applicable law, any
notice made shall be deemed reasonable if sent to a Grantor, addressed as set
forth in Section 9, at least 10 days prior to any such public sale or the time
after which any such private sale or other disposition may be made.
8.2 Compromises and Collection of Collateral. Each Grantor, the Banks,
the Co-Agents, the Agent, any L/C Providers and any Interest Rate Providers
recognize that setoffs, counterclaims, defenses and other claims may be asserted
by obligors with respect to certain of the Receivables, that certain of the
Receivables may be or become uncollectible in whole or in part and that the
expense and probability of success in litigating a disputed Receivable may
exceed the amount that reasonably
21
22
may be expected to be recovered with respect to a Receivable. In view of the
foregoing, each Grantor agrees that the Agent may at any time and from time to
time, if a Default or a L/C Default has occurred and is continuing, compromise
with the obligor on any Receivable pledged by such Grantor, accept in full
payment of any such Receivable such amount as the Agent in its reasonable
discretion shall determine or abandon any such Receivable, and any such action
by the Agent shall be commercially reasonable so long as the Agent acts in good
faith based on information known to it at the time it takes any such action.
8.3 Secured Party Performance of Company Obligations. Without having
any obligation to do so, the Agent may perform or pay any obligation in this
Subsidiary Security Agreement which any Grantor has agreed to perform or pay but
which it has failed to so perform or pay in a timely manner after a request
therefor from the Agent and the Grantors shall reimburse the Agent for any
amounts paid by the Agent pursuant to this Section 8.3. The Grantors' obligation
to reimburse the Agent pursuant to the preceding sentence shall be an Obligation
payable on demand.
8.4 Authorization for Secured Party to Take Certain Action. Each
Grantor irrevocably authorizes the Agent at any time and from time to time in
the sole discretion of the Agent and irrevocably appoints the Agent as its
attorney in fact to act on behalf of such Grantor (i) at any time (if such
Grantor has failed to do so promptly upon a request therefor) (a) to execute on
behalf of such Grantor as debtor and to file financing statements necessary or
desirable in the Agent's sole discretion to perfect and to maintain the
perfection and priority of the Agent's security interest in the Collateral
pledged by such Grantor, and (b) to file a carbon, photographic or other
reproduction of this Subsidiary Security Agreement or any financing statement
with re-
22
23
spect to the Collateral pledged by such Grantor as a financing statement in such
offices as the Agent in its sole discretion deems necessary or desirable to
perfect and to maintain the perfection and priority of the Agent's security
interest in such Collateral and (ii) at any time after the occurrence and during
the continuance of a Default or a L/C Default (a) to endorse and collect any
cash proceeds of the Collateral, (b) subject to the terms of Section 4.1.6, to
enforce payment of the Receivables pledged by such Grantor in the name of the
Agent or such Grantor, and (c) to apply the proceeds of any Collateral pledged
by such Grantor received by the Agent to the Obligations as provided in Section
7. Each Grantor hereby acknowledges, consents and agrees that the power of
attorney granted pursuant to this Section is irrevocable and coupled with an
interest.
8.5 Specific Performance of Certain Covenants. Each Grantor
acknowledges and agrees that a breach of any of the covenants contained in
Sections 4.1.6, 4.4, 5.3, 7 and 8.7 will cause irreparable injury to the Agent,
the Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers that
the Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers have no adequate remedy at law in respect of such breaches and
therefore agrees, without limiting the right of the Agent, the Co-Agents, the
Banks, any L/C Providers or any Interest Rate Providers to seek and obtain
specific performance of other obligations of such Grantor contained in this
Subsidiary Security Agreement, that the covenants of such Grantor contained in
the Sections referred to in this Section 8.5 shall be specifically enforceable
against such Grantor.
8.6 Use and Possession of Certain Premises. Subject to the provisions
of Section 8.18, upon the occurrence and during the continuance of a Default or
a L/C Default, the Agent shall be entitled to occupy and use any premises owned
or leased by any Grantor where any
23
24
of the Collateral pledged by such Grantor or any records relating to such
Collateral are located until the Obligations are paid or the Collateral is
removed therefrom, whichever first occurs, without any obligation to pay such
Grantor for such use and occupancy.
8.7 Dispositions Not Authorized. No Grantor is authorized to sell or
otherwise dispose of the Collateral except as set forth in Section 4.1.6 and
notwithstanding any course of dealing between any Grantor and the Agent or other
conduct of the Agent, no authorization to sell or otherwise dispose of the
Collateral (except as set forth in Section 4.1.6) shall be binding upon the
Agent, the Co-Agents, the Banks, any L/C Providers or any Interest Rate
Providers unless such authorization is in writing signed by the Agent with the
consent of the Required Banks.
8.8 Definition of Certain Terms. Terms defined in the Illinois Uniform
Commercial Code which are not otherwise defined in this Subsidiary Security
Agreement are used in this Subsidiary Security Agreement as defined in the
Illinois Commercial Code as in effect on the date hereof.
8.9 Benefit of Agreement. The terms and provisions of this Subsidiary
Security Agreement shall be binding upon and inure to the benefit of the
Grantors, the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers and their respective successors and assigns, except that
no Grantor shall have the right to assign its rights under this Subsidiary
Security Agreement or any interest herein, without the prior written consent of
the Agent.
8.10 Survival of Representations. All representations and warranties of
the Grantors contained in this Subsidiary Security Agreement shall survive the
24
25
execution and delivery of this Subsidiary Security Agreement.
8.11 Taxes and Expenses. Any Taxes payable or ruled payable by Federal
or State authority in respect of this Subsidiary Security Agreement shall be
paid by the Grantors, together with interest and penalties, if any, other than
those Taxes expressly excluded under Section 3.2(a)(i) and 3.2(a)(ii) of the
Credit Agreement. The Grantors shall reimburse the Agent for any and all
reasonable out-of-pocket expenses and internal charges customarily charged by
the Agent (including reasonable attorneys', auditors' and accountants' fees and
reasonable time charges of attorneys, paralegals, auditors and accountants who
may be employees of the Agent) paid or incurred by the Agent in connection with
the preparation, execution, delivery, administration, collection and enforcement
of this Subsidiary Security Agreement and in the audit, analysis,
administration, collection, preservation or sale of the Collateral (including
the expenses and charges associated with any periodic or special audit of the
Collateral).
8.12 Headings. The title of and section headings in this Subsidiary
Security Agreement are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this Subsidiary
Security Agreement.
8.13 Termination. This Security Agreement shall continue in effect
(notwithstanding the fact that from time to time there may be no Obligations or
commitments therefor outstanding) until (i) the Agent has received written
notice of its termination from the Company or its agents or the Liens in favor
of the Agent have been released, (ii) no Obligations to the Agent, the
Co-Agents, the Banks, any L/C Providers or any Interest Rate Providers shall be
outstanding and (iii) the Commitments shall have been terminated. At such time,
at the
25
26
reasonable request and at the sole expense of the Company, the Agent shall
execute and deliver such documents and instruments as may be necessary to
evidence such termination and release.
8.14 Entire Agreement. This Security Agreement embodies the entire
agreement and understanding between the Grantors and the Agent relating to the
Collateral and supersedes all prior agreements and understandings between the
Grantors and the Agent relating to the Collateral.
8.15 CHOICE OF LAW; CONSENT TO JURISDICTION. THIS SUBSIDIARY SECURITY
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF ILLINOIS. EACH GRANTOR HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS SUBSIDIARY SECURITY AGREEMENT AND EACH GRANTOR HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT.
8.16 Distribution of Reports. Each Grantor authorizes the Agent, as the
Agent may elect in its sole discretion, to discuss with and furnish to the
Co-Agents, the Banks, any L/C Providers, any Interest Rate Providers or to any
other person or entity having an interest in the Obligations (whether as a
guarantor, pledgor of collateral, participant or otherwise) all financial
statements, audit reports and other information pertaining to such Grantor
whether such information was provided by such Grantor or prepared or obtained by
the Agent provided that such other person or entity agrees to hold such
information in confidence except for disclosure: (i) to legal counsel,
accountants and other professional advisors to such purchaser, (ii) to
regulatory officials, (iii) as required by law, regulation or legal process or
26
27
(iv) in connection with any legal proceeding to which such person or entity is a
party. Neither the Agent nor any of its employees, officers, directors or agents
makes any representation or warranty regarding any audit reports or other
analyses of any Grantor's condition which the Agent may in its sole discretion
prepare and elect to distribute, nor shall the Agent or any of its employees,
officers, directors or agents be liable to any person or entity receiving a copy
of such reports or analyses for any inaccuracy or omission contained in or
relating thereto.
8.17 Indemnity. Each Grantor hereby agrees to assume liability for, and
does hereby agree to indemnify and keep harmless the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers, and their respective
successors, assigns, agents and employees, from and against any and all
liabilities, damages, penalties, suits, costs, and expenses of any kind and
nature, imposed on, incurred by or asserted against the Agent, the Co-Agents,
the Banks, any L/C Providers or any Interest Rate Providers, or their respective
successors, assigns, agents and employees, in any way relating to or arising out
of this Subsidiary Security Agreement, or the manufacture, purchase, acceptance,
rejection, ownership, delivery, lease, possession, use, operation, condition,
sale, return or other disposition of any Collateral (including, without
limitation, latent and other defects, whether or not discoverable by the Agent,
the Co-Agents, the Banks, any L/C Providers or any Interest Rate Providers or
any Grantor, and any claim for patent, trademark or copyright infringement),
excluding any such losses, claims, damages, penalties, judgments, liabilities,
costs and expenses which result from the gross negligence or willful misconduct
of the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider.
27
28
8.18 Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary, this
Subsidiary Security Agreement, the other Loan Documents and the transactions
contemplated hereby and thereby (i) do not and will not constitute, create, or
have the effect of constituting or creating, directly or indirectly, actual or
practical ownership of any Grantor by the Agent, the Co-Agents, the Banks, any
L/C Providers or any Interest Rate Providers, or control, affirmative or
negative, direct or indirect, by the Agent, the Co-Agents, the Banks, any L/C
Providers or any Interest Rate Providers over the management or any other aspect
of the operation of any Grantor, which ownership and control remains exclusively
and at all times in the Company and such Grantor, and (ii) except for the grant
of a security interest hereunder to the extent permitted by law, do not and will
not constitute the transfer, assignment, or disposition in any manner,
voluntarily or involuntarily, directly or indirectly, of any license at any time
issued by the FCC to any Grantor ("License"), or the transfer of control of any
Grantor within the meaning of Section 310 of the Communications Act of 1934, as
amended.
(b) Notwithstanding any other provision of this Subsidiary
Security 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 the Agent, the Co- Agents, the Banks, any L/C Providers and any Interest Rate
Providers hereunder which would affect the operational, voting, or other control
of any Grantor, 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.
28
29
(c) Subject to Section 8.18(e), if a Default or a L/C Default
shall have occurred and be continuing, each Grantor shall take any action which
the Agent, on behalf of the Agent, the Co-Agents, the Banks, any L/C Providers
and any Interest Rate Providers may reasonably request in order to transfer and
assign to the Agent, or to such one or more third parties as the Agent may
designate, or to a combination of the foregoing, each License. To enforce the
provisions of this Section 8.18 the Agent 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 of
control of each such License for the purpose of seeking a bona fide purchaser to
whom control will ultimately be transferred. Each Grantor hereby agrees to
authorize such an involuntary transfer of control upon the request of the
receiver so appointed and, if any Grantor shall refuse to authorize the
transfer, such Grantor's approval may be required by the court. Upon the
occurrence and continuance of a Default or a L/C Default, each Grantor shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this Subsidiary
Security 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) Each Grantor acknowledges that the assignment or transfer of
each License is integral to the Agent's, the Co-Agents', the Banks', any L/C
Provider's and any Interest Rate Provider's realization of the value of the
Collateral, that there is no adequate remedy at law for failure by such Grantor
to comply with the provi-
29
30
sions of this Section 8.18 and that such failure would not be adequately
compensable in damages, and therefore agrees that the agreements contained in
this Section 8.18 may be specifically enforced.
(e) Notwithstanding anything to the contrary contained in this
Subsidiary Security Agreement or in any other Transaction Document, neither the
Agent, any Co-Agent, any Bank, any L/C Provider nor any Interest Rate Provider
shall, without first obtaining the approval of the FCC, take any action pursuant
to this Subsidiary Security Agreement which would constitute or result in any
assignment of a License or any change of control of any License or any Grantor
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.
8.19 Insurance Proceeds. Subject to the provisions set forth in Section
6.18 of the Credit Agreement, so long as no Default, Unmatured Default or L/C
Default has occurred and is continuing or is reasonably anticipated to occur,
insurance proceeds received in respect of Inventory, Equipment and Fixtures
shall be remitted to the Grantor pledging such Collateral by the Agent, provided
that such proceeds are used to rebuild, repair or restore such Inventory,
Equipment or Fixtures to a condition at least as good as its former condition or
to replace such Inventory, Equipment or Fixture with like property of at least
equal value.
8.20 Actions Not Releases; Waiver of Defenses. The lien hereunder and
the Grantors' obligations and the Agent's, the Co-Agents', the Banks', any L/C
Provider's and any Interest Rate Provider's rights hereunder shall not be
released, diminished, impaired, or adversely affected by the occurrence of any
one or more of the following events: (i) the taking or accepting of any other
security or assurance at any time existing in connection with any or all of the
Obligations; (ii) any release, surrender, exchange, subordination or loss of any
security or assurance at any time existing in
30
31
connection with any or all of the Obligations; (iii) the modification of,
amendment to, or waiver or compliance with any terms of any Loan Document; (iv)
the insolvency, bankruptcy, or lack of corporate power of any party at any time
liable for the payment of any or all of the Obligations, whether now existing or
hereafter occurring; (v) any renewal, extension, or rearrangement of the payment
of any or all of the Obligations, either with or without notice to or consent of
any Grantor in accordance with any Loan Document, or any adjustment, indulgence,
forbearance, or compromise that may be granted or given by the Agent, any
Co-Agent, any Bank or any Interest Rate Provider to any Grantor or the Company;
(vi) any neglect, delay, omission, failure, or refusal of the Agent, any
Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider to take or
prosecute any action in connection with any other agreement, document, guaranty,
or instrument evidencing, securing, or assuring the payment of all or any of the
Obligations; (vii) any failure of the Agent, any Co-Agent, any Bank, any L/C
Provider or any Interest Rate Provider to notify any Grantor of any renewal,
extension, or assignment of the Obligations or any part thereof, or the release
of any security, or of any other action taken or refrained from being taken by
the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider against the Company or any Grantor or any new agreement among the
Agent, any Co- Agent, any Bank, any L/C Provider, any Interest Rate Provider and
any Grantor (or any combination thereof), it being understood that neither the
Agent, any Co-Agent, any Bank, any L/C Provider nor any Interest Rate Provider
shall be required to give any Grantor any notice of any kind under any
circumstances whatsoever, except as required under applicable law, with respect
to or in connection with the Obligations, including, without limitation, notice
of acceptance of this Subsidiary Security
31
32
Agreement or any Collateral ever delivered to or for the account of the Banks
hereunder; (viii) the illegality, invalidity, or unenforceability of all or any
part of the Obligations against any party obligated with respect thereto by
reason of the fact that the Obligations, or the interest paid or payable with
respect thereto, exceeds the amount permitted by law, the act of creating the
Obligations, or any part thereof, is ultra ▇▇▇▇▇, or the officers creating same
acted in excess of their authority, or for any other reason; or (ix) any payment
by any party obligated with respect thereto is held to constitute a preference
under applicable laws or for any other reason the Agent, any Co-Agent, any Bank,
any L/C Provider or any Interest Rate Provider is required to refund such
payment or pay the amount thereof to someone else. Each Grantor expressly waives
any and all defenses now or hereafter arising or asserted by reason of (i) any
disability or other defense of any of the Company or any other Grantor with
respect to the Obligations, (ii) 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, (iii) the
cessation for any cause whatsoever of the liability of any of the Company or any
other Grantor (other than by reason of the full payment and performance of all
Obligations), (iv) any failure of the Agent to marshal assets in favor of any
Grantor or any other Person, (v) any failure of the Agent to give notice of sale
or other disposition to any Grantor or any defect in any notice that may be
given in connection with any sale or disposition, (vi) any act or omission of
the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider or others that directly or indirectly results in or aids the discharge
or release of any of the Company or any other Grantor or the Obligations or any
other security or guaranty therefor by operation of law or otherwise, (vii) any
law which provides that the obligation of a surety or guarantor must neither be
larger in amount nor in other respects
32
33
more burdensome than that of the principal or which reduces a surety's or
guarantor's obligation in proportion to the principal obligations, or (viii) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, any Grantor, all whether or not any Grantor shall have had notice
or knowledge of any act or omission referred to in the foregoing clauses (i)
through (viii) of this paragraph. Each Grantor 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 Security
Agreement or of the existence, creation or incurring of new or additional
Obligations.
8.21 Waiver of Subrogation. Each Grantor hereby irrevocably waives any
claim or other rights which it may now or hereafter acquire against the Company
or any other Grantor that arise from the existence, payment, performance or
enforcement of such Grantor's obligations under this Security Agreement or any
other Loan Document, including any right of subrogation, reimbursement,
exoneration, or indemnification, any right to participate in any claim or remedy
of the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider against the Company or any other Grantor or any collateral which the
Agent now has or hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including the right
to take or receive from the Company or any other Grantor, 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 any Grantor 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 such
33
34
Grantor for the benefit of, and held in trust for, the Agent, the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers, and shall forthwith be
paid to the Agent to be credited and applied upon the Obligations, whether
matured or unmatured. Each Grantor acknowledges that it will receive direct and
indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the waiver set forth in this Section is knowingly made in
contemplation of such benefits.
8.22 Grantors Remain Liable. Anything herein to the contrary
notwithstanding,
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein and shall
perform all of its duties and obligations under such contracts and agreements to
the same extent as if this Security Agreement had not been executed,
(b) the exercise by the Agent of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under any such
contracts or agreements included in the Collateral, and
(c) neither the Agent, any Co-Agent, any Bank, any L/C Provider
nor any Interest Rate Provider shall have any obligation or liability under any
such contracts or agreements included in the Collateral by reason of this
Security Agreement, nor shall the Agent, any Co-Agent, any Bank, any L/C
Provider or any Interest Rate Provider be obligated to perform any of the
obligations or collect or enforce any claim for payment assigned hereunder.
9. NOTICES; COUNTERPARTS; ETC.
34
35
9.1 Sending Notices. Any notice required or permitted to be given under
this Subsidiary 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 personal delivery
or by telecopy, when received, addressed to each Grantor at the address set
forth on Exhibit "A" hereto as its chief executive office (with copies to ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, provided, however, that the failure to provide any such
copy shall not affect the validity or sufficiency of any such notice), to the
Agent at the address indicated below its signature hereto, to the Co-Agents and
the Banks at the addresses indicated below their respective signatures to the
Credit Agreement, to any L/C Providers at the addresses provided to the Company
and the Agent in writing by such L/C Providers and to any Interest Rate
Providers at the addresses provided to the Company and the Agent in writing by
such Interest Rate Providers.
9.2 Change in Address for Notices. Each Grantor, the Agent, the
Co-Agents, the Banks, any L/C Providers and any Interest Rate Providers may
change the address for service of notice upon it by a notice in writing to the
other parties.
9.3 Counterparts. This Security Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Subsidiary Security Agreement by
signing any such counterpart. This Security Agreement shall be effective when it
has been executed by each Grantor and the Agent.
9.4 Loan Document. This Security Agreement is a Loan Document executed
pursuant to the Credit Agreement
35
36
and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.
9.5 Amendments; etc. No amendment to or waiver of any provision of this
Security Agreement, nor consent to any departure by any Grantor herefrom, 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 given.
9.6 Joinder. Any other Person may become a Grantor under and become
bound by the terms and provisions hereof by executing and delivering to the
Agent a counterpart signature page hereto substantially in the form of Appendix
I hereto.
9.7 WAIVER OF JURY TRIAL. THE AGENT AND EACH GRANTOR 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 SECURITY AGREEMENT. EACH GRANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT, THE CO-AGENTS, THE
BANKS, ANY L/C PROVIDERS AND ANY INTEREST RATE PROVIDERS ENTERING INTO THE
CREDIT AGREEMENT, THE CITICASTERS L/C DOCUMENTS AND ANY RATE HEDGING AGREEMENTS,
RESPECTIVELY.
10. THE AGENT.
Banque Paribas has been appointed Agent of the Co-Agents, the Banks,
the L/C Providers and the Interest Rate Providers hereunder pursuant to Article
X of the Credit Agreement, and the Agent has agreed to act (and any successor
Agent shall act) as such hereunder only on the express conditions contained in
such Article X. Any
36
37
successor Agent appointed pursuant to Article X of the Credit Agreement shall be
entitled to all the rights, interests and benefits of the Agent hereunder.
37
38
IN WITNESS WHEREOF, the undersigned have executed this Subsidiary
Security Agreement as of the date first above written.
JACOR BROADCASTING OF FLORIDA, INC.
By:
-----------------------------------
Name:
Title:
JACOR BROADCASTING OF ATLANTA, INC.
By:
-----------------------------------
Name:
Title:
JACOR BROADCASTING OF KNOXVILLE, INC.
By:
-----------------------------------
Name:
Title:
JACOR BROADCASTING OF COLORADO, INC.
By:
-----------------------------------
Name:
Title:
38
39
JACOR BROADCASTING OF TAMPA BAY, INC.
By:
----------------------------------
Name:
Title:
JACOR BROADCASTING OF ST. LOUIS, INC.
By:
----------------------------------
Name:
Title:
JACOR CABLE, INC.
By:
----------------------------------
Name:
Title:
GEORGIA NETWORK EQUIPMENT, INC.
By:
----------------------------------
Name:
Title:
JACOR BROADCASTING CORPORATION
By:
----------------------------------
39
40
Name:
Title:
40
41
BROADCAST FINANCE, INC.
By:
----------------------------------
Name:
Title:
CHESAPEAKE SECURITIES, INC.
By:
----------------------------------
Name:
Title:
OIA BROADCASTING L.L.C.
By:
----------------------------------
Name:
Title:
1300 PNC Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇
BANQUE PARIBAS, as Agent
By:
----------------------------------
Name:
Title:
41
42
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
42
43
Appendix I to Subsidiary Security Agreement
[Form of Counterpart Signature Page to
Subsidiary Security Agreement]
By signing below, [each of] the undersigned becomes a Grantor under the
Subsidiary Security Agreement dated as of February , 1996, to which this
signature page is attached and is made a part, and is bound by the terms
thereof.
[Grantor]
Date: By:
--------------------- ------------------------
Name:
Title:
[Grantor]
Date: By:
--------------------- ------------------------
Name:
Title:
