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EXHIBIT 10.4
SECURITY AGREEMENT, dated as of April 24, 1998, made by XXXXX
BROADCASTING OF VERMONT, LLC, a Delaware limited liability company (the
"Borrower"), in favor of STC BROADCASTING, INC. of VERMONT SUBSIDIARY, a
Delaware corporation (the "Lender").
WITNESSETH:
WHEREAS, on the date hereof, the Lender is lending to the
Borrower the amount of Five Hundred Thousand Dollars ($500,000), as evidenced
by, and subject to the terms and conditions of, a Promissory Note dated as of
the date hereof, in the aggregate principal amount of Five Hundred Thousand
Dollars ($500,000.00) (as renewed, extended, refinanced, or modified from time
to time, the "Note"); and
WHEREAS, it is a condition precedent to the obligation of the
Lender to loan such amount to the Borrower pursuant to the Note that the
Borrower shall have executed and delivered this Agreement to the Lender.
NOW, THEREFORE, in consideration of the premises and to induce
the Lender to loan such amount to the Borrower pursuant to the Note, Borrower
hereby agrees with the Lender as follows:
SECTION I. DEFINED TERMS
A. DEFINITIONS.
1. Unless otherwise defined herein, terms
defined in the Note and used herein shall have the meanings given to them in
the Note, and the following terms, which are defined in the Uniform Commercial
Code in effect in the State of New York on the date hereof, are used herein as
so defined: Accounts, Chattel Paper, Documents, Equipment, Farm Products,
Instruments, and Inventory.
2. The following terms shall have the following
meanings:
"AGREEMENT" shall mean this Security
Agreement, as the same may be amended, restated, supplemented, or otherwise
modified from time to time.
"BORROWER OBLIGATIONS" is the collective
reference to the unpaid principal of and interest on the Note and all other
obligations and liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in the Note after the
maturity of the Note and interest accruing at the then applicable rate provided
in the Note after the filing of any petition in bankruptcy or the commencement
of any insolvency, reorganization, or like proceeding relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) to the Lender, whether direct or indirect,
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absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with the Note, this
Agreement, the Assumption Agreement dated as of the date hereof between Lender
and Borrower, the Interim Operating Agreement dated as of the date hereof among
the Borrower and the STC Parties named therein, or any other document made,
delivered, or given in connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses, or otherwise (including, without limitation, all fees and
disbursements of counsel to the Lender that are required to be paid by the
Borrower pursuant to the terms of any of the foregoing agreements).
"CAPITAL STOCK" shall mean any and all
shares, interests, participations or other equivalents (however designated) of
capital stock of a corporation of whatever class, any and all equivalent
ownership interests in a Person (other than a corporation) and any and all
warrants, rights or options to purchase any of the foregoing.
"CODE" shall mean the Uniform Commercial Code
as from time to time in effect in the State of New York.
"COLLATERAL" is as defined in Section II.
"COLLATERAL ACCOUNT" shall be any collateral
account established by the Lender as provided in Section V.
"COMMUNICATIONS ACT" is the Communications
Act of 1934, as amended.
"COPYRIGHTS" shall mean (i) all copyrights in
the United States or any other country, whether registered or unregistered, or
published or unpublished, all registrations and recordings thereof, and all
applications in connection therewith including, without limitation, all
registrations, recordings, and applications in the United States Copyright
Office, and (ii) the right to obtain all renewals thereof.
"COPYRIGHT LICENSES" are any written
agreements naming the Borrower as licensor or licensee, granting any right
under any Copyright including, without limitation, the grant of rights to
manufacture, distribute, exploit, and sell materials derived from any
Copyright.
"EVENT OF DEFAULT" shall mean an Event of
Default under the Note.
"FCC" shall mean the Federal Communications
Commission.
"GENERAL INTANGIBLES" as such term is defined
in Section 9-106 of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event including, without limitation, with
respect to the Borrower, all contracts, agreements, instruments, and indentures
in any form and portions thereof, to which the Borrower is a party or under
which the Borrower has any right, title, or interest or to which the Borrower
or any
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property of the Borrower is subject, as the same may from time to time be
amended, restated, supplemented, or otherwise modified including, without
limitation, (i) all rights of the Borrower to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all rights of the
Borrower to damages arising thereunder, and (iii) all rights of the Borrower to
perform and to exercise all remedies thereunder, in each case to the extent the
grant by the Borrower of a security interest pursuant to this Agreement in its
right, title, and interest in such contract, agreement, instrument, or
indenture is not prohibited by such contract, agreement, instrument, or
indenture without the consent of any other party thereto, would not give any
other party to such contract, agreement, instrument, or indenture the right to
terminate its obligations thereunder, or is permitted with consent if all
necessary consents to such grant of a security interest have been obtained from
the other parties thereto (it being understood that the foregoing shall not be
deemed to obligate the Borrower to obtain such consents); provided that the
foregoing limitation shall not affect, limit, restrict, or impair the grant by
the Borrower of a security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become due under any such
contract, agreement, instrument, or indenture.
"GOVERNMENTAL AUTHORITY" means any agency,
board, bureau, court, commission, department, instrumentality or administration
of the United States government, any foreign government, any state government
or any local, county or municipal, or other governmental body in a state,
territory or possession of the United States or the District of Columbia.
"INTELLECTUAL PROPERTY" shall include all
rights, priorities, and privileges provided under U.S., multinational, and
foreign law relating to Intellectual Property including, without limitation,
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, and
Trademark Licenses and all rights to xxx at law or in equity for any past,
present, or future infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"LIEN" shall mean any mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge, or other security interest or any preference, priority, or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement and any capital lease having substantially the same
economic effect as any of the foregoing).
"PATENTS" are (i) all letters patent of the
United States or any other country and all re-issues and extensions thereof,
(ii) all applications for letters patent of the United States or any other
country and all divisions, continuations, and continuations-in-part thereof,
and (iii) all rights to obtain any re-issues or extensions of the foregoing.
"PATENT LICENSE" shall mean all agreements,
whether written or oral, providing for the grant by or to the Borrower of any
right to manufacture, use, or sell any invention covered in whole or in part by
a Patent.
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"PERSON" is an individual, partnership,
corporation, limited liability company, business trust, joint stock company,
trust, unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"PLEDGED NOTES" shall include all promissory
notes issued to or held by the Borrower (other than promissory notes issued in
connection with extensions of trade credit by the Borrower in the ordinary
course of business).
"PLEDGED SECURITIES" is the collective
reference to the Pledged Notes and the Pledged Stock.
"PLEDGED STOCK" shall include any shares,
stock certificates, options, or rights of any nature whatsoever in respect of
the Capital Stock of any Person that may be issued or granted to, or held by,
the Borrower while this Agreement is in effect.
"PROCEEDS" shall mean all "proceeds" as such
term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in
the State of New York on the date hereof and in any event shall include,
without limitation, all dividends or other income from the Pledged Securities,
collections thereon, or distributions or payments with respect thereto.
"RECEIVABLE" is any right to payment for
goods sold or leased, or for services rendered, whether or not such right is
evidenced by an Instrument or Chattel Paper and whether or not it has been
earned by performance (including, without limitation, any Account).
"SECURITIES ACT" is the Securities Act of
1933, as amended.
"TRADEMARKS" are (i) all trademarks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos, and other source or business
identifiers, and all goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
state thereof, any other country or any political subdivision thereof or
otherwise, and all common-law rights related thereto, and (ii) the right to
obtain all renewals thereof.
"TRADEMARK LICENSE" shall mean any agreement,
whether written or oral, providing for the grant by or to the Borrower of any
right to use any Trademark.
B. OTHER DEFINITIONAL PROVISIONS
1. The words "hereof," "herein," "hereto,"
"hereunder," and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
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2. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such
terms.
3. Where the context requires, terms relating to
the Collateral or any part thereof, when used in relation to the Borrower,
shall refer to the Borrower's Collateral or the relevant part thereof.
4. For the purposes of this Agreement, each
reference to Collateral or to any relevant type or item of property
constituting Collateral shall be deemed to exclude any FCC license to the
extent the Borrower is prohibited at that time from granting a security
interest therein pursuant to the Communications Act and the regulations
promulgated thereunder.
SECTION II. GRANT OF SECURITY INTEREST
Borrower hereby assigns, transfers and grants to the Lender a
security interest in all of the following property now owned or at any time
hereafter acquired by the Borrower, or in which the Borrower now has or at any
time in the future may acquire any right, title, or interest (collectively, the
"Collateral"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of the Borrower's Obligations:
1. Accounts
2. Chattel Paper
3. Documents
4. Equipment
5. General Intangibles
6. Instruments
7. Intellectual Property
8. Inventory
9. Pledged Securities
10. Books and Records pertaining the Collateral, and
11. to the extent not otherwise included, all Proceeds of
any and all of the foregoing and any and all
collateral security and guarantees given by any
person with respect to any of the foregoing.
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"COLLATERAL" shall not include, with respect
to the Borrower, any General Intangible or Intellectual Property to the extent
the grant by the Borrower of a security interest pursuant to this Agreement in
its rights under such General Intangible or Intellectual Property, as the case
may be, is prohibited or restricted by such General Intangible or Intellectual
Property, as the case may be, and the consent of applicable Persons has not
been and cannot be obtained, provided that the foregoing limitation shall not
affect, limit, restrict, or impair the grant by the Borrower of a security
interest pursuant to this Agreement in any Account or any money or other
amounts due or to become due under any such General Intangible or Intellectual
Property, as the case may be, to the extent provided in Section 9-318 of the
Code as in effect on the date hereof.
SECTION III. REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Security Agreement and
to loan the money to the Borrower pursuant to the Note, Borrower hereby
represents and warrants to the Lender that:
A. REPRESENTATIONS IN THE NOTE. The
representations and warranties set forth in the Note as they relate to the
Borrower, each of which is hereby incorporated herein by reference, are true
and correct, and the Lender shall be entitled to rely on each of them as if
they were fully set forth herein.
B. TITLE; NO OTHER LIENS. Except for the
security interest granted to the Lender pursuant to this Agreement, the
Borrower owns each item of the Collateral free and clear of any and all Liens
or claims of others. No financing statement or other public notice with
respect to all or any part of the Collateral is on file or on record in any
public office, except such as have been filed in favor of the Lender pursuant
to this Agreement.
C. PERFECTED FIRST PRIORITY LIENS. The security
interests granted pursuant to this Agreement (1) that are capable of perfection
pursuant to the Code upon completion of the filings and other actions necessary
under the Code will constitute valid perfected security interests in all of the
Collateral in favor of the Lender, as collateral security for the Borrower's
Obligations, enforceable in accordance with the terms hereof against all
creditors of the Borrower and any Person's purporting to purchase any
collateral from the Borrower, and (2) are prior to all other Liens on the
Collateral.
D. CHIEF EXECUTIVE OFFICER. On the date hereof,
the Borrower's jurisdiction of organization is the State of Delaware, and the
location of the Borrower's chief executive office or sole place of business is
specified on Schedule 1.
E. INVENTORY AND EQUIPMENT. On the date hereof,
the Inventory and the Equipment (other than mobile goods) are kept at the
locations listed on Schedule 2.
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F. FARM PRODUCTS. None of the Collateral
constitutes, or is the Proceeds of, Farm Products.
G. SECURITIES AND NOTES.
While this Agreement is in effect, (i) no
shares, stock certificates, options, or rights of any nature whatsoever in
respect of the Capital Stock of any Person will be issued or granted to, or
held by the Borrower and (ii) no promissory notes will be issued to or held by
the Borrower (other than promissory notes issued in connection with extensions
of trade credit by the Borrower in the ordinary course of business).
H. INTELLECTUAL PROPERTY.
1. To the best of the Borrower's
knowledge, all material Intellectual Property is on the date hereof valid,
subsisting, unexpired, enforceable and has not been abandoned.
2. None of the material Intellectual
Property is on the date hereof the subject of any licensing or franchise
agreement pursuant to which the Borrower is the licensor or franchisor.
3. No holding, decision or judgment has
been rendered by any Governmental Authority which would limit, cancel or
question the validity of, or the Borrower's rights in, any Intellectual
Property in any respect that could reasonably be expected to have a material
adverse effect on the business, assets, property, condition (financial or
otherwise), or prospect of Borrower or the Collateral.
4. No action or proceeding is pending
or, to the knowledge of the Borrower, threatened on the date hereof seeking to
limit, cancel or question the validity, or the Borrower's ownership, of any
Intellectual Property which, if adversely determined, would have a material
adverse effect on the Borrower or the Collateral.
SECTION IV. COVENANTS
Borrower covenants and agrees with the Lender that, from and
after the date of this Agreement until the Borrower Obligations have been paid
in full:
A. NO EVENTS OF DEFAULT. Borrower shall take,
or shall refrain from taking, as the case may be, each action that is necessary
to be taken, as the case may be, so that no Event of Default is caused by the
failure to take such action or to refrain from taking such action by Borrower.
B. INSURANCE. Borrower shall cause each
casualty insurance policy maintained by it to (a) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least thirty (30) days after receipt by the
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Lender of written notice thereof, (b) name the Lender as insured party or loss
payee, (c) if reasonably requested by the Lender, include a breach of warranty
clause and (d) be reasonably satisfactory in all other respects to the Lender.
C. MAINTENANCE OF PERFECTED SECURITY INTEREST;
FURTHER DOCUMENTATION.
1. The Borrower shall maintain the
security interest created by this Agreement as a perfected security interest
having at least the priority described herein and shall defend such security
interest against the claims and demands of all Persons whomsoever.
2. Upon reasonable written request of
the Lender, the Borrower will furnish to the Lender statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Lender may reasonably request, all in
reasonable detail.
3. At any time and from time to time,
upon the written request of the Lender, and at the sole expense of the
Borrower, the Borrower will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Lender may
reasonably request for the purpose of obtaining or preserving the full benefits
of this Agreement and of the rights and powers herein granted, including,
without limitation, the filing of any financing or continuation statements
under the Code (or other similar laws) in effect in any jurisdiction with
respect to the security interests created hereby.
E. CHANGES IN LOCATIONS, NAME, ETC. The
Borrower will not, except upon not less than 15 days' prior written notice to
the Lender and delivery to the Lender of all additional executed financing
statements and other documents reasonably requested by the Lender to maintain
the validity, perfection and priority of the security interests provided for
herein:
(a) permit any of the Inventory or
Equipment (other than (i) immaterial Inventory and
Equipment and (ii) Inventory and Equipment in transit
in the ordinary course of business) to be kept at a
location other than those listed on Schedule 2;
(b) change the location of its chief
executive office or sole place of business from that
referred to in Schedule 1; or
(c) change its name, identity or
corporate structure to such an extent that any
financing statement filed by the Lender in connection
with this Agreement would become misleading.
F. NOTICES. The Borrower will advise the Lender
promptly after the Borrower becomes aware thereof, in reasonable detail, of any
Lien (other than security interests created hereby) on any of the Collateral
which would adversely affect the ability of the Lender to exercise any of the
Lender's remedies hereunder.
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G. PLEDGED SECURITIES.
1. If the Borrower shall become
entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option or rights in
respect of the Capital Stock of any Person, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, the Borrower shall accept the
same as the agent of the Lender, hold the same in trust for the Lender and
deliver the same forthwith to the Lender in the same exact form received, duly
indorsed by the Borrower to the Lender, if required, together with an undated
stock power covering such certificate duly executed in blank by the Borrower to
be held by the Lender, subject to the terms hereof, as additional collateral
security for the Borrower Obligations. If an Event of Default shall have
occurred and be continuing, (i) any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any issuer thereof shall be
paid over to the Lender to be held by it hereunder as additional collateral
security for the Borrower Obligations and (ii) in case any distribution of
capital shall be made on or in respect of the Pledged Securities or any
property shall be distributed upon or with respect to the Pledged Securities
pursuant to the recapitalization thereof, the property so distributed shall,
unless otherwise subject to a perfected security interest in favor of the
Lender, be delivered to the Lender to be held by it hereunder as additional
collateral security for the Borrower Obligations. If any sums of money or
property so paid or distributed in respect of the Pledged Securities shall be
received by the Borrower, the Borrower shall, until such money or property is
paid or delivered to the Lender, hold such money or property in trust for the
Lender, segregated from other funds of the Borrower, as additional collateral
security for the Borrower Obligations.
2. Without the prior written consent of
the Lender, the Borrower will not (i) vote to enable, or take any other action
to permit, any Person to issue any stock or other equity securities of any
nature (except to the extent such stock or other securities are pledged to the
Lender hereunder) or to issue any other securities convertible into or granting
the right to purchase or exchange for any stock or other equity securities of
any nature of any Person, (ii) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Pledged Securities or
Proceeds thereof, (iii) create, incur or permit to exist any Lien or option in
favor of, or any claim of any Person with respect to, any of the Pledged
Securities or Proceeds thereof, or any interest therein, except for the
security interests created by this Agreement or (iv) enter into any agreement
or undertaking restricting the right or ability of the Borrower or the Lender
to dispose of any of the Pledged Securities or Proceeds thereof.
H. RECEIVABLES.
(a) Other than in the ordinary course of
business, the Borrower will not (i) grant any extension of the time of payment
of any Receivable, (ii) compromise or settle any Receivable for less than the
full amount thereof, (iii) release, wholly or partially, any Person liable for
the payment of any Receivable, (iv) allow any credit or discount whatsoever on
any
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Receivable or (v) amend, supplement or modify any Receivable in any manner
that could adversely affect the value thereof.
(b) The Borrower will take all actions
necessary to give notice pursuant to the United States Assignment of Claims Act
of 1940, as amended, or such other analogous law if a material portion of the
total amount of the Receivables is owing from Governmental Authorities.
I. INTELLECTUAL PROPERTY.
1. The Borrower (either itself or
through licensees) will (i) continue to use each material Trademark on each and
every trademark class of goods applicable to its current line as reflected in
its then-current catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for non-use, (ii)
maintain as in the past the quality of products and services offered under such
Trademark, (iii) use such Trademark with all notices and legends required by
applicable law or regulations, and (iv) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark may become invalidated or impaired in any way.
2. The Borrower (either itself or
through licensees) will not do any act or omit to do any act, whereby any
material Patent may become forfeited, abandoned or dedicated to the public.
3. The Borrower (either itself or
through licensees) will not (and will not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby any material
portion of the Copyrights may become invalidated or otherwise impaired. The
Borrower will not (either itself or through licensees) do any act whereby any
material portion of the Copyrights may fall into the public domain.
4. The Borrower (either itself or
through licensees) will not do any act that knowingly uses a material
Intellectual Property to infringe the Intellectual Property rights of a third
party.
5. The Borrower will notify the Lender
immediately if it knows, or has reason to know, that any application or
registration relating to any material Patent, Copyright or Trademark may become
abandoned or dedicated to the public, or of any adverse determination or
development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the U.S. Copyright Office or any court or tribunal in any
country) regarding the Borrower's ownership of, or the validity of, any
material Intellectual Property or the Borrower's right to register the same or
to own and maintain the same.
6. Whenever the Borrower, either by
itself or through any agent, employee, licensee or designee, shall file an
application for any Patent or Trademark with the United States Patent and
Trademark Office or any Copyright in the U.S. Copyright Office or
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any similar office or agency in any other country or any political subdivision
thereof, the Borrower shall report such filing to the Lender within five (5)
business days after the last day of the fiscal quarter in which such filing
occurs. Upon written request of the Lender, the Borrower shall execute and
deliver, and have recorded, any and all agreements, instruments, documents, and
papers as the Lender may reasonably request to evidence the Lender's security
interest in any such Copyright, Patent or Trademark and the goodwill and
general intangibles of the Borrower relating thereto or represented thereby.
7. The Borrower will take all
reasonable and necessary steps, including, without limitation, in any
proceeding before the United States Patent and Trademark Office, the U.S.
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, to maintain each registration of the material
Intellectual Property, including, without limitation, filing of applications
for renewal, affidavits of use and affidavits of incontestability.
8. In the event that any material
Intellectual Property is infringed, misappropriated or diluted by a third
party, the Borrower shall (i) take such actions as the Borrower shall
reasonably deem appropriate under the circumstances to protect such
Intellectual Property and (ii) if such Intellectual Property is of material
economic value, promptly notify the Lender after it learns thereof.
SECTION V. REMEDIAL PROVISIONS
A. CERTAIN MATTERS RELATING TO RECEIVABLES.
1. At any time while an Event of
Default shall have occurred and be continuing, upon the Lender's request and at
the expense of the Borrower, the Borrower shall cause independent public
accountants or others satisfactory to the Lender to furnish to the Lender
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
2. The Lender hereby authorizes the
Borrower to collect the Borrower's Receivables, and the Lender may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Lender at Default, any
payments or Receivables, when collected by the Borrower, (i) shall be forthwith
(and, in any event, within two (2) business days) deposited by the Borrower in
the exact form received, duly indorsed by the Borrower to the Lender if
required, in a Collateral Account maintained under the sole dominion and
control of the Lender subject to withdrawal by the Lender as provided in
Section V,E hereof, and (ii) until so turned over, shall be held by the
Borrower in trust for the Lender, segregated from other funds of the Borrower.
Each such deposit of Proceeds of Receivables shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.
3. At the Lender's request, the
Borrower shall deliver to the Lender, and have recorded, all original and other
documents evidencing, and relating to, the
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agreements and transactions which gave rise to the then existing Receivables,
including, without limitation, all original orders, invoices and shipping
receipts.
B. COMMUNICATIONS WITH OBLIGORS; BORROWER
REMAINS LIABLE.
1. The Lender in its own name or in the
name of others may at any time after the occurrence and during the continuance
of an Event of Default communicate with obligors under the Receivables to
verify with them to the Lender's reasonable satisfaction the existence, amount
and terms of any Receivables.
2. Upon the request of the Lender at
any time after the occurrence and during the continuance of an Event of
Default, the Borrower shall notify obligors on the Receivables that the
Receivables have been assigned to the Lender and that payments in respect
thereof shall be made directly to the Lender.
3. Anything herein to the contrary
notwithstanding, each Borrower shall remain liable under each of the
Receivables to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto. The Lender shall not have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Lender of any payment
relating thereto, nor shall the Lender be obligated in any manner to perform
any of the obligations of the Borrower under or pursuant to any Receivable (or
any agreement giving rise thereto) to make any payment, to make any inquiry as
to the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
C. PLEDGED STOCK.
1. Unless an Event of Default shall
have occurred and be continuing and the Lender shall have given notice to the
Borrower of the Lender's intent to exercise its rights hereunder, Borrower
shall be permitted to receive all cash dividends paid in respect of the Pledged
Stock and all payments made in respect of the Pledged Notes, in each case paid
in the normal course of business of the relevant issuer thereof, and to
exercise all voting and corporate rights with respect to the Pledged
Securities; provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Lender's reasonable judgment,
would impair the Collateral or which would be inconsistent with or result in
any violation of any provision of the Note or this Agreement.
2. If an Event of Default shall occur
and be continuing and the Lender shall give written notice of its intent to
exercise such rights to the Borrower, (i) the Lender shall have the right to
receive any and all cash dividends, payments or other Proceeds paid in respect
of the Pledged Securities and make application thereof to the Borrower
Obligations in such order as the Lender may determine, and (iii) any or all of
the Pledged Securities shall be
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registered in the name of the Lender or its nominee, and the Lender or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders of the
relevant issuer or issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by the Borrower or the Lender of
any right, privilege or option pertaining to such Pledged Securities, and in
connection therewith, the right to deposit and deliver any and all of the
Pledged Securities with any committee, depository, transfer agent, registrar or
other designated agency upon such terms and conditions as the Lender may
determine), all without liability except to account for property actually
received by it, but the Lender shall have no duty to the Borrower to exercise
any such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
3. Borrower hereby authorizes and
instructs each issuer of any Pledged Securities pledged by the Borrower
hereunder to (i) comply with any instruction received by it from the Lender in
writing that (x) states that an Event of Default has occurred and is continuing
and (y) is otherwise in accordance with the terms of this Agreement, without
any other or further instructions from the Borrower, and the Borrower agrees
that each issuer shall be fully protected in so complying, and (ii) unless
otherwise expressly permitted hereby, pay any dividends or other payments with
respect to the Pledged Securities directly to the Lender.
D. PROCEEDS TO BE TURNED OVER TO LENDER. In
addition to the rights of the Lender specified herein with respect to payments
of Receivables, if an Event of Default shall occur and be continuing, all
Proceeds received by the Borrower consisting of cash, checks and other
near-cash items shall be held by the Borrower in trust for the Lender,
segregated from other funds of the Borrower, and shall, forthwith upon receipt
by the Borrower, be turned over to the Lender in the exact form received by the
Borrower (duly indorsed by the Borrower to the Lender, if required). All
Proceeds received by the Lender hereunder shall be held by the Lender in a
Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the Lender in a Collateral Account (or by the Borrower
in trust for the Lender) shall continue to be held as collateral security for
all the Borrower Obligations and shall not constitute payment thereof until
applied as provided herein.
E. APPLICATION OF PROCEEDS. At any time after
the occurrence and during the continuance of an Event of Default, at the
Lender's election, the Lender may apply all or any part of Proceeds held in any
Collateral Account in payment of the Borrower Obligations in such order as the
Lender may elect, and any part of such funds which the Lender elects not so to
apply and deems not required as collateral security for the Borrower
Obligations shall be paid over from time to time by the Lender to the Borrower
or to whomsoever may be lawfully entitled to receive the same. Any balance of
such Proceeds remaining after the Borrower Obligations shall have been paid in
full, shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the case.
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F. CODE AND OTHER REMEDIES. If an Event of
Default shall occur and be continuing, the Lender may exercise, in addition to
all other rights and remedies granted to the Lender in this Agreement and in
any other instruments or agreement securing, evidencing or relating to the
Borrower Obligations, all rights and remedies of a secured party under the Code
or any other applicable law. Without limiting the generality of the foregoing,
the Lender, without demand or performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon the Borrower or any other Person (all and each of
which demands, defenses, advertisements and notices are hereby waived), may in
such circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker's
board or office of the Lender or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk. The
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in the Borrower, which right or equity is hereby waived and
released. Borrower further agrees, at the Lender's request, to assemble the
Collateral and make it available to the Lender at places which the Lender shall
reasonable select, whether at the Borrower's premises or elsewhere. The Lender
shall apply the net proceeds of any action taken by it pursuant to this
Section, after deducting all reasonable costs and expenses of every kind
incurred in connection therewith or incidental to the care or safekeeping of
any of the Collateral or in any way relating to the Collateral or the rights of
the Lender hereunder, including, without limitation, reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the Borrower
Obligations, in such order as the Lender may elect, and only after such
application and after the payment by the Lender of any other amount required by
any provision of law, including, without limitation, Section 9- 504(1)(c) of
the Code, need the Lender account for the surplus, if any, to the Borrower. To
the extent permitted by applicable law, the Borrower waives all claims,
damages, and demands it may acquire against the Lender arising out of the
exercise by the Lender of any rights hereunder. If any notice of a proposed
sale or other disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days before such
sale or other disposition.
G. REGISTRATION RIGHTS.
1. If the Lender shall determine to
exercise its right to sell any or all of the Pledged Stock pursuant to the
terms and conditions hereof, and if in the opinion of the Lender it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the Borrower will
cause the issuer thereof to (i) execute and deliver, and cause the directors
and officers of such issuer to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts as may be, in the
opinion of the Lender, necessary or advisable to register the Pledged Stock, or
that portion
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thereof to be sold, under the provisions of the Securities Act, (ii) use its
best efforts to cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from the date of the
first public offering of the Pledged Stock, or that portion thereof to be sold,
and (iii) make all amendments thereto and/or to the related prospectus which,
in the opinion of the Lender, are necessary or advisable, all in conformity
with the requirements of the Securities Act and the rules and regulations of
the Securities and Exchange Commission applicable thereto. The Borrower agrees
to cause such issuer to comply with the provisions of the securities or "Blue
Sky" laws of any and all jurisdictions which the Lender shall designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) which will satisfy the provisions of
Section 11(a) of the Securities Act.
2. Borrower recognizes that the Lender
may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Borrower acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Lender shall be under no obligation to delay a sale of any of the Pledged Stock
for the period of time necessary to permit the issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such Issuer would agree to do so.
3. Borrower agrees to use its best
efforts to do or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged Stock pursuant to
this Section valid and binding and in compliance with any and all other
applicable laws. Borrower further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the Lender, that the
Lender has no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section shall be
specifically enforceable against the Borrower, and the Borrower hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of
Default has occurred.
H. WAIVER; DEFICIENCY. Borrower waives and
agrees not be assert any rights or privileges which it may acquire under
Section 9-112 of the Code. Borrower shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay the Borrower Obligations and the fees and disbursements of
any attorneys employed by the Lender to collect such deficiency.
SECTION VII. THE LENDER
A. LENDER'S APPOINTMENT AS ATTORNEY-IN-FACT,
ETC.
1. Borrower hereby irrevocably
constitutes and appoints the Lender and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of the Borrower and in
the name of the Borrower or in its own name, for the purpose of carrying out
the terms of
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this Agreement, to take any and all appropriate action to the extent permitted
by law and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement, and,
without limiting the generality of the foregoing, Borrower hereby gives the
Lender the power and right, on behalf of the Borrower, without notice to or
assent by the Borrower, to do any or all of the following:
(i) in the name of the Borrower or its own name,
or otherwise, take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for
the payment of moneys due under any Receivable or with respect
to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Lender for the purpose of
collecting any and all such moneys due under any Receivable or
with respect to any other Collateral whenever payable;
(ii) in the case of any Copyright, Patent or
Trademark, execute, deliver and have recorded, any and all
agreements, instruments, documents and papers as the Lender
may request to evidence the Lender's security interest in such
Copyright, Patent or Trademark and the goodwill and general
intangibles of the Borrower relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any
repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and
the costs thereof;
(iv) execute, in connection with any sale provided
for herein, any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(v) (a) direct any party liable for any payment
under any of the Collateral to make payment of any and all
moneys due or to become due thereunder directly to the Lender
or as the Lender shall direct; (b) ask or demand for, collect,
and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (c) sign and
indorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in
connection with any of the Collateral; (d) commence and
prosecute any suits, actions or proceedings at law or in
equity in any court of competent jurisdiction to collect the
Collateral or any portion thereof and to enforce any other
right in respect of any Collateral; (e) defend any suit,
action or proceeding brought against the Borrower with respect
to any Collateral; (f) settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Lender may deem
appropriate; (g) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such
Copyright, Patent or Trademark
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pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Lender shall in
its sole discretion determine; and (h) generally, sell,
transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and
completely as though the Lender were the absolute owner
thereof for all purposes, and do, at the Lender's option and
the Borrower's expense, at any time, or from time to time, all
acts and things which the Lender deems necessary to protect,
preserve or realize upon the Collateral and the Lender's
security interests therein and to effect the intent of this
Agreement, all as fully and effectively as the Borrower might
do.
Anything in this Section to the contrary notwithstanding, the
Lender agrees that it will not exercise any rights under the power of attorney
provided for in this Section unless an Event of Default shall have occurred and
be continuing.
2. If the Borrower fails to perform or
comply with any of its agreements contained herein, the Lender, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
3. The expenses of the Lender incurred
in connection with actions undertaken as provided in this Section, together
with interest thereon at a rate per annum equal to eight percent (8%), from the
date of payment by the Lender to the date reimbursed by the Borrower, shall be
payable by the Borrower to the Lender on demand.
4. The Borrower hereby ratifies all
that said attorneys shall lawfully do or cause to be done by virtue hereof.
All powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.
B. DUTY OF LENDER. The Lender's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as the Lender deals with similar property for
its own account. Neither the Lender nor any of its officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
the Borrower or any other Person or to take any action whatsoever with regard
to the Collateral or any part thereof. The powers conferred on the Lender
hereunder are solely to protect the Lender's interest in the Collateral and
shall not impose any duty upon the Lender to exercise any such powers. The
Lender shall be accountable only for amounts that it actually receives as a
result of the exercise of such powers, and neither the Lender nor any of its
officers, directors, employees or agents shall be responsible to the Borrower
for any act or failure to act hereunder, except for the Lender's own gross
negligence or willful misconduct.
C. EXECUTION OF FINANCING STATEMENTS. Pursuant
to Section 9-402 of the Code and any other applicable law, the Borrower
authorizes the Lender to file or record
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financing statements and other filing or recording documents or instruments
with respect to the Collateral without the signature of the Borrower in such
form and in such offices as the Lender reasonably determines appropriate to
perfect the security interests of the Lender under this Agreement. A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.
SECTION VIII. MISCELLANEOUS
A. AMENDMENTS IN WRITING. The terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified by a written instrument executed by the Borrower and the Lender,
provided that any provision of this Agreement imposing obligations on the
Borrower may be waived by the Lender in a written instrument executed by the
Lender.
B. NOTICES. All notices, demands, requests, or
other communications which may be or are required to be given or made by any
party to any other party pursuant to this Agreement shall be in writing and
shall be hand delivered, mailed by first-class registered or certified mail,
return receipt requested, postage prepaid, delivered by overnight air courier,
or transmitted by telegram, telex, or facsimile transmission addressed as
follows:
If to Lender:
STC Broadcasting of Vermont Subsidiary, Inc.
0000 0xx Xxxxxx Xxxxx
Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxx
Fax: (000) 000-0000
and to:
Hicks, Muse, Xxxx & Xxxxx Incorporated
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Xx.
Fax: (000) 000-0000
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If to Borrower:
Xxxxx Broadcasting of Vermont, LLC
000 Xx Xxxxx
Xxxxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx, President
Fax: (000) 000-0000
or such other address as the addressee may indicate by written notice to the
other parties.
Each notice, demand, request, or communication which shall be given or made in
the manner described above shall be deemed sufficiently given or made for all
purposes at such time as it is delivered to the addressee (with the return
receipt, the delivery receipt, the affidavit of messenger or (with respect to a
telex) the answerback being deemed conclusive but not exclusive evidence of
such delivery) or at such time as delivery is refused by the addressee upon
presentation.
C. NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE
REMEDIES. The Lender shall not by any act (except by a written instrument),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Event of Default. No failure to
exercise, nor any delay in exercising, on the part of the Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Lender would otherwise have on any future occasion. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.
D. ENFORCEMENT EXPENSES; INDEMNIFICATION.
1. Borrower agrees to pay or reimburse
the Lender for all its costs and expense incurred in collecting against the
Borrower or otherwise enforcing or preserving any rights under this Agreement,
including, without limitation, the reasonable fees and disbursements of counsel
to the Lender.
2. Borrower agrees to pay, and to save
the Lender harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions contemplated by this
Agreement.
3. The agreements in this Section shall
survive repayment of the Borrower Obligations and all other amounts payable
under the Note.
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E. SUCCESSORS AND ASSIGNS. This Agreement shall
be binding upon the successors and assigns of the Borrower and shall inure to
the benefit of the Lender and its successors and assigns; provided that
Borrower may not assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the Lender.
F. SET-OFF. In addition to any rights and
remedies of the Lender provided by law, the Lender shall have the right,
without prior notice to the Borrower, any such notice being expressly waived by
the Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise) to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the Lender to or
for the credit or the account of the Borrower. The Lender agrees promptly to
notify the Borrower after any such setoff and application made by the Lender,
provided that the failure to give such notice shall not affect the validity of
such setoff and application.
G. COUNTERPARTS. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of
the copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Lender.
H. SEVERABILITY. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
I. INTEGRATION. This Agreement and the Note
represent the entire agreement of the Borrower and the Lender with respect to
the subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by the Lender relative to subject matter hereof
and thereof not expressly set forth or referred to herein or in the Note.
J. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
K. SUBMISSION TO JURISDICTION; WAIVERS.
Borrower hereby irrevocably and unconditionally:
1. submits for itself and its property in any
legal action or proceeding relating to this Agreement and the
Note, or for recognition and enforcement of any judgment in
respect thereof, to the nonexclusive general jurisdiction of
the Courts
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of the State of New York, the courts of the United States of
America for the Southern District of New York, and appellate
courts from any thereof;
2. consents that any such action or proceeding
may be brought in such courts and waives any objection that it
may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead
or claim the same;
3. agrees that service of process in any such
action or proceeding may be effected by mailing a copy thereof
by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to the Borrower at its address
referred to above or at such other address of which the Lender
shall have been notified pursuant thereto;
4. agrees that nothing herein shall affect the
right to effect service of process in any other manner
permitted by law or shall limit the right to xxx in any other
jurisdiction; and
5. waives, to the maximum extent not prohibited
by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.
L. ACKNOWLEDGMENTS. Borrower hereby
acknowledges that:
1. it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the
Note;
2. the Lender has no fiduciary relationship with
or duty to the Borrower arising out of or in connection with
this Agreement, and the relationship between Lender and the
Borrowers in connection herewith is solely that of debtor and
creditor; and
3. no joint venture is created hereby or
otherwise exists by virtue of the transactions contemplated
hereby between the Lender and the Borrower.
M. WAIVERS OF JURY TRIAL. BORROWER AND THE
LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTE AND FOR ANY
COUNTERCLAIM THEREIN.
N. SECTION HEADINGS. The Section headings used
in this Agreement are for convenience of reference only and are not to affect
the construction hereof or be taken into consideration in the interpretation
hereof.
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O. RELEASES.
(a) At such time as the Note and the
other Borrower Obligations shall have been satisfied in full, the Collateral
shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Lender and the Borrower hereunder shall terminate, all without delivery of
any instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Borrower. At the request and sole expense of
the Borrower following any such termination, the Lender shall deliver to the
Borrower any Collateral held by the Lender hereunder, and execute and deliver
to the Borrower such documents as the Borrower shall reasonably request to
evidence such termination.
(b) If any of the Collateral shall be
sold, transferred or otherwise disposed of by the Borrower in a transaction not
prohibited by this Agreement, then the Lender, at the request and sole expense
of the Borrower, shall execute and deliver to the Borrower all releases or
other documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral.
P. FCC COMPLIANCE.
(a) Notwithstanding anything to the
contrary contained herein or in any other agreement, instrument, or document
executed in connection herewith, no party hereto shall take any actions
hereunder that would constitute or result in a transfer or assignment of any
FCC license, permit or authorization or a change of control over such FCC
license, permit or authorization requiring the prior approval of the FCC
without first obtaining such prior approval of the FCC. In addition, the
parties acknowledge that the voting rights of the Pledged Stock shall remain
with the Borrower thereof even upon the occurrence and during the continuance
of an Event of Default until the FCC shall have given its prior consent to the
exercise of stockholder rights by a purchaser at a public or private sale of
such Pledged Stock or the exercise of such rights by the Lender or by a
receiver, trustee, conservator or other agent duly appointed pursuant to
applicable law.
(b) If an Event of Default shall have
occurred, Borrower shall take any action which the Lender may request in the
exercise of its rights and remedies under this Agreement in order to transfer
or assign the Collateral to the Lender or to such one or more third parties as
the Lender may designate, or to a combination of the foregoing. To enforce the
provisions of this Section, the Lender is empowered to seek from the FCC and
any other Governmental Authority, to the extent required, consent to or
approval of any involuntary transfer of control of any entity whose Collateral
is subject to this Agreement for the purpose of seeking a bona fide purchaser
to whom control ultimately will be transferred. Borrower agrees to cooperate
with any such purchaser and with the Lender in the preparation, execution and
filing of any forms and providing any information that may be necessary or
helpful in obtaining the FCC's consent to the assignment to such purchaser of
the Collateral. Borrower hereby agrees to consent to any such voluntary or
involuntary transfer after and during the continuation of an Event of Default
and, without limiting any rights of the Lender under this Agreement, to
authorize the
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Lender to nominate a trustee or receiver to assume control of the Collateral,
subject only to required judicial, FCC or other consents required by
Governmental Authorities, in order to effectuate the transactions contemplated
by this Section. Such trustee or receiver shall have all the rights and powers
as provided to it by law or court order, or to the Lender under this Agreement.
Borrower shall cooperate fully in obtaining the consent of the FCC and the
approval or consent of each other Governmental Authority required to effectuate
the foregoing.
(c) Without limiting the obligations of
the Borrower hereunder in any respect, the Borrower further agrees that if the
Borrower, upon or after the occurrence of an Event of Default, should fail or
refuse for any reason whatsoever, without limitation, including any refusal to
execute any application necessary or appropriate to obtain any governmental
consent necessary or appropriate for the exercise of any right of the Lender
hereunder, the Borrower agrees that such application may be executed on the
Borrower's behalf by the clerk of any court of competent jurisdiction without
notice to the Borrower pursuant to court order.
(d) In connection with this Section, the
Lender shall be entitled to rely in good faith upon an opinion of outside FCC
counsel of the Lender's choice with respect to any such assignment or transfer,
whether or not the advice rendered is ultimately determined to have been
accurate.
-23-
24
IN WITNESS WHEREOF, each of the undersigned has caused this
Security Agreement to be duly executed and delivered as of the date first above
written.
XXXXX BROADCASTING OF VERMONT, LLC
By: /s/ Xxxxxxx X. Xxxx
---------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Secretary
STC BROADCASTING OF VERMONT
SUBSIDIARY, INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------------
Xxxxx X. Xxxx
Chief Financial Officer
