COLLATERAL ASSIGNMENT OF PROCEEDS
AND SECURITY AGREEMENT
COLLATERAL ASSIGNMENT OF PROCEEDS AND SECURITY AGREEMENT dated as of
August 23, 2005 among ACC LICENSEE INC., a Delaware corporation ("WJLA"),
HARRISBURG TELEVISION, INC., a Delaware corporation ("WHTM"), KATV, LLC, a
Delaware limited liability company ("KATV"), KTUL, LLC, a Delaware limited
liability company ("KTUL"), WSET, Incorporated, a Delaware corporation ("WSET"),
WCIV, LLC, a Delaware limited liability company ("WCIV") and TV ALABAMA, INC., a
Delaware corporation ("WCFT" and together with WJLA, WHTM, KATV, KTUL, WSET and
WCIV, each a "Debtor" and, collectively, the "Debtors") and BANK OF AMERICA,
N.A., as administrative agent (the "Agent") for itself and the Banks (as
hereinafter defined).
Recitals
The Debtors are all subsidiaries of Xxxxxxxxxx Communications Company,
a Delaware corporation ("Xxxxxxxxxx"). Xxxxxxxxxx is a party to that certain
Credit Agreement dated as of August 23, 2005 (as amended and in effect from time
to time, the "Credit Agreement"), among Xxxxxxxxxx, as Borrower, the lenders and
other financial institutions from time to time parties thereto (together with
their successors and assigns, the "Banks") and the Agent. Pursuant to the Credit
Agreement, the Banks have agreed to make loans and otherwise extend credit to
Xxxxxxxxxx. The Debtors share common management and financial and business
operations with Xxxxxxxxxx and will receive direct and indirect benefits from
the credits granted to Xxxxxxxxxx under the Credit Agreement. It is a condition
precedent to the Banks making any loans or otherwise extending credit to
Xxxxxxxxxx that each of the Debtors execute and deliver to the Agent this
Collateral Assignment of Proceeds and Security Agreement for the benefit of the
Lenders and the Agent (collectively, the "Secured Parties").
NOW, THEREFORE, in consideration of the premises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1 - ASSIGNMENT AND GRANT OF SECURITY
Section 1.1. Assignment and Grant of Security. Each of the Debtors
hereby collaterally assigns to the Agent for its benefit and the ratable benefit
of the Lenders and grants to the Agent a continuing security interest (such
assignment and security interest, "Security Interest") in and to its general
intangibles and the proceeds thereof associated with all radio and television
broadcast licenses issued by the United States or any agency or instrumentality
thereof (each, a "Licensing Authority"), including any licenses issued to any
Debtor by the Federal Communications Commission to operate television stations
(collectively, the "Licenses"), including without limitation the Licenses
described on Schedule A hereto, and the proceeds thereof, including any and all
proceeds received or receivable by the Debtors from the sale, assignment,
transfer or other disposition of the Licenses (collectively the "Collateral").
Section 1.2. Security for Obligations. The Security Interest shall
secure the payment and performance of the Obligations.
ARTICLE 2 - REPRESENTATIONS, WARRANTIES AND COVENANTS
Each of the Debtors represents, warrants and covenants as follows:
Section 2.1. No Liens. The Debtor is, and with respect to Collateral
acquired after the date hereof will be, the owner of all Collateral free from
any Lien, security interest, encumbrance or other right, title or interest of
any Person, and the Debtor shall defend the Collateral against all claims and
demands of all Persons at any time claiming any interest therein adverse to the
Agent.
Section 2.2. Other Financing Statements. There is no financing
statement (or similar statement or instrument of registration) covering or
purporting to cover any interest of any kind in the Collateral. So long as any
Obligations or commitments with respect thereto are outstanding, the Debtor will
not execute or authorize to be filed in any public office any financing
statement (or similar statement or instrument of registration) relating to the
Collateral, except financing statements (or similar statements or instruments of
registration) covering the Security Interests granted hereby.
Section 2.3. Further Actions. The Debtor will, subject to the
limitations on the rights of the Secured Parties to enforce against the
Collateral as provided herein, at its own expense, make, execute, endorse,
acknowledge, file and/or deliver to the Agent from time to time such
descriptions and designations of the Collateral, confirmatory assignments,
financing statements, and other assurances or instruments and take such further
steps relating to the Collateral and other property or rights covered by the
Security Interest hereby granted, which the Agent deems reasonably appropriate
or advisable to perfect, preserve or protect its Security Interest in the
Collateral.
Section 2.4. Financing Statements. The Debtor authorizes the Agent to
file such financing statements (or similar statement or instrument of
registration), in form reasonably acceptable to the Agent, as the Agent may from
time to time reasonably determine or as are necessary or desirable in the
reasonable opinion of the Agent to establish and maintain a valid, enforceable,
first priority perfected security interest in the Collateral and the other
rights and security contemplated hereby. The Debtor will pay any applicable
filing fees, recordation taxes and related expenses relating to its Collateral.
The Debtor authorizes the Agent to file any such financing statements (or
similar statement or instrument of registration) without the signature of the
Debtor.
ARTICLE 3 - REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
Section 3.1. Remedies. Each of the Debtors agrees that, if an Event of
Default shall have occurred and be continuing, the Agent, (a) shall have and may
exercise its rights to enforce the Security Interest under the Uniform
Commercial Code, or otherwise, solely to realize against the proceeds from the
sale, assignment, transfer or other disposition of Debtor's Licenses (the
"License Proceeds") in connection with (i) the sale, transfer or other
disposition of all of any
Debtor's assets, including its Licenses, as a going concern or (ii) the sale,
assignment, transfer or other disposition of the Licenses of a Debtor, in each
case whether or not in connection with any receivership, reorganization or other
insolvency proceeding, (b) may file financing statements, amendments thereto and
continuation statements and take other similar actions to create, perfect and
continue its Security Interest as provided in Section 2.4, and (c) may file
proofs of claim or similar notices and vote its interest and otherwise
participate in any receivership, reorganization or other insolvency proceeding
affecting any Debtor. EXCEPT AS SET FORTH IN THE PRECEDING SENTENCE, THE SECURED
PARTIES WILL NOT ENFORCE AND SHALL NOT BE ENTITLED TO ENFORCE AND HEREBY
EXPRESSLY WAIVES ANY RIGHTS AGAINST THE COLLATERAL AS A SECURED PARTIES UNDER
THE UNIFORM COMMERCIAL CODE OR OTHERWISE.
This Agreement may be enforced only by the Agent, and no Bank shall
have any right individually to seek to enforce this Agreement or to realize upon
the security to be granted hereby, it being understood and agreed that such
rights and remedies shall be exercised by the Agent for the benefit of the Banks
upon the terms of the Credit Agreement.
Section 3.2. Instruments. If the Debtor owns or acquires any Instrument
constituting License Proceeds, the Debtor will within two (2) Business Days
notify the Agent thereof, and, upon request by the Agent at any time after and
during the continuance of an Event of Default, will promptly deliver such
Instrument to the Agent appropriately endorsed to the order of the Agent.
Section 3.3. Power of Attorney. Each Debtor grants to the Agent (which
the Agent shall not exercise except after and during the continuance of an Event
of Default) a power of attorney to endorse in the name of the debtor any notes,
checks, drafts, money orders or other instruments of payment or the like which
constitutes the License Proceeds and comes into the possession of the Agent.
Section 3.4. Waiver of Claims. EACH OF THE DEBTORS HEREBY WAIVES TO THE
EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION
WITH THE AGENT'S TAKING POSSESSION OR THE AGENT'S DISPOSITION OF ANY OF THE
LICENSE PROCEEDS, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND
HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH ANY OF
THE DEBTORS WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE
UNITED STATES OR OF ANY STATE, and (b) each of the Debtors hereby further
waives, to the extent permitted by law,
(i) all damages occasioned by such taking of possession except any
damages which are determined by a final, non-appealable court
order to have been caused by the Agent's gross negligence or
willful misconduct; and
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of
this Agreement or the absolute sale of the License Proceeds or
any portion thereof, and each Debtor, for itself and all who
may claim under it, insofar as it or they now or hereafter
lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any License Proceeds shall operate to divest all right, title, interest, claim
and demand, either at law or in equity, of the applicable Debtor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Debtor and against any and all Persons claiming or attempting to claim the
License Proceeds so sold, optioned or realized upon, or any part thereof, from,
through and under such Debtor.
Section 3.5. Application of Proceeds.
(a) All moneys collected by the Agent upon any sale or other
disposition of the License Proceeds, together with all other moneys
received by the Agent hereunder, shall be applied as provided in the
Credit Agreement.
(b) Each of the Lenders agrees and acknowledges that, if there are
undrawn amounts with respect to Letters of Credit issued under the
Credit Agreement, the Agent may hold License Proceeds as cash
collateral for such Letters of Credit. If any License Proceeds are
held as cash collateral pursuant to the immediately preceding
sentence, then upon the termination of all outstanding Letters of
Credit, if there remains any excess cash, such excess cash shall be
distributed in accordance with the Credit Agreement.
Section 3.6. Remedies Cumulative. Subject to the provisions of Section
3.1, each and every right, power and remedy hereby specifically given to the
Agent under this Agreement, shall be in addition to every other right, power and
remedy given under the other Loan Documents or now or hereafter existing at law,
in equity or by statute and each and every right, power and remedy whether
specifically herein given or otherwise existing may be exercised from time to
time or simultaneously and as often and in such order as may be deemed expedient
by the Agent. All such rights, powers and remedies shall be cumulative and the
exercise or the beginning of the exercise of one shall not be deemed a waiver of
the right to exercise any other or others. No delay or omission of the Agent in
the exercise of any such right, power or remedy and no renewal or extension of
any of the Obligations shall impair any such right, power or remedy or shall be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. No notice to or demand on any Debtor in any case shall entitle such
Debtor or the other Debtors to any other or further notice or demand in similar
or other circumstances or constitute a waiver of any of such rights of the Agent
to any other or further action in any circumstances without notice or demand. In
the event that the Agent shall bring any suit to enforce any of its rights
hereunder and shall be entitled to judgment, then in such suit the Agent may
recover reasonable expenses, including reasonable attorneys' fees, and the
amounts thereof shall be included in such judgment.
Section 3.7. Discontinuance of Proceedings. In case the Agent shall
have instituted any proceeding to enforce any right, power or remedy under this
Agreement, and such proceeding shall have been discontinued or abandoned for any
reason or shall have been determined adversely to the Agent, then and in every
such case each Debtor, the Agent and each holder of any of the Obligations shall
be restored to their former positions and rights hereunder with respect to the
Collateral subject to the security interest created under this Agreement, and
all rights, remedies and powers of the Agent shall continue as if no such
proceeding had been instituted.
Section 3.8. Compliance with Communications Act. Anything in this
Agreement to the contrary notwithstanding, the Agent shall not take any action
hereunder in violation of the Communications Act, and no transfer of the License
Proceeds to the Agent shall be made without such (if any) approval of the FCC or
any other applicable Licensing Authority as may be required by the
Communications Act. Neither the Agent nor any other Person other than the duly
licensed Debtor shall operate or otherwise exercise any control over the Station
licensed to such Debtor without first having received such prior approval of the
FCC or any other applicable Licensing Authority as shall then be required. In
the event any such approval shall be required, each Debtor absolutely and
unconditionally agrees to execute upon the request of the Agent, and absolutely
and unconditionally agrees to use its best efforts, upon the request of the
Agent, to cause the execution of, all such applications and other instruments as
may be necessary to obtain promptly such approval.
ARTICLE 4 - DEFINITIONS
All capitalized terms used herein without definition shall have the
respective meanings provided therefore in the Credit Agreement. In addition to
terms defined elsewhere herein, the following terms shall have the meanings
herein specified. Such definitions shall be equally applicable to the singular
and plural forms of the terms defined.
"Agreement" shall mean this Collateral Assignment of Proceeds and
Security Agreement as the same may be modified, supplemented or amended from
time to time in accordance with its terms.
"Communications Act" shall mean the Federal Communications Act of 1934,
as amended, and any other federal statute under which any License is issued, and
the rules and regulations thereunder as in effect from time to time.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Debtor's property.
"Obligations" shall mean, with respect to any Debtor, (a) the full and
prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities of such Debtor now existing or
hereafter incurred under, arising out of or in connection with any Loan Document
to which such Debtor is a party and the due performance and compliance by such
Debtor with the terms of each such Loan Document; (b) any and all sums advanced
by the Agent in order to preserve its security interest in the Collateral; (c)
in the event of any proceeding for the collection or enforcement of any
obligations or liabilities after an Event of Default shall have occurred and be
continuing, the reasonable expenses of re-taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the License Proceeds or
of any exercise by the Agent of its rights hereunder, together with reasonable
attorneys' fees and court costs; and (d) all other "Obligations" (as defined in
the Credit Agreement).
"Secured Parties" means the Agent and the Banks.
"Uniform Commercial Code" shall mean Revised Article 9 as in effect
under the law governing this Agreement as in effect on the date hereof.
"Termination Date" shall have the meaning provided in Section 5.8 of
this Agreement.
ARTICLE 5 - MISCELLANEOUS
Section 5.1. Notices. All notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows:
if to any Debtor:
Xxxxxxxxxx Communications Company
Telecopier Xx.
000 00(xx) Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Telecopier No.
Attention: Xx. Xxxxxxx X. Xxxxxx
with a copy to:
Fulbright & Xxxxxxxx
000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000-0000
Telecopier No.
Attention: Xxxxxxx Xxxxxx, Esquire
if to the Agent:
Bank of America, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopier No.:
Attention:
with a copy to:
Xxxxxxx Procter LLP
Xxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopier No. 000-000-0000
Attention:
Xxxxxx Xxxxxx Xxxxxx, Xx., Esquire
if to any Bank, at such address as such Bank shall
have specified in the Credit Agreement.
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder. Notices sent by
hand or overnight courier service, or mailed by certified or registered mail,
shall be deemed to have been given when received; notices sent by telecopier
shall be deemed to have been given when received.
Section 5.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by the Debtor directly affected thereby
and the Agent.
Section 5.3. Obligations Absolute. The obligations of each Debtor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Debtor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Loan Document; or
(c) any amendment to or modification of any Loan Document or any security for
any of the Obligations whether or not the Debtors, or any of them, shall have
notice or knowledge of any of the foregoing.
Section 5.4. Successors and Assigns. This Agreement shall be binding
upon each Debtor and its successors and assigns and shall inure to the benefit
of the Agent and the Secured Parties and their respective successors and
assigns. All agreements, statements, representations and warranties made by each
Debtor herein or in any certificate or other instrument delivered by each Debtor
or on its behalf under this Agreement shall be considered to have been relied
upon by the Secured Parties and shall survive the execution and delivery of this
Agreement and the other Loan Documents regardless of any investigation made by
the Agent or the Secured Parties or on their behalf.
Section 5.5. Headings Descriptive. The headings of the several sections
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
Section 5.6. Governing Law. THIS AGREEMENT IS A CONTRACT UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF L AW). EACH DEBTOR, THE AGENT AND THE
BANKS CONSENT TO THE JURISDICTION IN ANY OF THE FEDERAL OR STATE COURTS LOCATED
IN THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY MATTER RELATING TO
THIS AGREEMENT.
Section 5.7. Debtors' Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Debtor shall remain liable
to perform all of the obligations, if any, assumed by it with respect to the
Collateral of such Debtor and the Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Agent be required or obligated in any manner to perform
or fulfill any of the obligations of such Debtor under or with respect to any
Collateral.
Section 5.8. Termination; Release. This Agreement shall terminate
(provided that all indemnities set forth in the Credit Agreement shall survive
such termination) on the Termination Date. As used in this Agreement,
"Termination Date" shall mean the date upon which all Obligations (other than
contingent Obligations) have been paid in full, all commitments with respect
thereto have terminated, no Note is outstanding (and all Loans have been repaid
in full), all Letters of Credit have been terminated and all other Obligations
then due and payable have been paid in full. The Debtors shall have no authority
to file termination, release or other amendments to financing statements without
specific written authorization from the Agent.
Section 5.9. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
Section 5.10. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 5.11. The Agent. The Agent will hold in accordance with this
Agreement all items of the License Proceeds at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
Agent as holder of the License Proceeds and with respect to the disposition of
License Proceeds, and otherwise under this Agreement, are only those expressly
set forth in this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
DEBTORS:
ACC LICENSEE INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
HARRISBURG TELEVISION, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
KATV, LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
KTUL, LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
WSET, INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
WCIV, LLC
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
TV ALABAMA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
AGENT:
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Managing Director
