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JACOR COMMUNICATIONS, INC.
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (the "Security Agreement") is executed
as of February __, 1996 by and between Jacor Communications, Inc. (the
"Company") and Banque Paribas, as agent (the "Agent") for itself, the Co-Agents
and the Banks under the Credit Agreement hereafter referred to, any L/C
Providers (as defined in the Credit Agreement) (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, the Company is entering into that certain Credit
Agreement dated as of the date hereof, with the Banks (as defined therein), the
Co-Agents (as defined therein) and Banque Paribas, as agent (the "Agent") for
itself, the Co-Agents and the Banks (as modified, supplemented, amended,
extended, supplanted, or restated 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, the execution and delivery of this Security Agreement
is a condition precedent to the availability of credit under the Credit
Agreement;
NOW, THEREFORE, in order to induce the Agent, the Co-Agents,
the Banks, any L/C Providers and any Interest Rate Providers to enter into the
Credit Agree-
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ment, the Citicasters L/C Documents and Rate Hedging Agreements, respectively,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS.
As used in this 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 Company
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, Deposit Accounts, Documents,
Equipment, Fixtures, General Intangibles, Instruments, Inventory, Stock Rights
and Proceeds, products, additions and accessions thereto or thereof; provided,
however, that Collateral shall not include (i) any 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 Company, to the extent
that the Agent is not to receive a security inter-
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est therein, as provided in clause (i) of the lead in paragraph of Section 6.15
of the Credit Agreement, (iii) collateral pledged to the Agent pursuant to the
Company Pledge Agreement and (iv) the funds and segregated account at Society
National Bank of Cleveland described in Section 6.15(h) of the Credit
Agreement.
"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 Section 9-106 of the UCC, including, without limitation, all contract
rights, rights to receive payments of money, choses 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 and
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, 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.
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"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 the Company or to third parties under trust receipts or similar
documents.
"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.
"Security Agreement" means this Security Agreement, as it may
be amended or modified and in effect from time to time.
"Stock Rights" means any stock, any dividend or other
distribution and any other right or property which the Company 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 receive stock and any right to receive earnings, in
which the Company now has or hereafter acquires any right.
"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 the
singular and plural forms of the defined terms. Capitalized terms used but not
defined herein have the same meanings as ascribed to such terms in the Credit
Agreement.
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2. GRANT OF SECURITY INTEREST.
In order to secure the full and complete payment and
performance by the Company of the Obligations when due, the Company 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.
The Company represents and warrants to the Agent, each
Co-Agent, each Bank, each L/C Provider and each Interest Rate Provider that:
3.1 Existence and Standing. The Company 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.
3.2 Authorization, Validity and Enforceability. The
execution and delivery by the Company of this Security Agreement has been duly
authorized by proper corporate proceedings, and this Security Agreement
constitutes a legal, valid and binding obligation of the Company and creates a
security interest which is enforceable against the Company in accordance with
its terms in respect of all now owned and hereafter acquired Collateral, 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.
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3.3 Conflicting Laws and Contracts. Except as provided in
Section 5.3 of the Credit Agreement, neither the execution and delivery by the
Company of this Security Agreement, nor the creation and perfection of the
security interest in the Collateral granted hereunder, nor compliance with the
provisions hereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Company or the Company's
certificate of incorporation or by-laws or the provisions of any indenture,
instrument or agreement to which the Company 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 the Company pursuant to the terms of any such indenture,
instrument or agreement, except any violation, default or Lien which would not
have a material adverse effect on the business, financial condition or
operations of the Company. 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 Security Agreement or the grant of the security
interest in the Collateral pursuant hereto, other than the filing, within the
period established by applicable law, of this Security Agreement with the FCC
and as otherwise provided in Section 5.3 of the Credit Agreement.
3.4 Principal Location. The Company's mailing address and
the location of its chief executive office and the books and records relating
to the Receivables are disclosed in Exhibit "A" hereto; the Company has no
other places of business except those set forth in Exhibit "A" hereto.
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3.5 Property Locations. The Inventory and Equipment and
Fixtures 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 the Company as lessee except those designated in Part B of Exhibit
"A" hereto.
3.6 No Other Names. The Company has not conducted business
under any name except Jacor, Inc. and the name in which it has executed this
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 are and will be
correctly stated in all material respects in all records of the Company
relating thereto and in all invoices and reports with respect thereto furnished
to the Agent by the Company from time to time upon a request therefor.
3.9 Filing Requirements. None of the Equipment (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 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 the Company as "debtor" and the Agent as
"secured party" and describing the Collateral in the filing offices set forth
on Exhibit "E" hereto and (b) the Instruments listed on Exhibit "D" which
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constitute Collateral having been delivered to the Agent, the Security
Interests in the Collateral (other than (i) motor vehicles, (ii) Deposit
Accounts, (iii) 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 (iv) 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 which has not lapsed or been
terminated naming the Company 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.
3.11 Pledged Securities. Exhibit "D" hereto sets forth a
complete and accurate list of the Instruments if any, delivered to the Agent
for the benefit of the Agent, the Co-Agents, the Banks, any L/C Providers and
any Interest Rate Providers. The Company is the direct and beneficial owner of
each share of stock, if any, listed on Exhibit "D" annexed hereto as being
owned by it. The Company 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 the Company 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.
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From the date of this Security Agreement and thereafter until
this Security Agreement is terminated:
4.1 General.
4.1.1 Inspection. The Company will permit the Agent
any Co-Agent, any L/C Provider or any Bank, by its or their representatives and
agents, to inspect the Collateral without materially interfering with the
Company's normal operations, to examine and (except in the case of confidential
information relating to the Company's relationship with third parties) make
copies of the records of the Company relating thereto, and to discuss the
Collateral and the records of the Company with respect thereto with, and to be
advised as to the same by, the Company'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, all at such reasonable times and intervals as the Agent or any Bank
may determine, all at the Company's expense.
4.1.2 Taxes. The Company 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. The Company will maintain
complete and accurate books and records with respect to the Collateral, and
furnish to the Agent, with sufficient copies for each of the Banks and any
Interest Rate Providers, such reports relating to the Collateral as the Agent
shall from time to time reasonably request.
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4.1.4 Notice of Default. The Company will give
prompt notice in writing to the Agent, the Banks, 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 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 the Company to pay the
Obligations.
4.1.5 Financing Statements and Other Actions. The
Company 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 or
to otherwise obtain the full benefits of this Security Agreement. In addition,
without limiting the generality of the foregoing, the Company will
(a) xxxx 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, xxxx 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
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(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 interest and other rights granted or purported to be
granted to the Agent hereby.
4.1.6 Disposition of Collateral. The Company will
not sell, lease or otherwise dispose of the Collateral, except as permitted by
Section 6.13 of the Credit Agreement.
4.1.7 Liens. The Company will not create, incur, or
suffer to exist any Lien except the security interest created by this Security
Agreement and Liens permitted by Section 6.17 of the Credit Agreement. The
Company agrees to warrant and defend title to and ownership of the Collateral
and the lien created by this Security Agreement against the claims of all
Persons and maintain and preserve such lien at all times during the term of this
Security Agreement.
4.1.8 Change in Location or Name. The Company will
not (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 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 the
Company as debtor by the Agent as secured party, (ii) maintain records relating
to the Receivables at a location other than at the location specified on Exhibit
"A", (iii) maintain a place of business at a location other than a location
specified on Exhibit "A" hereto, (iv) change its name, or (v) change its mailing
address,
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unless the Company shall have given the Agent not less than 30 days' prior
written notice thereof.
4.1.9 Other Financing Statements. The Company will
not 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. The Company
will not 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 and is continuing, the Company may reduce
the amount of Accounts 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 Security Agreement or the Credit Agreement, the Company will
collect and enforce, at the Company's sole expense, all amounts due or hereafter
due to the Company under the Receivables.
4.2.3 Delivery of Invoices. The Company will deliver
to the Agent immediately upon its request while a Default or L/C Default exists
duplicate invoices with respect to each Account bearing such language of
assignment as the Agent shall specify.
4.2.4 Disclosure of Counterclaim on Receivables. If
any discount, credit or agreement to make a rebate or to otherwise reduce the
amount owing on
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a Receivable in excess of $50,000 exists or if, to the knowledge of the
Company, any dispute, setoff, claim, counterclaim or defense exists or has been
asserted or threatened with respect to any such Receivable, the Company will
disclose such fact to the Agent in writing in connection with the inspection by
the Agent of any record of the Company relating to such Receivable and in
connection with any invoice or report furnished by the Company to the Agent
relating to such Receivable.
4.3 Inventory and Equipment.
4.3.1 Maintenance of Goods. The Company will do all
things necessary to maintain, preserve, protect and keep the Inventory and the
Equipment in good repair and working and saleable condition, except for obsolete
Equipment no longer used or useful in the Company's business.
4.3.2 Insurance. The Company will (i) maintain fire
and extended coverage insurance on the Inventory and Equipment 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
the Inventory and the Equipment for the benefit of the Agent, the Co-Agent, 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 the Inventory and the Equipment and certificates with respect to
such insurance.
4.4 Instruments; Delivery of Pledged Collateral. The Company
will (i) deliver to the Agent immediately upon the execution of this Security
Agreement, the
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originals of all Instruments included in the Collateral (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 (except, 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 and Receivables collected in the ordinary course of
business).
4.5 Uncertificated Securities. The Company will permit the
Agent, the Co-Agents, the Banks, the L/C Providers and the Interest Rate
Providers from time to time to cause the appropriate issuers of uncertificated
securities constituting Instruments to xxxx 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 Security Agreement.
4.6 Stock.
4.6.1 Changes in Capital Structure of Issuers.
Except as otherwise permitted by Section 6.12 of the Credit Agreement, the
Company will not (i) permit or suffer any issuer of corporate securities
constituting Collateral which issuer is controlled by the Company to dissolve,
liquidate, retire any of its capital stock, reduce its capital or merge or
consolidate with any other
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entity, or (ii) vote any of the Instruments in favor of any of the foregoing.
4.6.2 Stock Rights. The Company will deliver to the
Agent, promptly upon receipt, all Stock Rights (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 the Company for the Agent, the Co-Agents,
the Banks, any L/C Providers and any Interest Rate Providers until delivery
thereof to the Agent.
4.6.3 Registration of Instruments. The Company will
permit any registrable Collateral 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. The Company
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, including, without limitation, exchange, subscription or any
other rights, privileges or options pertaining to any shares of the stock
pledged 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 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.
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4.8 Intercompany Security Agreement. So long as any
Obligations remain outstanding, the Company covenants and agrees with the
Agent, the Co-Agents, the Banks, any L/C Providers and any Interest Rate
Providers that the Company will not and will not permit the Subsidiaries to
amend or terminate the Intercompany Security Agreement (as defined in the
Credit Agreement).
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 or any Interest Rate Providers. If any other Default shall occur 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 Company hereby expressly waives. If any L/C Default shall
occur and be continuing, the L/C Providers may declare the Obligations to be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Company 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 Accelerated. Exercise
any or all of the rights and remedies provided (i) in this 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
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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 Company 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 Company's Obligations upon Default. Upon the request of
the Agent after the occurrence and during the continuance of a Default or a L/C
Default, the Company will, subject to Section 8.18 and in the case of a L/C
Default, subject to any intercreditor agreement in effect from time to time:
5.3.1 Assembly of Collateral. Assemble and make
available to the Agent the Collateral 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, or the books and records relating thereto, or both, are located, to
take possession of all or any part of the Collateral and to remove all or any
part of the Collateral.
6. WAIVERS, AMENDMENTS AND REMEDIES.
No delay or omission of the Agent, any Co-Agent, any Bank, any
L/C Providers or any Interest Rate Providers to exercise any right or remedy
granted under
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this Security Agreement shall impair such right or remedy or be construed to be
a waiver of any Default, 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 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 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 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 L/C Default, by
giving the Company written notice, elect to require that 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
Company 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
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notice from the Agent, the Company shall thereafter hold in trust for the
Agent, the Co-Agents, the Banks and any Interest Rate Providers all amounts and
proceeds received by it with respect to the 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 L/C Default, the
Company shall execute and deliver to the Agent the Agent's standard form
irrevocable lockbox agreements.
7.3 Special Collateral Account. The Agent may at any time
after the occurrence and during the continuance of a Default or 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. The Company shall have
no control whatsoever over said cash collateral account. The Agent may from
time to time (a) deposit the collected balances in said cash collateral account
into the Company's general operating account 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
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with the collection and enforcement of the Obligations or of the security
interest granted pursuant to this 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 and
the Co-Agents;
(c) THIRD, to payment of the principal of the
Obligations owing to the Banks, any Bank, any L/C Provider or any Interest Rate
Provider, pro rata amongst the Banks 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
Company's general operating account.
8. GENERAL PROVISIONS.
8.1 Notice of Disposition of Collateral, etc. The Company
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
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reasonable if sent to the Company, addressed as set forth in Section 9, at
least ten days prior to any such public sale or the time after which any such
private sale or other disposition may be made. In addition, the Company
waives, to the extent permitted by applicable law, (i) any right to require
either the Agent, any Co-Agent, any Bank, any L/C Provider or any Interest Rate
Provider to proceed against any other person, to exhaust their rights in any
other collateral, or to pursue any other right which either the Agent, any
Co-Agent, any Bank, any L/C Provider or any Interest Rate Provider may have,
(ii) with respect to the Obligations, presentment and demand for payment,
protest, notice of protest and non-payment, and notice of the intention to
accelerate, and (iii) all rights of marshalling in respect of any and all of
the Collateral.
8.2 Compromises and Collection of Collateral. The Company,
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 may be expected to be
recovered with respect to a Receivable. In view of the foregoing, the Company
agrees that the Agent may at any time and from time to time, if a Default or
L/C Default has occurred and is continuing, compromise with the obligor on any
Receivable, accept in full payment of any Receivable such amount as the Agent
in its reasonable discretion shall terminate or abandon any 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.
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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 Security Agreement which the Company 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 for any amounts paid by the Agent pursuant to
this Section 8.3. The Company's 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.
The Company irrevocably authorizes the Agent at any time and from to time in
the sole discretion of the Agent and irrevocably appoints the Agent as its
attorney in fact to act on behalf of the Company (i) at any time (if the
Company has failed to do so promptly upon a request therefor) (a) to execute on
behalf of the Company 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, and
(b) to file a carbon, photographic or other reproduction of this Security
Agreement or any financing statement with respect to the Collateral 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 the Collateral and (ii) at any time after
the occurrence and during the continuance of a Default or 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 in the name of
the Agent or the Company, and (c) to apply the proceeds of any Collateral
received by the Agent to the Obligations as provided in Section 7. The Company
hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section is irrevocable and coupled with an interest.
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8.5 Specific Performance of Certain Covenants. The Company
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 the Company contained in this
Security Agreement, that the covenants of the Company contained in the Sections
referred to in this Section 8.5 shall be specifically enforceable against the
Company.
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 L/C Default, the Agent shall be entitled to occupy and use any
premises owned or leased by the Company where any of the Collateral or any
records relating to the Collateral are located until the Obligations are paid
or the Collateral is removed therefrom, whichever first occurs, without any
obligation to pay the Company for such use and occupancy.
8.7 Dispositions Not Authorized. The Company is not
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 the Company
and the Agent and 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 authoriza-
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tion 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
Security Agreement are used in this 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
Security Agreement shall be binding upon and inure to the benefit of the
Company, the Agent, the Co-Agents, the Banks, any L/C Providers and any
Interest Rate Providers and their respec- tive successors and assigns, except
that the Company shall not have the right to assign its rights under this
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 Company contained in this Security Agreement shall survive
the execution and delivery of this Security Agreement.
8.11 Taxes and Expenses. Any Taxes payable or ruled payable
by Federal or State authority in respect of this Security Agreement shall be
paid by the Company, together with interest and penalties, if any, other than
Taxes expressly excluded under Section 3.2(a)(i) and 3.2(a)(ii) of the Credit
Agreement. The Company 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 accoun- tants' 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 Security Agreement and in the audit, analysis, administra-
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tion, 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
Security Agreement are for convenience of reference only, and shall not govern
the interpretation of any of the terms and provisions of this 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 reasonable request and 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 Company and the Agent relating
to the Collateral and supersedes all prior agreements and understandings
between the Company and the Agent relating to the Collateral.
8.15 CHOICE OF LAW. THIS SECURITY AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS)
OF THE STATE OF ILLINOIS.
8.16 Distribution of Reports. The Company authorizes the
Agent, as the Agent may elect in its sole discretion, to discuss with and
furnish to the Co-Agents,
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26
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 the Company whether such
information was provided by the Company 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 (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 the
Company'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. The Company 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 Security Agreement, or the manufacture, purchase,
acceptance, rejection, ownership, delivery, lease, possession, use, operation,
condition, sale, return or other disposition of any Collateral (including,
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27
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 the Company, 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 or any
Interest Rate Provider.
8.18 Control; Limitation of Rights.
(a) Notwithstanding anything herein to the contrary,
this 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 the Company 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 the Company, which ownership and control remains
exclusively and at all times in the shareholders of the Company and the
Company, 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 the
Company ("License"), or the transfer of control of the Company within the
meaning of Section 310 of the Communications Act of 1934, as amended.
(b) Notwithstanding any other provision of this
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
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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 the Company, 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.
(c) Subject to Section 8.18(e), if a Default or L/C
Default shall have occurred and be continuing, the Company 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. The Company hereby
agrees to authorize such an involuntary transfer of control upon the request of
the receiver so appointed and, if the Company shall refuse to authorize the
transfer, the Company's approval may be required by the court. Upon the
occurrence and continuance of a Default or L/C Default, the Company shall
further use its best efforts to assist in obtaining approval of the FCC, if
required, for any action or transactions contemplated by this 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
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and regulations for approval of the transfer or assignment of any portion of
the Collateral, together with any License.
(d) The Company 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 the
Company to comply with the provisions 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 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 Security Agreement which would constitute or result in
any assignment of a License or any change of control of any License or the
Company 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 Company by the Agent, provided
that such proceeds are used to rebuild, repair or restore such Inven-
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30
tory, 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 Company Remains Liable. Anything herein to the contrary
notwithstanding,
(a) the Company 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 the Company 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.
9.1 Sending Notices. Any notice required or permitted to be
given under this Security 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, of 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 the Company at
the address set forth on Exhibit "A" hereto as its
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chief executive office (with copies to Xxxxx X. Xxxxxxxxx, Esq., Xxxxxxxxx &
Xxxxxxxxxxx, X.X., 0 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000,
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 the 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 of the Company, 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 Security Agreement by
signing any such counterpart. This Security Agreement shall be effective when
it has been executed by the Company and the Agent.
9.4 Loan Document. This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the forms and provisions thereof.
10. THE AGENT.
Banque Paribas has been appointed Agent of the Co-Agents, the
Banks, any L/C Providers and any Interest Rate Providers hereunder pursuant to
Article X of the
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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 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.
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IN WITNESS WHEREOF, the undersigned have executed this
Security Agreement as of the date first above written.
JACOR COMMUNICATIONS, INC.
By:______________________________________
Title:___________________________________
By:______________________________________
Title:___________________________________
1300 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: President
BANQUE PARIBAS, as Agent
By:______________________________________
Title:___________________________________
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
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EXHIBIT "A"
(See Sections 3.4 and 3.5 of Security Agreement)
Chief Executive Office and Mailing Address:
Jacor Communications, Inc.
1300 PNC Center
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attention: President
Location(s) of Receivables Records (if different from Chief Executive Office
above):
Locations of Inventory and Equipment and Fixtures:
A. Properties Owned by the Company:
None*
B. Properties Leased by the Company (Include Landlord's Name):
None*
____________________
* All interests of the company in Inventory, Equipment and Fixtures were
transferred to Jacor Broadcasting Corporation as of January 1, 1993.
35
EXHIBIT "B"
Legal Description* and Street Address of Property on which Fixtures are
located:
(See Section 3.9 of Security Agreement)
None**
Name and Address of Record Owner:
_________________________________
_________________________________
_________________________________
____________________
* For those properties designated by the Agent on which fixture filings
are to be made.
** All interests of the Company in Fixtures were transferred to Jacor
Broacasting Corproation as of January 1, 1993.
EXHIBIT "C"
(See Section 3.10 of Security Agreement)
EXISTING LIENS ON THE COLLATERAL
Secured Party Collateral* Principal Balance Maturity
------------- ---------- ----------------- --------
[XEROX CORP. XEROX 1090 COPIER
PITNEY XXXXX POSTAGE MACHINES
XXXXXXX OFFICE MACHINES]
____________________
* The Company transferred all of its interests in all tangible and intangible
property (other than stock of the Subsidiaries) to Jacor Broadccasting
Corporation as of January 1, 1993.
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EXHIBIT "D"
(See Section 3.11 of Security Agreement)
LIST OF PLEDGED SECURITIES
A. STOCKS: None except the Pledged Stock
(as defined therein) pledged by the Company
pursuant to the Company Pledge Agreement
X. XXXXX:
Issuer Number Face Amount Coupon Rate Maturity
------ ------ ----------- ----------- --------
C. GOVERNMENT SECURITIES:
Issuer Number Type Face Amount Coupon Rate Maturity
------ ------ ---- ----------- ----------- --------
None
