BORROWER SECURITY AGREEMENT
THIS BORROWER SECURITY AGREEMENT is made and entered into as of September
30, 1996, by and between GRAY COMMUNICATIONS SYSTEMS, INC., a Georgia
corporation (the "Debtor"), and KEYBANK NATIONAL ASSOCIATION (the "Secured
Party"), as agent for itself and the other financial institutions listed on the
signature pages of the Loan Agreement (as defined below), and their successors
and assigns. The Secured Party and such other financial institutions may be
referred to hereinafter individually as a "Bank" or collectively as the "Banks."
RECITALS
A. The Debtor, the Secured Party, NationsBank, N.A. (South), as Co-Agent,
and the other Banks have entered into a Loan Agreement dated as of September 23,
1996 (as the same may be extended, amended, restated or modified from time to
time, the "Loan Agreement"), which is hereby incorporated herein by this
reference, pursuant to which the Banks have agreed to make available to the
Debtor up to $53,500,000 on a reducing revolving credit basis and up to
$71,500,000 on a revolving credit converting to a term loan basis. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Loan Agreement. The Debtor may also be
indebted to a Bank or an Affiliate of a Bank from time to time in respect of
Rate Hedging Obligations.
B. In order to induce the Secured Party and the Banks to enter into the
Loan Agreement and to ensure that the Loans made pursuant to the Loan Agreement
will be secured as provided herein, the Debtor has agreed to enter into this
Agreement.
C. The Banks have appointed the Secured Party as their agent for the
purpose, among other things, of protecting and preserving the security for the
repayment of the Debtor's Obligations under the Loan Agreement.
AGREEMENTS
In consideration of the foregoing Recitals, and of the agreements made
herein, and of the Loans made or to be made by the Banks to the Debtor, the
Debtor and the Secured Party, on behalf of the Banks, agree as follows:
1. GRANT OF SECURITY INTEREST.
1.1 COLLATERAL. The Debtor hereby grants to the Secured Party, for the
benefit of the Banks, ratably in proportion to the total Secured Obligations (as
that term is defined below) owing at any time to the Banks, a first priority
security interest in all of the Debtor's personal property, both tangible and
intangible, whether presently owned or existing or hereafter acquired or arising
and wheresoever located, and all books, records, computer printouts, tapes,
disks, ledger sheets, files and other data relating thereto, including without
limitation:
(a) all inventory of the Debtor, including all goods, raw materials,
work in process, merchandise, goods in transit to the Debtor for which payment
has been made, and other tangible personal property held for sale or lease or
furnished or to be furnished under contracts of service or used or consumed in
the Debtor's business (all hereinafter called the "Inventory");
(b) all accounts receivable, contracts, contract rights (including,
without limitation, any arising out of leases or licenses of real or personal
property), rights to payment, programming agreements, tax refunds, claims,
chattel paper, letters of credit, documents, drafts and accounts, including,
without limitation, all of the same evidencing or representing indebtedness due
or to become due to the Debtor for its own account or on account of goods sold
or leased or to be sold or leased by the Debtor, or services rendered or to be
rendered by the Debtor (all hereinafter called the "Accounts");
(c) all right, title and interest of the Debtor in and to:
(i) all copyrights, copyright registrations and applications for
copyright registrations, including, without limitation, all renewals and
extensions thereof, the right to recover for all past, present and future
infringements thereof, and all other rights of any kind whatsoever accruing
thereunder or pertaining thereto (collectively, the "Copyrights");
(ii) all patents and patent applications, including, without
limitation, the inventions and improvements described and claimed therein
together with the reissues, divisions, continuations, renewals,
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extensions and continuations-in-part thereof, all income, royalties,
damages and payments now or thereafter due and/or payable under and with
respect thereto, including, without limitation, damages and payments for
past or future infringements thereof, the right to sue for past, present
and future infringements thereof, and all rights corresponding thereto
throughout the world (collectively, the "Patents");
(iii) all trade names, trademarks and service marks, logos,
trademark and service mark registrations, and applications for trademark
and service mark registrations, including, without limitation, all renewals
of trademark and service mark registrations, all rights corresponding
thereto throughout the world, the right to recover for all past, present
and future infringements thereof, all other rights of any kind whatsoever
accruing thereunder or pertaining thereto, together in each case, with the
product lines and goodwill of the business connected with the use of, and
symbolized by, each such trade name, trademark and service mark
(collectively, the "Trademarks");
(iv) (A) all inventions, processes, production methods,
proprietary information, know-how and trade secrets used or useful in the
business of the Debtor; (B) all licenses or user or other agreements
granted to the Debtor with respect to the Copyrights, Patents, Trademarks
or any of the foregoing; (C) all information, customer lists,
identification of suppliers, data, plans, blueprints specifications,
designs, drawings, recorded knowledge, surveys, engineering reports, test
reports, manuals, materials standards, processing standards, performance
standards, catalogs, computer and automatic machinery software and
programs, and the like pertaining to the operation by the Debtor of its
business; (D) all field repair data, sales data and other information
relating to sales or service of products now or hereafter manufactured and
which pertain to the Debtor's business; (E) all accounting information
which pertains to the Debtor's business and all media in which or on which
any of the information or knowledge or data or records which pertain to
such business may be recorded or stored and all computer programs used for
the compilation or printout of such information, knowledge, records or
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data; (F) all licenses, consents, permits, variances, certifications and
approvals of governmental agencies now or hereafter held by the Debtor
pertaining to the operation of its business; and (G) all causes of action,
claims and warranties now or hereafter owned or acquired by the Debtor in
respect of any of the items listed above;
(v) all money, deposit accounts, insurance proceeds, securities,
partnership interests, notes, instruments, licenses, franchises, permits,
authorizations, agreements, leases, and general intangibles of the Debtor,
including, without limitation, goodwill, going concern value, all of the
Debtor's rights under or relating to any Licenses and the proceeds of any
Licenses, and all rights incident or appurtenant to such Licenses and the
right to receive all proceeds derived from or in connection with the sale,
assignment or transfer thereof; PROVIDED, HOWEVER, that such security
interest shall include the Licenses granted by the FCC only at such times
and to the extent (but only to the extent) that the Debtor is permitted to
grant a security interest therein under applicable provisions of the
Communications Act of 1934, as amended, and the rules and regulations of
the FCC promulgated thereunder, but shall include at all times, to the
maximum extent permitted by law, all rights incident or appurtenant to such
Licenses and the right to receive all proceeds derived from or in
connection with the sale, assignment or transfer of such Licenses or any
Station (all of the foregoing items of collateral referenced in this
Subsection 1.1(c), including, without limitation, the Copyrights, the
Patents and the Trademarks, being hereinafter called the "Intangibles");
(d) all of the Debtor's furniture, fixtures, trade fixtures,
machinery, equipment, antennas, towers, transmitting and receiving equipment,
computers, pagers, satellite earth stations, microwave equipment, appliances,
motor vehicles, furnishings, leasehold improvements, operating and testing
equipment, amplifiers and other electronic equipment, parts, supplies and tools
(all hereinafter called the "Equipment");
(e) all of the Debtor's rights as a seller of goods under Article 2
of the Uniform Commercial Code or otherwise
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with respect to Inventory and Equipment, and, as to goods represented by or
securing any of the Accounts, all of the Debtor's rights therein, including,
without limitation, rights as an unpaid vendor or lienor and including rights of
stoppage in transit, replevin and reclamation;
(f) all guarantees, mortgages or security interests in real or
personal property, leases or other agreements or property now or hereafter
securing or relating to any of the items referred to above in favor of the
Debtor, or now or hereafter acquired for the purpose of securing and enforcing
any of such items in favor of the Debtor, and the proceeds thereof;
(g) all rents, revenues, proceeds, issues, profits, royalties, income
and other benefits derived from real estate, and from any improvements or
fixtures thereon owned by the Debtor;
(h) all right, title and interest of the Debtor in and to all
proceeds of insurance and any and all awards made for the taking by eminent
domain, or by any proceeding or purchase in lieu thereof, of any real estate, or
any improvements or fixtures thereon, including without limitation any awards
resulting from any damage to any real estate, improvements or fixtures for which
compensation shall be given by any governmental authority;
(i) all the proceeds, products, income and profits of any of the
foregoing and the proceeds of any such proceeds, products, income and profits;
and
(j) all right, title and interest of the Debtor in or to all
instruments and documents covering or relating to the above described Collateral
(as defined below) or to the property described in or represented by the
Accounts (all such instruments and documents being called the "Related
Documents");
PROVIDED, HOWEVER, that, with respect to any agreement, lease or contract right
which prohibits the grant of a security interest in the Debtor's interest
therein or the assignment thereof, such grant of a security interest or
assignment shall be limited to the account or general intangible for money due
or to become due relating to or arising out of such agreement, lease or contract
right.
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All of the foregoing property in which the Secured Party has been granted a
security interest is hereinafter collectively referred to as the "Collateral".
1.2 OBLIGATIONS SECURED. The security interests of the Secured Party under
this Agreement secure (a) the payment and performance of all indebtedness,
Obligations and liabilities of the Debtor arising at any time and from time to
time, now or in the future, pursuant to the Loan Agreement or any Collateral
Document, including, without limitation, such obligations as are evidenced by
the Notes; (b) the payment and performance of all obligations and liabilities of
the Debtor arising at any time and from time to time, now or in the future,
pursuant to any agreement with a Bank or an Affiliate of a Bank with respect to
Rate Hedging Obligations; (c) performance by the Debtor of the agreements set
forth herein, in the Loan Agreement and in the Collateral Documents; (d) all
payments made or expenses incurred by the Secured Party under this Agreement,
the Loan Agreement or the Collateral Documents, including, without limitation,
reasonable attorneys fees and legal expenses, in the exercise, preservation or
enforcement of any of the rights, powers or remedies of the Secured Party, or in
the enforcement of the obligations of the Debtor, hereunder; and (e) any
renewals, continuations or extensions of any of the foregoing (all of which are
referred to herein as the "Secured Obligations").
2. THE DEBTOR'S REPRESENTATIONS AND WARRANTIES. The Debtor represents
and warrants to the Secured Party as follows, and these representations and
warranties shall survive the execution hereof and the making of the Loans and
shall be continuing until the termination of this Agreement:
2.1 AUTHORITY. The execution, delivery and performance of this Agreement
and any instruments or documents executed and delivered by the Debtor pursuant
hereto are within the Debtor's corporate powers, have been duly authorized by
all proper and necessary corporate and stockholder action, are not in
contravention of law or the terms of the Certificate of Incorporation, By-Laws
or other organizational documents of the Debtor or any provision of any material
indenture, contract or agreement to which the Debtor is a party or by which it
or any of its property is bound; and this Agreement constitutes a legal, valid
and binding obligation of the Debtor enforceable in accordance with its terms
except to the extent that the enforceability hereof may be limited by
bankruptcy, insolvency or like laws affecting creditors' rights generally and
the application of equitable principles.
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2.2 TITLE. Except for Permitted Liens, the Debtor is and will be the sole
owner of all of the Collateral, whenever acquired or arising, free and clear of
all Liens or adverse claims.
2.3 ACCOUNTS. Each account (as that term is defined in the Uniform
Commercial Code) included in the Debtor's Accounts as shown on the Debtor's
books and records, whether currently existing or hereafter arising, is or will
be genuine and in all respects is or will be what it purports to be. The whole
of the balance indicated as being unpaid and owing with respect to each such
account on the books of the Debtor, is, and shall be, unpaid and owing, net of
any reserves on the books of the Debtor.
2.4 NO OTHER NAMES. The Debtor has not conducted business under any name
other than the name in which it executed this Agreement.
2.5 INTELLECTUAL PROPERTY. SCHEDULE A attached hereto sets forth a
complete and accurate list of all registered Copyrights, Patents and Trademarks
owned by the Debtor on the date hereof. The Debtor owns and possesses the right
to use, and has done nothing to authorize or enable any other Person to use, any
Copyright, Patent or Trademark listed on SCHEDULE A. All registrations for such
Copyrights, Patents and Trademarks are valid and in full force and effect, and
the Debtor owns or possesses the right to use all material Copyrights, Patents
and Trademarks necessary for the operation of its business. To the Debtor's
knowledge, (a) there is no violation by others of any right of the Debtor with
respect to any material Copyright, Patent or Trademark and (b), to the best of
the Debtor's knowledge, the Debtor is not infringing in any respect upon any
copyright, patent or trademark of any other Person; and no proceedings have been
instituted or are pending against the Debtor or, to the Debtor's knowledge,
threatened, and no claim against the Debtor has been received by the Debtor,
alleging any such violation.
2.6 SOLVENCY. The Debtor has received, or has the right to receive, by
contribution or otherwise, consideration which is the reasonably equivalent
value of the obligations and liabilities that it has incurred to the Banks. The
Debtor is not insolvent as defined in Title 11 of the United States Code or any
other applicable federal or state bankruptcy or insolvency statute, nor, after
giving effect to the consummation of the transactions contemplated in the Loan
Agreement, will the Debtor be rendered insolvent by the execution and delivery
of this
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Agreement. The Debtor has not engaged, nor is the Debtor about to engage, in
any business or transaction for which the assets retained by it shall be an
unreasonably small capital, taking into consideration the obligations to the
Secured Party incurred under the Loan Agreement and hereunder. The Debtor does
not intend to, nor does the Debtor believe that it will, incur debts beyond its
ability to pay them as they mature.
3. COVENANTS OF THE DEBTOR. The Debtor agrees and covenants with the
Secured Party as follows:
3.1 MAINTENANCE AND USE OF COLLATERAL. The Debtor (a) shall keep all its
Inventory and Equipment in good condition and repair, reasonable wear and tear
excepted, and shall not commit any material waste thereof or permit anything to
be done which may materially impair the value thereof; (b) shall observe and
perform all material terms, conditions and covenants contained in any material
agreements, leases, licenses, permits, Operating Agreements and franchises
evidencing the Intangibles, including, without limitation, the Licenses; (c)
shall use the Collateral only in the ordinary course of its business and not in
material violation of any applicable License, permit, authorization, law,
ordinance, regulation, rule, order, franchise or policy of insurance; and (d)
shall take all commercially reasonable actions as may be necessary to keep all
material Patents, Copyrights and Trademarks from becoming invalidated or subject
to any claim of abandonment for non-use.
3.2 TAXES. Except as expressly provided in the Loan Agreement, the Debtor
shall pay and discharge promptly all taxes, assessments, license or permit fees
and governmental charges or levies imposed upon it or in respect of the
Collateral before the imposition of any penalty, as well as all lawful claims
for labor, materials, supplies or other matters which, if unpaid, might become a
Lien or charge upon the Collateral or any part thereof, and, upon request,
deliver to the Secured Party evidence of the discharge of such taxes,
assessments, charges or claims.
3.3 SALE OR TRANSFER. Except as expressly provided in the Loan Agreement
or herein, the Debtor shall not voluntarily or involuntarily sell, assign,
lease, transfer, pledge, hypothecate or otherwise dispose of or encumber any of
the Collateral or any interest therein, or permit any of it to become a fixture
on or an accession to other goods or property. For purposes of this Section
3.3, the term "Collateral" shall be deemed to include the Licenses whether or
not the Secured Party is permitted under existing law to hold a security
interest therein.
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3.4 INSURANCE. The Debtor will obtain and maintain a policy or policies of
insurance insuring the Collateral in accordance with Section 7.3 of the Loan
Agreement, the terms and provisions of which are hereby incorporated herein by
this reference. In the event of any damage or destruction to the Collateral or
any part thereof, any and all proceeds of such insurance shall be delivered to
the Secured Party. Such proceeds of insurance shall, (a) if no Event of Default
or Possible Default then exists, be paid to the Debtor to be used solely for
repair or replacement of the property so damaged, or (b) if an Event of Default
or Possible Default then exists, be applied, in the Secured Party's discretion,
against the Secured Obligations then outstanding, whether or not then due and
payable. The Debtor hereby appoints the Secured Party as its agent and
attorney-in-fact (which appointment is coupled with an interest) with full power
and authority to make proof of loss, to give a receipt for any sums collected
under said policies and, in the event any insurance losses are paid by check,
draft or other instrument payable to the Debtor and the Secured Party, to
endorse the Debtor's name thereon and take such further steps on behalf of the
Debtor as may be necessary to realize on such insurance.
3.5 MAINTENANCE OF SECURITY INTEREST. The Debtor shall do all things
necessary or reasonably requested by the Secured Party to preserve and maintain
the security interests of the Secured Party hereunder as a first lien in the
Collateral, except for Permitted Liens, and shall not permit the creation of any
other Lien (other than Permitted Liens) in the Collateral. The Debtor shall
protect and defend the Collateral from and against any and all claims, demands
or legal proceedings brought or asserted by any party other than the Secured
Party in such capacity. The Debtor shall, if requested by the Secured Party,
execute and deliver and shall file or record, or cause to be filed or recorded,
such notices, financing statements, continuation statements, certificates of
title and other documents as the Secured Party may reasonably deem appropriate,
and shall deliver to the Secured Party upon request therefor such insurance
policies, securities, agreements, leases, franchises, licenses, permits,
writings, documents, certificates, instruments or other Intangibles, as may be
necessary to perfect the security interests of the Secured Party hereunder. The
Debtor shall bear the expenses of all such filings and actions. All documents
which are being filed or recorded shall be in form and substance satisfactory to
the Secured Party. The Debtor shall do such further acts and things and execute
and deliver to the Secured Party such additional conveyances, assignments,
agreements and
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instruments as the Secured Party may reasonably require or deem advisable to
carry into effect the purposes of this Agreement or to better perfect, assure
and confirm unto the Secured Party its rights, powers and remedies hereunder.
Upon request by the Secured Party, the Debtor shall mark conspicuously all
chattel paper and instruments with a legend, in form and substance satisfactory
to the Secured Party, indicating that such Collateral is subject to the security
interest granted hereby.
3.6 RECORDS, STATEMENTS AND RELATED DOCUMENTS. The Debtor agrees, (a) when
reasonably requested to do so by the Secured Party, to prepare and deliver to
the Secured Party a schedule in form reasonably satisfactory to the Secured
Party, certified by an authorized officer of the Debtor, listing the location by
county and state of all Collateral; (b) to keep accurate and complete records at
all times with respect to the Collateral and to deliver to the Secured Party
copies of such records and such other information regarding the Collateral or
account debtors which the Secured Party may reasonably request; and (c) that at
any reasonable time the Secured Party or its authorized representatives may
enter the premises of the Debtor to examine the Collateral and inspect and copy
the books and records of the Debtor. The Debtor shall furnish to the Secured
Party from time to time statements and schedules further identifying and
describing the Copyrights, the Patents and the Trademarks, respectively, and
such other reports in connection with the Copyrights, the Patents and the
Trademarks as the Secured Party may reasonably request, all in reasonable
detail.
3.7 LOCATION. The principal and chief executive office of the Debtor is
located at 126 North Washington Street, Albany, Georgia 31701, and all of the
Collateral is located in the jurisdictions listed on SCHEDULE B attached hereto.
The Debtor shall not move its principal and chief executive office or any of the
Collateral, or any records relating thereto, from a county or other filing
location listed on SCHEDULE B, without thirty days prior written notice to the
Secured Party. If the Debtor acquires any Collateral at any other location not
listed on SCHEDULE B, it shall immediately notify the Secured Party.
3.8 NOTICE. The Debtor shall promptly notify the Secured Party of any
loss, destruction or damage to any material portion of the Collateral.
3.9 COLLECTION OF ACCOUNTS. The Debtor agrees that it will use
commercially reasonable efforts to collect all Accounts as the same become due.
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3.10 CHANGE OF NAME, IDENTITY OR CORPORATE STRUCTURE. The Debtor shall not
change its name, identity or corporate structure, voluntarily or involuntarily,
except as expressly permitted in the Loan Agreement.
4. RIGHT TO PERFORM FOR THE DEBTOR. If an Event of Default shall occur,
subject to compliance with all applicable law, including, without limitation,
the rules and regulations of the FCC and the applicable provisions of the
Licenses, the Secured Party may, but shall not be obligated to, on behalf of the
Debtor and in its name and stead, in addition to any other rights or remedies
provided to the Secured Party by law or by this Agreement, perform any act, make
any payment, discharge any obligation, collect any Account or money owed to the
Debtor or otherwise act for the Debtor in such manner as the Secured Party in
its sole discretion may deem necessary or advisable to protect, secure or
enforce its interests, rights or remedies hereunder. The Debtor shall pay to
the Secured Party on demand the amounts of all such payments made or expenses
incurred by the Secured Party, including reasonable attorneys' fees and legal
expenses, in exercising any of the rights granted in this Section 4. The
obligation to repay such amounts shall be one of the Secured Obligations secured
hereby and shall bear interest at the Default Interest Rate.
5. DEFAULT. The occurrence of any Event of Default under the Loan
Agreement shall constitute an Event of Default under this Agreement.
6. REMEDIES. The Secured Party shall have all of the rights and remedies
of a secured party under the Uniform Commercial Code in effect in any applicable
jurisdiction, as well as all rights and remedies provided by any other
applicable law, at law or in equity, or herein, in the Loan Agreement or in any
other instrument executed by the Debtor in favor of the Secured Party or the
Banks. Without limiting the generality of the foregoing, the Secured Party
shall also have the right to do any or all of the following (as set forth in
Sections 6.1 through 6.7 below) upon the occurrence and during the continuance
of an Event of Default and subject to compliance with all applicable rules and
regulations of the FCC and any other applicable federal or state regulatory
authority, and other applicable requirements of law:
6.1 POSSESSION. Without notice, demand or hearing, any right to which is
hereby waived by the Debtor, the Secured Party may take possession of all or any
part of the Collateral
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and enter and remain upon the premises where such Collateral is located for the
purpose of such possession and the exercise of the remedies provided herein,
without the same being a trespass.
6.2 ASSEMBLING COLLATERAL. The Secured Party may require the Debtor to
assemble the Collateral and to make it available to the Secured Party at any
mutually convenient place designated by the Secured Party.
6.3 OPERATION. The Secured Party may take such measures, including the use
or operation of the Collateral in the Debtor's business, or the repair,
dismantling, removal or transportation of all or any part of the Collateral, as
the Secured Party may deem necessary or proper for the care, protection,
maintenance and preservation of the Collateral, for the preparation of the
Collateral for sale, lease, or other disposition, or for the most advantageous
beneficial exercise of its remedies hereunder. Without limiting the generality
of the foregoing, the Secured Party shall have the right to apply for and have a
trustee or receiver appointed by a court of competent jurisdiction in any action
taken by the Secured Party to enforce its rights and remedies hereunder in order
to manage, protect and preserve the Collateral and continue the operation of the
business of the Debtor and to collect all revenues and profits thereof and apply
the same to the payment of all expenses and other charges of such receivership,
including the compensation of the receiver, and to the payment of the Secured
Obligations until a sale or other disposition of such Collateral shall be
finally made and consummated. Furthermore, the Debtor shall take any action
which the Secured Party may reasonably request in order to obtain and enjoy the
full rights and benefits granted to the Secured Party by this Agreement,
including specifically, at the Debtor's own cost and expense, the use of its
best efforts to assist in obtaining the approval of the FCC and any other
applicable federal or state regulatory authority and any other third party for
any action or transaction contemplated by this Agreement which is then required
by law or the terms of any contract, agreement or License, permit or
authorization.
6.4 COLLECTION OF ACCOUNTS; SPECIAL ACCOUNT.
(a) Without notice to the Debtor, the Secured Party may notify the
account debtor obligated under any Account of the Secured Party's security
interest therein and may direct such account debtor to make payment of all
amounts due or to become due the Debtor thereunder directly to the Secured Party
or any agent selected by it and, upon such notification, may
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enforce, or cause such agent to enforce, collection of any such Account in the
same manner and to the same extent as the Debtor might have done. Effective
upon the occurrence and during the continuance of an Event of Default, the
Debtor hereby constitutes and appoints the Secured Party its true and lawful
attorney (which appointment is coupled with an interest), with full power of
substitution, either in the Secured Party's own name or in the name of the
Debtor, to ask for, demand, sue for, collect, receive, receipt and give
acquittance for any and all moneys due or to become due under or by virtue of
any Account; to endorse checks, drafts, orders and order instruments for the
payment of money payable to the Debtor on account thereof; to settle,
compromise, prosecute or defend any action, claim or proceeding with respect
thereto; and to sell, assign, pledge, transfer and make any agreement
respecting, or otherwise deal with, the same.
(b) Nothing in this Agreement shall be construed as requiring or
obligating the Secured Party to make any demand or inquiry as to the nature or
sufficiency of any payment received by it. The Secured Party shall not be
obligated to present or file any claim or notice or to take any action with
respect to any such Account, or the monies due or to become due thereunder, or
the property covered thereby or by any Related Document. No action taken by the
Secured Party or omitted to be taken with respect to any such Account shall give
rise to any defense, counterclaim or offset in favor of the Debtor or to any
claim or action against the Secured Party or any Bank.
(c) The Debtor agrees that all cash, proceeds, checks, drafts, orders
and other instruments for the payment of money received by it on account of any
Account or as a result of the sale, lease, destruction, condemnation or other
voluntary or involuntary disposition of any Collateral, whether pursuant to the
exercise of a right granted herein to the Debtor or otherwise, shall be the
property of the Secured Party. All such proceeds shall be deposited in the form
received (properly endorsed for collection where required) not later than the
Banking Day following the day of receipt in a special bank account maintained
with the Secured Party in the Debtor's name, over which the Secured Party alone
shall have the right of withdrawal, for the payment of all of the Secured
Obligations. The Debtor shall not commingle any such collections or proceeds
with any of its other funds or property and shall hold the same upon an express
trust for the Secured Party until deposited in the special account, as
aforesaid. In the event the Debtor shall obtain possession of any goods (as a
result of their return or repossession or otherwise), the sale, lease or other
disposition
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of which gave rise to an Account, the Debtor shall hold the same subject to the
security interest of the Secured Party hereunder and to dispose of such goods,
at its own expense and sole risk but for the account of the Secured Party, in
such manner as the Secured Party may direct.
6.5 TRANSFER OF INTANGIBLES.
(a) The Secured Party shall have the right to take possession of any
agreement, lease, License, permit or other document evidencing any of the
Collateral, and may apply for or seek, on behalf of and as attorney-in-fact for
the Debtor, any necessary consent to the voluntary or involuntary assignment,
transfer, conveyance, sale, renewal, reissuance or other disposition of the
same, and the Debtor shall cooperate fully with the Secured Party in doing so
and shall take all actions requested by the Secured Party in furtherance
thereof.
(b) The Debtor hereby constitutes and appoints the Secured Party its
true and lawful attorney (which appointment is coupled with an interest) with
full power of substitution, either in the Secured Party's own name or in the
name of the Debtor, to assign, transfer and convey any and all of the Debtor's
rights in and to any of the Intangibles, including without limitation, any
License (to the extent permitted by law), to any purchaser of all or any of the
Collateral pursuant to Section 6.6 hereof.
(c) In connection with the exercise of its remedies under the Loan
Agreement and this Agreement, the Secured Party may obtain the appointment of a
trustee or receiver to obtain, upon receipt of all necessary judicial or other
federal or state regulatory authority consents or approvals, an assignment of
any Intangible, including, without limitation, any License. Such trustee or
receiver shall have all rights and powers provided to it by law or by court
order or provided to the Secured Party under this Agreement.
(d) For the purpose of enabling the Secured Party to exercise rights
and remedies under this Section 6 at such time as the Secured Party shall be
lawfully entitled to exercise such rights and remedies, and for no other
purpose, the Debtor hereby grants to the Secured Party, to the extent assignable
without violation of any third party rights, an irrevocable, non-exclusive
license (exercisable without payment of royalty or other compensation) to use,
assign, license or sublicense any of the Intangibles, wherever the same may be
located, including in
- 14 -
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer programs used for the compilation
or printout thereof.
(e) In the event of any sale, assignment or other disposition of any
of the Trademarks, the goodwill of the Debtor's business connected with and
symbolized by such Trademarks subject to such disposition shall be included, and
the Debtor shall supply to the Secured Party or its designee, for inclusion in
such sale, assignment or other disposition, all Intangibles relating to such
Trademarks.
6.6 SALE OR DISPOSITION.
(a) The Secured Party may sell, lease, assign, transfer, convey or
otherwise dispose of any or all of the Collateral, as the Secured Party in its
discretion may determine, by public or private sale. Except for items of
Inventory or Equipment which are perishable or threaten to decline speedily in
value or are of a type customarily sold on a recognized market, the Secured
Party shall give the Debtor at least ten days prior written notice of the time
and place of any public sale thereof or of the time after which any private sale
or other intended disposition thereof is to be made. At any such sale, the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Secured Party may determine, and the price and other terms shall be such as the
Secured Party deems to be commercially reasonable. At any sale hereunder, to
the extent permitted by law, the Secured Party or any Bank may become the
purchaser. Any purchaser of any or all of the Collateral shall hold the same
free from any claim or right of whatsoever kind, including, without limitation,
any right or equity of redemption (statutory or otherwise), of the Debtor, any
such right or equity being hereby expressly waived.
(b) The Secured Party and the Banks shall incur no liability as a
result of the sale of the Collateral, or any part thereof, at any private sale
pursuant to this Section conducted in a commercially reasonable manner. The
Debtor hereby waives any claims against the Secured Party and the Banks arising
by reason of the fact that the price at which the Collateral may have been sold
at such a private sale was less than the price that might have been obtained at
a public sale or less than the aggregate amount of the Secured Obligations, even
if the Secured Party accepts the first offer received and does not offer the
Collateral to more than one offeree, PROVIDED that such private sale is
conducted in a commercially reasonable manner.
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6.7 PROCEEDS. All proceeds from the sale or other disposition of
Collateral by the Secured Party hereunder, all other moneys received by the
Secured Party pursuant to the terms of this Agreement (whether through the
exercise by the Secured Party of its right of collection of Accounts or
otherwise) and all balances from time to time remaining in the special account
required to be maintained by the Debtor under Section 6.4 shall be applied as
follows:
(a) First, to the payment of (i) all expenses incurred by the Secured
Party in connection with this Agreement or the exercise of any right or remedy
hereunder, or any sale or disposition, including, but not limited to, the
expenses of taking, advertising, processing, insuring, preparing and storing the
Collateral to be sold, all court costs and the Secured Party's legal fees in
connection therewith, and (ii) all advances made by the Secured Party hereunder
for the account of the Debtor;
(b) Next, to the payment of the unpaid principal amount due and owing
on any of the Secured Obligations in accordance with the terms thereof, together
with interest thereon to the date of payment; the remainder to be held as
security for the Debtor's payment of any Secured Obligations not then due and
owing, together with interest accrued and accruing thereon; and
(c) Finally, any surplus remaining to be paid over to the Debtor or as
a court of competent jurisdiction may direct.
With respect to any application pursuant to clause (b) above, such proceeds,
moneys or balances may be applied, at the sole discretion of the Secured Party
and to the extent of the amount thereof, to discharge in whole or in part the
most recently incurred and unpaid Secured Obligation, notwithstanding any
manifestation of an intent to the contrary expressed in writing or otherwise by
the Debtor at any time. Upon any sale of Collateral by the Secured Party
(whether pursuant to a power of sale granted by a statute or under a judicial
proceeding), the receipt of the Secured Party or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
so sold and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Secured Party or
such officer, or be answerable in any way for the misapplication thereof.
Notwithstanding the sale or other disposition of any Collateral
- 16 -
by the Secured Party hereunder, the Debtor shall remain liable for any
deficiency.
7. REMEDIES CUMULATIVE. All rights, remedies or powers conferred upon
the Secured Party herein or by law shall be cumulative and concurrent at the
option of the Secured Party, and the Secured Party may foreclose or exercise the
power of sale or any other remedy available to it successively upon, and during
the continuance of, any Event of Default or successive Events of Default. Upon
any such occasion, the Secured Party shall be authorized to sell, lease or
dispose of all or any such part of the Collateral as it shall elect and as
permitted by law. The remaining Collateral shall continue as security for any
other sums remaining due after such sale, lease or disposition or thereafter to
become due or payable on any of the Secured Obligations.
8. WAIVERS.
(a) No delay, omission or forbearance by the Secured Party in the
exercise of any right, power or remedy conferred upon it herein or by law or
equity, nor any continuance by the Secured Party of its performance shall be a
waiver or excuse of the event giving rise to the same. The single or partial
exercise of a right, power or remedy does not preclude its further exercise from
time to time and as often as may be deemed expedient by the Secured Party. No
waiver by the Secured Party of any Event of Default or of any right, power or
remedy hereunder shall operate as a waiver of any other Event of Default, right,
power or remedy on a future occasion.
(b) The Debtor hereby waives, releases and discharges, to the full
extent permitted by law, any right which it has or may have at law, in equity or
by statute, to require the Secured Party to pursue or otherwise avail itself of
any rights or remedies which it has or may have against any other Person with
respect to the payment of the Notes or performance of the terms, covenants and
conditions of the Loan Agreement and Collateral Documents or to pursue or
exhaust any of its rights or remedies with respect to any other security for the
satisfaction of the Secured Obligations or the performance of the terms,
covenants and conditions of the Loan Agreement. The Debtor hereby waives and
releases any right of marshalling of assets which it might otherwise have.
(c) No failure on the part of the Secured Party to exercise, and no
delay on its part in exercising, any right,
- 17 -
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or the further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive of any
other remedies at law or in equity. All rights of the Secured Party, the
security interests granted hereunder, and all obligations of the Debtor
hereunder, shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of the Loan Agreement,
the Notes, the other Collateral Documents, any other related instrument or any
other agreement or instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term in respect of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the Loan
Agreement, the Notes, the other Collateral Documents or any other related
instrument; or
(iii) any exchange or release of, or non-perfection of any Lien
or security on or in, any other collateral, or any release or amendment or
waiver of or consent to departure from any guarantee, for all or any of the
Secured Obligations.
9. DEBTOR LIABILITY AND INDEMNITIES. Anything herein to the contrary
notwithstanding, (a) the Debtor shall remain liable under all contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of the duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Secured Party or the
Banks of any of its or their rights hereunder shall not release the Debtor from
any of its duties or obligations under the contracts and agreements included in
the Collateral, and (c) neither the Secured Party nor any Bank shall have any
obligation or liability under the contracts and agreements included in the
Collateral or be obligated to perform any of the obligations or duties of the
Debtor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder. The Debtor hereby agrees to indemnify and hold
harmless the Secured Party and the Banks, and their respective directors,
officers, attorneys, agents and employees (all such indemnified persons,
including their heirs, successors, assigns and administrators, being referred to
as "Indemnified Persons"
- 18 -
for purposes of this Section 9), from and against any and all claims, demands,
losses, costs, expenses, judgments and liabilities (including liabilities for
penalties) of any nature whatsoever arising in connection with this Agreement or
the exercise or enforcement by the Secured Party or any other Indemnified Person
of any right, power or remedy hereunder, except for losses which are found in a
final non-appealable judgment by a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Indemnified
Person. In no event shall the Secured Party, any Bank or any director, officer,
attorney, agent or employee of the Secured Party or any Bank be liable to the
Debtor for any action, matter or thing in connection with this Agreement other
than gross negligence or willful misconduct and to account for moneys actually
received by the Secured Party in accordance with the terms hereof.
10. POSSESSION OF COLLATERAL. So long as no Event of Default hereunder
has occurred and is continuing, the Debtor may have and retain possession of the
Collateral and use it in any lawful manner not inconsistent with the Loan
Agreement, this Agreement, any Collateral Document or any policy of insurance
thereon, unless possession of such Collateral by the Secured Party is necessary
or appropriate to perfect the Secured Party's security interest therein.
11. TERMINATION OF SECURITY INTERESTS. This Agreement and the security
interests granted hereunder shall terminate when all amounts due and owing on
account of, and all obligations and liabilities of the Debtor in respect of, the
Secured Obligations shall have been fully, irrevocably and indefeasibly
performed, satisfied and paid in cash, but only if the Banks shall then have no
obligation or commitment to make further loans to the Debtor under the Loan
Agreement. Upon the termination of the Secured Party's security interest in any
Collateral, the Secured Party shall reassign and deliver to the Debtor, without
recourse or representation, against the Debtor's receipt and at the Debtor's
expense, such Collateral, all cash proceeds therefrom and all Related Documents
relating thereto then held by the Secured Party. Upon such termination, at the
request of the Debtor and at its expense, the Secured Party shall execute and
deliver to the Debtor termination statements with respect to financing
statements filed hereunder. Notwithstanding the foregoing, this Agreement shall
continue to be effective or be reinstated and relate back to such time as though
this Agreement had always been in effect, as the case may be, if at any time any
amount received by the Secured Party or any Bank in respect of the Secured
- 19 -
Obligations is rescinded or must otherwise be restored or returned by the
Secured Party or any Bank upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Debtor or upon the appointment of any
intervenor or conservator of, or trustee or similar official for, the Debtor or
any substantial part of its properties, or otherwise, all as though such
payments had not been made.
12. MISCELLANEOUS.
12.1 CERTAIN REGULATORY REQUIREMENTS.
(a) The Debtor shall take all action that the Secured Party may
reasonably request in the exercise of its rights and remedies hereunder, which
includes the right to require the Debtor after the occurrence and during the
continuance of an Event of Default to transfer or assign the FCC Licenses to any
party or parties. In furtherance of this right, the Debtor shall, upon the
occurrence and during the continuance of an Event of Default, (i) cooperate
fully with the Secured Party in obtaining all approvals and consents from the
FCC that the Secured Party may deem necessary or advisable to accomplish any
such transfer or assignment of the FCC Licenses and (ii) prepare, execute and
file with the FCC any application, request for consent, certificate or
instrument that the Secured Party may deem necessary or advisable to accomplish
any such transfer or assignment of the FCC Licenses. If the Debtor fails to
execute such applications, requests for consent, certificates or instruments,
the clerk of any court that has jurisdiction over this Agreement may execute and
file the same on behalf of the Debtor. To enforce the provisions of this
Section, the Secured Party is authorized to request the consent or approval of
the FCC to a voluntary or an involuntary transfer of control of the Debtor.
(b) Notwithstanding anything to the contrary contained in this
Agreement:
(i) the Secured Party shall not take any action hereunder that
would constitute or result in any transfer of control of the FCC Licenses or the
Debtor without obtaining all necessary FCC approvals. The Secured Party and the
Banks shall be entitled to rely on the advice of FCC counsel selected by the
Secured Party to determine whether FCC approval is required, and
- 20 -
(ii) the Secured Party shall not foreclose on, sell, transfer or
otherwise dispose of, or exercise any right to control the FCC Licenses as
provided herein or take any other action that would affect the operational,
voting, or other control of the Debtor, unless such action is taken in
accordance with the provisions of the Communications Act of 1934, as from time
to time amended, and the rules, regulations and policies of the FCC.
(c) The Debtor acknowledges that the approval of the FCC to the assignment
of the FCC Licenses or the transfer of control of the Debtor is integral to the
Secured Party's realization of the value of the Collateral, including the FCC
Licenses, that there is no adequate remedy at law for failure by the Debtor to
comply with the provisions of this Section and that such failure could not be
adequately compensated by damages. Therefor, the Debtor agrees that the
provisions of this Section may be specifically enforced.
12.2 MODIFICATION. Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the Debtor and the Secured Party. No waiver or any single
breach or default under this Agreement shall be deemed a waiver of any other
breach or default.
12.3 SUCCESSORS AND ASSIGNS. Subject to the limitations upon the sale,
lease, transfer or other disposition of the Collateral by the Debtor set forth
herein and in the Loan Agreement, all of the covenants, conditions and
agreements herein contained shall be binding upon the Debtor and its successors
and assigns; PROVIDED, HOWEVER, that the Debtor may not assign or transfer any
of its rights or obligations hereunder without the prior written consent of all
of the Banks and the Secured Party. This Agreement shall inure to the benefit
of the permitted successors and assigns of the Secured Party and the Banks, and,
in the event of any transfer or assignment of rights by the Secured party or the
Banks, the rights and privileges herein conferred upon the Secured Party or the
Banks shall automatically extend to and be vested in such permitted transferee
or assignee, all subject to the terms and conditions hereof.
12.4 GOVERNING LAW. THIS AGREEMENT AND THE DUTIES, RIGHTS, POWERS AND
REMEDIES OF THE PARTIES, HERETO SHALL BE CONSTRUED IN ACCORDANCE WITH, AND
GOVERNED BY THE LAWS OF THE STATE OF OHIO WITHOUT REGARD TO THE CONFLICTS OF LAW
PROVISIONS
- 21 -
THEREOF, EXCEPT TO THE EXTENT THAT THE LOCAL LAW OF ANY JURISDICTION WHERE ANY
COLLATERAL IS LOCATED GOVERNS THE GRANT, PERFECTION OR ENFORCEMENT OF THE
SECURITY INTERESTS AND LIENS GRANTED PURSUANT TO THIS AGREEMENT. THE PROVISIONS
OF THIS SECTION HAVE BEEN FULLY DISCUSSED BY THE SECURED PARTY ON BEHALF OF THE
BANKS AND THE DEBTOR AND SHALL BE SUBJECT TO NO EXCEPTIONS. THE DEBTOR HAS MADE
THIS CHOICE OF GOVERNING LAW KNOWLINGLY AND WILLINGLY AND AFTER CONSULTING WITH
ITS COUNSEL. NEITHER THE SECURED PARTY NOR THE DEBSTOR HAS AGREED WITH OR
REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY
ENFORCED IN ALL INSTANCES.
12.5 ENFORCEMENT. THE DEBTOR (A) HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE STATE COURTS OF THE STATE OF OHIO AND TO THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO, FOR THE
PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE AGENT OR THE BANKS OR
THEIR SUCCESSORS OR ASSIGNS AND (B) HEREBY WAIVES, AND AGREES NOT TO ASSERT, BY
WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF
THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR IMMUNE FROM ATTACHMENT OR
EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT
FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER OR THAT THIS
AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT,
AND (C) HEREBY WAIVES AND AGREES NOT TO SEEK ANY REVIEW BY ANY COURT OF ANY
OTHER JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF THE
JUDGMENT OF ANY SUCH OHIO STATE OR FEDERAL COURT. THE DEBTOR HEREBY CONSENTS TO
SERVICE OF PROCESS BY REGISTERED MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE
GIVEN. THE DEBTOR AGREES THAT ITS SUBMISSION TO JURISDICTION AND ITS CONSENT TO
SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF THE AGENT AND THE
BANKS. FINAL JUDGMENT AGAINST THE DEBTOR IN ANY SUCH ACTION, SUIT OR PROCEEDING
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT, ACTION OR PROCEEDING ON THE
JUDGMENT, OR IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF SUCH
OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE AGENT OR THE BANKS MAY AT THEIR
OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS, AGAINST THE DEBTOR
OR ANY OF ITS ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OR OF
ANY COUNTRY OR PLACE WHERE THE DEBTOR, OR SUCH ASSETS, MAY BE FOUND.
12.6 JURY TRIAL WAIVER. THE DEBTOR AND THE SECURED PARTY, EACH WAIVE
IRREVOCABLY, TO THE EXTENT PERMITTED BY LAW, ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR
OTHERWISE, BETWEEN THE SECURED PARTY
- 22 -
OR ANY BANK AND THE DEBTOR ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
AGREEMENT OR THE NOTES OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT
LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THE DEBTOR AND THE SECURED PARTY ACKNOWLEDGE
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND
THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
THE DEBTOR AND THE SECURED PARTY FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (UNLESS EXPRESSLY MODIFIED IN WRITING BY ALL PARIES
HERETO), AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.
12.7 NOTICES. All notices, demands and requests required or permitted to
be given under the provisions of this Agreement shall be in writing and shall be
deemed to have been duly delivered and received if given in accordance with the
provisions of the Loan Agreement.
12.8 SEPARABILITY. If any one or more of the provisions contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of all remaining provisions shall not in
any way be affected or impaired. 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 or affecting the validity or
enforceability of such provision in any other jurisdiction.
12.9 AGENT. The parties hereby acknowledge and reaffirm that the Secured
Party has been designated to act as agent for the Banks. All rights and
remedies of the Secured Party hereunder may be exercised by the Secured Party on
behalf of, and as agent for, the Banks. The Banks may, pursuant to the terms of
the Loan Agreement, appoint a successor agent, who shall, upon appointment,
- 23 -
succeed to all the rights and obligations of the Secured Party hereunder. The
Debtor acknowledges that the rights of the Secured Party hereunder are for the
benefit of each Bank, and that, upon the termination of the appointment of an
agent under the Loan Agreement and the failure of the Banks to appoint a
successor agent thereunder, the rights of the Secured Party under the covenants,
conditions and agreements hereof shall inure to the benefit of the Banks. At
any time or times, in order to comply with any legal requirement in any
jurisdiction, the Secured Party may in good faith appoint one or more other
Persons, either to act as co-agent or co-agents, jointly with the Secured Party,
or to act as separate agent or agents on behalf of the Secured Party and the
holders of the Secured Obligations, with such power and authority as may be
necessary for the effectual operation of the provisions hereof and may be
specified in the instrument of appointment (which may, in the discretion of the
Secured Party, include provisions for the protection of such co-agent or
separate agent similar to the provisions herein).
12.10 SECTION HEADINGS. The section headings contained herein are for
reference purposes only and shall not in any way affect the meaning and
interpretation of this Agreement.
12.11 PRONOUNS. Any pronoun used herein shall be construed in the person,
number and gender which is appropriate in the context.
12.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
- 24 -
IN WITNESS WHEREOF, the undersigned have executed this Borrower Security
Agreement on the day and year first above written.
SECURED PARTY:
KEYBANK NATIONAL ASSOCIATION,
as Agent
By: /s/ Jason R. Weaver
________________________________
Name : Jason R. Weaver
Title: Assistant Vice President
DEBTOR:
GRAY COMMUNICATIONS SYSTEMS, INC.
By: /s/ Robert A. Beizer
________________________________
Name : Robert A. Beizer
___________________________
Title: Vice President/Secretary
___________________________
- 25 -
SCHEDULE A
LIST OF REGISTERED COPYRIGHTS, PATENTS AND TRADEMARKS
None
SCHEDULE B
LIST OF JURISDICTIONS IN WHICH ANY COLLATERAL IS LOCATED
None