SUBSIDIARY GUARANTY
THIS SUBSIDIARY GUARANTY is made and entered into as of September 30, 1996,
by the entities listed on the signature pages hereof (collectively, the
"Guarantors" and individually, a "Guarantor"), in favor of KEYBANK NATIONAL
ASSOCIATION, as agent for the Banks (as that term is defined in the Loan
Agreement described below) (in such capacity, the "Agent").
RECITALS
A. Gray Communications Systems, Inc., a Georgia corporation (the
"Borrower"), owns, directly or indirectly, all of the issued and outstanding
shares of the capital stock of each of the Guarantors. The Borrower, the Agent,
NationsBank, N.A. (South), as Co-Agent, and the 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 loan to the Borrower 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 ascribed to such terms in the Loan Agreement.
B. A portion of the proceeds of the Loans will be used to repay certain
existing Indebtedness of the Borrower which has been guaranteed by the
Guarantors. In addition, a portion of the proceeds of the Loans may be provided
to the Guarantors for the acquisition of assets, for capital expenditures and
for working capital purposes.
C. It is a condition precedent to the extensions of credit to the
Borrower under the Loan Agreement that the Guarantors, among other things, shall
have executed and delivered this Guaranty.
D. The Borrower and the Guarantors share an identity of interests as
members of a consolidated group of companies engaged in substantially similar
businesses. The Borrower provides certain centralized financial, accounting and
management services to the Guarantors, and the making of the Loans will
facilitate the expansion and enhance the overall financial strength and
stability of the Borrower's corporate group, including the
Guarantors. Accordingly, the Guarantors will derive substantial benefits as a
result of the extensions of credit to the Borrower under the Loan Agreement,
which benefits are hereby acknowledged by the Guarantors, and the Guarantors,
therefore, desire to enter into this Guaranty in order to satisfy the condition
precedent described in the preceding paragraph.
AGREEMENTS
In consideration of the foregoing Recitals, and of the Loans made or to be
made by the Banks to the Borrower under the Loan Agreement, which will be of
material economic benefit to the Guarantors, the Guarantors agree as follows in
favor of the Agent for the benefit of the Banks:
1. GUARANTY OF PAYMENT. The Guarantors, jointly and severally,
hereby absolutely, unconditionally and irrevocably guarantee as primary
obligors, and not merely as sureties, the prompt performance and payment in full
when due, whether at stated maturity, by acceleration or otherwise (including,
without limitation, obligations that would become due but for the operation of
the automatic stay under Section 362(a) of Title 11 of the United States Code,
and including interest, fees and other charges whether or not a claim is allowed
for such obligations in any such bankruptcy proceeding), of (i) all
indebtedness, Obligations and liabilities of the Borrower arising at any time,
now or in the future, pursuant to the Loan Agreement, the Notes or any
Collateral Document, including, without limitation, the Borrower's obligations
under any outstanding Letters of Credit; (ii) all indebtedness, Obligations and
liabilities of the Borrower arising at any time, now or in the future, pursuant
to any agreement with any Bank or an Affiliate of any Bank with respect to
interest rate swap agreements or other agreements regarding Rate Hedging
Obligations; (iii) all reasonable costs and expenses incurred by the Agent or
any Bank, 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 Agent or the Banks, or in the enforcement of the
obligations of the Guarantors, hereunder and under any other Collateral Document
to which any Guarantor is a party; and (iv) any renewals, continuations or
extensions of any of the foregoing (all of which are referred to herein as the
"Guaranteed Obligations").
2. FRAUDULENT TRANSFER LAWS. Anything contained in this Guaranty to
the contrary notwithstanding, the obligations of each Guarantor hereunder shall
be limited to a maximum aggregate amount equal to the largest amount that would
not render its
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obligations hereunder subject to avoidance as a fraudulent transfer or
conveyance under Section 548 of Title 11 of the United States Code or any
applicable provisions of comparable state law (collectively, the "Fraudulent
Transfer Laws"), in each case after giving effect to all other liabilities of
such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor in respect of intercompany indebtedness to the Borrower or other
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder)
and after giving effect as assets to the value (as determined under the
applicable provisions of the Fraudulent Transfer Laws) of any rights to
subrogation or contribution of such Guarantor pursuant to applicable law, this
Guaranty or any other agreement providing for an equitable allocation among such
Guarantor and other Affiliates of the Borrower of obligations arising under
guaranties by such parties. This Section 2 shall be construed with the goal of
maximizing the amount payable by each Guarantor hereunder without rendering it
insolvent, leaving it with an unreasonably small amount of capital with which to
conduct its business or leaving it unable to pay its debts as they mature, and
in determining the solvency or net worth of a Guarantor, its right of
contribution from the other Guarantors shall be taken into account to the
fullest extent permitted by law.
3. CONTRIBUTION.
(a) The Guarantors desire to allocate among themselves in a fair
and equitable manner their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made by a Guarantor
under this Guaranty (a "Funding Guarantor") that exceeds its Fair Share (as
defined below), that Funding Guarantor shall be entitled to a contribution from
each of the other Guarantors in the amount of such other Guarantor's Fair Share
Shortfall (as defined below), with the result that all such contributions will
cause each Guarantor's Aggregate Payments (as defined below) to equal its Fair
Share. The amounts payable as contributions hereunder shall be determined as of
the date on which the related payment or distribution is made by the applicable
Funding Guarantor. The allocation among Guarantors of their obligations as set
forth in this Section 3 shall not be construed in any way to limit the liability
of any Guarantor hereunder. Any right of contribution which a Guarantor may
have against any other Guarantor of the Guaranteed Obligations as a result of a
payment pursuant to this Section 3 shall only be exercisable at such time and
shall be subordinated as set forth in Section 13.
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(b) "FAIR SHARE" means, with respect to a Guarantor as of any
date of determination, an amount equal to (i) the ratio of (x) the Adjusted
Maximum Amount (as defined below) with respect to such Guarantor to (y) the
aggregate of the Adjusted Maximum Amounts with respect to all Guarantors,
multiplied by (ii) the aggregate amount paid or distributed on or before such
date by all Funding Guarantors under this Guaranty in respect of the Guaranteed
Obligations.
(c) "FAIR SHARE SHORTFALL" means, with respect to a Guarantor as
of any date of determination, the excess, if any, of the Fair Share of such
Guarantor over the Aggregate Payments of such Guarantor.
(d) "ADJUSTED MAXIMUM AMOUNT" means, with respect to a
Guarantor, the maximum aggregate amount of the obligations of such Guarantor
under this Guaranty, determined in accordance with Section 2.
(e) "AGGREGATE PAYMENTS" means, with respect to a Guarantor as
of any date of determination, the aggregate amount of all payments and
distributions made on or before such date by such Guarantor in respect of this
Guaranty (including, without limitation, in respect of this Section 3).
4. EXTENSION OR RENEWAL OF GUARANTEED OBLIGATIONS; WAIVER. Each
Guarantor agrees that the Guaranteed Obligations may be extended or renewed, in
whole or in part, without notice or further assent from it, that such Guarantor
will remain bound upon this Guaranty notwithstanding any extension, renewal or
other alteration of any Guaranteed Obligation and the guaranty herein made shall
apply to the Guaranteed Obligations as so amended, renewed or altered. Each
Guarantor waives diligence, presentment, demand of payment, filing of claims
with a court in the event of insolvency or bankruptcy of the Borrower, any right
to require a proceeding first against the Borrower, protest, notice and all
demands whatsoever and covenants that its guaranty of the Borrower's Obligations
under this Guaranty will not be discharged except by complete performance by the
Borrower or another Guarantor of such Obligations.
5. NATURE OF GUARANTY: CONTINUING, ABSOLUTE AND UNCONDITIONAL.
(a) This Guaranty is and is intended to be a continuing guaranty
of payment when due of the Guaranteed Obligations, and not of collection, and is
independent of and in
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addition to any other guaranty, indorsement, collateral or other agreement held
by the Banks or by the Agent, for the benefit of the Banks, therefor or with
respect thereto, whether or not furnished by any Guarantor. Each Guarantor
waives any right to require that any resort be had by the Agent or the Banks to
any other Guarantor or to any of the security held for payment of any of the
Guaranteed Obligations or to any balance of any deposit account or credit on the
books of the Agent or any Bank in favor of the Borrower or any other Person.
Upon the occurrence and during the continuance of any Event of Default, the
Agent or the Banks may, at their sole election, proceed directly and at once,
without notice, against any one or more of the Guarantors to collect and recover
the full amount or any portion of the Guaranteed Obligations, without first
proceeding against the Borrower, any other Guarantor or any other Person, or
against any security or collateral for the Guaranteed Obligations. All
Guaranteed Obligations shall be conclusively presumed to have been created in
reliance hereon.
(b) This Guaranty shall not be changed or affected by any
representation, oral agreement, act or thing whatsoever, except as herein
provided. This Guaranty is intended by the Guarantors to be the final, complete
and exclusive expression of the agreement among the Guarantors and the Agent,
for the benefit of the Banks, with respect to the subject matter hereof.
(c) The obligations of the Guarantors under this Guaranty are
absolute and unconditional and shall not be impaired or discharged by:
(i) the failure of the Agent or the Banks to assert any
claim or demand or to enforce any right or remedy against the Borrower, any
other guarantor or any other party to a Collateral Document under the provisions
of the Loan Agreement, the Notes, any Collateral Document or any other agreement
or otherwise;
(ii) any extension, renewal or other alteration of any
provision of the Loan Agreement, the Notes, any Collateral Document or any other
agreement or otherwise;
(iii) any rescission, waiver, amendment or modification of
any of the terms or provisions of the Loan Agreement, the Notes, any Collateral
Document or any other agreement or otherwise;
(iv) the failure of the Agent or the Banks to assert any
claim or demand or to exercise or enforce any right or
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remedy under the Loan Agreement, any Collateral Document or any other agreement
or otherwise, or against any other guarantor of, or any other party which has
provided security for, any of the Guaranteed Obligations;
(v) the sale, exchange, release, surrender, realization of
or upon or the failure to perfect with respect to or otherwise deal with in any
manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Guaranteed Obligations;
(vi) the settlement or compromise of any of the Guaranteed
Obligations, any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or hereof, or any
subordination of the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the Borrower
other than the Agent, the Banks and the Guarantors;
(vii) application of any sums by whomsoever paid or
howsoever realized to any liability or liabilities of the Borrower to the Agent
or the Banks regardless of what liability or liabilities of the Borrower remain
unpaid;
(viii) the act or failure to act in any manner referred to
in this Guaranty which may deprive any Guarantor of its right to subrogation or
contribution against the Borrower or any other guarantor to recover any payments
made pursuant to this Guaranty; or
(ix) or any other act or agreement or thing or omission or
delay to do any other act or thing that may or might in any manner or to any
extent vary the risk of any Guarantor or that would otherwise operate as a
discharge of a guarantor as a matter of law or equity.
(d) Each Guarantor's obligation hereunder is to pay the
Guaranteed Obligations in full when due according to the Loan Agreement to the
extent provided herein, and such obligation shall not be affected by any stay or
extension of time for payment by the Borrower resulting from any proceeding
under Title 11 of the United States Code, as now constituted or hereafter
amended or replaced, or any similar federal or state law.
6. NO DISCHARGE OR DIMINISHMENT OF GUARANTY. The obligations of the
Guarantors under this Guaranty shall not be subject to any reduction,
limitation, impairment or termination for any reason (other than if the
Guaranteed Obligations have
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been indefeasibly paid in full, all commitments under the Loan Agreement have
terminated and no Letters of Credit remain outstanding), including, without
limitation, any claim of waiver, release, surrender, alteration or compromise of
any of the Guaranteed Obligations, and shall not be subject to any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of any of the Guaranteed Obligations
or any discharge of the Borrower from any of the Guaranteed Obligations in a
bankruptcy or similar proceeding or otherwise.
7. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby
represents, warrants and agrees as follows:
(a) Such Guarantor (i) is a duly organized and validly existing
corporation, in good standing under the laws of its state of incorporation, (ii)
has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and (iii) is duly qualified as a
foreign corporation and in good standing in each jurisdiction where the
ownership, leasing or operation of property or the conduct of its business
requires such qualification, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.
(b) Such Guarantor has the corporate power and authority to
execute, deliver and perform the terms and provisions of this Guaranty, the
Subsidiary Security Agreement, the Subsidiary Pledge Agreement, the Mortgages
and the other Collateral Documents to which it is a party (collectively, the
"Subsidiary Agreements") and has taken all necessary action to authorize the
execution, delivery and performance by it of this Guaranty and the Subsidiary
Agreements. Such Guarantor has duly executed and delivered this Guaranty and
the Subsidiary Agreements, and this Guaranty and the Subsidiary Agreements
constitute its legal, valid and binding obligations enforceable in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors' rights generally and by general
principles of equity.
(c) Neither the execution, delivery or performance by such
Guarantor of this Guaranty and the Subsidiary Agreements, nor compliance by it
with the terms and provisions hereof and thereof, (i) will contravene any
provision of any law, statute, rule or regulation or any order, writ, injunction
or decree of any court or governmental instrumentality, (ii) will conflict or
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be inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien or
encumbrance upon any of the property or assets of such Guarantor pursuant to the
terms of any indenture, mortgage, deed of trust, loan agreement or any other
agreement, contract or instrument to which such Guarantor is a party or by which
it or any of its property or assets is bound or to which it may be subject or
(iii) will violate any provision of the organizational documents of such
Guarantor.
(d) 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, performance, legality, validity, binding effect or enforceability of
this Guaranty and the Subsidiary Agreements by or against such Guarantor.
(e) Except as set forth in EXHIBIT F to the Loan Agreement,
there are no actions, suits or proceedings pending or, to the best knowledge of
such Guarantor, threatened against or affecting such Guarantor. No judgment or
order for the payment of money has been entered against such Guarantor which
remains outstanding and unpaid.
(f) There have been no changes in the business, properties,
operations or condition, financial or otherwise, or prospects of such Guarantor
since December 31, 1995, which could reasonably be expected to have a Material
Adverse Effect.
(g) Such Guarantor has received, or has the right hereunder to
receive (including rights to contribution and subrogation), consideration which
is the reasonably equivalent value of the obligations and liabilities that such
Guarantor has incurred to the Agent and the Banks. Such Guarantor is not
insolvent as defined in Section 101 of Title 11 of the United States Code or any
applicable state insolvency statute, nor, after giving effect to the
consummation of the transactions contemplated herein, will such Guarantor be
rendered insolvent by the execution and delivery of this Guaranty or any other
Collateral Document to which it is a party. Such Guarantor is neither engaged
nor 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 Agent and the Banks incurred hereunder. Such
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Guarantor does not intend to, nor does it believe that it will, incur debts
beyond its ability to pay them as they mature.
(h) The representations and warranties contained in the Loan
Agreement as they pertain to such Guarantor are true and correct in all material
respects.
8. COVENANTS.
(a) Except as permitted in the Loan Agreement, each Guarantor
will at all times preserve and keep in full force and effect its existence as a
corporation, organized in its state of incorporation, and shall at all times
preserve and keep in full force and effect all rights and franchises material to
its business.
(b) Each Guarantor shall comply in all material respects with
all applicable material laws, rules, regulations and orders, such compliance to
include, without limitation, paying when due all material taxes, assessments and
governmental charges imposed upon it or upon any of its properties or assets or
in respect of any of its franchises, businesses, income or property before any
penalty or interest accrues thereon unless such taxes, assessments or
governmental charges are being diligently contested by such Guarantor in good
faith.
(c) Each Guarantor shall keep and maintain books, records and
accounts with respect to its operations sufficient to enable it to prepare its
financial statements in accordance with GAAP and shall permit the Agent and the
Banks and their respective officers, employees and authorized agents to examine,
copy and make excerpts from such books and records and to inspect the properties
of such Guarantor both real and personal at any reasonable time.
(d) No Guarantor shall, directly or indirectly, incur, create,
assume, guaranty or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except pursuant hereto or as expressly
permitted in the Loan Agreement.
(e) Each Guarantor shall comply with all of the covenants,
agreements, terms and conditions set forth in the Loan Agreement and the other
Collateral Documents to the extent applicable to it.
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9. SECURITY. To secure timely payment of the Guaranteed Obligations
and performance in full of the obligations related thereto, each Guarantor is
concurrently herewith entering into (i) a Subsidiary Security Agreement pursuant
to which such Guarantor is granting to the Agent, for the benefit of the Banks,
a first priority (subject only to Permitted Liens) perfected security interest
in substantially all of such Guarantor's personal property, (ii) if applicable,
Mortgages pursuant to which such Guarantor is granting to the Agent, for the
benefit of the Banks, a first priority (subject only to Permitted Liens)
perfected lien in certain of such Guarantor's real property, and (iii) if
applicable, a Subsidiary Pledge Agreement pursuant to which such Guarantor is
granting to the Agent, for the benefit of the Banks, a first priority perfected
security interest in the stock and securities owned by such Guarantor in any
Subsidiary of such Guarantor.
10. INFORMATION. Each Guarantor assumes all responsibility for being
and keeping itself informed of the financial condition and assets of the
Borrower and its Subsidiaries and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Obligations and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder, and
agrees that the Agent and the Banks shall not have any duty to advise such
Guarantor of information known to any of them regarding such circumstances or
risks.
11. REINSTATEMENT. Each Guarantor agrees that this Guaranty shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment, or any part thereof, of principal of, interest on or any other
amount with respect to the Guaranteed Obligations is rescinded or must otherwise
be restored by the Agent or any Bank upon the bankruptcy, insolvency or
reorganization of the Borrower, any Guarantor or any other Person.
12. USE OF PROCEEDS. Each Guarantor further agrees, in furtherance
of the foregoing and not in limitation of any other right that the Agent and the
Banks may have at law or in equity against any Guarantor by virtue hereof, upon
the failure of the Borrower to pay any of the Guaranteed Obligations when and as
the same shall become due, whether at stated maturity, by acceleration or
otherwise (including, without limitation, amounts that would have become due but
for the operation of the automatic stay under Section 362(a) of Title 11 of the
United States Code), the Guarantors shall jointly and severally forthwith pay,
or cause to be paid, in cash, to the Agent for the benefit of the Banks, an
amount equal to the sum of the unpaid principal amount
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of such Guaranteed Obligations then due as aforesaid, accrued and unpaid
interest on such Guaranteed Obligations (including, without limitation,
interest, fees and other charges that, but for the filing of a petition in
bankruptcy with respect to the Borrower, would have accrued on such Guaranteed
Obligations, whether or not a claim is allowed against the Borrower for such
interest, fees or other charges in any such bankruptcy proceeding) and all other
Guaranteed Obligations then owed to the Agent or the Banks as aforesaid. All
such payments shall be applied promptly, from time to time, by the Agent:
FIRST, to the payment of the costs and expenses of any collection or other
realization under this Guaranty, and all expenses, liabilities and advances made
or incurred by the Agent or any Bank in connection therewith;
SECOND, after payment in full of the amounts specified in the preceding
subparagraph, to the payment in full of all other Guaranteed Obligations; and
THIRD, after payment in full of all Guaranteed Obligations, to the
Guarantors, or their respective successors or assigns, or to whomsoever may be
lawfully entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such payments.
13. SUBROGATION AND SUBORDINATION. Until the indefeasible payment in
full of the Guaranteed Obligations, the termination of the Commitments under the
Loan Agreement and the cancellation of all outstanding Letters of Credit, each
Guarantor hereby waives any claim, right or remedy, direct or indirect, that
such Guarantor now has or may hereafter have against the Borrower or its assets
in connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise, including,
without limitation (a) any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against the
Borrower, (b) any right to enforce, or to participate in, any claim, right or
remedy that the Agent or the Banks now have or may hereafter have against the
Borrower or any other guarantor, and (c) any benefit of, and any right to
participate in, any collateral or security now or hereafter held by the Agent or
the Banks. In addition, until the Guaranteed Obligations shall have been
indefeasibly paid in full, the Commitments shall have terminated and all
outstanding Letters of Credit shall have been cancelled, each Guarantor shall
withhold exercise of any right of contribution that such
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Guarantor may have against any other guarantor of the Guaranteed Obligations
under Section 3 hereof or at law or in equity or otherwise. Each Guarantor
further agrees that, to the extent the waiver of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein is found by
a court of competent jurisdiction to be void or voidable for any reason, such
rights of subrogation, reimbursement or indemnification that such Guarantor may
have against the Borrower or against any collateral or security, and any rights
of contribution that such Guarantor may have against any such other guarantor,
shall be junior and subordinate to any rights that the Agent and the Banks may
have against the Borrower, to all right, title and interest the Agent or the
Banks may have in any such collateral or security, and to any right the Agent or
the Banks may have against such other guarantor. The Agent or the Banks may
use, sell or dispose of any items of collateral or security as they see fit
without regard to any subrogation rights arising out of this Guaranty that any
Guarantor may have and, upon any such disposition or sale, any rights of
subrogation that any Guarantor may have shall, with respect to the collateral
disposed of, terminate. If any amount shall be paid to any Guarantor on account
of subrogation rights at any time when all Guaranteed Obligations shall not have
been paid in full in cash or the Commitments under the Loan Agreement shall not
have been terminated, or any Letters of Credit shall remain outstanding, such
amount shall be held in trust for the Agent, on behalf of the Banks, and shall
forthwith be paid over to the Agent, for the benefit of the Banks, to be
credited and applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Agreement, the Notes or any
applicable Collateral Document.
14. DELAYS; OMISSIONS. No delay or omission by the Agent or the
Banks in the exercise of any right under this Guaranty shall impair any such
right, nor shall it be construed to be a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
of any other right.
15. MODIFICATION. Any term of this Guaranty may be amended and the
observance of any term of this Guaranty may be waived (either generally or in a
particular instance and either retroactively or prospectively) only with the
written consent of the affected Guarantor and the Agent. No waiver of any
single breach or default under this Guaranty shall be deemed a waiver of any
other breach or default.
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16. SUCCESSORS AND ASSIGNS. This Guaranty is a continuing guaranty
and shall be binding upon the Guarantors and their respective successors and
assigns; PROVIDED, HOWEVER, that no Guarantor may assign or transfer any of its
rights or obligations hereunder without the prior written consent of all the
Banks and the Agent. This Guaranty shall inure to the benefit of the permitted
successors and assigns of the Agent and the Banks, and, in the event of any
transfer or assignment of rights by the Agent or any Bank, the rights and
privileges herein conferred upon the transferring Agent or Bank shall
automatically extend to and be vested in such permitted transferee or assignee,
all subject to the terms and conditions hereof.
17. RIGHT OF SET OFF. Upon the occurrence and during the continuance
of any Event of Default, each Bank is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Bank to or for
the credit or the account of any Guarantor against any and all of the
obligations of such Guarantor now or hereafter existing hereunder, irrespective
of whether or not such Bank shall have made any demand hereunder and although
such obligations may be unmatured. Such Bank agrees promptly to notify such
Guarantor after any such set-off and application made by such Bank; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Banks under this Section are in
addition to other rights and remedies (including without limitation, other
rights of set-off) which the Banks may have. Each Guarantor agrees, to the
fullest extent it may effectively do so under applicable law, that any holder of
a participation in the Notes may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of such Guarantor in the amount of such
participation.
18. GOVERNING LAW. THIS GUARANTY, INCLUDING THE VALIDITY THEREOF, AND
THE DUTIES, RIGHTS, POWERS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF OHIO
WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
19. ENFORCEMENT. EACH GUARANTOR (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 GUARANTY OR THE SUBJECT MATTER HEREOF BROUGHT BY THE AGENT OR THE BANKS OR
THEIR SUCCESSORS OR ASSIGNS AND (B) HEREBY WAIVES, AND
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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 GUARANTY 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. EACH
GUARANTOR HEREBY CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL AT THE
ADDRESS TO WHICH NOTICES ARE TO BE GIVEN. EACH GUARANTOR 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 EACH
GUARANTOR 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 EACH GUARANTOR OR ANY OF ITS
ASSETS IN ANY STATE OR FEDERAL COURT OF THE UNITED STATES OR OF ANY COUNTRY OR
PLACE WHERE SUCH GUARANTOR, OR SUCH ASSETS, MAY BE FOUND.
20. JURY TRIAL WAIVER. EACH GUARANTOR WAIVES IRREVOCABLY, TO THE
EXTENT PERMITTED BY LAW, ALL RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN THE AGENT OR
ANY BANK AND SUCH GUARANTOR ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS
GUARANTY 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 GUARANTY
AND THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. EACH GUARANTOR ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO THE BANKS TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH BANK HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THE LOAN AGREEMENT
AND THAT EACH BANK WILL CONTINUE TO RELY ON THE WAIVER IN ITS RELATED FUTURE
DEALINGS WITH THE BORROWER AND THE GUARANTORS. EACH GUARANTOR FURTHER WARRANTS
AND REPRESENTS THAT IT 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
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WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING (UNLESS EXPRESSLY MODIFIED IN WRITING BY ALL PARTIES HERETO AND THE
AGENT AND EACH BANK), AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS
AND TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING HERETO. IN THE EVENT OF
LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
21. NOTICES. All notices, demands and requests required or permitted
to be given under the provisions of this Guaranty 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 with the address of the Guarantors being
the address of the Borrower in the Loan Agreement.
22. SEPARABILITY. If any one or more of the provisions contained in
this Guaranty 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 Guaranty 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.
23. AGENT. The parties hereby acknowledge and reaffirm that the
Agent has been designated to act as agent for the Banks. All rights and
remedies of the Banks hereunder may be exercised by the Agent 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, succeed to
all the rights and obligations of the Agent hereunder. Each Guarantor
acknowledges that the rights of the Agent 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 Agent 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
Agent may in good faith appoint one or more other Persons, either to act as
co-agent or co-agents, jointly with the Agent, or to act as separate agent or
agents on behalf of the Agent and the holders of the Guaranteed 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
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discretion of the Agent, include provisions for the protections of such co-agent
or separate agent similar to the provisions herein).
24. 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 Guaranty.
25. PRONOUNS. Any pronoun used herein shall be construed in the
person, number and gender which is appropriate in the context.
26. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts or duplicate originals, each of which shall be deemed to be an
original, but all of which together shall constitute one and the same
instrument.
27. JOINDER. Upon the execution and delivery after the date hereof
by any new or additional Subsidiary of an instrument in the form of ANNEX 1
attached hereto, such Subsidiary shall become a Guarantor hereunder with the
same force and effect as if originally named as a Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain in full force
and effect, notwithstanding the addition of any such new or additional
Subsidiary as a party to this Guaranty.
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IN WITNESS WHEREOF, the Guarantors have caused this Subsidiary Guaranty to
be duly executed as of the day and year first written above.
GUARANTORS:
THE ALBANY HERALD PUBLISHING COMPANY, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
GRAY KENTUCKY TELEVISION, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
GRAY REAL ESTATE & DEVELOPMENT COMPANY
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
GRAY TELEVISION MANAGEMENT, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
GRAY TRANSPORTATION COMPANY, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
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KTVE-TV, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
PORTA-PHONE PAGING, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
PORTA-PHONE PAGING LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
THE ROCKDALE CITIZEN PUBLISHING COMPANY
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
THE SOUTHWEST GEORGIA SHOPPER, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WALB LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
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WALB-TV, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WCTV LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WCTV OPERATING CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WJHG LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WJHG-TV, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WKYT LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
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WRDW LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WRDW-TV, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WKXT LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WKXT-TV, INC.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
WYMT LICENSEE CORP.
By: /s/ Robert A. Beizer
___________________________
Name: Robert A. Beizer
Its : Secretary
- 20 -
ANNEX 1
SUPPLEMENT NO. ___, dated as of ________________, to the Subsidiary
Guaranty, dated as of September __, 1996 (the "GUARANTY"), by and among the
Subsidiaries of Gray Communications Systems, Inc. in favor of KeyBank, National
Association, as agent(all capitalized terms used herein but not otherwise
defined herein shall have the meaning assigned to such terms in the Guaranty as
the same may be hereafter amended or supplemented from time to time).
The undersigned (the "NEW GUARANTOR") is a Subsidiary of the Borrower and
is executing this Supplement in accordance with the requirements of the Loan
Agreement and of the Guaranty to become a Guarantor under the Guaranty as
additional consideration for any Loans previously made.
Accordingly, the New Guarantor agrees as follows:
1. In accordance with Section 27 of the Guaranty, the New Guarantor
by signing below hereby agrees to become a Guarantor under the Guaranty with the
same force and effect as if originally named therein as a Guarantor, and the New
Guarantor hereby agrees to all of the terms and conditions of the Guaranty
applicable to it as a Guarantor thereunder. Each reference to a "GUARANTOR" or
the "GUARANTORS" in the Guaranty shall be deemed to include the New Guarantor,
and the Guaranty is hereby incorporated by this reference.
2. This Supplement shall become effective upon the execution hereof
by the New Guarantor and the delivery of this Supplement to the Agent.
3. Except as expressly supplemented hereby, the Guaranty shall
remain in full force and effect.
4. This Supplement shall be governed by, and shall be construed and
enforced in accordance with, the laws of the State of Ohio without regard to the
conflicts of law principles thereof.
IN WITNESS WHEREOF, the New Guarantor has signed and delivered this
Supplement to the Guaranty as of the day and year first above written.
______________________________
By:________________________________
Name :_____________________________
Title:_____________________________