SIGNET BANK
COMMERCIAL SECURITY AGREEMENT
Principal Loan Date Maturity Loan No. Call
$3,500,000.00 09-13-1996 09-30-2001
Collateral Account Officer Initials
anerican
References in the shaded area are for Lender's use only and
do not limit the applicability of this document to any
particular loan or item.
Borrower: American Passage Media, Inc. Lender: SIGNET BANK
149 Fifth Avenue Suite 500
New York, N.Y. 10010 7799 Leesburg Pike
Falls Church, VA
22043
THIS COMMERCIAL SECURITY AGREEMENT is entered into between
American Passage Media, Inc. (referred to below as "Grantor");
and SIGNET BANK (referred to below as "Lender"). For valuable
consideration, Grantor grants to Lender a security interest in
the Collateral to secure the Indebtedness and agrees that Lender
shall have the rights stated in this Agreement with respect to
the Collateral, in addition to all other rights which Lender may
have by law.
DEFINITIONS. The following words shall have the following
meanings when used in this Agreement. Terms not otherwise
defined in this Agreement shall have the meanings attributed to
such terms in the Uniform Commercial Code. All references to
dollar amounts shall mean amounts in lawful money of the United
States of America.
Agreement. The word "Agreement" means this Commercial
Security Agreement, as this Commercial Security Agreement
may be amended or modified from time to time, together with
all exhibits and schedules attached to this Commercial
Security Agreement from time to time.
Collateral. The word "Collateral" means the following
described property of Grantor, whether now owned or
hereafter acquired, whether now existing or hereafter
arising, and wherever located:
All Inventory, chattel paper, accounts, equipment and
general intangibles, together with the following
specifically described property: All tangible and
intangible assets (including all copy rights, trade
marks, customer lists, publishing rights and other
intellectual property) of all direct and indirect
subsidiaries of American Passage Media, Inc.
In addition, the word "Collateral" includes all the
following, whether now owned or hereafter acquired, whether
now existing or hereafter arising, and wherever located:
(a) All attachments, accessions, accessories, tools,
parts, supplies, increases, and additions to and all
replacements of and substitutions for any property
described above.
(b) All products and produce of any of the property
described in this Collateral section.
(c) All accounts, general intangibles, instruments,
rents, monies, payments, and all other rights, arising
out of a sale, lease, or other disposition of any of
the property described in this Collateral section.
(d) All proceeds (including insurance proceeds) from
the sale, destruction, loss, or other disposition of
any of the property described in this Collateral
section.
(e) All records and data relating to any of the
property described in this Collateral section, whether
in the form of a writing, photograph, microfilm,
microfiche, or electronic media, together with all of
Grantor's right, title, and interest in and to all
computer software required to utilize, create,
maintain, and process any such records or data on
electronic media.
Event of Default. The words "Event of Default" mean and
include without limitation any of the Events of Default set
forth below in the section titled "Events of Default."
Grantor. The word "Grantor" means American Passage Media,
Inc., its successors and assigns
Guarantor. The word "Guarantor" means and includes without
limitation each and all of the guarantors, sureties, and
accommodation parties in connection with the Indebtedness
and their personal representatives, successors and assigns.
Indebtedness. The word "Indebtedness" means the
indebtedness evidenced by the Note, including all principal,
interest, and fees, costs, and expenses, if any, together
with all modifications of and renewals, replacements and
substitutions for any of the foregoing. "Indebtedness" also
includes all other present and future liabilities and
obligations of Grantor to Lender, whether direct or
indirect, matured or unmatured, and whether absolute or
contingent, joint, several or joint and several, and no
matter how the same may be evidenced or shall arise.
Lender. The word "Lender' means SIGNET BANK, its successors
and assigns.
Note. The word "Note" means the note or credit agreement
dated September 11, 1996, in the principal amount of
$3,500,000.00 from American Passage Media, Inc. to Lender,
together with all modifications of and renewals,
replacements, and substitutions for the note or credit
agreement.
Related Documents. The words "Related Documents" mean and
include without limitation all promissory notes, credit
agreements, loan agreements, environmental agreements,
guaranties, security agreements, mortgages, deeds of trust,
and all other instruments, agreements and documents, whether
now or hereafter existing, executed in connection with the
Indebtedness.
LENDER'S RIGHT OF SETOFF. In addition to all liens upon and
rights of setoff against the moneys, securities or other property
of Grantor given to Lender by law, Lender shall have, with
respect to Grantor's obligations to Lender under this Agreement
and to the extent permitted by law, a contractual possessory
security interest in and a right of setoff against, and Grantor
hereby assigns, conveys, delivers, pledges, and transfers to
Lender all of Grantor's right, title, and interest in and to all
deposits, moneys, securities, and other property of Grantor now
or hereafter in the possession of or on deposit with Lender,
whether held in a general or special account or deposit, whether
held jointly with someone else, or whether held for safekeeping
or otherwise, excluding however all IRA, Keogh, and trust
accounts. Every such security interest and right of setoff may
be exercised without demand upon or notice to Grantor. No
security interest or right of setoff shall be deemed to have been
waived by any act or conduct on the part of Lender or by any
neglect to exercise such right of setoff or to enforce such
security interest or by any delay in so doing. Every right of
setoff and security interest shall continue in full force and
effect until such right of setoff or security interest is
specifically waived or released by an instrument in writing
executed by Lender.
OBLIGATIONS OF GRANTOR. Grantor warrants and covenants to Lender
as follows:
Perfection of Security Interest. Grantor agrees to execute
such financing statements and to take whatever other actions
are requested by Lender to perfect and continue Lender's
security interest in the Collateral. Upon request of
Lender, Grantor will deliver to Lender any and all of the
documents evidencing or constituting the Collateral, and
Grantor will note Lender's interest upon any and all chattel
paper if not delivered to Lender for possession by Lender.
Grantor hereby appoints Lender as its irrevocable attorney-
in-fact for the purpose of executing any documents necessary
to perfect or to continue the security interest granted in
this Agreement. Lender may at any time, and without further
authorization from Grantor, file a carbon, photographic or
other reproduction of any financing statement or of this
Agreement for use as a financing statement. Grantor will
reimburse Lender for all expenses for the perfection and the
continuation of the perfection of Lender's security interest
in the Collateral. Grantor promptly will notify Lender
before any change in Grantor's name including any change to
the assumed business names of Grantor. This is a continuing
Security Agreement and will continue in effect even though
all or any part of the Indebtedness is paid in full and even
though for a period of time Grantor may not be indebted to
Lender.
No Violation. The execution and delivery of this Agreement
will not violate any law or agreement governing Grantor or
to which Grantor is a party, and its certificate or articles
of incorporation and bylaws do not prohibit any term or
condition of this Agreement.
Enforceability of Collateral. To the extent the Collateral
consists of accounts, chattel paper, or general intangibles,
the Collateral is enforceable in accordance with its terms,
is genuine, and complies with applicable laws concerning
form, content and manner of preparation and execution, and
all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated
as they appear to be on the Collateral. At the time any
account becomes subject to a security interest in favor of
Lender, the account shall be a good and valid account
representing an undisputed, bona fide indebtedness incurred
by the account debtor, for merchandise held subject to
delivery instructions or theretofore shipped or delivered
pursuant to a contract of sale, or for services theretofore
performed by Grantor with or for the account debtor; there
shall be no setoffs or counterclaims against any such
account; and no agreement under which any deductions or
discounts may be claimed shall have been made with the
account debtor except those disclosed to Lender in writing.
Location of the Collateral. Grantor, upon request of
Lender, will deliver to Lender in form satisfactory to
Lender a schedule of real properties and Collateral
locations relating to Grantor's operations, including
without limitation the following: (a) all real property
owned or being purchased by Grantor; (b) all real property
being rented or leased by Grantor; (c) all storage
facilities owned, rented, leased, or being used by Grantor;
and (d) all other properties where Collateral is or may be
located. Except in the ordinary course of its business,
Grantor shall not remove the Collateral from its existing
locations without the prior written consent of Lender.
Removal of Collateral. Grantor shall keep the Collateral
(or to the extent the Collateral consists of intangible
property such as accounts, the records concerning the
Collateral) at Grantor's address shown above, or at such
other locations as are acceptable to Lender. Except in the
ordinary course of its business, including the sales of
inventory, Grantor shall not remove the Collateral from its
existing locations without the prior written consent of
Lender. To the extent that the Collateral consists of
vehicles, or other titled property, Grantor shall not take
or permit any action which would require application for
certificates of title for the vehicles outside the
Commonwealth of Virginia, without the prior written consent
of Lender.
Transactions Involving Collateral. Except for inventory
sold or accounts collected in the ordinary course of
Grantor's business, Grantor shall not sell, offer to sell,
or otherwise transfer or dispose of the Collateral. While
Grantor is not in default under this Agreement, Grantor may
sell inventory, but only in the ordinary course of its
business and only to buyers who qualify as a buyer in the
ordinary course of business. A sale in the ordinary course
of Grantor's business does not include a transfer in partial
or total satisfaction of a debt or any bulk sale. Grantor
shall not pledge, mortgage, encumber or otherwise permit the
Collateral to be subject to any lien, security interest,
encumbrance, or charge, other than the security interest
provided for in this Agreement, without the prior written
consent of Lender. This includes security interests even if
junior in right to the security interests granted under this
Agreement. Unless waived by Lender, all proceeds from any
disposition of the Collateral (for whatever reason) shall be
held in trust for Lender and shall not be commingled with
any other funds; provided however, this requirement shall
not constitute consent by Lender to any sale or other
disposition. Upon receipt, Grantor shall immediately
deliver any such proceeds to Lender.
Title. Grantor represents and warrants to Lender that it
holds good and marketable title to the Collateral, free and
clear of all liens and encumbrances except for the lien of
this Agreement. No financing statement covering any of the
Collateral is on file in any public office other than those
which reflect the security interest created by this
Agreement or to which Lender has specifically consented.
Grantor shall defend Lender's rights in the Collateral
against the claims and demands of all other persons.
Collateral Schedules and Locations. As often as Lender
shall require, and insofar as the Collateral consists of
accounts and general intangibles, Grantor shall deliver to
Lender schedules of such Collateral, including such
information as Lender may require, including without
limitation names and addresses of account debtors and agings
of accounts and general intangibles. Insofar as the
Collateral consists of inventory and equipment, Grantor
shall deliver to Lender, as often as Lender shall require,
such lists, descriptions, and designations of such
Collateral as Lender may require to identify the nature,
extent, and location of such Collateral. Such information
shall be submitted for Grantor and each of its subsidiaries
or related companies.
Maintenance and Inspection of Collateral. Grantor shall
maintain all tangible Collateral in good condition and
repair. Grantor will not commit or permit damage to or
destruction of the Collateral or any part of the Collateral.
Lender and its designated representatives and agents shall
have the right at all reasonable times to examine, inspect,
and audit the Collateral wherever located.
Taxes, Assessments and Liens. Grantor will pay when due all
taxes, assessments and liens upon the Collateral, its use or
operation, upon this Agreement, upon any promissory note or
notes evidencing the Indebtedness, or upon any of the other
Related Documents. Grantor may withhold any such payment or
may elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the
obligation to pay and so long as Lender's interest in the
Collateral is not jeopardized in Lender's sole opinion. If
the Collateral is subjected to a lien which is not
discharged within fifteen (15) days, Grantor shall deposit
with Lender cash, a sufficient corporate surety bond or
other security satisfactory to Lender in an amount adequate
to provide for the discharge of the lien plus any interest,
costs, attorneys' fees or other charges that could accrue as
a result of foreclosure or sale of the Collateral. In any
contest Grantor shall defend itself and Lender and shall
satisfy any final adverse judgment before enforcement
against the Collateral. Grantor shall name Lender as an
additional obligee under any surety bond furnished in the
contest proceedings.
Compliance With Governmental Requirements. Grantor shall
comply promptly with all laws, ordinances, rules and
regulations of all governmental authorities, now or
hereafter in effect, applicable to the ownership,
production, disposition, or use of the Collateral. Grantor
may contest in good faith any such law, ordinance or
regulation and withhold compliance during any proceeding,
including appropriate appeals, so long as Lender's interest
in the Collateral, in Lender's opinion, is not jeopardized.
Hazardous Substances. Grantor represents and warrants that
the Collateral never has been, and never will be so long as
this Agreement remains a lien on the Collateral, used for
the generation, manufacture, storage, transportation,
treatment, disposal, release or threatened release of any
hazardous waste or substance, as those terms are defined in
the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601,
et seq. ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, Pub. L. No. 99-499 ("SARA"),
the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1801, et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901, et seq., or other
applicable state or Federal laws, rules, or regulations
adopted pursuant to any of the foregoing. The terms
"hazardous waste" and "hazardous substance" shall also
include, without limitation, petroleum and petroleum by-
products or any fraction thereof and asbestos. The
representations and warranties contained herein are based on
Grantor's due diligence in investigating the Collateral for
hazardous wastes and substances. Grantor hereby (a)
releases and waives any future claims against Lender for
indemnity or contribution in the event Grantor becomes
liable for cleanup or other costs under any such laws, and
(b) agrees to indemnify and hold harmless Lender against any
and all claims and losses resulting from a breach of this
provision of this Agreement. This obligation to indemnify
shall survive the payment of the Indebtedness and the
satisfaction of this Agreement.
Maintenance of Casualty Insurance. Grantor shall procure
and maintain all risks insurance, including without
limitation fire, theft and liability coverage together with
such other insurance as Lender may require with respect to
the Collateral, in form, amounts, coverages and basis
acceptable to Lender and issued by a company or companies
acceptable to Lender. Grantor, upon request of Lender, will
deliver to Lender from time to time the policies or
certificates of insurance in form satisfactory to Lender,
including stipulations that coverages will not be cancelled
or diminished without at least thirty (30) days' prior
written notice to Lender and not including any disclaimer of
the insurer's liability for failure to give such a notice.
Each insurance policy also shall include an endorsement
providing that coverage in favor of Lender will not be
impaired in any way by any act, omission or default of
Grantor or any other person. In connection with all
policies covering assets in which Lender holds or is offered
a security interest, Grantor will provide Lender with such
loss payable or other endorsements as Lender may require.
If Grantor at any time fails to obtain or maintain any
insurance as required under this Agreement, Lender may (but
shall not be obligated to) obtain such insurance as Lender
deems appropriate, including if it so chooses "single
interest insurance," which will cover only Lender's interest
in the Collateral.
Application of Insurance Proceeds. Grantor shall promptly
notify Lender of any loss or damage to the Collateral.
Lender may make proof of loss if Grantor fails to do so
within fifteen (15) days of the casualty. All proceeds of
any insurance on the Collateral, including accrued proceeds
thereon, shall be held by Lender as part of the Collateral.
If Lender consents to repair or replacement of the damaged
or destroyed Collateral, Lender shall, upon satisfactory
proof of expenditure, pay or reimburse Grantor from the
proceeds for the reasonable cost of repair or restoration.
If Lender does not consent to repair or replacement of the
Collateral, Lender shall retain a sufficient amount of the
proceeds to pay all of the Indebtedness, and shall pay the
balance to Grantor. Any proceeds which have not been
disbursed within six (6) months after their receipt and
which Grantor has not committed to the repair or restoration
of the Collateral shall be used to prepay the Indebtedness.
Insurance Reports. Grantor, upon request of Lender, shall
furnish to Lender reports on each existing policy of
insurance showing such information as Lender may reasonably
request including the following: (a) the name of the
insurer; (b) the risks insured; (c) the amount of the
policy; (d) the property insured; (e) the then current value
an the basis of which insurance has been obtained and the
manner of determining that value; and (f) the expiration
date of the policy. In addition, Grantor shall upon request
by Lender (however not more often than annually) have an
independent appraiser satisfactory to Lender determine, as
applicable, the cash value or replacement cost of the
Collateral.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until
default and except as otherwise provided below with respect to
accounts, Grantor may have possession of the tangible personal
property and beneficial use of all the Collateral and may use it
in any lawful manner not inconsistent with this Agreement or the
Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where
possession of the Collateral by Lender is required by law to
perfect Lender's security interest in such Collateral. Until
otherwise notified by Lender, Grantor may collect any of the
Collateral consisting of accounts. At any time and even though
no Event of Default exists, Lender may exercise its rights to
collect the accounts and to notify account debtors to make
payments directly to Lender for application to the Indebtedness.
If Lender at any time has possession of any Collateral, whether
before or after an Event of Default, Lender shall be deemed to
have exercised reasonable care in the custody and preservation of
the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender's sole discretion,
shall deem appropriate under the circumstances, but failure to
honor any request by Grantor shall not of itself be deemed to be
a failure to exercise reasonable care. Lender shall not be
required to take any steps necessary to preserve any rights in
the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Indebtedness.
EXPENDITURES BY LENDER. If not discharged or paid when due,
Lender may (but shall not be obligated to) discharge or pay any
amounts required to be discharged or paid by Grantor under this
Agreement, including without limitation all taxes, liens,
security interests, encumbrances, and other claims, at any time
levied or placed on the Collateral. Lender also may (but shall
not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or
paid by Lender for such purposes will then bear interest at the
rate charged under the Note from the date incurred or paid by
Lender to the date of repayment by Grantor. All such expenses
shall become a part of the Indebtedness and, at Lender's option,
will (a) be payable on demand, (b) be added to the balance of the
Note and be apportioned among and be payable with any installment
payments to become due during either (i) the term of any
applicable insurance policy or (ii) the remaining term of the
Note, or (c) be treated as a balloon payment which will be due
and payable at the Note's maturity. This Agreement also will
secure payment of these amounts. Such right shall be in addition
to all other rights and remedies to which Lender may be entitled
upon the occurrence of an Event of Default.
EVENTS OF DEFAULT. Each of the following shall constitute an
Event of Default under this Agreement:
Default on Indebtedness. Failure of Grantor to make any
payment when due on the Indebtedness.
Other Defaults. Failure of Grantor to comply with or to
perform any other term, obligation, covenant or condition
contained in this Agreement or in any of the Related
Documents or in any other agreement between Lender and
Grantor.
Default in Favor of Third Parties. Should Borrower or any
Grantor default under any loan, extension of credit,
security agreement, purchase or sales agreement, or any
other agreement, in favor of any other creditor or person
that may materially affect any of Borrower's property or
Borrower's or any Grantor's ability to repay the Loans or
perform their respective obligations under this Agreement or
any of the Related Documents.
False Statements. Any warranty, representation or statement
made or furnished to Lender by or on behalf of Grantor under
this Agreement, the Note or the Related Documents is false
or misleading in any material respect, either now or at the
time made or furnished.
Detective Collateralization. This Agreement or any of the
Related Documents ceases to be in full force and effect
(including failure of any collateral documents to create a
valid and perfected security interest or lien) at any time
and for any reason.
Insolvency. The dissolution or termination of Grantor's
existence as a going business, the insolvency of Grantor,
the appointment of a receiver for any part of Grantor's
property, any assignment for the benefit of creditors, any
type of creditor workout, or the commencement of any
proceeding under any bankruptcy or insolvency laws by or
against Grantor.
Creditor or Forfeiture Proceedings. Commencement of
foreclosure or forfeiture proceedings, whether by judicial
proceeding, self-help, repossession or any other method, by
any creditor of Grantor or by any governmental agency
against the Collateral or any other collateral securing the
Indebtedness. This includes a garnishment of any of
Grantor's deposit accounts with Lender.
Events Affecting Guarantor. Any of the preceding events
occurs with respect to any Guarantor of any of the
Indebtedness or such Guarantor dies or becomes incompetent.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs
under this Agreement, at any time thereafter, Lender shall have
all the rights of a secured party under the Virginia Uniform
Commercial Code. In addition and without limitation, Lender may
exercise any one or more of the following rights and remedies:
Accelerate Indebtedness. Lender may declare the entire
Indebtedness, including any prepayment penalty which
Grantor, would be required to pay, immediately due and
payable, without notice.
Assemble Collateral. Lender may require Grantor to deliver
to Lender all or any portion of the Collateral and any and
all certificates of title and other documents relating to
the Collateral. Lender may require Grantor to assemble the
Collateral and make it available to Lender at a place to be
designated by Lender. Lender also shall have full power to
enter upon the property of Grantor to take possession of and
remove the Collateral. If the Collateral contains other
goods not covered by this Agreement at the time of
repossession, Grantor agrees Lender may take such other
goods, provided that Lender makes reasonable efforts to
return them to Grantor after repossession.
Sell the Collateral. Lender shall have full power to sell,
lease, transfer, or otherwise deal with the Collateral or
proceeds thereof in its own name or that of Grantor. Lender
may sell the Collateral at public auction or private sale.
Unless the Collateral threatens to decline speedily in value
or is of a type customarily sold on a recognized market,
Lender will give Grantor reasonable notice of the time after
which any private sale or any other intended disposition of
the Collateral is to be made. The requirements of
reasonable notice shall be met if such notice is given at
least ten (10) days before the time of the sale or
disposition. All expenses relating to the disposition of
the Collateral, including without limitation the expenses of
retaking, holding, insuring, preparing for sale and selling
the Collateral, shall become a part of the Indebtedness
secured by this Agreement and shall be payable on demand,
with interest at the Note rate from date of expenditure
until repaid.
Appoint Receiver. To the extent permitted by applicable
law, Lender shall have the following rights and remedies
regarding the appointment of a receiver: (a) Lender may have
a receiver appointed as a matter of right, (b) the receiver
may be an employee of Lender and may serve without bond, and
(c) all fees of the receiver and his or her attorney shall
become part of the Indebtedness secured by this Agreement
and shall be payable on demand, with interest at the Note
rate from date of expenditure until repaid.
Collect Revenues, Apply Accounts. Lender, either itself or
through a receiver, may collect the payments, rents, income,
and revenues from the Collateral. Lender may at any time in
its discretion transfer any Collateral into its own name or
that of its nominee and receive the payments, rents, income,
and revenues therefrom and hold the same as security for the
Indebtedness or apply it to payment of the Indebtedness in
such order of preference as Lender may determine. Insofar
as the Collateral consists of accounts, general intangibles,
insurance policies, instruments, chattel paper, chooses in
action, or similar property, Lender may demand, collect,
receipt for, settle, compromise, adjust, sue for, foreclose,
or realize on the Collateral as Lender may determine,
whether or not Indebtedness or Collateral is then due. For
these purposes, Lender may, on behalf of and in the name of
Grantor, receive, open and dispose of mail addressed to
Grantor; change any address to which mail and payments are
to be sent; and endorse notes, checks, drafts, money orders,
documents of title, instruments and items pertaining to
payment, shipment, or storage of any Collateral. To
facilitate collection, Lender may notify account debtors and
obligors on any Collateral to make payments directly to
Lender.
Obtain Deficiency. If Lender chooses to sell any or all of
the Collateral, Lender may obtain a judgment against Grantor
for any deficiency remaining on the Indebtedness due to
Lender after application of all amounts received from the
exercise of the rights provided in this Agreement. Grantor
shall be liable for a deficiency even if the transaction
described in this subsection is a sale of accounts or
chattel paper.
Other Rights and Remedies. Lender shall have all the rights
and remedies of a secured creditor under the provisions of
the Uniform Commercial Code, as may be amended from time to
time. In addition, Lender shall have and may exercise any
or all other rights and remedies it may have available at
law, in equity, or otherwise.
Cumulative Remedies. All of Lender's rights and remedies,
whether evidenced by this Agreement or the Related Documents
or by any other writing, shall be cumulative and may be
exercised singularly or concurrently. Election by Lender to
pursue any remedy shall not exclude pursuit of any other
remedy, and an election to make expenditures or to take
action to perform an obligation of Grantor under this
Agreement, after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise
its remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions
are a part of this Agreement:
Amendments. This Agreement, together with any Related
Documents, constitutes the entire understanding and
agreement of the parties as to the matters set forth in this
Agreement. No alteration of or amendment to this Agreement
shall be effective unless given in writing and signed by the
party or parties sought to be charged or bound by the
alteration or amendment.
Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the
Commonwealth of Virginia. Lender and Grantor hereby waive
the right to any jury trial in any action, proceeding, or
counterclaim brought by either party against the other.
Attorneys' Fees; Expenses. Grantor agrees that if Lender
hires an attorney to help enforce this Agreement or to
collect any sums owing under this Agreement, Grantor will
pay, subject to any limits under applicable law, Lender's
attorney fees equal to 25.000% of the principal balance due
on the Note, and all of Lender's other collection expenses,
whether or not there is a lawsuit and including without
limitation additional legal expenses for bankruptcy
proceedings.
Caption Headings. Caption headings in this Agreement are
for convenience purposes only and are not to be used to
interpret or define the provisions of this Agreement.
Multiple Parties; Corporate Authority. All obligations of
Grantor under this Agreement shall be joint and several, and
all references to Grantor shall mean each and every Grantor.
This means that each of the Borrowers signing below is
responsible for all obligations in this Agreement.
Notices. All notices required to be given under this
Agreement shall be given in writing, may be sent by
telefacsimilie, and shall be effective when actually
delivered if hand delivered or when deposited with a
nationally recognized overnight courier or deposited as
certified or registered mail in the United States mail,
first class, postage prepaid, addressed to the party to whom
the notice is to be given at the address shown above. Any
party may change its address for notices under this
Agreement by giving formal written notice to the other
parties, specifying that the purpose of the notice is to
change the party's address. To the extent permitted by
applicable law, if there is more than one Grantor, notice to
any Grantor will constitute notice to all Grantors. For
notice purposes, Grantor will keep Lender informed at all
times of Grantor's current address(es).
Power of Attorney. Grantor hereby appoints Lender as its
true and lawful attorney-in-fact, irrevocably, with full
power of substitution to do the following: (a) to demand,
collect, receive, receipt for, sue and recover all sums of
money or other property which may now or hereafter become
due, owing or payable from the Collateral; (b) to execute,
sign and endorse any and all claims, instruments, receipts,
checks, drafts or warrants issued in payment for the
Collateral; (c) to settle or compromise any and all claims
arising under the Collateral, and, in the place and stead of
Grantor, to execute and deliver its release and settlement
for the claim; and (d) to file any claim or claims or to
take any action or institute or take part in any
proceedings, either in its own name or in the name of
Grantor, or otherwise, which in the discretion of Lender may
seem to be necessary or advisable. This power is given as
security for the Indebtedness, and the authority hereby
conferred is and shall be irrevocable and shall remain in
full force and effect until renounced by Lender.
Severability. If a court of competent jurisdiction finds
any provision of this Agreement to be invalid or
unenforceable as to any person or circumstance, such finding
shall not render that provision invalid or unenforceable as
to any other persons or circumstances. If feasible, any
such offending provision shall be deemed to be modified to
be within the limits of enforceability or validity; however,
if the offending provision cannot be so modified, it shall
be stricken and all other provisions of this Agreement in
all other respects shall remain valid and enforceable.
Successor Interests. Subject to the limitations set forth
above on transfer of the Collateral, this Agreement shall be
binding upon and inure to the benefit of the parties, their
successors and assigns.
Waiver. Lender shall not be deemed to have waived any
rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the
part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Lender
of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand
strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any
course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender's rights or of any of
Grantor's obligations as to any future transactions.
Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any
instance shall not constitute continuing consent to
subsequent instances where such consent is required and in
all cases such consent may be granted or withheld in the
sole discretion of Lender.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
COMMERCIAL SECURITY AGREEMENT, AND GRANTOR AGREES TO ITS TERMS.
THIS AGREEMENT IS DATED SEPTEMBER 11, 1996.
GRANTOR:
American Passage Media, Inc.
By: /s/ Don Leeds (SEAL) By: /s/ Harlan D. Peltz
(SEAL)
Don Leeds Harlan D. Peltz
Executive Vice President Chief Executive Officer
LENDER:
SIGNET BANK
By: /s/Jon A Siabaugh
Jon A Siabaugh
Authorized Officer
Notwithstanding the terms of the foregoing Business Loan
Agreement or any of the Related Documents:
1. Lender may not accelerate the loan or otherwise
exercise any remedies against Borrower unless an Event
of Default has occurred and is continuing.
2. With respect to any default by Borrower in the
performance of any covenant under the Business Loan
Agreement or Related Documents (including, without
limitation, a payment covenant), such default will not
constitute an Event of Default and Lender may not
accelerate the Loan or otherwise exercise remedies
against Borrower if Borrower fully cures such default
by performing such act or making such payment within 15
calendar days of the date on which such action or
payment was due to be performed or paid.
3. Once a default occurs under the Business Loan Agreement
or Related Documents, then such default will continue
to exist until it is either cured by Borrower or is
otherwise waived by Lender and once an Event of Default
occurs under the Business Loan Agreement or Related
Documents, then such Event of Default will continue to
exist until expressly waived by Lender which may not be
unreasonably withheld by Lender.
By: /s/ Don Leeds By: /s/ Harlan D. Peltz
Don Leeds Harlan D. Peltz