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Interep - LLC MEMBERSHIP INTEREST PLEDGE AGREEMENT
EXHIBIT 10.2
LLC MEMBERSHIP INTEREST PLEDGE AGREEMENT
This LLC MEMBERSHIP INTEREST PLEDGE AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this "Agreement"), dated as of July 2, 1998, is made by INTEREP NATIONAL RADIO SALES, INC. ("Interep") and MCGAVREN GUILD, INC. ("MG" and, together with Interep, the "Pledgors"), in favor of BANKBOSTON, N.A., as administrative agent (the "Secured Party") for the Lenders that may, from time to time, be parties to that certain Credit Agreement (as defined below).
WHEREAS, the Pledgors, CLEAR CHANNEL RADIO, LLC and CABALLERO SPANISH MEDIA L.L.C (each, an "LLC" and collectively, the "LLCs"), among others, are the Borrowers pursuant to that certain Revolving Line of Credit Agreement, dated of even date herewith (the "Credit Agreement"; capitalized terms not otherwise defined herein shall have the meanings given such term in the Credit Agreement) with the Agent, SUMMIT BANK, as documentation agent, and the Lenders.
WHEREAS, it is a condition precedent to the effectiveness of the Credit Agreement that the Pledgors shall pledge their membership interests in the LLCs to secure the payment and performance of all of the Secured Obligations (as hereinafter defined).
WHEREAS, the Pledgors are the legal and beneficial owner of the membership interests of the LLCs (collectively, the "Pledged Interests"), which interests constitute the percentage of all of the membership interests of the LLCs identified in Schedule A.
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NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Pledge. The Pledgors hereby pledge and grant to the Secured
------ Party, for the ratable benefit of the Lenders, a continuing first priority security interest in all of the Pledgors' now existing or hereafter arising right, title and interest in and to the following property
(collectively, the "Pledged Collateral") to secure all of the Secured Obligations:
(i) the Pledged Interests;
(ii) all distributions, refunds or returns of capital, repayments of
loans or advances, fees, income, profits and other property, interests or
proceeds from time to time received, receivable or otherwise distributed or
owing to the Pledgors in respect of, or in exchange for, any or all of the
Pledged Interests (collectively, "Distributions"); and
(iii) all Proceeds (as defined under the Uniform Commercial Code (the
"UCC") as in effect in any relevant jurisdiction or under other relevant
law) of any of the foregoing (i)-(ii), including, without limitation,
obligations to pay amounts in respect of any Pledged Shares and any other
amounts at any time paid or payable under or in connection with any of the
Pledged Collateral.
Section 2. Secured Obligations. This Agreement secures, and the Pledged
------------------- Collateral is collateral security for, the prompt payment and performance in full when due, whether at stated maturity, by acceleration or otherwise (including, without limitation, the payment of interest and other amounts which would accrue and become due but for the filing of a petition in bankruptcy or the operation of the automatic stay under Section 362(a) of the Bankruptcy Code), of (i) all obligations of the Borrowers now or hereafter existing under or in respect of the Credit Documents (as defined in the Credit Agreement) and (ii) all obligations of the Pledgors now or hereafter existing under or in respect of this Agreement (the obligations described in clauses (i) and (ii) are collectively referred to as the "Secured Obligations").
Section 3. No Release. Nothing set forth in this Agreement shall (i)
---------- relieve the Pledgors from the performance of any term, covenant, condition or agreement on the Pledgors' part to be performed or observed under or in respect of any of the Pledged Collateral or from any liability to any person or entity under or in respect of any of the Pledged Collateral, or (ii) impose any obligation on the Secured Party to perform or observe any such term, covenant, condition or agreement on the Pledgor's part to be so performed or observed, or (iii) impose any liability on the Secured Party for any act or omission on the part of the Pledgors relating thereto
or for any breach of any representation or warranty on the part of the Pledgors contained in this Agreement or any other Credit Document. The obligations of the Pledgors contained in this Section 3 shall survive the termination of this Agreement and the discharge of the Pledgors' other obligations hereunder.
Section 4. Supplements; Further Assurances. At any time and from time to
------------------------------- time, at the expense of the Pledgors, the Pledgors shall promptly execute and deliver all further instruments and documents, including supplemental or additional UCC-1 financing statements, and take all further action that may be necessary or that the Secured Party may request, in order to perfect and protect any pledge or security interest granted or purported to be granted hereby or to enable the Secured Party to exercise and enforce its rights and remedies hereunder with respect to any Pledged Collateral.
Section 5. Representations and Warranties. The Pledgors represent and
------------------------------ warrant as follows:
(i) The Pledgors are, and at the time of any delivery of any Pledged
Collateral to the Secured Party will be, the legal and beneficial owner of
the Pledged Collateral. All Pledged Collateral is and will be owned by the
Pledgors free and clear of any lien or other encumbrance except for the
lien created by this Agreement.
(ii) The Pledgors have full power, authority and legal right to pledge
all the Pledged Collateral pursuant to this Agreement.
(iii) No consent of any party, and no consent, authorization, approval,
or other action by, and no notice to or filing with, any governmental
authority or other person or entity is required either (a) for the pledge
by the Pledgors of the Pledged Collateral pursuant to this Agreement or for
the execution, delivery or performance of this Agreement by the Pledgors,
(b) for the exercise by the Secured Party of the voting or other rights
provided for in this Agreement, or (c) for the exercise by the Secured
Party of the remedies in respect of the Pledged Collateral pursuant to this
(iv) Each of the Pledgors' chief executive office and principal place
of business is 100 Park Avenue, New York, New York.
(v) As of the date hereof, (a) the Pledged Interests of the LLCs
identified in Schedule A constitute the percentage of membership interests
of the LLC s as identified in Schedule A, and (b) Schedule A constitutes a
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true and complete description of the Pledged Interests.
(vi) The membership interests in the LLCs are not evidenced by any
written certificate. The Pledgors have caused to be filed with the
Secretary of State of the State of New York, and with the county clerk of
the county in which the chief executive office and principal place of
business of each Pledgor, UCC-1 financing statements evidencing the lien
and pledge created by this Agreement, have amended each LLC's operating
agreement to allow for the pledge of the Pledged Interests and have caused
each LLC to record the Secured Party's security interest on the books and
records of such LLC and such actions create a valid and perfected first
priority security interest in the Pledged Collateral securing the payment
of the Secured Obligations.
(vii) There are no other members to any LLC. The Pledgors have
consented to the Secured Party, upon the occurrence of an Event of Default,
exercising any rights of membership in each LLC and consented to Secured
Party electing to become a successor member in each LLC. This Agreement
constitutes the legal, valid and binding obligation of the Pledgors,
enforceable against the Pledgors in accordance with its terms.
(viii) All information set forth herein relating to the Pledged
Collateral is accurate and complete in all respects.
(ix) The Pledgors at all times will be the sole beneficial owner of the
Pledged Collateral.
Section 6. Voting Rights: Distributions: Etc.
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(a) So long as no Event of Default shall have occurred and be continuing:
(i) The Pledgors shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Interests or any part
thereof for any purpose not inconsistent with the terms or purpose of this
Agreement or any of the other Credit Documents; provided, however, that the
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Pledgors shall not in any event exercise such rights in any manner which
may have an adverse effect on the value of the Pledged Collateral or the
security intended to be provided by this Agreement.
(ii) Except as otherwise provided in this Agreement, the Pledgors shall
be entitled to receive and retain, and to utilize free and clear of the
lien of this Agreement, any and all Distributions.
(b) Upon the occurrence and during the continuance of an Event of Default:
(i) All rights of the Pledgors to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to
Section 6(a)(i) hereof shall immediately cease, and all such rights shall
thereupon become vested in the Secured Party, which shall thereupon have
the sole right to exercise such voting and other consensual rights.
(ii) All rights of the Pledgors to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to Section 6(a)(ii)
hereof shall cease, and all such rights shall thereupon become vested in
the Secured Party, which shall thereupon have the sole right to receive
and hold as Pledged Collateral such Distributions.
(c) The Pledgors shall, at the Pledgors' expense, from time to time, execute and deliver to the Secured Party appropriate instruments as the Secured Party may request in order to permit the Secured Party to exercise the voting and other rights which it may be entitled to exercise pursuant to Section 6(b)(i) hereof and to receive all Distributions which it may be entitled to. receive under Section 6(b)(ii) hereof.
(d) All Distributions which are received by the Pledgors contrary to the provisions of Section 6(b)(ii) hereof shall be received in trust for the benefit of the Secured Party, shall be segregated from other funds of the
Pledgors and shall immediately be paid over to the Secured Party as Pledged Collateral in the same form as so received (with any necessary endorsement).
Section 7. Additional Covenants of Pledgors.
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(a) The Pledgors shall not (i) sell, convey, assign or otherwise dispose of, or grant any option, right or warrant with respect to, any of the Pledged Collateral, (ii) create or a permit to exist any lien or other encumbrance upon or with respect to any Pledged Collateral other than the lien and security interest granted to the Secured Party under this Agreement, (iii) amend, modify or terminate the Operating Agreement of any LLC, or (iv) permit any LLC to merge, dissociate, liquidate, consolidate or change its legal form, except as expressly permitted by the Credit Agreement.
(b) The Pledgors shall (i) cause the LLCs not to issue any membership interests in addition to or in substitution for the Pledged Interests, except to the Pledgors, and (ii) pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all additional membership interests which are required to be pledged hereunder.
(c) The Pledgors shall deliver to the Secured Party, immediately upon receipt thereof, copies of all notices, certificates, documents, and instruments received with respect to the Pledged Collateral.
(d) The Pledgors shall use any distributions from the LLCs for the purposes of payment of estimated or actual federal or state income taxes with respect to the Pledged Interests solely to pay such taxes and shall hold any such distributions not used for the payment of such taxes in trust for the Secured Party.
(e) The Pledgors hereby waive any restriction on the transfer of the Pledgors' interests as members in each LLC.
(f) Neither Pledgor will, without giving the Secured Party at least forty- five (45) days prior written notice, change its corporate name or the name under which it conducts its business, change the address of its chief executive office and principal place of business or change the location of its records and books of account.
Section 8. Remedies upon Default: Decisions Relating to Exercise
------------------------------------------------------ of Remedies. - -----------
(a) If any Event of Default shall have occurred and be continuing, the Secured Party shall have the right. in addition to other rights and remedies provided for herein or otherwise available to it to be exercised from time to time, (i) to retain and apply the Distributions to the Secured Obligations, (ii) to exercise all the rights and remedies of a secured party on default under the UCC in effect in any applicable jurisdiction at that time, (iii) to exercise all, rights of the Pledgors as a member of any LLC and/or become a successor member to such LLC, and (iv) to exercise any other rights or remedies pursuant to the Credit Documents, and the Secured Party may also in its sole discretion, without notice except as specified below, sell the Pledged Collateral or any part thereof (including, without limitation, any partial interest in the Pledged Interests) in one or more parcels at public or private sale, at any exchange, broker's board or at any of the Secured Party's offices or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Secured Party may deem commercially reasonable, irrespective of the impact of any such sales on the market price of the Pledged Collateral. The Secured Party or any of its affiliates may be the purchaser of any or all of the Pledged Collateral at any such sale and shall be entitled, for the purpose of bidding and making settlement or payment of the purchase price for all or any portion of the Pledged Collateral sold at such sale, to use and apply any of the Secured Obligations as a credit on account of the purchase price of any Pledged Collateral. Each purchaser at any such sale shall acqui