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Accounts Receivable Security Agreement

This is an actual contract by Benedek Broadcasting.

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Sectors: Media
Governing Law: New York, View New York State Laws
Effective Date: June 06, 1996
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EXECUTION


ACCOUNTS RECEIVABLE SECURITY AGREEMENT


THIS ACCOUNTS RECEIVABLE SECURITY AGREEMENT (this "AGREEMENT") is dated as of June 6, 1996 and entered into by and between BENEDEK BROADCASTING CORPORATION, a Delaware corporation ("GRANTOR"), and CANADIAN IMPERIAL BANK OF COMMERCE, NEW YORK AGENCY ("CIBC-NYA"), as agent for and representative of (in such capacity herein called "COLLATERAL AGENT") the financial institutions ("LENDERS") party to the Credit Agreement referred to below.


PRELIMINARY STATEMENTS


A. Benedek Communications Corporation and Grantor have entered into a Credit Agreement, dated as of June 6, 1996 (said Credit Agreement, as it may hereafter be amended, supplemented or otherwise modified from time to time, being the "CREDIT AGREEMENT", the terms defined therein and not otherwise defined herein being used herein as therein defined), with Lenders, Pearl Street L.P., as Arranging Agent, Goldman, Sachs & Co., as Syndication Agent, and CIBC-NYA, as Administrative Agent and Collateral Agent, pursuant to which Lenders have made commitments, subject to the terms and conditions set forth in the Credit Agreement, to extend certain credit facilities to Grantor.


B. Grantor has entered into that certain Indenture, dated as of March 1, 1995 (said Indenture, as amended, supplemented or otherwise modified from time to time, being the "EXISTING SENIOR NOTE INDENTURE"), with Benedek Broadcasting Company, L.L.C., a Delaware limited liability company and subsidiary of Grantor, and The Bank of New York, as trustee, pursuant to which Grantor has issued $135,000,000 aggregate principal amount of the 11-7/8% Senior Secured Notes due 2005. The Existing Senior Note Indenture permits Grantor to incur indebtedness under a bank credit agreement in an amount not to exceed the greater of $5 million and 75% of the book value of accounts receivable of Grantor and its Subsidiaries and to grant first priority Liens on its accounts receivable to secure such indebtedness.


C. It is a condition precedent to the initial extensions of credit by Lenders under the Credit Agreement that Grantor shall have (i) granted the security interests contemplated by this Agreement in favor of Collateral Agent for the benefit of Lenders and (ii) undertaken the obligations contemplated by this Agreement.


NOW, THEREFORE, in consideration of the premises and in order to induce Lenders to make the initial Loans and other extensions of credit under the Credit Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Grantor hereby agrees with Collateral Agent as follows:


SECTION 1. GRANT OF SECURITY.


Grantor hereby assigns to Collateral Agent, and hereby grants to Collateral Agent a security interest in, all of Grantor's right, title and interest in and to the following, in each case whether now or hereafter existing or in which Grantor now has or hereafter acquires an interest and wherever the same may be located (the "COLLATERAL"):


(A) all accounts, chattel paper, instruments, and other rights
and obligations of any kind arising out of accounts receivable of
Grantor, but excluding any of such accounts, chattel paper, instruments
and other obligations to the extent they constitute rights of Grantor to
receive moneys due or to become due under or proceeds of "Assigned
Agreements" as defined in the Existing Company Pledge Agreement (any and
all such accounts, chattel paper, instruments and other obligations
being the "ACCOUNTS");


(B) all agreements and contracts to which Grantor is a party as
of the date hereof or becomes a party after the date hereof relating to
the sale of advertising time by Grantor or the Stations, as each such
agreement may be amended, supplemented or otherwise modified from time
to time (said agreements, as so amended, supplemented or otherwise
modified, being referred to herein individually as an "ASSIGNED
ADVERTISING AGREEMENT" and collectively as the "ASSIGNED ADVERTISING
AGREEMENTS"), including without limitation (i) all rights of Grantor to
receive moneys due or to become due under or pursuant to the Assigned
Advertising Agreements, (ii) all rights of Grantor to receive proceeds
of any insurance, indemnity, warranty, guaranty or security with respect
to the Assigned Advertising Agreements, (iii) all claims of Grantor for
damages arising out of any breach of or default under the Assigned
Advertising Agreements, and (iv) all rights of Grantor to terminate,
amend, supplement, modify or exercise rights or options under the
Assigned Advertising Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;


(C) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software
that at any time evidence or contain information relating to any of the
Accounts or Assigned Advertising Agreements or are otherwise necessary
or helpful in the collection thereof or realization thereupon; and


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(D) all proceeds, products, rents and profits of or from any and
all of the foregoing Collateral and, to the extent not otherwise
included, all payments under insurance (whether or not Collateral Agent
is the loss payee thereof), any indemnity, warranty or guaranty, payable
by reason of loss or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "proceeds" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition
is voluntary or involuntary.


SECTION 2. SECURITY FOR OBLIGATIONS.


This Agreement secures, and the Collateral is collateral security for, the prompt payment or performance in full when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise (including the payment of amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and liabilities of every nature of Grantor now or hereafter existing under or arising out of or in connection with the Credit Agreement and the other Loan Documents and all extensions or renewals thereof, whether for principal, interest (including without limitation interest that, but for the filing of a petition in bankruptcy with respect to Grantor, would accrue on such obligations), fees, expenses, indemnities or otherwise, whether voluntary or involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from Collateral Agent or any Lender as a preference, fraudulent transfer or otherwise and all obligations of every nature of Grantor now or hereafter existing under this Agreement (all such obligations of Grantor being the "SECURED OBLIGATIONS"); provided that the aggregate amount of Secured Obligations secured hereunder shall not at any time exceed the greater of (i) $5,000,000 and (ii) 75% of the book value of the accounts receivable of Grantor.


SECTION 3. GRANTOR REMAINS LIABLE.


Anything contained herein to the contrary notwithstanding, (a) Grantor shall remain liable under any contracts and agreements included in the Collateral, to the extent set forth therein, to perform all of its duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by Collateral Agent of any of its rights hereunder shall not release Grantor from any of its duties or obligations under the contracts and agreements included in the Collateral, and (c) Collateral Agent shall not have any obligation or liability under any contracts and agreements included in the Collateral by reason of this Agreement, nor shall Collateral Agent be obligated to perform any of the


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obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.


SECTION 4. REPRESENTATIONS AND WARRANTIES.


Grantor represents and warrants as follows:


(A) OWNERSHIP OF COLLATERAL. Except for the security interest
created by this Agreement, Grantor owns, or with respect to Collateral
acquired after the date hereof will own, the Collateral free and clear
of any Lien except as permitted by the Credit Agreement.


(B) OFFICE LOCATIONS; OTHER NAMES. The chief place of business,
the chief executive office and the office where Grantor keeps its
records regarding the Collateral and all originals of all chattel paper
that evidence Collateral is, and has been for the four-month period
preceding the date hereof, as set forth on Schedule I annexed hereto,
Grantor has not in the past done, and does not now do, business under
any other name (including any trade-name or fictitious business name)
except as specified on Schedule I annexed hereto.


(C) DELIVERY OF CERTAIN COLLATERAL. All notes and other
instruments (excluding checks) comprising any and all items of
Collateral have been, or with respect to Collateral acquired after the
date hereof and chattel paper requested by Collateral Agent pursuant to
Section 5(a)(ii) will be, delivered to Collateral Agent duly endorsed
and accompanied by duly executed instruments of transfer or assignment
in blank.


(D) PERFECTION. This Agreement, together with the filing of UCC
financing statements describing the Collateral with the filing offices
indicated on Schedule II annexed hereto, creates a valid, perfected and,
except for Liens permitted pursuant to the Credit Agreement, first
priority security interest in all Collateral in which a security
interest may be perfected by the filing of a financing statement,
securing the payment of the Secured Obligations.


SECTION 5. FURTHER ASSURANCES.


(A) Grantor agrees that from time to time, at the expense of Grantor, Grantor will promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that Collateral Agent may request, in order to perfect and protect any security interest granted or purported to be granted hereby or to enable Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the generality of the foregoing, Grantor will:


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(i) at the request of Collateral Agent, mark conspicuously each item of chattel paper included in the Accounts, each Assigned Advertising Agreement and, at the request of Collateral Agent, each of its records pertaining to the Collateral, with a legend, in form and substance satisfactory to Collateral Agent, indicating that such Collateral is subject to the security interest granted hereby, (ii) at the request of Collateral Agent, deliver and pledge to Collateral Agent hereunder all promissory notes and other instruments (including checks) and all original counterparts of chattel paper constituting Collateral, duly endorsed and accompanied by duly executed instruments of transfer or assignment, all in form and substance satisfactory to Collateral Agent, (iii) execute and file such financing or continuation statements, or amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as Collateral Agent may request, in order to perfect and preserve the security interests granted or purported to be granted hereby, (iv) at any reasonable time, upon request by Collateral Agent, exhibit the Collateral to and allow inspection of the Collateral by Collateral Agent, or persons designated by Collateral Agent, and (v) at Collateral Agent's request, appear in and defend any action or proceeding that may affect Grantor's title to or Collateral Agent's security interest in all or any part of the Collateral.


(B) Grantor hereby authorizes Collateral Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of Grantor. Grantor agrees that a carbon, photographic or other reproduction of this Agreement or of a financing statement signed by Grantor shall be sufficient as a financing statement and may be filed as a financing statement in any and all jurisdictions.


(C) Grantor will furnish to Collateral Agent from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Collateral Agent may reasonably request, all in reasonable detail.


SECTION 6. CERTAIN COVENANTS OF GRANTOR.


Grantor shall:


(A) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the
Collateral;


(B) notify Collateral Agent of any change in Grantor's name,
identity or corporate structure within 15 days of such change;


(C) keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Collateral and
all originals of all chattel


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paper that evidence Accounts at the location therefor specified in
subsection 4(b) hereof, or, upon 30 days' prior written notice to
Collateral Agent, at such other location in a jurisdiction where all
action that may be necessary or desirable, or that Collateral Agent may
request, in order to perfect and protect any security interest granted
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