TABLE OF CONTENTS
Page
RECITALS 1
Section 1. DEFINITIONS...................................................1
Section 1.1 Definitions................................................1
Section 1.2 Effectiveness of this Agreement............................4
Section 2. Representations And Warranties; Other Matters.................4
Section 2.1 Representations and Warranties of the Secured Parties......4
Section 2.2 Representations of Warranties of the Collateral Agent......4
Section 2.3 Cooperation; Accountings...................................5
Section 2.4. Termination of Note Agreement.............................5
Section 3. Appointment and Authorization of Collateral Agent..............5
Section 4. Agency Provisions..............................................5
Section 4.1 Delegation of Duties.....................................6
Section 4.2 Exculpatory Provisions...................................6
Section 4.3 Reliance by Collateral Agent.............................6
Section 4.4 Knowledge or Notice of Default or Event of Default.......7
Section 4.5 Non-Reliance on Collateral Agent and Other Secured
Parties................................................7
Section 4.6 Indemnification..........................................8
Section 4.7 Collateral Agent in Its Individual Capacity..............8
Section 4.8 Successor Collateral Agent...............................8
Section 5. Actions by the Collateral Agent...............................9
Section 5.1 Duties and Obligations...................................9
Section 5.2 Notification of Default..................................9
Section 5.3 Exercise of Remedies.....................................9
Section 5.4 Instructions from Secured Parties.......................10
Section 5.5 Emergency Actions.......................................10
Section 5.6 Changes to Security Documents...........................10
Section 5.7 Release of Collateral...................................11
Section 5.8 Other Actions...........................................11
Section 5.9 Cooperation.............................................11
Section 5.10 Distribution of Proceeds................................11
Section 5.11 Authorized Investments..................................12
Section 6. Miscellaneous................................................13
Section 6.1 Secured Parties; Other Collateral......................13
Section 6.2 Marshalling............................................13
Section 6.3 Consents, Amendments, Waivers..........................13
Section 6.4 Parties in Interest....................................13
Section 6.5 Counterparts...........................................13
Section 6.6 Termination............................................14
Section 6.7 Notices................................................14
Section 6.8 Establishing Outstanding Amount of Senior
Secured Obligations..................................15
Section 6.9 Governing Law..........................................15
EXHIBIT E
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COLLATERAL AGENCY AGREEMENT
Dated as of February 23, 1999
By and Among
PRICEWATERHOUSECOOPERS LLP,
as Collateral Agent,
AND
THE NOTEHOLDERS NAMED IN SCHEDULE I HERETO,
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COLLATERAL AGENCY AGREEMENT
THIS COLLATERAL AGENCY AGREEMENT, dated as of February 23, 1999
(this "Agreement"), is entered into by and among PricewaterhouseCoopers LLP
("PWC"), in its capacity as Collateral Agent (together with its successors
in such capacity the "Collateral Agent"), and each of the Noteholders set
forth on the signature pages hereof (together with their permitted
successors, transferees and assigns, the "Noteholders").
RECITALS:
▇. ▇▇▇▇▇▇▇▇ to the Note Purchase Agreement, dated as of February
23, 1999 (the "Note Agreement"), entered into by USN Communication, Inc.
(the "Company"), and each of the Noteholders, the Noteholders will purchase
certain senior secured notes from the Company (collectively, the "Senior
Secured Notes").
B. The obligations of the Company to (i) the Noteholders under the
Note Agreement and under the Senior Note Documents (as hereinafter defined)
including, without limitation, the obligations evidenced by the Senior
Secured Notes, and (ii) of CoreComm Limited under Section 8.6 of the
CoreComm Asset Purchase Agreement will be secured pursuant to the Security
Documents (as hereinafter defined) in accordance with the priorities set
forth herein and in the Note Agreement. The Noteholders desire to appoint
PWC as Collateral Agent to act on their behalf regarding the Collateral (as
hereinafter defined), all as more fully provided herein. The parties hereto
have entered into this Agreement to, among other things, further define the
rights, duties, authority and responsibilities of the Collateral Agent with
respect to the Collateral.
NOW, THEREFORE, in consideration of the premises and other good
and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. DEFINITIONS
Section 1.1 Definitions. Capitalized terms used herein without
being defined have the meanings provided for in the Note Agreement. In
addition, the following terms shall have the meanings assigned to them
below:
"Affiliate" shall mean, with respect to any Person, any other
Person that, directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with, such first
Person.
"Agreement" shall have the meaning amended thereto in the preamble
hereof.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which commercial banks in New York, New York are required or
authorized to be closed.
"Cash Equivalent Investments" shall mean, (a) direct obligations
of the United States Government or any agencies thereof and obligations
guaranteed by the United States Government, in each case having remaining
terms to maturity of not more than thirty days; and (b) certificates of
deposit, time deposits and acceptances, including Eurodollar deposits,
having remaining terms to maturity of not more than sixty days issued by a
United States bank which has a combined capital and surplus of at least
$750,000,000 and whose long-term certificates of deposit are rated "A" or
better by Standard & Poor's Corporation or "A2" or better by ▇▇▇▇▇'▇
Investors Service, Inc.
"Closing Date" shall have the meaning assigned thereto in Section
2 of the Note Agreement.
"Collateral" shall mean all collateral under the Security Documents.
"Collateral Agent" shall have the meaning assigned thereto in the
preamble.
"Company" shall mean USN Communication, Inc., a Delaware
corporation, and its successors and permitted assigns.
"Corporation" shall mean a corporation, joint stock association or
business trust.
"Default" shall mean any event or condition, the occurrence of
which would, with the lapse of time or the giving of notice, or both,
constitute an Event of Default.
"Event of Default" shall mean any event or occurrence which would
constitute an "Event of Default" under the terms of the Note Agreement.
"Lien" upon the property or assets (or the income or profits
therefrom) of any Person shall mean (in each case, whether the same is
consensual or non-consensual or arises by contract, operation of law, legal
process or otherwise) any mortgage, lien, pledge, attachment, charge or
other security interest or encumbrance or other type of preferential
arrangement of any kind on or in respect of any property of such Person, or
upon the income or profits therefrom, including, without limitation, the
lien or retained security title of a conditional vendor and any covenant,
right of way or other encumbrance on title to real property.
"Note Agreement" shall have the meaning assigned in the Recitals
hereof, and shall include such agreement as amended or modified in
accordance with its terms.
"Noteholders" shall have the meaning assigned thereto in the
preamble, and shall include CoreComm Limited with respect to amounts owing
to it by the Company pursuant to Section 8.6 of the CoreComm Asset Purchase
Agreement.
"Notice of Default" shall mean a notice pursuant to ss.5.2 hereof
from the Collateral Agent or the Required Secured Parties to the Secured
Parties of the occurrence of a Default or an Event of Default.
"Person" shall mean an individual, corporation, partnership, trust
or unincorporated organization, and a government or agency or political
subdivision thereof.
"PWC" shall have the meaning assigned thereto in the preamble.
"Required Secured Parties" shall have the meaning assigned to
"Required Noteholders" in the Note Agreement.
"Secured Party" shall mean any Noteholder and any permitted
successor and assign to the interests in the Secured Obligations owing to
any such Noteholder, and "Secured Parties" shall mean all Secured Parties,
collectively.
"Security Agreement" shall have the same meaning assigned thereto
in the Note Agreement.
"Security Documents" shall mean the Security Agreement and any and
all other agreements, documents and instruments relating to, arising out
of, or in any way connected with any of the foregoing documents or granting
to the Collateral Agent Liens to secure the Senior Secured Obligations,
whether now or hereafter executed, each as may be amended from time to time
in accordance with the terms hereof and any and all ancillary documents and
instruments relating thereto such as stock powers and financing statements
and all extensions, renewals, amendments, substitutions and replacements to
and of any of the foregoing; provided, however, that Security Documents
shall not include the Note Agreement or the Senior Secured Notes
"Senior Note Documents" shall mean the Note Agreement, the Senior
Secured Notes, the Security Documents and all other security agreements,
documents, certificates and instruments relating to, arising out of, or in
any way connected therewith or any of the transactions contemplated
thereby.
"Senior Secured Notes" shall have the meaning assigned thereto in
the Recitals hereof.
"Senior Secured Obligations" shall mean collectively the
indebtedness, obligations and liabilities of the Company to the Noteholders
under the Senior Note Documents (including, but not limited to, all unpaid
principal of, premium, if any, and accrued and unpaid interest on the
Senior Secured Notes), whether now existing or hereafter arising, joint or
several, direct or indirect, absolute or contingent, due or to become due,
matured or unmatured, liquidated or unliquidated, arising by contract,
operation of law or otherwise, and all obligations of the Company to the
Secured Parties or the Collateral Agent arising out of any extension,
refinancing or refunding of any of the foregoing obligations.
The term "subsidiary" shall mean as to any particular parent
corporation or partnership, any corporation of which more than 50% (by
number of votes) of the voting stock shall be beneficially owned, directly
or indirectly, by such parent corporation or partnership. The term
"Subsidiary" shall mean a subsidiary of the Company.
Section 1.2 Effectiveness of this Agreement. The effectiveness of
this Agreement is conditioned upon the execution and delivery of (a) this
Agreement by the Collateral Agent and the Noteholders, (b) the execution,
delivery and effectiveness of the Note Agreement and the Security Documents
by the parties thereto and (c) the execution and delivery of the
Acknowledgment of this Agreement by the Company.
Section 2. Representations And Warranties; Other Matters.
Section 2.1 Representations and Warranties of the Secured Parties.
Each of the Secured Parties represents and warrants to the other parties
hereto that:
(1) The execution, delivery and performance by such Secured Party
of this Agreement has been authorized by all necessary proceedings
(corporate or otherwise) and does not and will not contravene any
provision of law, its charter or by-laws or any amendment thereof, or
of any indenture, agreement, instrument or undertaking binding upon
such Secured Party.
(2) The execution, delivery and performance by such Secured Party
of this Agreement will result in a valid and legally binding
obligation of such Secured Party enforceable in accordance with its
terms.
Section 2.2 Representations of Warranties of the Collateral Agent.
The Collateral Agent hereby represents and warrants to each of the
Secured Parties that:
(1) The Collateral Agent is a limited liability partnership duly
formed, valily existing, and in good standing under the laws of the
jurisdiction of its formation.
(2) The Collateral Agent has full power, authority and legal
right to execute, deliver, and perform this Agreement and has taken
all necessary action to authorize the execution, delivery, and
performance by it of this Agreement.
(3) The execution, delivery and performance by the Collateral
Agent of this Agreement will not contravene any law, rule or
regulation regulating the Collateral Agent or any judgment or order
applicable to or binding on the Collateral Agent and will not
contravene or result in any breach of, or constitute a default under,
the Collateral Agent's limited liability partnership agreement or the
provision of any indenture, mortgage, contract or other agreement to
which it is a party or by which it or any of its properties is bound.
(4) The execution, delivery and performance by the Collateral
Agent of this Agreement will not require the authorization, consent,
or approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any
governmental authority or agency regulating the activities of the
Collateral Agent.
(5) This Agreement has been duly executed and delivered by the
Collateral Agent and constitutes the legal, valid, and binding
agreement of the Collateral Agent, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and
similar laws affecting creditors' rights generally, and general
principles of equity (regardless of whether the application of such
principles is considered in a proceeding in equity or at law).
Section 2.3 Cooperation; Accountings. Each of the Secured Parties
will, upon the reasonable request of another Secured Party, from time to
time execute and deliver or cause to be executed and delivered such further
instruments, and do and cause to be done such further acts as may be
necessary or proper to carry out more effectively the provisions of this
Agreement. The Secured Parties agree to provide to each other upon
reasonable request a statement of all payments received in respect of
Senior Secured Obligations.
Section 2.4 Termination of Note Agreement. Upon final payment in
full of all Senior Secured Obligations owing to any Secured Party, such
Secured Party shall cease to be a party to this Agreement; provided,
however, if all or any part of any payments to such Secured Party are
invalidated or set aside or required to be repaid to any Person in any
bankruptcy proceeding or otherwise, then this Agreement shall be renewed as
of such date and shall thereafter continue in full force and effect to the
extent of the Senior Secured Obligations so invalidated, set aside or
repaid.
Section 3. Appointment and Authorization of Collateral Agent.
(a) Each Secured Party hereby irrevocably designates and appoints
PWC as the Collateral Agent of such Secured Party under this Agreement and
the Security Documents, and each Secured Party hereby irrevocably
authorizes the Collateral Agent to execute and enter into each of the
Security Documents and all other instruments relating to said Security
Documents and (i) to take action on its behalf and exercise such powers and
use such discretion as are expressly permitted hereunder and under the
Security Documents and all instruments relating hereto and thereto and (ii)
to exercise such powers and perform such duties as are, in each case,
expressly delegated to the Collateral Agent by the terms hereof and thereof
together with such other powers and discretion as are reasonably incidental
hereto and thereto.
(b) Notwithstanding any provision to the contrary elsewhere in
this Agreement or the Security Documents, the Collateral Agent shall not
have any duties or responsibilities except those expressly set forth herein
or therein or any fiduciary relationship with any Secured Party, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any Security Document or
otherwise exist against the Collateral Agent.
Section 4. Agency Provisions.
Section 4.1 Delegation of Duties. The Collateral Agent may
exercise its powers and execute any of its duties under this Agreement and
the Security Documents by or through employees, agents or attorneys-in-fact
and shall be entitled to take and to rely on advice of counsel concerning
all matters pertaining to such powers and duties. The Collateral Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. The Collateral Agent
may utilize the services of such Persons as the Collateral Agent in its
sole discretion may determine, and all reasonable fees and expenses of such
Persons shall be borne by the Company.
Section 4.2 Exculpatory Provisions. Neither the Collateral Agent
nor any of the Collateral Agent's officers, partners, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (a) liable for any action
taken or omitted to be taken by it or such Person under or in connection
with this Agreement or any Security Document or any Collateral (except for
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Secured Parties for any recitals,
statements, representations or warranties made by the Company or any
officer thereof contained in, or made or deemed made in connection with,
any Senior Note Document or Security Document or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Collateral Agent under or in connection with, this
Agreement or any Senior Note Document, or Security Document, or for the due
execution, legality, value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Senior Note Documents, or the Security
Documents or any other document or instrument furnished pursuant thereto or
for any failure of the Company to perform its obligations thereunder. The
Collateral Agent shall be under no obligation to the Secured Parties to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, statements made in, or conditions of, the Senior
Note Documents or the Security Documents or to inspect the property
(including the books and records) of the Company.
Section 4.3 Reliance by Collateral Agent. The Collateral Agent
shall be entitled to rely, and shall be fully protected and shall incur no
liability in acting and relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or
conversation reasonably believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel (including, without limitation,
counsel to the Company), independent accountants and other experts selected
by the Collateral Agent. Without limiting the generality of the foregoing,
the Collateral Agent may treat the payee of any Senior Secured Note as the
registered holder thereof until it receives notice or otherwise has actual
knowledge that such payee is no longer the registered holder of such Senior
Secured Note. Notwithstanding anything to the contrary contained herein or
in any Security Document, the Collateral Agent shall be fully justified in
failing or refusing to take action under this Agreement or the Security
Documents (including, without limitation, the exercise of any rights or
remedies under, or the entering into of any agreement amending, modifying,
supplementing, waiving any provision of, or the giving of consent pursuant
to, any of the Security Documents) unless it shall first receive
instructions of the Required Secured Parties as is contemplated by ss.5
hereof and it shall first be indemnified to its reasonable satisfaction by
the Secured Parties against any and all liability and expense which may be
incurred by it by reason of taking, continuing to take or refraining from
taking any such action. The Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and
the Security Documents in accordance with the provisions of ss.5.5 hereof
and in accordance with written instructions of the Required Secured Parties
pursuant to ss.5.3 hereof, and such instructions and any action taken or
failure to act pursuant thereto shall be binding upon all the Secured
Parties and all other holders from time to time of the Senior Secured
Notes.
Section 4.4 Knowledge or Notice of Default or Event of Default.
The Collateral Agent shall not be deemed to have actual, constructive,
direct or indirect knowledge or notice of the occurrence of any Default or
Event of Default unless and until the Collateral Agent has received written
notice from a Secured Party or the Company referring to the Note Agreement
describing such Default or Event of Default setting forth in reasonable
detail the facts and circumstances thereof and stating that the Collateral
Agent may rely on such notice without further inquiry. The Collateral Agent
shall have no obligation or duty prior to or after receiving any such
notice to inquire whether a Default or Event of Default has in fact
occurred and shall be entitled to rely, and shall be fully protected in so
relying, on any such notice furnished to it.
Section 4.5 Non-Reliance on Collateral Agent and Other Secured
Parties. Each Secured Party expressly acknowledges that, except as
expressly set forth in this Agreement, neither the Collateral Agent nor any
of the Collateral Agent's partners, officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties
to it and that no act by the Collateral Agent hereinafter taken, including
any review of the affairs of the Company, shall be deemed to constitute any
representation or warranty by the Collateral Agent to any Secured Party.
Each Secured Party represents that it has, independently and without
reliance upon the Collateral Agent or any other Secured Party, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and credit-worthiness of the Company and made
its own decision to enter into this Agreement and the Senior Note
Documents. Each Secured Party also represents that it will, independently
and without reliance upon the Collateral Agent or any other Secured Party,
and based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under the Senior Note Documents,
the Security Documents and this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, operations,
property, financial and other condition and credit-worthiness of the
Company. Except for notices, reports and other documents expressly required
to be furnished to the Secured Parties by the Collateral Agent hereunder,
the Collateral Agent shall not have any duty or responsibility to provide
the Secured Parties with any credit or other information concerning the
business, operations, property, financial and other condition or
credit-worthiness of the Company which may come into the possession of the
Collateral Agent or any of its partners, officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
Section 4.6 Indemnification. The Secured Parties agree to jointly
and severally indemnify the Collateral Agent in its capacity as such (to
the extent not reimbursed by the Company and without limiting any
obligation of the Company to do so), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at
any time (including, without limitation, at any time following the payment
of the Senior Secured Obligations) be imposed on, incurred by or asserted
against the Collateral Agent in any way relating or arising out of any of
the Senior Note Documents or the Security Documents or actions or omissions
of the Collateral Agent specifically required or permitted by this
Agreement or by written instructions of the Required Secured Parties
pursuant to ss.5.3 hereof (including, without limitation, costs incurred in
accordance with the provisions of ss.4.1); provided that no Secured Party
shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Collateral Agent's
gross negligence or willful misconduct. The agreements in this ss.4.6 shall
survive the payment of the Senior Secured Obligations.
Section 4.7 Collateral Agent in Its Individual Capacity. The
Collateral Agent and its Affiliates may generally engage in any kind of
business with the Company as though such Person was not the Collateral
Agent hereunder and without any duty to account therefor to the Secured
Parties.
Section 4.8 Successor Collateral Agent. (a) The Collateral Agent
may resign at any time upon sixty days' notice to the Secured Parties and
the Company and may be removed at any time, with or without cause, by the
Required Secured Parties by written notice delivered to the Company, the
Collateral Agent and the Secured Parties. After any resignation or removal
hereunder of the Collateral Agent, the provisions of this ss.4 shall
continue to inure to its benefit as to any actions taken or omitted to be
taken by it in connection with its agency hereunder while it was the
Collateral Agent under this Agreement and it shall be entitled to be paid
promptly when due any amounts owing to it pursuant to ss.4.6.
(b) Upon receiving notice of any such resignation or removal, a
successor Collateral Agent shall be appointed by the Required Secured
Parties; provided, however, that such successor Collateral Agent shall be
(i) a Person having a combined capital and surplus of at least $50,000,000;
and (ii) authorized under bylaw to assume the functions of the Collateral
Agent. If the appointment of such successor shall not have become effective
(as hereafter provided) within such sixty day period after the Collateral
Agent's resignation or upon removal of the Collateral Agent, then the
Collateral Agent may petition a court of competent jurisdiction for the
appointment of a successor Collateral Agent. Such court shall, after such
notice as it may deem proper, appoint a successor Collateral Agent meeting
the qualifications specified in this ss.4.8(b). The Secured Parties hereby
consent to such petition and appointment so long as such criteria are met.
(c) The resignation or removal of a Collateral Agent shall become
effective upon the execution and delivery of such documents or instruments
as are necessary to transfer the rights and obligations of the Collateral
Agent under the Security Documents, including, without limitation, the
delivery and recordation of all amendments, instruments, financing
statements, continuation statements and other documents necessary to
maintain the perfection of the security interests held by the Collateral
Agent under the Security Documents. Copies of each such document or
instrument shall be delivered to all Secured Parties. The appointment of a
successor Collateral Agent pursuant to this ss.4.8 shall become effective
upon the acceptance of the appointment as Collateral Agent hereunder by a
successor Collateral Agent. Upon such effective appointment, the successor
Collateral Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Collateral Agent and the
retiring Collateral Agent shall be discharged from its rights, powers,
privileges and duties under this Agreement and the other Security
Documents, but shall remain liable for its actions prior to and including
such date of discharge.
Section 5. Actions by the Collateral Agent.
Section 5.1 Duties and Obligations. The duties and obligations of
the Collateral Agent are only those set forth in this Agreement and in the
Security Documents.
Section 5.2 Notification of Default. If the Collateral Agent has
been notified in a writing conforming to the requirements of ss.4.4 by any
Secured Party that a Default or an Event of Default has occurred, the
Collateral Agent shall promptly furnish (and in any event no later than
three Business Days after receipt of such notice) to the Secured Parties a
copy of such written notice (a "Notice of Default"). The failure of any
Secured Party having knowledge of the occurrence of a Default or an Event
of Default of Default to notify the Collateral Agent or any Secured Party
of such occurrence, however, does not constitute a waiver of such Default
or Event of Default by the Secured Parties. The Notice of Default may
contain a recommendation of actions to be taken by the Secured Parties
and/or request instructions from the Secured Parties and shall specify the
date on which responses are due in order to be timely within ss.5.4 hereof.
Section 5.3 Exercise of Remedies. Except as otherwise provided in
ss.ss.5.5 and 5.7, the Collateral Agent shall take only such actions and
exercise only such remedies under the Security Documents as are approved in
written instructions delivered to the Collateral Agent and signed by the
Required Secured Parties. In the event that the Collateral Agent shall
determine in good faith that taking the actions specified in such
instructions is contrary to law, it may refrain (and shall be fully
protected in so refraining) from taking such action and shall immediately
give notice of such fact to each of the Secured Parties. In the event that
instructions received by the Collateral Agent are in its good faith
judgment ambiguous or conflict with other instructions received by the
Collateral Agent, the Collateral Agent (a) shall promptly notify the
Secured Parties of such ambiguity or conflict and request clarifying
instructions, and (b) may either (1) delay taking any such action or
exercising any such remedy pending the receipt of such clarifying
instructions (and shall be fully protected in so delaying) or (2) take such
actions as it is entitled under ss.5.5.
Section 5.4 Instructions from Secured Parties. If any Secured
Party does not respond in a timely manner to any notice (including, without
limitation, a Notice of Default) from the Collateral Agent or request for
instructions within the time period specified by the Collateral Agent in
such notice or request for instructions (which shall be a minimum of five
Business Days), the Senior Secured Obligations held by such Secured Party
which would otherwise be included in a determination of Required Secured
Parties shall not be included in the determination of Required Secured
Parties for purposes of such notice or request for instructions. Any action
taken or not taken without the vote of a Secured Party or Secured Parties
under this ss.5.4 shall nevertheless be binding on such Secured Party or
Secured Parties.
Section 5.5 Emergency Actions. If the Collateral Agent has asked
the Secured Parties for instruction and if the Required Secured Parties
have not yet responded to such request, the Collateral Agent shall be
authorized to take, but shall not be required to take and shall in no event
have any liability for the taking or the failure to take, such actions
(other than any action described or permitted under ss. 5.7 hereof) with
regard to a Default or Event of Default which the Collateral Agent, in good
faith, believes to be reasonably required to promote and protect the
interests of the Secured Parties and to maximize both the value of the
Collateral and the present value of the recovery by the Secured Parties on
the Senior Secured Obligations and shall give the Secured Parties
appropriate notice of such action; provided that once instructions with
respect to such request have been received by the Collateral Agent from the
Required Secured Parties, the actions of the Collateral Agent shall be
governed thereby and the Collateral Agent shall not take any further action
which would be contrary thereto.
Section 5.6 Changes to Security Documents. Any term of the
Security Documents may be amended, and the performance or observance by the
parties to a Security Document of any term of such Security Document may be
waived (either generally or in a particular instance and either
retroactively or prospectively) by the Collateral Agent only upon the
written consent of the Majority Secured Parties; provided that no amendment
to the Security Documents which directly or indirectly narrows the
description of the Collateral or the obligations being secured thereby,
changes the priority of payments to the Secured Parties or the Collateral
Agent under the Security Documents or amends the definitions of "Majority
Secured Parties" or "Required Secured Parties" may be made without the
written consent of all of the Secured Parties.
Section 5.7 Release of Collateral. Subject to ss.ss.5.3 and 5.5
hereof, the Collateral Agent may, when no Default or Event of Default is
continuing, release any Collateral under the Security Documents which is
permitted to be sold or disposed of by the Company pursuant to Section 9.5
of the Note Agreement and execute and deliver such releases as may be
necessary to terminate of record the Secured Parties' security interest in
such Collateral.
Section 5.8 Other Actions. The Collateral Agent shall have the
right to take such actions, or omit to take such actions, hereunder and
under the Security Documents not inconsistent with the written instructions
of the Required Secured Parties delivered pursuant to ss.5.3 hereof or the
terms of this Agreement, including actions the Collateral Agent deems
necessary or appropriate to perfect or continue the perfection of the Liens
on the Collateral for the benefit of the Secured Parties. Except as
otherwise provided by applicable law, the Collateral Agent shall have no
duty as to any Collateral, the collection or protection of the Collateral
or any income thereon (including any duty to ascertain or take action with
respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not the Collateral Agent has
or is deemed to have knowledge of such matters), nor as to the preservation
of rights against prior parties, nor as to the preservation of rights
pertaining to the Collateral beyond the safe custody of any Collateral in
the Collateral Agent's actual possession. Section 5.9 Cooperation. To the
extent that the exercise of the rights, powers and remedies of the
Collateral Agent in accordance with this Agreement requires that any action
be taken by any Secured Party, such Secured Party shall take such action
and cooperate with the Collateral Agent to ensure that the rights, powers
and remedies of all Secured Parties are exercised in full.
Section 5.10 Distribution of Proceeds. All amounts owing with
respect to the Senior Secured Obligations shall be secured by the
Collateral without distinction as to whether some Senior Secured
Obligations are then due and payable and other Senior Secured Obligations
are not then due and payable. Upon any realization upon the Collateral, the
Secured Parties agree that the proceeds thereof shall be applied, subject
to ▇▇.▇▇. 5.12 and 9.13 hereof, (a) first, to the amounts owing to the
Collateral Agent by the Company or the Secured Parties solely in its
capacity as Collateral Agent hereunder pursuant to this Agreement or the
Security Documents; (b) second, ratably to the payment of all amounts of
interest outstanding which constitute the Senior Secured Obligations
according to the aggregate amounts of such interest then owing to each
Secured Party; (c) third, ratably to all amounts of principal outstanding
under the Senior Secured Obligations according to the aggregate amounts of
such principal then owing to each Secured Party; (d) fourth, ratably to all
other amounts then due to the Secured Parties under the Note Agreement
(including fees and expenses), (e) fifth, the balance, if any, shall be
returned to the Company or such other Persons as are entitled thereto. Upon
the request of the Collateral Agent prior to any distribution under this
ss.5.10, each Secured Party shall provide to the Collateral Agent
certificates, in form and substance reasonably satisfactory to the
Collateral Agent, setting forth the respective amounts referred to in
clauses (b) through (d) above which each such Secured Party believes it is
entitled to receive.
Section 5.11 Authorized Investments. Any and all funds held by the
Collateral Agent in its capacity as Collateral Agent, whether pursuant to
any provision of this Agreement or any of the Security Documents, shall to
the extent feasible within a reasonable time be invested by the Collateral
Agent in Cash Equivalent Investments. Prior to making such investment or to
the extent it is not feasible to invest such funds in Cash Equivalent
Investments, the Collateral Agent shall hold any such funds in an interest
bearing account. Any interest earned on such funds shall be disbursed to
the Secured Parties in accordance with ss.5.10. The Collateral Agent shall
have no duty to place funds held and invested pursuant to this ss.5.11 in
investments which provide a maximum return. The Collateral Agent shall not
be responsible for any loss of any funds invested in accordance with this
ss.5.11.
Section 5.12 Lien Priority. Notwithstanding anything contained in
ss.5.10, the holders of Class A Notes and Delayed Closing Notes' Liens on
the Collateral shall be prior and superior to any Liens of holders of Class
B Notes therein, and the holders of the Class B Notes' Liens on the
Collateral shall be prior and superior to any Liens of CoreComm which
secured payment of amounts required to be made under Section 8.6 of the
CoreComm Asset Purchase Agreement. The holders of the Notes and CoreComm
Limited expressly acknowledge and agree to the foregoing terms of
subordination. The priorities established herein are applicable without
regard to (i) the date a loan, advance or extension of credit is made to
the Company or any other obligations are incurred by the Company, (ii) the
time or order of attachments, perfection, filing or recording of the Liens
or the time or order of filing of financing statements and other security
documents or the giving or failure to give notice of the acquisition of any
such Lien, and (iii) the rules of priority established under the Uniform
Commercial Code or other laws of a relevant state relating to the priority
of Liens or the provisions of the Bankruptcy Code or any state insolvency
laws.
Section 5.13 Closing Subordination. Notwithstanding anything
contained in ss.5.10 but subject to the immediately following sentence (a)
the obligations of the Company to the holders of Class A Notes and Delayed
Closing Notes (including any interest accruing on such Notes) shall first
be paid in full before any payment or distribution by the Company or from
its assets, whether in cash, securities or other property, shall be made to
the holders of Class B Notes on account of the Company's obligations to the
holders of Class B Notes and (b) the obligations of the Company to the
holders of the Class B Notes (including any interest accruing on such
Notes) shall first be paid in full before any payment or distribution by
the Company or from its assets, whether in cash, securities or other
property, shall be made to CoreComm Limited on account of payments required
to be made under Section 8.6 of the CoreComm Asset Purchase Agreement.
Notwithstanding the previous sentence, with respect to the proceeds of
Permitted Dispositions (a) the holders of the Class A Notes shall be paid
first, (b) the holders of the Class B Notes shall be paid second, (c) the
holders of the Delayed Closing Notes shall be paid third and (d) payment to
CoreComm Limited pursuant to Section 8.6 of the CoreComm Asset Purchase
Agreement shall be paid fourth. Any payment or distribution by the Company
or from its assets, whether in cash, securities or other property, which
would otherwise (but for these provisions) be payable or deliverable in
respect of the obligations of the Company to the holders of Class B Notes
(or the holders of Delayed Closing Notes, in the case of proceeds of
Permitted Dispositions) or to CoreComm Limited in respect of Section 8.6 of
the CoreComm Asset Purchase Agreement, shall be paid in accordance with the
priorities set forth in the two immediately preceding sentences.
Section 6. Miscellaneous
Section 6.1 Secured Parties; Other Collateral. The Secured Parties
agree that all of the provisions of this Agreement shall apply to any and
all properties, assets and rights of the Company in which the Collateral
Agent at any time acquires a security interest or Lien pursuant to the
Security Documents or the Note Agreement.
Section 6.2 Marshalling. The Collateral Agent shall not be
required to marshal any present or future security for (including, without
limitation, the Collateral), or guaranties of, the Senior Secured
Obligations or any of them, or to resort to such security or guaranties in
any particular order; and all of each of such Person's rights in respect of
such securities and guaranties shall be cumulative and in addition to all
other rights, however existing or arising. To the extent that they lawfully
may, the Secured Parties hereby agree that they will not invoke any law
relating to the marshalling of collateral which might cause delay in or
impede the enforcement of the Secured Parties' rights under the Security
Documents or under any other instrument evidencing any of the Senior
Secured Obligations or under which any of the Senior Secured Obligations is
outstanding or by which any of the Senior Secured Obligations is secured or
guaranteed.
Section 6.3 Consents, Amendments, Waivers. All amendments, waivers
or consents of any provision of this Agreement shall be effective only if
the same shall be in writing and signed by the Required Secured Parties and
the Company.
Section 6.4 Parties in Interest. All terms of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the
respective successors and assigns of the parties hereto, including, without
limitation, any future holder of the Senior Secured Notes; provided that no
Secured Party may assign or transfer its rights hereunder or under the
Security Documents without such assignees or transferees agreeing, by
executing an instrument in form and substance reasonably acceptable to the
Collateral Agent, to be bound by the terms of this Agreement as though
named herein.
Section 6.5 Counterparts. This Agreement and any amendment hereof
may be executed in several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one instrument. In
proving this Agreement it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom enforcement
is sought.
Section 6.6 Termination. Upon the payment in full of the Senior
Secured Obligations in accordance with their terms, this Agreement shall
terminate.
Section 6.7 Notices. Except as otherwise expressly provided
herein, all notices, consents and waivers and other communications made or
required to be given pursuant to this Agreement shall be in writing and
shall be delivered by hand, mailed by United States registered or certified
first-class mail, postage prepaid, or sent by overnight courier or by
telecopy, telegraph or telex and confirmed by letter, addressed as follows:
If to the Collateral Agent at:
PricewaterhouseCoopers LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or at such other address for notice as the Collateral Agent shall last have
furnished in writing to the Person giving the notice; and
If to any Noteholder, at: Such address specified in the
Note Purchase Agreement
If to the Company, at: USN Communication, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President- Finance
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
or at such other address for notice as such Secured Party or the Company
shall last have furnished in writing to the Person giving such notice.
Any such notice, consent, waiver or demand shall be deemed to have been
duly given or made and to have become effective (a) if delivered by hand to
a responsible officer of the party to which it is directed, at time of the
receipt thereof by such officer, (b) if sent by registered or certified
first class mail, postage prepaid, on the earlier of (i) the time of
receipt thereof if a Business Day or, if not a Business Day, the next
succeeding business day, or (ii) five Business Days after the posting
thereof, and (c) if sent by telecopy, telex or cable, at the time of
receipt thereof if a Business Day or, if not a Business Day, the next
succeeding Business Day. Notices given by telecopy shall be promptly
confirmed in writing sent by courier.
Section 6.8 Establishing Outstanding Amount of Senior Secured
Obligations. In order to establish what constitutes the Required Secured
Parties, the Collateral Agent may request from time to time, and the
Secured Parties agree to provide, certificates setting forth the amount of
Senior Secured Obligations held or represented by each Secured Party, which
certificates the Collateral Agent shall be entitled to rely upon.
Section 6.9 Governing Law. This Agreement shall be deemed to be a
contract under seal and shall for all purposes be governed by and construed
in accordance with the laws of the State of New York (without regard to New
York principles of conflicts of law other than Section 5-1401 of the New
York General Obligations Law).
IN WITNESS WHEREOF, the parties hereto have caused these presents
to be duly executed as an instrument by their authorized representatives as
of the date first written above.
PRICEWATERHOUSECOOPERS LLP,
as Collateral Agent
By /s/ ▇▇▇▇▇▇ ▇.▇. Kopucz
_______________________________
Name: ▇▇▇▇▇▇ ▇.▇. Kopucz
Title: Principal
▇▇▇▇▇▇▇ ▇▇▇▇▇ GLOBAL
ALLOCATION FUND, INC.
By /s/ ▇▇▇▇ ▇▇▇ ▇'▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇ ▇▇▇ ▇'▇▇▇▇▇▇▇
Title: V.P. MLAM, Authorized
Signatory
CORECOMM LIMITED
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
ACKNOWLEDGMENT
The undersigned hereby acknowledges and agrees to the terms of the
foregoing Agreement.
USN COMMUNICATIONS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title:
