SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated as of July 10, 1998, by and
among CELLULARVISION OF NEW YORK, L.P., a Delaware limited partnership (the
"Company"), CELLULARVISION USA, INC., a Delaware corporation ("Parent"), and
WINSTAR COMMUNICATIONS, INC., a corporation organized under the laws of the
State of Delaware ("Lender").
WHEREAS, the Company, Parent and the Lender have entered into (i) a Loan
Agreement (as may be amended from time to time, the "Loan Agreement") dated as
of the date hereof, providing for, among other things, the making of loans (the
"Loans" and the promissory notes issued by the Company to the Lender pursuant
thereto are herein referred to as the "Notes"), in the aggregate principal
amount of up to $12,500,000, and (ii) a Purchase Agreement (as defined in the
Loan Agreement) providing for the sale by the Company to the lender of the "850
MHz License" (as defined in the Purchase Agreement);
WHEREAS, the Company, Parent and the lender have entered into this
Agreement for the purpose of granting a security interest in the Collateral (as
defined in this Agreement) in order to secure the Obligations (as defined in
this Agreement) for the benefit of the Lender;
NOW, THEREFORE, in consideration of the premises, the terms and conditions
set forth herein and other good and valuable consideration, the receipt and
sufficiency to which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. GENERAL DEFINITIONS.
1.1 Defined Terms. When used herein, the following terms have the
respective meanings set forth below or set forth in the Section of this
Agreement following such term:
Accounts -- Section 2.1 (a)(i).
Affiliate -- has the meaning given such term in the Loan Agreement.
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Agreement -- this Security Agreement, as may be amended from time to time.
Collateral -- Section 2.1 (c).
Company -- the first paragraph of this Agreement.
Control -- means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
850 MHz License -- has the meaning given such term in the Purchase
Agreement.
Event of Default -- Section 3.1.
Fair Market Value -- at any time with respect to any Property, means the
sale value of such Property that would be realized in an arm's-length sale at
such time between an informed and willing buyer, and an informed and willing
seller, under no compulsion to buy or sell, respectively.
FCC -- Federal Communications Commission.
Insurance Policies -- insurance policies covering loss or damage to the
Collateral by fire, theft, explosion, spoilage and all other hazards and risks
against which the Company insures the Collateral.
Interests -- Section 2.1(b)(i).
Inventory -- Section 2.1 (a)(ii).
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Investments -- all investments, made in cash or by delivery of Property,
whether by acquisition of stock, indebtedness or other obligation or Security,
or by loan, advance or capital contribution, or otherwise.
Lender -- the first paragraph of this Agreement.
Lien -- any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and including but not limited to
the security interest or lien arising from a mortgage, assignment, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property owned by a
Person. For the purposes of this Agreement, a Person shall be deemed to be the
owner of any Property which it has acquired or holds subject to a conditional
sale agreement or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.
Loan Agreement - the first recital of this Agreement.
Loans -- the first recital of this Agreement.
Notes -- the first recital of this Agreement.
Obligations -- collectively, (i) the unpaid principal of, and interest
(including, without limitation, interest accruing at the default rate and
interest accruing at the applicable rate on or after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Company or Parent, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) on the
Notes and all other obligations and liabilities of the Company and Parent to the
Lender, whether direct or indirect, absolute or contingent, due or to become
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due, or now existing or hereafter incurred, which may arise under, out of, or in
connection with, the Loan Agreement, the Notes, this Agreement and any other
document made, delivered or given in connection therewith or herewith, whether
on account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees and disbursements of
counsel to the Lender) or otherwise and (ii) any and all payments due to the
Lender from the Company and Parent pursuant to the Purchase Agreement including,
without limitation, the "Expense Reimbursement" and the "Termination Fee" (as
each is defined therein).
Parent -- the first paragraph of this Agreement.
Person -- an individual, partnership, corporation, trust, limited liability
company, limited liability partnership or unincorporated association or
organization, joint venture or other entity, or a government or agency or
political subdivision thereof.
Pledged Securities -- Section 2.1 (b)(i).
Property -- any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible.
Purchase Agreement -- the first recital of this Agreement.
Security -- shall have the same meaning as set forth in Section 2(1) of the
Securities Act of 1933, as amended.
Security Interest -- shall mean the security interest in the Collateral
granted to the Lender hereunder.
Shares -- Section 2.1 (b)(i).
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Subsidiary -- at any time means a corporation of which the Parent owns,
directly or indirectly, more than fifty percent (50%) of all of the equity
Securities (and Securities convertible into equity Securities) and Voting Stock.
Voting Stock -- means capital stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
1.2 Other Terms. All other terms contained in this Agreement shall have,
when the context so indicates, the meanings provided for by the Uniform
Commercial Code of the State of New York to the extent the same are used or
defined therein.
2. COLLATERAL.
2.1 Security Interest in the Collateral. (a) To secure the prompt payment
and performance of the Obligations when and as due, the Company and Parent each
hereby grants to the Lender a continuing security interest in and to all
Property of each of the Company and Parent, including but not limited to, the
Property specified below in this Section 2.1 (a), whether now owned or existing
or hereafter acquired or arising and wheresoever located:
(i) all accounts, accounts receivable, contract rights related to or
arising from any account, notes, documents, chattel paper, instrument
acceptances, drafts or other forms of obligations and receivables arising
from the sale or lease of inventory or rendition of services in the
ordinary course of business or otherwise (collectively, the "Accounts");
(ii) all inventory (whether held for sale or lease or to be furnished
under contracts of service), raw materials, work in process, and materials
used or consumed in the conduct of business, including all goods, inventory
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and merchandise returned by or reclaimed or repossessed from customers
wherever such goods, inventory and merchandise are located (collectively,
the "Inventory");
(iii) all machinery, equipment, fixtures, furnishings, furniture,
appliances and motor vehicles (whether certificated or not);
(iv) all general intangibles, including but not limited to all
patents, patent applications, copyrights, trademarks, trade names,
licenses, permits, deposit accounts, contract rights, royalty rights, tax
refunds, unearned insurance premium refunds, insurance or condemnation
proceeds (whether or not representing proceeds of other Collateral
described in this Section 2.1 (a)), choses and rights-in-action, beneficial
interests in any trust, joint venture or partnership rights, warranty
rights, certificates, rights under consulting, service, non-compete or
other similar agreements, blueprints and drawings, but not including
licenses granted to the Company or Parent by the FCC;
(v) all moneys, investment property and Property of any kind, now or
at any time or times hereafter, in the possession or under the control of
the Lender or a bailee of the Lender;
(vi) all proceeds from the sale or other disposition of licenses
granted to the Company or Parent by the FCC;
(vii) all accessions to, substitutions for and all replacements,
products and proceeds of the Property described in clauses 2.1(a) (i),
(ii), (iii), (iv), (v) and (vi) above, including, without limitation,
proceeds of the Insurance Policies; and
(viii) all books and records (including, without limitation, customer
lists, credit files, computer programs, printouts, and other computer
materials and records) pertaining to any of the Property described in
clauses 2.1 (a) (i), (ii), (iii), (iv), (v), (vi) and (vii) above.
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(b) To secure the prompt payment and performance of the Obligations when
and as due, Parent hereby grants to the Lender a continuing security interest in
and to all Property of the Parent specified below in this Section 2.1 (b)
whether now owned or existing or hereafter acquired or arising and wheresoever
located:
(i) (A) the shares of stock described in Exhibit A hereto (the
"Shares"), which shares represent one hundred percent (100%) of the issued
and outstanding shares of capital stock of CellularVision Capital Corp. and
all securities convertible or exchangeable into such capital stock, (B) all
limited partnership interests in the Company (the "Interests") (the Shares
and the Interests being referred to herein collectively as the "Pledged
Securities"), (C) the certificates and instruments representing the Pledged
Securities and (D) subject to Section 2.5 hereof, all dividends, cash,
securities (including, without limitation, any securities issued in
connection with stock dividends or stock splits), instruments and other
Property from time to time paid, payable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Securities;
(ii) all substitutions for and all replacements, products and proceeds
of the Property described in clause 2.1 (b)(i) above; and
(iii) all books and records pertaining to any of the Property
described in clauses 2.1 (b)(i) and (ii) above.
(c) All of the Property described in these Sections 2.1(a) and (b) and all
other Property which shall, from time to time, secure the Obligations are herein
collectively referred to as the "Collateral."
2.2 Representations and Warranties. The Company and Parent each hereby
represents and warrants that:
(a) Except for the Pledged Securities owned by Parent, all other Collateral
is owned by the Company or Parent. Parent is the sole owner of the Pledged
Securities.
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No other Person has any right, title, interest, claim, or Lien therein,
thereon, or thereto to the Collateral other than Liens permitted to
exist by the Loan Agreement.
(b) It has executed and will file and will execute and cause to be filed
Uniform Commercial Code financing statements hereof in the appropriate public
offices of the states where the Collateral is presently located, such that the
Lender, upon such filings, will have a perfected first priority Security
Interest in such of the Collateral as to which perfection is obtained by such
uniform commercial code filings.
(c) the Shares constitute one hundred percent (100%) of the issued and
outstanding shares of capital stock of CellularVision Capital, Inc. and the
Interests constitute one hundred percent (100%) of the issued and outstanding
limited partnership interests in the Company, and there exist no outstanding
options, warrants, convertible securities or other rights, contingent or
absolute, to acquire such capital stock or limited partnership interests.
(d) It has not, during the preceding five (5) years, been known by or used
any other corporate, fictitious or trade names. It has not, during the preceding
five (5) years, been the surviving corporation of a merger or consolidation or
acquired all or substantially all of the assets of any Person.
(e) The chief executive office of the Company and Parent is located at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(f) The tangible Collateral of the Company and Parent is now located at the
locations set forth in Exhibit B hereto.
2.3 Covenants. The Company and Parent each hereby covenants as follows:
(a) It shall keep the Collateral free of all Liens and the claims of all
Persons, except Liens permitted to exist on the Property by the Loan Agreement.
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(b) It shall pay and discharge when due all taxes, levies, and other
charges upon the Collateral and upon the goods evidenced by any documents
constituting Collateral and shall indemnify and defend the Lender against and
save it harmless from all liabilities arising from such taxes, levies and other
charges. This indemnity shall include reasonable attorneys' fees and legal
expenses.
(c) Except as allowed or permitted by the Loan Agreement, it shall not
sell, lease, transfer or otherwise dispose of any Collateral, and shall not move
any tangible Collateral from its location other than the sale and removal of
inventory in the ordinary course of business, without the written consent of the
Lender.
(d) It shall give the Lender written notice (and, in any event, no later
than thirty (30) days after the date thereof) of (i) any change in its name,
chief executive office or the office where it maintains its books and records
pertaining to Accounts and (ii) the movement or location of any Collateral to or
at, as the case may be, a location other than as set forth in Exhibit B hereto.
2.4 Further Assurances. The Company and Parent will, from time to time and
at its own expense, promptly execute, acknowledge, witness and deliver and file
and record, as appropriate, such specific and further assignments of all or any
portion of the Collateral and such other documents or instruments, and shall
take or cause to be taken such other action as the Lender may reasonably request
for the perfection against it and all other Persons whomsoever of the Security
Interest, or for the continuation and protection thereof, and promptly furnish
to the Lender evidence satisfactory to the Lender of such action. Without
limiting the generality of the foregoing, the Company and Parent shall execute,
acknowledge, witness and/or deliver such financing and continuation statements,
instruments, documents, notices and additional security agreements, make such
notations on its records and take such other action as may be requested by the
Lender. Unless prohibited by law, the Company and parent each hereby authorizes
the Lender to execute and file or record, if necessary, any such financing
statement, instrument, document, notice and agreement on its behalf, as
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applicable. The parties agree that a carbon, photographic or other reproduction
of this Agreement shall be sufficient as a financing statement.
2.5 Voting Rights, Dividends, etc. with respect to Pledged Securities.
(a) So long as no Event of Default shall have occurred and be continuing,
Parent shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Pledged Securities or any part thereof for any purpose
not prohibited by the terms of this Agreement, including, without limitation,
the right to have the Pledged Securities registered in the name of Parent, to
the extent the Pledged Securities may be so registered.
(b) Parent hereby delivers the certificates evidencing the Pledged
Securities to the Lender. Upon the occurrence and during the continuance of an
Event of Default, at the option of the Lender, all rights of Parent to exercise
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 2.5(a) hereof shall cease, and all such rights
shall thereupon become vested in the Lender, who shall thereupon have the sole
right to exercise such voting and other consensual rights.
(c) So long as no Event of Default shall have occurred and be continuing,
subject to Section 2.5(f) hereof and except as otherwise provided in Section
2.5(d) hereof, Parent shall be entitled to receive and retain any dividends,
cash, securities, instruments and other Property from time to time paid, payable
or otherwise distributed in respect to the Pledged Securities.
(d) Upon the occurrence and during the continuance of an Event of Default,
all rights of Parent to receive dividends, cash, securities, instruments and
other Property that it would otherwise be authorized to receive and retain
pursuant to Section 2.5(c) hereof shall cease and all rights to dividends, cash,
securities, instruments and other Property shall thereupon be vested in the
Lender, who shall thereupon have the sole right to receive and hold as
Collateral such dividends, cash, securities, instruments and other Property. All
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dividends, cash, securities, instruments and other Property that are received by
Parent in contravention of the provisions of this Section 2.5(d) shall be
received in trust for the benefit of the Lender, shall be segregated from other
Property or funds of Parent and shall be forthwith delivered to the Lender, as
Collateral in the same form as so received (with any necessary endorsement and
documents of transfer).
(e) Parent hereby irrevocably appoints the Lender, upon the occurrence and
during the continuance of an Event of Default, as its proxy holder with respect
to the Pledged Securities with full power and authority, pursuant to the written
instructions of the Lender, to vote the Pledged Securities and otherwise act
with respect to the Pledged Securities on behalf of Parent. This proxy is
coupled with an interest and shall be irrevocable for so long as any of the
Obligations remain in existence.
(f) Parent agrees that it will cause the issuers of the Pledged Securities
not to issue any capital stock or limited partnership interests or options,
warrants, convertible securities or other rights, contingent or absolute, to
acquire any capital stock, whether in addition to, by stock dividend or other
distribution upon, or in substitution for, the Pledged Securities, or otherwise,
unless such stock, instruments or securities are forthwith pledged as herein
provided.
2.6 Insurance. All insurers under all Insurance Policies will be directed
to pay all proceeds payable thereunder in respect of the Collateral directly to
the Lender to be held as Collateral. The Company and Parent each irrevocably
makes, constitutes and appoints the Lender (and all Persons designated by the
Lender) as its true and lawful attorney and agent-in-fact for the purposes of
making, settling and adjusting all claims under all Insurance Policies,
endorsing its name on any check, draft, instrument or other item of payment for
the proceeds of the Insurance Policies and for making all determinations and
decisions with respect thereto to the extent the Insurance Policies relate to
the Collateral, in each case, as directed pursuant to the written instructions
of the Lender. In the event that at any time or times hereafter any of the
Insurance Policies required above is not obtained or maintained, or any Person
fails to perform any obligation or pay any premium in whole or in part relating
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thereto, then the Lender may obtain and maintain such Insurance Policies, pay
such premiums and take any other action with respect thereto as the Lender
determines in its sole discretion. All sums so disbursed by the Lender,
including, without limitation, attorneys' fees, court costs, expenses and other
charges relating thereto, shall be additional Obligations hereunder, payable on
demand and secured by the Collateral.
2.7 Protection of Collateral; Reimbursement. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining, and shipping the
Collateral, and any and all excise, property, sales, and use taxes imposed by
any state, federal, or local authority on any of the Collateral or in respect of
the sale thereof shall be borne and paid by the Company and Parent, as
applicable. If the Company or Parent, as applicable, fails to pay promptly any
portion thereof when due, the Lender may pay the same. All sums so disbursed by
the Lender, including, without limitation, attorneys' fees, court costs,
expenses and other charges relating thereto, shall be additional Obligations
hereunder, payable on demand and secured by the Collateral. The Lender shall not
be liable or responsible in any way for the safekeeping of any of the Collateral
or for any loss or damage thereto or for any diminution in the value thereof, or
for any act or default of any warehouseman, carrier, forwarding agency, or other
Person whomsoever, but the same shall be at the Company's and Parent's sole
risk.
3. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT.
3.1 Events of Default. An "Event of Default" under this Agreement shall
exist if at any time an Event of Default (as defined in the Loan Agreement)
shall exist.
3.2 Remedies. The Lender shall have the following rights and remedies upon
the occurrence of an Event of Default:
(a) all of the rights and remedies of a secured party under the Uniform
Commercial Code as in effect in the State of New York, and all other legal and
equitable rights to which the Lender may be entitled under this Agreement, or
under other applicable law, including the right to have a receiver appointed for
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all of the property of the Company or Parent, all of which rights and remedies
shall be cumulative, and none of which shall be exclusive;
(b) the right to take immediate possession of the Collateral, and (i)
require the Company to assemble each item of Collateral, at the Company's
expense, and make it available to the Lender at a place to be designated by the
Lender which is reasonably convenient to both parties, and (ii) enter any of the
premises wherever the Collateral shall be located, with or without force or
process of law, and to keep and store the same on said premises until sold (and
if said premises be the property of a Person executing this Agreement, such
Person agrees not to charge the Lender for storage thereof for a period of at
least ninety (90) days after sale or disposition of said Collateral);
(c) the right to sell or otherwise to dispose of all or any Collateral in
its then condition, or after any further manufacturing or processing thereof, at
public or private sale or sales, with such notice as may be required by law, in
lots or in bulk, for cash or on credit (without any assumption of credit risk),
or any combination thereof, and at such locations as may be stated in such
notice, all as the Lender, in its sole discretion, may deem advisable (the
Company and Parent each hereby agreeing that ten (10) days' prior written notice
to any of them of any public or private sale or other disposition of Collateral
shall be reasonable notice thereof);
(d) the right to conduct any such sales on the premises of any Person
executing this Agreement, without charge therefor, and to adjourn such sales
from time to time in accordance with applicable law;
(e) a license or other right to use, without charge, the labels, patents,
copyrights, rights of use of any name, trade secrets, trade names, trademarks
and advertising matter, or any property of a similar nature, as it pertains to
the Collateral, in advertising for sale and selling any Collateral, and the
rights under all licenses and all franchise agreements; and
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(f) the right to proceed by a suit or suits at law or in equity to
foreclose the security interest granted under this Agreement and to sell the
Collateral, or any portion thereof, pursuant to a judgment or decree of a court
or courts of competent jurisdiction.
3.3 Pledged Securities.
(a) Parent agrees that the Lender shall not be required to register or
qualify any of the Pledged Securities under any applicable state or federal
securities laws in connection with any sale thereof if such sale is effected in
a manner that complies with all applicable federal and state securities laws. In
effecting any such sale, the Lender shall be authorized (if it deems it
advisable to do so) to restrict the prospective bidders or purchasers to three
(3) Persons, who will represent and agree that they are purchasing the Pledged
Securities for their own account for investment and not with a view to the
distribution or sale thereof. In the event that any such Pledged Securities are
sold at private sale after the Lender has sought bids by the method approved in
the preceding sentence, so long as one of such bids was accepted, Parent agrees
that
(i) the sale shall be deemed to be commercially reasonable in all
respects,
(ii) Parent shall not be entitled to a credit against the Obligations
in an amount in excess of the purchase price, and
(iii) the Lender shall not incur any liability or responsibility to
Parent in connection therewith, notwithstanding the possibility that a
substantially higher price might have been realized at a public sale.
(b) Parent recognizes that a ready market may not exist for the Pledged
Securities if it is not regularly traded on a recognized securities exchange,
and that a sale by the Lender of any of the Pledged Securities for an amount
substantially less than a pro rata share of the Fair Market Value of the
issuer's assets minus the amount of such issuer's liabilities may be
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commercially reasonable in view of difficulties that may be encountered in
attempting to sell Pledged Securities that is privately traded.
(c) Upon the occurrence of an Event of Default and the sale of the Pledged
Securities, the Company and Parent will fully cooperate with the Lender to
comply with the rules and regulations of the FCC and other requirements of law
to effectuate such sale, including the giving of requisite notices to the FCC
and the solicitation of consents therefrom.
3.4 Purchase by the Lender. In the event that the Lender shall purchase all
or any portion of the Collateral at any such sale, the Lender may elect to apply
a portion of the Obligations owing to it in satisfaction of part of the purchase
price of all or such portion of the Collateral so purchased. Such part of the
purchase price shall be equal to the amount that would be distributed to the
Lender pursuant to Section 3.5 as a result of such purchase if the Lender had
paid such purchase price entirely in cash.
3.5 Application of Proceeds. All proceeds realized by the Lender from any
sale or other realization on the Collateral shall be applied to the Obligations
as follows:
First, to the payment of reasonable costs and expenses of foreclosure
or suit, if any, and of such sale or other exercise of rights, and of all
proper expenses, liabilities and advances, including legal expenses and
attorneys' fees (including, without limitation, the allocated costs of
staff counsel of the Lender), incurred or made hereunder by the Lender, or
any other amounts then due but unpaid to the Lender and of all taxes,
assessments or liens superior to the Security Interest, except any taxes,
assessments or superior liens subject to which said sale or other
disposition may have been made;
Second, to the payment of unpaid principal of the Obligations;
Third, to the payment of unpaid interest on the principal of the
Obligations;
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Fourth, to the payment of unpaid fees with respect to the Obligations
and all other amounts owing under the Loan Agreement to the Persons
entitled to payment thereunder; and
Fifth, to the payment of the surplus, if any, arising from an exercise
of rights with respect to the Collateral, to the Company or Parent, as
applicable, their successors and assigns, or to whomsoever may be lawfully
entitled to receive the same.
The Company and Parent shall remain liable hereunder for payment of any
deficiency on the Obligations after application of such proceeds.
3.6 Remedies Cumulative. All covenants, conditions, provisions, warranties,
guaranties, indemnities and other undertakings contained in this Agreement, or
in any document referred to herein or contained in any agreement supplementary
hereto, shall be deemed cumulative to and not in derogation or substitution of
any of the terms, covenants, conditions or agreements herein contained. The
failure or delay of the Lender to exercise or enforce any rights, powers or
remedies hereunder or under any of the aforesaid agreements or other documents
shall not operate as a waiver of such rights, powers and remedies, but all such
rights, powers and remedies shall continue in full force and effect until all of
the Obligations shall have been fully satisfied, and all rights, powers and
remedies herein provided for are cumulative and none is exclusive. No single or
partial exercise by the Lender of any right, power or remedy under this
Agreement shall preclude the exercise of any other right, power or remedy.
4. APPOINTMENT OF LENDER AS LAWFUL ATTORNEY.
Upon the occurrence and during the continuance of an Event of Default, the
Company and Parent each irrevocably designates, makes, constitutes and appoints
the Lender (and all Persons designated by Lender) as their respective true and
lawful attorney (and agent-in-fact); and the Lender, or the Lender's agent,
without notice to any of them, and at such time or times as the Lender or said
agent, in its sole discretion, may determine in its or the Bank's name, at its
option, may (i) demand payment of the Accounts; (ii) enforce payment of the
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Accounts, by legal proceedings or otherwise; (iii) exercise all of its rights
and remedies with respect to the collection of the Accounts and any other
Collateral; (iv) settle, adjust, compromise, extend or renew the Accounts; (v)
settle, adjust or compromise any legal proceedings brought to collect the
Accounts; (vi) if permitted by applicable law, sell or assign the Accounts and
other Collateral upon such terms, for such amounts and at such time or times as
the Lender deems advisable; (vii) discharge and release the Accounts and any
other Collateral; (viii) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (ix) prepare, file and sign its name on a
proof of claim in bankruptcy or similar document against any account debtor; (x)
prepare, file and sign its name on any notice of lien, assignment or
satisfaction of lien or similar document in connection with the Accounts; (xi)
do all acts and things necessary, in the Bank's sole discretion, to fulfill its
obligations under this Agreement; (xii) endorse its name upon any of the items
of payment or proceeds relating to any Collateral and deposit the same to the
account of the Lender on account of the Obligations; (xiii) endorse its name
upon any chattel paper, document, instrument, invoice, freight ▇▇▇▇, ▇▇▇▇ of
lading or similar document or agreement relating to the Accounts, Inventory or
any other Collateral; (xiv) use its stationery and sign its name to
verifications of the Accounts and notices thereof to account debtors; (xv) use
the information recorded on or contained in any data processing equipment and
computer hardware and software relating to the Accounts, Inventory and any other
Collateral to which it has access; and (xvi) exercise any and all of its rights
under each contract to which it is a party or under which it has rights
(including the right to enter into possession of and use any and all Property
leased or licensed it, as lessee or licensee, the right to use any or all of the
facilities made available to it and the right to make all waivers and
agreements, to give all notices, consents and releases, to take all action upon
the happening of any default giving rise to a right in favor of it under any of
such contracts, and to do any and all other things whatsoever which it is or may
become entitled to do under any of such contracts).
5. MISCELLANEOUS.
5.1 Modification of Agreement. This Agreement may not be modified, altered
or amended, and no provision may be waived, except by an agreement in writing
signed by the party against whom enforcement would be sought.
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5.2 Expenses and Indemnity. Each Person, except the Lender, executing this
Agreement will upon demand pay to the Lender the amount of any and all
reasonable expenses, including the fees and expenses of its counsel and of any
experts and agents, which it may incur in connection with
(a) the preparation, execution, or administration of this Agreement, or any
amendments, or proposed amendments, hereto,
(b) the custody or preservation of, or the sale of, collection from, or
other realization upon, any of the Collateral,
(c) the exercise or enforcement of any of its rights or responsibilities
hereunder, or
(d) the failure by each Person, except the Lender, executing this Agreement
to perform or observe any of the provisions hereof.
In addition, each Person, except the Lender, executing this Agreement
agrees to indemnify, and hold harmless, the Lender, on demand, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, reasonable costs (including the allocated costs to it of
in-house legal services) and fees, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against it
in any way relating to or arising out of this Agreement or any action taken or
omitted by it under this Agreement, provided that no such Person shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, fees, expenses or disbursements resulting from
the Lender's gross negligence, willful misconduct or bad faith.
Any amounts payable under this Section 5.2, and any other amounts that
become Obligations pursuant to any provision of this Agreement, shall bear
interest from the date such amounts shall be paid by the Lender at the Default
Rate provided in the Loan Agreement on demand, and shall constitute additional
Obligations secured by the Collateral.
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5.3 Waiver and Estoppel.
(a) The Company and Parent each agrees, to the extent it may lawfully do
so, that it will not at any time in any manner whatsoever claim or take the
benefit or advantage of, any appraisement, valuation, stay, extension,
moratorium, turnover or redemption law, or any law permitting it to direct the
order in which the Collateral shall be sold, now or at any time hereafter in
force, which may delay, prevent or otherwise affect the performance or
enforcement of this Agreement, and hereby waives all benefit or advantage of all
such laws.
(b) The Company and Parent each to the extent it may lawfully do so, on
behalf of itself and all who may claim through or under it, including without
limitation any and all subsequent creditors, vendees, assignees and lienors,
waives and releases all rights to demand or to have any marshalling of the
Collateral upon any sale, whether made under any power of sale granted herein or
pursuant to judicial proceedings or upon any foreclosure or any enforcement of
this Agreement and any documents or instruments executed in connection
therewith.
(c) The Company and Parent each waives, to the extent it may lawfully do
so, presentment, demand, protest and any notice of any kind or nature including,
without limitation, notice of default, notice of any assertion of any right by
the Lender or notice of action or inaction on the part of the Lender or any
other Person (except notices explicitly required hereunder) in connection with
this Agreement or the Collateral.
(d) The Company and Parent each waives, to the extent it may lawfully do
so, any right to require the Lender to proceed against any Person, to exhaust
any other collateral or security interests or guaranties, to pursue any other
remedy, or to pursue any of such rights in any particular order or manner, and
waives any defenses arising by reason of any disability or other defense of any
other Person. The Lender may act against the Company or Parent to enforce their
respective obligations and liabilities hereunder, whether or not any action is
brought against the others or any other Person and whether or not any other
Person is joined in any such action or actions.
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5.4 Termination. This Agreement shall terminate when all the Obligations
have been fully and indefeasibly paid and performed, provided that each of the
Company and Parent shall be solvent immediately after satisfaction of the
Obligations. If any of them shall not be solvent, this Agreement shall not
terminate and the Lender shall take no action under this Section 5.4 until 91
days after the satisfaction of the Obligations.
Upon such termination, the Lender shall reassign and redeliver (or cause to be
reassigned and redelivered) to the Company and Parent, as applicable, or to such
Person or Persons as the Company and Parent, as applicable, shall designate or
to whomever may be lawfully entitled thereto, against receipt, such of the
Collateral (if any) as shall not have been sold or otherwise applied by the
Lender pursuant to the terms hereof and shall still be held by it hereunder,
together with appropriate instruments of reassignment and release. Any such
reassignment shall be without recourse upon or warranty by the Lender and at the
expense of the Company and Parent, as applicable.
5.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH NEW YORK LAW.
5.6 Severability. Wherever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective. If any provisions of this
Agreement or any Lien or other right of the Lender hereunder shall be held to be
invalid, illegal or unenforceable under applicable law, such invalidity,
illegality or unenforceability shall not affect any other provision herein or
any Lien or other right granted hereby.
5.7 Section Headings. The section headings contained in this Agreement
appear as a matter of convenience only, do not constitute a part of this
Agreement and shall not affect the construction hereof.
5.8 Restoration of Rights and Remedies. If the Lender shall have instituted
any proceeding to enforce any right or remedy under this Agreement and such
proceeding shall have been discontinued or abandoned for any reason, or shall
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have been determined adversely to the Lender, then and in every such case the
Lender, as the case may be, and the Company and Parent, shall, except as may be
limited or affected by any determination in such proceeding, be restored
severally and respectively to their respective former positions hereunder, and
thereafter all rights and remedies of the Lender, and the rights and remedies of
the Company and Parent, shall continue as though no such proceeding had been
instituted.
5.9 Duplicate Originals; Execution in Counterpart. Two or more duplicate
originals of this Agreement may be signed by the parties, each of which shall be
an original but all of which together shall constitute one and the same
instrument. This Agreement may be executed in one or more counterparts and shall
be effective when at least one counterpart shall have been executed by each
party hereto, and each set of counterparts which, collectively, show execution
by each party hereto shall constitute one duplicate original.
5.10 Notice. Except as otherwise provided herein, any notice required
hereunder shall be in writing, and shall be deemed to have been validly served,
given or delivered either when actually received by the addressee or upon
deposit in the United States mail, first class, with proper postage prepaid, and
addressed to the party to be notified as follows:
(a) if to the Company and Parent, at:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
With a copy of any notice relating to an Event of Default to:
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(b) if to Lender, at:
WinStar Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ -- ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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With a copy of any notice relating to an Event of Default to:
▇▇▇▇▇▇▇▇ Mollen & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
or to such other address as each party may designate by like notice given in
accordance with this Section 5.10. Failure to provide a copy of a notice to
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ will not otherwise affect the validity or effectiveness
of such notice.
5.11 Waiver of Trial by Jury; Set-off or Counterclaim. The Company and
Parent each waives trial by jury, and the right to interpose any set-off or
counterclaim of any nature or description in any litigation in any court with
respect to, in connection with, or arising out of, this Agreement or any
instrument or document delivered pursuant hereto or the validity,
interpretation, collection or enforcement hereof.
5.12 Certain Refundings. The provisions of this Agreement shall continue to
apply to amounts outstanding under the Loan Agreement following any repayment
and reborrowing of the Loans contemplated by the Loan Agreement.
5.13 Certain Bankruptcy Matters. The obligations of the parties hereto
shall not be affected by the bankruptcy or insolvency of the Company or Parent
or by the invalidity, disallowance or subordination of any of the Obligations
under Section 548 of the Federal Bankruptcy Code, under the Uniform Fraudulent
Conveyance Act as in effect in any state or under any similar statute or rule of
law (whether asserted by a creditor, a trustee in bankruptcy or a debtor in
possession).
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year specified at the beginning hereof.
CELLULARVISION OF NEW YORK, L.P.
By: CELLULARVISION CAPITAL CORP.,
General Partner
By:_______________________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
CELLULARVISION USA, INC.
By:_______________________________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Chairman & Chief Executive Officer
WINSTAR COMMUNICATIONS, INC.
By:_______________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
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