EXHIBIT 10.1(b)
GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT (as amended, supplemented
or otherwise modified from time to time, this "Agreement"), dated as of March
25, 2004, made by RURAL CELLULAR CORPORATION, a Minnesota corporation (the
"Borrower"), and each of the subsidiaries of the Borrower that are signatories
hereto (such subsidiaries together with any other subsidiary that may become a
party hereto as provided herein, the "Guarantors"; the Borrower and the
Guarantors being referred to collectively herein as the "Pledgors"), in favor of
▇▇▇▇▇▇ COMMERCIAL PAPER INC., as Administrative Agent (in such capacity,
together with its successors, the "Administrative Agent") for the Secured
Parties (as defined herein).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement dated as of March
25, 2004 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and among the Borrower, the banks and other financial
institutions or entities (the "Lenders") from time to time a party thereto, the
Administrative Agent and Bank of America, N.A., as Documentation Agent, the
Lenders have severally agreed to make Loans to the Borrower and participate in
Letters of Credit upon the terms and subject to the conditions set forth
therein;
WHEREAS, the Borrower is a member of an affiliated group of
companies that includes each other Pledgor;
WHEREAS, the proceeds of the Loans and Letters of Credit under
the Credit Agreement may be used in part to enable the Borrower to make valuable
transfers to one or more of the other Pledgors in connection with the operation
of their respective businesses;
WHEREAS, the Borrower and the other Pledgors are engaged in
related businesses, and each Pledgor will derive substantial direct and indirect
benefit from the making of the Loans and the issuing of Letters of Credit under
the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation of the
Lenders to make their respective Loans to the Borrower and participate in
Letters of Credit under the Credit Agreement that the Pledgors shall have
executed and delivered this Agreement to the Administrative Agent, for the
ratable benefit of the Secured Parties;
NOW, THEREFORE, in consideration of the premises and to induce
the Administrative Agent and the other Lenders to enter into the Credit
Agreement and to induce the Lenders to make the Loans to the Borrower and
participate in Letters of Credit thereunder and for other good and valuable
consideration the receipt and sufficiency of
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which are hereby acknowledged, each Pledgor hereby agrees with the
Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1
DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
UCC on the date hereof are used herein as so defined: Accounts, Certificated
Security, Chattel Paper, Commercial Tort Claims, Commodity Account, Deposit
Account, Documents, Electronic Chattel Paper, Equipment, Fixtures, General
Intangibles, Instruments, Inventory, Letter-of-Credit Rights, Proceeds,
Promissory Note, Securities Account and Supporting Obligations.
(b) The following terms shall have the following
meanings:
"Account Agent" has the meaning assigned to such term in the
Intercreditor Agreement.
"Account Institution" means (i) with respect to any Controlled
Account that is a Deposit Account, the bank at which such account is held and
(ii) with respect to any Controlled Account that is a Securities Account, the
securities intermediary for such Securities Account.
"Alexandria Regulatory Reserve Account" means any and all
segregated Deposit Accounts maintained at KeyBank National Association in the
name of Alexandria Indemnity Corporation Loss Reserve Account or any and all
replacements of such accounts, in each case to the extent set up and maintained
by Alexandria Indemnity solely for the purpose of satisfying any regulatory
reserve requirement.
"Administrative Agent" has the meaning assigned to such term
in the preamble to this Agreement.
"Agreement" has the meaning assigned to such term in the
preamble to this Agreement.
"Associated Operations and Liabilities" means business
operations and liabilities associated with the acquisition of a Restricted PCS
Block C or F License or control of the holder of a Restricted PCS Block C or F
License by TLA Spectrum.
"Borrower" has the meaning assigned to such term in the
preamble to this Agreement.
"Borrower Obligations" means, collectively, each Obligation of
the Borrower to any Secured Party.
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"Collateral" has the meaning assigned to such term in Section
3.
"Collateral Account" means any collateral account established
by the Administrative Agent as provided in Section 6.1 or 6.4.
"Contracts" means all construction contracts, subscriber
contracts, customer service agreements, management agreements, rights of way,
easements, pole attachment agreements, transmission capacity agreements, public
utility contracts, and other agreements to which the Pledgor is a party, whether
now existing or hereafter arising, but excluding any Contract which is Excluded
Property.
"Control Event" means either (i) an Event of Default described
in Article VII (a), (b), (d) (with respect to Section 6.12 of the Credit
Agreement only) or (h) through (j) of the Credit Agreement has occurred and is
continuing or (ii) the Loans have become due and payable prior to the Maturity
Date as a result of any Event of Default pursuant to Article VII.
"Controlled Accounts" means all Included Deposit Accounts and
all Same-Institution Accounts.
"Copyright Licenses" means any written agreement providing for
the grant by or to any Pledgor of any right under any Copyright (including,
without limitation, those registered copyrights listed on Schedule 4.7).
"Copyrights" means (i) all copyrights arising under the laws
of the United States, whether registered or unregistered and whether published
or unpublished (including, without limitation, those listed on Schedule 4.7),
all registrations and recordings thereof, and all applications in connection
therewith, including, without limitation, all registrations, recordings and
applications in the United States Copyright Office, and (ii) the right to obtain
all renewals thereof.
"Credit Agreement" has the meaning assigned to such term in
the recitals to this Agreement.
"Dropdown Subsidiary" means a Wholly Owned Subsidiary that is
a direct Subsidiary of RCC Atlantic or RCC Holdings formed for the purpose of
holding the FCC Licenses held as of the date hereof by such entity.
"Eligible Entity" means a Person that is eligible to hold or
acquire PCS Block C or F licenses, as specified in the rules, regulations and
orders of the FCC, including, without limitation, 47 C.F.R. Sections 24.709 &
24.839.
"Excluded Disbursement Account" means any Deposit Account that
is a disbursement, payroll, tax or impress account (other than any Existing
Controlled Deposit Account or Same-Institution Account) but only if (1) such
account has a zero balance as of the end of each day, (2) the Pledgors do not
transfer during any day into such account
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any funds exceeding the amount reasonably expected to be paid from such account
during such day and (3) no other Person has a control agreement on such account.
"Excluded Permitted Lien Property" means any property or
assets of the Pledgors that are subject to the following Permitted Liens (but
only to the extent that (i) the agreements relating to such Liens prohibit the
creation of Liens in favor of the Administrative Agent on any such property or
assets or (ii) the grant of a Lien on any such property or assets would
constitute or result in the abandonment, invalidation or unenforceability of any
material right under any such agreement):
(a) Liens on Securities Accounts and Deposit Accounts
permitted under clause (c) or (d) of the definition of Permitted Encumbrances in
the Credit Agreement,
(b) Liens permitted under Section 6.02(iii), (iv),
(v), (vi), (viii) or (x) of the Credit Agreement,
(c) Liens permitted under Section 6.02(ix) of the
Credit Agreement with respect to replacements of Liens permitted under Section
6.02(iii) of the Credit Agreement, and
(d) Liens permitted under Section 6.02(xi) of the
Credit Agreement on property or assets the Fair Market Value of which does not
exceed $10,000,000 in the aggregate; provided that no property or assets shall
constitute Excluded Permitted Lien Property pursuant to this clause (d) unless
such property or assets constitutes "Excluded Permitted Lien Property" pursuant
to clause (d) of the definition of "Excluded Permitted Lien Property" in the
Collateral Agreement (as defined in the New Indenture);
provided that Excluded Permitted Lien Property will not include any property or
assets of a Pledgor subject to (x) a Permitted Lien described in clauses (a),
(b) or (c) above that was created during the continuance of an Event of Default
under the Credit Agreement or an event of default under the New Indenture or (y)
a Permitted Lien described in clause (d) above that was created during the
continuance of a Default or an Event or Default under the Credit Agreement or an
event of default under the New Indenture.
"Excluded Property" means (a) any Chattel Paper, Promissory
Note, Lease, Contract, General Intangible, license, property right or agreement
(collectively, "Contract Collateral") to which any Pledgor is a party (i) to the
extent that the grant of a security interest therein by such Pledgor would
constitute or result in the abandonment, invalidation or unenforceability of any
material right, title or interest of such Pledgor under such Contract
Collateral, (ii) to the extent that the terms of such Contract Collateral
prohibit the creation by such Pledgor of a security interest therein or (iii) to
the extent that any Requirement of Law applicable thereto prohibits the creation
of a security interest therein (other than, in the case of clauses (i), (ii) and
(iii), to the extent that any such result would be rendered ineffective pursuant
to Sections 9-406, 9-407, 9-408, or 9-409 of the UCC), (b) any Capital Stock of
Wireless Alliance or Cellular 2000 or (c) the
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Alexandria Regulatory Reserve Account; provided that any Proceeds, substitutions
or replacements of any Excluded Property shall not themselves be Excluded
Property (unless such Proceeds, substitutions or replacements would constitute
property described in clause (a), (b) or (c) above).
"Existing Control Agreement" means the Blocked Account Control
Agreement among the Borrower, Toronto Dominion (Texas), Inc. and U.S. Bank
National Association as in effect prior to the date hereof in the form attached
as Exhibit A hereto.
"Existing Controlled Deposit Accounts" means all Deposit
Accounts covered by the Existing Control Agreement.
"FCC License" has the meaning assigned to the term "License"
in the Credit Agreement
"Guarantors" has the meaning assigned to such term in the
preamble to this Agreement.
"Included Deposit Accounts" means (x) all Deposit Accounts
that are Existing Controlled Deposit Accounts, and (y) all other Deposit
Accounts of the Pledgors, other than (i) Excluded Disbursement Accounts, (ii)
Excluded Permitted Lien Property and the Alexandria Regulatory Reserve Account
and (iii) Deposit Accounts to the extent that the aggregate amount of funds
credited to all such Deposit Accounts does not exceed $10,000,000 at any time
outstanding and no other Person has a control agreement on such Deposit
Accounts. For the avoidance of doubt, the term "Included Deposit Accounts" shall
not include any Collateral Account.
"Intellectual Property" means, collectively, all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses and all rights to ▇▇▇
at law or in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom.
"Investment Property" means the collective reference to (i)
all "investment property" as such term is defined in Section 9-102(a)(49) of the
UCC and (ii) whether or not constituting "investment property" as so defined,
all Pledged Notes and all Pledged Stock.
"Issuers" means, collectively, the issuers of Pledged Stock.
"Leases" means all lease agreements for personal property or
fixtures to which any Pledgor is a party, whether now existing or hereafter
arising, but excluding any Lease that is Excluded Property.
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"Lenders" has the meaning assigned to such term in the
recitals to this Agreement.
"Material Adverse Tax Effect" means, with respect to the
transfer or acquisition of an FCC License, an adverse tax consequence to the
Borrower and its Subsidiaries (after taking into account any applicable tax
benefits, including the application of any net operating loss carryforwards that
will expire during the then-current tax year) in an amount that exceeds the
lesser of (x) 2.0% of the Fair Market Value of the FCC License to be acquired or
transferred and (y) $200,000.
"Material Intellectual Property" means all Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses
that are included in the Collateral and (a) used in or necessary for the conduct
of the Pledgors' respective businesses as currently conducted and (b) material
to the business, assets, operations, properties or condition (financial or
otherwise) of the Pledgors, taken as a whole; and "Material Patent" and
"Material Trademark" mean all Patents and Trademarks, respectively, that meet
the criteria described in clauses (a) and (b) above.
"Other Receivables" means those Promissory Notes, other
Instruments, negotiable documents and Chattel Paper which, collectively,
evidence Receivables or other obligations of the Pledgors in an aggregate amount
not in excess of $1,000,000 in any fiscal year.
"Patents" means (i) all letters patent of the United States,
all reissues thereof and including, without limitation, any of the foregoing
referred to in Schedule 4.7, (ii) all applications for letters patent of the
United States and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any of the foregoing referred to on
Schedule 4.7, and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"Patent Licenses" means any written agreements providing for
the grant by or to any Pledgor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 4.7.
"Permitted Control Agreement" means, with respect to any
Controlled Account, a control agreement among the Pledgor that owns such
Controlled Account, the Account Institution for such Controlled Account and the
Account Agent, which control agreement meets the requirements of Section 5.16 of
this Agreement.
"Pledged Notes" means all Promissory Notes issued to or held
by any Pledgor, including, without limitation, the Promissory Notes listed on
Schedule 4.5.
"Pledged Securities" means, collectively, all Pledged Notes
and all Pledged Stock.
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"Pledged Stock" means all the Capital Stock issued by any
Subsidiary that may be issued or granted to, or held by, any Pledgor while this
Agreement is in effect, including, without limitation, the Capital Stock listed
on Schedule 4.5, but excluding any Capital Stock that is Excluded Property.
"Pledgor" has the meaning assigned to such term in the
preamble to this Agreement.
"RCC Atlantic" means RCC Atlantic, Inc., a Minnesota
corporation.
"RCC Holdings" means RCC Holdings, Inc., a Minnesota
corporation.
"Receivable" means any right to payment for goods sold or
leased or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by performance
(including, without limitation, any Account).
"Restricted PCS Block C or F License" means an FCC License in
PCS Frequency Block C or F that has been in effect for a period of less than
five years from its initial grant, such that it may only be held by or assigned
to an Eligible Entity.
"Same-Institution Accounts" means all Deposit Accounts and
Securities Accounts that are maintained with the same financial institution
where any Pledgor has any Included Deposit Account. For the avoidance of doubt,
the term "Same-Institution Account" shall not include any Collateral Account.
"Secured Documents" as used herein means all Loan Documents
and all Hedging Agreements with Secured Hedging Counterparties.
"Secured Hedging Counterparty" means any counterparty to a
Hedging Agreement that was the Administrative Agent or a Lender or an Affiliate
of a Lender at the time such Hedging Agreement was entered into.
"Secured Parties" means, collectively, (i) the Administrative
Agent, (ii) the Lenders (including, without limitation, any Issuing Bank and any
Swing Line Lender), (iii) a Secured Hedging Counterparty and (iv) the permitted
successors and assigns of any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
"Termination Date" shall have the meaning assigned to such
term in Section 2.1(d).
"Trademarks" means (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all goodwill
associated therewith, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the
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United States, any State thereof, or otherwise, and all common-law rights
related thereto, including, without limitation, any of the registered trademarks
and trademark applications referred to on Schedule 4.7, and (ii) the right to
obtain all renewals thereof.
"Trademark License" means any written agreement providing for
the grant by or to any Pledgor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to on Schedule 4.7.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein," "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a Pledgor, shall refer
to such Pledgor's Collateral or the relevant part thereof.
SECTION 2
GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, as primary obligor and not merely as
surety, guarantees to the Administrative Agent, for the ratable benefit of the
Secured Parties, the prompt and complete payment and performance by the Borrower
when due (whether at the stated maturity, by acceleration or otherwise, but
after the expiration of any grace period or the giving of any required notice
provided for in the Credit Agreement or other Secured Document) of the Borrower
Obligations.
(b) Anything herein or in any other Loan Document to
the contrary notwithstanding, the maximum liability of each Guarantor hereunder
and under the other Secured Documents shall in no event exceed the amount which
can be guaranteed by such Guarantor under applicable federal and state laws
relating to the insolvency of debtors (after giving effect to the right of
contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower
Obligations may at any time and from time to time exceed the amount of the
liability of such Guarantor hereunder without impairing the guarantee contained
in this Section 2 or affecting the rights and remedies of the Administrative
Agent hereunder.
(d) The guarantee contained in this Section 2 shall
remain in full force and effect until the date (the "Termination Date") on which
all of the following shall have occurred, notwithstanding that from time to time
prior thereto the Borrower
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may be free from any Borrower Obligations: (i) the principal of and interest on
each Loan and all fees and other amounts then payable in respect of the Borrower
Obligations and the obligations of each Guarantor under the guarantee contained
in this Section 2 shall have been satisfied by payment in full, (ii) all Letters
of Credit shall have been Fully Satisfied, (iii) all Hedging Agreements with
Secured Hedging Counterparties shall have been terminated or fully cash
collateralized in a manner reasonably satisfactory to the Administrative Agent
and (iv) the Revolving Commitments shall have been terminated.
(e) Prior to the Termination Date, no payment made by
the Borrower, any of the Guarantors, any other guarantor or any other Person or
received or collected by the Administrative Agent or any other Secured Party
from the Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations shall be deemed to modify, reduce, release or otherwise
affect the enforceability of this Agreement with respect to any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the Borrower Obligations or any payment
received or collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to the maximum
liability of such Guarantor hereunder until the Termination Date.
(f) By written notice to the Administrative Agent,
any Guarantor organized under the laws of the State of Minnesota may revoke
prospectively the guarantee contained in this Section 2 only as to such
Guarantor and only as to any New Extension of Revolver Credit under the Credit
Agreement made after the time of actual receipt of such notice by the
Administrative Agent to the extent such New Extension of Revolver Credit was not
committed for at the time of such actual receipt. Such revocation shall not be
effective as to any Indebtedness existing or committed for at the time of such
actual receipt of such notice or as to any accrued interest thereon whether
arising before or after such receipt, or as to any renewals, extensions or
refinancings thereof, or as to any other Borrower Obligations that were
outstanding or committed for at the time of such actual receipt or that arise,
whether before or after such receipt, from events or circumstances existing at
or prior to such receipt. Any revocation given in accordance with this clause
(f) shall constitute an immediate Event of Default under clause (o) of Article
VII of the Credit Agreement.
2.2 Right of Contribution. Each Guarantor hereby agrees that
to the extent that a Guarantor shall have paid more than its proportionate share
of any payment made hereunder, such Guarantor shall be entitled to seek and
receive contribution from and against any other Guarantor hereunder which has
not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of Section 2.3. The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent for the ratable benefit
of the Secured Parties, and each Guarantor shall remain liable to the
Administrative Agent for the ratable benefit of the Secured Parties for the full
amount guaranteed by such Guarantor hereunder.
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2.3 No Subrogation. Notwithstanding any payment made by any
Guarantor hereunder or any set-off or application of funds of any Guarantor by
the Administrative Agent or any other Secured Party, no Guarantor shall be
entitled to be subrogated to any of the rights of the Administrative Agent or
any other Secured Party against the Borrower or any other Guarantor or any
collateral security or guarantee or right of offset held by the Administrative
Agent or any other Secured Party for the payment of the Borrower Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until the Termination Date. If any amount
shall be paid to any Guarantor on account of such subrogation, contribution or
reimbursement rights at any time prior to the Termination Date, such amount
shall be held by such Guarantor in trust for the Administrative Agent and the
other Secured Parties, segregated from other funds of such Guarantor, and shall,
promptly upon receipt by such Guarantor, be turned over to the Administrative
Agent in substantially the same form received by such Guarantor (duly indorsed
by such Guarantor to the Administrative Agent, if required), to be applied
against the Borrower Obligations, whether matured or unmatured, in such order as
the Administrative Agent may determine.
2.4 Amendments, etc. with respect to the Borrower Obligations.
Each Guarantor shall remain obligated hereunder until the Termination Date
notwithstanding that, without any reservation of rights against any Guarantor
and without notice to or further assent by any Guarantor, any demand for payment
of any of the Borrower Obligations made by the Administrative Agent or any other
Secured Party may be rescinded by the Administrative Agent or such other Secured
Party and any of the Borrower Obligations continued, and the Borrower
Obligations, or the liability of any other Person upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any other Secured Party, and the Credit Agreement
and the other Secured Documents and any other documents executed and delivered
in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, and any collateral security, guarantee or right of offset at
any time held by the Administrative Agent or any other Secured Party for the
payment of the Borrower Obligations may be sold, exchanged, waived, surrendered
or released. Neither the Administrative Agent nor any other Secured Party shall
have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Borrower Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any other Secured Party upon the guarantee contained in
this Section 2 or acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2
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and the grant of the security interests pursuant to Section 3; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2 and the grant of the security
interests pursuant to Section 3. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower or any of the other Guarantors with respect to the Borrower Obligations
to the extent permitted by applicable law. Each Guarantor understands and agrees
that the guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity or enforceability of the Credit Agreement or any other Loan
Document, any of the Borrower Obligations or any other collateral security
therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any other Secured Party,
(b) any defense, set-off or counterclaim (other than a defense of payment or
performance) which may at any time be available to or be asserted by the
Borrower or any other Person against the Administrative Agent or any other
Secured Party, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the Borrower or such Guarantor) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrower for
the Borrower Obligations, or of such Guarantor under the guarantee contained in
this Section 2, in bankruptcy or in any other instance. When making any demand
hereunder or otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent may, but shall be under no obligation to,
make a similar demand on or otherwise pursue such rights and remedies as it may
have against the Borrower, any other Guarantor or any other Person or against
any collateral security or guarantee for the Borrower Obligations or any right
of offset with respect thereto, and any failure by the Administrative Agent to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability hereunder, and
shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent against any Guarantor.
For the purposes hereof "demand" shall include the commencement and continuance
of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations is
rescinded or must otherwise be restored or returned by the Administrative Agent
or any other Secured Party upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any Guarantor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.
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2.7 Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in immediately available funds in dollars (as defined in the Credit
Agreement) at the office of the Administrative Agent as provided in Section
2.17(a) of the Credit Agreement.
2.8 Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's and each other Guarantor's
financial condition and assets, and of all other circumstances bearing upon the
risk of nonpayment of the Borrower Obligations and the nature, scope and extent
of the risks that such Guarantor assumes and incurs hereunder, and agrees that
the Administrative Agent will not have any duty to advise such Guarantor of
information known to it or any of them regarding such circumstances or risks.
SECTION 3
GRANT OF SECURITY INTEREST
Each Pledgor hereby pledges and grants to the Administrative
Agent, for the ratable benefit of the Secured Parties, a security interest in,
all of the following property now owned or at any time hereafter acquired by
such Pledgor or in which such Pledgor now has or at any time in the future may
acquire any right, title or interest (collectively, the "Collateral"), as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of such Pledgor's
Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Commercial Tort Claims of such Pledgor
described on Schedule 4.11 as supplemented by any written notification given by
a Pledgor to the Administrative Agent pursuant to Section 5.13;
(d) all Deposit Accounts;
(e) all Documents;
(f) all Equipment;
(g) to the extent permitted by applicable law, all
FCC Licenses (including, without limitation, those listed in Schedule 4.9);
(h) all Fixtures;
(i) all General Intangibles (other than FCC
Licenses), including, without limitation, all Contracts and Leases;
(j) all Instruments;
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(k) all Intellectual Property;
(l) all Inventory;
(m) all Investment Property;
(n) all Letter-of-Credit Rights;
(o) all other personal property not otherwise
described above;
(p) all books and records pertaining to the
Collateral; and
(q) to the extent not otherwise included, all
Proceeds (including, without limitation, the proceeds of the sale, lease or
assignment of any FCC License or of any rights thereunder and all insurance
proceeds), Supporting Obligations, substitutions and replacements for,
accessions to and accessories for, and products of any and all of the foregoing
and all collateral security and guarantees given by any Person with respect to
any of the foregoing;
provided, however, that the foregoing grant of a security interest shall not
include a security interest in Excluded Property; provided further, that at any
time that any Collateral constitutes Excluded Permitted Lien Property, the
security interest of the Administrative Agent in such Excluded Permitted Lien
Property shall immediately and automatically terminate as at such time and such
Excluded Permitted Lien Property shall cease to constitute Collateral if such
Excluded Permitted Lien Property is not "Collateral" under and as defined in the
New Indenture or is simultaneously released from the Lien of the Collateral
Trustee (as defined in the New Indenture) pursuant to the terms of the
Collateral Agreement (as defined in the New Indenture); and provided further,
however, that if and when the prohibition or impediment which prevents such
Excluded Permitted Lien Property to be included in the Collateral is removed or
otherwise terminated, the applicable Pledgor shall be deemed to grant to the
Administrative Agent for the ratable benefit of the Secured Parties, and the
Administrative Agent, for the ratable benefit of the Secured Parties, will be
deemed to have a security interest in such Excluded Permitted Lien Property, and
such Excluded Permitted Lien Property shall again constitute Collateral for all
purposes hereunder.
SECTION 4
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter
into the Credit Agreement, the Secured Hedging Counterparties to enter into
Hedging Agreements, the Lenders to make the Loans to the Borrower and
participate in Letters of Credit thereunder, and the Issuing Bank to issue such
Letters of Credit, each of the Borrower, as to itself and each other Pledgor,
and each other Pledgor, as to itself, hereby represents and warrants to the
Administrative Agent for the ratable benefit of the Secured Parties that:
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4.1 Title; No Other Liens. Except for the security interest
granted to the Administrative Agent for the ratable benefit of the Secured
Parties pursuant to this Agreement and other Permitted Liens, such Pledgor owns
or has rights in each item of the Collateral free and clear of any and all other
Liens. No financing statement or other public notice with respect to all or any
part of the Collateral is on file or of record in any public office, except such
as have been filed in favor of the Administrative Agent, for the ratable benefit
of the Secured Parties, pursuant to this Agreement or as are permitted by the
Credit Agreement.
4.2 Perfected First Priority Liens. (a) This Agreement is
effective to create in favor of the Administrative Agent, for the ratable
benefit of the Secured Parties, a legal, valid and enforceable security interest
in the Collateral. The security interests granted pursuant to this Agreement (i)
when financing statements in appropriate form are filed in the offices specified
on Schedule 4.2, which schedule shall be deemed automatically updated from time
to time in accordance with information provided pursuant to Section 5.03 of the
Credit Agreement, such security interest shall constitute a perfected Lien on,
and security interest in, all right, title and interest of the Pledgors in such
Collateral in which a security interest can be perfected by filing under the
Uniform Commercial Code, and (ii) when the Collateral which may be perfected by
possession or control is delivered to the Administrative Agent or the
Administrative Agent obtains control over such Collateral, such security
interest shall constitute a perfected Lien on, and security interest in, all
right, title and interest of the Pledgors in such Collateral, in the case of
clause (i) and (ii) subject to no Liens other than Permitted Liens; provided
that, in the case of any Permitted Junior Liens on any assets or property
included in the Collateral, the Liens securing the Obligations take priority
over such Permitted Junior Liens and, in the case of Liens permitted under
clause (n) of the definition of "Permitted Encumbrances" in the Credit Agreement
on any assets or property included in the Collateral, such Permitted Liens are
equal and ratable with the Liens securing the Obligations.
(b) When this Agreement (or any short form hereof mutually
agreed upon by the Borrower and the Administrative Agent for purposes of such
filing) is filed in the United States Patent and Trademark Office and the United
States Copyright Office and steps are taken under applicable foreign law to the
extent of Intellectual Property created under such law, and, with respect to
Intellectual Property in which a security interest cannot be perfected solely by
such filings, upon the filing of the financing statements referred to in clause
(a) above, the security interest granted pursuant to this Agreement shall
constitute a perfected Lien on, and security interest in, all right, title and
interest of the Pledgors in the Intellectual Property included in the Collateral
subject to no Liens other than Permitted Liens; provided that, in the case of
any Permitted Junior Liens on any Intellectual Property included in the
Collateral, the Liens securing the Obligations shall take priority over such
Permitted Junior Liens and, in the case of Liens permitted under clause (n) of
the definition of "Permitted Encumbrances" in the Credit Agreement on any
Intellectual Property included in the Collateral, such Permitted Liens are equal
and ratable with the Liens securing the Obligations (it being understood that
subsequent recordings in the United States Patent and Trademark Office and the
15
United States Copyright Office and steps taken under applicable foreign law with
respect to Intellectual Property created under such law may be necessary to
perfect a lien on registered Trademarks, Trademark applications, Patents, Patent
applications and registered Copyrights and Copyright applications acquired by
such Pledgor after the date hereof).
4.3 Jurisdiction of Organization; Chief Executive Office. On
the date hereof, such Pledgor's jurisdiction of organization, identification
number from the jurisdiction of organization (if any) and the location of such
Pledgor's chief executive office is specified on Schedule 4.3. On or prior to
the date hereof, such Pledgor has furnished to the Administrative Agent a
certified charter, certificate of incorporation or other organization document
and long-form good standing certificate from its jurisdiction of organization as
of a date which is recent to the date hereof.
4.4 Inventory and Equipment. On the date hereof, the material
Inventory and the material Equipment (other than mobile goods) of each Pledgor
are located in the States listed on Schedule 4.4.
4.5 Pledged Securities. (a) Schedule 4.5 sets forth a complete
and accurate list of all shares of Pledged Stock held by each Pledgor as of the
date hereof.
(b) The shares of Pledged Stock pledged by such
Pledgor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Subsidiary owned by such Pledgor.
(c) All the shares of the Pledged Stock held by such
Pledgor have been duly and validly issued or the equivalent, if applicable, with
respect to any limited liability company, and are fully paid and nonassessable
or the equivalent, if applicable, with respect to any limited liability company.
(d) As of the date hereof, each of the Pledged Notes
set forth on Schedule 4.5, to the knowledge of the Borrower if made by any
Person other than the Borrower or a Subsidiary or Excluded Subsidiary of the
Borrower, constitutes the legal, valid and binding obligation of the obligor
with respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(e) Except to the extent resulting from a transaction
after the date hereof not prohibited by the terms hereof and of the Credit
Agreement and except as set forth on Schedule 3.12(a) of the Credit Agreement,
all outstanding Capital Stock of each Subsidiary is owned by the Borrower or
another Subsidiary, in each case free and clear of any Lien other than Liens
described in clause (a), (e) or (g) of the definition of "Permitted
Encumbrances" in the Credit Agreement and Liens arising under the Security
Documents and Liens described in Section 6.02(vii) of the Credit Agreement.
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4.6 Receivables. As of the date hereof, the aggregate amount
of Receivables that are owed to the Pledgors by obligors that are Governmental
Authorities does not constitute a material portion of all Receivables owed to
the Pledgors.
4.7 Intellectual Property. (a) Schedule 4.7 lists all
applications for registration and registered Intellectual Property owned by such
Pledgor in its own name on the date hereof.
(b) On the date hereof, all Material Intellectual
Property is valid, subsisting, unexpired and, to the knowledge of such Pledgor,
is enforceable and has not been abandoned and does not, to the knowledge of such
Pledgor, infringe the intellectual property rights of any other Person.
(c) Except as set forth on Schedule 4.7, on the date
hereof, none of the Material Intellectual Property is the subject of any
licensing or franchise agreement pursuant to which such Pledgor is the licensor
or franchisor.
(d) No holding, decision or judgment has been
rendered by any Governmental Authority which would limit, cancel or question the
validity of, or such Pledgor's rights in, any Material Intellectual Property,
other than routine office actions in the course of prosecution of pending Patent
and Trademark applications.
(e) Except as set forth on Schedule 4.7, no action or
proceeding is pending, or, to the knowledge of such Pledgor, threatened, on the
date hereof (i) seeking to limit, cancel or question the validity of any
Material Intellectual Property or such Pledgor's ownership interest therein,
other than routine office actions in the course of prosecution of pending Patent
and Trademark applications, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any Material Intellectual Property.
4.8 Deposit Accounts; Securities Accounts. On the date hereof,
such Pledgor does not have any Deposit Accounts or Securities Accounts that are
not listed on Schedule 4.8 (other than demand deposit accounts of the type
referred to in Section 6.05(v) of the Credit Agreement that are neither Included
Deposit Accounts nor Same- Institution Accounts). None of the Deposit Accounts
or Securities Accounts of the Pledgors was subject to a control agreement prior
to the date hereof other than the Existing Controlled Deposit Accounts.
4.9 FCC Licenses. Schedule 4.9 sets forth a complete and
accurate list of the FCC Licenses in effect on the date hereof.
4.10 Transmitting Utility. Each of the Pledgors listed on
Schedule 4.10 is a person primarily engaged in the business of transmitting
communications electrically, electromagnetically or by light on the date hereof.
4.11 Commercial Tort Claims. On the date hereof, such Pledgor
does not hold any Commercial Tort Claim which might reasonably result in awarded
damages
17
(less any and all legal and other expenses incurred or reasonably expected to be
incurred by such Pledgor) in excess of $500,000 that is not listed in Schedule
4.11.
4.12 Letter-of-Credit Rights. On the date hereof, such Pledgor
is not the beneficiary under any letter of credit with a face amount in excess
of $500,000 issued in favor of such Pledgor that is not listed on Schedule 4.12.
4.13 Material Collateral. Such Pledgor does not own, or have
any other right or interest in, any asset or property included in the Collateral
(other than FCC Licenses) that cannot be perfected in the manner described in
Section 4.2 (collectively, "Non-Perfected Assets"), except for Non-Perfected
Assets which together with the Non-Perfected Assets of all other Pledgors, in
the aggregate are not material to the Borrower and its Subsidiaries taken as a
whole.
SECTION 5
COVENANTS
The Borrower, as to itself and each other Pledgor, and each
other Pledgor, as to itself, covenants and agrees with the Administrative Agent
for the ratable benefit of the Secured Parties that, from and after the date
hereof until the Termination Date:
5.1 Covenants in Credit Agreement. In the case of each
Pledgor, such Pledgor shall take, or shall refrain from taking, as the case may
be, each action that is necessary to be taken or not taken, as the case may be,
so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by, in each case, such Pledgor.
5.2 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral in excess of $500,000,
individually or in the aggregate at any time outstanding, shall be or become
evidenced by any Instrument (other than checks received in the ordinary course
of business) or Chattel Paper, such Instrument or Chattel Paper shall be
promptly delivered to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as Collateral pursuant to
this Agreement.
5.3 Intentionally Omitted.
5.4 Maintenance of Perfected Security Interest; Further
Documentation. (a) Such Pledgor shall maintain the security interest created by
this Agreement as a perfected security interest to the extent and having the
priority provided in Section 4.2, and shall defend such security interest
against the claims and demands of all Persons whomsoever, in each case, other
than claims or demands related to Permitted Liens.
(b) At any time and from time to time, upon the written
request of the Administrative Agent, and at the sole expense of such Pledgor,
such Pledgor will
18
promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of granting, preserving, protecting
or perfecting the security interest granted by such Pledgor pursuant to this
Agreement, including, without limitation, filing any financing or continuation
statements under the UCC (or other similar laws) in effect in any jurisdiction
with respect to the security interests created hereby.
5.5 Changes in Locations, Name, etc. Such Pledgor will not,
except upon ten days' prior written notice to the Administrative Agent and
delivery to the Administrative Agent of all additional financing statements and
other documents reasonably requested by the Administrative Agent, if any,
necessary to maintain the validity, perfection and priority of the security
interests provided for herein:
(i) change its jurisdiction of organization or, in
the case of any Pledgor which is not a registered organization (as defined in
the UCC) the location of its chief executive office from that referred to in
Section 4.3; or
(ii) change its name, identity or corporate
structure.
5.6 Notices. Upon a Responsible Officer having knowledge of
the following, such Pledgor will advise the Administrative Agent promptly, in
reasonable detail, of:
(a) any Lien (other than a Permitted Lien) on any of
the Collateral; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5.7 Pledged Securities; Securities Accounts; Deposit Accounts.
(a) If such Pledgor shall become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate representing a stock
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization), option or rights in respect of the Capital Stock of any
Subsidiary, whether in addition to, in substitution of, as a conversion of, or
in exchange for, any shares of the Pledged Stock, or otherwise in respect
thereof, such Pledgor shall accept the same as the agent of the Administrative
Agent and the other Secured Parties, hold the same in trust for the
Administrative Agent and the other Secured Parties and deliver the same promptly
to the Administrative Agent in substantially the same form received, duly
indorsed by such Pledgor to the Administrative Agent, if required, together with
an undated stock power covering such certificate duly executed in blank by such
Pledgor and with, if the Administrative Agent so reasonably requests, signature
guaranteed, to be held by the Administrative Agent, subject to the terms hereof,
as additional collateral security for the Obligations.
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(b) If any shares of Pledged Stock now or hereafter
acquired by any Pledgor are uncertificated and are issued to such Pledgor or its
nominee directly by the Issuer thereof, such Pledgor shall promptly notify the
Administrative Agent thereof and, at the Administrative Agent's reasonable
request and option, pursuant to an agreement in form and substance reasonably
satisfactory to the Administrative Agent, cause the Issuer to agree to comply
with instructions from the Administrative Agent as to such Pledged Stock,
without further consent of such Pledgor or nominee.
(c) If such Pledgor shall now or hereafter have
rights in any Securities Account that is a Same-Institution Account, such
Pledgor shall promptly notify the Administrative Agent thereof and provide the
Account Agent with a Permitted Control Agreement within the time period required
by Section 5.16.
(d) If such Pledgor shall now or hereafter have
rights in any Included Deposit Account, such Pledgor shall promptly notify the
Administrative Agent thereof and provide the Account Agent with a Permitted
Control Agreement within the time period required by Section 5.16.
(e) The Administrative Agent agrees, and shall cause
the Account Agent to agree, with each of the Pledgors that the Administrative
Agent (and the Account Agent) shall not give or direct the Account Agent to give
any such entitlement orders, instructions or directions to any such Issuer (in
the case of clause (b) above) or any Account Institution (in the case of clauses
(c) and (d) above) and shall not withhold its consent to the exercise of any
withdrawal or dealing right by any Pledgor, unless a Control Event has occurred
and is continuing, or, after giving effect to any such investment and withdrawal
rights, would occur.
(f) During the existence of an Event of Default, any
sums paid upon or in respect of the Pledged Stock upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held by it hereunder during the existence of an Event of Default as additional
collateral security for the Obligations. During the existence of an Event of
Default, if any sums of money or property so paid or distributed in respect of
the Pledged Securities shall be received by such Pledgor, such Pledgor shall,
until such money or property is paid or delivered to the Administrative Agent,
hold such money or property in trust for the Lenders, segregated from other
funds of such Pledgor, as additional collateral security for the Obligations. If
all Events of Default cease to exist, any property, sums or other amounts
previously received by the Administrative Agent pursuant to this clause (f) and
still held by the Administrative Agent at the time all Events of Default cease
shall be promptly distributed to the applicable Pledgor by the Administrative
Agent.
(g) In the case of each Pledgor which is an Issuer,
such Issuer agrees that (i) it will be bound by the terms of this Agreement
relating to the Pledged Security issued by it and will comply with such terms
insofar as such terms are applicable to it in its capacity as an Issuer and (ii)
the terms of Sections 6.3(c) and 6.7 shall apply to it, mutatis mutandis, with
respect to all actions that may be required of it pursuant to Section 6.3(c) or
6.7 with respect to the Pledged Securities issued by it.
20
(h) In the event a Pledgor is obligated to enter into
a Permitted Control Agreement pursuant to Section 5.7 (c) or (d) the Borrower
shall, simultaneously with the execution of such Permitted Control Agreement,
deliver an opinion of legal counsel in form and substance reasonably
satisfactory to the Administrative Agent stating that the terms of such
Permitted Control Agreement are enforceable against such Pledgor and, in the
case of a Permitted Control Agreement to be entered into pursuant to Section
5.7(d), the execution of such Permitted Control Agreement creates a valid and
perfected security interest in the Included Deposit Account of such Pledgor;
provided, that the Borrower shall only be required to deliver to the
Administrative Agent such opinion of legal counsel with respect to any Permitted
Control Agreement which is required to be delivered pursuant to Section 5.16(b),
(c) or (d) if so requested by the Administrative Agent.
5.8 Receivables. Other than in the ordinary course of business
or consistent with its past practice, such Pledgor will not (i) grant any
extension of the time of payment of any Receivable other than Other Receivables,
(ii) compromise or settle any Receivable other than Other Receivables for less
than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Receivable other than Other Receivables, (iv)
allow any credit or discount whatsoever on any Receivable other than Other
Receivables or (v) amend, supplement or modify any Receivable other than Other
Receivables in any manner that could materially adversely affect the value
thereof.
5.9 Intellectual Property. (a) Such Pledgor (either itself or
through licensees) will (i) continue to use each Material Trademark on each and
every trademark class of goods applicable to its product or service line in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
statutorily required notice of registration and all other notices and legends
required by applicable Requirements of Law, (iv) not adopt or use any ▇▇▇▇ which
is confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent, for the ratable benefit of the Secured Parties, shall
obtain a perfected security interest in such ▇▇▇▇ pursuant to this Agreement,
and (v) not (and not permit any licensee or sublicensee thereof to) do any act
or knowingly omit to do any act whereby such Trademark may become invalidated or
its enforceability impaired in any way.
(b) Such Pledgor will not do, or knowingly permit its
licensee to do, any act, or omit to do any act, whereby any Material Patent may
become forfeited, abandoned or dedicated to the public.
(c) Such Pledgor will not do, or direct its licensee
to do, any act that knowingly infringes the material intellectual property
rights of any other Person in any material respect.
(d) Such Pledgor will notify the Administrative Agent
for the benefit of the Secured Parties immediately if it knows, or has reason to
know, that any
21
application or registration relating to any Material Intellectual Property may
become forfeited, abandoned or dedicated to the public, or of any adverse
determination or development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in the United States
Patent and Trademark Office or the United States Copyright Office other than
routine non-final office actions) regarding such Pledgor's ownership of, or the
validity of, any Material Intellectual Property or such Pledgor's right to
register the same or to own and maintain the same.
(e) Whenever such Pledgor, either by itself or
through any agent, employee, licensee or designee, shall file an application for
the registration of any Intellectual Property with the United States Patent and
Trademark Office or the United States Copyright Office, such Pledgor shall
report such filing to the Administrative Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon request of
the Administrative Agent, such Pledgor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative Agent's, for the
ratable benefit of the Secured Parties, security interest in such Intellectual
Property.
(f) Such Pledgor will take all reasonable and
necessary steps, including, without limitation, in any proceeding before the
United States Patent and Trademark Office or the United States Copyright Office,
to maintain and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the Material Intellectual
Property, including, without limitation, filing of applications for renewal,
affidavits of use and affidavits of incontestability.
(g) In the event that any Material Intellectual
Property is infringed, misappropriated or diluted by a third party, such Pledgor
shall (i) take such actions as such Pledgor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and, after taking reasonable and
customary measures to stop such infringement ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
5.10 Electronic Chattel Paper and Transferable Records. If any
Pledgor at any time holds or acquires an interest in any Electronic Chattel
Paper, such Pledgor shall promptly notify the Administrative Agent thereof and,
at the request of the Administrative Agent, shall take such action as the
Administrative Agent may reasonably request to vest in the Administrative Agent
control under UCC Section 9-105 of such Electronic Chattel Paper. The
Administrative Agent agrees with such Pledgor that the Administrative Agent will
arrange, pursuant to procedures reasonably satisfactory to the Administrative
Agent and so long as such procedures will not result in the Administrative
Agent's loss of control, for the Pledgor to make alterations to the Electronic
Chattel Paper permitted under UCC Section 9-105 for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Pledgor
with respect to such Electronic Chattel Paper.
22
5.11 FCC Compliance. Each Pledgor covenants that, upon the
occurrence and during the continuance of an Event of Default, upon request of
the Administrative Agent, it will cause to be filed such applications and take
such other action (or use its commercially reasonable efforts to assist the
Administrative Agent in such applications and such other action), at its own
cost, as may be requested by the Administrative Agent to obtain consent or
approval of the FCC to any action contemplated by this Agreement and to give
effect to the security interest of the Administrative Agent, including, without
limitation, the preparation, execution and filing of an application for consent
by the FCC to an assignment or transfer involving a change in ownership or
control of any FCC License pursuant to the provisions of the Communications Act.
5.12 Letter-of-Credit Rights. If any Pledgor is at any time a
beneficiary under any Letter of Credit now or hereafter issued in favor of such
Pledgor, other than a Letter of Credit issued pursuant to the Credit Agreement,
in amounts in the aggregate for all Pledgors in excess of $1,000,000, such
Pledgor shall promptly notify the Administrative Agent thereof and such Pledgor
shall, at the request of the Administrative Agent, pursuant to an agreement in
form and substance reasonably satisfactory to the Administrative Agent, use
commercially reasonable efforts to either (i) arrange for the issuer and any
confirmer of such Letters of Credit to consent to an assignment to the
Administrative Agent of the proceeds of any drawing under such Letters of Credit
or (ii) arrange for the Administrative Agent to become the transferee
beneficiary of such Letters of Credit, with the Administrative Agent agreeing,
in each case, that the proceeds of any drawing under such Letters of Credit are
to be applied as provided in the Credit Agreement.
5.13 Commercial Tort Claims. If any Pledgor shall at any time
hold or acquire any Commercial Tort Claim, which might reasonably result in
awarded damages (less any and all legal and other expenses incurred or
reasonably expected to be incurred by such Pledgor) in excess of $500,000, such
Pledgor shall promptly notify the Administrative Agent in writing signed by such
Pledgor of the brief details thereof and grant to the Administrative Agent in
such writing a security interest therein and in the Proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance
reasonably satisfactory to the Administrative Agent.
5.14 Alexandria Regulatory Reserve Account. Alexandria
Indemnity hereby agrees that it shall maintain in the Alexandria Regulatory
Reserve Account amounts no greater than are necessary to satisfy the
requirements of applicable law and of any contractual obligations relating to
the maintenance of reserve accounts and agrees that the Alexandria Regulatory
Reserve Account shall be maintained as a segregated account at all times.
Furthermore, Alexandria Indemnity hereby agrees to provide to the Administrative
Agent on a quarterly basis, if requested by the Administrative Agent, a
statement in form and substance reasonably satisfactory to the Administrative
Agent setting forth (i) the amount required to be maintained in the Alexandria
Regulatory Reserve Account by applicable law and by any contractual obligation
relating to the
23
maintenance of reserve accounts and (ii) the amount in the Alexandria Regulatory
Reserve Account as of such date.
5.15 License-Only Subsidiaries. (a) Each Guarantor that is a
License-Only Subsidiary agrees that it shall not, and the Borrower agrees that
it shall not allow any such Guarantor that is a License-Only Subsidiary to
engage in any business activity other than (i) holding and acquiring FCC
Licenses and conducting business activities incidental to holding and acquiring
FCC Licenses (which, for the avoidance of doubt, shall include transactions with
other Guarantors under management and license agreements that are consistent
with past practice but shall not include the operation of wireless
communications networks or any other operating business) and (ii) holding and
acquiring other assets (but not liabilities other than as may be permitted under
Section 5.15(d) of this Agreement) that may be transferred into such
License-Only Subsidiary pursuant to the Credit Agreement (but not the operation
of any business relating to such other assets); except that, subject to Section
5.15(b), TLA Spectrum shall be permitted to acquire Associated Operations and
Liabilities after the date hereof and operate such Associated Operations and
Liabilities.
(b) To the extent that Associated Operations and
Liabilities are acquired by TLA Spectrum, the Borrower and TLA Spectrum shall
use commercially reasonable efforts to promptly transfer to the Borrower or any
Guarantor other than a License-Only Subsidiary such Associated Operations and
Liabilities that would not be permitted to be held by a License-Only Subsidiary
under Section 5.15(a).
(c) If any regulatory approval is required for any of
the transfers described in Section 5.15(b), the Borrower and the Guarantors
shall use commercially reasonable efforts to obtain such approval as promptly as
practicable. Any such transfer described in Section 5.15(b) shall not be
required during such time as any regulatory consent from a Governmental
Authority that is necessary for such transfer cannot be obtained after the
prompt use of commercially reasonable efforts to obtain such approval; provided,
however, that if a change in law or circumstance occurs that would remove such
impediment, then the Borrower and the Guarantors shall use commercially
reasonable efforts to effect such transfer as soon as practicable after such
change.
(d) Each Guarantor that is a License-Only Subsidiary
agrees that it shall not, and the Borrower agrees that it shall not allow any
such Guarantor that is a License-Only Subsidiary to Incur or suffer to exist any
Indebtedness or other liabilities other than (i) Guarantees of the Obligations
and the New Senior Secured Notes and any Refinancing Indebtedness in respect
thereof, (ii) Intercompany Debt permitted by Section 6.01(a)(vi) of the Credit
Agreement, (iii) liabilities (other than for borrowed money) imposed by the
Communications Act, (iv) various fees, taxes and other charges owed directly by
such License-Only Subsidiary that have been imposed by a Governmental Authority
and (v) other Indebtedness or other liabilities not exceeding $5,000,000 in the
aggregate for all License-Only Subsidiaries at any one time outstanding
(excluding Indebtedness and other liabilities of TLA Spectrum that constitute
Associated Operations and Liabilities). In addition, TLA Spectrum may incur
Indebtedness and
24
other liabilities constituting Associated Operations and Liabilities, subject to
Section 5.15(b).
(e) The Borrower shall cause each License-Only
Subsidiary to satisfy all of its liabilities when due and perform all of its
obligations when required, except in each case where the failure to do so could
not reasonably be expected to result in a Material Adverse Effect, and shall
provide such License-Only Subsidiary all funds necessary to do so.
(f) The Borrower and the Guarantors shall not make a
transfer of an FCC License to the Borrower or any Subsidiary except for (a) a
transfer of an FCC License to a License-Only Subsidiary other than TLA Spectrum
or a Dropdown Subsidiary and (b) a transfer of an FCC License that is required
to be made by RCC Holdings or RCC Atlantic as provided in Section 5.15(j).
(g) Each Guarantor that is a License-Only Subsidiary
agrees that it shall not, and the Borrower agrees that it shall not allow such
Guarantor that is a License-Only Subsidiary to, merge with or into or
consolidate with the Borrower or any Subsidiary other than another License-Only
Subsidiary other than TLA Spectrum or a Dropdown Subsidiary.
For the avoidance of doubt, the restriction
contained in this Section 5.15(g) shall not restrict or limit the transfer of
any assets that do not constitute Collateral (it being understood that FCC
Licenses constitute Collateral).
(h) With respect to any FCC License acquired after
the date hereof, (i) the Borrower and the Guarantors shall use commercially
reasonable efforts to acquire initially such FCC License in a License-Only
Subsidiary other than a Dropdown Subsidiary or TLA Spectrum, unless such
acquisition would result in a Material Adverse Tax Effect; and (ii) if the
acquisition described in clause (i) above is not completed at the time of the
acquisition of such FCC License, the Borrower and the Guarantors shall use
commercially reasonable efforts to transfer, as promptly as practicable, such
FCC License to a License-Only Subsidiary other than a Dropdown Subsidiary or TLA
Spectrum unless such transfer would result in a Material Adverse Tax Effect;
provided that, in either case, if such FCC License is a Restricted PCS Block C
or F License, such FCC License may be acquired by TLA Spectrum, subject to
Section 5.15(b).
(i) If any regulatory approval is required for any of
the acquisitions or transfers described in Section 5.15(h), the Borrower and the
Guarantors shall use commercially reasonable efforts to obtain such approval as
promptly as practicable. Any such acquisition or transfer described in Section
5.15(h) shall not be required during such time as any regulatory consent from a
Governmental Authority that is necessary for such acquisition or transfer cannot
be obtained after the prompt use of commercially reasonable efforts to obtain
such approval; provided, however, that if a change in law or circumstance occurs
that would remove such impediment, then the Borrower and the Guarantors shall
use commercially reasonable efforts to effect such acquisition or transfer as
soon as practicable after such change.
25
(j) The Borrower and RCC Atlantic shall use
commercially reasonable efforts to cause RCC Atlantic to transfer, as promptly
as practicable and within 90 days after the date hereof, all FCC Licenses held
by RCC Atlantic to one or more Dropdown Subsidiaries. The Borrower and RCC
Holdings shall use commercially reasonable efforts to cause RCC Holdings to
transfer, as promptly as practicable and within 90 days after the date hereof,
all FCC Licenses held by RCC Holdings to RCC Minnesota or to one or more
Dropdown Subsidiaries if such transfer to RCC Minnesota would result in a
Material Adverse Tax Effect. If any regulatory approval is required for any
transfers described in the preceding two sentences, the Borrower and the
Guarantors shall use commercially reasonable efforts to obtain such approval as
promptly as practicable. Any such transfer by RCC Atlantic or RCC Holdings shall
not be required during such time as any regulatory consent from a Governmental
Authority that is necessary for such transfer cannot be obtained after the
prompt use of commercially reasonable efforts to obtain such approval; provided,
however, that if a change in law or circumstance occurs that would remove such
impediment, then the Borrower and the Guarantors shall use commercially
reasonable efforts to effect such transfer as soon as practicable after such
change.
5.16 Permitted Control Agreement.
(a) The Permitted Control Agreement for all Existing
Controlled Deposit Accounts and any other Deposit Accounts or (subject to clause
(e) below) any Securities Accounts existing on the date hereof that are
Same-Institution Accounts shall have substantially the same terms as the
Existing Control Agreement (but consistent with the terms of Section 5.7(e) of
this Agreement) and will be provided as soon as reasonably practicable but in
any event no later than 60 days after the date hereof.
(b) With respect to any other Controlled Account, the
Borrower shall use commercially reasonable efforts to provide a Permitted
Control Agreement with respect to each such account on substantially the same
terms as the Existing Control Agreement, with such changes as the Account Agent
may consent to, such consent not to be unreasonably withheld, conditioned or
delayed, or on such other terms that are reasonably acceptable to the Account
Agent.
(c) If the Borrower is unable to provide the control
agreement contemplated by clause (b) above with respect to any account within 60
days after creating such account (or in the case of an account that is not
initially a Controlled Account, within 60 days after such account becomes a
Controlled Account), then the Borrower shall be obligated to provide on or
before the 30th day following the end of such 60-day period a Permitted Control
Agreement with respect to such account which meets the requirements set forth in
clause (f) below.
(d) Notwithstanding the foregoing, during the
occurrence and continuance of a Default or Event of Default, the Borrower shall
be obligated to provide a Permitted Control Agreement (i) for any newly opened
Controlled Account prior to the time that any funds are transferred into such
account, and (ii) for any other account that becomes a Controlled Account prior
to the time that any new funds are transferred into
26
such account (other than funds or financial assets that would otherwise have
been deposited or credited to that account in the ordinary course of business
consistent with past practice so long as the Borrower is complying with clause
(b) or (c) above, as applicable).
(e) For purposes of any Securities Account, the terms
of the Existing Control Agreement (or any control agreement based on it) shall
be conformed to the UCC definition of control for Securities Accounts and any
other UCC specific differences with respect to Securities Accounts.
(f) If paragraph (c) of this Section 5.16 is
applicable with respect to any Controlled Account, then within the time period
set forth in such paragraph (c) the Borrower shall be obligated to provide a
control agreement with respect to such account executed by the Account
Institution that:
(i) meets the requirements for control set
forth in Section 8-106(d)(2) or 9-104(a)(2) of the UCC, as applicable;
(ii) shall allow any applicable Pledgor to
retain the rights contemplated by Section 8-106(f) or 9-104(b) of the UCC, as
applicable, provided that the Account Agent has the right to terminate such
rights of any applicable Pledgor by notice to the Account Institution upon the
occurrence and during the continuance of a Control Event;
(iii) need not contain any subordination or
release of the Account Institution's statutory, common law or contractual right
or claim of offset or lien or rights of recoupment or deduction;
(iv) if requested by the Account
Institution, shall contain an indemnity by the Account Agent in favor of the
Account Institution and a disclaimer by the Account Institution of liability for
any indirect damages, lost profits, or special, punitive or consequential
damages relating to the control agreement, provided that such indemnity and
disclaimer are either (x) in substantially the form of Section 6 of the Existing
Control Agreement, (y) in such other form that would not be reasonably likely to
result in a material increase in exposure of the Secured Parties to liability,
loss, damage or expense than would the provisions contained in Section 6 of the
Existing Control Agreement or (z) if neither clause (x) nor clause (y) is
applicable, otherwise in form reasonably satisfactory to the Account Agent (it
being understood that no such indemnity or disclaimer shall in any way operate
to release the Borrower from its indemnification obligations to the Account
Agent and shall not impair any rights or remedies of the Account Agent in
respect thereof against the Borrower); and
(v) may contain such additional provisions
as may be reasonably requested by the Account Institution to protect its
interests (including, without limitation, permitting the Account Institution to
debit the applicable account for returned items, fees and other amounts and
requiring the Account Agent to reimburse the Account Institution for returned
items), provided that such other provisions are either (x) in
27
substantially the form of the comparable provisions of the Existing Control
Agreement, if any, (y) not materially more burdensome on the Account Agent and
do not materially increase the exposure of the Secured Parties to liability,
loss, damage or expense than would the provisions contained in the Existing
Control Agreement taken as a whole or (z) if neither clause (x) nor clause (y)
is applicable, otherwise reasonably satisfactory to the Account Agent.
(g) No Pledgor shall enter into any control agreement
with respect to any Securities Account with any Person other than the Account
Agent.
SECTION 6
REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) At any time
after the occurrence and during the continuance of an Event of Default, upon the
Administrative Agent's request and at the expense of the relevant Pledgor, such
Pledgor shall cause independent public accountants or others reasonably
satisfactory to the Administrative Agent to furnish to the Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
(b) The Administrative Agent hereby authorizes each
Pledgor to collect such Pledgor's Receivables, and the Administrative Agent may
curtail or terminate said authority at any time after the occurrence and during
the continuance of a Control Event. If required by the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
any payments of Receivables, when collected by any Pledgor, (i) shall be
promptly (and, in any event, within two Business Days) deposited by such Pledgor
in substantially the same form received, duly indorsed by such Pledgor to the
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to withdrawal by
the Administrative Agent for the account of the Secured Parties only as provided
in Section 6.5, and (ii) until so turned over, shall be held by such Pledgor in
trust for the Administrative Agent and the other Secured Parties, segregated
from other funds of such Pledgor. Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit. If all Control Events cease to
exist, any amounts then held in the Collateral Account shall be promptly
distributed by the Administrative Agent to the Borrower.
(c) After the occurrence and during the continuation
of an Event of Default, at the Administrative Agent's reasonable request, the
Borrower shall deliver to the Administrative Agent such documents evidencing,
and relating to, the agreements and transactions which gave rise to the
Receivables, including, without limitation, all invoices and weekly billing
reports with respect to the Receivables.
6.2 Communications with Obligors; Pledgors Remain Liable. (a)
The Administrative Agent in its own name or in the name of others may at any
time after the
28
occurrence and during the continuance of an Event of Default communicate with
obligors under the Receivables to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any Receivables.
(b) Upon the request of the Administrative Agent at
any time after the occurrence and during the continuance of an Event of Default,
each Pledgor shall notify obligors on the Receivables that the Receivables have
been assigned to the Administrative Agent, for the ratable benefit of the
Secured Parties, and that payments in respect thereof shall be made directly to
the Administrative Agent.
(c) Anything herein to the contrary notwithstanding,
each Pledgor shall remain liable under each of the Receivables, Contracts and
Leases to observe and perform all the conditions and obligations to be observed
and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to such Receivable or such Contract or Lease. Neither the
Administrative Agent nor any other Secured Party shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) or any
Contract or Lease by reason of or arising out of this Agreement or the receipt
by the Administrative Agent or any other Secured Party of any payment relating
thereto, nor shall the Administrative Agent or any other Secured Party be
obligated in any manner to perform any of the obligations of any Pledgor under
or pursuant to any Receivable (or any agreement giving rise thereto) or any
Contract or Lease, to make any payment, to make any inquiry as to the nature or
the sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 Pledged Securities. (a) Subject to Section 6.3(b), each
Pledgor shall be permitted to receive all dividends paid in respect of the
Pledged Stock and all payments made in respect of the Pledged Notes, in each
case, to the extent permitted in the Credit Agreement and subject to the
requirements of Section 5.7 hereof, and to exercise all voting and corporate or
other organizational rights with respect to the Pledged Securities; provided,
however, that no vote shall be cast or corporate or other organizational right
exercised or other action taken which, in the Administrative Agent's reasonable
judgment, would materially impair the Collateral or which would result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be
continuing and the Administrative Agent shall give notice of its intent to
exercise such rights pursuant to this Section 6.3(b) to the relevant Pledgor or
Pledgors, (i) the Administrative Agent shall have the right to receive any and
all cash dividends, payments or other Proceeds paid in respect of the Pledged
Securities and make application thereof to the Obligations in the order as the
Administrative Agent may determine, and/or (ii) any or all of the Pledged
Securities shall be registered in the name of the Administrative Agent or its
nominee, and the Administrative Agent or its nominee may during the existence of
an Event of Default exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at
29
any meeting of shareholders of the relevant Issuer or Issuers or otherwise and
(y) any and all rights of conversion, exchange and subscription and any other
rights, privileges or options pertaining to such Pledged Securities as if it
were the absolute owner thereof (including, without limitation, the right to
exchange at its discretion any and all of the Pledged Securities upon the
merger, consolidation, reorganization, recapitalization or other fundamental
change in the corporate or other organizational structure of any Issuer, or upon
the exercise by any Pledgor or the Administrative Agent of any right, privilege
or option pertaining to such Pledged Securities, and in connection therewith,
the right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency upon
such terms and conditions as the Administrative Agent may reasonably determine),
all without liability except pursuant to Section 7.2(a), but the Administrative
Agent shall have no duty to any Pledgor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing. Each Pledgor hereby appoints the Administrative Agent, which appointment
shall be exercisable only upon the occurrence and during the continuance of an
Event of Default, such Pledgor's true and lawful attorney-in-fact and grants to
the Administrative Agent an IRREVOCABLE PROXY to exercise any action
contemplated by the immediately preceding sentence in any manner the
Administrative Agent reasonably deems advisable for or against all matters
submitted or which may be taken by the shareholders. The power-of-attorney
granted hereby is coupled with an interest and shall be irrevocable.
(c) Each Pledgor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Pledgor hereunder to, if the
Administrative Agent has exercised its rights under and in accordance with
Section 6.3(b), (i) comply with any instruction received by it from the
Administrative Agent in writing that (x) states that an Event of Default has
occurred and is continuing and (y) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from such Pledgor, and
each Pledgor agrees that each Issuer shall be fully protected in so complying,
and (ii) pay any dividends or other payments with respect to the Pledged
Securities directly to the Administrative Agent.
(d) If all Events of Default cease to exist, any
property, funds or other amounts previously received by the Administrative Agent
pursuant to this Section 6.3 and still held by the Administrative Agent at the
time all Events of Default cease shall be promptly distributed by the
Administrative Agent to the Borrower.
6.4 Proceeds to be Turned Over to Administrative Agent. In
addition to the rights of the Administrative Agent specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, upon the Administrative Agent's request, all Proceeds received by
any Pledgor consisting of cash, checks and other near-cash items shall be held
by such Pledgor in trust for the Administrative Agent for the benefit of the
other Secured Parties, segregated from other funds of such Pledgor, and shall,
promptly upon receipt by such Pledgor, be turned over to the Administrative
Agent in substantially the same form received by such Pledgor (duly indorsed by
such Pledgor to the Administrative Agent, if required). All Proceeds received by
the Administrative Agent hereunder shall be held by the Administrative
30
Agent in a Collateral Account maintained under its sole dominion and control.
All Proceeds while held by the Administrative Agent in a Collateral Account (or
by such Pledgor in trust for the Administrative Agent for the benefit of the
other Secured Parties) shall continue to be held as collateral security for all
the Obligations and shall not constitute payment thereof until applied as
provided in Section 6.5 hereof. If all Events of Default cease to exist, any
amounts then held in the Collateral Account shall be promptly distributed by the
Administrative Agent to the Borrower.
6.5 Application of Proceeds. If an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent's election,
the Administrative Agent may apply all or any part of Proceeds constituting
Collateral, whether or not held in any Collateral Account, and any proceeds of
the guarantee set forth in Section 2, in payment of the Obligations in such
order as the Administrative Agent may elect, and any part of such funds which
the Administrative Agent elects not so to apply shall, subject to the following
sentence, continue to be held as collateral security for the Obligations. Any
balance of such Proceeds remaining after the Termination Date or after all
Events of Default cease to exist shall be paid over to the Borrower or to
whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default shall
occur and be continuing, the Administrative Agent, on behalf of the Secured
Parties, may exercise, in addition to all other rights and remedies granted to
it in this Agreement and in any other instrument or agreement securing,
evidencing or relating to the Obligations, all rights and remedies of a secured
party under the UCC or any other applicable law. Without limiting the generality
of the foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon any Pledgor or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the Administrative Agent or
any other Secured Party or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Administrative
Agent or any other Secured Party shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in any Pledgor, which right or equity is hereby
waived and released. Each Pledgor further agrees, at the Administrative Agent's
request, to assemble the Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Pledgor's premises or elsewhere. The Administrative Agent shall apply
the net proceeds of any action taken by it pursuant to this Section 6.6, after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any of the Collateral or
in any way relating to the
31
Collateral or the rights of the Administrative Agent and the other Secured
Parties hereunder, including, without limitation, reasonable attorneys' fees and
reasonable disbursements in accordance with Section 9.03 of the Credit
Agreement, to the payment in whole or in part of the Obligations, in such order
as the Administrative Agent may elect, and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-615(a)(3) and (4) of
the UCC, need the Administrative Agent account for the surplus, if any, to any
Pledgor. To the extent permitted by applicable law, each Pledgor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any other Secured Party arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.
6.7 Private Sale.
(a) Each Pledgor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Pledgor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that no such private sale
shall be deemed to have been made in a commercially unreasonable manner solely
because it has had such a result. The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.
(b) Each Pledgor agrees to use its best efforts to do
or cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Stock pursuant to this Section 6.7
valid and binding and in compliance with any and all applicable law (including
under the Communications Act).
6.8 Deficiency. Each Pledgor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations (including fees and disbursements of
counsel payable by the Borrower under Section 9.03 of the Credit Agreement in
connection with the collection of such deficiency).
6.9 Grant of License to Use Intellectual Property. For the
purpose of enabling the Administrative Agent to exercise rights and remedies
under this Agreement at such time as the Administrative Agent shall be lawfully
entitled to exercise such rights and remedies, each Pledgor, to the extent it
can lawfully do so, hereby grants to the Administrative Agent an irrevocable,
nonexclusive license (exercisable without payment
32
of royalty or other compensation to the Pledgors) to use, license or sublicense
any of the Collateral consisting of Intellectual Property now owned or hereafter
acquired by such Pledgor, and wherever the same may be located, and including in
such license reasonable access to all media in which any of the licensed items
may be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The license (i) shall be subject to those
exclusive Copyright Licenses, Patent Licenses, and Trademark Licenses granted by
the Pledgors in effect on the date hereof and those granted by any Pledgor
hereafter, as permitted under the Loan Documents, to the extent conflicting,
(ii) may be exercised, at the option of the Administrative Agent, only upon the
occurrence and during the continuation of an Event of Default, provided, that
any license, sublicense or other transaction entered into by the Administrative
Agent in accordance herewith shall be binding upon the Pledgors notwithstanding
any subsequent cure of an Event of Default, and (iii) apply to the use of the
Trademarks in connection with goods and services of similar type and quality to
those theretofore sold by such Pledgor under such Trademark.
6.10 Bankruptcy. The Administrative Agent shall have the
right, in connection with the issuance of any order for relief in a bankruptcy
proceeding, to petition the bankruptcy court for the transfer of control or
assignment of the FCC Licenses to a receiver, trustee, transferee, or similar
official or to any purchaser of the Collateral pursuant to any public or private
sale, foreclosure or other exercise of remedies available to the Administrative
Agent, all as permitted by applicable law. All amounts realized or collected
through the exercise of remedies hereunder shall be applied to the Obligations
as provided in the Credit Agreement in such order as the Administrative Agent
may elect.
6.11 Changes in Applicable Law. The parties acknowledge their
intent that, upon the occurrence of an Event of Default and during the
continuance thereof, the Administrative Agent shall receive, to the fullest
extent permitted by applicable law and governmental policy (including, without
limitation, the rules, regulations, and policies of the FCC), all rights
necessary or desirable to obtain, use or sell the Collateral and to exercise all
remedies available to it under this Agreement, the Uniform Commercial Code as in
effect in any applicable jurisdiction, or other applicable law. The parties
further acknowledge and agree that, in the event of changes in law or
governmental policy occurring subsequent to the date hereof that affect in any
manner the Administrative Agent's rights of access to, or use or sale of, the
Collateral, or the procedures necessary to enable the Administrative Agent to
obtain such rights of access, use or sale, the Administrative Agent and the
Pledgors shall amend this Agreement in such manner as the Administrative Agent
shall reasonably request in order to provide the Administrative Agent such
rights to the greatest extent possible consistent with applicable law and
governmental policy.
33
SECTION 7
THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact,
etc. (a) Each Pledgor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Pledgor and in the name of
such Pledgor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Pledgor hereby gives the Administrative Agent the power and
right, on behalf of such Pledgor, without notice to or assent by such Pledgor,
to do any or all of the following, each such power of attorney to be coupled
with an interest; provided that the Administrative Agent agrees that it will not
exercise any rights under the power of attorney provided for in this Section
7.1(a) unless an Event of Default shall have occurred and be continuing:
(i) in the name of such Pledgor or its own
name, or otherwise, take possession of and indorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of moneys due
under any Receivable or with respect to any other Collateral and file any claim
or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due under any Receivable or with respect to
any other Collateral whenever payable, all as the Administrative Agent may
reasonably determine;
(ii) in the case of any Intellectual
Property, execute and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Administrative Agent may request to
evidence the Administrative Agent's security interest in such Intellectual
Property and the goodwill of such Pledgor relating thereto or represented
thereby;
(iii) pay or discharge taxes and Liens
levied or placed on the Collateral, effect any repairs or any insurance called
for by the terms of this Agreement or any other Loan Document and pay all or any
part of the premiums therefor and the costs thereof, all as the Administrative
Agent may reasonably determine;
(iv) execute, in connection with any sale
provided for in Section 6.6 or 6.7, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral;
(v) direct any party liable for any payment
under any of the Collateral to make payment of any and all moneys due or to
become due thereunder directly to the Administrative Agent or as the
Administrative Agent shall direct;
34
(vi) ask or demand for, collect, and receive
payment of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral, all as
the Administrative Agent may reasonably determine;
(vii) sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral;
(viii) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral;
(ix) defend any suit, action or proceeding
brought against such Pledgor with respect to any Collateral, all as the
Administrative Agent may reasonably determine;
(x) settle, compromise or adjust any such
suit, action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate, all as the
Administrative Agent may reasonably determine;
(xi) assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Trademark
pertains) as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes;
(xii) ▇▇▇ on, modify or terminate and waive
or release the performance or observance of any obligation under the Contracts
or the Leases;
(xiii) seek all governmental approvals
(including, to the maximum extent permitted by law, FCC approvals) required for
the operation of the business of such Pledgor; and
(xiv) in accordance with and to the extent
permitted by applicable law, generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative Agent's option and such
Pledgor's expense (including reasonable attorney's fees), at any time, or from
time to time, all acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent's security interests therein and to effect the intent of this Agreement,
all as fully and effectively as such Pledgor might do.
(b) If any Pledgor fails to perform or comply with
any of its agreements contained herein or with any condition contained in any of
the Contracts or the Leases, the Administrative Agent, at its option, but
without any obligation so to do,
35
may perform or comply, or otherwise cause performance or compliance, with such
agreement.
(c) The expenses of the Administrative Agent incurred
in connection with actions undertaken as provided in this Section 7.1 shall be
payable in accordance with the Credit Agreement.
(d) Each Pledgor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof to the extent
done or caused to be done in accordance herewith.
7.2 Duties of Administrative Agent. (a) The Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the UCC
or otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account.
(b) Neither the Administrative Agent, any other
Secured Party nor any of its officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Pledgor or any other Person or
to take any other similar action whatsoever with regard to the Collateral or any
part thereof.
(c) The powers conferred on the Administrative Agent
hereunder are solely to protect the interests of the Administrative Agent for
the benefit of the Secured Parties in the Collateral and shall not impose any
duty upon the Administrative Agent or any Secured Party to exercise any such
powers. Subject to Section 7.2(a), the Administrative Agent and the other
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Pledgor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.
(d) Notwithstanding anything herein which may be
construed to the contrary, (i) no action shall be taken by the Administrative
Agent in accordance with this Agreement which may require the consent or
approval of the FCC, and the proxy granted in Section 6.3(b) shall not become
effective, unless and until all requirements of applicable law, including
without limitation, any required approval, or any notification required to be
given, under the Communications Act have been satisfied and (ii) no action shall
be taken by the Administrative Agent with respect to the FCC Licenses unless and
until an Event of Default exists and all requirements of applicable law,
including, without limitation, any required approval, or any notification
required to be given, under the Communications Act, have been satisfied.
7.3 Filing of Financing Statements. Each Pledgor authorizes
the Administrative Agent to file or record financing statements, any amendments
thereto and
36
other filing or recording documents or instruments with respect to the
Collateral without the signature of such Pledgor in such form and in such
offices as the Administrative Agent reasonably determines appropriate to perfect
the security interests of the Administrative Agent under this Agreement
including, without limitation, any financing statement describing the collateral
as "all assets," "all personal property" or any similar description. A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction to the extent permitted by law. In
addition, each Pledgor listed on Schedule 4.10 as of the date hereof or added to
Schedule 4.10 pursuant to Section 1 of the form of Assumption Agreement attached
hereto as Annex I authorizes the Administrative Agent upon filing or recording
any financing statement to indicate on such financing statement that such
Pledgor is a "transmitting utility" as such term is defined in Section
9-102(a)(80) of the UCC and to file any addendum required to be attached
thereto.
7.4 Authority of Administrative Agent. Each Pledgor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Agreement with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any option,
voting right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Pledgors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, it being understood that the Administrative Agent shall be the only
party entitled to exercise remedies under this Agreement; and no Pledgor shall
be under any obligation, or entitlement, to make any inquiry respecting such
authority.
SECTION 8
MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by each affected Pledgor and the Administrative
Agent; provided that (i) any provision of this Agreement imposing obligations on
any Pledgor may be waived by the Administrative Agent in a written instrument
executed by the Administrative Agent, (ii) any addition of any additional
Pledgor pursuant to Section 8.15 shall not require the consent of any Lender and
(iii) the updating or amending of the Schedules to this Agreement pursuant to
the terms of this Agreement (including, without limitation, pursuant to Section
8.16 hereof) shall not require the consent of the Administrative Agent or any
Lender.
8.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing and shall be
delivered by hand
37
or overnight courier service, mailed by certified or registered mail or sent by
facsimile or, subject to the last sentence of this Section 8.2 by electronic
mail and, unless otherwise expressly provided herein, shall be deemed to have
been duly given or made on the date of receipt, addressed as follows in the case
of the Administrative Agent, and as set forth on Schedule 8.2 in the case of the
Pledgors, or to such other address as may be hereafter notified by the
respective parties hereto:
▇▇▇▇▇▇ Commercial Paper Inc. - Agency Services,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Any party hereto may change its address or facsimile number
for notices and other communications hereunder by notice to the other parties
hereto. Electronic mail and Internet and intranet websites may be used only to
distribute Secured Documents for execution by the parties thereto, and may not
be used for any other purpose unless consented to by the Borrower and the
Administrative Agent in writing prior to any applicable distribution, notice or
other communication.
8.3 No Waiver by Course of Conduct; Cumulative Remedies. The
Administrative Agent shall not by any act (except by a written instrument
pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Administrative Agent any right, power or privilege hereunder shall
operate as a waiver thereof. No single or partial exercise of any right, power
or privilege hereunder shall preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. A waiver by the
Administrative Agent of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative Agent
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each Pledgor
agrees to pay, reimburse, indemnify and hold harmless each Lender, including the
Administrative Agent, to the same extent and on the same terms that the Borrower
is required to do so in accordance with Section 9.03 of the Credit Agreement.
(b) Each Pledgor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other similar taxes which may be payable or determined to be payable
with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
38
(c) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under the Credit
Agreement and the other Loan Documents.
8.5 Successors and Assigns. The Pledgors agree that this
Agreement and the rights hereunder may in the discretion of the Lenders, or any
of them, as applicable, be assigned in whole or in part in connection with any
assignment of the Credit Agreement or the Indebtedness evidenced thereby, as
permitted thereunder. This Agreement shall be binding upon the successors and
assigns of each Pledgor and shall inure to the benefit of the Administrative
Agent and the other Secured Parties and their permitted successors and assigns;
provided, that no Pledgor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent and any purported assignment, transfer or delegation in
violation of this Section 8.5 shall be null and void.
8.6 Set-Off. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized by each Pledgor at any time and
from time to time, to the fullest extent permitted by law, to set-off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other obligations at any time owing by such Lender to or
for the credit or the account of such Pledgor, as the case may be, against any
of and all the obligations of such Pledgor, as the case may be, now or hereafter
existing under this Agreement held by such Lender irrespective of whether or not
such Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of such Lender under this Section 8.6
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have. Any Lender exercising a set-off pursuant to this
Section 8.6 shall give notice thereof to such Pledgor, as the case may be, as
soon as reasonably practicable thereafter.
8.7 Counterparts; Binding Effect. This Agreement may be
executed by one or more of the parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. This
Agreement shall become effective as to any Pledgor when a counterpart hereof
executed on behalf of such Pledgor shall have been delivered to the
Administrative Agent and a counterpart hereof shall have been executed on behalf
of the Administrative Agent, and thereafter shall be binding upon such Pledgor
and the Administrative Agent and their respective successors and assigns
permitted under Section 8.5, and shall inure to the benefit of such Pledgor, the
Administrative Agent and their respective successors and assigns permitted under
Section 8.5.
8.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
39
8.9 Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
8.10 Integration. This Agreement and the other Secured
Documents represent the agreement of the Pledgors, the Administrative Agent and
the other Secured Parties with respect to the subject matter hereof and thereof,
and there are no promises, undertakings, representations or warranties by the
Administrative Agent or any other Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the other
Secured Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each Pledgor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the Courts of the
State of New York, the courts of the United States of America for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may
be brought in such courts and waives any objection that it may now or hereafter
have to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage prepaid, to
such Pledgor at its address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or consequential
damages.
8.13 Acknowledgments. Each Pledgor hereby acknowledges that:
(a) it has been advised by counsel in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party;
40
(b) neither the Administrative Agent nor any other
Secured Party has any fiduciary relationship with or duty to any Pledgor arising
out of or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Pledgors, on the one hand, and the
Administrative Agent and other Secured Parties, on the other hand, in connection
herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the
other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Secured Parties or among the Pledgors and the
Secured Parties.
8.14 WAIVER OF JURY TRIAL. EACH PLEDGOR AND THE ADMINISTRATIVE
AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Pledgors. Each Subsidiary of the Borrower that
is required to become a party to this Agreement pursuant to Section 5.14 of the
Credit Agreement shall become a Pledgor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in
substantially the form of Annex I hereto. Upon the execution and delivery by any
Subsidiary of an Assumption Agreement, the supplemental schedules attached to
such Assumption Agreement shall be incorporated into and become a part of and
supplement the Schedules to this Guarantee and Collateral Agreement and each
reference to such Schedules shall mean and be a reference to such Schedules as
supplemented pursuant to each Assumption Agreement.
8.16 Releases. (a) On the Termination Date, the Collateral
shall be automatically released from the Liens created hereby, and this
Agreement and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Pledgor hereunder shall
automatically terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
Pledgors. At the request and sole expense of any Pledgor following any such
termination, the Administrative Agent shall deliver to such Pledgor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Pledgor such documents as such Pledgor shall reasonably request to
evidence such termination; and
(b) If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Pledgor (other than to another
Pledgor) in a transaction permitted by the Credit Agreement and the New
Indenture, then (i) the Liens created hereby on such Collateral shall
automatically terminate and (ii) the Administrative Agent, at the request and
sole expense of such Pledgor, shall execute and deliver to such Pledgor all
releases or other documents reasonably necessary to evidence such automatic
release of the Liens created hereby on such Collateral. At the request and sole
expense of the Borrower, a Pledgor which is a subsidiary of the Borrower shall
be automatically released from its obligations hereunder in the event that all
the Capital Stock of such Pledgor shall
41
be sold, transferred or otherwise disposed of by any Pledgor (other than to
another Pledgor) in a transaction permitted by the Credit Agreement and any
Collateral in which a Lien has been granted hereunder by such Pledgor shall be
automatically terminated. The Administrative Agent shall take all actions
reasonably necessary to evidence such automatic release of such obligations and
the release of the Liens created hereby on all Collateral owned by such Pledgor,
provided that the Borrower shall have delivered to the Administrative Agent, at
least three Business Days prior to the date of the proposed release, a written
request for release identifying the relevant Pledgor.
42
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee and Collateral Agreement to be duly executed and delivered as of the
date first above written.
RURAL CELLULAR CORPORATION
By:___________________________________
Name:
Title:
RCC MINNESOTA, INC.
By:___________________________________
Name:
Title:
RCC HOLDINGS, INC.
By:___________________________________
Name:
Title:
BMCT EQUIPMENT COMPANY L.L.C.
By:___________________________________
Name:
Title:
FERRY EQUIPMENT COMPANY L.L.C.
By:___________________________________
Name:
Title:
43
RCC PAGING, INC.
By:___________________________________
Name:
Title:
RGI GROUP, INC.
By:___________________________________
Name:
Title:
TLA SPECTRUM, LLC
By:___________________________________
Name:
Title:
RCC NETWORK, INC.
By:___________________________________
Name:
Title:
RCC TRANSPORT, INC.
By:___________________________________
Name:
Title:
RCC ATLANTIC LONG DISTANCE, INC.
By:___________________________________
Name:
Title:
▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, INC.
By:___________________________________
Name:
Title:
ALEXANDRIA INDEMNITY CORPORATION
By:___________________________________
Name:
Title:
AGREED AND ACCEPTED
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
By:___________________________________
Name:
Title:
Schedule 4.2
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
[List each office where a financing statement is to be filed]
Patent and Trademark Filings
[List all filings]
Actions with respect to Pledged Stock
Certificates representing shares of Pledged Stock to be delivered to
Administrative Agent with an undated stock power executed in blank attached
thereto.
Sched. 4.2 - Page 1
Schedule 4.3
JURISDICTION OF ORGANIZATION AND LOCATION OF CHIEF
EXECUTIVE OFFICE
Location of Chief
Pledgor Jurisdiction Executive Office
------- ------------ ----------------
Sched. 4.3 - Page 1
Schedule 4.4
INVENTORY AND EQUIPMENT
Debtor State
------ -----
Sched. 4.4 - Page 1
Schedule 4.5
DESCRIPTION OF PLEDGED SECURITIES
PLEDGED STOCK:
Registered Stock Number and Class of Percentage of Equity
Owner Issuer Certificate No. Shares Interest
----- ------ --------------- ------ --------
PLEDGED NOTES:
Date of Maturity
Issuer Payee Principal Amount Note Date
------ ----- ---------------- ---- ----
Sched. 4.5 - Page 1
Schedule 4.7
COPYRIGHTS AND COPYRIGHT LICENSES OWNED BY [NAME OF
PLEDGOR]
[Make a separate page of Schedule 4.2 for each Pledgor and state if no
copyrights are owned. List in numerical order by Registration No.]
U.S. Copyright Registrations
Title Reg. No. Author
----- -------- ------
Pending U.S. Copyright Applications for Registration
Title Author Class Date Filed
----- ------ ----- ----------
Copyright Licenses
Jurisdiction Licensor Licensee Description of License
------------ -------- -------- ----------------------
PATENTS AND PATENT LICENSES OWNED BY [NAME OF PLEDGOR]
[Make a separate page of Schedule 4.2 for each Pledgor and state if no patents
are owned. List in numerical order by Patent No./Patent Application No.]
U.S. Patent Registrations
Patent Numbers Issue Date
-------------- ----------
Sched. 4.7 - Page 1
U.S. Patent Applications
Patent Application No. Filing Date
---------------------- -----------
Patent Licenses
Jurisdiction Licensor Licensee Description of License
------------ -------- -------- ----------------------
Sched. 4.7 - Page 2
TRADEMARK, TRADEMARK LICENSES AND TRADE NAMES OWNED BY
[NAME OF PLEDGOR]
[Make a separate page of Schedule 4.2 for each Pledgor and state if no
trademarks/trade names are owned. List in numerical order by Trademark
Registration/Application no.]
U.S. Trademark Registrations
▇▇▇▇ Reg. Date Reg. No.
---- --------- --------
U.S. Trademark Applications
▇▇▇▇ Filing Date Application No.
---- ----------- ---------------
State Trademark Registrations
[List in alphabetical order by state/numerical order by Registration no. within
each state]
State ▇▇▇▇ Reg. Date Reg. No.
----- ---- --------- --------
State Trademark Applications
[List in alphabetical order by state/numerical order by Application no. within
each state]
State ▇▇▇▇ Reg. Date Reg. No.
----- ---- --------- --------
Trademark Licenses
Jurisdiction ▇▇▇▇ Licensor Licensee
------------ ---- -------- --------
Trade Names
Sched. 4.7 - Page 3
Country(s) Where Used Trade Names
--------------------- -----------
Sched. 4.7 - Page 4
Schedule 4.8
DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS
Sched. 4.8 - Page 1
Schedule 4.9
FCC LICENSES
Sched. 4.9 - Page 1
Schedule 4.10
TRANSMITTING UTILITIES
Sched. 4.10 - Page 1
Schedule 4.11
COMMERCIAL TORT CLAIMS
Sched. 4.11 - Page 1
Schedule 4.12
LETTER-OF-CREDIT RIGHTS
Sched. 4.12 - Page 1
Schedule 8.2
NOTICE ADDRESSES OF PLEDGORS
Name Address
---- -------
Sched. 8.2 - Page 1
ANNEX I TO
GUARANTEE AND COLLATERAL AGREEMENT
ASSUMPTION AGREEMENT, dated as of ________________, 200_ (this
"Assumption Agreement"), made by ______________________________, a
______________ (the "Additional Pledgor"), in favor of ___________________, as
Administrative Agent for the Lenders. All capitalized terms not defined herein
shall have the meaning ascribed to them in the Guarantee and Collateral
Agreement (as defined below).
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders, the Administrative Agent
and Bank of America, N.A., as Documentation Agent, have entered into a Credit
Agreement, dated as of March 25, 2004 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement");
WHEREAS, in connection with the Credit Agreement, the Borrower
and certain of its Affiliates (other than the Additional Pledgor) have entered
into the Guarantee and Collateral Agreement, dated as of March 25, 2004 (as
amended, supplemented or otherwise modified from time to time, the "Guarantee
and Collateral Agreement") in favor of the Administrative Agent for the benefit
of the Secured Parties;
WHEREAS, the Credit Agreement requires the Additional Pledgor
to become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Pledgor has agreed to execute and
deliver this Assumption Agreement in order to become a party to the Guarantee
and Collateral Agreement;
NOW, THEREFORE, IT IS AGREED:
1. Guarantee and Collateral Agreement. By executing and
delivering this Assumption Agreement, the Additional Pledgor, as provided in
Section 8.15 of the Guarantee and Collateral Agreement, hereby becomes a party
to the Guarantee and Collateral Agreement as a Pledgor thereunder with the same
force and effect as if originally named therein as a Pledgor and, without
limiting the generality of the foregoing, hereby expressly assumes all
obligations and liabilities of a Pledgor thereunder. In furtherance of the
foregoing, the Additional Pledgor, as security for the payment and performance
in full of the Obligations, does (x) hereby create and grant to the
Administrative Agent, its successors and assigns, for the benefit of the other
Secured Parties a security interest in all of the Additional Pledgor's right,
title and interest in and to the Collateral of the Additional Pledgor and (y)
jointly and severally with the other Guarantors, unconditionally and irrevocably
guarantees the prompt and complete payment and performance by the Borrower when
due (whether at the stated maturity by
Annex I - Page 1
acceleration or otherwise) of the Borrower Obligations. Each reference to a
"Subsidiary", a "Pledgor" or a "Guarantor" in the Guarantee and Collateral
Agreement shall be deemed to include the Additional Pledgor. The Guarantee and
Collateral Agreement is hereby incorporated herein by reference. The information
set forth in Annex 1-A hereto (A) is true and correct as of the date hereof in
all material respects and (B) is hereby added to the information set forth in
Schedules ____________(1) to the Guarantee and Collateral Agreement and the
Schedules shall be deemed so amended. The Additional Pledgor hereby represents
and warrants that [(i)] each of the representations and warranties contained in
Section 4 of the Guarantee and Collateral Agreement applicable to it is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date [and, (ii) that it is not a person
primarily engaged in the business of transmitting communications electrically,
electromagnetically or by light].(2)
2. Intercreditor Agreement. By executing and delivering this
Assumption Agreement, the Additional Pledgor, as provided in Section 1 of the
Intercreditor Agreement, hereby becomes a party to the Intercreditor Agreement
with the same force and effect as if originally named therein as a party thereto
and, without limiting the generality of the foregoing, hereby expressly assumes
all obligations applicable to it thereunder.
3. Representations of Additional Pledgor. The Additional
Pledgor represents and warrants to the Administrative Agent for the benefit of
the Secured Parties that this Assumption Agreement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
4. Counterparts; Binding Effect. This Assumption Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
taken together shall constitute a single contract. This Assumption Agreement
shall become effective when (a) the Administrative Agent shall have received a
counterpart of this Assumption Agreement that bears the signature of the
Additional Pledgor and (b) the Administrative Agent has executed a counterpart
hereof. Delivery of an executed counterpart of a signature page of this
Assumption Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Assumption Agreement.
5. Full Force and Effect. Except as expressly supplemented
hereby, the Guarantee and Collateral Agreement shall remain in full force and
effect.
--------------------
(1) Refer to each Schedule which needs to be supplemented.
(2) If the Additional Pledgor is a "Transmitting Utility," delete this
sub-clause and add such Additional Pledgor to Schedule 4.10.
Annex I - Page 2
6. Severability. Any provision of this Assumption Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
in such jurisdiction of the remaining provisions hereof and of the Guarantee and
Collateral Agreement; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
7. Notices. All communications and notices hereunder shall be
in writing and given as provided in Section 8.2 of the Guarantee and Collateral
Agreement. All communications and notices hereunder to the Additional Pledgor
shall be given to it at the address set forth under its signature below.
8. Fees and Expenses. The Additional Pledgor agrees to
reimburse the Administrative Agent for its reasonable out-of-pocket expenses in
connection with the extension and delivery of this Assumption Agreement,
including the reasonable fees and disbursements of outside counsel for the
Administrative Agent.
9. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
Annex I - Page 3
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL PLEDGOR]
By: __________________________________
Name:
Title:
AGREED TO AND ACCEPTED
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
By: ______________________________
Name:
Title:
Annex I - Page 4
EXHIBIT A TO
GUARANTEE AND COLLATERAL AGREEMENT
Existing Control Agreement
Exhibit A - Page 1
EXECUTION COPY
GUARANTEE AND COLLATERAL AGREEMENT
made by
RURAL CELLULAR CORPORATION
and
THE OTHER PLEDGORS FROM TIME TO
TIME A PARTY HERETO
in favor of
▇▇▇▇▇▇ COMMERCIAL PAPER INC.,
as Administrative Agent
Dated as of March 25, 2004
TABLE OF CONTENTS
Page
----
SECTION 1 DEFINED TERMS....................................................................... 2
1.1 Definitions............................................................... 2
1.2 Other Definitional Provisions............................................. 8
SECTION 2 GUARANTEE........................................................................... 8
2.1 Guarantee................................................................. 8
2.2 Right of Contribution..................................................... 9
2.3 No Subrogation............................................................ 10
2.4 Amendments, etc. with respect to the Borrower Obligations................. 10
2.5 Guarantee Absolute and Unconditional...................................... 10
2.6 Reinstatement............................................................. 11
2.7 Payments.................................................................. 12
2.8 Information............................................................... 12
SECTION 3 GRANT OF SECURITY INTEREST.......................................................... 12
SECTION 4 REPRESENTATIONS AND WARRANTIES...................................................... 13
4.1 Title; No Other Liens..................................................... 14
4.2 Perfected First Priority Liens............................................ 14
4.3 Jurisdiction of Organization; Chief Executive Office...................... 15
4.4 Inventory and Equipment................................................... 15
4.5 Pledged Securities........................................................ 15
4.6 Receivables............................................................... 16
4.7 Intellectual Property..................................................... 16
4.8 Deposit Accounts; Securities Accounts..................................... 16
4.9 FCC Licenses.............................................................. 16
4.10 Transmitting Utility...................................................... 16
4.11 Commercial Tort Claims.................................................... 16
4.12 Letter-of-Credit Rights................................................... 17
4.13 Material Collateral....................................................... 17
SECTION 5 COVENANTS........................................................................... 17
5.1 Covenants in Credit Agreement............................................. 17
5.2 Delivery of Instruments and Chattel Paper................................. 17
5.3 Intentionally Omitted..................................................... 17
5.4 Maintenance of Perfected Security Interest; Further Documentation......... 17
5.5 Changes in Locations, Name, etc........................................... 18
5.6 Notices................................................................... 18
5.7 Pledged Securities; Securities Accounts; Deposit Accounts................. 18
5.8 Receivables............................................................... 20
5.9 Intellectual Property..................................................... 20
5.10 Electronic Chattel Paper and Transferable Records......................... 21
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TABLE OF CONTENTS
(Continued)
Page
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5.11 FCC Compliance............................................................ 22
5.12 Letter-of-Credit Rights................................................... 22
5.13 Commercial Tort Claims.................................................... 22
5.14 Alexandria Regulatory Reserve Account..................................... 22
5.15 License-Only Subsidiaries................................................. 23
5.16 Permitted Control Agreement............................................... 25
SECTION 6 REMEDIAL PROVISIONS................................................................. 27
6.1 Certain Matters Relating to Receivables................................... 27
6.2 Communications with Obligors; Pledgors Remain Liable...................... 27
6.3 Pledged Securities........................................................ 28
6.4 Proceeds to be Turned Over to Administrative Agent........................ 29
6.5 Application of Proceeds................................................... 30
6.6 Code and Other Remedies................................................... 30
6.7 Private Sale.............................................................. 31
6.8 Deficiency................................................................ 31
6.9 Grant of License to Use Intellectual Property............................. 31
6.10 Bankruptcy................................................................ 32
6.11 Changes in Applicable Law................................................. 32
SECTION 7 THE ADMINISTRATIVE AGENT............................................................ 33
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc............... 33
7.2 Duties of Administrative Agent............................................ 35
7.3 Filing of Financing Statements............................................ 35
7.4 Authority of Administrative Agent......................................... 36
SECTION 8 MISCELLANEOUS....................................................................... 36
8.1 Amendments in Writing..................................................... 36
8.2 Notices................................................................... 36
8.3 No Waiver by Course of Conduct; Cumulative Remedies....................... 37
8.4 Enforcement Expenses; Indemnification..................................... 37
8.5 Successors and Assigns.................................................... 38
8.6 Set-Off................................................................... 38
8.7 Counterparts; Binding Effect.............................................. 38
8.8 Severability.............................................................. 38
8.9 Section Headings.......................................................... 39
8.10 Integration............................................................... 39
8.11 GOVERNING LAW............................................................. 39
8.12 Submission To Jurisdiction; Waivers....................................... 39
8.13 Acknowledgments........................................................... 39
8.14 WAIVER OF JURY TRIAL...................................................... 40
8.15 Additional Pledgors....................................................... 40
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TABLE OF CONTENTS
(Continued)
Page
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8.16 Releases.................................................................. 40
SCHEDULES
4.2 - Filings And Other Actions Required To Perfect Security
4.3 - Jurisdiction of Organization and Location of Chief Executive Office
4.4 - Inventory and Equipment
4.5 - Description of Pledged Securities
4.7 - Intellectual Property
4.8 - Deposit Accounts/Securities Accounts/Commodity Accounts
4.9 - Licenses
4.10 - Transmitting Utilities
4.11 - Commercial Tort Claims
4.12 - Letter-of-Credit Rights
8.2 - Interests Notice Address of Pledgors
ANNEXES
I - Form of Assumption Agreement
EXHIBITS
A - Existing Control Agreement
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