Exhibit 10.4
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AMENDED AND RESTATED SECURITY AGREEMENT
among
CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.
CONSOLIDATED COMMUNICATIONS, INC.
CONSOLIDATED COMMUNICATIONS ACQUISITION TEXAS, INC.,
the Subsidiary Guarantors named herein,
and
Each Other Grantor
From Time to Time Party Hereto,
as Grantors,
and
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
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Dated as of [ ], 2005
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TABLE OF CONTENTS
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ARTICLE I
Definitions
SECTION 1.01. Uniform Commercial Code Defined Terms.................................................... 2
SECTION 1.02. Credit Agreement Defined Terms........................................................... 2
SECTION 1.03. Definition of Certain Terms Used Herein.................................................. 2
SECTION 1.04. Rules of Construction.................................................................... 9
ARTICLE II
Security Interest
SECTION 2.01. Security Interest........................................................................ 9
SECTION 2.02. No Assumption of Liability............................................................... 10
ARTICLE III
Representations and Warranties
SECTION 3.01. Title and Authority...................................................................... 10
SECTION 3.02. Perfection Certificate; UCC Filings...................................................... 10
SECTION 3.03. Validity of Security Interest............................................................ 11
SECTION 3.04. Limitations on and Absence of Other Liens................................................ 11
SECTION 3.05. Other Actions............................................................................ 12
SECTION 3.06. No Conflicts, Consents, etc.............................................................. 15
SECTION 3.07. No Claims................................................................................ 15
SECTION 3.08. Special Property......................................................................... 15
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of Business....................... 15
SECTION 4.02. Protection of Security................................................................... 16
SECTION 4.03. Further Assurances....................................................................... 16
SECTION 4.04. Inspection and Verification.............................................................. 16
SECTION 4.05. Taxes; Encumbrances...................................................................... 17
SECTION 4.06. Assignment of Security Interest.......................................................... 17
SECTION 4.07. Continuing Obligations of the Grantors................................................... 17
SECTION 4.08. Use and Disposition of Collateral........................................................ 17
SECTION 4.09. Limitation on Modification of Accounts................................................... 17
SECTION 4.10. Legend................................................................................... 17
SECTION 4.11. Certain Covenants and Provisions Regarding Patent, Trademark and Copyright Collateral.... 18
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ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default.................................................................... 19
SECTION 5.02. Application of Proceeds.................................................................. 22
SECTION 5.03. Collateral Agent's Calculations.......................................................... 23
SECTION 5.04. Grant of License to Use Intellectual Property............................................ 23
ARTICLE VI
Collateral Account
SECTION 6.01. Establishment of Collateral Account...................................................... 24
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices.................................................................................. 24
SECTION 7.02. Security Interest Absolute............................................................... 24
SECTION 7.03. Survival of Agreement.................................................................... 25
SECTION 7.04. Binding Effect........................................................................... 25
SECTION 7.05. Successors and Assigns................................................................... 25
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification.................................... 25
SECTION 7.07. Filings.................................................................................. 26
SECTION 7.08. Collateral Agent Appointed Attorney-in-Fact.............................................. 26
SECTION 7.09. GOVERNING LAW............................................................................ 27
SECTION 7.10. Waivers; Amendment; Several Agreement.................................................... 27
SECTION 7.11. WAIVER OF JURY TRIAL..................................................................... 27
SECTION 7.12. Severability............................................................................. 28
SECTION 7.13. Counterparts............................................................................. 28
SECTION 7.14. Headings................................................................................. 28
SECTION 7.15. Jurisdiction; Consent to Service of Process.............................................. 28
SECTION 7.16. Termination.............................................................................. 29
SECTION 7.17. Additional Grantors...................................................................... 29
SCHEDULES
Schedule I Domestic Subsidiaries
Schedule II Commercial Tort Claims
ANNEXES
Annex I Form of Joinder Agreement
Annex II Form of Perfection Certificate
Annex III Form of Bailee Letter
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AMENDED AND RESATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT (as amended, amended and restated,
supplemented or otherwise modified from time to time, this "Agreement") dated as
of [ ], 2005 among CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. (f/k/a "CCI
Illinois Holdings") ("CCI Holdings"), a Delaware corporation, CONSOLIDATED
COMMUNICATIONS, INC. (the "CCI Borrower"), an Illinois corporation, CONSOLIDATED
COMMUNICATIONS ACQUISITION TEXAS, INC. (the "TXU Borrower" and together with the
CCI Borrower, the "Borrowers"), a Delaware corporation, each Subsidiary of
either Borrower listed on Schedule I hereto (collectively, together with each
Subsidiary of either Borrower that becomes a party hereto pursuant to Section
7.17 of this Agreement, the "Subsidiary Guarantors" and, together with CCI
Holdings and the Borrowers, the "Grantors") and CITICORP NORTH AMERICA, INC., as
collateral agent (in such capacity, and together with any successors in such
capacity, the "Collateral Agent") for the Secured Parties (as defined herein).
R E C I T A L S
A. CCI Holdings, the Borrowers, Citicorp North America, Inc., as
administrative agent (in such capacity and together with any successors in such
capacity, the "Administrative Agent"), Credit Suisse First Boston, acting
through its Cayman Island branch, ("CSFB") and Deutsche Bank Securities Inc., as
Co-Syndication Agents, CSFB and Citigroup Global Markets Inc., as joint lead
arrangers and lead bookrunners, CoBank, ACB, as documentation agent, and each
lending institution from time to time party thereto in the capacity of a Lender
(the "Lenders") have, in connection with the execution and delivery of this
Agreement, entered into that certain Second Amended and Restated Credit
Agreement, dated as of February 23, 2005 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
providing for the making of Loans to the Borrowers and the issuance of, and
participations in, Letters of Credit for the account of the Borrowers, pursuant
to, and upon the terms and subject to the conditions specified in, the Credit
Agreement.
B. The parties hereto are all parties to the Security Agreement (the
"Existing Security Agreement"), dated as of April 14, 2004, entered into in
connection with the Original Credit Agreement (as defined in the Credit
Agreement).
C. In connection with the execution of the Credit Agreement, the
parties wish to amend and restate the Existing Security Agreement pursuant to
this Agreement.
D. CCI Holdings and each Subsidiary of the Borrowers that is a
Subsidiary Guarantor have, pursuant to the Amended and Restated Guarantee
Agreement (the "Guarantee Agreement"), dated as of the date hereof, among other
things, unconditionally guaranteed the Guaranteed Obligations;
E. CCI Holdings and the Borrowers and each Subsidiary Guarantor will
receive substantial benefits from the execution, delivery and performance of the
obligations under the Credit Agreement and is, therefore, willing to enter into
this Agreement.
F. Certain of the Lenders and Affiliates of Lenders (the "Existing
Hedging Exchangers") on the Restatement Effective Date are parties to the
Hedging Agreements set forth on Schedule
6.01(a)(iii) of the Credit Agreement and it is contemplated that, to the extent
permitted by the Credit Agreement, one or more of the Grantors may enter into
one or more Hedging Agreements relating to the Loans with one or more Persons
that were Lenders or Affiliates of a Lender at the time such Hedging Agreements
were entered into (together with the Existing Hedging Exchangers, collectively,
the "Hedging Exchangers").
G. Contemporaneously with the execution and delivery of this Agreement,
the Grantors have executed and delivered to the Collateral Agent an Amended and
Restated Pledge Agreement (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Pledge Agreement").
H. This Agreement is given by each Grantor in favor of the Collateral
Agent for the benefit of the Secured Parties to secure the payment and
performance of all of its Obligations (as hereinafter defined).
NOW THEREFORE, in consideration of the foregoing and other benefits
accruing to each Grantor, the receipt and sufficiency of which are hereby
acknowledged, each Grantor hereby makes the following representations and
warranties to the Collateral Agent for the benefit of the Secured Parties (and
each of their respective successors and assigns), as follows:
ARTICLE I
Definitions
SECTION 1.01. Uniform Commercial Code Defined Terms. Unless otherwise
defined herein, terms used herein that are defined in the UCC shall have the
meanings assigned to them in the UCC, including the following which are
capitalized herein:
"Accounts"; "Bank"; "Certificates of Title"; "Chattel Paper";
"Commercial Tort Claim"; "Commodity Account"; "Commodity Contract";
"Commodity Customer"; "Commodity Intermediary"; "Deposit Accounts";
"Documents"; "Electronic Chattel Paper"; "Entitlement Holder";
"Entitlement Order"; "Equipment"; "Financial Asset"; "Fixtures"; "Goods";
"Instruments" (as defined in Article 9 rather than Article 3);
"Inventory"; "Investment Property"; "Letter-of-Credit Rights"; "Letters of
Credit"; "Securities"; "Securities Account"; "Securities Intermediary";
"Security Entitlement"; "Supporting Obligations"; and "Tangible Chattel
Paper".
SECTION 1.02. Credit Agreement Defined Terms. Capitalized terms used but
not otherwise defined herein that are defined in the Credit Agreement shall have
the meanings given to them in the Credit Agreement.
SECTION 1.03. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of an Account.
"Accounts Receivable" shall mean all Accounts and all right, title and
interest in any returned goods, together with all rights, titles, securities and
guarantees with respect thereto, including any
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rights to stoppage in transit, replevin, reclamation and resales, and all
related security interests, liens and pledges, whether voluntary or involuntary,
in each case whether now existing or owned or hereafter arising or acquired.
"Bailee Letter" shall be an agreement in form substantially similar to
Annex III hereto.
"Books and Records" shall mean all instruments, files, records, ledger
sheets and documents evidencing, covering or relating to any of the Collateral.
"Borrowers" shall have the meaning assigned to such term in the Recitals
of this Agreement.
"Charges" shall mean any and all property and other taxes, assessments and
special assessments, levies, fees and all governmental charges imposed upon or
assessed against, and all claims (including, without limitation, landlords',
carriers', mechanics', maritime, workmen's, repairmen's, laborers',
materialmen's, suppliers' and warehousemen's Liens and other claims arising by
operation of law) against, all or any portion of the Collateral.
"Collateral" shall mean with respect to each of the Grantors all of the
following, in each case, whether now owned or hereafter acquired:
(a) Accounts Receivable;
(b) Books and Records;
(c) cash and Deposit Accounts;
(d) Chattel Paper;
(e) Collateral Account and Collateral Account Funds;
(f) Commercial Tort Claims described on Schedule II annexed
hereto;
(g) Documents;
(h) Equipment;
(i) Fixtures;
(j) General Intangibles;
(k) Goods;
(l) Instruments;
(m) Inventory;
(n) Investment Property;
(o) Letter-of-Credit Rights;
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(p) Letters of Credit;
(q) Transaction Documents;
(r) Supporting Obligations;
(s) Intellectual Property;
(t) to the extent not covered by clauses (a) through (s) of this
definition, all other personal property, whether tangible or
intangible; and
(u) Proceeds of any and all of the foregoing;
provided that, for purposes of this Agreement, "Collateral" shall not include
(i) any Securities Collateral or (ii) any Excluded Property.
"Collateral Account" shall mean that collateral account established
pursuant to Section 6.01 of this Agreement.
"Collateral Account Funds" shall mean, collectively, the following from
time to time on deposit in the Collateral Account: all funds, investments
(including, without limitation, all Permitted Investments) and all certificates
and instruments from time to time representing or evidencing such investments;
all notes, certificates of deposit, checks and other instruments from time to
time hereafter delivered to or otherwise possessed by the Collateral Agent for
or on behalf of any Grantor in substitution for, or in addition to, any or all
of the Collateral; and all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the items constituting Collateral.
"Collateral Agent Fees" means all fees and expenses of the Collateral
Agent payable by the Grantors pursuant to Section 7.06.
"Control" shall mean (i) in the case of each Deposit Account, "control,"
as such term is defined in Section 9-104 of the UCC, (ii) in the case of any
Security Entitlement, "control," as such term is defined in Section 8-106(d) of
the UCC, and (iii) in the case of any Commodity Contract, "control," as such
term is defined in Section 9-106(b) of the UCC.
"Control Agreement" shall mean an agreement in form and substance
reasonably acceptable to the Collateral Agent for the purpose of effecting
Control with respect to any Deposit Account or Securities Account.
"Copyright License" shall mean each written agreement, now or hereafter in
effect, granting any right to any third party under any Copyright now or
hereafter owned by any Grantor or which such Grantor otherwise has the right to
license, or granting any right to such Grantor under any Copyright now or
hereafter owned by any third party, and all rights of such Grantor under any
such agreement.
"Copyrights" shall mean, collectively, with respect to each Grantor, all
copyrights (whether statutory or common law, whether established or registered
in the United States by a Grantor or established or registered in any other
country or any political subdivision thereof by a Grantor if the beneficial
interest is owned by such Grantor, whether registered or unregistered and
whether published or
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unpublished) and all copyright registrations and applications made by such
Grantor, in each case, whether now owned or hereafter created or acquired by or
assigned to such Grantor, including, without limitation, the copyrights,
registrations and applications listed in Schedule 14(b) of the Perfection
Certificate, together with any and all (i) rights and privileges arising under
applicable law with respect to such Grantor's use of such copyrights, (ii)
reissues, renewals, continuations and extensions thereof, (iii) income, fees,
royalties, damages, claims and payments now or hereafter due and/or payable with
respect thereto, including, without limitation, damages and payments for past,
present or future infringements thereof, (iv) rights corresponding thereto
throughout the world and (v) rights to ▇▇▇ for past, present or future
infringements thereof.
"Credit Agreement" shall have the meaning assigned to such term in the
Recitals of this Agreement.
"Distribution Date" shall mean, upon the occurrence and during the
continuance of an Event of Default, each date fixed by the Collateral Agent in
its sole discretion for a distribution to the Secured Parties of funds held in
the Collateral Account.
"Equipment" shall mean collectively, with respect to each Grantor, all
"equipment," as such term is defined in the UCC, and, in any event shall
include, without limitation, all machinery, apparatus, equipment, office
machinery, electronic data-processing equipment, computers and computer hardware
and software (whether owned or licensed), furniture, conveyors, tools,
materials, storage and handling equipment, automotive equipment, motor vehicles,
tractors, trailers and other like property, whether or not the title thereto is
governed by a certificate of title or ownership, and all other equipment of
every kind and nature owned by such Grantor or in which such Grantor may have
any interest (to the extent of such interest) and all modifications, renewals,
improvements, alterations, repairs, substitutions, attachments, additions,
accessions and other property now or hereafter affixed thereto or used in
connection therewith, all replacements and all parts therefor and together with
all substitutes for any of the foregoing.
"Excluded Accounts" means any Deposit Account which is (i) a "zero balance
account" (i.e., funds are only placed on deposit in such Deposit Account when a
substantially concurrent drawing is expected to be made on such account),
provided that the average daily balance of all such accounts does not exceed at
any time $500,000 for any 10 day period, (ii) used exclusively for holding
amounts withheld from employee wages for medical benefit plans, (iii) used
exclusively to fund workmen's compensation or other disability payments to
employees consistent with past practice or (iv) JPMorgan Chase Bank Account No.
▇▇▇-▇-▇▇▇▇▇, for so long as such account does not have an average daily balance
of more than $200,000 for any 10 day period.
"Excluded Property" means Special Property other than the following:
(a) the right to receive any payment of money (including, without
limitation, any rights referred to in Sections 9-406(d), 9-407(a),
9-408(a) or 9-409(a) of the UCC to the extent that sections of the UCC are
effective to limit the prohibitions which make such property "Special
Property"); and
(b) any proceeds, products, accessions, rents, profits, income,
benefits, substitutions or replacements of any Special Property (unless
such proceeds, products, accessions, rents, profits, income, benefits,
substitutions or replacements themselves would constitute Special
Property).
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"FCC" means the Federal Communications Commission, or any other similar or
successor agency of the federal government administering the Communications Act
of 1934, as amended, or any similar or successor federal statute, and the rules
and regulations thereunder.
"General Intangibles" shall mean, collectively, all "general intangibles,"
as such term is defined in the UCC, and in any event shall include, without
limitation, all choses in action and causes of action and all other intangible
personal property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including all rights and interests in partnerships,
limited partnerships, limited liability companies and other unincorporated
entities, corporate or other business records, indemnification claims, contract
rights (including rights under leases, whether entered into as lessor or lessee,
Hedging Agreements and other agreements), Intellectual Property, goodwill,
registrations, franchises and tax refund claims.
"Guaranteed Obligations" has the meaning given such term in the Guarantee
Agreement.
"Hedging Exchangers" shall have the meaning assigned to such term in the
Recitals of this Agreement.
"Intellectual Property" shall mean all intellectual and similar property
of any Grantor of every kind and nature now owned in the United States by a
Grantor, or with respect to any country other than the United States,
established, registered or recorded by a Grantor and beneficially owned by such
Grantor, or hereafter acquired by any Grantor, including inventions, designs,
Patents, Copyrights, Licenses, Trademarks, trade secrets, confidential or
proprietary technical and business information, know-how, show-how or other data
or information, software and databases and all embodiments or fixations thereof
and related documentation, registrations and franchises, and all additions,
improvements and accessions to, and books and records describing or used in
connection with, any of the foregoing.
"Lenders" shall have the meaning assigned to such term in the Recitals of
this Agreement.
"License" shall mean any Patent License, Trademark License, Copyright
License or other license or sublicense to which any Grantor is a party,
including, without limitation, those listed on Schedules 14(a) and 14(b) of the
Perfection Certificate.
"Net Loss Proceeds" means the aggregate cash proceeds received by either
Borrower or any or its Subsidiaries in respect of any event of loss (including,
without limitation, any Destruction or Taking) triggering the obligation of
either Borrower to repay or offer to repay Obligations under the Loan Documents
for so long as any are outstanding with such Net Loss Proceeds, as determined by
the Collateral Agent.
"Obligations" means with respect to each Borrower, (a) the unpaid
principal of and interest on (including interest accruing after the maturity of
the Loans made to the Borrowers and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding, relating to either Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans
made to or LC Disbursements made pursuant to Letters of Credit issued for the
account of the Borrowers and all other obligations and liabilities of the
Borrowers to any Agent, the Joint Lead Arrangers, the Joint Lead Bookrunners,
the Sydication Agent, the Swingline Lender, the Issuing Bank or to any Lender,
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of,
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or in connection with, the Credit Agreement or any other document made,
delivered or given in connection therewith, whether on account of principal,
interest, fees, indemnities, costs or expenses (including, without limitation,
all reasonable fees, charges and disbursements of counsel), or otherwise, (b)
the due and punctual payment and performance by each Borrower and each other
Loan Party under (i) each Hedging Agreement relating to the Loans entered into
with any Hedging Exchanger and (ii) the Hedging Agreements set forth on Schedule
6.01(a)(iii) of the Credit Agreement and (c) with respect to CCI Holdings and
each Grantor that is a Subsidiary of either Borrower, its Guaranteed Obligations
under the Guarantee Agreement.
"Operative Agreement" shall mean (i) in the case of any limited liability
company or partnership or other non-corporate entity, any membership or
partnership agreement or other organizational agreement or document thereof and
(ii) in the case of any corporation, any charter or certificate of incorporation
and by-laws thereof.
"Patent License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to make, use or sell any invention
on which a Patent, now or hereafter owned by any Grantor or which any Grantor
otherwise has the right to license, is in existence, or granting to any Grantor
any right to make, use or sell any invention on which a Patent, now or hereafter
owned by any third party, is in existence, and all rights of any Grantor under
any such agreement.
"Patents" shall mean all of the following now owned in the United States
by a Grantor, or with respect to any country other than the United States,
registered or recorded by a Grantor and beneficially owned by such Grantor, or
hereafter acquired by any Grantor: (a) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and pending applications in the United
States Patent and Trademark Office or any other country, including those listed
on Schedule 14(a) of the Perfection Certificate, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions thereof,
and the inventions disclosed or claimed therein, including the right to make,
use and/or sell the inventions disclosed or claimed therein.
"Pledge Agreement" shall have the meaning assigned to such term in the
recitals of this Agreement.
"Proceeds" shall mean, collectively, all "proceeds," as such term is
defined in the UCC, and in any event shall include, without limitation, any
consideration received from the sale, exchange, license, lease or other
disposition of any asset or property that constitutes Collateral, any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other Person or entity as a result of the
destruction, loss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Collateral Agent, and (b) any claim of any Grantor against any third party for
(and the right to ▇▇▇ and recover for and the rights to damages or profits due
or accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution of
any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by any
Trademark now or hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future infringement of any
Copyright now or hereafter owned by any Grantor or licensed under a Copyright
License and (c) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
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"PUC" means any state, provincial or other local regulatory agency or body
that exercises jurisdiction over the rates or services or the ownership,
construction or operation of any Telecommunications System or over Persons who
own, construct or operate a Telecommunications System, including without
limitation, the Illinois Commerce Commission and the Public Utility Commission
of Texas, in each case by reason of the nature or type of the business subject
to regulation and not pursuant to laws and regulations of general applicability
to Persons conducting business in any such jurisdiction.
"Secured Parties" means each Agent, the Joint Lead Arrangers, the Joint
Lead Bookrunners, the Syndication Agent, the Documentation Agent, the Swingline
Lender, the Issuing Bank, each Lender and each Hedging Exchanger.
"Securities Collateral" shall have the meaning assigned to such term in
the Pledge Agreement.
"Security Interest" shall have the meaning assigned to such term in
Section 2.01.
"Special Property" means:
(a) any permit, lease, license, license agreement or General
Intangible (including FCC licenses and PUC licenses) held by any Grantor
that validly prohibits the creation by such Grantor of a security interest
therein;
(b) any permit, lease, license, license agreement or other
personal property held by any Grantor to the extent that any Requirement
of Law applicable thereto prohibits the creation of a security interest
therein;
(c) Property owned by any Grantor that is subject to a Lien
securing a Capital Lease Obligation (in each case permitted by the
Indenture) if the contract or other agreement pursuant to which such Lien
is granted (or the documentation providing for such Capital Lease
Obligation) validly prohibits the creation of any other Lien on such
Property;
in each case, only to the extent, and for so long as, such Property, or
Requirement of Law applicable thereto, validly prohibits the creation of a
Lien on such Property in favor of the Collateral Agent (and upon the
termination of such prohibition (howsoever occurring) such Property shall
cease to be "Special Property").
"Subsidiary Guarantors" shall have the meaning assigned to such term in
the Recitals of this Agreement.
"Telecommunications System" means a telephone, long distance, internet,
data services, video and satellite services, wireless telecommunications,
telephone directories, fiber and cable leasing, telecommunications equipment,
including hand sets, rental, leasing, installation, selling or maintenance
system or business and shall include a microwave system or a paging system
operated in connection with (and in the same general service area as) any of the
foregoing systems, and businesses related thereto.
"Trademark License" shall mean any written agreement, now or hereafter in
effect, granting to any third party any right to use any Trademark now or
hereafter owned by any Grantor or that any
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Grantor otherwise has the right to license, or granting to any Grantor any right
to use any Trademark now or hereafter owned by any third party, and all rights
of any Grantor under any such agreement.
"Trademarks" shall mean all of the following now owned in the United
States by a Grantor, or with respect to any country other than the United
States, registered or recorded by a Grantor and beneficially owned by such
Grantor, or hereafter acquired by any Grantor: (a) all trademarks, service
marks, trade names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office, any State of the United States or any similar offices in any
other country or any political subdivision thereof, and all extensions or
renewals thereof, including those listed on Schedule 14(a) of the Perfection
Certificate, (b) all goodwill associated therewith or symbolized thereby and (c)
all other assets, rights and interests that uniquely reflect or embody such
goodwill.
"UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in the State of New York; provided, however, that if by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of the Collateral Agent's and the Secured Parties' security interest in
any item or portion of the Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, the term "UCC"
shall mean the Uniform Commercial Code as in effect on the date hereof in such
other jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection or priority and for purposes of definitions relating to
such provisions.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; or
(5) provisions apply to successive events and transactions.
ARTICLE II
Security Interest
SECTION 2.01. Security Interest. (a) Each Grantor hereby bargains, sells,
conveys, assigns, sets over, mortgages, pledges, hypothecates and transfers to
the Collateral Agent and its successor and assigns, for the ratable benefit of
the Secured Parties, and hereby grants to the Collateral Agent for the ratable
benefit of the Secured Parties, as security for the payment or performance, as
the case may be, in full of the Obligations of such Grantor, a security interest
in, all of such Grantor's right,
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title and interest in, to and under the Collateral, subject to Permitted Liens.
The Liens granted hereunder to secure the Obligations are referred to herein as
the "Security Interest".
Each Grantor hereby affirms its prior grant of security interests under
the Existing Security Agreement in favor of the Collateral Agent for the benefit
of the Secured Parties. Without limiting the foregoing, it is expressly
understood and agreed that all security interests, assignment and liens granted
by the Grantors in favor of the Collateral Agent for the benefit of the Secured
parties in the Existing Security Agreement are not terminated hereby, but
continue and remain in full force and effect, subject to the terms and
provisions hereof.
(b) Without limiting the foregoing, the Collateral Agent is hereby
authorized to file one or more financing statements (including fixture filings),
continuation statements, filings with the United States Patent and Trademark
Office or United States Copyright Office (or any successor office or any similar
office in any other country) or other documents for the purpose of perfecting,
confirming, continuing, enforcing or protecting the Security Interest granted by
each Grantor, without the signature of any Grantor, and naming any Grantor or
the Grantors as debtors and the Collateral Agent as Secured Party.
SECTION 2.02. No Assumption of Liability. The Security Interest is granted
as security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Collateral.
ARTICLE III
Representations and Warranties
Each Grantor represents and warrants to the Collateral Agent and the
Secured Parties, as to itself and as to the Collateral owned by it, that:
SECTION 3.01. Title and Authority. Such Grantor as of the date hereof has
full power and authority to grant to the Collateral Agent the Security Interest
in such Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person other than any consent or approval which has
been obtained except for FCC and PUC approvals required in connection with the
exercise of certain remedies by the Collateral Agent hereunder.
SECTION 3.02. Perfection Certificate; UCC Filings(a) (a) All information
set forth herein and in the Perfection Certificate which would affect the
creation or perfection of liens contemplated hereby and by the other Loan
Documents, has been duly prepared, completed and executed and the information
set forth herein and therein is correct and complete in all material respects.
Except with regard to foreign Intellectual Property, the Collateral described on
the Schedules annexed to the Perfection Certificate constitutes all of the
property of such type of Collateral owned or held by such Grantor on the date
hereof.
(b) Fully completed UCC financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations containing a description of the Collateral have been delivered to
the Collateral Agent for filing in each governmental, municipal or other
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office specified in Schedule 7 to the Perfection Certificate, which, except with
regard to foreign Intellectual Property, are all the filings, recordings and
registrations that are necessary to publish notice of and protect the validity
of and to establish a legal, valid and perfected security interest in favor of
the Collateral Agent (for the benefit of the Secured Parties), in respect of all
Collateral in which the Security Interest may be perfected by filing, recording
or registration under Article 9 of the UCC in the United States (or any
political subdivision thereof) and, with respect to any Instruments and
certificated Securities, possessions, and, no further or subsequent filing,
refiling, recording, rerecording, registration or reregistration under Article 9
of the UCC is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements.
(c) Such Grantor represents and warrants that fully executed
security agreements in the form hereof or in a short form acceptable to the
Collateral Agent and containing a description of all Collateral consisting of
United States Patents, United States registered Trademarks (and Trademarks for
which United States registration applications are pending) and with respect to
United States registered Copyrights have been delivered to the Collateral Agent
for registration with the United States Patent and Trademark Office and for
recordation with the United States Copyright Office pursuant to 35 U.S.C.
Section 261, 15 U.S.C. Section 1060 or 17 U.S.C. Section 205 and the regulations
thereunder, as applicable, and otherwise as may be required pursuant to the laws
of any other necessary jurisdiction to protect the validity of and to establish
a legal, valid and perfected security interest in favor of the Collateral Agent
for the benefit of the Secured Parties in respect of all Collateral consisting
of Patents, Trademarks and Copyrights in which a security interest may be
perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and, except
with regard to foreign Intellectual Property, no further or subsequent filing,
refiling, recording, prerecording, registration or preregistration is necessary
(other than such actions as are necessary to perfect the Security Interest with
respect to any Collateral consisting of Patents, Trademarks and Copyrights (or
registration or application for registration thereof) acquired or developed
after the date hereof).
SECTION 3.03. Validity of Security Interest. The Security Interest
constitutes (a) a legal and valid security interest in all the Collateral
securing the payment and performance of the Obligations, (b) subject to the
filings described in Section 3.02(b) and (c) above, a perfected security
interest in all Collateral in which a security interest may be perfected by
filing, recording or registering a financing statement or analogous document in
the United States (or any political subdivision thereof) and, with respect to
any Instruments and certificated Securities, possessions pursuant to the UCC in
such jurisdictions, (c) a security interest that shall be perfected in all
Collateral in which a security interest may be perfected upon the receipt and
registering and recording of this Agreement with the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, and (d)
a perfected Security Interest in all Collateral in which a security interest may
be perfected by possession or control by the Collateral Agent, in each case, to
the extent required pursuant to the provisions hereof. The Security Interest is
and shall be prior to any other Lien on any of the Collateral, other than
Permitted Liens.
SECTION 3.04. Limitations on and Absence of Other Liens. The Collateral is
owned by such Grantor free and clear of any Lien, except for Permitted Liens.
Such Grantor has not filed or consented to the filing of (a) any financing
statement or analogous document under the UCC or any other applicable laws
covering any Collateral, (b) any assignment in which such Grantor assigns any
Collateral or any security agreement or similar instrument covering any
Collateral with the United States Patent and Trademark Office and the United
States Copyright Office or (c) any assignment in
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which such Grantor assigns any Collateral or any security agreement or similar
instrument covering any Collateral with any foreign governmental, municipal or
other office, which financing statement or analogous document, assignment,
security agreement or similar instrument is still in effect, except, in each
case, for Permitted Liens.
SECTION 3.05. Other Actions. In order to further ensure the attachment,
perfection and priority of, and the ability of the Collateral Agent to enforce,
the Collateral Agent's security interest in the Collateral, such Grantor agrees,
in each case at its own expense, to take the following actions with respect to
the following Collateral:
(a) Instruments and Tangible Chattel Paper. As of the date hereof,
each Grantor hereby represents and warrants as to itself that (i) no
amount individually or in the aggregate in excess of $100,000 payable
under or in connection with any of the Collateral is evidenced by any
Instrument or Tangible Chattel Paper other than such Instruments and
Tangible Chattel Paper listed in Schedule 12 of the Perfection Certificate
and (ii) each such Instrument and each such item of Tangible Chattel Paper
has been properly endorsed, assigned and delivered to the Collateral
Agent, accompanied by instruments of transfer or assignment duly executed
in blank. If any amount individually or in the aggregate in excess of
$100,000 payable under or in connection with any of the Collateral shall
be evidenced by any Instrument or Tangible Chattel Paper, such Grantor
shall forthwith endorse, assign and deliver the same to the Collateral
Agent, accompanied by such instruments of transfer or assignment duly
executed in blank as the Collateral Agent may from time to time specify;
provided, however, that so long as no Event of Default shall have occurred
and be continuing, the Collateral Agent shall return such Instrument or
Tangible Chattel Paper to such Grantor from time to time, to the extent
necessary for collection in the ordinary course of such Grantor's
business.
(b) Deposit Accounts. Each Grantor hereby represents, warrants and
agrees, as to itself, that (i) it has neither opened nor maintains any
Deposit Accounts other than the Collateral Account established and
maintained pursuant to this Agreement and the accounts listed in Schedule
16 of the Perfection Certificate, (ii) the Collateral Agent has a
perfected security interest in the Collateral Account and, except for the
Excluded Accounts, each Deposit Account listed in Schedule III hereto by
Control and (iii) it shall not hereafter establish and maintain any
Deposit Account unless (1) the applicable Grantor shall have given the
Collateral Agent 30 days' prior written notice of its intention to
establish such new Deposit Account with a Bank, and (2) such Bank and such
Grantor shall have duly executed and delivered to the Collateral Agent a
Control Agreement with respect to such Deposit Account. The Collateral
Agent agrees with each Grantor that the Collateral Agent shall not give
any instructions directing the disposition of funds from time to time
credited to any Deposit Account or withhold any withdrawal rights from
such Grantor with respect to funds from time to time credited to any
Deposit Account unless an Event of Default has occurred and is continuing
or, after giving effect to any withdrawal, would occur. No Grantor shall
grant Control of any Deposit Account to any Person other than the
Collateral Agent.
(c) Investment Property. (i) Each Grantor hereby represents and
warrants, as to itself, that it (1) has neither opened nor maintains any
Securities Accounts or Commodity Accounts other than those listed in
Schedule 16 of the Perfection Certificate and the Collateral Agent will
have within the time periods specified in and to the extent required by
the Credit Agreement, a perfected security interest in such Securities
Accounts and Commodity Accounts by Control and (2) does not hold, own or
have any interest in any certificated securi-
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ties or uncertificated securities other than those constituting Securities
Collateral under the Pledge Agreement and those maintained in Securities
Accounts or Commodity Accounts listed in Schedule 16 of the Perfection
Certificate.
(ii) If any Grantor shall at any time hold or acquire any
certificated securities constituting Investment Property that are not
Securities Collateral under the Pledge Agreement, such Grantor shall
immediately endorse, assign and deliver the same to the Collateral Agent,
accompanied by such instruments of transfer or assignment duly executed in
blank, all in form and substance reasonably satisfactory to the Collateral
Agent; provided, that in no event shall the Grantors be required to pledge
more than 65% of the voting stock of any non-U.S. Subsidiary. If any
securities now or hereafter acquired by any Grantor constituting
Investment Property that are not Securities Collateral under the Pledge
Agreement are uncertificated, such Grantor shall immediately notify the
Collateral Agent thereof and pursuant to an agreement in form and
substance satisfactory to the Collateral Agent, either (a) cause the
issuer to agree to comply with instructions from the Collateral Agent as
to such securities, without further consent of such Grantor or such
nominee, or (b) arrange for the Collateral Agent to become the registered
owner of the securities. No Grantor shall hereafter establish and maintain
any Securities Account or Commodity Account unless (1) such Grantor shall
have given the Collateral Agent 30 days' prior written notice of its
intention to establish such new Securities Account or Commodity Account
with such Securities Intermediary or Commodity Intermediary, (2) such
Securities Intermediary or Commodity Intermediary, as the case may be, and
such Grantor shall have duly executed and delivered a Control Agreement
with respect to such Securities Account or Commodity Account, as the case
may be. Each Grantor shall accept any Investment Property (not subject to
the Pledge Agreement) in trust for the benefit of the Collateral Agent and
within one (1) Business Day of actual receipt thereof, deposit any
Investment Property and any new securities, instruments, documents or
other property by reason of ownership of the Investment Property received
by it into a Securities Account or Commodity Account subject to a Control
Agreement in favor of the Collateral Agent. The Collateral Agent agrees
with each Grantor that the Collateral Agent shall not give any Entitlement
Orders or instructions or directions to any issuer of uncertificated
securities, Securities Intermediary or Commodity Intermediary, and shall
not withhold its consent to the exercise of any withdrawal or dealing
rights by such Grantor, unless an Event of Default has occurred and is
continuing, or, after giving effect to the excercise of such withdrawal or
dealing rights, would occur. No Grantor shall grant control over any
Investment Property to any Person other than the Collateral Agent.
(iii) As between the Collateral Agent and the Grantors, each Grantor
shall bear the investment risk with respect to its Investment Property,
and the risk of loss of, damage to or the destruction of its Investment
Property, whether in the possession of, or maintained as a security
entitlement or deposit by, or subject to the control of, the Collateral
Agent, a Securities Intermediary, a Commodity Intermediary, such Grantor
or any other Person; provided, however, that nothing contained in this
Section 3.05(c) shall release or relieve any Securities Intermediary or
Commodity Intermediary of its duties and obligations to any Grantor or any
other Person under any Control Agreement or under applicable law.
(iv) Each Grantor shall promptly pay all Charges and fees with
respect to the Investment Property pledged by it under this Agreement. In
the event any Grantor shall fail to make such payment contemplated in the
immediately preceding sentence, the Collateral Agent
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may do so for the account of such Grantor and such Grantor shall promptly
reimburse and indemnify the Collateral Agent from all costs and expenses
incurred by the Collateral Agent under this Section 3.05(c).
(d) Electronic Chattel Paper and Transferable Records. If any
amount individually or in the aggregate in excess of $100,000 payable
under or in connection with any of the Collateral shall be evidenced by
any Electronic Chattel Paper or any "transferable record," as that term is
defined in Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act, or in Section 16 of the Uniform Electronic
Transactions Act as in effect in any relevant jurisdiction, the Grantor
acquiring such Electronic Chattel Paper or transferable record shall
promptly notify the Collateral Agent thereof and shall, on an annual basis
(unless earlier requested by the Collateral Agent), take such action as
the Collateral Agent may reasonably request to vest in the Collateral
Agent control under UCC Section 9-105 of such Electronic Chattel Paper or
control under Section 201 of the Federal Electronic Signatures in Global
and National Commerce Act or, as the case may be, Section 16 of the
Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record. The Collateral Agent agrees with such Grantor
that the Collateral Agent will arrange, pursuant to procedures
satisfactory to the Collateral Agent and so long as such procedures will
not result in the Collateral Agent's loss of control, for the Grantor to
make alterations to the Electronic Chattel Paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of
the Federal Electronic Signatures in Global and National Commerce Act of
Section 16 of the Uniform Electronic Transactions Act 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 Grantor with respect to such Electronic Chattel Paper or
transferable record.
(e) Letter-of-Credit Rights. If any Grantor is at any time a
beneficiary under a Letter of Credit now or hereafter issued in favor of
such Grantor in an amount individually in excess of $100,000 or in the
aggregate in excess of $500,000, such Grantor shall promptly notify the
Collateral Agent thereof and such Grantor shall, annually (unless the
Collateral Agent requests otherwise) pursuant to an agreement in form and
substance satisfactory to the Collateral Agent, either (i) arrange for the
issuer and any confirmer of such Letter of Credit to consent to an
assignment to the Collateral Agent of the proceeds of any drawing under
the Letter of Credit or (ii) arrange for the Collateral Agent to become
the transferee beneficiary of such Letter of Credit.
(f) Commercial Tort Claims. As of the date hereof each Grantor
hereby represents and warrants that it holds no Commercial Tort Claims
other than those listed in Schedule II hereto. If any Grantor shall at any
time hold or acquire a Commercial Tort Claim having a value in excess of
$100,000, such Grantor shall immediately notify the Collateral Agent in
writing signed by such Grantor of the brief details thereof and, on an
annual basis (unless earlier requested by the Collateral Agent) grant to
the Collateral 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 satisfactory to the Collateral Agent.
(g) Motor Vehicles. Upon the request of the Collateral Agent, each
Grantor shall deliver to the Collateral Agent originals of the
certificates of title or ownership for the motor vehicles (and any other
Equipment covered by Certificates of Title or ownership) owned by it with
the Collateral Agent listed as a lienholder therein except to the extent
such motor vehicles
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or Equipment constitutes inventory as contemplated by Section 9-311(d) of
the UCC and the Collateral Agent has obtained a perfected Security
Interest therein pursuant to Section 3.02(b), in which case such material
need not be provided. Such requirement shall apply to the Grantors if any
such motor vehicle (or any such other Equipment) is valued over $50,000,
provided that the value of all such motor vehicles (and such Equipment) as
to which any Grantor has not delivered a Certificate of Title or ownership
is over $500,000.
(h) Landlord's Access Agreements/Bailee Letters. Upon request from
the Collateral Agent, each Grantor shall use its commercially reasonable
efforts to obtain a Bailee Letter or a Landlord Access Agreement, as
applicable, from all such bailees and landlords, as applicable, who from
time to time have possession of Collateral in excess of $500,000.
SECTION 3.06. No Conflicts, Consents, etc. In the event that the
Collateral Agent desires to exercise any remedies, voting or consensual rights
or attorney-in-fact powers set forth in this Agreement and determines it
necessary to obtain any approvals or consents of any Governmental Authority or
any other Person therefor, then, upon the reasonable request of the Collateral
Agent, such Grantor agrees to use commercially reasonable efforts to assist and
aid the Collateral Agent to obtain as soon as practicable any necessary
approvals or consents for the exercise of any such remedies, rights and powers.
SECTION 3.07. No Claims. The use by such Grantor of the Collateral and all
such rights with respect to the foregoing do not infringe on the right of any
Person. No claim has been made and remains outstanding that such Grantor's use
of any Collateral does or may violate the rights of any third Person.
SECTION 3.08. Special Property. Each Grantor shall from time to time at
the request of the Collateral Agent give written notice to the Collateral Agent
identifying in reasonable detail the Special Property (and stating in such
notice that such Special Property constitutes "Excluded Property") and shall
provide to the Collateral Agent such other information regarding the Special
Property as the Collateral Agent may reasonably request and from and after the
Closing Date, no Grantor shall permit to become effective in any document
creating, governing or providing for any permit, lease or license, a provision
that would prohibit the creation of a Lien on such permit, lease or license in
favor of the Collateral Agent unless such Grantor believes, in its reasonable
judgment, that such prohibition is usual and customary in transactions of such
type.
ARTICLE IV
Covenants
SECTION 4.01. Change of Name; Location of Collateral; Records; Place of
Business. (a) Each Grantor will furnish to the Collateral Agent prompt written
notice of any change (i) in such Grantor's corporate name, (ii) in the location
of any Grantor's chief executive office, its principal place of business, its
domicile, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility), in
each case except to the extent such Grantor is a "registered organization"
within the meaning of the UCC, (iii) in any Grantor's identity or corporate
structure, (iv) in any Grantor's Federal Taxpayer Identification Number or its
organizational identification number, if any, or (v) in any Grantor's
jurisdiction of organization. Each Grantor agrees not to effect
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or permit any change referred to in the preceding sentence unless (i) it shall
have given the Collateral Agent thirty (30) days' prior written notice (or such
shorter notice as may be agreed to by the Collateral Agent) and (ii) all filings
have been made under the UCC or otherwise that are required in order for the
Collateral Agent to continue at all times following such change to have a valid,
legal and perfected security interest in all the Collateral.
(b) Each Grantor agrees to maintain, at its own cost and expense,
such complete and accurate records with respect to the Collateral owned by it as
is consistent with its current practices and in accordance with such prudent and
standard practices used in industries that are the same as or similar to those
in which such Grantor is engaged and, at such time or times as the Collateral
Agent may reasonably request, promptly to prepare and deliver to the Collateral
Agent a duly certified schedule or schedules in form and detail reasonably
satisfactory to the Collateral Agent showing the identity, amount and location
of any and all Collateral.
SECTION 4.02. Protection of Security. Each Grantor shall, at its own cost
and expense, take any and all actions necessary to defend title to the
Collateral against all Persons and to defend the Security Interest of the
Collateral Agent in the Collateral and the priority thereof against any Lien
other than Permitted Liens.
SECTION 4.03. Further Assurances. Each Grantor agrees, at its own expense,
to execute, acknowledge, deliver and cause to be duly filed all such further
instruments and documents and take all such actions as the Collateral Agent may
from time to time reasonably request to better assure, preserve, protect and
perfect the Security Interest and the rights and remedies created hereby,
including the payment of any fees and taxes required in connection with the
execution and delivery of this Agreement, the granting of the Security Interest
and the filing of any financing statements (including fixture filings) or other
documents in connection herewith or therewith. If any amount payable under or in
connection with any of the Collateral shall be or become evidenced by any
promissory note or other instrument that is not a Pledged Security under the
Pledge Agreement having a value in excess of $100,000, such note or instrument
shall be immediately pledged and promptly delivered to the Collateral Agent,
duly endorsed in a manner satisfactory to the Collateral Agent.
Without limiting the generality of the foregoing, each Grantor hereby
authorizes the Collateral Agent, with prompt notice thereof to the Grantors, to
supplement this Agreement by supplementing Schedules 14(a) and 14(b) of the
Perfection Certificate or adding additional schedules to the Perfection
Certificate to specifically identify any asset or item that may constitute
Copyrights, Licenses, Patents or Trademarks; provided, however, that any Grantor
shall have the right, exercisable within 45 days after it has been notified by
the Collateral Agent of the specific identification of such Intellectual
Property, to advise the Collateral Agent in writing of any inaccuracy of the
representations and warranties made by such Grantor hereunder with respect to
such Intellectual Property. Each Grantor agrees that it will use its
commercially reasonable efforts to take such action as shall be necessary in
order that all representations and warranties hereunder shall be true and
correct with respect to such Intellectual Property within 45 days after the date
it has been notified by the Collateral Agent of the specific identification of
such Collateral.
SECTION 4.04. Inspection and Verification. The Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have the right,
at the Grantors' own cost and expense, to at all reasonable times and intervals
and upon reasonable notice under the circumstances inspect the Collateral, all
records related thereto (and to make extracts and copies from such records) and
the premises upon which any of the Collateral is located, to discuss the
Grantors' affairs with the officers
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of the Grantors and their independent accountants and to verify under reasonable
procedures, the validity, amount, quality, quantity, value, condition and status
of, or any other matter relating to, the Collateral, including, in the case of
Accounts or Collateral in the possession of any third person, by contacting
Account Debtors or the third person possessing such Collateral for the purpose
of making such a verification. The Collateral Agent shall have the absolute
right to share any information it gains from such inspection or verification
with any Secured Party.
SECTION 4.05. Taxes; Encumbrances. At its option, the Collateral Agent may
discharge past due taxes, assessments, charges, fees, Liens, security interests
or other encumbrances at any time levied or placed on the Collateral except to
the extent the same constitute Permitted Liens, and may pay for the maintenance
and preservation of the Collateral to the extent any Grantor fails to do so as
required by this Agreement, and each Grantor agrees to reimburse the Collateral
Agent on demand for any payment made or any expense incurred by the Collateral
Agent pursuant to the foregoing authorization; provided, however, that nothing
in this Section 4.05 shall be interpreted as excusing any Grantor from the
performance of, or imposing any obligation on the Collateral Agent or any
Secured Party to cure or perform, any covenants or other promises of any Grantor
with respect to taxes, assessments, charges, fees, liens, security interests or
other encumbrances and maintenance as set forth herein or in the other Loan
Documents.
SECTION 4.06. Assignment of Security Interest. If at any time any Grantor
shall take a security interest in any property of an Account Debtor or any other
Person to secure payment and performance of an Account in excess of $100,000,
such Grantor shall promptly assign such security interest to the Collateral
Agent. Such assignment need not be filed of public record unless necessary to
continue the perfected status of the security interest against creditors of and
transferees from the Account Debtor or other Person granting the security
interest.
SECTION 4.07. Continuing Obligations of the Grantors. Each Grantor shall
remain liable to observe and perform all the conditions and obligations to be
observed and performed by it under each contract, agreement or instrument
relating to the Collateral, all in accordance with the terms and conditions
thereof, and each Grantor agrees to indemnify and hold harmless the Collateral
Agent and the Secured Parties from and against any and all liability for such
performance.
SECTION 4.08. Use and Disposition of Collateral. None of the Grantors
shall make or permit to be made an assignment for security, pledge or
hypothecation of the Collateral or shall grant any other Lien in respect of the
Collateral other than Liens securing the Obligations and Permitted Liens. None
of the Grantors shall make or permit to be made any transfer of the Collateral
and each Grantor shall remain at all times in possession of the Collateral owned
by it, except that Collateral may be sold or otherwise disposed of as permitted
by the Credit Agreement or any other Loan Document.
SECTION 4.09. Limitation on Modification of Accounts. None of the Grantors
will, without the Collateral Agent's prior written consent, grant any extension
of the time of payment of any of the Accounts Receivable, compromise, compound
or settle the same for less than the full amount thereof, release, wholly or
partly, any Person liable for the payment thereof or allow any credit or
discount whatsoever thereon, other than extensions, credits, discounts,
compromises, settlements or other modifications granted that would not,
individually or in the aggregate, result in a Material Adverse Effect.
SECTION 4.10. Legend. Each Grantor shall legend, in form and manner
satisfactory to the Collateral Agent, its Accounts Receivable and its books,
records and documents evidencing or pertain-
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ing to thereto with an appropriate reference to the fact that such Accounts
Receivable have been assigned to the Collateral Agent for the benefit of the
Secured Parties and that the Collateral Agent has a security interest therein.
SECTION 4.11. Certain Covenants and Provisions Regarding Patent, Trademark
and Copyright Collateral. (a) Other than Patents determined by the Grantor, in
the exercise of its reasonable business judgment, to be no longer material to
the conduct of the business, each Grantor agrees that it will not, nor will it
permit any of its licensees to, do any act, or omit to do any act, whereby any
Patent which is material to the conduct of such Grantor's business may become
invalidated or dedicated to the public, and agrees that it shall continue to
▇▇▇▇ any products covered by a Patent with the relevant patent number as
necessary and sufficient to establish and preserve its maximum rights under
applicable patent laws.
(b) Other than Trademarks determined by the Grantor, in the
exercise of its reasonable business judgment, to be no longer material to the
conduct of the business, each Grantor (either itself or through its licensees or
its sublicenses) will, for each Trademark material to the conduct of such
Grantor's business, use its commercially reasonable efforts to (i) maintain such
Trademark in full force free from any claim of abandonment or invalidity for
nonuse, (ii) maintain the quality of products and services offered under such
Trademark, (iii) display such Trademark with notice of Federal or foreign
registration to the extent necessary and sufficient to establish and preserve
its rights under applicable law and (iv) not knowingly use or knowingly permit
the use of such Trademark in violation of any third party rights.
(c) Other than Copyrights determined by the Grantor, in the
exercise of its reasonable business judgment, to be no longer material to the
conduct of the business, each Grantor (either itself or through licensees) will,
for each work covered by a material Copyright, publish, reproduce, display,
adopt and distribute such work with such appropriate copyright notice as
necessary and sufficient to establish and preserve its maximum rights under
applicable copyright laws.
(d) Each Grantor shall notify the Collateral Agent as soon as
practicable if it knows or has reason to know that any Patent, Trademark or
Copyright material to the conduct of its business may become abandoned, lost or
dedicated to the public, or of any adverse determination or development
including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or United States
Copyright Office (or any court or similar office of any country) regarding such
Grantor's ownership of any Patent, Trademark or Copyright, or its right to
register the same, or to keep and maintain the same.
(e) Where any Grantor, either itself or through any agent,
employee, licensee or designee, files an application for any Patent, Trademark
or Copyright (or for the registration of any Trademark or Copyright) with the
United States Patent and Trademark Office, United States Copyright Office, or
any office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, such Grantor shall within 30
days of receipt of any certificate of issuance of registration, inform the
Collateral Agent of such filing, and upon the request of the Collateral Agent,
execute and deliver any and all agreements, instruments, documents and papers as
the Collateral Agent may reasonably request to evidence the Collateral Agent's
security interest in such Patent, Trademark or Copyright or application
therefor, and each Grantor hereby appoints the Collateral Agent as its
attorney-in-fact to execute and file such writings solely for the foregoing
purposes, all acts of such attorney being hereby ratified and confirmed; such
power, being coupled with an interest, is irrevocable.
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(f) Each Grantor will take all necessary steps that are consistent
with its reasonable business judgment and the practice in any proceeding before
the United States Patent and Trademark Office, United States Copyright Office or
any office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, to maintain and pursue each
material application relating to the Patents, Trademarks, and/or Copyrights (and
to obtain the relevant grant or registration) and to maintain each issued Patent
and each registration of the Trademarks or Copyrights that is material to the
conduct of any Grantor's business, including timely filings of applications for
renewal, affidavits of use, affidavits of incontestability and payment of
maintenance fees, and, if consistent with commercially reasonable business
judgment, to initiate opposition, interference and cancellation proceedings
against third parties.
(g) In the event that any Grantor has reason to believe that any
Collateral consisting of a Patent, Trademark or Copyright that is material to
the conduct of the business has been or is about to be infringed,
misappropriated or diluted by a third party, such Grantor promptly shall notify
the Collateral Agent and shall, if consistent with reasonable business judgment,
promptly ▇▇▇ for infringement, misappropriation or dilution and to recover any
and all damages for such infringement, misappropriation or dilution, and take
such other actions as are reasonably appropriate under the circumstances to
protect such Collateral.
(h) To each Grantor's knowledge, on and as of the date hereof,
there is no material violation by others of any right of such Grantor with
respect to any Copyright, Patent or Trademark listed in Schedules 14(a) and
14(b) of the Perfection Certificate, respectively, pledged by it under the name
of such Grantor, (ii) such Grantor is not infringing upon any Copyright, Patent
or Trademark of any other Person other than such infringement that, individually
or in the aggregate, would not (or would not reasonably be expected to) result
in a material adverse effect on the value or utility of the Collateral
consisting of Intellectual Property or any portion thereof material to the use
and operation of the Collateral and (iii) no proceedings have been instituted or
are pending against such Grantor or, to such Grantor's knowledge, threatened,
and no claim against such Grantor has been received by such Grantor, alleging
any such violation.
(i) Upon and during the continuance of an Event of Default, each
Grantor shall upon the written request of the Collateral Agent use its
commercially reasonable efforts to obtain all requisite consents or approvals by
the licensor of each Copyright License, Patent License or Trademark License to
effect the assignment of all of such Grantor's right, title and interest
thereunder to the Collateral Agent or its designee.
Notwithstanding anything herein to the contrary, any Grantor may, for (i)
commercially reasonable cause, or (ii) in the exercise of its reasonable
judgment, abandon or allow to become lost or dedicated to the public any Patent,
Trademark or Copyright.
ARTICLE V
Remedies
SECTION 5.01. Remedies upon Default. (a) Upon the occurrence and during
the continuance of an Event of Default, each Grantor agrees to make available
each item of Collateral to the Collateral Agent on demand, and it is agreed that
the Collateral Agent shall have the right to take any of or all the following
actions at the same or different times: (i) with respect to any Collateral
consisting of Intellectual Property, on demand, to cause the Security Interest
to become an assignment, transfer and
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conveyance of any of or all such Collateral by the applicable Grantors to the
Collateral Agent, or to license or sublicense, whether general, special or
otherwise, and whether on an exclusive or nonexclusive basis, any such
Collateral throughout the world on such terms and conditions and in such manner
as the Collateral Agent shall determine (other than in violation of applicable
law or any then existing licensing arrangements to the extent that waivers
cannot be obtained), and (ii) with or without legal process and with or without
prior notice or demand for performance, to take possession of the Collateral and
without liability for trespass to enter any premises where the Collateral may be
located for the purpose of taking possession of or removing the Collateral and,
generally, to exercise any and all rights afforded to a Secured Party under the
UCC or other applicable law. Without limiting the generality of the foregoing,
each Grantor agrees that the Collateral Agent shall have the right, subject to
the mandatory requirements of applicable law, to sell or otherwise dispose of
all or any part of the Collateral, at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery as the Collateral Agent shall deem appropriate. The Collateral Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers to Persons who will represent and
agree that they are purchasing the Collateral for their own account for
investment and not with a view to the distribution or sale thereof, and upon
consummation of any such sale the Collateral Agent shall have the right to
assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold. Each such purchaser at any such sale shall hold the property
sold absolutely, free from any claim or right on the part of any Grantor, and
each Grantor hereby waives (to the extent permitted by law) all rights of
redemption, stay and appraisal which such Grantor now has or may at any time in
the future have under any rule of law or statute now existing or hereafter
enacted.
(b) The Collateral Agent shall give a Grantor ten days' prior written
notice (which each Grantor agrees is reasonable notice within the meaning of
Section 9-611 of the UCC) of the Collateral Agent's intention to make any sale
or other disposition of such Grantor's Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a
sale at a broker's board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice of such sale. At any such sale, the Collateral, or portion
thereof, to be sold may be sold in one lot as an entirety or in separate
parcels, as the Collateral Agent may (in its sole and absolute discretion)
determine. The Collateral Agent shall not be obligated to make any sale of any
Collateral if it shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given. The Collateral Agent
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case any sale of all or any
part of the Collateral is made on credit or for future delivery, the Collateral
so sold may be retained by the Collateral Agent until the sale price is paid by
the purchaser or purchasers thereof, but the Collateral Agent shall not incur
any liability in case any such purchaser or purchasers shall fail to take up and
pay for the Collateral so sold and, in case of any such failure, such Collateral
may be sold again upon like notice. At any public (or, to the extent permitted
by law, private) sale made pursuant to this Section 5.01, any Secured Party may
bid for or purchase, free (to the extent permitted by law) from any right of
redemption, stay, valuation or appraisal on the part of any Grantor (all said
rights being also hereby waived and released), the Collateral or any part
thereof offered for sale and may make payment on account thereof by using any
Obligation of such Grantor then due and payable to such Secured Party as a
credit against the purchase price, and such Secured Party may,
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upon compliance with the terms of sale, hold, retain and dispose of such
property without further accountability to any Grantor therefor. For purposes
hereof, a written agreement to purchase the Collateral or any portion thereof
shall be treated as a sale thereof; the Collateral Agent shall be free to carry
out such sale pursuant to such agreement and no Grantor shall be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after the Collateral Agent shall have entered into such an
agreement all Events of Default shall have been remedied and the Obligations
paid in full. As an alternative to exercising the power of sale herein conferred
upon it, the Collateral Agent may proceed by a suit or suits at law or in equity
to foreclose this Agreement and to sell the Collateral or any portion thereof
pursuant to a judgment or decree of a court or courts having competent
jurisdiction or pursuant to a proceeding by a court-appointed receiver. Any sale
pursuant to the provisions of this Section shall be deemed to conform to the
commercially reasonable standards as provided in Section 9-611 of the UCC.
(c) Notwithstanding anything to the contrary in this Agreement, any
foreclosure on, sale, transfer or other disposition of, or the exercise or
relinquishment of any right to vote or consent with respect to, any of the
Collateral by the Collateral Agent shall, to the extent required, be in
conformance with Sections 214 and 310(d) of the Communications Act of 1934, as
amended, and the applicable rules and regulations thereunder, and, if and only
to the extent required thereby, subject to the prior approval or notice to and
non-opposition of the FCC or any PUC.
(d) If an Event of Default shall have occurred and be continuing, each
Grantor shall take any action which the Collateral Agent may reasonably request
in order to transfer or assign, or both, to the Collateral Agent, or to such one
or more third parties as the Collateral Agent may designate, or to a combination
of the foregoing, any FCC or PUC license, permit, certificate or other
authorization (each a "Permit") held or utilized by such Grantor or its
Subsidiaries, subject to the prior approval of the FCC or any PUC, if required.
The Collateral Agent is empowered, to the extent permitted by applicable
Requirements of Law, to request the appointment of a receiver from any court of
competent jurisdiction. Such receiver may be instructed by Secured Party to seek
from the FCC or any PUC consent to an involuntary transfer of control of the
Grantors or assignment, or both, of each such FCC or PUC Permit for the purpose
of seeking a bona fide purchaser to whom control of assets used in the provision
of telecommunications or related services will ultimately be transferred or
assigned. Each Grantor hereby agrees to authorize such an involuntary transfer
of control or assignment, or both, upon the request of the receiver so appointed
and, if any Grantor shall refuse to authorize the transfer, its approval may be
required by the court. Upon the occurrence and during the continuance of an
Event of Default, each Grantor agrees to use its best efforts to assist in
obtaining approval of the FCC or any PUC and any other state regulatory bodies,
if required, for any action or transactions contemplated by this Agreement,
including, without limitation, the preparation, execution and filing with the
FCC or any PUC and any other state regulatory bodies of the assignor's or
transferor's portion of any application or applications for consent to the
assignment of any FCC or PUC license, permit, certificate or other authorization
or right to use any FCC or PUC license, permit, certificate or other
authorization or transfer of control necessary or appropriate under the rules
and regulations of the FCC or PUC or any other state regulatory body for
approval or non-opposition of the transfer or assignment of any portion of the
Collateral, together with any FCC or PUC license, permit, certificate or other
authorization.
(e) Each Grantor acknowledges that the assignment or transfer of any FCC
or PUC license, permit, certificate or other authorization or right to use any
FCC or PUC license, permit, certificate or other authorization of the Grantors
is integral to Secured Parties ability to realize the value of the Collateral,
that there is no adequate remedy at law for failure by any Grantor to comply
with the
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provisions of this Section 5 and that such failure would not be adequately
compensable in damages, and therefore agrees, without limiting the right of the
Collateral Agent to seek and obtain specific performance of other obligations of
the Grantors contained in this Agreement, that the agreements contained in this
Section 5 may be specifically enforced.
SECTION 5.02. Application of Proceeds. All Proceeds received by the
Collateral Agent in respect of any sale of, collection from or other realization
upon all or any part of the Collateral of any Grantor pursuant to the exercise
by the Collateral Agent of its remedies, together with any other moneys then
held by the Collateral Agent in the Collateral Account shall, to the extent
available for distribution (it being understood that the Collateral Agent may
liquidate investments in the Collateral Account in order to make a distribution
on any Distribution Date), be distributed in the following order of priority:
First: to the Collateral Agent for any unpaid amounts owing to the
Collateral Agent on such Distribution Date pursuant to Section 7.06,
(including, the payment of the costs and expenses, fees, commissions and
taxes relating to such sale, collection or other realization including
reasonable fees and expenses of the Collateral Agent and its agents and
counsel, and all expenses, liabilities and advances made or incurred by
Collateral Agent in connection therewith and all amounts for which the
Collateral Agent is entitled to indemnification pursuant to the provisions
of any Loan Document, together with interest on each such amount at the
highest rate then in effect under the Credit Agreement from and after the
date such amount is due, owing or unpaid until paid in full);
Second: without duplication of amounts applied pursuant to clause
First above, to any other Secured Party which has theretofore advanced or
paid any Collateral Agent Fees constituting administrative expenses
allowable under Section 503(b) of the Bankruptcy Code, an amount equal to
the amount thereof so advanced or paid by such Secured Party and for which
such Secured Party has not been reimbursed prior to such Distribution
Date, and, if such moneys shall be insufficient to pay such amounts in
full, then ratably (without priority of any one over any other) to such
Secured Parties in proportion to the amounts of such Collateral Agent Fees
advanced by the respective Secured Parties and remaining unpaid on such
Distribution Date;
Third: without duplication of the amounts applied pursuant to clause
First and Second above, to any Secured Party which has theretofore
advanced or paid any Collateral Agent Fees other than such administrative
expenses, an amount equal to the amount thereof so advanced or paid by
such Secured Party and for which such Secured Party has not been
reimbursed prior to such Distribution Date, and, if such moneys shall be
insufficient to pay such amounts in full, then ratably (without priority
of any one over any other) to such Secured Parties in proportion to the
amounts of such advanced by the respective Secured Parties and remaining
unpaid on such Distribution Date;
Fourth: without duplication of the amounts applied pursuant to
clauses First, Second and Third above, to the Secured Parties, in an
amount equal to all unpaid Obligations of such Grantor, whether or not
then due and payable, and, if such moneys shall be insufficient to pay
such amounts in full, then ratably (without priority of any one over any
other) to such Secured Parties in proportion to the unpaid amounts thereof
on such Distribution Date;
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Fifth: without duplication of the amounts applied pursuant to
clauses First, Second, Third and Fourth above, any surplus then remaining
shall be paid to such Grantor or its successors or assigns or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct.
In the event that any such proceeds are insufficient to pay in full
the items described in clauses First through Fourth of this Section 5.02,
the Grantor shall remain liable for any deficiency.
The term "unpaid" as used in clause Third of Section 5.02 refers:
(i) in the absence of a bankruptcy proceeding with respect to the
relevant Grantor(s), to all amounts of the relevant Obligations
outstanding as of a Distribution Date, and
(ii) during the pendency of a bankruptcy proceeding with respect to
the relevant Grantor(s), to all amounts allowed by the bankruptcy court in
respect of the relevant Obligations as a basis for distribution (including
estimated amounts, if any, allowed in respect of contingent claims), to
the extent that prior distributions have not been made in respect thereof.
SECTION 5.03. Collateral Agent's Calculations. In making the
determinations and allocations required by Section 5.02, the Collateral Agent
may conclusively rely upon information supplied by the Administrative Agent or
any Secured Party as to the amounts of unpaid principal and interest and other
amounts outstanding with respect to any Obligations of any Grantor, and the
Collateral Agent shall have no liability to any of the Secured Parties for
actions taken in reliance on such information; provided that nothing in this
sentence shall prevent any Grantor from contesting any amounts claimed by the
Collateral Agent or any Secured Party in any information so supplied. The
Collateral Agent shall supply copies of any final calculations received to the
Grantors promptly upon receipt thereof. In addition, for purposes of making the
allocations required by Section 5.02 with respect to any amount that is
denominated in any currency other than Dollars, the Collateral Agent shall, on
the applicable Distribution Date, convert such amount into an amount of Dollars
based upon the relevant exchange rate as of a recent date specified by the
Collateral Agent in its reasonable discretion. All distributions made by the
Collateral Agent pursuant to Section 5.02 shall be (subject to any decree of any
court of competent jurisdiction) final (absent manifest error), and the
Collateral Agent shall have no duty to inquire as to the application by the
Administrative Agent of any amounts distributed to it for distribution to any
Lenders
SECTION 5.04. Grant of License to Use Intellectual Property. For the
purpose of enabling the Collateral Agent to exercise rights and remedies under
this Article V at such time as the Collateral Agent shall be lawfully entitled
to exercise such rights and remedies, each Grantor hereby grants to the
Collateral Agent an irrevocable, nonexclusive license (exercisable without
payment of royalty or other compensation to the Grantors) to use, license or
sublicense any of the Collateral, consisting of Intellectual Property now owned
or hereafter acquired by such Grantor, 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 use of such license
by the Collateral Agent shall be exercised, at the option of the Collateral
Agent, upon the occurrence and during the continuation of an Event of Default;
provided that any license, sublicense or other transaction entered into by the
Collateral Agent in accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default.
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ARTICLE VI
Collateral Account
SECTION 6.01. Establishment of Collateral Account. (a) The Collateral
Agent is hereby authorized to establish and maintain at its office at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in the name of the Collateral Agent
and pursuant to a Control Agreement, a restricted deposit account designated
"CCI Collateral Account." Each Grantor shall deposit into the Collateral Account
from time to time all amounts required to be deposited in the Collateral Account
by the Credit Agreement and any amounts specifically required to be deposited
therein by any other Loan Documents.
(b) The balance from time to time in the Collateral Account shall
constitute part of the Collateral and shall not constitute payment of the
Obligations of any Grantor until applied as hereinafter provided. At any time
following the occurrence and during the continuance of an Event of Default, the
Collateral Agent may in its discretion apply or cause to be applied (subject to
collection) in the manner set forth in Section 5.02 the balance from time to
time outstanding to the credit of the Collateral Account to the payment of the
Obligations of the Grantor which has deposited such amounts.
(c) Amounts on deposit in the Collateral Account shall be invested
from time to time in Permitted Investments as the applicable Grantor (or, after
the occurrence and during the continuance of an Event of Default, the Collateral
Agent) shall determine, which Permitted Investments shall be held in the name
and be under the control of the Collateral Agent (or any subagent); provided,
that at any time after the occurrence and during the continuance of an Event of
Default, the Collateral Agent may in its discretion at any time and from time to
time elect to liquidate any such Permitted Investments and to apply or cause to
be applied in the manner set forth in Section 5.02 the proceeds thereof to the
payment of the Obligations of the Grantor which has deposited such amounts.
ARTICLE VII
Miscellaneous
SECTION 7.01. Notices. All communications and notices hereunder shall
(except as otherwise expressly permitted herein) be in writing and given as
provided in Section 9.01 of the Credit Agreement. All communications and notices
hereunder to any Subsidiary Guarantor shall be given to it in care of the
Borrowers at their address provided in the Credit Agreement.
SECTION 7.02. Security Interest Absolute. All rights of the Collateral
Agent hereunder, the Security Interest and all obligations of the Grantors
hereunder shall be absolute and unconditional irrespective of (a) any lack of
validity or enforceability of the Credit Agreement, any other Loan Document, any
agreement with respect to any of the Obligations of the Grantors or any other
agreement or instrument relating to any of the foregoing, (b) any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Obligations of the Grantors, or any other amendment or waiver of or any consent
to any departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or nonperfection of any Lien
on other collateral, or any release or amendment or waiver of or consent under
or departure from any guarantee, securing or guaranteeing all or any of the
Obligations of the Grantors, or (d) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Grantor in respect of
its Obligations or this Agreement.
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SECTION 7.03. Survival of Agreement. All covenants, agreements,
representations and warranties made by any Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans and the Lenders' issuance
of and participations in Letters of Credit, regardless of any investigation made
by the Secured Parties or on their behalf, and shall continue in full force and
effect until this Agreement shall terminate.
SECTION 7.04. Binding Effect. This Agreement shall become effective as to
any Grantor when a counterpart hereof executed on behalf of such Grantor shall
have been delivered to the Collateral Agent and a counterpart hereof shall have
been executed on behalf of the Collateral Agent, and thereafter shall be binding
upon such Grantor and the Collateral Agent and their respective successors and
assigns, and shall inure to the benefit of such Grantor, the Collateral Agent
and the other Secured Parties and their respective successors and assigns,
except that no Grantor shall have the right to assign or transfer its rights or
obligations hereunder or any interest herein or in the Collateral (and any such
assignment or transfer shall be void) except as expressly permitted by each of
the other Loan Documents.
SECTION 7.05. Successors and Assigns. Whenever in this Agreement any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party; and all covenants, promises and agreements
by or on behalf of any Grantor or the Collateral Agent that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns.
SECTION 7.06. Collateral Agent's Fees and Expenses; Indemnification. (a)
The parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its expenses incurred hereunder as provided in Section 9.05 of
the Credit Agreement including (including, the payment of the costs and
expenses, fees, commissions and taxes relating to any sale, collection or other
realization on the Collateral, including reasonable fees and expenses of its
agents and counsel, and all expenses, liabilities and advances made or incurred
by Collateral Agent in connection therewith and all amounts for which the
Collateral Agent is entitled to indemnification pursuant to the provisions of
any Loan Document, together with interest on each such amount at the highest
rate then in effect under the Credit Agreement from and after the date such
amount is due, owing or unpaid until paid in full).
(b) Without limitation of its indemnification obligations under
the other Loan Documents, each Grantor agrees to indemnify the Collateral Agent
and the other Indemnitees (as defined in Section 9.05 of the Credit Agreement)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including reasonable counsel fees,
charges and disbursements, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of, (i) the execution,
delivery or performance of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto and thereto of their respective obligations thereunder or the
consummation of the Transactions and other transactions contemplated hereby,
(ii) the use of proceeds of the Loans or the use of any Letter of Credit or
(iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, or to the Collateral, whether or not any Indemnitee is a party
thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee.
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(c) Any such amounts payable as provided hereunder shall be
additional Obligations of each Grantor secured hereby and by the other Security
Documents. The provisions of this Section 7.06 shall remain operative and in
full force and effect regardless of the termination of this Agreement or any
other Loan Document, the consummation of the transactions contemplated hereby,
the repayment of any of the Obligations, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Collateral Agent or any other Secured
Party. All amounts due under this Section 7.06 shall be payable on written
demand therefor.
SECTION 7.07. Filings. (a) Each Grantor hereby irrevocably authorizes the
Collateral Agent at any time and from time to time to file in any relevant
jurisdiction any initial financing statements (including fixture filings) and
amendments thereto that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment relating to the Collateral, including (i)
whether such Grantor is an organization, the type of organization and any
organizational identification number issued to such Grantor, (ii) any financing
or continuation statements or other documents without the signature of such
Grantor where permitted by law, including the filing of a financing statement
describing the Collateral as "all assets in which the Grantor now owns or
hereafter acquires rights" and (iii) in the case of a financing statement filed
as a fixture filing or covering Collateral constituting minerals or the like to
be extracted or timber to be cut, a sufficient description of the real property
to which such Collateral relates. Each Grantor agrees to provide all information
described in the immediately preceding sentence to the Collateral Agent promptly
upon request.
(b) Each Grantor hereby ratifies its authorization for the
Collateral Agent to file in any relevant jurisdiction any initial financing
statements or amendments thereto relating to the Collateral if filed prior to
the date hereof.
SECTION 7.08. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby appoints the Collateral Agent the attorney-in-fact of such Grantor for
the purpose of carrying out the provisions of this Agreement and taking any
action and executing any instrument that the Collateral Agent may deem necessary
or advisable to accomplish the purposes hereof, which appointment is irrevocable
and coupled with an interest. Without limiting the generality of the foregoing,
the Collateral Agent shall have the right, upon the occurrence and during the
continuance of an Event of Default, with full power of substitution either in
the Collateral Agent's name or in the name of such Grantor, (a) to receive,
endorse, assign or deliver any and all notes, acceptances, checks, drafts, money
orders or other evidences of payment relating to the Collateral or any part
thereof; (b) to demand, collect, receive payment of, give receipt for and give
discharges and releases of all or any of the Collateral; (c) to ask for, demand,
▇▇▇ for, collect, receive and give acquittance for any and all moneys due or to
become due under and by virtue of any Collateral; (d) to sign the name of any
Grantor on any invoice or ▇▇▇▇ of lading relating to any of the Collateral; (e)
to send verifications of Accounts to any Account Debtor; (f) to commence and
prosecute any and all suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect or otherwise realize on all or any of
the Collateral or to enforce any rights in respect of any Collateral; (g) to
settle, compromise, compound, adjust or defend any actions, suits or proceedings
relating to all or any of the Collateral; (h) to notify, or to require any
Guarantor to notify, Account Debtors to make payment directly to the Collateral
Agent; and (i) to use, sell, assign, transfer, pledge, make any agreement with
respect to or otherwise deal with all or any of the Collateral, and to do all
other acts and things necessary to carry out the purposes of this Agreement, as
fully and completely as though the Collateral Agent were the absolute owner of
the Collateral
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for all purposes; provided, that nothing herein contained shall be construed as
requiring or obligating the Collateral Agent to make any commitment or to make
any inquiry as to the nature or sufficiency of any payment received by the
Collateral Agent, or to present or file any claim or notice, or to take any
action with respect to the Collateral or any part thereof or the moneys due or
to become due in respect thereof or any property covered thereby. The Collateral
Agent and the other Secured Parties shall be accountable only for amounts
actually received as a result of the exercise of the powers granted to them
herein, and neither they nor their officers, directors, employees or agents
shall be responsible to any Grantor for any act or failure to act hereunder,
except for their own gross negligence or willful misconduct.
SECTION 7.09. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.10. Waivers; Amendment; Several Agreement. (a) No failure or
delay of the Collateral Agent in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Collateral
Agent hereunder and of the other Secured Parties under the other Loan Documents
are cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provisions of this Agreement or any other Loan
Document or consent to any departure by any Grantor therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on any Grantor in any case
shall entitle such Grantor or any other Grantor to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Collateral Agent and the Grantor or Grantors with respect to
which such waiver, amendment or modification is to apply.
(c) This Agreement shall be construed as a separate agreement with
respect to each Grantor and may be amended, modified, supplemented, waived or
released with respect to any Grantor without the approval of any other Grantor
and without affecting the obligations of any other Grantor hereunder.
SECTION 7.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 7.11.
-27-
SECTION 7.12. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or impaired thereby
(it being understood that the invalidity of a particular provision in a
particular jurisdiction shall not in and of itself affect the validity of such
provision in any other jurisdiction). The parties shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions with
valid provisions the economic effect of which comes as close as possible to that
of the invalid, illegal or unenforceable provisions. It is understood and agreed
among the parties that this Agreement shall create separate security interests
in the Collateral securing the Obligations as provided in Section 2.01, and that
any determination by any court with jurisdiction that the security interest
securing any Obligation or class of Obligations is invalid for any reason shall
not in and of itself invalidate the Security Interest securing any other
Obligations hereunder.
SECTION 7.13. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute a single contract and shall become effective as
provided in Section 7.04. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be effective as delivery of a manually
executed counterpart hereof. Upon effectiveness of this Agreement, the
obligations of the Grantors under the Existing Security Agreement shall continue
as amended and restated by this Agreement.
SECTION 7.14. Headings. Article and Section headings used herein are for
the purpose of reference only, are not part of this Agreement and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
SECTION 7.15. Jurisdiction; Consent to Service of Process. (a) Each party
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
extent permitted by law, in such Federal court. Each of the parties hereto
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Collateral Agent or any other Secured Party may otherwise have to
bring any action or proceeding relating to this Agreement or the other Loan
Documents against any Grantor or its properties in the courts of any
jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court referred to in paragraph
(a) of this Section 7.15. Each of the parties hereto hereby irrevocably waives,
to the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 7.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
-28-
SECTION 7.16. Termination. (a) This Agreement and the Security Interest
with respect to a Grantor (i) shall terminate when all the Obligations of such
Grantor have been indefeasibly paid in full, the Lenders have no further
commitment to lend under the Credit Agreement or to issue or participate in
Letters of Credit and the LC Exposure has been reduced to zero (at which time
the Collateral Agent shall execute and deliver to the Grantors, at the Grantors'
expense, all UCC termination statements and other documents which the Grantors
shall reasonably request to evidence such termination) and (ii) shall continue
to be effective or shall be reinstated, as the case may be, if at any time any
payment in respect of any Obligation is rescinded or must otherwise be restored
by any Secured Party upon any bankruptcy or reorganization of any Grantor or
otherwise. Any execution and delivery of termination statements or documents
pursuant to this Section 7.16(a) shall be without recourse to or warranty by the
Collateral Agent. A Subsidiary Guarantor shall automatically be released from
its obligations hereunder and the Security Interest in the Collateral of such
Subsidiary Guarantor shall be automatically released in the event such
Subsidiary Guarantor shall be released from the Guarantee Agreement in
accordance with the terms thereof.
(b) Upon any sale or other transfer by any Grantor of any
Collateral that is permitted under each Loan Document or, upon the effectiveness
of any written consent to the release of the security interest granted hereby in
any Collateral pursuant to Section 9.08 of the Credit Agreement, that security
interest in such Collateral shall be automatically released. In connection with
such release, the Collateral Agent shall execute and deliver to any Grantor, at
such Grantor's expense, all UCC termination statements and other documents that
such Grantor shall reasonably request to evidence such termination or release.
Any execution and delivery of UCC termination statements and similar documents
pursuant to this Section 7.16(b) shall be without recourse to or warranty by the
Collateral Agent.
SECTION 7.17. Additional Grantors. To the extent any Subsidiary of either
Borrower shall be required to become a Grantor pursuant to Section 5.16 of the
Credit Agreement, upon execution and delivery by the Collateral Agent and such
Subsidiary of an instrument in the form of Annex I hereto, such Subsidiary shall
become a Grantor hereunder with the same force and effect as if originally named
as a Grantor herein. The execution and delivery of any such instrument shall not
require the consent of any other Grantor hereunder. The rights and obligations
of each Grantor thereunder shall remain in full force and effect notwithstanding
the addition of any new Grantor as a party to this Agreement.
-29-
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
CONSOLIDATED COMMUNICATIONS
HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS
ACQUISITION TEXAS, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS MARKET
RESPONSE, INC.
By:
----------------------------------
Name:
Title:
S-1
CONSOLIDATED COMMUNICATIONS PUBLIC
SERVICES, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS OPERATOR
SERVICES, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS MOBILE
SERVICES, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS BUSINESS
SYSTEMS, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS NETWORK
SERVICES, INC.
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS VENTURES
COMPANY
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS SERVICES
COMPANY
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS TRANSPORT
COMPANY
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS TELECOM
SERVICES OF TEXAS COMPANY
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS OF FORT BEND
COMPANY
By:
----------------------------------
Name:
Title:
CONSOLIDATED COMMUNICATIONS OF TEXAS
COMPANY
By:
----------------------------------
Name:
Title:
CITICORP NORTH AMERICA, INC., as
Collateral Agent,
By:
----------------------------------
Name:
Title:
SCHEDULE I
Security Agreement
DOMESTIC SUBSIDIARIES
Name
SCHEDULE II
Security Agreement
COMMERCIAL TORT CLAIMS
Schedule III
ANNEX I TO THE
SECURITY AGREEMENT
Form of Joinder Agreement
SUPPLEMENT NO. ___ to the Security Agreement (as defined below) dated as
of [ ], among [ ], a [ ] (the "New Grantor"), and CITICORP NORTH AMERICA, INC.,
as collateral agent (in such capacity, and together with any successors in such
capacity, the "Collateral Agent") for the Secured Parties (as defined herein).
A. Reference is made to (a) the Second Amended and Restated Credit
Agreement dated as of February 23, 2005 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the CCI Holdings, the
Borrowers, the lenders party thereto (the "Lenders") and the Administrative
Agent, the Syndication Agent and the Joint Lead Arrangers, (b) the Guarantee
Agreement dated as of [ ], 2005 (as amended, supplemented or otherwise modified
from time to time, the "Guarantee Agreement"), among CCI Holdings, the
Subsidiary Guarantors and the Administrative Agent, (c) the Pledge Agreement
dated as of April 14, 2004 (as amended, supplemented or otherwise modified from
time to time, the "Pledge Agreement") among the Grantors and the Collateral
Agent and (d) the Amended and Restated Security Agreement dated [ ], 2005 (as
amended, supplemented or otherwise modified from time to time, the "Security
Agreement" and, together with the Pledge Agreement and Guarantee Agreement, the
"Collateral Documents") among the Grantors and the Collateral Agent.
B. Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to such terms in the Security Agreement.
C. The Grantors have entered into the Security Agreement in order to
induce the Lenders to make Loans. Pursuant to Section 5.16 of the Credit
Agreement, in the event that any Person becomes a 90% Subsidiary after the
Restatement Effective Date, the applicable Borrower will promptly notify the
Administrative Agent of that fact and cause such Subsidiary to execute and
deliver to the Administrative Agent a counterpart of the Security Agreement.
Section 7.17 of the Security Agreement provides that such Subsidiaries may
become Grantors under the Security Agreement by execution and delivery of an
instrument in the form of this Supplement. The undersigned Subsidiary (the "New
Grantor") is executing this Supplement in accordance with the requirements of
the Credit Agreement to become a Grantor under the Security Agreement.
Accordingly, the Collateral Agent and the New Grantor agree as follows:
SECTION 1. In accordance with Section 5.16 of the Credit Agreement,
the New Grantor by its signature below becomes a Domestic Subsidiary under
each of the Collateral Documents with the same force and effect as if
originally named therein as a party thereto and hereby (a) agrees to all
terms and provisions of the Security Agreement applicable to it as a
Domestic Subsidiary thereunder and (b) represents and warrants that the
representations and warranties made by it as a Domestic Subsidiary
thereunder are true and correct on and as of the date hereof. In
furtherance of the foregoing, the New Grantor, as security for the payment
and performance in full of the Obligations (as defined in the Security
Agreement), does hereby create and grant to the Collateral Agent, its
successors and assigns, for the benefit of the Se-
cured Parties, their successors and assigns, a security interest in and
lien on all of the New Grantor's right, title and interest in and to the
Collateral (as defined in the Security Agreement) of the New Grantor. Each
of the Collateral Documents is hereby incorporated herein by reference.
SECTION 2. The New Grantor represents and warrants to the Collateral
Agent and the other Secured Parties that this Supplement 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.
SECTION 3. This Supplement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when
the Collateral Agent shall have received counterparts of this Supplement
that, when taken together, bear the signatures of the New Grantor and the
Collateral Agent. Delivery of an executed signature page to this
Supplement by facsimile transmission shall be as effective as delivery of
a manually signed counterpart of this Supplement.
SECTION 4. The New Grantor hereby represents and warrants that (a)
set forth on Schedule II attached hereto is a true and correct schedule of
the location of any and all Collateral of the New Grantor, (b) set forth
under its signature hereto, is the true and correct location of the chief
executive office of the New Grantor and (c) set forth on Schedule III
attached hereto is a true and correct schedule describing the securities
of the New Grantor being pledged hereunder.
SECTION 5. Except as expressly supplemented thereby, each of the
Collateral Documents shall remain in full force and effect.
SECTION 6. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 7. In case any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining
provisions contained herein and in the Collateral Documents shall not in
any way be affected or impaired thereby (it being understood that the
invalidity a particular provision in a particular jurisdiction shall not
in and of itself affect the validity of such provision in any other
jurisdiction). The parties hereto shall endeavor in good-faith
negotiations to replace the invalid, illegal or unenforceable provisions
with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 8. All communications and notices hereunder shall be in
writing and given as provided in Section 7.01 of the Security Agreement.
All communications and notices hereunder of the New Grantor shall be given
to it at the address set forth under its signature below.
-2-
SECTION 9. The New Grantor agrees to reimburse the Collateral Agent
for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements
of counsel for the Collateral Agent.
IN WITNESS WHEREOF, the New Grantor and the Collateral Agent have duly
executed this Supplement to the Security Agreement as of the day and year first
above written.
-3-
[NAME OF NEW GRANTOR]
By:
----------------------------------
Name:
Title:
Address:
CITICORP NORTH AMERICA, INC.,
as Collateral Agent
By:
----------------------------------
Name:
Title:
S-1
SCHEDULE I
TO THE JOINDER AGREEMENT
Guarantors
SCHEDULE II
TO THE JOINDER AGREEMENT
Location of Collateral
Description Location
SCHEDULE III
TO THE JOINDER AGREEMENT
Securities Collateral of the New Grantor
PLEDGED STOCK
Number of Number and Percentage
Issuer Certificate Registered Owner Class of Shares of Shares
PLEDGED DEBT SECURITIES
Issuer Principal Amount Date of Note Maturity Date
ANNEX II TO THE
SECURITY AGREEMENT
See Attached
ANNEX III TO THE
SECURITY AGREEMENT
FORM OF NOTICE TO BAILEE OF SECURITY INTEREST IN COLLATERAL
CERTIFIED MAIL -- RETURN RECEIPT REQUESTED
[ ], 200[ ]
TO: [Bailee's Name]
[Bailee's Address]
Re: [Borrower]
Ladies and Gentlemen:
In connection with that certain Amended and Restated Security Agreement,
dated as of [ ], 2005 (the "Security Agreement"), made by Borrowers, the other
Grantors party thereto and Citicorp North America, Inc. ("Citicorp") as
Collateral Agent, we have granted to Citicorp a security interest in
substantially all of our personal property, including our inventory.
This letter constitutes notice to you, and your signature below will
constitute your acknowledgment, of Citicorp's continuing security interest in
all goods with respect to which you are acting as bailee. Until you are notified
in writing to the contrary by Citicorp, however, you may continue to accept
instructions from us regarding the delivery of goods stored by you.
Your acknowledgment also constitutes a waiver and release, for Citicorp's
benefit, of any and all claims, liens, including bailee's liens, and demands of
every kind which you have or may later have against such property (including any
right to include such property in any secured financing to which you may become
party).
In order to complete our records, kindly have a duplicate of this letter
signed by an officer of your company and return same to us at your earliest
convenience.
Very truly yours,
Receipt acknowledged, confirmed and
approved:
[BAILEE] [APPLICABLE GRANTOR]
By: By:
--------------------------------- ---------------------------------
Name: Name:
Title: Title:
cc: Citicorp North America, Inc.