Exhibit 99.8
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SECURITY AGREEMENT
among
RCN CORPORATION,
CERTAIN SUBSIDIARIES OF RCN CORPORATION
and
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,
as FIRST-LIEN COLLATERAL AGENT
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Dated as of December 21, 2004
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SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 21, 2004, made by
each of the undersigned assignors (each, an "Assignor" and, together with any
other entity that becomes an assignor hereunder pursuant to Section 10.12
hereof, the "Assignors") in favor of Deutsche Bank AG Cayman Islands Branch,
as collateral agent (together with any successor collateral agent, the
"First-Lien Collateral Agent"), for the benefit of the Secured Creditors (as
defined below). Certain capitalized terms as used herein are defined in
Article IX hereof. Except as otherwise defined herein, all capitalized terms
used herein and defined in the Credit Agreement (as defined below) shall be
used herein as therein defined.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, RCN Corporation (the "Borrower"), the lenders from
time to time party thereto (the "Lenders"), Deutsche Bank Securities Inc., as
Sole Lead Arranger and Sole Book Manager, and Deutsche Bank AG Cayman Islands
Branch, as administrative agent (together with any successor Administrative
Agent, the "Administrative Agent"), Deutsche Bank Securities Inc., as
syndication agent, and Deutsche Bank Securities Inc., as documentation agent,
have entered into a First-Lien Credit Agreement, dated as of December 21, 2004
(as amended, modified, restated and/or supplemented from time to time, the
"Credit Agreement"), providing for the making of Loans to, and the issuance
of, and participation in, Letters of Credit for the account of the Borrower,
all as contemplated therein (the Lenders, each Issuing Lender, the
Administrative Agent, the First-Lien Collateral Agent and each other Agent are
herein called the "Lender Creditors");
WHEREAS, the Borrower and/or one or more of its Subsidiaries
may at any time and from time to time enter into one or more Interest Rate
Protection Agreements or Other Hedging Agreements with one or more Lenders or
any affiliate thereof (each such Lender or affiliate, even if the respective
Lender subsequently ceases to be a Lender under the Credit Agreement for any
reason, together with such Lender's or affiliate's successors and assigns, if
any, collectively, the "Other Creditors" and, together with the Lender
Creditors, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all Guaranteed Obligations as described
therein;
WHEREAS, it is a condition precedent to the making of Loans
to the Borrower and the issuance of, and participation in, Letters of Credit
for the account of the Borrower under the Credit Agreement and to the Other
Creditors entering into Interest Rate Protection Agreements and Other Hedging
Agreements that each Assignor shall have executed and delivered to the
First-Lien Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the
incurrence of Loans by the Borrower and the issuance of, and participation in,
Letters of Credit for the account of the Borrower under the Credit Agreement
and the entering into by the Borrower and/or one or more of its Subsidiaries
of Interest Rate Protection Agreements or Other Hedging Agreements and,
accordingly, desires to execute this Agreement in order to satisfy the
condition described in the preceding paragraph and to induce the Lenders to
make Loans to the Borrower and issue, and/or participate in, Letters of Credit
for the account of the Borrower and the Other Creditors to enter into Interest
Rate Protection Agreements or Other Hedging Agreements with the Borrower
and/or one or more of its Subsidiaries;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
First-Lien Collateral Agent for the benefit of the Secured Creditors and
hereby covenants and agrees with the First-Lien Collateral Agent for the
benefit of the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of its
Obligations, each Assignor does hereby assign and transfer unto the First-Lien
Collateral Agent, and does hereby pledge and grant to the First-Lien
Collateral Agent, for the benefit of the Secured Creditors, a continuing
security interest in all of the right, title and interest of such Assignor in,
to and under all of the following personal property and fixtures (and all
rights therein) of such Assignor, or in which or to which such Assignor has
any rights, in each case whether now existing or hereafter from time to time
acquired:
(i) each and every Account;
(ii) all cash and Cash Equivalents;
(iii) the Cash Collateral Account and all monies,
securities, Instruments and other investments deposited in the Cash
Collateral Account;
(iv) all Chattel Paper (including, without limitation, all
Tangible Chattel Paper and all Electronic Chattel Paper);
(v) all Commercial Tort Claims;
(vi) all computer programs of such Assignor and all
intellectual property rights therein and all other proprietary
information of such Assignor, including but not limited to all Software,
and all Software licensing rights, all writings, plans, specifications
and schematics, all engineering drawings, customer lists, goodwill and
licenses, and all recorded data of any kind or nature, regardless of the
medium of recording;
(vii) all Domain Names;
(viii) all Trade Secret Rights;
(ix) Contracts, together with all Contract Rights arising
thereunder;
(x) all Copyrights;
(xi) all Equipment;
(xii) all Deposit Accounts and all other demand, deposit,
time, savings, cash management and passbook accounts maintained by such
Assignor with any Person and all monies, securities, Instruments and
other investments deposited in any of the foregoing;
(xiii) all Documents;
(xiv) all General Intangibles;
(xv) all Goods;
(xvi) all Instruments;
(xvii) all Inventory;
(xviii) all Investment Property;
(xix) all Letter-of-Credit Rights (whether or not the
respective letter of credit is evidenced by a writing);
(xx) all Marks;
(xxi) all Patents;
(xxii) all Permits;
(xxiii) all Supporting Obligations; and
(xxiv) all Proceeds and products of any and all of the
foregoing and any item excluded pursuant to the next succeeding sentence
(except to the extent such proceeds would independently be excluded
pursuant to said sentence) (all of the above, the "Collateral").
Notwithstanding anything to the contrary contained above, in no event shall
the Collateral include, and no Assignor shall be deemed to have granted a
security interest (unless and until as further provided below) in (a) any
lease, license, contract, property rights or agreement to which any Assignor
is a party or any of its rights or interests thereunder or property subject
thereto if and for so long as the grant of such security interest shall
constitute or result in (i) the abandonment, invalidation or unenforceability
of same or (ii) in a breach or termination pursuant to the terms of, or a
default under, any such lease, license, contract, property rights or agreement
(other than to the extent that any such term in the case of preceding clause
(i) or (ii) , as applicable) would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision
or provisions) of any relevant jurisdiction or any other applicable law
(including the Bankruptcy Code) or principles of equity), provided, however,
that (x) the security interests hereunder, shall attach immediately to any
portion of such lease, license, contact, property rights or agreement that
does not result in any of the consequences specified in (i) or (ii) and (y) to
any property or assets described above in this clause (a) on the first date
upon which the circumstances described in preceding clauses (i) and/or (ii)
(as relevant) no longer exist with respect thereto, (b) any property or asset
of Starpower Communications, LLC for so long as the organizational documents
of such entity prohibits the granting of a security interest in such property
or asset; provided that a security interest shall attach immediately upon (and
the exclusion to this clause (b) shall no longer apply at any time after) the
consummation of the Starpower Acquisition, or (c) the equity interests of (x)
Megacable, S.A. de C.V., MCM Holdings, S.A. de C.V. and Megacable
Telecommunicaciones, S.A. de C.V. for so long as the organizational documents
of such entities prohibits the granting of a security interest in such equity
interests; provided that such security interest shall attach immediately when
such prohibition is no longer in effect or (y) more than 65% of the Voting
Equity Interests of any Foreign Corporation; provided that each Assignor shall
be required to pledge hereunder 100% of any Non-Voting Equity Interests at any
time and from time to time acquired by such Assignor of any Foreign
Corporation.
(b) The security interest of the First-Lien Collateral Agent
under this Agreement extends to all Collateral which any Assignor may acquire,
or with respect to which any Assignor may obtain rights, at any time during
the term of this Agreement.
(c) Notwithstanding anything herein to the contrary, the
relative rights and remedies of First-Lien Collateral Agent shall be subject
to and governed by the terms of the Intercreditor Agreement at any time the
Intercreditor Agreement is in effect. In the event of any inconsistency
between the terms hereof and the Intercreditor Agreement, the Intercreditor
Agreement shall control at any time the Intercreditor Agreement is in effect.
1.2 Power of Attorney. Each Assignor hereby constitutes and
appoints the First-Lien Collateral Agent its true and lawful attorney,
irrevocably, with full power after the occurrence of and during the
continuance of an Event of Default (in the name of such Assignor or otherwise)
to act, require, demand, receive, compound and give acquittance for any and
all moneys and claims for moneys due or to become due to such Assignor under
or arising out of the Collateral, to endorse any checks or other instruments
or orders in connection therewith and to file any claims or take any action or
institute any proceedings which the First-Lien Collateral Agent may deem to be
necessary or advisable to protect the interests of the Secured Creditors,
which appointment as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which representations,
warranties and covenants shall survive execution and delivery of this
Agreement, as follows:
2.1 Necessary Filings. All filings, registrations,
recordings and other actions necessary or appropriate to create, preserve and
perfect the security interest granted by such Assignor to the First-Lien
Collateral Agent hereby in respect of the Collateral have been accomplished
(or will be accomplished within 5 days after the Initial Borrowing Date or,
with respect to Marks, Patents and Copyrights, within 30 days of the date of
the Initial Borrowing Date) and the security interest granted to the
First-Lien Collateral Agent pursuant to this Agreement in and to the
Collateral creates a valid and, together with all such filings, registrations,
recordings and other actions, a perfected security interest therein prior to
the rights of all other Persons therein and subject to no other Liens (other
than Permitted Liens) and is entitled to all the rights, priorities and
benefits afforded by the Uniform Commercial Code or other relevant law as
enacted in any relevant jurisdiction to perfected security interests, in each
case to the extent that the Collateral consists of the type of property in
which a security interest may be perfected by possession or control (within
the meaning of the UCC as in effect on the date hereof in the State of New
York), by filing a financing statement under the Uniform Commercial Code as
enacted in any relevant jurisdiction or by a filing of a Grant of Security
Interest in the respective form attached hereto in the United States Patent
and Trademark Office or in the United States Copyright Office. Each Assignor
hereby authorizes the First-Lien Collateral Agent to make duplicate filings as
if such Assignor is a Transmitting Utility, or alternatively, as if such
Assignor is a Person which is not a Transmitting Utility.
2.2 No Liens. Such Assignor is, and as to all Collateral
acquired by it from time to time after the date hereof such Assignor will be,
the owner of all Collateral free from any Lien, security interest, encumbrance
or other right, title or interest of any Person (other than Permitted Liens),
and such Assignor shall defend the Collateral against all claims and demands
of all Persons at any time claiming the same or any interest therein adverse
to the First-Lien Collateral Agent.
2.3 Other Financing Statements. As of the date hereof, there
is no financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) covering or purporting to cover any
interest of any kind in the Collateral (other than financing statements filed
in respect of Permitted Liens), and so long as the Termination Date has not
occurred, such Assignor will not execute or authorize to be filed in any
public office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby by such Assignor or in
connection with Permitted Liens.
2.4 Chief Executive Office, Record Locations. The chief
executive office of such Assignor is, on the date of this Agreement, located
at the address indicated on Annex A hereto for such Assignor. During the
period of the four calendar months preceding the date of this Agreement, the
chief executive office of such Assignor has not been located at any address
other than that indicated on Annex A in accordance with the immediately
preceding sentence, in each case unless each such other address is also
indicated on Annex A hereto for such Assignor.
2.5 Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof, or held at any time during the four
calendar months prior to the date hereof, by each Assignor is located at one
of the locations shown on Annex B hereto for such Assignor.
2.6 Legal Names; Type of Organization (and Whether a
Registered Organization); Jurisdiction of Organization; Location;
Organizational Identification Numbers; Changes Thereto; etc. The exact legal
name of each Assignor, the type of organization of such Assignor, whether or
not such Assignor is a Registered Organization, the jurisdiction of
organization of such Assignor, such Assignor's Location, the organizational
identification number (if any) of such Assignor is listed on Annex C hereto
for such Assignor. Such Assignor shall not change its legal name, its type of
organization, its status as a Registered Organization (in the case of a
Registered Organization), its jurisdiction of organization, its Location, or
its organizational identification number (if any) from that used on Annex C
hereto, except that any such changes shall be permitted (so long as not in
violation of the applicable requirements of the Secured Debt Agreements and so
long as same do not involve (x) a Registered Organization ceasing to
constitute same or (y) such Assignor changing its jurisdiction of organization
or Location from the United States or a State thereof to a jurisdiction of
organization or Location, as the case may be, outside the United States or a
State thereof) if (i) it shall have given to the First-Lien Collateral Agent
not less than 15 days' prior written notice of each change to the information
listed on Annex C (as adjusted for any subsequent changes thereto previously
made in accordance with this sentence), together with a supplement to Annex C
which shall correct all information contained therein for such Assignor, and
(ii) in connection with the respective such change or changes, it shall have
taken all action reasonably requested by the First-Lien Collateral Agent to
maintain the security interests of the First-Lien Collateral Agent in the
Collateral intended to be granted hereby at all times fully perfected and in
full force and effect. In addition, to the extent that such Assignor does not
have an organizational identification number on the date hereof and later
obtains one, such Assignor shall promptly thereafter notify the First-Lien
Collateral Agent of such organizational identification number and shall take
all actions reasonably satisfactory to the First-Lien Collateral Agent to the
extent necessary to maintain the security interest of the First-Lien
Collateral Agent in the Collateral intended to be granted hereby fully
perfected and in full force and effect.
2.7 Trade Names; Etc. Such Assignor has or operates in any
jurisdiction under, or in the preceding five years has had or has operated in
any jurisdiction under, no trade names, fictitious names or other names except
its legal name as specified in Annex C and such other trade or fictitious
names as are listed on Annex D hereto for such Assignor. Such Assignor shall
not assume or operate in any jurisdiction under any new trade, fictitious or
other name until (i) it shall have given to the First-Lien Collateral Agent
not less than 15 days' written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name will be
used and providing such other information in connection therewith as the
First-Lien Collateral Agent may reasonably request and (ii) with respect to
such new name, it shall have taken all action reasonably requested by the
First-Lien Collateral Agent to maintain the security interest of the
First-Lien Collateral Agent in the Collateral intended to be granted hereby at
all times fully perfected and in full force and effect.
2.8 Certain Significant Transactions. During the one year
period preceding the date of this Agreement, no Person shall have merged or
consolidated with or into any Assignor, and no Person shall have liquidated
into, or transferred all or substantially all of its assets to, any Assignor,
in each case except as described in Annex E hereto. With respect to any
transactions so described in Annex E hereto, the respective Assignor shall
have furnished such information with respect to the Person (and the assets of
the Person and locations thereof) which merged with or into or consolidated
with such Assignor, or was liquidated into or transferred all or substantially
all of its assets to such Assignor, and shall have furnished to the First-Lien
Collateral Agent such UCC lien searches as may have been requested with
respect to such Person and its assets, to establish that no security interest
(excluding Permitted Liens) continues perfected on the date hereof with
respect to any Person described above (or the assets transferred to the
respective Assignor by such Person), including without limitation pursuant to
Section 9-316(a)(3) of the UCC.
2.9 Non-UCC Property. At any time and from time to time,
promptly (and in any event within 15 days) following the request of the
First-Lien Collateral Agent or the Required Secured Creditors, the Assignors
shall provide the First-Lien Collateral Agent a reasonably detailed list
(which includes reasonable estimates of the fair market value (as determined
by the Assignors in good faith)) of all property owned by all of the Assignors
of the types described in clauses (1), (2) and (3) of Section 9-311(a) of the
UCC. At any time that the fair market value (as determined by the Borrower or
First-Lien Collateral Agent in good faith or as shown in any list delivered
pursuant to the immediately preceding sentence) of the property owned by all
of the Assignors of the types described in clauses (1), (2) and (3) of Section
9-311(a) of the UCC exceeds $2,000,000, the Assignors shall, but only upon the
written request of the Required Secured Creditors or the First-Lien Collateral
Agent, within 60 days of such request (or such longer period as the Required
Secured Creditors or the First-Lien Collateral Agent may agree to in writing)
take such actions (at their own cost and expense) as may be required under the
respective United States, State or other laws referenced in Section 9-311(a)
of the UCC to perfect the security interests granted herein in any Collateral
where the filing of a financing statement does not perfect the security
interest in such property in accordance with the provisions of Section
9-311(a) of the UCC.
2.10 As-Extracted Collateral; Timber-to-be-Cut. On the date
hereof, such Assignor does not own, or expect to acquire, any property which
constitutes, or would constitute, As-Extracted Collateral or Timber-to-be-Cut.
If at any time after the date of this Agreement such Assignor owns, acquires
or obtains rights to any As-Extracted Collateral or Timber-to-be-Cut, such
Assignor shall furnish the First-Lien Collateral Agent with prompt written
notice thereof (which notice shall describe in reasonable detail the
As-Extracted Collateral and/or Timber-to-be-Cut and the locations thereof) and
shall take all actions as may be deemed reasonably necessary or desirable by
the First-Lien Collateral Agent to perfect the security interest of the
First-Lien Collateral Agent therein.
2.11 Collateral in the Possession of a Bailee. If any
Inventory or other Goods are at any time in the possession of a bailee, such
Assignor shall promptly notify the First-Lien Collateral Agent thereof and, if
requested by the First-Lien Collateral Agent, shall use its commercially
reasonable efforts to promptly obtain an acknowledgment from such bailee, in
form and substance reasonably satisfactory to the First-Lien Collateral Agent,
that the bailee holds such Collateral for the benefit of the First-Lien
Collateral Agent and shall act upon the instructions of the First-Lien
Collateral Agent, without the further consent of such Assignor. The First-Lien
Collateral Agent agrees with such Assignor that the First-Lien Collateral
Agent shall not give any such instructions unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by the respective Assignor with respect to any such bailee.
2.12 Recourse. This Agreement is made with full recourse to
each Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
ARTICLE III
SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS;
INSTRUMENTS; CHATTEL PAPER AND CERTAIN OTHER COLLATERAL
3.1 Additional Representations and Warranties. As of the
time when each of its Accounts arises, each Assignor shall be deemed to have
represented and warranted that each such Account, and all records, papers and
documents relating thereto (if any) are genuine and what they purport to be,
and that all papers and documents (if any) relating thereto (i) will, to the
knowledge of such Assignor, represent the genuine, legal, valid and binding
obligation of the account debtor evidencing indebtedness unpaid and owed by
the respective account debtor arising out of the performance of labor or
services or the sale or lease and delivery of the merchandise listed therein,
or both, (ii) will be the only original writings evidencing and embodying such
obligation of the account debtor named therein (other than copies created for
general accounting purposes), (iii) will, to the knowledge of such Assignor,
evidence true and valid obligations, enforceable in accordance with their
respective terms, and (iv) will be in compliance and will conform in all
material respects with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.
3.2 Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Accounts and
Contracts, including, but not limited to, originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the First-Lien Collateral Agent for inspection, at such
Assignor's own cost and expense, at any and all reasonable times upon prior
notice to such Assignor and otherwise in accordance with the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default and at
the request of the First-Lien Collateral Agent, such Assignor shall, at its
own cost and expense, deliver all tangible evidence of its Accounts and
Contract Rights (including, without limitation, all documents evidencing the
Accounts and all Contracts) and such books and records to the First-Lien
Collateral Agent or to its representatives (copies of which evidence and books
and records may be retained by such Assignor). Upon the occurrence and during
the continuance of an Event of Default and if the First-Lien Collateral Agent
so directs, such Assignor shall legend, in form and manner satisfactory to the
First-Lien Collateral Agent, the Accounts and the Contracts, as well as books,
records and documents (if any) of such Assignor evidencing or pertaining to
such Accounts and Contracts with an appropriate reference to the fact that
such Accounts and Contracts have been assigned to the First-Lien Collateral
Agent and that the First-Lien Collateral Agent has a security interest
therein.
3.3 Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, if the
First-Lien Collateral Agent so directs any Assignor, such Assignor agrees (x)
to cause all payments on account of the Accounts and Contracts to be made
directly to the Cash Collateral Account, (y) that the First-Lien Collateral
Agent may, at its option, directly notify the obligors with respect to any
Accounts and/or under any Contracts to make payments with respect thereto as
provided in the preceding clause (x), and (z) that the First-Lien Collateral
Agent may enforce collection of any such Accounts and Contracts and may
adjust, settle or compromise the amount of payment thereof, in the same manner
and to the same extent as such Assignor. Without notice to or assent by any
Assignor, the First-Lien Collateral Agent may, upon the occurrence and during
the continuance of an Event of Default, apply any or all amounts then in, or
thereafter deposited in, the Cash Collateral Account toward the payment of the
Obligations in the manner provided in Section 7.4 of this Agreement. The
reasonable costs and expenses of collection (including reasonable attorneys'
fees), whether incurred by an Assignor or the First-Lien Collateral Agent,
shall be borne by the relevant Assignor. The First-Lien Collateral Agent shall
deliver a copy of each notice referred to in the preceding clause (y) to the
relevant Assignor, provided that (x) the failure by the First-Lien Collateral
Agent to so notify such Assignor shall not affect the effectiveness of such
notice or the other rights of the First-Lien Collateral Agent created by this
Section 3.3 and (y) no such notice shall be required if an Event of Default of
the type described in Section 10.05 of the Credit Agreement has occurred and
is continuing.
3.4 Modification of Terms; etc. Except in accordance with
such Assignor's ordinary course of business and consistent with reasonable
business judgment or as permitted by Section 3.5, no Assignor shall rescind or
cancel any indebtedness evidenced by any Account or under any Contract, or
modify any material term thereof or make any material adjustment with respect
thereto, or extend or renew the same, or compromise or settle any material
dispute, claim, suit or legal proceeding relating thereto, or sell any Account
or Contract, or interest therein, without the prior written consent of the
First-Lien Collateral Agent. No Assignor will do anything to impair the rights
of the First-Lien Collateral Agent in the Accounts or Contracts.
3.5 Collection. Each Assignor shall endeavor in accordance
with reasonable business practices to cause to be collected from the account
debtor named in each of its Accounts or obligor under any Contract, as and
when due (including, without limitation, amounts which are delinquent, such
amounts to be collected in accordance with generally accepted lawful
collection procedures) any and all amounts owing under or on account of such
Account or Contract, and apply forthwith upon receipt thereof all such amounts
as are so collected to the outstanding balance of such Account or under such
Contract. Except as otherwise directed by the First-Lien Collateral Agent
after the occurrence and during the continuation of an Event of Default, any
Assignor may allow in the ordinary course of business as adjustments to
amounts owing under its Accounts and Contracts (i) an extension or renewal of
the time or times of payment, or settlement for less than the total unpaid
balance, which such Assignor finds appropriate in accordance with reasonable
business judgment and (ii) a refund or credit due as a result of returned or
damaged merchandise or improperly performed services or for other reasons
which such Assignor finds appropriate in accordance with reasonable business
judgment. The reasonable costs and expenses (including, without limitation,
reasonable attorneys' fees) of collection, whether incurred by an Assignor or
the First-Lien Collateral Agent, shall be borne by the relevant Assignor.
3.6 Instruments. If any Assignor owns or acquires any
Instrument in excess of $100,000 constituting Collateral (other than checks
and other payment instruments received and collected in the ordinary course of
business), such Assignor will within 10 Business Days notify the First-Lien
Collateral Agent thereof, and upon request by the First-Lien Collateral Agent
will promptly deliver such Instrument to the First-Lien Collateral Agent
appropriately endorsed to the order of the First-Lien Collateral Agent.
3.7 Assignors Remain Liable Under Accounts. Anything herein
to the contrary notwithstanding, the Assignors shall remain liable under each
of the Accounts to observe and perform all of the conditions and obligations
to be observed and performed by it thereunder, all in accordance with the
terms of any agreement giving rise to such Accounts. Neither the First-Lien
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Account (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the First-Lien
Collateral Agent or any other Secured Creditor of any payment relating to such
Account pursuant hereto, nor shall the First-Lien Collateral Agent or any
other Secured Creditor be obligated in any manner to perform any of the
obligations of any Assignor under or pursuant to any Account (or any agreement
giving rise thereto), to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by them or as to the
sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.
3.8 Assignors Remain Liable Under Contracts. Anything herein
to the contrary notwithstanding, the Assignors shall remain liable under each
of the Contracts to observe and perform all of the conditions and obligations
to be observed and performed by them thereunder, all in accordance with and
pursuant to the terms and provisions of each Contract. Neither the First-Lien
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Contract by reason of or arising out of this Agreement or
the receipt by the First-Lien Collateral Agent or any other Secured Creditor
of any payment relating to such Contract pursuant hereto, nor shall the
First-Lien Collateral Agent or any other Secured Creditor be obligated in any
manner to perform any of the obligations of any Assignor under or pursuant to
any Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any performance by any party under any Contract, to present or
file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to them or to which
they may be entitled at any time or times.
3.9 Deposit Accounts; Etc. (a) No Assignor maintains, or at
any time after the date of this Agreement shall establish or maintain, any
demand, time, savings, passbook or similar account, except for such accounts
maintained with a bank (as defined in Section 9-102 of the UCC) whose
jurisdiction (determined in accordance with Section 9-304 of the UCC) is
within a State of the United States. Annex F hereto accurately sets forth, as
of the date of this Agreement, for each Assignor, each Deposit Account
maintained by such Assignor (including a description thereof and the
respective account number), the name of the respective bank with which such
Deposit Account is maintained, and the jurisdiction of the respective bank
with respect to such Deposit Account. For each Deposit Account (other than the
Cash Collateral Account or any other Deposit Account maintained with the
First-Lien Collateral Agent), the respective Assignor shall cause the bank
with which the Deposit Account is maintained to execute and deliver to the
First-Lien Collateral Agent, within 45 days after the date of this Agreement
(as such date may be extended by the First-Lien Collateral Agent) or, if
later, at the time of the establishment of the respective Deposit Account, a
"control agreement" in the form of Annex G hereto (appropriately completed),
with such changes thereto as may be acceptable to the First-Lien Collateral
Agent. If any bank with which a Deposit Account is maintained refuses to, or
does not, enter into such a "control agreement", then the respective Assignor
shall promptly (and in any event within 45 days after the date of this
Agreement or, if later, 30 days after the establishment of such account) close
the respective Deposit Account and transfer all balances therein to the Cash
Collateral Account or another Deposit Account meeting the requirements of this
Section 3.9. If any bank with which a Deposit Account is maintained refuses to
subordinate all its claims, subject to customary exceptions, with respect to
such Deposit Account to the First-Lien Collateral Agent's security interest
therein on terms satisfactory to the First-Lien Collateral Agent, then the
First-Lien Collateral Agent, at its option, may (x) require that such Deposit
Account be terminated in accordance with the immediately preceding sentence or
(y) agree to a "control agreement" without such subordination, provided that
in such event the First-Lien Collateral Agent may at any time, at its option,
subsequently require that such Deposit Account be terminated (within 30 days
after notice from the First-Lien Collateral Agent) (as such date may be
extended by the First-Lien Collateral Agent) in accordance with the
requirements of the immediately preceding sentence.
(b) After the date of this Agreement, no Assignor shall
establish any new demand, time, savings, passbook or similar account, except
for Deposit Accounts established and maintained with banks and meeting the
requirements of preceding clause (a). At the time any such Deposit Account is
established, the appropriate "control agreement" shall be entered into in
accordance with the requirements of preceding clause (a) and the respective
Assignor shall furnish to the First-Lien Collateral Agent a supplement to
Annex F hereto containing the relevant information with respect to the
respective Deposit Account and the bank with which same is established.
3.10 Letter-of-Credit Rights. If any Assignor is at any time
a beneficiary under a letter of credit with a stated amount of $1,000,000 or
more, such Assignor shall promptly notify the First-Lien Collateral Agent
thereof and, at the request of the First-Lien Collateral Agent, such Assignor
shall, pursuant to an agreement in form and substance reasonably satisfactory
to the First-Lien Collateral Agent, use its reasonable best efforts to (i)
arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to the First-Lien Collateral Agent of the proceeds of any
drawing under such letter of credit or (ii) arrange for the First-Lien
Collateral Agent to become the transferee beneficiary of such letter of
credit, with the First-Lien Collateral Agent agreeing, in each case, that the
proceeds of any drawing under the letter of credit are to be applied as
provided in this Agreement after the occurrence and during the continuance of
an Event of Default.
3.11 Commercial Tort Claims. All Commercial Tort Claims of
each Assignor in existence on the date of this Agreement are described in
Annex H hereto. If any Assignor shall at any time after the date of this
Agreement acquire a Commercial Tort Claim in an amount (taking the greater of
the aggregate claimed damages thereunder or the reasonably estimated value
thereof) of $1,000,000 or more, such Assignor shall promptly notify the
First-Lien Collateral Agent thereof in a writing signed by such Assignor and
describing the details thereof and shall grant to the First-Lien 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 reasonably satisfactory to the First-Lien Collateral Agent.
3.12 Chattel Paper. Upon the request of the First-Lien
Collateral Agent made at any time or from time to time, each Assignor shall
promptly furnish to the First-Lien Collateral Agent a list of all Electronic
Chattel Paper held or owned by such Assignor. Furthermore, if requested by the
First-Lien Collateral Agent, each Assignor shall promptly take all actions
which are reasonably practicable so that the First-Lien Collateral Agent has
"control" of all Electronic Chattel Paper in accordance with the requirements
of Section 9-105 of the UCC. Each Assignor will promptly (and in any event
within 10 days) following any request by the First-Lien Collateral Agent,
deliver all of its Tangible Chattel Paper to the First-Lien Collateral Agent.
3.13 Further Actions. Each Assignor will, at its own
expense, make, execute, endorse, acknowledge, file and/or deliver to the
First-Lien Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements,
transfer endorsements, certificates, reports and other assurances or
instruments and take such further steps, including any and all actions as may
be necessary or required under the Federal Assignment of Claims Act, relating
to its Accounts, Contracts, Instruments and other property or rights covered
by the security interest hereby granted, as the First-Lien Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES
4.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of all right,
title and interest in and to the registered Marks and Domain Names listed in
Annex I hereto for such Assignor and that said listed Marks and Domain Names
include all United States marks and applications for United States marks owned
or purported to be owned by such Assignor registered in the United States
Patent and Trademark Office, as well as all Domain Names that such Assignor
owns or purports to own as of the date hereof. Each Assignor represents and
warrants that it owns, is licensed to use or otherwise has the right to use
any trademarks, service marks or other indicia of origin, including trade
dress, and any Internet domain names, that it uses. Each Assignor further
warrants that it has no knowledge of any third party claim received by it that
any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any trademark, service ▇▇▇▇ or trade name of any
other Person other than as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each Assignor
represents and warrants that the registrations of Marks listed in Annex I
hereto are valid, subsisting, have not been canceled and that such Assignor is
not aware of any third-party claim that any of said registrations is invalid
or unenforceable, and is not aware that there is any reason that any of said
registrations is invalid or unenforceable, and is not aware that there is any
reason that any of said applications will not mature into registrations, other
than as could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Assignor hereby grants to the
First-Lien Collateral Agent an absolute power of attorney to sign, upon the
occurrence and during the continuance of an Event of Default, any document
which may be required by the United States Patent and Trademark Office or
similar registrar in order to effect an absolute assignment of all right,
title and interest in each ▇▇▇▇ and/or Domain Name, and record the same.
4.2 Licenses and Assignments. Except as otherwise permitted
by the Secured Debt Agreements, each Assignor hereby agrees not to divest
itself of any right under any ▇▇▇▇ or Domain Name absent prior written
approval of the First-Lien Collateral Agent.
4.3 Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the First-Lien Collateral Agent in writing of the
name and address of, and to furnish such pertinent information that may be
available with respect to, any party who such Assignor believes is, or is
likely to be, infringing or diluting or otherwise violating any of such
Assignor's rights in and to any ▇▇▇▇ or Domain Name in any manner that could
reasonably be expected to have a Material Adverse Effect, or with respect to
any party claiming that such Assignor's use of any ▇▇▇▇ or Domain Name
material to such Assignor's business violates in any material respect any
property right of that party. Each Assignor further agrees to prosecute
diligently in accordance with reasonable business practices any Person
infringing any ▇▇▇▇ or Domain Name in any manner that could reasonably be
expected to have a Material Adverse Effect.
4.4 Preservation of Marks and Domain Names. Each Assignor
agrees to use its Marks and Domain Names which are material to such Assignor's
business in interstate commerce during the time in which this Agreement is in
effect and to take all such other actions as are reasonably necessary to
preserve such Marks as trademarks or service marks under the laws of the
United States (other than any such Marks which Assignor reasonably determines
are no longer used or useful in its business or operations).
4.5 Maintenance of Registration. Each Assignor shall, at its
own expense, diligently process all documents reasonably required to maintain
all ▇▇▇▇ and/or Domain Name registrations, including but not limited to
affidavits of use and applications for renewals of registration in the United
States Patent and Trademark Office for all of its material registered Marks,
and shall pay all fees and disbursements in connection therewith and shall not
abandon any such filing of affidavit of use or any such application of renewal
prior to the exhaustion of all administrative and judicial remedies without
prior written consent of the First-Lien Collateral Agent (other than with
respect to registrations and applications deemed by such Assignor in its
reasonable business judgment to be no longer prudent to pursue).
4.6 Future Registered Marks and Domain Names. If any ▇▇▇▇
registration is issued hereafter to any Assignor as a result of any
application now or hereafter pending before the United States Patent and
Trademark Office or any Domain Name is registered by Assignor, within 60 days
of receipt of such certificate or similar indicia of ownership, such Assignor
shall deliver to the First-Lien Collateral Agent a copy of such registration
certificate or similar indicia of ownership, and a grant of a security
interest in such ▇▇▇▇ and/or Domain Name, to the First-Lien Collateral Agent
and at the expense of such Assignor, confirming the grant of a security
interest in such ▇▇▇▇ and/or Domain Name to the First-Lien Collateral Agent
hereunder, the form of such security to be substantially in the form of Annex
L hereto or in such other form as may be reasonably satisfactory to the
First-Lien Collateral Agent.
4.7 Remedies. If an Event of Default shall occur and be
continuing, the First-Lien Collateral Agent may, by written notice to the
relevant Assignor, take any or all of the following actions: (i) declare the
entire right, title and interest of such Assignor in and to each of the Marks
and Domain Names, together with all trademark rights and rights of protection
to the same, vested in the First-Lien Collateral Agent for the benefit of the
Secured Creditors, in which event such rights, title and interest shall
immediately vest, in the First-Lien Collateral Agent for the benefit of the
Secured Creditors, and the First-Lien Collateral Agent shall be entitled to
exercise the power of attorney referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment
with the applicable agency or registrar; (ii) take and use or sell the Marks
or Domain Names and the goodwill of such Assignor's business symbolized by the
Marks or Domain Names and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks or Domain Names
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks or Domain Names in any manner
whatsoever, directly or indirectly, and such Assignor shall execute such
further documents that the First-Lien Collateral Agent may reasonably request
to further confirm this and to transfer ownership of the Marks or Domain Names
and registrations and any pending trademark applications in the United States
Patent and Trademark Office or applicable Domain Name registrar to the
First-Lien Collateral Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1 Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of all rights in
(i) the Trade Secret Rights, (ii) all right, title and interest in and to the
Patents listed in Annex J hereto for such Assignor and that said Patents
include all the United States patents and applications for United States
patents that such Assignor owns as of the date hereof and (iii) all right,
title and interest in and to the registered Copyrights listed in Annex K
hereto for such Assignor and that said Copyrights include all the United
States copyrights registered with the United States Copyright Office and
applications to United States copyrights that such Assignor owns as of the
date hereof. Each Assignor further warrants that it has no knowledge of any
third party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any patent of any other Person
or such Assignor has misappropriated any trade secret or proprietary
information which, either individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. Each Assignor represents and
warrants that the Patents listed in Annex J hereto are valid, subsisting, have
not been canceled and that such Assignor is not aware of any third-party claim
that any of said Patents are invalid or unenforceable, and is not aware that
there is any reason that any of said Patents are invalid or unenforceable, and
is not aware that there is any reason that any of said Patent applications
will not mature into issued Patents. Each Assignor hereby grants to the
First-Lien Collateral Agent an absolute power of attorney to sign, upon the
occurrence and during the continuance of any Event of Default, any document
which may be required by the United States Patent and Trademark Office or the
United States Copyright Office in order to effect an absolute assignment of
all right, title and interest in each Patent or Copyright, and to record the
same.
5.2 Licenses and Assignments. Except as otherwise permitted
by the Secured Debt Agreements, each Assignor hereby agrees not to divest
itself of any right under any Patent or Copyright absent prior written
approval of the First-Lien Collateral Agent.
5.3 Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the First-Lien Collateral Agent in writing with
all pertinent information available to such Assignor with respect to any
infringement, contributing infringement or active inducement to infringe or
other violation of such Assignor's rights in any Patent or Copyright or to any
claim that the practice of any Patent or use of any Copyright violates any
property right of a third party, or with respect to any misappropriation of
any Trade Secret Right or any claim that practice of any Trade Secret Right
violates any property right of a third party, in each case, in any manner
which, either individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect. Each Assignor further agrees, absent
direction of the First-Lien Collateral Agent to the contrary, to diligently
prosecute, in accordance with its reasonable business judgment, any Person
infringing any Patent or Copyright or any Person misappropriating any Trade
Secret Right, in each case to the extent that such infringement or
misappropriation, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.4 Maintenance of Patents or Copyrights. At its own
expense, each Assignor shall make timely payment of all post-issuance fees
required to maintain in force its rights under each Patent or Copyright,
absent prior written consent of the First-Lien Collateral Agent (other than
any such Patents or Copyrights which are no longer used or are deemed by such
Assignor in its reasonable business judgment to no longer be useful in its
business or operations).
5.5 Prosecution of Patent Applications. At its own expense,
each Assignor shall diligently prosecute all material applications for the
United States Patents listed in Annex J hereto, in each case for such Assignor
and shall not abandon any such application prior to exhaustion of all
administrative and judicial remedies (other than applications that are deemed
by such Assignor in its reasonable business judgment to no longer be necessary
in the conduct of the Assignor's business), absent written consent of the
First-Lien Collateral Agent.
5.6 Other Patents and Copyrights. Within 30 days of the
acquisition or issuance of a United States Patent, registration of a
Copyright, or acquisition of a registered Copyright, or of filing of an
application for a United States Patent or Copyright, the relevant Assignor
shall deliver to the First-Lien Collateral Agent a copy of said Copyright or
Patent, or certificate or registration of, or application therefor, as the
case may be, with a grant of a security interest as to such Patent or
Copyright, as the case may be, to the First-Lien Collateral Agent and at the
expense of such Assignor, confirming the grant of a security interest, the
form of such grant of a security interest to be substantially in the form of
Annex M or N hereto, as appropriate, or in such other form as may be
reasonably satisfactory to the First-Lien Collateral Agent.
5.7 Remedies. If an Event of Default shall occur and be
continuing, the First-Lien Collateral Agent may, by written notice to the
relevant Assignor, take any or all of the following actions: (i) declare the
entire right, title, and interest of such Assignor in each of the Patents and
Copyrights vested in the First-Lien Collateral Agent for the benefit of the
Secured Creditors, in which event such right, title, and interest shall
immediately vest in the First-Lien Collateral Agent for the benefit of the
Secured Creditors, in which case the First-Lien Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof
to execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such
further documents as the First-Lien Collateral Agent may reasonably request
further to confirm this and to transfer ownership of the Patents and
Copyrights to the First-Lien Collateral Agent for the benefit of the Secured
Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1 Protection of First-Lien Collateral Agent's Security.
Except as otherwise permitted by the Secured Debt Agreements, each Assignor
will do nothing to impair the rights of the First-Lien Collateral Agent in the
Collateral. Each Assignor will at all times maintain insurance, at such
Assignor's own expense to the extent and in the manner provided in the Secured
Debt Agreements. Except to the extent otherwise permitted to be retained by
such Assignor or applied by such Assignor pursuant to the terms of the Secured
Debt Agreements, the First-Lien Collateral Agent shall, at the time any
proceeds of such insurance are distributed to the Secured Creditors, apply
such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all
liability and responsibility in connection with the Collateral acquired by it
and the liability of such Assignor to pay the Obligations shall in no way be
affected or diminished by reason of the fact that such Collateral may be lost,
destroyed, stolen, damaged or for any reason whatsoever unavailable to such
Assignor.
6.2 Warehouse Receipts Non-Negotiable. To the extent
practicable, each Assignor agrees that if any warehouse receipt or receipt in
the nature of a warehouse receipt is issued with respect to any of its
Inventory, such Assignor shall request that such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in
Section 7-104 of the Uniform Commercial Code as in effect in any relevant
jurisdiction or under other relevant law).
6.3 Additional Information. Each Assignor will, at its own
expense, from time to time upon the reasonable request of the First-Lien
Collateral Agent, promptly (and in any event within 10 days after its receipt
of the respective request) furnish to the First-Lien Collateral Agent such
information with respect to the Collateral (including the identity of the
Collateral or such components thereof as may have been requested by the
First-Lien Collateral Agent, the value and location of such Collateral, etc.)
as may be requested by the First-Lien Collateral Agent. Without limiting the
forgoing, each Assignor agrees that it shall promptly (and in any event within
10 days after its receipt of the respective request) furnish to the First-Lien
Collateral Agent such updated Annexes hereto as may from time to time be
reasonably requested by the First-Lien Collateral Agent.
6.4 Further Actions. Each Assignor will, at its own expense
and upon the reasonable request of the First-Lien Collateral Agent, make,
execute, endorse, acknowledge, file and/or deliver to the First-Lien
Collateral Agent from time to time such lists, descriptions and designations
of its Collateral, warehouse receipts, receipts in the nature of warehouse
receipts, bills of lading, documents of title, vouchers, invoices, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and
take such further steps relating to the Collateral and other property or
rights covered by the security interest hereby granted, which the First-Lien
Collateral Agent deems reasonably appropriate or advisable to perfect,
preserve or protect its security interest in the Collateral.
6.5 Financing Statements. Each Assignor agrees to execute
and deliver to the First-Lien Collateral Agent such financing statements, in
form reasonably acceptable to the First-Lien Collateral Agent, as the
First-Lien Collateral Agent may from time to time reasonably request or as are
reasonably necessary or desirable in the opinion of the First-Lien Collateral
Agent to establish and maintain a valid, enforceable, perfected security
interest in the Collateral as provided herein and the other rights and
security contemplated hereby. Each Assignor will pay any applicable filing
fees, recordation taxes and related expenses relating to its Collateral. Each
Assignor hereby authorizes the First-Lien Collateral Agent to file any such
financing statements without the signature of such Assignor where permitted by
law (and such authorization includes describing the Collateral as "all assets"
of such Assignor).
ARTICLE VII
REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT
7.1 Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the First-Lien Collateral Agent, in
addition to any rights now or hereafter existing under applicable law and
under the other provisions of this Agreement, shall have all rights as a
secured creditor under any UCC, and such additional rights and remedies to
which a secured creditor is entitled under the laws in effect in all relevant
jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Accounts and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the First-Lien Collateral Agent and may exercise
any and all remedies of such Assignor in respect of such Collateral;
(iii) instruct all banks which have entered into a control
agreement with the First-Lien Collateral Agent to transfer all monies,
securities and instruments held by such depositary bank to the Cash
Collateral Account;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct such Assignor to sell, assign or otherwise liquidate any or all of
the Collateral or any part thereof, and, in each case, take possession of
the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof,
by directing such Assignor in writing to deliver the same to the
First-Lien Collateral Agent at any reasonable place or places designated
by the First-Lien Collateral Agent, in which event such Assignor shall at
its own expense:
(x) forthwith cause the same to be moved
to the place or places so designated by the
First-Lien Collateral Agent and there delivered to
the First-Lien Collateral Agent;
(y) store and keep any Collateral so
delivered to the First-Lien Collateral Agent at
such place or places pending further action by the
First-Lien Collateral Agent as provided in Section
7.2 hereof; and
(z) while the Collateral shall be so
stored and kept, provide such security and
maintenance services as shall be reasonably
necessary to protect the same and to preserve and
maintain it in good condition;
(vi) subject to any exclusive license issued prior to the
Event of Default, license or sublicense, whether on an exclusive or
nonexclusive basis, any Marks, Domain Names, Patents or Copyrights
included in the Collateral for such term and on such conditions and in
such manner as the First-Lien Collateral Agent shall in its sole judgment
determine; provided in the case of Marks to the maintenance of quality
standards, not less than comparable to the standards in place at the time
of the Event of Default;
(vii) apply any monies constituting Collateral or proceeds
thereof in accordance with the provisions of Section 7.4; and
(viii) take any other action as specified in clauses (1)
through (5), inclusive, of Section 9-607 of the UCC;
it being understood that each Assignor's obligation so to deliver the
Collateral is of the essence of this Agreement and that, accordingly, upon
application to a court of equity having jurisdiction, the First-Lien
Collateral Agent shall be entitled to a decree requiring specific performance
by such Assignor of said obligation. By accepting the benefits of this
Agreement and each other Security Document, the Secured Creditors expressly
acknowledge and agree that this Agreement and each other Security Document may
be enforced only by the action of the First-Lien Collateral Agent acting upon
the instructions of the Required Secured Creditors and that no other Secured
Creditor shall have any right individually to seek to enforce or to enforce
this Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
First-Lien Collateral Agent or the holders of at least a majority of the
outstanding Other Obligations, as the case may be, for the benefit of the
Secured Creditors upon the terms of this Agreement and the other Security
Documents. Furthermore, each Assignor agrees to upon the occurrence and
continuance of an Event of Default, use its commercially reasonable efforts to
assist the First-Lien Collateral Agent in obtaining any approvals or
assignments or licenses from any relevant Governmental Authority that may be
necessary for the exercise of the rights and remedies of the First-Lien
Collateral Agent with respect to the Collateral.
7.2 Remedies; Disposition of the Collateral. If any Event of
Default shall have occurred and be continuing, then any Collateral repossessed
by the First-Lien Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the First-Lien
Collateral Agent, may be sold, assigned, leased or otherwise disposed of under
one or more contracts or as an entirety, and without the necessity of
gathering at the place of sale the property to be sold, and in general in such
manner, at such time or times, at such place or places and on such terms as
the First-Lien Collateral Agent may, in compliance with any mandatory
requirements of applicable law, determine to be commercially reasonable. Any
of the Collateral may be sold, leased or otherwise disposed of, in the
condition in which the same existed when taken by the First-Lien Collateral
Agent or after any overhaul or repair at the expense of the relevant Assignor
which the First-Lien Collateral Agent shall determine to be commercially
reasonable. Any such sale, lease or other disposition may be effected by means
of a public disposition or private disposition, effected in accordance with
the applicable requirements (in each case if and to the extent applicable) of
Sections 9-610 through 9-613 of the UCC and/or such other mandatory
requirements of applicable law as may apply to the respective disposition. The
First-Lien Collateral Agent may, without notice or publication, adjourn any
public or private disposition or cause the same to be adjourned from time to
time by announcement at the time and place fixed for the disposition, and such
disposition may be made at any time or place to which the disposition may be
so adjourned. To the extent permitted by any such requirement of law, the
First-Lien Collateral Agent may bid for and become the purchaser (and may pay
all or any portion of the purchase price by crediting Obligations against the
purchase price) of the Collateral or any item thereof, offered for disposition
in accordance with this Section 7.2 without accountability to the relevant
Assignor. If, under applicable law, the First-Lien Collateral Agent shall be
permitted to make disposition of the Collateral within a period of time which
does not permit the giving of notice to the relevant Assignor as hereinabove
specified, the First-Lien Collateral Agent need give such Assignor only such
notice of disposition as shall be required by such applicable law. Each
Assignor agrees to do or cause to be done all such other acts and things as
may be reasonably necessary to make such disposition or dispositions of all or
any portion of the Collateral valid and binding and in compliance with any and
all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at
such Assignor's expense.
7.3 Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE FIRST-LIEN COLLATERAL
AGENT'S TAKING POSSESSION OR THE FIRST-LIEN COLLATERAL AGENT'S DISPOSITION OF
ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE
AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby
further waives, to the extent permitted by law:
(i) all damages occasioned by such taking of possession or
any such disposition except any damages which are the direct result of
the First-Lien Collateral Agent's gross negligence or willful misconduct
(as determined by a court of competent jurisdiction in a final and
non-appealable decision);
(ii) all other requirements as to the time, place and terms
of sale or other requirements with respect to the enforcement of the
First-Lien Collateral Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation,
stay, extension or moratorium now or hereafter in force under any
applicable law in order to prevent or delay the enforcement of this
Agreement or the absolute sale of the Collateral or any portion thereof,
and each Assignor, for itself and all who may claim under it, insofar as
it or they now or hereafter lawfully may, hereby waives the benefit of
all such laws.
Any sale of, or the grant of options to purchase, or any other
realization upon, any Collateral shall operate to divest all right, title,
interest, claim and demand, either at law or in equity, of the relevant
Assignor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Assignor and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through and under such Assignor.
7.4 Application of Proceeds. (a) All moneys collected by the
First-Lien Collateral Agent (or, to the extent the Pledge Agreement or any
other Security Document requires proceeds of collateral under such other
Security Document to be applied in accordance with the provisions of this
Agreement, the Pledgee or First-Lien Collateral Agent under such other
Security Document) upon any sale or other disposition of the Collateral,
together with all other moneys received by the First-Lien Collateral Agent
hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the
First-Lien Collateral Agent of the type described in clauses (iii), (iv)
and (v) of the definition of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), to the payment of all
amounts owing to any Agent of the type described in clauses (v) and (vi)
of the definition of "Obligations";
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 7.4(e) hereof, with each Secured
Creditor receiving an amount equal to its outstanding Primary Obligations
or, if the proceeds are insufficient to pay in full all such Primary
Obligations, its Pro Rata Share of the amount remaining to be
distributed;
(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, an amount equal to the outstanding Secondary Obligations shall
be paid to the Secured Creditors as provided in Section 7.4(e) hereof,
with each Secured Creditor receiving an amount equal to its outstanding
Secondary Obligations or, if the proceeds are insufficient to pay in full
all such Secondary Obligations, its Pro Rata Share of the amount
remaining to be distributed; and
(v) fifth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iv),
inclusive, and following the termination of this Agreement pursuant to
Section 10.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement, (x) "Pro Rata Share"
shall mean, when calculating a Secured Creditor's portion of any distribution
or amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's
Primary Obligations or Secondary Obligations, as the case may be, and the
denominator of which is the then outstanding amount of all Primary Obligations
or Secondary Obligations, as the case may be, (y) "Primary Obligations" shall
mean (i) in the case of the Credit Document Obligations, all principal of,
premium, fees and interest on, all Loans, all Unpaid Drawings, the Stated
Amount of all outstanding Letters of Credit and all Fees and (ii) in the case
of the Other Obligations, all amounts due under each Interest Rate Protection
Agreement and each Other Hedging Agreement with an Other Creditor (other than
indemnities, fees (including, without limitation, attorneys' fees) and similar
obligations and liabilities) and (z) "Secondary Obligations" shall mean all
Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of
the other Secured Creditors, with each Secured Creditor whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid
in full to receive an amount equal to such excess amount multiplied by a
fraction the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Creditor and the denominator
of which is the unpaid Primary Obligations or Secondary Obligations, as the
case may be, of all Secured Creditors entitled to such distribution.
(d) Each of the Secured Creditors, by their acceptance of
the benefits hereof and of the other Security Documents, agrees and
acknowledges that if the Lender Creditors receive a distribution on account of
undrawn amounts with respect to Letters of Credit issued under the Credit
Agreement (which shall only occur after all outstanding Revolving Loans under
the Credit Agreement and Unpaid Drawings have been paid in full), such amounts
shall be paid to the Administrative Agent under the Credit Agreement and held
by it, for the equal and ratable benefit of the Lender Creditors, as cash
security for the repayment of Obligations owing to the Lender Creditors as
such. If any amounts are held as cash security pursuant to the immediately
preceding sentence, then upon the termination of all outstanding Letters of
Credit under the Credit Agreement, and after the application of all such cash
security to the repayment of all Obligations owing to the Lender Creditors
after giving effect to the termination of all such Letters of Credit, if there
remains any excess cash, such excess cash shall be returned by the
Administrative Agent to the First-Lien Collateral Agent for distribution in
accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made
(x) if to the Lender Creditors, to the Administrative Agent for the account of
the Lender Creditors and (y) if to the Other Creditors, to the trustee, paying
agent or other similar representative (each, a "Representative") for the Other
Creditors or, in the absence of such a Representative, directly to the Other
Creditors.
(f) For purposes of applying payments received in accordance
with this Section 7.4, the First-Lien Collateral Agent shall be entitled to
rely upon (i) the Administrative Agent and (ii) the Representative or, in the
absence of such a Representative, upon the Other Creditors for a determination
(which the Administrative Agent, each Representative and the Other Creditors
agree (or shall agree) to provide upon request of the First-Lien Collateral
Agent) of the outstanding Primary Obligations and Secondary Obligations owed
to the Lender Creditors or the Other Creditors, as the case may be. Unless it
has received written notice from a Lender Creditor or an Other Creditor to the
contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the First-Lien Collateral
Agent, in acting hereunder, shall be entitled to assume that no Secondary
Obligations are outstanding. Unless it has written notice from an Other
Creditor to the contrary, the First-Lien Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Other Hedging Agreements are in existence.
(g) It is understood that the Assignors shall remain jointly
and severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
7.5 Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the First-Lien Collateral Agent shall be
in addition to every other right, power and remedy specifically given to the
First-Lien Collateral Agent under this Agreement, the other Secured Debt
Agreements or now or hereafter existing at law, in equity or by statute and
each and every right, power and remedy whether specifically herein given or
otherwise existing may be exercised from time to time or simultaneously and as
often and in such order as may be deemed expedient by the First-Lien
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of the exercise of one shall not be deemed a
waiver of the right to exercise any other or others. No delay or omission of
the First-Lien Collateral Agent in the exercise of any such right, power or
remedy and no renewal or extension of any of the Obligations shall impair any
such right, power or remedy or shall be construed to be a waiver of any
Default or Event of Default or an acquiescence thereof. No notice to or demand
on any Assignor in any case shall entitle it to any other or further notice or
demand in similar or other circumstances or constitute a waiver of any of the
rights of the First-Lien Collateral Agent to any other or further action in
any circumstances without notice or demand. In the event that the First-Lien
Collateral Agent shall bring any suit to enforce any of its rights hereunder
and shall be entitled to judgment, then in such suit the First-Lien Collateral
Agent may recover reasonable expenses, including reasonable attorneys' fees,
and the amounts thereof shall be included in such judgment.
7.6 Discontinuance of Proceedings. In case the First-Lien
Collateral Agent shall have instituted any proceeding to enforce any right,
power or remedy under this Agreement by foreclosure, sale, entry or otherwise,
and such proceeding shall have been discontinued or abandoned for any reason
or shall have been determined adversely to the First-Lien Collateral Agent,
then and in every such case the relevant Assignor, the First-Lien Collateral
Agent and each holder of any of the Obligations shall be restored to their
former positions and rights hereunder with respect to the Collateral subject
to the security interest created under this Agreement, and all rights,
remedies and powers of the First-Lien Collateral Agent shall continue as if no
such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1 Indemnity. (a) Each Assignor jointly and severally
agrees to indemnify, reimburse and hold the First-Lien Collateral Agent, each
other Secured Creditor and their respective successors, assigns, employees,
affiliates and agents (hereinafter in this Section 8.1 referred to
individually as "Indemnitee," and collectively as "Indemnitees") harmless from
any and all liabilities, obligations, damages, injuries, penalties, claims,
demands, actions, suits, judgments and any and all costs, expenses or
disbursements (including reasonable attorneys' fees and expenses) (for the
purposes of this Section 8.1 the foregoing are collectively called "expenses")
of whatsoever kind and nature imposed on, asserted against or incurred by any
of the Indemnitees in any way relating to or arising out of this Agreement,
any other Secured Debt Agreement or any other document executed in connection
herewith or therewith or in any other way connected with the administration of
the transactions contemplated hereby or thereby or the enforcement of any of
the terms of, or the preservation of any rights under any thereof, or in any
way relating to or arising out of the manufacture, ownership, ordering,
purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on
account of injury to or the death of any Person (including any Indemnitee), or
property damage), or contract claim; provided that no Indemnitee shall be
indemnified pursuant to this Section 8.1(a) for losses, damages or liabilities
to the extent caused by the gross negligence or willful misconduct of such
Indemnitee (as determined by a court of competent jurisdiction in a final and
non-appealable decision). Each Assignor agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, suit or judgment, the relevant Assignor shall
assume full responsibility for the defense thereof. Each Indemnitee agrees to
use its best efforts to promptly notify the relevant Assignor of any such
assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a)
hereof, each Assignor agrees, jointly and severally, to pay or reimburse the
First-Lien Collateral Agent for any and all reasonable fees, costs and
expenses of whatever kind or nature incurred in connection with the creation,
preservation or protection of the First-Lien Collateral Agent's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens upon
or in respect of the Collateral, premiums for insurance with respect to the
Collateral and all other fees, costs and expenses in connection with
protecting, maintaining or preserving the Collateral and the First-Lien
Collateral Agent's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or
(b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and
hold each Indemnitee harmless from and against any loss, costs, damages and
expenses which such Indemnitee may suffer, expend or incur in consequence of
or growing out of any misrepresentation by any Assignor in this Agreement, any
other Secured Debt Agreement or in any writing contemplated by or made or
delivered pursuant to or in connection with this Agreement or any other
Secured Debt Agreement.
(d) If and to the extent that the obligations of any
Assignor under this Section 8.1 are unenforceable for any reason, such
Assignor hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law.
8.2 Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right
to reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of
the other Obligations and notwithstanding the full payment of all the Notes
issued, and Loans made, under the Credit Agreement, the termination of all
Letters of Credit issued under the Credit Agreement, the termination of all
Interest Rate Protection Agreements and Other Hedging Agreements entered into
with the Other Creditors and the payment of all other Obligations and
notwithstanding the discharge thereof and the occurrence of the Termination
Date.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein
specified. Such definitions shall be equally applicable to the singular and
plural forms of the terms defined.
"Account" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, and in any event shall include but shall not be limited to, all
rights to payment of any monetary obligation, whether or not earned by
performance, (i) for property that has been or is to be sold, leased,
licensed, assigned or otherwise disposed of, (ii) for services rendered or to
be rendered, (iii) for a policy of insurance issued or to be issued, (iv) for
a secondary obligation incurred or to be incurred, (v) for energy provided or
to be provided, (vi) for the use or hire of a vessel under a charter or other
contract, (vii) arising out of the use of a credit or charge card or
information contained on or for use with the card, or (viii) as winnings in a
lottery or other game of chance operated or sponsored by a State, governmental
unit of a State, or person licensed or authorized to operate the game by a
State or governmental unit of a State. Without limiting the foregoing, the
term "account" shall include all Health-Care-Insurance Receivables.
"Administrative Agent" shall have the meaning provided in
the recitals of this Agreement.
"Agreement" shall mean this Security Agreement as the same
may be amended, modified, restated and/or supplemented from time to time in
accordance with its terms.
"As-Extracted Collateral" shall mean "as-extracted
collateral" as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrower" shall have the meaning provided in the recitals
of this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing
cash collateral account maintained with, and in the sole dominion and control
of, the First-Lien Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall mean "chattel paper" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York. Without limiting the foregoing, the term "Chattel Paper"
shall in any event include all Tangible Chattel Paper and all Electronic
Chattel Paper.
"Class" shall have the meaning provided in Section 10.2 of
this Agreement.
"Collateral" shall have the meaning provided in Section
1.1(a) of this Agreement.
"Commercial Tort Claims" shall mean "commercial tort claims"
as such term is defined in the Uniform Commercial Code as in effect on the
date hereof in the State of New York.
"Contract Rights" shall mean all rights of any Assignor
under each Contract, including, without limitation, (i) any and all rights to
receive and demand payments under any or all Contracts, (ii) any and all
rights to receive and compel performance under any or all Contracts and (iii)
any and all other rights, interests and claims now existing or in the future
arising in connection with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor
and one or more additional parties (including, without limitation, any
Interest Rate Protection Agreements, Other Hedging Agreements, licensing
agreements and any partnership agreements, joint venture agreements and
limited liability company agreements).
"Copyrights" shall mean any United States or foreign
copyright now or hereafter owned by any Assignor, including any registrations
of any copyrights in the United States Copyright Office or any foreign
equivalent office, as well as any application for a copyright registration now
or hereafter made with the United States Copyright Office or any foreign
equivalent office by any Assignor.
"Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.
"Credit Document Obligations" shall have the meaning
provided in the definition of "Obligations" in this Article IX.
"Deposit Accounts" shall mean all "deposit accounts" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Documents" shall mean "documents" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Domain Names" shall mean all Internet domain names and
associated URL addresses in or to which any Assignor now or hereafter has any
right, title or interest.
"Electronic Chattel Paper" shall mean "electronic chattel
paper" as such term is defined in the Uniform Commercial Code as in effect on
the date hereof in the State of New York.
"Equipment" shall mean any "equipment" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, and in any event, shall include, but shall not be limited
to, all machinery, equipment, furnishings, fixtures and vehicles now or
hereafter owned by any Assignor and any and all additions, substitutions and
replacements of any of the foregoing and all accessions thereto, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under,
and as defined in, the Credit Agreement and shall in any event include,
without limitation, any payment default on any of the Obligations after the
expiration of any applicable grace period.
"First-Lien Collateral Agent" shall have the meaning
provided in the first paragraph of this Agreement.
"General Intangibles" shall mean "general intangibles" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Goods" shall mean "goods" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York.
"Health-Care-Insurance Receivable" shall mean any
"health-care-insurance receivable" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section
8.1(a) of this Agreement.
"Instrument" shall mean "instruments" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York.
"Inventory" shall mean merchandise, inventory and goods, and
all additions, substitutions and replacements thereof and all accessions
thereto, wherever located, together with all goods, supplies, incidentals,
packaging materials, labels, materials and any other items used or to be used
in manufacturing, processing, packaging or shipping same, in all stages of
production from raw materials through work in process to finished goods, and
all products and proceeds of whatever sort and wherever located any portion
thereof which may be returned, rejected, reclaimed or repossessed by the
First-Lien Collateral Agent from any Assignor's customers, and shall
specifically include all "inventory" as such term is defined in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Investment Property" shall mean "investment property" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"Lender Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Lenders" shall have the meaning provided in the recitals of
this Agreement.
"Letter-of-Credit Rights" shall mean "letter-of-credit
rights" as such term is defined in the Uniform Commercial Code as in effect on
the date hereof in the State of New York.
"Location" of any Assignor, shall mean such Assignor's
"location" as determined pursuant to Section 9-307 of the UCC.
"Marks" shall mean all right, title and interest in and to
any trademarks, service marks, trade names, trade dress, logos, fictitious
business names, and other business identifiers, including the goodwill of the
business of such Assignor associated with each of the foregoing, now held or
hereafter acquired by any Assignor, the right to ▇▇▇ for past or future
infringement thereof and including any registration or application for
registration or renewals thereof of any trademarks and service marks now held
or hereafter acquired by any Assignor, which are registered or filed in the
United States Patent and Trademark Office or the equivalent thereof in any
state of the United States or any equivalent foreign office or agency.
"Material Adverse Effect" shall mean a material adverse
effect on the business, property, assets, liabilities (actual or contingent),
operations or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
"Maximum Hedging Obligations Notional Amount" shall mean an
aggregate notional amount equal to $325 million.
"Obligations" shall mean and include, as to any Assignor,
all of the following:
(i) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation,
principal, premium, interest (including, without limitation, all
interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate
provided for in the respective documentation, whether or not a claim
for post-petition interest is allowed in any such proceeding),
reimbursement obligations under Letters of Credit, fees, costs and
indemnities) of such Assignor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in
connection with, the Credit Agreement and the other Credit Documents
to which such Assignor is a party (including, without limitation, in
the event such Assignor is a Guarantor, all such obligations,
liabilities and indebtedness of such Assignor under its Guaranty) and
the due performance and compliance by such Assignor with all of the
terms, conditions and agreements contained in the Credit Agreement
and in such other Credit Documents (all such obligations, liabilities
and indebtedness under this clause (i), except to the extent
consisting of obligations or indebtedness with respect to Interest
Rate Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations,
liabilities and indebtedness (including, without limitation, all
interest that accrues after the commencement of any case, proceeding
or other action relating to the bankruptcy, insolvency,
reorganization or similar proceeding of any Assignor at the rate
provided for in the respective documentation, whether or not a claim
for post-petition interest is allowed in any such proceeding) owing
by such Assignor to the Other Creditors, now existing or hereafter
incurred under, arising out of or in connection with any Interest
Rate Protection Agreement or Other Hedging Agreement, whether such
Interest Rate Protection Agreement or Other Hedging Agreement is now
in existence or hereinafter arising (including, without limitation,
in the case of a Assignor that is a Guarantor, all obligations,
liabilities and indebtedness of such Assignor under its Guaranty in
respect of the Interest Rate Protection Agreements and Other Hedging
Agreements), and the due performance and compliance by such Assignor
with all of the terms, conditions and agreements contained in each
such Interest Rate Protection Agreement and Other Hedging Agreement
(all such obligations, liabilities and indebtedness under this clause
(ii) being herein collectively called the "Other Obligations");
provided that if the aggregate notional amount of all then
outstanding Interest Rate Protection Agreements and Other Hedging
Agreements would exceed the Maximum Hedging Obligations Notional
Amount, then amounts owing with respect to such excess shall not
constitute Other Obligations hereunder; provided further that, if at
the time of the entering into of any Interest Rate Protection
Agreement or Other Hedging Agreement the respective Other Creditors
obtained an officer's certificate of the Borrower or a representation
by the Borrower that the aggregate notional amount thereof when added
to the aggregate notional amount of all other then outstanding
Interest Rate Protection Agreements and Other Hedging Agreements
which constitute Other Obligations hereunder, shall not or would not
exceed the Maximum Hedging Obligations Notional Amount, then such
Interest Rate Protection Agreement or Other Hedging Agreement, as the
case may be, (and all obligations thereunder as described above)
shall constitute Other Obligations for all purposes hereof
notwithstanding the fact that the Maximum Hedging Obligations
Notional Amount has actually been exceeded;
(iii) any and all sums advanced by the First-Lien Collateral
Agent in order to preserve the Collateral or preserve its security
interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such
Assignor referred to in clauses (i) and (ii) above, after an Event of
Default shall have occurred and be continuing, the reasonable
expenses of retaking, holding, preparing for sale or lease, selling
or otherwise disposing of or realizing on the Collateral, or of any
exercise by the First-Lien Collateral Agent of its rights hereunder,
together with reasonable attorneys' fees and court costs;
(v) all amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement; and
(vi) all amounts owing to any Agent pursuant to any of the
Credit Documents in its capacity as such;
it being acknowledged and agreed that the "Obligations" shall include
extensions of credit of the types described above, whether outstanding on the
date of this Agreement or extended from time to time after the date of this
Agreement.
"Other Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any patent in or to which any Assignor
now or hereafter has any right, title or interest therein, and any divisions,
continuations (including, but not limited to, continuations-in-parts) and
improvements thereof, including the right to ▇▇▇ for any past or future
infringement thereof, as well as any application for a patent now or hereafter
made by any Assignor.
"Permits" shall mean, to the extent permitted to be assigned
by the terms thereof or by applicable law, all licenses, permits, rights,
orders, variances, franchises or authorizations of or from any governmental
authority or agency.
"Primary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Proceeds" shall mean all "proceeds" as such term is defined
in the Uniform Commercial Code as in effect in the State of New York on the
date hereof and, in any event, shall also include, but not be limited to, (i)
any and all proceeds of any insurance, indemnity, warranty or guaranty payable
to the First-Lien Collateral Agent or any Assignor from time to time with
respect to any of the Collateral, (ii) any and all payments (in any form
whatsoever) made or due and payable to any Assignor from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental authority
(or any person acting under color of governmental authority) and (iii) any and
all other amounts from time to time paid or payable under or in connection
with any of the Collateral.
"Registered Organization" shall have the meaning provided in
the Uniform Commercial Code as in effect in the State of New York.
"Representative" shall have the meaning provided in Section
7.4(e) of this Agreement.
"Required Secured Creditors" shall mean (i) at any time when
any Credit Document Obligations are outstanding or any Commitments under the
Credit Agreement exist, the Required Lenders (or, to the extent provided in
Section 13.12 of the Credit Agreement, each of the Lenders) and (ii) at any
time after all of the Credit Document Obligations have been paid in full and
all Commitments under the Credit Agreement have been terminated and no further
Commitments may be provided thereunder, the holders of a majority of the Other
Obligations.
"Requisite Creditors" shall have the meaning provided in
Section 10.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in
Section 7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Secured Debt Agreements" shall mean and include this
Agreement, the other Credit Documents and the Interest Rate Protection
Agreements and Other Hedging Agreements entered into with an Other Creditor.
"Software" shall mean "software" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of
New York.
"Supporting Obligations" shall mean any "supporting
obligation" as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York, now or hereafter owned by
any Assignor, or in which any Assignor has any rights, and, in any event,
shall include, but shall not be limited to all of such Assignor's rights in
any Letter-of-Credit Right or secondary obligation that supports the payment
or performance of, and all security for, any Account, Chattel Paper, Document,
General Intangible, Instrument or Investment Property.
"Tangible Chattel Paper" shall mean "tangible chattel paper"
as such term is defined in the Uniform Commercial Code as in effect on the
date hereof in the State of New York.
"Termination Date" shall have the meaning provided in
Section 10.8(a) of this Agreement.
"Timber-to-be-Cut" shall mean "timber-to-be-cut" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York.
"Trade Secrets" shall mean any secretly held existing
engineering or other data, information, production procedures and other
know-how relating to the design manufacture, assembly, installation, use,
operation, marketing, sale and/or servicing of any products or business of an
Assignor worldwide whether written or not.
"Trade Secret Rights" shall mean the rights of an Assignor
in any Trade Secret it holds.
"Transmitting Utility" shall have the meaning given such
term in Section 9-102(a)(80) of the UCC.
"UCC" shall mean the Uniform Commercial Code as in effect
from time to time in the relevant jurisdiction.
ARTICLE X
MISCELLANEOUS
10.1 Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be sent or delivered by mail, telegraph, telex, telecopy,
cable or courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the First-Lien
Collateral Agent or any Assignor shall not be effective until received by the
First-Lien Collateral Agent or such Assignor, as the case may be. All notices
and other communications shall be in writing and addressed as follows:
(a) if to any Assignor, c/o:
c/o RCN Corporation
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▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the First-Lien Collateral Agent, at:
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Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Lender Creditor (other than the First-Lien
Collateral Agent), at such address as such Lender Creditor shall have
specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
First-Lien Collateral Agent;
or at such other address or addressed to such other individual as shall have
been furnished in writing by any Person described above to the party required
to give notice hereunder.
10.2 Waiver; Amendment. Except as provided in Sections 10.8
and 10.12, none of the terms and conditions of this Agreement may be changed,
waived, modified or varied in any manner whatsoever unless in writing duly
signed by each Assignor directly affected thereby (it being understood that
the addition or release of any Assignor hereunder shall not constitute a
change, waiver, discharge or termination affecting any Assignor other than the
Assignor so added or released) and the First-Lien Collateral Agent (with the
written consent of the Required Secured Creditors); provided, however, that
any change, waiver, modification or variance affecting the rights and benefits
of a single Class of Secured Creditors (and not all Secured Creditors in a
like or similar manner) also shall require the written consent of the
Requisite Creditors of such affected Class. For the purpose of this Agreement,
the term "Class" shall mean each class of Secured Creditors, i.e., whether (x)
the Lender Creditors as holders of the Credit Document Obligations or (y) the
Other Creditors as the holders of the Other Obligations. For the purpose of
this Agreement, the term "Requisite Creditors" of any Class shall mean each of
(x) with respect to the Credit Document Obligations, the Required Lenders (or,
to the extent provided in Section 13.12 of the Credit Agreement, each of the
Lenders), and (y) with respect to the Other Obligations, the holders of at
least a majority of all Other Obligations outstanding from time to time.
10.3 Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall
not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of such
Assignor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of this Agreement or any other
Secured Debt Agreement; or (c) any amendment to or modification of any Secured
Debt Agreement or any security for any of the Obligations; whether or not such
Assignor shall have notice or knowledge of any of the foregoing.
10.4 Successors and Assigns. This Agreement shall create a
continuing security interest in the Collateral and shall (i) remain in full
force and effect, subject to release and/or termination as set forth in
Section 10.8, (ii) be binding upon each Assignor, its successors and assigns;
provided, however, that no Assignor shall assign any of its rights or
obligations hereunder without the prior written consent of the First-Lien
Collateral Agent (with the prior written consent of the Required Secured
Creditors), and (iii) inure, together with the rights and remedies of the
First-Lien Collateral Agent hereunder, to the benefit of the First-Lien
Collateral Agent, the other Secured Creditors and their respective successors,
transferees and assigns. All agreements, statements, representations and
warranties made by each Assignor herein or in any certificate or other
instrument delivered by such Assignor or on its behalf under this Agreement
shall be considered to have been relied upon by the Secured Creditors and
shall survive the execution and delivery of this Agreement and the other
Secured Debt Agreements regardless of any investigation made by the Secured
Creditors or on their behalf.
10.5 Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF
THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH ASSIGNOR HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH
ASSIGNOR HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
JURISDICTION OVER SUCH ASSIGNOR, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS
JURISDICTION OVER SUCH ASSIGNOR. EACH ASSIGNOR FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH ASSIGNOR AT ITS ADDRESS FOR
NOTICES AS PROVIDED IN SECTION 10.1 ABOVE, SUCH SERVICE TO BECOME EFFECTIVE 30
DAYS AFTER SUCH MAILING. EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION
TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY
OTHER CREDIT DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE FIRST-LIEN
COLLATERAL AGENT UNDER THIS AGREEMENT, OR ANY SECURED CREDITOR, TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS
OR OTHERWISE PROCEED AGAINST ANY ASSIGNOR IN ANY OTHER JURISDICTION.
(b) EACH ASSIGNOR HEREBY IRREVOCABLY WAIVES ANY OBJECTION
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE
AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
10.7 Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the First-Lien Collateral Agent shall not have
any obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the First-Lien Collateral Agent be
required or obligated in any manner to perform or fulfill any of the
obligations of any Assignor under or with respect to any Collateral.
10.8 Termination; Release. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation in Section 8.1 hereof, shall survive such
termination) and the First-Lien Collateral Agent, at the request and expense
of the respective Assignor, will promptly execute and deliver to such Assignor
a proper instrument or instruments (including Uniform Commercial Code
termination statements on form UCC-3) acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to
such Assignor (without recourse and without any representation or warranty)
such of the Collateral as may be in the possession of the First-Lien
Collateral Agent and as has not theretofore been sold or otherwise applied or
released pursuant to this Agreement. As used in this Agreement, "Termination
Date" shall mean the date upon which the Total Commitment under the Credit
Agreement has been terminated and all Interest Rate Protection Agreements and
Other Hedging Agreements entered into with any Other Creditor have been
terminated, no Note under the Credit Agreement is outstanding and all Loans
thereunder have been repaid in full, all Letters of Credit issued under the
Credit Agreement have been terminated and all Obligations then due and payable
have been paid in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of (to a Person other than a Credit Party) (x) at any time
prior to the time at which all Credit Document Obligations have been paid in
full and all Commitments and Letters of Credit under the Credit Agreement have
been terminated, in connection with a sale or disposition permitted by Section
9.02 of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 13.12 of the
Credit Agreement) or (y) at any time thereafter, to the extent permitted by
the other Secured Debt Agreements, and in the case of clauses (x) and (y), the
proceeds of such sale or disposition (or from such release) are applied in
accordance with the terms of the Credit Agreement or such other Secured Debt
Agreement, as the case may be, to the extent required to be so applied, the
First-Lien Collateral Agent, at the request and expense of such Assignor, will
duly release from the security interest created hereby (and will execute and
deliver such documentation, including termination or partial release
statements and the like in connection therewith) and assign, transfer and
deliver to such Assignor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
otherwise disposed of, or released, and as may be in the possession of the
First-Lien Collateral Agent and has not theretofore been released pursuant to
this Agreement. Furthermore, upon the release of any Subsidiary Guarantor from
the Subsidiaries Guaranty in accordance with the provisions thereof, such
Assignor (and the Collateral at such time assigned by the respective Assignor
pursuant hereto) shall be released from this Agreement.
(c) At any time that an Assignor desires that the First-Lien
Collateral Agent take any action to acknowledge or give effect to any release
of Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor
shall deliver to the First-Lien Collateral Agent a certificate signed by a
principal executive officer of such Assignor stating that the release of the
respective Collateral is permitted pursuant to such Section 10.8(a) or (b). At
any time that the Borrower or the respective Assignor desires that a
Subsidiary of the Borrower which has been released from the Subsidiaries
Guaranty be released hereunder as provided in the last sentence of Section
10.8(b), it shall deliver to the First-Lien Collateral Agent a certificate
signed by a principal executive officer of the Borrower and the respective
Assignor stating that the release of the respective Assignor (and its
Collateral) is permitted pursuant to such Section 10.8(b). If reasonably
requested by the First-Lien Collateral Agent (although the First-Lien
Collateral Agent shall have not obligation to make such request), the relevant
Assignor shall furnish appropriate legal opinions (from counsel, reasonably
acceptable to the First-Lien Collateral Agent) to the effect set forth in this
Section 10.8(c).
(d) The First-Lien Collateral Agent shall have no liability
whatsoever to any other Secured Creditor as the result of any release of
Collateral by it in accordance with (or which the First-Lien Collateral Agent
in the absence of gross negligence and willful misconduct believes to be in
accordance with) this Section 10.8.
10.9 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the First-Lien Collateral Agent.
10.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
10.11 The First-Lien Collateral Agent and the other Secured
Creditors. The First-Lien Collateral Agent will hold in accordance with this
Agreement all items of the Collateral at any time received under this
Agreement. It is expressly understood and agreed that the obligations of the
First-Lien Collateral Agent as holder of the Collateral and interests therein
and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and in Section
12 of the Credit Agreement. The First-Lien Collateral Agent shall act
hereunder on the terms and conditions set forth herein and in Section 12 of
the Credit Agreement.
10.12 Additional Assignors. It is understood and agreed that
any Subsidiary Guarantor that desires to become an Assignor hereunder, or is
required to execute a counterpart of this Agreement after the date hereof
pursuant to the requirements of the Credit Agreement or any other Credit
Document, shall become an Assignor hereunder by executing a counterpart hereof
and delivering same to the First-Lien Collateral Agent, or by executing an
assumption agreement in form and substance satisfactory to the First-Lien
Collateral Agent, (y) delivering supplements to Annexes A through F,
inclusive, and H through K, inclusive, hereto as are necessary to cause such
Annexes to be complete and accurate with respect to such additional Assignor
on such date and (z) taking all actions as specified in this Agreement as
would have been taken by such Assignor had it been an original party to this
Agreement, in each case with all documents required above to be delivered to
the First-Lien Collateral Agent and with all documents and actions required
above to be taken to the reasonable satisfaction of the First-Lien Collateral
Agent.
10.13 Compliance with Laws. Each Assignor agrees to use
commercially reasonable efforts, including taking any action which the
First-Lien Collateral Agent and the Secured Creditors may reasonably request,
to assist in obtaining any required consent or approval of the Federal
Communications Commission (the "FCC") or any other governmental or other
authority for any sale or transfer of control of the Collateral contemplated
by the security documents pursuant to the exercise of the rights and remedies
of the First-Lien Collateral Agent and the Secured Creditors thereunder,
including, upon request, to prepare, sign and file with the FCC the assignor's
or transferor's and licensee's portions of any applications required under the
rules of the FCC for consent to the assignment or transfer of control of any
FCC construction permit, license or other authorization.
Each Assignor further consents, subject to obtaining any
necessary approvals, to the assignment or transfer of control of any FCC or
other governmental construction permit, license, or other authorization to
operate, to a receiver, trustee, or similar official or to any purchaser of
the Collateral pursuant to any public or private sale, judicial sale,
foreclosure, or exercise of other remedies available to First-Lien Collateral
Agent and the Secured Creditors as permitted by applicable law.
Notwithstanding anything herein which may be construed to the contrary, no
action shall be taken by any of the First-Lien Collateral Agent and the
Secured Creditors with respect to any license of the FCC unless and until any
applicable rules and regulations thereunder, requiring the consent to or
approval of such action by the FCC or any governmental or other authority,
have been satisfied.
[Remainder of this page intentionally left blank;
signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
Address: RCN CORPORATION, as an Assignor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: BRAINSTORM NETWORKS, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: HOT SPOTS PRODUCTIONS, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: ON TV, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN-BECOCOM, LLC, as a Guarantor
105 Carnegie Center By: RCN Telecom Services of Massachusetts, Inc.
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Tel: (▇▇▇) ▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Attention: Chief Financial Officer Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
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Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN CABLE TV OF CHICAGO, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN ENTERTAINMENT, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN FINANCE, LLC, as a Guarantor
105 Carnegie Center By: RCN Corporation, its managing member
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Tel: (▇▇▇) ▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Attention: Chief Financial Officer Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
Address: RCN FINANCIAL MANAGEMENT, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN INTERNATIONAL HOLDINGS, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN INTERNET SERVICES, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN TELECOM SERVICES, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN TELECOM SERVICES OF ILLINOIS, LLC, as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN TELECOM SERVICES OF MASSACHUSETTS, INC., as a
Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN TELECOM SERVICES OF PHILADELPHIA, INC., as a
Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN TELECOM SERVICES OF VIRGINIA, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RCN TELECOM SERVICES OF WASHINGTON D.C., INC., as a
Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: RFM 2, LLC, as a Guarantor
105 Carnegie Center By: RCN Corporation, its managing member
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Tel: (▇▇▇) ▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Attention: Chief Financial Officer Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
Address: RLH PROPERTY CORPORATION, as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: TEC AIR, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: 21ST CENTURY TELECOM SERVICES, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: UNET HOLDING, INC., as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ ----------------------------------
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attention: Chief Financial Officer Title: Executive Vice President
and Chief Financial Officer
Address: STARPOWER COMMUNICATIONS, LLC,
as a Guarantor
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▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ ---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Manager
Accepted and Agreed to:
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH,
as First-Lien Collateral Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
TABLE OF CONTENTS
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Page
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ARTICLE I SECURITY INTERESTS......................................................................................2
1.1 Grant of Security Interests..........................................................................2
1.2 Power of Attorney....................................................................................4
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS......................................................4
2.1 Necessary Filings....................................................................................5
2.2 No Liens.............................................................................................5
2.3 Other Financing Statements...........................................................................5
2.4 Chief Executive Office, Record Locations.............................................................5
2.5 Location of Inventory and Equipment..................................................................5
2.6 Legal Names; Type of Organization (and Whether a Registered Organization);
Jurisdiction of Organization; Location; Organizational Identification
Numbers; Changes Thereto; etc...................................................................6
2.7 Trade Names; Etc.....................................................................................6
2.8 Certain Significant Transactions.....................................................................6
2.9 Non-UCC Property.....................................................................................7
2.10 As-Extracted Collateral; Timber-to-be-Cut...........................................................7
2.11 Collateral in the Possession of a Bailee............................................................7
2.12 Recourse............................................................................................8
ARTICLE III SPECIAL PROVISIONS CONCERNING ACCOUNTS; CONTRACT RIGHTS; INSTRUMENTS;
CHATTEL PAPER AND CERTAIN OTHER COLLATERAL.....................................................................8
3.1 Additional Representations and Warranties............................................................8
3.2 Maintenance of Records...............................................................................8
3.3 Direction to Account Debtors; Contracting Parties; etc...............................................8
3.4 Modification of Terms; etc...........................................................................9
3.5 Collection...........................................................................................9
3.6 Instruments..........................................................................................9
3.7 Assignors Remain Liable Under Accounts..............................................................10
3.8 Assignors Remain Liable Under Contracts.............................................................10
3.9 Deposit Accounts; Etc...............................................................................10
3.10 Letter-of-Credit Rights............................................................................11
3.11 Commercial Tort Claims.............................................................................11
3.12 Chattel Paper......................................................................................12
3.13 Further Actions....................................................................................12
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS AND DOMAIN NAMES.............................................12
4.1 Additional Representations and Warranties...........................................................12
4.2 Licenses and Assignments............................................................................13
4.3 Infringements.......................................................................................13
4.4 Preservation of Marks and Domain Names..............................................................13
4.5 Maintenance of Registration.........................................................................13
4.6 Future Registered Marks and Domain Names............................................................13
4.7 Remedies............................................................................................14
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS....................................14
5.1 Additional Representations and Warranties...........................................................14
5.2 Licenses and Assignments............................................................................15
5.3 Infringements.......................................................................................15
5.4 Maintenance of Patents or Copyrights................................................................15
5.5 Prosecution of Patent Applications..................................................................15
5.6 Other Patents and Copyrights........................................................................15
5.7 Remedies............................................................................................15
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL..................................................................16
6.1 Protection of First-Lien Collateral Agent's Security................................................16
6.2 Warehouse Receipts Non-Negotiable...................................................................16
6.3 Additional Information..............................................................................16
6.4 Further Actions.....................................................................................16
6.5 Financing Statements................................................................................17
ARTICLE VII REMEDIES UPON OCCURRENCE OF AN EVENT OF DEFAULT......................................................17
7.1 Remedies; Obtaining the Collateral Upon Default.....................................................17
7.2 Remedies; Disposition of the Collateral.............................................................19
7.3 Waiver of Claims....................................................................................19
7.4 Application of Proceeds.............................................................................20
7.5 Remedies Cumulative.................................................................................23
7.6 Discontinuance of Proceedings.......................................................................23
ARTICLE VIII INDEMNITY...........................................................................................23
8.1 Indemnity...........................................................................................23
8.2 Indemnity Obligations Secured by Collateral; Survival...............................................24
ARTICLE IX DEFINITIONS...........................................................................................25
ARTICLE X MISCELLANEOUS..........................................................................................31
10.1 Notices............................................................................................31
10.2 Waiver; Amendment..................................................................................32
10.3 Obligations Absolute...............................................................................33
10.4 Successors and Assigns.............................................................................33
10.5 Headings Descriptive...............................................................................33
10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL.............................33
10.7 Assignor's Duties..................................................................................34
10.8 Termination; Release...............................................................................34
10.9 Counterparts.......................................................................................36
10.10 Severability......................................................................................36
10.11 The First-Lien Collateral Agent and the other Secured Creditors...................................36
10.12 Additional Assignors..............................................................................36
10.13 Compliance with Laws..............................................................................36
ANNEX A Schedule of Chief Executive Offices Address(es) of Chief Executive Office
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Legal Names, Type of Organization (and Whether a Registered Organization), Jurisdiction of
Organization, Location and Organizational Identification Numbers
ANNEX D Schedule of Trade and Fictitious Names
ANNEX E Description of Certain Significant Transactions Occurring Within One Year Prior to the Date of the Security
Agreement
ANNEX F Schedule of Deposit Accounts
ANNEX G Form of Control Agreement Regarding Deposit Accounts
ANNEX H Schedule of Commercial Tort Claims
ANNEX I Schedule of Marks and Applications; Internet Domain Name Registrations
ANNEX J Schedule of Patents
ANNEX K Schedule of Copyrights
ANNEX L Grant of Security Interest in United States Trademarks
ANNEX M Grant of Security Interest in United States Patents
ANNEX N Grant of Security Interest in United States Copyrights
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