Exhibit 99.4
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SECURITY AGREEMENT
among
RCN CORPORATION,
CERTAIN SUBSIDIARIES OF RCN CORPORATION
and
HSBC BANK USA, NATIONAL ASSOCIATION,
as SECOND-LIEN COLLATERAL AGENT
________________________________
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 HSBC Bank USA, National Association, as collateral
agent (together with any successor collateral agent, the "Second-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
Second-Lien Note Indenture (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") and HSBC Bank USA, National
Association, as trustee (the "Second-Lien Trustee"), have entered into an
Indenture, dated as of December 21, 2004 (as amended, modified, restated and/or
supplemented from time to time, the "Second-Lien Note Indenture"), providing for
the issuance of Notes ("Second-Lien Notes") by the Borrower, all as contemplated
therein (the holders of Second-Lien Notes from time to time (the "Noteholders"),
the Second-Lien Trustee and the Second-Lien Collateral Agent are herein called
the "Secured Creditors");
WHEREAS, pursuant to the Guarantee Agreement, each 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 issuance of Second-Lien
Notes by the Borrower under the Second-Lien Note Indenture that each Assignor
shall have executed and delivered to the Second-Lien Collateral Agent this
Agreement;
WHEREAS, the Borrower, various financial institutions from time to time
party thereto and DBCI, as administrative agent and collateral agent (in such
capacity, the "First-Lien Collateral Agent"), have entered into a credit
agreement, dated as of the date hereof (as amended, restated, modified,
extended, renewed, replaced, supplemented, restructured and/or refinanced from
time to time, the "First-Lien Credit Agreement");
WHEREAS, each Assignor will obtain benefits from the issuance of
Second-Lien Notes by the Borrower under the Second-Lien Note Indenture and,
accordingly, desires to execute this Agreement in order to satisfy the condition
described in the preceding paragraph; and
WHEREAS, each Assignor is concurrently granting to the First-Lien
Collateral Agent, for the benefit of the holders of obligations under the
First-Lien Credit Agreement, a first priority security interest in the
Collateral (it being understood that the relative rights and priorities of the
grantees in respect of the Collateral are governed by the Intercreditor
Agreement, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Intercreditor Agreement"), among the
Borrower, the First-Lien Collateral Agent, the Second-Lien Collateral Agent and
certain other persons party or that may become party thereto from time to time);
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
Second-Lien Collateral Agent for the benefit of the Secured Creditors and hereby
covenants and agrees with the Second-Lien Collateral Agent for the benefit of
the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1 Grant of Security Interests. (a) Subject to the terms of the
Intercreditor Agreement with respect to rights and remedies between the
First-Lien Collateral Agent and the Second-Lien Collateral Agent, 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 Second-Lien
Collateral Agent, and does hereby pledge and grant to the Second-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;
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(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
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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 Second-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 Second-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. Subject to the terms of the Intercreditor
Agreement, each Assignor hereby constitutes and appoints the Second-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
Second-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 Second-Lien Collateral Agent
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hereby in respect of the Collateral have been accomplished (or will be
accomplished within 5 days after the date of this Agreement or, with respect to
Marks, Patents and Copyrights, within 30 days of the date of this Agreement) and
the security interest granted to the Second-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 Second-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
Second-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.
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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
Second-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 necessary to maintain the
security interests of the Second-Lien Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect; provided that such actions shall not violate the lien priority or any
other provisions contained in the Intercreditor Agreement. 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 Second-Lien Collateral Agent of such organizational
identification number and shall take all actions reasonably necessary to
maintain the security interest of the Second-Lien Collateral Agent in the
Collateral intended to be granted hereby fully perfected and in full force and
effect; provided that such actions shall not violate the lien priority or any
other provisions contained in the Intercreditor Agreement.
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 Second-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 Second-Lien Collateral
Agent may reasonably request and (ii) with respect to such new name, it shall
have taken all action reasonably necessary to maintain the security interest of
the Second-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
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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 Second-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 Second-Lien
Collateral Agent or the Majority Noteholders, the Assignors shall provide the
Second-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 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 Majority Noteholders
or the Second-Lien Collateral Agent, within 60 days of such request (or such
longer period as the Majority Noteholders or the Second-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.
Notwithstanding the foregoing, the Second-Lien Collateral Agent shall
not request any information from any Assignor or require any Assignor to take
any action, in each case, pursuant to this Section 2.9 until such time as the
Discharge of First-Lien Obligations has occurred. The Second-Lien Collateral
Agent shall not have any obligation, nor any liability to any Person (including
the Noteholders), at any time for failing or omitting to request the list of the
fair market value of the property described in this Section 2.9.
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 Second-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 Second-Lien
Collateral Agent to perfect the security interest of the Second-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 (other than the
First-Lien Collateral Agent), such Assignor shall promptly notify the
Second-Lien Collateral Agent thereof and, if requested by the Second-Lien
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Collateral Agent, shall use its commercially reasonable efforts to promptly
obtain an acknowledgment from such bailee, in form and substance reasonably
satisfactory to the Second-Lien Collateral Agent, that the bailee holds such
Collateral for the benefit of the Second-Lien Collateral Agent and shall act
upon the instructions of the Second-Lien Collateral Agent, without the further
consent of such Assignor. The Second-Lien Collateral Agent agrees with such
Assignor that the Second-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
Second-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 Second-Lien Note Indenture. Upon the occurrence
and during the continuance of an Event of Default and at the request of the
Second-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 Second-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 Second-Lien Collateral Agent so directs, such Assignor shall
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legend, in form and manner satisfactory to the Second-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 Second-Lien Collateral Agent and that the Second-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 Second-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 Second-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 Second-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 Second-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 Second-Lien Collateral Agent, shall be borne by the relevant
Assignor. The Second-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 Second-Lien Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the
Second-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 7.1(g)
of the Second-Lien Note Indenture 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 Second-Lien
Collateral Agent. No Assignor will do anything to impair the rights of the
Second-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 Second-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
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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 Second-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 Second-Lien Collateral Agent
thereof, and after the Discharge of First-Lien Obligations will promptly deliver
such Instrument to the Second-Lien Collateral Agent appropriately endorsed to
the order of the Second-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 Second-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 Second-Lien Collateral Agent or any other
Secured Creditor of any payment relating to such Account pursuant hereto, nor
shall the Second-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 Second-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 Second-Lien Collateral Agent or any other Secured Creditor of any payment
relating to such Contract pursuant hereto, nor shall the Second-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
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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 Second-Lien Collateral Agent), the
respective Assignor shall cause the bank with which the Deposit Account is
maintained to execute and deliver to the Second-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 Second-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 Second-Lien Collateral
Agent's security interest therein on terms satisfactory to the Second-Lien
Collateral Agent, then the Second-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 Second-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 Second-Lien Collateral
Agent) (as such date may be extended by the Second-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 Second-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 Second-Lien Collateral Agent thereof
and, at the request of the Second-Lien Collateral Agent, such Assignor shall,
pursuant to an agreement in form and substance reasonably satisfactory to the
Second-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 Second-Lien Collateral Agent of the proceeds of any drawing
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under such letter of credit or (ii) arrange for the Second-Lien Collateral Agent
to become the transferee beneficiary of such letter of credit, with the
Second-Lien Collateral Agent agreeing, in each case, that the proceeds of any
drawing under the letter of credit are (subject to the terms of the
Intercreditor Agreement) 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 Second-Lien
Collateral Agent thereof in a writing signed by such Assignor and describing the
details thereof and shall grant to the Second-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 Second-Lien Collateral Agent.
3.12 Chattel Paper. Upon the request of the Second-Lien Collateral
Agent made at any time or from time to time, each Assignor shall promptly
furnish to the Second-Lien Collateral Agent a list of all Electronic Chattel
Paper held or owned by such Assignor. Furthermore, if requested by the
Second-Lien Collateral Agent, each Assignor shall promptly take all actions
which are reasonably practicable so that the Second-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 Second-Lien Collateral Agent, deliver all
of its Tangible Chattel Paper to the Second-Lien Collateral Agent.
3.13 Further Actions. Subject to the exceptions set forth in Article
II and Article III, each Assignor will, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Second-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, is necessary to
perfect and maintain the security interests granted hereby; provided that such
actions shall not violate the lien priority or any other provisions contained in
the Intercreditor Agreement.
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
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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 Second-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
Second-Lien Collateral Agent.
4.3 Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Second-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 Second-Lien Collateral Agent (other than with respect to
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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
Second-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 Second-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 Second-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 Second-Lien Collateral Agent.
4.7 Remedies. Subject to the terms of the Intercreditor Agreement,
if an Event of Default shall occur and be continuing, the Second-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 Second-Lien
Collateral Agent for the benefit of the Secured Creditors, in which event such
rights, title and interest shall immediately vest, in the Second-Lien Collateral
Agent for the benefit of the Secured Creditors, and the Second-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 Second-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 Second-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
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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 Second-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
Second-Lien Collateral Agent.
5.3 Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Second-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
Second-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 Second-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 Second-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
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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
Second-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
Second-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 Second-Lien Collateral
Agent.
5.7 Remedies. Subject to the terms of the Intercreditor Agreement,
if an Event of Default shall occur and be continuing, the Second-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 Second-Lien
Collateral Agent for the benefit of the Secured Creditors, in which event such
right, title, and interest shall immediately vest in the Second-Lien Collateral
Agent for the benefit of the Secured Creditors, in which case the Second-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 Second-Lien Collateral Agent may reasonably
request further to confirm this and to transfer ownership of the Patents and
Copyrights to the Second-Lien Collateral Agent for the benefit of the Secured
Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1 Protection of Second-Lien Collateral Agent's Security. Except as
otherwise permitted by the Secured Debt Agreements and the Intercreditor
Agreement, each Assignor will do nothing to impair the rights of the Second-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 Second-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).
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6.3 Additional Information. Each Assignor will, at its own expense,
from time to time upon the reasonable request of the Second-Lien Collateral
Agent, promptly (and in any event within 10 days after its receipt of the
respective request) furnish to the Second-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 Second-Lien Collateral
Agent, the value and location of such Collateral, etc.) as may be requested by
the Second-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 Second-Lien Collateral Agent such
updated Annexes hereto as may from time to time be reasonably requested by the
Second-Lien Collateral Agent.
6.4 Further Actions. Subject to the terms of the Intercreditor
Agreement and the exceptions set forth in Article II and Article III hereof,
each Assignor will, at its own expense, make, execute, endorse, acknowledge,
file and/or deliver to the Second-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 is reasonably appropriate or advisable to perfect, preserve or protect the
Second-Lien Collateral Agent's security interest in the Collateral.
6.5 Financing Statements. Subject to the exceptions set forth in
Article II and Article III, each Assignor agrees to execute and deliver to the
Second-Lien Collateral Agent such financing statements, in form reasonably
acceptable to the Second-Lien Collateral Agent, or as are reasonably necessary
to establish and maintain a valid, enforceable, second-priority perfected
security interest in the Collateral (subject to the first-priority lien of the
First-Lien Collateral Agent in and in accordance with the terms of the
Intercreditor Agreement) 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 Second-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, to the extent not inconsistent with the Intercreditor Agreement, if
any Event of Default shall have occurred and be continuing, then and in every
such case, the Second-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:
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(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
Second-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 Second-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 Second-Lien
Collateral Agent at any reasonable place or places designated by the
Second-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 Second-Lien Collateral Agent and there delivered
to the Second-Lien Collateral Agent;
(y) store and keep any Collateral so delivered to the
Second-Lien Collateral Agent at such place or places pending further
action by the Second-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
Second-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;
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(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 Second-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 any action taken by the Second-Lien Collateral Agent
under this Agreement and each other Security Document may be enforced only by
the action of the Second-Lien Collateral Agent acting upon the instructions of
the Majority Noteholders 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 Second-Lien Collateral
Agent 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 Second-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
Second-Lien Collateral Agent with respect to the Collateral.
7.2 Remedies; Disposition of the Collateral. Subject to the terms of
the Intercreditor Agreement, if any Event of Default shall have occurred and be
continuing, then any Collateral repossessed by the Second-Lien Collateral Agent
under or pursuant to Section 7.1 hereof and any other Collateral whether or not
so repossessed by the Second-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 Second-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 Second-Lien
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Second-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 Second-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 Second-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 Second-Lien Collateral Agent
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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 Second-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
Second-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
Second-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) Subject to the terms of the
Intercreditor Agreement, all moneys collected by the Second-Lien Collateral
Agent (or, to the extent the Second-Lien 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
Second-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 Second-Lien Collateral Agent hereunder, shall be applied as follows:
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(i) first, to the payment of all amounts owing the Second-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 all principal of,
premium, fees and interest on, all Second-Lien Notes and (z) "Secondary
Obligations" shall mean all Obligations other than Primary Obligations.
(c) When payments to Secured Creditors (other than the Second-Lien
Trustee or the Second-Lien Collateral Agent) 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
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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) Subject to the terms of the Intercreditor Agreement, all
payments required to be made hereunder shall be made to the Second-Lien
Collateral Agent for the benefit of the Secured Creditors.
(e) For purposes of applying payments received in accordance with
this Section 7.4, the Second-Lien Collateral Agent shall be entitled to rely
upon the Second-Lien Trustee for a determination (which the Second-Lien Trustee
agrees (or shall agree) to provide upon request of the Second-Lien Collateral
Agent) of the outstanding Primary Obligations and Secondary Obligations owed to
the Secured Creditors. Unless it has received written notice from a Secured
Creditor to the contrary, the Second-Lien Trustee, in furnishing information
pursuant to the preceding sentence, and the Second-Lien Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding.
(f) 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. Subject to the terms of (and to the extent
not inconsistent with) the Intercreditor Agreement, each and every right, power
and remedy hereby specifically given to the Second-Lien Collateral Agent shall
be in addition to every other right, power and remedy specifically given to the
Second-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 Majority Noteholders. 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 Second-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 Second-Lien
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Second-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 Second-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 Second-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 Second-Lien Collateral Agent, then
and in every such case the relevant Assignor, the Second-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
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security interest created under this Agreement, and all rights, remedies and
powers of the Second-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 Second-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 Second-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 Second-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 Second-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.
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(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 Second-Lien Note Indenture and the payment of all
other Obligations and notwithstanding the discharge thereof and the occurrence
of the Termination Date and the resignation or removal of the Second-Lien
Collateral Agent.
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.
"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.
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"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
Second-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.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent Action" shall have the meaning provided in Section
10.13(h) 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, 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 Party" shall mean the Borrower and each Guarantor.
"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.
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"Discharge of First-Lien Obligations" shall have the meaning provided
in the Intercreditor Agreement.
"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 Second-Lien Note Indenture 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
recitals to this Agreement.
"First-Lien Credit Agreement" shall have the meaning provided in the
recitals to 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.
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"Intercreditor Agreement" shall have the meaning provided in the
recitals to this Agreement.
"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 Second-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.
"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.
"Majority Noteholders" shall mean the holders of not less than a
majority in aggregate principal amount of the Second-Lien Notes at the time
outstanding (as determined in accordance with Section 9.4 of the Second-Lien
Note Indenture).
"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.
"Noteholders" shall have the meaning provided in the recitals of this
Agreement.
"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
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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), fees, costs and indemnities) of such Assignor to the
Secured Creditors, whether now existing or hereafter incurred under,
arising out of, or in connection with, the Second-Lien Note Indenture
and the other Second-Lien Note 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 the Guarantee Agreement) and the due performance and
compliance by such Assignor with all of the terms, conditions and
agreements contained in the Second-Lien Note Indenture and in such
other Second-Lien Note Documents (all such obligations, liabilities and
indebtedness under this clause (i), being herein collectively called
the "Second-Lien Note Document Obligations");
(ii) any and all sums advanced by the Second-Lien Collateral
Agent in order to preserve the Collateral or preserve its security
interest in the Collateral;
(iii) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of such
Assignor referred to in clause (i) 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
Second-Lien Collateral Agent of its rights hereunder, together with
reasonable attorneys' fees and court costs;
(iv) all amounts paid by any Indemnitee as to which such
Indemnitee has the right to reimbursement under Section 8.1 of this
Agreement; and
(v) all amounts owing to the Second-Lien Trustee, the
Second-Lien Collateral Agent and any other agent pursuant to any of the
Second-Lien Note 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.
"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 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.
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"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
Second-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.
"Second-Lien Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Second-Lien Notes" shall have the meaning provided in the recitals of
this Agreement.
"Second-Lien Note Documents" shall mean the "Transaction Documents" as
defined in the Second-Lien Note Indenture.
"Second-Lien Note Document Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article IX.
"Second-Lien Note Indenture" shall have the meaning provided in the
recitals of this Agreement.
"Second-Lien Pledge Agreement" means the Pledge Agreement, dated as of
the date hereof, among the Borrower, the Guarantors and the Second-Lien
Collateral Agent, as the same may be amended, supplemented, restated or
otherwise modified from time to time in accordance with the terms hereof and
thereof.
"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 and the
other Second-Lien Note Documents.
"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.
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"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 Second-Lien Collateral Agent or any
Assignor shall not be effective until received by the Second-Lien Collateral
Agent or such Assignor, as the case may be. All notices and other communications
shall be in writing and addressed as follows:
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(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 Second-Lien Collateral Agent, at:
HSBC Bank USA, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(c) if to any Secured Creditor (other than the Second-Lien
Collateral Agent), at such address as such Secured Creditor shall have specified
in the Second-Lien Note Indenture;
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, subject to the terms of the Intercreditor Agreement (including, without
limitation, Section 5.3 thereof), 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 Second-Lien Collateral
Agent (with the written consent of the Majority Noteholders).
10.3 Obligations Absolute. Subject to the terms of the Intercreditor
Agreement, 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 Second-Lien Collateral Agent (with the prior
written consent of the Majority Noteholders), and (iii) inure, together with the
rights and remedies of the Second-Lien Collateral Agent hereunder, to the
benefit of the Second-Lien Collateral Agent, the other Secured Creditors and
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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 SECOND-LIEN NOTE 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 SECOND-LIEN
NOTE 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
SECOND-LIEN NOTE DOCUMENT THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR
INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE SECOND-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
SECOND-LIEN NOTE DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
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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 SECOND-LIEN NOTE 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 Second-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 Second-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 Second-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 Second-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 no Second-Lien Note under the Second-Lien Note Indenture is
outstanding and all Loans thereunder have been repaid in full and all
Obligations then due and payable have been paid in full.
(b) Subject to the terms of the Intercreditor Agreement, 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
Second-Lien Note Obligations have been paid in full in connection with a sale or
disposition permitted by Section 5.15 of the Second-Lien Note Indenture or is
otherwise released at the direction of the Majority Noteholders (or all the
Noteholders if required by Section 11.2 of the Second-Lien Note Indenture) 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 Second-Lien Note Indenture or such other Secured Debt Agreement, as the case
may be, to the extent required to be so applied, the Second-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
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(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 Second-Lien Collateral Agent
and has not theretofore been released pursuant to this Agreement. Furthermore,
upon the release of any Guarantor from the Guarantee Agreement 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 Second-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 Second-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 Guarantee Agreement be released
hereunder as provided in the last sentence of Section 10.8(b), it shall deliver
to the Second-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 Second-Lien Collateral
Agent (although the Second-Lien Collateral Agent shall have no obligation to
make such request), the relevant Assignor shall furnish appropriate legal
opinions (from counsel, reasonably acceptable to the Second-Lien Collateral
Agent) to the effect set forth in this Section 10.8(c).
(d) The Second-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 Second-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
Second-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 Second-Lien Collateral Agent and the other Secured
Creditors. Subject to the terms of the Intercreditor Agreement, the Second-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 Second-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 Article IV of the Second-Lien Note Indenture. The
Second-Lien Collateral Agent shall act hereunder on the terms and conditions set
forth herein and in Article IV of the Second-Lien Note Indenture.
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10.12 Additional Assignors. It is understood and agreed that any
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 Second-Lien Note Indenture or any other Second-Lien Note
Document, shall become an Assignor hereunder by executing a counterpart hereof
and delivering same to the Second-Lien Collateral Agent, or by executing an
assumption agreement in form and substance satisfactory to the Second-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 Second-Lien Collateral
Agent and with all documents and actions required above to be taken to the
reasonable satisfaction of the Second-Lien Collateral Agent.
10.13 Second-Lien Collateral Agent. (a) Appointment. The Second-Lien
Trustee and each Noteholder, by accepting a Note, hereby irrevocably designates
and appoints HSBC Bank USA, National Association as the Second-Lien Collateral
Agent under this Agreement, the Guarantee Agreement and each other Security
Document, and the Second-Lien Trustee and each such Noteholder irrevocably
authorizes HSBC Bank USA, National Association as the Second-Lien Collateral
Agent to take such actions on its behalf under the provisions of this Agreement,
the Guarantee Agreement and each other Security Document to which the
Second-Lien Trustee and the Second-Lien Collateral Agent (as the case may be) is
a party and to exercise such powers and perform such duties as are expressly
delegated to the Second-Lien Trustee and the Second-Lien Collateral Agent (as
the case may be) by the terms of this Agreement, the Guarantee Agreement and
each other Security Document to which the Second-Lien Trustee and the
Second-Lien Collateral Agent (as the case may be) is a party, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in this Agreement, the Guarantee Agreement or in any
other Security Document, the Second-Lien Collateral Agent shall not have any
duties or responsibilities, except those expressly set forth herein, or any
fiduciary relationship with any Noteholder or any other Person, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Second-Lien Collateral Agent and the Second-Lien Trustee shall
be read into this Agreement or otherwise exist against the Second-Lien
Collateral Agent and the Second-Lien Trustee. The provisions of this Section
10.13 are solely for the benefit of the Second-Lien Collateral Agent, the
Second-Lien Trustee and the Noteholders, and the Assignors shall not have any
rights as a third party beneficiary or otherwise under any of the provisions
hereof. In performing their respective functions and duties hereunder and under
the other Security Documents to which the Second-Lien Collateral Agent is a
party, the Second-Lien Collateral Agent shall act solely as an agent of the
Second-Lien Trustee and the Noteholders and does not assume nor shall be deemed
to have assumed any obligation or relationship of trust or agency with or for
the Assignors or any of their successors and assigns.
(b) Delegation of Duties. The Second-Lien Collateral Agent may
execute any of its duties under this Agreement, the Guarantee Agreement or the
other Security Documents to which the Second-Lien Collateral Agent is a party by
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or through receivers, agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Second-Lien Collateral Agent shall not be responsible for the negligence or
misconduct of any receivers, agents or attorneys-in-fact selected by it with
reasonable care.
(c) Exculpatory Provisions. The Second-Lien Collateral Agent shall
not be (i) liable for any action lawfully taken or omitted to be taken by it or
any Person described in Section 11 of the Second-Lien Pledge Agreement under or
in connection with this Agreement, or any other Transaction Document or any
other document or instrument referred to or provided for herein or therein
(except for its or such Person's own gross negligence or willful misconduct if
such Person was not selected with reasonable care), or (ii) responsible in any
manner to any of the Noteholders, the Second-Lien Trustee or any other Person
for any recitals, statements, representations or warranties made by any Assignor
contained in this Agreement or any other Transaction Document or in any
certificate, report, statement or other document referred to or provided for in,
or received under or in connection with, this Agreement or any other Transaction
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, or any other Transaction Document or for any
failure of any Assignor to perform its obligations hereunder or thereunder. The
Second-Lien Collateral Agent shall not be required to initiate or conduct any
litigation or collection or other proceeding under this Agreement or any other
Transaction Document. The Second-Lien Collateral Agent shall not be under any
obligation to the Second-Lien Trustee or to any Noteholder to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Transaction Document, or to
inspect the properties, books or records of any Assignor. The Second-Lien
Collateral Agent shall have the right at any time to seek instructions from the
Noteholders with respect to the administration of this Agreement, the Guarantee
Agreement or the other Security Documents. Anything to the contrary
notwithstanding, in no event shall the Second-Lien Collateral Agent be liable to
any Person, under this Agreement or any other Transaction Document for special,
punitive, indirect, consequential or incidental loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Second-Lien
Collateral Agent has been advised of the likelihood of such loss or damage.
(d) Reliance by Second-Lien Collateral Agent. The Second-Lien
Collateral Agent shall be entitled to conclusively rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any Assignor or Noteholder), independent accountants and
other experts selected by the Second-Lien Collateral Agent with reasonable due
care. The Second-Lien Collateral Agent shall not be bound to make any
investigation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture or other paper or document, delivered to the Second-Lien
Collateral Agent hereunder or under the Transaction Documents. The Second-Lien
Collateral Agent may deem and treat the payee of any Note as the owner thereof
for all purposes unless the Second-Lien Collateral Agent shall have received an
executed transfer instrument in respect thereof. The Second-Lien Collateral
Agent shall have no liability for failing or refusing to take any action under
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this Agreement or any other Transaction Document unless it shall first receive
such advice, direction, instruction or concurrence of the Majority Noteholders
or the Noteholders as is required hereunder or it shall first be indemnified to
its satisfaction by the Noteholders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action; and the Second-Lien Collateral Agent has the right to seek instructions
from the Majority Noteholders before acting or electing not to act under this
Agreement or any other Transaction Document. The Second-Lien Collateral Agent
shall in all cases have no liability in acting, or in refraining from acting,
under this Agreement and the other Transaction Documents in accordance with a
direction or instruction of the Majority Noteholders, and such direction or
instruction and any action taken or failure to act pursuant thereto shall be
binding upon all of the Noteholders and all future holders of the Notes. This
Section does not govern the relationship of the Assignors and the Noteholders.
(e) Non-Reliance on Second-Lien Collateral Agent. Each Assignor and
Noteholder expressly acknowledges that the Second-Lien Collateral Agent, or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates
has not made any representations or warranties to it and that no act by the
Second-Lien Collateral Agent hereafter taken, including, without limitation, any
review of the affairs of any Assignor or Noteholder, shall be deemed to
constitute any representation or warranty by the Second-Lien Collateral Agent.
(f) Second-Lien Collateral Agent in its Individual Capacity. The
Second-Lien Collateral Agent and its Affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Assignors
and Noteholders as though the Second-Lien Collateral Agent were not the
collateral agent hereunder.
(g) Successor Second-Lien Collateral Agent. The Second-Lien
Collateral Agent may resign as collateral agent upon thirty (30) days notice to
the Borrower and the Noteholders and the Second-Lien Collateral Agent may be
removed from its position as collateral agent at any time by the Noteholders. If
the Second-Lien Collateral Agent shall resign as collateral agent under this
Agreement or be removed pursuant to the preceding sentence, then the Majority
Noteholders during such 30-day period shall appoint a successor collateral
agent, and upon the acceptance by such successor collateral agent, the successor
collateral agent shall succeed to the rights, powers and duties of the
Second-Lien Collateral Agent and the term "Second-Lien Collateral Agent" shall
mean such successor collateral agent, effective upon its appointment and
acceptance, and the former Second-Lien Collateral Agent's rights, powers and
duties as collateral agent shall then be terminated, without any other or
further act or deed on the part of such former Second-Lien Collateral Agent or
any of the parties to this Agreement or any Noteholders. After any retiring
Second-Lien Collateral Agent's resignation hereunder as collateral agent, the
provisions of this Section 10.13 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Second-Lien Collateral Agent
under this Agreement. If the Second-Lien Collateral Agent consolidates with,
merges with or converts into, or transfers all or substantially all of its
assets (including the administration of this Agreement and the other Transaction
Documents) to, another Person, the resulting, surviving or transferee Person,
without any further act, shall be the successor Second-Lien Collateral Agent.
(h) Actions by the Second-Lien Collateral Agent. In each case that
the Second-Lien Collateral Agent may or is required hereunder, the Guarantee
Agreement or any other Security Document to take any action (a "Collateral Agent
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Action"), including without limitation to make any determination or judgment, to
give consents, to exercise rights, powers or remedies, to release or sell
collateral or otherwise to act hereunder, under the Guarantee Agreement or under
any other Security Document, the Second-Lien Collateral Agent may seek direction
from the Majority Noteholders. The Second-Lien Collateral Agent shall not be
liable with respect to any Collateral Agent Action taken or omitted to be taken
by it in good faith in accordance with the direction from the Majority
Noteholders. If the Second-Lien Collateral Agent shall request direction from
the Majority Noteholders with respect to any Collateral Agent Action, the
Second-Lien Collateral Agent shall be entitled to refrain from such Collateral
Agent Action unless and until such Second-Lien Collateral Agent shall have
received direction from the Majority Noteholders and the Second-Lien Collateral
Agent shall not incur liability to any Person by reason of so refraining.
(i) Notwithstanding anything to the contrary in this Agreement
or any other Transaction Document, in no event shall the Second-Lien
Collateral Agent be responsible for, or have any duty or obligation
with respect to, the recording, filing, registering, perfection,
protection or maintenance of the security interests or Liens intended
to be created by this Agreement or the other Security Documents
(including without limitation any UCC financing or continuation
statements or similar documents or instruments), nor shall the
Second-Lien Collateral Agent be responsible for, and the Second-Lien
Collateral Agent makes no representation regarding, the validity,
effectiveness or priority of any of this Agreement, the Guarantee
Agreement or the Security Documents or the security interests or Liens
intended to be created hereby or thereby.
(ii) The Second-Lien Collateral Agent is hereby directed by the
Noteholders to execute this Agreement, the Guarantee Agreement and the
Security Documents as contemplated herein.
(iii) Whenever in the administration of this Agreement, the
Guarantee Agreement or any Security Document, the Second-Lien
Collateral Agent shall deem it necessary that a matter with respect to
the Assignors be provided or established prior to taking or suffering
or omitting to take any act hereunder or thereunder, such matter
(unless other evidence in respect thereof be herein or therein
specifically prescribed) may, in the absence of gross negligence, bad
faith or willful misconduct on the part of the Second-Lien Collateral
Agent be deemed to be conclusively proved and established by an
officers' certificate delivered by the applicable Assignor to the
Second-Lien Collateral Agent, and such certificate, in the absence of
gross negligence, bad faith or willful misconduct on the part of the
Second-Lien Collateral Agent, shall be full warrant to the Second-Lien
Collateral Agent for any action taken, suffered or omitted to be taken
by it under the provisions of this Agreement, the Guarantee Agreement
or any Security Document upon the faith thereof.
(iv) Any direction, request, notice, consent or other action
provided or permitted by this Agreement, the Guarantee Agreement or the
Security Documents to be given, made or taken by the Noteholders may be
embodied in or evidenced by one or more instruments of substantially
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similar tenor signed by the Noteholders in person or by and agent
thereof duly appointed in writing; and such action, except as otherwise
expressly provided herein, shall become effective when such instrument
or instruments are delivered to the Second-Lien Collateral Agent. The
fact and date of the execution of any such instrument or writing may be
proved in any manner that the Second-Lien Collateral Agent deems
sufficient. The holding of Notes shall be proved by the Note Register.
(v) Acceptance of Terms of Noteholders. Each Noteholder, by accepting a
Note, agrees to all the terms and provisions set forth herein and in
the Guarantee Agreement and the other Security Documents.
Notwithstanding anything to the contrary herein or in any other Secured Debt
Agreement, the Second-Lien Collateral Agent and Second-Lien Trustee shall have
no liability whatsoever to any Person party to any Secured Debt Agreement or to
any other Person (including, without limitation, the Noteholders) for failing
to perfect or failing to maintain perfection on any of the security interests
granted hereby (including without limitation, filing any financing statements
or continuation statements).
10.14 Compliance with Laws. Each Assignor agrees to use commercially
reasonable efforts, including taking any action which the Second-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 Second-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 Second-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
Second-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.
10.15 Conflicts; Intercreditor Agreement. Notwithstanding anything
herein to the contrary, the lien and security interest granted to the
Second-Lien Collateral Agent pursuant to this Agreement and the exercise of any
right or remedy by the Second-Lien Collateral Agent hereunder are subject to the
provisions of the Intercreditor Agreement. In the event of any conflict between
the terms of the Intercreditor Agreement and this Agreement, the terms of the
Intercreditor Agreement shall govern and control.
-39-
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-40-
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
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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:
HSBC BANK USA, NATIONAL ASSOCIATION,
as Second-Lien Collateral Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
TABLE OF CONTENTS
-----------------
Page
----
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. .... 9
3.4 Modification of Terms; etc. ................................ 9
3.5 Collection ................................................. 9
3.6 Instruments ................................................ 10
3.7 Assignor Remains Liable Under Accounts ..................... 10
3.8 Assignor Remains Liable Under Contracts .................... 10
3.9 Deposit Accounts; Etc. ..................................... 10
3.10 Letter-of-Credit Rights .................................... 11
3.11 Commercial Tort Claims ..................................... 12
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
(i)
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 ................... 14
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 ................................................... 16
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL ............................ 16
6.1 Protection of Second-Lien Collateral Agent's Security ...... 16
6.2 Warehouse Receipts Non-Negotiable .......................... 16
6.3 Additional Information ..................................... 17
6.4 Further Actions ............................................ 17
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 ........................................... 20
7.4 Application of Proceeds .................................... 20
7.5 Remedies Cumulative ........................................ 22
7.6 Discontinuance of Proceedings .............................. 22
ARTICLE VIII INDEMNITY ..................................................... 23
8.1 Indemnity .................................................. 23
8.2 Indemnity Obligations Secured by Collateral; Survival ...... 24
ARTICLE IX DEFINITIONS ..................................................... 24
ARTICLE X MISCELLANEOUS .................................................... 30
10.1 Notices .................................................... 30
10.2 Waiver; Amendment .......................................... 31
10.3 Obligations Absolute ....................................... 31
10.4 Successors and Assigns ..................................... 31
10.5 Headings Descriptive ....................................... 32
(ii)
10.6 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL ..................................... 32
10.7 Assignor's Duties .......................................... 33
10.8 Termination; Release ....................................... 33
10.9 Counterparts ............................................... 34
10.10 Severability ............................................... 34
10.11 The Second-Lien Collateral Agent and the other
Secured Creditors ........................................ 34
10.12 Additional Assignors ....................................... 35
10.13 Second-Lien Collateral Agent ............................... 35
10.14 Compliance with Laws ....................................... 39
10.15 Conflicts; Intercreditor Agreement ......................... 39
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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(iii)