EXHIBIT 10.6
BRIDGE SECURITY AGREEMENT
THIS BRIDGE SECURITY AGREEMENT (as amended, amended and
restated, supplemented or otherwise modified from time to time, this "BRIDGE
SECURITY AGREEMENT"), dated as of September 13, 2002, is made by CHOICE ONE
COMMUNICATIONS INC., a Delaware corporation (the "COMPANY"), and certain
Subsidiaries thereof listed on the signature pages hereto (the "SUBSIDIARY
GRANTORS", and together with the Company and each additional Grantor who
executes this Bridge Security Agreement or a Joinder Agreement pursuant to
Section 9.12 of the Senior Credit Agreement referred to below, the "GRANTORS,"
each individually, a "GRANTOR"), in favor of (as defined below) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
SENIOR FUNDING, INC. as bridge collateral agent (the "BRIDGE COLLATERAL AGENT")
for the benefit of itself and the financial institutions (the "BRIDGE LENDERS")
as are, or may from time to time become, parties to the Bridge Agreement (as
defined below) subject to the terms of the Intercreditor Agreement.
STATEMENT OF PURPOSE
Pursuant to the Bridge Financing Agreement, dated as of August
1, 2000, as previously amended and amended and restated as of the date hereof,
as may be further amended, amended and restated, supplemented or otherwise
modified from time to time (the "BRIDGE AGREEMENT"), among the Company, ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Senior Funding, Inc., as administrative agent, and the Bridge Lenders,
the Bridge Lenders made certain rollover loans to the Company (the "ROLLOVER
LOANS").
Pursuant to the Third Amended and Restated Credit Agreement of
even date herewith (as further amended, restated, supplemented or otherwise
modified from time to time, the "SENIOR CREDIT AGREEMENT"), by and among the
Company, as Guarantor, its Subsidiaries party thereto, as Borrowers, the lenders
party thereto (the "SENIOR LENDERS"), Wachovia Investors, Inc. (formerly known
as First Union Investors, Inc.) as administrative agent (the "SENIOR
ADMINISTRATIVE AGENT") and the other Agents party thereto, the Senior Lenders
agreed to extend two additional term loan facilities (the "EXTENSIONS OF
CREDIT") and certain other amendments as provided in the Senior Credit
Agreement.
Pursuant to the Third Amended and Restated Security Agreement
dated as of the date hereof (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "SENIOR SECURITY AGREEMENT"), the
grantors party thereto granted a security interest in the collateral referred to
therein in order to secure the obligations under the Senior Credit Agreement.
It is a condition precedent to the obligation of the Senior
Lenders to make the Extensions of Credit to the Grantors and to the Bridge
Lenders amending the Bridge Agreement to allow for the Extensions of Credit that
the Grantors shall have executed and delivered the subordinated upstream
guarantee of the Bridge Agreement, dated as of the date hereof (the
"SUBORDINATED GUARANTEE"), to the Bridge Lenders.
Pursuant to the Subordinated Guarantee, each Grantor has
guaranteed the prompt payment and performance when due of all obligations of the
Company under the Bridge Agreement and granted a subordinated security interest
in the Collateral (as defined herein). The Subordinated Guarantee shall be
secured by, among other things, this Bridge Security Agreement.
The Grantors, the Bridge Lenders, Senior Lenders, the Senior
Administrative Agent and the Bridge Collateral Agent have entered into an
Intercreditor Agreement, dated as of the date hereof (as amended, amended and
restated, supplemented or otherwise modified from time to time, the
"INTERCREDITOR AGREEMENT").
NOW, THEREFORE, in consideration of these premises and the
mutual agreements set forth herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged and to induce the
Bridge Collateral Agent and the Bridge Lenders to give the consents and waivers
necessary to amend the Bridge Agreement, the Grantors hereby agree with the
Bridge Collateral Agent, for the ratable benefit of itself and the Bridge
Lenders, as follows:
SECTION 1. DEFINITIONS. Unless otherwise defined herein, capitalized
terms used herein have the meanings assigned thereto in the Bridge Agreement,
and the following terms shall have the following meanings:
"ACCOUNT DEBTOR" means "account debtor" (as defined in the UCC)
including any Person who is or may become obligated to any Grantor under, with
respect to, or on account of, an Account.
"ACCOUNTS" means all "accounts" (as defined in the UCC) now owned or
hereafter acquired by any Grantor or in which any Grantor now has or hereafter
acquires any right or interest, including, without limitation, (a) all accounts
receivable, contract rights, book debts, notes, drafts and other obligations or
indebtedness owing to any Grantor and arising from the sale, lease, consignment
or exchange of goods or other property, or from the performance of services by
such Grantor, (b) all of each Grantor's rights to any goods or other property
services or represented by any of the foregoing (including returned or
repossessed goods and unpaid sellers' rights of rescission, replevin,
reclamation and rights to stoppage in transit) and (c) all monies due or to
become due to any Grantor under all contracts for the sale, lease, consignment
or exchange of goods or other property or for the performance of services by
such Grantor (whether or not yet earned), in each case whether now in existence
or hereafter arising or acquired, including, without limitation, the right to
receive the proceeds of such contracts and all collateral security and
guarantees of any kind given by any Person with respect to any of the foregoing.
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"ACCOUNTS AGING REPORT" means a detailed aged trial balance of all
Accounts existing as of a specified date, specifying the names, addresses, face
value and dates of invoices of each Account Debtor obligated on any Accounts so
listed, and otherwise in form and substance satisfactory to the Bridge
Collateral Agent and Required Lenders.
"BRIDGE COLLATERAL AGENT" shall have the meaning assigned to such term
in the recitals hereto.
"BRIDGE PLEDGE AGREEMENT" means the Bridge Pledge Agreement, dated as
of the date hereof, granted by the pledgors named therein in favor of the Bridge
Collateral Agent for the ratable benefit of itself and the Bridge Lenders as
amended, amended and restated, supplemented or otherwise modified from time to
time.
"COLLATERAL" shall have the meaning given thereto in Section 2(a)
hereof.
"COLLATERAL ACCOUNT" means a cash collateral account established by the
Grantors with the Senior Administrative Agent, in the name and under the
exclusive dominion and control of the Senior Administrative Agent, pursuant to
Section 6 hereof.
"COPYRIGHT LICENSE" means any written agreement now or hereafter in
existence granting to any Grantor any right to use any Copyright.
"COPYRIGHTS" means, collectively, all of the following now owned or
hereafter created or acquired by any Grantor: (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright registrations
and copyright applications, including, without limitation, any thereof referred
to on SCHEDULE I hereto; (b) all renewals of any of the foregoing; (c) all
income, royalties, damages and payments now or hereafter due and/or payable
under any of the foregoing or with respect to any of the foregoing, including,
without limitation, damages or payments for past or future infringements of any
of the foregoing; (d) the right to ▇▇▇ for past, present and future
infringements of any of the foregoing; and (e) all rights corresponding to any
of the foregoing throughout the world.
"DOCUMENTS" means all "documents" (as defined in the UCC) or other
receipts of any Grantor covering, evidencing or representing goods or services,
now owned or hereafter acquired by any Grantor or in which any Grantor now has
or hereafter acquires any right or interest.
"EQUIPMENT" means all "equipment" (as defined in the UCC) of any
Grantor, wherever located, and all Telecommunications Equipment, machinery,
goods and other equipment of any Grantor used or bought for use primarily in the
business of such Grantor, including all accessions, additions, attachments,
improvements, substitutions and replacements thereto and therefor, in all such
cases whether now owned or hereafter acquired by any Grantor or in which any
Grantor now has or hereafter acquires any right or interest.
"FINANCING STATEMENTS" shall mean the UCC Form UCC-1 Financing
Statements executed by the Grantors with respect to the Collateral and filed (or
to be filed) in the jurisdictions set forth in the Perfection Certificate.
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"FIXTURES" shall mean all "fixtures" (as defined in the UCC) of any
Grantor, whether now owned or hereafter acquired by any Grantor or in which any
Grantor now has or hereafter acquires any right or interest.
"GENERAL INTANGIBLES" means all "general intangibles" (as defined in
the UCC) now owned or hereafter acquired by any Grantor or in which any Grantor
now has or hereafter acquires any right or interest, including, without
limitation, all payment intangibles, all rights to indemnification, and all
rights, title and interest which any Grantor now has or hereafter acquires in or
under the Lucent Agreement, switch installation and testing contracts, lease
agreements for fiber capacity, rights of way, each Material Contract and all
other contracts (other than contracts described in the definition of Accounts),
permits, licenses, franchises, causes of action, tax refund claims, customer
lists, Intellectual Property, license royalties, goodwill, trade secrets, data
bases, business records, and all other intangible property of every kind and
nature; provided that for the purpose of Section 2 hereof, the grant,
assignment, transfer, mortgage, hypothecation and pledge of General Intangibles
(which includes, as noted herein, Intellectual Property) set forth therein shall
not include any intent to use application or registration of trademark until to
the filing of a verified statement of use in connection therewith.
"INSTRUMENTS" means all "instruments", "chattel paper" or
"letter-of-credit rights" (each as defined in the UCC) of any Grantor,
including, without limitation, instruments, chattel paper and letters of credit
evidencing, representing, arising from or existing in respect of, relating to,
securing or otherwise supporting the payment of any of the Accounts, including,
without limitation, promissory notes, drafts, bills of exchange and trade
acceptances, now owned or hereafter acquired by any Grantor or in which any
Grantor now has or hereafter acquires any right or interest.
"INTELLECTUAL PROPERTY" means, collectively, all of the following of
any Grantor: (a) all systems software and applications software, including,
without limitation, screen displays and formats, program structures, sequence
and organization, all documentation for such software, including, without
limitation, user manuals, flowcharts, programmer's notes, functional
specifications, operations manuals, formulas, processes, ideas and know-how
embodied in any of the foregoing, and all program materials, flowcharts, notes
and outlines created in connection with any of the foregoing, whether or not
patentable or copyrightable, (b) concepts, discoveries, improvements and ideas,
(c) any useful information relating to the items described in clause (a) or (b),
including know-how, technology, engineering drawings, reports, design
information, trade secrets, practices, laboratory notebooks, specifications,
test procedures, maintenance manuals, research, development, manufacturing,
marketing, merchandising, selling, purchasing and accounting, (d) Patents,
Patent rights, Patent applications, Copyrights, Copyright applications,
Trademarks, Trademark rights, trade names, trade name rights, service marks,
service ▇▇▇▇ rights, applications for registration of Trademarks, trade names
and service marks, and Trademark, trade name and service ▇▇▇▇ registrations and
Patent Licenses, Trademark Licenses, Copyright Licenses, (e) other licenses to
use any of the items described in the foregoing clauses (a), (b), (c) and (d) or
any other similar items of any Grantor necessary for the conduct of its business
and (f) all goodwill associated with the items described in the foregoing
clauses (a), (b), (c), (d) and (e); provided that for the purpose of Section
4(d)(iii) hereof, the assignment, transfer and conveyance of the Intellectual
Property set forth therein shall not include any intent to use application or
registration of trademark until to the filing of a verified statement of use in
connection therewith.
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"INVENTORY" means all "inventory" (as defined in the UCC) now owned or
hereafter acquired by any Grantor or in which any Grantor now has or hereafter
acquires any right or interest, wherever located, including, without limitation,
all raw materials, inventory and other materials and supplies, work in process,
finished goods, all accessions thereto, documents therefor and any products made
or processed therefrom, all software related thereto (including, without
limitation, software that is embedded in and is part of the inventory), and all
substances commingled therewith or added thereto (including, without limitation,
any of the foregoing in which any Grantor has an interest as a consignor).
"INVESTMENT PROPERTY" means "investment property" (as defined in the
UCC) including all "securities" (whether certificated or uncertificated),
"security entitlements", "securities accounts", "commodity contracts" and
"commodity accounts" (in each case as defined in the UCC) of any Grantor,
whether now owned or hereafter acquired.
"PATENT LICENSE" means any written agreement now or hereafter in
existence granting to any Grantor any right to use any invention on which a
Patent is in existence.
"PATENTS" means, collectively, all of the following now owned or
hereafter created or acquired by any Grantor: (a) all patents and patent
applications including all patentable inventions, including, without limitation,
any thereof referred to on SCHEDULE II hereto; (b) all reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any of the
foregoing; (c) all income, royalties, damages or payments now or hereafter due
and/or payable under any of the foregoing or with respect to any of the
foregoing, including, without limitation, damages or payments for past or future
infringements of any of the foregoing; (d) the right to ▇▇▇ for past, present
and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
"PERFECTION CERTIFICATE" means a certificate dated as of even date
herewith, setting forth the corporate or other names, chief executive office or
principal place of business in each state and other current locations of each
Grantor and such other information as the Bridge Collateral Agent deems
pertinent to the perfection of security interests, completed and supplemented
with the schedules and attachments contemplated thereby to the satisfaction of
the Bridge Collateral Agent, and duly certified by the chief executive, chief
financial officer or Treasurer of each Grantor so authorized to act.
"PERMITTED LIENS" means all Liens respecting the Collateral permitted
pursuant to Section 6.02 of the Bridge Agreement.
"PROCEEDS" means all "proceeds" (as defined in the UCC) and all other
profits, rentals or receipts, in whatever form, arising from the collection,
sale, lease, exchange, assignment, licensing or other disposition of, or
realization upon, Collateral, including, without limitation, all claims of any
Grantor against third parties for loss of, damage to or destruction of, or for
proceeds payable under, or unearned premiums with respect to, policies of
insurance in respect of, any Collateral, and any condemnation or requisition
payments with respect to any Collateral and all Collateral acquired with the
cash proceeds of any other Collateral.
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"RELEVANT COLLATERAL AGENT" means, at such time as the Intercreditor
Agreement is in effect , the Senior Administrative Agent, acting as collateral
agent on behalf of the Bridge Collateral Agent and the Bridge Lenders, and at
any other time, the Bridge Collateral Agent.
"SECURED OBLIGATIONS" means, with respect to each Grantor, the
collective reference to the unpaid principal of and interest on the Rollover
Loans and all other obligations and liabilities of the Company to the Bridge
Lenders that may arise under, out of, or in connection with, the Bridge
Agreement, the other Loan Documents or any other documents made, delivered or
given in connection therewith, (including, without limitation, interest accruing
at the then applicable rate provided in the Bridge Agreement after the maturity
of the Rollover Loans and interest accruing at the then applicable rate provided
in the Bridge Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Company, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, now existing or hereafter incurred, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses or otherwise (including, without limitation, all fees and disbursements
of counsel to the Bridge Lenders that are required to be paid by the Company or
any Grantor pursuant to the terms of the Bridge Agreement or any other Loan
Document).
"SECURITY INTERESTS" means the security interests granted pursuant to
Section 2 hereof, as well as all other security interests created or assigned as
additional security for the Secured Obligations pursuant to the provisions of
this Bridge Security Agreement.
"SENIOR ADMINISTRATIVE AGENT" means Wachovia Investors, Inc.
"TRADEMARK LICENSE" means any written agreement now or hereafter in
existence granting to a Grantor any right to use any Trademark.
"TRADEMARKS" means, collectively, all of the following now owned or
hereafter acquired by any Grantor: (a) all Trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade styles,
service marks, logos, other business identifiers, prints and labels on which any
of the foregoing have appeared or appear, all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state thereof or any
other country or any political subdivision thereof, all of such registrations,
recordings and applications in the United States Patent and Trademark office are
listed on SCHEDULE III hereto; (b) all reissues, extensions and renewals of any
of the foregoing; (c) all income, royalties, damages and payments now or
hereafter due and/or payable under or with respect to any of the foregoing,
including, without limitation, damages or payments for past or future
infringements of any of the foregoing; (d) the right to ▇▇▇ for past, present
and future infringements of any of the foregoing; and (e) all rights
corresponding to any of the foregoing throughout the world.
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"UCC" means the Uniform Commercial Code as in effect, from time to
time, in the State of New York; PROVIDED that if by reason of mandatory
provisions of law, the perfection or the effect of perfection or non-perfection
or priority of the Security Interests in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than New York "UCC"
means the Uniform Commercial Code as in effect, from time to time, in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection or priority.
To the extent any amendment, revision or other modification of the UCC
after the date hereof results in the renumbering of specific sections, revision
of the order of specific sections or other changes in the organization of the
UCC in effect as of the date hereof, all references herein to specific sections
of the UCC in effect as of the date hereof shall be deemed to refer to such new
section or sections which correspond to such original sections.
"VEHICLES" means all cars, trucks, trailers, construction and earth
moving equipment of any Grantor and other vehicles covered by a certificate of
title law of any state, and all tires and other appurtenances to any of the
foregoing.
SECTION 2. THE SECURITY INTERESTS. (a) In order to secure the payment and
performance of the Secured Obligations, the Grantors hereby grant to the Bridge
Collateral Agent, for the ratable benefit of itself and the Bridge Lenders, a
continuing security interest in and to all of the Grantors' estate, right, title
and interest in and to all of the following property, whether now owned or
hereafter acquired by the Grantors or in which the Grantors now have or
hereafter acquire any estate, right, title or interest, and wherever located
(collectively, along with any other property of any Grantor which may from time
to time secure the Secured Obligations, the "Collateral"):
(i) Accounts;
(ii) Inventory;
(iii) Documents;
(iv) Equipment;
(v) Fixtures;
(vi) Instruments;
(vii) General Intangibles;
(viii) Investment Property;
(ix) Vehicles;
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(x) The Collateral Account, all cash deposited therein from time to time,
the investments made pursuant to Section 6 and other monies and
property of any kind (including any deposit accounts) of any Grantor in
the possession or under the control of the Relevant Collateral Agent or
any Bridge Lender;
(xi) All Communications Licenses and all goodwill and going concern value
relating thereto; PROVIDED, however, that such security interest does
not include at any time any Communications License to the extent, but
only to the extent, that any Grantor is prohibited at that time from
granting a security interest therein pursuant to Communications Law
and all other Applicable Law, but includes, to the maximum extent
permitted by Applicable Law, all rights incident or appurtenant to any
such Communications License and the rights to receive all proceeds
derived from or in connection with the sale, assignment or transfer of
any Communications License; and provided further, to the extent that
any Grantor is so prohibited from granting a security interest in any
Communications License, each Grantor agrees that a security interest
shall automatically attach to any such Communications License, all
rights incident or appurtenant thereto, and the rights to receive
proceeds derived from or in connection with the sale, assignment or
transfer of any Communications License, at such time that such a
security interest is permitted by Applicable Law;
(xii) All books and records (including, without limitation, customer lists,
credit files, computer programs, printouts and other computer materials
and records) of any Grantor pertaining to any of the Collateral;
(xiii) All other goods and personal property of each Grantor, whether tangible
or intangible; and
(xiv) All products and Proceeds of all or any of the Collateral described in
clauses (i) through (xiii) hereof.
(b) The Security Interests are granted as security only and shall not subject
the Bridge Collateral Agent or any Bridge Lender to, or transfer to the Bridge
Collateral Agent or any Bridge Lender, or in any way affect or modify, any
obligation or liability of any Grantor with respect to any of the Collateral or
any transaction in connection therewith.
SECTION 3. REPRESENTATIONS AND WARRANTIES. To induce the Bridge Collateral Agent
and the Bridge Lenders to give the necessary consents and waivers to amend the
Bridge Agreement and accept the security contemplated hereby, each Grantor
represents and warrants as follows:
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(a) Such Grantor's exact legal name, as defined in Section 9-503(a) of the UCC,
is correctly set forth in SCHEDULE IV hereto. Such Grantor has only the trade
names, domain names and marks listed on SCHEDULE VI hereto. Such Grantor is
located (within the meaning of Section 9-307 of the UCC) and has its chief
executive office and the office in which it maintains all originals of all
chattel paper that evidence receivables of such Grantor in the state or
jurisdiction set forth in SCHEDULE IV hereto. The information set forth in
SCHEDULE IV hereto with respect to such Grantor is true and accurate in all
respects. Such Grantor has not previously changed its name, location, chief
executive office, place where it maintains its chattel paper, type of
organization, jurisdiction of organization or organizational identification
number from those set forth in SCHEDULE IV except as disclosed in SCHEDULE V
hereto.
(b) Each Grantor has the corporate power, authority and legal right to execute
and deliver, to perform its obligations under, and to grant the Security
Interests in the Collateral pursuant to this Bridge Security Agreement and has
taken all necessary corporate action to authorize the execution, delivery,
performance and grant of the Security Interests on the Collateral pursuant to
this Bridge Security Agreement.
(c) This Bridge Security Agreement constitutes a legal, valid and binding
obligation of each Grantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by the availability of equitable remedies.
(d) Each Grantor is the sole owner of, and has good and marketable title to, or
a valid leasehold interest in, all of its respective Collateral, free and clear
of any Liens other than the Liens permitted under the Bridge Agreement.
(e) No Grantor has performed or failed to perform any acts that would prevent or
hinder the Bridge Collateral Agent from enforcing any of the terms of this
Bridge Security Agreement. No financing statement, mortgage, security agreement
or similar or equivalent document or instrument covering all or any part of the
Collateral is on file or of record in any jurisdiction, except with respect to
Permitted Liens. No Collateral of any Grantor is in the possession of any Person
(other than the Grantors) asserting any claim thereto or security interest
therein, except that the Bridge Collateral Agent or its designee may have
possession of Collateral as contemplated hereby and a bailee or consignee may
have possession of the Collateral as contemplated by, and so long as the
Grantors have complied with, Section 4(a)(iii) and Section 4(a)(iv) hereof.
(f) All of the information set forth in the Perfection Certificate is true and
correct as of the date hereof after giving effect to the transactions
contemplated by the Senior Facility Documents to be consummated on such date.
(g) Each Grantor has, contemporaneously herewith, delivered to Relevant
Collateral Agent possession of all originals of all Instruments and Documents
constituting Collateral currently owned or held by such Grantor, if any (duly
endorsed in blank, if requested by the Relevant Collateral Agent).
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(h) With respect to any Inventory of the Grantors: (i) all Inventory is, and
shall be at all times, located at places of business listed in the Perfection
Certificate or as to which the applicable Grantor has complied with the
provisions of Section 4(a)(i) hereof, except Inventory in transit from one such
location to another such location; (ii) no inventory is, nor shall at any time
or times be, subject to any Lien whatsoever, except for Permitted Liens; (iii)
no Inventory in aggregate value exceeding $500,000 at any time is, nor shall at
any time or times be, kept, stored or maintained with a landlord, bailee,
warehouseman, carrier or similar party (other than a carrier delivering
Inventory to a purchaser in the ordinary course of the applicable Grantor's
business) unless the Bridge Collateral Agent shall have received prior written
notice of such storage and the applicable Grantor has complied with the
provisions of Section 4(a)(iii) hereof; and (iv) no Inventory in the aggregate
value exceeding $500,000 at any time is, nor shall at any time or times be,
kept, stored or maintained with a consignee unless the applicable Grantor has
complied with Section 4(a)(iv) hereof and has taken such other action as is
reasonably requested by the Bridge Collateral Agent in order to maintain the
perfection and priority of the Bridge Collateral Agent's Lien on such Inventory.
(i) With respect to any Intellectual Property the loss, impairment or
infringement of which could reasonably be expected to have a Material Adverse
Effect:
(i) such Intellectual Property is subsisting and has not been adjudged
invalid or unenforceable, in whole or in part;
(ii) such Intellectual Property is valid and enforceable;
(iii) such Grantor has made all necessary filings and recordations to protect
its interest in such Intellectual Property, including, without limitation,
recordations of all of its interests in the Patents and Trademarks in the United
States Patent and Trademark Office and its claims to the Copyrights in the
United States Copyright Office;
(iv) such Grantor is the exclusive owner of the entire and unencumbered right,
title and interest in and to such Intellectual Property and no claim has been
made that the use of such Intellectual Property does or may violate the asserted
rights of any third party;
(v) such Grantor has performed and will continue to perform all acts and
has paid and will continue to pay all required fees and taxes to maintain
such Intellectual Property in full force and effect; and
(vi) SCHEDULE III attached hereto sets forth a true and complete list of all
registered and applied for Intellectual Property owned by the Grantors.
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(j) The Financing Statements are in appropriate form and, with respect
to all Grantors, the Bridge Collateral Agent for the ratable benefit of
itself and the Bridge Lenders, has a valid and perfected security interest
in the Collateral, prior to all other Liens and rights of others therein in
existence on the date hereof except for the Liens permitted under the
Bridge Agreement. All filings and other actions necessary (including,
without limitation, (i) actions necessary to obtain control of Collateral
as provided in Sections 9-104, 9-105, 9-106 and 9-107 of the UCC and (ii)
actions necessary to perfect the Bridge Collateral Agent's Security
Interest with respect to Collateral evidenced by a certificate of
ownership) or desirable to perfect and protect such Security Interests,
except for the recordation of this Bridge Security Agreement with the
United States Patent and Trademark Office which will be recorded by the
Bridge Collateral Agent, have been duly taken.
SECTION 4. FURTHER ASSURANCES; COVENANTS
(a) GENERAL. (i) No Grantor will change its name, type of
organization, jurisdiction of organization, organizational identification
number or location without first giving at least thirty (30) days prior
written notice to the Bridge Collateral Agent and taking all action
required by the Bridge Collateral Agent for the purpose of perfecting or
protecting the security interest granted by this Bridge Security Agreement,
including such Grantor agrees to execute or authenticate and deliver to the
Bridge Collateral Agent all financing statements and financing statement
amendments which the Bridge Collateral Agent may reasonably request in
connection therewith. Each Grantor agrees to promptly notify the Bridge
Collateral Agent of any change in the locations where it keeps or holds any
Collateral or any records relating thereto from the applicable location
described in the Perfection Certificate and, within thirty (30) days after
such change, such Grantor agrees to execute and deliver to the Bridge
Collateral Agent all financing statements and financing statement
amendments which the Bridge Collateral Agent may reasonably request in
connection therewith. No Grantor will in any event change the location of
any Collateral if such change would cause the Security Interests in such
Collateral to lapse or cease to be perfected.
(ii) The Grantors will maintain the Bridge Collateral Agent's Lien on
the Collateral as a first priority perfected Lien thereon, subject only to
Permitted Liens. Upon the reasonable request of the Bridge Collateral
Agent, each Grantor will, from time to time, at its expense, execute,
deliver, file and record any statement, assignment, instrument, document,
agreement or other paper and take any other action (including, without
limitation, any filings of financing or continuation statements under the
UCC and any filings with the United States Patent and Trademark Office and
United States Copyright Office) that from time to time may be necessary in
order to create, preserve, upgrade in rank (to the extent required hereby),
perfect, confirm or validate the Security Interests or to enable the Bridge
Collateral Agent and the Bridge Lenders to obtain the full benefits of this
Bridge Security Agreement, or to enable the Bridge Collateral Agent to
exercise and enforce any of its rights, powers and remedies hereunder with
respect to any of the Collateral. Each Grantor agrees that a carbon,
photographic, photostatic or other reproduction of this Bridge Security
Agreement or of a financing statement is sufficient as a financing
statement. The Grantors shall pay the costs of, or incidental to, any
recording or filing of the Financing Statements and any other financing
statements, financing statement amendments or continuation statements
concerning the Collateral.
11
(iii) Collateral exceeding $500,000 in aggregate value shall not at
any time be in the possession or control of any landlord, warehouseman,
bailee, or any of any Grantor's agents or processors, unless such Grantor
has notified in writing such landlord, warehouseman, bailee, agent or
processor of the Security Interests created hereby, and has obtained such
landlord's, warehouseman's, bailee's, agent's or processor's agreement in
writing to hold all such Collateral for the Bridge Collateral Agent's
account subject to the Bridge Collateral Agent's instructions and has to
caused such landlord, warehouseman, bailee, agent or processor to issue and
deliver to the Bridge Collateral Agent warehouse receipts, bills of lading
or any similar documents relating to such Collateral in the Bridge
Collateral Agent's name and in form and substance reasonably acceptable to
the Bridge Collateral Agent.
(iv) Collateral exceeding $500,000 in aggregate value shall not at any
time be in the possession or control of any consignee, unless the
applicable Grantor(s) has notified in writing each such consignee of the
Security Interests created hereby, and has obtained such consignee's
agreement in writing to hold all such Collateral for the Bridge Collateral
Agent's account subject to the Bridge Collateral Agent's instructions, and
has caused such consignee to issue and deliver to the Bridge Collateral
Agent warehouse receipts, bills of lading or any similar documents relating
to such Collateral in the Bridge Collateral Agent's name and in form and
substance reasonably acceptable to the Bridge Collateral Agent.
(v) Each Grantor will cause the Bridge Collateral Agent, for the
ratable benefit of itself and the Bridge Lenders, to be named as additional
insured and loss payee, subject to Intercreditor Agreement, on each
all-risk property and business interruption insurance policy, and
additional insured on each comprehensive general liability, workers'
compensation, employer's liability, automobile liability and umbrella
liability policy. Obligations under such policies shall be the sole
obligation of the applicable Borrowers and no action of the Borrowers shall
invalidate the rights and interests of the Bridge Collateral Agent and
Bridge Lenders thereunder. In addition, the Bridge Collateral Agent on
behalf of itself and the Bridge Lenders may obtain (or maintain) any
insurance required hereunder, with all costs and reasonable expenses
therefor to be reimbursed by the Borrowers upon demand. Each such insurance
policy shall provide that (A) each additional insured shall be covered as
if a separate (and equivalent) policy covered such Person, (B) the insurers
thereunder shall waive all right of subrogation against the Bridge
Collateral Agent and Bridge Lenders and any right of setoff or counterclaim
and any other right to deduction, whether by attachment or otherwise, (C)
such insurance shall be primary without right of contribution of any other
insurance carried by or on behalf of the Bridge Collateral Agent and Bridge
Lenders and (D) all insurance proceeds shall be adjusted with and payable
to the Bridge Collateral Agent and provide that no cancellation or
termination thereof shall be effective until at least thirty (30) days have
elapsed after receipt by the Bridge Collateral Agent of written notice
thereof. The Bridge Collateral Agent agrees that, as long as no Default or
Event of Default has occurred and is continuing, any such proceeds received
by it shall be applied (and to the extent required, paid over to the
Grantors) in the manner set forth in Section 4.5(c)(iv) of the Senior
Credit Agreement.
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(vi) Each Grantor will, promptly upon request, provide to the
Bridge Collateral Agent all information and evidence the Bridge
Collateral Agent may reasonably request concerning the Collateral, and
in particular the Accounts, to enable the Bridge Collateral Agent to
enforce the provisions of this Bridge Security Agreement.
(vii) If an Event of Default has occurred and is continuing, upon
request by and to the satisfaction of the Bridge Collateral Agent, each
Grantor shall, at its cost and expense, cause to be delivered to the Bridge
Collateral Agent and the Bridge Lenders an opinion or opinions of counsel,
as to the enforceability of the Loan Documents and the Lien of the Bridge
Collateral Agent and Bridge Lenders on the Collateral and other property of
the Grantors and such other matters relating to the transactions
contemplated hereby as the Bridge Collateral Agent or the Bridge Lenders
may reasonably request.
(viii) Each Grantor will comply in all material respects with all
Applicable Laws applicable to the Collateral or any part thereof or to the
operation of such Grantor's business.
(ix) Each Grantor will pay promptly when due all taxes,
assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom, as well
as all claims of any kind (including, without limitation, claims for
labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if (A) the validity
thereof is being contested in good faith by appropriate proceedings,
(B) such proceedings do not involve any reasonable danger of the prompt
sale, forfeiture or loss of or creation of a Lien on any of the
Collateral or any interest therein and (C) such charge is adequately
reserved against on such Grantor's books in accordance with GAAP.
(x) The Grantors shall not
(1) sell, assign (by operation of law or otherwise), abandon or
otherwise dispose of any of the Collateral, except as
permitted by the Bridge Agreement; or
(2) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to
secure indebtedness of any Person or entity, except as
permitted by the Bridge Agreement.
(b) ACCOUNTS, ETC.
(i) Each Grantor shall use all reasonable efforts to cause to be collected
from its Account Debtors, as and when due, any and all amounts owing
under or on account of each Account (including, without limitation,
delinquent Accounts which shall be collected in accordance with lawful
collection procedures) and to apply forthwith amounts so collected to
the outstanding balance of such Account. The costs and expenses
(including, without limitation, attorney's fees) of collection of
Accounts incurred by such Grantor or the Bridge Collateral Agent shall
be borne by such Grantor.
13
(ii) Upon the occurrence and during the continuance of any Event of Default,
upon request of the Bridge Collateral Agent or the Required Lenders,
each Grantor will promptly notify (and each Grantor hereby authorizes
the Bridge Collateral Agent so to notify) each Account Debtor in
respect of any Account that such Account has been assigned to the
Bridge Collateral Agent hereunder and that any payments due or to
become due in respect of such Account are to be made directly to the
Bridge Collateral Agent or its designee.
(iii) Each Grantor will perform and comply with all of its material
obligations in respect of Accounts and General Intangibles and the
exercise by the Bridge Collateral Agent of any of its rights hereunder
shall not release such Grantor from any of its duties or obligations.
(iv) No Grantor will (A) amend, modify, terminate or waive any material
provision of any agreement giving rise to an Account in any manner
which could reasonably be expected to materially adversely affect the
value of such Account as Collateral, (B) fail to exercise promptly and
diligently each and every material right which it may have under each
agreement giving rise to an Account (other than any right of
termination) or (C) fail to deliver to the Bridge Collateral Agent a
copy of each material demand, notice or document received by it
relating in any way to any agreement giving rise to an Account.
(v) Other than in the ordinary course of business as conducted by each
Grantor over a period of time, no Grantor will (A) grant any extension
of the time of payment of any Account with a face amount in excess of
$250,000, (B) compromise, compound or settle the same for less than the
full amount thereof, (C) release, wholly or partially, any Person
liable for the payment thereof, or (D) allow any credit or discount
whatsoever thereon.
(vi) At the reasonable request of the Bridge Collateral Agent or Bridge
Lenders, the Grantors shall deliver to the Bridge Collateral Agent with
a copy for each Bridge Lender an Accounts Aging Report.
(c) EQUIPMENT, ETC. Each Grantor will (i) maintain each item of Equipment in the
same condition, repair and working order as when acquired, ordinary wear and
tear, immaterial impairments of value and damage by the elements excepted, and
in accordance with any manufacturer's manual, (ii) provide as quickly as
practicable all maintenance, service and repairs necessary for such purpose and
(iii) furnish to the Bridge Collateral Agent promptly a statement respecting any
material loss or damage to any of the Equipment with a value exceeding $500,000.
14
(d) INTELLECTUAL PROPERTY.
(i) Each Grantor shall notify the Bridge Collateral Agent promptly (A)
of its acquisition after the Closing Date of any Patent, Patent License,
Copyright, Copyright License, Trademark or Trademark License and (B) if it
knows, or has reason to know of any adverse determination or development
(including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent
and Trademark Office or any court) regarding such Grantor's ownership of
any Patent or Trademark, its right to register the same, or to keep and
maintain the same. In the event that any Patent, Patent License, Copyright,
Copyright License, Trademark or Trademark License is infringed,
misappropriated or diluted by a third party, the affected Grantor shall
notify the Bridge Collateral Agent promptly after it learns thereof and
shall, unless such Grantor and the Bridge Collateral Agent shall jointly
determine that any such action would be of immaterial economic value,
promptly ▇▇▇ for infringement, misappropriation or dilution and to recover
any and all resulting damages and take such other actions as may be
appropriate under the circumstances to protect such Patent, Patent License,
Copyright, Copyright License, Trademark or Trademark License. Each Grantor
agrees, either itself or through any agent, employee or licensee, to inform
the Bridge Collateral Agent upon the filing of an application for the
registration of any Patent, Copyright or Trademark with the United States
Patent and Trademark Office, United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof,
and, upon issuance of such patent or Trademark, to execute and deliver
thereto any and all agreements, instrument, documents and papers the Bridge
Collateral Agent may reasonably request to evidence the Security Interests
in such Patent, Copyright or Trademark and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby. Each
Grantor hereby constitutes the Bridge Collateral Agent its attorney-in-fact
to execute and file all such writings for the foregoing purposes, all acts
of such attorney being hereby ratified and confirmed, and such power, being
coupled with an interest, shall be irrevocable until the Secured
Obligations are paid in full.
(ii) Each Grantor shall preserve and maintain in all material respects
rights in the Intellectual Property which is material to the conduct of its
business and, upon and after the occurrence and during the continuance of
an Event of Default, if requested by the Bridge Collateral Agent, use its
best efforts to obtain any consents, waivers or agreements necessary to
enable the Bridge Collateral Agent to exercise its remedies with respect to
the Intellectual Property. No Grantor shall abandon any right to file a
Copyright, Patent or Trademark application that is material to the business
of such Grantor nor shall such Grantor abandon any such pending Copyright,
Patent or Trademark application, or Copyright, Copyright License, Patent,
Patent License, Trademark or Trademark License without the prior written
consent of the Bridge Collateral Agent.
15
(iii) The Grantors hereby assign, transfer and convey to the Bridge
Collateral Agent, effective upon the occurrence and during the continuance
of any Event of Default, the nonexclusive right and license to use all
Intellectual Property owned or used by the Grantors, together with any
goodwill associated therewith, all to the extent necessary to enable the
Bridge Collateral Agent to realize on the Collateral (including, without
limitation, completing production of, advertising for sale and selling the
Collateral) and any successor or assign to enjoy the benefits of the
Collateral. This right and license shall inure to the benefit of all
successors, assigns and transferees of the Bridge Collateral Agent and its
successors, assigns and transferees, whether by voluntary conveyance,
operation of law, assignment, transfer, foreclosure, deed in lieu of
foreclosure or otherwise. Such right and license is granted free of charge,
without requirement that any monetary payment whatsoever be made to Grantor
by the Bridge Collateral Agent.
(e) VEHICLES. The Company will maintain each Vehicle in good operating
condition, ordinary wear and tear and immaterial impairments of value and damage
by the elements excepted, and will provide all maintenance, service and repairs
necessary for such purpose. Upon the request of the Bridge Collateral Agent, all
applications for certificates of title or ownership indicating the Bridge
Collateral Agent's Lien on the Vehicle covered by such certificate, and any
other necessary documentation, shall be filed in each office in each
jurisdiction which the Bridge Collateral Agent shall deem advisable to perfect
its Liens on the Vehicles. Prior thereto, each certificate of title or ownership
relating to each Vehicle shall be maintained by the applicable Grantor in
accordance with Applicable Law to reflect the ownership interest of such
Grantor.
(f) INDEMNIFICATION. Each Grantor agrees to pay, and to save the Bridge
Collateral Agent and the Bridge Lenders harmless from, any and all liabilities,
costs and expenses (including, without limitation, reasonable legal fees and
expenses) (i) with respect to, or resulting from, any and all excise, sales or
other taxes which may be payable or determined to be payable with respect to any
of the Collateral, (ii) with respect to, or resulting from, complying with any
Applicable Law applicable to any of the Collateral or (iii) in connection with
any of the transactions contemplated by this Bridge Security Agreement (except
to the extent any such liabilities, costs and expenses result from the gross
negligence or willful misconduct of the Bridge Collateral Agent or Bridge
Lenders). In any suit, proceeding or action brought by the Bridge Collateral
Agent under any Account for any sum owing thereunder, or to enforce any
provisions of any Account, each Grantor will save, indemnify and keep the Bridge
Collateral Agent and the Bridge Lenders harmless from and against all expense,
loss or damage suffered by reason of any defense, setoff, counterclaim,
recoupment or reduction or liability whatsoever of the Account Debtor or any
other obligor thereunder, arising out of a breach by any Grantor of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to or in favor of such Account Debtor or obligor or
its successors from any Grantor (except to the extent any such expense, loss or
damage results from the gross negligence or willful misconduct of the Bridge
Collateral Agent or Bridge Lenders). The obligations of the Grantors under this
Section 4(f) shall survive the termination of the other provisions of this
Bridge Security Agreement.
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SECTION 5. REPORTING AND RECORDKEEPING. Each Grantor respectively covenants and
agrees with the Bridge Collateral Agent and the Bridge Lenders that from and
after the date of this Bridge Security Agreement and until the Commitments have
terminated and all Secured Obligations have been fully satisfied:
(a) MAINTENANCE OF RECORDS GENERALLY. Each Grantor will keep and maintain at its
own cost and expense complete and accurate records of the Collateral, including,
without limitation, a record of all payments received and all credits granted
with respect to the Collateral and all other dealings with the Collateral. All
chattel paper given to such Grantor with respect to any Accounts will be marked
with the following legend: "This writing and the obligations evidenced or
secured hereby are subject to the security interest of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior
Funding, Inc., as Bridge Collateral Agent, subject to the terms of the
Intercreditor Agreement" dated September 13, 2002, as amended from time to time.
For the Bridge Collateral Agent's and the Bridge Lenders' further security, each
Grantor agrees that upon the occurrence and during the continuation of any
Default or Event of Default, such Grantor shall deliver and turn over any such
books and records directly to the Bridge Collateral Agent or its designee. Each
Grantor shall permit any representative of the Bridge Collateral Agent to
inspect such books and records in accordance with Section 5.06 of the Bridge
Agreement and will provide photocopies thereof to the Bridge Collateral Agent
upon its reasonable request.
(b) CERTAIN PROVISIONS REGARDING MAINTENANCE OF RECORDS AND REPORTING
RE: ACCOUNTS.
(i) In the event any amounts due and owing in excess of $250,000
individually or $500,000 in the aggregate are in dispute between any
Account Debtor and any Grantor, such Grantor shall provide the Bridge
Collateral Agent with written notice thereof promptly after such Grantor's
learning thereof, explaining in detail the reason for the dispute, all
claims related thereto and the amount in controversy.
(ii) Each Grantor will promptly notify the Bridge Collateral Agent in
writing if any Account or Accounts, the face value of which exceeds
$250,000 individually or $500,000 in the aggregate, arises or arise out of
a contract with the United States of America, or any department, agency,
subdivision or instrumentality thereof, or of any state (or department,
agency, subdivision or instrumentality thereof) where such state has a
state assignment of claims act or other law comparable to the Federal
Assignment of Claims Act. Each Grantor will take all reasonable action
required or reasonably requested by the Bridge Collateral Agent or give
notice of the Bridge Collateral Agent's Security Interest in such Accounts
under the provisions of the Federal Assignment of Claims Act or any
comparable law or act enacted by any state or local Governmental Authority.
Any notifications or other documents executed and delivered to the Bridge
Collateral Agent in connection with the Federal Assignment of Claims Act or
any comparable state law may be promptly filed with the appropriate
Governmental Authority by the Bridge Collateral Agent or held by the Bridge
Collateral Agent until the Bridge Collateral Agent or the Required Lenders
decide in its or their sole discretion to make any such filing.
17
(iii) The Grantors will promptly upon, but in no event later than ten
(10) Business Days after: (A) the Grantor's learning thereof, inform the
Bridge Collateral Agent, in writing, of any material delay in such
Grantor's performance of any of its obligations to any Account Debtor and
of any assertion of any claims, offsets or counterclaims by any Account
Debtor and of any allowances, credits and/or other monies granted by such
Grantor to any Account Debtor, in each case involving amounts in excess of
$250,000 for any single Account or Account Debtor or in excess of $500,000
in the aggregate for all Accounts and Account Debtors; and (B) the
Grantor's receipt or learning thereof, furnish to and inform the Bridge
Collateral Agent of all adverse information relating to the financial
condition of any Account Debtor with respect to Accounts exceeding $250,000
individually or $500,000 in the aggregate.
(c) FURTHER IDENTIFICATION OF COLLATERAL. Each Grantor will, if so requested by
the Bridge Collateral Agent, furnish to the Bridge Collateral Agent statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Bridge Collateral Agent may
reasonably request, all in reasonable detail.
(d) NOTICES. In addition to the notices required by Section 5(b) hereof, each
Grantor will advise the Bridge Collateral Agent promptly, in reasonable detail,
(i) of any material Lien or claim made or asserted against any of the
Collateral, (ii) of any material adverse change in the composition of the
Collateral, and (iii) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the Collateral or on
the validity, perfection or priority of the Security Interests.
SECTION 6. COLLATERAL ACCOUNT. (a) Pursuant to the Senior Security Agreement, a
Collateral Account has been established with the Senior Administrative Agent in
the name and under the exclusive dominion and control of the Senior
Administrative Agent, for the ratable benefit of the Bridge Collateral Agent and
the Bridge Lenders, subject to the terms of the Intercreditor Agreement. There
shall be deposited from time to time into such account the cash proceeds of the
Collateral required to be delivered to the Senior Administrative Agent pursuant
to Section 6(b) hereof or any other provision of this Bridge Security Agreement.
Any income received by the Senior Administrative Agent, on behalf of the Bridge
Collateral Agreement with respect to the balance from time to time standing to
the credit of the Collateral Account, including any interest or capital gains on
investments of amounts on deposit in the Collateral Account, shall remain, or be
deposited, in the Collateral Account together with any investments from time to
time made pursuant to Section 6(c), shall vest in the Senior Administrative
Agent, for the ratable benefit of the Bridge Collateral Agent and the Bridge
Lenders, subject to the terms of the Intercreditor Agreement, shall constitute
part of the Collateral hereunder and shall not constitute payment of the Secured
Obligations until applied thereto as hereinafter provided.
18
(b) Upon the occurrence and during the continuance of an Event of Default, if
requested by the Bridge Collateral Agent, subject to the terms of the
Intercreditor Agreement, each Grantor shall instruct all Account Debtors and
other Persons obligated in respect of all Accounts to make all payments in
respect of the Accounts either (i) directly to the Bridge Collateral Agent, on
behalf of the Bridge Collateral Agreement (by instructing that such payments be
remitted to a post office box which shall be in the name and under the exclusive
dominion and control of the Senior Administrative Agent, on behalf of the Bridge
Collateral Agent) or (ii) to one or more other banks in any state in the United
States (by instructing that such payments be remitted to a post office box which
shall be in the name and under the exclusive dominion and control of such bank)
under a Lockbox Letter substantially in the form of ANNEX I hereto duly executed
by each Grantor and such bank or under other arrangements, in form and substance
satisfactory to the Bridge Collateral Agent, pursuant to which such Grantor
shall have irrevocably instructed such other bank (and such other bank shall
have agreed) to remit all proceeds of such payments directly to the Bridge
Collateral Agent for deposit into the Collateral Account or as the Senior
Administrative Agent may otherwise instruct such bank, and thereafter if the
proceeds of any Collateral shall be received by any of the Grantors, such
Grantor will promptly deposit such proceeds into the Collateral Account and
until so deposited, all such proceeds shall be held in trust by such Grantor for
and as the property of the Senior Administrative Agent, for the ratable benefit
of the Bridge Collateral Agent and the Bridge Lenders and shall not be
commingled with any other funds or property of such Grantor. At any time after
the occurrence and during the continuance of an Event of Default, the Senior
Administrative Agent may itself so instruct each Grantor's Account Debtors. All
such payments made to the Senior Administrative Agent shall be deposited in the
Collateral Account.
(c) Amounts on deposit in the Collateral Account shall be promptly liquidated
and applied to the payment of the Secured Obligations in the manner specified in
Section 10 hereof.
SECTION 7. GENERAL AUTHORITY. (a) The Grantors hereby irrevocably appoint the
Bridge Collateral Agent their true and lawful attorney, with full power of
substitution, in the name of each Grantor, the Bridge Collateral Agent, the
Bridge Lenders or otherwise, for the sole use and benefit of the Bridge
Collateral Agent and the Bridge Lenders, but at the Grantors' expense, to
exercise, at any time from time to time all or any of the following powers:
(i) to file the Financing Statements and any financing statements, financing
statement amendments and continuation statements referred to in Sections
4(a)(i), 4(a)(ii) and Section 7(c) hereof;
(ii) to demand, ▇▇▇ for, collect, receive and give acquittance for any and all
monies due or to become due with respect to any Collateral or by virtue thereof;
(iii) to settle, compromise, compound, prosecute or defend any action or
proceeding with respect to any Collateral;
19
(iv) to sell, transfer, license, assign or otherwise deal in or with the
Collateral and the Proceeds thereof, as fully and effectually as if the Bridge
Collateral Agent were the absolute owner thereof; and
(v) to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference to the Collateral;
PROVIDED that the Bridge Collateral Agent shall not take any of the actions
described in this Section 7 except those described in clause (i) above unless an
Event of Default shall have occurred and be continuing and the Bridge Collateral
Agent shall give the Grantors not less than ten (10) days' prior written notice
of the time and place of any sale or other intended disposition of any of the
Collateral, except any Collateral which is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market. The
Grantors agree that any such notice constitutes "reasonable notification" within
the meaning of Section 9-610(b) of the UCC (to the extent such Section is
applicable).
(b) RATIFICATION. The Grantors hereby ratify all that said attorney shall
lawfully do or cause to be done by virtue hereof. This power of attorney is a
power coupled with an interest and shall be irrevocable.
(c) EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-509 of the UCC and
any other applicable law, each Grantor authorizes the Bridge Collateral Agent to
file or record financing statements, financing statement amendments,
continuation statements and other filings or recording documents or instruments
with respect to the Collateral without the signature of such Grantor in such
form and in such offices as the Bridge Collateral Agent determines appropriate
to perfect the Security Interests of the Bridge Collateral Agent under this
Bridge Security Agreement. A photographic or other reproduction of this Bridge
Security Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
(d) OTHER POWERS. The Grantors also authorize the Bridge Collateral Agent at any
time and from time to time, to execute, in connection with the sale provided for
in Section 8 hereof, any endorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral.
20
SECTION 8. REMEDIES UPON EVENT OF DEFAULT. (a) If any Event of Default has
occurred and is continuing, the Bridge Collateral Agent may, upon the request of
the Required Lenders (and only upon such request), exercise on behalf of itself
and the Bridge Lenders all rights of a secured party under the UCC (whether or
not in effect in the jurisdiction where such rights are exercised) and, in
addition, the Bridge Collateral Agent may, upon the request of the Required
Lenders (and only upon such request), (i) withdraw all cash, if any, in the
Collateral Account and investments made with amounts on deposit in the
Collateral Account, and apply such monies, investments and other cash, if any,
then held by it as Collateral as specified in Section 10 hereof and (ii) if
there shall be no such monies, investments or cash or if such monies,
investments or cash shall be insufficient to pay all the Secured Obligations in
full, sell the Collateral or any part thereof at public or private sale, for
cash, upon credit or for future delivery, and at such price or prices as the
Bridge Collateral Agent may deem satisfactory. The Bridge Collateral Agent or
any Bridge Lender may be the purchaser of any or all of the Collateral so sold
at any public sale (or, if the Collateral is of a type customarily sold in a
recognized market or is of a type which is the subject of widely distributed
standard price quotations or if otherwise permitted under applicable law, at any
private sale) and thereafter hold the same, absolutely, free from any right or
claim of whatsoever kind. Each Grantor will execute and deliver such documents
and take such other reasonable actions as the Bridge Collateral Agent deems
reasonably necessary or reasonably advisable in order that any such sale may be
made in compliance with law. Upon any such sale the Bridge Collateral Agent
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral so sold (without warranty). Each purchaser at any such sale shall
hold the Collateral so sold to it absolutely, free from any claim or right of
whatsoever kind, including any equity or right of redemption of any Grantor. To
the extent permitted by law, each Grantor hereby specifically waives all rights
of redemption, stay or appraisal which it has or may have under any law now
existing or hereafter adopted. The notice of such sale shall be given to the
Grantors ten (10) days prior to such sale and (A) in case of a public sale,
state the time and place fixed for such sale, and (B) in the case of a private
sale, state the day after which sale may be consummated. Any such public sale
shall be held at such time or times within ordinary business hours and at such
place or places as the Bridge Collateral Agent may fix in the notice of such
sale. At any such sale the Collateral may be sold in one lot as an entirety or
in separate parcels, as the Bridge Collateral Agent may determine. The Bridge
Collateral Agent shall not be obligated to make any such sale pursuant to any
such notice. The Bridge Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned. In case
of any sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Bridge Collateral Agent
until the selling price is paid by the purchaser thereof, but the Bridge
Collateral Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. The Bridge
Collateral Agent, instead of exercising the power of sale herein conferred upon
it, may proceed by a suit or suits at law or in equity to foreclose the Security
Interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction. The Grantors shall remain
liable for any deficiency.
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(b) For the purpose of enforcing any and all rights and remedies under this
Bridge Security Agreement, the Bridge Collateral Agent may (i) require each
Grantor to, and each Grantor agrees that it will, at its expense and upon the
reasonable request of the Bridge Collateral Agent, forthwith assemble all or any
part of the Collateral as directed by the Bridge Collateral Agent and make it
available at the premises of such Grantor or other place reasonably deemed by
the Bridge Collateral Agent to be reasonably convenient thereto and such
Grantor, (ii) to the extent permitted by applicable law, enter, and without
breach of the peace, any premise where any of the Collateral is or may be
located and, without charge or liability to the Bridge Collateral Agent (except
for any liability resulting from the gross negligence or willful misconduct
thereof), seize and remove such Collateral from such premises, (iii) have access
to and use such Grantor's books and records relating to the Collateral and (iv)
prior to the disposition of the Collateral, store or transfer such Collateral
without charge in or by means of any storage or transportation facility owned or
leased by such Grantor, process, repair or recondition such Collateral or
otherwise prepare it for disposition in any manner and to the extent the Bridge
Collateral Agent deems appropriate and, in connection with such preparation and
disposition, use without charge any Trademark, trade name, Copyright, Patent or
technical process used by such Grantor.
(c) Without limiting the generality of the foregoing, if any Event of Default
has occurred and is continuing,
(i) the Bridge Collateral Agent may license, or sublicense, whether general,
special or otherwise, and whether on an exclusive or non-exclusive basis, any
Patents or Trademarks included in the Collateral throughout the world for such
term or terms, on such conditions and in such manner as the Bridge Collateral
Agent shall in its sole discretion determine;
(ii) the Bridge Collateral Agent may (without assuming any obligations or
liability thereunder), at any time and from time to time, enforce (and shall
have the exclusive right to enforce) against any licensee or sublicensee all
rights and remedies of any Grantor in, to and under any Patent Licenses,
Copyright Licenses or Trademark Licenses and take or refrain from taking any
action under any thereof; PROVIDED, HOWEVER, that no such actions could
reasonably be expected to result in the failure of such Patent Licenses,
Copyright Licenses or Trademark Licenses to remain in compliance with all
Applicable Law, and the Grantors hereby release the Bridge Collateral Agent and
each of the Bridge Lenders free and harmless from and against any claims arising
out of, any lawful action so taken or omitted to be taken with respect thereto
except with respect to the gross negligence or willful misconduct of the Bridge
Collateral Agent or the Bridge Lenders; and
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(iii) upon request by the Bridge Collateral Agent, the Grantors will execute and
deliver to the Bridge Collateral Agent a power of attorney, in form and
substance satisfactory to the Bridge Collateral Agent, for the implementation of
any lease, assignment, license, sublicense, grant or option, sale or other
disposition of a Patent or Trademark. In the event of any such disposition
pursuant to this Section 8, the Grantors shall supply their know-how and
expertise relating to the manufacture and sale of the products bearing
Trademarks or the products or services made or rendered in connection with
Patents, and its customer lists and other records relating to such Patents or
Trademarks and to the distribution of said products, to the Bridge Collateral
Agent.
SECTION 9. LIMITATION ON DUTY OF RELEVANT COLLATERAL AGENT IN RESPECT OF
COLLATERAL. Beyond reasonable care in the custody thereof, the Relevant
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto. The Relevant Collateral Agent shall be deemed to have
exercised reasonable care in the custody of the Collateral in its possession if
the Collateral is accorded treatment substantially equal to that which it
accords its own property, and the Relevant Collateral Agent shall not be liable
or responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any
warehouseman, carrier, forwarding agency, consignee or other agent or bailee
selected by the Relevant Collateral Agent in good faith.
SECTION 10. APPLICATION OF PROCEEDS. Upon the occurrence and during the
continuance of an Event of Default, the proceeds of any sale of, or other
realization upon, all or any part of the Collateral shall be applied in
accordance with the Intercreditor Agreement, and thereafter with the Grantors or
their successors or assigns, or as a court of competent jurisdiction may direct
Bridge Agreement, of any surplus then remaining from such proceeds. The Bridge
Collateral Agent may make distribution hereunder in cash or in kind or, on a
ratable basis, in any combination thereof.
SECTION 11. CONCERNING THE BRIDGE COLLATERAL AGENT. The provisions of Article
XIII of the Credit Agreement shall inure to the benefit of the Bridge Collateral
Agent in respect of this Bridge Security Agreement and shall be binding upon the
parties to the Senior Credit Agreement in such respect. In furtherance and not
in derogation of the rights, privileges and immunities of the Bridge Collateral
Agent therein set forth:
(a) The Bridge Collateral Agent is authorized to take all such action as is
provided to be taken by it as Bridge Collateral Agent hereunder and all other
action incidental thereto. As to any matters not expressly provided for herein,
the Bridge Collateral Agent may request instructions from the Bridge Lenders and
shall act or refrain from acting in accordance with written instructions from
the Required Lenders (or, when expressly required by this Bridge Security
Agreement or the Bridge Agreement, all the Bridge Lenders) or, in the absence of
such instructions, in accordance with its discretion.
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(b) The Bridge Collateral Agent shall not be responsible for the existence,
genuineness or value of any of the Collateral or for the validity, perfection,
priority or enforceability of the Security Interests, whether impaired by
operation of law or by reason of any action or omission to act on its part
(other than any such action or inaction constituting gross negligence or willful
misconduct). The Bridge Collateral Agent shall have no duty to ascertain or
inquire as to the performance or observance of any of the terms of this Security
Agreement by any Grantor.
SECTION 12. APPOINTMENT OF COLLATERAL AGENTS. At any time or times, in order to
comply with any legal requirement in any jurisdiction or in order to effectuate
any provision of the Loan Documents, the Bridge Collateral Agent may appoint
another bank or trust company or one or more other Persons, either to act as
collateral agent or agents, jointly with the Bridge Collateral Agent or
separately, on behalf of the Bridge Collateral Agent and the Bridge Lenders with
such power and authority as may be necessary for the effectual operation of the
provisions hereof and specified in the instrument of appointment (which may, in
the discretion of the Bridge Collateral Agent, include provisions for the
protection of such collateral agent similar to the provisions of Section 11
hereof).
SECTION 13. EXPENSES. In the event that the Grantors fail to comply with the
provisions of the Bridge Agreement, this Bridge Security Agreement or any other
Loan Document, such that the value of any Collateral or the validity,
perfection, rank or value of the Security Interests are thereby diminished or
potentially diminished or put at material risk, the Bridge Collateral Agent if
requested by the Bridge Lenders may, but shall not be required to, effect such
compliance on behalf of the Grantors, and the Grantors shall reimburse the
Bridge Collateral Agent for the costs thereof on demand. All insurance expenses
and all expenses of protecting, storing, warehousing, appraising, insuring,
handling, maintaining and shipping the Collateral, any and all excise, stamp,
intangibles, transfer, property, sales, and use taxes imposed by any state,
federal, or local authority or any other Governmental Authority on any of the
Collateral, or in respect of the sale or other disposition thereof, shall be
borne and paid by the Grantors; and if the Grantors fail promptly to pay any
portion thereof when due, the Bridge Collateral Agent or any Bridge Lender may,
at its option, but shall not be required to, pay the same and charge the
Grantors' account therefor, and the Grantors agree to reimburse the Bridge
Collateral Agent or such Bridge Lender therefor on demand. All sums so paid or
incurred by the Bridge Collateral Agent or any Bridge Lender for any of the
foregoing and any and all other sums for which the Grantors may become liable
hereunder and all costs and expenses (including reasonable attorneys' fees,
legal expenses and court costs) incurred by the Bridge Collateral Agent or any
Bridge Lender in enforcing or protecting the Security Interests or any of their
rights or remedies thereon shall be payable by the Grantors on demand and shall
bear interest (after as well as before judgment) until paid at the rate then
applicable to Rollover Loans under the Bridge Agreement and shall be additional
Secured Obligations hereunder.
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SECTION 14. INTERCREDITOR AGREEMENT. Notwithstanding anything in this Bridge
Security Agreement to the contrary, expressed or implied, this Bridge Security
Agreement is subject to the terms of the Intercreditor Agreement. To the extent
that any provision of this Bridge Security Agreement conflicts with the
Intercreditor Agreement, the provisions of the Intercreditor Agreement shall be
controlling.
SECTION 15. NOTICES. All notices, communications and distributions hereunder
shall be given or made in accordance with Section 9.01 of the Bridge Agreement.
SECTION 16. RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC. The enumeration of
the rights and remedies of the Bridge Collateral Agent and the Bridge Lenders
set forth in this Bridge Security Agreement is not intended to be exhaustive and
the exercise by the Bridge Collateral Agent and the Bridge Lenders of any right
or remedy shall not preclude the exercise of any other rights or remedies, all
of which shall be cumulative, and shall be in addition to any other right or
remedy given hereunder or under the Loan Documents or that may now or hereafter
exist in law or in equity or by suit or otherwise. No delay or failure to take
action on the part of the Bridge Collateral Agent or any Bridge Lender in
exercising any right, power or privilege under this Bridge Security Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or privilege preclude other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrowers, the Bridge Collateral Agent and the Bridge
Lenders or their respective agents or employees shall be effective to change,
modify or discharge any provision of this Bridge Security Agreement or any of
the other Loan Documents or to constitute a waiver of any Event of Default. This
Bridge Security Agreement is a Loan Document executed pursuant to the Bridge
Agreement.
SECTION 17. REGULATORY APPROVALS. If an Event of Default shall have occurred and
be continuing, upon the request of the Bridge Collateral Agent, each Grantor
will, at its expense, promptly execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments, registration
statements and all other documents and papers the Bridge Collateral Agent may
reasonably request or as may be required by law in connection with the obtaining
of any consent, approval, registration, qualification or authorization of the
FCC and any applicable PUC (collectively, the "Regulatory Authorities") or of
any other Person necessary or reasonably appropriate for the effective exercise
of any rights under this Bridge Security Agreement. Without limiting the
generality of the foregoing, if an Event of Default shall have occurred and be
continuing, the Grantors shall take any action which the Bridge Collateral Agent
may reasonably request in order to transfer and assign to the Bridge Collateral
Agent, or to such one or more third parties as the Bridge Collateral Agent may
designate, or to a combination of the foregoing, each Communications License. To
enforce the provisions of this Section, upon the occurrence and during the
continuance of an Event of Default, the Bridge Collateral Agent is empowered to
request the appointment of a receiver from any court of competent jurisdiction.
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Such receiver shall be instructed to seek from the Regulatory Authorities an
involuntary transfer of control of each such Communications License for the
purpose of seeking a bona fide purchaser to whom control will ultimately be
transferred. The Grantors hereby agree to authorize such an involuntary transfer
of control upon the request of the receiver so appointed and, if the Grantors
shall refuse to authorize the transfer, their approval may be required by the
court. Upon the occurrence and during the continuance of an Event of Default,
the Grantors shall further use their best efforts to assist in obtaining
approval of the Regulatory Authorities, if required, for any action or
transactions contemplated by this Bridge Security Agreement including, without
limitation, the preparation, execution and filing with the Regulatory
Authorities of the assignor's or transferor's portion of any application or
applications for consent to the assignment of any Communications License or
transfer of control necessary or reasonably appropriate under the rules and
regulations of the Regulatory Authorities for the approval of the transfer or
assignment of any portion of the Collateral, together with any Communications
License. The Grantors acknowledge that the assignment or transfer of each
Communications License is integral to the Bridge Collateral Agent's and the
Bridge Lenders' realization of the value of the Collateral, that there is no
adequate remedy at law for failure by the Grantors to comply with the provisions
of this Section and that such failure would cause irreparable injury not
adequately compensable in damages, and therefore agree that each and every
covenant contained in this Section may be specifically enforced, and the
Grantors hereby waive and agree not to assert any defenses against an action for
specific performance of such covenants.
SECTION 18. SUCCESSORS AND ASSIGNS. This Bridge Security Agreement is for the
benefit of the Bridge Collateral Agent and the Bridge Lenders and their
successors and assigns (as permitted by the Bridge Agreement), and in the event
of an assignment of all or any of the Secured Obligations, the rights hereunder,
to the extent applicable to the indebtedness so assigned, may be transferred
with such indebtedness. This Bridge Security Agreement shall be binding on the
Grantors and their successors and assigns; provided, that the Grantors may not
assign any of their rights or obligations hereunder without the prior written
consent of the Bridge Collateral Agent and the Bridge Lenders.
SECTION 19. AMENDMENTS, WAIVERS AND CONSENTS. No term, covenant, agreement or
condition of this Bridge Security Agreement may be amended or waived, nor may
any consent be given, except pursuant to a Joinder Agreement and otherwise in
the manner set forth in Section 15.11 of the Senior Credit Agreement.
SECTION 20. POWERS COUPLED WITH AN INTEREST. All authorizations and
agencies herein contained with respect to the Collateral are irrevocable and
powers coupled with an interest and are irrevocable.
SECTION 21. GOVERNING LAW. THIS BRIDGE SECURITY AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
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SECTION 22. CONSENT TO JURISDICTION. Each Grantor irrevocably consents to the
personal jurisdiction of the state and federal courts located in New York
County, New York, in any action, claim or other proceeding arising out of or any
dispute in connection with this Bridge Security Agreement, any rights or
obligations hereunder, or the performance of such rights and obligations. Each
Grantor irrevocably consents to the service of a summons and complaint and other
process in any action, claim or proceeding brought by the Bridge Collateral
Agent or any Bridge Lender in connection with this Bridge Security Agreement,
any rights or obligations hereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner provided in
Section 9.01 of the Bridge Agreement. Nothing in this Section 21 shall affect
the right of the Bridge Collateral Agent or any Bridge Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Bridge Collateral Agent or any Bridge Lender to bring any action or
proceeding against any Grantor or its properties in the courts of any other
jurisdictions. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by Applicable Law, any objection that it may now or
hereafter have to the laying of te venue of any such proceeding brought in any
court specified above and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
SECTION 23. WAIVER OF JURY TRIAL; INJUNCTIVE RELIEF; PUNITIVE DAMAGES. JURY
TRIAL. THE PARTIES HERETO AND TO THE OTHER LOAN DOCUMENTS HEREBY ACKNOWLEDGE
THAT THEY IRREVOCABLE WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT
TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE (AS
HEREINAFTER DEFINED) IN CONNECTION WITH THIS BRIDGE SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THE PERFORMANCE OF
SUCH RIGHTS AND OBLIGATIONS. FOR THE PURPOSE OF THIS SECURITY AGREEMENT,
"DISPUTE" MEANS ANY DISPUTE, CLAIM OR CONTROVERSY ARISING OUT OF, CONNECTED WITH
OR RELATING TO THIS BRIDGE SECURITY AGREEMENT OR ANY OTHER LOAN DOCUMENT.
"DISPUTES" MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS, COUNTERCLAIMS, CLAIMS
BROUGHT AS CLASS ACTIONS, CLAIMS ARISING FROM LOAN DOCUMENTS EXECUTED IN THE
FUTURE, DISPUTES AS TO WHETHER A MATTER IS SUBJECT TO ARBITRATION, OR CLAIMS
CONCERNING ANY ASPECT OF THE PAST, PRESENT OR FUTURE RELATIONSHIPS ARISING OUT
OF OR CONNECTED WITH THE LOAN DOCUMENTS.
(a) INJUCTIVE RELIEF. Each party hereto recognizes that, in the event any such
Person fails to perform, observe or discharge any of its obligations or
liabilities under this Bridge Security Agreement, any remedy of law may prove to
be inadequate relief to the Bridge Collateral Agent and the Bridge Lenders.
Therefore, each Grantor agrees that the Bridge Collateral Agent and the Bridge
Lenders, at their option, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
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(b) PUNITIVE DAMAGES. Each party hereto and to the other Loan Documents agrees
that it shall not have a remedy of punitive or exemplary damages against any
other party hereto or any other Loan Document in any Dispute and hereby waives
any right or claim to punitive or exemplary damages such party has now or which
may arise in the future in connection with any Dispute, whether such Dispute is
resolved by arbitration or judicially.
SECTION 24. SEVERABILITY. If any provision hereof is invalid and unenforceable
in any jurisdiction, then, to the fullest extent permitted by law, (a) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Bridge Collateral Agent and the
Bridge Lenders in order to carry out the intentions of the parties hereto as
nearly as may be possible; and (b) the invalidity or unenforceability of any
provisions hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
SECTION 25. HEADINGS. The various headings of this Bridge Security Agreement
are inserted for convenience only and shall not affect the meaning or
interpretation of this Bridge Security Agreement or any provisions hereof.
SECTION 26. COUNTERPARTS. This Bridge Security Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Bridge
Security Agreement to be executed under seal by their duly authorized officers,
all as of the day and year first written above.
GRANTORS:
CHOICE ONE COMMUNICATIONS INC.
CHOICE ONE COMMUNICATIONS OF NEW YORK INC.
CHOICE ONE COMMUNICATIONS OF PENNSYLVANIA INC.
CHOICE ONE COMMUNICATIONS OF MASSACHUSETTS INC.
CHOICE ONE COMMUNICATIONS INTERNATIONAL INC.
CHOICE ONE COMMUNICATIONS OF RHODE ISLAND INC.
CHOICE ONE COMMUNICATIONS OF CONNECTICUT INC.
CHOICE ONE COMMUNICATIONS OF MAINE INC.
CHOICE ONE OF NEW HAMPSHIRE INC.
CHOICE ONE COMMUNICATIONS OF OHIO INC.
CHOICE ONE COMMUNICATIONS OF VERMONT INC.
CHOICE ONE ONLINE INC.
CHOICE ONE COMMUNICATIONS OF VIRGINIA INC.
Choice One Communications Services Inc.
US XCHANGE INC. (formerly known as BARTER ACQUISITION CORPORATION)
US XCHANGE OF INDIANA, L.L.C.
US XCHANGE OF ILLINOIS, L.L.C.
US XCHANGE OF WISCONSIN, L.L.C.
US XCHANGE OF MICHIGAN, L.L.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
& Chief Financial Officer
29
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Bridge Collateral Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Managing Director