Exhibit 10.4
SECURITY AGREEMENT
This Security Agreement (this "Agreement") is dated as of January 1,
2006 and entered into by and between ▇▇▇▇▇▇ Communications, Inc., a Delaware
corporation (the "Grantor"), and Apollo Investment Fund IV, L.P., as Collateral
Agent for and representative of (in such capacity herein called the "Secured
Party") the Noteholders (as hereinafter defined).
PRELIMINARY STATEMENTS
A. On the Closing Date, pursuant to the Note Purchase Agreement dated
as of December 30, 2005 (as amended, restated, supplemented or otherwise
modified from time to time, the "Note Purchase Agreement"; the terms defined
therein and not otherwise defined herein being used herein as therein defined),
by and among the Grantor and the Initial Noteholders, the Initial Noteholders
shall, subject to the terms and conditions set forth in the Note Purchase
Agreement, purchase the Notes in an aggregate original principal amount of
$100,000,000.
B. It is intended that the Grantor will consummate a sale of shares of
its Common Stock to its stockholders pursuant to a rights offering generating
aggregate net proceeds sufficient to repay the Notes.
NOW THEREFORE, the parties to this Agreement hereby agree as set forth
below.
SECTION 1. Grant of Security.
The Grantor hereby assigns to the Secured Party and its successors and
assigns, for the ratable benefit of the Noteholders, and hereby grants to the
Secured Party and its successors and assigns, for the ratable benefit of the
Noteholders a security interest in, all of the Grantor's right, title and
interest, whether now existing or hereafter arising, in any and all rights to
payment for the purchase of any shares of Common Stock sold by Grantor to any
stockholder of Grantor pursuant to any Rights Offering and all Proceeds of the
foregoing (collectively, the "Collateral"); provided, that the Collateral shall
not include Excluded Collateral.
"Rights Offering" shall mean a sale of new shares of common stock by
distributing stock purchase rights to all but not less than all of Grantor's
existing stockholders.
"Excluded Collateral" shall mean any and all rights to payment for the
purchase of any shares of Common Stock sold by Grantor to any stockholder of
Grantor pursuant to any Rights Offering that are to be satisfied by converting
the Notes (and accrued but unpaid interest thereon) into Common Stock pursuant
to Section 3.5(a) of the Note Purchase Agreement.
SECTION 2. Security for Obligations.
This Agreement secures, and the Collateral is collateral security for,
the prompt payment or performance in full when due, whether at stated maturity,
by required prepayment, declaration, acceleration, demand or otherwise, of all
Secured Obligations of the Grantor. "Secured Obligations" means (a) the
Obligations (including interest accruing during the pendency of any Proceeding
regardless of whether allowed or allowable in such Proceeding) and (b) the due
and punctual performance of all covenants, agreements, obligations and
liabilities of the Grantor under or pursuant to the Note Purchase Agreement and
the other Note Documents, provided, that upon consummation of the Rights
Offering, the Secured Obligations shall not include the Convertible Amount. For
purposes hereof, the term "Proceeding" shall mean any legal, administrative or
arbitration action, suit, complaint, charge, hearing, inquiry, investigation or
proceeding.
SECTION 3. Grantor Remains Liable.
Anything contained herein to the contrary notwithstanding, (a) the
Grantor shall remain liable under any contracts and agreements included in the
Collateral, to the extent set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed; (b) the exercise by the Secured Party of any of its rights hereunder
shall not release the Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral; and (c) the Secured Party
shall not have any obligation or liability under any contracts and agreements
included in the Collateral by reason of this Agreement, nor shall the Secured
Party be obligated to perform any of the obligations or duties of the Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 4. Representations and Warranties.
The Grantor represents and warrants as of the date hereof as set forth
below:
(a) Ownership of Collateral. Except as expressly permitted by the Note
Purchase Agreement or created herein, the Grantor owns its interests in the
Collateral free and clear of any Lien and no effective financing statement or
other instrument similar in effect covering all or any part of the Collateral is
on file in any filing or recording office.
(b) Perfection. The security interests in the Collateral granted to the
Secured Party for the ratable benefit of the Noteholders hereunder constitute
valid security interests in the Collateral, securing the payment of the Secured
Obligations. Upon the filing of a UCC financing statement naming the Grantor as
"debtor", naming the Secured Party as "secured party" and describing the
Collateral with the Secretary of State of the State of Delaware, the security
interests in the Collateral granted to the Secured Party for the ratable benefit
of the Noteholders will constitute perfected security interests therein prior to
all other Liens (except for Liens permitted by the Note Purchase Agreement), and
all filings and other actions necessary or desirable to perfect and protect such
security interests have been, or promptly after the Closing Date will be, duly
made or taken.
(c) Office Locations; Type and Jurisdiction of Organization; Locations
of Equipment and Inventory. The Grantor's name as it appears in official filings
in the jurisdiction of its organization, type of organization (i.e. corporation,
limited partnership, etc.), jurisdiction of organization, principal place of
business, chief executive office, office where the Grantor keeps its Records
regarding the Collateral, and organization number provided by the applicable
Government Authority of the jurisdiction of organization are set forth on
Schedule 3 annexed hereto.
(d) Names. The Grantor (or predecessor by merger or otherwise of the
Grantor) has not, since its incorporation, had a different name from the name of
the Grantor listed on the signature pages hereof, except the names set forth on
Schedule 5 annexed hereto.
SECTION 5. Further Assurances.
The Grantor agrees that from time to time, at the expense of the
Grantor, the Grantor will promptly execute and deliver all further instruments
and documents, and take all further action, that may be reasonably necessary or
desirable, or that the Secured Party may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable the Secured Party to exercise and enforce their rights and remedies
hereunder with respect to any Collateral. The Grantor authorizes the filing of
financing statements that describe the Collateral in a manner that is broader
than described herein.
SECTION 6. Certain Covenants of Grantor.
The Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or in
violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) give the Secured Party at least ten days' prior written notice of
(i) any change in the Grantor's name, identity or corporate structure and (ii)
any reincorporation, reorganization or other action that results in a change of
the jurisdiction of organization of the Grantor;
(c) if the Secured Party gives value to enable the Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes;
(d) keep correct and accurate Records of Collateral at the locations
described in Schedule 3 annexed hereto; and
(e) permit representatives of the Secured Party, upon reasonable prior
notice and during normal business hours, to inspect and make abstracts from such
Records, and the Grantor agrees to render to the Secured Party, at the Grantor's
cost and expense, such clerical and other assistance as may be reasonably
requested with regard thereto.
SECTION 7. Secured Party Appointed Attorney-in-Fact.
The Grantor hereby irrevocably appoints the Secured Party as the
Grantor's attorney-in-fact, with full authority in the place and stead of the
Grantor and in the name of the Grantor, the Secured Party or otherwise, from
time to time in the Secured Party's discretion to take any action and to execute
any instrument that the Secured Party may deem reasonably necessary or advisable
to accomplish the purposes of this Agreement, including, without limitation:
(a) upon the occurrence and during the continuance of an Event of
Default, to ask for, demand, collect, ▇▇▇ for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) upon the occurrence and during the continuance of an Event of
Default, to file any claims or take any action or institute any proceedings that
the Secured Party may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce or protect the rights of the Secured
Party with respect to any of the Collateral;
(c) to pay or discharge Taxes or Liens (other than Taxes not required
to be discharged pursuant to the Note Purchase Agreement and Liens permitted
under this Agreement or the Note Purchase Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by the Secured Party in
its sole discretion, any such payments made by the Secured Party to become
obligations of the Grantor to the Secured Party, due and payable immediately
without demand; and
(d) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
the Secured Party was the absolute owner thereof for all purposes, and to do, at
the Secured Party's option and the Grantor's expense, at any time or from time
to time, all acts and things that the Secured Party deem necessary to protect,
preserve or realize upon the Collateral and the Secured Party's security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as the Grantor might do.
SECTION 8. Secured Party May Perform.
If the Grantor fails to perform any agreement contained herein, and
such failure shall continue for a period exceeding five Business Days, the
Secured Party may itself perform, or cause performance of, such agreement, and
the expenses of the Secured Party incurred in connection therewith shall be
payable by the Grantor under Section 12(b) hereof.
SECTION 9. Standard of Care.
The powers conferred on the Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, the Secured Party shall have no duty as to
any Collateral or as to the taking of any necessary steps to preserve rights
against prior parties or any other rights pertaining to any Collateral. The
Secured Party shall be deemed to have exercised reasonable care in the custody
and preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which the Secured Party accords its own
property.
SECTION 10. Remedies.
(a) Generally. If any Event of Default shall have occurred and be
continuing, the Secured Party may, subject to Section 14 hereof, exercise in
respect of the Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party on default under the Uniform Commercial Code as it exists on the
date of this Agreement, or as it may hereafter be amended, in the State of New
York (the "UCC") (whether or not the UCC applies to the affected Collateral),
and also may (i) require the Grantor to, and the Grantor hereby agrees that it
will at its expense and upon request of the Secured Party forthwith, assemble
all or part of the Collateral as directed by the Secured Party and make it
available to the Secured Party at a place to be designated by the Secured Party
that is reasonably convenient to both parties, (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Secured Party's offices or elsewhere,
for cash, on credit or for future delivery, at such time or times and at such
price or prices and upon such other terms as the Secured Party may deem
commercially reasonable. The Secured Party or any Noteholder may be the
purchaser of any or all of the Collateral at any such public or, to the extent
permitted under the UCC, private sale and the Secured Party shall be entitled,
for the purpose of bidding and making settlement or payment of the purchase
price for all or any portion of the Collateral sold at any such sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by the Secured Party at such sale. Each
purchaser at any such sale shall hold the property sold absolutely free from any
claim or right on the part of the Grantor, and the Grantor hereby waives (to the
extent permitted by Applicable Law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under any Law
now existing or hereafter enacted. The Grantor agrees that, to the extent notice
of sale shall be required by Law, at least ten days' notice to the Grantor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. The Secured Party shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given. The Secured Party may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned. The Grantor hereby waives any claims against the Secured Party
arising by reason of the fact that the price at which any Collateral may have
been sold at such a private sale was less than the price which might have been
obtained at a public sale, even if the Secured Party accepts the first offer
received and do not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay all the Secured Obligations, the Grantor shall be liable for the deficiency
and the fees of any attorneys employed by the Secured Party to collect such
deficiency. The Grantor further agrees that a breach of any of the covenants
contained in this Section 10 will cause irreparable injury to the Secured
Parties, that the Secured Party has no adequate remedy at Law in respect of such
breach and, as a consequence, that each and every covenant contained in this
Section shall be specifically enforceable against the Grantor, and the Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities.
SECTION 11. Application of Proceeds.
Except as expressly provided elsewhere in this Agreement, all proceeds
received by the Secured Party in respect of any sale of, collection from, or
other realization upon all or any part of the Collateral shall be applied in the
following order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to the
Secured Party's agents and counsel, and all other expenses, liabilities and
advances made or incurred by the Secured Party in connection therewith, and
all amounts for which the Secured Party is entitled to indemnification
hereunder and all advances made by the Secured Party hereunder for the
account of the Grantor, and to the payment of all costs and expenses paid or
incurred by the Secured Party in connection with the exercise of any right
or remedy hereunder;
SECOND: To the payment of all other Secured Obligations (for the
ratable benefit of the holders thereof) and, as to obligations arising under
the Note Purchase Agreement, as provided in the Note Purchase Agreement; and
THIRD: To the payment to or upon the order of the Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from such
proceeds.
SECTION 12. Indemnity and Expenses.
(a) The Grantor agrees to indemnify the Secured Party and each
Noteholder from and against any and all claims, losses and liabilities in any
way relating to, growing out of or resulting from this Agreement and the
transactions contemplated hereby (including, without limitation, enforcement of
this Agreement), except to the extent such claims, losses or liabilities result
solely from the Secured Party's or such Noteholder's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) The obligations of the Grantor in this Section 12 shall survive the
termination of this Agreement and the discharge of the Grantor's other
obligations under this Agreement, the Note Purchase Agreement and the other Note
Documents.
SECTION 13. Continuing Security Interest; Transfer of Loans; Termination and
Release.
(a) This Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until the payment in
full of the Secured Obligations (other than claims with respect to fees or
expenses or any contingent obligation to the extent no unsatisfied claim has
been asserted in writing), (ii) be binding upon the Grantor and its successors
and assigns, and (iii) inure, together with the rights and remedies of the
Secured Party hereunder, to the benefit of the Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(iii), but subject to the provisions of Article IX and Section 11.3 of the Note
Purchase Agreement, any Noteholder may assign or otherwise transfer any Notes
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Noteholders herein or
otherwise.
(b) Upon the payment in full of all Secured Obligations (other than
claims with respect to fees or expenses or any contingent obligation to the
extent no unsatisfied claim has been asserted in writing), the security interest
granted hereby shall terminate and all rights to the Collateral shall revert to
the Grantor. Upon any such termination the Secured Party will, at Grantor's
expense, execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such termination.
SECTION 14. Secured Party as Agent.
(a) The Secured Party has been appointed to act as the Collateral Agent
hereunder by Noteholders. The Collateral Agent shall be obligated, and shall
have the right hereunder, to make demands, to give notices, to exercise or
refrain from exercising any rights, and to take or refrain from taking any
action (including, without limitation, the release or substitution of
Collateral), solely in accordance with this Agreement and the Note Purchase
Agreement; provided that the Secured Party shall exercise, or refrain from
exercising, any remedies provided for in Section 10 hereof in accordance with
the instructions of Requisite Noteholders.
(b) Collateral Agent may resign at any time by giving 30 days' prior
written notice thereof to Noteholders and the Grantor. Upon any such notice of
resignation by Collateral Agent, Requisite Noteholders shall have the right,
upon five Business Days' notice to the Grantor, to appoint a successor
Collateral Agent. If no such successor shall have been so appointed by Requisite
Noteholders and shall have accepted such appointment within 30 days after the
retiring Collateral Agent gives notice of its resignation, the retiring
Collateral Agent may, on behalf of Noteholders, appoint a successor Collateral
Agent. If Collateral Agent shall notify Noteholders and the Grantor that no
Person has accepted such appointment as successor Collateral Agent, such
resignation shall nonetheless become effective in accordance with Collateral
Agent's notice and (i) the retiring Collateral Agent shall be discharged from
its duties and obligations under the Note Documents, except that any Collateral
held by Collateral Agent will continue to be held by it until a Person shall
have accepted the appointment of successor Collateral Agent, and (ii) all
payments, communications and determinations provided to be made by, to or
through Collateral Agent shall instead be made by, to or through each Noteholder
directly, until such time as Requisite Noteholders appoint a successor
Collateral Agent in accordance with this Section 14(b). Upon the acceptance of
any appointment as Collateral Agent by a successor Collateral Agent, that
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Secured Party under
this Agreement, and the retiring Secured Party under this Agreement shall
promptly (i) transfer to such successor Secured Party all sums, securities and
other items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and (ii) execute (if
necessary) and deliver to such successor Secured Party such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring Secured Party
shall be discharged from its duties and obligations under this Agreement. After
any retiring Collateral Agent's resignation hereunder as the Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was the Secured Party
hereunder.
SECTION 15. Amendments; Etc.
No amendment, modification, termination or waiver of any provision of
this Agreement, and no consent to any departure by the Grantor therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Secured Party and, in the case of any such amendment or modification, by the
Grantor. Any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which it was given.
SECTION 16. Notices.
All notices, demands and requests of any kind to be delivered to any
party hereto in connection with this Agreement shall be (a) delivered
personally; (b) sent by nationally-recognized overnight courier guarantying next
Business Day delivery; (c) sent by first class, registered or certified mail,
postage prepaid, return receipt requested; or (d) sent by telecopier, in each
case to such party at its address provided in Section 11.1 of the Note Purchase
Agreement. Any party hereto may from time to time by notice in writing served
upon the other in accordance with this Section 16 specify a different mailing
address or a different person to which all such notices, demands or requests
thereafter are to be addressed.
Any notice, demand or request so delivered shall constitute valid
notice under this Agreement and shall be deemed to have been received (a) on the
day of actual delivery in the case of personal delivery; (b) on the next
Business Day after the date when sent in the case of delivery by
nationally-recognized overnight courier; (c) on the fifth Business Day after the
date of deposit in the U.S. mail in the case of mailing; or (d) upon receipt in
the case of a telecopier transmission or the next Business Day if such day is
not a Business Day.
SECTION 17. Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of the Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 18. Severability.
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under Applicable Law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any Applicable Law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, and such invalid, void or otherwise unenforceable provisions shall
be null and void. It is the intent of the parties, however, that any invalid,
void or otherwise unenforceable provisions be automatically replaced by other
provisions which are as similar as possible in terms to such invalid, void or
otherwise unenforceable provisions but are valid and enforceable to the fullest
extent permitted by Applicable Law.
SECTION 19. Headings.
Section and subsection headings in this Agreement are included herein
for convenience of reference only and are not to affect the construction of, or
to be taken into consideration in interpreting, this Agreement.
SECTION 20. Governing Law; Rules of Construction.
ALL QUESTIONS CONCERNING THE CONSTRUCTION, INTERPRETATION AND VALIDITY
OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
DOMESTIC LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CHOICE OR
CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER
JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION
OTHER THAN THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE UCC PROVIDES
THAT THE PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK, IN WHICH CASE THE LAWS OF SUCH
JURISDICTION SHALL GOVERN WITH RESPECT TO THE PERFECTION OF THE SECURITY
INTEREST IN, OR THE REMEDIES WITH RESPECT TO, SUCH PARTICULAR COLLATERAL. The
rules of construction set forth in Section 1.2 of the Note Purchase Agreement
shall be applicable to this Agreement mutatis mutandis.
SECTION 21. Consent to Exclusively Jurisdiction and Service of Process.
(a) THE PARTIES TO THIS AGREEMENT AGREE THAT JURISDICTION AND VENUE IN
ANY ACTION BROUGHT BY ANY PARTY HERETO PURSUANT TO THIS AGREEMENT SHALL
EXCLUSIVELY LIE IN ANY FEDERAL OR STATE COURT LOCATED IN THE COUNTY OF NEW YORK
IN THE STATE OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
PARTIES HERETO IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS
FOR THEMSELVES AND IN RESPECT OF THEIR PROPERTY WITH RESPECT TO SUCH ACTION. THE
PARTIES HERETO IRREVOCABLY AGREE THAT VENUE WOULD BE PROPER IN SUCH COURT, AND
HEREBY WAIVE ANY OBJECTION THAT SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM
FOR THE RESOLUTION OF SUCH ACTION.
(b) THE GRANTOR HEREBY AGREES THAT SERVICE UPON IT BY REGISTERED OR
CERTIFIED MAIL (RETURN RECEIPT REQUESTED) SHALL CONSTITUTE SUFFICIENT NOTICE.
NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE NOTEHOLDERS TO BRING
PROCEEDINGS AGAINST THE GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
SECTION 22. Waiver of Jury Trial.
EACH PARTY HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS AGREEMENT OR (b)
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM IN RESPECT TO THIS AGREEMENT, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE. EACH PARTY HERETO HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM,
DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF THEIR RIGHTS TO TRIAL BY JURY.
SECTION 23. Counterparts.
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered (by facsimile or otherwise) to the other party, it being understood
that all parties need not sign the same counterpart. Any counterpart or other
signature to this Agreement that is delivered by facsimile shall be deemed for
all purposes as constituting good and valid execution and delivery by such party
of this Agreement.
SECTION 24. Definitions.
Each capitalized term utilized in this Agreement that is not defined in
the Note Purchase Agreement or in this Agreement, but that is defined in the UCC
shall have the meaning set forth in Articles 1, 8 or 9 of the UCC.
SECTION 25. Suretyship Waivers by Grantor, etc.
(a) The Grantor agrees that its obligations hereunder are irrevocable,
absolute, independent and unconditional and shall not be affected by any
circumstance which constitutes a legal or equitable discharge of a guarantor or
surety other than payment in full of the Secured Obligations. In furtherance of
the foregoing (but only pursuant to the terms of the Note Purchase Agreement)
and without limiting the generality thereof, the Grantor agrees as follows: (i)
the Secured Party or any Noteholder may from time to time, without notice or
demand and without affecting the validity or enforceability of this Agreement or
giving rise to any limitation, impairment or discharge of the Grantor's
liability hereunder, (A) renew, extend, accelerate or otherwise change the time,
place, manner or terms of payment of the Secured Obligations, (B) settle,
compromise, release or discharge, or accept or refuse any offer of performance
with respect to, or substitutions for, the Secured Obligations or any agreement
relating thereto and/or subordinate the payment of the same to the payment of
any other obligations, (C) release, exchange, compromise, subordinate or modify,
with or without consideration, any other security for payment of the Secured
Obligations, any guaranties of the Secured Obligations, or any other obligation
of any Person with respect to the Secured Obligations, (D) enforce and apply any
other security now or hereafter held by or for the benefit of the Secured Party
or any Noteholder in respect of the Secured Obligations and direct the order or
manner of sale thereof, or exercise any other right or remedy that the Secured
Party or Noteholders or any of them, may have against any such security, as the
Secured Party may reasonably determine consistent with the Note Purchase
Agreement and any applicable security agreement, including foreclosure on any
such security pursuant to one or more judicial or nonjudicial sales, whether or
not every aspect of any such sale is commercially reasonable, and (E) exercise
any other rights available to the Secured Party or Noteholders or any of them,
under the Note Documents, at Law or in equity; and (ii) this Agreement and the
obligations of the Grantor hereunder shall be valid and enforceable and shall
not be subject to any limitation, impairment or discharge for any reason (other
than payment in full of the Secured Obligations), including, without limitation,
the occurrence of any of the following, whether or not the Grantor shall have
had notice or knowledge of any of them: (A) any failure to assert or enforce or
agreement not to assert or enforce, or the stay or enjoining, by order of court,
by operation of Law or otherwise, of the exercise or enforcement of, any claim
or demand or any right, power or remedy with respect to the Secured Obligations
or any agreement relating thereto, or with respect to any guaranty of or other
security for the payment of the Secured Obligations, (B) any waiver, amendment
or modification of, or any consent to departure from, any of the terms or
provisions of the Note Purchase Agreement, any of the other Note Documents, or
any agreement or instrument executed pursuant thereto, or of any guaranty or
other security for the Secured Obligations, (C) the Secured Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid or
unenforceable in any respect, (D) the application of payments received from any
source to the payment of indebtedness other than the Secured Obligations, even
though the Secured Party or Noteholders or any of them, might have elected to
apply such payment to any part or all of the Secured Obligations, (E) any
failure to perfect or continue perfection of a security interest in any other
collateral which secures any of the Secured Obligations, (F) any defenses,
set-offs or counterclaims which the Grantor may allege or assert against the
Secured Party or any Noteholder in respect of the Secured Obligations,
including, without limitation, failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury, and (G) any other act or thing or omission, or delay to do any other act
or thing, which may or might in any manner or to any extent vary the risk of the
Grantor as an obligor in respect of the Secured Obligations.
(b) The Grantor hereby waives, for the benefit of Noteholders and the
Secured Party: (i) any right to require the Secured Party or Noteholders as a
condition of payment or performance by the Grantor, to (A) proceed against the
Grantor or any other Person, (B) proceed against or exhaust any other security
held from the Grantor, any guarantor of the Secured Obligations or any other
Person, (C) proceed against or have resort to any balance of any deposit account
or credit on the books of the Secured Party or any Noteholder in favor of the
Grantor or any other Person, or (D) pursue any other remedy in the power of the
Secured Party or any Noteholder whatsoever; (ii) any defense arising by reason
of the incapacity, lack of authority or any disability or other defense of the
Grantor including, without limitation, any defense based on or arising out of
the lack of validity or the unenforceability of the Secured Obligations or any
agreement or instrument relating thereto or by reason of the cessation of the
liability of the Grantor from any cause other than payment in full of the
Secured Obligations; (iii) any defense based upon any Law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal; (iv) any defense based upon
the Secured Party's or any Noteholder's errors or omissions in the
administration of the Secured Obligations, except behavior which amounts to bad
faith; (v) (A) any principles or provisions of Law, statutory or otherwise,
which are or might be in conflict with the terms of this Agreement and any legal
or equitable discharge of the Grantor's obligations hereunder, (B) the benefit
of any statute of limitations affecting the Grantor's liability hereunder or the
enforcement hereof, (C) any rights to set-offs, recoupments and counterclaims,
and (D) promptness, diligence and any requirement that the Secured Party or any
Noteholder protect, secure, perfect or insure any other security interest or
Lien or any property subject thereto; (vi) notices, demands, presentments,
protests, notices of protest, notices of dishonor and notices of any action or
inaction, notices of default under the Note Purchase Agreement or any agreement
or instrument related thereto, notices of any renewal, extension or modification
of the Secured Obligations or any agreement related thereto, notices of any
extension of credit to the Grantor and notices of any of the matters referred to
in the preceding paragraph and any right to consent to any thereof; and (vii) to
the fullest extent permitted by Law, any defenses or benefits that may be
derived from or afforded by Law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms of this Agreement.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Grantor and the Secured Party have caused this
Security Agreement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first written above.
GRANTOR:
--------
▇▇▇▇▇▇ COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and
General Counsel
SECURED PARTY:
--------------
APOLLO INVESTMENT FUND IV, L.P., as
Collateral Agent and Secured Party
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President