EXHIBIT 10.16
CONFORMED AS EXECUTED
SECURITY AGREEMENT
among
IDT CORPORATION,
CERTAIN OF ITS SUBSIDIARIES
and
BANKERS TRUST COMPANY,
as COLLATERAL AGENT
________________________________
Dated as of May 10, 1999
________________________________
TABLE OF CONTENTS
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Page
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ARTICLE I SECURITY INTERESTS.................................................. 2
1.1. Grant of Security Interests......................................... 2
1.2. Power of Attorney................................................... 3
ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS................... 3
2.1. Necessary Filings................................................... 3
2.2. No Liens............................................................ 3
2.3. Other Financing Statements.......................................... 3
2.4. Chief Executive Office, Record Locations............................ 4
2.5. Location of Inventory and Equipment................................. 4
2.6. Recourse............................................................ 4
2.7. Trade Names; Change of Name......................................... 5
ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT
RIGHTS; INSTRUMENTS; CHATTEL PAPER................................. 5
3.1. Additional Representations and Warranties........................... 5
3.2. Maintenance of Records.............................................. 5
3.3. Direction to Account Debtors; Contracting Parties; etc. ............ 6
3.4. Modification of Terms; etc. ........................................ 6
3.5. Collection.......................................................... 6
3.6. Instruments......................................................... 7
3.7. Assignors Remain Liable Under Receivables........................... 7
3.8. Assignors Remain Liable Under Contracts............................. 7
3.9. Further Actions..................................................... 7
ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS............................ 8
4.1. Additional Representations and Warranties........................... 8
4.2. Licenses and Assignments............................................ 8
4.3. Infringements....................................................... 8
4.4. Preservation of Marks............................................... 9
4.5. Maintenance of Registration......................................... 9
4.6. Future Registered Marks............................................. 9
4.7. Remedies............................................................ 9
ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS
AND TRADE SECRETS................................................... 10
5.1. Additional Representations and Warranties............................ 10
Page
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5.2. Licenses and Assignments............................................. 10
5.3. Infringements........................................................ 10
5.4. Maintenance of Patents or Copyright.................................. 11
5.5. Prosecution of Patent Applications................................... 11
5.6. Other Patents and Copyrights......................................... 11
5.7. Remedies............................................................. 11
ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL................................. 11
6.1. Protection of Collateral Agent's Security............................ 11
6.2. Warehouse Receipts Non-negotiable.................................... 12
6.3. Further Actions...................................................... 12
6.4. Financing Statements................................................. 12
6.5. FCC Licenses; etc. .................................................. 12
ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT....................... 13
7.1. Remedies; Obtaining the Collateral Upon Default...................... 13
7.2. Remedies; Disposition of the Collateral.............................. 14
7.3. Waiver of Claims..................................................... 15
7.4. Application of Proceeds.............................................. 16
7.5. Remedies Cumulative.................................................. 18
7.6. Discontinuance of Proceedings........................................ 18
ARTICLE VIII INDEMNITY......................................................... 20
8.1. Indemnity............................................................ 20
8.2. Indemnity Obligations Secured by Collateral; Survival................ 22
ARTICLE IX DEFINITIONS......................................................... 22
ARTICLE X MISCELLANEOUS....................................................... 27
10.1. Notices............................................................. 27
10.2. Waiver; Amendment................................................... 28
10.3. Obligations Absolute................................................ 28
10.4. Successors and Assigns.............................................. 29
10.5. Headings Descriptive................................................ 29
10.6. Governing Law....................................................... 29
10.7. Assignor's Duties................................................... 29
10.8. Termination; Release................................................ 29
10.9. Counterparts........................................................ 30
10.10. Severability....................................................... 30
10.11. The Collateral Agent............................................... 30
10.12. Benefit of Agreement............................................... 30
10.13. Additional Assignors............................................... 30
(ii)
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equipment Location
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Schedule of Marks
ANNEX E Schedule of Patent
ANNEX F Schedule of Copyrights
ANNEX G Form of Assignment of Security Interest in United States
Trademarks and Patents
ANNEX H Form of Assignment of Security Interest in United States
Copyrights
(iii)
SECURITY AGREEMENT
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SECURITY AGREEMENT, dated as of May 10, 1999, made by each of the
undersigned assignors (each an "Assignor" and, together with any other entity
that becomes an assignor hereunder pursuant to Section 10.13 hereof, the
"Assignors") in favor of Bankers Trust Company, as Collateral Agent together
with any successor collateral agent (the "Collateral Agent"), for the benefit of
the Secured Creditors (as defined below). Except as otherwise defined herein,
capitalized terms used herein and defined in the Credit Agreement (as defined
below) shall be used herein as so defined.
W I T N E S S E T H:
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WHEREAS, IDT Corporation (the "Borrower"), the lenders party from time
to time party thereto (the "Lenders"), ▇▇▇▇▇▇ Commercial Paper Inc., as
Documentation Agent, CIBC World Markets Corp., as Syndication Agent, and Bankers
Trust Company, as Administrative Agent (together with any successor
administrative agent, the "Administrative Agent"), have entered into a Credit
Agreement, dated as of May 10, 1999, providing for the making of Loans to, and
the issuance of Letters of Credit for the account of, the Borrower as
contemplated therein (as amended, modified or supplemented from time to time,
the "Credit Agreement") (the Lenders, the Administrative Agent, the Issuing
Lender and the Collateral Agent are herein called the "Lender Creditors");
WHEREAS, the Borrower may at any time and from time to time enter into
one or more Interest Rate Protection Agreements or Other Hedging Agreements with
one or more Lenders or any affiliate thereof (each such Lender or affiliate,
even if the respective Lender subsequently ceases to be a Lender under the
Credit Agreement for any reason, together with such Lender's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors", and
together with the Lender Creditors, are herein called the "Secured Creditors");
WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary
Guarantor has jointly and severally guaranteed to the Secured Creditors the
payment when due of all Guaranteed Obligations as described therein;
WHEREAS, it is a condition precedent to the making of Loans to, and
the issuance of Letters of Credit for the account of, the Borrower under the
Credit Agreement that each Assignor shall have executed and delivered to the
Collateral Agent this Agreement; and
WHEREAS, each Assignor will obtain benefits from the incurrence of
Loans to, and the issuance of Letters of Credit for the account of, the Borrower
under the Credit Agreement and the entering into by the Borrower of Interest
Rate Protection Agreements or Other Hedging Agreements and, accordingly, each
Assignor desires to enter into this Agreement in order to satisfy the condition
described in the preceding paragraph;
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NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the prompt
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and complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest in, all of the right, title and
interest of such Assignor in, to and under all of the following, whether now
existing or hereafter from time to time acquired: (i) each and every
Receivable, (ii) all Contracts, together with all Contract Rights arising
thereunder, (iii) all Inventory, (iv) all Equipment, (v) all Marks, together
with the registrations and right to all renewals thereof, and the goodwill of
the business of such Assignor symbolized by the Marks, (vi) all Patents and
Copyrights, (vii) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including, but not limited to, Trade Secrets Rights, (viii) all other Goods,
General Intangibles, Investment Property, Permits, Chattel Paper, Documents,
Instruments and other assets (including cash) (subject, in the case of General
Intangibles and Permits constituting FCC Licenses only, to clause (xi) below),
(ix) the Cash Collateral Account and all monies, securities, instruments and
other investments deposited or required to be deposited in such Cash Collateral
Account, (x) all other bank, demand, time savings, cash management, passbook,
certificates of deposit and similar accounts maintained by such Assignor and all
monies, securities, instruments and other investments deposited or required to
be deposited in any of the foregoing accounts, (xi) all goodwill, going concern
value, and all of such Assignor's rights in, to or under, or relating to, any
license, permit or other authorization (each, an "FCC License") issued by the
FCC (provided, however, that such security interest does not include, and the
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term "Collateral" does not include, at any time any FCC License to the extent,
but only to the extent, that such Assignor is prohibited at that time from
granting a security interest therein pursuant to the Communications Act, and the
FCC Rules, but includes, to the maximum extent permitted by law, all rights
incident or appurtenant to any such FCC License and the rights to receive all
proceeds, monies or other consideration derived or derivable from or in
connection with the sale, assignment or transfer of any FCC License); and (xii)
all Proceeds and products of any and all of the foregoing (all of the above,
collectively, the "Collateral").
(b) The security interest of the Collateral Agent under this Agreement
extends to all Collateral of the kind which is the subject of this Agreement
which any Assignor may acquire at any time during the term of this Agreement.
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1.2. Power of Attorney. Each Assignor hereby constitutes and
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appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquaintance for any and all moneys and claims for
moneys due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and, subject, in the case of any exercise by the Pledgee of any rights
or remedies that effects an assignment or transfer of control of any FCC
License, to receipt of any approvals that may be required under the
Communications Act or the FCC Rules, to file any claims or take any action or
institute any proceedings which the Collateral Agent may deem to be necessary or
advisable to protect the interests of the Secured Creditors, which appointment
as attorney is coupled with an interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. Upon the filing by the Collateral Agent of
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appropriate financing statements in the applicable filing offices in the
jurisdiction set forth in Annexes A and B, and upon the filing of the
appropriate Assignments of Security Interest in the form of Annex G or H
attached hereto in the United States Patent and Trademark Office or in the
United States Copyright Office, as applicable, all filings, registrations and
recordings necessary or appropriate to create, preserve and perfect the security
interest granted by such Assignor to the Collateral Agent hereby in respect of
the Collateral will have been accomplished and the security interest granted to
the Collateral Agent pursuant to this Agreement in and to the Collateral will
create a perfected security interest therein prior to the rights of all other
Persons therein and subject to no other Liens (other than Permitted Liens) and
will be entitled to all the rights, priorities and benefits afforded by the
Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction to perfected security interests, in each case to the extent that
the Collateral consists of the type of property in which a security interest may
be perfected by filing a financing statement under the Uniform Commercial Code
as enacted in any relevant jurisdiction or in the United States Patent and
Trademark Office or in the United States Copyright Office.
2.2. No Liens. Such Assignor is, and as to Collateral acquired by it
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from time to time after the date hereof such Assignor will be, the owner of all
Collateral free from any Lien, security interest, encumbrance or other right,
title or interest of any Person (other than Permitted Liens), and such Assignor
shall defend the Collateral against all claims and demands of all Persons at any
time claiming the same or any interest therein adverse to the Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there is no
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financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than financing
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statements filed in respect of Permitted Liens), and so long as the Termination
Date has not occurred, such Assignor will not execute or authorize to be filed
in any public office any financing statement (or similar statement or instrument
of registration under the law of any jurisdiction) or statements relating to the
Collateral, except financing statements filed or to be filed in respect of and
covering the security interests granted hereby by such Assignor or in connection
with Permitted Liens.
2.4. Chief Executive Office, Record Locations. The chief executive
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office of such Assignor is located at the address indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office
except to such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.4. The originals of all documents
evidencing all Receivables and Contract Rights of such Assignor and the only
original books of account and records of such Assignor relating thereto are, and
will continue to be, kept at such chief executive office, at one or more of the
other locations set forth on Annex A hereto or at such new locations as such
Assignor may establish in accordance with the last sentence of this Section 2.4.
All Receivables and Contract Rights of such Assignor are, and will continue to
be, maintained at, and controlled and directed (including, without limitation,
for general accounting purposes) from, the office locations described above or
such new location established in accordance with the last sentence of this
Section 2.4. No Assignor shall establish new locations for such offices until
(i) it shall have given to the Collateral Agent not less than 15 days' prior
written notice of its intention to do so, clearly describing such new location
and providing such other information in connection therewith as the Collateral
Agent may reasonably request, and (ii) with respect to such new location, it
shall have taken all action reasonably satisfactory to the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect.
2.5. Location of Inventory and Equipment. All Inventory and
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Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5. Any Assignor may establish a new
location for Inventory and Equipment only if (i) it shall have given to the
Collateral Agent not less than 15 days' prior written notice of its intention so
to do, clearly describing such new location and providing such other information
in connection therewith as the Collateral Agent may reasonably request and (ii)
with respect to such new location, it shall have taken all action reasonably
satisfactory to the Collateral Agent to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect.
2.6. Recourse. This Agreement is made with full recourse to each
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Assignor (including, without limitation, with full recourse to all assets of
such Assignor) and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
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2.7. Trade Names; Change of Name. No Assignor has or operates in any
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jurisdiction under, or in the preceding one year has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name and such other trade or fictitious names as are listed on Annex C
hereto for such Assignor. No Assignor shall change its legal name or assume or
operate in any jurisdiction under any trade, fictitious or other name except
those names listed on Annex C hereto for such Assignor and new names established
in accordance with the last sentence of this Section 2.7. No Assignor shall
assume or operate in any jurisdiction under any new trade, fictitious or other
name until (i) it shall have given to the Collateral Agent not less than 15
days' prior written notice of its intention so to do, clearly describing such
new name and the jurisdictions in which such new name shall be used and
providing such other information in connection therewith as the Collateral Agent
may reasonably request and (ii) with respect to such new name, it shall have
taken all action reasonably requested by the Collateral Agent to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER
3.1. Additional Representations and Warranties. As of the time when
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each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are what they purport to be.
3.2. Maintenance of Records. Each Assignor will keep and maintain at
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its own cost and expense accurate records of its Receivables and Contracts,
including, but not limited to, originals of all documentation (including each
Contract) with respect thereto, records of all payments received, all credits
granted thereon, all merchandise returned and all other dealings therewith, and
such Assignor will make the same available on such Assignor's premises to the
Collateral Agent for inspection, at such Assignor's own cost and expense, at any
and all reasonable times upon prior notice to such Assignor. Upon the
occurrence and during the continuance of an Event of Default and at the request
of the Collateral Agent, such Assignor shall, at its own cost and expense,
deliver all tangible evidence of its Receivables and Contract Rights (including,
without limitation, all documents evidencing the Receivables and all Contracts)
and such books and records to the Collateral Agent or to its representatives
(copies of which evidence and books and records may be retained by such
Assignor). Upon the occurrence and during the continuance of an Event of
Default and if the Collateral Agent so directs, such Assignor shall legend, in
form and manner satisfactory to the Collateral Agent, the Receivables and the
Contracts, as well as books, records and documents (if any) of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
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3.3. Direction to Account Debtors; Contracting Parties; etc. Upon
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the occurrence and during the continuance of an Event of Default, if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x), and (z) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor.
Without notice to or assent by any Assignor, the Collateral Agent may, upon the
occurrence and during the continuance of an Event of Default, apply any or all
amounts then in, or thereafter deposited in, the Cash Collateral Account which
application shall be effected in the manner provided in Section 7.4 of this
Agreement. The reasonable costs and expenses (including reasonable attorneys'
fees) of collection, whether incurred by an Assignor or the Collateral Agent,
shall be borne by the relevant Assignor. The Collateral Agent shall deliver a
copy of each notice referred to in the preceding clause (y) to the relevant
Assignor, provided, that the failure by the Collateral Agent to so notify such
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Assignor shall not affect the effectiveness of such notice or the other rights
of the Collateral Agent created by this Section 3.3.
3.4. Modification of Terms; etc. Except in accordance with such
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Assignor's ordinary course of business and consistent with reasonable business
judgment, no Assignor shall rescind or cancel any indebtedness evidenced by any
Receivable or under any Contract, or modify any term thereof or make any
adjustment with respect thereto, or extend or renew the same, or compromise or
settle any material dispute, claim, suit or legal proceeding relating thereto,
or sell any Receivable or Contract, or interest therein, without the prior
written consent of the Collateral Agent. No Assignor will do anything to impair
the rights of the Collateral Agent in the Receivables or Contracts in any
material respect.
3.5. Collection. Each Assignor shall endeavor in accordance with
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reasonable business practices to cause to be collected from the account debtor
named in each of its Receivables or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Receivable or Contract,
and apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Receivable or under such Contract, except as
otherwise directed by the Collateral Agent after the occurrence and during the
continuation of an Event of Default, any Assignor may allow in the ordinary
course of business as adjustments to amounts owing under its Receivables and
Contracts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which such Assignor finds
appropriate in accordance with reasonable business judgment and (ii) a refund or
credit due as a result of returned or damaged merchandise or improperly
performed services or for other reasons which such Assignor finds appropriate in
accordance with reasonable business judgment. The reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees) of collection,
whether incurred by an Assignor or the Collateral Agent, shall be borne by the
relevant Assignor.
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3.6. Instruments. If any Assignor owns or acquires any Instrument
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constituting Collateral (other than checks and other payment instruments
received and collected in the ordinary course of business), such Assignor will
within 10 Business Days notify the Collateral Agent thereof, and upon request by
the Collateral Agent will promptly deliver such Instrument to the Collateral
Agent appropriately endorsed to the order of the Collateral Agent as further
security hereunder.
3.7. Assignors Remain Liable Under Receivables. Anything herein to
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the contrary notwithstanding, the Assignors shall remain liable under each of
the Receivables to observe and perform all of the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to such Receivables. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such Receivable pursuant hereto, nor shall
the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by them
or as to the sufficiency of any performance by any party under any Receivable
(or any agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.
3.8. Assignors Remain Liable Under Contracts. Anything herein to the
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contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.9. Further Actions. (a) Each Assignor will, at its own expense,
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make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, certificates, reports
and other assurances or instruments and take such further steps relating to its
Receivables, Contracts, Instruments and other property or rights covered by the
security interest hereby granted, as the Collateral Agent may reasonably
require.
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(b) Each Assignor agrees that in the event of any change in any
requirement of law occurring after the date hereof that affects in any manner
the Collateral Agent's rights of access to, or use or sale of the FCC Licenses
or the procedures necessary to enable the Collateral Agent to obtain such rights
of access, use or sale (including, without limitation, changes allowing greater
such access), each Assignor upon reasonable request of the Collateral Agent or
the Required Lenders, shall enter into an amendment to this Agreement in form
and substance reasonably satisfactory to the Collateral Agent to provide the
Collateral Agent with such rights to the greatest extent possible consistent
with then applicable requirements of law, including without limitation the
Communications Act and the FCC Rules.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
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represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the registered Marks listed in Annex D hereto for such Assignor
and that said listed Marks include all United States marks and applications for
United States marks registered in the United States Patent and Trademark Office
that such Assignor owns or uses in connection with its business as of the date
hereof. Each Assignor represents and warrants that it owns, is licensed to use
or otherwise has the right to use, all Marks that it uses. Each Assignor
further warrants that it has no knowledge of any third party claim received by
it that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any trademark, service ▇▇▇▇ or trade name
other than as could not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each Assignor represents and
warrants that it is the true and lawful owner of or otherwise has the right to
use all U.S. trademark registrations and applications listed in Annex D hereto
and that said registrations are valid, subsisting, have not been canceled and
that such Assignor is not aware of any third-party claim that any of said
registrations is invalid or unenforceable, or is not aware that there is any
reason that any of said registrations is invalid or unenforceable, or is not
aware that there is any reason that any of said applications will not pass to
registration other than as could not, either individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. Each Assignor hereby
grants to the Collateral Agent an absolute power of attorney to sign, upon the
occurrence and during the continuance of an Event of Default, any document which
may be required by the United States Patent and Trademark Office in order to
effect an absolute assignment of all right, title and interest in each ▇▇▇▇, and
record the same.
4.2. Licenses and Assignments. Except as otherwise permitted by the
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Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any ▇▇▇▇ absent prior written approval of the Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
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thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is
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infringing or diluting or otherwise violating any of such Assignor's rights in
and to any ▇▇▇▇ in any manner that could reasonably be expected to have a
Material Adverse Effect, or with respect to any party claiming that such
Assignor's use of any ▇▇▇▇ violates in any material respect any property right
of that party. Each Assignor further agrees to prosecute in accordance with
reasonable business practices any Person infringing any ▇▇▇▇ in any manner that
could reasonably be expected to have a Material Adverse Effect.
4.4. Preservation of Marks. Each Assignor agrees to use its Marks in
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interstate commerce during the time in which this Agreement is in effect and to
take all such other actions as are necessary to preserve such Marks as
trademarks or service marks under the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at its own
---------------------------
expense, diligently process all documents required to maintain trademark
registrations, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all of its significant registered Marks, and shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of
all administrative and judicial remedies without prior written consent of the
Collateral Agent (other than with respect to registrations and applications
deemed by such Assignor to be no longer prudent to pursue).
4.6. Future Registered Marks. If any ▇▇▇▇ registration is issued
-----------------------
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and an assignment for security in such ▇▇▇▇, to the
Collateral Agent and at the expense of such Assignor, confirming the assignment
for security in such ▇▇▇▇ to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof or in such other form
as may be reasonably satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be continuing,
--------
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks, together with all
trademark rights and rights of protection to the same, vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such rights,
title and interest shall immediately vest, in the Collateral Agent for the
benefit of the Secured Creditors, and the Collateral Agent shall be entitled to
exercise the power of attorney referred to in Section 4.1 hereof to execute,
cause to be acknowledged and notarized and record said absolute assignment with
the applicable agency; (ii) take and use or sell the Marks and the goodwill of
such Assignor's business symbolized by the Marks and the right to carry on the
business and use the assets of such Assignor in connection with which the Marks
have been used; and (iii) direct such Assignor to refrain, in which event such
Assignor shall refrain, from using the Marks in any manner whatsoever, directly
or indirectly, and such Assignor shall execute such further documents that the
Collateral Agent may reasonably request to further confirm this and to
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transfer ownership of the Marks and registrations and any pending trademark
application in the United States Patent and Trademark Office to the Collateral
Agent.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
-----------------------------------------
represents and warrants that it is the true and lawful owner of all rights in
(i) all United States trade secrets and proprietary information necessary to
operate the business of the Assignor (the "Trade Secret Rights"), (ii) the
Patents listed in Annex E hereto for such Assignor and that said Patents include
all the United States patents and applications for United States patents that
such Assignor owns as of the date hereof and (iii) the Copyrights listed in
Annex F hereto for such Assignor and that said Copyrights constitute all the
United States copyrights registered with the United States Copyright Office and
applications to United States copyrights that such Assignor owns as of the date
hereof. Each Assignor further warrants that it has no knowledge of any third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any patent or such Assignor has
misappropriated any trade secret or proprietary information which, either
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an
absolute power of attorney to sign, upon the occurrence and during the
continuance of any Event of Default, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Patent, and to record the
same.
5.2. Licenses and Assignments. Except as otherwise permitted by the
------------------------
Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any
right under any Patent or Copyright acquired after the date hereof absent prior
written approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon learning
-------------
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe in any Patent or
Copyright or to any claim that the practice of any Patent or use of any
Copyright violates any property right of a third party, or with respect to any
misappropriation of any Trade Secret Right or any claim that practice of any
Trade Secret Right violates any property right of a third party in any manner
which, either individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. Each Assignor further agrees, absent direction
of the Collateral Agent to the contrary, to diligently prosecute any Person
infringing any Patent or Copyright or any Person misappropriating any Trade
Secret Right, in each case to the extent that such infringement or
misappropriation could reasonably be expected to have a Material Adverse Effect.
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5.4. Maintenance of Patents or Copyright. At its own expense, each
-----------------------------------
Assignor shall make timely payment of all post-issuance fees required pursuant
to 35 U.S.C. (S) 41 to maintain in force its rights under each Patent or
Copyright, absent prior written consent of the Collateral Agent.
5.5. Prosecution of Patent Applications. At its own expense, each
----------------------------------
Assignor shall diligently prosecute all significant applications for (i) United
States Patents listed in Annex E hereto and (ii) Copyrights listed on Annex F
hereto, in each case for such Assignor and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies
(other than applications deemed by such Assignor to be no longer prudent to
pursue), absent written consent of the Collateral Agent.
5.6. Other Patents and Copyrights. Within 30 days of the acquisition
----------------------------
or issuance of a United States Patent, registration of a Copyright, or
acquisition of a registered Copyright, or of filing of an application for a
United States Patent or Copyright, the relevant Assignor shall deliver to the
Collateral Agent a copy of said Copyright or certificate or registration of, or
application therefor, said Patents, as the case may be, with an assignment for
security as to such Patent or Copyright, as the case may be, to the Collateral
Agent and at the expense of such Assignor, confirming the assignment for
security, the form of such assignment for security to be substantially the same
as the form hereof or in such other form as may be reasonably satisfactory to
the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be continuing,
--------
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such further
documents as the Collateral Agent may reasonably request further to confirm this
and to transfer ownership of the Patents and Copyrights to the Collateral Agent
for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor will
-----------------------------------------
do nothing to impair the rights of the Collateral Agent in the Collateral in any
material respect. Each Assignor will at all times keep its Inventory and
Equipment insured in favor of the Collateral Agent, at such Assignor's own
expense to the extent and in the manner provided in the Credit Agreement.
Page 12
Except to the extent otherwise permitted to be retained by such Assignor or
applied by such Assignor pursuant to the terms of the Credit Agreement, the
Collateral Agent shall, at the time any proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4 hereof. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-negotiable. To the extent practicable,
---------------------------------
each Assignor agrees that if any warehouse receipt or receipt in the nature of a
warehouse receipt is issued with respect to any of its Inventory, such Assignor
shall request that such warehouse receipt or receipt in the nature thereof shall
not be "negotiable" (as such term is used in Section 7-104 of the Uniform
Commercial Code as in effect in any relevant jurisdiction or under other
relevant law).
6.3. Further Actions. Each Assignor will, at its own expense and
---------------
upon the reasonable request of the Collateral Agent, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
lists, descriptions and designations of its Collateral, warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, certificates, reports and other
assurances or instruments and take such further steps relating to the Collateral
and other property or rights covered by the security interest hereby granted,
which the Collateral Agent deems reasonably appropriate or advisable to perfect,
preserve or protect its security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
--------------------
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are reasonably necessary or desirable in the
opinion of the Collateral Agent to establish and maintain a valid, enforceable,
first priority perfected security interest in the Collateral as provided herein
and the other rights and security contemplated hereby all in accordance with the
UCC as enacted in any and all relevant jurisdictions or any other relevant law.
Each Assignor will pay any applicable filing fees, recordation taxes and related
expenses relating to its Collateral. Each Assignor hereby authorizes the
Collateral Agent to file any such financing statements without the signature of
such Assignor where permitted by law.
6.5. FCC Licenses; etc. Each Assignor agrees to take any and all
------------------
necessary and appropriate commercially reasonable actions to preserve the FCC
Licenses and the Governmental Authorizations and to otherwise prevent any
modification, revocation, suspension, cancellation, or refusal by the FCC or
other applicable governmental authority to renew any of the FCC Licenses or
Governmental Authorizations except to the extent such modification, revocation,
suspension, cancellation or refusal could not reasonably be expected to have a
Material Adverse Effect. To that end, each Assignor shall execute any and all
documents required by the FCC or
Page 13
any other governmental authority or reasonably requested by the Borrower or the
Collateral Agent, and to provide any information with its possession reasonably
requested by any of the foregoing, to ensure that any and all applications,
reports, and other filings are made with the FCC or any other governmental
authority in a timely fashion and that no action is taken by the FCC, any court,
or any governmental authority which could have a material adverse effect on any
of the FCC Licenses.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
-----------------------------------------------
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under any UCC, and such additional rights and remedies to which a
secured creditor is entitled under the laws in effect, in all relevant
jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or any
other Person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument or
other obligation (including, without limitation, the Receivables and the
Contracts) constituting the Collateral to make any payment required by the
terms of such agreement, instrument or other obligation directly to the
Collateral Agent and may exercise any and all remedies of such Assignor in
respect of such Collateral;
(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the Collateral
or any part thereof in accordance with Section 7.2 hereof, or direct the
relevant Assignor to sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof, and, in each case, take possession of the
proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any reasonable place or places designated by the
Collateral Agent, in which event such Assignor shall at its own expense:
Page 14
(x) forthwith cause the same to be moved to the place or places
so designated by the Collateral Agent and there delivered to the
Collateral Agent;
(y) store and keep any Collateral so delivered to the Collateral
Agent at such place or places pending further action by the Collateral
Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to protect
the same and to preserve and maintain them in good condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for such
term and on such conditions and in such manner as the Collateral Agent
shall in its sole judgment determine;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. By
accepting the benefits of this Agreement, the Secured Creditors agree that this
Agreement may be enforced only by the action of the Collateral Agent acting upon
the instructions of the Required Secured Creditors and that no other Secured
Creditor shall have any right individually to seek to enforce this Agreement or
to realize upon the security to be granted hereby, it being understood and
agreed that such rights and remedies may be exercised by the Collateral Agent
for the benefit of the Secured Creditors upon the terms of this Agreement and
the Credit Agreement.
7.2. Remedies; Disposition of the Collateral. If any Event of
---------------------------------------
Default shall have occurred and be continuing, then any Collateral repossessed
by the Collateral Agent under or pursuant to Section 7.1 hereof and any other
Collateral whether or not so repossessed by the Collateral Agent, may be sold,
assigned, leased or otherwise disposed of under one or more contracts or as an
entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law (including, in the
case of any disposition of the FCC Licenses or transfer of control thereof, the
Communications Act and the FCC Rules), determine to be commercially reasonable
and each Assignor agrees that the FCC Licenses and other Governmental
Authorizations are, in such event, to be transferred or assigned together with
such Collateral. Subject to, in the case of any disposition of the FCC Licenses
or transfer of control thereof, receipt of any approvals required under the
Communications Act or the FCC Rules, any of the Collateral may be sold, leased
or otherwise disposed of, in the condition in which the same existed when taken
by the Collateral Agent or after any overhaul or repair at the expense of the
relevant Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not
Page 15
less than 10 days' prior written notice to the relevant Assignor specifying the
time at which such disposition is to be made and the intended sale price or
other consideration therefor, and shall be subject, for the 10 days after the
giving of such notice, to the right of the relevant Assignor or any nominee of
such Assignor to acquire the Collateral involved at a price or for such other
consideration at least equal to the intended sale price or other consideration
so specified. Any such disposition which shall be a public sale permitted by
such requirements shall be made upon not less than 10 days' prior written notice
to the relevant Assignor specifying the time and place of such sale and, in the
absence of applicable requirements of law, shall be by public auction (which
may, at the Collateral Agent's option, be subject to reserve), after publication
of notice of such auction (where required by applicable law) not less than 10
days prior thereto. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the sale may be so adjourned. To the
extent permitted by any such requirement of law, the Collateral Agent may bid
for and become the purchaser of the Collateral or any item thereof, offered for
sale in accordance with this Section without accountability to the relevant
Assignor. If, under mandatory requirements of applicable law, the Collateral
Agent shall be required to make disposition of the Collateral within a period of
time which does not permit the giving of notice to the relevant Assignor as
hereinabove specified, the Collateral Agent need give such Assignor only such
notice of disposition as shall be reasonably practicable in view of such
mandatory requirements of applicable law. Each Assignor agrees to do or cause to
be done all such other acts and things as may be reasonably necessary to make
such sale or sales of all or any portion of the Collateral valid and binding and
in compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees or awards of any and all courts, arbitrators or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this
----------------
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives,
to the extent permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
Page 16
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
-----------------------
Collateral Agent (or, to the extent the Pledge Agreement, any Mortgage or any
Additional Security Document require proceeds of collateral under such other
Security Document to be applied in accordance with the provisions of this
Agreement, the Pledgee or Collateral Agent under such other Security Document)
upon any sale or other disposition of the Collateral, together with all other
moneys received by the Collateral Agent hereunder, shall be applied as follows.
(i) first, to the payment of all amounts owing the Collateral Agent
of the type described in clauses (iii) and (iv) of the definition of
"Obligations";
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Primary Obligations shall be paid to the Secured Creditors as provided in
Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal
to such outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full all such Primary Obligations, its Pro Rata
Share of the amount remaining to be distributed;
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii), an amount equal to the
outstanding Secondary Obligations shall be paid to the Secured Creditors as
provided in Section 7.4(e) hereof, with each Secured Creditor receiving an
amount equal to its outstanding Secondary Obligations or, if the proceeds
are insufficient to pay in full all such Secondary Obligations, its Pro
Rata Share of the amount remaining to be distributed; and
(iv) fourth, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) through (iii), inclusive, and
following the termination of this Agreement pursuant to Section 10.8(a)
hereof, to the relevant Assignor or to whomever may be lawfully entitled to
receive such surplus.
(b) For purposes of this Agreement, (x) "Pro Rata Share" shall mean,
when calculating a Secured Creditor's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such
Page 17
Secured Creditor's Primary Obligations or Secondary Obligations, as the case may
be, and the denominator of which is the then outstanding amount of all Primary
Obligations or Secondary Obligations, as the case may be, (y) "Primary
Obligations" shall mean (i) in the case of the Credit Document Obligations, all
principal of, premium, fees and interest on, all Loans, all Unpaid Drawings and
all Fees and (ii) in the case of the Other Obligations, all amounts due under
such Interest Rate Protection Agreements or Other Hedging Agreements (other than
indemnities, fees (including, without limitation, attorneys' fees) and similar
obligations and liabilities) and (z) "Secondary Obligations" shall mean all
Obligations other than Primary Obligations.
(c) When payments to Secured Creditors are based upon their respective
Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall
be applied (for purposes of making determinations under this Section 7.4 only)
(i) first, to their Primary Obligations and (ii) second, to their Secondary
Obligations. If any payment to any Secured Creditor of its Pro Rata Share of
any distribution would result in overpayment to such Secured Creditor, such
excess amount shall instead be distributed in respect of the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of the other Secured
Creditors, with each Secured Creditor whose Primary Obligations or Secondary
Obligations, as the case may be, have not been paid in full to receive an amount
equal to such excess amount multiplied by a fraction the numerator of which is
the unpaid Primary Obligations or Secondary Obligations, as the case may be, of
such Secured Creditor and the denominator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) Each of the Secured Creditors, by their acceptance of the benefits
hereof, agrees and acknowledges that if the Lender Creditors are to receive a
distribution on account of undrawn amounts with respect to Letters of Credit
issued under the Credit Agreement (which shall only occur after all outstanding
Loans and Unpaid Drawings with respect to such Letters of Credit have been paid
in full), such amounts shall be paid to the Administrative Agent under the
Credit Agreement and held by it, for the equal and ratable benefit of the Lender
Creditors, as cash security for the repayment of Obligations owing to the Lender
Creditors as such. If any amounts are held as cash security pursuant to the
immediately preceding sentence, then upon the termination of all outstanding
Letters of Credit, and after the application of all such cash security to the
repayment of all Obligations owing to the Lender Creditors after giving effect
to the termination of all such Letters of Credit, if there remains any excess
cash, such excess cash shall be returned by the Administrative Agent to the
Collateral Agent for distribution in accordance with Section 7.4(a) hereof.
(e) All payments required to be made hereunder shall be made (x) if to
the Lender Creditors, to the Administrative Agent under the Credit Agreement for
the account of the Lender Creditors, and (y) if to the Other Creditors, to the
trustee, paying agent or other similar representative (each a "Representative")
for the Other Creditors or, in the absence of such a Representative, directly to
the Other Creditors.
Page 18
(f) For purposes of applying payments received in accordance with this
Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Representative for
the Other Creditors or, in the absence of such a Representative, upon the Other
Creditors for a determination (which the Administrative Agent, each
Representative for any Other Creditors and the Secured Creditors agree (or shall
agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Lender Creditor or an Other Creditor)
to the contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
from an Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Other Hedging Agreements are in existence.
(g) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the aggregate amount of the Obligations.
7.5. Remedies Cumulative. Each and every right, power and remedy
-------------------
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, the other
Secured Debt Agreements or now or hereafter existing at law, in equity or by
statute and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time or simultaneously
and as often and in such order as may be deemed expedient by the Collateral
Agent. All such rights, powers and remedies shall be cumulative and the
exercise or the beginning of the exercise of one shall not be deemed a waiver of
the right to exercise any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no
renewal or extension of any of the Obligations shall impair any such right,
power or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit
to enforce any of its rights hereunder and shall be entitled to judgment, then
in such suit the Collateral Agent may recover reasonable expenses, including
reasonable attorneys' fees, and the amounts thereof shall be included in such
judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent
-----------------------------
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to
Page 19
the security interest created under this Agreement, and all rights, remedies and
powers of the Collateral Agent shall continue as if no such proceeding had been
instituted.
7.7. Actions Requiring FCC Approval. (a) Notwithstanding anything
------------------------------
to the contrary contained in this Agreement, or any of the documents executed
pursuant hereto, the Collateral Agent will not take any action pursuant to this
Agreement, or any such documents, which would constitute or result in any
assignment or transfer of any FCC License if such control would require under
then existing law (including the Communications Act or the FCC Rules) the prior
approval of the FCC, without first obtaining such approval. In connection with
this Section 7.7, the Collateral Agent shall be entitled to rely upon the advice
of FCC counsel of the Collateral Agent's choice with respect to such assignment
or transfer (including to determine whether any such assignment or transfer has
occurred or will occur and whether or not prior approval of the FCC is required)
whether or not the advice rendered is ultimately determined to have been
accurate.
(b) If an Event of Default shall have occurred and be continuing, each
Assignor shall take any action which the Collateral Agent may request in the
exercise of its rights and remedies under this Agreement in order to transfer or
assign the Collateral to the Collateral Agent or to such one or more third
parties as the Collateral Agent may designate, or to a combination of the
foregoing, including the assignment or transfer of the FCC Licenses. To enforce
the provisions of this Section 7.7 after an Event of Default shall have occurred
and be continuing, the Collateral Agent is empowered to request, and each
Assignor hereby agrees to authorize, the appointment of a receiver or trustee
from any court of competent jurisdiction. Such receiver or trustee shall be
instructed to seek from the FCC (and any other governmental authority) such
consent or approval as may be required by the Communications Act and the FCC
Rules for any assignment of the assets of or transfer of control of any or all
of the FCC Licenses or other Governmental Authorizations or any Person whose
stock, partnership interest or other equity interest is subject to this
Agreement to the extent required for such trustee or receiver to assume such
control for the purpose of seeking a bona fide purchaser to whom such FCC
Licenses or other Governmental Authorizations or Collateral will be assigned or
control of such entity ultimately will be transferred. Each Assignor agrees, at
such Assignor's cost and expense, to cooperate with any such trustee or
receiver, or at such trustee's or receiver's direction, such purchaser and with
the Collateral Agent in the preparation, execution and filing of any
applications or other documents and providing any information that may be
necessary or helpful in obtaining the consent of the FCC (or other governmental
authorities) to the assignment or transfer to such trustee or receiver, or at
such trustee's or receiver's direction, such purchaser of the FCC Licenses or
other governmental authorizations or Collateral. To the fullest extent
permitted under applicable law, each Assignor hereby agrees to consent to and
authorize any such transfer of control upon the request of the Collateral Agent
after the occurrence of and during the continuation of an Event of Default and,
without limiting any rights of the Collateral Agent under this Agreement, to
authorize the Collateral Agent to nominate a trustee or receiver to assume
control of the Collateral, subject only to any required consent, approval or
order of a court of competent jurisdiction, the FCC or other governmental
authorities, for the purposes of
Page 20
effectuating the transactions contemplated in this Section 7.7(b). Such trustee
or receiver shall have all the rights and powers as provided to it by law, court
order or to the Collateral Agent under this Agreement. Each Assignor shall
cooperate fully and use its best efforts in obtaining the consent of the FCC and
the approval or consent of each other governmental authority required to
effectuate the foregoing.
(c) Each Assignor shall use its best efforts to assist in obtaining
the consent or approval of the FCC, any court, and any other governmental
authority, if required, for any action or transaction contemplated by this
Agreement, including, without limitation, the preparation, execution and filing
with the FCC of the transferor's or assignor's portion of any application or
applications for consent to the transfer of control or assignment necessary or
appropriate under the FCC's policies, rules and regulations for approval of the
transfer or assignments of all or any portion of the Collateral.
(d) Each Assignor hereby acknowledges and agrees that the Collateral
consists of unique assets and that a violation of such Assignor's covenant to
cooperate with respect to the obtainment of any regulatory consents would result
in irreparable harm to the Collateral Agent for which monetary damages are not
readily ascertainable. Each Assignor further agrees that, because of the unique
nature of its undertakings in this Section 7.7, the same may be specifically
enforced, and such Assignor hereby waives, and agrees to waive, any claim or
defense that the Collateral Agent would have an adequate remedy at law for the
breach of such undertakings and any requirement for posting of a bond or other
certificate.
(e) Without limiting the obligations of any Assignor hereunder in any
respect, each Assignor further agrees that if such Assignor upon or after the
occurrence and during the continuance of an Event of Default, should fail or
refuse to execute any application or other document necessary or appropriate to
obtain any governmental consent necessary or appropriate for the exercise of any
right of the Collateral Agent hereunder, such Assignor agrees that, to the
fullest extent permitted by the Communications Act and the FCC Rules, such
application or other document may be executed on such Assignor's behalf by the
clerk of any court or other forum in any competent jurisdiction without notice
to such Assignor.
(f) This Section 7.7 shall not limit any other rights of the
Collateral Agent or the other Secured Creditors available under applicable law
and consistent with the Communications Act and the FCC Rules.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees to
---------
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective
Page 21
successors, permitted assigns, employees and agents (hereinafter in this Section
8.1 referred to individually as "Indemnitee," and collectively as "Indemnitees")
harmless from any and all liabilities, obligations, damages, injuries,
penalties, claims, demands, actions, suits, judgments and any and all costs,
expenses or disbursements (including reasonable attorneys' fees and expenses)
(for the purposes of this Section 8.1 the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any other Secured Debt Agreement or any other document executed in
connection herewith or therewith or in any other way connected with the
administration of the transactions contemplated hereby or thereby or the
enforcement of any of the terms of, or the preservation of any rights under any
thereof, or in any way relating to or arising out of the manufacture, ownership,
ordering, purchase, delivery, control, acceptance, lease, financing, possession,
operation, condition, sale, return or other disposition, or use of the
Collateral (including, without limitation, latent or other defects, whether or
not discoverable), the violation of the laws of any country, state or other
governmental body or unit, any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage), or contract claim; provided that no Indemnitee shall be indemnified
pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent
caused by the gross negligence or willful misconduct of such Indemnitee. Each
Assignor agrees that upon written notice by any Indemnitee of the assertion of
such a liability, obligation, damage, injury, penalty, claim, demand, action,
suit or judgment, the relevant Assignor shall assume full responsibility for the
defense thereof. Each Indemnitee agrees to use its best efforts to promptly
notify the relevant Assignor of any such assertion of which such Indemnitee has
knowledge.
(b) Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b) hereof,
each Assignor agrees, jointly and severally, to pay, indemnify and hold each
Indemnitee harmless from and against any loss, costs, damages and expenses which
such Indemnitee may suffer, expend or incur in consequence of or growing out of
any misrepresentation by any Assignor in this Agreement, any other Secured Debt
Agreement or in any writing contemplated by or made or delivered pursuant to or
in connection with this Agreement or any other Secured Debt Agreement.
Page 22
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
-----------------------------------------------------
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the full payment of all the Notes issued,
and loans made under the Credit Agreement, the termination of all Interest Rate
Protection Agreements, Other Hedging Agreements and Letters of Credit and the
payment of all other Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the recitals
of this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower" shall have the meaning provided in the recitals of this
Agreement.
"Cash Collateral Account" shall mean a cash collateral account
maintained with, and in the sole dominion and control of, the Collateral Agent
for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of this
Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
Page 23
"Contract Rights" shall mean all rights of any Assignor under each
Contract, including, without limitation, (i) any and all rights to receive and
demand payments under any or all Contracts, (ii) any and all rights to receive
and compel performance under any or all Contracts and (iii) any and all other
rights, interests and claims now existing or in the future arising in connection
with any or all Contracts.
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, any Interest Rate
Protection Agreements or Other Hedging Agreements, any Operating Agreements and
any partnership agreements, joint venture agreements and limited liability
company agreements), but excluding any contract to the extent that (but only as
long as) the terms thereof prohibit the assignment of, or granting a security
interest in, such contract (it being understood and agreed, however, (i) that
notwithstanding the foregoing, all rights to payment for money due or to become
due pursuant to any such excluded contract shall be subject to the security
interests created by this Agreement and (ii) such excluded contract shall
otherwise be subject to the security interests created by this Agreement upon
receiving any necessary approvals or waivers permitting the assignment thereof).
"Copyrights" shall mean any United States copyright owned by any
Assignor, including any registrations of any Copyrights, in the United States
Copyright Office or any foreign equivalent office, as well as any application
for a copyright registration now or hereafter made with the United States
Copyright Office or any foreign equivalent office by any Assignor.
"Credit Agreement" shall have the meaning provided in the recitals of
this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time, or
both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, fixtures and
vehicles now or hereafter owned by any Assignor and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
Page 24
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event include, without
limitation, any payment default on any of the Other Obligations after the
expiration of any applicable grace period.
"FCC License" shall have the meaning provided in Section 1.1 of this
Agreement.
"FCC Rules" shall mean the policies, rules and regulations of the FCC
and the Communications Act.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York (and
shall include all partnership interests and all limited liability company and
membership interests).
"Goods" shall have the meaning provided in the Uniform Commercial Code
as in effect on the date hereof in the State of New York.
"Governmental Authorizations" shall mean, in addition to all FCC
Licenses, all licenses, certificates, registrations and authorizations issued by
any governmental entity (domestic and foreign) necessary to operate each
Assignor's business.
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same, in all stages of production -- from raw materials through work-
in-process to finished goods -- and all products and proceeds of whatever sort
and wherever located and any portion thereof which may be returned, rejected,
reclaimed or repossessed by the Collateral Agent from any Assignor's customers,
and shall specifically include all "inventory" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor.
"Investment Property" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Lender Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Lenders" shall have the meaning provided in the recitals of this
Agreement.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
Page 25
"Marks" shall mean all right, title and interest in and to any
trademarks, service marks and trade names now held or hereafter acquired by any
Assignor, including any registration of any trademarks and service marks in the
United States Patent and Trademark Office or in any equivalent foreign office
and any trade dress including logos and/or designs used by any Assignor.
"Obligations" shall mean (i) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations and indebtedness (including, without limitation, indemnities, Fees
and interest thereon) of each Assignor to the Lender Creditors, whether now
existing or hereafter incurred under, arising out of, or in connection with the
Credit Agreement and the other Credit Documents to which such Assignor is a
party (including, in the case of each Subsidiary Guarantor, all such obligations
and indebtedness of such Subsidiary Guarantor under the Subsidiaries Guaranty)
and the due performance and compliance by such Assignor with all of the terms,
conditions and agreements contained in the Credit Agreement and in such other
Credit Documents (all such obligations and liabilities under this clause (i),
except to the extent consisting of obligations or indebtedness with respect to
Interest Rate Protection Agreements or Other Hedging Agreements, being herein
collectively called the "Credit Document Obligations"); (ii) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations and liabilities owing by such Assignor to the Other Creditors
under, or with respect to (including by reason of the Subsidiaries Guaranty),
any Interest Rate Protection Agreement or Other Hedging Agreement, whether such
Interest Rate Protection Agreement or Other Hedging Agreement is now in
existence or hereafter arising, and the due performance and compliance by such
Assignor with all of the terms, conditions and agreements contained therein (all
such obligations and liabilities described in this clause (ii) being herein
collectively called the "Other Obligations"); (iii) any and all sums advanced by
the Assignee in order to preserve the Collateral or preserve its security
interest in the Collateral; (iv) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or liabilities of
such Assignor referred to in clauses (i) and (ii) above, after an Event of
Default shall have occurred and be continuing, the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or otherwise disposing
of or realizing on the Collateral, or of any exercise by the Assignee of its
rights hereunder, together with reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Indemnitee as to which such Indemnitee has the right
to reimbursement under Section 8.1 of this Agreement; it being acknowledged and
agreed that the "Obligations" shall include extensions of credit of the types
described above, whether outstanding on the date of this Agreement or extended
from time to time after the date of this Agreement.
"Other Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Other Obligations" shall have the meaning provided in the definition
of "Obligations" in this Article IX.
Page 26
"Patents" shall mean any patent to which any Assignor now or hereafter
has title and any divisions or continuations thereof, as well as any application
for a patent now or hereafter made by any Assignor.
"Permits" shall mean, to the extent permitted to be assigned by the
terms thereof or by applicable law, all licenses, permits, rights, orders,
variances, franchises or authorizations (including Governmental Authorizations)
of or from any governmental authority or agency.
"Primary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b) of
this Agreement.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined in the
Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (b) all of any Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Representative shall have the meaning provided in Section 7.4(e) of
this Agreement.
Page 27
"Required Secured Creditors" shall mean (i) the Required Lenders (or,
to the extent required by Section 13.12 of the Credit Agreement, each of the
Lenders) under the Credit Agreement so long as any Credit Document Obligations
remain outstanding and (ii) in any situation not covered by the preceding clause
(i), the holders of a majority of the outstanding principal amount of the Other
Obligations.
"Requisite Creditors" shall have the meaning provided in Section 10.2
of this Agreement.
"Secondary Obligations" shall have the meaning provided in Section
7.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals of
this Agreement.
"Secured Debt Agreements" shall mean and include this Agreement, the
other Credit Documents and the Interest Rate Protection Agreements and Other
Hedging Agreements.
"Termination Date" shall have the meaning provided in Section 10.8 of
this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section 5.1
of this Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the relevant jurisdiction.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all notices,
-------
requests, demands or other communications to or upon the respective parties
hereto shall be sent or delivered by mail, telegraph, telex, telecopy, cable or
overnight courier service and all such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier and when mailed shall be effective three Business Days
following deposit in the mail with proper postage, except that notices and
communications to the Collateral Agent or any Assignor shall not be effective
until received by the Collateral Agent or such Assignor, as the case may be.
All notices and other communications shall be in writing and addressed as
follows:
(a) if to any Assignor, at:
Page 28
c/o IDT Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Collateral Agent, at:
Bankers Trust Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tel. No.: (▇▇▇) ▇▇▇-▇▇▇▇
Fax. No.: (▇▇▇) ▇▇▇-▇▇▇▇;
(c) if to any Lender Creditor, at such address as such Lender Creditor
shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
10.2. Waiver; Amendment. None of the terms and conditions of this
-----------------
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by each Assignor directly effected thereby and the
Collateral Agent (with the written consent of the Required Secured Creditors);
provided, however, that any change, waiver, modification or variance affecting
-------- -------
the rights and benefits of a single Class of Secured Creditors (and not all
Secured Creditors in a like or similar manner) shall require the written consent
of the Requisite Creditors of such affected Class. For the purpose of this
Agreement, the term "Class" shall mean each class of Secured Creditors, i.e.,
----
whether (x) the Lender Creditors as holders of the Credit Document Obligations
or (y) the Other Creditors as the holders of the Other Obligations. For the
purpose of this Agreement, the term "Requisite Creditors" of any Class shall
mean each of (x) with respect to the Credit Document Obligations, the Required
Lenders and (y) with respect to the Other Obligations, the holders of at least a
majority of all obligations outstanding from time to time under the respective
Interest Rate Protection Agreements or Other Hedging Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
--------------------
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement;
Page 29
or (c) any amendment to or modification of any Secured Debt Agreement or any
security for any of the Obligations; whether or not such Assignor shall have
notice or knowledge of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding upon
----------------------
each Assignor and its successors and assigns (although no Assignor may assign
its rights and obligations hereunder except in accordance with the provisions of
the Secured Debt Agreements) and shall inure to the benefit of the Collateral
Agent and the Secured Creditors and their respective successors and assigns.
All agreements, statements, representations and warranties made by each Assignor
herein or in any certificate or other instrument delivered by such Assignor or
on its behalf under this Agreement shall be considered to have been relied upon
by the Secured Creditors and shall survive the execution and delivery of this
Agreement and the other Secured Debt Agreements regardless of any investigation
made by the Secured Creditors or on their behalf.
10.5. Headings Descriptive. The headings of the several sections of
--------------------
this Agreement are inserted for convenience only and shall not in any way affect
the meaning or construction of any provision of this Agreement.
10.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
-------------
OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything herein
-----------------
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of any Assignor under or with
respect to any Collateral.
10.8. Termination; Release. (a) After the Termination Date, this
--------------------
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Interest Rate Protection Agreements and Other Hedging
Agreements have been terminated, no Note is outstanding (and all Loans have been
repaid in full), all Letters of Credit have been terminated and all Obligations
then due and payable have been paid in full.
Page 30
(b) In the event that any part of the Collateral is sold in connection
with a sale permitted by Section 9.02 of the Credit Agreement (other than a sale
to any Assignor or a Subsidiary thereof) or otherwise released at the direction
of the Required Secured Creditors and the proceeds of such sale or sales or from
such release are applied in accordance with the provisions of the Credit
Agreement, to the extent required to be so applied, such Collateral will be sold
free and clear of the Liens created by this Agreement and the Collateral Agent,
at the request and expense of the relevant Assignor, will duly and promptly
assign, transfer and deliver to such Assignor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold or released and as may be in the possession of the Collateral
Agent and has not theretofore been released pursuant to this Agreement.
(c) At any time that an Assignor desires that the Collateral Agent
take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall deliver to
the Collateral Agent a certificate signed by a senior officer of such Assignor
stating that the release of the respective Collateral is permitted pursuant to
Section 10.8(a) or (b).
10.9. Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with each Assignor and the
Collateral Agent.
10.10. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.11. The Collateral Agent. The Collateral Agent will hold in
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accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the obligations
of the Collateral Agent as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement and in Section 12 of the Credit
Agreement. The Collateral Agent shall act hereunder and thereunder on the terms
and conditions set forth herein and in Section 12 of the Credit Agreement.
10.12. Benefit of Agreement. This Agreement shall be binding upon
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the parties hereto and their respective successors and assigns and shall inure
to the benefit of and be enforceable by each of the parties hereto and its
successors and assigns.
10.13. Additional Assignors. It is understood and agreed that any
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Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall become an
Assignor hereunder by executing a counterpart hereof and delivering the same to
the Collateral Agent.
Page 31
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
IDT CORPORATION,
as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
IDT INTERNATIONAL, CORP., as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
IDT INTERNET SERVICES, INC., as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
MEDIA RESPONSE, INC., as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
YOVELLE RENAISSANCE CORPORATION, as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
NUESTRA VOZ DIRECT INC., as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇., as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
DIPCHIP CORP., as a Pledgor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
INTEREXCHANGE, INC., as a Pledgor
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Secretary
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Collateral Agent, Pledgee
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: Principal