BORROWER SECURITY AND PLEDGE AGREEMENT
This BORROWER SECURITY AND PLEDGE AGREEMENT (as amended, supplemented,
amended and restated or otherwise modified from time to time, this "Security
and Pledge Agreement"), dated as of January 29, 1999, is made by NEXTEL
PARTNERS OPERATING CORP., a Delaware corporation (the "Grantor"), in favor of
BANK OF MONTREAL, as administrative agent (together with its successor(s)
thereto in such capacity, the "Administrative Agent") for each of the Secured
Parties (as defined below).
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of January 29, 1999 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Grantor, the various financial
institutions as are, or may from time to time become, parties thereto (each,
individually, a "Lender", and, collectively, the "Lenders"), DLJ Capital
Funding, Inc., as the syndication agent, The Bank of New York, as the
documentation agent and the Administrative Agent, the Lenders and the Issuer
have extended Commitments to make Credit Extensions to the Grantor;
WHEREAS, as a condition precedent to the making of the Credit Extensions
(including the initial Credit Extension) under the Credit Agreement, the
Grantor is required to execute and deliver this Security and Pledge Agreement;
and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security and Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the
Lenders and the Issuer to make Credit Extensions (including the initial Credit
Extension) to the Grantor pursuant to the Credit Agreement, the Grantor agrees,
for the benefit of each Secured Party, as follows:
ARTICLE
DEFINITIONS
SECTION 1.1 Certain Terms. The following terms (whether or not
underscored) when
used in this Security and Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Cash Collateral" means an amount of cash and Cash Equivalent Investments
at least equal to the Required Balance which shall be held in the Cash Account
pursuant to the terms hereof.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in Section 4.4(c).
"Commodity Account" means an account maintained by a Commodity
Intermediary in which a Commodity Contract is carried out for a Commodity
Customer.
"Commodity Contract" means a commodity futures contract, an option on a
commodity futures contract, a commodity option or any other contract that, in
each case, is (a) traded on or subject to the rules of a board of trade that
has been designated as a contract market for such a contract pursuant to the
federal commodities laws or (b) traded on a foreign commodity board of trade,
exchange or market, and is carried on the books of a Commodity Intermediary for
a Commodity Customer.
"Commodity Customer" means a Person for whom a Commodity Intermediary
carries a Commodity Contract on its books.
"Commodity Intermediary" means (a) a Person who is registered as a futures
commission merchant under the federal commodities laws or (b) a Person who in
the ordinary course of business provides clearance or settlement services for a
board of trade that has been designated as a contract market pursuant to
federal commodities laws.
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral
devices and other related computer hardware;
(b) all software programs (including both source code, object code
and all related applications and data files), whether now owned, licensed
or leased or hereafter acquired by the Grantor, designed for use on the
computers and electronic data processing
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hardware described in clause (a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding clauses (a) through (c);
and
(e) all rights with respect to all of the foregoing, including any
and all copyrights, licenses, options, warranties, service contracts,
program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of the
foregoing.
"Control Agreement" means an agreement in form and substance satisfactory
to the Administrative Agent which provides for the Administrative Agent to have
"control" (as defined in Section 8-106 of the U.C.C., as such term relates to
Investment Property (other than certificated Securities or Commodity
Contracts), or as used in Section 9-115(e) of the U.C.C., as such term relates
to Commodity Contracts).
"Copyright Collateral" means all copyrights of the Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor's right, title and interest
in and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including the copyrights referred to in
Item A of Schedule IV attached hereto, and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to in Item B of Schedule IV attached hereto,
the right to xxx for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and renewals
of any thereof and all proceeds of the foregoing, including licenses,
royalties, income, payments, claims, damages and proceeds of suit.
"Credit Agreement" is defined in the first recital.
"Distributions" means all stock dividends, liquidating dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Securities constituting Collateral,
but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Securities constituting Collateral made in the ordinary course of business
and not a liquidating dividend.
"Entitlement Holder" means a Person identified in the records of a
Securities Intermediary as the Person having a Security Entitlement against the
Securities Intermediary. If a Person
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acquires a Security Entitlement by virtue of Section 8-501(b)(2) or (3) of the
U.C.C., such Person is the Entitlement Holder.
"Equipment" is defined in clause (d) of Section 2.1.
"Financial Asset" means (a) a Security, (b) an obligation of a Person or a
share, participation or other interest in a Person or in property or an
enterprise of a Person, which is, or is of a type, dealt with in or traded on
financial markets, or which is recognized in any area in which it is issued or
dealt in as a medium for investment or (c) any property that is held by a
Securities Intermediary for another Person in a Securities Account if the
Securities Intermediary has expressly agreed with the other Person that the
property is to be treated as a Financial Asset under Article 8 of the U.C.C. As
the context requires, the term Financial Asset shall mean either the interest
itself or the means by which a Person's claims to it is evidenced, including a
certificated or an uncertificated Security, a certificate representing a
Security or a Security Entitlement.
"Grantor" is defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Intercompany Note" means, with respect to the Grantor, as the payee
thereunder, a promissory note substantially in the form of Exhibit A hereto
(with such modifications as the Administrative Agent may consent to, such
consent not to be unreasonably withheld), which promissory note shall evidence
all intercompany loans which may be made from time to time by the Grantor to
any of its Subsidiaries as the maker of such promissory note, as such
promissory note, in accordance with Section 4.2.4, is amended, modified or
supplemented from time to time, together with any promissory note of such maker
taken in extension or renewal thereof or substitution therefor.
"Investment Property" means all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity
Contracts and Commodity Accounts of the Grantor, whether now owned or hereafter
acquired by the Grantor.
"Inventory" is defined in clause (e) of Section 2.1
"Lender" and "Lenders" are defined in the first recital.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and
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including each patent and patent application referred to in Item A of
Schedule II attached hereto;
(b) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
clause (a);
(c) all patent licenses, including each patent license referred to in
Item B of Schedule II attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Schedule II attached hereto, and for
breach or enforcement of any patent license, including any patent license
referred to in Item B of Schedule II attached hereto, and all rights
corresponding thereto throughout the world.
"Perfection Certificate" means a perfection certificate substantially in
the from of Exhibit E hereto.
"Receivables" is defined in clause (f) of Section 2.1.
"Related Contracts" is defined in clause (f) of Section 2.1.
"Secured Party" means, as the context may require, each Lender, the Issuer
and each Agent and each of their respective successors, transferees and
assigns.
"Secured Obligations" is defined in Section 2.2.
"Securities" means any obligations of an issuer or any shares,
participations, or other interests in a Person or in property or an enterprise
of a Person which (a) are represented by a certificate representing a security
in bearer or registered form, or the transfer of which may be registered upon
books maintained for that purpose by or on behalf of such issuer, (b) are one
of a class or series or by its terms is divisible into a class or series of
shares, participations, interests or obligations and (c) (i) are, or are of a
type, dealt with or traded on securities exchanges or securities markets or
(ii) are a medium for investment and by their terms expressly provide that they
are a security governed by Article 8 of the U.C.C.
"Securities Account" means an account to which a Financial Asset is or may
be credited in accordance with an agreement under which the Person maintaining
the account undertakes to treat the Person for whom the account is maintained
as entitled to exercise rights that comprise the Financial Asset.
"Securities Act" is defined in Section 6.2.
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"Security Entitlements" means the rights and property interests of an
Entitlement Holder with respect to a Financial Asset.
"Security and Pledge Agreement" is defined in the preamble.
"Security Intermediary" means (a) a clearing corporation or (b) a Person,
including a bank or broker, that in the ordinary course of its business
maintains securities accounts for others and is acting in that capacity.
"Sub-Agent" means a bank, savings and loan association, credit union or
other similar financial institution that (i) is reasonably acceptable to the
Syndication Agent and (ii) has delivered to the Administrative Agent an
executed Cash Collateral Agreement.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade styles, service marks,
certification marks, collective marks, logos, other source of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (all of the
foregoing items in this clause (a) being collectively called a
"Trademark"), now existing anywhere in the world or hereafter adopted or
acquired, whether currently in use or not, all registrations and
recordings thereof and all applications in connection therewith, whether
pending or in preparation for filing, including registrations, recordings
and applications in the United States Patent and Trademark Office or in
any office or agency of the United States of America or any State thereof
or any foreign country, including those referred to in Item A of Schedule
III attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in Item B of Schedule III attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clause (a) and (b);
(d) all of the goodwill of the business connected with the use of,
and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by the Grantor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, including any Trademark, Trademark
registration or Trademark license referred to in Item A and Item B of
Schedule III attached hereto, or for any injury to the goodwill associated
with the use of any such Trademark or for breach or enforcement of any
Trademark license.
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"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of the Grantor (all of the foregoing being collectively called a
"Trade Secret"), whether or not such Trade Secret has been reduced to a writing
or other tangible form, including all documents and things embodying,
incorporating or referring in any way to such Trade Secret, all Trade Secret
licenses, including each Trade Secret license referred to in Schedule V
attached hereto, and including the right to xxx for and to enjoin and to
collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to time
in the State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise defined herein
or the context otherwise requires, terms used in this Security and Pledge
Agreement, including its preamble and recitals, have the meanings provided in
the Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, terms for which meanings
are provided in the U.C.C. are used in this Security and Pledge Agreement,
including its preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1. Grant of Security. The Grantor hereby assigns, pledges,
hypothecates, charges, mortgages, delivers, and transfers to the Administrative
Agent, for its benefit and the ratable benefit of each of the Secured Parties,
and hereby grants to the Administrative Agent, for its benefit and the ratable
benefit of each of the Secured Parties, a security interest in all of the
following, whether now or hereafter existing or acquired by the Grantor (the
"Collateral"):
(a) all Intercompany Notes in which the Grantor has an interest
(including each Intercompany Note described in Item A of Schedule I
hereto);
(b) all payments of principal, interest and other payments and rights
with respect to each Intercompany Note in which the Grantor has an
interest;
(c) all Investment Property in which the Grantor has an interest
(including the Securities of each issuer described in Item B of Schedule I
hereto);
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(d) all equipment in all of its forms of the Grantor, wherever
located, including all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and
therefor and all accessories related thereto (any and all of the foregoing
being the "Equipment");
(e) all inventory in all of its forms of the Grantor, wherever
located, including
(i) all raw materials and other work in process therefor,
finished goods thereof, and materials used or consumed in the
manufacture or production thereof,
(ii) all goods in which the Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods in
which the Grantor has an interest or right as consignee), and
(iii) all goods which are returned to or repossessed by the
Grantor,
and all accessions thereto, products thereof and documents therefor (any
and all such inventory, materials, goods, accessions, products and
documents being the "Inventory");
(f) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds) of
the Grantor, whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and all rights of the
Grantor now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating to
any such accounts, contracts, contract rights, chattel paper, documents,
instruments, and general intangibles (any and all such accounts,
contracts, contract rights, chattel paper, documents, instruments, and
general intangibles being the "Receivables", and any and all such security
agreements, guaranties, leases and other contracts being the "Related
Contracts");
(g) in furtherance of, and not in limitation of, clause (f), any
Nextel Operating Agreement to which the Grantor is a party and the
Management Agreement (as amended or modified, an "Assigned Agreement"),
together with (i) all rights and benefits (whether monetary or otherwise)
of the Grantor to receive benefits due and to become due under or pursuant
to each Assigned Agreement, (ii) all rights of the Grantor to receive
proceeds of any insurance, indemnity, warranty, guaranty or collateral
security with respect to any Assigned Agreement, (iii) all claims of the
Grantor for damages arising out of or for breach or default under any
Assigned Agreement, (iv) all rights of the Grantor to terminate any
Assigned Agreement, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder and (v) to the extent not
included in the foregoing, all proceeds of any and all of the foregoing;
(h) all Intellectual Property Collateral of the Grantor;
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(i) the Cash Account, the Collateral Account and each lock box of the
Grantor (including all cash, checks, drafts, notes, bills of exchange,
money orders and other like instruments, if any, now owned or hereafter
acquired, held therein (or in sub-accounts thereof) and all certificates
and instruments, if any, from time to time representing or evidencing such
investments, and all interest, earnings and proceeds in respect thereof);
(j) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this
Section 2.1;
(k) all of the Grantor's other property and rights of every kind and
description and interests therein; and
(l) all products, offspring, rents, issues, profits, returns, income
and proceeds of and from any and all of the foregoing Collateral
(including proceeds which constitute property of the types described in
clauses (a) through (k), and, to the extent not otherwise included, all
payments under insurance (whether or not the Administrative Agent is the
loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights described in clause (f) above arising under any
contracts, instruments, licenses, permits or leases described in such clause as
to which the grant of a security interest would constitute a violation of a
valid and enforceable restriction in favor of a third party on such grant,
unless and until any required consents shall have been obtained. The Grantor
agree to use its best efforts to obtain any such required consent.
SECTION 2.2. Security for Obligations. This Security and Pledge Agreement
secures the payment in full in cash of all monetary Obligations of the Borrower
now or hereafter existing under the Credit Agreement, the Notes and each other
Loan Document to which the Borrower is or may become a party, whether for
principal, interest, costs, fees, expenses or otherwise, and all obligations of
the Borrower and each other Obligor now or hereafter existing under this
Security and Pledge Agreement and each other Loan Document to which the
Borrower or such other Obligor is or may become a party (all such obligations
of such Borrower and such other Obligor being the "Secured Obligations").
SECTION 2.3. Delivery of Certificated Securities and Intercompany Notes.
All Collateral comprised of Intercompany Notes and certificated Securities
shall be delivered to and held by or on behalf of (and, in the case of the
Intercompany Notes, endorsed to the order of) the Administrative Agent pursuant
hereto, shall be in suitable form for transfer by delivery, and shall be
accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION 2.4. Dividends on Securities and Payments on Intercompany Notes.
In the event that any Dividend is to be paid on any Security that constitutes
Collateral or any payment of
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principal or interest is to be made on any Intercompany Note at a time when no
Default of the nature referred to in Section 8.1.9 of the Credit Agreement or
Event of Default has occurred and is continuing or would result therefrom, such
Dividend or payment may be paid directly to and retained by the Grantor. If any
such Default or Event of Default has occurred and is continuing, then any such
Dividend or payment shall be paid directly to the Administrative Agent.
SECTION 2.5. Continuing Security Interest; Transfer of Notes. This
Security and Pledge Agreement shall create a continuing security interest in
the Collateral and shall
(a) remain in full force and effect until payment in full in cash of
all Secured Obligations then due, the termination or expiration of all
Letters of Credit and the termination of all Commitments,
(b) be binding upon the Grantor, its successors, transferees and
assigns, and
(c) inure, together with the rights and remedies of the
Administrative Agent hereunder, to the benefit of the Administrative Agent
and each other Secured Party.
Without limiting the generality of the foregoing clause (c), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person, and such other Person shall thereupon become
vested with all the rights and benefits in respect thereof granted to such
Lender under any Loan Document (including this Security and Pledge Agreement)
or otherwise, subject, however, to any contrary provisions in such assignment
or transfer, and to the provisions of Section 10.11 and Article IX of the
Credit Agreement. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the payment in full
in cash of all Secured Obligations then due, the termination or expiration of
all Letters of Credit and the termination of all Commitments, the security
interests granted herein shall automatically terminate with respect to (x) such
Collateral (in the case of clause (i)) or (y) all Collateral (in the case of
clause (ii)). Upon any such sale, transfer, disposition or termination, the
Administrative Agent will, at the Grantor's sole expense, deliver to the
Grantor, without any representations, warranties or recourse of any kind
whatsoever, all applicable certificated Securities and all applicable
Intercompany Notes, together with all other applicable Collateral held by the
Administrative Agent hereunder, and execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
SECTION 2.6. Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(a) the Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein, and
shall perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security and Pledge Agreement had
not been executed,
(b) the exercise by the Administrative Agent of any of its rights
hereunder shall
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not release the Grantor from any of its duties or obligations under any
such contracts or agreements included in the Collateral, and
(c) neither the Administrative Agent nor any other Secured Party
shall have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this Security and
Pledge Agreement, nor shall the Administrative Agent or any other Secured
Party be obligated to perform any of the obligations or duties of the
Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. The Grantor represents and
warrants to each Secured Party as set forth in this Article III.
SECTION 3.2. As to Securities. All Securities issued by a Subsidiary of
the Grantor are duly authorized and validly issued, fully paid, and
non-assessable, and constitute all of the issued and outstanding Securities of
such Subsidiary.
SECTION 3.3. As to Intercompany Notes. In the case of each Intercompany
Note, all of such Intercompany Notes have been duly authorized, executed,
endorsed, issued and delivered, and are the legal, valid and binding obligation
of the issuers thereof, and are not in default.
SECTION 3.4. Location of Collateral, etc. All of the lock boxes, Equipment
and Inventory of the Grantor are respectively located at the places specified
in Section 3 of the Perfection Certificate delivered by the Grantor. None of
the Equipment and Inventory has, within the four months preceding the date of
this Security and Pledge Agreement (if then owned by the Grantor), been located
at any place other than the places specified in Section 3 of the Perfection
Certificate delivered by the Grantor. The place of business and chief executive
office of the Grantor and the office where the Grantor keeps its records
concerning the Receivables, and all originals of all chattel paper which
evidence Receivables is ________. The Grantor has no trade names. During the
four months preceding the date hereof, the Grantor has not been known by any
legal name nor has it had a federal taxpayer identification number different
from the ones set forth in Section 1(a) and 2(a), respectively, of the
Perfection Certificate delivered by the Grantor, nor has the Grantor been the
subject of any merger or other corporate reorganization, except as disclosed
pursuant to Section 1(c) of the Perfection Certificate delivered by the
Grantor. All Receivables evidenced by a promissory note or other instrument,
negotiable document or chattel paper have been duly endorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent and delivered and pledged to the
Administrative Agent pursuant to Section 4.10. If the Grantor is a party to any
Federal, state or local government contract, the Grantor shall duly comply with
the terms of the
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Federal Assignment of Claims Act, to the extent required herein to perfect the
first priority security interest in favor of the Administrative Agent.
SECTION 3.5. Ownership, No Liens, etc. The Grantor owns its Collateral
free and clear of any Lien except for the security interest created by this
Security and Pledge Agreement and, except in the case of Collateral not
consisting of Securities and Intercompany Notes, as permitted by the Credit
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of the Collateral is on file in any recording
office, except such as may have been filed in favor of the Administrative Agent
relating to this Security and Pledge Agreement or as have been filed in
connection with Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement.
SECTION 3.6. Possession and Control. The Grantor has exclusive possession
and control of its Equipment and Inventory.
SECTION 3.7. Negotiable Documents, Instruments and Chattel Paper. The
Grantor has, contemporaneously herewith, delivered to the Administrative Agent
possession of all originals of all negotiable documents, instruments and
chattel paper currently owned or held by the Grantor (duly endorsed in blank,
if requested by the Administrative Agent).
SECTION 3.8.Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
(c) the Grantor has made all necessary filings and recordations to
protect its interest in such Intellectual Property Collateral, including
recordations of all of its interests in the Patent Collateral and
Trademark Collateral in the United States Patent and Trademark Office and
in corresponding offices throughout the world and its claims to the
Copyright Collateral in the United States Copyright Office and in
corresponding offices throughout the world;
(d) the Grantor is the exclusive owner of the entire and unencumbered
right, title and interest in and to such Intellectual Property Collateral
and no claim has been made that the use of such Intellectual Property
Collateral does or may violate the asserted rights of any third party; and
(e) the Grantor has performed and will continue to perform all acts
and has paid and will continue to pay all required fees and taxes to
maintain each and every such item of Intellectual Property Collateral in
full force and effect throughout the world, as
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applicable.
The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of the Grantor's
business.
SECTION 3.9. Validity, etc. This Security and Pledge Agreement creates a
valid first priority security interest in the Collateral (subject to Section
9-306 of the U.C.C. and Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement) securing the payment of the Secured Obligations, and
(a) in the case of Collateral comprised of certificated Securities or
instruments, upon the delivery of such Collateral to the Administrative
Agent, such security interest will be a valid first priority perfected
security interest;
(b) in the case of Collateral comprised of uncertificated Securities
and other Investment Property (other than certificated Securities), upon
the Administrative Agent obtaining "control" (as defined in Section 8-106
of the U.C.C., as such term relates to Investment Property (other than
certificated Securities or Commodity Contracts), or as used in Section
9-115(e) of the U.C.C., as such term relates to Commodity Contracts) of
such Collateral and the filing of the Uniform Commercial Code financing
statements delivered by the Grantor having an interest in such Collateral
to the Administrative Agent with respect to such Collateral, such security
interest will be a valid first priority perfected security interest; and
(c) in the case of all other Collateral in which a security interest
can be perfected by the filing of the Uniform Commercial Code financing
statements, upon the filing of such financing statements delivered by the
Grantor to the Administrative Agent with respect to such Collateral in the
filing offices set forth in Schedule I to the Perfection Certificate, such
security interest will be a valid first priority perfected security
interest.
The Grantor has filed all Uniform Commercial Code financing statements referred
to above in the appropriate offices therefor (or has provided the
Administrative Agent with copies thereof suitable for filing in such offices)
and has taken all of the other actions referred to above necessary to create
perfected, first-priority security interests in the applicable Collateral.
SECTION 3.10. Authorization, Approval, etc. Except as have been obtained
or made and are in full force and effect (or otherwise provided for to the
satisfaction of the Administrative Agent), no authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
(a) for the grant by the Grantor of the security interest granted
hereby, the pledge
13
by the Grantor of any Collateral pursuant hereto or for the execution,
delivery and performance of this Security and Pledge Agreement by the
Grantor,
(b) for the perfection of or the exercise by the Administrative Agent
of its rights and remedies hereunder, or
(c) for the exercise by the Administrative Agent of the voting or
other rights provided for in this Security and Pledge Agreement, or,
except, with respect to any Securities issued by a Subsidiary of the
Grantor, as may be required in connection with a disposition of such
Securities by laws affecting the offering and sale of securities generally
or the rules and regulations of the FCC, the remedies in respect of the
Collateral pursuant to this Security and Pledge Agreement.
SECTION 3.11. Compliance with Laws. The Grantor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every governmental authority,
the non-compliance with which could reasonably be expected to have a Material
Adverse Effect or which could reasonably be expected to materially adversely
affect the value of the Collateral or the worth of the Collateral as collateral
security.
ARTICLE IV
COVENANTS
SECTION 4.1. Certain Covenants. The Grantor covenants and agrees that,
until payment in full of all Secured Obligations then due, the termination or
expiration of all Letters of Credit and the termination of all Commitments, the
Grantor will, unless the Required Lenders shall otherwise consent in writing,
perform, comply with and be bound by the obligations set forth in this Article
IV.
SECTION 4.2. As to Investment Property and Intercompany Notes; Etc.
SECTION 4.2.1. Certificated Securities. The Grantor shall cause each of
its Subsidiaries to evidence all equity interests in such Subsidiaries by
certificated Securities. The Grantor shall deliver certificates evidencing all
of the issued and outstanding shares of Capital Stock of each Person that is a
direct Subsidiary of the Grantor from to time (including, following the License
Transfer, all of the issued and outstanding shares of Capital Stock of the
Nextel License Subsidiary), which certificates shall be accompanied by undated
stock powers duly executed in blank.
SECTION 4.2.2. Investment Property (other than Certificated Securities).
With respect to any Investment Property (other than certificated Securities) of
the Grantor, the Grantor shall
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(a) cause a Control Agreement relating to such Investment Property to be
executed and delivered in favor of the Administrative Agent and (b) deliver
Uniform Commercial Code financing statements which when filed will result in
the Administrative Agent having a first priority perfected security interest in
such Investment Property.
SECTION 4.2.3. Stock Powers, etc. The Grantor agrees that all certificated
Securities constituting Collateral delivered by the Grantor pursuant to this
Security and Pledge Agreement will be accompanied by duly executed undated
blank stock powers or other equivalent instruments of transfer acceptable to
the Administrative Agent. The Grantor will, from time to time upon the request
of the Administrative Agent, promptly deliver to the Administrative Agent such
stock powers, instruments, and similar documents, satisfactory in form and
substance to the Administrative Agent, with respect to such Collateral as the
Administrative Agent may reasonably request and will, from time to time upon
the request of the Administrative Agent after the occurrence of any Event of
Default, promptly transfer any Securities constituting Collateral into the name
of any nominee designated by the Administrative Agent.
SECTION 4.2.4. Continuous Pledge. Subject to any sale or other transfer of
Collateral in accordance with Section 7.2.9 of the Credit Agreement or until
such time as all Secured Obligations then due have been paid in full, all
Letters of Credit have terminated or expired and all Commitments have
terminated, the Grantor will, at all times, keep pledged to the Administrative
Agent pursuant hereto on a first priority perfected basis all Investment
Property constituting Collateral, all Dividends and Distributions with respect
thereto, all Intercompany Notes, all interest, principal and other proceeds
received by the Administrative Agent with respect to the Intercompany Notes,
and all other Collateral and other securities, instruments, proceeds, and
rights from time to time received by or distributable to the Grantor in respect
of any of the foregoing Collateral and will not permit any Subsidiary of the
Grantor to issue any Securities which shall not have been immediately duly
pledged hereunder on a first priority perfected basis.
SECTION 4.2.5. Voting Rights; Dividends, etc. The Grantor agrees:
(a) after any Default of the nature referred to in Section 8.1.9 of
the Credit Agreement or any Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by the Grantor and
without any request therefor by the Administrative Agent, to deliver
(properly endorsed where required hereby or requested by the
Administrative Agent) to the Administrative Agent all Dividends,
Distributions, all interest, all principal, all other cash payments, and
all proceeds of the Collateral, all of which shall be held by the
Administrative Agent as additional Collateral for use in accordance with
clause (b) of Section 6.1; and
(b) after any Event of Default shall have occurred and be continuing
and the Administrative Agent has notified the Grantor of the
Administrative Agent's intention to exercise its voting power under this
Section 4.2.5(b)
15
(i) subject to FCC approval, the Administrative Agent may
exercise (to the exclusion of the Grantor) the voting power and all
other incidental rights of ownership with respect to any Securities
or other Investment Property constituting Collateral and the Grantor
hereby grants the Administrative Agent an irrevocable proxy,
exercisable under such circumstances, to vote such Securities and
such other Collateral; and
(ii) promptly to deliver to the Administrative Agent such
additional proxies and other documents as may be necessary to allow
the Administrative Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Grantor but which
the Grantor is then obligated to deliver to the Administrative Agent, shall,
until delivery to the Administrative Agent, be held by the Grantor separate and
apart from its other property in trust for the Administrative Agent. The
Administrative Agent agrees that unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given the notice
referred to in Section 4.2.5(b), the Grantor shall have the exclusive voting
power with respect to any Securities constituting Collateral and the
Administrative Agent shall, upon the written request of the Grantor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Grantor which are necessary to allow the Grantor to exercise
voting power with respect to any such Securities; provided, however, that no
vote shall be cast, or consent, waiver, or ratification given, or action taken
by the Grantor that would impair any such Collateral or be inconsistent with or
violate any provision of the Credit Agreement or any other Loan Document
(including this Security and Pledge Agreement).
SECTION 4.2.6. Amendment of Organic Documents. The Grantor will not amend,
supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of any terms or provisions contained in,
or applicable to, any Organic Document of any issuer of any Security comprising
the Collateral in which it has an equity interest if the effect thereof is to
impair, or is in any manner adverse to, the rights or interests of the
Administrative Agent or any other Secured Party hereunder or under the Credit
Agreement or any other Loan Document, without the prior written consent of the
Administrative Agent and the Required Lenders.
SECTION 4.3. As to Equipment and Inventory. The Grantor hereby agrees that
it shall
(a) keep all the Equipment and Inventory (other than Inventory sold
in the ordinary course of business) at the places therefor specified in
Section 3.4 or, upon 30 days' prior written notice to the Administrative
Agent, at such other places in a jurisdiction where all representations
and warranties set forth in Article III (including Section 3.9) shall be
true and correct, and all action required pursuant to the first sentence
of Section 4.10 shall have been taken with respect to the Equipment and
Inventory;
16
(b) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with any manufacturer's manual; and forthwith,
or in the case of any loss or damage to any such Equipment, as quickly as
practicable after the occurrence thereof, make or cause to be made all
repairs, replacements, and other improvements in connection therewith
which are necessary or desirable to such end; and promptly furnish to the
Administrative Agent a statement respecting any loss or damage to any of
such Equipment which could reasonably be expected to have a Material
Adverse Effect; and
(c) pay promptly when due all property and other material taxes,
assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against, the
Equipment and Inventory, except to the extent the validity thereof is
being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP have been set aside.
SECTION 4.4. As to Receivables.
(a) The Grantor shall keep its chief executive office and the office
where it keeps its records concerning the Receivables, and all originals
of all chattel paper which evidences Receivables, located at the address
set forth in Section 3.4 and shall keep its other places of business at
the addresses set forth in Section 3 of the Perfection Certificate
delivered by the Grantor, or, upon 30 days' prior written notice to the
Administrative Agent, at such other locations in a jurisdiction where all
actions required by the first sentence of Section 4.10 shall have been
taken with respect to the Receivables and other Collateral; not change its
name or federal taxpayer identification number except upon 30 days' prior
written notice to the Administrative Agent; hold and preserve such records
and chattel paper; and permit representatives of the Administrative Agent
at any time during normal business hours to inspect and make abstracts
from such records and chattel paper. In addition, the Grantor shall give
the Administrative Agent a supplement to such Perfection Certificate on
each date a Compliance Certificate is required to be delivered to the
Administrative Agent under the Credit Agreement, which shall set forth any
changes to the information set forth in Section 3.4.
(b) The Grantor shall have the right to collect all Receivables so
long as no Default of the nature set forth in Section 8.1.9 of the Credit
Agreement nor any Event of Default shall have occurred and be continuing.
(c) After the occurrence and during the continuance of a Default of
the nature set forth in Section 8.1.9 of the Credit Agreement or an Event
of Default, upon written notice by the Administrative Agent to the Grantor
pursuant to this Section 4.4(c), all proceeds of Collateral received by
the Grantor shall be delivered in kind for deposit to an account
maintained with the Administrative Agent (the "Collateral Account").
Proceeds of
17
Collateral (other than Cash Collateral) received by the Grantor shall,
prior to deposit in the Collateral Account, be held separate and apart
from, and not commingled with, any other property and in express trust for
the benefit of the Administrative Agent until delivery thereof is made to
the Collateral Account.
(d) The Administrative Agent shall have the right to apply any amount
in the Collateral Account to the payment of any Secured Obligations which
are due and payable or payable upon demand or to the payment of any
Secured Obligations at any time that an Event of Default shall have
occurred and be continuing.
(e) With respect to the Collateral Account, it is hereby confirmed
and agreed that (i) deposits in each Collateral Account are subject to a
security interest as contemplated hereby, (ii) the Collateral Account
shall be under the sole dominion and control of the Administrative Agent
and (iii) the Administrative Agent shall have the sole right of withdrawal
over the Collateral Account.
SECTION 4.5. As to Collateral.
(a) Until the occurrence and continuance of a Default of the nature
set forth in clauses (a) through (d) of Section 8.1.9 of the Credit
Agreement or an Event of Default, and such time as the Administrative
Agent shall notify the Grantor of the revocation of such power and
authority, the Grantor may in the ordinary course of its business (except
as otherwise permitted under the Credit Agreement), at its own expense,
process, store, transport, sell, lease or furnish under the contracts of
service any of the Inventory normally held by the Grantor for such
purpose, and use and consume, in the ordinary course of its business
(except as otherwise permitted under the Credit Agreement), any raw
materials, work in process or materials normally held by the Grantor for
such purpose, will, at its own expense, endeavor to collect, as and when
due, all amounts due with respect to any Collateral, including the taking
of such action with respect to such collection as the Administrative Agent
may reasonably request following the occurrence of a Default of the nature
set forth in clauses (a) through (d) of Section 8.1.9 of the Credit
Agreement or an Event of Default or, in the absence of such request, as
the Grantor may deem advisable, and may grant, in the ordinary course of
business (except as otherwise permitted under the Credit Agreement), to
any party obligated on any of the Collateral (other than Cash Collateral),
any rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of goods,
the sale or lease of which shall have given rise to such Collateral. The
Administrative Agent, however, may, at any time following a Default of the
nature set forth in clauses (a) through (d) of Section 8.1.9 of the Credit
Agreement or an Event of Default, whether before or after any revocation
of such power and authority or the maturity of any of the Secured
Obligations, notify any parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amounts due or to become due
thereunder and enforce collection of any of the Collateral by suit or
otherwise and
18
surrender, release, or exchange all or any part thereof, or compromise or
extend or renew for any period (whether or not longer than the original
period) any indebtedness thereunder or evidenced thereby. Upon request of
the Administrative Agent following a Default of the nature set forth in
Section 8.1.9 of the Credit Agreement or an Event of Default, the Grantor
will, at its own expense, notify any parties obligated on any of the
Collateral to make payment to the Administrative Agent of any amounts due
or to become due thereunder.
(b) Following a Default of the nature set forth in clauses (a)
through (d) of Section 8.1.9 of the Credit Agreement or an Event of
Default, the Administrative Agent is authorized to endorse, in the name of
the Grantor, any item, howsoever received by the Administrative Agent,
representing any payment on or other proceeds of any of the Collateral.
(c) Subject to Section 4.4(c), the Grantor shall have the right to
receive and retain all cash and cash equivalent proceeds of Collateral
(other than Cash Collateral) to be applied as permitted by the Loan
Documents.
SECTION 4.6. As to Intellectual Property Collateral. The Grantor covenants
and agrees to comply with the following provisions as such provisions relate to
any Intellectual Property Collateral of the Grantor:
(a) the Grantor shall not, unless the Grantor shall either (i)
reasonably and in good faith determine (and notice of such determination
shall have been delivered to the Administrative Agent) that any of the
Patent Collateral is of negligible economic value to the Grantor, or (ii)
have a valid business purpose to do otherwise, do any act, or omit to do
any act, whereby any of the Patent Collateral may lapse or become
abandoned or dedicated to the public or unenforceable;
(b) the Grantor shall not, and the Grantor shall not permit any of
its licensees to, unless the Grantor shall either (i) reasonably and in
good faith determine (and notice of such determination shall have been
delivered to the Administrative Agent) that any of the Trademark
Collateral is of negligible economic value to the Grantor, or (ii) have a
valid business purpose to do otherwise,
(A) fail to continue to use any of the Trademark Collateral in
order to maintain all of the Trademark Collateral in full force free
from any claim of abandonment for non-use,
(B) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral,
(C) fail to employ all of the Trademark Collateral registered
with any
19
Federal or state or foreign authority with an appropriate notice of
such registration,
(D) adopt or use any other Trademark which is confusingly
similar or a colorable imitation of any of the Trademark Collateral,
(E) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for which
registration or application for registration of all of the Trademark
Collateral has been made, and
(F) do or permit any act or knowingly omit to do any act whereby
any of the Trademark Collateral may lapse or become invalid or
unenforceable;
(c) the Grantor shall not, unless the Grantor shall either reasonably
and in good faith determine (and notice of such determination shall have
been delivered to the Administrative Agent) that any of the Copyright
Collateral or any of the Trade Secrets Collateral is of negligible
economic value to the Grantor, or have a valid business purpose to do
otherwise, do or permit any act or knowingly omit to do any act whereby
any of the Copyright Collateral or any of the Trade Secrets Collateral may
lapse or become invalid or unenforceable or placed in the public domain
except upon expiration of the end of an unrenewable term of a registration
thereof;
(d) the Grantor shall notify the Administrative Agent immediately if
it knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral may
become abandoned or dedicated to the public or placed in the public domain
or invalid or unenforceable, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any foreign counterpart
thereof or any court) regarding the Grantor's ownership of any of the
Intellectual Property Collateral, its right to register the same or to
keep and maintain and enforce the same;
(e) in no event shall the Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof,
unless it promptly informs the Administrative Agent, and upon request of
the Administrative Agent, executes and delivers any and all agreements,
instruments, documents and papers as the Administrative Agent may
reasonably request to evidence the Administrative Agent's security
interest in such Intellectual Property Collateral and the goodwill and
general intangibles of the Grantor relating thereto or represented
thereby;
(f) the Grantor shall take all necessary steps, including in any
proceeding before the United States Patent and Trademark Office, the
United States Copyright Office or any
20
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue any application (and to obtain the
relevant registration) filed with respect to, and to maintain any
registration of, the Intellectual Property Collateral, including the
filing of applications for renewal, affidavits of use, affidavits of
incontestability and opposition, interference and cancellation proceedings
and the payment of fees and taxes (except to the extent that dedication,
abandonment or invalidation is permitted under the foregoing clauses (a),
(b) and (c)); and
(g) the Grantor shall, contemporaneously herewith, execute and
deliver to the Administrative Agent a Patent Security Agreement, Trademark
Security Agreement and Copyright Security Agreement in the forms of
Exhibit B, Exhibit C and Exhibit D hereto, and shall execute and deliver
to the Administrative Agent any other document required to acknowledge or
register or perfect the Administrative Agent's interest in any part of the
Intellectual Property Collateral.
SECTION 4.7. Insurance. The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and will furnish a certificate of a
reputable insurance broker setting forth the nature and extent of all insurance
maintained by the Grantor in accordance with this Section. Without limiting the
foregoing, the Grantor further agrees as follows:
(a) Each policy for property insurance shall show the Administrative
Agent as loss payee.
(b) Each policy for liability insurance shall show the Administrative
Agent as an additional insured.
(c) With respect to each life insurance policy (if any), the Grantor
shall, within thirty days of the date hereof or the date on which such
policy becomes effective, execute and deliver to the Administrative Agent
a collateral assignment, notice of which has been acknowledged in writing
by the insurer.
(d) Each insurance policy shall provide that at least 30 days' prior
written notice of cancellation or of lapse shall be given to the
Administrative Agent by the insured.
(e) The Grantor shall, if so requested by the Administrative Agent,
deliver to the Administrative Agent a copy of each insurance policy.
(f) Except to the extent otherwise permitted under the Credit
Agreement, all payments in respect of property insurance and life
insurance shall be deposited to the Collateral Account and if there shall
be no Collateral Account shall be paid to the Grantor.
21
SECTION 4.8. Transfers and Other Liens. The Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except Inventory in the ordinary course
of business or as permitted by the Credit Agreement; or
(b) create or suffer to exist any Lien or other charge or encumbrance
upon or with respect to any of the Collateral to secure Indebtedness of
any Person or entity, except for the security interest created by this
Security and Pledge Agreement and except as permitted by the Credit
Agreement.
SECTION 4.9. Further Assurances, etc. The Grantor agrees that, from time
to time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary
or desirable, or that the Administrative Agent may request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Grantor will
(a) if any Receivable shall be evidenced by a promissory note or
other instrument, negotiable document or chattel paper, deliver and pledge
to the Administrative Agent hereunder such promissory note, instrument,
negotiable document or chattel paper duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to the Administrative Agent;
(b) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices (including any
assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. ss. 3726, any successor or amended version
thereof or any regulation promulgated under or pursuant to any version
thereof), as may be necessary or desirable, or as the Administrative Agent
may request, in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Administrative
Agent hereby;
(c) not enter into any agreement amending, supplementing, or waiving
any provision of any Intercompany Note (including any underlying
instrument pursuant to which such Intercompany Note is issued) or
compromising or releasing or extending the time for payment of any
obligation of the maker thereof without the prior written consent of the
Administrative Agent;
(d) promptly execute and deliver all further instruments and take all
further action, that may be necessary or desirable, or that the
Administrative Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be
22
granted hereby or to enable the Administrative Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral;
(e) not take or omit to take any action the taking or the omission of
which would result in any impairment or alteration of any obligation of
the maker of any Intercompany Note or other instrument constituting
Collateral; and
(f) furnish to the Administrative Agent, from time to time at the
Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all
or any part of the Collateral without the signature of the Grantor where
permitted by law. A carbon, photographic or other reproduction of this Security
and Pledge Agreement or any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.
SECTION 4.10. As to the Cash Account.
(a) The Grantor shall establish and maintain a Cash Account pursuant
to a Cash Collateral Agreement in the name of the Administrative Agent for
the benefit of the Secured Parties. This Security and Pledge Agreement
shall constitute the Cash Collateral Agreement with respect to any Cash
Account maintained with the Administrative Agent. The Grantor may maintain
a Cash Account which is not established with the Administrative Agent so
long as the Grantor shall have obtained an executed Cash Collateral
Agreement with respect to such Cash Account. The Cash Account shall be
funded with the proceeds of the Loans made on the Closing Date, and, at
all times until the earlier to occur of (i) the License Transfer and (ii)
395 days after the Closing Date, the aggregate balance of the Cash
Accounts shall not be less than the Required Balance.
(b) Each Cash Account shall be under the sole dominion and control of
the Administrative Agent, or a Sub-Agent acting on behalf of the
Administrative Agent, and the Administrative Agent, or a Sub-Agent acting
on behalf of the Administrative Agent, shall have the sole right of
withdrawal over such Cash Account; provided however, that, the Grantor
shall be permitted to withdraw or transfer all or any portion of the
amounts on deposit in such Cash Account upon prior notice thereof to the
Agents so long as after giving effect to any such withdrawal or transfer,
the amount on deposit in such Cash Account is not less than the Required
Balance.
(c) The Grantor, or a Sub-Agent acting on behalf of the
Administrative Agent, shall furnish the Administrative Agent with monthly
statements specifying the names and
23
addresses of the financial institutions where each Cash Account is
maintained, the account numbers of each Cash Account, the amounts
withdrawn or transferred from, and the balances of, each Cash Account at
the close of business on the last day of such calendar month, and such
other information relating to such Cash Account at or such times as shall
be reasonably requested by the Administrative Agent. At any time and from
time to time, the Administrative Agent shall have the right, upon
reasonable advance notice to the Grantor and at reasonable intervals, to
make test verifications of each Cash Account in any manner and through any
medium that it reasonably considers advisable and the Grantor shall
furnish all such assistance and information as the Administrative Agent
may reasonably require in connection therewith. At any time and from time
to time, upon the Administrative Agent's reasonable request, at reasonable
intervals and at the expense of the Grantor, the Grantor shall cause
independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports
showing reconciliations, test verifications of, and trial balances for,
the Cash Accounts.
(d) The Grantor shall instruct the Administrative Agent, or Sub-Agent
acting on behalf of the Administrative Agent, to invest funds on deposit
in any Cash Account from time to time, at the risk and expense of the
Grantor, in Cash Equivalent Investments as the Grantor shall select (or,
so long as any Event of Default shall have occurred and be continuing, as
the Administrative Agent may in its discretion select). In the event that
the aggregate cash balance in the Cash Accounts as of any day is less than
the Required Balance, the Administrative Agent may (but shall not be
obligated to) liquidate the Cash Equivalent Investments held in any Cash
Account in such manner as the Administrative Agent may deem necessary in
order to obtain cash sufficient to maintain the Required Balance and to
pay any expenses and charges incurred in connection with effecting any
such liquidation, which expenses and charges the Administrative Agent
shall be authorized to pay with cash on deposit in the Cash Accounts.
(e) The Grantor agrees to pay any and all reasonable fees, costs and
expenses which the Administrative Agent incurs in connection with
establishing and maintaining the Cash Accounts.
(f) The Grantor's right to withdraw amounts on deposit in the Cash
Accounts (except in respect of interest, so long as the aggregate cash
balance in the Cash Accounts as of any day is not less than the Required
Balance) shall be subject at all times to the later to occur of (i) the
License Transfer and (ii) delivery to the Administrative Agent of executed
copies of the Uniform Commercial Code (Form UCC-3) termination statements
referred to in Section 7.1.14 of the Credit Agreement.
ARTICLE V
THE ADMINISTRATIVE AGENT
24
SECTION 5.1. Administrative Agent Appointed Attorney-in-Fact. The Grantor
hereby irrevocably appoints the Administrative Agent the Grantor's
attorney-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor or otherwise, from time to time following the
occurrence and during the continuance of an Event of Default, to take any
action and to execute any instrument which the Administrative Agent may deem
necessary or advisable to accomplish the purposes of this Security and Pledge
Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above;
(c) to file any claims or take any action or institute any
proceedings which the Administrative Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the
rights of the Administrative Agent with respect to any of the Collateral;
and
(d) to perform the affirmative obligations of the Grantor hereunder
(including all obligations of the Grantor pursuant to Section 4.9).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
5.2.ab SECTION Administrative Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Administrative Agent may itself
perform, or cause performance of, such agreement, and the expenses of the
Administrative Agent incurred in connection therewith shall be payable by the
Grantor pursuant to Section 6.4.
SECTION 5.3. Administrative Agent Has No Duty. In addition to, and not in
limitation of, Section 2.6, the powers conferred on the Administrative Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or responsibility for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Investment
Property, whether or not the Administrative Agent has or is deemed to have
knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.
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SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as the Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
SECTION 6.1. Certain Remedies. If any Event of Default shall have occurred
and be continuing:
(a) The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a secured
party on default under the U.C.C. (whether or not the U.C.C. applies to
the affected Collateral) and also may
(i) require the Grantor to, and the Grantor hereby agrees that
it will, at its expense and upon request of the Administrative Agent
forthwith, assemble all or part of the Collateral as directed by the
Administrative Agent and make it available to the Administrative
Agent at a place to be designated by the Administrative Agent which
is reasonably convenient to both parties, and
(ii) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or
private sale, at any of the Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Administrative Agent may deem commercially
reasonable. The Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' prior notice to the
Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been
given. The Administrative Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.
(b) All cash proceeds received by the Administrative Agent in respect
of any sale of, collection from, or other realization upon all or any part
of the collateral may, in the discretion of the Administrative Agent, be
held by the Administrative Agent as collateral
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for, and/or then or at any time thereafter applied (after payment of any
amounts payable to the Administrative Agent pursuant to Section 6.3) in
whole or in part by the Administrative Agent for the benefit of the
Secured Parties against, all or any part of the Secured Obligations in any
such order as the Administrative Agent shall elect. Any surplus of such
cash or cash proceeds held by the Administrative Agent and remaining after
payment in full of all the Obligations shall be paid over to the Grantor
or to whomsoever may be lawfully entitled to receive such surplus.
(c) The Administrative Agent may
(i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without disclosing
that such Collateral is subject to the lien and security interest
hereunder,
(ii) notify the parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amount due or to
become due thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or
not longer than the original period) any obligations of any nature of
any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in the
Grantor's name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Grantor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
SECTION 6.2. Securities Laws. If the Administrative Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
6.1, the Grantor agrees that, upon request of the Administrative Agent, the
Grantor will, at its own expense:
(a) execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to execute
and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the
opinion of the Administrative Agent, advisable to register such Collateral
under the provisions of the Securities Act of 1933, as from time to time
amended (the "Securities Act"), and to cause the registration statement
relating thereto to become effective and to remain effective for such
period as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related
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prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the
Administrative Agent;
(c) cause each such issuer to make available to its security holders,
as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Grantor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Administrative Agent or the Secured
Parties by reason of the failure by the Grantor to perform any of the covenants
contained in this Section and, consequently, agrees that, if the Grantor shall
fail to perform any of such covenants, such covenants shall be specifically
enforceable against the Grantor.
SECTION 6.3. Indemnity and Expenses.
(a) The Grantor agrees to indemnify the Administrative Agent from and
against any and all claims, losses and liabilities arising out of or
resulting from this Security and Pledge Agreement (including enforcement
of this Security and Pledge Agreement), except claims, losses or
liabilities resulting from the Administrative Agent's gross negligence or
wilful misconduct.
(b) The Grantor will upon demand pay to the Administrative Agent the
amount of any and all reasonable expenses, including the reasonable fees
and disbursements of its counsel and of any experts and agents, which the
Administrative Agent may incur in connection with
(i) the administration of this Security and Pledge Agreement,
(ii) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the
Collateral,
(iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the Secured Parties hereunder, and
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(iv) the failure by the Grantor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 7.1. Loan Document. This Security and Pledge Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.
SECTION 7.2. Amendments; etc. No amendment to or waiver of any provision
of this Security and Pledge Agreement nor consent to any departure by the
Grantor herefrom shall in any event be effective unless the same shall be in
writing and signed by the Administrative Agent (on behalf of the Lenders or the
Required Lenders, as the case may be), and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
SECTION 7.3. Protection of Collateral. The Administrative Agent may from
time to time, at its option, perform any act which the Grantor agrees hereunder
to perform and which the Grantor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default).
SECTION 7.4. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telegraphic
communication) and, if to the Grantor, mailed or telecopied or delivered to it
at the address of the Borrower specified in the Credit Agreement, and, if to
the Administrative Agent, mailed or telecopied or delivered to it, addressed to
it at the address of the Administrative Agent specified in the Credit
Agreement. All such notices and other communications, when mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any such notice or
communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
SECTION 7.5. Section Captions. Section captions used in this Security and
Pledge Agreement are for convenience of reference only, and shall not affect
the construction of this Security and Pledge Agreement.
SECTION 7.6. Severability. Wherever possible each provision of this
Security and Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Security
and Pledge Agreement shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
29
without invalidating the remainder of such provision or the remaining
provisions of this Security and Pledge Agreement.
SECTION 7.7. Counterparts. This Security and Pledge Agreement may be
executed by the parties hereto in several counterparts, each of which shall be
deemed an original and all of which shall constitute together but one and the
same agreement.
SECTION 7.8. Governing Law, Entire Agreement, etc. THIS SECURITY AND
PLEDGE AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE EXTENT THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AND PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
SECTION 7.9. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT AND THE
GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST
EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE
ADMINISTRATIVE AGENT OR THE GRANTOR IN CONNECTION HEREWITH OR THEREWITH. THE
GRANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN
DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE ADMINISTRATIVE AGENT ENTERING INTO THIS AGREEMENT AND EACH
SUCH OTHER LOAN DOCUMENT.
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IN WITNESS WHEREOF, the Grantor has caused this Security and Pledge
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
NEXTEL PARTNERS OPERATING CORP.
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer,
Treasurer and Secretary
BANK OF MONTREAL, as
Administrative Agent
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxx
Title: Director
