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EXECUTION VERSION
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of August 8, 2000, made by
ORBCOMM GLOBAL, L.P. , a Delaware limited partnership (the "Borrower"), in favor
of TELEGLOBE HOLDING CORP., a Delaware corporation (the "Lender") pursuant to
the Bridge Credit Agreement, dated as of August 8, 2000 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
between the Borrower and the Lender.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lender has
agreed to make an Advance to the Borrower upon the terms and subject to the
conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of the
Lender to make such Advance to the Borrower under the Credit Agreement that the
Borrower shall have executed and delivered this Security Agreement to the
Lender.
NOW, THEREFORE, in consideration of the premises and to induce
the Lender to enter into the Credit Agreement and to induce the Lender to make
the Advance to the Borrower, the Borrower hereby agrees with the Lender as
follows:
1. Defined Terms.
1.1 Definitions. (a) Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date hereof
are used herein as so defined: Accounts, Chattel Paper, Documents, Equipment,
Farm Products, General Intangibles, Goods, Instruments, Inventory and Investment
Property.
(b) The following terms shall have the following meanings:
"Agreement": this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"Collateral": as defined in Section 2.
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"Collateral Account": any collateral account established by
the Lender as provided in Section 5.3 or Section 9.2.
"Contracts": the material contracts and agreements to which
the Borrower is party that are material to the conduct of the
Borrower's business and operations, as listed in Schedule 1, as the
same may be amended, supplemented or otherwise modified from time to
time, including, without limitation, (a) all rights of the Borrower to
receive moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of the Borrower to damages arising out of or
for breach or default in respect thereof and (c) all rights of the
Borrower to exercise all remedies thereunder.
"Copyrights": (i) all material copyrights arising under the
laws of the United States, any other country or any political
subdivision thereof, whether registered or unregistered and whether
published or unpublished (including, without limitation, those listed
in Schedule 4), all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation,
all registrations, recordings and applications in the United States
Copyright Office, and (ii) the right to obtain all renewals thereof.
"Copyright Licenses": any material written agreement naming
the Borrower as licensor or licensee (including, without limitation,
those listed in Schedule 4), granting any right under any Copyright,
including, without limitation, the grant of rights to manufacture,
distribute, exploit and sell materials derived from any Copyright, to
the extent, in each case where the Borrower is a licensee under any
such written agreement, the grant by the Borrower of a security
interest pursuant to this Agreement is not prohibited by such written
agreement.
"FCC": the Federal Communications Commission.
"FCC License": any license, permit, consent, certificate of
compliance, franchise, approval, waiver or authorization granted or
issued by the FCC, including, without limitation, any of the foregoing
authorizing or permitting the acquisition, construction, launch or
operation of a commercial non-voice, non-geosynchronous, satellite or
"xxxxxx XXX (low earth orbit)" system.
"Foreign Subsidiary": any Subsidiary of the Borrower organized
under the laws of any jurisdiction outside the United States of
America.
"Governmental Authority": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without
limitation, the National Association of Insurance Commissioners).
"Intellectual Property": the collective reference to all
rights, priorities and privileges relating to intellectual property,
whether arising under United States, multinational or foreign laws or
otherwise, including, without limitation, the Copyrights, the Copyright
Licenses, the Patents, the Patent Licenses, the Trademarks and the
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Trademark Licenses, and all rights to xxx at law or in equity for any
infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Issuer": any Person identified on Schedule 7 attached hereto
as an issuer of Pledged Stock.
"Obligations": the collective reference to the unpaid
principal of and interest on the Advances and all other obligations and
liabilities of the Borrower to the Lender (including, without
limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Advances and interest
accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating to the
Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, the Credit Agreement, this Agreement, the other Loan Documents
entered into by the Borrower with any Lender or any other document
made, delivered or given in connection therewith, in each case whether
on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise.
"Patents": (a) all material letters patent of the United
States or any other country and all reissues and extensions thereof,
including, without limitation, any thereof referred to in Schedule 2,
and (b) all applications for material letters patent of the United
States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any
thereof referred to in Schedule 2.
"Patent License": all material agreements, whether written or
oral, providing for the grant by or to the Borrower of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any thereof referred to in Schedule 2.
"Pledged Notes": all promissory notes listed on Schedule 7,
all notes at any time issued to the Borrower by any Subsidiary and all
other promissory notes issued to or held by the Borrower or any
Investment Property.
"Pledged Securities": the collective reference to the Pledged
Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock of the
Subsidiaries directly owned by the Borrower listed on Schedule 7,
together with any other shares, stock certificates, options or rights
of any nature whatsoever in respect of the Capital Stock of any Person
that may be issued or granted to, or held by, the Borrower while this
Agreement is in effect or any Investment Property; provided that, in
any case "Pledged Stock" shall not include more than 65% of each class
of Capital Stock of any Foreign Subsidiary.
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"Proceeds": all "proceeds" as such term is defined in Section
9-306(1) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in any event, shall include, without
limitation, all dividends or other income from the Pledged Securities,
collections thereon or distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or leased or
for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Trademarks": (a) all material trademarks, trade names,
corporate names, company names, business names, fictitious business
names, trade styles, service marks, logos and other source or business
identifiers, and the goodwill associated therewith, now existing or
hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the
United States Patent and Trademark Office or in any similar office or
agency of the United States, any State thereof or any other country or
any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule 3, and (b) all renewals
thereof.
"Trademark License" means any material agreement, written or
oral, providing for the grant by or to the Borrower of any right to use
any Trademark, including, without limitation, any thereof referred to
in Schedule 3.
1.2 Other Definitional Provisions. (a) The words "hereof,"
"herein", "hereto" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of the Obligations, the Borrower hereby
grants to the Lender a security interest in all of the following property now
owned or at any time hereafter acquired by the Borrower or in which the Borrower
now has or at any time in the future may acquire any right, title or interest
(collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
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(d) all Copyrights
(e) all Copyright Licenses
(f) all Documents;
(g) all Equipment, including, without limitation, all
Equipment located at or used in the operation of any gateway Earth
station or gateway control center (except for (i) any Equipment
procured under the Gateway Earth Station (GES) Contract dated October
31, 1996 between the Borrower (as successor to ORBCOMM International
Partners, L.P.) and ViaSat, Inc. (as successor to Scientific Atlanta,
Inc.) (as amended, modified, or supplemented from time to time) to the
extent that a GES Acceptance Test Certificate has not been issued with
respect thereto and (ii) any Equipment procured under the Gateway Earth
Station (GES) Contract dated October 31, 1996 between the Borrower (as
successor to ORBCOMM International Partners, L.P.) and COMSAT RSI, Inc.
(as amended, modified or supplemented from time to time) to the extent
that a GES Acceptance Test Certificate has not been issued and full
payment has not been made by the Borrower with respect thereto);
(h) all Goods;
(i) all General Intangibles;
(j) all Instruments;
(k) all Inventory;
(l) all Patents;
(m) all Patent Licenses;
(n) all Pledged Securities;
(o) all Trademarks;
(p) all Trademark Licenses;
(q) all FCC Licenses, (1) owned or held by the Borrower (if
any) or (2) if owned by another Person, to the extent of any right or
interest (including, without limitation, any "right to use" such FCC
Licenses) that the Borrower may own or hold with respect thereto,
(except to the extent that the Borrower is prohibited from granting a
security interest therein pursuant to the Communications Act of 1934,
as amended, and the regulations promulgated thereunder, as in effect at
such time, provided, however, that such security interest does include,
to the maximum extent permitted by law, all rights
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incident or appurtenant to the FCC Licenses and the right to receive
all Proceeds derived from or in connection with the sale, assignment
or transfer of the FCC Licenses);
(r) all satellites owned by the Borrower, wherever located;
(s) all books and records pertaining to the Collateral; and
(t) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
3. Representations and Warranties. The Borrower hereby
represents and warrants that:
3.1 Title; No Other Liens. Except for the security interest
granted to the Lender pursuant to this Agreement and the other Liens permitted
to exist on the Collateral pursuant to the Credit Agreement, the Borrower owns
each item of the Collateral free and clear of any and all Liens or claims of
others. No financing statement or other public notice with respect to all or any
part of the Collateral is on file or of record in any public office, except such
as have been filed in favor of the Lender pursuant to this Agreement or as are
permitted pursuant to the Credit Agreement.
3.2 Perfected First Priority Liens. Except with respect to
each Receivable with a related obligor that is a Government Authority, the
security interests granted pursuant to this Agreement (a) upon delivery to the
Lender of stock certificates or other documents representing the Pledged Stock
(together with undated stock powers duly executed in blank relating thereto),
delivery to the Lender of the Pledged Notes, duly endorsed in blank by the
Borrower and upon completion of the filings and other actions specified on
Schedule 5 will constitute perfected security interests in the Collateral in
favor of the Lenders as collateral security for the Obligations and (b) are
prior to all other Liens on the Collateral in existence on the date hereof
except for Permitted Liens and Liens described on Schedule 4.01(s) to the Credit
Agreement.
3.3 Inventory and Equipment. The Inventory and the Equipment
are kept at the locations listed on Schedule 6.
3.4 Chief Executive Office. The Borrower's chief executive
office is located at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxx 00000.
3.5 Farm Products. None of the Collateral constitutes, or is
the Proceeds of, Farm Products.
3.6 Accounts. No amount payable to the Borrower under or in
connection with any Account is evidenced by any Instrument or Chattel Paper
which has not been delivered to the Lender.
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(a) The place where the Borrower keeps its records concerning
its Accounts is at its chief executive office specified in Section 3.4.
(b) The amounts represented by the Borrower to the Lender from
time to time as owing to the Borrower in respect of the Accounts will at such
times be accurate in all material respects.
4. Covenants. The Borrower covenants and agrees with the
Lender that, from and after the date of this Agreement until the Obligations
shall have been paid in full and the Commitments shall have expired or otherwise
been terminated:
4.1 Delivery of Instruments and Chattel Paper. If any amount
payable under or in connection with any of the Collateral shall be or become
evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper
shall be immediately delivered to the Lender, duly indorsed in a manner
satisfactory to the Lender, to be held as Collateral pursuant to this Agreement.
4.2 Maintenance of Insurance. (a) The Borrower will maintain,
with financially sound and reputable companies, insurance policies (1) insuring
the Inventory, Equipment, Goods and satellites against loss by fire, explosion,
theft and such other casualties as may be reasonably satisfactory to the Lender
and (2) insuring the Borrower and the Lender against liability for personal
injury and property damage relating to such Inventory, Equipment, Goods and
satellites, such policies to be in such form and amounts and having such
coverage as may be reasonably satisfactory to the Lender, with losses payable to
the Borrower and the Lender as their respective interests may appear.
(b) Within 10 days of the Closing Date, the Borrower shall
provide evidence of insurance coverage reasonably satisfactory to the Lender and
all such insurance shall (1) provide that no cancellation, material reduction in
amount or material change in coverage thereof shall be effective until at least
30 days after receipt by the Lender of written notice thereof, (2) name the
Lender as an insured party, (3) to the extent available, include a breach of
warranty clause and (4) be reasonably satisfactory in all other respects to the
Lender.
4.3 Maintenance of Perfected Security Interest; Further
Documentation. (a) The Borrower shall maintain the security interest created by
this Agreement as a perfected security interest having at least the priority
described in Section 3.2 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) At any time and from time to time, upon the written
request of the Lender, and at the sole expense of the Borrower, the Borrower
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Lender may reasonably request for
the purpose of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted, including, without limitation, the
filing of any
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financing or continuation statements under the Uniform Commercial Code in effect
in any jurisdiction with respect to the security interests created hereby.
4.4 Changes in Locations, Name, etc. The Borrower will not:
(a) permit any of the Inventory, Equipment or Goods to be kept
at a location other than those listed on Schedule 6, except for satellites which
have been launched and are in, or will be launched and placed in, a low Earth
orbit;
(b) change the location of its chief executive office from
that specified in Section 3.4; or
(c) change its name, identity or organizational structure to
such an extent that any financing statement filed by the Lender in connection
with this Agreement would become seriously misleading;
unless, in each case, it shall have given the Lender at least 20 days' prior
written notice of such change and shall have delivered to the Lender at least 5
Business Days prior to such change duly executed financing statements in
accordance with the Uniform Commercial Code in form and substance reasonably
satisfactory to the Lender.
4.5 Further Identification of Collateral. The Borrower will
furnish to the Lender from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Lender may reasonably request, all in reasonable
detail.
4.6 Notices. As soon as it becomes aware of any matter listed
in clauses (a) or (b), the Borrower will advise the Lender promptly, in
reasonable detail, at their respective addresses for notices provided for in the
Credit Agreement of:
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral; and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the aggregate value
of the Collateral or on the security interests created hereby.
5. Provisions Relating to Receivables.
5.1 Borrower Remains Liable under Receivables. Anything herein
to the contrary notwithstanding, the Borrower shall remain liable under each of
the Receivables to observe and perform all the material conditions and
obligations to be observed and performed by it thereunder, all in accordance
with the terms of any agreement giving rise to each such Receivable. The Lender
shall not have any obligation or liability under any Receivable (or any
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agreement giving rise thereto) by reason of or arising out of this Agreement or
the receipt by the Lender of any payment relating to such Receivable pursuant
hereto, nor shall the Lender be obligated in any manner to perform any of the
obligations of the Borrower 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 it 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 it or to which it may be entitled at any time or times.
5.2 Analysis of Receivables. The Lender shall have the right
to make test verifications of the Receivables in any manner and through any
medium that it reasonably considers advisable, and the Borrower shall furnish
all such assistance and information as the Lender may reasonably require in
connection with such test verifications. The Lender may at any time after the
occurrence and during the continuance of an Event of Default communicate with
the obligors on the Receivables to verify with them to the Lender's satisfaction
the existence, amount and terms of any Receivables.
5.3 Collections on Receivables. (a) The Lender hereby
authorizes the Borrower to collect the Receivables, subject to the Lender's
direction and control, and the Lender may curtail or terminate said authority at
any time after the occurrence and during the continuance of an Event of Default.
If required by the Lender at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by the Borrower, (1) shall be forthwith (and, in any event, within two Business
Days) deposited by the Borrower in the exact form received, duly indorsed by the
Borrower to the Lender if required, in a Collateral Account maintained under the
sole dominion and control of the Lender, subject to withdrawal by the Lender
only as provided in Section 9.3, and (2) until so turned over, shall be held by
the Borrower in trust for the Lender, segregated from other funds of the
Borrower.
(b) Each such deposit of Proceeds of Receivables shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit.
(c) At the Lender's request, the Borrower shall deliver to the
Lender all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping receipts.
5.4 Representations and Warranties. (a) No amount payable to
the Borrower under or in connection with any Receivable is evidenced by any
Instrument or Chattel Paper which has not been delivered to the Lender.
(b) None of the obligors on any Receivables is a Governmental
Authority.
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(c) The amounts represented by the Borrower to the Lender from
time to time as owing to the Borrower in respect of the Receivables will at such
times be accurate in all material respects.
5.5 Covenants. (a) Other than in the ordinary course of
business consistent with its past practice, the Borrower will not (i) grant any
extension of the time of payment of any Receivable, (ii) compromise or settle
any Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable, (v) amend, supplement or modify
any Receivable in any manner that could materially and adversely affect the
value thereof or (vi) fail to exercise promptly and diligently each and every
material right which it may have under each agreement giving rise to a
Receivable (other than any right of termination).
(b) The Borrower will deliver to the Lender a copy of each
material demand, notice or document received by it that questions the validity
or enforceability of more than 5% of the aggregate amount of the then
outstanding Receivables.
6. Provisions Relating to Contracts.
6.1 Borrower Remains Liable under Contracts. Anything herein
to the contrary notwithstanding, the Borrower shall remain liable under each of
the Contracts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with and pursuant to
the terms and provisions of such Contract. The Lender shall not have any
obligation or liability under any Contract by reason of or arising out of this
Agreement or the receipt by the Lender of any payment relating to such Contract
pursuant hereto, nor shall the Lender be obligated in any manner to perform any
of the obligations of the Borrower under or pursuant to any Contract, to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to 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 it or to which it may be entitled at any time or times.
6.2 Communication With Contracting Parties. The Lender may at
any time after the occurrence and during the continuance of an Event of Default
communicate with parties to the Contracts to verify with them to the Lender's
satisfaction the existence, amount and terms of any Contracts.
6.3 Representations and Warranties. (a) No consent of any
party (other than the Borrower) to any Contract is required, or purports to be
required, in connection with the execution, delivery and performance of this
Agreement.
(b) Each Contract is in full force and effect and, to the best
of the Borrower's knowledge, constitutes a valid and legally enforceable
obligation of the parties thereto, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
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other similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Authority is required in connection with
the execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general
in nature.
(d) Except as otherwise set forth on Schedule 1, neither the
Borrower nor (to the best of the Borrower's knowledge) any of the other parties
to the Contracts is in default in the performance or observance of any of the
terms thereof in any manner that, in the aggregate, could reasonably be expected
to have a material adverse effect.
(e) The right, title and interest of the Borrower in, to and
under the Contracts are not subject to any defenses, offsets, counterclaims or
claims that, in the aggregate, could reasonably be expected to have a material
adverse effect on the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its Subsidiaries taken
as a whole.
(f) No amount payable to the Borrower under or in connection
with any Contract is evidenced by any Instrument or Chattel Paper which has not
been delivered to the Lender.
(g) None of the parties to any Contract is a Governmental
Authority.
6.4 Covenants. (a) The Borrower will not, without the Lender's
prior written consent, amend, modify, terminate or waive any provision of any
Contract in any manner which could reasonably be expected to materially
adversely affect the value of such Contract as Collateral.
(b) The Borrower will deliver to the Lender a copy of each
material demand, notice or document received by it relating in any way to any
Contract that questions the validity or enforceability of such Contract.
7. Provisions Relating to Intellectual Property.
7.1 Representations and Warranties. Schedules 2, 3 and 4 list
all material Intellectual Property that are registered Copyrights, Copyright
Licenses, Patents, Patent Licenses, registered Trademarks, Trademark Licenses
and other material Trademarks currently in use and/or owned by the Borrower in
its own name on the date hereof.
(a) On the date hereof, all material registered Copyrights,
Copyright Licenses, Patents, Patent Licenses, registered Trademarks, Trademark
Licenses and other material Trademarks currently in use or owned by the Borrower
are valid, subsisting, unexpired and
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enforceable, have not been abandoned and, to the best of the Borrower's
knowledge, do not infringe in any material respect the intellectual property
rights of any other Person, except as disclosed in Schedules 2, 3 and 4.
(b) Except as set forth in Schedules 2, 3 and 4, on the date
hereof, none of the Intellectual Property owned by Borrower is the subject of
any licensing or franchise agreement.
(c) Except as disclosed in Schedules 2, 3 and 4, on the date
hereof, no holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or the
Borrower's rights in, any Intellectual Property owned by Borrower in any respect
that could reasonably be expected to have a material adverse effect.
(d) Except as disclosed in Schedules 2, 3 and 4, no action or
proceeding is pending, or, to the knowledge of the Borrower, threatened, on the
date hereof (1) seeking to limit, cancel or question the validity of any
material registered Copyrights, Copyright Licenses, Patents, Patent Licenses,
registered Trademarks, Trademark Licenses and other material Trademarks
currently in use or owned by the Borrower or the Borrower's ownership interest
therein, or (2) which, if adversely determined, would have a material adverse
effect on the value of such Intellectual Property.
7.2 Covenants.
(a) The Borrower (either itself or through licensees) will (1)
continue to use each material Trademark on each and every trademark class of
goods applicable to its current line as reflected in its current catalogs,
brochures and price lists in order to maintain such Trademark in full force free
from any claim of abandonment for non-use, (2) maintain in all material respects
as in the past the quality of products and services offered under such
Trademark, (3) employ such Trademark with the appropriate notice of
registration, (4) not adopt or use any xxxx which is confusingly similar or a
colorable imitation of such Trademark unless the Lender shall obtain a perfected
security interest in such xxxx pursuant to this Agreement, and (5) not (and not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby such Trademark may become invalidated or otherwise impaired.
(b) The Borrower will not do any act, or omit to do any act,
whereby any material Patent may become abandoned or dedicated.
(c) The Borrower (either itself or through licensees) (1) will
employ each material Copyright and (2) will not do (and will use commercially
reasonable efforts to prevent any licensee or sublicensee thereof from doing)
any act or knowingly omit to do any act whereby any material portion of the
Copyrights may become invalidated or otherwise impaired. The Borrower will not
(either itself or through licensees) do any act whereby any material portion of
the Copyrights may fall into the public domain.
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(d) The Borrower will notify the Lender immediately if it
knows, or has reason to know, that any application or registration relating to
any material Copyright, Patent or Trademark may become abandoned or dedicated,
or of any adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any proceeding
in the United States Copyright Office, the United States Patent and Trademark
Office or any court or tribunal in any country) regarding the Borrower's
ownership of any material Copyright, Patent or Trademark or its right to
register the same or to keep and maintain the same.
(e) Whenever the Borrower, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Intellectual Property 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, the Borrower
shall report such filing to the Lender within five Business Days after the last
day of the fiscal quarter in which such filing occurs. Upon request of the
Lender, the Borrower shall execute and deliver any and all agreements,
instruments, documents, and papers as the Lender may reasonably request to
evidence the Lender's security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of the Borrower relating thereto or
represented thereby.
(f) The Borrower will take all commercially reasonable and
necessary steps, including, without limitation, in any proceeding before the
United States Copyright Office, the United States Patent and Trademark Office,
or any similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application (and to obtain the
relevant registration) and to maintain each registration of the material
Intellectual Property, including, without limitation, filing of applications for
renewal, affidavits of use and affidavits of incontestability.
(g) In the event that any material Intellectual Property owned
by Borrower is infringed, misappropriated or diluted by a third party, the
Borrower shall (i) take such actions as the Borrower shall reasonably deem
appropriate under the circumstances to protect such Intellectual Property and
(ii) if such Intellectual Property is of material economic value, promptly
notify the Lender after it learns thereof and, if the Lender so directs, xxx for
infringement, misappropriation or dilution, to seek injunctive relief where
appropriate and to recover any and all damages for such infringement,
misappropriation or dilution.
8. Provisions Relating to Pledged Securities.
8.1 Representations and Warranties. Except as disclosed on
Schedule 7 hereto, the shares of Pledged Stock pledged or to be pledged by the
Borrower hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by the Borrower.
(a) All the shares of the Pledged Stock have been duly and
validly issued and are fully paid and nonassessable.
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(b) To the best of the Borrower's knowledge, each of the
Pledged Notes constitutes the legal, valid and binding obligation of the obligor
with respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) The Borrower is the record and beneficial owner of, and
has good and marketable title to, the Pledged Securities pledged by it
hereunder, free of any and all Liens or options in favor of, or claims of, any
other Person, except the security interest created by this Agreement.
8.2 Covenants. (a) If the Borrower shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer or any Investment Property, whether in addition
to, in substitution of, as a conversion of, or in exchange for, any shares of
the Pledged Stock, or otherwise in respect thereof, the Borrower shall accept
the same as the agent of the Lender, hold the same in trust for the Lender and
deliver the same forthwith to the Lender in the exact form received, duly
indorsed by the Borrower to the Lender, if required, together with an undated
stock power covering such certificate duly executed in blank by the Borrower and
with, if the Lender so requests, signature guaranteed, to be held by the Lender,
subject to the terms hereof, as additional collateral security for the
Obligations; provided, however, that in no event shall the amount of Pledged
Stock held by the Lender hereunder exceed 65% of each class of Capital Stock of
any Foreign Subsidiary. After the occurrence and during the continuance of a
Default or Event of Default, any sums paid upon or in respect of the Pledged
Securities upon the liquidation or dissolution of any Issuer shall be paid over
to the Lender to be held by it hereunder as additional collateral security for
the Obligations, and in case any distribution of capital shall be made on or in
respect of the Pledged Securities or any property shall be distributed upon or
with respect to the Pledged Securities pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Lender, be delivered to the Lender
to be held by it hereunder as additional collateral security for the
Obligations. If any sums of money or property so paid or distributed in respect
of the Pledged Securities shall be received by the Borrower, the Borrower shall,
until such money or property is paid or delivered to the Lender, hold such money
or property in trust for the Lender, segregated from other funds of the
Borrower, as additional collateral security for the Obligations.
(b) Without the prior written consent of the Lender, the
Borrower will not (i) vote to enable, or take any other action to permit, any
Issuer to issue any stock or other equity securities of any nature or to issue
any other securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature of any Issuer,
(ii)
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except as permitted by the Credit Agreement, sell, assign, transfer, exchange,
or otherwise dispose of, or grant any option with respect to, the Pledged
Securities or Proceeds thereof, (iii) create, incur or permit to exist any Lien
or option in favor of, or any claim of any Person with respect to, any of the
Pledged Securities or Proceeds thereof, or any interest therein, except for the
security interests created by this Agreement or (iv) enter into any agreement or
undertaking restricting the right or ability of the Borrower or the Lender to
sell, assign or transfer any of the Pledged Securities or Proceeds thereof.
9. Remedies.
9.1 Notice to Obligors and Contract Parties. Upon the request
of the Lender at any time after the occurrence and during the continuance of an
Event of Default, the Borrower shall notify obligors on the Receivables and
parties to the Contracts that the Receivables and the Contracts have been
assigned to the Lender and that payments in respect thereof shall be made
directly to the Lender.
9.2 Proceeds to be Turned Over To Lender. In addition to the
rights of the Lender specified in Section 5.3 with respect to payments of
Receivables, if an Event of Default shall occur and be continuing all Proceeds
received by the Borrower consisting of cash, checks and other near-cash items
shall be held by the Borrower in trust for the Lender, segregated from other
funds of the Borrower, and shall, forthwith upon receipt by the Borrower, be
turned over to the Lender in the exact form received by the Borrower (duly
indorsed by the Borrower to the Lender, if required) and held by the Lender in a
Collateral Account maintained under its the sole dominion and control. All
Proceeds while held by the Lender in a Collateral Account (or by the Borrower in
trust for the Lender) shall continue to be held as collateral security for all
the Obligations and shall not constitute payment thereof until applied as
provided in Section 9.3.
9.3 Application of Proceeds. At such intervals as may be
agreed upon by the Borrower and the Lender, or, if an Event of Default shall
have occurred and be continuing, at any time at the Lender's election, the
Lender may apply all or any part of Proceeds held in any Collateral Account in
payment of the Obligations, and any part of such funds which the Lender elects
not so to apply and deems not required as collateral security for the
Obligations shall be paid over from time to time by the Lender to the Borrower
or to whomsoever may be lawfully entitled to receive the same. Any balance of
such Proceeds remaining after the Obligations shall have been paid in full and
the Commitments shall have expired or otherwise been terminated shall be paid
over to the Borrower or to whomsoever may be lawfully entitled to receive the
same.
9.4 Code Remedies. If an Event of Default shall occur and be
continuing, the Lender may exercise, in addition to all other rights and
remedies granted to it in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the Code. Without limiting the generality of
the foregoing, the Lender, without demand of performance or other demand,
presentment, protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or
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upon the Borrower or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker's board or office of
the Lender or elsewhere upon such terms and conditions as it may deem advisable
and at such prices as it may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Lender shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Borrower,
which right or equity is hereby waived or released. The Borrower further agrees,
at the Lender's request, to assemble the Collateral and make it available to the
Lender at places which the Lender shall reasonably select, whether at the
Borrower's premises or elsewhere. The Lender shall apply the net proceeds of any
action taken by it pursuant to this Section, after deducting all reasonable
costs and expenses of every kind incurred in connection therewith or incidental
to the care or safekeeping of any of the Collateral or in any way relating to
the Collateral or the rights of the Lender hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Lender may elect, and
only after such application and after the payment by the Lender of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Lender account for the surplus, if any, to the
Borrower. To the extent permitted by applicable law, the Borrower waives all
claims, damages and demands it may acquire against the Lender arising out of the
exercise by it of any rights hereunder. If any notice of a proposed sale or
other disposition of Collateral shall be required by law, such notice shall be
deemed reasonable and proper if given at least 10 days before such sale or other
disposition.
9.5 Certain Regulatory Requirements. With respect to all FCC
Licenses (1) owned or held by the Borrower (if any) or (2) if owned by another
Person, to the extent of any right or interest (including, without limitation,
any "right to use" such FCC Licenses) that the Borrower may own or hold with
respect thereto:
(a) The Borrower shall take all action that the Lenders may
reasonably request in the exercise of its rights and remedies hereunder, which
include the right to require the Borrower to transfer or assign (1) the FCC
Licenses (to the extent the Borrower owns any FCC Licenses) or (2) to the extent
such FCC Licenses may be owned by another Person, any right or interest
(including, without limitation, any "right to use" such FCC Licenses) that the
Borrower may own or hold with respect thereto, to any party or parties. In
furtherance of this right, the Borrower shall (1) cooperate fully with the
Lender in obtaining all approvals and consents from the FCC, each other
Governmental Authority or any other Person that the Lender may reasonably deem
necessary or advisable to accomplish any such transfer or assignment of such FCC
Licenses or, if applicable, whatever right or interest (including, without
limitation, any "right to use" such FCC Licenses) the Borrower may hold with
respect thereto, and (2) prepare, execute and file with the FCC, any other
Governmental Authority or any other Person any application, request for consent,
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certificate or instrument that the Lender may reasonably deem necessary or
advisable to accomplish any such transfer or assignment of such FCC Licenses or,
if applicable, whatever right or interest (including, without limitation, any
"right to use" such FCC Licenses) the Borrower may hold with respect thereto. If
the Borrower fails to execute such applications, requests for consent,
certificates or instruments, the clerk of any court that has jurisdiction over
the Collateral Documents may execute and file the same on behalf of the
Borrower.
(b) Notwithstanding anything to the contrary contained herein,
(1) the Lender will not take any action hereunder that would
constitute or result in any transfer of control of the FCC Licenses
without obtaining all necessary FCC and other Governmental Authority
approvals. The Lender shall be entitled to rely on the advice of FCC
counsel selected by it to determine whether FCC approval or other
Governmental Authority approvals are required, and
(2) the Lender shall not foreclose on, sell, transfer or
otherwise dispose of, or exercise any right to control the FCC Licenses
as provided herein, unless such action is taken in accordance with the
provisions of the Communications Act of 1934, as from time to time
amended, and the applicable rules, regulations and policies of the FCC
and any other Governmental Authority.
(c) The Borrower acknowledges that the approval of the FCC,
each other appropriate Governmental Authority and each other appropriate Person
to the assignment of the FCC Licenses, or the Borrower's rights and interests
therein, is integral to the Lender's realization of the value of the Collateral,
including the FCC Licenses and the Borrower's rights and interests therein, that
there is no adequate remedy at law for failure by the Borrower to comply with
the provisions of this Section 9.5 and that such failure could not be adequately
compensable in damages. Therefore, the Borrower agrees that the provisions of
this Section 9.5 may be specifically enforced.
10. Lender's Appointment as Attorney-in-Fact; Lender's
Performance of Borrower's Obligations.
10.1 Powers. The Borrower hereby irrevocably constitutes and
appoints the Lender and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of the Borrower and in the name of
the Borrower or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, the Borrower hereby gives the Lender the power and right, on behalf
of the Borrower, without notice to or assent by the Borrower, to do any or all
of the following:
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(a) in the name of the Borrower or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under
any Receivable or Contract or with respect to any other Collateral and
file any claim or take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the Lender for the
purpose of collecting any and all such moneys due under any Receivable
or Contract or with respect to any other Collateral whenever payable;
(b) in the case of any Copyright, Patent or Trademark, execute
and deliver any and all agreements, instruments, documents and papers
as the Lender may reasonably request to evidence the Lender's security
interest in such Copyright, Patent or Trademark and the goodwill and
general intangibles of the Borrower relating thereto or represented
thereby;
(c) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of
the premiums therefor and the costs thereof;
(d) execute, in connection with any sale provided for in
Section 9.4, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(e) (1) direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due or to become
due thereunder directly to the Lender or as the Lender shall direct;
(2) ask or demand for, collect, receive payment of and receipt for, any
and all moneys, claims and other amounts due or to become due at any
time in respect of or arising out of any Collateral; (3) sign and
indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of
the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any thereof and to enforce any other right
in respect of any Collateral; (5) defend any suit, action or proceeding
brought against the Borrower with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and,
in connection therewith, to give such discharges or releases as the
Lender may deem appropriate; (7) assign any Intellectual Property
(along with the goodwill of the business to which any such Intellectual
Property pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the Lender shall in its sole
discretion determine; and (8) generally, sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Lender were the
absolute owner thereof for all purposes, and do, at the Lender's option
and the Borrower's expense, at any time, or from time to time, all acts
and things which the Lender deems necessary to protect, preserve or
realize upon the Collateral and its security interests therein and to
effect the intent of this Agreement, all as fully and effectively as
the Borrower might do.
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Anything in this Section to the contrary notwithstanding, the Lender
agrees that it will not exercise any rights under the power of attorney provided
for in this Section unless an Event of Default shall have occurred and be
continuing.
10.2 Performance by Lender of Borrower's Obligations. If the
Borrower fails to perform or comply with any of its agreements contained herein,
the Lender, at its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such agreement.
10.3 Borrower's Reimbursement Obligation. The expenses of the
Lender incurred in connection with actions undertaken as provided in this
Section, together with interest thereon at a rate per annum equal to the rate
per annum at which interest would then be payable on past due Advances under the
Credit Agreement, from the date of payment by the Lender to the date reimbursed
by the Borrower, shall be payable by the Borrower to the Lender on demand.
10.4 Ratification; Power Coupled With An Interest. The
Borrower hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. All powers, authorizations and agencies contained in
this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the security interests created hereby are released.
11. Duty of Lender. The Lender's sole duty with respect to the
custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the Code or otherwise, shall be to deal with
it in the same manner as the Lender deals with similar property for its own
account. The Lender and its officers, directors, employees or agents shall not
be liable for failure to demand, collect or realize upon any of the Collateral
or for any delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Borrower or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof. The powers conferred on the Lender hereunder are
solely to protect the Lender's interests in the Collateral and shall not impose
any duty upon the Lender to exercise any such powers. The Lender shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to the Borrower for any act or failure
to act hereunder, except for its own gross negligence or willful misconduct.
12. Execution of Financing Statements. Pursuant to Section
9-402 of the Code, the Borrower authorizes the Lender to file financing
statements with respect to the Collateral without the signature of the Borrower
in such form and in such filing offices as the Lender reasonably determines
appropriate to perfect the security interests of the Lender under this
Agreement. A carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement for filing in any jurisdiction.
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13. Notices. All notices, requests and demands to or upon the
Lender or the Borrower hereunder shall be effected in the manner provided for in
Section 7.02 of the Credit Agreement.
14. 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.
15. Amendments in Writing; No Waiver; Cumulative Remedies.
15.1 Amendments in Writing. None of the terms or provisions of
this Agreement may be waived, amended, supplemented or otherwise modified except
by a written instrument executed by the Borrower and the Lender, provided that
any provision of this Agreement imposing obligations on the Borrower may be
waived by the Lender in a written instrument executed by the Lender.
15.2 No Waiver by Course of Conduct. The Lender shall not by
any act (except by a written instrument pursuant to Section 15.1), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy
hereunder or to have acquiesced in any Default or Event of Default. No failure
to exercise, nor any delay in exercising, on the part of the Lender, any right,
power or privilege hereunder shall operate as a waiver thereof. No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Lender
would otherwise have on any future occasion.
15.3 Remedies Cumulative. The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
16. Releases. At such time as the Obligations shall have been
paid in full the Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly stated to survive
such termination) of the Lender and the Borrower hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Borrower. At the request and
sole expense of the Borrower following any such termination, the Lender shall
deliver to the Borrower any Collateral held by the Lender hereunder, and execute
and deliver to the Borrower such documents as the Borrower shall reasonably
request to evidence such termination.
17. Section Headings. The Section headings used in this
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
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18. Successors and Assigns. This Agreement shall be binding
upon the successors and assigns of the Borrower and shall inure to the benefit
of the Lender and its successors and assigns.
19. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.
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IN WITNESS WHEREOF, the undersigned has caused this Security Agreement
to be duly executed and delivered as of the date first above written.
ORBCOMM GLOBAL, L.P.
By:_________________________________
Name:
Title: Chief Executive Officer
By: Teleglobe Mobile Partners
Its General Partner
By: Teleglobe Mobile Investment, Inc.
Its Managing Partner
By:_________________________________
Name: Xxxxx Xxxxxxxxxxx
Title:
